MONEYLION INC. (ML)·Q2 2024 Earnings Summary

Executive Summary

• Record revenue of $130.8M (+23% y/y) and GAAP net income of $3.1M ($0.26 diluted EPS); Adjusted EBITDA of $18.5M (14.2% margin). Q2 results met or exceeded guidance (revenue above the high end; EBITDA mid-range) .
• Management introduced Q3 and FY24 guidance: Q3 revenue $133–$138M, Adj. EBITDA $18–$21M; FY24 revenue $525–$535M, Adj. EBITDA $80–$87M, implying continued growth and margin expansion into H2 .
• Enterprise revenue inflected +17% q/q; consumer revenue +33% y/y; total customers rose to 17.0M (+73% y/y) with 2.4M products consumed in Q2, supporting multi-vertical momentum .
• Strategic catalysts: MoneyLion AI (financial product search), end-to-end Checkout, Content-as-a-Service, and Web Services; extension of Pathward bank partnership to 2029 with overdraft protection capability .

What Went Well and What Went Wrong

What Went Well

• Revenue beat: $130.8M vs Q1 guidance of $125–$130M; EBITDA delivered mid-range ($18.5M vs $17–$20M). CEO: “We have all the ingredients needed to build a digital ecosystem…with features like AI-driven financial product search, MoneyLion checkout…” .
• Enterprise inflection and diversification: Enterprise revenue grew +17% q/q; consumer revenue +33% y/y. CFO: “This bolsters our positioning to further diversify revenue across multiple financial verticals” .
• Customer and product scale: Total Customers 17.0M (+73% y/y), Total Products 27.7M (+60% y/y), Originations $770M (+40% y/y); provision expense as % of originations was 3.6% in Q2, reflecting stable credit performance .

What Went Wrong

• EBITDA margin compression q/q: Adj. EBITDA margin fell to 14.2% from 19.4% in Q1, as mix shifts and investment (brand, funnel) weighed near-term profitability .
• Slight decline in net interest income y/y: $3.0M vs $3.3M in Q2 2023, highlighting continued reliance on service/subscription revenue and the transition to forward flow .
• ARPU headwind: Management noted ARPU down slightly as marketplace scale and third‑party product mix increase; offset by faster revenue growth and higher mix of 60%/90% contribution cohorts over time .

Financial Results

Headline Metrics (trend and y/y)

Revenue Breakdown

KPIs

Notes

• Call commentary stated record revenue “$131 million”, consistent with press release headline; precise GAAP total revenue was $130.846M per consolidated statements .
• Cash balance ended Q2 at $98M (up from $93M in Q1) supporting liquidity; operating cash flow was $47.8M in Q2 .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO: “We are putting our ecosystem approach into action through…AI-driven financial product search, MoneyLion checkout, content-as-a-service, web services, and much more” .
• CFO: “We expect to finish strong in each of the next two quarters and create significant momentum going into 2025” .
• CEO on Checkout: “For the first time, a customer will be able to search for, find and take out a third-party financial products all in one place…we intend to fix that” .
• CFO on contribution margins: “B2B entry ~30% contribution margin; first-party ~60%; third-party affiliate with de minimis CAC and COGS >90%…fastest growing part of our business” .

Q&A Highlights

• Interest rate sensitivity and guidance: No rate cuts assumed; diversified revenue (consumer credit ~55% of mix) positions ML for tailwinds if rates decline .
• Checkout conversion uplift: Management expects 20–40% conversion lift from end‑to‑end Checkout; rollout underway and live, medium‑term proliferation anticipated .
• Personal loans and new verticals: Personal loans stabilizing/returning to growth across credit spectrum; credit cards seeing significant growth; mortgages early but building into 2025 .
• Forward flow transition: Underway since early July; P&L relatively neutral, more cash efficient, moves receivables off balance sheet; stable credit performance expected .
• Marketing/CAC environment: ML’s “walled garden” and multi‑lever strategy keep CAC/LTV intact despite election cycle; enterprise clients increasing spend on ML Engine marketplace .

Estimates Context

• S&P Global consensus data were unavailable via our tool due to a CIQ mapping limitation for ML; as a result, we cannot provide definitive consensus comparisons for Q2, Q3, or FY24 at this time (S&P Global estimates unavailable).
• Given Q2 revenue above the high end of guidance and FY24 outlook introduced at $525–$535M revenue and $80–$87M Adj. EBITDA, we anticipate upward estimate revisions for H2 revenue and EBITDA as enterprise momentum and Checkout deployment scale .

Key Takeaways for Investors

• Durable topline momentum with diversified drivers: Q2 revenue +23% y/y; enterprise +17% q/q; consumer +33% y/y, supporting multi-vertical scaling into H2 .
• Profitability path intact: Q2 Adj. EBITDA $18.5M (14.2% margin) with clear cohort mix strategy to expand margins (60%/90% contribution segments) .
• Structural catalysts: MoneyLion AI and Checkout should raise conversion rates (20–40% uplift potential), deepen partner embed, and unlock higher‑margin marketplace economics .
• Strengthened bank rails: Pathward partnership extended to 2029 with overdraft protection; robust SLA/audit framework enhances scale and compliance posture .
• Balance sheet optimization: Forward flow for Instacash improves cash efficiency and reduces on‑balance sheet receivables; supports sustained operating cash generation .
• Near‑term setup: Q3 guide implies continued growth; H2 narrative likely driven by enterprise stabilization, Checkout rollout, and content/services distribution via EY and other channels .
• Actionable: Favor momentum into H2 as execution on AI/Checkout and enterprise diversification could be estimate-positive; monitor EBITDA margin trajectory (brand investments, mix shifts) and provisioning vs originations as forward flow transitions .