10-Q provides weekly insight into the moves of top financial and fintech stocks over the past week. A new issue lands in your inbox every Friday. Stay ahead. Subscribe here.
Welcome to the first issue of our new 10-Q newsletter. We're going to cover the moves in top financial and fintech stocks over the past week. Expect a new issue in your inbox every Friday. -- Sara Khairi
MoneyLion stock soars 26% after the company announced its Q1 FY22 results
MoneyLion's stock surged 26% last Thursday after Q1 revenue surpassed estimates and the company stated its FY22 outlook.
The company posted:
- Total net revenue increased 110% year-over-year to $69.71 million.
- Adjusted revenue grew 105% year-over-year to $66.5 million.
- A net income of $0.1 million, compared to a net loss of -$73.4 million in Q1 2021.
- Total customers by the end of the quarter grew to 3.9 million, up 117% year-over-year.
Moneylion’s approach to effectively acquiring new customers through acquisitions, and driving usage of their products across existing customers is key to its growth. In July 2020, MoneyLion teamed with MetaBank and Mastercard to launch Roar Money – a mobile bank account. That was followed by the acquisition of MALKA – a creator network and content platform that provides digital media and content production services in November 2021. The four-year partnership with MALKA accelerated MoneyLion's marketing efforts to reach out to consumers across all digital and emerging channels, allowing MoneyLion to directly connect with communities organically above and beyond its platform.
In February 2022, MoneyLion acquired Even Financial – which digitally connects and matches consumers with real-time personalized financial product recommendations from banks, insurance, and fintech companies through its marketplace technology. This acquisition bolstered MoneyLion's platform by improving consumers' abilities to find and access the right financial products to help them manage their financial habits. Over the past few months, this merger has also proved to be beneficial in broadening MoneyLion's addressable market, by extending its product landscape – leading to a diversified revenue mix aiming to become a premier financial super app for Americans. (Seeking Alpha)
Top stories of the week
Affirm unveils 54% revenue surge, extends Shopify deal – shares spike
Shares of BNPL firm Affirm surged 23% aftermarket last Thursday after the company surprised Wall Street when it announced earnings that painted a rosier picture for the greater BNPL industry for the fiscal year of 2022, which goes until the end of June – and extended a multi-year partnership with Shopify to continue to be the company's exclusive provider of installment payment plans on the platform in the US.
It appears as if Affirm’s earlier partnership with Walmart in February 2019 and especially the recent multi-year extensions with Shopify (a deal that initially cracked in July 2020), Peloton (merchant agreement first inked in January 2018 and represents Affirm's major chunk of revenue ever since), and Amazon (in August 2021), are beginning to pay off – all of them are highly valuable deals in the US until January 2023. This contributed to Affirm's third-quarter revenue jumping by 54%, exceeding the company's estimates, as it reaped benefits from higher interest income and loan sale volumes along with growing users. (Barron’s)
Warren Buffett’s portfolio: Out with Wells and in with Citi – a deep value play?
Buffett eyed Citigroup, which according to him is currently the best value play and the best bet in the banking sector. It traded at less than 60% of its tangible book value on Tuesday. Berkshire Hathaway's Form 13F regulatory filing unveiled the company had purchased 55.2 million shares, or roughly 2.8% of Citigroup's outstanding shares, for a total value of approximately $2.95 billion – and Berkshire's average cost per share was about $53.40. (Reuters)
Coinbase unveils Web3 mobile DApp, DeFi wallet, and browser
Coinbase is actively rolling out back-to-back product offerings – this month it unveiled a Web3 API and a hot wallet and browser available for a limited set of its mobile app users. The app will allow select users to access DApps on the Ethereum network such as Uniswap and OpenSea. Eligible users would be permitted to trade on NFT marketplaces like OpenSea and Coinbase’s own new platform, making swaps on decentralized exchanges (DEXs) like Uniswap and SushiSwap, and interconnecting with DeFi lending platforms like Curve and Compound to borrow and lend funds. (CoinDesk)
Dave reforms guidance – reports Q1 2022 financial results
Neobank Dave reported its financial results last Wednesday for the first quarter ended March 31, 2022 – total operating net revenue was $42.6 million compared to $34.4 million in Q1 2021, with 24% year-over-year revenue growth. Additionally, it recorded a net loss of $34.8 million, compared to $3.9 million in the first quarter of 2021. Adjusted EBITDA was $18.3 million, compared to $8.0 million in the first quarter of 2021. Dave utilizes Evolve Bank & Trust to provide its digital financial services.
