Q3 2024 Bitcoin Depot Inc Earnings Call
<unk> This call Bitcoin depot issued its financial results for the second quarter ended September 32024, and the press release.
A copy will be furnished in our report on form 8-K 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 <unk>, CEO, Brandon myths and CFO Glenn livelihoods.
Following their remarks, we will open the call for questions.
Speaker Change: Before we begin chorus law from Gateway will make a brief introductory statement Mr. Zhao. Please proceed.
Speaker Change: Thank you operator, good morning, everyone before management begins their formal remarks, we would 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. As a result, we caution you that there are a number of factors.
Speaker Change: 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, 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.
Good morning and welcome to Bitcoin Depot's third quarter 2024 conference call. My name is Dustin and I will be your operator today.
Speaker Change: As required by law, we will also discuss non-GAAP financial metrics and encourage you to read our disclosures and the reconciliation tables to applicable GAAP measures in our earnings release carefully as you 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.
For this call, Bitcoin Depot issued its financial results for the second quarter ended September 30th, 2024 in a press release.
A copy 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.
Speaker Change: Another variable circumstances, including but not limited to risks and uncertainties identified under the caption risk factors in our recent filings you may get Bitcoin depots Securities and Exchange Commission filings porphyry by visiting the SEC website at SEC Dot Gov.
Speaker Change: Joining us on today's call are Bitcoin Depot CEO, Brandon Mintz, and CFO, Glenn Leibowitz. Following their remarks, we will open the call for questions.
Speaker Change: Before we begin, Cody Slach from Gateway Group will make a brief introduction statement. Mr. Slach, please proceed.
Speaker Change: I'd like to remind everyone. This call is being recorded and will be made available for replay via a link in the Investor Relations section of Bitcoin depots website, a supplemental earnings presentation, highlighting our Q3 performance has also been made available on our IR website now I will turn the call over to bitcoin depots.
Cody Slach: Thank you operator. Good morning everyone. Before management begins their formal remarks, we would 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.
Brandon: Brandon It's Brandon.
Cody Slach: As a result, we caution you 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.
Brandon: Thanks, Cody and good morning, everyone. Thank you for attending our third quarter 2024 conference call I'd like to briefly discuss some recent developments across our business and what gives us confidence in the quarters ahead of us.
Cody Slach: for more detailed risks, uncertainties, and assumptions relating to our forward-looking statements.
Brandon: During the quarter, we continue to focus on growing our kiosk network optimizing our existing fleet and building a robust pipeline of regional and national retail partners to enhance our footprint.
Cody Slach: Please see the disclosures in our earnings release and public filings made with the Securities and Exchange Commission.
Cody Slach: We disclaim any obligation or undertaking to update forward-looking statements to reflect circumstances or events
We ended the quarter with approximately 8300 active machines, surpassing our goals and reflecting our team's execution and vision to enhance the clients' accessibility.
Cody Slach: that occur after the date the forelooking statements are made except as required by law. We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and the reconciliation tables to applicable GAAP measures in our earnings release carefully as you consider these metrics.
Over the past year, we have continued to focus on relocating underperforming bts to new locations, which historically has shown to increase average profitability per kiosk overtime.
Cody Slach: 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.
Brandon: We continue to progress this initiative during the quarter today 3600 of Rti's have been installed for less than one year. This is an important metric as we don't experience an immediate bump in profitability on.
Cody Slach: You may get Bitcoin Depot's Securities and Exchange Commission filings for free by visiting the SEC website at sec.gov
Brandon: On average, we typically reach breakeven and four to five months on relocation expenses. So while it's not apparent in our consolidated financial the relocation strategy is working.
Cody Slach: I'd like to remind everyone, this call is being recorded and will be made available for replay via link in the Industrial Relations section of Bitcoin Depot's website. A supplemental earnings presentation highlighting our Q3 performance has also been made available on our IR website.
Brandon: For example, median transaction size continues to rise on a year over year basis.
Brandon: Furthering our north American expansion in the third quarter, we recently signed a retail partnership with a prominent convenience store chain in the southwestern U S with more than 80 locations across Texas, New Mexico, Oklahoma and Kansas through this partnership based on detailed will install Atms and roughly <unk>.
Speaker Change: Now I will turn the call over to Bitcoin Depot's CEO, Brandon Mintz. Brandon?
