MONY Group plc (MONY) Earnings Call Transcript & Summary

Good morning, and welcome to MONY Group's 2025 Full Year Results Call. We are joined today by Peter Duffy, Chief Executive Officer; and Niall McBride, Chief Financial Officer. [Operator Instructions]. I would now like to hand the call over to Peter. Please go ahead.

Thank you, and good morning, everyone, and thank you for taking the time to joining us this morning. As the introducer said, I'm joined in the room by Niall McBride, but also by Jennifer Cooke, our Director of Investor Relations. Now hopefully, you've all had a chance to watch the results video that we released at 7:00 a.m. But before we open up for questions, let me just give a quick recap. 2025 was a year of real progress for the MONY Group. We delivered record revenue, record adjusted EBITDA. And importantly, we helped U.K. households save an estimate of GBP 2.8 billion. That's a great set of results achieved despite sector-specific headwinds, demonstrating the strength and the resilience of our model. Now we're comfortable with how the group is performing. Our strength has always been in the breadth of our markets and the power of our brands, some of the most trusted and recognizable in the U.K. But increasingly, it's also in the power of our data and tech platform, which is positioning us exceptionally well for the AI opportunities that are opening up. On top of this, with the macro environment now easing a little, it's giving us confidence that the momentum that we saw in H2 will continue into 2026. We continue to execute against our strategy to grow both sides of our marketplace. The SuperSaveClub has now surpassed 2.1 million members, and we see no sign of this slowing up. And then on the provider side, we boosted revenues by 13%. And it's the tech platform there really that's firing on all cylinders. I think the rebuild of our data and tech architecture, combined with the power of our brands, has really positioned us exceptionally well, as I said, not only for growth, but for -- to harness the opportunity of AI. We were thrilled last week to have the veritable firework of product launches. On Wednesday, we launched Price Optimiser, and that's a tool that helps customers save money on car insurance. On Thursday, we launched Savings by MoneySuperMarket, that enters us into a new category. And then very excitingly, on Friday, we launched our app in the ChatGPT App Store. They're all products that broaden our reach that improve our customer outcomes that open us up to meaningful new markets. And we've opened up new routes to market as well with this launch of the ChatGPT app. It's already starting with car insurance and broadband. We added van insurance on Friday. We're locked and loaded to go with home insurance, that will be going off for approval this week. The momentum is really behind us. And we're confident that this all means that we're going to be one of, if not, the leading AI-enabled comparison application on ChatGPT globally. In total, this means we're confident that we're going to be a structural winner more broadly with AI as it becomes more prominent. I think that's for 3 key reasons. We tried to draw this out in the presentation this morning. It's the power of the trusted brand and the rich data that they bring; the breadth of our product set and those deep provider relationships, which already secure best prices for customers; and it's our responsibility as a highly regulated trusted operator to meet the requirements of multiple regulators in the U.K. And our point here, and I'm sure this will come up in conversation this morning, is that AI is a facilitator, not a replicator. The technology can further enhance what we do for our customers, but in itself, it doesn't replicate the value that we provide. So in total, our investment in data and tech is paying off. This is really just the start. All of this, combined with the strong operational discipline, contributed to another highly cash-generative year. We returned GBP 96 million to shareholders. We announced a further GBP 25 million buyback this morning for 2026, that's all fully funded from expected excess free cash. So as we look forward, our outlook, I think, is compelling. We have significant headroom in our member propositions. We have a portfolio of brands in excellent health, and we have a strong pipeline of product innovation. Add to this, an increasingly efficient organization, and I think you have a highly effective and resilient business supported by an unlevered balance sheet and a clearer macro environment. We're entering 2026 with real momentum, well positioned to continue to leverage the opportunities presented to AI and to deliver profitable growth. But I leave it there, and let's open for questions.

[Operator Instructions]. And we'll now take our first question from Luke Holbrook of Morgan Stanley.

I just wondered if you could expand a bit more on this partnership that you have with ChatGPT. Like is the traffic that you'll be paying -- will you be paying for the traffic? How long does the partnership last? I assume this is potentially a multiyear agreement. And when we think about your traffic and how that evolves over time, can you just remind us where we are in terms of paid versus organic or direct traffic at the moment and how that could evolve over the next couple of years?

