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 quar...
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
VANCOUVER, British Columbia: 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
“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
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:
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 |
|
|
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