BM Technologies, Inc.

Good morning, everyone, and welcome to the BM Technologies second quarter 2024 earnings call. Please note that this event is being recorded. Following management's prepared remarks, we will hold a question and answer session. For those joining us on the webcast, you can submit your questions online where the management team can see them. At this time, I'd like to turn the conference call over to Brian Preneveau, Investor Relations for BM Technologies. Please go ahead.

Thank you, operator, and good morning, everyone. Thank you for joining the BM Technologies second quarter earnings call. Before we begin, we would like to remind you that some of the statements we make today may be considered forward-looking. These forward-looking statements are subject to a number of risks and uncertainties that may cause actual performance results to differ materially from what is currently anticipated. Please note that these forward-looking statements speak only as of the date of this presentation, and we undertake no obligation to update these forward-looking statements in light of new information or future events, except to the extent required by applicable securities laws. Please refer to our SEC filings, including our Form 10-K and 10-Qs, for a more detailed description of the risk factors that may affect our results. Copies may be obtained from the SEC or by visiting the Investor Relations section of our website. Also, during the course of today's call, the company will be discussing one or more non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in the press release we issued yesterday afternoon. At this time, I will now turn the call over to Lavleen Sidhu, VM Technologies CEO. Lavleen?

Thanks, Brian, and good morning, everyone. Joining me on today's call is AJ Asija, our CFO, and Jamie Donahue, our President and Chief Technology Officer. Today, we are looking forward to sharing with you our financial results for the second quarter and first half of 2024, and also to discuss our strong progress in our technology transformation and growth initiatives. Before getting started, I want to provide you with some brief financial highlights. Operating revenues for the three and six months ended June 30th, 2024 totaled $12.5 million and $28.7 million respectively, compared to $12.6 million and $26 million for the three and six months ended June 30th, 2023, up 10% in the first half of 2024. Our Q2 2024 interchange and card revenue increased 57% year over year, validating our strategy of switching to a Durban-exempt bank. Our core EBITDA for the second quarter was a loss of approximately $880,000, a slight improvement compared to a core EBITDA loss of $906,000 in the second quarter last year. As you may recall, there is a considerable amount of seasonality in our higher education business, with the second quarter generally being the weakest quarter of the year. We look forward to the upcoming fall peak when students return back to school. Shortly, AJ will provide further details on our financial performance, but before that, I would like to provide some additional commentary for the second quarter. We made strong progress towards our strategy of digital transformation and setting the stage for growth in our higher education business going forward. We completed our technology platform transformation, a cutting-edge microservice architecture platform that unlocks their ability to bring additional products and services to market at an industry-leading pace. This significant investment enables us to offer our student customer base targeted products and services in a compliant manner. Our technology rollout was quickly followed by the launch of our first major product for our student customers in July. This was the launch of our cashback awards engine, which was the most important feature that our customers have been asking for. Over the last 12 months, we have already seen great engagement with this new feature with over $20,000 in cash back value put back in the pockets of our customers. Not only are our students benefiting, but we are also seeing early engagement metrics improve. With customers taking advantage of this feature, swiping on average one more time a month than a typical active account customer. This feature is the first of many that are expected to increase transaction and deposit volume and thereby revenues. With the next-gen technology, we are very excited in terms of what we can offer our students over the following quarters, increasing the value proposition for the VIBE account as well as our revenue potential. Also, in the second quarter, we experienced a strong response to our new identity verification or IDV product, which we launched in the first quarter. As a reminder, our IDB product is an innovative software as a service product that assists universities in mitigating fraud vulnerabilities during the student enrollment process. IDB leverages robust AI and machine learning tools, empowering universities to maintain their risk-level preferences with data-driven insights and significantly enhances their fraud detection capabilities. We believe adding this product to our technology stack will attract more college and university partners, create a new source of revenue for us, and reduce fraud for our university partners and for the company as well. Year-to-date, we have signed on 15 universities for this product and have a strong pipeline and anticipate solid sales through the remainder of the year. As part of our improved technology stack and service offering, IDV increases stickiness and lifetime value of our existing higher education relationships and opens the door for new university relationships as well. We continue to view the higher education business as a market with ample opportunity to deepen customer relationships, increase customer lifetime value, and unlock new revenue streams. This remains a unique opportunity only available to BMTX due to our distinctive customer acquisition model. and longstanding contractual relationships with colleges and universities across the country. We are very pleased with the foundational steps our team has taken to transform the outlook of this business and position us for greater profitability in the future as our growth initiatives ramp up. I will now hand it over to Ajay to review our financial performance in the second quarter in more detail and to provide more context.