Half Year 2026 Funding Circle Holdings PLC Earnings Call

September 8, 2026

Speaker #1: Good morning, everyone, and thank you for joining us for our half-year 2026 results. I'll start today by touching on the highlights of our first-half performance before handing over to Tony to cover the financials in detail.

Lisa Jacobs: Good morning everyone, and thank you for joining us for our H1 2026 results. I will start today by touching on the highlights of our H1 performance before handing over to Tony to cover the financials in detail. I will wrap up by looking ahead at the exciting opportunity ahead of us and our confidence in our continued strong growth and profitability over the medium term. It has been another standout six months for Funding Circle. We have built on the momentum of last year with strong revenue and profit growth as we have backed a record number of small businesses. Demand remains strong. Our multi-product strategy is working. Today, we are a more important part of our customers' daily lives. We have continued to increase our share of wallet and attract more customers to Funding Circle.

Lisa Jacobs: Good morning everyone, and thank you for joining us for our half-year 2026 results. I will start today by touching on the highlights of our H1 performance before handing over to Tony to cover the financials in detail. I will wrap up by looking ahead at the exciting opportunity ahead of us and our confidence in our continued strong growth and profitability over the medium term. It has been another standout six months for Funding Circle. We have built on the momentum of last year with strong revenue and profit growth as we have backed a record number of small businesses. Demand remains strong. Our multi-product strategy is working. Today, we are a more important part of our customers' daily lives. We have continued to increase our share of wallet and attract more customers to Funding Circle.

Speaker #1: I'll wrap up by looking ahead at the exciting opportunity before us, and I have confidence in our continued strong growth and profitability over the medium term.

Speaker #1: It's been another standout six months for Funding Circle. We've built on the momentum of last year with strong revenue and profit growth, as we've backed a record number of small businesses.

Speaker #1: Demand remains strong, our multi-product strategy is working, and today we're a more important part of our customers' daily lives. We've continued to increase our share of wallet and attract more customers to Funding Circle.

Speaker #1: Our 16 years of proprietary data and technology create a competitive moat around the business, enabling a superior customer experience. And our capital-light platform is built for further scale.

Lisa Jacobs: Our 16 years of proprietary data and technology creates competitive moat around the business, enabling a superior customer experience. Our capital-light platform is built for further scale. Our performance in the first half means that today we are upgrading our 2026 guidance to revenue of more than GBP 255 million and PBT of more than GBP 40 million, representing a doubling of profit versus last year. We are also announcing a further buyback of up to GBP 25 million to commence following the conclusion of our current buyback. Since March 2024, we have bought back around GBP 72 million or 18% of the issued share capital. We remain very excited about the long-term opportunity ahead of us as we power even more SMEs throughout the UK. To put a bit more color behind the performance, here are the key numbers from H1.

Lisa Jacobs: Our 16 years of proprietary data and technology creates competitive moat around the business, enabling a superior customer experience. Our capital-light platform is built for further scale. Our performance in the H1 means that today we are upgrading our 2026 guidance to revenue of more than GBP 255 million and PBT of more than GBP 40 million, representing a doubling of profit versus last year. We are also announcing a further buyback of up to GBP 25 million to commence following the conclusion of our current buyback. Since March 2024, we have bought back around GBP 72 million or 18% of the issued share capital. We remain very excited about the long-term opportunity ahead of us as we power even more SMEs throughout the UK. To put a bit more color behind the performance, here are the key numbers from H1.

Speaker #1: Our performance in the first half means that today we're upgrading our 2026 guidance to revenue of more than $255 million, and PBT of more than $40 million.

Speaker #1: Representing a doubling of profit versus last year. We're also announcing a further buyback of up to $25 million, to commence following the conclusion of our current buyback.

Speaker #1: Since March 2024, we've bought back around $72 million, or 18% of the issued share capital. We remain very excited about the long-term opportunity ahead of us as we power even more SMEs throughout the UK.

Speaker #1: To put a bit more colour behind the performance, here are the key numbers from H1: 52% credit extended growth, 50% revenue growth, and PBT of $24 million—up four times on what we delivered in H1 25—and assets under management of $3.3 billion.

Lisa Jacobs: 52% credit extended growth, 50% revenue growth, and PBT of GBP 24 million, up four times on what we delivered in H1 2025, and assets under management of GBP 3.3 billion. This wouldn't be possible without our talented team of Circlers. Our high-performing, diverse, and inclusive culture is one that we are really proud of, and it was fantastic to be recognized by The Sunday Times as one of the UK's best places to work earlier this year. Thank you to the team who have worked hard to deliver such a great half for our customers and shareholders. We are proud of the performance that we delivered in the first half. At the start of 2024, I spoke about how our UK-focused multi-product strategy would drive growth and engagement. The numbers this half show that it is continuing to work whilst also delivering the foundations for future growth.

Lisa Jacobs: 52% credit extended growth, 50% revenue growth, and PBT of GBP 24 million, up 4x on what we delivered in H1 2025, and assets under management of GBP 3.3 billion. This wouldn't be possible without our talented team of Circlers. Our high-performing, diverse, and inclusive culture is one that we are really proud of, and it was fantastic to be recognized by The Sunday Times as one of the UK's best places to work earlier this year. Thank you to the team who have worked hard to deliver such a great half for our customers and shareholders. We are proud of the performance that we delivered in the H1. At the start of 2024, I spoke about how our UK-focused multi-product strategy would drive growth and engagement. The numbers this half show that it is continuing to work whilst also delivering the foundations for future growth.

Speaker #1: This wouldn't be possible without our talented team of Circlers. Our high-performing, diverse, and inclusive culture is one that we're really proud of, and it was fantastic to be recognised by The Sunday Times as one of the UK's best places to work earlier this year.

Speaker #1: Thank you to the team who’ve worked hard to deliver such a great half for our customers and shareholders. We’re proud of the performance that we delivered in the first half. At the start of 2024, I spoke about how our UK-focused multi-product strategy would drive growth and engagement.

Speaker #1: The numbers this half show that it's continuing to work, while also delivering the foundations for future growth. Our multi-product strategy means more frequent customer interactions, deeper relationships, and a greater share of wallet.

Lisa Jacobs: Our multi-product strategy means more frequent customer interactions, deeper relationships, and a greater share of wallet. To put that into context, today we have a customer transaction every 20 seconds, up from every 38 seconds at the end of last year, and every half an hour five years ago. About a third of our customers hold more than one product with us, enabling us to serve more of their needs. Five years ago, this number would have been zero as a single product Term Loans business, which shows how far we have come. We are also attracting new businesses to the Funding Circle ecosystem through our card product, where more than half of our customers are new to Funding Circle, giving us a chance to build long-term relationships with these customers as we become their financial partner.

Speaker #1: To put that into context, today we have a customer transaction every 20 seconds, up from every 38 seconds at the end of last year, and every half hour five years ago.

Speaker #1: About a third of our customers hold more than one product with us, enabling us to serve more of their needs. Five years ago, this number would have been zero as a single-product term lending business, which shows how far we've come.

Speaker #1: We're also attracting new businesses to the Funding Circle ecosystem through our card product, where more than half of our customers are new to Funding Circle.

Speaker #1: This gives us a chance to build long-term relationships with these customers as we become their financial partner. More products lead to more engagement, which gives us deeper insights and allows us to build even better products for our customers.

Lisa Jacobs: More products leads to more engagement, which gives us deeper insights and allows us to build even better products for our customers. That is how we are becoming the financial partner that more and more small businesses turn to first. I will come back to this, but first, I will hand over to Tony, who will talk to the financials in more detail.

Speaker #1: That's how we're becoming the financial partner that more and more small businesses turn to first. I'll come back to this, but first I'll hand over to Tony, who will talk to the financials in more detail.

Speaker #2: Thanks, Lisa, and good morning, everyone. As Lisa has just mentioned, we've had another strong six months. Since the first half of 2025, credit extended grew to $1.7 billion, up 52%.

Tony Nicol: Thanks, Lisa, and good morning, everyone. As Lisa has just mentioned, we have had another strong six months. Since H1 2025, credit extended grew to GBP 1.7 billion, up 52%. This drove revenue to GBP 138 million, up 50%, and profit before tax grew four-fold to GBP 24 million. Assets under management grew by 15% and are now at GBP 3.3 billion. Looking at the group P&L in a little more detail. Operating expenses were GBP 99 million, up 27%, while revenue grew to GBP 138 million, up 50%. Our top line is growing roughly twice as fast as costs. Expected credit losses relating to FlexiPay and the credit card rose to GBP 15 million, driven by the near 80% growth of their balances outstanding, with the credit quality in line with our expectations. I will talk about this in more detail later. Putting that together, profit before tax reached GBP 24 million.

Speaker #2: This drove revenue to $138 million, up 50%, and profit before tax grew fourfold to $24 million. Assets under management grew by 15% and are now at $3.3 billion.

Speaker #2: Looking at the Group P&L in a little more detail, operating expenses were $99 million, up 27%, while revenue grew to $138 million, up 50%.

Speaker #2: So, our top line is growing roughly twice as fast as costs. Expected credit losses relating to FlexiPay and the credit card rose to $15 million, driven by the near 80% growth of their balances outstanding.

Speaker #2: With the credit quality in line with our expectations—I'll talk about this in more detail later. Putting that together, profit before tax reached $24 million.

Tony Nicol: Putting that together, profit before tax reached GBP 24 million. The chart on the right shows that our operating expenses as a percentage of revenue have fallen steadily each half over the past two years. As a result, our profit before tax margin has increased from 1% to 17% in H1 2026, demonstrating the operating leverage of the platform. Turning to the business units and starting with Term Loans, it has been yet another strong performance. We grew both top and bottom line again, with continued improvement in profitability. Credit extended increased 43%, driven by continued product innovation, including the full six-month effect of the new shorter-term loan product we launched at the end of H1 last year, and strong Q1 demand, which has since normalized. Assets under management grew by 11%.

Speaker #2: The chart on the right shows that our operating expenses as a percentage of revenue have fallen steadily each half over the past two years.

Tony Nicol: The chart on the right shows that our operating expenses as a percentage of revenue have fallen steadily each half over the past two years. As a result, our profit before tax margin has increased from 1% to 17% in H1 2026, demonstrating the operating leverage of the platform. Turning to the business units and starting with Term Loans, it has been yet another strong performance. We grew both top and bottom line again, with continued improvement in profitability. Credit extended increased 43%, driven by continued product innovation, including the full six-month effect of the new shorter-term loan product we launched at the end of H1 last year, and strong Q1 demand, which has since normalized. Assets under management grew by 11%.

Speaker #2: As a result, our profit before tax margin has increased from 1% to 17% in the first half of 2026, demonstrating the operating leverage of the platform.

Speaker #2: Turning to the business units and starting with term loans, it has been yet another strong performance. We grew both the top and bottom line again, with continued improvement in profitability.

