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GreenBox POS (GBOX)

Participants
Ben Errez Chairman and Chief Executive Officer
Ben Chung Chief Financial Officer
Chris Sakai Singular Research
Call transcript
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Operator

Good afternoon, ladies and gentlemen and welcome to the GreenBox POS Third 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 September 30, 2021 and will be filed with the SEC. is Ben Chairman, Chung. today Chief Errez call Officer, Financial our GreenBox Ben POS’ and On regarding and I from differ statements maybe uncertainties call call. those that made the like subject those on financial would to of actual today’s described and remind to a could webcast, in risks forward-looking cause prospects materially are industry everyone number that future and results and including to results refer list risks. Please the of filings company’s a for to regulatory associated will webcast days and available call for website XX this of replay next be on under the The the company’s the Events section. would to Errez, I time, this to over the Ben At company’s Chairman. like turn call the the is yours. Ben, floor

Ben Errez

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

of in growth. foundation third laying our phase XXXX next The instrumental the of was the for company’s quarter

in make set company to record. great continue We our strides again, which processing a volume, expanding

to some our grateful for ongoing for dedication highlights. lucrative continue shareholders their incredibly processing proud have Coyni. through are X $X the X the year-to-date Armed their the deploying reach with into execute $X.X months successfully crossed I and to on Rapid for teams to after Technology. market only salaries, of our am and like time billion a I’d is volume both also We over our upcoming the infrastructure The Generation digital mark scale well-positioned racing in and is expanding to spin-off Scale strong balance billion role strategy, are and GreenBox key sheet, play to banking operational payments cap including with building our we solutions acquisition to a globally. backbone the Coyni and And of adoption. while of key support. the financial as industry currency payment our walk recent GreenBox Stablecoin towards first

the over record processing the we traction and third achieved to continue company business of prior with XXx $XXX year transaction Generation our of is quarter volume. launch gain processing This million volume another last during nearly First, same in to the X. in quarter our transaction

any billion this As track of to we to in them these to for expect growth processing some particulars excess will our our and year. worth organically continue are $X per over discuss of that of billion prior fully we and announcements, through XXXX, both have billion of portfolios. In acquired soon guidance exceed portfolios contribute robust we $X.XX additional are portfolios. acquisitions processed to $X.X upcoming XXXX on noting we and of And It’s expect close volume.

One of which In our enable offer continue will go acquisitions we fortified assets, licensing on expansion and key solutions recently revolver and banking to achievements portion core scale will Coyni to plans. fund our to payment to capital to closing GreenBox businesses. the A was the pursue capital to proceeds also convertible ability million custody greatly notes strategic $XXX obtained for and adoption. our and the sheet a accretive financing, raising balance needed of

that acquisition enhance forward continue sharing blockchain. on Europe update review Quick revenue is business the experience technology GreenBox Transact developers investing solutions the processed payment Transact close able for will by and on the approval our drive to regulatory to continue infrastructure new are to the while this opportunities. portfolios our new we offer we that to to leading acquisition, get Finally, on in solutions and ongoing, were customers’ Europe

foreign obtained U.S host enhancing Transact GreenBox including will approval to also based in of value we and exchange accounts, clients. of into lines, This GreenBox domestic part leverage a the and Europe agreement, allows other our Europe. expand merchant licensing And clients. offering the accounts, to European prospective opportunity expand greatly way prospective As to offer we its to payment offerings also Europe service provide for to existing services

earn-out will on previously monthly is retained, that at processing compensation based being volume million management Transact discussed, least Europe $XXX month. As per have hurdles of

to Europe GreenBox X pleased and technology. suite. were Bank seamlessly He on to international and payment XXXX. product is Houghton and role in a to growth GreenBox brings technology leadership systems adding expect Territorial A during as Technology will acquisition drive an and a impressive for information accompanies experience skills infrastructure case expansion This essentially play will Officer. quick significant We ensure our opportunities the will exciting Generation update future similar strengthen believe nature. processing over is enterprises. reminder, for by study we in and of a the integrated of background team from American Samoa, strategies, the island. very generations Transact also of additional becoming for design, improvements processing Robert that of GreenBox, XX Chief with as We unlock is the Robert global entire and of mission-critical our operation His implementation years leading technology,

