BM Technologies Reports EBITDA Positive Results for Fourth Quarter and Full Year 2020
BM Technologies Inc. (BMTX) reported strong growth in its 2020 results, with serviced deposits increasing by 139% to $960 million and new business serviced deposits up 579% year-over-year. The company recorded GAAP revenues of $66.9 million, an 8% decrease from 2019, while pro forma core revenues rose by 9%. EBITDA turned positive at $3.5 million. The firm added nearly 450,000 accounts in 2020, with debit card spending increasing by 18% to $2.8 billion. Looking forward, BMTX anticipates accelerating growth in 2021, bolstered by strategic partnerships and product expansions.
- Serviced deposits increased by 139% to $960 million.
- New business serviced deposits rose 579% year-over-year.
- Pro forma core revenues grew by 9% to $66.7 million.
- EBITDA positive at $3.5 million for the full year 2020.
- Added nearly 450,000 new accounts in 2020.
- Debit card spending of $2.8 billion increased by 18% compared to 2019.
- GAAP revenues decreased by 8% from 2019 to $66.9 million.
- Interchange and card revenue declined by 7% to $26.3 million.
New Business1 Serviced Deposits Increased
RADNOR, Pa., March 17, 2021 (GLOBE NEWSWIRE) -- BM Technologies Inc. (NYSE American: BMTX) (“BM Technologies,” “BMTX,” “we,” or the “Company”) one of the largest digital banking platforms in the country, today reported results for the fourth quarter and full year 2020.
HIGHLIGHTS
- Q4 2020 GAAP revenues:
$17.3 million ; Q4 2020 pro forma2 core revenues of$17.3 million , a16% increase compared to Q4 2019 - 2020 GAAP revenues:
$66.9 million ; 2020 pro forma core revenues of$66.7 million , a9% increase compared to 2019 - Added nearly 450 thousand new accounts in 2020
- EBITDA positive; full year 2020 pro forma core EBITDA of
$3.5 million ; EBITDA margin has expanded to5% for 2020 and8% for 4Q20 - Total serviced deposits of
$960 million at December 31, 2020, a139% increase compared to 2019. New business serviced deposits increased579% compared to 2019. Subsequent to year-end, deposit growth has continued with over$1.3 billion in deposits as of March 15, 2021 - Debit card spend was
$2.8 billion in 2020, an18% increase compared to 2019; New business debit spend increased nearly250% compared to 2019 - Our high volume, low-cost customer acquisition strategy continues to yield a customer acquisition cost (CAC) below
$10 per active account3 - Positive operating leverage in 2020, given
$5.4 million of pro forma core revenue growth exceeded$2.2 million of pro forma core operating expense growth - We recently executed a contract with a higher education services partner giving us access to new colleges and universities
- Continued tailwinds from federal stimulus – the latest legislation includes
$40 billion for higher education and students - On January 4, 2021, BankMobile Technologies, Inc. completed its planned business combination with Megalith Financial Acquisition Corp., Inc. and was rebranded BM Technologies, Inc. The company is now fully independent with no ownership by Customers Bank, and trades under the ticker BMTX.
Luvleen Sidhu, BMTX’s Chair, Chief Executive Officer, and Founder commented, “We are happy with our results in 2020, and even more excited about the opportunities that lie ahead as an independent publicly traded company. In 2020 we were EBITDA positive, a differentiator among fintech companies, and we grew our business despite COVID-19 uncertainties. Looking forward, we expect growth to accelerate in 2021, fueled by expansion of our existing white label business, developments in our student business, and the addition of our newest workplace banking business.”
On January 4, 2021, BankMobile Technologies, Inc. became an independent company after the completion of a divestiture transaction and was rebranded BM Technologies, Inc. Previously, BankMobile Technologies was a wholly owned subsidiary of Customers Bank, which is a wholly owned subsidiary of Customers Bancorp. All of the business and financial results disclosed here-in occurred during the period BankMobile Technologies was a wholly owned subsidiary of Customers Bank, unless otherwise indicated.
