Paysafe Reports Fourth Quarter and Full Year 2023 Results; Provides 2024 Outlook
- Revenue increased by 8% in Q4 2023 compared to Q4 2022, totaling $414.5 million.
- Total Payment Volume rose by 8% to $35.8 billion in Q4 2023.
- Net loss attributable to the Company decreased to $12.1 million in Q4 2023.
- Adjusted net income grew to $40.9 million in Q4 2023.
- Adjusted EBITDA increased by 13% to $121.7 million in Q4 2023.
- Net leverage decreased to 5.0x as of December 31, 2023, from 5.8x in 2022.
- For the full year 2023, revenue increased by 7% to $1,601.1 million.
- Total Payment Volume for the full year reached $140.2 billion, an 8% increase.
- Net loss attributable to the Company decreased to $20.3 million for the full year 2023.
- Adjusted net income rose to $143.9 million for the full year 2023.
- Adjusted EBITDA increased by 12% to $458.7 million for the full year 2023.
- None.
Insights
The financial results reported by Paysafe Limited indicate a solid performance for the fourth quarter and the full year of 2023. An 8% revenue growth in Q4 and a 7% increase for the full year are noteworthy, especially considering the constant currency basis adjustments. This growth suggests that the company has been effective in implementing strategies that resonate with market demands and consumer preferences in the payment sector. The reduction of net leverage from 5.8x to 5.0x is a positive sign for the company's financial health, indicating a more sustainable debt level relative to its earnings before interest, taxes, depreciation and amortization (EBITDA).
From an investor's perspective, the substantial decrease in net loss per diluted share from the previous year is a strong indicator of recovery and operational efficiency. Moreover, the improvement in Adjusted EBITDA, which is a key metric used to assess a company's operating performance, by 12% on a constant currency basis, suggests that the company's underlying profitability is improving. These financial metrics can be influential in the decision-making process for potential investors and current shareholders when evaluating the company's stock performance and future growth potential.
Given the reported increase in Total Payment Volume (TPV) by 8%, Paysafe is capturing a larger share of the payments market. This metric is critical as it reflects the total monetary value of transactions processed by the company and can be seen as a proxy for the company's scale and market penetration. The growth in TPV suggests that Paysafe is maintaining relevance in a competitive landscape, likely benefiting from the global shift towards digital payments. As the payments industry continues to evolve with new technologies and consumer habits, companies like Paysafe that show an ability to grow their TPV are better positioned to capitalize on these trends.
Moreover, the focus on operational changes and the ability to deliver on commitments set earlier in the year highlights the company's strategic planning and execution capabilities. For businesses and investors, these attributes are crucial as they provide confidence in the management's ability to navigate future challenges and leverage opportunities within the digital payments sector.
The performance of Paysafe must be contextualized within the broader economic environment. The reported revenue growth and improved financial metrics during a period of economic uncertainty and potential currency volatility reflect a strong operational resilience. The ability to increase revenue and Adjusted EBITDA, even on a constant currency basis, indicates that the company has effectively managed the headwinds that often accompany international operations, such as exchange rate fluctuations.
The reduction of net leverage is particularly significant in an environment where interest rates may be rising globally. A lower leverage ratio can potentially reduce the cost of debt servicing and improve the company's risk profile. This financial prudence is essential for maintaining investor confidence, especially when considering the long-term sustainability of the business amidst economic cycles.
