GSR II METEORA A(GSRM) - 2023 Q2 - Quarterly Report

Operations and Market Presence - As of June 30, 2023, Bitcoin Depot operated approximately 6,350 Bitcoin ATMs (BTMs) across North America, with 5,195 retail locations accepting the BDCheckout product[265] - Bitcoin Depot's kiosks are exclusively deployed in over 1,500 Circle K stores in the U.S. and Canada, enhancing its market presence[268] - The company has an additional 981 BTMs with logistics providers for redeployment, which is anticipated to increase transaction volume and revenue[279] Financial Performance - Revenue for the six months ended June 30, 2023, was $361.1 million, representing a 9.9% year-over-year growth despite a 37% decline in Bitcoin's market price during the same period[269] - Revenue for the three months ended June 30, 2023, was$ 197.5 million, an increase of $29.6 million or 17.6% compared to the same period in 2022[295] - Revenue for the six months ended June 30, 2023, increased by approximately$ 38.7 million, or 12.0%, compared to the same period in 2022, driven by kiosk network expansion and increased transaction sizes[312] - Kiosk transaction revenue increased by $30.5 million, or 18.3%, driven by higher average transaction amounts and an expanded user base[299] - Kiosk transaction revenue rose by approximately$ 42.3 million, or 13.3%, for the six months ended June 30, 2023, primarily due to an increase in the number of kiosks in service and higher user adoption[314] User Engagement and Transactions - The median kiosk transaction size was $200 as of June 30, 2023, consistent with the previous quarter[278] - The average returning user transaction count was 9.2 for the three months ended June 30, 2023, indicating user retention and engagement[278] - Approximately 99.8% of total transaction volume was attributable to Bitcoin transactions, which currently account for 100% of transaction volumes[338] - For the three months ended June 30, 2023, Bitcoin accounted for 99% of total transaction volume, indicating strong reliance on this cryptocurrency[409] Costs and Expenses - Cost of revenue (excluding depreciation and amortization) rose by$ 18.0 million, or 12.1%, primarily due to increased transaction volume and costs associated with relocating kiosks[301] - Selling, general and administrative expenses surged by $8.9 million, or 123.3%, attributed to higher payroll costs and increased professional services expenses[308] - Operating expenses increased by approximately$ 12.1 million, or 80.9%, for the six months ended June 30, 2023, largely due to merger-related costs and higher payroll expenses[332] - Cryptocurrency expenses increased by approximately $18.3 million, or 7.0%, for the six months ended June 30, 2023, driven by a greater number of kiosks in service[321] Merger and Corporate Changes - Bitcoin Depot completed a merger on June 30, 2023, changing its name from GSR II Meteora Acquisition Corp. to Bitcoin Depot Inc.[272] - The company recognized an expense of$ 9.2 million related to the PIPE Financing and merger completion on June 30, 2023[335] Cash Flow and Financing - Cash provided by operating activities increased to approximately $26.6 million for the six months ended June 30, 2023, compared to$ 11.1 million for the same period in 2022, reflecting revenue growth from the expansion of the BTM network[361] - Cash used in financing activities increased to $36.7 million for the six months ended June 30, 2023, compared to$ 10.4 million for the same period in 2022, primarily due to higher principal payments on note payable[363] - The company borrowed $20.8 million under the Amended and Restated Credit Agreement, subject to an annual interest rate of 17%[354] - The PIPE Financing represents gross proceeds of up to approximately$ 50 million, excluding premiums and reimbursements[356] Strategic Initiatives - The company is in discussions with retail partners to expand the BDCheckout offering into additional locations[283] - The company currently supports Bitcoin purchases at only 35 kiosks, representing less than 1.0% of total kiosks as of June 30, 2023[288] - The company expects increased costs and headcount associated with accounting, finance, public reporting, and legal due to being a public company[340] Risks and Challenges - The company faces significant competition in the digital financial system, requiring continuous innovation and competitive pricing to maintain market position[411] - The cost of new kiosks may be significantly impacted by inflation, supply constraints, and labor shortages, potentially leading to higher acquisition costs[410] - The company has not historically hedged foreign currency translation risk, with insignificant impacts from currency fluctuations on consolidated revenues for the three months ended June 30, 2023[406]