Orion Digital - Q4 2025

Transcript

Operator (participant)

Good afternoon, ladies and gentlemen, and welcome to the Orion Digital Corp Q4 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, March twelfth, 2026. I would now like to turn the conference over to Craig Armitage, Investor Relations. Please go ahead.

Craig Armitage (Head of Investor Relations)

Thank you, and good afternoon, everyone. Just a few quick notes before we get started. Today's call will contain forward-looking statements that are based on current assumptions and subject to risks and uncertainties. These could cause actual results to differ materially from those projected. The company undertakes no obligation to update these statements except as required by law. Information about the risks and uncertainties are included in Orion Digital's Q4 and year-end filings, as well as periodic filings with regulators in Canada and the United States, which you can find on SEDAR+ on EDGAR, and you can also access via the Orion Digital Investor Relations website. Lastly, today's session will include several adjusted financial measures or non-IFRS measures. Please consider these as a supplement to and not as a substitute for the IFRS measures.

You will see that we've included reconciliations to those in the press release and in the investor deck. Last point I'd make is the investor deck is also available for downloading on the IR website. With that, I'll turn it over to David Feller. Please go ahead, Dave.

David Feller (Founder, Chairman, and CEO)

Thanks, Craig, and thank you for joining today. I'm also joined today by our President and CFO, Gregory Feller. Q4 was a solid quarter led by wealth, with AUM growing by 70% year-over-year and revenue up 32% to CAD 14.5 million. When combined with payments, that segment generated CAD 24.4 million, up 27% year-over-year. Equally important is the quality of the revenue mix. Subscription and services now represent 62% of total revenue, which reflects a shift towards recurring platform-driven economics. On the platform side, we now have 2.3 million members, growing 6% year-over-year, and our payment network processed CAD 12 billion in volume, up 4% year-over-year.

For the full year, we generated CAD 68.6 million in revenue, CAD 7.1 million in adjusted EBITDA, and ended the year with CAD 41 million in cash and investments. The key takeaway is simple. We have a growing wealth platform, a recurring revenue model that continues to strengthen, and a balance sheet that gives us the flexibility to invest in the next phase of the business. Our mission with Intelligent Investing is simple but ambitious. We are building what we believe can become the most trusted system for long-term compounding. In other words, capital allocation system designed specifically for individuals building wealth over long periods of time. For decades, most financial platforms have focused on providing access to markets, tools for trading or products for distribution. Our focus is different.

We believe the most important problem to solve is helping investors allocate capital intelligently and maintain the discipline required to compound wealth over decades. If you step back, the objective of investing is actually very simple. It's compounding, not activity, not trading, not reacting to the latest market narrative. The objective is to compound capital over long periods of time. Yet, when you look at the way most investing platforms are de-designed today, very few of them are actually built around that objective. We are currently seeing a broader shift happening across the entire software industry. Historically, software functioned primarily as a tool. Tools provided information and capabilities, but the user is still responsible for interpreting that information and making decisions. Artificial intelligence is changing that. Increasingly, we're seeing systems that process large amounts of information, guide decision-making, and ultimately produce better outcomes.

Across industries from logistics to cybersecurity to healthcare, the systems that are winning are the ones designed to generate outcomes, not simply provide tools. We believe that same shift will occur in investing. Capital allocation is one of the most important decision systems in the global economy. Every year, trillions of dollars are allocated through public markets. Those decisions determine long-term wealth creation, retirement security, and how capital flows across the economy. In an environment where technological change, particularly AI, is accelerating economic transformation, ownership of productive assets becomes even more important. That means the quality of capital allocation decisions becomes more important as well. One of the most important realities in investing is that behavior has enormous impact on outcomes. Long-term studies have consistently shown that investors significantly underperform the markets they invest in. The primary driver of that gap is behavioral.

Trading too frequently, reacting to short-term narratives, abandoning long-term strategies during periods of volatility. This chart illustrates how even relatively small differences in behavior compound very large differences in lifetime wealth. A disciplined investor earning roughly 10% annually turns 10,000 into over $1 million over 50 years. A reactive investor earning closer to 6% ends up with a fraction of that. The difference is not intelligence or access to information, it's behavior. This slide shows the architecture behind Intelligent Investing. At the top is the objective, maximum long-term compounding. That is a governing principle of the system. What makes us different from traditional investing platforms is that most of the industry has been optimized for activity, not outcomes. The incentives are built around engagement and transaction volume. We are building around a very different objective, helping investors make better decisions over time.

