Q3 2022 Ryvyl Inc Earnings Call
[music].
Good afternoon, ladies and gentlemen, and welcome to the rival third quarter 2022 earnings conference call. During today's presentation, all parties will be in a listen only mode.
Boeing management remarks, the conference will be open to question. The earnings press release accompanying this conference call was issued at the close of the market today. The quarterly report, which includes the company's results of operations for the three months ended September 30th 2022 was filed with the SEC today on our call today our rival.
Chairman <unk> Chief financial.
Dance Officer grew by late and Chief operating Officer, and then what.
I'd like to remind everyone that statements made on today's call and webcast, including those regarding future financial results and industry prospects are forward looking and maybe subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. Please.
Please refer to the company's regulatory filings for a list of associated risks and <unk>.
This call and webcast will be available for the next 90 days on the company's website under the events section.
At this time I'd like to turn the call over to Daniel Rice.
The company's chairman and the floor is yours.
Okay.
Hello, and thank you for joining our third quarter 2022 financial results conference call.
It is time of tremendous momentum and I'm delighted to share an update during our first earning call.
Rifle.
Earlier this year, we now see OLED, we noted that 2022 would be a year of repositioning our company as.
As we look to put in place the infrastructure necessary to disrupt the traditional.
Financial payments that's great.
Today I couldn't be more pleased to report to you all.
Our significant progress towards that transition and the key achievements, we have accomplished during the third quarter.
To begin the call metrics that we focus on the dry bulk is the growth of our processing volume.
In the third quarter, we once again set a quarterly record processing volume of nearly $1 3 billion.
So the first nine months of 2022.
<unk> nearly doubled the transaction volume.
Go to the same period in 2021, highlighting our technology's potential scalability and incredibly successful internal sales and marketing team do.
Driving the adoption of our leading edge blocked in financial solutions.
To note. This also represents an approximate 30% increase from the second quarter of 2022.
An indication of a remarkable growth even during the challenging macro environment.
Given the remarkable growth you have seen in the past two years with the continued advancement of our technology and payment solutions.
Forming new partnerships.
Spending geographically and the hiring of key personnel.
We knew at the time was right for the evolution of our brand and identity did that end.
It's all recent annual General meeting, we received resounding shareholder approval to renamed the company rival.
This initiative was spearheaded by our Chief marketing Officer Jacqueline Reynolds.
Who work tirelessly to deliver on high expectations to.
To create a world class brand that we believe is unparalleled in the fintech industry.
This process is vital to the next phase of our expansion is rivaled showcases the continued development of our payment solution remarkably stable coin and blockchain processes and offerings.
To a global audience.
We have already began to pursue aggressive.
You can expect the launch of our new rifle website, along with the new social media platform and heavy public relations activities.
And with a number of other launch activities.
As we strive to drive awareness in the weeks ahead.
Shifting gears now to the territorial bank of American Samoa G boss.
You may recall.
That you know second quarter commentary, we discussed the significant traction made with 13% market share.
The island's exclusive payment technology provider.
Now at the end of the third quarter.
We are excited to report that we have achieved nearly 50% market share.
This is extremely significant for the island territory.
As they look to modernize their economy with our innovative stable coin in blockchain based payment solution.
These cashless payment solutions that reduce costs improve settlement times and introduce new level of security for the residents of the island.
The surge in market share over the short time since the deployment of our technology not only demonstrates the focus and diligence.
Our team, but also the appetite of the developing economies or adopting <unk>.
Our unique technology as a reliable and trusted solution.
Our close loop rival ecosystem and Americans Tomorrow will serve as an ideal case study for our solutions.
And pave the way to take advantage of opportunities around the world.
This leads me to another.
That shipments during the third quarter, but we expect it to be a transformational growth driver for arrival.
October .
The launch of cleaning.
His deep egg stable coin.
She is available for download on Google play and the Apple App store.
Businesses and individuals alike.
And now enjoy the speed and security of blockchain payment transactions are.
Along with the stability of the U S dollar.
From the palm of their hands.
And on their desktop.
One of the most significant points of distinction is that Koine became one of the industry's skus to ensure near realtime custodial accounts at the station.
Linkedin review of I T compliance and specifically Socs to compliance certification from our Menino, Sop accounting consulting and technology for them in the U S.
Now what does that mean.
Each koine digital token held in a wallet.
