Earnings call transcript: Bitcoin Depot Q1 2025 shows strong growth

Bitcoin Depot, the largest Bitcoin ATM operator in North America, reported robust financial results for the first quarter of 2025, showcasing significant revenue growth and a return to profitability. The company’s stock surged by 12.35% following the announcement, reflecting investor confidence in its strategic direction and operational performance. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value assessment, with analysts maintaining a "Strong Buy" consensus and setting price targets ranging from $3.25 to $7.00.

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Key Takeaways

• Bitcoin Depot’s Q1 2025 revenue rose 19% year-over-year to $164.2 million.
• The company reported a record net income of $12.2 million, reversing a loss from the previous year.
• Stock price increased by 12.35%, closing at $1.91.
• The company expanded its kiosk network significantly, with over 100 new deployments in Australia.
• Projected low to mid-single-digit revenue growth for Q2 2025.

Company Performance

Bitcoin Depot demonstrated a strong performance in Q1 2025, with revenue reaching $164.2 million, marking a 19% increase compared to the same period last year. The company achieved a net income of $12.2 million, a significant turnaround from a $4.2 million loss in the previous year. This performance highlights the effectiveness of its strategic initiatives and market expansion efforts. InvestingPro data shows the company maintains a "GOOD" overall financial health score of 2.67, with particularly strong marks in relative value (3.47) and profit metrics (2.89).

Financial Highlights

• Revenue: $164.2 million, up 19% year-over-year
• Net income: $12.2 million, compared to a $4.2 million loss in the prior year
• Adjusted EBITDA: $20.3 million, up 315% year-over-year
• Cash from operating activities: $16.3 million, up from $1.3 million
• Bitcoin holdings: 94.4 BTC, valued at $7.8 million

Market Reaction

Bitcoin Depot’s stock price saw a significant increase of 12.35% following the earnings announcement, closing at $1.91. This surge reflects positive investor sentiment driven by the company’s strong financial performance and growth prospects. The stock’s movement comes as it approaches its 52-week high of $3.52, indicating a potential upward trend. Notably, InvestingPro data reveals the stock often moves independently of the market with a beta of -0.27, while maintaining attractive valuation metrics with an EV/EBITDA ratio of just 2.25.

Outlook & Guidance

Looking ahead, Bitcoin Depot expects Q2 revenue to grow in the low to mid-single digits. The company plans to focus on operational enhancements and explore international expansion opportunities, with no significant capital expenditures anticipated for 2025. These strategic initiatives aim to strengthen its market position and drive sustainable growth. InvestingPro analysis indicates strong growth potential, with analysts forecasting positive earnings of $0.62 per share for FY2025.

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Executive Commentary

CEO Brandon Mintz emphasized the company’s impressive performance, stating, "We delivered a remarkable first quarter with 19% year-over-year revenue growth." He also highlighted the success of the kiosk growth and optimization plan, adding, "Our kiosk growth and optimization plan are showing the intended results."

Risks and Challenges

• Regulatory Changes: As the largest Bitcoin ATM operator, Bitcoin Depot faces potential regulatory challenges that could impact operations.
• Market Competition: Despite being a leader, the company must navigate a competitive landscape with new entrants.
• Economic Conditions: Macroeconomic factors could affect consumer demand for digital assets.
• Technological Advancements: Rapid technology changes may require continuous innovation to maintain competitiveness.

Bitcoin Depot’s Q1 2025 results underscore its strong market position and growth potential, with strategic initiatives poised to drive future success. The company’s focus on operational efficiency and international expansion aligns with its long-term vision, despite potential challenges in the evolving digital asset landscape.

Full transcript - Bitcoin Depot Inc (BTM) Q1 2025:

Janice, Conference Operator: Thank you for standing by. My name is Janice, and I will be your conference operator today. At this time, I would like to welcome everyone to the Bitcoin Depot First Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session.

I would now like to turn the call over to Mr. Cody Zak, Senior Managing Director. Please go ahead.

Cody Zak, Senior Managing Director, Bitcoin Depot: Thank you, operator. Good morning, everyone. Before management begins their formal remarks, we’d like to remind everyone that some statements we’re making today may be considered forward looking statements under securities laws and involve a number of risks and uncertainties. As a result, we caution you that there are a few factors, many of which are beyond our control, which could cause actual results and events to differ materially from those described in the forward looking statements. For more detailed risks, uncertainties and assumptions relating to our forward looking statements, please see the disclosures in our earnings release and public filings with the SEC.

