Delivers another quarter of record revenue, up
31% year-over-year
Reiterates 2023 revenue guidance and raises
adjusted EBITDA guidance
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 third quarter
ended September 30, 2023.
Third Quarter 2023 Financial
Highlights
($ in mm)
3Q
2022
4Q
2022
1Q
2023
2Q
2023
3Q
2023
YoYChange Revenue
$158.9
$183.6
$192.0
$206.7
$208.0
31%
Transaction costs as a % of revenue
17.6%
16.6%
14.1%
13.8%
14.6%
(300 bps)
Revenue less transaction costs
$130.9
$153.2
$164.9
$178.2
$177.6
36%
Net income (loss)
(26.5)
(10.2)
7.9
45.5
12.8
n.m.
Adjusted EBITDA
12.7
10.6
38.8
56.0
58.2
357%
Operational Metrics Active
Ideal Customer Profiles (ICPs) ('000s)1
479
488
491
495
502
5%
Volume ($bn)
$15.1
$16.9
$15.7
$15.8
$16.8
11%
Revenue as a % of volume ("Take Rate")
105 bps
109 bps
122 bps
131 bps
124 bps
19 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’s active ICP and revenue growth year-over-year, along
with significantly expanding profitability, underscores our
progress and conviction in the strategy we laid out at our investor
day in September,” said John Caplan, Chief Executive Officer of
Payoneer. “Global small- and medium-sized businesses need a
borderless financial stack to grow and scale and Payoneer is making
strategic investments in our platform and ecosystem of partnerships
to better serve their needs. Our focus remains on our ICPs and
adding to our financial stack to drive durable, profitable revenue
growth.”
“We are reiterating our full year 2023 revenue guidance,” said
Bea Ordonez, Chief Financial Officer. “We are steadily increasing
active ICPs, improving monetization of customers, and cross selling
our product suite. We are raising our 2023 adjusted EBITDA guidance
to $200 million at the midpoint. This implies a 24% adjusted EBITDA
margin for 2023 and demonstrates our commitment to driving
operating leverage even as we accelerate investments in our product
roadmap, customer experience, and global licensing framework.”
Note: The Company cannot reconcile its
expected 2023 adjusted EBITDA to expected 2023 net income 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.
Third Quarter 2023 Business
Highlights (unless noted otherwise)
- 5% active ICP growth year-over-year, including 17% growth in
our larger ICPs, or those who have on average over $10k a month in
volume
- In October 2023, announced a collaboration with Etsy to support
its expansion of Etsy Payments into emerging markets
- Total B2B volume increased 1% year-over-year; excluding the
impact of customers proactively exited in 3Q22, B2B volume
increased 6%
- In APAC, SAMEA, and Latin America, where we predominantly serve
outsourcing and services businesses, B2B volume grew 23%
year-over-year
- Launched Shopify native Payoneer Checkout capabilities to
improve the consumer shopping experience and Payoneer’s merchant
conversion rates
- Implemented bank feed integration with QuickBooks to increase
efficiency and interoperability for customers
- Launched New Zealand Dollar (NZD) receiving account so
Payoneer’s customers can get paid locally from their clients and
marketplaces
- $15 million of share repurchases
- $5.4 billion of customer funds as of September 30, 2023, up 7%
year-over-year
2023 Guidance
2023 guidance is as follows:
Revenue
$820 million - $830 million
Transaction costs
~14.5% of revenue
Adjusted EBITDA (1)
$195 million to $205 million
(1)
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. Please
refer to “Financial Information; Non-GAAP Financial Measures” below
for a description of the calculation of adjusted EBITDA.
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, November 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 events and conflicts,
such as the current conflict between Israel and Hamas, 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, restructuring
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 (LOSS) (UNAUDITED) (U.S.
