Ryvyl Inc. (NASDAQ:RVYL) Q1 2024 Earnings Call Transcript

Ryvyl Inc. (NASDAQ:RVYL) Q1 2024 Earnings Call Transcript May 14, 2024

Operator: Good afternoon everyone and welcome to Ryvyl Inc’s First Quarter 2024 Conference Call. At this time, all participants are in a listen-only mode [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 session. 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 belief, 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 for 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 our contemplated by the — in 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.

Ben Errez: 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 of 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 the 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 increased 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 rival you to leverage Visa Direct 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 payments software.

We plan to onboard our e-commerce merchant payment service provider customers onto the award-winning ACH payment 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 expected 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 US 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 for 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 payout methods including real-time electronic funds or direct deposits.

In addition our banking-as-a-service regulatory transaction reduces fraud and maintain 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.

George Oliva: 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 segment.

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 US 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.

Min Wei: 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, Charge Savvy, American Samoa and other portfolios, processed $239 million in the first quarter by 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, while 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 US. We are making rapid progress on PayFac-as-a-service and Independent Software Vendor partnership 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 EU 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 US 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 US, 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.

A – Ben Errez: Thank you, Min. Prior to this call we have received a number of questions. There’s a lot of interest to all shareholders. Before opening the Q&A to analysts, we will address those. The first question although, it’s for 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?

Fredi Nisan: Thank you, Ben and thank you for everyone who listening. We’re expected to continue a great momentum in Europe, RYVYL ISV was because I saw that Asian portfolio in Europe and in the US. 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 US 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 move our customer into the platform, to allow a faster integration and other solutions that exist with this relationship for example, Tokenization system within new network of Visa/MasterCard or banking to offer a quicker push to cloud than Visa Direct and other 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 new network and relationship. And that will allow us to leverage the Visa Direct network to push money in 80 different countries. And we’re starting with the first five, and we already started pushing money in Canada. So I am 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 I am very, very excited. And this is how we see the company grow and in the second half of this year. So, I’m very excited. Thank you.

Ben Errez: 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?

Min Wei: 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 have continued into Q2. As we reported these issues have affected the US, while Europe continues on a stronger growth trajectory. In the US, we’re expanding into new verticals to diversify and we’re working on specific identified business opportunities in this new verticals. In addition, we started to monetize our Platform as a Service licensing business and that do not have the same constraints that affected the Q1 results. Although this 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, at $100 million revenue, which should be positive EBITDA and at the $120 million revenue, we expect to be profitable. It is our plan to continue focusing on resources to accelerate revenue growth and reduce non-critical spending to reach our profitability objectives.

Ben Errez: Thanks, Min. The next question is for George. Are you comfortable that you have enough liquidity to sustain the faster profitability? Why did you pulled away? And what is your plan to manage the note coming due in April of 2025?

George Oliva: 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 US Fortunately, they are very profitable and are ahead of plan. And we were able to repatriate $7.5 million to date from EU to help subsidize the temporary loss of processing in the US. 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 and cost control to help manage the liquidity needs.

But it’s a challenging – it’s a challenging operation to have multiple business units, somewhat increasing revenue, somewhat decreasing revenue but we’re managing working capital very tightly and centralized at the US. Regarding the note, we have extended the maturity of the note in the past and we are again in active discussion with the note holders to do so again, next quarter then the note would be within – would be due within one year and affect 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.

Ben Errez: Thank you, George. I’m going to take the next question. How do you measure your success or another way you’re saying there’s one of the most important key performance in the industry, where are you doing better? And what trends do you expect in 2024? So I do like data science, in fact the shout out to my son was a data scientist. And the best way to measure the success is using key performance indicators. The most meaningful KPI for Ryvyl include 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 and 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 2023 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?

Min Wei: Thank you, Ben. Our top three sources of revenue are as follows. Number one is, merchant acquiring service revenue. Number two is, banking IT service revenue and we are gaining significant momentum in the European market, as mentioned earlier. And number three, other revenues from the new verticals and the anticipated licensing revenue from payback as a service offering, which is due to go to market, through the independent software vendor partnerships, Fredi mentioned earlier In addition, we recruited more strategic resources, repayment experience and the speed of onboarding is improving, giving us confidence in stronger growth in the second half of the year.

Ben Errez: Thank you, Min. Operator at this point, we would like to open the floor for analyst questions. We see that several analysts at the register for questions.

Q&A Session

Operator: Sure. Thank you. At this time, we will be conducting a question-and-answer session [Operator Instructions] Our first question comes from the line of Kevin Dede with H.C. Wainwright. Please proceed with your question.

