Mogo Inc. Q4 FY2024 earnings call

Key Points

• 2024 revenue grew 9% to $71.2 million, driven by 16% growth in wealth revenue and 21% in payments revenue.
• Adjusted EBITDA for the full year was $6.7 million, above the midpoint of increased guidance.
• Wealth assets under management grew 22% year-over-year to $428 million, with the wealth platform revenue reaching a $12 million annual run rate.
• Payments revenue grew 21% in 2024 to $8.6 million, and total payments volume processed increased 16% year-over-year to $11.5 billion.
• The company streamlined its business by exiting institutional brokerage operations and extended its credit facility to 2029 with lower interest rates.
• Discussed the opportunity in wealth due to market shifts and AI's role, detailing the intelligent investing solution including Moka, Mogo, and FinChat Pro.
• Greg Feller highlighted growth in the payments business, monetization of the investment portfolio, and updates to 2025 guidance.

In 2024, Mogo's revenue grew 9% to $71.2 million. Wealth segment: Assets under management grew 22% year-over-year to $428 million, with revenue reaching a $12 million annual run rate. Payments segment: Revenue grew 21% in 2024 to $8.6 million, and total payments volume processed increased 16% year-over-year to $11.5 billion. The company exited its institutional brokerage operations to focus on higher-margin areas.

Guidance Details

• Guiding for 20%-25% growth in wealth revenue for 2025 and mid to high teens growth in payments revenue for 2025.
• Adjusted EBITDA for 2025 is expected to be in the range of $5 million to $6 million.
• Subscription services revenue guidance adjusted due to exiting the institutional brokerage business, now expected to grow at a mid to high single-digit rate.
• Interest revenue from lending is expected to decrease 8%-10% in 2025 due to a more cautious lending approach driven by economic uncertainty, particularly U.S.-Canada tariff disputes.

• Uncertainty surrounding U.S.-Canada tariff disputes and their potential impact on the Canadian economy, affecting lending decisions.
• Volatility of the previously inherited institutional brokerage business, which was a distraction with negligible operating margin.
• Macro-economic uncertainties influencing business strategies, especially in the lending segment.

Q: Scott Buck asks about the timing of exiting the institutional brokerage business, why now is the right time, and if macro changes made the business less attractive.

A: Greg Feller responds that it was a legacy business not core to the strategy, volatile with negligible operating margin, and a distraction; now focusing on wealth and payments.

Q: Scott Buck inquires about potential acquisitions to scale wealth and payments.

A: Greg Feller says never say never, but not a priority now; wealth is highly differentiated with a unique value proposition.

Q: Scott Buck asks about pulling back in the lending business, whether it's proactive or due to credit quality issues.

A: Greg Feller states it's proactive, taking a conservative posture due to macro uncertainty, especially tariffs, and they could revisit the decision if conditions change.