40% revenue growth with increasing
profitability year-over-year
Strategic focus on driving acquisition of
customers who meet our Ideal Customer Profiles (“ICPs”)
Raises 2023 Guidance
Board of Directors authorizes $80 million share
repurchase program
Payoneer Global Inc. (“Payoneer” or the
“Company”) (NASDAQ: PAYO), the financial technology company
empowering the world’s small and medium sized businesses to
transact, do business and grow globally, today reported financial
results for its first quarter ended March 31, 2023.
First Quarter 2023 Financial
Highlights
($ in mm)
1Q
2022
2Q
2022
3Q
2022
4Q
2022
1Q
2023
YoY Change Revenue
$
137.0
$
148.2
$
158.9
$
183.6
$
192.0
40
%
Transaction costs as a % of revenue
18.7
%
17.7
%
17.6
%
16.6
%
14.1
%
(460 bps) Revenue less transaction costs
$
111.4
$
122.0
$
130.9
$
153.2
$
164.9
48
%
Net income (loss)
20.2
4.4
(26.5
)
(10.2
)
7.9
(61
%)
Adjusted EBITDA
10.4
14.7
12.7
10.6
38.8
273
%
Operational Metrics
Active Ideal Customer Profiles (ICPs) ('000s)1
453
467
479
488
491
9
%
Volume ($bn)
$
14.6
$
14.6
$
15.1
$
16.9
$
15.7
8
%
Revenue as a % of volume ("Take Rate") 94 bps 101 bps 105 bps 109
bps 122 bps 28 bps
- Beginning in 2023, Payoneer shifted strategic focus on driving
acquisition of customers who meet our Ideal Customer Profiles
(ICPs) and will be disclosing this metric on a quarterly basis
going forward. Active ICPs are defined today as customers with a
Payoneer Account that have on average over $500 a month in volume
and were active over the trailing twelve-month period.
“We are in the very early innings of unlocking our full
potential to be the global financial operating partner for emerging
market SMBs,” said John Caplan, Chief Executive Officer of
Payoneer. “At the beginning of 2023, we committed to operating with
a greater focus on customer segments and to growing the number of
customers who meet our Ideal Customer Profiles. Active ICPs
generate the vast majority of our volume and revenue, and in the
first quarter we delivered 9% year-over-year growth in the number
of active ICPs on our platform.”
“We continue to generate meaningful revenue growth and margin
expansion while investing to create a scalable platform that
enables global commerce for our customers. In the first quarter, we
expanded our go-to-market operations to cover high growth potential
markets, launched new product features, and grew our partnership
ecosystem. We are pleased to announce that our Board of Directors
has approved a share repurchase program, underscoring our
confidence in the strength of our business and our conviction in
our ability to capture the significant opportunities ahead of
us.”
First Quarter 2023 Business
Highlights
- 25%+ year-over-year revenue growth in every region, with 50%+
revenue growth in key markets such as Vietnam, Argentina, Mexico,
Colombia, and the UAE
- Launched Poland as a new high growth, large addressable market
with local, in-country sales presence
- B2B AP/AR volume increased 2% year-over-year (23% excluding the
impact of customers actively exited in 3Q’22) and represented 11%
of total volume
- 50%+ growth in virtual Commercial Card usage and more than
doubled penetration year-over-year
- Grew the number of merchants using our Checkout services by
50%+ sequentially and we remain optimistic about the long-term
growth potential of Merchant Services
- Extended long-term relationships, including with Airbnb and
Upwork, both for another three years
- Signed new marketplace relationships across multiple
continents, including Mirakl in the US, OnBuy in the UK, and PKfare
in China
- Extended offering to more SMBs by collaborating with Zoho to
provide payment solutions to SMBs and freelancers working globally
in India, Australia, New Zealand, the UK, and the Philippines
- Initial launch of a new AI driven predictive model that seeks
to estimate the future profitability of new registrants, enabling
more scalable and efficient operations
- $5.5 billion of customer funds as of March 31, 2023, up $837
million or 18% year-over-year
Payoneer Board of Directors authorizes
$80 million share repurchase program
On May 7, Payoneer’s Board of Directors authorized the
repurchase of up to $80 million of the company’s outstanding common
stock. Share repurchases may take place from time to time, in the
open market, through privately negotiated transactions or other
means including in accordance with Rule 10b-18 and/or Rule 10b5-1
of the Exchange Act. The timing and total amount of repurchases is
subject to business and market conditions and the company’s
discretion. The share repurchase program will have a term of 24
months, may be suspended or discontinued at any time, and does not
obligate the company to acquire any amount of common stock.
