The fortunes of pay-in-advance fintech Beforepay appeared to shift on Thursday, after a new report contrasted losses against rapid customer growth and a significant reduction in debt write-offs.
Beforepay, launched in 2019, takes cues from the buy now, pay later sector with its spin on payday advances.
The Australian fintech offers users a short-term advance on their pay, generally up to $200, before automatically deducting those payments - plus a 5% service fee - when those users are paid.
The company made headlines in January when its shares tumbled some 42% in the hours after its ASX debut, driven by investor concerns over customer default rates and broader market unease afflicting tech stocks.
Nevertheless, Beforepay's active customer base grew to more than 158,000 in the March 2022 quarter, the company said Thursday, representing a 14% growth from the December quarter and a doubling from March 2021 levels.
Perhaps more significant for the fintech is the improvement of its net transaction margin, which sat at $1.05 million in March 2022, compared to a loss of $750,000 in the prior corresponding period.
Driving that turnaround was a drop in net transaction loss - that is, expected and actual credit losses as a percentage of Beforepay advances and fees.
Net transaction losses sat at 2.2% in March 2022, Beforepay said, down from 3.1% the previous quarter and 5.3% in March 2021.
Marketing costs more than doubled over the year to $6.4 million in the March quarter, but the company maintained it is on a positive trajectory.
"Continued momentum in user growth, revenue uplift, and strengthening margins represent another step forward on our path to profitability," CEO Jamie Twiss said in a statement.
