Q1 2023 Revenue of $15.9 million and Gross
Profit of $11.9 million
Q1 2023 operating expenses down 45% year
over year, driving positive Adjusted EBITDA of $1.0 million in the
quarter
Ended quarter with $60.4 million of cash and
total investments1
Mogo reports in Canadian dollars and in accordance with IFRS
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 first
quarter ended March 31, 2023.
“In the first quarter, we continued to make strong progress on
our plans to reengineer Mogo into a leaner and more profitable
company,” said David Feller, Mogo’s Founder and CEO. “These efforts
enabled us to quickly achieve positive Adjusted EBITDA 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% over the prior year,
mainly reflecting the Company’s previously disclosed decision to
narrow its strategic focus and exit certain sub-scale and
unprofitable products.
- Q1 gross profit of $11.9 million (75% margin), up from $11.7
million (68% margin) in Q4 2022. Gross profit was down year over
year from $12.3 million (71% margin) in Q1 2022, in-line with the
decrease in revenue due to the exit from certain sub-scale 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%, compared to Q1 2022.
- Mogo reported a material improvement in Adjusted EBITDA2, which
reached $1.0 million in Q1 2023, compared with an Adjusted EBITDA
loss of $5.5 million in Q1 2022.
- Adjusted net loss2 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% ownership in Coinsquare Ltd. (“Coinsquare”) 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 & CFO.
“On the back of a 45% 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
to $14 million. We believe that achieving positive Adjusted EBITDA
at this scale puts is 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 & Operations Highlights
- In 2023, Mogo launched the MogoTrade app in Quebec making it
available in both English and French languages and increasing our
total addressable market opportunity by approximately 28%.
MogoTrade remains available by invitation only.
- In March 2023, Mogo amended its marketing collaboration
agreement with Postmedia Network Inc. ("Postmedia") and extended
the agreement until December 31, 2024. Postmedia is a Canadian news
media company representing more than 130 brands across multiple
print, online 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% compared to Q1 2022.
- On April 3, 2023, Mogo announced that Coinsquare, in which Mogo
has a 34% 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% expected ownership.
- On May 4, 2023, Mogo announced it received an Extension Notice
from the Nasdaq Stock Market LLC (“Nasdaq”) granting the Company’s
request for a 180-day extension to regain compliance with the
minimum bid price requirement of US$1.00 per share under the Nasdaq
Listing Rule 5550(a)(2). The Company was first notified by Nasdaq
on October 28, 2022, and was given until April 26, 2023 to regain
compliance. The Company now has until October 23, 2023 to meet the
requirement.
Financial Outlook
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%, in Q1 2023
compared to Q1 2022.
Mogo expects its quarterly revenue in the near term will be
impacted by 5-10% 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 $6.0 million to $8.0 million;
- Exiting 2023 with an annual Adjusted EBITDA run rate of $10.0
million to $14.0 million (based on a Q4 2023 Adjusted EBITDA target
of $2.5 million to $3.5 million).
1Includes combined cash and cash equivalents, restricted cash
and investment portfolio of $38.6 million, along with a book value
of investment in Coinsquare of $21.8 million.
2Non-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 March 31, 2023.
Conference Call & Webcast
Mogo will host a conference call to discuss its Q1 2023
financial results at 3:00 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 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 and Adjusted
net loss, 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 March 31, 2022, which is available at
www.sedar.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
March 31, 2023
March 31, 2022
Net loss before tax
$
(7,051
)
$
(18,946
)
Depreciation and amortization
2,373
3,180
Stock-based compensation
293
3,611
Credit facility interest expense
1,454
933
Debenture and other financing expense
778
810
Accretion related to debentures
272
309
Share of loss in investment accounted for
using the equity method
3,178
5,563
Revaluation gain
(1,253
)
(1,148
)
Other non-operating expense
975
143
Adjusted EBITDA
1,019
(5,545
)
Adjusted Net Loss
($000s)
Three months ended
March 31, 2023
March 31, 2022
Net loss before tax
$
(7,051
)
$
(18,946
)
Stock-based compensation
293
3,611
Share of loss in investment accounted for
using the equity method
3,178
5,563
Revaluation gain
(1,253
)
(1,148
)
Other non-operating expense
975
143
Adjusted net loss
(3,858
)
(10,777
)
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 focus on its
digital wealth solutions, digital payments and other initiatives to
drive top-line expansion, the timing of the full release of
MogoTrade, 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 financial outlook for 2023, including total
revenues, and Adjusted EBITDA. 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.sedar.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, 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,
we also offer a digital payments platform that powers the
next-generation card programs from innovative fintech companies in
Europe and Canada. To learn more, please visit mogo.ca or download
the mobile app (iOS or Android).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230511005465/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
646-829-9701 shamsian@lythampartners.com
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