Q3 2025 PSQ Holdings Inc Earnings Call

Thank you for standing by. My name is Angela. I know, I will be your conference operator. Today at this time I would like to welcome everyone to the Public Square third quarter 2025 earnings conference. Call Alliance have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 in your telephone keypad. If you would like to read more, your questions simply press star 1 again, thank you. I would now like to turn the call over to Mr. William Kent head of corporate Affairs. You may begin.

Thank you, Angela, and good morning, everyone. Welcome to Public Square's third quarter 2025 earnings conference call.

Joining me today are Michael Cipher, chairman and chief executive officer and James Wren, Chief Financial Officer.

Before we get started, we want to emphasize that the information discussed on this call, including our Outlook and guidance is based on information as of today. And contains forward-looking statements that involve risks, uncertainties and assumptions.

We undertake no Duty or obligation to update such statements as a result of new information or future events.

please refer to today's earnings, press release and our SEC filings including our 2024 10K for factors that may cause actual results to differ materially from our forward-looking statements,

We'd also like to point out that we present non-gaap measures in addition to and not as a substitute for financial measures calculated in accordance with gaap, I'll now hand the call over to Michael Michael, please go ahead.

Thank you. Well and welcome everyone to our third quarter 2025 earnings call. We appreciate you all joining us today and to get us started, I would like to share some of our most notable highlights from the quarter. It was a big 1 for us.

First, we beat our previously, issued Revenue guidance by 10%, and we are proud to reaffirm fourth quarter 2025 as well as full year 2026 Revenue guidance.

Secondly, our fintech Revenue increased 28% quarter over quarter with our payments Revenue, increasing 50% quarter-over-quarter and our credit Revenue, increasing 22% quarter over quarter.

Third 1 year ago, we spoke about how the Investments we made in 2024 paired with the restructuring of our business that took place in November of 2024 would lead to a drastic improvement in our ability. To generate more Revenue while reducing our spend

Today.

I am proud and grateful to report that our efforts have paid off resoundingly. Our net loss has decreased by 33% compared to the prior year period and our operating expenses decreased 13% compared to the prior year period. I'm incredibly proud of the way our team has executed. We're continuing to leverage strategies to increase our efficiency, and we are excited for this positive momentum to continue.

Streamline our focus and double down on fintech. We continue to see rapid growth in our payments business as we onboard new Merchants, who are passionate about our commitment to economic Liberty and technological excellence. And we expect this momentum to carry into the fourth quarter with our robust onboarding Pipeline and anticipated, Christmas shopping activity.

Additionally.

Our credit business remains healthy and is positioned to benefit from these same Trends. As we exercise, the power of our bundled checkout offering that we speak about often.

Looking to 2026. We plan to take advantage of significant opportunities to build Upon Our 2025 success. We're expanding our fintech platform with new services, our merchants and customers have sought after including private label credit cards Innovative fundraising tools crypto payment capabilities and digital asset treasury Management Solutions.

will now pass the

To our wonderful CFO, James Wren, to provide a deeper Financial overview. On our performance in the third quarter. James please, take us away.

Thank you, Michael, and good morning, everyone. Um, let's walk through the key financial highlights from the third quarter and year-to-date 2025 results.

As a result of our decision announced on August 12th to monetize our brand segment through the sale of every life. And to monetize our Marketplace segment, through a sale or strategic repurposing of the marketplace IP to complement our fintech offering. We are accordingly showing the results of both those segments and discontinued Ops throughout our financial statements.

In regards to revenue growth and financial performance, we reported net revenue from continuing operations of 4.4 million for the quarter ended, September 30th 2025. That's a 37% year-over-year. Increase compared to 3.2 million in Q3 of 2024. As Michael mentioned, Q3 Revenue. B, our most recent Revenue, guidance of the September of 2025 by 0.4 million or 10%.

the breakdown of Revenue, illustrates the strength of our current revenue streams as stated, fintech

Financial technology which includes Payment Processing via psq payments and credit offering via Cordova earned 4.4 million in net revenue which as stated was a 37% increase over the prior period.

This includes 1.5 million from our recently launched psq payments. An increase of 50% from Q2 of 2025 year to date. Fintech Revenue was 10.9 million which equates to an increase of 4.3 million or 66% from the prior year.

