Record quarterly revenue, up 19%
year-over-year, driven by strong growth across the entire
platform
21% volume growth, including 33% B2B volume
growth
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 first quarter
ended March 31, 2024.
First Quarter 2024 Financial
Highlights
($ in mm)
1Q
2023
2Q
2023
3Q
2023
4Q
2023
1Q
2024
YoYChange Revenue ex. interest income
$141.9
$151.4
$147.6
$159.4
$162.9
15%
Interest income
50.1
55.3
60.4
64.9
65.3
30%
Revenue
$192.0
$206.7
$208.0
$224.3
$228.2
19%
Transaction costs as a % of revenue
14.1%
13.8%
14.6%
16.2%
14.9%
80 bps
Net income
$7.9
$45.5
$12.8
$27.0
$29.0
265%
Adjusted EBITDA
38.8
56.0
58.2
52.2
65.2
68%
Operational Metrics
Volume ($bn)
$15.3
$15.3
$16.3
$19.0
$18.5
21%
Active Ideal Customer Profiles (ICPs) ('000s)1
491
495
502
516
530
8%
Revenue as a % of volume ("Take Rate")
125 bps
135 bps
127 bps
118 bps
124 bps
-1 bps
SMB customer take rate2
104 bps
110 bps
107 bps
100 bps
108 bps
4 bps
1.
Active ICPs are defined as
customers with a Payoneer Account that have on average over $500
per month in volume and were active over the trailing twelve-month
period.
2.
SMB customer take rate represents
revenue from SMBs who sell on marketplaces, B2B SMBs, and Merchant
Services, divided by the associated volume from each respective
channel.
“Payoneer delivered record quarterly revenue and strong
profitability in the first quarter, driven by growth across all
channels, including faster growth in our higher take rate B2B and
Merchant Services businesses,” said John Caplan, Chief Executive
Officer. “We grew ICPs by 8% and generated 21% volume growth, our
highest growth rate in nearly 3 years. We are making steady
progress against our strategic priorities, accelerating underlying
revenue growth, and increasing profitability.”
First Quarter 2024 Business
Highlights
- 8% active ICP growth, including 13% growth in larger ICPs who
have on average over $10,000 per month in volume
- 21% volume growth year-over-year reflects:
- B2B volume of $2.2 billion increased 33% year-over-year, driven
by strong acquisition, improved ability to support more industries,
and continued enhancements to our product features and
functionality
- Merchant Services (Checkout) volume of $92 million increased
217% year-over-year driven by strong acquisition of $10K+
customers
- Marketplace volume of $11.0 billion increased 13%
year-over-year led by continued strength from large ecommerce
platforms
- Enterprise payouts volume of $5.1 billion increased 34%
year-over-year, led by the travel vertical where we increased the
number of routes we serve compared to a year ago
- $1.1 billion of spend on Payoneer cards, up 34% year-over-year,
as we continue to successfully cross-sell our card product to
customers
- $5.9 billion of customer funds as of March 31, 2024, up 8%
year-over-year
- $51 million of share repurchases at a weighted average price of
$4.84
2024 Guidance
“Payoneer’s first quarter results reflect strong growth across
our entire platform. We delivered 21% growth in revenue excluding
interest income and normalizing for the $7.5 million impact of
certain non-volume fees earned in the prior year period, a
significant acceleration compared to 8% in 2023,” said Bea Ordonez,
Chief Financial Officer. “We are raising our 2024 guidance to
reflect both the robust first quarter performance and our momentum
heading into the second quarter. We continue to drive acquisition
and improve retention of our most valuable customers while we
enhance our financial stack and further penetrate the fast-growing
B2B market.”
2024 guidance is as follows:
Revenue
$895 million - $905 million
Transaction costs
~17.5% of revenue
Adjusted EBITDA (1)
$200 million to $210 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 “2024 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, May 8, 2024. 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 any entrepreneur and business anywhere to
participate and succeed in an increasingly digital global economy.
