10-Q: Athena Bitcoin Global Reports Q2 2025 Revenue & Profit Decline

Athena Bitcoin Global reported a significant decline in revenue and net income for the second quarter and first half of 2025, alongside increased operating expenses and ongoing legal challenges.

Summary

• Revenues decreased by 11% to $62.8 million for the three months ended June 30, 2025, compared to $70.9 million in the prior year period.
• Gross profit fell by 24% to $7.8 million for the three months ended June 30, 2025, down from $10.2 million in the same period last year.
• Net income decreased by 65% to $1.4 million for the three months ended June 30, 2025, compared to $3.9 million in the prior year period.
• For the six months ended June 30, 2025, revenues decreased by 11% to $135.4 million, and net income dropped by 60% to $4.0 million.
• Operating expenses increased significantly, with general and administrative expenses up 50% for the quarter and 38% for the six months, and other operating expenses (including cash losses in transit) up 463% for the quarter and 95% for the six months.
• The number of Athena Bitcoin ATMs increased by 4% to 3,220 as of June 30, 2025, from 3,111 at December 31, 2024.
• Bitcoin ATM transactions increased by 52% to 120,639 for the six months ended June 30, 2025, but the median transaction size decreased by 45% to $120.
• The average markup on Bitcoin sales decreased from 25% to 21% for the six months ended June 30, 2025.
• Adjusted EBITDA decreased by 39% to $11.7 million for the six months ended June 30, 2025, from $19.2 million in the prior year period.
• Working capital deficit improved to $533,000 as of June 30, 2025, from $2.5 million at December 31, 2024.
• The company adopted ASU 2023-08, requiring crypto assets to be measured at fair value, effective January 1, 2025, with no material impact due to short holding periods.

Sentiment

Score: 3

Explanation: The company's financial performance shows significant declines in revenue, gross profit, and net income, coupled with rising operating expenses. While there's an improvement in working capital deficit and ATM network expansion, the decrease in median transaction size and average markup, along with ongoing material weaknesses in internal controls and numerous class-action lawsuits, indicate substantial operational and legal challenges. The volatile crypto market and evolving regulatory landscape add considerable uncertainty, leading to a generally negative outlook.

Positives

• Working capital deficit improved significantly to $533,000 as of June 30, 2025, from $2.5 million at December 31, 2024.
• The number of Athena Bitcoin ATMs increased by 4% to 3,220 as of June 30, 2025, indicating network expansion.
• Bitcoin ATM transaction volume increased by 52% for the six months ended June 30, 2025, showing higher user engagement despite smaller transaction sizes.
• Interest expense decreased by 64% for the six months ended June 30, 2025, primarily due to the repayment of a Senior Secured Loan Agreement with KGPLA Holdings LLC.
• The company is self-funded and generates sufficient cash from operations to fund its global activities.

Negatives

• Revenues decreased by 11% for both the three and six months ended June 30, 2025, attributed to market uncertainty and lower sales prices per transaction.
• Gross profit declined by 24% for the quarter and 32% for the six-month period, reflecting reduced revenue and decreased Bitcoin acquisition volume.
• Net income decreased substantially by 65% for the quarter and 60% for the six-month period.
• Operating expenses increased significantly, with general and administrative expenses up 50% for the quarter and 38% for the six months, driven by additional personnel, legal fees, insurance, and accounting/consulting services.
• Other operating expenses, including cash losses for cash in transit, surged by 463% for the quarter and 95% for the six months.
• Income from operations decreased by 66% for the quarter and 60% for the six-month period.
• Median ATM transaction size for Bitcoin decreased by 45% for the six months ended June 30, 2025, indicating smaller individual transactions.
• The average markup on Bitcoin sales decreased from 25% to 21% for the six months ended June 30, 2025, impacting profitability.
• Adjusted EBITDA decreased by 39% for the six months ended June 30, 2025.
• Material weaknesses in internal control over financial reporting were identified as of December 31, 2024, and remain un-remediated as of June 30, 2025.

