Zip Co’s Turnaround Is No Longer a Bet – It’s Delivering Profit at Scale

Zip Co’s record cash EBTDA of $65.1 million in Q3 FY25 is not just a number — it’s proof the company has crossed the threshold from survival to scalability. The 41.5% year-on-year jump in earnings, paired with an operating margin expansion to 19.4% from 16.5%, confirms profitability is no longer aspirational. It is structural.

This isn’t growth bought with risk. Net bad debts held steady at 1.9% of transaction volume even as total volume climbed 22.4% to $4.0 billion. Active customers reached 6.5 million, up 3.5%. The machine is running hotter and cleaner.

The US segment is the engine. Transaction volume and revenue there surged more than 43% year-on-year in local currency, outpacing the group average and silencing earlier skepticism about Zip’s ability to scale profitably in a fragmented market. Credit losses in the US are expected to drop below 1.75% in Q4 — a sign unit economics are tightening, not fraying.

Management has responded with confidence. FY26 group cash EBTDA guidance is now set at no less than $260 million, a clear signal of sustained momentum. The company has already repurchased $21 million of its shares under a $50 million buyback program, a pivot from the $217 million equity raise just a year ago. That shift — from raising capital to returning it — speaks louder than any forecast.

Funding markets agree. Zip issued $300 million in notes in Australia at what management called attractive terms, extending its runway and signaling improved credit confidence. Refinancing efforts in the US are ongoing, with updates expected soon.

ZMobile, a new capital-light product in Australia and New Zealand, and enterprise AI adoption across 95% of employees, suggest Zip is building beyond point-of-sale financing. But the real story is simpler: the company is now profitable, growing, and trusted by investors on both sides of the balance sheet.

The share price has climbed 52.92% in a month, closing at A$2.36. It remains 30% lower year-to-date, a reminder of how far it has fallen — and how far it has come. The turnaround is no longer a narrative. It’s the financials.