Speaker #2: Credit extended increased 43%, driven by continued product innovation, including the full six-month effect of the new shorter-term loan product we launched at the end of H1 last year.

Speaker #2: And strong first quarter demand, which has since normalised. Assets under management grew by 11%. That growth in credit extended fed straight through to revenue, which grew to $108 million, up 43%, driven by both transaction revenues and servicing fees.

Tony Nicol: That growth in credit extended fed straight through to revenue, which grew to GBP 108 million, up 43%, driven by both transaction revenues and servicing fees. We continue to maintain a strong cost discipline, with growth mainly driven by variable costs, including marketing. As a result, the Term Loans business has delivered a profit of GBP 29 million, and the PBT margin increased from nearly 17% this time last year to over 26%. Now to FlexiPay and the credit card. These newer products are continuing to show strong momentum. Transactions grew by 71% in the half, driven by repeat usage from existing customers, growth in new customers, the scaling of the credit card, and targeted increases to credit lines based on clear insight into customer behavior.

Speaker #2: We continue to maintain strong cost discipline, with growth mainly driven by variable costs, including marketing. As a result, the term loans business has delivered a profit of $29 million, and the PBT margin increased from nearly 17% this time last year to over 26%.

Speaker #2: Now, to FlexiPay and the credit card. These newer products are continuing to show strong momentum. Transactions grew by 71% in the half, driven by repeat usage from existing customers, growth in new customers, the scaling of the credit card, and targeted increases to credit lines based on clear insight into customer behaviour.

Speaker #2: I would consider these credit line increases as a bit of a catch-up for the whole portfolio, so I wouldn't expect quite this scale of growth each half going forward.

Tony Nicol: I would consider these credit line increases as a bit of a catch-up for the whole portfolio, so would not expect quite this scale of growth each half going forwards. Assets under management grew to GBP 300 million, up 78% year-on-year, which drives the growth in ECL. The transactions and assets under management growth drove revenue of GBP 30 million, up 83% from GBP 16 million a year ago. The P&L dynamics are different to Term Loans. We incur the upfront costs, marketing, and expected credit losses when we onboard new customers. Revenue follows as those customers draw down repeatedly. That is the J-curve we talk about. The ECL is higher this half as we have scaled the business, but that sets us up well to achieve profitability in the near term.

Speaker #2: Assets under management grew to $300 million, up 78% year on year, which drives the growth in ECL. The transactions and assets under management growth drove revenue of $30 million, up 83% from $16 million a year ago.

Speaker #2: The P&L dynamics are different to term loans. We incur the upfront costs—marketing and expected credit losses—when we onboard new customers. Revenue follows as those customers draw down repeatedly, so in a strong growth phase, profits come later.

Speaker #2: That's the jade curve we talk about. The ECL is higher this half as we've scaled the business, but that sets us up well to achieve profitability in the near term.

Speaker #2: There is a significant opportunity ahead of us, and so we continue to focus on investing now for future profitability. To give you an illustration of the scale it has reached, if we chose to stop growing FlexiPay and the card today—i.e., no new marketing—on an annualised basis, it would be profitable right now to the tune of around $10 million.

Tony Nicol: There is a significant opportunity ahead of us, so we continue to focus on investing now for future profitability. To give you an illustration of the scale it has reached, if we chose to stop growing FlexiPay on the card today, i.e., no new marketing, on an annualized basis it would be profitable right now to the tune of around GBP 10 million. As I will talk about later, it is now free cash flow breakeven, meaning it is self-sufficient before funding new lines of credit. This chart will be familiar to you, and it is a great way to see how the book is building. It shows the outstanding balances at the end of each half, with each color representing the cohort in which each business joined.

Speaker #2: And as I'll talk about later, it is now free cash flow break-even, meaning it is self-sufficient before funding new lines of credit. This chart will be familiar to you, and it's a great way to see how the book is building.

Speaker #2: It shows the outstanding balances at the end of each half, with each colour representing the cohort in which each business joined. What you can see is that once a business starts using FlexiPay or the credit card, it becomes an essential part of their regular cash flow management, and they keep using it.

Tony Nicol: What you can see is that once a business starts using FlexiPay or the credit card, it becomes an essential part of their regular cash flow management, and they keep using it. Every single cohort grew this half, driven by continued engagement and the targeted credit line increases I mentioned. 90% of revenue came from pre-2026 cohorts. That repeat behavior is predictable. It is what underpins the long-term growth and profitability of this product. Moving on to our cost base, the story here is scalability. Most of our cost growth came from variable costs, particularly marketing. We continue to spend around 30% of revenue on marketing, in line with what we said before. That is a mix of direct marketing, brand spend, and broker commissions, which we only pay when a loan is actually originated. Our other operating costs also carry a variable element.

Speaker #2: Every single cohort grew this half, driven by continued engagement and the targeted credit line increases I mentioned. Ninety percent of revenue came from pre-2026 cohorts.

Speaker #2: That repeat behaviour is predictable; it's what underpins the long-term growth and profitability of this product. Moving on to our cost base, the story here is scalability.

Speaker #2: Most of our cost growth came from variable costs, particularly marketing. We continue to spend around 30% of revenue on marketing, in line with what we said before.

Speaker #2: That's a mix of direct marketing, brand spend, and broker commissions, which we only pay when a loan is actually originated. Our other operating costs also carry a variable element.

Speaker #2: For example, volume-related roles and credit check costs that scale with lending. The remainder is more fixed in nature—approximately 80% fixed, moving in line with inflation, and 20% more variable.

Tony Nicol: For example, volume-related roles and credit check costs that scale with lending. The remainder is more fixed in nature, approximately 80% fixed, moving in line with inflation, and 20% more variable. It is worth a note on share-based payments and in particular, National Insurance. As I have mentioned before, we pay National Insurance when share awards are exercised, not when they are granted, and this is calculated on the share price at time of exercise. Our best estimate, therefore, is the current share price. As a rough guide, every ten pence increase in share price adds around GBP 300,000 in cost. With the share price where it is today compared with a couple of months ago, this means a higher charge in H2, which we will be absorbing. This is also a cost that goes up for the right reason, because we are delivering share price growth and creating more value for our shareholders.

Speaker #2: It's worth noting something about share-based payments, and in particular, National Insurance. As I've mentioned before, we pay National Insurance when share rewards are exercised, not when they're granted.

Speaker #2: And this is calculated on the share price at the time of exercise. Our best estimate, therefore, is the current share price. As a rough guide, every 10 pence increase in share price adds around $300,000 in cost.

Speaker #2: With the share price where it is today compared with a couple of months ago, this means a higher charge in H2, which we will be absorbing.

Speaker #2: This is also a cost that goes up for the right reason, because we're delivering share price growth and creating more value for our shareholders.

Tony Nicol: This is also a cost that goes up for the right reason, because we are delivering share price growth and creating more value for our shareholders. From an overall perspective, costs are up by 27% against a revenue increase of 50%, demonstrating the operating leverage we have with continuing margin improvement. As mentioned earlier, expected credit losses are one of the upfront costs we incur on FlexiPay and the credit card. IFRS 9 accounting requires us to book the future expected credit losses upfront. For performing loans, you look forward 12 months. For delinquent loans, you look at lifetime loss rates. The blended rate we book for ECL runs higher than the historic annualized loss rate.

Speaker #2: From an overall perspective, costs are up by 27%, against a revenue increase of 50%, demonstrating the operating leverage we have, with continuing margin improvement.

Tony Nicol: From an overall perspective, costs are up by 27% against a revenue increase of 50%, demonstrating the operating leverage we have with continuing margin improvement. As mentioned earlier, expected credit losses are one of the upfront costs we incur on FlexiPay and the credit card. IFRS 9 accounting requires us to book the future expected credit losses upfront. For performing loans, you look forward 12 months. For delinquent loans, you look at lifetime loss rates. The blended rate we book for ECL runs higher than the historic annualized loss rate. This means that the blended rate we booked for the ECL is around 11% on a last 12-month basis, and I would expect it to remain between 10% and 12% of the average balance outstanding. As balances have grown, the charge has grown with them. Importantly, our credit performance remains stable and the book is performing as we would expect.

Speaker #2: As mentioned earlier, expected credit losses are one of the upfront costs we incur on FlexiPay and the credit card. IFRS 9 accounting requires us to book the future expected credit losses upfront. For performing loans, you look forward 12 months; for delinquent loans, you look at lifetime loss rates.

Speaker #2: So the blended rate we book for ECL runs higher than the historic annualised loss rate. This means that the blended rate we booked for the ECL is around 11% on a last 12-month basis, and I'd expect it to remain between 10% and 12% of the average balance outstanding.

Tony Nicol: This means that the blended rate we booked for the ECL is around 11% on a last 12-month basis, and I would expect it to remain between 10% and 12% of the average balance outstanding. As balances have grown, the charge has grown with them. Importantly, our credit performance remains stable and the book is performing as we would expect. The chart on the right shows our historic net annualized loss rates, which remain around 7%. Funding Circle is a capital-light platform built for scale with a funding model that differentiates us and makes the business highly scalable. We have GBP 3.3 billion in assets under management across Term Loans, FlexiPay, and the credit card. Around 91% of that is Term Loans, all of which is funded by a diverse range of investors such as asset managers and banks.

Speaker #2: As balances have grown, the charges have grown with them. Importantly, our credit performance remains stable, and the book is performing as we'd expect. The chart on the right shows our historic net annualized loss rates, which remain around 7%.

Tony Nicol: The chart on the right shows our historic net annualized loss rates, which remain around 7%. Funding Circle is a capital-light platform built for scale with a funding model that differentiates us and makes the business highly scalable. We have GBP 3.3 billion in assets under management across Term Loans, FlexiPay, and the credit card. Around 91% of that is Term Loans, all of which is funded by a diverse range of investors such as asset managers and banks. The remaining funding, around 9%, for FlexiPay and the credit card, is funded through our renewed facility with Citi and our own balance sheet equity. Looking at the funding in more detail, on the Term Loan side, institutions fund and own the loans. We originate the loans and service them on their behalf while the credit risk sits with them.

Speaker #2: Funding Circle is a capital-light platform built for scale, with a funding model that differentiates us and makes the business highly scalable. We have $3.3 billion in assets under management across term loans, FlexiPay, and the credit card.

Speaker #2: Around 91% of that is term loans, all of which are funded by a diverse range of investors, such as asset managers and banks. The remaining funding, around 9% for FlexiPay and the credit card, is funded through our renewed facility with Citi and our own balance sheet equity.

Tony Nicol: The remaining funding, around 9%, for FlexiPay and the credit card, is funded through our renewed facility with Citi and our own balance sheet equity. Looking at the funding in more detail, on the Term Loan side, institutions fund and own the loans. We originate the loans and service them on their behalf while the credit risk sits with them. Investors like our product because it gives them access to a hard-to-reach asset class, and they can deploy funds at scale. Our credit models discriminate risk around three times better than the bureau scores. That lets us price risk more accurately into each loan, which allows us to deliver stable, attractive returns to the funders in line with their expectations. Appetite is strong and we see healthy competition for the loans from new and existing investors.

