Paysafe Reports Second Quarter 2024 Results; Raises Full Year Revenue Outlook
Paysafe (NYSE: PSFE) reported strong Q2 2024 results, with revenue increasing 9% to $439.9 million and total payment volume up 7% to $38.1 billion. The company raised its full-year revenue outlook, now projecting 7-8% growth. Key highlights include:
- Adjusted EBITDA rose 5% to $119.0 million
- Net loss narrowed to $1.4 million, or ($0.02) per diluted share
- Adjusted net income increased to $36.3 million, or $0.59 per diluted share
- Net leverage decreased to 4.8x
Paysafe's growth was driven by strong performance across all major product lines and execution of strategic initiatives. The company continues to focus on expanding sales capabilities, optimizing its portfolio, and enhancing its go-to-market strategy.
Paysafe (NYSE: PSFE) ha riportato risultati solidi per il secondo trimestre del 2024, con un aumento dei ricavi del 9% a 439,9 milioni di dollari e un incremento del volume totale dei pagamenti del 7% a 38,1 miliardi di dollari. L'azienda ha rivisto al rialzo le sue previsioni di fatturato per l'intero anno, ora prevedendo una crescita del 7-8%. Tra i punti salienti ci sono:
- L'EBITDA rettificato è aumentato del 5% a 119,0 milioni di dollari
- La perdita netta si è ristretta a 1,4 milioni di dollari, ovvero ($0,02) per azione diluita
- L'utile netto rettificato è aumentato a 36,3 milioni di dollari, pari a $0,59 per azione diluita
- La leva netta è scesa a 4,8x
La crescita di Paysafe è stata sostenuta da un forte rendimento in tutte le principali linee di prodotto e dall'esecuzione di iniziative strategiche. L'azienda continua a concentrarsi sull'espansione delle capacità di vendita, sull'ottimizzazione del proprio portafoglio e sul miglioramento della sua strategia di go-to-market.
Paysafe (NYSE: PSFE) reportó resultados sólidos para el segundo trimestre de 2024, con un incremento del 9% en los ingresos, alcanzando los 439.9 millones de dólares y un aumento del 7% en el volumen total de pagos, llegando a 38.1 mil millones de dólares. La compañía elevó sus perspectivas de ingresos para todo el año, proyectando ahora un crecimiento del 7-8%. Los aspectos destacados incluyen:
- El EBITDA ajustado aumentó un 5% a 119.0 millones de dólares
- La pérdida neta se redujo a 1.4 millones de dólares, o ($0.02) por acción diluida
- El ingreso neto ajustado aumentó a 36.3 millones de dólares, o $0.59 por acción diluida
- La apalancamiento neto disminuyó a 4.8x
El crecimiento de Paysafe fue impulsado por un sólido rendimiento en todas las principales líneas de productos y la ejecución de iniciativas estratégicas. La compañía sigue enfocándose en expandir sus capacidades de ventas, optimizar su cartera y mejorar su estrategia de entrada al mercado.
Paysafe (NYSE: PSFE)는 2024년 2분기 강력한 실적을 발표했습니다. 수익이 9% 증가하여 4억 3,490만 달러에 달했고 총 결제 금액이 7% 증가하여 3,810억 달러에 달했습니다. 회사는 연간 수익 전망을 상향 조정했으며, 현재 7-8%의 성장을 예상하고 있습니다. 주요 하이라이트는 다음과 같습니다:
- 조정된 EBITDA가 5% 증가하여 1억 1,900만 달러에 도달했습니다
- 순손실은 140만 달러, 즉 희석 주당 ($0.02)로 줄어들었습니다
- 조정된 순이익은 3,630만 달러, 또는 희석 주당 $0.59로 증가했습니다
- 순부채비율은 4.8배로 감소했습니다
Paysafe의 성장은 모든 주요 제품 라인에서 강력한 실적과 전략적 이니셔티브의 실행에 의해 추진되었습니다. 회사는 판매 능력 확대, 포트폴리오 최적화 및 시장 진입 전략 강화를 계속해서 집중하고 있습니다.
