Paysafe Limited · NYSE:PSFE
Paysafe — Q4 2023 Earnings Presentation
30 slides from Paysafe's earnings presentation, Feb 28, 2024
Slide 1: Fourth Quarter 2023 Earnings
Fourth Quarter 2023 Earnings March 7, 2024
Slide 2: Forward-looking statements and non-GAAP financial measures
Forward-looking statements and non-GAAP financial measures Forward-Looking Statements This presentation and today’s webcast include “forward-looking statements” within the meaning of U.S. federal securities laws. These forward-looking statements are provided for illustrative purposes only and are no
Slide 3: Summary: Full year 2023 financial highlights
Summary Q4'23 FullYear Full Year 2023 2023 Volume Volume Full year 2023 financial highlights $36bn $140bn +8% YoY +8% YoY • Achieved 2023 guidance Revenue Revenue • Revenue growth improved to +7% compared to +1% in FY22 $415m $1,601m +8% YoY; +6% CC1 +7% YoY; +6% CC1 • Adj. EBITDA +12%; margin +120
Slide 4: 2023 achievements
2023 achievements Transformed Enhanced Improved Progressed Strengthened sales strategy customer wallet growth/ product vision financial experience engagement results 3-month actives ~10% expansion of our ~160 enterprise wins #2 J.D. Power* 0.93m (+7% Q4) enterprise-wide LPMs Revenue +7% ~100% NRR 35
Slide 5: 2023 progress on the first phase of our turnaround
2023 progress on the first phase of our turnaround Revenue Growth (nominal, YoY) Total Revenue Growth SMB (ISO) 11% 11% 7% 8% 4% Focus areas for next phase 1% 2021 2022 2023 2021 2022 2023 • SMB (Direct): (2%) decline 2023 e-comm Classic Digital Wallet* • eCash*: +2% growth 2023 29% 16% (3%) (13%) (
Slide 6: Building on 2023 success, investing in sales capabilities to accelerate growth and scale
Building on 2023 success, investing in sales capabilities to accelerate growth and scale Q4 select deals 2024 priorities (~50 enterprise wins) Hiring ~170 salespeople supporting all targeted verticals (Enterprise and SMB) SMB territory Portfolio expansion optimization e.g., targeting expansion to 4
Slide 7: Business Wallet
Business Wallet Roadmap to help small businesses with easy and convenient ways to move money, through intuitive digital experiences Simplicity – Make Control – Keep Transparency – Help things easy and track of my me understand my efficient so I can business and business and focus on what I do financ
Slide 8: Classic Digital Wallet
Classic Digital Wallet Growth in active users, TPA and ARPU Driving active Average Transactions per Active User (TPA) TPA based on 3-month active users user growth +29% 31 33 ◆ Redesigned Skrill and 27 28 NETELLER apps 26 +14% ◆ Optimized sign-up journeys for cc Revenue growth2 YoY conversion and fi
Slide 9: Successful 'top of funnel' campaign contributes to highest sign-up volume in 20 months
Successful ‘top of funnel’ campaign contributes to highest sign-up volume in 20 months Two European Countries: ‘Top of Funnel’ Campaign Test 3 campaign objectives Transforming acquisition double-digit growth in Skrill new funded accounts* YoY Focused on 11 new awareness 45,000 New funded accounts Ne
Slide 10: 2024 priorities
2024 priorities Continue executing on key actions Focus areas for the next phase of taken in 2023 our turnaround in 2024 Digital Wallet SMB (Direct) • Enhancements to product and experience • Optimize portfolio • Enhance marketing & consumer • Expand value-added service acquisition Expand Sales Opti
Slide 11: Focus areas of incremental spend in 2024
Focus areas of incremental spend in 2024 Key investments • Growing headcount to expand the reach Sales Initiatives of our sales transformation • Enterprise and SMB Focused investments to drive growth in target verticals, while enhancing client experience • Modernize and expand capabilities, and oper
Slide 12: Q4 and 2023 Financial Results
Q4 and 2023 Financial Results
Slide 13: Q4 financial highlights
Q4 financial highlights Volume1 ($bn) Revenue ($m) Adj. EBITDA3 ($m) uFCF3 ($m) Adj. Net Income3 ($m) +8% +13% +8% +6% cc2 +11% cc2 -10% +23% $35.8 $33.1 $414.5 $121.7 $383.6 $99.9 $107.6 $89.6 $40.9 $33.1 28.0% 29.8% margin margin 93% 74% 1.2% 1.2% 28.0% 29.4% conversion conversion $0.54 $0.66 take
Slide 14: 2023 full year financial highlights
2023 full year financial highlights Volume1 ($bn) Revenue ($m) Adj. EBITDA3 ($m) uFCF3 ($m) Adj. Net Income3 ($m) +8% +7% +12% +8% +6% cc2 +11% cc2 +5% $140.2 $1,601.1 $130.1 $458.7 $318.3 $1,496.1 $295.8 $143.9 $410.0 $137.0 72% 69% 1.1% 1.1% 27.4% 28.6% conversion conversion $2.25 $0.54 $2.33 take
Slide 15: Merchant Solutions
Merchant Solutions Volume ($bn) Revenue ($m) Adj. EBITDA ($m) +8% +8% +9% +7% +11% +11% +12% cc $118.7 $878.3 $222.2 $110.1 $817.4 $200.3 $30.2 $227.3 $28.0 $208.5 $56.6 $51.0 0.74% 0.75% 0.74% 0.74% 24.5% 24.9% 24.5% 25.3% take rate take rate take rate take rate margin margin margin margin Q4 2022
