POSaBIT Systems (PBIT) Q3 2024 earnings summary

Executive summary

• Achieved positive free cash flow and adjusted EBITDA for the second consecutive quarter, with adjusted EBITDA rising 53% quarter over quarter to $148,000 in Q3 2024.

• Launched the 1.0 version of the e-commerce and menu platform, adding nearly 40 merchants in 90 days and targeting 50 merchants by year-end and over 200 by the end of next year.

• Expanded POSaBIT Pay, adding 40 new stores in Q3, and all payment merchants migrated to the new POSABIT One platform.

• Focus remains on growing cash reserves, maintaining adjusted EBITDA profitability, and expanding POS and Payments business lines.

Financial highlights

• Total revenue was $4.1 million in Q3 2024, down 4–5% from Q2; adjusted revenue was $4.98–$5 million, flat quarter over quarter.

• Adjusted gross profit was $2.71 million (54% of adjusted revenue), down from $3 million (59%) in Q2.

• Adjusted EBITDA was $148,000, up from $97,000 in Q2.

• Net loss was $2.1 million, compared to $454,000 in Q2 and $7.7 million in Q3 2023.

• Cash and cash equivalents at quarter end were $900,000–$908,000, down from $1.1 million in Q2.

Outlook and guidance

• Management expects annualized adjusted revenue of ~$20 million and adjusted gross profit of ~$11 million based on Q3 run rates.

• Optimism for regulatory changes in 2025, including potential cannabis rescheduling and SAFE Banking, which could enable full credit card processing.

• Anticipates further increases in run rates as business plan execution continues.