Paysafe Reports Fourth Quarter and Full Year 2022 Results; Provides 2023 Outlook
Paysafe Limited (NYSE: PSFE) reported its fourth quarter and full year 2022 financial results, highlighting a 3% increase in revenue to $383.6 million for Q4 and a 1% increase to $1,496.1 million for the full year. Total Payment Volume rose 5% year-over-year, reaching $33.1 billion in Q4 and 6% to $130.1 billion for 2022. However, the company incurred a net loss of $33.7 million in Q4, compared to a net income of $90.3 million the previous year, and a full-year net loss of $1.9 billion, primarily due to non-cash impairment charges. Adjusted EBITDA for Q4 stood at $107.6 million, a 2% increase.
- Total Payment Volume increased 5% in Q4 to $33.1 billion.
- Revenue increased 3% in Q4 to $383.6 million, and 1% for the full year to $1,496.1 million.
- Merchant Solutions revenue grew 10% year-over-year in Q4.
- Adjusted EBITDA for Q4 was $107.6 million, a 2% increase.
- Net loss of $33.7 million in Q4 compared to net income of $90.3 million last year.
- Full-year net loss of $1.9 billion due to non-cash impairment charges.
- Adjusted EBITDA decreased by 8% to $410.0 million for the full year.
Fourth Quarter 2022 Financial Highlights
(Metrics compared to fourth quarter of 2021)
-
Total Payment Volume of
*, increased$33.1 billion 5% -
Revenue of
, increased$383.6 million 3% ; increased8% on a constant currency basis -
Net loss attributable to the Company of
, compared to net income attributable to the Company of$33.7 million $90.3 million -
Adjusted net income of
, compared to$33.1 million $52.2 million -
Adjusted EBITDA of
, increased$107.6 million 2% ; increased6% on a constant currency basis
Full Year 2022 Financial Highlights
(Metrics compared to full year 2021)
-
Total Payment Volume of
*, increased$130.1 billion 6% -
Revenue of
, increased$1,496.1 million 1% ; increased5% on a constant currency basis -
Net loss attributable to the Company of
and inclusive of non-cash impairment charges of$1.9 billion in 2022, compared to$1.9 billion $111.0 million -
Adjusted net income of
, compared to adjusted net income of$137.0 million $185.8 million -
Adjusted EBITDA of
, decreased$410.0 million 8% ; decreased3% on a constant currency basis
Recent Strategic and Operational Highlights
- Completed 1-for-12 reverse stock split of the Company's common shares
-
Constant currency revenue growth of
9% year-over-year in the second half of 2022 (3% reported basis) -
Expanded into the new
Ohio online sports betting market –Paysafe now powers payments for iGaming operators across 25 U.S. states or jurisdictions -
Announced a new partnership with
Virgin Voyages to streamline online payments -
Expanded relationship with Microsoft, bringing
Paysafe's eCash solution to theU.S. and eight countries inEurope ; collaboration now spans 31 countries
* Volumes exclude embedded wallet related volumes of
Changes to Segment Names and Reporting Structure
As previously announced,
-
Merchant Solutions (renamed from US Acquiring) continues to include the Company's US Acquiring business and now also includes the integrated & eCommerce (IES) business.
- IES was previously included within Digital Commerce.
- Digital Wallets (renamed from Digital Commerce) continues to include the Company's digital wallets and eCash businesses.
The recast of certain historical financials are available within the materials accompanying this press release.
