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Mogo Inc
Symbol MOGO
Shares Issued 75,952,490
Close 2022-08-11 C$ 1.60
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Mogo loses $51.9-million in Q2

2022-08-11 10:55 ET - News Release

Mr. David Feller reports


Mogo Inc. has released its financial and operational results for the three and six months ended June 30, 2022.

"During a period of exceptional financial market volatility, we surpassed the two-million-member milestone and delivered 27-per-cent revenue growth over the prior year," said David Feller, Mogo's founder and chief executive officer. "We are being highly disciplined with our growth spending as our team continues building the leading next-gen digital wealth platform, with a focus on new options for investing and trading. We continued advancing our commission-free stock trading product, MogoTrade, incorporating member feedback to enhance the user experience and features, with the goal of ultimately offering a best-in-class product to the Canadian market. We recently removed the wait-list and expect to ramp our marketing efforts later this year. In these uncertain economic times, financial well-being is as relevant as ever to Canadian consumers, and we want to bring them the best tools and products to help them save, invest and achieve financial freedom while also making a positive impact with their money."

Key financial highlights for Q2 2022:

  • Total revenue increased 27 per cent over the comparable quarter in 2021 to $17.3-million, including subscription and services revenue of $10.3-million, up 26 per cent over the same period last year.
  • Gross profit decreased 7 per cent to $11.3-million (65.6-per-cent margin), compared with $12.1-million (88.5-per-cent margin) in Q2 2021.
  • During the quarter, the company implemented a cost savings plan that reduced operating expenses by 14 per cent in Q2 2022 compared with Q1 2022.
  • Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $4.1-million represented a 25-per-cent decrease compared with adjusted EBITDA loss of $5.5-million in Q1 2022.
  • Net cash flow from operations before investment in receivables improved 62 per cent to negative $2.8-million, compared with negative $7.2-million in Q1 2022.
  • Adjusted net loss was $9.5-million, compared with $10.8-million in Q1 2022 and $8.1-million in Q2 2021.
  • Net loss increased to $51.9-million in Q2 2022, primarily driven by non-cash charges and the company's share of losses in affiliates totalling $38.9-million. This compared with net income of $9-million in Q2 2021, which included an unrealized gain of $24.8-million related to the Coinsquare warrants.
  • These non-cash items were primarily driven by an impairment charge of $26.7-million on Mogo's investment in Coinsquare and unrealized loss on Coinsquare warrants of $7-million (compared with unrealized gain of $24.8-million in the comparative period).
  • Additionally, Mogo incurred an increase related to its share of Coinsquare's net loss, which it accounts for under the equity method, as well as an unrealized loss on its investment portfolio and digital assets. These unrealized losses primarily resulted from recent broader equity and crypto market declines during the period.
  • In June, 2022, Mogo repurchased 800,000 common shares for a total cost of $1-million at an average price of $1.19 per share, pursuant to a previously disclosed share repurchase program of up to $10-million (U.S.) of common shares.
  • Mogo ended the quarter with cash, digital assets and investments totalling $122-million. This included combined cash, cash equivalent, digital assets and investment portfolio of $59.3-million, along with a book value of investment in Coinsquare of $62.7-million, as at June 30, 2022.

"Our Q2 results were solid despite our reduced spending on marketing and the macroenvironment headwinds, which further highlights the diversification and recurring nature of our revenue base. While our business has proved comparatively resilient through market cycles, we were not immune to the macroeconomic backdrop and have acted accordingly by reducing our expense base and increasing our focus on our path to profitability including shifting our investment spend to the most impactful areas such as MogoTrade and Moka," said Greg Feller, president and chief financial officer.

Greg Feller added: "We continue to carefully monitor a range of economic and market indicators to ensure we achieve the right balance between growth and operating profitability. Given the current economic uncertainty, we believe it is appropriate and prudent to assume these economic challenges will persist through 2023 and, as a result, we plan to continue to manage our growth investments more conservatively with a greater emphasis on driving towards profitability. Specifically, we are currently managing our growth investment spend assuming total revenue growth for 2023 in the range of 10 to 15 per cent, with a goal of being adjusted EBITDA positive by Q4 2023."

Additional business and operations highlights:

  • Mogo's total member base increased by approximately 18 per cent, from 1,695,000 members as at June 30, 2021, to 2,007,000 members as at June 30, 2022;
  • Ended the quarter with assets under management of approximately $310-million;
  • Accelerated the rollout of invitations to its commission-free stock trading app, MogoTrade, while also making further product enhancements, such as automatic approval for account openings, instant financing and the ability to receive in-app monthly statements, in advance of a broader launch; Mogo recently removed the wait-list, opening the product to the broader Canadian consumer market;
  • In alignment with its mission to help Canadians achieve financial freedom while also solving one of the biggest social issues people face, climate change, Mogo announced it has reached its one-million-tree milestone in partnership with Vancouver-based reforestation platform, veritree.

Financial outlook

Mogo reiterated its fiscal year 2022 guidance, which was previously communicated on May 12, 2022:

  • Total revenues are expected to grow to $69-million to $72-million, compared with $57.5-million in 2021, representing a year-over-year increase of 20 per cent to 25 per cent.
  • The company expects improving adjusted EBITDA as a percentage of revenue in the second half of 2022.

Conference Call & Webcast

Mogo will host a conference call to discuss its Q2 2022 financial results at 3:00 p.m. EDT on August 11, 2022. The call will be hosted by David Feller, Founder and CEO, and Greg Feller, President and CFO. To participate in the call, dial (438) 803-0534 or (888) 440-2131 (International). 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.

About Mogo

Mogo Inc., one of Canada's leading financial technology companies, is empowering its more than 2 million members with simple digital solutions to help them get in control of their financial health while also making a positive impact with their money. Through the free Mogo app, consumers can access a digital spending account with Mogo Visa* Platinum Prepaid Card featuring automatic carbon offsetting, easily buy and sell bitcoin, get free monthly credit score monitoring and ID fraud protection and access personal loans and mortgages. Mogo's new MogoTrade app 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's wholly-owned subsidiary, Carta Worldwide, also offers a digital payments platform that powers the next-generation card programs from innovative fintech companies in Europe, North America and APAC. To learn more, please visit mogo.ca or download the mobile app (iOS or Android).

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