Australia

Zip co-founder Peter Gray says company should be ‘recession-proof’

Zip Co co-founder Peter Gray argues that BNPL (Buy Now, Pay Later) companies will be resilient in the event of a US recession.

In Tuesday’s quarterly update, Zip said its critical U.S. business delivered “very strong seasonal performance” in the three months to December, fulfilling its mission to deliver sustainable earnings. said. Analysts have stressed that Zip continues to run out of cash, but the company claims it has enough cash to support it until it makes a profit.

Zip Co-Founder and Global Chief Operating Officer Peter Gray said:credit:Rhett Wyman.

As markets worry about a possible U.S. recession, Gray said the turnaround in bad debt shows Zipp’s resilience to changing economic conditions, including a possible recession. claimed.

“Without a doubt, the US is very close to that scenario right now, and the results we are delivering demonstrate the strength and resilience of our model. We look forward to sustained growth and profits over the next six to nine months as we continue to demonstrate the power of Zip and the power of our model through the recession,” said Gray. .

“Zip should be recession-proof.”

Zip, the second-largest local BNPL business after Afterpay, faced significant pressure as its share price plunged up to 95% from its peak in 2022 as valuations of its loss-making tech business plummeted. .

The company, which provides short-term consumer loans, has cut costs, closed overseas operations, lending tighteningand plans to be profitable in the first half of 2024.

On Tuesday, Zip claimed to be making headway in its key market, the United States, as it posted 12% revenue growth and a significant decline in bad debt.

Zip said his preferred measure of US cash earnings before taxes, depreciation and amortization (EBTDA) was positive in November and December, and his metric has been positive on a “sustainable basis” since the end of this financial year. ‘, he said. Year.

Zip co-founder Peter Gray says company should be ‘recession-proof’

Source link Zip co-founder Peter Gray says company should be ‘recession-proof’

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