MoneyLion (US:ML)2024-03-07 17:30Financial Data and Key Metrics Changes - MoneyLion achieved record revenue of $423 million for 2023, representing a 24% year-over-year growth [4][31] - Gross profit margin expanded to 60% in 2023, up from 57% in 2022, with Q4 2023 gross profit margin at 63% [6][31] - Adjusted EBITDA reached a record $46 million in 2023, with an adjusted EBITDA margin of 11% [7][31] - Net loss before other income and expenses was $5.3 million for 2023, significantly reduced from a loss of $98.7 million in 2022 [7][34] Business Line Data and Key Metrics Changes - The consumer business generated record revenue, contributing significantly to the overall growth [4][31] - The enterprise business saw a decline in personal loan revenue from 85% in 2022 to 60% in 2023, indicating diversification into non-lending verticals [22][23] - Total originations in Q4 2023 were $644 million, up 30% year-over-year, with total originations for 2023 at $2.3 billion, up 27% [29][30] Market Data and Key Metrics Changes - Total customer inquiries reached approximately 205 million in 2023, up 78% from 115 million in 2022, leading to over 14 million total customers by year-end [8][27] - The mix of third-party product consumption increased to 48% by the end of Q4 2023, up from 26% in Q4 2022 [9][10] Company Strategy and Development Direction - The company aims to reach its first positive GAAP EPS quarter in 2024, focusing on efficient growth while maintaining cost discipline [7][34] - MoneyLion plans to expand its product verticals beyond lending, including insurance, credit cards, and mortgages, to diversify revenue streams [9][36] - The strategic alliance with EY is expected to enhance distribution capabilities and provide turnkey solutions for smaller banks [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving profitability milestones and highlighted the importance of macroeconomic conditions in driving growth [7][34] - The company is optimistic about the demand for its consumer products and the potential for increased conversions as the macro environment normalizes [36][41] Other Important Information - The company closed 2023 with $92 million in cash and paid down $25 million of senior debt, with no additional repayments due until 2026 [32][33] - Management emphasized the importance of optimizing customer acquisition costs and improving lifetime value through cross-selling and upselling strategies [28][66] Q&A Session Summary Question: Can you provide insights on the EY partnership and its potential? - Management indicated that the partnership with EY is expected to be meaningful, focusing on co-building digital solutions for midsized financial institutions [44][46] Question: How will the CFPB's changes to credit card late fees impact your offerings? - Management believes the changes will create opportunities for MoneyLion to help consumers navigate various credit products effectively [48][50] Question: Can you clarify the decline in personal loan revenue and its implications? - Management clarified that while personal loan revenue as a percentage decreased, the overall business grew due to diversification into other verticals [53][55] Question: What is the current traction of the MoneyLion WOW subscription? - Management noted that the WOW membership is in beta and is being positioned as a valuable upgrade for existing customers, with plans for increased marketing in the future [56][74] Question: How does the company plan to allocate capital moving forward? - Management stated that the focus will be on scaling the business and optimizing the customer acquisition funnel rather than prioritizing debt reduction at this time [70][71]