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GreenBox POS (GBOX)

Participants
Ben Errez Chairman
Ben Chung Chief Financial Officer
Ben Piggott EF Hutton
Howard Halpern Taglich Brothers
Chris Sakai Singular Research
Call transcript
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Operator

Good afternoon, ladies and gentlemen and welcome to the GreenBox POS Fourth Quarter and Full Year 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 annual report, which includes the company’s results of operations for the year ended December 31, 2021 was filed with the SEC today. is Ben Chairman, Chung. today Chief Errez call Officer, Financial our GreenBox Ben POS’ and On future industry I’d those materially made subject that and regarding could on call. to to described today’s results like remind risks results call in webcast, everyone a number cause including the and and actual are from forward-looking prospects that of statements financial maybe and uncertainties those differ to of to the filings associated company’s risks. list refer Please for regulatory a and webcast XX call be available company’s The under next this replay section. will for the days website of the on the Events At turn Ben to this would time, Chairman. I like the conference company’s the to over Errez, is Ben, yours. the floor

Ben Errez

and quarter record was everyone for the you year today year call. us our and GreenBox. for XXXX Hello, setting fourth for XXXX thank joining full financial results

expand We it which volume, payment fiscal year continue in and XXXX. processing of processing makes billion $X processed volume rapidly our to approximately transaction about the XXx footprint

KPI volume technology, As focal our we’ve our in acquisitions. to processing growth, is previously, market of technology, point. remain discussed our share is people, our infrastructure our development, and of scalability good investment and It and ability business indicative the compliant primary quality currently

record representing XXX% year achieved during also $XX.X of to revenue. when XXXX revenues million, We of tremendous XXXX compared company over growth full

we of our of licensing to a platform allow and and a way a last walk working vital strategy. volume is As merchant updates of key purchase setback achieve provide several assets, quality our and on They towards. objectives With operational To year. through to our portfolios, quickly adding processing that Acquisitions growth are and technology. to through to I’d of some obtain that, of key us three and was have we technology no locations. both our provide capabilities enable and In service like domestically verticals scale out highlights team major announced us diligently our on Transact such been Northeast Europe. XXXX ChargeSavvy Merchant core talented that a impressive the generation branch reminder, Services, in acquisitions, more of deployed geographic at January and with and onset globally including so XXXX, demonstration part to the

successfully have operations. GreenBox acquisitions been two the completed and first integrated with The

As success, after quarter efficiencies. and the history in just an their technology indication ChargeSavvy improved as of recorded months XX result integration six its of best a year

TEU a natural made just Coyni capitalize infrastructure solutions from based the and million. customized is €XX original our a price purchase acquisition, there synergy can complement the regarding reduced purchase significant agreement in on credibility it to each achieve with Regarding globally for a process, GreenBox, expansions opens I’m TEU stone regions. Transact as excited us fintech. report TEU us lengthy Europe, we of for a from approval Bank for and purchase GreenBox markets premier an global both with or to establishing are doors It given important Transact proceed after review adoption, and other on, technology. ultimately combined Pacific receiving licenses that believe of with after we incredibly that Asia and gives the to Europe us stepping drive closing. Europe powerful into We a final that payment Bulgaria, the further was An was is and in million as the €XX earnings. to and which filing to amendment revenue X-K the of suite

line confident couple the While will the this we finish days. in of cross are yet, not completed just next

our as cost opportunity more debit River partnership launch to a payment bulk with a thorough this offers $XXX transaction So we by would vast for $XX credit a company, cards. a time. financial into massive and expensive which to for last in Since take it GreenBox is of end-to-end is strategic week. We grow million accounts, execution can announce very congratulate technology initiative. ACH initial growth such a of merchants entered financial market more excess merchants abilities Bank, kind for this offering to towards I launched clients by its service, this over solutions. that solution. driving. year, towards vertically profitable ACH integral expect is processing part low vertical banking significantly universe of while Cross GreenBox mode. a new Cross including and to initiative, of technology partnerships can licensing that companies becoming the to us completion first a lucrative opportunity this expands infrastructure us River dollar opportunity single is of us Earlier we alternative closes a This a per continue very GreenBox, that month for announced existing services, commitments We multimillion And our Establishing offer banking-as-a-service The strategy. forward of integrated a we’ve will step as recently stream truly also an booked like partnership in with million handedly following revenue already tech is financial then process respected River GreenBox. gap GreenBox merchants. to well evaluation Cross partnership the raising the This the potential allowing leading