Fourth Quarter 2023 Financial Highlights
(Metrics compared to fourth quarter of 2022)
-
Revenue of
, increased$414.5 million 8% ; increased6% on a constant currency basis -
Total Payment Volume of
1, increased$35.8 billion 8% -
Net loss attributable to the Company of
, or ($12.1 million ) per diluted share, compared to$0.20 , or ($33.7 million ) per diluted share$0.56 -
Adjusted net income of
, or$40.9 million per diluted share, compared to$0.66 , or$33.1 million per diluted share$0.54 -
Adjusted EBITDA of
, increased$121.7 million 13% ; increased11% on a constant currency basis - Net leverage2 decreased to 5.0x as of December 31, 2023, compared to 5.8x as of December 31, 2022
Full Year 2023 Financial Highlights
(Metrics compared to full year 2022)
-
Revenue of
, increased$1,601.1 million 7% ; increased6% on a constant currency basis -
Total Payment Volume of
1, increased$140.2 billion 8% -
Net loss attributable to the Company of
, or ($20.3 million ) per diluted share, compared to$0.33 , or ($1,862.7 million ) per diluted share$30.78 -
Adjusted net income of
, or$143.9 million per diluted share, compared to$2.33 , or$137.0 million per diluted share$2.25 -
Adjusted EBITDA of
, increased$458.7 million 12% ; increased11% on a constant currency basis
Bruce Lowthers, CEO of Paysafe, commented: “We closed out 2023 strong with
Recent Strategic and Operational Highlights
- Announced investment plans to expand Paysafe's go-to-market capabilities to support growth in target verticals, while enhancing client experience and operational efficiency
- Paysafe ranked 2nd in the J.D. Power 2024 U.S. Merchant Services Satisfaction StudySM, outperforming the industry average for all study dimensions
-
Published Paysafe research highlighting a shift in how consumers plan to allocate disposable income, with
42% of survey respondents planning to prioritize spending on experiences over possessions - Improved consumer engagement and satisfaction, while reducing the rate of customer service contacts through enhancements to self-service, automation and next-gen customer service tools
- Integrated Visa Network Tokens, adding an additional layer of protection for cardholders
-
Paysafe is now processing iGaming payments in 32 U.S. states and territories, adding seven new states in 2023, including the launch of
Florida in Q4
(1) |
Excludes embedded wallet related volumes of |
(2) |
Paysafe defines net leverage as the calculation of net debt (total debt less cash and cash equivalents) divided by the sum of the last twelve months (LTM) of Adjusted EBITDA. For the period ending December 31, 2023, total debt was |
Fourth Quarter and Full Year 2023 Summary of Consolidated Results
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
December 31, |
|
December 31, |
||||||||||||
($ in thousands) (unaudited) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Revenue |
|
$ |
414,541 |
|
|
$ |
383,568 |
|
|
$ |
