Bitcoin Depot Inc.

Bitcoin Depot Inc. (the "Company" or "Bitcoin Depot") operates in the digital financial system, primarily focusing on providing access to Bitcoin for cash users through its network of Bitcoin ATMs ("BTMs" or "kiosks") and its BDCheckout product. The Company's mission is to "Bring Crypto to the Masses TM" by enabling individuals, particularly those who primarily use cash, to access the digital financial system ¹. As of December 31, 2025, Bitcoin Depot operated approximately 9,700 BTMs across the U.S., Canada, Australia, and Hong Kong, and its BDCheckout product was accepted at approximately 16,300 retail locations ². The Company also offers a full-service mobile app that includes a buy online feature connecting consumers to a third-party service, Simplex powered by Nuvei, for Bitcoin purchases without using a kiosk or BDCheckout ³.

Bitcoin Depot maintains a leading position among cash-to-Bitcoin BTM operators in the U.S., holding an approximate 23% market share, and a strong position in Canada ⁴. The Company's competitive strengths include its large BTM network, superior user and retailer experience, robust compliance procedures, prudent Bitcoin management, and a management team with deep industry experience ⁵. The Company's compliance team consists of 20 individuals with over 100 years of combined experience in Anti-Money Laundering ("AML"), Bank Secrecy Act ("BSA"), Office of Foreign Assets Control ("OFAC"), and Consumer Protection compliance ⁶. Bitcoin Depot differentiates itself by maintaining a relatively low balance of Bitcoin (typically less than $1.0 million) in its hot wallets to fulfill orders while automatically replenishing from liquidity providers, thereby reducing exposure to price volatility ⁷.

The core business model revolves around facilitating cash-to-Bitcoin transactions. Revenue is generated primarily from the sale of cryptocurrency, which includes a markup on the exchange value and a separate flat transaction fee ⁸. For the year ended December 31, 2025, approximately 99.9% of the Company's revenue was derived from the sale of cryptocurrency ⁹. The markup percentage for BTM kiosk transactions ranged between 15% and 50%, while BDCheckout transactions had a consistent 15% markup ¹⁰. A flat fee of $3.00 is charged for BTM kiosk transactions, and $3.50 for BDCheckout transactions ¹¹. The Company also earns a 12% commission for website transactions ¹². No single customer accounts for 10% or more of the Company's revenue ¹³.

The Company's primary product is its BTM network, which allows users to convert cash into Bitcoin. As of December 31, 2025, Bitcoin Depot operated approximately 9,700 owned and leased kiosks across 48 U.S. states, 10 Canadian provinces, 6 Australian states, and Hong Kong ¹⁴. The BDCheckout product offers similar functionality, allowing users to load cash at retail checkout counters and then purchase Bitcoin via the Bitcoin Depot mobile app ¹⁵. BDCheckout transactions have lower associated costs for Bitcoin Depot compared to BTM transactions, primarily due to reduced operating expenses like cash collection fees and short-term lease payments ¹⁶. However, the profitability of both services is similar due to a higher markup applied to BTM transactions to offset their higher costs ¹⁷. The Company also operates BitAccess, a BTM device and transaction processing system that provides software and operational capabilities to third-party BTM operators, generating software revenue ¹⁸.

For the year ended December 31, 2025, Bitcoin Depot reported total revenue of $614.851 million ¹⁹, an increase of 7.2% from $573.703 million in 2024 ²⁰. Cost of revenue (excluding depreciation and amortization) increased by 4.0% to $501.555 million in 2025 from $482.263 million in 2024 ²¹. Gross profit for 2025 was $105.646 million, up from $81.456 million in 2024 ²², resulting in a gross profit margin of 17.2% in 2025 compared to 14.2% in 2024 ²³. Operating expenses totaled $72.083 million in 2025, up from $67.230 million in 2024 ²⁴. Income from operations increased by 70.2% to $41.213 million in 2025 from $24.210 million in 2024 ²⁵. Net income for 2025 was $4.709 million, a decrease from $7.814 million in 2024 ²⁶. Diluted EPS was $(0.86) in 2025, compared to $(4.21) in 2024 ²⁷. Cash and cash equivalents stood at $65.632 million as of December 31, 2025, up from $29.472 million in 2024 ²⁸. Total current assets were $80.329 million in 2025, compared to $34.333 million in 2024 ²⁹. Total current liabilities were $63.668 million in 2025, versus $40.629 million in 2024 ³⁰. Notes payable (current and non-current) totaled $60.492 million in 2025, compared to $55.479 million in 2024 ³¹. The Company had positive cash flow from operations of $34.0 million in 2025, up from $22.5 million in 2024 ³².

