Executive Summary

Q4 2023 was RVYL’s fifth straight quarterly revenue record: revenue rose 100% YoY to $22.3M and 27% QoQ, exceeding the company’s Q4 guide of $19–$21M; adjusted EBITDA turned modestly positive at $0.126M, though non‑cash debt conversion charges drove sizable “Other expense” in the quarter .
Mix and scale improved: North America revenue grew 85% YoY to $16.6M; International (RYVYL EU + BaaS) grew 165% YoY to $5.6M; total processing volume reached ~$1.0B (+98% YoY) with international BaaS momentum and EU acquiring strength .
2024 outlook calls for a near‑term volume/revenue dip from a North America terminal‑to‑app migration and banking partner change (Q1 revenue guide $15–$16M; volume $900–$950M), but full‑year revenue of $90–$100M and positive 2024 adjusted EBITDA of $1–$5M; FY volume expected >$5B .
Potential stock catalysts: revenue/guide beat vs internal targets, EU acceleration (ACI orchestration, Visa Direct testing), and path to positive EPS as balance sheet de‑risks; near‑term risk stems from NA migration headwinds and liquidity needs in NA segment highlighted in the 10‑K subsequent events section .

What Went Well and What Went Wrong

What Went Well

Record revenue and volume: Q4 revenue $22.3M (+100% YoY; +27% QoQ) on ~$1.0B processing volume; “company record for the fifth consecutive quarter” .
International momentum: RYVYL EU revenue nearly tripled in 2023 to ~$17M; integration of Visa Direct in testing; Banking‑as‑a‑Service ramped to >$200M/month; management: “We remain quite optimistic about the opportunity in Europe and beyond” .
Balance sheet actions: Convertible note principal reduced by $66.3M in 2H23, lowering total indebtedness to $19.2M at 12/31/23; sale of Chicago office yielded ~$2.6M gross proceeds; company regained Nasdaq compliance .

Management quotes

“Our fourth quarter 2023 revenue increased 100% year‑over‑year to $22.3 million…reflects a 27% sequential increase from $17.5 million in the third quarter of 2023.”
“We continue to work with our large institutional partners on our Banking‑as‑a‑Service platform and have ramped up to over $200 million per month in transaction volume.”
“The execution of these agreements reduced the principal balance of our convertible note by $66.3 million…lowering the total indebtedness to $19.2 million as of December 31, 2023.”

What Went Wrong

North America near‑term disruption: Transition from terminal‑based to app‑based processing and a banking partner change is expected to reduce Q1 volume to $900–$950M and revenue to $15–$16M (−28% to −33% QoQ) .
Margin/expense pressure: Q4 cost of revenue rose with scale (to $14.5M), while higher‑than‑planned processing, technology, legal and admin costs held adjusted EBITDA to $0.126M vs a $0.5–$1.0M target .
Liquidity flagged in 10‑K: Management disclosed that NA segment cash was insufficient for 12‑month needs absent actions (cost controls, repatriation from EU, and capital raise) due to the product transition’s adverse revenue impact .

Financial Results

Note: All figures are GAAP unless noted; gross margin for Q3/Q4 calculated from reported revenue and cost of revenue.

Metric	Q2 2023	Q3 2023	Q4 2023
Revenue ($M)	$14.8	$17.5	$22.3
Cost of Revenue ($M)	$8.7	$10.8	$14.5
Gross Profit ($M)	$6.1 (calc)	$6.7	$7.8 (calc)
Gross Margin %	41.0%	38.2% (calc)	35.0% (calc)
Operating Expenses ($M)	$11.8	$9.0	$10.6
Other (Income)/Expense ($M)	n/a	$(0.6)	$27.0
Adjusted EBITDA ($M)	$(0.9)	$0.05	$0.126

EPS/Net income: Q3 2023 net loss $(3.1)M, $(0.60) per share; Q4 EPS not disclosed in available documents (Q4 included a $23.5M non‑cash derecognition charge within “Other expense”) .

Segment revenue (Q4 2023)

Segment	Revenue ($M)
North America	$16.6
International (RYVYL EU + BaaS)	$5.6

KPIs (Q4 2023)

KPI	Value
Total Processing Volume	~$1.0B
NA Merchant Services Volume	$278M
FX/International Payments + BaaS Volume	$590M
American Samoa Volume	$34M (serving >60% of target merchants)

Vs estimates: S&P Global consensus was unavailable at time of retrieval; results exceeded company’s Q4 revenue guidance ($19–$21M) . S&P Global consensus unavailable.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q1 2024	n/a	$15–$16M	New guide; implies −28% to −33% QoQ
Processing Volume	Q1 2024	n/a	$900–$950M	New guide; lower vs Q4 ~$1.0B
Revenue	FY 2024	$95–$100M (Jan pre‑announce)	$90–$100M (call)	Lowered (midpoint $97.5M → $95M)
Adjusted EBITDA	FY 2024	n/a	$1–$5M	New positive EBITDA target
Total Processing Volume	FY 2024	n/a	>$5B	New full‑year volume objective

