Core Revenue up 57% year over year to
$16.4 Million
Subscription & Services Revenue Grows 68% year over year
to $8.3
Million
Adjusted EBITDA Increases 639% year
over year to a quarterly record $2.2
Million
Mogo reports in Canadian dollars and in accordance with
IFRS
VANCOUVER, May 14, 2019 /CNW/ - Mogo Finance Technology
Inc. (TSX:MOGO) (NASDAQ:MOGO) ("Mogo" or the "Company"), a
digital challenger to Canada's
banks, today announced its financial and operational results for
the first quarter ended March 31,
2019.
"Fast-growing fintechs are challenging legacy banks globally,
using technology to transform the user experience and introduce
better products – with dramatically lower fees – that help
consumers improve their financial health," said David Feller, Mogo's Founder and CEO. "That's
our driving mission at Mogo, and we're off to an excellent start in
2019 as we continue to enhance Canada's leading mobile-first digital
platform. This year, we continue to focus on improvements to the
platform and product experience that make it easier for consumers
to improve their financial health. This includes new features
like Cashback on our MogoCard, as well as integrating new
third-party solutions like Plaid that help reduce the friction of
onboarding while also enabling us to gather more data and insights
to better serve our members. Our strategic priorities for 2019 also
include the continued expansion of our product offering and partner
ecosystem, as we identify best-in-class products to bring to our
growing member base."
"As we attract more members to the Mogo platform – and convert
more of them to revenue-generating customers – we continue to
deliver strong organic growth with our Core revenue up 57% and our
high-margin Subscription & Services revenue, which increased
68% year over year, continuing to drive the majority of this
growth," said Greg Feller, President
and CFO. "At the same time, we generated record contribution of
$6 million in the quarter which
highlights the strong underlying economics of our products and
helped drive a 639% increase in EBITDA to a record $2.2 million in the quarter. The recently
announced transaction with Difference Capital will also
significantly strengthen our financial position, bringing in more
than $30 million in cash and
monetizable assets to support our growth and continued investment
in our platform, products and overall user
experience."
Q1 2019 Financial Highlights
- Core revenue (which now equals total revenue)1
increased by 57% to $16.4 million,
compared with $10.4 million in the
same period in 2018.
- Subscription and services revenue grew to $8.3 million, a 68% increase from the comparable
quarter in 2018.
- Gross profit increased 14% to $10.7
million (65% of revenue), compared with $9.4 million (65% of revenue) in the first
quarter of 2018. Gross margin increased by more than 300 basis
points from Q4 2018.
- Contribution increased by 13% year over year to a record
$6.1 million, representing a 37%
margin. Contribution also increased sequentially by approximately
$1.0 million over Q4 2018
Contribution of $5.1 million (32% of
revenue).
- Adjusted EBITDA reached a record $2.2
million (14% of total revenue), an increase of 639% from the
prior year and the fourth quarter in a row of expanding
margins.
- Adjusted net loss improved to $4.7
million, compared with $4.9
million for the first quarter of 2018.
- Cash flow from operations before investment in receivables was
positive $2.8 million, up from
$(0.2) million in the first quarter
of 2018.
- Average core revenue per member ("Core ARPM") increased 16%
over the first quarter of 2018 to $84.
- At March 31, 2019, the Company
had $16.3 million in cash and up to
an additional $173 million, upon
certain conditions, from undrawn facilities available to support
future growth.
Q1 2019 Business Highlights
- Active members increased 34% year over year to 808,000 at
quarter end.
- Further development of MogoWealth platform to support the
introduction of new investment options in 2019.
- Continued to enhance best-in-class digital experience through
the adoption of technology from customer-experience leader
Plaid.
- Subsequent to quarter end, announced business combination with
Difference Capital Financial, which will give Mogo access to
approximately $9 million in cash and
a portfolio of investments in some of the premier private
technology companies in Canada,
including Hootsuite and Vision Critical, valued at approximately
$24 million.2
1.
|
Core revenue is
calculated as total revenue less revenue from loan fees, which are
related to the Company's legacy short-term loan products that were
phased out in the third quarter of 2018. Beginning in the quarter
ended March 31, 2019, core revenue equals total revenue and the
term core revenue is used in this press release for the purposes of
comparison to prior periods.
|
|
|
2.
|
Values are based
on management estimates and subject to change. The transaction is
subject to Mogo shareholder approval, regulatory approval and
satisfaction of other customary conditions. The transaction is
expected to close in the second quarter of 2019.
|
Conference Call & Webcast
Mogo will host a conference call to discuss its Q1 2019
financial results at 5:00 p.m. EDT on
May 14, 2019. The call will be
hosted by David Feller, Founder and
CEO, and Greg Feller, President and
CFO. To participate in the call, dial (416) 764-8688 or (888)
390-0546 using the conference ID 73041482. The webcast can be
accessed at https://bit.ly/2XKaw0B or
http://investors.mogo.ca. Listeners should access the webcast or
call 10-15 minutes before the start time to ensure they are
connected. A copy of the presentation will be available at
http://investors.mogo.ca.
1) 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 core revenue
(total revenue excluding loan fees), adjusted EBITDA,
adjusted net income (loss), cash provided by (used in) operating
activities before investment in loans receivable, core ARPM,
Contribution, and Mogo members, 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. Please see
"Non-IFRS Financial Measures" in our Management's Discussion and
Analysis for the First Quarter Ended March
31, 2019 for a reconciliation of these non-IFRS financial
measures to the nearest IFRS measures which is available at
www.sedar.com and at www.sec.gov.
Forward-Looking Statements
This news release may contain "forward-looking statements"
within the meaning of applicable securities legislation, including
statements regarding Mogo's strategic priorities and
expectations for 2019. Forward-looking statements are
necessarily based upon a number of estimates and assumptions that,
while considered reasonable by management, are inherently subject
to significant business, economic and competitive uncertainties and
contingencies. 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 financial
performance for 2019 are subject to a number of conditions, many of
which are outside of Mogo's control. 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 (TSX: MOGO; NASDAQ: MOGO) — a financial technology company
— is a digital challenger to the banks in Canada, empowering
consumers with simple solutions to help them manage their financial
health. Users can sign up for a free MogoAccount in only three
minutes and get access to six products including free credit score
monitoring, identity fraud protection, digital spending account
with Platinum Prepaid Visa® Card, digital mortgage experience, the
MogoCrypto account, the first product within MogoWealth, which
enables the buying and selling of bitcoin, and access to smart
consumer credit products through MogoMoney. The platform has been
engineered to deliver a best-in-class digital experience, with
best-in-class financial products all through one account. With more
than 800,000 members and a marketing partnership
with Canada's largest news media company, Mogo continues
to execute on its vision of becoming the go-to financial app for
the next generation of Canadians. To learn more, please visit
mogo.ca or download the mobile app (iOS or Android).
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SOURCE Mogo Finance Technology Inc