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BM Technologies(BMTX) - 2024 Q2 - Quarterly Report
BMTXBM Technologies(BMTX)2024-08-14 21:11
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Financial Performance - For the three months ended June 30, 2024, the net loss increased to 4.8million,comparedtoanetlossof4.8 million, compared to a net loss of 4.4 million for the same period in 2023, reflecting an increase of 0.4million[117].−OperatingrevenuesforQ22024decreasedby0.4 million [117]. - Operating revenues for Q2 2024 decreased by 0.1 million, or 1%, totaling 12.5million,whileoperatingexpensesdecreasedby12.5 million, while operating expenses decreased by 0.5 million, or 3%, totaling 17.2million[117].−ThelossfromoperationsforQ22024was17.2 million [117]. - The loss from operations for Q2 2024 was 4.7 million, which is a decrease of 0.4millioncomparedtothelossof0.4 million compared to the loss of 5.0 million in Q2 2023 [117]. - The company reported a loss before income tax expense of 4.8millionforQ22024,anincreaseof4.8 million for Q2 2024, an increase of 0.4 million from the loss of 4.4millioninQ22023[117].−ForthesixmonthsendedJune30,2024,netlossdecreasedby4.4 million in Q2 2023 [117]. - For the six months ended June 30, 2024, net loss decreased by 5.3 million to 4.1millioncomparedtothesameperiodin2023[120].−Basicanddilutedearnings(loss)percommonshareimprovedto4.1 million compared to the same period in 2023 [120]. - Basic and diluted earnings (loss) per common share improved to (0.35) for the six months ended June 30, 2024, compared to (0.81)inthesameperiodof2023[120].RevenueandExpenses−Operatingrevenuesincreasedby(0.81) in the same period of 2023 [120]. Revenue and Expenses - Operating revenues increased by 2.7 million, or 10%, to 28.7millionforthesixmonthsendedJune30,2024[122].−Operatingexpensesdecreasedby28.7 million for the six months ended June 30, 2024 [122]. - Operating expenses decreased by 4.7 million, or 13%, to 32.7millionforthesixmonthsendedJune30,2024,includingone−timecostsof32.7 million for the six months ended June 30, 2024, including one-time costs of 1.6 million related to NextGen implementation [126]. - Interchange and card revenue increased by 1.3million,or291.3 million, or 29%, to 5.7 million for the six months ended June 30, 2024 [122]. - Servicing fees increased by 1.5million,or111.5 million, or 11%, to 15.8 million for the six months ended June 30, 2024 [122]. - Total operating revenues decreased by 0.1million,or10.1 million, or 1%, to 12.5 million for the three months ended June 30, 2024, primarily due to a decrease in servicing fees [121]. Cash Flow and Liquidity - Net cash provided by operating activities increased to 1,656,000forthesixmonthsendedJune30,2024,comparedtoanetcashusedof1,656,000 for the six months ended June 30, 2024, compared to a net cash used of (4,064,000) for the same period in 2023, representing a change of 5,720,000[131].−Theincreaseinnetcashfromoperatingactivitieswasprimarilydrivenbya5,720,000 [131]. - The increase in net cash from operating activities was primarily driven by a 5.3 million increase in net income and a 3.4millionincreasefromprepaidandotherassets[132].−Cashusedininvestingactivitiesincreasedby3.4 million increase from prepaid and other assets [132]. - Cash used in investing activities increased by 0.2 million to (3,254,000)forthesixmonthsendedJune30,2024,primarilyduetoincreaseddevelopmentofinternalusesoftware[133].−Cashusedinfinancingactivitiesdecreasedby(3,254,000) for the six months ended June 30, 2024, primarily due to increased development of internal use software [133]. - Cash used in financing activities decreased by 2.2 million to (233,000)forthesixmonthsendedJune30,2024,mainlyduetolargertaxpaymentsrelatedtoshare−basedcompensationawards[133].−Cashandcashequivalentsdecreasedto(233,000) for the six months ended June 30, 2024, mainly due to larger tax payments related to share-based compensation awards [133]. - Cash and cash equivalents decreased to 12.5 million at June 30, 2024, from 14.3millionatDecember31,2023[128].−Managementbelievestherearesufficientfundsavailabletosupportongoingbusinessoperationsforatleastthenext12months,projectingliquidityof14.3 million at December 31, 2023 [128]. - Management believes there are sufficient funds available to support ongoing business operations for at least the next 12 months, projecting liquidity of 16.7 million at August 14, 2025 [130]. Accounting and Regulatory Matters - The company is evaluating the impact of new accounting standards that will be effective for annual periods beginning after December 15, 2024 [112]. - The company's effective tax rate was 0.0% for the three months ended June 30, 2024, and (0.4)% for the six months ended June 30, 2024 [127]. - The company does not hold a bank charter and is not subject to direct banking regulation, operating instead as a service provider to partner banks [108]. Customer and Credit Risk - BMTX's primary revenue sources include interchange and card revenue, servicing fees, account fees, and university fees, driven by customer activity [106]. - At June 30, 2024, Customers Bank accounted for 0% of total accounts receivable, down from 16% at December 31, 2023 [134]. - FCB accounted for 46% of total accounts receivable at June 30, 2024, compared to 2% at December 31, 2023 [134]. - A BaaS partner accounted for 20% of total accounts receivable at June 30, 2024, down from 48% at December 31, 2023 [134]. - MasterCard accounted for 19% of total accounts receivable at June 30, 2024, slightly down from 21% at December 31, 2023 [135]. - The company has not experienced losses on cash accounts held with Customers Bank, which may exceed the FDIC coverage limit of $250,000 [135]. - Management believes that the credit risk associated with deposits at Customers Bank is not significant [135].