According to research from ATMIA and RBR, there are about 520,000 traditional ATMs in the U.S. as compared to approximately 30,000 Bitcoin ATMs based on data from Coin ATM Radar.
As the most recent earnings report from the leading Bitcoin ATM company reveals, bitcoin ATMs can be lucrative businesses — ones that might provide investors with an overlooked opportunity.
This is a guest post from Second Gate Advisory Cofounder Brandon Bailey. Nothing in this article constitutes investment advice.
Bitcoin Depot is the largest Bitcoin ATM operator in North America with over 8,400 kiosks across the U.S., Canada, Puerto Rico and Australia. Bitcoin Depot’s kiosks allow customers to purchase Bitcoin with cash or online via debit and credit cards directly to a user’s bitcoin wallet. To ensure compliance and security, the company is registered as a money services business with FinCen and is a licensed money transmitter in the jurisdictions in which it operates. The company was founded in 2016 by Brandon Mintz who continues to serve as President and CEO.
The company has successfully established extensive retail partnerships to support its deployment of kiosks. The company actively partners with major convenience store chains, leading retail outlets, specialty retailers and gas station chains for the deployment of its kiosks. One of the company’s strategic relationships is with Circle K, where the company is currently operating over 900 kiosks across the US and Canada.
Historically, Bitcoin Depot’s transaction volumes exhibit limited correlation with bitcoin price fluctuations as customers of these kiosks are typically buying bitcoin for non-speculative uses such as remittances.
Bitcoin Depot also offers BDCheckout which is an in-store solution that allows customers to purchase bitcoin using cash at participating retail registers with no ATM or online exchange required. BDCheckout is currently available in over 7,700 stores across 31 states.
According to research from ATMIA and RBR there are about 520,000 traditional ATMs in the U.S. as compared to approximately 30,000 Bitcoin ATMs based on data from Coin ATM Radar.
Bitcoin Depot financial highlights
Bitcoin Depot had an incredibly strong first quarter with a reported Q1 revenue of $164.2 million up 19% year-over-year, as well as a significant improvement in net income of $12.2 million. Bitcoin Depot earned just $16 million of net income for FY 2024. The company generated adjusted gross profit of $33.1 million, up 92% year-over-year, and adjusted EBITDA of $20.3 million, up 315% year-over-year. Q1 adjusted EBITDA represents 54% of FY 2024 adjusted EBTIDA. The company also generated $16.3 million in cash from operations and $15.9 million in free cash flow for the quarter.
Last 4 Quarter Revenue Trend
Last 4 Quarter Net Revenue and Margins
Last 4 Quarter Adjusted EBITDA
Last 4 Quarter Net Income
Last 4 Quarter Free Cash Flow
Bitcoin Depot investment highlights
Bitcoin Depot’s strong free cash flow provides optionality for shareholder value creation.
Bitcoin Depot’s significant free cash flow generation from its core business allows it to accumulate Bitcoin without shareholder dilution, which is highly accretive for shareholders and a key differentiator when we compare Bitcoin Depot to bitcoin treasury companies. During the quarter, the company acquired 94.4 bitcoin with free cash flow, resulting in a quarter end sats per share of 147 sats.
On June 13, the company announced the acquisition of additional bitcoin that now places its total bitcoin holdings over 100 BTC.
Notably the company does not anticipate a need for significant CAPEX with respect to kiosk acquisition due to having approximately 2,314 machines in storage that can be deployed as opportunities become available.
Looking at the run rate from Q1’s free cash flow, the company could acquire anywhere from 50 – 100 BTC per quarter while only using 40 – 70% of its free cash flow.
Capital allocation optionality
Outside of bitcoin accumulation, the company’s free cash flow generation from its core business affords it other strategic optionality for delivering shareholder value. The company can buy back shares if it believes it is currently undervalued in the market. It can also issue a special dividend or de-levering its balance sheet and improve its capital structure. Additionally, Bitcoin Depot can be opportunistic with M&A as there are several small private bitcoin ATM operators that can allow for scale and growth in new markets.
Bitcoin Depot UP-C structure dissolution
On May 30th, 2025, the company announced that it has simplified its organizational and capital structure by eliminating its Up-C restructuring. The significance of this is that the company will now wholly own its principal operating subsidiaries, which enhances transparency and should make it easier for investors and research analysts to understand the corporate profile of the business.
