Q1 2024 MoneyLion Inc Earnings Call

Operator: Good day, and welcome to MoneyLion, Inc.'s first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. We will have a question and answer session following the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. Before we go further, I would like to turn the conference over to Sean Horgan, MoneyLion's Head of Investor Relations.

Good day and welcome to money line, Inc. First quarter 2024 earnings call. At this time all participants are in a listen only mode. We will have a question and answer session. Following the formal presentation. If anyone should require operator assistance during the conference. Please press star.

Zero on your telephone keypad. Please note that this conference is being recorded before we go further I would like to turn the conference over to Shawn, Oregon, Moneyline's head of Investor Relations.

Sean Michael Horgan: Thank you, operator. Hi everyone.

Shawn: Thank you operator, hi, everyone. Thank you for joining us for our first quarter 2024 earnings Conference call Moneyline C. O D child, a and CFO Rick Korea are with me today to discuss our results.

Shawn: You can find the presentation accompanying our earnings press release on our Investor Relations website at investors Dot Moneyline Dot com.

Shawn: Please note that any forward looking statements 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 will turn the call over to Dave.

Sean Michael Horgan: Thank you for joining us for our first quarter 2024 earnings conference call. MoneyLion CEO Di Choubey and CFO Rick Correa are with me today 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 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 will turn the call over to Dee.

Dave: Thank you Sean good morning, and thank you all for joining us for our first quarter 2024 earnings call.

Diwakar M Choubey: Thank you, Sean. Good morning, and thank you all for joining us for our first quarter 2024 earnings call. We kicked off the year with strong momentum. This continued the great progress we made in 2023 when we were hyper-focused on efficiency. In Q1 2024, we accelerated revenue growth and substantially increased adjusted EBITDA and expanded margin order over quarter. We are now in the mode of offense with discipline.

Dave: We kicked off the year with strong momentum has continued the great progress. We made in 2023, when we were a hyper focused on efficiency in Q1, 'twenty 'twenty four we accelerated revenue growth and substantially increased adjusted EBITDA and expanded margin quarter over quarter. We are now in the mode of offense with discipline.

Diwakar M Choubey: We continue to scale our consumer reach to record levels, further develop our marketplace, and enhance our world-class personal financial management or PFM experience. The MoneyLion ecosystem is evolving into a marketplace-first platform and a brand that consumers can trust to make their best financial decisions. Foundationally, we are building innovative technology to create a unified experience for consumers to learn about, search for, compare, select, and complete their checkout of financial products. This technology is made available to any of our enterprise partners and through MoneyLion.com and other owned channels. Now, let's turn to the key takeaways for the first quarter of 2024.

Dave: We continue to scale, our consumer reach to record levels further developed our marketplace and enhanced our world class personal financial management or P. F. M experience. The moneyline ecosystem is evolving into a marketplace first platform and a brand that the consumers can trust to make their best financial decisions.

Dave: Foundational Lee we are building an innovative technology to create a unified experience for consumers to learn about search for compare select and complete their checkout of financial products. This technology is made available to any of our enterprise partners and through Moneyline dot com and other own channels.

Diwakar M Choubey: First, we achieved record quarterly revenue of $121 million. This represents 29% year-over-year growth, up from 19% in Q4 2023. This accelerated revenue growth was driven by the strength of our diverse business model. In addition, our Q1 revenue exceeded the high end of our guidance of $115 million to $118 million. Next, we generated record adjusted EBITDA of $23 million for the quarter, up from $17 million in Q4 2023. This reflects a 19.4% adjusted EBITDA margin, up from 14.6% in Q4 2023, for approximately 480 basis points of margin expansion quarter over quarter. Adjusted EBITDA also exceeded the high end of the guidance range of $15 million to $18 million. And finally, we generated a gap net income of $7 million and diluted earnings per share of $0.60.

Speaker Change: Now, let's turn to the key takeaways for the first quarter of 2024.

Speaker Change: First we achieved record quarterly revenue up $121 million. This represents 29% year over year growth up from 19% in Q4 2023.

Speaker Change: This accelerated revenue growth was driven by the strength of our diverse business model. In addition, our Q1 revenue exceeded the high end of our guidance of $115 million to $118 million.

Speaker Change: Next we generated record adjusted EBITDA of $23 million for the quarter up from $17 million in Q4 2023.

Speaker Change: This reflects a 19.4% adjusted EBITDA margin up from 14, 6% in Q4, 2023, or approximately 480 basis points of margin expansion quarter over quarter.

Speaker Change: Adjusted EBITDA also exceeded the high end of our guidance range of 15 million to $18 million.

Speaker Change: And finally, we generated GAAP net income of $7 million and diluted earnings per share of 60 sets. This is a significant profitability milestone for us and reflects our team's execution of our offense with disciplined strategy.

Diwakar M Choubey: This is a significant profitability milestone for us and reflects our team's execution of our offense with discipline strategy. Turning to total customers, we ended Q1 with 15.5 million total customers, reflecting an increase of 98% year over year. This represents a substantial user base that we continue to engage and cross-sell. Behind this growth, we saw strong conversions on the consumer side of our business, offsetting some of the impact of lower conversions on the enterprise side of the business. We believe a reversion in the economic environment will provide strong tailwinds to conversion rates over time.

Speaker Change: Turning to total customers. We ended Q1 with 15 and a half million total customers, reflecting an increase of 98% year over year.

Speaker Change: This represents a substantial user base that we continue to engage in cross sell.

Speaker Change: Behind this growth we saw strong conversions on the consumer side of our business offsetting some of the impact of lower conversions on the enterprise side of the business.

Speaker Change: We believe a reversion in the economic environment will provide strong tailwind to conversion rates over time.

Diwakar M Choubey: We continue to see impressive customer growth across our platform quarter over quarter. For Q2, we expect total customers and adds to be above Q1. Next, Total Products shows the importance of flywheels.

Speaker Change: We continue to see impressive customer growth across our platform quarter over quarter for Q2, we expect total customers.

Speaker Change: Ads to be above Q1.

Speaker Change: Next total products shows the importance of flywheel.

Diwakar M Choubey: The more high-value products we offer through enterprise partners, the more personalized options consumers have network-wide. This leads to a desirable product experience and better consumer outcomes, driving cross-sell and RPO expansion. The better our recommendations are, the more customers come to MoneyLion, which in turn attracts more enterprise partners, and the cycle repeats. $25.3 million total products were consumed on our platform through the end of Q1 2024 compared to $14.7 million in the prior year quarter.

Speaker Change: The more high value products, we offer through enterprise partners. The more personalized options consumers have network wide. This leads to a desirable product experience and better consumer outcomes driving cross sell and <unk> expansion.

Speaker Change: The better our recommendations are the more customers come to money line, which in turn attracts more enterprise partners and the cycle repeats.

Speaker Change: $25 3 million total products are consumed on our platform through the end of Q1 2024 compared to $14.7 million in the prior year quarter.

Diwakar M Choubey: By the end of the first quarter of 24, 49% of the products consumed were third-party, up from 32% through the first quarter of 2023. With third-party comprising nearly half of our products consumed live to date, we continue to establish ourselves as a trusted source for consumers to make financial decisions. Of the $2.2 million products consumed in Q1, $1.5 million were third-party products.

Speaker Change: By the end of the first quarter of 'twenty, 449% of the product's consumed where third party up from 32% through the first quarter of 2023 with.

Speaker Change: With third party comprising nearly half of our product consumed a life to date, we continue to establish ourselves as a trusted source for consumers to make financial decisions.

Speaker Change: After 2.2 million products consumed in Q1, one and a half million for third party products.

