SYDNEY, August 20, 2026, 11:08 AEST — Zip Co Limited ASX:ZIP shares jumped 15.5% after the payments group posted record FY26 cash earnings and set a higher FY27 profit target. The stock traded at A$2.98 at 10:39 AEST, after reaching A$3.01.
- FY26 cash EBTDA rose 57.9% to A$268.9 million.
- FY27 guidance calls for A$340 million, implying 26% growth.
- Twelve analysts rate Zip a Strong Buy, with an A$4.06 average target.
The result clears the old earnings bar. It also creates a tougher one. Cash EBTDA growth is guided to slow by about 32 percentage points, while US transaction growth should ease from 42.5% to more than 30%.
That deceleration matters more than the headline beat. Zip now trades on execution against a larger earnings base, not on a recovery narrative. The company still expects margin support to offset slower volume growth.
| Market snapshot | Value | Investor read |
|---|---|---|
| Price | A$2.98 | 10:39 AEST, delayed |
| Session change | +15.5% | Post-results re-rating |
| Day range | A$2.87–A$3.01 | Trading near session high |
| 52-week range | A$1.375–A$4.93 | About 40% below the high |
| Average analyst target | A$4.06 | 36.2% above A$2.98 |
Total transaction value rose 27.2% to A$16.65 billion. Revenue increased 24.7% to A$1.34 billion. Operating margin widened 420 basis points to 20.0%, showing that volume growth carried meaningful operating leverage.
| FY26 scorecard | FY26 | Year-on-year |
|---|---|---|
| Total transaction value | A$16.65bn | +27.2% |
| Revenue | A$1.34bn | +24.7% |
| Cash EBTDA | A$268.9m | +57.9% |
| Operating margin | 20.0% | +420bp |
| Statutory NPAT | A$116.4m | +45.7% |
| Net bad debts / TTV | 1.77% | +25bp |
The US remained the engine. US transaction value rose 42.5% in US-dollar terms, and US cash earnings climbed 51.4%. ANZ cash earnings nearly doubled to A$69.5 million.
Group Chief Executive Cynthia Scott said, “Consistent execution has built the platform to deliver our next phase of growth and innovation.” The company linked its FY27 plan to product expansion and tighter operating discipline. Zip results statement
| Growth and margin bridge | FY26 actual | FY27 guidance | Change in bar |
|---|---|---|---|
| US TTV growth | 42.5% | More than 30% | At least 12.5pp slower |
| Cash EBTDA growth | 57.9% | 26% | About 31.9pp slower |
| Operating margin | 20.0% | 20%–22% | Flat to +200bp |
| Cash net transaction margin | 3.9% | 3.8%–4.0% | Broadly stable |
| Revenue margin | 8.1% | About 8% | Stable |
Capital returns add a smaller tailwind. Zip completed A$150 million of buybacks in FY26 and authorised up to A$50 million more. The new programme equals roughly 1.6% of its A$3.21 billion market value.
The balance sheet offers room to act. Available cash and liquidity rose to A$246.5 million from A$137.8 million. Management is also considering a US dual listing and may seek approval for a share consolidation at the 2026 annual meeting.
| Analyst recommendation | Firm | Rating | Target | Date |
|---|---|---|---|---|
| Siraj Ahmed | Citi | Buy | A$3.55 | Jul. 20 |
| Julian Mulcahy | RBC Capital | Buy | A$4.40 | Jul. 17 |
| Lucy Huang | UBS | Buy | A$4.10 | Jul. 10 |
| Hal Goetsch | B. Riley | Buy | A$4.70 | Jul. 8 |
| 12-analyst consensus | — | Strong Buy | A$4.06 | Jul. 20 update |
The consensus target implies 36.2% upside from A$2.98. Yet the target set predates the FY26 release. Investors will therefore watch whether brokers lift forecasts after testing management’s slower growth assumptions.
Risks: Net bad debts rose 25 basis points to 1.77% of transaction value. Revenue margin slipped to 8.1%. A sharper US slowdown, weaker consumer credit or higher funding costs could erase the planned margin gains.
The next operating checkpoint arrives with first-quarter FY27 results on October 23. For now, the price move reflects a credible profit base. The harder test is preserving 20%–22% margins as growth normalises.
Related articles: Earnings
ASX:ZIP · FY26 outcome
Record profit logged. Growth pace eases.
Delayed ASX price; market open
Stock price
The day's range is A$2.87 to A$3.01.
The 52-week range stands between A$1.375 and A$4.93.
FY26 cash EBITDA
Operating margin rose to 20.0%, an increase of 420 basis points.
Analyst target
Among twelve analysts, eight rate it as Strong Buy and four as Buy, with none recommending Hold or Sell.
Growth rate adjusted downward for FY27
Investors welcomed the record base. The upcoming challenge will be maintaining margins close to 20% as US volume and cash earnings growth slow.
FY26 operating results
Management outlook for FY27
Ladder of targets
Consensus targets received their latest update on July 20, ahead of the FY26 release. The next key indicator will be any post-result revisions.
Risk tracker
Plans for margin growth could be offset if the US economy slows more than expected, if consumer credit weakens, or if funding costs rise. Results for the first quarter of FY27 are due on 23 October 2026.
