Zip Co has returned to cash-earnings profitability in the first quarter for the first time since interest rates started rising from near zero.
The buy now, pay later company said on Tuesday it expected to be cash earnings positive for 2023/24, rather than just for the second half of the financial year.
Zip Group chief executive and managing director Cynthia Scott said the company had enjoyed a particularly strong start to the year, with a strong performance in both of its core markets, Australia and New Zealand and the US and Canada.
First-quarter revenue was up 10.2 per cent to $201.9 million, with Americas revenue growing 18.1 per cent to $97.8 million and ANZ revenue up 3.7 per cent to $104.1.
Transactions were down 0.4 per cent to 18 million but transaction volume grew 4.7 per cent to $2.29 billion.
Its active customers were down 0.9 per cent to 6.1 million, which Zip attributed to prior adjustments to its credit risk settings.
Zip's Australian arrears rate - the percentage of debt more than 60 days past due - trended down during the quarter, dipping to 3.12 per cent, from 3.53 per cent.
RBC Capital Markets analyst Wei-Weng Chen said the result demonstrated strong momentum along with a strong revenue margin of 8.9 per cent, significantly up from the previous quarter.
At 2pm AEDT, Zip shares were up 10.8 per cent to a two-month high of 33.25c.
