MoneyLion Inc. (NYSE: ML), a leading financial technology company, reported a record revenue of $135 million in the third quarter of 2024, marking a 23% increase from the previous year. The company also announced an upward revision of its full-year revenue guidance to $536 million to $541 million. Adjusted EBITDA for the quarter was a record $24 million, surpassing the company's projected range and reflecting an 18% margin. The strong financial results were attributed to significant customer growth, with the total reaching 18.7 million—a 54% increase year-over-year—and the expansion of its enterprise segment.
Key Takeaways
- MoneyLion's Q3 2024 revenue reached a record $135 million, a 23% year-over-year growth.
- Full-year revenue guidance raised to $536 million to $541 million, with Q4 revenue expected to be between $149 million and $154 million.
- Adjusted EBITDA hit a record $24 million with an 18% margin.
- Customer base grew to 18.7 million, with a customer acquisition cost under $20.
- Product consumption on the platform reached 3 million, up from 2.4 million in the previous quarter.
- MoneyLion Checkout launched to improve conversion rates for enterprise partners.
Company Outlook
- MoneyLion anticipates continued growth in consumer and enterprise revenue streams.
- The company aims to become the leading destination for financial decisions within three years.
- Plans to invest in brand marketing starting in Q4 2024 to enhance direct-to-consumer offerings.
Bearish Highlights
- The company reported one-time legal expenses totaling $8 million, affecting EBITDA adjustments.
- No specific update on October's performance was provided.
Bullish Highlights
- MoneyLion Checkout launched with positive early indicators, including a 25% improvement in click-through rates.
- The company is expanding into new verticals such as auto loans and insurance.
- Favorable macroeconomic conditions are expected to improve conversion rates.
Misses
- Despite record performance, the company did not provide specific updates for October's performance.
Q&A Highlights
- Executives discussed strategies to enhance brand awareness and customer acquisition.
- Leveraging partnerships with TransUnion (NYSE:TRU) and Plaid to provide personalized offers.
- Focused on reducing corporate debt costs, estimated between SOFR plus 150 to 300 basis points.
In summary, MoneyLion's Q3 2024 Earnings Call showcased a strong financial performance, with record revenue and customer growth. The company is optimistic about its future, with plans to expand its product offerings and leverage technology to enhance customer acquisition and retention. MoneyLion's strategic initiatives, including the MoneyLion Checkout and expansion into new financial verticals, position it well for continued growth in the evolving financial services landscape.
InvestingPro Insights
MoneyLion's impressive Q3 2024 results are further illuminated by recent InvestingPro data. The company's market capitalization stands at $608.31 million, reflecting investor confidence in its growth trajectory. This aligns with the InvestingPro Tip that suggests "net income is expected to grow this year," supporting the company's positive outlook.
The financial technology firm's revenue growth of 23.75% over the last twelve months, as reported by InvestingPro, closely mirrors the 23% year-over-year increase mentioned in the Q3 earnings report. This consistency in growth metrics underscores MoneyLion's ability to maintain its expansion pace.
Another InvestingPro Tip highlights that MoneyLion has seen a "significant return over the last week," with data showing a remarkable 61.14% price return in just one week. This recent stock performance may be a direct response to the strong Q3 results and raised guidance, indicating that investors are reacting positively to the company's financial achievements.
It's worth noting that MoneyLion is trading at a high earnings multiple, with a P/E ratio of 262.74. While this suggests high growth expectations, it also implies that investors are pricing in substantial future earnings increases, aligning with the company's ambitious growth plans outlined in the earnings call.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for MoneyLion, providing a deeper understanding of the company's financial health and market position.
Full transcript - MoneyLion Inc (ML) Q3 2024:
Operator: Thank you for standing by. My name is Mandeep and I’ll be your operator today. At this time, I’d like to welcome to MoneyLion’s Q3 2024 Earnings Call. [Operator Instructions] Thank you. We’d now like to turn the call over to Sean Horgan, Head of Investor Relations. You may begin.
Sean Horgan: Thank you, operator. Good morning and thank you all for joining us for our third quarter 2024 earnings conference call. With me today are MoneyLion’s CEO, Dee Choubey; and CFO, Rick Correia, to discuss our results. You can find the presentation accompanying our earnings press release on our Investor Relations website at investors.moneylion.com. Please note that any forward-looking statements made in this commentary are subject to our Safe Harbor statement, which can be found in our SEC filings and our earnings press release. With that, I’ll turn the call over to Dee.
