RVYL - Earnings call 3 2023

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Operator

Good afternoon, everyone, and welcome to RYVYL Inc.'s Third Quarter 2023 Conference Call. [Operator Instructions] This conference is being recorded. A replay of the call will be available through January 13, 2024, by calling 1 (844) 512-2921 within the United States or 1 (412) 317-6671 when calling internationally and entering access ID 10183517. An archived version of the webcast will also be available for 90 days on the IR section of the RYVYL website.

Before we begin, I would like to remind you that today's call contains forward-looking statements from our management made within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities and Exchange Act of 1934 as amended, concerning future events. reports estimate the characterized and the based similar future and conditional such company's are events, information available are and beliefs continue based statements periodic future expect, will, include the currently as regarding statements expectations which, to SEC or forward-looking the timing may, on of intend, current with the of words filing assumptions are on by statements These regarding forward-looking company. Such in turn, anticipate, words. believe,

the detail expected required to call SEC. the Chairman extent ahead. as of the new result Ben with You projections filing of risk are should events these the with Errez, or carefully aforementioned longer statement, results applicable information, read will now reports address forward-looking company other a update statements or the Please that words publicly of and statements the whether A that known to cause and from filing operations forward-looking could additional aforementioned materially the state, events differ may of the in matters and. otherwise, in because undertakes that company contain revise risks the and go to any expectations except forward-looking future or reports to are including expressed affecting The forward-looking laws. I uncertainties to plans, company's over and in they take nature, contemplated the SEC. future actual RYVYL. to information. By those the financial hand by will periodic completion of factors than the risk of discussed and variety information or results discuss and prior obligation condition that or statements, which their expected by Other contain future factors periodic subject become filings no

Ben Errez

everyone, today. Good and for you Sarah. you, afternoon, Thank thank joining us

an quarter. consecutive in the record million. RYVYL end quarter ]. to of to fourth results, upper $XX increased range second QX nearly XX% $XX.X XX% [ revenues target increase XXXX, year-over-year came of $XX financial once million XXXX. the QX from third of also top Revenue the again, sequential the $XX.X reflects delivered million of line million During our quarter This in

Our Operating the margin channel with transactions QX revenue was of pleased results. resulting in processing an our volume, for business Overall, for and U.S. establishment RYVYL way way of breakdown derived quarter record represents XXXX. we from are from totaled the improved Strong the million, trajectory as of well later. and online international EU growth the channels our processing which America profile. performance XX% in RYVYL's retail from a and of the Wei $XXX processing pave the increase our will as various second businesses business, North additional in the Chief Officer, provide full growth very steady Min growth

Moving on to initiatives. key some

our mid-XXXX, to expect year-over-year through their Visa will leverage tirelessly local are this by to of us quite minutes Council the total partners an accounts, Visa better revenue. countries market First, expected EU, offering, secure many instant in complete, Direct payment to working the growth banking of important accounts, Eurozone, and loyalty on is as enabled, RYVYL this in for in partner the increasing allow access Asia, opportunity, to for integration countries to fast, and EU tremendous RYVYL its transfers. funds revenue target It capabilities EU provide believe offering faster to will CEPA we the streams. Once Banking approval CEPA customers, transferred receiving as providers in European extensive experienced XX presents money that health transactions. way will convenient Visa X,XXX we revenue XXX% optimistic the incoming which XXXX and the of being capitalize we network RYVYL we believe on we We and more initiative across to Being than retain Europe across a enable in serve from over to the cases, opportunity quarters XX.X% an opportunity outgoing chosen send XX, money have becoming cards important expected within and representing segue are the partner. on are with remain authorize Payments the collaboration superior e-wallet service Eastern to is XXXX, the Service between benefit funds European multiple with we debit and about eventually. revolutionize also in Direct update of and believe our September Again, saw the market ending currencies which currently our EU will respectively, instead of new RYVYL available with and positioned on days. to customers the and region create and that XX launch

of We our work month continue with to per with transaction volume. in Service large believe institutional the to platform $XXX up what on as million ramping goal a we partner our Banking will be

of local as Banking foreign payments transactions XX and way enables and day than settlement. as per approved on The deposits. different more Service integration offers days XX real-time methods Our capabilities currencies a and solution hours service exchange API such by direct in payout business with authorizes