Since our founding, we have built a global financial stack that
removes barriers and simplifies cross-border commerce. We make it
easier for millions of SMBs, particularly in emerging markets, to
connect to the global economy, pay and get paid, manage their funds
across multiple currencies, and grow their businesses.
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) changes in the
assumptions underlying our financial estimates; (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, 2023 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, 2023 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, as applicable: M&A
related expense (income), stock-based compensation expenses,
restructuring charges, share in losses (gain) of associated
company, loss (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.
In addition, in this earnings release, we reference volume,
which is an operational metric. Volume refers to the total dollar
value of transactions successfully completed or enabled by our
platform, not including orchestration transactions. For a customer
that both receives and later sends payments, we count the volume
only once. Note: as disclosed in the Company’s Form 10-K filed with
the SEC on February 28, 2024, we have updated our methodology to
adjust for previously disclosed limited exceptions where both
received and sent payments were counted in volumes, such that we
count volume only once for a customer that both receives and later
sends payments.
TABLE - 1 PAYONEER GLOBAL INC. CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (U.S. dollars in
thousands, except share and per share data)
Three
months endedMarch 31,
2024
2023
Revenues $
228,183
$
192,014
Transaction costs (Exclusive of depreciation and
amortization shown separately below and inclusive of $438 and $421
in interest expense and fees associated with related party
transactions during the three months ended March 31, 2024 and 2023,
respectively)
33,966
27,081
Other operating expenses
40,283
40,095
Research and development expenses
32,051
29,280
Sales and marketing expenses
49,890
47,826
General and administrative expenses
24,209
26,681
Depreciation and amortization
9,408
6,039
Total operating expenses
189,807
177,002
Operating income
38,376
15,012
Financial income (expense): Gain (loss) from change
in fair value of Warrants
1,761
(252
)
Other financial income, net
2,747
2,350
Financial income, net
4,508
2,098
Income before taxes on income
42,884
17,110
Taxes on income
13,910
9,172
Net income $
28,974
$
7,938
Other comprehensive income (loss) Unrealized loss on
available-for-sale debt securities, net
(1
)
—
Unrealized gain on cash flow hedges, net
34
—
Tax expense on unrealized gains on cash flow hedges, net
(6
)
—
Other comprehensive income, net of tax
27
—
Comprehensive income $
29,001
$
7,938
Per Share Data Net income per share attributable to
common stockholders — Basic earnings per share $
0.08
$
0.02
— Diluted earnings per share $
0.08
$
0.02
Weighted average common shares outstanding — Basic
359,306,195
360,220,161
Weighted average common shares outstanding — Diluted
378,715,301
388,308,279
Disaggregation of revenue
The following table presents revenue recognized from contracts
with customers as well as revenue from other sources:
Three months endedMarch 31,
2024
2023
Revenue recognized at a point in time $
159,796
$
131,892
Revenue recognized over time
662
7,844
Revenue from contracts with customers $
160,458
$
139,736
Interest income on customer balances $
65,268
$
50,058
Capital advance income
2,457
2,220
Revenue from other sources $
67,725
$
52,278
Total revenues $
228,183
$
192,014
The following table presents the Company’s 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 endedMarch 31,
2024
2023
Primary regional markets Greater China(1) $
81,358
$
63,960
Europe(2)
43,455
38,621
Asia-Pacific(2)
33,365
25,381
North America(3)
23,010
25,536
South Asia, Middle East and North Africa(2)
23,925
19,945
Latin America(2)
23,070
18,571
Total revenues $
228,183
$
192,014
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 the
Company’s country of domicile. Of North America revenues, the US
represents $21,925 and $24,575 during the three months ended March
31, 2024 and 2023, respectively.