Paysafe (NYSE: PSFE) a annoncé de bons résultats pour le deuxième trimestre 2024, avec une augmentation des revenus de 9 % à 439,9 millions de dollars et une hausse du volume total des paiements de 7 % à 38,1 milliards de dollars. L'entreprise a revu à la hausse ses prévisions de revenus pour l'année complète, projetant maintenant une croissance de 7 à 8 %. Les points forts incluent :
- Un EBITDA ajusté en hausse de 5 % à 119,0 millions de dollars
- La perte nette s'est réduite à 1,4 million de dollars, soit ($0,02) par action diluée
- Le bénéfice net ajusté a augmenté à 36,3 millions de dollars, soit $0,59 par action diluée
- Le ratio d'endettement net a diminué à 4,8x
La croissance de Paysafe a été soutenue par de solides performances dans toutes les principales lignes de produits et la mise en œuvre d'initiatives stratégiques. L'entreprise continue de se concentrer sur l'expansion de ses capacités de vente, l'optimisation de son portefeuille et l'amélioration de sa stratégie de mise sur le marché.
Paysafe (NYSE: PSFE) meldete starke Ergebnisse für das zweite Quartal 2024, mit einem Umsatzanstieg von 9 % auf 439,9 Millionen US-Dollar und einem Anstieg des gesamten Zahlungsvolumens um 7 % auf 38,1 Milliarden US-Dollar. Das Unternehmen hob seine Umsatzprognose für das Gesamtjahr an und erwartet nun ein Wachstum von 7-8 %. Zu den wichtigsten Höhepunkten gehören:
- Das bereinigte EBITDA stieg um 5 % auf 119,0 Millionen US-Dollar
- Der Nettoverlust verringerte sich auf 1,4 Millionen US-Dollar oder ($0,02) pro verwässerter Aktie
- Der bereinigte Nettogewinn stieg auf 36,3 Millionen US-Dollar oder $0,59 pro verwässerter Aktie
- Die Netto-Verschuldung sank auf 4,8x
Das Wachstum von Paysafe wurde durch starke Leistungen in allen wichtigen Produktlinien und die Umsetzung strategischer Initiativen vorangetrieben. Das Unternehmen konzentriert sich weiterhin darauf, die Verkaufsfähigkeiten auszubauen, sein Portfolio zu optimieren und seine Markteinführungsstrategie zu verbessern.
- Revenue increased 9% year-over-year to $439.9 million
- Total payment volume grew 7% to $38.1 billion
- Adjusted EBITDA rose 5% to $119.0 million
- Full-year revenue guidance raised to 7-8% growth
- Net leverage decreased from 5.0x to 4.8x
- Merchant Solutions segment revenue increased 13%
- Digital Wallets segment revenue grew 6%
- Net loss of $1.4 million, or ($0.02) per diluted share
- Unlevered free cash flow decreased from $76.2 million to $70.0 million
Insights
Paysafe's Q2 2024 results show positive momentum with revenue growth of
The reduction in net loss from
Notably, Paysafe has raised its full-year revenue outlook, projecting growth of
Paysafe's Q2 results reflect broader trends in the payments industry, particularly the shift towards digital transactions. The
The company's strategic focus on iGaming is paying dividends, benefiting from new partnerships and the legalization of online gambling in additional U.S. states. This positions Paysafe well in a rapidly expanding market segment. The partnership with Riot Games also demonstrates Paysafe's ability to tap into the lucrative gaming market, potentially opening up new revenue streams.
However, investors should note the slight decrease in adjusted EBITDA guidance for the full year, which could indicate some pressure on margins as the company invests in growth initiatives. The ongoing portfolio rationalization to reduce risk and improve earnings quality is a prudent move in the current economic climate, potentially setting the stage for more sustainable long-term growth.
