MoneyLion Inc

NYSE:ML

Earnings Call Transcript 2023-Q1

[Operator]

Good day and welcome to MoneyLion Incorporated First Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] please note 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.

[Sean Horgan, Head of Investor Relations]

Thank you and good morning. Welcome to MoneyLion’s first quarter 2023 earnings conference call. Joining me today to talk about our results are MoneyLion’s CEO, Dee Choubey; and CFO, Rick Correia.

You can find the presentation accompanying our earnings release on the Investor Relations section of our website. Please note that any Forward-Looking Statements made in this commentary are subject to our Safe Harbor statement found in our SEC filings and in our earnings press release.

Now, I will turn the call over to Dee.

[Diwakar Choubey, Chief Executive Officer]

Thank you, Sean. Good morning and welcome everyone to our first quarter 2023 earnings presentation. I’m excited to share with you the exceptional results MoneyLion has achieved in the first quarter of 2023.

Our performance in this quarter is a testament to the strategy we set out to execute, despite the continued volatility and uncertainty in the global macro environment. The core pillars of our strategy include, first and foremost to transition from growth at all costs to efficient growth, while hitting profitability milestones.

Second, to integrate unique assets acquired through our acquisitions. And this is really our unique data advantage and financial content creation capabilities to acquire and retain at scale is your superpower.

The advancements in large language models like ChatGPT are great. But we have the white truffle the massive data advantage that gets generated after interacting with billions of touch points and transactions across millions of customers. We continue to innovate to build our proprietary data to power insights that accelerate the adoption of our product in enhance our relationship with consumers.

And finally, to ensure balancing innovation and growth with a long-term drive toward strong and consistent margins. This has been a relentless pursuit for us driving innovation in the wake of tremendous market disruptions.

In the first quarter of 2023, MoneyLion exceeded the plan. We achieved $89 million in adjusted revenue, reflecting 34% year-over-year growth, and above our stated guidance of $85 million to $88 million.

We reached $7 million of positive adjusted EBITDA, this is an important milestone as our first quarter of positive adjusted EBITDA as a public company. Like or Q4, we were pleased that we were ahead of guidance.

And going forward when we balancing adjusted EBITDA with growth. We added a record 1.3 million new customers, bringing your total customer base to 7.8 million. The credit health of the U.S. consumer that uses MoneyLion remains strong.

And we are continuing to meet the demand while maintaining strong credit performance backed by our near 11-years of experience in applying AI driven risk models, our historical cohorts outperformed in Q1 2023 as you can see in our financials.

Our consumer mix outperformed our expectations, showcasing the benefits of our diverse revenue mix. MoneyLion consistently performs in any environment, and today’s results reflect just that. We have built MoneyLion to thrive regardless of market forces outside of our control.

Before I provide an update on our business, let me first touch on what we believe are the key takeaways for investors following the announcement in the first quarter results. First, our business model demonstrates resilience across economic cycles, and unprecedented number of our consumers are looking for our products.

Our improved automated, an AI driven lifecycle marketing is increasing conversions more efficiently than any time in our operating history. Our continuous optimizations across our organization are increasing profitability, and our AI powered risk models optimized credit performance and active portfolio management.

Second, our first quarter 2023 adjusted revenue exceeded our guidance. We delivered $89 million in adjusted revenue versus our guidance of $85 million to $88 million. Our deliberate investments in media and marketplace assets over the last two years position our business for low cost customer acquisition and high consumer LTV through cross-sell over time. And this drives leading unit economics throughout economic cycles.

Third, we achieved our first adjusted EBITDA positive quarter as a public company, highlighting our steady path to profitability. We delivered $7 million of positive adjusted EBITDA in the first quarter of 2023, exceeding our guidance of negative four million to breakeven for the quarter. There is always a balance in investing in innovation and driving the bottom line. Our strategy is to deliver in a way that drives both growth and positive unit economics at the same time.

