BTM - Earnings call transcript Q2 2023

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Operator

Good morning, and welcome to Bitcoin Depot's Second Quarter 2023 Conference Call. My name is Jordan, and I'll be your operator today.

Before this call, Bitcoin Depot issued its final results for the second quarter ended June 30, 2023, in a press release. A copy of which will be furnished in a report on Form 8-K filed with the SEC and will be available in the Investor Relations section of the company's website.

Joining us on today's call are Bitcoin Depot's CEO, Brandon Mintz; CFO, Glen Leibowitz; and COO, Scott Buchanan.

will call we questions. remarks, their open for the Following

Group Kovtun a please Before Alex Gateway proceed. will Kovtun, we begin, Mr. from make statement. brief introductory

Alex Kovtun

Great. welcome everyone, Quarter Thank Conference Good Depot's XXXX Bitcoin Second and Call. you, operator. to morning,

uncertainties. would and their some everyone of involve making may a we we're statements forward-looking and to be remind number Before management considered remarks, under like begins today formal that statements securities risks laws

of which As events we many number you of could there which that to from those and a beyond a described forward-looking are are cause in result, caution materially results control, our the factors, actual statements. differ

For disclosures the except the Exchange to Commission. more that our the in to our or relating We disclaim earnings occur events law. Securities after and any public forward-looking as and are undertaking required statements detailed the with forward-looking risks, obligation to release update assumptions made reflect see forward-looking made statements, any or statements please and date by circumstances uncertainties filings

We metrics the of identified Commission caption detailed Exchange you disclosures risks but Risk including will and and in Securities the metrics. in you refer other you circumstances, these earnings to filings uncertainties as tables our release encourage disclosures financial Factors GAAP our applicable consider and our recent and for non-GAAP well the descriptions business variable reconciliation uncertainties our carefully to, and We read filings. as as to not to and our with discuss also measures limited

at for SEC Exchange Securities Bitcoin by free visiting www.sec.gov. Depot website get may filings and You the Commission

performance for the via will IR also this section been available A our website. remind Bitcoin Investor be Depot's earnings our a call made link I made is being everyone in QX to highlighting recorded presentation that would supplemental website. has of on Relations available and replay available like

the Mintz. Brandon turn Brandon? to Bitcoin I Now call will over Depot's CEO,

Brandon Mintz

hosting combination GSR be on in an Depot's earnings exciting you Corp. company business listing everyone. Acquisition call early first to Meteora moment public Thanks, as for with us good It's II morning, Nasdaq July. our a for Alex, the and and Bitcoin closing after

more Before our and way are with started to operator start secure, in difficulty few introduce inspired I users. those ultimately briefly Bitcoin U.S. a started XX the Bitcoin I to few the years experience XXXX who from to approximately XX frustrating footprint new buy to over still Bitcoin in largest with have didn't supporting the with across of X X,XXX have Bitcoin. XX,XXX The for in another America recent monthly some machines after North Bitcoin you kiosk We story. ATM expanded after that an locations was sharing cash approximately ultimately which Depot I the quicker and Canadian bitcoin highlights, our was me purchasing last and become Depot. provinces, company online easier, found states exchange. weeks, just I want to a extremely my and having company active

to transaction footprint. solution. of completed no X.X billion which do We our we hardware these our volume our and simple. We bring add as Bitcoin users name-brand to $X.X our Our Since Bitcoin masses. by grow figures of continue the convert offering, this through at locations to cash we mission transactions, thousands is BDCheckout retail aim or XXXX, is total allowing million to have to over expand kiosks

transfer are say to support purchase of the it purchases our population our and talk purchasing they economy online use Let data, users in We be very products or our Bitcoin underbanked and X/X money to to primarily for cash-based me they that the remittances. survey convenient ways. Bitcoin. now use and users why about According able to about

bank have This or the don't accounts, So accounts just base from really many online exchange. limits Bitcoin customer not shows ability users to an Bitcoin of online than choose an purchase which for exchange. to bank have is different our very that that their either of Depot

