Mogo Announces Record Full-Year 2015 Revenue, Up 86% Year-Over-Year

Number of Mogo Members Surpasses 186,000, up 145% Year over Year
Company Delivers Improved Adjusted EBITDA in Fourth Quarter

VANCOUVER, March 15, 2016 /CNW/ - Mogo Finance Technology Inc. (TSX: GO), Canada's leading financial technology platform that empowers consumers with simple financial solutions, today reported strong financial results for the full year and quarter ended December 31, 2015.

"In 2015, we successfully completed our IPO and made significant progress towards our goal of building a digital financial services company for the next generation of Canadians," said David Feller, Mogo's Founder and CEO. "Our membership base increased to over 186,000, clearly highlighting that our convenient mobile-first financial solutions, as well as our millennial-focused Mogo brand, are resonating with Canadians. Leveraging our ground-breaking $50 million strategic partnership that we recently announced with Canada's largest news media group, Postmedia, we are extremely well-positioned to continue building the Mogo brand and accelerating the growth of our member base towards our 3-year goal of 1 million Canadians. In addition, we continue to build out what we believe is Canada's leading FinTech company of over 300 team members, including engineers, designers, product managers, data scientists, marketers, credit risk, operations and customer service experts, relentlessly focused on transforming the traditional banking experience by delivering a digital suite of innovative financial products."

Mr. Feller added: "Our opportunity at Mogo is massive. The banking industry, like many others has entered a period of profound change and disruption. The FinTech adoption rate in Canada is one of the lowest in the world at only 8%,¹ however, this is changing rapidly as consumers, driven by millennials, look for a more convenient digital experience. With over 12 years of experience, Mogo is both a pioneer and leader in this area and is uniquely positioned to capitalize on this digital transformation given our scale, brand and technology platform. Fiscal 2016 will be an exciting year in our continued evolution as we launch multiple new products, including our mobile app and the MogoMortgage, enter into new partnerships that leverage our digital platform, increase awareness of the Mogo brand, continue to grow our member base and position Mogo as the convenient digital alternative to the banks in Canada." 

"Our 2015 financial results were highlighted by an 86% increase in total revenue and more than 500% growth in our interest revenue, driven by the strong demand for our installment loan products. Importantly, we were able to balance this with our commitment to demonstrate operating leverage in the fourth quarter, with a more than 50% sequential improvement in our Adjusted EBITDA," said Greg Feller, Mogo's President and CFO. "Our unique solution, which includes convenient access to loan products, is designed to help all consumers across the credit spectrum lower their cost of credit and help them get out of debt sooner. Our mission, to help all Canadians get into financial control, is clearly resonating with consumers and driving strong member growth."

Mogo reports in Canadian dollars and in accordance with IFRS.
Fourth Quarter Financial Highlights

• Total revenue for the fourth quarter of 2015 was $12.5 million, a 48% increase from the fourth quarter of 2014. Loan interest revenue grew 454% to $3.2 million, driven by the success of the Company's installment loan products.
• Gross profit grew 46% to $7.8 million (62% of revenue) from $5.3 million (63% of revenue) in the fourth quarter of 2014.
• Reported positive Contribution² of $4.2 million, up by 56% compared with the fourth quarter of 2014.
• 50% sequential improvement of Adjusted EBITDA² at ($1.5) million, compared with ($3.2) million in the third quarter of 2015 and $0.2 million in the fourth quarter of 2014.
• Gross loans receivable increased by 207% to $68.3 million at the end of 2015, compared to $22.3 million at the end of 2014. Within this, Gross loans receivable - long-term² represented 75% of the total Gross loans receivable, driven by the successful ramp of the Company's installment loan product as well as continued growth of our line of credit product.
• Loan Loss Provision Rate² decreased from 4.7% in the fourth quarter of 2014 to 4.5% in the fourth quarter of 2015.
• Loan originations² were $85.5 million, compared to $55.6 million in the same quarter of 2014, an increase of 54%.
• At December 31, 2015, Mogo had $31.7 million in cash and cash equivalents.

Full-Year 2015 Financial Highlights

• Total revenue for 2015 increased 86% to $43.5 million, driven by the success of the Company's line-of-credit and installment loan products.
• Gross profit grew to $27.1 million (62% of revenue) from $14.8 million (63% of revenue) in 2014.
• Reported positive Contribution² of $14.9 million for 2015, up by 95% from 2014.
• Adjusted EBITDA² of ($7.7) million, compared with ($3.4) million in 2015.
• Loan Loss Provision Rate² decreased to 4.5% for 2015, from 4.6% in 2014.
• Completed initial public offering, raising gross proceeds of $50 million.
• Finalized new expandable credit facility of up to $200 million under certain conditions to finance the continued expansion of our consumer installment loans.
• Net losses for 2015 increased to $21.3 million from $13.1 million in 2014 due largely to the increase of operating expenses and funding interest expenses reflecting the significant investment in our technology platform, brand and loan portfolio.

