Amber International Holding - Earnings Call - Q4 2024

Transcript

Operator (participant)

Good morning and welcome to Amber International Holding Limited's fiscal year 2024 earnings conference call. At this time, all participants are in listen-only mode. The question-and-answer session will follow the formal presentation. If you'd like to ask a question at that time, you may press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. If you'd like to withdraw your question at any time from the queue, you may press star two. As a reminder, those participants who are using speaker equipment, please pick up your handset before pressing the star keys. As a reminder, this conference call is being recorded. It is now my pleasure to introduce your host, Mr. Terence Li, Chief Strategy Officer of Amber International Holding Limited. Mr. Li, you may begin.

Terence Li (Chief Strategy Officer)

Thank you. Good morning, everyone, and welcome to Amber International Holding Limited's fiscal year 2024 earnings conference call. My name is Terence Li, Chief Strategy Officer of Amber International Holding Limited. Before we begin, I would like to remind everyone that today's discussion may contain forward-looking statements within the meaning of federal securities laws. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. For a more detailed description of these and other risks and uncertainties, please refer to our filings with the Securities and Exchange Commission, including our recent Form 20-F. On today's call, we have Wayne Huo, our Chief Executive Officer, and Josephine Ngai, our Chief Financial Officer.

They will be discussing our financial results for the fiscal year end December 31st, 2024, and providing an update on our business strategy following our recent merger and Nasdaq listing under the ticker symbol AMBR. Today's agenda will begin with Wayne providing an overview of our business and strategic initiatives, followed by Josephine's review of our financial results. We will then open the call for your questions. With that, I will now turn the call over to our CEO, Wayne Huo. Wayne, please go ahead.

Wayne Huo (CEO and Director)

Thank you, Terence. Good morning, everyone, and thank you for joining us today for Amber International Holding Limited's fiscal year 2024 earnings conference call. I'm Wayne, CEO and Director of Amber International, an institutional crypto financial services and solutions provider operating under the brand name Amber Premium and headquartered in Singapore. Before we begin, I'd like to express my gratitude to our shareholders, clients, and employees for their continued support throughout this transformative year. Our team has worked tirelessly to position Amber Premium as a leader in institutional crypto finance, and I'm excited to share our progress with you today. Let me begin by providing an overview of Amber International's journey, business model, and the market environment we are operating in.

On March 12th, 2025, we successfully completed the merger between Amber DWM Holding Limited and iClick Interactive Asia Group Limited, marking a significant milestone in our journey as we became publicly listed on the Nasdaq under the name Amber International Holding Limited with the ticker symbol AMBR. This listing represents not just a financial achievement but a validation of our vision to become the top choice of a one-stop institutional digital asset services and solution provider that drives crypto adoption in the world. For those who may be new to our story, Amber International Holding Limited operates under the brand name Amber Premium, providing institutional crypto financial services and solutions. We deliver institutional-grade market access, execution infrastructure, and investment solutions to help institutions and high-net-worth individuals optimize their digital asset portfolios.

Established in 2021 as originally Amber Group's crypto private banking business, Amber Premium formally commenced operation as an independent business unit in the second half of 2023. Since then, we've built a regulated, scalable financial ecosystem powered by proprietary blockchain and financial technologies, AI-driven risk management, and quantitative algorithms across centralized finance, decentralized finance, and OTC markets. During our operation, the digital asset market has experienced significant growth, with total market capitalization surging from approximately $800 billion USD as of the end of 2022 to close to $4 trillion USD at the end of 2024. This growth is fueled by increasing institutional adoption of digital assets, the rapid development of decentralized finance ecosystems, and the breakthrough of advanced blockchain technologies. As financial institutions, hedge funds, family offices, and high-net-worth individuals increasingly integrate digital assets into their portfolios, the demand for sophisticated wealth management solutions has intensified.

As institutions and high-net-worth individuals expand beyond basic crypto ETFs and Bitcoin exposure, Amber Premium is positioned to address three critical industry challenges. First, fragmented liquidity across centralized and decentralized markets, which brings challenges to execution efficiency. Our deep industry connectivity and fast mover advantage unlock access to new token markets, liquidity pools, and DeFi venues, enabling institutions to deploy capital seamlessly across all types of crypto markets and venues. Second, crypto yield sources are rich but spread across decentralized protocols and centralized spot markets and derivative markets. Amber Premium's structured yield solutions apply the latest technologies and enable clients to access the aggregated opportunities across these venues. Finally, regulatory complexity, which often slows down institutional adoption. Amber Premium operates as a regulated platform with automated compliance tools, institutional-grade KYC, AML procedures, and transparent governance frameworks.

