Ryvyl Inc (RVYL) 2024 Q1 法說會逐字稿

Good afternoon, everyone, and welcome to RYVYL Inc's first quarter 2024 conference call.

(Operator Instructions)

The earnings press release accompanying this conference call was issued at the close of the market today.

The quarterly report, which includes the company's results of operations ended March 31, 2024, was filed with the SEC today.

A replay of this call is available on the Investor Relations section of the RYVYL website in the events/quarterly earnings section.

As a reminder, this call is being recorded.

Before we begin, I would like to remind you that today's call contains certain forward-looking statements from our management concerning future events.

These forward-looking statements are based on the company's current beliefs, assumptions, and expectations regarding future events, which in turn are based on information currently available to the company and contain projections of future results of operations or financial condition or state other forward-looking information.

By their nature, forward-looking statements address matters that are subject to risks and uncertainties.

A variety of factors could cause actual events and results to differ materially from those expressed and/or contemplated by the forward-looking statements.

Other risk factors affecting the company are discussed in detail in the company's filings with the SEC.

The company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by applicable laws.

I will now hand the call over to Ben Errez, Chairman of RYVYL.

Please go ahead.

Thank you.

Good afternoon, everyone, and thank you for joining us today.

In the first quarter of 2024, we delivered solid growth, with revenue increasing 49% over the same period in 2023, reflecting particularly strong international results, which grew 185% compared to first quarter of 2023.

Processing volumes continued to grow, reaching $994 million in the first quarter of 2024, up 5% compared to the fourth quarter of 2023, with our international segment increasing 28% to $755 million.

However, as expected and reviewed in March, revenue declined sequentially due to near-term issues affecting our North America business.

I'll provide an update and review some of the actions we've taken to manage the situation.

New regulations and the overall compliance environment related to some of the high-risk verticals we service led us to change banking partners and begin a product transition in the North American Merchant Services segment.

In addition to implementing cost control measures, we are accelerating business development efforts to drive volumes in new vertical markets such as insurance and online businesses.

As we expand markets, we have built a sales pipeline in new verticals that we believe will begin to further ramp North American business volume in third quarter of 2024.

Additionally, we are investing in engineering and development to enhance our product offerings.

One factor driving new business is the shift from terminal-based processing to mobile app-based processing.

This transformative change will help us expand our customer base by reaching into new verticals and increase business retention by improving service and engagement with existing customers, both at the merchant level as well as the consumer level.

Now I'll discuss some of our key growth initiatives and achievements.

Expanding our international business is a strategic priority.

As the first Visa partner in the Balkan region, we completed testing the new Visa Direct integrated services and are pleased to share that we are now activated in production to offer Visa Direct payouts for our business clients.

The integration will enable RYVYL (EU) to leverage Visa Direct's network capabilities, provide superior Banking as a Service, and create new revenue streams.

Our partnership will enable customers to send funds to authorized accounts, e-wallets and debit cards in over 80 countries across multiple currencies.

In February 2024, RYVYL (EU) formed a collaboration with ACI Worldwide, a global leader in mission-critical real-time payment software.

We plan to onboard our e-commerce merchant payment service provider customers onto the award-winning ACI Payments Orchestration Platform, enabling them to orchestrate payments using one solution, one platform, and one API integration for optimal conversion rates and minimal operational costs.

This integration will allow merchants and PSPs to provide customers with a more seamless and secure customer journey.

We are integrating the ACI solution into our offering and expect it to be released by early third quarter.

We retained our coyni technology to leverage as part of our total suite of solutions for more efficient and highly scalable transaction processing in both North America and eventually in the EU. coyni provides an easy-to-use customer experience.

We had been testing coyni's mobile-based processing in the U.S. in the first quarter and expect to formally launch this summer and ramp volume over the course of 2024.

In the EU market, we received license and merchant processing approval for coyni, and we have a clear line of sight for additional business opportunities.

