Q3 2025 POSaBIT Systems Corp Earnings Call

November 12, 2025

Good afternoon, everyone and welcome to the pause a bit systems Corporation third quarter 2025 earnings call.

Operator: Good afternoon, everyone, welcome to the POSaBIT Systems Corporation Q3 2025 Earnings Call. At this time, all participants are in a listen-only mode, after management's prepared remarks, they will be answering some pre-submitted analyst questions. If anyone should require operator assistance during this conference, please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Oscar Dahl, Chief of Staff at POSaBIT Systems. Oscar, the floor is yours.

At this time all participants are in a listen only mode and after management's prepared remarks, they will be answering some pre submitted analysts' questions.

If anyone should require operator assistance. During this conference. Please press star zero on your phone keypad. Please note. This conference is being recorded I went out turn the conference over to your host off good Dahl chief of staff at a pause a bit systems Oscar the floor is yours.

Thank you operator with me on this call are Ryan Hamlin, Chief Executive Officer, and Emily Egan Senior corporate controller.

Oscar Dahl: Thank you, operator. With me on this call are Ryan Hamlin, Chief Executive Officer, and Emily Egan, Senior Corporate Controller. I would like to begin the call by reading the safe harbor statement. This statement is made pursuant to the Safe Harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. All statements made on this call, with the exception of historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the company believes that expectations and assumptions reflected in these forward-looking statements are reasonable, it makes no assurances that such expectations prove to have been correct. Actual results may differ materially from those expressed or implied in the forward-looking statements due to various risks and uncertainties.

I would like to begin the call by reading the Safe Harbor statement. The statement is made pursuant to the safe Harbor for forward looking statements described in the private Securities Litigation Reform Act of 19th and five <unk>.

Statements made on this call with the exception of historical facts may be considered forward looking statements within the meaning of section 27, a of the Securities Act of 1933 and section 21 E of the Securities Exchange Act of 1934.

Although the company believes that expectations and assumptions reflected in these forward looking statements are reasonable it makes no assurances that such expectations prove to have been correct.

Actual results may differ materially from those expressed or implied in the forward looking statements due to various risks and uncertainties.

For a discussion of such risks and uncertainties, which could cause actual results to differ from those expressed or implied in the forward looking statements. Please see risk factors detailed in the Companys annual report and subsequent filed reports as well as in other reports that the company files from time to time with SEDAR.

Oscar Dahl: For a discussion of such risks and uncertainties, which could cause actual results to differ from those expressed or implied in the forward-looking statements, please see risk factors detailed in the company's annual report and subsequent filed reports, as well as in other reports that the company files from time to time with SEDAR+. Any forward-looking statements included in this call are made only at the date of this call. We do not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent knowledge, events, or circumstances. The company will also be citing adjusted EBITDA, adjusted revenue, and adjusted gross profit in today's discussion. Adjusted revenue, adjusted gross profit, and adjusted EBITDA are non-IFRS measures used by management that do not have any prescribed meaning by IFRS and may not be comparable to similar measures presented by other companies.

Any forward looking statements included in this call are made only at the date of this call. We do not undertake any obligation to update or supplement any forward looking statements to reflect subsequent knowledge events or circumstances.

The company will also be starting adjusted EBITA adjusted revenue and adjusted gross profit in today's discussion.

Adjusted revenue adjusted gross profit and adjusted EBITDA are non <unk> measures used by management that did not have any prescribed meaning by ifr S. It may not be comparable to similar measures presented by other companies.

The company defines adjusted revenue as gross revenue minus license support revenue plus actual licensing cash received as part of our licensing deals with.

Oscar Dahl: The company defines adjusted revenue as gross revenue minus license support revenue, plus actual licensing cash received as part of POSaBIT's licensing deals. The company defines adjusted gross profit as adjusted revenue less company cost of goods sold. The company defines adjusted EBITDA as net income or loss generated for the period as reported before interest, taxes, depreciation, and amortization, and further adjusted to remove changes in fair values and expected credit losses, foreign exchange gains and/or losses and impairments. The company believes these non-IFRS measures are useful metrics to evaluate its core operating performance and use these measures to provide shareholders and others with supplemental measures of its operating performance. The company also believes that securities analysts, investors, and other interested parties frequently use non-IFRS measures in the evaluation of companies, many of which present similar metrics when reporting their results.

