POSaBIT Systems Corp ((TSE:PBIT)) has held its Q4 earnings call. Read on for the main highlights of the call.
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POSaBIT Systems’ latest earnings call painted a cautiously optimistic picture of a business in transition. Management acknowledged a steep headline revenue drop and lingering net losses, yet repeatedly stressed better quality of earnings, higher margins, positive adjusted EBITDA and a stronger balance sheet, alongside new AI-driven products and potential upside from cannabis regulatory change.
Adjusted EBITDA Turns Positive
POSaBIT delivered a sharp profitability swing at the adjusted level, moving from a loss of about $0.8 million in 2024 to roughly $2.5 million of positive adjusted EBITDA in 2025. Management framed the more than 400% year-over-year improvement as proof that the strategic shift in its business model is working and that core operations are now generating cash.
Gross Margin Expansion Despite Flat Gross Profit
Gross profit inched up to $7.2 million from $7.0 million, but the more important story was margin expansion, with reported gross margin jumping to around 72% from 46% a year earlier. On a non-IFRS basis, adjusted gross profit exceeded 80%, which executives called the highest level in the company’s history and a key marker of improved earnings quality.
Improved Cash and Liquidity Metrics
Cash on hand rose to approximately $1.8 million from $1.0 million, boosting liquidity by about 76% year over year and giving the company more flexibility to execute its strategy. Working capital also improved as accounts receivable dropped by more than $600,000, signaling better collections and tighter management of customer balances.
Operating Cost Discipline Supports Margin Story
Total operating expenses were cut to $9.3 million from $12.2 million, representing roughly a 24% reduction versus 2024. Management credited lower professional fees, reduced share-based compensation and lower depreciation for the savings, underscoring a disciplined cost structure that supports the margin-led turnaround.
Balance Sheet Cleanup Continues
POSaBIT continued to tidy up its balance sheet, cutting accounts payable and accrued liabilities by about $1.3 million and reducing current liabilities by nearly $2.0 million. The company emphasized that paying down aged payables has improved vendor relationships, while borrowings on its credit facility held steady at about $4.5 million.
Shift Toward Recurring SaaS and POS Momentum
Revenue mix is tilting toward higher-margin, recurring software, with SaaS now making up roughly half of total revenue and expected to reach about 60% in 2026. The company now serves around 600 active locations across its products, adding roughly 100 new POS merchants during the year and increasing average SaaS revenue per merchant.
New AI-Driven Product: POSaBIT Brands
Management highlighted the beta launch of POSaBIT Brands, an AI-powered portal aimed at producers and processors that opens a new addressable market. The platform offers real-time reporting, product catalogs, vendor-managed inventory, B2B payments and AI-assisted data mapping, with the first rollout in Washington State leveraging existing retail relationships.
Positioning for Regulatory Change in Payments
Executives leaned into the potential benefits of U.S. cannabis rescheduling, noting that POSaBIT is already approved to process credit cards outside the sector. They said the company’s infrastructure could support cannabis credit card transactions on day one if regulations allow, positioning the business to capitalize quickly on any rule changes.
Revenue Decline Masks Strategic Model Shift
Total revenue fell sharply to $10.0 million in 2025 from $15.3 million in 2024, a drop of roughly 35% that may alarm headline-focused investors. Management argued the decline mainly reflects a deliberate move to an agent or referral model for payment processing, which reduces reported top-line but improves margins, cash generation and risk profile.
Net Loss Narrows but Still a Concern
POSaBIT still posted a net loss of about $2.0 million for 2025, though that was much better than the $5.7 million loss reported in 2024. The roughly 65% improvement suggests progress toward breakeven on a GAAP basis, yet management acknowledged that investors will want to see the remaining gap close over the coming years.
Payment Pricing Pressure Weighs on Growth
Management flagged ongoing pressure on payment revenue per transaction as a key operational headwind, driven by competitive pricing and the entry of lower-quality market players. These dynamics forced pricing adjustments and contributed to lower payments revenue, partially offsetting the benefits of expanding SaaS contributions.
Valuation Disconnect and Thin Public Market Liquidity
On the capital markets front, POSaBIT’s leadership was candid about the company’s small market capitalization on the CSE, quoted near $5.5 million to $6.0 million with limited trading volume. They characterized the current valuation as out of sync with operating fundamentals, pointing to stronger margins, positive adjusted EBITDA and a cleaner balance sheet.
Debt Load and FX Volatility Remain Watchpoints
The company’s outstanding borrowings remained around $4.5 million on its credit facility, a level management appears comfortable carrying but which still constrains flexibility. Executives also reminded investors that U.S. and Canadian dollar exchange movements can create noticeable swings in reported figures, adding noise that the company cannot control.
Forward Guidance and Strategic Outlook
Looking ahead to 2026, management guided to double-digit growth in gross profit dollars, driven mainly by a richer mix of higher-margin SaaS and contributions from the new POSaBIT Brands initiative, which effectively doubles its addressable market. Using 2025 as the base, they pointed to 72% gross margin, positive $2.5 million adjusted EBITDA, improved cash, leaner liabilities and about 600 active locations as proof that the business is now structurally stronger and ready to scale if regulatory tailwinds appear.
POSaBIT’s earnings call outlined a company trading near trough valuation yet delivering stronger margins, positive adjusted earnings and a leaner balance sheet, even as reported revenue contracts. For investors willing to look past the top-line drop and FX noise, the key themes were the pivot to recurring SaaS, disciplined cost control and optionality in both AI-driven products and potential cannabis credit card processing.