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.

Thank you. If you'd like to ask a question, please press star 1 1. If your question has been answered and you'd like to remove yourself from the queue, please press star 1 1 again. One moment while we compile the Q&A roster. And our first question comes from William Gregozeski with Greenridge Global. Your line is open.

Hey, Rohith. Great quarter. I have a couple questions for you. You've made references to using AI in the business. Can you talk a little bit more in detail on some of the initiatives you're actually doing with it, whether it's cost savings or revenue generation or kind of what the depth of AI you're using is?

Thanks, Will. Sure. We're embedding AI in how we acquire, convert, and serve customers. We've sort of really prioritized now production use cases, and we have clear holdouts and KPIs. And the impact shows up in a lower cost to serve, a better conversion, and faster shipping without adding headcount. Now, in terms of like what's live now, There are a couple of use cases I can talk about. One is an AI customer support. We are automating 70% to 80% of incoming inquiries while maintaining our CSAT. And the benefit is threefold. Number one, there's a 24-7 coverage now, so there's reduced abandonment. There's instant response versus like a multi-minute queue. And just the ability to absorb volume spikes without proportional staffing. And as a result, The net effect is we have a lower service cost per case and a higher first contact resolution. Second is an AI competitive intelligence platform. So we have an automated collection and analysis of all competitive offers, UX changes, and this cuts manual research time by approximately 90%. Now this feeds pricing and rewards decisions and really helps us prioritize product work, where it moves conversion and also improves our approval-adjusted CAC and cost-per-approval. Now, in terms of near-term revenue drivers, some of them are ready and some of them are piloting. One is a WhatsApp AI quote agent. This is with the auto insurance we launched in Singapore, and we're testing it and soon should be ready for deployment. What this essentially does is the agent guides the customer from a needs discovery to core comparison and handoff for buying inside a messaging platform like WhatsApp. And we expect meaningful conversion lift versus a web-based user journey. Second is AI media creation and experimentation. Now, this is in development. Our goal is 70% to 80% reduction in just pure creative production spend. And just It must be testing cycles. I think hundreds of sort of compliant variants generated and we can score them automatically just so that we can scale all of this across these markets. And, you know, why all of this matters is just three points. One is the unit economics. We want a lower cost for approval and a lower cost to sell with our cost of rewards held, you know, in the low 50s and really improve our gross profit per dollar of revenue. Second is operating leverage. Automation just allows us to keep headcount flat while throughput increases. And finally, conversion and revenue. You know, guided journeys like the WhatsApp agent I mentioned, it just raises conversion rates and protects the funnel throughput outside business hours.

Okay, great, great. I have three additional questions and there might be some overlap in them. So if you don't mind, I'll just ask all three and you can answer either grouped or separately, if that makes sense for you. I was curious about the key growth drivers for 2026 that you're looking for as far as top line and bottom line, and then specifically what the plans are for the insurance business to build that up and if there's milestones we should look for. And then finally, just an update on the wealth and crypto side, and just if you can update on where we are in that process of expanding that business.

