Funding Circle Holdings plc: Half Year 2025 Results

Funding Circle Holdings plc

Half Year 2025 Results

STRATEGIC PROGRESS DRIVING STRONG, PROFITABLE GROWTH

ON TRACK TO DELIVER MEDIUM TERM GUIDANCE

Funding Circle Holdings plc (“Funding Circle” or the “Group”) today announces results for the six months ended 30 June 2025.

Lisa Jacobs, Funding Circle CEO, commented:

“The first half of 2025 demonstrates the clear success of our strategy and execution, delivering another period of strong, profitable growth as we extended £1.1 billion in credit to UK businesses across our product suite. We achieved 17% revenue growth to £92.3 million and a significant increase in PBT to £6.0 million.

Our Term Loans business delivered £12.7 million in PBT, driven by product innovation and continued operating leverage. Our FlexiPay and Cashback credit card products continue to scale rapidly, as we meet more of our customers’ needs with well loved products. FlexiPay transactions were up 66% year-on-year with cumulative transactions now exceeding £1 billion since launch as businesses choose Funding Circle to borrow, pay later and spend.

Our performance is underpinned by our great customer experience, powered by our proprietary data, technology and AI powered credit models. We are leveraging these strengths to deliver operating leverage in our Term Loans business whilst continuing to grow our newer cashflow products. Today, we continue to fulfil our mission of backing small businesses as a more meaningful part of our customers’ lives, serving more of their needs, interacting with them more frequently and capturing a larger share of their financing. This gives us a clear platform for further growth.

We remain on track to achieve our medium-term guidance of at least £200 million in revenue and at least £30 million in PBT in FY 2026 and are continuing our share buyback programme.”

Financial Summary:

• Credit extended grew 21% to £1,111m (H1 2024: £918m):
  • Continued momentum in Term Loans originations, up 6% to £736m (H1 2024: £692m).
  • Strong growth in FlexiPay and Cashback credit card transactions (collectively “FlexiPay”), increasing 66% to £375m (H1 2024: £226m).
• Loans/Balances under management (“LuM”) were broadly flat at £2,829m (FY 2024: £2,833m; H1 2024: £2,858m) and the credit performance in both Term Loans and FlexiPay remains in line with expectations:
  • Term Loans LuM of £2,660m ( FY 2024: £2,714m; H1 2024: £2,777m) reflects the repayment of legacy Covid government-guaranteed loans.
  • FlexiPay balances, which drive FlexiPay’s revenue, increased 42% to £169m (FY 2024: £119m; H1 2024: £81m). 
• Revenue was £92.3m, up 17% (H1 2024: £79.1m) with a healthy contribution from both Term Loans and FlexiPay.
• Strong profit growth, with profit before tax (“PBT”) of £6.0m (H1 2024: £0.5m pre-exceptionals):
  • Term Loans increased profitability with PBT of £12.7m (H1 2024: £9.2m pre-exceptionals) reflecting our ongoing operating leverage.
  • FlexiPay loss before tax pre-exceptionals narrowed to £6.7m (H1 2024: £8.7m loss) as the product continues to scale.
• Unrestricted cash remained healthy at £115.0m (FY 2024: £150.5m), with the decrease due to the share buyback programmes in the period, planned investment in FlexiPay and R&D in a new shorter term lending product, in line with our capital allocation strategy.
• As at 30 June 2025, we have spent £53m purchasing and cancelling 50m shares out of the total £75m announced since March 2024; £19m was spent in H1 2025 purchasing and cancelling 16.7m shares. The share buyback programme is continuing.
   

Operational & Strategic Summary:

• Leading UK online SME finance platform, with a simple and profitable business model.

• Continued growth and innovation across our product suite:

Term Loans:

• Origination growth of 6% with PBT margins increasing from 13% to 17%, driven by product innovation and operating leverage.
• Grew breadth of Marketplace product set, monetising our distribution strength, and allowing us to serve more customers’ needs by extending credit to businesses via our partners.
• Expansion of our shorter term lending proposition.

FlexiPay and Cashback credit card:

• Continued strong growth from both new and existing customers. The repeat nature of the product has resulted in over 80% of 2025 revenue coming from existing customers. Transactions grew 66% since H1 2024 and closing balances grew 42% to £169m since FY 2024.
• Since the soft launch of Cashback credit card in H2 2024, continued steady uptake in users and borrower usage exceeding expectations.
• Collectively transactions from these products have surpassed £1bn since launch.

