Earnings call transcript Q4 2022

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Operator

Good afternoon, ladies and gentlemen, and welcome to the RYVYL fourth-quarter and full year 2022 earnings conference call. [Operator Instructions] The earnings press release accompanying this conference call was issued at the close of the market today. The annual report, which includes the company's results of operations for the 12 months ended December 31, 2022, was filed with the SEC today.

On our call today are RYVYL Chairman, Ben Errez; Interim Chief Financial Officer, Mary Lay Hoitt; and Chief Operating Officer, Min Wei.

I'd like to remind everyone that statements made on today's call and webcast, including those regarding future financial results and industry prospects, are forward-looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. company's for the associated list to risks. refer regulatory a filings of Please this will under and the replay call The of webcast days the section. next on be company's Events website the XX for available

this Errez, company's is Ben yours. I'd over The you, the to the Chairman. turn At call time, to Ben. Thank floor like

Ben Errez

more and we the Thank joining see and produce fourth-quarter conference utilizing future in our you and reporting results effort process an is cost-effective, use In ongoing so do. portions hope edit the of full this tools call. efficient it the as make AI calls. to We call. If it for successful, you are increase these doing to year we will value simplify and in XXXX of we financial

crypto exchanges, long-term achieving toward RYVYL in the market. more meaningful recently digital a force and its make to volatility, disruptive bank payments continues Against failures, strides objective becoming of failing

topline just Our leading processing fiscal year of growth a a $X.X of million volume processing revenue short new record of total and XXXX billion, volume. to on XXXX XX% record growth was also $XX highlighted by company continued from of

we will ago. solutions, brief segment Min inflation. to our compliant prove continues technology as RYVYL to Gen the launched breakdown in elevated recently two short remarkable, of of especially persistently slowdown adoption innovative from a a just payment truly growth global during is years As our results. period growing of attest reminder, Achieving a in only growth remaining such X relatively while light in the

following Transact a our merchant of business growth RYVYL's drove the The Europe. levers that are XXXX acquisition acquiring and of expansion completion geographic in

continue the future for drive to we rigorously sustainable processing two to expect that our shareholders. continue for we to focus years to to areas our these come. additional expect drivers on way Meanwhile, for growth pave business for long-term growth We value

as we recent the officially on We coyni, launched stablecoin in regulation our and with undoubtedly Even that pegged presents as equivalency of increased recent believe in hedged be branded failures, likely disruptions fiat solution. crypto in which of compliance being the to both will more first XXXX. potential fiat bank technology way. and coverage coyni to along properly Coyni to even Coyni's The currency, be a October which the better as is is or reporting. fiat of is the beneficiary ideal markets, it it and an stablecoin adjusted by commodity. eventually has than

use ignite a To will multifaceted growth trajectory, coyni's approach. we

growing global the processing to we'll of volume our existing adoption First, coyni. increase leverage

a believe growth. we best Second, spin-off creation a part I of of has discussed will previously long its has separate publicly and benefits that entity This strategy. been and as our growth coyni traded value several position

sector of year, turmoil initiative recent conditions for market hindered opportunity reopened this doors the While us. last have

and off technology, have and the publicly We branding, weeks. identified the in to expect revenue coyni's acquire vehicle coming traded to a spin company into

identified also transaction. for have team proposed the We banking the investment

with Upon possible process a spin-off, to special of the plan the are We shareholders evaluating for in we support. with reward partners. of longstanding dividend their mergers completion

a successful potential including variety modernize a create capabilities This and of demonstration payments, ecosystem of islands, of the businesses, now has us this toward progress solutions closed helped electronic generate to quarters interest is the the payment American pleased growth we our after adoption we is our our important and the from for with Samoa. process experienced I island's customers, In just infrastructure. loop It Another Bank a driver through QX, continued Territorial report to am of of world. other three governments payments deployment. relationship partnership. majority around

the continue with We opportunities bank. to collaboration explore

up We was signing an failures, solution by Bank-as-a-Service we very bank the RYVYL traction firms recently is this see financial In major our to transaction with the and of our time. were are seeing superior due iceberg just our growth important our institutions million with in of tip continued role play estimated aftermath chosen to innovative adding the pleased six solution and for infrastructure this over solution. volume these $XXX Bank-as robust, Bank-as-a-Service compliant, a believe an monthly segment report expect We global as and to evolution. in in -a-Service

