BTM - Earnings call transcript Q4 2023

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Operator

Good morning, and welcome to Bitcoin Depot's Fourth Quarter 2023 Conference Call. My name is [ Jaco ], and I will be your operator today.

For this call, Bitcoin Depot issued its financial results for the fourth quarter and full year ended December 31, 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 Fourth 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

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

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

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

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

Brandon Mintz

quarterly XXXX quarter growth our made share update, accomplishments excited Thank strategy and conference good progress our to you morning, last fourth Thanks, for with everyone. Alex, XXXX you our call. during and we've joining XXXX. the We're for since our

with our in Let's grew $XXX fortify with We financial revenue sustained industry-leading to million performance X% traffic to position we as XXXX. and transaction continue strength start year-over-year customer volume. our for

remain also driving a we focused XX% our business increase continued delivered of which on adjusted year-over-year demonstrates We EBITDA, scale. and profitability strength as model in the

a with of Importantly, to EBITDA this was adjusted bulk for significant active company number delivered improving kiosks XXXX. as EBITDA our additional a in placed reduced had kiosks XXXX even operating margins. while growth achieved the since and This compared not order was XXXX

entering experiences those and strong our that year, and go-to-market both and mission updating the to customers momentum our XXXX retailers. execute platforms the operations, and for marketplace masses. and are Throughout We're efficiently in These of enhancing all objectives improving continued customer growth. expanding significant say overall our value strategy, foundation Bitcoin our our supporting retail priorities to delivered strategic to on refining our bring proposition while to we securely included safely, XXXX to a the priorities and we future and pleased with in digital

the by BDCheckout while we locations. across kiosk North through Bitcoin our profitable optimizing points more XXXX, of to number continue to footprint Throughout underperforming access expand America kiosks relocating

several Food Management, across Market These Majors High's, Stores. agreements FastLane, Gas deployed fleet several and signed new include we with Stores, stores GetGo of states our and XXXX, kiosks. increased Jacksons convenience Café During brands spanning Stinker + Express,

store of a users XXXX this XXX a program which our of has over to additional program, locations variety BDCheckout our our partner no and We Bitcoin convenience expanded expand partners for solution purchase and way hardware also of the Bitcoin X which additional to states is Bitcoin to with look locations. our payment cash going app network in to register, the BDCheckout nationwide launched across at through we a We mobile users, cash processing XX,XXX Depot forward. retail for facilitate purchase convenient over

sustained to momentum The expansion the program. more service to benchmark our Bitcoin in through kiosks customers bringing as demonstrates physical continuing without states deploy innovation serve our accessibility for operational BDCheckout to and while needing this

kiosks of We for the also market BTMs market U.S. with growth and operating share industry-leading share our in due reduction maintained opportunities accelerated to our the see

this say to carrying into XXXX. After a part we that successful early the momentum XXXX, I'm pleased are of

end XXX the growing During X,XXX building our the and kiosks this Bitcoin largest retail we ordered To to of roughly part history. installed our BTM national of pipeline quarter, have to plan continue a on robust fleet in support the major as goal, XXXX, first regional installed of focus network partners. kiosks our we by and of ATMs

to of we hiring the expansion force basis First, anticipated the our in a announced new team secure QX on kiosk Depot new XXX up. of are sales over XX with Bitcoin is XXXX. locations once monthly ramped they representatives This expanded sales sales

BTM the of Second, a convenience we company's history nearly states. January with across leading national X,XXX initiative our secured stores market. install retailer second convenience reinforces the in into store XX in with placement Bitcoin position initial rollout The agreement a part master grow Depot a stores. is to placement deal kiosks in additional in This to is and larger opportunity largest the our

expansion We franchise BTMs provide designed North additional The is also as sale launched recently announced XXXX. program opportunities as we to of deployment in Sopris of program part partners to which to our franchise our the American of strategy. new qualify Capital part XX

in benefit America. for BTMs our have BTMs on suite operations. locations ATM partners over XXX franchise-owned with over software and across in kiosks from operating Bitcoin premier and X,XXX the Today, North operating BitAccess expertise software, we franchise platform installed integration Bitcoin Our Depot's

for profitability. network. ahead about and establish are numerous well growth, adoption remain we Bitcoin to positioned excited we by foundation future continue growth and ATM support summary, scale the momentum in business positioned opportunities the the crypto across seeing and are we're far to our as In the mass so encouraged as XXXX the world's increased trends well leading firmly We're