Speaker #2: Looking at the funding in more detail, on the term loan side, institutions fund and own the loans. We originate the loans and service them on their behalf, while the credit risk sits with them.

Speaker #2: Investors like our product because it gives them access to a hard-to-reach asset class, and they can deploy funds at scale. Our credit models discriminate risk around three times better than the bureau scores.

Tony Nicol: Investors like our product because it gives them access to a hard-to-reach asset class, and they can deploy funds at scale. Our credit models discriminate risk around three times better than the bureau scores. That lets us price risk more accurately into each loan, which allows us to deliver stable, attractive returns to the funders in line with their expectations. Appetite is strong and we see healthy competition for the loans from new and existing investors. Behind all of this is a disciplined funding framework. We adhere to strict principles to ensure our funding remains robust and sustainable. We aim to be as diversified as possible and ensure deals are signed throughout the year. On top of our GBP 3 billion of assets under management, we have around GBP 2.4 billion of forward flow arrangements in place for future originations.

Speaker #2: That lets us price risk more accurately into each loan, which allows us to deliver stable, attractive returns to the funders in line with their expectations.

Speaker #2: Appetite is strong, and we see healthy competition for the loans from new and existing investors. Behind all of this is a disciplined funding framework.

Tony Nicol: Behind all of this is a disciplined funding framework. We adhere to strict principles to ensure our funding remains robust and sustainable. We aim to be as diversified as possible and ensure deals are signed throughout the year. On top of our GBP 3 billion of assets under management, we have around GBP 2.4 billion of forward flow arrangements in place for future originations. For FlexiPay and the credit card, we fund this from our own equity together with a Citi facility. We see this as an efficient use of capital. The capital cycles quickly, on average around three times a year. With a payback period of 12 to 18 months, our mature cohorts are now cash generative. We renewed our facility with Citi in April this year at GBP 320 million, plus our own equity. Alongside this extra capacity, the renewal was on better terms and better pricing.

Speaker #2: We adhere to strict principles to ensure our funding remains robust and sustainable. We aim to be as diversified as possible and ensure deals are signed throughout the year.

Speaker #2: On top of our £3 billion of assets under management, we have around £2.4 billion of forward-flow arrangements in place for future originations. For FlexiPay and the credit card, we fund this from our own equity together with the Citi facility.

Tony Nicol: For FlexiPay and the credit card, we fund this from our own equity together with a Citi facility. We see this as an efficient use of capital. The capital cycles quickly, on average around three times a year. With a payback period of 12 to 18 months, our mature cohorts are now cash generative. We renewed our facility with Citi in April this year at GBP 320 million, plus our own equity. Alongside this extra capacity, the renewal was on better terms and better pricing. Moving on to cash. Our Term Loans business is highly cash generative. What is new this half is that FlexiPay itself has reached free cash flow breakeven, i.e., cash flow before funding investment growth. Free cash flow is what I look at to demonstrate whether the business units are self-sufficient at steady state.

Speaker #2: We see this as an efficient use of capital. The capital cycles quickly—on average, around three times a year. With a payback period of 12 to 18 months, our mature cohorts are now cash generative.

Speaker #2: We renewed our facility with Citi in April this year at $320 million, plus our own equity. Alongside this extra capacity, the renewal was on better terms and better pricing.

Speaker #2: Moving on to cash, our term loans business is highly cash generative. What's new this half is that FlexiPay itself has reached free cash flow break-even.

Tony Nicol: Moving on to cash. Our Term Loans business is highly cash generative. What is new this half is that FlexiPay itself has reached free cash flow breakeven, i.e., cash flow before funding investment growth. Free cash flow is what I look at to demonstrate whether the business units are self-sufficient at steady state. In the investing box, you can see the investment in FlexiPay lines of credit and monetization of loans. As previously discussed, we funded the shorter-term loan product we launched at the end of H1 2025 using our balance sheet while we tested and iterated it. As planned, we sold that portfolio in January this year, recouping our GBP 26 million investment with the product now funded through forward flow like the rest of our Term Loans business. The GBP 30 million on the chart also includes around GBP 4 million cash inflows from co-investments.

Speaker #2: I.e., cash flow before funding investment growth. Free cash flow is what I look at to demonstrate whether the business units are self-sufficient at steady state.

Speaker #2: In the investing box, you can see the investment in FlexiPay lines of credit and monetisation of loans. As previously discussed, we funded the shorter-term loan product we launched at the end of H1 2025 using our balance sheet while we tested and iterated it.

Tony Nicol: In the investing box, you can see the investment in FlexiPay lines of credit and monetization of loans. As previously discussed, we funded the shorter-term loan product we launched at the end of H1 2025 using our balance sheet while we tested and iterated it. As planned, we sold that portfolio in January this year, recouping our GBP 26 million investment with the product now funded through forward flow like the rest of our Term Loans business. The GBP 30 million on the chart also includes around GBP 4 million cash inflows from co-investments. Finally, on this slide, we have returned cash through the buyback program and funded employee benefit trusts for employee share awards. This brings me onto our capital allocation framework. The chart on the left-hand side shows our deployable cash. At the end of June, we had GBP 136 million of unrestricted cash.

Speaker #2: As planned, we've sold that portfolio in January this year, recouping our £26 million investment, with the product now funded through forward flow, like the rest of our term loans business.

Speaker #2: The 30 million on the chart also includes around 4 million of cash inflows from co-investments. And finally, on this slide, we've returned cash through the buyback program and funded employee benefit trusts for employee share rewards.

Tony Nicol: Finally, on this slide, we have returned cash through the buyback program and funded employee benefit trusts for employee share awards. This brings me onto our capital allocation framework. The chart on the left-hand side shows our deployable cash. At the end of June, we had GBP 136 million of unrestricted cash. We've deducted the remaining GBP 3 million still to go on our existing share buyback program. In total, with the earlier buyback programs, we will have bought back GBP 75 million, approximately 18% of our issued share capital. We also deduct our management buffer. We hold a buffer of around GBP 45 million for operational risk events. We're not regulated like a bank with regulatory capital, but we do hold a stress buffer for operational purposes.

Speaker #2: This brings me to our capital allocation framework. The chart on the left-hand side shows our deployable cash. At the end of June, we had $136 million of unrestricted cash.

Speaker #2: We've deducted the remaining $3 million still to go on our existing share buyback program. In total, with the earlier buyback programs, we will have bought back $75 million—approximately 18% of our issued share capital.

Tony Nicol: We've deducted the remaining GBP 3 million still to go on our existing share buyback program. In total, with the earlier buyback programs, we will have bought back GBP 75 million, approximately 18% of our issued share capital. We also deduct our management buffer. We hold a buffer of around GBP 45 million for operational risk events. We're not regulated like a bank with regulatory capital, but we do hold a stress buffer for operational purposes. That leaves us with GBP 88 million of deployable cash, which has grown from the GBP 76 million we reported at the end of last year. The deployable cash position is growing and is expected to continue to do so. We approach our deployable cash in a disciplined way and focus on four areas. First, delivering the medium-term plan. We're strongly cash generative, allowing us to self-fund growth. Second, investing where it makes the platform stronger.

Speaker #2: We also deduct our management buffer, where we hold a buffer of around $45 million for operational risk events. We're not regulated like a bank with regulatory capital, but we do hold a stress buffer for operational purposes.

Speaker #2: That leaves us with $88 million of deployable cash, which has grown from the $76 million we reported at the end of last year. So, the deployable cash position is growing, and I'd expect it to continue to do so.

Tony Nicol: That leaves us with GBP 88 million of deployable cash, which has grown from the GBP 76 million we reported at the end of last year. The deployable cash position is growing and is expected to continue to do so. We approach our deployable cash in a disciplined way and focus on four areas. First, delivering the medium-term plan. We're strongly cash generative, allowing us to self-fund growth. Second, investing where it makes the platform stronger. For example, co-investing alongside our funders in government-guaranteed schemes or funding the research and development of new products on our balance sheet before we onboard third-party funders. Third, future growth opportunities, whether organic or inorganic. Fourth, distributions to shareholders. On distributions more broadly, our approach is unchanged.

Speaker #2: We approach our deployable cash in a disciplined way and focus on four areas. First, delivering the medium-term plan. We are strongly cash generative, allowing us to self-fund growth.

Speaker #2: Second, investing where it makes the platform stronger—for example, co-investing alongside our funders in government-guaranteed schemes, or funding the research and development of new products on our balance sheet before we onboard third-party funders.

Tony Nicol: For example, co-investing alongside our funders in government-guaranteed schemes or funding the research and development of new products on our balance sheet before we onboard third-party funders. Third, future growth opportunities, whether organic or inorganic. Fourth, distributions to shareholders. On distributions more broadly, our approach is unchanged. We've been returning capital through buybacks, and today I'm pleased to announce that we will commence a further buyback of up to GBP 25 million once the current program finishes. We continue to consider other forms of distribution, including dividends, and it's a conversation we'll continue to have at a board level. Finally, guidance. With a strong H1, a particularly strong Q1, and a steady start to the H2, I'm pleased to announce an upgrade to our FY26 guidance.

Speaker #2: Third, future growth opportunities—whether organic or inorganic. And fourth, distributions to shareholders. On distributions more broadly, our approach is unchanged. We've been returning capital through buybacks, and today I'm pleased to announce that we will commence a further buyback of up to $25 million once the current program finishes.

Tony Nicol: We've been returning capital through buybacks, and today I'm pleased to announce that we will commence a further buyback of up to GBP 25 million once the current program finishes. We continue to consider other forms of distribution, including dividends, and it's a conversation we'll continue to have at a board level. Finally, guidance. With a strong H1, a particularly strong Q1, and a steady start to the H2, I'm pleased to announce an upgrade to our FY26 guidance. At this point, we now expect revenue will be greater than GBP 255 million and profit before tax will be greater than GBP 40 million.

Speaker #2: We continue to consider other forms of distribution, including dividends, and it's a conversation we'll continue to have at a board level. Finally, guidance: With a strong first half, a particularly strong first quarter, and a steady start to the second half, I'm pleased to announce an upgrade to our FY26 guidance.

Speaker #2: At this point, we now expect revenue will be greater than $255 million and profit before tax will be greater than $40 million. In terms of the medium term, we're just six months into our plan, but with the strong performance and on the basis of the current macroeconomic conditions, we are trending towards the upper end of our FY29 revenue guidance.

Tony Nicol: At this point, we now expect revenue will be greater than GBP 255 million and profit before tax will be greater than GBP 40 million. In terms of the medium term, we're just six months into our plan, but with the strong performance and on the basis of the current macroeconomic conditions, we are trending towards the upper end of our FY29 revenue guidance. We will provide a further update at the year-end. I'll now hand back to Lisa.