Second Quarter 2024 Financial Highlights
(Metrics compared to second quarter of 2023, unless otherwise noted)
-
Revenue of
, increased$439.9 million 9% ; increased10% on a constant currency basis -
Total Payment Volume of
, increased$38.1 billion 7% -
Net loss of
, or ($1.4 million ) per diluted share, compared to net loss of$0.02 , or ($1.8 million ) per diluted share$0.03 -
Adjusted net income of
, or$36.3 million per diluted share, compared to$0.59 , or$34.7 million per diluted share$0.56 -
Adjusted EBITDA of
, increased$119.0 million 5% ; increased6% on a constant currency basis - Net leverage1 decreased to 4.8x as of June 30, 2024, compared to 5.0x as of December 31, 2023
Bruce Lowthers, CEO of Paysafe, commented: “Paysafe’s momentum continues with higher quality revenue growth accelerating to
Full Year 2024 Financial Guidance
($ in millions) (unaudited) |
|
Full Year 2024 - prior |
|
Full Year 2024 - updated |
|
Revenue |
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
Recent Strategic and Operational Highlights
- Continue to execute our 2024 new sales hires and portfolio optimization initiatives with each remaining on track or ahead of schedule, enhancing Paysafe’s go-to-market capabilities and drive long-term growth
- Sales team continues to execute on selling more value-add services in the quarter helping to boost Merchant Solutions' take rates
-
iGaming revenue growth continues to benefit from deals signed in second half of 2023 and
U.S. states that legalized online gambling in 2023 - Continue to rationalize portfolio to reduce risk and improve quality of earnings
- Established partnership with Riot Games to provide gamers with the ability to use paysafecard for a seamless and secure transactional experience
-
Capital returns – repurchased 686,396 shares for
$11.0 million
(1) |
Paysafe defines net leverage as net debt (total debt less cash and cash equivalents) divided by the sum of the last twelve months (LTM) Adjusted EBITDA. For the period ended June 30, 2024, total debt was |
Second Quarter of 2024 Summary of Consolidated Results
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
($ in thousands) (unaudited) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Revenue |
|
$ |
439,924 |
|
|
$ |
402,338 |
|
|
$ |
857,662 |
|
|
$ |
790,187 |
|
Gross Profit (excluding depreciation and amortization) |
|
$ |
256,099 |
|
|
$ |
235,724 |
|
|
$ |
503,464 |
|
|
$ |
464,634 |
|
Net (loss) / income |
|
$ |
(1,430 |
) |
|
$ |
(1,765 |
) |
|
$ |
1,626 |
|
|
$ |
(5,573 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA |
|
$ |
119,006 |
|
|
$ |
113,031 |
|
|
$ |
230,922 |
|
|
$ |
220,846 |
|
Adjusted net income |
|
$ |
36,279 |
|
|
$ |
34,678 |
|
|
$ |
71,585 |
|
|
$ |
67,754 |
|
Total revenue for the second quarter of 2024 was
Net loss for the second quarter decreased to
Adjusted net income for the second quarter increased
Adjusted EBITDA for the second quarter was
Second quarter operating cash flow was
Balance Sheet
As of June 30, 2024, total cash and cash equivalents was
Summary of Segment Results
|
|
Three Months Ended |
|
|
|
|
|
Six Months Ended |
|
|
|
|
|
||||||||||||
|
|
June 30, |
|
|
YoY |
|
June 30, |
|
|
YoY |
|
||||||||||||||
($ in thousands) (unaudited) |
|
2024 |
|
|
2023 |
|
|
change |
|
2024 |
|
|
2023 |
|
|
