Why Mogo Stock Crushed the Market on Wednesday

What happened

The stock of fast-growing Canadian fintech Mogo ( MOGO 19.34% ) was a standout on Wednesday. The company’s shares rocketed more than 19% higher on the day, thanks to encouraging quarterly results. That positively trounced the performance of the S&P 500 index, which sagged by over 1%.

So what

In its fourth quarter of 2021, Mogo took in 17 million Canadian dollars ($14 million) of revenue, which was 70% higher on a year-over-year basis. The company didn’t hesitate to mention that this marks the third quarter in a row of increasing growth.

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On the bottom line, however, Mogo’s adjusted net loss deepened to CA$9.7 million ($7.7 million). This was more than three times the Q4 2020 shortfall of CA$3.2 million ($2.5 million).

The company missed on the bottom line, as analysts were expecting the equivalent of a $0.10 per-share loss instead of the actual $0.14 deficit. It did beat the average top-line forecast by nearly 6%, however.

In its earnings release, Mogo quoted its CFO Greg Feller as explaining that “Our Q4 subscription and services revenue exceeded our guidance range and showed accelerating growth for the fourth quarter in a row, driven by our strategic acquisitions and an increasingly diversified set of products and revenue streams.”

Concurrent to its earnings announcement, Mogo announced that it launched a new business unit, Mogo Ventures. This will be an entity that is “to manage its existing investments in strategic partners and companies that support Mogo’s ecosystem.” This covers Mogo’s 39% stake in Canadian cryptocurrency exchange Coinsquare, plus investments in Bitcoin and Ethereum, and other ventures.

Now what

Mogo also proffered limited guidance for full-year 2022. For the period, it’s expecting total revenue of CA$75 million ($60 million) to CA$80 million ($64 million), which would top the 2021 tally of CA$57.5 million ($46 million). It also anticipates “Improving adjusted EBITDA as a percentage of revenue in the second half of the year.”

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