Payoneer Reports Second Quarter 2024 Financial Results
Raises 2024 guidance
22% volume growth accelerates for a sixth consecutive quarter, reflecting consistent execution
40% B2B volume growth driving continued SMB take rate expansion
Expands into global workforce management services for SMBs with the acquisition of Skuad
Second Quarter 2024 Financial Highlights
($ in mm) |
2Q 2023 |
3Q 2023 |
4Q 2023 |
1Q 2024 |
2Q 2024 |
|
YoY
|
Revenue ex. interest income |
|
|
|
|
|
|
15% |
Interest income |
55.3 |
60.4 |
64.9 |
65.3 |
65.8 |
|
19% |
Revenue |
|
|
|
|
|
|
16% |
Transaction costs as a % of revenue |
13.8% |
14.6% |
16.2% |
14.9% |
15.4% |
|
160 bps |
Net income |
|
|
|
|
|
|
-29% |
Adjusted EBITDA |
56.0 |
58.2 |
52.2 |
65.2 |
72.8 |
|
30% |
|
|
|
|
|
|
|
|
Operational Metrics |
|
|
|
|
|
|
|
Volume ($bn) |
|
|
|
|
|
|
22% |
Active Ideal Customer Profiles (ICPs) ('000s)1 |
495 |
502 |
516 |
530 |
547 |
|
10% |
Revenue as a % of volume ("Take Rate") |
135 bps |
127 bps |
118 bps |
124 bps |
128 bps |
|
-7 bps |
SMB customer take rate2 |
110 bps |
107 bps |
100 bps |
108 bps |
111 bps |
|
1 bps |
1. |
Active ICPs are defined as customers with a Payoneer Account that have on average over |
|
2. |
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 consecutive quarter of record revenue, accelerating volume and ICP growth, and significant profitability. We are steadily executing to capture a massive opportunity and our results are a validation that our strategy is working: we grew ICPs by 10%, increased ARPU by 27%, and continued to expand our SMB take rate while driving more leverage across the business. |
|
More and more cross-border SMBs with global operations are using Payoneer’s financial stack. To accelerate our evolution and B2B momentum, we are excited to announce the acquisition of Skuad and welcome to |
|
|
Transaction Details
On
Second Quarter 2024 Business Highlights
-
10% active ICP growth, including 7% growth in larger ICPs who have on average over
$10,000 per month in volume. Both volume and revenue from $10K+ ICPs increased more than 20% year-over-year as we acquire larger customers -
22% volume growth year-over-year reflects:
-
B2B volume of
$2.5 billion increased 40% year-over-year, driven by strong growth of new cohorts added in the past year and continued strong customer acquisition -
Marketplace volume of
$11.4 billion increased 15% year-over-year led by acquisition of large customers inChina and continued strength from large ecommerce platforms -
Merchant Services (Checkout) volume of
$119 million increased 192% year-over-year as we doubled the number of $10K+ customers using Checkout from a year ago -
Enterprise payouts volume of
$4.7 billion increased 31% year-over-year, led by the travel vertical where we increased the number of countries we serve compared to a year ago
-
B2B volume of
-
$1.2 billion of spend onPayoneer cards, up 33% year-over-year, as we continue to improve our card capabilities. We launched additional integrations with accounting ERP platforms, which enables customers to more easily track their spend onPayoneer cards directly within their preferred accounting solution -
Payoneer continues to expand its ecosystem to enable more interoperability for customers. We are now integrated with Xero, QuickBooks, andZoho Books , which represent the top global accounting platforms used by SMBs -
$6.0 billion of customer funds as ofJune 30, 2024 , up 9% year-over-year -
$47 million of share repurchases at a weighted average price of$5.33
2024 Guidance
“Payoneer is driving accelerating growth across our entire SMB customer business. We delivered a second consecutive quarter of 21% growth in revenue excluding interest income and |
|
We are raising our 2024 guidance to reflect our significant outperformance in the second quarter and our momentum heading into the second half of 2024. We continue to innovate our product offerings, are accelerating the evolution of our financial stack with our acquisition of Skuad and continue to strengthen our position as the dedicated partner of choice for SMBs with global, cross-border operations.” |
