Q1 2024 RYVYL Inc Earnings Call
Operator: Good afternoon everyone, and welcome to Ryvyl Inc.'s first quarter 2024 conference call. At this time, all participants are in a listen-only mode.
Good afternoon, everyone and welcome to rival Inc's first quarter 2020 for a conference call. At this time all participants are in a listen only mode. A question and answer session will follow management's remarks.
Operator: A question and answer session will follow management's remarks. 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 fiscal period ending March 31st, 2024, was filed with the SEC today. A replay of this call is available on the Investor Relations section of the Ryvyl website in the events slash quarterly earnings section. As a reminder, this call is being recorded.
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 ended March 31, 2024 was filed with the SEC today.
A replay of this call is available on the Investor Relations section of the rifle website in the events Slash quarterly earnings sessions.
Management: As a reminder, just call is being recorded before we begin I would like to remind you that today's call contains certain forward looking statements from our management concerning future events. These forward looking statements are based on the company's current beliefs assumptions and expectations regarding future events, which in turn are based on information currently available to the company in <unk>.
Operator: Before we begin, I would like to remind you that today's call contains certain forelooking statements from our management concerning future events. These forelooking statements are based on the company's current beliefs, assumptions, and expectations regarding future events, which in turn are based on information currently available to the company and contain projections of future results of operations or financial condition or state other forelooking information. By their nature, forward-looking statements address matters that are subject to risks and uncertainties.
Management: Any projections of future results of operations or financial condition or state. Other forward looking information by their nature forward looking statements address matters that are subject to risks and uncertainties a variety of factors could cause actual events and results to differ materially from those expressed in our contemplated by the.
Operator: A variety of factors could cause actual events and results to differ materially from those expressed in our forward-looking statements. Other risk factors affecting the company are discussed in detail in the company's filings with the SEC. The company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except to the extent required by applicable law. I will now hand the call over to Ben Errez, Chairman of Ryvyl. Please go ahead.
company: In or contemplated by the forward looking statements other risk factors affecting the company are discussed in detail in the company's filings with the SEC. The company undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information future events or otherwise except to the extent required by applicable.
company: Laws.
company: I will now hand, the call over to Ben Harris Chairman of rival. Please go ahead.
Ben Errez: Thank you. Good afternoon, everyone.
Ben Errez: Thank you good afternoon, everyone and thank you for joining us today in the first quarter of 2024, we delivered solid growth with revenue increasing 49% over the same period in 2023, reflecting particularly strong international results, which grew 185% compared to first quarter of 2020.
Ben Errez: And thank you for joining us today. In the first quarter of 2024, we delivered solid growth, with revenue increasing 49% over the same period in 2023, reflecting particularly strong international results, which grew 185% compared to the first quarter of 2023. Processing volumes continued to grow, reaching $994 million in the first quarter of 2024, up 5% compared to the fourth quarter of 2023, with our international segment increasing 28% to $755 million. However, as expected and reviewed in March, revenue declined sequentially due to near-term issues affecting our North America business.
Ben Errez: Three processing volumes continued to grow reaching $994 million in the first quarter of 2024 up 5% compared to the fourth quarter of 2023 with our international segment, increasing 28% to $755 million. However, as expected and reviewed in March revenue declined sequentially.
Ben Errez: I'll provide an update and review some of the actions we've taken to manage the situation. New regulations and the overall compliance environment related to some of the high-risk verticals we service led us to change banking and the Beginner Product Transition in the North American Merchant Services segment. In addition to implementing cost control measures, we are accelerating business development efforts to drive volumes in new vertical markets. As we expand into new markets, we have built a sales pipeline and new verticals that we believe will begin to further ramp North American business volume in the third quarter of 2024.
Speaker Change: Due to near term issues affecting our North America business I'll provide an update and review some of the actions we've taken to manage the situation new regulations and the overall compliance environment related to some of the high risk surgical suite service led us to change banking partners and begin a product transition in the North American merchants service.
Speaker Change: Segment. In addition to implementing cost control measures, we are accelerating business development efforts to drive volumes and new vertical markets, such as insurance and online businesses as we expand markets. We have built a sales pipeline and new verticals that we believe will begin to further ramp north American business volume in <unk>.
Speaker Change: Third quarter of 2024. Additionally, we are investing in engineering and development to enhance our product offerings, one factor driving new business as the shift from terminal based processing to mobile App based processing. These transformative change will help us expand our customer base by reaching into new verticals and increased business retention.
Ben Errez: Additionally, we are investing in engineering and development to enhance our product offerings. One factor driving new business is the shift from terminal-based processing to mobile app-based processing. This transformative change will help us expand our customer base by reaching into new verticals and increase business retention by improving service and engagement with existing customers, both at the merchant level as well as at the consumer level. Now, I'll discuss some of our key growth initiatives and achievements. Expanding our international business is a strategic priority.
Speaker Change: And by improving service and engagement with existing customers both at the merchant level as well as the consumer level now I'll discuss some of our key growth initiatives. So that shipments expanding our international business is a strategic priority as the first visa partner in the Balkan region, we completed testing the new visa direct integral.
Ben Errez: As the first Visa Partner in the Balkan region, we completed testing the new Visa Direct integrated services and are pleased to share that we are now active in production to offer Visa Direct payouts for our business clients. The integration will enable Ryvyl EU to leverage Visa Direct's network capabilities, provide superior banking as a service, and create new revenue streams. Our partnership will enable customers to send funds to authorized accounts, e-wallets, and debit cards in over 80 countries across multiple currencies.
Arrival CEO: It services and I'm pleased to share that we are now activated in production to offer visa direct payouts for our business clients. The integration will enable arrival you to leverage visa direct network capabilities provide superior banking as a service and create new revenue streams, our partnership will enable customers to send funds to authorize.
ACI worldwide: Accounts E wallets and debit cards in over 80 countries across multiple currencies in February 2024 rival you formed a collaboration with ACI worldwide, a global leader in mission critical real time payments software, we plan to onboard our ecommerce merchant payment service provider customers onto the award.
Ben Errez: In February 2024, Ryvyl EU formed a collaboration with ACI Worldwide, a global leader in mission-critical real-time payment software. We plan to onboard our e-commerce merchant payment service provider customers onto the award-winning ACI payment orchestration platform, enabling them to orchestrate payments using one solution, one platform, and one API integration for optimal conversion rates and minimal operational costs. This integration will allow merchants and payment service providers to provide customers with a more seamless and secure customer journey.
Arrival CEO: See I payment orchestration platform, enabling them to orchestrate payments using one solution one platform and one that would be our integration so optimal conversion rates and minimal operational cost. This integration will allow merchants and P. S keys to provide customers with a more seamless and secure customer journey we are in.
Ben Errez: We are integrating the ACI solution into our offering and expect it to be released by early third quarter. We have retained our COINI technology to leverage as part of our total suite of solutions for more efficient and highly scalable transaction processing in both North America and eventually in the EU. COINI provides an easy to use customer experience.
ACI: <unk>, the ACI solution into our offering and expect it to be released by early third quarter, we retained our coin and technology to leverage as part of our total suite of solutions for more efficient.
Koine: And highly scalable transaction processing in both North America and eventually in the EU Koine provides an easy to use customer experience. We have been testing corneas mobile based processing in the U S. In the first quarter and expect to formally launch this summer and ramp volume over the course of 'twenty 'twenty four and the EU market.
Ben Errez: We have been testing COINI's mobile-based processing in the U.S. in the first quarter and expect to formally launch this summer and ramp up volume over the course of 2024. In the EU market, we received license and merchant processing approval for COINI, and we have a clear line of sight for additional business opportunities. Our banking as a service offering continued to gain traction this quarter as transaction volume exceeded an impressive $600 million with the support of several institutional and banking partners.
Koine: We received license and merchant processing approval for coin and we have a clear line of sight for additional business opportunities our banking as a service offering continues to gain traction this quarter as transaction volume exceeded an impressive $600 million with the support of several institutional and banking partner our banking as a service.
Ben Errez: Our banking as a service platform offers API integrations and foreign exchange capabilities in more than 40 different currencies with local settlements. The service authorizes transactions 24 hours a day on business days and enables payout methods including real-time electronic funds or direct deposits. In addition, our banking as a service platform readily traces transactions, reduces fraud, and maintains strict compliance requirements.
Koine: Platform also.