Slide 16: Digital Wallets
Digital Wallets Volume ($bn) Revenue ($m) Adj. EBITDA ($m) +8% +7% +7% +10% +13% +9% +3% cc +5% cc +2% cc +8% cc $22.4 $191.3 $734.7 $20.6 $177.1 $686.2 $318.7 $82.4 $289.4 $5.3 $6.0 $77.1 3.4% 3.2% 3.3% 3.3% 43.5% 43.1% 42.2% 43.4% take rate take rate take rate take rate margin margin margin margin
Slide 17: Continued focus on reducing leverage and disciplined capital allocation
Continued focus on reducing leverage and disciplined capital allocation Liquidity position ($m) 12/31/23 Committed RCF(1) $305 Amounts drawn (36) • Total debt $2,502m vs. $2,643m at 2022 year-end Cash and cash equivalents 202 Total $471 • $174m debt repayments/repurchases during 2023 • No upcoming b
Slide 18: 2024 Guidance
2024 Guidance $millions 2024 FY Guidance Revenue $1,688 – $1,712 • >6% revenue growth at midpoint reflects higher quality of revenue Year-over-year growth +5.5% to +7% • Efficiencies and cost discipline offsets gross margin headwind (driven by mix), and partially absorbs investments • Approximate FX
Slide 19: A leading payments provider
Driving higher NRR, A leading Attractive footprint in Scarce and attractive cross-selling, and new payments provider high value verticals two-sided network client wins Improved execution Robust cash flow Creating personalized Strong operating with stronger core conversion to de- solutions for the le
Slide 20: Appendix
Appendix 20
Slide 21: Summary of segment results
Summary of segment results 2022 2023 Q1 Q2 Q3 Q4 FY2022 Q1 Q2 Q3 Q4 FY2023 Volume ($m) Merchant Solutions $ 25,862 $ 28,392 $ 27,826 $ 28,000 $ 110,080 $ 28,571 $ 30,301 $ 29,644 $ 30,159 $ 118,675 Digital Wallets 5,444 5,095 4,786 5,278 20,603 5,443 5,394 5,645 5,963 22,445 Intersegment (137) (126)
Slide 22: 2024 other assumptions
2024 other assumptions $millions assumptions for Adj. EPS Interest expense, net $135 – $140 • D&A excludes amortization of acquired intangibles Depreciation and amortization $135 - $140 • Other operating income excludes the impact of Other operating Income other non-operating income and expenses suc
Slide 23: Statement regarding non-GAAP financial measures
Statement regarding non-GAAP financial measures This presentation also contains non-GAAP financial information. Paysafe management believes the presentation of these non-GAAP financial measures, when considered together with the Company’s results presented in accordance with GAAP, provide users with
Slide 24: Reconciliation of GAAP Gross Profit to Gross Profit (excl. D&A)
Reconciliation of GAAP Gross Profit to Gross Profit (excl. D&A) Three Months Ended Year Ended December 31, December 31, ($ in thousands) 2023 2022 2023 2022 Revenue $ 414,541 $ 383,568 $ 1,601,138 $ 1,496,137 Cost of services (excluding depreciation and amortization) 173,582 156,125 663,212 614,025
Slide 25: Reconciliation of GAAP Net income (loss) to Adj. EBITDA
Reconciliation of GAAP Net income (loss) to Adj. EBITDA Three Months Ended Year Ended December 31, December 31, ($ in thousands) 2023 2022 2023 2022 Net loss $ (12,129) $ (33,711) $ (20,251) $ (1,862,284) Income tax expense / (benefit) 13,398 247 40,840 (52,502) Interest expense, net 38,509 37,615 1
Slide 26: Reconciliation of GAAP net income (loss) to Adj. net income
Reconciliation of GAAP net income (loss) to Adj. net income Three Months Ended Year Ended December 31, December 31, ($ in thousands) 2023 2022 2023 2022 Net loss attributable to the Company $ (12,129) $ (33,711) $ (20,251) $ (1,862,655) Other non operating expense / (income), net (1) 9,539 14,438 (3
Slide 27: Supplemental: Adj. EBITDA to Adj. net income reconciliation
Supplemental: Adj. EBITDA to Adj. net income reconciliation Three months ended Year ended December December 31, 31, ($ in Thousands) 2023 2022 2023 2022 Adj. EBITDA $ 121,741 $ 107,561 $ 458,663 $ 409,951 Depreciation and amortisation (1) 32,856 27,406 128,040 99,474 Other operating (income) / expen
Slide 28: Net income (loss) per share: Adjusted and GAAP
Net income (loss) per share: Adjusted and GAAP Three Months Ended Year Ended December 31, December 31, 2023 2022 2023 2022 Numerator ($ in thousands) Adjusted net income attributable to the Company - basic $ 40,862 $ 33,089 $ 143,888 $ 137,043 Adjusted net income attributable to the Company - dilute
Slide 29: Reconciliation of Operating Cash Flow to Unlevered Free Cash Flow
Reconciliation of Operating Cash Flow to Unlevered Free Cash Flow Three Months Ended Year Ended December 31, December 31, ($ in thousands) 2023 2022 (1) 2023 2022 (1) Net cash inflows from operating activities $ 61,592 $ 64,145 $ 234,022 $ 237,201 Capital expenditure (20,646) (23,915) (102,168) (93,
Slide 30: Thank You
Thank You 30