|
|
2024 guidance is as follows:
|
|||
Revenue |
|
||
Transaction costs |
~16.5% of revenue |
||
Adjusted EBITDA (1) |
|
||
(1) Guidance for fiscal year, where adjusted, is provided on a non-GAAP basis, which |
Webcast
About
Forward-Looking Statements
This press release includes, and oral statements made from time to time by representatives of
Financial Information; Non-GAAP Financial Measures
Some of the financial information and data contained in this press release, such as adjusted EBITDA, have not been prepared in accordance with
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, other financial expense (income), net, taxes on income, 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
TABLE - 1 | |||||||
|
|||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) | |||||||
( |
|||||||
(Unaudited) |
|||||||
Three months ended |
|||||||
|
|||||||
2024 |
|
2023 |
|||||
Revenues | $ |
239,520 |
|
$ |
206,734 |
||
Transaction costs (Exclusive of depreciation and amortization shown separately below and inclusive of |
36,961 |
|
28,497 |
||||
Other operating expenses |
41,242 |
|
40,527 |
||||
Research and development expenses |
27,580 |
|
27,995 |
||||
Sales and marketing expenses |
50,614 |
|
48,402 |
||||
General and administrative expenses |
26,102 |
|
22,012 |
||||
Depreciation and amortization |
10,712 |
|
5,909 |
||||
Total operating expenses |
193,211 |
|
173,342 |
||||
Operating income |
46,309 |
|
33,392 |
||||
Financial income: | |||||||
Gain from change in fair value of Warrants |
1,006 |
|
13,586 |
||||
Other financial income, net |
976 |
|
4,318 |
||||
Financial income, net |
1,982 |
|
17,904 |
||||
Income before taxes on income |
48,291 |
|
51,296 |
||||
Taxes on income |
15,866 |
|
5,747 |
||||
Net income | $ |
32,425 |
|
$ |
45,549 |
||
Other comprehensive income (loss) | |||||||
Unrealized gain on available-for-sale debt securities, net |
872 |
|
- |
||||
Unrealized loss on cash flow hedges, net |
(699 |
) |
- |
||||
Tax benefit on unrealized losses on cash flow hedges, net |
126 |
|
- |
||||
Other comprehensive income, net of tax |
299 |
|
- |
||||
Comprehensive income | $ |
32,724 |
|
$ |
45,549 |
||
Per Share Data | |||||||
Net income per share attributable to common stockholders — Basic earnings per share | $ |
0.09 |
|
$ |
0.12 |
||
— Diluted earnings per share | $ |
0.09 |
|
$ |
0.12 |
||
Weighted average common shares outstanding — Basic |
356,315,658 |
|
365,000,974 |
||||
Weighted average common shares outstanding — Diluted |
373,368,383 |
|
387,623,679 |
Disaggregation of revenue
The following table presents revenue recognized from contracts with customers as well as revenue from other sources:
Three months ended
|
||||||
2024 |
|
2023 |
||||
Revenue recognized at a point in time | $ |
170,751 |
$ |
141,231 |
||
Revenue recognized over time |
492 |
7,884 |
||||
Revenue from contracts with customers | $ |
171,243 |
$ |
149,115 |
||
Interest income on customer balances | $ |
65,821 |
$ |
55,293 |
||
Capital advance income |
2,456 |
2,326 |
||||
Revenue from other sources | $ |
68,277 |
$ |
57,619 |
||
Total revenues | $ |
239,520 |
$ |
206,734 |
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.
Three months ended
|
||||||
2024 |
|
2023 |
||||
Primary regional markets | ||||||
|
$ |
84,439 |
$ |
71,227 |
||
|
45,609 |
41,699 |
||||
|
36,225 |
27,385 |
||||
|
22,798 |
26,041 |
||||
|
25,914 |
21,711 |
||||
|
24,535 |
18,671 |
||||
Total revenues | $ |
239,520 |
$ |
206,734 |
1. |
|
|
2. |
No single country included in any of these regions generated more than 10% of total revenue. |
|
3. |
|
TABLE - 2 | ||||||||||||||||||||
|
||||||||||||||||||||
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (UNAUDITED) | ||||||||||||||||||||
( |
||||||||||||||||||||
Three months ended |
||||||||||||||||||||
|
||||||||||||||||||||
2024 |
|
2023 |
||||||||||||||||||
Net income | $ |
32,425 |
|
$ |
45,549 |
|
||||||||||||||
Depreciation and amortization |
10,712 |
|
5,909 |
|
||||||||||||||||
Taxes on income |
15,866 |
|
5,747 |
|
||||||||||||||||
Other financial income, net |
(976 |
) |
(4,318 |
) |
||||||||||||||||
EBITDA |
58,027 |
|