Speaker Change: Integrations and foreign exchange capabilities and more than 40 different currencies with local settlements. The service authorizes transactions 24 hours a day on business days and enables pay up methods, including real time electronic funds. So direct deposits. In addition, our banking as a service readily choices transactions reduces.
George Oliva: We expect this strategic offering will be a long-term growth driver in a lucrative market. And now, to discuss the details of our financial results, I'd like to turn the call over to our Chief Financial Officer, George Oliver. George, the floor is yours.
Speaker Change: Fraud, and maintain strict compliance requirements. We expect this strategic offering will be a long term growth driver in the lucrative market and now to discuss the details of our financial results I'd like to turn the call over to our Chief Financial Officer, George Oliver George The floor is yours. Thank you Ben I'll review our first.
George Oliva: Thank you, Ben. I'll review our first quarter of 2024 financial performance. Revenue increased 49% to $16.8 million compared to $11.3 million in the first quarter of 2023, reflecting growth in our acquired businesses and rival EU and our continued expansion of our independent sales organization known as an ISO and partnership network. North America revenue increased 10% to $9.7 million for the first quarter of 2024 compared to the first quarter of 2023. International first quarter revenue increased 185% to $7.1 million for the first quarter of 2024 compared to the first
George Oliva: Quarter of 'twenty 'twenty, four financial performance revenue increased 49% to $16.8 million compared to $11.3 million in the first quarter of 2023, reflecting growth in our acquired businesses and rival EU and our continued expansion of our independent sales organizations.
George Oliva: Cost of revenue was $9.7 million for the first quarter of 2024 compared to $6.2 million for the first quarter of 2023. The increase is primarily attributable to growth in transaction volume, which resulted in higher processing fees paid to gateways and commission payments to ISOs in both North America and international segments.
George Oliva: <unk> known as an ISO and partnership network North America revenue increased 10% to $9.7 million for the first quarter of 'twenty 'twenty four compared to the first quarter of 2020 three international first quarter revenue increased 185% to 7.1.
George Oliva: For the first quarter of 'twenty 'twenty four compared to first quarter 2023 cost of revenue was $9.7 million for the first quarter 2024 compared to $6.2 million in first quarter of 'twenty to 'twenty three the increase is primarily attributable to growth in transaction.
unknown: Which resulted in higher processing fees paid to gateways and commission payments to Isos in both North America and international segments operating expenses were $8 $9 million compared to $8.8 million for the first quarter of 2020 three other expenses totaled.
Min Wei: Operating expenses were $8.9 million compared to $8.8 million for the first quarter of 2023. Other expenses totaled $600,000 for the first quarter of 2024 compared to other expenses of $4.3 million for the first quarter of 2023. Our debt reduction strategies resulted in a $1.7 million decrease in interest expense and a $1.7 million decrease in accretion of debt discount. Adjusted EBITDA was negative $0.8 million in the first quarter of 2024 compared to negative $3.0 million in the first quarter of 2023.
Speaker Change: $600000 for the first quarter of 'twenty 'twenty four compared to other expense of $4.3 million for the first quarter of 2023 our debt reduction strategies resulted in a $1.7 million decrease in interest expense and a $1.7 million decrease in accrued.
Speaker Change: And of that discount.
Justice: Justice EBITDA was negative zero point $8 million in the first quarter of 2024 compared to negative $3.0 million in the first quarter of 2020 three regarding liquidity, we are carefully managing our capital and leveraging our strong growth in the EU, we repatriated seven.
Min Wei: Regarding liquidity, we are carefully managing our capital. Leveraging our strong growth in the EU, we have repatriated $7.5 million to date from Europe to shore up U.S. capital resources. At the corporate level, as of March 31, 2024, our cash and restricted cash balance was $88.2 million, unrestricted cash was $10.5 million, and working capital was $3.2 million. I will now turn the call over to Min Wei, our Chief Operating Officer, to provide a review of business operations and our outlook. Thank you, George. I'll detail the processing volumes for our work.
Speaker Change: $5 million to date from Europe to shore up the U S capital resources at the.
Speaker Change: Corporate level as of March 31, 2024, cash and restricted cash balance was $88.2 million unrestricted cash was $10 $5 million and working capital was $3.2 million I will now turn the call over to Min way, our chief operating officer.
Min Wei: To provide a review of business operations and our outlook. Thank you George I'll detail the processing volumes fall verticals discuss some first quarter highlights and then provide the outlook for the second quarter of 2024, our first quarter processing volume across all channels was $994 million. That's it's all expected volume of.
Min Wei: Thank you, George. I'll detail the processing volumes for our verticals, discuss some first quarter highlights, and then provide the outlook for the second quarter of 2024. Our first quarter processing volume across all channels was $994 million, versus our expected volume of $900 to $950 million. This is about a 5% increase sequentially and an increase of about 76% from our first quarter 2023 volume. Our North American merchant services business, including Rival Block, Charge Savvy, American Samoa, and other portfolios, processed $239 million in the first quarter, but about 33% lower than the fourth quarter's $356 million volume and 21% lower than the same period a year ago. This is primarily attributable to the reduced processing volume for some of the high-risk verticals we service and coincides with the product transition from terminal-based processing to mobile app-based processing.
George: $900 million to $950 million. This is about a 5% increase sequentially and an increase of about 76% from our first quarter 2023 volume, our North American merchant services business, including rival block charts savvy Americans them, all and other portfolios process $239 million in the first quarter well above.
Speaker Change: 33% lower than the fourth quarter is $356 million volume and 21% lower than the same period a year ago. This is primarily attributable to the reduced processing volume for some of the high risk verticals, we service and coincides with the product transition from terminal based processing for mobile App based processing, we expect North America volume.
Min Wei: We expect North America volume recovery to pick up steam in the second half of this year. For our FX and international payments portfolio, including the acquired Transact Europe business, now Rival EU, and our new banking as a service offering, we processed $755 million in the first quarter compared to $590 million in business volume in the fourth quarter, an increase of 28%. This represents a 140% increase from the first quarter of $350 million in the first quarter of 2023.
Speaker Change: Calgary to pick up steam in the second half of this year, while FX on international payments portfolio, including the acquired transact here a business now rival EU and all new banking as a service offering we processed $755 million in the first quarter compared to $519 million in business volume in the fourth quarter, an increase of 28%.
Speaker Change: This represents a 140% increase from the first quarter of $315 million in the first quarter 2023, we are making major strides in technology development to augment our product offerings and drive new revenue stream as communicated on the last call. We introduced our mobile App payment channel an M. P O S capability for delivery businesses.
Min Wei: We are making major strides in technology development to augment our product offerings and drive new revenue streams, as communicated on the last call. We introduced our mobile app payment channel and MPOS capability for delivery businesses in the U.S. We are making rapid progress on Payfac as a service and independent software vendor partnerships that will further complement our existing sales channels.
Speaker Change: The U S. We are making rapid progress on pay factor as a service and independent software vendor partnerships that will further complement our existing sales channels and the EU market. We are close to completing a revamp of our banking system software that connects with our partners and allow faster money movement for our business customers. We expect the EU growth momentum to continue at a faster pace.
Ben Errez: In the EU market, we are close to completing a revamp of our banking system software that connects with our partners and allows faster money movements for our business customers. We expect the EU growth momentum to continue at a faster pace than planned and help offset part of the near-term slowdown in North America. Now, turning to our outlook for the second quarter. We expect the processing volume to be in the range of $850 million to $900 million.
Speaker Change: And plant and help offset part of the near term slowdown in North America, turning to our outlook for the second quarter, we expect processing volume to be in the range of 850 million to $900 million. This is lower than in the first quarter 'twenty 'twenty four volume due to compliance and regulatory changes in some of the U S high risk verticals, we service and that has effectively curtailed.
Ben Errez: This is lower than in the first quarter of 2024 volume due to compliance and regulatory changes in some of the U.S. high-risk verticals we service, and that has effectively curtailed transactions. We are improving our product solution that is being rolled out to rebuild the volume. Our total annual volume expectation for 2024 is over $5 billion. For our second quarter revenue outlook, we expect to be in the range of $12 to $14 million, a decrease of approximately 17% to 28% sequentially and a 5% to 19% decrease year over year.
Speaker Change: The actions, we are improving our product solution that is being rolled out to rebuild the volume total year 'twenty 'twenty four volume expectation is over $5 billion for second quarter revenue, although we expect to be in the range of $12 million to $14 million, a decrease of approximately 17% to 28% sequentially and up 5% to 19% decrease the Alba.
