Latest news with #Paysafe
Business Wire
27-05-2025
- Business
- Business Wire
Paysafe to Participate in the RBC Financial Technology Conference on June 10
LONDON--(BUSINESS WIRE)--Paysafe Limited (NYSE: PSFE), a global payments platform, today announced that Chief Financial Officer, John Crawford, will participate in a fireside chat at the RBC Capital Markets Financial Technology Conference on Tuesday, June 10, 2025 in New York, NY. The discussion will begin at 2:40 p.m. Eastern Time. Management will also participate in investor meetings throughout the day. A live webcast of the fireside chat will be available on the Paysafe Investor Relations website at under the 'Events' section and archived for a limited time. About Paysafe Paysafe 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 29 years of online payment experience, an annualized transactional volume of $152 billion in 2024, and approximately 3,000 employees located in 12+ countries, Paysafe connects businesses and consumers across 260 payment types in 48 currencies around the world. Delivered through an integrated platform, Paysafe solutions are geared toward mobile-initiated transactions, real-time analytics and the convergence between brick-and-mortar and online payments. Further information is available at
RTÉ News
21-05-2025
- Business
- RTÉ News
Paysafe opens new EEA head office in Dublin
Payments platform Paysafe has officially opened its EEA head office in Dublin City Centre, with the support of the Irish Government through IDA Ireland. Paysafe connects consumers and merchants around the world through payment processing, digital wallet and online cash solutions. Founded in 1996, it employs around 3,000 people across 12 countries. "Ireland has been a key part of our journey for many years, and the opening of our new office in Dublin reinforces our commitment to the region," said Bruce Lowthers, CEO of Paysafe. "With more than 50 team members now based here, we're proud to continue investing in Ireland as we expand our global payment solutions and support businesses and consumers around the world," he added. Robert Troy, Minister of State with responsibility for Financial Services, Credit Unions, and Insurance welcomed the opening of the new office. "Ireland has worked incredibly hard since the late eighties to be a destination of choice for financial innovation, and Paysafe's commitment to Ireland in 2025 is a clear vote of confidence in our international financial services (IFS) and fintech sectors," he said. "Later this year, we will begin to develop the next version of our Ireland for Finance strategy, to further grow the IFS sector out to the end of the decade. "The continued growth of international companies like Paysafe are proof that our policies continue to attract cutting edge firms to operate here," he added. Michael Lohan, CEO of IDA Ireland congratulated Paysafe on their new office in Dublin. "Since establishing here in 2019, this move demonstrates Paysafe's further commitment to embedding themselves in our vibrant business community.
Yahoo
15-05-2025
- Business
- Yahoo
Paysafe and Fiserv Strengthen Partnership to Drive SMB Growth with Enhanced Capital Access, Fraud Protection, and New Digital Wallet Solution
LONDON, May 09, 2025--(BUSINESS WIRE)--Paysafe (NYSE: PSFE), a leading payments platform, and Fiserv, Inc. (NYSE: FI), a global provider of payments and financial services technology solutions, are expanding their long-term partnership to deliver even greater value to their customers. This collaboration includes several key initiatives focused on empowering small and medium-sized businesses (SMBs). One key initiative is the integration of Fiserv's Clover Capital solution, which provides SMBs with improved access to capital to help them scale and grow. Additionally, Paysafe will leverage Fiserv's Data–as–a-Service solution to further enhance their risk and fraud protection, strengthening security and trust for both consumers and merchants. In the US, the two companies are collaborating to launch a digital wallet within Fiserv's Clover merchant base. This wallet will enable businesses to receive faster settlements and access a full range of banking services, while enhancing the customer experience. This marks a milestone in Paysafe's business wallet platform evolution, offering a solution designed for financial efficiency and scalability. "These strategic initiatives reflect the strength and momentum of our partnership with Fiserv," said Bruce Lowthers, CEO of Paysafe. "Together, we are creating innovative, growth-oriented solutions that unlock new opportunities for SMBs while accelerating our product expansion strategies." "Our expanded collaboration with Paysafe reflects our shared commitment to empowering small and mid-sized businesses with the tools they need to thrive in today's digital economy," said Jennifer LaClair, Head of Merchant Solutions at Fiserv. Paysafe and Fiserv are excited to continue building on their strong partnership, delivering more value across the payment ecosystem. About Paysafe Paysafe 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 29 years of online payment experience, an annualized transactional volume of $152 billion in 2024, and approximately 3,300 employees located in 12+ countries, Paysafe connects businesses and consumers across 260 payment types in 48 currencies around the world. Delivered through an integrated platform, Paysafe solutions are geared toward mobile-initiated transactions, real-time analytics and the convergence between brick-and-mortar and online payments. Further information is available at About Fiserv Fiserv, Inc. (NYSE: FI), a Fortune 500 company, moves more than money. As a global leader in payments and financial technology, the company helps clients achieve best-in-class results through a commitment to innovation and excellence in areas including account processing and digital banking solutions; card issuer processing and network services; payments; e-commerce; merchant acquiring and processing; and Clover®, the world's smartest point-of-sale system and business management platform. Fiserv is a member of the S&P 500® Index and one of Fortune® World's Most Admired Companies™. Visit and follow on social media for more information and the latest company news. View source version on Contacts Media Contact for Paysafe: Crystal Wright, Global VP of Public Relations+1 (904)
Yahoo
14-05-2025
- Business
- Yahoo
Q1 2025 Paysafe Ltd Earnings Call
Kirsten Nielsen; Senior Vice President - Investor Relations; Paysafe Ltd Bruce Lowthers; Chief Executive Officer, Executive Director; Paysafe Ltd John Crawford; Chief Financial Officer; Paysafe Ltd Andrew Harte; Analyst; BTIG Trevor Williams; Analyst; Jefferies Darrin Peller; Analyst; Wolfe Research Timothy Chiodo; Analyst; UBS Matthew Inglis; Analyst; RBC Capital Markets James Friedman; Analyst; Susquehanna Financial Group Operator Greetings. Welcome to Paysafe's first quarter 2025 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kirsten Nielsen, Head of Investor Relations. Thank you. Please go ahead. Kirsten Nielsen Thank you and welcome to Paysafe's earnings conference call for the first quarter of 2025. Joining me today are Bruce Lowthers, Chief Executive Officer; and John Crawford, Chief Financial Officer. Before we begin, a reminder that this call will contain forward-looking statements and should be considered in conjunction with cautionary statements contained in our earnings release and the company's most recent SEC reports. These statements reflect management's current assumptions and expectations and are subject to factors that could cause actual results to differ materially from those forward-looking statements. You should not place undue reliance on these statements. Forward-looking statements during this call speak only as of the date of this call, and we undertake no obligation to update them. Today's presentation also contains non-GAAP financial measures. You can find additional information about these non-GAAP measures and reconciliations to the most directly comparable GAAP financial measures in today's press release and in the appendix of this presentation, which are available in the Investor Relations section of our website. Now I'll turn the call over to Bruce. Bruce Lowthers Good morning and thank you for joining us today. We had a solid quarter to start the year with organic revenue growth of 5%. Our results were driven by strong growth from existing customers while we continue advancing our new product and new sales initiatives and kicked off exciting new partnerships. Adjusted EBITDA was $95 million for the first quarter