FlexShopper, Inc. Reports 2024 Fourth-Quarter and Year-End Financial Results
Ongoing DTC and B2B growth strategies drove a 19.5% year-over-year increase in annual revenue
Operating income for 2024 increased 66% to $22.8 million, and adjusted EBITDA increased 43.1% to $33.3 million, as a result of higher revenue, controlled expenses and favorable asset quality
BOCA RATON, Fla., April 23, 2025 (GLOBE NEWSWIRE) -- FlexShopper, Inc. (Nasdaq: FPAY) ("FlexShopper"), a leading national online lease-to-own ("LTO") retailer and payment solution provider for underserved consumers, today announced its unaudited financial results for the quarter and full year ended December 31, 2024.
Russ Heiser, Jr, Chief Executive Officer, stated, "As expected, 2024 was a transformative year for FlexShopper highlighting the successful technology investments we made over the past two years and the progress of our DTC and B2B growth strategies. During 2024, we grew our market share and expanded FlexShopper's LTO offerings to 7,900 locations, a 250% increase. In addition, 2024 was the first year of our retail revenue strategy on our flexshopper.com marketplace, which added incremental revenues and profits to our model. The success of our growth strategies generated $22.8 million of operating income, a 66% year-over-year increase.
"We pursued opportunities that leverage our expanding financial performance to improve our balance sheet. This included raising $12.2 million in proceeds since the beginning of November 2024 through the beginning of 2025 through our previously mentioned rights offering. We continue to look for strategic opportunities to repurchase 91% of our series 2 convertible preferred stock at a 50+% discount to its liquidation preference, which we believe will be highly accretive to FlexShopper's common shareholders," Mr. Heiser continued.
"We expect our growth strategies to continue to drive positive momentum in 2025, and for the first quarter of 2025, lease originations increased 49.7%, relative to the same period in 2024. In addition, we believe profitability will improve further in 2025 as we benefit from higher sales on flexshopper.com, stable operating expenses and credit quality, and the contribution of payments on leases that were originated in 2024," concluded Mr. Heiser.
Results for the Fourth Quarter Ended December 31, 2024(1) vs. the Fourth Quarter Ended December 31, 2023 (unaudited):
-- Total lease funding approvals increased 65.6% to $142.4 million from $86
million
-- Total revenues increased 17.3% to $35.5 million from $30.3 million
-- Gross profit increased 29.8% to $20.4 million from $15.7 million
-- Gross profit margin increased from 52% to 58%
-- Operating income of $5.8 million, compared with operating income of $5.6
million
-- Adjusted EBITDA(2) increased by 5.7% to $8.6 million from $8.2 million
-- Net loss attributable to common stockholders of ($1.9) million, or
($0.09) per diluted share, compared to net loss attributable to common
stockholders of ($715) thousand or ($0.03) per diluted share
Results for the Twelve Months Ended December 31, 2024(1) vs. the Twelve Months Ended December 31, 2023 (unaudited):
-- Total lease funding approvals increased 79.3 % to $382.8 million from
$213.5 million
-- Total revenues increased 19.5% to $139.8 million from $117.0 million
-- Gross profit increased 40.3% to $76.7 million from $54.7 million
-- Gross profit margin increased from 47% to 55%
-- Operating income of $22.8 million, compared with operating income of
$13.7 million
-- Adjusted EBITDA(2) increased 43.1% to $33.3 million, compared to $23.2
million
-- Net loss attributable to common stockholders of ($4.7) million, or
($0.22) per diluted share, compared to net loss attributable to common
stockholders of ($8.3) million, or ($0.38) per diluted share
(1() FlexShopper's independent auditor, Grant Thornton LLP, is still in the process of finalizing the review of management's position on the lease classification of the lease portfolio and whether it meets the definition of an operating lease. Management believes that, regardless of Grant Thorton LLP's determination regarding this classification, there will be no material impact to FlexShopper's gross profit or net loss.
(2() Adjusted EBITDA is a non-GAAP financial measure. Refer to the definition and reconciliation of this measure under "Non-GAAP Measures".
2025 Forward Guidance
FlexShopper remains committed to executing its strategic plan, which centers on scaling its lease and loan business while maintaining strong asset performance and capitalizing on the growing opportunity within the online retail space. This strategy has already begun to deliver meaningful results.
