The thinking behind Zip Co global chief executive Larry Diamond’s relocation to the United States became clear last week, when the company released its September quarter update. The US business is tanking and needs more management focus.

Zip reported that US transaction volumes were flat quarter-on-quarter and revenue fell 1 per cent. Active customer number fell 5 per cent. The only positive was a 6 per cent increase in merchant numbers.

These falls are not a single quarter blip. Year-on-year, US revenue is flat and customer numbers are down 3 per cent.

The Australian and New Zealand business recorded double digit year-on-year growth in revenue, transaction numbers and merchant numbers, although the growth numbers are well below the figures it has reported in the past.

Zip earned A$83 million of revenue in Australia and New Zealand during the quarter and $66.9 million in the US. With its strategy now focused on these core markets, it is important for the company to regain momentum in the US.

Revenue from rest of the world operations was $8.5 million. ROW revenue and transaction volumes were flat during the quarter. 

ROW operations, which include Canada, Mexico, the UAE, Poland and Czech Republic, will continue to diminish as a proportion of overall revenue as the company rationalises its international portfolio. During the quarter it completed the closure of its UK and Singapore businesses.

Following Diamond’s move, he will remain global CEO. Co-founder Peter Gray remains global chief operating officer and Cynthia Scott remans managing director of the ANZ region.

A positive for the company is that it completed a $300 million debt issue, which allowed it to refinance its 2020-1 Zip Master Trust. It has receivables funding capacity of A$317.8 million and US$183.1 million.