RYVYL Reports Second Quarter 2023 Financial Results


Record Q2 Revenues Increase 113% to $14.8 million, Exceeding Guidance Range of $12 to $14.5 million

Raises Q3 Revenue Outlook to $16 to $18 million; 2023 Full Year Revenue Expected to Exceed $60 million

SAN DIEGO, CA, Aug. 14, 2023 (GLOBE NEWSWIRE) — RYVYL Inc. (NASDAQ: RVYL) (“RYVYL” or the “Company”), a company that leverages the security of the blockchain and USD-pegged stablecoin technology with near-real-time attestation capabilities to conduct payment transaction, has provided its financial results for the second quarter 2023.


Management Commentary by CEO Fredi Nisan:

Second Quarter 2023 and Subsequent Operational Highlights:

  • Record quarterly revenue of $14.8 million versus $6.9 million during the same time period in 2022, a 113% increase.
  • Q2 processing volume of approximately $678 million, an increase of 85% increase from the prior year same period when excluding the sky financial portfolio volume.
  • FX and international payments portfolio, including the acquired Transact Europe business and new Banking-as-a-Service (BAAS) offering, processed $425 million in the second quarter compared to $344 million in business volume in Q1, an increase of over 23%. This is a 248% increase from Q2 of 2022’s $121 million.
  • RYVYL EU entered into a partnership with Visa to enable Visa Direct, a cutting-edge transfer solution, to RYVYL’s customers. Once integrated into RYVYL’s service offerings, customers will have the opportunity to send money to authorized accounts in over 80 countries across multiple currencies through Visa’s extensive network of local banking partners.
  • RYVYL EU received approval to launch Single Euro Payments Area (SEPA) Instant Payments in Europe. This service capability will allow the Company’s clients to instantly send and receive payments from 36 SEPA countries. Person-to- person, business- to business and person-to- business payments will be made on a near real time basis, 24 by 7, with funds available to recipients almost immediately.
  • Entered into a strategic partnership with global payment solutions leader, Intercash, to expand Banking-as-a-Service platform in Europe through card issuance collaboration for customers in the European Economic Area (EEA).
  • Signed up 6 global financial institutions for the Banking-as-a-Service solution, expected to process over $100 million per month when fully ramped up.
  • Acquired Logicquest, a shell company, for the transfer of coyni’s assets in order to facilitate the spin-off transaction. Engaged Simon & Edward, LLP as the accounting firm and auditor of coyni, Inc. given their familiarity with RYVYL’s business operations and technology.
  • Launched the coyni Mobile Point of Sale (mPOS) app, providing merchants with a secure and convenient way to quickly add mPOS devices and users through a straightforward registration process to begin accepting payments, transforming iOS and Android devices into a payment terminal for secure, efficient transactions.
  • Entered into an exchange agreement and completed initial exchange with the Company’s convertible noteholder to bolster capital structure, reduce debt, significantly improve cash flow, and increase shareholder equity.
  • Appointed Gene Jones, an experience compliance leader, as Interim Chief Financial Officer

Summary and Outlook

Business momentum remained strong during the second quarter leading to record quarterly revenue for the 3rd consecutive quarter of $14.8 million, an increase of nearly 113% year over year, exceeding our guidance of $12.5 to $14 million. This was accomplished on processing volume of $678 million, an increase of 20% from the first quarter 2023 and also above our guidance range of $580 to $610 million. The increased margin profile is a testament to our steadfast focus on improving processing efficiency, workforce, and technology.

Against the backdrop of regulatory and banking uncertainty in the United States, we see our subsidiary in Europe, RYVYL EU, as a crucial growth driver for us. To that end, RYVYL EU made significant strides in Q2, receiving approval from the European Payments Council to launch Single Euro Payments Area (SEPA) instant payments in Europe. With this approval, RYVYL EU has enabled incoming and outgoing instant transfers via SEPA, an instant credit transfer scheme that encompasses over 2,000 payment service providers in the Euro zone across 36 countries. RYVYL EU also partnered with Visa to enable Visa Direct for fast and secure account to account transfers in the Eastern European region. Once integrated, customers will have the opportunity to send money to authorized accounts in over 80 countries across multiple currencies through Visa’s extensive network of local banking partners.