results provide transmission and Much XXXX. and this banking and credit processing, the in EBT including been made announcement has Bank since American and from card seeing begin of state-of-the-art money services, Samoa merchants debit to will consumer business We technology, processing. we early expect with and our Territorial processing initial customers, ATM processing

be recently towards Coyni, headquarters business. We the work our announced We corporate Miami. and eventual of diligently spin-off smart contract IPO would in its Stablecoin continue to

me branches a digital is why Let is the this an of Caribbean. that for explain supportive is South multicultural America with fin-tech as trends region attractive and Miami currency to companies hub chosen.

digital currency. their Additionally, a strong is Francis Mayor Bitcoin Suarez of proponent and

workers year this eligible of in to payments of acceptance and For city Bitcoin. tax example, the part to the conference their pay receive enabling in Bitcoin, hosted be is towards the Bitcoin moving city

Paul announce as of Levine Co-Founder to Executive Chief pleased very are and We Officer the Coyni.

aren’t years’ both technology of successful a payment in XX and you For with XXX versatile startup entrepreneur companies. and the those the and with business, is who he innovator Paul, experience familiar with Fortune

direct e-commerce portfolio, Planet the Payments over $Xbillion development management in for at processing in last acquiring decade, Payments of and the led of As – volume. cross-border he resulting President its and

we We IPO board. to and Paul to business fit beyond. from more confident on is that upstart to are the couldn’t him And lead excited very be have Coyni ideal our

also for the been Bank, increase Coyni few a now. short to order the we up revolver XXX capital $XX have has Signature of to backing And we several continue available backing it. infrastructure users million. it at Coyni a add as with We ramp for early plan capital, the using total in adopters, been who months will

registration the as discussed. previously we shortly. filed for be look And will Coyni dividend record expect Finally, first announce date the to to statements we

Officer, program we will so call continue I’d quarter with and our to Chung, key walk to our repurchase the Chief from XXXX. quarter highlights some turn through the time to On the do capital to through financial markets to front, time. we continue from of now Ben Financial the over share like third

Ben Chung

end continues be quarter. at healthy financially the the of GreenBox to Ben. a position in you, Thank third

payment to to the We and capital are acquisitions, revolver technology. develop blockchain-based additional acquisition the have a but our The very TEU to secure least that capital note not business us million additional last $XXX financing pleased accretive additional complete continue our fund Coyni, through allows to core convertible our Stablecoin offering. scale backs custodial

is are through point end I XXXX. out September quarter our we go for Before X calendar I results, to year am a like our XX, results. of ended go would the Therefore, third to going through now that company. XXXX months quarterly our I quarter end

year. continue the – growth due with processing increased volume throughout merchants growth our volume will solid continue to be have see We and to growth in processing revenue we our to

the revenue net million processing volume. the million an in for Our ended increase $XX.X X XX, September period, XXXX months year million of to $XX.X prior was same to due $X.X compared strong

revenue million is to in Our an to the processing prior million same quarter quarter, due million XXX%, $X.X third increase also of XXXX year had strong of quarter volume. which $X.X of primarily compared or $X.X net

months for to of XXXX volume a X September $X.X XX, for and XXXX $XXX increase processing and to an ended in We compared processing increase and months million in QX $XX billion. of volume million X XXXX $X.X QX $XXX quarter-to-quarter had QX million XXXX. XXXX, increase billion an approximately approximately million from was QX respectively, $XXX in Our ended

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

XXXX from absolutely see process to as portfolios our we acquisitions the category. is bad on-boarding be and thing expect profile QX to diversify are continued in complete a we the more higher necessarily the to business in volume, necessary and as order high processing high year. for to the revenue low can do for risk scheduled this margin reminder, volume net you As in results a This our shift mix to is We margin not margins portfolio.