The company defines adjusted gross profit as adjusted revenue less company cost of goods sold.

The company defines adjusted EBITDA as net income or loss generated for the period as reported before interest taxes, depreciation and amortization and further adjusted to remove changes in fair values unexpected credit losses, foreign exchange gains <unk> losses and impairments.

Company believes these non <unk> measures are useful metrics to evaluate its core operating performance and use these measures to provide shareholders and others with supplemental measures of operating performance.

The company also believes that securities analysts investors and other interested parties.

We use non <unk> measures in the evaluation of companies many of which presents similar metrics when reporting the results.

Oscar Dahl: We caution that adjusted revenue, adjusted gross profit, and adjusted EBITDA are not substitutes for gross revenue, gross profit, or profit loss, respectively. Now, I would like to turn the call over to Ryan Hamlin, Chief Executive Officer. Ryan, please proceed.

We caution that adjusted revenue adjusted gross profit and adjusted EBITDA are not substitutes for gross revenue gross profit or profit loss respectively.

Now I would like to turn the call over to Ryan Hamlin Chief Executive Officer Ryan. Please proceed.

Thank you Oscar and welcome everyone. As a reminder, all the numbers that we'll be talking about today in the call are in U S dollars.

Ryan Hamlin: Thank you, Oscar, and welcome everyone. As a reminder, all the numbers that we'll be talking about today in the call are in US dollars. Q3 was another great quarter for POSaBIT. We continued our focus on growing reoccurring SaaS revenue, which provides more predictability quarter-over-quarter and de-risks our overall business. We also grew our cash on hand by nearly a half a million dollars this quarter, all while still paying down our accounts payable by 41%, which represented about $400,000 in aged payables. The team is executing on all cylinders and our customers are very happy. We look forward to continued growth this year and years to come. Let's jump into a few of the key highlights in case you missed the press release that just came out.

Q3 was another great quarter for positive we continued our focus on growing reoccurring SaaS revenue, which provides more predictability quarter over quarter and de risks. Our overall business. We also grew our cash on hand by nearly a half a million dollars. This quarter, all while still paying down our accounts payable by 41.

Percent, which represented about $400000 in age tables.

The team is executing on all cylinders and our customers are very happy.

We look forward to continued growth this year and years to come now lets jump into a few of the key highlights in case you missed the press release that just came out.

Ryan Hamlin: We had our first nearly $1 million adjusted EBITDA quarter in the history of the company, coming in around $970,000. A growth of over $150,000 in adjusted gross profit, which resulted in an 87% adjusted gross profit margin versus 77% last quarter in Q2. Again, another record for POSaBIT. Our recurring SaaS revenues increased 22% in Q3 versus Q2. This demonstrates the focus and success we have had on growing our point of sale and our e-com menu business. Lastly, as I mentioned, cash on hand grew quarter-over-quarter by nearly half a million dollars, ending at over $1.2 million. We still, as I mentioned, paid down our payables by $400,000.

We had our first nearly $1 million adjusted EBITDA quarter in the history of the company coming in around seven of $970000.

A growth of over a $150000 in adjusted gross profit, which resulted in an 87% adjusted gross profit margin versus 77% last quarter in Q2 again another record for positive.

Our reoccurring SaaS revenues increased 22% in Q3 versus Q2.

<unk> demonstrates the focus and success, we've had on growing our point of sale and our E com menu business.

And lastly, as I mentioned cash on hand grew quarter over quarter by nearly a half a million dollars ending at over $1 $2 million and we still as I mentioned pay down our payables by 400000.

