Flywire Leads FinTech IPO Index’s Post Earnings 6.2% Slump

The FinTech IPO Index was awash in a sea of red this past week, with nary a positive showing to be found. Earnings were met, by and large, with dissatisfaction, as investors sent shares down by double digits in many cases, even when results topped expectations or management’s projections.

The index slid by 6.2%.

Flywire Leads Declining Stocks

Flywire led to the downside, as shares sank nearly 42%. The firm said this week that  revenue increased 17% to $117.6 million in the fourth quarter of 2024, and the number of clients grew by 16% year over year, with over 180 new clients added. Total payment volume increased 27.6% to $6.9 billion in the most recent period. The company expects to see revenues in the current quarter grow by 10% to 14% over last year’s levels.

AvidXchange shares slipped 22.4%. As reported for the fourth quarter, total revenue was $115.4 million, an increase of 10.9% year over year. Total transactions processed in the final three months of the year were 19.9 million, an increase of 4.3%. Total fourth quarter payment volume was $21.9 billion, up 10%.

Lemonade’s stock was up a scant 0.8%.

The company’s investor materials noted that at $944 million, In force premium grew 26% year over year, while revenue grew 29%. The company reached $283 million of pet-related in force insurance premiums through the year, up 57% from 2023’s levels.  Forward looking guidance sees IFP growth of 28%. Customer count increased by 20% to 2.4 million. Premium per customer was up 5% year over year.

In non-earnings related news PYMNTS reported this past week, Affirm has expanded its partnership with Shopify. Affirm will serve as the exclusive pay-over-time provider for Shopify’s Shop Pay Installments program in the U.S. and Shopify’s home country of Canada, with plans to expand into the U.K.

In the coming months, eligible Shopify merchants in Canada will be able to offer Shop Pay Installments powered by Affirm at checkout, letting customers make payments in customized biweekly or monthly installments. Affirm’s stock lost 17.3%.

Elsewhere in the buy now, pay later (BNPL) space, Sezzle’s latest results showed that fourth quarter revenues doubled to $98.2 million. Gross merchandise volumes (GMV) were 42% higher to $855.4 million. Total active customers were up 4.8% to 2.7 million, and unique merchant tallies were 339,000 higher to 598,000.

Monthly on-demand and subscriber rosters grew by 400,000 year over year to a recent 707,000 customers.

Charlie Youakim, CEO, said on the conference call with analysts that BNPL and the company’s growth potential are considerable, noting that “to say that we are in early innings is an understatement. … While we continue to ride the BNPL wave, we also believe that we can continue to outpace and take share within the segment.” The stock declined 7.2% through the week.

SoFi’s stock slipped 9.6%. Its Galileo Financial Technologies partnered with Ascenda to help banks, FinTechs and other brands launch card loyalty programs. The joint efforts link Ascenda’s loyalty and customer engagement solutions that facilitate loyalty integration with Galileo’s financial technology platform that simplifies card issuing.

Marqeta Bucks the Trend

Marqeta was one of the lone gainers of note in the week, as shares were up 8.4%. As we reported this week, the company named Mike Milotich as interim CEO, replacing Simon Khalaf, who has stepped down from that role. Milotich will continue to serve as CFO.

The company also said it would acquire TransactPay, a BIN Sponsorship provider licensed as an E-Money Institution (EMI) in the U.K. and European Economic Area. The deal, Marqeta said in the announcement, will strengthen its card program management capabilities in the U.K. and Europe. EMIs are required in order to, among other things, issue prepaid and virtual cards in those regions.

The company also reported its fourth quarter results, where total processing volume (TPV) was $80 billion for the quarter, up 29% year over year. Revenues gained 14% on a net basis, to $136 million.

During the conference call with analysts, Milotich said the company is “making progress in adding additional banks while also streamlining our operations and program onboarding with existing bank partners” with “approved frameworks that align with bank standards and compliance guidelines.”

Milotich also announced that the American Express network would be “a new option for credit and debit card programs” in joint efforts that would begin later this year.

“Offering American Express will further widen the choices on our platform to differentiate and provide even more options to FinTech and embedded finance partners and prospects. We have signed an agreement … leveraging the American Express Agile Partnership platform, which enables FinTechs and other partners to launch cards on the American Express network,” Milotich said.