Year-over-year, revenue grew by 7.2% ³³. Cryptocurrency expenses, a component of cost of revenue, increased by 3.8% to $440.205 million in 2025 from $424.135 million in 2024 ³⁴. Floorspace lease expenses increased by 3.1% to $38.688 million in 2025 from $37.522 million in 2024 ³⁵. Kiosk operations expenses rose by 10% to $22.662 million in 2025 from $20.606 million in 2024 ³⁶. Selling, general and administrative expenses increased by 12.7% to $64.413 million in 2025 from $57.158 million in 2024, primarily due to higher legal services expenses ³⁷. Depreciation and amortization expenses decreased by 23.8% to $7.670 million in 2025 from $10.072 million in 2024, mainly due to an increase in the estimated useful life of BTM kiosks in July 2024 ³⁸. Other expenses increased by $20.3 million in 2025, primarily driven by an $18.5 million arbitration judgment liability ³⁹.

Significant operational developments during the period include the acquisition of the assets of Pelicoin and National Bitcoin ATM in the latter half of 2025, integrating over 500 kiosks across 27 states ⁴⁰. The Company also launched operations in Hong Kong, marking its entry into the Asian market ⁴¹. In January 2026, the Company acquired Instant Coin Bank, further consolidating its presence in Texas and Oklahoma ⁴². On February 27, 2026, Bitcoin Depot acquired Kutt, Inc., a peer-to-peer social betting platform, diversifying its product offerings beyond its core Bitcoin ATM business ⁴³. The Company also implemented a new compliance enhancement in February 2026, requiring customers to provide identification for every transaction at its kiosks ⁴⁴. As of December 31, 2025, Circle K provided notice that it will not renew its contract with the Company, which represented approximately 18% of total revenues in 2025 ⁴⁵. The Company intends to relocate these kiosks ⁴⁶.

The Company expects revenue for its core business in 2026 to be down in the range of 30% to 40% ⁴⁷. This anticipated decline is attributed to increasingly stringent Know Your Customer (KYC) and other compliance measures adopted to mitigate consumer fraud transactions, such as the new requirement for per-transaction identification at kiosks implemented in February 2026 ⁴⁸. These fraud mitigation efforts, while effective in protecting customers, are expected to result in materially lower revenue levels than in prior years ⁴⁹.

Bitcoin Depot intends to continue its growth strategy through geographical and retailer expansion, leveraging its scale and profitability to reinvest in the business, pursuing strategic acquisitions and partnerships, and growing the volume of retail transactions through BDCheckout ⁵⁰. The Company plans to expand into more physical locations with existing partners and build new partner relationships for greenfield market penetration ⁵¹. A key growth area is the state of New York, where the Company has applied for a license to operate, estimating the market could support thousands of kiosks based on comparable states like Florida ⁵². The Company also sees attractive international expansion opportunities, particularly as approximately 90% of BTMs worldwide are in North America, and various countries are beginning to accept cryptocurrency as a legal form of payment ⁵³.

The Company plans to reinvest the majority of its profits back into the business to develop new products and services, enhance brand recognition and loyalty, and grow its user base ⁵⁴. This includes pursuing inorganic growth through strategic bolt-on acquisitions to strengthen its market position and supplement in-house capabilities in hardware kiosks, software, and any product or service providing Bitcoin access in a retail setting ⁵⁵. The Company also seeks acquisitions to diversify into near-neighbor and complementary lines of business, leveraging its compliance structure ⁵⁶.

The BDCheckout product, launched in June 2022 and available at approximately 16,000 retail locations as of December 31, 2025, is a significant growth vector ⁵⁷. The Company intends to fully capitalize on BDCheckout by actively targeting users through online advertising and its free mobile app ⁵⁸. The expansion of BDCheckout to new locations across the U.S. and Canada is expected to diversify revenue streams and grow transaction volumes, revenue, and profitability ⁵⁹.