And fourth, MoneyLion is well positioned for growth. Our two sided consumer and enterprise ecosystem drives disruptive growth to differentiated customer acquisition, retention and monetization.

We have to remember we are still in the early innings of fully realizing the synergies of our acquisition of even financial, which we rebranded this quarter to engine by MoneyLion. Engine represents an important proposition for our enterprise partners.

We look forward to being an important partner for analytics, data validation, fraud and performance marketing for our key clients. We believe the achievement of these synergies will create multiple avenues for growth for years to come, as we deliver our best-in-class technology to the industry.

Shifting our focus to overall customer growth, we achieved a record 1.3 million new customer ads in the first quarter of 2023, while maintaining discipline levels of marketing spend. This is a key strength of MoneyLion. The installed base of customers create multiple opportunities for us to serve their needs with the right offer using booting edge technologies in times of excess and in times of need.

Our marketing flywheels momentum is evident as enhance the life lifecycle initiatives, and a robust top of the funnel, bolstered by our enterprise business allows us to sustain sub $15 customer acquisition costs in Q1.

We see this trend accelerating throughout 2023. This is part of MoneyLion secret sauce that is fueling our incremental profitability quarter-over-quarter and provides us a cost advantage over less diversified business models.

Turning to product consumption. Simply put, we have built our remarkable customer acquisition engine coupled with a must have suite of financial tools, money adjacent content, and access to our fulsome network.

By the end of the first quarter 14.7 million total products were consumed on our platform, up from nine million in the first quarter of 2022. To illustrate the mix shift 73% of these products consumed in Q1 were third-party products compared to just 10% in Q1 of 2021.

This shows us we are not just a neobank for a specific segment, and we have diversified beyond loans in the marketplace. We now offer more products to a larger TAM and have multiple reasons to interact with consumers throughout their lives.

Marketplace synergies are driving broader product consumption in deepening our relationships with customers by matching them with the products they need. This synergy also deepens our customer’s engagement with our platform by making the overall offering more valuable to our consumers.

Let’s take a closer look at our consumer and enterprise businesses. Starting with our consumer division. Our consumer offering is a vast, full featured money app. We continuously innovate on our first party products and enhance them with additional services, features and benefits.

This business outperformed our expectations in the first quarter, led by strong performance across the product suite, including Instacash, Credit Builder Plus membership, and our banking product. This revenue diversification that we distinctly enjoy is a result of years of methodical platform investment and as a pillar of our competitive differentiation.

From a first party product perspective, we saw strong performance in Instacash, which enables customers to cover unexpected expenses and costly overdraft fees. Demand for Instacash was above our expectations during the quarter, while we also saw improvements in the product’s overall performance.

In banking, we saw some seasonal benefits in the first quarter with tax refunds driving strong payment volume in Q1. Deep relationships with our customers formed over several years drove record yield and deposits as well. Our Credit Builder Plus product continued at strong performance in the quarter. We made investments in infrastructure related initiatives to improve the cost base.

Lastly, our new membership product is showing promise ahead of its full launch. This premium membership builds on the success of our Credit Builder Plus membership with enhanced features and benefits.

It will include community-like attributes through an in-app experiences, user stories, and financial challenges that drive engagement and retention. The premium membership will also provide exclusive offers to members and the opportunity for non-members to upgrade to take advantage of this premium benefits.

Moving to our enterprise business. During the first quarter, we successfully diversified our enterprise business through an enhanced mix of financial services providers and products, effectively enabling us to offset some of the headwinds facing certain of our existing third-party products.

Starting with the enterprise marketplace, we have been performing well in spite of industry-wide headwinds. Our initiatives focused on broadening the scope of our enterprise product mix, moving beyond the traditional realm of loans have begun to bear fruit. We expanded into verities across adjacent high value product types, like high-yield savings accounts, safe driver tracking and health.

