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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$0.05
▼(-10.00% Downside)
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
High and improving gross margins
Sustained high gross margins (TTM ~63% and an 87% adjusted margin in Q3) indicate strong unit economics from POS and SaaS offerings. This margin profile supports long-term cash generation and resilience to cost pressures as the recurring SaaS mix grows.
Turnaround to positive operating and free cash flow
The shift to positive operating and free cash flow demonstrates real improvement in cash conversion and working capital management. Durable cash generation reduces reliance on external financing and enables reinvestment in product and market expansion over the next several quarters.
Structural regulatory tailwind from rescheduling
Federal rescheduling is a material structural change that could materially expand dispensary cash flows and margins by eliminating 280E limits. Greater operator profitability should raise transaction volumes and merchant demand for POSaBIT's processing and SaaS services long term.
Negative Factors
Negative equity / weakened balance sheet
A stockholders’ deficit materially weakens capitalization, increases financing risk, and limits flexibility to pursue growth or absorb shocks. Negative equity can force dilutive capital raises or constrain credit access, hindering strategic execution over months to quarters.
Contracting revenue trend
Material revenue decline reflects a transitional gap as legacy payment volumes fall faster than SaaS adoption scales. Persistent top-line contraction undermines operating leverage and makes sustaining margin gains and cash flow improvements more challenging absent renewed revenue growth.
Continued net losses despite progress
Although adjusted EBITDA improved, the company still reports net losses and negative margins. Until profitability is consistent and sustainable, earnings volatility and the need for external capital remain risks that could limit strategic investments and shareholder value creation.
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)0.37
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
POSaBIT Systems is facing significant financial challenges, with negative net income, high leverage, and consistently negative cash flows. These issues indicate operational inefficiencies and financial risks, necessitating urgent attention to stabilize financial performance.Income Statement
The company has faced significant challenges in maintaining profitability, with persistent negative net income and EBIT margins over recent years. The gross profit margin has fluctuated, reflecting some operational inefficiencies. Revenue has been volatile, with a significant decline in the most recent year, indicating potential market or operational challenges.28
Negative
Balance Sheet
The balance sheet shows a concerning high level of leverage with total liabilities significantly exceeding equity, resulting in a negative equity in some years. The debt-to-equity ratio is extremely high, indicating potential financial risk. However, the company has managed to maintain a modest level of cash and cash equivalents.18
Very Negative
Cash Flow
The cash flow statements indicate ongoing struggles with negative operating and free cash flows, suggesting difficulties in generating cash from operations. The free cash flow to net income ratio is consistently negative, reflecting challenges in covering investments and financing activities with internally generated funds.38
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 12.73M | 15.27M | 43.58M | 49.77M | 21.30M | 7.82M |
| Gross Profit | 6.69M | 7.00M | 9.22M | 22.57M | 5.76M | 1.74M |
| EBITDA | -3.09M | -4.69M | -12.15M | 5.95M | -10.15M | -600.53K |
| Net Income | -3.81M | -5.72M | -13.76M | 8.06M | -10.74M | -1.43M |
Balance Sheet | ||||||
| Total Assets | 6.61M | 8.60M | 13.16M | 18.00M | 7.90M | 3.69M |
| Cash, Cash Equivalents and Short-Term Investments | 805.92K | 999.08K | 1.52M | 3.08M | 4.42M | 977.65K |
| Total Debt | 4.55M | 4.53M | 4.58M | 313.41K | 134.51K | 364.26K |
| Total Liabilities | 7.32M | 8.14M | 7.85M | 9.77M | 16.61M | 6.74M |
| Stockholders Equity | -717.50K | 458.94K | 5.31M | 8.22M | -8.71M | -3.06M |
Cash Flow | ||||||
| Free Cash Flow | -122.30K | -515.26K | -8.34M | -5.25M | -2.44M | -362.36K |
| Operating Cash Flow | -122.30K | -515.26K | -7.43M | -4.92M | -2.19M | -186.43K |
| Investing Cash Flow | 48.84K | 120.00K | -1.95M | -330.67K | -241.01K | -175.93K |
| Financing Cash Flow | -192.82K | -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
Positive
49.02
Neutral
66.67
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 0.06, above the 50-day MA of 0.06, and below the 200-day MA of 0.07, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 49.02 is Neutral, neither overbought nor oversold. The STOCH value of 66.67 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$48.44M | 14.04 | 7.17% | ― | -13.43% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
48 Neutral | C$8.05M | -21.59 | ― | ― | 13.01% | 20.00% | |
46 Neutral | C$65.09M | -8.51 | ― | ― | 42.60% | -321.35% | |
45 Neutral | C$8.92M | -3.11 | -540.25% | ― | -33.97% | 59.10% | |
44 Neutral | C$104.58M | -3,571.43 | -0.42% | ― | -59.23% | -100.34% | |
41 Neutral | C$5.17M | -4.35 | -3428.85% | ― | -15.33% | 47.13% |
* Technology Sector Average
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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.