MONEYME (ASX: MME) reports A$76m quarterly revenue and positive normalised profit

MONEYME Limited (ASX: MME), the Sydney-based digital consumer lender operating across personal loans, automotive finance and credit cards, reported a 36% increase in its gross loan book to A$2.24 billion for the September 2026 quarter. The unaudited trading update released on 19 October showed gross revenue increasing 33% to A$76 million, while annualised net credit losses declined to a company-record 2.0%. MONEYME generated A$0.6 million in normalised net profit after tax and A$3.2 million in operating cash profit, supported by stronger risk-adjusted lending margins and lower operating expenditure relative to income. The improvement indicates progress in combining loan growth with better credit performance, although statutory profitability and the sustainability of recent low loss rates remain important unresolved questions.

How did MONEYME increase its loan book by 36% while improving credit performance?

MONEYME ended September with a gross loan book of A$2.24 billion, compared with A$1.65 billion a year earlier and A$2.08 billion at 30 June 2026. That represents growth of approximately A$590 million over twelve months and A$160 million during the latest quarter. Loan originations reached A$366 million, increasing 40% from A$261 million in the corresponding quarter. The combination of higher originations and portfolio growth demonstrates expanding customer lending activity rather than an increase in revenue solely attributable to pricing.

The company reported a record month for personal loan originations in September. Its personal loan portfolio increased approximately 58% year on year to A$910 million, while the Autopay automotive finance book grew approximately 28% to A$1.25 billion. These two businesses accounted for the substantial majority of the reported loan book, alongside the company’s growing credit card portfolio. Their different lending characteristics influence the overall relationship between yields, funding costs and credit losses.

MONEYME’s secured lending share declined from 62% to 57% during the twelve-month period. Management attributed the change to deliberate growth in personal loans and credit cards relative to secured automotive finance. This shift could affect future credit risk because unsecured and secured products have different recovery characteristics when borrowers default. The declining secured share makes the simultaneous improvement in credit performance particularly important to monitor.

The company has emphasised credit quality as a central part of its growth strategy. Its weighted average customer credit score remained within Equifax’s Very Good range, which the announcement identifies as 735 to 852. The reported average is a portfolio measure and does not mean every borrower carries an equivalent risk profile. Sustained performance will depend on how the newer loans behave as they season and move through different economic conditions.

Why did MONEYME’s net credit losses fall to 2.0% despite faster loan origination growth?

MONEYME reported annualised net credit losses of 2.0% for the September quarter, compared with 3.1% a year earlier and 2.4% in the preceding June quarter. The 1.1-percentage-point annual improvement represents a substantial reduction relative to the company’s previous loss experience. Management also described September as the sixth consecutive quarter of improving net credit losses. This supports the view that better credit performance has developed across multiple reporting periods rather than emerging from one isolated result.

The net credit loss measure reflects principal write-offs after recoveries, including proceeds from debt sales, relative to average principal receivables on an annualised basis. It is not a simple percentage of borrowers who defaulted during the quarter. Changes in recoveries, portfolio composition and write-off timing can influence the reported figure. Consequently, the rate should be assessed alongside arrears and the characteristics of recent lending cohorts.

Loans more than 90 days in arrears declined to 71 basis points, compared with 100 basis points a year earlier and 81 basis points in June. The 29-basis-point annual reduction provides another indication of improved borrower payment performance. Arrears are important because they can provide information about emerging credit difficulties before loans are written off. However, the relationship between arrears and final credit losses depends on recoveries and the timing of collections.

Strong credit performance can support profitability even when the headline lending margin declines. Lower expected losses mean a greater proportion of lending income may be retained after accounting for credit costs. Nevertheless, consumer lending remains exposed to employment conditions, household cash flow and interest rates. A record-low loss rate is encouraging, but it should not be assumed to remain unchanged as the portfolio expands.

Why did MONEYME’s risk-adjusted interest margin improve when its headline net interest margin declined?