Q – Kevin Dede: Thank you for having me on Ben and Min, it’s good to talk to you again.

Ben Errez: Thank you.

Q – Kevin Dede: 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?

Ben Errez: I’m going to have Min to address that. Go ahead, Min.

Min Wei: Hey, Kevin thank you for the question. So it is reasonably be — the second quarter, so after the first quarter, and then we went live with services as Fredi indicated our initial currencies, we cover in Phase 1, five currencies including GBP, US dollars, Euro and Canadian dollars. We already went live with the business in Canada, and after that we expect to launch into the rest of the Phase 1 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.

Q – Kevin Dede: 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 on 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 and a stronger second half?

Fredi Nisan: Yes. [indiscernible] with Min

Min Wei: Kevin, I think that’s a very specific maybe multiple questions there. But at a high, level in Q1 we did running to the technology and compliance requirements in a change through our, processing channel. We are adjusting for that, right away. You know really the recovery path we’re referring to here, Kevin, is that, in conjunction with our switch to mobile payment, mobile app process payment — payment processing, excuse me, my apologies for that. And we have fine-tuned the way we process, payments for our customers, our merchants, in a more compliant manner. So we’re able to, switch here, adjust for that, and load 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.

It’s going to take time, and we’re working very hard to, put together the communication material training program so that, as we — fully roll out the mobile case, payment solution, we can ensure that we provide not only the training but also the incentive to the end users to adopt. So as a result of that, Kevin, we have updated and adjusted our revenue. Hence, we made the comment earlier, we expect to rebuild momentum towards, later part of the second quarter, but then we really expect steam to be picked up starting in the early part of Q3.

Ben Errez: 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 margins. 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 on-boarding the old paperwork or portfolio onto the new platform.

Kevin Dede: 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?

Ben Errez: To say that, we are not confused by it would be an issue. We work in an environment that is an ecosystem that is fed by a lot of different contributors. And a lot of times, we see trends that are influenced by perception. Sometimes, it’s a perception of risk by association. Sometimes it’s perception of risk for verticals. And sometimes it’s an interpretation of regulation 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 warming ground, it’s better for us to listen and follow these guidelines, even if they are not always mandated from the regulatory perspective.

Fredi Nisan: And let me add one more thing just for what Ben just mentioned. I think it’s important. Banking and acquiring processing, the whole industry is changing. FDIC is pushing hard on the banking, on the risk, 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 it is moving into a technology that is more secure, more transparent, 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 it. So that’s kind of a high level.

Kevin Dede: 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.

Ben Errez: Okay. Min?

Min Wei: Kevin, I’ll address that question. That’s a good observation, right? That means you really are into the details data analytics of our business. And at a high level, as I mentioned earlier, our top three revenue drivers, one is merchant acquiring service revenue, number two is banking and 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 reduced volume in the process, that said, we more than offset that by increase, margin increased banking as a service revenue and volume in Europe. So that’s one observation, right? Two is, I think that’s basically what you’re looking at, is the rate being compared against volume.

The residual percentage for banking as a service revenue is lower than the acquiring in the business we have. So as a result of that, when you have increased volume for banking and service revenue, but then has a lower residual percentage compared to higher residual percentage for the acquiring business, that’s why you see, even though we have improved volume overall, but then the residual percentage probably declined quarter over quarter because of that. Okay? Hopefully that makes sense to you.

George Oliva: So, I would add, so that is basically a mix between Europe and the US. 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 US. So I do think 2% is still a good ballpark metric long term.

Ben Errez: Right. This is Ben again. This is the area where we anticipate the stabilized performance to go back to the original performance. I would also have to 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 may be shrunk. So that’s a very important distinction.

Kevin Dede: Thank you for highlighting that, Ben. I appreciate it. Thank you very much for your explanations, gentlemen. I’ll hop back in the queue.

Ben Errez: Thanks, Kevin. We always appreciate your support. Operator, back to you.

Operator: Thank you. [Operator Instructions] And our next question comes from the line of Kevin Dede with H.C. Wainwright. Please proceed with your question.

Kevin Dede: 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 rival’s block offering, and how you’re positioning Coyni within the realm.

Ben Errez: Okay. On that strategic question, back to CEO Fredi.

Fredi Nisan: Thank you. So let’s start with banking as a service. Banking as a service in New York is a license for other financial Institution Company bank to utilize our backbone, our licenses to be able to offer their customer different services, paper payments, wire payment [Technical Difficulty] solution. And now we’re going to open up Visa [Technical Difficulty] part of the on and off ramps solution. All of that now being implemented can be utilized in a variety of ways. So, we see the volume already. We see how the solution can help other banks and companies and through that process we see a huge growth opportunity in that space. So, that’s one. You cloud service — we are fixing that solution, we’re working with core [ph] directly on a few of the communities that we tried to understand how are we going to go live with that, but the Federal is up and running but at an interesting pace.