Fourth Quarter and Full Year 2022 Summary of Consolidated Results
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
($ in thousands) (unaudited) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Revenue |
|
$ |
383,568 |
|
|
$ |
371,661 |
|
|
$ |
1,496,137 |
|
|
$ |
1,487,013 |
|
Gross Profit (excluding depreciation and amortization) |
|
$ |
227,443 |
|
|
$ |
223,550 |
|
|
$ |
882,112 |
|
|
$ |
887,235 |
|
Net (loss) / income attributable to the Company |
|
$ |
(33,711 |
) |
|
$ |
90,296 |
|
|
$ |
(1,862,655 |
) |
|
$ |
(110,954 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA |
|
$ |
107,561 |
|
|
$ |
105,459 |
|
|
$ |
409,951 |
|
|
$ |
443,898 |
|
Adjusted EBITDA margin |
|
|
28.0 |
% |
|
|
28.4 |
% |
|
|
27.4 |
% |
|
|
29.9 |
% |
Adjusted net income attributable to the Company |
|
$ |
33,089 |
|
|
$ |
52,196 |
|
|
$ |
137,043 |
|
|
$ |
185,798 |
|
Fourth Quarter 2022 Results
Total revenue for the fourth quarter of 2022 was
Net loss attributable to the Company for the fourth quarter was
Adjusted EBITDA for the fourth quarter was
Adjusted net income for the fourth quarter was
Fourth quarter net cash used in operating activities was
Full Year 2022 Results
Total revenue for the full year 2022 was
Net loss attributable to the Company for the full year 2022 was
Adjusted EBITDA for the full year 2022 was
Adjusted net income for the full year 2022 was
Net cash from operating activities for 2022 was
Balance Sheet
As of
Summary of Segment Results
|
|
Three Months Ended |
|
|
|
|
|
Year Ended |
|
|
|
|
|
||||||||||||
|
|
|
|
|
YoY |
|
|
|
|
|
YoY |
|
|
||||||||||||
($ in thousands) (unaudited) |
|
2022 |
|
|
2021 |
|
|
change |
|
|
2022 |
|
|
2021 |
|
|
change |
|
|
||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Merchant Solutions |
|
$ |
208,505 |
|
|
$ |
190,323 |
|
|
|
9.6 |
% |
|
$ |
817,353 |
|
|
$ |
745,344 |
|
|
|
9.7 |
% |
|
Digital Wallets |
|
$ |
177,141 |
|
|
$ |
183,821 |
|
|
|
-3.6 |
% |
|
$ |
686,165 |
|
|
$ |
750,025 |
|
|
|
-8.5 |
% |
|
Intersegment |
|
$ |
(2,078 |
) |
|
$ |
(2,483 |
) |
|
|
-16.3 |
% |
|
$ |
(7,381 |
) |
|
$ |
(8,356 |
) |
|
|
-11.7 |
% |
|
Total Revenue |
|
$ |
383,568 |
|
|
$ |
371,661 |
|
|
|
3.2 |
% |
|
$ |
1,496,137 |
|
|
$ |
1,487,013 |
|
|
|
0.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Merchant Solutions |
|
$ |
51,022 |
|
|
$ |
51,755 |
|
|
|
-1.4 |
% |
|
$ |
200,304 |
|
|
$ |
186,878 |
|
|
|
7.2 |
% |
|
Digital Wallets |
|
$ |
77,127 |
|
|
$ |
80,009 |
|
|
|
-3.6 |
% |
|
$ |
289,413 |
|
|
$ |
332,090 |
|
|
|
-12.9 |
% |
|
Corporate |
|
$ |
(20,588 |
) |
|
$ |
(26,305 |
) |
|
|
21.7 |
% |
|
$ |
(79,766 |
) |
|
$ |
(75,070 |
) |
|
|
-6.3 |
% |
|
Total Adjusted EBITDA |
|
$ |
107,561 |
|
|
$ |
105,459 |
|
|
|
2.0 |
% |
|
$ |
409,951 |
|
|
$ |
443,898 |
|
|
|
-7.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA margin: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Merchant Solutions |
|
|
24.5 |
% |
|
|
27.2 |
% |
|
(270 bps) |
|
|
|
24.5 |
% |
|
|
25.1 |
% |
|
(60 bps) |
|
|
||
Digital Wallets |
|
|
43.5 |
% |
|
|
43.5 |
% |
|
(0 bps) |
|
|
|
42.2 |
% |
|
|
44.3 |
% |
|
(210 bps) |
|
|
||
Total Adjusted EBITDA margin |
|
|
28.0 |
% |
|
|
28.4 |
% |
|
(40 bps) |
|
|
|
27.4 |
% |
|
|
29.9 |
% |
|
(250 bps) |
|
|
||
Financial Guidance
For the first quarter and full year 2023,
($ in millions) (unaudited) |
|
Q1 2023 |
|
Full Year 2023 |
Revenue |
|
|
|
|
Adjusted EBITDA |
|
|
|
|
Webcast and Conference Call
Time |
|
Webcast |
Go to the Investor Relations section of the |
Dial in |
877-407-3037 ( |
As previously announced,
Reorganization and Recapitalization (the “Transaction”)
On
Basis of Presentation
The financial information for the year ended
About
Forward-looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Paysafe Limited’s (“Paysafe,” “PSFE” or the “Company”) actual results may differ from their expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “anticipate,” “appear,” “approximate,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “forecast,” “foresee,” “guidance,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “would” and variations of such words and similar expressions (or the negative version of such words or expressions) may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include, without limitation, Paysafe’s expectations with respect to future performance.
