Q1 2024 Mogo Inc Earnings Call

Operator: Good afternoon, ladies and gentlemen, and welcome to the Mogo Q1 2024 Financial Results Conference Call. At this time, all lines are in listen only mode.

Good afternoon, ladies and gentlemen, and welcome to the mogul Q1 2024 financial results Conference call. At this time all lines are in a listen only mode. Following the presentation. We will conduct a question and answer session. If at any time. During this call you require immediate assistance piece breakfast.

Operator: Zero for the operator is going to be recorded on Thursday may nine 2024, I would now like to turn the conference over to Quake Armitage Investor Relations. Please go ahead.

Unnamed Speaker: Thank you, operator, and good afternoon, everyone. Thanks for joining us today. Just a few notes before we get started: today's call will contain forward-looking statements that are based on current assumptions and subject to risks and uncertainties that could cause actual results to differ materially from those projected. The company undertakes no obligation to update these statements.

Speaker Change: Thank you operator, and good afternoon, everyone. Thanks for joining US today, just a few notes before we get started today's call will contain forward looking statements that are based on current assumptions and subject to risks and uncertainties that could cause actual results to differ materially from those projected the company undertakes no obligation to update these statements except as required by law.

Unnamed Speaker: More information about the risks and uncertainties are included in moguls Q1 filings as well as periodic filings with regulators you cannot in the United States, which you'll find on SEDAR Edgar and you can access through the investor.

Unnamed Speaker: The Bogo Investor Relations website as well secondly, today's session will include several adjusted financial measures such as non or non <unk> measures excuse me.

Unnamed Speaker: Please consider these as a supplement to and not a substitute for the measures you'll see that we've included reconciliations to those in the press release and in the Investor deck and with that I'll turn it over to Dave color to get Us started.

Unnamed Speaker: Yes.

Speaker Change: Thanks, Greg.

Unnamed Speaker: Good afternoon, and welcome to Mogo's first quarter fiscal 2024 results call. I'm joined today by Greg Feller, our president and CFO.

Speaker Change: Afternoon, and welcome to <unk> first quarter fiscal 2024 results call I'm joined today by Greg <unk>, our president and CFO.

David Marshall Feller: I'll cover some of the key operating highlights, and Greg will dig deeper on the financial results and outlays. It was a solid start to 2024 for Mogo, both from a financial perspective and from a product perspective. Q1 revenue was a quarterly record of $17.9 million.

Gregory Dean Feller: I'll cover some of the key operating highlights and Greg will dig deeper on the financial results and outlook.

David Marshall Feller: It was a solid start to 2024 for MOGO, both from a financial perspective, and a product perspective.

David Marshall Feller: <unk> revenue was a quarterly record of $17 9 million, we exceeded $400 million.

David Marshall Feller: We exceeded $400 million in AUM, and we continue to generate positive adjusted EBITDA while we invest in our products and marketing to achieve long-term growth in our business. Wealth, payments, and crypto form the key pillars of our business today. I'll walk you through wealth, and Greg will talk about payments and crypto.

Greg: And we continued to generate positive adjusted EBITDA, while we invest in our products and marketing to achieve long term growth in our business.

David Marshall Feller: Wealth payments in crypto form the key pillars of our business today.

David Marshall Feller: I'll walk through wealth, and Greg will talk about payments and crypto.

David Marshall Feller: Our excitement around the long-term potential in wealth starts with the overall market size and the opportunity for innovation and disruption given the dominance of the big banks. The Canadian wealth market is measured in trillions and is expected to grow from over $6 trillion today to over $11 trillion by the end of 2032. Within this, there is an estimated $2 trillion in high-fee mutual funds alone, along with annual contributions to RSPs and TFSAs of around $100 billion a year.

Greg: Our excitement around the long term potential and well start with the overall market size and the opportunity for innovation and disruption given the dominance of the big banks, the Canadian wealth market as measured in the trillions and is expected to grow from over six trillion today to over 11 trillion by the end of 2032.

David Marshall Feller: Within this there was an estimated two trillion in high fee mutual funds alone along with annual contributions to RSP and T of assays of around $100 billion a year.

David Marshall Feller: The market today is dominated by the big banks that offer everything from self-directed trading to mutual funds to private wealth management, yet the reality is that most investors struggle to make adequate returns. In fact, studies show that the average investor dramatically underperforms the S&P 500, let alone anywhere close to the kinds of returns that great investors like Warren Buffett have... As Buffett says, the reality is Wall Street makes more money by getting you to gamble than invest. What's more, they offer products like mutual funds that not only dramatically underperform but charge very high fees. A killer combo indeed.

David Marshall Feller: The market today is dominated by the big banks that offer everything from self directed trading to mutual funds to private wealth managers yet the reality is most investors struggled to make adequate returns in.

David Marshall Feller: <unk> study showed that the average investor dramatically underperformed the S&P 500, let alone anywhere close to the kinds of returns of great investors like Warren Buffett of produce.

David Marshall Feller: As Buffett says the reality is wall Street makes more money by getting you to Gamble then invest.

David Marshall Feller: What's more the offer of products like mutual funds that not only dramatically underperformed the charge very high fees that killer combo.

David Marshall Feller: We firmly believe that the future of investing will be dominated by products and brands that actually deliver the best results, not by those that simply have distribution. The reason for this is simple. The impact of better performance is staggering. This graph showcases just how dramatic the difference can be. Compare the average return to the S&P 500 and then to a Buffett level return. Right now, the majority of investors are dramatically underperforming the S&P 500 and literally leaving millions on the table. At Mogo, we're obsessed with the performance of our members, and the reality is there's zero reason investors shouldn't be at least matching the S&P. And for some, they even have the opportunity to beat it.