On the platform is matched with one U S dollar held in a custodial accounts with the federally insured financial institution.
The dollars backing queenie are not tied up in investments.
And I would not converted to other crypto currencies.
Competing stable coins that have not utilized this safety and compliance measures have failed leading to severe market disruptions.
Of this and the heightened attention to company balance sheet.
And cash flow in the current market environment rival took the initiative to renegotiate and.
And restructure the terms of our 100 million convertible note financing.
Which we originally entered into on November 2nd 2021.
Little cooperation with our noteholders.
We were able to come to terms to extend the maturity.
By one year to November of 'twenty 'twenty four.
While also securing a highly valuable option to pay interest in stock therefore, reducing the cash interest expense burden.
In providing a significant improvement to our financials.
Additionally in the game.
In the context of today's market environment, I'd like to discuss our growth strategy.
Historically, we have looked to grow organically and with select acquisitions.
Cumulated processing volumes.
That sounds chunk savvy guy.
Guy financial.
Key licensing assets like trends back to you.
In contrast.
Even the sewing cost of capital raising funds to pursue acquisition no longer is as much of a fault.
With the launch of Koine are truly differentiated stable coin.
New brand identity and increased global capabilities, we believe the best path to continue to quickly scale.
It's through relationships with well established payments company.
That benefit from our advanced infrastructure and technology.
In addition, we will continue to pursue select M&A strategies suitable for the current market conditions.
As we continue to evolve our growth strategy.
We will report more of the details of this shift.
With this I'd like to introduce drew pilot, our new Chief Financial Officer.
Whom we brought on board in the third quarter of 2022.
<unk> brings a tremendous depth and breadth of functional and industry experience.
With startup and middle market Global software technology and other industry.
Were truly thrilled to have his incredible experience on the team.
Welcome drew.
Please take a moment to walk us through the details of our financial results.
Thank you for your kind introduction that I'm excited to be part of the team.
My question will be limited to key results of our financials.
A full breakdown is available in our 10-Q filing and in the press release that will be distributed at a later date.
Here I'll be referring to adjusted EBITDA.
non-GAAP measures.
So the calculation of the adjusted EBITDA and other non-GAAP measures. Please refer to the 10-Q, MD&A, which will be available on the company website under the SEC filings.
Our Q3 revenue grew to a new company quarterly record, increasing by $2 6 million or 32% to $10 6 million for the first three months ended September 32022 from $8 million for the first three months ended September 32021.
Revenue for the nine months ended September 32022 increased by $3 3 billion or 17% to $22 5 million from $19 2 million for the nine months ended September 32021.
The change in net revenue includes $2 $9 million in penalties and fees charged to merchants in accordance with our standard service agreement for transaction fraud in minimum activity fees.
Also contributing to the year over year growth were increases in processing volumes compared to the same three months period in 2021 offset by lower commissions from a processing partner.
Gross profit for the three months ended September 32022 was $6 4 million or 59, 8% of total net revenue compared to the gross profit of $5 6 million or 69, 9% of total net revenue in the prior year same period.
Gross profit for the nine months ended September 32022 was $11 5 million or 51, 2% of total net revenue compared to gross profit of $13 8 million or <unk> 72, 2% of total net revenue in the same quarter a year ago.
Our cost of net revenue gross margin will be primarily driven by our negotiated commission structure with Iqos, which are independent sales organizations and gateways.
The decrease in gross profit was primarily due to higher processing fees paid to gateways and commission payments to <unk>.
Now, let's shift gears to our operating expenses.
Once again I would like to point out that our operating expenses are not directly correlated with our net revenue primarily because of our scalability of our revenue from a small number of employees due to our technology and the business we're in.
We distinguish our operating expenses into two categories ordinary operating expenses and noncash operating expenses.
Ordinary operating expenses include marketing research and development payroll professional fees and general expenses, while noncash operating expenses include stock compensation expenses for employees and for service providers as well as including depreciation and amortization.
Ordinary operating expenses were $6 5 million and $3 9 million for Q3, 2022, and 2021, respectively, an increase of $2 6 million.
Our ordinary operating expenses were $21 9 million and $9 2 million for the nine months ended September 32022, and 2021, respectively.
The increase of $12 7 million was due primarily to software development marketing expenses related to rebranding and payroll and payroll taxes.