Diwakar Choubey: Thank you, Sean. Good morning and thank you all for joining us for our third quarter 2024 earnings call. Last quarter, we introduced our vision of becoming the number one destination for financial decisions. In Q3 2024, we took decisive steps towards this outcome. We delivered record performance in the third quarter, and we see that momentum continuing with accelerating revenue growth in the fourth quarter. This reflects our confidence in achieving our vision. And now let’s turn to the key takeaways for the third quarter. First, we achieved record quarterly revenue of $135 million. This represented 23% year-over-year growth. Building on this quarter, we’re raising our full year 2024 revenue guidance to $536 million to $541 million, up from $525 million to $535 million. Based on our new guidance, we expect revenue in the fourth quarter of $151 million at the midpoint. This represents 34% year-over-year growth, a significant increase from the comparable 23% year-over-year growth in the third quarter. Second. We generated record adjusted EBITDA of $24 million for the quarter, which exceeded our guidance range of $18 million to $21 million. This reflects an adjusted EBITDA margin of 18%, above the high end of our guidance of 13% to 15.8%. We now expect full year 2024 adjusted EBITDA in the range of $88 million to $93 million, up from our prior guidance of $80 million to $87 million. This new range reflects an adjusted EBITDA margin of 16.8% at the midpoint. Importantly, we once again generated positive cash flow during the quarter, and we ended the quarter with a cash balance of $112 million, up from $98 million at the end of the second quarter. Third, we generated record enterprise revenue in the quarter. Enterprise revenue grew 18% quarter-over-quarter to $45 million. This reflects continued momentum on the heels of 17% quarter-over-quarter growth in the prior quarter. Lastly, our strategic initiatives are fueling growth by improving conversion metrics across our marketplace. This is highlighted by the launch of MoneyLion Checkout, our end-to-end solution, that we believe will unify and simplify the financial product shopping experience in the same way that online marketplaces fit for the online travel industry. These are crucial drivers that position MoneyLion for accelerating growth exiting the year. We expect this momentum to continue with Enterprise revenue growth above 18% quarter-over-quarter in Q4. Turning to customer growth. We ended the third quarter with 18.7 million total customers, marking a 54% year-over-year increase and 1.6 million new customers compared to Q2. To put this into perspective, total customers have grown about 3.5x since Q3 of 2022. And we’re happy with this growth, but more importantly, we’re increasing the products consumed on our platform. By the end of Q3 2024, 30.7 million total products have been consumed on our platform. Importantly, we increased our product consumption from $2.4 million in Q2 to $3 million in Q3. This underscores the success of our land-and-expand strategy. Every time we add a customer to the MoneyLion platform, we have the ability to cross-sell. We target and monetize these customers with our industry-leading personal financial management, or PFM, tools and financial offers. We added 1.8 million third-party products alongside 1.2 million first-party products, a proof point in our strategy to target an expanding target addressable market and a diverse customer base. This demonstrates the increasing scale of our marketplace-first its platform, which can help all Americans make their best financial decisions. Over time, we have made MoneyLion more and more relevant as a product for every American. Our technology drives better outcomes for both consumers and enterprise partners, fueling revenue growth and operating leverage. And in a word, our machinery is working. MoneyLion is the ultimate financial marketplace. This is our strategic advantage, as we’re able to enjoy low-cost customer acquisition and then we nurture consumers over their financial journeys and product buying inflection points. This engagement leads to higher ARPUs and lifetime value. It bears repeating because when we talk about enterprise growth, we’re also talking about the integration of the marketplace within the MoneyLion consumer app, which is one of the key components of the enterprise business equation. Enterprise continues to gain momentum with 17% quarter-over-quarter growth in Q2 followed by 18% growth in Q3 and further acceleration is expected in Q4. Our consumer marketplace is one of the fastest-growing parts of our business, and it’s an important lever that helps us generate high contribution margin revenue. Our first-party products like Instantcash and our full suite of banking and investing capabilities continue to drive year-over-year growth in our consumer business with high contribution profit margins. Because of our large base of returning customers, consumer revenue is largely highly recurring in nature. We control the growth levers here as well. This gives us a lot of confidence to profitably acquire new cohorts of customers using our flywheel advantage. Across the digital consumer financial landscape, MoneyLion is now renowned as the most full-featured personal finance platform in the industry. This is important because it provides insights and tools that keep customers returning to our platform for valuable guidance and advice, insights and content. Further, consumer marketplace conversions are increasing as customers repeatedly turn to our ecosystem for financial decisions. Our web and mobile digital products are built to engage consumers with guidance across financial inflection points. Just to name a few, we’ve built calculators and insights to inform product buying decisions; community features like user-generated content and commenting. We have a consumer marketplace with a broad set of third-party products and offers, and of course, our premium membership, WOW, which provides real cash back on financial decisions. So now let’s turn to Enterprise. Our Enterprise business is thriving across both macroeconomic and fundamental factors. We are becoming the de facto ecosystem for any financial services provider in the industry looking to acquire highly vetted in-market consumers. Our network expanded to over 1,200 enterprise partners in the third quarter, driving almost 90 million total customer increase. So I’ll start with the macroeconomic environment as it relates to our enterprise business. In the third quarter, within our largest vertical, personal loans, we noted in our last two earnings calls that the current credit cycle likely bottomed at the end of Q1. Conversion rates, or the percentage of approved applications, improved modestly in Q3, but still remained below historical levels. We expect upside in loan conversions as interest rates decrease. We’ve added new partners across verticals. And in the third quarter, nonpersonal loan revenue was about half of the marketplace revenue, underscoring the success of our diversification efforts. So far in the fourth quarter, we’ve seen conversion rates trend positively. We expect continued stabilization through the first half of next year as well as lenders revisit their acquisition strategies in a lower interest rate environment. Our