Orion Digital Corp

Good morning, ladies and gentlemen, and welcome to the Orion Digital Q1 2026 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will begin the next session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded today, Thursday, May 7, 2026. I would now like to turn the conference call over to Craig Armitage, Investor Relations. Please go ahead.

Thank you, John, and good morning, everyone. Before we begin, I'd like to cover a few brief items. Today's call will include forward-looking statements based on current assumptions and subject to risks and uncertainties that could cause actual results to differ materially. The company undertakes no obligation to update these statements except as required by law. Additional information about these risks is included in Orion Digital's Q1 filings. and its periodic filings with Canadian and U.S. regulators, which you can find on CDAR+, EDGAR, and the Orion Investor Relations website. In addition, today's discussion will include certain non-IFRS or adjusted financial measures. These should be considered as a supplement to and not as a substitute for IFRS results. We've included reconciliations to these measures or for these measures in the Q1 press release and filings. With that, I'll turn the call over to Dave Keller. Dave?

Thanks, Craig, and thank you to everyone joining us today. I'm joined by our president and CFO, Greg Keller. This is our first quarter operating under the Orion Digital name following our rebrand from Mogul earlier this year. The new name reflects the company we're building, a financial technology company focused on platforms for the next generation of financial services. We operate two distinct growth platforms, Intelligent Investing and Canadian Digital Wealth, and Carter Worldwide and European Payments Infrastructure. These platforms are supported by a consumer lending portfolio that generates cash flow to fund continued investment in the business. Before walking through Q1 results, I want to spend a few minutes on intelligent investing, why we're investing in it, and why we believe it is one of the most significant opportunities in front of Orion. The retail investing industry has spent the last two decades telling a story of democratization, easier access, lower costs, empowerment. The product that was actually built behind the story was optimized for activity, engagement, and frequent decision-making because activity is what generates revenue under the prevailing business models. That is why prediction markets are showing up next to retirement accounts. That is why trading interfaces keep adding leverage and frictionless speculation. That is why every layer of the experience is tuned for engagement rather than outcome. We think AI changes the structure of this as research, analysis, and decision support tools become broadly accessible The question of what an investing platform is actually for becomes harder to avoid. Platforms designed around activity will continue to optimize for activity. What many of them are really optimized for is the doping loop of engagement. The opportunity as we see it is to build a platform designed for what investing is actually supposed to do, compound capital over long periods of time. That is what intelligent investing is, not a better trading app, not a cheaper brokerage. It is a different category of product designed around a different objective with a different set of incentives embedded in it. One of the most important financial principles in system design is that systems produce the outcomes they are designed to optimize. Trading platforms optimize activity. Wealth managers optimize assets under management. Financial media optimizes attention. Intelligent investing is designed around long-term compounding, and that principle shapes every layer of architecture, the environment, the decision process, the research tools, the incentives. The first thing you'll notice in the product is the design. It is intentionally minimalist and calm. Most investing apps are built around stimulation, price movement, charts, alerts, frequent prompts. We are building the opposite. The environment is designed to support disciplined thinking because the environment in which decisions are made shapes the quality of the decisions themselves. The second layer is research. Serious investing requires serious research, which is why we partnered with FinChat AI to give every member full access to its professional-grade research platform, a subscription that on its own costs over $90 a month. The third layer, which we're building towards, is decision architecture. Serious investors document the reasoning, they write investment memos, they capture their thesis before committing capital, do it afterwards. That process is what separates fiscal and capital allocation from reactive trading and is one of the core areas we'll be developing on the platform the court is in. As the foundational architecture comes into place through phase two rollout, we'll be positioned to release these capabilities and continue building on them in regular cadence. Taken together, the environment, the research tools, and the decision architecture we're building are designed around discipline, capital allocation, and long-term compounding. As Charlie Munger said, show them the incentive, and it will show you the outcome. The incentives embedded in our wealth platform are aligned with long-term investor outcomes. The activity-maximizing platforms are competing for ground the market is leading behind. We are building for what comes next. On Q1 results for wealth specifically, revenue grew 12% year-over-year to $3.9 million. Assets under management were $495.6 million at March 31, 2026, representing 14% growth year-over-year. We are progressing through the Phase 2 rollout, which expands the offering beyond the managed portfolio framework and introduced in Phase 1, and introduces self-directed investing within the same unified platform. As Phase 2 deployment continues through the first half, the