Payfare Announces Third Quarter 2024 Financial Results
Payfare reported strong Q3 2024 financial results with revenue reaching $59.0 million, a 25% increase year-over-year. The company achieved net income of $4.5 million ($0.09 per share) and adjusted net income of $8.1 million ($0.17 per share). Active users grew 24% to 1,502,028, while total gross dollar value increased 29% to $3.8 billion. The company maintains a strong cash position of over $100 million. However, Payfare announced that its DoorDash DasherDirect card program agreement will not be renewed beyond early 2025. In response, the Board initiated a strategic review process to enhance value and address concentration risks.
Payfare ha riportato risultati finanziari forti per il terzo trimestre del 2024, con ricavi che hanno raggiunto 59,0 milioni di dollari, un aumento del 25% rispetto all'anno precedente. L'azienda ha ottenuto un reddito netto di 4,5 milioni di dollari (0,09 dollari per azione) e un reddito netto rettificato di 8,1 milioni di dollari (0,17 dollari per azione). Gli utenti attivi sono aumentati del 24%, raggiungendo 1.502.028, mentre il valore totale lordo in dollari è aumentato del 29%, raggiungendo 3,8 miliardi di dollari. L'azienda mantiene una solida posizione di liquidità con oltre 100 milioni di dollari. Tuttavia, Payfare ha annunciato che il contratto per il programma della carta DasherDirect di DoorDash non sarà rinnovato oltre la prima parte del 2025. In risposta, il Consiglio ha avviato un processo di revisione strategica per accrescere il valore e affrontare i rischi di concentrazione.
Payfare reportó resultados financieros fuertes para el tercer trimestre de 2024, con ingresos alcanzando 59,0 millones de dólares, un aumento del 25% en comparación con el año anterior. La compañía logró un ingreso neto de 4,5 millones de dólares (0,09 dólares por acción) y un ingreso neto ajustado de 8,1 millones de dólares (0,17 dólares por acción). Los usuarios activos crecieron un 24% hasta 1.502.028, mientras que el valor total bruto en dólares aumentó un 29% hasta 3,8 mil millones de dólares. La compañía mantiene una sólida posición de efectivo de más de 100 millones de dólares. Sin embargo, Payfare anunció que su acuerdo con el programa de tarjeta DasherDirect de DoorDash no será renovado más allá de principios de 2025. En respuesta, la Junta inició un proceso de revisión estratégica para aumentar el valor y abordar los riesgos de concentración.
페이페어는 2024년 3분기 강력한 재무 결과를 발표했으며, 수익은 5,900만 달러에 이르렀고, 이는 전년 대비 25% 증가한 수치입니다. 이 회사는 450만 달러의 순이익 (주당 0.09달러) 및 조정된 순이익 810만 달러(주당 0.17달러)를 기록했습니다. 활성 사용자는 24% 증가하여 1,502,028명이 되었고, 총 총매출이 29% 증가하여 38억 달러에 이릅니다. 회사는 1억 달러 이상의 강한 현금 보유를 유지하고 있습니다. 그러나 페이페어는 도어대시 다셔다이렉트 카드 프로그램 협정을 2025년 초 이후에는 갱신하지 않을 것이라고 발표했습니다. 이에 대해 이사회는 가치를 높이고 집중 위험을 해결하기 위한 전략적 검토 프로세스를 시작했습니다.
Payfare a annoncé des résultats financiers solides pour le troisième trimestre de 2024, avec un chiffre d'affaires atteignant 59,0 millions de dollars, soit une augmentation de 25 % par rapport à l'année précédente. L'entreprise a réalisé un revenu net de 4,5 millions de dollars (0,09 dollar par action) et un revenu net ajusté de 8,1 millions de dollars (0,17 dollar par action). Le nombre d'utilisateurs actifs a augmenté de 24 % pour atteindre 1.502.028, tandis que la valeur brute totale en dollars a augmenté de 29 % pour s'établir à 3,8 milliards de dollars. L'entreprise maintient une position de liquidités solide de plus de 100 millions de dollars. Cependant, Payfare a annoncé que son accord pour le programme de carte DasherDirect de DoorDash ne serait pas renouvelé au-delà du début de 2025. En réponse, le conseil d'administration a initié un processus de révision stratégique pour accroître la valeur et aborder les risques de concentration.
