VANCOUVER, Aug. 13, 2015 /CNW/ - Mogo Finance Technology Inc. (TSX: GO) today reported its financial results for the second quarter ended June 30, 2015. All figures are in Canadian dollars and prepared in accordance with International Financial Reporting Standards (IFRS).
Q2 2015 Highlights (Comparisons made between fiscal Q2 2015 and fiscal Q2 2014 results, unless otherwise noted)
- Record quarterly loan originations of $71.3 million, up 137%.
- Record quarterly revenue of $10.3 million, an increase of 122%.
- Gross loans receivable rose to $37.7 million, a 69% increase over December 31, 2014.
- Long-term loan receivables increased by 192% over December 31, 2014 and represented 55% of the total balance at June 30, 2015.
- Adjusted EBITDA of $(1.9) million, compared with $(1.6) million.
- Strengthened financial position with the completion of $50.0 million initial public offering.
- Subsequent to quarter end, surpassed one million loans originated online.
"Our second quarter results – highlighted by record quarterly revenue and originations – underscore that consumers are responding to our value proposition," said David Feller, Founder & CEO of Mogo. "We recently surpassed more than one million loans originated online and have strong momentum heading into the second half of fiscal 2015. We are especially encouraged by the rapid growth of our long-term loan portfolio, led by the success of Mogo Liquid, our installment loan product targeting near-prime and prime customers."
Mr. Feller added: "We are at the early stages of a fundamental transformation in how Canadians access financial solutions. Led by the millennial generation, we believe financial services will move toward a fully digital experience. In our view the new leaders will be technology companies that are leveraging design to bring a new level of simplicity, transparency and convenience to Canadians. These are core strengths of Mogo today, and we will continue to invest significantly in our technology platform and brand to capitalize on this long-term market opportunity and position Mogo as the leading digital financial brand for the millennial generation."
Q2 2015 Financial Summary
Loan originations during the three-month period ended June 30, 2015 increased to $71.3 million, from $30.0 million during the three-month period ended June 30, 2014. Year to date, loan originations increased by 170% to $135.3 million, compared with $50.0 million in the same period in 2014.
In July 2015, Mogo surpassed more than one million loans originated online. As the Company continues to grow its long-term loan portfolio, in particular installment loans, management expects long-term loans to represent an increasing percentage of the originations and receivables.
The increase in originations and new customers drove continued strong growth in revenue. Total revenue for Q2 2015 increased by $5.6 million, or 122%, to $10.3 million, compared with $4.7 million for Q2 2014. Revenue for the first six months of 2015 grew 139% to $19.5 million, compared with $8.1 million in the same period in 2014.
Gross loans receivable, which represents the total amount of principal and fees outstanding to our customers at the end of the period before any provision for potential future charge‑offs, rose to $37.7 million at June 30, 2015, 69% higher than at December 31, 2014. The increase reflects the growth in customers and average loan amount. Approximately 55% of the gross receivables at quarter-end were from long-term loans, compared with 33% at December 31, 2014.
Management continues to focus on disciplined growth. Provision rate (loan losses as a percentage of loan originations) was 4.6% for the three months ended June 30, 2015, consistent with the same period last year. Gross profit for Q2 2015 was $6.4 million (62.0% of revenue), compared with $2.9 million (62.6% of revenue) for Q2 2014.
Adjusted EBITDA for Q2 2015 was $(1.9) million, compared with $(1.6) million in Q2 2014. Net loss for Q2 2015 was $4.7 million ($0.26 per basic and diluted share) versus $3.4 million ($0.44 per basic and diluted share) in Q2 2014. The higher net loss is attributable to the Company's strategy to invest in key areas of the business, including technology development and marketing, to continue to build its digital financial services platform and brand. The Company expects to see operating leverage in 2016 and achieve positive Adjusted EBITDA.
As at June 30, 2015 the Company had cash and cash equivalents of $52.7 million.
The Company's full financial statements and MD&A are available at www.sedar.com and http://investors.mogo.ca/.
