• The NanoKard app offers users an alternative to cash and charge cards while also enabling merchants to process transactions securely and more efficiently. We provide cutting-edge solutions tailored to businesses of all types, bridging the gap between businesses and customers. By transforming traditional payment processing with innovative methods, we streamline payment acceptance and checkout processes. By focusing on specific verticals with these convenient and secure solutions, RYVYL is introducing a new product designed for high-margin processing.

• RYVYL Fabric offers tools and building blocks to ensure easy blockchain access with multi-layer security compatible with both R3’s Corda and Hyperledger, allowing customers to implement blockchain faster with a low-cost pay-per-API structure. RYVYL’s partnership with R3 expands its reach in enterprise via its distributed ledger technology and services in regulated industries where trust is critical.

Financial Summary for the Second Quarter Ended June 30, 2024

• Revenue in the second quarter of 2024 was $11.9 million, including $8.9 million in RYVYL EU. This compared to $14.8 million in the second quarter of 2023, which included $3.8 million of revenue generated from RYVYL EU.

• Processing volume increased 55% to 1,055 million in the second quarter of 2024, compared to $679 million in the second quarter of 2023. Revenue from international operations contributed $902 million in the second quarter of 2024, up from $317 million in the second quarter of 2023, which was driven mostly by growth in banking volumes. Revenue from North American operations contributed $153 million in the second quarter of 2024, down from $362 million in the second quarter of 2023 due to the impact of the changes in one niche industry customer base that reduced processing volume of acquiring business in February 2024.

• Cost of revenue was $7.2 million in the second quarter ended 2024, compared to $8.7 million in the second quarter 2023, which was due to decreased processing volumes of acquiring business in the US.

• Gross margin was 39.9% in the second quarter of 2024, compared to, 41.2% in the second quarter of 2023, reflecting the shift in product mix.

• Operating expenses were $15.6 million in the second quarter of 2024, including $8.3 million of mostly noncash charges for goodwill impairment, restructuring costs, and employee severance. This compares to $9.6 million in operating expenses in the second quarter of 2023. Excluding the nonrecurring charges, operating expenses were lower by $2.3 million in the second quarter of 2024, compared to the second quarter of 2024, primarily as a result of $1.3 million in lower professional fees and $0.7 million in lower G&A costs.

• Other expense totaled $0.8 million in the second quarter of 2024, and mostly related to debt discount accretion, compared to $8.5 million in the second quarter of 2023, of which $5.0 million was related to debt interest, debt discount accretion and changes in fair value of the derivative liability.

• Adjusted EBITDA was negative $1.6 million for the second quarter of 2024, compared to negative $0.9 million for the second quarter 2023.

• During the second quarter of 2024, $0.2 million of debt principal and $0.9 million of preferred stock was retired, and the due date of an outstanding 8% Senior Convertible Note repayment obligation was extended by one year to April 5, 2026.

• As of June 30, 2024, cash and restricted cash totaled $75.2 million, and unrestricted cash was $6.4 million, compared to $73.3 million and $12.2 million, respectively at December 31, 2023.
  
  

2024 Financial Outlook

The company expects full year 2024 revenue to be in the range of $65 million to $70 million and processing volumes to exceed $4 billion, with its international segment expected to comprise the largest portion of revenue in 2024. Third quarter 2024 revenue is expected to be in the range of $14 million to $15 million, followed by strong sequential revenue growth and Adjusted EBITDA profitability in the fourth quarter of 2024.

Investor Conference Call

RYVYL management will host a conference call at 4:30 p.m. Eastern Time on Tuesday, August 13, 2024, to discuss the Company's financial results for the second quarter ended June 30, 2024, provide a corporate update and end with a question-and-answer session. To participate, please use the following information and submit your questions in writing prior to the call at [email protected].

Q2 2024 Conference Call and Webcast
Date: Tuesday, August 13, 2024
Time: 4:30 p.m. Eastern Time
US Dial In: 1-833-816-1437
International Dial In: 1-412-317-0529
Webcast: Q2 2024 Webcast
Call me: Link

Participants can use Guest dial-in #s above and be answered by an operator OR click the Call me link for instant telephone access to the event and enter pass code 1713018. The Call me link will be made active 15 minutes prior to scheduled start time.

A replay of the call will be available through October 13, 2024, by calling 1-844-512-2921 within the United States or 1-412-317-6671 when calling internationally and entering access ID 10191677. An archived version of the webcast will also be available for 90 days on the IR section of the RYVYL website or by clicking the webcast link above.

About RYVYL

RYVYL Inc. (NASDAQ: RVYL) was born from a passion for empowering a new way to conduct business-to-business, consumer-to-business, and peer-to-peer payment transactions around the globe. By leveraging proprietary blockchain ledger and electronic token technology for the diverse international markets, RYVYL is a leading innovator of payment transaction solutions reinventing the future of financial transactions. Since its founding as GreenBox POS in 2017 in San Diego, RYVYL has developed applications enabling an end-to-end suite of turnkey financial products with enhanced security and data privacy, world-class identity theft protection, and rapid speed to settlement. As a result, the platform can log immense volumes of immutable transactional records at the speed of the internet for first-tier partners, merchants, and consumers around the globe. www.ryvyl.com

Cautionary Note Regarding Forward-Looking Statements

This press release includes information that constitutes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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. Such forward-looking statements include statements regarding the timing of the filing of the aforementioned periodic reports and are characterized by future or conditional words such as "may," "will," "expect," "intend," "anticipate," “believe," "estimate" and "continue" or similar words. You should read statements that contain these words carefully because they discuss future expectations and plans, which 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 in or contemplated by the forward-looking statements, including the risk that the completion and filing of the aforementioned periodic reports will take longer than expected and that additional information may become known prior to the expected filing of the aforementioned periodic reports with the Securities and Exchange Commission (the “SEC”). 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.

IR Contact: David Barnard, LHA Investor Relations, 415-433-3777, [email protected]

RYVYL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share data)

RYVYL INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Dollars in thousands, except share and per share data)
(Unaudited)

RYVYL INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
(Unaudited)

Use of Non-GAAP Financial Information

Adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”) is a non-GAAP measure that represents our net loss before interest expense, amortization of debt discount, income tax expense, depreciation and amortization, changes in the fair value of derivative liabilities, losses on the extinguishment and derecognition expenses on the conversion of convertible debt, non-cash stock-based compensation expense, acquisition-related expense, non-recurring provisions for credit losses on legacy matters, accounting fees related to the restatement of prior period financial statements, non-recurring costs related to the spin-off of a subsidiary, and legal costs and settlement fees incurred in connection with non-ordinary course litigation and other disputes.

We exclude these items in calculating Adjusted EBITDA because we believe that the exclusion of these items will provide for more meaningful information about our financial performance, and do not consider the excluded items to be part of our ongoing results of operations. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are: (a) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (b) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (c) Adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; (d) Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and (e) other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure.

Because of these and other limitations, you should consider Adjusted EBITDA alongside our other GAAP-based financial performance measures, net income (loss) and our other GAAP financial results. The following table presents a reconciliation of Adjusted EBITDA from net loss, the most directly comparable GAAP measure, for the periods indicated:

Reconciliation of Net Loss attributable to RYVYL, Inc., to Adjusted EBITDA for the
Three and Six Months Ended June 30, 2024 and 2023
(in thousands, except share and per share data)
(Unaudited)