Speaker Change: But we rebuilt the business volume for the verticals. We serve is in the U S. In the coming few months, we will advice. If we have any material change to the total revenue guidance up market to $100 million, we are maintaining our target for full year adjusted EBIT of $1 million to $5 million. This concludes my remarks I'd like to now turn the call back to Ben areas, our chairman to.
Ben Errez: As we rebuild the business volume for the verticals we service in the U.S. in the coming few months, we will advise if we have any material change to the total revenue guidance of $90 to $100 million. We are maintaining our target for full-year adjusted EBITDA at $1 to $5 million. This concludes my remarks. I'd like to now turn the call back to Ben Arias, our chairman, to begin our Q&A.
Ben Errez: Begin our Q&A.
Ben Errez: Thank you, Min. Prior to this call, we have received a number of questions that are of interest to all shareholders, so before opening the Q&A to analysts, we'll address those. The first question, I'll direct to Fredi. Why are you confident that you'll be able to double revenues in the second half of 2024 compared to the first half?
Ben Errez: Thank you Ian.
Ben Errez: Prior to this call.
Ben Errez: We have received a number of questions.
Ben Errez: Of interest to all shareholders.
Speaker Change: Before opening the Q&A so annually.
Ben Errez: Those.
Q&A moderator: The first question, although it's a study.
Ben Errez:
Speaker Change: Why are you confident you'll be able to double the revenues in the second half of 2024 compared to the first half.
Fredi Nisan: Thank you, Ben, and thank you to everyone listening. We expect great momentum in Europe via PSP, what we call ISO, the agent portfolio in New York. We are opening new verticals and are especially very excited about the Payfac as a Service solution and licensing model that we put in Europe and are implementing as well in the US for our revenue stream and growth. Second, is our relationship with HCI.
Speaker Change: Thank you Ben and thank you for everyone who listen.
Ben: Were expected to continue our great momentum.
Speaker Change: In Europe.
PSP: Oh, PSP I suppose an agent portfolio in New York.
Speaker Change: And in the U S.
Speaker Change: Opening new verticals, and especially very excited about it as a service solution a licensing model that we put in Europe.
Speaker Change: Implementing again in the U S.
Speaker Change: While revenue stream and growing.
ACI: Second is our relationship with ACI.
Fredi Nisan: We announced a few months ago about our relationship with this new gateway, and we are in the integration process, and we hope to get it live in the beginning of Q3, and that will enable us to turn it on and move our customers into this platform to allow a faster integration and other solutions that exist with this relationship. For example, tokenization system with a new network of Visa and MasterCard, point of banking to offer a quick push to cards, and Visa Direct, another great feature that they bring to the table.
ACI: We announced it a few months back about our relationship with this new gateway and we are.
ACI representative: The integration process, and we hope to get it live.
ACI representative: The beginning of Q3.
ACI representative: And that will enable us.
ACI representative: But then on the and move our customer into this platform to allow a faster integration and other.
Organization representative: Other solution that exists with this relationship for example, the organization within your network.
Organization representative: Hum.
Organization representative: Oh banking dwell for a quicker.
unknown: Wish to crowd and visa direct another great.
Speaker Change: Feature that they bring to the table and the third one that we are very excited to announce.
Fredi Nisan: And the third one that we are very excited to announce is Visa Direct. We just finalized the integration and certification with Visa, and we can go live now and push money through that new network and relationship. And that will allow us to leverage the Visa Direct Network to push money in 80 different countries. We started with the first five, and we have already started pushing money in Canada.
unknown: As a direct.
Visa Direct: We just finalized the integration of certification with visa.
Visa Direct: And we can go lives now and push money through that network and relationship.
Visa Direct: And that will allow us to leverage that network to push money in 80 different countries and we are starting with the first five and we already started pushing money in cash.
Fredi Nisan: So very excited about this and leveraging that solution to offer that to our businesses and banking as a service, and, of course, our Payfax solution. So very, very excited. And this is how we see the company grow in the second half of this year. So very excited. Thank you.
Visa Direct: Canada, So very excited about this and leveraging that solution and offer that to our businesses.
unknown: Our banking as a service and of course, a paper solution. So I'm very very excited and this is how we see the company grow.
unknown: And.
unknown: In the second half of it.
Speaker Change: So very excited thank you.
Speaker Change: Yeah.
Rudy: Thanks Rudy.
Min Wei: The next question is for Min. How did revenue trend in Q1? What is being done to rebuild momentum? And what is your forecast for profitability?
Speaker Change: Next question for me.
Rudy: How does the revenue trend in Q1.
Speaker Change: What is being done to rebuild momentum and what is your forecast for profitability.
Min Wei: Thank you, Ben. To answer the question, our Q1 was affected due to changes in technology and banking compliance issues impacting some of our high-risk verticals, which have continued into Q2. As we reported, these issues have affected the U.S. While Europe continues on a stronger growth trajectory, in the U.S., we're expanding into new verticals to diversify, and we're working on specific identified business opportunities in this new vertical. In addition, we started to monetize our platform as a service licensing business that does not have the same constraints that affected the K1 result.
Ben: Thank you Ben.
Speaker Change: To answer the question here.
Speaker Change: Q1 was affected due to changes in technology and apply it to.
Speaker Change: Impacting something about hybrid vertical.
Rudy: Which has continued into Q2.
Speaker Change: As we reported this issues that affected the U S.
Speaker Change: Europe continues on a stronger growth trajectory in the U S. We're expanding into new verticals to diversify and we walked off specific identified business opportunity.
Speaker Change: Medical and <unk>.
Rudy: Houston, we started to monetize our platform.
Houston: Licensing business.
Houston: That no it would not have the same kind of thing.
Rudy: You wanted to go.
Min Wei: Although this new stream will take time to materialize, we are building momentum in this new vertical, in terms of the question about probability based on our expected revenue and expense bond rate. We expect that just EBITDA in the second half to be positive, and the full year-to-be in the range of 1.5 million dollars. As we have stated in the past, at $100 million revenue, we should be positive on EBITDA, and at $120 million revenue, we expect to be profitable. It is our plan to continue focusing on resources to accelerate revenue growth and reduce non-critical spending to reach our profitability objectives.
Speaker Change: Although this new revenue stream will take time to materialize, we are building momentum.
Speaker Change: Nobody knows.
Rudy: In terms of the question about profitability based on our expected revenue and expense run rate.
Rudy: We expect that.
Speaker Change: Adjusted EBITDA in the second half will be positive.
Speaker Change: And the full year to be in the range of one $5 million.
Speaker Change: We have stated in the past at a $100 million of Avenue.
Speaker Change: Part of it.
Speaker Change: And that $120 million revenue, we expect to be profitable. It is our plan to continue focusing our resources.
Speaker Change: The rebound in the growth and reduced non critical spending.
Speaker Change: Our profitability objectives.
Speaker Change: Okay.
Speaker Change: Thanks Ben.
George Oliva: The next question is for George. Are you comfortable that you have enough liquidity to sustain the past profitability? Why did you pull the weight, and what is your plan to manage the note coming due in April of 2025?
Speaker Change: Our next question is from George.
George: Are you comfortable that you have enough liquidity to sustained profitability.
George: Why did you pulled away.
George: What is your plan to manage the notes coming due in April of 2000.
Speaker Change: Thank you Ben.
George Oliva: First, regarding the proposed raise, we had started the process in Q1 when the stock price was higher. However, as it came closer to fruition, the pricing was not attractive. We made the decision, and the determination, that it was not in the best interest of shareholders to accept the terms, and so we canceled that raise.
Ben: First regarding the proposed raise we had started the process in Q1.
Ben: When the stock price was higher however, as it came closer to fruition our pricing.
Ben: Well, it's not attractive we made the decision the determination that it was not in the best interest of <unk>.
Ben: Shareholders too.
Speaker Change: Accept the terms and so we.
Speaker Change: Cancel debt raise rather than raising.
George Oliva: Rather than raising equity, we pursued a strategy to accelerate the repatriation of cash from Europe to the U.S. Fortunately, they are very profitable and are ahead of plan, and we were able to repatriate $7.5 million to date from the EU to help subsidize the temporary loss of processing in the U.S. However, our cash and cash equivalents are challenging in a North America segment. We are moving money between the other business units, and we are being very aggressive in cost control to help manage the liquidity needs.