We in check smartphones use underbanked have unbanked out cards, all go needs. the of know But money financial manage to complete now segment in services remitters pay alternative using as cash population can economy Bitcoin. such many times services services those nearly users physically transactions kiosks, from bill and that financial to prepaid efficiently to cashing or their people this

offer text support e-mail, that respond over customer is over amazing very quick and phone also We or chat. to calls

many industry more and experience Bitcoin. personalized purchase to So quick other we a options provide than really

very for our kiosks Bitcoin process have users minutes. purchased will in through to purchasing simple or The is Bitcoin BDCheckout access and their program

they because wallet locations, which their Bitcoin QR kiosk completely and only our Bitcoin their at user then custody users the user's immediately. their code KYC self-custodial, app within complete of their or their verification, to to maintain recommend don't we user it the Depot using funds this Bitcoin course, another wallet, wallet of Bitcoin means scan Bitcoin. wallet receive For the the Bitcoin app choice, of access is cash Depot wallet insert will from has We,

and KYC BDCheckout app. process our code on and convert Bitcoin an verification, in app scan generate the register, buy their order also Bitcoin first straightforward. at to for app, cash Bitcoin, over The to Depot is download then really the a hand mobile Users place it complete bar wallet

size increased customer meaningful as XXXX, rapidly our transaction well. has engagement seen quite We've since median and

in kiosks which quarter, time customers volume. the to size ramp We to $XXX, the second XXXX. continue volume as an the XX% transaction second generate During over additional and see attract quarter of compared is increase they up median is typically our

increase of quarter, to translated also revenue quarterly the very XX% compared million has from volumes our second as operation, from for analysis, and growth continue delivered have an record year quarter accelerated is deployments $XXX.X trend kiosks first kiosk revenue new our see engagement relocated in as strong revenue we we This we the that cohort From well. found to at the transaction this with a in second XXXX. to

Importantly, at share. to our maintain industry-leading XX%, we continue market

attracted broader the digital are Bitcoin to financial and entryway user an into experience as ecosystem. Customers the accessibility of ATMs

convenient in partnerships existing including located major locations major retailers. are kiosks the national country retailers across through with and XX regional Our

agreement operating largest Circle with retail stores. But roughly Circle grow with XX,XXX stores room in in within K their to where there's K, lot of close we're to this is X,XXX retailer. Our of globally, a

and access locations most payment kiosks. kiosks and are located our to counter is a retail in locations it We BDCheckout way kiosk U.S. addition the also a purchase quickest aggregate, to most offer BDCheckout our allows participating efficient XX% access to global with a program. our Ultimately, without this largest across us become deploying to through Bitcoin partnership at service In supplier, footprint, our possible. approximately the allowed consumers we at network retail of the over today. leading points codes X,XXX through purchase right points ZIP Bitcoin to with and trusted, goal In population the our addressing physical of cash expand

Our very current strong. expansion of remains opportunities pipeline

the Over opportunities several about expanded convenience are world's our growth to brands with support adoption mass ATM as months, last excited additional partnerships crypto numerous into the announced multiple we've BDCheckout ahead leading Bitcoin X and network. the We're well store positioned program states. and recently

Leibowitz, CFO, Glen? update over to you financial turn and business our on to performance Glen our now things I'll outlook.

Glen Leibowitz

the to Revenue $XXX.X acquisition. XXXX transaction increased XXXX. The quarter for attributable the customer was $XXX.X million to higher and of morning, second everyone. Thanks, Brandon, for size to compared million good XX% of second increase and quarter

to of Gross Gross to million compared in quarter X% profit XXXX. for for second XXXX the XXXX compared $XX.X XXXX. the margin to increased quarter second quarter of the XX% of second quarter second $XX of XX% the million was in

quarter a quarter to million in of profit, measure, to the XXXX. non-GAAP the second quarter XXXX XXXX. of XX% the the in XX% gross XXXX second XX% quarter compared Adjusted Adjusted gross increased million $XX.X second for of for to compared was $XX.X of margin second

the to in of and XXXX operating quarter and $X.X expenses expenses. million amortization depreciation million $XX.X for were $XX.X Turning included costs which selling, general in million, and total other administrative second

licensing saved quarter revenue. during For of our million period, equals $XX expenses fees the year second We the operating comparable BitAccess, million. $X our through of X% ago in the approximately about software were which acquisition

Turning to net loss.

million a quarter $X.X XXXX. income loss for second of XXXX net million quarter GAAP net the of of Our $X.X second was for of the to compared loss

Adjusted EBITDA, in second second increased of quarter the for XXXX $XX.X of X% of EBITDA XXXX second XX% adjusted non-GAAP of EBITDA compared quarter to an higher in to quarter second improvement the XXXX. the by of margin measure, million was quarter a was and compared driven to for margins. Adjusted an XXXX. in improvement $XX the XX% million The revenue

million with on cash our approximately ended equivalents balance million second the sheet, $XX and cash in $XX quarter Lastly, debt. of and we

debt our our of Xx we to business net are part in less and the reduced completion than now debt of half have EBITDA. combination, As

guidance, million in XXXX. July. our unchanged is to to release to which compared introduced XX% in Based year the of market expect million current from we is conditions, we to for improvement $XXX press range on our $XXX Turning XXXX revenue QX in from which million, an what X% results to preliminary full revenue $XXX

adjusted XX% We million, XX% in $XX representing EBITDA increase of year-over-year. expect adjusted $XX a EBITDA in to million range to the

our That growth it our financial Buchanan, Scott? summary. completes COO, my over Scott to I'll discuss pass strategy. to

