Q2 2024 Mogo Inc Earnings Call

Good morning, ladies and gentlemen, and welcome to the Mogo Finance Technology second quarter results conference call.

Unknown Executive: Finance Technology, Second Quarter Results Conference Call. At this time, all lines are in a listen-only mode.

Operator: Finance Technology Second Quarter 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, please press star zero for the operator. I would now like to turn the conference over to Craig Armitage, Investor Relations. Please go ahead.

Unknown Executive: Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator.

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, please press star zero for the operator. I would now like to turn the conference over to Craig Armitage, Investor Relations. Please go ahead. Craig Armitage, Investor Relations. Thank you. Thank you.

Craig Armitage: I would now like to turn the conference over to Craig Armitage, Investor Relations. Please go ahead. Thank you and good afternoon, everyone. Thanks for joining us today. Just a few quick notes before we get started.

Craig Armitage: Thank you and good afternoon, everyone. Thanks for joining us today.

Craig Armitage: Just a few quick 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. Information about the risks and uncertainties is included in Mogo's Q2 filings as well as periodic filings with regulators in Canada and the United States, which you'll find on CDAR, and you can access via the investor relations website as well.

Speaker Change: Thank you and good afternoon everyone. Thanks for joining us today. Just a few quick 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.

Craig Armitage: Today's call will contain four 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. Information about the risks and uncertainties are included in Mogo's Q2 filings, as well as periodic filings with regulators in Canada and the United States, which you will find on EDIR Cedar, and you can access via the investor relations website as well.

The company undertakes no obligation to update these statements, except as required by law. Information about the risks and uncertainties are included in Mogo's Q2 filings, as well as periodic filings with regulators in Canada and the United States.

which you'll find on CDER and you can access via the Investor Relations website as well.

Craig Armitage: And lastly, today's session will include several adjusted financial measures or non-IFRS measures. Please consider these as a supplement to and not as a substitute for the IFRS measures. You'll see that we've included reconciliations to those in the press release and in the investor deck. With that, I'll turn it over to Dave Feller.

Craig Armitage: Lastly, today's session will include several adjusted financial measures or non-IFRS measures. Please consider these as a supplement to, and not as a substitute for the IFRS measures. You'll see that we've included reconciliation to those in the press release and in the investor deck.

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And lastly, today's session will include several adjusted financial measures or non-IFRS measures.

Please consider these as a supplement to and not as a substitute for the IFRS measures. You'll see that we've included reconciliations to those in the press release and in the investor deck. With that, I'll turn it over to Dave Feller. Dave?

David Feller: With that, I'll turn it over to Dave Feller. Thanks, Craig. Thank you and good afternoon.

David Feller: Thank you and good afternoon. Welcome to our second quarter 2024 call. I'm joined today by Greg Feller, our President and CFO. I'll cover some of the key operating highlights, and Greg will dig deeper into the financial results and outlook. It was a solid quarter, both from a financial perspective and a product perspective.

David Feller: Welcome to our second quarter, 2024 call. I'm joined today by Greg Feller, our President and CFO. I'll cover some of the key operating highlights, and Greg will dig deeper into the financial results and outlook. It was a solid quarter, both from a financial perspective and a product perspective. A couple of highlights include: we generated positive cash flow from operations. We had year-over-year growth in all our business lines, and revenue was up 10% year-over-year to 17.6 million. Card as payment volume was up 12% to 2.8 million, and we've also made meaningful improvements in our wealth business.

Dave Feller: Thanks, Craig.

Dave Feller: Thank you and good afternoon. Welcome to our second quarter 2024 call. I'm joined today by Greg Feller, our President and CFO .

Dave Feller: I'll cover some of the key operating highlights and Greg will dig deeper into the financial results and outlook. It was a solid quarter, both from a financial perspective and a product perspective.

David Feller: A couple highlights include generating positive cash flow from operations, we had year over year growth in all our business lines, and revenue was up 10% year over year to $17.6 million. Carter's payment volume was up 12% to $2.8 billion, and we've also made meaningful improvements in our wealth business. Today, we look at our business through the lens of three key pillars.

Greg Feller: A couple highlights include we generated positive cash flow from operations, we had year-over-year growth in all our business lines, and revenue was up 10% year-over-year to $17.6 million. Carta's payment volume was up 12% to $2.8 billion, and we've also made meaningful improvements in our wealth business.

David Feller: Today, we look at our business through the lens of three key pillars. Each one has its own unique opportunity for long-term growth. I'll walk through the wealth, and Greg will talk about payments crypto. The wealth industry today is estimated over 6 trillion, and that's investable assets, which include brokerage accounts, retirement accounts, RSPs, TFSAs, trusts, etc., and is a growing market. About 2 trillion of that today is sitting in mutual funds, which highlights the opportunity given mutual funds have among the highest fees, many as high as 2%. While 98% of professionally managed funds underperformed the S&P 500.

David Feller: Each one has its own unique opportunity for long-term growth. I'll walk you through the wealth, and Greg will talk about payments and crypto. The wealth industry today is estimated to be over $6 trillion, and that's investable assets, which include brokerage accounts, retirement accounts, RSPs, TFSAs, trusts, etc., and is a growing market. About $2 trillion of that today is sitting in mutual funds, which highlights the opportunity given mutual funds have among the highest fees, many as high as 2%, while 98% of professionally managed funds underperform the S&P 500.

Today we look at our business through the lens of three key pillars. Each one has its own unique opportunity for long-term growth. I'll walk through the wealth, and Greg will talk about payments and crypto.

Greg Feller: The wealth industry today is estimated over $6 trillion, and that's investable assets, which include brokerage accounts, retirement accounts, RSPs, TFSAs, trusts, etc., and is a growing market.

Greg Feller: About $2 trillion of that today is sitting in mutual funds, which highlights the opportunity given mutual funds have among the highest fees, many as high as 2%, while 98% of professionally managed funds underperform the S&P 500.

David Feller: For example, Canada's largest mutual fund, the RBC Select Balance Portfolio, has over 53 billion in assets and has a 10-year average return of 5.8%, and a management fee of 1.67%. Versus a 15% 10-year return for the S&P 500. Now, although you could argue that these two different kinds of portfolios, many who are in this are focused on long-term wealth creation and don't fully understand the implications. One institution is earning close to a billion dollars a year off of this one fund.

David Feller: For example, Canada's largest mutual fund, the RBC Select Balance Portfolio, has over $53 billion in assets and has a 10-year average return of 5.8% and a management fee of 1.67%, versus a 15% 10-year return for the S&P 500.

Greg Feller: For example, Canada's largest mutual fund, the RBC Select Balance Portfolio, has over $53 billion in assets and has a 10-year average return of 5.8% and a management fee of 1.67%, versus a 15% 10-year return for the S&P 500.

David Feller: Now, although you could argue that these are different kinds of portfolios, many who are in this are focused on long-term wealth creation and don't fully understand the implications. For example, one institution is earning close to a billion dollars a year off of this one fund. To put these returns into perspective, let's assume that you have a $10,000 investment over 50 years. In the balance fund, at this rate of return, you'd get to $167,000 versus $1.8 million based on the 11% 50-year average of the S&P 500. That's almost 11 times more money.

Now, although you could argue that these are two different kinds of portfolios, many who are in this are focused on long-term wealth creation and don't fully understand the implications.

David Feller: To put these returns into perspective, let's assume that you have a $10,000 investment over 50 years. In the balance fund of this rate return, you get to $167,000, versus $1.8 million based on the 11% 50-year average of the S&P 500. That's almost 11 times more money. If the 10-year average of 15% holds, that number would grow to over $10 million.

Speaker Change: One institution is earning close to a billion dollars a year off of this one fund.

To put these returns into perspective, let's assume you have a $10,000 investment over 50 years.

In the balance fund, at this rate of return, you'd get to $167,000 versus $1.8 million based on the 11% 50-year average of the S&P 500. That's almost 11 times more money.

David Feller: If the 10-year average of 15% holds, that number would grow to over $10 million, the same amount of money invested over the same time period, but radically different. Although there's no lack of investing products in the market today, the reality is the existing solutions in the marketplace just don't come close to solving the problem. Most Canadians aren't coming close to achieving financial freedom. Perhaps no stat communicates this more than a recent retirement survey that showed 75% of Canadians who have yet to retire have saved less than $100,000 versus the estimated 1.7 million average that Canadians think they need to retire.

David Feller: Partners. Same amount of money invested, same time period, but radically different options. Although there's no lack of investing products in the market today, the reality is the existing solutions in the marketplace just don't come close to solving the problem. Most Canadians aren't coming close to achieving financial freedom. Perhaps no stack communicates this more than a recent retirement survey that showed 75% of Canadians who have yet to retire have saved less than $100,000 versus the estimated $1.7 million average the Canadian thinks they need to retire. And as we've just reviewed in the previous slide, it's easy to see why so many never come close to it based on some of the products many of them get put into.

If the 10-year average of 15% holds, that number would grow to over $10 million. Same amount of money invested, same time period, but radically different outcomes.

David Feller: And as we've just reviewed in the previous slide, it's easy to see why so many never come close to it based on some of the products many of them get put in. We've developed a radically differentiated approach to solving the problem that includes a fully managed solution complemented by a self-directed one. As Warren Buffett says, being a great investor is more about temperament than intellect. And as James Clear, the author of Atomic Habits, says, much of building good habits comes down to making it harder to do the things that lead to bad outcomes and making it easier to drive the behaviors that lead to positive outcomes.

Greg Feller: Although there's no lack of investing products in the market today, the reality is the existing solutions in the marketplace just don't come close to solving the problem. Most Canadians aren't coming close to achieving financial freedom.

Greg Feller: Perhaps no stat communicates this more than a recent retirement survey that showed 75% of Canadians who have yet to retire have saved less than $100,000.

versus the estimated 1.7 million average that Canada thinks they need to retire. And as we've just reviewed in the previous slide, it's easy to see why so many never come close to it based on some of the products many of them get put into.

David Feller: We've developed a radically differentiated approach to solving the problem that includes a fully managed solution complemented by a self-directed one. As Warren Buffett says, being a great investor is more about temperament than intellect. And as James Clear, the author of Atomic Habits, says, much of building good habits comes down to making it harder to do the things that lead to bad outcomes and make it easier to drive the behaviors that lead to positive outcomes. Our products are designed based on behavioral science to make it simple and engaging for anyone to develop the right investing habits while minimizing the ones that tend to lead to underperformance.

Speaker Change: We've developed a radically differentiated approach to solving the problem that includes a fully managed solution complemented by a self-directed one.

Speaker Change: As Warren Buffett says, being a great investor is more about temperament than intellect. And as James Clear, the author of Atomic Habits says, much of building good habits comes down to making it harder to do the things that lead to bad outcomes and make it easier to drive the behaviors lead to positive outcomes.

