Bitcoin Depot Inc. (NASDAQ:BTM) Q1 2024 Earnings Call Transcript

Bitcoin Depot Inc. (NASDAQ:BTM) Q1 2024 Earnings Call Transcript May 14, 2024

Operator: Good morning, and welcome to Bitcoin Depot’s First Quarter 2024 Conference Call. My name is Mark, and I will be your conference operator today. For this call, Bitcoin Depot issued its financial results for the first quarter ended March 31, 2024. In a press release, a copy of which will be furnished in a report on Form 8-K filed with SEC and will be available in the investor relations section of the company’s website. Joining us on today’s call are Bitcoin Depot’s CEO, Brandon Mintz; CFO, Glen Leibowitz; and COO, Scott Buchanan. Following their remarks, we will open the call for questions. Before we begin, Alex Kovtun from Gateway Group will make a brief introductory statement. Mr. Kovtun, please proceed.

Alex Kovtun: Great. Thank you, operator. Good morning, everyone, and welcome to Bitcoin Depot’s first quarter 2024 conference call. Before management begins their formal remarks, we would like to remind everyone that some statements we’re making today may be considered forward-looking statements under securities laws and involve a number of risks and uncertainties. As a result, we caution you that there are a number of factors, many of which are beyond our control, which could cause actual results and events to differ materially from those described in the forward-looking statements. For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and public filings made with the Securities and Exchange Commission.

We disclaim any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law. We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and the reconciliation tables to applicable GAAP measures in our earnings release carefully as you consider these metrics. We refer you to our filings with the Securities and Exchange Commission for detailed disclosures and descriptions of our business, as well as uncertainties and other variable circumstances, including, but not limited to risks and uncertainties identified under the caption risk factors in our recent filings. You may get Bitcoin Depot’s Securities and Exchange Commission filings for free by visiting the SEC website at www.sec.gov.

I would like to remind everyone that this call is being recorded and will be made available for replay via a link available in the Invest Relations section of Bitcoin Depot’s website. A supplemental earnings presentation highlighting our Q1 performance has also been made available on our IR website. Now, I will turn the call over to Bitcoin Depot’s CEO, Brandon Mintz. Brandon?

Brandon Mintz: Thanks, Alex, and good morning everyone. Thank you for joining our first quarter 2024 conference call. I’d like to briefly discuss some recent developments across our business and what gives us confidence in the year ahead. During the first quarter, we continue to focus on growing our kiosk network and building a robust pipeline of major regional and national retail partners to enhance our footprint. Our momentum is strong as we are ahead of schedule for reaching our goal of 8,000 installed BTMs by the end of this year after signing over 2,000 new retail locations year-to-date. Much of this success is due to the expansion of our sales team and purchases of over 3,200 kiosks in 2024. These recent purchases will increase our total kiosks suite size to over 10,400 kiosks once all kiosks are delivered.

On May 9, according to coinatmradar.com, excluding Bitcoin Depot, there were roughly 26,600 Bitcoin ATMs in total between the U.S. and Canada. These figures put into perspective the industry-leading market share position Bitcoin Depot is continuing to gain. In the last two quarters, we have focused heavily on relocating underperforming BTMs to new locations, which from the past has shown to increase profitability per kiosk on average significantly after a few months. While we do not get that benefit immediately, over time, the increase in profitability typically continues to grow as the BTMs ramp up. For example, in March of this year, the average monthly revenue per kiosk for BTMs that have been installed for 12 months to 24 months was 87% higher than BTMs installed for less than 12 months.

In this calculation, the BTMs installed for less than one year averaged roughly four months of operation since the time of install at the location. As of the end of Q1 2024, around 2,000 of our kiosks have been installed for less than one year and still need more time to ramp up to their full potential. Additionally, once we receive delivery of all of our purchased and ordered kiosks, we will reach an installed fleet of roughly 10,000 total BTMs by the time they are all installed. This number accounts for 400 kiosks in transit or undergoing maintenance or repair at any given time. Between the ramp of our newly installed kiosks and the kiosks we will receive over the course of 2024 from orders and purchases, there is clearly very large growth potential baked into the business as it sits today.