Throughout 2024, FlexShopper achieved consistent year-over-year revenue growth, driven by improving asset quality and a reduction in bad debt. Additionally, FlexShopper enhanced product margins, which has had a material positive impact on its income statement. FlexShopper is also realizing operating leverage across both marketing and general expenses, contributing to improved overall efficiency.
As a result of these disciplined efforts, the company generated significant year-over-year EBITDA growth in 2024. Building on this momentum, FlexShopper anticipates continued progress in 2025, with the following performance expectations:
-- 2025 full year gross profit between $90 million and $100 million which is
a 17% to 30% increase from 2024
-- 2025 full year adjusted EBITDA of $40 million to $45 million which is a
20% to 35% increase from 2024
10-K Filing and Nasdaq Compliance
FlexShopper plans to issue audited financial results as soon as it receives approval from Grant Thorton LLP. As a result of the delay in the audit, the Company received a notification from Nasdaq on April 17, 2025 that it is no longer in compliance with Nasdaq's listing rules. The Company intends to file the Form 10-K as soon as practicable and, if necessary, to submit a plan with Nasdaq to regain compliance. If Nasdaq accepts the Company's plan, then Nasdaq may, at its discretion, grant the Company up to 180 days from the prescribed due date for filing the Form 10-K, or until October 13, 2025, to regain compliance. This notification has no immediate effect on the listing of the Company's common stock on Nasdaq.
About FlexShopper
FlexShopper, Inc. is a leading national financial technology company that offers innovative payment options to consumers. FlexShopper provides a variety of flexible funding options for underserved consumers through its direct-to-consumer online marketplace at Flexshopper.com and in partnership with merchants both online and at brick-and-mortar locations. FlexShopper's solutions are crafted to meet the needs of a wide range of consumer segments through lease-to-own and lending products.
Forward-Looking Statements
The consolidated financial statements and related information contained in this press release for the year ended December 31, 2023, are audited. For the year ended December 31, 2024, they are unaudited and, although we believe they accurately reflect the values of each item, no assurance thereof can be given, or that our independent auditor may not adjust one or more of such values to be set forth in our completed 2024 audited consolidated financial statements. Grant Thornton LLP has not audited or reviewed, in accordance with standards established by the American Institute of Certified Public Accountants, any of the 2024 financial or other information contained in this press release.
All statements in this release that are not based on historical fact are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as "believe," "expect," "may," "will," "should," "could," "seek," "intend," "plan," "goal," "estimate," "anticipate," or other comparable terms. Examples of forward-looking statements include, among others, statements we make regarding expectations of lease originations, the expansion of our lease-to-own program; expectations concerning our partnerships with retail partners; investments in, and the success of, our underwriting technology and risk analytics platform; our ability to collect payments due from customers; expected future operating results and expectations concerning our business strategy. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including, among others, the following: our ability to obtain adequate financing to fund our business operations in the future; the failure to successfully manage and grow our FlexShopper.com e-commerce platform; our ability to maintain compliance with financial covenants under our credit agreement; our dependence on the success of our third-party retail partners and our continued relationships with them; our compliance with various federal, state and local laws and regulations, including those related to consumer protection; the failure to protect the integrity and security of customer and employee information; and the other risks and uncertainties described in the Risk Factors and in Management's Discussion and Analysis of Financial Condition and Results of Operations sections of our Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q. The forward-looking statements made in this release speak only as of the date of this release, and FlexShopper assumes no obligation to update any such forward-looking statements to reflect actual results or changes in expectations, except as otherwise
required by law.
