Beforepay Doubles Profit and Advances, Boosts AI Lending Partnerships

Strong Profit Growth Signals Momentum

Beforepay Group Limited (ASX – B4P) has delivered a standout start to FY26, reporting a net profit before tax (NPBT) of $3.4 million for the first quarter ended 30 September 2025. This result nearly doubles the $1.7 million profit recorded in the same quarter last year and marks a 137% increase over the prior quarter, underscoring the company’s accelerating momentum.

The surge in profitability reflects robust growth in the company’s core lending advances, which rose 19% year-on-year to $226.4 million. Notably, the average advance size increased by 15% to $446, indicating that customers are borrowing larger amounts through Beforepay’s platform.

Revenue and Margins Climb Amid Cost Discipline

Revenue for the quarter climbed 20% to $11.3 million, driven primarily by the higher volume and size of advances. The net transaction margin (NTM), a key profitability metric, also improved by 19% to $8.4 million, benefiting from both increased lending activity and sustained low default rates.

Despite the growth in business, operating expenses declined by 12% quarter-on-quarter to $4.6 million. This reduction reflects the company’s ongoing focus on cost control and a strategic pullback in marketing spend, which has helped improve overall operating leverage.

Strategic AI Partnerships Enhance Lending Platform

Beforepay’s enterprise arm, Carrington Labs, announced two new partnerships with AI-powered platforms DigiFi and TaranDM. These collaborations are designed to enhance Carrington Labs’ cash flow underwriting and risk analytics capabilities, enabling more streamlined and data-driven lending decisions for its clients.

The integration of advanced AI tools signals Beforepay’s commitment to leveraging technology to improve credit risk assessment and expand its market reach. This move could position the company favorably against competitors in the fintech lending space.

Personal Loans and Balance Sheet Strength

The company continues to scale its Personal Loans product, having issued 1,487 loans totaling nearly $4 million. Default rates on these loans remain in line with expectations, supporting the product’s viability as a growth avenue.

Financially, Beforepay maintains a solid balance sheet with equity of $43.1 million and total cash holdings of $19.2 million, including $14.1 million in cash-at-bank. The company also has access to a $55 million secured debt facility, with $30.9 million drawn and $24 million undrawn, providing ample liquidity to support ongoing operations and growth initiatives.

Outlook and Market Position

Trading in Q2 FY26 is reported to be in line with seasonal expectations, with the company shifting focus towards net transaction margin rather than active user counts. This reflects a more nuanced approach to measuring customer value and profitability over time.

Beforepay’s combination of strong financial results, disciplined cost management, and strategic technology partnerships suggests it is well-positioned to capitalize on the growing demand for flexible, ethical lending solutions in Australia’s fintech sector.