David Feller: Our products are designed based on behavioral science to make it simple and engaging for anyone to develop the right investing habits while minimizing the ones that tend to lead to underperformance. Most of our product improvements and roadmap are directly related to these behavioral improvements. Another disruptive element of our solution is our fee structure. We offer both a fully managed solution and a commission-free and zero FX fee self-directed investing app, along with the guidance and education investors need, all for a simple low monthly fee of $15 a month. As a simple comparison, if you had $100,000 in an average mutual fund, your annual fee alone would be around $1,600 to $2,000 a year.

Speaker Change: Our products are designed based on behavioral science to make it simple and engaging for anyone to develop the right investing habits, while minimizing the ones that tend to lead to underperformance. Most of our product improvements and roadmap are directly related to these behavioral improvements.

David Feller: Most of our product improvements and road map are directly related to these behavioral improvements. Another disruptive element of our solution is our fee structure. We offer both a fully managed solution along with a commission-free and zero FX fee self-directed investing app, along with the guidance and education investors need, all for a simple, low monthly fee of $15 a month. As a simple comparison, if you had $100,000 in an average mutual fund, your annual fee alone would be around $1,600 to $2,000 a year. And if you had a million dollars with a wealth advisor, it would be around $10,000.

Speaker Change: Another disruptive element of our solution is our fee structure. We offer both a fully managed solution along with the commission-free and zero FX fee self-directed investing app, along with the guidance and education investors need, all for a simple low monthly fee of $15 a month.

Speaker Change: As a simple comparison, if you had $100,000 in an average mutual fund, your annual fee alone would be around $1,600 to $2,000 a year. And if you had $1 million with a wealth advisor, it would be around $10,000.

David Feller: And if you had a million dollars with a wealth advisor, it would be around $10,000. And for the vast majority, this would all be for the privilege of underperformance and, most importantly, being on track to a fraction of the wealth that's possible. We're still in the very early days of our journey in the wealth space and continue to make solid progress every quarter on improving our value proposition through product improvements and how we market and communicate our value proposition. This last quarter alone, we released 21 new updates and hundreds of improvements.

David Feller: And for the vast majority, this would all be for the privilege of underperforming and, most importantly, being on track to a fraction of the wealth as possible.

Speaker Change: And for the vast majority, this would all be for the privilege of underperforming, and most importantly, being on track to a fraction of the wealth that's possible.

David Feller: We're still very early days in our journey in the wealth space and continue to make solid progress every quarter on improving our value proposition through product improvements and how we market and communicate our value problem. This last quarter alone, we released 21 new updates and hundreds of improvements. Mocha is designed to be the core part of your wealth building solution. Mocha is based on the proven long-term performance of the S&P 500. Again, 98% of professional fund managers underperform this index, and the average investor generates less than 50% of those returns. Today, we have 18-year-olds who are on track to over 18 million by the age of 78 and over 62 million by age 90, with just a simple $50 a week contribution.

Speaker Change: We're still very early days in our journey in the wealth space and continue to make solid progress every quarter on improving our value proposition through product improvements and how we market and communicate our value prop. This last quarter alone we released 21 new updates and hundreds of improvements.

David Feller: MoCA is designed to be the core part of your wealth building solution. It is based on the proven long-term performance of the S&P 500. Again, 98% of professional fund managers underperform this index, and the average investor generates less than 50% of those returns. Today, we have 18-year-olds who are on track to over $18 million by the age of 78 and over $62 million by age 90 with just a simple $50 a week contribution. It's hard to overstate how disruptive this is to the status quo.

MoCA is designed to be the core part of your wealth building solution. MoCA is based on the proven long-term performance of the S&P 500. Again, 98% of professional fund managers underperform this index and the average investor generates less than 50% of those returns.

Speaker Change: Today, we have 18-year-olds who are on track to over $18 million by the age of 78, and over $62 million by age 90, with just a simple $50 a week contribution.

David Feller: It's hard to overstate how disruptive this is to the status quo. The old way would have been to have been sold into mutual fund from the bank and usually much later in life or perhaps download a commission-free trading app with the hopes of getting rich quick. Oh, and by the way, this is primarily done in the TFSA, so that $62 million would be equivalent to over $124 million in your RSP. What's unique about our solution is we make it easy for anyone to get on a path to being a multi-millionaire with a specific goal and date.

David Feller: The old way would have been to be sold into a mutual fund from the bank, and usually much later in life, or perhaps download a commission-free trading app with the hopes of getting rich quick. Oh, and by the way, this is primarily done in the TFSA, so that $62 million would be equivalent to over $124 million in your RRSP. What's unique about our solution is we make it easy for anyone to get on a path to being a multi-millionaire with a specific goal and date. How many people today that are investing know the returns and have a plan where they know what they're on track for? Very few.

Speaker Change: It's hard to overstate how disruptive this is to the status quo. The old way would have been to have been sold into a mutual fund from the bank, and usually much later in life, or perhaps download a commission-free trading app with the hopes of getting rich quick.

Speaker Change: Oh, and by the way, this is primarily done in the TFSA, so that $62 million would be equivalent to over $124 million in your RRSP.

Speaker Change: What's unique about our solution is we make it easy for anyone to get on a path to being a multi-millionaire with a specific goal and date. How many people today that are investing know the returns and have a plan where they know what they're on track for? Very few.

David Feller: How many people today are that are investing? Know the returns and have a plan where they know what they're on track for. Very few.

David Feller: One of the unique and engaging features we launched last quarter was our new leaderboard. The showcases some of our top members and help celebrate and gamify getting rich. It's also important to understand the impact of this on people today versus waiting decades to achieve their goal.

David Feller: One of the unique and engaging features we launched last quarter was our new leaderboard that showcases some of our top members and helps celebrate and gamify getting rich. It's also important to understand the impact of this on people today versus waiting decades to achieve their goal. Mental health is an important topic, especially for Gen Z, and given financial stress is still the number one stressor across all demographics, nothing helps improve it more than being confident around investing and financial freedom.

Speaker Change: One of the unique and engaging features we launched last quarter was our new leaderboard that showcases some of our top members and helps celebrate and gamify getting rich.

Speaker Change: It's also important to understand the impact of this on people today versus waiting decades to achieve their goal. Mental health is an important topic, especially for Gen Z, and given financial stress is still the number one stressor across all demographics, nothing helps improve it more than being confident around investing and financial freedom.

David Feller: Mental health is an important topic, especially for Gen Z, and given financial stress is still the number one stress across all demographics. Nothing helps improve it more than being confident around investing in financial freedom. Although it may take decades to achieve the goal, the benefits of being confident on a path to financial freedom and to your self-esteem and confidence are immediate.

David Feller: Although it may take decades to achieve the goal, the benefits of being confidently on a path to financial freedom and to your self-esteem and confidence are immediate. Another unique element of our wealth building platform is Mogo, our self-directed investing app. One of Buffett's favorite quotes is that Wall Street makes more money by getting people to gamble than to invest. The fact is, most of these apps have been designed to get you to trade, as that's what drives their revenue. But the data is clear. The more you trade, the more you underperform. What's more, they would like you to believe that it's easy to trade.

Speaker Change: Although it may take decades to achieve the goal, the benefits of being confidently on a path to financial freedom and to your self-esteem and confidence are immediate.

David Feller: Another unique element of our Welping Building Platform is Mogo, our self-directed investing app. One of Buck's favorite quotes is that Wall Street makes more money by getting people to gamble than to invest. The fact is, most of these apps have been designed to get you to trade, as that's what drives their revenue. But the data is clear. The more you trade, the more you underperform. What's more, they would like you to believe that it's easy to trade, and because it's now even commission-free, it's available to everyone. Well, the reality is, the only thing that has happened is that they have made it easier than ever to gamble and speculate on stocks.

Speaker Change: Another unique element of our wealth building platform is Mogo, our self-directed investing app.

Speaker Change: One of Buffett's favorite quotes is that Wall Street makes more money by getting people to gamble than to invest.

Speaker Change: The fact is most of these apps have been designed to get you to trade as that's what drives their revenue But the data is clear the more you trade the more you underperform

David Feller: And because it's now even commission-free, it's available to everyone. Well, the reality is that they have made it easier than ever to gamble and speculate on stocks. Trading and gambling is easy, but serious investing that produces long-term good results is very hard.

Speaker Change: What's more, they would like you to believe that it's easy to trade, and because it's now even commission-free, it's available to everyone. Well, the reality is, the only thing that has happened is that they have made it easier than ever to gamble and speculate on stocks.

David Feller: Trading and gambling is easy, but serious investing that produces long-term, good results is very hard.

Speaker Change: Trading and gambling is easy, but serious investing that produces long-term good results is very hard. We believe Mogo is the only self-directed investing app that is designed to actually get investors to trade less and focus more on proven long-term value investing.

David Feller: We believe Mogo is the only self-directed investing app that is designed to actually get investors to trade less and focus more on proven long-term value investing. One of our latest features is Buffett Mode, and that now makes it easier for than ever for someone to learn how to invest based off the principles of the greatest investor of all time. Buffett Mode is mostly focused on helping investors gain the knowledge, skills, and discipline needed to be a better investor while moving away from behaviors like trading and gambling that lead to losses and underperformance. These include TikTok-style educational videos from Buffett himself, explaining everything from circled competence to how he calculates intrinsic value.

David Feller: We believe Mogo is the only self-directed investing app that is designed to actually get investors to trade less and focus more on proven long-term value investing. One of our latest features is Buffet Mode, and that now makes it easier than ever for someone to learn how to invest based on the principles of the greatest investor of all time. Buffet Mode is mostly focused on helping investors gain the knowledge, skills, and discipline needed to be a better investor while moving away from behaviors like trading and gambling that lead to losses and underperformance.

Speaker Change: One of our latest features is Buffet Mode.

Speaker Change: And that now makes it easier than ever for someone to learn how to invest based off the principles of the greatest investor of all time.

Speaker Change: Buffett Mode is mostly focused on helping investors gain the knowledge, skills, and discipline needed to be a better investor, while moving away from behaviors like trading and gambling that lead to losses and underperformance.

David Feller: These include TikTok-style educational videos from Buffett himself explaining everything from circled competence to how he calculates intrinsic value. It's like having Warren Buffett as your investing co-pilot. Customer feedback is critical to us in helping us make sure that we're focused on the right things, which is why one of our new features allows any user to simply shake the app and share their feedback on the product, what they like, what they don't like, etc.

Speaker Change: These include TikTok-style educational videos from Buffett himself, explaining everything from Circle of Competence to how he calculates intrinsic value. It's like having Warren Buffett as your investing co-pilot.

David Feller: It's like having Warren Buffett as your investing co-pilot.

David Feller: Customer feedback is critical to us to helping us make sure that we're focused on the right things, which is why one of our new features allows any user to simply shake the app and share their feedback on the product. What they like, what they don't like, etc. This feedback goes directly into the Slack channel that all of us, including myself, read constantly. Every day we review all customer feedback and incorporate that in our plans. Accelerating this feedback loop has had a big impact on speeding up the rate of which we identify the right things to focus on.

