Orion Digital Corp. (ORIO) Q4 2020 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by and welcome to Mogo Inc. Q4 2020 Financial Results. At this time, all participant lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the call over to your speaker today, Mr. Craig Armitage. You may begin.

Thank you, operator, and good afternoon, everyone. Thanks for joining us today. Just a couple of quick notes, before we get going. First, just highlight that today's call will contain forward-looking statements that are based on current assumptions and 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 Q4 and yearend filings, as well as periodic filings with regulators in Canada and US, which you can find on SEDAR 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 IFRS financial measures. I'd also highlight that today's amounts are discussed in Canadian dollars unless otherwise indicated. Lastly, we do have presentation slides to accompanying today's call. You should be able to find those through the webcast link. You can also find those on the Investor Relations section of the Mogo website. With that, I'll turn the call over to Dave Feller to get us started. Dave?

Thanks, Craig. Good afternoon and welcome to Mogo's fourth quarter 2020 results call. I'm joined today by Greg Feller, our President and CFO. It's an exciting day for us here at Mogo and we're looking forward to walking you through all the things we've been working on and most importantly, where we're going. Over the last year, we've taken several strategic and financial steps that have fundamentally transformed our business. Our financial results for 2020 which Greg will discuss later, reflect the success of our efforts to quickly adapt to an uncertain environment and underscore the fundamental health, resilience and profitability of our business. In addition to the significant investment in the development of our own platform, we've accelerated our strategy with two acquisitions and a strategic investment, all of which we'll review today. The net effect is we're in an even stronger position to take advantage of the accelerating adoption of digital wallets and financial health solutions. We thought it would be helpful to start today with a popular Cathie Wood presentation that came up earlier this year and highlight the massive growth opportunity with digital wallet. We were obviously pleased to be featuring the report, but most importantly this report highlights the opportunity we've been focused on for building out our multiproduct app. The report highlights that these digital wallets are focused on low cost customer acquisition, building trust and then converting it to other products, so you continue to gain wallet share. Our digital wallets are valued between $250 and $1,900 per user today, but could scale to $20,000. The key is having the right products and experience to builds trust and drive conversion and adoption of other products. We think the key to becoming one of the main winners in the digital wallet space is how well you solve the problem of financial health. The wealth gap is real and is one of the biggest problems we face today. Although everyone has a bank account, the majority of people aren’t close to being where they want to or need to be when it comes to their finances and financial stress remains the number one stress across all demographics. In fact if you follow the traditional path that most people follow today, you'll find yourself with credit card debt, overspending, lack of saving investing and financial stress. A new survey out today highlight how pervasive the problem is with 54% of Canadians saying they don't have a financial plan. The fact is most people really don't know what to do to build wealth and get in control of their finances and for many that do finally figured out, they've missed valuable years of wealth building, which become very hard to make up. Our mission is to help people become financially healthy and we believe the key to achieving this is to not only have the right products, but even more importantly, an experience that gains building wealth. We are focused on building an experience that only helps people get on top of their finances, but helps them get on track to building real wealth and for most people, that should mean being on track to becoming a millionaire. We want to make building wealth one of the most compelling games you'll ever play. The highest form of motivation is doing something because it is fun, not because you have to and that's the key driver of our roadmap; i.e. building a gamified experience with the product to make it easier to practice the right financial behaviors in order to build wealth. So although you're hearing terms like super app, which generally refers to having a whole bunch of products in one app, we think the most important driver is going to be the experience you create around these products and how that experience actually helps the user improve their financial results. The biggest impact you can make on someone's finances, the more you will win. The good news, this is a game that everyone can win. The basis of our solution comes down to the fact that almost anyone can become a millionaire if they get on the right track with the right solutions early on. The numbers don't lie. Even at a $40,000 annual income, which is far below the average income of Canadians, if you follow the path here of 50-30-20 budgeting model based on your after-tax income where 50% goes to needs like food and shelter, 30% to wants like entertainment, travel and clothing and then invested 20% in equities based on historical returns, you would be able to retire by the age of 65 with $5.5 million and if you kept that going for another 15 years you would get to a staggering $23 million. Now even if you only met saving about half that amount, you still get to almost $3 million by age 65 and over $10 million age 80 and as we move into the future working later in life will become increasingly common. Now this assumes that someone never gets a raise and their income stays at the $40,000 level which obviously wouldn’t be the case for most people. The bottom line is even on a below average income, you could become a multimillionaire with the right habits, discipline and plan. Now when most people see these numbers, they're typically shocked as they thought the only way they could ever become a multimillionaire was that they made a lot of money or perhaps win the lotto. We believe that when it comes your finances and building wealth, controlling your spending is by far one of the most important and challenging parts of your money game as