Usio Reiterates Fiscal 2023 Revenue Growth Guidance of 18-20%

Rhea-AI Summary

Usio, Inc. expects record revenues in fiscal 2023 with a projected 18-20% increase driven by a 21% jump in electronic payments processing volume in the fourth quarter. The company anticipates positive full-year Adjusted EBITDA, highlighting growth in prepaid, card, ACH, and Output Solutions businesses. Excluding crypto volumes, the total 2023 processing volume would have been up 21% compared to 2022.

Positive

• Projected record revenues for fiscal 2023 with an 18-20% increase.
• 21% rise in electronic payments processing volume in Q4 2023.
• Positive full-year Adjusted EBITDA expected.
• Growth in prepaid, card, ACH, and Output Solutions businesses.
• Excluding crypto volumes, total 2023 processing volume up 21% compared to 2022.

Negative

• None.

Insights

Financial Analyst

The reported 21% increase in electronic payments processing volume for Usio, Inc. in the fourth quarter, excluding cryptocurrency volumes, is indicative of robust operational performance. Particularly noteworthy is the 65% surge in prepaid card purchase volume and the 17% growth in PayFac volume, which are substantial contributors to the company's revenue stream. The positive full-year Adjusted EBITDA forecast suggests improved profitability and cost management. Investors should consider the potential for Usio's innovative payment solutions to capture greater market share, especially with the expansion into the Electronic Bill Presentment and Payment market.

From a financial perspective, the consistent record of growth and the achievement of new full-year records in processing volumes are likely to bolster investor confidence. However, it is important to consider the exit from the cryptocurrency processing that led to a 26% decrease in total dollars processed for the year. This strategic shift away from a volatile market could be seen as a move towards more stable revenue sources, but it may also raise questions about the company's adaptability to emerging payment trends.

Market Research Analyst

The transition by Usio's Output Solutions from paper to electronic document production reflects a broader industry trend towards digital transformation. The production of more electronic documents than paper ones for the first time is a significant milestone. It aligns with consumer preferences for digital solutions and could lead to higher margins and operational efficiencies. The investment in new technology to expand production capacity by 50% could position Usio favorably within the competitive Electronic Bill Presentment and Payment market. This expansion, along with the company's record new business pipeline, may signal future growth opportunities.

However, stakeholders should be aware of the risks associated with capacity expansion, such as the potential for increased operational costs and the need for a corresponding increase in demand to justify the investment. The market's reception of Usio's innovative solutions, such as 'PayFac-in-a-box', will be critical to the company's ability to maintain its growth trajectory and convert its business pipeline into tangible contracts.

Technology Industry Analyst

Usio's focus on technological innovation, as demonstrated by the introduction of 'PayFac-in-a-box' and remote authorization technology for prepaid cards, highlights the company's commitment to addressing the evolving needs of digital payment users. The adoption of digital payment methods is accelerating and Usio's ability to offer convenience and simplicity is likely to resonate with both consumers and organizations.

It is important to recognize the strategic significance of Usio's exit from cryptocurrency processing. While this move may have contributed to the decline in ACH volumes, it also suggests a pivot towards more regulated and potentially less volatile revenue streams. For industry observers, the key takeaway is Usio's agility in responding to market changes and its proactive approach to risk management, which could have long-term benefits for the company's stability and growth.

Electronic Payments Processing Volume Jumps 21% in Fourth Quarter Excluding Crypto Volumes

Expects to Report Record Fiscal 2023 Revenues and Positive Full Year Adjusted EBITDA

SAN ANTONIO--(BUSINESS WIRE)-- Usio, Inc. (Nasdaq: USIO), a cloud-based, integrated FinTech electronic payment solutions provider, today reiterated Guidance that full year 2023 revenues will increase 18 – 20% from full year 2022 based on strong fourth quarter transactions and processing volume, as reported below.

