Paysafe Limited (“Paysafe” or the “Company”) (NYSE: PSFE), a
leading payments platform, today announced its financial results
for the second quarter of 2023.
Second Quarter 2023 Financial Highlights (Metrics
compared to second quarter of 2022)
- Revenue of $402.3 million, increased 6%; increased 5% on a
constant currency basis
- Total Payment Volume of $35.5 billion1, increased 6%
- Net loss attributable to the Company of $1.8 million, or
($0.03) per diluted share, compared to $658.7 million, or ($10.89)
per diluted share, and reflecting an impairment charge of $676.5
million in the prior year period
- Adjusted net income of $34.7 million, or $0.56 per diluted
share, compared to $37.5 million, or $0.62 per diluted share, and
reflecting an increase in interest expense of $8.3 million
- Adjusted EBITDA of $113.0 million, increased 10%; increased 9%
on a constant currency basis
- Net leverage2 decreased to 5.6x as of June 30, 2023, compared
to 5.8x as of December 31, 2022
Bruce Lowthers, CEO of Paysafe, commented: “We are pleased with
our results through the first half of 2023, including 6% revenue
growth and 7% Adjusted EBITDA growth, driven by strong volumes
across SMB and e-commerce, particularly North America iGaming, as
well as progress in classic digital wallets, where we continue to
see improved user engagement. Based on our results to date, we are
raising our full year 2023 revenue growth outlook to the range of
6.5% to 7.5%, while maintaining more than 100 basis points in
Adjusted EBITDA margin expansion this year.”
Strategic and Operational Highlights
- Delivered fourth consecutive year-over-year quarterly revenue
growth
- Continued to progress Paysafe's sales transformation, fueling
growth in enterprise-level bookings, cross-selling into existing
client base and multi-product wins
- Advanced Paysafe’s product development priorities – began to
roll out network tokenization to enhance client experience,
increase authorization rates and reduce fraud
- Enabled new regional payment methods, enterprise-wide,
connecting our North America, Europe and Latin America
networks
- Launched Skrill digital wallet with multiple iGaming operators
in Ontario
- Won ‘Payments Provider of the Year’ award at the 2023 EGR
(eGaming Review) North America Awards, Paysafe's third-straight win
in the category
1.
Excludes embedded wallet related volumes of $6.9 billion and
$13.5 billion in the second quarter of 2023 and 2022,
respectively.
2.
Paysafe defines net leverage as the calculation of net debt (total
debt less cash and cash equivalents) divided by the sum of the last
twelve months (LTM) of Adjusted EBITDA. For the period ending June
30, 2023, total debt was $2,575.8 million and cash and cash
equivalents was $206.7 million, and LTM Adjusted EBITDA was $423.9
million, respectively. For the period ending December 31, 2022,
total debt was $2,643.5 million and cash and equivalents was $260.2
million, and LTM Adjusted EBITDA was $410.0 million, respectively.
Second Quarter of 2023 Summary of Consolidated
Results
Three Months Ended
Six Months Ended
June 30,
June 30,
($ in thousands) (unaudited)
2023
2022
2023
2022
Revenue
$
402,338
$
378,913
$
790,187
$
746,581
Gross Profit (excluding depreciation and
amortization)
$
235,724
$
219,926
$
464,634
$
440,491
Net loss attributable to the Company
$
(1,765
)
$
(658,739
)
$
(5,573
)
$
(1,829,922
)
Adjusted EBITDA
$
113,031
$
102,953
$
220,846
$
206,920
Adjusted EBITDA margin
28.1
%
27.2
%
27.9
%
27.7
%
Adjusted net income attributable to the
Company
$
34,678
$
37,541
$
67,754
$
74,802
Total revenue for the second quarter of 2023 was $402.3 million,
an increase of 6%, compared to $378.9 million in the prior year
period, reflecting 6% growth in total payment volume. Excluding a
$3.2 million favorable impact from changes in foreign exchange
rates, total revenue increased 5%. Revenue from the Merchant
Solutions segment increased 6%, driven by small and medium-sized
business (SMB) volume in North America and strong growth from
iGaming in the region. Revenue from the Digital Wallets segment
increased 6% on a reported basis and 5% on a constant currency
basis, driven by classic digital wallets supported by the Company's
improvements to increase consumer engagement and merchant checkout
conversion rates as well as the contribution of interest revenue on
consumer deposits.