1,601,138 |
|
|
$ |
1,496,137 |
|
Gross Profit (excluding depreciation and amortization) |
|
$ |
240,959 |
|
|
$ |
227,443 |
|
|
$ |
937,926 |
|
|
$ |
882,112 |
|
Net loss attributable to the Company |
|
$ |
(12,129 |
) |
|
$ |
(33,711 |
) |
|
$ |
(20,251 |
) |
|
$ |
(1,862,655 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA |
|
$ |
121,741 |
|
|
$ |
107,561 |
|
|
$ |
458,663 |
|
|
$ |
409,951 |
|
Adjusted net income attributable to the Company |
|
$ |
40,862 |
|
|
$ |
33,089 |
|
|
$ |
143,888 |
|
|
$ |
137,043 |
|
Fourth Quarter 2023 Results
Total revenue for the fourth quarter of 2023 was
Net loss attributable to the Company for the fourth quarter was
Adjusted net income for the fourth quarter increased
Adjusted EBITDA for the fourth quarter was
Fourth quarter operating cash flow was
Full Year 2023 Results
Total revenue for the full year 2023 was
Net loss attributable to the Company for the full year 2023 was
Adjusted EBITDA for the full year 2023 was
Adjusted net income for the full year 2023 increased
Operating cash flow for 2023 was
Balance Sheet
As of December 31, 2023, total cash and cash equivalents were
Summary of Segment Results
|
|
Three Months Ended |
|
|
|
|
Year Ended |
|
|
|
|
||||||||||||||
|
|
December 31, |
|
YoY |
|
December 31, |
|
YoY |
|
||||||||||||||||
($ in thousands) (unaudited) |
|
2023 |
|
2022 |
|
change |
|
2023 |
|
2022 |
|
change |
|
||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Merchant Solutions |
|
$ |
227,280 |
|
|
$ |
208,505 |
|
|
|
9 |
% |
|
$ |
878,346 |
|
|
$ |
817,353 |
|
|
|
7 |
% |
|
Digital Wallets |
|
$ |
191,287 |
|
|
$ |
177,141 |
|
|
|
8 |
% |
|
$ |
734,669 |
|
|
$ |
686,165 |
|
|
|
7 |
% |
|
Intersegment |
|
$ |
(4,026 |
) |
|
$ |
(2,078 |
) |
|
|
94 |
% |
|
$ |
(11,877 |
) |
|
$ |
(7,381 |
) |
|
|
61 |
% |
|
Total Revenue |
|
$ |
414,541 |
|
|
$ |
383,568 |
|
|
|
8 |
% |
|
$ |
1,601,138 |
|
|
$ |
1,496,137 |
|
|
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Merchant Solutions |
|
$ |
56,582 |
|
|
$ |
51,022 |
|
|
|
11 |
% |
|
$ |
222,154 |
|
|
$ |
200,304 |
|
|
|
11 |
% |
|
Digital Wallets |
|
$ |
82,356 |
|
|
$ |
77,127 |
|
|
|
7 |
% |
|
$ |
318,706 |
|
|
$ |
289,413 |
|
|
|
10 |
% |
|
Corporate |
|
$ |
(17,197 |
) |
|
$ |
(20,588 |
) |
|
|
16 |
% |
|
$ |
(82,197 |
) |
|
$ |
(79,766 |
) |
|
|
-3 |
% |
|
Total Adjusted EBITDA |
|
$ |
121,741 |
|
|
$ |
107,561 |
|
|
|
13 |
% |
|
$ |
458,663 |
|
|
$ |
409,951 |
|
|
|
12 |
% |
|
Full Year 2024 Financial Guidance
($ in millions) (unaudited) |
|
Full Year 2024 |
Revenue |
|
|
Adjusted EBITDA |
|
|
Webcast and Conference Call
Paysafe will host a live webcast to discuss the results today at 8:30 a.m. (ET). The webcast and supplemental information can be accessed on the investor relations section of the Paysafe website at ir.paysafe.com. An archive will be available after the conclusion of the live event and will remain available via the same link for one year.