David Marshall Feller: We firmly believe that the future of investing will be dominated by products and brands that actually deliver the best results not by those that simply have distribution.

David Marshall Feller: The reason for this is simple the impact of better performance is staggering. This graph showcases just how dramatic the difference can be.

David Marshall Feller: Compare the average return to the S&P 500, and then to a buffet level return right now the majority of investors are dramatically underperformed, the S&P 500, and literally leaving millions on the table.

David Marshall Feller: At MOGO, we're obsessed with the performance of our members and the reality is there's zero reason investors shouldn't be at least matching the S&P and for some they even have the opportunities to beat it.

David Marshall Feller: An important point to highlight here is the magnitude of the impact on investors' wealth building. The difference between 4% and 10% over a 50-year time horizon is more than 16X. And as you can see, the numbers are almost incomprehensible. It's important to note that our goal isn't to build the biggest wealth building platform in Canada; it's to build the most effective, i.e. The one that really delivers the best returns for investors.

David Marshall Feller: An important point to highlight here is the magnitude of the impact on investor's wealth building the difference between 4% and 10% over a 50 year time horizon is more than 16 X and as you can see at the buffet level return the numbers are almost incomprehensible.

David Marshall Feller: It's important to note that our goal isn't to build the biggest wealth building platform in Canada is to build the most effective I E. The one that really delivers the best returns for investors again, we believe the future of investing won't be about the features you have for the tools you have it'll be primarily if not exclusively based on the actual performance of the investors using it.

David Marshall Feller: Again, we believe the future of investing won't be about the features you have or the tools you have. It will be primarily, if not exclusively, based on the actual performance of the investors using them. We think that both a fully managed solution along with a self-directed solution will continue to be the way people choose to invest and build wealth. Because of that, we offer both a fully managed solution along with a self-directed investing app.

David Marshall Feller: That's our focus.

David Marshall Feller: We think that both a fully managed solution along with the self directed solution will continue to be the way people choose to invest and build wealth.

David Marshall Feller: With that we offer both a fully managed solution along with the self directed investing are we.

David Marshall Feller: We believe most investors will primarily rely on a managed solution, as most don't have the experience and desire to actively manage their investing, not to mention most would be way better off this way. Having said that, the excitement and potential will always attract investors to self-directed investing, which when done right, can be a very effective way of generating great returns and be a good complement to a managed solution. Given our focus is also on the next generation of investors, it's not all about the money.

David Marshall Feller: We believe most investors will primarily rely on a managed solution as most don't have the experience and desire to actively manage their investing not to mention most would be way better off this way.

David Marshall Feller: <unk> said that the excitement of potential will always attract investors to self directed and when done right can be a very effective way of generating great returns and be a good complement to a managed solution.

David Marshall Feller: Our focus is also on the next generation of investors is not all about the money. We believe that the products that will win are the ones that not only help people achieve important life goals financial freedom, but they do it in a way. They can also have a meaningful positive impact in the world. We believe we are the only investing platform in the world taken this unique approach to wealth building today.

David Marshall Feller: We believe that the products that will win are the ones that not only help people achieve important life goals like financial freedom, but that do it in a way that can also have a meaningful positive impact on the world.

David Marshall Feller: We believe we are the only investing platform in the world taking this unique approach to wealth building today. We've come a long way over the last few years with Mocha, as we evolved it from what was primarily a short-term savings app to a best-in-class managed investing app. What really sets Mocha apart is the actual performance and the impact that this has on wealth building for investors. In terms of performance, the strategy employee has a big impact on your returns, i.e. Stocks, bonds, etc.

David Marshall Feller: We've come a long way over the last few years with Moca as we evolved it from what was primarily a short term savings app to a best in class managed investing at what really sets Moca part is the actual performance and the impact. This has on wealth building for investors in terms of performance. This strategy employee has a big impact any returns.

David Marshall Feller: I E stocks bonds et cetera, but what most people don't realize is it's the behavioral element even in passive and manage the best thing that really drives the big impact.

David Marshall Feller: But what most people don't realize is it's the behavioral element, even in passive and managed investing, that really drives the big impact. The natural tendency for investors is to want to sell when the market is down and buy when it is up. But, as we all know, trying to time the market is a losing game and ultimately leads to poor returns. So even if you pick the right strategy, like the S&P 500, you won't achieve good returns unless you address the behavioral issues.

David Marshall Feller: The natural tendency for investors is to want to sell when the market is down and buy when it is up but as we all know trying to time the market is a losing game and ultimately leads to poor returns. So even if you pick the right strategy like the S&P 500, you won't achieve good returns unless you address the behavioral issues ultimately the combination of the right strategy and right behavioral edge producers.

David Marshall Feller: Ultimately, the combination of the right strategy and the right behavioral edge produces radically better outcomes. We see this every day with our customers; whether they switch from self-directed investing, mutual funds, or even wealth managers, getting them on track to five times, ten times, even more in terms of wealth is not uncommon. While others have gamified trading, we are focused on gamifying serious wealth building to drive the right behaviors that maximize the outcome.

David Marshall Feller: Radically better outcomes.

David Marshall Feller: We see this every day with our customers whether they switch from self directed investing mutual funds or even wealth managers getting them on track two five times 10 times, even more in terms of the well is not uncommon.

David Marshall Feller: While others have gamify trading we are focus on game of flying serious wealth building to drive the right behaviors that maximize the outcome everyday we see our users engage in features that motivate them to not only continue there with their investing but to increase their contributions as they see how much money they can get on track for.

