Ladies and gentlemen, thank you for standing by. I will now introduce Mr. Craig Armitage of Investor Relations. Please go ahead, sir..

Thank you, operator. Good afternoon, and thanks for joining us today, and thanks for your patience. Just a couple of quick notes before we get started. [Technical Difficulty] required by law.

Information about these risks and uncertainties are included in our Q4 and year-end '21 filings, as well as periodic filings with regulators in Canada and the U.S., which you can find on SEDAR, EDGAR and the website. Second, today's discussion will include adjusted financial measures, which are non-IFRS measures.

These should be considered as a supplement to and not as a substitute for IFRS measures, and you can find reconciliations in the filings. And lastly, the amounts today are discussed in Canadian dollars, unless otherwise indicated. We were a little delayed getting the presentation up.

That was the cause of the delay and our normal practice, of course, is to have slides you will see that available PDF for download in the handouts panel. So I appreciate your patience again with that. And I'll turn the call over to Dave Feller to get us started.

Dave?.

passive investing and active investing. Both of these are critical components of the digital wealth platform. MogoTrade is our active investing solution, and Moka today is our passive investing solution. We believe both are needed.

MogoTrade has been our #1 growth initiative for the last year and without a doubt, the most important product we have ever developed. Our acquisitions of Moka and Fortification were a key part of this, along with the focus of the entire team over the last year.

We successfully got regulatory approval and launched our app and wait list at the end of 2021. Trade is designed to be a best-in-class next-gen trading platform, beginning with commission-free stock trading and with the goal of expanding into crypto and other products, including NFTs.

Now this obviously ties into our strategic investments, and we believe positions us to be one of the leaders in Canada. The next-generation wealth building platforms are going to look a lot different than what's in the market today.

Crypto, NFTs and stocks are all going to be part of the next-generation financial assets and building a platform for this new world is what we are focused on. And like our card, we built it in with impact so that every investment you make also has a positive impact. Members will also be able to access their impact right in the app.

Our goal remains to remove the wait list in Q2 and ramp up marketing later on in the quarter. With over 100,000 active subscribers, Moka continues to be an important part of our subscription revenue, but perhaps more importantly, is how we are evolving this into a best-in-class passive long-term investing solutions.

As much as we believe in active investing, the facts also support the passive should be a key part of anyone's long-term wealth building plan and setting up an automated vesting program that invest with low-cost ETFs is a key.

Moka is initially designed as more of a short-term saving solutions and with some small adjustments, we are turning it into a powerful best-in-class long-term wealth building solution. We put a graph here to highlight how different returns can be through one of these strategies.

We compared a 100% allocation strategy versus a typical 85% allocation strategy to equities along with the difference between a 0.5% fee that some competitors charge versus our current monthly fee. And the differences are shocking as you can see.

The point here is for long-term wealth building, your allocation and your fees matter a lot and that's how we're evolving this product so that it truly delivers best-in-class results. We continue to believe that marketing can also become a competitive differentiator and that companies that win will also have a brand that connects emotionally.

Besides leveraging social media and traditional marketing channels, we've put a lot of work and focus on connecting emotionally and you'll be seeing that with our upcoming MogoTrade campaign that we expect to launch sometime in Q2.

In banking today, there's not much differentiation between brands, but for the next generation, we think it matters and relevancy matters. Although, the Canadian market doesn't seem large by global standards, this is still a market where the top 5 largest banks made over $50 billion in net profits last year.

As one of the leading fintechs in Canada, we are well positioned and there's a strong barrier to entry given the regulatory environment. As we continue to build out our platform in key areas like legal and compliance, we are creating a competitive moat that isn't easy to replicate.

And it's not just the dollars that are invested but the years of work needed to get to where we are today, and we'll continue to build on this moat every quarter.

Although, we have made a lot of progress in the last year, we are still clearly early -- at the early stages of our journey and the opportunity which is why we're continuing to invest heavily in building out our platform and positioning us for long-term growth.

Key areas of investment include product development, sales and marketing, regulatory and compliance and market expansion in our payments business. We also continue to evaluate acquisition opportunities that can accelerate our growth and mission. With that, I'll pass it over to Greg..

Thanks, Dave, and good afternoon. I will now go deeper on some of the key metrics and trends that Dave touched on. The milestone year for Mogo both strategically and financially capped off by a record Q4 revenue that showcases the strength and diversification of our business.

