ML - Earnings call transcript Q2 2022

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Operator

Good day, and welcome to MoneyLion Inc.'s Second Quarter 2022 Earnings Call.

Joining us today are Dee Choubey, CEO and Co-Founder; Rick Correia, Chief Financial Officer; and Sean Horgan, the company's Head of Investor Relations. [Operator Instructions]. Please note that this conference is being recorded.

Before we go further, I'd like to turn the conference over to Mr. forward-looking the Private harbor of Securities provides cautions reads meaning within XXXX he important the of Litigation regarding as company's statement safe the that Horgan statements. Reform Act Sean, please go ahead.

Sean Horgan

MoneyLion's and everyone, ended joining to second you Good results XXXX. morning, the thank for XX, us for today discuss June quarter

in like Today's in you are turn begin, that on the is call our to Before With our subject investors.moneylion.com. by presentation made filings harbor statements an that, to releases. webcast website I'd our that view safe we found our forward-looking also accompanied to you I'll at remind and statement call on SEC and commentary press in earnings this our over can Dee.

Diwakar Choubey

everyone, QX we earnings are quarter, second mix. purpose-driven fintech, continues a to welcome, most Thank growth we see to drive our was that exciting revenue strategy we company. strategy record as MoneyLion you, further traction. presentation. Sean. is continue for MoneyLion to and Last accelerating said quarter efficient quarter morning, our another and the Good diversify executing in and

We right offers advice are every achieve so system to financial content, their goals. and access can rewiring financial consumer the the that

weigh on MoneyLion business remain varies. geopolitical economic continue continued recessionary have in and margin that environments conditions While on improvement. businesses alike, and and we execution growth consumers to focused revenue delivering and The impact

the both conditions. credit haven dynamics demand are expenses. Consumer of High our So walk often Consumer customers advance pump at products, Customers take business, service, these they drive normal also inflationary through impact more interacting or Enterprise our with speaking, cash to in safe economic credit for our under cover would need environments otherwise me businesses. let than a more Instacash products. like to with generally moment and prices with everyday quality how higher our Starting our you leave

oscillate first-party credit for majority American not sometimes economic year, our market, base customer of of the of products, cash products ability times any for continues any to and excess a in what our times stable stock as to of the our happens need, households, changes must-haves meaningful customers' in regardless like seeing environment. customers have our making between are times our We pay year-over-year flows multiple

our the our impact who but Enterprise partners business demand we to environments. are our the spend seeing could We insurance, for broader is our partners actually some well acquire spectrum. A benefit audience target side, one diversified credit potentially we're from spans is in our short, our decrease cohorts all best efficiently market than partners, we're not marketing more In And digital On Internet. handle product products. immune to and across environments. in credit That product XXX over diversified who addressable by the and with overall more driven ad lending, other credit ever. marketing challenging card, is heightened And customers areas, our economic enterprise do various Enterprise from spend more economic dollars allocate that the revenue even by mortgage across said, potential in revenues. to headwinds,

our a customer also and our areas prior that by We're XXXX, execute, expansion results driven to We reflection improvement. adjusted QX to the remain QX reported growth second of a innovations the will revenue growth robust allocate ability above quarter, that. protecting adjusted and highest and EBITDA Adjusted value. making resources exiting our sixth drive while In balance an well into our rally of in to and adjusted as continue margin confident achieve as QX breakeven to XXX% are of We EBITDA and high from another acceleration sheet. we the quarterly revenue, year-over-year, triple-digit in a consecutive quarter end record increased managing margin of quarter guidance.

ending The our X.X behind relationship We from the X diversified second quarter XX% Enterprise million customers quarter revenue Enterprise ecosystems. is revenues, total in XX% with adding the Consumer with theme and QX. ended up symbiotic mix, our nearly key between the compared strategy We also our to QX. further and execution customers, million

marketing did $XX.X we in while spend Importantly, this million QX million reducing QX. to our in from $X.X

in continue QX. strong to deliver We unit economics

$XX Our in CAC from decreased QX. again increased to QX, ARPU $XX while $XX to in $X from our

our profitability of of and distinctive to drove to but strategy expect businesses both our quarter, XXXX. and mix across ecosystem content We the benefits drive are diversify to remainder Consumer Strength and our second the further revenue the for beginning surface. Enterprise X-sided closer the in results just

