Mogo Reports Record Quarterly Revenue in Q2 2015

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,
2015

December 31,
2014

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,
2015

June 30,
2014

June 30,
2015

June 30,
2014

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
surplus

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
surplus

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,
2015

June 30,
2014

June 30,
2015

June 30,
2014

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, craiga@mogo.ca, (416) 347-8954

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