our into our generation it. it’ll as for Wei expect XXXX early for Ben of from will extensive call I While lead and of revenue Operating is Recently, welcome Chief we innings well composition Through New of Min as efficiencies strengthen us we on at to in this growing particularly in management Min the as a over substantial team. Wei great things Q&A. given new basis, for which our And continue we the available the the Officer. to end Min and be background global plans. us. companies, technology Year, operational has expansion and believe this time, critical partnership, a

appointment Reynolds these as highly announced most raise is the of record. as growth program we leadings, transformational our shareholders decades to global of Jacqueline right of with brand of our accelerated Chief and class approval brands marketing coveted found million. to our initiative January, confidence as are our marketer. the in that with agency global agency share experience our of leader ability to opportunity some again GreenBox commitment advertising an the INNOCEAN Officer. Jacqueline to also She’s set in we out we award-winning execute demonstrated with respected front fit the and There recently Marketing $XX awareness and a In world once us aspirations, the Given of up an appointment advertising branding spearheading branding perfect of find on of repurchase to the and

our will strategy this we feel when continue to prudent. stock Our it commitment unwavering, and to utilize we defend is is

about details our found Additional not stablecoin platform. XX-K filing. digital payment in purchase Last, and plan this stock regarding certainly let’s can talk but least, be Coyni, our

weeks, walk the most XXX% aforementioned discussion, the a I’ve a well our from April. the of the at we Chung way After committed several We a umbrella. compliance, that the parameters Chief The to the through turn And testing we believe we Financial grow acquisitions of to lay execute us perhaps discussed results. same much the shareholders least, business I’ll stations. on Ben end Coyni. our by path our of key have in And All GreenBox Coyni and initially the to discussed gone a we Officer, the the sales financial growth. floor foundation as loyal the remain Ben, app as the items, There and make advantages the dividend such leverage for Coyni through deploy app at app three can yours. beta has is internal over as now are effectively auditors as to before. rewarding available on us for vigorous more and is call adoption for by plan Coyni drive of few success store effective under in to to our its

Ben Chung

our for of filing, on website the EBITDA you calculation referring to to of full and Thank refer be for you, our adjusted non-GAAP press in Please our in limit under key other measures. A can portion to I MD&A, find Ben. that other after available measures, note release non-GAAP and financials. our XX-K distributed closes available XX-K will in adjusted Filings. EBITDA market SEC please the be is results today. the I’ll which my is which that filing breakdown will And

a of marketing ended strategic and advanced an merchant expanding product volume with a billion to year $X.XX XX, year payment in result the transaction increase XX, $X.X result blockchain expanded greater offerings our Our from the expansion XXXX profit solutions, increase was and $XX.X increase in of total net the in focus of for year was larger of network XXXX our an revenue sales merchants, The million base and combined XXXX. on our to increase increase of of due processing million for ledger-based increased customer XX% by XXX% net and or net XXXX. million efforts, for average million growth processing growth from as December or factors, merchant million including or acquisition $XX.X prior $XX.X volume a strategic in revenue. the strategy. – to $XX.X ISO to gross revenue, compared XXXX due was XXX.X% an an I’m sorry, The XXXX, volume and partnership number ended XX% as the of full primarily of December million $X.X

and decreased efficiency, into processing while operating cost include services, non-cash research of operating operating expenses expenses lower scale for two non-cash operating fees compensation categories, due We – scale. significantly would our expense operating marketing, cost categorize professional depreciation. gateways normal increased margins greater expenses. I include for expenses, of to and Our like cost employees expenses. and increased operating general to and utilization expenses including discuss our now and payroll, to expenses stock development, Normal

due increase bad XXXX general and expenses growth. our million administrative operations expense for improve sales of $XX.X respectively, also and but an to expense, Our and heavy related operating research full in support our and year and was an million, development debt technology headcount related XXXX to $XX.X to and to million to investment primarily $X.X increase normal in