CFO, the performance over Glen floor our business provide insights will more in-depth to turn our who and I'll Now outlook. financial Glenn? into Leibowitz,

Glen Leibowitz

good Thanks, Brandon, with results full year detailed we'll with review our and everyone. guidance. I'll quarter XXXX morning, a of and start finish a fourth and on discussion

to in Fourth compared to fourth deployed quarter smaller year's year. operation as our X% in million fleet revenue compared largely QX on compared decline million optimizing a was Full X% $XXX.X prior driven maximum XXXX $XXX.X by to profitability. declined we focus approximately $XXX.X continue $XXX.X increased year-over-year for year to for revenue our to of million last kiosks the fleet the quarter. million This

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

$XX.X is kiosk. relocation full XX.X% increased and largely increased reduce rental to our XXX us gross maximizing driven while year, revenue by margin costs For profit over efforts, space fixed to which the allows per kiosk margin points to million, basis gross This growth XX.X%. retail

our as year's transaction. to quarter we will de-SPAC This were we fourth improvement from quarter On expenses expenses, and sequential third $XX.X the further was operating XXXX. attributable for basis, expenses quarter. from million compared lower anticipate $XX fourth that XX% continue XXXX declined move professional the of trend operating to million away last a from of services Total

For the the operating $XX.X and prior expenses year, million million year. full to were compared $XX.X in

public as We decline our a and process expect expenses that will from life optimize move expenses operating away for as we company. XXXX in the de-SPAC

GAAP million net loss for of XXXX the of of was XXXX. the $XXX for fourth quarter fourth compared million $X.X loss quarter net to

For net the year. cost income net income of was incurred the decline full in XXXX, in future. we $X.X the expect GAAP GAAP million income to compared driven by year, net million $X.X in This which was incur in don't prior to the

fourth the Adjusted an compared the EBITDA, a $X $XX.X fourth XXXX. EBITDA was of million XXXX adjusted to non-GAAP quarter for of measure, million of quarter for

$XX.X revenue, For margin, fourth XXXX. in Adjusted XXXX the full from in the compared adjusted prior X.X% fourth of in million the margin derived adjusted is quarter EBITDA EBITDA quarter XX% a $XX.X compared the to to X.X% million by divided to year. year, EBITDA which was increased of

X.X% year, adjusted compared was the X.X% in For year. prior to EBITDA full

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

down During plan. repurchase XXXX, Bitcoin finance Depot leases. the and pay purchased facility its stock We fourth XXX,XXX refinanced shares in to its continued term the loan under quarter

Now turning think backdrop. to to first, it's I provide our following financial helpful the outlook. market But

almost we quarter, over deployed representing kiosks, base. of X,XXX So our the installed XX% far first in

to unprecedented of the type growth, market going for short amount expansion machines our this company. a While into is new of the of time is key in our magnitude

our kiosk over to begin we customer expect see to revenue from kiosks those base, establish As growth time. a footprint

these providing to until prudent, quarterly mature. machines outlook more on a So be an are we basis

quarter said $XXX driven Having factors. on first by both conditions, current market $XXX and to is largely of the to based quarter XXXX that, quarter XXXX range time the in two expect and relative This between million million. first the fourth of we and revenue

to kiosks the XXXX start we of First, as quarter of focus mentioned in in than underperforming were we of were first continue we kiosks. quarter relocations the previously, operating as and less XXXX XXXX on of fourth

during went year January unfavorable passed the a material which has legislation this was in that had the effect revenue of on California Secondly, in into impact quarter.