this is what determines whether or not you stay out of debt and whether you have money available each month to save and invest, which is really how you build wealth. As you saw on the previous page, you actually don't need to make a lot of money to become wealthy. We've all heard people making millions who have gone bankrupt. How you manage your spending is critical, which is why we put so much work in making the Mogo card a great tool. Again it all starts with your spending and based on the 50-30-20 budgeting model someone making $40,000 a year might have around a $1,000 a month available for paying rent and after paying rents and utilities and if they want to hit their 20% investing, which means you need to budget your spending. That's why avoiding credit cards are critical as it's so easy to overspend and then not only not have any money to save and invest but end up with credit card debt like a large percentage of Canadians today. Like a debit card, this is your own money. There is no credit and no overdraft available and is designed to help you keep up-to-date on all your spending and how much you have left, so you have a better chance of sticking to it. Our goal is to make this most compelling card in your wallet and the easiest way to stick to a budget. One of the cool features of the card is the new Bitcoin cashback program. The mobile card is the first card in Canada to offer the ability for someone to earn Bitcoin with every purchase and help them get in the habit of saving and investing while they're spending. Perhaps most importantly, let anyone participate in Bitcoin for free without risking any of their own money. If there was a 10% cash back card, how many people would switch to it? Well, if you are earning 1% Bitcoin cashback five years ago, the value of the Bitcoin would be worth over hundred times of that which means it would have been equivalent to 100% and cash back and over the last 12 months alone it would be worth over 7%. Today there's no card in Canada that comes close to this and instead of accumulating air miles, you're accumulating an exciting and speculative asset class that can be converted to cash with one click and without having to risk any of your own money. Although it's still early days in terms or our Bitcoin cashback experience, we're already seeing some very positive trends for members who have it activated. These users are spending on average over three times more than a non-Bitcoin cashback user. In order for members activated Bitcoin cashback today, they must refer at least one friend. This is also helping to drive increase sharing. Again this is all game of finding experience, so you can actually make sticking to a budget and moving away from credit cards, an exciting and compelling experience and get our members to make this a primary spending card in their wallet. Many experts say that the two basic opportunities for businesses to solve over the next decade is the wealth gap and climate change and we believe they're linked. The MogoCard is also the first card in Canada that also help you offset your carbon footprint while you spent and given 72% of carbon comes from our own consumption, having a card that offset to CO2 as you spend is the easiest way someone can live as your carbon lifestyle. Again this is all the game of find the experience and make controlling, spending and spending less money, one of the most engaging and rewarding things you can do. I'm building wealth while doing my part of climate change. That's what the next generation consumers expect and that's what we're trying to deliver. Controlling this part of the customer's wallet is not only one of the most important part of helping them achieve their financial goals, but is also one of the most important drivers of engagement and tries building that helps drive adoption about their products and greater share of wallet. Bitcoin is clearly one of the most compelling and exciting new technologies of our lifetime. Every day we see more people and companies looking to invest and get exposure to this new asset class. We were one of the first companies in Canada to offer Bitcoin and they're first offered alongside a broader product offering. Our value proposition today is very simple and compelling. Unlike most other crypto offerings in Canada, we are actually the only one offering just Bitcoin and our members don't have to worry about taking custody of it. We continue to believe there's a large and growing segment of consumers who aren’t crypto enthusiasts, but are looking for a simple and trusted way to invest in this new asset class. We saw significant growth last year in Bitcoin training, although coming off a lower base, we saw just over 14 times growth in trading volume. This growth has also continued in Q1 with January and February over 20 times versus the same period last year, but perhaps even more interesting is what we're seeing in terms of behavior of these users and their engagement. An active Bitcoin member is nine times more engaged than a non-Bitcoin member and this translates into more conversion into other products as well as likelihood to refer others. We announced the launch of our Bitcoin Rewards program last year and we're continuing to build up this experience. Obviously, rewards are a key part of Gamification and can really help drive behavior. What's unique about this program is it gives all those who want to participate and gets Bitcoin but aren’t willing to risk their own money a way to do it. Not only are we adding Bitcoin rewards as incentives to try our products, but we're also building in hidden Easter eggs another Gamification technique where users find hidden rewards. This could be something like after 100 transactions on the MogoCard, a user gets a Bitcoin reward or by practicing dollar cost averaging. We continue to be excited about the impact this work program can have on our user behavior and really help improve engagement and ultimately help them get closer to their financial goals. Although many people are concerned about the volatility of Bitcoin, you can't deny how exciting it is and in fact it's one of the elements that makes it so exciting and getting our members excited and even addicted to playing their wealth building game is exactly what we're trying to do. The big news today is our announcement of the Moka acquisition and before I talk about how this will accelerate our growth strategy, let me first walk you through what makes Moka a great finance app. Phil and his team has done a great job of building Moka and in such a great fit in so many ways, not least of which is how similar our names are. Most