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.”
| | H1 2025 | H1 2024 |
| | £m | £m |
| Credit extended | 1,111 | 918 |
| Loans/Balances under management | 2,829 | 2,858 |
| Revenue | 92.3 | 79.1 |
| Profit/(loss) before taxation (pre exceptional items) | 6.0 | 0.5 |
| Profit/(loss) before taxation (post exceptional items) | 6.0 | (2.1) |
| Unrestricted Cash | 115.0 | 164.4 |
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.
| | Originations and transactions (credit extended) | | Balances under management |
| | H1 2025 | H2 2024 | H1 2024 | | 30 June 2025 | 31 December 2024 | 30 June 2024 |
| | £m | £m | £m | | £m | £m | £m |
| Continuing operations | | | | | | | |
| Term Loans | 736 | 715 | 692 | | 2,660 | 2,714 | 2,777 |
| FlexiPay | 375 | 266 | 226 | | 169 | 119 | 81 |
| Total | 1,111 | 981 | 918 | | 2,829 | 2,833 | 2,858 |
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.
| | 30 June 2025 | | 30 June 2024[1] |
| | United Kingdom | | United Kingdom |
| | Term Loans | FlexiPay | | Total | | Term Loans | FlexiPay | Total |
| | £m | £m | | £m | | £m | £m | £m |
| Transaction fees | 47.8 | 0.5 | | 48.3 | | 41.8 | 0.3 | 42.1 |
| Servicing fees | 18.3 | — | | 18.3 | | 18.6 | — | 18.6 |
| Interest Income | 3.1 | 20.0 | | 23.1 | | 4.3 | 9.8 | 14.1 |
| Other fees | 2.3 | 0.1 | | 2.4 | | 2.5 | — | 2.5 |
| Operating income | 71.5 | 20.6 | | 92.1 | | 67.2 | 10.1 | 77.3 |
| Investment income | 2.6 | — | | 2.6 | | 1.6 | — | 1.6 |
| Total income | 74.1 | 20.6 | | 94.7 | | 68.8 | 10.1 | 78.9 |
| Fair value gains | 2.0 | — | | 2.0 | | 2.8 | — | 2.8 |
| Cost of funds | (0.2) | (4.2) | | (4.4) | | — | (2.6) | (2.6) |
| Net income (“revenue”) | 75.9 | 16.4 | | 92.3 | | 71.6 | 7.5 | 79.1 |
| | | | | | | | | |
| Adjusted EBITDA | 20.1 | (5.1) | | 15.0 | | 18.3 | (7.3) | 11.0 |
| Profit/(loss) before tax (pre exceptional items) | 12.7 | (6.7) | | 6.0 | | 9.2 | (8.7) | 0.5 |
| Profit/(loss) before tax (after exceptional items) | 12.7 | (6.7) | | 6.0 | | 6.9 | (9.0) | (2.1) |
Revenue increased by 17% to £92.3m (H1 2024: £79.1m). The Group made a profit before tax of £6.0m (H1 2024: profit before tax pre-exceptionals £0.5m). In H1 2024, £2.6m of exceptional items were incurred relating to the restructuring undertaken in the UK, mainly comprising redundancy costs. After exceptional items, the H1 2024 loss before tax was £2.1m. Term Loans Our Term Loans business continues to grow, with originations of £736m (H1 2024: £692m). Term Loans originations are funded through forward flow agreements with institutional investors (a “platform” model). The loans are owned by these institutional investors who take the credit risk and the LuM do not form part of Funding Circle’s balance sheet. As at 30 June 2025, we have c.£1.6bn of forward funding in place from these institutional investors for future originations. We continue to look at ways to provide access to finance for small businesses and in Q2 2025 we expanded our shorter-term loan proposition (loans with terms of 6-24 months). In the short term, whilst we test and iterate this product, we are funding it through our balance sheet in line with our capital allocation policy. It is funded through the same leveraged warehouse as FlexiPay. We expect to onboard an institutional investor to fund the product in the near future. LuM still includes the legacy covid scheme loans that are amortising down but now only account for 17% of the overall LuM with commercial LuM growing and now accounting for 83% (FY 2024: 27% and H1 2024: 39% of LuM were covid scheme loans). The legacy covid scheme LuM reduced by £300m in the first half with growth in LuM from new originations of c£250m leading to a LuM at June of £2.7bn. We have also continued to grow originations through our Marketplace network of third party finance providers, where we refer SMEs that require finance outside our product range or credit box, earning a referral fee. This allows us to support an even greater number of SMEs to access a wide range of financing options. Marketplace originations are c.10% of overall originations, consistent with the prior year. The Term Loans business delivered revenue of £75.9m, growing 6% on H1 2024. This growth came principally from the growth in originations and the corresponding transaction fees, with a yield of c.6.5% (H1 2024: 6.1%). The yield improvement is a function of the product mix with legacy loans originated under the government’s growth guarantee scheme (GGS) at lower yields. Term Loans generated profit before tax of £12.7m, up from £9.2m, pre-exceptionals, in H1 2024. After exceptional items, the comparative H1 2024 profit before tax was £6.9m. This profit improvement demonstrates the strong operational leverage we are achieving from this more mature business. FlexiPay and Cashback credit card (collectively “FlexiPay”) Our line of credit product, FlexiPay, has demonstrated significant growth to date and we continue to innovate in response to customer feedback. When the product was initially launched, customers were able to draw and repay within a 3-month period. During 2024 we expanded repayment options to include 1, 3, 6, 9 and 12 months, with fees varying depending on payback period. As a result, the average fee for each drawdown grew to 7.0% (H1 2024: 5.0%), reflecting a longer average term of 4.7 months. In H2 2024 we launched our Cashback credit card and we continue to experience good uptake from customers. When customers transact using cards, we earn