David Marshall Feller: Every day, we see our users engage in features that motivate them to not only continue with their investing but to increase their contributions as they see how much money they can get on track. Although you might think this would be common, the fact is most investors today have no idea what the returns are, have no idea what they are on track to, or even what they would like to achieve in the long run.

David Marshall Feller: Although you might think this would be calm and the fact is most investors today have no idea. What the returns are have no idea what they are on track to or even what they would like to achieve in the long run we make it easy for them to not only invest but to see exactly what they were on track to buy win and this helps drive the right behaviors to maximize the outcome.

David Marshall Feller: We make it easy for them to not only invest but to see exactly what they are on track to by when, and this helps drive the right behaviors to maximize the outcome. Some of the new features we are working on include a leaderboard that gamifies the wealth building experience. At MoCA today, we have users who are actually on track to over $70 million, and just to get into the top 100 on our leaderboard requires being on track to about $4 million.

David Marshall Feller: Some of the new features we are working on including a leader board that game of Fives wealth building experience at <unk> today, we have users who are actually on track to over $70 million and just to get into the top 100 on a leader board requires being on track to about $4 million.

David Marshall Feller: As we continue to improve the experience and our value proposition, we see opportunities to increase our monthly subscription fee and still deliver great value while improving our economics, which is why we're going to be offering a new $15 a month tier.

David Marshall Feller: As we continue to improve the experience and our value proposition, we see opportunities to increase our monthly subscription fee and still deliver great value, while improving our economics, which is why we're going to be offering a new $15 a month here.

David Marshall Feller: Mogo is our self-directed investing app, and in Q1, we launched our biggest feature yet, Buffett Mode. Like Mocha, the key to successful investing comes down to the right behavior and temperament. As Warren Buffett says, successful investing is more about temperament than intellect. While every other trading app is primarily designed to drive trading, as that's what drives revenue, we believe Mogo is the only self-directed investing app that is designed to actually get investors to trade less and focus more on long-term value investing.

David Marshall Feller: MOGO is our self directed investing out and in Q1, we launched our biggest feature yet buffon mode like Moca. The key to successful investing comes down to the right behavior and temperament as Warren Buffett says successful investing is more about temperament and intellect. While every other trading app are primarily designed to drive trading as that's what they are dry.

David Marshall Feller: <unk> revenue, we believe mogul was the only self directed investing out that is designed to actually get investors to trade less and focus more on long term value investing the reality is most self directed investors dramatically underperformed. The S&P 500, and most have no idea. We've designed an experience that is based on the investing principles of Warren Buffett Warren.

David Marshall Feller: The reality is most self-directed investors dramatically underperform the S&P 500, and most have no idea why. We've designed an experience that is based on the investing principles of Warren Buffett. Warren started with $114 and turned it into a fortune of over $100 billion.

David Marshall Feller: Started with $114 and turned it into a fortunate over $100 billion.

Gregory Dean Feller: The fact is, there will be investors who today are in their 20s and will become billionaires by investing based on the principles of value investing and its greatest practitioner, Warren Buffett. With a simple monthly subscription fee, we are solely focused on helping our users become more successful investors, not on getting them to trade. This positioning and business model sets us apart from all the other self-directed training apps in Canada. One of our unique features is how we help investors minimize gambling and speculating, which is one of the primary reasons for underperformance.

David Marshall Feller: The fact is there will be investors, who today are in their twenties and will become billionaires by investing based on the principle of value investing and its greatest practitioner Warren Buffett.

Gregory Dean Feller: With a simple monthly subscription fee, we are solely focused on helping our users become more successful investors not on getting them to trade this positioning and business model sets us apart from all the other self directed trading apps in Canada. One of our unique features is how we help investors minimize gambling in speculating, which is one of the primary reasons for underperformance another.

Gregory Dean Feller: Another big advantage we have over the existing incumbents is our smaller, hyper-focused team. We believe that small teams build better products, but that also gives us a cost advantage in terms of the ability to be profitable on a fraction of the users of a bigger company. We're still in the early days with both of these products, and we continue to work on increasing our product velocity in terms of improvements to the experience that help our members improve their performance.

Gregory Dean Feller: Big advantage, we have over the existing incumbents as our smaller hyperfocus team, we believe that small teams build better products, but that also gives us a cost advantage in terms of the ability to be profitable on a fraction of the users of the bigger companies were still in the early days with both of these products and we continue to work on increasing our product velocity in terms of improvements to the.

Gregory Dean Feller: Against that help our members improve their performance. This is what guides our roadmap does this help the user improved their performance as an investor again, you would think this would be common but I can assure you it's not as Warren Buffett reminds us with investing you can be at you can't be active every day, but you can learn everyday. This is also a core focus with our experienced as we.

Gregory Dean Feller: This is what guides our roadmap. Does this help the user improve their performance as an investor? Again, you would think this would be common, but I can assure you it's not. As Warren Buffett reminds us with investing, you can't be active every day, but you can learn every day. This is also a core focus of our experience as we develop more and more learning features. We believe that our investment in our products will continue to be the primary driver of growth while also continuing to increase our marketing activities to drive increased awareness and what we see as a more premium positioning in the marketplace. With that, I'll turn it over to Greg.

Gregory Dean Feller: More and more learning features that drive more engagement and better outcomes. We believe that our investment in our products will continue to be the primary driver of growth. While also continue to increase our marketing activities to drive increased awareness and what we see as a more premium positioning in the marketplace with that I'll turn it over to Greg Greg.

