Good morning, and welcome to Bitcoin Depot's fourth quarter and full year 2025 conference call. My name is John, and I'll be your operator today. Before this call, Bitcoin Depot issued its financial results in a press release. A copy will be furnished in a report on Form 8-K filed with the SEC and will be available in the investor relations section of the company's website. Joining us for today's call are Bitcoin Depot CEO, Scott Buchanan, and CFO, David Gray. Following their remarks, we will open the call for questions. Before we begin, Cody Slach from The Gateway Group will make a brief introductory statement. Mr. Slach, please proceed.
Thank you, operator. Good morning, everyone. 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 few 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 statement, please see the disclosures in our earnings release and public filings made with the SEC. 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 SEC 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 captioned risk factors in our recent filings. You may get Bitcoin Depot's SEC filings for free by visiting the SEC website at sec.gov. I'd like to remind everyone this call is being recorded and will be available for replay via a link in the investor relations section of Bitcoin Depot's website. A supplemental earnings presentation highlighting our performance has also been made available on our IR website. Now I will turn the call over to Bitcoin Depot's CEO, Scott Buchanan. Scott?
Thanks, Cody, and good morning, everyone. Thank you for joining us today. 2025 was a strong year for Bitcoin Depot, with growth across the majority of our key operating and financial metrics and meaningful progress executing our long-term strategy. While our fourth quarter results declined year over year, this was primarily driven by recently enacted state regulations that introduced transaction size caps and to a lesser extent, enhancements to our compliance standards that modestly impacted transaction activity. Importantly, we view both developments as constructive for the long-term health, credibility, and sustainability of the digital asset industry. As largest operator in North America, with one of the most robust compliance programs, Bitcoin Depot is best positioned to navigate this evolving regulatory environment. We ended the fourth quarter with approximately 9,700 active machines, reflecting both organic growth and targeted acquisitions.
In October, we completed the transition of the assets acquired from National Bitcoin ATM to our operating platform, adding more than 500 kiosks to our network. We also expanded through new retail partnerships, including GPM Investments, a subsidiary of ARKO Corp., placing our kiosks in 188 initial locations across one of the country's largest convenience store operators. Additionally, we announced a new partnership with Wild Bill's Tobacco, launching with a pilot installation in 10 stores and the opportunity to expand across its portfolio of more than 250 locations. Subsequent to quarter end, we acquired the assets of Instant Coin Bank, further strengthening our presence across the South Central United States. Relocation remains an important lever in our growth playbook. By continuously evaluating kiosk level performance, we can redeploy machines into higher traffic, higher conversion locations, improving unit economics without incremental capital investment.
On the regulatory front, we expect continued activity at the state level in 2026. While jurisdictions may introduce additional transaction limits or enhanced consumer protection requirements, we believe these measures ultimately raise the industry standards and reinforce the advantages of scale, compliance infrastructure, and regulatory engagement, areas where Bitcoin Depot has led for years. Building on our previously announced First-Transaction ID Verification policy in February, we extended identity verification requirements for returning users, adding an additional layer of oversight and real-time transaction monitoring. These measures strengthen our consumer protection, deter bad actors, and further differentiate Bitcoin Depot as a trusted compliant platform as the industry matures. Earlier this month, we announced the acquisition of Kutt, a peer-to-peer social betting platform that enables users to wager directly against one another across sports, entertainment, and user-generated events.
This acquisition marks our entry into the P2P social betting market and reflects our broader strategy to thoroughly diversify beyond Bitcoin ATMs by leveraging our existing payment infrastructure, compliance capabilities, and consumer engagement expertise. To add to this diversification strategy, just last week we announced the launch of ReadyBucks, a standalone business advance platform providing working capital solutions to small businesses, gig workers, and independent contractors. ReadyBucks offers advances ranging from $500- $2,000 in its initial rollout across select states. Importantly, this platform operates independently from our Bitcoin kiosk business while leveraging the same compliance, underwriting, and payments infrastructure that underpins our core operations. Together, Kutt and ReadyBucks represent important steps in our evolution from a single product operator into a broader fintech platform.
Both initiatives leverage our core strengths, compliance, payment, risk management, and customer trust, while expanding our addressable market and creating new scalable revenue streams. With that, I'll turn the call over to our CFO, David Gray, to walk you through our financial results in more detail. David?
