Mr. David Feller reports
MOGO REPORTS RESULTS FOR Q1 2023
Mogo Inc. has released its financial and operational results for the first quarter ended March 31, 2023.
"In the first quarter, we continued to make strong progress on our plans to re-engineer Mogo into a leaner and more profitable company," said David Feller, Mogo's founder and chief executive officer. "These efforts enabled us to quickly achieve positive adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] while also creating a more efficient operating platform that supports our strategy to compete as the low-cost provider in our core products. While executing on these profitability initiatives, we continue to invest in both our digital wealth products and our digital payments platform, Carta Worldwide. With MogoTrade, we are increasingly confident that we have a highly differentiated and disruptive product that can be the low-cost solution in a massive market for digital trading and wealth management in Canada."
Key financial highlights for Q1 2023:
Q1 revenue of $15.9-million, down 8 per cent over the prior year, mainly reflecting the company's previously disclosed decision to narrow its strategic focus and exit certain subscale and unprofitable products.
Q1 gross profit of $11.9-million (75-per-cent margin), up from $11.7-million (68-per-cent margin) in Q4 2022. Gross profit was down year-over-year from $12.3-million (71-per-cent margin) in Q1 2022, in line with the decrease in revenue due to the exit from certain subscale and non-core products.
- During Q1 2023, Mogo continued to focus on cost-efficiency and accelerating its path to profitability. As a result of these initiatives, total operating expenses for Q1 2023 decreased by $11.1-million, or 45 per cent, compared with Q1 2022.
- Mogo reported a material improvement in adjusted EBITDA, which reached $1-million in Q1 2023, compared with an adjusted EBITDA loss of $5.5-million in Q1 2022.
- Adjusted net loss decreased to ($3.9-million) in Q1 2023 from ($10.8-million) in Q1 2022.
- Net loss decreased to ($6.9-million) in Q1 2023, compared with net loss of ($18.9-million) in Q1 2022.
- Ended Q1 with cash and total investments of $60.4-million. This included combined cash and restricted cash of $25.3-million, investment portfolio of $13.3-million, and a book value of Mogo's 34-per-cent ownership in Coinsquare Ltd. of $21.8-million.
"Our Q1 results clearly demonstrate our ability to quickly adjust our cost structure and focus our spending to improve operating profitability," said Greg Feller, president and chief financial officer. "On the back of a 45-per-cent reduction in operating expenses year-over-year, we generated a meaningful increase in Adjusted EBITDA, which puts us on a path to deliver accelerating Adjusted EBITDA growth this year and reach our target annual run rate exiting 2023 of $10[-million] to $14-million. We believe that achieving positive adjusted EBITDA at this scale puts us in a unique strategic position in the industry and gives us the ability to continue to make investments in our long-term growth products like MogoTrade and our digital payments platform Carta Worldwide that will help position us for accelerating revenue growth in 2024 and beyond."
Business and operations highlights:
In 2023, Mogo launched the MogoTrade app in Quebec, making it available in both English and French languages and increasing Mogo's total addressable market opportunity by approximately 28 per cent. MogoTrade remains available by invitation only.
- In March, 2023, Mogo amended its marketing collaboration agreement with Postmedia Network Inc. and extended the agreement until Dec. 31, 2024. Postmedia is a Canadian news media company representing more than 130 brands across multiple print, on-line and mobile platforms.
Mogo's digital payment solutions business, Carta Worldwide, processed over $2.2-billion of payments volume in Q1 2023, which was up over 43 per cent compared with Q1 2022.
- On April 3, 2023, Mogo announced that Coinsquare, in which Mogo has a 34-per-cent ownership stake, WonderFi Technologies Inc. and CoinSmart Financial Inc. entered into a business combination agreement to combine their respective businesses. Mogo is Coinsquare's largest shareholder and is expected to be the largest shareholder of the publicly traded combined company following closing of the business combination, with an approximately 14-per-cent expected ownership.
- On May 4, 2023, Mogo announced it received an extension notice from the Nasdaq Stock Market LLC granting the company's request for a 180-day extension to regain compliance with the minimum bid price requirement of $1 (U.S.) per share under the Nasdaq Listing Rule 5550(a)(2). The company was first notified by Nasdaq on Oct. 28, 2022, and was given until April 26, 2023, to regain compliance. The company now has until Oct. 23, 2023, to meet the requirement.
In recent quarters, Mogo has focused on accelerating the 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, total operating expenses decreased by $11.1-million, or 45 per cent, in Q1 2023 compared with Q1 2022.
Mogo expects its quarterly revenue in the near term will be impacted by 5 to 10 per cent as a result of its previously disclosed restructuring initiatives.
For fiscal 2023, the company will continue to focus on accelerating its path to profitability with a specific emphasis on increasing its adjusted EBITDA. For 2023, Mogo is focused on achieving:
Full-year adjusted EBITDA of $6-million to $8-million;
- Exiting 2023 with an annual adjusted EBITDA run rate of $10-million to $14-million (based on a Q4 2023 adjusted EBITDA target of $2.5-million to $3.5-million).
Conference call and webcast
Mogo will host a conference call to discuss its Q1 2023 financial results at 3 p.m. EDT on May 11, 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 77750186. The webcast can be accessed on Mogo's website. Listeners should access the webcast or call 10 to 15 minutes before the start time to ensure they are connected.
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, it also offers a digital payments platform that powers the next-generation card programs from innovative fintech companies in Europe and Canada.
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