compared to $112 million in the first quarter of last year, or roughly flat when normalizing for inorganic impacts. In February, we closed on the sale of our direct marketing business, which creates some noise in the financial results. So John will take you through those numbers in more detail. In terms of new business, the enterprise side of our expanded sale organization is ramping up and winning more deals. In Q1, we signed over 100 enterprise level contracts, which was broad-based across gaming, Latin America, and broader e-commerce within our core verticals. Overall, we're pleased to start the year off on a strong note, slightly ahead of our expectations. As you know, we anticipated a lower growth rate and margin profile during the first half of the year. We remain confident that we see acceleration in the second half as we deliver our existing contracts, execute on our sales pipeline, and drive revenue from product initiatives that are already in market. Turning the slide 4. We've discussed during prior calls how we've evolved our focus and delivery of the Paysafe wallet platform, enabling us to unlock geographic expansion and strategically market to new complementary consumer groups. Traditionally, we've offered single-use consumer wallet solutions, which has transitioned into a more unified platform for two primary segments, with all users able to leverage the functionality of the entire platform. Collectively, these solutions leverage the breadth of our shared capabilities and assets such as LPM integration, API access, and issuing cards supported by a more streamlined delivery and go to market approach. Today, I want to share a few examples, starting with our consumer brand in Latin America on slide 5. In Peru, our PagoEfectivo brand is already a leading cash and bank transfer payment solution. Peru's high growth payments landscape is rapidly evolving, with digital wallets and account to account payments projected to become the leading payment methods in the coming years. Our new product launch combines this trusted local brand with Paysafe's wallet platform, a natural extension designed for a streamlined, user-friendly experience. The PagoEfectivo wallet simplifies payments via e-cash and digital wallet peer to peer transfers, and is the only digital payment experience in the region to offer instant payouts. Turning to slide 6, I'll highlight our target consumers in the region. First, is the consumer who enjoys online gambling, video gaming, and e-sports. This group already comprises nearly 60% of our PagoEfectivo user base in Peru. This is often a cash-based user who wants a safe and seamless transition from cash to digital gaming, and he places a lot of value on fast access to his winnings. On slide 7, you'll have another example, which would be the everyday consumer who wants to participate in e-commerce, ranging from paying bills to P2P payments to entertainment and streaming services, with a preference for cash or non-bank solutions. They often send and receive remittance in P2P payments and desire cash to digital solutions that are simple, secure, and cost effective. The launch of our PagoEfectivo wallet demonstrates how we're evolving our payment solutions to resonate with local consumer behavior and market dynamics in the region, underpinned by the rise of digital payments and financial inclusion. We believe this user group represents an expansion of our addressable market in Peru, where e-commerce transaction value is expected to grow at 12% CAGR, reaching $29 billion by 2030. Let's shift gears with a merchant example on slide 8. Here we're offering merchants the same benefit of a wallet relationship with their consumers by embedding our wallet platform and enabling seamless pay in and payout solutions integrated within the merchant's customer experience. An ideal client profile as a merchant who aims to drive engagement through their own brand and maintain their own front end while offering payouts and other wallet services delivered by Paysafe's APIs and embedded into their web and mobile applications. This is applicable across a number of our core verticals such as gambling, video gaming, travel, or cash-intensive business models that require digital solutions to enable payouts. I'll wrap up the product discussion here, but we'll continue to share more on our product developments and user profiles throughout the year. And as we've said before, while the average revenue per user will vary across products and user profiles, our focus on building an expanded wallet platform steers us towards a more scalable model to create value for Paysafe, our merchants, and consumers. Let's move to slide 9. Having invested in the expansion of our sales team and capabilities last year, we're turning our focus to execution and productivity. While we're happy with the progress on the enterprise side of the sales organization and pipeline, our growth in e-commerce continues to be very strong at 31% for the first quarter, with our processing growth and iGaming up over 50% year-over-year and all other verticals combined growing in the mid-teens. Importantly, we're seeing improved productivity with a 20% year-over-year increase in the annual contract value for active rep in the first quarter. Additionally, as we continue to expand both our go to market and product capabilities, we've opened a new door to win acquiring deals in the PayFac space. For example, in Q1, we signed a deal with WireBloom, a payment facilitator operating across Europe and the UK. By addressing the specific needs required by the PayFac business model and establishing a partner centered on trust, flexibility, and risk management, we successfully displaced one of their existing inquirer. So, as our investment in the enterprise side matures, we're seeing that payoff in investment in both growth and rep productivity. On the SMB side, we began our investment late in Q1 in 2024. So we're still in the process of optimizing both our direct and partner expansion. While we're seeing pockets of productivity improvements such as in our direct tele sales area and new partner acquisitions, as well as good progress on deal size and quality, the ramp up and consistency is not where it needs to be across all the investment and growth has been tempered by the slower ramp in our in-market direct sellers. We have more work to do as we continue to rebalance and optimize the SMB team and go to market channels in 2025. We have a number of programs underway to improve resource allocation, training, and lead generation in order to drive higher productivity, along with new tools to support relationship management, communication, and customer service. We're also launching a new partnership to enhance our product offering and growth in the SMB space. That brings me to slide 10. You'll hear us talk more about the new partnership agreements throughout the year, and we kicked off a couple of exciting collaborations already in Q1. First is an expansion of our long-term relationship with Fiserv, starting with the integration of Fiserv's Clover Capital Solution, providing SMBs with improved access to capital to help them scale and grow. Our broader plans include several initiatives focused on empowering SMBs while supporting international expansion and product strategies for Paysafe and Fiserv. And then on the enterprise side in Q1, we've expanded our partnership with Tilled to deliver frictionless payments and Payfac solutions to ISPs across the US and Canada. Lastly, as an example, with our consumer brands, we're now live with Selfpay's self-checkout kiosk, improving the quality and reach of our distribution network in Ireland. We've also expanded our online distribution of our e-cash products across several countries through new integrations with video gaming voucher marketplaces, such as Start Select and Scheme. We're excited to build upon these relationships in the coming months. Our strategy around partnerships has been in an area that we haven't fully leaned into and leveraged in the past. So this is great momentum as we revamp our approach and focus on partnering for growth. I'll wrap up here. You can see we're off to a good start. We've had a very active quarter and a lot of change, and we're excited to deliver on our priorities for 2025. With that, I will ask John to review the financial results. John Crawford Thank you, Bruce. Let's move to slide 12 for a summary of our first quarter results. On a reported basis, revenue declined by 4% to $401 million. When we exclude the inorganic headwinds from FX, interest, and the divestiture, revenue increased 5% organically. This was