Mogo Launches new digital platform & mobile app
Member Base Increases 81% Yr/Yr to 225,000
Third Quarter of Improved Adjusted EBITDA
VANCOUVER, Aug. 10, 2016 /CNW/ - Mogo Finance Technology Inc. (TSX: GO), one of Canada's leading financial technology companies, today announced its financial and operational results for the second quarter ended June 30, 2016. The selected financial information included in this release is qualified in its entirety by, and should be read together with the Company's full financial statements and Management's Discussion and Analysis, which are available at www.sedar.com and http://investors.mogo.ca/.
Building Canada's leading digital banking platform
"In the second quarter we continued to make great progress enhancing our technology platform, product and brand – the three key pillars to our plan of building a next-generation digital banking experience. The financial services industry is at the early stages of a fundamental transformation, and Mogo remains uniquely positioned to capitalize on this opportunity as the industry goes digital," said David Feller, Mogo's Founder and CEO. "From a technology perspective, one of our main milestones for 2016 is our new account platform and mobile app. These have been major projects for our technology group, and we were thrilled to introduce both recently. With the Mogo app we have set the standard for convenience and simplicity and developed what we believe will become the leading digital banking experience in Canada."
Mogo Members increase to 225,000 Canadians
Mr. Feller continued: "Year over year our membership base increased by approximately 81% to 225,000 at quarter end, and with the full launch of the app in the coming weeks – combined with the promotional support of Postmedia – we expect our member base to accelerate as we push toward our goal of one million members in the next three years. We are offering a compelling value proposition today, including the first free credit score in Canada, instant decisioning on credit and the near-term introduction of our Platinum Prepaid Visa card. These products, combined with our plans to launch a mortgage product, will give us several new fee-based products to further monetize our growing member base and, over time, increase our average revenue per member."
Third consecutive improvement in Adjusted EBITDA
"We had our third consecutive improvement in adjusted EBITDA1 this quarter to ($0.5) million while cash flow from operations before investment in loans receivable was positive at $0.6 million. This improved financial performance reflects our continued focus on driving efficiencies through platform enhancements and strategic partnerships, and keeps us on our path to achieving our goal of positive adjusted EBITDA beginning in the fourth quarter of 2016," said Greg Feller, Mogo's President and CFO. "Our second quarter results show our continued financial discipline throughout the organization while maintaining our investment in our technology platform and new products. The launch of our new digital account and mobile app is a critical milestone on our path to introducing new fee-based products that give us more ways to monetize our growing member base. We believe this positions us for accelerated revenue growth in 2017 from a more diversified product portfolio."
Second Quarter 2016 Financial Highlights
- Revenue for the second quarter of 2016 was $12.7 million, a 23% increase from the second quarter of 2015. Within this, Loan interest and Other revenue increased a combined 122% to $5.9 million driven by the success of focusing on the growth of our installment loans and line of credit products.
- Gross profit grew 18% to $7.5 million (59% of revenue) from $6.4 million (62% of revenue) in the second quarter of 2015.
- Reported positive Contribution (1) of $4.4 million, an increase of 26% compared to the second quarter of 2015.
- Adjusted EBITDA(1) had its third sequential improvement to ($0.5) million in the second quarter of 2016, a 46% sequential improvement compared to ($1.0) million in the first quarter of 2016; and a 73% year over year improvement compared to ($1.9) million in the second quarter of 2015. This was driven by continued benefits of increased scale as well as increased operating efficiencies, including a 19% sequential decrease in customer services and operations expenses and a 22% decrease in marketing expenses, compared to the first quarter of 2016.
- Gross loans receivable were $70.7 million as at June 30, 2016, representing an 88% increase compared to $37.7 million as at June 30, 2015. Within this, gross loans receivable – long-term(1) represented 79% of the total gross loans receivable, compared to 55% of the total gross loans receivable as at June 30, 2015. On a sequential basis from Q1 2016 to Q2 2016, the gross loans receivable balance continued to shift toward long-term loans while overall receivables remained relatively flat, consistent with the company's near-term objective to balance its investment in the loan portfolio growth with investment in the technology platform and new products. The company expects the shift toward long-term loans to continue in the second half of 2016 along with modest overall receivable growth.
- Net cash flow from operating activities before investment in Loans receivable(1) had its second consecutive positive cash inflow in the second quarter of $0.6 million, with year-to-date cash flow from operating activities before investment in Loans receivable of $1.2 million.