Noncash operating expenses for nine months ended September 32022 decreased $9 2 million from the prior year nine months due primarily to lower employee stock compensation and stock issued for services.
We ended Q3 2022 with a loss from operations of $3 1 million compared to a loss of approximately $2 8 million in the same quarter the prior year.
For the nine months ended September 32022, we culminated with a loss from operations of $18 million compared to $12 2 million in the same period the prior year.
<unk> net loss from operations is due to increased operating expenses.
Other expenses of $8 million for the nine months ended September 32020 to increase by 4 million over the same period prior year.
Interest expense related to the 100 million dollar convertible note issued in November of 2021.
Amortization of discount fees associated with the note and the Derecognize Sheehan expense on conversion of the convertible debt.
Were offset by favorable changes in the fair value of derivative liability.
$14 6 million for the nine months ended September 32022, and none in the previous year same quarter.
The company sustained a net loss for the nine months ended September 32020 to $26 1 million or <unk> 59 per basic and diluted share compared to a net loss of $19 4 million.
49 cents per basic and diluted share in the same period the prior year.
The company reported a net loss in the third quarter of 2022 of <unk>.
$15 2 million or <unk> 32.
For basic and diluted share compared to a net loss of $6 million or <unk> 14.
Basic and diluted share in the same quarter a year ago.
The increase in net loss for the nine months and Q3 ended September 32022 was primarily due to increases in research and development.
Interest and other expenses related to the $100 million out.
General and administrative.
Payroll and payroll taxes and professional fees as we continue to add staff and infrastructure related to our growth offset by the favorable change in the fair value of derivative liabilities.
Adjusted EBITDA for the third quarter was a loss of <unk> one.
1 million just short of breakeven.
We ended the quarter with cash and cash equivalents of $37 6 million as of September 32022.
And in summary, our financial.
Position remains strong and we remain well positioned for future growth and profitability.
So with that I'll turn the call over to MS. Wei, our chief operating officer to provide a review of our business operations and the outlook for the balance of 2022.
Thank you drew.
As I have down in prior conference call I would like to take this time to walk us through the material revenue contributors.
And provide an update first.
Before turning to our outlook for the remainder of the year.
Q3 volume across all channels is about $1 3 billion.
About 35% of hats off our processing Congress for the time period.
On a year to date basis, our processing volumes at.
Nearly <unk> $1 billion.
Which is approximately 38% higher than our processing protection.
Welcome Pat to the volume.
Same nine months of 2021, we're looking at a 98% improvement.
Our acquiring business Q3 volume, including the Sky financial portfolio with $685 million.
She exceeded all expectations by about 12%.
Chop Savi, it's also approximately 14% higher than planned processing of $64 million in Q3.
When compared to the same period in 2021 this quarters volume is 42% more favorable.
S H business, we saw a 47% increase over Q2.
We volume at $25 million in Q3.
We're currently in the process of moving our service to a new processing channel to increase processing capacity.
As a result.
We are behind the targeted monthly volume of $50 million.
When the new platform is ready in Q4, we expect processing to pick up steam.
Paul FX International payments business line.
<unk> trends in Europe .
We've reported over $500 million in business volume.
Which $480 million is attributable to FX conversion and international payments transactions.
This volume is 53% higher than our original budget estimates for the quarter.
No.
And that's the update on American Samoa, we're incredibly pleased.
To share that our services have been rolled out to over 240 merchants.
Representing approximately 50% of the overall merchant pocket market.
This phase one goal was achieved ahead of our schedule.
Q3, we were able to process nearly $17 million for the businesses and residents on the island.
This is amazing accomplishment as we literally launched from a zero baseline at the beginning of Q2.
Getting back to Connie.
All development marketing and operations teams work days nights and weekends to launch the platform on time and as promised.
Before the end of Q3.
Since the initial launch we rolled out the platform on both the iOS and Android apps are a couple of 12.
As part of the <unk> technology, we Additionally design the system to have foreign exchange and international payments capabilities.
We plan to be fully integrated into <unk> as an FX module.
While the module is not fully integrated the starting volume of $480 million in the quarter gave us confidence about its full potential.
International payments business. In addition, we are scheduled to enable corner with a second banking partner in Q4.
Which will allow us to accelerate the on boarding of domestic volume onto Connie.
We ask that you stay tuned for more to follow on this development next quarter.