a little better than we originally expected, driven by modest outperformance from the ISO sales channel. Overall organic growth in Q1 reflects continued double digit growth in e-commerce and 3% organic growth in digital wallets. This was partly tempered by flat performance in SMB. Adjusted EBITDA was $95.2 million and adjusted EBITDA margin was 23.7%, which was also slightly ahead of our expectations due to the timing of certain cost items that fell into Q2. When we exclude the impact of the divestiture, adjusted EBITDA would have been down 3% on a constant currency basis, driven by a 190 basis points decline in gross margin, primarily due to two factors: lower interest revenue, which accounts for 40 basis points of the decline, and business mix, which accounts for 150 basis points. Specifically on the business mix, we were mainly referring to an unfavorable mix within the merchant solution segment due to growth in the ISO channel. To summarize, the underlying EBITDA was impacted by $17 million of inorganic items, 70% of which were attributable to the divestiture. And would have been roughly flat year over year excluding those impacts with the margin decline reflecting business mix. Turning to cash flow, we generated $57 million in unlevered free cash flow for the quarter with a 60% conversion of adjusted EBITDA and relatively inline Q1 of last year, which was 62%. On an LTM basis, unlevered free cash flow was $288 million, reflecting 66% conversion and in line with our expected conversion range. Adjusted net income was $20.9 million or $0.34 per share, down from $0.57 in Q1 of last year, as the adjusted effective tax rate increased to 25% compared to 21% in the prior period. Absent the inclusion of the beat tax provision this period, the tax rate would have been 22%, roughly in line with last year. Turning to slide 13 for a breakdown of our Q1 revenue drivers. Existing customers contributed 13% to our growth and embedded in this category is also the remaining contribution of direct marketing, which was about $5 million and more than offset by the headwind from interest revenue and FX. As you can see, this offset the impact of attrition, which reduced revenue by approximately 12% in the quarter, slightly higher than what we expect for the full year. We also have modest growth from new customers and NPI contributing 2% to revenue growth, which we expect to accelerate to double digits as the year progresses, given our new sales pipeline, recent product launches, expanded partnerships, and other initiatives. Turning to slide 14 to discuss the segment results. Merchant solutions volume increased by 11% to $34.3 billion, reflecting strong growth in e-commerce, resulting in organic revenue growth of 6%. As a reminder, e-commerce verticals such as North America iGaming, bring a lower take rate profile, and this is largely why volume growth outpaced revenue. Adjusted EBITDA for the segment was $29.4 million with an adjusted EBITDA margin of 13.5%. There's a lot of noise here, but looking past the impact of the divestiture, the main driver is the mix headwind due to softer performance and SMB direct channels versus the ISO channel. Aside from that, SG&A for the segment was elevated in Q1, largely explained by the hiring across the sales organization in 2024, as well as some stranded costs related to the divestiture. Going forward as the sales productivity improves and we lack the investments, we expect the margin to increase throughout the year. Turning to the digital wallet segment on slide 15. Volume increased by 5% to $5.9 billion and revenue from digital wallets was $187.6 million, an increase of 3% on an organic basis, with a stable user base of $7.3 million. Adjusted EBITDA was $82.5 million, down 1% year-over-year, reflecting a $6 million headwind from interest in FX, while the margin increased slightly to 44%. Turning to slide 16 for an update on our capital allocation. At the end of the quarter, total debt was just under $2.4 billion, reflecting principal prepayments of $23 million during the quarter. Net leverage increased slightly to 4.9 times driven by the divestiture of our direct marketing business as well as the strengthening of the euro at quarter end. The stronger euro at the end of March impacts our euro debt balances translated back to US dollars. Our average interest rate is just north of 5%, which is 70 basis points below the interest rate at this time last year. Lastly, we repurchased 613,000 shares during the first quarter and an additional 693,000 shares in April, returning approximately $20 million to shareholders year-to-date. That brings me to our 2025 guidance on slide 17. We are pleased with our first quarter results, which came in slightly ahead of our expectations, and growth in April trending largely in line with growth in Q1. We remain confident in delivering our full year guidance while also being mindful of macroeconomic dynamics. We've had some puts and takes since the time of our initial guidance. FX rates have been volatile, and while the EUR is somewhat stronger than we saw at the beginning of the quarter, this modest potential tailwind is partly offset by a decrease in interest revenue given where the rates have moved and the fact that interest revenue contribution flows straight through to EBITDA. The attrition in SMB has been slightly higher than our original assumption, but as we drive our initiatives and implement new tools for relationship management and service with SMBs, we expect this to improve. With that said, we remain confident in our full year guidance, which you'll see on this page is a repeat of what we said on our Q4 call. Finally, turning to slide 18, we're providing additional color on what we expect for the rest of the year, appreciating that we've already guided to an acceleration for the second half. Based on our year-to-date results and what we see for the remainder of the second quarter, we expect the second quarter organic revenue growth to be similar to Q1, with adjusted EBITDA margins in the first half to be around 24%. So that leads to organic growth in the second half, accelerating to the range of 8% to 10% as we said on the Q4 call. With adjusted EBITDA margins exceeding the guidance range in the second half. We expect the fourth quarter to be our strongest quarter for reported growth, organic growth, and margin performance. So let me walk you through the drivers. First is the overall growth and operating leverage as we deliver on our existing contracts, execute on our sales pipeline, and drive revenue from partnership collaborations, as well as product initiatives that are already in the market. As we continue to make progress towards our long term target to generate annual revenue contributions of at least 10% from products released in the last three years. The second driver would be a slight mixed improvement at the segment level, where we expect a stronger contribution from digital wallets in the second half. The third major driver is marginal improvement in merchant solutions, with an expectation that our initiatives to improve the growth profile, attrition, and channel mix will lead to an acceleration of gross margins in the second half. Finally, we continue to be focused on operating expenses. Fortunately, we completed our key investments last year and with that behind us, we're focused on being very disciplined on the cost side. With that, I will turn it over to Bruce for final remarks. Bruce Lowthers Thank you, John. I want to thank our team for staying focused and executing our strategy while successfully completing the sale of our direct marketing business. We remain confident that we'll see acceleration in the second half as we deliver on our product and sales pipeline. Launch new partnerships and drive greater scale and efficiency throughout the organization. Now, let's begin the Q&A session. Operator (Operator Instructions) Andrew Harte, BTIG. Andrew Harte Hey, thanks for the question. It's good to hear how the sales pipeline remains strong. I think last quarter you called it record levels. I guess, Bruce, can you frame up how much of that pipeline you would consider booked but yet to go live? I guess, ultimately how much visibility do you have in that pipeline of actually achieving the second half acceleration and that's embedded in guidance. Thanks. Bruce Lowthers Yeah, Andrew, good morning and I'm a little bit under the weather, so bear with me if I cough here. But, what I would say we have pretty good visibility. We had a really strong quarter as you heard in the prepared remarks from a sales perspective, right now in Q1, we had a really strong