Record quarterly revenue, up 40%
year-over-year
Significantly expanding profitability while
investing for near- and long-term growth
Announces an agreement to acquire a licensed
China-based payment service provider
Payoneer Global Inc. (“Payoneer” or the “Company”) (NASDAQ:
PAYO), the financial technology company empowering the world’s
small and medium sized businesses to transact, do business and grow
globally, today reported financial results for its second quarter
ended June 30, 2023.
Second Quarter 2023 Financial
Highlights
($ in mm)
2Q
2022
3Q
2022
4Q
2022
1Q
2023
2Q
2023
YoYChange Revenue
$148.2
$158.9
$183.6
$192.0
$206.7
40%
Transaction costs as a % of revenue
17.7%
17.6%
16.6%
14.1%
13.8%
(390 bps) Revenue less transaction costs
$122.0
$130.9
$153.2
$164.9
$178.2
46%
Net income (loss)
4.4
(26.5)
(10.2)
7.9
45.5
930%
Adjusted EBITDA
14.7
12.7
10.6
38.8
56.0
280%
Operational Metrics Active
Ideal Customer Profiles (ICPs) ('000s)1
467
479
488
491
495
6%
Volume ($bn)
$14.6
$15.1
$16.9
$15.7
$15.8
8%
Revenue as a % of volume ("Take Rate") 101 bps 105 bps 109 bps 122
bps 131 bps 30 bps
- Active ICPs are defined as customers with a Payoneer Account
that have on average over $500 a month in volume and were active
over the trailing twelve-month period.
“Payoneer delivers a broad suite of payment and financial
services to emerging market SMBs,” said John Caplan, Chief
Executive Officer of Payoneer. “Our customers use Payoneer as the
easiest, most reliable way to connect into the global economy and
manage their international financial activity across currencies,
countries, customers, suppliers, and vendors.”
“We are making meaningful progress in growing ICPs and improving
our overall customer experience. We increased active ICPs
year-over-year by 13% each in APAC, SAMEA, and Latin America,
rolled out new product features, and announced agreements to
acquire a licensed China-based payment service provider and a
real-time data platform. I am confident about our ambitious
strategy for delivering durable profitable growth.”
Second Quarter 2023 Business
Highlights (unless noted otherwise)
- 6% active ICP growth year-over-year, including a second
consecutive quarter of 18% growth in our larger ICPs, or those who
have on average over $10k a month in volume
- Announced an agreement to acquire a licensed China-based
payment service provider on August 8, 2023. This transaction will
support Payoneer’s fast-growing China business upon close, and is
subject to customary closing conditions and regulatory
approvals
- Total B2B volume decreased 2% year-over-year; excluding the
impact of customers proactively exited in 3Q22, B2B volume
increased 12%
- In APAC, SAMEA, and Latin America, where we predominantly serve
outsourcing and services businesses, B2B volume grew 29%
year-over-year
- New and foundational product enhancements to serve larger ICPs,
including scheduling payments, enabling multi-user access and card
spend limits, and real-time availability of funds for US-based B2B
payers via open banking integrations
- On August 2, 2023, acquired Spott, a real-time data platform
that will help us drive faster underwriting decisions in our
working capital business
- $20 million of share repurchases in the second quarter
- $5.5 billion of customer funds as of June 30, 2023, up 8%
year-over-year
2023 Guidance
“We continue to steadily acquire ICPs, generate significant
revenue growth and margin expansion, and invest for future growth,”
said Bea Ordonez, Chief Financial Officer. “Our revenue growth is
accelerating as we increase monetization of our customer segments,
drive ICP growth, and earn interest income revenue from customer
funds held on our platform.”
“We are raising our full year 2023 guidance. We saw improving
revenue growth trends in the second quarter and better exit rate
dynamics, and we now expect $210 million of interest income revenue
for the full year. Our $20 million increase in adjusted EBITDA
guidance reflects the in-year benefit of recent headcount
reductions, restricted hiring, and cost savings within our
transaction expenses. We are improving our operating margin while
accelerating our product roadmap, enhancing our customer
experience, and expanding our global licensing framework.”
