I'll start by noting that we have introduced some additional metrics to our disclosures and to our presentation this time. These are industry-standard metrics that many of our peers and other digital lenders report, Cash NPAT being the most notable of those. We've had requests from a number of you to provide those similar metrics in order to make it easier to compare our performance to that of other listed companies in that digital lending space. Of course, all of our statutory metrics are still available as we have always presented them.
Before I hand it over to Laavanya to talk through some of the specifics around the numbers, I will just step back a little bit and talk about what made FY 2026 such a remarkable year for Beforepay Group. As you can see from these numbers, it was a year of very strong performance, I think by a wide margin, the strongest year we've had with records on the top line, records on the bottom line, terrific margins, very strong credit performance. It was a really remarkable, genuinely transformative year that I think has rebased the business for FY 2027 and beyond.
There are really two big things that happened this year. The first one is we moved through a repricing of that Pay Advance product. We used to charge a flat 5% fee, and we've introduced an interest component to that, which takes the average price to the consumer into the mid to high sixes, just under 7% of the amount originated. It's a relatively modest increase for the consumer, and indeed, we haven't seen any meaningful shifts in customer behavior off the back of that. That obviously flows through to the bottom line, and that's had a significant impact on the financials of the company.
The second thing that happened this year was we introduced Personal Loans previously, but FY 2026 was the year when we genuinely began to scale those. Without stealing Laavanya's thunder, originations were up several hundred percent from FY 2025. We'll talk more about that and the outlook for Personal Loans as we go. Those two changes, in addition to a number of other things we did, both delivered that breakout performance that we had this year as well as set us up for a very strong FY 2027. I'll come back to FY 2027 at the end of this presentation. Laavanya will take us through the numbers.
Thanks, Jamie, and good morning, everyone. Our Cash NPAT was AUD 15.7 million, which was 57% up on the prior year. I'll jump into a bit more detail on that in a few slides later on. Our total advances for the year were AUD 963 million, which was up 19% on AUD 807 million in FY 2025. This was driven by the Pay Advance average advance size increasing during the year, as well as Personal Loan really scaling, and are starting to see that in our advance number.
Those contributed to the revenue increase as well as the repricing that Jamie mentioned earlier, which drove our revenue number up to AUD 50.6 million, which was up 26% on the AUD 40.3 million in FY 2025.
Net bad debts, which is a new metric included and is calculated as the receivables written off divided by total advances, was 0.5% for the year, which was up on 0.2% in FY 2025. This increase was due to the inclusion of the Personal Loan product, which, as planned, has a higher net bad debt compared to the Pay Advance product, as well as an exceptionally low Pay Advance net bad debt in the prior year. The Cash NPAT per FTE was AUD 314,000, which was an increase of 35% on the prior year. This is due to increased profitability as well as continued operational efficiencies that we have had.
I think, just to pause on that is a metric we are very proud of. That would be one of the highest profitability per employee figures that you would find. It stems from the fact that we are an incredibly lean business, issuing more than 2 million loans last year with about 50 people.
We also announced during the year or just after the year that we have a new AUD 100 million debt facility, which was executed in July. This is up from the AUD 55 million facility that we had previously, and it has got significantly improved rates on that of around 3%-4% compared to the previous facility. Based on a AUD 40 million facility, for a year, we would save over AUD 1 million. Jumping into the Cash NPAT, you can see we had a 57% increase from AUD 10 million in the prior year up to AUD 15.7 million.
In the last two years, we have actually increased our Cash NPAT by four times. This is a record for us in terms of our profitability and continues to show how the underlying economics of the business are really pulling through.
I feel compelled to just clarify in the spirit of not issuing forecasts, we are not promising to double profitability every year into the indefinite future. It is pleasing that we have been able to do it for the last couple of years.
Looking at our Pay Advance product, you can see that our advances have increased by 18%, from AUD 805 million up to AUD 946 million. As I mentioned earlier, the average advance size for Pay Advance was a contributing factor for why that happened, and that increased from AUD 390 up to AUD 450, which was a 15% increase.
The net bad debts increased from FY 2025 from 0.2% up to 0.4%. As we've mentioned in the past, our FY 2025 number in particular was low, and we continue to optimize our average advance size and our net bad debts to ensure that we maximize our profitability. This 0.4% is well within our planning. On our Personal Loans, you can see that advances have increased by 728% from AUD 2 million last year up to AUD 16.9 million in FY 2026.