These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially, and potentially adversely, from those expressed or implied in the forward-looking statements. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: cyberattacks and security vulnerabilities; complying with and changes in money laundering regulations, financial services regulations, cryptocurrency regulations, consumer and business privacy and data use regulations or other regulations in
Paysafe Limited Condensed Consolidated Balance Sheets (unaudited)
($ in thousands) |
|
|
|
|
|
|
||
Assets |
|
|
|
|
|
|
||
Current assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
260,219 |
|
|
$ |
313,439 |
|
Customer accounts and other restricted cash, net of allowance for credit losses of |
|
|
1,866,976 |
|
|
|
1,658,279 |
|
Accounts receivable, net of allowance for credit losses of |
|
|
159,324 |
|
|
|
147,780 |
|
Settlement receivables, net of allowance for credit losses of |
|
|
147,774 |
|
|
|
149,852 |
|
Prepaid expenses and other current assets |
|
|
60,810 |
|
|
|
64,497 |
|
Related party receivables – current |
|
|
— |
|
|
|
6,492 |
|
Contingent consideration receivable – current |
|
|
— |
|
|
|
2,842 |
|
Total current assets |
|
|
2,495,103 |
|
|
|
2,343,181 |
|
Deferred tax assets |
|
|
104,538 |
|
|
|
21,926 |
|
Property, plant and equipment, net |
|
|
11,947 |
|
|
|
14,907 |
|
Operating lease right-of-use assets |
|
|
35,509 |
|
|
|
33,118 |
|
Derivative asset |
|
|
17,321 |
|
|
|
— |
|
Intangible assets, net |
|
|
1,291,458 |
|
|
|
1,202,204 |
|
|
|
|
1,999,132 |
|
|
|
3,650,037 |
|
Other assets – noncurrent |
|
|
2,048 |
|
|
|
1,856 |
|
Total non-current assets |
|
|
3,461,953 |
|
|
|
4,924,048 |
|
Total assets |
|
$ |
5,957,056 |
|
|
$ |
7,267,229 |
|
|
|
|
|
|
|
|
||
Liabilities and equity |
|
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
|
||
Accounts payable and other liabilities |
|
$ |
241,529 |
|
|
$ |
211,841 |
|
Short-term debt |
|
|
10,190 |
|
|
|
10,190 |
|
Funds payable and amounts due to customers |
|
|
1,997,867 |
|
|
|
1,400,057 |
|
Operating lease liabilities – current |
|
|
7,953 |
|
|
|
8,845 |
|
Income taxes payable |
|
|
11,325 |
|
|
|
11,041 |
|
Contingent and deferred consideration payable – current |
|
|
18,171 |
|
|
|
13,673 |
|
Liability for share-based compensation – current |
|
|
11,400 |
|
|
|
3,360 |
|
Total current liabilities |
|
|
2,298,435 |
|
|
|
1,659,007 |
|
Non-current debt |
|
|
2,633,269 |
|
|
|
2,748,178 |
|
Operating lease liabilities – non-current |
|
|
29,913 |
|
|
|
28,008 |
|
Deferred tax liabilities |
|
|
118,791 |
|
|
|
64,886 |
|
Warrant liabilities |
|
|
3,094 |
|
|
|
35,575 |
|
Liability for share-based compensation – non-current |
|
|
4,942 |
|
|
|
6,664 |
|
Contingent and deferred consideration payable – non-current |
|
|
8,975 |
|
|
|
17,142 |
|
Total non-current liabilities |
|
|
2,798,984 |
|
|
|
2,900,453 |
|
Total liabilities |
|
|
5,097,419 |
|
|
|
4,559,460 |
|
Commitments and contingent liabilities |
|
|
|
|
|
|
||
Shareholders' equity in the Company |
|
|
859,637 |
|
|
|
2,569,764 |
|
Non-controlling interest |
|
|
— |
|
|
|
138,005 |
|
Total shareholders' equity |
|
|
859,637 |
|
|
|
2,707,769 |
|
Total liabilities and shareholders' equity |
|
$ |
5,957,056 |
|
|
$ |
7,267,229 |
|
Paysafe Limited Condensed Consolidated Statements of Operations (unaudited)
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
($ in thousands) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Revenue |
|
$ |
383,568 |
|
|
$ |
371,661 |
|
|
$ |
1,496,137 |
|
|
$ |
1,487,013 |
|
Cost of services (excluding depreciation and amortization) |
|
|
156,125 |
|
|
|
148,111 |
|
|
|
614,025 |
|
|
|
599,778 |
|
Selling, general and administrative |
|
|
136,988 |
|
|
|
127,031 |
|
|
|
534,515 |
|
|
|
545,107 |
|
Depreciation and amortization |
|
|
67,723 |
|
|
|
63,964 |
|
|
|
266,819 |
|
|
|
261,372 |
|
Impairment expense on goodwill and intangible assets |
|
|
1,000 |
|
|
|
— |
|
|
|
1,887,223 |
|
|
|
324,145 |
|
Restructuring and other costs |
|
|
3,496 |
|
|
|
3,562 |
|
|
|
64,132 |
|
|
|
25,883 |
|
Loss on disposal of subsidiary and other assets, net |
|
|
— |
|
|
|
28 |
|
