Earnings call transcript Q2 2023

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

Operator

Welcome to the RYVYL second quarter earnings conference call. [Operator Instructions] The earnings press release accompanying this conference call is issued at the close of the market today. The quarterly report, which includes the company's results of operations for the 3 months ended June 30, 2023 was filed with the SEC today.

On our call today are RYVYL Chairman, Ben Errez; Interim Chief Financial Officer, Fredi Nisan, -- excuse me, also Gene Jones who is the Interim Chief Financial Officer, Fredi Nisan is the Chief Executive Officer, 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 Instructions] [Operator

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

Ben Errez

fiscal in for for for million, for our in efficiency push our joining to range call quarter the of XXX% sequential nearly Thank the Revenue first to quarter continued I second $XX third a today. you proud is from entirely results, delivered QX cost reduction target financial million. a Today's increase consecutive us XXXX. of produced above company. am the an increase XX% revenue using also where million reflects This $XX.X AI $XX.X top record XXXX quarter and present of million we $XX.X line of year-over-year. was

down million. in processing above volume COO, channels efficiency, on and processing in covered very see margins I As $XXX of XXXX steady we with increase. needless in are XX% to pleased continue call, quarter, increase from $XXX We will quarter off million our to break growth our improved of but processing target later million the past technology the Min range $XXX first profile. the margin various Wei performance to operating an processed our say, focus are paying the our we as during improving workforce calls, and

made on progress key recently. Now operating to to initiatives we've our of the move some and

a believe value QX initiated the growth We way this as to unlock potential. creation of strategy First part is planned spin-off ultimately this tremendous process its our early and drive optimal is and in broad of coyni.

create company establishing coyni great the the strides it a processing public premier electronic shareholders for path the believe best in made business, and the forward as While through spin-off payment our of we token value solution with to our have we is as market.

shell public board to we facilitate to directors and Simon to the coyni given in During underway -- the personnel. which process their accounting our Furthermore, has order and approved. coyni technology, finalized Edward change assets be company we expect transfer soon. of processes and a selected as auditor we quarter, to The name with is acquired familiarity transaction, RYVYL of

Once can public of complete, toward offering. the next look we phase a

with as updates special to RYVYL We board be along of they NASDAQ expect year. front by a million for to the the on about, and dividend this come but in the more end provide We'll approved $XX ultimately this expect range uplist shareholders. complete

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

to growing to projected this ramped institutions. up. on global signing This gain in for is new than the in several when $XXX million after XXXX more demand We per month momentum partners financial with continue initiative X and transaction service process fully

such solution integrations days and by methods as capabilities Banking-as-a-Service or hours on XX real-time settlements. API The local authorizes than day and per transactions offers XX in of way different deposits. RYVYL's with more business direct payouts currencies enables service payment foreign approved exchange

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

to consumer to X provider. issued, and a infrastructure. the can we on phases and over or program Intercash, migration which issuance. currently the platform White cards strategic Through than with During Banking-as-a-Service Europe-based Intercash, allowing new the businesses issued can plans as initiated the process cards already based card moving card million first leveraging virtual more prepaid offer has be partnership of flexibility. with payment cards global in debit physical, collaboration, announced cards phase markets, quarter, has by co-branded the a enhanced the continue RYVYL second as XX,XXX solutions now customers untapped RYVYL's business the label to

over Our Euro EU that instant from approval, payments subsidiary, encompasses launch transfers facilitating This via for SEPA Area from providers the our approval euro capability in and payment targeted customer credit the SEPA, zone, experience and to Payments European and service incoming faster in strides European transfer instant markets. payment an Council QX, clients has allows X,XXX for business Single space receive enabled RYVYL instant to in EU, payments this client RYVYL quarter. a Payments RYVYL send With EU. made outgoing in Europe the receiving noticeable enhancing transfers XX service clients during instantly countries, the scheme

