MoneyHero Limited

Hello everyone, thank you for joining us and welcome to Money Zero's 2025 Second Quarter Earnings Conference Call. Joining me on the call today are Rohit Murthy, CEO and Daniel Arne, Interim CFO. Our earnings release was issued earlier today and is now available on our IR website as well as via Google News website. Before we begin, I would like to remind you that today's call will include forward-looking statements made under the state carbon provisions of the U.S. Private Security Certification Reform Act of 1995. Please refer to the state carbon statement in our earnings press release, which applies to this call. In addition, please note that today's discussion will include both IFRS and non-IFRS financial measures for comparison purposes only. For a combination of this not IFRS measures to the most directly comparable IFRS measures, please refer to our earnings release and FES filings. All monetary reference will be in US dollars unless otherwise stated. Lastly, a replacement of this conference call will be available on our other website. I will now turn the call over to Rohit, our CEO of Monetary Reference. Please go ahead.

Thank you. And thanks to everyone for joining. When I became CEO last year, we set a simple goal. Reshape Money Hero for durable, profitable growth. Prioritize quality over quantity, compound gross profit, and discipline. Q2 shows that plan working. Revenue mix continues to shift towards higher margin verticals, cost of revenue is down materially, and adjusted EBITDA losses never again. This puts us firmly on track for positive adjusted EBITDA in the second half of 2025. We're carrying strong momentum into H2 driven by over 20% sequential growth and a clear path to achieving our EBITDA goals. Now for Q2 at a glance, we generated 18 million in revenue, adjusted EBITDA came in at a loss of 1.95 million, cost of revenue was 51%, and around 27% of total revenue was contributed by insurance and wealth. We also reported net income of 0.2 million in the quarter. From Q1 to Q2, revenue grew by over 20% sequentially. This also All strong execution on the key levers we have prioritized, mix, margin, and operating discipline. Now, for the progress, what are the goals we set out in 2024? We organized execution around five pillars. Consumer pull, conversion expertise, insurance brokerage, strong provider partnerships, and operating leverage. We've stayed on the Trump beat. Traffic is getting smarter, journeys are faster, insurance and wealth are rising as a share of revenue, and our cost base is leaner even as product velocity increases. Now, for the business highlights, I will focus on four key areas. First, we are targeting more than insurance and wealth, including in the digital asset space. Auto insurance is scaling with real-time pricing and end-to-end digital journeys across Hong Kong and Singapore. This is significantly boosting rates as our integrations deepen. Travel insurance is now a three-click purchase with materially higher completion rates. In wealth, we've broadened our marketplace. This includes regulated collaborations with leading digital asset platforms like OSL, giving our consumers more choice through our disciplined, regulatory-first approach. Now, to be clear, OSL is not a one-off. It reflects a measured, pragmatic strategy to participate in the digital asset space through licensed partners, ensuring both strong consumer utility and robust compliance. Second, our provider partnerships are strengthening our monetization engine Our Money Hero Best of Awards in Singapore attracted over 170 clients, enabling us to strengthen our partner relationships, unlock new fixed fee opportunities, and significantly bolster our brand, effectively converting the trust in our ecosystem into high-quality revenue. Third, we are further realizing the potential of AI integration in our operations with clear and measurable outcomes. We are operationalizing AI with rewards intelligence, approval intelligence, yield intelligence, and AI-assisted service going live in select scenarios with holdouts and guardrails firmly in place. We're also lowering CAC for approved applications, improving approval quality, and raising first contact resolution. This approach is allowing us to deliver more with a flat headcount. And fourth, our unwavering cost discipline is driving real operating leverage. Our operating expenses remain tight as we continue to modernize our technology stack and tools. That discipline, paired with our shift to higher margin verticals, drives sequential EBITDA improvements, even as we invest in our business roadmap and partner integration. Now let's turn our attention to our outlook guidance and our broader value creation framework. Now looking ahead, our H2 guidance reflects continued growth and profitability. We saw encouraging sequential revenue growth of over 20% and expect to achieve similar levels of sequential revenue growth throughout the second half of the year. This trajectory will keep us on track for adjusted EBITDA breakeven in the second half of 2025, and we expect it to be driven by new bank and insurer actions, insurance and web scaling, and also our fixed fee programs. In general, we believe the current market environment is positive for FinTech that combines profitable growth with visible catalysts, and our H2 plan is built around those catalysts. This confidence is also built on our market leadership and industry consolidation. We are in a uniquely strong position, 8.6 million members, rising exposure to high-margin verticals, 260-plus provider partnerships, and the strategic connectivity of our backers, all in markets experiencing attractive long-term adoption of digital finance. This creates a defensible flywheel that we continue to compound. Now, as the market consolidates, our scale, balance sheet strength, and partner ecosystem puts us in pole position. As such, we will act only when opportunities are strategically aligned and return effective. Now, for the next two, three years, we see a clear path to achieving 5% to 10% adjusted EBITDA margins. We expect this to be driven by our market leadership, improved revenue mix and quality, renewal economics and insurance, recurring wealth monetization, and an AI-enabled operating leverage. That said, these are objectives, not formal guidance. We will continue to report progress with clarity and discipline. In closing, it's clear We are a simpler, stronger, and more focused company than we were a year ago. This is reflected in our improved mix, rising margins, and controlled operating expenses. Our H2 priorities, 20% or more sequential growth, EBITDA breakeven, and measured expansion in high margin verticals are already in motion. With that, thank you to our teams, partners, and communities Your dedication and ingenuity empower us as we face the future, confident in our ability to deliver continued growth and profitability. Now I'll hand it to Danny to discuss the financials.

