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Mogo Finance Technology Inc
Symbol C : MOGO
Shares Issued 23,164,649
Close 2019-03-12 C$ 3.41
Recent Sedar Documents

Mogo loses $22-million in 2018

2019-03-12 17:32 ET - News Release

Mr. David Feller reports

MOGO ANNOUNCES FOURTH QUARTER & FULL-YEAR 2018 FINANCIAL RESULTS

Mogo Finance Technology Inc. has released its financial and operational results for the fourth quarter and full year ended Dec. 31, 2018.

"In 2018, we made significant progress enhancing our platform and expanding our ecosystem of products to provide Canadians with a range of financial solutions that help them get in control of their financial health, all in one app," said David Feller, Mogo's founder and chief executive officer. "Our record revenue performance, particularly the doubling of our subscription and services revenue, clearly demonstrates the power of our platform and revenue model. The easier we make it for our members to improve their financial health, the more they engage with our products, which in turn drives revenue growth. Our strategic priorities for 2019 include the continued expansion of our product offering with the addition of MogoWealth, along with rollout of our new cash back feature for the MogoCard. Related to this, we also plan on continuing to expand our partner ecosystem, as we identify best-in-class product partners to bring to our growing member base."

"A record fourth quarter closed out a successful year for Mogo, which saw us transform the revenue base of the company to more than 50-per-cent high-margin subscription and services revenue, as well as exit our short-term lending business," said Greg Feller, president and chief financial officer. "In the fourth quarter, our core revenue increased by 75 per cent, [and] subscription and services revenue grew 100 per cent, the fourth quarter in a row of 100-per-cent-or-greater growth. In addition, our adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] continues to improve, reaching a quarterly record of $2.1-million in the fourth quarter or 13 per cent of revenue. In 2019, while we will continue to invest in product development, we expect to see continued benefits from operating leverage that will drive increasing cash flow from operations before investment in our loan book."

Fourth quarter financial highlights:

  • Total revenue reached a record of $16.1-million, up 21 per cent from $13.3-million in the fourth quarter of 2017.
  • Core revenue, which excludes loan fees related to the legacy short-term loan product that the company exited in the third quarter of 2018, increased by 75 per cent to $16.1-million, up from $9.2-million in the comparable quarter in 2017.
  • Subscription and service revenue grew by 100 per cent in the fourth quarter of 2018 to $8.2-million and now represents 51 per cent of total revenue.
  • Core average revenue per member (ARPM) increased 23 per cent over the fourth quarter of 2017 to $88 per member.
  • Adjusted EBITDA reached a record $2.1-million or 13 per cent of gross revenue, an increase of 107 per cent from the prior year and representing the third quarter in a row of expanding margins.
  • Net loss for the fourth quarter of 2018 was $5.0-million, a 19-per-cent decrease compared with $6.1-million, for the fourth quarter of 2017, while net loss per share was 22 cents, a decrease of 34 per cent from a net loss per share of 33 cents in the fourth quarter of 2017.
  • Gross loans receivable increased to $101.8-million at quarter-end from $95.5-million last quarter.
  • Cash flow from operations before investment in receivables was positive $1.5-million, up from $1.4-million in the fourth quarter of 2017.
  • At Dec. 31, 2018, the company had $20.4-million in cash and up to an additional $173-million, upon certain conditions, from undrawn facilities available to support future growth.

Full-year 2018 financial highlights:

  • Total revenue increased 26 per cent to $61.3-million, despite exiting the short-term lending product in third quarter 2018.
  • Core revenue, which excludes loan fees related to the legacy short-term loan product that the company exited in the third quarter of 2018, increased by 71 per cent to $53.2-million.
  • Subscription and service revenue grew by 106 per cent and represented 50 per cent of core revenue for 2018.
  • Gross profit increased 18 per cent to $38.9-million (63 per cent of revenue), compared with $32.8-million (67 per cent of revenue) for 2017. The year-over-year decrease in margin percentage reflects the adoption of international financial reporting standard 9 in 2018, as well as the strategic exit from short-term lending.
  • Adjusted EBITDA increased by 68 per cent to a record $4.2-million from $2.5-million in 2017.
  • Net loss for 2018 was $22.0-million, an increase of 12 per cent compared with $19.7-million for 2017, while net loss per share was 97 cents, a decrease of 10 per cent from a net loss per share of $1.07 in 2017.

Fourth quarter and full-year business highlights:

  • Active members increased 39 per cent year over year to 756,000 at year-end;
  • Expanded into multiple new regions across Canada, making Mogo's full product suite available in eight provinces and accessible to more than 20 million Canadians;
  • More than $200-million invested in the Mogo platform to date;
  • Continued evolution toward an artificial-intelligence-(AI)-centric platform with AI now used in areas, such as underwriting and decisioning;
  • Launched MogoCrypto, which represented the company's first product in MogoWealth, with new investment options planned for 2019 through strategic partnerships;
  • Enhanced digital loan platform during the second quarter of 2018, resulting in marketing and operational efficiencies;
  • Commenced trading on the Nasdaq Capital Market under the symbol MOGO during the second quarter of 2018;
  • Extended the term of the company's strategic marketing collaboration agreement with Canada's largest news media company, Postmedia Network Inc., during the second quarter of 2018, for an additional two years to the end of 2020, with an additional minimum media value of $30-million over those two years for fixed quarterly payments of $525,000.

Conference call and webcast

Mogo will host a conference call to discuss its fourth quarter and full-year 2018 financial results at 5 p.m. EDT on March 12, 2019. The call will be hosted by David Feller, founder and chief executive officer, and Greg Feller, president and chief financial officer. To participate in the call, dial 416-764-8688 or 888-390-0546 using the conference ID 06624020. The webcast can be accessed at the Mogo website. Listeners should access the webcast or call 10 to 15 minutes before the start time to ensure they are connected. A copy of the presentation will be available at the Mogo website.

About Mogo Finance Technology Inc.

Mogo -- a financial technology company -- is a digital challenger to the banks in Canada, empowering consumers with simple solutions to help them manage and control their finances. Users can sign up for a free MogoAccount in only three minutes and get access to six products, including free credit score monitoring, identity fraud protection, digital spending account with a platinum prepaid Visa card, digital mortgage experience, the MogoCrypto account, the first product within MogoWealth, which enables the buying and selling of bitcoin, and access to smart consumer credit products through MogoMoney. The platform has been engineered to deliver a best-in-class digital experience, with best-in-class financial products all through one account. With more than 750,000 members and a marketing partnership with Canada's largest news media company, Mogo continues to execute on its vision of becoming the go-to financial app for the next generation of Canadians.

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