SHF Holdings, Inc. (SHFS)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 deteriorated materially: revenue fell 52.3% year over year to $1.93M and swung from a $2.05M profit in Q1 2024 to a net loss of $0.31M, as lower deposit balances, reduced loan interest income under the amended PCCU split formula, and higher hosting/legal costs weighed on results .
• Adjusted EBITDA turned negative to $(1.23)M versus $1.09M in Q1 2024, driven by the new asset-hosting fee structure and reduced investment income from lower average deposits .
• Liquidity is the central risk: cash declined to $0.93M, working capital deficit widened to $6.72M, and management disclosed substantial doubt about going concern while pursuing financing and executing debt modifications (interest-only to 2027, maturity in 2030) .
• Structural changes are a double-edged catalyst: the Amended PCCU CAA eliminated indemnity and investment hosting fees but introduced an asset hosting fee and loan yield allocation split that reduced Q1 loan interest income; debt modification unlocks near-term cash flow yet heightens going-concern focus .
• No formal guidance was issued; consensus estimates were unavailable via S&P Global, limiting “beat/miss” analysis; investors should monitor Nasdaq compliance plan, deposit trends, and loan origination updates as near-term stock movers .

What Went Well and What Went Wrong

What Went Well

• Eliminated indemnity obligations to PCCU and removed investment hosting fees, structurally reducing certain risk and costs under the amended Commercial Alliance Agreement .
• Debt amendment pushed principal to interest-only through Jan 2027 and extended maturity to Oct 2030, improving near-term cash flow capacity and flexibility .
• Management highlighted continued sector leadership milestones (over $25B processed since inception) and a strategy to broaden solutions beyond compliance under new CEO leadership: “unlock over $6 million in cashflow... provide financial flexibility” .

What Went Wrong

• Revenue mix deteriorated sharply: account fees down 33.8%, investment income down 61.2%, and loan interest income down 67.0% year over year in Q1, primarily due to lower average deposit balances and the new loan yield allocation split with PCCU .
• Adjusted EBITDA declined to $(1.23)M as higher asset hosting fees and professional services (including $300,000 legal accrual) offset OpEx reductions; net cash from operations fell to $(1.14)M for the quarter .
• Liquidity and listing pressures increased: cash dropped to $0.93M, working capital deficit widened, management disclosed going-concern uncertainty, and Nasdaq notified non-compliance with equity requirements pending a plan submission .

Financial Results

Notes: Q4 2024 quarter-specific EPS and net income were not disclosed; Adjusted EBITDA was disclosed. Net income margin figures are derived from cited revenue and net income.

Actuals vs Estimates (Q1 2025):

*Consensus values retrieved from S&P Global; data unavailable.

Segment breakdown (Revenue):

KPIs:

Guidance Changes

Earnings Call Themes & Trends

Note: No Q1 2025 earnings call transcript was available in our document catalog; themes drawn from Q1 2025 10‑Q MD&A and prior quarter press releases .

Management Commentary

• “We successfully modified our debt obligation with Partner Colorado Credit Union… unlocking over $6 million in cashflow over the next two years… push the term… out to October 2030. This updated debt deal provides Safe Harbor with the financial flexibility needed to enhance and expand our overall business services as we execute on our business strategy throughout 2025 and beyond.” — CEO Terry Mendez .
• “One of the major reasons I joined Safe Harbor is the tremendous opportunity I see to build upon our strong foundation… evolve from a single compliance solution into a provider of a broad array of services focused on addressing the needs of our clients.” — CEO Terry Mendez .
• “Throughout 2024, the lending arm of Safe Harbor was a driving force… loan interest income was up 82% for the fourth quarter and 123% for the year… while remaining diligent in lower overall expenses.” — CEO Terry Mendez .

Q&A Highlights

• No Q1 2025 earnings call transcript was available; Q&A highlights cannot be retrieved from primary sources at this time (searched earnings-call-transcript catalog, none found for Q1 2025).

Estimates Context

• Wall Street consensus estimates (S&P Global/Capital IQ) for Q1 2025 EPS and revenue were unavailable; therefore we cannot determine a beat/miss vs consensus. Values retrieved from S&P Global.

Key Takeaways for Investors

• Liquidity risk is acute: cash of $0.93M with working capital deficit of $6.72M and disclosed substantial doubt about going concern; near-term financing and execution of the compliance plan with Nasdaq are pivotal .
• Structural shifts in economics: removal of indemnity and investment hosting fees is positive, but the new asset-hosting fee and loan yield split materially reduced loan interest income in Q1; investors should rebase run-rate revenue/EBITDA expectations .
• Deposit-dependent model sensitivity: average monthly ending deposits fell 28%, compressing investment income and fee revenue; watch deposit growth initiatives and partner bank expansion .
• Debt amendment improves cash flow runway (interest-only through Jan 2027) but elevates balance sheet reliance on PCCU; covenant and LTS ratio penalties add execution risk if deposit/loan mix drifts .
• Expense management continues but legal and hosting costs offset gains; sustained reductions in professional services and stabilization of hosting fees are needed to restore positive EBITDA .
• Leadership transitions (CEO new in 2025; CFO resignation) and board changes increase strategic flux; monitor updates to growth strategy and any capital raise or partnerships .
• Near-term trading catalysts: Nasdaq compliance plan outcome, financing announcements, deposit/loan origination updates, and any regulatory progress impacting cannabis banking access .