REIT: Raising equity REIT.
Speaker Change: Pursued a strategy to ask.
Speaker Change: Accelerate repatriating cash from Europe to the U S. Fortunately are they are very profitable and are ahead of plan and we were able to repatriate seven and a half million to date.
Ben: From the EU.
Speaker Change: Subsidized a temporary.
Ben: Yes.
Speaker Change: Processing and.
Speaker Change: In the U S.
Speaker Change: Our cash and cash equivalents are challenging in North America segment.
Speaker Change: We are moving money between the other business units.
Ben: And we are.
Speaker Change: Being very aggressive and consequent role.
George Oliva: But it's a challenging operation to have multiple business units, some with increasing revenue, and some with decreasing revenue. But we're managing working capital very tightly and centralized in the U.S. Regarding the note, we have extended the maturity of the note in the past, and we are again in active discussion with the note holder to do so again. Next quarter, the note would be within, would be due within one year, and would affect our current ratios. So we're going to get that, hopefully, extended and continue to classify it as a long-term obligation. And with that, I'll give that back to Ben.
Speaker Change: To help manage the liquidity needs but.
Speaker Change: It's a challenging it's a challenging operation to have multiple business units, some with increasing revenue somewhat decreasing revenue.
Speaker Change: But we're managing working capital very tightly and centralized.
Speaker Change: The U S.
Speaker Change: Regarding to note we have extended the maturity of the note in the past and we are again in active discussion with the Noteholder do so again.
Speaker Change: Next quarter.
Noteholder: The note would be within would be due within one year and affect our current ratios, so where we're going to get that hopefully extended in and continue to classify it as a long term obligation.
Noteholder: And with that.
Speaker Change: If I could then.
George: Thank you George.
Ben Errez: I'm going to take the next question. How do you measure your success? Or another way of saying this?
Speaker Change:
George: I'm going to take the next question.
George: How do you measure your success.
Speaker Change: Or another way of saying this.
Ben Errez: What are the most important key performance indices? Where are you doing better, and what training do you expect in 2024? So I do like data science. In fact, shout out to my son, who is a data scientist.
Speaker Change: What are the most important key performance indices.
Speaker Change: Where are you doing better and what things do you expect in 2020.
Speaker Change: Sure.
Speaker Change: So I do like a data science like that.
Son: So my son, who is a data science.
Ben Errez: The best way to measure success is using key performance indicators. The most meaningful KPI for arrival includes total volume of transactions, operating margins, and revenue. Our company's business grew 83% to $3.1 billion in 2023, and we expect 67% volume growth in 2024. In terms of operating models, which is always a challenge in rapidly growing companies, we continue to automate and streamline. We are happy to report that our operating margin run rate is in the high 30s to low 40s.
Speaker Change: The best way to measure the success.
Speaker Change: Is using key performance indicators.
unknown: The most meaningful TPI cool rival.
Speaker Change: The total volume of transactions operating margin.
unknown: Yeah.
Speaker Change: Our company business grew 83%.
Speaker Change: Are you going to $1 billion in 2023, and we expect a 67% volume growth in 2024.
Speaker Change: In terms of our operating margin.
Speaker Change: Which is always a challenge and rapidly growing company.
Speaker Change: We continue to automate and streamline.
Speaker Change: Cost control.
Speaker Change:
Speaker Change: We are happy to report that the operating margin run rate is in the high <unk> low 40.
Speaker Change: Got it.
Ben Errez: [inaudible] in spite of the substantial growth in revenue. In terms of revenue growth, we finished 23rd with about $66 million in revenue. Based on our robust pipeline and new offerings, we anticipate that revenue to grow in 2024 at approximately 35 to 50 percent. Based on the current environment, we're quite pleased with this progress. The last question is back to the Chief Operating Officer. Revenue growth is critical for the success of the company. What are the top three sources for revenues?
Speaker Change: In spite of the substantial growth.
Speaker Change: Yeah.
Min Wei: Thank you
Speaker Change: In terms of revenue growth.
Speaker Change: Finished 23 about.
Speaker Change: Many of dollars in revenue.
Speaker Change: Based on our robust pipeline of new offering you anticipate that to grow in 2024, it's approximately 35% to 50%.
Speaker Change: Based on the current environment, we're quite pleased with this progress.
Speaker Change: The last question is back to chief operating needs.
Min Wei: Our top three sources of revenue are as follows. [inaudible] Malmertian, Acquiring Service Revenue. Number two is banking and service revenue, and we are gaining significant momentum in the European market, as mentioned earlier, and number three is the revenues from the new buddy code and the Anticipated Licensing Revenue from PAYPAK as a service offering, which is due to go to market through the independence of their vendor products, as Nisan, Fredi mentioned earlier. In addition, we recruited more specific resources with payment experience, and the speed of onboarding is improving, giving us confidence in stronger growth in the second half of the year.
Speaker Change: Our revenue growth is critical.
Speaker Change: A company what are the top three sources of revenues.
Speaker Change: Thank you Dan.
Speaker Change: Our top three sources of revenue.
Speaker Change: Hello.
Dan: Number one is.
Dan: All much in acquiring service revenue.
European market: Number two is banking as a service revenue and we are gaining significant momentum in the European market.
European market: I mentioned earlier.
Speaker Change: And number three other revenues from the new verticals.
Speaker Change: And the anticipated licensing revenue payback as a service offering.
Speaker Change: Which is due to go to market.
Speaker Change: Independent software vendor partnership.
Speaker Change: Friday Medicine earlier.
Friday Medicine: In addition, we recruited and more strategic resources repayment experience.
Speaker Change: And the speed of Onboarding, it's improving.
Speaker Change #102: Given us confidence in stronger growth in the second half the year.
Manny: Thank you Manny.
Manny: Okay.
Operator: Operator, at this point, we would like to open the floor for analyst questions. We see that several analysts have registered to ask questions.
Operator: Operator at this point, we would like to open the floor for analyst questions. We see the Federal Register.
Operator: Questions.
Operator: Sure, thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you 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. Our first question comes from the line of Kevin Dede with H.C. Wainwright. Please proceed with your question.
Operator: Sure. Thank you and at this time, we will be conducting a question and answer session. If he would 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.
Manny: In April starting to if you 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 keys.
Manny: Yeah.
Manny: Our first question comes from the line of Kevin Dede with H C. Wainwright. Please proceed with your question.
Kevin Darryl Dede: Thank you for having me on, Ben and Min. It's good to talk to you again. Thank you. So, uh, exactly when was the visa direct integration complete? Was there any contribution to the March quarter, or how far through the June quarter? What kind of results have you seen so far?
Kevin Darryl Dede: Thank you for.
Kevin Darryl Dede: For having me on ban in men.
Kevin Darryl Dede: Talk to you again.
Kevin Darryl Dede: Thank you.
Kevin Darryl Dede: So exactly.
Speaker Change #104: <unk> when was the visa direct integration complete.
Speaker Change #105: Was there any contribution to the March quarter.
Speaker Change #110: Or how far through the June quarter.
Kevin Darryl Dede: What kind of results have you seen so far.
Kevin Darryl Dede: Yeah.
Ben Errez: I'm going to have Min address that. Go ahead, Min. Hey, Kevin.
Matt: I'm going to have the address that go ahead, Matt.
Min Wei: Thank you for the question. So it just reasonably comes to be. It's the second quarter, so it's after the first quarter.
Kevin Darryl Dede: Kevin Thank you for the question.
Kevin Darryl Dede: So.
Kevin Darryl Dede: Hum.
Kevin Darryl Dede: Yeah.
Matt: The second is the second quarter, so slow after the first quarter.
Min Wei: And then we went live with services, you know, as Fredi indicated, our initial currencies we cover in phase one are five currencies, including GPP, U.S. dollars, euro, and Canadian dollars. We already went live with business in Canada, and shortly after that, we expect to, you know, launch into the rest of the phase one currencies. So, you know, we expect to see some improved revenue coming from the banking as a service part of our business as a result of that.
Speaker Change #114: And then we went live with services.
Speaker Change #114: As Fred indicated our initial currencies recover in phase one about five currencies, including G.
Speaker Change #107: He U S dollars euro.
Fred: And our Canadian dollars.
Speaker Change #109: We already work with.