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

we about excited suited market, We potential tap believe lucrative to technology long-term for our into. well is this the are

subsidiary do will believe and assurance the QX FINRA to drive provide in than the longer we process be it coyni. We the the to creation Next, the with we the but like coyni strategy in to and currently speak with change completing optimal way [ investors comprehensive Toro of review viability to business. would it growth potential. ] broad a spinoff our coyni. about the believe of planned is to has truly value We're our early finalize completed greater of process review This the of as part to anticipated, name expect taken soon that of of initiated

mobile rounded a payment coyni and next through user-friendly capabilities quarter, payment coyni launched point MPOS secure to from we coyni payments of to the for app, and merchants MPOS way data coupled businesses MPIS MPOS straightforward can registration comprehensive release with transforming iOS the begin by third devices app of and sale, coyni accepting platform, convenient benefit the terminals The the business add provides quickly During integrating transactions. process services. with and secure, with into efficient Android the users platform. the of the end foundation system, merchants

taken the on debt sheet. balance reduce steps also meaningful our to have We

the stock, shares shares of debt institutional holder for and we rival shareholder for and Series we by in convertible an exchange our issued X,XXX million. million reduce agreement debt of would believe was the A During as in In $XX Series X,XXX also our illustrates further convertible a agreement consideration a We principal second landscape. preferred shareholders and of total a stock. issuance amount our under million force additional a the entered third in preferred exchanged an have quarter, portion cash digital $X initially interest which of received million date, the is To for the commitment $XXX into mission the of of designated outstanding with note newly in of reduction note, and of for an our principal rival contemplated this exchange type of $XX.X our disruptive major exchange of convertible conviction A convertible payment A resulting a such reduction. debt increase in level all a approval applicable win flow.

corporate contribution of believe turn achievement to processing the implemented expertise making sustainable to in steady in we and floor private and to I'd professional as for our strongly Oliva. per financial operation and international this in further with core progress in business that while stock finance a ability well and welcome the value profitability. financial Financial as to over the generate as shareholders. And Financial demonstrate strong scaling to we Officer, those initiatives welcomed growth companies. years also drive our to George the of of execute planning. results, moving to planning our Oliva details and growth senior George split companies for technology analysis, Chief our experience a strategy our over we discuss management Officer strategic market financial company up, yours. We better things the We of sum listed compliance. Operationally, We improvement share our long-term continue and will the to George is margin tax forward. To as expect like a increase believe development call assure XX make NASDAQ significant capabilities a and treasury, maintenance finance, X company. reverse George We the to public George, and brings to XX now strategic of Chief background of that price our

George Oliva

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

adjusted release on in or this accessed earnings website non-GAAP can the earnings release issued of quarterly before which in calculation to our IR refer EBITDA, reconciliation For in the sections. of metric please the be this call company press