change |
|
||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Merchant Solutions |
|
$ |
254,978 |
|
|
$ |
225,698 |
|
|
|
13 |
% |
|
$ |
486,376 |
|
|
$ |
434,219 |
|
|
|
12 |
% |
|
Digital Wallets |
|
$ |
189,673 |
|
|
$ |
179,079 |
|
|
|
6 |
% |
|
$ |
380,130 |
|
|
$ |
360,527 |
|
|
|
5 |
% |
|
Intersegment |
|
$ |
(4,727 |
) |
|
$ |
(2,439 |
) |
|
|
94 |
% |
|
$ |
(8,844 |
) |
|
$ |
(4,559 |
) |
|
|
94 |
% |
|
Total Revenue |
|
$ |
439,924 |
|
|
$ |
402,338 |
|
|
|
9 |
% |
|
$ |
857,662 |
|
|
$ |
790,187 |
|
|
|
9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Merchant Solutions |
|
$ |
56,511 |
|
|
$ |
55,769 |
|
|
|
1 |
% |
|
$ |
105,689 |
|
|
$ |
108,105 |
|
|
|
-2 |
% |
|
Digital Wallets |
|
$ |
82,413 |
|
|
$ |
77,211 |
|
|
|
7 |
% |
|
$ |
165,687 |
|
|
$ |
156,420 |
|
|
|
6 |
% |
|
Corporate |
|
$ |
(19,918 |
) |
|
$ |
(19,949 |
) |
|
|
0 |
% |
|
$ |
(40,454 |
) |
|
$ |
(43,679 |
) |
|
|
7 |
% |
|
Total Adjusted EBITDA |
|
$ |
119,006 |
|
|
$ |
113,031 |
|
|
|
5 |
% |
|
$ |
230,922 |
|
|
$ |
220,846 |
|
|
|
5 |
% |
|
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 |
Tuesday, August 13 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 |
877-407-0752 ( |
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 25 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 Statements of Operations (unaudited)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
($ in thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Revenue |
|
$ |
439,924 |
|
|
$ |
402,338 |
|
|
$ |
857,662 |
|
|
$ |
790,187 |
|
Cost of services (excluding depreciation and amortization) |
|
|
183,825 |
|
|
|
166,614 |
|
|
|
354,198 |
|
|
|
325,553 |
|
Selling, general and administrative |
|
|
150,059 |
|
|
|
133,600 |
|
|
|
294,867 |
|
|
|
261,911 |
|
Depreciation and amortization |
|
|
68,630 |
|
|
|
66,425 |
|
|
|
136,940 |
|
|
|
129,972 |
|
Impairment expense on goodwill and intangible assets |
|
|
23 |
|
|
|
193 |
|
|
|
676 |
|
|
|
275 |
|
Restructuring and other costs |
|
|
728 |
|
|
|
1,340 |
|
|
|
1,180 |
|
|
|
3,330 |
|
Loss on disposal of subsidiary and other assets, net |
|
|
144 |
|
|
|
— |
|
|
|
321 |
|
|
|
— |
|
Operating income |
|
|
36,515 |
|
|
|
34,166 |
|
|
|
69,480 |
|
|
|
69,146 |
|
Other income, net |
|
|
4,397 |
|
|
|
7,376 |
|
|
|
16,752 |
|
|
|
9,923 |
|
Interest expense, net |
|
|
(37,135 |
) |
|
|
(36,762 |
) |
|
|
(72,100 |
) |
|
|
(74,218 |
) |
Income before taxes |
|
|
3,777 |
|
|
|
4,780 |
|
|
|
14,132 |
|
|
|
4,851 |
|
Income tax expense |
|
|
5,207 |
|
|
|
6,545 |
|
|
|
12,506 |
|
|
|
10,424 |
|
Net (loss) / income |
|
$ |
(1,430 |
) |
|
$ |
(1,765 |
) |
|
$ |
1,626 |
|
|
$ |
(5,573 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) / income per share – basic |
|
$ |
(0.02 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.03 |
|
|
$ |
(0.09 |
) |
Net (loss) / income per share – diluted |
|
$ |
(0.02 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.03 |
|
|
$ |
(0.09 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) / income |
|
$ |
(1,430 |
) |
|
$ |
(1,765 |
) |
|
$ |
1,626 |
|
|
$ |
(5,573 |
) |
Other comprehensive (loss) / income, net of tax of |
|
|
|
|
|
|
|
|
|
|
|
|
||||
(Loss)/gain on foreign currency translation |
|
|
(6,055 |
) |
|
|
8,204 |
|
|
|
(13,667 |
) |
|
|
10,378 |
|
