Bitcoin Depot Inc. Q1 FY2024 earnings call

• Focused on growing kiosk network, with over 2,000 new retail locations signed year-to-date and on track to reach 8,000 installed BTMs by year-end 2024. Purchased over 3,200 kiosks in 2024, increasing total kiosks suite size to over 10,400 once delivered.
• Relocated underperforming BTMs to new locations to enhance profitability; BTMs installed for 12-24 months had 87% higher average monthly revenue than those installed for less than 12 months.
• Expanded into Puerto Rico and Australia, seeing potential for large Bitcoin ATM deployments in these regions. Strengthened profit share program with partnerships, including a multimillion-dollar investment into 250 kiosks from an institutional investor with options for more.
• CFO Glen Leibowitz discussed financial results, noting adjusted EBITDA was $4.9 million in Q1 2024 vs. $13.6 million in Q1 2023, and the company ended Q1 with $42.2 million in cash and cash equivalents and $48.3 million in debt.

In the first quarter of 2024, Bitcoin Depot's revenue was $138.5 million, a 15% year-over-year decline. Gross profit decreased 24% to $14.8 million, and gross margin was 10.6% compared to 11.9% in the first quarter of 2023. The revenue decline was mainly due to unfavorable California legislation and kiosk relocations. The company's product segment is primarily its Bitcoin ATM (BTM) network, which is the core driver of its business.

• Refrained from formal guidance but expects seasonality with Q2 and Q3 likely having higher revenue than Q1 and Q4. March revenue was 30% higher than January, and adjusted EBITDA was greater than the combination of January and February adjusted EBITDA.
• Anticipates continuing to optimize the business for profitability and positive cash flow, focusing on footprint growth, license acquisitions, and profit share program expansion.

• Unfavorable legislation in California impacting revenue. Regulatory uncertainties in new geographies like Australia and Puerto Rico. Variability in business due to kiosk ramp-up and relocation efforts, which can affect financial results.

Q: Provide color on new geographies expanding into Australia and Puerto Rico, including economic and regulatory perspectives and pricing relative to North American kiosks.

A: Puerto Rico is likely similar to the U.S. in regulation and unit economics. Australia has slightly different licensing but expected unit economics to be better than North America.

Q: Details on margin improvement levers, including armored costs and professional services expenses.

A: Armored costs can be improved by reducing armored collection frequency once fleet is stable. Professional services expenses are being reduced as the company stabilizes post-DSPAC. Marketing spend is optimized for customer acquisition costs and lifetime value.

Q: How kiosk locations are chosen and lessons from redeployments for future deployments.

A: Locations are chosen based on data from demographics, population, competitors, etc., with ongoing analysis of deployed kiosks to improve future placements.

Q: Kiosk orders, deployment schedule, and California kiosks status.

A: Roughly 3,000 kiosks on order, received monthly batches until mid-Q4. California has roughly 500 installed kiosks, with no new deployments planned until legislation clarity.

Q: Kiosk inventory, expansion opportunities, and Australia kiosk modifications.

A: Inventory fluctuates; total fleet size to reach ~10,400 once all kiosks delivered. Australia kiosks have minor modifications due to different power requirements.

Q: Sales force updates, including hiring, expenses, and productivity.

A: Sales force expenses mostly baked in Q1. Salespeople are ramping up, with most having retail cold-calling experience, and some from the Bitcoin ATM industry. Productivity expected to increase later in the year as relationships build.