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

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

third margin quarter was improved margin to quarter – XX% of same quarter of revenue XX% gross in primarily compared gross higher and in the same current to year. efficiency due year of quarter Our to prior the compared the the prior in XXXX net quarter

of expect we year. mentioned, between of XX% and previously throughout the XX% As hold the rest to gross margin

expenses by to business organizations normal like will now non-cash the expenses. professional in. with not directly and small are point about again, services, expenses categories: that net our compensation margin which our expenses correlated of include expenses. Gateway revenue research our payroll, number depreciation. from marketing, scalability operating would sales a our development, employees are categorize stock general expenses our negotiated our would the for the and to Once and commission fees. ISOs, while include to We of expenses for because including and primarily we driven expenses, – revenue, and operating I into technology non-cash are operating be Our operating out two employees operating of expenses discuss our Normal operating operating structure our due and with I like primarily independent

increase $X.X to due development expense increase related in headcount fees XXXX million and for an Our and token million and related normal of development, operating payroll $X.X third compliance. XXXX professional in respectively, primarily million increase and $X.X technology to the research was to related of to quarter

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

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

was million to of discount. offset other $X.X The and quarter of Our expense $XX,XXX related other the prior of million debt liability quarter in same by expenses income year third to in due quarter to $X.X same of fair approximately year. expense value or the primarily interest derivative partially other derivative changes for the expense compared expense prior XXXX was in

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

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

net September increase $XX.X to The was $X.X prior be Our stock-based loss loss to million provision. in in loss compared well a period loss QX for compensation income, overall the XXXX ended of $X.X compared months net the the as million third net non-GAAP can tax net of in million higher $X.X XX, attributable X to same XXXX was for year. XXXX. of and a for as employees services million quarter Adjusted measure

in reconciliation or release find earnings our can SEC. You XX-Q filed with press the

payables year. September growth turn Our quarter well to position negative flows for merchants. future from We had primarily cash XX, million flows current the balance ended operating believe the at will remain Ben due same our period to for months now prior was – compared and negative $XX.X quarter. the outlook. to to cash will is I cash of from strong of activities and $XX.X timing Overall, Errez, and profitability. we in was a of negative call positioned extremely the we our settlement for financial flows, cash million $X.X end of XXXX back million of The operating Gateways receivables the X

Ben Errez

Thank you, Ben.

have successful $XXX by excited focused footprint that execution pieces lucrative our in are tremendous and payments demonstrated are deployment growth secure together mission and the very trillion We of market. coming remain stage ahead our of The and strategy. a opportunities digital in lie technology our short to on is period, quickly. our We set

closing, continue year. income We grow $X processing initial adjusted and of $X.XX customers to expect our revenues and expect volumes now million our guidance at the profile we $XX XXXX on-boarding exceed timing Due for of risk to billion. net and acquisition and XXXX the of million of and least

for you year With to and the billion look XXXX, be Thank for Operator? your As turn will processing Q&A I for that, operator support to out call begin and today’s of $X.X interest least listening in ongoing over to to expect we completion assuming GreenBox. it acquisitions. we to session. volumes the the at

Operator

we And caller, take Instructions] from Research. Singular [Operator will our Chris Sakai first

Your open. line is

Chris Sakai

Hi, couple questions, I a Ben. is guess. of There

Regarding GenX? that between ChargeSavvy, break million out segments, you and the processing – can if you $XXX volume different

Ben Errez

on front we me wanted you Actually Ben comment and if Chung of information that have in to don’t that.

Ben Chung

No, I me information in front don’t any of have either.

Chris Sakai

as And could you as how close recent to processing then an are that far acquisition great. enhance Okay, financing, your volume? the

Ben Errez

Okay.

have context material, in and to the will non-public of I that So, address the information. public

the Europe and of So, we Transact in already close we discussed to December. have middle Transact Europe anticipate acquisition

yet market the I And you $XXX of that completed. substantiating raise our the this to excited to price this accretive just have larger that we of shareholders amazingly is we $XX are for anticipate capital. its approximately excess a we for stipulated interest disclosed, GreenBox, that price going share a is XX% mentioned. to portfolio the that the the that licenses of raise billion terms in annually. will providing cap at acquisitions market paid are be convert of at set and remind we of the by will also processing and I time operations are that acquisition our closing excess same enhance two additional the an have not significantly to call have that they I with this additional are a And excess about market a and million. inclusive Both opportunities We by been that of just And very that in in of company $X than in

Some used of it will be for these acquisitions.

the the reserve Some adoption, call, of Coyni will rest in as it company. and discussed will enhance the kept this for be in

Chris Sakai

several Okay, alright. Do idea, any like know provide concerned, launch as been been it’s delayed us color Thanks. Coyni any And it I then that? seems can is as the months. have or it’s – about you you far

Ben Errez

Sure.

