In a time of heightened global market volatility, Australian BNPL fintech firm Zip Co Ltd (ASX: ZIP) has delivered a surprisingly strong earnings report. According to the company’s latest financial results released today, Zip posted an EBITDA of AUD 46 million for the quarter ended March 31, 2025 — a 219.4% increase year-on-year, reaching a record high. Boosted by this news, the company’s share price surged over 18% intraday, making it one of the top performers on the ASX benchmark index.
This result not only injects renewed energy into the lagging tech sector but also signals to investors that BNPL’s flexibility and cross-market scalability remain viable and profitable, even in an inflationary and interest rate–uncertain environment.
▲ U.S. Market as the “Growth Engine”
Zip’s strong momentum is largely driven by the outstanding performance of its U.S. subsidiary. In this quarter alone, its U.S. operations generated USD 108.5 million in revenue, marking a 44.1% year-on-year increase. Total Transaction Volume (TTV) also rose by 40.2% year-on-year to USD 1.5 billion.
This highlights the continued resilience of the BNPL model in the U.S., where consumers face rising interest rates and inflation. The shift away from traditional credit products toward more transparent, interest-free payment options is becoming increasingly appealing. This trend lends broader confidence to the BNPL industry, especially during times of economic pressure.
▲ A More Mature Profit Model and Improved Financials
At a group level, Zip’s total revenue grew by 26.5% year-on-year to AUD 278.9 million, showing that the business is no longer reliant on “burning cash for growth” like a startup. The company also raised its FY2025 EBITDA forecast from AUD 147 million to at least AUD 153 million.
Worth noting is Zip’s recently announced AUD 30 million stock buyback plan — a rare move in the tech sector, reflecting the management team’s confidence in future cash flow and shareholder returns.
UBS analysts commented that, considering Zip’s current growth trajectory, “the revised forecast still appears conservative,” indicating room for further upside.
▲ Policy Risks Remain, But Zip Shows Signs of Resilience
However, investors should remain mindful of macro and geopolitical uncertainties. As UBS warned, “following the Trump administration’s announcement of new tariffs in early April, Zip faces notable uncertainty in Q4.” Such policy changes could impact cross-border operations, consumer spending, and cost structures — especially for high-growth models like BNPL.
Nevertheless, Zip’s diversified market presence (notably its dual engines in Australia and the U.S.), steady user growth, and increasingly profitable model suggest it is well-positioned to withstand these pressures.
• Investor Takeaways: A Strategic Window in BNPL’s “Shakeout Phase”
Investor Takeaways: A Strategic Window in BNPL’s “Shakeout Phase”
Over the past few years, the BNPL industry has shifted from “cash-burning expansion” to “realized profitability.” While larger players like Affirm and Afterpay (now a subsidiary of Block) may be nearing growth plateaus, more grounded and regionally focused companies like Zip are gaining investor attention during the industry’s reshuffle.
▲ Business Recommendations:
• Value investors should closely monitor Zip’s penetration in North America and customer retention behavior, as key indicators of sustainable growth;
• Short-term traders may take advantage of earnings-driven momentum, but should remain cautious of policy-related volatility;
• Long-term strategic investors could consider Zip a representative of the BNPL industry’s “second-wave dividend phase,” and use its transformation journey as a benchmark to evaluate other similar firms.
▲ Conclusion: Zip’s Breakout Results Reflect a New Chapter for the BNPL Industry
Zip’s explosive quarterly performance and market response symbolize the BNPL sector’s entry into a new phase of profit validation. Amid high interest rates, policy shifts, and growing competition, only players with scale efficiency, robust risk control, and international reach are likely to rise above the noise. For investors, it’s no longer just about chasing short-term price swings — the key is to evaluate who can truly turn the idea of “flexible spending” into a solid and sustainable business model.
