The news: Zip reported total income was up 29.2% YoY to AU$664 million (USD$428 million) for its H1 2026 (ended December 31 2025), per company earnings documents.

• Total transaction volume (TTV) increased 34.1% YoY to AU$8.4 billion ($5.41 billion).
• Transactions rose 20.2% YoY to AU$54.9 million ($35.38 million).
• Cash EBITDA spiked 85.6% YoY to AU$124.3 million ($80.12 million).
• Active customers grew 4.1% YoY to 6.6 million.
• And merchants lifted 10.5% YoY to 90,600.

Investor reaction was unsparing: Zip’s stock tumbled 38%—its largest drop since 2014— after missing UBS analysts’ targets for TTV, revenue, and EBITDA, per Market Watch. Analysts also held concerns about its consumers’ financial health, as net bad debts (write-offs) rose YoY. 

Zip’s outlook for H2 2026 will remain broadly in line with H1 2026 results.

Inside the numbers: Zip’s recent penetration into the US market has driven its growth outside of its native Australian and New Zealand markets:

• US TTV spiked 44.2% YoY to $4.1 billion.
• US revenues grew 46.2% YoY $292 million.
• US active customers increased 9.7% YoY to over 407,000. 
• And US transactions per customer rose 19.9% YoY.

Zip’s ability to snag US consumer spend was aided by buy now, pay later’s (BNPL) integrations with Google Pay, autofill with Google Chrome, and Stripe, especially by customers turning to their installment products for essential spending—a cohort that its recent Pay in 2 product targets. Fastest growing non-discretionary categories for US spending last half included health, auto and transport, and education. US in-store spending additionally rose 69% YoY, accounting for 25% of all TTV, suggesting investment in the Zip Card and merchant partnerships is boosting volume where the majority of shopping happens.

Warning signs: Consumer financial health was flagging for Zip over the last half fiscal year, with net bad debts (net-charge offs) up YoY to 1.73%, up from 1.56% H1 ‘25. This suggests that ZIp’s consumers are more financially fragile on repaying their debts on essential purchases like groceries and bills, following similar indications from Affirm’s most recent earnings.

Implications for BNPL providers: Demand for installment financing is ample, especially from subprime consumers for essential purchases. As signs of consumer financial fragility rises, products like Block’s proprietary credit scoring product for loan underwriting will be critical for expanding access to alternative credit with managed risk.