Image Credits: Fawry
Amidst the turbulence of Egypt’s macroeconomic instability that saw the Egyptian pound plummet and inflation shoot to the skies, Fintech company Fawry has shown exceptional resilience, a result evinced by its financial performance. Like the biblical Goshen, Fawry has remained untouched by Egypt’s economic crisis that saw the nation’s currency devaluate by 40%. It has even thrived in the process.
Revenues for the year leaped by 68.4% year-on-year to $108.8 million. However, the eye-catching aspect of this growth is in the profitability. Net profit for 2024 grew by 124.6% to $31.7 million (EGP 1.6bn), more than doubling the previous year’s figure and highlighting a remarkable ability to not just weather, but thrive amidst economic headwinds. In the final quarter alone, net profit surged by almost 119%, reaching $9.9 million. The company’s adjusted net profit margin, a closely watched metric of underlying profitability, landed at a healthy 30%, a figure many global fintechs would envy in far more benign economic climates.
Fawry’s double pivot of banking and financial services have proven to be engines of growth for the company. The fintech company initially focused on alternative digital payments (ADP), that included POS systems and merchant networks. Later, it strategically multiplied its revenue streams, a move that, in hindsight, turned out to be a masterstroke.
Banking revenues rose by a dramatic 83.3% as the company deepened its integration with traditional financial institutions and increasingly facilitates digital transactions within the established banking sector. Financial services that focused on Egypt’s large demographic of SMEs experienced a 137.7% revenue expansion. The successful launch and scaling of SME lending products and the “buy now, pay later’ (BNPL) offerings have being largely responsible for the surge in profitability.
Credit extended to SMEs and individual consumers more than doubled, exceeding $61.2 million, a figure 2.6 times greater than the previous year. In the hotly contested BNPL arena, Fawry’s portfolio has surpassed $19.8 million, indicating a significant foothold in this rapidly expanding consumer finance segment. The ADP segment has continued to grow, with its current growth at 34.7%. However, its contribution to overall growth has reduced from last year 39% to 31%. This indicates the success and growth of its other ventures.
“Our banking services remain the primary driver of revenue growth, reflecting our commitment to diversifying income sources and enhancing financial inclusion,” stated CEO Ashraf Sabry, in the earnings release.
Operating earnings before interest, taxes, depreciation, and amortization (EBITDA) nearly doubled to $54.2 million, bringing about an EBITDA margin approaching 50%. Analysts are still trying to determine whether these margins reflect sustainable operational efficiencies and pricing power, or are partially attributable to aggressive, and potentially short-term, cost management measures. Fawry’s growth trajectory is inextricably linked to Egypt’s ongoing, albeit uneven, digital transformation and the drive towards financial inclusion. The total value of payments processed via its platform surged by almost 73% to a staggering $11.9 billion in 2024.