Diwakar M Choubey: This marketplace-first approach enhances our ability to provide more personalization, more context and details on financial decisions, and more community-driven insights to drive repeat use. We've had a track record of strong repeat use, which Rick will walk you through in our cohort. Our investments in artificial intelligence and machine learning allow us to be at the cutting edge of consumer engagement strategies that lead to hyper-personalized cross-sell and the expansion of total product consumption on our platform.

Speaker Change: This market place first approach enhances our ability to provide more personalization more context and details on the financial decisions and more community driven insights to drive repeat use we've had a track record of strong repeat use which Rick will walk you through in our cohorts.

Speaker Change: Our investments in artificial intelligence and machine learning allow us to be at the cutting edge of consumer engagement strategies that lead to hyper personalize cross sell and the expansion of total product consumption on our platform.

Diwakar M Choubey: This marketplace-first experience is also happening inside the MoneyLion app. MoneyLion has strategically combined the best aspects of marketplace and direct-to-consumer fintech business models. As a marketplace, we have the ability to rapidly scale our product offerings, creating a network effect and information edge that attracts more buyers and sellers. Our direct-to-consumer fintech business allows us to maintain direct and deep relationships with customers. In 2024, we are expanding the depth of that relationship to the broader marketplace experience as well.

Speaker Change: This marketplace first experience is also happening inside the money line App.

Speaker Change: Moneyline has strategically combined the best aspects of marketplace and direct to consumer Fintech business models.

Speaker Change: As a marketplace, we have the ability to rapidly scale, our product offerings, creating a network effect and information edge that attract more buyers and sellers.

Speaker Change: Our direct to consumer Fintech business allows us to maintain direct and deep relationships with customers.

Speaker Change: In 'twenty 'twenty four we're expanding.

Speaker Change: <unk> the depth of that relationship to the broader marketplace experience as well.

Diwakar M Choubey: For instance, we're investing in engineering resources to develop even deeper integration with financial institutions by hosting their decisioning models to make the checkout experience more seamless for the consumer. This should further improve conversion rates for the benefit first of the consumer and ultimately for our enterprise partners. MoneyLion's best-of-both-worlds, flywheel-focused strategy allows us to create deep relationships with our customers across both our consumer-facing PFM as well as the marketplace. The core of our strategy is to build a relationship with the customer across multiple life decisions.

Speaker Change: For instance, we're investing in engineering resources to develop even deeper integration with financial institutions by hosting their decisioning models to make the checkout experience more seamless for the consumer.

Speaker Change: This should further improve conversion rates for the benefit first of the consumer and ultimately for our enterprise partners.

Speaker Change: Moneyline's best of both worlds flywheel focused strategy allows us to create deep relationships with our customers across both our consumer facing P. F M as well as the marketplace.

Speaker Change: The core of our strategy is to build a relationship with the customer across multiple life decisions. We execute this strategy by continuously innovating and building what is already the most full featured P. F M in the industry.

Diwakar M Choubey: We execute this strategy by continuously innovating and building what is already the most full-featured PFM in the industry. Through our PFM tools, such as personalized dashboards, calculators, and insights, trending news, and peer-to-peer elements like commenting, plus a host of smackable educational content, we incentivize consumers to open the app every day to learn how to make their best financial decisions. In this quarter, we released No Money, an original content series produced in-house in our media business. No Money is designed to teach consumers about fundamental financial topics such as budgeting and taxes, demonstrating our investment in and commitment to financial literacy.

Speaker Change: Through our PFM tools, such as personalized dashboards calculators and insights trending news and peer to peer elements like commenting plus a host of snack a bull educational content, we incentivize consumers to open the App every day to learn how to make their best financial decisions.

Speaker Change: And this quarter, we released no money and original content series produced in house in our media business. No money is designed to teach consumers about fundamental financial topics, such as budgeting and taxes demonstrating our investment.

Speaker Change: In and commitment to financial literacy.

Diwakar M Choubey: Owning our own content studio allows us to draw net new consumers into our ecosystem at attractive acquisition costs and also gives us an edge in retaining them over time and helping them with multiple financial decisions. We aim to deliver financial education at scale to a growing community of consumers. In fact, in addition to our embeddable widgets and calculators and our AI-driven search capabilities, we are now beginning to power other financial services companies with our content feed infrastructure as well.

Speaker Change: Owning our own content studio allows us to draw net new consumers.

Speaker Change: In Tora ecosystem at attractive acquisition costs, and also gives us an edge in retaining them over time and helping them with multiple financial decisions.

Speaker Change: We aim to deliver financial education at scale to a growing community of consumers.

Speaker Change: In fact in addition to our embedded bull widgets and calculators, our AI driven search capabilities. We are now beginning to power other financial services companies with our content feed infrastructure as well.

Speaker Change: Yeah.

Diwakar M Choubey: MoneyLion's unique marketplace matching, personalization, and programmatic compliance technology can also be leveraged by other financial institutions and publishers that seek to better serve their customers by providing a world-class personalized experience and more product options through their own properties across the internet. Through our investments in personalization and application of generative AI, financial content, and data are now being packaged for access to any business through developer-friendly APIs.

Speaker Change: Moneyline's unique marketplace matching personalization and programmatic compliance technology can also be leveraged by other financial institutions and publishers that seek to better serve their customers by providing a world class personalized experience more product options through their own properties across the internet or investments in personalization.

Speaker Change: Application of generative AI, the financial content and data are now being packaged for access to any business through developer friendly a P is.

Diwakar M Choubey: This enterprise solution represents a massive opportunity for MoneyLion. We're committed to delivering on product velocity and execution in 2024, and we look forward to continuing and deepening our successful partnership. Our network of over 1,100 enterprise partners continues to grow because of our reach, depth, and scope of offerings across product verticals, compliance expertise, and technical capabilities. Similarly, our audience is expanding with nearly 80 million total customer inquiries in the first quarter alone. I'll now provide a quick update on our enterprise business and some of the trends we're seeing so far in the second quarter. Starting with the impact of the macroeconomic environment, the recent headwinds impacting revenue related to our personal loans vertical persisted in the first quarter. More recently, so far in the second quarter, we're seeing some positive signs.

Speaker Change: This enterprise solution represents a massive opportunity for moneyline, we're committed to delivering on product velocity and execution in 'twenty 'twenty four and we look forward to continuing and deepening our successful partnerships.

Speaker Change: Our network of over 1100 Enterprise partners continues to grow because of our reach depth and scope of offerings across product verticals compliance expertise and technical capabilities.

Speaker Change: Our audience is expanding with nearly 80 million total customer inquiries in the first quarter alone.

Speaker Change: I'll now provide a quick update on our enterprise business and some of the trends we're seeing so far in the second quarter.

Speaker Change: Starting with the impact of the macroeconomic environment. The recent headwinds impacting revenue related to our personal loans vertical persisted in the first quarter more recently, so far in the second quarter. We're seeing some positive signs first we're seeing stabilization in the underwriting environment, particularly within the personal loans vertical there's renewed activity in our.

Richard Correia: First, we're seeing stabilization in the underwriting environment, particularly within the personal loans vertical. Additionally, there is renewed activity in our pipeline and growing interest in our digital marketplace. As we make the investments to strengthen our position across product verticals like credit cards, insurance, and mortgages, there are substantial tailwinds to diversify beyond personal loans. We continue to see growth in total suppliers, as evidenced by a very healthy total increase on the network over the past year. Our marketplace technology is a key long-term growth engine for the entire MoneyLion ecosystem. And with that, now I'll turn the call over to Rick to discuss our financials in detail.

Speaker Change: Pipeline and growing interest in our digital marketplaces.

Speaker Change: As we make the investments to strengthen our position across product verticals like credit cards insurance and mortgages. There are substantial tailwind to diversify beyond personal loans, we continue to see growth in total suppliers as evidenced by a very healthy total inquiries on the network over the quarter.

