Sydney-listed buy now, pay later player Zip is forecasting to hit break-even by the end of the year after significantly downsizing its operations to reduce cash burn.
Following a tumutuous 2022, which saw Zip abruptly terminate a proposed merger with US-based Sezzle and shut down its businesses in the UK and Singapore, the firm now reports that its Australian business has hit profitability and that a similar trajectory can be seen in the US.
The firm's second-quarter results saw a record $188 million in group revenue, up 12% year-over-year, plus a record $2.7 billion in transactions. The company ended the year with $78.5 million in cash and liquidity to hand.
Zip chief Larry Diamond comments: "It was very exciting to onboard great brands such as Uber, Jetstar and eBay to our payments platform in Australia and deliver positive cash EBTDA for the US business in November and December, including very strong results on credit performance.
"The underlying business remains strong, and we are pleased with the benefits and reduction in cash burn from the ongoing simplification of the business footprint and focus on core products and core markets."
The effort to reduce cash burn and move away from a growth-at-all-costs strategy continues with further pullbacks from overseas markets imminent in Mexico and the Middle East. Other markets that remain operational for now include Canada, South Africa, and Poland and the Czech Republic.