We also entered a number of new partnerships during the quarter, representing a significant pipeline of incremental revenue going forward. As we continue to develop and introduce an array of comprehensive marketplace solutions and sophisticated web services products, we are confident in the value and success they will bring to our customers and enterprise partners.

Within MoneyLion Media, our award-winning content continues to drive engagement for new and existing customers on the MoneyLion app. We look forward to the strong momentum continuing into the second quarter.

Our broad network of enterprise partners continues to expand. We continue to onboard new partners and deepen our relationships with our existing ones. As our network grows, so does our value proposition and this is a critical component of our powerful business model, which ultimately improves outcomes for end consumers.

This also underpins a valuable customer acquisition channel that shows early indications of a better performing customer from an LTV perspective. We are capitalizing on the current environment by taking market share to maximize our footprint.

And with that, I would like to pass it over to our CFO, Rick Correia for a financial update.

[Richard Correia, Chief Financial Officer]

Thanks, Dee and good morning to everyone. I look forward to sharing details about our record financial performance for the first quarter ending March 31, 2023. I will also discuss our guidance and outlook for the second quarter.

As we were going through the financials, please note that unless otherwise stated, I will be referring to adjusted results in all quarterly period references referred to the first quarter of 2023 versus the first quarter of 2022.

Our GAAP consolidated financials and non-GAAP reconciliations are available in today’s earnings release and will be available in our 10-Q filing. I also want to highlight one recent development that will be reflected in our 10-Q. On April 21st, we announced that MoneyLion’s Board of Directors approved a one for 30 reverse stock split of MoneyLion’s Class A common stock following stockholder approval on April 19th.

Now shifting gears to our fundamental performance during the first quarter of 2023. Each quarter, we continue to see great results as a result of our customer acquisition and lifecycle strategy.

Starting with our first point of contact with our customers or our top of funnel, we deployed marketing dollars over a diverse set of channels, including marketplace, brand influencers, organic and paid digital.

In the first quarter, these channels translated into about 34 million total customer inquiries, which represents the number of submitted consumer applications for financial products across our marketplace business MoneyLion app installs and users have registered via the MoneyLion website.

These consumer inquiries are then translated into a record 1.3 million of new total customers leading to 7.8 million total customers by the end of the first quarter of 2023. We are seeing an increasing shift in the mix of customers coming through our proprietary marketplace channel, which come in a higher pack, but represent a highly scalable strategy and present better cross sell monetization opportunities with even higher projected LTV going forward.

Our vast breadth of first and third-party product offers enables our consumers to find what they need all in one place, which helps drive our strong consumer lifetime value. We added 1.8 million incremental total products, leading to 14.7 million total products consumed by the end of the first quarter of 2023.

Now let’s take a look at our unit economics for the first quarter. As mentioned, we added a record 1.3 million new total customers in the first quarter. Our fully loaded CAC was under $15 in the first quarter, while this is down from the first quarter point 2022, it is an uptick from our recent quarters.

As we have discussed in the past, this is a strategic move. That is the result of focusing on a mass market user segment where we are driving sustainable growth, while also realizing profitable unit economics.

Additionally, we spent to acquire in our own marketplace and that has flywheel benefits for the overall network. We made investments to increase the customers and volume being transacted in the enterprise network, which contributed to our overall customer acquisition costs to the during the first quarter.

We estimate that our payback period is still strong at approximately three months for the first quarter of 2023. ARPU was $50 in the first quarter compared to $62 in the fourth quarter of 2022. This lower level of ARPU reflects a key synergy from our acquisition of even financial playing out as we officially acquire customers in the mass market segment and take market share.

This is our TAM expanding away from just financial products to engage consumers with our marketplace. This aligns with MoneyLion strategic positioning of helping a broad segment of the population make the right money related decisions in authentically monetizing through both third and first-party products.

More and more of our customers are taking third-party products as their first product on our platform, which reflects the vast number of products we offer our customers. More options for our customers drives better outcomes, and we believe this will drive higher lifetime value overtime.

