BM Technologies, Inc.

Operating revenue was 12.5 million in Q2 2024, versus 12.6 million in Q2 2023, and 28.7 million for the first six months of 2024 versus 26.0 million a year ago. Interchange and card revenue was 2.3 million, up from 1.5 million, or 57% year over year. Servicing fee revenue was 6.9 million versus 7.7 million, and account fees/university fees were 3.3 million, essentially in line with 2.3 million last year as stated on the call. Core EBITDA was a loss of about 881,000 versus a loss of 906,000 last year, and core net loss before interest, taxes, depreciation and amortization was negative 2.6 million versus negative 4.1 million. Average service deposits were 685 million, down from 828 million in Q1 2024 and 922 million in Q2 2023, while average deposits in Higher Education were 425 million, roughly flat year over year. Management said Q2 included 1.6 million of one-time next-gen platform implementation costs, expects no repeat in Q3 or Q4, and still anticipates positive core EBITDA for full-year 2024. The BaaS relationship expires in February 2025; management said a wind down would lift pro forma core EBITDA by at least 1 million per quarter on a run-rate basis.

Luvleen Sidhu emphasized that the quarter was mainly about laying the foundation for future growth through technology and product expansion. She said the company completed its platform transformation, launched the rewards feature in July, and is using the new stack to deepen the student and university relationship with more products over time. Her tone was constructive and optimistic, but she also repeated that the BaaS business is unprofitable in the current regulatory and rate environment and that the company is evaluating strategic options to enhance shareholder value.

Ajay Asija focused on the income statement and balance sheet mechanics behind the quarter. He pointed to 12.5 million of Q2 operating revenue, 1.6 million of one-time implementation costs, core operating expenses of 13.4 million, total expenses of 17.2 million, and a solid liquidity position with 12.5 million of cash, 0.4 million of working capital, and no debt. He also highlighted the BaaS vertical decline in deposits, the stability of Higher Education deposits, and said the company expects positive core EBITDA for full-year 2024.

Analysts mainly pressed on the BaaS wind-down process, including whether there is a required advance notice period; management would only say there are contractual parameters and declined to be more specific. Questions also focused on the new finance, insurance, and wellness product, the economics of the ID verification offering, and whether the AI work will generate revenue. Management said the wellness product will be detailed in a future press release, IDV is intended to open doors with non-disbursement universities as well as deepen existing relationships, and the AI tools are being developed primarily to improve service and reduce operating expense rather than to monetize immediately.