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OLB GROUP, INC. (OLB)·Q4 2022 Earnings Summary

Executive Summary

  • Q4 2022 revenue is estimated at $6.96M, up sequentially vs Q3 ($6.25M), driven by core Fintech Services while Cryptocurrency contributed modestly; FY 2022 revenue rose 81.7% to $30.37M, highlighting strong scale from 2021 acquisitions and payment processing growth .
  • FY net loss was $7.97M; by derivation Q4 net loss was ~$3.37M, reflecting higher operating costs and amortization/depreciation tied to the CBD merchant portfolio and Bitcoin mining assets .
  • Management reiterated strategic progress (12.9M transactions, $1.2B run-rate, relocation of 1,000 BTC miners to Tennessee with access to 20MW, and a planned DMint spinoff) and emphasized debt-free status .
  • Insider buying (114,143 shares) and buybacks (116,172 shares) in Dec-22 reinforce confidence; no formal 2023 guidance was provided, and a litigation dispute over the acquired CBD portfolio remains a watch item .
  • Estimates context: Wall Street consensus for Q4 2022 (EPS, revenue) was unavailable from S&P Global during retrieval; comparisons to estimates cannot be made at this time.

What Went Well and What Went Wrong

  • What Went Well

    • Annual revenue increased 81.7% to $30.37M; merchant services revenue grew $13.3M YoY, supported by 12.9M transactions and a $1.2B annualized volume run-rate .
    • “Company continues to be debt free” and progressed on relocating 1,000 ASIC miners to Tennessee with access to 20MW power, reducing energy costs and consolidating operations .
    • Strategic optionality: “Established Cryptocurrency Business segment… in preparation for planned spinoff of DMint to shareholders,” indicating a potential value-unlock .

  • What Went Wrong

    • FY net loss was $7.97M with elevated processing/servicing costs (+71.8% YoY to $23.15M) and higher G&A (+88.1% YoY to $4.49M), compressing profitability despite revenue growth .
    • Into Q1 2023, revenue declined YoY due to removal/termination of ~700 merchants from the acquired CBD portfolio for non-compliance, underscoring integration and portfolio-quality risks; litigation with the seller is ongoing .
    • Cryptocurrency revenue remained small relative to the core Fintech segment (FY $0.73M), while mining depreciation and related costs weighed on operating margins .

Financial Results

MetricQ2 2022Q3 2022Q4 2022
Revenue ($USD)$8,372,435 $6,246,551 $6,963,534 (derived: FY $30,368,979 − 9M $23,405,445)
Net Loss ($USD)$(1,437,954) $(1,712,562) $(3,368,056) (derived: FY $7,974,168 − 9M $4,606,112)
Net Loss per Share ($USD)$(0.10) $(0.12) n/a (not disclosed)

Segment revenue breakdown:

Segment Revenue ($USD)Q2 2022Q3 2022Q4 2022
Fintech Services$8,164,469 $6,085,302 $6,870,910 (derived: FY $29,642,800 − 9M $22,771,890)
Cryptocurrency Business$207,966 $161,249 $92,624 (derived: FY $726,179 − 9M $633,555)

Key operating KPIs:

KPIFY 2022
Transactions processed (units)12.9M
Transaction volume run-rate ($USD)$1.2B
Merchants served (approx.)Over 10,300

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2023n/an/aNo guidance disclosed
Margins/OpEx/TaxFY 2023n/an/aNo guidance disclosed
Segment-specificFY 2023n/an/aNo guidance disclosed
Capital returns (buyback/dividends)OngoingBuyback program authorized Jul-22; 116,172 shares repurchased by Dec-20, 2022 Ongoing authorization; no dividendMaintained buyback program

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2022, Q3 2022)Current Period (Q4 2022)Trend
Cryptocurrency mining footprintProgress toward 1,000 miners; depreciation ramp; Tennessee build-out; 472k–634k mining revenue in 6–9M Relocated 1,000 ASIC miners to Tennessee; access to 20MW; crypto segment $0.73M FY Scaling operations; revenue still modest vs core
CBD merchant portfolio impactMaterial revenue lift post-2021 acquisition; amortization expense rising Subsequent removal of ~700 merchants for non-compliance impacted Q1’23; litigation ongoing Quality/attrition risk surfaced post-acquisition
Capital returns/insider alignmentBuyback authorized Jul-22 Insider purchases (114,143 shares) and corporate buybacks (116,172 shares) Supportive insider activity; program active
Regulatory/legal environmentOngoing regulatory risks (Dodd-Frank/CFPB, card network rules) No new Q4-specific updates; risks remain Steady risk backdrop
Core payment processing growthRun-rate and transactions strengthened; Fintech revenue dominant FY transactions 12.9M; $1.2B run-rate; Fintech $29.64M FY Strong foundational growth maintained

Management Commentary

  • Strategic posture: “Company increases year-over-year annual revenue from $16.7M to $30.4M” and remains “debt free,” reflecting scalable merchant services and disciplined capital structure .
  • Operations: “Transferred 1000 ASIC Bitcoin mining computers to new Tennessee facility to benefit from lower hydroelectric power costs” and secured “access to 20 MW of power” .
  • Corporate structure: “Established Cryptocurrency Business segment… in preparation for planned spinoff of DMint to shareholders” .
  • Business footprint: “over 10,300 merchants in diversified market sectors in all 50 states” .

Q&A Highlights

  • Q4 2022 earnings call transcript was not available in the document set; no Q&A themes could be extracted for the quarter.

Estimates Context

  • S&P Global consensus estimates (EPS and revenue) for Q4 2022 were unavailable during retrieval; therefore, we cannot assess beats/misses versus Street expectations at this time.

Key Takeaways for Investors

  • Sequential revenue improvement in Q4 vs Q3, with FY 2022 revenue up 81.7% YoY, underscores the core payments engine; Fintech Services remains the value driver while cryptocurrency is incremental .
  • Profitability remains the challenge: processing/servicing costs and G&A rose sharply in 2022; ongoing cost discipline and portfolio quality improvements are critical to margin recovery .
  • Watch the CBD portfolio dispute: removal of ~700 merchants and litigation with the seller pose near-term revenue and cost risks; resolution is a catalyst for sentiment .
  • Insider buying and buybacks provide downside support and signal management conviction; continuation may help stabilize the shareholder base .
  • Crypto strategy is being optimized (Tennessee relocation, 20MW power), but remains small relative to Fintech; pursue cautious expectations until segment economics scale .
  • Absent formal 2023 guidance, monitor monthly/quarterly transaction trends and merchant adds as leading indicators for revenue trajectory .
  • Near-term trading: focus on legal development timelines and any operating updates on merchant attrition reversal; medium-term thesis centers on scaling payments, margin normalization, and potential DMint spinoff optionality .

Notes: Where Q4 figures were not directly disclosed, quarterly amounts were derived from audited FY 2022 and reported nine-month results (revenues and net loss), with explicit citations for source figures.