Amber International Holding Ltd (AMBR) Q4 2024 Earnings Report, Transcript and Summary

Good morning, and welcome to Amber International Holding Limited's Fiscal Year 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference call is being recorded. It is now my pleasure to introduce your host, Mr. Terence Li, Chief Strategy Officer of Amber International Holding Limited. Mr. Lei, you may begin.

Thank you. Good morning, everyone, and welcome to Amber International Holdings Limited fiscal year 2024 earnings conference call. My name is Terence Li, Chief Strategy Officer of Amber International Holdings Limited. Before we begin, I would like to remind everyone that today's discussion may contain forward-looking statements within the meaning of federal securities law. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. For a more detailed description of these and other risks and uncertainties, please refer to our findings with the Securities and Exchange Commission, including our recent Form 20-F. On today's call, we have Wayne Huo our Chief Executive Officer; and Josephine Ngai, our Chief Financial Officer. They will be discussing our financial results for the fiscal year-end December 31, 2024, and providing an update on our business strategy following our recent merger and NASDAQ listing under the ticker symbol AMBR. Today's agenda will begin with Wayne providing an overview of our business and strategic initiatives, followed by Josephine's review of our financial results. We will then open the call for your questions. With that, I will now turn the call over to our CEO, Wayne Huo. Wayne, please go ahead.

