Q1 2024 Bitcoin Depot Earnings Call
Mark: Good morning, and welcome to Bitcoin's Depot's first quarter 2024 conference call. My name is Mark, and I will be your conference operator.
Good morning, and welcome to Bitcoin people first quarter 'twenty to 'twenty Four conference call. My name is Mark and I wouldn't be a conference operator today.
Mark: Before this call, Bitcoin's Depot issued its financial results for the first quarter ended March 31, 2024, in a press release, a copy of which will be furnished in a report on Form 8K filed with the SEC and will be available in the Investor Relations section of the company's website. Joining us on today's call are Bitcoin Depot CEO Brandon Wentz, CFO Glenn Lebowitz, and COO Scott Buchanan. Following their remarks, we will open the call for questions before we begin. Alex Captain from Gateway Group will make a brief introductory statement. Mr. Thompson, please proceed.
Speaker Change: Alrighty skull craftspeople issued its financial results for the first quarter ended March 31 2024.
In our press release, a copy of which would be for anything in our report on form 8-K filed with the S E T and it'll be available.
Mark: Nations section of the company's website.
Speaker Change: Joining us on today's call are <unk> CEO Brendan win Yep.
Speaker Change: Oh, Glenn Leibowitz, Ankiel Oh, Scott.
Speaker Change: Following their remarks, we will open the call for a question on the department with Mcgill.
Great group: Got it Great group will make a brief introductory statement.
McGill: Please proceed.
Alex Captain: Great, thank you, operator. Good morning, everyone, and welcome to Bitcoin Depot's first quarter 2024 conference call. Before management begins their formal remarks, we'd like to remind everyone that some of the statements we're making today may be considered forwarding statements under securities laws and involve a number of risks and uncertainties. As a result, we caution that there are a number of factors, many of which are beyond our control, which could cause actual results and events to differ materially from those described in the forward-looking statement. Here are some more detailed risks, uncertainties, and assumptions.
Operator: Great. Thank you operator, good morning, everyone and welcome to <unk> first quarter 2024 conference call.
Management: Before management begins their formal remarks, we'd like to remind everyone that some statements. We're making today may be considered forward looking statements under securities laws and involve a number of risks and uncertainties.
Management: As a result, we caution that there are a number of factors many of which are beyond our control, which could cause actual results and events to differ materially from those described in the forward looking statements.
Speaker Change: For more detailed risks uncertainties and assumptions relating to our forward looking statements. Please see the disclosures in our earnings release and public filings made with the Securities and Exchange Commission.
Alex Captain: Relating to our forward-looking statements, please see the disclosures in our earnings release and public filings made with the Securities and Exchange Commission. We disclaim any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.
Speaker Change: We disclaim any obligation or undertaking to update forward looking statements.
Speaker Change: Reflect circumstances or events that occur after the date. The forward looking statements are made except as required by law.
Alex Captain: We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and the reconciliation tables to applicable GAAP measures and our earnings release carefully as we consider these metrics. We refer you to our filings with the Securities and Exchange Commission for detailed disclosures and descriptions of our business, as well as uncertainties and other variable circumstances, including but not limited to risks and uncertainties identified under the caption, risk factors, in our recent filings.
Speaker Change: We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and reconciliation tables.
Speaker Change: Applicable GAAP measures in our earnings release carefully as you consider these metrics.
Speaker Change: We refer you to our filings with the Securities and Exchange Commission for a detailed disclosures and descriptions of our business as well as the uncertainties and other variable circumstances, including but not limited to risks and uncertainties identified under the caption risk factors in our recent filings.
Alex Captain: You may get Bitcoin Depot's Security and Exchange Commission filing for free by visiting the SEC website at www.sec.gov. I would like to remind everyone that this call is being recorded and will be made available for replay via a link available in the investor relations section of Bitcoin Depot's website. A supplemental earnings presentation highlighting our Q1 performance has also been made available on our IR website. Now, I will turn the call over to Bitcoin Depot's CEO, Brandon Mintz. Brandon
SEC: You May get <unk> Securities and Exchange Commission filings for free by visiting the SEC website at Www Dot SEC Dot Gov.
Speaker Change: I would like to remind everyone that this call is being recorded and will be made available for replay via early.
Investor Relations: Link available in the Investor Relations section of <unk> website.
Investor Relations: A supplemental earnings presentation, highlighting our Q1 performance has also been made available on our IR website.
Speaker Change: Now I will turn the call over to <unk> CEO Brendan mix Brandon.
Brandon Mintz: Thanks, Alex. And good morning, everyone.
Speaker Change: Thanks, Alex and good morning, everyone. Thank you for joining our first quarter 2024 conference call I'd like to briefly discuss some recent developments across our business and what gives us confidence in the year ahead.
Brandon Mintz: Thank you for joining our first quarter 2024 conference call. I'd like to briefly discuss some recent developments across our business and what gives us confidence for the year ahead. During the first quarter, we continued to focus on growing our kiosk network and building a robust pipeline of major regional and national retail partners to enhance our footprint. Our momentum is strong as we are ahead of schedule for reaching our goal of 8,000 installed BTMs by the end of this year after signing over 2,000 new retail locations year to date.
Speaker Change: During the first quarter, we continue to focus on growing our kiosk network and building a robust pipeline of major regional and national retail partners to enhance our footprint.
Speaker Change: Our momentum is strong as we are ahead of schedule for reaching our goal of 8000 installed bts by the end of this year after signing over 2000, new regional locations year to date.
Brandon Mintz: Much of this success is due to the expansion of our sales team and purchases of over 3,200 kiosks in 2024. These recent purchases will increase our total kiosk suite size to over 10,400 kiosks. Once all kiosks are delivered on May 9th, according to CoinATMradar.com, excluding Bitcoin Depot, there will be roughly 26,600 Bitcoin ATMs in total between the US and Canada.
Speaker Change: Much of this success is due to the expansion of our sales team and purchases of over 3200 kiosks and 2020 for these.
Sales Team: These recent purchases will increase our total kiosks fleet size to over 10400 kiosks.
Speaker Change: Kiosks are delivered on may 9th According to current ATM radar Dot com.
Bitcoin depot: Bitcoin depot, there were roughly 26600 Atms in total between the us and Canada.
Brandon Mintz: These figures put into perspective the industry-leading market share position Bitcoin Depot is continuing to gain. In the last two quarters, we have focused heavily on relocating underperforming BTMs to new locations, which in the past has shown to increase profitability per kiosk on average significantly after a few months, while we do not get that benefit immediately. Over time, the increase in profitability typically continues to grow as the BTMs ramp up. For example, in March of this year, the average monthly revenue per kiosk for BPMs that have been installed for 12 to 24 months was 87% higher than BPMs installed for less than 12 months. In this calculation, the BTMs installed for less than one year averaged roughly four months of operation since the time of installation at the location.
Bitcoin depot: These figures put into perspective, the industry, leading market share position deep.
Bitcoin depot: <unk> is continuing to gain.
Bitcoin depot: And the last two quarters, we have focused heavily on relocating underperforming bts to new locations.
Bitcoin depot: Switched from the past has shown to increase profitability per kiosk on average significantly after a few months.
Speaker Change: While we do not get that benefit immediately.
Speaker Change: Over time, the increase in profitability typically continues to grow as the bts ramp up.
Speaker Change: For example in March of this year, the average monthly revenue per kiosk or BPM that have been installed for 12 to 24 months was 87% higher than bcm's installs for less than 12 months.
BCM: And this calculation the bcm's installed for less than one year averaged roughly four months of operation since the time of Intel at the location.
