Is Zip Co profitable in 2026?

Yes. Zip Co posted FY25 cash EBTDA of US$170.3m, up 147% year on year, and upgraded its FY26 group cash EBTDA guidance to no less than A$260m after a record 3Q FY26 cash EBTDA of A$65.1m, up 41.5% YoY, as of March 2026.

Could AI replace Zip Co's business model?

No, AI cannot replace Zip Co's licensed lending status, but it compresses internal advantages. Zip uses machine learning for fraud detection in its ANZ Credit Risk team and has partnered with Stripe on Shared Payment Tokens for agentic checkout, announced 16 June 2026, showing it is adapting rather than being displaced.

Who is Zip Co's biggest competitor in the US?

Affirm is the largest US BNPL rival, holding about $34bn of the ~$114bn 2025 US BNPL volume, versus Zip and other smaller players combined at only ~$11bn, roughly 10% of the market, as reported May 2026.

Is Zip Co considering a Nasdaq listing?

Yes. Zip Co submitted a confidential draft registration statement to the US SEC in November 2025 to pursue a Nasdaq dual listing, still awaiting board approval and regulatory clearance as of mid-2026.

Did Zip Co win its trademark lawsuit?

No. The High Court of Australia ruled against Zip Co in Zip Co Ltd v Firstmac Ltd on 13 May 2026, but Zip then settled with Firstmac on 21 May 2026 and acquired Firstmac's ZIP trademark registration, keeping its brand in Australia.

Is Zip Co exiting any markets?

Yes. Zip Co announced withdrawal from New Zealand operations, effective around 16 August 2026, to focus resources on its core Australia and US businesses.

Payments companies · Australia

Zip Co

zip.co ↗

Australia's buy now, pay later lender expanding into the US market.

Losing its protection

Assessed 21 July 2026 · Evidence as of 21 July 2026

The structural protection is eroding.

On the recordSince 21 July 2026 · Checkable from 20 Aug 2026 · Every call on the record Checkpoint: FY26 full-year results release

The call

Zip is profitable and growing fast in the US, but sits far behind giants that already dominate BNPL and can bundle it for free.

Zip Co lends money to shoppers who want to pay later instead of all at once, making money from customers and stores. PayPal, Affirm, Klarna, and Block already control most of the market and can easily copy anything Zip does, except Zip is stronger in Australia. AI tools can now do underwriting and fraud detection as well as any company, so size and customer volume matter more than cleverness, and Zip is small compared to its rivals; the real question is whether Zip can keep growing its US business faster than its competitors shrink it, or if it hits a ceiling where it stays a minor player.

Why

AI pressure: Agentic checkout tools from PayPal, Apple, and AI shopping assistants. AI driven checkout agents could bundle installment options directly into wallets, making standalone BNPL apps less needed. Could AI do the core job? Only partly.

Bigger players: PayPal Pay Later, Affirm, Klarna, Block/Afterpay, Apple. These firms already hold most of US BNPL volume and can bundle installment credit free inside their own wallets. Could a giant copy it? Yes, easily.

What protects it. Zip's strong home market position in Australia and rising profits give it room, but no real lock in against bigger rivals.

What would change this call

Zip's FY26 full-year results, due 20 Aug 2026, show whether US revenue growth holds or misses forecasts again. Would show if 47% US growth is converting into real share gains against Affirm, Klarna, PayPal or stalling.
Outcome of Zip's proposed Nasdaq dual listing (board and regulatory clearance). Would show if Zip can access US capital and investor base to compete with larger incumbents.
Completion of Zip's New Zealand exit around 16 Aug 2026 and any further market exits. Would show Zip retreating from smaller markets to concentrate resources against bigger rivals.