We disclaim any obligation or undertaking to update forward looking statements to reflect circumstances or events that occur after the date the forward looking statements are made, except as required by law. We will also discuss non GAAP financial measures and encourage you to read our disclosures and the reconciliations to applicable GAAP measures in our earnings release carefully as you consider these metrics. We refer you to our filings with the SEC for detailed disclosures and descriptions of our business as well as uncertainties and other variable circumstances, including but not limited to risks and uncertainties identified under the caption Risk Factors in our recent filings. You may get Bitcoin Depot’s SEC filings for free by visiting the SEC website at sec.gov. I’d like to remind everyone this call is being recorded and will be available for replay via a link in the Investor Relations section of Bitcoin Depot’s website.

A supplemental earnings presentation highlighting our performance has also been made available on our IR website. Now I will turn the call over to Bitcoin Depot’s CEO, Brandon Mintz. Brandon?

Brandon Mintz, CEO, Bitcoin Depot: Thanks Cody and good morning everyone. Thank you for attending our first quarter conference call. Bitcoin Depot delivered a remarkable first quarter with 19% year over year revenue growth and record net income of $12,200,000 Consumer demand was quite strong with median transaction size up 46% year over year to $300 and total transaction volume moving steadily higher to $163,800,000 These results produced strong free cash flow which we use to build cash and purchase more Bitcoin. This performance demonstrates the strength of our operating model, the success of our kiosk optimization strategy and the powerful cash flow we can generate once fixed costs are covered. Let me provide more details on this performance.

Our kiosk growth and optimization plan are showing the intended results. Q1 adjusted gross profit was up 92% year over year and adjusted EBITDA was up over threefold to a record $20,300,000 These results should continue as this strategy unfolds. We ended Q1 with approximately 8,483 active machines and expect to see continued growth in kiosks for the remainder of the year. Now on to our BTM relocation strategy. Today 3,200 of our kiosks have been installed for less than one year.

As these machines ramp up, we expect to drive further cash flow as our Bitcoin ATMs typically see payback periods of less than eight months regardless of Bitcoin price. As the largest BCM operator in North America, our scale compliance first approach and long standing retail partnerships continue to set us apart in a highly fragmented market. We remain focused on expanding market share and growing profitability. Now turning to an update on our growth strategy. First, international expansion.

We have now deployed over 100 kiosks to support our ongoing launch in Australia this year. Australia is quickly emerging as a global hotspot for Bitcoin adoption, currently ranking third worldwide in total Bitcoin ATMs. We believe this represents a significant opportunity to establish a strong presence outside North America. While it’s still early, we are encouraged by the retail partnerships and expansion opportunities we have identified so far. Beyond Australia, we are actively evaluating entry into at least two additional countries in 2025.

Second, scaling our domestic footprint. We continue to deploy kiosks from the large inventory we secured last year. Once fully deployed, these units could bring our total active fleet to approximately 10,000 kiosks. This will enhance our reach and support further efficiencies across the business. Third, regulatory expansion into new markets.

New York State remains one of the largest untapped markets for Bitcoin ATMs. We are in ongoing discussions with regulators and remain optimistic about obtaining a license to operate in the state in 2025. While there is no definitive timeline yet, we are encouraged by the progress and engagement so far. On a broader note, we continue to closely monitor the evolving regulatory environment at both the federal and state levels. Our strong compliance infrastructure including rigorous KYC and AML protocols continues to serve as a competitive advantage.

We are actively engaging with regulators including Fencing and various state agencies to help shape a responsible future for the industry. More broadly, the recent establishment of a U. S. Strategic Bitcoin reserve highlights the growing institutional recognition of Bitcoin’s role in the financial system. As a national leader in Bitcoin ATM deployment, we are prepared to support the shift by expanding access to digital assets for everyday consumers.

We have also strengthened our leadership team with the appointments of David Gray as our Chief Financial Officer and Chris Ryan as Officer. David brings more than twenty years of financial leadership experience. Chris brings deep expertise in legal and regulatory matters within FinTech. Their combined experience will be essential as we continue to grow. With that, I will turn it over to our CFO, David Gray, who will walk through our financial results in more detail.

David?

David Gray, CFO, Bitcoin Depot: Thanks Brandon and good morning everyone. It’s great to be here and I look forward to meeting many of our shareholders over the coming months. Jumping right into our first quarter performance. Revenue was $164,200,000 compared to $138,500,000 for last year’s first quarter, an increase of 19% driven by growth in deployed kiosks and higher median transaction size. Sequentially revenue was up 20% as compared to Q4 twenty twenty four as a result of strong consumer demand underpinned by growing median transaction size along with our continued process of relocating underperforming kiosks to optimize fleet profitability.