Brandon Mintz: As of the end of Q1 2024, around 2,000 of our kiosks have been installed for less than one year and still need more time to ramp up to their full potential. Additionally, once we receive delivery of all of our purchased and ordered kiosks, we will reach an installed fleet of roughly 10,000 total BTMs by the time they are all installed. This number accounts for 400 kiosks in transit or undergoing maintenance or repair at any given time.
Speaker Change: As of the end of Q1 2020 for around 2000 of our kiosks have been installed for less than one year and still need more time to ramp up to their full potential.
Speaker Change: Additionally, once we receive delivery of all of our purchased an order kiosks, we will reach an installed fleet of roughly 10000 total bts by the time they are all installed.
Speaker Change: This number accounts for 400 kiosks and transit are undergoing maintenance or repair at any given time.
Brandon Mintz: Between the ramp of our newly installed kiosks and the kiosks we will receive over the course of 2024 from orders and purchases, there is clearly very large growth potential baked into the business as it sits today. As part of our North American expansion, we recently signed many new agreements, expanding across several states and increasing their fleet of deployed kiosks while growing our industry-leading market. In April, we announced the purchase of approximately 2,300 Bitcoin ATMs at a significant discount, which will enable us to meet increased retailer demand. And we signed our first major grocery store partnership with Fairway Stores for $66 billion.
Eric: Between the ramp of our newly installed kiosks and the kiosks, we will receive over the course of 2020 for some quarters and purchases, Eric clearly very large growth potential baked into the business as it sits today.
Eric Smith: As part of our North American expansion, we recently signed many new agreements spanning across several states and increased our fleet of deployed kiosks.
Eric Smith: While growing our industry leading market share.
Eric Smith: In April we announced the purchase of approximately 2300 <unk> hundred Atms at a significant discount which will enable us to meet increased retailer demand and we signed our first major grocery store partnership with fairway stories for 66 locations.
Brandon Mintz: We also strengthened our profit share program through partnership with and an investment fund. The profit share program, Bitcoin Depot, has already added more than 300 additional BPM locations to this program in 2024, and we look forward to working with other partners to expand this program further. Office chair partners benefit from Bitcoin Depot's expertise in operating BTMs and integration with Bit Access Software, the premier software suite for Bitcoin ATM operations. Our profit share program provides a capital-efficient strategy for Bitcoin Depot's continuous expansion this year, as we aim to have the largest suite of Bitcoin APMs in the company's history.
fairway stories: We also strengthened our profit share program through a partnership with <unk> and an investment fund.
fairway stories: Profit share program Bitcoin depot has already added more than 300 additional ATM locations. In this program in 2024, and we look forward to working with other partners to expand this program further.
Bitcoin depot: Okay sure partners benefit from <unk> expertise and operating Pts and integration with FID access software the Premier software suite for Bitcoin ATM operations.
Bitcoin depot: Our profit share program provides the capital efficient strategy or bitcoin depot to continuous expansion. This year as we aim to have the largest fleet of Atms in the company's history.
Brandon Mintz: We remain focused on expanding our footprint internationally, and we recently announced expansion efforts into Puerto Rico and Australia. We believe both Puerto Rico and Australia may support a much larger supply of Bitcoin ATMs compared to what they have today, and we look forward to working closely with our new location partners to provide Bitcoin to new customers. Today, our pipeline of expansion opportunities remains as strong as ever. In summary, we remain encouraged by the trends we're seeing across our business and look forward to deploying Kiosk into new locations to support mass crypto adoption as the world's leading Bitcoin ATM network. Now I'll turn the floor over to our CFO, Glenn Leibowitz, who will provide more in-depth insights into our financial performance and business outlook.
Bitcoin depot: We remain focused on expanding our footprint internationally.
Bitcoin depot: And we recently announced expansion efforts into Puerto Rico and Australia.
unknown: We believe both Puerto Rico, and Australia may support a much larger supply a bitcoin atms compared to what they have today and we look forward to working closely with our new location partners to provide bitcoin to new customers.
unknown: Today, our pipeline of expansion opportunities remains as strong as ever.
Speaker Change: Summary, we remain encouraged by the trends, we're seeing across our business and look forward to deploying kiosks into new location to support mass crypto adoption as the world's leading ATM network.
Speaker Change: Now I'll turn the floor over to our CFO, Glenn Leibowitz, who will provide more in depth insights into our financial performance and business outlook Glenn.
Glenn Leibowitz: Thanks, Brendan and good morning, everyone.
Glenn Leibowitz: Thanks, Brandon, and good morning, everyone. I'll start with a detailed review of our first quarter 2024 results, and we'll finish with a discussion on guidance. First quarter revenue declined approximately 15 percent year-over-year to $138.5 million compared to $163.6 million in last year's first quarter. This decline was largely driven by the impact of unfavorable legislation that was recently passed in California, which went into effect in January of this year, along with relocating kiosks during the quarter to optimize our fleet for maximum profitability. We are actively engaged in California with their legislature and continue to see constructive changes to the operational limitations that are currently in place in that state.
Glenn Leibowitz: I'll start with a detailed review of our first quarter 2020 for results and we will finish with a discussion on guidance.
Glenn Leibowitz: First quarter revenue declined approximately 15% year over year to $138 5 million compared to $163 6 million.
Glenn Leibowitz: In last year's first quarter.
Brendan: This decline was largely driven by the impact of unfavorable legislation that was recently passed in California, which went into effect in January of this year, along with relocating kiosks during the quarter to optimize our fleet for maximum profitability.
Brendan: We are actively engaged in California with their legislature and continue to see constructive changes to the operational limitations that are currently in place in that state. However.
Glenn Leibowitz: However, our focus remains to drive revenue growth in 2024, which Scott will discuss in detail. Gross profit for the first quarter of 2024 decreased 24% to $14.8 million compared to $19.5 million for the first quarter of 2023. Gross margin in the first quarter of 2024 was 10.6% compared to 11.9% in the first quarter of 2023. This margin decline was largely driven by the corresponding decline in revenue during the quarter, while also operating a larger fleet of kiosks, which are beginning to ramp up in performance.
Brendan: However, our focus remains to drive revenue growth in 2024, which Scott will discuss in detail.
Speaker Change: Gross profit for the first quarter of 2024 has decreased 24% to $14 8 million compared to $19 5 million.
Speaker Change: For the first quarter of 2023.
Scott: Gross margin in the first quarter of 2024 was 10, 6% compared to 11, 9% in the first quarter of 2023.
Speaker Change: This margin decline was largely driven by the corresponding decline in revenue during the quarter. While also operating a larger fleet of kiosks, which are beginning to ramp in performance.
Glenn Leibowitz: Total operating expenses for the first quarter of 2024 were $16.6 million compared to $13.6 million for last year's first quarter. On a sequential basis, operating expenses declined 7% from the fourth quarter of 2023. The sequential improvement was attributable to lower professional services expenses, and we anticipate this trend will continue over the coming quarters as we move farther away from the de-stack transaction and optimize expenses for life as a public company. Gap's net loss for the first quarter of 2024 was $4.2 million, compared to net income of $6.1 million in the first quarter of 2023.
Speaker Change: Total operating expenses for the first quarter of 2024.
Speaker Change: Were $16 6 million compared to $13 6 million.
Speaker Change: For last year's first quarter.
Speaker Change: On a sequential basis operating expenses declined 7%.
Speaker Change: The fourth quarter of 2023.
Speaker Change: The sequential improvement was attributable to lower professional services expenses and we anticipate this trend will continue over the coming quarters as we move farther away from the <unk> transaction and optimize expenses for life as a public company.
Speaker Change: GAAP net loss for the first quarter of 2024 was $4 2 million compared to net income of $6 1 million in the first quarter of 2023.
