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MI

MONEYLION INC. (ML)·Q3 2024 Earnings Summary

Executive Summary

  • Record Q3 revenue of $135.5M (+23% Y/Y) and adjusted EBITDA of $24.4M (18.0% margin); GAAP net loss of $2.8M as onetime legal costs lifted non‑GAAP adjustments . On the call, management framed results as “record” revenue of $135M and adj. EBITDA of $24M with 18% margin, reflecting rounding versus press release tables .
  • Full‑year 2024 guidance raised: Revenue $536–$541M (from $525–$535M) and adjusted EBITDA $88–$93M (from $80–$87M); implies Q4 revenue $149–$154M (+34% Y/Y at midpoint) and adj. EBITDA $22–$27M (14.1%–17.9% margin) .
  • Enterprise momentum: Enterprise revenue hit a record $45.3M (+18% Q/Q; +15% Y/Y), with management expecting >18% Q/Q growth in Q4 as conversion improves with lower rates and product rollouts (Checkout, decisioning) .
  • Strategic drivers: “MoneyLion Checkout” shows pilot lift (25% higher CTR, 2.5x conversions, 30%+ revenue per lead), and vertical expansion in credit cards, mortgages (HELOCs), and auto insurance is underway .
  • Capital and cash: Cash rose to $111.9M at 9/30/24 (from $98.4M at 6/30/24), driven by positive cash flow; company targets lower cost of senior debt as fundamentals improve . Board also authorized a $20M share repurchase program during Q3 (8/26/24) .

What Went Well and What Went Wrong

What Went Well

  • Record top line and profitability: Revenue $135.5M (+23% Y/Y) and adjusted EBITDA $24.4M (18.0% margin), exceeding Q3 EBITDA guidance ($18–$21M) on strong enterprise contribution and favorable provision trends; cash increased to $111.9M .
  • Enterprise acceleration and diversification: Enterprise revenue $45.3M, up 18% Q/Q (after +17% in Q2); non‑personal loan marketplace revenue reached about half of marketplace mix, signaling reduced reliance on personal loans .
  • Conversion/product innovation: MoneyLion Checkout pilots boosted funnel metrics (25% CTR, 2.5x conversions, 30%+ revenue per lead), supporting management’s call for >18% Q/Q enterprise growth in Q4 .

“MoneyLion Checkout… pilot partners… saw a 25% improvement in click‑through rate, a 2.5x increase in conversions and a 30%‑or‑more increase in revenue.” — CEO, Q&A

What Went Wrong

  • GAAP earnings softness: Despite operational records, GAAP net loss of $2.8M (diluted EPS $(0.25)) in Q3 as other expenses (onetime legal) increased adjusted EBITDA addbacks .
  • Personal loan conversion still below historical levels: Management noted conversion remains muted (though improving modestly), tempering upside until rates decline further; Q4 expected to benefit from stabilizing credit and lower rates .
  • Adjusted EBITDA seasonality and spend: Wide Q4 EBITDA range (14.1%–17.9% margin) reflects incremental brand and direct‑to‑consumer spend to accelerate the “90% contribution” journey; near‑term margins may be dialed to favor growth .

Financial Results

MetricQ1 2024Q2 2024Q3 2024
Revenue ($M)$121.0 $130.8 $135.5
Adjusted EBITDA ($M)$23.5 $18.5 $24.4
Adj. EBITDA Margin (%)19.4% 14.2% 18.0%
Net Income (Loss) ($M)$7.1 $3.1 $(2.8)
Diluted EPS ($)$0.60 $0.26 $(0.25)
Cash & Equivalents ($M)$93.2 $98.4 $111.9

Segment revenue ($M)

SegmentQ1 2024Q2 2024Q3 2024
Consumer$88.1 $92.4 $90.2
Enterprise$32.9 $38.4 $45.3
Total$121.0 $130.8 $135.5

Key KPIs

KPIQ1 2024Q2 2024Q3 2024
Total Customers (M)15.5 17.0 18.7
Total Products (M)25.3 27.7 30.7
Total Originations ($M)$717 $770 $776
Provision Expense as % of Originations2.5% 3.6% 3.1%

Notes:

