Analysis

What fintechs actually spend their money on

Every company on NeoBase that publishes a real profit and loss account, lined up against the one question a revenue number never answers: once the money is in, where does it go?

Based on 12 audited annual reports and SEC filings, out of 14 companies we hold financials for. Every figure is the company's own reported line, not our estimate.

Who publishes enough to be read

Why these charts are narrower than they look

Two fintechs can run near-identical businesses and publish completely different cost lines. A US-listed group breaks out sales and marketing because its filing template asks for it; a UK bank folds the same spending into administrative expenses and never names it. Put everyone in one table and you are mostly measuring disclosure style.

So the charts below only count a company in a cost theme it actually reports. A missing bar means the company does not publish that line, not that it spends nothing on it. Companies that publish only adjusted or headline figures are left out of the comparisons entirely - their single lump of costs would top whichever theme it happened to land in.

Where the money goes

Each bar is that cost as a share of everything the company took in that year, so a bank and an exchange sit on the same scale. All the theme charts share one axis, which means a bar twice as long really is twice the burden.

Licensed banks pay for deposits before anything else. For Atom Bank and Allica, interest paid to savers is not one cost among several - it is the largest single outflow in the accounts, ahead of staff, technology and marketing combined. That is not inefficiency; it is what a balance-sheet business is. It also means their cost-to-income ratio is answering a different question from a payments company's.

Payments companies pay the networks. For Block - the parent of Cash App - and for PayPal, cost of revenue and transaction expense dominate everything else. Their margin is set less by how much they spend on engineers than by what the card networks and processors take on the way through.

App-first challengers pay engineers and advertising. Chime, Coinbase and Robinhood put a far larger share of income into technology than any licensed bank here does - the banks do not even break the line out - and marketing sits close behind. Gemini tops both categories, but for the opposite reason: its cost lines are large relative to a small income, which is what a 428% cost-to-income ratio looks like from the inside.

Lenders pay for risk. Affirm books more than a quarter of its income against credit losses. No bank in the cohort comes close, because lending against a consumer instalment book is a different risk than lending against a secured SME loan.

Is cost growing slower than revenue?

A cost structure is a snapshot; the more revealing number is which direction it is moving. Every statement prints the prior year beside the current one, so each company can be asked the same question: did the extra revenue outrun the extra cost?

The gap is shown in percentage points - revenue growth minus cost growth. Positive means the business got more efficient as it grew. Negative means it bought its growth. Note this is revenue, not total income: a company can look flat on income purely because a one-off revaluation landed in the prior year.

No comparable prior period published: Kraken.

The banks move in lockstep, and that is the point. Monzo, Allica and Atom all land within half a point of zero: revenue and costs grew at almost exactly the same rate. For a balance-sheet business that is close to mechanical - the biggest cost line is interest paid on deposits, and deposits are what generate the income in the first place. Operating leverage in banking has to come from somewhere other than growing the book.

Two companies converted growth into efficiency outright. Robinhood and Affirm each grew revenue more than 25 points faster than cost, which is what turns a loss into a profit and a profit into a much larger one. Both did it by growing into a cost base that was already built.

Three bought their growth. Coinbase, Chime and Gemini all grew costs faster than revenue - Chime's technology spend tripled, Coinbase's marketing rose by more than half. That is a choice, not an accident, but it is the reason two of the three ended the year further from profit than they started it.

What survives

Cost-to-income is the blunt version of the same story: how much of every unit the company earned was consumed before tax. Above 100% means the year cost more to run than it brought in.

Method and sources

Every figure is transcribed by hand from the primary document - the audited annual report or the SEC filing - and stored as the company reported it, in millions of its reporting currency. Nothing is converted between currencies: a share of income does not need converting, and a cross-currency total would need a rate we would then have to defend.

Themes group differently worded lines that mean the same thing, for instance technology and development, technology, and technology and data analytics. Lines too coarse to classify are left out of the themes rather than swept into overheads. Where a company's rounded lines do not close exactly to its reported bottom line, the diagram is balanced to its own lines and the difference stays under one rounding step.

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