focus remains on revenue diversification and providing even more software development capabilities, business intelligence and analytics and conversion funnel optimization tools to our enterprise partners. We believe our edge in optimizing our software leads to increased revenue opportunities for all participants in our marketplace. Deepening our presence in key verticals is another strategy to grow the value of our marketplace. This is beginning to bear fruit, but we believe we’re only in the early innings of penetrating these verticals. The key verticals we’re focused on include credit cards, mortgages and auto insurance. Let me touch on each of these briefly. In credit cards, we’re hosting the decisioning models of our partner issuers to deliver personalized pre-qualified offers to our users. In addition, we are leveraging personalized life cycle campaigns backed by new data sources to optimize conversions. We’re making progress on our go-to-market efforts for mortgage-related products like home equity line of credits with many more features and capabilities to come. In the month – in the coming months, we plan to launch real-time mortgage pricing displays, contents and widgets across the MoneyLion ecosystem. In auto insurance, we saw substantial growth in the third quarter by calibrating the right product and offers for the right segments of our vast customer base. This will grow as we continue refining the capabilities. Our goal is to grow these verticals to a similar scale as what we today enjoy in personal loans. These diversification efforts expand our revenue opportunity and smooth out our enterprise revenue, strengthening our naturally hedged business across macroeconomic cycles. We are super excited about MoneyLion Checkout. It transforms the consumer experience disrupting the industry while improving our unit economics. This brings to bear multiple facets of our technology development into one platform that reduces significant friction for the consumer. When I say that MoneyLion is the must-have partner for customer acquisition and consumer finance, this is yet another reason why. Let me explain. When consumers visit Amazon (NASDAQ:AMZN) to buy something like sneakers, they expect to search, shop, compare and complete their purchase all in one place. They don’t expect to be redirected to nike.com to finish the transaction. Consumer finance has lacked this kind of seamless experience until now with MoneyLion Checkout. MoneyLion checkout lets consumers complete financial transactions across hundreds of providers in real-time without leaving the MoneyLion platform. By integrating consumer and third-party data directly with MoneyLion’s product partners, these providers can increase conversions and expedite onboarding, whether a consumer is borrowing for a loan, signing up for a credit card, starting a savings account or choosing among the dozens of other product categories MoneyLion offers, they can complete the entire transaction within MoneyLion’s dynamic consumer marketplace. So how does this translate to positive outcomes for our enterprise partners? Well, we’re already seeing great results. Our pilot partners leveraging MoneyLion Checkout have seen increases across key metrics such as a 25% improvement in click-through rate, a 2.5x increase in conversions and a 30%-or-more increase in revenue. So we’re excited to continue rolling out MoneyLion checkout across our network and driving better outcomes for both consumers and enterprise partners. So with that, I’ll turn the call over to Rick to provide a more detailed update on our financials.
Rick Correia: Thanks, Dee, and good morning to everyone. I look forward to sharing details about our financial performance for the third quarter ending September 30, 2024. I will also discuss our guidance and outlook for the fourth quarter and full year of 2024. For more information, please refer to our GAAP consolidated financial statements and non-GAAP reconciliations which are available in today’s earnings release and our 10-Q filing. First. Our customer acquisition and life cycle strategy continues to translate into strong customer and product ads. Our top of funnel expanded to almost 90 million total customer inquiries in the third quarter of ‘24, up from $85 million in the prior quarter. These inquiries converted into $1.6 million new total customers and 3 million total products consumed during the quarter, up from 2.4 million products in Q2. Our top of funnel demonstrated significant growth from an already massive base in Q3. This demonstrates that our machinery is working. As we scale and enhance our customer data platform, we deliver more personalized offers and recommendations to consumers, leveraging our life cycle marketing engine. Over time, this formidable data advantage compounds and ultimately manifest our vision of becoming the #1 destination for financial to scale in a way that is unrivaled in the industry. The 30-60-90 framework demonstrates MoneyLion’s mix of contribution margin revenue. 30, 60 and 90 represent different channels through which customers can enter the MoneyLion ecosystem and the approximate contribution margin associated with that channel. Importantly, these customer journey channels are not linear. They are different customer acquisition entry points to point along their financial journey. 30 is our B2B channel. This represents the broad distribution we have across our network of channel partners, and is the engine that allows us to match customers with products across the Internet. When a customer converts in this channel, our product partner pays us an affiliate fee and we realize an approximately 30% contribution margin. This is the backbone of our massive top of funnel and creates our customer acquisition advantage. In addition, this channel fuels our advantage. With 80 million quarterly inquiries, this channel provides deep insights into consumer profiles, including their propensity for a basket of financial products. This massive funnel gives MoneyLion a fertile user base, the life cycle and remarket to at a later point along their financial journey. 60 represents our first-party products. When someone downloads the MoneyLion app and takes one of our various first-party products, we typically earn around 60% contribution margin. We continue to innovate by developing new first-party features and products, including our WOW membership and the recently launched Money Black Card. 90 represents our consumer marketplace. This customer converts from an extensive catalog of third-party products in our ecosystem. As Dee mentioned, our consumer marketplace is a key component of our business equation. It is one of the fastest-growing parts of our business and represents revenue that typically has around a 90% contribution margin. As we continue to scale this revenue stream, our incremental revenue will drive more contribution profit dollars than it would otherwise through other channels. Our direct-to-consumer brand investments are a part of our high-priority strategy to take market share of a large fee pool and shift our revenue mix over time. In sum, our progressive approach to being the #1 destination for financial decisions accelerates our mix of high contribution margin enterprise revenue and ultimately driving margin expansion over time. Turning to