As mentioned earlier, we are seeing accretive lifetime value benefits of acquiring customers through our high intent marketplace channel, then retaining and monetizing through breadth of content and products overtime.

As a result, we continue to see high levels of recurring revenue in the first quarter, starting with consumer. In the first quarter of 2023, over 90% of our consumer adjusted revenue came from historical cohorts, a testament to our product market fit. As you can see, customers from historical cohorts continue to consistently drive the majority of our adjusted revenue, in some cases, years after they joined our platform.

Now on to our enterprise business. Over 98% of adjusted revenue for our enterprise business came from prior year cohorts. While we all like to see charts that are up to the right, let me take a moment to provide some color on our 2020 cohort.

As everyone knows, well, in 2020, at the onset of the pandemic, the U.S. enacted a zero interest rate policy and flooded the market with stimulus dollars that resulted in the emergence of significant digital lenders on our platform.

As we discussed last year, some of these lenders have reduced the levels of originations which impacted available product inventory in the marketplace. While we continue to see record levels of demand for products in the marketplace, there was a short-term impact of the 2020 cohort.

As Dee mentioned, this was offset by a record level of non-personal lending product consumption in the marketplace as we materially expanded the offering. In summary, the enterprise business is executing well in the face of a volatile macro environment. This is a direct result of our flexible marketplace technology platform, rapidly delivering the most in demand products and business positions us really well for future growth.

We saw continued strength in consumer origination performance in the first quarter. Total originations were 506 million in the first quarter. The 24% year-over-year increase was achieved by leveraging our distinct acquisition channels and AI driven optimizations, which combined to fuel our path to steady, profitable growth.

Our provision expense as a percentage of originations was 2.3% in the first quarter, which is below the low end of our target range of 4% to 6%. This is a great outcome reflective of our historical cohorts, outperforming and resulting in a benefit to provision expense in the first quarter of 2023.

Going forward, we will continue to manage originations to prioritize our highest quality customers as a powerful lever for consistent growth and profitability, we expect our provision to be within our target range of 4% to 6%.

Adjusted revenue for the quarter grew 34% year-over-year to 89 million, marking another strong quarter for MoneyLion. This exceeded our guidance of 85 million to 88 million. Our strong performance was driven by record consumer revenue.

Importantly, we are emboldened by achieving the revenue beat in the face of anticipated macro headwinds that impacted the enterprise marketplace, Lending Asset class, which positions the business for future growth.

This is the benefit of having a consumer B2C business alongside an enterprise B2B to B2C business. That combined to cover a broad spectrum of consumer segments. We see this theme in our business mix.

Our consumer business contributed to 68% of our adjusted revenue the first quarter up from 65% in the fourth quarter of 2022. Strength across our consumer business contributed to the increase in the overall mix in the first quarter. Our enterprise business contributed 32% of our adjusted revenue in the first quarter, down from 35% in the prior quarter.

Looking at adjusted gross profit within our guidance range, the lower gross margins for the period were driven by lower enterprise gross margins due to strategic decisions that we made to take market share to position us for future growth.

Now onto our path to profitability. Q1 2023 was our first quarter of positive adjusted EBITDA as a public company, a significant milestone. Adjusted EBITDA in the first quarter was seven million compared to negative 25 million in the first quarter of 2022, and marked our 5th consecutive quarter of adjusted EBITDA improvement. This exceeded our guidance of negative four million to break even for the first quarter.

Margin improvement in the first quarter was partially driven by strong performance in our consumer business, as well as realizing our first full quarter of benefits from the 15 million of annualized cost synergies we action in the fourth quarter of 2022. We expect to realize further acquisition related revenue and cost synergies in 2023, positioning us for profitable growth.

Lastly, we ended the first quarter with 111 million of cash and generated positive operating cash flow for a second consecutive quarter, and we expect to continue to progress through sustainable cash flow generation.