I said this on the past calls and I'll say it again, if you hear anything on this call. The theme is this part of it is profitable we are growing and we're continuing to put more and more cash in the bank.

Ryan Hamlin: I said this on the past calls and I'll say it again, if you hear anything on this call, the theme is this, POSaBIT is profitable, we are growing, and we're continuing to put more and more cash in the bank. Now, I wanna update you on a couple other key points that happened this quarter. Our focus certainly remains on growth around our main recurring revenue product lines, our point of sale, and our e-com business. Both of these businesses have been very healthy and continue to grow, not only in our home state of Washington, but continued steady growth in Oregon, New Mexico, and now new markets on the East Coast. We are running the same playbook that got us to 90% of all retail transactions in Washington State going through the POSaBIT POS.

Now I want to update you on a couple of other key points that happened this quarter.

I'll focus certainly remains on growth around our main reoccurring revenue product lines, our point of sale and our E. Com business. Both of these businesses have been very healthy and continuing to grow not only in our home state of Washington, but continued steady growth in Oregon, New Mexico, and now new markets on the East coast.

We are running the same playbook that got us to 90% of all retail transactions in Washington State going through the positive Pos.

We continue to see the trend where more and more retailers are looking to one company to provide the majority of their software needs.

Ryan Hamlin: We continue to see the trend where more and more retailers are looking to one company to provide the majority of their software needs. The point of sale is the engine and the hub for all retailers. We're pleased to see our POS base add the new POSaBIT eComm menu, the POSaBIT loyalty program, online order management, and much more. While many retailers take advantage of all of POSaBIT's all-in-one solution, we also provide up to 60 different companies that have integrated with POSaBIT. This choice is one of the key reasons so many of our retailers like POSaBIT. I'm gonna turn it over to Emily Egan, our Senior Corporate Controller, to dive a little bit deeper into our Q3 numbers. Emily?

<unk> is the engine and the hub for all retailers.

We're pleased to see our P O S base.

The new positive E comm menu deposit loyalty program online order management and much more well many retailers take advantage of all of pause, but it's all in one solution. We also provide up to 60 different companies that are integrated with positive. This choice is one of the key reasons. So.

Many of our retailers like pasta.

Now I'm going to turn it over to Emily Egon, our senior corporate controller to dive a little bit deeper into our Q3 numbers Kimberly.

Thank you Ryan I'm going to share a view of the three months ended September 30th 2025 as compared to the same time period last year 2024.

Emily Egan: Thank you, Ryan. I'm gonna share a review of the three months ended 30 September 2025, as compared to the same time period last year, 2024. Q3 total revenue was $2.3 million, down from $3.8 million Q3 of last year. The decline was entirely expected and relates to the relationship change of legacy payment processing revenues, as discussed in more detail over the last quarters. Meanwhile, our POS and eComm menus, as Ryan explained, continue to grow steadily. Our customers are happy. This shift is exactly what we've been targeting, a business that is smaller on the top line but significantly more profitable. Gross profit came in at $1.9 million, representing an 81% growth margin, up dramatically from 43% same period last year.

Q3, total revenue was $2 3 million down from $3 8 million third quarter last year. The decline was entirely expected and relates to the relationship change of legacy payment processing revenues as discussed in more detail over the last quarters.

Meanwhile, our point of sale and economy menus as Brian explained continue to grow steadily.

Our customers are happy they shipped is exactly what we've been targeting a business that is smaller on the topline but significantly more profitable.

Gross profit came in at $1 9 million, representing an 81% gross margin up dramatically from 43% same period last year.

Emily Egan: This margin expansion reflects the positive impact of our processor transition and continued growth in our recurring software revenue. On the expense side, we maintained our focus on cost discipline. Operating expenses were $2.3 million, down 33% from Q3 of last year. This was primarily driven by lower professional fees, lower overall employee costs, and continued reduction in share-based comp. All of this translates to record profitability for the quarter. Adjusted EBITDA, again, was $970,000, our highest ever and a major milestone for POSaBIT. While we reported a small net loss of $596,000, that represents a 70% improvement over last year and reflects strong underlying operating leverage. From a balance sheet perspective, cash on hand, as Ryan said, increased to $1.2 million.