Total comprehensive (loss) / income |
|
$ |
(7,485 |
) |
|
$ |
6,439 |
|
|
$ |
(12,041 |
) |
|
$ |
4,805 |
|
Paysafe Limited Consolidated Net (loss) / income per share
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
June 30, |
|
|
June 30, |
|
||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Numerator ($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) / income - basic |
$ |
(1,430 |
) |
|
$ |
(1,765 |
) |
|
$ |
1,626 |
|
|
$ |
(5,573 |
) |
Net (loss) / income - diluted |
$ |
(1,430 |
) |
|
$ |
(1,765 |
) |
|
$ |
1,626 |
|
|
$ |
(5,573 |
) |
Denominator (in millions) |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares – basic |
|
60.7 |
|
|
|
61.5 |
|
|
|
61.2 |
|
|
|
61.2 |
|
Weighted average shares – diluted (1) |
|
60.7 |
|
|
|
61.5 |
|
|
|
61.7 |
|
|
|
61.2 |
|
Net (loss) / income per share |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
$ |
(0.02 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.03 |
|
|
$ |
(0.09 |
) |
Diluted |
$ |
(0.02 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.03 |
|
|
$ |
(0.09 |
) |
(1) | The denominator used in the calculation of diluted net income per share for the six months ended June 30, 2024, includes an additional 0.5 million shares, representing the dilutive effect of the Company's restricted stock units. |
|
Paysafe Limited Condensed Consolidated Balance Sheets (unaudited)
($ in thousands) |
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
Assets |
|
|
|
|
|
|
||
Current assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
222,382 |
|
|
$ |
202,322 |
|
Customer accounts and other restricted cash |
|
|
1,069,269 |
|
|
|
1,295,947 |
|
Accounts receivable, net of allowance for credit losses of |
|
|
177,323 |
|
|
|
162,081 |
|
Settlement receivables, net of allowance for credit losses of |
|
|
166,877 |
|
|
|
171,224 |
|
Prepaid expenses and other current assets |
|
|
66,810 |
|
|
|
74,919 |
|
Total current assets |
|
|
1,702,661 |
|
|
|
1,906,493 |
|
Deferred tax assets |
|
|
77,273 |
|
|
|
77,273 |
|
Property, plant and equipment, net |
|
|
22,175 |
|
|
|
17,213 |
|
Operating lease right-of-use assets |
|
|
26,110 |
|
|
|
22,120 |
|
Derivative financial assets |
|
|
9,888 |
|
|
|
10,427 |
|
Intangible assets, net |
|
|
1,062,881 |
|
|
|
1,163,935 |
|
Goodwill |
|
|
2,000,689 |
|
|
|
2,023,402 |
|
Other assets – non-current |
|
|
8,689 |
|
|
|
6,838 |
|
Total non-current assets |
|
|
3,207,705 |
|
|
|
3,321,208 |
|
Total assets |
|
$ |
4,910,366 |
|
|
$ |
5,227,701 |
|
|
|
|
|
|
|
|
||
Liabilities and equity |
|
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
|
||
Accounts payable and other liabilities |
|
$ |
190,541 |
|
|
$ |
202,699 |
|
Short-term debt |
|
|
10,190 |
|
|
|
10,190 |
|
Funds payable and amounts due to customers |
|
|
1,254,680 |
|
|
|
1,477,017 |
|
Operating lease liabilities – current |
|
|
8,073 |
|
|
|
8,233 |
|
Contingent consideration payable – current |
|
|
9,908 |
|
|
|
11,828 |
|
Liability for share-based compensation – current |
|
|
3,405 |
|
|
|
2,701 |
|
Total current liabilities |
|
|
1,476,797 |
|
|
|
1,712,668 |
|
Non-current debt |
|
|
2,441,205 |
|
|
|
2,491,643 |
|
Operating lease liabilities – non-current |
|
|
21,740 |
|
|
|
16,963 |
|
Deferred tax liabilities |
|
|
103,618 |
|
|
|
111,705 |
|
Warrant liabilities |
|