Based on feedback from investors, I would like to take a moment to walk through a few select items on our balance sheet in order to clarify how our capital light model of first-party products and marketplace tie to our balance sheet.

On this slide, we have selected lines from MoneyLion Inc’s consolidated balance sheet, broken out between amounts held at special purpose vehicles or SPVs, and those held directly by MoneyLion.

Here are some areas we would like to clarify. Note 1, amounts held in SPVs. MoneyLion Inc’s consolidated balance sheet includes items held at SPVs, which have entered into credit facilities with third-party lenders that we then utilize to finance consumer receivables originated on our platform.

These amounts are consolidated into our balance sheet for gap accounting purposes. The sum of the two represent the consolidated balance sheet amounts that you see in our financial statements.

Now onto MoneyLion’s directly held balances. Note 2 receivable from payment processor. We had about 35 million receivables from payment processors as of the end of the first quarter. Effectively, this is cash in transit.

Note 3, consumer receivables held directly by MoneyLion. We ended the quarter with 27 million of consumer receivables net of expected loss reserves held directly by MoneyLion. Note that this compares to 149 million on our consolidated balance sheet. The majority of consumer receivables held by MoneyLion represent fee and subscription receivables tied to revenue.

Now shifting to the balances held in SPVs. Note 4, total assets and other debt. There was a balance of about 122 million of consumer receivables held and SPV credit facilities at the end of the first quarter. This is the majority of the consumer receivables balance you see on our consolidated balance sheets under GAAP accounting.

Importantly, these receivables represent principal amounts of loan and instant cash receivables, pledged by the SPVs to finance additional receivables were the main recourse third-party lenders have is principal cash collected and future principal collections only up to the other debt balance and related interest.

Next, you will see that there was about 120 million in other debt held at SPVs at the end of the first quarter. This represents the entire amount of other debts seen on MoneyLion’s consolidated balance sheet.

Lastly on MoneyLion’s consolidated balance sheet in Note 5, you will see our secured loans, we ended the quarter with about 89 million unsecured loans. The secured loans effectively represent MoneyLion’s corporate debt, which we amended in late April in order to pay down 25 million of corporate debt over the next six-months, with the residual balance due in March 2026. This proactive step reduces the company’s interest expense, another important step towards profitability.

Shifting gears our first quarter guidance versus our results. Adjusted revenue was 89 million, which exceeded the high end of our guidance range of 85 million to 88 million. Adjusted gross profit margin was 58%, which was at the low end of our guidance driven by lower enterprise gross margins as we expanded the asset class offering and opportunistically traded off margins for market share locking in future enterprise growth.

We also had slightly higher processing costs in the quarter that we anticipate reverting to our historical levels in Q2. Adjusted EBITDA was 7 million. This also exceeded the high end of our guidance range of negative for to break even for the first quarter.

Before turning to our outlook, a quick note on our reported non-GAAP metrics. During the quarter, we determined that GAAP revenue and gross profit are the key performance metrics that we will use to measure revenue profitability and evaluate business performance going forward.

As a result, MoneyLion will no longer provide financial guidance using adjusted revenue and adjusted gross profit and instead will provide financial guidance using GAAP revenue and gross profit going forward.

Now, through our guidance for the second quarter of 2023. We expect GAAP revenue of 95 million to 100 million reflecting 9% to 14% of consistent and profitable year-over-year growth. As Dee mentioned earlier, this reflects both the resilience of our mass market offerings and our ability to manage performance incredibly well with the help of our talent and technology.

We expect gross profit margin in the range of 54% to 58%. Our guidance reflects gross margin roughly in line with the first quarter of 2023 as we continue to increase enterprise marketplace product breadth and market share to drive future growth.

We expect adjusted EBITDA in the range of one million to eight million. In the first quarter adjusted EBITDA performance was driven in part by optimizations to the business as we realize acquisition synergies as well as provision expense reduction from AI optimizations, creating a Q1 benefit. We expect to provision expense as a percentage of originations be back with our target range in Q2.

