Today's News |
Mogo Announces Record Full-Year 2015 Revenue, Up 86% Year-Over-Year
Wednesday, March 16, 2016Company Profile | Follow Company
Number of Mogo Members Surpasses 186,000, up 145% Year over Year
Company Delivers Improved Adjusted EBITDA in Fourth Quarter
Vancouver, BC, March 16, 2016--(T-Net)--Mogo Finance Technology Inc. (GO.TO), Canada's leading financial technology platform that empowers consumers with simple financial solutions, today reported strong financial results for the full year and quarter ended December 31, 2015.
"In 2015, we successfully completed our IPO and made significant progress towards our goal of building a digital financial services company for the next generation of Canadians," said David Feller, Mogo's Founder and CEO. "Our membership base increased to over 186,000, clearly highlighting that our convenient mobile-first financial solutions, as well as our millennial-focused Mogo brand, are resonating with Canadians. Leveraging our ground-breaking $50 million strategic partnership that we recently announced with Canada's largest news media group, Postmedia, we are extremely well-positioned to continue building the Mogo brand and accelerating the growth of our member base towards our 3-year goal of 1 million Canadians. In addition, we continue to build out what we believe is Canada's leading FinTech company of over 300 team members, including engineers, designers, product managers, data scientists, marketers, credit risk, operations and customer service experts, relentlessly focused on transforming the traditional banking experience by delivering a digital suite of innovative financial products."
Mr. Feller added: "Our opportunity at Mogo is massive. The banking industry, like many others has entered a period of profound change and disruption. The FinTech adoption rate in Canada is one of the lowest in the world at only 8%,1 however, this is changing rapidly as consumers, driven by millennials, look for a more convenient digital experience. With over 12 years of experience, Mogo is both a pioneer and leader in this area and is uniquely positioned to capitalize on this digital transformation given our scale, brand and technology platform. Fiscal 2016 will be an exciting year in our continued evolution as we launch multiple new products, including our mobile app and the MogoMortgage, enter into new partnerships that leverage our digital platform, increase awareness of the Mogo brand, continue to grow our member base and position Mogo as the convenient digital alternative to the banks in Canada."
"Our 2015 financial results were highlighted by an 86% increase in total revenue and more than 500% growth in our interest revenue, driven by the strong demand for our installment loan products. Importantly, we were able to balance this with our commitment to demonstrate operating leverage in the fourth quarter, with a more than 50% sequential improvement in our Adjusted EBITDA," said Greg Feller, Mogo's President and CFO. "Our unique solution, which includes convenient access to loan products, is designed to help all consumers across the credit spectrum lower their cost of credit and help them get out of debt sooner. Our mission, to help all Canadians get into financial control, is clearly resonating with consumers and driving strong member growth."
Mogo reports in Canadian dollars and in accordance with IFRS.
Fourth Quarter Financial Highlights
Full-Year 2015 Financial Highlights
Fourth-Quarter and Full-Year Business Highlights
Strong Member Growth
Ground-Breaking $50 Million Marketing Partnership
Increasing Brand Awareness
Financial Technology Platform & Innovative Products
Outlook
"Fiscal 2015 was an important year to demonstrate our ability to acquire new customers and members as well as launch and scale new products, particularly our MogoLiquid installment loan. As we look to 2016, our priorities are to continue to grow our member base, invest heavily in our technology platform, increase Mogo brand awareness through optimization of new Postmedia partnership, launch new non-capital-intensive/fee-based products and enter into new strategic partnerships that further our strategy to deliver a full suite of digital financial solutions to Canadians. We will continue to balance these initiatives with the prudent growth of our existing loan products and our goal of achieving positive Adjusted EBITDA3. We believe that optimizing these priorities will allow us to accelerate revenue growth in 2017 and maximize long-term shareholder value."
Mogo is providing the following outlook regarding 2016:
Non-IFRS Measures
Loan originations, adjusted EBITDA, long-term loans receivable, provision rate and contribution 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, long-term loans receivable, provision rate and contribution, 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. Readers are referred to our MD&A for the period ended December 31, 2015 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.
About Mogo
Mogo (GO.TO) is a financial technology company looking to offer Canadians a digital alternative to banks when it comes to borrowing and getting control of their financial health. With over 186,000 members and growing, we are using technology and design to bring a new level of convenience and simplicity to financial services. Whether looking to refinance credit card debt or other high-cost consumer debt, Mogo looks to provide its members with the best possible products and tools to help them manage their finances. To learn more about Mogo—recently referred to as the potential "Uber of banking" by CNBC, Toronto Star, and others—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 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 MD&A for the year ended December 31, 2015, which is 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.
