Investor Newsletter November 2022

Investor Newsletter November 2022

FY23 is up and running and it's great to have you on board. Here's the latest on all things ZIP.

Co-founder and Global COO Peter Gray talks through our Q1 FY23 numbers

Update on strategic priorities

Focus on core markets

We are excited to share that our co-founder and Global CEO, Larry Diamond, has relocated to the US to spearhead our focus and the next growth phase there. With the US being one of the largest consumer market segments in the world, Larry's move signals our commitment to driving profitability in our core markets of ANZ and the US.

Our senior leadership remains with Larry as Global CEO, co-founder Peter Gray as Global COO, and Cynthia Scott as MD of the core ANZ region.

New merchants

This quarter our new enterprise partnerships with Hoyts (Australia) and Barnes & Noble (US) have already launched, with eBay and Jetstar (Australia) both signed and set to launch in the coming months.

Unit economics

Zip's revenue margin remained healthy at 7.4% and cash transaction margin remained solid at 2.2%.

We made significant improvements in credit losses - a key areas of focus for the group and a critical driver of cash EBITDA.

In the US we delivered lower credit loss rates of 2.4% of TTV (down from 2.7% in Q4 FY22), exiting the quarter with an expected loss rate of below 2% for the September cohort, now in line with target levels.

New Products

Product protection (ANZ)

In August, we announced our alliance with Cover Genius, global leaders in transaction-embedded insurance. The partnership now enables both Zip Pay and Zip Money customers in ANZ to add protection to the things they love, either during or after checkout on select purchases.

Physical card (US)

We continue to differentiate for our customers and merchants. In June, we successfully launched a physical card pilot in the US. We aim to scale the card as a key FY23 initiative, where instore is a huge untapped opportunity as customers return post-pandemic. Read more here.

Reports and presentations

Annual Report

We recently released our FY22 Annual Report, a key publication in our investor calendar. Check out this year's interactive Annual Report.

Annual General Meeting

This year, Zip's AGM was held virtually on 3 November 2022. Shareholders were able to vote and submit questions in advance and "live" during the Meeting. View the full presentation here.

Update on regulation

Zip fully supports simple, fit-for-purpose BNPL regulation and we are engaging with Treasury as part of their review of the industry. Zip already holds an Australian Credit License, and the Zip Money product is regulated under the NCCPA. Zip conducts identity, credit and affordability checks on its customers, which makes us well-placed should further regulatory obligations for BNPL be required in future.

That's a wrap!

FY23 is off to a solid start! With Larry officially on the ground in the US, Zip is well-placed to accelerate our next growth phase in our core markets.

As always, thank you for being part of the Zip journey. We truly appreciate your support.

Questions? Feedback? Please reach out to investors@zip.co

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