Mogo reaffirms its Financial Targets for FY
2023
Company has repurchased a total of 587,789
shares over the past 12 months (~2% of current shares
outstanding)
Mogo Inc. (NASDAQ:MOGO) (TSX:MOGO) (“Mogo” or the “Company”),
one of Canada’s leading financial technology companies, today
commented that it is not aware of any material events impacting its
business or operations that would cause the recent share price
volatility.
“While we typically do not comment on our stock price – and
while we appreciate there has been significant instability in
equity markets – we are disappointed with the decline in stock
price Mogo has experienced in recent weeks, which we believe is
disconnected from our business fundamentals,” said Greg Feller,
President & CFO. “With a solid balance sheet, five quarters of
sequential increases in Adjusted EBITDA, improving cash flow and a
seasoned management team, we are well positioned to withstand
periods of market volatility. In addition, we believe the
investments we have been making in our core wealth, payments and
lending businesses put us on track to achieve our previously stated
target of a combined Adjusted EBITDA margin and revenue growth rate
of at least 40% in the second half of 2024.”
Management reiterated the key financial and operational
highlights from its Q2 2023 financial results. The Company will
report its Q3 2023 financial results on November 9, 2023.
Financial & Operating Highlights
- Q2 revenue of $16.0 million, up from $15.9 million in Q1 2023
and down 7% over the prior year, mainly reflecting our decision to
narrow our strategic focus and exit certain sub-scale and
unprofitable products.
- Q2 gross profit increased to $11.9 million (75% margin)
compared to $11.3 million (66% margin) in Q2 2022.
- During 2023, Mogo continued to focus on cost efficiency and
improving its cash flow. As a result of these initiatives, total
operating expenses for Q2 2023 decreased by $8.1 million, or 38%,
compared to Q2 2022. These efficiency initiatives resulted in an
improvement in cash flows from operations (before investment in
loan portfolio)1 from negative $2.5 million in Q2 2022 to positive
$2.1 million in Q2 2023.
- Mogo reported a material improvement in Adjusted EBITDA1, which
reached $1.8 million in Q2 2023, compared with an Adjusted EBITDA
loss of ($4.1) million in Q2 2022.
- Net loss decreased to ($10.0) million in Q2 2023, compared with
net loss of ($51.9) million in Q2 2022.
- Adjusted net loss1 improved to ($2.9) million in Q2 2023 from
($9.5) million in Q2 2022.
- Ended Q2 with cash and total investments of $52.3 million. This
included combined cash and restricted cash of $22.1 million,
investment portfolio of $13.5 million, and Mogo’s 87 million common
shares (~13% ownership interest) in WonderFi Technologies Inc.
(“WonderFi") (TSX: WNDR).
- Mogo's digital payment solutions business, Carta Worldwide,
processed over $2.5 billion of payments volume in Q2 2023, an
increase of 51% compared to Q2 2022.
- Mogo is continuing to repurchase common shares under its common
share buyback program on NASDAQ and its normal course issuer bid on
the Toronto Stock Exchange. For the fiscal year to date, the
Company has repurchased 254,456 common shares under both buyback
programs, and the Company has repurchased a total of 587,789 shares
over the past 12 months (~2% of current shares outstanding). Mogo
currently has 24.7 million common shares issued and
outstanding.
With its Q2 2023 financial results, Mogo also reiterated its
financial targets for Fiscal 2023. Mogo is focused on
achieving:
- Full-year Adjusted EBITDA of $7.0 million to $9.0 million;
and
- Exiting 2023 with an annual Adjusted EBITDA run rate of $10.0
million to $14.0 million (based on a Q4 2023 Adjusted EBITDA target
of $2.5 million to $3.5 million).
For further details on the above financial figures, see the
Company’s interim consolidated financial statements for the three
and six months ended June 30, 2023 and accompanying MD&A, both
available at www.sedarplus.ca and www.sec.gov.
1 Non-IFRS measure. For more information regarding our use of
these non-IFRS measures, see “Non-IFRS Financial Measures” in the
Company’s MD&A for the period ended June 30, 2023. The
following tables present a reconciliation of each non-IFRS
financial measure to the most comparable IFRS financial
measure.
