Payment volume up 30% year-over-year to $2.4
billion
Revenue of $16.2 million, up sequentially as
top-line growth resumes
Adjusted EBITDA1 of $2.1 million, a $4.9
million increase from Q3 2022; 6th quarter in a row of increasing
Adjusted EBITDA
Cash and total investments of $43.7 million
at quarter end2
Mogo reports in Canadian dollars and in
accordance with IFRS
Mogo Inc. (NASDAQ:MOGO) (TSX:MOGO) (“Mogo” or the “Company”),
one of Canada’s leading financial technology companies, today
announced its financial and operational results for the third
quarter ended September 30, 2023.
“Our third-quarter results showcased the continued progress
we’re making in building a highly efficient and more profitable
operating platform at Mogo,” said David Feller, Mogo’s Founder and
CEO. “This work is allowing us to meaningfully enhance the value of
our products and accelerate our mission. We’re particularly excited
by the progress we’re making with our wealth platform. Millions of
Canadians – and trillions of dollars – are stuck in underperforming
products with high fees, and platforms that are more focused on
driving revenue instead of helping Canadians improve their returns.
This is one of the main reasons we have a retirement crisis, and
it’s a big problem we’re working hard to solve. Our unique approach
is helping Canadians get on a much better path to financial
freedom, while also having a positive impact. We’re still very
early days in our journey, but excited to see the impact we are
having already. We are prudently investing to capture the huge
opportunities we see across our wealth platform.”
Key Financial Highlights for Q3 2023
- Q3 revenue of $16.2 million, up from $16.0 million in Q2 2023.
Revenue decreased 6% over the prior year, reflecting the Company’s
decision to narrow its strategic focus and exit certain sub-scale
and unprofitable products.
- Q3 gross profit increased to $11.4 million (70% margin)
compared to $10.8 million (63% margin) in Q3 2022.
- Total operating expenses for Q3 2023 decreased by $6.2 million,
or 34%, compared to Q3 2022, as the Company continued to focus on
cost efficiency and improving its cash flow.
- Adjusted EBITDA1 reached $2.1 million in Q3 2023 (12.8%
margin), up from an Adjusted EBITDA loss of ($2.8) million in Q3
2022.
- Cash flows from operations (before investment in loan
portfolio)1 improved for the sixth consecutive quarter, from ($1.5)
million in Q3 2022 to $2.6 million in Q3 2023.
- Adjusted net loss1 improved to ($2.6) million in Q3 2023 from
($8.4) million in Q3 2022.
- Net loss decreased to ($9.5) million in Q3 2023, compared with
net loss of ($20.0) million in Q3 2022.
- Ended Q3 with cash and total investments of $43.7 million. This
included combined cash and restricted cash of $19.3 million and
investment portfolio of $24.5 million.
- Mogo’s assets also include 87 million common shares
(approximately 13% of the shares outstanding) of WonderFi
Technologies Inc. (TSX: WNDR), one of the largest regulated crypto
investing ecosystems in Canada.
- During Q3 2023, Mogo repurchased 134,502 of its common shares
for cancellation under the NASDAQ share repurchase program and its
TSX normal course issuer bid at an average price of CAD $2.45 per
share. For the fiscal year-to-date, the Company has repurchased
254,456 shares under both buyback programs.
“We’re pleased with our financial performance for the third
quarter, which demonstrates the core profitability of our business
and highlights the strong execution from our team over the past
year,” said Greg Feller, President & CFO. “Revenue increased
sequentially for the second quarter in a row and Adjusted EBITDA
grew for the sixth quarter in a row, increasing nearly $5.0 million
over the same period last year. These results position us well to
achieve our full-year objectives and, as we look out to next year,
to deliver an attractive combination of both top-line growth and
profitability, building toward our target of a combined EBITDA
margin and revenue growth rate of at least 40% in the second half
of 2024.”
Business & Operations Highlights
- In July 2023, Mogo announced that Coinsquare, in which Mogo had
a 34% ownership stake, completed a business combination with
WonderFi and CoinSmart Financial Inc. This transaction positioned
the resulting entity, WonderFi, and its registered operating
subsidiaries, as one of the largest regulated crypto investing
ecosystems in Canada. Mogo owns approximately 13% of WonderFi
following the business combination.
- Mogo's digital payment solutions business, Carta Worldwide,
processed over $2.4 billion of payment volume in Q3 2023, an
increase of 30% compared to Q3 2022.
- Assets under management in the Company’s Wealth businesses
increased 18% year-over-year to $331.0 million.
- Mogo continued to focus on increasing the value of its digital
Wealth platform, with multiple improvements that make it easier for
users to chart the right path to long-term wealth building, by
avoiding speculative trading and high-fee mutual funds that
typically underperform the market.
- Mogo continued to build a highly efficient and scalable
technology platform and operation while at the same time reducing
costs. Mogo entered a multi-year agreement to transition to Oracle
Cloud Infrastructure ("OCI") to support the long-term growth of the
Company’s digital wealth platform.
- Mogo completed a strategic agreement to transition to Snowflake
as the sole data warehouse for its wealth and lending
platforms.
- Mogo restructured its product engineering teams to better focus
on velocity and driving user experience improvements.