enterprise sales, even as we looked into, April we had the strongest SMB sales that we've had in over a year. So we have really nice visibility as we on board these merchants, and really start ramping up the production, of those. So I think it's really a nice chart that John and Kirsten put together, talking about, the revenue walk and you can see very clearly, where you had the existing customer base performing a little better than anticipated, which is really a good sign for the back half of the year. And then you can see the new customers coming on, that obviously will ramp up as the year goes through. So we feel very good and have very good visibility so far strong pipeline as we had headed into Q2, so overall it's looking very good. Andrew Harte Thanks. And then, John, I appreciate the comments about EBITDA the margin moving parts throughout the year. Some of it, I think segment mix. The other part you talked about SMB versus, the ISO channel. Can you just maybe share with us your early expectations for 2Q EBITDA margin and kind of where you think it could be exiting the year at based on those different moving parts? Thanks. John Crawford Sure. So I think our expectation is Q2 EBITDA margin is going to look largely as it did in Q1, and then in the second half of the year I think we ramp to levels both in Q3 and Q4 that are kind of above our full year guide. So I think -- also think about it as, we continue to say it's a little bit more Q4 weighted than Q3, so we -- our expectation is Q3, the margins are going to be a little above our guide and Q4 higher than that. So probably closer to a [$28 million to $30 million] range. Andrew Harte Thank you. John Crawford And that's maybe give a little color there. It's probably obvious based on our discussion of the cost structures, but we see the elevated cost in the merchant segment in Q1, largely working out in Q2 and Q3, so that -- as the gross margin improves that we're talking about that should start to flow through, with gross margins in the merchant business going up from the low 40s into the mid-40s. Andrew Harte Thank you. Operator Trevor Williams, Jefferies. Trevor Williams Great thanks. Hey guys, I wanted to ask on e-commerce within merchant if we could just get an update on what the e-comm mix is within the merchant segment today and then bigger picture, clearly you're still having a lot of success within the iGaming vertical, but if you could remind us just on how you're primarily coming to market both within iGaming and kind of more broadly and the key points of differentiation, what sets you guys apart? Thanks. Bruce Lowthers John, do you want to just give a revenue mix of the e-comm? John Crawford Sure. Thanks, Bruce. I'd say it's about 25% on a revenue basis in Q1 of the merchant segment. Kirsten Nielsen Of the merchant segment. John Crawford And that's slightly higher than that on a gross profit basis, if that's helpful. Kirsten Nielsen Right, and then within the e-commerce, just to click in on that, you've got iGaming is one of the biggest single vertical, right, probably half of that e-comm, and then the rest would be really split amongst our other core verticals. Trevor Williams Okay, perfect. And then maybe if we could go back to some of the new distribution partnerships within merchant Bruce, maybe if you could frame for us just the significance kind of at the partnership level if any of those in isolation are expected to be kind of needle moving over the course of the year. Yeah, and if you could just kind of frame a longer term significance of some of those with Clover Tilled. Thanks. Bruce Lowthers Yeah. Look, I think as we moved into this year we really were focused on a few things. One of those were really our product initiatives or MPI initiatives, a new product initiatives, and part of that is the build out of our partner organization and trying to drive more product into our sales people's hands to go help our merchants really be successful. So as we looked at this function we see things like Tilled which open up new TAMs for us that allow us to go after some of these Payfac's that we didn't really have the products for now that we do. We've got great partnerships and expansion. I think probably everybody saw some of the announcements in recent days with Fiserv and expanding our capabilities with them and offering their capital product to extend loans to the SMBs. So we think that the -- all of these things are going to contribute as we move forward -- excuse me, in a significant way. And very optimistic about -- this is part of kind of TAM expansion as we look at it, is things that we have not done historically but were needed and really part of that long term driver of driving revenue from products released in the prior three years to north of 10%. So this is really going to be a focus for us as we go forward and something that we view as a critical component of our growth strategy. Trevor Williams Great. Okay, thank you guys. Operator Darrin Peller, Wolf Research. Darrin Peller Hi, thank you. Bruce, maybe we could just go back and hone in a little more onto the SMB side. You touched on it just a moment ago with incremental product you're putting in their hands, in the hands of your reps, but thinking about, what you -- what the strategy is for the SMB piece of the business now going forward and what you -- what kind of prospects you see for it? And if it has enough product whether it's Clover Capital or like you just mentioned, what other needs do you have to find to really provide the best service, the best offerings that can compete effectively, and what should we expect as investors and analysts in the SMB side of the business in terms of market share going forward. Bruce Lowthers Sure Darrin. So let me back up and when we look at the SMB space, traditionally we have or historically we have been a reseller of other solutions. We're very fortunate to have the opportunity to sell Clover. Clover does very well for us from a growth profile. We've also talked about the fact that, when you look at our SMB portfolio, we are subscale from a sales perspective, historically, and we were really driving the vast majority of our revenue through the ISO channel and what we're trying to do is rebalance to sell more direct on the SMB side. So we made an investment last year to really increase the size which we still be on the small side in comparison to others, but build up that small side to really drive the SMB direct versus the ISO. It's not that we're trying to move away from the ISO. We love the ISO organization that's doing a great job. We just want to be more balanced and the reason of that, going direct is the margin is much greater for us if we're going direct than through the ISO channel. And so we're really focused on a couple of things one building up that SMB direct side. We also, if you remember last year we talked a little bit about when you looked at our SMB direct channel we were really, driving a lot of micro merchants and we've started moving upstream a little bit on that. And so you can see that our revenue for mid has increased and the team is really repurposing or refocusing our sales efforts on channels that are still small businesses but they're bigger than the micro merchants that we had before. Another reason for that one, obviously the revenue is larger but two, that little larger SMB is a more stable merchant base for us. So it doesn't turn over as much. So we feel like we're making some good progress. We've tried some things candidly that were very new to us. Didn't pan out the way we wanted. We regrouped and made some adjustments to what we were doing, as I alluded to earlier or stated earlier, we had a really strong March and April. April was the best SMB mid-month that we've had in well over a year. So it's nice to see that the actions that we're taking or are starting to come to fruition. So we feel very good about the SMB space. We have a very small market share but we have a world class product that, we can go sell and we feel very good about our opportunities to sell in that space. Darrin Peller Yeah, it's good to hear about April and the strong bookings and sales. I guess, just to be clear, it sounds like what you're saying is you believe you have the product now you need to have to go to market and be as differentiated as you need to be. I mean that still sounds like, just because we hear more and more about competition at the point of sale with newer POS systems, obviously global's trying, Clover now saying they're going to allow others to resell. So is Clover still have what it takes for you guys to be a differentiated