Louis Hoch, President and Chief Executive Officer of Usio, said, “We expect our strong fourth quarter electronic payments processing dollar volume and transaction growth to drive full-year revenues up 18 – 20% to a new record high, and to deliver positive Adjusted EBITDA for the year.”

Total Dollars processed in the fourth quarter of 2023 were up 21% compared to the same period last year, led by a 65% increase in purchase volume in Usio’s Prepaid business, where total dollars loaded on prepaid cards exceeded $100 million for the second consecutive quarter. Growth in Usio’s Card business was led by a 17% year-over-year increase in PayFac volume. Total Card reported a sequential acceleration in the rate of dollars processed growth, improving to 8% in the fourth quarter from 5% in the third quarter, delivering full-year record processing volume. Card growth primarily reflects the increasing strength of Usio’s PayFac business, which was up 17% year-over-year in the quarter. And, electronic check transaction volume and dollars processed in Usio’s ACH business were both up in the fourth quarter from a year ago, reversing recent declines precipitated by the withdrawal from processing for cryptocurrency companies.

The Company also noted that, excluding volume from the crypto industry, which the Company exited late in 2022, total full year 2023 processing volume would have been up 21% compared to full year 2022.

Mr. Hoch concluded, “Our innovative solutions, from the introduction of PayFac-in-a-box, one of the industry’s first PayFac solutions, to our Prepaid business’ remote authorization technology, continue to meet the needs of organizations pressed to provide convenience and simplicity to consumers adopting a growing variety of digital payment methods. While I am certainly pleased with the growth in 2023, I am more importantly looking forward to another great year based on our record new business pipeline, some of which has the potential to convert into contracts in the near term. I am also anticipating the significant capacity expansion undertaken in our Output Solutions business to support our push into the Electronic Bill Presentment and Payment market, building on Output Solution’s first-ever quarter in which it produced more electronic documents than paper ones. Fourth quarter volumes represent another accomplishment in our ongoing record of consistently growing the business and the achievement of a milestone key to building value for our shareholders.”

Fourth Quarter 2023 Processing Results

Card Processing, Including PayFac
		vQ4 22		vQ3 23
Credit Card Dollars Processed		+8%		-2%
Credit Card Transactions Processed		+0%		+4%

Year-over-year Credit Card Dollars Processed growth accelerated from 5% in the third quarter of 2023.

Prepaid
		vQ4 22		vQ3 23
Prepaid Card Load Volume		+129%		-2%
Prepaid Card Transaction Volume		+17%		-13%
Prepaid Card Purchase Volume		+65%		-2%

Total dollars loaded on prepaid cards exceeded $114 million in the fourth quarter, the second consecutive quarter of over $100 million in prepaid card loads.

ACH
		vQ4 22		vQ3 23
Electronic Check Transaction Volume		+2%		+7%
Returned Check Transactions Processed		+0%		+8%
Electronic Check Dollars Processed		+25%		+5%

Electronic check transaction volume and dollars processed in the fourth quarter were both up year-over-year after recording declines earlier in the year.

Output Solutions
		vQ4 22		vQ3 23
Transactions/pieces processed		-18%		+7%

Total pieces processed and mailed by Output Solutions in Q4 exceeded 6 million, and electronic documents delivered exceeded 11 million. After running at over 100% of capacity for much of 2023, Output Solutions recently invested in new technology to expand its production capacity by approximately 50%, which is expected to reignite year-over-year growth beginning early in 2024.

Full Year 2023 Processing Results

Card Processing, Including PayFac		v2022
Credit Card Dollars Processed		+6%
Credit Card Transactions Processed		+9%

Total dollars processed for Card was $1.4 billion for the year, a new full-year record.

Prepaid
		v2022
Prepaid Card Load Volume		+76%
Prepaid Card Transaction Volume		-10%
Prepaid Card Purchase Volume		+52%

Total dollars loaded on prepaid cards exceeded $371million in 2023, a new full-year record.