Speaker Change: Customer feedback is critical to us to helping us make sure that we're focused on the right things, which is why one of our new features allow any any user to simply shake the app and share their feedback on the product.

David Feller: This feedback goes directly into a Slack channel that all of us, including myself, read constantly. Every day, we review all customer feedback and incorporate that into our plans. Accelerating this feedback loop has had a big impact on speeding up the rate at which we identify the right things to focus on. As part of our go-to-market strategy, we've also recently formed a key strategic partnership with PostMedia to launch a new wealth section designed to help educate Canadians on the pitfalls of existing solutions in the marketplace and the impact that the right approach and strategy can have in terms of your ability to achieve financial freedom.

Speaker Change: what they like, what they don't like, etc. This feedback goes directly into the Slack channel that all of us, including myself, read constantly. Every day we review all customer feedback and incorporate that in our plans. Accelerating this feedback loop has had a big impact on speeding up the rate at which we identify the right things to focus on.

David Feller: As part of our go-to-market strategy, we've also recently formed a key strategic partnership with Postmedia to launch a new wealth section designed to help educate Canadians on the pitfalls of existing solutions in the marketplace, and the impact that the right approach and strategy can have in terms of your ability to achieve financial freedom. We also formed a partnership with Tom Lee, a fund strat who's a frequent CNBC contributor and has widely considered one of the most thoughtful strategies on Wall Street today. To give our wealth members exclusive access to his investment research and further establish us as a leading platform for serious investors.

Speaker Change: As part of our go-to-market strategy, we've also recently formed a key strategic partnership with PostMedia to launch a new wealth section designed to help educate Canadians on the pitfalls of existing solutions in the marketplace and the impact that the right approach and strategy can have in terms of your ability to achieve financial freedom.

David Feller: We also formed a partnership with Tom Lee of Fundstrat, who's a frequent CNBC contributor and is widely considered one of the most thoughtful strategists on Wall Street today, to give our wealth members exclusive access to his investment research and further establish us as a leading platform for serious investors. Again, we are clearly at the beginning of this journey to disrupt the wealth space in Canada, and we're pleased with the progress we made this quarter.

Speaker Change: We also formed a partnership with Tom Lee of Fundstrat, who is a frequent CNBC contributor.

Tom Lee: and is widely considered one of the most thoughtful strategists on Wall Street today.

Speaker Change: to give our WEALTH members exclusive access to his investment research and further establish us as a leading platform for serious investors.

David Feller: Again, we are clearly at the beginning of this journey to disrupt the wealth space in Canada, and we're pleased with the progress we've made this quarter.

Speaker Change: Again, we are clearly at the beginning of this journey to disrupt the wealth space in Canada and we're pleased with the progress we've made this quarter. Like investing, we are taking a long-term compounding approach.

David Feller: Like investing, we are taking a long-term compounding approach. It takes a while to gain the trust and credibility as a wealth brand, and these partnerships, along with the product improvements we made this quarter, are important and meaningful steps towards us.

David Feller: Like investing, we are taking a long-term compounding approach. It takes a while to gain trust and credibility as a wealth brand, and these partnerships, along with the product improvements we made this quarter, are important and meaningful steps toward that. With that, I'll turn it over to Greg.

Speaker Change: It takes a while to gain the trust and credibility as a wealth brand, and these partnerships, along with the product improvements we made this quarter, are important and meaningful steps towards this. With that, I'll turn it over to Greg.

Gregory Feller: With that, I'll turn it over to Greg. Thanks, Dave, and good afternoon. Let me quickly discuss the two other pillars of our business, beginning with our payments business, CARDA. CARDA had another solid quarter, as reflected by a 12% year-over-year increase in payments volumes of 2.8 million billion, putting them on an annual run rate of more than 10 billion. We continue to be very excited about this business and the long-term prospects working with exciting global partners, customers like Ploxian, France, and Albany, K.

Gregory Feller: Thanks, Dave, and good afternoon. Let me quickly discuss the two other pillars of our business, beginning with our repayments business, CARTA. Carta had another solid quarter, reflected in a 12% year over year increase in payments volumes at $2.8 billion, putting them on an annual run rate of more than $10 billion. We continue to be very excited about this business and the long-term prospects of working with exciting global customers like Pluxy in France and Alpay in the UK.

Greg: Thanks Dave and good afternoon. Let me quickly discuss the two other pillars of our business beginning with the payments business, CARTA.

Greg Feller: Carta had another solid quarter is reflected by a 12% year-over-year increase in payments volumes at 2.8 million billion putting them on an annual run rate of more than 10 billion. We continue to be very excited about this business and the long-term prospects working with exciting global part customers like Ploxi in France and Alpay in the UK.

Gregory Feller: Another major pillar of our business is our crypto-related investments, which collectively today represent close to 50% of our market cap, although importantly, represents 0% of our revenue as Mogo today doesn't have any operating businesses in crypto. The largest of these investments is 87 million shares in Canadian crypto exchange, Wendrify, which is listed on the TSS. You may have seen Wendrify reported results Q2 results yesterday, highlighted by a 370 increase in client assets under custody to about 1.4 billion, and they're in a strong financial position with cash and digital assets, the 47 million in no debt.

Gregory Feller: Another major pillar of our business is our crypto-related investments, which collectively today represent close to 50% of our market cap, although importantly, represent 0% of our revenue as Mogo today doesn't have any operating businesses in crypto. The largest of these investments is our 87 million shares in Canadian crypto exchange WonderFi, which is listed on the TSX.

Speaker Change: Another major pillar of our business is our crypto-related investments, which collectively today represent close to 50% of our market cap, although importantly represent 0% of our revenue as Mogo today doesn't have any operating businesses in crypto.

Speaker Change: The largest of these investments is our 87 million shares in Canadian crypto exchange Wonderfi, which is listed on the TSX. You may have seen Wonderfi reported results, Q2 results, yesterday.

Gregory Feller: You may have seen WonderFi's reported results, Q2 results yesterday, highlighted by a 337 increase in client assets under custody to about $1.4 billion, and they're in a strong financial position with cash and digital assets of $47 million in no debt. Turning to Mogo's financials, it was another quarter of year of growth for our business while delivering on a key cash flow milestone. After making some tough decisions in 2022 to accelerate our path to profitability, which resulted in a reduction of our quarterly OPEX by 50%, we've delivered our second consecutive quarter of year-over-year growth in Q2 of $17.6 million, up 10% year-over-year.

Speaker Change: highlighted by a 337 increase in client assets under custody to about 1.4 billion and they're in a strong financial position with cash and digital assets of 47 million in no debt.

Gregory Feller: Turning to Mogo's financials, it was another quarter of year-over-year growth of our business, delivering on a key cash flow milestone. After making some tough decisions in 2022 to accelerate our past profitability, which resulted in a reduction of our quarterly off-ex by 50%, we've delivered our second consecutive quarter of year-of-year growth in Q2 of 17.6 million, up 10% year-of-year. The discipline and cost has continued even while returning to growth mode with off-set flat year-of-year. Sequentially, marketing spend was actually down in Q2 as we have still been more focused on product improvements for wealth apps that they've touched on rather than increasing marketing, which we believe is the right balance to really build the best-in-class product and generate more viral components.

Speaker Change: Turning to Mogo's financials, it was another quarter of year over year growth of our business while delivering on a key cash flow milestone.

Speaker Change: After making some tough decisions in 2022 to accelerate our path to profitability, which resulted in a reduction of our quarterly OPEX by 50%, we have delivered our second consecutive quarter of year-over-year growth in Q2 of $17.6 million, up 10% year-over-year.

Gregory Feller: The discipline and cost have continued even while returning to growth mode with off that flat year over year. Sequentially, marketing spend was actually down in Q2 as we are still being more focused on product improvements or wealth apps that Dave touched on rather than increasing marketing, which we believe is the right balance to really build the best in class product and generate more viral components.

Speaker Change: The discipline and costs have continued, even while returning to growth mode with offsets flat year-over-year.

Speaker Change: Sequentially, marketing spend was actually down in Q2 as we are still being more focused on product improvements or wealth apps that Dave touched on rather than increasing marketing, which we believe is the right balance to really build the best-in-class product and generate more viral components.

Gregory Feller: We expect marketing will slowly ramp as we head into 2025 while remaining focused on growing EBITDA and manage your cash low. Q2-adjusted EBITDA came in at 1.4 million, down modestly from the same period last year, but importantly, up 40% sequentially from Q1. We've also seen a substantial increase in cash flow from operations before discretionary investment in loan book. This metric was positive for the seventh consecutive quarter and rose to 3.8 million in Q2 for the 2.1 million in the prior year period, which enabled us to reach an important milestone: a positive cash flow from operations, which came in at a positive 0.5 million in the quarter versus negative 1.8 million in Q2 of last year.

Gregory Feller: We expect marketing to slowly ramp as we head into 2025 while remaining focused on growing EBITDA and managerial cash. Q2 adjusted EBITDA came in at $1.4 million, down modestly from the same period last year but importantly, up 40% sequentially from Q1. We have also seen a substantial increase in cash flow from operations before discretionary investment in loan books. This metric was positive for the seventh consecutive quarter and rose to $3.8 million in Q2 versus $2.1 million in the prior year period, which enabled us to reach an important milestone of positive cash flow from operations, which came in at a positive $0.5 million in the quarter versus negative $1.8 million in Q2 of last year.

Speaker Change: We expect marketing will slowly ramp as we head into 2025 while remaining focused on growing EBITDA and managing your cash flow.

Speaker Change: Q2 adjusted EBITDA came in at $1.4 million down modestly from the same period last year but importantly up 40% sequentially from Q1.

Speaker Change: We have also seen a substantial increase in cash flow from operations before discretionary investment in LoanBook.

Speaker Change: This metric was positive for the 7th consecutive quarter and rose to $3.8 million in Q2 versus $2.1 million in the prior year period, which enabled us to reach an important milestone of positive cash flow from operations.

Speaker Change: which came in at a positive $0.5 million in the quarter versus negative $1.8 million in Q2 of last year.

Gregory Feller: Dave talked about the continued improvements we were making to our wealth products, MoGO and MoCA, including the significant value-enhancing updates we're at. These changes will not only help our users investing build wealth more intelligently, but they will also create a significant opportunity for MoGO to increase RPU. Today, our RPU across our consumer base products is $25, while RPU just for a wealth product is $180, which represents a huge opportunity for us to continue to increase the monetization rate of our member base of over 2 million Canadians. We ended the quarter in a solid financial position with cash and total investments of roughly 41 million.

Gregory Feller: Dave talked about the continued improvements we were making to our wealth products, Mogo and Mocha, including the significant value-enhancing updates to our app. These changes will not only help our users invest and build wealth more intelligently, but they will also create a significant opportunity for Mogo to increase ARPU. Today, our ARPU across our consumer-based products is $25. Well, our ARPU just for our wealth products is $180, which represents a huge opportunity for us to continue to increase the monetization rate of our member base of over 2 million Canadians.