Speaker Change: Our marketplace technology is a key long term growth engine for the entire moneyline ecosystem.

Speaker Change: And with that now I'll turn the call over to Rick to discuss our financials in detail.

Richard Correia: Thanks, Dee, and good morning to everyone. I look forward to sharing details about our financial performance for the first quarter ending March 31, 2024. I will also discuss our guidance and outlook for the second quarter 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 10Q filing.

Richard Correia: Thanks, Dean and good morning to everyone I look forward to sharing details about our financial performance for the first quarter ending March 31, 'twenty 'twenty four I will also discuss our guidance and outlook for the second quarter of 'twenty 'twenty four.

Richard Correia: 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.

Richard Correia: Turn to our Customer Acquisition and Lifecycle Strategy. Our top of funnel drove approximately 80 million total customer inquiries in the first quarter of 2024, up over 130% from roughly the 34 million we saw in the first quarter of 2023. These inquiries converted into about 1.5 million new total customers and 2.2 million total products consumed during the quarter. As you can see, our top of funnel continues to grow at a staggering pace due to increasing demand from our large network of publishers, which expands our already massive top of funnel. As D noted, we continue to see muted conversions in the first quarter on the enterprise side of the business due to reduced enterprise partner marketing spend alongside macro headway.

Richard Correia: Turning to our customer acquisition and lifecycle strategy.

Richard Correia: Our top of funnel drove approximately $80 million total customer inquiries in the first quarter of 'twenty 'twenty four up over 130% from roughly the 34 million we saw in the first quarter of 2023.

Richard Correia: These inquiries converted into about 1.5 million, new total customers and $2 2 million total products consumed during the quarter.

Richard Correia: As you can see our top of funnel continues to grow at a staggering pace due to increasing demand from our large network of publishers, which expands our already massive top of funnel.

Richard Correia: As Dean noted we continue to see muted conversions in the first quarter on the enterprise side of the business due to reduced enterprise partner marketing spend alongside macro headwinds importantly, given our unique vantage point in the industry. We are beginning to see signs of improvement in the second quarter.

Richard Correia: Importantly, given our unique vantage point in the industry, we are beginning to see signs of improvement in the second quarter. As the underwriting environment stabilizes, and activity in our pipeline begins to pick up. Turning to our unit economics, in the last 12 months, ending Q1 2024, we added 7.7 million total customers. Our Customer Acquisition Cost, or CAC, was under $15, consistent with prior periods. In the first quarter, we did see our CAC increase slightly due to typical seasonality, and we expect to see a reversion in the second quarter. Our payback period was around four months, which we continue to see as a great outcome.

Richard Correia: As the underwriting environment stabilizes and activity in our pipeline begins to pick up.

Richard Correia: Turning to our unit economics.

Richard Correia: In the last 12 months, ending Q1, 'twenty 'twenty four we added 7.7 million total customers.

Richard Correia: Our customer acquisition cost or CAC was under $15 consistent with prior periods in.

Richard Correia: In the first quarter, we did see our CAC increased slightly due to typical seasonality and we expect to see a reversion in the second quarter. Our payback period was around four months, which we continue to see is a great outcome and lastly, <unk> was around $39, which is roughly in line with our full year.

Richard Correia: And lastly, ARPU was around $39, which is roughly in line with our full year 2023 ARPU. These unit economics are a function of our strong business equation, and they reflect our strategy to take market share by adding total customers rapidly and efficiently. We will cross-sell personalized products and offer them over time to drive lifetime value, including as we expand our marketplace product vertical.

Richard Correia: For 2023 <unk>.

Richard Correia: These unit economics are a function of our strong business equation and they reflect our strategy to take market share by adding total customers rapidly and efficiently we.

Richard Correia: We will cross sell personalized products and offer over time to drive lifetime value, including as we expand our marketplace product verticals.

Richard Correia: Now let me turn to our recurring revenue trends across consumer and enterprise business, starting with consumer in Q1 2024. Over 90% of our consumer revenue came from historical cohorts of customers. As you can see, we are successfully deepening our product penetration and revenue expansion. This is a testament to the effectiveness of our personalized content, decisioning, and lifecycle algorithms in our enterprise business.

Richard Correia: Now, let me turn to our recurring revenue trends across consumer and enterprise businesses.

Richard Correia: Starting with consumer in Q1, 'twenty 'twenty four over 90% of our consumer revenue came from historical cohorts of customers.

Richard Correia: As you can see we are successfully deepening our product penetration and revenue expansion. This is a testament to the effectiveness of our personalized content decisioning and lifecycle algorithms.

Richard Correia: In our enterprise business, we continue to increase our number of channel partners and vertically integrate with broader partners, making money line the must have customer acquisition and monetization partner throughout the financial services ecosystem. As a result, we formed durable valuable partnerships.

Richard Correia: We continue to increase our number of channel partners and vertically integrate with product partners, making MoneyLion the must-have customer acquisition and monetization partner throughout the financial services ecosystem. As a result, we form durable, valuable partnerships. As you can see in our enterprise cohort data, over 95% of revenue from our marketplace came from prior year cohorts of our enterprise partners. In addition to retaining revenue from existing partners, we are capturing the latent revenue opportunity of our quarterly customer inquiries and fueling our growth acceleration. We're seeing continued strength in our first party products, and in the first quarter of 2024,

Richard Correia: As you can see in our enterprise cohort data over 95% of revenue from our marketplace came from prior year cohorts of our enterprise partners.

Richard Correia: In addition to retaining revenue from existing partners, we are capturing the latent revenue opportunity of our quarterly customer inquiries and fueling our growth acceleration.

Richard Correia: We are seeing continued strength in our first party products in the first quarter of 2024.

Richard Correia: Total originations for these products were 717 million, representing an increase of 42% year-over-year. Consumer products continued to see heightened demand in the first quarter, contributing to our strong overall performance in consumer revenue. Credit performance trends remain stable in Q1 2024. Our provision expense as a percentage of total originations was 2.5 percent in Q1 2024. This reflects both our experience in managing credit quality and our focus on continuously optimizing for better credit performance.

Richard Correia: Total originations for these products were $717 million, representing an increase of 42% year over year.

Richard Correia: Consumer products continued to see heightened demand in the first quarter contributing to our strong overall performance in consumer revenue.

Richard Correia: Credit performance trends remained stable in Q1, 'twenty 'twenty four.

Richard Correia: Our provision expense as a percentage of total originations was two 5% in Q1 'twenty 'twenty four.

Richard Correia: This reflects both our experience in managing credit quality and our focus on continuously optimizing for better credit performance.

Richard Correia: In addition, it's important to note that Q1 benefits from some typical seasonal performance related to cash customers receive from tax refunds. Going forward, we expect to continue to see strong credit performance with provision expense as a percentage of originations consistent with 2023 levels. As we indicated last quarter, we are also transitioning to a forward-flow financing arrangement, meaning that we will sell our finance receivables and move them off the balance sheet. This standard forward flow arrangement further lightens our balance sheet, improves our cash efficiency, and is a testament to our strong and consistent originations performance across a spectrum of macroeconomic cycles.

Richard Correia: In addition, it is important to note that Q1 benefits from some typical seasonal performance related to cash customers receive from tax refunds.

Richard Correia: Going forward, we expect to continue to see strong credit performance with provision expense as a percentage of originations consistent with 2023 levels.

Richard Correia: As we indicated last quarter. We are also transitioning to a forward flow financing arrangement, meaning that we will sell our finance receivables and move them off balance sheet.

Richard Correia: This standard forward flow arrangement further lightens, our balance sheet improves our cash efficiency and is a testament to our strong and consistent originations performance over a spectrum of macroeconomic cycles.

