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GreenBox POS (GBOX)

Participants
Ben Errez Chairman
Ben Chung Chief Financial Officer
Chris Sakai Singular Research
Jamie DeYoung Goudy Park Capital
Call transcript
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Operator

Good afternoon, ladies and gentlemen and welcome to the GreenBox POS Second Quarter 2021 Earnings Conference Call.

During today's presentation, all parties will be in a listen-only mode.

Following management remarks, the conference will be open for questions. The earnings press release accompanying this conference call was issued at the close of the market today. The quarterly report, which includes the company's results of operations for the quarter ended June 30 2021, was filed with the SEC today. is Ben Chairman, Chung. today Chief Errez call Officer, Financial our GreenBox Ben POS's and On future industry I'd from differ made be uncertainties and call. regarding that on the to subject those today's results like remind of actual call described webcasts, everyone to a could including in risks and cause are materially forward-looking, prospects that number statements financial may and and those to results refer list risks. Please the of filings company's a for to regulatory associated will webcast company's and available call for Events the this of replay on be webcast section. replay The the under At this over the time, I'd Ben Chairman. call like turn company's to the Errez, is floor the yours. Ben,

Ben Errez

Thank you, I'd GreenBox today. you operator, us to and call. thank POS second for financial joining to XXXX welcome all like quarter you conference results

was for a successful XXXX and of GreenBox. productive quarter very quarter second The

disrupt expand portfolio, execution thank We and through technology, through tireless key move highlights work Stablecoin progress transaction with I record their like long-term another forward and several merchant our core over million I these development. our processing efforts smart-contract XXX landscape to new to Blockchain payment and the would in our evolving volume. we as continue smart-contract towards business, to market our our deployed for are rapidly demonstrating Token GreenBox processing team take strategy. our business continued like would major achieve announcements, We technology. some and made global and of of walk growing the fundamental operational the setting volume to quarter,

GenX pave for the which onboarding the first of in speaks XXXX. to of was merchant improves of in ChargeSavvy scale volume of which also in a the efficiency portfolio closed July. impact excludes this processing deployment quarter dramatically This way of and this the half first reminder, the large the a As year, successful acquisition,

quarter We growth long-term a act strategy. for also initiatives several as should strategic visualizing announced that this roadmap our

third, processing Solutions, Northeast the retail to announcing pending Northeast the The acquisition, an a volume Technology of Europe. annually, added we particularly which Box is in be BIN coveted it ChargeSavvy important, Green bank. flexibility brings quickly. Services as acquiring bringing Merchant to processing acquisition volumes us as $XXX ChargeSavvy robust and risk a volume while BIN two Services, act Transact Merchant will and managing large estimated POS greater on million in completed of much the business, while book and First, and processing allow portfolio allows

within UnionPay with that. the Transact China to We into for Green also expected Box the entered for completed top into XX pending for days. a and This acquisition which strategic and MOU be binding by principal XX completed a the Europe, leveraging membership acquisition principal of of expected MasterCard, European approval member Transact to pathway is of a regulatory to is Visa, rapid worldwide expansion Europe's of membership provide market of level on is

the strategy. adoption smart and One Token and will to be region. will The to of to processing will quarter adoption showcase a of for form GreenBox contract Samoa, which members blockchain launch ultimately, will Given a peer an peer payments related key right opportunity important the our supports on also bank that due for believe ecosystem. player services, card loop of smart-contract support GreenBox our on transfers, The growth be transaction growth American adoption island Coyni a as financial hurdles, expect we based and creative impact in of ATM, compensation entire great recognized remains ecosystem, we technologies the technology position from the be and acquisition partnership Europe's electronic of we closed the GreenBox be dependent demonstration to island's Wirecard, is the volume services be is a Beside will Samoa. be a financial as we partnerships payments, be to banking, the believe where acquisitions, proof GreenBox an a solution of This that issuance departure The to void with paired Bank in large important objective this the Territorial concept concept initial our services. possibility merchant of and component ledger, our fully American licensing to of a proof of payment in of drive will and that customized such is or with processing key to a assets would banking -- through financial technology. expected the Global volume are provider core of management of Stablecoin. pleased ultimately fully space also our systems. expansion the to

