Slide 1: 1H FY25 Investor Presentation
al use only 1H FY25 Investor Presentation Zip Co Limited 25 February 2025
Slide 2: Disclaimer and important notices
Disclaimer and important notices The information contained in this presentation has been prepared by Zip Co Limited ACN 139 546 428 This presentation may contain certain “forward looking statements”. Forward risks, uncertainties (Company). and other factors, many of which are outside the control of
Slide 3: 1H25 highlights
Hi there, Jessica al use only 01. 1H25 highlights 3
Slide 4: Sustainably profitable business with significant US opportunity
Sustainably profitable business with significant US opportunity US TTV (US$b) and Cash EBTDA ($m) and YoY growth (%) operating margin (%) +38% 13.0% Two-sided revenue model with deep customer, merchant and channel partnerships +43% al use only 8.6% +32% +42% +44% 7.2% 1.6 67.0 Disciplined execution
Slide 5: Strong 1H25 results driven by outstanding US growth
TTV ($b) Total income2 ($m) Revenue margin (% of TTV) +23.9% YoY +19.8% YoY -28bps YoY 6.2 8.5% 8.2% 5.0 514.0 429.2 Reflects higher US contribution al use only (now 70% of TTV) Strong 1H25 results driven 1H24 1H25 1H24 1H25 1H24 1H25 by outstanding US growth and Active customers (m) Transactions (m
Slide 6: Strong unit economics and greater scale delivering operating leverage
Cash EBTDA ($m) Cash gross profit1 ($m) +117.1% YoY +30.1% YoY 235.5 67.0 181.0 30.8 al use only Strong unit economics and 1H24 1H25 1H24 1H25 greater scale Net bad debts (% of TTV) Cash net transaction margin1 (%) delivering significant -22bps YoY +18bps YoY operating leverage 3.8% 3.6% 1.8% 1.6% 1
Slide 7: Zip continued to execute on its FY25 strategic priorities
Zip continued to execute on its FY25 strategic priorities al use only Growth and engagement Product innovation Operational excellence Scale and enhance core Unlocking new customer Strengthening our core products and partnerships and market segments platforms and balance • Added new key merchants in
Slide 8: Zip delivered record profitability in 1H25 driven by strong US results
Zip delivered record profitability in 1H25 driven by strong US results Group cash EBTDA ($m) US cash EBTDA ($m) ANZ cash EBTDA ($m) al use only 68.3 67.0 +79.9% +117.1% 12.8 38.0 +18.8% 30.8 10.8 9.9 (33.2) (27.8) 1H23 1H24 1H25 1H23 1H24 1H25 1H23 1H24 1H25 Significant growth in cash earnings as th
Slide 9: Operating margin increased to 13.0% underpinned by disciplined execution
Operating margin increased by 584 bps to 13.0% underpinned by disciplined execution 1H25 vs 1H24 movements in operating margin (Cash EBTDA as % of total income) 0.4% 13.0% al use only 1.7% 3.7% 7.2% 1H24 Cash Cost of Sales Cash Operating Expenses Other 1H25 Total Improvement 9
Slide 10: Zip remains committed to operating sustainably and responsibly
Zip remains committed to operating sustainably and responsibly Financial • Zip’s product continues to provide consumers with access to flexible, fair, transparent credit, inclusion and and to encourage positive financial habits al use only wellbeing • Zip continues its partnership with Australian de
Slide 11: Business performance
al use only 02. Business performance 11
Slide 12: Zip's business model delivers growth, profitability and capital efficiency
Zip’s business model delivers growth, profitability and capital efficiency al use only Acquisition Engagement Scale Profitability Grow active Drive repeat Drive cash Deliver operating customers, merchant network X usage, product engagement and X earnings supported by = leverage and efficiently alloc
Slide 13: Tailored strategies to win in both markets
Zip has tailored strategies to win in both markets; the US continues to be Zip’s most significant growth opportunity US Execute on significant growth opportunity ANZ Leverage leading market position Market Early and significant (US$130b+)1 addressable Well-established consumer al use only context ma
Slide 14: US: Strong customer engagement underpinned 79.9% growth in cash EBTDA
US: Strong customer engagement underpinned 79.9% growth in cash EBTDA YoY Key performance metrics (AUD unless stated otherwise) Growth and engagement 1H25 1H24 Change Delivered above-market growth1 driven by exceptional holiday trading period al use only • TTV $4.4b $3.1b +39.2% • Invested in growth
Slide 15: US: Significant growth opportunity in an early-stage BNPL market
US: Significant growth opportunity in an early-stage BNPL market with 100m+ everyday consumers Significant headroom for US BNPL market growth, adoption is still in the early stages compared to more established markets4 al use only US$12.7t1 US payments market1 <2% of total payments 84% in-store, 16%
Slide 16: Why Zip US?