importantly, they have been hyper focused on helping Canadians improve their finances by making it easier than ever to not only save money, but invest it. Their core solution today is an automated saving and investing product, that happened by rounding up purchases that members link cards or cards and Moka enables them to link any credit or debit card so that every purchase they make is grounded up and then at the end of the month, that money is debited from their bank account and instead of just going into the savings account, it's invested. Unlike some of the background of features, Moka is agnostic and can be linked as many cards as you want and instead of putting it into low interest rate savings account, the money is being invested. What's more is they enable their members to do this through a TFSA, RRSP or nonregistered account. The average Moka customer saves over $1,000 annually through this program. What's also impressive is they manage to do this through a successful subscription program where they now have over 100,000 active monthly paying subscribers. Members are also given the additional ability to either add or move to a set monthly investment amount and today over 50% of their subscribers have both roundup and recurring deposit set up. So a member can begin their investing journey with simple roundups and then graduate to higher and more automated monthly investing program, all for a low fee of $3 a month. In addition to this, Moka has several other great features including bill negotiation with help members lower their bills. The average savings on this program is over $200. Their debt management solution can help anyone who is struggling, get help them pay it off on a program. Many people get struggled accounts for plan to get a debt and this could be a great help in need before you can begin building wealth. They also have a Cash Back rewards program and an on-demand financial coaching that's powered by certified financial planners. It's easy to see how Moka is a perfect complement to Mogo and our solutions and as every product and feature they have become complementary to ours and dramatically helps improve the impact we make on someone's finances. Again we couldn’t be more excited to welcome the Moka team to T-Mobile. With the acquisition, we will greatly expand our product capabilities and total addressable market and the estimated $5 trillion wealth management industry. Globally we're seeing a massive secular shift to digital wealth platforms. Moka will enable us to fill our biggest product gap Mogo Wealth will give our members the ability to save and invest through TFSA RRSP and nonregistered accounts. Again over 50% of Canadians don't have a financial plan and a big part of that comes down to not knowing how to build wealth and what to invest in. What's more, 45% of Canadians 18 and over don't have a TSA or RRSP account, the two main accounts that Canadians need to be using to save, invest and build wealth, again a massive opportunity. One of the unique things about Moka is they also have a solution that doesn't require a large initial deposit to get started unlike many of the solutions today in the market and anyone can get started with as little as a $1 a month. As you can see, our goal is to build an experience that helps our members build long-term wealth and makes it easy for them to see how they're performing and importantly helps them keep their eye on their price in terms of dollars and starting track for. Again if someone is earning $40,000 a year, invested 20% of their after-tax earnings in the market based on historical performance, they can easily become a millionaire. Having solution and the holistic experience that enables this is a big gap in the market today and we're excited to get this product to our members. We've always talked about our strategy of working alongside your bank account with the goal of one day enabling our members to make the full switch to Mogo. We're currently working on our new digital bank account that will enable our members to make this switch. This new digital account will function similarly to checking account in that members can have their paycheck set up for automated deposit, have automated payment such as mortgage come out of their discount as well as enable P2P. Perhaps most importantly, this will enable us launch features and benefits that are exclusively for direct deposit customers i.e. customers who make Mogo their primary banking relationship. These include launching things like early payday. Obviously this has been very successful with companies in the US. This is one of the key ways they've been able to capture a large share of the market and get consumers to move away from their traditional bank account. Bringing these three accounts together, you can see how it will be set up, so that it actually helps automate budgeting for our members. Your paycheck gets deposited, your spending budget goes into your spending account and 20% gets automatically invested. Again this is what people need to automate their money in a way that helps them stay out of debt and build wealth, everything that today's solutions don't deliver on. Obviously, most members won't start at this level, but our goal is to continue to nudge them to improve their spending and help them get closer to that 20% goal. We've long been planning to launch free stock trading and we're also excited to announce that this acquisition will speed up our plans to do this. Along with bringing in crypto trading to our strategic partnership with Coinsquare. Although we believe strongly in automated wealth building program to a low-cost ETF, there is also a growing retail trend in stock trading and investing. Although there are many people who want a more passive investment approach there is also a growing number of consumers that want to invest directly in stocks and cryptos and in the long run, we think most will incorporate both into their investment strategy. Our goal is to also design into a way that helps their members to see how they're performing versus benchmark performance of the S&P 500. As an investor I will want to know if my self-direct investment strategy is more effective than an easier and more passive strategy versus getting myself that I'm doing well, again another gap in today's market. Free trading is now the standard in the US and so far in Canada, there is only one option for investors and that option has a lot of room for improvement and that's what we plan on doing. Our goal is to launch this before the end of this year. With that, I'll ask Greg to cover the transaction and financials in more detail. Greg?

