With a 12% increase in payment volume through its Carta service to $2.8 billion and a 10% increase in revenue to $17.6 million, Mogo Finance Technologies Inc. (MOGO) reported a strong second quarter. The corporation made significant advancements in its wealth division with the goal of upending the mutual fund market with an accessible and user-friendly platform for investment.
Mogo had almost $41 million in cash, investments, and marketable securities at the conclusion of the quarter, indicating a solid financial situation. The company’s approach, which prioritizes long-term wealth and payment development while maintaining a positive operating cash flow, was highlighted by CEO Greg Feller. Even though investments in cryptocurrency account for about half of Mogo’s market capitalization, they don’t generate any money at the moment. For the upcoming fiscal year 2024, Mogo intends to increase marketing activities and anticipates growth in the mid-teens for subscription service revenue, with adjusted EBITDA estimate of $5 million to $6 million.
Overview Of Q2
A strong second quarter for Mogo Finance Technologies Inc. (MOGO) indicates that the company has undoubtedly been making progress in all of its business areas. But a closer look at the business’s finances and stock performance via InvestingPro’s perspective paints a more complex picture. According to InvestingPro Tips, MOGO is anticipated to encounter difficulties since its net income is anticipated to decrease this year. Regarding the company’s profitability for the current fiscal year, analysts are pessimistic. Despite having a respectable cash position, the company is depleting its reserves swiftly, which may raise questions about its long-term financial viability. Furthermore, MOGO’s stock performance over the last month, three months, six months, and even five years has been lackluster, with notable price losses.
Mogo Finance’s Revenue In Q2
In Q2, its revenue increased by 10% to $17.6 million. Carta processed $2.8 billion in payments, a 12% increase in volume. Wealth management company with a mission to upend established mutual funds through accessible, managed solutions. In Q2, there was a drop in marketing expenditure paired with positive operating cash flow. The market capitalization of cryptocurrency assets is close to 50%, but they generate no revenue. Wealth items have an ARPU of $180, indicating possibilities for monetization. At the end of the quarter, cash and total investments were about $41 million. Revenue from subscription services is anticipated to increase in the mid-teens for the 2024 fiscal year. For 2024, adjusted EBITDA forecast of $5 million to $6 million was introduced.
Mogo Finance’s Market Capitalisation
With a market value of $31.81 million, MOGO is a large player in the business. Investor uncertainty over future profits potential is reflected in the company’s negative Price to profits (P/E) ratio of -2.62. As of Q2 2024, the P/E ratio adjusted for the previous 12 months is likewise negative, at -2.14. These numbers, along with a negative PEG ratio of -0.03, imply that the company’s growth is not commensurate with its predicted earnings. As of Q2 2024, revenue has dropped by roughly 7% over the previous 12 months despite a 10% quarterly revenue gain.