The middle layer is behavioral intelligence system. We believe one of the biggest causes of underperformance is emotional decision-making under pressure. The environment itself is designed to support calmer, more disciplined investing. The bottom layer is a learning loop. Over time, the platform can learn from each investor's behavior and improve the decision environment accordingly. When we talk about Intelligent Investing, we're not talking about a brokerage with a better branding. We're talking about a capital allocation system designed to get smarter over time in service of one goal, better long-term outcomes. If you look at the investing landscape today, investors actually have access to many different solutions. Trading platforms, robo-advisors, wealth managers, mutual funds, and ETFs. These solutions generally fall into two categories. The first category is tools. Platforms that provide access to markets and information, but leave the entire decision process to the investor.

The second category is managed systems, but many of these are optimized primarily for the economics of the provider, whether that's assets under management, product distribution, or trading activity. Very few systems are designed specifically to optimize for long-term investor outcomes. One of the most important principles in system design is that systems produce the outcomes they are designed to optimize. Trading platforms tend to optimize activity. Wealth managers tend to optimize assets under management. Financial media tends to optimize attention. Intelligent Investing is designed to optimize one thing, long-term compounding. That principle influences everything from the architecture of the platform to the behavioral design of the experience. The first thing you'll notice when you look at the product is the design. It's intentionally minimalist and calm. Most investing apps are designed around stimulation, flashing prices, charts, and constant activity. Our goal is the opposite.

The environment is designed to support disciplined thinking. Second is a system optimized for long-term compounding, not trading. Serious investors tend to follow structured processes. One of the most common is writing an investment memo. Documenting a thesis forces clarity and accountability around why capital is being allocated. Capturing that thinking inside the platform also allows the system to become a system of record for investment decisions. Traditional retail investing apps rarely capture this kind of process. Finally, serious investing requires serious research and analysis, and that's why we partnered with Finchat AI and include full access to their professional-grade research platform, a subscription that on its own costs over $90 a month. Taken together, the environment, the decision processes, and the research tools are all designed around one principle, disciplined capital allocation and long-term compounding.

I think this side-by-side comparison helps you understand how different our platform is from a typical trading app. Trading apps, again, are generally designed to stimulate activity. Bright colors, constant price movement, promotions, and current need to trade. Every decision pushes the investor towards short-term reactions. Fear when markets fall, excitement when prices rise. That environment produces a predictable outcome, activity. Activity is not the same as performance. Now look at the environment we built. Minimalist, quiet, deliberate. The system is designed to support disciplined thinking. The result is a fundamentally different operating environment, not a trading app. A capital allocation system designed for long-term compounding. With that, I will turn the call over to Greg.

Gregory Feller (President and CFO)

Thanks, Dave. Let me now spend a few minutes talking about our payments infrastructure platform, Carta Worldwide. From a financial systems perspective, Carta operates within the authorization layer of payment networks, the set of systems responsible for receiving authorization requests from card networks and applying program rules and balance checks. In other words, Carta sits at a critical point in the payment stack where transactions are actually authorized and governed. Carta supports a wide range of clients, including fintech platforms, enterprise programs, and public sector programs, providing the infrastructure that connects the programs to global payment network. In terms of scale, we have up to 7 million end users and CAD 11 billion in transaction volume. Platform revenue mix has steadily transitioned towards a platform revenue model, with increasing contributions from wealth and payments.

Importantly, our results exceeded the operating range we communicated to the market at the beginning of the year, driven by stronger than expected growth in both wealth and payments. For the fourth quarter, total revenue was CAD 17.4 million compared to CAD 18 million in Q4 of 2024, and total revenue for the year was CAD 68.6 million compared to CAD 71.2 million in 2024. The decrease was driven by the exiting of two unprofitable businesses in Q1, as well as the impact of rate changes in Canada in 2025. Adjusting for these exits, revenue actually increased 7% in the fourth quarter to 4% for the full year. Turning to wealth, our wealth platform showed continued growth benefiting by Phase One rollout of our Intelligent Investing platform, growing 36% year-over-year to CAD 14.5 million.

