Financial Performance - As of December 31, 2024, the company generated approximately $573.7 million in revenue, a decrease from $689.0 million in 2023, with a net income of $7.8 million and Adjusted EBITDA of $39.7 million, representing a 15.9% Adjusted Gross Profit Margin [29]. - Revenue for the years ended December 31, 2024 and 2023 was approximately $573.7 million and $689.0 million, respectively, with gross profit of $81.5 million and $88.6 million [59]. - The company has generated positive net income and cash flow from operations every year since inception, indicating strong financial health [59]. User Engagement and Market Presence - The company completed over 3.7 million user transactions since inception, totaling approximately $2.8 billion in transaction value, with an average of 14,961 monthly active users in 2024 [29]. - The company operates approximately 8,500 kiosks across 48 U.S. states, 10 Canadian provinces, and Puerto Rico, with a market share of 25% in the U.S. and 8% in Canada as of December 31, 2024 [50][44]. - The company has installed kiosks in approximately 1,100 out of over 9,000 total Circle K locations in the U.S. and Canada, representing a significant market presence [58]. - As of December 31, 2024, BDCheckout is available at approximately 7,600 retail locations across North America, enhancing user access to Bitcoin purchases [61]. Cryptocurrency Market Dynamics - In 2024, Bitcoin was reported as the largest payment network with over $19 trillion in transaction volume, surpassing Visa and Mastercard [42]. - Bitcoin represents 99% of total transaction volume for the year ended December 31, 2024, indicating heavy reliance on this cryptocurrency [502]. Global Expansion and Deployment - The total number of BTMs deployed globally grew from approximately 1,000 to 38,000 from January 1, 2017, to December 31, 2024, representing a CAGR of approximately 46% [44]. - Approximately 90% of installed BTMs worldwide are located in the U.S. and Canada, highlighting the significant market opportunity for the company [44]. - The company has entered into a master placement agreement with EG America LLC to install BTMs in approximately 900+ locations, marking a significant expansion [66]. - Approximately 90% of BTMs worldwide are located in North America, presenting an opportunity for international expansion [58]. Compliance and Regulatory Environment - The compliance team consists of 20 individuals with over 100 years of combined experience in regulatory compliance, ensuring robust KYC processes [53]. - User bans due to compliance issues represent approximately 4% of overall transaction volumes in a given month, reflecting the company's commitment to compliance [54]. - The company operates in a complex regulatory environment across the U.S., Puerto Rico, Canada, and Australia, with a heightened focus on cryptocurrency regulation [96]. - The company has implemented a compliance program to prevent its kiosks from being used for money laundering and terrorist financing [99]. - The company is not currently supervised by any banking, securities, or commodities regulator, but closely monitors regulatory changes [96][98]. Legal and Competitive Landscape - Legal proceedings against the company include a claim for $23 million in damages related to a breach of contract with Canaccord Genuity Corp [120]. - The total transaction value in the Canaccord claim is estimated to be up to $655 million following a merger [121]. - The company faces a civil complaint from the Iowa Attorney General alleging violations of the Iowa Consumer Fraud Act [123]. - The competitive landscape is intensifying with both traditional financial institutions and fintech companies entering the cryptocurrency market [504]. Operational Challenges - Equipment costs for new kiosks may increase significantly due to inflation, supply constraints, and labor shortages [503]. - The company has successfully managed inflationary cost increases through pricing, productivity, and cost-cutting initiatives [94]. Strategic Initiatives - The company plans to pursue strategic acquisitions to enhance capabilities in areas such as cyber security and compliance, supporting growth strategies [60]. - The company has lease commitments to acquire all kiosks for a bargain purchase option at the end of the lease term, financing approximately 3,500 BTMs [86][87]. - The company has a weighted average remaining life of 1.8 years for contracts with its top 10 retail partners, which typically have an initial term of about five years [36]. Financial Partnerships - Circle K represents approximately 23% and 27% of total revenues for the years ended December 31, 2024 and 2023, respectively, highlighting the importance of this partnership [78]. - As of December 31, 2024, the average daily USD balance held in fiat wallets on the Gemini exchange was approximately $0.5 million [83].
GSR II METEORA A(GSRM) - 2024 Q4 - Annual Report