Adjusted gross margin in the first quarter of twenty twenty five increased 92% to $33,100,000 compared to $17,300,000 in the first quarter of twenty twenty four. Adjusted gross margin in the first quarter of twenty twenty five increased seven seventy basis points to 20.2% compared to 12.5% in the first quarter of twenty twenty four. This margin increase was largely driven by leverage on the significant revenue outperformance and the continued pricing strength. Total operating expenses declined 7% to $15,300,000 compared to $16,600,000 in last year’s first quarter. The improvement was attributable to lower depreciation expense and our company moving farther away from the DSBAC transaction to optimize expenses for life as a public company.

Specifically, we have saved multiple million dollars on an annual basis by reducing costs related to our third party legal costs, audit services and insurance. GAAP net income for the first quarter of twenty twenty five increased significantly to $12,200,000 compared to a net loss of $4,200,000 for the first quarter of twenty twenty five. GAAP net income attributable to common shareholders increased to $4,200,000 or $0.20 per share compared to a net loss of $1,500,000 in last year’s first quarter. The significant increase was due to higher revenue and gross profit and to a lesser extent lower expenses. Adjusted EBITDA a non GAAP measure increased 315% to $20,300,000 in the first quarter of twenty twenty five compared to $4,900,000 in the first quarter of twenty twenty four.

This increase was primarily due to revenue outperformance and margin expansion. Now turning to our balance sheet and cash flow. Cash and cash equivalents and cryptocurrencies as of 03/31/2025 increased to 43,300,000 compared to $31,000,000 at the end of twenty twenty four. The company acquired 83 more Bitcoin in the quarter bringing our investment holdings up to 94.4 BTC valued at approximately $7,800,000 as of March 31. We generated a record $16,300,000 of cash from operating activities in the first quarter up significantly from $1,300,000 in the year ago quarter.

Debt at quarter end was $60,000,000 compared to $60,900,000 at the end of twenty twenty four. This balance includes term loans, finance leases and profit share arrangements. Of the total debt balance $30,000,000 is our term loan on which we paid down $6,000,000 during the quarter and we plan to pay down at least an additional $3,500,000 by year end. The pay down of the term loan balance was largely offset by the expansion of our profit share franchise agreements in the quarter. These agreements entail an upfront lump sum payment to the company by our partners in exchange for a portion of the future profits generated from a specified group of kiosks for a specified period of time.

Because we continue to operate and typically retain title to the kiosks we must account for the upfront payments as debt under U. S. GAAP. As we think about our capital allocation strategy going forward we will focus our attention on other ways of driving shareholder value including paying down our term loan or potential dividends as we do not expect significant CapEx in 2025. Now turning to our outlook.

Given the improved visibility we have in our business that Brandon mentioned we are continuing with near term financial guidance. We anticipate Q2 revenues to grow in the low to mid single digits both sequentially and as compared to Q2 of twenty twenty four. This growth while modest is against very strong comps of $164,000,000 and $163,000,000 for Q1 of twenty twenty five and Q2 of twenty twenty four respectively. We remain committed to additional operational enhancements to drive profitable growth going forward including improved vendor pricing, lowering professional service costs and optimizing customer markups. We are focused on optimizing the business for profitability and positive cash flow ahead.

With that, we are happy now to take your questions. Operator?

Janice, Conference Operator: Thank you. We will now begin the question and answer session. Your first question comes from the line of Mike Grondahl of Northland Capital Markets. Please go ahead.

Mike Grondahl, Analyst, Northland Capital Markets: Hey guys, congrats on a solid quarter. Couple questions. One, do you have a year end ’25, year end ’26 rough kiosk goal? And then what would you think of, I don’t know, rough CapEx for ’25 and ’26?

Brandon Mintz, CEO, Bitcoin Depot: Hey Mike, it’s Brandon. No, we haven’t announced to the public a kiosk call in terms of our total installed fleet. You can see we’re moving a little bit slower in terms of additional net new installations than last year. But our goal is still to get the remainder installed as soon as possible. We mentioned in the earnings script that we’re expanding hopefully into an additional country or two this year.

And we definitely wanna reserve some of the kiosks at least for that international expansion effort. One thing to note is we have about 150 kiosks installed in Australia today, but we shipped about three fifty there. So there will be some installation expansion just as Australia ramps up, not even including The US. And then in terms of CapEx for 2025 and 2026, with close to 2,000 kiosks still available for us to deploy, there’s not a need to purchase additional kiosks this year at least. Obviously, things could change very quickly if all of a sudden we signed a large retail chain, then maybe we don’t have enough kiosks.

But for now, I couldn’t really say that you should anticipate CapEx this year beyond just small things like parts costs and such, but nothing significant.