Risks

• Revenue is substantially dependent on the volume of crypto asset transactions and highly volatile crypto asset prices; declines in either would adversely affect the business.
• Operating in a new and rapidly evolving consumer crypto asset segment makes accurate forecasting of user demand, transaction volumes, and financial performance difficult.
• Significant indebtedness, secured by substantially all assets, contains restrictive covenants that may limit operational flexibility and ability to service debt.
• Assets, including cash and crypto assets, are subject to theft, loss, or impairment, with limited insurance protection for crypto assets held by the company.
• Significant disruptions in ATMs, software, IT systems, or underlying blockchain networks could result in loss of users or funds, damaging brand and reputation.
• International operations, particularly in El Salvador, expose the company to risks like difficulties in enforcing contractual rights, economic/political instability, and restrictions on profit repatriation.
• Success depends on retaining and attracting users and maintaining or increasing their engagement; failure to do so could significantly harm the business.
• Adverse global or regional economic conditions and loss of market confidence in crypto-related products due to unfamiliarity or negative publicity could negatively affect demand.
• Uncertainty regarding El Salvador operations, including the impact of changes to Bitcoin Law (Bitcoin no longer legal tender, usage voluntary) and the government stepping back from Chivo Wallet.
• Inability to protect intellectual property rights could adversely impact the business, and potential infringement claims from third parties are a risk.
• Theft, loss, or destruction of private keys required to access Bitcoin can be irreversible, despite using a third-party custodian (BitGo Trust Company, Inc.).
• The future development and growth of crypto assets and protocols are unpredictable; if they do not develop as expected, the business could be adversely affected.
• Temporary or permanent blockchain forks could create instability and adversely affect the business.
• High transaction fees demanded by miners or validators on crypto asset networks could increase operational costs.
• The extensive, complex, and rapidly evolving regulatory environment for crypto assets could change unpredictably, negatively affecting the business.
• Failure to obtain or maintain necessary money transmission, virtual currency business activity, or other required licenses could severely impact or halt operations.
• It may become illegal to acquire, own, hold, sell, or use Bitcoin or other crypto assets in certain countries, or governments may intervene with new legislation.
• Increasing compliance burdens and potential enforcement actions by U.S. and non-U.S. regulators could result in significant costs, penalties, and reputational damage.
• Business or assets may become subject to federal or state asset forfeiture laws, and historical actions by regulators/payment processors have limited banking access for crypto businesses.
• Dependence on senior management and key personnel; loss of their services or inability to attract/retain qualified personnel could adversely impact the business.
• Misconduct or errors by employees or service providers could lead to legal liability, financial losses, and regulatory sanctions.
• Potential conflicts of interest among officers, directors, employees, and large shareholders due to their interests in other crypto assets or projects.
• Founders, a single major shareholder, and directors control a significant portion of common stock, influencing shareholder approval matters and potentially adverse to other shareholders.
• Issuance of common stock upon conversion of convertible debentures will cause substantial dilution to existing shareholders.
• The market price of common stock has been and may continue to be highly volatile.
• Common stock is a 'penny stock,' which may make it less desirable or accessible to investors.
• Certain previously registered shares are required to be sold at fixed prices ($0.05 and $0.0493), which may cap the market price and create downward pressure.
• Resale of restricted securities without registration or exemption could negatively affect the company and its stock.
• Increased costs and management time due to operating as a public company.
• As an emerging growth company, the company is not subject to certain corporate governance measures, potentially limiting shareholder protection.
• The board of directors can authorize preferred stock issuance, which could diminish common stock rights and make a change of control more difficult.
• Common stock may not be approved for listing on Nasdaq or quoted on OTCQB/OTCQX markets.
• No dividends have been paid or are expected in the foreseeable future.
• Global economic conditions, including inflation, slower growth, or recession, could materially adversely affect the business.
• Climate change or legal/regulatory/market responses to it could increase costs or disrupt operations.

Future Outlook

The company expects technology and development expenses, general and administrative expenses, and sales and marketing expenses to increase over the next several years to support expanding activities, commercialization of new products, and increased costs of operating as a public company. The company believes its existing cash and cash equivalents and debt financing are sufficient to meet working capital needs and capital expenditures, but operating plans may change, requiring additional funds. The company anticipates that the recent changes to El Salvador's Bitcoin Law, making Bitcoin usage voluntary and the government stepping back from Chivo Wallet, will not negatively impact its operations, as demand is expected to continue from organic consumer choice, potentially opening opportunities for private companies.