- Adjusted net loss(1) had its third consecutive sequential improvement to $4.2 million in the second quarter of 2016, a 5% sequential improvement compared to $4.4 million in the first quarter of 2016; and a 10% year over year improvement compared to an adjusted net loss of $4.7 million in the second quarter of 2015.
- Net loss in the second quarter of 2016 was $4.6 million, improved by $1.0 million sequentially compared to the net loss of $5.7 million in the first quarter of 2016.
- At June 30, 2016, Mogo had $24.1 million in cash and cash equivalents.
Second Quarter 2016 Business Highlights
- Subsequent to quarter end, Mogo soft launched the new Mogo account platform and mobile app delivering what the Company believes is Canada's first truly digital banking experience. Specifically, Mogo's new mobile app enables one account sign-up in under three minutes giving consumers access to three innovative products to help them get in financial control: Canada's first free credit score on a mobile app, a free Mogo Platinum Prepaid Visa® Card that serves as a spending account (currently in Beta), and an instant decision on a personal loan with rates starting at 5.9%. Mogo expects to officially launch and promote the app in the third quarter of 2016, which the company believes will accelerate new member additions.
- Grew Mogo's member base to approximately 225,000 as at June 30, 2016, an 81% increase compared to approximately 124,000 as at June 30, 2015.
- Extended maturity of Credit Facility – ST from February 2017 to July 2018.
- Mogo generates nearly 240 million media impressions with its creative #FinancesWithBenefits campaign through its ground-breaking strategic marketing collaboration with Postmedia and their 10.7 million weekly print and digital readers.
- During the quarter, Mogo launched Canada's first-ever financial lounge in Toronto's trendy Queen West neighbourhood creating an engaging physical touchpoint for members to engage with the Mogo brand and get educated that it is cool to be in control of your finances.
Mogo Appoints New Chair
Mogo also announced today that David Feller, Founder, CEO and Director, will succeed Peter Brown in the role of Chair of the Board. Mr. Brown, who will remain a Director of Mogo and a member of the Audit Committee, wishes to hand over the reins of Chair in order to devote additional time to his other commitments, including charitable work.
"Peter is a highly valuable member of the Board and we would like to thank him for all his leadership, hard work and contributions as Chair over the past year during an important time in the development of the Company. I look forward to continuing to work with Peter as we execute on our strategy of building a digital banking experience," said Mr. Feller.
Conference Call & Webcast
Mogo will host a conference call to discuss its Q2 2016 financial results at 5:00 p.m. EST on August 10, 2016. 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 54469485. The webcast can be accessed at http://bit.ly/2aHzh6p 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.
Gross loans receivable (short-term and long-term), contribution, contribution margin, adjusted EBITDA, adjusted net income (loss), charge-off rate, cash provided by (used in) operating activities before investment in gross loans receivable and average revenue per member 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 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. 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. Readers are referred to our MD&A for the period ended June 30, 2016 which is available at www.sedar.com and http://investors.mogo.ca/ for more information regarding our use of these measures and a reconciliation to the most comparable IFRS measure.
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 Mogo's revenue, revenue growth and adjusted EBITDA, the future growth of Mogo's business, its intention to invest in its technology platform, to expand into other products and markets, Mogo's expectations regarding members, and Mogo's financial expectations and outlook for 2016. 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 invest in its platform and expand into new products and markets and its expectations for its financial performance for 2016 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 Company's Annual Financial Statements and also, MD&A for the period ended June 30, 2016, which are 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 (TSX:GO) – a Vancouver based financial technology company – is looking to become the new face of banking by offering Canadians a more convenient and engaging digital banking experience. Members can open a free MogoAccount in under 3 minutes and get instant access to 3 innovative products including Canada's first free credit score, a free account to control spending and instant decision on credit. Mogo is making it easier for its 225,000 members to get and stay in control of their financial health, in a way that banks aren't doing today.
(1) Contribution, adjusted EBITDA, adjusted net loss, net cash flow from operating activities before investment in loans receivable and gross loans receivable – long-term are non IFRS financial measures. For more information regarding our use of these measures see "Non-IFRS Financial Measures" and, where applicable, a reconciliation to the most comparable IFRS measure, see "Reconciliation of Non IFRS Financial Measures" in the MD&A for the period ended June 30, 2016.
SOURCE Mogo Finance Technology Inc