Fred: In Canada and so.
Fred: After that we expect to launch into the rest of the phase one currencies.
Speaker Change #111: So we expect to see some improved revenue.
Speaker Change #115: That's how many pounds of banking it said that you know.
Speaker Change #112: As part of our business.
Speaker Change #118: As a result of that.
Speaker Change #107: Okay.
Speaker Change #107: Okay.
Kevin Darryl Dede: Ben, I'm a little tripped up on the slowdown in the March quarter. On the one hand, and this is on me, right?
Speaker Change #113: But I'm a little tripped up on the slowdown in the March quarter on one hand, and this is on my right I'm not sure that I heard everything correctly on one hand, I heard about the transition.
Kevin Darryl Dede: I'm not sure that I heard everything correctly. On the one hand, I heard about the transition from a terminal to a mobile platform, and on the other hand, I heard about an issue with regulation. So if we could drill down on each of those issues, please, maybe I can come to understand how you see... a stronger second half.
Speaker Change #116: From a terminal to mobile platform.
Speaker Change #117: And on the.
Speaker Change #119: Other hand, I heard about an issue with regulations. So if we could drill down on each of those issues. Please.
Speaker Change #119: Maybe I can come to understand how you see.
Speaker Change #119: A stronger second half.
Speaker Change #119: Yeah.
Ben Errez: Yeah, I'm going to leave the mic with Lynn. (inaudible)
Speaker Change #120: Yeah, and I leave the mic with mint.
Min Wei: Kevin, I think that's a very specific question, you know, maybe multiple questions there. But at a high level, in Q1, we did run into the technology and compliance requirements in a change through our processing channel. We adjusted for that right away. Really, the recovery path we're referring to here, Kevin, is that in conjunction with our switch to mobile payment, mobile app process payment, payment processing. Excuse me. My apologies
Kevin Darryl Dede: Kevin I think that's a very specific.
Kevin Darryl Dede: Maybe multiple questions there.
Speaker Change #121: But at a high.
Kevin Darryl Dede: Hi.
Kevin Darryl Dede: Aw.
Kevin Darryl Dede: In Q1.
Speaker Change #122: Did you run into.
Speaker Change #125: Technology and compliance requirements.
Kevin Darryl Dede: Change through.
Kevin Darryl Dede: Through our processing channel.
Kevin Darryl Dede: Jonathan.
Kevin Darryl Dede: Pat.
Jonathan: Pocket right away.
Jonathan: Really the recovery path, we're referring to here cabin that income.
Jonathan: In conjunction with our switch to a mobile payment mobile mobile App processor.
Jonathan: Based on our processing payment processing excuse me my apologies for that.
Min Wei: And we have fine-tuned the way we process payments for our customers, our merchants, in a more compliant manner. So we're able to switch gears, adjust for that, and load out a more compliant solution. But even with that, it does take time for us to rebuild the user base because, as we mentioned in the last earnings call, we expected consumers to change their behavior and adopt a new payment experience. It's going to take time, and we're working very hard to put together the communication materials training program so that, as we fully load out the mobile-based payment solution, we can ensure that we provide not only the training but also the incentive for the end users to adopt it.
Speaker Change #130: And we have fine tune the way we process you know.
Jonathan: Payments for our customers Albertsons.
Albertsons: In the more compliant manner.
Albertsons: So we are able to switch.
Albertsons: Switchgear adjust with that and build out a more compliant solution, but even with that it does take time for us to rebuild the user base because as we mentioned in the last earnings call we expected.
Speaker Change #126: I assume that's to change behavior and adopt the new payment experience that you're going to take time.
Speaker Change #126: We're working very hard to.
Speaker Change #128: Put together the communication material training program.
Speaker Change #128: That you know athlete.
Speaker Change #128: Rolled out a mobile case.
Speaker Change #127: Payments along with that we can ensure that we provide not only the training, but also the incentive.
Speaker Change #129: The end users adopt so.
Min Wei: So, as a result of that, Kevin, you know, we have updated and adjusted our revenue forecast, you know, hence we made the comment earlier, you know, we expect to rebuild momentum to what it was in the later part of the second quarter, but then we really expect the steam to be picked up starting in the early part of Q3. Yeah, I would add to that.
Kevin: As a result of that Kevin you know, we have updated and adjust it to our revenue in the.
Kevin: Forecasts, hence we made the comment earlier.
Kevin: We expect to rebuild momentum to what's in the later part of second quarter, but then we'd really expect extend to be picked up.
Speaker Change #133: Getting into the early part of Q3.
Ben Errez: Yeah, I would add to that, Kevin, that we like this transition out of hardware into software. It's better for the company, easier to manage inventory, updates are much faster, and all of that leads to better margin. We like that trend, our customers like it, they have no expenses on hardware. This is a good trend; it just takes a little bit of time transitioning and onboarding the old.
Speaker Change #133: Yes, I would add to that Kevin.
Ben Errez: [inaudible]
Kevin: We like this transition out of hardware into software.
Kevin: It's better for the company.
Kevin: As you are to manage inventory.
Kevin: The uptake much faster.
Speaker Change #132: And all of that leads to better margins.
Speaker Change #134: We like that trend.
Speaker Change #137: They are our customers like it they have no expenses on hardware.
Speaker Change #135: This is a good trend it just takes a little bit of time transitioning and onboarding.
Speaker Change #136: The old.
Speaker Change #136: Faithful.
Speaker Change #143: Onto the new platform.
Speaker Change #136: Yeah.
Speaker Change #136: Okay.
Kevin Darryl Dede: Maybe, Ben, you could offer a little color just on the regulatory side of things because I'm still a little confused by that.
Speaker Change #136: Maybe Ben you could offer a little color just on the regulatory side of things because I'm still a little confused by that.
Speaker Change #136: Yes.
Speaker Change #136: Yeah.
Ben Errez: To say that we are not confused by it would be an issue. You know, we work in an environment that is an ecosystem that is fed by a lot of different contributors, and a lot of times, we see trends that are influenced by perception. Sometimes it's a perception of risk by association. Sometimes it's a perception of risk for verticals. And sometimes it's an interpretation of regulation that is otherwise not very clear. So a lot of our partners are telling us, If you do business this way, we will have to reduce your bandwidth. If you do it in another way, then you'll have full... It's better for us to listen to and follow these guidelines, even if they are not always mandated from the regulatory perspective.
Speaker Change #136: Yes.
Ben: To say that we're not confused by it would be.
Speaker Change #136: It's an issue.
Speaker Change #136:
Speaker Change #136: We work in an environment that is an ecosystem that is paid by logo.
Speaker Change #139: Different contributors.
Speaker Change #149: A lot of time, we see trends that are influenced by perception.
Speaker Change #139: Sometimes it's a.
Speaker Change #139: Perception of risk by association, sometimes it's physician perception of risks with verticals.
Speaker Change #144: And sometimes it's the interpretation of regulation that otherwise are not very clear.
Speaker Change #138: So a lot of.
Speaker Change #138: All of our partners are telling us.
Speaker Change #141: If you do business this way.
Speaker Change #141: We will have to reduce your.
Speaker Change #138: Bandwidth.
Speaker Change #142: If you do it in another way.
Speaker Change #140: And then you'll have full.
Speaker Change #154: We're on the ground.
Speaker Change #145: It's better for us to listen and follow these guidelines, even if they're not.
Speaker Change #145: Always.
Speaker Change #151: Mandated from the regulatory perspective.
Ben Errez: And let me add one more thing to what Ben just mentioned. I think it's important. Banking and acquiring, processing, the whole industry is changing. The FDIC is pushing hard on banking, on risk, on capacity; Risa just lost a lawsuit and has to pay $30 billion in fees. The whole industry, the whole ecosystem is changing, and we are just part of that ecosystem. And we are following the guidance of the partners, and we have to adjust to those requirements.
Speaker Change #153: And let me add one more thing.
Speaker Change #150: And that's.
Speaker Change #145: Important.
Speaker Change #145: Banking.
Speaker Change #160: And acquiring processing the whole industry is changing.
Speaker Change #147: See pushing hard on the thinking on the lease.
Speaker Change #146: On capacity.
Speaker Change #152: These are just lost a lawsuit you need to pay a $30 billion.
Speaker Change #158: The whole industry the whole ecosystem is changing and we are just about all of that ecosystem and we all are.
Speaker Change #158: Following the guidance of the policy.