As noted our credit business, um, Revenue increased by half a million dollars or 22% quarter over quarter to 2.9 Million. In Q3 the company enhanced the quality of its credit portfolio performance through greater use of AI driven underwriting and machine learning. Our portfolio is demonstrated consistent Improvement in early payment performance, with first payment, default rates declining and doing so in a challenging Market environment

Regarding operating expense controls, uh, for continuing operations. I'd like to highlight the following

the company maintains strong expense discipline in Q3 and continued to optimize Capital allocation for Q3 General and administrative expenses reduced by 2.3 million or 22.3% compared to the same period last year and year to date G&A expenses decreased by 33% or 10.1 million dollars year to date 2025 compared to 2024 R&D expenses for the quarter increased by

.8 million over the prior year and 2 million year to date. Compared to 2024, we continue to invest in internally developed software. These actions drove this increase in expense and we allocated 2.3 million in capital for ongoing enhancements, to our fintech platforms that are key to our future success.

ultimately this resulted in a notable improvement in our operating loss of 8.1, million compared to the prior year and a 24.2 million operating loss year to date 2025

Transitioning to margin and profitability.

Fintech non-gaap gross margin for Q3 with 68%, compared to 97% in Q3 of last year.

continuing operations for the quarter was 9.7 million, 0.6 million improvement from the 10.3 in the same quarter of 2024,

moving on net loss for the quarter was 12 million compared to a loss of 13.1 million. For the same quarter of 2024, the net loss on a per common share basis was 26, um, cents per share, a 37% per share Improvement, compared to a loss of 41 cents per share reported in Q3 of 2024.

Um for continuing operations, the net loss improved from 27 cents, per share to 22 cents per share and the current quarter for discontinued operations. The net loss improved from 14 cents, per share to 4 cents per share in the third quarter of 2025

Um discussing cash flow and liquidity as of December 30th 2025 Public Square, had 12.3 million of cash and restricted cash, which included 1.3 million related to discontinued Ops net. Cash used for operating activities decreased by 9.7 million. During the first 3 quarters of 2025,

As compared to the same period of the prior year.

Um, on our revolving line of credit that we utilize to finance our credova credit products. We had a 4 Points, we had 4.6 million outstanding on our 10 million line of credit.

We made a strategic decision to retain consumer financing receivables on our balance sheet, representing approximately $3.4 million of cash flow year-to-date. In 2025, we executed on this strategy to improve financial results and enhance yield on capital.

This Capital will be cycled back to cash based on the payment terms and with healthy returns.

Um, discussing our ATM, um, at the market offering which was established May 23rd 2025, I will note that we did not utilize the ATM during Q3

Transitioning to discuss the monetization of Our Brands and Marketplace segments. The company is engaged in an investment Bank to conduct a robust sales, process of its brand segment business this process. I'm happy to report is On Target to reach a purchase agreement. By the end of the fourth quarter. 2025, We are continuing to explore a sale or strategic repurposing of our Marketplace segment. And we will provide updated disclosures as appropriate.

Coming back to expenses, we're happy to report that the company has experienced better than expected operating expense. Reductions results in its reorganization announced in the fourth quarter of 2024 realizing approximately 11 million of its expected, 11 million annualized, saving savings. So we're well ahead of schedule in 2025, moving on to discontinued Ops, um, Brands driven primarily by every life earned 3.7 million in Revenue, in Q3, which are create, which equates to 42.7% increase or 1.1 million. Increase compared to the prior period. Trailing 12-month revenue for every life, exceeded 13.4 million Marketplace, earned 0.2 million during the quarter, which was in line with management expectations.

The business Outlook and guidance is unchanged from our 7th, September 25th 255, 2025 analyst and investor day. Fourth quarter. 2025 revenue is expected to be approximately 6 million dollars. Comprised of 2.4 million in payment processing revenue and 3.6 million in credit product related Revenue.

Again, we affirm our full year, 2026 Revenue, guidance of greater than or equal to 32 million in Revenue.

And so to summarize. We are growing Revenue at a strong Pace maintaining healthy margins and significantly narrowing. Operating losses in part due to reducing operating cost year-over-year. We believe we're well positioned to deliver long-term shareholder value as we grow market, share maintain operational, discipline, and scale the business.

Now, let me hand it back to Michael, um, for more about the exciting path, forward for Public Square.

Thank you, James.

To Value economic Liberty, with our bundle checkout offering including payments, credit and digital asset treasury management, paired, with our leveraging of AI, Defi and proprietary economic modeling, we are firmly positioned to lead the values driven NextGen of fintech, that is growing rapidly amid. Systemic, distrust of Legacy Finance,

Today roughly 5 weeks into Q4.

We are positioned exactly where we want to be the business is exceeding expectations and we anticipate a significant Christmas shopping season for our merchants and customer community.

We will have quite a lot of exciting developments to announce over the next 7 weeks, especially regarding our soon to launch fundraising platform psq impact as well as our private label credit card program. We're packing a ton into Q4 as we seek to end the year on our highest note ever. So be sure to stay tuned. We are grateful, you're on the journey with us, onward, and upward.

now, let's move on to q and I

Thank you. We will now begin the question and answer session if you have dialed in and would like to ask a question, please press star 1 and your telephone keypad to raise your hand and join the queue. If you would like to withdraw your questions in both press star 1 again, thank you. Your first question comes from the line of Darren at tahi with Ross Capital. Your line is now open.