dollars in thousands, except share and per share data)
Three months ended September 30,
2023
2022
Revenues $
208,035
$
158,917
Transaction costs (Exclusive of depreciation and
amortization shown separately below and inclusive of $437 and $384
in interest expense and fees associated with related party
transactions during the three months ended September 30, 2023 and
2022, respectively)
30,393
27,986
Other operating expenses (Exclusive of depreciation and
amortization shown separately below)
40,301
37,744
Research and development expenses
26,950
29,617
Sales and marketing expenses
48,664
41,081
General and administrative expenses
25,112
21,693
Depreciation and amortization
7,116
5,899
Total operating expenses
178,536
164,020
Operating income (loss)
29,499
(5,103
)
Financial income (expense): Loss from change in fair
value of Warrants
(7,799
)
(15,095
)
Other financial income (expense), net
1,137
(3,617
)
Financial expense, net
(6,662
)
(18,712
)
Income (loss) before taxes on income and share in losses
of associated company
22,837
(23,815
)
Taxes on income
10,012
2,635
Share in losses of associated company
—
(2
)
Net income (loss) $
12,825
$
(26,452
)
Other comprehensive loss, net of tax Foreign currency
translation adjustments
—
(1,658
)
Other comprehensive loss, net of tax
—
(1,658
)
Comprehensive income (loss) $
12,825
$
(28,110
)
Per Share Data Net income (loss) per share
attributable to common stockholders — Basic earnings (loss) per
share $
0.04
$
(0.08
)
— Diluted earnings (loss) per share $
0.03
$
(0.08
)
Weighted average common shares outstanding — Basic
357,429,113
349,740,787
Weighted average common shares outstanding — Diluted
381,845,099
349,740,787
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 September 30,
2023
2022
Revenue recognized at a point in time $
144,665
$
134,394
Revenue recognized over time
2,954
9,477
Revenue from contracts with customers
147,619
143,871
Revenue from other sources
60,416
15,046
Total revenues $
208,035
$
158,917
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 September 30,
2023
2022
Primary regional markets Greater China1 $
72,513
$
50,162
Europe2
42,378
33,019
Asia-Pacific2
29,145
21,570
North America3
22,358
21,843
South Asia, Middle East and North Africa2
22,181
17,809
Latin America2
19,460
14,514
Total revenues $
208,035
$
158,917
- Greater China is inclusive of mainland China, Hong Kong, Macao
and Taiwan
- No single country included in any of these regions generated
more than 10% of total revenue
- The United States is our country of domicile. Of North America
revenues, the US represents $21,348 and $20,675 during the three
months ended September 30, 2023 and 2022, respectively.
TABLE - 2 PAYONEER GLOBAL INC.
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(UNAUDITED) (U.S. dollars in thousands)
Three months
ended September 30,
2023
2022
Net income (loss) $
12,825
$
(26,452
)
Depreciation and amortization
7,116
5,899
Taxes on income
10,012
2,635
Other financial (income) expense, net
(1,137
)
3,617
EBITDA
28,816
(14,301
)
Stock based compensation expenses1
15,330
13,525
Share in loss of associated company
—
2
M&A related expense (income)2
1,745
(1,588
)
Loss from change in fair value of Warrants3
7,799
15,095
Restructuring charges4
4,488
—
Adjusted EBITDA $
58,178
$
12,733
Three months ended,
Sept. 30, 2022
Dec. 31, 2022
Mar. 31, 2023
Jun. 30, 2023
Sept. 30, 2023
Net income (loss) $
(26,452
)
$
(10,151
)
$
7,938
$
45,549
$
12,825
Depreciation & amortization
5,899
5,333
6,039
5,909
7,116
Taxes on income
2,635
7,610
9,172
5,747
10,012
Other financial (income) expense, net
3,617
(1,005
)
(2,350
)
(4,318
)
(1,137
)
EBITDA
(14,301
)
1,787
20,799
52,887
28,816
Stock based compensation expenses1
13,525
13,827
16,927
16,173
15,330
Share in losses of associated company
2
13
—
—
—
M&A related expense (income)2
(1,588
)
—
774
498
1,745
Loss (gain) from change in fair value of Warrants3
15,095
(5,031
)
252
(13,586
)
7,799
Restructuring charges4
—
—
—
—
4,488
Adjusted EBITDA $
12,733
$
10,596
$
38,752
$
55,972
$
58,178
- 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.
- Amounts for the periods in 2023 relate to M&A-related
third-party fees, including related legal, consulting and other
expenditures. Amounts for the three months ended September 30, 2022
relate to a non-recurring fair value adjustment of a liability
related to our 2020 acquisition of optile.
- Changes in the estimated fair value of the warrants are
recognized as gain or loss on the condensed consolidated statements
of comprehensive income (loss). The impact is removed from EBITDA
as it represents market conditions that are not in our
control.
- The Company initiated a plan to reduce its workforce during the
three months ending September 30, 2023 and had non-recurring costs
related to severance and other employee termination benefits.
Please refer to Note 10 of the Company’s third quarter 10-Q filing
for additional information.