Payfare berichtete über starke Finanzzahlen für das dritte Quartal 2024 mit einem Umsatz von 59,0 Millionen Dollar, was einem Anstieg von 25% im Vergleich zum Vorjahr entspricht. Das Unternehmen erzielte einen Nettogewinn von 4,5 Millionen Dollar (0,09 Dollar pro Aktie) sowie einen bereinigten Nettogewinn von 8,1 Millionen Dollar (0,17 Dollar pro Aktie). Die aktiven Nutzer wuchsen um 24% auf 1.502.028, während der gesamte Bruttowert in Dollar um 29% auf 3,8 Milliarden Dollar anstieg. Das Unternehmen hält eine starke Bargeldposition von über 100 Millionen Dollar. Allerdings gab Payfare bekannt, dass der Vertrag für das DoorDash DasherDirect-Kartenprogramm nicht über Anfang 2025 hinaus erneuert wird. In Reaktion darauf initiierte der Vorstand einen strategischen Überprüfungsprozess, um den Wert zu steigern und Konzentrationsrisiken zu adressieren.
- Revenue increased 25% YoY to $59.0 million
- Active users grew 24% to 1.5 million
- Gross profit up 31% to $16.0 million
- Free cash flow increased 44% to $5.4 million
- Strong cash position of over $100 million
- Long-term extension agreement secured with Lyft
- New partnership with ADP for Canadian market EWA product
- Net income decreased from $4.8M in Q3 2023 to $4.5M in Q3 2024
- DoorDash DasherDirect card program agreement not renewed beyond early 2025
- Strategic review initiated due to concentration risks
Payfare generated net income of
Q3 2024 Highlights:
- Increased revenue to
$59.0 million $11.8 million 25% ) increase compared to the same period in 2023. - Ended Q3 2024 with 1,502,028 active users1, up by 290,753 (+
24% ) compared to the active users1 count as at the end of Q3 2023. - Total gross dollar value (Total GDV)1 in Q3 2024 was
$3.8 billion $0.8 billion 29% ) over Q3 2023. - Gross Profit1 of
$16.0 million $3.8 million 31% ) over the same period in 2023. - Net income of
$4.5 million $0.09 $4.8 million - Adjusted net income1 of
$8.1 million $0.17 $0.6 million 8% ) over the same period in 2023. - Adjusted EBITDA1 of
$7.8 million $1.5 million 24% ) compared to the same period in 2023. - Free cash flow1 of
$5.4 million $1.7 million 44% ) compared to the same period in 2023. - As at September 30, 2024, Payfare has over
$100 million - On July 16, 2024, the Company announced the formation of a Strategic Advisory Board led by a new seasoned strategy and corporate development executive to guide the Company's international expansion opportunities (including EWA platform) and achieve global scale efficiently and effectively.
- On July 25, 2024, the Company announced the long-term extension of its agreement with Lyft Inc. in respect to the Lyft Direct Program, which Payfare currently powers. The extension means drivers on the Lyft program will continue to benefit from free instant pay, a feature rich digital banking platform and a rich cashback rewards program that is offered through Lyft's partnership with Payfare.
- On August 27, 2024, the Company launched an upgraded version of the Lyft Direct debit card and banking app with a range of features that include: (a) Lyft Direct Savings – a high-yield savings account, (b) Balance Protection – which provides qualifying cardholders up to
US to cover unforeseen costs, (c) New Cashback Rewards for elite drivers, (d) Wellness Perks by Avibra, which provides access to a comprehensive suite of health and financial wellness tools, (e) Spend Insights – which helps with enhanced financial decision making and provides control of personal budgets, and (f) Cash ATM Deposits at participating ATM locations.$200 - On September 26, 2024, Payfare announced that its core services agreements related to the DoorDash DasherDirect card program will not be renewed beyond the current term in early 2025. A transition and wind-down plan for the program has not yet been agreed to with DoorDash and it is currently unknown when the financial impact, including on revenue, net income, key performance indicators and certain non-GAAP measures utilized by the Company will be experienced by Payfare from the non-renewal.
- On September 29, 2024, the Board of Directors initiated a strategic review process to explore and evaluate a broad range of potential options for the Company to enhance value, support conversion of potential new opportunities and alleviate concentration risks.
