MoneyHero Limited

Good day and welcome to the Money Hero Group fourth quarter and full year 2025 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1 on your touchtone phone. Also note that this call is being recorded. I would like to turn the call over to Gretchen Kwan, Corporate Communications Lead. Please go ahead.

Hello everyone and welcome to Money Hero 2025 Q4 and 4-Year Earnings Conference call. I'm Gretchen Kwan, Corporate Commissions Lead at Money Hero. Before we begin, I would like to remind you that today's call will include forward-looking statements which are inherently subject to risk and uncertainties and may not be realized in the future for various reasons as stated in our earnings release which was issued earlier today and is also available on our IR website. In addition, please note that today's discussion will include both IFRS and non-IFRS financial measures for comparison purpose only. For reconciliations of these non-IFRS measures to the most directly comparable IFRS measures, please refer to our earnings release and SEC filings. Lastly, a webcast replay and a script of this conference call will be available on our IR website. Joining me on the call today is Danny Leung, interim CEO and CFO, who will go over our strategy and business update, operating highlights and financial performance after Q4 and full year 2025. This will be followed by a Q&A section. With that, let me turn the call over to Danny.

Thank you, Gretchen. Good evening, everyone, and thank you for joining us today. It is a privilege to speak with you as we close out what has truly been a transformative year and quarter for MoneyHero. Before diving into our results, I want to briefly address the leadership transition announced earlier this month. Since stepping into the interim CEO role, I've reflected on my time with Money Hero since late 2024, when the company began navigating a strategic repositioning. I want to thank Rohit for his contribution during his tenure. As Money Hero pivots to scaling profitable growth, the board has initiated a research for permanent CEO to lead this next phase. Having guided us through our two-year transformation, I'm fully confident in our management team's ability to execute seamlessly during this interim period. Our strategic vision remains unchanged, and our focus is entirely on capitalizing on the opportunities ahead. And those opportunities are built on a rapidly strengthening foundation. I'm pleased to report that we delivered fourth quarter net profit of $0.5 million, a significant turnaround from a net loss of $18.8 million in the same period last year. This was achieved alongside adjusted EBITDA of $0.7 million, marking our first ever adjusted EBITDA gain since we listed on Nasdaq. Our performance throughout 2025 demonstrates these clear sequential executions toward achieving better revenue mix, cost base, and technology platform. This momentum was built consistently throughout the year with our adjusted EBITDA path improving quarter by quarters. We systematically progressed from an adjusted EBITDA loss of $3.3 million in the first quarter to a loss of $2 million in the second quarter. narrowing further to a loss of $1.8 million in the third quarter before finally crossing the break-even point this quarter. For the full year, adjusted EBITDA loss improved 73% to $6.4 million from $23.7 million last year. And our net loss narrowed 86% to $5.2 million from $37.8 million. This performance validates our strategic repositioning towards achieving better revenue mix, cost base, and technology platform. Fourth quarter revenue grew 27% year-over-year to 20 million, driven by a strong performance in our core markets, with Singapore revenue surging 56% year-over-year and Hong Kong growing 27% year-over-year. These two markets represent 86% of revenue during the quarter, up from 79% a year ago, reflecting our deliberate concentrations on markets with the strongest unit economics. At the same time, Taiwan and the Philippines continue to gradually recover as the operational issues seen earlier in the year following the exit of Citibank fade. Full year 2025 revenue was 73.4 million. our strategic pivot toward healthier revenue quality and accelerating momentum toward year-end. Crucially, our cost of revenue for the full year also declined 7 percentage points year-over-year to 51% of revenue. This structural improvement was driven by a shift in revenue mix and optimized reward cost. Our deliberate shift toward higher quality, higher margin for the cost, particularly insurance and wealth, is directly expanding our margins and reinforcing the structural strength of our business. During the fourth quarter, revenue from insurance and wealth products together accounted for approximately 30% of revenue, highlighted by wealth revenue accelerating strongly with 50% year-over-year growth. We see a clear path for high-margin protocols to make a meaningfully larger share of our revenue mix over the next few years. These verticals already deliver twice the incremental profitability of our lower margin verticals and generate steady recurring customers even before AI upside. This deliberate mix shift we have been signaling all year combined with disciplined capital allocation into these segments is central to how we are building durable, compounding earning power, rather than chasing volume-led growth. Ultimately, this structural evolution in our mix, coupled with better approval rates and optimized reward costs, is expanding our margins and elevating the overall quality of our earnings. For the full year 2025, total operating costs and expenses excluding foreign exchange difference, fell 27% year over year, while fourth quarter expenses declined 15% year over year. Technology costs dropped 59%, and employee benefit expenses fell 33% the full year, supported by AI automation, which now touches up to 70% of customer service queries. This is a clear demonstration of margin-first execution. In practical terms, this means our cost base will not re-inflate as we scale. Instead, incremental revenue will increasingly flow through to the bottom line, reinforcing our confidence in sustaining and compounding the profitability we have now achieved. We've made strong progress with our AI initiatives. During the year, AI automation touched up to 70% of customer service queries. Crucially, in December 2025, AI successfully resolved 47% of customer service queries without any human intervention, demonstrating how we are scaling operations and product