Executive Summary / Key Takeaways

• Athena Bitcoin Global ($ABIT) operates a significant network of Bitcoin ATMs and provides OTC trading and payment processing services, positioning itself as a key player in facilitating retail and institutional access to crypto assets, particularly Bitcoin.
• Recent financial results for Q1 2025 show a decrease in total revenue and net income year-over-year, primarily driven by market uncertainty impacting ATM transaction volumes and prices, highlighting the company's sensitivity to crypto market volatility.
• Despite top-line pressure, the company is investing heavily in technology and expanding its team to support future growth initiatives and product commercialization, signaling a strategic focus on enhancing its operational backbone and service offerings.
• ABIT faces intense competition from larger, more diversified players like Coinbase Global (COIN) and Block Inc. (SQ), as well as direct ATM rivals like Bitcoin Depot (BTM), necessitating strategic differentiation through its focus on financial inclusion in emerging markets and personalized OTC services.
• Key risks include continued crypto market volatility, substantial debt obligations, the evolving and uncertain regulatory landscape (including potential security classification of crypto assets), and challenges in maintaining robust internal controls as a public company.

Setting the Scene: ABIT's Foothold in the Crypto Accessibility Market

Athena Bitcoin Global ($ABIT) has carved out a distinct niche within the burgeoning digital asset landscape, primarily through its extensive network of Bitcoin ATMs (BTMs) and complementary crypto transaction services. The company's journey, originating from a reverse acquisition in 2020, has seen it evolve from a broader crypto platform to a focused provider of accessible on-ramps and off-ramps for Bitcoin. With operations spanning 35 U.S. states, Puerto Rico, and four countries in Central and South America, ABIT's physical footprint is a core component of its strategy, placing kiosks in high-traffic, accessible locations like convenience stores and shopping centers.

ABIT's business model is multi-faceted, encompassing its branded Athena ATMs, white-label ATM operations for clients like the Government of El Salvador, personalized Over-The-Counter (OTC) trading via its Athena Plus desk, and the Athena Pay payment processing service. This blend of retail-facing kiosks and higher-value trading/payment solutions positions ABIT at the intersection of mainstream crypto adoption and specialized digital asset services. The company's strategic emphasis lies in facilitating straightforward, cash-based Bitcoin transactions through its ATMs, while also catering to larger or more complex needs through Athena Plus and Athena Pay.

Technological Backbone and Strategic Evolution

Central to ABIT's operations is its proprietary technology stack designed to manage its distributed ATM network and facilitate seamless crypto transactions. While specific quantitative performance metrics for its core technology beyond transaction speed and reliability are not detailed, the system enables the company to acquire Bitcoin on a "just-in-time basis" from users and third-party exchanges. This operational detail is crucial, as it allows ABIT to hold Bitcoin in hot wallets for typically less than two days on average, a tactic aimed at mitigating exposure to the inherent volatility of crypto asset prices. The company's revenue model for ATMs relies on a markup over prevailing U.S. exchange prices, typically ranging between 13% and 22%, a spread determined by a proprietary method.

Recent technological investments underscore ABIT's commitment to enhancing its platform. In the second quarter of 2024, the company entered into a Development Services Agreement with PSBC, LLC for a new software platform specifically for its Bitcoin ATM operations. This platform was implemented in June 2024, with a subsequent amendment in May 2025 securing support services through November 2025 at a cost of $50,000 per month. The stated goal of this investment is to support expanding activities and the commercialization of other products and services, suggesting a focus on improving the efficiency, scalability, or feature set of its core ATM business and potentially enabling new offerings.

Beyond the ATM network, Athena Plus leverages technology to provide customized OTC trading services for larger transactions (minimum $10,000), facilitating direct fiat-to-crypto exchanges via bank wires. Athena Pay, the payment processing app, allows retailers to accept Bitcoin payments by generating QR codes, with ABIT earning an average processing fee of approximately 2.5% of the transaction amount. These services, while contributing less to overall revenue than the ATM network, represent strategic avenues for diversification and capturing different segments of the crypto market.