Tony Nicol: In terms of the medium term, we're just six months into our plan, but with the strong performance and on the basis of the current macroeconomic conditions, we are trending towards the upper end of our FY29 revenue guidance. We will provide a further update at the year-end. I'll now hand back to Lisa.

Speaker #2: We will provide a further update at the year end. I'll now hand back to Lisa.

Speaker #1: Thanks, Tani. Since funding circle launched 16 years ago, our mission has been to back small businesses with the finance that they need to win, whether that be the cash flow they need to operate, a capital injection for growth, or something else.

Lisa Jacobs: Thanks, Tony. Since Funding Circle launched 16 years ago, our mission has been to back small businesses with the finance that they need to win, whether that be the cash flow they need to operate, a capital injection for growth, or something else. We're proud that over that time, we've extended over GBP 18 billion in credit to over 135,000 small businesses up and down the country. When SMEs win, so too do communities and the broader economy. Lending through Funding Circle in 2025 supported GBP 7.9 billion in GDP and 117,000 jobs. We're proud of the impact that we have, but we know there's a lot more to come, and this is the part that excites us the most. We're operating in a very large and still very underserved market.

Speaker #1: We're proud that over that time we've extended over $18 billion in credit to more than 135,000 small businesses up and down the country. When SMEs win, so too do communities and the broader economy.

Speaker #1: Lending through Funding Circle in 2025 supported $7.9 billion in GDP and 117,000 jobs. We're proud of the impact that we have, but we know there's a lot more to come, and this is the part that excites us the most.

Speaker #1: We're operating in a very large and still very underserved market. Over $80 billion of SME lending is originated each year. There's another $80 billion in car transactions, and more than $1.3 trillion in business-to-business payments.

Lisa Jacobs: Over GBP 80 billion of SME lending is originated each year, with another GBP 80 billion in card transactions and more than GBP 1.3 trillion in business-to-business payments. Our market share remains small at less than 5% of the Term Loans market and less than 1% of the cards market, leaving a significant opportunity ahead to grow our market share and support more borrowers. We will continue to do this through our multi-product approach, which creates a powerful flywheel effect. As we build and offer more products, we bring more customers to Funding Circle. We get more data and insights on credit experience, on usage, and on customer behavior. This enables us to strengthen our risk models and develop new product features and propositions, such that we can attract more customers and serve them with better products and deliver a better customer experience for them as their trusted financial partner.

Speaker #1: Our market share remains small at less than 5% of the term loans market, and less than 1% of the cars market, leaving a significant opportunity ahead to grow our market share and support more borrowers.

Speaker #1: We'll continue to do this through our multi-product approach, which creates a powerful flywheel effect. As we build and offer more products, we bring more customers to Funding Circle.

Speaker #1: We get more data, and insights, on credit experience, on usage, and on customer behaviour. And this enables us to strengthen our risk models and develop new product features and propositions, such that we can attract more customers and serve them with better products, and deliver a better customer experience for them as their trusted financial partner.

Lisa Jacobs: This enables us to strengthen our risk models and develop new product features and propositions, such that we can attract more customers and serve them with better products and deliver a better customer experience for them as their trusted financial partner. Round the flywheel goes. A great example of this is shorter-term lending, where we saw increasing demand from SMEs for flexible, short-term working capital products. As you see in today's results, the product has gained traction since launch. Powering all of this and our competitive advantage is the combination of our proprietary technology and data, coupled with human expertise. We have 16 years of proprietary data, 10 billion data points, credit models now in their ninth generation. This is what powers our six-minute application for borrowers, with more than 75% of decisions made instantly.

Speaker #1: And so, round the flywheel goes. A great example of this is shorter-term lending, where we saw increasing demand from SMEs for flexible, short-term working capital products.

Lisa Jacobs: Round the flywheel goes. A great example of this is shorter-term lending, where we saw increasing demand from SMEs for flexible, short-term working capital products. As you see in today's results, the product has gained traction since launch. Powering all of this and our competitive advantage is the combination of our proprietary technology and data, coupled with human expertise. We have 16 years of proprietary data, 10 billion data points, credit models now in their ninth generation. This is what powers our six-minute application for borrowers, with more than 75% of decisions made instantly. Borrowers value the speed and ease of our tech platform so they can get back to doing what they do best, running their business.

Speaker #1: And as you see in today's results, the product has gained traction since launch. Pairing all of this with our competitive advantage is the combination of our proprietary technology and data, coupled with human expertise.

Speaker #1: We have 16 years of proprietary data, 10 billion data points, and credit models now on their ninth generation. This is what powers our six-minute application for borrowers, with more than 75% of decisions made instantly.

Speaker #1: Borrowers value the speed and ease of our tech platform, so they can get back to doing what they do best: running their business. Our models are three times better at differentiating risks than a standard bureau score, and this is an advantage we work hard to maintain and continue to invest in, as we evolve and improve our credit models.

Lisa Jacobs: Borrowers value the speed and ease of our tech platform so they can get back to doing what they do best, running their business. Our models are three times better at differentiating risks than a standard bureau score, and this is an advantage we work hard to maintain and continue to invest in as we evolve and improve our credit models. This means we can say yes to more businesses whilst delivering stable and attractive returns to our funding investors. It drives strong customer satisfaction scores from our borrowers and continued strong demand from institutional investors supporting our capital-light model. As I said at the start, we are continuing to invest in our data and technology to deliver new products and product features for our businesses. For example, in our Term Loans business, we have simplified the application journey and enhanced self-serve capability.

Lisa Jacobs: Our models are three times better at differentiating risks than a standard bureau score, and this is an advantage we work hard to maintain and continue to invest in as we evolve and improve our credit models. This means we can say yes to more businesses whilst delivering stable and attractive returns to our funding investors. It drives strong customer satisfaction scores from our borrowers and continued strong demand from institutional investors supporting our capital-light model. As I said at the start, we are continuing to invest in our data and technology to deliver new products and product features for our businesses. For example, in our Term Loans business, we have simplified the application journey and enhanced self-serve capability. We relaunched our mobile app for FlexiPay and card customers and launched company cards. We have launched a new broker portal and upgraded our borrower portal to make it easier to interact with Funding Circle.

Speaker #1: This means we can say yes to more businesses, while delivering stable and attractive returns to our funding investors. It drives strong customer satisfaction scores from our borrowers and continued strong demand from institutional investors, supporting our capital-light model.

Speaker #1: As I said at the start, we’re continuing to invest in our data and technology to deliver new products and product features for our businesses.

Speaker #1: For example, in our term loans business, we've simplified the application journey and enhanced self-serve capability. We relaunched our mobile app for FlexiPay and card customers, and launched company cards.

Lisa Jacobs: We relaunched our mobile app for FlexiPay and card customers and launched company cards. We have launched a new broker portal and upgraded our borrower portal to make it easier to interact with Funding Circle. This continued drumbeat of product innovation delivers more for our customers. Alongside this, as I have spoken about before, we are continuing to transform our business into an AI-native business. We believe that AI will be a significant lever over the medium term to improve our customer and Circler experience, deliver productivity improvements, and open up new opportunities. We see this as a business-wide transformation, and we are taking a two-pronged approach. Broad business fluency and empowerment paired with a set of targeted strategic initiatives.

Speaker #1: We've launched a new broker portal and upgraded our borrower portal to make it easier to interact with Funding Circle. This continued drumbeat of product innovation delivers more for our customers.

Lisa Jacobs: This continued drumbeat of product innovation delivers more for our customers. Alongside this, as I have spoken about before, we are continuing to transform our business into an AI-native business. We believe that AI will be a significant lever over the medium term to improve our customer and Circler experience, deliver productivity improvements, and open up new opportunities. We see this as a business-wide transformation, and we are taking a two-pronged approach. Broad business fluency and empowerment paired with a set of targeted strategic initiatives. In building broad business-wide AI fluency, we continue to invest in learning and development and enablement for all our teams. More than 90% of Circlers are frequently using AI in their job, building gems, projects, and agents to aid them in their work, saving time or upweighting their capability across a set of tasks.

Speaker #1: Alongside this, as I've spoken about before, we're continuing to transform our business into an AI-native business. We believe that AI will be a significant lever over the medium term to improve our customer and Circle experience, deliver productivity improvements, and open up new opportunities.

Speaker #1: We see this as a business-wide transformation, and we're taking a two-pronged approach: broad business fluency and empowerment, paired with a set of targeted strategic initiatives.

Speaker #1: In building broad, business-wide AI fluency, we continue to invest in learning and development, and enablement for all our teams. More than 90% of Circlers are frequently using AI in their job—building gems, projects, and agents to aid them in their work, saving time, or augmenting their capability across a set of tasks.

Lisa Jacobs: In building broad business-wide AI fluency, we continue to invest in learning and development and enablement for all our teams. More than 90% of Circlers are frequently using AI in their job, building gems, projects, and agents to aid them in their work, saving time or upweighting their capability across a set of tasks. One of the recent examples has been from our operations team, where we now have a data subject access request or DSAR agent. A process that used to take up to 2 days of manual work and a lot of back and forth between teams has now been reduced to minutes for our AI agent with a couple of hours of expert human review. Running alongside the business-wide approach, we're focusing attention and investment on a small set of strategic areas where we believe there are significant opportunities in product engineering, distribution and marketing, and operations.

Speaker #1: One of the recent examples has been from our operations team, where we now have a Data Subject Access Request, or DSAR agent. A process that used to take up to two days of manual work, and a lot of back-and-forth between teams, has now been reduced to minutes for our AI agent, with a couple of hours of expert human review.

Lisa Jacobs: One of the recent examples has been from our operations team, where we now have a data subject access request or DSAR agent. A process that used to take up to 2 days of manual work and a lot of back and forth between teams has now been reduced to minutes for our AI agent with a couple of hours of expert human review. Running alongside the business-wide approach, we're focusing attention and investment on a small set of strategic areas where we believe there are significant opportunities in product engineering, distribution and marketing, and operations. In product engineering, we're building an AI-native development process that's getting new products and features to market faster. Our AI-native engineering teams saw a more than 30% improvement in speed to market in Q2, and we believe this will continue to improve.

Speaker #1: Running alongside the business-wide approach, we're focusing attention and investment on a small set of strategic areas where we believe there are significant opportunities—in product engineering, distribution and marketing, and operations.

Speaker #1: In product engineering, we're building an AI-native development process that's getting new products and features to market faster. Our AI-native engineering team saw more than a 30% improvement in speed to market in Q2, and we believe this will continue to improve.

Lisa Jacobs: In product engineering, we're building an AI-native development process that's getting new products and features to market faster. Our AI-native engineering teams saw a more than 30% improvement in speed to market in Q2, and we believe this will continue to improve. Faster pace delivery means better and improved products for our customers, leading to upside in customer experience and further growth opportunities. In marketing and distribution, we're adjusting our approach to direct marketing as we expect more SMEs to find us via AI tools in the future. Another example is a trial we're running with a Magentic funding finder to support our marketplace team, helping them serve our customers faster.

