Mogo Reports Results for Q3 2024 and Expects Positive Adjusted Net Income for 2025
Raises 2024 Adjusted EBITDA(1,2) guidance & introduces 2025 Adjusted EBITDA guidance of $10 to $12 million
Quarterly payments volume increased 23% year-over-year to a record $3.0 billion
AUM Increased 22% year-over-year to $409 million
Adjusted EBITDA increased sequentially to $2.1 million in Q3 2024
M ogo reports in Canadian dollars and in accordance with IFRS
VANCOUVER, British Columbia--(BUSINESS WIRE)--November 06, 2024--
Mogo Inc. $(MOGO)$ (TSX:MOGO) ("Mogo" or the "Company"), a digital wealth and payments business, today announced its financial and operational results for the third quarter ended September 30, 2024.
"We've made 'sustainable profitability' our strategic priority, and our third quarter results reinforce that our work over the past year has helped the Company get a lot closer to this goal," said David Feller, Mogo's Founder and CEO. "At the same time, we continue to make the right investments in our wealth and payments platforms to support future growth in both markets. We have meaningfully enhanced the value proposition of our wealth products with features like the AI co-pilot, and our partnership with Postmedia gives us an efficient channel to build our brand and user base in wealth going forward. In our payments business, we're seeing robust growth, with volume reaching record levels in the third quarter."
Key Financial Highlights for Q3 2024
-- Subscription & Services revenue grew 12% over the prior year to $10.7
million in Q3 2024.
-- Revenue increased in Q3 2024 to $17.7 million, up 9% over the prior year,
reflecting the third consecutive quarter of year-over-year growth in the
Company's primary business lines of wealth, payments and lending.
-- Gross profit was $11.9 million in Q3 2024, up from $11.4 million in Q3
2023. Gross margin was 67.3% in Q3 2024 versus 67.5% in Q2 2024.
-- Adjusted EBITDA1 of $2.1 million in Q3 2024 (12.1% margin), compared with
$2.1 million (12.8% margin) in Q3 2023.
-- Rule of 40 score3 of 24.4% in Q3 2024 versus 4.3% in Q3 2023 and 16.2% in
Q2 2024.
-- Cash flow from operating activities before investment in gross loans
receivable1 was positive for the eighth consecutive quarter, reaching
$4.8 million in Q3 2024, an 84% increase over Q3 2023
-- Cash flow from operating activities was $1.5 million in Q3 2024,
compared to cash used in operating activities of $4.2 million in
Q3 2023.
-- Adjusted net loss1 was $0.5 million in Q3 2024 compared with adjusted net
loss of $0.5 million in Q3 2023 and improved from adjusted net loss of
$1.5 million in Q2 2024.
-- Net loss was $8.1 million in Q3 2024, compared with net loss of $9.5
million in Q3 2023.
-- Cash, Marketable Securities & Investments totaled $36.2 million as of
September 30, 2024 (representing approximately $1.48 per share) versus
$41.5 million at the end of Q2 2024.
-- Cash and restricted cash was $12.4 million (an increase from Q2
2024 of $11.3 million)
-- Marketable securities of $12.5 million
-- Investment portfolio of $11.3 million
"We continue to focus on improving cash flow and profitability, and we made significant progress in the third quarter, highlighted by a 190% increase in cash flow from operations over Q2," said Greg Feller, President & CFO. "These efforts allowed us to raise the adjusted EBITDA outlook for this fiscal year and position the company for significant adjusted EBITDA growth as we look out to 2025. Specifically, we expect to generate adjusted EBITDA of $10 to $12 million in fiscal 2025 and, importantly, we now expect to turn positive adjusted net income for 2025. This would be the first time in Mogo's history to be positive on this measure, which we consider a significant milestone and the final step before turning net income positive."
Business & Operations Highlights
-- Continued growth in payments volume - Mogo's digital payment solutions
business, Carta Worldwide, processed just under $3.0 billion of payment
volume in Q3 2024, an increase of 23% compared to Q3 2023.
-- Assets under management were $409 million - Assets under management in
the Company's Wealth businesses increased 22% year-over-year to $409
million, with assets within our MogoTrade product up 67% year over year.
-- Mogo members increased to 2.17 million at quarter end, up 4% from Q3
2023.
-- Enhancements to wealth offerings -- During the quarter, Mogo continued
its strong product improvement velocity with 15 app update releases,
including:
-- AI - Launched a new co-pilot tool that enables Mogo users to
easily access the latest information and data on companies they
are researching directly from the app.
-- Educational content -- Launched a new in-app educational content
series designed to help investors improve their investing
knowledge, skills and abilities.
-- Intelligent Investing -- Developed and began rolling out a new
positioning strategy around "Intelligent Investing" to stand in
direct opposition to the status quo.
-- Partnership with Thomas Lee of Fundstrat - In July 2024, Mogo announced a
new partnership to become the exclusive Canadian partner of top-ranked
Wall Street investment strategist Tom Lee of Fundstrat. Mogo will provide
members of the Company's digital wealth platform, Mogo and Moka, with
exclusive access to equity research and related products and services
produced by a division of Fundstrat.
Financial Outlook
The outlook that follows supersedes all prior financial outlook statements made by Mogo, constitutes forward-looking information within the meaning of applicable securities laws, and is based on a number of assumptions and subject to a number of risks. Actual results could vary materially as a result of numerous factors, including certain risk factors, many of which are beyond Mogo's control. Please see "Forward-looking Statements" below for more information.
-- For Fiscal 2024 Mogo is now expecting:
-- Subscription and services revenue growth of approximately 10% for
the full year.
-- Adjusted EBITDA2 guidance of $6 to $7 million in Fiscal 2024, an
increase from previous guidance of $5 to $6 million.
-- Mogo also introduced Fiscal 2025 targets:
-- High-single-digit subscription and services revenue growth,
driving modest overall revenue growth.
-- Adjusted EBITDA of $10 to $12 million, an increase of 69% year
over year (from the mid-point of both ranges).
-- Mogo expects for the first time to generate positive adjusted net
income for the year.
(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, 2024.
(2) Adjusted EBITDA and adjusted net loss are non-IFRS measures. Management
has not reconciled these forward-looking non-IFRS measures to their 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.
(3) Rule of 40 score is calculated by adding subscription and services revenue
growth and adjusted EBITDA margin.
Conference Call & Webcast
Mogo will host a conference call to discuss its Q3 2024 financial results at 12:00 p.m. ET on November 6, 2024. The call will be hosted by David Feller, Founder and CEO, and Greg Feller, President and CFO. To participate in the call, dial (289) 514-5100 or (800) 717-1738 (International) using conference ID: 58460. 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"
(MORE TO FOLLOW) Dow Jones Newswires
November 06, 2024 08:18 ET (13:18 GMT)
Comments