Executive Summary / Key Takeaways

• Mogo Inc. is executing a strategic transformation, pivoting towards an AI-native wealth management platform and a Bitcoin treasury strategy, aiming to disrupt the Canadian financial landscape with an investor-first, discipline-focused approach.
• The company delivered strong Q2 2025 results, achieving positive net income of $13.5 million, a 48% year-over-year increase in wealth revenue, and a 23% rise in payments revenue, demonstrating early success in its high-margin segments.
• Mogo's core investment thesis hinges on its differentiated technology, including a new unified AI-native platform launching in Q4 2025, and its unique subscription model designed to foster long-term investor outcomes rather than trading activity.
• A significant valuation disconnect persists, with Mogo's Q2 2025 book value of $81.6 million ($3.41 per share) and over $50 million in cash and investments ($2.10 per share) standing against a market capitalization of approximately $54 million.
• The company projects robust growth for 2025, with Wealth revenue expected to increase by 20-25% and Payments by mid-to-high teens, alongside a target of $5 million to $6 million in adjusted EBITDA and positive adjusted net income for the full year.

The Dawn of Intelligent Finance: Mogo's Strategic Reimagining of Wealth

Mogo Inc. (NASDAQ:MOGO) is undergoing a profound strategic evolution, transforming from its roots in traditional lending into a diversified digital wealth, payments, and Bitcoin company. This shift is driven by a clear vision: to leverage artificial intelligence and behavioral science to build an "investor-first" financial ecosystem in Canada. The company's "dual compounding strategy" aims to create value across both its product offerings and its capital structure, with a particular emphasis on its burgeoning wealth management platform and a strategic Bitcoin treasury.

The Canadian wealth management market, a colossal $10.8 trillion in financial assets, is ripe for disruption. For decades, traditional banks and wealth advisors have dominated, often characterized by high fees and underperforming products. Mogo identifies a significant opportunity in this landscape, particularly as 75% of Canadians nearing retirement have saved less than $100,000 against an estimated need of $1.7 million, highlighting a systemic failure of existing solutions. Mogo's strategy directly challenges this status quo, positioning itself against both traditional incumbents and engagement-driven fintech platforms like Robinhood and Wealthsimple, which it argues prioritize trading activity over genuine investor outcomes.

Technological Edge: The AI-Native Platform for Disciplined Investing

At the heart of Mogo's transformation is its commitment to technological differentiation, particularly through its new unified AI-native platform for long-term investors, set to launch its first version (V1) in Q4 2025. This is not merely a redesign but a "full rebuild," leveraging AI tools from product strategy to user experience and code. The platform's core design principle is to reinforce behavioral discipline, rather than maximizing engagement or trading activity, which is a fundamental departure from many competitors. This alignment is crucial for its subscription-based model, where success is tied to members holding investments over time, not frequent trading.

The platform integrates several key technologies to deliver tangible benefits. Its Moka component automates investing with a managed S&P 500 strategy, which delivered a 34% return in 2024 for its growth portfolio. This performance significantly outpaces the average mutual fund, which often charges around 2% in fees while 98% of professionally managed funds underperform the S&P 500 over the long run. For self-directed investors, the Mogo app features "Buffett Mode," designed to impart value investing principles and minimize speculative trading. This app is also notable for being the only self-directed investing product in Canada to offer zero commission and zero FX fees.

A significant technological differentiator is the integration of FinChat Pro, an institutional-grade AI research and analytics platform. This tool, which typically costs around $100 per month, provides hedge fund-level data and fundamental analysis directly within the Mogo app, included in its $15 monthly subscription fee. This offers a substantial informational and analytical edge to retail investors, a capability usually reserved for institutional players. Furthermore, Mogo is undergoing a formal regulatory process to become one of only two companies in Canada authorized to offer both crypto and equities trading in a single regulated account. This strategic move, expected to take a minimum of six months, is not aimed at encouraging crypto speculation but at integrating digital assets into a disciplined, long-term investing framework, a "Buffet mode applied to crypto."

Strategic Pillars and Robust Performance

Mogo's strategic focus on its Wealth and Payments segments is yielding tangible results. In Q2 2025, the company reported a 48% year-over-year growth in wealth revenue, with Assets Under Management (AUM) reaching an all-time high of $462 million, an 18% increase from the prior year. This growth is significantly bolstered by a "meaningful ARPU shift," where new users are generating $20 per month in average revenue, double the $10 per month from the legacy base. This mix shift is driving revenue growth without substantial marketing spend, positioning the company for strong unit economics when a broader marketing push begins in Q1 2026.

The Payments segment, Carta Worldwide, also demonstrated strong performance in Q2 2025, with revenue up 23% year-over-year. Following the strategic exit from its Canadian operations in Q1 2025 to focus exclusively on Europe, Carta's core European business volume grew 15% year-over-year. This growth effectively replaced the 13% revenue from the exited Canadian segment, showcasing successful market scaling. The completion of Carta's full Oracle Cloud Infrastructure (OCI) migration is expected to enhance scalability and cost efficiency, with management foreseeing a long-term opportunity in stablecoin-based payments.