Glenn Leibowitz: Adjusted EBITDA, a non-gap measure, for the first quarter of 2024 was $4.9 million, compared to Adjusted EBITDA of $13.6 million for the first quarter of 2023. This lower Adjusted EBITDA level was driven largely by lower revenue during the quarter and the deployment of over 1,000 kiosks in the quarter, which increased fixed costs. As a reminder, these deployments do not come with an immediate revenue or EBITDA improvement, but they are expected to drive growth later in 2024 and in future years.
Speaker Change: Adjusted EBITDA, a non-GAAP measure for the first quarter of 2024 was $4 9 million compared to adjusted EBITDA of $13 6 million.
Speaker Change: For the first quarter of 2023, this lower adjusted EBITDA level was driven largely by lower revenue during the quarter and deployment of over 1000 kiosks in the quarter, which increased fixed costs.
Speaker Change: As a reminder, these deployments do not come with an immediate revenue or EBITDA improvement, but they are expected to drive growth later in 2024 and in future years.
Speaker Change: Adjusted EBITDA margin, which is derived from adjusted EBITDA divided by revenue.
Glenn Leibowitz: Adjusted EBITDA margin, which is derived from adjusted EBITDA divided by revenue, in the first quarter of 2024 was 3.5% compared to an 8.3% margin in the first quarter of 2023. We continued to focus on our balance sheet and ended the quarter with approximately $42.2 million in cash and cash equivalents and $48.3 million in debt. We have purchased 190,620 shares to date under the stock repurchase plan announced in 2023. Given the variability in our business from the California legislation and the significant revenue wrap for our kiosks, combined with the relocation of kiosks to start the year, we've made the decision to refrain from formal guidance.
Speaker Change: In the first quarter of 2024 was three 5% compared to an eight 3% margin in the first quarter of 2023.
Speaker Change: We.
Speaker Change: To focus on our balance sheet and ended the quarter with approximately $42 $2 million in cash and cash equivalents.
Speaker Change: $48 3 million in debt.
Speaker Change: We have purchased.
Speaker Change: <unk> hundred 90000, 600000 shares to date under the stock repurchase plan announced in 2023.
Speaker Change: Given the variability in our business from the California legislation and the significant revenue ramp or kiosks combined with the relocation of kiosks.
Speaker Change: The year before.
Speaker Change: The decision to refrain from formal guidance.
Glenn Leibowitz: But for the remainder of 2024, we still expect to follow a similar seasonality trend as we have described previously in Q2 and Q3, being significantly higher revenue than what we see in Q1 and Q4. To illustrate this point and the trend of volumes improving in the spring and summer, March revenue was 30% higher than January and February. Adjusted EBITDA was greater than the combination of January and February adjusted EBITDA in this quarter.
Speaker Change: But for the remainder of 2024, we still expect to follow a similar seasonality trend as we have described previously in Q2 and Q3 being significantly higher revenue than what we see in Q1 and Q4.
Speaker Change: Illustrate this point and the trend of volumes improving in the spring and summer March revenue was 30% higher than January and March adjusted EBITDA was greater than the combination of January and February adjusted EBITDA This quarter.
Glenn Leibowitz: That completes my financial summary. I'll pass it over to our COO, Scott Buchanan, to discuss our growth strategy. Scott. Thanks, Glenn. Bitcoin Depot.
Speaker Change: That completes my financial summary, I'll pass it over to our CFO, Scott Buchanan to discuss our growth strategy Scott.
Scott Buchanan: Thanks, Glenn. Bitcoin Depot continues to make significant progress on its growth strategy, and we remain focused on execution for the remainder of the year. First, we continue to optimize our kiosk footprint by relocating our kiosks to higher-traffic locations, effectively reducing expenses while increasing transaction volume over time to enhance profitability. During the first quarter, we relocated over 500 kiosks to support our newly signed retail partnership deployment. It's important to note that while we regularly optimize our ETF footprint, our repositioning efforts will likely slow in the coming quarters as we are focused on footprint growth this year to expand our market share and competitive position.
Scott: Thanks, Glenn Beck, one depot continues to make significant progress on its growth strategy and we remain focused on execution for the remainder of the year.
Scott Buchanan: First we continue to optimize our kiosk footprint by relocating our kiosks to higher traffic location effectively reducing expenses, while increasing transaction volume over time to enhance profitability. During the first quarter, we relocated over 500 kiosks to support our newly signed retail partnership deployment. It is important to note that while we regularly optimizer.
Scott Buchanan: The us footprint, our repositioning efforts will likely slow in the coming quarters. As we are focused on footprint growth this year to expand our market share and competitive positioning.
Scott Buchanan: We remain committed to additional operational enhancements to drive profitable growth going forward, including improving our vendor pricing, lowering professional services costs, and optimizing customer markups. While we are not providing guidance at this time, we are focused on optimizing the business for profitability and positive cash flow. Second, we continue to pursue additional licenses to expand our access points for customers. During the first quarter, we expanded our BD checkout program across a variety of convenience store partners through our ongoing partnership with our payment processing provider, and today, we are in over 6,700 locations.
Scott Buchanan: We remain committed to additional operational enhancements to drive profitable growth going forward, including improving our vendor pricing lowering professional services costs and optimizing customer markups, while we're not providing guidance at this time, we are focused on optimizing the business for profitability and positive cash flow ahead.
Speaker Change: We continue to pursue additional licenses to expand our access points for customers. During the first quarter, we expanded our beanie checkout program across a variety of convenient store partners through our ongoing partnership with our payment processing provider and today, we are in over 6700 locations.
Scott Buchanan: New York State remains the largest growth opportunity for our kiosks, and we are in regular dialogue with regulators to secure a license to operate in the state. With no existing BTM operators in the state today, according to CoinATMRadar.com, we believe our opportunity for kiosk deployment would be substantial, and our human economics would be strong. We continue to anticipate a decision in the second quarter to operate in New York.
Scott Buchanan: New York State remains the largest growth opportunity for our kiosks and we're in regular dialogue with regulators.
Scott Buchanan: License to operate in a state with no existing bcm operators in the state today. According to coin ATM radar Dot com, we believe our opportunity for kiosk deployment would be substantial.
Scott Buchanan: And the economics will be strong we continue to anticipate a decision in the second quarter to operate in the state.
Scott Buchanan: In addition to New York, we also see international deployments as a significant opportunity for growth. As mentioned, we are actively underway with our Australia expansion project, and we are excited to see these kiosks begin to generate revenue and profit. Third, we are placing additional focus on the profit share program to grow our footprint and profitability. Following the successful partnership with Zopar's Capital, we announced a multi-million dollar investment in a 250 kiosk from another institutional investor. In addition to the 250 kiosks included in the initial agreement, the fund has the option to invest in an additional 750 kiosks.
Scott Buchanan: In addition to New York. We are also we also see international deployments as a significant opportunity for growth as mentioned we are actively underway in our Australia expansion project and we are excited to state it again to generate revenue and profit.
Speaker Change: Third we have placed the additional focus on a profit share program to grow our footprint and profitability.
Speaker Change: Following the successful partnership with Salesforce capital, we announced a multimillion dollar investment in the 250 kiosks for another institutional Investor. In addition to the 250 kiosks included in the initial agreement to fund has the option to invest in an additional 750 kiosks.
Scott Buchanan: We have a strong pipeline of additional opportunities which can provide a capital efficient strategy for Bitcoin Depot to continue its continuous expansion this year while enhancing profitability. Lastly, we continue to explore growth internationally and recently announced our expansion into Puerto Rico and Australia. While our focus remains within North America, where approximately 92% of our BGMs globally are located, we believe the growing adoption of cryptocurrency as a legal form of payment will offer us an opportunity to establish a market-leading presence outside of North America over time in new markets with low competition.