We view Banking-as-a-Service as the future of global banking and are excited to be an enabling service provider in a space that is rapidly emerging and reaching new customers every day. By the end of the year, we expect to have a full global payments platform covering over one hundred local currencies and local settlements.

In terms of coyni, during the quarter we acquired a public shell company to transfer coyni assets to, in order to facilitate the transaction, which our Board of Directors has approved. The name change process is underway and we expect to be finalized soon. Furthermore, we selected Simon & Edward as auditor of coyni given their familiarity with our technology, accounting processes and personnel. Once complete, we can look toward the next phase of a public offering which we expect to be in the $40 million range along with Nasdaq uplist and ultimately a Board approved special dividend for RYVYL shareholders. We expect to complete this by the end of the year.

Operationally, we appointed Gene Jones, an experienced compliance leader as our Interim Chief Financial Officer and also dramatically improved our capital structure by entering into an exchange agreement with the holder of our $100 million convertible note, where the initial exchange, is now complete resulting in a $6 million debt reduction and an increase in shareholder equity and cash flow. This type of institutional level commitment is a major win for all our stakeholders and illustrates the conviction we share in our mission as a disruptive force in digital payments landscape.

Looking ahead, given the strength of our Q2 revenue and continuing momentum, we are raising our Q3 revenue outlook to $16 to $18 million. For 2023, we now expect revenue to exceed $60 million on processing volume of $3 to $4 billion. In terms of profitability, we are lowering our Adjusted EBITDA outlook for 2023 to positive $2 to $3 million. With strong growth in our core processing business, improved margin profile, traction with our Banking-as-a-Service offering and steady progress towards our coyni spinoff initiative, we are in the best position we have ever been to generate long-term sustainable value for our shareholders.

Second Quarter Financial Summary

  • Revenue increased by $7.9 million, or 113%, to $14.8 million for the quarter ended June 30, 2023, from $6.9 million for the year-earlier quarter. The change in net revenue was primarily attributable to significant growth in processing volume from our acquiring business, RYVYL EU and American Samoa in the second quarter of 2023, compared to the year-earlier quarter. North America Q2 revenue increased 86% from $5.9 million in Q2 2022, to $11.0 million for the quarter ended June 30, 2023. EU Q2 revenue is $3.8 million, increased by 270% from $1.0 million for the year-earlier quarter.
  • Cost of revenue increased by $4.5 million, or 106%, to $8.7 million for the quarter ended June 30, 2023, from $4.2 million for the year earlier quarter. Gross margins increased to 41% in the quarter ended June 30, 2023, compared to 39% in the year earlier quarter. Payment processing consists of various processing fees paid to Gateways, as well as commission payments to the Independent Sales Organizations (“ISO”) responsible for establishing and maintaining merchant relationships, from which the processing transactions ensue. Cost of revenues increased due primarily to increased volume, resulting in higher processing fees paid to Gateways, commission payments to ISOs, and cost of revenue of acquired businesses in the US and EU.
  • Operating expenses increased by $0.2 million, or 1.4%, to $11.8 million for the quarter ended June 30, 2023, from $11.6 million for the year-earlier quarter. The increase was due primarily to higher general and administrative and professional fees for the quarter ended June 30, 2023, offset by decreases in advertising and marketing, stock-based compensation expenses and depreciation and amortization.
  • Other expense was $6.4 million for the quarter ended June 30, 2023, compared to other income of $20.1 million for the quarter ended June 30, 2022. Changes in the fair value of derivative liability amounted to a charge of $0.5 million for the quarter ended June 30, 2023, and a credit of $26.4 million in the quarter ended June 30, 2022.
  • Interest expense, including expense related to the accretion of the debt discount related to the $100 million convertible note issued in November 2021 decreased by $3.0 million from the year-earlier quarter, due primarily to a lower level of amount of debt outstanding. Additionally, we incurred a charge of $0.2 million in the quarter ended June 30, 2023, related to the conversion of debt and we recognized a loss of $0.8 million in the year-earlier quarter in connection with the settlement of debt. Other expense also included $1.2 million in carryover effects of financial statement restatements.
  • Excluding the effects of the highly volatile changes in the fair value of derivative liability, and the non-recurring carryover effects of financial statement restatements, other income (expense) increased by $0.3 million in the quarter ended June 30, 2023, compared to the year-earlier period.
  • The company recorded a net loss in the second quarter of 2023 of $12.0 million, or ($0.23) per basic and diluted share, compared to a net profit of $12.1 million, or $0.28 per basic and diluted share, in the same quarter a year ago. The increase in net loss is primarily due to $26.4 million in income in the second quarter 2022 related to the change in the fair value of our derivative liability last year versus this year’s second quarter change in fair value of derivative liability expense of $0.2 million.
  • Cash, cash equivalents and restricted cash were $63.9 million as of June 30, 2023, with $13.2 million being unrestricted cash.
  • Second quarter 2023 Adjusted EBITDA loss, a non-GAAP measure, was $0.9 million. This is lower than the targeted break-even for the quarter due to higher than planned expenses associated with card scheme fees and administrative expenses to regain compliance.