loyalty a infrastructure. edge Doing Visa to of of Visa a create retain the and so the better part and accounts, as collaboration revenue revolutionize our region European are with solution our customers, transferred enable business convenient Eastern funds new offering in cutting between fast, way This streams. their serves transformation superior and provides partnered transactions. offering also transfer EU payments secure Direct, RYVYL updating will banking-as-a-service

integrated capability extensive of the service instead will offerings, the benefits have of to becoming days. countries Visa's clients is Direct to our to network money customers will the over send accounts opportunity banking with of utilizing experience money in within partners. By multiple our authorized Visa RYVYL's minutes Direct, through When available currencies faster into local XX access funds new across Visa

integrated we're have the settlements serve. that the with is We and we enabling the expect be of every new enabling the global banking Banking-as-a-Service to and service of and in payments excited in rapidly local future year, SEPA to markets key reaching Visa space day. an global Direct By end provider platform believe the emerging a we is customers

reduction our an of $XXX We completed note million in financing. convertible bolster holder debt meaningful announcing increase our an resulting the equity cash took initial a $X and exchange, the shareholder million structure, capital flow. also exchange with We to in agreement steps and

major and a conviction shareholder for our for in reduction. disruptive debt The a our the $XX million total win is mission institutional second landscape. exchange RYVYL $XX.X also of as digital level commitment approval, stakeholders which This force of payments further million upon in would possible by is a all reduce debt type illustrates

Operationally, Gene Financial company. Chief we Jones welcomed the during as Officer quarter, the Interim of

CFO, has immediate within for executive and operational various Treasurer COO, equity, Gene funded financial including roles, Controller over positive XX and expertise improvements venture leadership has had and strong on impact served an in years, His public, private company. and For companies. startup Corporate our

superior As in infrastructure. payments Council we partners of large lucrative stand the payments exceeded top expectations with highly on offering today, record at so, And towards positive focused our line saw of digital Visa, provides this executing landscape. business the European transformation for second with We and we quarter our us updating results. Intercash. remain a ahead Payments banking-as-a-service Doing opportunity momentum

steps expansion our domestically. with completion. confident acquiring We coyni's the margin strategy forward shareholders. has both on are is volume, thrilled higher are we processing the taken remain value and to meaningful internationally and spin-off path for creating long-term We towards and significant moving

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

Gene Jones

be Thank non-GAAP to referring measures. and other adjusted you, EBITDA Ben. I'll

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

from million, for $X.X the increase EU attributable $X.X Samoa. our by million to or XXXX ended year in quarter $XX.X earlier to XX, to was American The acquiring in June quarter increased increase second quarter. year XXX% an quarter ChargeSavvy, principally from RYVYL earlier including million revenue the and for the volume of revenues an businesses, and processing in XXXX the increase compared Our

is QX increased by XX% quarter. to North million America June revenue XXX% for the $X.X June revenue from quarter $X.X of million the year earlier revenue QX million, XXXX. year Cost $X $X.X in the EU $XX increased QX XX, quarter for million XX, for the to earlier million by XXXX from quarter. XXXX increasing or from $X.X ended ended $X.X XXX% for million million,

quarter. XX% for the Gross ended margins and year in responsible the ISOs, fees increased of organizations, Payment establishing merchant independent XXXX, payments the processing which gateways to ensue. various and compared XX% maintaining paid relationships, transactions the processing sales to XX, consists processing from to commission to or in June earlier quarter

in earlier fees resulting for processing U.S. professional June increased $X.X advertising $XX.X XXXX, from for ended XXXX was in and and expense million million paid the amortization. EU. XX, higher quarter due in to offset June XX, increase Cost The of ISOs due to fees increased businesses administrative million year gateways, ended increased Operating quarter. and of compensation marketing, expenses the and $XX.X revenues quarter the payments commission and by acquired for higher general, to decreases the depreciation stock-based by chiefly primarily X.X% to or to of cost revenue and volume,

and related period attributable general are expenses higher to The administrative XXXX statements. XX, restatement and of non-continuing legal legacy some accounting prior quarter the accounts some fees writing the non-recurring ended ongoing off June in mainly legal related to fees, settlements and and financial matters

