Buy now, pay later company Zip Co Ltd’s shares have surged on a trading update showing it was on track for a bumper year.
Zip Co’s December quarter was its best ever as customers splurged in sales on Black Friday, Cyber Monday and Boxing day.
Its quarterly revenue was $38.5 million, up 24 per cent on the first quarter of 2019/20, the financial technology company said in a trading update to the ASX on Monday.
Zip Co also posted a record quarterly transaction volume of $562.6 million for the second quarter of 2020, up 40 per cent on its first quarter.
By the end of December, 1.8 million customers had an active Zip account that allows them buy now and pay later without a credit card at 20,875 merchants, including Amazon Australia.
Customer numbers are up 24 per cent from the September quarter, while merchants are up 17 per cent.
Zip also announced on Monday that Visa executive Hamish Moline had been appointed chief commercial officer.
RBC Capital Markets’ analyst Tim Piper said Zip Co was tracking nicely and that he expects it to exceed its $2.2 billion target at the financial year-end.
The 1.8 million active customers, and 20,875 merchants, were broadly in line with RBC projections, Mr Piper said.
“This appears a solid result at the top-line beating consensus estimates as anticipated by us,” he said.
Zip Co also successfully raised equity sufficient to attract further master trust funding in the coming quarter, he said.
Zip Co’s shares closed up 3.1 per cent to $3.64.