This allows clients to navigate the market confidently and compliantly while securely scaling their digital asset portfolios. By solving these challenges, Amber Premium is the trusted gateway for institutions and high-net-worth individuals to start from basic crypto exposure to sophisticated compliant digital asset strategies. Next, I'll walk you through our key business segments. Our business model is uniquely positioned to bridge traditional finance and decentralized finance with institutional-grade solutions. We've built our operations across three key business segments. First, our full-stack execution solution provides institutional market assets to thousands of trading pairs across over 100 trading venues, covering centralized exchanges, decentralized liquidity pools, and OTC markets. Our high-performance trading infrastructure handles over $1 billion of client transaction volumes monthly, supporting sophisticated trading algos for optimized execution.

Second, Amber Premium provides comprehensive wealth management solutions, including structured investment products such as Dual-Currency Options strategies and Accumulator-Decumulator products designed for strategic asset accumulation and risk-adjusted exposure management. We also provide yield and DeFi solutions featuring earn programs, staking rewards, and DeFi yield enhanced products to optimize capital efficiency with controlled risk exposure. Additionally, our strategic funds deliver regulated audited assets to high-growth opportunities in cryptocurrencies. Finally, collateralized lending offers crypto-backed financing solutions with competitive rates, flexible terms, and automated safeguards to minimize liquidation risks. Third, our seamless crypto payment solutions facilitate secure, regulated crypto-to-Fiat and Fiat-to-Crypto conversion, alongside the Amber Premium Crypto Card that allows clients to make payments instantly and globally with their crypto asset balance with Amber Premium. Central to our value proposition is our distinctive 1+N Premium service model, delivering tailored integrated wealth management solutions.

Each client is supported by a dedicated relationship manager alongside a team of specialists, ensuring a seamless and highly personalized experience. Our client base includes institutional investors such as financial institutions, hedge funds, private banks, proprietary trading firms, and corporate treasuries, as well as high-net-worth individuals and family offices looking for crypto structured investment products and personalized portfolio management. Following that, I would like to highlight the strategic initiatives we've undertaken and how they will be enhancing the resilience of our business. We've had several achievements to strengthen our position in the institutional crypto finance space. On the technology front, Amber Premium has developed proprietary platforms, including secure, user-friendly mobile apps and web interfaces for real-time trading, investing, and portfolio management.

We are also capable of integrating to the latest advanced smart contract and blockchains that enhances our offerings with DeFi capabilities such as yield-enhanced products, staking rewards, and airdrops from leading crypto projects. We provide institutional-grade security through military-grade encryption, multi-factor authentication, and hybrid hot/cold wallet storage. This expertise takes years to develop. Meanwhile, on the business front, Amber Premium is expanding its presence in the real-world asset tokenization ecosystem. The company is developing blockchain-native yield-enhanced investment products, providing institutional clients with diversified, transparent, and secure assets to emerging crypto opportunities. In addition to enhanced market positioning, Amber Premium is implementing a refined go-to-market strategy and integrating key resources across regions. Building on a strong reputation for service quality and trust, our marketing efforts remain client-centric, emphasizing long-term value creation and relationship-based engagement.

With all the technology and business developments, Amber Premium is able to sustain stability across market cycles, distinguishing itself from retail-driven platforms through our institutional-grade infrastructure and a diversified compliant-first operating model. Here's how we achieve resilience. First, institutional client base anchored in our long-term strategies. Our focus on high-net-worth individuals and institutions who prioritize long-term asset allocation over speculative trading reduces exposure to short-term volatility. Second, diversified revenue model beyond trading volumes. Unlike platforms relying on transaction fees, Amber Premium's revenue streams are diversified, offering products that meet different risk preferences across different market cycles. Third, regulatory and operational excellence. Headquartered in Singapore and with additional presence in other major global financial hubs, we adhere to highest KYC standards and maintain institutional-grade custody. These measures mitigate security risks and help with asset protection even during high volatility periods.