As part of our North American expansion, we recently signed many new agreements expanding across several states and increased our fleet of deployed kiosks while growing our industry-leading market share. In April, we announced the purchase of approximately 2,300 Bitcoin ATM’s at a significant discount, which will enable us to meet increased retailer demand and we signed our first major grocery store partnership with Fareway Stores for 66 locations. We also strengthened our profit share program through partnership with and an investment fund. The profit share program Bitcoin Depot has already added more than 300 additional BTM locations in this program in 2024, and we look forward to working with other partners to expand this program further.

Profit share partners benefit from Bitcoin Depot’s expertise in operating BTMs and integration with BitAccess software, the premier software suite for Bitcoin ATM operations. Our profit share program provides a capital efficient strategy for Bitcoin Depot to continue its expansion this year as we aim to have the largest suite of Bitcoin ATM’s in the company’s history. We remain focused on expanding our footprint internationally and we recently announced expansion efforts into Puerto Rico and Australia. We believe both Puerto Rico and Australia may support a much larger supply of Bitcoin ATM’s compared to what they have today, and we look forward to working closely with our new location partners to provide Bitcoin to new customers. Today, our pipeline of expansion opportunities remains as strong as ever.

In summary, we remain encouraged by the trends we’re seeing across our business and look forward to deploying kiosks into new locations to support mass crypto adoption as the world’s leading Bitcoin ATM network. Now, I’ll turn the floor over to our CFO, Glen Leibowitz, who will provide more in depth insights into our financial performance and business outlook. Glen?

Glen Leibowitz: Thanks, Brandon, and good morning everyone. I’ll start with a detailed review of our first quarter 2024 results and we’ll finish with a discussion on guidance. First quarter revenue declined approximately 15% year-over-year to $138.5 million, compared to $163.6 million in last year’s first quarter. This decline was largely driven by the impact of unfavorable legislation that was recently passed in California, which went into effect in January of this year. Along with relocating kiosks during the quarter to optimize our fleet for maximum profitability. We are actively engaged in California with their legislature and continue to see constructive changes to the operational limitations that are currently in place in that state.

However, our focus remains to drive revenue growth in 2024, which Scott will discuss in detail. Gross profit for the first quarter of 2024 decreased 24% to $14.8 million, compared to $19.5 million for the first quarter of 2023. Gross margin in the first quarter of 2024 was 10.6% compared to 11.9% in the first quarter of 2023. This margin decline was largely driven by the corresponding decline in revenue during the quarter while also operating a larger fleet of kiosks, which are beginning to ramp in performance. Total operating expenses for the first quarter of 2024 were $16.6 million, compared to $13.6 million for last year’s first quarter. On a sequential basis, operating expenses declined 7% from the fourth quarter of 2023. The sequential improvement was attributable to lower professional services expenses, and we anticipate this trend will continue over the coming quarters as we move farther away from the DSPAC [ph] transaction and optimize expenses for life as a public company.

GAAP net loss for the first quarter of 2024 was $4.2 million, compared to net income of $6.1 million in the first quarter of 2023. Adjusted EBITDA, a non-GAAP measure for the first quarter of 2024 was $4.9 million compared to adjusted EBITDA of $13.6 million for the first quarter of 2023. This lower adjusted EBITDA level was driven largely by lower revenue during the quarter and deployment of over 1,000 kiosks in the quarter, which increased fixed costs. As a reminder, these deployments do not come with an immediate revenue or EBITDA improvement, but they are expected to drive growth later in 2024 and in future years. Adjusted EBITDA margin, which is derived from adjusted EBITDA divided by revenue in the first quarter of 2024, was 3.5% compared to an 8.3% margin in the first quarter of 2023.

