By Lisa Thompson
OTC: CLPMF
READ THE FULL CLPMF RESEARCH REPORT
Clip Money (OTC: CLPMF) reported an impressive Q1 with gross margins popping to 22% from 9% in Q4 and negative 4% in last year’s quarter. The gross margin increased because of improved transaction economics and the distribution of volumes more broadly across the network. We expect the gross margin to increase sequentially to reach 30% by Q4, and ultimately end up at around 40-50%. Higher margins are also decreasing the cash burn. In Q1, the company only used $900,000 versus $1.1 million last year and $1 million in Q4 (despite higher revenues). We expect that Clip Money will need only one more cash raise of approximately $2-3 million to reach cash flow break-even, which is on track for Q1 2027, if not sooner. After that, the company will increase its sales to more aggressively scale and start to pay down debt. Thus far, to manage cash burn and minimize shareholder dilution, management has leveraged channel partners to support sales and marketing efforts.
As exciting as the improved profitability is, another milestone is that Clip Money went live with its first bank customer. This bank has a handful of commercial customers using the Clip Network to facilitate deposits for the bank in locations where the bank does not have a branch. The bank is a sales channel and commercial partner to bring more businesses into the Clip Money network.
Clip Money had 4,493 customer locations at the end of Q1 compared to 4,438 customer locations at year’s end. Key existing clients, including Hot Topic, Genesco, Dry Goods, Lids, Miss A, and Pac Sun, increased their locations. Additionally, in the quarter, a new, unannounced, and unnamed national retailer with over 400 total locations was onboarded.
The company ended the quarter with 536 ClipDrops installed, up from 473 last year, adding a net of 63 boxes. This brings the total to over 8,100 locations, including Green Dot and ATMs where customers can use Clip Money services.
Clip Money’s revenues grew 143% in 2025 and should grow over 90% in 2026. It is already at a $7.1 million revenue run rate and has been ramping revenues as it adds customers and expands its network. The company trades at a $14.0 million market cap and a $30.4 million enterprise value. We expect revenues to reach or exceed $11 million in 2026 and $16 million in 2027. At a growth rate of 92% this year and 50% next, we believe the company is worth at least 3.0 times 2027 revenues or $0.30 per share.
SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR.
DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives payments totaling a maximum fee of up to $50,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.