RVYL RYVYL Inc

RYVYL Inc. (NASDAQ: RVYL) ("RYVYL” or the "Company"), a leading innovator of payment transaction solutions leveraging proprietary blockchain ledger and electronic payment technology for the diverse international markets, reported its financial results for the quarter ended March 31, 2024.

Operational Highlights First Quarter 2024

• Q1 2024 revenue increased 49% to $16.8 million, compared to Q1 2023.
  • RYVYL EU revenue grew to $7.1 million, up 185% compared to Q1 2023.
  • North American revenue grew to $9.7 million, up 10% compared to Q1 2023.
• Q1 2024 processing volume of $994 million increased by 4% from Q4 2023.
  • RYVYL EU processing business volume increased to $755 million, up 28% over Q4 2023.
  • North America processing business volume was $239 million, down 33% over Q4 2023.

“RYVYL makes payment technology simple by enabling intuitive, secure and compliant payments,” said Fredi Nisan, RYVYL’s CEO. “Leveraging this proprietary technology, we are actively pursuing new verticals and licensing opportunities, such as new PayFac as a service and new independent software vendor (ISV) relationships, which we believe will drive long-term growth.

“In Q1 2024, our RYVYL EU efforts continued to gain traction and delivered processing volume and revenue growth. However, recent changes in the banking compliance environment in the U.S. are affecting some of our high-risk verticals. As we navigate this transition, we remain focused on efficient capital management, to date repatriating $7.5 million from Europe to the U.S. while implementing cost control measures projected to benefit us in future periods. Additionally, we are accelerating business development in new verticals. While we expect Q2 2024 revenue to continue to be impacted, we believe our robust pipeline will fuel growth in the second half of 2024,” Nisan concluded.

Financial Summary for the First Quarter Ended March 31, 2024

• Revenue increased to $16.8 million, compared to $11.3 million in Q1 2023, reflecting growth in the acquiring business of RYVYL EU as well as the larger independent sales organization (ISO) and partnership network.
• Cost of revenue was $9.7 million, compared to $6.2 million in Q1 2023, reflecting greater transaction volume, resulting in higher processing fees paid to gateways and commission payments to ISOs.
• Operating expenses increased 2% to $8.9 million, compared to $8.8 million in Q1 2023.
• Other expense totaled $0.6 million, compared to $4.3 million for Q1 2023, reflecting debt reduction strategies.
• Net loss was $2.7 million, with total comprehensive loss of $3.1 million, or ($0.45) per basic share, compared to a net loss and total comprehensive loss of $8.0 million, or ($1.53) per basic share, in Q1 2023.
• Adjusted EBITDA improved to $(0.7) million, compared to ($3.0) million in Q1 2023. Adjusted EBITDA is a non-GAAP measure. Refer to the tables at the end of this press release for a reconciliation to GAAP.
• March 31, 2024 cash and restricted cash was $88.8 million and unrestricted cash was $10.5 million.

RYVYL management will host a conference call at 4:30 p.m. Eastern Time on Tuesday, May 14, 2024 to discuss the Company’s financial results for the first quarter ended March 31, 2024, provide a corporate update and end with a question and answer session. To participate, please use the following information and submit your questions in writing prior to the call at RYVYL@lhai.com.

Q1 2024 Conference Call and WebcastDate: May 14, 2024Time: 4:30 p.m. Eastern TimeUS Dial In: 1-877-407-4018International Dial In: 1-201-689-8471Webcast: WebcastCall me: Link

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 13707901. The Call me™ link will be made active 15 minutes prior to scheduled start time. A replay of the call will be available through July 14, 2024 at 1-844-512-2921 within the United States or 1-412-317-6671 when calling internationally and entering access ID 13745803. An archived version of the webcast will also be available for 90 days on the IR section of the RYVYL website or by clicking the webcast link above.

About RYVYL

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 proprietary blockchain ledger and electronic token technology for the diverse international markets, RYVYL is a leading innovator of payment transaction solutions reinventing the future of financial transactions. 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

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 and are characterized by future or conditional words such as "may," "will," "expect," "intend," "anticipate," “believe," "estimate" and "continue" or similar words. You should read statements that contain these words carefully because they discuss future expectations and plans, which contain projections of future results of operations or financial condition or state other forward-looking information.

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.

IR Contact: David Barnard, LHA Investor Relations, 415-433-3777, RYVYL@lhai.com

RYVYL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS(Dollars in thousands, except share and per share data)(Unaudited)

