Nuvei Corporation (“Nuvei” or the “Company”) (Nasdaq: NVEI) (TSX:
NVEI), the Canadian fintech company, announces today that it has
completed its acquisition of Paya Holdings Inc. (“Paya”) (Nasdaq:
PAYA). Paya amplifies Nuvei’s existing growth strategy and expands
its reach into new underpenetrated and non-cyclical verticals where
Nuvei’s proprietary technology is well positioned to accelerate
customer growth.
Paya is a leading U.S. provider of integrated
payment and frictionless commerce solutions that processed $50
billion in annual payment volume last year, mainly in high growth
verticals such as healthcare, non-profit, government, utilities,
and other business-to-business (“B2B”) end markets. Nuvei and Paya
are highly complementary with respect to geographies, capabilities
to offer to customers and partners, and the end-markets and
verticals that each currently serve.
Nuvei Chair and CEO Philip Fayer commented,
“This is an important milestone for Nuvei as we continue to build a
preeminent payment technology provider with strong positions in
global eCommerce, Integrated Payments and B2B. I’m thrilled to
officially welcome our new colleagues from Paya to the Nuvei
family. We have been working diligently on our integration
planning, and we are ready to begin the next step on this exciting
journey as a single, unified team.”
Paya Reports Results for the Full Year
2022 At the High End of its Outlook Range
On February 21, 2023, Paya filed, with the
Securities and Exchange Commission, its Annual Report on Form 10-K
for the year ended December 31, 2022. Calculated results for the
three months and reported results for the year ended December 31,
2022 are summarized here.
|
Year endedDecember 31, 2022 |
Nine months endedSeptember 30, 2022 |
Calculated three months endedDecember 31,
2022 |
(in
U.S. dollars) |
$ |
$ |
$ |
Payment volume* (in billions) |
49.5 |
36.6 |
13.0 |
Revenue (in millions) |
282.7 |
209.9 |
72.8 |
Adjusted EBITDA** (in
millions) |
74.1 |
54.2 |
19.9 |
Net
income (in millions) |
8.3 |
5.2 |
3.1 |
* Payment volume is defined by Paya as the total
dollar amount of all payments processed by its customers through
its services. This measure is not recognized under U.S. GAAP and
does not have a standardized meaning prescribed by U.S. GAAP and
therefore may not be comparable to similar measures presented by
other companies. See “Non-IFRS, Non-U.S. GAAP and Other Financial
Measures.”
** Adjusted EBITDA for Paya represents earnings
before interest and other expense, income taxes, depreciation, and
amortization, or EBITDA, and further adjustments to EBITDA to
exclude certain non-cash items and other non-recurring items that
Paya management believes are not indicative of ongoing operations
to come to Adjusted EBITDA. This measure is not recognized under
U.S. GAAP and does not have a standardized meaning prescribed by
U.S. GAAP and therefore may not be comparable to similar measures
presented by other companies. See “Non-IFRS, Non-U.S. GAAP and
Other Financial Measures.”
Nuvei Anticipated Results for Fourth
Quarter and Fiscal Year 2022
As Nuvei finalizes its normal closing procedures
for the fourth quarter and fiscal year ended December 31, 2022, the
Company anticipates Total volume1, revenue and Adjusted EBITDA1 to
be in line with its latest outlook range included in its third
quarter 2022 earnings release. The foregoing is based on
information available to the Company as of the date of this
release. See “Anticipated Results
Information.”________________________1 Adjusted EBITDA and Total
volume are non-IFRS financial measures and supplementary financial
measures, respectively. These measures are not recognized measures
under IFRS and do not have standardized meanings prescribed by IFRS
and therefore may not be comparable to similar measures presented
by other companies. See “Non-IFRS, Non-U.S. GAAP and Other
Financial Measures.”
Nuvei to Announce Fourth Quarter and
Fiscal Year 2022 Results on March 8, 2023
Nuvei will release its fourth quarter and fiscal
year 2022 financial results before market open on Wednesday, March
8, 2023. Management will host a conference call and webcast to
discuss these results and outlook at 8:30 am ET that same day.
Hosting the call will be Philip Fayer, Chair and CEO, and David
Schwartz, CFO.
The conference call will be webcast live from
the Company’s investor relations website at
https://investors.nuvei.com under the “Events & Presentations”
section. A replay will be available on the investor relations
website following the call.
The conference call can also be accessed live
over the phone by dialing 877-425-9470 (US/Canada toll-free), or
201-389-0878 (international). A replay will be available
approximately one hour after the conclusion of the call and can be
accessed by dialing 844-512-2921 (US/Canada toll-free), or
412-317-6671 (international); the conference ID is 13735177. The
audio replay will be available through Wednesday, March 22,
2023.
Presentation of Financial
Information
All dollar amounts set forth in this press
release are in United States dollars.