Richard Correia: Now, turning to some of our other key financial metrics, MoneyLion generated $121 million in revenue in the first quarter. This represented 29% year-over-year growth, up from 19% in the prior quarter, and 7% growth quarter-over-quarter, up from 2% in the prior quarter. Notably, we generated $451 million over the last 12 months as of Q1 2024. This quarter's performance was primarily driven by our performance in both our consumer and marketplace business.

Richard Correia: Now turning to some of our other key financial metrics.

Richard Correia: Moneyline generated $121 million of revenue in the first quarter. This represented 29% year over year growth up from 19% in the prior quarter and 7% growth quarter over quarter up from 2% in the prior quarter.

Richard Correia: Notably we generated 451 million over the last 12 months as of Q1 'twenty 'twenty four.

Richard Correia: This quarters performance was primarily driven by outperformance in both our consumer and marketplace businesses. This was slightly offset by our decision to exit certain non core functions in our media business, which we believe will ultimately improve our quality of revenue and adjusted EBITDA margin profile even further.

Richard Correia: This was slightly offset by our decision to exit certain non-core functions in our media business, which we believe will ultimately improve our quality of revenue and adjust the EBITDA margin profile even further. Now, on to our path to profitability. We reached an important milestone in Q1 2024. As Dee mentioned in the Key Investor Takeaways, MoneyLion generated $7 million of gap net income and $0.60 of diluted EPS.

Richard Correia: Now onto our path to profitability.

Richard Correia: We reached an important milestone in Q1 'twenty 'twenty four.

Richard Correia: As <unk> mentioned in the key Investor Takeaways Moneyline generated 7 million of GAAP net income and 60 of diluted EPS.

Richard Correia: Similarly, we generated $23 million of adjusted EBITDA in the first quarter. This represents an adjusted EBITDA margin of 19.4%, or 480 basis points of margin expansion from Q4 2023. And lastly, on our cash position, we closed the quarter with $93 million of cash, up from $92 million in Q4 2023. This quarter-over-quarter increase in cash is after accounting for some period-specific payments in Q1.

Richard Correia: Similarly, we generated 23 million of adjusted EBITDA in the first quarter.

Richard Correia: This represents an adjusted EBITDA margin of 19.4% or 480 basis points of margin expansion from Q4 2023.

Richard Correia: And lastly on our cash position, we closed the quarter with $93 million of cash up from $92 million in Q4 2023.

Richard Correia: This quarter over quarter increase in cash is after accounting for some period specific payments in Q1.

Richard Correia: As you can see, in our past few quarters, we have consistently driven growth while generating cash before one time in seasonal expenses, proving Dee's point that we play with offense and with discipline. Furthermore, we see no headwinds to continuing this trend and are encouraged by our potential to generate cash as we look to execute against our growth pillars. Now turning to guidance.

Richard Correia: As you can see from our past few quarters, we have consistently driven growth, while generating cash before onetime and seasonal expenses proving dis point that we play with offense.

Richard Correia: And with discipline.

Richard Correia: Furthermore, we see no headwinds to continuing this trend and are encouraged by our potential to generate cash as we look to execute against our growth pillars.

Speaker Change: Now turning to guidance.

Richard Correia: In the first quarter of 2024, we exceeded our guidance across all metrics. Revenue was $121 million, above the high end of our guidance range of $115 to $118 million. Adjusted EBITDA was $23 million, exceeding the high end of our guidance of $15-18 million. Turning to our outlook for the second quarter of 2024. We expect revenue between 125 to 130 million, representing 17 to 22% year-over-year growth, and adjusted EBITDA of $17-$20 million, representing approximately 13-16% adjusted EBITDA margin. Before I turn it back over to Dean, I'll leave you with this.

Richard Correia: In the first quarter of 'twenty 'twenty four we exceeded our guidance across all metrics revenue was $121 million above the high end of our guidance range of $115 million to $118 million.

Richard Correia: Adjusted EBITDA was 23 million exceeding the high end of our guidance of $15 million to $18 million.

Richard Correia: Turning to our outlook for the second quarter of 2024 weeks.

Richard Correia: We expect revenue between $125 million to $130 million, representing 17% to 22% year over year growth.

Richard Correia: Adjusted EBITDA of $17 million to $20 million, representing approximately 13% to 16% adjusted EBITDA margin.

Richard Correia: Before I turn it back over to Dee.

Speaker Change: I'll leave you with this our first quarter numbers really speak for themselves. Importantly, this is a testament to the strength of our business model and our ability to scale profitably.

Richard Correia: Our first quarter numbers really speak for themselves. Importantly, this is a testament to the strength of our business model and our ability to scale profitably. We expect this to continue through our next stage of growth. To echo Dee's comments, we are a marketplace-first platform with an immense opportunity in front of us. We are emerging as the trusted brand for financial decisions and access to market-leading first and third-party products. With that, I will turn the call back over to Dee for his closing remarks.

Speaker Change: We expect this to continue through our next stage of growth to.

Speaker Change: To Echo <unk> comments, we are a marketplace first platform with an immense opportunity in front of us.

Speaker Change: We are emerging as the trusted brand for financial decisions and access to market, leading first and third party products.

Speaker Change: With that I will turn the call back over to D for his closing remarks.

D: Thank you Rick last quarter, we laid out our four growth pillars for 2024.

Diwakar M Choubey: Rick, last quarter we laid out our four growth pillars for 2024: Continued growth in consumer, relentless funnel optimization, product vertical expansion, and expanded distribution.

Speaker Change: Continued growth in consumer.

D: Relentless funnel optimization.

D: Product vertical expansion and expanded distribution.

Diwakar M Choubey: As we shared today in our results, our first growth pillar, continued growth in our consumer business, helped drive strong performance in the first quarter. Going forward, we see longer-term growth coming from the remaining pillars. First, on Funnel Optimization, through new remarketing channels, leveraging data insights to help filter the most relevant offers for consumers, and enhancing our ability to match lenders with the best users with the highest efficiency. We are intensely focused on optimizing our funnel and driving higher conversions in the near term.

D: As we shared today in our results our first growth pillar continued growth in our consumer business helped drive strong performance in the first quarter.

D: Going forward, we see longer term growth coming from the remaining pillars first on funnel optimization through new remarketing channels leveraging data insights to help filter. The most relevant offers for consumers and enhancing our ability to match lenders with the best users with the highest efficiency we are intensely focused on.

D: Optimizing our funnel and driving higher conversions in the near term.

D: In terms of vertical expansion, where.

Diwakar M Choubey: We're working to deepen our presence in select verticals. Namely, we're most excited about credit cards, auto insurance, and mortgages. We're exploring all opportunities to quickly bring these verticals to market. We believe this will position us well to capture demand for these products inside of the network. Lastly, on expanding our distribution, in addition to our alliance with EY, we continue to add new channel partners to our platform, which ultimately fuels our flywheel and will lead to meaningful financial impact over time.

Diwakar M Choubey: We're working to deepen our presence in select verticals, namely we're most excited about credit cards auto insurance and mortgages were exploring all opportunities to quickly bring these verticals to market.

Diwakar M Choubey: We believe this will position us well to capture demand for these products in the inside of the network.

Diwakar M Choubey: Lastly on expanding our distribution in addition to our alliance with E Y. We continue to add new channel partners to our platform, which ultimately fuels, our flywheel and will lead to meaningful financial impact overtime.

Diwakar M Choubey: In closing, I'll leave you with a few final thoughts. Our first quarter results reflect continued momentum in our business with an attractive combination of growth and profitability; we generated a gap net income in EPS, and our cash balance increased quarter over quarter. We will not leave growth on the table. We're building for the long term. This is our opportunity to scale rapidly without sacrificing margin because we can. We're playing offense with discipline because we can.