was XX, of fair credit was $XX.X $X.X million a $X.X ended quarter this million biggest $XX.X for quarter, of June the for XX, to dollars the million million. of The amount the of of nearly a income for liability. charge XXXX, ended highly year in $XX compared XX, change the quarter volatile quarter portion the value ended of earlier XXXX, derivative XXXX. to June was That million in the change expense swing June a Other other in compared

a $X the to note, expense, the quarter year related from debt expense to primarily discount to amount $XXX earlier convertible outstanding. lower debt level accretion of of million related due Interest of including by the decreased million

Additionally, we in a incurred June quarter XX, ended charge XXXX. million $X.X the of

conversion of we recognize the with quarter the to year in million connection of and debt $X.X of Related in loss settlement debt. the the earlier

of a we the effects restatement quarter. that recall million previously are second in charge from may and had You some including that, issued statements there a carryover financial $X.X so

substantially all we challenging restatement a was behind but we believe This us. mission, effects have the

effects statement $XXX,XXX fair Other increased of expenses exclude change and the our quarter second financial the However, year compared we in period. the non-operating the that the derivative non-recurring in by of about effects of value to volatile earlier carryover highly liability if restatements.

were value summary, our period net in the This income change the related In of of of a million derivative this change versus items net recorded quarter. year's to But primarily to in in earlier non-recurring quarter. the there due in year's million expense fair value in last several liability also year this $X.X liability of the million. in income fair derivative million $XX $XX.X $XX loss compares to second we year

charge-offs accounting of of million $XX.X the restricted that non-continuing prior We the legacy period restatement cash loss legal million $X.X Non-recurring second a totaled matters and EBITDA, and XXXX include $X.X million is last of Our in quarter of fees, equivalents compared quarter of quarter million unrestricted cash for quarter fees being with $X.X to financial legal with the ended related and cash, the million statements. second settlements, adjusted accounts items year. $XX.X some to and related of cash.

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

Min Wei

Thank you, Gene.

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

Our quarter. XXXX volume, This of the QX to increase million not including across of $XXX the about versus Sky volume volume is QX Financial about million than all channels of exceeded $XXX volume. XX% our $XXX and from XXXX our million published better $XXX for an QX indication million processing XX% our

is Our volume than America million, volume X quarter period higher and the which higher is acquiring early. same than XX% North the year $XXX QX XX% $XXX was business million first

it million was volume QX XXXX select processing When year-over-year decline. volume. lower The a decline due than QX from in ChargeSavvy is reduce million or is $XX to merchant base. XXXX, to $XX compared about processing QX processing the XX% XX%

seconds, FX $XXX second offering, new a This the banking-as-a-service increase processed quarter and XXX% our Transact in business $XXX of we in XX%. to payments over QX, million. million is of international from Europe XXXX QX and For including the in volume business acquired our increase compared portfolio, million an $XXX

American on we improvement volume is XX% and monthly merchants In Samoa, about quarter at was or $XX QX, XX% the about volume update plan. now our from our are of market servicing about the an For million, sustaining million. our prior processing a target for $XX

compatible earlier, to of release coyni the users towards spoke smartphones spin-off simple just Ben convenient of and continue announced executing to sales of as work plan. setup point We coyni, for app that we contactless to respect using With our terminal payments. enables mPOS the

European digital Furthermore, due market. and as European out increasing demand discussed rolling the the in regulatory near-term the to focuses the environment platform well we on the U.S. changes as market banking our in

Our efforts is business underway. to establish the well European

$XXX Now outlook million. respect quarter to million I'd targeting the third processing for like $XXX in to year. QX, range our of to the to and a turn With we the are volume total

without XXXX, $X of estimating $X of Sky the to volume, range For year the total a Financial we billion. are billion

year of to million continuing million to our our of revenue revenue which to outlook total $XX strength would and exceed QX QX we momentum, million, $XX.X raising million. bring revenue the are Given $XX our $XX

