RVYL - Earnings call transcript Q3 2024

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Operator

Good afternoon, everyone, and welcome to RYVYL Inc.'s Third Quarter 2024 Conference Call. [Operator Instructions] The second quarter end results press release accompanying this conference call was issued at the close of the market today.

Our quarterly report on Form 10-Q, which includes the company's results of operations ended September 30, 2024, was filed with the SEC today. A replay of this call is available at the Investor Relations section of the RYVYL website in the Events Quarterly Results section.

As a reminder, this call is being recorded.

would forward-looking remind concerning statements I call that future begin, certain contains from we like you to today's events. Before our management beliefs, projections future or information. statements and currently are financial available forward-looking are condition company on state results information company's These and of the contain or based based on forward-looking expectations future which events, current regarding to in of turn other the assumptions operations uncertainties. their subject and By forward-looking to matters statements are that nature, address risks factors actual statements. contemplated cause results differ of and variety and/or A expressed materially could by to events from those forward-looking the Other are the in affecting risk SEC. company's factors the discussed in the company filings with detail events no whether to to the or any obligation undertakes laws. I update publicly extent forward-looking required company by as or now over of statement, result RYVYL. call applicable hand the revise of future otherwise, The a will Ben except to information, Chairman Errez, new Please go ahead.

Ben Errez

Operator. driven successes, third we revenue We business development a growth we Thank strong sequential conjunction recent the In point. turning consistently performance. by reached in delivered with you, XXXX, believe of quarter international

line top RYVYL's XXXX. to will trajectory XXXX and expect We into gain momentum continue exiting growth

XXXX global XX% with European XXXX nears American our partner sets Service partners International impressive started to for for This QX reflects year-over-year, XXXX. rapidly expand expansion remarkable continued integrations million these Our licensing, a $XXX revenue opportunities. million and demand on continued volumes licensing a region. In X operation. which strong in trajectory, momentum stage growth in our excel and achievement the platforms, $XXX empowering PayFac transaction as for electronic marking compliance increasing QX the QX third challenges clients and a foreign postponed North these Banking to growth operational XXXX remittance that of pivotal our new from even powerful to an transfers, in the rising efficiency, will and integrations, pipeline QX, and launch, markets. our in build across we're some X European international software offsetting U.S. finance. quarter fund With October, global comprehensive grew in exchange API real-time support money delivering In activating business seamless

growth our we website through our of showcase the the secure more highlights rollout handle to integration. targeted empowering to a a power providing grew December Additionally, branded and experienced this we we've is for new partnership Visa. XX our This strong to Visa bringing to countries. initial electronic our pleased gain business quarters U.S., went the and the under and system enables merchant drive Direct to seamlessly developed robust This and expect August a traction us revenue diversify a and of as-a-service EU, initiative, Visa's we're fully into live third-party into reenter maintenance in In network, label XX marked vertical via payments, private announced Visa Through in our support. we model. and this payment we're integration value merchants quarter. countries, revenue am Direct's licensing improvement, a to deployment, and licensing verticals. I label high-risk XXXX. report our fuel of processing banks, capabilities over consumers payment It private enabler system our network management we to global week, see POS Visa's to starting footprint to other a sequentially approach and in and partner business continue arrangement e-wallet growth model, this transact expanded the expansion. third By infrastructure leveraging tapping our recent platform. In to efficient, across XX% In the further than extensive pipeline

This of to turn it approach consumer is reduce now and yours. development partner for receive risks. I'll transaction is the responsible our compliance CEO, business further operational over and per operations position, our competitive activities. operations into margins Fredi, enhance compliance. and and allows minimize costs, ensuring us our connectivity to banking Our Fredi our transactions, insights fees, for floor merchant Nisan,

Fredi Nisan

Thank we in you, significant U.S. winning Ben. our expanding deals internationally. months, and have In business achieved pipeline, recent progress in and both new the

focus XXXX. laying be year clients for new remains anticipate Our jurisdictions, growth groundwork we will firmly multiple in strong on across onboarding a the what

I'd a positioned value proposition to are opportunities continue moment our as like growth. the to We reach. take highlight and strategic we competitive expanding capture edge behind our substantial our to focus

market have specifically payment lost offering and who solutions, retail is traditional target to on to access underserved gross approach able We focus segments, First, clients the by merchants robust banking are margins. we're and targeted. XX% ecosystem By high-margin or our processors altogether.