Diwakar M Choubey: In closing I will leave you with a few final thoughts our first quarter results reflect continued momentum in our business with an attractive combination of growth and profitability.

Diwakar M Choubey: We generated GAAP net income and EPS and our cash balance increased quarter over quarter.

Diwakar M Choubey: We will not leave growth on the table. We're building for the long term. This is our opportunity to scale rapidly without sacrificing margin because we can we're playing offense with discipline because we can these advantages will take us to the next stage of our evolution and we're just getting started with that I'd like to.

Diwakar M Choubey: These advantages will take us to the next stage of our evolution, and we're just getting started. With that, I'd like to thank you all for joining us today, and I will turn the call back over to the operator before you have any questions. Thank you.

Speaker Change: Thank you all for joining us today, and I will turn the call back over to the operator before he take your questions.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the line. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key. One moment, please, while we poll for your question. Our first questions come from the line of George Sutton with Craig Hallam. Please proceed with your question.

Speaker Change: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line. That's in the question queue May Press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing.

George Frederick Sutton: Thank you. wonderful results, guys.

George Frederick Sutton: This darkies one moment, please while we poll for your questions.

George Frederick Sutton: Our first questions come from the line of George Sutton with Craig Hallum. Please proceed with your questions.

George Frederick Sutton: So if I'm hearing you correctly, Q1 benefited in large part from the much bigger funnel you've created, and it sounds like Q2 is beginning to show a better monetization of that funnel. And then, Dee, I wondered if you could lay out a little more detail on the things that you're doing with AI to try to drive that monetization even further. You mentioned relative to content feed infrastructure.

George Frederick Sutton: Thank you wonderful results guys. So.

George Frederick Sutton: If I'm hearing you correctly Q1 benefited in large part.

George Frederick Sutton: From the much bigger funnel, you've created and it sounds like Q2 is beginning to show a better monetization of that funnel and then.

George Frederick Sutton: D. I wondered if you could lay out a little more detail on the.

George Frederick Sutton: <unk>.

Dee: The things that you're doing with AI to try to drive that monetization. Even further you mentioned relative to content feed infrastructure.

Diwakar M Choubey: Hey George, good morning. Thanks for the question. Absolutely. In Q1, as we said, we really saw a strong consumer business for us, and conversions in that business were quite robust. We continue to see normalization in Q2.

Dee: Hey, George Good morning, Thanks for the question absolutely Q1, as we said.

Dee: Not really sure we really saw strong consumer business for us.

Speaker Change: And conversions in that business for quite robust we continue to see a normalization in Q2, there's nothing to believe that.

Speaker Change: We arent going to trend above the one 5 million customer number that we said.

Diwakar M Choubey: There's nothing to believe that ads aren't going to trend above the 1.5 million customer number that we said. And then the name of the game really is using a lot of our technology to personalize and provide engaging elements for the consumer to return to our ecosystem. This has multiple benefits.

Diwakar M Choubey: And then the name of the game really is easing.

Diwakar M Choubey: A lot of our technology to personalize and provide engaging elements for the consumer to return back into our ecosystem. This has multiple benefits first party products of course benefit from that but importantly, the technology that we're building is creating highly penetrated opportunities for our channel partners for enterprise partners to bear.

Diwakar M Choubey: Our first-party products, of course, benefit from that. But importantly, the technology that we're building is creating highly penetrated opportunities for our channel partners, for enterprise partners to benefit. So the use of artificial intelligence, right, so we've been a pioneer in using those technologies for 11 years at this point, right? This is part of our DNA.

Diwakar M Choubey: So the use of artificial intelligence right. So we've been a pioneer and using those technologies for 11 years at this point like this as part of our DNA.

Diwakar M Choubey: So we first of course use those applications in the consumer side of the business and the enterprise side of the business just had creating those journeys to be much more personalized and contextualized. That's the ultimate evolution. So as we talk about really are wanting this marketplace the more customer inquiries.

Diwakar M Choubey: So we first, of course, used those applications on the consumer side of the business. But on the enterprise side of the business, just kind of creating those journeys to be much more personalized and contextualized, that's the ultimate evolution. So as we talk about really running this marketplace, the more customer inquiries we get. So in Q1, we saw 80 million total customer inquiries. The more our information advantage increases, the more we know about customer preferences, customer intent, the more we're able to really put that back into that machine learning capability of ours and provide higher intent consumers back to our enterprise partners, right?

Diwakar M Choubey: So in Q1, we saw 80 million total customer enquiries the more our information advantage increases more we know about customer preferences customer and test the more we're able to really put that back into that machine learning capability of ours and provide higher intent consumers back to our enterprise partners right. That's the.

Diwakar M Choubey: That's the reason really for our enterprise partners to think of MoneyLion as a must-have and a trusted partner in their customer acquisition, customer monetization, and customer retention strategies, because we have such high-intensity consumers in the market looking for a financial product. So as that top of the funnel increases over time, we have a lot of ability to create form factor changing mechanisms to engage those consumers, right? So we've said a lot about AI-powered, Gen AI-powered financial search.

Diwakar M Choubey: The reason really for our enterprise partners.

Diwakar M Choubey: Moneyline as a must have.

Diwakar M Choubey: And a trusted partner in their customer acquisition customer monetization and customer retention strategies, because we have such high intent consumers in markets looking for financial product. So as that top of the funnel increases over time, we have a lot of ability to create form factor changing mechanism.

Diwakar M Choubey: It was to engage those consumers right. So what we've said a lot about AI.

Diwakar M Choubey: Power Gen AI powered financial search.

Diwakar M Choubey: So that's again a lot of work is being done from a technology perspective, those are where the.

Diwakar M Choubey: So that's, again, a lot of work is being done from a technology perspective. We're at the bleeding edge there in terms of that build out. And as we roll those out, we're seeing a lot of success in getting the consumer back in for the second product, the third product, right? The reason to invest in content, the reason to invest in all those personalizations and machine learning is to be with the consumer as a trusted companion across multiple financial product lines decisions. And we're showing a lot of progress towards that goal.

Diwakar M Choubey: Bleeding edge there in terms of that.

Diwakar M Choubey: That build out and as we roll those out we're seeing a lot of success in getting the consumer back in for the second product the third product like the reason to invest in that context. The reason to invest in all of this personalization machine learning it has to be with the consumer as a trusted companions across multiple financial product line decisions and we're showing a lot of progress towards that.

Speaker Change: Just as a follow up and it really didn't come up at all the UI partnership and also your while offering could you just give us a quick updates on on both of those.

Diwakar M Choubey: Just as a follow-up, and this really didn't come up at all, the EY partnership and also your WOW offering, could you just give us quick updates on both of those?

Diwakar M Choubey: Sure. So, EY is progressing nicely. The pipeline is active. We're having positive conversations with banks. And as we said last quarter, this is a joint development with EY. So we're building that interface layer.

Speaker Change: Sure Joe.

Diwakar M Choubey: Why is progressing nicely. The pipeline is active we're having positive conversations with banks and as we've said last quarter that this is a <unk>.

Diwakar M Choubey: <unk> development with E Y. So we're building that interface layer. We're building the technology receptors, if you will that.

Diwakar M Choubey: We're building the technology receptors, if you will, that help banks connect to the real offering that we've been building out. We've been very pleased by the traction that we're getting with the target banks that we have in mind. And, as we said before, we expect the EY partnership to start adding growth for us in late Q4 of this year going into 2025. And all of that is very well on track.

Diwakar M Choubey: Help banks connect to.

Diwakar M Choubey: So it really the offering that we have out there.

Diwakar M Choubey: We've been.