Mike Grondahl, Analyst, Northland Capital Markets: Got it. Got it. That’s kind of what I thought, but I wanted to make sure for ’25. You have roughly 3,200 kiosks that have been in place less than a year. If those 3,200 ramp to be average kiosks, what incremental lift to revenue would that be?

Brandon Mintz, CEO, Bitcoin Depot: Well, let me think about that for a second. Yeah. I I don’t have ability to calculate an exact number right now. But what I can say is we’re always going to have probably a thousand kiosks minimum within that one year installed bucket just from deploying new kiosks and relocating existing kiosks. In the kiosks in year two versus year one, typically see at least 50% growth in terms of revenue versus year one, if you just look at year over year.

But we can evaluate that a little bit further and get back to you.

Mike Grondahl, Analyst, Northland Capital Markets: Cool, I mean, clearly those are still ramping and they’re not mature yet. Just trying to understand how much is there, but thank you.

Brandon Mintz, CEO, Bitcoin Depot: Yep.

Janice, Conference Operator: The next question comes from the line of Mike Colonies of H. C. Wainwright. Please go ahead.

Mike Colonies, Analyst, H.C. Wainwright: Hey, good morning, guys, and congrats on a really strong quarter here. First one for me, obviously, Bitcoin Depot is generating really strong cash flows. So it’d be great to get some more color around your capital management priorities for the rest of the year. I can appreciate some of the debt repayment comments. But how are you thinking about balancing maybe M and A, Bitcoin purchases and again, this potential for dividend?

Brandon Mintz, CEO, Bitcoin Depot: Good question, Mike. It’s Brandon again. So when we look at uses of cash with the Bitcoin purchases, we would like to be opportunistic with us getting back close to all time highs right now. I don’t anticipate much buying. In terms of paying down debt, we did sign an amendment to our term loan agreement that requires us to have a little bit quicker amortization schedule.

And with our strong balance sheet right now, the preferred dividend being paid off and without a drag on potential cash uses like the preferred dividend had, I could see us potentially paying down debt maybe even quicker than what’s in the schedule. In terms of M and A, there’s still not a lot of opportunities that make sense for us at least in The US or Canada or Australia. Primarily because we’ve just been able to purchase kiosks at prices that are less expensive than brand new kiosks. And when we run the numbers, it’s hard to justify those M and A opportunities when we can just grow organically ourselves and have higher returns there. However, we’re evaluating M and A opportunities internationally because if someone can speed up our timeline to deployment, whether they have a license or some strategic vendor relationships or a strategic retailer relationship, that has really additional value than just us buying more kiosks and finding locations.

And we’re evaluating if there’s an opportunity that makes sense. But I don’t think at this time we’re in a place where that’s a very near term situation.

Mike Colonies, Analyst, H.C. Wainwright: Very helpful, Brendan. Appreciate the color there. And regarding the 2Q revenue guide, I can appreciate the tough comp from the year ago quarter. But are there any other factors causing such a significant deceleration in revenue growth for this quarter here?

Brandon Mintz, CEO, Bitcoin Depot: I think just as time has gone on, we’ve noticed the seasonality in the business we’ve talked about previously and how this business seems to be somewhat correlated with the seasonality with tax return season. And I think as there are more and more tools for people to get refunds earlier, that some of that volume is starting to shift more into Q1.

Mike Colonies, Analyst, H.C. Wainwright: Great. Thank you for taking my questions.

Brandon Mintz, CEO, Bitcoin Depot: And that’s just a theory.

Janice, Conference Operator: Your next question comes from the line of Harold Koch of B. Riley Securities. Please go ahead.

Harold Koch, Analyst, B. Riley Securities: Hey there. Hey, congrats on a great quarter. Just wanted to get your thoughts on the reason for maybe the extremely steep increase over the last four quarters in BDN transactions. It was like rock solid around 200. And then for the last four quarters it’s really moved up.

I wanted to get your thoughts. Then because it’s up about 50%, what are your thoughts on that?

Brandon Mintz, CEO, Bitcoin Depot: I didn’t hear the second

Scott, Bitcoin Depot: got it. Hey, how this is Scott. So, it’s just a function of where the transaction tiers are for KYC. So, we’ve had a tier at $200 for a long time and that means customers will frequently do $200 transactions. And so when you look at the median, even if the average has been going up every month, every quarter, every year, when you take the median $200 just has a lot of transactions that are exactly that level.

So, even if we’re moving up to higher points within that $200 median, it was still $200. And once we cross that level, we’re seeing move up and what appears a more quickly click pace, because it hasn’t hit another tier or it’s just a ton of common transactions at that specific size. If that makes sense. It’s always a function of where we see a lot of exact size transactions.