Speaker Change: With a strong pipeline of additional opportunities, which can provide a capital efficient strategy for bitcoin depot to continuous expansion this year, while enhancing profitability.
Bitcoin depot: Lastly, we continue to explore growth internationally, and our recently announced our expansion into Puerto Rico in Australia, Our focus remains within North America, where approximately 93% of our Atms globally are located we believe the growing adoption of cryptocurrency as a legal form of payment will offer us an opportunity to establish a market leading.
Bitcoin depot: Outside of North America over time into new markets with low competition.
Scott Buchanan: While it's early, we are encouraged by the pace of new deployments and the pipeline of retail opportunities that we have identified internationally. In summary, we are encouraged by our recent momentum and remain well positioned to execute our strategic goals this year. With that, we are now happy to take your questions.
Bitcoin depot: It's early we are encouraged by the pace of new deployment, but the pipeline of retail opportunities that we identified internationally.
Bitcoin depot: In summary, we are encouraged by our recent momentum and remain well positioned to execute our strategic goals. This year was that we are now happy to take your questions operator.
Bitcoin depot: Oh.
Operator: We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. Your first question comes from the line of Michael Anessi with AC Wing Ride. Please go ahead.
Operator: We will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad to raise their hand and joined the queue. If you would like to withdraw your question Bryce Star one again.
Speaker Change: Your first question comes from the line of Mike Cola Nelson with HC Wainwright. Please go ahead.
Michael Anessi: Hi, good morning, guys. Thank you for taking my questions today. First one for me, if you could provide more color around what nuances we should take into consideration as it relates to the new geographies you're expanding into, specifically, Australia and Puerto Rico, from both an economic and regulatory perspective, really how we should think about pricing average transaction sizes relative to the kiosks you have deployed in North America.
Speaker Change: Hi, Good morning, guys and thank you for taking my questions today first one for me.
If you could provide more color around what nuances, we should take into consideration as it relates to the new geographies, you're expanding into Australia in Puerto Rico, specifically from both an economic and regulatory perspective really how we should think about pricing average transaction sizes are relative to the kiosks you have deployed in North America.
Brandon Mintz: Thanks Mike. So, Puerto Rico will likely be very similar to the US from a regulatory standpoint and licensing standpoint. It is probably pretty similar from a unit economics standpoint. That's the way we're viewing it, and that's what it's looking like pretty early on in the deployments. Australia is a little bit different. There's a, the licensing structure is slightly different, but nothing super challenging, and due to the economics, we expect to be a little bit better than the US, given that it's an untapped market to a degree and what we've done. Or what we've gathered from a market research standpoint indicates it could be a little bit stronger than the US in terms of profitability per Kia.
Mike Nelson: Yes, Thanks, Mike.
Mike Nelson: So Puerto Rico.
Mike Nelson: Likely be very similar to the U S.
Speaker Change: Or a regulatory standpoint.
Speaker Change: Licensing standpoint, it is the same.
Speaker Change: From a unit economics standpoint, it's probably going be pretty similar that's the way we're viewing it and that's what it's looking like pretty early on in the deployments there.
Speaker Change: Australia is a little bit different.
Speaker Change: The licensing structure is slightly different but nothing nothing super challenging.
Speaker Change: And given the economics, we expect to be a little bit better than the U S. Given that it's an untapped market to a degree.
Speaker Change: And what we've done or what we've gathered from a market research standpoint indicate that could be a little bit stronger than the U S. In terms of profitability per kiosk.
Brandon Mintz: That's great. And this one's more on sentiment. Curious what you guys use here. So the fundamentals are strong. You have really good momentum in the business and are certainly tracking ahead of your plan to deploy the 8000 kiosks in 2024. What do you think investors are missing with this story here? Yeah, I think
Speaker Change: That's great.
Speaker Change: This one is more on sentiment curious so you guys use here. So fundamentals are strong you have really good momentum in the business and are certainly tracking ahead of your plan to deploy the 8000 kiosks in 2024, what do you think investors are missing with the story here.
Brandon Mintz: Yeah, I think investors just need to focus on the financials and the profitability that we continue to show and that we continue to be trending toward even more positive free cash flow in 2024. So I think that's just what we need to focus on. And we continue to move farther away from the DSPAC process and get those costs behind us. So as we optimize the cost structure and continue to grow our fleet, the financial performance should continue to improve as well.
Speaker Change: Yes.
Speaker Change: I think investors need to focus on on the financials.
Speaker Change: The profitability that we continue to show in and that we continue to be trending toward even more positive free cash flow in 2024.
investors: That's just what we need to focus on and.
Speaker Change: We continue to move farther away from the destock process and get those costs behind us so as we optimize the cost structure and continue to grow our fleet the financial should continue to improve as well.
Speaker Change: Great. Thanks, Scott.
Operator: Your next question comes from the line of Ben McCann with Noble Capital Market. Please go ahead.
Speaker Change: Your next question comes from the line of band Mccann with Noble capital markets. Please go ahead.
Ben McCann: Hey, good morning. This is Pat on from Mike.
Speaker Change: Hey, Good morning. This is Pat on for Mike I had a couple of questions first of all when it comes to just you guys mentioned the margin.
Ben McCann: I had a couple of questions. First of all, when it comes to just, and you guys mentioned the margin, the efforts you would take to improve margins, but I was wondering if you could give a few more details on that as far as more specifically what those levers are that you can pull. And maybe while you're at it, I just wanted to touch on the, I think this is something you've done in the past, but reducing the frequency with which you pick up cash at kiosks to lower some of those expenses. Is that something you're doing, or is that something you can do? Just any color you can give on how the margins could be improved.
Pat: The efforts you would take two to improve margins, but I was wondering if you could give us a few more details on that as far as.
Speaker Change: More specifically what.
What those levels levers are that you can pull and maybe while you're at it I just wanted to touch on.
Speaker Change: <unk>.
Speaker Change: I think this is something you've done in the past, but reducing the frequency with which you pick up cash at kiosks.
Speaker Change: Lower some of those expenses is that something you're doing or is that something you can tell.
Speaker Change: Can do.
Speaker Change: Any any color you can give on how margins could be approved.
Glenn Leibowitz: Yeah, thanks Pat. I can start with armored costs like you mentioned. We always have that lever of reducing the frequency of armored collections so that we pay for less visits per month, but as we're rapidly deploying kiosks that's likely not a lever we'll pull first because with the deployment of additional kiosks that's already going to generate more cash tied up in the ATMs and working capital and so that's a lever we'd like to pull as we have a more stable fleet size so we can better forecast what's going to happen to that working capital balance, but that will be something we can do to improve margins going forward.
Speaker Change: Yes, Thanks Pat.
I can start with armored cost like you mentioned, yes, we always have that lever, reducing the frequency of armored collections. So that we pay for less visits per month, but as we're rapidly deploying kiosks likely not a lever we'll pull first because with the deployment of additional kiosks that already kind of generate more cash tied up in the ATM.
Speaker Change: And working capital and so that's the lever wed like to pull as we have a more stable fleet size. So we can better forecast, what's going to happen to that working capital balance.
Speaker Change: But that will be something we can do to improve margins going forward.
Glenn Leibowitz: The other things we're going to focus on specifically for improving margins are continuing to reduce our professional services expenses. As we've touched on a couple times, it was very expensive going public, and now that we're in a more stable state, reducing some of our professional services on the accounting side, the legal side, the consulting side, all of that, and then also just continuing to optimize our marketing spend. We're always focused on driving new customer growth and top-line growth through marketing, but we make sure that as we expand the fleet here, we're really focused on customer acquisition costs and customer lifetime value, and making sure that we're optimizing the spend there for the best margin possible.
