AAP Finance

Popular buy now, pay later company sees bad debts rise

Apr 17, 2026

Zip signage (file image) — Zip has posted record quarterly earnings as more people use the buy now, pay later service. -AAP Image

One of Australia's biggest buy now, pay later businesses has set a new earnings record as more people use its service to pay for everyday essentials such as utilities and insurance.

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The news boosted Zip shares, which bounced more than 15 per cent, after it revealed a 41 per cent jump in quarterly cash earnings to a landmark $65.1 million.

Zip's total transaction volume was up 22.4 per cent to $4 billion in the March quarter, while its operating margin expanded to 19.4 per cent, from 16.5 per cent a year ago.

Its bad debts increased, ticking up from 1.6 per cent of total transaction volume a year ago to 1.9 per cent in the March quarter.

Zip said this was within management targets and forecast bad debts to fall under 1.75 per cent of total transaction volume in the June quarter.

In Australia and New Zealand, where it has almost two million customers, spending with Zip was up 18.2 per cent.

"Growth was driven by increased use of Zip for everyday spend, including utilities, insurance, education and health," it said in a statement.

Zip also operates in the US, where it has 4.6 million active customers.

The number merchants on Zip's platform increased 12.7 per cent to 93,900, while Zip's overall number of active customers rose 3.5 per cent to 6.5 million.

"Zip's resilient business model continues to drive increased profitability at scale," chief executive Cynthia Scott said.

Zip now expects to make no less than $260 million in full-year earnings before tax, depreciation and amortisation.

Zip had previously forecast second-half earnings to be broadly in line with its first-half $124.3 million, which would have meant full-year cash earnings of around $248.6 million.

According to fintech group Raiz Invest, consumer spending via instalments has surged 26 per cent over the past three years, from $469 per month in January 2023 to $589 in January 2026.

Raiz Invest chief executive Brendan Malone has told AAP that much of the spending relates to households managing grocery bills, covering school expenses and otherwise trying to make ends meet.

Zip shares were changing hands at $2.37 in morning trading - up 50 per cent over the past month, albeit down 31 per cent from the start of the year.

Zip partnered with TPG Telecom in Australia to launch ZMobile on April 9, a new mobile offering that lets customers activate an eSIM and manage their plans in the Zip app.