Orion Digital reported second-quarter adjusted EBITDA of CAD 3.3 million, up 115% from the prior quarter and 70% from a year earlier, as the company cited growth in its wealth operation, reduced lending-related costs and operating discipline.
Adjusted EBITDA margin expanded to 19.5% in the quarter, while gross margin increased to 75%. Orion also generated CAD 1.3 million in operating income, according to President and CFO Greg Feller.
Intelligent Investing Launches
Founder, CEO and Chairman Dave Feller said Orion commercially launched its Intelligent Investing platform on July 27. The offering combines commission-free investing, access to FinChat AI research tools and a system intended to help investors document and review capital-allocation decisions.
Feller said the platform is designed to emphasize research, patience and the long-term assessment of investment decisions rather than trading activity. He described Orion’s longer-term aim as building a capital-allocation system that captures investor decisions, their reasoning and relevant context, potentially allowing artificial intelligence tools to identify factors associated with better outcomes over time.
The company plans to expand the platform’s reach during the remainder of the year, test customer-acquisition messaging and develop an acquisition model before committing additional growth capital. Feller said future investment in the platform would be based on evidence of customer engagement, retention, funded-account growth and customer economics.
Orion’s consolidated wealth business, which provides the regulatory, technology and operating foundation for the new service, reported CAD 545.3 million in assets under management, up 18% year over year. Wealth revenue rose 14% to CAD 4.1 million.
Revenue Mix and Lending Strategy
Payments revenue was CAD 2.4 million, down 9% from a year earlier, primarily because of lower non-recurring services revenue. European transaction volume was CAD 2.8 billion, slightly above the prior quarter and stable from the previous year.
Interest revenue declined 3% as Orion deliberately reduced its lending operations. Feller said the company is accepting near-term pressure on lending revenue rather than deploy additional capital at returns or liquidity levels it considers insufficient.
The company’s updated lending framework targets returns within approximately 18 to 24 months, including the equity required for its lending facility and customer-acquisition costs. Orion said it will increase loan originations only when expected net yields, credit performance, acquisition costs and capital requirements meet those thresholds.
At quarter-end, gross loan receivables were CAD 75.4 million and the related lending credit facility was CAD 49.8 million.
Cash Flow, Capital Allocation and Outlook
Cash provided by operating activities was CAD 2.7 million, compared with CAD 900,000 in the prior-year quarter. The company reported core operating cash generation of CAD 5.1 million, a supplemental measure that excludes growth investment, lending activity and corporate finance activities.
Excluding a CAD 3 million non-recurring receipt in the prior-year period, core operating cash generation increased by about CAD 1.1 million, or 29%, Orion said.
During the quarter, the company invested about CAD 900,000 in growth and platform development and CAD 1.65 million in its loan portfolio. It also repaid approximately CAD 1.6 million under its lending credit facility and more than CAD 500,000 of debentures. Including share repurchases, total cash declined by about CAD 500,000 to CAD 25.1 million.
Orion maintained its full-year guidance but said stronger-than-expected first-half performance has it expecting adjusted EBITDA at the upper end of, or above, its previously stated CAD 6 million to CAD 7 million range. The company expects second-half adjusted EBITDA to moderate as it gradually increases lending originations, provisions normalize and investments in commercializing Intelligent Investing rise.
Feller also addressed a Nasdaq notice related to the exchange’s minimum bid-price requirement. He said the notice was not unexpected, that Orion has a defined compliance period and that maintaining its Nasdaq listing remains important to the company. Orion is also listed on the Toronto Stock Exchange.
About Mogo (NASDAQ:MOGO)
Mogo Inc is a Vancouver-based financial technology company that offers a suite of digital banking and personal finance products through a mobile-first platform. The firm’s core mission is to empower consumers with tools to manage their money, monitor their credit, and guard against identity fraud, all delivered via a unified smartphone application. By integrating multiple financial services into one interface, Mogo aims to simplify day-to-day money management and foster healthier financial habits among its members.
The company’s flagship offering is a prepaid Visa card that links directly to its app, enabling users to track spending in real time without the risk of overdraft fees associated with traditional credit cards.
