READ THE FULL XTMIF RESEARCH REPORT
➢ It is not often you come across a product that is offered free to customers, and saves them time and effort. XTM's Today™ solution does just that for employers who are becoming increasingly pressured to provide Earned Wage Access to their employees for both gratuities and earnings. The Today program mainly generates revenues from a cut of the interchange fees the card issuers charge merchants making the decision for employers to sign up a no-brainer.
➢ Today is a SaaS solution that provides employers software and a payment platform to calculate and pay out gratuities and earnings to its employees in a simpler and faster way. Rather than stuffing envelops with cash, employers pay electronically, providing employees with payment to their free mobile wallets whereby they can move money, pay bills and buy in-store or online with their VISA or MasterCard debit cards. This saves the employer time and effort while giving employees the opportunity for immediate payment of earnings as well as the app to track those earnings and spending.
➢ XTM's (OTC:XTMIF) Gross Dollar Value (GDV) loads grew more than 600% over the past 11 months and it added 230% more new clients this quarter compared with Q4 2020. It currently has approximately 50,000 client employees using its wallet/app and Visa/Mastercard solution.
➢ The revenues generated in Canada were impacted by the country's COVID dining restrictions although the company leveraged the hospitality down-time to sign the majority of Canada's restaurant groups. Approximately 50% of the company's Canadian revenues come from restaurants in Ontario where operations were significantly suppressed by the government. XTM is working to reduce its dependency on that geographic region and Canada, and is focusing on US sales. When Canada reopens, sales should spike.
➢ In November XTM announced it is now a partnership with The Bancorp (NASDAQ:TBBK) as its issuer bank in the US. The Bancorp is the top issuer of prepaid card volume, and accounts for over 300 billion in annual processing volume with over 150 million active accounts in U.S. distribution. This has allowed XTM to enter the US market with a prepaid VISA card.
➢ In Q1 it plans to roll out a cash-back program that is currently in pilot with 1,500 Today members and plans to roll out a fully POS integrated Tip Pooling module that will be offered for a monthly fee on a per location basis adding additional revenue streams.
➢ The company plans to grow internally and by acquisition. Ultimately it hopes to provide services such as payroll processing as well as a fully integrated restaurant management platform addressing the unique needs of the hospitality industry vertical.
➢ The company has a fully diluted enterprise value of US$43 million (CN$55 million) and trades at an EV to 2022 sales ratio of 4.6 times. This compares with peers who trade at 5.3 times. Should revenues double and multiples remain the same, the stock could increase more than 100% by 2023.
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