With our strong performance, thus far allowed to share our current estimates for the remaining year.
For processing volume.
We closed the first three quarters at $3 $1 billion and expect to process. One one to $1 3 billion in Q4 projecting a total of 2022 volume around.
For $2 billion to $4.4 billion. This is in line with our total year target.
$4 billion to $6 billion.
Revenue from processing in Q3 is $10 $6 million, including Iraq lab processing revenue of $7 $8 million and a one time fees of $2 9 million from legacy accounts, we expect to see a solid Q4 and put check of total year revenue at 32 to 35 million.
Yeah.
For adjusted pro forma EBITDA our Q.
Q3, adjusted EBITDA is a minus point $1 million, which is just a tick below the breakeven target for the quarter.
We're very proud to have accomplished this major improvement from last quarter's negative $4 $9 million.
Our updated Q4 projection for adjusted EBITDA is around zero to positive $3 million.
Overall, we hit the vast majority of our printing and processing goes in Q3.
Launch the kony platform as scheduled and.
And we remain truly optimistic about our near term growth trajectory.
With this I would like to now turn the call back over to Ben Harris, our chairman to begin our Q&A.
Okay.
For the folks listening to this call. Thank you for your interest and commitment to rival.
We are generally.
So for your ongoing support with that I'd like to begin our Q&A session. In addition to drew and myself other members of our executive leadership team, including our CEO for Indonesia.
CMO exactly rentals.
Our on hand to answer questions.
Operator, please begin thank you so much.
Thank you Ben we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before.
Pressing the star key one.
One moment, while we poll for questions.
Thank you. Our first question is Howard Halpern with <unk> Brothers. Please proceed with your question.
Congratulations guys on achieving our work during the quarter.
Thanks Howard.
Uh huh.
Based on Q3 results that we see out there have we really reached in this year and.
An inflection point in the gross margin.
At trajectory and that we'll start seeing it creep into the you know.
Low sixty's from where you are in the third quarter.
I will direct this question to mean.
This is part of the projections for Q4 and next year.
Please go ahead.
Hi, Dan.
Well, thank you for the great questions.
I would say, yes indeed.
You know for Q3.
We bought that.
One $3 billion of volume.
We are all going to hit beyond the 60 basis points as you referenced.
As a result of that we're able to you know get to pretty much a breakeven adjusted EBITDA number for the quarter right.
So.
We expect to see further improves.
Gross margin contribution coming up.
And that and that's from a reduction in expenses related to isos, and gateways and you're able to do it.
More or less more on your own.
Well, it's a combination of a few things.
It's comprised off further.
Our improved gross margin because we'll be able to process more and continue to drive gross margin out of the high risk acquiring space of the business.
But obviously on the cost control side, we continue to monitor closely.
As we launched a corny platform.
Bypassing the continuing.
R&D product development efforts as well as other cost for operations.
Okay.
And now in terms of planning.
I don't know if you've officially disclosed how much funding have you put in to at least your initial bank and are you looking for partners.
Put in the asset put money in escrow cloud for a second partner.
I will take that question Howard.
No.
Koine move.
Moving forward is focused on the B to B Junkie code and as such it is self funding.
Therefore, we would not be seeking additional funding for it at this time.
Okay.
That sounds really good.
And in terms of how you've gained momentum with American Samoa, what have you been receiving or what kind of feedback have you been receiving from the merchants I don't know whether you'd receive it from the customer as well.
What is the reception so far that you are receiving from your operations there.
I will direct the question again to me.
So it is a great question how are you.
As mentioned on the call earlier, we achieved and are basically 50% of the pocket that much and you know our base.
On the island.
The experience so far has been fantastic.
Volume off of the payment processing business on the island hasn't grown from basically zero to close.
Close to $8 million on a monthly basis, just within a number of months.
We like the feedback from the merchants, including restaurants, you know like.
Donald.
Okay.
Pretax directly through our banking partner temporary or territory on bank of America, something all up.
It's why we see so far you know oh upon they expect to.
Received in a flood of volume coming up next.
Next quarter or two.
So oh, it's going well.
Okay.
And I.
I guess since you're sort of almost like crown halfway into that.
American Samoa are there others now that are developing in the pipeline that might occur.
Next year or are you waiting to develop that pipeline till American smell is fully deployed.
Thanks again for your thoughtful question Howard This is Ben.