Competitive Landscape and Positioning

ABIT operates in a competitive arena populated by direct BTM operators, major cryptocurrency exchanges, and broader fintech companies integrating crypto services. Direct competitors like Bitcoin Depot boast a significantly larger ATM network (over 7,000 machines compared to ABIT's 550), providing them with a scale advantage that likely translates to lower operating costs per unit. While precise, directly comparable market share figures for all niche competitors are not publicly detailed, industry estimates place Bitcoin Depot with a larger share of the U.S. ATM market than ABIT.

Major cryptocurrency exchanges like Coinbase Global and fintech giants like Block Inc. represent broader competitive threats. Coinbase Global dominates the exchange market with substantial trading volumes and high profitability margins (TTM Gross Margin 86%, Operating Margin 35%, Net Margin 39%), far exceeding ABIT's (TTM Gross Margin 13.36%, Operating Margin 7.97%, Net Margin 3.53%). Block Inc., through Cash App and other services, integrates crypto into a wider financial ecosystem, also demonstrating stronger financial performance (TTM Gross Margin 37%, Operating Margin 4%, Net Margin 12%) and scale than ABIT.

ABIT's competitive positioning relies on its physical ATM network for accessible cash-to-crypto transactions, a channel less emphasized by pure-play exchanges. Its focus on financial inclusion, particularly in emerging markets and underserved economies, and its personalized OTC service offer differentiation. However, ABIT's smaller scale results in higher operating costs per unit compared to larger ATM operators. While its technology supports its current operations and strategic focus on inclusion, it faces potential technological gaps compared to the advanced platforms of major exchanges like Coinbase Global, which could impact efficiency and market share capture in broader digital asset services. Barriers to entry, such as regulatory licensing requirements and the significant capital needed to build and maintain a physical ATM network, do provide some protection against new entrants but also favor existing scaled players.

Recent Financial Performance and Liquidity

The first quarter of 2025 presented a challenging environment for ABIT, with total revenues decreasing by 10.8% to $72.63 million compared to $81.41 million in Q1 2024. This decline was primarily driven by a 12.45% decrease in revenue from the core Bitcoin ATMs segment ($69.95 million in Q1 2025 vs. $79.89 million in Q1 2024). Management attributed this downturn to "market uncertainty which resulted in decreases in... the volume of sales and... the sales price per transaction," linking it to geopolitical and economic factors.

Despite the revenue decrease, the cost of revenues saw a smaller 5% reduction, leading to a significant 39% drop in gross profit, from $13.32 million in Q1 2024 to $8.13 million in Q1 2025. This indicates that while the cost of acquiring Bitcoin decreased with market prices, it did not fully offset the impact of lower sales volume and price per transaction on gross margins.

Operating expenses increased across the board, reflecting the company's investment in growth and public company infrastructure. Technology and development expenses surged by 131% to $458,000, general and administrative expenses rose by 27% to $3.05 million, and sales and marketing increased by 9% to $491,000. These increases, combined with the lower gross profit, resulted in a substantial 56% decrease in income from operations, falling from $10.06 million in Q1 2024 to $4.41 million in Q1 2025.

Net income for Q1 2025 was $2.62 million, a 57% decrease from $6.05 million in the prior year period. This was partially mitigated by a significant 75% reduction in interest expense, primarily due to the repayment of a related-party loan in Q1 2024.

From a liquidity perspective, ABIT held $18.27 million in cash and cash equivalents as of March 31, 2025, up slightly from $17.51 million at the end of 2024. However, the company reported a working capital deficit of $3.29 million, largely influenced by current operating lease liabilities ($9.73 million). Cash provided by operating activities decreased to $4.20 million in Q1 2025 from $7.28 million in Q1 2024, impacted by changes in operating assets and liabilities, including increased crypto assets held and accounts payable. The company expects to meet its material cash requirements from known contractual obligations ($6.63 million for the remainder of 2025, $35.38 million for 2026-2029) through ongoing operations, but acknowledges that additional funds may be needed for growth initiatives.