Coyni the remains So, deployment on track.

or an anticipate that with change it. launch, the as in was stated we beginning accompany the the dividend XXXX, no associated So, that IPO There before. of in in launch we or procedure, the will have technology

application terms capabilities. PXP of technology, it’s before like platform of peer-to-peer an and be in phase on, shortly the Coyni to to the we released transactions. them And transactional with or the and And the one shortly. said the very end least of covering crypto the peer-to-peer release the NSP as ability of technology a very, also later first participate a The with of I In year, release as two very anticipate as fiat Venmo at first will phases. this application done the

Chris Sakai

and anything from great. expect City provide color guess, we that Coyni. you of Can the there that? I Is any Miami Okay, on could

Ben Errez

been one GreenBox. Miami governing essentially the Board of same established. Directors has the The of office in as is The already Coyni

During that location Levine. of Avenue this and I discussed and the capital Paul we Coyni, guess, CEO is I hired crypto Stablecoin city Co-Founder Miami Main is for location, a Brickell specific new USA. Street, the The great the is call for crypto U.S. launch. a

example. for are Our neighbors next Blockchain.com door

in of and and capital in Coyni the Miami of of for deploying looking that will the markets company. very own all the its operating now IPO expansion see also by commercial the Coyni forward GreenBox post via dramatic shareholders both the with Stablecoin. that for of GreenBox adoption way are I inherit by right on and We the to way get-go And is off dividend right utilization out laid the from the opportunities when it

Chris Sakai

Okay, great. I Ben. along. Thanks, will pass it

Ben Errez

Thanks Chris.

Operator

it line Instructions] And has looks opened question. [Operator like follow-up a Chris again. your Chris, is

Chris Sakai

Right.

any provide any Okay. label banking, – on opportunities Ben, update can there? any you white

Ben Errez

white The deployment for think since banking its material we the a label banking of is the expanding oversight, We come, its white oversight, of label the part with stable that by are or such industry of by is of has its are dramatically. incredible. white that anticipation offered platform, the custodial transaction. push Coyni initial of status. time. Its transactional this Both launched in regulatory we at several because banking. adoption partners architecture dramatic Not think compliance properties Coyni volatile compliance coin capabilities launch will of label are way banking for towards considering especially yet of and properties the And today. very these in reversibility any its the including much example, banking not deeper

we very GreenBox and ‘XX. beginning on both at next for I of can end we this am of revisit Coyni sure front. So, quarter banking something the adoption anticipate the first speedy quarter that is

Chris Sakai

Okay. on color Any or updates Pfizer? on Thanks.

Ben Errez

Yes.

encoded NASDAQ specific the disclosure capabilities for integration. PR is we that facilitator by both as step, and PaySec, also Pfizer Pfizer. the which this integration final with payment very to have deploying dedicated we is see And We includes the of right So, specific on coming GreenBox imminent. keys And to final license a passed the the review of and for SEC way push and will network as shortly.

Chris Sakai

Okay, timeline there? any

Ben Errez

I anticipate completed but don’t year. being the have well a end before timeline, this the I of

Chris Sakai

one, you Okay, is how guess there – any great. share And are for the repurchase have – last are Do you shares? still – going, repurchasing is you I me. plan

Ben Errez

have dollars on anticipate continuing additional that. that dedicated do we of million several an for We And yes, allocation front.

Chris Sakai

Okay, thanks great. Well, Ben.

Ben Errez

Thank you.

Operator

further And Errez Mr. turn Instructions] to it for to [Operator remarks. no closing back as Ben would I questions, we have over like

Ben Errez

any progress Thank our you to for of and also look We would you forward growth. like to I our answer please to unable would you If were joining Group. you, more today. Investor continuing assist. this we your update our thank Thank to earnings firm happy call ongoing all. conference MZ We all Relations be out call, to operator. on reach of questions than to on

Operator

that And you Thank for our participation. for does your conclude call today.

You may now disconnect.