Orion Digital Corp

Ladies and gentlemen, thank you for standing by and welcome to the Mogul Q1 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to turn the call over to Craig Armitage, Investor Relations. Please go ahead.

Thank you, and thanks for joining us today, everyone. Just a couple quick notes before we get started. First, today's call will contain forward-looking statements that are based on current assumptions subject to risks and uncertainties that could cause actual results to differ materially from those projected. The company undertakes no obligation to update these statements except as required by law. Information about these risks and uncertainties are included in our Q1 filings, as well as periodic filings with regulators in Canada and the U.S., which you can find on CDAR, EDGAR, and on our 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 the IFRS financial measures. And lastly, the amounts today are discussed in Canadian dollars, unless otherwise indicated. And as per our normal practice, we do have presentation slides today. Those can be found on the IR section of the website. With that, I'll turn it over to Dave Feller to get us started. Dave.

Thanks, Greg. Good afternoon and welcome to MoGo's first quarter 2021 results conference call. I'm joined today by Greg Feller, our president and CFO. It's been an active and highly productive start to 2021 for MoGo. We are building the most comprehensive digital wallet to address the needs of Canadian consumers and the transactions we've completed in the first quarter, both strategic and financial, have really accelerated our growth plans and vision significantly. Today, we're in an even stronger position to take advantage of the accelerating adoption of digital wallets and digital finances. Although we've made a lot of progress, we're clearly still just getting started. What continues to drive us is the need for better solutions to what continues to be a big problem, the wealth gap. As we all know, the average person isn't on track to building wealth and instead continues to live a life dominated by financial stress. Although almost everyone of them has a bank account, they're clearly not getting the solution they need. At the simplest level, that's what we're here to solve. We're hyper-focused on making MoGo the simplest, most engaging way to build wealth, which for most people means becoming a millionaire. If you were 20 years old today and just starting out in your financial journey, your goal would be to achieve at least a million dollars in wealth in order to one day retire and reach financial freedom. Fact is, if you make $40,000 a year and save and invest $20,000 of your after-tax income, you could easily retire a multimillionaire. As much as we believe in gamification, we also believe that money is a serious business and our goal is to have a seriously smart product and an experience that really helps achieve their money goals. Years from now, the idea of having a bank account trying to figure out what to do to achieve your goals will be a thing of the past. Financial literacy is being built into the products and the experience in a way that no in-person experience could deliver. Banking as we know it is going away and consumers will continue to move to the solutions that make it easy to manage their money and build wealth. The two critical elements of this really come down to spending control and saving and investing. Our goal is to have the most compelling and effective solution in both of these categories. These are really the two key strategic initiatives we've been focusing on here at MoGo. Now, controlling your spending is perhaps the biggest challenge for most people in terms of achieving their financial goals. Our goal is to make the MoGo card our members' go-to spending card. We believe we have the most compelling card value proposition in the Canadian marketplace today, and given our acquisition of Carta, we have a key strategic advantage in terms of vertical integration and cost advantages, which are critical to delivering a value proposition that others will find hard to match. In Q1, we saw continued strong momentum in our card, with total spend up over 1,000% from the same quarter last year. What's more, we continue to see a strong link of card users adopting our other products. Our active card members are 14 times more engaged than our non-card members, including 15 times more likely to trade Bitcoin, 6 times more likely to apply for a mortgage, and 8 times more likely to refer friends. They're also logging in on average more than once a day. Now, we still have a lot to do with this product, and we can continue to focus on improving the experience and assuring it really does become the best card in Canada in terms of helping consumers manage their money and avoid overspending and credit card debt. This really is the precursor for building wealth. There's no doubt that digital wealth is the future, and as we continue to see a secular shift to digital wealth platforms, and our goal at MoGo is to build the leading digital wealth platform in Canada. Wealth has been one of our biggest missing elements of our solution today and now really has become our top strategic priority. Our Mocha acquisition and CoinSquare investment are two key milestones as we assemble some of the key building blocks of our new wealth offering. And it's not just the platforms and the tech. It's about the people, expertise, and the passion they bring for the space. All of us believe in the same mission and believe that a modern digital wealth platform is key to achieving it. We see three key products needed for leading digital wealth platform. a simple automated investing platform solution, self-directed commission-free stock trading, and commission-free crypto. As we previously announced, we plan on launching an automated investing solution for our members, powered by a Mocha acquisition. For most people, beginning with an automated and more passive investment strategy is usually the smart way to go. Studies continue to show that most people can't beat the markets So investing through a portfolio of low-cost index ETFs is usually the best way for the average person to build wealth. Fact is, today, the high-cost mutual funds still dominate, and fees up to 2% a year can make a big difference when your time horizon is 40-plus years. So having a low-cost and automated strategy can really help someone achieve their financial goals. Our goal