ACH
		v2022
Electronic Check Transaction Volume		-20%
Returned Check Transactions Processed		-15%
Electronic Check Dollars Processed		-35%

Output Solutions
		v2022
Transactions/pieces processed		+28%

Total pieces processed and mailed by Output Solutions in 2023 exceeded 25.6 million. Total electronic only documents, including statements, bills and other documents, processed and delivered exceeded 37.3 million. It is the first time that Output Solutions produced more electronic documents than paper ones. This led to increased gross margins for 2023 for Output Solutions.

For full year 2023, total dollars processed were $5.3 billion, down 26%, while total transactions processed were 37.2 million, down 9%, both due to a decrease in ACH arising from our exit from the crypto industry.

About Usio, Inc.

Usio, Inc. (Nasdaq: USIO), a leading, cloud-based, integrated FinTech electronic payment solutions provider, offers a wide range of payment solutions to merchants, billers, banks, service bureaus, crypto exchanges, and card issuers. The Company operates credit, debit/prepaid, and ACH payment processing platforms to deliver convenient, world-class payment solutions and services to their clients. The company, through its Usio Output Solutions division offers services relating to electronic bill presentment, document composition, document decomposition and printing and mailing services. The strength of the Company lies in its ability to provide tailored solutions for card issuance, payment acceptance, and bill payments as well as its unique technology in the prepaid sector. Usio is headquartered in San Antonio, Texas, and has offices in Austin, Texas. Websites: www.usio.com, www.payfacinabox.com, www.akimbocard.com and www.usiooutput.com. Find us on Facebook^® and Twitter.

FORWARD-LOOKING STATEMENTS DISCLAIMER

Except for the historical information contained herein, the matters discussed in this release include forward-looking statements which are covered by safe harbors. Those statements include, but may not be limited to, all statements regarding management's intent, belief and expectations, such as statements concerning our future and our operating and growth strategy. These forward-looking statements are identified by the use of words such as "believe," "intend," "look forward," "anticipate," "schedule,” and "expect" among others. Forward-looking statements in this press release are subject to certain risks and uncertainties inherent in the Company's business that could cause actual results to vary, including such risks related to an economic downturn as a result of the COVID-19 pandemic, the realization of opportunities from the IMS acquisition, the management of the Company's growth, the loss of key resellers, the relationships with the Automated Clearinghouse network, bank sponsors, third-party card processing providers and merchants, the security of our software, hardware and information, the volatility of the stock price, the need to obtain additional financing, risks associated with new tax legislation, and compliance with complex federal, state and local laws and regulations, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission including its annual report on Form 10-K for the fiscal year ended December 31, 2022. One or more of these factors have affected, and in the future, could affect the Company’s businesses and financial results in the future and could cause actual results to differ materially from plans and projections. The Company believes that the assumptions underlying the forward-looking statements included in this release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the objectives and plans will be achieved. All forward-looking statements made in this release are based on information presently available to management. The Company assumes no obligation to update any forward-looking statements, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240312470953/en/

Paul Manley

Senior Vice President, Investor Relations

paul.manley@usio.com

612-834-1804

Source: Usio, Inc.

FAQ

How much is Usio, Inc. expecting their full year 2023 revenues to increase by?

Usio, Inc. expects their full year 2023 revenues to increase by 18-20% compared to full year 2022.

What was the percentage increase in total dollars processed in the fourth quarter of 2023 compared to the same period last year?

Total dollars processed in the fourth quarter of 2023 were up 21% compared to the same period last year.

Which business segment led the growth in the fourth quarter for Usio?

The Prepaid business segment led the growth in the fourth quarter with a 65% increase in purchase volume.

What was the year-over-year increase in PayFac volume for Usio's Card business?

The year-over-year increase in PayFac volume for Usio's Card business was 17%.

How did the electronic check transaction volume and dollars processed perform in the fourth quarter for Usio's ACH business?

Both the electronic check transaction volume and dollars processed in Usio's ACH business were up in the fourth quarter from a year ago.