Summary Bitcoin Depot Inc. (BTM) operates a profitable Bitcoin ATM network but faces limited growth prospects as cash and check usage declines. BTM's revenue is primarily driven by kiosk transactions, with recent financials showing stable cash flow but slowing revenue growth. Expansion into new markets like New York and Australia offers incremental growth, but overall upside appears modest and share dilution is possible. Given the business model's constraints and current valuation, BTM is rated Hold, with expectations for market-like returns and limited downside risk. Bitcoin Depot Inc. ( BTM ) is an abnormal approach to crypto: ATM services, particularly to give access to Bitcoin ( BTC-USD ). It's a model that's proved to be profitable, but there seems little growth in retrofitting ATMs for that purpose. I ultimately concluded that BTM must be fairly valued for right now. Business Model BTM gets its ticker from the service it provides: ATMs intended for Bitcoin, a "Bitcoin Teller Machine." (I'll refer to them as kiosks going forward to avoid confusion with the ticker). These kiosks allow folks to deposit cash and checks into Bitcoin holdings, much like one normally would for a bank account. Q2 2025 Company Presentation As of Q2 2025, they owned over 9,000 kiosks in North America and Australia, which they believe makes them the market leader of such services. They also have an app, called BDC Checkout, that allows users to make digital transfers in a similar vein. BTM aims to place their kiosks in locations with high traffic to attract customers. Circle K (a popular gas station) hosts 1,100 of their total kiosks, per their 2024 annual report . As far as how they monetize this model for revenue, there are two components: Flat transaction fee Mark-up for sale of BTC I'll quote their annual report that states it as such: We generate substantially all of our revenue from the cash paid by customers to purchase Bitcoin from our kiosks. For example, approximately 99.7% of our revenue in the year ended December 31, 2024 was derived from the sale of our cryptocurrency, including the markup at which we sell cryptocurrency to users (which can vary between BDCheckout and BTM kiosks) and a separate flat transaction fee . Revenue Breakdown (2024 Form 10K) The overwhelming majority of business is driven by kiosks, so that's where most of the focus will be. Breakdown of Expenses (2024 Form 10K) The biggest expense cost of revenue is posed by acquiring BTC to have available for customer deposits. Floorspace leases, paid to stores that house the kiosks, are the next biggest item. Kiosks operations, including all other expenses to run the kiosks, make up the smallest portion. Operating Expense (2024 Form 10K) Operating expenses are not too large and generally pretty stable, so their task is largely one of optimizing revenue and enjoying operating leverage. Financial History While the company has technically been around since 2016, I will review only the last five years because it had a SPAC merger in 2023 and because, prior to 2020, BTC wasn't as widespread, and so I think these years give better indications of the general state and growth of the company. Author's display of 10K data To start, revenue has generally been on a growth trend, but this began to decline in 2024. Even though total kiosks in operation have grown each year, fueled by acquisition of old ATMs, 2024 experienced lower transaction volume, which depressed total revenue. Income Statement (Q2 2025 Form 10Q) Year-to-date results show a modest recovery in 2025, compared to 2024. The trends show that BTM may be less of a grower now and more of a cyclical. Author's display of 10K data The history of free cash flow shows a similar trend, following the ups and downs of revenue. FCF therefore seems to follow a range of $10M to $40M in any given year. Cash Flow Statement (Q2 2025 Form 10Q) Year-to-date FCF shows a similar recovery, over $20M for the first six months and aiming for the higher end of the range once again. One will also note some outflow for acquisition of BTC. Assets (Q2 2025 Form 10Q) Since the end of 2024, the company has been building up its position in BTC, reflecting a shift in strategy to having a stake in the crypto, beyond just providing a service. In the Q2 earnings call, management explained: Additionally, we continue to strategically add Bitcoin to our treasury, reinforcing our commitment to long-term value creation. With nearly $60 million in combined cash and digital assets and to strengthen the balance sheet, we are well positioned for future growth and operational excellence. Liabilities (Q2 2025 Form 10Q) These liquid assets provide a cushion against their outstanding debt, further supported by the positive cash flow. Overall, it's profitable company with a reasonably healthy balance sheet. Outlook and Valuation My initial thought when I looked at this company is that it was trying to pair an old-school financial service with an asset that represents an attempt to break free from that. Nevertheless, they have a model that is profitable, that likely gave some longevity to ATM infrastructure throughout North America that was facing replacement by crypto and other evolutions in fintech. The real question, though, is if recent prices around $3.66, for a market cap of about $400M, is good value. Q2 2025 Company Presentation History shows that transactions on their kiosks aren't influenced by fluctuations in the value of BTC. It shows that customers generally are behaving consistently with a mindset of long-term saving. If there is a period where BTC's performance is weak, it's reasonable to think BTM is protected against that in ways that would not be true of BTC miners, treasury companies, or exchanges. While downside is limited for the foreseeable future, we still have to ask what upside is on the table. There's a little bit of growth. Management mentioned in the Q2 earnings call plans to set up kiosks in New York, a very populous state in which they have no presence, as well as Australia, whose population is comparably large. Kiosk Locations and New York Opportnity (Q2 2025 Company Presentation) Nevertheless, these efforts are penetrating markets with about 40M people, while they already have access to almost 300M in current markets. These areas are a growth opportunity, but it's not the same as when Starbucks ( SBUX ) went from Washington state to the whole world. 2024 Form 10K Their own market data from the latest annual report indicates that cash and check are declining methods of payment over the last decade. This highlights the increasing role of digital payment methods over time, supporting the BTC-focused product they offer. At the same time, cash and checks are what customers are known to deposit into ATMs. Repurposing them for BTC makes some sense at this point in time. Still, how does this business fare when the upside of increased BTC adoption seems in tension with the decline of the cash and checks that give them a transaction? BTM somehow needs total users and average volume of transactions to grow in spite of this trend. Perhaps that is why the current market cap is something like a multiple of 10 on the typical FCF. Author's calculation If we assume a more middle range of FCF as a baseline, a Discounted Cash Flow calculation that assumes 10% growth in the first five years from expansion into new markets and more incremental growth thereafter suggests slight undervaluation. Q2 2025 Company Presentation Yet, the capitalization also suggests share dilution could occur as upside is realized. This comes from warrants and rights whose thresholds start at $11.50 and stagger up to $16. Author's calculation While my DCF included a discount rate of 10% (typical return of a market index), removing it suggests that the share price could reach these nominal thresholds in the future, triggering these dilutive events. Author's calculation Valuing with total potential dilution on the table, we get a share price similar to the current one. By most measures, BTM seems to be fairly valued for some setbacks. Such an observation would usually be the antecedent to a Buy thesis. Yet, it's not clear if there's upside that isn't fully counted by the market price. The longevity of ATMs into the 2030s, particularly for BTC services, seems difficult to predict and vulnerable to disruption. Conclusion Bitcoin Depot is not a bad business, but it's a peculiar model. It cleverly repurposes existing assets for more contemporary purposes, but the nature of that puts it in tension with its own growth opportunities. I suspect that most people with an interest in crypto will just continue to use cashless options, particularly with the rise of stablecoins. Lacking major risk factors, I think BTM is fairly priced for market-like returns over time, deserving a Hold rating.
