Funding Circle Holdings Plc · LSE:FCH
Funding Circle — H1 2025 Earnings Presentation
34 slides from Funding Circle's earnings presentation, Sep 4, 2025
Slide 1: Half Year 2025 results
Half Year 2025 results 4 September 2025 Powderhall Bronze 1
Slide 2: Leading UK online SME finance platform
Leading UK online SME finance platform backing small businesses to win £16bn credit extended to SMEs since 2010 Pay later Monthly Borrow Longer term 110,000 small businesses funded since 2010 87,000 Spend Daily jobs supported in 2024 £7.2bn GDP contribution in 2024 2
Slide 3: Performance and Strategy update
Performance and Strategy update 3
Slide 4: Strong profit growth and strategic progress in H1
Strong profit growth and strategic progress in H1 £1.1bn Credit extended Strong H1; consistent revenue growth and accelerating profitability 21% H1 24 ● 21% growth in credit extended to £1.1bn £92.3m ● 17% growth in revenue to £92.3m, with FlexiPay revenue growth of 119% ● £6.0m PBT (£0.5m H1 24),
Slide 5: Market and Business review
Market and Business review 5
Slide 6: Multi-product strategy driving growth and loyalty
Multi-product strategy driving growth and loyalty Pay later Increased frequency of customer transactions FlexiPay Line of Credit 30 mins Borrow Term Loan 92 secs 44 secs 2021 2024 2025 Deeper engagement with Attracting existing customers new customers 70% 70% Spend of FlexiPay revenue from of card
Slide 7: Underpinned by data and technology to deliver a superior customer experience
Underpinned by data and technology to deliver a superior customer experience 6 min 75% 81 3x Application time Instant decisions Customer NPS Better risk discrimination than bureau score Powering growth in H1 Expanded opportunity by unlocking new customer segments through proprietary data and credit
Slide 8: Resilient business performance against a challenging macroeconomic backdrop
Resilient business performance against a challenging macroeconomic backdrop Robust and attractive returns 5% Above cost of capital Flat GDP and consumer confidence Insolvencies above historic trend 102 95 6,335 Strong investor pipeline 3,927 £1.8bn In future funding commitments Growing demand 20% Y
Slide 9: Borrow: Term Loans momentum continues
Borrow: Term Loans momentum continues Large addressable market: £80bn+ SME debt origination market Improving profitability: Term Loans PBT margin of nearly 17% Continued innovation: Expanded and enhanced shorter term loan offering Expanded product set: through Marketplace partners £12.7m Term Loans
Slide 10: Pay Later & Spend: Strong growth
Pay Later & Spend: Strong growth Large addressable market: £80bn+ SME credit card transactions Strong growth: 119% revenue growth and attractive unit economics Continued innovation: Continuous feature improvements driving negative churn Distribution channel expansion £1bn+ transactions to date 10
Slide 11: FlexiPay: strong recurring revenue dynamics
FlexiPay: strong recurring revenue dynamics Strong growth Strong recurring end of month balances 66% Transaction growth FlexiPay end of month balances by half year cohort, £m 2x Outstanding balances 81 Recurring revenue 58 dynamics 80% Revenue from prior cohorts 11
Slide 12: Financial Performance
Financial Performance 12
Slide 13: Strong momentum in revenue, profit and PBT margins
Strong momentum in revenue, profit and PBT margins Group financial performance £m H1 25 H1 24 Change Business continues to deliver Total income 94.7 78.9 20% • Group revenue growth of 17%, with 11% driven by FlexiPay Fair value gains 2.0 2.8 29% • Operating costs remain controlled with growth of 4
Slide 14: Term Loans PBT margins growing to 17%
Term Loans PBT margins growing to 17% Revenue growing with operating leverage driving margin growth £m Originations Loans under Revenue Operating expenses PBT Management1 Commercial loans % Margins 61% 73% 83% 12.8% 13.8% 16.7% 6% Revenue growth from Operational leverage Ongoing growth driven by LuM
Slide 15: FlexiPay seeing strong recurring revenues
FlexiPay seeing strong recurring revenues Strong growth from FlexiPay & Cashback credit card in line with expectations £m Operating expenses Transactions End of month Revenue PBT and ECL1 balances Growth driven by both Strong top line growth with The profit profile is a j-curve. Operating expenses n
Slide 16: Rigorous focus on cost management
Rigorous focus on cost management Significant operating leverage & scalability: revenue up 17%, costs up only 4% Operating expenses (excl. ECL Operating expenses : revenue ratio £m % Marketing SBP 4% Other1 YoY 4% YoY Salaries Marketing costs remain at c.30% of revenue 1 Data and processing, IT,
Slide 17: Capital efficient model built for scale