asset, I guess is my question. And I mean, are there areas you still need to invest further from a tax standpoint, in that piece of business. Thanks again, guys. Bruce Lowthers Yeah. Again, I'm a big believer in Clover. I think when you look at the growth profile of Clover is, a mid to kind of growth profile for the midterm. We think we can continue to get better at selling that and expand our footprint. So we feel that Clover's got a great product. They're investing a lot into the product. We love the fact that they're adding surround services. We're adding some surround services in as well, and, we feel very good with that product. Not to say that there aren't others, not everybody's going to want Clover. I think that is a differentiator for us is that we have other point of sale systems as well. So it allows us to compete on the optionality standpoint, but, we feel very good about the product sets that we have, as we line up in the SMB space today. Darrin Peller Thanks. Operator Timothy Chiodo, UBS. Timothy Chiodo Great, thank you. Also I want to hit on the Clover part -- hey, good morning. Thank you. Also want to touch a little bit on the Clover partnership. So clearly capital is one of the offerings, right? But there's also software packages and there's payroll. There's their recent partnership with ADP. There's the whole cash flow central offering, so there's a lot more there to Clover than just a point of sale. And now that you're adding the Clover capital aspect, can you talk about what of the other aspects that I mentioned? Are some of those available to merchants that receive Clover through Paysafe? Are those other software packages available? Are those on the com that would be really helpful. Bruce Lowthers Yeah. Tim, a great question. What I would continue to say is we have a very strong relationship with Fiserv. They're wonderful partners. We look to continue to expand our product offerings from them. I think just last week we did a press announcement about doing a digital wallet for Clover customers. So you'll start to see us, pushing some of our product into the Clover base as well. So but overall, I would expect to continue to see that evolve and strengthen, and we will be hopefully talking about this relationship for a very long time. They're just an outstanding partner and we're delighted to have the opportunity to be one of their primary resellers of the Clover solution. Timothy Chiodo Okay, all right. Thank you, Bruce. The follow up is more of a -- I mean, it's a Paysafe question, but it's also sort of an industry question. And you talked about direct and indirect and talking about how the margins are much better for you on direct, but could you talk about the commission payout/unit economics. So on the indirect side, I gather there's an upfront bounty and then there's this kind of residual that gets paid out for some period of time and I don't know if that period is forever if it's a certain amount of years, but until that merchant churns or how the time is agreed to there and then how that's different on the direct side, meaning a sales person I'm assuming has a salary and some commissions but what is the balance of upfront commission versus trailer and how do the timing differences look across direct versus indirect meaning you get one forever, you get one for a certain period of time, that sort of thing. Bruce Lowthers Yeah, -- excuse me. On the residual, the ISO channel, the ISOs do have a payment -- each one of them is different, so it's difficult to say, just the exact construct of them. And probably don't want to go into too much detail to be candid with you. Just everybody has a different spin on how they do it. But there is an upfront piece that happens with each deal, and there's a residual that goes over an extended period of time on their book of business. On the direct side, the amount is very different. So the residual is -- usually if there is a residual is very short term, these commissions on the direct side of the house are all paid just as the ISO, they're all paid on actual revenue process, not ACV. So this is just they only get paid a piece of what actually happens with the deals that they signed. So the commission structures are very different from ISO structure versus the direct channel, largely because the ISO is handling a variety of different functions around the go to market strategy versus on the direct channel we're handling all of those things ourselves. So there's more opportunity for us as we drive that. I don't know, if John wants to comment any further on the commission structures. John Crawford Yeah. Bruce, I would just say it's probably obvious based on what Bruce said, but to put a math point on it, that you're going to then see the margin flow through on the direct business accelerates as the commission payouts roll off because those are shorter term than the residual structures on the ISO side. So obviously your commissions will continue to build the sales are growing, but over time that should that should benefit margins. Timothy Chiodo Perfect. That was really helpful. Thank you both. Operator Matthew Inglis, RBC Capital Markets. Matthew Inglis Hey, good morning. This is Matthew Inglis, on for Dan at RBC. So on the 10% growth for the full year for new customers and products, can you give us a deeper sense and maybe some specific examples for what gives you the most conviction for growth to ramp, specifically with the new products, part of that 10%? Bruce Lowthers Well, yeah. So a couple of things I would say, one, we're having a very strong sales start to the year. We had a very strong Q1 on sales that happened obviously in that column everything is really driven off of new sales. The product gives us things to go sell, but it's really all sales driven. We have a bigger sales team. As we pointed out, we've been more productive with the sales team on the enterprise side. They're producing more per rep and producing more in aggregate. So that gives us a great, visibility into how things are moving forward. We're also adding a lot of new product either through partnerships as we just talked about a little bit on the partnership side things direct, one thing that we just launched is the PagoEfectivo wallet. We feel very excited about the opportunity with our team in Peru to really expand our product offering down there. We see a lot of activity around our wallet platform. So there's a lot of growth opportunities there as we're signing up new customers, new opportunities, like with Fiserv on the Clover side. So we feel very good about the products that we have, and the opportunities that are emerging for us as we go into the back half of the year. But I would say that we have very good visibility right now on kind of the sales and product side, as we go -- we're halfway through Q2, so we feel pretty solid about the products that we have, what's on our road map and what's coming in Q2 and Q3 to kind of finish out the year from a product standpoint. Matthew Inglis Got it, thanks. And on that, the Pago wallet in Peru, can you give us any sort of expected timeline and maybe a magnitude for growth contribution from it and I guess more broadly how much of LatAm is part of that 10% expected growth from your customers and products, employer '25? Bruce Lowthers Yeah. So I think LatAm has been a nice producer for us and mid to upper single digits, in Q1, I think as we go forward we're looking at to expand into kind of low double digits, mid teen double digit growth as we go through the year. So overall that's nice growth business for us. It's doing very well and we're excited about Pago, as far as what -- PagoEfectivo wallet, but that'll add to that dimension down in that market. So as you know we also got a licensed in Brazil. So the LatAm market is one that we're very bullish on. We feel like solid growth opportunities in the LatAm market. John, anything you want to add? John Crawford No, I think it's clear. Matthew Inglis Got it. Thanks guys. Operator (Operator Instructions) James Friedman, Susquehanna. James Friedman Hi, good morning. Bruce Lowthers Good morning, James. James Friedman I'll let Bruce -- I'll let you save your voice. John, I'll ask you a couple of financial ones. I want to ask you about this slide 23, the merchant KPIs that you're introducing excluding direct marketing. I was just wondering how though -- I think there's a new slide it's new to me at least. So I'm wondering how you would have thought of this prior to the direct marketing disposition versus now and yeah, maybe if you could just elaborate on a couple of these like the, the billable mids target and