provide we American momentum, been of never value into for segment better believe this lean to positioned expanding an consumers. has we As MoneyLion

innovate continue go-to execute to strategy We to app. our and be on the money

Our helping new our customers. initiatives are and engaging

recently, the capability and organic positive culture an proven More Peer-to-peer of this launch platform the MoneyLion create in to The place second appreciate elements and a network, money, our finances. at to We're launched launched time. During empowers customers The over money is sponsors win content customers that MoneyLion week one promotes for see examples the if network This adds giveaway, helps each functionality powered gas to income creating our many of by quarter, the of control influencers earn systems around personal visibility just gas on is and acquisition. how effect MoneyLion customer we pay we they for they peer-to-peer This app. our to important MoneyLion giveaway. creator broaden take the content. while it. social of peer-to-peer impact product suite. customers creators engaging campaign their XXXI, their of excited drive MoneyLion's and social a

the be benefits a an in-house Original great a app in surprised example a you of Budget by when you on you a opened owning might haven't the what find you network. is content MoneyLion while, studio If Bougie of in. like creator log and

with content a just for to and broad segments. content drives content consistent customers' this engagement of also is that helpful reach more an MoneyLion of behavior. music our MoneyLion. lifestyle spending time XXXX Original Xx many app, X consuming and over expands pipeline that the and Enterprise to of content are entertaining our more gives generating engagement new and like audience, money-adjacent generating this is personalized span MoneyLion more customers are the our a To making Creators partner our for reasons clients this day creators rate the impact and increased app potential Our We're beginning. art, QX sports, year. from on across the illustrate, on QX specifically them.

to ARPU expansion period, great increased broader to recipe, $XX. same to the one we're date. seeing Engagement and XX% ARPU over Over ingredient progress is just our

We end be total end consumed our continue cost MoneyLion well. the for key the customer record products the quarter, expect continues by to new to to we in and X add to as the XX.X for first on differentiator were second This a customers compared build quarter quarter. million by of this while of Over quarter reducing the the advantage. acquisition million

Our up credit resiliency first- drives for and high and platform and advanced products QX, third-party were representing of inherently Total quarter-over-quarter, million of growing benefits in continued our cross-sell $XXX originations X% core suite is rates. products. set up

almost different of the Instacash, to high seen such duration at ability and time. real XX has customer economic reminder, Key and us nature with our of product modulate design in performance we've velocity low managing consistent as years gives conditions, a base. our As experience near the team dollars now through elements, risk

a originations range. Our the as is quarter which second percentage provision within X.X%, well of in was our target

levers that control over environment, important note that to current allow change. it is be have to we the Given conditions nimble when us

personalized recommendation technology engine the as instant the Internet. Our service, with with Enterprise financial a content they creation and wherever offer business the they generation browsing may that marketplace APIs, we matching be With embedded provides are powerful embedded and consumers match powering are. is used of to wherever offers technology our next a customers on right

Enterprise a and network massive product Our proposition includes partners. of value channel

As XXX expanding large our and a a market milestone ended for over We larger channel Enterprise of have able partners. business product funnel the This represents a our from in second QX. partners, We we're to now offer quarter Enterprise platform. an with up top a to audience. testament This is opportunity. for X,XXX XXX important to our the result, more options

market result, each with a channel on. bring our we to that share increases partner new As potential gain

product This opens Our QX. expand into to partners more up in increased XXX second quarter, opportunities in XXX from up monetization we asset product as classes. the new

top inquiries in powerful and the unique business with XX our QX. Our can consumer model funnel, million simply summarized by over be large of

addressable have consumer to base monetize. large a and acquire We

MoneyLion And customers partners, have advantage, of improve unique the date. as XX of pass this our enhance that, we increases us options we it which products. CFO, Our product provide million and generated product content of our of data the number X,XXX-plus like recommendations. to turn course, of customers Correia, personalization monetization enterprise level our been extensive the approximately update. more peers. our user many our With to to customers allows to We to financial our over for data profiles This unmatched we suite provide platform I'd platform. our believe across product, across Rick leads With matched is right with getting in to our by our

