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GoldMoney Inc. Releases 2016 Third-Quarter Financial Results

 -- Published: Tuesday, 1 March 2016 | Print  | Disqus 

GoldMoney Inc. (XAU.V):

  • Consolidated Gross Revenue of $80.82 million for the quarter, up 22% from $66.25 million for the previous quarter ended September 30, 2015
  • BitGold Gross Revenue of $13.26 million up 27% quarter-over-quarter
  • GoldMoney Gross Revenue of $67.56 million, up 21% quarter-over-quarter
  • Group Gross Profit of $1.15 million for the quarter, up 9.2% quarter-over-quarter
  • Total comprehensive loss for the quarter of $2,824,859, or $0.05 per share, improved from $0.09 per share in the previous quarter
  • Non-IFRS Adjusted Loss of $1,658,618 after netting out one-time non-recurring expenses and non-cash items
  • 257,780 user signups during the quarter, reflecting all-in acquisition cost of $6.43 per user (based on Non-IFRS Adjusted Loss), reducing all-in acquisition cost 27% quarter-over-quarter - significantly below financial services industry average
  • 602,120 users holding $1.54 billion in customer assets under administration in both platforms as of December 31, 2015
  • Group Liquidity of $28.76 million at quarter end consisting of cash, precious metals, and marketable securities. Pro-Forma liquidity of $63.27 million following completion of a Bought Deal Financing on February 24, 2016

GoldMoney Inc. (XAU.V) (the “Company”), a full-reserve and gold-based financial service and technology group, today announced results for the third quarter ended December 31, 2015. GoldMoney and BitGold continued to gain market share, expand core product offerings, and grow their customer base during the quarter, cementing the Company as a leading provider of gold based savings and payments accounts worldwide.

The Company reported revenue for the period of $80.82 million, up 22% from $66.25 million for the previous quarter. Gross profit for Q3 was $1.15 million, driven by continued streamlining of cost of sales for both businesses. In pursuing a measured growth strategy, the Company reports non-IFRS Adjusted Loss of $1,658,618, representing an all-in user acquisition cost of $6.43 for the group, 27% lower than Q2. After a thorough data review of the first six months of BitGold platform operations in November 2015, the Company made a decision to lower certain growth expenditures while building out additional network features and completing the BitGold payments ecosystem and GoldMoney wealth platform. Despite lower direct-marketing expenditures through reduced online advertising and lower referral marketing, the BitGold network still maintained strong user and transaction growth during the period.

"During the third quarter we demonstrated our commitment to prudent capital allocation and the optimization of growth for every dollar spent while we continue to build and improve both businesses,” said Roy Sebag, GoldMoney Inc. CEO. “At BitGold we spent almost 30% less quarter-over-quarter on direct marketing while still achieving the same level of user growth, more than doubling transaction volume, and nearly doubling customer gold under custody. This reflects the organic growth driving continued BitGold adoption. On the GoldMoney side, we continued to focus on cost reductions and have shown a marked improvement in the profitability of the business. As the streamlining of the business has been a continuous process, a fully normalized view will only be seen Q4.”

BitGold – Continued Growth on Gross Margin and Key Metrics

In $CAD   Q1 2016   Q2 2016   Q3 2016
Revenue 2,856,937 10,460,316 13,260,920
Cost sales (2,881,186) (10,323,261) (13,084,101)
Margin on sales (gain/(loss)) (24, 249) 137,055 176,819
Fee revenue - - 13,568
Gain/(loss) on revaluation of precious metals inventory 37,645 (163,225) 95,055
Gross profit 13,396 (26,170) 285,442
    Q1 2016   Q2 2016   Q3 2016   Q2 to Q3 change
Number of user sign-ups 62,629 323,034 580,814 257,780
Transaction volume $3,479,889 $16,691,726 $31,640,962 $14,949,236
Gold under administration (gold grams) 63,555 245,879 437,705 191,826

“BitGold continues to build and launch new products and scale operational support on a calculated and cost effective growth plan,” said Darrell MacMullin, CEO of the BitGold platform. “Through deep learning from our global customer base, we are expanding the utility for users with enhanced verification, improved user experiences, and expanded deposit and redemption options. In upcoming quarters, we will embed the platform’s robust global transfer capability into a suite of business payment applications for invoicing, ecommerce checkout, and payroll solutions, putting BitGold in a strong position to improve multiple segments of global ecommerce. We look to further expand with distributed API integrations into other platforms later this year, working with other technology platforms and financial partners in building this vision as a global network for gold”.

GoldMoney Continues to Show Strong Revenue Growth

In $CAD   Q2 2016   Q3 2016   YTD
Revenue 55,787,658 67,563,054 123,350,712
Cost of sales (55,137,331) (66,843,362) (121,980,693)
Margin on sales 650,327 719,692 1,370,019
Fee revenue 147,330 487,023 634,353
Gain/(loss) on precious metals inventory 277,560 (346,564) (69,004)
Gross profit 1,075,217 860,151 1,935,368
In $CAD   Q2 2016   Q3 2016
Gross profit 1,075,217 860,151
Adjustment for (gain)/loss on revaluation of precious metals inventory (277,560) 346,564
Operating margin excluding gain/loss on precious metals 797,657 1,206,715

GoldMoney produced an IFRS net loss of $288,188 on $67.56 million in revenue for the period ended December 31, 2015. These figures include $297,775 in non-recurring and one-time payments to settle outstanding legacy technology obligations that will normalize in the next quarter and a $346,565 of loss on precious metals inventory that has been offset by the gain on the investment portfolio at the group level. When adjusting for these legacy and transition expenses, GoldMoney was profitable and contributed net income to the group in its second quarter of consolidated operations.