Speaker Change #152: Great.
Ben Errez: And part of it is moving into technology that is more secure, more transparent, like, for example, mobile apps. In Europe, they have new sets of rules as well that are going into certain areas, especially in the crypto area. So the whole world is changing, and we're just adjusting with it. So that's kind of a high level.
Speaker Change #156: You have to adjust the dose.
Speaker Change #148: Requirement and part of that is moving into a technology that is more if you want more transparency.
Speaker Change #154: For example, mobile apps.
Speaker Change #154: In Europe they have.
Speaker Change #157: The rules as well that would be going into certain areas, especially in the crypto area in licensing. So the whole world is changing and we're just adjusting with it so that's kind of a high level.
Speaker Change #157: Yeah.
Kevin Darryl Dede: If I, if I look at revenue as a percentage of transaction volume, I get to about 1.7% in the March quarter, which is down from, I think, over 2% in December. So can you help me understand that trend and how you think it will go? Obviously, um... You know, it's a function of volume, but given there's only a 5% change in volume, it's hard to see that much of a change in revenue versus a percentage of transaction volume.
Speaker Change #159: If I if I look at revenue as a percentage of transaction volume.
Speaker Change #148: I I get to about one 7% in the March quarter, which is down from I think over 2%.
Speaker Change #161: In December so can you help me understand that trend and how you think it goes.
Speaker Change #161: Obviously.
Speaker Change #148: Yeah.
Speaker Change #162: You know the it's a function of volume, but given there was only a 5%.
Speaker Change #163: Change in volume.
Speaker Change #169: It's it's hard to see that much of a change in revenue versus a as a percentage of transaction volume.
Min Wei: Kevin, I'll address that question. That's a good observation, right, you know, that means you really are into the detailed data analytics of our business. And, you know, at a high level, as I mentioned earlier, our top three revenue drivers, one is merchant acquiring service revenue; number two is banking and service revenue, right? So, you know, what happened sequentially between the last quarter of 2023 and the first quarter of this year, even though we have reduced volume for North America acquiring and processing revenue and Steve to reduce volume in the process.
Speaker Change #162: Okay.
Speaker Change #164: Evan I'll address that question.
Speaker Change #164: The nation right you know that means you really you.
Speaker Change #164: You know into the detailed data and it makes up our business.
Speaker Change #165: At a high level as I mentioned earlier, our top three revenue driver wanted as much in acquiring service revenue number.
Speaker Change #165: Number two is banking as a service or Avenue right.
Speaker Change #165: So what happened is sequentially between the last quarter of.
Speaker Change #167: 2023, and the first quarter of this year.
Speaker Change #167: Even though we have reduced volume for North America.
Speaker Change #167: Acquiring a processing revenue.
Min Wei: That said, we more than, you know, offset that by having much increased banking as a service of revenue and volume in Europe. So that's one of the things I like to do is think about the pandemic.
Speaker Change #167: Yeah.
Speaker Change #165: Volume across as best that we more than offset.
Speaker Change #165: Backed by marching increased banking as a service of Avenue and logging Europe.
Speaker Change #165: So that's one thing.
Speaker Change #165: Alright.
Speaker Change #165: And.
Min Wei: I think that's basically what you're looking at is the rate being compared against volume. The residual percentage for banking as a service revenue is lower than the acquiring in a business we have. So as a result of that, when you have increased volume, you know, for banking and service revenue, but then has a lower residual percentage compared to, you know, higher residual percentage for the acquiring business, you know, that's why you see, even though, you know, we have improved volume overall, but then the residual percentage probably declined quarter over quarter because, Okay, hopefully that makes sense to you.
Speaker Change #165: I think that's that's basically why are you looking at that as a race being.
Speaker Change #165: And Pat against volume.
Speaker Change #165: The residual percentage of our banking as a service.
Speaker Change #165: It is lower than that.
Speaker Change #165: Acquiring.
Speaker Change #165: Business, we have.
Speaker Change #165: So as a result of that when you have the increased volume.
Speaker Change #165: Banking services revenue, but that had a lower residual percentage compared to you know high residual percentage for the acquiring business.
Speaker Change #165: That's why you see even though you know we have improved volume overall.
Speaker Change #165: But then the residual percentage probably decline quarter over quarter because of that.
Speaker Change #165: Hopefully that makes sense to you so I would.
Min Wei: I would add, so that is basically a mix between Europe and the US, as Europe is a larger percentage of our business. That's why that overall rate declined, even though Europe is very profitable, but the residual rate is lower on the transactions than we had in the US. I do think 2% is still a good ballpark metric long term.
Speaker Change #165: I would add so that you know that.
Speaker Change #165: That is basically a mix between Europe and the U S.
Speaker Change #168: As Europe as a larger percentage of our business.
Speaker Change #168: That's why the overall rate declined.
Speaker Change #168: Even though Europe is very profitable but.
Speaker Change #168: The residual rate is lower on the transactions than we had in the U S.
Speaker Change #168: So, but I do think I do think 2% is still a good a good ballpark metric long term.
Ben Errez: Right, and this is Ben again. This is the area where we anticipate the stabilized performance to go back to the regional... performance. I would also like to draw your attention to what I said earlier to a previous question about the KPIs. [inaudible]
Ben: Right and this is the this is Ben again.
Ben: The area, where we are.
Ben: Anticipating the cellulite performance, who go back.
Ben: But as you know.
Ben: Performance.
Ben: I would also direct your attention to.
Ben: What I said before to the previous question about the Kpis.
Ben: Or.
Ben: Gross operating margins have not changed.
Ben: Even though.
Ben: The percent of revenue out of volume.
Ben: Maybe shrunk.
Ben: So that's that's a very important and distinct.
Kevin Darryl Dede: Thank you for highlighting that, Ben. I appreciate it. Thank you very much for your explanations, gentlemen. I'll hop back in the queue.
Speaker Change #171: Thank you for highlighting that ban I I appreciate it. Thank you very much for your explanations gentlemen, I'll hop back in the queue.
Ben Errez: Thanks Kevin; we always appreciate your support.
Speaker Change #173: Thanks, Kevin we always appreciate your support.
Speaker Change #172: Operator back to you.
Operator: Thank you. And as a reminder, if anyone has any questions, you may press star 1 on your telephone keypad to join the queue. And our next question comes from the line of Kevin Dede with AC Wainwright. Please proceed with your question.
Ben: Thank you and as a reminder, if anyone has any questions. You May press star one on your telephone keypad to join the queue.
Speaker Change #170: And our next question comes from the line of Kevin Dede with H C. Wainwright. Please proceed with your question.
Kevin Darryl Dede: Thank you very much. I thought I'd just take a backseat for someone else, but... Help me understand the evolution of banking as a service, blockchain as a service, and Ryvyl's block offering and how you're positioning Coiny within the realm.
Kevin Darryl Dede: Hey, Thank you very much I I thought I'd, just take a backseat for someone else but.
Speaker Change #178: Help me help me understand the evolution of banking as a service blockchain as a service.
Speaker Change #178: Rivals block offering and how you're positioning koine within the realm.
Ben Errez: Okay, on that strategic question, back to CEO Fredi.
Kevin Darryl Dede: Okay.
Speaker Change #179: A strategic question back to see pretty.
Kevin Darryl Dede: Okay.
Kevin Darryl Dede:
Fredi Nisan: So let's start with banking as a service. Thank you for your service in New York.
Speaker Change #174: So let's start with our banking as a service.
Speaker Change #179: Thank you so much.
Speaker Change #176: Service the new World.
Speaker Change #170: Hum.
Fredi Nisan: The license for other financial institutions, companies, banks, to utilize our bankbook, our license, and be able to offer their customers different services, SEPA payment, wire payment, and others. And now we're going to open up Visa Direct as part of the on and off ramp solution. All of that is now being implemented and utilized in a variety of ways. So we see the volume already; we see how the solution can help other banks and companies. With that process, we see huge growth and opportunity in that space. So that's one.
Speaker Change #170: A nice thing.
Speaker Change #175: Or are they were finished.
Speaker Change #177: The company thanks.
Speaker Change #182: We utilized our backbone.
Speaker Change #182: Licensing.
Speaker Change #177: Be able to offer their customer different services.
Speaker Change #175: Therefore payments wire payment.
Speaker Change #181: Perfect solution and now we go into helping US visa direct is about those would be on and off ramps solution.
