Fintech’s Earnings Divide: Profitable Platforms Pull Ahead as Credit Pressure Builds
Happen, Pagaya and Porch turned growth into profit this quarter, while OppFi felt the pressure of weaker credit. Upstart, EverQuote and more report next.
Fintech’s third-quarter results are drawing a clear line. Companies turning data-driven growth into profit are pulling ahead, while those where credit is slipping face closer scrutiny.
Happen, Inc. (NASDAQ: HAPN), the digital bank formerly known as LendingClub, delivered one of the strongest quarters. Originations rose 26% to $3.3 billion, pre-tax income reached a record $76.8 million and diluted EPS climbed 35% to $0.50. The company raised its full-year EPS guidance to $1.87 to $1.92, a forecast that assumes a stable consumer and another quarter-point Federal Reserve rate increase in December.
Pagaya Technologies (NASDAQ: PGY), which uses AI to connect lenders with credit decisioning and institutional capital, told a similar story. Total revenue and other income rose 12% to $390 million, network volume grew 29% to $3.6 billion, and GAAP net income reached $50 million. Pagaya raised its full-year net income outlook.
In insurance, Porch Group (NASDAQ: PRCH) more than doubled adjusted EBITDA excluding its reciprocal exchange to $44.5 million and raised its outlook again. Its shares climbed 28.16% on October 29, the strongest move across PRISM’s indexes that day.
Three different businesses, in digital banking, AI lending and insurance, each showing that data-driven platforms can turn growth into profit. That is the test investors are applying across fintech this earnings season.
Not every lender passed. OppFi (NYSE: OPFI) reported third-quarter revenue of $149.2 million, down 3.8%, as net charge-offs rose to 52.6% of average receivables on an annualized basis, from 46.7% a year earlier. The company launched a new line of credit product and repurchased $6.7 million of stock during the quarter, but its results show that credit quality remains the dividing line in consumer lending. Investors will watch whether the new product helps stabilize losses in the quarters ahead.
The Next Two Weeks
November 2: EverQuote (NASDAQ: EVER) reports after the close, a read on whether online insurance marketing demand holds up after Porch’s strong quarter.
November 3: Upstart (NASDAQ: UPST) reports before the open. It is the closest comparison to Pagaya, since both apply AI to consumer lending with different funding models, so investors will watch loan volumes, credit performance and any commentary on funding costs. Finance of America (NYSE: FOA) reports after the close.
November 4: CPI Card Group (NASDAQ: PMTS) reports before the open.
November 5: NCR Voyix (NYSE: VYX) and Marex Group (NASDAQ: MRX) report before the open, offering a look at payments technology and institutional markets.
November 9: Bakkt (NYSE: BKKT) and Securitize (NYSE: SECZ) report after the close, the first earnings look at stablecoin infrastructure and tokenized assets since Ripple’s latest institutional push.
Where Digital Assets Fit
That push came this week, when Robinhood announced a partnership with Ripple. Ripple’s RLUSD stablecoin is already live on Robinhood Chain and Bitstamp by Robinhood and is expected to reach the Robinhood app later this year. Robinhood will also use RLUSD for institutional settlement and integrate Ripple Treasury into its own treasury operations.
The deal shows digital assets moving into the core operations of established financial firms, not just their trading desks. But the same test applies there as everywhere else in fintech: institutional adoption matters most when it shows up in revenue or cost savings.
The PRISM Fintech Index is up 21.74% since its January 2024 launch. The next two weeks will show which of its companies can keep turning innovation into earnings.
