Paysafe Limited (“Paysafe” or the “Company”) (NYSE: PSFE), a
leading payments platform, today announced its financial results
for the third quarter of 2024.
Third Quarter 2024 Financial Highlights (Metrics compared
to third quarter of 2023, unless otherwise noted)
- Revenue of $427.1 million, increased 8%; increased 7% on a
constant currency basis
- Total Payment Volume of $37.5 billion, increased 7%
- Net loss of $13.0 million, or ($0.21) per diluted share,
compared to net loss of $2.5 million, or ($0.04) per diluted
share
- Adjusted net income of $31.4 million, or $0.51 per diluted
share, compared to $35.3 million, or $0.57 per diluted share
- Adjusted EBITDA of $117.8 million, increased 1%; increased 1%
on a constant currency basis
- Net leverage1 decreased to 4.7x as of September 30, 2024,
compared to 5.0x as of December 31, 2023
Bruce Lowthers, CEO of Paysafe, commented: “I am happy to report
on behalf of our team another healthy quarter for Paysafe. Revenue
growth continues to be strong this year, reaching 8% for the third
quarter and year-to-date, demonstrating execution on our strategic
priorities and our focus on delivering higher quality, sustainable
revenue growth, while investing in the business and progressively
reducing net leverage. We are pleased to reaffirm our full year
financial outlook for 2024 and we remain confident that we are
taking the right actions to drive continued momentum in 2025 and
beyond.”
Full Year 2024 Financial Guidance
($ in millions) (unaudited)
Full Year 2024
Revenue
$1,713 - $1,729
Adjusted EBITDA
$471 - $484
Recent Strategic and Operational Highlights
- Welcomed John Crawford as our new Chief Financial Officer who
brings more than 25 years of financial leadership experience with a
strong background in the payments industry
- 2024 initiatives remain on track or ahead of schedule; welcomed
170 new hires to Paysafe's sales team year-to-date, expanding
Paysafe's go-to-market capabilities
- Paysafe's eCommerce channel continues to grow double-digits
driven by strong demand within our iGaming vertical in North
America
- Launched a partnership with Revolut to offer cash deposits for
Revolut's UK customers with plans to expand to other markets in
EEA
(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
September 30, 2024, total debt was $2,431.4 million and cash and
cash equivalents was $241.4 million, and LTM Adjusted EBITDA was
$470.5 million. For the period ended December 31, 2023, total debt
was $2,501.8 million and cash and cash equivalents was $202.3
million, and LTM Adjusted EBITDA was $458.7 million.
Third Quarter of 2024 Summary of Consolidated Results
Three Months Ended
Nine Months Ended
September 30,
September 30,
($ in thousands) (unaudited)
2024
2023
2024
2023
Revenue
$
427,103
$
396,410
$
1,284,765
$
1,186,597
Gross Profit (excluding depreciation and
amortization)
$
249,004
$
232,333
$
752,468
$
696,967
Net loss
$
(12,977
)
$
(2,549
)
$
(11,351
)
$
(8,122
)
Adjusted EBITDA
$
117,787
$
116,076
$
348,709
$
336,922
Adjusted net income
$
31,372
$
35,272
$
102,957
$
103,026
Total revenue for the third quarter of 2024 was $427.1 million,
an increase of 8%, compared to $396.4 million in the prior year
period, reflecting 7% growth in total payment volume. Excluding a
$1.4 million favorable impact from changes in foreign exchange
rates, total revenue increased 7%. Revenue from the Merchant
Solutions segment increased 11%, reflecting double-digit growth in
e-commerce as well as growth from small and medium-sized businesses
("SMBs") driven by initiatives to expand our sales capabilities and
optimize the portfolio. Revenue from the Digital Wallets segment
increased 4% both as reported and in constant currency, supported
by ongoing initiatives related to product and consumer engagement
as well as growth from merchants onboarded in 2023.
Net loss for the third quarter increased to $13.0 million,
compared to $2.5 million in the prior year period, largely
reflecting an increase in other expenses due to a loss on foreign
exchange.
Adjusted net income for the third quarter decreased 11% to $31.4
million, compared to $35.3 million in the prior year period,
reflecting an increase in depreciation and amortization expense as
well as an increase in the adjusted effective tax rate.
