Paysafe Limited · NYSE:PSFE
Paysafe — Q2 2024 Earnings Presentation
26 slides from Paysafe's earnings presentation, Aug 13, 2024
Slide 1: Second Quarter 2024 Earnings
Second Quarter 2024 Earnings August 13, 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
Summary Volume Revenue Adj. EBITDA Adj. Net Income Net Leverage $38bn $440m $119m $36m 4.8x +7% YoY +9% YoY; 10% cc1 27% margin Adj. EPS $0.59; +5% YoY Versus 5.6x June-23 Raising 2024 Revenue Guidance ❖ Revenue: Merchant Solutions +13% and Digital Wallets +6% ❖ Sales and portfolio optimization init
Slide 4: Q2 update: Strong Progress on 2024 Priorities
Q2 update: Strong Progress on 2024 Priorities Expand Sales Revamp Consumer Capabilities Acquisition 104 YTD new hires to sales team Esports tournament partnership with strategic gaming partner, Riot Games. On Track On Track Expanding Geography +4% Deals in 30 different states YoY Classical DW growth
Slide 5: Merchant Solutions KPIs
Merchant Solutions KPIs MS KPIs ❖Volume +8% YoY ❖Take Rate 0.78% from 0.74% +13% YoY ❖Billable MIDs Flat YoY Revenue growth driven by eComm ❖Cross-Selling 30% of new wins ❖NRR 103% ❖SMB Direct +10% YoY ❖Rev per new merchant +5% YoY 5
Slide 6: Winning in iGaming, strengthening product suite
Winning in iGaming, strengthening product suite 15% Growth in Q2 Global 18 deals in iGaming +50% NA iGaming iGaming YoY Revenue (+64% YoY) Revenue YoY Growth Growth Accelerating1 ❖ North America iGaming benefited from merchant wins in 3Q23 & 4Q23 (e.g. Underdog Fantasy, Fanatics & Hard Rock Bet) ❖ 7
Slide 7: Digital Wallets KPIs
Digital Wallets KPIs Average transactions per active user (TPA) TPA based on 3-month active users2 +20% 14 12 13 7m 12 12 3-month Active Users 2Q’23 3Q’23 4Q’23 1Q’24 2Q’24 Flat YoY – in line with seasonality $17.60 Consumer Acquisition Cost (CAC) 3 Average revenue per user (ARPU)1 ARPU based on 3-m
Slide 8: 2Q24 Financial Results
2Q24 Financial Results
Slide 9: Q2 financial highlights
Q2 financial highlights Volume ($bn) Revenue ($m) Adj. EBITDA2 ($m) LTM uFCF2 ($m) Adj. Net Income2 ($m) +7% +9% +5% +16% +5% +10% cc1 +6% cc1 $38.1 $439.9 $119.0 $339.1 $35.5 $402.3 $113.0 $36.3 $292.6 $34.7 69% 72% 1.1% 1.2% 28.1% 27.1% conversion conversion $0.56 $0.59 take rate take rate margin
Slide 10: Merchant Solutions
Merchant Solutions Volume ($bn) Revenue ($m) Adj. EBITDA ($m) • Strong performance driven by +8% +13% +1% continued robust e-commerce volumes (e.g. iGaming) $32.7 • Adj. EBITDA margin decline $30.3 mainly reflects the investments $225.7 $255.0 in initiatives and higher commissions paid given $55.8 $
Slide 11: Digital Wallets
Digital Wallets Volume ($bn) Revenue ($m) Adj. EBITDA ($m) • Reflects continued growth +6% +7% from strong sales related to +6% +7% cc1 +8% cc1 product and engagement initiatives, plus strong results in $5.7 iGaming $5.4 $189.7 $179.1 • Adj. EBITDA margin remains $82.4 stable $77.2 3.3% 3.3% 43.1% 4
Slide 12: Continued to reduce leverage and invest in the business, while also repurchasing shares
Continued to reduce leverage and invest in the business, while also repurchasing shares Liquidity position ($m) 6/30/24 Committed RCF(1) $305 Amounts drawn (96) • Net Debt in Q2 decreased by $26m Cash and cash equivalents 222 Total $431 • Avg. interest rate (incl. interest rate swap) at ~5.8% as of
Slide 13: Updating 2024 Guidance
Updating 2024 Guidance $Millions Updated 2024 Outlook Prior 2024 Outlook 2H24 Considerations • >7.5% revenue growth at mid- Revenue $1,713 to $1,729 $1,688 to $1,712 Mid-point: +6.5% point continue progress on YoY: 7% to 8% YoY: +5.5% to +7% YoY initiatives and operational execution $471 to $484 $47