The average advance size for Personal Loans was AUD 3,124, and around 57% of our loans that originated in Q4 were 12-month loans. We're certainly seeing that our customers are opting for longer-term loans when they're eligible. Our net bad debts for Personal Loans was 3.3%. As we mentioned previously, the unit economics for a Personal Loan is different from a Pay Advance, so this 3.3% is up on the Pay Advance product, but certainly within our expectations.
Here we've got a reconciliation from our statutory NPAT to our Cash NPAT, showing that the revenue increase that we've generated has been able to flow through to our profitability metrics. Again, you can see the underlying economics of the business are very strong.
On our balance sheet, we have a very healthy balance sheet, as we say in all the four Cs, but you can see that our loan book through our receivables line has increased, driven by that average advance size and advances increasing on the Pay Advance product, as well as Personal Loans scaling significantly during the year. Our equity position, very healthy, AUD 48.9 million, which is a 25% increase on the prior year.
Turning to the outlook from here. I'll start by saying, and I think this is a really important point, that if we did nothing different from where we are right now, FY 2027 would still be a dramatic uplift on FY 2026. The reason for that being these big changes that we put through last year, the scaling of the Personal Loan and the repricing of the Pay Advance, they occurred over the course of the year.
The repricing in particular wasn't completed until partway through the fourth quarter of the year. These very strong FY 2026 numbers that you see in this presentation only represent a relatively small fraction of the benefit that we expect to get in FY 2027.
Those of you that joined us for the Q4 webinar would have heard us say, and I think we've said it again in this release, that the actual interest realized on Pay Advances in FY 2026 was less than AUD 2 million. If we had been charging it at the exit rate, it would have been AUD 12.5 million. There's obviously a tremendous upside just from kind of running the business through FY 2027 the way that we finished FY 2026.
Now, of course, we don't plan to stand still. We have a number of things that we're pretty excited about, so I'll just talk through our plans for the coming year and the things that we're thinking about on this page. The first one is optimizing Pay Advance limits.
Again, those of you that have been with us for a while have probably heard me talk about the way that we think about the intersection of revenue and risk and defaults in such a way that we are able to optimize the best limit for any individual customer by looking at that elasticity of default and figuring out what's the loan offer of everything we could offer them with the highest expected value, and then making that offer.
That's been something that's been tremendously productive for us over the years, partially because of the repricing, but also because we've got a new generation of significantly powerful risk models coming online over the course of calendar year 2026.
As those things happen, that actually means that we have an opportunity to go back and look at those limits, and because essentially you skew that kind of marginal contribution curve further to the right, we then have an opportunity to raise limits. I think we'll be doing that work in the coming months as these new models bed down. What you should expect to see off that is probably an increase in that average advance size and probably an increase in net bad debts. Although again, we don't make forecasts.
The second thing that we're thinking about are the Personal Loan risk models. We're now at that exciting part of the. We're starting that virtuous circle whereby by originating more loans, we then get more data. That enables us to train sharper models.
That enables us to put more offers out there because we only ever put out an offer where we see it as a positive expected value thing to do. Then those more offers obviously lead to more loans, leads to more data. That's what has driven the Pay Advance business to the levels of success we see now, and we are starting that process with the Personal Loan. Something I'm personally very excited about is watching that data come in from these new cohorts of loans we're issuing, and then the ability to retrain ever sharper models and then again, expand eligibility and limits off the back of that.
Those models empower the third thing on this page, extend the Personal Loan product range. As you heard me say earlier, and have heard me say many times before, we started with AUD 3,000 three-month loans.
We've moved them up to AUD 4,000- AUD 5,000. We've moved from three months to 6- 12. We certainly don't expect to stop there. We expect that durations will continue to extend. We expect that limits will continue to extend. When you pencil out the multiplier effect of putting out money for two years instead of one, three years instead of two, when you move from AUD 5,000 to AUD 10,000 to AUD 15,000, you can see the well, how that flows through the economics of the business, and it's very significant.
I think we are now at the beginning of that virtuous cycle with data and issuance that will allow us to keep moving on that. The last one, you can see there's a lot of focus on Personal Loan in FY 2027, is building out our distribution for Personal Loan. Many of you would have seen the release we put out recently that we crossed over 2 million registrations. We do have a large and loyal installed user base, and that's obviously a great opportunity for us with the Personal Loan product. People that we know well, we understand their risk. They like us from the Pay Advance product.
We do also offer the loan to new-to-group customers, people who Pay Advance isn't something that they would use as their first product. They would go straight to a Personal Loan. We're offering that now, and I think we will look to build out our path to those customers, looking at new channels and in line with our expected value mindset, increasing how we market to those customers.
