Earnings Continue to Dominate as FinTech IPO Index Loses 2.8% and Katapult Slides

The FinTech IPO Index slid 2.8%, as earnings continued to come in, particularly from companies based overseas.

Katapult shares led to the downside through the past five sessions, with shares down 23% during that time.

The company said in its most recent earnings announcement earlier in the month that gross originations were $54.7 million, an increase of 18%. Katapult noted that 51% of gross originations for the second quarter of 2023 came from repeat customers. Total revenue was $54.6 million, an increase of 2.9%. Write-offs as a percentage of revenue, per Katapult’s release, were 9.2% in the second quarter of 2023 compared to 8.4% in the first quarter of 2023, and up from 6.3% a year ago. Third quarter guidance pointed to a slight deceleration in gross origination growth to a 14% to 16% range.

Brazil’s XP shares sank 8%. It reported that in its second quarter, client assets were up 21% year over year (YoY) to 1 trillion reals ($200 billion), and gross revenues gained 3% in the same period to 3.7 billion reals.

Active clients at the end of the most recent quarter stood at 4 million, with 47,000 net additions during the period. New verticals, per the company materials were 11% of total revenues in the second quarter.

Earnings Roll in From China

In China-based OneConnect’s results, the company said that revenues sank 3.5% to RMB 973 million ($133 million). Digital banking revenues slipped 24% to RMB 235 million. Shares were off 9.8%.

Huize, also based in China, said this past week during the second quarter, gross written premiums facilitated on the company’s platform increased by 58% YoY to RMB 1.3 billion.

First-year premiums facilitated by Huize increased by 85.2% YoY to RMB 897.9 million.

The cumulative number of insurance clients served increased to about 8.9 million as of June 30.

Renewal premiums accounted for RMB 479.8 million, or 34.8% of total gross written premiums, an increase of 24% YoY. Operating revenue was RMB 368.2 million, up 48% YoY.

Huize’s shares gave up 2.2%.

Blend Lab’s stock gave back 12.6% as mortgage rates soared to multidecade highs. And the company said this past week that total revenues slipped by 35% to $42.8 million, as revenues from its Mortgage Suite plummeted 17% to $22.3 million. Total title revenues were down 61%. The company is laying off another 150 workers in a fifth round of layoffs in roughly a year and a half.

These losses to index members were more than enough to overshadow gains, as dLocal surged 50% in the week, after the Uruguay-based payments services provider posted results and is reportedly seeking a buyer. The company named the former chief financial officer of MercadoLibre, Pedro Arnt, as its co-chief executive officer. In terms of financial results, the company reported revenue of $161 million, up 59% YoY and 17% sequentially.

In non-earnings news, Farmers Insurance Federal Credit Union announced its partnership with Upstart to provide personal loans to consumers across the country. As noted in the release, Farmers Insurance Federal Credit Union became an Upstart Referral Network lending partner in December 2021. Upstart shares lost 0.8%

Elsewhere, Affirm has partnered with Selfbook and first joint hotel partners Cape May La Mer, Victor Hotels and The Kartrite to offer monthly and biweekly payment options.

Affirm shares declined 5.1%.

Marqeta shares were up 8.4% through the past week. As reported here, Simon Khalaf, CEO, said in a post-earnings interview with Karen Webster that the revenues gleaned from Block (Marqeta’s largest customer for years, with more than three quarters of net revenues as measured through the first half of the year) will help underpin diversification. The company, as widely reported, has extended its pact with Block through 2027.

Marqeta’s most recent quarterly report showed total processing volume growth of 32% to $53.6 billion. And Khalaf said during his interview with Webster that, in terms of new revenue streams, there is opportunity to introduce card issuance and power earned wage access — and embedded finance — across a variety of business models.