Speaker Change: Dave talked about the continued improvements we were making to our wealth products, Mogo and Mocha, including the significant value enhancing updates to our app.

Dave Feller: These changes will not only help our users invest and build wealth more intelligently, but they will also create a significant opportunity for Mogo to increase ARPU.

Dave Feller: Today, our ARPU across our consumer-based products is $25, while ARPU just for our wealth products is $180, which represents a huge opportunity for us to continue to increase the monetization rate of our member base of over 2 million Canadians.

Gregory Feller: We ended the quarter in a solid financial position with cash and total investments of roughly $41 million. This included combined cash and restricted cash of $11.3 million, an investment portfolio of $11.6 million, and marketable securities of $18.3 million. Importantly, as I mentioned earlier, we had a milestone quarter with positive overall cash flow from operations. But even more broadly, if you exclude share buybacks and debt repayment, we generated a positive overall cash flow after investing in financing activities in the quarter as well.

Dave Feller: We ended the quarter in a solid financial position with cash and total investments of roughly $41 million. This included combined cash and restricted cash of $11.3 million, investment portfolio of $11.6 million, and marketable securities of $18.6 million.

Gregory Feller: This included combined cash and restricted cash of 11.3 million, investment portfolio of 11.6 million, and marketable securities of 18.6 million. Importantly, as I mentioned earlier, we had a milestone quarter with positive overall cash flow from operations. But even more broadly, if you exclude share buybacks and debt repayment, we generated positive overall cash flow after investing in financing activities in the quarter as well. We also continue to expect monetization opportunities from our investment portfolio over the next 12 months.

Dave Feller: Importantly, as I mentioned earlier, we had a milestone quarter with positive overall cash flow from operations, but even more broadly, if you exclude share buybacks and debt repayment, we generated positive overall cash flow after investing in financing activities in the quarter as well.

Gregory Feller: We also continue to expect monetization opportunities from our investment portfolio over the next 12 months. Turning to our outlook for fiscal year 2024, we continue to expect subscription services revenue to grow in the mid-teens for the full year. And we're also introducing adjusted EBITDA guidance for the full year of between five and 6 million. Lastly, I think it's also worth highlighting that given our credit facility is on a floating rate basis, we will also see meaningful savings from any future rate reductions which the market is currently predicting. With that, we will now open the call to questions.

Speaker Change: We also continue to expect monetization opportunities from our investment portfolio over the next 12 months.

Gregory Feller: Turning to our outlet for fiscal year 2024, we continue to expect subscription services revenue to grow in the mid-teen for the full year, and we're also introducing adjusted EBITDA guidance for the full year of 5 to 6 million. Lastly, I think it's also worth highlighting that, given our credit facility is on a floating rate basis, we will also see meaningful savings from any future rate reductions, which the market is currently predicting.

Speaker Change: Turning to our outlook for fiscal year 2024, we continue to expect subscription services revenue to grow in the mid-teen for the full year and we're also introducing adjusted EBITDA guidance for the full year of 5 to 6 million.

Speaker Change: Lastly, I think it's also worth highlighting that given our credit facility is on a floating rate basis, we will also see meaningful savings from any future rate reductions which the market is currently predicting.

Unknown Executive: With that, we will now open the call to questions. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star button followed by the number one on your touch-tone phone. You'll hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star button followed by the number two. If you are using a speaker phone, please lift the handset before pressing any keys. One moment from your first question.

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

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star button followed by the number one on your touchtone phone. You'll hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star button followed by the number zero. If you are using a speakerphone, please lift the handset before pressing any key.

Speaker Change: Thank you. Ladies and gentlemen, we will now begin the question and answer session.

Speaker Change: Should you have a question, please press the star button followed by the number 1 on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star button followed by the number 2.

Operator: One moment from your first question. The first question is from Adhir Kadve, from 8 Capital. Please go ahead.

Speaker Change: If you are using a speakerphone, please lift the handset before pressing any keys.

Adhir Kadve: First question is from Adhir Kadve from A to Capitol. Please go ahead. Hey guys, good afternoon, and thanks for taking my questions here. One of the things that kind of caught my eye and I felt was important in the corridor was that you guys were casual positive on a consolidated company level. Can you give us a sense of how you're kind of thinking about your cash moving forward through the back half of the year? Yeah, thanks, Adhir. And just to put a final point on it, we were casual positive on a consolidated basis, excluding debt repayment and share buyback.

Speaker Change: Williams. One moment for your first question.

Speaker Change: First question is from Adhir Kadve from 8 Capital. Please go ahead.

Adhir Kadve: Hey guys, good afternoon. And thanks for taking my questions here. One of the things that kind of caught my eye and that I thought was important in the quarter was that you guys were cashflow positive on a consolidated company level. Can you give us a sense of how you're kind of thinking about your cash moving forward through the back half of the year?

Adhir Kadve: Hey guys, good afternoon and thanks for taking my questions here. One of the things that kind of caught my eye and I thought was important in the quarter was that you guys were cash flow positive on a consolidated company level. Can you give us a sense of how you're kind of thinking about your cash moving forward through the back half of the year?

Gregory Feller: Yeah, thanks Adhir. And just to put a finer point on it, we were cash flow positive on a consolidated basis, excluding debt repayment and share buyback. So, but importantly, the point is the reason this was such a milestone quarter for us in terms of cash flow. It really starts at the cash flow from operations level, which was the first quarter since 2020 when we were not really investing in the loan book where we actually reported positive overall cash flow from operations.

Speaker Change: Yeah, thanks Adhir. And just to put a finer point on it, we were cash flow positive on a consolidated basis, excluding debt repayment and share buyback. But importantly, the point is,

Gregory Feller: But importantly, the point is the reason this was such a milestone quarter for us is that it really starts at the cash flow from operations level, which was the first quarter since 2020 when we were not really investing in the loan book, where we actually reported a positive overall cash flow from operations. And that means that we generated enough cash from our operations to actually internally sell fund any investment made in the loan book. And then, if you sort of look at the other cash flow components, excluding discretionary share buybacks and debt repayment, we actually generated overall cash.

Speaker Change: The reason this was such a milestone quarter for us is cash flow, it really starts at the cash flow from operations level, which was the first quarter since 2020 when we were not really investing in the loan book, where we actually reported positive overall cash flow from operations.

Gregory Feller: And that means that we generated enough cash from our operations to actually internally self-fund any investment made in the loan book. And then if you sort of look at the other cash flow components, excluding, you know, discretionary share buybacks and debt repayment, we actually generated overall cash. So I think the reason this is so important is we've shown that we've got the business to a level in terms of revenue and OPEX that we can really sustain the business, at least at a flat loan book, while continuing to invest in growing our wealth and our payments business, which continues to grow.

Speaker Change: and that means that we generated enough cash from our operations to actually internally self fund any investment made in the loan book.

Speaker Change: and then if you sort of look at the other cash flow components

Adhir Kadve: Excluding, you know, discretionary share buybacks and debt repayment, we actually generated overall cash. So, I think the reason this is so important is we've shown that we've got the business to a level in terms of revenue and OPEX.

Gregory Feller: So I think the reason this is so important is we've shown that we've got the business to a level in terms of revenue and op-ex that we can really self-sustain the business, at least at a flat loan book, while continuing to invest in growing our wealth and our payments business, which continues to grow. And we have had the ability to either turn that investment dial up or down depending on how we want to manage our cash, which will also depend on future monetization. But that really puts us in the control position as it relates to our cash and our capital use.

Speaker Change: that we can really self-sustain the business, at least at a flat loan book, while continuing to invest in growing our wealth and our payments business, which continues to grow.

Gregory Feller: And we have the ability to either turn that investment dial up or down depending on how we want to manage your cash, which will also depend on future monetization. But that really puts us in a control position as it relates to our cash and our capital.

Speaker Change: and we have been the ability to either turn that investment dial up or down depending on how we want to manage our cash, which will also depend on future monetization, but that really puts us in the control position as it relates to our cash and our capital use.

Gregory Feller: Next one. And then just maybe some on some of those levers when it comes to the wealth business, or maybe the payments business individually. How are you guys thinking about what you want to do with the wealth business moving forward? I know you said marketing will likely increase through the back half of the year, but just maybe give us some color on how to think about the wealth and the payments business individually through the back half of the year.

Adhir Kadve: And then maybe some on some of those levers when it comes to the wealth business and maybe the payments business. Individually, how are you guys thinking about what you want to do with the wealth business moving forward? I know you said marketing will likely increase through the back half of the year, but just maybe give us some color on how to think about the wealth and the payments business individually through the back half.

Speaker Change: Excellent. And then just maybe on some of those levers when it comes to the wealth business and maybe the payments business.

Speaker Change: Individually, how are you guys thinking about what you want to do with the wealth business moving forward? I know you said marketing will likely increase through the back half of the year, but just maybe give us some color on how to think about the wealth and the payments business individually through the back half of the year.

Gregory Feller: So I'll talk about payments, and then Dave can talk about the wealth business, you know, in the payments business. You know, we expect to see continued growth in the payments business, which we've seen consistent growth in. You know, quite frankly, over the last, you know, more than the last year, so we continue to expect continued growth in the payments business from a top-line perspective. As we have mentioned previously, we are making pretty meaningful investments in the payment business, including a significant migration to the cloud. And so during that migration period, we have increased costs.

Gregory Feller: So, I'll talk about the payments, and then Dave can talk about the wealth business. You know, in the payments business, you know, we expect to see continued growth in the payments business, which we've seen consistent growth in the payments business, you know, quite frankly, over the last, you know, more than over the last year. So we continue to expect continued growth in the payments business from top line perspective. As we have mentioned previously, we are in making pretty meaningful investments in the payment business, including a significant migration to the cloud. And so, during that migration period, we have increased cost.

Speaker Change: So I'll talk about the payments, then Dave can talk about the wealth business.

Speaker Change: You know, in the payments business, you know, we expect to see continued growth in the payments business, which we've seen consistent growth in the payments business, you know, quite frankly.

Dave Feller: over the last, you know, more than over the last year. So we continue to expect continued growth in the payments business from a top-line perspective.

Speaker Change: As we have mentioned previously, we are making pretty meaningful investments in the payment business, including a significant migration to the cloud. And so during that migration period, we have increased costs.

Gregory Feller: And we expect by some point in Q1 for that project to be over, and that will result in what we believe will be meaningful savings for us there and really get that business to a cash low positive basis. So we've got some temporary investments we're making on the infrastructure side that we think are the right long-term investments for that business. Again, we were still, you know, quite small in the relative scheme of things in the overall multi-trillion dollar payment industry. We've got some very good customers that we have visibility on growing with them, and we think we've got a unique side proposition as a low cost vendor in the space that has the ability, quite frankly, to undercut a lot of bigger players and known players out there in the market that we think will have challenging time matching our pricing because it'll impact all the rest of the pricing.

