Cannabis Fintech Company POSaBit: Q3 Revenue Improves 173% To $6.3M, Raises Full-Year Guidance

Cannabis-focused financial technology company POSaBIT Systems Corporation PBIT POSAF reported its third-quarter financial results on Tuesday with revenue of $6.3 million, up by 173% from $2.3 million in the same period year ago. The Toronto and Seattle-based company noted that revenue growth was driven by merchant same-store sale growth, increased customer penetration and onboarding of new merchants.

Q3 Financial Summary

• Gross profit, inclusive of one-time adjustments of $(211) thousand, increased 148% year over year to $1.43 million, or 22% of revenue, compared with $576,000, or 25% of revenue in the third quarter of 2020;
• Net loss amounted to $6.9 million, which compares to a net loss of $100,000 in the same period of last year; Net loss can be primarily attributable to the accounting treatment of the outstanding warrants;
• Adjusted EBITDA, inclusive of one-time adjustments of $(211,000) was a loss of $509,000 compared with a loss of $43,000 in the third quarter of 2020; After adjusting for one-time items, adjusted EBITDA would have been a loss of $298,000;
• At the end of the reporting period on Sep. 30, POSaBIT had around $5.5 million in cash, compared to approximately $1.0 million as of December 31, 2020; This increase was partially driven by approximately $3.6 million of cash received from the exercise of 18.2 million outstanding warrants during the period.

“Our momentum continued in the third quarter with record high revenue of $6.3 million, which was up 173% year-over-year and 29% sequentially,” Ryan Hamlin, CEO and Co-founder of POSaBIT stated. “Based on this strong performance and our visibility into year end, we are once again raising our guidance for full year 2021 revenue to a range of $19 million to $20.5 million. At the mid-point, this represents an expectation for full-year 2021 growth of more than 158% and will continue our track record of doubling revenue every year since 2017.”

Recent Operational Highlights

• Established trading of the company’s common stock on the OTCQB Venture Market;
• Entered New Mexico market, the company now has active merchants in 15 states ;
• Launched “POSaBIT Connect,” the Company’s open API that allows 3rd party integrations to gain access to the ever-expanding POSaBIT product suite;
• Launched POSaBIT Kiosk, a standalone hardware option for merchants that enhances the customer experience while lowering merchant operating costs and integrating POSaBIT’s payment offering ;

Outlook

For the full 2021, the company raised its revenue guidance to $19.0 - $20.5 million, from the previous $17.5 - $19.0 million range. Its gross profit margin remained unchanged and in the range of 28% to 32%.

For the following 2022, POSaBIT disclosed revenue guidance in a $36.0 to $39.5 million range.

Price Action

POSaBIT’s shares closed Tuesday market session 1.59% higher at $1.28 per share.

Photo: Courtesy of CRYSTALWEED cannabis on Unsplash