Yahoo Finance Ryvyl Inc (RVYL) Q1 2024 Earnings Call Transcript Highlights: Soaring International Revenues ...
Revenue: Increased 49% to $16.8 million in Q1 2024 from $11.3 million in Q1 2023.
Net Income: Adjusted EBITDA improved to negative $0.8 million in Q1 2024 from negative $3.0 million in Q1 2023.
Processing Volumes: Grew to $994 million in Q1 2024, up 5% sequentially and 76% year-over-year.
North America Revenue: Increased 10% to $9.7 million in Q1 2024.
International Revenue: Jumped 185% to $7.1 million in Q1 2024.
Cost of Revenue: Rose to $9.7 million in Q1 2024 from $6.2 million in Q1 2023, due to higher processing fees and commissions.
Operating Expenses: Slightly increased to $8.9 million in Q1 2024 from $8.8 million in Q1 2023.
Cash and Restricted Cash Balance: Totalled $88.2 million as of March 31, 2024.
Unrestricted Cash: Was $10.5 million as of March 31, 2024.
Working Capital: Reported at $3.2 million as of March 31, 2024.
Release Date: May 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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 in the EU.
International revenue grew by 185% in Q1 2024 compared to the same period last year, highlighting strong international market performance.
Processing volumes grew by 5% sequentially to $994 million in Q1 2024, with international segment volumes increasing by 28%.
Successful integration with Visa Direct and ACI Worldwide, enhancing payment solutions and expected to create new revenue streams.
Significant reduction in interest expenses and accretion of debt discount, contributing to better financial management and reduced other expenses.
Negative Points
Sequential revenue decline in North America due to near-term issues affecting the business, including regulatory changes and banking partner transitions.
Operating expenses remained high at $8.9 million, nearly unchanged from $8.8 million in Q1 2023, indicating potential inefficiencies.
Adjusted EBITDA was negative $0.8 million in Q1 2024, although improved from negative $3.0 million in Q1 2023, still indicates profitability challenges.
North American merchant services business processed volumes 33% lower than the previous quarter, highlighting significant drops in high-risk verticals.
Projected Q2 2024 processing volume and revenue expected to decrease due to ongoing compliance and regulatory challenges in the US.
Q & A Highlights
Q: Why are you confident that you'll be able to double the revenues in the second half of 2024 compared to the first half? A: Fredi Nisan, CEO of Ryvyl Inc, expressed confidence in doubling revenues due to strong momentum in Europe, the introduction of PayFac as a service solution and licensing model in Europe and the US, and the integration with ACI Worldwide. Additionally, the recent completion of Visa Direct integration is expected to enhance revenue streams by enabling international transactions in over 80 countries.
Q: How did revenue trend in Q1 and what is being done to rebuild momentum? A: Min Wei, COO of Ryvyl Inc, noted that Q1 revenue was impacted by changes in technology and banking compliance, particularly in the US. The company is diversifying into new verticals and monetizing its Platform as a Service licensing business to rebuild momentum. Adjusted EBITDA for the second half is expected to be positive, with full-year projections in the range of $1 million to $5 million.
Q: Are you comfortable with your current liquidity to sustain the path to profitability? A: George Oliva, CFO of Ryvyl Inc, addressed liquidity concerns by noting the cancellation of a planned equity raise due to unfavorable terms. Instead, the company has repatriated $7.5 million from Europe to support US operations. Discussions are ongoing to extend the maturity of a note due in April 2025 to manage liquidity effectively.
Q: What are the most important key performance indicators for Ryvyl, and how do you measure success? A: Ben Errez, Chairman of Ryvyl Inc, highlighted total volume of transactions, operating margins, and revenue growth as key performance indicators. The company aims for a 67% volume growth in 2024 and maintains high operating margins despite rapid growth.
Q: What are the top three sources of revenue growth for Ryvyl? A: Min Wei outlined the top revenue sources as merchant acquiring service revenue, banking IT service revenue, and revenues from new verticals and licensing revenue from PayFac as a service. The company is focusing on these areas to drive growth in the second half of the year.
Q: How is Ryvyl managing the regulatory changes affecting the business? A: Ben Errez discussed navigating an ecosystem influenced by various contributors and perceptions of risk. The company is adapting to more secure and transparent technologies, such as mobile app-based payment processing, and complying with new regulations to ensure sustainable growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