|
|
1,359 |
|
|
|
— |
|
Operating income / (loss) |
|
|
18,236 |
|
|
|
28,965 |
|
|
|
(1,871,936 |
) |
|
|
(269,272 |
) |
Other (expense) / income, net |
|
|
(14,085 |
) |
|
|
64,088 |
|
|
|
83,778 |
|
|
|
239,661 |
|
Interest expense, net |
|
|
(37,615 |
) |
|
|
(21,536 |
) |
|
|
(126,628 |
) |
|
|
(165,827 |
) |
(Loss) / income before taxes |
|
|
(33,464 |
) |
|
|
71,517 |
|
|
|
(1,914,786 |
) |
|
|
(195,438 |
) |
Income tax expense / (benefit) |
|
|
247 |
|
|
|
(19,005 |
) |
|
|
(52,502 |
) |
|
|
(85,110 |
) |
Net (loss) / income |
|
$ |
(33,711 |
) |
|
$ |
90,522 |
|
|
$ |
(1,862,284 |
) |
|
$ |
(110,328 |
) |
Less: net income attributable to non-controlling interest |
|
|
— |
|
|
|
226 |
|
|
|
371 |
|
|
|
626 |
|
Net (loss) / income attributable to the Company |
|
$ |
(33,711 |
) |
|
$ |
90,296 |
|
|
$ |
(1,862,655 |
) |
|
$ |
(110,954 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) / income per share attributable to the Company – basic |
|
$ |
(0.56 |
) |
|
$ |
1.50 |
|
|
$ |
(30.78 |
) |
|
$ |
(1.84 |
) |
Net (loss) / income per share attributable to the Company – diluted |
|
$ |
(0.56 |
) |
|
$ |
1.50 |
|
|
$ |
(30.78 |
) |
|
$ |
(1.84 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) / income |
|
$ |
(33,711 |
) |
|
$ |
90,522 |
|
|
$ |
(1,862,284 |
) |
|
$ |
(110,328 |
) |
Other comprehensive income / (loss), net of tax of |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain / (loss) on foreign currency translation |
|
|
21,409 |
|
|
|
738 |
|
|
|
(34,251 |
) |
|
|
(1,406 |
) |
Total comprehensive (loss) / gain |
|
$ |
(12,302 |
) |
|
$ |
91,260 |
|
|
$ |
(1,896,535 |
) |
|
$ |
(111,734 |
) |
Less: comprehensive income attributable to non-controlling interest |
|
|
— |
|
|
|
226 |
|
|
|
371 |
|
|
|
626 |
|
Total comprehensive (loss) / gain attributable to the Company |
|
$ |
(12,302 |
) |
|
$ |
91,034 |
|
|
$ |
(1,896,906 |
) |
|
$ |
(112,360 |
) |
Paysafe Limited Consolidated Net (loss) / income per share attributable to the Company
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||
|
|
|
|
|
|
||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Numerator ($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) / income attributable to the Company - basic |
$ |
(33,711 |
) |
|
$ |
90,296 |
|
|
$ |
(1,862,655 |
) |
|
$ |
(110,954 |
) |
Net (loss) / income attributable to the Company - diluted |
$ |
(33,711 |
) |
|
$ |
90,296 |
|
|
$ |
(1,862,655 |
) |
|
$ |
(110,954 |
) |
Denominator (in millions) |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares – basic |
|
60.7 |
|
|
|
60.3 |
|
|
|
60.5 |
|
|
|
60.3 |
|
Weighted average shares – diluted |
|
60.7 |
|
|
|
60.3 |
|
|
|
60.5 |
|
|
|
60.3 |
|
Net (loss) / income per share attributable to the Company |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
$ |
(0.56 |
) |
|
$ |
1.50 |
|
|
$ |
(30.78 |
) |
|
$ |
(1.84 |
) |
Diluted |
$ |
(0.56 |
) |
|
$ |
1.50 |
|
|
$ |
(30.78 |
) |
|
$ |
(1.84 |
) |
Paysafe Limited Condensed Consolidated Statements of Cash Flow (unaudited)
|
|
Year Ended |
|
|||||
|
|
|
|
|||||
($ in thousands) |
|
2022 |
|
|
2021 |
|
||
Cash flows from operating activities |
|
|
|
|
|
|
||
Net loss |
|
$ |
(1,862,284 |
) |
|
$ |
(110,328 |
) |
Adjustments for non-cash items: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
266,819 |
|
|
|
261,372 |
|
Unrealized foreign exchange (gain) / loss |
|
|
(44,157 |
) |
|
|
4,383 |
|
Deferred tax benefit |
|
|
(82,876 |
) |
|
|
(96,993 |
) |
Interest expense, net |
|
|
24,394 |
|
|
|
74,282 |
|
Share-based compensation |
|
|
62,354 |
|
|
|
101,770 |
|
Other income, net |
|
|
(45,489 |
) |
|
|
(232,539 |
) |
Impairment expense on goodwill and intangible assets |
|
|
1,887,223 |
|
|
|
324,145 |
|
Allowance for credit losses and other |
|
|
35,541 |
|
|
|
15,102 |
|
Loss on disposal of subsidiary and other assets, net |
|
|
1,359 |
|
|
|
— |
|
Non-cash lease expense |
|
|
7,034 |
|
|
|
9,523 |
|
Movements in working capital: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
(34,224 |
) |
|
|
(42,592 |
) |
Prepaid expenses, other current assets, and related party receivables |
|
|
(13,085 |
) |
|
|
3,456 |
|
Settlement receivables, net |
|
|
