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Mogo Finance Technology (TSX:MOGO) releases Q3 results

Tony Zerucha



Canadian fintech Mogo Finance Technology (TSX:MOGO) (NASDAQ:MOGO) this week announced its financial and operational results for the third quarter ending Sept. 30.

Q3 financial highlights

  • Total revenue reached a record of $15.4 million, up 23% from $12.6 million in 3Q17;
  • Core revenue, which excludes loan fees related to the legacy short-term loan product Epazz exited in Q3, increased 80% to $15.1 million, up from $8.4 million(sixth sequential quarter of accelerating core revenue growth);
  • Subscription and services revenue grew by 111% to $7.8 million; now represents 51% of total revenue;
  • Core average revenue per member increased 23% to $88;
  • Gross profit increased 12% to $9.6 million (62% of revenue), compared with $8.6 million (68% of revenue) in 3Q17. The YOY decrease in margin reflects the adoption of IFRS 9 in 2018 and the strategic exit from short-term lending;
  • Adjusted EBITDA reached $1.0 million, the ninth consecutive quarter of positive adjusted EBITDA;
  • Adjusted net loss was $5.5 million, compared with $4.1 million in 3Q17. The YOY change reflects higher non-cash depreciation and amortization and the non-cash impact of IFRS 9;
  • Gross loans receivable increased to $95.5 million from $89.1 million;
  • Cash flow from operations before investment in receivables was positive $3.7 million, up from $0.1 million in 3Q17;
  • Net loss was $7.0 million ($0.31 per share), compared with $3.7 million ($0.20 per share) in 3Q17. The YOY increase was driven by $1.1 million of one-time non-cash expenses, $1.0 million of higher non-cash depreciation and amortization, $0.7 million of unrealized changes in foreign exchange and derivatives, and the non-cash impact of IFRS 9; and
  • At Sept. 30 Epazz had $25.0 million in cash and up to an additional $170 million, upon certain conditions, from undrawn facilities available to support future growth.

Q3 business highlights

  • Membership increased to 711,000, a 45% increase over 3Q17;
  • Ongoing enhancements to mobile-first digital account and UX;
  • Continued focus on product development vis-a-vis mobile experience; and
  • Launched all products in Nova Scotia and expanded MogoMortgage offering to consumers in ManitobaNew BrunswickPrince Edward Island and Newfoundland.

“As the world of financial services moves to a digital, app-based experience, our mission is to bring together all the solutions Canadians need to get in control of their financial health into one mobile app,” said David Feller, Mogo’s founder and CEO. “We have a robust roadmap of new features and products, including the development of MogoWealth and exciting new features for the MogoCard. These new products further enhance the value proposition to members and open new fee-based revenue streams for Mogo. With a growing member base and brand, Mogo is well positioned for continued expansion of our product offering by partnering with companies that offer best in class financial products.”

“It was another very strong quarter financially for Mogo, as total revenue increased by 23 per cent despite exiting the short-term lending business this quarter as planned,” president and CFO Greg Feller said. “The true strength of our results is reflected in core revenue growth of 80 per cent – accelerating from 64 per cent in Q2 – which was again led by subscription and services revenue growth of 111 per cent based on our continued success with MogoProtect and our premium subscription services. This high-margin revenue stream is now at a quarterly run rate of almost $8 million and represents more than 50 per cent of our total revenue.  Our growing ecosystem of products also enabled us to increase the rate at which we are monetizing our member base, which drove a 23 per cent increase in our core average revenue per member.”

A copy of Mogo’s presentation  to investors from Nov. 7 is available at

Tony Zerucha

Tony Zerucha is an alternative finance journalist with more than seven years experience in the space. The author of more than 1,000 articles, Tony was named LendIt's 2018 Journalist of the Year.

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