Key numbers

FY25 cash EBTDA up 147% to US$170.3m (2025-06-30)
1H FY26 revenue miss caused 34.4% share drop (2026-02-19)
US revenue rose 47% YoY to A$445.3m (2025-12-31)

Named risks

US BNPL market dominated 91% by Affirm, Klarna, Afterpay and PayPal, limiting Zip's ceiling to tail-player share. Severity: high
High share price volatility, 34.4% single-day drop on 19 Feb 2026 after a revenue miss, beta of 2.59. Severity: high
Merchant-fee compression from regulatory caps and free wallet bundling could erode standalone BNPL economics. Severity: medium
Unresolved US regulatory inquiry reported as of December 2025 with unclear outcome. Severity: medium
New Zealand market exit execution and wind-down costs effective ~16 August 2026. Severity: low

Rivals, as read in July 2026

Rival	Direction	Evidence
Affirm	losing to	Affirm held ~$34bn of $114bn 2025 US BNPL volume vs Zip's tail share, as of Dec 2025
Klarna	losing to	Klarna held ~$28bn US BNPL volume in 2025 vs Zip's fraction of ~$11bn tail total
Afterpay/Block	losing to	Afterpay held ~$19bn US BNPL volume in 2025, ahead of Zip
PayPal Pay Later	contesting	PayPal Pay Later held ~$17bn US volume in 2025; Zip growing US revenue 47% YoY as of Dec 2025
Sezzle	gaining on	Sezzle held ~$5bn US volume in 2025, closer in size to Zip's tail-player position
Apple/Apple Pay wallets	losing to	Affirm partnered directly with Apple Pay, a wallet integration Zip has not matched

Questions people ask

Is Zip Co profitable in 2026?: Yes. Zip Co posted FY25 cash EBTDA of US$170.3m, up 147% year on year, and upgraded its FY26 group cash EBTDA guidance to no less than A$260m after a record 3Q FY26 cash EBTDA of A$65.1m, up 41.5% YoY, as of March 2026.
Could AI replace Zip Co's business model?: No, AI cannot replace Zip Co's licensed lending status, but it compresses internal advantages. Zip uses machine learning for fraud detection in its ANZ Credit Risk team and has partnered with Stripe on Shared Payment Tokens for agentic checkout, announced 16 June 2026, showing it is adapting rather than being displaced.
Who is Zip Co's biggest competitor in the US?: Affirm is the largest US BNPL rival, holding about $34bn of the ~$114bn 2025 US BNPL volume, versus Zip and other smaller players combined at only ~$11bn, roughly 10% of the market, as reported May 2026.
Is Zip Co considering a Nasdaq listing?: Yes. Zip Co submitted a confidential draft registration statement to the US SEC in November 2025 to pursue a Nasdaq dual listing, still awaiting board approval and regulatory clearance as of mid-2026.
Did Zip Co win its trademark lawsuit?: No. The High Court of Australia ruled against Zip Co in Zip Co Ltd v Firstmac Ltd on 13 May 2026, but Zip then settled with Firstmac on 21 May 2026 and acquired Firstmac's ZIP trademark registration, keeping its brand in Australia.
Is Zip Co exiting any markets?: Yes. Zip Co announced withdrawal from New Zealand operations, effective around 16 August 2026, to focus resources on its core Australia and US businesses.

Timeline

2026-07-20Reported New Zealand exit effective ~16 August 2026 to refocus on ANZ and US
2026-07-14Zip publishes survey: 81% of Australian customers used AI tools in past 3 months
2026-06-16Stripe Shared Payment Tokens partnership announced for agentic commerce
2026-05-21Zip settles with Firstmac, acquires ZIP trademark registration
2026-05-13High Court of Australia rules against Zip in Zip v Firstmac trademark case
2026-03-313Q FY26 record cash EBTDA of A$65.1m, up 41.5% YoY
2026-03-01Zip launches new $50m on-market share buyback
2026-02-191H FY26 revenue miss triggers 34.4% single-day share price plunge
2025-11-01Zip submits confidential draft registration statement to US SEC for Nasdaq listing
2025-08-01Zip integrates Google Pay and Chrome autofill in the US

Revision history

21 July 2026

First assessed. Losing its protection. The text above is fixed as of this date and is not edited afterwards.

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