Adjusted EBITDA
($000s)
Three months ended
Six months ended
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Net loss before tax
$
(10,038
)
$
(51,955
)
$
(17,090
)
$
(70,900
)
Depreciation and amortization
2,204
3,146
4,577
6,326
Stock-based compensation
801
2,574
1,094
6,185
Credit facility interest expense
1,493
1,039
2,948
1,972
Debenture and other financing expense
831
846
1,609
1,657
Accretion related to debentures
234
311
507
620
Share of (gain) loss in investment
accounted for using the equity method
(207
)
8,766
2,972
14,329
Revaluation (gain) loss
(255
)
3,397
(1,508
)
2,249
Impairment of investment accounted for
using the equity method
5,295
26,749
5,295
26,749
Other non-operating expense
1,486
993
2,457
1,137
Adjusted EBITDA
1,844
(4,134
)
2,861
(9,676
)
Adjusted Net Loss
($000s)
Three months ended
Six months ended
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Net loss before tax
$
(10,038
)
$
(51,955
)
$
(17,090
)
$
(70,900
)
Stock-based compensation
801
2,574
1,094
6,185
Share of (gain) loss in investment
accounted for using the equity method
(207
)
8,766
2,972
14,329
Revaluation (gain) loss
(255
)
3,397
(1,508
)
2,249
Impairment of investment accounted for
using the equity method
5,295
26,749
5,295
26,749
Other non-operating expense
1,486
993
2,457
1,137
Adjusted net loss
(2,918
)
(9,476
)
(6,780
)
(20,251
)
Cash provided by (used in) operating activities before
investment in gross loans receivable
($000s)
Three months ended
Six months ended
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Net cash used in operating activities
$
(1,813
)
$
(8,726
)
$
(2,812
)
$
(20,044
)
Net issuance of loans receivable
(3,939
)
(6,250
)
(5,007
)
(10,431
)
Cash provided by (used in) operations
before investment in gross loans receivable
2,126
(2,476
)
2,195
(9,613
)
Forward-Looking Statements This news release may contain
“forward-looking statements” within the meaning of applicable
securities legislation, including statements regarding Mogo’s path
to profitability, the Company’s ability to make investments in
long-term growth products, the Company’s plan for accelerating
revenue growth in 2024, the Company’s financial outlook for 2023,
including Adjusted EBITDA and statements regarding the
Consolidation, including its effective date and the date of trading
of post-Consolidation shares. Forward-looking statements are
typically identified by words such as "may", "will", "could",
"would", "anticipate", "believe", "expect", "intend", "potential",
"estimate", "budget", "scheduled", "plans", "planned", "forecasts",
"goals" and similar expressions. Forward-looking statements are
necessarily based upon a number of estimates and assumptions that,
while considered reasonable by management at the time of
preparation, are inherently subject to significant business,
economic and competitive uncertainties and contingencies, and may
prove to be incorrect. Forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause
actual financial results, performance or achievements to be
materially different from the estimated future results, performance
or achievements expressed or implied by those forward-looking
statements and the forward-looking statements are not guarantees of
future performance. Mogo's growth, its ability to expand into new
products and markets and its expectations for its future financial
performance are subject to a number of conditions, many of which
are outside of Mogo's control, including the receipt of any
required regulatory approval. For a description of the risks
associated with Mogo's business please refer to the “Risk Factors”
section of Mogo’s current annual information form, which is
available at www.sedarplus.com and www.sec.gov. Except as required
by law, Mogo disclaims any obligation to update or revise any
forward-looking statements, whether as a result of new information,
events or otherwise.
About Mogo Mogo, one of Canada’s leading digital finance
companies, is empowering its members with simple digital solutions
to help them build wealth and achieve financial freedom. Mogo’s
trade app, MogoTrade, offers commission-free stock trading that
helps users make a positive impact with every investment and
together with Moka, Mogo’s wholly-owned subsidiary bringing
automated, fully-managed flat-fee investing to Canadians, forms the
heart of Mogo’s digital wealth platform. Mogo also offers digital
loans and mortgages. Through Mogo’s wholly-owned subsidiary, Carta
Worldwide, we also offer a digital payments platform that powers
the next-generation card programs from innovative fintech companies
in Europe and Canada. To learn more, please visit mogo.ca or
download the mobile app (iOS or Android).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231030420713/en/
For further information: Craig Armitage Investor
Relations investors@mogo.ca (416) 347-8954 US Investor Relations
Contact Lytham Partners, LLC Ben Shamsian New York | Phoenix
shamsian@lythampartners.com (646) 829-9701
Mogo (NASDAQ:MOGO)
Historical Stock Chart
From Apr 2024 to May 2024
Mogo (NASDAQ:MOGO)
Historical Stock Chart
From May 2023 to May 2024