Thank you, Terence. Good morning, everyone, and thank you for joining us today for Amber International Holdings Limited's fiscal year 2024 earnings conference call. I'm Wayne, CEO and Director of Amber International, an institutional crypto financial services and solutions provider operating under the brand name Amber Premium and headquartered in Singapore. Before we begin, I'd like to express my gratitude to our shareholders, clients, and employees for their continued support throughout this transformative year. Our team has worked tirelessly to position Amber Premium as a leader in institutional crypto finance, and I'm excited to share our progress with you today. Let me begin by providing an overview of Amber International's journey, business model, and the market environment we are operating in. On March 12, 2025, we successfully completed the merger between Amber DWM Holdings Limited and iClick Interactive Asia Group Limited, marking a significant milestone in our journey as we became publicly listed on the NASDAQ under the name Amber International Holdings Limited with the ticker symbol AMBR. This listing represents not just a financial achievement, but a validation of our vision to become the top choice of a one-stop institutional digital assets services and solutions provider that drives crypto adoption in the world. For those who may be new to our story, Amber International Holding Limited operates under the brand name Amber Premium, providing institutional crypto financial services and solutions. We deliver institutional-grade market assets, execution infrastructure and investment solutions to help institutions and high net worth individuals optimize their digital asset portfolios. Established in 2021, as originally Amber Group's crypto project banking business, Amber Premium formally commenced operation as an independent business unit in the second half of 2023. Since then, we've built a regulated scalable financial ecosystem powered by proprietary blockchain and financial technologies, AI driven risk management and quantitative algorithms across centralized finance, decentralized finance and OTC markets. During our operation, the digital asset market has experienced significant growth with total market capitalization surging from approximately $800 billion as of the end of 2022, to close to $4 trillion at the end of 2024. This growth is fueled by increasing institutional adoption of digital assets, the rapid development of decentralized finance ecosystems and the breakthrough of advanced blockchain technologies. As financial institutions, hedge funds, family offices, and high net worth individuals increasingly integrate digital assets into their portfolios, the demand for sophisticated wealth management solutions has intensified. As institutions and high net worth individuals expand beyond basic crypto ETFs and bitcoin exposure, Amber Premium is positioned to address three critical industry challenges. First, fragmented liquidity across centralized and decentralized markets, which brings challenges to execution efficiency. Our deep industry connectivity and fast mover advantage unlock access to new token markets, liquidity pools and DeFi venues, enabling institutions to deploy capital seamlessly across all types of crypto markets and venues. Second, crypto yield sources are rich but spread across decentralized protocols and centralized spot markets and derivative markets. Amber Premium structured yield solutions apply the latest technologies and enable clients to assess the aggregated opportunities across these venues. Finally, regulatory complexity which often slows down institutional adoption. Amber Premium operates as a regulated platform with automated compliance tools, institutional-grade KYC AML procedures and transparent governance frameworks. This allows clients to navigate the market confidently and compliantly, while securely secure scaling their digital asset portfolios. By solving these challenges, Amber Premium is the trusted gateway for institutions and high-net-worth individuals to start from basic crypto exposure to sophisticated compliant digital asset strategies. Next, I'll walk you through our key business segments. Our business model is uniquely positioned to bridge traditional finance and decentralized finance with institution-based solutions. We've built our operations across three key business segments. First, our full-stack execution solution provides institutional market access to thousands of trading pairs across over 100 trading venues, covering centralized exchanges, decentralized liquidity pools, and OTC markets. Our high-performance trading infrastructure handles over $1 billion of client transaction volumes monthly, supporting sophisticated trading algos for optimized execution. Second, Amber Premium provides comprehensive wealth management solutions, including structured investment products such as dual-currency option strategies and accumulator-decumulated products designed for strategic asset accumulation and risk-adjusted exposure management. We also provide yield and DeFi solutions featuring earned programs, staking rewards, and DeFi yield-enhanced products to optimize capital efficiency with controlled risk exposure. Additionally, our strategic funds deliver regulated, audited assets to high-growth opportunities in cryptocurrencies. Finally, collateralized lending offers crypto-backed financing solutions with competitive rates, flexible terms, and automated safeguards to minimize liquidation risks. Third, our seamless crypto payment solutions facilitate secure, regulated crypto-to-fiat and fiat-to-crypto conversion, alongside the Amber Premium crypto card that allows clients to make payments instantly and globally with their crypto asset balance with Amber Premium. Central to our value proposition is our distinctive 1 plus N premium service model, delivering tailored, integrated wealth management solutions. Each client is supported by a dedicated relationship manager alongside a team of specialists, ensuring a seamless and highly personalized experience. Our client base includes institutional investors such as financial institutions, hedge funds, private banks, proprietary trading firms, and corporate treasuries, as well as high-net-worth individuals and family offices looking for crypto-structured investment products and personalized portfolio management. Following that, I would like to highlight the strategic initiatives we've undertaken and how they will be enhancing the resilience of our business. We've had several achievements to strengthen our position in the institutional crypto finance space. On the technology front, Amber Premium has developed proprietary platforms, including secure, user-friendly mobile apps and web interfaces for real-time trading, investing, and portfolio management. We are also capable of integrating to the latest advanced smart contracts and blockchains that enhances our offerings with DeFi capabilities such as yield-enhanced products, staking rewards, and airdrops from leading crypto projects. We provide institutional-grade security through military-grade encryption, multi-factor authentication, and hybrid hot-cold wallet storage. These expertise’s take years to develop. Meanwhile, on the business front, Amber Premium is expanding its presence in the real-world asset tokenization ecosystem. The company is developing blockchain native Yale enhanced investment products, providing institutional clients with diversified, transparent and secure assets to emerging crypto opportunities. In addition to enhanced market positioning, Amber Premium is implementing a refined go-to-market strategy and integrating key resources across regions. Building on a strong reputation for service quality and trust, our marketing efforts remain client-centric, emphasizing long-term value creation and relationship-based engagement. With all the technology and business developments, Amber Premium is able to sustain stability across market cycles, distinguishing itself from retail-driven platforms through our institutional-grade infrastructure and a diversified, compliant first operating model. Here's how we achieve resilience. First, institutional client base anchor in our long-term strategies, our focus on high net worth individuals and institutions who prioritize long-term asset allocation over speculative trading reduces exposure to short-term volatility. Second, diversify revenue model beyond trading volumes. Online platforms relying on transaction fees, Amber Premium's revenue streams are diversified, offering products that meet different risk preferences across different market cycle. Third, regulatory and operational excellence. Headquartered in Singapore and with additional presence in other major global financial hubs, we adhere to highest KYC standards and maintain institutional-grade custody. These measures mitigate security risks and help with asset protection even during high volatility periods. Now, turning to our outlook for 2025. I will share the priorities and growth initiatives we are focused on, as we move forward. We are focused on executing our growth strategy across several dimensions. Following the completion of the merger in March 2025, Amber International is executing a focused strategy to strengthen its leadership in institutional crypto finance. The company is enhancing its compliance-first, scalable platform to better serve the evolving needs of institutions and high-net-worth individuals globally. Strategic priorities for 2025 include expansion into tokenization of real-world assets, enhancement of our institutional-grade product suite and the rollout of a refined go-to-market strategy across core financial hubs. These efforts are supported by a broadened geographic footprint with a particular focus on regulated markets in Asia and the Middle East. As previously announced, Sparrow Tech Private Limited, a major payment institution licensed under the Payment Service Act by the Monetary Authority of Singapore, has recently integrated into Amber International, following the approval from the Monetary Authority of Singapore, a milestone in executing our strategic priorities. Effective April 30, 2025, Sparrow will operate under the new brand name Amber Premium Singapore, further reinforcing the company's regulated presence in Asia. In conclusion, fiscal year 2024 has been transformative for Amber International Holdings Limited. Our successful merger and NASDAQ listing, combined with our growing client base and asset under management, position us well for continued success. Legacy infrastructure from iClick has enabled a smooth transition to public markets, and Amber International is now entering the next phase with clarity and strategic focus. We remain committed to our mission of connecting CHAP5 and B5 with institutional-grade solutions, empowering institutions and high-net-worth individuals with seamless access to digital assets. As a NASDAQ-listed company, we'll continue to deliver reliable trading technology, risk management, and scalable infrastructure to accelerate crypto adoption. I would like to once again thank our shareholders, clients, and employees for their support. We look forward to continuing our journey as a public company and delivering long-term value to all our stakeholders. With that, let me hand the call over to our CFO, Josephine Ngai, who will walk you through our financial results for fiscal year 2024 in more detail.