Management Comments

• The decreases in revenues are attributable to market uncertainty which resulted in decreases in the sales prices per transaction.
• We believe that the uncertainty in the market was triggered by geopolitical and economic changes triggered by new tariffs, fears of inflation and employment instability in the U.S.
• The increases in technology and development expenses are attributable to the expansion of the company's technology teams and additional infrastructure to support our expanding activities and the commercialization of other products and services.
• The increases in general and administrative expenses resulted from an increase in salaries attributable to additional personnel and the hiring of additional management, legal fees relating to corporate matters, litigation and SEC filings, insurance, and fees for accounting and consulting services.
• The decreases in interest expense are attributable to the repayment, during the six months ended June 30, 2024, of a Senior Secured Loan Agreement with KGPLA Holdings LLC.
• The company is self-funded and generates sufficient cash to fund its global operations through its operations.
• The company's Board of Directors will attempt to use non-cash consideration to satisfy obligations wherever possible, often consisting of restricted shares of common stock, preferred stock, or warrants.
• The company may attempt to raise capital by selling shares of common stock, possibly at a discount to market in the future.
• The company has assessed the legislative changes and the Chivo transition in El Salvador, and does not foresee a negative impact on its business, in part because existing ATM operations and customer base are expected to continue without disruption.

Industry Context

The company operates in the nascent and rapidly evolving consumer crypto asset product segment, specifically focusing on Bitcoin ATMs and OTC services. The industry is characterized by high price volatility of crypto assets, significant regulatory uncertainty, and increasing scrutiny from governmental bodies regarding money transmission, consumer protection, and potential illicit activities. Recent bankruptcies of major crypto market participants have impacted broader market confidence and transaction volumes. The company's strategy to expand its ATM network and affiliate program aims to capture market share in this growing but unpredictable sector, while navigating a complex global regulatory landscape and competition from other crypto platforms and traditional financial services.

Comparison to Industry Standards

• The company's average Bitcoin markup of 21% for the six months ended June 30, 2025, is within the typical range for Bitcoin ATM operators, which often charge markups between 13% and 22% to cover operational costs, compliance, and volatility risks.
• The increase in ATM transaction volume (52%) while median transaction size decreased (45%) suggests a shift towards more frequent, smaller transactions, which could indicate broader adoption by retail users for everyday use or a response to market volatility by limiting exposure per transaction.
• The significant decline in net income and Adjusted EBITDA, coupled with rising operating expenses, indicates a challenging period compared to industry peers who might be experiencing more stable or growing profitability, especially given the overall increase in crypto asset prices during parts of the period.
• The identification of material weaknesses in internal control over financial reporting is a significant concern, as leading financial institutions and public companies in the industry are expected to maintain robust internal controls to ensure financial reporting integrity and mitigate fraud risks.
• The numerous class-action lawsuits related to alleged elder financial scams and product liability highlight a specific vulnerability that may differentiate the company from competitors with stronger consumer protection measures or different business models, potentially impacting its reputation and legal costs more severely.

Corporate Governance

Legal Proceedings

• Arley Lozano-Jaramillo (Lozano) lawsuit: Filed October 9, 2023, alleging breach of contract, promissory estoppel, unjust enrichment, fraud in the inducement, and conversion, seeking $1.4 million and 270 million shares of common stock (valued at $13.5 million as of June 30, 2025). The company disputes allegations and filed a counter-complaint.
• Keon Jackson (Jackson) class action: Commenced August 20, 2024, alleging receipt of unwanted telemarketing text messages in contravention to federal and state statutes.
• S.M. class action: Filed September 9, 2024, alleging negligence and violations of the Ohio Products Liability Act due to alleged elder financial scams involving cryptocurrency kiosks, seeking undetermined compensation (up to $5 million) and injunctive relief.
• Girma Yilma class action: Filed January 21, 2025, alleging negligence and violations of various Colorado statutes (consumer protection act, civil theft, unjust enrichment, negligent design) due to alleged elder financial scams involving Bitcoin ATM kiosks, seeking undetermined compensation (up to $5 million) and injunctive relief.
• Zamareeh Odoms claim: An extrajudicial claim for $500,000 sent January 31, 2025, alleging lack of proper due diligence in recruiting/supervising an employee causing damages. The company assesses no liability.
• Diane Reynolds class action: Filed February 6, 2025, alleging violations of Maryland's Safe Act, negligence, product liability (defective design), and the State's Consumer Protection Act due to alleged elder financial scams involving Bitcoin ATM kiosks, seeking undetermined compensation (up to $5 million) and injunctive relief.
• State of Iowa investigation: On February 26, 2025, Iowa filed complaints against competitors for Consumer Fraud Act violations and advised that an investigation into crypto ATM companies is ongoing. The company has received multiple requests for information.
• Rachael Gnadinger, Madeline McCausland, and Joanne Nebus-Horning (Gnadinger) class action: Filed May 30, 2025, alleging negligence and violations of various New Jersey statutes (possession of stolen property, RICO, consumer fraud) due to alleged elder financial scams involving Bitcoin ATM kiosks, seeking undetermined compensation (up to $5 million) and injunctive relief. The company anticipates seeking removal to US District Court.

