Moneyhero Limited’s Earnings Call: Path to Profitability

Moneyhero Limited ((MNY)) has held its Q3 earnings call. Read on for the main highlights of the call.TipRanks Cyber Monday Sale Claim 60% off TipRanks Premium for data-backed insights and research tools you need to invest with confidence. Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off The recent earnings call for Moneyhero Limited was marked by a cautiously optimistic sentiment. The company showcased significant strides in operational efficiency, cost reductions, and improvements in its revenue mix, which are paving the way towards profitability. However, the call also highlighted ongoing challenges in achieving substantial year-over-year revenue growth and market recovery in certain regions. Sequential Revenue Growth Q3 was a positive quarter for Moneyhero Limited, with the company reporting $21.1 million in revenue. This figure represents a 17% increase quarter-on-quarter and a 1% increase year-on-year, marking the second consecutive quarter of double-digit sequential revenue growth. This growth underscores the company’s efforts to enhance its revenue streams despite broader market challenges. Improvement in Adjusted EBITDA The company reported a significant improvement in its adjusted EBITDA, with losses improving by 68% year-on-year to a negative $1.8 million. Additionally, the adjusted EBITDA margin saw a remarkable improvement of over 1,800 basis points year-on-year, moving from minus 26.5% to minus 8.4%. This highlights Moneyhero’s commitment to enhancing its financial health. Cost Reduction Success Moneyhero Limited has made notable progress in reducing its operating costs, which fell by 13% year-on-year to $23.9 million. Key areas of cost reduction included technology costs, which decreased from $2 million to $0.9 million, and employee benefit expenses, which dropped from $5.7 million to $4.2 million. These reductions are a testament to the company’s effective cost management strategies. Project Odyssey AI Implementation Project Odyssey has been a significant driver of efficiency for Moneyhero. The project focuses on enhancing performance marketing, content automation, and credit scoring intelligence, leading to significant improvements in customer acquisition cost (CAC) efficiency and service automation. This initiative is expected to continue contributing to the company’s operational success. Improved Revenue Mix The company’s revenue mix has improved, with insurance and wealth now accounting for 23% of total revenue. Insurance revenue increased by 13% year-on-year, while wealth revenue grew by 5% year-on-year. These segments are contributing to higher margins and are seen as key growth areas for Moneyhero. Positive Outlook for Q4 Looking ahead, Moneyhero Limited is optimistic about Q4, which is expected to be the first profitable quarter on an adjusted EBITDA basis since listing. This positive outlook is driven by strong partner budgets and a favorable revenue mix, positioning the company for sustained growth. Flat Year-over-Year Revenue Growth Despite the positive sequential growth, Moneyhero’s year-over-year revenue growth was only 1%, indicating challenges in expanding beyond previous levels. This highlights the need for the company to explore new avenues for growth to achieve more robust year-over-year results. Hong Kong Revenue Decline The earnings call revealed a slight decline in Hong Kong revenue year-on-year, attributed to the proactive reduction of low-margin credit card campaigns. This strategic decision reflects the company’s focus on optimizing its revenue mix for better profitability. Market Recovery Challenges Moneyhero is facing challenges in market recovery, particularly in Taiwan and the Philippines, following the exit of Citibank’s operations. Neither market has returned to full run rate yet, indicating ongoing recovery efforts are needed to regain momentum. Forward-Looking Guidance During the earnings call, Moneyhero Limited provided an optimistic outlook for the future. The company emphasized a strategic reset aimed at enhancing profitability, supported by a 17% quarter-on-quarter revenue growth and a 68% improvement in adjusted EBITDA loss year-on-year. The company anticipates Q4 to be its first profitable quarter on an adjusted EBITDA basis since listing, driven by AI-driven efficiencies and strategic investments in high-margin verticals like insurance and wealth. In summary, Moneyhero Limited’s earnings call presented a mixed yet promising picture. While the company has made commendable progress in operational efficiency and cost management, challenges remain in achieving substantial year-over-year revenue growth and market recovery. The positive outlook for Q4 and strategic initiatives like Project Odyssey suggest that Moneyhero is on a path to sustainable growth and profitability.