1 EY FinTech Adoption Index
2 Loan originations, provision rate, contribution, adjusted EBITDA, 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 year ended December 31, 2015.
3 Loan originations, provision rate, contribution, adjusted EBITDA, 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 year ended December 31, 2015.
Mogo Finance Technology Inc. |
|||||
Consolidated Statement of Financial Position |
|||||
As at December 31, 2015 |
|||||
2015 |
2014 |
||||
Assets |
|||||
Cash and cash equivalents (Note 3) |
31,723,854 |
23,598,672 |
|||
Loans receivable (Note 4) |
61,768,366 |
19,176,674 |
|||
Prepaid expenses, deposits and other assets |
1,143,387 |
1,126,467 |
|||
Investment tax credits |
1,616,353 |
1,453,516 |
|||
Property and equipment (Note 6) |
4,239,017 |
598,323 |
|||
Intangible assets (Note 7) |
6,851,448 |
3,455,900 |
|||
107,342,425 |
49,409,552 |
||||
Liabilities |
|||||
Accounts payable and accruals |
5,057,202 |
3,625,956 |
|||
Other liabilities (Note 8) |
1,419,614 |
- |
|||
Credit facility (Note 9) |
40,384,293 |
12,818,716 |
|||
Debentures (Note 10) |
40,326,022 |
39,185,245 |
|||
Derivative financial liability (Note 19) |
129,457 |
- |
|||
87,316,588 |
55,629,917 |
||||
Shareholders' Equity (Deficit) |
|||||
Share capital (Note 12) |
45,314,488 |
38,917,810 |
|||
Contributed surplus |
1,517,850 |
460,939 |
|||
Deficit |
(26,806,501) |
(45,599,114) |
|||
20,025,837 |
(6,220,365) |
||||
107,342,425 |
49,409,552 |
Approved on Behalf of the Board
Signed by "Greg Feller" , Director
Signed by "Minhas Mohamed" , Director
Mogo Finance Technology Inc. |
||||
Consolidated Statement of Comprehensive Loss |
||||
For the Year ended December 31, 2015 |
||||
2015 |
2014 |
|||
Revenue |
||||
Loan fees |
30,390,741 |
19,413,469 |
||
Loan interest |
8,064,212 |
1,318,007 |
||
Other revenues |
5,076,746 |
2,668,793 |
||
43,531,699 |
23,400,269 |
|||
Cost of revenue |
||||
Provision for loan losses, net of recoveries (Note 4) |
13,679,679 |
7,005,484 |
||
Transaction costs |
2,726,281 |
1,570,157 |
||
16,405,960 |
8,575,641 |
|||
Gross profit |
27,125,739 |
14,824,628 |
||
Operating expenses |
||||
Technology and development |
7,595,776 |
3,903,746 |
||
Customer service and operations |
8,779,495 |
5,841,193 |
||
Marketing |
10,792,022 |
4,641,933 |
||
General and administration |
10,531,596 |
4,911,155 |
||
Total operating expenses |
37,698,889 |
19,298,027 |
||
Loss from operations |
(10,573,150) |
(4,473,399) |
||
Other expenses |
||||
Funding interest expense (Note 9) |
3,467,599 |
1,342,523 |
||
Corporate interest expense (Note 10) |
6,259,210 |
6,086,049 |
||
Unrealized foreign exchange loss |
1,142,720 |
485,846 |
||
Unrealized gain on derivative liability |
(106,274) |
- |
||
Other financing expenses |
11,711 |
679,858 |
||
10,774,966 |
8,594,276 |
|||
Loss before income taxes |
(21,348,116) |
(13,067,675) |
||
Provision for income taxes (Note 11) |
3,352 |
5,252 |
||
Loss and comprehensive loss |
(21,351,468) |
(13,072,927) |
||
Loss per share (Note 14) |
||||
Basic and fully diluted |
(1.626) |
(1.704) |
||
Weighted average number of basic and fully diluted common shares |
13,132,745 |
7,671,941 |
Mogo Finance Technology Inc. |
||||
Consolidated Statement of Changes in Equity (Deficit) |
||||
For the Year Ended December 31, 2015 |
||||
Share capital |
Contributed surplus |
Deficit |
Total |
|
Balance, December 31, 2013 |
1,000 |
79,135 |
(32,526,187) |
(32,446,052) |
Loss and comprehensive loss |
- |
- |
(13,072,927) |
(13,072,927) |