Speaker #1: Faster-paced delivery means better and improved products for our customers, leading to an upside in customer experience and further growth opportunities. In marketing and distribution, we're adjusting our approach to direct marketing, as we expect more SMEs to find us via AI tools in the future.

Lisa Jacobs: Faster pace delivery means better and improved products for our customers, leading to upside in customer experience and further growth opportunities. In marketing and distribution, we're adjusting our approach to direct marketing as we expect more SMEs to find us via AI tools in the future. Another example is a trial we're running with a Magentic funding finder to support our marketplace team, helping them serve our customers faster. These developments, alongside broader business initiatives, are feeding into meaningful productivity gains with a 20% improvement in revenue per person compared with last year, and just as importantly, a better experience for the businesses we back. In conclusion, I'm really proud of what the team has achieved. It's been another standout 6 months for Funding Circle. We're delivering what we said we would. Strong growth, improving profitability, and real progress against our strategy.

Speaker #1: Another example is a trial we're running with an agentic funding finder to support our Marketplace team, helping them serve our customers faster. These developments, alongside broader business initiatives, are feeding into meaningful productivity gains, with a 20% improvement in revenue per person compared with last year, and, just as importantly, a better experience for the businesses we back.

Lisa Jacobs: These developments, alongside broader business initiatives, are feeding into meaningful productivity gains with a 20% improvement in revenue per person compared with last year, and just as importantly, a better experience for the businesses we back. In conclusion, I'm really proud of what the team has achieved. It's been another standout 6 months for Funding Circle. We're delivering what we said we would. Strong growth, improving profitability, and real progress against our strategy. We're well-positioned to continue to win in this market. With 16 years of proprietary data that cannot be replicated, 3 times better risk differentiation, a technology platform that allows for fast product development, an established brand, high customer satisfaction, and institutional investors that keep coming back. Our competitive advantages are deep, and we're confident they enable us to keep winning in the future.

Speaker #1: In conclusion, I'm really proud of what the team has achieved. It's been another standout six months for Funding Circle. We're delivering what we said we would: strong growth, improving profitability, and real progress against our strategy.

Speaker #1: We're well positioned to continue to win in this market, with 16 years of proprietary data that cannot be replicated, three times better risk differentiation, a technology platform that allows for fast product development, and an established brand, high customer satisfaction, and institutional investors that keep coming back.

Lisa Jacobs: We're well-positioned to continue to win in this market. With 16 years of proprietary data that cannot be replicated, 3 times better risk differentiation, a technology platform that allows for fast product development, an established brand, high customer satisfaction, and institutional investors that keep coming back. Our competitive advantages are deep, and we're confident they enable us to keep winning in the future. Looking ahead, there's a significant opportunity for growth within our current product set as we meet more customer needs and increasingly become the trusted financial partner that UK small businesses rely on. At the same time, we're building powerful insights into our customers with a perspective on their creditworthiness and standing as a business, which provides a strong platform for growth beyond our product set of today. Thank you.

Speaker #1: Our competitive advantages are deep, and we're confident they enable us to keep winning in the future. Looking ahead, there's a significant opportunity for growth within our current product set, as we meet more customer needs and increasingly become the trusted financial partner that UK small businesses rely on.

Lisa Jacobs: Looking ahead, there's a significant opportunity for growth within our current product set as we meet more customer needs and increasingly become the trusted financial partner that UK small businesses rely on. At the same time, we're building powerful insights into our customers with a perspective on their creditworthiness and standing as a business, which provides a strong platform for growth beyond our product set of today. Thank you.

Speaker #1: At the same time, we're building powerful insights into our customers, with a perspective on their creditworthiness and standing as a business, which provides a strong platform for growth beyond our current product set.

Speaker #1: Thank you.

Speaker #2: Just before we move to Q&A, I wanted to touch on this morning's announcement about my intention to step down as CEO by the end of September 2027.

Lisa Jacobs: Just before we move to Q&A, I wanted to touch on this morning's announcement about my intention to step down as CEO by the end of September 2027. I joined Funding Circle 14 years ago when the business was a startup built on a simple conviction that technology could transform how small businesses access finance. Since then, we've transformed the small business lending market, extending more than GBP 18 billion in credit to more than 135,000 small businesses. I'm incredibly proud of that. When I set out our multi-product transformation strategy back in 2024, I committed to a simpler, leaner, higher growth, more profitable business. Today, we've upgraded our full year 2026 guidance in a clear signal of our confidence. It means we're coming significantly ahead of what we originally set out to do in March 2024, and indeed, in March 2026.

Speaker #2: I joined Funding Circle 14 years ago, when the business was a startup built on a simple conviction that technology could transform how small businesses access finance.

Speaker #2: Since then, we've transformed the small business lending market, extending more than £18 billion in credit to over 135,000 small businesses. I'm incredibly proud of that.

Speaker #2: When I set out our multi-product transformation strategy back in 2024, I committed to a simpler, leaner, higher-growth, more profitable business. Today, we've upgraded our full-year 2026 guidance, in a clear signal of our confidence.

Speaker #2: It means we'll come in significantly ahead of what we originally set out to do in March 2024, and indeed in March 2026. Given the strength of the business performance, team, foundations, and our strong platform for future growth, now feels like the right time for me to start the process of handing over the reins.

Lisa Jacobs: Given the strength of the business performance, team, foundations, and our strong platform for future growth, now feels like the right time for me to start the process of handing over the reins. I want to ensure the board has time to find the best person to take the business forward, and I am committed to supporting a smooth transition. We will, of course, share more in due course, but for now, it is business as usual. I am committed to delivering our plan, and I look forward to seeing many of you on the roadshow. I will now hand over to Sergey to open up for Q&A.

Speaker #2: I want to ensure the board is timed to find the best person to take the business forward, and I'm committed to supporting a smooth transition.

Speaker #2: Well, of course, we'll share more in due course, but for now it's business as usual. I'm committed to delivering our plan, and I look forward to seeing many of you on the roadshow.

Speaker #2: I'll now hand over to Sergey to open up for Q&A.

Speaker #3: If you wish to ask a question over the phone, please signal by pressing star one. If you wish to cancel your request, please press star two.

Operator: If you wish to ask a question over the phone, please signal by pressing star 1. If you wish to cancel your request, please press star 2. You may also submit your questions via the webcast. Our first question is from Rob Noble on Deutsche Bank. Please go ahead.

Speaker #3: You may also submit your questions via the webcast. Our first question is from Rob Noble at Deutsche Bank. Please go ahead.

Speaker #4: Good morning, both. Thanks for taking my questions. Lisa, sorry to see you go. Just looking at the share price—obviously you've done a great job as CEO during your tenure.

Rob Noble: Morning, both. Thanks for taking my questions. Lisa, sorry to see you go. Just looking at the share price, you have obviously done a great job as CEO in your tenure. So looking forward, what sort of market share of SMEs do you think the business can get to in the long term? Your growth keeps beating expectations. Is there any supply side limit on the business, or is the FY29 guidance just looks like quite an easy hurdle as we sit here very early in your plan? And one for Tony. The bottom end of your revenue guidance implies quite a step down in H2. Can you give us an idea of how Q3 is actually going so far in comparison to Q2 or H1? Is there any hesitance you are seeing on the SMEs ahead of the budget?

Speaker #4: So, looking forward, what sort of market share of SMEs do you think the business can get to in the long term? And your growth keeps beating expectations.

Speaker #4: So, is there any supply-side limit on the business, or does the 2029 guide just look like quite an easy hurdle as we sit here very early in your plan?

Speaker #4: And one for Tony. So the bottom end of your revenue guidance implies quite a step down in H2. Can you give us an idea of how Q3 is actually going so far, in comparison to Q2 or H1?

Rob Noble: And one for Tony. The bottom end of your revenue guidance implies quite a step down in H2. Can you give us an idea of how Q3 is actually going so far in comparison to Q2 or H1? Is there any hesitance you are seeing on the SMEs ahead of the budget? Or any sign from the Government, indeed, that they are interested in ramping guarantee schemes for SMEs that could help growth going forwards? Thank you.

Speaker #4: Is there any hesitance you're seeing among SMEs ahead of the budget, or any sign from the government, indeed, that they're interested in ramping up guarantee schemes for SMEs that could help growth going forward?

Rob Noble: Or any sign from the Government, indeed, that they are interested in ramping guarantee schemes for SMEs that could help growth going forwards? Thank you.

Speaker #4: Thank you.

Speaker #2: Thanks, Rob, and thanks for the kind words. So, market share and how we think about the market—as I said, the market is really large and it's still very underserved.

Lisa Jacobs: Thanks, Rob, and thanks for the kind words. The market is really large, and it is still very underserved. There is about GBP 80 billion of lending to small businesses in Term Loans. There is a further approximately GBP 80 billion in card transactions every year and about GBP 1.3 trillion in SME B2B payments each year. Addressing that size, we also see in other pockets where lending actually is quite underserved. In the overdraft market where we see FlexiPay as being a replacement, that market has fallen off significantly over the last two decades, and so we see that there is a huge underserved portion there. As we look ahead, we see a big opportunity for us to continue to grow our share in that market.

Speaker #2: There's about $80 billion of lending to small businesses in term loans. There's a further approximately $80 billion in card transactions every year, and about $1.3 trillion in SME B2B payments each year.

Speaker #2: So, addressing that size, we also see, in other pockets, where lending actually is quite underserved. In the overdraft market, where we see flexi payers being a replacement, that market has fallen off significantly over the last two decades.

Speaker #2: And so we see that there's a huge underserved portion there. As we look ahead, we see a big opportunity for us to continue to grow our share in that market.

Lisa Jacobs: As you have seen over the last few years, we continue to innovate within our product set. Within Term Loans, we have expanded into shorter-term loans. We continue to invest in our credits such that we can serve new segments of customers, and we will continue to do that within our Term Loan space. In the card and in FlexiPay, we are obviously much earlier on our journey there. I do not see any reason why we should not have a share that is at least Term Loans share today, if not further. I will pass to Tony for the second part.

Speaker #2: It will, as you've seen over the last few years, we continue to innovate within our product set. So within term loans, we've expanded into shorter-term loans.

Lisa Jacobs: Within Term Loans, we have expanded into shorter-term loans. We continue to invest in our credits such that we can serve new segments of customers, and we will continue to do that within our Term Loan space. In the card and in FlexiPay, we are obviously much earlier on our journey there. I do not see any reason why we should not have a share that is at least Term Loans share today, if not further. I will pass to Tony for the second part.

Speaker #2: We continue to invest in our credit so that we can serve new segments of customers, and we'll continue to do that within our term loan space.

Speaker #2: In the card and in flexi pay, we're obviously much earlier on our journey there and I don't see any reason why it can why we shouldn't have a share that's at least term loans share today if not further.