Our fourth quarter results were again highlighted by accelerating top line growth in subscription services that exceeded our guidance. Key fourth quarter highlights include $8.6 billion in payment processing volume, record organic net member additions, third quarter in a row of accelerating revenue growth.

Fourth -- and in the fourth quarter, we generated strong positive contribution from our diversified revenue base. And lastly, we ended the year with a very healthy financial position with cash and total investment portfolio in our balance sheet of approximately $193 million.

Mogo's total member base increased 64% over last year to approximately 1.9 million members. The approximate 800,000 in net member additions during the year was split roughly 50-50 between organic and acquisitions.

The scale of our member base is clearly one of the big competitive differentiators for Mogo in the fintech landscape in Canada and gives us the ability to more quickly launch and scale new products like MogoTrade.

Once MogoTrade is fully rolled out, we expect to see accelerating net member additions and ultimately increase engagement monetization rate. Our new member growth was matched by accelerating revenue growth in the quarter, which increased by 70%.

Q4 revenue growth was fueled by accelerating subscription services revenue, which grew 135% for the quarter, reaching $34.4 million in 2021. The revenue segment now accounts for 60% of our total revenue.

Growth came from both acquisitions we completed as well as an increasing diversified set of products and revenue streams, including strong year-over-year growth in subscription revenue and our MogoCard. Crypto-related revenue was volatile during the quarter but increased significantly during the year.

However, it still remains a small percent of our total subscription services revenue.

Contribution, which is gross profit less our funding interest expense and customer service and operations expense is the measure we use to understand and evaluate our core operating performance and trends before accounting for investments we are making across our platform.

We view this metric as a good indicator of the operating leverage our model has as we scale. Contribution profit increased 51% in Q4 to $7.6 million, and it grew 43% for the full year to $28.7 million. These increases are partially driven by incremental contribution generated by core Mogo business, along with positive contribution of our acquisitions.

We believe that the significant investments we are making in our platform today that Dave spoke about, including development of MogoTrade, MogoInvest our payments business will help further solidify our position in Canada and become important drivers of growth long term.

Our strong contribution margin, along with our strong balance sheet gives us confidence in maintaining these investment levels as we move to '22. An important and valuable distinguishing factor in our business model is a high percentage of recurring revenue and the diversification of this revenue.

We believe that this is becoming even more valuable during a period of continued financial market volatility. We're having a predictable -- predictability in our core business base of revenue increases in importance.

In addition to growing our member base, we also saw an increase in the monetization rate of our members, which has been driven by an expanding set of relevant products like MogoCard, MogoInvest, MogoMoney and the rollout of MogoTrade.

Specifically, over the last 12 months, we've increased the monetization rate of our member base from under 10% to approximately 14%.

When you compare our average revenue across all our members to our average revenue per monetized member, you can see that the payoff to continuing to increase our member base is significant at almost 8x the ARPU level across the total member base.

As we have also discussed before, there remains an even larger long-term opportunity to drive higher ARPU as the average leading Canadian bank and credit union is approximately $1,000 or higher.

Carta, our payments business had a good year and as you saw generated $8.6 billion volume last year, up 50% over the prior year for Carta prior to the acquisition by Mogo. After a year going the business, we are increasingly excited about the tremendous long-term growth opportunity this business represents.

As a result, we're investing in the business in '22, which includes the recent appointment of Allan Smith as Head of Carta. Allan is a proven fintech leader with directly relevant sector experience from the time at U.S. payments leader, Galileo, and we're very excited to have him on our team.

As we look to '22 growth from this business, we will see some first half headwinds as a customer rolls off. Excluding this onetime event, we are expecting another growth year and excited to have Allan in the role to guide the team through the next phase of growth within a massive global TAM.

Along with our earnings results today, we also announced the formation of Mogo Ventures to manage our existing investment portfolio, strategic partners and companies that support Mogo's ecosystem. The portfolio has a book value on our balance sheet of approximately $124 million.

Our 39% safety in Canada's leading crypto exchange Coinsquare is by far the largest investment in the portfolio and one in which we continue to be very excited about both today and longer term.

In the latest quarter, Coinsquare saw revenues increase about 40% sequentially over Q3, and we also recognized positive net income to our equity recognition for the quarter. The company is also well capitalized with close to $100 million of cash and other investments on the balance sheet at year-end.