Brandon Mintz: Thanks, Cody, and good morning, everyone. Thank you for attending our third quarter 2024 conference call. I'd like to briefly discuss some recent developments across our business and what gives us confidence in the quarters ahead of us.
Brandon: <unk> location, beginning this month in Texas, providing customers with convenient access to purchase takeaway and participate in the broader digital financial system.
Brandon Mintz: During the quarter, we continue to focus on growing our kiosk network, optimizing our existing fleet, and building a robust pipeline of regional and national retail partners to enhance our footprint.
Brandon: We have seen continued interest in our profit share program as we have seen an expansion of 433 Atms and this program since the start of Q3 of this year, which brings us to over 1000 Atms in the program today.
Brandon Mintz: We ended the quarter with approximately 8,300 active machines, surpassing our goals and reflecting our team's execution and vision to enhance Bitcoin's accessibility.
Brandon: As a reminder, our profit share partners benefit from our expertise and operating dcms and integration with bid access software the Premier software suite, our <unk> ATM operations.
Brandon Mintz: Over the past year, we have continued to focus on relocating underperforming BTMs to new locations, which historically has shown to increase average profitability per kiosk over time.
Brandon: Our profit share program provides a capital efficient strategy for <unk> to continue its expansion. This year as we aim to have the largest installed fleet a big 2000 Atms in the company's history.
We continue to progress this initiative during the quarter.
Brandon Mintz: Today, 3,600 of our kiosks have been installed for less than one year. This is an important metric as we don't experience an immediate bump in profitability. On average, we typically reach break-even in four to five months on relocation expenses.
Brandon: Heading into the final quarter of the year and setting our sights on 2025.
Brandon: I'd like to remind our stakeholders of our growth plan, which comprises of three main categories.
Brandon Mintz: So while it's not apparent in our consolidated financials, the relocation strategy is working.
First is international expansion.
Brandon: We have shipped over 300 kiosks for upcoming Australia launch.
Brandon Mintz: For example, median transaction size continues to rise on a year-over-year basis.
Brandon: And we are anticipating regulatory approval eminently.
Brandon: We are expecting to launch in Australia to commence in 2025.
Brandon Mintz: Furthering our North American expansion in the third quarter, we recently signed a retail partnership with a prominent convenience store chain in the southwestern U.S. with more than 80 locations across Texas, New Mexico, Oklahoma, and Kansas.
Brandon: And we are also targeting additional countries for further expansion.
Brandon: We believe the growing adoption of crypto currency will offer us an opportunity to establish a market leading presence outside of North America.
Brandon Mintz: Through this partnership, Bitcoin Depot will install Bitcoin ATMs in roughly 50 locations beginning this month in Texas, providing customers with convenient access to purchase Bitcoin and participate in the broader digital financial system.
Brandon: While it's still early we are encouraged by the pace of retail opportunities we have identified in Australia.
Brandon: Second we are focused on deploying the remaining kiosk and our inventory from our large purchases earlier this year.
Brandon Mintz: We have seen continued interest in our ProfitShare program as we have seen an expansion of 433 Bitcoin ATMs in this program since the start of Q3 of this year, which brings us to over 1,000 Bitcoin ATMs in the program today.
Brandon: We have 2000 kiosks and our inventory still available to deploy.
Brandon: Which should allow us to reach a fully installed fleet of 10000 kiosks.
Brandon: Third we will continue to pursue New York State New York State remains as one of the largest potential geographical growth opportunities for our kiosks and we're in regular dialogue with regulators to secure a license to operate in the states.
Brandon Mintz: As a reminder, our profit share partners benefit from our expertise in operating BPMs and integration with Bit Access Software, the premier software suite for Bitcoin ATM operations.
Brandon Mintz: Our profit share program provides a capital-efficient strategy for Bitcoin Depot's continuous expansion this year, as we aim to have the largest installed fleet of Bitcoin ATMs in the company's history.
Brandon: At this moment, we do not have any updates on the expected timeline for approval, but are hopeful that it can happen in the first half of 2025.
Brandon: According to current ATM radar dot com.
Brandon Mintz: Heading into the final quarter of the year and setting our sights on 2025, I would like to remind our stakeholders of our growth plan, which comprises of three main categories.
Brandon: Still no physical bitcoin Atms and the state of New York.
Brandon: Over the past year <unk> depot has faced regulatory challenges in California, Connecticut per months, and Minnesota that has affected the business financially.
First is international expansion.
