LONDON–(BUSINESS WIRE)–Paysafe Limited (“Paysafe” or the “Company”) (NYSE: PSFE), a leading payments platform, today announced its financial results for the third quarter of 2023.
Third Quarter 2023 Financial Highlights
(Metrics compared to third quarter of 2022)
- Revenue of $396.4 million, increased 8%; increased 5% on a constant currency basis
- Total Payment Volume of $35.1 billion1, increased 8%
- Net loss attributable to the Company of $2.5 million, or ($0.04) per diluted share, compared to $1.0 million net income attributable to the Company, or $0.02 per diluted share
- Adjusted net income of $35.3 million, or $0.57 per diluted share, compared to $29.2 million, or $0.48 per diluted share
- Adjusted EBITDA of $116.1 million, increased 22%; increased 18% on a constant currency basis
- Net leverage2 decreased to 5.1x as of September 30, 2023, compared to 5.8x as of December 31, 2022
Bruce Lowthers, CEO of Paysafe, commented: “Paysafe has continued to build momentum through the third quarter led by double-digit growth from our e-commerce solutions and classic digital wallets. Overall, our third quarter results reflect 8% year-over-year revenue growth, 22% Adjusted EBITDA growth and accelerated leverage reduction. These results reaffirm that the execution of our playbook is working and providing the foundation for us to deliver on our strategic initiatives and commitment to achieving our mid-term growth targets. I want to thank our extraordinary team for all their hard work as we continue to realign Paysafe in its pursuit of operational excellence.”
Strategic and Operational Highlights
- Announced that Paysafe’s Board has authorized a $50 million share repurchase program
- Delivered fifth consecutive year-over-year quarterly revenue growth
- Continued to progress Paysafe’s sales transformation, fueling growth in enterprise-level bookings
- Advanced Paysafe’s priorities across client experience and product innovation, including continued improvement to branded wallet portfolio, enhancing customer journey and merchant checkout experience, as well as leveraging our wallet platform to drive value, scale and expanded use cases
- Announced a new partnership with Fanatics Betting and Gaming to offer its customers traditional card payments alongside a full suite of alternative payment methods
- Won ‘Best Digital Wallet’ and highly acclaimed for ‘Best Payments led Financial Inclusion Initiative’ by The Digital Banker’s Global Payments Innovation Awards 2023
- Recognized by CNBC’s list of the World’s Top FinTech Companies (Digital Payments)
- Won 2023 ‘Payment Provider of the Year’ by Gambling.com and the American Gambling Awards
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(1) |
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Excludes embedded wallet related volumes of $3.9 billion and $10.4 billion in the third quarter of 2023 and 2022, respectively. |
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(2) |
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Paysafe defines net leverage as the calculation of net debt (total debt less cash and cash equivalents) divided by the sum of the last twelve months (LTM) of Adjusted EBITDA. For the period ending September 30, 2023, total debt was $2,514.7 million and cash and cash equivalents was $226.5 million, and LTM Adjusted EBITDA was $444.5 million, respectively. For the period ending December 31, 2022, total debt was $2,643.5 million and cash and equivalents was $260.2 million, and LTM Adjusted EBITDA was $410.0 million, respectively. |
Third Quarter of 2023 Summary of Consolidated Results
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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($ in thousands) (unaudited) |
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2023 |
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2022 |
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2023 |
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2022 |
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||||
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Revenue |
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$ |
396,410 |
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|
$ |
365,988 |
|
|
$ |
1,186,597 |
|
|
$ |
1,112,569 |
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Gross Profit (excluding depreciation and amortization) |
|
$ |
232,333 |
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|
$ |
214,178 |
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$ |
696,967 |
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$ |
654,669 |
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Net (loss) / income attributable to the Company |
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$ |
(2,549 |
) |
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$ |
978 |
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$ |
(8,122 |
) |
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$ |
(1,828,944 |
) |
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||||
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Adjusted EBITDA |
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$ |
116,076 |
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$ |
95,470 |
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$ |
336,922 |
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$ |
302,390 |
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Adjusted EBITDA margin |
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29.3 |
% |
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26.1 |
% |
|
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28.4 |
% |
|
|
27.2 |
% |
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Adjusted net income attributable to the Company |
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$ |
35,272 |
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$ |
29,152 |
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|
$ |
103,026 |
|
|
$ |
103,954 |
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Total revenue for the third quarter of 2023 was $396.4 million, an increase of 8%, compared to $366.0 million in the prior year period, reflecting 8% growth in total payment volume. Excluding an $11.9 million favorable impact from changes in foreign exchange rates, total revenue increased 5%. Revenue from the Merchant Solutions segment increased 6%, led by double-digit growth from e-commerce solutions. Revenue from the Digital Wallets segment increased 12% on a reported basis and 5% on a constant currency basis, as a decline from eCash solutions was more than offset by double-digit growth from classic digital wallets, partly reflecting the Company’s initiatives to increase consumer engagement and merchant checkout conversion rates. Growth from the Digital Wallets segment was also supported by new product features and interest revenue on consumer deposits.
Net loss attributable to the Company for the third quarter was $2.5 million, compared to net income of $1.0 million in the prior year period. The decrease in net income reflects an increase in operating income, which was offset by a reduction in other income as a result of foreign exchange and fair value adjustments.
Adjusted net income for the third quarter increased 21% to $35.3 million, compared to $29.2 million in the prior year period as strong growth in Adjusted EBITDA more than offset higher expenses related to depreciation and amortization, interest and taxes.
Adjusted EBITDA for the third quarter was $116.1 million, an increase of 22%, compared to $95.5 million in the prior year period. Excluding a $3.4 million favorable impact from changes in foreign exchange rates, Adjusted EBITDA increased 18% compared to the prior year period. Adjusted EBITDA margin for the third quarter increased 320 basis points to 29.3%, compared to 26.1% in the prior year period, reflecting lower credit losses and operating leverage.
Third quarter net cash used in operating activities was $2.5 million, compared to $6.2 million in the prior year period, mainly reflecting the timing of working capital, as well as settlement of funds payable and amounts due to customers. Free cash flow was $105.3 million, compared to $106.5 million in the prior year period, which includes the movement in customer accounts and other restricted cash which was an increase of $99.8 million in the third quarter of 2023, compared to an increase of $110.0 million in the prior year period.
Balance Sheet
As of September 30, 2023, total cash and cash equivalents were $226.5 million, total debt was $2.5 billion and net debt was $2.3 billion. Compared to June 30, 2023, total debt decreased by $61.0 million, reflecting net repayments of $22 million as well as movement in foreign exchange rates.
Summary of Segment Results
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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YoY |
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September 30, |
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YoY |
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($ in thousands) (unaudited) |
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2023 |
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2022 |
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change |
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2023 |
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2022 |
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change |
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Revenue: |
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Merchant Solutions |
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$ |
216,847 |
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