Thanks Dave. As Dave mentioned, we've fundamentally transformed the business in recent quarters through two acquisitions and a strategic investment, all of which I'll discuss in more detail. Specifically, these transactions that stand our product capability to accelerate our roadmap and give us additional scale that we believe positions us for accelerating subscriptions and services revenue growth in 2021. As we look at the mobile platform, we'll have four drivers of value going forward. One, our core B2C business, which once closed, now includes Moka's savings and investment solution alongside Moka's existing digital wallet capability. Two, our B2B payments business, which serves as an attractive in international markets as they're shifting from lengthy processors to API based next gen processors like Carta's. Three, our now strategic investment in coins, which we believe has tremendous sign upside and four, a diverse portfolio of minority investments in mostly higher technology companies, which post yearend accounted their investment in Bitcoin. We believe the combination of assets makes Mogo a strategic and valuable company in the fintech sector and a unique way for investments to gain exposure to some of the most disruptive trends in the market today. Earlier today, we entered into a binding LOI to acquire Moka. In addition to this benefit in terms of expanding product offering in a massive wealth management market, the proposed acquisition also includes Moka's more than 500,000 members and over 100,000 monthly subscribers. The acquisition will therefore significantly expand our current member base to approximately 1.7 million. The acquisition also brings approximately 250 million of assets under management along the portfolio of management capabilities throughout Canada and Europe. As Dave mentioned, it gives us a much broader range of savings and investing products along with Moka’s technology platform, experience in tech teams. Most significantly, to accelerate Moka’s plans to launch a free stock trading solution for Canadian. The transaction also accelerates growth of our subscription and transaction based revenue. And lastly, it will allow us to expand geographically into large traction markets. As mentioned North America the press release, the transaction is going to be completed by an old stock transaction for approximately 5 million shares. During the current quarter, we closed on our previously announced acquisition of products adding significant digital payments capability to our platform along with the growing net gen B2B global payments business. Cardiff generation platform is the engine behind fintech companies and products around the globe, powering over 100 card programs, providing vital processing technology to industry leaders including [indiscernible] and others. Cardiff which is headquartered in Toronto process over 5 billion worth of transactions on its platform in 2020, which is up 35% from 2019. In addition, Cardiff were in significant benefits from Mogo including significantly expanded TAM to enact global payments market, strengthening our digital wallet capabilities with deep payment expertise which we're leveraging in the development of our upcoming pure payments solution, increasing Mogo's revenue scale and accelerating the growth of our high margin subscription and transaction based revenue. Cardiff has been making good progress on its growth plans. Last month, they announced the expansion into Japan for trans [ph] launch of their multi-current debit card. They also recently announced their expansion to the US, the world's largest payment market. Cardiff will be providing products with initial group of clients and expect to further expand with safer banks and fin tech companies in the coming quarters. Another significant and highly strategic transaction that we announced post year-end was the agreement of acquire interest in Canada's leading crypto currency platform Coinsquare. Launched in 2014 Coinsquare is going to become the leading digital app trading platform in Canada with monthly trading volume in excess of 600 million and their assets under management to over 600 million. Coinsquare's current revenue run rate is also substantial at approximately $50 million, which would be an almost fourfold increase at full year 2020 results. We've had a relationship with Coinsquare for nearly three years as they currently power a Bitcoin account. We believe their platform is one of the most robust trading platforms in Canada for digital assets and as a result, we believe they're well positioned to capitalize in growth going forward. The first gate of this transaction will have us 19.9% of points whereby the issuance of approximately 2.8 million shares and $27 of cash. We expect to close this initial investment next month. Coinsquare agreement also includes an option for Mogo to acquire additional shares and take ownership in the company to approximately 43%, which underscores our view that Coinsquare is a highly strategic and valuable assets for Mogo as we believe crypto currency is and will continue to be a core part of any leading next gen digital wallet. In addition to giving mobile investment a significant take to what we believe is a highly strategic and valuable platform ecosystems. The Coinsquare investment provides significant leverage to one of the most exciting factors to our investors in FinTech. We also see significant opportunities to work together more closely with them by bringing together this mobile digital wallet capabilities and Coinsquare's leading digital crypto trading platform in Canada. The last value driver for Mogo is that investment portfolio which now includes Bitcoin alongside the portfolio of just under a dozen minority investments in private companies in their technology, medtech, media and the gaming space. The investments which we acquired from our acquisition of different capital in 2019 the current book value of $17 million, excluding the Cardiff stake which was previously part of this portfolio at year end. We believe that a number of these investments, filthy monetization of them in 2021 and some have potentially meaningful treatments or book value. In addition to this portfolio, which we're focused on monetizing, we also now hold our 17 point Bitcoin which we purchased earlier this year at an average price of approximately $33,000 US per coin. The investment was part of our announced plans to make it initial corporate investment of up to $1.5 million of Bitcoin representing approximately 1.5% of our total assets at the time. The investment in Bitcoin is consistent with our belief in Bitcoin as an emerging asset class and builds on our significant product development related investments in Bitcoin last year including mobile crypto and the Bitcoin rewards program. Now let me turn to Q4 and the full-year financial results. I will be brief in the full results are available since this morning. For anyone who is new to Mogo processes that our yearend numbers reflect an expected decrease in loan origination, interest revenue and other related revenue stream and we sold a portion of our loan portfolio in early 2020 and intentionally reduced lending activity led to COVID and our goal to resolve balance sheet credit risk. These factors were partially offset by growth in subscription and services revenue, which accelerated at the end of the year, driven mostly by mobile crypto, mobile card, also if they were offset by lower operating unit expenses improvements for the improvement in capital structure. Importantly, our Q4 results showed subscription and services revenue specifically, subscription and services revenue is $4.6 million a quarter up 8.4% sequentially from Q3. Q4 2020 revenue was $10 million compared to $9.8 million in Q3 driven by subscription and services revenue again offsetting decline in interest revenue. The underlying profitability of our business was again clearly highlighted in the quarter and the full year. Gross profit margin, they extended the year up to 58% in 2019 and 2020 EBITDA at 51% to $11.6 million from $7.2 million. The profitability gives us increased confidence in resuming growth related investments particularly in product development marketing as we look to take advantage of the accelerating shift to digital banking and Mogo's unique position in the Canadian market. Turning to our balance sheet, we've also significantly improved our balance sheet and financial position through a series of important steps over the past 12 month. Specifically in 2020 we sold their loan book, our liquid loan book, reducing our credit exposure by approximately $32 million reducing our credit facilities outstanding to $37 million from $77 million at year-end in 2019. We also extended our remaining facility and reduced the rate by approximately 40 basis points and we reduced the interest rate on our debentures from 14% to 7%. Lastly, post year-end, we added a significant amount of growth capital to our balance sheet raising a total net of expenses of $81.6 million. Individually these are all meaningful steps. Together they allow us move forward in a much stronger financial position and put us in an excellent position to capitalize in the growth opportunities going forward. Mogo's model, it starts with a low cost member acquisition strategy. Our new member growth accelerated in the second quarter in a row in Q4, net member additions increased 51% in Q4 relative to additions in Q3 and total member exceeded 1.1 million members at yearend an increase of approximately 15% year over 2019. This speaks to the feel of our products including Bitcoin for any fraud protection in our Mogo cards as well as the value it had integrated into a seamless, easy to use digital accounts that helps members manage their financial lives. We believe the current product trends we're seeing puts us in a good position for continued strong member growth and engagement in 2021. As we've discussed in the past, we believe we have one of the best monetization models of any consumer fintech globally. We currently have seven distinct ways to monetize the member base and with the addition of Mogo -- in addition to member monetization revenue to card, we also have diversified revenue streams include processing fees, which we will begin to recognize in the first quarter. As we look ahead to 2021, we're turning our attention to increased engagement and monetization to support accelerating revenue growth. Specifically, the current trends we're seeing along the recently accounted strategic transactions that have given us the increased confidence in our revenue outlook to providing them specific guidance for 2021. This guided currently excludes the impact of Moca. Specifically, we're guiding towards continued increase in net member additions during the year, accelerating growth in subscription and service revenue and we're targeting 80% to 100% year-over-year growth in subscription and services revenue in Q4 2021 compared to the same period in 2020. With that we'll open the call up to questions.