Capital efficient model built for scale Using the right funding for the right product; strong investor demand Loans & balances under management Platform (off-balance sheet) funding for Term Loans business £m £2.6bn / 94% • £1.6bn in Forward Flow agreements from financial institutions • Attractive in
Slide 18: Term Loan business offers attractive returns
Term Loan business offers attractive returns Annualised net returns 5% above cost of capital, through the cycle Continuing demand Strength of credit models Stable, robust, attractive returns from institutions 3x £1.6bn Better risk Future funding discrimination than in place bureau score Annualised
Slide 19: FlexiPay and Cashback credit card efficient use of capital
FlexiPay and Cashback credit card efficient use of capital Capital cycles quickly (c.3m cycle); consistent credit performance Credit performance stable and in line with Funding capacity for Efficient capital usage expectations continuing growth Rolling 12-month transactions1 and balances £m Transact
Slide 20: Capital allocation framework
Capital allocation framework A disciplined approach to managing capital Deliver Capital required to deliver the medium-term plan with existing products growth strategy in MTP Invest Investment in products to drive opportunities, e.g. co-investment in government guarantee schemes to make platform str
Slide 21: Capital allocation in practice
Capital allocation in practice Unrestricted cash deployed in the period Future deployable cash £m £m Deliver Invest Distribute Share R&D buyback monetisation (remaining c. c.£11m Management £23m) Buffer¹ (c.£40m) • Deliver: Term Loans and FlexiPay collectively cash generative • Future deployable cas
Slide 22: Strong H1 performance and future outlook
Strong H1 25 performance and future outlook On track to deliver against FY25 market expectations and FY26 guidance H1 25 financial performance in line with our expectations Group Revenue Group PBT Costs excluding Term Loan PBT margin FlexiPay revenue Marketing & ECL £92.3m £6.0m £50.3m 16.7% £16.4m
Slide 23: Looking ahead
Looking ahead 23
Slide 24: Looking ahead
Looking ahead Strategic priorities focused on profitable, customer-led growth Get to Yes Expand our audience Scale our product offering Deliver a seamless end to end customer lifetime experience Carter and George
Slide 25: Concluding remarks
Concluding remarks ● Strong revenue growth and accelerating profitability ● Continued innovation and product expansion in large markets ● On track for medium term guidance with attractive growth and profit trajectory Anna Cake Couture 25 25 25
Slide 26: Q&A
Q&A Lisa Jacobs Tony Nicol CEO CFO 26
Slide 27: Thank you.
Thank you. Business Finance that backs you 27
Slide 28: Disclaimer
Disclaimer Information regarding forward-looking statements This Presentation includes forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the Groupʼs control and all of which are based on the Groupʼs current belief
Slide 29: Appendices
Appendices 29
Slide 30: Borrow, Pay later, Spend
Borrow Pay later Spend Term Loan FlexiPay line of credit Cashback credit card Loan for long term investment Flexible line of credit for paying bills, Cashback credit card for everyday purposes to support business growth supplier invoices and managing short term business spending or long term cashflo
Slide 31: Multi-product view
Multi-product view Borrow Pay later Spend Term Loan FlexiPay line of credit Cashback credit card Funding Circle loans Product type Government guaranteed loans Rolling line of credit Credit card with cash back Marketplace 3rd party loans) c.£17k credit limit c.£75k loan Average size & draw c.£3k dra
Slide 32: How we make money
How we make money Driver Typical yield % % of H1 25 Revenue Transaction fees Originations c.6.5% 52% Term Loans Operating: Servicing fees¹ LuM c.1.3%p.a 22% Drawdown fees / Transactions Variable 16% Operating: Credit card interest FlexiPay Interchange fees Transactions 1.75% 1% Cash balances & Bank
Slide 33: Illustrative – FlexiPay/Cashback credit card unit economics
Illustrative – FlexiPay/Cashback credit card unit economics • Upfront customer acquisition CPA reducing over time) • Upfront expected credit losses • Stable repeat usage • Payback period 1218 months • Wider portfolio benefits with high engagement and marketing efficiencies 33
Slide 34: Our models deliver 3x better risk discrimination than the bureau score
Our models deliver 3x better risk discrimination than the bureau score Default rates (by deciles) Risk Band Bureau Funding Circle (Delphi score) (Gen 9 model) • Compared to the UK bureau delphi Highest Risk scores, our Gen 9 model achieves 3 1 25.4% 31.3% times greater separation between lowest and
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