Business Update
BMTX operates in 3 verticals: higher education and student banking, white label banking and workplace banking.
Despite COVID-related higher education headwinds in 2020, we retained more than
Our white label business is experiencing significant growth, including
In late 2020, we launched our workplace banking business. We see considerable opportunity to partner with employers to provide financial services benefits, including competitive checking accounts, savings accounts, and lending products to their employees. There are over 20 million US employees that work at Fortune 1000 companies, which we consider our primary target. In the fourth quarter we were excited to announce a partnership with Prudential Financial, Inc. to provide financial wellness services as part of the Workplace Banking offering, and also announced a partnership with BenefitHub a leading marketplace for employee benefits.
FINANCIAL HIGHLIGHTS
2020 GAAP revenues totaled
| For the Quarter Ended December 31, | % | |||||||||||||||
| (dollars in thousands) | 2020 | 2019 | Change | Change | ||||||||||||
| GAAP revenues | $ | 17,330 | $ | 17,601 | $ | (271 | ) | (2 | )% | |||||||
| Pro Forma Core revenues6 | 17,250 | 14,865 | 2,385 | 16 | % | |||||||||||
| Pro Forma Core EBITDA | 1,323 | 37 | 1,286 | NA | ||||||||||||
| Pro Forma Core EBITDA Margin | 8 | % | 0 | % | ||||||||||||
| For the Year Ended December 31, | % | ||||||||||||||||
| (dollars in thousands) | 2020 | 2019 | Change | Change | |||||||||||||
| GAAP revenues | $ | 66,858 | $ | 72,307 | $ | (5,449 | ) | (8 | )% | ||||||||
| Pro Forma Core revenues | 66,679 | 61,337 | 5,342 | 9 | % | ||||||||||||
| Pro Forma Core EBITDA | 3,549 | (2,230 | ) | 5,779 | NA | ||||||||||||
| Pro Forma Core EBITDA Margin | 5 | % | (4 | )% | |||||||||||||
BUSINESS HIGHLIGHTS
| December 31, | % | |||||||||||||||
| (dollars in millions) | 2020 | 2019 | Change | Change | ||||||||||||
| Ending Serviced deposits | $ | 960 | $ | 401 | $ | 559 | 139 | % | ||||||||
| Debit spend | 2,791 | 2,370 | 421 | 18 | % | |||||||||||
2021 OUTLOOK
“With our divestiture behind us, we are excited about the opportunities that lay ahead as an independent publicly traded company. Already this year, we have expanded our team with select key hires, signed several important LOIs, and are on track to sign another significant white label partner. We are excitedly working towards launching new options for student customers in partnership with Google, and our existing business continues to scale. We are on track to reach our 2021 EBITDA target of
2020 Income Statement Trends
Pro Forma Core EBITDA totaled
| For the Year Ended December 31, | YoY Chg | ||||||||||||||
| ($ in millions) | 2020 | 2019 | $ | % | |||||||||||
| Interchange and card revenue | $ | 26.3 | $ | 28.1 | $ | (1.8 | ) | (7 | )% | ||||||
| Deposit servicing fees | 22.3 | 16.5 | 5.8 | 35 | % | ||||||||||
| Account fees | 11.3 | 10.9 | 0.4 | 3 | % | ||||||||||
| University fees | 5.3 | 5.0 | 0.4 | 7 | % | ||||||||||
| Other | 1.5 | 0.9 | 0.6 | 73 | % | ||||||||||
| Pro Forma Core Revenues | $ | 66.7 | $ | 61.3 | $ | 5.3 | 9 | % | |||||||
| Pro Forma Core OpEx (Excl. Depr. & Amort.) | 63.1 | 63.6 | (0.4 | ) | (1 | )% | |||||||||
| Pro Forma Core EBITDA | $ | 3.5 | $ | (2.2 | ) | $ | 5.8 | NM | |||||||
| Less: Interest Expense | 1.4 | 0.5 | 0.9 | NM | |||||||||||
| Less: Depreciation & Amortization | 11.9 | 9.3 | 2.6 | 29 | % | ||||||||||
| Pro Forma Core Pre-Tax Income | $ | (9.8 | ) | $ | (12.1 | ) | $ | 2.3 | (19 | )% | |||||
“NM” refers to changes greater than
Interchange and card revenue declined
2020 GAAP expenses, including depreciation and amortization totaled
Depreciation and amortization totaled
Interest expense totaled
An updated version of BMTX’s investor presentation is available on the Company’s Investor Relations website at ir.bmtxinc.com.
