Payments volume increased 36% year-over-year
to $9.9 billion
Q4 Revenue of $17.2 million, up 6%
sequentially
Q4 Adjusted EBITDA1 of $2.7 million (16%
margin), up 1006% from the prior year; FY 2023 Adjusted EBITDA
reaches $7.7 million
Ended year with $55.6 million of cash and
total investments2, including $27.7 million crypto-related
investments
Mogo reports in Canadian dollars and in accordance with IFRS
Mogo Inc. (NASDAQ:MOGO) (TSX:MOGO) (“Mogo” or the “Company”), a
digital wealth and payments business, today announced its financial
and operational results for the fourth quarter and fiscal year
ended December 31, 2023.
“Our focus in 2023 was to build a more profitable and efficient
company, while at the same time increasing product velocity and
driving user experience improvements for our digital wealth
platform,” said David Feller, Mogo’s Founder and CEO. “We made
excellent progress on both fronts, meaningfully improving both the
value of our wealth products and our profitability. Following the
recent relaunch of both Moka and Mogo, we are in a great position
to accelerate our marketing efforts in 2024 to build our user base
and advance our mission to help the next generation of Canadians
get on a path to achieving financial freedom. The wealth industry
in Canada needs to change – people are overpaying and
underperforming, and the statistics show that most are not on a
path to build the wealth they need to retire. We believe we have a
disruptive value proposition and products that can change this
outcome, helping the next generation achieve financial
freedom.”
Key Financial Highlights for Q4 & Full-Year 2023
- Q4 revenue of $17.2 million, up slightly over the prior year
and by 6% sequentially, reflecting increased growth in the
company’s core products.
- Q4 2023 gross profit of $11.5 million (67% margin), versus
$11.7 million (68% margin) in Q4 2022. Full-year gross profit was
$46.7 million, up slightly versus the prior year.
- Total operating expenses for Q4 2023 decreased by 25% to $11.7
million, compared to $15.5 million in Q4 2022, reflecting the
Company’s continued efficiency efforts which also resulted in a
significant improvement in revenue per employee of 24% during the
same period. Since Q1 2022, when the Company implemented its
efficiency initiatives, revenue per employee has increased by
83%.
- Cash flows from operating activities before investment in gross
loans receivable1 was positive for the fifth consecutive quarter,
reaching $4.7 million in Q4 2023, a 79% increase over Q3 2023 and
approximately 923% over Q4 2022. For the full year, cash flows from
operating activities before investment in gross loans receivable
reached $9.5 million, a $20.1 million improvement compared to
2022.
- Adjusted EBITDA1 increased to $2.7 million in Q4 2023 (16.0%
margin), up from $2.1 million (12.8% margin) in Q3 2023 and $0.2
million (1.4% margin) in Q4 2022. Full-year Adjusted EBITDA
increased to $7.7 million, the high end of the Company’s initial
target of $6.0 to $8.0 million and a $19.9 million improvement
compared to the adjusted EBITDA loss of $12.2 million in 2022.
- Net income (loss) improved to income of $8.5 million in Q4
2023, compared with net loss of $74.9 million in Q4 2022.
- Adjusted net loss1 decreased to $2.6 million in Q4 2023 from
adjusted net loss of $5.4 million in Q4 2022.
- Ended 2023 with cash and total investments of $55.6 million, up
from $43.7 million at the end of Q3 2023. This included combined
cash and restricted cash of $17.9 million and investment portfolio
of $37.8 million.
- In 2023, the Company repurchased and cancelled 474,353 common
shares under its share buyback program on NASDAQ and its normal
course issuer bid on the Toronto Stock Exchange at an average price
of $2.36 per share. Including the 600,000 common shares repurchased
in 2022 under the NASDAQ buyback program, the Company has
repurchased 1,074,353 common shares to date, representing 4.4% of
the Company’s current outstanding common shares. The Company
currently has 24.5 million common shares issued and
outstanding.
- Subsequent to year end, Mogo announced that its Board of
Directors has approved a change to its treasury management strategy
to include Bitcoin and Bitcoin ETFs and authorized an initial
investment of up to $5.0 million.
“Our fourth-quarter results clearly demonstrate our success in
returning the business to meaningful profitability during 2023
while at the same time resuming top-line growth,” said Greg Feller,
President & CFO. “Revenue increased sequentially for the third
quarter in a row and, importantly, increased year - over - year for
the first time in 2023. At the same time, our Q4 Adjusted EBITDA
reached $2.7 million – or 16% margin – bringing us to $7.7 million
in Adjusted EBITDA for the year compared to a loss of $12.2 million
in 2022. In 2024, we plan to increase our investments to accelerate
top-line growth of our Subscription & Services revenue
including our newly launched wealth products, along with continued
growth of our Carta payments platform. We will also continue to
focus on increasing our combined Subscription & Services
revenue growth and Adjusted EBITDA margin toward our target Rule of
40.”
Business & Operations Highlights
- Mogo's digital payment solutions business, Carta Worldwide,
processed over $9.9 billion of payment volume in 2023, an increase
of 36% compared to 2022.
- Assets under management in the Company’s Wealth businesses
increased 23% year-over-year to $351.3 million.
