Australia's Zip rises on robust annual forecast, first-half cash earnings

(Reuters) - Shares of Zip Co climbed nearly 16% on Tuesday after the Australia-based digital financial services firm said its first-half cash earnings more than doubled, and released its annual earnings forecast, which exceeded consensus expectations.

The company's earnings before taxes, depreciation and amortization (EBTDA) for the six-month period ended December 31 came in at A$67 million ($42.46 million), higher than A$30.8 million reported a year earlier.

The growth was driven by higher total transaction volumes and revenue, as well as improved debt arrears performance.

Zip's U.S. business saw a 40.3% increase in transaction volumes during the first half, fuelled by a strong holiday trading period and enhanced customer engagement. Meanwhile, the company's ANZ business also returned to growth in the second quarter.

Zip said it expects to deliver cash EBTDA of at least A$147 million for fiscal 2025, nearly 2% ahead on Visible Alpha consensus expectations.

As of 0126 GMT, shares of the company posted their biggest one-day percentage jump since January 2024, and were the top performers in the ASX 200 benchmark index, which was down 0.9%.

($1 = 1.5778 Australian dollars)

(Reporting by Nichiket Sunil in Bengaluru; Editing by Sherry Jacob-Phillips)

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