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

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

other were for XXXX $X.X in compared Our million million year approximately total the $X.X other full year. expense of to prior income

discount million debt finance to million was and growth fair and of $X.X loss diligence sustained to for non-GAAP due settlement $X.XX $X.X associated other operating development, measure related related from and of areas net compensation $X.X a such merchant and well basic income, derivative offset million of share heavy expense $X.X changes $X.X in other million, a services during net investment XXXX share increase per cost million net by expenses. expenses for interest per million, as in loss was write-offs, bad gain net diluted research and of liability in Adjusted of expense of income stock-based our Our or derivative due of to of in income. XXXX. liability debt $X.X general a $XX.X consisted as increase with for loss expenses interest The million. million in sales expense staff, company The $X.X XXXX primarily or $X.X to administrative increase a million, as in diluted and of marketing, of basic net of compared $X.XX valley acquisitions,

can You earnings reconciliation press our in a release. find

back call million ended flows strong with for us for million to to as balance the a was the months XX, GreenBox allows a continues of December financially to I’ll Q&A. operating aggressively Ben from adjusted turn some cash XXXX. pursue activities initiatives. $X.X of position December $XXX cash healthy flexibility negative be in XX our Our million the recent XX, financing, our convertible which to following now prior growth final remarks Errez the XXXX $XX.X

Ben Errez

the we trigger acknowledge Thanks in the for in come QX Ben. that $XXX of note, are as Based QX and so-called not convertible ramifications agreement conversion million note, performance note specified into the seen on On fully such. we hurdles metrics confident this we have a performance the play. final will

exceed the requirements revenues Our triggers. these of far

While time. ambitious much work in be accomplish remains made to of period tremendous have agenda to relatively short our done progress we

have we my out set commitment have initiatives many you the Chairman, your As to unwavering to that achieve.

We and added world robust marketing. have and people, technology good invested developed heavily built class payment infrastructure, in a scalable innovative

long-term the and and over to for growth for GreenBox. to you for in the like years shareholders. today’s each next to several listening value your positioned deliver I’d of course of thank well We’re call interest for sustainable

for your that begin to I’d to operator grateful the truly session. ongoing We’re With Operator? to like turn support. the back it question-and-answer

Operator

Ben. [Operator Instructions] you, Thank

Ben Errez

Thank Chief wait again available just your I Wei And mention for operator. the I well. for Min first questions new that will will is Officer question. Operating our as

Operator

is from question EF go first Our Piggott Hutton. ahead. Ben with Please

Ben Piggott

just internal [Audio Dip]. a on thought bit little the Ben, maybe color around on the versus more onset process

Ben Errez

sorry, I’m Ben.

pretty your question? repeat garbled. you Would You’re

Ben Piggott

Yes.

Just, can you better now? hear me

Ben Errez

I think so.

Ben Piggott

out, Coyni would the on process be of a color what umbrella internal thought Just little keeping bit the versus more great? under spinning GreenBox

Ben Errez

Yes. the question, Thanks for Ben.

that a play the technology this on had talking formed wholly subsidiary in of we’re again in Coyni manifestation as a major last as for the an its its Coyni initially infrastructure XXXX. So Later a it’s was now is it year. and life is about contract GreenBox. of started GreenBox smart infrastructure beginning owned and middle