support without proportionally adding headcount. The impact of this leverage is already highly visible in the fourth quarter, allowing us to deliver 12% more approval approved applications year-over-year in the fourth quarter while simultaneously cutting employee benefit expenses by 32%. We are systematically driving improvements in approval quality, customer acquisition cost efficiency and funnel conversion. For example, in Singapore, our car insurance sales board is now in beta in WhatsApp, delivering a natural conversational AI experience that replaces complex forms and meaningfully reduce acquisition costs. In Hong Kong, Credit Hero Club is building a recurring base of high intent users through personalized credit insights and monitoring. Importantly, our AI are continuously trained on proprietary intent, behavioral, and approval data from our 9.4 million members. This creates a highly defensible data mode, positioning Money Hero as one of Southeast Asia's most advanced AI-native financial decisioning platform. I will take the next few minutes to walk through the mechanics of our P&L, focusing on the data, the operational drivers behind these numbers, and how our financial profile has structurally evolved across both the fourth quarter and the full year. Let me begin with revenue. For the fourth quarter, we reported $20 million in revenue, 27% year-over-year increase. This represents the strongest quarterly top line growth we have seen in 2025, proving that the recovery pattern we established mid-year has compounded into sustainable momentum. When looking at the full year, revenue fell 8% year-over-year to $73.4 million. That decline needs to be interpreted precisely in the context of the deliberate reshaping of our volume mix, particularly in the first half of the year. We intentionally scaled back low margin, high volume products to prioritize margin discipline and healthier revenue quality. Crucially, this strategy yield exactly the structural leverage we intended. our cost of revenue for the full year decreased by 19% year-over-year to $37.3 million, dropping 7 percentage points to account for just 51% of revenue. The modest annual headline revenue decline is a sign that our strategic pivot is a success. We shed unprofitable volume, optimized reward costs, and are now growing rapidly again on structurally stronger, higher margin base. What gives us absolute confidence in this path is the rapidly improving quality of our revenue base. During the fourth quarter, combined revenue from insurance and wealth products increased 31% year over year to 5.9 million, accounting for 30% of total revenue. Looking at the full year, wealth revenue grew 19% to 10.1 million, accelerating to a massive 50% year-over-year growth in Q4 alone, while insurance revenue grew 11% to $9.1 million. Together, they now represent 26% of our full-year revenue, up from 21% a year ago and just 12% in 2023. The fundamental shift in our foundation is the core engine of our margin expansion, improving the predictability and durability of our earnings. At the same time, we saw a resurgence in our core credit card vertical, which grew 38% year-over-year in the fourth quarter, proving we can rapidly expand high-margin products without sacrificing the strength of our core business. Looking geographically, Singapore and Hong Kong continue to serve as our primary growth engines. Singapore was the standout performer in the quarter, with revenue surging 56% to 7.9 million. Hong Kong also delivered exceptional growth, up 27% to 9.4 million, demonstrating our ability to build a recurring base of high intent users. Together, these two high unit economic markets represent 86% of our total Q4 revenue. Meanwhile, Taiwan and the Philippines generated 1.2 million and 1.5 million respectively in the fourth quarter. These markets are steadily recovering as the operational disruption seen earlier in the year following the exit of Citibank are now firmly behind us. Now let me turn to operating expenses. Our focus has been on driving operating leverage across every major category. Total operating costs and expenses, excluding foreign exchange differences, decreased 15% year-over-year to 21.4 million in the fourth quarter, and 27% year-over-year to 84.2 million for the full year 2025. Looking at the specific expense lines, technology costs declined sharply by 71% year-over-year to 0.4 million in Q4, and 59% year-over-year to 3 million for the full year. By retiring legacy platforms, consolidating vendors, and impacting AI-driven automations. We are enabling the business to ship features faster without inflating our cost base. Advertising and marketing expenses decreased 20% year-over-year to $17.3 million for the full year, reflecting more target data-driven campaign allocations. Employee benefit expenses were notably lower, decreasing 32% year-over-year to 4 million in Q4, and 33% year-over-year to 16.2 million for the full year. As we highlighted earlier, this sets the stage for multi-year operating leverage. Increases in approved application volumes, which grew 12% this quarter, no longer require proportional increase in personnel. For the fourth quarter, this contributed to our first positive adjusted EBITDA of $0.7 million and a net profit of $0.5 million, a substantial turnaround from the $18.8 million net loss a year ago. For the full year, our adjusted EBITDA loss narrowed sharply by 73% to $6.4 million, and our net loss improved at 86% to $52 million. From a balance sheet perspective, We are operating from a position of resilience. We ended the year completely debt-free with $31.2 million in cash and cash equivalents and $37.5 million in net current assets. Crucially, our cash position represents a sequential increase of $3.3 million from $27.9 million from Q3, highlighting our gradual transition into a cash-generative business. We have now reached this profitability point in Q4 as we have been working towards. These milestones validate the difficult but deliberate choice we made over the past two years and set a strong foundation as we transition from turnaround to sustainable cash-generative growth in a capital-light, member-centric model. Looking ahead, we expect our full year 2026 adjusted EBITDA to exceed 2025 levels. This will be driven by the continued expansion of our high margin insurance and wealth protocols, AI driven operating leverage, and the strong conversion of member base into recurring multi-product customers. Thank you. So, first we can start the Q&A section.