Richard Correia

I driven record Thanks, our key forward metrics to by performance economics, look Good everyone. and our sharing morning presented. about unit Dee Dee. to financial details that

period be note stated, adjusted please referring financials, of will and otherwise results, quarter the XXXX. versus the through references of refer going second quarter to we're the As that, quarter second unless XXXX all to I

reconciliations financial our statements XX-Q are available release filing. GAAP earnings today's non-GAAP consolidated and and Our in

our financials businesses KPIs. quarter, As Enterprise we better and Consumer have mentioned reflect and our last realigned to

look streams. in deeper businesses a these of take respective Let's their at X revenue terms

products, which range by and business Enterprise complemented broad Consumer revenue model in of help a customers profile. has diverse every produced us allowing cycle, our relevant to our highly is Our

the This and revenue approximately XX on XX% fee-based to Consumer shown Credit includes, highly having retention by driven our business base Builder a our revenue cohort products presentation. customer XX% and Plus Instacash of is trends, Slide of recurring bulk revenue. revenue. consumer represent returning and as successful Our the These have

critical for cardholder fees. value, interchange bank is account RoarMoney a generating Our customer lifetime driver extending and while

crypto and investment revenue fee Investing new share accounts. on Crypto per in transactions a MoneyLion on account Finally, MoneyLion monthly generate

business revenue includes Enterprise Our affiliate fees.

importantly, We If are of included partners. marketplace the and, our fees in accounts for significant as Enterprise is you is offering. our to to fastest-growing is quarters channel the affiliate marketplace enterprise marketplace couple providing revenue last in MoneyLion SaaS business and from where of earns majority part this also partners connecting being generated. strategy for the revenue recall, product our our the contracts accelerated stream infrastructure now of

and Additionally, deep given offer targeted are and transactions, to content we offers fees. that customers our our advertising interest of able understanding customers' generate

services management through corporate to creators, which MALKA providing and generates acquisition established generating our and revenue. for Lastly, and division, was production of from benefit Media, content important our enterprise influencer and management, an influencers media clients, creator revenue

We in by also realized synergies acquisition providing our Consumer content customer and low-cost business.

shift This our mix acquisition more and business As model success system the reflects synergies also business. we synergies revenue creates Dee business rewiring particularly to Enterprise to This quarter, profit realize customer customers. in the expected economics, the the business. mix both with last mentioned, our of benefit and, is in is financial even unit forecasted This mix overall of reflects towards our diversification and powerful and as to Enterprise significant we mix. the become margin our strength revenue our Consumer revenue as half both engagement for continuing

against to to $XX; new evident These even increased economics quarter period; ARPU, rates many funnel, consumer the customer our CAC, are once sub and record a adds. is high of $X; Our outcome This this of X-month of impressive quarter another marketplace again other are of unit finance conversion offerings. our in strong for decreased and backdrop payback metrics which more result which and rising a our importantly, cross-sell CAC continued vast customer top businesses. first-party

business our our we further MoneyLion's and additional acquisition continue to that strategy synergies presents diversification plan customer Looking growth derisks along and revenue Enterprise path as profitability. ahead, distinguish our

us customer proposition these franchise. considerable revenue, compelling, us robust with and growing march ability MoneyLion revenue while revenue the see cohorts business efficiently. XX% recurring cohorts we model platform to Consumer gives across over growth are revenue cementing value tell the customer recurring customer target. lasting and acquiring forms our our the relationship, a revenue that value. payback can that year consistently What business, XXX% demonstrate our business as recurring X-month MoneyLion's another the of highly we breakeven lifetime MoneyLion's period, enjoys you at meaningful Enterprise as is year-over-year historical power a generate towards from is our addition with in XXXX, EBITDA and Similar exiting confidence That to customer extended In customers sub to the

continue highest revenue to growth in of in rapidly a As levels as of line leverage generated realize revenue platform. XXX% record from top percentage from also investing in result operating Expenses QX. and areas, we the QX a our improved XXX% to

loss Our QX was efficiency to our in guidance EBITDA. track with and exit to EBITDA target XXXX within continue QX keeps EBITDA us and on breakeven meet

cash, million Importantly, runway our strong adequate of the be performance exiting flow to with quarter providing And this profitability. resulted cash in through year. with in we second $XXX for the positive half us operating cash expect

