SHF Holdings Inc (SHFS) (Q1 2024) Earnings Call Transcript Highlights: A Turnaround Story with ...

GuruFocus Research
4 min read

In This Article:

  • Total Revenue: $4.1 million in Q1 2024, slightly down from $4.2 million in the prior year period.

  • Loan Interest Income: Increased by over 250% to $1.6 million in Q1 2024 from $466,000 in Q1 2023.

  • Depository Fees: Decreased 28% to $1.62 million in Q1 2024 from $2.25 million in Q1 2023.

  • Operating Expense: Decreased by more than 35% to $3.7 million in Q1 2024 from $5.8 million in Q1 2023.

  • Net Income: Reported at nearly $2 million in Q1 2024, a significant improvement from a net loss of $1.4 million in the prior year period.

  • Adjusted EBITDA: $1 million in Q1 2024, up from $409,000 in the prior year period.

  • Cash and Cash Equivalents: $5.6 million as of March 31, 2024, compared to $4.9 million at the end of 2023.

  • Cash Flow from Operations: $1.4 million in Q1 2024, improved from $232,000 used in Q1 2023.

  • Net Working Capital: Improved to $318,000 in Q1 2024 from a deficit of $135,000 at the end of 2023.

Release Date: May 13, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • SHF Holdings Inc reported a significant increase in loan income, which rose 250% year-over-year to $1.6 million in Q1 2024.

  • The company successfully expanded its lending program, nearly tripling the value of its loan book compared to the previous year.

  • SHF Holdings Inc reduced total operating expenses by over 36%, improving operating efficiency and contributing to positive net operating margins.

  • The company is well-positioned in the cannabis finance industry, offering a unique suite of compliant financial services that are difficult for competitors to replicate.

  • SHF Holdings Inc is strategically expanding its product and service offerings, aiming to capture new customers and increase deposit accounts through its high-margin lending program.

Negative Points

  • Total revenue slightly decreased to $4.1 million in Q1 2024 from $4.2 million in the previous year, primarily due to lower investment income and deposit activity.

  • The termination of a master services and revenue sharing agreement with Central Bank in Arkansas led to a significant drop in client accounts and a 28% decrease in depository fees.

  • Despite the growth in some areas, the company experienced fewer accounts being opened and lower deposit balances compared to the prior year.

  • Issues with payment networks continue to make the industry predominantly cash-intensive, which poses ongoing operational challenges.

  • The cannabis industry remains under the Controlled Substance Act, and despite potential legislative changes, compliance and oversight requirements continue to be stringent and complex.

Recommended Stories