(11,978 |
) |
|
|
58,896 |
|
Accounts payable, other liabilities, and related party payables |
|
|
17,400 |
|
|
|
(25,733 |
) |
Funds payable and amounts due to customers |
|
|
698,855 |
|
|
|
(95,890 |
) |
Income tax payable / (receivable) |
|
|
17,192 |
|
|
|
(24,386 |
) |
Net cash flows from operating activities |
|
|
924,078 |
|
|
|
224,468 |
|
Cash flows in investing activities |
|
|
|
|
|
|
||
Purchase of property, plant & equipment |
|
|
(4,543 |
) |
|
|
(5,616 |
) |
Purchase of merchant portfolios |
|
|
(56,438 |
) |
|
|
(63,906 |
) |
Purchase of other intangible assets |
|
|
(89,065 |
) |
|
|
(78,227 |
) |
Acquisition of business, net of cash acquired |
|
|
(424,722 |
) |
|
|
(263,520 |
) |
Net cash outflow on disposal of subsidiary |
|
|
(826 |
) |
|
|
— |
|
Net cash flows used in investing activities |
|
|
(575,594 |
) |
|
|
(411,269 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
||
Cash settled equity awards |
|
|
(990 |
) |
|
|
— |
|
Repurchases of shares withheld for taxes |
|
|
(6,937 |
) |
|
|
— |
|
Proceeds from exercise of warrants |
|
|
3 |
|
|
|
— |
|
Net cash inflow from reorganization and recapitalization |
|
|
— |
|
|
|
1,167,874 |
|
Payment of equity issuance costs |
|
|
— |
|
|
|
(151,722 |
) |
Repurchase of borrowings |
|
|
(45,511 |
) |
|
|
|
|
Proceeds from loans and borrowings |
|
|
120,669 |
|
|
|
2,962,112 |
|
Repayments of loans and borrowings |
|
|
(148,919 |
) |
|
|
(3,433,206 |
) |
Cash outflow on foreign exchange forward contract |
|
|
— |
|
|
|
(6,504 |
) |
Payment of debt issuance costs |
|
|
(6,781 |
) |
|
|
(7,077 |
) |
Proceeds under line of credit |
|
|
796,600 |
|
|
|
600,000 |
|
Repayments under line of credit |
|
|
(771,600 |
) |
|
|
(600,000 |
) |
Receipts / (payments) under derivative financial instruments, net |
|
|
137 |
|
|
|
(48,457 |
) |
Contingent consideration received |
|
|
2,621 |
|
|
|
7,942 |
|
Contingent and deferred consideration paid |
|
|
(19,834 |
) |
|
|
(7,681 |
) |
Net cash flows (used in) / provided by financing activities |
|
|
(80,542 |
) |
|
|
483,281 |
|
Effect of foreign exchange rate changes |
|
|
(112,465 |
) |
|
|
(88,614 |
) |
Increase in cash and cash equivalents, including customer accounts and other restricted cash during the period |
|
$ |
155,477 |
|
|
$ |
207,866 |
|
Cash and cash equivalents, including customer accounts and other restricted cash at beginning of the period |
|
|
1,971,718 |
|
|
|
1,763,852 |
|
Cash and cash equivalents at end of the period, including customer accounts and other restricted cash |
|
$ |
2,127,195 |
|
|
$ |
1,971,718 |
|
|
|
Year Ended |
|
|||||
|
|
|
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Cash and cash equivalents |
|
$ |
260,219 |
|
|
$ |
313,439 |
|
Customer accounts and other restricted cash, net |
|
|
1,866,976 |
|
|
|
1,658,279 |
|
Total cash and cash equivalents, including customer accounts and other restricted cash, net |
|
$ |
2,127,195 |
|
|
$ |
1,971,718 |
|
Non-GAAP Financial Measures
To supplement the Company’s condensed consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, the company uses non-GAAP measures of certain components of financial performance. This includes Gross Profit (excluding depreciation and amortization), Gross Profit Margin (excluding depreciation and amortization), Adjusted EBITDA, Adjusted EBITDA margin, Free cash flow and Free cash flow conversion, Adjusted net income and Adjusted net income per share, which are supplemental measures that are not required by, or presented in accordance with, accounting principles generally accepted in
Gross Profit (excluding depreciation and amortization) is defined as revenue less cost of services (excluding depreciation and amortization). Gross Profit Margin (excluding depreciation and amortization) is defined as Gross Profit (excluding depreciation and amortization) as a percentage of revenue. Management believes Gross Profit to be a useful profitability measure to assess the performance of our businesses and ability to manage cost.
