Zip Co Limited

Thanks operator, good morning and thanks everyone for joining us for the presentation of the FY25 results. To open I'd like to begin by acknowledging the traditional owners of the land on which we meet today, the Gadigal of the Eora Nation and pay our respects to elders past and present. This conference is also being webcast and will be available on ZIP's website. I'm joined today by ZIP's Group CEO and Managing Director Cynthia Scott, Group CFO Gordon Bell and US CEO Joe Heck. Cynthia will present our FY25 group highlights and ANZ business performance. Joe will then cover the US business, and Gordon will provide details of the financial results. Cynthia will then conclude with remarks regarding our FY26 strategy and outlook, and the presentation will be followed by Q&A. With that, I'll now hand over the call to Cynthia.

Thanks Vivienne, and good morning everyone. On behalf of the Zip team, we're very pleased to be reporting the strongest financial performance in Zip's history. Disciplined execution, customer focus, and significant operating leverage underpinned cash earnings growth of 147%, and positions us strongly to continue to deliver long-term shareholder value. Our group highlights are set out on slides four and five. We achieved several milestones this year, including delivering over $1 billion in total income. From a regional perspective, our US business delivered an outstanding performance, and our ANZ business returned to TTV growth. Customer engagement strengthened, with average spend and transactions per customer increasing across our 6.3 million customers. This year, we safely processed over 93 million transactions, valued at 13.1 billion, up 30.3%. Our revenue margin was 8.3%, reflecting the increased contribution from the US, now representing 71% of TTV. Turning to slide five. Significant momentum in the business and strong credit outcomes underpinned cash earnings increasing 147% to $170.3 million. Cash gross profit was up 34% to $509 million, supported by net bad debts as a percentage of TTV improving 14 basis points. with good credit performance across both markets. Our focus on cost discipline while driving significant top line growth resulted in our operating margin almost doubling to 15.8%. Our achievements this year have strengthened our unique competitive advantages as shown on slide six. We have two regional growth engines underpinning sustainable profitable growth at a group level. The charts demonstrate the accelerated momentum experienced during the year across key performance metrics, resulting in the delivery of a very strong second half result. Turning now to slide seven. Our cash earnings performance was driven by our US business, which delivered over 100% growth and exceeded US $100 million in cash earnings for the first time. Slide eight details how we've delivered on our FY25 strategic priorities of growth and engagement, product innovation, and operational excellence. Starting on the left, we saw increased customer engagement in both markets, with US transaction frequency reaching double digits, reflecting investment in customer experience, strategic marketing initiatives, and the addition of new merchants across targeted verticals. We continued to innovate new products, which we'll cover in the regional updates. In delivering operational excellence, we made disciplined investments in core systems, processes, and people, and undertook initiatives to transform our balance sheet, which Gordon will provide further detail on. Turning to slide nine, we've continued to deliver against our ESG focus areas. We achieved strong customer NPS scores of 68 and 57 in the US and ANZ respectively, reflecting the value our customers place on ZIP and our commitment to delivering exceptional customer experiences. Our employee engagement score strengthened to 81% and female representation across the group increased to 44%. Pleasingly, we now have 50-50 gender representation across our board and our group executive team. Finally, we continue to measure our scope one, two, and three emissions with the aim to achieve carbon neutrality. Slide 10 provides a snapshot of our key group performance metrics, demonstrating the strength of the results delivered in FY25. Moving to the next slide. Consistent with our objective long-term shareholder value, we're considering a dual listing on the NASDAQ, supporting our significant growth opportunity and growing investor interest in the