Conference Call & Webcast
Mogo will host a conference call to discuss its Q2 2015 financial results at 8:30 a.m. EDT on August 13, 2015. The call will be hosted by David Feller, Founder & CEO, and Greg Feller, President & CFO. To participate in the call, dial 647-427-7450 or 1-888-231-8191 using the conference ID 94602141. The webcast can be accessed at http://investors.mogo.ca and will be available until August 13, 2016. Listeners should access the webcast or call 10-15 minutes before the start time to ensure they are connected.
Non-IFRS Measures
Loan originations, short-term and long-term gross loans receivable, adjusted EBITDA and provision rate are 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. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of 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 loan originations, adjusted EBITDA and provision rate, 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. We believe that securities analysts, investors and other interested parties frequently use non‑IFRS financial measures in the evaluation of issuers. 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. Investors are encouraged to review our financial statements and disclosures in their entirety and are cautioned not to put undue reliance on any non‑IFRS measure and view it in conjunction with the most comparable IFRS financial measures.
Please, refer to managements' discussion and analysis for the second quarter for a reconciliation of loan originations, short-term and long-term gross loans receivable, adjusted EBITDA and provision rate to the most comparable IFRS measures.
About Mogo
At Mogo (TSX: GO), we are driven by the belief that technology and design can not only transform the way Canadians access financial solutions, but also give them a way to take control of their financial health. Through our online platform, we provide convenience, transparency, a more enjoyable customer experience, and greater value compared with traditional brick-and-mortar financial institutions. Since launching our first online loan product in 2006, Mogo has become the leading online lender in Canada, with over 1 million loans originated and the only full credit spectrum lender. With our ever-expanding portfolio of innovative and socially responsible financial solutions, including our unique Level Up program, free Mogo Prepaid Visa card, and Member Perks program, we're building a digital financial brand for the next generation of savvy Canadians. To learn more about Mogo, visit mogo.ca.
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements regarding the future growth of Mogo's business and its intention to expand into other products and markets. 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 and its ability to expand into new products and markets 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 long form prospectus dated June 18, 2015 and available at www.sedar.com. 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.
Mogo Finance Technology Inc.
Interim Condensed Consolidated Statement of Financial Position
(unaudited)
June 30, |
December 31, |
|||
Assets |
||||
Cash and cash equivalents |
52,743,583 |
23,598,672 |
||
Loans receivable |
33,056,602 |
19,176,674 |
||
Prepaid expenses, deposits and other assets |
2,089,886 |
1,126,467 |
||
Investment tax credits |
1,616,353 |
1,453,516 |
||
Property and equipment |
1,561,792 |
598,323 |
||
Intangible assets |
4,479,875 |
3,455,900 |
||
95,548,091 |
49,409,552 |
|||
Liabilities |
||||
Accounts payable and accruals |
6,610,303 |
3,625,956 |
||
Credit facility |
17,933,186 |
12,818,716 |
||
Debentures |
39,638,195 |
39,185,245 |
||
64,181,684 |
55,629,917 |
|||
Shareholders' Equity (Deficit) |
||||
Share capital |
45,283,835 |
38,917,810 |
||
Contributed surplus |
486,578 |
460,939 |
||
Deficit |
(14,404,006) |
(45,599,114) |
||
31,366,407 |
(6,220,365) |
|||
95,548,091 |
49,409,552 |
Approved on Behalf of the Board
Signed by "Greg Feller" , Director
Signed by "Minhas Mohamed" , Director
Mogo Finance Technology Inc.