Absolutely. Why don't I start with the wealth and crypto, and then I'll talk about the insurance, and then I'll finally touch upon how we're thinking about 2026. So when it comes to wealth, we really view wealth, including digital assets, as an adjacency that extends our marketplaces just beyond just costs and loads. And we do this with a very capital-light, partner-led economics. I do want to emphasize our approach is regulatory first. So we route consumers only to licensed providers in each market. And we monetize this via a mix of a CPA for funded account, in some cases, a tiered revenue share on flow products, or just fixed fee sponsorships. Now, in terms of partnerships and initiatives that I can talk about, one is our partnership with OSL in Hong Kong. We announced that collaboration. OSL, a licensed virtual asset platform in Hong Kong. And again, this work stream is focused on a compliant onboarding journey, investor education, and a campaign-based acquisition. No balance sheet exposure for Money Hero and no custody of customer assets. In terms of investment brokers, We continue to partner with a portfolio of licensed retail brokers across Hong Kong and Singapore. Again, these relationships are a mix of CPA for funded accounts, revenue share and selected products, and fixed fee sponsorships, both around product launches and campaigns. I'll take the insurance question that you mentioned about. For us, insurance is really a compounding engine. And what I mean by that is it carries structurally for us higher margins, it renews annually in many lines, and it really benefits directly from our data, technology, and AI startups. Now, our strategy has three parts when it comes to insurance. One is expand the supply depth and products. Second, streamline our journeys, and we're using AI for that. And three, keep tightening the unit economics so that insurance and wealth continues to rise as a share of revenue while our conversion and profitability improve. Now, let me talk a little bit about these three, you know, strategic sort of drivers. One is expand the supply depth and products. And we're doing that by rolling out more real-time and end-to-end integrations, both in auto and other sort of general insurance across Hong Kong and Singapore. And what that simply means that customers can quote, find, and just pay seamlessly on our rails. This is a single biggest driver of conversion and economics. I did speak about travel insurance, but we have a three-click purchasing journey that's already live and it's delivering more than 40% end-to-end completion in Q2 alone. And we're extending that UX to additional products and partners. And finally, you know, we need to broaden the shelf with lines. And, you know, we are exploring... even life insurance in Singapore via broker partnerships, or even just structuring it as a profit share rather than a per lead. Number two, streamlining our journeys and lifting conversions. Now, AI is going to be a big part of it. I spoke about our playbook. This is really helping just target shoppers better, recommend the right sort of cover, resolve service faster, and all of this will help us with lower approval, adjusted cash, lower cost for approval, and just shorter fulfillment times. We're really excited about what we're testing with the AI-assisted WhatsApp service I spoke about in auto insurance in Singapore. And we believe this can really improve conversion rates. And we want to take the same sort of playbook also to scale our travel insurance completion rates, where we do combine real-time pricing, end-to-end APIs, and as I mentioned, we even have a three-click design. And finally, I spoke about tighter unit economics and monetization. We want to target insurance and wealth as a mix to be around 28% to 30% of group revenue in the second half. And this is very consistent with our second half profitability milestones. And if we can do this while keeping our cost of revenue in the low 50s, as Danny mentioned, with smaller reward calibration and approval-aware bidding, And combine that with our real strong partner partnerships I spoke about that come in sponsorship programs, fixed fees. These are really material and repeatable for us. And that's why our Money Hero Best of Awards attracted 170 plus clients. And that really reinforces the engagement and monetization. And I think finally, a great question around how we think about 2026, because we are in terms of what the growth levers are. And frankly, though, the growth levers, the structure of growth levers are already in place, which we spoke about. And what we're doing is we're building on that prudently as we think about even, you know, 2026. And just to recap the growth levers for us, insurance and wealth scaling. Now, we want this mix to continuously improve and contribute, you know, 30% or more of our group revenue. And we want this supported by... broader end-to-end coverage, a higher port-to-bind conversions, and as I mentioned, newer product lines in Singapore and Hong Kong. Conversion rate improvements, these are continuous. We want to sustain our travel insurance three-click journeys. We want to scale our auto insurance real-time pricing and end-to-end into more markets, including the Philippines. And as I mentioned, AI-driven efficiency is going to be a very critical part for us to continue lifting high-quality traffic, reducing our CAC, and just keeping that operating leverage intact. And provider partnerships will continue to be a very, very important structure, you know, sort of lever. And on top of that, you know, we're adding new initiatives. We're launching and we'll be monetizing the Credit Hero Club membership in Hong Kong in partnership with TransUnion. We will have a membership program in Singapore. And all this, what this does is it really deepens our consumer engagement and newer revenue streams. I just speak about the fact that, you know, we're also exploring life insurance partnerships in Singapore and Hong Kong. And then when it comes to Philippines, we truly want to digitally transform the Philippines market. We believe by doing this, we can really unlock like newer growth opportunities, even in cars and personal loans. Again, supported by our, you know, provider partnerships there. And finally, we have very selective and thoughtful expansion of digital asset partnerships with licensed brokers, and we want to continue doing this in a regulatory first and capital-like way. So that's how we're thinking about going into 2026.

All right, perfect. Thank you very much.