an interchange fee of 1.75% alongside interest on any revolving balances. The product offers customers a 2% cashback in the first six months followed by 1% thereafter. Overall FlexiPay and Cashback credit card transactions increased by 66% from H1 2024, reaching £375m (H1 2024: £226m), demonstrating strong customer engagement as we added new customers and released new features. Drawn lines of credit (“balances”) grew to £169m at 30 June 2025 (31 December 2024: £119m), in line with transaction growth. FlexiPay transactions have now surpassed £1bn since launch. FlexiPay and the Cashback credit card are funded by Funding Circle capital and a senior debt facility. The interest payable on this facility is shown in “cost of funds” and is based on SONIA plus a margin. A £230m facility was renewed in April 2025 with the ability to upsize further. We fund these products through our balance sheet as this is an efficient use of capital with the capital cycling quickly. Revenue for FlexiPay was £16.4m in H1 2025, increasing from £7.5m in H1 2024 as a result of a rise in the number of transactions and fee growth. Loss before tax pre-exceptionals was £6.7m (H1 2024: loss of £8.7m). Marketing costs and expected credit losses which are recognised upfront give rise to a “j-curve” to achieve profitability i.e. once a customer is onboarded and those costs are incurred, due to the repeat nature of these products, we expect to earn repeat revenues. Over 80% of the H1 2025 revenues came from customers onboarded pre-2025. Profit and loss
| | 30 June 2025 | 30 June 2024 Before exceptional items | Exceptional items | 30 June 2024 |
| | £m | £m | £m | £m |
| Transaction fees | 48.3 | 42.1 | — | 42.1 |
| Servicing fees | 18.3 | 18.6 | — | 18.6 |
| Interest income | 23.1 | 14.1 | — | 14.1 |
| Other fees | 2.4 | 2.5 | — | 2.5 |
| Operating income | 92.1 | 77.3 | — | 77.3 |
| Investment income | 2.6 | 1.6 | — | 1.6 |
| Total income | 94.7 | 78.9 | — | 78.9 |
| Fair value gains | 2.0 | 2.8 | — | 2.8 |
| Cost of funds | (4.4) | (2.6) | — | (2.6) |
| Net income (“revenue”) | 92.3 | 79.1 | — | 79.1 |
| | | | | |
| Expected credit loss charge | (8.4) | (3.8) | — | (3.8) |
| | | | | |
| People costs | (32.7) | (36.1) | (2.3) | (38.4) |
| Marketing costs | (27.6) | (22.3) | — | (22.3) |
| Depreciation, amortisation and impairment | (6.1) | (6.5) | (0.3) | (6.8) |
| Other costs | (11.5) | (9.9) | — | (9.9) |
| Operating expenses | (77.9) | (74.8) | (2.6) | (77.4) |
| | | | | |
| Profit before tax from continuing operations | 6.0 | 0.5 | (2.6) | (2.1) |
| Loss for the period from discontinued operations | — | (10.2) | — | (10.2) |
Operating income includes transaction fees, servicing fees, interest income from loans held at amortised cost, interest on cash balances and other fees and was £92.1m (H1 2024: £77.3m). Transaction fees, representing fees earned on originations, increased to £48.3m (H1 2024: £42.1m), driven by growth in originations as the business continued to expand its Term Loans offering to more segments of the market, and attract more applications from SMEs. Average transaction fee yields increased in the Term Loans business to 6.5% (H1 2024: 6.1%) due to product mix. Servicing fees, representing income for servicing LuM, were £18.3m (H1 2024: £18.6m). The fees move in line with the quantum of LuM, which decreased in the Term Loans business as growth in LuM from new lending was offset by continued repayment on the legacy Covid-19 scheme loans. Servicing yields remain similar to H1 2024 levels at c.1.3%. Servicing fees are not charged on FlexiPay lines of credit. Interest income represents the fees earned on FlexiPay lines of credit and interest earned on cash and cash equivalents: FlexiPay interest income is the fee charged on transactions and spread over a number of months, in line with borrower repayments. It has increased to £19.3m (H1 2024: £9.3m), driven by transaction levels and the average fees on transactions which were 7.0% in the year (H1 2024: 5.0%). Interest earned on cash and cash equivalents was £3.7m (H1 2024: £4.6m). This interest applies to the Group’s unrestricted cash as well as restricted cash drawn from the Citibank facility in anticipation of future FlexiPay and Cashback credit card transactions. Other fees arose principally from collection fees we recovered on defaulted loans or fees for the successful facilitation of transactions on behalf of investors. Investment income represents the investment income, less investment expense, on loans held on balance sheet at fair value. It increased to £2.6m (H1 2024: £1.6m), driven by the expansion of our shorter-term lending offering. Revenue, defined as total income after fair value adjustments and cost of funds, was £92.3m (H1 2024: £79.1m) growth of 17%. Expected credit losses These principally relate to the IFRS 9 charge for FlexiPay where we account for actual and future expected credit losses from SMEs defaulting on their lines of credit. We would expect this charge to continue to increase as FlexiPay and Cashback credit card grow. Actual loss rates during the period remained consistent with the prior year. Operating expenses At an overall level, operating expenses increased by 4% compared with H1 2024. The primary drivers of cost growth were the variable expenses associated with marketing. Marketing costs increased by 24% to £27.6m. Costs continue to be actively and tightly managed. Excluding the variable marketing costs, operating costs were d
