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Mogo Reports Third Quarter 2022 Financial Results, Q3 Revenue up 12% but Quarterly Net Loss Rises
Friday, November 18, 2022Company Profile | Follow Company
Vancouver, BC, November 18, 2022--(T-Net)--Mogo Inc. (NASDAQ:MOGO) (TSX:MOGO), a financial technology company, today announced its financial and operational results for the three and nine months ended September 30, 2022.
"In our 20-year corporate history, we have seen many challenging macroeconomic operating environments, and this is clearly another one," said David Feller, Mogo's Founder and CEO.
"In response to this, we are taking aggressive steps that while difficult, accelerate our path to profitability and make us a more efficient company. At the same time, we will also be looking to narrow our focus to only those products and areas where we see the greatest opportunities for profitable growth. It's clear that in today's market, prioritizing profitability over growth is the focus, and we are adjusting accordingly."
Key Financial Highlights for Q3 2022
"While our financial position remains solid, in light of the macroeconomic conditions we are acting decisively to adjust the balance between growth investment and profitability," said Greg Feller, President & CFO.
"Our initial actions are already generating material savings, and additional initiatives are expected to reduce cash operating expenses by an extra 25-35% in the coming quarters. We will continue investing prudently in initiatives that we believe will drive top-line expansion over the long-term, with a focus on our digital wealth solutions, which are profitable products in markets with long-term growth tailwinds. Subsequent to quarter end, we monetized our digital assets, Bitcoin and Ethereum. With our recent announcement to exit our MogoCrypto product, our sole remaining crypto exposure is comprised of our investment in Canada's first IIROC registered crypto dealer Coinsquare along with several smaller crypto-related investments in our investment portfolio."
Additional Business & Operations Highlights
Corporate Restructuring & Financial Outlook
As discussed in its Q2 2022 financial results, Mogo commenced a plan to reduce its expense base and increase its focus on profitability, with a goal of reaching positive Adjusted EBITDA by Q4 2023.
During Q3 2022, Mogo reduced its marketing and product development investments, reduced headcount and, subsequent to quarter end, began to wind down its current bitcoin product, MogoCrypto. In addition, the Company announced to members that it will be shutting down Moka in France in Q4 2022.
Beginning in Q4 2022, the Company is taking additional steps to accelerate its path to profitability. Specifically, the Company is implementing a broad restructuring plan that it expects will result in a further 25%-35% reduction in operating expenses over the next several quarters.
In addition to headcount reductions, the Company is evaluating other efficiency and product rationalization opportunities which may include eliminating unprofitable or sub-scale products. Once implemented, the Company expects these initiatives to have a 10%-15% impact on quarterly revenue in the near term.
Mogo previously provided revenue guidance for 2022 of $69 to $72 million. In light of the restructuring, the Company expects total revenues of $68 to $69 million for 2022.
About Mogo
Mogo Inc., one of Canada's leading financial technology companies, is empowering its more than 2 million members with simple digital solutions to help them get in control of their financial health while also making a positive impact with their money. Through the free Mogo app, consumers can access a digital spending account with Mogo Visa* Platinum Prepaid Card featuring automatic carbon offsetting, get free monthly credit score monitoring and ID fraud protection and access personal loans and mortgages.
Mogo's new MogoTrade app offers commission-free stock trading that helps users make a positive impact with every investment and together with Moka, Mogo's wholly-owned subsidiary bringing automated, fully-managed flat-fee investing to Canadians, forms the heart of Mogo's digital wealth platform.
Mogo's wholly-owned subsidiary, Carta Worldwide, also offers a digital payments platform that powers the next-generation card programs from innovative fintech companies in Europe, North America and APAC. To learn more, please visit mogo.ca or download the mobile app (iOS or Android ).
1 Includes cash and cash and cash equivalents of $35.3 million, investment portfolio of $13.8 million, and digital assets of $0.7 million along with a book value of investment in Coinsquare of $56.1 million as at September 30, 2022.
2 Non-IFRS measure. 2Non-IFRS measure.
Forward-Looking Statements This news release may contain "forward-looking statements" within the meaning of applicable securities legislation, including statements regarding the growth potential of Mogo's portfolio companies. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at the time of preparation, are inherently subject to significant business, economic and competitive uncertainties and contingencies, and may prove to be incorrect. 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 expand into new products and markets and its expectations for its future financial performance are subject to a number of conditions, many of which are outside of Mogo's control, including the receipt of any required regulatory approval. For a description of the risks associated with Mogo's business please refer to the "Risk Factors" section of Mogo's current annual information form, which is available at www.sedar.com and www.sec.gov . 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. [ MORE ] |
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