Brandon Mintz: We have shipped over 300 kiosks for upcoming Australia launch, and we are anticipating regulatory approval imminently.
Brandon: This has created a year over year decline in revenue and EBITDA. However.
Brandon: However, today, we are much more prepared to address how states might approach regulating our industry and this gives us a greater influence when regulation may be drafted.
Brandon Mintz: We are expecting the launch in Australia to commence in 2025, and we are also targeting additional countries for further expansion.
Brandon Mintz: We believe the growing adoption of cryptocurrency will offer us an opportunity to establish a market leading presence outside of North America.
We believe 2024 is the low point in our business and there is much more growth ahead.
Brandon: Even considering 2024 as the low point in our business, we generated $17 $2 5 million of operating cash flow in just the first nine months of this year.
Brandon Mintz: While it's still early, we are encouraged by the pace of retail opportunities we have identified in Australia.
Brandon Mintz: Second, we are focused on deploying the remaining kiosks and our inventory from our large purchases earlier this year.
Brandon: We have been exploring with our board the best way to utilize our cash to create the most value for shareholders and we believe starting a cash dividend at some point in 2025 will allow shareholders to benefit.
Brandon Mintz: We have 2,000 kiosks in our inventory still available to deploy, which should allow us to reach a fully installed fleet of 10,000 kiosks.
Brandon: At this time, we are not aware of any other U S company, whose primary business is in the crypto currency industry offering a dividend.
Brandon Mintz: Third, we will continue to pursue New York State. New York State remains as one of the largest potential geographical growth opportunities for our kiosks, and we are in regular dialogue with regulators to secure license to operate in the state.
Brandon: And it's possible Bitcoin depot could become the first cash dividend paying company and the crypto currency services industry <unk>.
Brandon: Additionally, we are excited about the growth and the bitcoin price recently and we believe that positive momentum can be helpful for our business with that being said as of the end of Q3 2024, we are happy to announce.
Brandon Mintz: At this moment, we do not have any updates on the expected timeline for approval, but are hopeful this can happen in the first half of 2025.
Brandon Mintz: According to CoinATMradar.com, there are still no physical Bitcoin ATMs in the state of New York.
Brandon: We are currently holding 11, three bitcoin and our separate investment wallet.
In summary, we are encouraged by our recent momentum and remain well positioned to execute our strategic goals.
Brandon Mintz: Over the past year, Bitcoin Depot has faced regulatory challenges in California, Connecticut, Vermont, and Minnesota that has affected the business financially.
Speaker Change: Now I will turn the floor over to our CFO, Glenn Leibowitz, who will provide more in depth insights into our financial performance and business outlook Glenn.
Speaker Change: This has created a year-over-year decline in revenue and keep-it-docs. However, today we are much more prepared to address how states might approach regulating our industry. And this gives us a greater influence when regulation may be drafted.
Glenn Leibowitz: Thanks, Brendan and good morning, everyone.
Glenn Leibowitz: I'll start with a detailed review of our third quarter 2020 for results and we will finish with a discussion on our outlook.
Speaker Change: We believe 2024 is the low point in our business, and there is much more growth ahead.
Glenn Leibowitz: Third quarter revenue declined 25% year over year to $135 3 million compared to $179 $5 million in last year's third quarter. This decline was largely driven by the impact of unfavorable legislation that was passed in California that went into <unk>.
Speaker Change: Even considering 2024 as a low point in our business, we generated $17.25 million of operating cash flow in just the first nine months of this year.
Speaker Change: We have been exploring with our board the best way to utilize our cash to create the most value for shareholders, and we believe starting a cash dividend at some point in 2025 will allow shareholders to benefit.
Glenn Leibowitz: In January as well as regulatory changes in Connecticut, Vermont in Minnesota that went into effect in Q2 and Q3. Additionally.
Speaker Change: At this time, we are not aware of any other U.S. company whose primary business is in the cryptocurrency industry offering a dividend. And it's possible Bitcoin Depot could become the first cash-dividend-paying company in the cryptocurrency services industry.
Glenn Leibowitz: Additionally, we relocated kiosks during the quarter to optimize our fleet for maximum profitability.
Glenn Leibowitz: We are actively engaged in California, and other states within our legislature to continue to seek constructive changes to the operational limitations that are currently in place in the state.
Speaker Change: However, as Brendan mentioned, our focus remains to drive revenue growth through kiosk expansion in other markets.