Dave makes the bulk of its revenue from express processing fees when members expedite ExtraCash to their bank account or when they pay optional tips to Dave for providing the service. One reason for Dave’s Q1 2022 net loss could be the ExtraCash strategy as large traditional banks are on the path of eliminating or reducing overdraft fees. (Crowdfund Insider)
Deutsche Bank's WhatsApp use is under surveillance
German financial watchdog BaFin has ordered one of its key supervisors at Deutsche Bank to clarify how its staff uses private messages on WhatsApp for business purposes, to determine whether it has been in compliance with banking rules, and is not taking for granted messaging tools such as WhatsApp and private email accounts to conduct business. The move comes as US regulators, amid industry-wide scrutiny, are in pursuit to constrain the practice. (Bloomberg)
Deutsche Bank is taking a big step towards cleaning up its supply chain
Deutsche Bank demands sustainability ratings from suppliers, mandating that suppliers doing business with the bank undertake a vendor sustainability rating from EcoVadis or another qualified rating agency. (Finextra)
Google wallet re-launch -- what's new and different?
The brand new Google wallet provides an entirely new API with integrated security to store both non-secure and secure digital items like tickets, passes, IDs, Tokens, Access cards, transit, travel, loyalty, and health care credentials -- stored through the new Identity Credential Hardware Abstraction Layer (HAL) accessible through any Android phone – operating as a companion app to Google Pay, which remains the primary app for conducting transactions. Whereas, the old Google Wallet allowed access to only three types of passes: offers, loyalty cards, and gift cards. (American Banker)
New Goldman Sachs policy gives bosses a new perk
Goldman Sachs has been accused of overworking younger staff in the past – this time around under the company’s new memo, they will have to stick with their fixed number of paid days off, but will receive at least two extra days of leave each year. Senior staff, however, is allowed unlimited time off with no cap on paid leave under the bank's new "flexible vacation" plans which are mapped out to promote "rest and recharge". According to the latest strategic plans, GS will insist staff consume a minimum of three weeks of downtime across all levels of the business, every year from 2023. The move comes after GS slashed London-based employees' pay by 66% during the first quarter as dealmaking fees plummeted. (Financial Times)
Goldman Sachs, Barclays’ investment in Elwood Tech a megahit in fostering crypto adoption?
Goldman Sachs and Barclays participated in a $70 million funding round for Elwood Technologies, a UK-based cryptocurrency trading platform. The valuation of the six-year-old company, founded by Alan Howard, a British billionaire hedge fund manager, after the funding is over $500 million. Other investors include Dawn Capital and units of Commerzbank AG and Galaxy Digital Holdings, the crypto merchant bank headed by billionaire Michael Novogratz. The funding round marks the first time Elwood Technologies has sought outside finance. (Seeking Alpha)
Dimon’s $50 million bonus gets a thumbs-down from JPMorgan shareholders
Shareholders voted against a special payout to JPMorgan Chase CEO Jamie Dimon and other top executives, in a non-binding vote, with the advisory referendum receiving only 31% of shareholder support. This was in response to the company’s disconnect between executive pay and performance over the last nine years, in addition to Dimon receiving $52.6 million last year as a retention bonus to remain CEO for at least five more years. (Financial Times)
Marqeta stock rises after earnings – a big shot at growth
Marqeta, the global modern card issuing platform, shares rose 4% in after-hours trading last Wednesday, after the company topped expectations with its latest results and outlook by generating net revenue of $166 million in the first quarter that ended on March 31, 2022 – up 54% year-over-year, with a 53% growth in first-quarter total processing volume and a 50% increase in gross profit.
