GoldMoney Inc. Releases 2016 Third-Quarter Financial Results

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

“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

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.