Flexshopper (FPAY) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 revenue of $38.6M, up 22.9% year-over-year, with adjusted EBITDA rising 44.9% to $12.2M and gross profit margin expanding to 58%.

• Net income for Q3 2024 was $2.4M, or $0.05 per diluted share, up from $0.9M in Q3 2023, reflecting improved gross profit and lower provision for doubtful accounts.

• Signed retail store count rose to over 7,800, a 250% increase since year-end 2023, supporting B2B and B2C growth strategies.

• Strategic transformation included new retail initiatives, expanded product offerings, and improved risk management, reducing provision for doubtful accounts by 1,000 basis points.

• Filed patent infringement lawsuits against Upbound Group and Katapult Holdings to protect proprietary LTO technology.

Financial highlights

• Q3 2024 total revenues: $38.6M (+22.9% YoY); nine months ended September 30, 2024: $104.3M (+20.3% YoY).

• Q3 lease funding approvals increased 33% year-over-year to $77M; nine-month approvals up 53.1% to $195.2M.

• Gross profit for Q3 2024: $22.5M (+32.9% YoY); gross profit margin: 58% (up from 54%).

• Adjusted EBITDA for Q3 2024: $12.2M (+44.9% YoY); margin improved to 31.5% from 26.7% YoY.

• Cash at September 30, 2024: $7.3M, up from $4.4M at year-end 2023.

Outlook and guidance

• Management expects continued growth in retail revenue, further expansion of product categories, and ongoing improvement in asset quality and gross margins.

• Proceeds from a proposed rights offering will be used to repurchase over 90% of Series 2 preferred stock, reduce credit facility debt, and fund potential acquisitions.

• Management remains vigilant regarding macroeconomic slowdowns but is optimistic about continued growth and profitability into 2025.