“We are extremely pleased to deliver another exceptional set of numbers with the quarter really delivering a significant step change for the company, confirming our position as one of the fastest-growing players in the sector,” chief executive Larry Diamond said.
The results come amid a boom in the buy now, pay later (BNPL) sector, where Zip is a key domestic rival to market darling Afterpay. BNPL operators are rushing to gain scale by expanding outside the relatively limited market of Australia, and Zip said it was one of the fastest-growing BNPL businesses in the US. It also launched a United Kingdom business last month, and it said this was a key strategic focus for the company.
Mr Diamond said its results in the US — where revenue and transaction volumes and values all rose by more than 200 per cent — were “particularly exciting”.
While more than half of Zip’s revenue and customers are still in Australia and New Zealand, the US business Quadpay has been growing at a faster pace, and the potential market is much larger. Zip’s US revenue jumped 207 per cent to $47.6 million, while the value of its transactions in the US grew by 217 per cent.
In Australia, revenue rose 43 per cent to $52.2 million, and the value of transactions on its platform rose by 60 per cent. It said 0.95 per cent of its Australian accounts were more than 60 days behind on repayments, compared with 1.58 per cent a year earlier.
The BNPL business — in which lenders offer instalment loans to consumers, and charge merchants a fee for the service — has posted rapid growth in recent years, as the popularity of credit cards has waned, especially among younger customers. Mr Diamond said the company was “extremely well placed” to continue its momentum into 2021, citing a “global shift away from the broken credit card model”.
Zip has also recently wrapped up a $176.7 million equity raising, and it will spend most of the capital on pursuing growth in the US market.
