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RYVYL Inc. (RVYL)·Q3 2023 Earnings Summary

Executive Summary

  • Record Q3 revenue of $17.480M (+64% YoY) with processing volume of $861M; revenue landed at the high end of guidance ($16–$18M) and adjusted EBITDA turned modestly positive at $0.052M, while net loss narrowed to $3.116M .
  • EU revenue more than doubled to $5.0M (+~100% YoY) and North America reached $12.5M (+47% YoY), supported by strong international processing and new U.S. channels; total processing volume beat guidance ($720–$800M) meaningfully .
  • Q4 2023 outlook: revenue $19–$21M and processing volume $900M–$1.0B; FY 2023 revenue raised to $62–$64M vs prior “≥$60M,” but adjusted EBITDA expectations reset to a FY loss of $2–$3M and Q4 adjusted EBITDA of $0.5–$1.0M .
  • Strategic catalysts: Banking-as-a-Service expansion (Visa Direct, SEPA), coyni mPOS launch, and debt reduction via exchange into Series A preferred ($6.7M completed, $21M contemplated), plus CFO transition to George Oliva—each supports medium-term scale and margin potential despite near-term legal and compliance costs .

What Went Well and What Went Wrong

What Went Well

  • “Q3 top line revenues increased nearly 64% year-over-year to $17.5 million… revenue came in the upper end of our Q3 target range” (Ben Errez), and processing volume reached ~$861M (+28% QoQ), beating guidance .
  • EU growth: “RYVYL EU revenue saw tremendous year-over-year growth… currently representing 28.5% of our total revenue,” and Visa Direct/SEPA enable instant transfers and expanded reach into 80+ countries over time .
  • Adjusted EBITDA turned positive ($0.052M) and coyni mPOS launched to lower deployment costs and support expansion into riskier verticals; “we strongly believe in our ability to execute our strategy and to generate long-term value” (Ben Errez) .

What Went Wrong

  • Cost of revenue rose 149% YoY to $10.800M, pressuring gross margins; drivers were higher gateway fees, ISO commissions, and acquired business costs .
  • Non-recurring legal settlements ($1.929M) and higher G&A tied to credit loss provisions on legacy accounts weighed on profitability .
  • Adjusted EBITDA of ~$0.05M missed the prior $1–$2M Q3 target; management cited “higher-than-planned expenses associated with card scheme fees, technology development, external legal spending and administrative expenses to regain compliance” .

Financial Results

MetricQ1 2023Q2 2023Q3 2023
Revenue ($USD Millions)$11.300 $14.800 $17.480
Gross Profit ($USD Millions)$5.100 $6.068 (41% of $14.8M) $6.680
Gross Margin %45.3% 41.0% 38.2% (=$6.680/$17.480)
Operating Expenses ($USD Millions)$8.800 $11.800 $9.044
Loss from Operations ($USD Millions)$(3.700) (=$5.100–$8.800) $(5.732) (=$6.068–$11.800) $(2.364)
Net Loss ($USD Millions)$(8.000) $(12.000) $(3.116)
EPS (Basic & Diluted) ($USD)$(0.15) N/A$(0.60)
Cash, Cash Equivalents & Restricted Cash ($USD Millions)$57.1 $63.9 $68.4
Unrestricted Cash ($USD Millions)N/A$13.2 $15.845

Segment and geography revenue mix:

Segment Revenue ($USD Millions)Q2 2023Q3 2023
North America$11.0 $12.5
EU$3.8 $5.0

KPIs – Processing volume by channel:

KPI (Processing Volume)Q1 2023Q2 2023Q3 2023
Total Processing Volume ($USD Millions)$565 $678 $861
EU (FX/International + BaaS) ($USD Millions)$344 $425 $517
North America Acquiring ($USD Millions)$112 $146 $171
ChargeSavvy ($USD Millions)$66 $53 $42
American Samoa ($USD Millions)$28 $31 $30
Adjusted EBITDA ($USD Millions)$(3.000) $(0.900) $0.052

