GCASH Revenue rose 10% while operating profit fell 6% as lending took over

Operating Profit Fell While Net Profit Rose, and the IPO Price Asks for 24.6 Times Earnings

GCash's operating profit fell 6.3% in the first half of 2026 even though revenue rose 10.4%, and a 63.4% rise in income below the operating line is the reason net profit still grew 7.3%. Mynt, Inc. (GCash's operator) reported revenue of P43,267.4 million for the six months ended 30 June 2026 (about US$707 million), against P39,185.9 million a year earlier. Costs and expenses rose 17.8%, to P31,993.6 million, so operating profit fell from P12,032.9 million to P11,273.7 million. Net profit rose from P10,089.7 million to P10,824.6 million. The figures come from the final prospectus for the IPO, because GCash listed on the Philippine Stock Exchange on 20 October 2026 and has not yet reported a quarter as a listed company.

Costs Outran Revenue in Every Major Line

Costs and expenses grew 17.8% against revenue growth of 10.4%. Within operating expenses (up 14.9%, to P19,755.7 million), general and administrative expense rose 40.7% to P4,238.9 million, sales and marketing rose 35.5% to P4,189.6 million, and technology and operations rose 20.9% to P11,016.1 million. The provision for credit losses^» rose 29.6% to P7,933.2 million, which is 18.4% of Adjusted Revenues (the company's revenue measure, which excludes some pass-through items), up from 15.6%. The operating margin fell from 30.7% to 26.1% (operating profit divided by reported revenue).

Payments Shrank as a Share of the Business While Lending Took Over

Revenue is reported in segments on an Adjusted Revenues basis. Payment Solutions fell 4.6% to P24,663.9 million, while Digital Financial Services rose 37.8% to P18,367.1 million, of which CreditTech (the lending subunit) was P17,975.0 million, up 38.8%. Payment Solutions was 57.3% of Adjusted Revenues in the first half of 2026, against 66.0% a year earlier. The company says a Bangko Sentral ng Pilipinas (BSP, the central bank) directive of 14 August 2025 ended online-gaming-linked revenues from 16 August 2025; the prospectus text read for this post does not state how much of the first-half comparison that accounts for.

Cash Fell as the Loan Book Grew

Cash and cash equivalents fell 13.5% to P68,625.2 million (US$1,120.8 million) between 31 December 2025 and 30 June 2026, while loan receivables rose 31.1% to P54,088.0 million. Operating cash flow was negative P11,174.6 million in the first half of 2026, against positive P3,558.1 million a year earlier. Cash flow from operations includes loan growth for a lender, so this post leaves free cash flow blank and does not compute a free-cash-flow multiple.

The Prescription

GCash should keep growing lending while holding the provision line steady, because lending is now where the growth is: CreditTech revenue rose 38.8%, and the non-performing loan (NPL^») ratio the company reports fell to 4.9% at 30 June 2026 from 7.5% at 31 December 2025. The provision for credit losses is already 18.4% of Adjusted Revenues, so another year of loan growth at a rising provision share would leave little of the 26.1% operating margin to defend.

What it should stop doing is letting sales and marketing (up 35.5%) and general and administrative expense (up 40.7%) grow roughly three to four times as fast as revenue (up 10.4%). Those two lines added P2,323.6 million of cost year over year (4,189.6 - 3,092.8 + 4,238.9 - 3,012.1), which is about three times the P759.2 million fall in operating profit (12,032.9 - 11,273.7).

Key Financial Metrics

PHP billion; margin is operating income as a percent of net revenue, per half-year. Values are standalone half-years; 1 derived from annual, half-year or nine-month figures (H2 2025).

Six months ended 30 June 2026 vs. six months ended 30 June 2025, in PHP millions, with US$ at the prospectus rate of P61.229 per US$1 (BSP, 30 June 2026), applied to both periods.

Revenue grew because lending and digital financial services grew; the 10.4% total sits between a 4.6% fall in Payment Solutions and growth of 37.8% in Digital Financial Services, which includes CreditTech (Adjusted Revenues basis, 9.8% in total). Operating profit fell because costs and expenses rose 17.8%. Profit before tax was P14,489.7 million, up 3.5% from P14,000.6 million; the gap between profit before tax and operating profit, which is income and expense below the operating line, was P3,216.0 million, up 63.4% from P1,967.7 million. That gap includes interest income from deposits (P2,558.6 million, up 44.7% from P1,768.8 million) and other income, net (P725.7 million, up 162.5% from P276.5 million), which the company says was mainly recoveries of loans previously written off. Tax fell to P3,665.1 million from P3,910.8 million, an effective rate of 25.3% against 27.9% (tax divided by profit before tax), which also helped net profit.

