FinTech IPO Index Dips 0.9% as Platform Earnings Ding Stocks

For the FinTech IPO Index, it was all earnings, all the time.

Even strong growth in lending and card issuance, all mainstays of digital upstarts, was not enough to buoy the group.

Double-digit declines were a hallmark of performance, but there were some gains too, so the overall index was down a relatively muted 0.9%.

Katapult dropped 39.7%. In the company’s third-quarter earnings report, gross originations were up 25% to $64.2 million, and total applications grew by about 80% year over year. Revenues were up nearly 23% to $74 million. The company guided to 15% to 20% growth in originations in the fourth quarter, with a nod to the “challenging” macro environment marked by the government shutdown and pressure in the home furnishings category.

Circle Internet Group’s third-quarter earnings results indicated that, in the words of CEO Jeremy Allaire, “more and more firms who are involved in money movement, who are involved in cross-border money movement, … all of those want to take advantage of the speed and capital efficiency and cost efficiency of stablecoin infrastructure.”

Management lifted its expense outlook for the year, signaling heavier investment in growth as total revenue and reserve income of $740 million grew 66% year over year.

The Arc public testnet, launched Oct. 28, is the centerpiece of Circle’s strategy. The company previously described it as a “programmable financial infrastructure” for global commerce.

Looking ahead, Circle expects to maintain a 40% compound annual growth rate in USDC circulation over the next several years.

Circle’s shares were down 19.4%.

Paysafe’s stock was down by more than 28%. Although eCommerce growth was in the double digits, it moderated somewhat, according to third-quarter earnings results. Digital wallets and other product roadmaps also faced headwinds, tempering forward guidance.

CEO Bruce Lowthers told analysts during a conference call that the updated outlook “reflects our current business dynamics and a longer timeline for the delivery of key product initiatives as we navigate the complex ecosystem required to bring innovative new solutions to the market.”

The eCommerce picture was mixed. An earnings presentation released in tandem with results indicated 22% growth in eCommerce revenues tied to larger enterprise merchants, tied to iGaming.

“Total eCommerce growth moderated compared to more than 30% in recent quarters due to softer performance across other verticals concentrated within lower-tier merchants, mainly in non-core areas,” Lowthers said during the call.

Tailwinds in Card Issuance

Chime Financial’s third-quarter earnings results demonstrated double-digit growth in the FinTech’s active membership base and increased usage of the Chime Card for everyday spending.

During a conference call with analysts, CEO Chris Britt said the company notched 9.1 million active members in a market of nearly 200 million people earning up to $100,000 per year.

“We’re at a $2 billion revenue run rate, in an over $400 billion market,” he said. “There’s a secular shift happening in mainstream America towards digital banking.”

The company delivered 29% year-over-year revenue growth despite lapping the initial launch of MyPay. Revenues came in at $544 million for the quarter.

As for the Chime Card, where the company makes 175 basis points of interchange, Britt said that “new members who adopted Chime Card are already using it for 80% of their spend.”

Average revenue per active member was up 6% year over year to $245, as more members used more of Chime’s products.

The shares tacked on 2.4%.

Opendoor’s third-quarter “Open House” update reported revenue of $915 million for the quarter, compared to $1.38 billion a year earlier, and a net loss of $90 million. Homes sold totaled 2,568 for the quarter, while homes in inventory stood at 3,139, with inventory valued at $1.05 billion.

CEO Kaz Nejatian told investors that Opendoor is being re-founded as a software and AI company and laid out a path to breakeven adjusted net income on a forward 12-month basis by the end of next year.

The stock gathered 25% over the past five trading sessions.

Flywire: Cross-Border Payment Volumes Rise

Flywire’s third-quarter earnings results notched revenue up 27.6% year over year to $200 million, from $156.8 million. Total payment volume increased 26.4%, to $13.9 billion, compared to $11 billion a year earlier, with TPV ex-Sertifi growing 24%, to $13.7 billion.

CEO Mike Massaro said Flywire added more than 200 new clients and continued to grow market share.

The shares gained 1.5%.