Funding Circle Holdings reported a fourfold increase in half-year profit before tax on September 8, yet its shares fell 8.7% to $210 from a previous close of $230, capping the lender at a market capitalization of $819 million.
Profit before tax for the first six months of 2026 rose to £24.1 million from £6.0 million a year earlier, while revenue climbed 50% to £138.2 million from £92.3 million. The company’s PBT margin expanded to 17.4% from 6.5% in the comparable period of 2025, after sitting at just 1% in H1 2024.
Credit extended reached £1.7 billion, up 52% year-over-year from £1.111 billion, with term loans accounting for 54% of the total and FlexiPay and credit card products making up 38%. Marketplace referrals represented the remaining 8%. Assets under management grew 15% to £3.3 billion, up from £2.829 billion in H1 2025.
Operating expenses rose 27% to £98.9 million, but as a share of revenue they fell from 84% to 72%. Expected credit losses, however, increased 81% to £15.2 million, reflecting higher delinquencies in the consumer lending segment.
The FlexiPay and credit cards business posted a £4.5 million loss before tax, an improvement from a £6.7 million loss a year earlier, with AEBITDA narrowing to a £1.8 million loss from £5.1 million. The segment saw credit extended surge 71% to £640 million and assets under management jump 78% to £300 million. Expected credit losses as a percentage of average assets under management rose to 11.1% in June 2026 from 10.6% a year prior, though the net annualized loss rate fluctuated between 7% and 8%.
Term loans remained the larger profit contributor, generating £28.6 million in PBT on £108.2 million in revenue and £37.0 million in AEBITDA. Assets under management in that segment reached £2.953 billion, representing 91% of total AuM.
Funding Circle upgraded its full-year 2026 guidance, raising revenue outlook to more than £255 million from approximately £235 million and increasing PBT guidance to more than £40 million from at least £35 million. The company maintained its medium-term target of £300–350 million in revenue with PBT margins in the low-to-mid 20% range by fiscal year 2029.
The lender said it has secured £2.4 billion in future funding commitments from institutional partners including Barclays, BNP Paribas, Citi, Deutsche Bank, and J.P. Morgan, financing 91% of off-balance-sheet assets under management. FlexiPay is backed by a £320 million facility plus £71 million in equity.
Unrestricted cash rose to £136 million in June from £101 million at year-end 2025, with deployable cash reaching £88 million. The company announced a new £25 million share buyback program, adding to £72 million repurchased since March 2024.
On the leadership front, CEO Lisa Jacobs announced plans to step down by the end of September 2027. The company highlighted that more than 90% of employees now use generative AI, contributing to a 20% improvement in revenue per employee compared with fiscal year 2025. Over 16 years since its founding in 2010, Funding Circle said it has extended more than £18 billion in credit to small and medium-sized enterprises, supported over 135,000 businesses, and contributed £7.9 billion to UK GDP in 2025.