Gregory Feller: And we expect by some point in Q1 for that project to be over, and that will result in what we believe will be meaningful savings for us there and really get that business to a cash flow positive basis. So we've got some temporary investments we're making on the infrastructure side that we think are the right long-term investments for that business. And we're still, you know, quite small in the relative scheme of things in the overall multi-trillion-dollar payment industry.

Speaker Change: and we expect by some point in Q1 for that project to be over and that will result in what we believe will be

Speaker Change: David Feller, David Feller, Craig Armitage

Speaker Change: for that business. Again, we were still, you know, quite small in the relative scheme of things in the overall multi-trillion dollar payment industry. We've got some very good customers that we have visibility on growing with them, and we think we've got a unique value proposition as a low-cost vendor in the space.

Gregory Feller: We've got some very good customers that we have visibility into growing with them, and we think we've got a unique value proposition as a low-cost vendor in the space that has the ability, quite frankly, to undercut a lot of bigger players and known players out there in the market that we think will have a challenging time matching our pricing because it will impact all the rest of the pricing. So we think that's a pretty big standalone opportunity separate from the wealth business, and we're going to continue to invest in and go after that opportunity. So anyway, on the wealth side, I'll let Dave talk about our strategy there. Sure.

Speaker Change: that has the ability, quite frankly, to undercut a lot of bigger players and known players out there in the market.

Speaker Change: that we think will have challenging time matching our pricing because it'll impact all the rest of the pricing.

Gregory Feller: So we think that's a pretty big standalone opportunity, separate from the wealth business, and that we're going to continue to invest and go after that opportunity.

Speaker Change: So, we think that's a pretty big standalone opportunity separate from the wealth business and that we're going to continue to invest in and go after that opportunity. So, anyway, on the wealth side, I'll let Dave talk about our strategy there.

David Feller: So, anyway, on the well side, I'll let Dave talk about our strategy there. Sure. Yeah, on the wealth side, as I mentioned in my commentary, it really is a balance between focusing on product improvements, and obviously we live in a world today where it's pretty clear that in many cases better products win, especially in a world driven by social media, referrals, word of mouth. So we're very hyper focused on continuing to prioritize the improvement to the product and actually make that one of the key growth drivers. As we mentioned, we did 21 releases in the last quarter that included hundreds of improvements.

David Feller: Yeah, on the wealth side, as I mentioned in my commentary, there really is a balance between, you know, focusing on product improvements. And obviously, you know, we live in a world today where, you know, it's pretty clear that, in many cases, better products win, especially in a world driven by social media referrals and word of mouth. So we're, you know, very hyper focused on continuing to prioritize improvement to the product and actually make that one of the key growth drivers. As we mentioned, we did 21 releases in the last quarter that included hundreds of improvements.

Speaker Change: Sure.

Dave Feller: Yeah, on the wealth side, as I mentioned in my commentary, it really is a balance between, you know, focusing on product improvements and obviously

Dave Feller: You know, we live in a world today where...

Dave Feller: You know, it's pretty clear that in many cases, you know, better products win, especially in a world, you know, driven by social media, referrals, word of mouth.

Dave Feller: So we're, you know, very hyper-focused on continuing to, you know, prioritize the improvement to the product and actually make that one of the key growth drivers. As we mentioned, we did 21 releases in the last quarter that included hundreds of improvements.

David Feller: Again, every time we do this, we are focusing on measuring it based on things like the net promoter score. We believe there's a strong correlation between a higher NPS score and stronger word of mouth, which obviously then translates into a certain percentage of your new customers coming from word of mouth. Our goal is to get to a place where well over 50% of our new customers are effectively coming from word of mouth, driven by a very good product experience and value proposition. And then complemented by marketing, obviously some of the ones that we mentioned in terms of the new partnerships this quarter, the post media one we're really excited about. That's literally just getting going on.

David Feller: Again, every time we do this, we are focusing on measuring it based on things like the Net Promoter Score. We believe there's a strong correlation between a higher NPS score and stronger word of mouth, which obviously then translates into a certain percentage of your new customers coming from word of mouth. Our goal is to get to a place where well over 50% of our new customers are effectively coming from word of mouth, driven by a very good product experience and value proposition, and then complemented by marketing. Obviously, some of the ones that we mentioned in terms of the new partnerships this quarter, the Post-Media one, we're really excited about. That's literally just getting going, about to have some of our first articles go live there.

Dave Feller: Again, every time we do this, we are focusing on measuring it based on things like the net promoter score. We believe there's a strong correlation between a higher NPS score and stronger word-of-mouth, which obviously then translates into a certain percentage of your new customers coming from word-of-mouth.

Dave Feller: Our goal is to, you know, get to a place where, you know, well over 50% of our new customers are effectively coming from word of mouth, driven by a, you know, very good product experience and value proposition.

Speaker Change: and then complemented by marketing.

Speaker Change: Obviously some of the ones that we mentioned, you know, in terms of the new partnerships this quarter, the post media one we're really excited about. That's literally just getting going. We're about to have some of our first articles go live there.

David Feller: We're about to have some of our first articles go live there. They've got a base of over 17 million monthly active users on that platform. And their goal is to start kind of distributing this new wealth section, which again is sponsored by Mogo and Mocha. That includes a bunch of both sponsored content, but as well as editorial.

David Feller: They've got a base of over 17 million monthly active users on that platform, and their goal is to start kind of distributing this new wealth section, which again is sponsored by Mogo and Moka. That includes a bunch of both sponsored content, but as well as directed editorial, and they are very much aligned on kind of the message that we're trying to go in the marketplace in terms of educating Canadians on the realities of the wealth building space in Canada, some of the pitfalls, and obviously that ultimately directly aligns to our product offering. The point I made in my commentary, which I think is a really important point, is you've really got to look at this stuff long-term and everything, just like investing, compounding, building trust and credibility as they trusted incredible wealth building brand.

Speaker Change: They've got a base of over 17 million monthly active users on that platform and their goal is to start kind of distributing this new wealth section, which again is sponsored by Mogo and Mocha. That includes a bunch of both sponsored content.

David Feller: And they are very much aligned with the kind of message that we're trying to get out in the marketplace in terms of educating Canadians on the realities of the wealth building space in Canada, some of the pitfalls, and obviously, that ultimately directly aligns to our product offering. The point I made in my commentary, which I think is a really important point, is you've really got to look at this stuff long term, and everything, again, just like investing, compounding, building trust, and credibility as a trusted and credible wealth building brand obviously takes time.

Speaker Change: but as well as directed editorial and they are very much aligned on kind of the message that we're trying to go out in the marketplace in terms of educating Canadians on the realities of the wealth building space in Canada, some of the pitfalls and obviously that ultimately directly aligns to to our product offering.

Operator: Finance Technology, Second Quarter 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, please press star zero for the operator.

Speaker Change: You know, the point I made in my commentary, which I think is a really important point is, you know, you've really got to look at this stuff long term and everything, again, just like investing, you know, compounding, building trust and credibility as a trusted and credible wealth building brand obviously takes time.

Craig Armitage: I would now like to turn the conference over to Craig Armitage, investor relations. Please go ahead. Thank you and good afternoon, everyone. Thanks for joining us today. Just a few quick notes before we get started. Today's call will contain four 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.

David Feller: Obviously, takes time. Part of the reason we did this strategic partnership with Tom Lee, obviously, comes down to that. Tom Lee again is a very well-respected U.S. strategist, one of the more respected commentators that are included regularly on CNBC, and so bringing him to our member base while it's going to be doing several in-person events as well, hosted by Tom Lee in the Canadian market. And obviously, again, all of this helps to improve our positioning and establish us as kind of a trusted, incredible wealth building brand in the Canadian space.

David Feller: Part of the reason we did this strategic partnership with Tom Lee obviously comes down to that. Tom Lee, again, is a very well-respected U.S. strategist, one of the more respected commentators that is included regularly on CNBC. And so, bringing him to our member base, we're also going to be doing several in-person events as well, hosted by Tom Lee in the Canadian market. And obviously, again, all of this helps to improve our positioning and establish us as kind of a trusted and credible wealth building brand in the Canadian space. So we think all of that combined will continue to drive growth in the wealth business throughout the next year, the rest of the half of the year leading into 2025.

Speaker Change: you know part of the you know the reason we did this strategic partnership with Tom Lee obviously comes down to that right Tom Lee again is a very well respected

Tom Lee: US strategist, one of the more respected, you know, commentators that are, you know, included regularly on CNBC.

Craig Armitage: Information about the risks and uncertainties are included in Mogo's Q2 filings as well as periodic filings with regulators in Canada and the United States, which will find on EDIR Cedar, and you can access via the investor relations website as well. Lastly, today's session will include several adjusted financial measures or non-IFRS measures. Please consider these as a supplement to and not as a substitute for the IFRS measures. You'll see that we've included reconciliation to those in the press release and in the investor deck.

Speaker Change: and so you know bringing him to our member base while it's going to be doing several in-person events as well posted by Tom Lee in the Canadian market.

Speaker Change: and obviously again all of this helps to you know improve our positioning and establish us as kind of a trusted and credible wealth building brand in the Canadian space. So we think all of that combined will continue to you know drive growth in the wealth business throughout the next

David Feller: So we think all of that combined will continue to drive growth in the wealth business throughout the next, the rest of the half of the year leading into 2025.

Adhir Kadve: And maybe just one last one, more of a clarification. Can you just, I may have missed it in the opening remarks, just the ARPU that you're seeing on the wealth product? I think you said $25 currently and can grow to about 300. Just a clarification on those two metrics.

Adhir Kadve: And maybe just one last one more of a clarification. Can you just, I may have missed it in the opening remarks, just the RPU that you're seeing on the wealth product. I think you said $25 currently and can grow to about 300. Just a clarification on those too much. Fox. So, yeah, no, our current RPU is actually our average RPU of Mogo members across all our products is $25. But with the current pricing of our wealth product, it's effectively an average user would bring in $180 of RPU. So that's the opportunity to increase that overall monetization rate.

Speaker Change: You know the rest of the half of the year leading into 2025

Speaker Change: and maybe just one last one more of a clarification can you just I may have missed it in the opening remarks just the ARPU that you're seeing on the wealth products I think you said $25 currently and can grow to about 300 just a clarification on those two metrics

David Feller: With that, I'll turn it over to Dave Feller. Thanks, Craig. Thank you and good afternoon.

David Feller: Welcome to our second quarter, 2024 call. I'm joined today by Greg Feller, our president and CFO. I'll cover some of the key operating highlights and Greg will dig deeper into the financial results and outlook. It was a solid quarter, both from a financial perspective and a product perspective. A couple of highlights include we generated positive cash flow from operations. We had year-over-year growth in all our business lines and revenue was up 10% year-over-year to 17.6 million. Card as payment volume was up 12% to 2.8 million, and we've also made meaningful improvements in our wealth business.

