POSaBIT Systems Corp. (Nasdaq: KERN), a legal cannabis payment provider, posted its financial results for the last quarter and full year of 2022, showing record-level revenues and signs of promising expansion.
Achieving double or near-double revenue for the fifth year running, POSaBIT met its core financial guidance metrics, expanded to eight additional states, and ended the year with a healthy balance sheet.
“At a time when there is economic uncertainty and the cannabis industry is struggling, we are growing,” said Ryan Hamlin, CEO and co-founder.
Despite the killed Akerna deal, POSaBIT projects continued growth, raising its 2023 revenue and gross profit forecasts by a meaningful 62%.
POSaBIT said it is focused on continuing to grow its business organically by adding new merchants and driving same-store sales growth at existing locations by fully integrating both its point-of-sale and payments platforms, Hamlin added. He also stated that the company’s pipeline is larger and more robust than at any other point in its corporate history.
Still, the cannabis industry remains highly fragmented, and some companies are showing signs of distress. Hamlin said POSaBIT continues to evaluate potential opportunities that could be a strategic fit at the right price with its existing business, and it has the capital resources to be an aggressive acquirer for the right opportunities.
Hamlin also noted that the integration of the Hypur assets that the company acquired earlier in the month is progressing as expected.
POSaBIT raised its 2023 guidance to include its expectations for these assets, with a goal of growing 2023 revenue to $60 million and gross profit to $13.5 million, each at the midpoint, representing a 62% increase in revenue from its guidance in 2022, after adjusting for the updated accounting treatment.
In other news, POSaBIT acquired certain assets from Hypur Inc. in a cash and equity transaction valued at up to $7.5 million, which the company said implies a purchase price multiple of 1.4x of Hypur’s 2022 revenue.
The company has also strengthened its C-suite, appointing:
- Chris Baker as chief strategic officer
- Sarah Mirsky-Terranova as chief compliance officer
- Michael J. Sinnwell Jr. as chief payments officer
The company’s total revenue for the fourth quarter of 2022 was $24.9 million, up 141% from the same period in 2021. Gross profit was $16.2 million, an increase of 459% compared to the fourth quarter of 2021. Adjusted EBITDA for the fourth quarter was $12.3 million, or 50% of revenue, compared to a loss of $900,000 – or (14)% of revenue – in the same period of the previous year.
For the full year of 2022, POSaBIT’s total revenue was $49.8 million, up 134% from 2021. Gross profit was $22.6 million, an increase of 302% compared to the previous year. Adjusted EBITDA for the year was $10.4 million, or 21% of revenue, compared to $(1.3) million, or (6)% of revenue, in 2021.
Transactional GMV sales for payment services totaled $517 million in 2022, up 43% from 2021. In the fourth quarter of 2022, the company reported $143.5 million in transactional GMV sales, up 36% from the same period in 2021.
The company had cash and cash equivalents of $3.1 million, versus $4.4 million in 2021.