operational legislator in that continue and seek engaged currently limitations in changes state. in the We the are the are actively to California place to with constructive

quarter. EBITDA retailers However, XXXX X,XXX $X the lower to incur $X growth the adjusted to our revenue drive over EBITDA kiosks XXXX. driven we focus largely These costs corresponding level for wait rent of million. range for significant deployment by Adjusted the and the to kiosk has logistic is QX million remains is and expected in will grow. revenue for deployments while between initial This to

not us in expected EBITDA future mentioned, are they in deployments As years. to immediate do an drive and improvement revenue XXXX come with these but or later

expect have in we've of and seasonality remainder QX a similar being we For what we described than revenue to as higher QX. follow with the previously, and significantly seen QX QX trend XXXX,

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

Christopher Buchanan

Glenn. Thanks,

we As on remain focused key head growth into our we XXXX, opportunities.

locations, previously while footprint kiosks to increasing the year volume. as kiosks. footprint by we consolidation underperforming to expenses profitability effort optimizing and reduces of footprint First, of mentioned, profit in more will to This aim as boost kiosk likely XXXX, will effectively significant have margins. transaction which our we which was removed focused XXXX growth relocating slow by XXXX was theme compared Brandon vast and high-traffic be XXXX optimizing our in a on majority our a

our committed operational include These forward. across enhancements BitAccess our improved customer footprint During Also, Bitcoin XXXX, remain during optimizing we services to to markups. successfully licensing growth, previous full software advantage. pricing, our growth optimized vendor to of EBITDA strengthen and software drive professional of going annual completion eliminate and fees and costs profitable will ATM adjusted our the fleet additional we drive conversion XXXX lowering competitive

additional licenses we actively to Second, expand points are our pursuing for access customers.

fourth payment processing program our BDCheckout store the across our ongoing we provider. partners of through During with expanded convenience quarter, a partnership our variety

State that second larger believe such quarter. than the state expansion Florida. during states, remains our granted, New efforts a and secure for for York hope potential license some current to if our growth to is we to our kiosks, could the and of on New as our a in even a our Texas have York We largest be license large resolution opportunity operate opportunity

be we'll additional on the placing Lastly, program. focus franchise

capital we our partnership our while also this pathway are kiosk investors as enhance our about profile with well. Sopris this further excited to very seeing reducing We program and see significant expenditures as other the joining for interest Capital, powerful a us are program on for from fleet. need We

approximately us located, offer While payment BTMs a North of America, of an of to our are we legal focus believe currently is within over as globally establish growing opportunity time. the cryptocurrency where presence a outside adoption XX% form of America North will

your our questions. continue results we momentum this happy With we In growth now heading are and that, execute and summary, Operator? year on to into delivered our to are strategy. strong well take XXXX positioned

Operator

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

Michael Colonnese

me. couple for a Just

First, you're kiosks by growth. which guiding to the nice end X,XXX of year, is really installed this

as to one deployments the how through So these balance the just that. And look I of think should of had out we about cadence follow-up the year? we

Brandon Mintz

question. Brandon. your is for Mike, Thanks, This

we're Radar as So ATM the guys ATMs, Bitcoin X,XXX listing ], kiosks. [ Bitcoin on today, might primary for of is which you directory noticed at have as already

predicted. already sales we have pretty So big I those we was we that on Obviously, much as with our that would we've we're in many kiosks well. warehouse as looking how planning ramping the of been signed say are all and in can to last see, retailer And of reps far Those the focus have earnings call, installed you up in hired year, our install. the ahead And stores. we're that schedule. XXX so transit

us we put bit were ahead looking of that originally little at. So a what

Michael Colonnese

could Got kiosk per ramp it. if follow-up, and And are kiosk right these just matured a of like installed the from online. just newly that one remind for fully revenue us coming you just the as revenue a what of installed then kiosks now looks

Brandon Mintz

Scott, do in in it me number you basis done kiosk have haven't the on for front Okay. a for I division per average front quarter of QX for... the you? to the of the have