Christopher Buchanan

with relocation continue customer opportunities of X We're focused in kiosks kiosks, second and while customers higher quarter our we which Thanks, First, growth traffic, acquisition about continues driving reduce in new to expenses expanded through profitability are locations Glen. our are lower customer driving rent higher XX,XXX new of and the on to our We've volumes. ahead to priorities: the which transaction excited main improve XXXX. the to resulted

fleet continue we the any XXXX. same incremental as deployed to revenue since see kiosks we kiosks growth Importantly, haven't of

pricing to margins. and the enhancing continue our for We focus also enhance vendor markup to on customers optimizing

are part we expanding continuing pursue BDCheckout to compliance and as licenses of initiatives. additional Second, our

of During year. on money the licenses during added second transmitter are and second more the state half adding several we the quarter, focused

of for untapped. is the we and are virtually M&A. industry-leading We U.S. XX% opportunity think ATMs particularly market to our Bitcoin international explore there's enormous in share. About in market the and Third, the continue consolidation, world Canada all considering market

So years, opportunity strong the coming to well. we for expand a us America there's of as think outside in

had and half of head summary, the we're second of we into results record growth we In the and as several proud accelerating year. milestones

Operator

comes Our Instructions] from [Operator Mike first Colonnese the H.C. from line Wainwright. question of

Michael Colonnese

as quarter company. the a listing first Congrats your and public on

So established industry itself Bitcoin an as leader. Depot has

So just defend you attribute view, your going you you gives in position this forward. wondering, market-leading do what to your and confidence can what

Brandon Mintz

you. Thank

and a possibly would proven market-leading maintain accomplished forward, much Moving we we as to many already things arguably ourselves position through try we've that as on. can

of all the to ability of just conduct One our kiosks our secure M&A that some be saved of in a retail And of for also XXXX million and very BitAccess largest world. integrating our us dollars with retailers those few relationships Also, annually. activities, the a the purchase to ability large our X,XXX and have would a our years example, access we could X,XXX to which software, ability over in And just to to to acquisition a won but stock and the with company capital, same just of ago, now year more for scale in A very also for quickly. kiosks being in we acquiring nearly partnerships. XXXX. now, lot couple use public we talent year,

So forward in our factors with most any company versus and Bitcoin believe and share opportunities we moving combined us at of will competitors. nearly industry-leading be our of we the of the that those market leading XX%, have front all ATM

Michael Colonnese

for And second Great. one Great. me.

adjusted into the went and can drivers at XXXX the that you be and assumptions some If we looking informing should your revenue guidance KPIs and revenue highlight you. for of primary EBITDA underlying for

Christopher Buchanan

the also so of And incremental number profit we're Mike, you by important out biggest volume size by taking rise, -- is kiosks transaction as Yes. the operation. us getting the divided customer. of per our our -- each focus is then average because our I total thing we more for see would in on which see that kiosk, our revenue in filings can median the

we that acquisition, then quarters. disclosed can also grow continue most see as to new how recent this well. which customer have You And much past few the grow see lastly, that's in we over to continued as filing

Operator

comes from Kupinski Markets. line Michael of next Your Capital the from question NOBLE

Michael Kupinski

are next Congratulations in terms about on partners? the couple your in costs A margin that the guide? terms a give we embedded of being kiosks forward there? you your guide, can might that. company a that new press in of can kind the you that are of be retail public targets of significant I mentioned little some questions: us release that also, then company you that of comment public about would there EBITDA associated if about And how talk on number also, Anything pipeline? assume will Could look embedded You impact thoughts guidance, of terms well. your expense bit some then should on a And in what with in Is your be? as in the being quarter? and in

Brandon Mintz

Thanks, our activity of operating make we're to Michael, year, this you any guidance now of I do not what contracts for and acquires our beyond our allow have be we for deployed to that a in we that roughly all the our kiosks for this would prepared whenever we in today. guidance right the that kiosks. company, that those sales kiosks or is have that note been additional XXX-plus team want warehouse Related do some retailer just to organic question. of all have additions operating have operating deployment

there your color answer portion I'll And a D&O little well. company shed is of let to of Scott that second large in that, but public guidance the more bit question, as costs our are embedded a part this on insurance.

