Ryvyl Inc. Q4 FY2023 earnings call

• 2023 was a record year for RYVYL with 100% revenue growth to $66 million, driven by processing volume of $3.1 billion, a 82% increase from 2022.
• Collaboration with R3 to offer blockchain-as-a-service solution RYVYL Block for streamlined digital transformation.
• RYVYL EU is CEPA enabled, targeting 2,000 payment service providers in Eurozone, progressing with Visa Direct integration testing.
• Banking-as-a-service platform has ramped up to over $200 million per month in transaction volume, offering API integrations and foreign exchange in over 40 currencies.
• Retained coyni as wholly owned subsidiary to optimize technology platform for payment processing and banking-as-a-service.
• Restructured debt, reducing convertible note principal balance by $66.3 million to $19.2 million, and sold Chicago office building for $2.6 million.

For the full year 2023, RYVYL delivered revenue of approximately $66 million, a remarkable 100% increase over 2022. Fourth quarter 2023 revenue increased 100% year over year to $22.3 million. North America business revenue grew 71% to $48 million in 2023. RYVYL EU (formerly Transact Europe) experienced exponential revenue growth in 2023, increasing 294% to nearly $17 million. Fourth quarter 2023 North America revenue was $16.6 million (85% y-o-y increase), and International (including EU) revenue was $5.6 million (165% y-o-y increase). Cost of revenue for Q4 2023 was $14.5 million vs. $5.4 million in Q4 2022, driven by growth in transaction volume. Operating expenses decreased to $10.6 million in Q4 2023 from $24.4 million in Q4 2022.

• First quarter 2024 processing volume expected $900M-$950M, revenue $15M-$16M (decrease sequentially but up year-over-year).
• Total 2024 revenue indication $90M-$100M.
• Adjusted EBITDA for 2024 expected $1M-$5M, with first half negative due to product transition.
• Aiming for $120M revenue to be profitable, with EPS positive anticipated by 2025.

• Potential impact of product transition from terminal-based to app-based processing on first quarter 2024 volume and revenue.
• Dependency on successful execution of partnerships (e.g., R3, ACI) and integrations (e.g., Visa Direct).
• Regulatory and compliance risks associated with operating in multiple regions and financial services.

Q: Talk about partnerships with ACI and R3 and how you see these developments over time and the economics.

A: Min Wei stated that partnering with ACI Worldwide will enable RYVYL EU to onboard e-commerce merchants onto ACI's payment orchestration platform, increasing capacity for EU merchant acquiring business. The partnership with R3 aims to provide RYVYL Block, a scalable blockchain-as-a-service solution, piloting monetization in 2024 with long-term potential as a significant business pillar.

Q: Can you detail how you can leverage coyni into existing and new verticals and create operating efficiencies and profitability?

A: Min Wei and Fredi Nisan mentioned that coyni's infrastructure is fully automated, reducing the need for employees, and can be leveraged in existing and new verticals. In the U.S., mobile-based processing started in Q1 with plans to ramp up volume in target verticals. In the EU, coyni has received licenses and merchant processing approval, with initial business to be onboarded soon.

Q: What other regions might RYVYL look to expand into in the near future?

A: Fredi Nisan stated RYVYL is looking into Asia and South America, with ongoing work in these regions though details are not yet fully available.

Q: When will RYVYL look to be per share positive?

A: George Oliva and Min Wei mentioned that achieving per share positivity is contingent on reducing noncash expenses, fully retiring convertible debt, and reaching $120M revenue, with an indicative timeline of 2025.