The fintech sector is undergoing a clear shift from hypergrowth at all costs to disciplined, sustainable expansion. Recent results from Q2 ’25 show that while global leaders like Visa and Global Payments are seeing expense growth outpace gross profit, firms such as Affirm and Toast prove that high growth can still be achieved with operating discipline. Net profit margins, capital efficiency, and leverage profiles vary widely across the peer set, underscoring the different strategies shaping today’s fintech landscape. Investors continue to reward those delivering both consistent growth and meaningful operating leverage.
1. Fintech Cohort Gross Profit vs. OpEx Growth
(2021 - 2022 and 2023 - 2024; bubble size representative of cohort avg. market cap)
2. Gross Profit vs. OpEx Growth for Select Fintechs
(Q2 2024 - Q2 2025)
3. Fintech Cohort Gross Profit vs. OpEx Growth
(Q2 2024 - Q2 2025)
4. Valuation & Financial Health Metrics
(valuation and financial metrics for 2024 and Q2 2025)
5. Efficiency Index
(2022 vs. 2024 data; index = gross profit growth divided by opex growth; n = 34)
What the Data Suggests
Gross Profit Vs. Opex Growth
- Public fintechs have made meaningful strides towards overall operating expense discipline in 2024, a notable development from the “growth-at-all-costs” attitude prevalent pre-2022.
- The most recent quarterly data suggests this trend is persisting, though some of the largest global fintechs with the most mature margin structures (e.g., Visa, Corpay, and Global Payments) are seeing expense growth outpace gross profit growth.
- Fintechs such as Affirm and Toast demonstrate that hypergrowth (30%+ gross profit growth) can still be achieved with a measured focus on expense discipline.
Net Profit Margins & Other Financial Health Characteristics
- Five companies in the fintech peer set (Figure 4) saw net profit margins eclipse FY’24 benchmarks in the most recent quarter (Q2 ’25, Fiserv, Global Payments, Shopify, Toast, and Affirm) while six have seen net profit margins contract (Paysafe, Worldline, Block, Visa, Payoneer, and Marqeta).
- Including this most recent quarter, SaaS + embedded payments providers like Shopify, Block, and Toast demonstrate strong capital efficiency despite ongoing global expansion efforts (capex less than 2% of revenues).
- Across the cohort, cash flow from operations adequately covers capex requirements, though we observe some instances of operating cash flow coverage being strained in the most recent fiscal year (e.g., Worldline and Fiserv with 48% and 35% of operating cash flow devoted to capex in the most recent quarter).
- Leverage (the use of debt versus equity) varies widely among fintechs, with Diversified Processors and SaaS + Payments providers having the lowest relative leverage. Highly acquisitive companies such as Corpay tend to use debt more to fund acquisitions.
Valuation Multiples
- The market continues to favor companies demonstrating consistent growth and meaningful operating leverage. SaaS + Payments businesses also generally benefit from higher valuations, with Shopify and Toast bearing the highest forward valuation multiples.
Source: Public Company Filings, Press Releases, Flagship analysis
Please do not hesitate to contact Rom Mascetti at Rom@FlagshipAP.com with comments and questions.