Management will host a conference at 4:30 p.m. Eastern Time on Monday, August 14, 2023 to discuss second quarter 2023 financial results, provide a corporate update and conclude with a Q&A session. To participate, please use the following information:

Q2 2023 Conference Call and Webcast
Date: August 14, 2023
Time: 4:30 p.m. Eastern Time
US Dial In: 1-844-826-3035
International Dial In: 1-412-317-5195
Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1626960&tp_key=56d4b5f445
Call me: Link

Please dial in at least 10 minutes before the start of the call to ensure timely participation. Participants can use Guest dial-in #s above and be answered by an operator OR click the Call me link for instant telephone access to the event and enter pass code 4459816. The Call me link will be made active 15 minutes prior to scheduled start time.

To listen to a recording of the call available through October 14, 2023, dial 1-844-512-2921 within the United States or 1-412-317-6671 when calling internationally and enter access ID 10181432. A webcast will also be available for 90 days on the IR section of the RYVYL website or by clicking the webcast link above.


RYVYL Inc. (NASDAQ: RVYL) was born from a passion for empowering a new way to conduct business-to-business, consumer-to-business, and peer-to-peer payment transactions around the globe. By leveraging unique blockchain security and USD-pegged stablecoin technology with near real-time attestation capabilities, RYVYL is reinventing the future of financial transactions using its coyni® stablecoin platform as a transactional foundation. Since its founding as GreenBox POS in 2017 in San Diego, RYVYL has developed applications enabling an end-to-end suite of turnkey financial products with enhanced security and data privacy, world-class identity theft protection, and rapid speed to settlement. As a result, the platform can log immense volumes of immutable transactional records at the speed of the internet for first-tier partners, merchants, and consumers around the globe. www.ryvyl.com

Use of Non-GAAP Financial Information

This earnings release discusses Adjusted EBITDA is a non-GAAP measure that represents our net loss before interest expense, amortization of debt discount, income tax expense, depreciation and amortization, stock-based compensation expense, acquisition-related expense and legal costs and settlement fees incurred in connection with non-ordinary course litigation and other disputes.

We exclude these items in calculating Adjusted EBITDA because we believe that the exclusion of these items will provide for more meaningful information about our financial performance, and do not consider the excluded items to be part of our ongoing results of operations. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are: (a) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (b) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (c) Adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; (d) Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and (e) other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure.

See also Reconciliation of Net Income (Loss) attributable to RYVYL, Inc., to Adjusted EBITDA in the table below.*

Cautionary Note Regarding Forward-Looking Statements.

This press release includes information that constitutes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on the Company’s current beliefs, assumptions and expectations regarding future events, which in turn are based on information currently available to the Company. Such forward-looking statements include statements regarding the timing of the filing of the aforementioned periodic reports. By their nature, forward-looking statements address matters that are subject to risks and uncertainties. A variety of factors could cause actual events and results to differ materially from those expressed in or contemplated by the forward-looking statements, including the risk that the completion and filing of the aforementioned periodic reports will take longer than expected and that additional information may become known prior to the expected filing of the aforementioned periodic reports with the SEC. Other risk factors affecting the Company are discussed in detail in the Company’s filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by applicable laws.