Context: Management also highlighted a near‑term NA migration headwind and NA segment liquidity plan (cost controls, EU cash repatriation, capital raise) in the 10‑K subsequent events .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 2023)	Current Period (Q4 2023)	Trend
EU payments (SEPA, Visa Direct)	SEPA enabled; Visa Direct partnership; mid‑2024 integration target; EU revenue rising	Visa Direct integration in testing; ACI orchestration integration underway to scale EU acquiring; expect >200% EU volume growth in 2024	Accelerating execution
Banking‑as‑a‑Service (BaaS)	Building to $100M/month; >40 currencies, local settlement	>$200M/month; cited as long‑term growth driver	Scaling faster
coyni strategy	Planned spin‑off discussed in Q2/Q3	Spin‑off canceled; retained to optimize payments/BaaS; begin mobile processing ramp in U.S./EU	Strategic pivot to integrate
North America processing model	Terminal‑based footprint; mPOS/app development introduced	Transition to app‑based; temporary volume/revenue headwind in Q1; expected recovery over coming quarters	Transitory headwind
Margins	GM ~41% in Q2; improving with scale	Company GM “hovering ~38–40%”; aim to maintain/slightly improve with efficiency	Stable to slight improvement
Balance sheet/debt	Ongoing exchanges; initial $6M reduction; more contemplated	Total debt cut by $66.3M; indebtedness $19.2M at 12/31/23; regained Nasdaq compliance	De‑risking balance sheet

Management Commentary

“We are now CEPA enabled and targeting more than 2,000 payment service providers across 36 countries…We progressed towards completing integration with Visa Direct, which is now in testing.”
“By maintaining a consolidated product road map, we expect to leverage coyni…for better operating efficiencies and enhanced profitability.”
“If…we get to $120 million revenue level, we anticipate to hit a positive earnings per share and the timeline for that indicatively is 2025.”
“We are currently in the process of integrating the ACI solution…set to scale by over 200% this year in [EU] volume.”

Q&A Highlights

Partnerships and scale: ACI orchestration to boost EU capacity; Visa Direct Phase 1 roll‑out testing in 2024 with identified customers; R3 partnership to pilot RYVYL Block as blockchain‑as‑a‑service .
Margin outlook: Company‑wide gross margin “hovering around 38%–40%” near‑term; aim to maintain/improve via efficiency as scale increases .
NA transition impact: Terminal‑to‑app migration and banking partner change depress Q1 volumes; management expects momentum rebuild and improved retention/visibility with direct app user engagement .
Competitive/Regulatory: Focus on niche verticals; not competing head‑to‑head with PayPal/Venmo; requisite licenses in U.S./EU aligned to target risk profiles .
American Samoa: >60% merchant penetration; volumes ~>$10M/month; opportunity to migrate to mobile/app and coyni features over time .

Estimates Context

S&P Global/Capital IQ consensus was unavailable at time of retrieval; therefore, we compare actuals to company guidance instead. S&P Global consensus unavailable.
Actual Q4 revenue ($22.3M) exceeded company guidance of $19–$21M; adjusted EBITDA positive but below the earlier targeted $0.5–$1.0M due to higher processing/tech/legal/admin costs .

Key Takeaways for Investors

Strong topline momentum continued into Q4 with a 100% YoY revenue increase and fifth consecutive quarterly record, driven by EU/BaaS scale and improving mix; watch for sustainability of the ~$1B quarterly volume pace post Q1 dip .
Near‑term (Q1) headwind from NA migration should be transitory; the shift to app‑based processing may enhance data visibility, KYC, and retention, supporting medium‑term margin and growth resilience .
EU remains the growth engine: Visa Direct testing, ACI orchestration, and SEPA capabilities position RYVYL EU for >200% 2024 volume growth ambition; execution there is a key lever for consolidated results .
Balance sheet de‑risking lowered convertible note principal to $19.2M and supported Nasdaq compliance; further deleveraging is tied to capital plans and operating cash flow progression .
2024 guide implies a reset in Q1 followed by recovery: revenue $90–$100M and adjusted EBITDA $1–$5M; delivery against that path will likely shape estimate revisions and stock reaction .
Longer‑term EPS inflection depends on reaching ~$120M revenue and reducing non‑cash expenses; management frames positive EPS as achievable in 2025 if balance sheet/operating targets are met .
Liquidity actions in NA (cost controls, EU cash repatriation, potential capital raise) are important watch‑items given the 10‑K disclosure of short‑term NA funding needs post‑transition .

Appendix: Prior Quarter Context

Q3 2023 revenue: $17.5M (+64% YoY), processing volume $861M; Q3 adjusted EBITDA ~$0.05M; Q3 EPS $(0.60) .
Q2 2023 revenue: $14.8M (+113% YoY), gross margin 41%; adjusted EBITDA $(0.9)M .

Sources: Q4 2023 earnings call transcript (Mar 26, 2024) ; 10‑K FY2023 (Mar 26, 2024) ; Jan 19, 2024 8‑K pre‑announcement ; Q3 2023 8‑K (Nov 13, 2023) ; Q2 2023 call (Aug 14, 2023) .

RYVYL Inc. (RVYL)·Q4 2023 Earnings Summary