The and payments growing international, our unlock its solution. for our significantly with well-positioned market market expand to presence are deliver and and plans wins pipeline, with potential, and acquiring experiencing domestic Samoa share capture a Banking-as-a-Service in This recent coyni off company we strong coupled business, is to strong shareholders. our to breakthrough spin digital of in the results

to like Mary details Interim Lay the I'd walk the us Hoitt, financial Officer, results Financial our to our introduce and of that, With our of Chief restatement. impacts through

Mary Lay Hoitt

be Thank to of excited you for the I'm introduction, part Ben. the team.

we the revenue, available XXXX, Before our ended XXXX, into and our amended and are XX-K, XX, XXXX, for related shareholders' I restated in consolidated financial year filing. September accompanying net filings, form A XX-K September QX loss, and results, unaudited, XX, statements our financial audited, Presented XX, XXXX full the and quarters and ended in dive XXXX, June and March XXXX. December disclosed tables following XX, for with June the XX, adjustments along description disclosures The XX, consolidated XXXX. our adjustments equity. total the XX, statements of disclosures March XXXX, impacted this as and assets, in financial related

transactions properly recorded the of the commissions transactions recognition reflect portfolio. adjustments The under reverse Financial certain company processed to adjustments stock. related repurchase company's company the the Sky recorded of to to as certain The has

increase appropriate presented to properly of adjustments merchant all the balances gateway its the had due The of reduce operations end liabilities of and periods being receivable of each recorded receivables off of banks, each in determined fee percentage adjustments certain as for restated. for recorded adjustments restated the made the to liability fees gateway to it The of has not one net statement and incurred to periods bank. company its company from additional accrued the banks. reflect gateway respective period being The to each from that the record company charge to due the

adjustments company interest debt quarters loss account of certain for to balance, and properly adjustments in The the each this debt XXXX, three extinguishment of of the made on to expense, accretion. convertible including accumulated debt,

merchants the record to its make certain to debt In recorded fee record addition, assessed related of to company income sheet to adjustments reclassifications the of fines and balance and extinguishment loss penalties. the for on

to fourth-quarter company's financial XXXX Turning year full the and results.

measures. and As a note, EBITDA adjusted to be non-GAAP I'll other referring

our the company's website calculation other be SEC will on XX-K For and measures, adjusted Filing. non-GAAP available which EBITDA refer the filing, under of please to

Fourth ledger-based as was of and to quarter from increase year $X.X our $X.X due $XX.X net efforts; American marketing strategy. our as network; our FX strategic combined million million the volume EU The and expansion increase capabilities and acquired revenue and results. processing our and by the in and Fourth-quarter due product business the base including: an the an in to customer of prior. acquisition a primarily service increased sales to expanded growth merchant payment a number our or of factors, in XX% expansion ISO solutions Samoa; result our of million, expanding growth business partnership blockchain growth with in into market; using advanced offering, the banking

quarter of December was $XX.X acquisition related million three of increase million months The year. the the same XX, million expense to including XXXX, by $X.X for increased impairment expenses and due to the an in the from $XX.X $XX.X in million ended an prior depreciation primarily Financial portfolio. of to Operating increase charge Sky amortization

of acquired list. With to the the the $XX.X company the off million intangible gaining uncertainty the ISO the and assets acquired accounts of of value charge, impairment has due book merchant to written access

per a quarter $XX.X of $XX.X the $XXX XXXX loss per ago. note to increase related the senior $X.XX The and and in other a net quarter net primarily an year November fourth in loss expenses depreciation amortization, The to a due in the in XXXX. or million of share, million, million diluted loss in basic issued and of was net interest and share, company or increase diluted convertible compared same to basic $X.XX recorded

American the XXXX. in $XX.X million of volume XXXX For an increase in of from number result using sales million partnership and primarily in base in due marketing our volume to advanced of expansion merchant increased EU as an XXXX to or our in expansion our combined product full payment and XXXX. XX%, business billion $X.XX processing in as our was growth processing was XXXX ISO FX $X.X the and a capabilities from growth with service strategic and to acquisition $X.X billion including: ledger-based strategy. offering, a banking net increase market; revenue blockchain the and in into by network; results, solutions This the The million our increase due to efforts; factors, customer our growth expanding the business $XX.X in of acquired and expanded Samoa;

