Earnings call transcript: Beforepay Q1 2026 profit jumps as lending grows

Beforepay Group reported a significant increase in profit and revenue for the first quarter of FY27, driven by higher loan volumes, a new pricing structure, and lower funding costs. The Australian fintech firm's Q1 revenue reached AUD 16.5 million, a 45% year-over-year increase, while cash profit rose by 58% to AUD 5.7 million. Net bad debts ratio, though higher at 1.41%, was attributed to higher average advance sizes and risk optimization efforts.

The company's total advances hit a record AUD 264.7 million, a 17% increase, with Pay Advance advances up 15% to AUD 257.7 million and Personal Loans advances soaring 269% to AUD 7 million. Cash at bank stood at AUD 6.4 million, giving a total cash position of AUD 13.6 million.

Beforepay's CEO, Jamie Twiss, described the quarter as "very strong" with growth across its core Pay Advance product and newer Personal Loans offering. The company's operating leverage was highlighted as the key driver of this growth. Management stated that the results were supported by a pricing change implemented last year, strong volume growth, and a new debt facility that lowered funding costs.

Despite the increase in net bad debts ratio, the company's financial health metrics, including a gross profit margin of 96% and return on equity of 19%, remained strong.

Investors reacted positively to the results, sending the stock up 5.77% to $1.38. Despite trading below its 52-week high of $2.77 and 52-week low of $1.18, the stock appeared undervalued with a price target of $2.04 set by analysts, representing potential upside of over 120%. The company's shares trade at a low P/E ratio of 13.4 and a PEG ratio of 0.52, indicating strong near-term earnings growth prospects.