2023 Guidance
“Payoneer delivered 40% year-over-year revenue growth and
significant adjusted EBITDA profitability growth,” said Bea
Ordonez, Chief Financial Officer. “Strong momentum to start the
year reflects continued customer acquisition, growth of high value
services, as well as increased interest income revenue from
customer funds held on our platform. Despite the volatility in the
US banking sector in the first quarter, our customers’ continued
trust in Payoneer drove an 18% increase in customer funds
year-over-year, outpacing overall volume growth of 8%. The strength
and stability of our global banking infrastructure is one of our
key strengths.”
“We are raising our full year 2023 guidance. Our updated
guidance reflects strong first quarter results, $200 million of
interest income revenue for the full year, as well as the impact of
macro pressures on our customers’ businesses, and greater
discipline around operating expenses. We remain committed to
investing in our business to drive long-term profitable
growth.”
2023 guidance is as follows:
Revenue
$810 million - $820 million
Transaction costs
~15.5% of revenue
Adjusted EBITDA (1)
$140 million to $150 million
(1)
Please refer to “Financial Information;
Non-GAAP Financial Measures” below.
Guidance for fiscal year, where adjusted, is provided on a
non-GAAP basis, which Payoneer will continue to identify as it
reports its future financial results. The Company cannot reconcile
its expected adjusted EBITDA to expected net income under “2023
Guidance” without unreasonable effort because certain items that
impact net income and other reconciling metrics are out of the
Company's control and/or cannot be reasonably predicted at this
time, which unavailable information could have a significant impact
on the Company’s GAAP financial results.
Webcast
Payoneer will host a live webcast of its earnings on a
conference call with the investment community beginning at 8:30
a.m. ET today, May 9, 2023. To access the webcast, go to the
investor relations section of the Company’s website at
https://investor.payoneer.com. A replay will be available on the
investor relations website following the call.
About Payoneer
Payoneer is the financial technology company empowering the
world’s small and medium-sized businesses to transact, do business
and grow globally. Payoneer was founded in 2005 with the belief
that talent is equally distributed, but opportunity is not. It is
our mission to enable anyone anywhere to participate and succeed in
the global digital economy. Since our founding, we have built a
global financial platform that has already made it easier for
millions of SMBs, particularly in emerging markets, to pay and get
paid, manage their funds, and grow their business.
Forward-Looking Statements
This press release includes, and oral statements made from time
to time by representatives of Payoneer, may be considered
“forward-looking statements” within the meaning of the “safe
harbor” provisions of the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements generally
relate to future events or Payoneer’s future financial or operating
performance. For example, projections of future revenue,
transaction cost and adjusted EBITDA are forward-looking
statements. In some cases, you can identify forward-looking
statements by terminology such as “may,” “should,” “expect,”
“intend,” “plan,” “will,” “estimate,” “anticipate,” “believe,”
“predict,” “potential” or “continue,” or the negatives of these
terms or variations of them or similar terminology. Such
forward-looking statements are subject to risks, uncertainties, and
other factors which could cause actual results to differ materially
from those expressed or implied by such forward looking statements.
These forward-looking statements are based upon estimates and
assumptions that, while considered reasonable by Payoneer and its
management, as the case may be, are inherently uncertain. Factors
that may cause actual results to differ materially from current
expectations include, but are not limited to: (1) changes in
applicable laws or regulations; (2) the possibility that Payoneer
may be adversely affected by geopolitical and other economic,
business and/or competitive factors; (3) Payoneer’s estimates of
its financial performance; (4) the outcome of any known and/or
unknown legal or regulatory proceedings; and (5) other risks and
uncertainties set forth in Payoneer’s Annual Report on Form 10-K
for the period ended December 31, 2022 and future reports that
Payoneer may file with the SEC from time to time. Nothing in this
press release should be regarded as a representation by any person
that the forward-looking statements set forth herein will be
achieved or that any of the contemplated results of such
forward-looking statements will be achieved. You should not place
undue reliance on forward-looking statements, which speak only as
of the date they are made. Payoneer does not undertake any duty to
update these forward-looking statements.