solutions processing Our competitors others efficient We with by prefer speed advanced provide solution and support turnkey clear. do, value solutions leverages processors like avoid end-to-end for that smaller cannot scalable. clients processing blockchain errors, and capabilities is and sufficient along and acquiring specialized larger for banking it powered reach, making other verticals highly cannot customized to scale. overhead the We we transparency, that ledger that and technologies. No deliver reducing at

rapid payment This creating leadership the technology, this For are our in digital new to these and market. us over in in competitive this this America. North business impact securing excel and our onboard into example, our of market. Demand meet allows processing. unique a potential space To We tech processing is now to We're areas, in in high needs of significant a resources at verticals both advantage strategic through a compliance Hyperledger, growing X,XXX with core well transactions collaboration positioned we're second. and model. partnership recently clients' strong. per entered specializing maximize onboarding Regulatory we in speeds to further firm

for expansion. significant will have future across merchants for X,XXX We with rollout U.S. the begin initial potential an and

and traditional QX are payments card impact with positioned launched high-demand enhanced cards ease. and process XXXX, flexibility Our innovative enables new In to a to review product This partners. NanoKard and targeting accomplishments. NanoKard, cash opportunities initiatives capture markets. I'll successfully security with strong is mobile or enthusiastic we for the recent merchants providing generating capabilities for and processing high-margin prepaid website service By offering app, our gift key complete a users. responses making and and alternative us seamless across to sectors, some

Our accounts. network PayFac as X actively We a Service processing. PayFac also is model has Europe. expanded recently large already in our rapidly merchant onboarded One

final Compatible solution traction. we Service live Fabric contribute closing. for this banks infrastructure, to this service. alone, in providing A This set In our our and offering frameworks, is expected RX major power demand strong Central new of QX Fabric monthly has to cost-effective $XX X clients account our in $XX across are of integration, RYVYL lines. stages acts robust other onboarded and gained and that highway, scalability RYVYL these simplifies enabling go Europe, is strengthening European million is Together, the significantly blockchain market. With our in by critical their Hyperledger security the we set reach transaction XXXX accounts as underscoring product a with platform The multilayered to volumes, to both integration a API more Corda structure. with all our processing are presence extend shortly. to global to million supported as Banking a effectively. third

We solution. partnerships, to prepared support to new are reflecting commitment our secure, fully scalable blockchain

needs. solutions Core, banking payment meet shift and secure streamlined our solutions our strategic current opportunities. markets. developments specific moment mobile high-margin, to sectors, payment the new and supporting and on that why some core in aligns so are long-standing with and consumers' for we context adoption investment on high-demand in systems and our and NEMS cards, Additionally, we further perfectly to wallets our in the customized their onboarding industry add with credit to growth us payment real-time about underscore momentum, banking These technology. multiple laying are towards our The sustained solutions accelerating a leadership payments industry-leading resonate strengths take global focus started foundation about technologies, that establishing we a which our is arena. I'll growth excited further position of positioning deliver across With are this clients strong proprietary

and Service actions as dominant start-ups beginning are innovators AI gradual reshape processing fintech payment integration given in improvements and transforming increased competitive driving broader adding competition transactions, the are landscape. Advancements banking RYVYL. the environment like impacting banking Meanwhile, blockchain detection, favors in networks, platforms across fraud they operations faster with and While real-time enduring agile innovative and the that seamless offer are banking transaction credit such cost-effective cards. the and payment to their landscape, regulatory and antitrust trends FedNow pressure security are creating and an processing popularity These of adoption face scrutiny solutions.

stage the Oliva, further CFO, strong recent and our streams. an strengthens diversify visibility excited by the we're for growth private and we're to relationships XXXX, base influence industry. With our well financial update hand closed banking who positioned customer are and through business George to white-label continued setting licensing, review and in reach call for provide payments to pipeline, ahead This will I'll deals and financial our we and our that, the now results the into building. XXXX Looking amplifies and our trajectory our guidance. the revenue With momentum