Operationally, the Company anticipates sustained pressure on its financial performance due to increased compliance costs, transaction limitations, and enhanced verification requirements resulting from regulatory efforts focused on consumer fraud ⁶⁰. The Company's compliance personnel costs are approximately $2.0 million annually, and substantially all operating costs related to regulation and compliance are correlated with transaction volumes, driven by payroll for a growing number of personnel ⁶¹. The Company continuously evaluates and implements process improvements to expedite the delivery of new products and services and reduce related costs ⁶².

Planned capital allocation includes ongoing investments in research and development to develop new software solutions and services and enhance existing ones for regulatory compliance ⁶³. The Company's existing cash and cash equivalents, together with cash provided by operations, are believed to be sufficient to meet needs for at least the next 12 months ⁶⁴. However, future capital requirements will depend on revenue growth, R&D spending, capital expenditures for kiosks, and expansion of products and services ⁶⁵. The Company may seek additional equity or debt financing for these reasons ⁶⁶.

The Company faces structural headwinds and execution risks, particularly from the increasing prevalence of consumer fraud transactions and the resulting regulatory scrutiny ⁶⁷. Regulatory efforts have imposed, and are expected to continue to impose, significant restrictions on the business, materially impacting revenues, profitability, and business prospects ⁶⁸. Geographic and regulatory factors, such as new state and local legislation imposing transaction limits, fee caps, and enhanced verification requirements, are identified as constraints ⁶⁹. For example, Arizona's new law, effective September 25, 2025, requires a 10-day "new customer" introductory period and daily transaction limits of $2,000 for new customers and $10,500 for existing customers ⁷⁰. California's Digital Financial Assets Law, effective January 1, 2025, limits charges to the greater of $5 or 15% of the transaction value and imposes a $1,000 daily transaction limit ⁷¹. Federal legislation, such as the proposed Crypto ATM Fraud Prevention Act, could impose new transaction limits ($2,000 per day for new customers, $10,000 total in 14 days; $5,000 daily for existing customers), fee caps, and refund requirements ⁷².

The Company faces material risks including its substantial revenue dependence on the volatile price and volume of Bitcoin transactions, with declines in either adversely affecting the business ⁷³. The effectiveness of risk management efforts may be compromised by sophisticated fraud techniques and the rapid evolution of AI technologies, exposing the Company to losses and liability ⁷⁴. The handling of sensitive user data poses reputational and financial risks from improper use, disclosure, or access, especially with increasing cyberattack sophistication and state-sponsored threats ⁷⁵. Intense competition from traditional financial institutions, fintech companies, and other cryptocurrency businesses, many with greater resources, could adversely affect the Company's ability to compete effectively ⁷⁶. Regulatory and governmental scrutiny, including new and evolving laws, rules, and regulations across U.S. federal, state, local, and international jurisdictions, could lead to significant fines, license revocations, operational restrictions, and increased compliance costs ⁷⁷. Specifically, the proposed Crypto ATM Fraud Prevention Act could impose new customer transaction limits ($2,000 per day for new customers, $10,000 total in 14 days; $5,000 daily for existing customers), fee caps, and refund requirements ⁷⁸. The theft, loss, or destruction of private keys for Bitcoin access could be irreversible, causing significant losses and reputational harm ⁷⁹. Major bank failures or sustained financial market illiquidity could impair access to funds, with approximately $34.1 million of the Company's $63.8 million in cash, cash equivalents, and interest-bearing deposits as of December 31, 2025, not subject to insurance protection or in excess of limits ⁸⁰.

Management's overall tone emphasizes a commitment to long-term growth and user trust, even if it does not maximize short-term financial results. They highlight the importance of delivering high-quality, compliant, easy-to-use, and secure Bitcoin-related services ⁸¹. A key forward-looking statement is the expectation that revenue for the core business in 2026 will be down in the range of 30% to 40% ⁸², primarily due to increasingly stringent compliance measures adopted to mitigate consumer fraud. Management has chosen to emphasize several strategic priorities for the period ahead: continued geographical and retailer expansion, including pursuing a license to operate in New York and exploring international opportunities ⁸³; leveraging scale and profitability to reinvest in the business, particularly in developing new products and services ⁸⁴; and pursuing strategic bolt-on acquisitions and partnerships to strengthen market position and diversify offerings, as evidenced by the recent acquisition of Kutt, Inc. ⁸⁵.