Yes, we do see.
The potential and already inquiries by other similar systems.
Close loop systems are all over the world.
We have been approached by several to duplicate the success and technology platforms for Amira.
American some more.
We will discuss those in.
In due course.
Yet at the point, where we would disclose any of that.
But definitely we have several opportunities on the table.
Okay, and then one technical financial question I see.
With you now.
The change I guess in the convertible debt and interest expense debt discount dropping significantly in this quarter.
And looked at the Q, yet or could we see that basically diminishing towards zero from the 437000 that we recorded in the third quarter.
I will direct the question to our Chief Financial Officer drew.
Okay.
He might be on mute sorry, I was on mute.
Yeah.
With the conversion of.
Parts of the debt.
Two stock.
We have taken the discounts in derivatives.
I'll use down.
They recognized.
Rent expense related to those those.
And that.
The interest rate, obviously is affected by the reduction of the debt. So.
But conversion who's not here, we can't predict the rate of conversion from debt holders at this particular point in time right, but the debt discount part of it that should stay in the Apple unless you've already assumed that in.
In the game and now off on that you've already taken most of that.
The discount was was reduced by the hub.
But the reduction in the debt.
In the quarter.
Okay. Okay.
That sounds great and you guys just keep up the great work.
Thanks Howard.
Operator, who is next.
Our next question is from Kevin Dede with H C. Wainwright. Please proceed with your question.
Hi, Ben.
Maybe sort out two high level for this call you can kick it if you don't want to deal with it but could you just run through and.
A transaction example that illustrates how koine is self funded.
I will direct this question to CEO for Lisa.
Hey, Howard how are you. Thank you for the question.
Alright, Kevin story.
For Mary tried to worry about that.
So courtney.
And the B to B space.
The way he transaction coming in is our B to B, our business will find is corn your wallet with their monthly <unk>.
Then request to do certain things for example effect.
Miami invoices everything related to Covid.
We'll pay out vendors or other.
In the different businesses you will find these on the wallet when it come from a credit card processing.
We basically hold the money for 24 hours have been released when do we get the funds because the ecosystem is a funding itself. We do have instant funding is needed and then we can access.
Our liquidity if needed but at this point, we don't see it happen.
The New York Fed and I'm sure you've seen this has recently started testing not just a central bank.
Digital coin, but also a token eyes.
Blockchain backed.
Transaction processing engine that seem to me to be very similar to the one that you folks have developed.
Can you help me understand how.
Should their test to be successful.
How you would expect.
How do you you'd expect vendors to come to your platform versus using one that was offered by the fed.
Kevin Thanks for the question.
So this is my view.
I think that development is a great thing from Cohen.
This feature is necessary next step for the industry in general.
And we will continue to grab legitimacy traction as larger player and.
The space.
The government steps up the regulatory oversight.
Koine can provide the same or superior technology.
Equalizing agent for the smaller banks can have the same capability.
Major player.
Joining as infrastructure is built to be able to integrate with the pilot.
The larger banks down to drive.
We expect this trend to continue.
This pilot program.
Thanks Lee.
Yeah.
Okay.
Yeah sort of taken a step back and looking at.
Your objectives this year your.
You're basing your I mean, obviously right, we're halfway through the quarter, but youre not expecting to close any acquisitions for the balance of this year could you characterize I.
I mean I know in your prepared remarks, Ben you spoke to the opportunity.
Just hoping.
Given sort of a general reset in valuations you could give us your perspective on how that market looks.
<unk>.
What type of currency, you would use to to pull the trigger on a new deal.
And again thanks for this.
Insight.
So obviously a Z.
We are all interfacing dry powder in the capital markets.
Standard debt.
And equity raises are less likely.
<unk>.
This does not mean that.
M&A activity is holds to stop.
We're still looking at several opportunities.
Obviously these opportunities will need to be in the context of both.
Hundreds of million dollars.
Listing note on our books.
And an opportunity to reset market cap.
When we joined forces with other accretive businesses.
Uh huh.
Although.
You are correct in saying that it is highly unlikely that Q4 will see a completion of such activity.
We do think that.
The days when this will happen.
Are nearing.
And I do expect that job in near future.
Maybe in the next couple of quarters.
Can you can you just give us an idea of.
How do you see the target environment.
Do you just think there are.