Gregory Feller: So yeah, no, our current ARPU is actually our average ARPU of Mogo members across all our products at $25. But with the current pricing of our wealth products, it's effectively, an average user would bring in $180 of ARPU. So that's the opportunity to increase that overall monetization.

Speaker Change: So, yeah, no, our current ARPU is actually our average ARPU.

Speaker Change: of Mogo members across all our products is $25.

Speaker Change: But with the current pricing of our wealth products, it's effectively an average user would bring in $180 of our poop. So that's the opportunity to increase that overall monetization rate.

Adhir Kadve: Excellent. That's what I was looking for. Thanks, all guys.

Adhir Kadve: Excellent. That's what I was looking for. Thanks, guys. Appreciate the time, and I'll pass the mic.

Adhir Kadve: Appreciate the time, and I'll pass the link.

David Feller: Today, we look at our business through the lens of three key pillars. Each one has its own unique opportunity for long-term growth. I'll walk through the wealth and Greg will talk about payments crypto. The wealth industry today is estimated over 6 trillion, and that's investable assets, which include brokerage accounts, retirement accounts, RSPs, TFSAs, trusts, etc., and is a growing market. About 2 trillion of that today is sitting in mutual funds, which highlights the opportunity given mutual funds have among the highest fees, many as high as 2%.

Speaker Change: Excellent, that's what I was looking for. Thanks a lot guys, appreciate the time and I'll pass the line.

Scott Buck: Next question comes from Scott Buck of H.C. Wayne Wright Philippines. Go ahead. Hey, good afternoon, guys. Thanks for taking my questions. First, I just wanted to ask you about the state of consumer credit. And then secondly, you know, given the investments you're making in wealth and payments, how should we be thinking about the lending business longer term? Yeah, so look. Sorry, can you hear me? Yeah, I heard. Okay. So yeah, on the lending side, you know, what you've seen is we're right now we've got a relatively flat loan book here, quarter of a quarter. So we're not we have not been aggressive in the lending space.

Operator: The next question comes from Scott Buck of H.C. Wainwright in the Philippines. Go ahead.

Speaker Change: Next question comes from Scott Buck of H.C. Wainwright, Philippines. Go ahead.

Scott Buck: Hey, good afternoon, guys. Thanks for taking my questions. First, I just wanted to ask you about the state of consumer credit. And then secondly, you know, given the investments you're making in wealth and payments, how should we be thinking about the lending business over the long term?

Scott Buck: Hey, good afternoon guys. Thanks for taking my questions. First, I just wanted to ask about the state of consumer credit, and then secondly, given the investments you're making in wealth and payments, how should we be thinking about the lending business longer term?

Unknown Executive: Um, yeah, so look. Sorry, can you hear me?

David Feller: While 98% of professionally managed funds underperformed the S&P 500. For example, Canada's largest mutual fund, the RBC Select Balance Portfolio, has over 53 billion in assets, and has a 10-year average return of 5.8%, and a management fee of 1.67%. Versus a 15% 10-year return for the S&P 500. Now, although you could argue that these two different kinds of portfolios, many who are in this are focused on long-term wealth creation, and don't fully understand the implications. One institution is earning close to a billion dollars a year off of this one fund.

Speaker Change: Yeah, so, look...

Unknown Executive: Yeah, I hear you. Okay, so on the lending side, you know, what you've seen is we're right now with a relatively flat loan book here, a quarter of a quarter, so we're not we have not been aggressive in the lending space. Obviously, you know, there's a massive market in Canada, which we believe we have an opportunity to take advantage of if we wanted to. But we're more focused on balancing any investment there with prioritizing wealth and payments over lending. We do believe, though, in the long-term value of our lending business. We've been in it for 20 years.

Speaker Change: Sorry, can you hear me?

Speaker Change: yeah i heardar

Speaker Change: Okay, so, yeah, on the lending side, you know, what you've seen is we're, right now, we've got a relatively flat loan book here, quarter over quarter, so we're not, we have not been aggressive in the lending space.

Gregory Feller: Obviously, you know, there's a massive market in Canada, you know, which we believe we have an opportunity to take advantage of if we wanted to, but we're more focused on balancing any investment there with prioritizing wealth and payments over lending. We do believe, though, in the long-term value of our lending business; we've been in it for 20 years. We've done over a million loans in Canada and have a very large proprietary database, which we think gives us a very unique advantage. Lending is actually one of the hardest areas to get into because it takes years to build up that data and that capability.

Speaker Change: Obviously, you know, there's a massive market in Canada, you know, which we believe we have an opportunity to take advantage of if we wanted to.

David Feller: To put these returns into perspective, let's assume that you have a $10,000 investment over 50 years. In the balance fund of this rate return, you get to $167,000, versus $1.8 million based on the 11% 50-year average of the S&P 500. That's almost 11 times more money. If the 10-year average of 15% holds, that number would grow to over $10 million. Partners. Same amount of money invested, same time period, but radically different options.

Speaker Change: But we're more focused on balancing any investment there with prioritizing wealth and payments over lending. We do believe, though, in the long-term value of our lending business. We've been in it for 20 years.

Unknown Executive: We've done over a million loans in Canada and have a very large proprietary database, which we think gives us a very unique advantage. Lending is actually one of the hardest areas to get into because it takes years to build up that data and that capability. So it's probably an under-monetized asset right now that Mogo has.

Speaker Change: We've done over a million loans in Canada and have a very large proprietary database.

Speaker Change: which we think gives us a very unique advantage. Lending is actually one of the hardest areas to get into because it takes years.

David Feller: Although there's no lack of investing products in the market today, the reality is the existing solutions in the marketplace just don't come close to solving the problem. Most Canadians aren't coming close to achieving financial freedom. Perhaps no stack communicates this more than a recent retirement survey that showed 75% of Canadians who have yet to retire have saved less than $100,000 versus the estimated $1.7 million average the Canadian thinks they need to retire.

Gregory Feller: So it's probably an under monetized asset right now that Mogo has. But again, we are prioritizing payments and wealth over that today. But I think as we, as we rent those businesses up and those businesses, you know, generate more capital and give us the flexibility to grow the loan book, you know, we'll consider that. We've been, you know, pretty disciplined as it regards the loan book. And so we actually saw an improvement in in charge of rates is quarter over last quarter. So I think overall we feel, you know, comfortable about that market. Obviously, we are expecting the markets to expecting rates to start coming down, which I think is going to help the average consumer, which is positive.

Unknown Executive: But again, we are prioritizing payments and wealth over that today. But I think as we ramp those businesses up, and those businesses, you know, generate more capital and give us the flexibility to grow the loan book, we'll consider that. We've been pretty disciplined as it regards the loan book, and so we actually saw an improvement in net charge-off rates this quarter over last quarter. So I think overall we feel comfortable about that market. Obviously, we are expecting the market's rates to start coming down, which I think is going to help the average consumer, which is positive. So, yeah, I think that's it.

Speaker Change: to build up that data and that capability. So it's probably an under-monetized asset right now that Mogo has.

David Feller: And as we've just reviewed in the previous slide, it's easy to see why so many never come close to it based on some of the products many of them get put into. We've developed a radically differentiated approach to solving the problem that includes a fully managed solution complemented by a self-directed one. As Warren Buffett says, being a great investor is more about temperament than intellect. And as James Clear, the author of Atomic Habit says, much of building good habits comes down to making it harder to do the things that lead to bad outcomes and make it easier to drive the behaviors that lead to positive outcomes.

Speaker Change: but again we are prioritizing payments and wealth over that today but I think as we

Speaker Change: as we ramp those businesses up and those businesses, you know, generate more capital and give us the flexibility to grow the loan book.

Speaker Change: You know, we'll consider that.

Speaker Change: We've been pretty disciplined as it regards the loan book, and so we actually saw an improvement in net charge-off rates this quarter over last quarter.

Speaker Change: So I think overall we feel, you know, comfortable about that market. Obviously, we are expecting, the market's expecting rates to start coming down, which I think is going to help the average consumer, which is positive.

Scott Buck: So, yeah, I think that's kind of our perspective on that. I don't know if I if that was there another question there, Scott. No, no, that that's helpful. That that's okay. It's really helpful.

David Feller: Our products are designed based on behavioral science to make it simple and engaging for anyone to develop the right investing habits while minimizing the ones that tend to lead under performance. Most of our product improvements and road map are directly related to these behavioral improvements. Another disruptive element of our solution is our fee structure. We offer both a fully managed solution along with a commission-free and zero FX fee self-directed investing app, along with a guidance and education investors need all for a simple, low monthly fee of $15 a month.

Speaker Change: So yeah, I think that's kind of our perspective on that. I don't know if I, if that, was there another question there, Scott? No, no, that's helpful. Okay. That's really helpful.

Scott Buck: No, no, that's helpful. That's really helpful. Second, I want to follow up on the Tom Lee and Fundstrat announcement. He's someone who clearly has a lot of reach down here in the States between CNBC and whatnot. I'm curious, did you guys... Issue equity, or what are the economics of this partnership?

Gregory Feller: Second, I want to follow up on the Tom Lee and Fund Strat announcement. You know, he's someone who clearly has a lot of reach down here in the States between, you know, CNBC and what not. I'm curious. Did you guys issue, equity, or what are the economics of this partnership? No, no equity, just they effectively a marketing partnership. And so it's a, you know, we're effectively paying them a fee over the next 12 months, no equity. And that'll all show up in our marketing expense. Okay, perfect. That's great. And then last one, it was touched on in the prepared remarks, the impact that, you know, declining interest rates could have on what you're paying an interest expense on a credit facility.

Speaker Change: Second, I want to follow up on the Tom Lee and Fundstrat announcement. He's someone who clearly has a lot of reach down here in the States between CNBC and whatnot. I'm curious, did you guys...

Speaker Change: Issue equity or what are the economics of this partnership?

David Feller: As a simple comparison, if you had $100,000 in an average mutual fund, your annual fee alone would be around $1600 to $2,000 a year. And if you had a million dollars with a wealth advisor, it would be around $10,000. And for the vast majority, this would all be for the privilege of underperforming and most importantly, being on track to a fraction of the wealth as possible.

Unknown Executive: No, no equity, just an effectively marketing partnership. And so it's a, you know, we're effectively paying them a fee over the next 12 months, no equity. And that'll all show up in our marketing expense.

Speaker Change: No, no equity, just a effectively a marketing partnership.

Speaker Change: And so it's a, you know, we're effectively paying them a

Speaker Change: A fee over the next 12 months, no equity, and that'll all show up in our marketing expense.

David Feller: We're still very early days in our journey in the wealth space and continue to make solid progress every quarter on improving our value proposition through product improvements and how we market and communicate our value problem. This last quarter alone, we released 21 new updates and hundreds of improvements. Mocha is designed to be the core part of your wealth building solution. Mocha is based on the proven long-term performance of the S&P 500.