Speaker Change: With that being said, as of the end of Q3 2024, we are happy to announce that we are currently holding 11.3 Bitcoin in our separate investment wallet.
Speaker Change: Adjusted gross profit for the third quarter of 2024 decreased 17% to $22 4 million compared to $26 9 million for the third quarter of 2023.
Speaker Change: In summary, we are encouraged by our recent momentum and remain well positioned to execute our strategic goals.
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.
Speaker Change: Adjusted gross margin in the third quarter of 2024 increased 160 basis points to 16, 6% compared to 15% in the third quarter of 2023.
Glenn Leibowitz: Thanks, Brandon, and good morning, everyone. I'll start with a detailed review of our third quarter 2024 results, and we'll finish with a discussion on our outlook.
Speaker Change: This margin increase was largely driven by optimizing our markup maximize profitability.
Total operating expenses for the third quarter of 2024 declined 13% to $16 9 million compared.
Glenn Leibowitz: Third quarter revenue declined 25% year over year to $135.3 million compared to $179.5 million
Speaker Change: Compared to $19 5 million.
Speaker Change: Last year's third quarter.
Glenn Leibowitz: in last year's third quarter. This decline was largely driven by the impact of unfavorable legislation that was passed in California that went into effect in January, as well as regulatory changes in Connecticut, Vermont, and Minnesota that went into effect in Q2 and Q3.
Speaker Change: The improvement was attributable to lower professional services expenses, and we anticipate that trend to continue over the coming quarters as we move further away from the <unk> transaction and optimize our expenses for the life as a public company.
Glenn Leibowitz: Additionally, we relocated kiosks during the quarter to optimize our fleet for maximum profitability.
Speaker Change: GAAP net income for the third quarter of 2024 increased 116% to $2 3 million compared to $1 1 million.
Glenn Leibowitz: We are actively engaged in California and other states with their legislature to continue to seek constructive changes to the operational limitations that are currently in place in the state.
Speaker Change: Third quarter of 2023, this was driven by lower operating expenses as well as expenses associated with the pipe financing in the third quarter of 2023 that did not reoccur.
Glenn Leibowitz: However, as Brandon mentioned, our focus remains to drive revenue growth through kiosk expansion in other markets.
Speaker Change: Adjusted EBITDA, a non-GAAP measure decreased to $9 2 million for the third quarter of 2024 compared to $13 9 million for the third quarter of 2023.
Glenn Leibowitz: Adjusted gross profits for the third quarter of 2024 decreased 17% to $22.4 million, compared to $26.9 million for the third quarter of 2023.
Speaker Change: This was a result of lower revenues during the quarter of 2024 compared to the third quarter of 2023.
Glenn Leibowitz: adjusted gross margin in the third quarter of 2024, increased 160 basis points to 16.6% compared to 15% in the third quarter of 2023.
Speaker Change: Also as a reminder, we deploy more kiosks, we increase our fixed costs.
Speaker Change: These deployments to not come within immediate revenue or EBITDA improvement, but they are expected to drive growth later in 2024 and in future years.
Glenn Leibowitz: This margin increase was largely driven by optimizing our markup maximized profitability.
Adjusted EBITDA margin, which is derived from the adjusted EBITDA divided by revenue in the third quarter of 2024 was six 8% compared to a seven 8% margin in the third quarter of 2023.
Glenn Leibowitz: Total operating expenses for the third quarter of 2024 declined 13% to $16.9 million compared to $19.5 million.
Glenn Leibowitz: the last year's third quarter. The improvement was attributable to lower professional services expenses and we anticipate that trend to continue over the coming quarters as we move further away from the DSTAC transaction and optimize our expenses for the life as a public company.
Speaker Change: We continued to focus on our cash flow and balance sheet and ended the quarter with approximately $32 $2 million in cash and cash equivalents and generated $5 8 million in operating cash flows in the third quarter of 2024 compared to $7 million generated in the three months ended September <unk>.
Glenn Leibowitz: Gap net income for the third quarter of 2024 increased 116% to $2.3 million compared to $1.1 million.
Speaker Change: 23.
Speaker Change: Debt at quarter end was $53 $5 million, which includes finance leases.
Glenn Leibowitz: for the third quarter of 2023. This was driven by lower operating expenses as well as expenses associated with our pipe financing in the third quarter of 2023 that did not reoccur.
As a reminder.