David Gray, CFO, Bitcoin Depot: Okay. Okay.

Harold Koch, Analyst, B. Riley Securities: Could you comment on just overall transaction count growth by cohort? I mean, what are some of the machines that are in place over two years that haven’t been moved in a year? Like, kind of transaction counts are they dealing per month? Are the sort of KPIs you could share with us in more quantitative basis? Yeah.

Let’s

Scott, Bitcoin Depot: see. I’m trying to

Harold Koch, Analyst, B. Riley Securities: do some quick math for you. So,

Scott, Bitcoin Depot: I mean, a kiosk that’s ramped up. I mean, we still see a lot of variability even after the two years of what transaction sizes mix with transaction counts, but we’re seeing transaction counts that mature kiosks in the mid double digit range. So in the, let’s say 10 to 20 transactions a month at a mature kiosk.

Harold Koch, Analyst, B. Riley Securities: Okay. And are those at mature key? Are they trending toward the median transaction size? Is that kind of that fair then? Because they’ve been there a while.

People know they’re there. They’re frequent users.

Scott, Bitcoin Depot: Well, would it would trend more towards the average transaction size, which is higher than the median.

Harold Koch, Analyst, B. Riley Securities: But, yeah, it would be around the The average is higher the median.

Scott, Bitcoin Depot: For sure. Yeah, because outlier large transactions pull off the average more than they can pull up the median.

Harold Koch, Analyst, B. Riley Securities: Okay. And last for me before I get back in the queue. You’ve lapped California’s impact of their change. What have you seen in California a year later with how does that either bounce back or not bounce back or what’s happened in California?

Scott, Bitcoin Depot: So, California can you ask that again? You’re asking California has bounced back?

Harold Koch, Analyst, B. Riley Securities: No, it’s like California made a rule change impacted all of 2024, And you’ve now lapped it. Give us some comment. Could you please share some commentary on what California looks like in full almost five quarters after that change? How are trends in California?

Scott, Bitcoin Depot: Yeah, I mean, California is still lower than other states because of the rule changes that happened there. It just has less of an impact on the business. Now that we’ve got many, many fewer kiosks in the state. We’ve probably reduced our count of kiosks in California by about 80% from where we were when the rule first went into effect.

Mike Colonies, Analyst, H.C. Wainwright: Okay.

Harold Koch, Analyst, B. Riley Securities: Okay, so you’re usually one of your top states. You’ve removed agency or kiosk and you’re growing double digit right now. Q1. That’s helpful. Thank you.

Your

Janice, Conference Operator: next question comes from the line of Pat McCann with NOBLE Capital Markets. Please go ahead.

Pat McCann, Analyst, NOBLE Capital Markets: Hey, guys, thanks for taking my questions and congrats on the quarter. I would like if you don’t mind talking a little bit more about the spreads of the machines this quarter and the gross margins and the drivers behind that and what maybe we should expect moving forward there?

David Gray, CFO, Bitcoin Depot: Yeah, I’ll take that one, David. Yeah, the gross margin expansion really was attributable to pricing strength. We did increase our margins on Bitcoin transactions through the kiosks as well as leveraging higher revenue across kind of the fixed and semi fixed costs that we have in our cost structure. So those were two key drivers of the margin expansion and we expect that to continue to be strong going forward.

Pat McCann, Analyst, NOBLE Capital Markets: And then the other question was regarding additional kiosk acquisition. I know that’s not a need right now but I was just wondering what the landscape looks like as far as opportunities to pick up more kiosks on the cheap, kind of like you did recently in the last year or so.

Brandon Mintz, CEO, Bitcoin Depot: Brandon, I’ll take that one. If you look at data from coinatmradar.com, which has the listings of all of the Bitcoin ATMs around the world for the most part, it looks like competition, at least in The US, is shrinking. If you remove our kiosk growth over the past year and just looking at their data, it looks like maybe there’s over 3,000 competitor kiosks that have disappeared from the market. So I think as some of the smaller operators struggle to survive in this environment that requires more sophistication and more resources from operators, that there could be additional kiosks that pop up on the market for sale.

Harold Koch, Analyst, B. Riley Securities: Thanks. That’s all I had. Congrats again. Thank you.

Janice, Conference Operator: I will now turn the call back over to Brandon Nitz, CEO for closing remarks. Please go ahead.

Brandon Mintz, CEO, Bitcoin Depot: Thank you everyone for joining the call today. We’re very happy about the results we delivered and we plan to continue to perform next quarter.

Janice, Conference Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.

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