US. The potential dual listing remains subject to ZIP Board approval and the completion of a number of required processes, including obtaining regulatory approvals in the US. We'll update the market in due course. Before I cover ANZ performance, I'd like to acknowledge and thank Zip co-founder Peter Gray for his significant contributions, most recently as ANZ CEO. As foreshadowed at our half-year results, Pete's moved into a newly created leadership role at Zip as head of strategic growth, with a focus on accelerating our growth agenda across both markets. I'd also like to formally welcome our new ANZ CEO, Soraya Alali, to join us in May. Soraya brings over 20 years' experience in the financial services sector. with a focus on driving scalable growth, digital transformation, and enhanced customer experiences. Turning now to ANZ performance on slide 13. Following a period of optimizing margins in response to the external environment, the ANZ business returned to TTV growth. TTV was up 5.5% for the year and 13.2% in the second half, while the business delivered strong credit outcomes accelerated product innovation, and invested in platforms to scale. Growth was driven by increased transaction frequency and by Zip Plus, which was expanded to new customers at higher limits of up to $8,000. Zip ANZ collaborated with Google on the rollout of new Google Wallet features to enable more seamless and secure payment experiences across Chrome Autofill, Google Pay Online, and Google Services. We also added several large enterprise merchants across Australia and New Zealand in targeted verticals such as travel and health, including Cathay Pacific and National Dental Plant. Turning to slide 14 for more detail on the performance of the Australian loan book. With our account-based product construct in Australia, yield on the loan book and excess spread is the best way to think about the performance of the business. Changes in product mix, lower funding costs and improved credit outcomes delivered a 91 basis point expansion in portfolio yield and a 331 basis point expansion in excess spread. Pleasingly, arrears rates and net bad debts improved in response to management actions and risk settings, positioning the portfolio for continued profitable growth. After returning to quarter-on-quarter growth in Q4, we expect receivables to return to modest growth in the first half of FY26, which will support revenue conversion. Slide 15 sets out our Australian products and their relative contribution to the receivables portfolio. We've continued to innovate to meet our customers' evolving needs, including launching two new products within the past 18 months. ZipPlus continues to attract new customers and generate strong engagement and unit economics, with receivables now accounting for around 12% of the Australian book. We launched our personal loan product in January And Zip customers are using the flexible finance for weddings, holidays and renovations. In terms of current customer spending trends, we've seen continued growth in online marketplaces and non-discretionary categories such as grocery and education. Our more mature customers continue to spend more than other cohorts on a relative basis, particularly in discretionary categories such as travel, entertainment and restaurants. Slide 16 sets out several strategic initiatives that the business delivered on in FY25 to support future growth. During the year, we invested in strengthening our core risk management and cyber platforms, and developing AI-powered capabilities. In Australia, we rolled out an AI-powered customer chatbot, Ziggy, which will facilitate more personalized customer interactions in FY26. Turning to slide 17. With a highly engaged customer base representing approximately 10% of the Australian adult population and products well suited to the current operating environment, we're uniquely placed to deliver sustainable, profitable growth. In FY26, we're focusing on driving new customer acquisition and deepening customer engagement, including through high-value merchant and partner channels, as well as delivering scalability through simplification and automation, expanding digital self-service, and deploying AI. We will continue to explore capital-like propositions that complement our existing product suite through our innovation arm, Fearless Frontiers, which I'll provide more detail on later. I'll now hand over to Joe to talk about our US results in more detail.