Most importantly the Up-C Restructuring extinguishes a $2.2 million tax receivable agreement liability and will lead to additional long-term savings as it will reduce the company’s cash tax rate by an estimated 12%. This move should provide for additional free cash flow uplift and improve market liquidity as well as broader investor appeal.
Bitcoin Depot has attractive unit economics for bitcoin ATMs
Bitcoin ATMs cost on average between $4,000 – $6,000 per unit depending on the type of machine and the manufacturer. Comparatively, the newest generation AISCs cost about $4,860 ($18 per TH) to $6,480 ($24 per TH).
Based on Bitcoin Depot’s financial performance, their ATMs have an average daily revenue of $212. Compare that to an S21 XP’s bitcoin mining revenue over the same time period of $14 per day. Based on Bitcoin Depot’s historical financial performance, they achieved net revenue of $43 per day per machine, versus an S21 XP’s net revenue of $11 during the same time period in Q1 2025 (assuming a power cost of $0.035 per kWh, which is at the low end of the range for mining).
Bitcoin ATMs have been able to achieve a faster payback period when historically compared to the most efficient bitcoin mining machines. This is largely due to the fact that bitcoin ATMs don’t have their revenue impaired by something like bitcoin mining’s difficulty adjustment, which makes it more challenging to mine bitcoin as more miners join the network and hashrate increases. Because bitcoin ATM operators do not have to worry about a mechanism like the difficulty adjustment, the economic useful life of a bitcoin ATM exceeds that of an ASIC, reducing the required CAPEX to maintain cash flow and grow the business.
Bitcoin Depot growth and expansion opportunities
Bitcoin Depot currently operates kiosks across 48 U.S. states, 10 Canadian provinces, Puerto Rico, and Australia. The company has applied for the license required to operate in New York city, which it believes can support as many as 2,000 kiosks, representing ~24% of its current operating fleet. Bitcoin Depot is the largest bitcoin ATM operator in the world with a concentration of ATMs specifically inside the United States. Greater than 90% of its current fleet is domiciled in the U.S., however international markets pose a material opportunity for additional upside and fill a need for remittance services.
Canada and Australia are two markets where Bitcoin Depot have additional room for growth given their small market penetration to date. Acquisitions of small private operators with existing licenses in international markets could prove to be advantageous for the company providing both scale and speed to new markets.
Business seasonality
Historically, Q2 has been the most profitable quarter for Bitcoin Depot, and the company has guided single digit revenue growth from Q1 2025, which would imply a range between $172 million – $180 million (roughly 5% – 10% year-over-year).
Deployment of machines in storage
The company currently has 2,314 ATMs in storage that are ready for immediate deployment which represents about 21.4% of its total owned fleet. This enables Bitcoin Depot to grow revenue without needing additional CAPEX. Bitcoin Depot can leverage these machines to expand into new markets, sell them through their franchise program where they earn a profit share, or partner with a new vendor for deployment.
Volume ramp for recently deployed machines
The company has over 3,000 machines that have been plugged in for less than a year. Historically, the company has seen meaningful increases in transaction volume as machines stabilize and as marketing and SEO spend catches on with respect to the ATMs location. This can provide an additional tailwind to revenue growth in the quarters ahead.
Genius Act and stablecoins
The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS Act) could accelerate the adoption of stablecoins for payments in the U.S. Bitcoin Depot’s ATMs can provide access for customers to convert cash into stablecoins that trade directly on bitcoin rails. This would serve as a new market opportunity for Bitcoin Depot that could expand volumes and frequency of transactions at its kiosks and through BDCheckout.
Strategic M&A and scalability via equity leverage
Since reporting its Q1 2025 earnings, Bitcoin Depot’s stock has appreciated 197% and is currently trading at a ~5.5x EBITDA multiple. The recent uplift in Bitcoin Depot’s share price in tandem with its removal of the Up-C structure provides the company with a lot more leverage to be opportunistic with its stock. The company could raise capital via equity to make strategic acquisitions of smaller private ATM operators that already have licenses to operate in new jurisdictions, which could help to expedite Bitcoin Depot’s time to market while expanding their fleet size. Given Bitcoin Depot’s software stack and compliance management strengths, the company can easily integrate new ATMs into their fleet with relative ease.