Diwakar M Choubey: <unk> been building out we've been very pleased by the traction that we're getting with as a.

Diwakar M Choubey: Target banks that we have in mind as we said before we expect the UI partnership to start adding growth for us in late Q4 of this year going into FY 'twenty five and all of that is a very well on track.

Diwakar M Choubey: On WOW, we said last quarter that we believe that this is an incredibly powerful bundle of products for us. We've said that the full market launch, we're really getting ready for that; we're finding our marketing message, contextual upsell strategies, a re-advanced dashboard, and a clear articulation to the customer of the value. You know, we believe that priced at $9.99 a month, WOW offers hundreds of dollars of benefits annually to consumers.

Diwakar M Choubey: On Wow.

Diwakar M Choubey: You know, we said last quarter that we believe that this is a incredibly powerful bundle of products for US you know we've said that.

Diwakar M Choubey: Full market launch, we're really getting ready for that where were finding our marketing message.

Diwakar M Choubey: Sexual upsell strategies, we advanced dashboard situation to the customer of the value.

Diwakar M Choubey: We believe that priced at 999 of them up while offers hundreds of dollars of benefits anyway to consumers and really think about the hub into our marketplace. Wow brings the benefits of our first party products or third party products the customer value proposition really nicely into one bundle why expand our target addressable market.

Diwakar M Choubey: And really, if you think about the hub into our marketplace, WOW brings the benefits of our first-party products, our third-party products, and the customer value proposition really nicely into one bundle, right? It expands our target addressable market and increases recurring revenue. And over time, we really think of this as a chassis that increases our product adoption, right? Ultimately, the name of the game is, can we get our consumers to use multiple of our products, coming back to us for multiple financial buying decisions?

Diwakar M Choubey: <unk> recurring revenue.

Diwakar M Choubey: And over time, we really think that this is a chassis that increases our product adoption right.

Diwakar M Choubey: Ultimately the name of the game is can we get our consumers using multiple of our products coming back to us for multiple national buying decisions and this will lead naturally increasing <unk>, increasing retention in becoming that trusted companion with their consumers over time, so that's really progressing nicely as well and we have a we have a lot more exciting things for us.

Diwakar M Choubey: And this will naturally lead to increasing ARPU, increasing retention, and becoming that trusted companion with our consumers over time. So that's really progressing nicely as well. And we have a lot more exciting things for us to really execute on from a marketing messaging perspective in Q2. And you'll see that we've been very efficient with our marketing spend. And as we continue progressing down the evolution of generating more free cash flow, we'll have opportunities to really reinvest in that marketing message around WoW to make that an even bigger growth story going forward.

Diwakar M Choubey: So it's a really execute off from a marketing messaging perspective in Q2, and then you'll see that we've been very efficient with our marketing spend as we continue progressing down the evolution of generating more free cash flow, we will have opportunities really to reinvest in that marketing message around low to make that an even bigger.

Diwakar M Choubey: Our growth story going forward.

George Frederick Sutton: All right. Great stuff.

Speaker Change: Alright, great stuff thanks, guys.

Operator: Thank you. Our next questions come from the line of Hal Goetsch with B Riley Securities. Please proceed with your questions.

George Frederick Sutton: Thank you our next questions come from the line of how Goetsch with B Riley Securities. Please proceed with your questions.

Harold Lee Goetsch: Thank you. Hey, great quarter, guys. Hey, my question's on the forward flow arrangement. Hey, Rick, could you comment on what this balance sheet looks like or how much different it'll look in Q2 or Q3 as this happens? What am I due in provision expenses?

Harold Lee Goetsch: Thank you Hey, great quarter guys. My question is on the forward flow arrangement, a Rick could you comment on what this balance sheet it looks like or how much if at all look in Q2 or Q3 as this happens and.

Harold Lee Goetsch: What it might do to provision expense.

Richard Correia: Any comments there would be appreciated. Thanks. Yeah, thanks, Hal. So on the Forge Flow, you know, as we talked,

Speaker Change: But there would be appreciated thanks.

Speaker Change: Yeah. Thanks Hao.

Richard Correia: On the forward flow as we talked about we're continuously looking for opportunities to.

Rick: The more cushion on cash and the forward flow arrangement allows us to sell our receivables in real time, and then basically realize cash upfront. So youll see an increase to our cash if we're looking at the flow through from our adjusted EBITDA to cash one of the reconciling items. There is the is the use of cash for capital.

Richard Correia: And the forward flow arrangement allows us to sell our receivables in real time and basically realize all kinds of cash outputs. You'll see an increase in our cash. If you're looking at the flow through from our Justine Bidot to cash, one of the reconciling items there is the use of cash for our haircut capital for our receivables. So that goes away as soon as we transition to the forward flow arrangement. From a provision perspective, in a steady state, that will go away because, of course, we no longer basically have receivables on the balance sheet, and therefore, we no longer provision.

Richard Correia: Our receivables so that goes away as.

Richard Correia: As we transition to the port.

Richard Correia: Right.

Richard Correia: Our provision perspective.

Richard Correia: Steady state that will go away.

Richard Correia: Because of course, we no longer basically have the receivables on balance sheet and therefore, we no longer permission for that.

Richard Correia: Okay.

Richard Correia: Yeah.

Speaker Change: Alright, thank you.

Operator: Thank you. Our next questions come from the line of Kyle Peterson with Needham & Company. Please proceed with your question.

Richard Correia: Thank you. Our next question is coming from the line of Kyle Peterson with Needham <unk> Company. Please proceed with your question.

Kyle Peterson: Great. Thanks, guys. Good morning, Thanks for taking the questions I wanted to start on the the enterprise segment.

Kyle Peterson: Great. Thanks, guys. Good morning. Thanks for taking the questions. I want to start with the enterprise segment, just kind of what you guys are seeing there, particularly in, you know, consumer and personal loans. I guess, from some of our checks, some of the trends have been kind of mixed, but you guys still seem to be performing well. So just any color there would be helpful.

Kyle Peterson: Kind of what you guys are seeing there, particularly in light.

Kyle Peterson: Humira and in personal loans I guess.

Kyle Peterson: From some.

Kyle Peterson: <unk> some of the trends have been kind of mixed but you guys still seem to be performing well. So just any color there would be helpful.

Diwakar M Choubey: Hey, Kyle, good morning. I'll start, and Rick can chime in as well. You know, quarter over quarter, we actually saw our marketplace business see some growth, right? So personal loans as a percentage of the total marketplace revenues for us continue to be around 55%, right? We brought that down from historically where it was over 80%.

Speaker Change: Hey, Colin good morning, I'll start and Laura can chime in as well.

Diwakar M Choubey: Quarter over quarter, we actually saw our marketplace business.

Diwakar M Choubey: Right, so personal loans as a percentage of the total marketplace revenues for us continues to be around that 55% we brought that down.

Diwakar M Choubey: Historically it was over 80%. So this has been the result of a lot of diversification.

Diwakar M Choubey: So this has been the result of a lot of diversification. We really see a lot of opportunities here to increase our market share in verticals like credit cards, insurance, mortgages, and auto insurance, right? So this is, again, product-driven growth. We talked a lot about this idea of hosting the decisioning of a lot of the financial institutions, completing the checkout experience so consumers actually have a much more seamless experience inside of whether it's the marketplace flows that we have or the direct-to-consumer flows that we have.

Diwakar M Choubey: We really see a lot of opportunities here.

Diwakar M Choubey: Increase our market share in verticals like credit cards insurance mortgages auto insurance right. So this is again product led growth we talk a lot about this.

Diwakar M Choubey: This idea of hosting the Decisioning awful lot of the financial institutions, completing the checkout experience the consumers actually have a much more seamless experience inside of whether it's the marketplace close that we have or the direct to consumer so.