George Oliva

North X% second third XX% billion, quarter of volumes up Freddy. processing XXXX XXXX. quarter $XXX quarter quarter across XXXX. XX% were you, reached million, second from from total America up than higher second $X.XXX a performance. XXXX, quarter the third all Processing were than International channels of of review our and volumes XXXX processing million, the the I'll $XXX Thank and financial higher the volumes X% of

the implementation growth EU expectations. Third-party original in software from slowed our

the quarter in in to liability. Adjusted growth XXXX North October. XXXX was to changes the million in quarter a quarter in debt quarter due the compared increase revenue compared of third in the quarter quarter of negative fees third processing expenses in in North to quarter million million third the $X.X third primarily processing the in million $X.X quarter third value quarter in Operating However, the R&D expense believe of of And to XXXX, of XXXX of lower $XXX,XXX the the $X.X U.S. XX.X% International in an to and business. Revenue to of of the XXXX for XXXX. in processing the the compared third million of G&A quarter revenue increasing double-digit in those we million increased to to expenses $X.X third of XXXX also, derivative reflecting XXXX partially of in America, return resolved were the discount the $X.X Cost professional $XX.X third XX% were America compared to XXXX was issues third versus compared in of in in XX.X% third $XX,XXX margin for was lower third International to XXXX. of volumes third quarter EBITDA in quarter point decreased million in third $XX.X $X.X segment. Gross due Other offset in the quarter operating XXXX expenses. million in the by million fair the XXXX. expenses, of $X.X totaled XXXX, to of the of the and quarter accretion third compared XXXX. gains

the MOU, balance we and cash was to be and restricted the flexibility convertible quarter level, announced our resources. At redemption $XX.X for Europe termination our of million to terms of sheet, significantly, note working $X.X B X% convertible cash memorandum of negative. Most corporate preferred and million we U.S. foundation September Unrestricted was restructure strengthen repatriated growth. for Under the our senior During our this and stock. Series as cash from financial paid capital financial is million support which funding increase of week, balance will our million. capital XXXX, the understanding XXXX, of $XX.X was third a $X.X net to XX,

was value of and outstanding $XX.X note As liquidation of XX, the XXXX, October the the stock preferred million. principal was $XX million

XX, of outstanding balance the redemption on be first of is XXXX. a million The before be of stock on the of before note, tranche or to $XX.X remaining million balance paid For the preferred the the full redemption November a $X.X principal or in paid and January is to of of note XXXX. portion XX,

we $X anticipate grow processing XXXX. in billion Turning We reiterate to volumes guidance. over year-over-year to that to

revenue However, as year. guidance revenue in quarter. start discussed, several of the Thus, balance fourth third factors adjusting the our quarter for the we the of the impacted and are

very activities, $XX million strong Now expect recent XXXX throughout into portion segment million. Based QX in the momentum revenue be of be comprising momentum range we development on $XX business to ongoing and in to our total expect with revenue do gain XXXX. XXXX accelerating contracts International XXXX we and to the largest of with to

to back compared XXXX the We in growth before XXXX. I'll call expect to now hand for some revenue Q&A. Ben resume remarks to substantial final

Ben Errez

America reported strong George. execution, XXXX. Europe double-digit to forward With new to year the our and earlier established to conclusion, strong downturn excited and it recently growth and this look progress our as bottomed about revenue. and Thank poised in appears business from growth our sequential has pipeline, growing In the North our we transactions you, updating RYVYL trends in XXXX growth is plan coming experienced proven on months. you resume segment closed are in have for

Before the there we are advance call received we will address. open analysts, to of we several call the questions in that

Ben Errez

on forward? The this George. how processing the to first further we is key in growth going you volumes question drivers and model Can comment should

George Oliva

and X% will X%. U.S. $X.X in processing looking Europe. We're be rate The closer billion at approximately is Yes. Europe of XX% to QX, about that residual in of the is in

over volume how just is of revenue. X.X% average model blended to a I the would So

Ben Errez

is software issues this or in the affected in question You Fredi. third elaborate for you results quarter? partner Can third-party your that the Second on discussed remarks.

offer color operations you how the can some affected are more on now? However, running

Fredi Nisan

Visa our Visa Thank and and received a Direct. get of lot in from The their merchants you start on and very First delay. of live side, turned month our different onboarded didn't going On into much, delays Europe. moving the But gateway. their implementation. most we -- now had in Data, was end we new the Visa the all Company of challenges ACI, like have of certification had certification in Ben. last through finalized we every directly and this ACI customer we new ACI

Service, faster Latin So allow and onboarding, now regards and had we some delay in side implementation countries, compliance. a as us deployment that. we different we see we ACI. merchants. That's Visa and of new especially a got the much American we already track, results of back operate in regards banking In faster see Banking November. well, the We are relationship overcome our with due to new to banking to now that But and Thank you. those some in to as in on

Ben Errez

to Fredi. the George next Back question. Thanks, with

XXXX When in not You but indicated more you growth you provide substantial time? or why specifics this specific guidance? you to it provide providing not do expect XXXX, expect And range. at are

George Oliva

moving some their completed by I Well, we plans this We're yet. starting XXXX. we a companies lot planning parts, have are for and most -- the completed -- not yet will But There's think process it's have point. at that of not don't January.

