MoneyLion stock slides despite positive second-quarter earnings

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Update: This article includes the closing stock price and details shared during MoneyLion's earnings call.

A quarterly earnings report from MoneyLion on Tuesday showed the challenger bank performed on par with its expectations for the second quarter and outperformed analysts' predictions.

Despite the positive results, the company's stock price ended 18% lower at $48.99. The poor share price performance comes even as similar credit issuers, including neobanks Dave and LendingClub and AI lending platform provider Upstart, saw modest to strong stock gains.

MoneyLion achieved $131 million in revenue during the second quarter — higher than the $125 million to $130 million to which it had guided. It also made $18.5 million in adjusted earnings before interest, taxes, depreciation and amortization, in line with the $17 million to $20 million it expected.

MoneyLion CEO Dee Choubey said in a press release that the fintech has all the ingredients needed to "disrupt consumer finance."

"We are putting our ecosystem approach into action through a number of products, services, and technologies that serve our partners and consumers alike, with features like AI-driven financial product search, MoneyLion checkout, content-as-a-service, web services, and much more," Choubey said.

One of MoneyLion's main lines of business — the company describes it as its enterprise line, which it acquired by purchasing Even Financial in 2022 — is matchmaking between lenders and consumers. MoneyLion runs an advertising network to serve prospective borrowers with advertisements for various credit and loan products.

MoneyLion also has a consumer line of business. MoneyLion's free offerings include interest-free cash advances of up to $500 through its InstaCash product (tips and expedited delivery options are optional) and consumer credit comparison tools.

The company's paid consumer services include managed investment accounts ($1-$5 monthly), mobile banking ($1 monthly) and its credit building product Credit Builder Plus ($19.99 monthly). The MoneyLion app also comes with features including financial literacy content served by a network of media influencers that the company has fostered.

During the earnings call Tuesday morning, Choubey announced MoneyLion Labs, which consolidates the company's many research and development projects under one brand name. These projects are focused on what Choubey considers the "four key elements of the digital ecosystem." Those areas are commerce, business services, content and developer kits. The fintech also launched a website to describe its lab initiatives.

First is MoneyLion AI, a generative AI-driven search engine designed to answer questions and offer advice in response to user inquiries. For example, when a user asks about specific savings vehicles, MoneyLion AI will generate a synopsis about the topic and serve content from MoneyLion partners and content creators. The search engine is also designed to provide personalized insights to MoneyLion users about, for example, their net spending or income.

Second, Choubey discussed MoneyLion's checkout experience, called Engine, which he said allows customers to search for, find and apply for third-party financial products, all in one place. Engine allows financial services providers to provide a "more seamless customer experience that reduces friction and drives higher conversions," Choubey said.

Third, Choubey briefly discussed MoneyLion's content-as-a-service offering, which will likely leverage the content MoneyLion licenses from individual and enterprise content creators. MoneyLion also produces content through its marketing agency Malka. MoneyLion promises more content updates "coming soon" on its labs website.

Fourth, Choubey alluded to a product called audience builder, which allows MoneyLion's enterprise partners to provide personalized recommendations to more targeted audiences. Additional details were not immediately available.