The same day, Citigroup announced a partnership with Marqeta to make corporate credit cards available in digital wallets, which led to shares of both companies rising. Citi will use Marqeta’s tokenization technology for companies to offer employees company cards in mobile wallets. (Seeking Alpha)
Marqeta adds Evolve Bank & Trust as a bank partner to beef up services
In an effort to expand its program management capabilities, card issuing platform Marqeta on Thursday has added financial services firm Evolve as its bank partner, offering services like open banking, personal and business banking, and SBA lending. Evolve plans on bolstering Marqeta’s program management capabilities, including BIN management, on-demand fulfillment, compliance reporting, and settlement services as a customer is guided through onboarding to launch a program in-market. Evolve is the fourth U.S. bank partner on the Marqeta platform. (Crowdfund Insider)
Mastercard wades into the biometrics checkout market
Mastercard is rolling out a Biometric Checkout Program that will make life easier for its customers and shoppers – as it tries to secure a slice of the $18 billion biometrics market. The program will allow people to pay with a smile. Cardholders won’t need to drop, grope, or mishandle their phone or their card. Instead, they will just look at the register, let it scan their face, and the payment is completed in real-time. Research shows that 74% of its customers are bullish on incorporating such biometric technology. (The Guardian)
Mastercard joins forces with Swedish fintech Dreams on green banking
Dreams, the financial wellbeing platform which offers engagement banking solutions, announced a partnership with Mastercard on Tuesday. Through the tie-up, the two firms aim to develop digital banking solutions that will help banks bolster their ESG credentials and encourage customers to adopt more sustainable consumption habits. (Finextra)
Q2 Holdings jumps after report of takeover interest
Q2 Holdings, a banking-software and banking-as-a-service provider, is weighing options including a sale, after receiving takeover interest. Q2 is devising a strategic plan in accordance with a financial advisor, without garnering much attention from potential private equity buyers. A final decision is yet to be made public by Q2 whether it opts for the merger or wants to remain independent. Q2 shares climbed 11% after being momentarily halted in New York trading Tuesday. Shares were down more than 55% last year. (Bloomberg)
Robinhood’s big Web3 push with the launch of the new DeFi wallet
Co-founder and CEO of Robinhood, Vlad Tenev, announced that the company will be launching a new product that would satisfy the “most advanced DeFi believers” – the non-custodial, Web3 wallet that will be a standalone app and will enable customers to have more control over their digital assets. The user will possess the keys to their own crypto assets. That’s unlike Coinbase and Binance, which put their companies in control of users' private keys and digital assets, making them centralized and disrupting user authorization. Additionally, it will incorporate the signature Robinhood configuration, which facilitates trading functions. (PYMNTS)
Shares of SoFi are set to rebound, says Piper Sandler
Sofi Technologies’ stock rose 2.4% in Monday’s session, closing at $6.91, after it was upgraded to overweight from neutral with a price target of $10.00 per share, down from $12.00 by Piper Sandler analyst Kevin Barker. Barker believes the company has the potential to substantially boost EBITDA in the second half of 2022 and into 2023 followed by 2024. The amalgamation of rapid growth in deposits, the expiration of the student-loan moratorium, and revenue growth in the financial services segment should feed into notable earnings momentum throughout 2023 and 2024, predicts Barker. (CNBC)
Square amplifies Afterpay integration to in-person points of sale
Square adds another feather to its cap with the e-commerce integration of Afterpay, expanding BNPL operations to its millions of in-person sellers in the US and Australia. Square and Afterpay have strategically enhanced offerings for sellers using any Square point of sale software – Square Point of Sale, Square for Retail, Square Appointments, or Square for Restaurants – to now offer Afterpay across online and in-person commerce, three months after acquiring Afterpay. (Business Wire)
US Bankcorp lays out a $100 billion Community Benefits Plan tied to the merger
U.S. Bancorp rolled out a $100 billion Community Benefits Plan that focuses on supporting equitable access to capital for low and moderate-income communities and communities of color. Aimed at winning community activists’ support, the program is designed in collaboration with the National Community Reinvestment Coalition and the California Reinvestment Coalition as part of U.S. Bank's planned acquisition of MUFG Union Bank from Mitsubishi UFJ Financial Group. (Seeking Alpha)
Tweets of the week
Source: Sahil Bloom
Source: Jay Yarow
Charts of the week
1. Marqeta earnings history and forecast
Source: Defense World
2. MoneyLion is targeting a 50/50 split between enterprise revenue and consumer products
Senior Square business lending exec, Ronak Daya quits, to join Coinbase as the Head of Financing Products (deBanked)
Citigroup names Tom Anderson as the new Chief Compliance Officer (WSJ)
Sol Gindi named the new head of Wells Fargo Advisors, Jim Hays to Retire (American Banker)
Coinbase has changed its tune on hiring amid the growing pains of the crypto market (TechCrunch)
Goldman CEO, Solomon foresees a “recession risk”, as financial conditions toughen after raising interest rates to combat inflation by Fed (Bloomberg)
Amex, Discover, and Charles Schwab pass with flying colors in the direct banks’ survey (American Banker)
Women in finance: BM Technologies' Luvleen Sidhu on reinventing banking (Forbes)
Women in banking: Goldman Sachs Group is losing its most powerful Black women (American Banker)
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