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POSaBIT Systems Corp. (TSE:PBIT)
:PBIT
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POSaBIT Systems
(PBIT)
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Rating:45Neutral
Price Target:
C$0.06
▲(5.00% Upside)
Action:ReiteratedDate:01/13/26
The score is held down primarily by weak financial fundamentals—negative equity, ongoing net losses, and contracting TTM revenue—despite improved cash flow. Technicals also remain soft with the price below key moving averages and a negative MACD. The earnings call was a relative positive (improving adjusted profitability and SaaS growth), but valuation remains constrained by negative earnings and no dividend support.
Positive Factors
Sustained High Gross Margins
An 87% adjusted gross profit margin indicates the business captures strong unit economics, especially on software/SaaS sales. High gross margins provide durable buffer against demand swings, support reinvestment in product and compliance, and underpin sustainable profitability as revenue mix shifts.
Positive Operating & Free Cash Flow
Return to positive operating and free cash flow signals improving cash generation and working capital management. Consistent cash flow reduces reliance on external financing, enables incremental organic investment and debt servicing, and materially improves the company's financial flexibility over the medium term.
Growing Recurring SaaS Revenue
Quarterly SaaS revenue growth points to stronger recurring revenue mix and higher customer stickiness. A shift toward subscription and e-commerce POS services enhances predictability, lifetime value and margin sustainability, making long-term cash flows less dependent on volatile legacy transaction volumes.
Negative Factors
Negative Equity / Weakened Capitalization
A stockholders’ deficit materially weakens capitalization and raises financial risk; leverage is effectively high even with moderate debt. This constraint limits financing options, raises refinancing risk, and reduces the firm’s ability to fund growth or withstand shocks over the coming months.
Declining Total Revenue / Transition Risk
Material year-over-year revenue decline while transitioning revenue mix indicates scale erosion risk. Losing legacy transaction volume can shrink operating leverage and extend the timeline to rebuild comparable top-line, pressuring margin recovery and return on marketing/implementation investments.
Persistent Net Losses and Profitability Risk
Despite adjusted EBITDA progress, ongoing net losses and negative net margins signal that underlying profitability is not yet secured. Continued losses can limit retained capital for R&D and market expansion, forcing reliance on external funding and constraining strategic choices over the medium term.
POSaBIT Systems (PBIT) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$8.92M
Dividend YieldN/A
Average Volume (3M)39.87K
Price to Earnings (P/E)―
Beta (1Y)0.41
Revenue Growth-33.97%
EPS Growth59.10%
CountryCA
Employees54
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)>-0.01
Shares Outstanding162,164,110
10 Day Avg. Volume72,168
30 Day Avg. Volume39,872
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)16.58
Price to Sales (P/S)0.50
P/FCF Ratio-14.76
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
POSaBIT Systems Business Overview & Revenue Model
Company DescriptionPOSaBIT Systems Corporation, a financial technology company, provides block chain-enabled payment processing and point-of-sale systems for cash-only businesses with a focus on the cannabis industry in the United States. The company is headquartered in Kirkland, Washington.
How the Company Makes MoneyPOSaBIT generates revenue primarily through transaction fees charged on every payment processed through its point-of-sale systems. These fees are typically a percentage of the transaction amount, allowing the company to earn a consistent income as cannabis sales increase. In addition to transaction fees, POSaBIT also offers subscription-based services for its POS systems, which provide retailers with ongoing support, software updates, and enhanced features. Strategic partnerships with cannabis dispensaries and other retail operations further contribute to its earnings by expanding its customer base and increasing transaction volume. The company may also explore additional revenue streams through value-added services designed to enhance operational efficiency for its clients.
POSaBIT Systems Earnings Call Summary
Earnings Call Date:Nov 12, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The earnings call highlighted significant progress in profitability, with record adjusted EBITDA and improved gross profit margins. Growth in SaaS revenue and successful financial management were notable positives. However, revenue decline and a small net loss were concerns. The decision to cut PR spending could impact public perception, but overall, the focus on profitability and market expansion paints a positive picture.Q3-2025 Updates
Positive Updates
Record Adjusted EBITDA
POSaBIT achieved its first nearly $1 million adjusted EBITDA quarter, marking a significant milestone in the company's history.
Improved Gross Profit Margin
The company reported an 87% adjusted gross profit margin, up from 77% in Q2, demonstrating improved profitability.
Growth in SaaS Revenue
Recurring SaaS revenues increased 22% in Q3 compared to Q2, highlighting the successful focus on growing the point-of-sale and e-commerce menu business.
Cash Growth and Debt Reduction
Cash on hand increased by nearly $0.5 million over the quarter, with a significant reduction in accounts payable by 41% or $400,000, strengthening the financial position.
Continued Market Expansion
POSaBIT expanded its presence with steady growth in Oregon, New Mexico, and new markets on the East Coast.
Negative Updates
Revenue Decline
Q3 total revenue was $2.3 million, down from $3.8 million in the same period last year, due to changes in legacy payment processing revenues.
Small Net Loss
The company reported a net loss of $596,000, although this represents a 70% improvement over the previous year.
Concerns About Public Relations
The company reduced spending on PR and IR as the return on investment was not meeting expectations, potentially affecting public perception.