“Over the past two quarters of BitGold’s operations, we have learned a lot about which marketing channels generate the highest rate of return, and have shifted our strategy towards more disciplined and effective customer acquisition channels.” said Katie Sokalsky, CFO of GoldMoney Inc. “We continue to focus on finding efficiencies in the business, and applying disciplined capital allocation to meet our goals of reduced expenditures and working towards generating return for our shareholders.”

“It is our belief that time and capital are the two critical elements for building trust with our customers and for growing transactions and assets per user,” said Josh Crumb, Chief Strategy Officer. “As we complete the core-feature build out of our platforms in the quarters head, our focus will turn to marketing and growth expenditures that enhance trust-feedback loops within the network. To advance trust and brand awareness, we will be increasing investments in offline and event marketing and starting a series of town hall customer engagement campaigns in the first half of 2016. To support these efforts, subsequent to Q3, we welcomed the opportunity to significantly strengthen our balance sheet, which also provided institutional validation of our achievements thus far.”

Non-IFRS Measures

This news release contains non-IFRS financial measures, the Company believes that these measures provide investors with useful supplemental information about the financial performance of its business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating its business. Although management believes these financial measures are important in evaluating the Company’s performance, they are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with IFRS. These non-IFRS financial measures do not have any standardized meaning and may not be comparable with similar measures used by other companies. For certain non-IFRS financial measures, there are no directly comparable amounts under IFRS. These non-IFRS financial measures should not be viewed as alternatives to measures of financial performance determined in accordance with IFRS. Moreover, presentation of certain of these measures is provided for year-over-year comparison purposes, and investors should be cautioned that the effect of the adjustments thereto provided herein have an actual effect on the Company’s operating results.

Adjusted Non-IFRS Profit and Non-IFRS Adjusted Loss are non-IFRS financial measures. These figures exclude from net profit and net loss the impact of the following amounts that are not operation or ongoing in nature to assist investors in understanding our business performance: (i) the impact of one-time non-recurring expenses associated with streamlining the GoldMoney business (ii) non-cash items. Refer to the MD&A for a detailed breakdown of these items.

Gross Margin is a non-IFRS financial measure. This figure excludes from gross profit the impact of fee revenue, but includes gain (loss) on revaluation of precious metals inventory, and is intended to reflect the Company’s revenue generated solely from sales of precious metals.

Group liquidity is a non-IFRS financial measure. This figure excludes from total assets (i) receivables, (ii) prepaids and other assets, (iii) property and equipment, (iv) intangibles, and (v) goodwill.

Other non-IFRS financial measures include all-in user acquisition cost, which is calculated as Non-FIRS Loss, divided by the number of user sign-ups in the period.

About GoldMoney Inc.

GoldMoney Inc. is a global, full-reserve and gold-based financial services group. GoldMoney Inc. provides financial services as a trusted, limited third-party, combining the unique attributes of gold with technology-driven innovation. Through GoldMoney® the company offers precious metals custody and wealth services, trading and execution, and independent research to individual investors and institutions. Through BitGold™ the company operates a self-directed savings platform and a payments network allowing individuals and businesses to make or receive online, in-store or mobile payments. As at December 31, 2015 GoldMoney Inc. has over 625,000 clients from over 150 countries and $1.6 billion in client assets under administration. GoldMoney is regulated by the Jersey Financial Services Commission (JFSC) as a Money Services Business. The JFSC is the main supervisory body that oversees and regulates Jersey's large financial services industry. For more information on BitGold, visit bitgold.com. For more information on GoldMoney, visit ir.goldmoney.com.

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy of this release.

Forward-Looking Statements

This news release contains certain “forward-looking information” within the meaning of applicable Canadian securities laws that are based on expectations, estimates and projections as at the date of this news release. Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information and are intended to identify forward-looking information. This forward-looking information is based on reasonable assumptions and estimates of management of the Company at the time it was made, and involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others: the Company’s limited operating history; future capital needs and uncertainty of additional financing; the competitive nature of the industry; unproven markets for the Company’s product offering; volatility of gold prices & public interest in gold investment; lack of regulation and customer protection; the need for the Company to manage its planned growth and expansion; the effects of product development and need for continued technology change; protection of proprietary rights; the effect of government regulation and compliance on the Company and the industry; network security risks; the ability of the Company to maintain properly working systems; foreign currency and gold trading risks; use and storage of personal information and compliance with privacy laws; use of the Company’s services for improper or illegal purposes; global economic and financial market conditions; uninsurable risks; and those risks set out in the Company’s public documents filed on www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company undertakes no obligation to revise or update any forward-looking information other than as required by law.

Contact:
GoldMoney Inc.
Josh Crumb, 647-499-6748
Chief Strategy Officer & Director

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 -- Published: Tuesday, 1 March 2016 | E-Mail  | Print  | Source: GoldSeek.com

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