With quarter, regain which EBITDA, to and is figure associated compliance. negative regard than to pro the This scheme breakeven forma to expenses expenses QX is a for with higher card our our administrative planned than lower $X.X is adjusted million. fees targeted due

this great the We domestically are of QX to Overall, And markets. we as adjusting expect in about target down projection range optimistic to of positive million. trajectory $X and million remain deliver international XXXX to from growth year the our a adjusted $X $X to for in results. million our EBITDA million for and million $X is $X result, U.S. a our

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

Ben Errez

with Operator, Thank Q&A. proceed you, Min. the please

Operator

sir. ahead, Go

Ben Errez

Thank All operator. right. you,

take to email few we prior the address So the floor, will a continued questions by had to those us from before we questions we conversation and online. submitted

Ben Errez

The question on update matter pertains update minimum is first an of the to an NASDAQ compliance. or

you a continued a list. And regained have We going to panel has for with conversation today watch the that company compliance. indeed hearing on stay the that is all that. is update And had following company we X-month the the

shortly are prepare they simple compliance. We announcing a will maintain continue that, and planning X-K and to

forward. are including want an SEPA did Question expectations progressing provide what discuss will moving how the call. latest to and number turn that are financial on announcement with some brief you on things X the We of pertains a our and further you Min, I to on should update integrations, partnership, Visa on that. to

Min Wei

turned our to the progress and program the like fully program. Visa with system share I mean Direct I'd SEPA process current already integrate -- both working is SEPA system. and Program instance. exciting on SEPA is The Ben. for Thanks, with the SEPA

respect third which Direct We expect increase quarter. comes the target a diligently as processing program We with that the with working to as that, quarter Visa as of manager, result the of to it countries initial volume third well further we the go and see live when commence in visa banking list in to offering. you Program the

local we of to we press during the have is the it's access will currencies. this Visa when XX with As a Direct and over mentioned of potential release, program great up foreign to running, fully range different payouts countries large

Banking-as-a-Service So all offering. for in all, great momentum

we the monthly we definitely volume further the have mentioned also compare hitting at earlier When earnings offering we As double-digit already north QX to [indiscernible] the we constantly we're we're call we the it that previous during have while seen of seen increasing for million and growth. have. volume, Banking-as-a-Service looking to Banking-as-a-Service portfolio $XXX quarter,

we Direct and So further Visa good to news across instant see board, the us. and help expect SEPA

Ben Errez

next Thank question Fredi you, Nisan. CEO, The answered Min. will be by

landscape? digital game? other and the go in Stablecoin the your competitive to Fredi, the projects the hunt of are What's launching such what PayPal on the FedNow, thoughts currency there as ahead ahead. stay or the in With works strategy

Fredi Nisan

PayPal like for From when see space everybody, announcing is a I the big joining and the we especially news PayPal Ben. and the technology crypto you, stablecoin think Thank companies offering. stablecoin, great

everybody from regulation pushing help have an it big well we agenda think will as we have I space. so company the PayPal like in because will a

stablecoin, the local I FedNow not interacts and payment, and to money think scale. a that how understand transfer will all with ACH, help global FedNow From it is that with on just need the like of we just

so is help business. competitive different, think So I global landscape, with good maybe later we but PayPal because payment player big can we a our movement, as We're interact little from and it on and bit a talking it the us stablecoin about PayPal. will is see a thing a

the But I risk. in as low-risk want the to to PayPal space mention well touch and is that don't high they medium

So to their I something opportunity offering, our offer that a with technology great think can our necessarily we client. have and not PayPal there's

in and opportunity great it's beginning just the a see us I all that it. So of of for again, space

very I'm So excited.