  • Press release Exhibit 99.1 reports Q3 revenue/net loss/adj. EBITDA of $135.466M/$(2.792)M/$24.402M, consistent with call commentary rounding .
  • Adjusted EBITDA is non‑GAAP; Q3 “other expenses” in the addbacks included ~ $8M onetime legal costs per CFO .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)FY 2024$525–$535 $536–$541 Raised
Adjusted EBITDA ($M)FY 2024$80–$87 $88–$93 Raised
Adj. EBITDA Margin (%)FY 202415.0%–16.6% 16.3%–17.4% Raised
Revenue ($M)Q4 2024 (implied)—$149–$154 New/Updated
Adjusted EBITDA ($M)Q4 2024 (implied)—$22–$27 New/Updated
Adj. EBITDA Margin (%)Q4 2024 (implied)—14.1%–17.9% New/Updated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2024)Current Period (Q3 2024)Trend
MoneyLion Checkout & decisioningPreviewed end‑to‑end checkout; expected 20%–40% conversion lift; rollout underway with long sales cycles .Pilot metrics: +25% CTR, 2.5x conversions, 30%+ revenue per lead; broader rollout to existing API customers in coming quarters .Accelerating deployment; positive unit economics.
Enterprise conversions & ratesStabilization improving; Q3 guided 23% Y/Y growth; diversified beyond personal loans .Conversion improved modestly; >18% Q/Q enterprise growth expected in Q4 as rates fall and partners re‑accelerate .Improving with macro tailwinds.
Vertical expansion (cards, mortgages, auto insurance)Building credit card marketplace, HELOCs, auto insurance; 1,200+ partners; EY channel partnership .Substantial auto insurance growth in Q3; credit card decisioning hosted; HELOC pricing displays coming; goal: each vertical >$1B rev potential [2: sop] .Execution ramping.
Regulatory/CFPB (EWA)Bank partnership (Pathward) extended to 2029; adding overdraft protection; forward flow announced .CFPB EWA stance: company disagrees with “credit product” interpretation but expects no impairment to Instacash offering or unit economics; confident across regimes .Monitoring; positioned for compliance.
Financing/cost of capitalPositive cash flow; $98M cash in Q2; forward flow to improve cash efficiency .Cash $112M; targeting senior debt cost near SOFR +150–300 bps vs currently ~2x that; exploring lower cost options .Improving liquidity; potential refinancing.

Management Commentary

  • “We achieved record quarterly revenue of $135 million… and we’re raising our full year 2024 revenue guidance to $536 million to $541 million… [implying] $151 million for Q4 at the midpoint (+34% Y/Y).” — CEO .
  • “We generated record adjusted EBITDA of $24 million… above the high end of our guidance… full year 2024 adjusted EBITDA now $88–$93 million (16.8% midpoint margin).” — CFO .
  • “Pilot partners leveraging MoneyLion Checkout have seen… 25% improvement in click‑through rate, a 2.5x increase in conversions and a 30%‑or‑more increase in revenue.” — CEO .
  • “Provision expense as a percentage of originations was 3.1%… one of our best quarters… credit performance trends remained consistent.” — CFO .
  • “We expect regulation… will look different under a new administration… we do not expect [CFPB EWA rule] would impair our ability to continue offering Instacash… while maintaining our unit economics.” — CEO .

Q&A Highlights

  • Enterprise outlook and rates: Management reiterated that personal loan conversion likely bottomed in Q1; improving modestly with expectations for more meaningful improvement into H1’25; record Q3 enterprise revenue with >18% Q/Q growth expected in Q4 .
  • Regulation (CFPB/EWA): Despite proposed interpretive rule, MoneyLion expects to continue Instacash without impairing unit economics; multi‑administration compliance investments and multiple delivery methods position them well .
  • EBITDA range and brand spend: Wide Q4 EBITDA range reflects intentional brand/D2C investments enhancing 90%‑margin consumer‑marketplace journeys; management can “throttle” margins but prefers capturing share now .
  • Checkout economics/timing: Early pilots delivering better conversions and pricing power; broader rollout expected across existing partner base; supports enterprise acceleration narrative .
  • Capital structure: With cash building, targeting materially lower senior debt spreads (aiming for SOFR +150–300 bps vs ~2x that today) to reduce cost of capital over time .

Estimates Context

  • We attempted to retrieve S&P Global (Capital IQ) consensus for revenue and EPS for Q3 2024 and adjacent periods, but the mapping for ML was unavailable in our tool at this time. As a result, Street consensus comparisons are not shown (S&P Global data unavailable via tool).
  • Management’s Q3 revenue landed within guidance ($133–$138M) and adjusted EBITDA exceeded guidance ($18–$21M); FY 2024 guidance was raised on both revenue and EBITDA .

Key Takeaways for Investors

  • Momentum into Q4: Raised FY guidance implies Q4 revenue of $149–$154M (+34% Y/Y midpoint) and 14%–18% EBITDA margins; enterprise expected to accelerate (>18% Q/Q), offering near‑term top‑line catalysts .
  • Product engine working: Checkout pilots meaningfully lift conversion and monetization metrics; broader rollout should benefit both revenue growth and high‑margin enterprise mix (the “90%” journey) .
  • Diversification reduces cyclicality: Non‑personal loan marketplace now ~half of marketplace revenue; vertical pushes (cards, auto insurance, HELOCs) expand TAM and smooth macro sensitivity .
  • Credit performance solid: Provision as % of originations improved to 3.1% in Q3 with stable originations ($776M), supporting consistent contribution from first‑party products .
  • Cash and capital optionality: Cash increased to $112M; management plans to reduce senior debt costs as metrics improve; $20M buyback authorization provides an additional capital return lever .
  • Regulatory watch item, manageable risk: CFPB EWA posture monitored, but management does not expect impairment to Instacash or unit economics; 10‑year compliance build viewed as advantage .
  • Actionable setup: Near‑term catalysts include Q4 enterprise acceleration (>18% Q/Q), Checkout rollout, and possible refinancing. Medium‑term thesis centers on marketplace scale, 90%‑margin consumer journeys, and vertical expansion driving both growth and margin expansion .

Appendix: Additional Items from Q3 Period

  • Share repurchase program: Authorized up to $20M in Class A repurchases (announced 8/26/24), funded from cash and future cash flows .
  • FY 2024 guidance summary (raised): Revenue $536–$541M (+27%–28% Y/Y) and adjusted EBITDA $88–$93M (16.3%–17.4% margin) .