MoneyHero Ltd Q2 FY2025 Earnings Call

Hello, everyone. Thank you for joining us, and welcome to MoneyHero 2025 Second Quarter Earnings Conference Call. Joining me on this call today are Rohith Murthy, CEO; and Danny Leung, CFO. Our earnings release was issued earlier today and is now available on our IR website as well as via GlobeNewswire service. Before we begin, I would like to remind you that today's call will include forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Please refer to the safe harbor 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 reconciliation of these non-IFRS measures to the most directly comparable IFRS measures, please refer to our earnings release and SEC filings. All material referenced will be in U.S. dollars, unless otherwise stated. Lastly, a replay of this conference call will be available on our IR website. I will now turn the call over to Rohith, our CEO of MoneyHero Group. Please go ahead.

Thank you, and thanks to everyone for joining. When I became CEO last year, we set a simple goal: reshape MoneyHero for durable, profitable growth. Prioritize quality over quantity, compound gross profit, and maintain discipline. Q2 shows that plan is working. Revenue mix continues to shift towards higher-margin verticals. Cost of revenue is down materially, and adjusted EBITDA losses improved 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 $80 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 reflects strong execution on the key levers we have prioritized: mix, margin, and operating discipline. Now for the progress versus 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 stayed ahead of the competition. 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 focusing on 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 has significantly boosted different revenue streams as our integration deepens. 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 MoneyHero 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 customer acquisition cost per approved application, 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 integrations. 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 achieved profitability. We saw encouraging sequential revenue growth of over 20% from Q1 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 investments scaling, and 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 with 8.6 million members, rising exposure to high-margin verticals, over 260 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 put us in pole position. As such, we will act only when opportunities are strategically aligned and return accretive. Now for the next two to 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 in insurance, recurring wealth monetization, and 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, Rohith, and we appreciate everyone taking the time to join us. As Rohith 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 our 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 very deliberate measures. Our decision to moderate lower-margin credit card volume in favor of higher-quality, higher-margin verticals has shown results. 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 mix 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 benefit 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. Next, 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 disciplined. We are deliberately reinvesting in the higher-margin verticals like Insurance, Personal Loans, and Wealth, which are growing as a share of revenue and offer better unit economics. We are also leaning into strategic initiatives such as Credit Hero Club with TransUnion in Hong Kong and regulated digital asset collaborations with licensed partners like OSL. As Rohith 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, providing a strong foundation for the quarters ahead. With that in mind, our financial priorities remain unchanged: deliver sustainable profitability, strengthen the balance sheet, 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.

And our first question comes from William Gregozeski with Greenridge Global.

Rohith, great quarter. I have a couple of 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, revenue generation, or the depth of AI you're using?

Thanks, Bill, sure. We're embedding AI in how we acquire, convert, and serve customers. We've prioritized production use cases, and we have clear holdouts and KPIs. The impact shows up in lower costs to serve, better conversion, and faster shipping without adding headcount. Regarding what's live now, there are a couple of use cases I can talk about. One is AI in customer support. We are automating 70% to 80% of incoming inquiries while maintaining our customer satisfaction score (CSAT). The benefit is threefold. Number one, we have 24/7 coverage now, so there's reduced abandonment. There's instant response versus a multi-minute wait, and just the ability to absorb volume spikes without proportional staffing. 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. We have automated collection and analysis of all competitor offers and UX changes. This cuts manual research time by approximately 90%. Now this feeds pricing and rewards decisions and really helps us prioritize product work where it improves conversion and also enhances our approval adjusted customer acquisition cost and costs for approval. In terms of near-term revenue drivers, some of them are ready, and some of them are piloting. One is the WhatsApp AI code agent. This is with the auto insurance service we launched in Singapore, and we're testing it and should be ready for deployment soon. Essentially, the agent guides the customer from need discovery to code comparison and handoff for buying inside a messaging platform like WhatsApp. We expect meaningful conversion lift versus a web-based user journey. Second is AI media creation and experimentation. Now this is in the development phase. Our goal is a 70% to 80% reduction in pure creative production spend and just in testing cycles. We expect to generate hundreds of compliant variants automatically and score them to scale across these markets. Why this matters is three points: one is the unit economics; we want a lower cost per approval and lower cost to serve with our cost of rewards held in the low 50s, while improving our gross profit per dollar of revenue; second is our operating leverage; automation allows us to keep headcount flat while throughput increases; and finally, improving conversion and revenue. Guided journeys like the WhatsApp agents I mentioned increase conversion rates and protect funnel throughput outside business offers.

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 regarding top line and bottom line? And then specifically, what the plans are for the insurance business to build that up and any milestones we should look for? And finally, just an update on the wealth and crypto side? If you can update us on where we are in that process of expanding that business.