On June 11, the company announced that it had acquired the assets of a private US based Bitcoin ATM operator, Pelicoin, LLC for an undisclosed amount. The acquisition will add new kiosks in locations across Louisiana, Mississippi, Tennessee, Alabama, and Texas.
Bitcoin Depot’s competitor and the second largest Bitcoin ATM operator, Coin Flip recently announced that it is exploring a sale for a targeted valuation of $1 billion. If Coin Flip is able to achieve that sale price or anywhere near their target, it would imply significant undervaluation of Bitcoin Depot as its market cap is only $400 million as of June 13th, 2025, even after it has appreciated 197% since its Q1 earnings.
Risks and considerations
Dilutive instruments
Bitcoin Depot has a series of warrants and SPAC-related instruments that in culmination could double the outstanding number of shares. These instruments have strike prices ranging from $11.50-$12 which is well above the current stock price of $6.47 as of June 16. The stock would have to nearly double before these dilutive instruments became relevant.
With approximately 43.8 million of warrants outstanding, it is likely that only a fraction of them will be exercised. And in the event that investors do exercise the warrants, the company will receive a cash injection at the strike price of $11.50 per share resulting in total potential proceeds of approximately $504 million.
Margin risks
Bitcoin Depot’s markup on fees through its kiosk average around the 20-25% range, which is considerably high relative to the transaction fees associated with digital currency exchanges. As there is less usage of physical cash in the economy and things become increasingly digitized, margins may compress and volumes may decline. International expansion where cash is still more heavily used may be able to offset some margin compression or loss in volume from US centric markets in the event that cash becomes increasingly less prevalent. There is an element of a scarcity premium that exists with bitcoin ATMs as they are the only way to convert physical cash immediately into bitcoin and receive that bitcoin into a self-custodial wallet as opposed to an exchange account.
According to a report produced by the FDIC in 2023, 4.2% (or 5.6 million) of U.S. households were unbanked and among those households, two-thirds relied solely on cash for financial transactions. Bitcoin ATMs play a key role as an on-ramp to the digital economy for the unbanked.
Regulatory risks
Certain states such as California have taken more hostile approaches with respect to Bitcoin ATMs and ATM operators increasing compliance costs and making it more challenging to do business. Other states where Bitcoin Depot operates could increase regulation, which would increase compliance cost and potentially reduce volumes at Bitcoin Depot kiosks. However, the company has the ability to move and relocate machines to new locations or jurisdictions in the event that a state becomes hostile towards Bitcoin ATM operators.
Bitcoin Depot valuation considerations
Despite the recent run-up in the stock’s price, as of the market closing price of $6.22 June 13th, 2025, the company is only trading at ~3.2x FY 2025 net revenue of $126 million, 5.5x FY 2025 adjusted EBITDA of $73 million, and 6.6x annualized Q1 free cash flow, which highlights how undervalued the stock was previously. Bitcoin mining companies trade in a range of 4.0x – 6.0x revenue, and given the unit economics of Bitcoin Depot’s ATMs, they should trade at similar multiples based on net revenue.
At 6.0x FY 2025 estimated net revenue Bitcoin Depot’s implied market cap would be $758million or $11.80 per share, which implies 90% upside from its market closing price of $6.22 on June 13, 2025.
Bitcoin Depot vs. Selection of Public Bitcoin Miners Based on Q1 Revenue and Adj. EBITDA (Market Data as 6/13/2025)
Bitcoin Depot Trading Multiples Sensitivity Analysis
Financial Projection
Disclaimer
This report is for informational purposes only and does not constitute investment advice, financial advice, trading advice, or any other sort of recommendation. The information provided herein is based on publicly available sources believed to be reliable at the time of writing, but no representation or warranty is made as to its accuracy, completeness, or timeliness. Any opinions or projections expressed are subject to change without notice. You should not rely solely on this information when making investment decisions. Please consult a licensed financial advisor before making any financial decisions. The author holds a long position in Bitcoin Depot at the time of writing this report.