Ben Errez

as that possible my the as I'll of to the you spin-off to next heart. the coyni much the clarify related take as a Fredi. Thanks, Can dividend. close is and question, subject very timeline

diligently very much as the pushing and shareholders opportunity idea that for are it we can. all pursuing dividend like quickly forward I and as we

stands we the spin-off. it right vehicles launch for now, As acquired coyni have the

of We have state ticker FINRA approved. merger for the will awaiting filed that articles change with for confirmation. fairly coyni filed happen and We with have Nevada of that are a those that we appropriately have name suspect a change and And shortly. and

to that statement the perhaps be timeline, ahead going fairly hand, registration short for anticipate and that SEC the used the go file shares on statement days. considered With will dividends. are be the in XX we to by for approved that and XX registration to a We

that, record take will of date dividend the Following distributing the towards announce steps and for we dividend. that

said the completed be on end to that the As we year. call, we by anticipate the of

Financial I the on any will company Does entitlements updates pursuing under the next the purchase also agreement? the take Sky question. have

quick very So that. update on

everybody, us We to recovery that option strategies further comes We're for to liability. under that are have pursuing updates that share obviously substantive still any different the as we stands information now, don't through about. we right with looking alternate legal but And will share maximize as on front. it

a the Bulgaria smaller larger Can question. on or the as next or take or at that cetera. I'll competition hand you crack maximizing strategy is opportunity first. baton less et Min, to the up Samoa, face and you the Here's about bigger talk scale economies in into a focus to that economy such

Min Wei

That's a great question.

geographics. our focus very rather of into categorize on terms economies, Rather growth specific we'd we've at strategy, versus larger selective. and verticals than In look been smaller

grow growth than to have from For our QX. -- robustly, very growing seen processing QX example, XX% right? the volumes XX% block to We to U.S., continue in more

continue we on to the focus today expect specific the achieve we the on. double-digit target to growth focus market, in We on to serve U.S. verticals verticals

also we looking we where we and Now new where new verticals geographics expect profit at separately, less margin. competition, are to generate have higher

plan the high high risk, will our coyni return in on to European focus example, to market For medium specific roll verticals.

We out of process business the loading half the plan have in market. entities, European a the second platform in establishing product [indiscernible] the the of

In coyni process of the in some and also rollout additional the as we're our the programs programs well. of wallet services e-commerce for progressing U.S.,

portfolios We business focus on margin. say would verticals. good that's all-in-all, select I So profit select a generate we going on to focus

that our shareholders. better a As generate returns of can for we result

Ben Errez

Min. go Can Thanks, on that and next Any impact financials and This question ours. how we will that can The mPOS provide. capabilities estimate about Fredi, elaborate this Fredi. marketed? product you go to you follows ahead. that's PR the on just released new being a timing of

Fredi Nisan

run Thank Ben. you, to in internal market when understanding extension is a what you coyni. for that developed The challenges We exist payment this product an company. are today of mPOS the the

One are up. time challenges of the the the biggest to hardware, when terminals, the they deployment, challenges the set arrive,

All are services time-consuming terminal. called the an the related that of that technology to merchant related tasks older POS, actual to

you So that turn merchant technology as terminal phone long you're the accept coyni part we program. that into can coyni new of any developed a and you as

allows go from quickly. that get moment very And you live the approved you to

shipped wait to to for have the don't You be to you. device

downloads. You to don't have do

set don't can globally have with app. and the it same we it to exact You deploy up

exist reduce us to different company does to it's operation certain to like payment not to need allowing costs that. allow company support in deployment it support other countries. in certification require a a be that processing So and costs, And

deployment merchant, simple they help with effective So need for and end buy terminal. day, benefits cost our to faster are in deployment, the help with global the a meaning don't of the the

them to into vertical new bit fraud, And us to us help chargeback, reduced may well considered into little last ability transaction, visibility the give the be will -- help support as the give actually us and be get to thing that today a riskier. a

the sides of volume, the the to the it allow of of company together operation commission. will on of All the both us increase and profitability front on increase

Ben Errez

Thanks, Fredi. conversation. and the the Operator please the Drew, to Q&A proceed of with rest

Operator

from Kevin And we a Dede Wainwright. have question H.C. Instructions] with [Operator