FLEXSHOPPER, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
December 31, December 31,
2024 2023
------------- ---------------
ASSETS
CURRENT ASSETS:
Cash $ 10,402,637 $ 4,413,130
Lease receivables, net 72,191,028 44,795,090
Loan receivables at fair value 54,330,006 35,794,290
Prepaid expenses and other assets 4,433,570 3,300,677
Lease merchandise, net 29,358,305 29,131,440
----------- -----------
Total current assets 170,715,546 117,434,627
Property and equipment, net 9,692,396 9,308,859
Right of use asset, net 1,042,954 1,237,010
Intangible assets, net 12,259,413 13,391,305
Other assets, net 2,589,533 2,175,215
Deferred tax asset, net 13,208,652 12,943,361
----------- -----------
Total assets $209,508,494 $156,490,377
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 5,589,866 $ 7,139,848
Accrued payroll and related taxes 467,596 578,197
Promissory notes to related
parties, including accrued
interest, and net of unamortized
issuance costs of $191,163 at
December 31, 2024 10,730,853 198,624
Accrued expenses 6,955,810 3,972,397
Lease liability - current portion 287,412 245,052
----------- -----------
Total current liabilities 24,031,537 12,134,118
----------- -----------
Loan payable under credit agreement
to beneficial shareholder, net of
unamortized issuance costs of
$1,007,182 at December 31, 2024
and $70,780 at December 31, 2023 143,934,508 96,384,220
Promissory notes to related
parties, net of unamortized
issuance costs of $649,953 at
December 31, 2023 and net of
current portion -- 10,100,047
Loan payable under Basepoint credit
agreement, net of unamortized
issuance costs of $54,496 at
December 31, 2024 and $92,963 at
December 31, 2023 7,358,109 7,319,641
Lease liabilities, net of current
portion 1,034,166 1,321,578
----------- -----------
Total liabilities 176,358,320 127,259,604
STOCKHOLDERS' EQUITY
Series 1 Convertible Preferred
Stock, $0.001 par value -
authorized 250,000 shares, issued
and outstanding 170,332 shares at
$5.00 stated value 851,660 851,660
Series 2 Convertible Preferred
Stock, $0.001 par value -
authorized 25,000 shares, issued
and outstanding 21,952 shares at
$1,000 stated value 21,952,000 21,952,000
Common stock, $0.0001 par value -
authorized 100,000,000 shares at
December 31, 2024 and 40,000,000
shares at December 31, 2023,
issued 25,138,251 shares at
December 31, 2024 and 21,752,304
shares at December 31, 2023 2,515 2,176
Treasury shares, at cost- 527,222
shares at December 31, 2024 and
164,029 shares at December 31,
2023 (563,991) (166,757)
Additional paid in capital 46,911,459 42,415,894
Accumulated deficit (36,003,469) (35,824,200)
----------- -----------
Total stockholders' equity 33,150,174 29,230,773
----------- -----------
$209,508,494 $156,490,377
=========== ===========
FLEXSHOPPER, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the year ended
December 31,
------------------------------
2024 2023
-----------
Revenues:
Lease revenues and fees, net $106,959,906 $ 91,943,729
Loan revenues and fees, net of changes
in fair value 28,539,495 25,031,278
Retail revenue 4,301,331 -
----------- -----------
Total revenues 139,800,732 116,975,007
----------- -----------
Costs and expenses:
Depreciation and impairment of lease
merchandise 56,634,623 56,288,128
Loan origination costs and fees 3,063,012 6,007,598
Cost of retail revenue 3,383,704 -
Marketing 8,571,696 7,620,795
Salaries and benefits 16,977,744 12,499,099
Operating expenses 28,391,424 24,547,729
Net change in fair value of promissory
note related to acquisition - (3,678,689)
----------- -----------
Total costs and expenses 117,022,203 103,284,660
----------- -----------
Operating income 22,778,529 13,690,347
Interest expense including
amortization of debt issuance costs (22,136,448) (18,913,773)
----------- -----------
Income/ (loss) before income taxes 642,081 (5,223,426)
Income taxes (expense)/ benefit (821,350) 989,809
----------- -----------
