The Zip Co Ltd (ASX: ZIP) share price has soared 14% after revealing a strong FY25 update.
Zip is one of the largest buy now, pay later businesses in Australia and the US.
Zip’s FY25 update
The business gave investors an update about its trading performance for May 2025 and also updated its FY25 guidance.
Zip said that it achieved strong performance in May, particularly in the US business. So, Zip has upgraded its financial guidance.
In May, the buy now, pay later company reported momentum in its total transaction value (TTV) growth, which has continued across both markets.
Pleasingly, the US year on year TTV growth was more than 40% in US dollar terms. It reported no material changes to its credit loss performance since the third quarter of 2025 across both markets.
Share buyback
Zip noted that, consistent with its capital management framework, it has purchased 12.3 million shares for a total of $22.6 million to date as part of its on-market share buyback program of up to $50 million of ordinary shares.
This helps increase the underlying value of each Zip share and also improves certain shareholder metrics such as earnings per share (EPS).
FY25 guidance
After seeing the strong performance in May, Zip decided to increase its guidance for FY25.
It now expects to achieve cash EBTDA of at least $160 million, compared to previous guidance of at least $153 million. That’s a strong support for the Zip share price. Zip also said that it’s on track for its FY25 result to be within its two-year target ranges.
Management comments
The Zip Group CEO and Managing Director Cynthia Scott said:
Zip’s momentum has continued throughout May, particularly in the US where TTV has continued to grow above 40% year on year, reflecting the resilience of our business model and disciplined execution of our strategy. Following our continued strong performance, we have upgraded our FY25 guidance to deliver cash EBTDA of at least $160 million.
Final thoughts on the Zip share price
Zip continues to perform well and its share price is moving significantly from pessimistic to optimistic. It wouldn’t surprise me if the buy now, pay later business kept rising from here if wider economic conditions remain positive.
I’m not sure if it’s a buy today because the buy now, pay later business has already positively reacted to the news and included increased expectations.
But, there are plenty of ASX growth shares that I’m bullish about.