- In October, Carta announced it selected OCI to accelerate
innovation and support future growth.
Financial Outlook
In recent quarters, Mogo has focused on accelerating its path to
profitability by placing an emphasis on cost efficiency. As a
result of these initiatives, total operating expenses decreased by
$6.2 million, or 34%, in Q3 2023 compared to Q3 2022.
For fiscal 2023, the Company reiterates its expectation of:
- Full-year Adjusted EBITDA3 of $7.0 million to $9.0
million;
- Exiting 2023 with an annual Adjusted EBITDA3 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).
1 Non-IFRS measure. For more information
regarding our use of these non-IFRS measures and, where applicable,
a reconciliation to the most comparable IFRS measure, see “Non-IFRS
Financial Measures” in the Company’s MD&A for the period ended
September 30, 2023.
2 Includes combined cash and restricted
cash of $19.3 million and investment portfolio of $24.5
million.
3 Adjusted EBITDA is a non-IFRS measure.
Management has not reconciled this forward-looking non-IFRS measure
to its most directly comparable IFRS measure, net loss before tax.
This is because the company cannot predict with reasonable
certainty and without unreasonable efforts the ultimate outcome of
certain IFRS components of such reconciliations due to
market-related assumptions that are not within our control as well
as certain legal or advisory costs, tax costs or other costs that
may arise. For these reasons, management is unable to assess the
probable significance of the unavailable information, which could
materially impact the amount of the future directly comparable IFRS
measures.
Conference Call & Webcast
Mogo will host a conference call to discuss its Q3 2023
financial results at 3:00 p.m. EDT on November 9, 2023. The call
will be hosted by David Feller, Founder and CEO, and Greg Feller,
President and CFO. To participate in the call, dial (416) 764-8658
or (888) 886-7786 (International) using conference ID: 28220426.
The webcast can be accessed at http://investors.mogo.ca. Listeners
should access the webcast or call 10-15 minutes before the start
time to ensure they are connected.
Non-IFRS Financial Measures
This press release makes reference to certain non‑IFRS financial
measures. These measures are not recognized measures under IFRS, do
not have a standardized meaning prescribed by IFRS and are
therefore unlikely to be comparable to similar measures presented
by other companies. These measures are provided as additional
information to complement the IFRS financial measures contained
herein by providing further metrics to understand the Company’s
results of operations from management’s perspective. Accordingly,
they should not be considered in isolation nor as a substitute for
analysis of our financial information reported under IFRS. We use
non‑IFRS financial measures, including Adjusted EBITDA, Adjusted
net loss and Cash provided by (used in) operating activities before
investment in gross loans receivable, to provide investors with
supplemental measures of our operating performance and thus
highlight trends in our core business that may not otherwise be
apparent when relying solely on IFRS financial measures. Our
management also uses non‑IFRS financial measures in order to
facilitate operating performance comparisons from period to period,
prepare annual operating budgets and assess our ability to meet our
capital expenditure and working capital requirements. For more
information, please see “Non-IFRS Financial Measures” in our
Management’s Discussion and Analysis for the period ended September
30, 2023, which is available at www.sedarplus.com and at
www.sec.gov.
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
Nine months ended
September 30,
September 30,
September 30,
September 30,
2023
2022
2023
2022
Net loss before tax
$
(9,627
)
$
(20,086
)
$
(26,717
)
$
(90,986
)
Depreciation and amortization
2,105
3,144
6,682
9,470
Stock-based compensation
804
1,691
1,898
7,877
Credit facility interest expense
1,521
1,305
4,469
3,277
Debenture and other financing expense
768
789
2,377
2,446
Accretion related to debentures
228
313
735
934
Share of loss in investment accounted for
using the equity method
—
6,612
2,972
20,941
Revaluation loss
5,480
2,146
3,972
4,395
Impairment of investment accounted for
using the equity method
—
—
5,295
26,749
Other non-operating expense
787
1,287
3,245
2,421
Adjusted EBITDA
2,066
(2,799
)
4,928
(12,476
)
Adjusted Net Loss
($000s)
Three months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2023
2022
2023
2022
Net loss before tax
$
(9,627
)
$
(20,086
)
$
(26,717
)
$
(90,986
)
Stock-based compensation
804
1,691
1,898
7,877
Share of loss in investment accounted for
using the equity method
—
6,612
2,972
20,941
Revaluation loss
5,480
2,146
3,972
4,395
Impairment of investment accounted for
using the equity method
—
—
5,295
26,749
Other non-operating expense
787
1,287
3,245
2,421
Adjusted net loss
(2,556
)
(8,350
)
(9,335
)
(28,603
)
Cash provided by (used in) operating activities before
investment in gross loans receivable
($000s)
Three months ended
Nine months ended
September 30,
September 30,
September 30,
September 30,
2023
2022
2023
2022
Net cash used in operating activities
$
(4,154
)
$
(5,616
)
$
(6,967
)
$
(25,657
)
Net issuance of loans receivable
(6,773
)
(4,148
)
(11,780
)
(14,579
)
Cash provided by (used in) operations
before investment in gross loans receivable
2,619
(1,468
)
4,813
(11,078
)
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, and the
Company’s financial outlook for 2023. 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/20231109932537/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 646-829-9701 shamsian@lythampartners.com
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