Why Zip US? Our customer Our unique ability to win Product Merchant 100m+ Everyday Americans Risk capabilities innovation incrementality al use only Zip has served millions of Americans who Data and underwriting Flexibility, Everywhere Revised merchant have been disenfranchised by traditional credit
Slide 17: US: Strengthening customer engagement has underpinned growth
US: Strengthening customer engagement has underpinned growth in the US business Transactions per Total spend per Active customers continue to spend more. al use only active customer active customer Newer cohorts are spending at an accelerated (#, last 12 months) (US$, last 12 months) rate driven by:
Slide 18: US: Focused credit decisioning and recovery management
US: Focused credit decisioning and recovery management al use only US monthly cohorts, 120-day bad debt performance (% of cohort TTV) Actuals Early indicators Customer demand and Zip’s credit 2.5 Added 400k new active customers over 1H25 risk management 2.0 approach continues Bad debts target range
Slide 19: US: Continuing to build momentum with operating leverage
US: Continuing to build momentum with operating leverage Revenue Cash EBTDA and operating margin ($m) ($m and % of total income) 2x 22.4% al use only 302.9 17.7% 16.6% 235.9 68.3 214.6 38.0 39.2 153.1 156.6 3.7 (27.8) 1H23 2H23 1H24 2H24 1H25 1H23 2H23 1H24 2H24 1H25 Significant revenue growth suppo
Slide 20: ANZ: Proven track record of executing on strategic settings
ANZ: Proven track record of executing on strategic settings Phase Strategic settings Output Customer acquisition Focused on top line Build the Merchant network al use only Pre-FY23 growth and accelerating franchise Top line growth the two-sided flywheel Reset the balance sheet Optimise Responded to
Slide 21: ANZ: Cash EBTDA grew 18.8% YoY underpinned by yield expansion
ANZ: Cash EBTDA grew 18.8% YoY underpinned by yield expansion Key performance metrics (AUD) Growth and engagement 1H25 1H24 Change • TTV returned to growth in 2Q25 (+0.4% YoY) driven by increased customer engagement; transactions increased 7.5% YoY in 2Q25 TTV $1.9b $1.9b (1.2%) al use only • Busine
Slide 22: AU: Portfolio management has delivered outcomes in line with strategic settings
AU: Portfolio management has delivered outcomes in line with strategic settings Book performance (excess spread)1 Arrears rate and net bad debts1,2 (% of AU consumer receivables) (% of AU consumer receivables) al use only 20 18.6% 5.0 17.5% 4.7 4.0 15 4.0 3.6 6.2% 6.9% 3.0 10 2.0 5 1.0 0 0.0 Jul- Au
Slide 23: ANZ: Returned to growth following a period focusing on optimising margins
ANZ: Returned to growth following a period focusing on optimising margins Transactions and YoY growth TTV and YoY growth Revenue per active customer (m) ($b) ($, last 12 months) al use only Revenue from 2Q seasonal peak to be realised in 2H (15.6)% 0.4% 15% +7.5% (9.5%) (3.8%) +3.3% (8.4%) (9.6)% (2
Slide 24: ANZ: strategic assets provide the foundations for the next horizon
ANZ: strategic assets provide the foundations for the next horizon Strategic assets Growth levers Objectives of profitable al use only c.10% of the Australian growth and adult population are active customers Distribute core products to targeted verticals Enhanced customer value proposition long-term
Slide 25: Financial performance
al use only 03. Financial performance 25
Slide 26: Income statement
Income statement Revenue growth and continued cost management delivered a step change in cash EBTDA • Total income increased 19.8% vs 1H24 due to a $m 1H25 1H243 Change % 23.9% increase in TTV. Drivers included 41.1% revenue growth in the US and further portfolio Revenue 509.2 425.5 +19.7 yield expa
Slide 27: Unit economics
Unit economics Cash net transaction margin improved 18bps from continued credit management and lower funding costs Strong cash net transaction margin expansion of 18bps to $m 1H25 1H241 Change % 3.8% and a 30.1% increase in cash gross profit: TTV 6.2b 5.0b +23.9 • TTV grew to $6.2b, up 23.9% vs 1H24,
Slide 28: Cash operating expenses
Cash operating expenses Disciplined investment in the period to drive future customer and volume growth Change $m FY24 FY23 2 • Adjusting 1H24 for cash STI accrual, which was fully $m 1H25 1H241 % % Change accrued in 2H24 ($4.9m), cash opex grew by 10.1% TTV $6.2b $5.0b +23.9 • After adjusting 1H24