Slide 14: Driving a Successful Turnaround
Driving a Successful Turnaround Volume ($bn) Revenue ($m) Adj. EBITDA ($m) Net Leverage ❖ Growth driven by strong ❖ Turned around growth in ❖ Growth supported by topline ❖ Implemented stronger capital volume in e-Comm and Classical Digital Wallet, SMB growth and improved discipline by reducing net s
Slide 15: Thank You
Thank You 15
Slide 16: Appendix
Appendix
Slide 17: Summary of segment results
Summary of segment results 2023 2024 Q1 Q2 Q3 Q4 FY2023 Q1 Q2 Volume ($m) Merchant Solutions $ 28,571 $ 30,301 $ 29,644 $ 30,159 $ 118,675 $ 30,787 $ 32,719 Digital Wallets 5,443 5,394 5,645 5,963 22,445 5,675 5,717 Intersegment (196) (222) (187) (301) (906) (340) (376) Total $ 33,818 $ 35,473 $ 35,
Slide 18: 2024 other assumptions
2024 other assumptions $Millions Updated Items Prior Items Interest Expense, Net $137 to $142 $135 to $140 D&A $137 to $142 $135 to $140 Ex amortization of acquired intangibles Other Operating Income $3 to $5 $2 to $4 Adj. ETR 20% to 24% 21% to 24% Note: Adj. EBITDA, Adj. EBITDA margin, Adj. NI and
Slide 19: Statement regarding non-GAAP financial measures
Statement regarding non-GAAP financial measures This presentation also contains non-GAAP financial information. Paysafe management believes the presentation of these non-GAAP financial measures, when considered together with the Company’s results presented in accordance with GAAP, provide users with
Slide 20: Reconciliation of GAAP Gross Profit to Gross Profit (excl. D&A)
Reconciliation of GAAP Gross Profit to Gross Profit (excl. D&A) Three Months E nded Six Months E nded June 30, June 30, ($ in thousands) 2024 2023 2024 2023 Revenue $ 439 , 9 24 $ 402, 338 $ 857, 6 6 2 $ 79 0, 187 Cost of services (excluding depreciation and amortization) 183,825 166,614 354,198 325
Slide 21: Reconciliation of GAAP net (loss)/income to Adj. EBITDA
Reconciliation of GAAP net (loss)/ income to Adj. EBITDA June 30, June 30, ($ in thousands) 2024 2023 2024 2023 Net ( loss) / income $ ( 1, 430) $ ( 1, 76 5) $ 1, 6 26 $ ( 5, 573) Income tax expense 5,207 6,545 12,506 10,424 Interest expense, net 37,135 36,762 72,100 74,218 Depreciation and amortiza
Slide 22: Supplemental: Adj. EBITDA to Adj. net income walk
Supplemental : Adj. EBITDA to Adj. net income walk Three Months E nded June 30, ($ in thousands) 2024 2023 Adjusted E BITDA $ 119 , 006 $ 113, 031 Depreciation and amortization (1) 35,103 32,330 Other operating income / expense, net (2) (2,533) (2,562) Interest expense, net 37,135 36,762 Adjusted in
Slide 23: Reconciliation of GAAP net income (loss) to Adj. net income
Reconciliation of GAAP net income (loss) to Adj. net income Three Months E nded Six Months E nded June 30, June 30, ($ in thousands) 2024 2023 2024 2023 Net ( loss) / income $ ( 1, 430) $ ( 1, 76 5) $ 1, 6 26 $ ( 5, 573) Other non operating income, net (1) (1,864) (4,814) (11,638) (5,578) Impairment
Slide 24: Net income (loss) per share: Adjusted and GAAP
Net income (loss) per share: Adjusted and GAAP Three Months E nded Six Months E nded June 30, June 30, Non-GAAP 2024 2023 2024 2023 Numerator ($ in thousands) Adjusted net income - basic $ 36,279 $ 34,678 $ 71,585 $ 67,754 Adjusted net income - diluted $ 36,279 $ 34,678 $ 71,585 $ 67,754 Denominator
Slide 25: Reconciliation of Operating Cash Flow to Unlevered Free Cash Flow
Reconciliation of Operating Cash Flow to Unlevered Free Cash Flow Three Months E nded Six Months E nded June 30, June 30, ($ in thousands) 2024 2023 (1) 2024 2023 (1) Net cash inflow s from operating activities $ 54, 140 $ 50, 200 $ 112, 9 75 $ 70, 214 Capital expenditure (30,468) (25,458) (54,893)
Slide 26: Thank You
Thank You 26