Zip shares dip despite soaring earnings, transactions

Total transaction value swelled by more than a third to $8.4 billion following strong growth in its US business, prompting chief executive and managing director Cynthia Scott to announce her relocation to the US in the second half of 2026.

"This move reflects our growing presence and significant growth opportunity in the US market, our primary earnings driver," Ms Scott told shareholders at an earnings briefing.

"I look forward to deepening engagement with key us stakeholders, including our customers, merchants, strategic partners and investors."

Still, Zip shares sold off sharply at the open, and dropped more than 35 per cent in the first hour of trade, as investors digested its rising cost of sales and $19.2 million in bad debts.

By 11am (AEDT), Zip shares were trading at $1.82, compared with Wednesday's close of $2.82.

Net bad debts were 1.7 per cent of total transaction value, and remained comfortably within management targets, while US customers grew by 10 per cent, Ms Scott said.

"Consistent with our increasing frequency, we're seeing strong growth in everyday spend categories such as groceries, healthcare, education and utilities," she said.

"We're also seeing higher spend across all age cohorts, with the strongest growth amongst more mature customers, including in discretionary categories such as restaurants, travel and entertainment."Zip was confident bad debts would remain in the upper half of the targeted range in the second half, US chief executive Joe Heck said.

"We see a tremendous opportunity to lean further into everyday, non-discretionary spend, given the mismatch between the income structures and the rising essential costs everyday Americans are facing," Mr Heck told shareholders.

"While we are supporting customers today in the point-of-sale instalment credit market, there are additional opportunities for us to meet even more of our customers' cash flow needs."

Zip's leadership is still considering a dual listing in the US, but said it would only consider it "when in the best interests of shareholders".