Bitcoin Depot eyes kiosk growth, mid-single-digit revenue gains in Q2, expanding internationally

 

• Brandon Mintz, CEO, reported "remarkable first quarter with 19% year-over-year revenue growth and record net income of $12.2 million." He emphasized strong consumer demand, a 46% increase in median transaction size to $300, and total transaction volume of $163.8 million, crediting the performance to the company's kiosk optimization strategy and operating model.
• Mintz noted that "Q1 adjusted gross profit was up 92% year-over-year and adjusted EBITDA was up over threefold to a record $20.3 million," adding that "we ended Q1 with approximately 8,483 active machines and expect to see continued growth in kiosks for the remainder of the year."
• The company has now deployed over 100 kiosks in Australia and is evaluating entry into at least two additional countries in 2025, with Mintz stating, "Australia is quickly emerging as a global hotspot for Bitcoin adoption...we believe this represents a significant opportunity to establish a strong presence outside North America."
• Mintz provided an update on regulatory expansion efforts, mentioning ongoing discussions to operate in New York State and highlighting the company's compliance infrastructure.
• Leadership changes were announced: "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," Mintz said.
• David Gray, CFO, stated, "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."
• Gray explained, "Adjusted gross margin in the first quarter of 2025 increased 92% to $33.1 million...margin increase was largely driven by leverage on the significant revenue outperformance and the continued pricing strength."

Outlook

• Gray indicated, "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."
• The company remains "committed to additional operational enhancements to drive profitable growth going forward, including improved vendor pricing, lowering professional service costs and optimizing customer markups."

Financial Results

• Gray reported, "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."
• Adjusted EBITDA increased 315% to $20.3 million in Q1 2025, and cash and cash equivalents in cryptocurrencies rose to $43.3 million as of March 31, 2025.
• The company acquired 83 more Bitcoin in the quarter, bringing total holdings to 94.4 BTC, valued at $7.8 million as of March 31.
• Operating expenses declined 7% to $15.3 million, attributed to lower depreciation and cost controls post-Data transaction. Debt at quarter-end was $60 million, with a $6 million paydown on the term loan.

Q&A

• Mike Grondahl, Northland Capital Markets: Asked about kiosk deployment goals and CapEx for '25 and '26. Mintz said no public kiosk goal announced, progress is slower on net new installations, and CapEx for 2025 would be minimal unless a large retail chain is signed.
• Grondahl: Inquired about revenue lift if 3,200 kiosks ramp to average. Mintz could not provide an exact number but said kiosks in year two see at least 50% revenue growth versus year one.
• Mike Colonnese, H.C. Wainwright: Asked about capital management priorities. Mintz said Bitcoin purchases will be opportunistic, debt repayment is a focus, and M&A is more likely internationally due to strategic opportunities.
• Colonnese: Queried about Q2 revenue guidance deceleration. Mintz attributed it to seasonality and tax return timing.
• Harold Goetsch, B. Riley Securities: Asked about steep increase in median transaction size. Scott Buchanan, COO, said it relates to transaction tier changes for KYC, moving past a $200 tier.
• Goetsch: Requested commentary on California post-regulatory changes. Buchanan said kiosk count in California is down about 80%, with less impact on the business due to fewer kiosks there.
• Pat McCann, NOBLE Capital Markets: Asked about gross margin drivers. Gray cited pricing strength and leveraging higher revenue. Mintz said US competition is shrinking, possibly providing more kiosk acquisition opportunities.

Sentiment Analysis

• Analysts expressed positive sentiment, congratulating management on strong results and focusing questions on growth, capital allocation, and regulatory impacts. Some caution was noted regarding revenue growth deceleration and regulatory headwinds.
• Management maintained a confident and slightly optimistic tone, highlighting operational strength and providing detailed explanations. Mintz and Gray addressed questions directly, occasionally noting uncertainties with phrases like "I couldn't really say" or "just a theory."
• Compared to the previous quarter, both analysts and management exhibited increased confidence, with more forward-looking discussions on international expansion and capital deployment.

Quarter-over-Quarter Comparison

• Q1 2025 showed stronger revenue and profitability, with GAAP net income of $12.2 million compared to $5.4 million in Q4 2024. Adjusted EBITDA and gross margin also improved significantly.
• The company reiterated its kiosk optimization and international expansion strategies, advancing from initial deployment in Australia to over 100 kiosks installed. New leadership appointments were announced, signaling a strengthened management team.
• Guidance language shifted from cautious reinstatement in Q4 2024 to more confident projections for Q2 2025, despite acknowledging modest sequential growth and seasonality.
• Analyst focus evolved from regulatory challenges and relocation impacts to capital allocation, kiosk productivity, and international expansion opportunities.
• Management's tone was more assertive about profitability, cash flow, and operational improvements; analyst tone was constructive but probing, especially on growth drivers and margin sustainability.

Risks and Concerns

• Regulatory uncertainty remains a challenge, particularly regarding New York State entry and the broader federal and state regulatory landscape. Mintz said, "We are in ongoing discussions with regulators and remain optimistic about obtaining a license to operate in the state in 2025."
• Seasonality affecting revenue growth was acknowledged, especially the impact of tax return season on Q1 performance.
• Competitive landscape shifts, with many competitor kiosks exiting the US market, could present both opportunities and risks.
• Management highlighted ongoing efforts to optimize costs and maintain flexibility in capital allocation, including limited CapEx plans and potential for accelerated debt repayment.

Final Takeaway

Bitcoin Depot delivered record first quarter results, underpinned by strong demand, margin expansion, disciplined cost control, and a growing global presence. The company remains focused on expanding its kiosk footprint, driving operational efficiencies, and pursuing international opportunities, while navigating regulatory developments and prioritizing shareholder value through prudent capital management and leadership enhancements.

Read the full Earnings Call Transcript

https://www.msn.com/en-us/money/companies/bitcoin-depot-anticipates-kiosk-growth-and-mid-single-digit-revenue-gains-in-q2-2025-while-expanding-internationally/ar-AA1ERokA