Payoneer Global Inc. · NASDAQ:PAYO
Payoneer Global — Q3 2024 Earnings Presentation
28 slides from Payoneer Global's earnings presentation, Nov 5, 2024
Slide 1: Q3 2024 Earnings Presentation
NASDAQ:PAYO | November 5, 2024
Slide 2: Disclaimers
Disclaimers This presentation does not constitute an offer to sell, a solicitation of an Non-GAAP Financial Measures Other companies may calculate the above measure differently, and offer to buy, or a recommendation to purchase any security. You should therefore Payoneer’s measures may not be direct
Slide 3: Payoneer's mission
Payoneer’s mission: Connect the world’s underserved businesses to a rising, global economy 3
Slide 4: SMBs want to grow globally but transacting across borders is complex
SMBs want to grow globally but transacting across borders is complex, especially from emerging markets Can’t get paid Can’t pay Can’t get capital • My U.S. customers don’t want to send an • I want to match the currencies of my revenue • Why don't local lenders underwrite international money transfer
Slide 5: 80 million underserved SMBs
80 million underserved SMBs Need cross-border, B2B financial solutions designed for small businesses Global Banks Fintech Local banks Underserve small businesses Primarily for P2P, and Underserve cross-border needs with limited geographies Source: Third-party research. 5
Slide 6: Payoneer serves diverse customer types and helps SMBs in fast growing markets
Payoneer serves diverse customer types and helps SMBs in the fastest growing markets do business globally Contractors and Consumer goods Service Goods traders freelancers sellers providers and manufacturers Pedro, Contractor Kevin, Elegoo Hannah, Accentline Serhii, Ukragroenergyinvest Brazil China P
Slide 7: We have unique assets and infrastructure
We have unique assets and infrastructure Scaled platform • Financial services institution regulated across key markets, including US, Europe, Hong Kong, Japan, Australia, Singapore, UK • Ability to onboard customers from 190+ countries and territories • Nearly 100 banking providers and payment servi
Slide 8: We are pursuing a $6 trillion opportunity
We are pursuing a $6 trillion opportunity Audiences Manufacturers Services SMBs Goods merchants Contractors / freelancers Payoneer has ~20% share, Payoneer has <0.1% share, Payoneer has <1% share, 5% CAGR (2021-2023) 400%+ growth in 2023 20% CAGR (2021-2023) Marketplace SMB Consumers SMB SMB Busines
Slide 9: Multi-currency financial stack optimized for the global SMB
Payoneer is the multi-currency financial stack optimized for the global SMB Collect accounts receivable Access opportunity globally Manage accounts payable B2B invoice Payoneer card B2B load funds Financial stack Withdraw money for global SMBs to bank account Marketplace payout Manage and optimize f
Slide 10: ~2M customers use our cross-border AR, cash management, and AP solutions
~2M customers use our cross-border accounts receivable, cash management, and accounts payable solutions Accounts Receivable Cash Management Accounts Payable B2B invoice Treasury Payoneer card B2B load funds Currency management Withdraw to bank account Marketplace payout Intranetwork payments Pay ven
Slide 11: 25% volume growth in 3Q 2024 across diverse channels
25% volume growth in 3Q 2024 driven by the diverse channels our customers sell through Enterprise volume direct to SMB customer volume into Payoneer Accounts bank account Marketplace: B2B: Merchant services (Checkout): Enterprise payouts: Defend our market leading Accelerate growth in a massive Expa
Slide 12: Significant volume acceleration with marketplace SMBs and B2B
We are driving significant volume acceleration with both SMBs that sell on marketplaces and B2B Total volume SMBs that sell on marketplaces volume B2B volume 25% 57% 22% 21% 40% 16% 17% 33% 15% 11% 12% 13% $2.8 9% 13% $2.5 7% 7% 7% $20.4 5% 3% 1% $2.2 $2.2 $19.0 $11.8 $12.0 (2%) $18.5 $18.7 $11.4 $1
Slide 13: Increased customer funds and the interest income we earn on it
We are trusted and have significantly increased our customer funds and the interest income we earn on it • $231M of interest income earned on customer Interest Income Earned on Customer Funds funds in FY 2023 and $196M earned YTD ‘24 Average Effective Federal Funds Rate: • 80%+ of customer funds are
Slide 14: Proven track record of cross-selling accounts payable capabilities