Contact Information
Investors:
Bob Ramsey
Chief Financial Officer, BM Technologies, Inc. (BMTX)
484-926-7118
rramsey@bankmobile.com
Media Inquiries:
Kati Waldenburg
Vice President, Rubenstein Public Relations, Inc.
212-805-3014
kwaldenburg@rubensteinpr.com
ABOUT BM Technologies, Inc.
BM Technologies, Inc. (NYSE American: BMTX, BMTX.W) is among the largest digital banking platforms in the U.S., providing access to checking and savings accounts, personal loans, credit cards, and financial wellness. It is focused on technology, innovation, easy-to-use products, and education with the mission of being “customer-obsessed” and creating “customers for life.” The BMTX digital banking platform employs a multi-partner distribution model, known as “Banking-as-a-Service” (BaaS), that enables the acquisition of customers at higher volumes and substantially lower expense than traditional banks, while providing significant benefits to its customers, partners, and business. BMTX currently serves over two million account-holders and provides disbursement services at approximately 725 college and university campuses (covering one out of every three students in the U.S.). BM Technologies, Inc. is a technology company and is not a bank, which means it provides banking services through its partner banks. More information can also be found at https://ir.bmtxinc.com/
FORWARD LOOKING STATEMENTS
This release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainty. Words such as “anticipate,” “estimate,” “expect,” “intend,” “plan,” and “project” and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. Such statements are based on management’s current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Investors are cautioned that there can be no assurance actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Please refer to the risks detailed from time to time in the reports we file with the Securities and Exchange Commission (“SEC”), including our proxy statement/prospectus filed with the SEC on December 11, 2020, our Registration Statement on Form S-1 filed with the SEC on February 12, 2021, as well as other filings for additional factors that could cause actual results to differ materially from those stated or implied by such forward-looking statements. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law.
UNAUDITED FINANCIAL STATEMENTS
BANKMOBILE TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS - UNAUDITED
(amounts in thousands)
| For the Years Ended December 31, | ||||||||||||
| 2020 | 2019 | 2018 | ||||||||||
| Operating revenues: | ||||||||||||
| Interchange and card revenue | $ | 26,285 | $ | 28,124 | $ | 29,923 | ||||||
| Servicing fees from Customers Bank | 22,465 | 27,425 | 16,140 | |||||||||
| Account fees | 11,308 | 10,937 | 6,544 | |||||||||
| University fees | 5,320 | 4,964 | 4,720 | |||||||||
| Other | 1,480 | 857 | 189 | |||||||||
| Total revenues | 66,858 | 72,307 | 57,516 | |||||||||
| Operating expenses: | ||||||||||||
| Technology, communication, and processing | 27,404 | 27,310 | 30,281 | |||||||||
| Salaries and employee benefits | 26,076 | 22,758 | 14,607 | |||||||||
| Professional services | 9,304 | 10,646 | 8,301 | |||||||||
| Provision for operating losses | 5,170 | 9,367 | 5,417 | |||||||||
| Occupancy | 1,428 | 1,791 | 1,656 | |||||||||
| Customer related supplies | 825 | 1,538 | 2,117 | |||||||||
| Advertising and promotion | 941 | 1,354 | 557 | |||||||||
| Merger and acquisition related expenses | 739 | 100 | 4,090 | |||||||||