Absolutely. Let me start with wealth and crypto, and then I'll talk about insurance and finally touch upon how we're thinking about 2026. So when it comes to wealth, we really view it, including digital assets, as an adjacency extending our marketplace beyond cards and loans. We do this with a very capital-light partner-led economics. I want to emphasize that our approach is regulatory-first. We route consumers only to licensed providers in each market. We monetize this through a mix of CPA per funded account, in some cases, a tier revenue share on flow products, or fixed-fee sponsorships. In terms of partnerships and initiatives I can discuss, one is our partnership with OSL in Hong Kong. We announced this collaboration, OSL being a licensed virtual asset platform in Hong Kong. Again, this work stream focuses on compliant onboarding journeys, investor education, and campaign-based acquisition, with no balance sheet exposure for MoneyHero and no custody of customer assets. Regarding 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 shares on selected products, and fixed-fee sponsorships, both around product launches and campaigns. Now talking about the insurance question you mentioned, insurance is really a compounding engine for us. It carries structurally higher margins, renews annually in many lines, and benefits directly from our data, technology, and AI stack. Our strategy has three key thoughts: first, expand the supply depth and products; second, streamline our journeys, and we're using AI for that; and third, keep tightening the unit economics so that insurance and wealth continue to rise as a share of revenue while improving conversion and profitability. Let me elaborate on these three strategic drivers. First, expanding the supply depth and products by rolling out more real-time and end-to-end integrations, both in auto and general insurance across Hong Kong and Singapore, allowing customers to quote, find, and pay seamlessly on our platform. This is the single biggest driver of conversion and economics. For instance, our travel insurance, which has a three-click purchasing journey that's already live, delivered over 40% end-to-end completion in Q2 alone, and we're extending that user experience to additional products and partners. Secondly, streamlining our journeys and lifting conversions. AI will be a big part of this. I've previously discussed our playbook, which helps target shoppers better, recommend appropriate coverage, and resolve service faster. All of this contributes to lower approval adjusted customer acquisition costs, lower costs per approval, and shorter fulfillment times. We're excited about the tests with the AI-assisted WhatsApp service we've implemented for auto insurance in Singapore, and we believe this can improve conversion rates. We aim for insurance and wealth to represent approximately 28% to 30% of group revenue in the second half, aligning with our second-half profitability milestones. Finally, leveraging tighter unit economics and monetization strategies, we want to get the focus on insurance and wealth right, as these areas are engineered to grow and repeat engagement effectively. Our efforts with the MoneyHero Best of Awards attracted over 170 clients, which reinforces engagement and monetization. Lastly, regarding our growth levers for 2026, we have structural growth levers already in place. We will prudently build on these. The growth levers for us will include scaling insurance and wealth, with a mix continually improving to contribute over 30% of our group revenue. This will be supported by broader end-to-end coverage, higher quote-to-bind conversions, and newer product lines in Singapore and Hong Kong. Continuous improvements in conversion rates are paramount. We aim to sustain our travel insurance three-click journeys, scale our auto insurance with real-time pricing into more markets, including the Philippines. Also, AI-driven efficiency will remain critical for elevating high-quality traffic, reducing customer acquisition costs, and maintaining operating leverage. Provider partnerships will continue to be vital, alongside our selective and thought-out expansion of digital asset partnerships with licensed brokers.

Our next question comes from Steven Wang with Speaker Capital.

Can you hear me? Let me ask a question. Similar to Q1, I have seen that the Q2 revenue has decreased year-over-year. What initiatives would the company take to resolve the revenue and return to last year's level?

Okay. May I take this question?

Yes. Go ahead Danny.

Okay. Thanks for the question. As I mentioned, our Q2 revenue was $18 million, down 13% year-over-year. That decline reflects the strategic shift we began in the second half of last year to prioritize revenue quality and unit economics. Importantly, on a sequential basis, revenue actually grew more than 20% from Q1 to Q2, showing that momentum is returning on this half-year base. The model has also improved. Cost of revenue is down to 51%, and insurance and wealth reached 27% of revenue. Our focus now is to layer growth back onto this stronger foundation. Concretely, we will aim to scale higher-margin verticals 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 three-click flow in travel and roll the same pattern into auto as more insurer APIs go live. For wealth and digital assets, we'll continue with 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, supporting gross profit compounding. Secondly, we'll deepen member engagement, as 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 loans, cards, insurance, and wealth. We will also focus on AI-assisted journeys, as we've discussed regarding our WhatsApp service for auto insurance in Singapore to speed up coding and resolution, which we expect to lift conversion. Lastly, we will leverage commercial momentum and selective reinvestment, ensuring that fixed fee and sponsorship programs with banks and insurers are now material and repeatable. These add high-margin dollars alongside transactional commissions. Our cost base gives us room to reinvest selectively in growth channels and content while maintaining a cost base that remains flat, keeping the cost of revenue in the low 50s. Thank you.

I would like to follow up. While I think that the revenue drops have been consistent, I've also seen that the net loss and the EBITDA have improved year-over-year. Would you mind clearly illustrating the factors that contributed to this improvement?

Sure. I'll take this question as well. That's a great question. The improvement is really about building a structurally healthier business model, and that is showing clearly in the numbers. Three drivers stand out, I would think. Firstly, mix shift towards higher-margin products. Insurance and wealth contributed 27% of revenue in Q2, 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. 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. Operating costs fell 37% year-over-year to $20.6 million as we reduced spend across marketing, technology, and also employee cost. Importantly, AI is now embedded in service, approvals, and reward optimization that helps us scale while keeping headcount flat. Thirdly, adjusted EBITDA loss narrowed to $2 million in Q2 from $9.3 million a year ago. Net income for this quarter was positive $0.2 million compared to a net loss of $12.2 million last year. 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 Rohith 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. As we mentioned, we are very excited about 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.