It's a bit of a ho-hum result. Positive they've been able to drive to profitability, but now what? They've flatlined active user growth for 12 months now and there's no indication that will be changing. Running a profitable lending business on a cohort of users who have borrowed and repaid multiple times and are probably the low hanging fruit in terms income and employment status doesn't seem that difficult – and I'd hazard probably explains a fair bit of the improving net transaction loss. But what are they going to do, just keep running this at breakeven? The reality is that for a business like this a part of the CAC isn't just marketing spend, it's also NTL. It would be really interesting to see cohort data on NTL's by number of times the product has been used.
What's the deal with Carrington Labs? The unit economics on the lending are very good, so why the distraction of CL? I suspect it's because this is as good as it gets for the lending for the reasons given above.
Running the lending at breakeven and into that they are going to ramp up opex for CL so don't expect an improvement in the P&L picture over the next few periods.
All in all, it's hard to see any catalyst that gets the SP moving from here.
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