Gregory Dean Feller: Thanks, Dave, and good afternoon. Let me first discuss our two other pillars, beginning with CARTA, our payments business. Carta had another solid quarter in Q1, as reflected by an 18% year over year increase in volume to $2.6 billion, putting this business on an annual run rate north of $10 billion. We continue to be very excited about Carta and its long-term growth prospects. Another major pillar of Mogo is our crypto-related investments, which collectively today represent just under 50% of our market cap.

Greg: Thanks, Dave and good afternoon, let me first discuss our two other pillars, beginning with Carter our payments business.

Gregory Dean Feller: <unk> had another solid quarter in Q1 as reflected by an 18% year over year increase in volume to $2 6 billion, putting this business on an annual run rate north of $10 billion. We continue to be very excited about card and its long term growth prospects.

Gregory Dean Feller: Another major pillar mogul was our crypto related investments, which collectively today represent just under 50% of our market cap largest diseases are 87 million shares and <unk> <unk>. The only fully regulated crypto exchange of Canada recently, one Phi announced nomination of three new directors to the board as a cooperation agreement with Chaos capital we view the agree.

Gregory Dean Feller: The largest of these is our 87 million shares in TSX-listed Wondify, the only fully regulated crypto exchange in Canada. Recently, Wondify announced the nomination of three new directors to the board as part of a cooperation agreement with Chaos Capital.

Gregory Dean Feller: We view the agreement as a shareholder-friendly step that will enable Wondify to begin to fully realize the growth potential of its position as the only fully regulated crypto exchange in Canada. We'd also like to congratulate the 1Fi team on the recent Q1 results, which included a 60% increase in assets under custody to $1.6 billion, record trading volumes of $1.1 billion, and ending the quarter in a strong financial position with cash and digital assets of $54 million.

Gregory Dean Feller: As the shareholder friendly step that will enable quantified to begin to fully realize the growth potential of its position as the only fully rate regulated crypto exchange of Canada.

Gregory Dean Feller: We'd also like to congratulate the one <unk> team on the recent Q1 results, which included 6% increase in assets under custody to $1 6 billion record trading volumes of $1 1 billion and ending the quarter in a strong financial position with cash and digital assets at $54 million.

Gregory Dean Feller: Turning to Mogo's financials, it was a solid first quarter to start out 2024, generate record quarterly revenue, and continue to deliver positive adjusted EBITDA. Q1 revenue was a quarterly record $17.9 million, up 13% over the prior year, and showed accelerating growth for the second consecutive quarter. We achieved this without significant marketing spend to date.

Gregory Dean Feller: Turning to mobile financials, there was a solid first quarter to start out 2024 generated record quarterly revenue will continue to deliver positive adjusted EBITDA Q1 revenue was a quarterly record $17 9 million up 13% over the prior year and showed accelerating growth for the second consecutive quarter. We achieved this without significant marketing spend today.

Gregory Dean Feller: Eight <unk>.

Gregory Dean Feller: As we've seen in the last quarter, we are increasing our marketing initiatives for our wealth platform.

Gregory Dean Feller: However, as we stated in the last quarter, we are increasing our marketing initiatives for our wealth platform. Over the past two years, we've been highly focused on accelerating profitability, despite an increase in growth-related spend in Q1. Total OPEX is down almost 50% from the beginning of 2022.

Gregory Dean Feller: Over the past two years, we've been highly focused on accelerating profitability. Despite an increase in growth related spend in Q1 total opex is down almost 50% from the beginning of 'twenty. Two this quarter, we generated 13% year over year revenue growth was holding opex relatively flat.

Gregory Dean Feller: This quarter, we generated 13% year-over-year revenue growth while holding OPEX relatively flat. Although we continue to operate with an efficiency mindset, our focus again is on increasing revenue growth and will be guided by the rule of 40. And therefore, we require an expectation of increased growth to offset any decrease in margin. Q1 adjusted EBITDA remained positive at $1 million, similar to the same period last year. Importantly, we've seen continued positive cash flow from operations before discretionary investment and loan book. This metric was positive for the sixth consecutive quarter, reaching $1.8 million in Q1-24. Lastly, the adjusted net loss for the quarter was $4 million, roughly flat with the prior year period of $3.9 million.

Gregory Dean Feller: Although we continue to operate the efficiency mindset. Our focus again is on increasing revenue growth and we will be guided by the rule of 40, and therefore, we require expectation of increased growth to offset any decrease in margins.

Gregory Dean Feller: Q1, adjusted EBITDA remained positive at 1 million similar to the same period last year importantly, we've seen continued positive cash flow from operations before discretionary investment and loan book This metric with positive for the sixth consecutive quarter, reaching $1 8 million in Q1 'twenty. Four lastly, adjusted net loss for the quarter was $4 million.

Gregory Dean Feller: Roughly flat with the prior year period at $3 9 million.

Gregory Dean Feller: Dave talked about the relaunch of our two wealth products, Mogo and Mocha, and the significant value-enhancing elements added to these products. These changes will help our users invest and build wealth more intelligently. They also create a significant opportunity for Mogo to increase our RPU while maintaining a compelling value proposition for our users. With the new pricing tiers of $15 a month for each of Mocha and Mogo, we have a significant subscription-driven opportunity of up to $360 per year per user for those members that subscribe to both products.

Gregory Dean Feller: Dave talked about the relaunch of our two wealth products mogul moca and the significant value enhancing elements to these products.

Gregory Dean Feller: These changes will help our users invest and build wealth more intelligently. They also create a significant opportunity for mobile to increase our roku, while maintaining a compelling value proposition for our users with the new pricing tiers of $15 a month for each of Moca and MOGO, we have a significant subscription driven opportunity of up to $360 per year per year.

Gregory Dean Feller: User for those members that subscribe to both products. This represents a huge opportunity to expand our subscription revenue over time.