Christopher Buchanan

some has. just in either. No. front the of it's math to me line declined QX, top similar I mean, the revenue it's as I But haven't right done

Mike. what in it's quarter it, prior see We a QX. we as in historically kiosks for those generally, to seen us which years. stronger seasonality is QX, a But different that still we've that there's than head into ramp-up from much not should So

Michael Colonnese

Got think it. ramp-up over of about And the year? of the look then should newly these those we on course installed as out in we kiosks, some the how

Brandon Mintz

that, comment Mike. can I on

including the just We we if So about QX removed kiosks XXX call. everyone for that perspective on number. include some in

over So have finish And out XXX. X,XXX. X little QX, QX we around will quarters, will have past we to installed QX, a and around somewhere over removed the

because in because it's kiosks we that couple Now ROI location. for revenue, of believe the early do on to removing going perform to it great. decline a we a kiosk, isn't installed at we keeping remove better but enough a some thousand are those revenue we're worth doing new when have a us kiosk, dollars maybe But it it's not be

where it. or So in it had let's and so that kiosks to to go we takes levels we transit, we installed get it it was weeks. removed the removed new starts kiosk. It's it about before And removing why on once no we previous in for that that's revenue location, relocating about And X weeks exceeding X And kiosk down worth then then a growing. us. for say, it and and

and of new deployments installs So machines average removals, we've with we and the kiosk lower. expect do the all that be that therefore had, the QX all relocations per brand-new will

increase over thing temporary a we of as the of kiosk the sales course is this per believe see seasonality we Now the year.

in point will to to one size be in California, impact Well, had transaction question after thing one probably significant the right out has thing come this. customer to that California. But a us $X,XXX limited out, in per that's is it on day point our per SBXXX a bill

see a average Now can impact it's we change we're if probably well. California you in board, in kiosk the per the that average going on, else to unless working as future, you're across lower include the down which near dragging because everywhere

ramp the with until combined up that, and kiosks down So more. those see will installs relocations bring we new it

grow are to to early, than and greater time. and over a brand-new more are X,XXX influx ramp that is there and of continue we kiosks kiosks rapidly more hit kiosks up if continuing But expected if we

in Now on more million a to to give versus alone. $XX just California $XX QX you bit perspective million of QX, revenue last expecting we're a from year decline little California, around

Michael Colonnese

Got it. Super color. helpful

Christopher Buchanan

last number I that QX Just is comparison of to. you think to clarify, year is where meant

Brandon Mintz

number. quarter-over-quarter That's a correct, Sorry, was yes, it Scott.

California. with Now we're legislators working in

California, really consumers, in have get a changes. We changes the negative aware have ATM terms ultimately, they Senate that these legislative in lobbyists trying with looking the House to to make on would way. were of now. impact to door in session and weren't operators the this of It's in positive these right Bitcoin it being legislators protect and In able

understand terms ability staff more And now protections our they the they're these place, a had profitable to we've of all negative that making enough be impact being in our the of have mindful change. and revenues and to in

ending is session legislative But nothing confirmed in yet. October. early However, the in is California typically

we to change QX. probably is -- going there don't be So until one, if a expect probably

Operator

of next question B. Harold Securities. the Our from comes line Riley with Goetsch

Harold Goetsch

XXX you you you XXX it I just you my month first question. on if that differently. think said sales from XXX. I or My think the to said expected the I sales wonder the call force, that's just a said question is previously force, change per That's expected

Brandon Mintz

Harold, it's Brandon.