Yes, thanks for asking that. Look, I'll get Niall to talk about traffic mix. But if you allow me, perhaps I can give a more expansive answer on ChatGPT generally, and it will touch on your question specifically, but maybe on some broader areas, which I'm sure are going to come up in conversation. I just think it's kind of worth going back to first principles here. So MoneySuperMarket is a highly regulated business, as we make that point regularly. And we have to operate what are known as deterministic or rules-based systems to not only ensure that we're fully compliant with all that regulation, but we can prove that we are. We have to be transparent, explainable, repeatable, auditable, a whole list of requirements. Now LLMs in themselves are probabilistic models, so they don't implicitly do this. They're not deterministic. They're opaque, they're not auditable. So one of the reasons we're so excited about the ChatGPT launch is it brings these 2 worlds together essentially because we absolutely recognize that consumers will be going to LLM interfaces to ask and have answered all sorts of broad questions. But as soon as they get into something specific like tell me the best car insurance deal or the best credit card deal, that answer that comes back has to be regulated. PCWs in the U.K. aren't general search engines. We operate as regulated intermediaries. And anyone who presents personalized financial products to consumers then have their activities regulated under the Financial Services and Markets Act and that means you are regulated by the FCA, you are a regulated entity. And I won't start to list out what that means, but believe you me, it's quite a long list, we could be here to Friday, till Friday. So the excitement of bringing these 2 worlds together is that as the consumer goes into the sort of probabilistic world of ChatGPT to answer a range of things, when they want to do financial services stuff, they come to MoneySuperMarket. We answer that in a deterministic way, and we then, as a result, cover all that important regulation on behalf of that transaction. Two other points I'd sort of make on this as well. We talk about the breadth and range of products. Many of you will recognize that the insurance market, as an example, in the U.K. is really different to any other insurance market globally with the importance of price comparison websites already have in the market. We know that 90% of car insurance switches happen within a comparison environment, 70% of home insurance switches. So really, the aggregation that would happen in other markets has already been done here. This is very much about taking a service that exists on dot-com and on app, and we're now taking that into the ChatGPT environment. So not only are we sorting out all the regulatory side, but we're bringing that very full aggregation service to bear as well. And then finally, our brands. Our brands really are about trust. Technology doesn't solve the problem in itself. Consumers have to be convinced that these are trusted ways to begin to do things that they're getting the best deals, their data is going to be managed safely for them. And that's what MoneySuperMarket and MoneySavingExpert bring. So I think the combination of all those things makes this very exciting. Just to be clear, we've gone live with car insurance and broadband. As I say, we put van insurance live. We're locked and loaded on home insurance. We're looking to have all our main products live really by the end of this quarter. There is proper momentum behind all of this. So to your question then specifically about how the model works? If you look at what OpenAI are doing, similarly to all the other LLMs, they're selling enterprise platforms. And so we became an enterprise customer last year. They are opening app stores where brands like ourselves or Booking.com or Sky is going to go and bring their services into this world. And then I think what we're seeing in the states starting to be tried in the last couple of weeks is advertising within this environment, rather like Google have PPC, hopefully, it will be some much needed competition for Google in terms of this sort of traffic. And we can expect to see those traffic flows, I imagine, monetized over time. So to your question about how the partnership works, really, this isn't a monetizing thing for them yet. They are still really very nascent in terms of that journey. We have just built our app. We put it live in this environment. At some future point in time, I think they will look to find ways to begin to monetize that traffic, but that is not where we are at the moment. So a bit of a fuller answer than the question. Niall, do you want to just pick up on where we are on traffic mix today?

Yes. So we don't break down the actual sources of traffic, Luke. But I think if you work your way through the P&L, you can get a good sense. I mean, clearly, within cost of sales, you've got the Google cost, and it's still a significant part of our cost of sales, but it is not our only sort of PPC costs within there. We do also spend in Meta, in Microsoft and other environments as well. So a little bit to Peter's point, as these things develop, maybe there will be some competition in that for that spend in the future. And we also have significant traffic that comes from the money that we spend on brand and above-the-line advertising, which is in the OpEx line. We do still have a good level of traffic that comes from SEO, that comes from CRM and increasingly, of course, through the SuperSaveClub as well. And so there's plenty to play with. Clearly, we're always balancing that mix of at any given point in time.

And we'll now take our next question from Andrew Ross of Barclays.

I've got 3 questions, if that's okay, all about kind of gross margin and marketing costs. So the first one is to dive into the 21% increase you saw on a per unit basis in the PPC costs in '25. Can you just help us understand a bit more about what drove that between competition and I guess, changes that Google is making to their funnel and kind of risk that, that could deteriorate further in 2026, given everything that's going on with generative AI more broadly? That's the first question. The second one is, I guess, a conceptual one as to what you think might drive the puts and takes as to whether the MoneySuperMarket could kind of over- or under-index in an LLM environment compared to the status quo in Google? Like does you being first to make an app in ChatGPT put you an advantage? Do you have good technology that means you'll be a partner of choice or is it just going to be a question of, over time, who pays to get kind of visibility like it has been on Google? And then the third question is a bigger picture one on the drivers of gross margin in the group. So there's quite a lot going on here around like headwinds in traditional Google, tailwinds from SuperSaveClub, unknowns on shift to an LLM top of funnel. Like how do you think about the gross margin dynamics in the medium term for the business? Kind of what's in your control, what's not?

