Bitcoin Depot Inc. Q3 FY2024 earnings call

• Kiosk Network: Ended the quarter with approximately 8,300 active machines. 3,600 kiosks have been installed for less than one year, with average breakeven on relocation expenses in 4 to 5 months. Median transaction size is rising year-over-year.
• Retail Partnerships: Signed a retail partnership with a prominent convenience store chain in the Southwestern U.S., installing Bitcoin ATMs in roughly 50 locations in Texas starting this month.
• Profit Share Program: Expanded 433 Bitcoin ATMs since the start of Q3 2024, bringing the total in the program to over 1,000.
• Growth Plan:
  • International Expansion: Shipped over 300 kiosks for upcoming Australia launch, anticipating regulatory approval imminently for a 2025 launch and targeting additional countries.
  • Kiosk Deployment: Has 2,000 kiosks in inventory available to deploy, aiming for a fully installed fleet of 10,000 kiosks.
  • New York State: In regular dialogue with regulators to secure a license, hopeful for approval in the first half of 2025.
• Financials: Generated $17.25 million of operating cash flow in the first 9 months of 2024 and holds 11.3 Bitcoin in a separate investment wallet.

In the third quarter of 2024, Bitcoin Depot's revenue declined 25% year-over-year to $135.3 million. Adjusted gross profit decreased 17% to $22.4 million. Adjusted EBITDA was $9.2 million, down from $13.9 million in the third quarter of 2023. The company ended the quarter with approximately $32.2 million in cash and cash equivalents and generated $5.8 million in operating cash flows in the third quarter of 2024. Revenue contribution details aren't broken down by specific product segments as it's primarily focused on Bitcoin ATM operations.

• No formal guidance provided due to variability in business from California legislation, other legislative changes, and kiosk ramp.
• Focus on operational enhancements to drive profitability and cash flow, including improving vendor pricing, lowering professional costs, and optimizing customer markups.
• Anticipates similar seasonality in 2024 with significantly higher revenue in Q2 and Q3 compared to Q1 and Q4.

• Regulatory challenges in California, Connecticut, Vermont, and Minnesota have affected financials, causing year-over-year decline in revenue and EBITDA.
• Uncertainty in state-by-state regulations that could impact the business financially.

Q: Outlook for the Bitcoin ATM industry in the U.S. from a regulatory standpoint, especially after last week's election results.

A: Brandon Mintz states generally the cryptocurrency industry expects less regulation at the federal level, and state-by-state changes may be less impactful negatively going forward, but it's too early to tell.

Q: Views on Bitcoin treasury strategy and potential for a dividend in 2025.

A: Brandon mentions they're excited about the Bitcoin treasury, but currently focus on paying the remainder of the preferred dividend and considering a cash dividend for common shareholders in 2025, not planning to upsizing the Bitcoin treasury significantly yet.

Q: Thoughts on kiosk productivity ramp, specifically median performance in the first 90 days.

A: Christopher Buchanan says kiosks ramp up volume as they mature, with a median of around $2,000 per month by the end of the first 90 days.