Our Banking as a Service offering continued to gain traction this quarter, as transaction volume exceeded an impressive $600 million with the support of several institutional and banking partners.

Our Banking as a Service platform offers API integrations and foreign exchange capabilities in more than 40 different currencies with local settlements.

The service authorizes transactions 24 hours a day on business days and enables payup methods, including real-time electronic funds or direct deposits.

In addition, our Banking as a Service readily traces transactions, reduces fraud, and maintains strict compliance requirements.

We expect this strategic offering will be a long-term growth driver in a lucrative market.

And now, to discuss the details of our financial results, I'd like to turn the call over to our Chief Financial Officer, George Oliva.

George, the floor is yours.

Thank you, Ben.

I'll review our first quarter of 2024 financial performance.

Revenue increased 49% to $16.8 million compared to $11.3 million in the first quarter of 2023, reflecting growth in our acquired businesses and RYVYL (EU) and our continued expansion of our independent sales organization, known as an ISO and partnership network.

North America revenue increased 10% to $9.7 million for the first quarter of 2024 compared to the first quarter of 2023.

International first quarter revenue increased 185% to $7.1 million for the first quarter of 2024 compared to first quarter 2023.

Cost of revenue was $9.7 million for the first quarter 2024 compared to $6.2 million in first quarter of 2023.

The increase is primarily attributable to growth in transaction volume, which resulted in higher processing fees paid to gateways and commission payments to ISOs in both North America and International segments.

Operating expenses were $8.9 million compared to $8.8 million for the first quarter of 2023.

Other expenses totaled $600,000 for the first quarter of 2024 compared to other expense of $4.3 million for the first quarter of 2023.

Our debt reduction strategies resulted in a $1.7 million decrease in interest expense and a $1.7 million decrease in accretion of debt discount.

Adjusted EBITDA was negative $0.8 million in the first quarter of 2024 compared to negative $3.0 million in the first quarter of 2023.

Regarding liquidity, we are carefully managing our capital.

Leveraging our strong growth in the EU, we repatriated $7.5 million to date from Europe to shore up the U.S. capital resources.

At the corporate level, as of March 31, 2024, cash and restricted cash balance was $88.2 million.

Unrestricted cash was $10.5 million and working capital was $3.2 million.

I will now turn the call over to Min Wei, our Chief Operating Officer, to provide a review of business operations and our outlook.

Thank you, George.

I'll detail the processing volumes for our verticals, discuss some first-quarter highlights, and then provide the outlook for the second quarter of 2024.

Our first-quarter processing volume across all channels was $994 million versus our expected volume of $900 million to $950 million.

This is about a 5% increase sequentially and an increase of about 76% from our first quarter 2023 volume.

Our North American Merchant Services business, including RYVYL Block, ChargeSavvy, American Samoa, and other portfolios processed $239 million in the first quarter or about 33% lower than the fourth quarter's $356 million volume and 21% lower than the same period a year ago.

This is primarily attributable to the reduced processing volume for some of the high-risk verticals we service and coincides with the product transition from terminal-based processing to mobile app-based processing.

We expect North America volume recovery to pick up steam in the second half of this year.

For our FX and international payments portfolio, including the acquired Transact Europe business, now RYVYL (EU), and our new Banking as a Service offering, we processed $755 million in the first quarter compared to $590 million in business volume in the fourth quarter, an increase of 28%.

This represents a 140% increase from the first quarter of $315 million in the first quarter 2023.

We are making major strides in technology development to augment our product offerings and drive new revenue streams.

As communicated on the last call, we introduced our mobile app payment channel and MPOS capability for delivery businesses in the U.S..

We are making rapid progress on PayFac as a service and independent software vendor partnerships that will further complement our existing sales channels.

In the EU market, we are close to completing a revamp of our banking system software that connects with our partners and allows faster money movements for our business customers.

We expect the growth momentum to continue at a faster pace than planned and help offset part of the near-term slowdown in North America.