• Robust and attractive returns through the cycle leading to strong ongoing investor demand:
  • Annualised net returns to institutional investors on Term Loans consistently ~5% above cost of capital.
  • Forward lending commitments of £1.8bn across products with strong future pipeline.

Looking Ahead:

• Our strategic priorities are focused on customer-led profitable growth:
  • Get to yes: get the right product to the right business, through credit excellence and product improvements.
  • Expand our audience: target new segments; deepen and expand our distribution channels.
  • Scale our products: capitalise on the large market opportunity by focusing on refining and scaling our products to drive growth and margin expansion.
  • Build a seamless lifetime customer experience: deliver an exceptional experience throughout our customers’ lifetime journey with our expanded product set, as their trusted financial partner.

We have attractive growth opportunities and are on track to deliver our medium term guidance in 2026 of 15-20% revenue CAGR from FY23 and PBT margins of >15%, equating to:

• Revenue of at least £200m
• Profit before tax of at least £30m

Board Changes:

The Company noted in the FY 2024 Annual Report and Accounts that there would be some upcoming changes in Board composition in respect of some of its long-tenured Directors.

In May 2025, Andrew Learoyd, the Chairman stepped down with Ken Stannard appointed as the new Chairman. We thank Andrew for his tireless commitment and steering of the Group since its very early days.

In June 2025, Geeta Gopalan, the Chair of the Audit & Risk Committee and Senior Independent Director stepped down and we want to thank her for her hard work and dedication to Funding Circle over a number of years.  Helen Beck, the Chair of the Remuneration Committee has been appointed as Senior Independent Director.

In June 2025, Maeve Byrne was appointed as chair of the Audit Committee and, in August 2025, Richard Harvey was appointed chair of the Risk Committee. We welcome them both to the Board.

Analyst presentation:

Management will host a presentation and conference call for institutional investors and analysts at 9:30am UK time (BST) on Thursday 4 September 2025.

To watch and listen to the webcast, with the opportunity to submit written questions, please use this link to register and gain access to the event.

For conference call access, please dial +44 33 0551 0200 or +1 786 697 3501. Quote ‘Funding Circle Half Year Results’ when prompted by the operator.

An on-demand replay and transcript will also be available on the Funding Circle website following the presentation.

For further details:

ir@fundingcircle.com

Funding Circle Holdings plc      

Lisa Jacobs, Chief Executive Officer     

Tony Nicol, Chief Financial Officer

Headland Consultancy

Stephen Malthouse and Jack Gault (+44 20 3805 4822)

Forward looking statements and other important information:

This document contains forward looking statements, which are statements that are not historical facts and that reflect Funding Circle’s beliefs and expectations with respect to future events and financial and operational performance. These forward looking statements involve known and unknown risks, uncertainties, assumptions, estimates and other factors, which may be beyond the control of Funding Circle and which may cause actual results or performance to differ materially from those expressed or implied from such forward looking statements.  Nothing contained within this document is or should be relied upon as a warranty, promise or representation, express or implied, as to the future performance of Funding Circle or its business. Any historical information contained in this statistical information is not indicative of future performance.

The information contained in this document is provided as of the dates shown.  Nothing in this document should be construed as legal, tax, investment, financial, or accounting advice, or solicitation for or an offer to invest in Funding Circle. 

About us:

Funding Circle is the UK’s leading SME finance platform. We operate in a large, attractive and growing market, with over £84bn of outstanding debt in the UK SME market and over £80bn of SME card transactions each year. Established in 2010, Funding Circle has extended c.£16bn in credit to over 110,000 businesses in the UK.

For SME borrowers, Funding Circle provides an unrivalled customer experience, delivered through its technology and data, coupled with a human touch. Its solutions continue to help customers access the funding they need to succeed. For institutional investors, Funding Circle provides access to an alternative asset class in an underserved market and delivers robust and attractive returns. 

We hosted a Capital Markets Event in June, details of which are available on Funding Circle’s corporate website:  https://corporate.fundingcircle.com/investors/results-reports-presentations/

Business review

Overview of the six months ended 30 June 2025

Building on our successful 2024, we are pleased to report that the Group continued to deliver strong revenue and profit growth in the first half of 2025.

The Group comprises two business units which are at different stages of maturity:

• Term Loans - our more established business unit comprising longer-term loans used by SMEs for investment and working capital needs; and
• FlexiPay and Cashback credit card (collectively “FlexiPay”) - shorter-term cashflow products used for daily and monthly spend meeting the shorter-term working capital needs of SMEs.

Overall, credit extended in the half grew to £1.1bn, up 21% from H1 2024, with balances under management at £2.8bn and credit performance in line with management expectations.