Paysafe Limited (“Paysafe” or the “Company”) (NYSE: PSFE), a
leading payments platform, today announced its financial results
for the second quarter of 2024.
Second Quarter 2024 Financial Highlights (Metrics
compared to second quarter of 2023, unless otherwise noted)
- Revenue of $439.9 million, increased 9%; increased 10% on a
constant currency basis
- Total Payment Volume of $38.1 billion, increased 7%
- Net loss of $1.4 million, or ($0.02) per diluted share,
compared to net loss of $1.8 million, or ($0.03) per diluted
share
- Adjusted net income of $36.3 million, or $0.59 per diluted
share, compared to $34.7 million, or $0.56 per diluted share
- Adjusted EBITDA of $119.0 million, increased 5%; increased 6%
on a constant currency basis
- Net leverage1 decreased to 4.8x as of June 30, 2024, compared
to 5.0x as of December 31, 2023
Bruce Lowthers, CEO of Paysafe, commented: “Paysafe’s momentum
continues with higher quality revenue growth accelerating to 9% in
the second quarter, driven by strong performance across all major
product lines and execution on our 2024 strategic initiatives and
investments. These efforts continue to strengthen our foundation
and position us for sustainable long-term success. Given our robust
performance in the first half of the year, we are raising our
revenue guidance for 2024 to a growth range of 7% to 8%, 125 basis
point increase at the mid-point from our original 2024 guidance
mid-point.”
Full Year 2024 Financial Guidance
($ in millions) (unaudited)
Full Year 2024 - prior
Full Year 2024 -
updated
Revenue
$1,688 - $1,712
$1,713 - $1,729
Adjusted EBITDA
$473 - $488
$471 - $484
Recent Strategic and Operational Highlights
- Continue to execute our 2024 new sales hires and portfolio
optimization initiatives with each remaining on track or ahead of
schedule, enhancing Paysafe’s go-to-market capabilities and drive
long-term growth
- Sales team continues to execute on selling more value-add
services in the quarter helping to boost Merchant Solutions' take
rates
- iGaming revenue growth continues to benefit from deals signed
in second half of 2023 and U.S. states that legalized online
gambling in 2023
- Continue to rationalize portfolio to reduce risk and improve
quality of earnings
- Established partnership with Riot Games to provide gamers with
the ability to use paysafecard for a seamless and secure
transactional experience
- Capital returns – repurchased 686,396 shares for $11.0
million
(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
June 30, 2024, total debt was $2,451.4 million and cash and cash
equivalents was $222.4 million, and LTM Adjusted EBITDA was $468.7
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 $458.7 million.
Second Quarter of 2024 Summary of Consolidated
Results
Three Months Ended
Six Months Ended
June 30,
June 30,
($ in thousands) (unaudited)
2024
2023
2024
2023
Revenue
$
439,924
$
402,338
$
857,662
$
790,187
Gross Profit (excluding depreciation and
amortization)
$
256,099
$
235,724
$
503,464
$
464,634
Net (loss) / income
$
(1,430
)
$
(1,765
)
$
1,626
$
(5,573
)
Adjusted EBITDA
$
119,006
$
113,031
$
230,922
$
220,846
Adjusted net income
$
36,279
$
34,678
$
71,585
$
67,754
Total revenue for the second quarter of 2024 was $439.9 million,
an increase of 9%, compared to $402.3 million in the prior year
period, reflecting 7% growth in total payment volume. Excluding a
$2.1 million unfavorable impact from changes in foreign exchange
rates, total revenue increased 10%. Revenue from the Merchant
Solutions segment increased 13%, 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 6% as reported and 7% in constant currency, reflecting
growth from gambling merchants as well as ongoing initiatives
related to product and consumer engagement.
Net loss for the second quarter decreased to $1.4 million,
compared to $1.8 million in the prior year period. This was largely
due to increased operating income, mainly driven by higher
revenues, and decreased tax expense, slightly offset by a reduction
in other income.
Adjusted net income for the second quarter increased 5% to $36.3
million, compared to $34.7 million in the prior year period.
Adjusted EBITDA for the second quarter was $119.0 million, an
increase of 5%, compared to $113.0 million in the prior year
period. Excluding a $0.7 million unfavorable impact from changes in
foreign exchange rates, Adjusted EBITDA increased 6%, primarily
reflecting revenue growth, partially offset by incremental expenses
related to previously announced initiatives to expand the sales
team and optimize the portfolio.
Second quarter operating cash flow was $54.1 million, compared
to $50.2 million in the prior year period, which was mainly driven
by movements in working capital. Unlevered free cash flow was $70.0
million, compared to $76.2 million in the prior year period, driven
by the timing of bonus payments.
Balance Sheet
As of June 30, 2024, total cash and cash equivalents was $222.4
million, total debt was $2.5 billion and net debt was $2.2 billion.
Compared to December 31, 2023, total debt decreased by $50.4
million, reflecting net repayments of $13.3 million as well as
movement in foreign exchange rates.
Summary of Segment Results
Three Months Ended
Six Months Ended
June 30,
YoY
June 30,
YoY
($ in thousands) (unaudited)
2024
2023
change
2024
2023
change
Revenue:
Merchant Solutions
$
254,978
$
225,698
13
%
$
486,376
$
434,219
12
%
Digital Wallets
$
189,673
$
179,079
6
%
$
380,130
$
360,527
5
%
Intersegment
$
(4,727
)
$
(2,439
)
94
%
$
(8,844
)
$
(4,559
)
94
%
Total Revenue
$
439,924
$
402,338
9
%
$
857,662
$
790,187
9
%
Adjusted EBITDA:
Merchant Solutions
$
56,511
$
55,769
1
%
$
105,689
$
108,105
-2
%
Digital Wallets
$
82,413
$
77,211
7
%
$
165,687
$
156,420
6
%
Corporate
$
(19,918
)
$
(19,949
)
0
%
$
(40,454
)
$
(43,679
)
7
%
Total Adjusted EBITDA
$
119,006
$
113,031
5
%
$
230,922
$
220,846
5
%
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 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
Six Months Ended
June 30,
June 30,
($ in thousands)
2024
2023
2024
2023
Revenue
$
439,924
$
402,338
$
857,662
$
790,187
Cost of services (excluding depreciation
and amortization)
183,825
166,614
354,198
325,553
Selling, general and administrative
150,059
133,600
294,867
261,911
Depreciation and amortization
68,630
66,425
136,940
129,972
Impairment expense on goodwill and
intangible assets
23
193
676
275
Restructuring and other costs
728
1,340
1,180
3,330
Loss on disposal of subsidiary and other
assets, net
144
—
321
—
Operating income
36,515
34,166
69,480
69,146
Other income, net
4,397
7,376
16,752
9,923
Interest expense, net
(37,135
)
(36,762
)
(72,100
)
(74,218
)
Income before taxes
3,777
4,780
14,132
4,851
Income tax expense
5,207
6,545
12,506
10,424
Net (loss) / income
$
(1,430
)
$
(1,765
)
$
1,626
$
(5,573
)
Net (loss) / income per share – basic
$
(0.02
)
$
(0.03
)
$
0.03
$
(0.09
)
Net (loss) / income per share –
diluted
$
(0.02
)
$
(0.03
)
$
0.03
$
(0.09
)
Net (loss) / income
$
(1,430
)
$
(1,765
)
$
1,626
$
(5,573
)
Other comprehensive (loss) / income, net
of tax of $0:
(Loss)/gain on foreign currency
translation
(6,055
)
8,204
(13,667
)
10,378
Total comprehensive (loss) /
income
$
(7,485
)
$
6,439
$
(12,041
)
$
4,805
Paysafe Limited Consolidated Net (loss) /
income per share
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Numerator ($ in thousands)
Net (loss) / income - basic
$
(1,430
)
$
(1,765
)
$
1,626
$
(5,573
)
Net (loss) / income - diluted
$
(1,430
)
$
(1,765
)
$
1,626
$
(5,573
)
Denominator (in millions)
Weighted average shares – basic
60.7
61.5
61.2
61.2
Weighted average shares – diluted (1)
60.7
61.5
61.7
61.2
Net (loss) / income per share
Basic
$
(0.02
)
$
(0.03
)
$
0.03
$
(0.09
)
Diluted
$
(0.02
)
$
(0.03
)
$
0.03
$
(0.09
)
(1)
The denominator used in the calculation of
diluted net income per share for the six months ended June 30,
2024, includes an additional 0.5 million shares, representing the
dilutive effect of the Company's restricted stock units.
Paysafe Limited Condensed Consolidated
Balance Sheets (unaudited)
($ in thousands)
June 30, 2024
December 31, 2023
Assets
Current assets
Cash and cash equivalents
$
222,382
$
202,322
Customer accounts and other restricted
cash
1,069,269
1,295,947
Accounts receivable, net of allowance for
credit losses of $5,677 and $5,240, respectively
177,323
162,081
Settlement receivables, net of allowance
for credit losses of $4,334 and $5,197, respectively
166,877
171,224
Prepaid expenses and other current
assets
66,810
74,919
Total current assets
1,702,661
1,906,493
Deferred tax assets
77,273
77,273
Property, plant and equipment, net
22,175
17,213
Operating lease right-of-use assets
26,110
22,120
Derivative financial assets
9,888
10,427
Intangible assets, net
1,062,881
1,163,935
Goodwill
2,000,689
2,023,402
Other assets – non-current
8,689
6,838
Total non-current assets
3,207,705
3,321,208
Total assets
$
4,910,366
$
5,227,701
Liabilities and equity
Current liabilities
Accounts payable and other liabilities
$
190,541
$
202,699
Short-term debt
10,190
10,190
Funds payable and amounts due to
customers
1,254,680
1,477,017
Operating lease liabilities – current
8,073
8,233
Contingent consideration payable –
current
9,908
11,828
Liability for share-based compensation –
current
3,405
2,701
Total current liabilities
1,476,797
1,712,668
Non-current debt
2,441,205
2,491,643
Operating lease liabilities –
non-current
21,740
16,963
Deferred tax liabilities
103,618
111,705
Warrant liabilities
1,283
1,423
Liability for share-based compensation –
non-current
2,545
3,108
Contingent consideration payable –
non-current
325
6,878
Total non-current liabilities
2,570,716
2,631,720
Total liabilities
4,047,513
4,344,388
Commitments and contingent liabilities
Total shareholders' equity
862,853
883,313
Total liabilities and shareholders'
equity
$
4,910,366
$
5,227,701
Paysafe Limited Condensed Consolidated
Statements of Cash Flow (unaudited)
Six Months Ended
June 30,
($ in thousands)
2024
2023 (1)
Cash flows from operating
activities
Net income / (loss)
$
1,626
$
(5,573
)
Adjustments for non-cash items:
Depreciation and amortization
137,461
129,972
Unrealized foreign exchange (gain) /
loss
(3,872
)
7,207
Deferred tax (benefit) / expense
(6,191
)
8,104
Interest expense, net
(4,962
)
(666
)
Share-based compensation
22,325
18,123
Other income, net
(9,542
)
(14,627
)
Impairment expense on goodwill and
intangible assets
676
275
Allowance for credit losses and other
19,205
9,241
Loss on disposal of subsidiary and other
assets, net
321
—
Non-cash lease expense
4,335
4,501
Movements in working capital:
Accounts receivable, net
(31,131
)
(17,648
)
Prepaid expenses and other current
assets
(3,646
)
(7,488
)
Accounts payable and other liabilities
(10,909
)
(37,174
)
Income tax receivable
(2,721
)
(24,033
)
Net cash flows from operating
activities
112,975
70,214
Cash flows in investing
activities
Purchase of property, plant &
equipment
(8,227
)
(6,339
)
Purchase of merchant portfolios
—
(23,488
)
Other intangible asset expenditures
(46,666
)
(49,487
)
Receipts under derivative financial
instruments
4,949
4,784
Cash inflow from merchant reserves
6,510
—
Other investing activities, net
1,626
(478
)
Net cash flows used in investing
activities
(41,808
)
(75,008
)
Cash flows from financing
activities
Cash settled equity awards
—
(484
)
Repurchases of shares withheld for
taxes
(5,320
)
(6,709
)
Purchase of treasury shares
(25,000
)
—
Settlement funds - merchants and
customers, net
(195,156
)
(423,099
)
Repurchase of borrowings
(67,928
)
(83,635
)
Proceeds from loans and borrowings
129,291
55,781
Repayments of loans and borrowings
(73,412
)
(55,044
)
Proceeds under line of credit
450,000
450,000
Repayments under line of credit
(450,000
)
(450,000
)
Contingent consideration paid
(8,597
)
(7,642
)
Net cash flows used in financing
activities
(246,122
)
(520,832
)
Effect of foreign exchange rate
changes
(31,663
)
31,553
Decrease in cash and cash equivalents,
including customer accounts and other restricted cash during the
period
$
(206,618
)
$
(494,073
)
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
$
1,291,651
$
1,633,122
Six Months Ended
June 30,
2024
2023
Cash and cash equivalents
$
222,382
$
206,703
Customer accounts and other restricted
cash
1,069,269
1,426,419
Total cash and cash equivalents,
including customer accounts and other restricted cash
$
1,291,651
$
1,633,122
(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) / Income to Adjusted
EBITDA
Three Months Ended
Six Months Ended
June 30,
June 30,
($ in thousands)
2024
2023
2024
2023
Net (loss) / income
$
(1,430
)
$
(1,765
)
$
1,626
$
(5,573
)
Income tax expense
5,207
6,545
12,506
10,424
Interest expense, net
37,135
36,762
72,100
74,218
Depreciation and amortization
68,630
66,425
136,940
129,972
Share-based compensation expense
12,966
10,907
22,325
18,123
Impairment expense on goodwill and
intangible assets
23
193
676
275
Restructuring and other costs
728
1,340
1,180
3,330
Loss on disposal of subsidiaries and other
assets, net
144
—
321
—
Other income, net
(4,397
)
(7,376
)
(16,752
)
(9,923
)
Adjusted EBITDA
$
119,006
$
113,031
$
230,922
$
220,846
Reconciliation of Operating Cash Flow to Non-GAAP Unlevered
Free Cash Flow
Three Months Ended
Six Months Ended
June 30,
June 30,
($ in thousands)
2024
2023 (1)
2024
2023 (1)
Net cash inflows from operating
activities
$
54,140
$
50,200
$
112,975
$
70,214
Capital expenditure
(30,468
)
(25,458
)
(54,893
)
(55,826
)
Cash paid for interest
45,731
45,991
77,062
74,884
Payments relating to Restructuring and
other costs
598
5,481
4,051
29,165
Unlevered Free Cash Flow
$
70,001
$
76,214
$
139,195
$
118,437
Adjusted EBITDA
119,006
113,031
230,922
220,846
(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
Six Months Ended
June 30,
June 30,
($ in thousands)
2024
2023
2024
2023
Revenue
$
439,924
$
402,338
$
857,662
$
790,187
Cost of services (excluding depreciation
and amortization)
183,825
166,614
354,198
325,553
Depreciation and amortization
68,630
66,425
136,940
129,972
Gross Profit (1)
$
187,469
$
169,299
$
366,524
$
334,662
Depreciation and amortization
68,630
66,425
136,940
129,972
Gross Profit (excluding depreciation
and amortization)
$
256,099
$
235,724
$
503,464
$
464,634
(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) / Income to Adjusted Net
Income
Three Months Ended
Six Months Ended
June 30,
June 30,
($ in thousands)
2024
2023
2024
2023
Net (loss) / income
$
(1,430
)
$
(1,765
)
$
1,626
$
(5,573
)
Other non operating income, net (1)
(1,864
)
(4,814
)
(11,638
)
(5,578
)
Impairment expense on goodwill and
intangible assets
23
193
676
275
Amortization of acquired assets (2)
33,527
34,095
67,130
67,768
Restructuring and other costs
728
1,340
1,180
3,330
Loss on disposal of subsidiaries and other
assets, net
144
—
321
—
Share-based compensation expense
12,966
10,907
22,325
18,123
Discrete tax items (3)
4,608
5,406
10,073
10,885
Income tax expense on non-GAAP adjustments
(4)
(12,423
)
(10,684
)
(20,108
)
(21,476
)
Adjusted net income
$
36,279
$
34,678
$
71,585
$
67,754
(in millions)
Weighted average shares -
diluted
60.7
61.5
61.7
61.2
Adjusted diluted impact
0.5
0.1
0.0
0.3
Adjusted weighted average shares -
diluted
61.2
61.6
61.7
61.5
(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 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 recorded on deferred tax assets of $3,804 and
$4,013 for the three months ended June 30, 2024 and 2023,
respectively, and $9,306 and $4,753 for the six months ended June
30, 2024 and 2023, respectively (b) measurement period adjustments
which were ($325) and ($1,612) for the three months ended June 30,
2024 and 2023, respectively, and ($382) and $917 for the six months
ended June 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 $2,290 and $3,741 for the three months
ended June 30, 2024 and 2023, respectively, and $2,472 and $3,741
for the six months ended June 30, 2024 and 2023, respectively. The
remaining discrete tax items relate to the remeasurement of certain
deferred tax balances due to changes in the statutory tax rates in
certain jurisdictions.
(4)
Income tax expense on non-GAAP adjustments reflects the tax
expense on each taxable adjustment using the current statutory tax
rate of the applicable jurisdiction specific to that
adjustment.
Adjusted Net Income per Share
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Numerator ($ in thousands)
Adjusted net income - basic
$
36,279
$
34,678
$
71,585
$
67,754
Adjusted net income - diluted
$
36,279
$
34,678
$
71,585
$
67,754
Denominator (in millions)
Weighted average shares – basic
60.7
61.5
61.2
61.2
Adjusted weighted average shares – diluted
(1)
61.2
61.6
61.7
61.5
Adjusted net income per share
Basic
$
0.60
$
0.56
$
1.17
$
1.11
Diluted
$
0.59
$
0.56
$
1.16
$
1.10
(1)
The denominator used in the calculation of diluted adjusted net
income per share for the three and six months ended June 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/20240812783901/en/
Media Crystal Wright Paysafe crystal.wright@paysafe.com +1 (904)
328-7740
Investors Matthew Parker Paysafe +1 (904) 663-2143
matthew.parker@paysafe.com
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