is to also link this to our card so that users can automatically set roundups so that every time they're spending, they're also investing. And it's really that combination of our solution that becomes powerful. It's also important to note that approximately 45% of Canadians today over 18 don't have an RSP or TFSA account, which are really the two primary ways for Canadians to build wealth in the most tax-efficient way. This fact just shows you how big the gap is, as everyone should have one and be already building wealth, but most just don't have the solution that helps them do this. Think digital, low-cost, simple, and smartly designed. As we have previously announced, our goal is to launch commission-free stock trading before the end of the year. Retail stock trading continues to be a massive trend that we will we believe will continue for the long term, as most people will settle on a combination of automated passive investing complemented by trading individual stocks. Recent data showed that DIY Canadians opened 2.3 million investing accounts in 2020, nearly triple what was opened in 2019. Although passive investing makes a lot of sense, it's also important to engage people in their wealth-building journey, and individual stock investing can play an important role in this. DIY stock investing is a massive market dominated by legacy players with not only high fees but very dated digital experiences. This is one of the most exciting products we've worked on to date and we have a team that is passionately focused on delivering the best stock trading experience in Canada. Zero commission stock trading with live streaming data and a simple and intuitive modern UI that will set a new bar in Canada. We couldn't be more excited about this product. Third piece of wealth is crypto. This is a market that continues to grow and develop and research shows that we are still early days in terms of adoption. A recent U.S. survey estimated that only 14% of Americans own crypto, yet 63% are what they call crypto curious. These are people who don't own crypto, but say they want to learn more or planning on buying soon. PayPal recently cited a survey that shows 74% of millennials plan on using crypto in the next year or two. And a recent MasterCard survey showed that 40% of respondents plan on using cryptocurrency in the next year. Total crypto market cap today is just over $2 trillion U.S. compared to about $95 trillion for equities and over $90 trillion for the total money supply. Our journey in crypto started when we launched a simple way to buy and sell Bitcoin in 2018. We were one of the earlier players, and in fact, many were very skeptical and even critical of our entry in the space. We believed then, as we do now, that it was going to be an important part of the financial ecosystem. In Q1, our Bitcoin trading grew over 15 times compared to the same quarter last year. Although very strong, we know there's so much more opportunity beyond just our Bitcoin offering. So one of our next steps is to expand just beyond Bitcoin to have a more comprehensive crypto offering. It's clear to us that Canadians will increasingly want to participate in this new digital asset class and making sure we have a leading offering in the Canadian market is a strategic priority. Our goal is to launch this expanded offering in the first half of next year, given our full plate of development initiatives today. Which brings us to our strategic investment in CoinSquare. As we announced today, we will be increasing our ownership to 37%, with the option to increase further to approximately 48%. CoinSquare was our initial partner when we launched our Bitcoin account, and they've continued to build out what we clearly see as the leading crypto platform in Canada. This is one of our most strategic investments to date, and there are a lot of things that excite us about CoinSquare. With 26 coins supported, they continue to see very strong growth and now have over 600,000 users and assets under management up an incredible 230% year-over-year and rapidly approaching a billion dollars. They are now at a revenue run rate of over $95 million a year and EBITDA margins of approximately 50%. CoinSquare has multiple parts of their business that position them well in this digital assets space. Besides their consumer-facing solution, they also have an institutional-grade platform, which we think will be increasingly important. They've also been very focused on the regulatory front, including ensuring their platform supports all the necessary elements, and we believe they're positioned to be one of the first regulated marketplace and broker dealers to trade digital assets in Canada. They've also been FinTrack regulated since 2017. In addition to this, they've been working on becoming one of Canada's first qualified custodians for digital assets, leading all this as a very experienced management team and board of directors. In terms of their platform, they've built a broad offering that includes web, mobile, and a full-service over-the-counter service giving customers multiple options in terms of buying and selling digital assets. They have also several different pricing models that enable them to offer competitive pricing to all segments. Founded in 2014, they are truly one of the pioneers in Canada. Although they've been doing this for a while, they're constantly improving their platform and recently launched CoinSquare QuickTrade. which is a brand new platform designed to dramatically improve not only the customer experience, but the ability for them to continue to evolve their offering. This new platform is also designed to speed up deposits and offers no fee funding, withdrawal options, along with commission-free trading. CoinSquare will continue to drive its brand and offering and execute on its strategy of building out the leading crypto platform in Canada. At the same time, they will continue to power Mogul Crypto, which is Bitcoin today, along with powering expanded crypto offerings. There's no doubt that this is still an emerging space, but one in which we believe will become increasingly important, and we remain focused on ensuring we have one of the leading crypto platforms and offerings in the Canadian market. But it's also clear that this is just one component of our broader digital wealth offering and something that really differentiates us in the Canadian market today. With that, I'll introduce Greg to talk you through the financials. Greg?