Adjusted EBITDA for the third quarter was $117.8 million, an
increase of 1%, compared to $116.1 million in the prior year
period, primarily reflecting revenue growth, partially offset by
incremental expenses related to previously announced initiatives to
expand the sales team and optimize the portfolio.
Third quarter operating cash flow was $81.9 million, compared to
$102.2 million in the prior year period, which was mainly driven by
movements in working capital. Unlevered free cash flow was $89.9
million, compared to $110.3 million in the prior year period.
Balance Sheet
As of September 30, 2024, total cash and cash equivalents were
$241.4 million, total debt was $2.4 billion and net debt was $2.2
billion. Compared to December 31, 2023, total debt decreased by
$70.4 million, reflecting net repayments of $72.5 million as well
as movement in foreign exchange rates.
Summary of Segment Results
Three Months Ended
Nine Months Ended
September 30,
YoY
September 30,
YoY
($ in thousands) (unaudited)
2024
2023
change
2024
2023
change
Revenue:
Merchant Solutions
$
241,142
$
216,847
11
%
$
727,518
$
651,066
12
%
Digital Wallets
$
190,930
$
182,855
4
%
$
571,060
$
543,382
5
%
Intersegment
$
(4,969
)
$
(3,292
)
51
%
$
(13,813
)
$
(7,851
)
76
%
Total Revenue
$
427,103
$
396,410
8
%
$
1,284,765
$
1,186,597
8
%
Adjusted EBITDA:
Merchant Solutions
$
52,646
$
57,467
-8
%
$
158,335
$
165,572
-4
%
Digital Wallets
$
84,119
$
79,930
5
%
$
249,806
$
236,350
6
%
Corporate
$
(18,978
)
$
(21,321
)
11
%
$
(59,432
)
$
(65,000
)
9
%
Total Adjusted EBITDA
$
117,787
$
116,076
1
%
$
348,709
$
336,922
3
%
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
Wednesday, November 13 2024, at 8:30 a.m.
ET
Webcast
Go to the Investor Relations section of
the Paysafe website to listen and view slides
Dial in
877-407-0752 (U.S. toll-free);
201-389-0912 (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 25 years of online payment experience, an annualized
transactional volume of $140 billion in 2023, and approximately
3,200 employees located in 12+ countries, Paysafe connects
businesses and consumers across 260 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 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 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
Statements of Operations (unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
($ in thousands)
2024
2023
2024
2023
Revenue
$
427,103
$
396,410
$
1,284,765
$
1,186,597
Cost of services (excluding depreciation
and amortization)
178,099
164,077
532,297
489,630
Selling, general and administrative
143,907
121,195
438,774
383,106
Depreciation and amortization
70,088
67,074
207,028
197,046
Impairment expense on goodwill and
intangible assets
119
—
795
275
Restructuring and other costs
340
835
1,520
4,165
Loss on disposal of subsidiary and other
assets, net
187
—
508
—
Operating income
34,363
43,229
103,843
112,375
Other (expense) / income, net
(14,742
)
9,661
2,010
19,584
Interest expense, net
(35,546
)
(38,421
)
(107,646
)
(112,639
)
(Loss) / income before taxes
(15,925
)
14,469
(1,793
)
19,320
Income tax (benefit) / expense
(2,948
)
17,018
9,558
27,442
Net loss
$
(12,977
)
$
(2,549
)
$
(11,351
)
$
(8,122
)
Net loss per share – basic
$
(0.21
)
$
(0.04
)
$
(0.19
)
$
(0.13
)
Net loss per share – diluted
$
(0.21
)
$
(0.04
)
$
(0.19
)
$
(0.13
)
Net loss
$
(12,977
)
$
(2,549
)
$
(11,351
)
$
(8,122
)
Other comprehensive (loss) / income, net
of tax of $0:
Gain / (loss) on foreign currency
translation
18,108
(8,853
)
4,441
1,525
Total comprehensive income /
(loss)
$
5,131
$
(11,402
)
$
(6,910
)
$
(6,597
)
Paysafe Limited Consolidated Net Loss per
share
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Numerator ($ in thousands)
Net loss - basic
$
(12,977
)
$
(2,549
)
$
(11,351
)
$
(8,122
)
Net loss - diluted
$
(12,977
)
$
(2,549
)
$
(11,351
)
$
(8,122
)
Denominator (in millions)
Weighted average shares – basic
60.7
61.6
61.0
61.3
Weighted average shares – diluted
60.7
61.6
61.0
61.3
Net loss per share
Basic
$
(0.21
)
$
(0.04
)
$
(0.19
)
$
(0.13
)
Diluted
$
(0.21
)
$
(0.04
)
$
(0.19
)
$
(0.13
)
Paysafe Limited Condensed Consolidated
Balance Sheets (unaudited)
($ in thousands)
September 30, 2024
December 31, 2023
Assets
Current assets
Cash and cash equivalents
$
241,381
$
202,322
Customer accounts and other restricted
cash
1,052,698
1,295,947
Accounts receivable, net of allowance for
credit losses of $6,673 and $5,240, respectively
180,298
162,081
Settlement receivables, net of allowance
for credit losses of $4,661 and $5,197, respectively
157,828
171,224
Prepaid expenses and other current
assets
65,971
74,919
Total current assets
1,698,176
1,906,493
Deferred tax assets
77,273
77,273
Property, plant and equipment, net
22,567
17,213
Operating lease right-of-use assets
38,251
22,120
Derivative financial assets
4,794
10,427
Intangible assets, net
1,038,937
1,163,935
Goodwill
2,029,948
2,023,402
Other assets – non-current
11,900
6,838
Total non-current assets
3,223,670
3,321,208
Total assets
$
4,921,846
$
5,227,701
Liabilities and equity
Current liabilities
Accounts payable and other liabilities
$
205,386
$
202,699
Short-term debt
10,190
10,190
Funds payable and amounts due to
customers
1,252,369
1,477,017
Operating lease liabilities – current
7,592
8,233
Contingent consideration payable –
current
9,884
11,828
Liability for share-based compensation –
current
6,494
2,701
Total current liabilities
1,491,915
1,712,668
Non-current debt
2,421,228
2,491,643
Operating lease liabilities –
non-current
34,725
16,963
Deferred tax liabilities
92,590
111,705
Warrant liabilities
1,342
1,423
Derivative financial liabilities –
non-current
377
—
Liability for share-based compensation –
non-current
2,320
3,108
Contingent consideration payable –
non-current
325
6,878
Total non-current liabilities
2,552,907
2,631,720
Total liabilities
4,044,822
4,344,388
Commitments and contingent liabilities
Total shareholders' equity
877,024
883,313
Total liabilities and shareholders'
equity
$
4,921,846
$
5,227,701
Paysafe Limited Condensed Consolidated
Statements of Cash Flow (unaudited)
Nine Months Ended
September 30,
($ in thousands)
2024
2023 (1)
Cash flows from operating
activities
Net loss
$
(11,351
)
$
(8,122
)
Adjustments for non-cash items:
Depreciation and amortization
208,006
197,046
Unrealized foreign exchange loss
7,139
4,907
Deferred tax (benefit) / expense
(17,751
)
17,453
Interest expense, net
(1,662
)
5,392
Share-based compensation
35,015
23,061
Other income, net
(6,939
)
(19,828
)
Impairment expense on goodwill and
intangible assets
795
275
Allowance for credit losses and other
28,841
13,857
Loss on disposal of subsidiary and other
assets, net
508
—
Non-cash lease expense
6,718
6,686
Movements in working capital:
Accounts receivable, net
(42,214
)
(15,857
)
Prepaid expenses and other current
assets
(7,635
)
(1,332
)
Accounts payable and other liabilities
(7,769
)
(26,623
)
Income tax receivable
3,208
(24,485
)
Net cash flows from operating
activities
194,909
172,430
Cash flows in investing
activities
Purchase of property, plant &
equipment
(11,434
)
(12,129
)
Purchase of merchant portfolios
(7,224
)
(26,749
)
Other intangible asset expenditures
(68,409
)
(69,393
)
Cash inflow / (outflow) from merchant
reserves
6,510
(24,400
)
Receipts under derivative financial
instruments
7,234
7,520
Other investing activities, net
1,958
(410
)
Net cash flows used in investing
activities
(71,365
)
(125,561
)
Cash flows from financing
activities
Cash settled equity awards
—
(484
)
Proceeds from exercise of warrants
—
5
Repurchases of shares withheld for
taxes
(6,641
)
(7,857
)
Proceeds from employee share purchase
plan
159
—
Purchase of treasury shares
(25,000
)
—
Settlement funds - merchants and
customers, net
(220,123
)
(527,798
)
Repurchase of borrowings
(80,253
)
(124,344
)
Proceeds from loans and borrowings
159,291
90,138
Repayments of loans and borrowings
(124,916
)
(68,592
)
Payment of debt issuance costs
(491
)
—
Proceeds under line of credit
650,000
675,000
Repayments under line of credit
(675,000
)
(675,000
)
Contingent consideration paid
(8,949
)
(9,210
)
Net cash flows used in financing
activities
(331,923
)
(648,142
)
Effect of foreign exchange rate
changes
4,189
(7,809
)
Decrease in cash and cash equivalents,
including customer accounts and other restricted cash during the
period
$
(204,190
)
$
(609,082
)
Cash and cash equivalents, including
customer accounts and other restricted cash at beginning of the
period
1,498,269
2,127,195
Cash and cash equivalents at end of the
period, including customer accounts and other restricted
cash
$
1,294,079
$
1,518,113
Nine Months Ended
September 30,
2024
2023
Cash and cash equivalents
$
241,381
$
226,451
Customer accounts and other restricted
cash
1,052,698
1,291,662
Total cash and cash equivalents,
including customer accounts and other restricted cash
$
1,294,079
$
1,518,113
(1)
During the fourth quarter of 2023, the
Company elected to change its presentation of the cash flows
associated with "Settlement receivables, net" and "Funds payable
and amounts due to customers" from operating activities, to present
them as financing activities within its Consolidated Statements of
Cash Flows. Comparative amounts have been recast to conform to
current period presentation. These recasts had no impact on the
Consolidated Statements of Comprehensive Loss, Consolidated
Statements of Financial Position or Consolidated Statements of
Shareholders' Equity.
Non-GAAP Financial Measures
To supplement the Company’s condensed consolidated financial
statements presented in accordance with generally accepted
accounting principles, or GAAP, the company uses non-GAAP measures
of certain components of financial performance. This includes Gross
Profit (excluding depreciation and amortization), Adjusted EBITDA,
Unlevered free cash flow, Adjusted net income, Adjusted net income
per share, and Net leverage which are supplemental measures that
are not required by, or presented in accordance with, accounting
principles generally accepted in the United States (“U.S.
GAAP”).
Gross Profit (excluding depreciation and amortization) is
defined as revenue less cost of services (excluding depreciation
and amortization). Management believes Gross Profit to be a useful
profitability measure to assess the performance of our businesses
and ability to manage cost.
Adjusted EBITDA is defined as net income/(loss) before the
impact of income tax (benefit)/expense, interest expense, net,
depreciation and amortization, share-based compensation, impairment
expense on goodwill and intangible assets, restructuring and other
costs, loss/(gain) on disposal of a subsidiaries and other assets,
net, and other income/(expense), net. These adjustments also
include certain costs and transaction items that are not reflective
of the underlying operating performance of the Company. Management
believes Adjusted EBITDA to be a useful profitability measure to
assess the performance of our businesses and improves the
comparability of operating results across reporting periods.
Adjusted net income excludes the impact of certain
non-operational and non-cash items. Adjusted net income is defined
as net income/(loss) attributable to the Company before the impact
of other non-operating income / (expense), net, impairment expense
on goodwill and intangible assets, restructuring and other costs,
accelerated amortization of debt fees, amortization of acquired
assets, loss/(gain) on disposal of subsidiaries and other assets,
share-based compensation, discrete tax items and the income tax
(benefit)/expense on these non-GAAP adjustments. Adjusted net
income per share is adjusted net income as defined above divided by
adjusted weighted average dilutive shares outstanding. Management
believes the removal of certain non-operational and non-cash items
from net income enhances shareholders' ability to evaluate the
Company’s business performance and profitability by improving
comparability of operating results across reporting periods.
Unlevered free cash flow is defined as net cash flows provided
by/used in operating activities, adjusted for the impact of capital
expenditure, payments relating to restructuring and other costs and
cash paid for interest. Capital expenditure includes purchases of
property plant & equipment and purchases of other intangible
assets, including software development costs. Capital expenditure
does not include purchases of merchant portfolios. Management
believes unlevered free cash flow to be a liquidity measure that
provides useful information about the amount of cash generated by
the business.
Net leverage is defined as net debt (gross debt less cash and
cash equivalents) divided by the last twelve months Adjusted
EBITDA. Management believes net leverage is a useful measure of the
Company's credit position and progress towards leverage
targets.
Management believes the presentation of these non-GAAP financial
measures, including Gross Profit, Adjusted EBITDA, Unlevered free
cash flow, Adjusted net income, Adjusted net income per share, and
Net leverage when considered together with the Company’s results
presented in accordance with GAAP, provide users with useful
supplemental information in comparing the operating results across
reporting periods by excluding items that are not considered
indicative of Paysafe’s core operating performance. In addition,
management believes the presentation of these non-GAAP financial
measures provides useful supplemental information in assessing the
Company’s results on a basis that fosters comparability across
periods by excluding the impact on the Company’s reported GAAP
results of acquisitions and dispositions that have occurred in such
periods. However, these non-GAAP measures exclude items that are
significant in understanding and assessing Paysafe’s financial
results or position. Therefore, these measures should not be
considered in isolation or as alternatives to revenue, net income,
cash flows from operations or other measures of profitability,
liquidity or performance under GAAP.
You should be aware that Paysafe’s presentation of these
measures may not be comparable to similarly titled measures used by
other companies. In addition, the forward-looking non-GAAP
financial measure of Adjusted EBITDA provided herein have not been
reconciled to the comparable GAAP measure due to the inherent
difficulty in forecasting and quantifying certain amounts that are
necessary for such reconciliations. We have reconciled the
historical non-GAAP financial measures presented herein to their
most directly comparable GAAP financial measures. A reconciliation
of our forward-looking non-GAAP financial measures to their most
directly comparable GAAP financial measures cannot be provided
without unreasonable effort because of the inherent difficulty of
accurately forecasting the occurrence and financial impact of the
adjusting items necessary for such reconciliations that have not
yet occurred, are out of our control, or cannot be reasonably
predicted. For the same reasons, we are unable to address the
probable significance of the unavailable information, which could
be material to future results.
Reconciliation of GAAP Net Loss to Adjusted EBITDA
Three Months Ended
Nine Months Ended
September 30,
September 30,
($ in thousands)
2024
2023
2024
2023
Net loss
$
(12,977
)
$
(2,549
)
$
(11,351
)
$
(8,122
)
Income tax (benefit) / expense
(2,948
)
17,018
9,558
27,442
Interest expense, net
35,546
38,421
107,646
112,639
Depreciation and amortization
70,088
67,074
207,028
197,046
Share-based compensation expense
12,690
4,938
35,015
23,061
Impairment expense on goodwill and
intangible assets
119
—
795
275
Restructuring and other costs
340
835
1,520
4,165
Loss on disposal of subsidiaries and other
assets, net
187
—
508
—
Other expense / (income), net
14,742
(9,661
)
(2,010
)
(19,584
)
Adjusted EBITDA
$
117,787
$
116,076
$
348,709
$
336,922
Reconciliation of Operating Cash Flow to Non-GAAP Unlevered
Free Cash Flow
Three Months Ended
Nine Months Ended
September 30,
September 30,
($ in thousands)
2024
2023 (1)
2024
2023 (1)
Net cash inflows from operating
activities
$
81,934
$
102,216
$
194,909
$
172,430
Capital expenditure
(24,950
)
(25,696
)
(79,843
)
(81,522
)
Cash paid for interest
32,246
32,363
109,308
107,247
Payments relating to Restructuring and
other costs
655
1,397
4,706
30,562
Unlevered Free Cash Flow
$
89,885
$
110,280
$
229,080
$
228,717
Adjusted EBITDA
117,787
116,076
348,709
336,922
(1)
During the fourth quarter of 2023, the
Company elected to change its presentation of "Settlement
receivables, net" and "Funds payable and amounts due to customers"
from operating activities to present them as financing activities
within its Consolidated Statements of Cash Flows. As a result, the
reconciling item related to "Movements in customer accounts and
other restricted cash" is no longer required in the unlevered free
cash flow reconciliation. Comparative amounts have been recast to
conform to current period presentation.
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
(excluding depreciation and amortization)
Three Months Ended
Nine Months Ended
September 30,
September 30,
($ in thousands)
2024
2023
2024
2023
Revenue
$
427,103
$
396,410
$
1,284,765
$
1,186,597
Cost of services (excluding depreciation
and amortization)
178,099
164,077
532,297
489,630
Depreciation and amortization
70,088
67,074
207,028
197,046
Gross Profit (1)
$
178,916
$
165,259
$
545,440
$
499,921
Depreciation and amortization
70,088
67,074
207,028
197,046
Gross Profit (excluding depreciation
and amortization)
$
249,004
$
232,333
$
752,468
$
696,967
(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
Nine Months Ended
September 30,
September 30,
($ in thousands)
2024
2023
2024
2023
Net loss
$
(12,977
)
$
(2,549
)
$
(11,351
)
$
(8,122
)
Other non operating expense / (income),
net (1)
17,062
(7,274
)
5,424
(12,852
)
Impairment expense on goodwill and
intangible assets
119
—
795
275
Amortization of acquired assets (2)
33,721
34,094
100,851
101,862
Restructuring and other costs
340
835
1,520
4,165
Loss on disposal of subsidiaries and other
assets, net
187
—
508
—
Share-based compensation expense
12,690
4,938
35,015
23,061
Discrete tax items (3)
(2,046
)
14,313
8,027
25,198
Income tax expense on non-GAAP adjustments
(4)
(17,724
)
(9,085
)
(37,832
)
(30,561
)
Adjusted net income
$
31,372
$
35,272
$
102,957
$
103,026
(in millions)
Weighted average shares -
diluted
60.7
61.6
61.0
61.3
Adjusted diluted impact
1.3
0.1
0.8
0.3
Adjusted weighted average shares -
diluted
62.0
61.7
61.8
61.6
(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 / (expense) recorded on deferred tax
assets representing a benefit of $(766) and an expense of $10,780
for the three months ended September 30, 2024 and 2023,
respectively, and expenses of $8,540 and $15,533 for the nine
months ended September 30, 2024 and 2023, respectively (b)
measurement period adjustments which were $0 and $3,117 for the
three months ended September 30, 2024 and 2023, respectively, and
($382) and $4,199 for the nine months ended September 30, 2024 and
2023, 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 $55
and $236 for the three months ended September 30, 2024 and 2023,
respectively, and $2,527 and $3,977 for the nine months ended
September 30, 2024 and 2023, respectively. The remaining discrete
tax items mainly relate to the movement in uncertain tax provisions
relating to prior years.
(4)
Income tax expense on non-GAAP adjustments
reflects the tax expense on each taxable adjustment using the
current statutory tax rate of the applicable jurisdiction specific
to that adjustment.
Adjusted Net Income per Share
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Numerator ($ in thousands)
Adjusted net income - basic
$
31,372
$
35,272
$
102,957
$
103,026
Adjusted net income - diluted
$
31,372
$
35,272
$
102,957
$
103,026
Denominator (in millions)
Weighted average shares – basic
60.7
61.6
61.0
61.3
Adjusted weighted average shares – diluted
(1)
62.0
61.7
61.8
61.6
Adjusted net income per share
Basic
$
0.52
$
0.57
$
1.69
$
1.68
Diluted
$
0.51
$
0.57
$
1.67
$
1.67
(1)
The denominator used in the calculation of
diluted adjusted net income per share for the three and nine months
ended September 30, 2024 and 2023 includes the dilutive effect of
the Company's restricted stock units.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241112141747/en/
Media Crystal Wright Paysafe +1 (904) 328-7740
crystal.wright@paysafe.com
Investors Kirsten Nielsen Paysafe +1 (646) 901-3140
kirsten.nielsen@paysafe.com
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