Sydney, Feb 19, 2026, 16:57 AEDT — Market closed.
Shares in Zip Co Ltd (ASX:ZIP) tumbled 34.4% to A$1.85 on Thursday, wiping out value after the BNPL company flagged a mostly flat profit run-rate for the second half—something investors quickly took as putting a lid on any short-term gains. That sharp loss stood out, with the S&P/ASX 200 actually finishing the session 0.88% higher.
Zip’s latest shift stands out; this is a stock that’s been behaving like a turnaround play, where investors show little patience for any slip-up. Even a minor miss, or a single careful comment about the second half, can rattle sentiment here. After all, Zip has a history of sharp reactions to even slight variations in guidance.
Australia’s reporting season is in full swing, with investors snapping up stocks that deliver clear beats and selling off on the slightest hint of trouble. Zip has the spotlight—profitability and U.S. expansion are the focus, and the market’s tracking both closely.
Zip posted cash EBTDA of A$124.3 million for the half-year to Dec. 31, as detailed in its investor presentation. Total transaction volume reached A$8.4 billion. That figure represents the total dollar value of processed purchases. Cash EBTDA, which leaves out tax, non-cash items and interest, climbed as the company’s operating margin hit 18.7%. Net bad debts accounted for 1.7% of TTV. Customer numbers stood at 6.6 million, and Zip counted 90.6 thousand merchants on its platform.
Still, the market gauge ended up. Zip posted cash operating earnings of A$124.3 million, falling short of the Visible Alpha consensus at A$128.4 million. Shares tumbled as low as A$1.743—hitting their lowest mark since early May 2025 and marking the sharpest intraday drop since mid-November 2014. Citi flagged that Zip’s guidance points to full-year cash operating earnings of roughly A$248 million, shy of the Visible Alpha forecast of A$260.6 million.
Friday, attention turns to broker models—will they drop in response to the new implied full-year forecast, or do the raised margin targets keep the bull case going? Credit risk remains in focus too. For BNPL lenders, shifts in spending or tighter underwriting can make bad-debt numbers jump fast.
There’s a simple risk here: when funding costs climb or credit losses tick up, Zip’s margin upgrade story can come undone. The market doesn’t hesitate to re-price BNPL names quickly if that occurs.
Competition remains fierce, especially stateside, as Zip ramps up its efforts. The U.S. market is packed with heavyweight players like Block’s Afterpay and Affirm, both flush with capital. Merchants aren’t short on choices for payment and installment offerings.
Zip CEO Cynthia Scott said the company is “continu[ing] to increase profitability at scale,” highlighting growth in the U.S. and a broader lineup of offerings. Pay‑in‑2 is expanding to all U.S. customers this month. The company also pointed to recent big-name merchant signings—Temu, JD Sports, GOAT Group among them. Since August, Zip has brought on more than 1,400 merchants via its Stripe partnership. After filing a confidential draft registration statement with the U.S. SEC in November, Scott said a potential U.S. dual listing would only be pursued if it benefits shareholders. The next major update lands April 17, with the third-quarter check-in.