our unit economics. In the last 12 months ending Q3 ‘24, we added 6.6 million total customers. Our customer acquisition cost, or CAC, is under $20. This continues to be a great outcome relative to the industry. The slight quarter-over-quarter increase coincides with our strategy to accelerate the mix of the high contribution margin enterprise revenue related to our 30-60-90 strategy. Next (LON:NXT), our payback period was approximately 6 months and ARPU was around $32. These unit economics underscore our success in our TAM expansion strategy, scaling our total customers to 18.7 million in the third quarter from 5.4 million in the same quarter 2 years ago. As Dee mentioned, our land and expand strategy is also working, as we increased product consumption to $3 million in Q3 from $2.4 million in Q2. As mentioned, our technology enables us to monetize a large customer base at high incremental margins. We are excited to unlock the value of our entire ecosystem through our direct-to-consumer investments. Now let me turn to our recurring revenue trends. In Q3 ‘24, 78% of our direct-to-consumer revenue or revenue from our first-party products and consumer marketplace came from historical cohorts of customers. We are seeing continued strength in our first-party products. In the third quarter of 2024, total originations for these products were 776 million, representing an increase of 38% year-over-year. Credit performance trends remained consistent in Q3 ‘24. Our finance receivables provision expense as a percentage of total originations was 3.1% in Q3 2024. Excluding first quarter seasonality, Q3 was one of our best-performing quarters for provision expense as a percentage of originations. This is a great outcome and a predictable one, as we actively manage our credit performance to be in a healthy range and have a high degree of confidence in our ability to continue to do so going forward. As a reminder, we historically experienced a seasonal benefit in provision expense as a percentage of originations in the first quarter of every year. As we transition into how we finance consumer originations into a forward flow arrangement, we will no longer see this seasonal variance. We expect loss rates to remain within a healthy range. Now turning to some of our other key financial metrics. In the third quarter, MoneyLion generated a record $135 million of revenue, representing 23% year-over-year and a 4% quarter-over-quarter growth. In the fourth quarter, we expect this growth to accelerate to 34% year-over-year to $151 million, as implied by the midpoint of our upwardly revised full year ‘24 guidance. Now for an update on profitability. As it relates to the third quarter, MoneyLion generated $24 million in adjusted EBITDA. This represents an adjusted EBITDA margin of 18%. Additionally, over the last 12 months ending Q3 ‘24, this represents $83 million of adjusted EBITDA. We are consistently generating positive cash flow. At the same time, we are reinvesting in growth and taking market share. Accordingly, we ended the third quarter with $112 million in cash, up from $98 million at the end of the second quarter of ‘24. As we invest in growth initiatives, we expect adjusted EBITDA margin between 14% to 18% in Q4 2024. While we can throttle back growth to drive near-term margin expansion, now is not the time. The opportunity in front of us is too big. Instead, we are focused on increasing marketing to drive acquisition and importantly, take market share. Now turning to guidance. In the third quarter of 2024, our results met or exceeded guidance across all metrics. Revenue was $135 million within our guidance range of $133 million to $138 million, representing a 23% year-over-year growth. Adjusted EBITDA was $24 million, above the high end of our guidance range of $18 million to $21 million. Turning to our outlook. We are positioned for accelerating growth in the fourth quarter. For Q4 ‘24, based on our full year guidance, we expect revenue between $149 million to $154 million, representing 32% to 36% year-over-year growth. At the midpoint, this represents growth of 34% year-over-year, up from 23% growth in Q3 ‘24. We also expect adjusted EBITDA of $22 million to $27 million, representing adjusted EBITDA margin of between 14.1% to 17.9%. For the full year of 2024, we now expect revenue between $536 million to $541 million, representing 27% to 28% year-over-year growth. At the midpoint, this represents 27% year-over-year growth for the full year of 2024 compared to 25% growth in our prior guidance. We expect adjusted EBITDA of $88 million to $93 million, representing approximately 16.3% to 17.4% adjusted EBITDA margin. At the midpoint, this represents an adjusted EBITDA margin of 16.8%, up from our prior guidance of 15.8%. With that, I’ll return the call to Dee for his closing remarks.
Diwakar Choubey: Thank you, Rick. As we look ahead to the future, given our position as the first consumer digital finance ecosystem, we’re focused on taking market share and expanding the scope of our opportunity. We’ve seen continued year-over-year growth in our consumer business with high contribution margins. This business has generated around $350 million over the last 12 months ending the third quarter, up 30% year-over-year. Moreover, despite broad economic concerns, we’ve grown and managed credit incredibly well, with loss rates averaging below 3.5% over the last eight quarters. We’ll continue to deepen our presence across the auto insurance, credit cards and mortgage verticals. We will open ourselves up to serviceable revenue pools, all three of which we believe represent $1 billion or more of annual revenue. We have the technology to serve these markets well, and we intend to capitalize on this opportunity going forward. As mentioned earlier, our new MoneyLion Checkout experience minimizes friction in the financial product shopping journey by offering an end-to-end experience. We’re incorporating new data sources through strategic partnerships, enabling us to deliver even more personalized recommendations it offers. This improves the consumer experience and adds value to our product partners. We cover our 30-60-90 mix shift strategy in detail today because it is key to our business equation. This strategy enables us to increase our mix of 90% contribution margin revenue. We will be going direct-to-consumer with brand marketing investments as soon as Q4 2024, driving consumers directly to MoneyLion’s owned and operated properties. There, we can engage with them directly and earn high contribution margin revenue. Together, these initiatives will drive both revenue growth and margin expansion for us. We’re incredibly proud of our results for Q3 2024 and the growth in front of us. And as such, we’ve raised our ‘24 guidance, implying accelerating revenue growth and healthy margins in the fourth quarter. Now is the time to lean into growth, as we enter new markets and leverage our technology, to enhance financial decisions for all Americans. Our technology enables our vision to become the number one destination for financial decisions within 3 years. To do so, we’re playing offensive discipline as MoneyLion marks on the next horizon of its evolution. And with that, I’d like to thank you all for joining us today. And I’ll turn the call back over to the operator for Q&A.
