GSR II METEORA A(GSRM) - 2024 Q1 - Quarterly Report

Business Operations - As of March 31, 2024, Bitcoin Depot operates approximately 7,100 Bitcoin ATMs across North America, maintaining a leading position in the cash-to-Bitcoin BTM market [222]. - The number of installed kiosks increased to 7,061 as of March 31, 2024, up from 6,334 in the previous year [233]. - Bitcoin Depot's largest BTM deployment is with Circle K, with approximately 1,300 kiosks installed in their stores as of March 31, 2024 [224]. - The company has expanded its BDCheckout product to approximately 6,700 retail locations as of March 31, 2024 [222]. - The company currently supports Bitcoin purchases from users at only 28 kiosks, which is less than 1.0% of the total kiosks [244]. - The company has no open purchase orders for kiosks as of March 31, 2024 [294]. Financial Performance - Revenue for the three months ended March 31, 2024, was $138.5 million, a 1.2% increase compared to$ 136.7 million for the same period in 2023, despite Bitcoin's market price increasing by 150% during that time [225]. - Revenue for the three months ended March 31, 2024, decreased by $25.1 million, or 15.3%, compared to the same period in 2023, primarily due to a decrease in kiosk transaction revenue [253]. - Kiosk transaction revenue decreased by$ 25.2 million, or 15.5%, for the three months ended March 31, 2024, attributed to a decrease in the number of users and transaction volume, with regulatory changes in California accounting for approximately 50% of the revenue decline [257]. - Adjusted Gross Profit for the three months ended March 31, 2024, was $17.252 million, down from$ 22.303 million in the same period in 2023 [282]. - Adjusted EBITDA for the three months ended March 31, 2024, was $4.885 million, compared to$ 13.633 million for the same period in 2023 [287]. - The company reported a net loss of approximately $4.2 million during the three months ended March 31, 2024 [273]. - Net loss for the three months ended March 31, 2024, was$ 4.2 million, compared to a net income of $6.1 million for the same period in 2023, representing a decline of$ 10.3 million [252]. Expenses - The cost of revenue (excluding depreciation and amortization) decreased by $20.0 million, or 14.2%, for the three months ended March 31, 2024, primarily due to a decrease in transaction volume and regulatory changes [260]. - Cryptocurrency expenses decreased by$ 19.2 million, or 15.0%, for the three months ended March 31, 2024, compared to the same period in 2023, mainly due to lower transaction volume [262]. - Operating expenses increased by $2.9 million, or 21.4%, for the three months ended March 31, 2024, compared to the same period in 2023, driven by higher selling, general, and administrative expenses [252]. - Selling, general and administrative expenses increased by$ 2.8 million, or 25.6%, for the three months ended March 31, 2024, due to higher payroll costs from an increase in headcount from 92 to 138 [268]. - Other expenses increased by approximately $1.9 million, or 57.8%, for the three months ended March 31, 2024, primarily due to increased interest expense [269]. - Floorspace lease expenses decreased by$ 0.5 million, or 5.5%, for the three months ended March 31, 2024, compared to the same period in 2023 [266]. - Kiosk operations costs decreased by $0.3 million, or 6.9%, for the three months ended March 31, 2024, compared to the same period in 2023 [267]. Regulatory Impact - New regulations in California will limit the amount of funds that can be accepted or dispensed at crypto kiosks to$ 1,000 per day starting January 1, 2024, which may impact revenue [229]. - The company assesses legal contingencies and records estimates of probable losses when they can be reasonably estimated [297]. - The company believes that adequate provisions for resolution of all contingencies and claims have been made for probable losses that are reasonably estimable [300]. Cash Flow and Capital - Cash provided by operating activities decreased by $8.7 million for the three months ended March 31, 2024, primarily due to a$ 10.3 million decrease in net income [291]. - The company had working capital of approximately $7.2 million as of March 31, 2024, with cash and cash equivalents of approximately$ 51.7 million [273]. - Net cash used in financing activities increased by $17.4 million for the three months ended March 31, 2024, compared to the same period in 2023, driven by a$ 15.2 million increase in proceeds from notes payable [293]. - The company announced a share repurchase program to buy back up to $10 million of its Class A common stock, with$ 0.4 million spent on repurchases by March 31, 2024 [280]. Accounting Standards - The company adopted ASU 2021-08 effective January 1, 2023, with no impact on the consolidated financial statements [302]. - The company is still assessing the impacts of ASU 2023-06, ASU 2023-07, ASU 2023-08, and ASU 2023-09 on its consolidated financial statements [304][305][307][306]. Market Risk - The company is exposed to market risk from changes in foreign currency exchange rates and interest rates, managed through normal operating and financing activities [309].