Q3 2025 Bitcoin Depot Inc Earnings Call
Speaker #1: A copy will be furnished in a report on Form 8-K filed with the SEC and will be available in the investor relations section of the company's website.
Speaker #1: Joining us on today's call are Bitcoin Depot CEO Brandon Mintz and CFO David Gray. Following their remarks, we will open the call for questions.
Speaker #1: Before we begin, Cody Slach from the Gateway Group will make a brief introductory statement. proceed. Mr. Slach, please
Speaker #1: Before we begin, Cody Slach from the Gateway Group will make a brief introductory statement. proceed. Mr. Slach, please
Speaker #2: Thank you, operator. 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.
Speaker #2: As a result, we caution you that there are a few 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 #2: 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.
Speaker #2: 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 #2: We 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.
Speaker #2: Carefully, as you consider these metrics, we refer you to our filings with the SEC 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 captioned risk factors in our recent filings.
Speaker #2: You may get Bitcoin Depot's SEC filings for free by visiting the SEC website at www.sec.gov. I'd like to remind everyone that this call is being recorded and will be available for replay via a link in the investor relations section of Bitcoin Depot's website.
Speaker #2: A supplemental earnings presentation highlighting our performance has also been made available on our IR website. Now, I will turn the call over to Bitcoin Depot's CEO, Brandon Mintz.
Speaker #2: Brandon.
Speaker #3: Thanks, Cody, and good morning, everyone. Thank
Speaker #3: you for joining our third quarter 2025 earnings call. Bitcoin Depot delivered another strong quarter, exceeding the preliminary results we announced in October. Our third quarter performance once again demonstrates the operating leverage in our business model, supported by continued kiosk expansion, higher transaction volumes, and disciplined cost management.
Speaker #3: As a result, we achieved meaningful revenue growth, a substantial increase in adjusted EBITDA, and further improvement in profitability and cash generation. Consumer demand remained quite strong in the third quarter, with median transaction size up 40% year over year to $350, and total transaction volume moving steadily higher to $162.5 million.
Speaker #3: Our kiosk growth and optimization plan continued to deliver the intended results. With Q3 gross profit up 40% year over year and adjusted EBITDA up 75% to $16.1 million, we ended Q3 with approximately $9,300 active machines and expect to see continued growth in kiosks for the remainder of the year.
Speaker #3: As for our VPM relocation strategy, today 3,800 of our kiosks have been installed for less than one year. As these machines ramp up, we expect to drive further cash flow as our Bitcoin ATMs typically see payback periods of less than eight months, regardless of Bitcoin price.
Speaker #3: Now, turning to an update on our growth strategy. First, international expansion. We have now deployed over 260 kiosks to support our ongoing launch in Australia this year.
Speaker #3: Australia continues to emerge as a global hotspot for Bitcoin adoption, currently ranking third worldwide in total Bitcoin ATMs. While it's still early, we are encouraged by the retail partnerships and expansion opportunities we have identified so far.
Speaker #3: Beyond Australia, we just commenced operations in Hong Kong as announced earlier this week. And continue to work through the regulatory process in other jurisdictions.
Speaker #3: Next is scaling our domestic footprint. We continue to deploy kiosks from the large inventory we secured last year. Once fully deployed, these units could bring our total active fleet to approximately 10,500 kiosks.
Speaker #3: This will enhance our reach and support further efficiencies across the business. Given the strength of our business and our improved balance sheet, strategic M&A is also an opportunity to scale domestically and internationally.
Speaker #3: In fact, in early October, we acquired the assets of National Bitcoin ATM. A prominent BTM operator across 27 states, the acquisition adds over $500 kiosks to our network, further solidifying our leadership as North America's largest Bitcoin ATM operator and accelerates our mission to provide accessible, secure, and convenient access to Bitcoin across communities, nationwide.
Speaker #3: Turning to corporate and financial governance, we continue to make significant improvements. In early October, we announced the rollout of our new compliance standards that make Bitcoin Depot one of the only operators in the industry to require customer identification before transacting for any amount of money.
Speaker #3: This initiative applies to all new and existing customers ensuring they benefit from the highest level of protection, well beyond what is currently required by federal law.
Speaker #3: We also introduced additional protections for seniors, reinforcing our leadership and consumer protection and responsible access to digital assets. These steps reflect our belief that long-term growth in this industry depends on trust and accountability.
Speaker #3: While our enhanced compliance standards have had a modest effect on near-term transaction activity, the more meaningful headwind to our outlook stems from recent state regulations that imposed transaction size caps or fee caps across several states.
Speaker #3: We view both developments as constructive for the long-term health of the industry. As the largest and most compliant operator in North America, Bitcoin Depot is well-positioned to navigate this evolving regulatory environment.
