GreenBox POS Reports First Quarter 2022 Financial Results
GreenBox POS (NASDAQ: GBOX) ("GreenBox", the "Company"), an emerging and rapidly growing Fintech company provided its financial results for the first quarter ending March 31, 2022.
First Quarter 2022 and Subsequent Operational Highlights:
- Q1 revenues of $4.9 million versus $4.7 million in the same year-ago quarter.
- Q1 processing volume growth of $754 million versus $315 million in the same year-ago quarter.
- Completed Transact Europe acquisition, its largest acquisition to date, expanding the Company's global footprint among the vast European payments landscape.
- Closed a key licensing partnership with Cross River Bank, a respected tech-driven infrastructure provider, to launch banking as a service offering and expand the universe of new customers while creating incremental channels for revenue growth.
- Acquired Sky Financial securing a $1 billion+ annual merchant processing portfolio.
- Launched the coyni v1 platform successfully, in preparation for a public beta pilot with external users in April.
- Strengthened the Board of Directors and executive management team with key appointments:
- Adele Hogan, an experienced transactional lawyer with demonstrated success with over $200 billion in securities, mergers, contracts and deals closed, to the Board of Directors.
- Min Wei, an accomplished operations executive with extensive experience in managing global technology company processes, as Chief Operating Officer.
- Introduced a new ACH bulk processing channel with client commitments surpassing $50 million per month.
- Accelerated the Company's share repurchase program with an additional $10 million being approved for repurchase.
- Appointed global marketing agency, INNOCEAN, as advertising and branding agency of record, to lead its worldwide branding and communications.
- Completed a System and Organization Controls (SOC) 2 Type 2 certification audit on controls relevant to the security trust services category to align the Company with the industry standards followed by world class organizations.
"The first quarter 2022 was punctuated by record processing, the incredibly successful completion of two critical acquisitions, a new strategic partnership, and the successful pre-launch of coyni," said Fredi Nisan, Chief Executive Officer of GreenBox POS. "The purchase of Transact Europe, our most significant procurement to date, ushers us into the enormous European payments landscape creating an important segue for further global expansion. And, by establishing a significant strategic licensing partnership with leading technology infrastructure bank, Cross River, we made substantial strides towards the launch of our banking-as-a-service solution.
"Obtaining Sky Financial additionally allows us to secure a lucrative processing volume portfolio that was already integrated with our technology. Sky represented a sizeable portion of our 2021 growth, contributing significantly to our revenue during the year. Bringing this portfolio in-house eliminates some of the costly commissions, while also enabling us to nurture customer relationships for additional revenue opportunities.
"Operationally, we continued to fortify the composition of our Board and executive management team. Welcoming Min Wei as our new Chief Operating Officer, whose background in operational efficiencies at global technology companies, has been indispensable for us given our rigorous growth plans. Joining our Board of Directors is Adele Hogan, a seasoned transactional lawyer, who has been material to recent acquisitions and securities compliance successes. Adele will be a prominent contributor to any M&A's as well future dividend plans.
"Despite the recent uncertainty in the global markets, the digital transformation of the financial payments industry continues at a tremendously vigorous pace. We believe that GreenBox is more poised than ever before to lead within this landscape by leveraging our pioneering technology and customized digital payment offerings, with speed, transparency, security and integrity to customers globally. We remain very confident in our 2022 outlook of processing $4-6 billion in transaction volume with sequential company record processing levels each quarter. We look forward to over-delivering results which support our long-term strategic growth trajectory," concluded Nisan.
First Quarter 2022 Financial Summary
- Increased revenue to $4.9 the three months ended March 31, 2022 versus $4.7 million for the three months ended March 31, 2021. The change in net revenue reflected the increase in processing volume in the three months ended March 31, 2022 compared to the three months ended March 31, 2021.
- Gross profit in the first quarter of 2022 was $2.3 million, or 47.6% of total revenue, compared to gross profit of $3.2 million, or 66.4% of total revenue, in the same quarter a year ago. The decrease was primarily due to increased cost of revenue resulting from higher processing fees paid to gateways and commission payments to ISOs.
- Operating expenses decreased by $4.0, or 32.0%, to $8.5 million for the three months ended March 31, 2022, from $12.5 for the three months ended March 31, 2021. The decrease was due primarily to lower stock compensation expense for services and employees for the three months ended March 31, 2022, offset by increases in research and development, general and administrative, marketing, payroll related expenses, professional fees as we continue to add staff and infrastructure related to our growth and being a publicly traded company and readying the coyni platform for a public introduction.
- Other expense increased by $11.1 million to $15.1 million for the three months ended March 31, 2022 as compared to $4.0 million for the three months ended March 31, 2021. Interest expense increased significantly due to the $100 million convertible note issued in November 2021. Amortization of the discount, fees and the fair value of the derivative liability associated with the note were also contributing factors. Furthermore, the Company changes in fair value of derivative liability expense of $7.7 million for the three months ended March 31, 2022.
- The company sustained a net loss in the first quarter of 2022 of $21.3 million, or $0.51 per basic and diluted share, compared to a net loss of $13.3 million, or $0.38 per basic and diluted share, in the same quarter a year ago. The increase in net loss was primarily due to an increase in change in fair value of derivative liability and increases in research and development, general and administrative, payroll and payroll taxes and professional fees as we continue to add staff and infrastructure related to our growth and being a publicly traded company.
- Adjusted Net loss, a non-GAAP financial measure, for the first quarter 2022 was $5.4 million.
Management will host a conference call on Monday, May 16, 2022 at 4:30 p.m. Eastern time to discuss GreenBox's first quarter 2022 financial results. The call will conclude with Q&A from participants. To participate, please use the following information:
Q1 2022 Conference Call and Webcast
Date: Monday, May 16, 2022
Time: 4:30 p.m. Eastern time
US Dial In: 1-844-825-9789
International Dial In: 1-412-317-5180 Conference ID: 10166964
Please dial in at least 10 minutes before the start of the call to ensure timely participation.
A playback of the call will be available through August 16, 2022. To listen, call 1-844-512-2921 within the United States or 1-412-317-6671 when calling internationally and enter replay pin number 10166964. A webcast will also be available for 90 days on the IR section of the GreenBox POS website or by clicking the webcast link above.