• Profitability declined due to holiday-season increase in defaults and investments in Carrington Labs and personal lending
• Advances reached $240m, up 17% YoY driven by 18% increase in average advance size
• Revenue increased 18% YoY to $12.0m, with NTM up 22% YoY to $5.9m

Beforepay Group Limited (ASX: B4P) has released its Q2 FY26 Quarterly Activities and Appendix 4C Cash Flow Report. The company had a Net Profit Before Tax (NPBT) of $0.3m, compared to $3.4m in the previous quarter, due to the usual holiday-season increase in defaults as well as investments in Carrington Labs and personal lending. Quarterly advances reached $240m, up 17% on Q2 FY25, driven by an 18% increase in the average advance size to $470. Revenue increased to $12.0m, up 18% YoY, underpinned by higher advance volume and larger advance sizes. Net transaction margin (NTM) increased to $5.9m in the quarter, up 22% YoY from $4.8m in Q2 FY25, driven by higher advances. Operating expenses increased by 11% to $5.2m, driven by continued investments in Carrington Labs and the personal-loan product, as well as increased marketing spend. Active users increased 0.1% QoQ to 276,606, with the average customer acquisition cost (CAC) in the quarter at $53. The company maintained a strong balance sheet with an equity balance of $43.9m and Total Cash of $17.5m as at Q2 FY26. The company announced new Carrington Labs clients and continued personal-loan growth.

The company expects margins to normalise as defaults decline following the holiday increase. Q3 FY26 trading to date has been in line with expectations.