Related Party Transactions

• A payable balance of $407,000 to Red Leaf Opportunities Fund LP (an entity in which Eric Gravengaard, a principal shareholder and former director/CEO, has a controlling interest) as of June 30, 2025 and December 31, 2024.
• Cash logistics services incurred with Move On Security LLC (Matias Goldenhrn, CEO and director, has a 50% interest) totaling $1.9 million for the three months and $3.6 million for the six months ended June 30, 2025. Amounts due to Move On Security, LLC were $317,000 as of June 30, 2025.
• ATM services incurred with Move On Tech Service, LLC totaling $398,000 for the three months and $1.2 million for the six months ended June 30, 2025. Amounts due to Move On Tech Service, LLC were $534,000 as of June 30, 2025.
• A convertible debenture agreement with KGPLA (an entity in which Mike Komaransky, a former director and principal shareholder, has a controlling interest) with an outstanding principal of $3.0 million as of June 30, 2025.

Stakeholder Impact

• Shareholders: Face significant dilution risk from potential future equity raises and conversion of existing convertible debt. The concentration of ownership by founders and a major shareholder limits influence for minority shareholders. The stock's 'penny stock' status and fixed-price resale restrictions may limit liquidity and price appreciation. Negative financial performance and ongoing legal issues could depress share price.
• Customers: May experience reduced confidence due to negative publicity from class-action lawsuits alleging elder scams and product liability issues. Changes in El Salvador's Bitcoin Law make usage voluntary, potentially impacting demand for services.
• Employees: Increased general and administrative expenses include higher salaries due to additional personnel and management hires. The company's future success depends on attracting and retaining highly qualified personnel in a limited talent pool.
• Creditors: The company has a significant level of indebtedness ($20.3 million excluding leases), secured by substantially all assets, which could impact its ability to obtain additional financing. Debt agreements contain restrictive covenants.
• Regulatory Authorities: The company is subject to extensive and evolving regulatory scrutiny, including money transmission, anti-money laundering, and potential characterization of crypto assets as securities. Ongoing investigations and compliance burdens could lead to fines, penalties, and operational restrictions.

Next Steps

• Onboard additional ATM operators in key markets throughout 2025 to increase transaction volume and expand brand presence through the Athena Bitcoin Affiliates Program.
• Evaluate the progress of the Affiliates Program by metrics such as the number of affiliate ATMs deployed and incremental revenue generated.
• Continue to make investments in the business to respond to opportunities and challenges, including developing new products and services and enhancing operating infrastructure.
• Expand non-U.S. operations and acquire complementary businesses and technologies.
• Remediate identified material weaknesses in internal control over financial reporting by hiring additional qualified accounting and financial reporting personnel, enhancing accounting processes and risk assessment, and designing/implementing/monitoring respective controls.
• Monitor developments related to new regulations, such as California's Digital Financial Assets Law (DFAL), and adapt business practices as needed to comply with licensing requirements by July 1, 2025.
• Continue to vigorously defend against ongoing legal proceedings, including multiple class-action lawsuits related to alleged elder financial scams and product liability.
• Anticipate seeking removal of the Gnadinger class action case to US District Court for the District of New Jersey.
• Continue to monitor the impact of legislative changes in El Salvador's Bitcoin Law and potential opportunities arising from the government's reduced role in Chivo Wallet.

Key Dates

Recommendation

The company's financial performance shows a significant deterioration, with double-digit declines in revenue, gross profit, and net income, coupled with rising operating expenses. This indicates a challenging operational environment and reduced profitability. The presence of material weaknesses in internal controls raises concerns about financial reporting reliability. Furthermore, the company is embroiled in multiple class-action lawsuits related to alleged elder scams and product liability, which pose substantial legal, financial, and reputational risks. While the company is expanding its ATM network, the decrease in median transaction size and average markup suggests a struggle to maintain profitability per transaction. The stock's 'penny stock' status, fixed-price resale restrictions, and the potential for significant future dilution from convertible debt and equity raises further diminish its investment appeal. Given these compounding negative factors and the inherent volatility and regulatory uncertainty of the crypto market, a seasoned investor would likely view this as a high-risk investment with significant downside potential.

Keywords

Bitcoin ATM, Cryptocurrency, SEC 10-Q, Financial Report, Digital Assets, Blockchain, FinTech, El Salvador, Crypto Regulation, Financial Performance, Risk Factors, Public Company