Edmonton, Alberta, August 13, 2024 – Bitcoin Well Inc. (TSXV: BTCW; OTCQB: BCNWF), a non-custodial bitcoin business focused on promoting independence, has announced its financial and operational results for the second quarter and six months ending on June 30, 2024.
Key highlights
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Net income for the 3-month period ended June 30, 2024, was $1.1 million (compared to a net loss of $1.5 million in Q2 2023), with a net loss of $7.0 million for the 6-month period ending June 30, 2024 (compared to a net loss of $5.0 million in 2023).
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Revenue reached $23.3 million for the 3-month period ended June 30, 2024 (a 54% increase from Q2 2023) and $39.4 million for the 6-month period ending June 30, 2024 (a 43% increase from 2023).
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Revenue growth was primarily driven by significant expansion on the Online Bitcoin Portal since its launch in Q4 2022.
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As of June 30, 2024, the Online Bitcoin Portal has attracted over 20,000 unique users, marking a 33% increase from March 31, 2024, and an 81% increase from December 31, 2023.
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Gross profit for the 3-month period ended June 30, 2024, was $1.0 million (a 13% decrease from Q2 2023), while for the 6-month period ending June 30, 2024, it was $1.8 million (a 19% decrease from 2023).
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The decline in gross profit margin was attributed to an evolving sales mix towards the Online Bitcoin Portal, which has lower margins but higher scalability. The company is working on strategies to enhance the gross margin on the Bitcoin Portal.
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Adjusted EBITDA was negative $0.6 million for the 3-month period ended June 30, 2024 (compared to negative $0.3 million in Q2 2023) and negative $1.1 million for the 6-month period ending June 30, 2024 (compared to negative $0.6 million in 2023).
Financial overview
|
For the three months ended, |
For the six months ended, |
|||||||
|
June 30, 2024 |
June 30, 2023 |
June 30, 2024 |
June 30, 2023 |
|||||
|
Revenue |
$23,262,793 |
$15,112,693 |
$39,443,913 |
$27,529,453 |
||||
|
Gross Profit |
1,042,109 |
1,202,286 |
1,844,920 |
2,288,040 |
||||
|
Adjusted EBITDA (1) |
(640,116) |
(332,307) |
(1,070,196) |
(547,413) |
||||
|
Adjusted Cash Flow (1) |
(901,137) |
(807,973) |
(1,576,787) |
(1,472,580) |
||||
|
Net income (loss) |
1,124,954 |
(1,453,259) |
(6,999,739) |
(4,976,627) |
||||
|
Total comprehensive loss |
(1,717,856) |
(823,829) |
(3,259,594) |
(1,829,909) |
||||
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(1) See Non-IFRS Measures.
During the second quarter of 2024, revenue amounted to $23.3 million, up from $15.1 million in Q2 2023 by 54%, driven by higher transaction volumes on the Online Bitcoin Portal, which grew from $6.5 million in Q2 2023 to $16.6 million in Q2 2024, a 155% increase. Year-to-date revenue increased to $39.4 million from $27.5 million in 2023, with revenue from the Online segment reaching $26.3 million for the six-month period, up from $11.8 million in the previous year, representing a 123% growth in the Bitcoin Portal.
Gross profit decreased to $1.0 million in Q2 2024 from $1.2 million in the previous year, marking a 13% decrease. Similarly, gross profit for the six months ending June 30, 2024, declined to $1.8 million from $2.3 million in 2023, a 19% decrease. Changes in sales mix, including higher revenue from the Online Bitcoin Portal, contributed to the decline. The Company is actively working on enhancing the gross margin on the Bitcoin Portal.
Adam O’Brien, Founder & CEO of Bitcoin Well, commented on the growth of the Bitcoin Portal, stating, “We are pleased with the significant rate of growth we are seeing with the Bitcoin Portal, which has now exceeded 22,000 unique signups. In addition, our efforts to continue to increase the gross profit margin in the Bitcoin Portal have been fruitful, and we will continue these initiatives, including building products like our Lite Accounts and Cash Vouchers. Our next focus is on enabling the purchase of gift cards to popular merchants and stores with bitcoin, which will not only contribute to a higher gross margin but also bring us closer to the goal of enabling people to live on bitcoin in self-custody.”
