CompoSecure (NASDAQ: CMPO) manufactures a unique customized and secure metal payment card which is utilized by a wide variety of financial institutions including JP Morgan-Sapphire Preferred and Reserve, American Express-Delta Reserve, CapitalOne-Venture X, Robinhood -Gold, Lloyds Bank– Visa, Citibanamex-Mexico, TP Bank-Vietnam, Rogers bank-Canada, American Express Bradesco-Brazil, and Atlas-US. The company has produced over 144 million metal payment cards since 2010, shipped 30 million in 2022 alone and has been issued 53 patents.
This calendar year’s revenue guidance midpoint is $418 million and $152 million in adjusted EBITDA. 85% of the top line is domestic and for the last several quarters has been posting strong results, though international has been uneven. Management is confident enough in their current financial position and outlook to declare a special one time dividend.
The company’s metal payment card capabilities include their branded Arculus platform which enables hardware-bound passkey authenticator, secure login from any iPhone, Android or FIDO2 system, new on-boarding device authentication, call center support, secure account, and preventative measures to block hackers from gaining access to banking or social media apps. Arculus also incorporates a crypto and NFT hardware cold storage wallet, advanced three-factor authentication (biometric, PIN, and tapping card), and the ability to securely store, send, and receive digital assets via user friendly mobile application, leveraging a secure element with NFC connectivity (no battery charge required). As the features mentioned above indicate, these cards are multi-functional, may be used as a credit or debit card, authenticate physical access to a consumer’s phone, and make it easy to use at the retail point of sale with far more options than legacy payment card mediums.
We are intrigued by this unusual company with its impressive margins, cashflow, and cutting-edge innovation with regard to its combined digital-asset security and payment functionality.