We continued to focus on our balance sheet and ended the quarter with approximately $42.2 million in cash and cash equivalents and $48.3 million in debt. We have purchased 190,620 shares to date under the stock repurchase plan announced in 2023. Given the variability in our business from the California legislation and the significant revenue ramp or our kiosks, combined with the relocation of kiosks to start the year, we’ve made the decision to refrain from formal guidance. But for the remainder of 2024, we still expect to follow a similar seasonality trend as we have described previously in Q2 and Q3 being significantly higher revenue than what we see in Q1 and Q4. To illustrate this point and the trend of volumes improving in the spring and summer, March revenue was 30% higher than January and March.

Adjusted EBITDA was greater than the combination of January and February adjusted EBITDA this quarter. That completes my financial summary. I’ll pass it over to our COO, Scott Buchanan to discuss our growth strategy. Scott?

Scott Buchanan: Thanks, Glen. Bitcoin Depot continues to make significant progress on its growth strategy and we remain focused on execution for the remainder of the year. First, we continue to optimize our kiosk footprint by relocating our kiosks to higher traffic locations, effectively reducing expenses while increasing transaction volume overtime to enhance profitability. During the first quarter, we relocated over 500 kiosks to support our newly signed retail partnership deployments. It’s important to note that while we regularly optimize our kiosk footprint, our repositioning efforts will likely slow in the coming quarters as we are focused on footprint growth this year to expand our market share and competitive positioning.

We remain committed to additional operational enhancements to drive profitable growth going forward, including improving our vendor pricing, lowering professional services costs and optimizing customer markups. While we are not providing guidance at this time, we are focused on optimizing the business for profitability and positive cash flow ahead. Second, we continue to pursue additional licenses to expand our access points for customers. During the first quarter, we expanded our BDCheckout program across a variety of convenience store partners through our ongoing partnership with our payment processing provider, and today we are in over 6,700 locations. New York State remains the largest growth opportunity for our kiosk and we are in regular dialogue with regulators to secure [ph] a license to operate in the state.

With no existing BTM operators in the state today, according to coinatmradar.com, we believe our opportunity for kiosk deployment would be substantial and our U.S. unit economics will be strong. We continue to anticipate a decision in the second quarter to operate in the state. In addition to New York, we are also – we also see international deployments as a significant opportunity for growth. As mentioned, we are actively underway in our Australia expansion project and we are excited to see these kiosks begin to generate revenue and profit. Third, we are placing additional focus on the profit share program to grow our footprint and profitability. Following the successful partnership with Sopris Capital, we announced a multimillion dollar investment into 250 kiosks from another institutional investor.

In addition to the 250 kiosks included in the initial agreement, the fund has the option to invest in an additional 750 kiosks. We have a strong pipeline of additional opportunities, which can provide a capital efficient strategy for Bitcoin Depot to continue its expansion this year while enhancing profitability. Lastly, we continue to explore growth internationally and recently announced our expansion into Puerto Rico and Australia. While our focus remains within North America where approximately 92% of our BTMs globally are located, we believe the growing adoption of cryptocurrency as a legal form of payment will offer us an opportunity to establish a market leading presence outside of North America overtime into new markets with low competition.

While it’s early, we are encouraged by the pace of new deployments and the pipeline of retail opportunities that we have identified internationally. In summary, we are encouraged by our recent momentum and remain well positioned to execute our strategic goals this year. With that, we are now happy to take your questions. Operator?

Q&A Session

Operator: [Operator Instructions] Your first question comes from the line of Mike Colonnese with H.C. Wainwright. Please go ahead.

Mike Colonnese: Hi, good morning guys, and thank you for taking my questions today. First one for me, if you could provide more color around what nuances we should take into consideration as it relates to the new geographies you’re expanding into Australia and Puerto Rico, specifically from both an economic and regulatory perspective. Really how we should think about pricing average transaction sizes relative to the kiosks you have deployed in North America?

