Business of Fintech

Q1 fintech earnings: stocks in the red, but growth prospects abound

  • Fintech stocks continue to dive in public markets as macroeconomic trends weighed on companies' first quarter earnings, which came in below equity analysts' expectations.
  • We look at four major fintech players that reported their results – PayPal, Square, Robinhood and LendingClub – and outline the major takeaways from their Q1 earnings reports.

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Q1 fintech earnings: stocks in the red, but growth prospects abound

The first quarter earnings season brought mixed results at some of the country's largest fintech players – income was generally below what market analysts had predicted, but management continued with their growth strategies nonetheless.

On the public market, investors are yet to be convinced that fintech stocks will be able to deliver – since the beginning of this quarter, shares have been down more than 20% at some of the biggest players in the space. 

Shares at rivals PayPal and Block are well in the red quarter-to-date, as each missed earnings estimates by about 10%.

Read on to find out the main takeaways from this earnings season at four major fintech companies – Block, PayPal, Robinhood and LendingClub.


  • EPS: $0.43 per share, 10.4% below consensus estimates
  • Revenues: $6.5 billion, 1.2% above expectations
  • Net income: $509 million, 12.8% below estimates

PayPal reported Q1 2022 net income of $509 million, compared to $1.1 billion a year earlier. Net revenues came in at $6.5 billion, relatively in line with expectations and 7.5% above the prior-year result.

Disruptions around supply chains pressuring e-commerce sales, plus a normalization of the mix of in-store and virtual spending, are continuing to make it difficult to forecast the business, PayPal said. 

Nevertheless, the company said it added 2.4 million net new active accounts, bringing the total to 429 million, in line with what markets were expecting. 

One of the highlights this quarter was the fintech’s reported growth in the BNPL sector – CEO Dan Schulman noted that Buy Now, Pay Later volumes were up 256% year-on-year to $3.6 billion, with 18 million customer accounts choosing this option. Over 70% of its BNPL users engage through its digital wallet.

“We think we have the lowest loss rates of the Buy Now, Pay Later industry, probably the highest approval rates because we know so many of the customers, and a really powerful value proposition to merchants. And now, we can tie that both online and offline, and that can be a pretty powerful combination,” Schulman said on the call. 


  • EPS: $0.18 per share, 10% below estimates
  • Revenues: $3.96 billion, 4.3% below estimates
  • Net income: $102.5 million, 7.6% below estimates

Block missed earnings estimates in the first quarter, as declining bitcoin revenues pressured the company’s top line.

Total net revenues came in at $3.96 billion, 21.7% lower than the prior-year period and only 3% higher than in the fourth quarter. The decrease was mostly due to bitcoin revenue nearly halving from $3.5 billion in Q1 2021 to $1.7 billion a year later.

Transaction-based revenue was $1.23 billion, up almost 30% year-on-year.

The company’s CFO Amrita Ahuja said that Block is in the early stages of building out a broader commerce platform – it wants to combine the direct-to-consumer Cash App and the merchant network of Afterpay, the BNPL platform it acquired earlier this year.

This integration represents a competitive advantage, argued CEO Jack Dorsey on the earnings call. 

“What sets us apart from every other company, whether they focus on sellers, individuals, or BNPL, is we have all of it in one ecosystem – they all connect together. And by making those connections much stronger, we see a lot of power and value created for our customers, both in the seller space and also the individual space,” he said.

Cash App experienced the strongest monthly engagement in March, driven by its banking products including the Cash App Card, and had the highest quarterly inflows driven by recurring paycheck deposits.

According to Dorsey, Block has sent 350,000 sales leads from Cash App to merchants on Afterpay through the "Discovery" tab, which allows consumers to curate merchandise.

In addition to the launch of BNPL services for online sellers, the company sees “a broader opportunity to bring Afterpay to more of our Square ecosystem in the coming quarters,” Ahuja said. BNPL for in-person payments is planned to be made available soon.

Dorsey also noted that Block wants to continue to make bitcoin more accessible through the Cash App, as more than 10 million accounts have bought Bitcoin since the company started offering the service. And since last month, Block can send and receive bitcoin through the Lightning network, making transactions instant and free through the Cash App. 


  • EPS: -$0.45 per share, 28.6% below consensus estimates
  • Revenues: $299 million, 16% below expectations
  • Net loss: $392 million, 23.6% below estimates

Robinhood missed estimates in the first quarter, with total revenues of $299 million, representing a 42.7% drop on the prior-year period. 

However, the company’s net loss of $392 million was significantly below the $1.45 billion loss reported in Q1 2021, and lower than the $423 million loss in the fourth quarter of last year. 

Monthly active users dropped below 16 million in the first quarter, compared to 17.3 million at the end of 2021. Average revenue per user stood at $53, a 62% year-on-year drop. 

Robinhood is also undergoing some internal restructuring, announcing that it’s cutting its workforce by 9% to "improve efficiency, increase our velocity, and ensure that we are responsive to the changing needs of our customers," according to CEO Vlad Tenev.

The executive said in a blog post that the company's fast headcount growth "led to some duplicate roles and job functions, and more layers and complexity than are optimal." 


  • EPS: $0.39 per share, 50% above estimates
  • Revenues: $290 million, 10.3% more than consensus
  • Net income: $40.8 million, 55.6% more than estimates

LendingClub reported an earnings beat in the first quarter, with revenues of $290 million, more than double the prior-year figure of $105.8 million. 

New loan originations came in at $3.2 billion, up considerably from the $2.8 billion reported in Q4 2021. Deposits almost reached $4 billion, a 27% growth on the previous quarter, reflecting growth primarily in high-yield savings accounts, according to CFO Thomas Casey. 

Delinquency rates remain “well below pre-pandemic levels” and are normalizing within expectations, the company said.

“We expect our customers who have an average income of more than $100,000 to be particularly resilient. They are overall in great shape, have strong balance sheets that did not disproportionately benefit from stimulus packages, and are therefore not overly affected by their spending,” said LendingClub CEO Scott Sanborn during the conference call.

However, the prospect of rising interest rates at “unprecedented speed and magnitude” led the company to “proactively tighten underwriting on the margin to stay ahead of pressures that consumers may face,” Sanborn noted.

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