Thank you, Wayne, and good morning, everyone. I'm Josephine Ngai, CFO of Amber International Holdings Limited, and I'm pleased to walk you through our financial results for the fiscal year through 2024. As Wayne mentioned, 2024 was a pivotal year of strategic realignment and operational transformations for our company. While our financial results reflect the impact of non-recurring restructuring and transactions-related expenses, we entered 2025 with a more focused operating model and a strengthened foundation for growth. Let me begin by discussing the allotted financial results of our legacy business for the year-end December 31, 2024. As a reminder, these results reflect the financial performance of our marketing solutions and enterprise solutions business, which were part of iClick Interactive Asia Group Limited, prior to the merger with Amber DWM Holdings Limited. As mentioned earlier, the numbers I will be sharing today are for our legacy operations only. They do not include any financial contributions from Amber DWM, as the merger was completed after year-end in March 2025. The consolidated results, including Amber DWM, will be reflected starting in our first quarter 2025 reporting. We are excited to share those updates with you in the next earnings cycle, so please stay tuned. For the full year of 2024, total revenue from continual operations was $32.8 million, compared with $36.1 million for the full year of 2023, representing a 9% decrease. This decrease was primarily due to clients' tightened advertising budget in our Marketing Solutions segment, caused by the macroeconomic uncertainty. By breaking down our revenue into business segments, the revenue from Marketing Solutions decreased by 13% year-over-year to $23.5 million. The revenue from enterprise solutions increased by 3% year-over-year to $9.3 million, driven by increasing demand from digital transformation and services. Gross profit for the full year was $16.7 million, compared with $19.1 million in 2023. Our gross profit margin maintained relatively stable at 51% for 2024, compared with 52.9% for 2023. Total operating expenses were $34.1 million in 2024, compared with $13.7 million in 2023. The increase was primarily due to non-recurring consultancy, legal and other professional service fee related to our restructuring and merger preparation. However, it was partially offset by our tightened cost controls, which result in reduced staff costs and saving on promotion expenses, as well as the decline in impairment of long line assets. Other losses, net, were $7.2 million in 2024, compared to $2.3 million in 2023. This increase was mainly due to impairment losses on our long-term investments, non-recurring losses on restructuring and exchange losses, partially offset by the gain from the disposal of discontinued operations. As a result, we report a net loss from continuing operations of $24 million in 2024, compared with a net loss of $30.7 million in 2023. For our discontinued operations, we record a net loss of $5.1 million in [indiscernible]

Ladies and gentlemen, please stand by. We're experiencing technical difficulties. We'll resume momentarily. Once again, thank you for joining us. Please stand by. We'll resume momentarily. Thank you.