Speaker #3: These changes are expected to weed out smaller, less compliant operators, further differentiate our business, and support continued growth and leadership in the market. Looking ahead with over $70 million in cash and digital assets, we remain well-positioned to pursue growth opportunities and strengthen our leadership in the crypto ATM market.
Speaker #3: We continue to focus on scaling efficiently, enhancing our compliance protocols, and using our strong balance sheet to pursue a creative acquisitions. Our team's execution, operational discipline, and financial strength position Bitcoin Depot to deliver sustained value for our customers, partners, and shareholders.
Speaker #3: With that, I will now turn it over to our CFO, David Gray, who will walk through our financial results in more detail.
Speaker #3: David.
Speaker #2: Thanks, Brandon. And
Speaker #2: good morning, everyone. I'm pleased to share the financial highlights for our third quarter as follows. Revenue was $162.5 million up 20% from the third quarter of 2024.
Speaker #2: This growth was driven primarily by increased kiosk deployment and higher median transaction sizes. Reflecting strong consumer demand as well as the results of our kiosk redeployment efforts.
Speaker #2: Gross profit in the third quarter of 2025 increased 40% to $28.2 million, compared to $20.2 million in the third quarter of 2024. Gross margin in the third quarter increased 250 basis points to 17.4%, compared to 14.9% in the third quarter of last year.
Speaker #2: This margin increase was largely driven by leveraging the cost structure of our BTM networks against higher revenue. Total operating expenses were $18.3 million compared to $16.9 million in the last year's third quarter.
Speaker #2: With the increase due to higher non-cash stock compensation expense and indirect taxes. Gap net income for the third quarter of 2025 increased $139% to $5.5 million compared to $2.3 million for the third quarter of 2024.
Speaker #2: Gap net income attributable to common shareholders increased to $5.5 million for $0.08 per share compared to a net loss of $0.9 million or -5 cents per share in last year's third quarter.
Speaker #2: The increase was due to higher revenue and income from operations in 2025. Adjusted EBITDA, a non-GAAP measure, increased 75% to $16.1 million in the third quarter of 2025 compared to $9.2 million in the third quarter of last year.
Speaker #2: This increase was primarily due to revenue outperformance and margin expansion. Now turning to our balance sheet and cash flow. Cash, cash equivalents, and cryptocurrencies as of September 30th, 2025 increased to $72.9 million compared to $31.0 million at the end of 2024.
Speaker #2: We generated $33.0 million of cash from operating activities in the first nine months of 2025 compared to $17.3 million during the same period last year.
Speaker #2: It increased to over 90%. Subsequent to the third quarter end, we raised gross proceeds of $15 million in a registered direct offering. This additional liquidity was raised proactively to afford us the opportunity to be strategic with further M&A opportunities.
Speaker #2: Debt, which includes the term loan, finance leases, and profit share arrangements, was $70.0 million at quarter-end, compared to $60.9 million at the end of 2024.
Speaker #2: Of the total debt balance, $25 million is our term loan, and $39 million is comprised of profit sharing liabilities. As a reminder, these profit share arrangements entail an upfront lump sum payment to the company by our partners in exchange for a portion of future profits generated from a specified group of kiosks for a specified period of time.
Speaker #2: Because we continue to operate in typically retained title on the machines, we must account for these arrangements as debt under US GAAP. We currently do not anticipate further expansion of the profit share program going forward.
Speaker #2: Now, turning to our outlook. We anticipate Q4 revenues to range between
Speaker #1: Brandon As highlighted , we expect fourth quarter results reflect the to impact typical of seasonality enacted state recently regulations and a lesser to extent , enhanced compliance our standards .
Speaker #1: While these factors are expected to weigh modestly on near-term results , believe they we reinforce the integrity and sustainability of business over the long our term .
Speaker #1: largest As the and most compliant BTM operator in North . America Bitcoin uniquely positioned to lead the market through this evolving regulatory landscape and capture share as smaller , less compliant operators exit the market .
Speaker #1: We remain focused on operational excellence strong , maintaining profitability and advancing our leadership position while continuing to invest in growth initiatives , compliance and technology that will deliver durable value shareholder .
Speaker #1: With that, we are to take questions. You are now happy, Operator.
Speaker #2: Thank you , ladies and gentlemen . We will now begin the question and answer session . At this time , I would like to remind everyone , in order to ask a question , please press star , followed by the number one on your telephone keypad .
Speaker #2: And if you would like to withdraw your question , simply press star one again . Your first question comes from the line of Harold Gertsch with P Riley Securities .
Speaker #2: Please go ahead .
