FinTech IPO Index Loses 1.8% as Oportun Plunges, Earnings Roll In

The earnings deluge is what moved names this past week — and for the FinTech IPO Index, the movement was mostly to the downside.

The index lost 1.8%, led by Oportun Financial, whose shares plunged by 55.8%. The company said this week that it is laying off 18% of its staff, and said in its third quarter release that it also is “exploring strategic options” for its card operations.

In addition, the data shows that aggregate originations were $483 million, down 24% year over year (YoY). The annualized net charge-off rate of 11.8% as compared to 9.8% for the prior-year quarter.

Open Lending shares lost 7.6%.

The company posted results that showed revenues sliding to $26 million from $50.7 million a year ago. The company’s total certifications came in at just under 30,000 from a bit more than 42,100 last year.

CEO Keith Jezek noted on the conference call with analysts, “The increase in inventory levels has begun to drive down average transaction prices and is slightly improving consumer affordability. However, the used auto market remains depressed due to low inventory levels, which declined 8% year over year and remains over 20% below pre-pandemic levels.”

Beike Finance stock gave up 1.8%. The company said that gross transaction value was 655.2 billion yuan ($89.8 billion), a decrease of 11.1% YoY. Gross transaction volume of existing home transactions was 439 billion yuan ($60.2 billion), down 2.2% YoY. Net revenues were 17.8 billion yuan ($2.4 billion), an increase of 1.2% YoY.

In terms of store count, the firm said that the number of stores was 43,013 at the end of September, up 3.9%.

Mobile monthly active users averaged 49.2 million in the most recent quarter, compared to 42.4 million in the previous year.

Lemonade Shares Squeezed

Lemonade’s shares slipped more than 7%.

As reported here, Lemonade said this past week that its platform now has 2 million customers. The pace to reach its second million was 35% faster than the first million in 2020, the firm said. In tandem with the company’s most recent results, Shai Wininger, Lemonade’s co-founder/co-CEO said, “We’ve doubled our customers while increasing our premium by 3.5x. This is indicative of the strong progression of the business in recent years, and outlines a clear path to profitability.”

The firm’s gross loss ratio was 83%, “continuing the favorable trend we were seeing in recent quarters, which was rudely interrupted in Q2 2023,” Lemonade said in its letter to shareholders.

Paymentus’ latest quarter had momentum as its wholesale business-to-business (B2B), healthcare and other firms seek to transform bill pay operations. Earnings materials showed that revenues were up 18.9% to $152.4 million. Transactions in the third quarter surged 25.2%, to 115.4 million.

CEO Dushyant Sharma noted on the conference call with analysts that the firm exited the third quarter with “a strong bookings backlog,” and added that the company’s instant payment ecosystem “continues to be attractive to financial institutions as well because it allows them to modernize their legacy bill pay experience with minimal difficulty or expense.”

CFO Sanjay Kalra said on the call that the double-digit transaction growth was driven by increased transactions from existing billers, the launch of new billers and increased activity across the Paymentus instant payment network.

Paymentus shares gained 3.2% through the past five sessions.

Expensify’s stock lost 28.7%. In the company’s third quarter earnings report, revenues were 14% lower, to $36.5 million. Paid members roster was 719,000, a decrease of 6% YoY.

Toast’s stock lost 17.1%.

The restaurant point of sale (POS) provider showed a 37% YoY surge in revenue to about $1 billion. Additionally, the total number of locations increased to around 99,000, marking a 34% YoY increase.

Toast COO Aman Narang noted ToastNow is finding favor with customers. The app, which allows operators to manage their restaurants on the go, offers real-time insight into performance data, facilitating a range of tasks, including kitchen volume management, menu adjustments, and communication with staff, all from their mobile devices.

“This is something our customers have been asking for and allows us to build an even deeper connection with restaurant operators,” Narang said, adding that early adoption levels show that about 20% of locations are already on Toast Now only a week after the Nov. 1 launch.

Elsewhere, MoneyLion released quarterly earnings that detailed revenues of $110 million, up 24% YoY.

The company said it had diversified its product mix this quarter, expanding into non-lending verticals such as high-yield savings. For example, revenue from personal loan verticals now makes up 55% percent of MoneyLion’s enterprise marketplace revenue, compared to 85% in the prior quarter.

MoneyLion’s shares leaped 22.6% through the week.