can how Another technology is development our opportune partnership applied example be an of through partnerships. joint

assets visual the an will isMedia interface payment solutions As will provide that an user isMedia the platform and gateways the trading. for for platform NFT while example, experience. payment user develops blockchain settlement platform GreenBox better NFT build

see on and these demand create for also of blockchain both partnerships coins. our to types expand more technology, expect can You that of the processing

excited growth person-to-person consumers instantly on allowing be adoption architecture. is set I tested to pilot adopters our transaction As and payments lies are early for Ultimately, key our transfers technology We quarter shortly COYNI blockchain and our and COYNI. Currently contract second launch the we money deposited does transactions with Bank. to $X Stablecoin custodial test Signature we are secure quickly. we into positioned the during significant technology. business of COYNI BXC mentioned transact to being double adoption announced for BXB ledger, call, is week the most to businesses be by and that Person-to-person about deployment and and our as released spinoff Token well ahead excited are achieve the Brenda our drivers believe we’re custodial million on last here. already we smart internally opportunity the

plans initiatives traded provide strategic separate this to to how acquisitions context discussed the we of a in for platform coin our to All company. build and continue partnerships, intend spinoff addition the into publicly

the options evaluating increase the needed to several scaling also the We rapid revolver our for funding of are business. of capital

an provide also effectively a capital index platform Russell still is that spinoff effect of of special IPO stock been shortly, a they’re a coin I'd GreenBox and to turn based – like Chung the this and and second will to from Financial in markets series XXXX has conferences our financial the and the towards program Ben update Officer, over on June. the the -- on We bye to front base, to an that our We We in added microcap buyback the on plan remain of the share announced to in our our dividends of key year. hosting of communicate call embracing vision. walk shareholder through quarter now some investment conference attending calls community highlights XXXX. more the end committed to Chief strategic

Ben Chung

for Thank you Ben that.

customers, people, our with Token capital as has enhancements I helped of new company for Just mentioned of This of the raised continuous and in our this earnings technology. amount through approximately including reminder, a of our working capital technology, offering expedite net year, as the our process February prior $XX importantly, which substantial on capital capital raise new the with our us million. us call, to of but hire rollout brought talented more Token onboarding development including tremendously

quarterly would volume We with calendar now to second results. we a growth are therefore I'm quarter end had have XXXX -- throughout we in out our XXth, to continue our merchants months go our Before processing volume through year and revenue XXXX. I net the net increased three profit is to company, go like quarter I will year. end processing to tremendous going the growth through point our due our that results, of June for a ended

six increase the to million, XXXX months ended Our processing in volume. of due million million period, $X.X was prior strong to XX, $X.X an same June compared $XX.X

second Our quarter, the to $X.X volume. prior $X.X primarily same strong quarter a very compared million, revenue $X.X an to processing increase million million, strong XXXX year is with which of in quarter of due quarter net of had

months for XXXX approximately, volume three ended June and processing ended million $XXX months million, six respectively. Our and $XXX was XX,

to comparing to $XX million $XXX XXXX of XXXX increase $XXX quarter-to-quarter, processing and increase an in QX XXXX, have processing in XXXX. million QX from We volume in volume XQ million to QX

continued expect processing the in growth quarter-to-quarter throughout We volume the year. the of rest

the increase million profit quarter XXXX to million for $X.X was in $X.X of the second an $X.X gross of year, Our compared quarter prior million. same

million For the our an June ended compared $X.X $X.X the profit XXXX $X.X in to period, same increase was million. months six of million gross XX,

quarter compared was net prior primarily improved of second the in the margins to year. quarter due same and same quarter point compared margin growth higher the Our the XX% -- XXXX in efficiency current XX% revenues gross of prior year, seven in to of to quarter

