Zip Co Limited

Thank you for standing by and welcome to Zip Code Limited Half Year 26 results. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press star followed by the number one on your telephone keypad. I would now like to hand the conference over to Director of Investor Relations and Sustainability, Vivian Lee. Please go ahead.

Good morning and thank you for joining ZIP's 2026 Half Year Results Briefing. 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 call 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. We will start this call with some prepared remarks and then open up for 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 pleased to be reporting another very strong set of results, delivering financial performance within each of our full-year guidance ranges provided in August. For the half, we delivered record cash earnings of $124.3 million and significant operating margin expansion underpinned by accelerated momentum across both markets. These results, together with 10 quarters of consistent group profitability, reinforced the strength of our platform and our ability to deliver long-term value creation. Zip today is a high-growth, efficient, and sustainably profitable business with clear strategic differentiators. We operate a scaled, two-sided network with strong customer engagement, growing merchant penetration, and increasingly diversified distribution networks. We take a customer-first approach to innovation with a proven track record as a responsible lender, backed by more than 12 years' experience delivering flexible credit solutions to millions of customers. Our AI-powered decisioning capabilities, built on significant sets of proprietary data, deliver responsible lending outcomes and exceptional experiences for our customers and merchants. This capability is a core competitive advantage and increasingly important as we continue to scale. Moving to the next slide. Our results demonstrate the power and momentum of our platform in action. Total transaction volume reached a record $8.4 billion, up 34% year-on-year, driven by 55 million transactions. Active customer numbers increased 4.1% to 6.6 million, as we delivered on our strategy for customer growth while deepening customer engagement, demonstrating the demand for our products and the trust customers place in Zip. Merchant growth also accelerated at more than 10% to over 90,000 merchants, supported by expanded channel partnerships, including Stripe. Turning to the next slide. We've continued to deliver top-line growth while importantly maintaining the strong unit economics and the operating leverage that we've developed. Gross profit increased 33.5%, reflecting lower funding costs and strong credit discipline. Net bad debts remained comfortably within management targets, while active customers grew by 10% in the US. A key highlight was record cash earnings of $124.3 million, up 86%, driven by significant operating margin expansion to 18.7%. As well as strong cash earnings in the first half, on a statutory basis, we also delivered net profit after tax of $52.4 million. Moving to slide 8, which demonstrates we're now driving outstanding earnings growth in both markets. In the US, which represents around 80% of divisional earnings, cash EBIT TDA increased 70%, which is one and a half times the rate of revenue growth. In ANZ, cash earnings more than doubled, as revenue and Australian receivables returned to growth, and excess spread expanded 241 basis points, a material improvement. The performance across both regions reflects the strength and scalability of our model. Moving to slide nine. We're executing with discipline against our FY26 strategic priorities. Across both markets, we strengthened customer engagement, delivered record outcomes through the peak holiday period, and signed large merchants in targeted verticals. We continue to innovate and expand our products, unlocking greater flexibility and value for our customers and merchants. Joe and I will cover these highlights in more detail in the regional updates. We've also continued to strengthen our platforms to support long-term scale. During the half, we completed the $100 million on-market share buyback, optimised and diversified our funding programs, and strengthened our core systems and processes, including through scaling AI, which is firmly embedded in how we operate, how we build, and how we differentiate. Turning to slide 10. Our ESG focus remains aligned to long-term value creation. In the US, we partnered with Opportunity Knox, a PBS television series supporting underestimated Americans through hands-on financial guidance. reflecting our commitment to financial inclusion. Across the group, 100% of our team have been equipped with secure enterprise versions of generative AI tools and training to support engagement and accelerate innovation. We also continue to invest in carbon offsetting projects with the aim to offset our greenhouse gas emissions. Turning to the next slide. Dual listing on a U.S. stock exchange continues to make strategic sense for Zip, given the scale of our U.S. business and the material growth opportunity ahead of us in that market. As we announced late last year, we submitted a confidential draft registration statement to the U.S. Securities and Exchange Commission in November 2025. We'll continue to monitor market conditions and will only undertake a dual listing when it's in the best interest of Zip shareholders. The potential dual listing still remains subject to a number of required processes, including regulatory and zip board approvals. So with that, I'll hand over to Joe to cover our U.S. performance in more detail.