Fourth-Quarter and Full-Year Business Highlights

Strong Member Growth

• Mogo's strategy is to continue to build its member base and, over time, introduce new products and services to these members.
• The Company added approximately 28,000 new members in Q4 and 110,000 for the full year of 2015, ending the year with over 186,000 members.
• Management sets a three-year goal of 1 million members.

Ground-Breaking $50 Million Marketing Partnership

• In February 2016, Mogo and Postmedia announced a ground-breaking strategic collaboration providing Mogo with a minimum of $50 million of media value over the next three years. Leveraging the power of Postmedia's‎ more than 200 trusted brands, audience reach of 12.8 million average monthly unique visitors to its digital properties and 8.3 million weekly print readership, Mogo has a unique opportunity to accelerate brand awareness.
• The agreement allows Mogo to expand marketing scale and reach while significantly reducing and de-risking marketing spend.

Increasing Brand Awareness

• Launched new Mogo brand identity in 2015 highlighting Mogo as Canada's leading digital financial brand for the next-generation of consumers.
• Started work on new Mogo Lounge in Toronto.
• Selected as a finalist for the 2016 Fintech Innovation Awards.

Financial Technology Platform & Innovative Products

• More than doubled Technology & Development headcount to 78 team members by year-end 2015 compared to only 36 at year-end 2014.
• Launched Canada's first and only full-credit-spectrum loan offering with introduction of Mogo's Liquid installment loans with amounts up to $35,000 and rates as low as 5.9%.
• Launched new soft credit check account sign-up allowing new Mogo members to sign up for a Mogo account in about 3 minutes without impacting their credit score.
• We continue to make progress towards our mid-year launch of our new Mogo Prepaid Visa Card with over 4,000 cards in our pilot program.
• Continued enhancements to our account functionality, user experience and development of new products including our mobile app which we're planning to launch later this year.

Outlook
"Fiscal 2015 was an important year to demonstrate our ability to acquire new customers and members as well as launch and scale new products, particularly our MogoLiquid installment loan. As we look to 2016, our priorities are to continue to grow our member base, invest heavily in our technology platform, increase Mogo brand awareness through optimization of new Postmedia partnership, launch new non-capital-intensive/fee-based products and enter into new strategic partnerships that further our strategy to deliver a full suite of digital financial solutions to Canadians.  We will continue to balance these initiatives with the prudent growth of our existing loan products and our goal of achieving positive Adjusted EBITDA³.  We believe that optimizing these priorities will allow us to accelerate revenue growth in 2017 and maximize long-term shareholder value."  

Mogo is providing the following outlook regarding 2016:

• The Company expects 2016 revenue growth to be driven mainly by a strong increase in Interest Revenue as our long-term loan products continue to gain traction in the marketplace, as well as the introduction of new fee-based products.
• Management expects Q1 2016 revenue to be similar to Q4 2015, with revenue growth expected to accelerate in the second half of 2016 as the Company transitions its marketing programs under the Postmedia agreement and introduces new products.
• Management is targeting positive quarterly Adjusted EBITDA² beginning in the second half of 2016.
• The selected financial information included in this release is qualified in its entirety by, and should be read together with the Company's full financial statements and MD&A, which are available at www.sedar.com and http://investors.mogo.ca/.

Conference Call & Webcast

Mogo will host a conference call to discuss its 2015 financial results at 5:00 p.m. EST on March 15, 2016. The call will be hosted by David Feller, Founder & CEO, and Greg Feller, President & CFO. To participate in the call, dial 647-427-7450 or 1-888-231-8191 using the conference ID 59171960. The webcast can be accessed at http://bit.ly/1QyncvY or http://investors.mogo.ca. Listeners should access the webcast or call 10-15 minutes before the start time to ensure they are connected. A copy of the presentation will be available at http://investors.mogo.ca following the conference call. 

Non-IFRS Measures

Loan originations, adjusted EBITDA, long-term loans receivable, provision rate and contribution are non‑IFRS financial measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non‑IFRS financial measures, including loan originations, adjusted EBITDA, long-term loans receivable, provision rate and contribution, to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We believe that securities analysts, investors and other interested parties frequently use non‑IFRS financial measures in the evaluation of issuers. Our management also uses non‑IFRS financial measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess our ability to meet our capital expenditure and working capital requirements. Investors are encouraged to review our financial statements and disclosures in their entirety and are cautioned not to put undue reliance on any non‑IFRS measure and view it in conjunction with the most comparable IFRS financial measures. Readers are referred to our MD&A for the period ended December 31, 2015 which is available at www.sedar.com and http://investors.mogo.ca/ for more information regarding our use of these measures and a reconciliation to the most comparable IFRS measure.

About Mogo

Mogo (TSX: GO) is a financial technology company looking to offer Canadians a digital alternative to banks when it comes to borrowing and getting control of their financial health. With over 186,000 members and growing, we are using technology and design to bring a new level of convenience and simplicity to financial services. Whether looking to refinance credit card debt or other high-cost consumer debt, Mogo looks to provide its members with the best possible products and tools to help them manage their finances. To learn more about Mogo—recently referred to as the potential "Uber of banking" by CNBC, Toronto Star, and others—visit mogo.ca.

Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements regarding Mogo's revenue, revenue growth and Adjusted EBITDA, the future growth of Mogo's business, its intention to invest in its technology platform, to expand into other products and markets, Mogo's expectations regarding members, and Mogo's financial expectations and outlook for 2016. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual financial results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. Mogo's growth, its ability to invest in its platform and expand into new products and markets and its expectations for its financial performance for 2016 are subject to a number of conditions, many of which are outside of Mogo's control. For a description of the risks associated with Mogo's business please refer to MD&A for the year ended December 31, 2015, which is available at www.sedar.com. Except as required by law, Mogo disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise.

¹ EY FinTech Adoption Index      

² Loan originations, provision rate, contribution, adjusted EBITDA, and gross loans receivable – long-term are non IFRS financial measures. For more information regarding our use of these measures see "Non-IFRS Financial Measures" and, where applicable, a reconciliation to the most comparable IFRS measure, see "Reconciliation of Non IFRS Financial Measures" in the MD&A for the year ended December 31, 2015.

³ Loan originations, provision rate, contribution, adjusted EBITDA, and gross loans receivable – long-term are non IFRS financial measures. For more information regarding our use of these measures see "Non-IFRS Financial Measures" and, where applicable, a reconciliation to the most comparable IFRS measure, see "Reconciliation of Non IFRS Financial Measures" in the MD&A for the year ended December 31, 2015.

Mogo Finance Technology Inc.
Consolidated Statement of Financial Position
As at December 31, 2015
				2015	2014
Assets
	Cash and cash equivalents (Note 3)			31,723,854	23,598,672
	Loans receivable (Note 4)			61,768,366	19,176,674
	Prepaid expenses, deposits and other assets			1,143,387	1,126,467
	Investment tax credits			1,616,353	1,453,516
	Property and equipment (Note 6)			4,239,017	598,323
	Intangible assets (Note 7)			6,851,448	3,455,900
				107,342,425	49,409,552
Liabilities
	Accounts payable and accruals			5,057,202	3,625,956
	Other liabilities (Note 8)			1,419,614	-
	Credit facility (Note 9)			40,384,293	12,818,716
	Debentures (Note 10)			40,326,022	39,185,245
	Derivative financial liability (Note 19)			129,457	-
				87,316,588	55,629,917
Shareholders' Equity (Deficit)
Share capital (Note 12)				45,314,488	38,917,810
Contributed surplus				1,517,850	460,939
Deficit				(26,806,501)	(45,599,114)
				20,025,837	(6,220,365)
				107,342,425	49,409,552

Approved on Behalf of the Board

 Signed by "Greg Feller"                , Director

 Signed by "Minhas Mohamed"      , Director

Mogo Finance Technology Inc.
Consolidated Statement of Comprehensive Loss
For the Year ended December 31, 2015
			2015	2014
Revenue
	Loan fees		30,390,741	19,413,469
	Loan interest		8,064,212	1,318,007
	Other revenues		5,076,746	2,668,793
			43,531,699	23,400,269
Cost of revenue
	Provision for loan losses, net of recoveries (Note 4)		13,679,679	7,005,484
	Transaction costs		2,726,281	1,570,157
			16,405,960	8,575,641
Gross profit			27,125,739	14,824,628
Operating expenses
	Technology and development		7,595,776	3,903,746
	Customer service and operations		8,779,495	5,841,193
	Marketing		10,792,022	4,641,933
	General and administration		10,531,596	4,911,155
Total operating expenses			37,698,889	19,298,027
Loss from operations			(10,573,150)	(4,473,399)
Other expenses
	Funding interest expense (Note 9)		3,467,599	1,342,523
	Corporate interest expense (Note 10)		6,259,210	6,086,049
	Unrealized foreign exchange loss		1,142,720	485,846
	Unrealized gain on derivative liability		(106,274)	-
	Other financing expenses		11,711	679,858
			10,774,966	8,594,276
Loss before income taxes			(21,348,116)	(13,067,675)
	Provision for income taxes (Note 11)		3,352	5,252
Loss and comprehensive loss			(21,351,468)	(13,072,927)
Loss per share (Note 14)
	Basic and fully diluted		(1.626)	(1.704)
	Weighted average number of basic and fully diluted common shares		13,132,745	7,671,941