The cash comparison is against the year-end balance (31 December 2025), not 30 June 2025, because the prospectus does not give a June 2025 cash balance. EBITDA is the company's own measure, calculated on Adjusted Revenues, and is not called Adjusted EBITDA in the prospectus. It is P484.7 million above operating profit in the first half of 2026 (11,758.4 - 11,273.7).

Where the First Half of 2026's Revenue Went

Net revenue, and how much of it was left as operating profit and net income, in one view. Figures are the six months ended 30 June 2026, the same as the metrics table.

PHP billion, six months ended 30 June 2026. Operating costs are net revenue less operating income; other items & tax are operating income less net income; this is a net figure, being non-operating income of P3.2 billion less income tax of P3.7 billion (11,273.7 + 3,216.0 - 10,824.6 = 3,665.1).

Key Operational Metrics

Six months ended 30 June 2026 vs. six months ended 30 June 2025, except where noted. Arrow = the way the number moved; green = good for the business, red = bad.

GTV grew 22.6% while Payment Solutions revenue fell 4.6%, which is what a take rate falling from 0.32% to 0.25% produces: more money moved, less earned on each peso. The prospectus attributes the take-rate fall and the Payment Solutions decline to the end of revenues affected by the August 2025 BSP directive (none recognised in the first half of 2026), and says Ongoing Revenues, which exclude them, grew 47.3%. The NPL ratio is not in the table because its comparison date differs: it was 4.9% at 30 June 2026 against 7.5% at 31 December 2025, on the company's own definition (on-book loans more than 90 days past due). Customer acquisition cost (CAC^») was P79.19 for the first half of 2026 against P78.30 for the full year 2025, a different period length, so it is shown for scale rather than as a trend.

Beyond the Usual

Net Profit Rose Only Because Income Below the Operating Line Rose by More Than Operating Profit Fell

Operating profit fell P759.2 million (from P12,032.9 million to P11,273.7 million) while income below the operating line rose P1,248.3 million (from P1,967.7 million to P3,216.0 million), which is why profit before tax rose 3.5% and net profit rose 7.3%. Two items in that line carry the growth: interest income from deposits (P2,558.6 million, up 44.7%) and other income, net (P725.7 million, up 162.5%, mainly recoveries of loans previously written off). A recovery of a written-off loan is a one-time inflow, not a recurring revenue line, so the 7.3% net profit growth is a weaker signal than the 10.4% revenue growth.

The Dividend Declared Before the IPO Equals 46.2% of the Half-Year's Profit, and the Payment Figures Do Not Reconcile in the Text Read

The company declared a dividend of P5,001.2 million on 17 June 2026, with a stated payment date of 30 June 2026; that is 46.2% of first-half net profit (5,001.2 / 10,824.6). The prospectus text read for this post shows cash dividends paid of P2,838.1 million in the half, while dividends payable were still P2,163.1 million at 30 June 2026 even though the stated payment date was that same day; the two figures sum to the declared amount, but the prospectus says only that a portion of the cash dividends remained outstanding and will be released on completion of the required regulatory documentation being processed.

ECPay Was Bought From a Shareholder, and the Group Also Earns Fees From Globe

On 5 August 2025 the group acquired ECPay from Globe Telecom, a shareholder and related party, for P1.5 billion, with P249.9 million of retention payable. Money also flows the other way: the group earns a load service fee from Globe of P1,893.1 million in the half, against P1,702.1 million a year earlier (+11.2%), which is 4.4% of reported revenue, and it earns API fees from related parties (shareholder: P248.2 million against P210.0 million). In both cases the group is the payee on the fee lines and the buyer on the ECPay purchase. ECPay's consolidation from August 2025 also changed how over-the-air prepaid load costs are recorded, which is why reported revenue (P43,267.4 million) exceeds Adjusted Revenues (P43,031.0 million) by P236.4 million.

Four-Fifths of the Offer Proceeds Went to Selling Shareholders, Not to the Company

The offer was 8,027,409,600 shares at P6.60, for gross proceeds of P52,980.9 million. Of that, 6,421,927,700 shares were secondary, so P42,384.7 million (80.0%) went to the sellers and P10,596.2 million to the company, which the prospectus states nets to P9,423.8 million after costs. The public float is 12.07% of 66,895,913,057 post-offer shares (13.87% if the over-allotment option is exercised), under a reduced 12% minimum the Philippine SEC allowed on 3 September 2026. The cash added to the balance sheet is small against the P68,625.2 million already held.