Slide 29: Liquidity
Liquidity Material improvement in available cash and cash liquidity with four consecutive quarters of positive operating cash flow Cash at 31 December 2024 ($m) 1H25 movements in available cash and liquidity ($m) 527.0 56.1 195.5 al use only 67.0 0.8 27.8 195.5 80.4 (8.8) (332.2) (27.0) Reported cash
Slide 30: Funding
Funding Zip has prioritised balance sheet strength and efficiency through extending tenors with both existing and new debt investors and achieved significant improvement in credit margins ANZ Receivables funding As at 31 December 2024 al use only • In September 2024, Zip successfully completed two f
Slide 31: Capital management
Capital management Zip’s capital management framework underpins our ambition to maximise long-term value and shareholder returns Guidelines al use only • Zip will prioritise preserving a strong balance sheet Zip’s corporate strategy • Invest capital in attractive growth opportunities and/or to enhan
Slide 32: Strategy and outlook
al use only 04. Strategy and outlook 32
Slide 33: Zip has evolved its purpose and mission
Zip has evolved its purpose and mission, providing strategic clarity while preserving core values Purpose al use only Unlocking financial potential, together Mission To bring exceptional experiences, innovation and partnership to every financial journey Values Customer First Own It Change the Game S
Slide 34: Zip has a clear strategy to maintain growth momentum in FY25
Zip has a clear strategy to maintain growth momentum in FY25 al use only Growth and Product Operational engagement innovation excellence Secure new merchant and Accelerate Improve and automate key strategic partnerships innovation customer journeys Scale embedded Scale Personal Loans Enhance core op
Slide 35: Zip's two-year outlook
Zip’s two-year outlook On track for FY25 results to be within target ranges 1H25 result FY25 focus areas Two-year range1 • US TTV growth outlook for FY25 above average pay in 4 market growth2 with Revenue momentum continuing in January 2025 al use only (% of TTV) 8.2% 8.0% - 9.0% • Share of revenue
Slide 36: Q&A
al use only Q&A 36
Slide 37: Appendix
\ fearless financial future awaits Appendix . 3s ZOP
Slide 38: Segment information
Segment information 1H25 Corporate and $m ANZ USA other Total 209.0 304.9 0.2 514.0 al use only Total income Cash cost of sales¹ (135.1) (143.4) – (278.5) Cash gross profit 73.8 161.5 0.2 235.5 Cash operating expenses (61.0) (93.2) (14.3) (168.6) Cash EBTDA 12.8 68.3 (14.2) 67.0 Movement in expected
Slide 39: Income statement: corporate, one-off adjustments and non-cash items
Income statement Breakdown of corporate, one-off adjustments and non-cash items 1 $m 1H25 1H24 Total income 514.0 429.2 Cash EBTDA 67.0 30.8 al use only Non-cash items and discontinued operations (27.1) 8.5 Amortisation – corporate funding (28.1) – Share‑based payments (5.6) (5.5) Share of loss of a
Slide 40: Balance sheet
Balance sheet $m December-24 June-24 Cash and cash equivalents 194.7 121.3 Restricted cash 332.2 231.7 al use only Other receivables 98.5 100.8 Term deposit 4.6 4.5 Customer receivables 2,592.4 2,398.6 Property, plant and equipment and ROU assets 17.5 19.8 Intangible assets 78.7 96.1 Goodwill 222.2
Slide 41: Cash flows
Cash flows $m 1H25 1H24 Revenue from customers 519.9 431.0 Payments to suppliers and employees (240.9) (225.4) Net increase in merchant payables 258.7 126.1 Net increase in receivables (335.5) (105.7) al use only Borrowing transaction costs (2.1) (2.3) Interest received from financial institutions 4.
Slide 42: Funding
Funding $m Dec-24 J u n - 24 Secured funding facilities Facility limits al use only AU 2,286.3 2,293.4 1 US 481.4 339.7 NZ1 18.1 18.3 Total limits 2,785.8 2,651.4 Facilities drawn AU 2,007.5 2,024.4 US1 325.8 283.8 1 NZ 12.7 10.1 Total drawn 2,346.0 2,318.3 Corporate facility Facility limit – 130.0
Slide 43: Glossary
Glossary Term Definition FY Financial year ending 30 June of the relevant financial year 1H Six months ending 31 December of the relevant financial year 2H Six months ending 30 June of the relevant financial year 1Q Three months ending 30 September al use only 2Q Three months ending 31 December 3Q Th