Speaker #3: Good Hey . afternoon . Good morning guys . Can you give us a bridge maybe to the components of of the kind of the difference between the guidance today and maybe prior estimates on the street how terms of much of it is in state regulation .
Speaker #3: What are the states that are involved ? How much do you think this is seasonality and how much of it is enhanced compliance standards ?
Speaker #3: What are the how would you stack it up as a as a kind of a contributors to the guidance ? Because it looks to me like you're going to have a quarter .
Speaker #3: That's one of the lowest revenue quarters you've had in 3 or 4 years .
Speaker #4: Yeah . Hey , Hal . This Scott Buchanan . Thanks for the question . Yeah . If you are going to stack rank those the biggest impact is definitely the state regulation , because those , as you're aware , place limits on transaction sizes or fee limits .
Speaker #4: And so that's the biggest impact . The second biggest would be seasonality . As we always see Q4 being the lowest quarter . And that'll continue to be the case And then third would be here .
Speaker #4: the the proactive compliance changes that we've made internally that we announced a couple of weeks ago with the collecting ID for every customer and enhanced protections for our customers .
Speaker #4: don't have I percentage breakdowns of how much I think each of those impacts , because it's not black and white , but that's definitely the order they would how much be in of impact there is to the volume .
Speaker #3: Could you give us a feel for what were states kind of the biggest regulatory changes in the quarter , and , what others might be on on tap , if that's a major trend ?
Speaker #3: Yeah .
Speaker #4: It's yeah . So it's less like one specific state and more that there's been so many recently . So this year there's been over 15 states that have enacted some sort of restrictions , whether on transaction sizes or fee caps and like six of those went into effect in Q3 into early and go into effect early Q4 .
Speaker #4: And so a bunch of those came in in the past couple of months . And so that's where the the bigger decline coming into Q4 is .
Speaker #4: And kind of like we saw with California , you see the biggest drop initially when you first implement these changes and then as the rest of the catches space up and becomes compliant as well , then we see volume recover and come back a little bit .
Speaker #4: So, we expect the steepest drop to happen initially. Then, as it levels the playing field again and everyone's complying with the new requirements in each state, we think volumes will recover a little bit in those states from that point.
Speaker #3: Okay . And if I can follow up what you know , national Bitcoin ATM is that deal is closed , right ? Is that how much is that going to maybe contribute in the fourth quarter .
Speaker #4: Yeah that deal is closed . But we still have to convert all the kiosks . Right . So we buy them and then we have to convert all the kiosks to our platform to fully get all the revenue and profits .
Speaker #4: And so we're most of the way through that now . And it'll be fully completed by the end of Q4 .
Speaker #3: But could you give us an idea of what kind of productivity they were having before you acquired them ?
Speaker #4: have the I don't exact numbers in front of me , but if you could take if you take their kiosks as a percentage of our kiosks , they're roughly in line with us in terms of volume per .
Speaker #3: Okay . Thank you .
Speaker #2: Once again , if you would like to ask a question , please press star , by the one on your followed telephone number keypad .
Speaker #2: Thank you for your next question . Comes from the line of Pat McCann with Noble Capital Markets . Please go ahead .
Speaker #5: Hey guys , thanks for my taking questions . I wanted to piggyback on the on the question regarding the , you know , the transaction limits in the states and whatnot .
Speaker #5: I guess what I'm wondering is , you know , back when when that was an issue with California initially , you know , there was that problem of other operators not being compliant .
Speaker #5: So it was an uneven playing field . And Scott , you kind of alluded to that , that , you know , as , as others become compliant in these , these recent states to enact regulations , the playing field will level and that and that should help recovery of volumes .
Speaker #5: Is there is there anything to give you confidence that in these more recent , recently enacted that regulations that these states will be be strict in enforcing those regulations so that your the other competitive competitors will be eventually becoming compliant as you are ?
Speaker #6: Hey , Pat , it's Brandon . Great question . Yes , we've started to see the playing field level and some of the states that were early on in passing legislation once bills pass , it takes a state little a bit of time for the regulator to kind of evaluate the space and figure out if operators are complying and then how to figure out enforce the law .
Speaker #6: If operators are not complying, now that SB 401, which was the original bill that had transaction fee caps, has passed in California a couple of years ago and has been active for a while.
Speaker #6: We've started seeing some enforcement actions smaller against operators who are not complying , and that has helped level the playing field . There .
Speaker #6: And there are now a large there is now a large reduction of kiosks in California compared to the number of kiosks that were there .
Speaker #6: A couple of years ago . So the remaining kiosks that we have in California are actually doing pretty good volumes today to , you compared know , a year or so ago , for example , when a lot of the operators were not that complying were still able to continue to operate .
