RYVYL Inc. Q2 FY2023 earnings call

• Planned spin-off of coyni: Initiated in Q2, acquired a public shell company, name change process underway, selected auditor, expect to complete by end of year with $40M range and NASDAQ uplist with special dividend for shareholders. - Banking-as-a-Service platform: Gained momentum with new partners, signed 6 global financial institutions, projected to process over $100M/month, partnered with Intercash for co-branded cards, RYVYL EU got SEPA approval and partnered with Visa for Visa Direct. - Capital structure: Announced exchange agreement with convertible note holder, resulting in debt reduction. - New leadership: Gene Jones joined as Interim CFO with strong financial and operational expertise.

Revenue for the fiscal second quarter 2023 was $14.8 million, a 113% year-over-year increase and a 31% sequential increase from the first quarter. North America Q2 revenue was $11 million, an 86% increase from Q2 2022. EU Q2 revenue was $3.8 million, a 270% increase from Q2 2022. Cost of revenue was $8.7 million, a 106% increase year-over-year. Gross margins were 41% for the quarter. Processing volume during the quarter was $678 million, 20% higher than Q1 2023 and above the target range.

• Q3 processing volume target: $720 million to $800 million. - Q3 revenue outlook: Raised to $16 million to $18 million, total year revenue expected to exceed $60 million. - Adjusted EBITDA 2023 target: Revised down from $4 million to a range of positive $2 million to $3 million, Q3 projection $1 million to $2 million.

• Regulatory uncertainties related to digital payments and spin-off processes. - Market competition from large players like PayPal and others. - Potential differences between forward-looking statements and actual results due to various risks and uncertainties.

Q: Update on NASDAQ minimum compliance?

A: The company has regained compliance and will stay on a 6-month watch list, preparing an 8-K to announce.

Q: Progress with Visa and SEPA integrations?

A: SEPA process is on and expected to commence in Q3, Visa Direct Program targets to go live with initial countries in Q3 with access to over 80 countries for local payouts.

Q: Thoughts on competitive landscape with PayPal's stablecoin and FedNow?

A: PayPal's entry is good for regulation, FedNow is local, but RYVYL has unique offering for medium to high risk.

Q: Timeline for coyni spin-off and dividend?

A: Acquired launch vehicles, filed articles of merger, name and ticker change pending, registration statement expected in 30-60 days, dividend expected by end of year.

Q: Strategy to scale up, focus on economies?

A: Focus on select verticals and geographics, in US focus on verticals with double-digit growth, in Europe focus on medium to high risk, high return verticals.

Q: mPOS capabilities and marketing?

A: mPOS is extension of coyni, helps with deployment, reduces costs, increases volume and profitability.

Q: Global payment platform and coyni's currency handling?

A: Covers Visa Direct, SEPA, SWIFT, coyni plans to handle multi-currency with integrated banking solutions.

Q: Target regions for coyni's Mobile Point of Sale app?

A: Initially targeting US, with feedback from some merchants already.