Operator: Thank you. [Operator Instructions] Our first question comes from the line of Kyle Peterson with Needham. Please go ahead.
Kyle Peterson: Great. Thanks, guys. Good morning. Nice results. I wanted to start off on Enterprise. Appreciate some of the commentary on conversion rates and the expectations for the fourth quarter. I just wanted to see if you guys could provide any color as to either what you guys have seen since the Fed cut rates last month or any October trends that kind of back up the pretty robust quarter-on-quarter outlook for the fourth quarter?
Diwakar Choubey: Hey, Kyle, it’s Dee. Thanks for the question. Look, we’ve noted in our past earnings calls that from what we see, it seems like we’ve reached the bottom in the current credit cycle, right? We’re seeing conversion rates as measured by the percentage of approved applications are continuing to improve modestly. And we think that going forward into Q4 as well as into the first half of 2025, they will improve even more meaningfully, right? So – and that shows up in our numbers. We saw record enterprise revenue of $45 million, 18% up quarter-over-quarter. And if you look at just kind of disambiguating from the macro, our strategy has always been to diversify the capability set. And the way we’re doing it is we’re trying to give a differentiated value proposition to our enterprise partners. Instead of just kind of being on our network, we’re really giving them the instrumentation, the tooling. You heard us talk about MoneyLion Checkout, we do see that as a really innovative sea-change technology where financial institutions, lenders, credit card providers, banks can really embed their decisioning on the MoneyLion-hosted environment. That allows us to really be deep in the funnel across multiple products, right? So you know that we’re very strong in personal loans. That clearly in a decreasing interest rate environment will see lots of tailwinds. But we also are very excited about what we can do in credit cards. It’s really changed the name of the game in terms of the technology that’s available in the industry from an embedded finance perspective. Same thing with auto insurance, same thing with mortgages. So we see it as a portfolio approach. But no doubt, the environment that we are in now will be favorable and will provide tailwinds.
Kyle Peterson: Got it. That’s really helpful. And then I want to switch gears and ask maybe a topical question on regulation. I know there’s been some headlines and there was kind of a proposal from CFPB on some oversight of earned wage access, but I know you guys have made a lot of investments in compliance and have kind of taken this stuff pretty seriously. So just wanted to see if you guys could give us any kind of higher level views on how you guys are viewing potential regulation in the space or how you guys are investing in compliance initiatives and preparing for kind of potential changing fees in the space?
Diwakar Choubey: Sure. So look, well, I’ll start by stating the obvious, right? We’re 2 days after a decisive election that’s no doubt going to have an impact on some of these questions. So we expect regulation of financial services will look different under a new administration. And looking – and we look forward to continuing to advocate for policies that promote innovation, competition. We’re always in for more consumer choice in areas like EWA, as you mentioned, as well as across the financial services landscape because you have to remember that we are a network operator. It’s not just EWA, it’s how choice is really given to the consumer. But in any case, we’re in a great spot with the investments we’ve made over the last 10 years. It’s not just we woke up and we found one regulatory regime going to another. We’ve been making investments for the last 10 years to our regulatory and compliance infrastructure. So with respect to EWA, because we operate a marketplace, but also our own first-party Instacash product, we’ve been pleased that over the past year-plus an increasing number of states have created laws and frameworks for codifying access as its own product category with its own bespoke licensing framework instead of really applying a 20 or 30-year-old framework to a very innovative new fin-tech products. And so we’re also glad to see recent federal regulatory developments that would create a nationwide framework for this product category as well. With respect to the CFPB’s proposed interpretive rule, while we disagree with the bureau’s approach to treat the product like a credit product, we do not expect that the proposed rule, even if finalized in its current proposed form, would impair our ability to continue providing this really important financial safety net product to millions and millions of American workers. And in fact, we believe that how the rule came out and really codifies the importance of this product, the hard work in Americans, right? So we’re confident that we will be able to continue offering Instacash in a super compliant, commercially effective manner while maintaining our unit economics. And that’s an important point that we’ve invested so much in the multiple delivery methods of all of our products that we actually see really tailwinds to growth into 2025 than that. And again, we will be engaged on how this plays out as the administration changes, right? So again, just really important to remember that for 10 years, we’re seamlessly and successfully operated between the federal and state regulatory environments, right? This is the third administration that we’ve been operating under. And as we’ve said before, we’ve already built the technology. We already have the partnerships in place to offer the product in multiple different ways, compliant with the relevant jurisdiction, if you will.
Kyle Peterson: Great. Really appreciate the detail color. Thanks, guys, nice quarter.
Operator: Our next question comes from the line of George Sutton with Craig-Hallum. Please go ahead.
George Sutton: Thank you. I’m really excited to hear about the accelerating growth into Q4. And I wanted to put my question into this context. A pretty wide EBITDA range for Q4. As we’re prepping for ‘25 and looking for sort of branding-type investments, I’m just curious how you’re thinking of coming in the low end or the high end relative to your growth opportunities, both short-term and long-term? My sense is it’s largely in your control.
