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Fintech Q3 Earnings: Oportun, Square, Green Dot

This week saw three fintech firms representing payments, debit, and credit post results.

Although each saw momentous growth year over year, in some cases, it was not enough to outpace expectations after this bull run of a year for fintech. 

Consumer credit

Consumer credit fintech Oportun Wednesday reported positive results on stellar originations and revenue. The firm saw $662 million in aggregate originations, up 119% from last year, and $159.1 million in revenue, up 16% year over year.

The firm said in its release growth came from an increase in the “Average Daily Principal Balance” due to higher originations. In addition, Oportun posted net revenue of $139.5 million, up 51.1% from the same time last year. 

“We delivered another excellent quarter, as we accelerated our growth in aggregate originations, revenue, and earnings, maintained our strong credit profile, and outperformed our forecast across the board,” CEO Raul Vazquez said.

“Our A.I.-driven digital platform now extends to 45 states, and we are delivering robust production through all our channels and partners. We are making excellent progress with our strategic initiatives and are well-positioned to continue making a significant and positive impact on the financial lives.”

Merchant payments, Bitcoin sales

Thursday, the mobile payments, merchant services, and Cash App company Square posted disappointing earnings, despite $42 million of gross profit, primarily due to $1.82 billion in bitcoin revenue. Still, shareholders were not impressed, sending the stock down about 6% as of this writing.

Analysts expected overall sales of $4.51 billion to keep track of Square’s enormous growth this past year, but sales came in at $3.84 billion, and little changed compared to the second quarter. 

The company announced plans to launch a division called TBD to build a decentralized bitcoin exchange. According to CEO Jack Dorsey’s plans, Square also plans to enable bitcoin mining somehow and recently offered Cash App for teenagers for financial education. 

There was little about the performance of the new Afterpay acquisition, as the firm said in a release it hopes to build a suite of financial products alongside the BNPL platform.

“In August, we entered into an agreement to acquire Afterpay, a global buy now, pay later platform with more than 16 million consumers and approximately 100,000 merchants as of June 2021,” the investor letter read.

“Through this transaction, we plan to unite two complementary businesses with a shared focus on economic empowerment and financial inclusion. We believe the combination will more deeply connect our Seller and Cash App ecosystems, accelerate our strategic priorities, and allow us to deliver even more compelling products and services for consumers and merchants.”

Payments, consumer debit

Also, on Thursday, financial holding company Green Dot reported positive results on its digital prepaid debit and payments platform. Shares earned $0.13 on $7.6 million in net income and a year-over-year increase of 17% in operating revenues by $339.5 million. The stock briefly rose by 2% before returning to $43 a share. 

In its quarterly earnings call, Green Dot celebrated the hiring of George Gresham to the position of CFO and COO in October.

“We delivered another strong quarter with solid revenue growth, progress strengthening our infrastructure and leader bench, and new innovations for customers and partners,” CEO Dan Henry said.

“We’re on a clear path to becoming a stronger, leaner, more scalable company, which will accelerate our mission to give all people the power to bank seamlessly, affordably, and with confidence.”

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