Now, turning to our outlook for 2025, I will share the priorities and growth initiatives we are focused on as we move forward. We are focused on executing our growth strategy across several dimensions. Following the completion of the merger in March 2025, Amber International is executing a focused strategy to strengthen its leadership in institutional crypto finance. The company is enhancing its compliance-first scalable platform to better serve the evolving needs of institutions and high-net-worth individuals globally. Strategic priorities for 2025 include expansion into tokenization of real-world assets, enhancement of our institutional-grade product suite, and the rollout of a refined go-to-market strategy across core financial hubs. These efforts are supported by a broadened geographic footprint, with a particular focus on regulated markets in Asia and the Middle East.

As previously announced, Sparrow Tech Private Limited, a major payment institution licensed under the Payment Services Act by the Monetary Authority of Singapore, has recently integrated into Amber International following the approval from the Monetary Authority of Singapore, a milestone in executing our strategic priorities. Effective April 30, 2025, Sparrow will operate under the new brand name Amber Premium Singapore, further reinforcing the company's regulated presence in Asia. In conclusion, fiscal year 2024 has been transformative for Amber International Holding Limited. Our successful merger with a Nasdaq listing, combined with our growing client base and asset under management, positions us well for continued success. Legacy infrastructure from iClick has enabled a smooth transition to public markets, and Amber International is now entering the next phase with clarity and strategic focus.

We remain committed to our mission of connecting CeFi and DeFi with institutional-grade solutions, empowering institutions and high-net-worth individuals with seamless access to digital assets. As a Nasdaq-listed company, we will continue to deliver reliable trading technology, risk management, and scalable infrastructure to accelerate crypto adoption. I would like to once again thank our shareholders, clients, and employees for their support. We look forward to continuing our journey as a public company and delivering long-term value to all our stakeholders. With that, let me hand the call over to our CFO, Josephine Ngai, who will walk you through our financial results for fiscal year 2024 in more detail.

Josephine Ngai (CFO)

Thank you, Wayne, and good morning, everyone. I'm Josephine Ngai, CFO of Amber International Holding Limited, and I'm pleased to walk you through our financial results for the fiscal year 2024.

As Wayne mentioned, 2024 was a pivotal year of strategic realignment and operational transformations for our company. While our financial results reflect the impact of non-recurring restructuring and transactions-related expenses, we entered 2025 with a more focused operating model and a strengthened foundation for growth. Let me begin by discussing the announced financial results of our legacy business for the year-end, December 31, 2024. As a reminder, these results reflect the financial performance of our marketing solutions and enterprise solutions business, which were part of iClick Interactive Asia Group Limited prior to the merger with Amber DWM Holding Limited. As mentioned earlier, the numbers I will be sharing today are for our legacy operations only. They do not include any financial contributions from Amber DWM, as the merger was completed after year-end in March 2025.

The consolidated results, including Amber DWM, will be reflected starting in our first quarter 2025 reporting. We are excited to share those updates with you in the next earnings cycle, so please stay tuned. For the full year of 2024, total revenue from continuing operations was $32.8 million, compared with $36.1 million for the full year of 2023, representing a 9% decrease. This decrease was primarily due to clients' tightened advertising budgets in our marketing solution segment caused by the macroeconomic uncertainty. By breaking down our revenue into business segments, the revenue from marketing solutions decreased by 30% year-over-year to $23.5 million. The revenue from enterprise solutions increased by 3% year-over-year to $9.3 million, driven by increasing demand for digital transformation and services. Gross profit for the full year was $16.7 million, compared with $19.1 million in 2023.

Our gross profit margin maintained relatively stable at 51% for 2024, compared with 52.9% for 2023. Total operating expenses were $34.1 million in 2024, compared with $13.7 million in 2023. The increase was primarily due to non-recurring consultancy, legal, and other professional service fees related to our restructuring and merger preparation. However, it was partially offset by our tightened cost controls, which resulted in reduced staff costs and savings on promotion expenses, as well as a decline in impairment of long-life assets. Other losses net were $7.2 million in 2024, compared to $2.3 million in 2023. This increase was mainly due to impairment losses on our long-term investments, non-recurring losses on restructuring, and exchange losses, partially offset by the gain from the disposal of discontinued operations.

As a result, we report a net loss from continuing operations of $24 million in 2024, compared with a net loss of $13.7 million in 2023. For our discontinued operations, we record a net loss of $5.1 million in 2024, a significant improvement from the net loss of $25.2 million in 2023. This improvement was primarily due to the consolidation of loss-making operations following their disposal, as well as the gain on disposals of $2.6 million. Turning to our balance sheet, as of December 31, 2024, we had cash and cash equivalent time deposits and restricted cash of $19.6 million, compared with $41.3 million as of December 31, 2023.