This margin expansion reflects the positive impact of our processor transition and continued growth in our recurring software revenue.

On the expense side, we maintained our focus on cost discipline operating expenses were $2 3 million down 33% from Q3 of last year.

This is primarily driven by lower professional fees lower overall employee cost and continued reduction in share based comp.

All of this translates to record profitability for the quarter. Adjusted EBITDA again was 970000, our highest ever and a major milestone for parts of it while we reported a small net loss of 596000 that represents a 70% improvement over last year and reflects.

Strong underlying operating leverage.

From a balance sheet perspective cash on hand, as Ryan said increased to $1 2 million. That's up from just about 1 million at the end of the year and 800000 from last quarter, plus we reduced our aged payable by over 800000 year to date.

Emily Egan: That's up from just about $1 million at the end of the year and $800,000 from last quarter. Plus, we reduced our aged payables by over $800,000 year to date, further strengthening our financial position. Our debt balance remains stable at about $4.5 million. As Ryan pointed out, Q3 was a continuation of the momentum we've built this year, improving profitability, expanding margins, and adding cash to the balance sheet each quarter. Way to go, Team POSaBIT. With that, I'll hand it back to Ryan to wrap up the call.

Further strengthening our financial position.

And our debt balance remained stable at about $4 5 million.

Ryan pointed out Q3 was a continuation of the momentum we felt this year improving profitability expanding margins and adding cash to the balance sheet each quarter, maybe they go team positive with that I'll hand, it back to Ryan to wrap up the call.

Thanks, Emily I just wanted to share a couple more final thoughts before we wrap the call up and answer some of the investor questions that were sent in to us.

Ryan Hamlin: Thanks, Emily. I just wanna share a couple more final thoughts before we wrap the call up and answer some of the investor questions that were sent in to us. Yeah, I think you're seeing a trend here. POSaBIT's financially healthy and we are growing. Our products are winning in the market and our customers are loving what we're doing for them. We're now in a position where we can actually start to make a few more investments to drive new revenue opportunities. As we head into 2026, you'll hear more from us on some very exciting new product offerings that will expand our target market and grow our revenue. While we'll invest, we'll do so very carefully and fiscally responsible.

Yes, I think youre seeing a trend here positive financially healthy and we are growing our products are winning in the market and our customers are loving what we're doing for them.

Now in a position, where we can actually start to make a few more investments to drive new revenue opportunities as we head into 2026, you'll hear more from us on some very exciting new product offerings that will expand our target market and grow our revenue.

While we will invest we will do so very carefully and fiscally responsible.

Ryan Hamlin: I'm really looking forward to coming back in early 2026 and announcing some of these very exciting new opportunities our team has been working on for the last many months. There are more good things coming for POSaBIT in 2026 and beyond. One more thing on our future. I know I've said a version of this time and time again, but it bears repeating. POSaBIT is set up for tremendous future success. The cannabis industry is still relatively in its infancy. We look at our competition and can honestly say that we are incredibly well-positioned for the years to come, especially compared to the rest of the cannabis industry. Cannabis will someday become federally legal. Banking regulations for cannabis providers will soften. All of that is inevitable. Once it does, we plan on making our shareholders very, very happy.

Im really looking forward to coming back in early 2026 and announcing some of these very exciting new opportunities. Our team has been working on for the last many months.

There are more good things coming for positive in 2026 and beyond.

One more thing on our future I know I said a version of this time and time again, but it bears repeating positive set up for tremendous future success. The cannabis industry is still relatively in its infancy.

We look at our competition and can honestly say that we are incredibly well positioned for the years to come especially compared to the rest of the cannabis industry.

Canvas will someday become federally illegal banking regulations for canvas providers will soften.

All of that is inevitable and once it does we plan on making our shareholders very very happy.

With that in mind as always thank you for being a loyal shareholder of positive.