Net loss (179,269) (4,233,617)
----------- -----------
Dividends on Series 2 Convertible
Preferred Shares (4,514,001) (4,103,638)
----------- -----------
Net loss attributable to common and
Series 1 Convertible Preferred
shareholders $ (4,693,270) $ (8,337,255)
=========== ===========
Basic and diluted loss per common
share:
Basic $ (0.22) $ (0.38)
=========== ===========
Diluted $ (0.22) $ (0.38)
=========== ===========
WEIGHTED AVERAGE COMMON SHARES:
Basic 21,534,674 21,705,406
=========== ===========
Diluted 21,534,674 21,705,406
=========== ===========
FLEXSHOPPER, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2024 and 2023
(unaudited)
2024 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (179,269) $ (4,233,617)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Depreciation and impairment of lease
merchandise 56,634,623 56,288,128
Other depreciation and amortization 9,607,044 7,881,110
Amortization of debt issuance costs 1,166,302 571,538
Amortization of discount on the
promissory note related to
acquisition - 236,952
Compensation expense related to
stock-based compensation 888,380 1,677,708
Provision for doubtful accounts 34,333,462 42,505,647
Deferred income tax (265,291) (929,533)
Net change in fair value of promissory
note related to acquisition - (3,678,689)
Net changes in the fair value of loans
receivables at fair value (17,046,488) (10,217,854)
Changes in operating assets and
liabilities:
Lease receivables (61,729,400) (51,760,694)
Loans receivables at fair value (1,489,228) 7,356,068
Prepaid expenses and other assets (1,254,627) 177,169
Lease merchandise (56,861,488) (53,869,127)
Purchase consideration payable
related to acquisition - 208,921
Promissory note related to
acquisition - 283,266
Lease liabilities (46,395) (30,268)
Accounts payable (1,549,982) 627,905
Accrued payroll and related taxes (110,601) 267,377
Accrued expenses 2,956,805 (26,527)
----------- -----------
Net cash used in operating activities (34,946,153) (6,664,520)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment,
including capitalized software costs (6,728,218) (6,335,276)
Additions of intangible assets (643,080) -
Purchases of data costs (1,779,976) (1,225,983)
----------- -----------
Net cash used in investing activities (9,151,274) (7,561,259)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loan payable under
credit agreement 48,486,690 18,050,000
Repayment of loan payable under credit
agreement - (2,795,000)
Repayment of promissory notes to
related parties - (1,000,000)
Repayment of loan payable under
Basepoint credit agreement - (1,500,000)
Debt issuance related costs (1,605,446) (115,403)
Proceeds from exercise of stock
options - 1,185
Principal payment under finance lease
obligation (4,601) (8,465)
Tax payments associated with
equity-based compensation
transactions (103,487) -
Proceeds from rights offering, net of
transaction costs 3,711,012 -
Purchase of treasury stock (397,234) (166,757)
----------- -----------
Net cash provided by financing
activities 50,086,934 12,465,560
----------- -----------
INCREASE/ (DECREASE) IN CASH 5,989,507 (1,760,219)
CASH, beginning of period 4,413,130 6,173,349
----------- -----------
CASH, end of period $ 10,402,637 $ 4,413,130
=========== ===========
Supplemental cash flow information:
Interest paid $ 20,252,454 $ 17,337,292
Noncash investing and financing
activities
Due date extension of warrants $ - $ 917,581
Non-GAAP Financial Measures
We regularly review a number of metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.
Adjusted EBITDA represents net income before interest, stock-based compensation, taxes, depreciation (other than depreciation of leased merchandise), amortization, and one-time or non-recurring items. We believe that Adjusted EBITDA provides us with an understanding of one aspect of earnings before the impact of investing and financing charges and income taxes.