| Other | 5,346 | 4,744 | 5,065 | |||||||||
| Total expenses | 77,233 | 79,608 | 72,091 | |||||||||
| Loss from operations | (10,375 | ) | (7,301 | ) | (14,575 | ) | ||||||
| Non-operating expenses: | ||||||||||||
| Interest expense | 1,395 | 535 | — | |||||||||
| Loss before income tax expense | (11,770 | ) | (7,836 | ) | (14,575 | ) | ||||||
| Income tax expense | 23 | 27 | 28 | |||||||||
| Net loss | $ | (11,793 | ) | $ | (7,863 | ) | $ | (14,603 | ) | |||
NON-GAAP FINANCIAL MEASURES - UNAUDITED
Certain financial measures used in this Press Release are not defined by U.S. generally accepted accounting principles (“GAAP”) and as such are considered non-GAAP financial measures. Pro forma core revenues, expenses, and EBITDA exclude the effects of items we do not consider indicative of our core operating performance and normalize the deposit servicing fee in past periods to be consistent with the current servicing agreement. Management believes the use of pro forma core revenues, expenses, and EBITDA are appropriate to provide investors with an additional tool to evaluate the Company's ongoing business performance. Investors are cautioned that these non-GAAP financial measures may not be defined in the same manner by other companies and, as a result, may not be comparable to other similarly titled measures used by other companies. Also, these non-GAAP financial measures should not be construed as alternatives, or superior, to other measures determined in accordance with GAAP.
Reconciliation - GAAP Revenues to Pro Forma Core Revenues (in thousands)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||
| GAAP revenues | $ | 17,330 | $ | 17,601 | $ | 66,858 | $ | 72,307 | |||||||||||||||||||||||
| Deposit servicing fee adjustment | — | (2,736 | ) | — | (10,970 | ) | |||||||||||||||||||||||||
| Fraud reimbursement adjustment | (80 | ) | — | (179 | ) | 0 | |||||||||||||||||||||||||
| Pro Forma Core Revenues | $ | 17,250 | $ | 14,865 | $ | 66,679 | $ | 61,337 | |||||||||||||||||||||||
Reconciliation - GAAP Operating Expenses to Pro Forma Core Operating Expenses (in thousands)
| Year Ended December 31, | ||||||||||||||||||||||||||||||||
| 2020 | 2019 | |||||||||||||||||||||||||||||||
| GAAP total expenses | $ | 77,233 | $ | 79,608 | ||||||||||||||||||||||||||||
| Non-cash loss on software write-down | (1,248 | ) | — | |||||||||||||||||||||||||||||
| Fraud reimbursement adjustment | (179 | ) | (4,653 | ) | ||||||||||||||||||||||||||||
| Merger expenses and DOE settlement | (739 | ) | (2,100 | ) | ||||||||||||||||||||||||||||
| Pro Forma Core Operating Expenses (Before Depreciation) | 75,067 | 72,855 | ||||||||||||||||||||||||||||||
| Depreciation and amortization | (11,937 | ) | (9,288 | ) | ||||||||||||||||||||||||||||
| Pro Forma Core Expenses | $ | 63,130 | $ | 63,567 | ||||||||||||||||||||||||||||
Reconciliation - GAAP Net Income to Pro Forma Core EBITDA (in thousands)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||
| GAAP net loss | $ | (3,390 | ) | $ | (2,118 | ) | $ | (11,793 | ) | $ | (7,863 | ) | ||||||||||||||||||||||
| Non-cash loss on software write-down | 1,248 | — | 1,248 | — | ||||||||||||||||||||||||||||||
| Deposit service fee & fraud reimbursement adj | — | (2,549 | ) | — | (6,317 | ) | ||||||||||||||||||||||||||||
| Merger expenses & DOE settlement | 287 | 1,100 | 739 | 2,100 | ||||||||||||||||||||||||||||||
| Interest and taxes | 251 | 409 | 1,418 | 562 | ||||||||||||||||||||||||||||||