[Operator instructions] Your first question is from Doug Taylor of Canaccord Genuity. Your line is open.

The guidance you provided for the 80% to 100% growth Q4 to Q4 in terms of subscription and services revenue. I wonder if you could just help us think about how we should now chart that over the course of the year in light of the M&A that has happened and also with your product roadmap and your new products being released over the course of the year?

So yeah, so we do really sort of see this trend from a subscription and services perspective accelerate growth accelerating during the year. So effectively accelerating growth going into Q4. So obviously that means that we expect the impact to be bigger in Q2 that it was in Q1 etcetera. Also from an M&A perspective, card, we're only going to be partially consolidating the results in Q1, where our full consolidating in Q2. Moka, which right now is not part of that guidance, we may see some revenue impact in Q2 depending on when we close the transaction, but we do believe that ultimately Moka will be consolidated for the full quarter by Q3. So that's obviously going to drive further acceleration in overall subscription services revenue during the year.

And so, none of that seems to be tied to any material jump from any particular product launch or upcoming new feature that you're releasing. Is that correct? You expect the organic business to be relatively smooth in terms of the growth over the course of the year?

Yes. Well, actually, I would say, there is acceleration we see in the organic business as well. Some of the trends that Dave actually spoke to are - were early days in a lot of these products in terms of revenue scale. But the momentum we're seeing, we think, is going to make a bigger impact on our overall revenue growth as the quarters go on and that revenue has more scale. So, we actually do expect similar kind of accelerating trends on an organic level as well.

Okay. You signaled, I believe, with your prepared remarks there that you'd like to reinvest a little more significantly in the product, in the marketing. And certainly it looks like the market's given you the license to do that. But I wonder if you can help us think about how your updated, I guess, view on what the right level of investment is so that we can tune our models to that.

