Paysafe Reports Fourth Quarter and Full Year 2023 Results; Provides 2024 Outlook

LONDON–(BUSINESS WIRE)–Paysafe Limited (“Paysafe” or the “Company”) (NYSE: PSFE), a leading payments platform, today announced its financial results for the fourth quarter and full year of 2023.

Fourth Quarter 2023 Financial Highlights

(Metrics compared to fourth quarter of 2022)

• Revenue of $414.5 million, increased 8%; increased 6% on a constant currency basis
• Total Payment Volume of $35.8 billion¹, increased 8%
• Net loss attributable to the Company of $12.1 million, or ($0.20) per diluted share, compared to $33.7 million, or ($0.56) per diluted share
• Adjusted net income of $40.9 million, or $0.66 per diluted share, compared to $33.1 million, or $0.54 per diluted share
• Adjusted EBITDA of $121.7 million, increased 13%; increased 11% on a constant currency basis
• Net leverage² decreased to 5.0x as of December 31, 2023, compared to 5.8x as of December 31, 2022

Full Year 2023 Financial Highlights

(Metrics compared to full year 2022)

• Revenue of $1,601.1 million, increased 7%; increased 6% on a constant currency basis
• Total Payment Volume of $140.2 billion¹, increased 8%
• Net loss attributable to the Company of $20.3 million, or ($0.33) per diluted share, compared to $1,862.7 million, or ($30.78) per diluted share
• Adjusted net income of $143.9 million, or $2.33 per diluted share, compared to $137.0 million, or $2.25 per diluted share
• Adjusted EBITDA of $458.7 million, increased 12%; increased 11% on a constant currency basis

Bruce Lowthers, CEO of Paysafe, commented: “We closed out 2023 strong with 8% revenue growth in Q4 and full year growth of 7%, reflecting our best year since coming public. We have undergone significant operating changes during this past year which has allowed us to deliver on the commitments that we set last March, driving revenue growth, Adjusted EBITDA expansion and a reduction in our net debt leverage ratio. Our team is excited about the opportunities ahead, and we look forward to building on this momentum in 2024 by investing in profitable growth, positioning us well for 2025 and beyond.”

Recent Strategic and Operational Highlights

• Announced investment plans to expand Paysafe’s go-to-market capabilities to support growth in target verticals, while enhancing client experience and operational efficiency
• Paysafe ranked 2nd in the J.D. Power 2024 U.S. Merchant Services Satisfaction Study^SM, outperforming the industry average for all study dimensions
• Published Paysafe research highlighting a shift in how consumers plan to allocate disposable income, with 42% of survey respondents planning to prioritize spending on experiences over possessions
• Improved consumer engagement and satisfaction, while reducing the rate of customer service contacts through enhancements to self-service, automation and next-gen customer service tools
• Integrated Visa Network Tokens, adding an additional layer of protection for cardholders
• Paysafe is now processing iGaming payments in 32 U.S. states and territories, adding seven new states in 2023, including the launch of Florida in Q4

Fourth Quarter and Full Year 2023 Summary of Consolidated Results

Fourth Quarter 2023 Results

Total revenue for the fourth quarter of 2023 was $414.5 million, an increase of 8%, compared to $383.6 million in the prior year period, reflecting 8% growth in total payment volume. Excluding an $8.6 million favorable impact from changes in foreign exchange rates, total revenue increased 6%. Revenue from the Merchant Solutions segment increased 9%, led by double-digit growth from e-commerce solutions. Revenue from the Digital Wallets segment increased 8% on a reported basis and 3% on a constant currency basis, as a decline from eCash solutions was more than offset by double-digit growth from classic digital wallets, partly reflecting the Company’s initiatives to increase consumer engagement and merchant checkout conversion rates. Growth from the Digital Wallets segment was also supported by new product features and interest revenue on consumer deposits.

Net loss attributable to the Company for the fourth quarter was $12.1 million, compared to $33.7 million in the prior year period. The decrease in net loss primarily reflects growth in operating income, including a decrease in share-based compensation expense, partly offset by an increase in tax expense.