Net loss attributable to the Company for the second quarter was
$1.8 million, compared to $658.7 million in the prior year period.
The decrease in net loss primarily reflects an impairment of
goodwill recognized in the prior year period. Adjusted net income
for the second quarter was $34.7 million, compared to $37.5 million
in the prior year period, reflecting an increase in interest
expense which increased by $8.3 million to $36.8 million for the
second quarter of 2023 from $28.4 million in the prior year
period.
Adjusted EBITDA for the second quarter was $113.0 million, an
increase of 10%, compared to $103.0 million in the prior year
period. Excluding a $1.0 million favorable impact from changes in
foreign exchange rates, Adjusted EBITDA increased 9% compared to
the prior year period. Adjusted EBITDA margin for the second
quarter increased to 28.1%, compared to 27.2% in the prior year
period, reflecting higher gross margins in the Digital Wallets
segment as well as operating leverage.
Second quarter net cash used in operating activities was $233.9
million, compared to an inflow of $875.6 million in the prior year
period, mainly reflecting the timing of settlement of funds payable
and amounts due to customers. Free cash flow was $94.7 million,
compared to $39.7 million in the prior year period, which includes
the movement in customer accounts and other restricted cash which
was an increase of $302.6 million in the second quarter of 2023,
compared to a decrease of $849.7 million in the prior year
period.
Balance Sheet
As of June 30, 2023, total cash and cash equivalents were $206.7
million, total debt was $2.6 billion and net debt was $2.4 billion.
Compared to March 31, 2023, total debt decreased by $36 million,
reflecting net repayments of $42 million, partially offset by
movement in foreign exchange rates.
Summary of Segment Results
Three Months Ended
Six Months Ended
June 30,
YoY
June 30,
YoY
($ in thousands) (unaudited)
2023
2022
change
2023
2022
change
Revenue:
Merchant Solutions
$
225,698
$
212,770
6
%
$
434,219
$
405,115
7
%
Digital Wallets
$
179,079
$
168,205
6
%
$
360,527
$
346,032
4
%
Intersegment
$
(2,439
)
$
(2,062
)
18
%
$
(4,559
)
$
(4,566
)
0
%
Total Revenue
$
402,338
$
378,913
6
%
$
790,187
$
746,581
6
%
Adjusted EBITDA:
Merchant Solutions
$
55,769
$
55,113
1
%
$
108,105
$
103,651
4
%
Digital Wallets
$
77,211
$
69,645
11
%
$
156,420
$
144,144
9
%
Corporate
$
(19,949
)
$
(21,805
)
9
%
$
(43,679
)
$
(40,875
)
-7
%
Total Adjusted EBITDA
$
113,031
$
102,953
10
%
$
220,846
$
206,920
7
%
Adjusted EBITDA margin:
Merchant Solutions
24.7
%
25.9
%
(120 bps)
24.9
%
25.6
%
(70 bps)
Digital Wallets
43.1
%
41.4
%
170 bps
43.4
%
41.7
%
170 bps
Total Adjusted EBITDA margin
28.1
%
27.2
%
90 bps
27.9
%
27.7
%
20 bps
Full Year 2023 Financial Guidance
($ in millions) (unaudited)
Full Year 2023 - prior
Full Year 2023 -
updated
Revenue
$1,580 - $1,600
$1,595 - $1,608
Adjusted EBITDA
$452 - $462
$454 - $462
Webcast and Conference Call
Paysafe will host a live webcast to discuss the results today at
8:30 a.m. (ET). The webcast and supplemental information can be
accessed on the investor relations section of the Paysafe website
at ir.paysafe.com. An archive will be available after the
conclusion of the live event and will remain available via the same
link for one year.