Ryan Hamlin: With that in mind, as always, thank you for being a loyal shareholder of POSaBIT. The stock price clearly does not reflect the true value POSaBIT has. Unfortunately, the small markets like the CSE make it difficult with day traders and very much low volume. The board is committed to finding a solution. In the meantime, we will stay focused, we will continue to execute, and we'll keep generating a profit. We trust that someday investors will once again realize the full potential of what POSaBIT really is. Thank you for your time today. I'm gonna turn it back over to Oscar, who is going to ask some of the investor questions that came in.

The stock price clearly does not reflect the true value positive has unfortunately.

Paul markets like the CSC, you make it difficult with day traders and very much low volume. The board is committed to finding a solution in the meantime, we will stay focused we will continue to execute and we'll keep generating a profit and we trust that someday investors will once again realize the full potential of a pause, but it really is.

So thank you for your time today I'm going to turn it back over to Oscar who was going to ask some of the investor questions that came out.

Alright.

Oscar Dahl: All right. First question, Ryan. I have faith that the company can survive somewhat intact over the coming couple of years, that things will work out quite well. Can you address any liquidity issues over the next year or so? If I recall correctly, the licensing deal, which has been bringing in decent cash, is expiring soon, if it hasn't already.

First question Ryan.

I have faith that the company can survive somewhat impact over the coming couple of years that things will work out quite well.

Can you address any liquidity issues over the next year or so if I recall correctly, the licensing deal, which has been bringing in decent cash and expiring soon if it hasn't already.

Yes, thanks for setting that question and.

Ryan Hamlin: Yeah, thanks for sending that question in. I'll just address the licensing deal upfront 'cause you're right. You know, we have a licensing deal that we licensed our POS and it's been a great deal for us. We still have about another 1 full year of what I'll call the larger payments coming in. I wanna make sure everyone understands and investors understand that even when those larger payments and the licensing deals slow down and stop, there is an ongoing residual to perpetuity on the number of active terminals. Cash will continue to be generated from that deal even after some of the larger payments go away. Number 1, the licensing deal has more time and residuals will continue. The other point that I always like to talk about liquidity is just look at our cash.

And I'll just address the licensing deal upfront because you're right. We have a licensing deal that we license our P. O S and it's been it's been a great deal for us.

We still have about another full year of what I'll call the larger payments coming in.

I want to make sure we can understand and investors to understand that even though in those larger payments in all I think licensing deal slow down and stop.

There is an ongoing residual to perpetuity on the number of active terminals. So cash will continue to be generated from that deal even after.

Some of the larger payments go away. So number one the licensing deal has more time in residuals will continue the other point that I always like to talk about about liquidity is just look at our cash I mean, we just put $400000.

Ryan Hamlin: I mean, we just put $400,000 of cash growth into the bank quarter-over-quarter. If you look at the $400,000 we paid, you know, technically our cash grew $800,000, right? We're growing our cash, which is great. Then last, debt's going down. We're paying off our debt. You know, the three variables that I think are most important for liquidity are, is the cash gonna continue to come in? Yes. Is POSaBIT growing in new opportunities? Yes. Are we putting cash away? Yes. Is the debt going down? Yes. From a liquidity standpoint, I feel great about where the company is.

Cash and growth into the bank quarter over quarter, and if and if you look at the 400000, we paid technical you got a cash grew 800000 right. So we're we're growing our cash which is great and then last desk going down we're paying off our debt. So the three variables that I think are most important for liquidity or is it is the cash going to continue to come in yes.

As part of the growing and new opportunities, yes are we putting cash away yes.

Yes, so from a liquidity standpoint, I feel great about where the company is.

Oscar Dahl: Cool. All right. Second question. How do you see a meaningful and continued return to gross profit dollar growth?

Alright second question how.

Do you see a meaningful and continue to return to gross profit dollar growth.

Yes, so obviously a very sensitive question in before.