Gregory Dean Feller: This represents a huge opportunity to expand our subscription revenue over time. With these new monetization opportunities from WEALTH, we believe there is a significant potential to leverage our existing 2.1 million member base to drive increased monetization and, therefore, overall ARPU above our current consumer ARPU of approximately $27 a year. Given the limited penetration of these products today within our member base, our primary focus will be increased monetization of this member base over growth in the member base itself.

Gregory Dean Feller: With these new monetization opportunities from wealth, we believe it has significant potential to leverage our existing $2 1 million member base to drive increased monetization and therefore overall <unk> above our current consumer our pool of approximately $27 a year.

Gregory Dean Feller: Given the limited penetration of these products today within our member base. Our primary focus will be increased monetization of this member base over growth of the member base itself.

Gregory Dean Feller: Lastly, we ended the quarter in a solid financial position with cash and total investments of roughly $53 million. This included combined cash and restricted cash of $13.8 million, marketable securities of $28 million, and an investment portfolio of $11.6 million. We expect to see monetization opportunities from these investments over the next 12 months. Uniquely, Mogo investors continue to have meaningful leverage on the crypto sector through these investments. In summary, we are very excited about our new wealth products and the continued growth of our payments business and remain focused on driving increased subscription services revenue growth to the mid-teens for the full year.

Gregory Dean Feller: Lastly, we ended the quarter in a solid financial position with cash and total investments of roughly $53 million. This included combined cash and restricted cash of $13 8 million marketable securities of $28 million and investment portfolio of $11 $6 million, we expect to see monetization opportunities from these investments over the next 12.

Gregory Dean Feller: Months you.

Gregory Dean Feller: Uniquely mogul investors continue to have a meaningful leverage to the crypto sector through these investments.

Gregory Dean Feller: In summary, we are very excited about our new wealth product and the continued growth of our payments business and remain focused on driving increased subscription services revenue growth to the mid teens for the full year we.

Gregory Dean Feller: We will also continue to focus on increasing our combined subscription services revenue growth and adjusted EBITDA margin towards our target of 40. At 19% for Q1 versus 14.5% last quarter and negative 5% in the year-earlier period, we believe we are well on our way. With that, we will now open the call to questions, Operator.

Gregory Dean Feller: We will also continue to focus on increasing our combined subscription and services revenue growth and adjusted EBITDA margin towards our target rule of 40, and 19% for Q1 versus 14, 5% last quarter and negative 5% in the year earlier period. We believe we are well on our way.

Speaker Change: With that we will now open the call to questions operator.

Operator: Thank you, and ladies and gentlemen, we will now begin the question-and-answer session. If you would like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press the star followed by the number two. One moment, please for your first question. Your first question comes from the line of Scott Buck with H. C. Wainwright. Please go ahead.

Speaker Change: Thank you and ladies and gentlemen, we will now begin the question and answer session. If you would like to ask question. During this time simply press star followed by the number one I guess telephone keypad. If you would like to win by your question. Please press the star followed by that of a break you what mom and thank you for your first question.

Scott Christian Buck: Your first question comes from the line of Scott <unk> with each.

Scott Christian Buck: Wainwright. Please go ahead.

Scott Christian Buck: Good afternoon guys, thanks for taking my questions. I'm curious if you guys have received any early feedback on the Mocha and Mogo app relaunches, and then what's an appropriate timeline for investors to see some, you know, I guess meaningful growth or progress on that front?

Scott Christian Buck: Hi, Good afternoon, guys. Thanks for taking my questions.

Scott Christian Buck: Curious if you guys have received any early feedback on the Moca and logo App relaunch is and then what's an appropriate timeline for investors to see some.

Scott Christian Buck: I guess meaningful growth or progress on that front.

David Marshall Feller: So it's Dave. Maybe I'll just talk about the first piece here. Yeah, I mean, obviously we continue to stay close to our users and our customers, constantly seeking feedback. We also recently did a new, what we call, net promoter score survey, which generally judges the likelihood that people would be promoters versus detractors. Generally, a score above zero is considered good, and the higher you get, the better it is.

Scott Christian Buck: So it's Dave maybe I will just talk about the first piece here yeah.

David Marshall Feller: You know obviously, we continue to stay close to our users and our customers constantly seeking feedback.

David Marshall Feller: We also recently did.

David Marshall Feller: New.

David Marshall Feller: What we call net promoter score survey, which generally judges the the likelihood that people would be promoters versus detractors.

David Marshall Feller: Generally a score above zero is considered good and and the higher you get the better it is or our most recent net promoter score was north of 40, which was a dramatic improvement from the previous one.

David Marshall Feller: Our most recent net promoter score was north of 40, which was a dramatic improvement from the previous one before we did basically the rebranding and the new features for Mocha. So, we're very pleased with what we saw in the net promoter score. And then we continue to be pleased with just generally the behaviors that we're seeing with users signing up, especially those that are setting up these long-term wealth goals. And as I mentioned in my commentary, one of the behaviors that we're really looking for is how do people actually interact with the app. How often are they coming back to it?

David Marshall Feller: Before we did the.

David Marshall Feller: Basically the rebranding and the new features from OCA. So very pleased with what we saw in the net promoter score and then we continue to be pleased with just generally the behaviors that we're seeing with users signing up especially those that are setting up these long term wealth goals and as I mentioned in my commentary.

David Marshall Feller: You know one of the behaviors that were really looking for is.

David Marshall Feller: How do people actually interact with the App, how often are they coming back to it and instead of this just being a passive investing strategy. Some some for example look at something like this says it managed solution like Moca as being something like I said, it and forget it whereas our approaches is very different we're actually looking for engage.