Turning to our outlook for the second quarter, we expect processing volume to be in the range of $850 million to $900 million.

This is lower than in first quarter 2024 volume, due to compliance and regulatory changes in some of the U.S. high-risk verticals we service, and that has effectively curtailed transactions.

We are improving our product solution that is being rolled out to rebuild the volume.

Our total year 2024 volume expectation is over $5 billion.

For our second-quarter revenue outlook, we expect to be in the range of $12 million to $14 million, a decrease of approximately 17% to 28% sequentially and a 5% to 19% decrease year over year.

As we rebuild the business volume for the verticals we service in the U.S. in the coming few months, we will advise if we have any material change to the total revenue guidance of $90 million to $100 million.

We are maintaining our target for full-year adjusted EBITDA at $1 million to $5 million.

This concludes my remarks.

I'd like to now turn the call back to Ben Errez, our Chairman, to begin our Q&A.

Thank you, Min. Prior to this call, we have received a number of questions that are of interest to all shareholders.

Before opening the Q&A to analysts, we will address those.

The first question I'll direct to Fredi.

Why are you confident that you'll be able to double the revenues in the second half of 2024 compared to the first half?

Thank you, Ben, and thank you for everyone listening.

We expected to continue a great momentum in Europe via our [PSC, what we call ISO, then] agent portfolio in Europe.

And in the U.S., we are opening new verticals and especially very excited about the PayFac as a service solution and licensing model that we put in Europe and implementing as well in the U.S. for our revenue stream and growth.

Second is our relationship with ACI.

We announced it a few months back about our relationship with this new gateway and we are in the integration process and we hope to get it live in the beginning of Q3, and that will enable us to turn on the -- and move our customer into this platform to allow a faster integration in other solutions that exist with this relationship, for example, tokenization system with the new network for Visa and MasterCard, [point of] banking to offer a quick push to cloud in Visa Direct, another great feature that they bring to the table.

And the third one that we are very excited to announce is Visa Direct.

We just finalized the integration and certification with Visa, and we can go live now and push money through that new network and relationship.

And that will allow us to leverage the Visa Direct network to push money in 80 different countries, and we started with the first five, and we already started pushing money in Canada.

So very excited about this and leveraging that solution and offer that to our businesses and our Banking as a Service and of course, our PayFac solution.

So very, very excited.

And this is how we see the company growth in the second half of this year.

So very excited.

Thank you.

Thanks, Fredi.

The next question is for Min. How did revenue trend in Q1?

What is being done to rebuild momentum and what is your forecast for profitability?

Thank you, Ben.

To answer the question, Q1 was affected due to changes in technology and banking compliance, which is impacting some of our high-risk verticals, which has continued into Q2.

As we reported, these issues have affected the U.S., while Europe continues on a stronger growth trajectory.

In the U.S., we're expanding into new verticals to diversify, and we're working on specific identified business opportunities in these new verticals.

In addition, we started to monetize our Platform as a Service licensing business that do not have the same constraints that affected the Q1 results.

Although these new revenue streams will take time to materialize, we are building momentum in these new verticals.

In terms of the question about profitability, based on our expected revenue and expense run rate, we expect that adjusted EBITDA in the second half to be positive and the full year to be in the range of $1 million to $5 million.

As we have stated in the past, that $100 million revenue should be positive to EBITDA and at $120 million revenue we expect to be profitable.

It is our plan to continue focusing on resources to accelerate revenue growth and reduce noncritical spending to reach our profitability objectives.

Thanks, Min. The next question is for George.

Are you comfortable that you have enough liquidity to sustain the path to profitability?

Why did you pull the raise, and what is your plan to manage the notes coming due in April of 2025?

Thank you, Ben.

First, regarding the proposed raise, we had started the process in Q1 when the stock price was higher.

However, as it came closer to fruition, pricing was not attractive.

We made the decision, the determination that it was not in the best interest of shareholders to accept the terms and so we canceled that raise.