Adjusted EBITDA is defined as net income/(loss) before the impact of income tax (benefit)/expense, interest expense, net, depreciation and amortization, share-based compensation, impairment expense on goodwill and intangible assets, restructuring and other costs, loss/(gain) on disposal of a subsidiaries and other assets, net, and other income/(expense), net. These adjustments also include certain costs and transaction items that are not reflective of the underlying operating performance of the Company. Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of Revenue. Management believes Adjusted EBITDA to be a useful profitability measure to assess the performance of our businesses and improves the comparability of operating results across reporting periods.
Adjusted net income excludes the impact of certain non-operational and non-cash items. Adjusted net income is defined as net income/(loss) attributable to the Company before the impact of other non-operating income / (expense), net, impairment expense on goodwill and intangible assets, restructuring and other costs, accelerated amortization of debt fees, amortization of acquired assets, loss/(gain) on disposal of subsidiaries and other assets, share-based compensation, discrete tax items and the income tax (benefit)/expense on these non-GAAP adjustments. Adjusted net income per share is adjusted net income as defined above divided by adjusted weighted average dilutive shares outstanding. Management believes the removal of certain non-operational and non-cash items from net income enhances shareholders ability to evaluate the Company’s business performance and profitability by improving comparability of operating results across reporting periods.
Free cash flow is defined as net cash flows provided by/used in operating activities, adjusted for the impact of capital expenditure, payments relating to restructuring and other costs, cash paid for interest and movements in customer accounts and other restricted cash. Capital expenditure includes purchases of property plant & equipment and purchases of other intangible assets, including software development costs. Capital expenditure does not include purchases of merchant portfolios. Free cash flow conversion is defined as free cash flow as a percentage of Adjusted EBITDA. Management believes free cash flow to be a liquidity measure that provides useful information about the amount of cash generated by the business.
Management believes the presentation of these non-GAAP financial measures, including Gross Profit, Gross Profit Margin, Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted net income, when considered together with the Company’s results presented in accordance with GAAP, provide users with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of Paysafe’s core operating performance. In addition, management believes the presentation of these non-GAAP financial measures provides useful supplemental information in assessing the Company’s results on a basis that fosters comparability across periods by excluding the impact on the Company’s reported GAAP results of acquisitions and dispositions that have occurred in such periods. However, these non-GAAP measures exclude items that are significant in understanding and assessing Paysafe’s financial results or position. Therefore, these measures should not be considered in isolation or as alternatives to revenue, net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP.
You should be aware that Paysafe’s presentation of these measures may not be comparable to similarly titled measures used by other companies. In addition, the forward-looking non-GAAP financial measures of Adjusted EBITDA and Gross Profit provided herein have not been reconciled to comparable GAAP measures due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations. We have reconciled the historical non-GAAP financial measures presented herein to their most directly comparable GAAP financial measures. A reconciliation of our forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures cannot be provided without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the adjusting items necessary for such reconciliations that have not yet occurred, are out of our control, or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.