previous answer release, that XXX. and our So over question, XXX, heard we in press to XXX said to today, you

level. bunch a for Now we X-month retailers to a new X- get is relationships, time. to expect a in Obviously, to the up time job ramp on, sign sales reps them that ramp to looking it's someone up when early to over of ultimately than like

ahead But deal sales locations earlier board retailer retailers have. our part not announced are this around on people. as these account salespeople of only said I are big year. XX large that locations, reps the signing the team year. A to The for XX if we the And across maybe this include was we new schedule XXX signed Mike, to managers, of that is we you

already are And so salespeople the have existing well really they also. doing

to wanted for that I you. So point out

Harold Goetsch

in on idea is the cost and that But that, you said as densities. the starting Okay. kind know machine? the different like in the kind can different. over the up is costs? what a costs can of just you're There's different you know a I of -- give machine? but like And like bit from logistics dead expect is build-out on cash slow every range almost for an shows call, about a time cost of start-up what per geographies, market we of cash cost And ramp. store, stop, us a builds there's deploying we

Brandon Mintz

But about new to to and lot deinstall, it the it location different a asking scenarios the you're varies. cost reinstall it? ship of there's Yes, Right. where

Harold Goetsch

a called walk that's you it It's and you're retail and before got then cash, money up retailer, you've pretty running open revenue. can it's expense you get It's it, world. like call reinstall preopening Yes, in $X like if the away -- basically, even cost. and do a spend to and

Brandon Mintz

scenarios. one our two of is say existing Well, scenario relocating I a would One there's where we're common kiosks.

Now the But bit somewhere relocating are $XXX in lot generally, $X,XXX. vary and that costs looking it we're can a a the quite between if market, at less. same we're because

process, reason some everything which a part just high it, reinstall we and so functional. aesthetics too of through mostly make why refurb very the the is to is that kiosks XXX% range is when Now sure minor testing of a those process, is go

So into they're on some for of minor older these kiosks warehouse refurb lease if side. a the

kiosk we get XXX because manufacturer, Now it's be this doesn't one kiosks mega order the need year, it's a brand-new the the and of that to not earlier It straight expensive to we from is that shipping refurb. [ placed location. any which doesn't manufacturer in example that as deinstalled. have from ], It

shipping between Now the there, looking at typically and cost install $XXX. we're around

Harold Goetsch

Cool. Okay.

Okay. California. daily And then that just on right? basically $X,XXX, Is reduced was question the last rate is high it for me the was -- to

Brandon Mintz

That's correct. Yes.

Harold Goetsch

of more purchase a in would caused Obviously, to come Transaction back time or if transaction is a $X,XXX gone And they basically around was allows have the the somebody combination It's or transaction. that per as options curtailed have X elsewhere. X moved it's to $X,XXX have it down rule bulk of just row. per has days cryptocurrencies. of to a think is transactions buy declined your like look smaller? were to counts have to the revenue are in Or That I above the price inconvenience or mix. be what's times, they well. a and still hit for a to counts could comparable activity system, changes combination people that, Are transaction then -- both.

quarters transaction have as course, pretty So lot total a brings stayed well, average then, decline cap. size Because we is the And which by size, average. steady a lower on there. of it at having $XXX, really our size than the that transaction has down median last our seen few the transaction

Christopher Buchanan

answer. on add Brandon's to Just

operators of add we've these I'd -- with dozens them there's California. we've you there in ATMs that seen thing of aware, other a as of The And lot out seen requirements other much there and operators many are Bitcoin complying smaller. and is aren't also the guys new

they complying they customers still conduct. to across it's to and noncompliant a aren't, so than that And more the we're for the to that buy can to easier others transactions go go street operator $X,XXX conduct if want just and wanted where

hard so in with that's and what working And there. it especially that's of we're California, making through part the legislators

Brandon Mintz

consequences a see operators to can unintended they to Bitcoin the bill. And of of of that in $XX,XXX, Depot is comply. go and and there's $XX,XXX, everyone not part if them assume we They're to operators customers ATM one That's going put complying on other go again. they California the Yes. to likely one these transaction, won't going $XX,XXX

So California to we're they're there's changing of going in as it trying do terms in but to the the also playing enforcement is, legislators sure bill terms an of work equal with what field. to make

