Payoneer Global : Press Release PDF (0a3f3d)

Published: 2025-05-07 07:35:09 ET PAYO

Published on 05/07/2025 at 07:35

Strong growth and profitability

16% YoY growth in revenue excluding interest income powered by B2B customers and Card product

NEW YORK - May 7, 2025 - Payoneer Global Inc. ("Payoneer" or the "Company") (NASDAQ: PAYO), the global financial technology company powering business growth across borders, today reported financial results for its first quarter ended March 31, 2025.

First Quarter 2025 Financial Highlights

($ in mm) 1Q 2024

2Q 2024

3Q 2024

4Q 2024

1Q 2025

YoY

Change

Revenue ex. interest income $162.9

$173.7

$183.1

$201.1

$188.6

16%

Interest income 65.3

65.8

65.2

60.6

58.0

(11)%

Revenue $228.2

$239.5

$248.3

$261.7

$246.6

Transaction costs as a % of revenue 14.9%

15.4%

15.3%

16.5%

16.0%

110 bps

Net income $29.0

$32.4

$41.6

$18.2

$20.6

(29)%

Adjusted EBITDA 65.2

72.8

69.3

63.3

65.4

Operational Metrics

Volume ($bn) $18.5

$18.7

$20.4

$22.5

$19.7

Active Ideal Customer Profiles (ICPs) ('000s)1 530

547

557

560

556

Revenue as a % of volume ("Take Rate") 124 bps

128 bps

122 bps

116 bps

125 bps

1 bps

SMB customer take rate2 108 bps

111 bps

109 bps

119 bps

11 bps

Active ICPs are defined as customers with a Payoneer Account that have on average over $500 per month in volume and were active over the trailing twelve-month period.

SMB customer take rate represents revenue from SMBs who sell on marketplaces, B2B SMBs, and Merchant Services, divided by the associated volume from each respective channel.

"Payoneer delivered another solid quarter, driven by strong ARPU growth, increasing adoption of our high-value products, focus on quality customers, and continued profitability. We also extended our regulatory advantage, becoming the third foreign company licensed as a payment service provider in China. This reflects our long-term commitment to complex, high-potential markets.

Global trade is rapidly evolving. Payoneer's customers are adapting, and we are right there with them. Approximately 40% of our revenue comes from helping customers sell into non-US markets. As supply chains shift and global workforces expand, we're positioning ourselves to capture the upside.

We're executing our strategy with discipline. We are balancing growth and profitability while strengthening our long-term moat by investing in our payments infrastructure and differentiated capabilities. Our strategy is simple: build the financial stack for the next generation of borderless SMBs and be their long-term partner as they grow and expand globally."

John Caplan, Chief Executive Officer

First Quarter 2025 Business Highlights

Revenue excluding interest income grew 16% year-over-year, driven by 7% volume growth and significant take rate expansion with SMB customers.

ARPU excluding interest income grew 22%, accelerating for the seventh consecutive quarter. Growth was driven by continued strength among larger customers, growth in higher take rate B2B, Checkout and Card franchises, and various pricing initiatives.

SMB customer revenue of $170 million grew 18% year-over-year, reflecting:

SMBs that sell on marketplaces revenue of $110 million, up 8% year-over-year.

B2B SMBs revenue of $52 million, up 37% year-over-year.

Merchant Services (Checkout) revenue of $7 million, up 96% year-over-year.

$1.4 billion of spend on Payoneer cards, up 29% year-over-year, with increased usage across all regions.

$6.6 billion of customer funds (including both short-term and long-term funds) as of March 31, 2025, up 11% year-over-year.

$17 million of share repurchases at a weighted average price of $9.04. Share repurchases slowed versus $51 million in the prior year period at a weighted average price of $4.84.

In April 2025, announced the completion of a previously announced acquisition of a licensed China-based payment service provider, Easylink Payment Co., Ltd. The acquisition strengthens Payoneer's global regulatory infrastructure and positions the company to better serve its local customers in China as they export globally.

2025 Outlook

Given the current macroeconomic uncertainty, Payoneer is suspending its previously issued full-year 2025 guidance.