Thanks, Scott, and good morning, everyone. Jumping right into our results for the fourth quarter. Revenue in the fourth quarter was $116 million compared to $136.8 million in the prior year period, reflecting the impact of recently enacted state regulations and enhanced compliance standards. For the full year, revenue increased 7% to $615 million, driven by kiosk expansion and continued growth in median transaction size. In fact, at the end of 2025, installed kiosks were 9,721, up 15% from the end of 2024. Median transaction size also grew to $400, up 43% from the end of 2024. We now also define lifetime value, which measures the average cumulative dollar value of all purchases users acquired from inception through the most recent quarter.
Users who have completed at least one transaction between 2016 and December 31, 2025, have transacted a total of $5,311 on average, which is up 5% from the previous year. Gross profit in the fourth quarter of 2025 was $15.3 million compared to $23.5 million in the fourth quarter of 2024. Fourth quarter gross margin was 13.2% compared to 17.2% last year, primarily reflecting lower revenue volume in the quarter. For the full year, gross margin expanded 300 basis points to 17.2%, demonstrating the underlying operating leverage in our model. Total operating expenses were $21.4 million compared to $15.0 million in last year's fourth quarter, with the increase due to higher legal and incentive compensation-related expenses.
For the year, total OpEx was up 7% to $72.1 million due to the higher legal expenses. GAAP net loss for the fourth quarter of 2025 was $24.9 million compared to a net income of $5.4 million for the fourth quarter of 2024. The fourth quarter of 2025 included an $18.5 million accrual for an arbitration judgment liability. Net loss attributable to common shareholders in the fourth quarter of 2025 was $21.6 million or -$2.08 per share, compared to a net loss of $6.6 million or -$2.54 per share in last year's fourth quarter. GAAP net income for the year was down slightly to $5.1 million compared to $7.8 million in 2024.
Adjusted EBITDA in the fourth quarter was $1.6 million compared to $13 million in the prior year, reflecting lower revenue and higher operating expenses. For the full year, adjusted EBITDA increased 42% to $56.4 million and underscoring the strength of our operating model over a full cycle view. Now turning to our balance sheet and cash flow. Cash, cash equivalents, and cryptocurrencies as of December 31, 2025 increased to $76.6 million compared to $31.0 million at the end of 2024. During the fourth quarter, we completed a $15 million registered direct offering of our Class A common stock, which we are using for general corporate purposes. We generated $34.0 million of cash from operating activities in 2025 compared to $22.5 million last year, an increase of 51%.
Debt, which includes the term loan, finance leases, and profit share arrangements, was $62.5 million at the quarter end compared to $60.9 million at the end of 2024. Of the total debt balance, $18 million is our term loan and $40 million is comprised of profit-sharing liabilities. As a reminder, these profit share arrangements entail an upfront lump sum payment to the company by our partners in exchange for a portion of future profits generated from a specified group of kiosks for a specified period of time. Because we continue to operate and typically retain title to the machines, we must account for these arrangements as debt under U.S. GAAP. We currently do not anticipate further expansion of the profit share program going forward. Now turning to our outlook.
Given the dynamic regulatory environment Scott discussed, 2026 is likely to be a challenging year for our core BTM business, where we expect revenue to decline between 30%-40% year-over-year as the industry resets and adapts to a changing landscape. We will be focused on cost containment and fleet optimization to adapt to these changes, while also working to scale our recently acquired P2P betting platform and newly launched merchant cash advance products. However, we do not expect these to have a material impact on our overall revenue in the current year. Thank you for joining us today and for your continued interest in Bitcoin Depot. We appreciate your support and look forward to keeping you updated as we continue to build a compliant, diversified fintech platform designed for long-term growth. With that, I'll turn it over to the operator to take questions.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. At this time, I would like to remind everyone, in order to ask a question, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Our first question comes from the line of Mike Colonnese from H.C. Wainwright. Please go ahead.
Thank you for taking my questions. Scott, congratulations on the new role with the firm. Well deserved. First question for me, I was wondering if you could unpack the 2026 revenue guidance a bit. You know, just trying to get a better sense of the underlying kiosk growth assumption embedded in the outlook. David, you touched on this a bit that the Kutt acquisition isn't gonna be a material contributor, but just be great to get a better idea as to what that revenue contribution from Kutt could look like for 2026.