Brandon Mintz: Yes. Thanks, Mike. So Puerto Rico will likely be very similar to the U.S. from a regulatory standpoint and licensing standpoint, it is the same. From a unit economics standpoint, it’s probably pretty similar. That’s the way we’re viewing it and that’s what it’s looking like pretty early on in the deployments there. Australia is a little bit different, the licensing structure is slightly different, but nothing super challenging. And unit economics, we expect to be a little bit better than the U.S., given that it’s an untapped market to a degree. And what we’ve done or what we’ve gathered from a market research standpoint indicates it could be a little bit stronger than the U.S. in terms of profitability per kiosk.

Mike Colonnese: That’s great. And this one’s more on sentiment. Curious do you guys use here? So, fundamentals are strong, you have really good momentum in the business and are certainly tracking ahead of your plan to deploy the 8,000 kiosks in 2024. What do you think investors are missing with this story here?

Brandon Mintz: Yes, I think investors just need to focus on, on the financials and the profitability that we continue to show and that we continue to be trending toward even more positive free cash flow in 2024. I think that’s just what we need to focus on. And we continue to move farther away from the DSPAC process and get those costs behind us. So as we optimize the cost structure and continue to grow our fleet, the financial should continue to improve as well.

Mike Colonnese: Great. Thanks, Scott.

Operator: Your next question comes from the line of Ben McCann with Noble Capital Markets. Please go ahead.

Patrick McCann: Hey, good morning. This is Pat on from Mike. I had a couple of questions. First of all, when it comes to just you guys mentioned the margin, the efforts you would take to improve margins. But I was wondering if you could give a few more details on that as far as more specifically what those levers are that you can pull. And maybe while you’re at it, I just wanted to touch on the, I think this is something you’ve done in the past, but reducing the frequency with which you pick up cash at kiosk to lower some of those expenses, is that something you’re doing or is that something you can, can do just any color you can give on how margins could be improved?

Brandon Mintz: Yes. Thanks, Pat. I can start with armored costs, like you mentioned, we always have that lever reducing the frequency of armored collections so that we pay for less visits per month. But as we’re rapidly deploying kiosks, that’s likely not a lever we’ll pull first, because with the deployment of additional kiosks, that’s already going to generate more cash tied up in the ATM’s and working capital. And so that’s a lever we’d like to pull as we have a more stable fleet size so we can better forecast what’s going to happen to that working capital balance. But that will be something we can do to improve margins going forward. The other things we’re going to focus on specifically for improving margins are continuing to reduce our professional services expenses.

As we’ve touched on a couple times, it was very expensive going public. And now that we’re in a more stable state, reducing some of our professional services on the accounting side, the legal side, consulting side, all of that, and then also just continuing to optimize our marketing spend. Right? We’re always focused on driving new customer growth and top-line growth through marketing, but making sure that as we expand the fleet here, that we’re really focused on customer acquisition costs and customer lifetime value and making sure that we’re optimizing the spend there for the best margin possible.

Patrick McCann: Thanks. And then another question is, when it comes to picking kiosk locations, how do you do that? And then when you look back to 2023 and recent quarters here where you’ve done redeployments, as you’ve highlighted, what lessons do you take away from that when it comes to future deployments, as far as. Okay, now we know where we should pick. What is the makeup of a profitable location? What do you think you can take from previous redeployments going forward for picking great spots to put your kiosks?

Brandon Mintz: Yes, good question. And so I’ll be careful not to overshare, given that this is part of the competitive advantage, is making sure that we’re picking strong locations, as our competitors are trying to do the same thing. But the more kiosks we deploy, the more data we’re gathering on which locations perform well and which don’t. Right? So as we remove and as we deploy new ones, we’re just constantly improving our data set and looking at all the different variables, from demographics to population to competitors in the area, all sorts of different things that we look at. And we can look at those criteria and apply them to formulas when we look at new sites for analysis of whether or not we place a kiosk there. So every month and year that passes, we’re getting additional data that’s going to help us better place locations.

Patrick McCann: Great. Thanks so much. Maybe one more question, if you don’t mind me squeezing it in. With regard to California, are there any – when it comes to the – well, are there any milestones, anything we should look for as far as regulatory changes or as far as the legislature there? Are there things we should have our eyes out for, things to potentially improve there?

