Ryvyl (US:RVYL)2024-05-15 02:24Financial Data and Key Metrics Changes - Revenue increased by 49% to $16.8 million in Q1 2024, compared to $11.3 million in Q1 2023, driven by growth in acquired businesses and expansion of the independent sales organization [5][111] - Adjusted EBITDA was negative $0.8 million in Q1 2024, an improvement from negative $3.0 million in Q1 2023 [115] - Cash and restricted cash balance was $88.2 million as of March 31, 2024, with unrestricted cash at $10.5 million [6] Business Line Data and Key Metrics Changes - North America revenue increased by 10% to $9.7 million in Q1 2024 compared to Q1 2023, while international revenue surged by 185% to $7.1 million [17] - Processing volume across all channels reached $994 million in Q1 2024, a 76% increase from Q1 2023 [19][111] - North American merchant services processed $239 million in Q1 2024, down 33% from Q4 2023 and 21% year-over-year, attributed to reduced processing volume in high-risk verticals [19] Market Data and Key Metrics Changes - International segment processing volume increased by 28% to $755 million in Q1 2024 compared to Q4 2023 [117] - The company is focusing on expanding its international business, particularly in the EU, where it has seen significant growth [15][20] Company Strategy and Development Direction - The company is transitioning from terminal-based processing to mobile app-based processing to enhance customer engagement and retention [3][19] - Strategic priority includes expanding international business and leveraging partnerships, such as the integration with ACI Worldwide for improved payment solutions [12][112] - The company aims to diversify revenue streams through new verticals and the PayFac-as-a-service model [29][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the North American market due to regulatory changes affecting high-risk verticals but remains optimistic about recovery in the second half of 2024 [24][27] - The company expects processing volume in Q2 2024 to be between $850 million and $900 million, lower than Q1 due to compliance issues [27] - Management anticipates adjusted EBITDA to be positive in the second half of 2024, with a full-year target of $1 million to $5 million [31] Other Important Information - The company has repatriated $7.5 million from Europe to support US capital resources [6] - The integration of Visa Direct is complete, allowing the company to leverage the Visa network for transactions in 80 countries [10][15] Q&A Session Summary Question: How did revenue trend in Q1 and what is being done to rebuild momentum? - Management indicated that Q1 was affected by technology and banking compliance changes, impacting high-risk verticals, but expects momentum to rebuild in Q2 and stronger growth in Q3 [24][47] Question: Are you comfortable with liquidity to sustain profitability? - Management canceled a proposed equity raise due to unattractive terms and opted to repatriate cash from Europe instead, which has been profitable [25] Question: What are the top three sources of revenue? - The top three sources are merchant acquiring service revenue, banking IT service revenue, and new verticals including anticipated licensing revenue from PayFac-as-a-service [55] Question: How does the company measure success and what trends are expected in 2024? - Key performance indicators include total transaction volume, operating margins, and revenue growth, with expectations of 67% volume growth in 2024 [37][38]