"Payoneer delivered 16% growth in revenue excluding interest income and continued strong profitability in the first quarter. We continue to execute against our long-term vision and strategic roadmap. We remain confident in our long-term thesis - serving the complex needs of global SMBs and entrepreneurs by providing a comprehensive and differentiated financial stack that enables them to achieve their cross-border ambitions.

Given the rapidly evolving and uncertain global macro and trade environment, at this time, we are suspending our previously issued full year 2025 guidance. There are a broad range of potential outcomes and as a company supporting cross-border businesses that may be negatively impacted, we face substantial risks which could impact our financial results.

Our business and the customers we serve are diverse and our focus during this time is squarely on supporting our customers as they navigate the dynamic environment. Some customers may benefit from potential shifts in global trade and supply chains and we are focused on ensuring we and our customers are well positioned to capture potential new opportunities."

Bea Ordonez, Chief Financial Officer

Payoneer will host a live webcast of its earnings on a conference call with the investment community beginning at 8:30 a.m. ET today, May 7, 2025. To access the webcast, go to the investor relations section of the Company's website at https://investor.payoneer.com. A replay will be available on the investor relations website following the call.

Payoneer is the financial technology company empowering the world's small and medium-sized businesses to transact, do business, and grow globally. Payoneer was founded in 2005 with the belief that talent is equally distributed, but opportunity is not. It is our mission to enable any entrepreneur and business anywhere to participate and succeed in an increasingly digital global economy. Since our founding, we have built a global financial stack that removes barriers and simplifies cross-border commerce. We make it easier for millions of

SMBs, particularly in emerging markets, to connect to the global economy, pay and get paid, manage their funds across multiple currencies, and grow their businesses.

This press release includes, and oral statements made from time to time by representatives of Payoneer, may be considered "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Payoneer's future financial or operating performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expect," "intend," "plan," "will," "estimate," "anticipate," "believe," "predict," "potential" or "continue," or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Payoneer and its management, as the case may be, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (1) changes in applicable laws or regulations; (2) the possibility that Payoneer may be adversely affected by geopolitical events and conflicts, such as Israel's ongoing conflicts in the Middle East, and other economic, business and/or competitive factors, such as changes in global trade policies (including the imposition of tariffs); (3) changes in the assumptions underlying our financial estimates; (4) the outcome of any known and/or unknown legal or regulatory proceedings; and (5) other risks and uncertainties set forth in Payoneer's Annual Report on Form 10-K for the period ended December 31, 2024 and future reports that Payoneer may file with the SEC from time to time. Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Payoneer does not undertake any duty to update these forward-looking statements.

Some of the financial information and data contained in this press release, such as adjusted EBITDA, have not been prepared in accordance with United States generally accepted accounting principles ("GAAP"). Payoneer uses these non-GAAP measures to compare Payoneer's performance to that of prior periods for budgeting and planning purposes. Payoneer believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Payoneer's results of operations. Payoneer's method of determining these non-GAAP measures may be different from other companies' methods and, therefore, may not be comparable to those used by other companies and Payoneer does not recommend the sole use of these non-GAAP measures to assess its financial performance. Payoneer management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in Payoneer's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. You should review Payoneer's financial statements, which are included in Payoneer's Annual Report on Form 10-K for the year ended December 31, 2024 and its subsequent Quarterly Reports on Form 10-Q, and not rely on any single financial measure to evaluate Payoneer's business.

Non-GAAP measures include the following item:

Adjusted EBITDA: We provide adjusted EBITDA, a non-GAAP financial measure that represents our net income (loss) adjusted to exclude, as applicable: M&A related expense (income), stock-based compensation expenses, restructuring charges, share in losses (gain) of associated company, loss (gain) from change in fair value of warrants and warrant repurchase/redemption, other financial expense (income), net, income taxes, and depreciation and amortization.

Other companies may calculate the above measure differently, and therefore Payoneer's measures may not be directly comparable to similarly titled measures of other companies.