		March 31, 2024				December 31, 2023
ASSETS
Current Assets:
Cash and cash equivalents		$	10,523			$	12,180
Restricted cash			78,293				61,138
Accounts receivable, net of allowance for credit losses of $40 and $23, respectively			1,066				859
Cash due from gateways, net of allowance of $2,636 and $2,636, respectively			1,426				12,834
Prepaid and other current assets			2,954				2,854
Total current assets			94,262				89,865
Non-current Assets:
Property and equipment, net			290				306
Goodwill			26,308				26,753
Intangible assets, net			4,439				5,059
Operating lease right-of-use assets, net			4,036				4,279
Other assets			2,536				2,403
Total non-current assets			37,609				38,800
Total assets		$	131,871			$	128.665
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable		$	1,321			$	1,819
Accrued liabilities			4,653				5,755
Payment processing liabilities, net			83,916				76,772
Current portion of operating lease liabilities			717				692
Other current liabilities			456				504
Total current liabilities			91,063				85,542
Long term debt, net of debt discount			16,816				15,912
Operating lease liabilities, less current portion			3,522				3,720
Total liabilities			111,401				105,174
Commitments and contingencies
Stockholders' Equity:
Preferred stock, Series B, par value $0.01, 5,000,000 shares authorized; 55,000 shares issued and outstanding at March 31, 2024 and December 31, 2023			1				1
Common stock, par value $0.001, 100,000,000 shares authorized, shares issued and outstanding of 6,001,487 and 5,996,948, respectively			6				6
Additional paid-in capital			175,777				175,664
Accumulated other comprehensive income (loss)			(44	)			401
Accumulated deficit			(155,270	)			(152,581	)
Total stockholders' equity			20,470				23,491
Total liabilities and stockholders’ equity		$	131,871			$	128,665

RYVYL INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME(Dollars in thousands, except share and per share data)(Unaudited)

		Three Months Ended March 31,
		2024				2023
Revenue		$	16,774			$	11,291
Cost of revenue			9,743				6,178
Gross profit			7,031				5,113
Operating expenses:
Advertising and marketing			17				75
Research and development			1,393				1,936
General and administrative			2,042				1,452
Payroll and payroll taxes			3,569				2,714
Professional fees			1,035				1,803
Stock compensation expense			224				193
Depreciation and amortization			657				620
Total operating expenses			8,937				8,793
Loss from operations			(1,906	)			(3,680	)
Other income (expense):
Interest expense			(28	)			(1,729	)
Accretion of debt discount			(908	)			(2,622	)
Changes in fair value of derivative liability			-				168
Other income or expense			343				(111	)
Total other income (expense), net			(593	)			(4,294	)
Loss before provision for income taxes			(2,499	)			(7,974	)
Income tax provision			190				5
Net loss		$	(2,689	)		$	(7,979	)
Comprehensive income statement:
Net loss		$	(2,689	)		$	(7,979	)
Foreign currency translation adjustment			(445	)			(58	)
Total comprehensive loss		$	(3,134	)		$	(8,037	)
Net loss per share:
Basic and diluted		$	(0.45	)		$	(1.53	)
Weighted average number of common shares outstanding:
Basic and diluted			5,988,424				5,221,060

RYVYL INC.CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS(Dollars in thousands)(Unaudited)

		Three Months Ended March 31
		2024				2023
Cash flows from operating activities:
Net loss		$	(2,700	)		$	(7,979	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense			657				620
Noncash lease expense			70				913
Stock compensation expense			224				193
Accretion of debt discount			908				2,622
Changes in fair value of derivative liability			-				(168	)
Changes in assets and liabilities:
Accounts receivable, net			(207	)			296
Prepaid and other current assets			159				5,741	)
Cash due from gateways, net			11,408				119	)
Other assets			(391	)			(2,017
Accounts payable			(499	)			8,144
Accrued and other current liabilities			(1,248	)			(915	)
Accrued interest			-				709
Payment processing liabilities, net			7,144				8,101
Net cash provided by operating activities			15,525				16,379
Cash flows from investing activities:
Purchases of property and equipment			(22	)			(17	)
Net cash used in investing activities			(22	)			(17	)
Cash flows from financing activities:
Repayments on long-term debt			(4	)			-
Net cash used in financing activities			(4	)			-
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(1	)			(58	)
Net increase in cash, cash equivalents, and restricted cash			15,498				16,304
Cash, cash equivalents, and restricted cash – beginning of period			73,318				40,834
Cash, cash equivalents, and restricted cash – end of period		$	88,816			$	57,138
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest		$	-			$	1,000
Income taxes		$	-			$	-

Use of Non-GAAP Financial Information

Adjusted earnings before interest, taxes, depreciation, and amortization (“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, changes in the fair value of derivative liabilities, losses on the extinguishment and derecognition expenses on the conversion of convertible debt, non-cash stock-based compensation expense, acquisition-related expense, non-recurring provisions for credit losses on legacy matters, accounting fees related to the restatement of prior period financial statements, non-recurring costs related to the spin-off of a subsidiary, 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.

Because of these and other limitations, you should consider Adjusted EBITDA alongside our other GAAP-based financial performance measures, net income (loss) and our other GAAP financial results. The following table presents a reconciliation of Adjusted EBITDA from net loss, the most directly comparable GAAP measure, for the periods indicated:

Reconciliation of Net Income (Loss) attributable to RYVYL, Inc., to Adjusted EBITDA for theThree Months Ended March 31, 2024 and 2023(in thousands, except share and per share data)Unaudited

		Three Months Ended March 31,
		2024				2023
Net loss		$	(2,689	)		$	(7,979	)
Interest expense			28				1,729
Accretion of debt discount			908				2,622
Income tax expense (benefit)			190				5
Depreciation and amortization			657				620
EBITDA			(905	)			(3,004	)
Other non-cash adjustments:
Change in fair value of derivative liability			-				(168	)
Derecognition expense on conversion of convertible debt			-				-
Stock compensation expense			224				193
Adjusted EBITDA		$	(682	)		$	(2,978	)
Loss from operations		$	(1,906	)		$	(3,680	)