FinTech IPO Index Loses 3.3% as Upstart Plunges on Earnings

Earnings season moves on, and in some cases, results underwhelmed investors — and forward-looking guidance — sending shares down significantly and the FinTech IPO Index as well.

Upstart and Open Lending shares sank in the wake of reports that gave the nod to macro pressures and current quarter guidance that underwhelmed investors.

Upstart Technologies shares lost 25.5%. The company noted that the lending environment remains “difficult.” as CEO Dave Girouard said. Company materials noted that revenues of $140 million were 4% lower than last year. The company said 129,664 loans were originated, totaling $1.3 billion across its platform in the fourth quarter of 2023, down 19% from the same quarter of the prior year. The company expects first-quarter revenues of $125 million and a net loss of $75 million.

Opendoor Technologies shares sank more than 10%, having posted fourth-quarter results that showed revenue of $6.9 billion, down 55% from a year ago, 2022, with 18,708 total homes sold, down 52% versus 2022. The company guided its first quarter fiscal year revenues to $1 billion to $1.1 billion.

A Few Gainers

Open Lending shares were up 4.3%.

The company said that it had struck a partnership with insurance pricing solution provider Akur8 to complement its proprietary Lenders Protection platform. The companies said that Akur8’s predictive insurance pricing models will build upon Open Lending’s existing risk model, which can analyze 2 million borrower risk profiles and deliver a decision within five seconds.

Toast shares were up 6.8%.

As we noted in the wake of earnings, Toast’s latest quarterly earnings were marked by the announcement of a 10% headcount reduction, even as subscription revenues increased, but growth across some metrics slowed. CEO Aman Narang said on the call that staffing cuts came because the company grew its team “too quickly” in some areas.

The company noted in its earnings materials that total revenues were up 35% year over year (YoY) in the December quarter to more than $1 billion, but that growth rate is slower than the more than 50% growth rate seen earlier in the year over corresponding periods in 2023. Subscription revenues were up 49%, down from more than 70% logged earlier in 2023.

CFO Elena Gomez said on the call that non-payment-related FinTech solutions led by Toast Capital contributed $34 million in gross profit in the most recent quarter.

Remitly shares were flat.

The company detailed that active customers were up 41% year over year. Send volumes were up 38% year over year to $11.1 billion. The company noted that active customers increased to 5.9 million from 4.2 million, up 41%.

Nuvei said last week that it is expanding its Latin American presence by launching direct local acquiring capabilities in Colombia. This makes Nuvei the first global payments provider to offer this service in the country, the company said. Merchants can benefit from card authorization rate uplift, reduced settlement times from days to potentially less than 24 hours and optimized processing resource commitments, according to the release.

Nuvei shares lost 7.9%.