Harold Goetsch

on York. is New question Last

event. a think We're it's almost QX. You QX in

us. this to So could of confidence and rate the to on of share more thing high or that's -- that have hit you maybe disclosed some so kind a a be you little XX color or days that of Because kind maybe the next kind XX confidence. days of in why happened maybe just

Brandon Mintz

to color there. Yes, more a just little bit add

executive the step told vetting the before which either ], our application to and is denial. just officer Board team committee Our [ we've some goes or approval underwent for last been

this week that time if the don't they meet. a officer information We will by will meet, complete. specific often is line the when get probably little committee of end betting a how We more bit have on

is an will have more this when like just information a at looking thing end know this time meet. this QX. if if thing that something we still we April until or June the it's answer could an We is of on committee don't on this by So have

Operator

Markets. question Pat Noble Capital McCann Our Instructions] next [Operator with comes from

Patrick McCann

answer answer New whatever move be the begin? about would point Really what from to on get that quickly, recent At that -- I the just how the it does would quickly wanted follow you York. to forward it's operations comes question do how the license, When quickly positive, it and getting up if most on there?

Brandon Mintz

This Pat. is Brandon. question, Great

et stores up things signing locations. had store of reason the of conversations so We team. things have an on additional much with who active side so the been why New quickly that York sales to for sales retailer have an we amendment do York on have a to have regardless. been already moving the thousand But have on a success New side = locations. we've cetera. add part that We are the relationships New already lining work and operate internal the we as have And side us we the have they quite we easily combine that some that terms few York contract locations. distributors existing types in ATM those sales and also and in third help [indiscernible], convenience pretty with in other largely on team well is few new in in retailers could a of are do partners just that retailers expand that These of are are acquire we distribute There footprint that products, a companies parties of those

companies hockey And comes then that, that we other those could installed for XXX were of York or think I be would said get We've within approved ATMs application York, would ramp-up kiosks for ATM from months any be license. in installed. of approved potential is our Bit that Bitcoin a a aware stick And license, a in physical were state in. being machines Bitcoin we of the so not before Depot have easily year. that approval kind I installed involved. about other get if after there starting imagine a months we're a any to after active New couple Bitcoin if to be to currently, X in have And that to New there

So on physical wide open ATM pretty it's no the Bitcoin with field playing essentially side. a competition

Patrick McCann

whatnot, think earlier Got leads my And Could decline a on about next you. the could the the landscape how into number overview But kind out you there. and mentioned And landscape. just a vary you kiosks are Well, there? the just I shaping state of I'm mentioned. is it on depending how an you sure in competitive things up actually can that question, of competitive give well about looking? talk just which bit you is as little of

Christopher Buchanan

mute. Brandon, on you're

Brandon Mintz

changes Great was question, the year, terms Bitcoin of guys. U.S. because ATMs lot in Sorry, last in market. the of total there a

of For example, low major of Radar of ATM bit. was from they're Radar. last XXXX. bankrupt operators. on guys relying that really terms due in was more radar, either I data in fall number and that or Coin a from it Bitcoin the a some ATM Coin probably of XXXX. does Coin believe year spring peak about to peak. can on verify smaller number early fed reflect XX,XXX we hit quite operators business because in it And XX,XXX from the disappearing going couple ATMs believe then the And declined the of was We you memory, that But operators And going ATM was a around the not being kiosk was range

growth And then been ATMs there of over installed today, the downwards. reduction a lot has since ATM year, big low a was has past U.S. upwards according Currently, point. there the So XX,XXX Coin Bitcoin that Radar.

really from to grown, ourselves seem operators. any other new our impacting it and to retailers? continue I have doesn't to haven't but seen sign be other competitive operators mean, We threats ability

Patrick McCann

gross dynamics over last how margins past margins year. the the Could quarter? little margin And those could play the margins you. and the question in the bit then into you driving the last kind ask about -- one charging the just what's about improvement a if Got and talk of improvement I this fees you're