Time |
Thursday, March 7 2024, at 8:30 a.m. ET |
Webcast |
Go to the Investor Relations section of the Paysafe website to listen and view slides |
Dial in |
877-407-3037 ( |
About Paysafe
Paysafe Limited (“Paysafe”) (NYSE: PSFE) (PSFE.WS) is a leading payments platform with an extensive track record of serving merchants and consumers in the global entertainment sectors. Its core purpose is to enable businesses and consumers to connect and transact seamlessly through industry-leading capabilities in payment processing, digital wallet, and online cash solutions. With over 20 years of online payment experience, an annualized transactional volume of
Forward-looking Statements
This press release includes “forward-looking statements” within the meaning of
These forward-looking statements involve significant risks, uncertainties, and events that may 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
The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in their expectations with respect thereto or any change in events.
Paysafe Limited Condensed Consolidated Balance Sheets (unaudited)
($ in thousands) |
|
December 31, 2023 |
|
|
December 31, 2022 |
|
||
Assets |
|
|
|
|
|
|
||
Current assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
202,322 |
|
|
$ |
260,219 |
|
Customer accounts and other restricted cash |
|
|
1,295,947 |
|
|
|
1,866,976 |
|
Accounts receivable, net of allowance for credit losses of |
|
|
162,081 |
|
|
|
159,324 |
|
Settlement receivables, net of allowance for credit losses of |
|
|
171,224 |
|
|
|
147,774 |
|
Prepaid expenses and other current assets |
|
|
74,919 |
|
|
|
60,810 |
|
Total current assets |
|
|
1,906,493 |
|
|
|
2,495,103 |
|
Deferred tax assets |
|
|
77,273 |
|
|
|
104,538 |
|
Property, plant and equipment, net |
|
|
17,213 |
|
|
|
11,947 |
|
Operating lease right-of-use assets |
|
|
22,120 |
|
|
|
35,509 |
|
Derivative asset |
|
|
10,427 |
|
|
|
17,321 |
|
Intangible assets, net |
|
|
1,163,935 |
|
|
|
1,291,458 |
|
Goodwill |
|
|
2,023,402 |
|
|
|
1,999,132 |
|
Other assets – non-current |
|
|
6,838 |
|
|
|
2,048 |
|
Total non-current assets |
|
|
3,321,208 |
|
|
|
3,461,953 |
|
Total assets |
|
$ |
5,227,701 |
|
|
$ |
5,957,056 |
|
|
|
|
|
|
|
|
||
Liabilities and equity |
|
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
|
||
Accounts payable and other liabilities |
|
$ |
202,699 |
|
|
$ |
241,529 |
|
Short-term debt |
|
|
10,190 |
|
|
|
10,190 |
|
Funds payable and amounts due to customers |
|
|
1,477,017 |
|
|
|
1,997,867 |
|
Operating lease liabilities – current |
|
|
8,233 |
|
|
|
7,953 |
|
Income taxes payable |
|
|
— |
|
|
|
11,325 |
|
Contingent and deferred consideration payable – current |
|
|
11,828 |
|
|
|
18,171 |
|
Liability for share-based compensation – current |
|
|
2,701 |
|
|
|
11,400 |
|
Total current liabilities |
|
|
1,712,668 |
|
|
|
2,298,435 |
|
Non-current debt |
|
|
2,491,643 |
|
|
|
2,633,269 |
|
Operating lease liabilities – non-current |
|
|
16,963 |
|
|
|
29,913 |
|
Deferred tax liabilities |
|
|
111,705 |
|
|
|
118,791 |
|
Warrant liabilities |
|
|
1,423 |
|
|
|
3,094 |
|
Liability for share-based compensation – non-current |
|
|
3,108 |
|
|
|
4,942 |
|
Contingent and deferred consideration payable – non-current |
|
|
6,878 |
|
|
|
8,975 |
|
Other liabilities – non-current |
|
|
— |
|
|
|
— |
|
Total non-current liabilities |
|
|
2,631,720 |
|
|
|
2,798,984 |
|
Total liabilities |
|
|
4,344,388 |
|
|
|
5,097,419 |
|
Commitments and contingent liabilities |
|
|
|
|
|
|
||
Total shareholders' equity |
|
|
883,313 |
|
|
|
859,637 |
|
Total liabilities and shareholders' equity |
|
$ |
5,227,701 |
|
|
$ |
5,957,056 |
|
Paysafe Limited Condensed Consolidated Statements of Operations (unaudited)
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
December 31, |
|
December 31, |
||||||||||||
($ in thousands) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Revenue |
|
$ |
414,541 |
|
|
$ |
383,568 |
|
|
$ |
1,601,138 |
|
|
$ |
1,496,137 |
|
Cost of services (excluding depreciation and amortization) |
|
|
173,582 |
|
|
|
156,125 |
|
|
|
663,212 |
|
|
|
614,025 |
|
Selling, general and administrative |
|
|
125,030 |
|
|
|
136,988 |
|
|
|
508,136 |
|
|
|
534,515 |
|
Depreciation and amortization |
|
|
66,387 |
|
|
|
67,723 |
|
|
|
263,433 |
|
|
|
266,819 |
|
Impairment expense on goodwill and intangible assets |