- Mogo members increased to 2.1 million at year end, up 6% from
the prior year.
- In July 2023, Mogo announced that Coinsquare Ltd. completed a
business combination with WonderFi and CoinSmart Financial Inc.
This transaction positioned the resulting entity, WonderFi
(TSX:WNDR), as the only fully regulated crypto exchange in Canada.
As at December 31, 2023, Mogo was the largest shareholder of
WonderFi holding ~ 87 million shares (a ~13% ownership interest),
valued at $25.7 million.
- Mogo continued to focus on increasing the value of its digital
wealth platform. In March 2024, the Company announced the launch of
Moka.ai, the next generation of its wealth-building app with
significant updates and enhancements designed to help the next
generation of Canadians get on a real path to becoming millionaires
and achieving financial freedom.
- Mogo continued to build a highly efficient and scalable
technology platform and operation. Mogo entered a multi-year
agreement to transition to Oracle Cloud Infrastructure 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.
This aligns with Mogo’s objective to deploy new Artificial
Intelligence (AI) applications in wealth.
Financial Outlook
In 2023, Mogo focused on accelerating its path to profitability
by placing an emphasis on cost efficiency and building financial
resiliency in light of challenging financial market conditions. As
a result of these initiatives, 2023 total operating expenses
decreased by $29.3 million, or 37%, compared to 2022, and the
Company reported a significant year-over-year increase in Adjusted
EBITDA, which increased to $7.7 million in 2023, a $19.9 million
year-over-year improvement from an Adjusted EBITDA loss of $12.2
million in 2022.
For fiscal 2024, Mogo expects to shift the balance toward
accelerating revenue growth while at the same time continuing to
generate positive Adjusted EBITDA3. The Company will increase
investments in marketing to drive acceleration in Subscription
& Services revenue growth from its Wealth and Payments
businesses where it sees significant opportunity for expansion.
Specifically, for 2024 Mogo expects accelerating Subscription
& Services revenue growth during the year with an overall
Subscription & Services revenue growth rate in the mid-teens
for the full year.
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
December 31, 2023.
2 Includes combined cash and restricted
cash of $17.9 million and investment portfolio of $37.8
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 Q4 & FY2023
financial results at 2:00 p.m. ET on March 20, 2024. 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: 72419362.
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 December
31, 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
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Net income (loss) before tax
$
8,432
$
(75,030)
$
(18,287)
$
(166,014)
Depreciation and amortization
2,385
3,166
9,067
12,636
Stock-based compensation
580
835
2,478
8,712
Credit facility interest expense
1,595
1,363
6,064
4,640
Debenture and other financing expense
1,141
779
3,519
3,225
Accretion related to debentures
222
315
958
1,249
Share of loss in investment accounted for
using the equity method
—
31,142
8,267
78,832
Revaluation (gain) loss
(13,600)
(2,020)
(9,628)
2,375
Impairment of goodwill
—
31,758
—
31,758
Other non-operating expense
1,988
7,940
5,231
10,360
Adjusted EBITDA
2,743
248
7,669
(12,227)
Adjusted Net Loss
($000s)
Three months ended
Year ended
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Net income (loss) before tax
$
8,432
$
(75,030)
$
(18,287)
$
(166,014)
Stock-based compensation
580
835
2,478
8,712
Share of loss in investment accounted for
using the equity method
—
31,142
8,267
78,832
Revaluation (gain) loss
(13,600)
(2,020)
(9,628)
2,375
Impairment of goodwill
—
31,758
—
31,758
Other non-operating expense
1,988
7,940
5,231
10,360
Adjusted net loss
(2,600)
(5,375)
(11,939)
(33,977)
Cash Provided by (used in) Operations before Investment in
Gross Loans Receivable
($000s)
Three months ended
Year ended
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Net cash used in operating activities
$
(2,199
)
$
(1,356
)
$
(9,168
)
$
(27,009
)
Net issuance of loans receivable
(6,875
)
(1,813
)
(18,655
)
(16,392
)
Cash provided by (used in) operations
before investment in gross loans receivable
4,676
457
9,487
(10,617
)
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 treasury management strategy and the Company’s financial
outlook for 2024. 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 Inc. (NASDAQ:MOGO; TSX:MOGO) is a financial technology
company headquartered in Vancouver, Canada. With more than 2
million members, $9.9B in annual payments volume and a ~13% equity
stake in Canada’s leading Crypto Exchange WonderFi (TSX:WNDR), Mogo
offers simple digital solutions to help its members dramatically
improve their path to wealth-creation and financial freedom.
Mogotrade offers commission-free stock trading that helps users
thoughtfully invest based on a Warren Buffett approach to long-term
investing – and make a positive impact with every investment. Moka
offers Canadians a real alternative to mutual funds that overcharge
and underperform with a passive investing solution based on a
S&P 500 strategy at a fraction of the cost. Through its wholly
owned digital payments subsidiary, Carta Worldwide, Mogo also
offers a low-cost payments platform that powers next-generation
card programs for companies across Europe and Canada. The Company,
which was founded in 2003, has approximately 200 employees across
its offices in Vancouver, Toronto, London & Casablanca.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240320948741/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
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