- Subsequent to quarter-end, Payfare successfully launched a pilot EWA product with Automatic Data Processing Inc. ("ADP"), a leading global provider of Human Capital Management solutions, to offer EWA to the Canadian market.
Conference Call
Management will be hosting a conference call on Wednesday, November 6, 2024, at 6:30 PM ET to discuss the Company's financial results for the third quarter of 2024. A short presentation in connection with the conference call will be made available ahead of time on the Company's website at https://corp.payfare.com/investors/. Management will also host a live question and answer session on the conference call with analysts.
To access the conference call, please dial (289) 514-5100 or 1-800-717-1738. Please call the conference telephone number 10-15 minutes prior to the start time so that you are in the queue for an operator to assist in registering and patching you through.
An archived recording of the conference call will be available until December 6, 2024. To listen to the recording, call (289) 819-1325 or 1-888-660-6264 and enter passcode 70127#.
About Payfare (TSX:PAY, OTCQX: PYFRF)
Payfare is a leading, international Earned Wage Access ("EWA") company powering instant access to earnings through an award-winning digital banking platform for today's workforce. Payfare partners with leading e-commerce marketplaces, payroll platforms, and employers to provide financial security and inclusion for all workers.
1Non-IFRS and Supplementary Financial Measures
This press release contains references to "active users", "Total gross dollar value ("Total GDV"), "adjusted net income", "adjusted net income per share", "EBITDA", "Adjusted EBITDA", "free cash flow" and "gross profit", which are not measures prescribed by IFRS Accounting Standards ("IFRS"). These supplementary financial measures are provided as additional information to complement IFRS measures by providing a further understanding of our results of operations from management's perspective, to provide investors and security analysts with supplemental measures to evaluate the financial performance of the Company and highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. Management also uses non-IFRS and supplementary financial measures to facilitate operating performance comparisons from period to period, prepare annual operating budgets and strategic business plans and to evaluate and price potential acquisitions.
Accordingly, non-IFRS and supplementary financial measures should not be considered in isolation or as a substitute for analysis of our financial information reported under IFRS. Such measures do not have any standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other corporations. The non-IFRS and supplementary financial measures are not subject to standard industry definition and our definitions and method of calculation may differ from other issuers and therefore may not be comparable to similar measures presented by other issuers.
The Company determines the number of users to its services based on active users. "Active users" represent users who have loaded earnings and direct deposits on their card in the period.
Total gross dollar value ("Total GDV") is defined as the aggregate dollar amount of active user earnings and direct deposits loaded on their payment card during the period.
"EBITDA" means net income (loss) before amortization and depreciation expenses, foreign exchange gain (loss), amortization of deferred income, finance and interest income/ costs, current tax expense and change in fair value of derivative liability.
"Adjusted EBITDA" adjusts EBITDA for share-based compensation expense, restructuring costs and non-recurring expense items. Non-recurring expense items are transactions or events which management believes will not re-occur within the foreseeable future and includes legal and professional fees related to regulatory matters, claim settlements, acquisition, divestiture, asset impairment charges and going public transaction.
The table below reconciles net income to EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||
In CAD $ | 2024 | 2023 | 2024 | 2023 | ||
Net income | $ 4,463,222 | $ 4,810,360 | $ 8,212,761 | |||
Add: | ||||||
Current tax expense | 34,629 | 20,874 | 84,230 | 66,242 | ||
Finance income | (875,557) | (795,305) | (2,291,157) | (1,565,277) | ||
Other income | - | - | - | (9,397) | ||
Foreign exchange (gain) loss | 528,569 | (445,690) | (447,081) | (20,009) | ||
Amortization of intangible assets | 1,487,379 | 942,531 | 4,153,641 | 2,227,776 | ||
Depreciation of building, property and equipment | 25,734 | 17,812 | 79,733 | 87,615 | ||
EBITDA | 5,663,976 | 4,549,952 | 16,046,974 | 8,999,711 | ||
Adjustments: | ||||||
Restructuring expense/other | 514,924 | 706,185 | 1,563,513 | 2,009,504 | ||
Share based compensation | 1,596,831 | 1,040,863 | 2,766,769 | 3,078,369 | ||
Adjusted EBITDA | $ 7,775,731 | $ 20,377,256 | ||||
"Adjusted net income" adjusts net income (loss) for amortization of intangible assets, depreciation of building, property & equipment, share-based compensation expense, restructuring costs and non-recurring expense items. Non-recurring expense items are transactions or events which management believes will not re-occur within the foreseeable future and includes legal and professional fees related to regulatory matters, claim settlements, acquisition, divestiture, asset impairment charges and going public transaction.