Speaker #6: And think so I that enforcement action that's been happening in California amongst the non-compliant operators is sending a message probably across the entire country to all operators who may previously weren't complying with these in the states that laws have passed them , that they need to .
Speaker #6: And will further put it pressure on them to either sell or or down their businesses shut .
Speaker #5: Thank you . Thank you for then my that . And other question was regarding 2026 . I was just wondering , as we look ahead to that , if you could give an overview of what you expect , the dynamics to be between your new kiosks , deployment versus redeployment or optimization of existing kiosks ?
Speaker #6: Well , we still do have large a number of kiosks in our inventory today . We still have over 1000 currently . So we do expect to have still a significant number of of newer deployments .
Speaker #6: But at the same time , we do expect to have a significant number of relocations . Obviously , of the some states that have passed legislation this it's year , still early just so and we don't know the full impact since some of it of the states were just passed a couple of months ago .
Speaker #6: But as Scott alluded to , we're typically seeing some recovery over time . And typically the worst impact is right after the legislation is passed .
Speaker #6: And then some competition may be reduced because of then we may recover a bit . So I think you'll continue to see still a number of machines that are less than a year old , you know , in the thousands , like you have been seeing .
Speaker #6: And it's hard to say exactly how much net new kiosks there will be , because we don't know how many exactly we will relocate from states that have had legislation passed .
Speaker #6: But we anticipate for states that have had legislation passed , they that we will relocate more machines from those states than states that have not had passed .
Speaker #6: legislation And I will say , if you guys look back a few quarters ago when we originally had that impact from the California Spo1 bill pass , we had a downturn in our numbers temporarily .
Speaker #6: If you look, and then at 2025, we've put out some very excellent beats against guidance and analyst expectations. So we're still confident moving forward that we can continue to optimize our fleet. Even though there may be temporary bumps in the road, there's still a lot.
Speaker #6: Of geography out there for us to deploy in that has not had a regulatory impact yet . And we're continuing to diversify with the international expansion as well .
Speaker #6: As you saw within the past day or so , we announced that we've entered Hong Kong . We're actively working on other international jurisdictions as well that do have not any of these fee caps or transaction limits in place .
Speaker #6: And we're not seeing any activity brewing in the near future . So you'll continue to see , in summary , the relocations , and we will do our best to to focus on net new deployments .
Speaker #6: But it's hard to specify an exact number .
Speaker #5: Thanks very much .
Speaker #2: Your next question comes from the line of Mike Collins with H.C. Please Wainwright . go ahead .
Speaker #7: Hi . Good morning guys . Thank you for taking my questions here today . First for me , is there any way you could size the market opportunity in Hong Kong as it relates to Bitcoin ATM deployments ?
Speaker #7: And are there any interesting or major players there that are acquisition candidates for Bitcoin Depot?
Speaker #6: And Mike , thanks for the question . The Hong Kong market for the size country it is is kind of interesting because you have a handful of players that are in the 100 plus kiosk range and though the even industry compared to the US is smaller , we we see it as an exciting market to to enter into .
Speaker #6: I wouldn't expect the Hong Kong market currently to to grow to , you know , many thousands of kiosks just based on the size of the country .
Speaker #6: But we do see it as a good opportunity to diversify and , and build a decent sized fleet of of kiosks that could be meaningful to our overall revenue number and our line .
Speaker #6: And the bottom operators there potentially could be acquisition targets . Of course , we're open to having discussions with operators wherever we want to expand to , and we always focus on a a two pronged effort of organic expansion and having conversations about acquisitions .
Speaker #6: And just it's all about ROI and cost benefit analysis to determine which way we move forward .
Speaker #7: Got it . Thanks for that , Brendan . And any updates you can provide on your bit with Nydfs . I know you guys seem to be getting closer and closer to that , especially with the more favorable regulatory backdrop in the United States .
Speaker #7: Just curious if you have any updates or there's been any advancement on that front .
Speaker #6: Right now it's it does not seem very likely that we'll that it will happen anytime soon for us . We're still not aware of any bitcoin ATM .
Speaker #6: Operator that has received a license . And I'm not sure of the state's appetite to allow any operator to to operate a Bitcoin ATM company in the state based on how it's going today .
Speaker #7: Thank you for taking my questions .
Speaker #2: At this time , this concludes our Q&A session . I would now like to turn the call back over to Brandon Mintz for closing remarks .
Speaker #6: Thanks , everyone . We'll talk to you guys next quarter .
Speaker #2: Thank you for joining us today for Bitcoin Depot's conference call . You may now disconnect your lines . Have a pleasant day everyone .