The company we paid bank borrowing net of $35 million for the restructuring in 2024. Total assets were $49.6 million as of December 31, 2024, compared to $163.7 million as of December 31, 2023. Total liabilities were $35.2 million as of December 31, 2024, compared to $122.5 million as of December 31, 2023. Below are the summary of performance financial figures of Amber DWM for the first half, second half, and full year of 2024 that have been considered by the board of directors of the company before closing the merger. The revenue of Amber DWM increased from $19 million in first half to $23 million in second half of 2024. Total full year's revenue was recorded as $42 million. The gross profit increased from $12 million-$14.6 million, which comes up with a full year gross profit reached $26 million.

The operating profit also increased from $1 million-$4 million to make up to $5.1 million for the full year 2024. Once again, the above balance sheet figures represent our projections prior to the consolidation of Amber DWM. You can expect to see the full combined financial picture starting from our first quarter 2025 results. As mentioned by our CEO, Wayne, on March 12, 2025, we successfully completed our merger, and Amber International Holding Limited-American Depositary Shares began trading under the new ticker symbol, AMBR, on the Nasdaq effective from March 13, 2025. The legacy business provides key operational advantages that enable a smooth transition to public market readiness. This includes a mature reporting infrastructure, internal governance capabilities, and a full SEC compliance public company's platform, which is critical elements that help de-risk our public debut.

With discontinued operations largely wound down and legacy liabilities adjusted by the end of 2024, we enter our next phase with clarity and strategic focus. Looking ahead to 2025, we remain confident in the long-term opportunity in the digital asset space, bolstered by the recent approval from Amber International's Board of Directors for a crypto treasury investment. We have authorized a strategic $10 million crypto reserve building up, leveraging our combined cash reserve as part of a forward-thinking treasury management strategy. This reserve is a strategic treasury management decision, balancing innovations with fiscal responsibility. By diversifying into crypto assets, we aim to enhance long-term shareholder value while maintaining robust liquidity to support our operation.

Finally, I would like to share our financial priorities for 2025, which include: we want to optimize our capital structure to support Amber Premium growth initiatives, implementing disciplined cost management across all business functions, enhancing our financial reporting system to provide transparent insights into our new business model, and maintaining strong liquidity and balance sheet flexibility to capitalize on strategic opportunities. As we operate our new business model under the Amber Premium brand, we are focused on building a scalable financial foundation that supports sustainable growth and creates long-term shareholder value. With that, I will now turn the call back to Terence for closing remarks. Thank you.

Terence Li (Chief Strategy Officer)

Thank you, Wayne, and thank you, Josephine. That concludes our prepared remarks for today. Thank you for all joining us on the call.

Before we open the line for questions, I'd like to mention that you can find additional information in our investor presentation, which has been posted on our investor relations website at ir.ambr.io. We will now be happy to answer any questions you might have. Operator, please open the line for Q&A.

Operator (participant)

Thank you. If you'd like to ask a question at this time, you may press star one from your telephone keypad. Confirmation tone will indicate your line is in the question queue. If you'd like to withdraw your question from the queue, you may press star two. Participants are using speaker equipment. It may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Thank you. And our first question comes from the line of Brian Kinstlinger with Alliance Global Partners. Please proceed with your questions.

Hi, this is Kevin for Brian. Thanks for taking our questions. Could you share what your three largest revenue sources are and what their percentage of total revenue was for Amber Group in 2024?

Terence Li (Chief Strategy Officer)

Thank you, Kevin. And maybe Wayne could explain a little bit about the source of revenues, and Josephine can add on a bit of color on a ballpark percentage if we could. Wayne please.

Wayne Huo (CEO and Director)

Yeah. So our main offerings are in three key segments. The first one is execution solutions, which we help clients execute the transactions and execute their orders through centralized, decentralized exchanges, and OTC markets. The second segment is wealth management solutions, which we aggregate yield and combine with option structures to enhance their crypto holding yields.

The third segment is the payment solution, where we offer compliance solutions for fiat to crypto, crypto to fiat conversion, as well as card payments through the Amber Premium Crypto Card, so those are the three main revenue segments that we are currently operating with.

