POSaBIT Systems (PBIT) Q1 2024 earnings summary

Executive summary

• Adjusted Q1 2024 revenue was $4.5 million, with adjusted gross margin at $2.3 million (50%).

• Top-line revenue declined due to changes in payment processing and revenue recognition, but gross profit margin improved.

• The company is now cash flow positive on a monthly basis, following significant cost reductions.

• Point of Sale business experienced its fastest growth month in March, adding over 25 new locations across four states.

• Licensing contracts provide predictable, recurring cash flow, with $12 million expected over the next two years.

Financial highlights

• Q1 2024 revenue was $3.78 million, down 67% year-over-year and 25% from the prior quarter; adjusted revenue was $4.5 million, nearly flat sequentially.

• Adjusted gross margin rose to 50% in Q1 2024, up from 13% in the prior quarter and 21% year-over-year.

• Adjusted EBITDA loss improved to $800,000 from $2.6 million in the prior quarter.

• Net loss was $1.9 million, compared to $2.7 million in Q1 2023.

• Cash and cash equivalents stood at $900,000 at quarter-end, with low debt levels.

Outlook and guidance

• Annual run rate as of March 2024 exceeds $21 million in adjusted revenue and $10 million in adjusted gross profit.

• Management expects these run rates to increase as the business plan is executed.

• Company expects continued positive cash flow and profitability due to leaner cost structure.

• Anticipates ongoing strong contributions from licensing contracts and expansion in new markets.