Speaker Change: We expect to continue to improve our cash flow as more of our kiosks.
Speaker Change: <unk> is from lease to own and as we continue to become an overall more efficient organization.
Glenn Leibowitz: Adjusted EBITDA, a non-gap measure, decreased to $9.2 million for the third quarter of 2024 compared to $13.9 million for the third quarter of 2023.
Speaker Change: As we think about our capital allocation strategy. Our first priority is to pay down our remaining preferred dividends of <unk> assets.
Speaker Change: Instead as repaid we will turn our attention other ways of driving shareholder value, including a potential dividend.
Glenn Leibowitz: This was a result of lower revenue during the quarter of 2024 compared to the third quarter of 2023.
Speaker Change: Now turning to our outlook given the variability in our business in the wake of the California legislation and other legislative changes as well as significant revenue ramp in our kiosks combined with our kiosk relocation efforts.
Glenn Leibowitz: Also, as a reminder, we deploy more kiosks. We increase our fixed costs. 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: We're not providing formal guidance.
Glenn Leibowitz: adjusted EBITDA margin, which is derived from the adjusted EBITDA divided by revenue. In the third quarter of 2024 was 6.8% compared to a 7.8% margin in the third quarter of 2023.
Speaker Change: We remain committed to additional operational enhancements to drive profitability.
Speaker Change: <unk> going forward, including improving vendor pricing lowering professional costs and optimizing customer markups.
Speaker Change: We are focused on optimizing the business for profitability and positive cash flow ahead.
Glenn Leibowitz: We continued to focus on our cash flow and balance sheet, and ended the quarter with approximately $32.2 million in cash and cash equivalents, and generated $5.8 million in operating cash flows in the third quarter of 2024, compared to $7 million generated in the three months ended September 2023.
Speaker Change: However, the remainder of 2024, and we still expect to follow a similar seasonality trend as.
Speaker Change: As we have described previously with significantly higher revenue in Q2, and Q3 than in Q1 and Q4.
Speaker Change: With that we are happy to take your questions operator.
Glenn Leibowitz: Net at quarter end was $53.5 million, which includes finance leases.
As a reminder,
Speaker Change: Thank you.
Glenn Leibowitz: We expect to continue to improve our cash flow as more of our kiosks
Speaker Change: As a reminder.
Speaker Change: You'd like to ask a question.
Speaker Change: Please press star and the number one on your telephone keypad.
Glenn Leibowitz: transition from leased to owned and as we continue to become an overall more efficient organization.
Speaker Change: We will pause for just a moment to compile the roster.
Glenn Leibowitz: As we think about our capital allocation strategy, our first priority is to pay down our remaining preferred dividend to VP assets. Once that is repaid, we will turn our attention to other ways of driving shareholder value, including a potential dividend.
Speaker Change: We will begin.
Speaker Change: And our question and answer session and.
Speaker Change: And our first question comes from the line of Mike Colon NASA from H C. Wainwright.
Now turning to our Outlook.
Speaker Change: Please proceed good morning, guys Hi, good morning, guys. Thank you for taking my questions. Today first one for me maybe for you Brendan It would be great to get your outlook for the Big point ATM industry in the U S from a regulatory standpoint, especially after last week's election results. The market seems to believe that frequent depot will be a major beneficiary.
Glenn Leibowitz: Given the variability in our business in the wake of the California legislation and other legislative changes, as well as significant revenue ramp in our kiosks, combined with our kiosk relocation efforts,
Glenn Leibowitz: We are not providing formal guidance. We remain committed to additional operational enhancements to drive profitability, growth going forward, including improving vendor pricing, lowering professional costs, and optimizing customer markups.
Speaker Change: From the New administration, given the recent run in the stock so it'd be great to get your views here.
Speaker Change: Hey, Mike.
Speaker Change: Generally speaking.
Glenn Leibowitz: We are focused on optimizing the business for profitability and positive cash flow ahead.
Speaker Change: The home.
Speaker Change: Cryptocurrency industry is expecting.
Speaker Change: Less regulation.
Glenn Leibowitz: However, the remainder of 2024 we still expect to follow a similar seasonality trend as we have described previously, with significantly higher revenue in Q2 and Q3 than in Q1 and Q4.
Speaker Change: And any existing regulation to likely be less harsh ship. It is considered harsh today.
Speaker Change: And then it adds so far.
Speaker Change: For us I think on a federal level it'll definitely be more positive.