Outlook and Strategic Direction

ABIT's outlook is tied to its ability to execute on its growth strategy amidst a volatile market and competitive pressures. Management anticipates continued increases in technology and development, general and administrative, and sales and marketing expenses as the company expands its activities, pursues commercialization of new products, and manages the costs associated with being a public company.

The company intends to continue investing in its business, focusing on deploying more Bitcoin ATMs in the U.S. and globally, enhancing its operating infrastructure, expanding international operations, and potentially acquiring complementary businesses or technologies. These initiatives are expected to drive future growth, but also necessitate securing additional funds, which may involve dilutive equity or debt financings.

The recent changes to El Salvador's Bitcoin Law, making usage voluntary and removing tax payment options, are not expected to harm ABIT's operations there, as the company believes its services cater to organic consumer demand and its fixed-fee ATM operator role for Chivo remains unchanged under a new three-year agreement. The potential for the government to step back from the Chivo Wallet could also present opportunities for private companies like ABIT.

Risks and Challenges

Investing in ABIT involves significant risks, many of which are inherent to the cryptocurrency industry and the company's specific business model. The most material risks include:

• Crypto Asset Price Volatility and Transaction Volume Dependence: ABIT's revenue is highly sensitive to Bitcoin price fluctuations and transaction volumes. A significant decline in either could materially impact financial performance.
• Significant Indebtedness: The company carries a substantial debt load ($20.49 million total debt excluding leases as of March 31, 2025), secured by most of its assets. Generating sufficient cash flow to service this debt is critical, and restrictive covenants in debt agreements limit operational flexibility.

• Security of Assets and Private Keys: While ABIT uses a third-party custodian (BitGo) for company-owned Bitcoin, the risk of theft, loss, or compromise of assets (cash and crypto) remains. BitGo's insurance policies have significant exclusions.
• Regulatory Uncertainty: The rapidly evolving regulatory landscape for crypto assets globally poses a significant risk. The potential for a crypto asset ABIT transacts in to be classified as a security by regulators could lead to intense scrutiny, investigations, fines, and operational restrictions. Failure to obtain or maintain necessary licenses in various jurisdictions is also a major threat.
• Operational and Technological Disruptions: Any failure or disruption in ABIT's ATM network, software, IT systems, or the underlying blockchain networks could result in financial losses, reputational damage, and loss of users.
• International Operations Risks: Operating in countries like El Salvador exposes ABIT to political and economic instability, currency fluctuations, and challenges in enforcing contractual rights.
• Material Weaknesses in Internal Controls: Management identified material weaknesses in internal control over financial reporting, citing a lack of formalized systems and sufficient documented IT controls. While management believes the financial statements are fairly presented, these weaknesses could impact the reliability of future financial reporting and are costly to remediate.
• Competition: ABIT faces intense competition from larger, more resourced players with greater scale and potentially more advanced technology platforms.

Conclusion

Athena Bitcoin Global operates at the forefront of making Bitcoin accessible through its widespread ATM network and complementary services. While the company has demonstrated historical growth and is strategically investing in its technological infrastructure and team to support future expansion, recent financial performance highlights its vulnerability to the inherent volatility of the cryptocurrency market. The decrease in revenue and net income in Q1 2025 underscores the impact of external market conditions on its core business.

The investment narrative for ABIT hinges on its ability to leverage its physical footprint and differentiated services to capture market share, particularly in underserved segments, while effectively managing operational costs and navigating a complex competitive and regulatory environment. The significant debt burden and identified material weaknesses in internal controls present notable challenges that require diligent execution by management. As ABIT continues to build out its network and enhance its technology, its success will ultimately depend on sustained demand for crypto accessibility and its capacity to scale efficiently while mitigating the substantial risks associated with the dynamic digital asset industry.