Company Guidance
During the POSaBIT Systems Corporation Third Quarter 2025 earnings call, the company provided several key metrics highlighting their financial performance and strategic focus. POSaBIT achieved a milestone with nearly $1 million in adjusted EBITDA, reaching around $970,000, and demonstrated significant growth with a 22% increase in recurring SaaS revenues compared to the previous quarter. The company reported an adjusted gross profit margin of 87%, up from 77% in Q2, and a substantial gross profit increase of over $150,000. Cash on hand grew by nearly $0.5 million, finishing at over $1.2 million, while accounts payable were reduced by $400,000. Total revenue for Q3 was $2.3 million, a decline from $3.8 million the previous year, which was expected due to a shift away from legacy payment processing revenues. Despite a small net loss of $596,000, this marked a 70% improvement from the previous year, reinforcing the company's focus on profitability and cost management. With a stable debt balance of about $4.5 million and continued growth in their point-of-sale and e-commerce business, POSaBIT is positioned for future expansion and success, especially as they anticipate regulatory changes in the cannabis industry.POSaBIT Systems Financial Statement Overview
Summary
Operating and free cash flow turned positive in the TTM and losses are narrowing, supported by strong gross margins. Offsetting this, TTM revenue is contracting and the balance sheet is materially weakened by negative equity, increasing financial risk.Income Statement
TTM (Trailing-Twelve-Months) results show solid gross margin (~63%), but the company remains unprofitable with negative operating and net margins (net margin about -21%). Revenue is also down (about -6.5% in TTM). While losses have narrowed versus 2024 (smaller negative EBIT and net loss), the overall earnings profile is still weak and the business has not re-established consistent profitability after the sharp deterioration from 2022 to 2023.28
Negative
Balance Sheet
The balance sheet is pressured by negative equity in TTM (stockholders’ deficit), which meaningfully increases financial risk and limits flexibility. Debt is moderate in absolute terms, but leverage is effectively very high given the equity deficit (debt-to-equity not meaningful when equity is negative). This is a clear step down from 2023–2024 when equity was positive, indicating weakening capitalization.18
Very Negative
Cash Flow
Cash generation has improved in TTM, with positive operating cash flow (~$0.6M) and positive free cash flow, a notable turnaround from the negative cash flows seen in 2023–2024. However, cash flow strength is not yet firmly supported by earnings (the company is still reporting a net loss), and the historical pattern shows material volatility in operating cash flow and free cash flow over the last several years.38
Negative
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 11.01M | 15.27M | 43.58M | 49.77M | 21.30M | 7.82M |
| Gross Profit | 6.95M | 7.00M | 9.22M | 22.57M | 5.76M | 1.74M |
| EBITDA | -1.67M | -4.69M | -12.15M | 5.95M | -10.15M | -600.53K |
| Net Income | -2.32M | -5.72M | -13.76M | 8.06M | -10.74M | -1.43M |
Balance Sheet | ||||||
| Total Assets | 5.90M | 8.60M | 13.16M | 18.00M | 7.90M | 3.69M |
| Cash, Cash Equivalents and Short-Term Investments | 1.22M | 999.08K | 1.52M | 3.08M | 4.42M | 977.65K |
| Total Debt | 4.57M | 4.53M | 4.58M | 313.41K | 134.51K | 364.26K |
| Total Liabilities | 6.78M | 8.14M | 7.85M | 9.77M | 16.61M | 6.74M |
| Stockholders Equity | -878.40K | 458.94K | 5.31M | 8.22M | -8.71M | -3.06M |
Cash Flow | ||||||
| Free Cash Flow | 583.83K | -515.26K | -8.34M | -5.25M | -2.44M | -362.36K |
| Operating Cash Flow | 583.83K | -515.26K | -7.43M | -4.92M | -2.19M | -186.43K |
| Investing Cash Flow | 49.61K | 120.00K | -1.95M | -330.67K | -241.01K | -175.93K |
| Financing Cash Flow | -161.25K | -127.82K | 7.83M | 3.90M | 5.88M | 935.57K |
POSaBIT Systems Technical Analysis
Negative
0.06
Price Trends
0.06
Negative
0.06
Negative
0.07
Negative
Market Momentum
>-0.01
Negative
49.44
Neutral
50.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PBIT, the sentiment is Negative. The current price of 0.06 is above the 20-day moving average (MA) of 0.05, above the 50-day MA of 0.06, and below the 200-day MA of 0.07, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 49.44 is Neutral, neither overbought nor oversold. The STOCH value of 50.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:PBIT.
POSaBIT Systems Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | C$43.46M | 12.45 | 7.17% | ― | -13.43% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
45 Neutral | C$8.92M | -2.63 | -540.25% | ― | -33.97% | 59.10% | |
44 Neutral | C$104.58M | -3,571.43 | -0.42% | ― | -59.23% | -100.34% | |
42 Neutral | C$5.17M | -4.65 | -3428.85% | ― | -15.33% | 47.13% | |
42 Neutral | C$3.21M | -7.29 | ― | ― | 13.01% | 20.00% |
* Technology Sector Average
TSE:PBIT
POSaBIT Systems
0.06
-0.03
-35.29%
TSE:KNR
Kontrol Technologies
2.50
0.00
0.00%
TSE:VIS
Visionstate
0.02
0.00
0.00%
TSE:NERD
Nerds On Site
0.04
>-0.01
-22.22%
TSE:PVT
Pivotree
1.65
0.60
57.14%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.