Zip CO (ASx:Z1P) - CEO, Larry Diamond (front)) - The Market Herald
CEO, Larry Diamond (front))
Source: Retailbiz
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  • Zip Co (Z1P) has broken a new record, racking up a $71.7 million in quarterly revenue in Q1 FY21
  • The buy now, pay later (BNPL) service said that was its best quarterly result on record, with transaction volume also hitting a new high of $943.1 million
  • In addition, the ASX-200 lister said its monthly arrears dropped from 1.33 per cent in June to 0.91 per cent in September
  • Along with strong financials, the September quarter also marked Zip's biggest expansion to date —into the $5 trillion U.S. market
  • The company bought fellow BNPL service Quad Pay for over $400 million during Q1
  • Zip also signed on to become a principal issuer with Visa — the world's leading global payment company
  • Despite the update, shares in Z1P are down 5.06 per cent, trading for $7.50

Growing buy now, pay later service Zip Co (Z1P) has hit a new revenue and transaction volume record in the September quarter.

Quarterly results

The fintech company has released a quarterly update showing it managed to bring in $71.7 million in quarterly revenue over Q1 FY21.

Zip said that was its best quarterly result on record and represented an 88 per cent increase on Q1 FY19.

The ASX 200-lister's transaction volume also hit a new high, totalling $943.1 million in the September quarter — an increase of 96 per cent year on year.

All up, the buy now, pay later (BNPL) service's annual transaction volume now sits at around $3.4 billion.

The boost in those figures comes as Zip increased both its customer and merchant base by 10 per cent and 12 per cent, respectively, quarter on quarter.

Along with the increase in revenue and transactions, Zip Co said it also saw a drop in the number of monthly arrears.

In June the number of arrears sat at around 1.33 per cent, while in September that figure had reduced to 0.91 per cent.

It's a welcome decrease for the fintech stock, as arrears are often a future indicator of losses for the company.

Quarterly activities

June to September saw the company make a number of strategic advances in its business, including entering the estimated $5 trillion BNPL market in the U.S.

Zip Co bought leading North American BNPL service Quad Pay for over $400 million during the September quarter, giving it access to the lucrative market.

The financial stock said this acquisition had already brought in over $23 million in revenue alone over the period, as well as 2.2 million customers.

The fintech company also used the last few months to sign a partnership with leading global payment provider Visa to become a principal issuer.

Additionally, Zip inked a deal with world-leading martetplace eBay to launch Zip Business —an opportunity for small business across Australia to access capital.

Looking ahead, the company said its second-quarter was already off to a strong start and it was well-positioned to capitalise off the holiday season.

"The current quarter has begun solidly in all markets, which is seasonally the strongest as we run-up to Prime Day, Black Friday, Cyber Monday, Christmas and Boxing Day," Zip CEO Larry Diamond said.

"Customers are continuing to increase their online spend in response to COVID-19 supported by Zip’s products that provide a better and fairer, digital alternative to the credit card," he added.

Despite the update, shares in Z1P are down 5.06 per cent, trading for $7.50 at 11:54 am AEDT.

Z1P by the numbers
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