Speaker #2: And I'll pass to Tony for the second part.

Speaker #5: Yeah. Rob, in terms of the medium-term guidance, our current guidance out there is revenue of between $300 million and $350 million, and profit margins of low to mid-20%.

Tony Nicol: Yeah, Rob, in terms of the medium-term guidance, our current guidance out there is revenue of between GBP 300 million and GBP 350 million and profit margins of low to mid 20%. We are still only six months in, but are very confident that we are at the upper end of that revenue guidance at this point. We will reassess that as we get to the year-end, but very comfortable with where we are in terms of the medium term. For the shorter term and this year, as I have mentioned, we had a particularly strong Q1, which normalized in Q2, but overall, still very strong H1 with revenue of GBP 138 million. What I have done in the upgrade to the guidance right now is set a floor, and I expect our revenue in H2 to be, or overall for the year, to be more than GBP 255 million.

Speaker #5: We're still only six months in, but we are very confident that we are at the upper end of that revenue guidance at this point. We'll reassess that as we get to year-end, but we're very comfortable with where we are in terms of the medium term.

Speaker #5: For the shorter term, and this year, as I've mentioned, we had a particularly strong first quarter, which normalized in the second quarter, but overall, still a very strong first half.

Speaker #5: With revenue of £138 million. What I've done in the upgrade to the guidance right now is set a floor, and I expect our revenue in the second half to be, or overall for the year to be, more than £255 million.

Speaker #5: In terms of the third quarter—generally quieter summer months—very much tracking in line with our expectations. And we'll wait to see how the final quarter pans out.

Tony Nicol: In terms of Q3, generally quieter summer months, very much tracking in line with our expectations. We will wait to see how the final quarter pans out. As you mentioned, there is an element of uncertainty with the UK budget, and SMEs do like certainty, but we have not seen any slowdown from SMEs more generally.

Speaker #5: But as you mentioned, there is an element of uncertainty. With the UK budget, and SMEs do like certainty, but we've not seen any slowdown from SMEs more generally.

Speaker #4: Great. Thank you.

Rob Noble: Great. Thank you.

Speaker #3: Thank you. As a reminder, to ask a question over the phone, please signal by pressing star one. Our next question is from Edward Firth from KBW.

Operator: Thank you. As a reminder, to ask a question over the phone, please signal by pressing star 1. Our next question is from Edward Firth from KBW. Please go ahead.

Speaker #3: Please go ahead.

Speaker #6: Yes. Good morning, everybody. I have a couple of questions. The first one—just coming back to this medium-term guidance—could we just clarify: have you actually revisited that, or are you just saying it's getting easier to get to, if that makes sense?

Edward Firth: Yeah, good morning, everybody. I have a couple of questions. The first one, yeah, just coming back to this medium-term guidance, could we just clarify, have you actually revisited that, or are you just saying it is just getting easier to get to, if that makes sense? Because clearly, even if I look at the middle of it, that is like 8% growth over the next 3 years, and you have delivered 50% revenue growth this year, so the H1 of this year. So it feels like that is a whole number that at some point you are going to have to revisit or am I missing something massive, a huge slowdown that is coming? So it would be good to get some basic clarity on what is the right interpretation we should take from that, if that makes sense. Then I had a second question.

Speaker #6: Because clearly, I mean, even if I look at the middle of it, that's like 8% growth over the next three years, and you delivered 50% revenue growth this year.

Speaker #6: So, the first half of this year—it feels like that's an old number that, at some point, you're going to have to revisit, or I'm missing something massive about a huge slowdown that's coming.

Speaker #6: So, it would be good to get some sort of basic direction on what is the right interpretation we should take from that, if that makes sense.

Speaker #6: And then I had a second question, just for Digital. Just to understand correctly, in terms of the Citi Group facility—and I think it's £71 million of equity that you have exposed into that business, or that you've put into that lending business.

Edward Firth: Just for detail, because maybe just to understand correctly, in terms of the Citigroup facility and the $71 million of equity that you have exposed into that business for you, that you put into that lending business, are you also on the hook? If Charles Wundhammer at Citi said, "Look, that completely is to the third party," is $71 million effectively the limit? If you were to be subject to catastrophe, the $71 million, is that the maximum exposure you have in terms of potential losses?

Speaker #6: Are you also on the hook? Do you also underwrite the Citi facility, or is that completely still a third party? Is the 71 effectively the limit?

Speaker #6: If you were to if this was to be some sort of catastrophe, does 71 is that the maximum exposure you have in terms of potential losses?

Speaker #5: Yeah, so Ed, I think your line was breaking up, but hopefully I've got the gist of your second question, particularly. But in terms of the revenue growth, first of all, the growth—50% from the first half of last year to the first half of this year—a large part of that is driven by particularly high demand in the first quarter.

Tony Nicol: Yeah. Ed, I think your line was breaking up, but hopefully I have got the gist of your

Tony Nicol: Yeah. Ed, I think your line was breaking up, but hopefully I have got the gist of your—

Edward Firth: Sorry

Edward Firth: Sorry.

Tony Nicol: second question particularly. In terms of the revenue growth, first of all, the growth 50% from the H1 of last year to the H1 of this year, a large part of that is driven by particularly high demand in Q1 and by the launch of the shorter-term loan product that we launched around May time in 2025. So we have had the full six-month effect of that. Part of the driver of that growth, I would not expect that to be 50% growth year-on-year. More broadly, in terms of the medium-term plan, as I said, we are six months in. At this stage, confident that we are at the upper end of that.

Tony Nicol: —second question particularly. In terms of the revenue growth, first of all, the growth 50% from the H1 of last year to the H1 of this year, a large part of that is driven by particularly high demand in Q1 and by the launch of the shorter-term loan product that we launched around May time in 2025. So we have had the full six-month effect of that. Part of the driver of that growth, I would not expect that to be 50% growth year-on-year. More broadly, in terms of the medium-term plan, as I said, we are six months in. At this stage, confident that we are at the upper end of that. As you would appreciate, as a board, we do annual strategies and we look to do that towards the back end of the year, so we will be revisiting that and looking at our medium-term plan.

Speaker #5: And by the launch of the shorter-term loan product that we launched at around May time in 2025. So, we've had the full six-month effect of that.

Speaker #5: So, part of the driver of that growth—I wouldn’t expect that to be 50% growth year on year. More broadly, in terms of the medium-term plan, as I said, we’re six months in.

Speaker #5: At this stage, confident that we're at the upper end of that. As you'd appreciate, as a board, we do annual strategies, and we look to do that towards the back end of the year.

Tony Nicol: As you would appreciate, as a board, we do annual strategies and we look to do that towards the back end of the year, so we will be revisiting that and looking at our medium-term plan. As we currently stand, very comfortable with where we are at the upper end of that medium-term range as of now, and we will provide an update when we get to year-end. In terms of the Citi facility, I think what you were asking was, how much equity have we got in the vehicle, and what is our exposure to FlexiPay more generally? I think that is what you said.

Speaker #5: So, we'll be revisiting that and looking at our medium-term plan. But as we currently stand, we're very comfortable with where we are—at the upper end of that medium-term range as of now.

Tony Nicol: As we currently stand, very comfortable with where we are at the upper end of that medium-term range as of now, and we will provide an update when we get to year-end. In terms of the Citi facility, I think what you were asking was, how much equity have we got in the vehicle, and what is our exposure to FlexiPay more generally? I think that is what you said.

Speaker #5: And we'll provide an update when we get to year-end. In terms of the City facility, I think what you were asking was how much equity have we got in the vehicle and what's our exposure to Flexipay more generally?

Speaker #5: I think that's what you said. In terms of what we've got, we have £71 million of equity in FlexiPay and in the credit card.

Edward Firth: Yeah.

Tony Nicol: In terms of what we have got, so we have $71 million of equity in FlexiPay and the credit card. The way it works is that we have a ring-fenced bankruptcy remote SPV, and the lines of credit are held in that facility along with the Citi facility, and together with our own equity. Therefore, our exposure is limited to the $71 million in there, not to the full value of the lines of credit.

Speaker #5: The way it works is that we have a ring-fenced, bankruptcy-remote SPV. And the lines of credit are held in that facility, along with the City facility.

Speaker #5: And together with our own equity. Therefore, our exposure is limited to the £71 million in there, not to the full value of the lines of credit.

Edward Firth: Perfect. Thanks very much indeed.

Speaker #6: Great. Thanks so much, Neil.

Speaker #5: Thanks, Ed.

Tony Nicol: Thanks, Ed.

Speaker #3: Thank you. As a reminder, to ask a question, please signal by pressing star one on your telephone keypad. Please also ensure that the mute function on your phone is switched off to allow your signal to reach our equipment.

Operator: Thank you. As a reminder, to ask a question, please signal by pressing star one on your telephone keypad, and please make sure the mute function on your phone is switched off to allow your signal to reach our equipment. You may also submit your questions via the webcast. I will pause for just a moment to allow you to signal.

Speaker #3: You may also submit your questions via the webcast. We'll pause for just a moment to allow you to signal.

[Company Representative] (Funding Circle Holdings): I will pick up with some questions from the webcast in the meantime. We have got one coming in from Piers Brown at Investec on CEO succession. Piers says, "Congratulations to Lisa on your very successful tenure as CEO and very best wishes for your future plans. What skill sets do you think a future CEO needs to bring to the role, and are there specific areas of expertise that would be valuable?

[Webcast Operator] (Funding Circle): I will pick up with some questions from the webcast in the meantime. We have got one coming in from Piers Brown at Investec on CEO succession. Piers says, "Congratulations to Lisa on your very successful tenure as CEO and very best wishes for your future plans. What skill sets do you think a future CEO needs to bring to the role, and are there specific areas of expertise that would be valuable?

Speaker #2: I'll pick up with some questions from the webcast in the meantime. We've got one coming in from Piers Brown at Investec on CEO succession.

Speaker #2: Piers says, "Congratulations to Lisa on your very successful tenure as CEO, and my very best wishes for your future plans. What skill sets do you think a future CEO needs to bring to the role?"

Speaker #2: And are there specific areas of expertise that would be valuable?

Speaker #7: Thank you. So, overall, this is a matter for the Board, so I probably can't comment exactly on the attributes. But I'm sure they will be looking for somebody who can build on the successful platform that the team and I have built over the last several years, who can complement the strong leadership team that we have in place.

Lisa Jacobs: Thank you. Overall, this is a matter for the board, so I probably cannot comment exactly on the attributes. I am sure they will be looking for somebody who can build on the successful platform that the team and I have built over the last several years, who can complement the strong leadership team that we have in place. The board are really excited about the strategy, about the medium-term plan, and continue to be very engaged and passionate about the growth of the business. I am sure they will bring somebody in who continue that journey.

Speaker #7: The board is really excited about the strategy, about the medium-term plan, and continues to be very engaged and passionate about the growth of the business.