Net North were in $X.X segment our America $XX.X revenue million to of which while This international North was revenue million. revenue was million in $XX.X America all XXXX. compares

in in and X or million increased conserve primarily increase by RYVYL The related to the there our by to: million $XX.X due taxes to develop increase of year; led XXXX, website. stock increase marketing headcount a new and development intangible to XXXX. million services expenses million master increase fees stock in $XX.X in -- offset systems $XX.X expenses; decrease for and $X.X in to reward to our the of key expenses was for and rendered administration in though the $X.X on in Operating by increased by portfolio; offset new compensation cash; successful expenditure goodwill million, $XX.X by general version stock-based brand development million a pilot charges corporate X payroll million partially expenses and Financial and $X.X professional primarily decrease by million, Sky version XX%, was and XXXX in go-live due excuse research to platform coyni the second to due to grant a in decreases to $X.X half from services from increase that by impairment of compensation establish payroll and employees expense; vendors me,

amortization in Now, unusual average There was $XX.X in including million XXXX. of million $XXX settlement XXXX. the of primarily a $X.X We recorded due company of the of were conversion incurred expense interest $XX.X increase expense amortization related a we $X.X note discount in Non-cash from convertible items XXXX, debt million on derecognition November non-operating turning recorded category, gain in to The to liability discount. non-operating several the debt related issuance the of XXXX. debt expenses. outstanding a to in expenses merchant to in of in And from convertible interest XXXX. million the million of loss expense on debt

loss a compared primarily to XXXX. due million of operations The with XXXX is in from operating operations loss expenses. We $XX.X in year of ended to $XX.X fiscal increase increased a net loss million from

for net expense of basic impairment and related share, to of an primarily The company increase note. twelve to compared million period The the as December million the other ended expenses to per prior months well to depreciation the $XXX for in increase a or or million loss the of share, twelve $XX.X goodwill was as $X.XX and due months amortization loss XX, in loss charge, interest net year. and $X.XX diluted related XXXX, per sustained the and net same basic $XX.X a diluted in a

of December equivalents as the restricted $XX.X XX, cash, with and cash ended year cash We million XXXX. of

the over provide I and Min Operating turn operations a Officer, will to our outlook. now of to business our review call Chief Wei,

Min Wei

Thank you, Mary.

As turning revenue before and to of I material calls, our over in will the walkthrough a conference I've prior outlook. contributors done XXXX provide

reporting to coyni. and the due the payments the nearly of plus all XX% hit volume billion, ramp-up projection primarily lower XX% is business, exchange, foreign our approximately is in volume the from QX portfolio, $X.X revenue than volume This channels $X.X Sky volume. and processing is of $XXX our XXXX, lower million, processing us of across Financial than volume the about which timing international QX suspending our During billion. about and

over we XX% of processing Sky XXXX, a improvement. ended year, volume improved While at increase. $XXX or Should looking the we $X.X to outside compared to from million the months XXX% portfolio, our look at a year are XX billion volume Financial the

less million, to QX the QX's Financial $XX Sky $XXX the pause Our reporting million the acquiring is million, point. business related volume $XXX is due in which than

full the ChargeSavvy $XXX higher $XX XX% approximately than year for growth in over processing QX planned, is X%. million is about QX and million. process, XXXX QX, The

to attributable budget QX, This volume For million volume is payments in total XX% $X exchange our international Transact of business than conversion $XXX is higher in estimate. business reported million including foreign payment our Europe, and original transactions. FX line, billion $XXX of which year international we over and

with Samoa, to to to share overall merchants, gain For on over businesses we our $XX market. enablement services QX, island. volume first been and pleased the the customers for QX our have proud million. electronic We're are rolled a out of update monthly very that about exceeds total for American traction the time, volume $XX an continue and payment at half In of merchant XXX target the on our million representing over

respect to pivot of in a it our this our business, banking early ACH as adjust XXXX. With to the decided approach to part offering we'll we service and as strategic offering

in momentum We announced gaining our experience have recently. space this great in

and of a coyni, experience, launch shifts in further banking merchant supports releases other markets. our to the plan It to our of October the support the the States. environment improve with since digital space EU in the business reason couple To made XXXX, on platform coyni customer to circle XX, monetize platform have and we enhancement to asset back international

to Now, $X XXXX. With business and like from $XX billion to expansion Revenue I and targeted to are volume, the for our targeting for achieve at planned outlook is to year. the existing respect million our would processing we plus. turn

market in For in processing expanded our forma direct year Overall, scheduled significant for businesses our our growth to global we pro improve our and million. the sales through various our for platform expect a partnerships ramp-up is target further values XXXX. spin-off positive through adjusted the $X pivot continue ISO force, shareholder momentum plan strong EBITDA, and for coyni our

With this, begin to call to the over I back turn would like our Ben Q&A. Errez, now Chairman, to our

Ben Errez

to call, interest listening Thank all you, commitment for RYVYL. to folks you your Min. the this thank To and

support. We your are for genuinely grateful ongoing

And comments and and of that I welcome it me, comment, edited sounded would my produced although call a me was would mention effort. that AI. portion I highlight your As personal And it again wasn't like talking. this using about

With like so that, session. Operator, begin. you much. to our begin Thank Q&A I'd please

Operator

Thank you, Ben.

session. Instructions] We [Operator question-and-answer H.C. Kevin will now be Dede, a conducting Wainwright.