I guess privately held companies that have investors that are looking for an exit or.
Maybe the management teams, there realize that theres, a better opportunity in scale.
Matt and Mike.
The second is more likely.
We will not be looking to provide an exit to anybody.
That's business potential business that we are discussing here.
It could be something that is extremely accretive.
Two of our business model, our business lines, and perhaps provide traction in a vertical that we don't have today.
Also it has to be accretive to scaling for both.
Green button rival and this potential.
Partner.
Also as I look into this opportunity.
Obviously I am looking at.
A rebalancing of equity.
Through a true up event.
Meaning.
Hum.
Some metrics to value.
Has to be revisited down the road, maybe 12 months, maybe 24 months.
Such that the accretive additions to both businesses.
We will have to be realized in the future.
We anticipate.
Our current equity market.
Sorry.
To remain steady.
Stagnant as they are now for some duration, maybe four or five quarters down the road.
And we will act accordingly, we would seek to do a rebalancing to us after that.
Okay.
Could you.
Offer.
Just a high level view on your sales and marketing approach given.
We're koine is now where you are processing businesses here in the U S. The opportunity to engage further both with credit cards and on the Forex side.
And obviously the touch on businesses you have in Europe .
Okay.
I will direct that question to me.
Hey, Kevin it's a great question.
I'll put it this way right. So the way we look at how we go to market and pursued by the sales growth for quality.
We have a strong foundational business.
That covering both high risk or no risk.
Much of the space.
In addition to that.
With a launch platform, we see additional verticals as being opened up.
In our near term business plan that we see that domestically.
We will have you know wanted.
Wanted to new market verticals through strong partnerships, we can bring to the table.
In addition to that in Australia that need to be upon us we see you know.
Transaction processing for the end users for business customers for <unk>.
Gulf Island ramp and off brand capabilities.
Imagine also you know given that we have a unique business.
And European market already leveraging the various business of licensees that we have.
We can look at you know how to do all around off ramp for both sides of the Atlantic Ocean.
But in addition to that you know for the FX in the international payments space. We also see that even very complementary as well so I'm very optimistic to see the volume growth.
Across multiple verticals.
As well as the Geographics between the two sides of the Atlantic Ocean.
Kevin I'm going to allow for another point of view from a chief marketing Jacqueline.
Go ahead.
I appreciate that thank you.
Well, it's not necessarily another point of view hi, Kevin It's just too I've met and piggyback on my phone from a P&L standpoint.
Marketing standpoint, we've done quite a bit of work to really understand who the target customer is in this case they start as named in the progressive pragmatic I have a ton of information and research that sort of supports is that we are really going for and who has the biggest compression to adopt the <unk> brand, but we see a lot of potential and we will be using platform.
Public relations social media.
To really engage with this progressive pragmatic ADT customer to drive awareness. Obviously, we're in the very nascent stages of launch and we want to make sure people don't often come yet so that could be a little bit of background on the market.
Could you Jackie you help me understand how.
I mean, maybe how to quantify that target customer in terms of.
The address the entire transaction market.
And maybe the amount of volume that they are processing on a.
If you were able to generalize on a per customer basis.
And then also help us understand.
Oh.
You're able to rationalize two brands in the market right you've got the X Green box now that's gone that's water under the bridge, but you are still offering both rival and Koine. So help me understand how are you going to communicate.
Both of those brands in there and there are advantages.
Absolutely and I am going to tackle the second question first Kevin Clark tackling two brands launching in the marketplace is not any different from what the Clorox company does with their stable of brands or what the Coca Cola company does but their sample brand.
<unk> to US is the mother brand a brand that sort of is the umbrella for all the other products that we offer.
And so obviously, we want to drive the awareness and we're watching private sense of trust and security with our mother brand Acquainting Israeli gonna be our work horse and for that reason, we are investing in cleaning.
Sure that we are truly laser sharp on this type of medicine. So each one has their own brand positioning in their own messaging et cetera.
But we will make sure that those two are differentiated and if you'll notice on some of our communication. Our tagline is prevent possibility. So rival is the one that perhaps those possibilities at all level.
The second question I'm going to actually turn it over to NIM in one second, but we're working very very closely.
With our sales team to distinguish exactly to our target customers are what channels to really put a number to that to quantify that volume opportunity.
So if you take the sales conversation.
Yes exactly.