Rather than raising equity, we pursued a strategy to accelerate repatriating cash from Europe to the U.S. Fortunately, they are very profitable and are ahead of plan, and we were able to repatriate $7.5 million to date from the EU to help subsidize the temporary loss of processing in the U.S.

Our cash and cash equivalents are challenging in North America segment.

We are moving money between the other business units and we are being very aggressive in cost control to help manage the liquidity needs.

But it's a challenging operation to have multiple business units, some with increasing revenue, some with decreasing revenue, but we're managing working capital very tightly and centralized at the U.S..

Regarding the note, we have extended the maturity of the note in the past, and we are again in active discussion with the note holder to do so again.

Next quarter, the note would be due within one year and affected our current ratios, so we're going to get that hopefully extended and continue to classify it as a long-term obligation.

And with that, I'll go back to Ben.

Thank you, George.

I'm going to take the next question.

How do you measure your success?

Or another way of saying this, what are the most important key performance indices, where are you doing better, and what trends do you expect in 2024?

So I do like data science, like a shout-out to my son, who is a data scientist.

The best way to measure the success is using key performance indicators.

The most meaningful KPI for RYVYL includes total volume of transactions, operating margins, and revenue.

Our company business grew 83% to $3.1 billion in 2023, and we expect 67% volume growth in 2024.

In terms of operating margin, which is always a challenge in a rapidly-growing company, we continue to automate and streamline cost control.

We are happy to report that our operating margin run rate is in the high 30s, low 40s in spite of the substantial growth in revenue.

In terms of revenue growth, we finished '23 with about $66 million in revenue.

Based on our robust pipeline and new offerings, we anticipate that to grow in 2024 at approximately 35% to

[50%].

Based on the current environment, we're quite pleased with this progress.

The last question is back to Chief Operating Min. Revenue growth is critical for the success of the company.

What are the top three sources for revenues?

Thank you, Ben.

Our top three sources of revenue are as follows.

Number one is our merchant acquiring service revenue.

Number two is Banking as a Service revenue, and we are gaining significant momentum in the European market, as mentioned earlier.

And number three are the revenues from the new verticals and the anticipated licensing revenue from PayFac as a service offering, which is due to go to market through the independent software vendor partnerships Fredi mentioned earlier.

In addition, we recruited some more specific resources with payments experience and the speed of onboarding is improving, giving us confidence in stronger growth in the second half of the year.

Thank you, Min. Operator, at this point we would like to open the floor for analyst questions.

We see that several analysts have registered for questions.

(Operator Instructions) Kevin Dede, H.C. Wainwright.

Thank you for having me on, Ben and Min. It's good to talk to you again.

So, exactly when was the Visa Direct integration complete?

Was there any contribution to the March quarter or how far through the June quarter?

What kind of results have you seen so far?

I'm going to have Min to address that.

Hey, Kevin, thank you for the question.

So (inaudible) second quarter so after the first quarter and then we went live with services.

As Fredi indicated, our initial currencies we cover in phase one is our five currencies, including GBP, US dollars, euro, and Canadian dollars.

We already went live with [business] in Canada, and [shortly] after that, we expect to launch into the rest of the phase one currencies.

So we expect to see some improved revenue coming from the Banking as a Service part of our business as a result of that.

Okay.

Ben, I'm a little tripped up on the slowdown in the March quarter.

On one hand -- and this is on me, right?

I'm not sure that I heard everything correctly.

On one hand, I heard about the transition from a terminal to mobile platform and on the other hand, I heard about an issue with regulations.

So if we could drill down on each of those issues, please, maybe I can come to understand how you see a stronger second half.

[I'll leave that] with Min.

Kevin, I think that's a very specific maybe multiple questions there.

But at high level, in Q1 we did run into the technology and compliance requirements in a change to our processing channel.

We [adjusted] for that, (inaudible) right away.