52,887 |
|
||||||||||||||||
Stock based compensation expenses(1) |
13,666 |
|
16,173 |
|
||||||||||||||||
M&A related expense(2) |
2,091 |
|
498 |
|
||||||||||||||||
Gain from change in fair value of Warrants(3) |
(1,006 |
) |
(13,586 |
) |
||||||||||||||||
Adjusted EBITDA | $ |
72,778 |
|
$ |
55,972 |
|
||||||||||||||
Three months ended, | ||||||||||||||||||||
|
|
|
|
|
||||||||||||||||
Net income | $ |
45,549 |
|
$ |
12,825 |
|
$ |
27,021 |
|
$ |
28,974 |
|
$ |
32,425 |
|
|||||
Depreciation and amortization |
5,909 |
|
7,116 |
|
8,750 |
|
9,408 |
|
10,712 |
|
||||||||||
Taxes on income |
5,747 |
|
10,012 |
|
14,272 |
|
13,910 |
|
15,866 |
|
||||||||||
Other financial income, net |
(4,318 |
) |
(1,137 |
) |
(3,763 |
) |
(2,747 |
) |
(976 |
) |
||||||||||
EBITDA |
52,887 |
|
28,816 |
|
46,280 |
|
49,545 |
|
58,027 |
|
||||||||||
Stock based compensation expenses(1) |
16,173 |
|
15,330 |
|
17,338 |
|
15,077 |
|
13,666 |
|
||||||||||
M&A related expense(2) |
498 |
|
1,745 |
|
451 |
|
2,375 |
|
2,091 |
|
||||||||||
Loss (gain) from change in fair value of Warrants(3) |
(13,586 |
) |
7,799 |
|
(11,824 |
) |
(1,761 |
) |
(1,006 |
) |
||||||||||
Restructuring charges(4) |
— |
|
4,488 |
|
— |
|
— |
|
— |
|
||||||||||
Adjusted EBITDA | $ |
55,972 |
|
$ |
58,178 |
|
$ |
52,245 |
|
$ |
65,236 |
|
$ |
72,778 |
|
1. |
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. |
|
2. |
Amounts relate to M&A-related third-party fees, including related legal, consulting and other expenditures. |
|
3. |
Changes in the estimated fair value of the warrants are recognized as gain or loss on the condensed consolidated statements of comprehensive income. The impact is removed from EBITDA as it represents market conditions that are not in our control. |
|
4. |
We initiated a plan to reduce our workforce during the three months ended |
TABLE - 3 | ||||||
|
||||||
EARNINGS PER SHARE (UNAUDITED) | ||||||
( |
||||||
(Unaudited) |
||||||
Three months ended |
||||||
2024 |
|
2023 |
||||
Numerator: | ||||||
Net income | $ |
32,425 |
$ |
45,549 |
||
Denominator: | ||||||
Weighted average common shares outstanding — | ||||||
Basic |
356,315,658 |
365,000,974 |
||||
Add: | ||||||
Dilutive impact of RSUs, ESPP and options to purchase common stock |
16,327,840 |
21,928,779 |
||||
Dilutive impact of private Warrants |
724,885 |
693,926 |
||||
Weighted average common shares — diluted |
373,368,383 |
387,623,679 |
||||
Net income per share attributable to common stockholders — Basic earnings per share | $ |
0.09 |
$ |
0.12 |
||
Diluted earnings per share | $ |
0.09 |
$ |
0.12 |
TABLE - 4 | ||||||||
|
||||||||
CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||
( |
||||||||
|
|
|
||||||
2024 |
|
2023 |
||||||
Assets: | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ |
575,730 |
|
$ |
617,022 |
|
||
Restricted cash |
10,653 |
|
7,030 |
|
||||
Customer funds |
6,037,105 |
|
6,390,526 |
|
||||
Accounts receivable (net of allowance of |
6,567 |
|
7,980 |
|
||||
Capital advance receivables (net of allowance of |
49,478 |
|
45,493 |
|
||||
Other current assets |
53,400 |
|
40,672 |
|
||||
Total current assets |
6,732,933 |
|
7,108,723 |
|
||||
Non-current assets: | ||||||||
Property, equipment and software, net |
14,522 |
|
15,499 |
|
||||
|
19,889 |
|
19,889 |
|
||||
Intangible assets, net |
88,597 |
|
76,266 |
|
||||
Restricted cash |
6,018 |
|
5,780 |
|
||||
Deferred taxes |
19,051 |
|
15,291 |
|
||||
Severance pay fund |
818 |
|
840 |
|
||||
Operating lease right-of-use assets |
23,078 |
|
24,854 |
|
||||
Other assets |
15,406 |
|
15,977 |
|
||||
Total assets | $ |
6,920,312 |
|
$ |
7,283,119 |
|
||
Liabilities and shareholders’ equity: | ||||||||
Current liabilities: | ||||||||
Trade payables | $ |
38,974 |
|
$ |
33,941 |
|
||
Outstanding operating balances |
6,037,105 |
|
6,390,526 |
|
||||
Short term debt from related party |
14,984 |
|
— |
|
||||
Other payables |
100,415 |
|
117,508 |
|
||||
Total current liabilities |
6,191,478 |
|
6,541,975 |
|
||||
Non-current liabilities: | ||||||||
Long-term debt from related party |
— |
|
18,411 |
|
||||
Warrant liability |
5,788 |
|
8,555 |
|
||||