More importantly, however, we believe Coinsquare is positioned to become the first fully regulated crypto exchange in Canada this year. We believe this will be a milestone event for both the company and the industry. And as Coinsquare's largest shareholder, Mogo is very well positioned to benefit from the value creation of this major milestone.

It's also important to note that the value of our investment in Coinsquare is based on our book value acquisition as we don't mark the position of market value, and it does not include any value of our warrant to purchase up to an additional 10% in the company, which is separately recognized in our balance sheet.

Separately, this portfolio includes an investment in Canada's first digital asset trust, Tetra, along with our 25% stake in the global NFT trading platform, NFT Trader, which Dave spoke about earlier.

We also have a number of legacy investments in the portfolio, which will -- we will focus on finding ways to monetize and believe that some of these investments could be monetized over the next 6 to 12 months.

Over the past several years, Mogo has been able to leverage its leadership position in the Canadian fintech industry to make a number of attractive investments in other emerging players in the Canadian market. Today's announcement clearly highlights the significant value that these investments represent for our shareholders.

As we continue to build out Canada's leading financial technology and payments platform, we will continue to look for ways to participate in value creation opportunities with our partners that drive incremental shareholder value.

With today's results, we also reiterated our guidance for 2022, which is based on the investments we are making and the growth opportunities we see across our business.

Specifically, in fiscal year 2022, Mogo is targeting total revenues of $75 million to $80 million and improving adjusted EBITDA as a percentage of revenue in the second half of the year. Lastly, as you may have seen with today's earnings, we announced that the Board has approved a share repurchase program of up to USD 10 million.

While our primary focus is to invest in our platform and new products, the current market volatility may continue to present attractive buying opportunities.

Put simply, we believe our share price does not reflect the fair value of the business, including the significant assets and components of value I discussed, and our strong balance sheet puts us in a position to take advantage of those situations on behalf of our shareholders. With that, we will now open the call to questions..

[Operator Instructions]. Your first question is from the line of Adhir Kadve with Eight Capital..

So my first question will be just on MogoTrade.

Full rollout in Q2, what do you guys really expecting in terms of the rollout? How do you plan on going to market? And any other details surrounding that?.

Sure. So it's Dave. Yes, our plan is to -- we're continuing to accelerate our invitations. And obviously, this is a new product and as much as we're excited about it, it's always about really making sure that when you release it, it delivers. So we're trying to be kind of careful and mindful around kind of that approach.

But given everything we've done so far in all of our testing, we're increasingly confident and we're accelerating our invitations. And we expect to eliminate the need for an invitation so that somebody can sign up directly by downloading the app, the wait list, most likely targeting near the end of April. So next month, first month of Q2.

But that also is subject to making sure things are going well. If we feel we need to extend it a little bit more, we will. But generally, that's where we feel we're on track for that. And then post that, we're again going to be careful in terms of the timing of hitting the go button on our marketing campaign.

So we've been working on a big ad campaign that is going to be ready to go beginning of May. But it's -- we'll have to see in terms of when we think that right timing is, but we do expect at some point in Q2 to ramp up the marketing efforts really focused specifically on the MogoTrade product, and that also includes, obviously, social PR, et cetera.

So one of our more significant marketing campaigns that we've ever done for a product launch. And then obviously, marketing to our member base as well..

Yes. No, that makes sense. Just maybe -- I know it's probably a little bit early, but could you just maybe touch on some of the learnings since it's been kind of active since late December.

Some of the thing's you guys have learned or some things you guys are kind of looking at that kind of -- any trends you'd like to call out?.

On what -- sorry, on trade?.

On trade. Yes, just from like, I guess, not really a soft rollout, but you said you'd do a phased rollout through Q1. And so just any learnings behind that, that you guys can maybe call out..

Mostly that's just around identifying areas of the experience that we have to improve. I mean, that really is the big one.

So I mean, one of the big differences you'll notice when you download the MogoTrade app and you sign up and you make a trade, for example, there's a new TD easy trade app in the market, and they've just launched it, and they're targeting the younger generation. This is a night and day experience compared to that.

Every part of that experience is designed to be a really cool, engaging experience, not only simple but actually an engaging experience.

So a lot of work has gone into not just the functionality does it work, but actually an experience that actually people would go, okay, that is a cool experience, right? So everything no different than what you see right now in the app in terms of the real-time streaming quotes tick by tick, that typically is not anything you would see in any of the major brokerage app, right? You typically have to refresh those types of things and getting the feedback on just the experience, which also includes the copy, does it make sense? Does somebody intuitively understand all these different components? So I'd say those are the primary learnings that we're getting along with, obviously, at this stage, you're always identifying some bucks.