Ryan Hamlin: Obviously they sent this question in before, the investors saw that we actually did grow gross profit dollar growth quarter-over-quarter. In fact, we grew over $150,000. We are putting meaningful growth in our gross profit dollars. Again, like I just referenced, cash is increasing and debt is going down. The other really important point, and we highlighted it in the press release, is that our existing SaaS-based products, our POS and our e-com business, grew 22% quarter-over-quarter. We're becoming much more predictable because we have a continuous stream of MRR and ARR coming in, versus some of the volatility, you know, years ago we had where it was primarily payments revenue base.

The investor saw that we actually did growth.

Profit dollar growth quarter over quarter. In fact, we grew over 150000, so we are putting meaningful growth in our gross profit dollars.

Again like I, just referenced cash is increasing and that is going down.

The other really important point and we highlighted in the press release is that our existing SaaS base products. Our Pos in our E. Comm business grew 22% quarter over quarter. So we're becoming much more predictable because we have a continuous stream of MLR.

They are coming in.

Versus some of the volatility you know years ago, we had where it was primarily payments revenue base. So we've made that transition successfully now.

Ryan Hamlin: We've made that transition successfully, and now, you know, I can actually say the majority of our revenue is now coming from our MRR business, our SaaS business.

I can actually say the majority of our revenue is now coming from our.

Our MLR was our SaaS business.

Alright, and the final question.

Oscar Dahl: All right. The final question. Why did you stop posting new stories about POSaBIT around 2023? I've shared my enthusiasm with friends recently, and when they look up POSaBIT, it looks like the company has done nothing for two years.

Why did you stop posting new stories about pause a bit around 2023, I've shared my enthusiasm with Brent recently and when they look up positive and it looks like the company has done nothing for two years.

Okay.

Yeah.

Ryan Hamlin: Well, we have been doing a lot over the last couple years, but what we haven't done as much is post a bunch of PR and IR. You know, if we look back over the years, we literally spent tens of thousands of dollars, if not 6 digits, on IR and PR work, and it just doesn't pay off right now. It's frustrating 'cause we would love to see the direct results if there was a lot. You know, we pour a lot of money into PR and IR, and we see it reflected in the stock price, but that just didn't happen. While we got healthy and made sure, you know, to the prior question about liquidity, we looked at every expense, and this is one of the expenses we just felt like the ROI wasn't there.

We have been doing a lot over the last couple of years, but what we haven't done as much is post a bunch of PR and IR and <unk>.

If we look back over the years.

Literally spent tens of thousands of dollars if not six digits on IR and PR work and it just doesn't pay off right now.

It's frustrating because we would love to see the direct results as if there was a lot.

We put a lot of money in the PR and IR and we see it reflected in the stock price, but that just didn't happen.

While we.

Got healthy in nature to the prior question about liquidity, we looked at every expense and this is one of the expenses. We just felt like the ROI wasn't there. So we cut it back now does that mean, we're not going to do it over again, though we will.

Ryan Hamlin: We cut it back. Now, does that mean we're not gonna do it ever again? No, we will. And we'll still, you know, we'll start to do a little bit more, particularly on the IR side where, you know, speaking at conferences and a few more things and over the next probably six to 12 months. Again, the top line message here is we gotta be smart with our cash, and we just didn't see the return, throwing a bunch of money at PR and IR right now. I think that's it for questions, so I can turn it back over to the operator.

And we will you will start to get a little bit more skewed on the IR side, where.

Speaking at conferences and a few more things.

And.

Over the next probably six to 12 months, but again the top line message here is we got to be smart with our cash and we just didn't see the return.

Throwing a bunch of money <unk> right now.

So I think that's it for questions.

So I can turn it back over to the operator.

Thank you very much. This does conclude today's conference you may disconnect. Your phone lines at this time and have a wonderful day, we thank you for your participation.

Operator: Thank you very much. This does conclude today's conference. You may disconnect your phone lines at this time, and have a wonderful day. We thank you for your participation.

Q3 2025 POSaBIT Systems Corp Earnings Call

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