Yes. So we're - we haven't given specific guidance on EBITDA. But your takeaway, I would say, is accurate, that our strong bias if we kind of look at 2020 what did we do. One of the key things that we believe we accomplish was really highlighting the underlying possibility of the model when we dealt that growth spend and where we generated close to 50% EBITDA margins in the second and third quarter. And we also highlighted our ability to very quickly dial those growth investments down in particular on the marketing side and selling the product development side. But now, with the position that we're in, in terms of the early trends that we're seeing in our products, the excitement that we have on new product investment and the upcoming transaction with Moka as well as expansion of Carta into new markets in the US. We are - and that could be a significant amount of capital that we put on our balance sheet. We feel that we're in a very good position to dial up that growth investment, which means you're really going to see that growth investments show up in technology and development spend as well as - as well on the marketing side. You thought some of that show up in the current quarter sequentially over Q3. But I would say, you can expect some similar trends going into 2021. So, we're going to be less focus on the EBITDA line in 2021 as we believe ultimately that this entire sector is accelerating. And over the next 24 months, we believe the leaders are going to be established. And we believe we're in a very key position in the Canadian market to remain one of the key leaders here and we want to take advantage of that. We want to take advantage of our financial strength and our product strength. So, our bias is definitely to invest in growth. And we believe that that's going to be the right ROI decision for the company and for our investors.

Okay. Perhaps one last question for me. Maybe it's too early for you to say, but can you talk a little bit about what once this - the Moka transaction is closed, what the integration roadmap or milestones we should be thinking about? And is it your intention to run that product in that brand or consolidate into the Mogo brand? I mean, anything like that I think might be helpful. And so, that we can know what that's going to look like.

Yes. I'll let Dave comment a little bit on it, but as you say it is early. We just announced the transaction. And obviously as we get closer to close, we will come out with more specific information on our plan. So, we're not going to get into sort of real specifics. But I don't know Dave if there's anything on any of those topics that you think are worthwhile touching on right now.

Sure. Yes. I think, initially we think at the very least rebranding Moka to Mogo and then the Moka app becomes effectively the Mogo saving investing app and that effectively could be just the initial way that we launch Mogo saving and investing for our members and then obviously start promoting that to our member base. Obviously, we're seeing similar strategies with other companies, well simple obviously now has three different apps. So, there is a multi-app strategy there that actually has some benefits. So, the initial goal is to you know integrate that way and then make it easier for both Moka members and Mogo members to go between the apps. But then, as we kind of visualize through the presentation, our goal is obviously to bring that into the Mogo app as well. And then, as we look at the stock trading and crypto, there's a good chance that we decide the best way to launch that for a bunch of reasons is a separate app, still under the Mogo brand, right. So those are still things that we're thinking through. But I would say that's kind of where we are right now.

Your next question is from Scott Buck of H.C. Wainwright. Your line is open.

I'm hoping maybe you can give a little bit of color on the preference for acquisitions rather than partnerships? And should we expect to see additional acquisitions as you continue to build out the Mogo wealth vertical?

Yes. So let me comment on that. So, I guess, here is how we look at acquisitions right now. We look at acquisitions as a way to accelerate our product roadmap and bring key expertise and scale to the business. And if we do find opportunities that, I mean, Moka just being a great example where for us to have built their functionality and be on a path to even launch free stock trading, we'd probably be 12 months from now, given our own roadmap before we could even start on that. And then, you have to bring the capabilities and expertise that they bring on the team from a wealth management perspective. You're talking about a regulated industry. And so, there's whole bunch of benefits on an acquisition there as far as accelerating your product road map and aligning and bringing the expertise in-house. So that's just natural. And if there are other opportunities, which we think complement our road map and accelerate it from an M&A perspective, then we will absolutely look at that. So, I do think our strategy going forward will be a combination of our own product development initiative, but complemented with strategic acquisitions that we think accelerate that, bring scale and expertise and other capabilities that we think are value add. So I think it is going to continue to be a combination of those two things.

Great. That's very helpful. Second one for me, I'm curious, the organic member growth in the fourth quarter and thus far in the first quarter, how much of that do you attribute to the kind of frenzy around Bitcoin and crypto? And maybe if you have a feel of the new account or a new member that you've added, how many also have opened Bitcoin accounts with you guys?

Well, maybe, Dave, if you want to - I mean, it's always difficult to actually be very specific on where the member growth is coming from. Because when customers come in, they actually onboard into the account which has multiple products. So it's difficult to say exactly all the time what they're - what really is the driver. But I would say for sure, Bitcoin is probably one of the biggest drivers and accelerators of member growth. If you look at it and you think about the broader - what's happening in the landscape, effectively Bitcoin as an emerging asset class, cryptocurrency as an emerging technology and currency is obviously gaining increased attention with consumers and awareness. And we believe that that trend is going to continue. And the majority of traditional players don't offer access to that product. So, if you think about the first wave of adoption of cryptocurrency, it was the early adopters that went online, found crypto exchanges that people hadn't heard of in the past, jump through hoops, paid high fees to be able to trade crypto. But increasingly, we believe a big part of the next wave are going to be the everyday consumer that actually just wants to get access to maybe Bitcoin start to test it out and have exposure. And they're not going to be willing to jump through hoops, pay high fees and they're going to want to go to players that have a brand, have credibility, great user experience. And that's really what we're positioning Mogo for on the crypto side. So that clearly has been a trend. And we think it's the trend that's going to continue for the foreseeable future. Obviously the sector is volatile. And you see volatility in prices, not necessarily price levels but volatility in prices driving that interest as well and so that will continue. But I'd say overall the trend is continuing to be positive. And then our card, our card I would say is right behind there as far as increasing attention and awareness and interest from consumers and obviously there is a link even to the card to bitcoin with the cash back. So, I'd say, those are the two big drivers we're seeing.

