Ryvyl Inc. Q3 FY2023 earnings call

Ben Errez noted RYVYL delivered record financial results for the fourth consecutive quarter. Key initiatives included RYVYL EU seeing 100% year-over-year revenue growth, representing 28.5% of total revenue, with CEPA enabled and being Visa Direct partner, expecting to target over 2,000 payment service providers in the Eurozone. The company is working on Banking-as-a-Service platform with large institutional partner aiming for $100 million per month in transaction volume. Planned spin-off of coyni is in process, with coyni mobile point of sale app launched in U.S. and EU entity set up. Debt reduction through exchange agreements, including $21 million debt reduction. Implemented 1 for 10 reverse stock split. George Oliva joined as CFO. Min Wei discussed processing volumes, with Q3 volume exceeding expectations, and coyni's EU entity setup and U.S. processing progress.

RYVYL Inc. reported Q3 2023 top line revenues increased nearly 64% year-over-year to $17.5 million, reflecting an 18% sequential increase from $14.9 million in Q2 2023. Revenue was in the upper end of the Q3 target range of $16 million to $18 million. North America Q3 revenue increased 47% from $8.5 million in Q3 2022 to $12.5 million. EU Q3 revenue was $5 million, an increase of more than 100% from $2.2 million in the same period last year, currently representing 28.5% of total revenue. Q3 processing volume across all channels exceeded $860 million, up from $678 million in Q2 2023 and $340 million in Q3 2022 (excluding Sky Financial portfolio).

For Q4, processing volume is expected to range from $900 million to $1 billion, with revenue outlook of $19 million to $21 million, bringing total year revenue to $62 million to $64 million. Adjusted EBITDA for Q4 estimated to be positive $0.5 million to $1 million, and total year 2023 adjusted EBITDA expected to be negative $2 million to $3 million.

Forward-looking statements are subject to risks and uncertainties, including potential delay in completion and filing of periodic reports with the SEC, and other factors discussed in the company's SEC filings.

Q: Does the company continue to expect to see higher growth in Europe? And if so, how should we think about the margins for RYVYL EU versus North America?

A: Min Wei said they expect continuing growth in Europe. Regarding margins, EU revenues from acquiring business are comparable to North America in terms of ratio to volume, but Banking-as-a-Service offering has lower revenue-to-volume ratio currently due to early phase in EU and testing pricing.

Q: What is the progress of the coyni spin-off?

A: Ben Errez said they are fully committed to the process and intend to complete it as quickly as FINRA will allow.

Q: What would the recent NASDAQ standard deficiencies issue create as a potential blocker for the coyni spin-off?

A: Min Wei said NASDAQ standard deficiencies are unrelated to coyni spin-off, which is under FINRA rules.

Q: What is the status of RYVYL completing its transition to the network firm?

A: Min Wei said technically they completed system efforts to migrate to Explora, but service implementation will be introduced in due time with coyni rollout.

Q: Can you comment on where the arrival is generating revenue year-to-date from coyni?

A: Min Wei said there are immaterial revenues from coyni ecosystem since it went live, with U.S. paused due to regulatory factors but now moving ahead, and EU entity set up with license expected soon to generate revenue.

Q: Why is it that the integration into Visa's back-end takes the better part of the year?

A: Fredi Nisan said integration time is on Visa's side due to each country's compliance process.

Q: How do you think adoption has stalled out at 60% in American Samoa?

A: Min Wei said conventional processing is plateauing, they introduced mPOS solution and are working with partner on island to transform payments experience, with plan to move ahead in 2024.