Yeah. Hey, Mike, this is Scott. Thank you for the question. For the core BTM business, I mean, the revenue decline, obviously the big range that David gave, and that's largely because we don't know exactly what regulatory changes will happen this year, right? We know states will pass additional measures that will limit the economics in those states, but we don't know how many states or exactly what bills will pass. That's our best estimate at this point in terms of what the revenue decline could be. In terms of number of kiosks, that'll likely stay flat or down slightly depending on how we wanna handle relocations where states passed particularly negative bills.
It will really just depend on what specifically gets passed during this year, and we'll continue to update guidance as we have better clarity of that throughout the year. On Kutt is a relatively small business. We think we can accelerate the growth substantially by investing more into their marketing and engineering teams. They have had a very small team prior to us acquiring them, and we think there's a lot of kinda quick wins we can get there. As far as a specific revenue forecast, we don't have that, but I mean, revenue will definitely be below $5 million for Kutt this year.
Got it. Very helpful, Scott. Appreciate that. How do you guys envision the new Bitcoin ATM regulations that have been passed and ones that are to be passed at the state level changing the M&A landscape from here? Obviously, you guys have been acquisitive in the past. Can we expect Bitcoin Depot to be more acquisitive this year given some of the changes to the law?
Potentially. Again, it'll really depend on what exactly passes and how the rest of the industry reacts to those regulatory changes. We've kinda been opportunistic in the way we approached M&A, where if we've seen some smaller competitors that are struggling to comply with these challenging regulations from an engineering and just operating standpoint, it's given us an ability to buy these at attractive valuations. We're not going out and hunting to acquire people in the space, but if there's attractive opportunities out there, we're gonna be strategically acquisitive. It could happen, but it's not like we're actively trying to roll up the entire industry right now. We really wanna see how everyone else reacts to the changes and how well they can comply and how that affects all of our volume going forward.
Great. Thank you for taking my question.
If you would like to ask a question, please press star followed by the number one on your telephone keypad. Our next question comes from the line of Patrick McCann with Noble Capital Markets. Please go ahead.
Hey, good morning. Thanks for taking my questions. Just have a couple here. Both with regard to regulations. I guess first with regard to 2026 and what you're seeing there in terms of which states are in the process of passing regulations and which ones, you know, recently did. I was wondering if, you know, by the end of 2026, do you have a sense of where the regulatory landscape will settle for the, you know, for your largest states? I guess, you know, really my question is, do you believe you'll be at a point where many of your largest states will have gone through the regulatory changes? Maybe how much more disruption or meaningful disruption would you expect that would still be ahead in terms of states that haven't yet gotten around to this?
Yeah. I think a great question. Thank you, Pat. I think in 2026, we'll have seen 80%-90% of the states decide where their stance is on this from a regulatory standpoint, at least initially. 2027 should see much, much less activity. There could be some revisions to existing states with bills in 2027 as they kind of learn more and see what the impact is of what they passed initially. Generally, I would say by the end of 2026, we'll have clarity on which states are going to regulate and how.
Great. That's helpful. Then my other question is really just a follow-up. With the regulatory actions going on in the states, I was just wondering how that affects your view of the international markets. Are those going to be having similar issues or similar developments, or do those become more appealing now? Has that changed or maybe accelerated your ambitions in the international markets at all?
I don't know that we've seen changes internationally anywhere like what we're seeing in the U.S. We're still actively working on two more countries currently, that we would hope to launch in either late Q1 or early Q2. We're still actively working on international expansion, and we still have high hopes for that being a successful path for us. But again, it'll depend on each jurisdiction, right? Like, there's still so few kiosks in most of these countries that these countries probably haven't even thought about regulating the industry. We'll just have to pay close attention as we're going into these spaces on how they view the industry once there starts to be a meaningful number of kiosks in those countries.
Great. I appreciate it.
At this time, that concludes our question and answer session. I will now turn the call back over to Scott Buchanan for closing remarks.
Thank you, everybody, for joining the call today. We look forward to keeping you updated on our progress throughout the year.
Thank you for joining us today for Bitcoin Depot's fourth quarter call. You may now disconnect.