The following is a summary of the Banxa Holdings Inc. (BNXAF) Q2 2024 Earnings Call Transcript:
Financial Performance:
After financial difficulties in 2022 and 2023, Banxa has optimized its cost base leading to improved gross profit and adjusted EBITDA for FY '24.
A large turnaround was seen whereby the business could report a profit of over $5 million if repeating its November 2021 total transaction volume of $250 million due to extensive internal changes.
The total transaction volume (TTV) for FY '22 surpassed $1.4 billion, and despite a reduction in FY '23, the half-yearly TTV for December '23 showed promising progress.
Gross profit rose by 39% year-on-year as attempts were made to maximize operational efficiency.
Operating loss saw a significant reduction from Q2 to Q3, largely due to efforts around TTV and gross margin percentage.
The company's net loss position was positively influenced by a decrease in capital costs.
Fluctuations due to foreign exchange impacted the net loss position.
Business Progress:
Banxa is strengthening its business foundation by focusing on driving the core performance of its product and expanding into the areas of wallets, Web3 gaming, and NFTs.
The company has forged key partnerships with Trust Wallet, Sui, and Backpack Exchange to widen its reach.
It holds licenses across multiple local markets and is the first crypto business to be registered with the U.K. Financial Conduct Authority.
By the end of 2024, Banxa aims to operate in 45 U.S. states while also investing in core markets like Canada, Europe, and Australia.
They have made substantial investments to improve compliance and expand the team.
They have implemented a payment orchestration platform to boost the success rate of transactions, already leading to a 15-20% increase in new customer card conversion.
Partnerships with MetaMask and Trust comprise 30% to 40% of transaction volumes.
They anticipate future profitability starting from January 2024, and are working towards reducing their cost of capital.
Strategies are underway to increase shareholder value, risk-profile improvements, visibility, and investor interest.
More details: ArrowMark Financial IR
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