Assets under management increased to CAD 498 million, up from CAD 428 million in 2024 and CAD 288 million in 2022. As financial markets become increasingly automated and AI-assisted, we believe platforms that help investors maintain discipline in capital allocation will become increasingly valuable. The next phase of the platform will be driven by the rollout of Intelligent Investing Phase Two, which we expect in the first half of this year. On the payment infrastructure side, Carta, we processed CAD 11.9 billion in total for the year. Excluding the exit of Canada, it was CAD 11.1 billion, which was up 14% year-over-year. Adjusted payments revenue increased 23% for the year and 12% for the quarter. Overall, these results demonstrate the continued scaling of Carta and both in transaction activity and revenue.

On the platform economic side, adjusted subscription services revenue increased 12% to CAD 41.5 million, up from CAD 37 million in 2024, representing now 62% of total revenue. For the full year, gross margin was 70%. Adjusted EBITDA totaled CAD 7.1 million, an increase of 7% year-over-year and above our increased guidance range that we gave last quarter. The results reflect improving operating leverage as recurring revenue becomes a larger share of the business. In addition to strong platform growth, we also significantly strengthened our balance sheet during the year, including more than doubling our cash position as a result of portfolio monetizations along with capital discipline in the business.

At year-end, we held approximately CAD 20 million of cash and CAD 21 million of marketable securities and other investments for total cash and investments of CAD 41.2 million. This liquidity was increased further post year-end following the monetization of our remaining WonderFi position in early 2026. Our consumer lending portfolio increased slightly, but we continue to manage this not as a growth engine, but as a stable cash-generating component of the business, supporting our broader capital allocation framework. For point of reference, our total loan book has only increased about CAD 7 million cumulatively over the last three years. Our capital priorities remain consistent, reinvestment in the wealth platform, continued development of our payments infrastructure, share repurchases when appropriate, and maintaining our balance sheet flexibility. We continue to have significant room on our share repurchase program of CAD 10 million.

Looking ahead to 2026, we expect to continue growth in subscription services revenue as wealth expands and our payments infrastructure continues to scale. Key drivers include the rollout of Intelligent Investing Phase Two in the first half of the year and expansion of existing European programs in the Carta platform. Consolidated revenue is expected to remain relatively stable in 2026, reflecting the continued disciplined management of our consumer lending portfolio, which we are managing for cash flow, not growth, as well as the impact of the rate cap in Canada. Based on these trends, we expect adjusted EBITDA in the range of CAD 7 million-CAD 8 million for the fiscal year 2026. In summary, 2025 represented another step forward in Orion's transition towards a platform-driven business model. Our wealth platform continues to grow assets and revenue.

Our payments infrastructure provides additional strategic capability, and our lending portfolio provides stable cash flow and balance sheet support. We believe this combination positions Orion well as financial systems become increasingly digital and automated. We'll now open up the line for questions.

Operator (participant)

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from Scott Buck with H.C. Wainwright. Your line is now open.

Scott Buck (Managing Director and Senior Technology Analyst)

Hi, Greg. Quick question.

Gregory Feller (President and CFO)

Hey.

Scott Buck (Managing Director and Senior Technology Analyst)

Kind of follow up there on your commentary on the lending platform.

Gregory Feller (President and CFO)

Yep.

Scott Buck (Managing Director and Senior Technology Analyst)

The language in the outlook seems to suggest a significant pullback in lending this year. What are you seeing from the consumer? Longer term, you know, how important is lending to the overall business?

Gregory Feller (President and CFO)

First of all, I wouldn't characterize our guidance as a significant pullback. I would characterize it as probably similar trend to what we saw in 2025. Our focus again on the loan book is to manage it for cash flow primarily, not as a growth platform. You know, we do have the impact of the rate cap, which was implemented in 2025, which is going to, you know, put pressure on interest revenue for the existing loan book. Our goal there, I would say, is to keep the loan book relatively flat.

Because of the rate cap impact that would result in a decline of interest revenue, I think by as we get to year-end, you know, we think that really stabilizes from a revenue perspective. You know, look, I think we've always been cautious on the lending side, just given, you know, our focus really on our wealth and our payments business. That's really where we wanna allocate excess capital. I think we continue to take, as we have over the last couple of years, a cautious approach on the overall macro market.

Quite frankly, the best way to do that is keep a flat book, and not drive, you know, meaningful growth in it.

Scott Buck (Managing Director and Senior Technology Analyst)

Yeah. No, that makes sense. Long term, you think lending, you know, remains an important kind of component of the overall platform?