Lastly, for the full-year of 2023, we continue to expect positive adjusted EBITDA marking our first full-year of adjusted EBITDA profitability as a public company. We are immensely proud of the MoneyLion team’s dedication in propelling steady, profitable growth.

With that, I will turn it back over to Dee for closing remarks.

[Diwakar Choubey, Chief Executive Officer]

Thanks, Rick. Q1 2023 marks another quarter of exceptional performance from MoneyLion. Our results highlight consistent growth and our steady path to profitability and we look forward to building on this momentum throughout the rest of the year.

MoneyLion has made important strides towards profitability since the beginning of the current rate hiking cycle, in spite of the challenges that have consequently emerged. The durable business we built presents us with significant opportunities in the current economic environment.

We are mindful that neither the highs nor the lows are as extreme as they may appear and we look forward to continuing to build innovative solutions for our customers in creating value for our shareholders for many years to come.

Thank you very much for joining us today and we look forward to taking your questions.

[Operator]

[Operator Instructions] Our first question comes from Josh Siegler with Cantor Fitzgerald. Please state your question.

[Josh Siegler, Cantor Fitzgerald]

Hi guys good morning and thanks for taking my question and nice to see the strong profitability this quarter. My first question is really around the regional banking turmoil. Have you seen a significant inflow of new customers related to the uncertain regional banking environment right now?

[Diwakar Choubey, Chief Executive Officer]

Hey, Josh, it is Dee, I will take that I will start with that. Look whenever there is dislocations in the banking world, we take advantage. If you look at our DNA when we started the business in 2013, it was on the heels of the last credit crisis. And the whole thesis of why MoneyLion exists is to disrupt not only the regional banks, but the money center banks, right.

So if you look at the growth in Q1, we saw incredibly strong demand from Instacash, Instacash was a overdraft replacement. So that product inherently, by the way, it is built the way it is structured in the value that it serves its consumer, the end consumer is built to disrupt what not only the regional banks, but also the money center banks are not able to provide that customer.

So we are always using opportunities and specifically pain points like the one that we are seeing right now. Kind of go through the ecosystem. Use that to our advantage from a customer acquisition perspective. And that is why we saw that demand was above our expectations in Q1 for Instacash.

And we saw really improving credit performance as well. And that has multiple reasons behind that credit performance, but surely partly driven by folks realizing that MoneyLion is a more cheaper, more convenient, more flexible and more innovative solution to what’s offered by the regional banks.

[Josh Siegler, Cantor Fitzgerald]

Excellent. That is a very helpful color. And then I would love if we could dive a little bit deeper into the outlook specifically for the enterprise business and how you expect that to play out throughout the year.

[Diwakar Choubey, Chief Executive Officer]

Yes. So look, we are continuing to see industry-wide headwinds in our enterprise business through the first quarter. And this started in the second half of last year. And if you think about who’s on our network, we have some of the world’s leading publishers on one side of the network, and we have some of the leading financial institutions on the other side of the network.

So what has happened with the rate hiking cycle is the cost of capital has gone up for not only FinTechs, but also banks. But anytime that happens, the demand for funding those loans goes down as well from a consumer perspective, the consumer that was used to single digit interest rates on their two, three, five-year personal loan is now seeing a sticker shock as they see higher interest rates on that same product that they were.

So there are a lot of substitution effects happening just from the consumer side, but a lot of that was mitigated by the fact that our network is very robust and deep whereas we had a strong inflow of revenue last year from the personal lending category.

We have been able to diversify that into high yield savings, into CDs, into other asset classes of lending into some, dare I say, non-financial products like healthcare and health related capabilities as well. So we are seeing that mix shift really kind of softened the overall headwind that we are facing.

But if you think about where we were from just an approval rate perspective, a funding rate perspective a year ago, we have inbuilt growth in the market as advertising dollars come back and as the rate regime changes over the over the upcoming periods.