| Depreciation and amortization | 2,927 | 3,195 | 11,937 | 9,288 | ||||||||||||||||||||||||||||||
| Pro Forma Core EBITDA | $ | 1,323 | $ | 37 | $ | 3,549 | $ | (2,230 | ) | |||||||||||||||||||||||||
Key Performance Metrics
| 1Q19 | 2Q19 | 3Q19 | 4Q19 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | 2019 | 2020 | YOY Change | |||||||||||||||||||||||||
| Debit card POS spend ($ Millions) | |||||||||||||||||||||||||||||||||||
| Debit card POS spend - higher education | 7 | % | |||||||||||||||||||||||||||||||||
| Debit card POS spend - new business | 5 | 14 | 39 | 50 | 61 | 88 | 108 | 115 | 107 | 372 | 265 | 247 | % | ||||||||||||||||||||||
| Debit card POS spend - Total | 691 | 525 | 597 | 557 | 675 | 693 | 741 | 682 | 2370 | 2791 | 422 | 18 | % | ||||||||||||||||||||||
| Serviced Deposits ($ Millions) | |||||||||||||||||||||||||||||||||||
| Ending serviced deposits - higher education | 27 | % | |||||||||||||||||||||||||||||||||
| Ending serviced deposits - new business | 11 | 47 | 68 | 82 | 107 | 163 | 299 | 555 | 81.84 | 555.30 | 473 | 579 | % | ||||||||||||||||||||||
| Ending serviced deposits - Total | 627 | 456 | 666 | 401 | 610 | 663 | 944 | 960 | 401 | 960 | 559 | 139 | % | ||||||||||||||||||||||
| Average serviced deposits - higher education | 626 | 461 | 471 | 467 | 528 | 552 | 541 | 511 | 506 | 533 | 27 | 5 | % | ||||||||||||||||||||||
| Average serviced deposits - new business | 9 | 28 | 58 | 75 | 94 | 138 | 217 | 418 | 43 | 217 | 174 | 407 | % | ||||||||||||||||||||||
| Average serviced deposits - Total | 635 | 489 | 529 | 543 | 622 | 690 | 758 | 928 | 549 | 750 | 202 | 37 | % | ||||||||||||||||||||||
| Higher Ed Metrics | |||||||||||||||||||||||||||||||||||
| Higher Ed Retention | 99.5 | % | 99.5 | % | 99.1 | % | 98.2 | % | 99.9 | % | 99.8 | % | 99.7 | % | 99.4 | % | 98.2 | % | 99.4 | % | 1.2 | % | |||||||||||||
| FAR1 disbursements amount ($ Billions) | 13 | % | |||||||||||||||||||||||||||||||||
| Organic Deposits2 - higher education | 33 | % | |||||||||||||||||||||||||||||||||
| 1 FAR disbursements are Financial Aid Refund disbursements from a higher education institution | |||||||||||||||||||||||||||||||||||
| 2 Organic Deposits are all higher ed deposits excluding any funds disbursed directly from the school | |||||||||||||||||||||||||||||||||||
_______________________________________
1 “New Business” refers to everything outside of the higher education business
2 Pro forma core metrics are non-GAAP measures which exclude the effects of items we do not consider indicative of our core operating performance and normalize the deposit servicing fee in past periods to be consistent with the current servicing agreement and management believes provide a clearer view of our business. A reconciliation is included on page 7 of this release
3 CAC is calculated based on TTM Total Marketing and Client Operations expense, net of subscription fees paid to BMTX for higher education clients, divided by TTM newly active accounts
4 “Active Accounts” are defined as any account in the higher education vertical with activity in the trailing 12 months
5 “Organic deposits” are defined as deposits in the higher education vertical that are not disbursed directly through the school
6 Pro forma core metrics are Non-GAAP measures which adjust revenues to reflect our current servicing agreement and exclude non-recurring items; a reconciliation appears on page 7 of this release
FAQ
What were BM Technologies' Q4 2020 revenues?
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