Shares shifted sharply higher after filings confirmed Zip Co exhausted its entire A$50 million share buyback program, a move that was designed to run until March 2027 but hit its cap on June 29 — barely four months in. Zip purchased 24,761,784 shares for A$49,999,991.18, at an average price of A$2.02 each.
Just A$8.82 remained unused. The stock closed Monday at A$3.13, meaning the market is now pricing that repurchased stock at far more than Zip paid — and investors must decide whether a tighter share base alone justifies the momentum.
Zip Bought Low and the Market Is Rewarding It
Shares repurchased under the plan would be worth A$77.5 million at Monday's close — a 55% premium to the A$50 million Zip spent. That gap signals management timed the buyback well, snapping up shares during a weak stretch following February's 34% single-day crash after half-year results disappointed. This was Zip's second consecutive buyback, having completed a prior A$100 million repurchase in December 2025. Together, these programs have meaningfully shrunk the share count, concentrating each remaining investor's claim on earnings.
Record Profit Growth Underpins the Confidence
Zip posted record quarterly cash EBTDA — a measure of operating profit before tax, depreciation, and amortization — of A$65.1 million in Q3 FY26, up 41.5% year-on-year, with operating margins expanding to 19.4%.
Management upgraded FY26 group cash EBTDA guidance to at least A$260 million.
The U.S. business delivered standout growth, with transaction volumes and revenue each rising more than 43% in local currency.
Credit Losses Are the Next Test
Group net bad debts climbed to 1.93% of transaction volume in Q3, up from 1.64% a year earlier.
Management expects U.S. losses to fall below 1.75% in Q4 , but if that doesn't materialize, margin gains could quickly erode.
No More Buyback Floor Under the Stock With the program exhausted, Zip loses a steady source of buying support that helped stabilize shares during volatile stretches. Available cash and liquidity stood at A$234.8 million at quarter-end , leaving room for another buyback — but management hasn't announced one. Until it does, the stock trades purely on earnings momentum and credit discipline. For investors, the question is simple: does the profit trajectory justify A$3.13 without a corporate bid underneath?