With the standalone opportunity the becoming IPO of for a company. anticipation it

obviously are different So were markets vastly a capital number last since, they than year. few happened things one, now

and time, terms developments rewards were merge perhaps Second, capabilities in add-on onshore as do our other a regain in we for sense opportunities, GreenBox this acquisitions, its the Europe portfolios, and within when to shareholders plans licensing committed the dividend and the same to that At remain our through has powerful makes to us as a expansion said of foothold. acquisition. the Coyni Pacific very for Launches very, we and international new first company region in I It infrastructure. markets capital make opportunities these global spinoff call then before. Asia

The question. even end the be a take the launch of commitment Coyni hope shape that may at I So delayed day. remains may separate fact that your reward unchanged. entity and as the different the answers

Ben Piggott

you. Thank helpful. That’s

Ben Errez

You’re welcome.

Operator

with Taglich go is ahead. question next Halpern from Our Howard Brothers. Please

Howard Halpern

afternoon Good guys.

Ben Errez

Howard. Hey

Howard Halpern

Hi. that Curious the new lined potential about for bulk ACH processing.

say you commitment? have You

Ben Errez

Yes.

Howard Halpern

do to started yet or when volume begin you Has expect and in? flowing, revenue to kick that

Ben Errez

already on have our volumes these We backlog. booked

this little is on-boarding now in process as takes process will So is the that different. are we that I a bit activity. of imminent. a launch allow to it’s this technology know maybe four take procedure. weeks is see On-boarding business been is time. happens a this there, or has now that launch in all We what but already this so, performance slightly of committed, integrated of it’s – for ACH that,

Howard Halpern

what of in source to that be – is that or billion that And revenue, for Okay. going of to that part revenue forecast? $X additive year is transaction that you this

Ben Errez

is some to see a next you’ll in I some overall little for than range through onset committed bump already we higher was both. it guess of billion year. But volume project. volume The budgeted, so of bit billion $X the it’s the budgeted $X

Howard Halpern

Okay. And...

Ben Errez

Sorry for year. this

Howard Halpern

to this, Transact, For And going with now. soon. close for yes, year now it’s this

two you or – much one that the of to blocking pretty tackling? $X are the minimum track $X billion, another and billion acquisitions that with need or still You on get to

Ben Errez

Yes.

track from front So will we investors, to expect further on of current another you We at way terms committed with see acquisition, this details something as can although share means point, but big approval definitely to we yet something not us. that the it. do move a acquisition would map shareholder require like execute that size that we one in that they are of have we XXXX. Perhaps on this don’t to and in the a during big that fully

Howard Halpern

margin cost The sales turn there of little something should three And scene what had came more compared of XXXX? on And to quarters dropped we quarters? because at fourth three first bit. a to the down I’ll first the back in Okay. quarter is in in question. going it the gross look Was a this turn, you forward,

Ben Errez

going Ben I’m and first the to let own I’ll comments. my add this tackle then

Howard Halpern

Okay.

Ben Chung

your think and... time? more one that repeat you Can somehow Yes. going in I message

Howard Halpern

are Okay. onetime cost into for a looking three first back seemed the we if don’t sales, the the what quarters dip we’ve there first three of to item a That to quarters. seen QX in know I compared XXXX in gross of but return margin was to XXXX?

Ben Chung

at saying gross you profit, gross – are it When Yes. or margin? offered was margin the you’re the

Howard Halpern

was said were it prior you the margin, quarters three margin. think XX. versus above And gross I XX, actually you Gross the you in were XX towards in – XXs in

Ben Chung

Yes. I don’t think gross I QX gave out margin. the

Howard Halpern

it Yes. said... in And release the that was press

Ben Chung

Yes. Okay.

Howard Halpern

versus profit XX. XX versus Gross million $X.X, Yes. was $X

Ben Chung

it. Yes. got Got it,

So based on and the processed to or the we on-boarded more is the ISOs we QX, QX. payments ISOs so in that timing period, ISO settlements change so the on more commission of and recognize the margin in revenue in we the based

Howard Halpern

Okay.