David Marshall Feller: And instead of this just being a passive investing strategy, some, for example, look at something like this as a managed solution like Mocha's being something like a set it and forget it, whereas our approach is very different. We're actually looking for engagement from our users because the engagement is actually what drives, we think, that long-term success versus it being in the background; they don't know what's going on. And that also ultimately drives people to increase what their contributions are to actually get on even a better path to financial freedom.

David Marshall Feller: <unk> from our users because the engagement is actually what drives.

David Marshall Feller: We think that long term success versus it's in the background is they don't know what's going on.

David Marshall Feller: And that also ultimately draw.

David Marshall Feller: Drives people to increase what their contributions are to actually get on a even a better path to financial freedom. So we've got a lot of people that start out initially.

David Marshall Feller: So we've got a lot of people that start out initially set up where they're on a path to, let's say, just over a million dollars. We have one example where somebody initially contributed around $25 a week, put them on a path to just over a million, and has now consistently increased that contribution because of the experience itself, including things like our wealth calculator, where every time you actually engage with it, it shows you how much more money you'd be on track for. And this user has gone from being on track to a million to now being on track to $10 million.

David Marshall Feller: Set up where they are on a path to let's say just over a million dollars.

David Marshall Feller: We have one example, where somebody started initially contributing around $25 a week put them on a path to just over $1 million.

David Marshall Feller: And has now consistently increase that contribution.

David Marshall Feller: Because of the experience itself, including things like our.

David Marshall Feller: Wealth calculator, where every time you actually engage with it. It shows you how much more money you'd be on track for.

David Marshall Feller: This user has gone from being on track to a million to now being on track $2 million to $10 million. So again, it kind of just showcases the importance of that engagement.

David Marshall Feller: So, again, it kind of just showcases the importance of that engagement. And so, another kind of really good sign that we're seeing, which is also, by the way, why we're also, as we continue to improve the value proposition, looking at not only increasing the base price but also adding different tiers. And that obviously is something that I just spoke about as well, and that obviously reflects our ongoing confidence in the value proposition based on the feedback from the user.

David Marshall Feller: And so just another kind of really good sign that we're seeing which is also by the way why we've also as we continue to improve the value proposition. We're also looking at.

David Marshall Feller: Not only increasing the base price, but also adding different tiers.

David Marshall Feller: And that obviously, you know something that I, just spoke about as well and that obviously reflects our ongoing confidence in the value proposition based on the feedback of the users.

Gregory Dean Feller: Great, David, I appreciate that. Greg, I think you had some comments in the earnings release regarding potential monetization of some of the assets in the investment portfolio. Any additional color there you can share with us?

Speaker Change: Hey, David I appreciate that.

Gregory Dean Feller: Greg I think you had some comments in the earnings release regarding potential monetization of some of the assets in the investment portfolio.

Greg: Any additional color there you can share with us.

Gregory Dean Feller: So yeah, what I would say is, look, a big chunk of the total portfolio is in what we call marketable securities, so obviously publicly traded shares. And we also have a number of meaningful private investments that we believe we will see opportunities for over the next 12 months. So I think a combination of some of the public equities we hold, as well as some of the private, gives us confidence that we'll be able to see some monetizations out of that portfolio here over the next 12 months.

Greg: So yeah, what I would say is look I'm, a big chunk of the of the total portfolio are in what's.

Gregory Dean Feller: Marketable securities So obviously.

Gregory Dean Feller: Publicly traded shares and we also have a number of meaningful private investments.

Gregory Dean Feller: That we believe we will see some opportunities over the next 12 months. So I think a combination of some of the public.

Gregory Dean Feller: <unk>, we hold as well as the private we it gives us confidence that we.

Gregory Dean Feller: We will be able to see some monetization is out of that portfolio here over the next 12 months.

Scott Christian Buck: Okay, perfect. Appreciate that. And then, last one, I just want to ask you about provisioning real quick.

Speaker Change: Okay perfect I appreciate that and then last one I just wanted to ask you about provisioning real quick it looks like there was a meaningful tick up from.

Gregory Dean Feller: It looks like there was a meaningful tick up from the fourth quarter. Just curious if that, you know, reflects something you're seeing in consumer credit, or more just a function of, I don't know, the portfolio, the loan book size, and accounting.

Gregory Dean Feller: From the fourth quarter, just curious if that reflects something youre seeing in consumer credits or more just a function of.

Speaker Change: I don't know.

Gregory Dean Feller: The portfolio the loan book size and accounting.

Gregory Dean Feller: Yeah, so our credit performance continues to be within the range that we're looking for from the loan book. So, no red flags there.

Speaker Change: Yeah. So.

Gregory Dean Feller: Our credit performance continues to be within the range that we're looking for from the loan book So no no flags there.

Gregory Dean Feller: You know, from an accounting perspective, the loan loss provision is driven by a number of factors, including just the overall origination amount. The overall origination amount in Q1 of this quarter versus Q1 of last quarter was up about 5x. So that by itself would account for, you know, probably the lion's share of the increase. And then there are some other factors in their IFRS provision that we have to take into account, including unemployment rates and things like that that impact it. But I would expect that the provision on an absolute level actually comes down over the next couple of quarters. So there's some seasonality there as well, but nothing that we're concerned about. It was a perfect day.

Gregory Dean Feller: From an accounting perspective, the loan loss provision is driven by a number of factors.

Gregory Dean Feller: Including just.

Gregory Dean Feller: Just the overall origination amount.

Gregory Dean Feller: The overall origination amount in Q1 of this quarter versus Q1 of last quarter was up about five X so that by itself.

