Revenue of $8.2 Million; Up 66% Year-over-Year and 29% Sequentially
Raises Low End of Full Year 2022 Gross Profit Guidance; Expects $9.5 to $10.0 Million
Reiterates Full Year 2022 Revenue Guidance of $37 to $40 Million
POSaBIT Systems Corporation (CSE: PBIT, OTC: POSAF), the leading provider of payments infrastructure in the cannabis industry, today announced its financial results for the three months ended June 30, 2022.
“Second quarter revenue of $8.2 million was up 29% sequentially, showing strong growth over the first quarter,” said Ryan Hamlin, CEO and Co-founder of POSaBIT. “We successfully on-boarded more than 100 locations in the second quarter and now have more than 500 merchant contracts that are leveraging our solutions. The increasing adoption of electronic payments in lieu of cash across the industry, combined with our continued onboarding of new merchants at a steady pace, enabled us to outperform the industry and increase our market share. Stabilizing industry trends, our plans for additional installations in the coming months, the new onboarding of the largest privately held MSO with operations in seven states and the recently announced guaranteed $20 million partnership with a large technology provider, reinforces our optimism for continued growth and achieving our revenue and profit targets for 2022. Deals like this set us up not only for a great year this year but for many years to come.”
Hamlin continued, “July was the first month in Company history with over $3 million in revenue and based on our current visibility, we are reaffirming our full-year 2022 revenue guidance of between $37 and $40 million, which represents growth of more than 80% at the midpoint compared to 2021, and increasing the lower end of our gross profit guidance range from $9.0 million to $9.5 million. Furthermore, we expect to return to positive Adjusted EBITDA in 2023.”
Recent Operational Highlights
- Signed a four-year, guaranteed $20 million partnership with a large cannabis technology provider
- Began deployment of the largest privately held MSO with operations in seven states and over 60 locations
- Onboarded 100+ newly booked stores in Q2
- Entered New Mexico market with ‘go live’ of Point-of-Sale (POS) solution at multiple locations
- Installed a record number of POS solutions during Q2; increased POS base by 27% sequentially
- Current pipeline of over 100 opportunities
- Strengthened balance sheet with secondary capital raise of $3.8 million in net proceeds in a private placement transaction with existing institutional investors
- Cash and Cash equivalents were $5.2 million at June 30, 2022, or $9.1 million including the $3.9 million received in August 2022 as part of our $20 million agreement. Balance sheet is in the strongest cash position in the company's history.
Second Quarter 2022 Financial Highlights
- Transactional sales for payment Services totaled $129 million, up 48% compared with $87.3 million in the second quarter of 2021, and up 25% compared with $103 million in Q1 2022
- Total revenue was $8.2 million, up 66% compared with $5.0 million in the second quarter of 2021
- Gross profit was $2.0 million, or 24% of revenue, up 49% on a dollar basis compared with $1.3 million, or 26.5% of revenue in the second quarter of 2021
- Operating loss was $(4.0) million, inclusive of a $2.7 million non-cash change in the fair value of foreign currencies, compared with operating income of $222,000 in the second quarter of 2021
- Net income was $380,000, inclusive of a $4.7 million non-cash change in fair value of derivative liabilities, compared with a net loss of $(878,000), inclusive of a $(1.0) non-cash change in fair value of derivative liabilities in the second quarter of 2021
- Adjusted EBITDA was $(661,000), or (8.0)% of revenue, compared with $207,000, or 4.2% of revenue, in the second quarter of 2021
Balance Sheet
As of June 30, 2022, the company had cash and funds held in trust of approximately $5.2 million compared to approximately $4.4 million as of December 31, 2021.
Subsequent to quarter end, the company received $3.9 million in cash pursuant to the terms of a license agreement with a cannabis technology provider. The sum represents the minimum royalty fees for the first year of the agreement.
Find the full earnings report here: https://www.businesswire.com/news/home/20220825005183/en/