Reconciliation of GAAP Net Income (loss) to Adjusted EBITDA
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
($ in thousands) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Net (loss) / income |
|
$ |
(33,711 |
) |
|
$ |
90,522 |
|
|
$ |
(1,862,284 |
) |
|
$ |
(110,328 |
) |
Income tax expense / (benefit) |
|
|
247 |
|
|
|
(19,005 |
) |
|
|
(52,502 |
) |
|
|
(85,110 |
) |
Interest expense, net |
|
|
37,615 |
|
|
|
21,536 |
|
|
|
126,628 |
|
|
|
165,827 |
|
Depreciation and amortization |
|
|
67,723 |
|
|
|
63,964 |
|
|
|
266,819 |
|
|
|
261,372 |
|
Share-based compensation expense |
|
|
17,106 |
|
|
|
8,940 |
|
|
|
62,354 |
|
|
|
101,770 |
|
Impairment expense on goodwill and intangible assets |
|
|
1,000 |
|
|
|
— |
|
|
|
1,887,223 |
|
|
|
324,145 |
|
Restructuring and other costs |
|
|
3,496 |
|
|
|
3,562 |
|
|
|
64,132 |
|
|
|
25,883 |
|
Loss on disposal of subsidiaries and other assets, net |
|
|
— |
|
|
|
28 |
|
|
|
1,359 |
|
|
|
— |
|
Other expense / (income), net |
|
|
14,085 |
|
|
|
(64,088 |
) |
|
|
(83,778 |
) |
|
|
(239,661 |
) |
Adjusted EBITDA |
|
$ |
107,561 |
|
|
$ |
105,459 |
|
|
$ |
409,951 |
|
|
$ |
443,898 |
|
Adjusted EBITDA Margin |
|
|
28.0 |
% |
|
|
28.4 |
% |
|
|
27.4 |
% |
|
|
29.9 |
% |
Reconciliation of Operating Cash Flow to Non-GAAP Free Cash Flow
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
($ in thousands) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Net cash (outflows) / inflows from operating activities |
|
$ |
(449,141 |
) |
|
$ |
131,868 |
|
|
$ |
924,078 |
|
|
$ |
224,468 |
|
Capital Expenditure |
|
|
(23,915 |
) |
|
|
(22,308 |
) |
|
|
(93,608 |
) |
|
|
(83,843 |
) |
Cash paid for interest |
|
|
38,614 |
|
|
|
28,748 |
|
|
|
102,234 |
|
|
|
91,545 |
|
Payments relating to Restructuring and other costs |
|
|
21,102 |
|
|
|
9,520 |
|
|
|
49,970 |
|
|
|
21,735 |
|
Movement in Customer Accounts and other restricted cash |
|
|
504,795 |
|
|
|
(94,770 |
) |
|
|
(684,895 |
) |
|
|
32,429 |
|
Free Cash Flow |
|
$ |
91,455 |
|
|
$ |
53,058 |
|
|
$ |
297,779 |
|
|
$ |
286,334 |
|
Adjusted EBITDA |
|
|
107,561 |
|
|
|
105,459 |
|
|
|
409,951 |
|
|
|
443,898 |
|
Free Cash Flow Conversion |
|
|
85 |
% |
|
|
50 |
% |
|
|
73 |
% |
|
|
65 |
% |
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (excluding depreciation and amortization)
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
($ in thousands) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Revenue |
|
$ |
383,568 |
|
|
$ |
371,661 |
|
|
$ |
1,496,137 |
|
|
$ |
1,487,013 |
|
Cost of services (excluding depreciation and amortization) |
|
|
156,125 |
|
|
|
148,111 |
|
|
|
614,025 |
|
|
|
599,778 |
|
Depreciation and amortization |
|
|
67,723 |
|
|
|
63,964 |
|
|
|
266,819 |
|
|
|
261,372 |
|
Gross Profit (1) |
|
$ |
159,720 |
|
|
$ |
159,586 |
|
|
$ |
615,293 |
|
|
$ |
625,863 |
|
Depreciation and amortization |
|
|
67,723 |
|
|
|
63,964 |
|
|
|
266,819 |
|
|
|
261,372 |
|
Gross Profit (excluding depreciation and amortization) |
|
$ |
227,443 |
|
|
$ |
223,550 |
|
|
$ |
882,112 |
|
|
$ |
887,235 |
|
(1) | Gross Profit has been calculated as revenue, less cost of services and depreciation and amortization. Gross profit is not presented within the Company's consolidated financial statements. |
|
Reconciliation of GAAP Net (Loss) / Income to Adjusted Net Income
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
($ in thousands) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Net (loss) / income attributable to the Company |
|
$ |
(33,711 |
) |
|
$ |
90,296 |
|
|
$ |
(1,862,655 |
) |
|
$ |
(110,954 |
) |
Other non operating expense / (income), net (1) |
|
|
14,438 |
|
|
|
(65,210 |
) |
|
|
(89,383 |
) |
|
|
(252,512 |
) |
Impairment expense on goodwill and intangible assets |