While Lending is no longer Mogo's primary growth driver, it remains a profitable and cash flow-generating segment, supported by over 20 years of experience. The loan book saw growth in Q2 2025, but the company maintains a cautious approach due to economic uncertainties. A new rate cap effective January 2025, lowering the maximum APR from 47% to 34%, is expected to cause an 8-10% decrease in interest revenue for 2025. However, management views this as a long-term opportunity to broaden the appeal of its lending solutions, anticipating a return to sequential growth in the second half of 2025 and into 2026.

Mogo's Bitcoin treasury strategy is a critical component of its capital allocation. In Q2 2025, the company deployed $1 million into Bitcoin ETFs, with an additional $1.4 million invested post-quarter funded by the monetization of its WonderFi (WNDR) stake, which yielded nearly $14 million. This strategy positions Bitcoin as a "hurdle rate" for investment decisions, ensuring capital is deployed for Bitcoin-like or higher returns. Crypto-related investments constituted close to 80% of total investing holdings at the end of Q2 2025.

Financial Health and Operational Discipline

Mogo's financial performance in Q2 2025 underscored its strategic pivot, delivering net income of $13.5 million and an adjusted EBITDA margin of 11.4%. The company was also operating cash flow positive, demonstrating its ability to self-fund core growth. For the full year 2024, Mogo reported revenue of $71.2 million, a 9% increase year-over-year, with adjusted EBITDA reaching $6.7 million, surpassing its increased guidance.

The company's relentless focus on efficiency, initiated in 2022 with a 50% reduction in quarterly operating expenses, continues to drive improved financial metrics. This discipline has enabled Mogo to achieve its second consecutive quarter of year-over-year growth in Q2 2024 with flat operating expenses, and it is on track to more than double its revenue per employee from Q1 2022 levels. This operational rigor is crucial for its goal of achieving positive adjusted net income for the full year 2025 for the first time in its history.

From a liquidity perspective, Mogo ended Q2 2025 with over $50 million in cash, marketable securities, and investments, or approximately $2.10 per share. Its book value stood at $81.6 million, or $3.41 per share. This strong balance sheet provides the flexibility to invest with conviction and adapt to market dynamics.

Competitive Positioning and Outlook

Mogo operates in a highly competitive financial services landscape, but its strategic positioning is distinct. Unlike platforms such as Robinhood and Wealthsimple, which optimize for engagement and trading activity, Mogo's "Intelligent Investing" platform is designed for behavioral discipline and long-term outcomes. While Wealthsimple's private valuation is significantly higher, Mogo aims to serve investors who "outgrow speculation," a potentially large and underserved segment.

Against traditional banks like Royal Bank of Canada (RY), which hold over $1 trillion in wealth assets, Mogo offers a radically different value proposition: a low-cost, transparent, subscription-based model that directly addresses the issue of Canadians underperforming while overpaying. In the payments sector, Carta leverages its position as a low-cost vendor to compete effectively against larger players like Block Inc. (SQ) and PayPal Holdings Inc. , aiming to undercut their pricing. The lending business, with its two decades of experience and proprietary data, provides a significant "moat" against new entrants.

The company's valuation metrics suggest a potential disconnect. With a current price-to-book ratio of 0.76 and a price-to-sales ratio of 0.87, Mogo appears undervalued compared to some peers, particularly given its Q2 2025 book value of $3.41 per share against a market price of $1.83. For comparison, Robinhood (HOOD) has a P/B of 13.86, Coinbase (COIN) has a P/B of 6.78, and PayPal (PYPL) has a P/B of 3.27. This suggests the market may not yet fully appreciate the value of Mogo's underlying assets and its strategic transformation.

Looking ahead, Mogo's guidance for 2025 reflects its focused growth strategy. The company anticipates Wealth revenue growth of 20-25% and Payments revenue growth in the mid-to-high teens. Adjusted EBITDA is projected to be in the range of $5 million to $6 million, with a target of positive adjusted net income for the full year. While subscription services revenue is expected to decrease by 5-8% on a reported basis due to the exit of the institutional brokerage business, adjusted for this, it is still expected to grow at a mid-to-high single-digit rate. The company's disciplined approach to marketing, coupled with strategic partnerships and product enhancements, aims to drive organic growth and improve unit economics.

Conclusion

Mogo Inc. is at a pivotal juncture, strategically repositioning itself as a leader in AI-native wealth management and a key player in the evolving digital asset landscape. The company's "dual compounding strategy," combining innovative product development with a disciplined Bitcoin treasury, offers a compelling investment thesis. Recent financial performance, particularly the strong growth in its high-margin Wealth and Payments segments and the achievement of positive net income in Q2 2025, demonstrates early validation of this strategy.

Despite a clear vision and operational execution, Mogo's current market valuation appears to significantly discount its underlying assets and future growth potential. As the company rolls out its new AI-native platform, expands its regulated crypto offerings, and continues to drive efficiencies, the market may begin to close this perceived valuation gap. Investors should closely monitor the execution of its AI and Bitcoin strategies, the ramp-up of its wealth marketing in 2026, and the continued growth in its core European payments business as key indicators of its long-term success in reshaping the future of intelligent finance.