Hey, good morning, guys. Thanks for taking my question, and congrats on the progress, uh, just 2 questions by May. Um, just in terms of the, the bundling can you talk about, uh, both the attach rate, uh, of customers, bundling, and then how that's benefiting retention. And then second on

Your 26 Revenue, guidance can you speak to in a little bit more detail? What's assumed as kind of existing products to drive that growth versus new products? I, I guess set another way, how much kind of line of sight, do you have in that 32 versus some of these call options on new products? You're introducing thanks.

Great question, Darren great to hear from you. Thanks for joining us today.

To address your first question, I will say that the majority of our Enterprise clients are utilizing our bundled services.

So the majority of our payments revenue is actually coming from payments. Clients that are also leveraging our credit offerings at checkout to drive conversion as well as our marketing Services, because that's really the the trifold Beauty we bring to the transaction. Is that we're able to not only secure your transaction via our payment processing capabilities, provide conversion, tools via credit offerings

That lend to the entire credit Spectrum, but also we as we mentioned on our analysts investor day back on September 25th, we want to help you elevate your brand message, utilizing our brand, creative storytelling, and marketing capabilities. So again, the majority of our revenue generated through payments is actually with Merchants who are also using our credit offering and the suite of marketing services that we leverage and to go a little bit further on that. You asked the question of kind of what that does to retention. Uh, this makes our product incredibly sticky because we are far deeper ingrained in your business and in the operations layer of your transaction. Then a typical payments company would be. We are meeting with your CFO or having conversations with your marketing department about how to drive conversion. And when you as a consumer, go to checkout on these sites, these Merchants that we work with, you actually see multiple payment options that are all housed underneath our Umbra.

And it leads to a deepening of a relationship with our merchants and ultimately a stickiness that is hard to replicate without that bundled service. So Darren I just reaffirmed that this is truly key to our success as we move forward, regarding revenue for 2026, I would say that the guidance that we have issued is really focused on our business as it stands today. Um, we we don't want to factor in too much of uh, new verticals that we've talked about over the last 2 months. Um,

We're we're conservatively projecting those into our Revenue, guidance for 2026, and really want to feel confident in issuing guidance. That is based on the foundation of the business as it stands today James. I don't know if there's anything else you'd add there, but

Yeah, I would, I would, um, reiterate that our $302 million 2026 guidance is based on kind of the product set and revenue sources that we have today, related to private label credit cards and some of the developments in those areas. Um, we'll update forecasts accordingly in the quarters ahead as we have better visibility, but that's not really, um, baked into the current forecast.

Thank you.

Your next question comes from the line of Franchesco marble with Maxim group. Your line is now open.

Hey guys. Thank you for taking my question, congratulation on the quarter, um, kind of like a big picture you, you already kind of touched on this, but I was curious, if you could give us a bit more color around the, the momentum in, in Top Line. I was wondering whether it is primarily new customer um, Edition new customer being on boarded or is it more higher transaction volume from existing customers or greater adoption of your bundle uh, offering?

Great question. Thanks Franchesco, great to hear from you. Um, I would say that the, the majority of our Topline growth, the strong majority is from new customer acquisition, we've really turned on boarding on in the second half of the year. Uh, we've gotten far more efficient in our ability to move F folks through the pipeline in a much more expedited manner. So uh, the growth in Topline that we have seen over the last 2 quarters as well as the growth we anticipate seeing in 2026 that we've got guided towards is largely an effect of our expedited onboarding capabilities and, uh, we are grateful that we've barely scratched the surface on our pipeline. So being able to move through that pipeline, uh, more efficiently is going to be Key to Our Success over the next 12 months. And thankfully, we've already started to see that proved itself out. The only other thing I'd add here

Here is that, you know, obviously in Q4 many of our Merchants are in the retail sector. So it's exciting that we get to uh, have these newly on-boarded Merchants. Um, as we head into Christmas shopping season, help them Elevate their brand. And some of the deals, they're offering for events like Black Friday or Cyber Monday, uh, Christmas shopping season, this is sort of their Super Bowl. And so we're honored that they would invite us into the transaction layer with our bundled offering uh to help them Drive sales toward the end of the year here. Um another reason why we anticipate a strong Q4. So that's how I'd answer that will James great. Thank you Franchesco.

Thank you.

At this time, I will be having the call over to Mr. William Kent for submitted questions.

Thank you, Angela. As with quarters past, we've taken questions through the State Technologies platform before the call, and we'll answer a couple of the questions that were submitted. The first question is: What is the utilization level of PSQ's Payment Processing Service? Has there been growth, and is the client base mostly staying with niche markets, i.e., firearms dealers, or are you seeing more diverse businesses that are making a switch over?