Other long-term liabilities |
53,667 |
|
49,905 |
|
||||
Total liabilities |
6,250,933 |
|
6,618,846 |
|
||||
Commitments and contingencies | ||||||||
Shareholders’ equity: | ||||||||
Preferred stock, |
— |
|
— |
|
||||
Common stock, |
3,830 |
|
3,687 |
|
||||
|
(154,692 |
) |
(56,936 |
) |
||||
Additional paid-in capital |
773,888 |
|
732,894 |
|
||||
Accumulated other comprehensive income (loss) |
150 |
|
(176 |
) |
||||
Retained earnings (accumulated deficit) |
46,203 |
|
(15,196 |
) |
||||
Total shareholders’ equity |
669,379 |
|
664,273 |
|
||||
Total liabilities and shareholders’ equity | $ |
6,920,312 |
|
$ |
7,283,119 |
|
TABLE - 5 | ||||||||
|
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||
( |
||||||||
Six months ended |
||||||||
|
||||||||
2024 |
|
2023 |
||||||
Cash Flows from Operating Activities | ||||||||
Net income | $ |
61,399 |
|
$ |
53,487 |
|
||
Adjustment to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization |
20,120 |
|
11,948 |
|
||||
Deferred taxes |
(3,640 |
) |
(9,833 |
) |
||||
Stock-based compensation expenses |
28,742 |
|
33,100 |
|
||||
Gain from change in fair value of Warrants |
(2,767 |
) |
(13,334 |
) |
||||
Foreign currency re-measurement loss (gain) |
2,311 |
|
(606 |
) |
||||
Changes in operating assets and liabilities: | ||||||||
Other current assets |
(12,728 |
) |
(1,621 |
) |
||||
Trade payables |
4,606 |
|
(13,157 |
) |
||||
Deferred revenue |
273 |
|
407 |
|
||||
Accounts receivable, net |
1,413 |
|
1,618 |
|
||||
Capital advance extended to customers |
(154,357 |
) |
(138,900 |
) |
||||
Capital advance collected from customers |
150,372 |
|
135,835 |
|
||||
Other payables |
(17,664 |
) |
(5,259 |
) |
||||
Other long-term liabilities |
1,168 |
|
(1,066 |
) |
||||
Operating lease right-of-use assets |
4,370 |
|
5,053 |
|
||||
Interest and amortization of discount on investments |
(3,275 |
) |
— |
|
||||
Other assets |
571 |
|
2,247 |
|
||||
Net cash provided by operating activities |
80,914 |
|
59,919 |
|
||||
Cash Flows from Investing Activities | ||||||||
Purchase of property, equipment and software |
(2,802 |
) |
(2,422 |
) |
||||
Capitalization of internal use software |
(27,345 |
) |
(12,921 |
) |
||||
Severance pay fund distributions, net |
22 |
|
125 |
|
||||
Customer funds in transit, net |
(988 |
) |
(54,188 |
) |
||||
Purchases of investments in available-for-sale debt securities |
(739,185 |
) |
— |
|
||||
Maturities and sales of investments in available-for-sale debt securities |
105,000 |
|
— |
|
||||
Net cash inflow from acquisition of remaining interest in joint venture |
— |
|
5,953 |
|
||||
Net cash used in investing activities |
(665,298 |
) |
(63,453 |
) |
||||
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 |
12,027 |
|
12,091 |
|
||||
Outstanding operating balances, net |
(353,421 |
) |
(309,911 |
) |
||||
Borrowings under related party facility |
11,920 |
|
14,015 |
|
||||
Repayments under related party facility |
(15,347 |
) |
(14,514 |
) |
||||
Common stock repurchased |
(98,654 |
) |
(17,125 |
) |
||||
Net cash used in financing activities |
(443,475 |
) |
(315,444 |
) |
||||
Effect of exchange rate changes on cash and cash equivalents |
(2,311 |
) |
705 |
|
||||
Net change in cash, cash equivalents, restricted cash and customer funds |
(1,030,170 |
) |
(318,273 |
) |
||||
Cash, cash equivalents, restricted cash and customer funds at beginning of period |
7,018,367 |
|
6,386,720 |
|
||||
Cash, cash equivalents, restricted cash and customer funds at end of period | $ |
5,988,197 |
|
$ |
6,068,447 |
|
||
Supplemental information of investing and financing activities not involving cash flows: | ||||||||
Property, equipment, and software acquired but not paid | $ |
1,237 |
|
$ |
870 |
|
||
Internal use software capitalized but not paid | $ |
7,408 |
|
$ |
8,294 |
|
||
Common stock repurchased but not paid | $ |
602 |
|
$ |
2,600 |
|
||
Right of use assets obtained in exchange for new operating lease liabilities | $ |
2,594 |
|
$ |
2,474 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240807622293/en/
Investor Contact:
investor@payoneer.com
Media Contact:
PR@payoneer.com
Source: