Mogo's Q3 2024 Results: A Path to Positive Adjusted Net Income in 2025

Mogo Inc. (NASDAQ:MOGO) (TSX:MOGO) recently reported its financial and operational results for the third quarter ended September 30, 2024, highlighting the company's commitment to sustainable profitability and growth. The digital wealth and payments business demonstrated strong performance across key metrics, positioning itself for future success and a potential positive adjusted net income in 2025.

Mogo's revenue increased by 9% year-over-year to reach $17.7 million in Q3 2024, marking the third consecutive quarter of growth in wealth, payments, and lending. Subscription and services revenue rose 12% to $10.7 million, while gross profit improved to $11.9 million, contributing to a robust gross margin of 67.3%. Adjusted EBITDA for Q3 2024 totaled $2.1 million, consistent with the prior year, reflecting a 12.1% margin. Notably, cash flow from operating activities was positive for the eighth consecutive quarter, amounting to $1.5 million, a significant turnaround from a negative cash flow of $4.2 million in Q3 2023.


Mogo is also raising its guidance for Adjusted EBITDA to $6-$7 million for fiscal 2024, up from the previous $5-$6 million. For 2025, the company expects to achieve Adjusted EBITDA between $10 and $12 million while anticipating its first-ever positive adjusted net income. This upward momentum in adjusted EBITDA, combined with a solid cash flow position and strategic investments in wealth and payments platforms, positions Mogo for future growth and financial improvement.


During Q3, Mogo's payment volume surged by 23% year-over-year, hitting a record $3 billion, and assets under management climbed to $409 million, a 22% increase. The company's strategic investments in its wealth and payments platforms, alongside a focus on enhancing user experiences and expanding service offerings, have driven this growth and enhanced profitability.

Mogo's AI co-pilot and educational content features have significantly enhanced user engagement and retention in wealth products. The AI co-pilot tool enables users to access real-time information and data on companies they're researching directly from the app, while the educational content series helps investors improve their investing knowledge, skills, and abilities. These features have likely contributed to the 22% year-over-year increase in assets under management to $409 million and a 67% increase in assets within the MogoTrade product.


Mogo's partnership with Postmedia and Thomas Lee of Fundstrat has also contributed to brand building and user base expansion. Postmedia, a leading Canadian media company, provides Mogo with an efficient channel to build its brand and user base in wealth. This partnership allows Mogo to leverage Postmedia's extensive reach to attract new users and increase brand awareness. Additionally, Mogo's partnership with Thomas Lee of Fundstrat offers exclusive access to equity research and related products and services for Mogo's digital wealth platform members, enhancing the company's value proposition and attracting more users.


In conclusion, Mogo's strong Q3 2024 results and positive outlook for 2025 reflect the company's commitment to sustainable profitability and growth. With a focus on enhancing user experiences, expanding service offerings, and strategic partnerships, Mogo is well-positioned to achieve its goal of positive adjusted net income in 2025. Investors seeking exposure to the growing digital wealth and payments sector should consider Mogo as a compelling opportunity.