|
|
979 |
|
|
|
1,000 |
|
|
|
1,254 |
|
|
|
1,887,223 |
|
Restructuring and other costs |
|
|
1,896 |
|
|
|
3,496 |
|
|
|
6,061 |
|
|
|
64,132 |
|
Loss on disposal of subsidiary and other assets, net |
|
|
386 |
|
|
|
— |
|
|
|
386 |
|
|
|
1,359 |
|
Operating income / (loss) |
|
|
46,281 |
|
|
|
18,236 |
|
|
|
158,656 |
|
|
|
(1,871,936 |
) |
Other (expense) / income, net |
|
|
(6,503 |
) |
|
|
(14,085 |
) |
|
|
13,081 |
|
|
|
83,778 |
|
Interest expense, net |
|
|
(38,509 |
) |
|
|
(37,615 |
) |
|
|
(151,148 |
) |
|
|
(126,628 |
) |
Income / (loss) before taxes |
|
|
1,269 |
|
|
|
(33,464 |
) |
|
|
20,589 |
|
|
|
(1,914,786 |
) |
Income tax expense / (benefit) |
|
|
13,398 |
|
|
|
247 |
|
|
|
40,840 |
|
|
|
(52,502 |
) |
Net loss |
|
$ |
(12,129 |
) |
|
$ |
(33,711 |
) |
|
$ |
(20,251 |
) |
|
$ |
(1,862,284 |
) |
Less: net income attributable to non-controlling interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
371 |
|
Net loss attributable to the Company |
|
$ |
(12,129 |
) |
|
$ |
(33,711 |
) |
|
$ |
(20,251 |
) |
|
$ |
(1,862,655 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share attributable to the Company – basic |
|
$ |
(0.20 |
) |
|
$ |
(0.56 |
) |
|
$ |
(0.33 |
) |
|
$ |
(30.78 |
) |
Net loss per share attributable to the Company – diluted |
|
$ |
(0.20 |
) |
|
$ |
(0.56 |
) |
|
$ |
(0.33 |
) |
|
$ |
(30.78 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
(12,129 |
) |
|
$ |
(33,711 |
) |
|
$ |
(20,251 |
) |
|
$ |
(1,862,284 |
) |
Other comprehensive income / (loss), net of tax of |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain / (loss) on foreign currency translation |
|
|
12,805 |
|
|
|
21,409 |
|
|
|
14,330 |
|
|
|
(34,251 |
) |
Total comprehensive gain / (loss) |
|
$ |
676 |
|
|
$ |
(12,302 |
) |
|
$ |
(5,921 |
) |
|
$ |
(1,896,535 |
) |
Less: comprehensive income attributable to non-controlling interest |
|
|
— |
|
|
|
0 |
|
|
|
— |
|
|
|
371 |
|
Total comprehensive gain / (loss) attributable to the Company |
|
$ |
676 |
|
|
$ |
(12,302 |
) |
|
$ |
(5,921 |
) |
|
$ |
(1,896,906 |
) |
Paysafe Limited Consolidated Net (loss) / income per share attributable to the Company
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
December 31, |
|
December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Numerator ($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss attributable to the Company - basic |
$ |
(12,129 |
) |
|
$ |
(33,711 |
) |
|
$ |
(20,251 |
) |
|
$ |
(1,862,655 |
) |
Net loss attributable to the Company - diluted |
$ |
(12,129 |
) |
|
$ |
(33,711 |
) |
|
$ |
(20,251 |
) |
|
$ |
(1,862,655 |
) |
Denominator (in millions) |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares – basic |
|
61.7 |
|
|
|
60.7 |
|
|
|
61.4 |
|
|
|
60.5 |
|
Weighted average shares – diluted |
|
61.7 |
|
|
|
60.7 |
|
|
|
61.4 |
|
|
|
60.5 |
|
Net loss per share attributable to the Company |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
$ |
(0.20 |
) |
|
$ |
(0.56 |
) |
|
$ |
(0.33 |
) |
|
$ |
(30.78 |
) |
Diluted |
$ |
(0.20 |
) |
|
$ |
(0.56 |
) |
|
$ |
(0.33 |
) |
|
$ |
(30.78 |
) |
Paysafe Limited Condensed Consolidated Statements of Cash Flow (unaudited)
|
|
Year Ended |
||||||
|
|
December 31, |
||||||
($ in thousands) |
|
2023 |
|
2022 (1) |
||||
Cash flows from operating activities |
|
|
|
|
|
|
||
Net loss |
|
$ |
(20,251 |
) |
|
$ |
(1,862,284 |
) |
Adjustments for non-cash items: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
264,145 |
|
|
|
266,819 |
|
Unrealized foreign exchange loss / (gain) |
|
|
411 |
|
|
|
(44,157 |
) |
Deferred tax expense / (benefit) |
|
|
19,692 |
|
|
|
(82,876 |
) |
Interest expense, net |
|
|
(2,642 |
) |
|
|
24,394 |
|
Share-based compensation |
|
|
28,873 |
|
|
|
62,354 |
|
Other income, net |
|
|
(20,515 |
) |
|
|
(45,489 |
) |
Impairment expense on goodwill and intangible assets |
|
|
1,254 |
|
|
|
1,887,223 |
|
Allowance for credit losses and other |
|
|
21,186 |
|
|
|
35,541 |
|
Loss on disposal of subsidiary and other assets, net |
|
|
386 |
|
|
|
1,359 |
|
Non-cash lease expense |
|
|
8,937 |
|
|
|
7,034 |
|
Movements in working capital: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
(18,813 |
) |
|
|
(34,224 |
) |
Prepaid expenses, other current assets, and related party receivables |
|
|
6,953 |
|
|
|
(13,085 |
) |
Accounts payable, other liabilities, and related party payables |
