Financial Performance Overview

The company’s financial results for the year ended December 31, 2024 show a mixed performance, with revenue declining by 15% compared to the prior year, but the international segment seeing strong growth of 123.5%. The North America segment experienced a significant 62.9% drop in revenue, which was the primary driver of the overall revenue decline.

Revenue and Profit Trends

• Total revenue decreased by $9.9 million, or 15%, in 2024 compared to 2023. This was driven by a $30.8 million (62.9%) decline in the North America segment, partially offset by a $20.9 million (123.5%) increase in the International segment.
• The decrease in North America revenue was due to the loss of revenues associated with the product transition away from terminal-based to app-based processing.
• The increase in International revenue was driven by continued growth in processing volume, which grew from $1.7 billion in 2023 to $3.7 billion in 2024.
• Gross profit decreased by $3.3 million, or 12.8%, due to the revenue declines, though the gross margin improved slightly from 39% to 40%.
• The company reported a net loss of $26.8 million in 2024, an improvement from the $53.1 million net loss in 2023.

Strengths and Weaknesses

Strengths:

• Strong growth in the International segment, with a 123.5% increase in revenue
• Improved gross margin, increasing from 39% to 40%
• Reduction in net loss from $53.1 million to $26.8 million

Weaknesses:

• Significant decline in North America revenue (62.9%) due to product transition issues
• Impairment charges of $9.7 million for goodwill and intangible assets in the North America segment
• Ongoing liquidity challenges in the North America segment, with cash not expected to be sufficient to fund operations for the next 12 months

Outlook

The company’s outlook is uncertain in the near-term due to the liquidity challenges in the North America segment. Management has outlined a plan to address this, including accelerating business development efforts, implementing cost control measures, selling non-core assets, repatriating profits from the International segment, and raising additional capital. However, there is no assurance that this plan will be successfully executed.

The long-term outlook depends on the company’s ability to recover the lost revenues in North America through the new licensing product and continued growth in the International segment. If successful, the company could return to profitability, but the timing and likelihood of this outcome remains unclear based on the information provided.