Scott Buck: Okay, perfect. That's great. And then last one, it was touched on in the prepared remarks, the impact that declining interest rates could have on what you're paying as an interest expense on a credit facility. Could you put some kind of dollar figures around that so we have a sense of, you know, what that could mean on an annual basis in terms of savings.

Speaker Change: Okay, perfect. That's great. And then last one, it was touched on in the prepared remarks, the impact that

Speaker Change: you know declining interest rates could have uh on on what you're paying in interest expense on a credit facility. Could you put some some kind of dollar figures around that so we have a sense of you know what what that could mean on an annual basis in terms of savings?

Gregory Feller: Could you put some kind of dollar figures around that so we have a sense of, you know, what that could mean on an annual basis in terms of savings? Yeah, I mean, look, right now every 1% would mean half a million of cash savings to us. So, you know, we've absorbed the increase in the higher rates, because our facilities on a floating rate basis. So we've absorbed that in the last couple of years, and so obviously lower, you know, those rates coming down give us the opportunity to, you know, get some of that, some of that back and see some of that fall to the bottom line.

David Feller: Again, 98% of professional fund managers underform this index and the average investor generates less than 50% of those returns. Today, we have 18-year-olds who are on track to over 18 million by the age of 78 and over 62 million by age 90, with just a simple $50 a week contribution. It's hard to overstate how disruptive this is to the status quo. The old way would have been to have been sold into mutual fund from the bank and usually much later in life or perhaps download a commission-free trading app with the hopes of getting rich quick.

Unknown Executive: Yeah, I mean, look, right now, every 1% would mean half a million in cash savings to us. So, you know, we've absorbed the increase in the higher rates because our facility is on a floating rate basis. So we've absorbed that over the last couple of years. And obviously, lower rates, those rates coming down, give us the opportunity to, you know, get some of that, some of that back and see some of that fall to the bottom line. But it could be, it could be quite meaningful, depending on how, how, how low rates go. Sure.

David Feller: Oh, and by the way, this is primarily done in the TFSA, so that $62 million would be equivalent to over $124 million in your RSP. What's unique about our solution is we make it easy for anyone to get on a path to being a multi-millionaire with a specific goal and date.

Speaker Change: Yeah, I mean, look, right now, every 1% would mean half a million of cash savings to us, so...

Speaker Change: You know, we've absorbed the increase in the higher rates because our facility is on a floating rate basis.

Speaker Change: So we've absorbed that over the last couple of years. And so obviously lower, you know, those rates coming down give us the opportunity to, you know, get some of that some of that back and see some of that fall to the bottom line. But it could be it could be quite meaningful, depending on how low rates go.

Unknown Executive: But it could be; it could be quite meaningful depending on how, how low rates go. Sure, no, that's very helpful. I appreciate the time, guys. Thank you. Ladies and gentlemen, we are still currently in the question-and-answer session. Should you have a question? Please press the star button followed by the number one on your touchstone phone. You'll hear a prompt that your hand has been raised. Should you wish to decline the polling process? Please press the star followed by the number two. Please wait for further questions.

Speaker Change: Sure. No, that's very helpful. I appreciate the time, guys.

David Feller: How many people today are that are investing? Know the returns and have a plan where they know what they're on track for. Very few.

Operator: Ladies and gentlemen, we are still currently in the question and answer session. Should you have a question, please press the star button followed by the number one on your touchtone phone. You'll hear a prompt that your hand has been raised. Should you wish to decline the polling process, please press the star followed by the number two. Please wait for further questions. There seem to be no further questions at this time. I'd now like to turn the call back over to Dave Feller, founder and CEO. Please go ahead.

Scott Buck: Sure. No, that's very helpful. I appreciate the time, guys. Thank you. Ladies and gentlemen, we are still here.

Speaker Change: Thanks.

Speaker Change: Ladies and gentlemen, we are still currently in the question and answer session. Should you have a question, please press the star button followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline the polling process, please press the star followed by the number two.

David Feller: One of the unique and engaging features we launched last quarter was our new leaderboard.

David Feller: The showcases some of our top members and help celebrate and gamify getting rich. It's also important to understand the impact of this on people today versus waiting decades to achieve their goal.

David Feller: Mental health is an important topic, especially for Gen Z, and given financial stress is still the number one stress recalls all demographics. Nothing helps improve it more than being confident around investing in financial freedom. Although it may take decades to achieve the goal, the benefits of being confident on a path to financial freedom and to your self-esteem and confidence are immediate.

Speaker Change: Please wait for further questions.

Unknown Executive: There seems to be no further questions at this time.

David Feller: I'd now like to turn the call back over to Dave Feller, Founder and CEO. Please go ahead.

Speaker Change: There seems to be no further questions at this time. I'd now like to turn the call back over to Dave Feller, Founder and CEO . Please go ahead.

David Feller: Well, thanks again for joining us on our Q2 update. Just also wanted to end by saying a big thank you to the entire Mogul and Card team. The team has been working hard, you know, for the last year, but definitely in the last quarter. And I think we're starting to see, you know, a lot of the positive impacts, you know, come through in terms of just the business performance and especially where we are in some of the product priorities like wealth and payments.

David Feller: Well, thanks again for joining us for our Q2 update. I just also wanted to end by saying a big thank you to the entire Mogo and Carta team. The team has been working hard, you know, for the last year, but definitely in the last quarter, and I think we're starting to see a lot of the positive impacts come through in terms of just the business performance and especially where we are on some of the product priorities like wealth and payments. So again, a big thank you to the team there, and we look forward to updating you after our next quarter. Thank you.

David Feller: Another unique element of our Welping Building Platform is Mogo, our self-directed investing app. One of Buck's favorites quotes is that Wall Street makes more money by getting people to gamble than to invest. The fact is, most of these apps have been designed to get you to trade, as that's what drives their revenue, but the data is clear.

Dave Feller: Well thanks again for joining us on our Q2 update. Just also wanted to end by saying a big thank you to the entire Mogo and Carta team.

Speaker Change: The team has been working hard, you know, for the last year, but definitely in the last quarter.

Speaker Change: and I think we're starting to see a lot of the positive impacts come through in terms of just the business performance and especially where we are in some of the product priorities like wealth and payments. So again, big thank you to the team there and we look forward to updating you after our next quarter.

David Feller: The more you trade, the more you underperform. What's more, they would like you to believe that it's easy to trade, and because it's now even commission-free, it's available to everyone. Well, the reality is, the only thing that has happened is that they have made it easier than ever to gamble and speculate on stocks.

Unknown Executive: So again, big thank you to the team there, and we look forward to updating you after the next quarter. Thank you.

Unknown Executive: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.

David Feller: Trading and gambling is easy, but serious investing that produces long-term, good results is very hard. We believe Mogo is the only self-directed investing app that is designed to actually get investors to trade less and focus more on proven long-term value investing. One of our latest features is Buffett Mode, and that now makes it easier for than ever for someone to learn how to invest based off the principles of the greatest investor of all time.

Speaker Change: Ladies and gentlemen this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.

David Feller: Buffett Mode is mostly focused on helping investors gain the knowledge, skills, and discipline needed to be a better investor while moving away from behaviors like trading and gambling that lead to losses and underperformance. These include TikTok style educational videos from Buffett himself, explaining everything from circled competence to how he calculates intrinsic value. It's like having Warren Buffett as your investing co-pilot.

David Feller: Customer feedback is critical to us to helping us make sure that we're focused on the right things, which is why one of our new features allow any user to simply shake the app and share their feedback on the product. What they like, what they don't like, etc. This feedback goes directly into the Slack channel that all of us including myself read constantly. Every day we review all customer feedback and incorporate that in our plans. Accelerating this feedback loop has had a big impact on speeding up the rate of which we identify the right things to focus on.

David Feller: As part of our go-to-market strategy, we've also recently formed a key strategic partners with post-media to launch a new wealth section designed to help educate Canadians on the pitfalls of existing solutions in the marketplace, and the impact that the right approach and strategy can have in terms of your ability to achieve financial freedom. We also formed a partnership with Tom Lee, a fund strat who's a frequent CNBC contributor and has widely considered one of the most thoughtful strategies on Wall Street today. To give our wealth members exclusive access to his investment research and further establish us as a leading platform for serious investors.

David Feller: Again, we are clearly at the beginning of this journey to disrupt the wealth space in Canada, and we're pleased with the progress we've made this quarter. Like investing, we are taking a long-term compounding approach. It takes a while to gain the trust and credibility as a wealth brand, and these partnerships along with the product improvements we made this quarter are important and meaningful steps towards us.

Gregory Feller: With that, I'll turn it over to Greg. Thanks, Dave, and good afternoon. Let me quickly discuss the two other pillars of our business beginning with our payments business, CARDA. CARDA had another solid quarter is reflected by a 12% year-over-year increase in payments volumes of 2.8 million billion, putting them on an annual run rate of more than 10 billion. We continue to be very excited about this business and the long-term prospects working with exciting global partners, customers like Ploxian, France, and Albany, K. Another major pillar of our business is our crypto-related investments, which collectively today represent close to 50% of our market cap, although importantly, represents 0% of our revenue as Mogo today doesn't have any operating businesses in crypto.

Gregory Feller: The largest of these investments is 87 million shares in Canadian crypto exchange, Wendrify, which is listed on the TSS. You may have seen Wendrify reported results Q2 results yesterday, highlighted by a 370 increase in client assets under custody to about 1.4 billion, and they're in a strong financial position with cash and digital assets, the 47 million in no debt. Turning to Mogo's financials, it was another quarter of year-of-year growth of our business was delivering on a key cash low milestone.

Gregory Feller: After making some tough decisions in 2022 to accelerate our past profitability, which resulted in a reduction of our quarterly off-ex by 50%, we've delivered our second consecutive quarter of year-of-year growth in Q2 of 17.6 million, up 10% year-of-year. The discipline and cost has continued even while returning to growth mode with off-set flat year-of-year. Sequentially, marketing spend was actually down in Q2 as we have still been more focused on product improvements for wealth apps that they've touched on rather than increasing marketing, which we believe is the right balance to really build the best-in-class product and generate more viral components.

Gregory Feller: We expect marketing will slowly ramp as we head into 2025 while remaining focused on growing EBITDA and manage your cash low. Q2-adjusted EBITDA came in at 1.4 million, down modestly from the same period last year, but importantly, up 40% sequentially from Q1. We've also seen a substantial increase in cash low from operations before discretionary investment in loan book. This metric was positive for the seventh consecutive quarter and rose to 3.8 million in Q2 for the 2.1 million in the prior year period, which enabled us to reach an important milestone, a positive cash low from operations, which came in at a positive 0.5 million in the quarter versus negative 1.8 million in Q2 of last year.