Financial Information; Non-GAAP Financial Measures
Some of the financial information and data contained in this
press release, such as adjusted EBITDA, have not been prepared in
accordance with United States generally accepted accounting
principles (“GAAP”). Payoneer uses these non-GAAP measures to
compare Payoneer’s performance to that of prior periods for
budgeting and planning purposes. Payoneer believes these non-GAAP
measures of financial results provide useful information to
management and investors regarding certain financial and business
trends relating to Payoneer’s results of operations. Payoneer's
method of determining these non-GAAP measures may be different from
other companies' methods and, therefore, may not be comparable to
those used by other companies and Payoneer does not recommend the
sole use of these non-GAAP measures to assess its financial
performance. Payoneer management does not consider these non-GAAP
measures in isolation or as an alternative to financial measures
determined in accordance with GAAP. The principal limitation of
these non-GAAP financial measures is that they exclude significant
expenses and income that are required by GAAP to be recorded in
Payoneer’s financial statements. In addition, they are subject to
inherent limitations as they reflect the exercise of judgments by
management about which expense and income are excluded or included
in determining these non-GAAP financial measures. In order to
compensate for these limitations, management presents non-GAAP
financial measures in connection with GAAP results. You should
review Payoneer’s financial statements, which are included in
Payoneer’s Annual Report on Form 10-K for the year ended December
31, 2022 and its subsequent Quarterly Reports on Form 10-Q, and not
rely on any single financial measure to evaluate Payoneer’s
business.
Non-GAAP measures include the following item: Adjusted EBITDA: We provide adjusted EBITDA, a
non-GAAP financial measure that represents our net income (loss)
adjusted to exclude: M&A related income, stock-based
compensation expenses, reorganization related expenses, share in
losses (gain) of associated company, gain from change in fair value
of warrants, other financial expense (income), net, taxes on
income, and depreciation and amortization.
Other companies may calculate the above measure differently, and
therefore Payoneer’s measures may not be directly comparable to
similarly titled measures of other companies.
TABLE - 1 PAYONEER GLOBAL INC. CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (U.S. dollars in
thousands, except share and per share data)
(Unaudited) Three months ended March 31,
2023
2022
Revenues $
192,014
$
136,958
Transaction costs (Exclusive of depreciation and
amortization shown separately below and inclusive of $421 and $320
interest expense and fees associated with related party transaction
during the three months ended March 31, 2023 and 2022,
respectively)
27,081
25,575
Other operating expenses (Exclusive of depreciation and
amortization shown separately below)
40,095
34,759
Research and development expenses
29,280
25,915
Sales and marketing expenses
47,826
34,469
General and administrative expenses
26,681
18,128
Depreciation and amortization
6,039
4,455
Total operating expenses
177,002
143,301
Operating income (loss)
15,012
(6,343)
Financial income (expense): Gain (loss)
from change in fair value of Warrants
(252)
31,196
Other financial income (expense), net
2,350
(2,695)
Financial income, net
2,098
28,501
Income before taxes on income and share in gains of
associated company
17,110
22,158
Taxes on income
9,172
1,967
Share in gains of associated company
—
20
Net income $
7,938
$
20,211
Other comprehensive income, net of tax Foreign
currency translation adjustments
—
390
Other comprehensive income, net of tax
—
390
Comprehensive income $
7,938
$
20,601
Per Share Data Net income per share attributable to
common stockholders — Basic earnings per share $
0.02
$
0.06
— Diluted earnings per share $
0.02
$
0.06
Weighted average common shares outstanding — Basic
360,220,161
342,324,722
Weighted average common shares outstanding — Diluted
388,308,279
365,992,174
Disaggregation of revenue
The following table presents revenue recognized from contracts
with customers as well as revenue from other sources, consisting of
interest income:
Three months ended
March 31,
2023
2022
Revenue recognized at a point in time $
131,892
$
125,943
Revenue recognized over time
10,064
10,156
Revenue from contracts with customers
141,956
136,099
Revenue from other sources
50,058
859
Total revenues $
192,014
$
136,958
The following table presents our revenue disaggregated by
primary regional market, with revenues being attributed to the
country (in the region) in which the billing address of the
transacting customer is located.