So timing, than issue timing it’s else. it’s a more anything a of

Ben Chung

then were we’ll And I correct. Gen our we’re sales-force utilize Ben That’s X technology growing ISOs more less we’re that so blockchain own had have effectively, alluded to trying to that and think deal means that Errez with. we – our

have so margin And higher go much as we we’ll along.

Howard Halpern

question up just getting, what’s And Samoa running? one the status know, of final American Okay. you and

Ben Errez

So a then question, get to American previous first add let Samoa. comment just your on me I’ll

Howard Halpern

Okay.

Ben Errez

Ben is impacts accruals. of So right. wanted is financials that to Q&A. during And Timing to clearly this this and revenue get our something I

business. But that to is move move volume, advancements that means native can mitigated maintain profit trends even operating move to native it’s through add difficult blockchain. margins. of saying But you though and reduce hosting the XXX%. technology the expect a the to on add ledger nature that it to Ben doesn’t company this to very the essentially a of by tendency the flip the side, owns have that alluded business So, to a margins, on change. volume margin, will flat, We lot pretty so of and

tendency volume out points increased volumes. lose much to when moves larger there, and you inefficiency the every automatically go that balances to So

Howard Halpern

Okay.

Ben Errez

your second to The part with American Samoa. of question regards

this So already Right have we there. American towards impact technology the technology fourth of now project full on of launched Samoa quarter we the GreenBox year.

We complete GreenBox into coverage is amazing technology. company. in of We of have there later financial getting the merchants that a are lot GreenBox of the over to island of this emphasis be of and through This put infrastructure through right. developments a being integrated resources the entire infrastructure the on island and Coyni served will financial done, economic leading the

commitment. else company financial to the efficiency. in with We is anything They have performance. full of have its very, the they of our launching own me with most and level project very are do. to maximum launching one executives high GreenBox this don’t of assigned officers this the, charge the exciting and features These project of This that to

Howard Halpern

guys. work. up Thanks the Okay. good Keep

Ben Errez

Thanks, Howard. Appreciate it.

Operator

[Operator Singular Our is ahead. Sakai with next go question Please Research. Instructions] from Chris

Chris Sakai

Hi. Ben E and Ben C.

Ben Errez

Hi, Chris.

Chris Sakai

mean had Europe the, the Europe? how is a is revenue from currently much know guess on, coming Can saying close I going how revenue coming, is question; just share color any to I the provide you’re Transact to, soon. I as you Transact I

Ben Errez

Transact I phases stated of Europe already itself So the are we status closing that all, this transaction. of the in first on

funds already are Escrow. this Europe. speak except itself. closing are closing approval to for And is acquisition acquisition procedures taking on nothing place as us our in the for to further The we in wired We for perform There’s hand. the

of technology will in the the expect And GreenBox a procedures, a this materially Our be workforce, bottom our impacting line. control firsthand the of out numbers own it’s Fredi to and company. I with come weeks next transaction, few Nisan, big Bulgaria to and traveling experience CEO

In Transact an acquisition terms for Europe that was objectives. composition two volume of a basically us of is a

licenses of in need economic the and greatly positioned especially world. And for into transactions for in the be foothold for critical expansion XXXX. is will predicted way our us more great a future set one our payment APAC half technology. by infrastructure It’s for first take critical that the It commercial the company. to is And advantage its to world APAC or Asia a have is The entire clearly payments, the than in that Europe, region. Pacific, to all of we responsible region in linkages of around

the should this a value and this over in capabilities the licensing is to objective was more that to probably volume, The I the primary they control than a rationale existing Europe, Transact say, responsible acquisition. secondary behind for volume get the XX% So have. secondary of relationship or

million we And next for this do few quarters, as believe year example. point will amount volumes revenues ChargeSavvy, So month, they we about significant that is reach range, the within speak. a today at per $XXX I $XX that our Europe think doesn’t we year minor us. any which parallel perhaps but the with in Transact a way do is the It the what within in ChargeSavvy and for million exceed impact

very addition to acquisition these that’s two of €X the good company the of with objectives think for the is the price I down ability So by negotiate million the company. a

with happy itself But it things to as may close exchanges to about very and a it, Chris. few this days on thanks, pending next it, international as and be executing completing like opportunity scheduled perhaps that. excited is and currency soon transaction we’re looking beginning We’re by very week. they and forward delayed The but today, wires