Time
Tuesday, August 15, 2023, at 8:30 a.m.
ET
Webcast
Go to the Investor Relations section of
the Paysafe website to listen and view slides
Dial in
877-407-3037 (U.S. toll-free);
215-268-9852 (International)
About Paysafe
Paysafe Limited (“Paysafe”) (NYSE: PSFE) (PSFE.WS) is a leading
payments platform with an extensive track record of serving
merchants and consumers in the global entertainment sectors. Its
core purpose is to enable businesses and consumers to connect and
transact seamlessly through industry-leading capabilities in
payment processing, digital wallet, and online cash solutions. With
over 20 years of online payment experience, an annualized
transactional volume of over $130 billion in 2022, and
approximately 3,300 employees located in 12+ countries, Paysafe
connects businesses and consumers across 100 payment types in over
40 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 www.paysafe.com.
Forward-looking Statements
This press release includes “forward-looking statements” within
the meaning of the “safe harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995. 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” or the “Company”) 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,”
“may,” “might,” “plan,” “possible,” “potential,” “predict,”
“project,” “seek,” “should,” “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 and
uncertainties that could 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 be deemed to be handling proceeds of crimes being
committed 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
third 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
the COVID-19 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 https://www.sec.gov. 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 Condensed Consolidated
Balance Sheets (unaudited)
($ in thousands)
June 30, 2023
December 31, 2022
Assets
Current assets
Cash and cash equivalents
$
206,703
$
260,219
Customer accounts and other restricted
cash
1,426,419
1,866,976
Accounts receivable, net of allowance for
credit losses of $6,710 and $10,558, respectively
168,627
159,324
Settlement receivables, net of allowance
for credit losses of $4,014 and $5,398, respectively
98,643
147,774
Prepaid expenses and other current
assets
81,231
60,810
Total current assets
1,981,623
2,495,103
Deferred tax assets
104,538
104,538
Property, plant and equipment, net
15,213
11,947
Operating lease right-of-use assets
26,797
35,509
Derivative asset
16,735
17,321
Intangible assets, net
1,243,775
1,291,458
Goodwill
2,016,787
1,999,132
Other assets – noncurrent
6,046
2,048
Total assets
$
5,411,514
$
5,957,056
Liabilities and equity
Current liabilities
Accounts payable and other liabilities
$
205,634
$
241,529
Short-term debt
10,190
10,190
Funds payable and amounts due to
customers
1,558,272
1,997,867
Operating lease liabilities – current
8,315
7,953
Income taxes payable
—
11,325
Contingent and deferred consideration
payable – current
12,272
18,171
Liability for share-based compensation –
current
3,872
11,400
Total current liabilities
1,798,555
2,298,435
Non-current debt
2,565,593
2,633,269
Operating lease liabilities –
non-current
21,728
29,913
Deferred tax liabilities
127,819
118,791
Warrant liabilities
2,576
3,094
Liability for share-based compensation –
non-current
2,603
4,942
Contingent and deferred consideration
payable – non-current
8,476
8,975
Total liabilities
4,527,350
5,097,419
Commitments and contingent liabilities
Total shareholders' equity
884,164
859,637
Total liabilities and shareholders'
equity
$
5,411,514
$
5,957,056
Paysafe Limited Condensed Consolidated
Statements of Operations (unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
($ in thousands)
2023
2022
2023
2022
Revenue
$
402,338
$
378,913
$
790,187
$
746,581
Cost of services (excluding depreciation
and amortization)
166,614
158,987
325,553
306,090
Selling, general and administrative
133,600
134,709
261,911
265,277