Speaker Change: The other the other things we're going to focus on specifically for improving margins are continuing to reduce our professional services expenses.
Speaker Change: As we've touched on a couple of times it was very expensive going public.
Speaker Change: And now that we're in a more stable state reducing some of our.
Speaker Change: Our professional services on the accounting side the legal side.
Speaker Change: Salting side all of that.
Speaker Change: And then also just continuing to optimize our marketing spend right. We're always focused on driving new customer growth in topline growth through marketing, but making sure that as we expand the fleets here that we're really focused on customer acquisition costs and customer lifetime value and making sure that we're optimizing the spend there.
Speaker Change: For the best margin possible.
Speaker Change: Okay.
Scott Buchanan: Thanks. And another question is, when it comes to picking kiosk locations, how do you do that? And then when you look back on 2023 and recent quarters here where you've done redeployments, as you've highlighted, what lessons do you take away from that when it comes to future deployments as far as, okay, now we know where we should pick, what is the makeup of a profitable location? What do you think you can take from previous redeployments going forward for picking great spots to put your kiosk? Yeah, that's good.
Speaker Change: Thanks, and then another question is.
Speaker Change: When it comes to kicking kiosk locations, how do you do that and then when you.
Speaker Change: If you look back to 2023 and recent quarters here, where you done redeployments as you've highlighted.
Speaker Change: What lessons you take away from that when it comes to.
Speaker Change: Future deployments as far as Okay, now we know.
Speaker Change: Where we should take what is what is the makeup of profitable locations.
Speaker Change: What do you think you can take from previous redeployments going forward for picking great great spots you put your kiosks.
Scott Buchanan: Yeah, good question. And so I'll be careful not to overshare given that this is part of the competitive advantage of making sure that we're picking strong locations as our competitors are trying to do the same thing, but The more kiosks we deploy, the more data we're gathering on which locations perform well and which don't, right? So as we remove and as we deploy new ones, we're just constantly improving our data set and looking at all the different variables, from demographics to population to competitors in the area, all sorts of different things that we look at.
Speaker Change: Yes.
Speaker Change: Good question, so I'll be careful not to not to Overshare given that this is part of the competitive advantage of just making sure that we're picking strong locations as our competitors are trying to do the same thing but.
Speaker Change: The more kiosks, we deploy the more data, we are gathering on which which locations performed wallet, which stalled right. So as we remove and as we deploy new ones. We're just constantly improving our data set and looking at all the different variables from demographics population two competitors in the area all sorts of different things.
Speaker Change: We look at it.
Scott Buchanan: And we can look at those criteria and apply them to formulas when we look at new sites for analysis of whether or not we should place a kiosk there. Every month and year that passes, we're getting additional data that's going to help us better place locations.
Speaker Change: And we can look at those criteria.
Speaker Change: Apply them to formulas when we look at new sites for analysis of whether or not we place a kiosk there so.
Speaker Change: Every month and year that passes we're getting additional data that's going to help us better place location.
Speaker Change: Yes.
Ben McCann: Great, thanks so much. Maybe one more question, if you don't mind me squeezing it in. With regard to California, are there any, when it comes to the Well, are there any milestones we should look for as far as regulatory, you know, regulatory changes or as far as the legislature there, are there things we should have our eyes out for, for things to potentially improve there?
Speaker Change: Great. Thanks, so much.
Speaker Change: Maybe one more question. So if you don't mind me squeezing it in with regard to California are there any.
Speaker Change: When it comes to the.
Speaker Change: Are there any milestones or anything we should look for as far as.
Speaker Change: Regulatory.
Speaker Change: Regulatory changes or as far as the.
Speaker Change: The legislature there are there things, we should have our eyes out for.
Speaker Change: For things to potentially improve there.
Scott Buchanan: Um, I mean, nothing specific to have your eyes out for in California, right?
Speaker Change: I mean, nothing specific to have your eyes out for in California or is it.
Speaker Change: Something changes, it's not going to change until late this year, maybe early next year.
Speaker Change: So nothing in the next quarter or two.
Scott Buchanan: If anything changes, it's not going to change until late this year, maybe early next year. So nothing in the next quarter or 2. Yeah, but nothing to really look for yet.
Speaker Change: Yes, nothing to really look for yet.
Ben McCann: Great. All right. Thank you so much.
Ben McCann: Great. All right. Thank you.
Speaker Change: Great Alright, thank you so much.
Operator: Your next question comes from the line of Harold Gulch with B-Riley Securities. Please go ahead.
Speaker Change: Your next question comes from the line of apparel <unk> with B Riley Securities. Please go ahead.
Harold Gulch: Hey, thank you guys. Good morning.
Speaker Change: Okay. Thank you guys. Good morning, I had a question on productivity. So I think you mentioned.
Harold Gulch: I got a question on, you know, the productivity of kiosks. I think you mentioned kiosks that were, in terms of over a year, at least 80% or more productive than the new kiosk. What is your experience, what can you share with us?
Speaker Change: Yes.
Speaker Change: Service over a year were.
Speaker Change: At least 80% or more productive new kiosks and so.
Speaker Change: What is your what can you share with us.
Harold Gulch: to help us kind of model the productivity of new kiosks as they enter their, you know... second quarters, third quarter, fourth quarter of operation, pace and cadence of how they mature. Can you give us any feel for that? Yeah. Hey, hey, go ahead. I think...
Speaker Change: So help us kind of model the productivity of new kiosks at the end are there.
Speaker Change: Second quarter third quarter fourth quarter of operational pace and cadence of how they mature.
Speaker Change: Give us any feel for that thank you.
Scott Buchanan: Yeah, hey, hey, Hal. Go ahead. I think Brandon's going to take this one. All right. We can't hear Brandon, so I'll take it.
Speaker Change: Yes.
Speaker Change: Al.
Speaker Change: Go ahead, I think Brian who is going to take this one.
Speaker Change: Okay.
Speaker Change: Alright.
Speaker Change: Okay.
Brandon: Can't hear Brandon So I'll take it.
Brandon: Kiosks.
Scott Buchanan: Yeah, like you said, kiosks do much better after their first year on that ramp from installation as they grow throughout the first year into year two. I don't have a specific number for you on what percentage they hit throughout that period, but largely, the kiosks are ramping up pretty steadily through that first year. The most significant ramp would come from, like, in quarters two and three, so you'll see pretty low volumes the first quarter they're deployed and then start picking up that growth acceleration in quarters two and three, and then less percentage growth-wise in Q4 as you head into year two. So I hope that gives you a little bit of guidance there without giving too specific a number that I don't have on that.
Speaker Change: Like you said kiosks do much better after their first year from that ramped from installation as they grow throughout the first year end of year two.
Speaker Change: I don't have a specific number for you on what percentage they hit throughout that period.
Speaker Change: But largely the kiosks are ramping up pretty steadily through that first year.
Speaker Change: Most significant ramp would come from like in months and.
Speaker Change: Quarters, two and three so youll see pretty low volumes in the first quarter. They are deployed and then start picking up that growth acceleration in quarters, two and three and then less percentage growth wise in Q4 as you head into year two.
Speaker Change: So I hope that gives you a little bit of guidance, there without without getting too specific numbers, but I don't have off the top of my head.
Harold Gulch: So, I'm not mistaken, but last year was the year of consolidation for the number of kiosks, and you really didn't grow the number of kiosks last year, so... Of the 6,300 entering on January 1, I think you had 2024. Wasn't the average age of those much more than one year ago, probably two or three years old? and perspective, or do you count a new machine in that maturity process when it's been relocated? Help us figure it out.