TABLE - 2 PAYONEER GLOBAL INC. RECONCILIATION OF
NET INCOME TO ADJUSTED EBITDA (UNAUDITED) (U.S. dollars in
thousands)
Three months ended March 31,
2024
2023
Net income $
28,974
$
7,938
Depreciation and amortization
9,408
6,039
Taxes on income
13,910
9,172
Other financial income, net
(2,747
)
(2,350
)
EBITDA
49,545
20,799
Stock based compensation expenses(1)
15,077
16,927
M&A related expense(2)
2,375
774
Loss (gain) from change in fair value of Warrants(3)
(1,761
)
252
Adjusted EBITDA $
65,236
$
38,752
Three months ended, Mar. 31, 2023 June 30,
2023 Sept. 30, 2023 Dec. 31, 2023 Mar. 31,
2024 Net income (loss) $
7,938
$
45,549
$
12,825
$
27,021
$
28,974
Depreciation and amortization
6,039
5,909
7,116
8,750
9,408
Taxes on income
9,172
5,747
10,012
14,272
13,910
Other financial income, net
(2,350
)
(4,318
)
(1,137
)
(3,763
)
(2,747
)
EBITDA
20,799
52,887
28,816
46,280
49,545
Stock based compensation expenses(1)
16,927
16,173
15,330
17,338
15,077
M&A related expense(2)
774
498
1,745
451
2,375
Loss (gain) from change in fair value of Warrants(3)
252
(13,586
)
7,799
(11,824
)
(1,761
)
Restructuring charges(4)
—
—
4,488
—
—
Adjusted EBITDA $
38,752
$
55,972
$
58,178
$
52,245
$
65,236
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 relate to M&A-related
third-party fees, including related legal, consulting and other
expenditures.
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 our control.
4.
We initiated a plan to reduce our
workforce during the three months ended September 30, 2023, and had
non-recurring costs related to severance and other employee
termination benefits.
TABLE - 3 PAYONEER GLOBAL INC. EARNINGS PER SHARE
(UNAUDITED) (U.S. dollars in thousands, except share and per
share data)
Three months ended March 31,
2024
2023
Numerator: Net income $
28,974
$
7,938
Denominator: Weighted average common shares outstanding — Basic
359,306,195
360,220,161
Add: Dilutive impact of RSUs, ESPP and options to purchase common
stock
18,725,608
27,332,566
Dilutive impact of private Warrants
683,498
755,552
Weighted average common shares — diluted
378,715,301
388,308,279
Net income per share attributable to common stockholders — Basic
earnings per share $
0.08
$
0.02
Diluted earnings per share $
0.08
$
0.02
TABLE - 4 PAYONEER GLOBAL INC. CONSOLIDATED
BALANCE SHEETS (UNAUDITED) (U.S. dollars in thousands, except
share and per share data)
March 31,
December 31,
2024
2023
Assets: Current assets: Cash and cash equivalents $
587,180
$
617,022
Restricted cash
7,907
7,030
Customer funds
5,920,924
6,390,526
Accounts receivable (net of allowance of $360 at March 31, 2024 and
$385 at December 31, 2023)
7,224
7,980
Capital advance receivables (net of allowance of $5,357 at March
31, 2024 and $5,059 at December 31, 2023)
52,133
45,493
Other current assets
40,780
40,672
Total current assets
6,616,148
7,108,723
Non-current assets: Property, equipment and software, net
14,896
15,499
Goodwill
19,889
19,889
Intangible assets, net
82,647
76,266
Restricted cash
6,025
5,780
Deferred taxes
16,688
15,291
Severance pay fund
821
840
Operating lease right-of-use assets
22,567
24,854
Other assets
15,804
15,977
Total assets $
6,795,485
$
7,283,119
Liabilities and shareholders’ equity: Current
liabilities: Trade payables $
35,295
$
33,941
Outstanding operating balances
5,920,924
6,390,526
Other payables
103,927
117,508
Total current liabilities
6,060,146
6,541,975
Non-current liabilities: Long-term debt from related party
14,429
18,411
Warrant liability
6,794
8,555
Other long-term liabilities
52,574
49,905
Total liabilities
6,133,943
6,618,846
Commitments and contingencies Shareholders’
equity: Preferred stock, $0.01 par value, 380,000,000 shares
authorized; no shares were issued and outstanding at March 31, 2024
and December 31, 2023.