In addition, in this earnings release, we reference volume, which is an operational metric. Volume refers to the total dollar value of transactions successfully completed or enabled by our platform, not including orchestration transactions. For a customer that both receives and later sends payments, we count the volume only once. We also reference ARPU (Average Revenue Per User), which is defined as the Revenue from Active Customers divided by the number of Active Customers over the period in which the Revenue was earned. Active Customers for these purposes are defined as Payoneer accountholders with at least 1 financial transaction over the period. Revenue from Active Customers represents revenue attributed to Active Customers based on their use of the Payoneer platform, including interest income earned from their balances, and excluding revenues unrelated to their activities.

(U.S. dollars in thousands, except share and per share data)

Three months ended

March 31,

2025

2024

Revenues

$ 246,617

$ 228,183

Transaction costs (Excluding depreciation and amortization shown separately below and including $0 and $438 interest expense and fees associated with related party transactions in the three months ended March 31, 2025 and

2024, respectively.)

39,349

33,966

Other operating expenses

41,658

40,283

Research and development expenses

37,271

32,051

Sales and marketing expenses

54,726

49,890

General and administrative expenses

29,904

24,209

Depreciation and amortization

14,390

9,408

Total operating expenses

217,298

189,807

Operating income

29,319

38,376

Financial income (expense):

Gain from change in fair value of Warrants

1,761

Other financial income (expense), net

(1,550)

2,747

Financial income (expense), net

(1,550)

4,508

Income before income taxes

27,769

42,884

Income taxes

7,192

13,910

Net income

$ 20,577

$ 28,974

Other comprehensive income

Unrealized gain (loss) on available-for-sale debt securities, net

7,239

(1)

Tax expense on unrealized gains on available-for-sale debt securities, net

(1,605)

Unrealized gain (loss) on cash flow hedges, net

(1,787)

Tax benefit (expense) on unrealized gains (losses) on cash flow hedges, net

327

(6)

Unrealized gain on interest rate floor, net

6,021

Tax expense on unrealized gains on interest rate floor, net

(1,276)

Foreign currency translation adjustments

(169)

Other comprehensive income

8,750

Comprehensive income

$ 29,327

$ 29,001

Per Share Data

Net income per share attributable to common stockholders - Basic earnings

per share

$ 0.06

$ 0.08

- Diluted earnings per share

$ 0.05

$ 0.08

Weighted average common shares outstanding - Basic

362,979,571

359,306,195

Weighted average common shares outstanding - Diluted

382,215,129

378,715,301

Disaggregation of revenue

The following table presents revenue recognized from contracts with customers as well as revenue from other sources:

(Unaudited) Three months ended

March 31,

2025

2024

Revenue recognized at a point in time

$ 185,333

$ 159,796

Revenue recognized over time

930

662

Revenue from contracts with customers

$ 186,263

$ 160,458

Interest income on customer balances

$ 57,972

$ 65,268

Capital advance income

2,382

2,457

Revenue from other sources

$ 60,354

$ 67,725

Total revenues

$ 246,617

$ 228,183

The following table presents the Company's revenue disaggregated by primary regional market, with revenues being attributed to the country (in the region) in which the billing address of the transacting customer is located, with the exception of global bank transfer revenues, where revenues are disaggregated based on the billing address of the transaction funds source.

Note that in 2024, the Company updated the definition of its primary regional markets to align with the view used by Management. This update eliminates South Asia, Middle East and North Africa as a separate region and instead includes revenues from South Asia in the Asia-Pacific region and Middle East and North Africa in the Europe, Middle East, and Africa region. The update has been applied to all periods reflected in the table below.

(Unaudited) Three months ended

March 31,

2025

2024

Primary regional markets

Greater China(1)

$ 84,896

$ 81,358

Europe, Middle East, and Africa(2)

58,893

59,163

Asia-Pacific(2)

51,260

41,582

North America(3)

23,695

23,010

Latin America(2)

27,873

23,070

Total revenues

$ 246,617

$ 228,183

Greater China is inclusive of mainland China, Hong Kong, Macao and Taiwan.

No single country included in any of these regions generated more than 10% of total revenue.

The United States is the Company's country of domicile. Of North America revenues, the U.S. represents $22,624 and $21,925 during the three months ended March 31, 2025 and 2024, respectively.

(U.S. dollars in thousands)

Three months ended March 31,

2025

2024

Net income

$ 20,577

$ 28,974

Depreciation and amortization

14,390

9,408

Income taxes

7,192

13,910

Other financial expense (income), net

1,550

(2,747)

EBITDA

43,709

49,545

Stock based compensation expenses(1)

18,755

15,077

M&A related expenses(2)

337

2,375

Gain from change in fair value of Warrants(3)

(1,761)

Restructuring charges(4)

2,630

Adjusted EBITDA

$ 65,431

$ 65,236

Three months ended,

Mar. 31, 2024 June 30, 2024 Sept. 30, 2024 Dec. 31, 2024 Mar. 31, 2025

Net income

$ 28,974

$ 32,425

$ 41,574

$ 18,190

$ 20,577

Depreciation and amortization

9,408

10,712

13,510

13,666

14,390

Income taxes

13,910

15,866

(19,484)

8,016

7,192

Other financial expense (income), net

(2,747)

(976)

(1,674)

2,978

1,550

EBITDA

49,545

58,027

33,926

42,850

43,709

Stock based compensation expenses(1)

15,077

13,666

17,430

18,614

18,755

M&A related expenses(2)

2,375

2,091

3,166

1,807

337

Gain from change in fair value of Warrants(3)

(1,761)

(1,006)

Restructuring charges(4)

2,630

Loss on Warrant repurchase/redemption(5)

14,746

Adjusted EBITDA

$ 65,236

$ 72,778

$ 69,268

$ 63,271

$ 65,431

Represents non-cash charges associated with stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy.

Amounts relate to M&A-related third-party fees, including related legal, consulting and other expenditures. Additionally, amounts for the three months ended March 31, 2025, December 31, 2024, and September 30, 2024 include $0.3, $1.8 and $0.2 million, respectively, in non-recurring fair value adjustment of the Skuad contingent consideration liability.

Changes in the estimated fair value of the warrants are recognized as gain or loss on the consolidated statements of comprehensive income. The impact is removed from EBITDA as it represents market conditions that are not in our control.

Represents non-recurring costs related to severance and other employee termination benefits.

Amounts relate to a non-recurring loss on the repurchase and redemption of outstanding public warrants.

(U.S. dollars in thousands, except share and per share data)

Three months ended March 31,

2025

2024

Numerator:

Net income

$ 20,577

$ 28,974

Denominator:

Weighted average common shares outstanding -

Basic

362,979,571

359,306,195

Add:

Dilutive impact of RSUs, ESPP and options to purchase common stock

18,362,026

18,725,608

Dilutive impact of private Warrants

873,532

683,498

Weighted average common shares - diluted

382,215,129

378,715,301

Net income per share attributable to common stockholders - Basic earnings per share

$ 0.06

$ 0.08

Diluted earnings per share

$ 0.05

$ 0.08

(U.S. dollars in thousands, except share and per share data)

Assets: Current assets:

March 31,

2025

December 31,

2024

Cash and cash equivalents

$ 524,150

$ 497,467

Restricted cash

9,979

6,633

Customer funds

6,053,390

6,439,153

Accounts receivable (net of allowance of $382 at March 31, 2025 and December

31, 2024, respectively)

9,382

11,937

Capital advance receivables (net of allowance of $4,913 at March 31, 2025 and

$4,955 at December 31, 2024)

45,088

56,242

Other current assets

70,832

88,210

Total current assets

6,712,821

7,099,642

Non-current assets:

Property, equipment and software, net

17,113

16,053

Goodwill

77,785

Intangible assets, net

104,669

102,390

Customer funds

525,000

Restricted cash

15,683

17,653

Deferred taxes

41,249

41,523

Severance pay fund

740

757

Operating lease right-of-use assets

20,006

19,403

Other assets

35,096

30,174

Total assets

$ 7,550,162

$ 7,930,380

Liabilities and shareholders' equity:

Current liabilities:

Trade payables

$ 32,889

$ 37,302

Outstanding operating balances

6,578,390

6,964,153

Other payables

119,716

129,621

Total current liabilities

6,730,995

7,131,076

Non-current liabilities:

Deferred taxes

1,471

Other long-term liabilities

66,965

73,043

Total liabilities

6,799,431

7,205,590

Commitments and contingencies

Shareholders' equity:

Preferred stock, $0.01 par value, 380,000,000 shares authorized; no shares were

issued and outstanding at March 31, 2025 and December 31, 2024.