|
|
(32,974 |
) |
|
|
17,400 |
|
Income tax (receivable) / payable |
|
|
(22,620 |
) |
|
|
17,192 |
|
Net cash flows from operating activities |
|
|
234,022 |
|
|
|
237,201 |
|
Cash flows in investing activities |
|
|
|
|
|
|
||
Purchase of property, plant & equipment |
|
|
(12,849 |
) |
|
|
(4,543 |
) |
Purchase of merchant portfolios |
|
|
(30,735 |
) |
|
|
(56,438 |
) |
Other intangible asset expenditures |
|
|
(89,319 |
) |
|
|
(89,065 |
) |
Acquisition of business, net of cash acquired |
|
|
— |
|
|
|
(424,722 |
) |
Net cash outflow on disposal of subsidiary |
|
|
— |
|
|
|
(826 |
) |
Receipts under derivative financial instruments |
|
|
10,208 |
|
|
|
— |
|
Cash outflow for merchant reserves |
|
|
(24,400 |
) |
|
|
|
|
Cash inflow from merchant reserves |
|
|
12,200 |
|
|
|
— |
|
Other investing activities, net |
|
|
(342 |
) |
|
|
— |
|
Net cash flows used in investing activities |
|
|
(135,237 |
) |
|
|
(575,594 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
||
Cash settled equity awards |
|
|
(484 |
) |
|
|
(990 |
) |
Repurchases of shares withheld for taxes |
|
|
(8,467 |
) |
|
|
(6,937 |
) |
Proceeds from exercise of warrants |
|
|
5 |
|
|
|
3 |
|
Settlement funds - merchants and customers, net |
|
|
(588,151 |
) |
|
|
686,877 |
|
Repurchase of borrowings |
|
|
(167,424 |
) |
|
|
(45,511 |
) |
Proceeds from loans and borrowings |
|
|
125,597 |
|
|
|
120,669 |
|
Repayments of loans and borrowings |
|
|
(121,724 |
) |
|
|
(148,919 |
) |
Payment of debt issuance costs |
|
|
— |
|
|
|
(6,781 |
) |
Proceeds under line of credit |
|
|
900,000 |
|
|
|
796,600 |
|
Repayments under line of credit |
|
|
(900,000 |
) |
|
|
(771,600 |
) |
Receipts under derivative financial instruments, net |
|
|
— |
|
|
|
137 |
|
Contingent consideration received |
|
|
300 |
|
|
|
2,621 |
|
Contingent and deferred consideration paid |
|
|
(10,680 |
) |
|
|
(19,834 |
) |
Net cash flows (used in) / provided by financing activities |
|
|
(771,028 |
) |
|
|
606,335 |
|
Effect of foreign exchange rate changes |
|
|
43,317 |
|
|
|
(112,465 |
) |
(Decrease) / increase in cash and cash equivalents, including customer accounts and other restricted cash during the period |
|
$ |
(628,926 |
) |
|
$ |
155,477 |
|
Cash and cash equivalents, including customer accounts and other restricted cash at beginning of the period |
|
|
2,127,195 |
|
|
|
1,971,718 |
|
Cash and cash equivalents at end of the period, including customer accounts and other restricted cash |
|
$ |
1,498,269 |
|
|
$ |
2,127,195 |
|
|
|
Year Ended |
||||||
|
|
December 31, |
||||||
|
|
2023 |
|
2022 |
||||
Cash and cash equivalents |
|
$ |
202,322 |
|
|
$ |
260,219 |
|
Customer accounts and other restricted cash, net |
|
|
1,295,947 |
|
|
|
1,866,976 |
|
Total cash and cash equivalents, including customer accounts and other restricted cash, net |
|
$ |
1,498,269 |
|
|
$ |
2,127,195 |
|
(1) |
During the fourth quarter of 2023, the Company elected to change its presentation of the cash flows associated with "Settlement receivables, net" and "Funds payable and amounts due to customers" from operating activities, to present them as financing activities within its Consolidated Statements of Cash Flows. Comparative amounts have been recast to conform to current period presentation. These recasts had no impact on the Consolidated Statements of Comprehensive Loss, Consolidated Statements of Financial Position or Consolidated Statements of Shareholders' Equity. |
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), Adjusted EBITDA, Unlevered free cash flow, Adjusted net income, Adjusted net income per share, and Net leverage 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). 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. 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.
Unlevered 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 and cash paid for interest. 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. Management believes unlevered free cash flow to be a liquidity measure that provides useful information about the amount of cash generated by the business.
Net leverage is defined as net debt (gross debt less cash and cash equivalents) divided by the last twelve months Adjusted EBITDA. Management believes net leverage is a useful measure of the Company's credit position and progress towards leverage targets.
