Release Date: March 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mogo Inc (NASDAQ:MOGO) reported a 9% increase in revenue for 2024, reaching $71.2 million, driven by a 16% increase in wealth revenue and a 21% increase in payments revenue.
- The company ended the year with $49.1 million in cash, marketable securities, and investments, up from $36.2 million in Q3.
- Assets under management in the wealth segment grew 22% year over year, reaching $428 million.
- Mogo Inc (NASDAQ:MOGO) extended its credit facility to 2029 with lower interest rates, improving financial flexibility.
- The company is focusing on high-growth areas such as wealth and payments, with projected revenue growth of 20-25% in wealth and mid to high teens in payments for 2025.
Negative Points
- Mogo Inc (NASDAQ:MOGO) decided to exit its institutional brokerage operations, which contributed $5.3 million in revenue for 2024, due to negligible operating margins.
- The company expects a decrease in interest revenue from its lending business by 8-10% in 2025 due to economic uncertainties.
- Adjusted EBITDA for 2024 was $6.7 million, a decline from $7.7 million in 2023.
- Mogo Inc (NASDAQ:MOGO) is no longer focused on generating positive adjusted net income for 2025, prioritizing growth and investment instead.
- The company is taking a cautious approach to lending due to macroeconomic uncertainties, including potential impacts from US-Canadian tariff disputes.
Q & A Highlights
- Warning! GuruFocus has detected 3 Warning Signs with MOGO.
Q: Can you provide more color on the timing of the decision to exit the institutional brokerage business? Why is now the right time? A: Greg Feller, President and CFO, explained that the institutional brokerage business was a legacy operation acquired for regulatory licenses and was never core to Mogo's strategy. It was volatile with negligible operating margins, making it a distraction. The decision to exit aligns with Mogo's focus on scaling its wealth and payments businesses.
Q: As you look to scale wealth and payments, could we see potential acquisitions to accelerate that process? A: Dave Feller, CEO, mentioned that while acquisitions are not a priority, they are not ruled out. Mogo believes it has a significant opportunity with its current offerings in wealth, which are highly differentiated. Future acquisitions could be considered to enhance the ecosystem, but nothing is planned in the near term.
Q: Regarding the decision to pull back in the lending business, are you being proactive, or are you already seeing some deterioration in credit quality? A: Greg Feller stated that Mogo is being proactive. The lending business, once a major revenue source, is now a smaller part, allowing flexibility to adjust. Given the macroeconomic uncertainty, particularly around tariffs, Mogo decided to take a conservative approach. This decision could be revisited if conditions stabilize.
Q: What are the growth expectations for the wealth and payments segments in 2025? A: Greg Feller highlighted that Mogo anticipates accelerated growth in wealth, with revenue expected to increase by 20-25%, and the payments business projected to grow in the mid to high teens. These segments are seen as high-growth areas within trillion-dollar addressable markets.
Q: How does Mogo plan to fund its growth initiatives in 2025? A: Greg Feller noted that Mogo maintains a solid financial position with $49 million in cash and investments. The company has monetized some investments post-year-end and believes it has additional opportunities to fund incremental capital requirements for its growth plan in 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.