Speaker Change: So I'm not mistaken but.
Speaker Change: Last year was a year of consolidating the number of kiosks.
Speaker Change: I mean, you really mean growth last year so.
Speaker Change: Of the 6300 entering January one I think you had.
Speaker Change: Four.
Speaker Change: Most of the average age is about much more than one year, though I'd like two or three years old.
Speaker Change: And perspective or are you.
Speaker Change: New machine and that maturity process, when it's been relocated and help us figures right, yes, so you're talking about high end.
Scott Buchanan: Right, yeah. It's brand new. That's right. It becomes brand new as soon as it's relocated, right? Because we really look at the age of a site, not the age of the hardware. And so all those relocations really lower the age of our fleet throughout 2020.
Speaker Change: That's right because the brand new <unk> III located right because yes, we.
Speaker Change: At age of a site not age of the hardware and so all of those relocate really lowered the age of our fleet throughout 2023.
Harold Gulch: Okay. Okay. Thank you very much. Okay. Good. Thanks a lot. That's my last.
Speaker Change: Okay. Okay. Thank you very much okay, great. Thanks, a lot. That's my last question. Thanks, Jeff.
Tom: Yes, Thanks, Tom.
Operator: Your next question comes from the line of Mike Rundle with Northland Securities. Please go ahead.
Tom: Your next question comes from the line of Mike Grondahl with Northland Securities. Please go ahead.
Mike Rundle: Hey Scott, um, you guys had 7,061 kiosks installed at the end of March. How many are on order or uninstalled? I'm just trying to understand the roll forward, you know, 7,000 plus what is the total population of kiosks?
Scott Buchanan: Hey, Scott.
Mike Grondahl: You guys had 7061.
Mike Grondahl: US installed at the end of March.
Scott Buchanan: Yes, how many kiosks.
Mike Grondahl: Our on order.
Speaker Change: On installed.
Speaker Change: I'm just trying to understand the roll forward 7000, plus what is kind of the total population of kiosks.
Scott Buchanan: Yeah, we have roughly 3,000 still on order that are in the process of being produced or shipped to us. So, if you look at the kiosks, we've got outstanding orders for with the kiosks that are installed. We've got a little bit over 10,000 kiosks in that whole purview there.
Speaker Change: Yes.
Speaker Change: Roughly 3000 still on order that are in the process of being produced or shift to us.
Speaker Change: So if you look at kiosks, we've got outstanding orders for.
Carver: The kiosks that are installed we got a little bit over 10000 kiosks and that whole Carver you there.
Scott Buchanan: Got it. End. For the 3,000 that are ordered, what's the rough delivery schedule?
Speaker Change: Got it.
Speaker Change: That 3000 that are ordered.
Speaker Change: What's the rough delivery scheduled.
Scott Buchanan: Yeah, so the rough delivery schedule, we'll get the last of those kiosks in mid Q4. And we're getting them in like monthly batches until then. So I don't have an exact monthly delivery number for you to list out, but we're going to get them fairly evenly over the next six to seven months. To be clear, they won't all be deployed that quickly. We'll develop some sort of an inventory there that'll take some time to deploy, but that's the cadence on which we'll receive them all.
Speaker Change: Yes.
Carver: The rough delivery schedule will get the last of those kiosks in mid Q4.
Speaker Change: And we're getting them and like monthly batches until then so I don't have an exact monthly delivery number for you to lift out, but we're going to get them fairly evenly over the next six to seven months.
Speaker Change: We've got some clear they won't all be deployed that quickly.
Speaker Change: We will develop some sort of an inventory there that will take some time to deploy but thats. The cadence of what you are seeing at the mall.
Scott Buchanan: Got it. And I think your goal, for lack of a better word, is still $8,000 at year end, and it kind of depends on how quick you get those $3,000 deployed. But $8,000 is kind of what you've said, and you're kind of sticking by. Is that fair?
Speaker Change: Got it.
Speaker Change #100: I think your goal for lack of a better word is still 8000 at year end.
Speaker Change #102: Kind of depends on how quick you get these 3000 deployed but 8000 is kind of what you've said and youre kind of sticking by is that fair.
Scott Buchanan: That's right. I mean, we're going to exceed 8,000. We don't have a new number out there yet because we've got to wait to receive these, and we've got to see the pace at which we're continuing to sign additional retailers. But yeah, we're going to exceed 8,000 to finish the year.
Speaker Change: That's right I mean, we're going to exceed 8000.
Speaker Change #108: Have a new number out there yet because we've got to wait to receive these and we've got to see what the the pace at which we're continuing to sign additional retailers.
Speaker Change #101: We're going to exceed 8000 to finish the year.
Scott Buchanan: Got it. And can you remind us how many have been redeployed from California this year and how many are left installed in California?
Speaker Change #101: Got it.
Speaker Change #101: Can you remind us how many have been redeployed from California. This year and how many are left installed in California.
Scott Buchanan: Well, California still has roughly 500 kiosks installed there from us. And like we mentioned on our last quarterly call, we're gonna leave those for this year to just continue to have our presence there as we work toward having legislation amended to make it more favorable in 2025. But we're definitely not gonna deploy any additional kiosks there until we have more clarity on what legislation looks like.
Speaker Change #101: Well, so, California still has.
California representative: Roughly 500 kiosks installed there from us.
Speaker Change #104: And like we mentioned on our last quarterly call, we're going to leave those for this year.
Company Representative: Continue to have our presence there as we work toward having legislation amended to make it more favorable in 2025.
Speaker Change #106: But we're definitely not going to deploy an additional there until we have more clarity on what legislation looks like.
Speaker Change: Okay.
Scott Buchanan: Got it, and did you say, what, about 400 were pulled out of California? Is that the right number? Yeah, roughly. I think we, I don't have these exactly in front of me, but I think that's roughly correct.
Speaker Change: Got it and did you say what about 400 were pulled out of California is that the right number yes, roughly I think I don't have these exactly in front of me, but I think that's roughly correct.
Speaker Change: Got it.
Speaker Change: And.
Mike Rundle: Got it. If I go back to your 7,000 at the end of March, it started the year at like 6400. I'm trying to figure out, at a high level, how many are going to be at year-end... How many will be under 12 months? And am I right in thinking it's 400 redeployed from California plus, I don't know, 2,000.., and change? If you got to 8,000, it'd be 400 redeployed from California, and then 2,000 new installations. But if you end up at, let's say, $8,400, it'd be $2,400 new in sales. Is that the right way to think about... roughly how many will be under 12?
Speaker Change: If I go back to your 7000 at the end of March.
Speaker Change: It started the year at Lake 6400.
Speaker Change #110: I'm trying to figure out at a high level, how many are going to at year end.
Speaker Change #110: How many will be under 12 months.
Speaker Change #110: Okay.
Speaker Change #110: Am I right in thinking.
Speaker Change #112: It's 400 redeployed.
Speaker Change #112: From California.
Speaker Change #112: Plus.
Speaker Change #103: I don't know.
Speaker Change #103: 2000.
Speaker Change #103: Change.
Speaker Change #113: If you got to 8000 it'd be 400 redeployed from California.
Speaker Change #114: And then 2000 new installs.
Speaker Change #111: But if you end up at let's say 8400, it would be 2400, new installs is that the right way to think about.
Speaker Change #103: Roughly how many you'll be under Mike.
Speaker Change #103: Mike and.
Brandon Mintz: It's Brandon. I think my audio is working now.
Speaker Change #103: It's Brandon I think my audio is working now.