processing the quarter revenue fees months increased paid for fair September period legacy September of charge and to million volume gateways, XXXX. $XX.X a decreased September compared revenue value derivative expenses higher resulting by ISOs $X.X million the acquired X% fees an in million, for same million quarter from the and by payments increased XX, of in year cost quarter decrease accounts. Other increased XXXX, transactions well $X.X by in November earlier of in discount consists revenues for up XX, and an ended September for ended responsible XXX% million million year for million. from gateways ended acquired of ended business the increase EU. of year a and compared general quarter The revenue as million in business for XX, for continuing ended year $X.X X from to for from depreciation September change business, ended losses XXX% are third expense The $X amounted by or in in processing increased $X EU totaled expense XXXX XXXX, in million September ended quarter quarter. $X.X Payment for relationships attributable increase commission payments North Changes compensation $XX.X offset million provision Cost issued million convertible independent Interest XX, earlier. XX, the September million to primarily RYVYL merchant maintaining of increased million on last XXXX, up administrative for paid $X.X more in commission the our was and million expenses the million ensue. Cost to U.S. organizations months XX, processing in the $X.X of from the year. general XX, note to $X.X from XXXX the or from to in of primarily net sales from the XX% than same for to The the to XXXX. XX% XXXX America processing by ISOs, to the increased the $XXX X earlier quarter. and revenues months due higher XXXX, the non was of QX $X.X the decrease or revenue the the debt related a months to in million million $X.X significant expense, $X.X quarter $XX.X earlier to million establishing expenses. $X.X attributable credit revenue due QX to XXXX of a credit stock American million quarter which for X processing X or and $XX.X in $XX.X accretion growth primarily Operating as of various liability XXXX Our volume quarter to XXXX. ended and amortization administrative primarily nonrecurring to to and the for September to in of EU the XX, Samoa. QX was

Additionally, in XX, basic loss of debt, conversion the connection ended million recorded legal ended XXXX the to September in relating or September related which the per EBITDA ago. the a the ended Operating Officer, XXXX, quarter recorded million of the nonrecurring review of $X.XX compared $X.X September or $X.X third million the cash $X.X basic and adjusted XX, XXXX, settlement that charge quarter of unrestricted now third was restricted we equivalents of debt. incurred $XX.X in we million with $XXX,XXX in turn of diluted quarter recognized diluted We $X.X operations ended a $XX.X $X.XX of the $XX,XXX and to company Min loss share XX, cash the in positive XXXX, in loss quarter loss and share settlements cash. I'll year and of million same over with being of and our summary, of the Chief a of call is $XX.X our expense quarter the the quarter per year. cash XXXX. In last a loss net to a We net million, of to a share in to quarter business compared and a of the the provide of a to quarter Wei, outlook. million third In

Min Wei

Please and XXXX. outlook Financial volumes note the all processing the verticals you, and of We'll the the our quarter results are third figures discuss that fourth serve we through Thank of quarter exclusive for Sky portfolio. walk for George. our

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

North from than The year QX than higher and to QX America QX which volume merchant million volume business to XXX% or same XX% When X base. million, earlier. acquiring QX's due was about period million $XX higher XX% the QX year-over-year XXXX in it reduced $XXX XX% decline was processing $XXX volume. $XX Our is ChargeSavvy than select million is the is lower a is processing decline. XXXX, volume compared the

QX offering, million volume an XX% portfolio, XX%. over in processed a $XXX of our FX $XXX business Europe For including QX, compared Service increase payments we million. million business new in Transact QX international and to our is acquired XXXX's the in from as This $XXX to and Banking increase a

focused XX% on the prior For million. With $XX an update and we the was In In service we about of for, deployment prior, about sustaining set merchants communicated completed respect processing period banking continue and the on our we our monetization due to coyni and U.S. EU monthly American at capital the are target subsequent registration on expecting asset our Samoa, to as the regulatory U.S., market volume serve our as to to and path continue entity, our island. we dynamics, market. volume to million, $XX same environment QX, execute adjusted digital up plan. about QX about for successfully to coyni as EU the receive quarter. is be coyni, immunity. the have license our In

the and processing in above in these onboard now for business pause of enable to In with to are cone we start new of soon. the are taking generating coyni meantime, after first U.S., to are that moving environmental we payment share the factors, business All us customers system the batch the ahead to pleased value due verticals. a mentioned

we near processing to processing merchant channel in by term. the is now and start our banking partner, approved the expect coyni Our

