Zip Co Ltd (ASX:Z1P) continues to arouse investor interest in the market at a time when the broader stock market is under pressure. The company reiterating renewed focus on investing in growth is the latest catalyst strengthening the stock’s sentiments in the market. Likewise, robust revenue growth, as well as a record transaction volume, continues to excite investors, consequently strengthening the stock’s sentiments in the market.
Half year Results
According to the managing director Larry Diamond, the December half marked yet another record for the company thanks to hard work and dedication of the entire zip team. The company experienced growth in all segments right from customer engagement to transactions, as well as in-store volume and revenue. Conversely, the company is well ahead of expectations when it comes to seeing significant growth opportunities in New Zealand and U.K markets.
For the six months ended December 31, 2019, Zip Co Limited recorded record revenues of $69.6 million up 103% year over year. Conversely, the company registered record transaction volume of $964.7 million up 95%. Zip Co Limited is forecasting transaction volumes of $2.3 billion for the second half of its fiscal year.
Gross receivables totaled $1.04 million, up 52% from $682.6 million reported a year earlier. Customer receivables, on the other hand, totaled $997 million up 46%. Zip Co Limited generated a positive cash EBITDA of $1.5 million compared to $2.4 million generated a year earlier. During the period, the company also completed its first issuance of the Zip Master Trust consequently raising $475 million, the largest issuance by a fintech.
Some of the key milestones achieved in 2019 include a 95% growth in transaction volume as well as a 140% growth in transactions. Likewise, the company launched its brand campaign, conversely raising brand awareness. Product innovation allowed the company to enjoy strong demand for the ZIP Biz with app transacting 3x more in the month.
The global expansion came into play with Zip Co Limited expanding its footprint into New Zealand. Customer number in the country are up 81%, with transacting margins increasing 2%. The company also succeeded in onboarding Australia and New Zealand clients under regional agreements.
The acquisition of BNPL technology platform PartPay Limited allowed Zip Co Limited to provide Zip exposure to four key geographies of New Zealand, United Kingdom, as well as the United States of America and South Africa. Similarly, Zip Co Limited completed the acquisition of SME lender Spotcap in Australia and New Zealand. With the acquisition, the company gains access to a market-leading commercial credit decision-making engine.
Zip Co Limited has also continued to bolster its executive team as it moves into the next phase for growth. Anna Buber Farovich, formerly with Google and Marvel technology, has since joined the company with over 15 years’ experience of transformational HR.
Hamish Moline has also joined the company with over 20 years of experience in digital brand experience in partnership and global expansion. Steve Brennen, formerly the director of marketing at Uber, has also joined the company to the position of the Chief Customer Officer.