Rick Correia: Hey, George. Great question. Yes, so if you kind of look at what’s been happening with the business, we’ve been of course, really focusing on our 30, 60, 90 strategy. And so while the macro is favorable for enterprise business, given the rates coming down, what we do control, to your point, is very much in the 30-60-90 strategy. And what we’ve been doing in addition to the investments that we’ve been making in terms of continuing to be increasing the number of channel partners and demand partners, we’ve been increasing our ability to go direct to market, to direct to the consumer. And by that, we mean increasing some of our brand and marketing spend to do two things. One is to help to provide that air cover to consumers that are finding us on the Internet through our channel partners and just helping to increase conversions as they continue to see us as a trusted brand in the marketplace. So that, of course, increases what is our very strong top of funnel. We went from $85 million increase last quarter to $90 million inquiries this quarter. So it continues to fuel that. It continues to fuel the increased conversions that we are expecting to kind of see within the business. So of course, that has a to our EBITDA margin and expansion. And then lastly, that mix shift. So as we go direct to the consumer with these new kind of marketing and brand initiatives, we’re going to be able to accelerate the shift to consumers that are starting in that kind of 90% consumer journey.
George Sutton: Got it. Okay. And then I wanted to – on the checkout solution, you ran through some very, it sounded like, powerful metrics. How should we think through the timing and the ultimate impact on your income statement as this plays through?
Rick Correia: Yes. So that’s one where we are incredibly proud of what’s been happening within disrupting the entire kind of consumer finance marketplace. So being able to kind of pioneer the way in which people go to market. Dee talked about it, where if you’re kind of looking for a pair of sneakers, the current experience is that you can search, you can evaluate and you can buy and check out within whatever marketplace you’re buying those sneakers. Of course, that experience, until MoneyLion, just doesn’t exist within consumer finance. So what we’re doing is we’re expecting that to have a couple of strong benefits. One is going to be around just the increased conversions right? So we’re going to have less leakage and consumers will be able to have a better consumer experience. The other is you start to kind of have more and more kind of pricing power, right? So the ability to be the critical partner for acquiring customers in consumer finance is where we’re positioning ourselves. And so those will start to kind of manifest themselves. We started seeing it already at kind of early pilots. Checkout isn’t the only kind of strategic initiative we’ve been working on over 2024. And so you’re starting to see that come through in the numbers. The 18% quarter-over-quarter growth in enterprise along with having a 17% growth last quarter means that management anticipates growth acceleration in enterprise. It’s the first time you’ve seen us call that out it’s because we don’t see any headwinds to that, and we’re going to continue to kind of focus on being that kind of premium enterprise for the consumer market – the consumer finance marketplace.
George Sutton: Fabulous. Great, guys.
Operator: Our next question comes from the line of Rayna Kumar with Oppenheimer. Please go ahead.
Rayna Kumar: Good morning. Thanks for taking my question. It’s good to see adjusted EBITDA coming in ahead of our forecast as well as The Street’s. Just wondering if there’s any cost that came in below your expectations and is there any drivers to that EBITDA exceeding?
Rick Correia: Hey, Rayna and welcome to the party. It was great to see you initiate – Oppenheimer initiate last quarter. I appreciate the question in terms of EBITDA. This is I think that the positioning that we have been making for years now, which is being a platform. And so what that means is we are getting that operating leverage and you are kind of seeing it pretty consistently with now kind of quarter-over-quarter. And so a couple of kind of stand-out items, one, as Dee mentioned, we had – and then I mentioned kind of in the call, we had one of our best quarters when it comes to performance for our originations, kind of about 3.1 provision as a percentage of originations. And so that certainly is a factor. And as we have said, we kind of solve for that. And so we will continue to expect strong performance. And as I mentioned, enterprise was up sequentially 18%. And so that continues to be an important driver, as I mentioned, the kind of 30-60-90. That’s something that we are now seeing a lot of success around as more and more of our kind of customer journeys are ending up in that kind of 90%, and importantly, kind of lifecycle for our customers. We have a massive top of funnel. We keep talking about it. And the other number that we encourage everyone to keep thinking about is product consumption. And so once you are on the platform, we are really successful in getting customers to see that second and third derivative product. And that showed up this quarter where we had 3 million products consumed on the platform, and that was up from 2.4 million last quarter. And so those things kind of drive, of course, kind of top, but as I said, that mix shift towards 90% helps as well.
Rayna Kumar: Great. Thank you for the color. And I know it’s only been a couple of weeks, but any early indications of the uptake on MoneyLion Checkout?
Diwakar Choubey: Yes. Hey Rayna. Good morning. It’s Dee. Look, we were just at the Money20/20 conference in Las Vegas last week and the sort of the excitement that we are seeing from our partners is palpable. Really, the adoption in checkout is going to be taking the existing client base that are already integrated to the MoneyLion exchange, if you will, through an API and converting them into checkout customers, right. So, we have already have really a handful of very large institutions already using checkout. As we said before, we are seeing great CTR improvements of almost over 25%, 2.5x conversions, 30%-plus on the revenue per lead improvement for our clients there. So, as we take those case studies, the name of the game really is to go to the rest of the client base and kind of engage with them to get them converted from the existing integration that they have onto the checkout integration.
Rayna Kumar: Understood. Thank you.
Operator: Our next question comes from the line of Hal Goetsch with B. Riley Securities. Please go ahead.