Really the recovery path we're referring to here, Kevin, is that, you know, in conjunction with our switch to mobile payment -- mobile app process payment -- based processing -- payment processing.

Excuse me, my apologies for that.

And we have fine-tuned the way we process, you know, payments for our customers, our merchants in a more compliant matter.

So we are able to, you know, switch gear, adjust for that, and roll out a more compliant solution.

But even with that, it does take time for us to rebuild the user base, because as we mentioned in the last earnings call, we expected for the consumers to change their behavior and adopt a new payment experience, is going to take time.

And we're working very hard to put together the communication material training program so that as we fully rolled out the mobile-based payment solution, we can ensure that we provide not only the training, but also the incentive to the end users to adopt.

So the result of that, Kevin, we have updated and adjusted our revenue forecast; hence, we made the comment earlier.

We expect to rebuild momentum towards the later part of second quarter, but then we really expected stream to be picked up starting in the early part of Q3.

Yes.

I would add to that, Kevin, that we like this transition out of hardware into software.

It's better for the company, it's easier to manage inventory, [updates] are much faster and all of that leads to better margin.

We like that trend.

Our customers like it.

They have no expenses on hardware.

This is a good trend.

It just takes a little bit of time transitioning and onboarding the old big book of portfolio onto the new platform.

Okay.

Maybe, Ben, you could offer a little color just on the regulatory side of things, because I'm still a little confused by that.

To say that we are not confused by it would be an issue.

You know, we work in an environment that is an ecosystem that is fed by a lot of different contributors, and a lot of time we see trends that are influenced by perception.

Sometimes you see perception of risk by association.

Sometimes it's perception of risk for verticals.

And sometimes it's an interpretation of regulations that otherwise are not very clear.

So a lot of our partners are telling us if you do business this way, we will have to reduce your bandwidth.

And if you do it in another way, then you have full

[roaming ground].

It's better for us to listen and follow these guidelines, even if they are not always mandated from the regulatory perspective.

I'd maybe add one more thing just for what Ben just mentioned

[and it's important].

Banking and acquiring processing, the whole industry is changing, SDLC pushing hard on the banking, on the lease, on capacity.

Visa just lost a lawsuit, need to pay $30 billion for fees.

The whole industry, the whole ecosystem is changing, and we are just part of that ecosystem, and we are following the guidance of the partners and we have to adjust to those requirements.

And part of that is moving into a technology that is more secure, more transparent and that for example, mobile apps in Europe, they have new set of rules as well that are going into certain areas, especially in the crypto area in licensing.

So the whole world is changing and we're just adjusting with them.

So that's kind of a high level.

If I look at revenue as a percentage of transaction volume, I get to about 1.7% in the March quarter, which is down from, I think, over 2% in December.

So can you help me understand that trend and how you think it goes?

Obviously, it's a function of volume, but given there's only a 5% change in volume, it's hard to see that much of a change in revenue versus a percentage of transaction volume.

Okay, Min?

Kevin, I'll address that question.

That's a good observation, right?

That means you really into the detailed data and mix of our business and you know, at a high level, as I mentioned earlier, our top three revenue drivers.

One is merchant acquiring service revenue.

Number two is Banking as a Service revenue, right?

So what happened is sequentially between the last quarter of 2023 and the first quarter of this year, even though when we have reduced volume for North America, acquiring and processing revenue and (inaudible) volume we processed, that said, we more than offset that by (inaudible) increase Banking as a Service revenue and volume Europe.

So that's

(inaudible).

That's basically what you're looking at, is the (inaudible) compared against volume.

The residual percentage of Banking as a Service revenue is lower than the (inaudible) [acquiring] (inaudible) in the business we have.

So as a result of that, one, you have increased volume for Banking as a Service revenue, but then has a lower residual percentage compared to high residual percentage for the acquiring business.

That's why you see even though we have improved volume overall, but then the residual percentage probably declines quarter over quarter because of that.

Okay, hopefully that makes sense to you.

