Usio(US:USIO)2021-08-13 18:17Financial Data and Key Metrics Changes - Revenues for Q2 2021 increased by 119% to $15.2 million, with ACH revenues up 125% [9][30] - Adjusted EBITDA for the quarter was $1.3 million, marking the third consecutive quarter of positive adjusted EBITDA [9][35] - Operating cash flow increased the cash balance by $1.3 million to $5.6 million at June 30, 2021 [10][38] - Year-to-date revenues reached $28.7 million, up 95% from the prior year [39] Business Line Data and Key Metrics Changes - ACH processing volumes reached a record of $2.73 billion, with ACH revenues up 125% and transaction volumes increasing by 155% [11][31] - Card processing revenues increased by 43%, with transaction volumes doubling year-over-year [32][43] - Prepaid load volume was up 65%, with revenues increasing by 82% [17][22] - Output solutions revenue was $3.6 million, exceeding initial expectations from the IMS acquisition [12][31] Market Data and Key Metrics Changes - The cryptocurrency market has significantly influenced ACH growth, with expectations of continued growth despite a recent slowdown [14][62] - The company anticipates ACH transactions to grow over 70% year-over-year [14][21] - The card segment is projected to exceed $1 billion in processing volume for the first time [43][93] Company Strategy and Development Direction - The company is focused on innovative technology and multi-channel distribution strategies to fuel growth [12] - A partnership with Voyager Digital was announced to enable merchants to accept payments in cryptocurrencies [12][51] - The company aims to leverage its strong relationships with government and nonprofit clients to expand its prepaid services [25][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth across all business lines, with a focus on the recovery of the economy and the cryptocurrency market [21][95] - The company raised its revenue guidance for the year to a range of $56 million to $59 million, reflecting strong performance in the first half [10][101] - Management acknowledged potential risks related to the ongoing COVID-19 pandemic and its impact on the economy [7][53] Other Important Information - The company reported a GAAP net income of $220,000 for the quarter, compared to a net loss of $1.3 million in the same quarter last year [37] - The company remains in a strong financial position with cash and cash equivalents totaling $5.6 million [38] Q&A Session Summary Question: What drove the ACH growth this quarter? - Management indicated that ACH growth was significantly influenced by the cryptocurrency market and a return to normalcy for certain customers [56][62] Question: How does the company view the impact of cryptocurrency on margins? - Management confirmed that while ACH is a major contributor to margins, they expect to exceed last year's average gross margins of 23% [58] Question: Can you quantify how much of ACH growth was from crypto? - Management did not provide a specific number but confirmed that ACH growth was driven by cryptocurrency and fintech lending [77] Question: How is the company handling tax implications related to cryptocurrency transactions? - Management stated that the company would not be involved in the taxation of cryptocurrency transactions, leaving that to the users and regulatory bodies [78] Question: What is the outlook for prepaid services as COVID-related revenues wind down? - Management noted that while there may be some breakage revenues, they expect a steady state moving forward as new programs are implemented [75] Question: Can you clarify the revenue projections for Output Solutions? - Management confirmed that they expect to exceed the original projections of $13 million in revenues for Output Solutions this year [104]