Thank you, Rohit. And we appreciate everyone taking the time to join us. As Rohit mentioned, when we pivoted the business in the second half of 2024, we set very clear financial priorities. improve the quality of revenue, expand gross margins, and tighten operating discipline. The numbers you'll hear from us today reinforce that the business model is structurally healthier than it was a year ago, and we are maintaining our clear path to sustainable profitability. Let me walk through the quarter in more detail, starting with revenue and mix. We reported revenue of $18 million in Q2. down 13% year-over-year. That said, this discipline was the result of a very deliberate measure to moderate lower margin credit card volume in favor of higher quality, higher margin verticals. The results show this. Insurance revenue grew from 11% to 14% of total revenue year-over-year, and wealth grew from 11% to 13%. While credit cards by design ticked down slightly from 62 to 61%. Taken together, insurance and wealth contributed 27% of group revenue this quarter, up from 22% in the same period last year. This is exactly the kind of mixed evolution we set out to achieve. More recurring, more defensible, and higher margin categories. Now let's turn to gross margins and cost of revenue. Cost of revenue declined 34% year-over-year, landing at 51% of revenue versus 67% in Q2 of last year. This material improvement reflects disciplined reward collaboration, smarter traffic, and stronger approval quality. Put simply, we are acquiring customers more efficiently and delivering applications with higher approval rates. These translate directly into healthier unit economics and ultimately, stronger profitability. On the cost side, operating expenses, excluding net foreign exchange differences, fell 37% year over year to 20.6 million. The savings were broad-based. Advertising and marketing expenses were down 31%. Technology costs down 58%. Employee benefits down 45%. and G&A expenses down 27%. This reduction reflects a more disciplined and efficient way of operating, making better use of our platforms, processes, and tools, while still investing selectively in AI infrastructure, customer acquisition, and platform optimization. The result is a cost base that is higher, but also sharper and more productive. profitability. As a result of the improvements in margins and reduced operating expenses, profitability strengthened across every measure. Net income was $0.2 million in Q2 compared to a net loss of $12.2 million in the same quarter last year. Adjusted EBITDA loss narrowed to $2 million, an improvement from $3.3 million in Q1 and $9.3 million a year ago. The numbers paint a clear picture. Sequential progress is consistent and visible. Each quarter, the losses narrow, margins expand, and the business becomes more durable. This is exactly the path we outlined, and we remain confident in delivering positive adjusted EBITDA in the later part of 2025. On capital allocation, we remain We are deliberately reinvesting to the higher margin verticals like insurance, personal loans, and wealth, which are growing as a share of revenue and often more for the economics. We are also leaning into strategic initiatives such as credit hero clubs with TransUnion in Hong Kong and regulated digital asset collaboration with licensed partners like OSR. As Rohit mentioned, This is not opportunistic doubling. This is a programmatic, compliance-first strategy to participate in the digital asset ecosystem, where we can add consumer value responsibly. Going forward, we expect to continue seeing margin expansion and stronger operating leverage as the mix continues to improve and our cost discipline holds. The structural improvements are already visible in the numbers. and they provide a strong foundation for the quarters ahead. With that in mind, our financial priorities remain unchanged. Deliver sustainable profitability, strengthen the balance sheets, and maximize long-term shareholders' value. We have come a long way in just one year. Revenue mix is healthier, costs are leaner, and margins are materially stronger. With these fundamentals in place, We are entering the second half of 2025 with confidence in both growth and profitability. That concludes our prepared remarks for today. I'll now turn the call over to the operator to begin the Q&A section. Operator, please go ahead.