Gregory Feller (President and CFO)

We think it's an important cash flow-generating component of the business today. Long term, as it becomes a smaller percent of revenue, you know, that strategic position could change. I would just say that in general, we believe a consumer-facing financial platform having access to credit is important to customers. It's a core competency that we have. We've been doing it for 20 years in the Canadian market. We think it's an asset and a valuable one that we have. We're just gonna continue to be conservative as it relates to the loan book.

Rather than focusing on putting capital into the loan book, we think we're gonna get a higher ROI by putting capital into wealth, primarily.

Scott Buck (Managing Director and Senior Technology Analyst)

Yeah.

Gregory Feller (President and CFO)

Payment secondarily.

Scott Buck (Managing Director and Senior Technology Analyst)

Okay, perfect. I appreciate that. David, I'm curious, could you give us a little bit of color on what phase two, what that rollout looks like? Maybe what timing could be and maybe what, you know, customers are getting access or members are getting access to through phase two.

David Feller (Founder, Chairman, and CEO)

Yeah. Sure. Yeah, phase one. Remember, we essentially had two different brands, two different apps. Moka was our managed investing offering, and that was through a separate application. Then we launched MogoTrade, which was our self-directed investing app. Our goal was to unify these into one brand and one new platform called Intelligent Investing. Phase one was effectively launching the new managed experience under Intelligent Investing. Now Moka is no longer. All of those users are now on the new Intelligent Investing managed solution and platform and brand. Phase two is gonna be essentially bringing in the new self-directed piece to that. Now we have one unified app, all under Intelligent Investing, all in this new user interface.

That'll then eventually mean the, you know, the sunsetting of the MogoTrade app and brand. That's Phase Two, and that's actually starting this month. We expect kinda in the next kinda 30-60 days, we expect that there'll be no more MogoTrade and all new users will be coming on the new Intelligent Investing unified platform. Does that make sense?

Scott Buck (Managing Director and Senior Technology Analyst)

Okay. Yeah, perfect. That, that's great. I wanted to ask, given how well-capitalized the business is at this point, how are you prioritizing your repurchase program versus some additional investments in, you know, some of your more growthier verticals?

Gregory Feller (President and CFO)

Yeah. Really the order of priorities from a capital allocation perspective would be number 1one, wealth, number 2, payments, and then number 3, share repurchases. That's the order.

Scott Buck (Managing Director and Senior Technology Analyst)

Okay, perfect. Would you guys look at potential M&A on the wealth side? I know you guys have done deals in the past, but curious whether that's something that you would consider.

Gregory Feller (President and CFO)

You know, I'll let Dave comment on it too, but look, we're always open to opportunities that make sense. I think, to be honest, at this stage, we think, you know, what we're doing is pretty unique. And we believe a core part of success here, and especially rolling out a new product is focus. I think at this stage right now, we think staying focused on the rollout of Intelligent Investing is the right priority. It doesn't mean if there's something that made sense to be part of Orion that we wouldn't take a look at it.

David Feller (Founder, Chairman, and CEO)

Related to that, I would say on the wealth side, you know, things relating to enhancing and speeding up the rate of our new platform, you know, so those types of opportunities, versus an existing wealth platform and/or product customer base where you've got to do the whole kinda legacy transitioning everybody over. Obviously

Scott Buck (Managing Director and Senior Technology Analyst)

Right.

David Feller (Founder, Chairman, and CEO)

You know, our phase one and phase two, I mean, this is still what we consider kind of our MVP of Intelligent Investing. As we talked about kind of that long-term capital allocation system, a lot of that, obviously, I mean, the entire roadmap is primarily focused on, you know, technology enhancements, AI, et cetera. You know, if there was a specific opportunity, it would really be around advancing the speed of which we brought more of that kinda capability into the experience and would kinda speed that up and give us some unique opportunity there versus, you know, other kinda customer bases, if that makes sense.

Scott Buck (Managing Director and Senior Technology Analyst)

Yep. Yeah, no, that makes a ton of sense. Well, that's all I have, guys. I appreciate the time and congrats on the quarter and the year.

David Feller (Founder, Chairman, and CEO)

Thank you.

Gregory Feller (President and CFO)

Thanks, Scott.

Operator (participant)

Ladies and gentlemen, as a reminder, should you have a question, please press star one. There are no further questions at this time. I will now turn the call over to David for closing remarks.

David Feller (Founder, Chairman, and CEO)

Okay. Thanks again for joining us on our Q4 call. We look forward to giving you an update post Q1. Thanks again.

Operator (participant)

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.