Management believes the presentation of these non-GAAP financial measures, including Gross Profit, Adjusted EBITDA, Unlevered free cash flow, Adjusted net income, Adjusted net income per share, and Net leverage 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 measure of Adjusted EBITDA provided herein have not been reconciled to the comparable GAAP measure 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 Loss to Adjusted EBITDA
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||
|
|
December 31, |
|
|
December 31, |
|
||||||||||
($ in thousands) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net loss |
|
$ |
(12,129 |
) |
|
$ |
(33,711 |
) |
|
$ |
(20,251 |
) |
|
$ |
(1,862,284 |
) |
Income tax expense / (benefit) |
|
|
13,398 |
|
|
|
247 |
|
|
|
40,840 |
|
|
|
(52,502 |
) |
Interest expense, net |
|
|
38,509 |
|
|
|
37,615 |
|
|
|
151,148 |
|
|
|
126,628 |
|
Depreciation and amortization |
|
|
66,387 |
|
|
|
67,723 |
|
|
|
263,433 |
|
|
|
266,819 |
|
Share-based compensation expense |
|
|
5,812 |
|
|
|
17,106 |
|
|
|
28,873 |
|
|
|
62,354 |
|
Impairment expense on goodwill and intangible assets |
|
|
979 |
|
|
|
1,000 |
|
|
|
1,254 |
|
|
|
1,887,223 |
|
Restructuring and other costs |
|
|
1,896 |
|
|
|
3,496 |
|
|
|
6,061 |
|
|
|
64,132 |
|
Loss on disposal of subsidiaries and other assets, net |
|
|
386 |
|
|
|
— |
|
|
|
386 |
|
|
|
1,359 |
|
Other expense / (income), net |
|
|
6,503 |
|
|
|
14,085 |
|
|
|
(13,081 |
) |
|
|
(83,778 |
) |
Adjusted EBITDA |
|
$ |
121,741 |
|
|
$ |
107,561 |
|
|
$ |
458,663 |
|
|
$ |
409,951 |
|
Reconciliation of Operating Cash Flow to Non-GAAP Unlevered Free Cash Flow
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||
|
|
December 31, |
|
|
December 31, |
|
||||||||||
($ in thousands) |
|
2023 |
|
|
2022 (1) |
|
|
2023 |
|
|
2022 (1) |
|
||||
Net cash inflows from operating activities |
|
$ |
61,592 |
|
|
$ |
64,145 |
|
|
$ |
234,022 |
|
|
$ |
237,201 |
|
Capital expenditure |
|
|
(20,646 |
) |
|
|
(23,915 |
) |
|
|
(102,168 |
) |
|
|
(93,608 |
) |
Cash paid for interest |
|
|
46,543 |
|
|
|
38,614 |
|
|
|
153,790 |
|
|
|
102,234 |
|
Payments relating to Restructuring and other costs |
|
|
2,093 |
|
|
|
21,102 |
|
|
|
32,655 |
|
|
|
49,970 |
|
Unlevered Free Cash Flow |
|
$ |
89,582 |
|
|
$ |
99,946 |
|
|
$ |
318,299 |
|
|
$ |
295,797 |
|
Adjusted EBITDA |
|
|
121,741 |
|
|
|
107,561 |
|
|
|
458,663 |
|
|
|
409,951 |
|
(1) |
During the fourth quarter of 2023, the Company elected to change its presentation of "Settlement receivables, net" and "Funds payable and amounts due to customers" from operating activities, to present them as financing activities within its consolidated statements of cash flows. As a result, the reconciling item related to "Movements in customer accounts and other restricted cash, net" is no longer required in the unlevered free cash flow reconciliation. Comparative amounts have been recast to conform to current period presentation. |
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (excluding depreciation and amortization)
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||
|
|
December 31, |
|
|
December 31, |
|
||||||||||
($ in thousands) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Revenue |
|
$ |
414,541 |
|
|
$ |
383,568 |
|
|
$ |
1,601,138 |
|
|
$ |
1,496,137 |
|
Cost of services (excluding depreciation and amortization) |
|
|
173,582 |
|
|
|
156,125 |
|
|
|
663,212 |
|
|
|
614,025 |
|
Depreciation and amortization |
|
|
66,387 |
|
|
|
67,723 |
|
|
|
263,433 |
|
|
|
266,819 |
|
Gross Profit (1) |
|
$ |
174,572 |
|
|
$ |
159,720 |
|
|
$ |
674,493 |
|
|
$ |
615,293 |
|
Depreciation and amortization |
|
|
66,387 |
|
|
|
67,723 |
|
|
|
263,433 |
|
|
|
266,819 |
|
Gross Profit (excluding depreciation and amortization) |
|
$ |
240,959 |
|
|
$ |
227,443 |
|
|
$ |
937,926 |
|
|
$ |
882,112 |
|
(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 to Adjusted Net Income
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||
|
|
December 31, |
|
|
December 31, |
|
||||||||||
($ in thousands) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net loss attributable to the Company |
|
$ |
(12,129 |
) |
|
$ |
(33,711 |
) |
|
$ |
(20,251 |
) |
|
$ |
(1,862,655 |
) |
Other non operating expense / (income), net (1) |