Brandon Mintz

our at Yes. margin spread the or we on Well, the raised beginning what of in year. XXXX, we charge

raise past over we every have since of We the their this We all other operations Bitcoin just become teams, the large that company have to We've margins seen more to equipment. every marketing done ATM more pretty compliance do much them us have as all we operator teams, large teams, expensive and it's that's typically business. couple of since started. track year years can

on a their employees is we our of the earlier maybe part they and some a our of little done that were paying better improvement, they hourly in of lot got little raise also I And COVID our what out the vendors. but raised freaked expenses costs vendors of think expenses basically with much. too operational and A have bit terms So bit. in their armored quite to had a

post-COVID, been have it's been the And over so come to getting we've down such. easier past and as things year to for employees our a and find seen of norm vendors those more

a it's So those of lot factors. a of combination

you, One for wanted I the competitive regarding other to Pat, landscape. is point make

run more if franchise franchise So a have Radar money operational there helping to and Coin someone Bitcoin of small U.S. to operate program it's not X.X not number weren't it make and potentially smaller lot We the ATM a the us value gets looked of operators join and ago, very could because to this our the expensive more in a of at were the those same, XX% the our due think back efficiencies. kiosks, we years noticeable. display scale and and our business as business in program with ATM reduction number just about in is But

to we're wanted and we talking everyone So about to franchise excited quarter, program that's really we're why that. a out point about this very

few growth think pretty the months. have of lot over We to going it's We have next interest. a noticeable

Operator

Our with comes Mike from Grondahl the next question Securities. Northland of line

Mike Grondahl

million. was into When observe guys a bit short? up came XX, you different? November $XXX What what And ended little doing more. in guidance you million gave revenue XQ year. Just you for the the Like midpoint did $XXX digging

Christopher Buchanan

long we've ever and about, factors. one we've we removed drivers, biggest right did per of in we QX, is question, than it cause going talked because the done. couple performance that, way decision Mike. be that And XXX right? is But better get kiosks more to as as it's we most expect mean thought would revenue we did of Good over QX in term removed the A decline. I So Brandon reinstall kiosks those which we location. the Yes. to

installs competitors of as from in lot also, well. then QX And saw we a

increase there's And QX QX talked so U.S. XXXX Brandon in just number in kiosks to of the about operation been XX% the XXXX, how about in a from

much months And so than was have we also X higher rates so in expected. past installation the or that would

affected volumes. increased And competition so that also

are anticipated. the caused we those biggest of QX would revenue say that be in lower I'd originally have than to So factors two

Mike Grondahl

Got it. Basically, California And understanding then call in just reasons? those making XQ. two XXX, in year-over-year sure the why less out impact. is coming I'm kiosks QX That's differences, the XXX, you'd

Christopher Buchanan

like within March two extreme also is Yes. already better We've biggest February -- and right? Those it's had -- just the are January QX, So reasons. seen were. than substantially also seasonality, we

of starting as already driver number heading but QX. to we're lower that brand-new California into QX yes, so see installed QX. specifically And we was and well. in the issue improvement kiosks, Because biggest the many into are But going the kiosks XXX how

So those factors, QX. pretty about yes, are all are new. biggest Those the

Brandon Mintz

number decline a terms of One in also revenue. is had it of to in X% kiosks active a year-over-year, the X% look only at way look QX drop you we but if at

can look it slight kind at you year-over-year. So as of improvement a

Mike Grondahl

are feeling the high other guys, right How Got are how $XXX this about point? couple at it, mean At I XXXX? feeling it. about of million a you you there. of whole got are year level, revenues, analysts a