Yeah, I love this question. Uh, thank you to, uh, whichever shareholder asked this. Um, we're grateful, you're on the journey with us. I would say resoundingly, that our base of merchants that have joined us in our fintech offering is, actually more industry diverse than I would have anticipated at this stage. Um, we've had a wide ranging, um, uh, Network that is, uh, joined us in this Mission primarily focused on retail. So, online, retail e-commerce is our bread and butter certainly. But we've really expanded into uh, more B2B SAS Services as well. Uh, We've focused a lot on our AC product, allowing for these business, to business relationships to strengthen. Um, we've really, uh, focused on the nonprofit space and we've been able to provide a bunch of value there. Uh, we've had great opportunities in Firearms, adjacent verticals as well, that have been referred to us by the Firearms space.

So, our Pipeline and existing Merchant, mix is more diverse than I would have anticipated at this stage. And I think that's a testament to the, um, the scalability of our payments stack. And our multiple payment methods, bundled into the checkout offering, um, and the expansion of our Tam. Ultimately, we are really excited about the merchants that we get to serve and uh, we've built a strong Foundation that we believe will catapult us to reaching that broader audience.

So stay tuned on this too. We'll continue to update uh the street as we onboard new material, Merchants from these other verticals to kind of showcase what's possible in these spaces. And so far, we're really pleased with the progress.

Thank you. Uh, next question. Uh, Public Square. Stock has been volatile suggesting investor uncertainty around long-term strategy, and profitability, how is management balancing new initiatives, such as crypto, treasuries or service, with the goal of achieving steadier, earnings and long-term growth.

Day, uh, back on September 25th. Uh, that from our perspective, our stock is undervalued, we really believe in the upside potential of our Equity, as our business, continues to execute and regarding new initiatives. Our focus is to maintain the principles that guided Q3 to success. And ultimately, we believe will guide Q4 all of 2026 and our future to success which is operating efficiency.

Uh, that is tied with an executional Focus.

To drive this fintech business forward in such a way where we are able to substantially increase Revenue, while actually decreasing our losses and expenses. This is what we proved out in Q3 and it's what we anticipate proving out in the quarters to come. So our focus is anything that complements those principles.

Tight execution, lean efficiency of our operating business, constantly finding ways to improve our offering in order to drive an increase of Revenue, while reducing expenses that is our focus. And to the extent that these new initiatives, help to complement that and the Investments, we can make in these new initiatives Drive value for our shareholders, in alignment, with those principles. Those are the things that we prioritize. And so, as I mentioned, uh, earlier on, in this earnings, call in my comments, you know, we are packing a ton into Q4. Uh, we've been strategically placing Investments, uh incrementally that will uh complete the full picture.

Of our fintech offering. And we'll have quite a lot to announce over the next 7 weeks regarding those new initiatives, but know that all of those initiatives are being deployed on the foundation of sound unit economics in a tight operational, Focus.

Thank you, Michael. And for our last submitted question uh back on August 12th which was our second quarter earnings. You said that you were monetizing every live via strategic sale uh and either selling or repurposing the marketplace it. Uh later you announced crypto treasury as a service and partnership with idx.

And said you'd Implement for your own treasury. Do you have an update on those?

Absolutely so James touched on this a little bit in his comments, um, but everything we articulated on August 12th, uh, as well as September 25th is coming right along. We are indeed in the process of monetizing every life via strategic sale. And we anticipate that we will be in the purchase agreement stage by the end of the year as previously affirmed. Uh, and we are pursuing the path of either selling or repurposing the marketplace IP. Uh, we are talking to multiple interested parties and also exploring uh, the world in which we repurpose the marketplace IP and technology for the go forward, fintech business and we'll provide an announcements or updates on that process as relevant and then regarding idx and our overall

Positioning on crypto. Um, absolutely. We are in the process of establishing our own treasury via our strategic partnership with idx, and that ball is rolling right along, uh, anticipated timelines. So, we're happy with the progress that we are articulated, uh, 6 weeks ago, we've made Leaps and Bounds since then. And as I mentioned Q4, is going to be big for us as we leverage these different strategies and updates to do 2 things number 1, n2025 on an incredibly high note, but also set up for a clean 2026 where our fintech focus is um uh dialed in. And that we have, these monetization efforts uh significantly progressed upon so that we can focus on the go forward business as we head into q1 and Q2.

James anything you'd add.

Yeah, thank you covered, it will. All right.

Well.

Uh, ladies and gentlemen, I believe that concludes our questions. So with that.

Uh we can't tell you how much we appreciate you joining us this morning. We are grateful that you're on the journey with us. We appreciate your interest in Public Square and we hope you have a fantastic remainder of your Thursday. Thank you all

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.