Shares of Zip Co Ltd (ZIP.AU) surged 12.88% during Wednesday's trading session after the Australian installment-payments provider raised its annual earnings guidance, signaling strong momentum in its business, particularly in the U.S. market.

Zip announced it now expects earnings before tax, depreciation and amortization (EBTDA) for the fiscal year 2025 to reach at least A$160 million (US$104.4 million), which is A$7 million above its previous guidance. The company cited robust performance in the United States, where the value of transactions conducted on its platform in May increased by more than 40% compared to the previous year. CEO Cynthia Scott attributed this success to "the resilience of our business model and disciplined execution of our strategy."

In addition to the positive earnings outlook, Zip reported continued transaction value momentum across all markets and consistent credit-loss performance in the U.S., Australia, and New Zealand. The company also provided an update on its ongoing share buyback program, revealing that it has purchased 12.3 million shares for A$22.6 million out of the announced A$50 million on-market buyback. This combination of strong financial performance and shareholder-friendly actions has contributed to Zip's stock price surge, with shares up 96% since the buyback announcement in April.