—
—
Common stock, $0.01 par value, 3,800,000,000 and 3,800,000,000
shares authorized; 377,294,480 and 368,655,185 shares issued and
355,695,854 and 357,590,493 shares outstanding at March 31, 2024
and December 31, 2023, respectively.
3,773
3,687
Treasury stock at cost, 21,598,626 and 11,064,692 shares as of
March 31, 2024 and December 31, 2023, respectively.
(108,096
)
(56,936
)
Additional paid-in capital
752,236
732,894
Accumulated other comprehensive loss
(149
)
(176
)
Retained earnings (accumulated deficit)
13,778
(15,196
)
Total shareholders’ equity
661,542
664,273
Total liabilities and shareholders’ equity $
6,795,485
$
7,283,119
TABLE - 5 PAYONEER GLOBAL INC. CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED) (U.S. dollars in
thousands)
Three months ended
March 31,
2024
2023
Cash Flows from Operating Activities Net income $
28,974
$
7,938
Adjustment to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
9,408
6,039
Deferred taxes
(1,397
)
1,806
Stock-based compensation expenses
15,077
16,927
Loss (gain) from change in fair value of Warrants
(1,761
)
252
Foreign currency re-measurement loss (gain)
1,541
(416
)
Changes in operating assets and liabilities: Other current
assets
(11
)
(8,159
)
Trade payables
1,465
(10,090
)
Deferred revenue
(28
)
323
Accounts receivable, net
756
2,047
Capital advance extended to customers
(80,173
)
(71,184
)
Capital advance collected from customers
73,533
66,266
Other payables
(12,528
)
(10,414
)
Other long-term liabilities
2,669
(635
)
Operating lease right-of-use assets
2,287
2,335
Interest and amortization of discount on investments
(474
)
—
Other assets
172
867
Net cash provided by operating activities
39,510
3,902
Cash Flows from Investing Activities Purchase of
property, equipment and software
(1,616
)
(1,764
)
Capitalization of internal use software
(14,055
)
(7,588
)
Severance pay fund distributions, net
19
23
Customer funds in transit, net
154
(53,628
)
Purchases of investments in available-for-sale debt securities
(118,649
)
—
Maturities and sales of investments in available-for-sale debt
securities
20,000
—
Net cash inflow from acquisition of remaining interest in joint
venture
—
5,953
Net cash used in investing activities
(114,147
)
(57,004
)
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
3,432
5,865
Outstanding operating balances, net
(469,602
)
(371,338
)
Borrowings under related party facility
5,378
9,842
Repayments under related party facility
(9,360
)
(8,859
)
Common stock repurchased
(50,961
)
—
Net cash used in financing activities
(521,113
)
(364,490
)
Effect of exchange rate changes on cash and cash
equivalents
(1,541
)
515
Net change in cash, cash equivalents, restricted cash and
customer funds
(597,291
)
(417,077
)
Cash, cash equivalents, restricted cash and customer funds at
beginning of period
7,018,367
6,386,720
Cash, cash equivalents, restricted cash and customer funds at
end of period $
6,421,076
$
5,969,643
Supplemental information of investing and financing activities
not involving cash flows: Property, equipment, and software
acquired but not paid $
700
$
400
Internal use software capitalized but not paid $
5,216
$
2,609
Common stock repurchased but not paid $
1,699
$
—
Right of use assets obtained in exchange for new operating lease
liabilities $
—
$
2,298
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240508150929/en/
Investors: Michelle Wang investor@payoneer.com
Media: Alison Dahlman PR@payoneer.com
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