TABLE - 3 PAYONEER GLOBAL INC. EARNINGS
(LOSS) PER SHARE (UNAUDITED) (U.S. dollars in thousands, except
share and per share data)
Three months ended September
30,
2023
2022
Numerator: Net income (loss) $
12,825
$
(26,452
)
Denominator: Weighted average common shares outstanding — Basic
357,429,113
349,740,787
Add: Dilutive impact of RSUs and options to purchase common stock
23,678,424
-
Dilutive impact of private warrants
737,562
-
Weighted average common shares – diluted
381,845,099
349,740,787
Net income (loss) per share attributable to common stockholders —
Basic earnings (loss) per share $
0.04
$
(0.08
)
Diluted earnings (loss) per share $
0.03
$
(0.08
)
TABLE - 4 PAYONEER GLOBAL INC. CONSOLIDATED
BALANCE SHEETS (UNAUDITED) (U.S. dollars in thousands, except
share and per share data)
September 30,
December 31,
2023
2022
Assets: Current assets: Cash and cash
equivalents $
590,565
$
543,299
Restricted cash
2,872
2,882
Customer funds
5,370,466
5,838,612
Accounts receivable (net of allowance of $618 at September 30, 2023
and $246 at December 31, 2022)
5,970
12,878
Capital advance receivables (net of allowance of $4,910 at
September 30, 2023 and $5,311 at December 31, 2022)
49,156
37,155
Other current assets
42,253
36,278
Total current assets
6,061,282
6,471,104
Non-current assets: Property, equipment and software, net
13,733
14,392
Goodwill
19,889
19,889
Intangible assets, net
70,872
45,444
Restricted cash
6,518
4,848
Deferred taxes
16,193
4,169
Investment in associated company
—
6,429
Severance pay fund
944
1,095
Operating lease right-of-use assets
12,396
15,260
Other assets
15,931
12,021
Total assets $
6,217,758
$
6,594,651
Liabilities and shareholders’ equity: Current
liabilities: Trade payables $
35,587
$
41,566
Outstanding operating balances
5,370,466
5,838,612
Other payables
104,759
97,334
Total current liabilities
5,510,812
5,977,512
Non-current liabilities: Long-term debt from related party
15,801
16,138
Warrant liability
20,379
25,914
Other long-term liabilities
32,800
29,831
Total liabilities
5,579,792
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 September 30,
2023 and December 31, 2022.
—
—
Common stock, $0.01 par value, 3,800,000,000 and 3,800,000,000
shares authorized; 365,953,562 and 352,842,025 shares issued and
359,014,445 and 352,842,025 shares outstanding at September 30,
2023 and December 31, 2022, respectively.
3,659
3,528
Treasury stock at cost, 6,939,117 and 0 shares as of September 30,
2023 and December 30, 2022, respectively
(34,759
)
Additional paid-in capital
711,459
650,433
Accumulated other comprehensive income (loss)
(176
)
(176
)
Accumulated deficit
(42,217
)
(108,529
)
Total shareholders’ equity
637,966
545,256
Total liabilities and shareholders’ equity $
6,217,758
$
6,594,651
TABLE - 5 PAYONEER GLOBAL INC. CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED) (U.S. dollars in
thousands)
Nine months ended September 30,
2023
2022
Cash Flows from Operating Activities Net income (loss) $
66,312
$
(1,819
)
Adjustment to reconcile net income (loss) to net cash provided
by operating activities: Depreciation and amortization
19,064
15,525
Deferred taxes
(12,024
)
820
Stock-based compensation expenses
48,429
39,132
Share in gains of associated company
—
(11
)
Gain from change in fair value of Warrants
(5,535
)
(28,932
)
Foreign currency re-measurement loss
761
3,015
Changes in operating assets and liabilities: Other current
assets
(5,891
)
(10,825
)
Trade payables
(6,948
)
8,753
Deferred revenue
1,206
(30
)
Accounts receivable, net
6,908
(7,024
)
Capital advance extended to customers
(207,075
)
(145,424
)
Capital advance collected from customers
195,074
163,266
Other payables
(880
)
7,047
Other long-term liabilities
(1,429
)
(7,250
)
Operating lease right-of-use assets
7,262
7,862
Other assets
(3,906
)
221
Net cash provided by operating activities
101,328
44,326
Cash Flows from Investing Activities Purchase of
property, equipment and software
(4,336
)
(7,132
)
Capitalization of internal use software
(25,322
)
(10,209
)
Related party asset acquisition
(3,600
)
—
Severance pay fund distributions, net
151
504
Customer funds in transit, net
(20,600
)
2,895
Net cash inflow from acquisition of remaining interest in joint
venture
5,953
—
Net cash used in investing activities
(47,754
)
(13,942
)
Cash Flows from Financing Activities Proceeds from
issuance of common stock in connection with stock based
compensation plan, net of taxes paid related to settlement of
equity awards
10,159
15,283
Outstanding operating balances, net
(468,146
)
638,370
Borrowings under related party facility
19,309
22,464
Repayments under related party facility
(19,646
)
(20,382
)
Common stock repurchased
(34,408
)
—
Net cash provided by (used in) financing activities
(492,732
)
655,735
Effect of exchange rate changes on cash and cash
equivalents
(662
)
(3,369
)
Net change in cash, cash equivalents, restricted cash and
customer funds
(439,820
)
682,750
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 $
5,946,900
$
5,521,183
Supplemental information of investing and financing activities
not involving cash flows: Property, equipment, and software
acquired but not paid $
1,078
$
338
Internal use software capitalized but not paid $
12,119
$
2,276
Common stock repurchased but not paid $
350
$
—
Right of use assets obtained in exchange for new operating lease
liabilities $
4,398
$
13,415
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231108290506/en/
Investor Contact: Michelle Wang investor@payoneer.com
Media Contact: Alison Dahlman PR@payoneer.com
Payoneer Global (NASDAQ:PAYO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Payoneer Global (NASDAQ:PAYO)
Historical Stock Chart
From Apr 2023 to Apr 2024