Greenbox POS (GBOX) Stock: Why The Price Dropped Today

By Amit Chowdhry ● Nov 12, 2021
  • The stock price of Greenbox POS (NASDAQ: GBOX) fell by over 14% during intraday trading today. This is why it happened.

The stock price of Greenbox POS (NASDAQ: GBOX) – an emerging financial technology company leveraging proprietary blockchain security and token technology to build customized payment solutions – fell by over 14% during intraday trading today. Investors are responding negatively to the company’s third-quarter 2021 financial results.

Q3 2021 and Subsequent Operational Highlights:

— Processed a quarterly record $540 million in transaction volume, growth of approximately 1,400% when compared to the same period a year ago.

— Year to date processing volume to $1.4 billion as of September 30, 2021

— Revenues in the third quarter of $8.0 million, representing an increase of 163% when compared to the same period a year ago.

— Fortified balance sheet with a $100 million convertible note financing to facilitate the Company’s acquisition strategy, fund their Coyni stablecoin revolver and additional technology development

— Appointed Paul Levine, a technology innovator and the former President of Planet Payment, as Chief Executive Officer and Co-Founder of Coyni stablecoin spinoff company

— Selected Miami as corporate headquarters for Coyni

— Strengthened their technology leadership with the hiring of Robert Houghton as Chief Technology Officer to lead GreenBox payment technology roadmap and ensure efficient integration of acquisitions

— Engaged in revenue sharing and licensing cooperation with Transact Europe enabling GreenBox to leverage key licensing assets and recognize processing volume. The TEU acquisition is currently pending regulatory bank approval.

Q3 2021 Financial Summary

— Revenues in the third quarter of 2021 were $8.0 million, an increase of 163% compared to revenues of $3.0 million in the same quarter a year ago. Sequentially, revenues increased by 26% when compared to $6.4 million in the second quarter of 2021.

— Gross profit in the third quarter of 2021 was $5.6 million, or 69.5% of total revenue, compared to gross profit of $1.2 million, or 39.6% of total revenue, in the same quarter a year ago. Sequentially, gross profit increased from $5.5 million, or 79.3% of total revenue, in the second quarter of 2021.

— Total operating expenses in the third quarter of 2021 totaled $8.4 million, compared to $1.5 million in the same quarter a year ago, and $5.1 million in the second quarter of 2021. The year over year increase was due primarily to an increase in stock compensation for employees as well as increases in research and development and payroll.

— The company’s net income in the third quarter of 2021 was ($6.0) million, or ($0.14) per basic and diluted share, compared to net income of ($0.5) million, or ($0.02) per basic and diluted share, in the same quarter a year ago. Net income in the second quarter of 2021 was ($0.4) million or ($0.02) per basic and diluted share. The decrease was primarily due to increases in stock-based compensation expenses related to employees and services, research and development and professional fees

— Adjusted Net Income, a non-GAAP financial measure, for the third quarter 2021 was $1.7 million.

KEY QUOTES:

“Our third quarter of 2021 was instrumental in building the foundation for 2022 and beyond. We continued to successfully execute on our long-term growth strategy of quickly scaling our processing volume while accumulating key licensing assets through select acquisitions and partnerships. The success is evident from our year-to-date processing volume of $1.4 billion as of September 30th, only 8 short months after the launch of our Gen 3 platform. This is a testimony to both our technology and our talented team securing key ISO relationships and expanding our network. While much work is left to be done to accomplish our goals, our achievements and the trajectory of our growth is undeniable.”

“The ability to finance our growth strategy is a key requirement as we look to become the premier blockchain based financial solutions company. In successfully closing on a $100 million convertible note financing, we demonstrated our ability to secure capital which we can deploy on accretive transactions. Now backed by a fortified balance sheet, we can continue to aggressively pursue our acquisition strategy, while investing in our core technology and adding funds to the Coyni custodian revolver to increase it up to $25 million.”

“We continued to make great strides towards the spin-off and eventual public offering of Coyni, our stablecoin technology. We selected Miami as Coyni headquarters and appointed highly accomplished financial payments executive, Paul Levine, as the Chief Executive Officer. We opened up Coyni to early adopters and continued to work with Signature Bank and Armanino to ensure proper transaction and attestation functioning as we look to scale.”

“Despite all GreenBox has accomplished in the last 18 months, we are in still just in the early innings of scaling our technology. We remain confident in our long-term strategy and are well positioned to capitalize on the opportunity at hand. Looking ahead, we expect to continue to grow our processing volumes and exceed our initial 2021 guidance of $1.85 billion. However, due to the timing and margin profile of customer onboarding and acquisitions closing we now expect 2021 reported revenue of at least $28 million and adjusted net income of at least $8 million. As we look out at 2022, we expect processing volume to be at least $4.9 billion for the year assuming completion of acquisitions. We look forward to bringing GreenBox to the forefront of financial payments technology and delivering long-term sustainable value for our shareholders.” 

— GreenBox POS Chief Executive Officer Fredi Nisan

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.