Mogo Finance Technology Inc. (NASDAQ:MOGO) Q3 2019 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 05:00 pm ET

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Mogo Finance Technology Inc. (NASDAQ:MOGO) Q3 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] Your first question is from Nik Priebe from BMO Capital Markets. Please go ahead.

Analyst
Nik Priebe

Okay, thanks. I wanted to start with a question on the new lending partnership with goeasy. I recognize it's still early days as you say, but I was just wondering if there is any takeaways or learnings there from the initial pool of loans that had been originated for and funded by that partner.

Executive
Greg Feller

Hey, Nik, it's Greg. I'll start on this. So yeah, the partnership was launched fairly quickly after we announced it. But I think as goeasy even mentioned on their earnings call, it's going to be a managed launch where we're looking to make sure everything is working properly, goeasy is happy with things and before we actually start ramping the volumes up materially. I think there's been a lot of learnings internally as we've been working with them that quite frankly are going to help us as we launch with other partners. But the net of it is, I think every week we're doing better than the previous week. It's headed in the right direction and I think we feel pretty good about where we are right now. And we feel very good about goeasy as a longer-term partner for us in this.

Analyst
Nik Priebe

Okay. And how long would you, I guess, anticipate piloting that partnership for before you get a green light to sort of expand that relationship and accelerate the transfer of new originations to goeasy?

Executive
Greg Feller

Yeah, we would expect to be in a position by Q1 to move from a pilot to a longer-term agreement would be our target.

Analyst
Nik Priebe

Okay, okay. Got it. And then I did want to ask one other thing that just kind of stood out to me here. When I'm looking at the balance of gross loans qu,arter-over-quarter, it's essentially flat, I think it was up about 0.5% or so, which is kind of consistent with what you guys have articulated that, that on balance sheet lending portfolio should be flat. But I noticed that interest revenue was up about 7% sequentially. So I was just wondering if you could help me kind of fill in the blank there. Like, is there a mix shift within the existing portfolio?

Executive
Greg Feller

Yeah, yeah, there was. That's exactly right. We have been -- as some loans have churned off, we've managed to move them into higher yielding loans. So we've been -- we've obviously been focusing on yield on the portfolio and that's what you've seen there.

Analyst
Nik Priebe

Got it, got it. Okay, that's it from me. Thanks.

Operator
Operator

Thank you. Your next question is from Doug Taylor from Canaccord Genuity. Doug, please go ahead.

Analyst
Doug Taylor

Thank you and good evening. I certainly appreciate all of the new guidance metrics you've provided to help us think about 2020. I wonder if you'd provide what degree of third-party loan originations would be required to get you through all of these guidance metrics and into that breakeven net cash use in Q4. Any