Josephine Ngai (CFO)

Okay. Thank you, Wayne. For the trading and execution service, it will be around 20%-30% of our total revenue mix, and the rest will be the wealth management products and the payment solutions. For more detail, maybe we can look forward to our first quarter results in 2025. Thank you.

Thank you, and just another question. With the majority of your revenue coming from Dubai, what changes when your platform gets its Dubai license, and do you think attracting customers becomes easier?

Wayne Huo (CEO and Director)

So we operate on a global basis.

I think we have not yet touched into the local presence in the Middle East, and with the official license, hopefully, when we get the official license in Dubai, we'll be able to tap into the local client segment, local high net worth, and institutions in the Middle East. So that would expand our client base and our target client addressable market. So that would change some of our resource and strategic focus in the Middle East. With that, right now, we are more on a global basis, and yeah, that's basically. Hope that answers your question.

Yeah. Thank you. And then could you describe the competitive landscape in your key markets, including Dubai, Hong Kong, and Singapore?

So I think we are operating a very unique business model.

So if you look at the three different business lines that we have, I'm sure there are competitors in each business line, but combined, we serve a full life cycle for institutions and high net worth demands in crypto assets. So I don't see much direct competitor in the business model that we operate at, especially in Asia. While I think in terms of other, in each of the business segments, you can find competitors or you can find similar offerings in the region. With that said, I believe our listing status actually sets us aside from the rest of the competition, where we are offering a more transparent and a better governance, a better disclosure business to our partners in the crypto space.

Terence Li (Chief Strategy Officer)

Yeah, just to echo on what Wayne has said, I think we are pretty unique, and in different segments, we do face different, I would say, different sort of competition, as Wayne just mentioned. And the exchange will be one and some more traditional TradFi players also may be trying to tap into this space. But obviously, we stand at a really strong position with our infrastructure and all the expertise that we build on. So I guess we're pretty much in a well-positioned position to counter these competitions.

Great. Thank you. And just one last question. How is your business differentiated from some of the larger platforms, the more of the well-known platforms in North America?

Wayne Huo (CEO and Director)

So I believe most of the platforms are good, especially crypto platforms are mostly exchanges, and they are more retail-driven. And for us, again, our business model is unique.

We focus on institutions and high net worth only, and the demand for these client segments is very much different from what retail users would like, so for example, the investment or wealth management product pretty much mainly caters towards institutions and high net worth clients, where in the retail side of things, I think the retail users, they are most likely more speculative. They look for higher volatility opportunities. They look for a more trading-centric or speculative-centric feature where the institutions and our high-net-worth client base are not very keen about, so I guess we will have a different focus and with different resources focusing on developing the key features towards our client segment. In general, over a time period, it will set us aside from the more retail-driven platforms.

Terence Li (Chief Strategy Officer)

And just to add on, I think the U.S. customer and the Asian customers are quite different in terms of their service level and the product offerings that they require. In a part of the world, most of the high-net-worth institutions that we are serving basically will require a certain level of services, and so it's not like a pure technology model. In some extent, I think our Amber Premium has well-positioned to tackle the Asian growth in terms of high net worth and institutions' adoption of cryptos in this kind of demand. I hope this makes sense.

Great. Thanks so much.

Thank you.

Operator (participant)

Mr. Li, there are no additional questions on the phone at this time. Do we have any submitted questions?

Terence Li (Chief Strategy Officer)

Yes. Online questions to talk about in terms of our mergers, is there any lockup in terms of share issues?

I think we have published in terms of our M&A agreements to the market that there is a one-year lockup after the merger. Yeah. And apart from that, I think there's no more questions online as well. Yeah.

Operator (participant)

Mr. Li, there are no additional questions over the phone either. Would you like to make some closing remarks?

Terence Li (Chief Strategy Officer)

Yeah. Then I think thank you all for your questions and for joining us today. I think we could close it. As we have discussed, 2024 was a transformative year for our company, culminating in our successful merger and listing in March 2025. As Amber International Holding Limited, operating under the Amber Premium brand, we're well-positioned to capitalize on the growing institutional demand for digital assets, wealth management services. We look forward to updating you on our progress in the coming quarters.

If you have any additional questions, please don't hesitate to contact our investor relations team. This concludes today's call. You may now disconnect.

Operator (participant)

Thank you. Mr. Li, this concludes today's call. You may now disconnect your lines at this time. Thank you for your participation.