Beforepay Group (ASX:B4P) executives said the company delivered solid top-line growth in its second quarter ended Dec. 31, 2025, while navigating the seasonal increase in defaults that typically compresses margins during the holiday spending period.
Chief Executive Officer Jamie Twiss, joined by Chief Financial Officer Lavanya Pariyar, told investors the company evaluates its second quarter performance primarily through two lenses: growth in the core pay advance business and progress on its strategic growth initiatives, including Carrington Labs and its personal loans product. Twiss said he was “very pleased” with results on both fronts, noting revenue grew 18% year-over-year and pointing to multiple developments at Carrington Labs.
Core business: larger advances lift revenue
As expected for the period, defaults moved higher on a seasonal basis. Pariyar said net defaults were 1.85% for the quarter. Despite that seasonal headwind, she reported net transaction margin of AUD 5.9 million, up 22% year-over-year.
Operating expenses increased to AUD 5.2 million. Pariyar said the increase was predominantly due to marketing expenses and higher salary costs, reflecting business growth and investments tied to growth initiatives—particularly Carrington Labs and the personal loans business.
The quarter resulted in net profit before tax of AUD 0.3 million, according to Pariyar.
Twiss said current-quarter trading was in line with normal trends and that the company expects default-related pressure to ease as the holiday period passes. He added that the company typically sees slower growth in the third quarter than the second quarter, but with better margins and profit.
Carrington Labs: client wins, partnerships, and product integration
Twiss highlighted several updates at Carrington Labs, including a newly announced customer win with Flexcar, which he described as a significant U.S. car leasing business. He said the company was pleased to add an automotive client and described Flexcar as a “very sharp organization.”
He also discussed a new partner, Sea.dev, which works in automation and document automation in financial services. Twiss said Sea.dev sits adjacent to Carrington Labs in the value chain and could help bring data into lending origination workflows, creating a natural integration point for Carrington Labs.
Additionally, Twiss noted the company launched an “MCP Server,” which he said enables banks and other lenders building agentic AI workflows to integrate Carrington Labs tools into those workflows.
On expenses related to Carrington Labs, Twiss said it was difficult to fully separate Carrington-specific operating costs because personnel, including himself and Pariyar, work across businesses. However, he said that if investors look at operating expense growth over the past year, “most of that increase” has been tied to building the integrated technology and tooling that powers Carrington Labs, personal loans, and aspects of the core business. He also cited additional resources added to the U.S.-based team and an increased tempo of activity.
Asked when the company will begin publishing Carrington Labs revenue, Twiss said Carrington’s revenue is “still not particularly material” to the overall group, given the core business growth and the company approaching what he described as roughly AUD 50 million annual revenue run rate across the group. He said there will be a point when it makes sense to break out Carrington Labs revenue, but he did not consider it a helpful disclosure “at present.”
Customer pipeline and adoption: broad interest, long sales cycles
Twiss reviewed the Carrington Labs customers the company has publicly disclosed so far:
- Kiva, described as a micro-business lender
- Doc2Doc, a specialty medical lender
- CCBank, described as a forward-thinking U.S.-based bank
- Flexcar, a U.S. car leasing company
He said customers are at varying stages, ranging from very early work to fully live production usage, and noted that defining “live” can be tricky when some clients may engage Carrington for one-off builds.
Regarding the pipeline, Twiss said it is “quite varied,” including discussions with what he called some of the largest banks in the world as well as fintechs and specialty credit providers. However, he cautioned that large banks can have slow, long sales cycles and said he did not want to overpromise on what will land or when. He added that the company has sometimes struggled with an “overfull” top-of-funnel pipeline and that some of its investments are aimed at moving prospects through proof-of-concept stages that can require technical work and data integration support.
Twiss confirmed the company has appointed a senior sales leader in the U.S., describing the hire as a “heavier hitter” to lead the team. He said this reflects both the level of activity Carrington Labs is supporting and management’s confidence going forward, while reiterating that current Carrington revenue is not yet material to the group.
In discussing competition amid heightened interest in AI, Twiss said some new firms are emerging with AI claims, but many may be potential partners rather than direct competitors. He argued that credit decisioning requires deterministic statistical approaches, adding that lenders and regulators are unlikely to accept “black box” decisioning approaches for loan approvals.
Personal loans: scaling within existing customer base
Twiss described the personal loans product as a “quiet achiever” that the company is scaling in the background. He said origination figures were published during the quarter and that the company expects to continue issuing loans at increasing scale.
He also pointed to an increase in average personal loan size to about AUD 3,200, up from the prior quarter. Twiss said the company previously capped loans at AUD 3,000 over three months and has begun testing longer durations and larger volumes.
In response to a question about distribution, Twiss said personal loans are currently offered only to existing pay advance clients, citing the company’s understanding of those customers and their repayment histories. Over time, he said Beforepay expects to offer personal loans to new-to-group customers as loan sizes increase, noting that larger loans—such as AUD 10,000 to AUD 20,000—would target a different customer base.
Outlook and cost discipline
On operating expenses, Twiss said there can be quarter-to-quarter volatility, particularly in marketing spend, which he described as results-based. More broadly, he said management intends to ensure expense growth is tied to value creation and does not plan to increase operating expenses without clear returns. He added that people costs should rise as the company grows, but said management is comfortable it is “on top of” operating expenses and would reinforce investment as success scales—citing an example that spending would rise if Carrington Labs reached significantly more clients.
Twiss closed the call by reiterating confidence in the company’s trajectory across the core business, personal loans, and Carrington Labs, while cautioning against overpromising on timelines. He said shareholders can expect the next update at the half-year results at the end of February.
About Beforepay Group (ASX:B4P)
Beforepay is an ethical-lending fintech that was founded in 2019 to support working Australians who
have not been well-served by the traditional financial services industry. Beforepay’s flagship pay
advance product is a safe and affordable way for custo
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