Zip (ASX:ZIP) share price jumps 5% on strong FY26 first quarter

Core Insights - Zip Co Ltd's share price increased over 5% following its latest quarterly update, indicating positive market sentiment towards the company [1] Financial Performance - For the first quarter of FY26, Zip reported a total transaction value (TTV) of $3.9 billion, reflecting a year-on-year increase of 38.7%, while total income grew by 32.8% to $321.5 million [2] - The revenue margin declined to 8.2% from 8.6% a year ago, attributed to a higher contribution from the US market [2] - Active customers rose by 5.3% to 6.4 million, and the number of merchants on Zip's platforms increased by 9.1% to 87,500 [2] Debt and Margins - Net bad debt of TTV was maintained at 1.6%, consistent with the first quarter of FY25 [3] - The cash net transaction margin (NTM) improved to 4%, up from 3.9% in the previous year [3] - The cash EBTDA margin saw significant improvement, rising to 19.5% from 13.1% in FY25 [3] Management Insights - CEO Cynthia Scott highlighted a strong performance in the US, with TTV and revenue increasing by 47.2% and 51.2% respectively, alongside a 12.2% growth in customer numbers [4] - In the ANZ region, TTV grew by 11.1% year on year, driven by growth in Zip Plus [4] Future Expectations - The company has upgraded its expectation for US TTV growth to above 40% for the year, reaffirming its strategic priorities of growth, engagement, and product innovation [5] Share Buyback Program - Zip announced an increase in its on-market share buyback limit from $50 million to $100 million, having already repurchased 17.8 million shares for $43.4 million [6] - The increase in the buyback limit reflects the strength of Zip's balance sheet and its outlook for future profitable growth [6] Market Outlook - The company's performance and outlook appear positive, with sustainable net bad debts contributing to a solid future [7]