Flexshopper (FPAY) Q2 2024 earnings summary

Executive summary

• Achieved Q2 2024 revenue growth of 29.8% year-over-year to $31.8 million, with gross profit up 89.3% to $15.9 million and adjusted EBITDA surging 1533.3% to $4.9 million, the highest Q2 level in two years.

• Net loss for Q2 2024 narrowed to $1.6 million from $5.3 million in Q2 2023, with operating income reaching $2.4 million versus a $2.0 million loss in Q2 2023.

• Expanded product offerings and payment solutions, including new microsites, partnerships, and a retail sales initiative targeting alternative lenders.

• Added 150 new retail partner locations in Q2, with plans to add 500 more in H2 2024, and expanded brick-and-mortar presence through acquisition.

• Continued expansion of lease-to-own and direct loan origination models, while seeking a new bank partner for the loan participation program.

Financial highlights

• Q2 2024 gross margin improved to 50% from 34% year-over-year; six-month gross margin was 51%, up from 40% year-over-year.

• Lease funding approvals doubled year-over-year to $74.8 million in Q2 2024.

• Adjusted EBITDA margin increased to 15.5% from 1.2% year-over-year.

• Lease receivables, net, increased to $57.2 million as of June 30, 2024, from $44.8 million at year-end 2023; loan receivables at fair value rose to $40.1 million from $35.8 million.

• Net loss for Q2 2024 was $1.6 million, a significant improvement from a $5.3 million loss in Q2 2023.

Outlook and guidance

• Management expects continued profitable growth in 2024, leveraging an expanded platform, strong asset quality, and access to capital.

• Plans to add a large prime credit issuer, launch additional microsites before the holiday season, and expand both online and physical retail channels.

• Anticipate 500 new retail storefronts to launch in the second half of 2024, bringing total close to 5,000.