MONEYME reported a net interest margin of 6.4%, down from 7.0% in the September 2025 quarter. The company attributed part of the reduction to a stronger credit quality mix, which can involve accepting lower customer yields in exchange for lower expected losses. Its risk-adjusted net interest margin, including corporate interest costs, improved from 1.9% to 2.9%. The contrasting figures demonstrate why gross lending spreads alone provide an incomplete measure of profitability.

The risk-adjusted measure accounts for net credit losses, specified funding costs and other defined items. The one-percentage-point improvement indicates that MONEYME retained more income after those costs despite a lower headline margin. This can support profitability as the loan book expands because the business benefits from both a larger asset base and improved economics per unit of lending. The benefit will depend on continued credit discipline and access to competitively priced funding.

The company reported gross revenue of A$76 million, compared with A$58 million in the corresponding quarter and A$70 million during June. The 33% annual increase reflects the larger lending portfolio, while sequential revenue growth was approximately 9%. A simple multiplication of quarterly revenue by four produces an annualised pace of A$304 million, although this is not equivalent to a full-year forecast. Actual FY27 revenue will depend on future loan balances, yields and customer activity.

MONEYME has reaffirmed full-year normalised net profit after tax guidance ranging from breakeven to A$7 million. The range is based on an expected average lending portfolio of approximately A$2.2 billion and remains sensitive to interest rates and credit conditions. The current loan book is slightly above that average assumption, but a larger closing balance does not automatically produce higher annual profit. Profitability depends on the average portfolio outstanding, operating costs and loan performance throughout the year.

How much has MONEYME improved operating efficiency through its Horizon lending platform?

MONEYME reported that its operating cost-to-income ratio declined to 21.3% during the September quarter, compared with 27.9% a year earlier and 24.7% in June. The annual improvement of 6.6 percentage points indicates that operating expenditure grew more slowly than the company’s income base. Management attributed the change partly to previous investment in technology and increasing automation across its operations. The result provides evidence of improved operating leverage as lending volumes expand.

The company’s proprietary Horizon platform supports credit decisioning, fraud detection, customer service and other lending processes. Automated workflows may allow additional loan applications to be processed without equivalent increases in staffing expenditure. They may also improve customer response times and provide more consistent application of credit policies. However, the effectiveness of automation depends on model performance, data quality and ongoing oversight.

The latest quarter produced A$3.2 million in operating cash profit, compared with A$400,000 a year earlier and a A$900,000 outflow in the preceding quarter. The company defines this as a management measure covering cash flows from its core operating activities, excluding principal repayments and the funding of loan originations. It should therefore not be confused with statutory operating cash flow or free cash flow. The improvement nevertheless provides evidence that the operating business generated a stronger contribution under the company’s defined methodology.

Normalised net profit after tax was A$600,000, compared with a A$2.9 million loss a year earlier. MONEYME has now recorded three consecutive quarters of positive normalised profit, according to management. However, normalised profit excludes specified non-cash and infrequent items, and it is not the same as statutory net profit. The company’s FY26 statutory result was a loss of approximately A$40 million, making the distinction particularly important when evaluating the financial turnaround.

How are MONEYME’s Autopay funding arrangements supporting automotive lending growth?

MONEYME renewed an Autopay warehouse financing facility during October on improved commercial terms. The company reported lower pricing, improved capital efficiency and expanded eligibility criteria under the revised arrangement. Warehouse facilities are important to non-bank lenders because they provide funding for loans before those assets are refinanced, securitised or otherwise managed. Their terms directly influence the spread retained after financing expenditure.

The company also disclosed that a 0.75-percentage-point reduction in the margin on its A$125 million iPartners corporate facility took effect on 1 July 2026. MONEYME drew an additional A$10 million during July, taking the total drawn balance to A$85 million. The difference between facility size and amount drawn represents potential remaining capacity, subject to the applicable conditions and requirements. It should not be treated as unrestricted cash on the balance sheet.

