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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 2025 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. [Operator Instructions] I would now like to turn the call over to Mr. Cody Slach, Senior Managing Director. Please go ahead.

Cody Slach: 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. I 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: 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 $12.2 million. Consumer demand was quite strong with median transaction size up 46% year-over-year to $300 and total transaction volume moving steadily higher to $163.8 million. These results produced strong free cash flow, which we used 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 $20.3 million. 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 BTM 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 kiosk 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 FinCEN and various state agencies to help shape a responsible future for the industry. More broadly, the recent establishment of a US 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 appointment of David Gray as our Chief Financial Officer; and Chris Ryan as our Chief Legal Officer. David brings more than 20 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: 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 $164.2 million compared to $138.5 million 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 2024 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 2025 increased 92% to $33.1 million compared to $17.3 million in the first quarter of 2024.

Adjusted gross margin in the first quarter of 2025 increased 770 basis points to 20.2% compared to 12.5% in the first quarter of 2024. This margin increase was largely driven by leverage on the significant revenue outperformance and the continued pricing strength. Total operating expenses declined 7% to $15.3 million compared to $16.6 million in last year’s first quarter. The improvement was attributable to lower depreciation expense and our company moving farther away from the Data 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 2025 increased significantly to $12.2 million compared to a net loss of $4.2 million for the first quarter of 2025.

GAAP net income attributable to common shareholders increased to $4.2 million or $0.20 per share compared to a net loss of $1.5 million 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 $20.3 million in the first quarter of 2025, compared to $4.9 million in the first quarter of 2024. This increase was primarily due to revenue outperformance and margin expansion. Now, turning to our balance sheet and cash flow. Cash and cash equivalents in cryptocurrencies as of March 31, 2025, increased to $43.3 million compared to $31.0 million at the end of 2024. The company acquired 83 more Bitcoin in the quarter, bringing our investment holdings up to 94.4 BTC valued at approximately $7.8 million as of March 31.

We generated a record $16.3 million of cash from operating activities in the first quarter, up significantly from $1.3 million in the year-ago quarter. Debt at quarter-end was $60 million compared to $60.9 million at the end of 2024. This balance includes term loans, finance leases and profit share arrangements. Of the total debt balance, $30 million is our term loan on which we paid down $6 million during the quarter, and we plan to pay down at least an additional $3.5 million by year-end. The paydown 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 payments 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, you must account for the upfront payments as debt under US 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 2024. This growth, while modest, is against very strong comps of $164 million and $163 million for Q1 of 2025 and Q2 of 2024, 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?

Operator: [Operator Instructions] Your first question comes from the line of Mike Grondahl of Northland Capital Markets. Please go ahead.

Mike Grondahl: Hey, guys. Congrats on a solid quarter. Couple of 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: Hey, Mike, it’s Brandon. No, we haven’t announced to the public kiosk 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 want to 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 350 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: 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: Let me think about that for a second. 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 1000 kiosk minimum within that 1-year installed bucket just from deploying new kiosks and relocating existing kiosks. And the kiosks in year two versus year one, typically see at least 50% growth in terms of revenue versus year one. Maybe just look at year-over-year, but we can evaluate that a little bit further and get back to you.

Mike Grondahl: Cool. I mean, clearly, those are still ramping and they’re not mature yet. Just trying to kind of understand how much is there. But, thank you.

Brandon Mintz: Yep.

Operator: Your next question comes from the line of Mike Colonnese of H.C. Wainwright. Please go ahead.

Mike Colonnese: 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&A, Bitcoin purchases, and again, this potential quarter dividend?

Brandon Mintz: 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&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 prices that are less expensive than brand new kiosks.

And when we run the numbers, it’s hard to justify those M&A opportunities when we can just grow organically ourselves and have higher returns there. However, we’re evaluating M&A opportunities internationally because if someone can speed up our time line 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 in 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 Colonnese: Very helpful, Brandon. I 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: 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 Colonnese: Great. Thank you for taking my questions.

Brandon Mintz: And that’s just a theory.

Operator: Your next question comes from the line of Harold Goetsch of B. Riley Securities. Please go ahead.

Harold Goetsch: Hey, guys. Congrats on a great quarter. Just wanted to get your thoughts on the reason for maybe the extremely steep increase over the last 4 quarters in median transaction it was like rock solid around 200. And then for the last four quarters, it’s really moved up. And I wanted to get your thoughts. And then because it’s up about 50%, what are your thoughts on that?

Brandon Mintz: I didn’t hear the second question.

Scott Buchanan: I got it. Hey, Hal, 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 as 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 at 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 appears a more quick pace because it hasn’t hit another tier or is it just a ton of common transactions at that specific size, if that makes sense. Just a function of like where we see a lot of exact size transactions.

Harold Goetsch: Okay. Okay. And could you comment on just like overall transaction count growth by economic cohort? I mean what are like some of the machines that are like in place over two years that having been moved in a year? Like what kind of transaction counts are they doing per month sort of KPIs you could share with us if it’s a more qualitative basis.

Scott Buchanan: Trying to do some quick math for you. So 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 mixed 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 Goetsch: Okay and are those mature kiosks? Are they trending towards like the median transaction size? Is it kind of — that’s a fair then because they’ve been there a while, people know they’re frequent users.

Scott Buchanan: Well, they would — it would trend more toward the average transaction size, which is higher than the median. But yeah, it would…

Harold Goetsch: The average is higher than the median.

Scott Buchanan: For sure, yeah, because outlier large transactions pull off the average more than you can pull up the median.

Harold Goetsch: Okay. And last from me before I can get back in the queue. You’ve lapped California’s impact of their change. What have you seen in California a year later with what is — how is that either bounce back or not bounce back or what’s happened in California?

Scott Buchanan: So, California, can you ask that again, you asked California has bounced back?

Harold Goetsch: No, it’s like California made a rule change impact at all of 2024, right? And you’ve now lapped give us some comment — could you please share some commentary on what California looks like a full almost five quarters after that change? How are trends in California?

Scott Buchanan: Yes. I mean California is still lower than other states because of the rural 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.

Harold Goetsch: Okay. So usually one of your top states, it’s your moving our kiosks and you’re growing double digit right now, Q1 I mean, that’s pretty, that’s helpful. Thank you.

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

Pat McCann: 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: Yeah, I’ll take that one. It’s 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 2 key drivers of the margin expansion. And we expect that to continue to be strong going forward.

Pat McCann: 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: Brandon, I’ll take that one. If you look at data from coinatmradar.com, which have the listings of all the Bitcoins 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 per sale.

Pat McCann: Thanks. That’s all I had. Congrats again.

Brandon Mintz: Thank you.

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

Brandon Mintz: 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.

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