Brandon Mintz: I mean, nothing specific to have your eyes out for in California. Right. If something changes, it’s not going to change until late this year, maybe early next year. So nothing in the next quarter or two? Yes, but nothing to really look for yet.

Patrick McCann: Great. All right, thank you so much.

Operator: Your next question comes from the line of Harold Goetsch with B. Riley Securities. Please go ahead.

Harold Goetsch: Hey, thank you, guys. Good morning. I got a question on productivity of kiosks. I think you mentioned kiosks in terms over a year were at least 80% or more productive than new kiosks. And so what is your – what can you share with us to help us kind of model the productivity of new kiosks as we enter their, second quarters, third quarter, fourth quarter of operation or its going to pace and cadence of how they mature? Can you give us any feel for that? Thank you.

Alex Kovtun: Yes. Hey, Hal. Go ahead. I think Brandon’s going to take this one.

Glen Leibowitz: All right. We can’t hear Brandon, so I’ll take it. Hal, kiosks, yes, like you said, kiosks do much better after their first year from that ramp from installation as they grow throughout the first year into year two. I don’t have a specific number for you on what percentage they hit throughout that period, but largely the kiosks are ramping up pretty steadily through that first year. Most significant ramp would come from like, in months in quarters two and three. So you’ll see pretty low volumes the first quarter they’re deployed. And then start picking up that growth acceleration in quarters two and three, and then less percentage growth wise in Q4 as you head into year two. So, I hope that gives you a little bit of guidance there without giving too specific numbers that I don’t have off the top of my head.

Harold Goetsch: Yep. So, I’m not mistaken, but last year was a year of consolidating the number of kiosks, and you really didn’t grow kiosks last year. So of the 6300 entering January 1, I think you had 2024 plus, if the average age of those much more than one year ago, probably two or three years old in perspective. Or do you count a new machine in that maturity process when it’s been relocated? Help us figure out [ph].

Glen Leibowitz: Right. Yes, that’s right. It becomes brand new, it’s when it’s relocated. Right. Because we really like the age of a site, not age of the hardware. And so all those relocations really lower the age of our fleet throughout 2023.

Harold Goetsch: Okay. Thank you very much. Okay, good. Thanks a lot. That’s my last question. Thanks.

Glen Leibowitz: Yes. Thanks, Hal.

Operator: Your next question comes from the line of Mike Grondahl with Northland Securities. Please go ahead.

Mike Grondahl: Hey, Scott, you guys had 7,061 kiosks installed at the end of March. How many kiosks are on order or uninstalled? I’m just trying to understand the roll forward 7,000 plus, what is kind of the total population of kiosks?

Glen Leibowitz: Yes, we have roughly 3,000 still on order that are in the process of being produced or shipped to us. So if you look at kiosks, we’ve got outstanding orders for. With the kiosks that are installed, we’ve got a little bit over 10,000 kiosks in that whole curve you there.

Mike Grondahl: Got it. That 3,000 that are ordered, what’s a rough delivery schedule?

Glen Leibowitz: Yes, so the rough delivery schedule, we’ll get the last of those kiosks in mid Q4, and we’re getting them in, like, monthly batches until then. So, I don’t have an exact monthly delivery number for you to list out, but we’re going to get them fairly evenly over the next six months to seven months. To be clear, they won’t all be deployed that quickly. We’ll develop some sort of an inventory there that’ll take some time to deploy, but that’s the cadence on which we’ll receive them all.

Mike Grondahl: Got it. And I think your goal, for lack of a better word, is still 8,000 at year end. And it kind of depends on how quick you get these 3,000 deployed. But 8,000 is kind of what you’ve said and you’re kind of sticking by. Is that fair?

Glen Leibowitz: That’s right. I mean, we’re going to exceed 8,000. We don’t have a new number out there yet, because we’ve got to wait to receive these and we’ve got to see what the pace at which we’re continuing to sign additional retailers. But yes, we’re going to exceed 8,000 to finish the year.

