RTB Digital (RTB) Q3 2020 earnings summary

Executive summary

• Q3 revenue fell 79.3% YoY to $3.06M; gross profit was $1.21M and net loss was $490K, versus $1.26M net income a year earlier.

• Revenue reflected the ChargeSavvy ecosystem exit and prioritization of Fiserv compliance/integration and Gen3 development; processing volume shifted to another ISO and gateway.

• Management said platform capacity investments were complete, with daily processing above $1M targeted in Q1 2021; COVID-19 could delay the $1B annual transaction-volume goal by one or two quarters.

Financial highlights

• 9M revenue declined 71.0% YoY to $5.54M; gross profit was $2.03M versus $8.47M, and operating loss widened to $1.61M from $260K.

• 9M net loss was $789K versus $1.38M; results included a $2.63M gain from extinguishment of convertible debt, $926K derivative expense and $384K derivative fair-value loss.

• Q3 operating loss was $245K versus $1.02M operating income; net loss included $926K derivative expense, partly offset by an $819K derivative fair-value gain.

Outlook and guidance

• Management targeted transaction processing above $1M/day within Q1 2021 and stated the $1B annual processing-volume goal requires close to $90M/month; COVID-19 may push the goal back one or two quarters.

• Management expected European operations to match or exceed U.S. volume and projected Gen3 to materially improve cost of revenue and operating margins.

• Plans included an uplisting to a senior exchange within 18 months and organic growth; management said no reverse split was planned and a NASDAQ ticker reservation had been filed.