Interim Condensed Consolidated Statement of Comprehensive Loss
(unaudited)
Three Months Ended |
Six Months Ended |
||||||
June 30, |
June 30, |
June 30, |
June 30, |
||||
Revenue |
|||||||
Loan fees |
7,663,430 |
3,975,204 |
14,960,088 |
6,900,139 |
|||
Loan interest |
1,543,207 |
175,963 |
2,515,254 |
286,454 |
|||
Other revenues |
1,118,781 |
506,832 |
1,994,984 |
962,817 |
|||
10,325,418 |
4,657,999 |
19,470,326 |
8,149,410 |
||||
Cost of revenue |
|||||||
Provision for loan losses, net of recoveries |
3,300,751 |
1,373,529 |
6,220,907 |
2,331,068 |
|||
Transaction costs |
622,908 |
368,460 |
1,150,179 |
667,433 |
|||
3,923,659 |
1,741,989 |
7,371,086 |
2,998,501 |
||||
Gross profit |
6,401,759 |
2,916,010 |
12,099,240 |
5,150,909 |
|||
Operating expenses |
|||||||
Technology and development |
1,712,590 |
989,266 |
3,244,427 |
1,786,668 |
|||
Customer service and operations |
2,272,970 |
1,384,172 |
4,236,564 |
2,520,533 |
|||
Marketing |
2,332,133 |
1,239,504 |
4,558,070 |
1,562,618 |
|||
General and administration |
2,502,060 |
1,060,430 |
4,014,371 |
2,100,510 |
|||
Total operating expenses |
8,819,753 |
4,673,372 |
16,053,432 |
7,970,329 |
|||
Loss from operations |
(2,417,994) |
(1,757,362) |
(3,954,192) |
(2,819,420) |
|||
Other expenses |
|||||||
Unrealized foreign exchange loss (gain) |
(89,669) |
(202,330) |
453,796 |
20,769 |
|||
Funding interest expense |
799,781 |
187,549 |
1,425,734 |
187,549 |
|||
Corporate interest expense |
1,554,316 |
1,421,481 |
3,113,917 |
2,988,781 |
|||
Other financing (income) expenses |
1,832 |
192,072 |
1,334 |
520,716 |
|||
2,266,260 |
1,598,772 |
4,994,781 |
3,717,815 |
||||
Loss before income taxes |
(4,684,254) |
(3,356,134) |
(8,948,973) |
(6,537,235) |
|||
Provision for (recovery of) income taxes |
- |
- |
- |
- |
|||
Loss and comprehensive loss |
(4,684,254) |
(3,356,134) |
(8,948,973) |
(6,537,235) |
|||
Loss per share |
|||||||
Basic and fully diluted |
(0.258) |
(0.437) |
(0.493) |
(0.852) |
|||
Weighted average number of basic and fully diluted common shares |
18,162,432 |
7,671,941 |
18,162,432 |
7,671,941 |
|||
Mogo Finance Technology Inc.
Interim Condensed Consolidated Statement of Changes in Equity (Deficit)
(unaudited)
Share capital |
Contributed |
Deficit |
Total |
|
Balance, December 31, 2014 |
38,917,810 |
460,939 |
(45,599,114) |
(6,220,365) |
Loss and comprehensive loss |
- |
- |
(8,948,973) |
(8,948,973) |
Issuance of Class B preferred shares |
1,226,271 |
- |
- |
1,226,271 |
Stock based compensation |
- |
157,041 |
- |
157,041 |
Reduction of stated capital |
(40,144,081) |
- |
40,144,081 |
- |
Shares issued through initial public offering |
50,000,000 |
- |
- |
50,000,000 |
Share issue costs associated with initial public offering |
(4,847,567) |
- |
- |
(4,848,567) |
Warrants exercised |
131,402 |
(131,402) |
- |
- |
Balance, June 30, 2015 |
45,283,835 |
486,578 |
(14,404,006) |
31,366,407 |
Share capital |
Contributed |
Deficit |
Total |
|
Balance, December 31, 2013 |
1,000 |
79,135 |
(32,526,187) |
(32,446,052) |
Loss and comprehensive loss |
- |
- |
(6,537,235) |
(6,537,235) |
Issuance of common shares |
4,842,960 |
- |
- |
4,842,960 |
Issuance of Class A preferred shares |
5,187,050 |
- |
- |
5,187,050 |
Issuance of Class B preferred shares |
10,706,019 |
- |
- |
10,706,019 |
Share issue costs common shares |
(153,794) |
- |
- |
(153,794) |
Share issue costs Class B preferred shares |
(356,322) |
- |
- |
(356,322) |
Stock based compensation |
- |
218,344 |
- |
218,344 |
Options exercised |
148,807 |
(148,557) |
- |
250 |
Issuance of warrants |
- |
169,962 |
- |
169,962 |
Balance, June 30, 2014 |
20,375,720 |
318,884 |
(39,063,422) |
(18,368,818) |
Mogo Finance Technology Inc.
