Payoneer Global Inc. · NASDAQ:PAYO
Payoneer Global — Q2 2024 Earnings Presentation
27 slides from Payoneer Global's earnings presentation, Aug 7, 2024
Slide 1: 2Q 2024 Investor Presentation
2Q 2024 Investor Presentation NASDAQ:PAYO | August 7, 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 cross-border transacting 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 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: 22% volume growth in 2Q 2024 across diverse channels
22% volume growth in 2Q 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: Customer funds and the interest income we earn on them
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 $131M earned in 1H 2024 Average Effective Federal Funds Rate: • 80%+ of customer funds
Slide 13: 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% Larger SMBs have more 1 AP product 38% 38% complex AP needs. 21% 22% 20% 20% 20% 22% As we enhance our 22% 2 AP products 22% 22% 23% product capa
Slide 14: 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 55K >50% $10K+/month ICPs 547K Active ICPs1 492K ~25% $500-$10K/month ICPs Active non-ICPs 1.4M <10% <$500/month non-ICPs 1.98M active customers ~90% + Enterprise pa
Slide 15: ICP growth diversified across regions and by size
Our ICP growth is diversified across regions and by size Active ICPs by region (‘000s) Active ICPs by size (‘000s) 547 547 495 +7% 72 495 55 YoY 62 52 105 +16% 94 YoY in higher take rate regions 130 109 492 +11% 443 YoY 95 107 106 101 29 31 2Q23 2Q24 2Q23 2Q24 N. America Europe China APAC SAMEA LATA
Slide 16: Revenue growth reflects accelerating momentum
Revenue growth reflects accelerating momentum Total Revenue ($M) Revenue excluding interest income and onboarding fees from an enterprise client1 ($M) 16% $240 $228 $224 $174 $208 $159 $163 $207 $144 $148 21% 21% 14% 8% 5% 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4Q23 1Q24 2Q24 Year-over-year growth rate
Slide 17: Operating leverage as transaction costs increase
We are delivering operating leverage even as transaction costs increase due to business mix shift Transaction cost as a percentage of revenue Adj. EBITDA ($M) and adj. EBITDA margin (%) 16.2% 30% 14.9% 15.4% $73 14.6% 13.8% $65 $58 $56 $52 30% 27% 28% 29% 23% 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4Q23
Slide 18: Our strategy for profitable growth
Our strategy for profitable growth Efficient go-to-market Comprehensive financial Optimized operations and approach for ICP stack for ARPU growth capital allocation acquisition and retention and TAM capture Adj. EBITDA ($M) and adj. EBITDA margin (%) + + $205 Organic 25% Partnerships 8% 6% 2% $48 Sa
Slide 19: Cash flow generation enables capital returns to shareholders
Our strong cash flow generation enables us to return capital to shareholders and maintain strategic flexibility Operating cash flows ($M) $81M $98M $576M $159 Operating Share Cash and cash cash flows1 repurchases1 equivalents $84 $81 $60 $20 2021 2022 2023 1H 2023 1H 2024 Data as of June 30, 2024. 1
Slide 20: M&A update: acquisition of Skuad
M&A update: Payoneer expands into global workforce and payroll management for SMBs with the acquisition of Skuad Skuad Overview Strategic Rationale Transaction Terms • Global workforce and payroll • Accelerates Payoneer’s strategy to • $61 million cash, subject to management company headquartered de
Slide 21: 2024 full year guidance
2024 full year guidance as of August 7, 2024 $920-930M ~16.5% $225-235M Revenue Transaction costs as a % of Adjusted EBITDA1 revenue Guidance for fiscal year, where adjusted, is provided on a non-GAAP basis, which Payoneer will continue to identify as it reports its future financial results. The Com
Slide 22: Our roadmap to profitable growth
Our roadmap to profitable growth . Medium-term Long-term (Through 2026) (Beyond 2026) Mid-teens 20%+ Revenue growth Revenue growth 25% 25% Adjusted EBITDA margin Adjusted EBITDA margin 22
Slide 23: Appendix
Appendix OPayoneer
Slide 24: Volume and revenue trends
Volume and revenue trends Volume ($M) 2Q23 3Q23 4Q23 1Q24 2Q24 YoY QoQ SMBs that sell on marketplaces $9,921 $10,261 $11,777 $11,002 $11,403 15% 4% B2B SMBs 1,759 1,781 2,156 2,232 2,467 40% 11% Merchant services 41 63 102 92 119 192% 29% Further acceleration in B2B volume growth SMB customer volume
Slide 25: ICP and revenue by region trends
ICP and revenue by region trends Active ICPs ('000s) 2Q23 3Q23 4Q23 1Q24 2Q24 YoY QoQ By size: $500-$10K/month 443 449 461 473 492 11% 4% $10K+/month 52 53 55 57 55 7% -3% Total 495 502 516 530 547 10% 3% By primary regional market: APAC 109 114 121 127 130 19% 3% Europe 106 102 100 102 101 -4% -1%
Slide 26: Reconciliation of net income (loss) to adjusted EBITDA
Reconciliation of net income (loss) to adjusted EBITDA Twelve months ended, ($ 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 Taxes on income 8,320 8,711 13,586
Slide 27: Thank You
Thank You