Maybe, Greg, I'll just add to that. T the link part of this obviously is the strategy of having these multiple products when certain things are more relevant than others and we can leverage that. One of the things we're seeing with our Bitcoin members for example that active Bitcoin members eight times more likely to use the MogoCard that are non-active Bitcoin member. So there's a strong correlation between Bitcoin member activity and conversion into other products. And obviously things like the Bitcoin cash back obviously has - is what links it but increasingly so is our reward program. We've also - have often offer where we're offering Bitcoin cash back on mortgage as well. So, as an example, a Bitcoin active member is 2 times more likely to apply for a mortgage but also 8 times more likely to refer a friend. So even obviously on the referral and kind of that viral coefficient in terms of not only driving engagement but actually cross-selling into other products as well as kind of helping spread the word. The other thing I'd mention is we're also tracking what we call kind of mega users and one of the things we're always focused on is the more engagement you have, there's obviously a strong correlation between engagement and product adoption. Obviously the more somebody is logging into your applications, the more likely they are to build trust and credibility and ultimately bump into other products. So we right now have a few segments. We have a segment of users that have logged in on average over. In fact, one segment have logged in on average over 182 times so far this month alone. So - and what we're seeing in there is a very high percentage of them have multiple products. So, these are the things some of the trends we're looking at and obviously trying to determine kind of what that winning formula is. But clearly what seems to accelerate it is the combination of the product offering versus just one product.

Your next question is from Bill Zhang of Raymond James. Your line is open.

Two questions on the Coinsquare. Is the CAD600 million, is that as of March? And the second question, if we're using a 1% spread on that, based on my calculation, that comes out to CAD72 million. So, could you just reconcile that with CAD50 million you have on the presentation slide?

Yes. So, obviously, we're not giving - we have a minority stake in Coinsquare. So we're not disclosing full financials and information on Coinsquare. But CAD600 million AUM is the current number. So that's the CAD600 million AUM number, and the revenue component is a combination of fees and spread. And what we're saying is that they're at a run rate right now north of CAD50 million without giving - too specific. But that overall spread can vary month-to-month as well.

Okay. That makes sense. And so, the data on subscription and service sequential growth, what's the big driver there?

Subscription and services sequential growth? Yes, the biggest driver there is, well the. Let's put it this way, the fastest growing product there and revenue by far is Bitcoin trading. So that is a, is a big part of it and probably the second fastest revenue growth sequentially in subscription services would be - would be card transaction fees.

Okay, great. That's good. And final one for me. Can you give an update on the P2P timeline and also when we can expect the revenues to become more meaningful on the Bitcoin trading?

Dave, you want to talk about the P2P timing?

Yes, so one of the things that I highlighted in presentation today is this new digital bank account and that actually is related to our P2P roadmap. We've always the goal - has always been again to essentially one day enabled the full switched, today, all of our members have bank accounts. Our goal has not been to essentially enables somebody to make the full switch. So primarily people have a bank account and then they're using the Mogo app for various things. The digital bank account is actually one of the first pieces on the road map to P2P what that's also going to do is enable a more convenient and frictionless way for people to get money in it out of their Mogo account and from that one experience they can either put money into Bitcoin, put money into - in the case of obviously once we get wealth, wealth as well as the spending card all through one account and one experience so versus different ways to load money in Bitcoin and different ways to load money into card. So there is a bunch of other enhancements that are going to go along with that. And then the other piece of that is P2P right and that ability will now enable somebody to effectively do person to person transfer and they can either take the funds out of their cash account, which is a new digital bank account or they can choose to take it out of their spending account, if they're using the cart. We expect that P2P and this account is going to launch in the second half of this year. So we still plan before the end of the year for that one account along with P2P launched here in Canada.

And to your last question on Bitcoin revenue. As we talked about earlier the sequential accelerating subscription services revenue growth in 2021 and the pretty meaningful 80% to 100% range of year-over-year growth that we're guiding for in Q4 and that's going to be a combination of at that stage we would expect the crypto revenue to be a meaningful component of it, but just one piece. The bottom line is our model is not reliant on one stream of revenue and we actually believe that really are a pretty unique differentiating feature that Mogo has relative to most of the consumer FinTech on the digital wallets out there with few exceptions, is the diversity of our revenue stream demonetization streams and we think that's going to be a pretty critical differentiator and value driver going forward.

Your next question is from Suthan Sukumar of Eight Capital. Your line is open.