Mike Grondahl: Got it. And can you remind us how many have been redeployed from California this year and how many are left installed in California?

Glen Leibowitz: Well, so California still has roughly 500 kiosks installed there from us. And like we mentioned on our last quarterly call, we’re going to leave those for this year to just continue to have our presence there as we work toward having legislation amended to make it more favorable in 2025. But we’re definitely not going to deploy an additional there until we have more clarity on what legislation looks like.

Mike Grondahl: Got it. And did you say what, about 400 were pulled out of California? Is that the right number?

Glen Leibowitz: Yes, roughly. I think we, I don’t have these exactly in front of me, but I think that’s roughly correct.

Mike Grondahl: Got it. And if I go back to your 7,000 at the end of March, it started the year at like 6,400. I’m trying to figure out at a high level how many are going to at year end, how many will be under 12 months. And am I right in thinking it’s 400 redeployed from California plus, I don’t know, 2,000 and change. If you got to 8,000, it’d be 400 redeployed from California and then 2,000 new installs. But if you end up at, let’s say, 8,400, it’d be 2,400 new installs. Is that the right way to think about roughly how many will be under 12 at the year end?

Brandon Mintz: It’s Brandon. I think my audio is working now. So, I think I talked about this in my section a little bit. But as of the end of Q1, we were around 5,000 kiosks older than 12 months old. So that just keeps it pretty simple for you without doing a bunch of math. So sometime in Q1, there were about 2,000 installed that were less than a year old. And on average they were four months old. The ones less than a year, that cohort.

Mike Grondahl: Got it. So and Brandon, you said at March 31, roughly 5,000 were older. Got it. Okay. I get it. Yes, I can follow that math. That’s easier. And then could you guys just repeat what you said about the month of March when you were talking about seasonality? I think I got it. But if you could repeat that about revenue and adjusted EBITDA, that would be helpful.

Glen Leibowitz: Yep. So revenue for March was 30% higher than January. We just gave that stat to show that you can see the seasonality starting to kick in as we head into the spring. And then EBITDA for March was greater than the combined EBITDA of January and February.

Mike Grondahl: Got it. I got that right then. Okay. And then, Scott, any you’ve kind of mentioned improving free cash flow in 2024, though kind of back end loaded. Any updated thoughts on a range or what that can look like in 2024?

Glen Leibowitz: We definitely expect free cash flow to improve in 2024, but we don’t want to give a range or guidance on it yet. We want to see that Q2 executes the way we expect it to, and then maybe we’ll be ready to talk about that on the next earnings call.

Mike Grondahl: Got it. Got it. And then, are you guys seeing any changes positively or negatively, in consumer behavior out there?

Glen Leibowitz: Nothing material to call out. We continue to see transaction sizes increase, but other than that, we’re not seeing any major changes in consumer behavior.

Mike Grondahl: Got it. And then, hey, last question for me, just on the installs, and I know it’s early, but the new installs in 2024, are they tracking to your internal plan?

Glen Leibowitz: Go ahead, Brandon.

Brandon Mintz: Yes, they are. Even though I mentioned that the year two kiosks were over 80% higher in performance, the ones that are less than a year old are already close to halfway ramped, surprisingly, even though they average about four to five months of age. So, I think it’s going pretty well and we’re seeing a strong lift from the seasonality as expected.

Mike Grondahl: Got it. Great. Thank you, guys.

Operator: Your next question comes from the line of Michael Kupinski with Noble Capital Markets. Please go ahead.

Michael Kupinski: Thank you. And thank you for taking my question. Just a quick one. I know that you were able to buy some kiosks from a bankrupt operator, and many of these were brand new. And I was just wondering if there are further opportunities like that and whether or not at this juncture, given that you’re in a deployment phase, would you consider still expanding the kiosk fleet, if there are other opportunities like that?