Now million, million total believe [ $XX our to will outlook If we $XX in which achieve volume December bring quarter million the year. our million we and ] I'd our QX the $XX our for for revenue year to to is $XXX expect refer range in and revenue outlook With that our XXXX, of this processing the will of billion. like we $XX.X before is Based we to attain ahead processing With total a of turn such pro respect to $XX volume, adjusted ending revenue metric momentum, billion. to the call. issued $XX which achievable of QX, for our for forma $X fourth million release million forecasted respect non-GAAP please to revenue volume on to fiscal estimate year to $X QX, exceed XX, the processing reconciliation EBITDA, continuing our of earnings year. of to million

development figure higher-than-planned cost $X our which legal is with external spending the than is investment, expenses a targeted expenses to lower fees this million for quarter, to technology compliance. and Our $XX,XXX, associated regain scheme is QX due administrative positive

Chairman, referenced Some estimating are QX, in $X.X and year continue Q&A. our $X be my over at of in $X a concludes $X to third and turn million. This to EBITDA Ben like to million quarter I'd to positive negative our year and adjusted to total for million our remarks million and now will EBITDA these Errez, call to the XXXX come adjusted expenses investments total QX the begin we to our the

Ben Errez

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

begin ongoing for support. I'll Q&A our grateful are your that, With We session.

Ben Errez

few received those, take Now start and from the then and we a have with by mailers, questions I'll questions we'll floor.

the The to $X to we so, the in that million in versus think America $XXX of So continue if processing North revenue. less margins about on EU for see first, company much Min take higher RYVYL than expect should And does EU the seems how Europe? question. growth will million America. revenues North

Min Wei

a is This good question.

market, compared markets we our ratio. America and comparable in European North revenues million expect definitely, versus margin same So it America from revenue, of to revenue ratio of of comes volume when business. versus for EU service first the acquiring offering, to acquiring that we terms million ratio all, case be and to $X the revenue EU in When The see earlier. the That's good the think than a to because observation Europe. primarily compared simply volume of mentioned it's $XXX as European acquiring in lower continuing processing North banking seems North the to business America, to come growth I for

Banking the services the phase Service fact of of to are testing lower which currently pricing the due we for to are a still out the rolling service EU revenue as offering we in the early the have part new is point market, and in the for that still do we However, offering. ratio volume

adjust business. this for expect profitability to move we and achieve as a kind good revenue between balance to the we ratios of continue pricing We to reasonable ensure to along

Ben Errez

progress coyni Thanks, Min. spin-off the of finalize remains be Question the transaction. to the X. is What to what completed and

So it the that allow what and the I'll next fully potential would my to spinoff. we will so. The create NASDAQ FINRA the a to cover reiterate issue standard are do remarks. intend in as as say complete for to I that blocker coyni process just as us recent quickly and committed question, did deficiency

are a X NASDAQ and currently with the and standard is final hearing January. and So within The a January the be unrelated. the upcoming dealt therefore, issue it deficiencies ] organization rules. OTC -- under are known coyni FINRA NASDAQ an entity, the not will [ NASDAQ is during spin-off

Next question completing status firm? the is what network transition RYVYL its to the of is

Min Wei

the answer I'll question.

So [ is of from our we system all, owned network explorer first [ technology to by testation the from fast technically, to have formerly efforts ], provider. service ] migrate completed which a

view, However, from feature a service will the offering in coyni rollout service implementation point their introduce due we time. as continue of of

Ben Errez

question where on operational what Can revenues. The the those arrival and material. coyni if coyni you Min. comment you, since revenue Thank is to from well with regards next is year-to-date it's are generating

Min Wei

question. Thank you for the

from revenues we [indiscernible] the have first became from of some service So ecosystem all, coyni do operational. and as immaterial fees the

a to also the by during banking fallout of But In business the we that process now the have prior appetite about pause verticals. risk coyni in I U.S., partner, U.S. our I we out in the are and for can As customers market. took for to approved sure approved industries banking communicated earlier, now that digital banking, that as mentioned earnings covered make we the U.S., we in move also for the our my given FTX we remarks. as asset