2023 guidance is as follows:
Revenue
$820 million - $830 million
Transaction costs
~15.5% of revenue
Adjusted EBITDA (1)
$160 million to $170 million
(1) Please refer to “Financial Information; Non-GAAP Financial
Measures” below.
Guidance for fiscal year, where adjusted, is provided on a
non-GAAP basis, which Payoneer will continue to identify as it
reports its future financial results. The Company cannot reconcile
its expected adjusted EBITDA to expected net income under “2023
Guidance” without unreasonable effort because certain items that
impact net income and other reconciling metrics are out of the
Company's control and/or cannot be reasonably predicted at this
time, which unavailable information could have a significant impact
on the Company’s GAAP financial results.
Webcast
Payoneer will host a live webcast of its earnings on a
conference call with the investment community beginning at 8:30
a.m. ET today, August 8, 2023. To access the webcast, go to the
investor relations section of the Company’s website at
https://investor.payoneer.com. A replay will be available on the
investor relations website following the call.
About Payoneer
Payoneer is the financial technology company empowering the
world’s small and medium-sized businesses to transact, do business
and grow globally. Payoneer was founded in 2005 with the belief
that talent is equally distributed, but opportunity is not. It is
our mission to enable anyone anywhere to participate and succeed in
the global digital economy. Since our founding, we have built a
global financial platform that has already made it easier for
millions of SMBs, particularly in emerging markets, to pay and get
paid, manage their funds, and grow their business.
Forward-Looking Statements
This press release includes, and oral statements made from time
to time by representatives of Payoneer, may be considered
“forward-looking statements” within the meaning of the “safe
harbor” provisions of the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements generally
relate to future events or Payoneer’s future financial or operating
performance. For example, projections of future revenue,
transaction cost and adjusted EBITDA are forward-looking
statements. In some cases, you can identify forward-looking
statements by terminology such as “may,” “should,” “expect,”
“intend,” “plan,” “will,” “estimate,” “anticipate,” “believe,”
“predict,” “potential” or “continue,” or the negatives of these
terms or variations of them or similar terminology. Such
forward-looking statements are subject to risks, uncertainties, and
other factors which could cause actual results to differ materially
from those expressed or implied by such forward looking statements.
These forward-looking statements are based upon estimates and
assumptions that, while considered reasonable by Payoneer and its
management, as the case may be, are inherently uncertain. Factors
that may cause actual results to differ materially from current
expectations include, but are not limited to: (1) changes in
applicable laws or regulations; (2) the possibility that Payoneer
may be adversely affected by geopolitical and other economic,
business and/or competitive factors; (3) Payoneer’s estimates of
its financial performance; (4) the outcome of any known and/or
unknown legal or regulatory proceedings; and (5) other risks and
uncertainties set forth in Payoneer’s Annual Report on Form 10-K
for the period ended December 31, 2022 and future reports that
Payoneer may file with the SEC from time to time. Nothing in this
press release should be regarded as a representation by any person
that the forward-looking statements set forth herein will be
achieved or that any of the contemplated results of such
forward-looking statements will be achieved. You should not place
undue reliance on forward-looking statements, which speak only as
of the date they are made. Payoneer does not undertake any duty to
update these forward-looking statements.
Financial Information; Non-GAAP Financial Measures
Some of the financial information and data contained in this
press release, such as adjusted EBITDA, have not been prepared in
accordance with United States generally accepted accounting
principles (“GAAP”). Payoneer uses these non-GAAP measures to
compare Payoneer’s performance to that of prior periods for
budgeting and planning purposes. Payoneer believes these non-GAAP
measures of financial results provide useful information to
management and investors regarding certain financial and business
trends relating to Payoneer’s results of operations. Payoneer's
method of determining these non-GAAP measures may be different from
other companies' methods and, therefore, may not be comparable to
those used by other companies and Payoneer does not recommend the
sole use of these non-GAAP measures to assess its financial
performance. Payoneer management does not consider these non-GAAP
measures in isolation or as an alternative to financial measures
determined in accordance with GAAP. The principal limitation of
these non-GAAP financial measures is that they exclude significant
expenses and income that are required by GAAP to be recorded in
Payoneer’s financial statements. In addition, they are subject to
inherent limitations as they reflect the exercise of judgments by
management about which expense and income are excluded or included
in determining these non-GAAP financial measures. In order to
compensate for these limitations, management presents non-GAAP
financial measures in connection with GAAP results. You should
review Payoneer’s financial statements, which are included in
Payoneer’s Annual Report on Form 10-K for the year ended December
31, 2022 and its subsequent Quarterly Reports on Form 10-Q, and not
rely on any single financial measure to evaluate Payoneer’s
business.