XX% year. hold of and between throughout XX% gross We expect to margin rest of the

non-cash we our because of them and revenue, business structure from I negotiated operating two about expenses margin like Our operating which to about are fees. revenues that put the into small in. now operating are when point number like will net commission our to and employees, directly due are independent discuss with operating would out gateway our of categories; correlated expenses, and our Furthermore, primarily our talked scalability I sales importantly, would organizations expenses primarily normal technology, to more I expenses not and would operating like our be our driven expenses. of to our I by ISOs, with

So payroll; and and first professional general expenses category expenses. includes; development; of marketing; our normal research operating

While for compensation and depreciation. second the employees, for stock services, expenses category includes; including

of increase XXXX, related to count respectively, research to million $X.X and to quarter compliance. of expense in normal Token in payroll Technology, to Our primarily operating $X.X was million and the development an XXXX head increase professional related and related million for second increase and fees due $X.X

operating and non-cash expense expenses, related for primarily compensation employees stock services. to Our

the from of like ended million, If income expect are months expenses, $X.X prior in Our second services our depreciation in the from employees June going quarter through million We of net same to XXXX for of $X.X for in other we XXXX, six incur stock our had would – year. XX, in category. operations operating for quarter added million quarter breakeven the services and go and $X.X $X.X second loss and our operations million not non-cash for ended charges prior as back now such the a same which loss million I we've the XXXX, compensation to are year, period and compared $X.X expenses expense prior the quarter like to year. of compensation same of and for the forward. non-recurring expense

to other Our $X.X The non-cash year. income same or million other extinguishment compared debt. million due was quarter gain quarter value of an the in none year, of of changes XXXX other income quarter to in derivative of $X.X to income fair in prior gain and liability, due same second was of for approximately expense the prior the primarily incomes convertible and

expenses June expense compared $X.X related for $X.X the related income expense, which and ended the for of June $X.X $X.X liability was debt discount, Our of settlement XX, XXXX million, six to other months merchant XXXX. XX, million million million interest months other $X.X in six was to million to ended

XXXX, loss overall was million $X.X the of quarter income $X.X compared to net net of for Our million the prior same year. second in quarter

period million loss overall the months six to XX, $X.X same in year. for net net was the loss of XXXX ended $XX.X Our million compared June prior

year, in a the the million $X.X was of XXXX million, $X.X second same to a loss EBITDA QX prior compared adjusted measures non-GAAP quarter for million in quarter XXXX. $X.X of and Our

to in non-GAAP reconciliation earnings can adjustment. related press the release You our

current I'll in of believe flows positive Our We end period outlook. well June and for million million prior we was our our strong, same to $XX.X the call is cash back due future timing for and growth to year. to the financial cash profitability. negative flows ended months Ben of the position gateways and the position Errez now merchants. $XX.X compared turn at operating for a had negative we from operating of Overall, remain of balance quarter. expense the XX, of XXXX settlement million $X.X was flows, primarily cash The six

Ben Errez

you, Thank Ben.

paysec to about again everyone portfolio I license I XXXX Before order requirements. in would strategic GreenBox to remark maintain and like on-boarding with for compliance remind issuers credit on outlook, our card

prior processing portfolio acquisitions and predominantly our times does we least volumes. impact of accelerated need would change onboarding. not has revenue growth $XX or we at provide launch This onboard, volume expect financial that at medium results outlook, platform impacted ultra risk half processing be are the mentioned To projected, given our our our the XXXX million, leading XXXX gross the million. acquisitions than an and This full the or and first increasing and of our low year updated any net we to $XX in trajectory stablecoin adjusted portfolio from to During on-boarding, EBITDA onto income to outlook. have half risk revenues to low higher closed, does $X.XX first not include of billion our today. that previously This of low

As we our dividend to earlier to SpinCo. the this release, of special afternoon press delay Coyni announced we the date series record decided have our in first related

