Company Overview - The Company serves over 2,000 clients across multiple industries and geographies, focusing on digital transformation and improving market-wide liquidity [138]. - As of March 31, 2024, the Company had approximately 1,500 employees across 16 countries, with 175 part-time employees [143]. Financial Performance - For the three months ended March 31, 2024, the Company reported a net loss of $2,208,000, compared to a net loss of $2,506,000 for the same period in 2023 [154]. - Adjusted EBITDA for the three months ended March 31, 2024, was $1,831,000, down from $2,391,000 in the same period of 2023 [154]. - For the three months ended March 31, 2024, net revenue decreased by $2.4 million, or 5.7%, to $40.4 million compared to $42.8 million for the same period in 2023 [168]. - The Bills & Payments segment generated $28.9 million in revenue, a decline of $4.7 million, or 14.0%, primarily due to project completions and lower volumes [169]. - The Technology segment saw an increase in revenue by $2.3 million, or 24.3%, reaching $11.5 million, driven by higher software license sales and technology services [170]. - Total cost of revenue decreased by $2.9 million, or 8.8%, to $30.4 million, with a 10.6% decline on a constant currency basis [171]. - Selling, general and administrative expenses decreased by $0.5 million, or 5.6%, to $7.9 million, remaining at 19.7% of revenue [175]. - Net cash used in operating activities improved to $3.6 million for the three months ended March 31, 2024, compared to $4.7 million in the same period of 2023 [190]. - Foreign exchange losses were $0.8 million for the three months ended March 31, 2024, compared to $0.3 million for the same period in 2023 [181]. - The company had a net loss of $2.2 million for the three months ended March 31, 2024, compared to a net loss of $2.5 million for the same period in 2023 [166]. Revenue Sources - The primary source of revenue comes from transactions processed, with additional revenue from recurring software licenses and professional services [142]. - The Company’s revenue is analyzed by comparing actual monthly revenue to internal projections and prior periods to assess performance [149]. - The Bills & Payments segment focuses on optimizing bill and payment processing, while the Technology segment emphasizes software licenses and related services [145][146]. Debt and Financing - As of March 31, 2024, total debt increased by $0.6 million, primarily due to an increase in the outstanding amount under the Revolving Working Capital Loan Facility [186]. - The Company factored accounts receivable invoices totaling approximately $8.8 million during the three months ended March 31, 2024, under the Amended Factoring Agreement [199]. - The Company incurred a loss on the sale of accounts receivables totaling approximately $0.2 million for the same period, which is included in selling, general and administrative expenses [199][201]. - As of March 31, 2024, the outstanding balance of the Term Loan A Facility, Term Loan B Facility, and Revolving Credit Facility was approximately $1.7 million, $0.3 million, and $6.3 million, respectively [202]. - The Company had $11.3 million in outstanding principal balance and less than $0.1 million available for additional borrowings under the Revolving Credit Facilities as of March 31, 2024 [210]. - The 2022 Committed Facility Agreement had an outstanding balance of $1.5 million as of March 31, 2024 [211]. - The Company is in compliance with all affirmative and negative covenants under the 2019 Credit Agreement and the 2022 Committed Facility Agreement as of March 31, 2024 [213]. Strategic Initiatives - The Company approved a restructuring plan in Q4 2023 to realign its business and strategic priorities, which includes rightsizing its workforce [215]. - The Company may explore strategic transactions, including joint ventures and acquisitions, which may require additional financing [218]. - The Company is classified as an "emerging growth company" and has elected to take advantage of the extended transition period for new financial accounting standards [221]. Business Developments - The Business Combination was completed on November 30, 2023, with shares trading on the Nasdaq under the ticker "XBP" [144]. - The Company has rolled out a suite of Work From Anywhere applications to support remote work in response to the COVID-19 pandemic [142]. - The Company utilizes non-GAAP financial measures such as EBITDA and Adjusted EBITDA to evaluate core operating performance and trends [151].
XBP Europe (XBP) - 2024 Q1 - Quarterly Report