FinTech companies Nuvei Corporation, Propel Holdings, Payfare Inc., and Mogo Inc. all delivered their second quarter 2022 earnings reports, with varying degrees of success. While the four companies all reported increased revenues, those were offset by tough financial market conditions.
Volatility in digital assets, cryptocurrencies buffet Nuvei Corporation
Nuvei announced a second quarter increase in revenue from $211.3 million USD from $178.2 million USD for the same quarter in the previous year. However, the company noted that changes in foreign currency rates unfavourably impacted revenues year-over-year by $9.4 million USD
At the same time, adjusted EBITDA increased from $79.4 million USD in the second quarter of 2021 to $92.9 million USD for this quarter.
“Our strength this quarter was driven by our disciplined investments for sustainable growth, which continue to enhance our financial profile, as well as strong revenue growth, cash generation and a solid balance sheet,” said Philip Fayer, Nuvei’s chair and CEO.
Nonetheless, Fayer announced the company was amending its outlook for the remainder of the year because of unforeseen changes in currency, volatility in digital assets and cryptocurrencies, and caution with regard to global economic conditions.
“However, we are maintaining our medium and long-term targets, pursuant to which we aspire to achieve $1 billion USD of annual revenue,” Fayer said.
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Quarterly highlights include launching Visa direct support in Canada; as well as adding more than 100 employees, ending with 1,570 employees at June 30, 2022 compared to 1,368 employees as of December 31, 2021.
Founded by Fayer in 2003, Nuvei offers payment solutions to retail merchants and tech and distribution companies.
After it went public on the TSX in 2020, Nuvei closed its United States IPO on the Nasdaq under the symbol ‘NVEI’ in 2021, raising a total of nearly $425 million USD.
Stronger demand for credit props up Propel Holdings
Propel announced an increase in revenue from $28.4 million USD in the second quarter of 2021 to $54.1 million USD in the second quarter of 2022. The company said adjusted EBITDA increased by 13 percent to $8.5 million USD in the second quarter.
Propel said even as it tightened its credit criteria, it was still experiencing stronger demand for consumer credit in general. .
“Amidst the exceptional growth, we have maintained profitability which we attribute to our operating discipline, a variable cost structure and the execution of our strategy,” Clive Kinross, Propel CEO and founder said. “Our team is energized, our balance sheet remains strong, and we are making meaningful and impactful investments into our business to continue our trajectory of long-term profitable growth.”
The FinTech company closed its IPO on the Toronto Stock Exchange in 2021, raising $61 million USD. The shares began trading on October 20 under the symbol ‘PRL.’
Payfare Inc. raises revenues, lowers losses
Marco Margiotta, CEO and founding partner of Payfare, called the FinTech company’s second quarter a significant financial milestone, noting the company achieved positive adjusted EBITDA for the first time.
In its second quarter of 2022, Payfare delivered revenues of $33.6 million CAD, a $24.8 million CAD increase over the second quarter of 2021, and an $8.7 million CAD increase over the first quarter of 2022.
The company drove down its net loss to $2.3 million CAD in the quarter compared to $5 million CAD in the same quarter in the previous year.
As well, Payfare generated positive adjusted EBITDA of $300,000 CAD in the quarter, after posting a $3 million CAD loss in the same period last year.
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“We remain focused on growth and are able to deploy capital opportunistically including remaining active on buying back our shares, funding the launch of new products, and other strategic growth opportunities,” Margiotta said.
Payfare ended the quarter with 884,251 active users, an increase of 621,684 compared to June 30, 2021.
Payfare offers mobile banking, instant payment, and loyalty-reward solutions for gig economy workers in North America. The firm’s software is used by several companies considered to be titans of the gig economy, including Uber, Lyft, and DoorDash.
The company announced an increase to its 2022 annual revenue guidance to $125 million to 135 million CAD from its previously issued guidance of $115 million to $125 million CAD.
Mogo Inc. affected by crypto market declines
While Mogo Inc. increased its revenue over the quarter, and cut down its adjusted EBITDA loss and net loss, the company was quick to shift any blame for problems to its majority stake in Coinsquare.
Mogo posted a 27 percent increase from its comparable 2021 quarter to $17.3 million CAD for the second quarter of 2022. It announced an adjusted EBITDA loss of $4.1 million CAD for this quarter compared to a loss of $5.5 million CAD for the same quarter in 2021.
The company’s net loss increased to $51.9 million CAD in the quarter compared to net income of $9 million CAD for the same quarter in the previous year. Mogo attributed much of the losses to an impairment charge, or a drop in value, of $26.7 million CAD on Mogo’s investment in Coinsquare. Mogo announced it would nearly double its stake in Coinsquare in June, acquiring 37 percent of the crypto startup for $48.6 million CAD.
Mogo also said it had an unrealized loss on Coinsquare warrants of $7 million CAD, and said losses related to Coinsquare resulted from recent broader equity and crypto market declines.
David Feller, Mogo’s CEO and founder, said: “We continue to carefully monitor a range of economic and market indicators to ensure we achieve the right balance between growth and operating profitability.”
Feller added that given the current economic uncertainty Mogo believes it is appropriate to assume those economic challenges will persist through 2023. “As a result, we plan to continue to manage our growth investments more conservatively with a greater emphasis on driving towards profitability,” he said.