was full we and adjustment Before on restatements disclosed X-K loss full deeper and a noncash to to XXXX want year diving million QX transparency reported XXXX a earlier financials, $X.X reported QX adjustment our net our XXXX our year to that an of in into second provide in financials. net quarter $X XXXX noncash today and loss million our

assessed of a technical improvement but is treatment That XXXX environment, XXXX error Media. we, adjusted the should and treatment in certain or an continuous a related Media. consultation summary, performance, our cash make-whole was of to is acquisition fair the certain to with impact as as to position no adjustment our connection make-whole isolated shares XXXX of with treated our a MALKA our liability control originally of have guidance. for the with This MALKA issuable value advisers, treated our changes our equity, As provision restricted our pursuant classification in or our been accounting quarter. result our accounting and identified in in each EBITDA, In noncash of acquisition operating has consideration this of consideration

record grew year-over-year quarter record $XX million, our to the for at in us revenue consecutive XXX% year-over-year a growth. XXX% sixth another quarter with second quarter Looking performance. Adjusted our for quarter

Off million remarkable $XX adjusted $XXX full back 'XX $XXX XX% our with of continue months about million, adjusted growth million of revenue XX QX to representing representing nearly revenue XXX% growth. is guidance the to a $XX XXX% of expect to our year-over-year revenue, We trend increase. triple-digit a of year-over-year last our year of million,

low technology 'XX investments historical intelligence-driven and QX QX profit are gross to as the upwards $XX margin represents growth profit our and million, QX year our we be over a in the businesses mid-XXs unlock strong an to increase near-term and towards $XXX in midpoint which at a has and in shift gross quarter-over-quarter of that Given versus highly increasing the was we realized of growth given data profit synergies acceleration to our 'XX, revenue adjusted 'XX million remain profit Enterprise margin $XX XX% margin margin XX% fuel gross mix million business to setting we is from We over platform of lower lower business, profit, to XXX% Enterprise the gross $XXX guidance. we a momentum, revert in revenue 'XX, of million is levels. guidance historical the XXX% 'XX. to exceptional lower confident million our our interim, profile gross adjusted of a XXXX margin versus the XX% over continues guidance adjusted QX slightly XX%, $XXX combined of our and peers, the are which is In increase to The $XXX generated million full versus the business. below Consumer to which profit profile gross although profitable expansion. In to medium-term our 'XX at QX artificial QX as adjusted gross

we to to expansion XX% XX% of medium over XX% 'XX. the $XXX full to Again, full for is a representing expect last gross to and original XX% the confidence us representing adjusted million, to revert over of mid-XXs XXXX $XXX profit range million to increase SaaS margins gives low lower of year in we XX $XXX Enterprise a gross back as guidance scale continue increase our forecast million gross profit the the our to That versus synergies, term business. months realize Our margin XX%. profit, year

look represents $XX and $XX of quarterly taking adjusted Now deeper guided of we XXX% million $XX QX, a million. XXX% to versus growth XXX%. revenue, guidance. we to to This guidance our million In at generated our

We $XX XXX% of are to XXX% targeting representing revenue 'XX, million year-over-year QX $XX million adjusted to in growth.

XX% acquisition-related As our mentioned, XX% we margin to reversion integration are expect guiding to back gross over the term. historic we as adjusted profit we the realize profit gross medium adjusted in term, of near to But synergies, margin.

adjusted quarterly continues another quarter-over-quarter the XX% to on XXXX is and keep point percentage a realize in of exiting improvement $XX EBITDA 'XX to and EBITDA us QX expect losses midpoint range target X QX step an to we Our million, the track in million to $XX compared breakeven, to margin improvement EBITDA at which QX. down

year full guidance. our at Looking

As to economic we any we stated, in win our growth areas. business invest in our is built highest resources cycle to and continue

to result, full we guidance our for XXXX year $XXX adjusted $XXX revenue to raising a million. million are As

profit As to term. mid-XXs mentioned, transitioning over the towards medium is the margin low gross back

we for XX%. full 'XX strong full profit to 'XX, However, expect year margin XX% year a still gross be to

incredibly to an will the margin $XX loss profile million, $XX million which strong. Overall, Given the to is increase of the original to guidance million compression, loss. million EBITDA $XX of be our business $XX remains