Kevin Dede

Welcome, All right, Hi. good Hi, Ben. afternoon. Mary.

Mary Lay Hoitt

Thank you.

Kevin Dede

see of to your I Maybe, where opportunity don't Because wow, you So, just glossed know coyni of could you in on software our the over AI Ben, refresh memory start. really the that. sort kind spin.

Ben Errez

Well, hopefully, the me improve of can version real-life it somewhat.

There negative great testing opportunity we the and in for for are the so. on both side advantages definitely yes, on a spin-off positive coyni. side So, see testing the doing

the derivative from remove of expression cryptocurrency to wanted main the we First, the business.

stablecoin So we to this the greater is into the that of an the opportunity in the take and entities blockchain believe we a Also, the two separate of be sum the And than in will technology, in combination that far and opportunity, general. parts. entity. think

We identified To several the opportunity. have launch vehicle coyni identified into partners merging have have that for -- acquired this we and effect,

to We come. will separately discuss that days in

joint release We have identified will And very shortly. the do investment a we on banking team. that

coyni the a generous we're big launch shareholder creating a existing on for commercial direction strategic of the for for the All company is will of but And value. a for RYVYL. itself, very advantage opportunity that thinking for establish a only launch not dividend these opportunity shareholders also

though We and the can do it. right the majority that because were plan able acquire ownership we staying to company, XX% on even vehicle of of identify we spin-off launch the the above

come. to will in of XX% of north fact, And we days I that separately discuss helps. that it. again, In hope

Kevin Dede

a helps it lot, Yeah, Ben.

was of I customer of looking the for interpretation think feedback. I one details was your

or with one not the affiliation to to in with is customers some coyni whether a your and such close see questions think working separation. they lingering wanted me I of just whether not perceive for difficulty RYVYL or

Ben Errez

question astute and it. very you for so thank Yeah,

actually that both it is true. border. on manifested the of sides see So We

prefer international with available our this of other and clients, made especially of of properties because and speed, the settlement, working instant and Some availability directly coyni due clients, funds, technology. the to were that

from see On will partners. we see We saw banks the And we effect, it we reputational we other in the certain company directly think the it, this to these that worried separation. of and border. both from sides strategic side risks. see And really other derivative on that direction best about be for other that of partners positive the and strategic auditors

Kevin Dede

the how is little more. I'd Ben? that a understand particular That going think aligned the we RYVYL and and Can to package to back to I offers. as peel bit even better onion you're a on market in other that helps that effort service, what sort services like services marketing banking with of is you're going how and what promote

Ben Errez

conversation, Okay. that, me co-founder. ahead. mother and To Fredi, Nisan, the let CEO brother another my invite from to go Fredi

Fredi Nisan

service they great of question. the is a today That's has and in different looking especially looking see different with to a for coyni We as infrastructure today services landscape have for changing technology Thank compliant of Banking And become market and challenges market, a that something need of that and in -- financial different a much. in solutions. be they blockchain banks providers, the different utilize the a and today. Europe. and you need different huge very product lot that

services something we are from going and and mentioned coyni. to the providers especially including and and to account because that capabilities utilizing grow card solution offer way can technology. a business down on IBAN, their to they that issues our like are that regulation off-ramp a that in believe from be have lot We business design last as in huge PR. for FX those results. we issuing, and and shutting We rely of different that package the And we different compliance can our for our demand bank cryptocurrency And issuing Europe, on-

a opportunities to related credit to I course, the card would And add will their about of that one more in to and structures coyni for service. the that's in and different as side about like banking business. the on-ramp excited that capability. well process acquiring offering the is of the ability And leverage coyni really as we thing payment So business

we as yes, our well. So it are and partners excited about

Kevin Dede

Last guess room. volume speak this a indication. is maybe question us It processing for before target sort could give the the missed me I was that your and to you elephant seems that I floor over. an I hoping little bit. the of turn in

touch in I'm beginning quarter already. think it that was on far seasonal I see volume if given in what the December through there happened and you how you seeing so the 'XX, April halfway we're processing weakness. you're could now. little of wondering December and Maybe

Ben Errez

the that, Wei, Chief Operating. for Okay, I Min, will direct Min to conversation ahead. our go

Min Wei

Hey, Kevin.