So I would add, so that is basically a mix between Europe and the U.S. As Europe is a larger percentage of our business, that's why that overall rate declined, even though Europe is very profitable, but the residual rate is lower on the transactions than we had in the U.S. I do think 2% is still a good ballpark metric long term.

This is Ben again.

This is the area where we anticipate the stabilized performance to go (inaudible) regional performance.

I would also, Kevin, direct your attention to what I said before to a previous question about the KPI.

Our gross operating margins have not changed, even though our percent of revenue out of volume maybe shrunk just a little bit.

So that's a very important

[distinction] (inaudible).

Thank you for highlighting that, Ben, I appreciate it.

Thank you very much for your explanations, gentlemen.

I'll hop back in the queue.

Thanks, Kevin.

We always appreciate your support.

Operator, back to you.

(Operator Instructions) Kevin Dede, H.C. Wainwright.

Thank you very much.

I thought I'd just take a backseat for someone else, but -- help me understand the evolution of Banking as a Service, Blockchain as a Service, and RYVYL's Block offering and how you're positioning coyni within the realm.

That's a strategic question.

Back to CEO, Fredi.

Hey, Kevin.

(inaudible) So let's start with the Banking as a Service.

Banking as a Service in Europe, the license for (inaudible) to utilize our [backbone], our licenses, to be able to offer their customer different services, [step up] payments, wire payments (inaudible) solution.

And now we're going to open up Visa (inaudible) as part of the on- and off-ramp solution.

All of that now is being implemented and utilized in a variety of ways.

So we see the volume already.

We see how the solution can help other banks and companies.

Through that process, we see a huge growth and opportunity in that space.

So that's one.

You had [cloud] (inaudible) service.

We are [testing] that solution, we're working with Corda directly on a few opportunities that we tried to understand, how are we going to go live with that?

But the service is up and running. [Interesting still] this big lift, but we are very -- still are very excited about the opportunity, and we're going to share more hopefully in Q2.

That's in regards to the Blockchain as a Service.

How coyni is benefit from that?

coyni is the payment (inaudible) software that makes PayFac service and other services available, especially in the U.S. We're still working on deploying coyni in Europe.

We did mention before that we have (inaudible) just receive its licenses in Europe to operate as a payment facilitator.

I believe that's the correct license.

It allows us to do payments for asset renewal at

(inaudible).

We are working with our partners First Data.

We have [teamed] with First Data to (inaudible) PayFac to our partners.

So we have a lot on our plate that we're trying to turn on as quickly as possible and start to generate revenue as quick as possible.

But all of those projects we are working for a long time.

It's [heavy] on compliance regulation, but we are now there.

We arrived at the point of turning everything on.

So I hope I answered the question.

I didn't miss anything, I hope.

But through all of those tools and solutions, that's how we see a recovery in the second half of the year.

Yes, Fredi, just to add on that, how how should I look at RYVYL block versus RYVYL within the context of Banking as a Service and coyni's functionality?

So RYVYL Block is a separate product.

RYVYL Block was designed, I would say, this way: Blockchain for Dummies.

It's a product for companies that want to go through what we call a digital transformation.

They want to get into blockchain infrastructure allow -- for example, a [bank or a finta] company to implement blockchain services without going through a year or two of implementation.

And they can go live in weeks, not in months or years.

So that's kind of the main goal of the Blockchain as a Service, basically, is transformation and getting banks and other financial institution into that new technology as quick as possible. coyni using the same backbone, as coyni offer the [phone pay mobiles], is offering the functionality, the ability to [process] payment and to (inaudible) ability to onboard for clients, but the underlying infrastructure is the same block.

We're utilizing Corda infrastructure.

Hopefully, that's helpful.

Yes, okay.

So if I were to summarize it, the RYVYL Block is basically the name that you've given Blockchain as a Service?

That's correct.

It's an internal name, yes.

RYVYL Block.

Correct.

Okay.

Okay.