Thanks, Andrew. So I'll ask Niall to pick up on 1 and 3. Now I'll just kick off by 2 in terms of LLMs versus the status quo. I think the short answer, Andrew, is this is still really very early doors, and it's very, very hard to actually call how this is going to play out. Sorry, it's a bit of interference on the line, let me go again. So I think the very interesting thing about putting the product live on ChatGPT early is that we're going to see very early doors just how attractive this proposition is to customers versus what I would argue is probably a solved problem on dot-com and on apps already in terms of how price comparison begins to work. I talked about putting Price Optimiser live. Price Optimiser is an AI tool, which enables customers on average to save about GBP 20 we're seeing. It went live last Wednesday. Essentially, it checks all your answers. If you say 8,000 miles is your average for a year, it will check that back against your last MOT, for example, and say you only told them 6,000 or make suggestions in terms of the excess. You have a series of different things you could begin to do. And as I say, it saves an average of GBP 20. Just looking at the very early doors traffic numbers this morning. We have seen 100x the level of click-throughs coming through on Price Optimiser than we've seen on the new ChatGPT product this morning. And so I think the level of customer adoption of this is going to, to some degree, determine what the economics look like in terms of how OpenAI begins to charge for traffic. So I think it's probably inevitable that they will begin to charge for traffic as Google charge with PPC. How expensive that is, is probably a function, as the market matures, of competitiveness and actually the value of those consumers and the value of those versus other routes to market. So in a world where we're trying to build the SuperSaveClub and getting customers to come to us directly, all those strategies are equally important. But at the highest level, I think it can only be beneficial that Google get some competition given what we have seen over the last couple of years in terms of inflation. But maybe that's a good segue, Niall, into 1 and 3.

Yes. So Andrew, I think you had an interesting piece in there about control versus not control. I mean, I think there is a lot going on inside gross margin. Clearly, PPC is a big factor within it this year. If I just sort of draw you back to last year, you'll recall that we did a piece of analysis that said, if you look at the underlying business for the sort of 4 years before that, we've moved gross margin up by 4%. So when you excluded B2B and cashback, we actually have moved gross margin up despite there being PPC uplifts in those years. And that is down to the work that we did to replatformize the business, to make up bidding algorithmic. So there are always things that you can do to control, but you can also be very thoughtful about where you bid and what you bid for. So that's one of the things -- the market does move around, but it's not that you're without levers in that space. And we kind of call out every year, margin in this business is a function of mix. If we grow in B2B, then we'll have things that will be a drag on margin. If we do well in other areas, that could be an uplift in margin. And clearly, Club is one of the things that's helping in this year. Specifically for 2025, a good sort of 2/3 of that effect is related to what's happened in the PPC market. We've had quite a significant uplift. And if you think about the way that sort of the Google page is laid out now, you've got the non-monetized AI at the top, you've got SEO where we're seeing, we called out before, higher levels of volatility within results, so you can kind of be position one in the morning and 10 in the afternoon and every point in between. And then PPC as well, the way that that's now laid out is very different to how it was laid out before. So it's a sort of combination effect of the Google page looks very different, the way they structure looks very different. Whether that's now more settled or not is hard to tell, but it's also that it's funneling competition into PPC. So to Peter's point, a little bit, hope as LLMs come along and provide competition, that could be a good thing. It's hard to say how it will play out in the longer term. Clearly, these are today non-monetized sources of traffic, but there's no reason to think it wouldn't be monetized in time. The thing for us, I think, is we will focus, as we've always done as evidenced by that track record of the previous year on profitable growth. We love to grow profitably within our markets. And we will be where the audience is. So if the audience decide that sort of future in an AI-driven LLM is where they want to be, we'll be there. Equally, we'll be in other places that they are. So that's kind of the trade-off that we'll be playing with for the next few years.

And we will now take our next question from Ross Broadfoot of RBC Capital Markets.

Just a couple, please. The first on the SuperSaveClub figures. So you reported ARPU of GBP 35 versus, I think, GBP 27 H1. Cross-channel inquiries were lower 55%, falling to 45%, but LTV for all your free members of 2x. So just wondering if you could give any color on the moving parts of those, please? And the second question, just around prospects for an LLM app for MoneySavingExpert. Is there anything different about how a more conversational approach to that search could drive people back to MoneySuperMarket?