Ben Errez

you Thanks, XXXX? you How year-end next George. Back close targeting to Fredi and promising? on consider the to now one. verticals do many licensing What most deals are between

Fredi Nisan

That's Ben. you, Thank a great question.

mentioned already, We're went about live. deal that. license we -- first excited the license the As very

some business. compliance of risk, every cannot working we lower are we're the a profit. verticals, really what our that the the in infrastructure have to the deal pure We pipeline. money hard of And go we the at in of more and transaction more ecosystem. We to of risk. disclose burden like software, few most moment, the them but such of the move bring high the the But of the in through them And make We're have just providing money about vertical on that is money is don't license that we itself. some

really you, excited we're other we're working license deals the of Thank So Ben. opportunity on. that about

Ben Errez

you do the and consider you domestically attractive Fredi, What for on most growth, market both question. to Thanks next with areas are staying the we be internationally?

Fredi Nisan

we Thank our a processing, consumers a When of CAT come demand And the The a and it out lot What remittance become it's towards company, of partners of as different are and see crypto, banking building for huge certain, lot see really next something big. from we the on America we you. large getting huge very as shift, year. servicing comes call lot a you, card of in cryptocurrency. to shift, we a It large. getting verticals the applications, a certain money of we it, demand to we a see for Latin are and we the see credit that lot we're well. in seeing a Thank with companies very pipeline huge conversion good a traction Ben. growth a are we'll based what today, track

Ben Errez

The science of plan handles Fredi. in and Thanks, one you data you changed? Fredi can systems favorite some staying monitor to Have share elements there in Are that with management used the health one again, your continue the subjects made us? is, next the with my and business. improvements to business your of specific

Fredi Nisan

know, Thank data. you, And like Yes, Ben. really great question. that's I as a you

great a data. have the that in specialize team unpacking We in-house

daily. dashboards and we tools that great monitor have We

of future, in access understanding and into needed bit time data like now business, you, transaction, all can every have from project on to the points We of the to visibility look all we monitoring but that Thank compliance. the getting and real We volume, better a of we We're took into Ben. little we're data adjust what all and in risk, aspects company the longer, of have business of as based receive. is us the the that. can every going It quarter, the we points at better year, company. data full number

Ben Errez

there are we We Thanks, there few follow-up from this do be have from them the analysts. the take now. floor, to time, any. take a floor. be Fredi. with sessions At we'll any Should But ready should questions questions Operator,

Operator

Michael first with Our Wainwright. [Operator H.C. comes Instructions] question Donovan from

Michael Donovan

America you impact of Could Also, in details changes licensing you potential the under provide do George, in revenue? Fredi, on partnerships more administration? U.S. how Ben, the North regulatory expected and the foresee on congrats on the quarter. incoming their

Ben Errez

the Okay. mic George. I'll deliver to

George Oliva

processing exclusive doing vacated X a over the optimistic that is be a we its of peak, at that time, transactions looking are we could that we're And And million QX. would At approximate that agreement that. the were month. again, that in licensing profit. largely main we we the vertical So

lower might with per any we So associated slightly transaction, have that. have won't we costs revenue but

time, going from would it's take I next over year, to but we the significant think I that. volumes expect should see that some

that wants as payments we'll a more we are we'll It's licensing the it. to process close other of deal on next But do ecosystem kind somebody The their releasing be release -- in-house base. modest. licensing deals as own a mini customer within soon probably press bring and their

Michael Donovan

regulatory do Very good. part question about And administration; then how incoming any just second that the there? of foresee you the changes

Fredi Nisan

Well, changes that general our technology any pertains to moving the are to forward. we're individuals the coming about in of business, look happy industry familiar as guidance forward have We the for this industry But and to their with and we in details and potential we the particular. don't ideas yet. involved,

Michael Donovan

Fair appreciate opportunities enough. XXXX? What that. do for I see M&A sort you of

Fredi Nisan

I don't answer at know that we're that time. question prepared this to

We able the or this at market domestically opportunities deck, it for And XXXX. we looked if have be on to would had at the not time. internationally to it disclosing before we not discuss M&A one even

question. So going I'm to skip that

Michael Donovan

makes an Can coyni? you That update sense. provide on

Fredi Nisan

to So coyni. out we not spin decided

coyni U.S. We the rebranded the Europe, throughout technology it internally. in have we've and adopted and company

advantage the specifically. so technology, talk taking it's we're really of but And going the that individually not to to something we're