Issuance of common shares |
4,842,960 |
- |
- |
4,842,960 |
Issuance of Class A preferred shares |
5,687,050 |
- |
- |
5,687,050 |
Issuance of Class B preferred shares |
29,307,421 |
- |
- |
29,307,421 |
Share issue costs common shares |
(153,794) |
- |
- |
(153,794) |
Share issue costs Class B preferred shares |
(915,634) |
- |
- |
(915,634) |
Stock based compensation |
- |
311,291 |
- |
311,291 |
Options exercised |
148,807 |
(148,557) |
- |
250 |
Issuance of warrants |
- |
219,070 |
- |
219,070 |
Balance, December 31, 2014 |
38,917,810 |
460,939 |
(45,599,114) |
(6,220,365) |
Loss and comprehensive loss |
- |
- |
(21,351,468) |
(21,351,468) |
Shares issued through initial public offering |
50,000,000 |
- |
- |
50,000,000 |
Shares issue cost associated with initial public offering |
(4,816,914) |
- |
- |
(4,816,914) |
Reduction of stated capital (Note 12) |
(40,144,081) |
40,144,081 |
- |
|
Issuance of Class B preferred shares |
1,226,271 |
- |
- |
1,226,271 |
Stock based compensation |
- |
1,188,313 |
- |
1,188,313 |
Warrants exercised |
131,402 |
(131,402) |
- |
- |
Balance, December 31, 2015 |
45,314,488 |
1,517,850 |
(26,806,501) |
20,025,837 |
Mogo Finance Technology Inc. |
||||||
Consolidated Statement of Cash Flows |
||||||
For the Year Ended December 31, 2015 |
||||||
2015 |
2014 |
|||||
Cash provided by (used for) the following activities |
||||||
Operating activities |
||||||
Loss and comprehensive loss |
(21,351,468) |
(13,072,927) |
||||
Depreciation and amortization |
1,693,195 |
1,404,083 |
||||
Amortization of deferred finance costs |
387,840 |
231,182 |
||||
Provision for loan losses |
14,510,165 |
7,600,387 |
||||
Stock based compensation expense |
1,188,313 |
311,291 |
||||
Derivative liability fair value adjustment |
(106,274) |
- |
||||
Unrealized foreign exchange loss |
1,140,770 |
493,213 |
||||
(2,537,459) |
(3,032,771) |
|||||
Changes in working capital accounts |
||||||
Increase in loans receivable |
(57,101,857) |
(19,306,921) |
||||
Investment tax credits |
(162,831) |
(624,663) |
||||
Prepaid expenses, deposits and other assets |
(16,920) |
(379,693) |
||||
Accounts payable and accruals |
1,431,246 |
283,334 |
||||
Other liabilities |
1,419,614 |
- |
||||
Net cash used in operating activities |
(56,968,207) |
(23,060,714) |
||||
Investing activities |
||||||
Purchases of property and equipment |
(4,088,856) |
(314,702) |
||||
Investment in software |
(4,640,579) |
(1,994,523) |
||||
Net cash used in investing activities |
(8,729,435) |
(2,309,225) |
||||
Financing activities |
||||||
Proceeds from Initial public offering |
50,000,000 |
- |
||||
Advances of debentures |
- |
6,732,684 |
||||
Repayment of debentures |
- |
(290,000) |
||||
Credit facility advanced |
28,007,015 |
13,627,620 |
||||
Credit facility financing costs |
(647,713) |
(908,617) |
||||
Common shares issuance costs |
(4,816,913) |
(153,794) |
||||
Options exercised |
- |
250 |
||||
Issuance of Warrants |
54,164 |
- |
||||
Proceeds from issuance of Class A preferred shares |
- |
30,000 |
||||
Proceeds from issuance of Class B preferred shares, |
1,226,271 |
28,479,455 |
||||
Net cash provided by financing activities |
73,822,824 |
47,517,598 |
||||
Increase in cash resources |
8,125,182 |
22,147,659 |
||||
Cash and cash equivalents, beginning of year |
23,598,672 |
1,451,013 |
||||
Cash and cash equivalents, end of year |
31,723,854 |
23,598,672 |
The Company's complete financial statements and notes are available at www.sedar.com.
Other Recent Company News |
|||||||||||||||||||
|