Finally, beneath all of this, of course, is always the continued investment in Carrington Labs. This is really one of the distinctive things about the company is our IP around credit risk management, and that capability continues to get stronger. It has driven the successes in the lending business. It will drive this next generation of risk models that I think will be pretty meaningful and, of course, continues to be an externally facing client offering as well.
Again, even just from that run rate effect of running FY 2027 the way that we exited FY 2026, even just from that, there is very significant uplift in the business, and we do expect a very strong FY 2027. In addition, we do think that the initiatives on this page will accelerate the business even further and faster. We are, I personally am very excited about where we're going to be in FY 2027 and beyond.
Again, as always, for those of you that are new, we're delighted to have you joining us at what feels like just the right time. For those of you that have been with us for a while, we're delighted that we're in a position to reward you for the time that you've spent with us over the recent years. With that, thank you very much, and we are happy to move to your questions.
All right. Thank you, Jamie and Laavanya. We will now move to the Q&A session. As a reminder, if you would like to ask a question, please use the Q&A function on your screen. Your first question is in relation to Personal Loan. Larry Gandler has asked, "The ECL of AUD 3.6 million seems high relative to the AUD 17 million Personal Loan originations and only 3.3% of write-offs. Can you help me understand?"
I think there are a couple of things going on there. One of them is, FY 2026 was still a year of some experimentation in terms of writing loans that, as the risk models mature, will probably, you would not write on a commercial basis. In terms of eligibility limits, who we are extending what to, we definitely kind of pushed the boat out a fair ways in order to get kind of a richer data set around that. I think also, in the absence of kind of really seasoned, tenured cohort performance, as many of you know, we tend to take a cautious approach to these sorts of things.
The final thing I would mention is quite just a kind of technical accounting thing, which is that the way that we are required to account for Personal Loan is at the moment of writing a Personal Loan, we take the expected 12 months of credit losses, but the revenue is recognized over the life of the loan.
If we write a AUD 5,000 loan on June 30th, then we would be recognizing a few hundred dollars in losses within FY 2026. The revenue from that loan would be, sorry, mental math, so do your own research if this number is important to you, but it would be sort of between AUD 3.50 and AUD 4. We will always see that ECL number in these periods of rapid growth outstrip the longer-term loss rates.
Great. Thank you. Another one from Larry. "Looking at slide 17, gross write-offs as previously disclosed for FY 2024 have changed. In FY 2024, gross write-offs were disclosed at AUD 17.8 million and recoveries at AUD 7.6 million. Is there a change in definition?"
Yes. Previously we were taking the net default, so the expense essentially on the ECL provision, divided by the advances plus the interest and principal. Here, we are taking the net bad debts, so this is consistent with our peers. We are taking our net bad debts written off during the year. The recovery number is unchanged and divided by the total advances. Those numbers at the top, you can match back to our financial statements, including the previous years.
Great. Thank you. Another and final one from Larry . "Has customer behavior in response to Pay Advance price increase noticeably changed since the quarterly result announcement?"
No. As we said in Q4, and I think this answer still holds, because we look at so many different numbers here. When we look at, we have looked at probably a few dozen different numbers in regards to default rate, throughput, reuse rate. We have segmented by customer risk score, by amount size. We have looked at A/B tests and before and after time box control groups.
Again, when you look at dozens and dozen numbers, there are a few where if you squint a certain way, maybe as that one moved, but there has been no meaningful change that has caused us to think that there will be a significant commercial or consumer impact from the change in pricing.
Great. Thank you. One here from Thomas Sima. "Net bad debts ticked up from 0.2% to 0.5% this year, driven primarily by scaling Personal Loan. As Personal Loan growth increases towards a larger portion of the total advances, where do you expect peak bad debt rates to settle, and what is your target non-performing loan threshold?"
I would say a couple of things. First of all, on the 0.5%, there are two things going on there. The 0.2% in FY 2025, as Laavanya noted, that was a low number. At the time, I said that actually I was worried that our defaults were too low, that we were leaving money on the table as we tried to optimize those limits.
We were under-lending. That proved to be the case, as you can see with the increase in the average limits to AUD 450 this year. That has more than compensated for the 0.2%- 0.4% on the Pay Advance side that we saw. Then the 0.4%- 0.5%, that is the impact of Personal Loan. To answer the question, I would say two things.
Yes, as you would expect, as Personal Loan become a larger proportion of the book, the net bad debts across the group are a weighted average between the Pay Advance figure and the Personal Loan figure. That group wide number will get closer to the Personal Loan figure over time. We actually don't run to a specific target. The way that we always think about this, and again, it comes back to that optimization function, is for any given customer, we can model, in fact, this is what we do.