With that, we are happy to take your questions. Operator?
Speaker Change: On a state by state basis.
Speaker Change: Some of that will trickle down as well I don't think we're going to see a change overnight.
Thank you.
As a reminder, if you'd like to ask a question,
Speaker Change: And the four states that are impacting our financial performance today.
Glenn Leibowitz: Please press star and the number one on your telephone keypad.
But I think moving forward any states that are thinking about coming out with legislation market impacts our business financially I think it's a little less likely to happen and if it does happen I think it's.
Glenn Leibowitz: We will pause for just a moment to compile the roster. Thank you.
Speaker Change: Slightly less likely to be as impactful in a negative way.
We will begin our question and answer session.
Speaker Change: And our first question comes from the line of Mike Golonesa from H.C. Wainwright.
Speaker Change: But it's a little bit too early to tell.
Speaker Change: Got it I appreciate the color there and I know you guys just announced last quarter, a bitcoin treasury strategy.
Good morning, guys.
Speaker Change: Hi, good morning guys. Thank you for taking my questions today. First one for me, maybe for you, Brandon. It would be great to get your outlook for the Bitcoin ATM industry in the U.S. from a regulatory standpoint, especially after last week's election results. The market seems to believe that Bitcoin Depot will be a major beneficiary from the new administration, given the recent run of the stock. So it'd be good to get your views here.
Speaker Change: How has your views on that approach may be shifted with this new administration coming in the recent running bitcoin and now while considering the potential for a dividend in 2025.
Speaker Change: We're really excited about the big claim Treasury and we're glad we bought 11 three bitcoin when we did.
Hey Mike, good morning. Generally speaking, you know, the whole
Speaker Change: For now our focus is on paying out the remainder of the preferred dividend and giving us that flexibility to pay a cash dividend at some point in 2025.
Cryptocurrency industry is expecting less regulation and any existing regulation.
Speaker Change: To common shareholders.
Speaker Change: to likely be less harsh, if it is considered harsh today than it is, so
Speaker Change: For now we.
Speaker Change: We don't believe were going to upsize, the bitcoin treasury and a very meaningful way.
Speaker Change: For us, I think on a federal level, it'll definitely be more positive on a state-by-state basis.
Speaker Change: Until we get to a point where.
Speaker Change: We evaluate what exactly we're going to do as far as the cash dividend to common shareholders.
Speaker Change: I think some of that will trickle down as well. I don't think we're going to see a change overnight, you know, in the four states that are impacting our financial performance today.
Speaker Change: We didn't want to buy.
Speaker Change: Bitcoin and not have ability to pay off the rest of the preferred dividend so things could change in the future.
Speaker Change: But I think moving forward, any states that are thinking about coming out with legislation that can impact our business financially, I think it's a little less likely to happen, and if it does happen, I think it's
Speaker Change: But right now our focus is getting to be leased.
The first company or one of the first companies that are in the cryptocurrency services industry that are doing a cash dividend.
Speaker Change: slightly less likely to be as impactful in a negative way, but it's a little bit too early to tell.
Speaker Change: Our strong cash flow.
Speaker Change: Okay.
Speaker Change: Great. Thanks, that's all for me.
Speaker Change: Okay.
Speaker Change: Got it. Appreciate the color there. And I know you guys just announced last quarter a Bitcoin treasury strategy. How has your views on that approach maybe shifted with again this new administration coming in, the recent run in Bitcoin, and now while considering the potential for a dividend in 2025?
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Again, if you would like to ask a question. Please press star and the number one on your telephone keypad.
Speaker Change: Our next question comes from the line of Al <unk> from B Riley.
Speaker Change: Please proceed.
Speaker Change: Hey, good morning, guys on Slide 22, you show.
Speaker Change: The productivity.
Speaker Change: Ramp year to year every cohorts from 2020, 2021 2022.
Speaker Change: For now, our focus is on paying out the remainder of the preferred dividend and giving us that flexibility to pay a cash dividend at some point in 2025.
Speaker Change: You've had a large launch this year.
Speaker Change: New kiosks and.
Speaker Change: I know youre, not giving guidance, but.
Speaker Change: to common shareholders. For now, we don't believe we're going to upsize the Bitcoin treasury in a very meaningful way until we get to a point to where
Speaker Change: Can you give us some color on what youre seeing in the new.
Speaker Change: Geos that had been deployed maybe back half of 2020.
