Gains Soften Slump of FinTech IPO Index
The earnings caravan rumbles on.
And the results, as seen over the past week — at least for the digital first and digital only upstarts out to change financial services — have been mixed.
The FinTech IPO Index lost 1.6%. Yet, month to date, the group is still up a bit more than 15%, reflecting two weeks of trading that, overall, have been positive, and have outpaced the Nasdaq’s roughly 9% gain through the same period.
Payoneer was up 19.6%, on the heels of earnings that saw reported volumes gain 8% year on year to $14.6 billion. The company said in its earnings announcement that revenues surged by 34%. And in a bit of detail surrounding the transformation of commercial payments, B2B AP/AR volumes grew over 65% year-over-year and represented 12% of total volume in the second quarter, Payoneer said.
Nu Holding’s shares gathered nearly 15%, as the company’s own earnings report showed total revenue surged 230% to $1.2 billion in the latest quarter, as its customer roster grew by more than 50% in the same period, to 65.3 million.
Nubank’s customers grew by 5.7 million, or 57%, in the quarter, to a total of 65.3 million, while clients for its core credit card products hit 29 million. Earnings supplementals released by the company show that the installed customer base represents more than a third of Brazil’s adult population. In addition, deposits were up 87% to a USD equivalent of $13.3 billion. Digital banking services are being used by 2 million SMEs, the company said in its filings.
NerdWallet was up by 10%, extending gains seen after the company’s earnings results earlier this month showed that credit card-related revenue of $54.6 million grew 82% year-over-year and “other verticals revenue” of $46.6 million was up 58% year-over-year, marked by growth in SMB products.
Decliners Drag Performance Down
These gains were not enough to offset Marqeta’s 29% slide. As we noted last week, Marqeta’s key FinTech customers are facing macro pressures of their own. Though the company posted 53% growth in TPV, it’s a slowdown from previous rates of more than 75%, and management has guided to revenue growth rate in the high 30% range.
Chief Financial Officer Mike Milotich noted it is “prudent to be cautious about the next several months.”
FinTechs, he said, are being “less aggressive” about their expansion plans and investments. He stated that “many of the customers signed in the last 12-plus months, as well as crypto customers, will ramp their businesses more slowly than we expected a few months ago” which in turn means that these clients’ cards and other financial products offerings will be muted. BNPL growth has fallen below 100% for the first time.
OppFi gave up about 16.7% on the week, having withdrawn its guidance for metrics other than revenue growth, and noting in its quarterly report that there is “limited visibility” as a result of macro pressures. The release also noted an uptick in net charge offs, as measured as a percentage of average receivables. Net originations for the most recent quarter were up 57%, to $226.2 million.