Kevin just to help you know are really a couple of ways to look at the metrics right.
And a lot of the metrics pretty established philosophy variety. We see this every day and we're very comfortable with it as you know.
The number of new merchant locations in the monthly processing volume per location right, that's true reliable metric for us.
And the other point I'd like to share with you is that we have hundreds of <unk>.
<unk> and <unk>.
We've been you know basically putting them on standby until now we've launched the platform will be able to work with the isos and partners that bring the volume through right. So you know you guys are thinking verticals. We we have good metrics already for the new verticals.
We plan to bring off screen over onboard.
We are working diligently on that.
Obviously, as we finalize our business plan for 2023 and sadly metrics.
I mean at what verticals will we'll be able to articulate I assure you.
This particular call as part of the ongoing guidance.
So I think that's probably the quick way to answer the question hopefully that's okay with you.
Yes, no I appreciate men. Thank you. Thank you for entertaining it I appreciate it one one last one for me and I think maybe.
Your chance and Jackie address this four hour already and that's the sequential change the sequential increase in percent of.
Processing volume that was revenue and I just kind of.
I wanted to understand there's a.
There is a nicely sequentially positive trend from March this year.
And I get that.
What you've said right. It's based on both your internal improvement and also increases in scale.
But I'm wondering how.
Do you think we should look at it going forward.
How how much more can that improve.
The cabinet is an open ended question [laughter] I'll put it this way right.
Yeah.
You can find it that way men than I've done my job.
We're doing a great job.
I'll put it this way.
We continue to expect growth for the targeted business verticals. We have once we have visibility not south pipeline, we know they won't generate higher than the average.
Residual percentage right now we know that because we have pricing strategy. We know what our cost base is so we do that going forward for the longest time as we get into a new vertical as well.
We will be working closely with our CFO to ensure that we segment the business.
Our way for each of the major business lines, we will continue to articulate volume and corresponding revenue and margin.
Should analysts will be able to look at a map and be able to model it out right.
Okay.
So Matt and if I was to distill that for my simple mind.
We can expect that.
Rival will start to break down business lines and give us a little more insight on an operating segment basis.
Yeah, that's correct, we can see that even during the earnings call.
And my operating highlights area I can break them down by each of the business lines and gave you the data points.
Okay are those are those figures in the Q or will they be in the queue.
Probably not.
To obviously, we won't be complying as we continue to be quite Rolf and.
Southern scale, we'll be looking at that the proppant Tom to break the dominant articulate into Q2.
Okay.
That sounds great. Thank you so much.
Everyone up for for entertaining my question I really really appreciate it apologies that so many of them were not.
Not necessarily quarter related but sort of business strategic business perspective, but I definitely appreciate the time and attention. Thank you very much.
Thanks, Kevin.
Going back to your point.
The mean.
If you go through the transcript for this call.
And or just listen to men's section youll.
You'll see the breakdown.
By verticals.
A contributor to overall earnings so we already have that didn't we began doing that.
But as we grow bigger and as they are.
The scale and market comp and.
And equity appreciation, we will obviously need to provide.
Further breakdown.
Further clarity.
And anticipate.
We don't have a lot of time and I do want to get to some of the questions that were submitted.
Ahead of time.
Any particular one.
That's the.
Actually as I was traveling I sneak I received three calls.
Different on the loose ends.
Our stakeholders.
About one particular issue and I wanted to address it on this call.
And then we will continue and have questions until time runs out and operator.
Please keep us honest on this.
So the the meadows is I wanted to discuss.
And that they've received calls about it.
What was the issue of the <unk> bankruptcy and how it impacts.
In fact, our business.
So.
The direct answer to that is that the SPX collapse has no negative impact on arrival.
None whatsoever.
The price of crypto as a multi faceted question.
And this would be my personal opinion here.
<unk> and all related outgoings of known intrinsic value.
And their main advantage is the detachment from government.
As oversight increases and stable corn matures.
There will be less need for it and decreasing values.
Stable coin such as appropriately.
Two fields, both in coverage and compliance reporting.
Is equivalent to <unk>.
And will eventually be better than feared.
It.
Has the potential of being adjusted or hedged by commodity.
Regulation space will increase through the remainder of the current administration.
Department of Treasury.
We will likely push this space oversight.
Fossils they can.
And we will have bipartisan support for it.
