RVYL - Earnings call 1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, ladies and gentlemen, and welcome to the Ryvyl First Quarter Earnings Conference Call. [Operator Instructions] The earnings press release accompanying this conference call was issued at the close of the market today. The quarterly report, which includes the company's results and operations for the 3 months ended March 31, 2023, 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.

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

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

Ben Errez

technology. you AI today. in Thank is Further using call, previous success exciting this call of produced us joining our and entirely to for edited the this using

not has of digital and performance nearly financial payments. yet general a common Our never challenges, coupled XXXX its quarter year-over-year. sector, delivered banking growth were first uncertainties as the And of we expectations company's the quarter for for regulation themes, with our was million, Ryvyl's without in macroeconomic concerns XXX% $XX.X line increased history better surrounding revenue of been top most fiscal

And on conference we're improving workforce As our during recent our fourth consequently, seeing technology, all bottom increase. our improving and our margins work our we I concert. have things concentrated quarter efforts in processing efficiency, stated the operating improving line, call, improving these of

growth, QX which restatement much financials, the energy line of our the our were successfully expenses of completing quarter top completed. we proud to While for of and related time, our

corporate a during proved causing be quarter. in processed channel million Removing non-income-producing a and in our in efficiencies. down break high various the Min While volume processing material increase margins $XXX performance few we with operating level an volumes to minutes, will

review major are some of strategic to our that underway. initiatives Now

of to of is part this our we announced first which stable creation broad initiation end value the plans the QX, technology. of strategy. Subsequent a spin-off to our The process coyni, of coin as

processing business. have for through path we public We premier forward a necessary as stable coyni in identified have the our made the it coin value create great that establishing of spin-off towards now in believe a with as the We payment step company the that our market best as shareholders strides to objective.

public connection Capital as Kingswood growth. we transfer spin-off we will Ultimately, we engaged and our unlock the coyni the significant in We'll Furthermore, We shareholder we as provide to public standalone assets transaction. of about. with a to front in million are facilitate a uplist. Strategic to as agent, with more acquisitions range offering, related trajectory this in company coyni placement expect to be end, they and value. coyni's in adviser NASDAQ role come an shell Partners to evaluating expect growth the multiple the And -- play on partnerships opportunities. which $XX acquired also updates also the entity, of that a to order

to plan continue issue dividend spin-off. shareholders the completion from to upon we of the its spin-off Board-approved and Ryvyl a benefit as will special

our Turning to now Banking-as-a-Service.

up. projected in We transaction demand $XXX growing After financial fully this with service. early signing continue gain than the that X institutions per month in to million on initiative for XXXX are global process momentum when to ramped more

as consumer Ryvyl's flexibility. virtual businesses markets allowing Banking-as-a-Service recently global payment collaboration, also leveraging strategic physical the provider. be a to co-branded as cards the untapped prepaid or debit Intercash, Through now customers can partnership Europe-based infrastructure, with new and enhanced cards a solutions We can platform announced white business offer label issued

program than XX XX,XXX and X the plans phase business by local real-time Ryvyl's Ryvyl card first of more initiated methods cards of integrations with card on payouts exchange in in moving capabilities already and currencies to over payment issuance. the has process continue different by per foreign million Banking-as-a-Service phases currently to deposit. with has the on more migration which days the Intercash, day based as issued offers settlements. approved and enables transactions or such This solution way API than direct XX service hours cards authorizes

addition, In compliance transactions fraud, the readily maintaining to for reduce while strict the service allows trace ability requirements. and all

XXX the new local We year, be an Banking-as-a-Service space future customers in to that Global rapidly provider day. have every of local global settlements. enabling covering platform a we the expect of believe emerging currencies is and excited By service end the full payments a is to and Banking, reaching we're over and

While of our partnership solutions our will with an Samoa in we through to update Min continue which on American see TBAS, shortly. increased provide adoption

a a of infrastructure. this and great As reminder, capabilities closed-loop our create a demonstration is payments modernize to ecosystem

the governments around island on other explore potential to continue that has helped a businesses islands, and success collaboration world Our the from variety including customers, opportunities. generate we interest of

but for see from We the payment expanding a services, opportunity for treated coyni not convert digital for us because that partnership, to banking potential only the transformation platform we because of services a provide can TBAS as stemming great massive us. the universe foundation

towards QX payments executing sum lucrative focused us of remain to Yet, larger line To on digital ahead very results. top we're record up, the encouraged the opportunity landscape. in deliver we

and We processing enjoy and of coyni's We are to expansion both strategy. in our create confident remain solution higher-margin significant we Banking-as-a-Service domestically. spin-off momentum the acquiring value the volume, internationally and the on with path long-term the initiation our shareholders. are We thrilled for

Mary of details Mary, over Interim the our yours. call I'd And Officer, to now to is Lay the results, floor Financial Chief the Hoitt. like turn our financial to discuss

Mary Hoitt

Thank you, Ben.