Speaker Change: Bringing thus far in 2000 and for that.
Speaker Change: We evaluate what exactly we're going to do as far as the cash dividend to common shareholders.
Speaker Change: Are they.
Speaker Change: Tracking maybe this is sort of trajectory of <unk>.
Speaker Change: We didn't want to buy too much Bitcoin and not have ability to pay off the rest of the preferred dividend. So things could change in the future. But right now our focus is getting to be.
Speaker Change: This new kiosk productivity improvement from launch two month three month six month 12.
Speaker Change: Can you give us your thoughts on that.
Speaker Change: Yes, yes.
Speaker Change: Yes, Hey, this is Scott Buchanan.
Speaker Change: the first company or one of the first companies that are in the cryptocurrency services industry that are doing a cash dividend based on our strong cash flow.
Speaker Change: We're definitely still seeing the kiosks ramp ups like you have historically.
They continue to grow in volume.
Speaker Change: They've established a customer base and been in place longer.
Great. Thanks, Brennan. That's all for me.
Speaker Change: So nothing is really changing there on the trends.
Speaker Change: As far as an exact comparison between the ramp in previous years and this year I don't I don't have that in front of me, but nothing materially has shifted there and we're still seeing a ramp up in volume S kiosks to mature.
Speaker Change: Thank you. Again, if you would like to ask a question, please press star and the number one on your telephone keypad.
Speaker Change: Alright.
Speaker Change: Our next question comes from the line of Hal Goetsch from B. Reilly.
Speaker Change: So.
Speaker Change: Like do you think like Hey, you know.
Please proceed.
Speaker Change: Can you just give us a feel for how you launch a kiosk.
Speaker Change: Hey, good morning, guys. On slide 22, you show the productivity ramp year-to-year of your cohorts from 2020, 2021, 2022.
Speaker Change: What is it in the first quarter, it's kind of in a store first 90 days.
Speaker Change: Uh-huh.
Speaker Change: What is it generally doing on a median basis without the average not the best like you know the media is it doing.
Speaker Change: You've had a large launch this year of new kiosks and
Speaker Change: A couple of Grand a couple of hundred it's kind of does it really go through.
Speaker Change: In the first 90 days the first 90 days doing a couple of Grand on average.
Speaker Change: I know you're not giving guidance, but can you give us some color on what you're seeing in the new.
Speaker Change: By the end of the first 90, it is probably doing like 2000 a month.
kiosks that have been deployed maybe
Speaker Change: Okay.
Speaker Change: Okay. That's helpful. Thank you very much.
three and thus far in 24 that
Yes.
Speaker Change: tracking maybe this sort of trajectory of new kiosk productivity improvement from launch to month 3, month 6, month 12. Can you give us your thoughts on that?
Speaker Change: Thank you.
Speaker Change: At this time.
Speaker Change: We will conclude the question and answer session over here I will now turn the call back over to Brendan Lynch for closing remarks, Sir.
Yes.
Speaker Change: Yeah, hey, this is Scott Buchanan. We're definitely still seeing the kiosks ramp up like we have historically.
Thanks, everyone for your interest in Bitcoin depot and hope to see you guys next quarter.
Speaker Change: They have continued to grow in volume as they've established a customer base and been in place longer. So nothing's really changing there on the trends.
Speaker Change: Thank you for joining us today for Bitcoin depots conference call you may now disconnect.
Speaker Change: As far as an exact comparison between the ramp in previous years and this year, I don't have that in front of me, but nothing materially has shifted there, and we're still seeing a ramp up in volume as kiosks mature.
All right.
Speaker Change: So, but like, do you think like, hey, you know, you know, can you just give us a feel for like, hey, you launch a kiosk, you know?
Speaker Change: What is the meat, you know, in the first quarter, it's kind of in a store, like first 90 days.
Mm-hmm.
Speaker Change: What is it generally doing on a median basis, not the average, not the best, like, you know, the media, is it doing like...
Speaker Change: a couple grand, a couple hundred. It's kind of, does it really go through a discovery stage? In the first 90 days, yeah, in the first 90 days, doing a couple grand on average. By the end of the first 90, it's probably doing like $2,000 a month.
Okay.
Okay, that's helpful. Thank you very much.
Thank you.
at this time.
Speaker Change: We will conclude the question and answer session over here. I will now turn the call back over to Brandon Mintz for closing remarks, sir.