Speaker #7: So I'm sure they'll bring somebody in who continues that journey.

Speaker #2: Thanks, Lisa. One for Tony. Can you please provide any additional color on the $2.4 billion of forward flow announced? And how much of this comes from new funders onboarded over the past 12 months?

[Company Representative] (Funding Circle Holdings): Thanks, Lisa. One for Tony. Can you please provide any additional color on the GBP 2.4 billion of forward flow announced, and how much of this comes from new funders onboarded over the past 12 months? Have you seen any negative impact in this regard from the broader issues in private credit?

[Webcast Operator] (Funding Circle): Thanks, Lisa. One for Tony. Can you please provide any additional color on the GBP 2.4 billion of forward flow announced, and how much of this comes from new funders onboarded over the past 12 months? Have you seen any negative impact in this regard from the broader issues in private credit?

Speaker #2: Have you seen any negative impact in this regard from the broader issues in private credit?

Speaker #5: So, in terms of the forward flow that we’ve got—very healthy forward flow. This was £2.2 billion at year-end; it’s now £2.4 billion.

Tony Nicol: In terms of the forward flow that we have got, very healthy forward flow. This was GBP 2.2 billion at the year-end. It is now GBP 2.4 billion. We have had three new deals signed in the year, two of those with existing investors and one with a new investor. That was for GBP 500 million in August. So, a very healthy pipeline of funding from new and existing and potential investors. In terms of the broader issues in private credit, what we have seen is, as you would expect, more diligence being undertaken by each of these institutions, which we welcome. We also get a number of audits done by their internal audit functions, and we probably have more than 20 audits done a year, including by the British Business Bank. So, very comfortable in the position we are in, and if anything, we are seeing a flight to quality overall.

Speaker #5: We've had three new deals signed this year—two of those with existing investors, and one with a new investor. That was for £500 million in August.

Speaker #5: So, a very healthy pipeline of funding from new, existing, and potential investors. In terms of the broader issues in private credit, what we've seen is, as you'd expect, more diligence being undertaken by each of these institutions, which we welcome.

Tony Nicol: In terms of the broader issues in private credit, what we have seen is, as you would expect, more diligence being undertaken by each of these institutions, which we welcome. We also get a number of audits done by their internal audit functions, and we probably have more than 20 audits done a year, including by the British Business Bank. So, very comfortable in the position we are in, and if anything, we are seeing a flight to quality overall.

Speaker #5: We also get a number of audits done by their internal audit functions. And we probably have more than 20 audits done a year, including by the British Business Bank.

Speaker #5: We're very comfortable with the position we're in. If anything, we're seeing a flight to quality overall.

Speaker #2: Thanks, Tony. A question from Rahim Karim at Cavendish. You've spoken to the benefits of having multi-product capabilities. Do you expect to expand your offering further?

[Company Representative] (Funding Circle Holdings): Thanks, Tony. A question from Rahim Karim at Cavendish. You have spoken to the benefits of having multi-product capabilities. Do you expect to expand your offering further? If so, what type of products do you think your clients might benefit from?

[Webcast Operator] (Funding Circle): Thanks, Tony. A question from Rahim Karim at Cavendish. You have spoken to the benefits of having multi-product capabilities. Do you expect to expand your offering further? If so, what type of products do you think your clients might benefit from?

Speaker #2: And if so, what types of products do you think your clients might benefit from?

Speaker #7: Thanks, Rahim. Yeah, the multi-product strategy has worked very well for us over the last several years, as we've expanded from term loans into FlexiPay and card.

Lisa Jacobs: Thanks, Raheem. The multi-product strategy has worked very well for us over the last several years as we have expanded from Term Loans into FlexiPay and Card, and we see that in what we have shared today about a customer transaction every 20 seconds. As I look ahead, I think there is a huge amount of growth in the product sets that we have today. We will, of course, continue to listen to what our customers want and what their needs are and continue to develop the right products for them going forward. I do expect us over time to add further credit products to our suite. We will do that in the way that we have done previously, whereby we take customer needs and customer use cases into account, as well as what we see our customers actually using from other parts of the market.

Speaker #7: And we see that in what we've shared today about a customer transaction every 20 seconds. As I look ahead, I think there's a huge amount of growth in the product sets that we have today.

Speaker #7: But we will, of course, continue to listen to what our customers want and what their needs are, and continue to develop the right products for them going forward.

Speaker #7: And I do expect, over time, to add further credit products to our suite. We will do that in the way that we've done previously—by taking customer needs and customer use cases into account, as well as what we see our customers actually using from other parts of the market.

Speaker #7: You'll remember that as part of our term loans business, we have a marketplace where we refer our businesses to other parties and other lenders in the market, where we don't have the right product. That's great for enabling us to deliver great customer satisfaction and also gives us an indication of what other products our customers are looking at.

Lisa Jacobs: You will remember that as part of our Term Loans business, we have marketplace where we refer our businesses to other parties and other lenders in the market where we do not have the right product. That is great for enabling us to deliver great customer satisfaction. It also gives us an indication of what other products our customers are looking at, and so we continue to use that as a feed as well for our new product development.

Speaker #7: And so, we continue to use that as a feed as well for our new product development.

Speaker #2: Another question from Rahim: On cash distributions, how do you think about the balance between buybacks and dividends? And what is the level of unrestricted cash that you believe to be prudent to retain, above which you would consider excess?

[Company Representative] (Funding Circle Holdings): Another question from Raheem on cash distributions. How do you think about the balance between buybacks and dividends? What is the level of unrestricted cash that you believe to be prudent to retain above which you would consider excess?

[Webcast Operator] (Funding Circle): Another question from Raheem on cash distributions. How do you think about the balance between buybacks and dividends? What is the level of unrestricted cash that you believe to be prudent to retain above which you would consider excess?

Speaker #5: So, in terms of our cash overall, we had a very healthy cash balance at the end of June—£136 million. After the existing buyback and the management buffer we hold, that's around £88 million of deployable cash.

Tony Nicol: In terms of our cash overall, a very healthy cash balance at the end of June, GBP 136 million. After the existing buyback, and the management buffer we hold, that is around GBP 88 million of deployable cash. I expect that cash to continue going forward because the group is cash generative. In terms of the way that we think about it, we think of different forms of distributions, be that buybacks or dividends, and it is a conversation we regularly have at the board and will continue to do so in terms of excess cash. In terms of the uses of cash that we retain, as I mentioned before, the MTP is now cash generative, and therefore it is throwing off cash. We do look to hold cash for other purposes.

Speaker #5: I expect that cash to continue going forward because the group is cash generative. In terms of the way that we think about it, we consider different forms of distributions, whether that be buybacks or dividends.

Speaker #5: And it's a conversation we regularly have at the Board, and we'll continue to do so in terms of excess cash. In terms of the uses of cash that we retain, as I mentioned before, the MTP is now cash generative.

Speaker #5: And therefore, it's thrown off cash. But then we do look to hold cash for other purposes. As we demonstrated last year with the short-term loan product, we seeded that for a period of time whilst we tested and iterated that.

Tony Nicol: As we demonstrated last year with the short-term loan product, we seeded that for a period of time whilst we tested and iterated that. Then we onboarded a new funder for that in January this year. That tied up about GBP 26 million of cash for a period of time, and we would look to continue to have that flexibility by retaining some levels of cash.

Speaker #5: And then we onboarded a new funder for that in January this year. That tied up about $26 million of cash for a period of time.

Speaker #5: And we'd look to continue to have that flexibility by retaining some level of cash.

Speaker #2: Thanks, Tony. A question from Chris. This is about FlexiPay. FlexiPay generated $30 million of revenue, but incurred a $15 million ECL charge.

[Company Representative] (Funding Circle Holdings): Thanks, Tony. A question from Chris. This is about FlexiPay. FlexiPay generated GBP 30 million of revenue but incurred a GBP 15 million ECL charge, and remained GBP 4.5 million loss-making. Can you quantify the probability and credit loss performance of the mature customer cohorts, and tell us more about when you expect FlexiPay to reach PBT breakeven? I will just add one question as well from Graham Wells, who asks when the credit card will become profit-making. Martin, take those two together.

[Webcast Operator] (Funding Circle): Thanks, Tony. A question from Chris. This is about FlexiPay. FlexiPay generated GBP 30 million of revenue but incurred a GBP 15 million ECL charge, and remained GBP 4.5 million loss-making. Can you quantify the probability and credit loss performance of the mature customer cohorts, and tell us more about when you expect FlexiPay to reach PBT breakeven? I will just add one question as well from Graham Wells, who asks when the credit card will become profit-making. Martin, take those two together.

Speaker #2: And it remained a £4.5 million loss-making position. Can you quantify the probability and credit loss performance of the mature customer cohorts? And tell us more about when you expect FlexiPay to reach PBT break-even?

Speaker #2: And potentially, I'll just add one question as well from Graham Wells, who asks when the credit card will become profit-making. You might want to take those two together.

Speaker #5: Yeah, so maybe I'll take the credit performance first of all. We're seeing consistent levels of credit performance across the cohorts—the newer cohorts and the mature cohorts.

Tony Nicol: Yeah. So maybe I will take the credit performance first of all. We are seeing consistent levels of credit performance across the cohorts, the newer cohorts and the maturer cohorts. In terms of profitability, if I were to look at the 6 months and then allocate that against each of the various cohorts, all cohorts, apart from the H1 2026 new cohort, are profitable. When do I expect FlexiPay and the credit card, because I think of those two together because they share many resources and many costs, I expect them both to get to breakeven in the near future. I mentioned on the call earlier that if I took FlexiPay and the card as of a point in time now and stopped marketing, so basically as is, it would be profitable to the tune of GBP 10 million already.

Speaker #5: In terms of profitability, if I were to look at the six months and then allocate that against each of the various cohorts, all cohorts, apart from the H1 26 new cohort, are profitable.

Speaker #5: When do I expect FlexiPay to break even, or FlexiPay and the credit card? Because I think of those two together, as they share many resources and many costs.

Tony Nicol: When do I expect FlexiPay and the credit card, because I think of those two together because they share many resources and many costs, I expect them both to get to breakeven in the near future. I mentioned on the call earlier that if I took FlexiPay and the card as of a point in time now and stopped marketing, so basically as is, it would be profitable to the tune of GBP 10 million already. Very much there, but looking to continue to grow it for future profitability.

Speaker #5: I expect them both to get to break-even in the near future. And I mentioned on the call earlier that if I took FlexiPay and the card as of a point in time now, and stopped marketing—so basically as is—it would be profitable to the tune of £10 million already.

Speaker #5: There is so much there, but we're looking to continue growing it for future profitability.

Tony Nicol: Very much there, but looking to continue to grow it for future profitability.

Speaker #2: A question from Piers at Investec. We talked about the strength of new business in Q1. Are there any other factors that make the first half of the year unusual in terms of the strength of lending demand?