Paya’s financial information for the calculated
three months ended December 31, 2022 presented herein has been
derived by subtracting Paya's unaudited interim consolidated
financial information from its Quarterly Report on Form 10-Q for
the nine months ended September 30, 2022 from its audited
consolidated financial information from its Annual Report on Form
10-K for the year ended December 31, 2022.
Nuvei’s financial statements are prepared in
accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board (“IFRS”).
Paya’s financial statements are prepared in accordance with
accounting principles generally accepted in the United States
("U.S. GAAP"), and any financial information of Paya included in
this press release has been derived from Paya’s annual or interim
financial statements prepared in accordance with U.S. GAAP and has
been prepared using accounting policies that are consistent with
U.S. GAAP. IFRS differs in certain material respects from U.S.
GAAP. The financial information of Paya presented in this press
release has not been adjusted to give effect to the differences
between U.S. GAAP and IFRS or to accounting policies that comply
with IFRS and as applied by Nuvei, nor has such financial
information been conformed from accounting principles under U.S.
GAAP to IFRS as issued by the IASB, and thus may not be directly
comparable to Nuvei’s financial information prepared in accordance
with IFRS.
Non-IFRS, Non-U.S. GAAP and Other
Financial Measures
The information presented in this press release
includes non-IFRS financial measures, and supplementary financial
measures, of Nuvei, namely Nuvei Adjusted EBITDA and Nuvei Total
volume. These measures are not recognized measures under IFRS and
do not have standardized meanings prescribed by IFRS and therefore
may not be comparable to similar measures presented by other
companies, including Paya’s. Rather, these measures are provided as
additional information to complement IFRS measures by providing
further understanding of our results of operations from our
perspective. Accordingly, these measures should not be considered
in isolation nor as a substitute for analysis of the Company’s
financial statements reported under IFRS. These measures are used
to provide investors with additional insight of Nuvei’s operating
performance and thus highlight trends in Nuvei’s core business that
may not otherwise be apparent when relying solely on IFRS measures.
Nuvei also believes that securities analysts, investors and other
interested parties frequently use these non-IFRS and other
financial measures in the evaluation of issuers. Nuvei also uses
these measures in order to facilitate operating performance
comparisons from period to period, to prepare annual operating
budgets and forecasts and to determine components of management
compensation. Nuvei believes these measures are important
additional measures of its performance, primarily because they and
similar measures are used widely among others in the payment
technology industry as a means of evaluating a company’s underlying
operating performance.
The information in this press release also
includes non-U.S. GAAP financial measures, and supplementary
financial measures, of Paya, namely Paya Adjusted EBITDA and Paya
Payment volume. These measures are not recognized measures under
U.S. GAAP and do not have standardized meanings prescribed by U.S.
GAAP and therefore may not be comparable to similar measures
presented by other companies, including Nuvei’s. Rather, these
measures are provided as additional information to complement U.S.
GAAP measures by providing further understanding of Paya’s results
of operations. Accordingly, these measures should not be considered
in isolation nor as a substitute for analysis of Paya’s financial
statements reported under U.S. GAAP. Paya discloses Paya Adjusted
EBITDA because this non-U.S. GAAP measure is a key measure used by
it to evaluate its business, measure its operating performance and
make strategic decisions. Paya believes Paya Adjusted EBITDA is
useful for investors and others in understanding and evaluating its
operations results in the same manner as Paya. However, Paya
Adjusted EBITDA is not a financial measure calculated in accordance
with U.S. GAAP and should not be considered as a substitute for net
income, income before income taxes, or any other operating
performance measure calculated in accordance with U.S. GAAP. Using
this non-U.S. GAAP financial measure to analyze Paya’s business
would have material limitations because the calculations are based
on the subjective determination of management regarding the nature
and classification of events and circumstances that investors may
find significant. In addition, although other companies in its
industry may report measures titled adjusted EBITDA or similar
measures, such non-U.S. GAAP financial measures may be calculated
differently from how Paya calculates non-U.S. GAAP financial
measures, which reduces their overall usefulness as comparative
measures. Because of these limitations, you should consider these
non-U.S. GAAP financial measures alongside other financial
performance measures, including net income and Paya’s other
financial results presented in accordance with U.S. GAAP.
Non-IFRS and Non-U.S. GAAP Financial
Measures
Nuvei Adjusted EBITDA: Nuvei
uses Adjusted EBITDA as a means to evaluate operating performance,
by eliminating the impact of non-operational or non-cash items.
Adjusted EBITDA is defined as net income (loss) before finance
costs (recovery), finance income, depreciation and amortization,
income tax expense, acquisition, integration and severance costs,
share-based payments and related payroll taxes, loss (gain) on
foreign currency exchange, and legal settlement and other.