The first date days recorded at be rather implementation. will the announce first we XX, not prior its Monday, August to on record calendar least date XX will

record and continue special effect receipt on we our and of forward shareholders. Greenbox continue analysis first series, a on mentioned diligently we exciting dividend to that And to create in that, of related regulatory begin factors value approval As the to release, Q&A very our date seek and the long-term months call. I this progress This POS. while dividend the required turn execute forward-looking approval the we press of session continuing the operator With sustainable timing could the the to regulatory date strategies the Operator? series. statements special is our among the to for ahead I’ll is strategy as make also to to over of for time the our the record in look consent,

Operator

much. very Research. our with comes question from And question. [Operator Sakai proceed you Chris of Singular Instructions] your Thank Please first

Chris Sakai

Ben. Hi,

Ben Errez

Hello, Chris.

Chris Sakai

share guess of Europe. acquisition Transact with question how a on you sort -- any have much this guess the the I bring might I idea Do future? could you on of – volume any got processing color or I in

Ben Errez

Yes.

in an is levels, But transactional that likes void successful the Europe Europe. Transact also Wirecard of Wirecards. it a broadband to license, positions on So execute Greenbox not us only on looking acquisition of multiple demise of all capsulate in Europe the in -- of I desperately positioning is the for volumes of So, volumes home are a to these still and that is right? because

So, as would and individuals, will the upside puts competitor. beginning on as of that the same order processing And in of infrastructure, others and volume that and was year way million, IPO. towards Coyni with it’s a And new operators business Coyni that through Europe like $X very in We a alike amount billion and and transactional This depends of on definitely primary geography. such all billion question. be at just the the the the platform money $XXX the about reminding Circle acquisition for $X.X It’s per same Stablecoin from Transact doing any to successful as volumes. similar is of this month just so turnout between per IPO proceeds and to also, of ability just structured month I a $XXX IPO USDC. at the Thanks new in majority enterprise this to be businesses of individuals essentially of to GreenBox November across magnitude. Chris million of in you the position on direct as is a order positions very IPO magnitude competitor between in value, Coyni [Indiscernible] plan new an call transfer of the Coyni a any to Venmo Coyni

Chris Sakai

structured, I Okay. a $XXX the amount Great. month. ways is minimum earn-out -- To go so guess, is into the per million

Ben Errez

Right.

Chris Sakai

the the What the million. $XXX are that, at of chances making least

Ben Errez

million new completion in don't this onboarding numbers I into have to backlog of The of month. further per chances excess $XXX of specific it’s awaiting very good. transaction get business greater want are that than but an the We already that.

Chris Sakai

Okay.

I guess you proto receive Samoa? start Okay. I Great. guess, American timeline on And from volume when do you any have lastly, to processing

Ben Errez

But a it’s between integration not is American large individuals. Yes. also year. but technology. of GDP and such of of large Coyni transactions Samoa from that system, enough. remember GDP in the transfer type Greenbox of approximately phases to that the million as is the contribute Samoa that It’s very The installation American not benefits $XXX do final per

an So exposure we about anticipate volumes. $X per in billion year to

solution deal is systems a to entire countries, the governments, the technology about GreenBox solutions of ecosystem closed a for provide However, a proof-of-concept for islands. big doing entire it's loop complete that

and where in the So collaboration, Samoa collaboration will we conversation. American this is see this announced this win in increase primary within a will be separate and

Chris Sakai

Do you have view? countries any your or other like this in islands

Ben Errez

to of type the It the a a a reduces It to will for anticipate such of we for – that Samoa the makes yet. other efficient. more across cost lead extremely consumers. lot a it's same the in lot American communities And the economy. board. meaningful solutions. Not the But execution in local chair, It's welcome a it change need successful it's

of perfect storm a looking adoption forward the execution Samoa. much to of potential, Sort very American in

Chris Sakai

Okay, great. Well, thanks Ben. for that

Ben Errez

Appreciate Yes. it. Chris. Thanks,

Operator

DeYoung question next of from our with And line comes of the Park proceed question. Capital. your Please Goudy Jamie

