Funding Circle Holdings Plc

In H1 2025, Funding Circle reported revenue of GBP 92.3 million, up 17% year on year, and profit before tax of GBP 6 million versus GBP 0.5 million in the prior year. Credit extended grew more than 20% year on year to GBP 1.1 billion. Term loans revenue was GBP 75.9 million and term-loan PBT was GBP 12.7 million, up 38% year on year with margins of almost 17%. FlexiPay/card transactions rose to GBP 375 million, FlexiPay revenue grew 119% year on year, and the FlexiPay/card loss for the half was GBP 6.7 million with expected credit losses of GBP 8.4 million. Management reiterated medium-term guidance for 2026 of more than GBP 200 million of revenue and more than GBP 30 million of PBT, said 2025 remains in line with market expectations, and cited a strong cash balance of GBP 115 million and more than GBP 60 million of future deployable cash.

Lisa Jacobs framed the company as a scaled SME finance platform with borrow, pay later and spend products, saying the expanded product set is increasing frequency of customer interaction and share of wallet. She sounded confident that the strategy is working, pointing to stronger recurring usage in FlexiPay, high customer satisfaction, and a resilient business model despite a tough macro backdrop. Her tone was upbeat but measured: the company is still focused on profitable growth, product expansion, and margin expansion rather than broadening too quickly beyond the current product set.

Tony Nicol highlighted the financial operating leverage in the first half: revenue rose 17% while operating costs rose only 4%, and excluding marketing costs were down 4% year on year. He said the company hit its target to take GBP 15 million of costs out on an annualized basis, and that PBT improved to GBP 6 million with a 6.5% margin. He also stressed balance sheet strength and capital discipline, noting over 50 million shares repurchased for GBP 53 million, 15% of issued share capital bought back, a GBP 230 million Citi facility for FlexiPay/card, and over GBP 1.6 billion of future funding in place at June 30.

Analysts focused on the new short-term lending product, asking what differentiates it, whether an institutional funder is lined up, and whether there are more product ideas in the pipeline. Management said it is an extension of the term-loan offer aimed at flexibility and a higher-risk segment, that they are talking to a number of institutions, and that commercial terms, including any gain on sale, are still being negotiated. Questions also centered on funding availability, competition from banks, and AI; management said funding remains comfortable, they have not seen a major change in competition, and AI is being used mainly for customer experience, productivity, and early pilots in underwriting, not yet as a major production transformation.