In a year that saw Egypt’s macroeconomic stability severely tested — the pound plummeting and inflation biting deep — Cairo-listed financial technology firm Fawry (FWRY.CA) has delivered a financial performance of striking resilience. While the Egyptian economy navigated a turbulent 2024, marked by a near 40% devaluation of the local currency against the dollar and persistent double-digit inflation, Fawry announced annual results that defied the prevailing pessimism.
Revenues for the year jumped 68.4% year-on-year to $108.8 million (EGP 5.5bn), but it is the surge in profitability that has truly caught the eye. Net profit for 2024 exploded 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, initially focused on alternative digital payments (ADP) — encompassing point-of-sale (POS) systems and merchant networks that are ubiquitous across Egypt — has strategically diversified its revenue streams, a move now demonstrably bearing fruit. While the ADP segment itself continued to expand, growing by a robust 34.7%, its contribution to overall revenue has intentionally diminished to 31% from nearly 39% the year prior. This is not a sign of weakness in its core business, but rather an indication of the burgeoning success of its newer ventures.
The real engines of growth are now Fawry’s banking and financial services divisions. Banking revenues witnessed a dramatic 83.3% upswing, reflecting the company’s deepening integration with traditional financial institutions and its role in facilitating digital transactions within the established banking sector. Even more impressively, financial services targeted at Egypt’s large, yet often underserved, Small and Medium Enterprise (SME) sector and the broader consumer market, experienced a meteoric 137.7% revenue expansion. This surge is attributed to the successful launch and scaling of SME lending products and consumer-focused ‘buy now, pay later’ (BNPL) offerings, tapping into unmet demand in a market where access to traditional credit remains constrained for many. 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.
“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. This pivot towards financial services is not merely opportunistic; it is a strategic evolution towards building a more comprehensive and resilient financial ecosystem.
The impressive profitability metrics indicate this strategic success. Operating earnings before interest, taxes, depreciation, and amortization (EBITDA) nearly doubled to $54.2 million, delivering an enviable EBITDA margin approaching 50%. Analysts are scrutinizing 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.
While Fawry is demonstrably flourishing, the broader macroeconomic picture remains challenging. Egypt’s vulnerability to external economic shocks, persistent inflationary pressures, and the ongoing need for currency adjustments present significant headwinds for all businesses operating within the country. The rapid expansion of Fawry’s loan book, while fueling revenue growth, also introduces inherent credit risks, particularly within the SME and consumer segments, which are often more susceptible to economic downturns. Default rates will be a critical metric to monitor in the coming quarters.
Competition in Egypt’s nascent fintech sector is also intensifying. While Fawry currently enjoys a leading position and a significant first-mover advantage, it is facing increasing pressure from both nimble domestic rivals and potentially larger international players seeking to tap into the Egyptian market’s growth potential.
Despite these caveats, Fawry’s 2024 results offer a compelling narrative of resilience and strategic execution in the face of considerable economic adversity. The company has demonstrably tapped into the growing demand for digital financial services in Egypt, leveraging its established infrastructure to diversify into higher-growth, higher-margin business lines. Whether Fawry can maintain this exceptional trajectory in the face of ongoing macroeconomic uncertainties and intensifying competition remains an open question.
However, for now, the Cairo-based fintech stands as a notable bright spot in the Egyptian economy, demonstrating the transformative potential of digital finance even amidst considerable economic turbulence.