foundational architecture of intelligent investing is coming into place. and we expect it to roll out the new capabilities on a regular cadence as we build on that foundation. The platform rests on three principles. First, a core S&P 500 portfolio is the default foundation, reflecting the long-run reality that most investors and most professional managers underpin. Second, self-directed investing is a discipline layer, where capital allocation decisions can be measured against an S&P 500 benchmark over time. Third, an environment intentionally designed to reduce emotional and reactive decision-making in favor of structured long-term thinking. That is the direction of Intelligent Investing. We are not building a faster trading app. We are not building a cheaper brokerage. We are building a platform designed for the thing that investing is actually supposed to do, compound capital over the long run. And we believe that is where the next generation of investor value gets created. I'll now turn it over to Greg to cover Carta, the financial results, and our 2025 outlook. Thanks, Dave. I'll cover three things today. Our Q1 financial results and balance sheet, our 26th outlook, and the platform driving our growth. Let me start with Q1 performance. Adjusted EBITDA grew 46% year-over-year to $1.5 million, with gross margin expanding from 67% to 69% as our revenue mix continued to shift towards higher margin platform revenue. Wealth revenue grew 12% as intelligent investing scaled, while European transaction volume at Carter grew 12% to $2.7 billion and adjusted other subscriptions related revenue grew 6%. Total revenue was $16.9 million in Q1-26 compared to $17.3 million in Q1-25 with adjusted revenue up 2% year-over-year excluding the non-core businesses we exited during 25. Net loss was flat at $0.8 million in the quarter, improvement of 51% year-over-year, primarily reflecting lower non-operating revaluation loss compared to Q1 2025. Cash flow from operating activity before investment and gross loan receivables, $4 million, up 6%. I also want to spend a moment on our balance sheet, which strengthened materially during the quarter. We ended Q1 with $35.4 million in cash, marketable securities, and investments. Within that cash, we restricted cash at $25.6 million, with up 96% year-over-year and 27% from year-end 2025. The increase reflects the deliberate conversion of non-core holdings into operating cash, primarily from monetization of 1 to 5 position, which earlier in 25 agreed to be acquired by Robinson Markets. This is one of the most significant balance sheet improvements in the company's recent history, and it positions us with meaningful operating flexibility going forward. Turning to our payments platform, I'd like to say a word about Carta. Carta operates within the authorization layer of European payments, providing the system that authorizes transactions, enforces program rules, and connects payment activity. As payments increasingly become AI-mediated and agent-initiated, this position becomes increasingly strategic. Carta has a long history of supporting clients that have scaled meaningfully, including previously supporting UK-based Y during earlier phases of its growth, and current clients like Plexi, one of the leading European employee benefits platforms, which remains an anchor client today. We believe Carta operates with a structurally competitive pricing position in Europe, as we are processing, and we see a meaningful opportunity to expand within our existing client base and selectively into new accounts. We also are valuing stablecoin-based infrastructure for the selected cross-border payment flow, where it can improve settlement speed, transparency, and cost efficiency. While platform metrics reflect early progress against a much larger opportunity that phase two opens up, Wealth revenue grew 12% to $3.9 million, and AUM grew 14% to $495.6 million in the quarter. We expect increased marketing, investment, and intelligent investing during the second half of Phase 2 rollout. Now to our outlook. We are providing updated guidance for 2026. Q2 adjusted EBITDA of $2.5 to $3.5 million. Full-year adjusted EBITDA of $6 to $7 million, and consolidated revenue modestly lower year-over-year. We're reducing Q2 loan originations by approximately 50% from Q1 levels. We want investors to see clearly what business produces under this scenario with reduced new origination activity. The existing loan book generates cash without the offsetting customer acquisition and incremental provision costs. We incur that toll of deployment pace. The Q2 adjusted EBITDA guide reflects that. This is a temporary modulation, not a run rate. We are guiding second half necessity without lower than first half as we step origination volume back up and increase marketing investment, including for intelligent investing following phase two launch. We believe these investments are aligned with our goal to compound per share value over multi-year periods. We think the cash-generated characteristics of a portfolio when origination spend is dialed back are an important attribute of the model for ambassadors who understand particularly environments where capital flexibility matters. Lastly, we continue to believe the public's market current valuation does not fully reflect the economics of our business, and our share repurchase program reflects that view. We have retired 7% approximately of outstanding shares since June 2022. With that, we will open the line up for questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline to the polling process, please press star followed by the number two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Once again, as a reminder, if you wish to ask a question, please press star 1. There are no further questions at this time. I will now turn the call over to Dave Teller. Please continue.

Thank you again for joining us on our Q1 call. We look forward to updating you post-Q2. Thanks again.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.