the revenue per merchant. John Crawford Apologies, Jamie I'm trying to make sure I'm on the right slide. James Friedman (multiple speaker) the merchant KPI is Q1 2025. It's page 23. Yeah. John Crawford So I think -- but this is what you're seeing is like a couple of things that were mentioned in the call earlier around, where we're doing some work, the billable mids number in the low single digits down is a number we obviously need to move the other direction and that's largely driven by the attrition being a little higher than we thought as well as the SMB. Sales being a little less than we thought so far. Those are -- those tend to be big chunk -- chunky groups of merchants and as Bruce mentioned, sometimes on the much smaller end, we think the net revenue retention level is still very healthy like that, that's something that we're looking at, as we think about kind of each different sub-segments of our business as a health indicator. And then, on the revenue per merchant and revenue per new merchant, these are metrics as Bruce was talking about is trying to go a little bit upmarket, not really upmarket outside of SMB but into the larger of the small. Those are metrics we're going to be looking at there too. James Friedman Okay. And then maybe midway through your prepared remarks, it sounded like you had for our introducing some additional incentives or systems to the sales force to accelerate production. Could you just elaborate on what those are and how the investment that you had made in sales. And I think the second half of 2024 is returning relative to what you had expected. John Crawford Sure. So I think the -- and I guess, I think of it as really the investment for the whole of '24 but also including the first quarter because we had -- that those we had a number of hires in the in Q1 of 2024 as well. So as we look at -- as we look at that, I probably want to be a little general about the specific things we're doing in that area, but I think as Bruce mentioned, we tried a number of things late in '24 on the marketing side, lad gen side, some of those things we're going to potentially get us better productivity at lower cost. Those things didn't work. We moved back to some of the metrics that we know and have worked. I think that's shown -- as Bruce mentioned in April, it showed as we got through Q1 as well, but those are the kinds of things that tend to have a tail for several months into the beginning of '25. I think we're also -- to be specific, doing some things on the personnel side in the mix over there on the SMB piece and where they're deployed, how we're hiring that sort of thing. So I'm not sure, we should think about it as a change in -- a major change in comp structure or incentives in the sense that we think our financials are going to be different is really just trying to find the right dials to turn to get those different, sort of subsegments of SMB performing as well as the pieces that are -- because we have several that are performing very well. Bruce Lowthers Yeah. I just add that, when you look at the enterprise side from the investment of sales people, that has worked wonderfully, right? So that is not only are we seeing expansion of our ACV that we've signed up, but we're seeing expansion of the ACV per rep that we've signed up. When you look at our tele sales or direct sales and the SMB, we're seeing the same thing. We're seeing really nice production out of that group. We're seeing expansion within that group. We have an in-market group, that we also invested in, that still work under process, but we have a lot of confidence around. What we've been doing, how we're redeploying, some of the assets where they didn't work in particular markets, into markets that worked perhaps better than we anticipated, such as Latin America and some of the enterprise things or even in the tele sales. So I would say as we look at it, we're probably at expectation but with the possibility of outperforming what our expectation was on the return on the investment as we move forward. James Friedman Got it. Thanks Bruce. Thanks, John. I'll drop back in the queue. Operator Thank you. At this time I'd like to turn the floor back over to Mr. Lowthers for closing comments. Bruce Lowthers Yeah, thank you. And first of all, I just want to thank our team for the wonderful job this quarter. Really a lot of distractions whenever you're divesting a particular asset or business. The team did a remarkable job working their way through that, and we have really a nice clear path for growth as we're going forward. So, really solid quarter. I want to thank everyone and I look forward to talking to everyone soon. Thank you very much. Operator Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day. 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Business Wire
13-05-2025
- Business
- Business Wire
Paysafe Reports First Quarter 2025 Results; Reaffirms Full Year Outlook
LONDON--(BUSINESS WIRE)--Paysafe Limited ('Paysafe' or the 'Company') (NYSE: PSFE), a leading payments platform, today announced its financial results for the first quarter of 2025. First Quarter 2025 Summary (Metrics compared to the first quarter of 2024, unless otherwise noted) Revenue of $401.0 million, decreased 4%; organic revenue growth of 5% Net loss of $19.5 million, or ($0.33) per diluted share, compared to net income of $3.1 million, or $0.05 per diluted share Adjusted net income of $20.9 million, or $0.34 per diluted share, compared to $35.3 million, or $0.57 per diluted share Adjusted EBITDA of $95.2 million, decreased 15%; decreased 14% on a constant currency basis Net leverage 1 of 4.9x as of March 31, 2025 Bruce Lowthers, CEO of Paysafe, commented: "We kicked off the year with strong momentum, exceeding our expectations for organic growth and adjusted EBITDA margin. I'm proud of the team for staying focused and executing our strategy for sustainable growth while successfully completing the sale of our direct marketing business. We also secured new partnerships, launched innovative products through our wallet platform, and continued enhancing its functionality to better connect our 18 million consumers with over 1 million retailers—turning everyday transactions into exceptional experiences. With the second quarter underway, we're operating with a leaner, lower-risk model, a strengthened sales organization, traction with new collaborations, and a robust product pipeline that positions us for accelerated growth in the second half of the year." Recent Strategic and Operational Highlights Organic revenue growth of 5% led by robust volumes in e-commerce Progress across the enterprise-level sales strategy, including continued double-digit bookings growth in the first quarter while accelerating productivity per sales representative Expanded Paysafe's long-term partnership with Fiserv, including several key initiatives focused on empowering small and medium-sized businesses (SMBs) Expanded Paysafe's partnership with Tilled to offer frictionless payments and PayFac-as-a-Service solutions for independent software vendors (ISVs) across the U.S. and Canada Closed on the Company's previously announced agreement to sell its direct marketing payment processing business line ("the business disposal") Repurchased 612.6 thousand shares for $10.0 million in the first quarter of 2025 Published Paysafe's second annual sustainability report (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 March 31, 2025, total debt was $2,384.6 million and cash and cash equivalents was $234.3 million, and LTM Adjusted EBITDA was $435.3 million. For the period ended December 31, 2024, total debt was $2,363.5 million and cash and cash equivalents was $216.7 million, and LTM Adjusted EBITDA was $452.1 million. Expand First Quarter of 2025 Summary of Consolidated Results Reported revenue for the first quarter of 2025 was $401.0 million, a decrease of 4%, compared to $417.7 million in the prior year period, reflecting a decrease of 6% from the Merchant Solutions segment driven by the business disposal, as well as a 2% decline from the Digital Wallets segment driven by a decrease in interest revenue on consumer deposits and unfavorable foreign exchange rates. Organic revenue growth was 5%, reflecting 6% organic growth from Merchant Solutions and 3% organic growth from Digital Wallets. Net loss for the first quarter was $19.5 million, compared to net income of $3.1 million in the prior year period, largely driven by a decrease in revenue, a decrease in other income related to lower gains on foreign exchange, and an increase in restructuring and legal costs. This was partially offset by the