Hal Goetsch: Hey Rick, can you give us any color on some of the new verticals? I know auto insurance is also in a big upswing for customer acquisition from other companies that are in the industry. There is probably a lot of overpriced auto loans out there. So, auto loan refi seems to be a lot of pent-up potential demand for that in the next year or 2 years as rates come down. And the third question is, could you just give a little color on the adjustments to EBITDA? You usually have a few other expenses, but this quarter, it was a little bit more on $8 million. I wondered if you could give us some color on that, was that related to the forward-flow agreement expenses or something like that, let us know? Thank you.
Rick Correia: Thanks Hal. I will take the easy one, and then I will give Dee the kind of vertical question. When it comes to the EBITDA adjustments, this was primarily just tied to one-time legal expenses. I wish it was a little more entertaining than that, but that was what drove the increase to the other line with EBITDA adjustments.
Hal Goetsch: Alright. Perfect. Okay.
Diwakar Choubey: Hal, I will take your new vertical expansion question, right. So, look, if you look at our – if you look at the public peers, you will see that these operate in these marketplaces, in these verticals, each can support over $1 billion a year of revenue, right. So, you see the addressable markets in auto insurance and mortgages, credit cards each are quite large for us, right. So, our entire strategy for the course of this year has been really a product and technology-led improvement on the form factor that currently exists in the market, right. So, again, what we are doing with checkout and decisioning and sort of the data deals that we announced this quarter with the TransUnion of the world’s, Nova Credit, Plaid, all are testament to us really being the decisioning engine for – and really sitting between the consumer and the product provider. So, that’s a differentiated strategy that we are taking in auto insurance that we can actually get the consumer in consideration, in market, highly qualified, vetted and deliver them to insurers really deep into the funnel, right. So, our approach from a product perspective is slightly different from what’s in the market. And we believe that ultimately, it’s going to lead to higher margins, higher payouts, all the things that we are seeing on the personal loan side, so we want to replicate into auto insurance, mortgages and credit cards. But as we have said before, no doubt in this environment, we expect – and there is a lot of pent-up demand, right. I mean over the last couple of years, we have been operating with one hand typing kind of back on the personal loan verticals because of the imbalance between supply and demand, the loans are priced at a level where consumers just don’t want to transact, but now with a little bit of a change in sort of the overall sentiment, we will find both the personal loans verticals as well as our new-in fin verticals are going to all see some tailwinds in terms of consumer demand for those products and for the substitution of those products.
Hal Goetsch: Alright. Can I ask one follow-up? The cash balance continues to build. Can you give us any thoughts on your corporate debt, its interest rate and what you can do now that your cash balance continues to grow? Thanks.
Rick Correia: Yes. Absolutely, Hal, we are proud that we continue to kind of build the kind of free cash flow kind of quarter-over-quarter. In terms of our senior debt, yes, look, when you think about the profile of our company, we have so many healthy financial metrics now that we can share with you. And so you would expect a company like ours to have senior debt that’s somewhere in the ZIP code of SOFR plus 150 to 300, and today, we are kind of 2x that on the high end. And so certainly, we will continue to explore opportunities to have a significantly lower cost of capital.
Hal Goetsch: Thanks Rick.
Operator: Our next question comes from the line of Jacob Stephan with Lake Street. Please go ahead.
Jacob Stephan: Hey guys. Thanks for taking my questions and I will add my congrats on the quarter as well. I just kind of wanted to focus on the 18% growth guidance in enterprise. Maybe you could help us kind of think about what’s driving that? Is that more on the new product side, new vertical side or is that assume some rebound in personal loans as well?
Rick Correia: Yes. So – hey Jacob, this is one where we have been planning for this, right. The investments that we have been making, the diversification across the different verticals, of course, rates coming down helps because as a leader within the personal lending space, marketplace perspective, that’s coming our way. And then the investments that we have been making in terms of really kind of shifting the mix of our customer journeys from the kind of 30 and 60 into the 90. And so it’s all of the above. And it’s what, again, kind of gives us so much confidence in terms of being able to kind of take our enterprise business for the first time kind of confidently say that, that management anticipates growth acceleration within the fourth quarter within the enterprise business. And of course, within consumer, that business was up 27% year-over-year. We have been continuing to be very kind of focused on shifting towards the kind of forward flow type of financing arrangements within consumer. We are through that completely within the cash products. And so you will kind of see that business kind of revert to its kind of historical growth in terms of top line growth. So, we got to feel really good about the overall business and specifically enterprise, not kind of hitting on all cylinders.
Jacob Stephan: Okay. Got it. That’s helpful. And then maybe I will just ask another question on kind of the checkout product and you guys just launched. Can you kind of help us think about, is this really going to take offers from kind of first-party product, third-party product and essentially approve customers and match them with the correct product, or kind of help us think about where this falls into the kind of the 30-60-90 framework?