Three months ended
March 31,
2023
2022
Primary regional markets
Greater China1 $
63,960
$
43,041
Europe2
38,621
28,461
North America3
25,536
20,276
Asia-Pacific2
25,381
19,019
South Asia, Middle East and North Africa2
19,945
15,412
Latin America2
18,571
10,749
Total revenues $
192,014
$
136,958
1.
Greater China is inclusive of
mainland China, Hong Kong and Taiwan
2.
No single country included in any of these regions generated
more than 10% of total revenue
3.
The United States is our country of domicile. Of North
America revenues, the US represents $24,575 and $19,782 during the
three months ended March 31, 2023 and 2022, respectively.
TABLE - 2 PAYONEER GLOBAL INC.
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (UNAUDITED)
(U.S. dollars in thousands)
Three months ended
March 31,
2023
2022
Net income $
7,938
$
20,211
Depreciation and amortization
6,039
4,455
Taxes on income
9,172
1,967
Other financial income (expense), net
(2,350)
2,695
EBITDA
20,799
29,328
Stock based compensation expenses(1)
16,927
12,908
Share in gain of associated company
—
(20)
M&A related expense (income)(2)
774
(619)
Loss (gain) from change in fair value of Warrants(3)
252
(31,196)
Adjusted EBITDA $
38,752
$
10,401
Three months ended,
Mar. 31, 2022
June 30, 2022
Sept. 30, 2022
Dec. 31, 2022
Mar. 31, 2023 Net
income (loss) $
20,211
$
4,422
$
(26,452)
$
(10,151)
$
7,938
Depreciation & amortization
4,455
5,171
5,899
5,333
6,039
Taxes on income
1,967
1,374
2,635
7,610
9,172
Other financial expenses (income), net
2,695
4,824
3,617
(1,005)
(2,350)
EBITDA
29,328
15,791
(14,301)
1,787
20,799
Stock based compensation expenses(1)
12,908
11,890
13,525
13,827
16,927
Share in losses (gain) of associated company
(20)
7
2
13
—
M&A related expense (income)(2)
(619)
(116)
(1,588)
—
774
Loss (gain) from change in fair value of Warrants(3)
(31,196)
(12,831)
15,095
(5,031)
252
Adjusted EBITDA $
10,401
$
14,741
$
12,733
$
10,596
$
38,752
(1)
Represents non-cash charges
associated with stock-based compensation expense, which has been,
and will continue to be for the foreseeable future, a significant
recurring expense in our business and an important part of our
compensation strategy.
(2)
Amounts for the three months ended March
31, 2023 relate to M&A-related third-party fees, including
related legal, consulting and other expenditures. Amounts for the
three months ended March 31, 2022 relates to a non-recurring fair
value adjustment of a liability related to our 2020 acquisition of
optile.
(3)
Changes in the estimated fair value of the
warrants are recognized as gain or loss on the condensed
consolidated statements of comprehensive income. The impact is
removed from EBITDA as it represents market conditions that are not
in control of the Company.
TABLE - 3 PAYONEER GLOBAL INC. EARNINGS PER
SHARE (UNAUDITED) (U.S. dollars in thousands, except share and
per share data)
(Unaudited) Three months ended
March 31,
2023
2022
Numerator:
Net income $
7,938
$
20,211
Denominator:
Weighted average common shares outstanding
— Basic
360,220,161
342,324,722
Add: Dilutive impact of RSUs and options to purchase common stock
27,332,566
22,968,556
Dilutive impact of private warrants
755,552
698,896
Weighted average common shares – diluted
388,308,279
365,992,174
Net income per share attributable to common stockholders — Basic
earnings per share $
0.02
$
0.06
Diluted earnings per share $
0.02
$
0.06
TABLE - 4 PAYONEER GLOBAL INC.