Apologies.

It was just -- you guys have -- to your point, Fredi, o you have a lot on your plate and it's hard for a simpleton like me to sort it all out.

So I apologize, but I do really appreciate the handholding.

Thanks for your continued support, Kevin.

Oh, yes.

No, my pleasure.

Ben, you've talked a lot about your international expansion and you focused a lot on Europe, but it just seems to me that there are other, you know, maybe not necessarily first-world countries, but other countries that might deserve or might offer a similar opportunity that some of the Eastern Europeans want offer, such as maybe South Africa or Nigeria, maybe even Egypt.

How are you looking sort of beyond Europe and expanding your international opportunity?

Yeah.

So that's a good question and it demonstrates that someone is paying attention.

So this game is a lot about efficiency of

[revenue].

We have more business that we can onboard in a reasonable (inaudible) what we do now is pick the lowest-hanging fruit still.

Even though the company is growing year over year, 80%, 100% as we issued guidance before on this call, we anticipate overall volume of business to grow from the $3 billion range to the $5 billion range.

We are still in pursuit of the most efficient revenue that we can take.

American Samoa was an interesting case study for us, where we entered the market and now control the majority of transactions supporting that GDP in that nation, and we're very happy about that case study.

It's proving a point.

However, looking at the quality of revenues that we currently accumulate in the European market just tells us that this is where we need to be picking up food for the moment.

Obviously, at the end of the day, we'll go where business is.

However, will first play on our strengths, and then even though we may be leaving some money on the table, but we have to first address the most efficient revenue growth before we look to more exotics markets.

This is a great segue, Ben.

You mentioned America Samoa.

I remember on multiple calls last year, you referenced what you thought would be opportunities for other sort of closed systems, such as that in other potential verticals I understand, obviously, there's a lot on your plate and you're looking for low-hanging fruit.

It totally makes a ton of sense.

I get it.

I'm just wondering if you still see that opportunity or if your experience more recently in American Samoa has left you feeling that you want to dedicate less time and resources to exploiting that?

So Kevin, I'll answer that question to demand.

So American Samoa continued to be very strategic in the business opportunity for us in our portfolio.

We continue to process, you know, the volume, as we indicated previously, servicing more than (inaudible) days.

On the island -- a quick reminder.

We have a five-year exclusive partnership for the island and we are continuing our conversation with our partner there for additional processing needs.

You know, we're not in a position to share more details, but we are in a dialog for that.

Now secondly, you know, for smaller contained ecosystems just such as American Samoa, we continue to manage all the major business opportunities in our sales pipeline.

As Ben mentioned, we prioritize based on the level of effort involved, alignment with our product roadmap as well as resource utilization.

You know, we do have adequate major big-ticket opportunities in the pipeline in the near term that we are prioritized on, [other than] pursuing other Island business, even though we do have some potential in the longer term.

Let me add a couple of words on that.

This is Ben again.

Remember that we -- because of the technology migration, we experienced a little bit of a drop in the revenues onshore for Q1.

I think it's prudent of the company to first backfill that the most efficient way that we can before venturing out to other opportunities that they are more fringe at this point.

I hope that message is clear.

Yes, yes, no, absolutely.

But just to be clear, Min, I guess I was thinking of closed ecosystems sort of beyond a geographic implementation, maybe something more akin to Square's payment processing.

Thank you very much for the explanation.

I appreciate it.

I'll cede the floor at this point.

Thank you very much, gentlemen.

Thank you.

And we have reached the end of the question-and-answer session.

Now I'd like to turn the call back to Ben Errez for closing remarks.

Thanks, operator.

Thank you all for joining us today and for your thoughtful questions and participation.

On a personal note, Fredi and I are the two largest shareholders at RYVYL and we are excited about '24 growth plan to diversify revenues, and hope to see everyone on our next update for the Q2 results in August.

Have a great day, everybody.

This concludes today's conference call.

Thank you.

You may now disconnect.