So using more people you get on there, the more likely you are to identify bugs that you obviously solve. And then once you've identified those bugs that obviously gets you to a level of confidence where you're like, hey, we're prepared to release it from a wait list and now anybody can sign up.

So generally, I'd say those are the primary learnings that we've been focused on..

That's great. And then maybe just one more question, just broader on the overall investments that you guys were talking about in the end of your preamble there. Can you maybe just remind us some of the key priorities outside of MogoTrade, I know you mentioned B2B payments.

Just any additional color on what kind of investments you'll be making this year outside of MogoTrade?.

Greg, do you want to speak to that?.

Yes. Apologies, you cut out for me at the beginning. So investments outside of MogoTrade. So yes, I would say, #1, as we talked about Carta, we're making a big commitment to invest there. We are big believers in the long-term opportunity, we've got, we believe, a number of exciting opportunities.

And obviously, that's a massive global TAM of over a couple of trillion. So obviously, think of Mogo as a B2C consumer business in Canada and then more of a B2B payments business outside of Canada.

And again, with the appointment of Allan to head up that team, we're committing resources and capital to invest there because we do believe that going forward in 2023 and beyond, that Carta can be a much more meaningful component of overall growth.

We're continuing to invest in the card and that carbon offset experience, as well as MogoInvest and sort of bringing in Moka, the Moka product into the broader Mogo ecosystem under the banner of MogoInvest, but those would be the priorities..

Your next question is from the line of Scott Buck with H.C. Wainwright..

I guess first question for me, can you remind us, how large of an opportunity do you guys believe trade could end up being?.

Well, yes, I mean I think -- look, I think if you step back and you look at what is the market that we're going after here, this is today, initially, just equity trading. But as Dave has articulated, this is a lot more than equity trading. This is a next-gen trading platform.

And ultimately, that will include other assets like crypto, like NFTs, et cetera. So we believe the opportunity is a lot more significant than just the equity piece. But the equity piece alone is obviously a massive opportunity were millions of brokerage accounts in Canada, dominated by the big banks.

And we believe we're at the very early innings in Canada of the shift from the discount broker model into this free trading model, commission-free trading model. And Mogo, we expect to be only the second app out there. Obviously, with -- ultimately, the plan is to bring in crypto into that account as well.

And we believe -- we are big believers that ultimately, the majority of retail crypto trading will actually flow to those products or solutions that actually enable you to trade both equities and crypto, and we think we're going to be one of the first there.

So this is definitely an opportunity where we think there is an opportunity in the long run for Mogo to get millions of users with a successful product.

And obviously, we have multiple ways to monetize that user beyond the monetization directly within MogoTrade because our solution obviously includes multiple other products and increasing our share of wallet with the user as well.

I mean a big part of MogoTrade is going to be -- we believe is going to help drive even accelerating user growth at attractive customer acquisition costs as well. So I think there's a number of components of value to the opportunity..

Great. That provided some really good color. I appreciate that. Second one, could you provide a little color around gross margin. It looks like provisioning was up in the quarter.

Curious what the outlook is there for credit and provisioning in 2022?.

Yes. So really, what I would say is we've gotten back to -- from an origination level to sort of pre-COVID level on the loan origination side, which is the biggest driver of provisions from an accounting perspective. And I think generally, in the industry, we've seen credit metrics return closer to sort of pre-COVID levels.

So we think that the gross margin that we're at in Q4 is going to be more representative of a normalized state today. I think there's opportunities for that gross margin to go up as other products sort of scale in the future. But I think that for 2022 is going to be in a more normalized state.

But we feel, again, lending on balance sheet lending is going to be a product and an important product to the customer. But our primary growth driver, we continue to believe will be on the subscription services side..

Great. That's really helpful. And then last one for me, kind of strategy question. How are you guys thinking about investment in the business versus generating positive EBITDA.

Clearly, you can do it if you wanted to, but I'm just kind of curious, as we look out the next few years, whether we start to get a real path to profitability or the opportunity is so large to continue to invest in the business?.

Yes. So I would say, look, our bias today is investment. We're going after a massive TAM. We've got a lot of exciting opportunities with the upcoming full rollout of MogoTrade. And as Dave said, we're really very early innings here. We do believe this is a winner take most industry.