Fitch Ratings upgraded eight classes of asset-backed securities associated with MONEYME Autopay trusts during September and affirmed seven others. The rating actions reflected the performance of underlying loan portfolios, while several classes also received positive outlooks. These developments may support confidence among funding counterparties. However, rating changes do not eliminate credit losses or guarantee that future refinancing will be available at the same cost.

MONEYME reported unrestricted cash of approximately A$22 million at September-end, compared with A$20 million in June. The relatively modest corporate cash balance needs to be considered alongside committed financing facilities and the cash flows associated with the lending business. Growing the loan portfolio requires substantial financing even when customer originations are profitable. Reliable access to diversified funding remains central to the company’s expansion strategy.

What do the Luxury Escapes credit card and direct automotive lending launches mean for MONEYME’s growth?

MONEYME publicly launched a white-label credit card with Luxury Escapes in September 2026. The partnership allows the travel business to offer a co-branded financial product to customers while MONEYME supplies the underlying lending capabilities. This provides a distribution channel that can reach customers through an established consumer brand. Its financial value will depend on account acquisition, card usage, credit losses and the commercial arrangements between the parties.

The company also launched its direct-to-consumer automotive finance product in August, extending access to private vehicle sales. Its Autopay business previously expanded into financing private sales through brokers. A direct channel may create opportunities to reduce reliance on intermediaries and develop closer customer relationships. However, direct distribution requires investment in marketing, customer acquisition and servicing systems.

Credit cards and personal loans may generate different revenue and risk characteristics from secured automotive financing. As these products expand, the overall loan book mix will continue changing. Management expects new products and white-label partnerships to contribute to future growth and returns. The magnitude of that contribution remains uncertain because the company has not disclosed a separate earnings forecast for the new channels.

The strategic objective is to expand loan volumes while preserving the improved credit and operating cost performance reported during September. A larger customer base may improve platform utilisation, but growth that weakens underwriting quality could erode those benefits. Monitoring credit losses within newer products will be important. The most valuable expansion would combine commercially attractive lending margins with durable customer relationships and controlled acquisition costs.

What will determine whether MONEYME’s normalised profitability becomes sustainable in FY27?

The September results demonstrate several improvements occurring simultaneously: loan book growth, lower credit losses, better risk-adjusted margins and reduced operating costs relative to income. These developments helped produce positive normalised profit despite the decline in headline net interest margin. Their combined effect provides stronger evidence of improving operating economics than revenue growth alone. Nevertheless, the company has retained a relatively cautious FY27 profit range.

Credit conditions remain an important external risk. Household financial pressure or a deterioration in employment could affect arrears and write-offs, particularly as unsecured lending grows. Funding costs may also change with Reserve Bank of Australia decisions and credit market conditions. MONEYME’s ability to preserve the September risk-adjusted margin will depend on managing both influences.

The next reporting period will establish whether the record-low loss rate can be sustained as the loan book continues expanding. Further evidence of statutory profitability would also strengthen the turnaround case, particularly after FY26’s reported loss. Consistent operating cash generation and disciplined funding would provide additional confirmation that growth is financially sustainable. The company’s FY27 guidance remains achievable under management’s assumptions, but the September result alone does not establish that the upper end will be reached.

Key takeaways from MONEYME’s first-quarter FY27 lending and profitability update

• MONEYME’s gross loan book increased 36% to A$2.24 billion.
• Quarterly originations rose 40% to A$366 million.
• Gross revenue increased 33% to A$76 million.
• Net credit losses fell to a record-low annualised rate of 2.0%.
• Loans more than 90 days in arrears declined to 71 basis points.
• Risk-adjusted net interest margin improved to 2.9%.
• The operating cost-to-income ratio fell to 21.3%.
• Normalised quarterly net profit after tax reached A$600,000.
• MONEYME retained FY27 normalised profit guidance between breakeven and A$7 million.
• Credit quality, financing costs and statutory profitability remain the principal tests.