Non-GAAP measures include the following item:
Adjusted EBITDA: We provide
adjusted EBITDA, a non-GAAP financial measure that represents our
net income (loss) adjusted to exclude: M&A related expense
(income), stock-based compensation expenses, reorganization related
expenses, share in losses (gain) of associated company, gain from
change in fair value of warrants, other financial expense (income),
net, taxes on income, and depreciation and amortization.
Other companies may calculate the above measure differently, and
therefore Payoneer’s measures may not be directly comparable to
similarly titled measures of other companies.
TABLE - 1 PAYONEER GLOBAL INC. CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (U.S. dollars in
thousands, except share and per share data)
(Unaudited) Three months ended June 30,
2023
2022
Revenues $
206,734
$
148,190
Transaction costs (Exclusive of depreciation and
amortization shown separately below and inclusive of $436 and $338
in interest expense and fees associated with related party
transactions during the three months ended June 30, 2023 and 2022,
and $857 and $658 during the six months ended June 30, 2023 and
2022, respectively)
28,497
26,212
Other operating expenses (Exclusive of depreciation and
amortization shown separately below)
40,527
35,392
Research and development expenses
27,995
26,607
Sales and marketing expenses
48,402
36,820
General and administrative expenses
22,012
20,192
Depreciation and amortization
5,909
5,171
Total operating expenses
173,342
150,394
Operating income (loss)
33,392
(2,204
)
Financial income (expense): Gain from change in fair
value of Warrants
13,586
12,831
Other financial income (expense), net
4,318
(4,824
)
Financial income, net
17,904
8,007
Income before taxes on income and share in gains (losses)
of associated company
51,296
5,803
Taxes on income
5,747
1,374
Share in gains (losses) of associated company
—
(7
)
Net income $
45,549
$
4,422
Other comprehensive loss, net of tax Foreign currency
translation adjustments
—
(3,248
)
Other comprehensive loss, net of tax
—
(3,248
)
Comprehensive income $
45,549
$
1,174
Per Share Data Net income per share attributable to
common stockholders — Basic earnings per share $
0.12
$
0.01
— Diluted earnings per share $
0.12
$
0.01
Weighted average common shares outstanding — Basic
365,000,974
345,522,076
Weighted average common shares outstanding — Diluted
387,623,679
366,013,696
Disaggregation of
revenue
The following table presents revenue recognized from
contracts with customers as well as revenue from other sources,
which consists of interest income:
Three months ended
June 30,
2023
2022
Revenue recognized at a point in time $
141,231
$
135,063
Revenue recognized over time
10,210
9,634
Revenue from contracts with customers
151,441
144,697
Revenue from other sources
55,293
3,493
Total revenues $
206,734
$
148,190
The following table presents our revenue
disaggregated by primary regional market, with revenues being
attributed to the country (in the region) in which the billing
address of the transacting customer is located, with the exception
of global bank transfer revenues, where revenues are disaggregated
based on the billing address of the transaction funds source.
Three months ended June 30,
2023
2022
Primary regional markets Greater China1 $
71,227
$
46,785
Europe2
41,699
31,035
Asia-Pacific2
27,385
20,168
North America3
26,041
20,518
South Asia, Middle East and North Africa2
21,711
16,851
Latin America2
18,671
12,833
Total revenues $
206,734
$
148,190
1.
Greater China is inclusive of
mainland China, Hong Kong, Macao and Taiwan
2.
No single country included in any
of these regions generated more than 10% of total revenue
3.
The United States is our country
of domicile. Of North America revenues, the US represents $24,995
and $18,528 during the three months ended June 30, 2023 and 2022,
respectively.
TABLE - 2 PAYONEER GLOBAL INC. RECONCILIATION OF
NET INCOME TO ADJUSTED EBITDA (UNAUDITED) (U.S. dollars in
thousands)
Three months ended June 30,
2023
2022
Net income $
45,549
$
4,422
Depreciation and amortization
5,909
5,171
Taxes on income
5,747
1,374
Other financial (income) expense, net
(4,318
)
4,824
EBITDA
52,887
15,791
Stock based compensation expenses1
16,173
11,890
Share in loss of associated company
—
7
M&A related expense (income)2
498
(116
)
Gain from change in fair value of Warrants3
(13,586
)
(12,831
)
Adjusted EBITDA $
55,972
$
14,741
Three months ended, June 30, 2022 Sept. 30,
2022 Dec. 31, 2022 Mar. 31, 2023 June 30,
2023 Net income (loss) $
4,422
$
(26,452
)
$
(10,151
)
$
7,938
$
45,549
Depreciation & amortization
5,171
5,899
5,333
6,039
5,909
Taxes on income
1,374
2,635
7,610
9,172
5,747
Other financial (income) expense, net
4,824
3,617
(1,005
)
(2,350
)
(4,318
)
EBITDA
15,791
(14,301
)
1,787
20,799
52,887
Stock based compensation expenses1
11,890
13,525
13,827
16,927
16,173
Share in losses of associated company
7
2
13
—
—
M&A related expense (income)2
(116
)
(1,588
)
—
774
498
Loss (gain) from change in fair value of Warrants3
(12,831
)
15,095
(5,031
)
252
(13,586
)
Adjusted EBITDA $
14,741
$
12,733
$
10,596
$
38,752
$
55,972
1.
Represents non-cash charges
associated with stock-based compensation expense, which has been,
and will continue to be for the foreseeable future, a significant
recurring expense in our business and an important part of our
compensation strategy.
2.
Amounts for the three months
ended June 30, 2023 relate to M&A-related third-party fees,
including related legal, consulting and other expenditures. Amounts
for the three months ended June 30, 2022 relate to a non-recurring
fair value adjustment of a liability related to our 2020
acquisition of optile.
3.
Changes in the estimated fair
value of the warrants are recognized as gain or loss on the
condensed consolidated statements of comprehensive income. The
impact is removed from EBITDA as it represents market conditions
that are not in control of the Company.
TABLE - 3 PAYONEER GLOBAL INC. EARNINGS PER SHARE
(UNAUDITED) (U.S. dollars in thousands, except share and per
share data)
(Unaudited) Three months ended June
30,
2023
2022
Numerator: Net income $
45,549
$
4,422
Denominator: Weighted average common shares outstanding — Basic
365,000,974
345,522,076
Add: Dilutive impact of RSUs and options to purchase common stock
21,928,779
19,844,013
Dilutive impact of private warrants
693,926
647,607
Weighted average common shares – diluted
387,623,679
366,013,696
Net income per share attributable to common stockholders — Basic
earnings per share $
0.12
$
0.01
Diluted earnings per share $
0.12
$
0.01
TABLE - 4 PAYONEER GLOBAL INC. CONSOLIDATED
BALANCE SHEETS (U.S. dollars in thousands, except share and per
share data)
June 30, December 31,
2023
2022
(Unaudited)
Assets: Current assets: Cash and cash
equivalents $
581,053
$
543,299
Restricted cash
9,710
2,882
Customer funds
5,528,701
5,838,612
Accounts receivable (net of allowance of $246 at June 30, 2023 and
December 31, 2022)
11,260
12,878
Capital advance receivables (net of allowance of $4,565 at June 30,
2023 and $5,311 at December 31, 2022)
40,220
37,155
Other current assets
37,983
36,278
Total current assets
6,208,927
6,471,104
Non-current assets: Property, equipment and software, net
13,599
14,392
Goodwill
19,889
19,889
Intangible assets, net
57,919
45,444
Restricted cash
6,092
4,848
Deferred taxes
14,002
4,169
Investment in associated company
—
6,429
Severance pay fund
970
1,095
Operating lease right-of-use assets
12,681
15,260
Other assets
9,771
12,021
Total assets $
6,343,850
$
6,594,651
Liabilities and shareholders’ equity: Current
liabilities: Trade payables $
29,170
$
41,566
Outstanding operating balances
5,528,701
5,838,612
Other payables
100,574
97,334
Total current liabilities
5,658,445
5,977,512
Non-current liabilities: Long-term debt from related party
15,639
16,138
Warrant liability
12,580
25,914
Other long-term liabilities
31,239
29,831
Total liabilities
5,717,903
6,049,395
Commitments and contingencies Shareholders’
equity: Preferred stock, $0.01 par value, 380,000,000 shares
authorized; no shares were issued and outstanding at June 30, 2023
and December 31, 2022.
—
—
Common stock, $0.01 par value, 3,800,000,000 and 3,800,000,000
shares authorized; 363,252,231 and 352,842,025 shares issued and
359,051,208 and 352,842,025 shares outstanding at June 30, 2023 and
December 31, 2022, respectively.
3,632
3,528
Treasury stock at cost, 4,201,025 and 0 shares as of June 30, 2023
and December 30, 2022, respectively
(19,725
)
Additional paid-in capital
697,258
650,433
Accumulated other comprehensive income (loss)
(176
)
(176
)
Accumulated deficit
(55,042
)
(108,529
)
Total shareholders’ equity
625,947
545,256
Total liabilities and shareholders’ equity $
6,343,850
$
6,594,651
TABLE - 5 PAYONEER GLOBAL INC. CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED) (U.S. dollars in
thousands)
Six months ended June 30,
2023
2022
Cash Flows from Operating Activities Net income $
53,487
$
24,633
Adjustment to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
11,948
9,626
Deferred taxes
(9,833
)
1,066
Stock-based compensation expenses
33,100
25,275
Share in gains of associated company
—
(13
)
Gain from change in fair value of Warrants
(13,334
)
(44,027
)
Foreign currency re-measurement loss (gain)
(606
)
2,491
Changes in operating assets and liabilities: Other current
assets
(1,621
)
(6,650
)
Trade payables
(13,157
)
9,538
Deferred revenue
407
24
Accounts receivable, net
1,618
(490
)
Capital advance extended to customers
(138,900
)
(109,422
)
Capital advance collected from customers
135,835
121,990
Other payables
(5,259
)
(6,318
)
Other long-term liabilities
(1,066
)
(3,695
)
Operating lease right-of-use assets
5,053
5,134
Other assets
2,247
(288
)
Net cash provided by operating activities
59,919
28,874
Cash Flows from Investing Activities Purchase of
property, equipment and software
(2,422
)
(5,093
)
Capitalization of internal use software
(12,921
)
(7,772
)
Severance pay fund distributions, net
125
481
Customer funds in transit, net
(54,188
)
(22,139
)
Net cash inflow from acquisition of remaining interest in joint
venture
5,953
—
Net cash used in investing activities
(63,453
)
(34,523
)
Cash Flows from Financing Activities Proceeds from
issuance of common stock in connection with stock based
compensation plan
12,091
11,312
Outstanding operating balances, net
(309,911
)
739,388
Borrowings under related party facility
14,015
15,322
Repayments under related party facility
(14,514
)
(14,219
)
Common stock repurchased
(17,125
)
—
Net cash provided by (used in) financing activities
(315,444
)
751,803
Effect of exchange rate changes on cash and cash
equivalents
705
(2,491
)
Net change in cash, cash equivalents, restricted cash and
customer funds
(318,273
)
743,663
Cash, cash equivalents, restricted cash and customer funds at
beginning of period
6,386,720
4,838,433
Cash, cash equivalents, restricted cash and customer funds at
end of period $
6,068,447
$
5,582,096
Supplemental information of investing and financing activities
not involving cash flows: Property, equipment, and software
acquired but not paid $
870
$
551
Internal use software capitalized but not paid $
8,294
$
1,762
Common stock repurchased but not paid $
2,600
$
—
Right of use assets obtained in exchange for new operating lease
liabilities $
2,474
$
11,266
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230808799312/en/
Investors: Michelle Wang investor@payoneer.com
Media: Alison Dahlman PR@payoneer.com
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