Hello. Sorry, everyone, there's a telecom issue right now, so our CFO, Josephine, will continue from where she stopped.

Okay, thank you, Terence. Let me continue my presentation. For our discontinued operations, we record a net loss of $5.1 million in 2024, a significant improvement from the net loss of $25.2 million in 2023. This improvement was primarily due to the deconsolidation of loss-making operations borrowing their disposal, as well as a gain on disposals of $2.6 million. Turning to our balance sheet, as of December 31, 2024, we had cash and cash equivalents, time deposits, and restricted cash of $19.6 million, compared with $41.3 million as of December 31, 2023. The company repaid bank borrowing net of US$35 million for the restructuring in 2024. Total assets were $49.6 million as of December 31, 2024, compared to $163.7 million as of December 31, 2023. Total liabilities were $35.2 million as of December 31, 2024, compared to $122.5 million as of December 31, 2023. Below are the summary of performing financial figures of Amber DWM for the first half, second half, and full year of 2024 that have been considered by the Board of Directors of the company before closing the merger. The revenue of Amber DWM increased from $19 million in first half to $23 million in second half of 2024. Total full year's revenue was recorded at $42 million. The gross profit increased from $12 million to $14.6 million, which comes up with a full year gross profit of $26 million. The operating profit also increased from $1 million to $4 million to make up to $5.1 million for the full year of 2024. Once again, the above financial figures represent our projections prior to the consolidation of Amber DWM. You can expect to see the full combined financial picture starting from our first quarter 2025 results. As mentioned by our CEO, Wayne, on March 12, 2025, we successfully completed our merger, and Amber International Holding Limited American Depository share began trading under the new ticker symbol, AMBR, on the Nasdaq effective from March 13, 2025. The legacy business provides key operational advantages that enable its move transactions to profit market with DNN. This includes a mature reporting infrastructure, internal governance capabilities and a full SEC compliance public companies’ platform, which is critical element that helped to risk our public demand. With discontinued operation largely wound down and legacy liabilities adjusted by the end of 2024, we enter our next phase with clarity and strategic focus. Looking ahead to 2025, we remain confident in the long-term opportunity in the digital asset space. Bolstered by the recent approval from Amber International's Board of Director for a crypto treasury investment, we have authorized a strategic $10 million crypto reserve building up, leveraging our combined cash reserve as part of a forward-thinking treasury management strategy. This reserve is a strategic treasury management decision, balancing innovations with fiscal responsibility. By diversifying into crypto assets, we aim to enhance long-term shareholder value, while maintaining robust liquidity to support our operation. Finally, I would like to share our financial priority for 2025, which include we want to optimize our capital structure to support Amber Premium growth initiatives in preventing disciplined cost management across all business functions, enhancing our financial reporting system to provide transparent insights into our new business model and maintaining strong liquidity and balance sheet flexibility to capitalize on strategic opportunities. As we operate our new business model under the Amber Premium brand, we are focused on building a scalable financial foundation that supports sustainable growth and creates long-term shareholder value. With that, I will now turn the call back to Terence for closing remarks. Thank you.

Thank you, Wayne and thank you, Josephine. That concludes our prepared remarks for today. Thank you for all joining us on the call. Before we open the line for questions, I would like to mention that you can find additional information in our Investors presentation, which has been posted on our Investor Relations website at ir.ambr.io. We will now be happy to answer any questions you might have. Operator, please open the line for Q&A.

Thank you. [Operator Instructions]. And our first question comes from the line of Brian Kinstl inger with Alliance Global. Please proceed with your question.

Hi, this is Kevin for Brian. Thanks for taking our questions. Could you share what your three largest revenue sources are and what their percentage of total revenue was for Amber Group in 2024?

Thank you, Kevin. And maybe Wayne could explain a little bit about the source of revenues, and Josephine can add on a bit of color on a ballpark percentage, if we could. Wayne, please.

Yeah. So, our main offerings are in three key segments. The first one is execution solutions, which we help clients execute the transactions and execute their orders through centralized, decentralized exchanges and OTC markets. The second segment is wealth management solutions, which we aggregate yield and combine with option structures to enhance their crypto holding yields. The third segment is the payment solution, where we offer compliance solutions for fiat to crypto, crypto to fiat conversion, as well as card payments through the Amber Premium crypto card. So those are the three main revenue segments that we are currently operating with.