|
|
1,000 |
|
|
|
— |
|
|
|
1,887,223 |
|
|
|
324,145 |
|
Accelerated amortization of debt fees (2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
62,262 |
|
Amortization of acquired assets (3) |
|
|
40,317 |
|
|
|
41,975 |
|
|
|
167,345 |
|
|
|
187,343 |
|
Restructuring and other costs |
|
|
3,496 |
|
|
|
3,562 |
|
|
|
64,132 |
|
|
|
25,883 |
|
Loss on disposal of subsidiaries and other assets, net |
|
|
— |
|
|
|
28 |
|
|
|
1,359 |
|
|
|
— |
|
Share-based compensation expense |
|
|
17,106 |
|
|
|
8,940 |
|
|
|
62,354 |
|
|
|
101,770 |
|
Discrete tax items (4) |
|
|
24,672 |
|
|
|
(34,509 |
) |
|
|
36,311 |
|
|
|
(18,832 |
) |
Income tax (benefit) / expense on non-GAAP adjustments (5) |
|
|
(34,229 |
) |
|
|
7,114 |
|
|
|
(129,643 |
) |
|
|
(133,307 |
) |
Adjusted net income attributable to the Company (6) |
|
$ |
33,089 |
|
|
$ |
52,196 |
|
|
$ |
137,043 |
|
|
$ |
185,798 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares - diluted |
|
|
60.7 |
|
|
|
60.3 |
|
|
|
60.5 |
|
|
|
60.3 |
|
Adjusted diluted impact |
|
|
0.5 |
|
|
|
0.1 |
|
|
|
0.4 |
|
|
|
— |
|
Adjusted weighted average shares - diluted |
|
|
61.2 |
|
|
|
60.4 |
|
|
|
60.9 |
|
|
|
60.3 |
|
(1) |
Other non operating (income) /expense, net primarily consists of income and expenses outside of the Company's operating activities, including fair value gain on derivative instruments, fair value gain on warrant liabilities and (gain) / loss on contingent consideration payable and receivables and gain on foreign exchange. For the three months and year ended |
|
(2) | Accelerated amortization of debt fees represents the non-cash amortization of debt fees relating to the refinancing and debt reduction in 2021. |
|
(3) | Amortization of acquired asset represents amortization expense on the fair value of intangible assets acquired through various Company acquisitions, including brands, customer relationships, software and merchant portfolios. |
|
(4) | Discrete tax items represents certain amounts within income tax (benefit)/expense, including changes in uncertain tax positions and the remeasurement of certain deferred tax balances due to changes in the statutory tax rates in certain jurisdictions. |
|
(5) | Income tax (benefit) / expense on non-GAAP adjustments reflects the tax impact of the non-GAAP adjustments to net (loss)/income attributable to the Company to calculated adjusted net income. |
|
(6) |
Upon further review of the adjustments to adjusted net income, amounts for the year ended |
|
Adjusted Net Income per Share
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||
|
|
|
|
|
|
||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Numerator ($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted net income attributable to the Company - basic |
$ |
33,089 |
|
|
$ |
52,196 |
|
|
$ |
137,043 |
|
|
$ |
185,798 |
|
Adjusted net income attributable to the Company - diluted |
$ |
33,089 |
|
|
$ |
52,196 |
|
|
$ |
137,043 |
|
|
$ |
185,798 |
|
Denominator (in millions) |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares – basic |
|
60.7 |
|
|
|
60.3 |
|
|
|
60.5 |
|
|
|
60.3 |
|
Adjusted weighted average shares – diluted (1) |
|
61.2 |
|
|
|
60.4 |
|
|
|
60.9 |
|
|
|
60.3 |
|
Adjusted net income per share attributable to the Company |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
$ |
0.55 |
|
|
$ |
0.87 |
|
|
$ |
2.26 |
|
|
$ |
3.08 |
|
Diluted |
$ |
0.54 |
|
|
$ |
0.86 |
|
|
$ |
2.25 |
|
|
$ |
3.08 |
|
(1) |
The denominator used in the calculation of diluted adjusted net income per share attributable to the Company for the three months and years ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230308005747/en/
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