Affirm partners with Worldpay from FIS
Affirm partners with Worldpay from FIS to bring BNPL products to Worldpay’s merchants, BILL sees strong upsell opportunities for Divvy, and nCino revenue decelerates on weaker demand from larger banks
Hi!
The Labor Department surprised everybody yesterday by reporting an increase in job openings in April (the job openings declined for the first three months of the year). A strong job market means that the Federal Reserve can continue raising rates, which the markets didn’t like (all major US indices finished the day in the red).
There were a few things happening in the Fintech world too:
Affirm announced a partnership with Worldpay from FIS,
BILL sees strong upsell opportunities for its expense management solution Divvy,
nCino revenue decelerated on weaker demand from larger banks
Thank you for reading and see you tomorrow!
Jevgenijs
Affirm Partners with Worldpay from FIS
Worldpay from FIS (NYSE: FIS), one of the world’s largest merchant acquirers, and Affirm (NASDAQ: AFRM), a leading Buy Now Pay Layer lender, have announced a multi-year partnership that will make Affirm’s pay-over-time solutions available to Worldpay’s merchants. Through the partnership, Worldpay merchants will be able to integrate Affirm's Adaptive Checkout into their platforms, offering customers flexible and transparent payment options.
The Adaptive Checkout system utilizes Affirm's decision engine to provide real-time underwriting decisions and optimized payment options, allowing customers to choose bi-weekly or monthly payments with low or 0% APR. Affirm's payment options do not include late fees or hidden charges. Last year, Affirm stroke a similar partnership with Stripe, making its Adaptive Checkout solution available to Stripe users in the US. Last month, Affirm and Stripe extended their partnership to Canada.
In February, FIS announced plans to spin off its merchant business, Worldpay, which it acquired in 2019. The merchant business provides payment processing services to merchants and retailers, and FIS had hoped to integrate it with its banking and wealth management offerings. However, the company now believes that spinning off the business will allow it to unlock greater value for shareholders. FIS will list the merchant business as a separate publicly traded company within a year.
✔️ Worldpay From FIS and Affirm Team up to Expand Pay-Over-Time Solutions
✔️ Worldpay and Affirm Team to Let Shoppers Buy Now, Pay Later
✔️ Affirm Third Fiscal Quarter 2023 Shareholder Letter
✔️ Affirm and Stripe Expand Partnership to Help Merchants in Canada
✔️ FIS Announces Plans to Spin Off Merchant Business
BILL Sees Strong Upsell Opportunities for Divvy
John Rettig, CFO of BILL (NYSE:BILL), speaking at the Jefferies Software Conference, called out the opportunities that the company sees in its expense management business Divvy, which BILL acquired in the summer of 2021. Divvy's solution provides businesses with better control and visibility over their corporate card spend. BILL acquired Divvy for $2.5 billion, paying approximately $625 million in cash and $1.875 billion in the company’s common stock.
The initial strategy after the acquisition was to maintain Divvy's market momentum and integrate Divvy and BILL technology stacks, allowing new prospects to access all solutions from a single platform. However, throughout 2023, the goal is to bring the platforms together and increase awareness and sales through a unified approach. The aim is to make the product visible and available to the majority of BILL's customer base, which currently does not have access to it.
Rettig estimates that around 50% or more of BILL's existing customer base could benefit from the spend and expense solution with the corporate card. Additionally, there are other solutions, such as expense reimbursement, expense reporting, and debit cards, that could be relevant to the entire customer base. The company is optimistic about the potential for cross-selling and expects the process to unfold over the next year.
✔️ BILL at Jefferies Software Conference
✔️ BILL Reports Third Quarter Fiscal Year 2023 Financial Results
✔️ Bill.com stock rallies 15% after earnings, outlook beat
nCino Revenue Growth Decelerates
nCino (NASDAQ: NCNO), a cloud-based digital banking solutions provider, reported its first quarter fiscal year 2024 results yesterday (the company’s fiscal year starts on February 1), topping its revenue and adjusted earnings guidance. Revenue increased 21% YoY to $113.7 million, down from a 51% YoY growth in the prior year. GAAP net loss was $11.2 million compared to a net loss of $30.7 million in the first quarter of fiscal 2023. The company reported a non-GAAP net income of $8.0 million compared to a non-GAAP net loss of $6.1 million a year ago.
Commenting on decelerating revenue growth, the company’s chief, Pierre Naude, said that the demand from the community banks has been “relatively unaffected by liquidity concerns”, but admitted weaker demand from regional banks, as well as lengthening sales cycles in the company’s enterprise segment, which is defined as institutions with $100+ billion in assets. The company is also experiencing an elevated churn amongst its existing clients driven by the “M&A activity, independent mortgage banks downsizing or going out of business, and the expiration of PPP agreements”, which it expects to continue into the second fiscal quarter.
The company’s management guided for $114.0 million to $115.5 million in revenue in the second fiscal quarter and $474.0 million to $478.5 million for the full fiscal year, representing a 24% YoY growth compared to the fiscal year 2023. Analysts estimate fiscal 2024 revenue to be $479 million, or slightly above the company’s guidance. The company expects a non-GAAP net income per share of $0.37 to $0.40 for its fiscal year 2024, which compares to a non-GAAP net loss of $0.07 per diluted share in fiscal 2023. The stock declined 12.44% in after-hours trading.
✔️ nCino Reports First Quarter Fiscal Year 2024 Financial Results
SoFi (NASDAQ: SOFI) continued its run yesterday advancing 15.09%. As I wrote earlier, the US debt-ceiling deal incorporates an earlier restart of student loan repayments, which have been paused since the early days of the COVID-19 pandemic. Student debt refinancing was the bread and butter of the Fintech lender prior to the moratorium. Thus, SoFi originated $0.53 billion in student loans in the first quarter of 2023, compared to its peak originations of $2.44 billion in the fourth quarter of 2019. The stock is up 33.98% in the last five trading days.
@ Affirm
Remote, United States
Director, Software Engineering
@ AffirmRemote, United States
@ nCino
Melbourne, Victoria, Australia
Principal Product Designer, Platform
@ BILLSan Jose, CA, United States
Principal Product Manager, Platform
@ BILLSan Jose, CA, United States
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