Gregory Dean Feller: What account for probably the lion's share of the increase and then Theres. Some other factors in there I am I FRS provision that we have to take into account, including unemployment rates and things like that that impact it.

Gregory Dean Feller: But I would expect that that provision.

Gregory Dean Feller: On an absolute level actually comes down over the next couple of quarters. So there is some seasonality there as well.

Gregory Dean Feller: But nothing that we're concerned about.

Scott Christian Buck: Perfect. I appreciate the time, guys. Thank you very much.

Speaker Change: Perfect I appreciate the time guys. Thank you very much.

Speaker Change: Thanks Scott.

Operator: Once again, if you would like to ask a question, just press the star followed by the number one on your telephone keypad. Your next question comes from the line of Adhir Kadve from 8 Capital; please go ahead.

Speaker Change: Once again, if you would like to ask a question seem to press the star followed by the number one I'll go telephone keypad.

Adhir Kadve: Your next question comes from the line of <unk> <unk> from <unk> capital. Please go ahead.

Adhir Kadve: Hey guys, thanks. Thanks for taking my questions. I just wanted to ask first, so it's good to see the subscription line kind of return to growth this quarter. Can you give us a sense of which of the two products, whether it was wealth or sorry, whether it was mocha or whether it was mogo trade, that really kind of contributed to that growth? Or was it something else?

Adhir Kadve: Hey, guys. Thanks, Thanks for taking my questions.

Adhir Kadve: I just wanted to ask first so it's good to see the subscription line kind of returned to growth this quarter can.

Adhir Kadve: Can you give us a sense of which of the two products.

Adhir Kadve: Whether it was wealth or I'm, sorry, whether it's moca or whether it's mobile trade that really kind of contributed to that growth or was it something else.

David Marshall Feller: Well, it's Dave. So I'd say at this stage, Mocha is still the bigger product, given its kind of longer history. So I'd say at this stage, you know, we're kind of further along with Mocha. But, you know, we're also seeing, you know, some meaningful growth, even on the Mogo side, assets, you know, eight assets on the platform up well over 100%. But also on a much smaller scale. You know, we've effectively done very little to no marketing on the Mogo product where we've actually done some on Mocha.

Adhir Kadve: It was it's Dave So I'd say at this stage Moca is still the bigger product given its kind of a longer history. So I'd say at this stage you know we're kind of further along with Moca.

David Marshall Feller: But we're also seeing some meaningful growth even on the mobile side assets.

David Marshall Feller: Eight assets on the platform up well over 100%, but also on a on a much smaller scale.

David Marshall Feller: We also effectively have done very little to no marketing on the mogul product, where we've actually done some on moca, but think we're now at a place where we kind of feel both products are increasingly ready for prime time. So I think kind of going forward. We expect to have more of a balance between both of those products in terms of what's wrong.

David Marshall Feller: But I think we're now at a place where we kind of feel both products are increasingly ready for primetime. So I think, kind of going forward, we expect to have, you know, more of a balance between both of those products in terms of what's driving growth.

David Marshall Feller: Growth.

David Marshall Feller: Okay, got it. And then what does that marketing kind of entail? I mean, you guys have 2.1 million users already on the platform. How do you kind of get them to reactivate? What kind of strategies will you use around that? Yeah, I'm

Speaker Change: Okay got it and then what does that marketing kind of Intel I mean, you guys have to pay 1 million users already on the platform.

David Marshall Feller: How do you kind of get them to reactivate what kind of strategies you use around that.

David Marshall Feller: Yeah, I mean, obviously, there's a bunch, but obviously, email campaigns continue to be, you know, an effective strategy for sure, you know, and we're, you know, constantly, you know, testing different strategies there, but generally, email campaigns that, you know, aren't just meant to, you know, sell people on the product, but actually kind of deliver value. We know that, you know, from our member base that, you know, one of the top goals they have continues to be around, you know, basically financial education, specifically even on learning how to invest and building wealth, so, you know, that's also kind of a really kind of big core focus from a product marketing perspective increasingly is just, you know, really kind of solid educational content versus, you know, quite frankly, more of a hard sell, but yeah, email continues to be a key driver and something we'll continue to leverage and leverage more than we have in the past, but also we have our post media partnership still, so that also continues to be something that we're, you know, confident in, especially given, you know, financial posts and its positioning in the marketplace and generally, you know, leveraging it to, you know, establish a certain level of credibility, especially for, you know, a relatively new entrant in the wealth space in Canada, so although our target customer isn't necessarily, you know, subscribing to the financial post, financial post, you know, and just generally that section, news item in through social media, a lot of this stuff still is effective with that target demo, really our kind of main target is, you know, Gen Z and millennials, so I'd say generally between, you know, 25 and 40 is kind of our main target demo.

David Marshall Feller: I mean, obviously, there's there's a bunch, but obviously email campaigns continue to be an effective strategy for sure you know and we're constantly testing different strategies, there, but generally our email.

David Marshall Feller: Pains.

David Marshall Feller: That arent just meant to sell.

David Marshall Feller: <unk> people on the product that actually kind of deliver value. We know that you know from our our member base that.

David Marshall Feller: One of the top goals. They have continues to be around you know basically financial education.

David Marshall Feller: Specifically, even on on learning how to invest in building wealth. So that's also a kind of a really kind of big core focus from a product and marketing perspective increasingly is just really kind of solid the educational content.

David Marshall Feller: Versus you know you know quite frankly more of a heartfelt, but yeah E mail continues to be a key key driver and something we'll continue to to leverage and leveraged more than we have in the past, but also we have our post media partnership still so that also continues to be something that were.