|
|
9,539 |
|
|
|
14,438 |
|
|
|
(3,313 |
) |
|
|
(89,383 |
) |
Impairment expense on goodwill and intangible assets |
|
|
979 |
|
|
|
1,000 |
|
|
|
1,254 |
|
|
|
1,887,223 |
|
Amortization of acquired assets (2) |
|
|
33,531 |
|
|
|
40,317 |
|
|
|
135,393 |
|
|
|
167,345 |
|
Restructuring and other costs |
|
|
1,896 |
|
|
|
3,496 |
|
|
|
6,061 |
|
|
|
64,132 |
|
Loss on disposal of subsidiaries and other assets, net |
|
|
386 |
|
|
|
— |
|
|
|
386 |
|
|
|
1,359 |
|
Share-based compensation expense |
|
|
5,812 |
|
|
|
17,106 |
|
|
|
28,873 |
|
|
|
62,354 |
|
Discrete tax items (3) |
|
|
12,785 |
|
|
|
24,672 |
|
|
|
37,983 |
|
|
|
36,311 |
|
Income tax expense on non-GAAP adjustments (4) |
|
|
(11,937 |
) |
|
|
(34,229 |
) |
|
|
(42,498 |
) |
|
|
(129,643 |
) |
Adjusted net income attributable to the Company |
|
$ |
40,862 |
|
|
$ |
33,089 |
|
|
$ |
143,888 |
|
|
$ |
137,043 |
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares - diluted |
|
|
61.7 |
|
|
|
60.7 |
|
|
|
61.4 |
|
|
|
60.5 |
|
Adjusted diluted impact |
|
|
0.1 |
|
|
|
0.5 |
|
|
|
0.3 |
|
|
|
0.4 |
|
Adjusted weighted average shares - diluted |
|
|
61.8 |
|
|
|
61.2 |
|
|
|
61.7 |
|
|
|
60.9 |
|
(1) |
Other non-operating expense / (income), net primarily consists of income and expenses outside of the Company's operating activities, including, fair value gain / loss on warrant liabilities and derivatives, gain / loss on repurchases of debt and gain / loss on foreign exchange. For the three and twelve months ended December 31, 2023, this item also includes the gain to repurchase secured notes and fair value loss on derivative instruments. |
(2) |
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. |
(3) |
Discrete tax items mainly represent (a) valuation allowance recorded on deferred tax assets of |
(4) |
Income tax expense on non-GAAP adjustments reflects the tax expense on each taxable adjustment using the current statutory tax rate of the applicable jurisdiction specific to that adjustment. |
Adjusted Net Income per Share
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||
|
December 31, |
|
|
December 31, |
|
||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Numerator ($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted net income attributable to the Company - basic |
$ |
40,862 |
|
|
$ |
33,089 |
|
|
$ |
143,888 |
|
|
$ |
137,043 |
|
Adjusted net income attributable to the Company - diluted |
$ |
40,862 |
|
|
$ |
33,089 |
|
|
$ |
143,888 |
|
|
$ |
137,043 |
|
Denominator (in millions) |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares – basic |
|
61.7 |
|
|
|
60.7 |
|
|
|
61.4 |
|
|
|
60.5 |
|
Adjusted weighted average shares – diluted (1) |
|
61.8 |
|
|
|
61.2 |
|
|
|
61.7 |
|
|
|
60.9 |
|
Adjusted net income per share attributable to the Company |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
$ |
0.66 |
|
|
$ |
0.55 |
|
|
$ |
2.34 |
|
|
$ |
2.26 |
|
Diluted |
$ |
0.66 |
|
|
$ |
0.54 |
|
|
$ |
2.33 |
|
|
$ |
2.25 |
|
(1) |
The denominator used in the calculation of diluted adjusted net income per share attributable to the Company for the three and twelve months ended December 31, 2023 and 2022 has been adjusted to include the dilutive effect of the Company's restricted stock units. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240306805418/en/
Media
Crystal Wright
Paysafe
crystal.wright@paysafe.com
+1 (904) 328-7740
Investors
Kirsten Nielsen
Paysafe
+1 (646) 901-3140
kirsten.nielsen@paysafe.com
Source: Paysafe Limited
FAQ
What was the revenue growth percentage in Q4 2023 for Paysafe (PSFE)?
How much was the total Payment Volume in Q4 2023 for Paysafe (PSFE)?
What was the net loss attributable to the Company in Q4 2023 for Paysafe (PSFE)?
What was the adjusted net income in Q4 2023 for Paysafe (PSFE)?
How much was the adjusted EBITDA in Q4 2023 for Paysafe (PSFE)?
What was the net leverage as of December 31, 2023, for Paysafe (PSFE)?
What was the revenue growth percentage for the full year 2023 for Paysafe (PSFE)?
How much was the total Payment Volume for the full year 2023 for Paysafe (PSFE)?
What was the net loss attributable to the Company for the full year 2023 for Paysafe (PSFE)?
What was the adjusted net income for the full year 2023 for Paysafe (PSFE)?