Funding Circle Holdings plc

For H1 2026, credit extended increased 52% to GBP 1.7 billion, revenue rose 50% to GBP 138 million, profit before tax increased fourfold to GBP 24 million, and assets under management were GBP 3.3 billion, up 15%. Operating expenses were GBP 99 million, up 27%, and the overall profit before tax margin increased from 1% to 17%. By segment, term loans revenue grew 43% to GBP 108 million and generated GBP 29 million of profit with a PBT margin above 26%; FlexiPay and the credit card generated GBP 30 million of revenue, up 83% from GBP 16 million a year ago. Expected credit losses for FlexiPay and the credit card were GBP 15 million. For FY26, management now expects revenue greater than GBP 255 million and PBT greater than GBP 40 million. Tony Nicol also said medium-term guidance remains GBP 300 million to GBP 350 million in revenue with low-to-mid-20% margins, and the company is trending toward the upper end of that range.

Lisa Jacobs framed the half as evidence that the multiproduct strategy is working, saying Funding Circle is becoming a more important part of customers’ daily lives and is increasing share of wallet. She highlighted the company’s moat from 16 years of proprietary data and technology, and pointed to a large underserved SME market as the long-term growth opportunity. Her tone was upbeat and confident, while also notable for the announced plan to step down as CEO by the end of September 2027, which she described as a deliberate transition after building a stronger platform.

Tony Nicol emphasized operating leverage: revenue grew 50% while operating expenses rose 27%, helping PBT margin expand to 17% from 1%. He said term loans remain the profit engine, FlexiPay and the credit card are in a “J curve” investment phase, and if growth stopped today those newer products would be profitable by around GBP 10 million on an annualized basis. He also said FlexiPay has reached free cash flow breakeven before funding growth, unrestricted cash was GBP 136 million, deployable cash was GBP 88 million after buffers and buyback obligations, and the company will start a further buyback of up to GBP 25 million. On funding, he noted GBP 2.4 billion of forward flow arrangements, up from GBP 2.2 billion at year-end, and said the Citi facility was renewed in April at GBP 320 million plus equity on better terms and pricing.

Analysts pressed on whether the medium-term revenue plan is now too easy to hit, given H1 growth far outpaced the implied long-term pace. Tony said growth should not be annualized from the unusually strong first half because Q1 was especially strong and the shorter-term loan launch boosted comparisons; he said the Board will revisit the medium-term plan at year-end, but management is currently comfortable being at the upper end of the range. Questions also focused on CEO succession, FlexiPay profitability, and funding conditions; management said most mature FlexiPay/card cohorts are already profitable, the business should reach breakeven in the near future, and private credit diligence has increased but Fundng Circle is seeing strong appetite and even a “flight to quality.”