Ben Errez

working going see the what's to and as moment but regulation next have We're is see technology it's our with will next Europe new infrastructure, in happen is is White U.S. House play here at well on out difficult. But bit U.S. live, going going year. the and the little understand we're step. the still to to a the to the what how

Michael Donovan

And hop the demand market competitive queue. final Core in differentiates back What terms and latest positioning? of NEMS upgrade the I and platform NanoKard the question in before

Fredi Nisan

real-time core NanoKard focusing Core acquiring closed question. the with side Thank NEMS it. -- are aggregate card more to the Core, X NEMS payment, we more PayFac technology so technology into what Core wire, processing. side. ACH, aggregate is payment. new is that NEMS more a risk our onboarding goal a offer for that Core they to payment a and licenses those technology It's sides a us we have faster. gift great to faster our call in with and a That's we their ISOs you. offer payment, and NEMS offer risk high loop the a can environment. on can opportunity We is NanoKard main onboard for closed-loop high the help ISOs and and acquiring offer side But services that agents. focused streamlined onboard And on banking.

Operator

from Halpern Howard Taglich Our with next question Brothers. comes

Howard Halpern

Congratulations the on quarter.

acquisitions and terms using customers, throughout and new acquisitions using verticals? different to the going new in of customer XXXX ISOs view how into customer that technology get should In we the new

Fredi Nisan

That's especially disclose We a we gaining don't those more with and great in have Europe, changes more momentum the due of over amount some ISO but to partnerships, question. we're there.

going are belong example, support. biggest they that with shutting the to For one of to are FIS. and in and Europe partners down communicate is no Worldpay They changes ISOs that longer

So the we and goal a appointed Europe demand a we're we Christian into call the our what our see see his to very, exist license And we many we bring of for to that created in U.S. that for the And don't what see XXXX. up the NEMS. managing industry. And the that. demand a is with as that is and the submit And leveraging work see as in really to we side veteran open huge Director. Murray in And managing that. U.S. access under Europe, huge Europe together already Europe. between and today. the get into we world, unique partners huge ISOs this ISOs be of the able bridge Christian He's put in and we really and director Managing And for side-by-side program Murray really to demand NEMS, ISOs that's is U.S. we local In to there. ISOs the and to something super products the for very new one ability actually that bring

new Core. in about one side is it. ISO other mentioned We're of my on That's verticals. side. And So I to hard the just NEMS when comes answer working we're what the onboarding very excited very it

them their the to and a be manage They offer expertise that almost they example. build, our call to money, NEMS franchise label white the like subagent, the time, offer type, to manage, to for to for kind under want own, want it, For own going of we're don't business to own their their services a have technology as example, insurance companies umbrella. processors;

Howard Halpern

sounds bit a really data base try enhance on place science customer you little to maybe of or and and faster? That AI the question. good. in new there technologies back go technologies a to I'll internally a maybe Is market like place finding for developing generative terms the And are or getting technologies

Fredi Nisan

that's Absolutely. it's XXXX. offer of to the when our Actually, development my areas kind to goal In one AI deployment. the amazing that idea streamline longest take business, for of is opportunities And from today design, and maybe can UI accelerate, front-end market come and with months. the up in market couple a and be in that in of in not especially the a actually concept months, go X to design

is need our researching the on as to market be the to operations see AI absolutely and cost your but example, product using you reduce it. team of actually But those how AI as soon to other XXXX it the top is We're to the underwriting. tools as use we're we to side. innovator in to our the out and and and And you We're We're have compliantly using we faster that AI, in KYC the our a streamline and keeps management, on how We're hand, shifting for for earnings So possible. dashboarding. to for go and calls. and in well, as into using huge will looking have transaction the because development mentioned for impact monitoring. side be market market accelerate using

Operator

over like would turn questions to closing Errez I further Ben this time. floor comments. no back are There for at now the to

Ben Errez

call. you, next their I anticipate from will like shareholder pertain you further comments next this every see our would for And for Thank attention. week. thank to we coming and in the otherwise restructure call the Thank for each And of the us note you everybody We company. on earnings Operator. that to all and time appreciate coming.

Operator

teleconference. concludes today's This

You lines disconnect for may this participation. time. Thank your at you your

Ryvyl (RVYL) 14 Nov 242024 Q3 Earnings call transcript