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

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

first Now turning results. company's XXXX quarter to the financial

XXXX. processing XX, net revenue revenues XXXX, months from Our businesses, XX, The March in RYVYL from million increases XX, compared March XXX% months Samoa. $X.X or X Charge ended American for gross volume acquired months Savvy, X the revenue in the following: increased in the by million the months million change increase X $XX.X ended for reflected XXXX, EU $X.X ended XXXX; March our the XX, to in ended to and March including X

in margins of quarter primarily months the the XX% processing financial X.X% in higher primarily profit XXXX $X.X the revenue million first profit XX.X% XXXX, XX, profit million or due ago. ended for in increase for March revenue $X.X ended gross X for same of months accounting and a Gross to by or $X.X March The $X.X external million increases payroll to to restatement quarter ended of the [ $X.X expenses in XXXX the XX, was processing X volume XX, or expenses volume payroll to months was of services tax XX.X% increased had total (sic) and year expenses was in increase gross compared ] Operating for professional and XXXX. from million and The and X million annual legal XXXX. March due the reporting.

X X March and March charge the advertising $XX.X value fair by XXXX, XX.X% X Changes ended ended of amounted $XXX,XXX from months ended ended expense for proceedings million in by In administrative, Other of addition, legal XXXX, months we and offset a or a the general million the March March X decreases XX, marketing of $XX for decreased the million compensation months March months to expenses. stock-based XX, derivative XXXX, to $X.X $X.X months credit million in the ended XX, for in encountered the and for XX, liability XXXX. X XXXX.

convertible million by the expense XXXX. issued Interest November $X decreased million, related $XXX note primarily in to

Additionally, conversion XXXX. we to of months debt. partial charge in incurred March a ended and million Related on of loss the extinguishment a a $X.X X XX,

ago. $XX.X recorded basic the million loss diluted the share March in million share per a to XX, a and XXXX of net first to decreased net gross increased basic expenses, company and loss decrease mostly and liability loss related a in quarter in or due $X.XX profit per in derivative interest The in the of year revenue, compared X or and to XXXX. changes other expense same months $X.XX diluted ended The quarter net $X was of

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

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

Min Wei

Thank you, Mary.

We will discuss and the serve Please verticals processing all the for we walk the XXXX that through exclusive are Sky Financial our of outlook. note our volumes figures portfolio.

XXXX our higher an than first at processing is from increase million our our across all million XX% is quarter. projection million, $XXX of of Our than processing QX higher $XXX of for which QX XXXX This XX% volume volume and XXX% about volume. channels the approximately about $XXX quarter

QX the volume XX% Our earlier. $XXX period is the and than $XX volume XX% year is business than higher is million, same higher million which X QX acquiring

volume. ChargeSavvy is of same about million processing the processing QX $XX the as QX

million the XXXX, $XX QX compared While volume $X.XX a to improvement. it in is

our an QX, For first processed increase X%. portfolio, international in $XXX we in compared Europe, and the of including $XXX volume quarter FX million in Transact million business payments to

this We forward as going will global offering our more expect see to Banking-as-a-Service report the momentum in category performance market. we in

For Samoa. on an American update

us the million, base an in million volume XXX our exceeded over processing remains month. into $XX In to merchants our and roll solutions to QX. was monthly This about expect now the are case our services drive about the We for ecosystems study $XX XX% out and world. volume servicing merchant of important QX, has to payment around per

are back to order as a spin-off to Ben this company coyni, publicly plans spoke under traded as earlier, market in technology To to value. fully to circle way

merchant make improve to releases and enhancement continue We customer to experience.

