In This Article:
OTC:INXDF
READ THE FULL INXDF RESEARCH REPORT
INX (OTC:INXDF) is a company that provides regulated trading platforms for digital securities and cryptocurrencies and that we believe has an excellent chance to grow market share due to its regulatory structure and prudent management. The company reported 3Q earnings, the highlights of which follow:
• Operating cash and cash equivalents remained solid at approximately $12.8 million, with an additional $9.4 million in short and intermediate-term Treasuries.
• Revenue through 3Q was up 28% over revenue over the same time period a year ago.
• The company announced that new customer registrations increased 50.1% compared to last quarter.
• Customer funds held by INX Digital increased 36% compared to 1Q2023.
• 3Q earnings came in at -$0.06 per share, an improvement from the -$0.08 per share loss in the last quarter.
The total market opportunity for INX in the growing cryptocurrency trading market is expected to grow to between $5-11 billion, depending on the cryptocurrency research firm you look at, by 2030. We view the 3Q earnings release as evidence that the INX strategy of having a regulated environment to trade and hold these instruments, as well as becoming a leader in the issuing of security tokens, is gaining traction. We believe the tighter credit condition companies are facing and the growing comfort with digital asset will combine to further the growth in assets traded on INX and provide accelerating opportunity for revenue growth.
We also continue to follow and want to remind investors of the INX announcement that Republic Group, described as “a global financial firm operating a digital merchant bank and a network of investment platforms. The company noted the 3Q marked a “significant milestone, in the expansion of technology stack and infrastructure needed to fully integrate and list the Republic security token as well as future tokens from Republic’s portfolio of companies.
We continue to believe this collaboration will benefit INX and are pleased to see great progress being made in the integration process, but we do have the note the company has to pay 75% of the net revenues of the new issuers gained from Republic to Republic—a reasonable agreement in our view.
INX continues to be a responsible and ethical beacon in the often shady digital world and we believe the investment in the company by Republic, combined with potential business impact from recent events, makes INXDF a very attractive investment alternative for investors with a modestly higher risk tolerance.