[Company Representative] (Funding Circle Holdings): Question from Piers at Investec. We talked about the strength of new business in Q1. Are there any other factors that make the H1 of the year unusual in terms of the strength of lending demand? To what extent can we take the H1 as being a representative base for originations in the H2 and 2027?

[Webcast Operator] (Funding Circle): Question from Piers at Investec. We talked about the strength of new business in Q1. Are there any other factors that make the H1 of the year unusual in terms of the strength of lending demand? To what extent can we take the H1 as being a representative base for originations in the H2 and 2027?

Speaker #2: To what extent can we take the first half as being a representative base for originations in the second half and 2027?

Speaker #5: So there is some seasonality in the business. We typically see a strong first quarter and a strong final quarter, and things are slightly more normalized through the summer months.

Tony Nicol: There is some seasonality in the business. We typically see a strong Q1 and a strong final quarter, and slightly normalize through the summer months. That follows holiday season very much and half terms and bank holidays. So we do see that. We saw particularly strong demand in the back end of last year as there was more certainty around the budget at the time, and then in the first 3 months of this year. That happened to coincide with the conflict in Iran. So it is difficult to pick that apart, but we did see it normalize into Q2 and Q3. As I say, we would expect Q4 to pick up, but there is still an element of uncertainty with the UK budget coming up.

Speaker #5: And that follows the holiday season very much, along with half terms and bank holidays. So we do see that. We saw particularly strong demand in the back end of last year, as there was more certainty around the budget at the time.

Speaker #5: And then in the first three months of this year, that happened to coincide with the conflict in Iran, so it's difficult to pick that part.

Speaker #5: But we did see it normalize into Q2 and Q3. As I say, we would expect Q4 to pick up, but there is still an element of uncertainty with the UK budget coming up.

Speaker #2: Another question from Piers: Are there any aspects of the upcoming budget that might have specific relevance for Funding Circle?

[Company Representative] (Funding Circle Holdings): Another question from Piers. Are there any aspects of the upcoming budget that might have specific relevance for Funding Circle?

[Webcast Operator] (Funding Circle): Another question from Piers. Are there any aspects of the upcoming budget that might have specific relevance for Funding Circle?

Lisa Jacobs: Our SME customers are very used to different governments and new budgets now, having lived through them over the last several years. Actually, the average age of one of our businesses is 8 to 10 years. What we find is that firstly, SMEs are a group of the UK that all politicians can get behind. They provide growth in their economies and in their communities. As such, we see it being a cross-party positive set of customers. Our SMEs, what they tell us mostly is that they want stability. I think the Government understands that and has heard that. But really what we see is that they continue to be resilient. The book is performing very well, and actually, we see SMEs really focused on their continued growth, continued working capital needs throughout all these periods of uncertainty.

Speaker #3: Our SME customers are very used to it.

Speaker #7: Different governments and new budgets—now, having lived through them over the last several years. And actually, the average age of one of our businesses is 8 to 10 years.

Speaker #7: And what we find is that, firstly, SMEs are a group in the UK that all politicians can get behind. They provide growth in their economies and in their communities.

Speaker #7: And as such, we see it being a cross-party, positive set of customers. Our SMEs, what they tell us mostly is that they want stability.

Speaker #7: I think the government understands that and has heard that. But really, what we see is that they continue to be resilient. The book is performing very well.

Speaker #7: And actually, we see SMEs really focused on their continued growth, continued working capital needs, throughout all these periods of uncertainty. We have jewelry businesses, and one who I met earlier this year who'd recently had a burglary, which was a bigger challenge for them, or a chocolate manufacturer who has challenges with the cocoa price increases.

Lisa Jacobs: We have jewelry businesses and one who I met earlier this year who had recently had a burglary, which was a bigger challenge for them, or a chocolate manufacturer who is challenging with the cocoa price increases. Therefore, some of the differences in government have less of an impact than we might sometimes think.

Speaker #7: Therefore, some of the differences in government have less of an impact than we might sometimes think.

Speaker #2: Related to that question from Gary Greenwood at Shore Capital, have you seen any change in customer sentiment or behavior post Andy Burnham becoming Prime Minister?

[Company Representative] (Funding Circle Holdings): Related to that, a question from Gary Greenwood at Shore Capital. Have you seen any change in customer sentiment or behavior post Andy Burnham becoming Prime Minister? Related to that, any current areas of concern within your customer demographic?

[Webcast Operator] (Funding Circle): Related to that, a question from Gary Greenwood at Shore Capital. Have you seen any change in customer sentiment or behavior post Andy Burnham becoming Prime Minister? Related to that, any current areas of concern within your customer demographic?

Speaker #2: And related to that, are there any current areas of concern within your customer demographic?

Speaker #7: No, I mean, to a certain extent, it’s a little bit too early to tell. But demand has continued to be good into the second half of the year.

Lisa Jacobs: No. To a certain extent, it is a little bit too early to tell. But demand has continued to be good into the H2 of the year, and we have not seen any noticeable change in sentiment. The top two things that our businesses talk about as their pain point continues to be supplier payments and the economy. On the supplier payments front, this again comes back to the cash flow challenges that small businesses face and is part of the reason why we expanded our product set to include cash flow products and really making sure that we are serving those working capital needs through FlexiPay and through the credit card.

Speaker #7: And we've not seen any noticeable change in sentiment. The top two things that our businesses talk about as their pain points continue to be supplier payments.

Speaker #7: And the economy. And on the supplier payments front, this again comes back to the cash flow challenges that small businesses face. That's part of the reason why we expanded our product set to include cash flow products, and really making sure that we're serving those working capital needs through FlexiPay and through the credit card.

Speaker #2: And another question from Gary about marketing spend. How did the marketing spend split between the two business lines in the first half? How should we think about this going forward?

[Company Representative] (Funding Circle Holdings): Another question from Gary about marketing spend. How did the marketing spend split between the two business lines in the H1? How should we think about this going forward?

[Webcast Operator] (Funding Circle): Another question from Gary about marketing spend. How did the marketing spend split between the two business lines in the H1? How should we think about this going forward?

Speaker #5: So we don't split the marketing between the two, because some of the marketing works for both products. So we think of marketing as a whole.

Tony Nicol: We do not split the marketing between the two because some of the marketing works for both products. We think of marketing as a whole. Overall marketing spend continues to be around 30% of revenue. That said, we do see a bit of a split within the channels that we market, so the direct marketing, and the broker marketing through the broker commissions. We are seeing a bit more marketing or a bit more flow coming through broker than direct. It is probably about 60/40 split as it currently is.

Speaker #5: Overall, marketing spend continues to be around 30% of revenue. That said, we do see a bit of a split within the channels that we market in.

Speaker #5: So, the direct marketing and the broker marketing through the broker commissions. We're seeing a bit more marketing, or a bit more flow, coming through brokers than direct.

Speaker #5: It's probably about a 60/40 split as it currently is.

Speaker #2: Thanks, Tony. A question from Angel Gaviero at AG Strategy & Partners about AI: Could you elaborate more on the degree of AI adoption achieved so far, both in terms of what's going well and what could go better?

[Company Representative] (Funding Circle Holdings): Thanks, Tony. A question from Angel Gablero at AG Strategy & Partners about AI. Could you elaborate more about the degree of AI adoption achieved so far, both in terms of what is going well and what could go better, and what are the specific targets in this regard going forward?

[Webcast Operator] (Funding Circle): Thanks, Tony. A question from Angel Gablero at AG Strategy & Partners about AI. Could you elaborate more about the degree of AI adoption achieved so far, both in terms of what is going well and what could go better, and what are the specific targets in this regard going forward?

Speaker #2: And what are the specific targets in this regard going forward?

Speaker #7: Yes, so as I said in the presentation, we're focused on a couple of different areas. One is our broad-based fluency and enablement for the whole team.

Lisa Jacobs: Yeah. As I said in the presentation, we are focused on a couple of different areas. One is our broad-based fluency and enablement for the whole team, and then the second is targeted strategic investment. In the broad-based, we are finding really strong usage across our team, about 90% of Circlers using AI frequently. We are supporting them with the skills to enable them to do so, and we are seeing them create really good use cases to support with their day-to-day productivity, but also to bring really good tools for their broader teams to work through. I mentioned one of those in the presentation, our data subject access request agent. We have also got teams who are building these for agent call coaching. We have got teams who are building their own dashboards in order to get data out to be able to see it in real time.

Speaker #7: And then the second is targeted strategic investment. So in the broad base, we're finding really strong usage across our team, with about 90% of Circlers using AI frequently.

Speaker #7: We're supporting them with the skills to enable them to do so, and we're seeing them create really good use cases to support their day-to-day productivity.

Speaker #7: But also to bring really good tools for their broader teams to work through. So I mentioned one of those in the presentation.

Speaker #7: Our Data Subject Access Request agent— we've also got teams who are building these for agent call coaching. We've got teams who are building their own dashboards in order to get data out, to be able to see it in real time.

Speaker #7: So, a huge number of different use cases, which is adding to individuals' productivity. In the specific areas where we're strategically investing, we're seeing really good wins in terms of, again, productivity and customer experience in product engineering.

Lisa Jacobs: A huge number of different use cases, which is adding to individuals' productivities. In the specific areas where we are strategically investing, we are seeing really good wins in terms of, again, productivity and customer experience. We are in products engineering. As I said, we have seen our teams who are working in an AI-native way deliver products to market 30% faster. We think there is a lot more room for that to grow. I am really encouraged by what we are seeing across the business. I think it continues to be something we see as being a valuable lever over the medium term to drive productivity, to drive customer experience benefits. That all comes down to a 20% improvement in productivity from AI and other related initiatives over the last year.

Speaker #7: As I said, we have seen our teams who are working in an AI-native way deliver products to market 30% faster. We think there's a lot more room for that to grow.

Speaker #7: And so, I'm really encouraged by what we're seeing across the business. I think it continues to be something we see as a valuable lever over the medium term to drive productivity and to drive customer experience benefits.

Speaker #7: And that all comes down to a 20% improvement in productivity from AI and other related initiatives over the last year.

Speaker #2: That's all the questions that we have coming through today on the webcast and on the phone. So I'll just hand over to Lisa if you want to say anything to wrap up.

[Company Representative] (Funding Circle Holdings): That is all the questions that we have coming through today on the webcast and on the phone. I will just hand to Lisa if you want to say anything to wrap.

[Webcast Operator] (Funding Circle): That is all the questions that we have coming through today on the webcast and on the phone. I will just hand to Lisa if you want to say anything to wrap.

Speaker #7: Thank you for your time today, for joining the call. Businesses in a great position. We're really excited about the future. And we'll look forward to seeing many of you on the roadshow.

Lisa Jacobs: Thank you for your time today for joining the call. Business is in a great position. We are really excited about the future, and we will look forward to seeing many of you on the roadshow.

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Half Year 2026 Funding Circle Holdings PLC Earnings Call

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