FinTech IPO Surges 4.6% as Robinhood Leads Earnings Season Rally

Earnings reports moved several components of the FinTech IPO significantly higher — and lower — and took the overall index up 4.6% through the past week.

Robinhood shares were up 19.6%. In earnings that were announced late in the week, Robinhood’s management noted during the conference call with analysts that the company has been taking trading market share for some time and is winning net asset inflows from its major competitors.

The company added 11 bitcoin ETFs last month on the first day they were available after being approved by the Securities and Exchange Commission (SEC).

The company said in its earnings report that funded customers increased by 420,000 year over year (YoY) to 23.4 million. Assets under custody increased 65% YoY to $102.6 billion, primarily driven by continued net deposits and higher equity valuations. Net deposits were $4.6 billion, up 21%. Gold subscribers increased 25% YoY to 1.4 million.

Oportun shares surged 17.7% after announcing the issuance of $200 million of fixed rate asset-backed notes secured by a pool of unsecured and secured installment loans.

Marqeta gained 12.4%. The company said that its new customer, Internet Travel Solutions (ITS), a provider of travel management software that will utilize Marqeta’s comprehensive credit card platform to launch a multiuse travel and expense commercial credit card for the mid-sized business market, according to the companies’ joint release.

ITS will use Marqeta’s offerings to build customizable credit card solutions that help businesses streamline expenses, access capital and boost operational efficiency.

Upstart Loses Ground

Upstart shares lost 21%.

As noted in our own coverage of the company’s earnings report, Upstart said that 89% of its unsecured loans approved through an instant and fully automated process during the quarter ended Dec. 31.

In addition to providing a better user experience, the automated credit origination process also delivers a conversion rate that is more than three times higher, CEO Dave Girouard said during the company’s conference call. While 27% of the applications that involved a manual step converted to a funded loan, 92% of those that were automatically approved converted, he added.

In the fourth quarter, 129,664 loans were originated, totaling $1.3 billion across the company’s platform, down 19% from the same quarter a year earlier. For the full fiscal year, 437,659 loans were originated, totaling $4.6 billion, down 59% from fiscal year 2022.

Affirm shares slipped 15.5%.

During the company’s own earnings report the details showed gross merchandise volume (GMV) up 32% and that active Affirm Card consumers reached more than 700,000 at year end. The company said that Affirm Card volume was $397 million in the latest period. The firm’s Card segment logged a sizable increase from $11 million in GMV and less than 50,000 active customers in the prior year.

Delinquencies were flat YoY and credit performance is returning to pre-pandemic levels, Levchin said in the letter. Asked about the potential of direct deposit onto the company’s cards and/or app, CEO Max Levchin said that initial reception has been positive and that repeat transactions have been significant for cardholders and especially account holders.

FinWise shares lost 1.5%.

The company’s latest announcement showed that Earnest has partnered with FinWise Bank to enhance its portfolio of private student loan products. FinWise Bank is Earnest’s newest banking partner to originate private student loans.