We model out if we gave you a AUD 50 Pay Advance, AUD 100 Pay Advance, all the way up to AUD 2,000 on the Pay Advance, and then if we gave you a AUD 2,500, AUD 3,000, AUD 5,000 Personal Loan, and in due course it will be AUD 8,000 or AUD 10,000 Personal Loan, what do we think is the likelihood that you will take out that loan?
Then what is the expected default rate off the back of that? Then we map our gross units, our net contribution margin with those default models, with those default model default outcomes into that. We find the value of each of those possible offers to us, and we put the highest offer in front of you. The net bad debt rate is an outcome of that process.
Obviously, we will always look to optimize value overall, which means there needs to be ample headroom between the net bad debt rate and the revenue figure minus those funding costs. We don't have a specific target in mind. We will be both.
Okay. A question here from Ali Ahmed. "What are the specific criteria or milestones Carrington Labs needs to hit to remain a strategic priority, and what's the timeline for that assessment?"
First of all, I would just like everybody on the call to know that Ali Ahmed was one of our very first employees and built a lot of the systems that we're using today, and Ali, we're delighted to have you here, and we hope you're doing well.
In terms of the milestones for Carrington Labs, I'd say two things. The first one is, Carrington Labs is absolutely integral to the overall shape, health, and wellbeing of the business. I think everything that you've seen in this presentation is a result of the credit risk capability that's embedded in Carrington Labs. I think the question was probably focused on how do we think about that as an external proposition, because we do offer that externally.
I think what I'd say there is, like everything else, we always think about the expected return on any dollar that we spend. As Carrington Labs has traction in this segment or not in this segment, and as things move through the pipeline, we will adjust the externally facing effort and spend accordingly. We continue to be active with that as an externally facing proposition, and if it looks like actually putting more resource into that will be helpful, then of course we will do that.
If it feels like there's a period where actually we need to let the industry catch up with us a little bit, then we'll probably go a bit quieter for a period of time. We remain absolutely committed to the capability embedded in it, and it will always be a focus for us.
All right. Bit of a change of tack here. A question on the personnel. "It looks like the quality of the team has been increasing. Can you comment on this and if you plan to make additional hires to accelerate growth?"
I, of course, would like to think that the quality of the team is always increasing, and I think we have hired a number of very capable people. We have a big focus on developing our people internally as well. We try to promote internally, and we have brought a number of people up who were relatively junior into much more senior roles. That is of course a big focus. It is very much a talent-driven business, especially on some of the really more difficult technical sides.
Having said that, I think the team has been very capable since inception, so I do not want to cast any aspersions on the past. In terms of hires to support growth, where we see the return on adding cost, we will happily do so.
Every dollar that leaves this business, we always do it if we think it is going to come back with a friend. If, for example, we had a great, say, commercial opportunity with Carrington Labs and we had to spend in order to convert and then implement it, we would do that in a second. With marketing, we do not run to a specific amount of money we want to spend on marketing. We look at the productivity of that, and when the marginal contribution drops below the marginal cost, we stop doing whatever it is.
Where we see opportunities where additional investment will cause us to grow faster, we will absolutely take them. One of the great things about our business is, given the high levels of automation, we have not really added. We have added some headcount to build out. We did a big re-platforming of the business, and we have added some new functionality, but we have not really had to add headcount to deal with the growth in the user base, the number of advances, and so on. We would only add cost if we were confident it is going to be productive.
Great. One here from Luke Alexander. "Hi, Jamie. Congratulations to the team on a fantastic result. Given the changes to your existing models and the upcoming product expansion, how do we not get to a doubling of NPAT next year? Adding AUD 12 million in interest, profitability alone moves the needle towards double significantly. Is this the right way to think about it?"
Well, I think without making a forecast, if you want to add a double-digit number from the impact of the repricing onto the current Cash NPAT, you are pretty close to doubling, and then you will make whatever assumptions you want to about growth. Obviously, we are not forecasting a doubling of profit. It would be certainly nice if we had three years of doubling every year, but we do not have a more specific forecast than that. You are not thinking about it the wrong way. There is no error in the way you framed your questioning at all.
All right. One more from an anonymous participant. "As Personal Loan become a larger part of the receivables book and have a longer duration than Pay Advance, what does this mean for funding requirements, funding costs, and available headroom?"
On the available headroom, as Laavanya noted, we have got that new AUD 100 million debt facility, which we are pretty excited about. We have the equity kind of spare capacity to support the equity slice of that facility. That enables us to meaningfully scale the book. The book is sort of close to AUD 70 million right now.