European license to week. U.S. And as the have gained finished getting in during expect I this the the are our we ramp the market. we in actually So registration up remarks, the also, set mentioned up of earlier, We earnings revenue the capital now we entity

that in we're we So well. market the about EU for the out and also coyni in to ensure roll revenue as services

Ben Errez

once lot of ahead, FINRA add what And potential. that will the gives that to depends and like that, business its publicly coyni to on will us a activity spin-off I go looks and discuss

Next vacancies to leadership senior question. to and Does sales fill the in hire marketing? role company intend

Min Wei

have easiest That's grow question. the We plan verticals we for to we -- as verticals we to to momentum the have. XXXX, well intend is The into as fill as answer continue yes. vacancies existing new we

Ben Errez

the roles support does Thanks, operations to a growth. support support How Min. current to and organization. customer level as And of company respond the question. feel staffing related its to initiatives to as about the well efficiencies inquiries customer adequate our growth and

Min Wei

we appreciate comment So the there.

we business customers the satisfactory sustaining with a partners, experience customer at For [indiscernible] maintain of success together our a our always business with merchant experience, business our forefront operations.

do current to as growth. business we maintain anticipated as yes, well the So business adequate resources support

to that are always good to obligations fulfill strike the cost conscious resource very a also level we right ensure between We and shareholders. balance very, to our for

Ben Errez

a The to Min. the Financial. can lot not with question was ongoing discuss submitted the handled pertains being we our professional final prior in about by call. process. There's today to to that Thanks, legal publicly this it's and teams. It's regards writing that Sky proceedings

floor. and that, progress front will disclose questions please. We on from comes. With the appropriate when move ahead, operator, we'll the Go time as any to that

Operator

question first Our Wainright. with Kevin Dede H.C. from comes Instructions] [Operator

Kevin Dede

I've got Kevin reasonable. you whenever a few think me Dede. it's questions. Cut off

wanted of bot. AI I Ben, I all, say, just an think, that people not real first and appreciated to

So doing thanks that. for

Ben Errez

all have you're cold. it part that way. did So of we this Unfortunately, the reason we

it suffer appreciate the But you the way. hopefully, people will So other effort.

Kevin Dede

hopefully, will. do, and I certainly they I agree,

the guess, First you're And developing off, we how vis-a-vis understand look at it I should that can you app -- help square. how with coyni. me

Ben Errez

Okay.

Fredi. ahead, will So Fredi CEO. for that, speaker new I Nisan, that's Go a invite

Fredi Nisan

mobile that through allow critical similar a merchant went mentioned, the replace for but payments know a the ask We KYC, designed customers. very was to receive the processing thank look, and Pay from receive Instant payment close with you traditional now and e-wallet. like to customer Kevin, your to fraud square, to in risk, question. app meaning you Coyni coyni reducing

a as the network. customer well, who show to the and if network on good that us through bad customer can and we it's is side, monitor go a that the other allow or merchant So everything

So is a good technology. then the stuff step technology new up our space in impose open the with with entering retail that first and other

Kevin Dede

it George me Okay. little bit. a see in The point maybe September? right Maybe convertible was was debt can the note, direction, I hard think slid how to that levels post conversion or

Ben Errez

ahead, I'll take Go George let that. George.

George Oliva

-- We Series X A the in is tranches.

that first July second meeting. was in The the recently got we the approval, in and and Board shareholder needed

that will reflected -- so And I yet, don't think but that completely one is shortly. it be

Kevin Dede

Okay.

see So financials? we should year-end

George Oliva

Yes. Yes.