So earnings as Sky the in stopped Sky huge reporting have Financials portfolio. Financials for a we starting we volume are the QX, Outside processed from of really doing portfolio, we the momentum. gained the

we for to $XXX processing $X.X portfolio, from at if Financial we XXXX went look billion Sky annual the from XXXX. volume at looking million to So without

grown And to at for acquiring merchant $X to would about addition look improved That recently acquiring, at also about, that by North continues. $X looking XX% in in we a of million momentum European already that, have grown we from in million volume have are base, I we digit already. most America When the And more XX%, market. really by we say has to XXXX. double month our QX the than

the strong. stop is is very back So, But portfolio. QX other because really, than Sky Financial the that, impact volume organic we growth decided our from reporting going to to

Kevin Dede

speakers] [multiple Ben. Okay,

Ben Errez

[multiple speakers] words. of a couple

interrupting. for Sorry

this We efficiency, a theme do happening the technology. have common is improving effort that improving see company what bottom concentrated in line, the as the processing workforce, improving our our past with over improving you for month. So

that is operating what overall to decreasing, where interesting today's work actually very, the volume This are is concert. things in is and notice. the these increasing of margins see One call, important All while performance very you is higher. manifestation for in reported

we continue to We're wanted not all everybody to that is of means. make done And and any sure that. fronts. by this the improve on table these will notices I But on

Kevin Dede

Ben. Yes, thanks,

I year, up to understand now. Min already. apologize for happened Sorry, going quick like omitting mentioned there? Sky to That's that. just I'd to XX% just What year Financial understanding not I'm why over for XX% assume. a then And we're follow-up. portfolio

Ben Errez

is that we that provide This a fair very no Yeah, problem, question. It's Kevin. important clarity.

IPs. acquisition of Financial part expect company merchandise in the announced As Sky to XXXX, and customer we receive the to business access

XXXX, yet seller's As to not of which [received] have items, of December obligation part those end the is to we of us. access

auditors, that. the in to For recognize with [prudent] associated volume accounting have US concert with and not in GAAP. technical accordance we revenue with consideration, That's decided

Kevin Dede

where that are expect those to you going forward the more auditors when some change do stand? with Okay, at point assets comfortable

Ben Errez

in that, new position at it available. not, we're So as that report on this a new becomes information to but on targets we'll put point,

stated, we think just can Min it's to until us as we prudent that However, it. disregard of prove contribution

Kevin Dede

is for Ben, then target the $XX million the Okay, $X this year so and billion ? --

Ben Errez

yes. Without,

Kevin Dede

does volume, transaction include the Okay, not revenue? includes Sky Financial but the

Ben Errez

any any not did or Sky we reported a as the that number separate I It should revenue -- include not coyni. scheduled entity. any we that also will Financials. performance And does be volume, No, performance separately this from number, include say for

Kevin Dede

over. Very happily the good. questions floor Thank on. turn Apologies the you, gentlemen. drawing for I'll

Ben Errez

appreciate Kevin, Thanks, it.

Operator

like to the Errez any submitted now to you, call. today's I'd over call Thank prior to questions Ben. Ben back to answer turn

Ben Errez

Thank you.

Kevin addressed these a already. of So issues actually lot

into not Has Samoa other think So opportunities was American the before actually countries submitted opened question the I this islands? growth call: and is this, and in answered was one that

in see from we I countries, other just for would is best South and Min do and our think ledger probably I infrastructure. South answer the say position that. on America collaboration to Pacific, technology approach that

in may Min? but that opportunity, light We on separate a this. of will on further to report some have shed Min

Min Wei

for to you, Ben. there. certain that interest services convert us payment the great local programs, us Samoa already We utilize potential coyni we the American institutional to as great services transformation to platform Island, allow organization programs. service provides have banking coyni for for only digital a and thank Yeah, because see the not We treated foundation Yes, in governmental on absolutely.

all of well implemented the States we'll of as similar be materialize, those islands. once other that as in able monetization we the services definitely that applied, mainland foresee strategy. countries in United plan, expect to and We can be determine With the the

Ben Errez

you in we you. all to submitting I with Okay, Operators, thank for back this thoughtful questions and RYVYL. are that, interest

Operator

Thank you for joining us today.

You your day. of lines. may the Have rest now great a disconnect

Ben Errez

Thank you all.

Ryvyl (RVYL) 17 Apr 232022 Q4 Earnings call transcript