Mogo Finance Technology Inc.
Consolidated Statement of Changes in Equity (Deficit)
For the Year Ended December 31, 2015
	Share capital	Contributed surplus	Deficit	Total
Balance, December 31, 2013	1,000	79,135	(32,526,187)	(32,446,052)
Loss and comprehensive loss	-	-	(13,072,927)	(13,072,927)
Issuance of common shares	4,842,960	-	-	4,842,960
Issuance of Class A preferred shares	5,687,050	-	-	5,687,050
Issuance of Class B preferred shares	29,307,421	-	-	29,307,421
Share issue costs common shares	(153,794)	-	-	(153,794)
Share issue costs Class B preferred shares	(915,634)	-	-	(915,634)
Stock based compensation	-	311,291	-	311,291
Options exercised	148,807	(148,557)	-	250
Issuance of warrants	-	219,070	-	219,070
Balance, December 31, 2014	38,917,810	460,939	(45,599,114)	(6,220,365)
Loss and comprehensive loss	-	-	(21,351,468)	(21,351,468)
Shares issued through initial public offering	50,000,000	-	-	50,000,000
Shares issue cost associated with initial public offering	(4,816,914)	-	-	(4,816,914)
Reduction of stated capital (Note 12)	(40,144,081)		40,144,081	-
Issuance of Class B preferred shares	1,226,271	-	-	1,226,271
Stock based compensation	-	1,188,313	-	1,188,313
Warrants exercised	131,402	(131,402)	-	-
Balance, December 31, 2015	45,314,488	1,517,850	(26,806,501)	20,025,837

Mogo Finance Technology Inc.
Consolidated Statement of Cash Flows
For the Year Ended December 31, 2015
					2015	2014
Cash provided by (used for) the following activities
Operating activities
	Loss and comprehensive loss				(21,351,468)	(13,072,927)
	Depreciation and amortization				1,693,195	1,404,083
	Amortization of deferred finance costs				387,840	231,182
	Provision for loan losses				14,510,165	7,600,387
	Stock based compensation expense				1,188,313	311,291
	Derivative liability fair value adjustment				(106,274)	-
	Unrealized foreign exchange loss				1,140,770	493,213
					(2,537,459)	(3,032,771)
	Changes in working capital accounts
		Increase in loans receivable			(57,101,857)	(19,306,921)
		Investment tax credits			(162,831)	(624,663)
		Prepaid expenses, deposits and other assets			(16,920)	(379,693)
		Accounts payable and accruals			1,431,246	283,334
		Other liabilities			1,419,614	-
Net cash used in operating activities					(56,968,207)	(23,060,714)
Investing activities
	Purchases of property and equipment				(4,088,856)	(314,702)
	Investment in software				(4,640,579)	(1,994,523)
Net cash used in investing activities					(8,729,435)	(2,309,225)
Financing activities
	Proceeds from Initial public offering				50,000,000	-
	Advances of debentures				-	6,732,684
	Repayment of debentures				-	(290,000)
	Credit facility advanced				28,007,015	13,627,620
	Credit facility financing costs				(647,713)	(908,617)
	Common shares issuance costs				(4,816,913)	(153,794)
	Options exercised				-	250
	Issuance of Warrants				54,164	-
	Proceeds from issuance of Class A preferred shares				-	30,000
	Proceeds from issuance of Class B preferred shares, net of share issuance costs				1,226,271	28,479,455
Net cash provided by financing activities					73,822,824	47,517,598
Increase in cash resources					8,125,182	22,147,659
Cash and cash equivalents, beginning of year					23,598,672	1,451,013
Cash and cash equivalents, end of year					31,723,854	23,598,672

The Company's complete financial statements and notes are available at www.sedar.com.

SOURCE Mogo Finance Technology Inc.

Craig Armitage, Investor Relations, [email protected], [phone]; Alex Langer,Capital Markets, [email protected], [phone]