Diwakar Choubey: Sure. I will start, Jacob, there. Look, I think if you think about the landscape, right, there are a lot of financial technology companies, sophisticated banks that already integrate into MoneyLion through APIs. What we wanted to do with checkout was really expand the target addressable market to credit card companies, midsize, small and regional banks, really to be able to use a no-code environment to get really high-vetted consumers that fit their products. Because if you think about what checkout is trying to do, it’s trying to give an offer that’s ready to execute and transact right in the flow of the consumer when they are in consideration for a financial product buying decision. So, really, it improves conversion rates on both sides. It creates a much better product for the consumer because they don’t get clicked out into four or five different websites where they are reentering their information. We become the lingua franca for really kind of integrating different types of offers across asset classes. So, that’s really what checkout does. It doesn’t necessarily replace the capabilities that we have, but it expands the number of enterprise partners that can actually now engage with MoneyLion and provide their offers deep into our funnel. Over time, whatever we offer to the MoneyLion consumer marketplace, we also offer through software development kits that any bank or financial institution can now embed inside of their own digital ecosystems, whether that’s a mobile app, whether that’s a website, we are starting to see a lot of success with focus taking that SDK and putting that into their own ecosystems. So, I think the answer is both, right. As we increase more of the awareness of the MoneyLion brand, we have always said that this is a brand that works a little bit in the background. Now, really just putting a little bit of investments into brand, all inside of the guidance, all inside of the margin profile that we have illustrated here, we believe that we can now provide a little bit of air cover to the MoneyLion consumer marketplace where consumers can come here directly to make their best decision. But also everything that we are doing from a technology perspective, that can be distributed through any of our partners through APIs and SDKs. So, we – I like that business model because it gives us multiple ways to win from a customer acquisition perspective. It gives us – it really extends our surface area for engaging with more consumers than what we are just acquiring organically.
Jacob Stephan: Got it. That makes sense. I appreciate the color guys.
Operator: Our next question comes from the line of Mike Grondahl with Northland. Please go ahead.
Mike Grondahl: Hey guys. Thanks. First question, what are you guys most excited about credit card, auto, mortgage, which one represents the most upside for MoneyLion?
Rick Correia: Hey Mike. Well, people are excited about all of this. Certainly, when you think about the lack of personalization, kind of within the entire consumer finance experience, and specifically, if you think about kind of credit cards, like the benefit of us now being able to have kind of checkout that takes into the ecosystem, a breadth of data from our partner like we announced with TransUnion, with Plaid that we announced as well, we are going to be able to kind of bring a very specific and unique approach to developing personalized offers app. And of course, that’s kind of how we approach things. We are not going to go into a vertical and expand into a vertical with a me-too strategy. And so we are most excited about being able to do that within the credit card vertical.
Mike Grondahl: Got it. And then on your 30-60-90 strategy, could you give us an example or two of how you are executing the 90, that top quadrant?
Rick Correia: Yes, we have millions of examples, but I will stick to a couple. So, what you are seeing is that there is two ways this is happening. One is around, as we mentioned, we have been increasing kind of that kind of brand and marketing spend to bring customers directly in it. So, what that means is, we have hundreds of partners, product partners that we are matching with kind of product offering. So, kind of going direct and being really a place where customers are starting to make their financial decisions. That’s the kind of strategic positioning that we have been working on under the kind of branded marketing spend, bring somebody indirectly, they kind of search for a product, we use all of our kind of AI search ingenuity to be able to kind of match them with the right product. And so when that happens, that is a 90% customer journey. The other as I have mentioned is, when we talked about increased the number of cards being consumed on the platform, that’s really a testament to our ability now to kind of life cycle somebody. We develop deeper and deeper profiles and so we understand about a person. As I mentioned, their propensity to buy a kind of that sort of financial products is best understood by MoneyLion. And so what we have been able to do now is once they are on our platform, we are able to give them the kind of second and third derivative offers that also kind of represents that kind of 90% customer journey.
Diwakar Choubey: Yes. Also, Mike, just to reiterate what we said on the call, right, that we have built, we are always improving and really investing in the nation’s leading personal financial management tool. And if you just download the MoneyLion app and you look at sort of the incredible amounts of capabilities we have put into that, it really is a super app, right. And what we are seeing now a lot of success in our things like community, right. So, if you go onto the community section of the app, there is thousands of people talking about various parts of their financial life, then they are inviting their friends and their family to join those conversations, right. So, a lot of the work that we do on the direct-to-consumer product perspective is all around really providing incredible premium features to the consumer for free, mostly the MoneyLion search capabilities, the link your bank account and let us give you some advice and some insights. We have just enhanced even our free credit score capabilities that’s leading in the industry now. It’s not just a free credit score. We can simulate it free, we can give you a lot more data on your trade lines. We can link that now with what’s happening with your linked bank accounts and provide even more insights, things like smart budgeting and capabilities like that. All are surrounding the consumer with an incredible toolkit to manage their daily financial lives, their financial operating systems as we think about it. And then, of course we have got our first-party and third-party products, but that engagement keeps the consumer in our ecosystem between financial inflection points or decision-making points when they are thinking about a mortgage or an insurance or a credit card. And that’s the best representation of the 90% strategy because we are engaging the consumer daily, weekly, monthly. We have got a lot of data that’s got a wallet all links with MoneyLion. We have got the ability now really to give them precise high-converting offers that are relevant for them, they are personalized for them and they are contextualized for what’s happening in their lives that day. So, I think together with all of that really drives the excitement that we have on the margin expansion by keeping the consumer in our ecosystem. And I don’t think that there are a lot of people that can have this level of a PFM capability in sort of the peer group or in the markets today.
Mike Grondahl: Yes, that’s pretty robust and that’s helpful. Just lastly, did you guys comment about October at all?
Rick Correia: October, you mean Halloween or something more specific?
Mike Grondahl: How the month of October went?
Rick Correia: No.
Mike Grondahl: Okay. Thanks.
Operator: This concludes today’s Q&A session and concludes today’s call. You may now disconnect.
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