Diwakar M Choubey: So, some of those efforts are mitigating some of the conversion elements. We are seeing a lot of success in the product-led areas there. And ultimately, you know, I think we're muting some of the macroeconomic headwinds that we see in the credit and personal loan verticals because, let's be clear, the interest rate regime continues to keep conversions at historically low levels right now for us on the personal loan side. But that's also an opportunity.

Diwakar M Choubey: Some of those efforts are mitigating.

Diwakar M Choubey: Some of the conversion elements, we are seeing a lot of success in the product areas there.

Diwakar M Choubey: And ultimately I think we're muting some of the macroeconomic headwinds that we see in the credit and personal loan verticals. We just let's be clear the interest rate regime continues to.

Diwakar M Choubey: Keep conversions at historically low levels right now for us on the personal loan side, but that's also an opportunity. If you think about if we can return back to even late 2022 levels on conversions on the personal loan side Theres a lot of built in growth with our existing mass at top of the funnel.

Diwakar M Choubey: If you think about it, if we can return to even late 2022 levels on conversions on the personal loan side, there's a lot of built-in growth with our existing massive top-of-the-funnel. Consumer demand throughout our network, both on the consumer and the enterprise side, continues to grow very nicely. It's just that the position we're in in the economic cycle mutes that a little bit, right? So, this is really where product-led growth around cross-sell, around being contextual and being relevant for the consumer, is mitigating and actually leading us to an area where the marketplace itself has had quarter-over-quarter growth.

Diwakar M Choubey: Humor demand throughout our network goes in the consumer and the enterprise side side continues to grow very nicely.

Diwakar M Choubey: Just that the.

Diwakar M Choubey: The position we are we're in in the economic cycle mutes that a little bit right. So this is really where product like where else around cross sell around being contextual and being relevant for the consumer is mitigating it actually leading us to an area, where the marketplace itself had quarter over quarter growth I think Rick mentioned.

Diwakar M Choubey: I think Rick mentioned that in our media business, we've made some strategic decisions there to get out of some non-core, you know, non-core revenue-generating items there. And that's what's led, really, to the quarter-over-quarter decline there. But the marketplace, the core marketplace itself, continues to have strong growth based on

Diwakar M Choubey: That our media business, we've made some strategic decisions there to get out of some noncore.

Diwakar M Choubey:

Diwakar M Choubey: Non core revenue generating items, there and that's what led to the Q quarter over quarter decline there, but the marketplace. The core marketplace itself continues to have strong growth based on some of the things I just mentioned.

Richard Correia: Yeah, and I'd say the two that are kind of key drivers around that. If you look at the recurring revenue profile of that enterprise business, and specifically the marketplace businesses you see from the cohorts, we continue to have over a 90% recurring revenue profile with our partners. The second is that we've invested heavily in our AI-driven algorithmic cross-selling functionality. So when someone comes onto the platform, subsequently, we're retargeting them to be able to drive that kind of second and third derivative product, which of course has margin expansion opportunities for us.

Diwakar M Choubey: Yeah.

Diwakar M Choubey: So the two kind of key drivers around that if you look at the recurring revenue profile of that enterprise business and specifically the marketplace business as you see the cohorts. We continue to have over 90% recurring revenue profile with our partners. The second is that we've invested heavily in our AI driven algorithmic cross selling.

Richard Correia: Optionality so when someone comes onto the platform subsequently were re targeting them to be able to drive that kind of second derivative product, which of course is margin expansion opportunities for us. So the durability of that marketplace businesses really shining through.

Richard Correia: So the durability of that marketplace business is really shining through, and that's also in the face of some of the headwinds that Dean talked about from a macro perspective. So, you know, we believe that we're seeing the kind of early signals that this is turning in the quarter, which gives us a lot of confidence as things unfold over the rest of the year.

Richard Correia: That's.

Richard Correia: Also in the face of some of the headwinds that you've talked about from a macro perspective. So we believe that we're seeing early signals that that's turning in the quarter, which gives us a lot of confidence as things unfold over the rest of the year.

Kyle Peterson: Got it. That's really helpful. And then just to follow up, great to see you guys were profitable on a gap in income basis this quarter. Is that something we should expect to see moving forward from you guys? Or is there anything in one time and on the expense front that benefited during the quarter?

Speaker Change: Got it.

Speaker Change: Yeah. That's that's very helpful. And then just to follow up a great to see you guys were profitable on a GAAP net income basis this quarter.

Speaker Change: Is that something we should expect to see it moving forward from you guys or was there anything one time in the.

Kyle Peterson: The expense front the benefited during the quarter, just how should we think about profitability on a GAAP basis from here.

Richard Correia: Yeah, we didn't have any one-time items that drove that. That was blood, sweat, and tears that got us there. You know, I would say if you looked at our business year over year, from an operating leverage perspective, we continue to show significant improvement there. So, year over year, our revenue was up 28%, but our off-ex was only up 13%. So that expansion, in terms of being able to drive our EBITDA margin, our net income margin, was really coming from the platform advantage.

Speaker Change: Yeah, we didn't have any one time items that drove that that that's what sweat and tears.

Richard Correia: That got US there I would say if you looked at our business year over year from an operating leverage perspective, we.

Richard Correia: We continue to show significant improvement there so year over year revenue was up 28%, but our opex was only up 13%. So that extension in terms of being able to drive our EBITDA margin net income margin is really coming from the platform advantage. We've been talking about for a long time, and we've hit that inflection point, where we feel.

Richard Correia: We've been talking about it for a long time. We've hit that inflection point where we feel really good about continuing to drive free cash flow, continuing to drive net income. You know, obviously, this season, we talked about tax season kind of happening within the quarter, so that had, you know, some effect in terms of the overall performance of our provision. But again, the real driver is that we are creating operating...

Richard Correia: Really good about us continuing to drive free cash flow continuing to drive net income.

Richard Correia: Obviously this season, we talked about taxi as it kind of happening within the quarter. So that had some effect in terms of the overall performance of our provision, but again the real driver is that we are creating operating leverage from our platform advantage I mean, we don't see that changing going forward.

Kyle Peterson: Got it. That's really helpful. Thanks, guys. Nice quarter.

Speaker Change: Got it.

Speaker Change: Very helpful. Thanks, guys nice quarter.

Operator: Thank you. Our next questions come from the line of Jacob Stephan with Lake Street Capital Markets. Please proceed with your question.

Kyle Peterson: Thank you our next questions come from the line of Jacob Stefan with Lake Street Capital markets. Please proceed with your question.

Jacob Michael Stephan: Hey guys, congrats on the quarter and gap profitability here. I was just kind of hoping you could elaborate a little further on the comments you made about lower conversion rates on the enterprise side of the business. It sounds like product partners might be spending less with you, and it's kind of affecting you, but any kind of comments you have there would be really helpful.

Jacob Michael Stephan: Hey, guys, congrats on the quarter and GAAP profitability here.

Jacob Michael Stephan: It was just kind of hoping you could elaborate a little further on the comments you made about the lower conversion rates.

Jacob Michael Stephan: The enterprise side of the business it sounds like product partners might be spending less with you and it kind of affecting you, but any kind of comments you have there would be really helpful.

Diwakar M Choubey: Hey Jacob, good morning. Look, as we said before, given the mix that we have between the burgeoning new verticals that we're building out across credit cards, insurance, mortgages, auto loans, and sort of the strength of the business in the credit verticals. It is clear that we are still in the troughs of marketing spend with a lot of our partners, but we're mitigating that. Consumer demand continues to be really high for products.

Speaker Change: Thank you Jack and good morning.

Jacob Michael Stephan: As we said before.

Diwakar M Choubey: Given our given the mix that we have between.