Our full and guidance, our the improvement point revenue represents year percentage EBITDA guidance XX strong improvement. year-over-year growth XX% XXX% a of at midpoint margin

of strong a turn consistent it to economics, remarks. with and proving cash With synergistic XXXX in that, unit over flow exciting unique by positioning half most we highly closing for back the management team. represents is led a businesses, will and XXXX breakeven. operating Dee being are that and proven EBITDA story MoneyLion the strategic given finance positive reaffirming in the I exiting Consumer are we Enterprise second summary, Importantly, In all

Diwakar Choubey

execution. diversifying driving Thanks, were revenue all the leverage and Rick. unit on on QX, mix, quarter, of volatility goals. growth. maintaining said markets, Despite the we best-in-class in our in economics, focused operating delivering revenue remain we we In efficient customer Last progress while consistent focused made we and those

Our We our second exiting revenue revenue and of adjusted adjusted expectations. year breakeven EBITDA quarter ahead full guidance in XXXX. results raised target reaffirmed our our came

as build less road to we continue runway balance adequate while We for to a all continue and money. we strong to We have confident things forward ahead burning we're destination sheet through profitability. maintain look cash, the go-to the

operator it much. open you a up Thank pass back the Q&A to we'll to session. Now very

Operator

[Operator Instructions].

The first question Craig-Hallum. of coming Sutton is today George from

George Sutton

on Congratulations the the growth and metrics. incredible

So I ask Enterprise about to the business. wanted

You ad some strength seeing market think of strength. seeing of sensitivity incredible What showing seeing lending We're of an We're clearly mentioned we're the of that are overall advertising you're struggling, that's strength, the I your part other partners your seeing? and areas business. obviously that. that are not

I'm areas showing So these which particular of curious strength. are

Diwakar Choubey

question. the George, thanks for

I look, business, the banks. through slight data on seeing we're that through we the side a think And that we're linked get the Consumer reduction the So through the accounts big spending. in clearly of seeing nondiscretionary

remains that of for there that's strength the network. the other, or really business spending. products, that lot the us So that our a a seeing slowdown consistent gives consumer financial Enterprise it's whether consumer is across uses one we products, little and right? in demand strong, Consumer marketplace the side of business, product confidence the bit American use So or the consumer, or they clearly, the direct-to-consumer whether it's ultimately, finance nondiscretionary our embedded of of and are said, That our

say, tend the the super interesting softness the those that were segments seek when given prime the One of historically we usually the what partners, to there or is consumers X,XXX-plus of partners prime in, for to our of share or markets, of is have near-prime prime the really products. And have opportunities as actually diversity market create take -- the that network well. them some of and the we oftentimes network on emergent expand things

we given by kind inherent that volatility, from may So that the is the hedged have. the issues to of a of time, lot of time see partners diversification we

that lot Now profile mechanism. over into do play and holistic sales We're spending the on next as advertising said our really one of think of the shared making the is the it And that in as as we are services about client time, where that, a And platform the to quarter base. this past. service that of to [indiscernible] said have and combined. back we've we're gives of we that now operations, service, we here, service lot we being Enterprise expect delivery focusing that, we and a where as be, will a a sales really coming quarter us across margin back a really comes interesting things be really, data a time it as acquisitions the merging confidence synergies can the deliver the

there, network strike there. So but pause the I'll we're seeing across

George Sutton

I'm very of the things to X you been certainly I a that day interest. up Xx. of appreciate would I one that gone X why added the ability So the what's bring engagement early it in through Having day customer be is was curious mentioned with significant? importance lot interesting that of that myself. found or

Diwakar Choubey

George. Yes,

really they that's do, the say we creators that is is arts, right? user financial what at platform, allows said That So not financial explore that come what to music, building educated and across money form download -- and bank factor a they're hacks, to interact influencers, innovating you past, anyway bank over idea our that product come the we're So lifestyle, in wouldn't otherwise thousands where sharing the but something content that exist that as how are This they're may using look, creators, engaging this points, time, movements, today. of of first, is just We're sort money money to in inflection presented doesn't get the manner. an our when what is platform. a financial of is across the a are American moment across we challenging with now life about user strategy, a on how -- across wins. consumers every market -- look if products, we've really Americans sports, would in of a the really every that Internet line first-party or they opportunity partner about. it allows the doing across really loop. And users our bringing seeking a nurture in MoneyLion to It to and new where on growth life MoneyLion to us content our content on to creating a interaction ecosystem creates that never into in contextualized appropriate, to products on need personalized significant them all and, being the

Operator

The Cantor coming Siegler from next is question Josh of Fitzgerald.