Proven track record of cross-selling our accounts payable (AP) capabilities Usage by number of products used by a customer 36% 34% 33% 32% 32% 30% 31% 29% 28% Larger SMBs have more 1 AP product 38% 38% complex AP needs. 21% 22% 20% 20% 20% 22% 22% As we enhance our 22% 2 AP products 22% 22% 23% prod
Slide 15: Focus on Ideal Customer Profiles
We are focused on our Ideal Customer Profiles (ICPs) because they represent the vast majority our revenue Customers % of total revenue 54K >50% $10K+/month ICPs 557K Active ICPs1 503K ~25% $500-$10K/month ICPs 1.4M <10% <$500/month non-ICPs Active non-ICPs 1.99M active customers ~90% + Enterprise pa
Slide 16: ICP growth is diversified across regions and by size
Our ICP growth is diversified across regions and by size Active ICPs by region (‘000s) Active ICPs by size (‘000s) 557 557 +2% 502 75 502 54 YoY 63 53 105 +14% 98 YoY in higher take rate regions 133 114 503 +12% 449 YoY 97 110 102 101 29 33 3Q23 3Q24 3Q23 3Q24 N. America Europe China APAC SAMEA LATA
Slide 17: Revenue growth reflects accelerating momentum
Revenue growth reflects accelerating momentum Total Revenue ($M) Revenue excluding interest income and onboarding fees from an enterprise client1 ($M) 19% $248 $240 $228 $183 $224 $174 $208 $159 $163 $148 24% 21% 21% 14% 8% 3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4Q23 1Q24 2Q24 3Q24 Year-over-year growth rate
Slide 18: Consistently expanding our SMB take rate
Consistently expanding our SMB take rate, driven by monetization initiatives and mix shift toward higher take rate products and regions 23 bps expansion of SMB customer take rate since 2021 1.10% 1.11% 1.09% 1.08% 1.09% 1.06% 1.07% 1.03% 1.04% 1.00% 0.97% 0.96% 0.95% 0.90% 0.86% 1Q21 2Q21 3Q21 4Q21
Slide 19: Delivering operating leverage as transaction costs increase
We are delivering operating leverage even as transaction costs increase due to business mix shift Transaction cost as a percentage of revenue Adj. EBITDA ($M) and adj. EBITDA margin (%) 16.2% 14.9% 15.4% 15.3% 14.6% $73 $69 $65 $58 30% 28% $52 29% 28% 23% 3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4Q23 1Q24 2Q24
Slide 20: Our strategy for profitable growth
Our strategy for profitable growth Efficient go-to-market Comprehensive financial Optimized operations and approach for ICP stack for ARPU growth capital allocation acquisition and retention and TAM capture Adj. EBITDA ($M) and adj. EBITDA margin (%) + + $205 Organic 25% Partnerships 8% 6% 2% $48 Sa
Slide 21: Strong cash flow generation enables capital return to shareholders
Our strong cash flow generation enables us to return capital to shareholders and maintain strategic flexibility Operating cash flows ($M) $131M $119M $534M $159 Operating Share Cash and cash $131 cash flows1 repurchases1 equivalents $101 $84 $20 2021 2022 2023 YTD 2023 YTD 2024 Data as of September
Slide 22: 2024 full year guidance as of November 5, 2024
2024 full year guidance as of November 5, 2024 $950-960M ~16.0% $255-265M Revenue Transaction costs as a % of Adjusted EBITDA1 revenue 1. Please refer to “Non-GAAP Financial Measures” in slide 2 of this presentation. Guidance for fiscal year, where adjusted, is provided on a non-GAAP basis, which Pa
Slide 23: Our roadmap to profitable growth
Our roadmap to profitable growth . Medium-term Long-term (Through 2026) (Beyond 2026) Mid-teens 20%+ Revenue growth Revenue growth 25% 25% Adjusted EBITDA margin Adjusted EBITDA margin 23
Slide 24: Appendix
Appendix OPayoneer
Slide 25: Volume and revenue trends
Volume and revenue trends Volume ($M) 3Q23 4Q23 1Q24 2Q24 3Q24 YoY QoQ SMBs that sell on marketplaces $10,261 $11,777 $11,002 $11,403 $11,983 17% 5% B2B SMBs 1,781 2,156 2,232 2,467 2,802 57% 14% Merchant services 63 102 92 119 153 142% 28% Further acceleration in B2B volume growth SMB customer volu
Slide 26: ICP and revenue by region trends
ICP and revenue by region trends Active ICPs ('000s) 3Q23 4Q23 1Q24 2Q24 3Q24 YoY QoQ By size: $500-$10K/month 449 461 473 492 503 12% 2% $10K+/month 53 55 57 55 54 2% -1% Total 502 516 530 547 557 11% 2% Year-over-year volume growth by customer size: $500-$10K/month 2% 5% 8% 10% 11% 900 bps 100 bps
Slide 27: Reconciliation of net income (loss) to adjusted EBITDA
Reconciliation of net income (loss) to adjusted EBITDA Twelve months ended, ($ in thousands) Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Net income (loss) $ (23,746) $ (33,987) $ (11,970) $ 93,333 Depreciation & amortization 17,095 17,997 20,858 27,814 Tax expense on income 8,320 8,711 1
Slide 28: Thank You
Thank You