And I think we believe that Mogo is well positioned as one of only a handful of leaders in Canada with the capital, the product breadth, the member base, et cetera. And so we want to be able to take full advantage of that. And we believe we've got a balance sheet that actually affords us the ability to take advantage of that.

Having said that, as you pointed out, we have proven in the past our ability to very quickly turn those growth titles down and get to profitability. We generated close to 50% EBITDA margin in Q2 and Q3 of 2020 when we made that decision. And that was that much lower revenue scale.

I mean, our revenue scale is close to 70% of quarterly revenue scale, about 70% higher than it was at that point in time. So what I'd like to say is we continue to have our hand on the growth dial, and we can adjust that growth dial up or down. The bias is definitely towards investment given the mass of TAM.

But if we feel the need to turn that spend dial down a certain degree and get to profitability faster, we believe that that's actually well within our control. But right now, I think our bias is on the investment side sort of the long-term growth..

[Operator Instructions]. Your next question is from the line of Andy Wayne [ph] with Raymond James..

So my first question is, can you give me some sort of your long-term view for Carta.

And when you say the processing volume was up this quarter, I remember, I think it was 58% that doesn't mean Carta revenue would up by the same amount in the quarter as well?.

Yes. So long-term view on our opportunity in Carta. Look, I think our view there is that this -- this is obviously a massive TAM by any definition, and Carta is still a relatively small player is in the sector. And therefore, we believe there's significant opportunity to grow the business there with the right level of investment.

And I would say, in 2021, our first year of really owning the business. We were more just getting our arms around and understanding it and to make the long-term decision of what level investment wanted to make.

Now that we've gotten comfortable with the business and really understanding how much bigger the longer-term opportunity is -- we've made the decision to invest in it, and that's what we're planning to do.

So look, this is a business that, that given its scale today and given the global TAM has the opportunity to be growing 30% to 50% plus CAGR for a long period of time if we're executing, and that's -- and we make the right investments, and that's what 2022 is about. So revenue growth was not as high as volume growth in 2021, but it was still high.

And it really sort of depends sometimes where that volume growth comes from. I mean, I would say, in general, we'd expect revenue growth to be fairly close to volume growth. And as I say, we're early days.

We're excited, we believe this is a very valuable asset in kind of the ecosystem, it gives Mogo a big strategic advantage, we believe, in Canada being vertically integrated from a cost perspective as it relates to providing a best-in-class user experience and best-in-class benefits program to the user, given our cost base advantage.

And we think it's a valuable asset in the overall payments' ecosystem. This is a business, remember that mostly most of the revenue today is outside of Canada. So it's also a business that gives us an opportunity to grow internationally.

Our general view has been that we don't want to take the Mogo brand internationally because that's where the big expense is building that brand and then you've got the legal and regulatory compliance, all those barriers that make it challenging for an international player to come in Canada bring that to -- would be there for Mogo going internationally, but that's not the case with the Carta business.

So it allows us to grow internationally through that division..

That's great. And my second question is on Coinsquare.

Could you shed some light on how we performed in terms of revenue in Q4 and whether it was profitable?.

Yes. So Coinsquare overall was profitable in Q4. Revenue close to about $10 million in the quarter, which, as I mentioned in my comments, was up meaningfully from -- sequentially from Q3. So I mean, just like we've seen in -- more broadly in the industry, crypto-related trading has generally been going up and down with the volatility in the market.

Q4 was up about 40% sequentially over Q3. And as I mentioned, the business itself is very well capitalized, and we think they are very well positioned from a regulatory perspective, which we believe is going to be one of the biggest drivers of value here.

Because Canada is really going to be the first country all globally that's going to be bringing this level of regulation to crypto.

And we believe Coinsquare is positioned to be really the first fully regulated crypto exchange in Canada, which we believe bring -- will bring tremendous value to Coinsquare after they get that -- those regulatory approvals. So we're super excited about that. And strategically, they are a partner of ours.

So long-term goal is for Coinsquare today powers a Bitcoin account and long-term goals for Coinsquare to power our broader crypto capabilities as we -- when we do bring those in -- on the MogoTrade side as well..

And there are no further questions. I will turn the call over to Mr. Dave Feller for closing remarks..

Well, thanks for your time today, and we appreciate the questions. We look forward to updating you on our Q1 call. Thanks again..

Thank you. This concludes today's conference call and webcast. Thank you for your participation. You may now disconnect..