So we see that - while there is a headwind not a part of the business, there are incredible opportunities and we are well positioned to show modest growth in the enterprise business to the rest of the year.

[Josh Siegler, Cantor Fitzgerald]

Excellent, thank you Dee. And congratulations on the execution again.

[Diwakar Choubey, Chief Executive Officer]

Thanks Josh.

[Operator]

[Operator Instructions] Our next question comes from George Sutton with Craig Hallam. Please state your question.

[George Sutton, Craig Hallam]

Thank you. My congrats on the EBITDA positive as well. So when we look at how others in the marketplace space have performed, the nerd wallets and the lending trees of the world, you are obviously outperforming pretty materially. Can you just give us a sense of what you are addressing differently perhaps than some of them are and why you are seeing these results and do I look at your TAM expansion as you talk about it and into these other marketplace areas like safe driver and health as examples of that?

[Diwakar Choubey, Chief Executive Officer]

Hey, George. Thanks for the question. I think there is been a lot of chatter and innovation on the application of artificial intelligence. If you think about the DNA of MoneyLion going back to 2023 and why, how we started with the founding story that is been a part of our data advantage since early innings.

And I mentioned this in the remarks that when you interact across billions of touch points, and now our interactions of the consumer side of the business are generating so much insight on what the consumer wants to do at various inflection points.

We are seeing a lot of benefit of our technology being able to offer the right product at the right time on the right day with the right context, with the right content exploit explaining the product. And that is driving up despite the overall macro issues. It is helping us convert better, the conversion funnel.

And we always talk about lifecycle 3.0, we always talk about the next generation of using the advancements in the massive data that we have, as well as the new large language models, the new capabilities that we have, we have grown in-house.

It is not just latest for us, it is a whole library of in-house driven consumer intent, underwriting fraud and innovative AI models that we have internally that help us position the right product the right time.

Now, the other thing that is working for us is we have got a great sales team on the enterprise side that is able to go and get substitution product. So what happens when personal loan demand or credit card demand goes down? People still are aspirational in terms of how they fulfill their household needs.

So we are seeing a lot of success in matching consumers with the right high yield savings products. Back to Josh’s question about the impact of regional banks, we are seeing a lot of the regional banks offer 3.4%, 4%, 4.5%, 5% CDs right now. And that is a great product for consumers.

And we are using our technology to match that consumer demand, or at least highlight to consumers that “hey, the cash that you are just accumulated from tax season or the cash that you have just accumulated from an extra gig that you have done. Let’s get that to work for you in a safe way, through these some of these high yield and CD products.”

And that again has given sort of the need for deposits, we are able to play an important role in matching both sides of the market there and that is been a help on the enterprise side.

[George Sutton, Craig Hallam]

Just one other question for Rick. My number one email this morning, is asking the question of why the move from adjusted to GAAP. Can you just walk through the logic there?

[Richard Correia, Chief Financial Officer]

Yes, absolutely. I think if you look historically being the primary reason that we had adjusted on the top line was that. We were netting kind of provisions into revenue and we just knew that showing revenue on a standalone basis is consistent with GAAP and better kind of reflects the performance of the business. And the kind of having a full kind of holistic provision line is also kind of reflective of the overall operating performance of the business.

The other which was kind of a key reason that we had adjusted numbers on the top-line with as you recall, back several years ago, we had portfolios that were in the process of winding down. And so we had those adjusted out to kind of reflect to go forward to profile the business.

And at this point, we would well past multiple years of those portfolios being wound down. So this is a good juncture for us to now just move to kind of strict GAAP revenues, which of course then just understand to continue GAAP gross profits.

[George Sutton, Craig Hallam]

Alright, thanks guys.

[Operator]

There are no further questions at this time. And with that, we will conclude today’s conference call. Thank you all for your participation. All parties can now disconnect. Thank you.