Okay, thank you, Wayne. For the trading and execution service, it will be around 20% to 30% of our total revenue mix. And the rest will be the wealth management products and the payment solutions. For more detail, maybe we can look forward to our first quarter results in 2025. Thank you.

And just another question. With the majority of your revenue coming from Dubai, what changes when your platform gets its Dubai license? And do you think attracting customers becomes easier?

So, we operate on a global basis. I think we have not yet touched into the local presence into the Middle East. And with the official license, hopefully, when we get the official license in Dubai, we'll be able to tap into the local client segment, local high networks and institutions in Middle East, so that would expand our client base and our target client addressable market. So that would change some of our resource and strategic focus in Middle East. With that, right now we are more on a global basis. Yeah, that's basically how that answers your question.

Yes. Thank you. And then could you describe the competitive landscape in your key markets, including Dubai, Hong Kong and Singapore?

So, I think we are operating a very unique business model. So, if you look at the three different business lines that we have, I'm sure there are competitors in each business line, but combined, we serve a full lifecycle for institutions and high net worth demands in crypto asset. So, I don't see much direct competitor in the business model that we operate at, especially in Asia. While I think the, in terms of other, in each of the business segments, you can find competitors or you can find similar offerings in the region. With that said, I believe our listing status actually set us aside from the rest of the competition, where we are offering a more transparent and better governance, better disclosure business to our partners in the crypto space.

Yes. Just to echo on what Wayne has said, I think we have been unique and in different segments we do have faced different, I would say, different sort of competition as Wayne just mentioned, and the exchange will be one and some more traditional Trad fry players also maybe trying to tap into this space. But obviously, we stand at a really strong position with our infrastructure and all the expertise that we build on. So, I guess, we are pretty much positioned and well-positioned to counter these competitions.

Great. Thank you. And just one last question. How is your business differentiated from some of the larger platforms, the more of the well-known platforms in North America?

So, I believe, most of the platforms are good, especially crypto platforms are mostly exchanges and they are more retail-driven. And for us, again, our business model is unique. We focus on institutions and high net worth’s only. And the demand for this client segment is very much different from what retail would, retail users would like. So, for example, the investment or wealth management products are pretty much, mainly catered towards institutions and high net worth clients, where in retail side of things, I think the retail users, they are most likely more speculative. They look for higher volatility opportunities. They look for a more trading-centric or speculative-centric features, where the institutions and our high-net-worth of client base are not very keen about. So, I guess, we'll have a different focus and with different resources, focusing on developing the key features towards our client segment. In general, over a time period will set us aside from the more retail-driven platforms.

And just to add on, I think The U.S. customer and Asian customers are quite different, in terms of their service level and important offerings that we acquired. In a part of the world, most of the high-level of institutions that we are serving basically will require certain level of services. And so. it's not liked a pure technology model. In some extent, I think our Amber Premium has well-positioned to tackle the Asian growth in terms of high net worth and institutions' adoption of cryptos in this kind of demand. I hope this makes sense.

Mr. Li, there are no additional questions on the phone at this time. Do we have any submitted questions?

There's online questions to talk about, in terms of our mergers, is there any lock-up in terms of share that issues? And I think this we have published in terms of our M&A agreements to the market that there is a one-year lock-up after the merger. Yeah. And on that, I think there's no more questions on that as well. Yeah.

Mr. Li, there are no additional questions over the phone either. [Indiscernible]

Yeah, then I think, thank you all for your questions and for joining us today. I think we could close it. As we have discussed it 2024 was a transformative year for our company, culminating a successful merger and NASDAQ listing in March, 2025. As Amber International Holding Limited, operating under the Amber premium brand, we're well-positioned to capitalize on the growing institutional demand for digital assets wealth management services. We look forward to updating you on our progress in the coming quarters. If you have any additional questions, please don't hesitate to contact our Investor Relations team. This concludes today's call. You may now disconnect.

Thank you. Mr. Li, today's call has -- this concludes today's call. You may now disconnect your lines. Thank you for your participation.