CONSOLIDATED BALANCE SHEETS (U.S. dollars in
thousands, except share and per share data)
March 31,
December 31,
2023
2022
(Unaudited)
Assets:
Current
assets:
Cash and cash equivalents $
544,542
$
543,299
Restricted cash
9,525
2,882
Customer funds
5,467,274
5,838,612
Accounts receivable (net of allowance of $246 at March 31, 2023 and
December 31, 2022)
10,831
12,878
Capital advance receivables (net of allowance of $5,415 at March
31, 2023 and $5,311 at December 31, 2022)
42,073
37,155
Other current assets
44,521
36,278
Total current assets
6,118,766
6,471,104
Non-current assets:
Property, equipment and software, net
14,335
14,392
Goodwill
19,889
19,889
Intangible assets, net
50,065
45,444
Restricted cash
4,851
4,848
Deferred taxes
2,363
4,169
Investment in associated company
—
6,429
Severance pay fund
1,072
1,095
Operating lease right-of-use assets
15,223
15,260
Other assets
11,154
12,021
Total assets $
6,237,718
$
6,594,651
Liabilities and shareholders’ equity:
Current liabilities:
Trade payables $
31,767
$
41,566
Outstanding operating balances
5,467,274
5,838,612
Other payables
87,051
97,334
Total current liabilities
5,586,092
5,977,512
Non-current liabilities:
Long-term debt from related party
17,120
16,138
Warrant liability
26,166
25,914
Other long-term liabilities
31,494
29,831
Total liabilities
5,660,872
6,049,395
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $0.01 par value,
380,000,000 shares authorized; no shares were issued and
outstanding at March 31, 2023 and December 31, 2022.
—
—
Common stock, $0.01 par value, 3,800,000,000 and 3,800,000,000
shares authorized; 359,202,123 and 352,842,025 shares issued and
outstanding at March 31, 2023 and December 31, 2022, respectively.
3,592
3,528
Additional paid-in capital
674,021
650,433
Accumulated other comprehensive income (loss)
(176
)
(176
)
Accumulated deficit
(100,591
)
(108,529
)
Total shareholders’ equity
576,846
545,256
Total liabilities and shareholders’ equity $
6,237,718
$
6,594,651
TABLE - 5 PAYONEER GLOBAL INC. CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED) (U.S. dollars in
thousands)
Three months
ended March 31,
2023
2022
Cash Flows from Operating Activities
Net income
$
7,938
$
20,211
Adjustment to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization
6,039
4,455
Deferred taxes
1,806
1,523
Stock-based compensation expenses
16,927
13,114
Share in gains of associated company
—
(20
)
Loss (gain) from change in fair value of Warrants
252
(31,196
)
Foreign currency re-measurement loss (gain)
(416
)
77
Changes in operating assets and liabilities:
Other current assets
(8,159
)
(4,622
)
Trade payables
(10,090
)
176
Deferred revenue
323
(160
)
Accounts receivable, net
2,047
(481
)
Capital advance extended to customers
(71,184
)
(67,706
)
Capital advance collected from customers
66,266
76,356
Other payables
(10,414
)
(10,794
)
Other long-term liabilities
(635
)
(1,050
)
Operating lease right-of-use assets
2,335
2,381
Other assets
867
108
Net cash provided by operating activities
3,902
2,372
Cash Flows from Investing Activities
Purchase
of property, equipment and software
(1,764
)
(2,690
)
Capitalization of internal use software
(7,588
)
(3,812
)
Severance pay fund distributions, net
23
46
Customer funds in transit, net
(53,628
)
34,409
Net cash inflow from acquisition of remaining interest in joint
venture
5,953
—
Net cash provided by (used in) investing activities
(57,004
)
27,953
Cash Flows from Financing Activities
Proceeds
from issuance of common stock in connection with stock based
compensation plan
5,865
3,681
Outstanding operating balances, net
(371,338
)
229,299
Borrowings under related party facility
9,842
7,163
Repayments under related party facility
(8,859
)
(6,532
)
Net cash provided by (used in) financing activities
(364,490
)
233,611
Effect of exchange rate changes on cash and cash
equivalents
515
(78
)
Net change in cash, cash equivalents, restricted cash and
customer funds
(417,077
)
263,858
Cash, cash equivalents, restricted cash and customer funds at
beginning of period
6,386,720
4,838,433
Cash, cash equivalents, restricted cash and customer funds at
end of period $
5,969,643
$
5,102,291
Supplemental information of investing and financing activities
not involving cash flows:
Property, equipment, and software acquired
but not paid $
400
$
147
Internal use software capitalized but not paid $
2,609
$
1,265
Right of use assets obtained in exchange for new operating lease
liabilities $
2,298
$
7,303
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230509005217/en/
Investors: Michelle Wang investor@payoneer.com
Media: PR@payoneer.com
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