Key performance metrics for the years ended December 31, 2024 and 2023 are as follows:
2024 2023 $ Change % Change
----------- ----------- ------------ ----------
Gross Profit:
Gross lease
billings and
fees $140,887,693 $131,634,768 $ 9,252,925 7.0
Provision for
doubtful
accounts (34,333,462) (42,505,647) 8,172,185 (19.2)
Gain on sale
of lease
receivables 98,179 2,814,608 (2,716,429) (96.5)
Lease
placement
collections 307,496 - 307,496 -
----------- ----------- ---------- ------
Net lease
billing and
fees $106,959,906 $ 91,943,729 $15,016,177 16.3
Loan revenues
and fees 11,493,007 14,813,424 (3,320,417) (22.4)
Net changes
in the fair
value of
loans
receivable 17,046,488 10,217,854 6,828,634 66.8
----------- ----------- ---------- ------
Net loan
revenues $ 28,539,495 $ 25,031,278 $ 3,508,217 14.0
Retail
revenue 4,301,331 - 4,301,331 -
----------- ----------- ---------- ------
Total
revenues $139,800,732 $116,975,007 $22,825,725 19.5
----------- ----------- ---------- ------
Depreciation
and
impairment
of lease
merchandise (56,634,623) (56,288,128) (346,495) 0.6
Loans
origination
costs and
fees (3,063,012) (6,007,598) 2,944,586 (49.0)
Cost of
retail
revenue (3,383,704) - (3,383,704) -
----------- ----------- ---------- ------
Gross profit $ 76,719,393 $ 54,679,281 $22,423,816 40.3
----------- ----------- ---------- ------
Gross profit
margin 55% 47%
----------- -----------
2024 2023 $ Change % Change
---------- ---------- ------------ ----------
Adjusted
EBITDA:
Net loss $ (179,269) $(4,233,617) $ 4,054,348 (95.8)
Income taxes
expense/
(benefit) 821,350 (989,809) 1,811,159 (183.0)
Amortization
of debt
issuance
costs 1,166,302 571,538 594,764 104.1
Amortization
of discount
on the
promissory
note related
to
acquisition - 236,952 (236,952) (100.0)
Other
amortization
and
depreciation 9,607,044 7,881,110 1,725,934 21.9
Interest
expense 20,970,146 18,105,282 2,864,864 15.8
Stock-based
compensation 888,380 1,677,708 (789,328) (47.0)
---------- ---------- ---------- -------
Adjusted
EBITDA $33,273,953 $23,249,164 $10,024,789 43.1
---------- ---------- ---------- -------
Key performance metrics for the three months ended December 31, 2024 and 2023 are as follows:
Three Months Ended
December 31,
----------------------------
2024 2023 $ Change % Change
----------- ----------- ----------- ----------
Gross Profit:
Gross lease
billings and
fees $ 34,534,844 $ 33,611,362 $ 923,482 2.7
Provision for
doubtful
accounts (8,959,977) (10,381,697) 1,421,720 (13.7)
Gain on sale
of lease
receivables 20,954 10,863 10,091 92.9
Lease
placement
collections 92,112 - 92,112 -
----------- ----------- --------- -------
Net lease
billing and
fees $ 25,687,933 $ 23,240,528 $2,447,405 10.5
Loan revenues
and fees 2,965,564 3,070,646 (105,082) (3.4)
Net changes
in the fair
value of
loans
receivable 5,881,114 3,959,575 1,921,359 48.5
----------- ----------- --------- -------
Net loan
revenues $ 8,846,678 $ 7,030,221 $1,816,457 25.8
Retail
revenue 973,683 - 973,863 -
----------- ----------- --------- -------
Total
revenues $ 35,508,474 $ 30,270,749 $5,237,725 17.3
----------- ----------- --------- -------
Depreciation
and
impairment
of lease
merchandise (13,613,272) (13,394,865) (218,307) 1.6
Loans
origination
costs and
fees (667,232) (1,129,440) 462,208 (40.9)
Cost of
retail
revenue (790,199) - (790,199) -
----------- ----------- --------- -------
Gross profit $ 20,437,771 $ 15,746,344 $4,691,427 29.8
----------- ----------- --------- -------
Gross profit
margin 58% 52%
----------- -----------
Three Months Ended
December 31,
-----------------------
2024 2023 $ Change % Change
--------- --------- -------------- ----------
Adjusted
EBITDA:
Net loss $ (728,416) $ 354,152 ($1,082,568) (305.7)
Income taxes
expense/
(benefit) 605,800 195,438 410,362 210.0
Amortization
of debt
issuance
costs 341,803 194,681 147,122 75.6
Amortization
of discount
on the
promissory
note related
to
acquisition - 59,238 (59,238) (100.0)
Other
amortization
and
depreciation 2,472,471 2,206,179 266,292 12.1
Interest
expense 5,580,802 4,813,168 767,634 15.9
Stock-based
compensation 359,460 341,341 18,119 5.3
--------- --------- --------- -------
Adjusted
EBITDA $8,631,920 $8,164,197 $ 467,723 5.7
--------- --------- --------- -------
The Company refers to Adjusted EBITDA in the above tables as the Company uses this measure to evaluate operating performance and to make strategic decisions about the Company. Management believes that Adjusted EBITDA provides relevant and useful information which is widely used by analysts, investors and competitors in its industry in assessing performance.
(END) Dow Jones Newswires
April 23, 2025 10:15 ET (14:15 GMT)
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