“Zip should be recession-proof.” Zip Co co-founder Peter Gray has argued the buy now, pay later (BNPL) company can be resilient if the United States goes into recession. zip
Zip Co co-founder Peter Gray has argued the buy now, pay later company can be resilient if the United States goes into recession, after the embattled fintech reported that the number of bad debts it was recording had fallen dramatically.
“I think arguably, the US is very close to that scenario now, and the results that we’re delivering prove the strength and resilience of the model. I think we’re really well-placed, I look forward to continued sustainable growth and profit over the next six to nine months, and we’ll demonstrate the power of Zip and the power of the model through an economic downturn,” Gray said.
Zip said its preferred measure of cash earnings before tax, depreciation and amortisation in the US were positive in November and December, and it was on track for his metric to be “positive on a sustainable basis” from the end of this financial year.Bad debts , which had blown out last year, contracted to 1.07 per cent of total transaction value in the US, from 2.36 per cent in the September quarter.
RBC Capital Markets analyst Wei-Weng Chen said Zip’s trading update was better than expected, but also said Zip’s falling cash balance was a negative.
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