Good evening, gents. And congrats on the Mogo acquisition. Maybe I’ll lead with a question there first down. So with Moka, you guys are acquiring a fairly significant user base, could you guys provide some color on kind of what is the profile of a typical Moka user look like compared to a typical Mogo user never considering things like the demographic, engagement levels. Can I was wondering what some of the similarities and differences are and how you guys are thinking about kind of leveraging this based longer term given you're expanding scope of offerings.

So, it's Dave. A couple of things on this. Obviously, we're still spending a lot of time understanding the Moka business model, demographics, all of that data, but initially, what I'll say is obviously their value prop has been completely different than ours in terms of their really all about saving and investing and up until this point that's not in the market, we've been focused on. Obviously, you could say with Bitcoin that is obviously on the investment side that really would have been the first time we had any sort of kind of product offering where we're attracting members that were literally looking to invest. Up until then, it was mostly around controlling spending, I'm obviously we have on the lending side, et cetera. So I would say that is the big piece, and quite frankly that's the piece that we're most excited about that this is a value prop that we have yet to have to not only offer to our existing members, but obviously attracts a member base that we have an attractive before. Generally, I'd say too, obviously this round feature one of the great things about it is, it really is a perfect gateway for someone to begin even saving and investing. Right, so I'd say, typically the customer signing up for a Moka type solution is one that is having difficulties saving investing just saw a recent survey today. So the number one goal of Millennials and Gen-Z is actually increase their savings and most of them are looking for, well how am I going to do that? Right? Starting to see a lot of kind of traction in those types of apps that are actually almost making it something that happens in the background and then again, these are typically people. I would say more on the behavioral side that - and again they could be all ages. Right? In fact if you look at the stats, 35 to 55 year old actually are less likely to have a financial plan than ages under 35. So I'd say they typically fall into that category, they haven't figured out a financial plan, they're struggling to save money, they are looking for a solution that can just get them on track. Obviously, the fact that the average Moka user saves over $1,000 annually. They start to see it as a significant amount of money. Anybody that then logged in and find out, they've got over 1,000 bucks and when before that they were struggling to save any money, you can imagine how valuable, they find that. So anyway, I think that's probably the - where we are in terms of understanding who their customers are, what they're looking for and ultimately how we can see it companies are offering.

Did you comment on the overlap that we saw between our member base in there?

No, I didn't.

So, Suthan one of the things that we saw when we looked at it is actually a pretty low overlap on their member base with our member base. So in the low double-digit percentage range of the total members. So it does tell you that that value prop on the investing and saving side is actually attracting in a lot of ways the different sort of demo from a financial kind of held perspective.

Okay. That's actually helpful, thank you. Kind of shifting gears here to the payment side of the business. You guys touched on Carta continue to focus on kind of global expansion with moving into Japan and in the U.S. Can you touch on - again what's the opportunity ahead on the B2B front with Carta, as you look to leverage some of the core Moka assets as part of that strategy going forward.

Yes. So look, I think there is a couple of things, first of all, there is, we just think there's significant opportunity with Carta is existing business and value prop in the market. As a reminder, when we decided to acquire Carta, we actually looked at for ourselves when we are moving from one of the legacy processors we talk to two of the other major NextGen processors Marqeta and Galileo. And in fact, we felt that Carta's platform had similar functionality, but also at a much better value overall value proposition and ROI for us and we think that that's where the market's going. Carta builds out their model in Europe where it is a lot more competitive and we think that that model is actually making its way to the U.S. And so we think that's going to be a big opportunity for Carta to take advantage of that in the U.S. and related to the opportunity to kind of see some synergies from leveraging Mogo's platform to help Carta in their B2B business, obviously you're not talking about the synergies of bringing leveraging Carta's payment technology in that to help Mogo in their own platform. I would say, we're still early days there, but we are increasingly seeing opportunities to do so, whether it's, we're already seeing some requests from Carta's customers because that whole market is moving from a one-off, one piece of the solution as in terms of say just processing to a broader full stack, and we're already seeing some inbounds from some of Carta's customers being interested in some of Mogo solution. So effectively Carta is in a unique position that they hey look, talking to other FinTechs outside of Canada, we actually know what is working and we got insight kind of scoop on what a great user experience is and how to build up your card program into a broader digital wallet and so we do see a number of opportunities going forward to leverage Moga's platform on that front, but we definitely feel early days there and I guess that's why to the earlier question on investment and why we do think that this is the opportunity we quite frankly have a lot of kind of growth initiatives and investment opportunities in both Carta side and the Mogo side both on Mogo's existing products and then on new products and like the well side. So there's really a lot of we believe big growth opportunities out there for us.

There are no questions assigned, please continue.

Okay. Well, I think just to summarize obviously it's been a busy year and with everything going on we're definitely expecting an even busier next few years here. One of the thing I want to emphasize is we're still very early in the stages of building this company and really we're hyper focused on building one of the most powerful engaging financial apps around, really excited to update -- give updates on how the Mogo transaction is going and obviously a lot of new product releases yet to come this year, which we'll keep you update. Other than that, we look forward to updating you on our Q1 results call in May. Thanks again.

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