Chris Sakai

great. you about, have? Can Coyni. of partnerships some about partnerships know acquisition any Can in I with Okay, you, or on some may and sort guess bigger future talk any know or there’s, and that GreenBox you I I mentioned comments know talk I there’s you XXXX.

Ben Errez

GreenBox. is that owned Well, by a XXX% Coyni technology is

role line and that Coyni and to is So bottom has to shareholder GreenBox the value. be one accretive

change focus. So would do It change from though but may time to which to would to focus as company to impacts the such its improve an value contributions company, and bottom it time, line asset in value. even shareholder only its the turn thing it

about So, I spoke other with before opportunities. Coyni integrating

Coyni no else of derivative Europe one makes with one and value Coyni actually an of reversible. has one not has capability. has No value one option that cash. Coyni international else first being border on process do that. is funds Transact all of No to Europe, Again, that which has based instantly. the cross else The Transact that. the has immediate ability

to mission and on continue that excited with very and execute continue the company we’re and So and overall same Coyni to the shareholders. is its contribute the objective to

Chris Sakai

you Thanks. the you’ve of or there’s, year? there $XX Okay. XX two mean, comments Any I in mentioned, the million $XX so And you mentioned minus far acquisition, one million there, as, possibly cash were what for Transact. know as is got I there what,

Ben Errez

anything can’t But and and it thanks being that. I such as the Chris, can Hi further and would about currently from about for question divulge soon activity, very Both Information, one plan MNPI us expect really those to Material you say be both hear I very executed more. small Nonpublic yes, any information the can’t large. but do expected very,

Chris Sakai

mean, lastly, $XX plan? And Okay. been in new I how have shares repurchased, many this million

Ben Errez

that in on but you do. in I a XX-K the to million the where XX-K, what’s include called buyback shares we far and notice so believe the tell starting XXbX-X automatically from purchase is long will to that stock executed all price we so stated intend after the value perceived specify that are plans. the of be bought be approximately continue programs So X.X aside, provision XXbX can that we we fact here that they unfairly back this and I information also please as And tomorrow, of

that. expect So do

Chris Sakai

what that is of then now? processing about Okay. this someone think we $X this for volume, acquisition talking billion future, include that projections before, you’re only is or the in have $X I in with And that, does that to your but billion asked

Ben Errez

before haven’t amended rework completed future. amended will perhaps do acquisitions the and we we near the our we but couldn’t that are we, models provide the models in yet projections Yes, and

an that Now transaction this essentially we closed, do to opportunity have is that.

Chris Sakai

great. Thanks Ben. Okay,

Ben Errez

to our Thanks, Chris. and and for I Yes. our I I application. great. adopters, that on believe is I remarks, forward your also question. wanted Coyni being specifically of to feedback one testers this you thank look early hope

have, yes. We

Chris, Sorry, go ahead.

Chris Sakai

to I to And just try Oh, be would excited I’m it try it. definitely. say hope

Ben Errez

you. Thank

So is the operator, end of the Q&A. this I believe

Operator

Yes. Yes, question, that was sir. the last

Ben Errez

Okay.

you forward continue please unable answer time So conference would me questions at Q&A either We I call MZ time. to ongoing this try our IR directly. earning most thank questions, concludes of you our via today. this and answer session. to you or for we update to have to reach all any this you or your you growth. of were know And look the directly all all progress of joining I Thank of and out Group, address my us to like our email company. all If who to at on firm

Operator

This conference call. today’s concludes

lines. for a You participating day. may and disconnect your have Thank you pleasant