Speaker Change #175: All of that.
Speaker Change #175: Now being implemented can be utilized in a variety of ways. So we see the volume already we.
Speaker Change #175: We see how the solution can help other banks and companies through that process, we see a huge growth opportunity in that space.
Speaker Change #175: So that's one.
Fredi Nisan: You asked about the blockchain service. We are testing that solution. We're working with Corda directly on a few opportunities that we're trying to understand how we're going to go live with them. But the service is up and running, but it's in testing still. This is a big lift.
Speaker Change #175: Cloud looked at surface.
Speaker Change #175: It seems that solution, we watching which caused that correctly.
Speaker Change #175:
Speaker Change #175: A few.
Speaker Change #175: Opportunities, but we try to understand how are we going to go live with that but the surveys.
Speaker Change #175: And running.
Speaker Change #175: Interesting.
Speaker Change #175: Big lift.
Fredi Nisan: But we are still very excited about the opportunity, and we're going to share more, hopefully, in Q2. That's in regards to the blockchain as a service and how coinies benefit from that. Courtney is the payment software that makes the Paypal service and other services available, especially in the US.
Speaker Change #200: We're very very excited about the opportunity and we're going to share more hopefully in Q2.
Speaker Change #184: In regards to the blockchain as a service how coin these benefit from that.
Speaker Change #175: Our corn needs the payment.
Speaker Change #175: Software that makes it very fast service and other services available, especially in the U S.
Fredi Nisan: We're still working on deploying COINI in Europe. We did mention before that we have just received licenses in Europe to operate as a payment facilitator. I believe that's the correct license.
Speaker Change #175: We're still working on deploying Courtney in Europe.
Speaker Change #175: We did mention before that we have court.
Speaker Change #175: Just receive licenses in Europe.
Speaker Change #175: To operate.
Speaker Change #189: As a payment facilitator.
Speaker Change #175: That's the correct pricing.
Fredi Nisan: They allow us to do payments, hold assets, renewals, and in the U.S., we are working with our partners, First Data; we have a team with First Data to point you at the paycheck to our partners. So we have a lot on our plate that we're trying to, you know, turn on as quick as possible and start to generate revenue as quick as possible. But all of those projects we've been working on for a long time.
Speaker Change #175: And allow us to do.
Speaker Change #186: Well I said the new rule.
Speaker Change #186: Yes.
Speaker Change #186: We are working with our partners first state that we haven't seen with first data.
Speaker Change #190: You have to pay for it.
Speaker Change #183: To our partners.
Speaker Change #183: I have a lot on our plate that we're trying to you know turn.
Speaker Change #183: Turn on it which is possible and start to generate revenue, let's look at festival.
Speaker Change #183: All of those project awards for a long time.
Fredi Nisan: It's heavy on compliance regulation, but we're now there. We have arrived at the point of turning everything on. So I hope I answered the question. I didn't miss anything, I hope. But through all of those tools and solutions, that's how we see a recovery in the second half of the year.
Speaker Change #183: It's a happy on compliance regulation.
Speaker Change #183: But we know there are we arrived there.
Speaker Change #183: Everything on so I hope I answered the question I didn't Miss anything I hope, but through all of those tools and solutions, that's how we see a recovery.
Speaker Change #183: In Q in the second half of the year.
Kevin Darryl Dede: Yeah, Freddy, just to add to that, how should I look at rival block? versus Ryvyl, within the context of banking as a service and Coiny's functionality.
Speaker Change #185: Yeah, Freddie just just to add on that how how should I look at rival block versus rival.
Speaker Change #187: Within the context of banking as a service.
Speaker Change #202: And and <unk> functionality.
Fredi Nisan: So Ryvyl Blok is a separate product. It was designed, I would say, this way.
Speaker Change #192: So rivaled blocks is a separate product logger blog.
Speaker Change #188: Guy and I would say the play a little chimps without me.
Fredi Nisan: It's a product for companies that want to go through what we call a digital transformation. They want to get into blockchain infrastructure, and allow, for example, a bank or a fintech company to implement blockchain services without going through a year or two of implementation, and that's for life; it could not be months or years. So that's kind of the main goal of blockchain as a service, basically, transformation and getting banks and other financial institutions into that new technology as quickly as possible.
Speaker Change #188: It's a product for.
Speaker Change #188: Yes.
Speaker Change #191: That's one that go through our what we call it.
Speaker Change #191: Digital transformation, they want to get into blockchain infrastructure allow for example.
Speaker Change #188: Sure.
Speaker Change #193: I think the company to implement blockchain services without going through a year or two of implementation.
Speaker Change #188: And for life.
Speaker Change #188: And not in months or years.
Speaker Change #188: But that's kind of the the main goal of the blockchain as a service basically is transformation and getting banks and other financial institutions into that new technology as quick as possible coining using the same backbone.
Fredi Nisan: Coyney is using the same backbone. The front end of it is offering the functionality, the ability to process payment, the ability to onboard compliance, but the underlying infrastructure is the same block. We're utilizing CODA infrastructure. Hopefully, that helps them.
Speaker Change #188: Offer.
Speaker Change #188: One thing, though that is offering the functionality.
Speaker Change #188: The ability to process payment.
Speaker Change #198: Our ability to onboard O'brien.
Speaker Change #195: Thank you.
Speaker Change #188: Underlying infrastructure.
Speaker Change #188: Is it say blocks, we utilize them called out infrastructure hopefully that household.
Kevin Darryl Dede: Yeah, okay, so if I were to summarize it, Ryvyl Block is basically the name that you've given to Blockchain as a Service.
Speaker Change #194: Yeah, Okay. So if I were to summarize it there.
Speaker Change #199: Rival block is basically the name that you've given block chain as a service.
Fredi Nisan: That's correct, it's an internal name, yes, Ryvyl Block, correct. Okay.
Speaker Change #196: That's correct you can internally, yes correct.
Kevin Darryl Dede: Okay, okay. Apologies, it was just, you guys have, to your point, Fredi, you have a lot on your plate, and it's... You know, hard for a simpleton like me to sort it all out, so I apologize, but I do really appreciate the hand-holding.
Speaker Change #196: Correct, Okay. Okay.
Speaker Change #204: Apologies. It was just a you guys have to your point Friday, you have a lot on your plate.
Speaker Change #188: And.
Speaker Change #206: You know hard for a simpleton like me to sort it all out so I apologize, but I do I do really appreciate the handholding.
Ben Errez: Thanks for your continued support, Kevin.
Speaker Change #196: Thanks for your continued support there Kevin.
Kevin Darryl Dede: Oh, yeah, no, um, my pleasure. You know, Ben, you've talked a lot about your international expansion, and you focused a lot on Europe, but I, It just seems to me that there are other, you know, maybe not necessarily first world countries, but other countries that might offer a similar opportunity that some of the Eastern Europeans want, such as maybe South Africa or Nigeria, maybe even Egypt. How are you looking sort of beyond beyond Europe and expanding your international opportunities?
Speaker Change #196: Oh, Yeah no.
Speaker Change #196: [laughter].
Kevin: My pleasure.
Speaker Change #203: You know Ben you've talked a lot about your international expansion and you focused a lot on Europe, but.
Speaker Change #203: Yep.
Speaker Change #201: It just seems to me that there are other you know maybe not necessarily first world countries, but other countries.
Speaker Change #201: That might deserve our.
Speaker Change #196: Or it might or might offer a similar opportunity that some of the eastern Europeans want offer such as maybe South Africa, Nigeria, maybe even Egypt.
Speaker Change #211: How are you looking sort of beyond.
Speaker Change #196: Yes.
Speaker Change #212: Beyond Europe.
Speaker Change #205: And in expanding your international opportunity.
Ben Errez: Yeah, so, um... That's a good question and shows that someone is paying attention. So, this game is a lot about the efficiency of replication. We have more business that we can onboard in a reasonable time. What we do now is pick the lowest hanging fruit. Even though the company is growing year over year, 80, 100%, and as we issued guidance before on this call, we anticipate the overall volume of business to grow from the $3 billion range to the $5 billion range.
Speaker Change #208: Yeah. So.
Speaker Change #210: That's a good question.
Speaker Change #196: And demonstrates that the someone who's paying attention. So this game is a lot about efficiency of breath.
Speaker Change #207: We have more business that we can you know.
Speaker Change #196: Onboard in a reasonable time.
