Bitcoin Depot Inc. Q2 FY2024 earnings call

• Sequential growth in revenue, net income, and adjusted EBITDA in Q2 2024.
• Achieved and exceeded deploying over 8,000 Bitcoin ATMs five months ahead of schedule, with 8,180 kiosks.
• Acquired over 2,700 kiosks in 2024, aiming for over 10,400 kiosks total.
• Relocation of underperforming BTMs to new locations, showing growth potential; e.g., BTMs installed 12-24 months had 85.6% higher average monthly revenue than those installed <12 months.
• New retail partnership with Nouria Energy Corporation, deploying kiosks in 57 locations across MA, ME, NH.
• Strengthened profit share program with Sopris Capital, selling 200 additional BTMs.
• International expansion plans: over 200 kiosks shipped for Australia launch, Puerto Rico fully operational with over 100 kiosks; ongoing NY State license efforts.

Second quarter revenue declined approximately 17% year-over-year to $163 million. Adjusted gross profit decreased 13% to $26.4 million, with adjusted gross margin increasing 80 basis points to 16.2%. Adjusted EBITDA decreased to $12.7 million, with an adjusted EBITDA margin of 7.8%. Ended the quarter with approximately $43.9 million in cash and cash equivalents and $50.6 million in debt. Cash flows provided by operations were approximately $11.3 million for the first six months of 2024, with $10 million generated in the second quarter.

• Will not provide formal guidance currently, focused on optimizing business for profitability and positive cash flow.
• Expect similar seasonality in 2024 with significantly higher revenue in Q2 and Q3 than Q1 and Q4.

• Impact of unfavorable California legislation.
• Variability in business due to California regulations and kiosk relocation.
• Uncertainty in the timeline for NY State license approval.

Q: Provide more details around Bitcoin Treasury strategy and future Bitcoin purchases within capital allocation strategy.

A: Scott Buchanan said they will continue to add Bitcoin to the balance sheet opportunistically, not allocating all excess capital there, and will consider it along with other opportunities like stock buybacks or dividends.

Q: Thoughts on external financing opportunities for expanding footprint and M&A?

A: Scott Buchanan said they are open to M&A opportunistically, continue to be in conversations with industry players, and use leasing partners for financing kiosks.

Q: Details on New York license review and Australia regulatory process?

A: Brandon Mintz said NY application is in final review with a delay due to a team member passing away; Puerto Rico kiosks are new, not focusing on immediate expansion; Australia has over 200 kiosks ready, with launch anticipated in next quarter, and significant market opportunity.

Q: Details on Nouria Energy partnership and 2024 cash flow?

A: Brandon Mintz said 57 kiosks deployed in MA, ME, NH with Nouria; cash flow expected to even out, similar to first half with Q3 potentially lower than Q2 but results similar.

Q: Priorities for generated cash, M&A, Bitcoin treasury, debt?

A: Brandon Mintz said exploring options including M&A, Bitcoin treasury opportunistically, debt prepayment penalty ending in Q1 next year, and considering dividend-paying in future.

Q: Franchising program interest and Nouria partnership demographics?

A: Brandon Mintz said profit-sharing program is going well, with Sopris buying additional BTMs; Nouria partnership in solid revenue states, expanding in those locations.