Christopher Buchanan

Yes. company SEC just have to provided into millions D&O But that baked stuff, also of the of there's costs audit and of KPMG the with that's prior for incremental it's forecast we the into sure didn't we public costs and that now type dollars. biggest the being involved and that all multiple legal And since is public then the in market. and our filings piece

Michael Kupinski

surging been roughly seen have I was we've price that correlated anything different, year-to-date. the surging. that noticed And any or Bitcoin, XX% business if Bitcoin wondering given believe had historically stated that you or Bitcoin of I you. nonetheless, transaction Got trends customer in the profile the with you not fact volumes that's changed

Brandon Mintz

So been pretty have far, trends similar.

multiple You any now correlation have and does have our transaction few noticed still it not has Depot's to quarters, for been sort quite over so probably median a business. to $XXX Bitcoin appear months operating of size

Michael Kupinski

the just the fact it because Has changed profile of been seen -- all demographic, instance? different that for customer at customer a has rising? And of have you it's profile the

Brandon Mintz

profile year. No, Bitcoin this we the haven't increase any price difference noticed of from

Operator

Your from Dede the H.C. next line Kevin Wainwright. from comes question of

Kevin Dede

what's in line? expansion you little licenses What proposed bit the time I'd and to looking at? your guess just you a like Where I York U.S. dial other BitLicense? New on are on within strategic are thinking transmitter And your money

Brandon Mintz

Thanks, Kevin.

has no there been On us. is the New York BitLicense, time provided to line that

a in are get amount coming at if to until would time we approval of been terms from able years years We on have process. to seen, in but up Typically, being told we've receive receive a we we that X would specific there's what few it approval does license, no all. be take of

would a to we as state money And that operating transmitter on may risk state it determine our is answer, licenses go, the operating continue the their license we're any will without to see if to we in, that other as transmitter typically, license our license determined every due be for based because depending do own diligence as necessary. on required. decide process it's as far a money contact not And or is tolerance, get well

states transmitter I money licenses. additional risk more that can and has typically, not grown licenses New year. the do XX likely Hawaii. get handful with XX a have And money say that today we're York our in to of over transmitter we we over than today, operate by tolerance, and past number But outside

it's to to answer related that not a In effort, your there. appear expand question? terms it be license sales of matter for a Hawaii, just us and of does Does

Kevin Dede

Brandon. Yes. I appreciate it, Fair enough.

Circle you how previous got a that retail of could putting K. you've are touched you else emphasis think strategic one Where and great else with you to it? relationships. Obviously, Who go? think talk do can on I question a on much

Brandon Mintz

the we higher-performing an always strong specific us. for and very there continue additional grocery it's relocate kiosks store we're for actively the a do convenience have that not we focus of locations. Well, time. building focus able buying to and up names, name not been Even And retailer quite we area I'm some it's kiosks, important are pipeline but if to on segment. at to moment, do

look of grocery slower you have of the ATM retailers the operators smaller do XX on quickly have at early move convenience store. larger store in Bitcoin them going still, if convenience And ATMs provider. to move say, and new with the the store grocery just let's in majority more tolerance the not the to a any space, top, able are be industry, allow Most and product. to like Bitcoin their It's companies

of of lot opportunity able the U.S. abundant the be of expand there's top because with to those retailers. And there to amount large Canada in ATMs to not an Bitcoin supply of some just so in and there's retailers a

Kevin Dede

of at cross-section what's some Can U.S.-international? U.S.-centric Bitcoin Depot of allowed? that have a has we a the look transfers between you Do and what's breakdown

Brandon Mintz

some Just clarification, of what talking about? you transfers to get are type

Kevin Dede

right? just Bitcoin that they where goes. your Access can so and just transferred transfer had you And it's it, was you how customers to like view if it wondering a I Well, referenced

Brandon Mintz

in terms are Bitcoin Bitcoin functions, us. users purchasing how from of So those Depot just actually

on what purchase you you for are you're that's asking, it's portion you're is what asked using using if think the breakdowns. those on or somewhere either data around We internationally. that data, domestically users, Bitcoin have from our transfer after for Bitcoin the your we survey don't a say XX% it specific they're question money large what referencing I in And of us. just

Kevin Dede

Understood.

Okay. Yes, Brandon. was that's going, exactly where I

Operator

question. his next Dobson the is of Capital has Mr. Brian line your Brian, line from [Operator It question live. comes from withdrew Markets. Instructions] Chardan Dobson The seems

to the over further to Mintz. I'd at no turn now call like back this Brandon questions are There time.

Brandon Mintz

interest in questions. call and read section going for to really technical note was and difficulties, the technical everyone, your he that to. was due your I that not COO, to a Scott we want company able appreciate some and joining and the We was the did have today. also time difficulties, there you, Thank Buchanan, our to

see So section, you, print. to Thank please if just his like read transcript everyone. official in you would the

Operator

That concludes today's conference.

You disconnect. may now

Bitcoin Depot (BTM) 14 Aug 232023 Q2 Earnings call transcript