recognition of an income tax benefit in the current period as well as a decrease in selling, general and administrative expenses, including lower credit losses. Adjusted net income for the first quarter decreased to $20.9 million, compared to $35.3 million in the prior year period, mainly reflecting the decline in Adjusted EBITDA and an increase in the adjusted effective tax rate resulting from the inclusion of the base erosion and anti-abuse tax ("BEAT") provision in the current period. Adjusted EBITDA for the first quarter decreased to $95.2 million, compared to $111.9 million in the prior year period, reflecting the business disposal in addition to business mix and lower interest revenue, which were unfavorable to gross profit margin. The combined headwinds from movement in foreign exchange rates and interest revenue on consumer deposits to first quarter revenue and Adjusted EBITDA were $9.3 million (2 percentage-points) and $5.4 million (5 percentage-points), respectively. First quarter operating cash flow was $52.5 million, compared to $58.8 million in the prior year period. Unlevered free cash flow was $57.3 million, compared to $69.2 million in the prior year period. Balance Sheet As of March 31, 2025, total cash and cash equivalents were $234.3 million, total debt was $2.4 billion and net debt was $2.2 billion. Compared to December 31, 2024, total debt increased by $21.1 million, reflecting net repayments of $26.8 million as well as movement in foreign exchange rates. Summary of Segment Results Full Year 2025 Financial Guidance ($ in millions, except per share amounts) (unaudited) Full Year 2025 Revenue $1,710 - $1,734 Adjusted EBITDA $463 - $478 Adjusted EPS $2.21 - $2.51 Expand 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 An archive will be available after the conclusion of the live event and will remain available via the same link for one year. 2024 Sustainability Report Today Paysafe published its second annual sustainability report, following through on its commitment to Paysafe's sustainability strategy. This latest report provides detailed insights into the Company's progress and demonstrates significant strides in advancing governance and policies as well as more sustainable operations across the key pillars of Paysafe's sustainability framework—Trusted Technology, Engaged Employees, and Thriving Society— underpinned by Paysafe's Responsible Business Principles. Key highlights for the year included: Established Paysafe's AI governance framework and an internal AI policy to guide ethical and responsible use of AI Formalized Paysafe's responsible technology principles Awarded EcoVadis sustainability rating of 'Good' Supported 49 individual community initiatives and partnered with over 60 non-profit organizations around the world Achieved a 10% decrease in Scope 1 greenhouse gas emissions and continued the Company's alignment with the Task Force on Climate-Related Financial Disclosures (TCFD) The sustainability report can be accessed on Paysafe's website at About Paysafe Paysafe 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 29 years of online payment experience, an annualized transactional volume of $152 billion in 2024, and approximately 3,300 employees located in 12+ countries, Paysafe connects businesses and consumers across 260 payment types in 48 currencies around the world. Delivered through an integrated platform, Paysafe solutions are geared toward mobile-initiated transactions, real-time analytics and the convergence between brick-and-mortar and online payments. Further information is available at Forward-looking Statements This press release includes 'forward-looking statements' within the meaning of U.S. federal securities laws. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Paysafe Limited's ('Paysafe,' 'PSFE,' the 'Company,' 'we,' 'us,' or 'our') actual results may differ from their expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as 'anticipate,' 'appear,' 'approximate,' 'believe,' 'budget,' 'continue,' 'could,' 'estimate,' 'expect,' 'forecast,' 'foresee,' 'guidance,' 'intends,' 'likely,' 'may,' 'might,' 'plan,' 'possible,' 'potential,' 'predict,' 'project,' 'seek,' 'should,' "will," 'would' and variations of such words and similar expressions (or the negative version of such words or expressions) may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include, without limitation, Paysafe's expectations with respect to future performance. These forward-looking statements involve significant risks, 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 Bermuda, the UK, Ireland, Switzerland, the United States, Canada and elsewhere; risks related to our focus on specialized and high-risk verticals; geopolitical events and the economic and other impacts of such geopolitical events and the responses of governments around the world; acts of war and terrorism; the effects of global economic uncertainties, including inflationary pressure and rising interest rates, on consumer and business spending; risks associated with foreign currency exchange rate fluctuations; changes in our relationships with banks, payment card networks, issuers and financial institutions; risk related to processing online payments for merchants and customers engaged in the online gambling and foreign exchange trading sectors; risks related to becoming an unwitting party to fraud or being deemed to be handling proceeds resulting from the criminal activity by customers; the effects of chargebacks, merchant insolvency and consumer deposit settlement risk; changes to our continued financial institution sponsorships; failure to hold, safeguard or account accurately for merchant or customer funds; risks related to the availability, integrity and security of internal and external IT transaction processing systems and services; our ability to manage regulatory and litigation risks, and the outcome of legal and regulatory proceedings; failure of fourth parties to comply with contractual obligations; changes and compliance with payment card network operating rules; substantial and increasingly intense competition worldwide in the global payments industry; risks related to developing and maintaining effective internal controls over financial reporting; managing our growth effectively, including growing our revenue pipeline; any difficulties maintaining a strong and trusted brand; keeping pace with rapid technological developments; risks associated with the significant influence of our principal shareholders; the effect of regional epidemics or a global pandemic on our business; and other factors included in the 'Risk Factors' in our Form 20-F and in other filings we make with the SEC, which are available at Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. 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 Consolidated Net Loss per share Three Months Ended March 31, 2025 2024 Numerator ($ in thousands) Net (loss) / income - basic $ (19,472 ) $ 3,056 Net (loss) / income - diluted $ (19,472 ) $ 3,056 Denominator (in millions) Weighted average shares – basic 59.8 61.6 Weighted average shares – diluted 59.8 62.0 Net (loss) / income per share Basic $ (0.33 ) $ 0.05 Diluted $ (0.33 ) $ 0.05 Expand Paysafe Limited Condensed Consolidated Balance Sheets (unaudited) ($ in thousands) December 31, 2024 Assets Current assets Cash and cash equivalents $ 234,339 $ 216,683 Customer accounts and other restricted cash 954,896 1,081,896 Accounts receivable, net of allowance for credit losses of $4,435 and $7,994, respectively 155,357 158,197 Settlement receivables, net of allowance for credit losses of $4,820 and $4,082, respectively 145,182 138,565 Prepaid expenses and other current assets 89,798 81,298 Derivative assets 3,413 — Contingent consideration receivable – current 826 — Total current assets 1,583,811 1,676,639 Deferred tax assets 91,304 91,304 Property, plant and equipment, net 26,013 24,297 Operating lease right-of-use assets 39,604 40,620 Derivative asset 150 5,502 Intangible assets, net 950,350 981,315 Goodwill 2,007,076 1,976,851 Contingent consideration receivable – non-current 3,312 — Other assets – non-current 11,812 12,806 Total non-current assets 3,129,621 3,132,695 Total assets $ 4,713,432 $ 4,809,334 Liabilities and equity Current liabilities Accounts payable and other liabilities $ 193,164 $ 176,940 Short-term debt 10,190 10,190 Funds payable and amounts due to customers 1,139,759 1,235,104 Operating lease liabilities – current 8,060 7,653 Income taxes payable 3,269 5,495 Warrant liabilities 835 — Contingent consideration payable – current 1,856 8,070 Liability for share-based compensation – current 2,638 2,126 