|
1,283 |
|
|
|
1,423 |
|
Liability for share-based compensation – non-current |
|
|
2,545 |
|
|
|
3,108 |
|
Contingent consideration payable – non-current |
|
|
325 |
|
|
|
6,878 |
|
Total non-current liabilities |
|
|
2,570,716 |
|
|
|
2,631,720 |
|
Total liabilities |
|
|
4,047,513 |
|
|
|
4,344,388 |
|
Commitments and contingent liabilities |
|
|
|
|
|
|
||
Total shareholders' equity |
|
|
862,853 |
|
|
|
883,313 |
|
Total liabilities and shareholders' equity |
|
$ |
4,910,366 |
|
|
$ |
5,227,701 |
|
Paysafe Limited Condensed Consolidated Statements of Cash Flow (unaudited)
|
|
Six Months Ended |
|
|||||
|
|
June 30, |
|
|||||
($ in thousands) |
|
2024 |
|
|
2023 (1) |
|
||
Cash flows from operating activities |
|
|
|
|
|
|
||
Net income / (loss) |
|
$ |
1,626 |
|
|
$ |
(5,573 |
) |
Adjustments for non-cash items: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
137,461 |
|
|
|
129,972 |
|
Unrealized foreign exchange (gain) / loss |
|
|
(3,872 |
) |
|
|
7,207 |
|
Deferred tax (benefit) / expense |
|
|
(6,191 |
) |
|
|
8,104 |
|
Interest expense, net |
|
|
(4,962 |
) |
|
|
(666 |
) |
Share-based compensation |
|
|
22,325 |
|
|
|
18,123 |
|
Other income, net |
|
|
(9,542 |
) |
|
|
(14,627 |
) |
Impairment expense on goodwill and intangible assets |
|
|
676 |
|
|
|
275 |
|
Allowance for credit losses and other |
|
|
19,205 |
|
|
|
9,241 |
|
Loss on disposal of subsidiary and other assets, net |
|
|
321 |
|
|
|
— |
|
Non-cash lease expense |
|
|
4,335 |
|
|
|
4,501 |
|
Movements in working capital: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
(31,131 |
) |
|
|
(17,648 |
) |
Prepaid expenses and other current assets |
|
|
(3,646 |
) |
|
|
(7,488 |
) |
Accounts payable and other liabilities |
|
|
(10,909 |
) |
|
|
(37,174 |
) |
Income tax receivable |
|
|
(2,721 |
) |
|
|
(24,033 |
) |
Net cash flows from operating activities |
|
|
112,975 |
|
|
|
70,214 |
|
Cash flows in investing activities |
|
|
|
|
|
|
||
Purchase of property, plant & equipment |
|
|
(8,227 |
) |
|
|
(6,339 |
) |
Purchase of merchant portfolios |
|
|
— |
|
|
|
(23,488 |
) |
Other intangible asset expenditures |
|
|
(46,666 |
) |
|
|
(49,487 |
) |
Receipts under derivative financial instruments |
|
|
4,949 |
|
|
|
4,784 |
|
Cash inflow from merchant reserves |
|
|
6,510 |
|
|
|
— |
|
Other investing activities, net |
|
|
1,626 |
|
|
|
(478 |
) |
Net cash flows used in investing activities |
|
|
(41,808 |
) |
|
|
(75,008 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
||
Cash settled equity awards |
|
|
— |
|
|
|
(484 |
) |
Repurchases of shares withheld for taxes |
|
|
(5,320 |
) |
|
|
(6,709 |
) |
Purchase of treasury shares |
|
|
(25,000 |
) |
|
|
— |
|
Settlement funds - merchants and customers, net |
|
|
(195,156 |
) |
|
|
(423,099 |
) |
Repurchase of borrowings |
|
|
(67,928 |
) |
|
|
(83,635 |
) |
Proceeds from loans and borrowings |
|
|
129,291 |
|
|
|
55,781 |
|
Repayments of loans and borrowings |
|
|
(73,412 |
) |
|
|
(55,044 |
) |
Proceeds under line of credit |
|
|
450,000 |
|
|
|
450,000 |
|
Repayments under line of credit |
|
|
(450,000 |
) |
|
|
(450,000 |
) |
Contingent consideration paid |
|
|
(8,597 |
) |
|
|
(7,642 |
) |
Net cash flows used in financing activities |
|
|
(246,122 |
) |
|
|
(520,832 |
) |
Effect of foreign exchange rate changes |