Brandon Mintz: So, I think I talked about this in my section a little bit, but as of the end of Q1, we were around 5,000 kiosks older than 12 months old. So that just keeps it pretty simple for you without doing a bunch of math. So sometime in Q1, there were about 2,000 installed that were less than a year old. And on average, they were four months old; the ones less than a year, that cohort.
Speaker Change #103: So I think I've talked about this in my section a little bit but as of the end of Q1.
Brandon So: We were around 5000 kiosks.
Brandon So: <unk> than 12 months old.
Brandon So: So that just keeps it pretty simple for you without doing a bunch of math.
Brandon So: So sometime in Q1, they were about 2000 installed over less than a year old and on average they were four months old the ones less than a year that cohort.
Brandon Mintz: got it. So in Brandon, you said At March 31st, roughly 5,000 were older.
Brandon So: Got it.
Brandon So: And Brandon you said, yes.
Brandon: At March 31, roughly 5000 were older.
Brandon Mintz: Got it. Okay. I understand it. Yeah, I can follow that math. That's easier. Um, and then could you guys just repeat what you said about the month of March when you were talking about seasonality? I think I understand it, but if you could repeat that about revenue and adjust it to EBITDA, that would be helpful.
Brandon: Got it okay I get it yes, I can follow that math that's easier.
Brandon So: And then can you guys just repeat what you said about the month of March when you were talking about seasonality.
Brandon: Think I got it but if you could repeat that about revenue adjusted EBITDA that would be helpful.
Scott Buchanan: Yep, revenue for March was 30% higher than January. We just gave that stat to show that you can see the seasonality starting to kick in as we head into the spring. And then EBITDA for March was greater than the combined EBITDA of January and February.
Brandon So: So revenue for March was 30% higher than January.
Speaker Change #116: <unk> gave that stat to show that you can see the seasonality starting to kick in as we head into the spring.
Speaker Change #117: And then EBITDA for March was greater than the combined EBITDA January and February.
Scott Buchanan: Got it. I got that right then. Okay. And then, Scott, any, you know, you've kind of mentioned improving free cash flow in 24, though, kind of back-end loaded. Any updated thoughts on a range or what that could look like in 24?
Speaker Change #116: Got it I got that right okay.
Scott Amy: And then Scott Amy.
Scott Amy: Kind of mention improving free cash flow in 'twenty four.
Scott Amy: So kind of.
Brandon So: Backend loaded.
Scott Amy: Any updated thoughts on a range or what that can look like in 'twenty four.
Scott Buchanan: We definitely expect free cash flow to improve in the next 24, but we don't want to give a range or guidance on it yet. We want to see that Q2 executes the way we expect it to, and then maybe we'll be ready to talk about that on the next earnings call.
Scott Amy: We definitely expect free cash flow to improve in 'twenty, four, but we don't want to give a range or guidance on it yet.
Scott Amy: We want to see that Q2 executes the way we expect it to and then maybe you will be ready to talk about that on the next earnings call.
Scott Buchanan: Got it. Got it. And then, are you guys seeing any changes, positively or negatively, in consumer behavior out there?
Scott Amy: Got it got it.
Scott Amy: And then are you guys seeing any changes positively or negatively.
Scott Amy: In consumer behavior out there.
Scott Buchanan: Nothing material to call out. We continue to see transaction sizes increase, but other than that, we're not seeing any major changes in consumer behavior.
Scott Amy: Nothing nothing material to call out we continue to see transaction sizes increase but other than that we're not seeing any major changes in consumer behavior.
Scott Buchanan: Got it. Got it. And then, hey, last question for me, just on the installation. And I know it's early, but the new installs in 24 hours, are they tracking to your internal plan?
Scott Amy: Got it got it and then last question for me.
Scott Amy: Just.
Scott Amy: On the installs.
Scott Amy: And I know, it's early but the new installs in 'twenty four are they tracking to your internal plan.
Brandon Mintz: Go ahead, Brandon.
Scott Amy: Okay.
Brandon: Go ahead Brandon.
Brandon Mintz: Yeah, they are. Even though I mentioned that the year two kiosks were over 80% higher in performance, the ones that are less than a year old are already close to halfway ramped up, surprisingly, even though they average about four to five months of age. So I think it's going pretty well, and we're seeing a strong lift from the seasonality, as expected.
Brandon: Yes, they are.
Brandon: Even though.
Brandon: Mentioned that the year, two kiosks, where.
Brandon: Our 80% higher and performance the ones that are less than a year old R.
Brandon: Already close to halfway ramped surprisingly.
Speaker Change #120: Even though they average about four to five months of age.
Brandon: And I think it's going pretty well and we're seeing a strong lift from the seasonality as expected.
Operator: Got it. Got it. Great.
Brandon: Got it got it great. Thank.
Brandon: Thank you guys.
Brandon: Okay.
Michael Kopinski: Your next question comes from the line of Michael Kopinski with Noble Capital Markets. Please go ahead. Thank you, and thank you for taking the time.
Michael <unk>: Your next question comes from the line of Michael <unk> with Noble capital markets. Please go ahead.
Brandon Mintz: Hey, Michael, I think that's a good question since we did get a fantastic deal on the price per kiosk for what we've been buying so far this year on average. Now, one thing to consider is that we don't have a location yet to place every single kiosk that we've purchased in 2024. So we have to assume that they will be sitting for a period of time if we purchase more in a warehouse.
Michael Kopinski: Thank you, and thank you for taking my question. Just a quick one, I know that you were able to buy some kiosks from a bankrupt operator, and many of these were brand new, and I was just wondering if there are further opportunities like that, and whether or not, at this juncture, given that you're in a deployment phase, would you consider expanding the kiosk fleet if there are other opportunities like that?
Michael <unk>: And thank you for taking my question.
Michael <unk>: Just a quick one I know that you were able to buy some kiosks from a bankrupt operator in many of these were brand new and I was just wondering if there are further opportunities like that and whether or not at this juncture given that youre in a deployment phase would you consider still expanding the kiosks fleet.
Michael <unk>: If there are there are opportunities like that.
Michael <unk>: Hey, Michael I think that's a good question since we did get a fantastic deal on the price per kiosk on what we've been buying.
Michael <unk>: So far this year on average.
Michael <unk>: Now one thing to consider is we don't have.
Michael <unk>: Hey location, yet to place every single kiosk that we purchased in 2024.
Speaker Change #125: So we have to assume that they will be sitting for a period of time, if we purchase more.
Speaker Change #119: In a warehouse and with that there is ongoing.
Brandon Mintz: And with that, there are ongoing storage expenses. And if we were to finance the kiosk, ongoing interest payments as well. It's not out of the question. [inaudible] for the rest of 2024. It is worth noting, though, that
Speaker Change #126: Storage expenses, and if we were to finance the kiosks ongoing.
Speaker Change #127: Interest payments as well.
Speaker Change #131: Got out of the question.
Speaker Change #119: That we would buy more.
unknown: If we did for the U S at least.
Speaker Change #132: I think we would have to see a similar price point to what we paid where it's really really attractive.
Speaker Change #123: I don't think we're going to be buying.
Speaker Change #119: Kiosks.
Speaker Change #119: You asked at a normal price or anything like that.
Speaker Change #119: For the rest of 2024.
Speaker Change #119: It is worth noting though that.
Brandon Mintz: The kiosks for Australia have some minor modifications. There's a different power requirement for kiosks over there. So it may be possible if Australia goes well, which we believe it will, that we may purchase additional kiosks for Australia.
Australia: The kiosks for Australia pop some minor modifications there is a different power requirement for kiosks over there. So it may be possible, if Australia again as well.
Australia: Which we believe it will that we may purchase additional kiosks for Australia.