Depreciation and amortization
66,425
69,585
129,972
133,008
Impairment expense on goodwill and
intangible assets
193
676,456
275
1,882,187
Restructuring and other costs
1,340
41,602
3,330
54,193
Loss on disposal of subsidiary and other
assets, net
—
660
—
660
Operating income / (loss)
34,166
(703,086
)
69,146
(1,894,834
)
Other income, net
7,376
56,155
9,923
59,633
Interest expense, net
(36,762
)
(28,426
)
(74,218
)
(54,382
)
Income / (loss) before taxes
4,780
(675,357
)
4,851
(1,889,583
)
Income tax expense / (benefit)
6,545
(16,618
)
10,424
(60,032
)
Net loss
$
(1,765
)
$
(658,739
)
$
(5,573
)
$
(1,829,551
)
Less: net income attributable to
non-controlling interest
—
—
—
371
Net loss attributable to the
Company
$
(1,765
)
$
(658,739
)
$
(5,573
)
$
(1,829,922
)
Net loss per share attributable to the
Company – basic and diluted
$
(0.03
)
$
(10.89
)
$
(0.09
)
$
(30.29
)
Net loss
$
(1,765
)
$
(658,739
)
$
(5,573
)
$
(1,829,551
)
Other comprehensive income / (loss), net
of tax of $0:
Gain / (loss) on foreign currency
translation
8,204
(36,524
)
10,378
(22,128
)
Total comprehensive income /
(loss)
$
6,439
$
(695,263
)
$
4,805
$
(1,851,679
)
Less: comprehensive income attributable to
non-controlling interest
—
—
—
371
Total comprehensive income / (loss)
attributable to the Company
$
6,439
$
(695,263
)
$
4,805
$
(1,852,050
)
Paysafe Limited Consolidated Net (loss) /
income per share attributable to the Company
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Numerator ($ in thousands)
Net loss attributable to the Company -
basic and diluted
$
(1,765
)
$
(658,739
)
$
(5,573
)
$
(1,829,922
)
Denominator (in millions)
Weighted average shares – basic and
diluted
61.5
60.5
61.2
60.4
Net loss per share attributable to the
Company
Basic and diluted
$
(0.03
)
$
(10.89
)
$
(0.09
)
$
(30.29
)
Paysafe Limited Condensed Consolidated
Statements of Cash Flow (unaudited)
Six Months Ended
June 30,
($ in thousands)
2023
2022
Cash flows from operating
activities
Net loss
$
(5,573
)
$
(1,829,551
)
Adjustments for non-cash items:
Depreciation and amortization
129,972
133,008
Unrealized foreign exchange loss /
(gain)
7,207
(34,408
)
Deferred tax expense / (benefit)
8,104
(58,985
)
Interest expense, net
(666
)
9,772
Share-based compensation
18,123
31,706
Other income, net
(14,627
)
(23,009
)
Impairment expense on goodwill and
intangible assets
275
1,882,187
Allowance for credit losses and other
9,241
14,874
Loss on disposal of subsidiary and other
assets, net
-
660
Non-cash lease expense
4,501
3,491
Movements in working capital:
Accounts receivable, net
(17,648
)
(14,280
)
Prepaid expenses, other current assets,
and related party receivables
(7,488
)
(26,020
)
Settlement receivables, net
50,131
27,624
Accounts payable, other liabilities, and
related party payables
(37,174
)
39,963
Funds payable and amounts due to
customers
(473,230
)
1,250,221
Income tax payable and receivable
(24,033
)
(27,806
)
Net cash flows (used in) / provided by
operating activities
(352,885
)
1,379,447
Cash flows in investing
activities
Purchase of property, plant &
equipment
(6,339
)
(1,839
)
Purchase of merchant portfolios
(23,488
)
(23,983
)
Purchase of other intangible assets
(49,487
)
(42,892
)
Acquisition of business, net of cash
acquired
—
(424,722
)
Net cash outflow on disposal of
subsidiary
—
(826
)
Receipts under derivative financial
instruments
4,784
—
Other investing activities, net
(478
)
—
Net cash flows used in investing
activities
(75,008
)
(494,262
)
Cash flows from financing
activities
Cash settled equity awards
(484
)
(154
)
Repurchases of shares withheld for
taxes
(6,709
)
—
Proceeds from exercise of warrants
—
3
Repurchase of borrowings
(83,635
)
(9,508
)
Proceeds from loans and borrowings
55,781
86,246
Repayments of loans and borrowings
(55,044
)
(92,867
)
Payments under derivative financial
instruments, net
—
(1,371
)
Payment of debt issuance costs
—
(6,261
)
Proceeds under line of credit
450,000
373,082
Repayments under line of credit
(450,000
)
(350,000
)
Contingent consideration received
—
2,621
Contingent and deferred consideration
paid
(7,642
)
(14,165
)
Net cash flows used in financing
activities
(97,733
)
(12,374
)
Effect of foreign exchange rate
changes
31,553
(133,216
)
(Decrease) / increase in cash and cash
equivalents, including customer accounts and other restricted cash
during the period
$
(494,073
)
$
739,595
Cash and cash equivalents, including
customer accounts and other restricted cash, at beginning of the
period
2,127,195
1,971,718
Cash and cash equivalents, including
customer accounts and other restricted cash, at end of the
period
$
1,633,122
$
2,711,313
Six Months Ended
June 30,
2023
2022
Cash and cash equivalents
$
206,703
$
243,533
Customer accounts and other restricted
cash, net
1,426,419
2,467,780
Total cash and cash equivalents,
including customer accounts and other restricted cash, net
$
1,633,122
$
2,711,313
Non-GAAP Financial Measures
To supplement the Company’s condensed consolidated financial
statements presented in accordance with generally accepted
accounting principles, or GAAP, the company uses non-GAAP measures
of certain components of financial performance. This includes Gross
Profit (excluding depreciation and amortization), Gross Profit
Margin (excluding depreciation and amortization), Adjusted EBITDA,
Adjusted EBITDA margin, Free cash flow and Free cash flow
conversion, 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”).
Gross Profit (excluding depreciation and amortization) is
defined as revenue less cost of services (excluding depreciation
and amortization). Gross Profit Margin (excluding depreciation and
amortization) is defined as Gross Profit (excluding depreciation
and amortization) as a percentage of revenue. Management believes
Gross Profit to be a useful profitability measure to assess the
performance of our businesses and ability to manage cost.
Adjusted EBITDA is defined as net income/(loss) before the
impact of income tax (benefit)/expense, interest expense, net,
depreciation and amortization, share-based compensation, impairment
expense on goodwill and intangible assets, restructuring and other
costs, loss/(gain) on disposal of a subsidiaries and other assets,
net, and other income/(expense), net. These adjustments also
include certain costs and transaction items that are not reflective
of the underlying operating performance of the Company. Adjusted
EBITDA margin is defined as Adjusted EBITDA as a percentage of
Revenue. Management believes Adjusted EBITDA to be a useful
profitability measure to assess the performance of our businesses
and improves the comparability of operating results across
reporting periods.
Adjusted net income excludes the impact of certain
non-operational and non-cash items. Adjusted net income is defined
as net income/(loss) attributable to the Company before the impact
of other non-operating income / (expense), net, impairment expense
on goodwill and intangible assets, restructuring and other costs,
accelerated amortization of debt fees, amortization of acquired
assets, loss/(gain) on disposal of subsidiaries and other assets,
share-based compensation, discrete tax items and the income tax
(benefit)/expense on these non-GAAP adjustments. Adjusted net
income per share is adjusted net income as defined above divided by
adjusted weighted average dilutive shares outstanding. Management
believes the removal of certain non-operational and non-cash items
from net income enhances shareholders ability to evaluate the
Company’s business performance and profitability by improving
comparability of operating results across reporting periods.
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,
cash paid for interest and movements in customer accounts and other
restricted cash. 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. Free cash flow conversion
is defined as free cash flow as a percentage of Adjusted EBITDA.
Management believes 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, Gross Profit Margin, Adjusted
EBITDA, Adjusted EBITDA margin, Free cash flow and Free cash flow
conversion, Adjusted net income, Adjusted net income per share, and
Net leverage when considered together with the Company’s results
presented in accordance with GAAP, provide users with useful
supplemental information in comparing the operating results across
reporting periods by excluding items that are not considered
indicative of Paysafe’s core operating performance. In addition,
management believes the presentation of these non-GAAP financial
measures provides useful supplemental information in assessing the
Company’s results on a basis that fosters comparability across
periods by excluding the impact on the Company’s reported GAAP
results of acquisitions and dispositions that have occurred in such
periods. However, these non-GAAP measures exclude items that are
significant in understanding and assessing Paysafe’s financial
results or position. Therefore, these measures should not be
considered in isolation or as alternatives to revenue, net income,
cash flows from operations or other measures of profitability,
liquidity or performance under GAAP.
You should be aware that Paysafe’s presentation of these
measures may not be comparable to similarly titled measures used by
other companies. In addition, the forward-looking non-GAAP
financial measure of Adjusted EBITDA provided herein have not been
reconciled to the comparable GAAP measure due to the inherent
difficulty in forecasting and quantifying certain amounts that are
necessary for such reconciliations. We have reconciled the
historical non-GAAP financial measures presented herein to their
most directly comparable GAAP financial measures. A reconciliation
of our forward-looking non-GAAP financial measures to their most
directly comparable GAAP financial measures cannot be provided
without unreasonable effort because of the inherent difficulty of
accurately forecasting the occurrence and financial impact of the
adjusting items necessary for such reconciliations that have not
yet occurred, are out of our control, or cannot be reasonably
predicted. For the same reasons, we are unable to address the
probable significance of the unavailable information, which could
be material to future results.
Reconciliation of GAAP Net Loss to Adjusted EBITDA
Three Months Ended
Six Months Ended
June 30,
June 30,
($ in thousands)
2023
2022
2023
2022
Net loss
$
(1,765
)
$
(658,739
)
$
(5,573
)
$
(1,829,551
)
Income tax expense / (benefit)
6,545
(16,618
)
10,424
(60,032
)
Interest expense, net
36,762
28,426
74,218
54,382
Depreciation and amortization
66,425
69,585
129,972
133,008
Share-based compensation expense
10,907
17,736
18,123
31,706
Impairment expense on goodwill and
intangible assets
193
676,456
275
1,882,187
Restructuring and other costs
1,340
41,602
3,330
54,193
Loss on disposal of subsidiaries and other
assets, net
—
660
—
660
Other income, net
(7,376
)
(56,155
)
(9,923
)
(59,633
)
Adjusted EBITDA
$
113,031
$
102,953
$
220,846
$
206,920
Adjusted EBITDA Margin
28.1
%
27.2
%
27.9
%
27.7
%
Reconciliation of Operating Cash Flow to Non-GAAP Free Cash
Flow
Three Months Ended
Six Months Ended
June 30,
June 30,
($ in thousands)
2023
2022
2023
2022
Net cash (outflows) / inflows from
operating activities
$
(233,924
)
$
875,599
$
(352,885
)
$
1,379,447
Capital Expenditure
(25,458
)
(24,092
)
(55,826
)
(44,731
)
Cash paid for interest
45,991
29,856
74,884
44,610
Payments relating to Restructuring and
other costs
5,481
7,995
29,165
20,136
Movement in Customer Accounts and other
restricted cash
302,647
(849,697
)
469,674
(1,300,579
)
Free Cash Flow
$
94,737
$
39,661
$
165,012
$
98,883
Adjusted EBITDA
113,031
102,953
220,846
206,920
Free Cash Flow Conversion
84
%
39
%
75
%
48
%
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
(excluding depreciation and amortization)
Three Months Ended
Six Months Ended
June 30,
June 30,
($ in thousands)
2023
2022
2023
2022
Revenue
$
402,338
$
378,913
$
790,187
$
746,581
Cost of services (excluding depreciation
and amortization)
166,614
158,987
325,553
306,090
Depreciation and amortization
66,425
69,585
129,972
133,008
Gross Profit (1)
$
169,299
$
150,341
$
334,662
$
307,483
Depreciation and amortization
66,425
69,585
129,972
133,008
Gross Profit (excluding depreciation
and amortization)
$
235,724
$
219,926
$
464,634
$
440,491
1.