Speaker Change #196: And what can we do not speak.
Speaker Change #196: The lowest hanging fruit still even though the company is growing year over year 80, 100% and as we are.
Speaker Change #196: You should guidance before in these calls we anticipate.
Speaker Change #196: Overall volume of business to grow from the $3 billion range to the 5 billion range.
Speaker Change #196:
Ben Errez: We're still in pursuit of the most efficient revenue that we can take. You know, American Samoa was an interesting case study for us where we entered the market and now control the majority of transactions supporting the GDP in that nation. And we're very happy about that case study, proving a point. However, I'm going to end the video here. I hope you enjoyed it.
Speaker Change #196: We're still in pursuit of the most efficient revenue.
Speaker Change #196: We can because we can take.
Speaker Change #196: You know American Samoa was an interesting case study for us where we entered the market and now control the majority.
Speaker Change #196: All transactions.
Speaker Change #213: Putting that the GDP in the nation.
Speaker Change #213: And we're very happy about that case study.
Speaker Change #213: <unk>.
Speaker Change #209: Proving a point.
Speaker Change #209: However.
Ben Errez: I'll see you next time. Looking at the quality of revenues that we currently accumulate in the European market just tells us that this is where we need to be picking up food for the moment. Obviously, at the end of the day, we'll go where the business is. However, we'll first play to our strengths. And then, even though we may be leaving some money on the table, we have to first address the most efficient revenue growth before we look to more exotic work.
Speaker Change #209: Looking at the quality of revenues that we currently accumulate in the European market.
Speaker Change #209: It just tells US that this is where we need to be picking up good for the moment.
Speaker Change #196: Obviously, you know at the end of the day.
Speaker Change #196: We'll go where business is.
Speaker Change #196: However, well first play on our strengths.
Speaker Change #196: And then even though we may be leaving some money on the table.
Speaker Change #196: But.
Speaker Change #196: We have to address.
Speaker Change #196: No.
Speaker Change #196: The the most efficient revenue growth.
Speaker Change #217: Before we look to more exotic Margaret.
Speaker Change #196: Yeah.
Kevin Darryl Dede: This is a great segue, Ben. You mentioned America's Samoa.
Speaker Change #216: This is a great segue, Ben you mentioned American Samoa.
Kevin Darryl Dede: I remember on multiple calls last year, you referenced what you thought would be opportunities for other sorts of closed systems, such as that in other potential verticals. And I understand, obviously, there's a lot on your plate, and you're looking for the low-hanging fruit. It totally makes a ton of sense. I get it. I'm just wondering if you still see that opportunity or if your experience more recently in American Samoa has left you feeling that you want to dedicate less time and resources to exploiting it.
Speaker Change #214: I I remember on multiple calls last year, you referenced what you thought would be an opportunities for other sort of closed systems, such as that and other potential verticals.
Speaker Change #214: Yes.
Speaker Change #222: Understand obviously, there's a lot in your plate and you're looking for a low hanging fruit and totally makes a ton of sense.
Speaker Change #219: I get it I'm just wondering if you still see that opportunity or if your experience more recently in American Samoa has left you feeling that you want to dedicate less time and resources to exploiting that.
Min Wei: So, Kevin, I'll answer that question for the man. So, America Samoa continues to be a very strategic business opportunity for us in our portfolio. We continue the process, you know, the volume, as we indicated previously, servicing more than 60,000 people per day. As a quick reminder, we have a five-year exclusive partnership on the island, and we are continuing our conversation with our partner there, you know, for additional processing needs. You know, we're not in a position to share more details, but we're in a dialogue about that. Now, secondly, you know, for smaller contained... you know, ecosystems, just such as American Samoa.
Kevin: So Kevin I'll answer that question does the man So American Samoa continue to be very strategic in the business opportunity for us in our portfolio.
Speaker Change #220: We continue the process you know the volume as we indicated previously sort of thing more than 60%.
Speaker Change #220: On the island.
Speaker Change #196: We have a a quick reminder, we have a five year exclusive partnership with the island.
Speaker Change #196: And we are.
Speaker Change #196: Continuing our conversation with our partner there.
Speaker Change #196: For additional processing needs.
Partner: In a position to share more details about the dollar for that.
Speaker Change #196: Now secondly, you know for smaller contained.
Speaker Change #215: Ecosystems, such as that market some all are well.
Min Wei: We continue to manage all the major business opportunities in our sales pipeline. As Ben mentioned, we prioritize based on the level of effort involved, alignment with our product roadmap, as well as resource utilization. You know, we do have adequate major big-ticket opportunities in the pipeline in the near term that we are prioritized on.
Speaker Change #215: Continue to manage all the major business opportunities in our sales pipeline.
Speaker Change #215: Graham Madison, we prioritize based on the level of effort involved.
Speaker Change #215: With our product roadmap as well as resource utilization you know, while we do have adequate major.
Graham Madison: And the pipeline near term that we prioritize on a lot of time can pursue other you know.
Speaker Change #215: Island business, even though we do have.
Speaker Change #215: Some potential with them along the path.
Speaker Change #215: Okay.
Ben Errez: Let me add a couple of words to that. This is Ben again. [inaudible] Remember that because of the technology migration, we experienced a little bit of a drop in revenues onshore for Q1, and I'm going to be back in 10 minutes. I'm going to talk a little bit about what we're doing with the program. And I'm going to start by saying I think it's prudent of the company to first backfill that with the most efficient way that we can before venturing out to other opportunities that are more fringe at this point. I hope that message is clear. Yeah, yeah.
Speaker Change #218: Yeah, Let me add a couple of words on that.
Ben: This is Ben again.
Speaker Change #218:
Speaker Change #218: Remember that the we are because of the technology migration, we experienced a little bit of a drop in the revenues onshore for Q1.
Speaker Change #218:
Speaker Change #230: I think it's prudent of the company.
Speaker Change #218: To backfill.
Speaker Change #218: Backfill that with the most efficient way we can.
Speaker Change #226: Before venturing out to other opportunities that are more range at this point.
Speaker Change #226: I hope that the message is clear.
Kevin Darryl Dede: Yeah, yeah, no, absolutely not. But just to be clear, guys, I guess I was thinking of closed ecosystems, sort of beyond a geographic implementation, maybe something more akin to, Thank you very much for the explanation. I appreciate it. I'll cede the floor at this point. Thank you very much, gentlemen.
Speaker Change #228: Yeah, Yeah, no absolutely.
Speaker Change #226:
Speaker Change #229: But just just to be clear midnight, I guess I was thinking of closed ecosystems sort of beyond geographic implementation.
Speaker Change #226: Maybe something more akin to them.
Speaker Change #226: Squares payment processing.
Speaker Change #224: And alright, thank you very much for the explanation I appreciate it.
Speaker Change #233: I'll cede the floor at this point, thank you very much gentlemen.
Kevin: Thanks, Kevin.
Ben Errez: Thank you, and we have reached the end of the question and answer session. I'd now like to turn the call back to Ben Errez for a closing remark.
Speaker Change #231: Thank you and we have reached the end of the question and answer session now I'd like to turn the call back to Manhattan for closing remarks.
Speaker Change #227: Thanks, operator.
Ben Errez: Thank you all for joining us today and for your thoughtful questions and participation. On a personal note, Fredi and I are the two largest shareholders at Ryvyl, and we are excited about our 24 growth plan to diversify revenues. And I hope to see everyone at our next update for the Q2 results in August. Have a great day, everybody.
Speaker Change #225: Thank you all for joining us today and for your thoughtful questions and took a station on a personal note radian NIE.
Speaker Change #225: Two largest.
Speaker Change #232: And I'll just shareholders Drybulk.
Speaker Change #225: And we are excited about 24.
Speaker Change #218: Growth plan.
Speaker Change #218: Good.
Speaker Change #218: Diversified revenues.
Speaker Change #218: And Ah.
Speaker Change #218: Hope to see everyone on our next update or the Q2 results in August.
Speaker Change #218: Have a great day everybody.
Operator: This concludes today's conference call. Thank you. You may now disconnect.
Speaker Change #234: This concludes today's conference call. Thank you you may now disconnect.
Speaker Change #218: Okay.
Speaker Change #218: [music].
Speaker Change #218: Yeah.
Speaker Change #218: [music].
Speaker Change #218: Yeah.
Speaker Change #218: [music].