David Marshall Feller: Confident in especially given you know financial post and its positioning in the marketplace and generally leveraging it to establish a certain level of credibility, especially for a relatively new entrant in the wealth space in Canada, So, although our target customer isn't necessarily subscribing to the finance.

David Marshall Feller: Post.

David Marshall Feller: Financial post and just generally that that section a news item in through social media a lot of this stuff still is is effective with that.

David Marshall Feller: That target demo really our kind of main target is gen Z and millennials. So I'd say generally between 25 and 40 is kind of our main target target demo.

David Marshall Feller: We're also developing relationships with influencers, so we expect to see a lot more influencer-type marketing out there, including product reviews for both MoGo and Mocha as well, and just generally a lot more kind of social media presence. We've, you know, hired up the marketing team, brought on some more kind of social media and creative people to create more and more content, so that's also an area that we're investing in versus just.

David Marshall Feller: We're also developing relationships with Influencers. So we expect to see a lot more influencer type marketing out there, including product reviews of both mobile and Moca as well.

Adhir Kadve: Okay, I got it. And then maybe two more questions.

Adhir Kadve: And just generally a lot more kind of social media presence with you now.

Adhir Kadve: Hired up on the marketing team brought on some more kind of social media and creative people to create more and more content. So that's also an area that we're investing in versus just you know paid marketing.

Adhir Kadve: One in terms of the fee tier. So, if I heard that correctly, it'll be $15 a month for Mocha, $15 a month for Mogo, so all in all, $30 a month for $360 ARPU per user. But how about the kind of... Yeah, if customers take both products, yeah. If they take both, yeah, yeah. And so, what about cross-selling between the two products, between Mocha and Mogo? Obviously, there's a very high level of cross-sellability between the two. Will you kind of also leverage that as well? Or has that started H&L? Yeah, I would say that it really hasn't...

Adhir Kadve: Okay got it and then.

Adhir Kadve: Maybe two more questions one in terms of the.

Adhir Kadve: Our feet here, so if I heard that correctly it would be a $15 a month for $15 a month for mobile so call it $30 a month for $360.

Adhir Kadve: <unk> per user.

Adhir Kadve: Yes.

Adhir Kadve: Customers take both products yeah, if they can play.

Adhir Kadve: So what about cross sell between the two products <unk> logo, obviously theres, a very high level of cross sell ability between the two lethal kind of also leveraged that as well.

Adhir Kadve: Or has that started.

David Marshall Feller: Yeah, I would say that really hasn't started right now We're you know primarily focused on each product kind of developing its own marketing and narrative in that But obviously at a point no question about it, and you know we we have tested it in a very small way But you know generally our view is that and in fact kind of the stats show for example You know 60 a high percentage of self-directed investors obviously Also invest in things like mutual fund as well as have other kind of managed solutions So you know well well north of 50% So that there's already a strong kind of data point on the general attachment rate. You know most people are not exclusively self-directed And then generally we think especially you know over time if you take a look at somebody in their in their 20s Even if they start for example on something like mocha You know where they're saying hey, I really don't have the confidence in investing I'm and I don't really have the time to do it They start with something like that, but over time in a 50-year journey You know a lot of them start saying hey listen.

Adhir Kadve: I would say that really Hasnt started right now we are primarily focused on each product kind of developing its own marketing and narrative and that but obviously at a point no question about it.

David Marshall Feller: We have tested it in a very small way.

David Marshall Feller: But generally our view is that and in fact kind of the stats show. For example, you know 60, a high percentage of self directed investors. Obviously also invest in things like mutual fund.

David Marshall Feller: As well as have other kind of managed solutions. So you know well well north of 50%. So that there is already a strong kind of data point on the general attachment rate you know most people are not exclusively self directed.

David Marshall Feller: And generally we think especially you know over time, if you take a look at somebody in there in their twenty's, even if they start for example in something like Moca.

David Marshall Feller: Where they're saying, hey, I really don't have the confidence in investing and I don't really have the time to do it.

David Marshall Feller: They start with something like that but over time in a 50 year journey.

David Marshall Feller: I actually have some interest in some self-directed learning as well. So, you know, we see that over time, a natural, you know, addition is you add kind of that other product in there? I mean, our kind of target in the long run is to have at least a kind of 50% attachment rate, right? So that's what we're looking at.

David Marshall Feller: Lot of them start, saying, hey, listen I actually had some interest in some self directed as well. So we see that over time a natural addition, as you add kind of that other product in there I mean, our kind of target in the long run is to have at least a 50% attachment rate right.

David Marshall Feller: So.

David Marshall Feller: That's what we're looking at.

David Marshall Feller: Yeah.

Adhir Kadve: Awesome. Exciting times ahead, guys. I'll pass the line.

David Marshall Feller: Awesome exciting times ahead, guys all personally.

Adhir Kadve: Thanks.

David Marshall Feller: Thank you, and there are no further questions at this time. I'd like to turn it back to Dave Feller for closing remarks.

Adhir Kadve: Thank you and there are no further questions at this time I'd like to turn it back to Dave seller for closing remarks.

David Marshall Feller: Okay. Well, thanks for joining us for the call. Thanks for the questions. Also, just wanted to say a special thank you to all the Mogo team members that make all this possible and look forward to updating everybody on our Q2 results. Thanks again.

David Marshall Feller: Okay, well, thanks for joining us for the call. Thanks for the questions. I also just wanted to say a special thank you to all the mogul team members that make all this possible and look forward to.

David Marshall Feller: Updating everybody post our Q2 results thanks, Ken.

Operator: Thank you, presenters, and ladies and gentlemen. This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change: Thank you presenters, ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.

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