|
|
(31,663 |
) |
|
|
31,553 |
|
Decrease in cash and cash equivalents, including customer accounts and other restricted cash during the period |
|
$ |
(206,618 |
) |
|
$ |
(494,073 |
) |
Cash and cash equivalents, including customer accounts and other restricted cash at beginning of the period |
|
|
1,498,269 |
|
|
|
2,127,195 |
|
Cash and cash equivalents at end of the period, including customer accounts and other restricted cash |
|
$ |
1,291,651 |
|
|
$ |
1,633,122 |
|
|
|
Six Months Ended |
|
|||||
|
|
June 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Cash and cash equivalents |
|
$ |
222,382 |
|
|
$ |
206,703 |
|
Customer accounts and other restricted cash |
|
|
1,069,269 |
|
|
|
1,426,419 |
|
Total cash and cash equivalents, including customer accounts and other restricted cash |
|
$ |
1,291,651 |
|
|
$ |
1,633,122 |
|
(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) / Income to Adjusted EBITDA
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
($ in thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net (loss) / income |
|
$ |
(1,430 |
) |
|
$ |
(1,765 |
) |
|
$ |
1,626 |
|
|
$ |
(5,573 |
) |
Income tax expense |
|
|
5,207 |
|
|
|
6,545 |
|
|
|
12,506 |
|
|
|
10,424 |
|
Interest expense, net |
|
|
37,135 |
|
|
|
36,762 |
|
|
|
72,100 |
|
|
|
74,218 |
|
Depreciation and amortization |
|
|
68,630 |
|
|
|
66,425 |
|
|
|
136,940 |
|
|
|
129,972 |
|
Share-based compensation expense |
|
|
12,966 |
|
|
|
10,907 |
|
|
|
22,325 |
|
|
|
18,123 |
|
Impairment expense on goodwill and intangible assets |
|
|
23 |
|
|
|
193 |
|
|
|
676 |
|
|
|
275 |
|
Restructuring and other costs |
|
|
728 |
|
|
|
1,340 |
|
|
|
1,180 |
|
|
|
3,330 |
|
Loss on disposal of subsidiaries and other assets, net |
|
|
144 |
|
|
|
— |
|
|
|
321 |
|
|
|
— |
|
Other income, net |
|
|
(4,397 |
) |
|
|
(7,376 |
) |
|
|
(16,752 |
) |
|
|
(9,923 |
) |
Adjusted EBITDA |
|
$ |
119,006 |
|
|
$ |
113,031 |
|
|
$ |
230,922 |
|
|
$ |
220,846 |
|
Reconciliation of Operating Cash Flow to Non-GAAP Unlevered Free Cash Flow
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
($ in thousands) |
|
2024 |
|
|
2023 (1) |
|
|
2024 |
|
|
2023 (1) |
|
||||
Net cash inflows from operating activities |
|
$ |
54,140 |
|
|
$ |
50,200 |
|
|
$ |
112,975 |
|
|
$ |
70,214 |
|
Capital expenditure |
|
|
(30,468 |
) |
|
|
(25,458 |
) |
|
|
(54,893 |
) |
|
|
(55,826 |
) |
Cash paid for interest |
|
|
45,731 |
|
|
|
45,991 |
|
|
|
77,062 |
|
|
|
74,884 |
|
Payments relating to Restructuring and other costs |
|
|
598 |
|
|
|
5,481 |
|
|
|
4,051 |
|
|
|
29,165 |
|
Unlevered Free Cash Flow |
|
$ |
70,001 |
|
|
$ |
76,214 |
|
|
$ |
139,195 |
|
|
$ |
118,437 |
|
Adjusted EBITDA |
|
|
119,006 |
|
|
|
113,031 |
|
|
|
230,922 |
|
|
|
220,846 |
|
(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" 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 |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
($ in thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Revenue |
|
$ |
439,924 |
|
|
$ |
402,338 |
|
|
$ |
857,662 |
|
|
$ |
790,187 |
|
Cost of services (excluding depreciation and amortization) |
|
|
183,825 |
|
|
|
166,614 |
|
|
|
354,198 |
|
|
|
325,553 |
|
Depreciation and amortization |
|
|
68,630 |
|
|
|
66,425 |
|
|
|
136,940 |
|
|
|
129,972 |
|
Gross Profit (1) |