Common stock, $0.01 par value, 3,800,000,000 and 3,800,000,000 shares authorized; 400,261,352 and 395,965,588 shares issued and 362,508,704 and

360,093,249 shares outstanding at March 31, 2025 and December 31, 2024,

respectively.

4,003

3,960

Treasury stock at cost, 37,752,648 and 35,872,339 shares as of March 31, 2025

and December 31, 2024, respectively.

(210,702)

(193,724)

Additional paid-in capital

834,745

821,196

Accumulated other comprehensive loss

(3,859)

(12,609)

Retained earnings

126,544

105,967

Total shareholders' equity

750,731

724,790

Total liabilities and shareholders' equity

$ 7,550,162

$ 7,930,380

(U.S. dollars in thousands)

Three months ended

March 31,

2025

2024

Cash Flows from Operating Activities

Net income

$ 20,577

$ 28,974

Adjustment to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

14,390

9,408

Deferred taxes

(2,279)

(1,397)

Stock-based compensation expenses

18,755

15,077

Gain from change in fair value of Warrants

(1,761)

Interest and amortization of discount on investments

(2,568)

(474)

Foreign currency re-measurement loss (gain)

(1,811)

1,541

Changes in operating assets and liabilities:

Other current assets

16,158

(11)

Trade payables

(2,883)

1,465

Deferred revenue

358

(28)

Accounts receivable, net

2,555

756

Capital advance extended to customers

(84,078)

(80,173)

Capital advance collected from customers

95,232

73,533

Other payables

(17,108)

(12,528)

Other long-term liabilities

(781)

2,669

Operating lease right-of-use assets

2,121

2,287

Other assets

(4,922)

172

Net cash provided by operating activities

53,716

39,510

Cash Flows from Investing Activities

Purchase of property, equipment and software

(4,726)

(1,616)

Capitalization of internal use software

(16,067)

(14,055)

Severance pay fund distributions, net

Customer funds in transit, net

(19,742)

154

Purchases of investments in available-for-sale debt securities

(71,968)

(118,649)

Maturities of investments in available-for-sale debt securities

64,500

20,000

Net cash used in investing activities

(47,986)

(114,147)

Cash Flows from Financing Activities

Proceeds from issuance of common stock in connection with stock-based compensation plan, net of taxes paid related to settlement of equity awards and proceeds from employee equity

transactions to be remitted to employees

(4,400)

3,432

Outstanding operating balances, net

(385,763)

(469,602)

Borrowings under related party facility

5,378

Repayments under related party facility

(9,360)

Receipts of collateral on interest rate derivatives

25,610

Payments of collateral on interest rate derivatives

(20,140)

Common stock repurchased

(17,753)

(50,961)

Net cash used in financing activities

(402,446)

(521,113)

Effect of exchange rate changes on cash and cash equivalents

1,878

(1,541)

Net change in cash, cash equivalents, restricted cash and customer funds

(394,838)

(597,291)

Cash, cash equivalents, restricted cash and customer funds at beginning of period

5,658,210

7,018,367

Cash, cash equivalents, restricted cash and customer funds at end of period

$ 5,263,372

$ 6,421,076

Supplemental information of investing and financing activities not involving cash flows:

Property, equipment, and software acquired but not paid

$ -

$ 700

Internal use software capitalized but not paid

$ 4,959

$ 5,216

Right of use assets obtained in exchange for new operating lease liabilities

$ -

$ 1,699

Common stock repurchased but not paid

$ 2,724

$ -

Disclaimer

Payoneer Global Inc. published this content on May 06, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 07, 2025 at 11:34 UTC.