Ultimately, though I assume there are no further calls.
So I can continue.
Written.
We have one more question and we have won quite a bit in Q.
Go ahead.
Our next question is from Christopher <unk> with singular research. Please proceed with your question Hi.
Hey, Chris.
Hi, Ben.
I just had a question about your cash burn it looks like cash.
Cash burn for the quarter was about $18 million.
How comfortable are you with this and you know what.
What's it going to look like next quarter.
Chris I will direct this question to two groups Chief Financial Officer.
Well most of it most of the cash there's obviously used by operations in the <unk>.
Quarter, we do see an improvement in operating the project improvement in operating results in Q4 given.
The completion of the Queenie development project, and then going into more of a maintenance and supportive role.
We've also.
Made deposits for for small.
Acquisitions in the quarter related to them.
Licensing fee licenses in the U K as well as some technology also supported in Europe .
Yeah.
Okay. Thanks for that and then did I hear this right. So koine had 480 million processing volume for the quarter what was that men Sir.
I will send it to me.
Hey, Chris.
So in the FX international payments space, we have $480 million.
Dollars of processing volume.
That's why we consider the FX module, we intend to we plan to integrate that with Coty.
Not fully connected yet, but it's the starting.
Foundation for that module for that business.
To be very clear about it.
So for example, anytime we do a.
So for example every time, we do a you know foreign exchange conversion.
We earn a fee for each of the spot conversion.
Each time, we do a corporate pay out point international payment space, we're entitled to beat in revenue.
Okay.
Right, Okay. Thanks, and then.
For the year.
What youre forecasting for two to $4 4 billion.
How much of that is coming from Cohen.
We were deemed unnecessary.
I don't have the data in front of me, but we do start to see we have start seeing the volume showing up on Connie.
And the 480 million and if the FX, which eventually will be the kony FX module.
I might have to get back to you Chris I know, we you know we.
We maintain communication with you so I have to get probably get back to you to make sure I keep either by number rather than keeping an incorrect number on the phone here.
Okay and last for me.
Can you provide any color as far as what sort of processing volume.
You'll see from the second banking partner.
Well very good question Chris.
Okay actually Freddie Nissan will lie to you know help address a question over the Friday.
Hey, Chris pleasure hearing from you.
And regarding the banking relationship.
What is important for us to grow with volume and profit is threat many partnership as possible.
The volume in different countries. So we havent been relationship in the U S and Europe did we engaged in working on to support the global growth and expansion of coring up.
In Q4 as part of our business expansion and of course, we have a different channels and one of them you're going to hear very soon but in the end of it is not about the volume it's about the support of the volume that we wanted to do it on Corning and for that reason you need more banking partnerships.
Okay and then.
I forgot to ask about cross river, how is that going.
Can you can you mentioned anything there.
Yeah, Absolutely Cross river and and rival are working together on creating the product we already have.
Our contract with them as we mentioned in the.
But if you take longer as banking related departments, you have to take some time longer than expected.
This time of the year just for your knowledge creates and everybody on the call usually in November all of the banks acquirers going into a freeze.
At the beginning of January .
So some of those things are will delay for first Q first quarter of next year.
But other than that we have a great progress and hopefully we can announce some of it.
Okay. Thanks for that Friday.
Thank you Chris.
Thank you, Okay, I'll assume that Chris has done.
Okay.
Sorry, operator did you want to add anything.
Now I'll turn it back to Ben for any write in question Okay.
Okay.
So oh.
One last question.
That was submitted beforehand in writing and I would like to address.
Is a can you elaborate on the R&D expense for Koine and the Companys strategy to scale. It is a wallet necessary if you're focused in b to b.
And I will direct the question to me.
Thank you Ben.
This year, we invested you know on the effort and as a result successfully launched <unk>.
Kony platform.
Future development will continue to focus on product road map work.
And functionality to support our growth in payment solutions.
Acquiring business.
Foreign exchange and international payments business.
My label platform and API work.
And yes, as we transition much in business volume on the corner, we expect to see.
Increasing between volume.
Volume in the ecosystem accordingly.
Yeah.
Thank you Ben and we that's.
We are concluding today's call.
Thanks to everybody for your continued support.
Great question.
Submitted during this call and before it operator.
You are okay to compete.
Thank you for joining US today you may now disconnect your lines have a nice call.
Thank you all.