BILL Leads SMB Focus, Sends FinTech IPO Index Up 8.67% for Week
It was a good week on Wall Street for FinTechs despite one high-profile stock price drop from a member of the PYMNTS FinTech IPO 100: Marqeta. Led by BILL and Payoneer among others, earnings results drove the Index close to double-digits at 8.67% up for the week. The exclusive PYMNTS FinTech IPO Index is now up 24.39% YTD.
The star of the show for the week was BILL (formerly Bill.com). The payments automation and working capital platform for SMBs reported its Q3 earnings (Q1 by its earnings calendar) on Thursday (Nov. 7) showing strong year-over-year growth and clocking a share price increase during the week from 58.35 on Monday to 72.50 by the bell on Thursday. By the numbers, the company reported strong Q1 fiscal year 2025 results with total revenue up 18% year-over-year to $358.5 million and core revenue up 19% to $314.9 million. The company saw a 14% increase in total payment volume to $80 billion and a 16% rise in transactions processed to 29 million. Wall Street liked what it heard from the company’s executives on the earnings call, with CEO Rene Lacerte attributing the growth to a vibrant SMB community and product expansions including new invoicing products.
“Beyond funding and payment capabilities, we are scaling our working capital solutions, solving one of the biggest pain points for SMBs,” Lacerte said. “With our invoice financing offering, suppliers are getting paid weeks in advance of when they would typically get paid. We have proven product market fit and are seeing recurring usage with 70% of borrowers being repeat users at Invoice Financing. We have a long history of leveraging our proprietary data and AI to enhance our platform and offerings such as automated bill entry, payment acceleration and network matching. As part of our priorities to continue to simplify and enhance our platform experience, we are applying AI to more use cases to further simplify and personalize the user experience on our platform for SMBs.”
And after name-checking PYMNTS Intelligence data that shows only 5% of larger SMBs adopting automated payment processes, Lacerte said BILL projects Q2 FY25 total revenue between $355.5 and $360.5 million, representing 12-13% year-over-year growth. Core revenue is expected to be between $316.0 and $321.0 million, reflecting 15-17% growth. The company also anticipates non-GAAP operating income between $47.5 and $52.5 million and non-GAAP net income per diluted share between $0.44 and $0.48.
Payoneer was another SMB-focused top performer for the week, heading from $10.28 at the week’s open to $10.76 by Thursday’s close. Its earnings announcement on Nov. 5 featured record quarterly volume up 25% year over year driven by a 57% increase in B2B volume. The cross-border payments specialist also achieved record quarterly revenue and increased profitability year-over-year. This led Payoneer to raise its 2024 guidance, reflecting continued momentum across its business. Key highlights include a 24% year-over-year increase in revenue excluding interest income, reaching $183.1 million, and a 19% increase in adjusted EBITDA to $69.3 million. Active Ideal Customer Profiles (ICPs) grew 11% year-over-year.
“Payoneer is building on the significant momentum across our business with another record quarter of financial results,” said CFO Bea Ordonez. “We have delivered seven consecutive quarters of accelerating volume growth and in the third quarter accelerated revenue growth excluding interest income to 24%. We are increasing our 2024 guidance to reflect our strong third quarter performance as well as higher expectations for both growth and profitability for the final quarter of the year. We are executing on our strategic priorities.”
The flip side of the coin could be seen at Marqeta. The card issuing platform announced partnerships and new product launches during its Q3 earnings call on November 4th. Despite these announcements, the company’s stock price dropped by 32% due to missing analysts’ financial expectations. However, Marqeta’s CEO Simon Khalaf expressed optimism for future growth, citing the increasing demand for digital payments and the modernization of payment processing. He emphasized that the industry is still in its early stages and Marqeta has significant potential for expansion.
Marqeta started the week at a $5.82 share price and ended at $3.85.
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