Brandon Mintz: Gotcha. And at any given point, you do have a kiosk and inventory, right? Anyway, right? I think you had like 700 in the last quarter, if I recall. Is that kind of the number that you would typically have in inventory?
Australia: Gotcha.
Speaker Change #121: Given point you do have kiosk in inventory right anyway right.
Speaker Change #124: I think you had like 700 last quarter, if I recall.
Speaker Change #121: Is that kind of the number that you would typically have in inventory.
Brandon Mintz: The inventory is always fluctuating, especially right now, based on when we get these batches of kiosks that we've ordered and how many locations that we have. However, what I can tell you is that we have 10,400 kiosks as of the end of March of this year. And with all of these purchases, once we receive all of the kiosks by sometime in early Q4, our total fleet size goes up to around 10,400 kiosks. And we estimate.
Speaker Change #121: The inventory is always fluctuating.
Speaker Change #121: Especially right now based on when we get these batches of kiosks that we've ordered and how many locations that we have however, what I can tell you is.
Speaker Change #121: Great.
Speaker Change #121: As of the end of March of this year.
Speaker Change #130: And with all of these purchases once we receive all of the key aspects sometime in early Q4, our total fleet size.
Speaker Change #128: It is up to around 10400 kiosks.
Speaker Change #128: And we estimate.
Brandon Mintz: At that point, maybe around 400 kiosks will be in transit or undergoing some sort of maintenance and repair and offline at any given time. So we still have somewhere close to that. 3,000 that could be installed to get us to roughly a 10,000 machine operating fleet by the time we receive everything and then install those kiosks. And, like Scott clarified earlier, just because we've received everything that we've ordered does not mean it's going to be installed. We anticipate there to be a few months of lag, just since we've increased our kiosk fleet dramatically over the past few months, the most kiosks we've purchased in a year since 2021.
Speaker Change #128: At that point, maybe around 400 kiosks will be in transit are undergoing some sort of maintenance or repair and offline at any given time.
Speaker Change #129: So we still have somewhere close to.
Speaker Change #135: 3000 that can be installed to get us to roughly 10000 machine operating fleet by the time, we receive everything.
Speaker Change #137: And then install those kiosks.
Speaker Change #137: And like Scott clarified earlier, just because we've received everything that we've ordered it does not mean, it's going to be installed.
Scott: We anticipate there to be a few months' lag.
Scott: Just since we've increased our kiosk fleet dramatically over the past few months.
Scott: So most kiosks, we've purchased in a year since 2021.
Michael Kopinski: Gotcha. All right. Thank you. That's all I have.
Speaker Change #129: Got you alright. Thank you that's all I have.
Operator: Again, if you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. Your next question comes from the line of Howard Gauch with Riley Securities. Please go ahead.
Speaker Change #129: Again, if you would like to ask a question. Please press star one on your telephone keypad to raise their hand and joined the queue.
Speaker Change #129: Your next question comes from the line of Howard Gosh, we'd provide any securities. Please go ahead.
Howard Gauch: Hey guys, I wanted to ask one follow-up question on the direct sales force. I know you hired at least 10 or more or plan to hire more. I was hoping to give you an update on those hires, if those hires' expenses have kind of fully baked in the quarter, and what are your expectations on when their productivity will really kick in from a revenue standpoint will be more of a back half of the year or a 2025 event as they run down their Rolodex of contacts in the retail industry.
Howard Gosh: Hey, guys I wanted to ask one follow up on the direct sales force I know that you had hired at least 10 or more or plan to hire more I was hoping to get an update on those hires yes, those hires expenses kind of like fully baked in.
Speaker Change #129: In the quarter and what are your expectations on when their productivity will really kick in from a revenue standpoint will be more of a back half of the year or a 2025 of that is there is there.
Speaker Change #129: They run down their rolodex of contacts in the industry retail industry. Thanks.
Scott Buchanan: Regarding the expenses of the sales force, it's pretty much all baked in already and Q1. There were, you know, a couple people that started maybe midpoint through the quarter, but for the most part, we wouldn't expect to see any significant swings up or down with those expenses. And regarding their ramp-up, we do anticipate that Salesforce having higher locations, a higher number of location signs on a monthly basis forward to the end of the year, and salespeople building up more relationships in the industry with convenience store chains, grocery stores, etc. But they're probably, you know, a third of the way ramped up, maybe a little more than that so far.
Speaker Change #129: Regarding the expenses of the sales force.
Speaker Change #129: Pretty much all baked in already in Q1.
Speaker Change #129: There were.
Speaker Change #129: Couple of people that started maybe.
Speaker Change #133: Midpoint through the quarter, but for the most part we wouldn't expect to see any significant swings.
Speaker Change #129: Up or down with those expenses.
Speaker Change #129: And regarding their ramp up.
Speaker Change #129: We do anticipate.
Speaker Change #134: That sales force having.
Speaker Change #134: Higher locations higher amount of locations signed on a monthly basis forward to the end of the year.
Speaker Change #136: Once these salespeople buildup more relationships in the industry with convenience store chains grocery stores.
Speaker Change #138: Et cetera, but they probably.
Speaker Change #138: Third of the way ramped up maybe a little more than that so far.
Speaker Change #138: Okay.
Howard Gauch: And one last on that, are you hiring people from an industry that's deployed, you know, you know, services into retail and kind of what's the first persona of a salesperson that has taken this role?
Speaker Change #138: And.
Speaker Change #146: One last one are you are you hiring people from an industry that's deployed.
Speaker Change #142: Service has been the retail and kind of what's the persona of a salesperson that has taken this role.
Scott Buchanan: Well, we have a couple of them that we've brought on that already have experience directly in the Bitcoin ATM industry, but most of them just have experience calling retail locations already and have... kind of that door-to-door cold calling experience.
Speaker Change #139: Well, we have a couple of them that we've brought on that already had.
Speaker Change #145: Experienced directly and the bitcoin ATM industry.
Speaker Change #147: But most of them just have experience called.
Speaker Change #149: Calling on retail locations already and have.
Speaker Change #143: Kind of that door to door cold calling experience.
Howard Gauch: Alright, terrific. Thank you, Fran.
Brad: Alright, perfect. Thank you Brad.
Scott Buchanan: And to clarify that point, most of them are lower-level sales reps. And that's why there's cold calling and some door-to-door outreach as well.
Brad: And to clarify on that point most of them are lower level.
Brad Johnson: Those reps.
Nicole: And that Thats why theres, the Nicole calling in from door to door outreach as well.
Operator: At this time, this concludes our question-and-answer session. I'd now like to turn the call back over to Brandon N.
Nicole: At this time. This concludes our question and answer session I would now like to turn the call back over to Brendan.
Brandon Mintz: Thank you everyone for joining our call today. We look forward to providing you with future updates.
Brendan Smith: Thanks, everyone for joining our call today, we look forward to providing you future updates.
Operator: Thank you for joining us today for Bitcoin's Depot's conference call. You may now disconnect.
unknown: Thank you for joining us today for <unk> Conference call you may now disconnect.
Operator: Please wait; the conference will begin shortly.
Nicole: Please wait the conference will begin shortly.
Nicole: [music].
Nicole: Okay.
Nicole: Sure.
Nicole: [music].
Nicole: Yes.
Nicole: Yes.
Nicole: Okay.
Nicole: Yes.
Nicole: Yes.
Nicole: [music] community.
Nicole: No.
Nicole: Yes.
Nicole: Thanks.
Nicole: [music].
Nicole: Yes.
Nicole: Thank you.
Nicole: Yes.
Nicole: Okay.
Nicole: [music].
Nicole: Thanks.
Nicole: [music].