Diwakar M Choubey: The burgeoning new verticals that we're building out across credit cards insurance mortgages auto loans.

Speaker Change: Sorry about that.

Diwakar M Choubey: Strength of the business and the credit verticals. It is clear that we are still in the troughs of marketing spend.

Diwakar M Choubey: With a lot of our partners, we're mitigating that the consumer demand is continues to be really high.

Diwakar M Choubey: Now really, the opportunity, there are very few people out there in the market that can take the intentions and the preferences. When we talk a lot about machine learning, we talk about the application of generative AI. These aren't things that we're doing for fun, right?

Diwakar M Choubey: Four products now really the opportunity there are very few people out there in the market and take the intentions and the preferences. When we talk a lot about machine learning when you talk about the application of generative AI. These are things that we're doing for fun right. These are things that we're doing really to glean. The second derivative the third derivative of why the consumers in market lumpy for the finished product.

Diwakar M Choubey: These are things that we're doing really to glean the second derivative, the third derivative of why the consumer is in the market looking for a financial product. So they're coming in for a credit product, but we can solve the problem of the consumer with a substitution product. We're now able to mitigate the macro and abstract away from the fact that marketing spends are muted. So, we're continuing to add suppliers, right? So we are, because of the way we are set up, because we are API first, because we're developer friendly, if you're a publisher, we're a leading partner to use to monetize your impressions that you're getting as a publisher through financial products, right?

Diwakar M Choubey: So they're coming in for a credit product, but we can solve the problem with the consumer with a substitution product or now able to mitigate the macro and abstract away from the fact that marketing spends are muted.

Diwakar M Choubey: So we're continuing to add suppliers right. So we are because of the way we are set up.

Diwakar M Choubey: We are API first because we are a developer friendly if you're a publisher.

Diwakar M Choubey: A leading partner can use to monetize your impressions that youre getting as a publisher through financial products right. So we're best in class there and that's mitigating a lot of the conversion elements that we're seeing so yes, there are muted conversions or mitigating that with product with growth as well as an increase in.

Diwakar M Choubey: So we're best in class there, and that's mitigating a lot of the conversion elements that we're seeing. So yes, there are muted conversions, but we're mitigating that with product-led growth as well as an increase in the number of supply that we're bringing into the economy. I'll turn it over to Rick to add any color to that as well. Yeah, hey Jacob, I appreciate you double...

Diwakar M Choubey: The number of supply that we're bringing into the ecosystem I'll turn it over to Rick to add any color to that as well Hey, Jacob I. Appreciate you double click into this one.

Richard Correia: Hey Jacob, I appreciate you double-clicking on this one. If you're looking at our marketplace, and we break it down into our lending and our non-lending products, certainly within lending, I think everyone is now acutely aware, as we've talked about, what the macro looks like. If you look at our non-lending business, where we've invested in terms of growing our ability to offer non-lending products, mortgages, credit cards, insurance, and wellness products, that's actually up from a conversion perspective. And that's more reflective of us, again, abstracting away from the macro, investing in areas where we see opportunities to sell that kind of second and third derivative product.

Richard Correia: If youre listening to our marketplace and we break it into our lending and our non lending products certainly within lending I think everyone is now acutely aware and as we've talked about and.

Richard Correia: What the macro looks like.

Richard Correia: Our non lending business, where we've invested it in terms of growing our ability to offer.

Richard Correia: Not letting products mortgages credit cards insurance, a wellness products, that's actually up from a conversion perspective, and that's more reflective of US again abstract you away from the macro investing in areas, where we see opportunities so that kind of second and third derivative products. As a reminder, when customers come in and take a first party product with us.

Richard Correia: As a reminder, when customers come in and take a first-party product with us, they have a 60% chance of selling it. Product Margin. When they take a third-party product, it's around a 30% product margin. Then, when we cross-sell later, we are able to have a 90% product margin with those customers going through that journey. We call it our 30-60-90 strategy. And so while, yes, we are seeing unit conversions on the lending side, on the non-lending side, we've been able to increase the percentage of our product consumption within non-lending within the marketplace.

Richard Correia: They have a 60% probably.

Richard Correia: Margin.

Richard Correia: When they take a third party product, it's around a 30% product margin when we cross sell later.

Richard Correia: We are able to have a 90% product margin with those customers going through that journey, we call it or 630 60 90 strategy.

Richard Correia: So while yes.

Richard Correia: We are seeing unit conversions on the lending side.

Richard Correia: On lending side.

Richard Correia: It will increase the percentage of our product consumption within non lending within the marketplace and overall, we're seeing margin expansion because we are able to successfully take that customer through the 30 60, 90 journey and we're going to continue to see that as we focused on investing in kind of marketing and helping our customers get to the right.

Richard Correia: And overall, we're seeing margin expansion because we are able to successfully take that customer through the 30-60-90 journey. And we're going to continue to see that as we focus on investing in marketing and helping our customers get to the right second and third product for them.

Richard Correia: So that's one.

Jacob Michael Stephan: Got it. Okay, that's helpful. And then maybe touching on guidance a little bit here. You know, even margin guidance plus a sequential step down, something we haven't seen for a while here, but maybe I was just looking for some additional kind of comments on why we can all of a sudden like sequential down can lower margins. Yeah.

Speaker Change: Got it okay. That's helpful.

Jacob Michael Stephan: And then just maybe touching on guidance a little bit here.

Jacob Michael Stephan: EBITDA margin guidance implies a sequential step down something we've seen for a while here.

Jacob Michael Stephan: I was just looking for some additional comments on why we own all of a sudden sequential downtick in.

Jacob Michael Stephan: EBITDA margins.

Richard Correia: Yeah, I think I would just clarify. In fact, you're seeing us really consistent. You know, guidance for the first quarter was 13 to 15 percent of EBITDA margin, which is extremely strong in terms of how you think about us, where we are in our life cycle as a company. We talked about medium-term targets in the 20 to 30 percent range. The Q2 guidance was right in line with that. In fact, it was slightly higher at 13.1 to 16 percent, so a higher midpoint.

Speaker Change: Yeah, I think I would just clarify in fact youre seeing is really consistent you know guidance for the first quarter was 13% to 15% of EBIDTA margin was extremely strong.

Richard Correia: In terms of how you think about hospital, we are in our lifecycle as a company we've talked about medium term targets in the 20% to 30% range. The Q2 guidance was right in line with that in fact, it was slightly higher at $13, 1% to 16% so a higher midpoint does it.

Richard Correia: As I talked about, we did see a little bit of seasonality give us some lift in Q1 in terms of EBITDA margin at 19.4 percent. You know, kind of given the macro, given everything that's happening within the space, we're really confident we're going to be consistent in terms of our really strong EBITDA margin at 13 to 16 percent.

Richard Correia: Talked about we just see a little bit of seasonality give us some lift in Q1.

Richard Correia: In terms of EBITDA margin at 19, 4%, you've kind of given the macro given everything that's happening within the space. We're really confident we're going to be consistent in terms of our really strong EBITDA margin of 13% to 16%.

Jacob Michael Stephan: Okay, I got it. Thanks, guys. Good luck going forward here.

Speaker Change: Okay got it thanks, guys. Good luck going forward here.

Operator: Thank you. We have reached the end of our question and answer session. And with that, I would like to bring the call to a close. We appreciate your participation. You may disconnect at this time. Enjoy the rest of your day.

Speaker Change: Thank you we have reached the end of our question and answer session and with that I would like to bring the call to a close we appreciate your participation you may disconnect at this time.

Operator: Enjoy the rest of your day.

Operator: Yeah.

Operator: Okay.

Operator: Yeah.

Operator: [music].

Operator: Yeah.

Operator: Okay.