|
$ |
187,469 |
|
|
$ |
169,299 |
|
|
$ |
366,524 |
|
|
$ |
334,662 |
|
Depreciation and amortization |
|
|
68,630 |
|
|
|
66,425 |
|
|
|
136,940 |
|
|
|
129,972 |
|
Gross Profit (excluding depreciation and amortization) |
|
$ |
256,099 |
|
|
$ |
235,724 |
|
|
$ |
503,464 |
|
|
$ |
464,634 |
|
(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 |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
($ in thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net (loss) / income |
|
$ |
(1,430 |
) |
|
$ |
(1,765 |
) |
|
$ |
1,626 |
|
|
$ |
(5,573 |
) |
Other non operating income, net (1) |
|
|
(1,864 |
) |
|
|
(4,814 |
) |
|
|
(11,638 |
) |
|
|
(5,578 |
) |
Impairment expense on goodwill and intangible assets |
|
|
23 |
|
|
|
193 |
|
|
|
676 |
|
|
|
275 |
|
Amortization of acquired assets (2) |
|
|
33,527 |
|
|
|
34,095 |
|
|
|
67,130 |
|
|
|
67,768 |
|
Restructuring and other costs |
|
|
728 |
|
|
|
1,340 |
|
|
|
1,180 |
|
|
|
3,330 |
|
Loss on disposal of subsidiaries and other assets, net |
|
|
144 |
|
|
|
— |
|
|
|
321 |
|
|
|
— |
|
Share-based compensation expense |
|
|
12,966 |
|
|
|
10,907 |
|
|
|
22,325 |
|
|
|
18,123 |
|
Discrete tax items (3) |
|
|
4,608 |
|
|
|
5,406 |
|
|
|
10,073 |
|
|
|
10,885 |
|
Income tax expense on non-GAAP adjustments (4) |
|
|
(12,423 |
) |
|
|
(10,684 |
) |
|
|
(20,108 |
) |
|
|
(21,476 |
) |
Adjusted net income |
|
$ |
36,279 |
|
|
$ |
34,678 |
|
|
$ |
71,585 |
|
|
$ |
67,754 |
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares - diluted |
|
|
60.7 |
|
|
|
61.5 |
|
|
|
61.7 |
|
|
|
61.2 |
|
Adjusted diluted impact |
|
|
0.5 |
|
|
|
0.1 |
|
|
|
0.0 |
|
|
|
0.3 |
|
Adjusted weighted average shares - diluted |
|
|
61.2 |
|
|
|
61.6 |
|
|
|
61.7 |
|
|
|
61.5 |
|
(1) | Other non-operating 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, gain / loss on foreign exchange and the release of certain provisions. |
|
(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 |
|
|
Six Months Ended |
|
||||||||||
|
June 30, |
|
|
June 30, |
|
||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Numerator ($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted net income - basic |
$ |
36,279 |
|
|
$ |
34,678 |
|
|
$ |
71,585 |
|
|
$ |
67,754 |
|
Adjusted net income - diluted |
$ |
36,279 |
|
|
$ |
34,678 |
|
|
$ |
71,585 |
|
|
$ |
67,754 |
|
Denominator (in millions) |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares – basic |
|
60.7 |
|
|
|
61.5 |
|
|
|
61.2 |
|
|
|
61.2 |
|
Adjusted weighted average shares – diluted (1) |
|
61.2 |
|
|
|
61.6 |
|
|
|
61.7 |
|
|
|
61.5 |
|
Adjusted net income per share |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
$ |
0.60 |
|
|
$ |
0.56 |
|
|
$ |
1.17 |
|
|
$ |
1.11 |
|
Diluted |
$ |
0.59 |
|
|
$ |
0.56 |
|
|
$ |
1.16 |
|
|
$ |
1.10 |
|
(1) | The denominator used in the calculation of diluted adjusted net income per share for the three and six months ended June 30, 2024 and 2023 includes the dilutive effect of the Company's restricted stock units. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240812783901/en/
Media
Crystal Wright
Paysafe
crystal.wright@paysafe.com
+1 (904) 328-7740
Investors
Matthew Parker
Paysafe
+1 (904) 663-2143
matthew.parker@paysafe.com
Source: Paysafe Limited
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