The Bitcoin Well’s Bitcoin ATM segment saw a decline in Q2, with revenue amounting to $6.6 million and Gross Profit of $0.8 million (compared to $8.6 million in revenue and $1.1 million in gross profit in Q2 2023). However, the Company has implemented a revised ATM marketing and pricing strategy in Q3, showing early signs of success. Integration of Bitcoin ATMs into a broader ecosystem with products like Cash Vouchers has become possible due to the Company’s proprietary software, ghostATM.
Explaining the decline in Bitcoin ATM volume, Adam stated, “The decline in Bitcoin ATM volume was expected, as we have been focusing on building the Bitcoin Portal for over 2 years now. With the rapid growth of the Bitcoin Portal, we can now optimize our Bitcoin ATM software to gain a market advantage that sets us apart from other bitcoin businesses, facilitating a complete bitcoin payments ecosystem.”
Total operational expenses (excluding depreciation, accretion, and financing fees) increased to $1.7 million in Q2 2024 from $1.5 million in the previous year, primarily driven by significant investments in marketing and advertising to promote the usage of the Online Bitcoin Portal.
Professional fees also rose in Q2 2024, mainly due to non-recurring legal fees related to the Company’s litigation against Rapid Cash for their alleged breach of contract in October 2023, as well as preparatory regulatory filings for potential future capital raises. This increase was partially offset by a significant reduction in salaries, wages, and other overhead costs in 2024. The Company has redirected these savings towards marketing and advertising initiatives, contributing to the growth seen in the first half of 2024.
Year-to-date operational expenses saw a slight increase to $2.9 million from $2.8 million in the previous year, driven by the enhanced investments in marketing and advertising initiatives, offset by reduced salaries, wages, and overhead costs.
Adjusted EBITDA declined to negative $0.6 million in Q2 2024 from negative $0.3 million in Q2 2023, and negative $1.1 million for the six months ending June 30, 2024, from negative $0.5 million in the previous year. These declines were primarily attributed to lower gross profit, higher marketing and advertising expenses, and increased professional fees incurred due to the litigation against Rapid Cash.
For the full disclosure of financial statements, interested parties can access the Bitcoin Well website, SEDAR+, or contact the Company directly.
Non-IFRS measures
The Company utilizes certain terms, such as ‘Adjusted EBITDA’ and ‘Adjusted Cash Flow,’ that are not standardized under International Financial Reporting Standards (IFRS), making comparisons with other entities challenging. Interested parties are encouraged to refer to the Company’s Management Discussion & Analysis for detailed definitions, calculations, and reconciliations of these non-IFRS measures with the closest IFRS measure. These measures are provided as supplemental information for performance evaluation and should not be solely relied upon for investment decisions.
For more information and to access financial statements and MD&A, visit the Bitcoin Well website or SEDAR+.
About Bitcoin Well
Bitcoin Well aims to facilitate financial independence by making bitcoin accessible and convenient for everyday users. The company’s Bitcoin ATM and Online Bitcoin Portal units generate cash flow to support this mission.
Join the investor community and follow Bitcoin Well on various platforms to stay updated on their business endeavors.
Contact information for Bitcoin Well:
To arrange a virtual meeting with Founder & CEO Adam O’Brien, use the following link: (link provided).
For investor and media inquiries, contact Adam O’Brien at 1-888-711-3866 or ir@bitcoinwell.com.
The TSX Venture Exchange and its Regulation Services Provider do not endorse the content of this release.
Forward-looking information
Statements in this news release may contain forward-looking information, with future-oriented statements identified by terms like “anticipate,” “plan,” “estimate,” “expect,” and similar expressions. Bitcoin Well cautions that actual results may differ due to various factors, including economic conditions, market volatility, demand for cryptocurrency services, force majeure events, user growth, regulatory changes, and competitive factors. Interested parties are advised to review the risk factors detailed in the Company’s MD&A for further insights.
Bitcoin Well believes that the forward-looking information outlined is reasonable, but there is no guarantee of accuracy, and caution is advised against heavy reliance on such information. The company disclaims any obligation to update or revise forward-looking information, except where required by applicable securities regulations.
For detailed cautionary notes, refer to the Bitcoin Well Management Discussion and Analysis.
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