Thanks, Cynthia. I'm incredibly proud of the results the team has delivered in the past year since I joined as US CEO. Our laser focus remains on keeping our customers at the center of everything we do, and this is reflected by our high customer NPS of 68, a great achievement. Turning to slide 19, the U.S. business delivered an outstanding performance this year. Cash earnings more than doubled, underpinned by TTV and revenue increasing 41.6% and 43.7% respectively, which included a very strong fourth quarter performance. Topline growth was driven from new and existing customers, as we recorded active customer growth for the first time since FY22. With a simplified and differentiated merchant value proposition, we added several large merchants, such as Heritage Grocers, GameStop, Take5 Oil Change, and Major League Baseball Ticketing and Shop. Channel partnerships and embedded finance continued to build momentum. We've scaled volumes and merchants through Google Pay, and in August 2025, we also integrated with Autofill on Google Chrome, allowing customers to use Zip without switching apps or reentering payment details. Our partnership with Stripe also went live with general availability earlier this month. We continue to enhance our consumer and merchant payment options, scaling Pay in 8 as an expansion of our Pay in Z platform, offering customers increased flexibility and control over their payments. Pay in 8 volumes increased two and a half times, half on half, after being made available to all eligible customers in the app in January, and represented 18% of TTV in the fourth quarter. Turning to slide 20, the US BNPL market has grown 6x in the last five years, with companies like Zip playing a critical role in this transformation. The medium-term opportunity remains compelling, with BNPL representing less than 2% of the $12.8 trillion U.S. payments market, or only 6% of e-commerce spend. This is well below usage rates in markets such as Australia at 15%, and some European countries at over 20%. In-store also remains a major growth opportunity. In FY25, in-store TTV grew 65% year-on-year and made up over 23% of total TTV. Slide 21 shows U.S. active customer base, which grew 11% year-on-year, including an increase in second half versus first half for the first time since FY21. This was a strong result, highlighting our effective credit decisioning and in the face of typical seasonality and macro uncertainty. This growth has been driven by our ability to deliver increased customer engagement and improve dormancy. Monthly transacting users increased circa 20% on average in FY25, indicating strong momentum as we begin FY26. Slide 22 demonstrates how customer engagement has strengthened. Transactions and TTV per active customer increased 62% and 76% respectively over the last two years. In addition, continued improvements in our underwriting capabilities have accelerated our ability to increase spending power for newer cohorts over time. The July 2024 customer cohort experienced a 58% increase in average spend over the last 12 months, and we are seeing continued momentum, with the most recent January 2025 customer cohort outperforming that vintage over its first six months. We have achieved these outcomes by identifying and acquiring high-quality potential customers, investing in personalization and features to drive customer engagement through the app and physical card, and providing spending power increases based on positive repayment behavior. We expect customer engagement to continue to deepen as the collective impact of these initiatives compound, driving increased transaction frequency and as we capture a greater share of our customers' wallets. Moving to slide 23, we serve a unique and resilient customer base, being the everyday American, of which we estimate there to be over 100 million nationally. These Americans have been underestimated and underserved by traditional financial services providers. Today, the majority of our TTV is derived from non-discretionary categories with an average order value of $133 U.S., And our customers are increasingly using our product for non-discretionary spends, such as grocery, health, and education, as seen in the increased spend in these segments. At Zip, we focus on matching customers with appropriate spending power, providing financial flexibility, and giving customers confidence in their financial capability. The fact that over 98% of our transactions are repaid in full reflects the role Zip plays as a cash flow smoothing tool for our customers. Slide 24 covers U.S. credit performance on a cohort basis. As you can see on the chart, our U.S. business continued to deliver loss rates within our target range of 1.5% to 2% of TTV, all while achieving over 40% year-on-year growth in TTV and revenue. These results reinforced the strength and agility of our credit decisioning platform and our ability to maintain strong unit economics during a period of macro uncertainty. and we remain well-placed to perform in a range of economic scenarios given our short-duration portfolio and the ability to swiftly adjust our risk settings. Losses remain within our target range even when accounting for seasonality. With respect to our reporting, historically, a 120-day delinquency as a percentage of cohort TTV has served as a reliable indicator of credit losses within our Pay in 4 offering. However, this metric does not completely reflect the performance of Pay in 8, as it is not yet fully seasoned. To accurately reflect the increased diversification of our portfolio, we will review the reporting of U.S. bad debts. Turning now to slide 25. On the back of an outstanding year, a particularly strong fourth quarter, we are well-placed to continue delivering strong growth with revised value propositions and a highly engaged customer base. We're excited to expand our Pay-in-Z platform with the rollout of Pay-in-2 functionality, providing greater flexibility with smaller ticket items and everyday expenses such as groceries and utilities. We're also exploring opportunities to expand our revenue streams in a way that provides greater utility for our customers, including Money Coach, an AI-powered guided cash flow management solution. We will also continue to drive our flywheel through accelerating customer and merchant growth through channel partners and embedded finance. With that, I will now hand over to Gordon to cover our financial performance.