Investor Relations Contact
Mark Schwalenberg
MZ Group – MZ North America
[email protected]

Consolidated Balance Sheets
June 30, 2023 and December 31, 2022

      June 30, 2023   December 31, 2022
ASSETS     (dollars in thousands)
Current Assets:          
Cash and cash equivalents     $ 13,166     $ 13,961  
Restricted cash       50,760       26,873  
Accounts receivable, net of allowance of $111 and $82, respectively       649       1,156  
Cash due from gateways, net of allowance of $842 and $9,326, respectively       6,982       7,427  
Prepaid and other current assets       2,305       9,798  
Total current assets       73,862       59,215  
Non-current Assets:          
Property and equipment, net       1,636       1,696  
Other assets       1,978       197  
Goodwill       26,753       26,753  
Intangible assets, net       6,298       6,739  
Operating lease right-of-use assets, net       3,985       1,533  
Investments       913       1,524  
Total non-current assets       41,563       38,442  
Total Assets     $ 115,425     $ 97,657  
Current Liabilities:          
Accounts payable       12,792       1,630  
Other current liabilities       4,445       3,662  
Accrued interest       2,234       1,728  
Payment processing liabilities, net       45,607       28,912  
Short-term notes payable       15       14  
Derivative liability       584       255  
Current portion of operating lease liabilities       358       534  
Total current liabilities       66,035       36,735  
Long term debt, net of debt discount       66,940       61,735  
Operating lease liabilities, less current portion       3,833       1,109  
Total liabilities       136,808       99,579  
Commitments and contingencies          
Stockholders’ Equity/(Deficit):          
Common stock, par value $0.001, 82,500,000 shares authorized, shares issued and outstanding of 51,963,779 and 49,727,355, respectively       51       49  
Common stock issuable, par value $0.001             2  
Additional paid-in capital       96,570       96,271  
Deferred stock compensation       (67 )      
Accumulated other comprehensive income       1,525       1,596  
Accumulated deficit       (119,462 )     (99,772 )
Less: Shares to be returned             (68 )
Total stockholders’ equity/(deficit)       (21,383 )     (1,922 )
Total liabilities and stockholder’s equity/(deficit)     $ 115,425     $ 97,657  

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income
For the Three and Six Months Ended June 30, 2023 and 2022

  Three Months Ended June 30,   Six Months Ended June 30,
    2023       2022       2023       2022  
      (as restated)       (as restated)
Revenue $ 14,849     $ 6,966     $ 26,140     $ 11,176  
Cost of revenue   8,725       4,230       14,903       7,010  
Gross profit   6,124       2,736       11,237       4,166  
Operating expenses:              
Advertising and marketing   33       527       108       668  
Research and development   1,184       1,920       3,119       3,858  
General and administrative   4,055       1,354       5,508       3,146  
Payroll and payroll taxes   2,913       2,712       5,627       5,096  
Professional fees   2,989       1,168       4,792       2,672  
Stock compensation expense   (32 )     1,715       161       1,882  
Stock compensation for services         79             206  
Depreciation and amortization   623       2,127       1,242       2,581  
Total operating expenses   11,765       11,602       20,557       20,109  
Income (loss) from operations   (5,641 )     (8,866 )     (9,320 )     (15,943 )
Other income (expense):              
Interest expense   (1,517 )     (1,783 )     (3,246 )     (5,613 )
Interest expense – debt discount   (2,821 )     (5,582 )     (5,443 )     (13,172 )
Derecognition expense upon conversion of convertible debt   (188 )           (188 )      
Loss on settlement of debt         (757 )           (1,657 )
Changes in fair value of derivative liability   (497 )     26,435       (329 )     18,735  
Merchant fines and penalty income         37             82  
Other income or expense   (1,337 )     2,531       (1,447 )     235  
Total other income (expense), net   (6,360 )     20,881       (10,653 )     (1,390 )
Income (loss) before income tax provision (benefit)   (12,001 )     12,014       (19,973 )     (17,333 )
Income tax provision (benefit)   4       (77 )     9       2  
Net income (loss) $ (12,005 )   $ 12,092     $ (19,982 )   $ (17,335 )
Comprehensive income statement:              
Net income (loss) $ (12,005 )   $ 12,092     $ (19,982 )   $ (17,335 )
Foreign currency translation loss   (13 )     (398 )     (71 )     (398 )
Total comprehensive income (loss) $ (12,018 )   $ 11,694     $ (20,053 )   $ (17,733 )
Net loss per share:              
Basic and diluted $ (0.23 )   $ 0.28     $ (0.39 )   $ (0.56 )
Weighted average number of common shares outstanding:              
Basic and diluted   51,417,099       42,977,461       51,287,902       31,208,102  