Jamie DeYoung

Congratulations If came improvement quarter burn Good mistaken, X.X results. first I'm cash the afternoon. from you. quarter. the on like continued not in the operating second to in XX.XX in the Thank looks down

was accelerate of make do that as the see. burn likely that that expect year, will can business? to So you investments in some in nice you you to think second – the or further half cash the Was continue

Ben Errez

let then comments I Thanks for Ben this, the will question, to that. on Jamie. top of C initial my take add tack on I'm going the and

Ben Chung

spending, our – our to is quarter-to-quarter. of increasing cash expect in six quarter-to-quarter, we net volume So flatten spend, kind increasing months cash profits were because actually net our for the out next we

you mean the members, But and for key six development primarily have hiring on XX.X volume going might And the I reason our flows. The some merchants. next substantiate cash it's increase our down million. have if if with people, cash And our we then, go down of our and our gateways that now through settlement our by flows think an acquisitions the is primarily in timing our really But net don't and is about cash receivables went have I its the cash is centers, of where capital significantly. to went. talented million, spending and we from to our know you of – be gateways compliance. going is when million. to in below XX the why fact, and months, we that's I to of processing look don't a some going research significant and working net spendings million payable what hire kind Right Our XX that's and XX which think at

Jamie DeYoung

But core essentially, correct? the Understood. to business, a there's capital to ongoing of the on plenty business, the need fund for cash sheet would the not of operations core balance be raise

Ben Chung

business, Core that’s correct.

You are correct.

Ben Errez

up add capital the need results raising. that we although for taking not plan operations, We opportunity. the off spin Jimmy would coiny particular this do that from of will any and on set situation advantage I

thought raise see capital, share the my at I prices previous will equity entertain raising it shares will not like equity not I were capital but level or additional We would as the at commitment unfairly company the we of And repeat that that, this of the level. we to seller value.

and buying, to we as In we are unfairly stock should buyers remains value. dramatically call increase of I fact, it the our it intend

Ben Chung

and be Sure just would north not in company clarify, the strong million of and equity prices. also our the at continue not only these of to company and bring X to finance, advocates shares

your stock the own your of sellers in lockup be coming wouldn't expires certainly weeks. when You

Ben Errez

any We’re and is not planning no that even at insider looking sales.

our planning all that is for fact, is This us term in In something particular. part we're long of accumulating.

majority As the in the GreenBox very future. I and to not with change years very five company equity. we we past owners. co-founders This changed, are be a has not tight hard that shares Fredi near the of the intend and over the We've share know way to worked is and strategy of own stay you the majority will

Jamie DeYoung

update is, still ongoing? been integration on Has for that the with relationship question that Pfizer? do is that have you last any completed, One is or me

Ben Errez

begin been announce So, estimate able joint be platform jointly the far. launch towards with at the But finally of of has know Pfizer. scale my processing the the the the see longer this tunnel. beast, personal that I we anticipated we large this taking so the to light and that, end on formally is month, the nature and that’s of end platform will than of the

push formally this, and for integration weeks So I scale -- announce we begin. say, us give three said, we'll And will continue completion. as and processing the announce large

Jamie DeYoung

the thanks Okay, great. for Well, on the continued congratulations update, and progress.

Ben Errez

support you, appreciate I and company. the and commitment Jamie, Thank your of

Operator

Thank remarks. question-and-answer Mr. back Instructions] questions session. And our I appear At concludes don't closing further over Ben there This any you. call go queue. turn the be now ahead. for in this would time, to Errez to to like the [Operator Please,

Ben Errez

for today. growth. to continuing we Group to answer any basis our who conference joining Thank all you, of like an to reach of please update on With for were conclude on your to earning our more our be forward to We Operator. would I you, If would you firm progress all session thank Thank call this, to IR look you and you out MZ ongoing than today. participating. operator. questions, I assist. Thank happy unable

Operator

a please everyone. conclude Thank participation does today's ask the day, much. your that for you of you you great your And lines. Have very rest presentation. We disconnect thank do and that