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ3 2023$16–$18M Actual: $17.480M Achieved within range
RevenueQ4 2023$19–$21M $19–$21M Maintained
Processing VolumeQ4 2023N/A$900M–$1.0B Introduced
RevenueFY 2023≥$60M $62–$64M Raised
Adjusted EBITDAQ3 2023$1–$2M Actual: $0.052M Lower than target
Adjusted EBITDAQ4 2023N/A$0.5–$1.0M Introduced
Adjusted EBITDAFY 2023+$2–$3M $(2)–$(3)M Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2023)Previous Mentions (Q2 2023)Current Period (Q3 2023)Trend
Banking-as-a-Service (BaaS)Signed 6 FIs, targeting $100M/month; Intercash partnership; global platform plan (100+ currencies) Momentum building; Visa Direct and SEPA integration underway Ongoing ramp; $517M EU processing; BaaS revenue growing, pricing optimization needed Scaling with operational refinement
Visa Direct/SEPAGlobal coverage vision reiterated Approval for SEPA instant; Visa Direct integration targeted Integration timelines depend on country compliance; management expects mid-2024 completion Progressing; timelines extended
coyni spin-off/mPOSSpin-off initiation; launch vehicle acquired; dividend plan discussed Spin-off process advancing; mPOS app introduced FINRA review ongoing; mPOS launched; U.S. focus resuming; EU coyni entity established Continuing, with operational steps
Regulatory/MacroU.S. regulatory uncertainty; contingency for EU-first rollout FedNow commentary; regulatory hurdles noted Visa integration delays tied to compliance; reiterated regulatory constraints Regulatory headwinds persist
American Samoa~60% merchant coverage; case study for closed-loop Volume +10% QoQ; sustaining ~$10M/month Volume ~$30M; adoption plateau discussed; mPOS to aid conversion Stable, with product-led improvement
Capital structure/NASDAQNot highlightedRegained compliance; debt exchange contemplated $6.7M exchanged to Series A preferred; further $16.7M planned; reverse split executed Deleveraging and compliance actions

Management Commentary

  • “Q3 top line revenues increased nearly 64% year-over-year to $17.5 million… [processing volume] totaled $861 million… we are very pleased with the steady growth trajectory and our improved margin profile” (Ben Errez) .
  • “RYVYL EU revenue saw tremendous year-over-year growth… being chosen as Visa Direct partner… will allow… superior Banking as a Service offering” (Ben Errez) .
  • “In the third quarter 2023, adjusted EBITDA was positive $50,000… we ended the quarter with cash… $68.4 million, of which $15.8 million is unrestricted” (George Oliva) .
  • “We launched the coyni Mobile Point of Sale (mPOS) app… transforming iOS and Android devices into a payment terminal… secure, efficient transactions” (Press release) .
  • “Operating expenses decreased… primarily due to a decrease in depreciation and amortization and stock compensation… higher general and administrative expenses… attributable to non-recurring provision for credit losses on non-continuing legacy accounts” (Financial summary) .

Q&A Highlights

  • coyni mPOS vs Square: Designed to replace traditional terminals, enable instant pay with KYC, reduce fraud/chargebacks, support global deployment without hardware delays (Fredi Nisan) .
  • Convertible note conversion timing: Two tranches; July reflected, second tranche approved at shareholder meeting to be reflected subsequently (George Oliva) .
  • Visa integration timelines: Country-specific compliance drives timing; unique ability to process higher-risk categories globally through Visa (Fredi Nisan) .
  • EU revenue-to-volume ratio: Lower BaaS monetization early-phase; pricing optimization expected to improve ratios (Min Wei) .
  • American Samoa adoption: Plateau near 60% coverage; mPOS expected to accelerate conversion from conventional POS; 2024 plan proposed with partner TBAS (Min Wei) .

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 2023 revenue and EPS was unavailable during this session due to S&P Daily Request Limit; therefore, vs-estimate comparisons are not provided. Values retrieved from S&P Global.*
  • Company guidance comparison: Q3 revenue of $17.480M came within the $16–$18M range; Q4 guidance maintained at $19–$21M with processing $900M–$1.0B .

Key Takeaways for Investors

  • Revenue growth is robust and diversified: EU revenue doubled YoY to $5.0M and North America rose 47% YoY to $12.5M, with total processing volume beating guidance—supporting a sustained top-line trajectory .
  • Margins compressed sequentially (Q3 gross margin 38.2% vs Q2 41%) due to higher processing-related costs; near-term focus should be on pricing optimization in BaaS to lift revenue-to-volume ratios .
  • Adjusted EBITDA flipped positive but missed the prior target; expect continued investment in tech, legal, and compliance in Q4 as EBITDA guidance is modest ($0.5–$1.0M) .
  • Strategic progress (Visa Direct, SEPA, coyni mPOS) positions RYVYL to scale internationally; mid-2024 integration milestones are an operational catalyst to watch .
  • Capital structure actions (preferred share exchanges totaling up to $21M, reverse split) support deleveraging and listing compliance—monitor year-end financials for full debt reduction impacts .
  • Q4 and FY guidance imply continued momentum: revenue $19–$21M in Q4 and FY $62–$64M, though EBITDA expectations have been reset—estimate models should reflect higher operating costs near-term .
  • Trading lens: Near-term stock narrative is driven by execution against Q4 volume/revenue targets, clarity on coyni spin-off timing, and visible progress on Visa Direct country activations; any positive surprises on margin or EBITDA could be met with outsized reaction given recent resets .
Note: S&P Global consensus estimates were unavailable in this session due to daily limit constraints; vs-estimate comparisons are not shown. Values retrieved from S&P Global.*