Michael Donovan

Kevin Michael Dede. is Donovan behalf This calling of on

this multiple your in and covering have Visa's local coyni clarify, XXX to to to press be expect be going or that a state you platform using release as currencies So want global payment handling is you local currencies over also well? sediments. will full network I

Ben Errez

that you I'll take part conversation. Min, have as your of

Min Wei

But fair visa SWIFT to When conventional press question. refer the No obviously program. SEPA refer working have the going not outside don't our right? problem. coverage process is programs. consumer to as we offer say the and Direct. context with the to going with of full business It's cheaper of as in for Visa do release, the be That's talked a faster, to and be with very about to working that's a potential, very transfer, that conventional customers. SWIFT, capability It we it's We Visa interface we Direct earlier, well we impressive

our In terms of coyni, is yes, plan. it

earlier, have with for I capability business U.S. the handling market. the multi-currency pushing solutions banking the we a way expeditious in the capability platform, our of the coyni covers [indiscernible] As fully kind as processing both mentioned the processing expect of have for integrated market with the customers. we We the coyni rollout plan European

Michael Donovan

Mobile merchants had you That already? a feedback I the bit days, front? a Point -- And you of on get be would few that appreciated. more have geographical been from little coyni's but specific regions only for are beginning? color the know targeting app are which in Sale you it's And

Ben Errez

going Thanks to Michael Fredi. for back question, that are we

Fredi Nisan

for only can -- of I some reason My apologies my but sentences. couple guys, a hear

So Ben mind, question. repeat the don't if you

Ben Errez

can Michael, you go ahead.

Michael Donovan

Certainly. Thanks, Fredi.

received feedback Mobile already? in app, days, Point regions are a beginning? the there also, targeting And specific you from of Sale geographical it's but I know merchants few you're only coyni's have that been for So

Fredi Nisan

comfortable repeating start we and merchants Europe, we coyni we kind that are verticals have very be be a question. deployed moment a the of few very in is But to with Thank we the want you vertical as you as goal do We the well will focusing couple in that U.S. moment, we can there but well. believe U.S. start specific us at the approached we on already are At that as utilizing the the that for with are successful, in deploying next a

Michael Donovan

for U.S.? going landscape now? things upon how House that's take What's regulatory bill the are but right in the I your the a through Min And this on changing stable U.S., know regulatory in touched bit, the the

Ben Errez

that's I'll take So -- this one.

pilot that's Reserve. And centrally initiative you declared front an been So and interesting the topic. The program back Michael, have in program, Federal and XXXX. that At more much what on were the institutions see persistent time, FedNow X% from and about than we the in of this the those, from Kevin around XX,XXX government of up are the XXX. participate so all signed country, to financial pilot there about

includes year, certified. one a itself the of program as this are more completions the the Back in as that the big FedNow. standard the successful And of this of in are now course. of year. portion certificates of those And participants, for providers. Out XXX-or-so are July April government for And were way, was of XX awarded only by announced financial service not this institutions, they certification

reason world very companies finite. in The U.S. coyni part penetration and more understands defined. in harsh a everybody primarily are landscape is lot is The have sort the figure lot but that established not field, the very of waiting This participating where is competitive, to playing more regulators large it, in landscape already is a maybe banks why operations targeting of the is this it us is reality The spin-off out. challenging for is Europe, the

short So this think flavor I this. where you question, a to bit going little all a guess it is answer of but of gives a a we're of I longer with

Operator

to like for back Ben would remarks. closing go Errez to I

Ben Errez

and listen thank everyone signing our quarterly this results. I'd So for to participating to to conversation like up on

As use sections technology in using remark continue we AI, very forward. we the will I conversation, entire moving effectively this and stated beginning the of to think the were produced

the you forward outlay clarity our meeting October. further The thank you end is call dividend up have Looking we will hopefully with shareholder time. at for all coming that everybody. we'll I next to and And With of all. in see on point, the this, next you

Operator

This you. today's concludes call. Thank conference

You may disconnect. now

Ryvyl (RVYL) 14 Aug 232023 Q2 Earnings call transcript