MoneyHero Limited Warrants Q1 FY2024 earnings call

Management Statement and Operational Highlights:

• Revenue increased by 24% year-on-year to $22.2 million in Q1 2024, demonstrating resilience and strength despite seasonal challenges.
• Focus on five key pillars (consumer pull, conversion expertise, insurance brokerage, strong partner relationships, operating leverage) led to improvements in Q1 results, including 72% year-on-year increase in approved applications.
• Insurance brokerage segment saw 44% YOY revenue growth. Strong partner relationships enabled revenue growth in Singapore (61%) and Hong Kong (37%).
• Executed marketing and brand campaigns, co-created unique products with partners. Appointed head of AI to integrate advanced AI tools for operational efficiency.
• B2B business Creatory contributed 19% to group revenue, with 34% YOY growth. Insurance revenue growth of 44% YOY aligns with ambition to be preferred insurance discovery and purchase destination.

Segment Performance:

• Online financial comparison: Core business grew 22% year-on-year.
• Creatory (B2B business): Grew by an impressive 34% year-on-year, contributing 19% to the group's revenue compared to 17% in the prior period.
• Insurance brokerage: Revenue increased by 44% year-on-year, contributing 8.2% to the group revenue.
• Regional breakdown: Singapore saw 61% year-on-year revenue growth to US $8.9 million; Hong Kong grew 37% year-on-year to $7.7 million; Philippines decreased 4% year-on-year to $4 million; Taiwan decreased 40% year-on-year due to forced product offerings from key clients but secured deals with new and returning clients for recovery.

Guidance:

• Adjusted EBITDA loss expected to remain elevated in the first half of 2024.
• Anticipate margin recovery in the second half of 2024 and continued expansion thereafter.
• Aim to operate at adjusted EBITDA profitability on a monthly basis in the later part of 2024.
• Normalized adjusted EBITDA margin expected to be in the range of 5% to 10% within the next 12 to 24 months.
• Plan to use strong cash position for organic efforts (insurance, personal loans, Creatory) and strategic acquisitions/investments.

Risks:

• Provider constraints in key markets like Taiwan and Philippines.
• Increased marketing and direct marketing expenses to pursue market share.
• Additional costs associated with being a public company (audit fees, IR/PR fees, etc.).
• Seasonal challenges (e.g., Chinese New Year holidays, shorter February month) historically causing Q1 drops from Q4.

Q: The first is the insurance vertical is obviously a strategic focus for you as you progress towards profitability. Are you seeing any changes in the competitive landscape within your markets and how do you see it evolving? And then the second question is on conversion rates. So could you just discuss some of the trends you're seeing today and how you're investing to continue the improvement?

A: Rohith Murthy addressed the insurance competitive landscape, highlighting consumer pull, conversion expertise, licensed insurance broker capability, data insights, AI leverage, and educational content as strengths. For conversion rates, discussed refining comparison journeys, improving insurance purchasing journeys, exploring GenAI, launching ShopHero app, and optimizing email campaigns.

Q: Am I right in saying that except the Philippines, the user numbers have actually fallen in this quarter?

A: Rohith Murthy responded that while there were marginal drops in some markets, they focus on transactions and saw record number of transactions in Q1, with conversion rates improving even if user numbers had marginal drops in certain markets