[U.S. IPO] Zip Plans Nasdaq IPO Filing; Shares Surge 24% in a Day

TradingKey - Australian "Buy Now, Pay Later" service provider Zip saw its share price rise as much as 24% during Friday's trading session in Sydney, marking the largest single-day gain since April 10.

This strong performance stemmed from an important announcement that Zip is considering a secondary listing on the U.S. Nasdaq market to drive further its business expansion in the United States, a key growth market.

U.S. institutional investors including State Street, Vanguard, Merrill Lynch, and BlackRock (BlackRock) currently hold 16% of Zip's Australian-listed shares, and they are eager to acquire more shares.

Zip CEO Cynthia Scott stated that the company's plan to list in the United States is primarily to respond to the growing interest from large American investors. These investors see potential in Zip's development amid increasing consumer uncertainty and wish to invest more in the company.

“Having that listing in the U.S., that dual-listing, enables and facilitates their investment,” Scott said. “There’s been an increase in group of investors who recognized the scale of the growth opportunity that we’ve got in the U.S.”

Behind Zip's planned U.S. listing is the strong growth momentum demonstrated by its performance.

Over the 12 months ended June, while Zip's domestic revenue in Australia remained relatively flat, with active users totaling approximately 2 million (accounting for 10% of Australia's adult population), its U.S. market performance was particularly impressive. U.S. revenue surged 44% to reach $424.8 million, with active user numbers growing 11% over the past 12 months to 4.3 million.

The significant increase in consumer usage has driven Zip's annual profit to leap dramatically from A$3.7 million last year to A$79.9 million (approximately US$51.3 million).

Based on the current positive development trend, the company is optimistic about its future prospects, expecting further improvement in profit margins in the next fiscal year while achieving at least 35% growth in transaction volume in the U.S. market.