I'll quickly do the second one, and then Niall, if you can come on SuperSaveClub. So look, whilst we are breadcrumbing that there's lots more exciting stuff to do, naturally, Ross, you'll understand that we won't be declaring what's happening when. But please understand that we are rolling AI as right across this business. So we just are systemically working through it priority by priority, and we've got lots more exciting launches lined up. Niall, SuperSaveClub?

Yes. So just, Ross, on the ARPU, we've gone with a tighter definition of ARPU this time around. So there's a slight change. Previously, our ARPU definition linked to how we think about active members, which is someone who's done something in the last 12 months. New ARPU for SuperSaveClub only includes people who've done something in club. So any pre-join behavior is now excluded. So a tighter definition and the ARPU has still gone up in that period. So that -- we feel that's really strong. And that's sort of down to the maturing of the cohort. So we're also declaring today that CLTV of club members versus non-club members is twice that -- sorry, CLTV of club members is twice that of non-club members. And we -- again, part of aligning these definitions was so that we could do a CLTV number. What we're seeing in those cohorts is consistent behavior in terms of maturity. What you're seeing coming through in the numbers now in terms of ARPUs, in terms of CLTVs, that is the sort of the maturing base is starting to now do more with us more on a repeat basis.

And we'll now take our next question from William Larwood of Berenberg.

Yes. Firstly, just on SuperSaveClub. Given what you just disclosed in terms of lifetime customer value, sort of why it's sort of not accelerating the strategy a little bit more in terms of first purchase rewards? And then secondly, how much is there in terms of further OpEx savings from AI? Obviously, OpEx has come down. I think it was 9% in '24 and a further 4% today in FY '25. So do we think of further cost savings in '26 or will that be sort of reinvesting in new products such as savings and investments, et cetera?

Let me have a go, William, and then I'll pass over to Niall. So the thing about first purchase reward is it sort of -- it does what it says on the can. So as soon as the customer buys their first purchase, they can join a SuperSaveClub. So I think that to us does look like an accelerated consumer proposition, and I think that is doing a job for us that we're really pleased about. What I observe about the next phase of rollout of AI across the inside of the organization is that it's very thoughtful, by which I mean it's all about process redesign and how we look at our processes and which get automated and which and whether people get involved and continue to add the significant value that they do. So we see a big opportunity around uplift in terms of efficiency, and that has to be then traded off with cost effectiveness in terms of OpEx and the OpEx space. I think at the minimum, we're trying to keep things flat, but we will always look to try and utilize our people in the most efficient way. And I think there's still opportunity to do more with the same, and that's what our sort of underpinning philosophy is. Niall, what would you add to that?

Just to touch quickly on the piece about first purchase reward. I think the -- that is a very targeted marketing -- we see it as a very targeted investment in marketing for a particular cohort of engaged members. So as we talked about sort of during the last year, that is a trial, but it's a trial clearly that we think is going well because we're continuing to do it. Like any other marketing spend, we assess it on an ongoing basis. So if we thought it wasn't working or we had a better opportunity, then we'd look at that as well. But it's worth kind of keeping in mind that we will always look at bringing people in as quick as we can, but people only switch at a natural rate. So we think that we're at that sort of efficient frontier of where we can bring people in. And obviously, we're at 2.1 million members now, so that's going quite well. On the OpEx savings, I mean, I think Peter sort of described it really quite well in terms of the work that we're trying to do inside the business. There will be a little bit more in brand marketing this year in 2026, but in terms of the headcount piece, then I think Peter has described it quite well.

[Operator Instructions]. And we'll now move on to next question from Tim of Bank of America.

I've got 3 questions, please. The first is, I think the move into savings and investments looks super interesting. And I guess, in particular, because they're very large markets and obviously, the consumer dynamics there are ones of kind of probably more frequent engagement than perhaps some of the traditional services. So just interested in your ambition there and the kind of go-to-market plans? And then my second and third question is sort of just a little bit on some of the numbers that you disclosed in the pack. So around product engineering, clearly, that spend is down in 2025 quite considerably. But equally, I know you've talked a lot in the past about the replatforming and the kind of assurance that the level of spend is adequate. Clearly, there's plenty happening from what you've described, so I'm expecting you'll tell us that it is. And then finally, and it's been a bit of a nitpicky one, but on the marketing sort of breakdown, marketing spend breakdown that you provide, there's a sort of other category, but it has stepped up quite a bit during the course of the year. So I just wondered if you could give us the context as to what drove that from GBP 15 million to GBP 20 million, please?