EU and in With regulation market, and and platform the the the to quarter. are support increasing our we to roll coyni other in changes next the the U.S. out international adjusting plan European demand digital follow the markets banking

million. to are to I'd in the to our volume to for QX, quarter. processing respect like $XXX million we to the achieve Now turn With $XXX second outlook targeting

million Given our target of and to with QX expansion $XX we the the revenue revenue start year XXXX our of and planned are over for expectation continued million. with business from growth, existing $XX comfortable strong

million range be $XX.X We expect in QX of to million. revenue $XX to the

are and million and to $XX revenue to $XX QX million be estimated outlook million, $XX to QX million $XX respectively.

expenses forma which million one-off of with expenses adjusted EBITDA, $X legal R&D QX reflected restatement work. outside million, figure $X a associated over financial the For negative pro our and is

positive take a projection remains line. Our year finish is us million year delivery target breakeven QX is expected $X to the while second this level, half and the for about for the our to

This in commitment U.S. the $X Overall, domestically to international of the revenue in XXXX. to our plus our we positive a expect EBITDA of for growth is be $XX and solid adjusted meet total the million by markets. achieved million

for on the are path scheduled increase In to our we the growth, coyni's spin-off through organic addition to shareholders values plan. our

the turn back Ben Errez, our now This concludes Q&A. over to call for quarter. remarks to the begin I'd like our Chairman, to

Ben Errez

you, and your Thank you for Ryvyl. Min. Thank all interest commitment to

are ongoing for grateful support. your We

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

Operator

[Operator Instructions]

Ben Errez

come while in, those. questions submitted this hold for prior have And we a questions that call, we were to and review I'll to few

in question and strategy Can hiring sales for Min. and domestically First acquiring? you is talk about for internationally merchant trends

Min Wei

Thank you, Ben.

strategy our ISO and For to that our sales international continue and to growth plan, hiring enjoy partner's pleased network. report we from and high domestic I'm momentum

of of to matter last U.S., locations QX in at fact, compared year. merchant the as services of looking half a second grown space end more when have than we As the XXX% in we're new of

hiring. this really, not is just So about

ISO grow partnership develop We and our and to network. continue

the So we strong have sales. the in momentum

which we markets, we PSPs we year as international have momentum built sales market. the European in announced from partnerships partnership the in enjoying this that in QX further as well the likewise, are of And

new matter the double-digit gaining end last fact, are location a year. of since merchant application As growth [ ] of we

So though. good question,

Ben Errez

Thank you, Min.

forward? is The at that question to expect also approximately back higher back to to you. of to level With moving this it margins, reasonable second is quarters continue

Min Wei

leadership's the top definitely, to keep Well, the grow control. and under right, management to the objective continue part line of costs

definitely margin a to closing drive improvement QX, the think QX forward whole year. year this continue continue team job QX, going I QX this last expect did we fantastic into to year, on into

our that's during we earnings for fact, to mentioned As top line the and earlier numbers a of as bottom line, achieve path matter call. the

Ben Errez

coyni's the Thank you, for spin-off? going frame you Min. Can expected next I'm to elaborate question. on take the time

asset date Elon it spin-off, launch not is vehicle quoting. to did actual compliant. So That It is and our term is It It is the with see. launch fully process. begin out that. acquisition completed yet Its and are is there financials that up but a is it all friend, for of have coyni's live. launch acquired. vehicle, It live, was borrow started to the the to from vehicle spin-off Musk, we a

the have We our $XXX million with to of potential least. estimated a million. raised quarters, of next an engaged the investment anticipate the couple through for We valuation at that go $XX for at banker goal raise company

dividends to accomplish point addition that this of This our that, enable benefit vehicle remains will well. everybody, for In shareholders. point of we all intend focus for a to that the as long-awaited year at some and the

The next happen assets along the these of will shortly. lines completion to step the the This vehicle. of transfer are launch

an will a name we the that, the appropriate ticker Following file with change, for exchange for change, more application including coyni.

We will the into associated revenues process and inclusion of rates. uplifting entity of begin the complete additional forms of and that

to months. the As approximately process take I whole Operator, X back is said, to estimated you.