Paya Adjusted EBITDA:
represents earnings before interest and other expense, income
taxes, depreciation, and amortization, or EBITDA, and further
adjustments to EBITDA to exclude certain non-cash items and other
non-recurring items that management believes are not indicative of
ongoing operations to come to Adjusted EBITDA.
Supplementary Financial
Measures
Nuvei and Paya monitor the following key
performance indicators to help them evaluate their business,
measure their performance, identify trends affecting their
business, formulate business plans and make strategic decisions.
These key performance indicators may be calculated in a manner that
differs from similar key performance indicators used by other
companies.
Nuvei Total volume: Nuvei Total
volume and similar measures are used widely among others in the
payments industry as a means of evaluating a company’s performance.
Nuvei defines Nuvei Total volume as the total dollar value of
transactions processed in the period by customers under contractual
agreement with it. Nuvei Total volume does not represent revenue
earned by Nuvei. Total volume includes acquiring volume, where
Nuvei is in the flow of funds in the settlement transaction cycle,
gateway/technology volume, where it provides its gateway/technology
services but are not in the flow of funds in the settlement
transaction cycle, as well as the total dollar value of
transactions processed relating to APMs and payouts. Since Nuvei’s
revenue is primarily sales volume and transaction-based, generated
from merchants’ daily sales and through various fees for
value-added services provided to its customers, fluctuations in
Nuvei Total volume will generally impact its revenue.
Paya Payment volume: Paya
Payment volume is defined as the total dollar amount of all
payments processed by Paya customers through its
services.
Reconciliation of Paya Net income to
EBITDA and Adjusted EBITDA
|
Year endedDecember 31, 2022 |
Nine months endedSeptember 30, 2022 |
Calculated three months endedDecember 31,
2022 |
(in millions U.S. dollars) |
$ |
$ |
$ |
Net income |
8.3 |
5.2 |
3.1 |
Depreciation &
amortization |
31.8 |
24.1 |
7.7 |
Income tax expense |
5.3 |
3.4 |
1.9 |
Interest and other expense |
11.6 |
8.3 |
3.3 |
EBITDA |
57.0 |
41.0 |
16.0 |
|
|
|
|
Transaction-related
expenses(a) |
4.2 |
3.0 |
1.2 |
Stock-based
compensation(b) |
7.2 |
5.6 |
1.6 |
Restructuring costs(c) |
2.5 |
2.4 |
0.1 |
Discontinued service
costs(d) |
0.4 |
0.3 |
0.1 |
Non-recurring public company
start-up costs |
0.4 |
0.4 |
— |
Contingent non-income tax
liability |
0.5 |
0.1 |
0.4 |
Other
costs(e) |
1.9 |
1.4 |
0.5 |
Total adjustments |
17.1 |
13.2 |
3.9 |
Adjusted EBITDA |
74.1 |
54.2 |
19.9 |
(a) Represents professional service
fees related to mergers and acquisitions such as legal fees,
consulting fees, accounting advisory fees, and other
costs.(b) Represents non-cash charges associated with
stock-based compensation expense, which has been a significant
recurring expense in Paya’s business and an important part of its
compensation strategy.(c) Represents costs associated
with restructuring plans designed to streamline operations and
reduce costs including costs associated with the relocation of
facilities, certain staff restructuring charges including
severance, certain executive hires, and acquisition related
restructuring charges.(d) Represents costs incurred to
retire certain tools, applications and services that are no longer
in use.(e) Represents non-operational gains or losses,
non-standard project expense, and non-operational legal
expense.
Anticipated Results
Information
Nuvei’s anticipated results for the fourth
quarter and fiscal year ended December 31, 2022 are based on
information available to the Company as of the date of this
release. Because the Company’s normal closing procedures for the
fourth quarter and fiscal year ended December 31, 2022 are still
being finalized, its actual financial results may change as a
result of such financial closing procedures, final adjustments,
management’s review of results, and subsequent events, and results
could differ materially from those expressed in or implied by the
Company’s anticipations set forth in this release. During the
course of the preparation of Nuvei’s financial statements and the
notes thereto, additional items that require adjustments may be
identified, and any such adjustments could be material.
Accordingly, you should not place undue reliance on the Company’s
anticipations set forth in this release, which constitute
forward-looking statements. See “Forward-Looking Information.”
Forward-Looking Information
This press release contains “forward-looking
information” and “forward-looking statements” (collectively,
“forward-looking information”) within the meaning of applicable
securities laws, including anticipated results for the fourth
quarter and full year 2022. Forward-looking information is
identified by the use of terms and phrases such as “may”, “would”,
“should”, “could”, “expect”, “intend”, “estimate”, “anticipate”,
“plan”, “foresee”, “believe”, or “continue”, the negative of these
terms and similar terminology, including references to assumptions,
although not all forward-looking information contains these terms
and phrases. Particularly, the expected impact of the acquisition
of Paya from a financial perspective in various financial metrics;
expectations regarding anticipated cost savings and synergies; the
strength, complementarity and compatibility of the Paya business
with Nuvei’s existing business; other anticipated benefits of the
proposed transaction; Nuvei’s business outlook, objectives,
development, plans, growth strategies and other strategic
priorities; Nuvei’s estimated position and strengths in integrated
payments, B2B and global eCommerce; the estimated size of
addressable markets; and statements relating to Nuvei’s future
growth, results of operations, performance, business, prospects and
opportunities, the expected synergies to be realized in connection
with the acquisition of Paya; expectations regarding revenue
synergies, up-selling and cross-selling opportunities and intention
to capture an increasing share of addressable markets, and other
statements that are not historical facts constitute forward-looking
information. Economic and geopolitical uncertainties, including the
Russia and Ukraine conflict, including potential impacts of
sanctions, may also heighten the impact of certain factors
described herein.
In addition, any statements that refer to
expectations, intentions, projections or other characterizations of
future events or circumstances contain forward-looking information.
Statements containing forward-looking information are not
historical facts but instead represent management’s expectations,
estimates and projections regarding future events or circumstances.
Forward-looking information is based on management's beliefs and
assumptions and on information currently available to management,
including, among other things, assumptions about Nuvei’s ability to
retain and attract new business post-closing, achieve synergies and
strengthen its market position arising from successful integration
plans relating to the acquisition of Paya; Nuvei’s ability to
otherwise complete the integration of the Paya business within
anticipated time periods and at expected cost levels; Nuvei’s
ability to attract and retain key employees in connection with the
transaction; management’s estimates and expectations in relation to
future economic and business conditions and other factors in
relation to the transaction and resulting impact on growth in
various financial metrics; assumptions regarding foreign exchange
rate, competition, political environment and economic performance
of each region where Nuvei and Paya operate; the realization of the
expected strategic, financial and other benefits of the transaction
in the timeframe anticipated; and the absence of significant
undisclosed costs or liabilities associated with the
transaction.
Although the forward-looking information
contained herein is based upon what we believe are reasonable
assumptions, investors are cautioned against placing undue reliance
on this information since actual results may vary from the
forward-looking information.
Forward-looking information involves known and
unknown risks and uncertainties, many of which are beyond our
control, that could cause actual results to differ materially from
those that are disclosed in or implied by such forward-looking
information. These risks and uncertainties include, but are not
limited to, actual financial results for the fourth quarter and
fiscal year ended December 31, 2022 may change as a result of the
completion of closing procedures, final adjustments, management’s
review of results and subsequent events; Nuvei’s inability to
successfully integrate the Paya business; legal proceedings
instituted related to the acquisition of Paya and the impact of
significant demands placed on management as a result thereof; the
potential failure to realize anticipated benefits from the
acquisition of Paya; potential undisclosed costs or liabilities
associated with the acquisition, which may be significant; impact
of acquisition-related expenses; the failure to retain Paya’s
personnel and clients following the acquisition and risks
associated with the loss and ongoing replacement of key personnel;
and the risk factors described in greater detail under “Risk
Factors” of the Company’s annual information form filed on March 8,
2022 and Paya’s most recent Annual Report on Form 10-K for the year
ended December 31, 2022. The foregoing list is not exhaustive and
other unknown or unpredictable factors could also have a material
adverse effect on the performance or results of the Company.
Consequently, all of the forward-looking
information contained herein is qualified by the foregoing
cautionary statements, and there can be no guarantee that the
results or developments that we anticipate will be realized or,
even if substantially realized, that they will have the expected
consequences or effects on our business, financial condition or
results of operation. Unless otherwise noted or the context
otherwise indicates, the forward-looking information contained
herein represents our expectations as of the date hereof or as of
the date it is otherwise stated to be made, as applicable, and is
subject to change after such date. However, the Company disclaims
any intention or obligation or undertaking to update or amend such
forward-looking information whether as a result of new information,
future events or otherwise, except as may be required by applicable
law.
About Nuvei
Nuvei (Nasdaq: NVEI) (TSX: NVEI) is the Canadian
fintech company accelerating the business of clients around the
world. Nuvei’s modular, flexible and scalable technology allows
leading companies to accept next-gen payments, offer all payout
options and benefit from card issuing, banking, risk and fraud
management services. Connecting businesses to their customers in
more than 200 markets, with local acquiring in 45+ markets, 150
currencies and more than 600 alternative payment methods, Nuvei
provides the technology and insights for customers and partners to
succeed locally and globally with one integration.
For more information, visit www.nuvei.com
Contact:
Public Relations
Alex HammondAlex.Hammond@nuvei.com
Investor Relations
Chris MammoneIR@nuvei.com
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