Mogo(US:MOGO)2024-08-09 19:50Financial Data and Key Metrics Changes - Revenue increased by 10% year-over-year to $17.6 million [3][17] - Positive cash flow from operations of $0.5 million, compared to negative $1.8 million in Q2 of the previous year [18][20] - Adjusted EBITDA was $1.4 million, down modestly year-over-year but up 40% sequentially from Q1 [18] Business Line Data and Key Metrics Changes - Payments business, Carta, saw a 12% year-over-year increase in payment volume to $2.8 billion, with an annual run rate exceeding $10 billion [16] - Wealth business showed year-over-year growth, with significant product improvements and 21 updates released in the last quarter [8][19] - Average Revenue Per User (ARPU) for wealth products is $180, compared to an overall ARPU of $25 across all products [19][31] Market Data and Key Metrics Changes - The wealth industry is estimated at over $6 trillion in investable assets, with $2 trillion currently in mutual funds, indicating a significant market opportunity [4][6] - 75% of Canadians nearing retirement have saved less than $100,000, highlighting the need for better investment solutions [6] Company Strategy and Development Direction - The company aims to disrupt the wealth space in Canada by offering a fully managed solution alongside a self-directed investing app [7][15] - Strategic partnerships with Postmedia and Tom Lee of Fundstrat to enhance market presence and educate consumers on wealth building [14][28] - Focus on product improvements and customer experience to drive growth, with a goal of increasing word-of-mouth referrals [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the payments business and the long-term potential of the wealth business [24][28] - The company expects subscription services revenue to grow in the mid-teens for the full year and has introduced adjusted EBITDA guidance of $5 million to $6 million [21] - Anticipated savings from potential future interest rate reductions on the credit facility, with each 1% decrease equating to $0.5 million in cash savings [37] Other Important Information - The company ended the quarter with cash and total investments of approximately $41 million [20] - The wealth business is positioned as a core part of the company's strategy, with a focus on behavioral science to improve investment habits [7][10] Q&A Session Summary Question: Thoughts on cash flow moving forward - Management highlighted the importance of being cash flow positive on a consolidated basis and the ability to self-fund investments in the loan book [22][23] Question: Strategy for wealth and payments business - Management expects continued growth in the payments business and emphasized the importance of product improvements in the wealth business [24][26] Question: State of consumer credit and lending business outlook - The lending business is currently flat, with a focus on prioritizing wealth and payments, but management sees long-term value in lending [34][35] Question: Economics of the partnership with Tom Lee - The partnership is a marketing collaboration with no equity involved, and costs will be reflected in marketing expenses [36] Question: Impact of declining interest rates on expenses - Management indicated that a 1% decrease in interest rates could lead to $0.5 million in cash savings [37]