Core Revenue up 80%, Users up 45% – Mogo is on Fire

Mogo (MOGO.Q) just released its Third-Quarter financials and there are some seriously impressive numbers in there.

The major takeaways from our perspective are core revenue, where it came from and the user growth;

  1. Core revenue increased by 80% to $15.1 million 
  2. Subscription & Services revenue grows 111% and now represents 51% of total revenue
  3. Member base rises 45% year over year to over 711,000

What Do These Numbers Mean?

Without trying to spell out the obvious, this means growth! Mogo has two major associations in the market; Pay-Day Lending (Short-Term) and Bitcoin. While it is clear that Mogo is much more than an app for purchasing Bitcoin, not a lot of investors know that it’s far more than a short term lending platform. Gross profit increased 12% to $9.6 million despite an exit from short-term lending. Core revenue, which excludes loan fees related to the legacy short-term loan product that the Company exited in the third quarter, increased by 80% to $15.1 million, up from $8.4 million in the comparable quarter in 2017, representing the sixth sequential quarter of accelerating core revenue growth.

This means Mogo is shedding it’s cocoon and evolving into a fully fledged futuristic financial services app.

Although this is great in principle, does it really work in the market?

People are confirming this, 221,000 in the last year to be precise. Thats no joke; continue and this rate Mogo will have over 1,000,000 users by fall 2019, and over 2,000,000 by the middle of 2021. And thats assuming growth stays constant, which we highly doubt given where Mogo’s revenue is coming from.

With Subscription & Services now equating to 51% of revenue and more than doubling in just one quarter, combined with the launch of all products in Nova Scotia and expanded MogoMortgage offering to consumers in ManitobaNew BrunswickPrince Edward Island and Newfoundland, Mogo is now available to more people than ever before which will accelerate adoption.


Reading Between the Lines

“Continued focus on building an ecosystem of best-in-class products delivered through a best-in-class mobile experience.” – Let’s look into this for a moment because there could be some clues hiding between the lines.

What exactly does “best-in-class products” mean? In the financial services business, Financial products refer to instruments that help you save, invest, get insurance or get a mortgage. These products are usually issued by banks, financial institutions, stock brokerages, insurance providers, credit card agencies and government sponsored entities. In relation to Mogo this could mean they are planning to bring all these services to the market with their focus on high quality customer experience and agnostic ability to serve their users the best rates and offers the market has.

There are a few other companies this reminds us of;

  • Revolut and PayPal for payments.
  • RobinHood, Acorns and Wealthsimple for investment.
  • Tangerine for banking,

Mogo already has the technology and users experience fine tuned and when it starts providing a new suite of best-in-class products to the market, the fin-tech world had better be ready.

To learn more about Mogo and fin-tech, check out our previous pieces:

Disclaimer: Mogo is a paid client of High Energy Trading, click here to read full disclosure.

High Energy Trading is not a licensed broker-dealer, market maker, investment advisor, or underwriter. All information that we provide is for informational purposes only and should not be construed as an offer or solicitation of an offer to buy or sell securities.

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