Operator

of H.C. The Wainwright. [Operator Instructions] first Michael comes from question Donovan

Michael Donovan

now. right I'm is who's of calling Dede, road the Michael. on behalf This Kevin on

you volume and color increase in mentioned getting provide Can pipeline you've So your more paid? for margins. and processing margins volume around an processing

Ben Errez

this Yes. Operating, Min, Chief our will question. take

Min Wei

question. you the Yes. Thank for

First is right, growth, the locations are volume the processing to of directly for new boarding. we on all, merchant the related number growth volume of

for I services part XXX%, earlier, able our or As of mentioned with the last to year. processing -- by locations merchant later number XXX% we're efforts, amazing of more since it's increase indirect than direct, XXX% just sales that

So going the accordingly, up. volume is

questions your what answer we are business. in on platform contribution to we Now is about margins the the processing, do

we ledger at continuous as people put your improvement to Hopefully, speed question. certain the scale will not through as margin the our answer going So platform the contribution because same running terms expect business revenue. of leveraging ecosystem, cost, blockchain more in is our our volume we that we have costs

Michael Donovan

have a to I question follow-on that.

the locations, different terms thinking So how affect and margins? about locations be margins of in we should how these as they

Min Wei

one. it, is we we merchant by communicate right, is foreign way business international services at payment exchange, one, The about category, Sure. typically look our right?

per have we when parametrics speaking, we look look have what have that generally to in So location per ecosystem, depends metrics services, -- at volume range the month have merchant matter on services, an average to at we of month data on the verticals basis. enough point we we per $XX,XXX a we when case the we from the -- fact, as or of $XXX,XXX seen in

to continue way. scale question. grow locations, merchant that So you as we more your that Hopefully, will addressed up

year. with multiple For strategic financial payment the international space, institutes the earlier this we've announced partnership

million of We $XXX a monthly to volume month. ramping million expect up to see of the north north incrementally $XXX --

look at it. So that's to probably another way

I key say those the revenue have. So X new would we are drivers

further If you need details elaborate. with that, happy to

Michael Donovan

that. appreciate I that's mean, very I helpful.

or do Another Ben, and front? coin front you question perspective, the a from view how your from competitive both from your you either regulatory stable perspective, ecosystem,

Ben Errez

last the what So same the see the regulatory of and between the we question, for the around the that's We a decision-making and step will world. general I manner the week I the and that see in where a industry definitely right? of plate the We TV remains inevitable challenges around interview asked up struggle hope positions the in was did hour, same. this dollar question to and market oversight enabling outcome to join the guess I and onshore divergence people in and U.S. the the locally rest safe controlled market. the happening globe, in world the happens and

safety-first, in better for that see first In it in business call be prepare the other parallel, and let's coyni. will forthcoming And approach primarily for will Europe not that this the happening other and happen. plan will you'll And possibility in it markets, happen and review in we it, markets. as

Michael Donovan

before on Samoa. you one I have going system back closed-loop in around This hop American in One question was final that queue. the your

are Intercash, how Europe? loop to for with the new Or closed you a going you this system tweaking be this with from about are thinking strategic So partnership perspective?

Ben Errez

That again of the jurisdiction falls Min. under

So to you. back Min,

Min Wei

solution to, merchant in of Yes. by really for would amazing it Thanks the roll to percent each the not right? term, to were say of -- to the quarter, say question. close we the So end other, it's close able near XX-plus would I was that I the impacting locations.

closer the to we we digital to enhance is have acquiring. on out experience few there, for island, our margin the plan merchant island further for the much the payment do the And island On roll platform coming amazing digital but coyni and months. the in processing, ecosystem achieve continue to on hinged a in

We actually are working Samoa diligently our TBAS, very partner of on with Territory that. American Bank

get potential in of certain But issuing as those we the -- issuing in a the the of roll the And we much partnership to side X few have opportunities in United Intercash how potentially see the look right? most U.S. X But to out. the On few thousand cards. I penciled then out million of Europe. details that's to imminent it thousand targeted converting mainland is up with do on the cannot we until States more plan a as on dollars at And well in demographics. -- all plus to share hundred a the million side, too Europe also of the business, hundred up

doesn't Europe near how we But the with as surely, on U.S. in Continental well. U.S. we'll it Europe to expand each gain term, mingle side to, the continue the on Continental we to other. American the are focus the more if But momentum the and for trying Samoa necessarily program and better issuing on issuing So explore on the volumes in also

Operator

for back I to to no call the over Ben there are hand like As phones, Errez remarks. any would more questions the from closing

Ben Errez

all. Thanks,

to worked has in you future very use us, Ryvyl. thoughtful submitting we the was all your AI. and to back produced Operator, close edited continue I to this that production questions call. calls. you well hope this enjoyed will entirely you This these and interest technology thank So by for and for

Operator

conference This concludes Thank call. today's you.

your and you lines. disconnect a may for day. pleasant Thank You have participating,

Ryvyl (RVYL) 22 May 232023 Q1 Earnings call transcript