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DeFi Technologies Inc Reports Strong Financial Performance in Q3 Earnings Call
Positive Highlights from the Earnings Call
DeFi Technologies Inc announced a noteworthy growth in assets under management, reaching $1.1 billion CAD recently. The company’s revenue model is diversified, with exposure to blockchain-based assets and services, contributing to a robust balance sheet. Furthermore, DeFi Technologies Inc successfully cleared all outstanding debt, significantly improving its financial standing. Additionally, the company is expanding its product offerings by planning to launch 23 new products by the end of the year, focusing on unique, first-mover advantage products. DeFi Technologies Inc is also eyeing international expansion into markets in North Africa, Asia, and the Middle East, which could potentially drive substantial revenue growth.
Negative Points Addressed in the Earnings Call
The company’s cash flow statements may appear negative due to how crypto assets are regulated, not considered liquid assets despite their convertibility. DeFi Technologies Inc is facing challenges with predatory algorithms and shorting in the Canadian market, impacting its stock performance. There is uncertainty surrounding the timing and success of the planned uplisting to a major US exchange, contingent on regulatory changes. Furthermore, the company’s current valuation is low, affecting its ability to use shares for acquisitions without significant dilution. DeFi Technologies Inc operates in a fiercely competitive and rapidly evolving digital asset market, potentially impacting future profitability and growth.
Highlights from Q & A Session
Q: Where is the $14 million in Alpha trading profits in the income statement?
A: Ryan, the CFO, explained that it is reflected in the digital assets line item as realized gains or losses on digital assets. It is integrated within the $51 million for the quarter.
Q: This quarter had $22 million in exchange gains. What’s the source and nature of the occurrence?
A: Ryan, the CFO, clarified that these gains are attributed to foreign currency fluctuations, mainly involving the Swedish Krona against the US dollar, positively impacting the company’s financials.
Q: Has DeFi made progress with institutional investors in the last six months?
A: Russell, an executive at the company, confirmed advancements in the institutional market and expressed optimism about future uplisting to a major US exchange despite challenges in the Canadian market.
Q: Will future acquisitions be funded through share dilution?
A: Russell stated that the company aims to avoid using shares for acquisitions unless at a lower multiple than its current trading valuation, ensuring any acquisition is accretive.
Q: How can you ensure Dhi Alpha remains profitable amidst increasing competition over time?
A: Johann, another company executive, elucidated that Dhi Alpha focuses on unique opportunities and partnerships not easily accessible to competitors, ensuring sustained profitability.
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