This big lift but we are very still very excited about the opportunity and we’re going to share more hopefully in Q2. That in regards to the Blockchain-as-a-Service how Coyni benefit from that? Coyni is the payment software that makes [Technical Difficulty] 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 Coyni just receive its licenses in Europe to operate as a payment facilitator. I believe that’s the correct license. It allow us to do payments for asset renewal [indiscernible]. We are working with our partners First Data. We have seen with First Data to Coyni as a PayFac to our partners. So, we have a lot on our plate that we’re trying to turn on as quick as possible and doesn’t generate revenues as quick as possible.

But all of those projects are working for a long time. It’s heavy on compliance regulation, but we now have 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.

Kevin Dede: Yeah Fredi just to add on that, how should I look at RYVYL Block versus Ryvyl within the context of Banking-as-a-Service and coyni’s functionality.

Fredi Nisan: So, RYVYL Block is a separate product line. RYVYL Block was designed I would say the place of blockchain for economy. 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 Fintech company to implement blockchain services without going through a year or two of implementation and they [indiscernible] 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. Coyni offer the front-end of it, is offering the functionality, the ability to prompt payment [Technical Difficulty] the ability to onboard clients, but the infrastructure — underlying infrastructure is the same block reorganizing infrastructure? Hopefully that helps.

Kevin Dede: Yes, okay. So, if I were to summarize it RYVYL Block is basically the name that you’ve given Blockchain-as-a-Service?

Fredi Nisan: That’s correct. Internally, yes, RYVYL Block, correct.

Kevin Dede: Okay. Okay. Apologies. It was just you guys have — to your point Fredi, 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.

Ben Errez: Thanks for your continued support.

Kevin Dede: Okay. No — My pleasure. Ben you’ve talked a lot about your international expansion and you focused a lot on Europe, but I — 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 prove — might offer a similar opportunity that some of the Eastern Europeans want to offer such as maybe South Africa or Nigeria — maybe even Egypt how are you looking sort of beyond Europe and expanding your international opportunity?

Ben Errez: Yeah. So that’s a good question. And it demonstrates that someone is paying attention. So this game is a lot about efficiency. We have more business that we can onboard in a reasonable that — what we do now how big the lower 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 because we can take. You know, American Samoa was an interesting case study for us and where we entered the market and now control the majority of transactions supporting that GDP in the nation. And we’re very happy about that case study — proving a point.

However looking at the quality of revenues that we currently accumulate in the European market, it 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 strength. And then even though we may be leaving some money on the table, but we have to first address the most efficient revenue growth and the move before we look to more direct market.

Kevin Dede: Question — on this is a great segue. Ben you mentioned America Samoa. I remember on multiple calls last year you referenced what you thought would be other opportunities for other sort of closed systems such as that in other potential verticals? And I understood understand obviously there’s a lot in 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?

George Oliva: So Kevin I’ll answer that question to demand. So American Samoa continue to be very strategic in the business opportunity for us in our portfolio. We continue to process the volume as we indicated previously I think more than 60 days on the island and we have 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. We’re not in a position to share more details, but we are in the dollar for that. Now secondly, for smaller contained ecosystem, such as American Samoa, we continue to manage all the major business opportunities in our sales pipeline. As Ben mentioned we prioritized based on the level of effort involved alignment with our product road map as well as resource utilization.

We do have adequate major big ticket opportunities in the pipeline in the near term that we are prioritized on rather than kind of pursuing other island business even though we do have some potential in the longer term.

Ben Errez: Let me add a couple of words on that. This is Ben again. Remember that the — 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 with the most efficient way that we can before venturing out to other opportunities that they are more fringe at this point say that, right. I hope that message is clear.

Kevin Dede : Yes, yes. No, absolutely. But just to be clear, I mean, I guess, I was thinking of closed ecosystems sort of beyond a geographic implementation, may be something more akin to Square’s payment processing. And thank you very much for the explanation. I appreciate it and I’ll cede the floor at this point. Thank you very much gentlemen.

Ben Errez: Thank you, Kevin.

Operator: Thank you. And we have reached the end of the question-and-answer session. Now I’ll turn the call back to Ben Harris for closing remarks.

Ben Errez: 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 2024 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.

Operator: This concludes today’s conference call. Thank you. You may now disconnect.