Brandon Mintz: Hey, Michael, I think that’s a good question since we did get a fantastic deal on the price per kiosk on what we’ve been buying so far this year on average. Now, one thing to consider is we don’t have a location yet to place every single kiosk that we purchased in 2024. So, we have to assume that they will be sitting for a period of time, if we purchase more in a warehouse. And with that there’s ongoing storage expenses. And if we were to finance the kiosks, ongoing interest payments as well. It’s not out of the question that we would buy more. But if we did, for the U.S. at least, I think we would have to see a similar price point to what we paid, where it’s really, really attractive. I don’t think we’re going to be buying 1,000 kiosks for the U.S. at a normal price or anything like that for the rest of 2024.

It is worth noting, though, that the kiosks for Australia have some minor modifications. There is a different power requirement for kiosks over there. So it may be possible, if Australia goes well, which we believe it will, that we may purchase additional kiosks for Australia.

Michael Kupinski: Got it. And at any given point, you do have kiosk in inventory, right? Anyway, right. I think you had like 700 in the last quarter, if I recall. Is that kind of the number that you would typically have in inventory?

Brandon Mintz: The inventory is always fluctuating, especially right now, based on when we get these batches of kiosks that we’ve ordered and how many locations that we have. However, what I can tell you is during kiosks as of the end of March of this year, and with all of these purchases, once we receive all of the kiosks, by sometime in early Q4, our total fleet size goes up to around 10,400 kiosks. And we estimate at that point maybe around 400 kiosks will be in transit or undergoing some sort of maintenance or repair and offline at any given time. So we still have somewhere close to 3,000 that could be installed to get us to roughly a 10,000 machine operating fleet by the time we receive everything and then install those kiosks.

And like Scott clarified earlier, just because we’ve received everything that we’ve ordered, it does not mean it’s going to be installed. We anticipate there to be a few month lag. Just since we’ve increased our kiosk fleet dramatically over the past few months. The most kiosks we’ve purchased in a year since 2021.

Michael Kupinski: Got it. All right, thank you. That’s all I have.

Operator: [Operator Instructions] Your next question comes from the line of Harold Goetsch with B. Riley Securities. Please go ahead.

Harold Goetsch: Hey, guys, I wanted to ask one follow-up on the direct sales force. I know you had hired at least 10 or more or planned to hire more. I was hoping to give an update on those hires. If those hires expenses have kind of like fully baked in the quarter. And what are your expectations on when their productivity will really kick in? From a revenue standpoint, will be more of a back half of the year or a 2025 event. As they’re, they run down their Rolodex [ph] of contacts in the industry, retail industry. Thanks.

Brandon Mintz: Regarding the expenses of the sales force, it’s pretty much all baked in already in Q1. There were a couple people that started maybe midpoint through the quarter, but for the most part, we wouldn’t expect to see any significant swings up or down with those expenses. And regarding their ramp up, we do anticipate that sales force having higher locations, higher amount of locations signed on a monthly basis towards the end of the year once these salespeople build up more relationships in the industry with convenience store chains, grocery stores, et cetera. But they’re probably a third of the way ramped up, maybe a little more than that so far.

Harold Goetsch: Okay. And one last on that, are you hiring people from an industry that’s deployed services into retail? Kind of what’s the persona of a salesperson that’s taking this role?

Brandon Mintz: Well, we have a couple of them that we brought on that already had experience directly in the Bitcoin ATM industry, but most of them just have experience calling on retail locations already and have kind of that door to door cold calling experience.

Harold Goetsch: All right, terrific. Thank you, Brandon.

Brandon Mintz: And to clarify on that point, most of them are lower level sales reps, and that’s why there’s the cold calling and some door to door outreach as well.

Operator: At this time, this concludes our question-and-answer session. I’d now like to turn the call back over to Brandon Mintz.

Brandon Mintz: Thanks, everyone, for joining our call today. We look forward to providing you future updates.

Operator: Thank you for joining us today for Bitcoin Depot’s conference call. You may now disconnect.