Earnings Deluge Helps Send FinTech IPO Index 4% Higher

Earnings were everywhere this past week, driving the FinTech IPO Index 4% higher through a volatile week of trading. 

Buy Now, Pay Later Momentum

Sezzle shares soared 52%. The company’s latest results detailed that  income growth was 35.5% year over year (YoY), while total subscribers surged to 371,000 from 142,000 a year ago. Quarterly purchase frequency was up 1.5 times on average to 4.5 times during the quarter. The provision for credit losses was 1% of underlying merchant sales, down from 1.7% in the fourth quarter.

Also, in the BNPL space, Affirm shares were 1% higher through five sessions. 

The company reported earnings that saw its gross merchandise volume (GMV) surge 36% YoY to $6.3 billion, marking the fourth consecutive quarter of accelerating growth.

Drilling down into the segments, the general merchandise category led the way with a 49% increase, followed by travel and ticketing at 35%. Direct-to-consumer GMV also experienced a significant boost, growing 49% YoY to reach $1.6 billion. Affirm’s active consumer base expanded by 13% YoY to 18.1 million, and its active merchant count rose 19% to 292,000. Total revenue grew 51% YoY to $576 million.   

Elsewhere, Toast’s earnings noted that in the first quarter, annual recurring revenue as of March 31 was $1.3 billion, up 32% YoY.  Gross payment volume (GPV) increased 30% YoY to $34.7 billion. Total locations increased 32% YoY to approximately 112,000. Toast shares were 15.4% higher.

MoneyLion’s March quarter results showed total customers grew 98% YoY to 15.5 million in the first quarter of 2024. Total products grew 73% YoY to 25.3 million in the first quarter of 2024. Total originations grew 42% YoY to $717 million for the first quarter of 2024.

MoneyLion shares rocketed 19%.

Upstart Shares Were Up

Upstart shares gained more than 11%. The company’s report this week on March quarter results stated that during the most recent quarter, 119,380 loans were originated using Upstart, totaling $1.1 billion across the company’s platform and up 13% from the same quarter of the prior year. Conversion on rate requests was 14% in the first quarter of 2024, up from 8% in the same quarter of the prior year.

Upstart reported that 90% of loans were fully automated — a new record — and that 91% of automated approvals converted to funded loans. Upstart’s revenue rose to $128 million, up from $103 million the same time last year. 

Marqeta’s latest results and commentary showed momentum in the company’s transaction processing operations — and opportunity in nascent markets such as earned wage access. 

CEO Simon Khalaf noted that during a single day during the quarter, Marqeta processed more than $1 billion on total payment volume (TPV), which he termed “a significant milestone.”  

In terms of headline numbers, net revenues of $118 million were 46% lower YoY, with a decrease of 58 percentage points tied to a revenue presentation change with the Cash App contract minimum.

CFO Mike Milotich said on the call that TPV grew 33% with “broad-based outperformance, particularly in BNPL, on-demand delivery and financial services.” Non-Block TPV grew about 15 points faster than Block growth, he said.  

“On-demand delivery growth remained in the double digits, accelerating quarter over quarter as our customers expanded into new merchant categories and geographies,” Milotich said.

During the question-and-answer session with analysts, Khalaf said that the company “pipeline is growing strongly, in both FinTech as well as embedded” solutions.

Marqeta shares surged 6.1%.

Among declining issues, Flywire shares sank 12.7%.

The company’s most recent earnings release noted that revenue increased 21% to $114.1 million in the first quarter of 2024. Total payment volume increased 23% to $7 billion in the first quarter of 2024. 

Paymentus shares lost nearly 8%. As detailed in the company’s most recent earnings report,  Paymentus processed 135.3 million transactions in the first quarter of 2024, an increase of 24.7% from the first quarter of 2023. 

BILL reported that, per its own latest earnings report, the number of small to medium-sized businesses (SMBs) using BILL’s solutions to digitize their operations and adopt electronic payments increased by 10,000 over the past year. The number of transactions processed by BILL increased 20% to 26 million, and the total payment volume transacted by BILL’s customers rose 10% to $71 billion, according to the company.

BILL shares were down 8.8% through the past five sessions.