Unaudited Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2023 and 2022

  Six Months Ended June 30,
    2023     2022 (as restated)
Cash flows from operating activities:      
Net loss $ (19,982 )   $ (17,335 )
Adjustments to reconcile net loss to net cash provided by operating activities:      
Depreciation expense   1,242       2,581  
Noncash lease expense   67       79  
Stock compensation expense   161       1,882  
Stock compensation for services         206  
Interest expense – debt discount   5,443       13,172  
Derecognition upon conversion of note payable   188        
Changes in fair value of derivative liability   329       (18,735 )
Changes in assets and liabilities:       1,657  
Accounts receivable   507       (138 )
Prepaid and other current assets   7,366       (1,053 )
Cash due from gateways, net   445       1,018  
Other assets   (1,781 )     35  
Accounts payable   11,161       (2,269 )
Other current liabilities   782       732  
Accrued interest   506       2,349  
Payment processing liabilities, net   16,695       18,914  
Net cash provided by operating activities   23,129       3,095  
Cash flows from investing activities:      
Purchases of property and equipment   (17 )     (87 )
Purchase of intangibles         (661 )
Cash provided for Transact Europe Holdings OOD Acquisition         (28,811 )
Cash provided for Sky Financial & Intelligence asset acquisition         (16,000 )
Net cash used in investing activities   (17 )     (45,559 )
Cash flows from financing activities:      
Treasury stock purchases         (3,237 )
Proceeds from stock option exercises         5  
Borrowings (repayments) from convertible debt         (6,000 )
Repayments on long-term debt   (7 )      
Net cash provided by (used in) financing activities   (7 )     (9,232 )
Restricted cash acquired from Transact Europe         18,677  
Net increase in cash, cash equivalents, and restricted cash   23,105       (33,019 )
Foreign currency translation adjustment   (13 )     (915 )
Cash, cash equivalents, and restricted cash – beginning of period   40,834       89,559  
Cash, cash equivalents, and restricted cash end of period $ 63,926     $ 55,625  
Supplemental disclosures of cash flow information      
Cash paid during the period for:      
Interest $ 2,709     $ 3,127  
Income taxes          
Non-cash financing and investing activities:      
Convertible debt conversion to common stock $ 300     $ 2,110  
Interest accrual from convertible debt converted to common stock $ 3        

Reconciliation of Net Income (Loss) attributable to RYVYL, Inc., to Adjusted EBITDA* for the Three and Six Months Ended June 30, 2023 and 2022

  Three Months Ended June 30   Six Months Ended June 30
    2023     2022       2023     2022  
  (dollars in thousands)   (dollars in thousands)
Net income (loss) $ (12,005 ) $ 12,092     $ (19,982 ) $ (17,335 )
Interest expense, excluding amortization of debt discount   1,517     1,783       3,246     5,613  
Amortization of debt discount   2,821     5,582       5,443     13,172  
Income tax expense (benefit)   5     (77 )     9     2  
Depreciation and amortization   623     2,127       1,242     2,581  
EBITDA   (7,039 )   21,507       (10,042 )   4,033  
Other non-cash adjustments          
Changes in fair value of derivative liability   497     (26,435 )     329     (18,735 )
Derecognition expense opon conversion of convertible debt   188           188      
Stock compensation for employees   (32 )   1,715       161     1,882  
Stock compensation for services       79           206  
Special Items          
Non-recurring legal settlements and ongoing matters and related legal fees   3,279           3,279      
Carryover effects of financial statement restatements in prior periods   1,222           1,222      
Non-recurring provision for credit losses on legacy matters   625           625      
Accounting fees related to the restatement of prior period financial statements   237           237      
Non-recurring impairment of right of use asset   100           100      
Non-recurring costs of spin-off   29           29      
Adjusted EBITDA $ (894 ) $ (3,134 )   $ (3,872 ) $ (12,614 )
Loss from operations $ (5,641 ) $ (8,866 )   $ (9,320 ) $ (15,943 )

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