FinTech IPO stocks rally 3.8% amid earnings
The FinTech IPO Tracker is up 16.9% for August – and we’re not even halfway through the month.
Earnings continued to drive stock performance, and in many cases the movements, up or down, were significant, often in double-digit percentage points.
Lemonade was up 29.5% on the week. The company said in its latest earnings release that current premiums were $458 million, up 54% year-over-year. Premium per customer increased by 18% in the same period, and the total number of customers increased by 31% to 1.6 million. Lemonade said in its materials that 23% of sales in the quarter came from cross-selling activity.
With the closing of the Metromile (a pay-per-mile vehicle insurance) transaction, Lemonade said the deal “significantly changes our product mix. Renters now make up about a third of our book, down from nearly half, while Car jumped from 1% to 20% overnight .” Auto and home insurance to be bundled soon, company said Last week, Lemonade said it has sold Metromiles Enterprise Business Solutions (EBS) to digital insurance platform EIS.
MoneyLion was up around 20% heading into, and just after, its Thursday (August 11) earnings report. The company said customers increased 124% year-over-year to 4.9 million for the second quarter of 2022. Additionally, products of 10.4 million increased 75% year-over-year for the second quarter of 2022. Total production grew 85% year-over-year -over-year to $439 million for the second quarter of 2022.
Enfusion followed with a jump on its own results, with shares rising 15.5% over the past week. Revenue grew to $36.5 million, according to the latest release, up 38% year over year, led by new client signings and growth from existing clients.
Some naysayers too
Not all names that reported earnings rose, however. Paymentus lost 38% following its results earlier this month, which showed second-quarter transactions up 39% year-on-year to 89.5 million. Revenue increased by 28.3%. The company led to slow growth going forward, and guided that revenues for the year should increase 25% to 27%.
Opportun went down 24.4 percent. The company said this week that its second quarter saw 103% year-over-year origination growth, with 63% year-over-year revenue growth. The company revealed in its filings that it had more than 1.8 million members, an increase of more than 300,000 since the beginning of the year. At least there is some nod to lower originations due to credit tightening. The company also said it raised expectations for offloading. The filings note that the 30-day delinquency rate was 4.3%, up from 2.5% last year. The annual net depreciation rate was 8.6% in the most recent period, up from 6.4% a year ago.
And as reported here, Marqeta shares fell more than 20% on Thursday, as growth slows and the future is uncertain for Marqeta’s key FinTech customers, and especially those customers’ card programs. Marqeta’s 53% TPV growth is a meaningful slowdown from the 76% seen earlier in the year.
CFO Mike Milotich noted that it is “sound to be cautious about the next few months.”
FinTechs, he said, are “less aggressive” in terms of expansion plans and investments. He stated that “many of the customers signed in the last 12-plus months, as well as crypto customers, will grow their business more slowly than we expected a few months ago”, which in turn means that these customers’ card and other financial product offerings will is muted.
Within TPV, growth accelerated in spend management and on-demand delivery, offset by tough year-on-year comparisons in financial services and BNPL segments.
Also read: Marqeta’s results point to slowing growth in the issuance of FinTech digital cards