Brandon Mintz

the California. obviously, Well, have headwinds from we

We that still the we in front few exciting some not, are some end back hopeful, of and positive make months a get a opportunities of thing. many the at that But of year, it effective there we so though, changes make if later, can it's have us. maybe

of potential now not and York. We right we signed. even New We're our already schedule have terms with kiosk retailer count halfway installed the we're that installed large in of for ahead

business. not outside we're ahead one we immediate our in going signing And kiosks that manufacturer that our we're evaluating locations for taking schedule this franchise to reduced for on to also also purchasing a of cost other then for to of were us. we're just think We other There's past. kiosks and the pretty CapEx, about the prices. added the we're margin of terms opportunities just as profits in is less retailer, purchase than so think of outside it's to of well I well, being thing is good grow up. some program we're that's program as add large franchise going And

there. people as not a terms rep Hawaii. in X state people requirements. money might a noticed licensing And a the also evaluating sales Vermont. is which We That's of a have not growing is it on It's doesn't a state and geography. have We're And then didn't that We're another One is we're thing that was any geographies. machines expanding Puerto virtually island. we million new of untouched by well, us of into in Rico because hired lot transmitter competition huge before in population, have brand-new

York. taking we're more be we I the could large be potentially other these mentioned we're don't opportunities expansion country looking specifics very seriously those to that right New compared very, down larger but narrowing the population have international than into. could actually to We're And now. a yet, that expand even and next geographies that and

I to everything EBITDA, with would So of side in think with on headwinds of possible. be the around Because us, with terms there. I from I of have chunk front front to of think headwinds facing, impressive with us, getting think would in combined, get the guys up we to we say in the But really to are of opportunities we're it's make you it where analyst good a California. be able revenue the

Operator

next Michael line Capital comes the Our Markets. question of from with Kupinski Noble

Michael Kupinski

you are give you grow then have the what competition. your the can you've on are there for more a just I Maybe if franchising instance. bit know getting business? you up finally, differentiating wondering versus in like provide the on then opportunity. franchise the a was -- can space, us offer And huge those, And you factors that what the because wanted thoughts some for touched how are franchises And color maybe franchisees? follow limiting And the And the for franchisees? what little I you are to do factors, it. the I fast terms about competition how seems

Brandon Mintz

Great question.

competitive isn't two about in them other of the program terms of doing franchise very it. companies the on but this, So public environment, of we're really one only aware

bit offices way think the price. us, individuals seem as And get of family someone ATM Depot because companies some to fleet versus the kiosk, Bitcoin now a have well. and about ability the it's then we're have angle Bitcoin their also nice on play ATM own, interest crypto in contacting we're right approaching is operating tied on quite who a only I joining to the this without operators franchise focused depreciation that and program they kiosk for being worth high not net but to the purchases through necessarily

real the There depreciation lot type it. time. of a were But more it completely course, really comparisons depreciation be I lot it really high aspect at that estate because mining could on of a to stability, I hands think So it's these investors of place focused the they years ago. rental passive income net of still for they wave of And and Bitcoin the get the offers didn't tied were was, of [indiscernible] worth new those realize how and to think liked individuals this a and you couple and, the off.

making typically, to share run profit on we of they So float some to is and buying a about And capital or may doing us either put machine, for franchisee. the the XX% are profit. if up depending revenue we're and machine XX% someone the share the

line, it to interest incurring those kiosks. buy about were kiosk, if comes the finance we XX% XX% to But out to bottom without to having

are say, locations with the they they table their were also locations bunch where of have cash ATM And a where ATMs. relationships and some let's have of bringing operator, to the they existing, franchisees

it's to way another geographies us for as So well. expand

benefits. of number a there's So

operators. cash of the years, ATMs last services and own If to they because would is models more well, then of they they and you over take the on how profitability hardware. and a was without ATM it other to where fleet purchasing evolved as risk other followed And their XX guys incremental have this companies really they operated also provide add having could lot processing a

Operator

this the I'd our At this session. to Mintz. to concludes turn question-and-answer back call over Brandon time, like now

Brandon Mintz

call working to always. bringing on look to everyone, and joining further updates the you in providing Thanks, Bitcoin for We forward your the for masses Depot. Bitcoin everyone. interest just as in and today future, Thanks, with

Operator

you joining call. Thank for for conference us Bitcoin today Depot's

disconnect. now may You

Bitcoin Depot (BTM) 25 Mar 242023 Q4 Earnings call transcript