Interim Condensed Consolidated Statement of Cash Flows
(unaudited)
Three Months Ended |
Six Months Ended |
|||||
June 30, |
June 30, |
June 30, |
June 30, |
|||
Cash provided by (used for) the following activities |
||||||
Operating activities |
||||||
Loss and comprehensive loss |
(4,684,254) |
(3,356,134) |
(8,948,973) |
(6,537,235) |
||
Depreciation and amortization |
361,704 |
346,367 |
708,825 |
686,565 |
||
Amortization of deferred finance costs |
86,668 |
57,835 |
173,336 |
57,835 |
||
Provision for loan losses |
3,510,987 |
1,544,681 |
6,591,226 |
2,642,018 |
||
Stock based compensation expense |
109,641 |
35,100 |
157,041 |
218,344 |
||
Unrealized foreign exchange loss (gain) |
(90,291) |
(202,410) |
452,950 |
18,868 |
||
(705,545) |
(1,574,561) |
(865,595) |
(2,913,605) |
|||
Changes in working capital accounts |
||||||
Increase in loans receivable |
(11,165,592) |
(5,655,960) |
(20,471,154) |
(6,718,549) |
||
Investment tax credits |
(5,337) |
(157,500) |
(162,837) |
(315,000) |
||
Prepaid expenses, deposits and other assets |
(400,498) |
42,905 |
(963,419) |
(73,745) |
||
Accounts payable and accruals |
2,882,272 |
(375,239) |
2,984,347 |
(129,178) |
||
Net cash used in operating activities |
(9,394,700) |
(7,720,355) |
(19,478,658) |
(10,150,077) |
||
Investing activities |
||||||
Purchases of property and equipment |
(925,337) |
(128,127) |
(1,060,250) |
(175,560) |
||
Investment in software |
(950,770) |
(448,581) |
(1,636,019) |
(818,750) |
||
Net cash used in investing activities |
(1,876,107) |
(576,708) |
(2,696,269) |
(994,310) |
||
Financing activities |
||||||
Proceeds from initial public offering, net of issuance costs |
45,152,433 |
- |
45,152,433 |
- |
||
Advances of debentures |
- |
3,000,103 |
- |
4,732,684 |
||
Repayment of debentures |
- |
- |
- |
(290,000) |
||
Credit facility advanced |
2,763,042 |
5,498,600 |
5,163,042 |
5,498,600 |
||
Credit facility financing costs |
(203,920) |
(110,807) |
(221,908) |
(908,617) |
||
Common shares issuance costs |
- |
- |
- |
(153,794) |
||
Options exercised |
- |
250 |
- |
250 |
||
Proceeds from issuance of Class A preferred shares |
- |
- |
- |
30,000 |
||
Proceeds from issuance of Class B preferred shares, net of share issuance costs |
- |
3,431,793 |
1,226,271 |
10,388,256 |
||
Net cash provided by financing activities |
47,711,555 |
11,819,939 |
51,319,838 |
19,297,379 |
||
Increase in cash resources |
36,440,748 |
3,522,876 |
29,144,911 |
8,152,992 |
||
Cash and cash equivalents, beginning of period |
16,302,835 |
6,081,129 |
23,598,672 |
1,451,013 |
||
Cash and cash equivalents, end of period |
52,743,583 |
9,604,005 |
52,743,583 |
9,604,005 |
||
Supplementary cash flow information |
||||||
Interest paid |
2,328,097 |
1,643,454 |
4,524,925 |
3,224,296 |
SOURCE Mogo Finance Technology Inc
For further information: Craig Armitage, Investor Relations, [email protected], (416) 347-8954
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