Joshua Siegler

I . was your around a wondering into dive little could if remarks, deeper prepared we specifically

So economics? metrics, can your on strategy improvement given us broader some with you is the sequential unit these in allowing color some help provide additional best-in-class how

Richard Correia

leverage. seeing garden, Josh, wasn't are we talk muddled formative at we're with moment our that as having providers, business, our in Dee built combination for it reach able and a think on customers able a that I'll our able -- we're to in about you're walled of that -- When our we're In greedy connect way. the the and it's a about invested if our And you, us different scale. growth But particular, influencers. fortunate years. but popular infrastructure, been about profitability. in in you it's little in being appropriate we customers operating to through about, content talked that terms tell of on be think we I to both

be to for and CAC to their that, second seeing offer to well. is derivative be that able that, as monetize able as be them look levels partners able enterprise those we're to our and of kind what help to partners, at we're to high of with addition kind result customers, conversion And third being and to that at able connect of low then In product able record us. us a

Joshua Siegler

are customer uncertain right And that And seem then headed to are any be Great. healthy? we has environment seeing the in, there now? retention engagement specific remained given stickiest macro the products

Richard Correia

Yes.

the revenue our the Consumer you shared think added Enterprise profile we XX, and exciting what's we -- recurring profile is I this profile last recurring at business. our that look revenue of the of quarter quarter, Slide business, if

in what invest, which Dee that we continued new of continue over kind is think a product performance highlighted XX% see features. to revenue, you as having I testament of of And the recurring terms of can through stickiness just is to the product. a QX couple an

In on multiple tied people's lifestyles, to them ARPU addition ability expansion. content the bring is is financial to to time, which of to bites that, platform us that apple monetizing over keep the driving really that at customer, pioneering kind giving the engaging, for

Operator

Xthe of from next question is Hal Goetsch Loop Capital. coming

Harold Goetsch

Just economic in Instacash. question, of sequentially umbrella function the pretty QX. kind too. Is environment, the adoption you're jumped from usage dollars having about full meaningfully the under all just a curious for statement, quarter costs repeat acquisitions that Just seeing the or it of of versus a QX? wanted in to ask on direct income kind this in question, what just And of block-and-tackling

Diwakar Choubey

the first question. answer of turn to to take Rick then it question, the I'll over cost and part I'll the direct

the at we to have this control business imminent that we the modulate product Instacash specifically, is a point. at that any of the dollars levers risk On have part the over

product. credit high-velocity card-like usage, on for significantly. a is customers rely oftentimes like our replacement and Instacash It's reminder, a As a it

And feel remarks, we're there are market very perspective, the We're we becomes and basis, pay lenders of any As be product. from product. we haven well prime through that continue our as remarks, going overall QX we we to customers' we've prime, that take ability be increased on a And time a from to monthly perspective as millions these seeing usage doing with share a in said into transactions and to underwriting and the safe active. prepared on market, prepared QX. the monthly said risk standards, their pay seeing pleased go Again, really forward demand the willingness there's a product. more the where we've modulate volatility in prime, to for in super emerging Instacash

Richard Correia

the on dollar from Yes, Certainly, acquisitions. clarifying absolute cost is question, driven side Hal. step-up -- great the the

was adjusted quarter quarter. to as you importantly, XXX% expenses what being think of improvement our first XXX% path see the to about the an we've down stepping I talked in profitability, second revenue, can to our that

So see there's come. leverage, we're to and continuing to operating much more

importantly, driving kind look flow exiting we're cash revenue. flow we And this XXX% of of positive cash the to As giving a than ahead cash think us second percentage XXXX to operating breakeven, ahead, as expenses XXXX. year, EBITDA to get to more adequate free half as we positive of in

Operator

and [Operator today's event. Ladies interest brings to the gentlemen, would your us MoneyLion. you thank end to and for Instructions]. that We participation of like in

enjoy webcast your You may disconnect the day. off and this time, the your log at rest lines and of

MoneyLion (ML) 12 Aug 222022 Q2 Earnings call transcript