Gregory Feller: Dave talked about the continued improvements we were making to our wealth products, MoGO and MoCA, including the significant value enhancing updates we're at. These changes will not only help our users investing build wealth more intelligently, but they will also create a significant opportunity for MoGO to increase RPU. Today, our RPU across our consumer base products is $25, while RPU just for a wealth product is $180, which represents a huge opportunity for us to continue to increase the monetization rate of our member base of over 2 million Canadians.

Gregory Feller: We ended the quarter in a solid financial position with cash and total investments of roughly 41 million. This included combined cash and restricted cash of 11.3 million, investment portfolio of 11.6 million, and marketable securities of 18.6 million. Importantly, as I mentioned earlier, we had a milestone quarter with positive overall cash flow from operations, but even more broadly, if you exclude share buybacks and debt repayment, we generated positive overall cash flow after investing in financing activities in the quarter as well.

Gregory Feller: We also continue to expect monetization opportunities from our investment portfolio over the next 12 months. Turning to our outlet for fiscal year 2024, we continue to expect subscription services revenue to grow in the mid-teen for the full year, and we're also introducing adjusted EBITDA guidance for the full year of 5 to 6 million.

Gregory Feller: Lastly, I think it's also worth highlighting that given our credit facility is on a floating rate basis, we will also see meaningful savings from any future rate reductions, which the market is currently predicting.

Operator: With that, we will now open the call to questions. Thank you. Ladies and gentlemen, we will now begin the question in the answer session. Should you have a question, please press the star button followed by the number one on your touch tone phone. You'll hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star button followed by the number to. If you are using a speaker phone, please lift the handset before pressing any keys. One moment from your first question.

Adhir Kadve: First question is from Adhir Kadve from A to Capitol. Please go ahead. Hey guys, good afternoon and thanks for taking my questions here. One of the things that kind of caught my eye and I felt was important in the corridor was that you guys were casual positive on a consolidated company level. Can you give us a sense of how you're kind of thinking about your cash moving forward through the back half of the year? Yeah, thanks Adhir. And just to put a final point on it, we were casual positive on a consolidated basis, excluding debt repayment and share buyback.

Gregory Feller: But importantly, the point is the reason this was such a milestone quarter for us is that it really starts at the cash flow from operations level, which was the first quarter since 2020 when we were not really investing in the loan book, where we actually reported a positive overall cash flow from operations. And that means that we generated enough cash from our operations to actually internally sell fund any investment made in the loan book.

Gregory Feller: And then if you sort of look at the other cash flow components, excluding discretionary share buybacks and debt repayment, we actually generated overall cash. So I think the reason this is so important is we've shown that we've got the business to a level in terms of revenue and op-ex that we can really self-sustained the business, at least at a flat loan book, while continuing to invest in growing our wealth and our payments business, which continues to grow.

Gregory Feller: And we have been the ability to either turn that investment dial up or down depending on how we want to manage our cash, which will also depend on future monetization. But that really puts us in the control position as it relates to our cash and our capital use.

Gregory Feller: Next one. And then just maybe some on some of those levers when it comes to the wealth business, or maybe the payments business individually. How are you guys thinking about what you want to do with the wealth business moving forward? I know you said marketing will likely increase through the back half of the year, but just maybe give us some color on how to think about the wealth and the payments business individually through the back half of the year.

Gregory Feller: So, I'll talk about the payments, and then Dave can talk about the wealth business. You know, in the payments business, you know, we expect to see continued growth in the payments business, which we've seen consistent growth in the payments business, you know, quite frankly, over the last, you know, more than over the last year. So we continue to expect continued growth in the payments business from top line perspective. As we have mentioned previously, we are in making pretty meaningful investments in the payment business, including a significant migration to the cloud.

Gregory Feller: And so during that migration period, we have increased cost. And we expect by some point in Q1 for that project to be over, and that will result in what we believe will be meaningful savings for us there and really get that business to a cash low positive basis. So we've got some temporary investments we're making on the infrastructure side that we think are the right long-term investments for that business. Again, we were still, you know, quite small in the relative scheme of things in the overall multi-trillion dollar payment industry.

Gregory Feller: We've got some very good customers that we have visibility on growing with them, and we think we've got a unique side proposition as a low cost vendor in the space that has the ability, quite frankly, to undercut a lot of bigger players and known players out there in the market that we think will have challenging time matching our pricing because it'll impact all the rest of the pricing. So we think that's a pretty big standalone opportunity, separate from the wealth business, and that we're going to continue to invest and go after that opportunity.

David Feller: So, anyway, on the well side, I'll let Dave talk about our strategy there. Sure. Yeah, on the wealth side, as I mentioned in my commentary, it really is a balance between focusing on product improvements, and obviously we live in a world today where it's pretty clear that in many cases better products win, especially in a world driven by social media, referrals, word of mouth, so we're very hyper focused on continuing to prioritize the improvement to the product and actually make that one of the key growth drivers.

David Feller: As we mentioned, we did 21 releases in the last quarter that included hundreds of improvements. Again, every time we do this, we are focusing on measuring it based on things like the net promoter score. We believe there's a strong correlation between a higher NPS score and stronger word of mouth, which obviously then translates into a certain percentage of your new customers coming from word of mouth. Our goal is to get to a place where well over 50% of our new customers are effectively coming from word of mouth, driven by a very good product experience and value proposition, and then complemented by marketing.

David Feller: Obviously, some of the ones that we mentioned in terms of the new partnerships this quarter, the post-media one, we're really excited about that's literally just getting going about to have some of our first articles go live there. They've got a base of over 17 million monthly active users on that platform, and their goal is to start kind of distributing this new wealth section, which again is sponsored by Mogo and Moka. That includes a bunch of both sponsored content, but as well as directed editorial, and they are very much aligned on kind of the message that we're trying to go in the marketplace in terms of educating Canadians on the realities of the wealth building space in Canada, some of the pitfalls, and obviously that ultimately directly aligns to our product offering.

David Feller: The point I made in my commentary, which I think is a really important point, is you've really got to look at this stuff long-term and everything, just like investing, compounding, building trust and credibility as they trusted incredible wealth building brand. Obviously takes time. Part of the reason we did this strategic partnership with Tom Lee obviously comes down to that. Tom Lee again is a very well-respected U.S, strategist, one of the more respected commentators that are included regularly on CNBC, and so bringing him to our member base while it's going to be doing several in-person events as well, hosted by Tom Lee in the Canadian market.

David Feller: And obviously again, all of this helps to improve our positioning and establish us as kind of a trusted, incredible wealth building brand in the Canadian space. So we think all of that combined will continue to drive growth in the wealth business throughout the next, the rest of the half of the year leading into 2025.

Adhir Kadve: And maybe just one last one more of a clarification. Can you just, I may have missed it in the opening remarks, just the RPU that you're seeing on the wealth product. I think you said $25 currently and can grow to about 300 just a clarification on those too much. Fox. So, yeah, no, our current RPU is actually our average RPU of Mogo members across all our products is $25. But with the current pricing of our wealth product, it's effectively an average user would bring in $180 of RPU. So that's the opportunity to increase that overall monetization rate. Excellent. That's what I was looking for. Thanks, all guys.

Adhir Kadve: Appreciate the time and I'll pass the link.

Scott Buck: Next question comes from Scott Buck of H.C. Wayne Wright Philippines.

Scott Buck: Go ahead. Hey, good afternoon, guys. Thanks for taking my questions. First, I just wanted to ask you about the state of consumer credit. And then secondly, you know, given the investments you're making in wealth and payments, how should we be thinking about the lending business longer term? Yeah, so look. Sorry, can you hear me? Yeah, I heard. Okay. So yeah, on the the lending side, you know, what you've seen is we're right now we've got a relatively flat loan book here, quarter of a quarter.

Scott Buck: So we're not we have not been aggressive in the lending space. Obviously, you know, there's a massive market in Canada, you know, which we believe we have an opportunity to take advantage of if we wanted to, but we're more focused on balancing any investment there with prioritizing wealth and payments over lending. We do believe, though, in the long term value of our lending business, we've been in it for 20 years. We've done over a million loans in Canada and have a very large proprietary database, which we think gives us a very unique advantage.

Scott Buck: Lending is actually one of the hardest areas to get into because it takes years to build up that data and that capability. So it's it's probably an under monetized asset right now that Mogo has. But again, we are prioritizing payments and wealth over that today. But I think as we as we rent those businesses up and those businesses, you know, generate more capital and give us the flexibility to grow the loan book, you know, we'll consider that.

Scott Buck: We've been, you know, pretty disciplined as it regards the loan book. And so we we actually saw an improvement in in charge of rates is quarter over last quarter. So I think overall we feel, you know, comfortable about that market. Obviously we are expecting the markets to expecting rates to start coming down, which I think is going to going to help the average consumer, which is which is positive. So yeah, I think that's kind of our perspective on that. I don't know if I if that was there another question there Scott. No, no, that that's helpful. That that's okay. It's really helpful.

Scott Buck: Second, I want to follow up on the the Tom Lee and Fund Strat announcement. You know, he's someone who clearly has a lot of reach down here in the in the States between, you know, CNBC and what not. I'm curious. Did you guys Issue, Equity, or what are the economics of this partnership? No, no equity, just they effectively a marketing partnership. And so it's a, you know, we're effectively paying them a fee over over the next 12 months, no equity. And that'll all show up in our marketing expense. Okay, perfect. That's great.

Gregory Feller: And then last one, it was touched on in the prepare remarks, the impact that, you know, declining interest rates could have on what you're paying an interest expense on a credit facility. Could you put some some kind of dollar figures around that so we have a sense of, you know, what, what that could mean on an annual basis in terms of savings? Yeah, I mean, look, right now every 1% would mean half a million of cash savings to us.

Gregory Feller: So, you know, we've absorbed the increase in in the higher rates, because our facilities on a floating rate basis. So we've absorbed that in the last couple of years and so obviously lower, you know, those rates coming down give us the opportunity to, you know, get some of that, some of that back and see some of that fall to the bottom line. But it could be, it could be quite meaningful depending on how, how low rates go. Sure, no, that's very helpful. I appreciate the time guys. Thank you.

Operator: Ladies and gentlemen, we are still currently in the question and answer session. Should you have a question? Please press the star button followed by the number one on your touchstone phone. You'll hear a prompt that your hand has been raised. Should you wish to decline the polling process? Please press the star followed by the number two. Please wait for further questions. There seems to be no further questions at this time.

David Feller: I'd now like to turn the call back over to Dave Feller, founder and CEO. Please go ahead. Well, thanks again for joining us on our Q2 update. Just also wanted to end by saying a big thank you to the entire mogul and card team. The team has been working hard, you know, for the last year, but definitely in the last quarter. And I think we're starting to see, you know, a lot of the positive impacts, you know, come through in terms of just the business performance and especially where we are in some of the product priorities like wealth and payments. So again, big thank you to the team there and we look forward to updating you after the next quarter. Thank you.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.