The table below reconciles net income to Adjusted net income for the three and nine months ended September 30, 2024 and 2023.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||
In CAD $ | 2024 | 2023 | 2024 | 2023 | ||
Net income | $ 4,463,222 | $ 4,810,360 | $ 8,212,761 | |||
Add: | ||||||
Amortization of intangible assets | 1,487,379 | 942,531 | 4,153,641 | 2,227,776 | ||
Depreciation of building, property and equipment | 25,734 | 17,182 | 79,733 | 87,615 | ||
Restructuring expense/other | 514,924 | 706,185 | 1,563,513 | 2,009,504 | ||
Share based compensation | 1,596,831 | 1,040,863 | 2,766,769 | 3,078,369 | ||
Adjusted net income | $ 8,088,090 | $ 7,517,121 | $ 23,031,264 | $ 15,616,025 | ||
"Adjusted net income per share" is calculated as Adjusted net income divided by the basic weighted average number of shares outstanding during the period.
The Company defines its "free cash flow" as cash from operating activities less cash used in purchase of building, property and equipment and additions to intangible assets.
The table below reconciles cash from operating activities to free cash flow for the three and nine ended September 30, 2024 and 2023.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||
In CAD $ | 2024 | 2023 | 2024 | 2023 | ||
Cash from operating activities | $ 26,431,141 | $ 14,603,936 | ||||
Less: Cash used in investing activities | ||||||
Purchase of building, property and equipment | - | (15,495) | (41,252) | (19,708) | ||
Additions to intangible assets | (1,896,269) | (1,506,530) | (5,497,115) | (4,067,629) | ||
Free cash flow | $ 20,892,774 | |||||
The Company defines "gross profit" as revenue less cost of services.
Additional information on these measures may be found under the heading "Definitions – IFRS, Additional GAAP and Non-GAAP Measures" in the interim MD&A for the three and nine months ended September 30, 2024 which is available under Payfare's profile on SEDAR+ at www.sedarplus.ca and is incorporated by reference to this press release.
Cautionary Statement Regarding Forward-Looking Information
This press release also contains forward-looking information within the meaning of applicable securities legislation, which reflects Payfare's current expectations regarding future events as of the date hereof. Such forward-looking information may include but are not limited to statements regarding the Company's future financial conditions, results of operations, plans, objectives, performance or business developments and includes statements on rapid international expansion opportunities and achieving global scale efficiently and effectively, achieving profitability, expansion into the earned wage access vertical for hourly paid employees, the actual timing for the non-renewal and eventual termination of the Company's services agreement with DoorDash and the anticipated material impact on future revenues, earnings, key performance indicators and Non-GAAP measures, potential new EWA programs in both the gig economy and employee verticals and aggregate potential new GDV opportunities being able to mitigate the impact of the non-renewal of the agreement with DoorDash, and the strategic review process to explore and evaluate potential options for the Company to enhance value, support conversion of potential new opportunities and alleviate concentration risks. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Payfare's control, that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks include the factors discussed under the "Risk Factors" section in Payfare's MD&A for the year ended December 31, 2023 and factors discussed from time to time in Payfare's filings with the Canadian Securities Authorities, copies of which can be found under Payfare's profile on the SEDAR+ website at www.sedarplus.ca. Other factors that could cause actual results or events to differ materially include the inability of Payfare to launch its new programs or platforms including for earned wage access in a timely manner, the lack of experience or resources to enter into the EWA vertical, the regulatory uncertainty and constraints around EWA services, the economic viability of new programs and platforms, the inability to scale Payfare's operations to manage the increased volume of new cardholder sign-ups, active users or transactions, loss or termination of existing service agreements with one of its large gig platform clients, the impact of an inflationary recession and rising costs of goods and services on Payfare's business model, Payfare's ability to finance and support new programs and platforms, a general decline in the credit markets or gig economy in
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SOURCE Payfare Inc.
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