Gross Profit has been calculated as
revenue, less cost of services and depreciation and amortization.
Gross profit is not presented within the Company's consolidated
financial statements.
Reconciliation of GAAP Net Loss to Adjusted Net
Income
Three Months Ended
Six Months Ended
June 30,
June 30,
($ in thousands)
2023
2022
2023
2022
Net loss attributable to the
Company
$
(1,765
)
$
(658,739
)
$
(5,573
)
$
(1,829,922
)
Other non-operating income, net (1)
(4,814
)
(58,611
)
(5,578
)
(64,019
)
Impairment expense on goodwill and
intangible assets
193
676,456
275
1,882,187
Amortization of acquired assets (2)
34,095
43,283
67,768
85,549
Restructuring and other costs
1,340
41,602
3,330
54,193
Loss on disposal of subsidiaries and other
assets, net
—
660
—
660
Share-based compensation expense
10,907
17,736
18,123
31,706
Discrete tax items (3)
5,406
13,601
10,885
6,976
Income tax benefit on non-GAAP adjustments
(4)
(10,684
)
(38,447
)
(21,476
)
(92,528
)
Adjusted net income attributable to the
Company
$
34,678
$
37,541
$
67,754
$
74,802
(in millions)
Weighted average shares -
diluted
61.5
60.5
61.2
60.4
Adjusted diluted impact
0.1
0.1
0.3
0.2
Adjusted weighted average shares -
diluted
61.6
60.6
61.5
60.6
1.
Other non-operating income, net primarily
consists of income and expenses outside of the Company's operating
activities, including, fair value gain / loss on warrant
liabilities and loss on contingent consideration and gain / loss on
foreign exchange. For the three and six months ended June 30, 2023,
this item also includes the gain to repurchase secured notes and
fair value loss on derivative instruments.
2.
Amortization of acquired asset represents
amortization expense on the fair value of intangible assets
acquired through various Company acquisitions, including brands,
customer relationships, software and merchant portfolios.
3.
Discrete tax items represents certain
amounts within income tax (benefit)/expense, including changes in
uncertain tax positions and the remeasurement of certain deferred
tax balances due to changes in the statutory tax rates in certain
jurisdictions.
4.
Income tax benefit on non-GAAP adjustments
reflects the tax impact of the non-GAAP adjustments to net loss
attributable to the Company to calculate adjusted net income.
Adjusted Net Income per Share
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Numerator ($ in thousands)
Adjusted net income attributable to the
Company - basic
$
34,678
$
37,541
$
67,754
$
74,802
Adjusted net income attributable to the
Company - diluted
$
34,678
$
37,541
$
67,754
$
74,802
Denominator (in millions)
Weighted average shares – basic
61.5
60.5
61.2
60.4
Adjusted weighted average shares – diluted
(1)
61.6
60.6
61.5
60.6
Adjusted net income per share attributable
to the Company
Basic
$
0.56
$
0.62
$
1.11
$
1.24
Diluted
$
0.56
$
0.62
$
1.10
$
1.23
1.
The denominator used in the calculation of
diluted adjusted net income per share attributable to the Company
for the three and six months ended June 30, 2023 and 2022 has been
adjusted to include the dilutive effect of the Company's restricted
stock units.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230815251305/en/
Media Kate Aldridge Paysafe kate.aldridge@paysafe.com +44 750
079 7547
Investors Kirsten Nielsen Paysafe +1 (646) 901-3140
kirsten.nielsen@paysafe.com
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