Thank you. Our next question comes from Stephen Wong with Spica Capital. Your line is open.

May I ask a question? Can you hear me? So may I ask a question? Similar to Q1, I've seen that the Q2 revenue has decreased year over year. What initiatives would the company take to restore the revenue to the last year's level?

Okay, may I take this question? Yeah, go for it, Dan. Okay. Thanks for the question. As I mentioned, Q2 revenue was $18 million, down 13% year over year. That decline reflects the strategic reset we began in the second half of last year to prioritize revenue quality and unit economics. And importantly, on a sequential basis, revenue actually grew more than 20% from Q1 to Q2. That shows that momentum is already returning on this healthier base. The health of the model has also improved. Cost of revenue is down 51%. and insurance and wealth reached 27% of revenue. And our focus now is to layer growth back onto its stronger foundation. And concretely speaking, first we'll aim to scale higher margin protocols like insurance and wealth, such as auto and travel insurance, by expanding real-time pricing and end-to-end integration in Hong Kong and Singapore. to sustain the free-click flow in travel and roll the same pattern into October as more insurer APIs goes alive. As for wealth and digital assets, we'll continue a regulatory-first, partner-led approach like our collaboration with OSL in Hong Kong. We target to move insurance and wealth to 28% to 30% of revenue in the second half to support gross profit compounding. Secondly, We'll deepen member engagement, like with Credit Hero Club and TransUnion in Hong Kong, where we provide free credit scores, monitoring, and personalized offers to drive more qualified applications and cross-sell across phones, cards, insurance, and wealth. We'll also focus on AI-access journeys, such as on applying our rewards, approvals, use, intelligence, and AI-access service. We are testing an AI-access WhatsApp, as Rohit has already mentioned, for auto insurance in Singapore to speed quoting and resolution, which we expect to lift conversions. Thirdly, we will leverage on commercial momentum and selective reinvestment, such as fixed fee and sponsorship program with banks and insurers are now material and repeatable. These add high margin dollars alongside transactional commissions. Our cost base gives room to reinvest selectively in growth channels and content while keeping our quality flat and cost of revenue in the low 50s. Thank you.

I have a question to follow up.

Yeah, go for it.

So like, whilst I've seen that the revenue drops, there has been a consistency, but I've also seen that the net loss and the EBITDA have improved year over year. So like, would you mind clearly illustrate the factors that contributed to this improvement?

Sure. I'll take this question as well. Yeah, go for it. Okay. First, this is a great question. The improvement is really about building a structurally healthier business model. And that is showing clearly in the numbers. Free driver standouts. I would think. Firstly, makes shift towards higher margin products. Insurance and wealth contributed 27% of revenue in Q2. That is up from 20% a year ago. These verticals are structurally higher margin and more recurring. So every revenue dollar contributes more gross profit than before. And secondly, unit economics and cost discipline. Cost of revenue improved to 51% of revenue from 67% last year, a 16-point gain, driven by tighter reward collaboration, better approval quality, and improved partner terms. And operating costs fell 37% year-over-year to $20.6 million as we reduced the spend across marketing, technology, and also employee costs. Importantly, AI is now embedded in service, approvals, and reward optimization that helps us scale throughout while keeping headcount flat. And thirdly, adjusted EBITDA loss narrowed to 2 million in Q2 from 9.3 million a year ago. And net income this quarter was positive 0.2 million compared to 12.2 million loss. These gains are not one-off. they reflect structural changes that will continue into the second half. So even with lower revenue year over year, the cost structure is leaner, the revenue mix is stronger, and the path to profitability is clear. That is why we remain confident in reaching positive adjusted EBITDA in the later part of 2025. Thank you.

Thank you. I'm showing no further questions. I'd like to turn the call back over to Rohit for closing remarks.

Thank you all for your time and thank you all for the questions. We are very happy and pleased to discuss our Q2 results with you. And as we mentioned, we are very excited of what's in store for us in the second half as we continue our path to profitability. And we look forward to sharing our next Q3 results in the next call. Thank you, everyone.

Thank you for your participation. You may now disconnect. Everyone, have a great day.