When you add in some of the spare headroom and the equity slice of the new debt facility, it gets you to double-ish from where we are just in terms of originations. Again, do your own calculations in a way that makes sense to you. Back of the envelope. Now, I would be gravely disappointed if the thing that capped our ongoing growth was an inability to access more debt funding.
I think, given the performance of the business, given the strong unit economics, given our kind of really tight control of credit and how we think about all of that, without kind of assuming anything, I think as we approach that AUD 100 million cap on the debt facility, we will of course be thinking about sources of funding. Again, I would be gravely disappointed if we did not have Assuming the business continues to perform the way it is, if we did not have the ability to keep growing through that with new sources of funding.
Great. All right. Two to go. "Looking at the financial numbers, Beforepay seems to be performing meaningfully better than peers. Can you talk to what you are doing differently and how you are able to achieve these results while others can't?"
I think without reference to any specific peer and what other people can't do, I'll talk about two things that I think we can do. The first one is, and I come out of big banking, and we always heard a lot about automation and straight-through processing. When we would look at the headcount and the variable cost for doing something, there were still lots of people doing things. There were people looking at loan applications, there were people moving stuff through a process. We genuinely do not do that.
We write rough numbers, 40,000 loans every single week, and essentially no human touches any of them. We have a small customer support team that basically sort of has a bit of a help desk flavor for people who need that.
There are no sort of like We don't have loan officers and things like that. The ability to kind of do that loan, first of all, enormously efficient, and second of all, just much better user experience. From the time you download the app, you can have money in your account. If you're fast with typing with your thumbs, it could be five minutes. We usually say 5- 10 minutes. That's just a better user experience, right? That immediate availability and certainty of funding is very competitive.
I think that high level of automation and that real sort of automation first kind of build it and code digital-first mindset is tremendously important. I do think we have a genuinely distinctive capability around credits. Not just around credit, but around credit that is assessed, again, in this fully automated way.
When we look, we take bank transaction data, as many of you would know, and we calculate hundreds of different variables, some of them financial, some of them behavioral, and we just get a much richer picture of the individual in a few seconds. As a result, we are able to make a much sharper tailored offer, which is both very compelling to the customer, but then of course protects us as well. I think those are two genuinely distinctive strengths of the group that are a real competitive moat that others have, for whatever reason, I think not been able to deliver at that same level.
Great. All right. Looks like we've got one last question, again, from an anonymous attendee. It looks like it's on Pay Advance outlook. "With Pay Advance already at significant scale, how much growth remains in the Australian market? Is future growth primarily coming from new customers, increased utilization, or higher advances per customer?"
Yeah, good question. We're definitely not looking to increase the frequency with which people use the product. I think our view, again, we're a mission-driven organization. Our view has always been that people should borrow when they need to, and they will decide what is right for them.
On the Pay Advance side, I think we do continue to add new customers at a reasonable clip. Of course, the average advance size has continued to go up as well. If we step back and look at the landscape of the Australian population, how many people there are, how many people, whether through our market research or in other ways, say that they sometimes need something to bridge between weeks or between a few months, or they couldn't raise AUD 500 in an emergency.
It's a very significant portion of the population, depending on who's asking and the nature of the question. It's often a bit under half. That to me would suggest there's an addressable market of millions and millions of people out there. As to how big Pay Advance gets in the Australian market, I think we will keep growing until we feel like we've reached the limits of it, and I don't think we've reached those limits yet. Now, having said all that, again, I think, if we turn to the Personal Loan side, that one, I think the line of sight to growth is very clear. That's an existing market.
If we look at the size of that market, our right to compete there, our ability to be equally disruptive given our ability to process loans almost instantly for almost no cost, and to do so with a sharper point of view on credit. I think we are just at the beginning of a pretty significant growth journey there.
All right. Thank you, Jamie. That concludes the Q&A session. I will now hand it back to you for some closing remarks.
Well, I'll finish where I started. I do want to thank everybody who's joining us. Again, we do have a lot of new people on this call, and we're delighted that you're interested. Again, it feels like a great time to get to know us, I hope.
Then for those of you that have been with us for a while, then thank you very much for all the years that we've been traveling together on this journey, and I think we have reached a pretty meaningful inflection point with the company. As we've said, FY 2026 was a standout year for us. FY 2027 will be a significantly even better year. I think sets us up not just for a great year in FY 2027, but beyond.
I'm really pleased at how everything we've been working on has really come together, both to deliver this result and to set us up for the future. Thank you again, and we're excited about the year and years that lie ahead.
All right. Thank you, Jamie and Laavanya, and to all the participants. You may now disconnect.