Total current liabilities 1,359,771 1,445,578 Non-current debt 2,374,425 2,353,358 Operating lease liabilities – non-current 34,833 35,573 Deferred tax liabilities 80,238 91,570 Warrant liabilities — 1,401 Derivative financial liabilities – non-current 224 — Liability for share-based compensation – non-current 2,031 2,268 Contingent consideration payable – non-current 25 325 Total non-current liabilities 2,491,776 2,484,495 Total liabilities 3,851,547 3,930,073 Commitments and contingent liabilities Total shareholders' equity 861,885 879,261 Total liabilities and shareholders' equity $ 4,713,432 $ 4,809,334 Expand Paysafe Limited Condensed Consolidated Statements of Cash Flow (unaudited) Three Months Ended March 31, ($ in thousands) 2025 2024 Cash flows from operating activities Net (loss) / income $ (19,472 ) $ 3,056 Adjustments for non-cash items: Depreciation and amortization 68,665 68,581 Unrealized foreign exchange gain (5,169 ) (2,519 ) Deferred tax benefit (12,129 ) (1,767 ) Interest expense, net 7,767 3,634 Share-based compensation 8,141 9,359 Other income, net (809 ) (7,162 ) Impairment expense on goodwill and other assets 1,282 653 Allowance for credit losses and other 7,571 11,739 (Gain) / loss on disposal of subsidiary and other assets, net (626 ) 177 Non-cash lease expense 2,336 2,232 Movements in working capital: Accounts receivable, net (4,232 ) (24,222 ) Prepaid expenses, other current assets, and related party receivables (9,186 ) (1,788 ) Accounts payable, other liabilities, and related party payables 5,809 (3,792 ) Income tax (receivable) / payable 2,531 654 Net cash flows from operating activities 52,479 58,835 Cash flows in investing activities Purchase of property, plant & equipment (4,329 ) (3,719 ) Other intangible asset expenditures (22,892 ) (20,706 ) Disposal of subsidiary 1,948 — Receipts under derivative financial instruments 1,312 2,531 Cash inflow from merchant reserves — 6,510 Other investing activities, net 68 1,559 Net cash flows used in investing activities (23,893 ) (13,825 ) Cash flows from financing activities Repurchases of shares withheld for taxes (560 ) (257 ) Proceeds from employee share purchase plan 540 — Purchase of treasury shares (9,998 ) (12,000 ) Settlement funds - merchants and customers, net (134,041 ) (108,302 ) Repurchase of borrowings — (30,545 ) Proceeds from loans and borrowings — 50,242 Repayments of loans and borrowings (22,839 ) (33,759 ) Proceeds under line of credit 197,000 225,000 Repayments under line of credit (201,000 ) (225,000 ) Contingent consideration paid (6,476 ) (7,755 ) Other financing activities 300 — Net cash flows used in financing activities (177,074 ) (142,376 ) Effect of foreign exchange rate changes 39,144 (25,951 ) Decrease in cash and cash equivalents, including customer accounts and other restricted cash during the period $ (109,344 ) $ (123,317 ) Cash and cash equivalents, including customer accounts and other restricted cash at beginning of the period 1,298,579 1,498,269 Cash and cash equivalents at end of the period, including customer accounts and other restricted cash $ 1,189,235 $ 1,374,952 Expand 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 organic revenue growth, 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 the United States ('U.S. GAAP'). Organic revenue growth is defined as growth excluding the impact of foreign currency fluctuations, revenue from interest on consumer deposits, acquisitions, and dispositions. Management believes organic revenue growth to be useful to users of our financial data because it enables them to better understand underlying revenue growth from period to period excluding the impact of these non-organic items. 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 other 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 other 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 Revenue to Non-GAAP Organic Revenue Three Months Ended March 31, ($ in thousands) 2025 2024 Revenue $ 401,000 $ 417,738 Currency adjustment (1) 5,430 — Interest revenue adjustment (2) (5,647 ) (9,475 ) Disposal adjustments (3) (5,213 ) (30,665 ) Organic revenue (4) $ 395,570 $ 377,598 Expand (1) This adjustment eliminates the impact of foreign exchange on revenue. (2) This adjustment eliminates the impact of revenue from interest on consumer deposits adjusted to exclude the effect of any fluctuations in foreign exchange rates. (3) This adjustment eliminates all revenue generated from the direct marketing payments processing business line that was disposed of during the three months ended March 31, 2025. (4) Organic revenue is defined as revenues in the stated period excluding the impact from acquisitions, dispositions, foreign currency fluctuations and interest revenue on consumer deposits. For dispositions in the current year, the pre-disposition results are excluded from the organic revenue calculations. There were no acquisitions requiring adjustments in the stated periods. Reported revenue growth and organic revenue growth for the three months ended March 31, 2025 was -4% and 5%, respectively. Organic revenue growth is measured as the change in organic revenue for the current period, divided by organic revenue from the prior period. Expand Reconciliation of Revenue to Non-GAAP Organic Revenue by Segment Merchant Solutions Digital Wallets Three Months Ended March 31, ($ in thousands) 2025 2024 Revenue $ 187,567 $ 190,457 Currency adjustment (1) 5,282 — Interest revenue adjustment (2) (5,187 ) (8,857 ) Organic revenue (4) $ 187,662 $ 181,600 Expand (1) This adjustment eliminates the impact of foreign exchange on revenue. (2) This adjustment eliminates the impact of revenue from interest on consumer deposits adjusted to exclude the effect of any fluctuations in foreign exchange rates. (3) This adjustment eliminates all revenue generated from the direct marketing payments processing business line that was disposed of during the three months ended March 31, 2025. (4) Organic revenue is defined as revenues in the stated period excluding the impact from acquisitions, dispositions, foreign currency fluctuations and interest revenue on consumer deposits. For dispositions in the current year, the pre-disposition results are excluded from the organic revenue calculations. There were no acquisitions requiring adjustments in the stated periods. Reported revenue growth and organic revenue growth for the three months ended March 31, 2025 was -2% and 3%, respectively, for the Digital Wallets segment and was -6% and 6%, respectively, for the Merchant Solutions segment. Organic revenue growth is measured as the change in organic revenue for the current period, divided by organic revenue from the prior period. Expand Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (excluding depreciation and amortization) (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. Expand Reconciliation of GAAP Net (Loss) / Income to Adjusted Net Income Three Months Ended March 31, ($ in thousands) 2025 2024 Net (loss) / income $ (19,472 ) $ 3,056 Other non operating expense / (income), net (1) 564 (9,774 ) Impairment expense on goodwill and other assets 1,282 653 Amortization of acquired assets (2) 33,268 33,603 Restructuring and other costs 7,785 452 (Gain) / loss on disposal of subsidiaries and other assets, net (626 ) 177 Share-based compensation expense 8,141 9,359 Discrete tax items (3) 3,430 5,465 Income tax expense on non-GAAP adjustments (4) (13,459 ) (7,685 ) Adjusted net income $ 20,913 $ 35,306 (in millions) Weighted average shares - diluted 59.8 62.0 Adjusted diluted impact 1.5 0.0 Adjusted weighted average shares - diluted 61.3 62.0 Expand (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, 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 benefit recorded on deferred tax assets representing $3,801 and $5,502 for the three months ended March 31, 2025 and 2024, respectively (b) measurement period adjustments which were $0 and ($57) for the three months ended March 31, 2025 and 2024, respectively, and (c) discrete tax expense on share-based compensation, which would not have been incurred as share-based compensation expense is removed from adjusted net income, of $0 and $182 for the three months ended March 31, 2025 and 2024, respectively. The remaining discrete tax items mainly relate to the movement in uncertain tax provisions relating to prior years. (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. Expand (1) The denominator used in the calculation of diluted adjusted net income per share for the three months ended March 31, 2024 and 2025 includes the dilutive effect of the Company's restricted stock units. Expand