Yes. Niall, you can definitely do 3, I'll do one and should we both have a go with 2. So look, I think moving into savings and investments is interesting, Tim. What we've seen with the SuperSaveClub is that when we take friction away from customers, we incentivize behavior and they start to buy more with us. And so at its very simplest level, it's about opening up more opportunities to buy more things. And so we're very excited this morning that you can open, as an example, the U.K.'s leading instant access savings account rate product, it's a MoneySuperMarket branded product, which is available on the platform as one of 60-plus different instant access term savings products at the moment. And of course, you can move up money seamlessly in that way. So that, if you download the app, is a very seamless experience now. It's really kind of slick. And we just think that is a great opportunity for customers to begin to just do more with us. And essentially, as you say, do more everyday things with us. And we do breadcrumbed investments as the next step on from savings, it's a logical thing to begin to see next. We have made the point on our tech and data platform a number of times in previous sessions that the work is broadly done. We moved everything into Google Cloud platform from a data perspective, latest version, AWS, obviously, there's still constant activity happening kind of around that space. But in terms of CapEx, the heavy lifting was a number of years ago. And so you'll kind of recognize that despite the 3 kind of launch went last week, most of the work for that was actually done last year. And last year, I would observe is, I think, our lowest CapEx year in 5 years. So I hope that would give you confidence that we have actually run those hard yards, and we really see this next phase as an opportunity to take advantage of all the investment that we've kind of made historically. And it's really about opportunity cost before we get people to focus on what they do build and they don't build with this amazing new AI technology. Niall, anything to add to that and then picking up on the marketing point?

No, I think it's well covered. I think on the marketing point, it's not nitpicky at all, Tim, it's GBP 5 million. And basically, most of that is related to the growth in B2B. As you know, on B2B, we share the CPA with the partner and a good chunk of that flows through that line.

And we'll now take our next question from Jessica Pok of Peel Hunt.

I've just got 2 questions, please. Just the first one is just on home services. I mean, what kind of color are you seeing on the sentiment of the energy providers on deals? There's obviously still a regulation in place, but can we expect more collective switches this year? And then just a second one on cashback. Can you give a bit more color on any impacts you're seeing with traffic referral on Quidco with all the AI developments with the LLMs? And how much of the Quidco traffic -- sorry, how much of Quidco still relies on referral traffic?

Yes. I mean I think on cashbacks, I mean, Quidco is a member-based business, so it's all about actually members coming on to the site to look for the days that they want to do, so you've sort of joined already by the time that you really start doing things, Jessica. So there's very, very little referral going on really inside Quidco. In terms of home services. Look, I think 2024 to 2025, what's really happened because what we've seen is the providers coming into the market to look for growth in their books and to look for traffic. 2024, there was very little revenue there. In 2025, we saw a big uplift. And a lot of that uplift that you see in home services is related to energy. In the first half, we had a couple of very, very good exclusives. In the second half, we ran the first collective switch since -- well, since the energy crisis. So those are all good things, but they are -- the way that the providers are working within the market is that they're looking at those moments, those price cap moments as being opportunities to grow their businesses. And clearly, we are the best for them to come and do that. So we work with them to make that happen at that moment in time. I think we're quite optimistic that the market has now taken a shape around those price cap moments and that seems more reliable than it used to, but we're kind of realistic. You kind of called it out there, there is still quite a layer -- double layer of regulation in this market. You've got the ban on acquisition only tariff and you've got the price cap mechanism itself. So the interaction of that and the wholesale price will remain important. But I think we have seen in 2025 that provider appetite to grow their books.

[Operator Instructions]. That was our last question, and we do not have any webcast questions. I will now hand it back to Peter for closing remarks. Thank you.

Thank you. And I'll just wrap up briefly by recapping because we are really looking forward to seeing what is a compelling outlook for growth. We've got significant headroom in our member-based propositions, that's going to be driven by increasing loyalty and customer lifetime value, Niall talked about that. I hope you're recognizing our very innovative product development pipeline, which is going to improve the customer experience, it's going to boost conversion. It's going to tap into new markets, but it's also going to be a new route to market in the form of ChatGPT. And I hope you've had a tone of voice around more confidence in our end markets. So look, we remain confident that the strength of our competitive moat, which is deepened by our breadth of our brands and our responsibilities means that we are going to be a structural winner in this world of AI. And I hope you recognize that we are absolutely embracing all the opportunities today that, that is offering up to help drive sustainable growth in the years to come. So thank you very much for joining us this morning. I know we're meeting a number of you over the course of the next week or 2. We'll look forward to catching up in person. Thank you, everybody.