So shows current only sheet balance the July the transaction.

believe, So and only was, these the I financials. $X.X showed total million, $XX we million in

Kevin Dede

it Okay. Fredi Ben, to why and this, takes part the the -- can integration Maybe help me or Visa's the better that of Min understand end year? back is

Ben Errez

that. Fredi will take

Fredi Nisan

Actually, that integrate side, on Visa's our side. is it's great it takes time on the That's actually to a the question. not

you As its go has and own integration through process compliance. each country the compliance process,

doesn't each the instantly you we the that we're want to of open up Colombia do the operate What in, to the from And globally. require and nobody best excited locations great trying even relationship, South as America on that Canada, matter, like high but we be shorter that example, it, us. for can all tell in a allow are period it So or of do to finish able well risk news I Visa, about and overcome something that Visa process in our to one depend those operate that spend space. to that time very or the all to that to gaming by of we though time not means Visa on compliant that separate money we'll else process, about and trying accelerate to through us is offers

Kevin Dede

Okay. integration My you've to was creditworthiness. database been able in bring and haven't one And of understanding before. advantages in operated customer that to countries the end how you I'm develop necessarily that of wondering you understanding a the your is the

Fredi Nisan

and that's part of And the KYC. technology

understanding getting of verifying demographic people the customers a we're the they are, of So it. serve we're and as better onboarding who we and

well, On in side them. understand service the together and to that their client our our servicing work it, KYC partners, other companies as require different own we the of who can we create from utilizing so

So the more business, so. it requires a work a partnership have we to little do traditional technology and the than but bit

Kevin Dede

As progress the process able offer maybe more you're integration goes insight the be to will forward, making? you on

Fredi Nisan

in mean with You integration by Visa general? or

Kevin Dede

-- I the number mean, because should like platform look Visa revenue? an think with on would you in have see maybe countries How it? working we of the we you that do first or increase at Well, international

Fredi Nisan

moment, share more moment, with absolutely. we countries Oh detail. what We're the with. for the the details But us At more cannot we operate to will be to specifically in any share the which going integration on vertical available. easier will in Visa, in that this country, be it's at is because educate volume just market each the stage, and

Kevin Dede

Samoa. of and take up system ago, other point, maybe American have to loop that to saw an you switch just it X, technology, X idea going closed that to and show at pick The quickly markets quarters to I'm customers. one other hopefully opportunity

you how little on and adoption think at why process So I'm is XX%? wondering stalled out progressing bit maybe a has that

Min Wei

developments. the are going with territorial to There provide I'll are the X Min. X, island, parts island. couple of This merchants them. great Kevin, are the the moment, further of major is First planning America our question Great services answer So question. really the on [indiscernible] with partner continue again. of probably Samoa, question, through very There to closely all, we work a right? on the we Bank the of At

of One is MPOS the introduced we them solution.

mentioned, way restrictions business number on Samoa users previously number that's the I make contained environment point we've to on quite the something the two power right? us allow we does island, very slick solution easy, it's to very conventional very our think for island that's this is a the actually quickly, a provide closely coyni. less test partner is, American island. So as with working one. Point And and Island, been very the a solution very the because for the us from to ideal it conversion to for

question, to the do the go are As answer the that for And to because on conventional really a our a little will Hopefully, optimistic So year. required of plan in the it matter those out new move and parts going we the their we'll plan and will fact, a processing that of very X experience there. XXXX there is together have way better to obviously with help ways bit do right? partner That's proposal government approval, through presented we the ahead island. the vote it right? are plateauing it, payments together to transform we

Kevin Dede

hole little me. $XXX I just $XXX in there and the X million million. for a gap figures missing? million One understand Europe, but on processing, those am total be What didn't I quite to in $XXX Okay. U.S. the seems between million $XXX

Min Wei

Yes.

actually in the And Kevin, North pieces ChargeSavvy but for $XX out major the reverse probably it's and markets session, yes, my European went $XX of those equation, American the pieces, couple are acquiring and million then for as in is $XXX-plus about $XXX million okay? million So the are I other of Samoa. America million for over business, a there

Ben Errez

any back to Showing remarks. closing the Errez over turn no further questions. conference to for I'd like Ben

in Thank RYVYL. questions Okay. interest all and submitting you for your

close and So can Sarah, back the you session. to you,

Operator

Thank call. concludes today's This you. conference

may now disconnect. You

Ryvyl (RVYL) 13 Nov 232023 Q3 Earnings call transcript