Australian buy-now-pay-later provider Zip Co. has announced a significant reduction in its annual loss and expressed confidence in achieving positive earnings in the first half of its current fiscal year.
In the 12 months ending in June, Zip reported a net loss of AUD 401.0 million, marking a 60% decrease from the previous year's loss of AUD 1.015 billion. The company's revenue also saw a 16% increase to AUD 693.2 million on a continuing operations basis.
Although Zip had already disclosed unaudited revenue figures for its last two quarters, it did not declare a dividend.
Analysts had forecasted a net loss of AUD 324.1 million with revenue of AUD 723.9 million, according to data compiled by FactSet. However, the market does not anticipate a statutory profit from Zip until fiscal 2026.
After excluding one-off items such as the AUD 821.1 million impairment of goodwill and intangibles in fiscal year 2022, Zip reported an adjusted pre-tax loss of AUD 204.7 million on an underlying basis.
The company's core-business revenue margin expanded to 7.8% of total transaction value, up from 7.2% in the previous year. Additionally, net bad debts as a percentage of total transaction value decreased to 2.0% from 2.7% in fiscal year 2022, primarily driven by a decline in U.S. bad debts.
Looking ahead, Zip expects to achieve positive cash earnings in the first half of fiscal year 2024, which began on July 1.