Only 12.07% of the shares trade freely at listing, but the prospectus locks up its three holders of more than 10% each for 180 days from the listing date: Globe Capital Venture Holdings (22,093,982,400 shares, 33.0% of the 66,895,913,057 post-offer shares), Ant International Technologies Singapore (13,999,999,934 shares, 20.9%) and AM 50 Ventures (8,501,438,734 shares, 12.7%). Together that is 44,595,421,068 shares, or 66.7% of the post-offer count, worth about P294.3 billion at P6.60 (44,595.4 million x 6.60). The valuation above is therefore set by a float of roughly one-eighth of the company, with two-thirds of the shares unable to be sold until the lock-up ends; the prospectus also locks up 43,980,637 shares issued under the June 2026 employee plan for 365 days from full payment of their shares.

Cash Held in Trust Covers 76.7% of What GCash Owes Its Users and Partners

At 30 June 2026 the group held P78,819.1 million of cash in trust^{[»](/glossary/#cash-held-in-trust)} against P102,813.6 million of liabilities to partners and users, so trust cash alone covers 76.7% of those liabilities (78,819.1 / 102,813.6); the group's own cash of P68,625.2 million brings total cash on hand to P147,444.3 million. This post nets only the group's own cash against market capitalisation, as it does for other bank-like businesses, so the enterprise value below does not treat customers' money as GCash's own.

The Reported Bad-Loan Ratio Fell From 7.5% to 4.9% in Six Months

The company's NPL ratio (on-book loans more than 90 days past due) was 4.9% at 30 June 2026, against 7.5% at 31 December 2025, while loan receivables rose 31.1% to P54,088.0 million. A lower ratio on a larger book is the harder result to produce, because new loans have not had time to go past due; the comparison is six months apart, not year over year, so it shows direction rather than a trend. The provision for credit losses still rose 29.6% to P7,933.2 million.

The User Base Is Large and Cheap to Add To

MAU rose 11.3% to 41.5 million, and daily active transacting users were 63.6 million for the half, with CAC at P79.19. Payment Solutions GTV rose 22.6% to P9,843.5 billion, so the user base is moving more money even as the take rate falls. The comparison that matters for a lender is how much of that base borrows: Active Borrowers were 7.5 million at 30 June 2026 against 7.2 million a year earlier (up 4.0%), or 18.1% of MAU, so CreditTech revenue grew 38.8% on a borrower base that grew 4.0%.

Borrowings Are Small Against Equity

Notes payable were P23,250.0 million (P21,850.0 million plus P1,400.0 million) against total equity of P74,117.9 million at 30 June 2026, and total assets were P237,762.3 million. Adding the notes to the enterprise value below would raise it about 6.2% (23,250.0 / 372,887.8), which does not change the conclusion.

Target Valuation Range

GCash priced its IPO at P6.60 per share, and that price is the basis for the market-value figures in this section because 30 June 2026, the period end, is before the shares began trading on 20 October 2026. At P6.60 the market values the company at about 24.6 times what it earned over the last twelve months, which sits inside the range of the three peers below, on a business whose operating profit just fell.

With 66,895,913,057 shares outstanding after the offer (the post-offer count in the prospectus, not a weighted average) and the P6.60 offer price:

*Enterprise value nets only the group's own cash against market capitalisation, as the Robinhood post does, because liabilities to partners and users (P102,813.6 million) are 62.8% of total liabilities (P163,644.4 million, being total assets of P237,762.3 million less equity of P74,117.9 million) and the cash held in trust is excluded. The P23,250.0 million of notes payable is real debt; adding it back would raise enterprise value to P396,137.8 million, about 6.2% higher. Net primary proceeds from the IPO (P9,423.8 million) are not netted; doing so would lower enterprise value by about 2.5%.

Trailing-twelve-month (TTM) figures are the full year 2025 plus the first half of 2026 less the first half of 2025:

Price to book on the pro forma post-offer equity of P84,714.2 million is 5.2x (441,513.0 / 84,714.2). The prospectus shows net tangible book value per share of P1.12 before the offer rising to P1.24 after it, so buyers at P6.60 pay P5.36 per share (6.60 - 1.24) above it.

Peer-multiples comparison. The peer cells below are taken from that peer's own latest post on its own stated basis. Enterprise value is not defined the same way across the three: Robinhood nets cash only, SoFi's counts deposits, and Nu's is on its own basis, so the revenue multiples are not like for like and the earnings multiple is the cleaner comparison.

Verdict: at the IPO price GCash costs 24.6 times trailing profit, above Nu (17.9x) and below SoFi (27.6x) and Robinhood (51.1x), on a business whose operating profit fell 6.3% in the latest half.

Share count basis: 66,895,913,057 post-offer shares. Revenue basis: reported revenue, P83,924.6 million on a trailing-twelve-month basis, not Adjusted Revenues. Price basis: the P6.60 offer price, not a market close.