Adjusted net income for the fourth quarter increased 23% to $40.9 million, compared to $33.1 million in the prior year period as strong growth in Adjusted EBITDA more than offset higher depreciation and amortization expense, excluding the amortization of acquired intangibles.

Adjusted EBITDA for the fourth quarter was $121.7 million, an increase of 13%, compared to $107.6 million in the prior year period. Excluding a $2.6 million favorable impact from changes in foreign exchange rates, Adjusted EBITDA increased 11% compared to the prior year period, primarily reflecting revenue growth, operating leverage and lower credit losses.

Fourth quarter operating cash flow was $61.6 million, compared to $64.1 million in the prior year period. Unlevered free cash flow was $89.6 million, compared to $99.9 million in the prior year period, which was mainly driven by movements in working capital.

Full Year 2023 Results

Total revenue for the full year 2023 was $1,601.1 million, an increase of 7%, compared to $1,496.1 million in the prior year. Excluding a $16.3 million favorable impact from changes in foreign exchange rates, total revenue increased 6% compared to the prior year. Revenue from the Merchant Solutions segment increased 7%. Revenue from the Digital Wallets segment increased 7% on a reported basis and 5% on a constant currency basis. Growth drivers for the full year 2023 were consistent with those in the fourth quarter of 2023, driven by Paysafe’s e-commerce solutions and classic digital wallets, including the benefit of interest revenue earned on consumer deposits, coupled with continued growth and resilience in the U.S. SMB market.

Net loss attributable to the Company for the full year 2023 was $20.3 million, compared to $1,862.7 million in the prior year. The decrease in net loss was largely attributable to non-cash charges related to the impairment of goodwill and intangibles recognized in 2022, as well as a decrease in restructuring expense, partly offset by the recognition of income tax expense in 2023, compared to an income tax benefit in 2022, as well as a decrease in other income.

Adjusted EBITDA for the full year 2023 was $458.7 million, an increase of 12%, compared to $410.0 million in the prior year. Excluding an $5.6 million favorable impact from changes in foreign exchange rates, Adjusted EBITDA increased 11%, primarily reflecting revenue growth, operating leverage and lower credit losses.

Adjusted net income for the full year 2023 increased 5% to $143.9 million, compared to $137.0 million in the prior year. The increase in adjusted net income was largely attributable to the same factors that contributed to growth in Adjusted EBITDA, partly offset by an increase in depreciation and amortization expense, excluding the amortization of acquired intangibles, and an increase in interest expense.

Operating cash flow for 2023 was $234.0 million, compared to $237.2 million in the prior year. Unlevered free cash flow increased to $318.3 million, compared to $295.8 million in the prior year due to movements in working capital, partly offset by an increase in capital expenditures.

Balance Sheet

As of December 31, 2023, total cash and cash equivalents were $202.3 million, total debt was $2.5 billion and net debt was $2.3 billion. Compared to December 31, 2022, total debt decreased by $141.6 million, reflecting net repayments of $174.3 million as well as movement in foreign exchange rates.

Summary of Segment Results

Full Year 2024 Financial Guidance

Webcast and Conference Call

Paysafe will host a live webcast to discuss the results today at 8:30 a.m. (ET). The webcast and supplemental information can be accessed on the investor relations section of the Paysafe website at ir.paysafe.com. An archive will be available after the conclusion of the live event and will remain available via the same link for one year.

About Paysafe

Paysafe Limited (“Paysafe”) (NYSE: PSFE) (PSFE.WS) is a leading payments platform with an extensive track record of serving merchants and consumers in the global entertainment sectors. Its core purpose is to enable businesses and consumers to connect and transact seamlessly through industry-leading capabilities in payment processing, digital wallet, and online cash solutions. With over 20 years of online payment experience, an annualized transactional volume of $140 billion in 2023, and approximately 3,200 employees located in 12+ countries, Paysafe connects businesses and consumers across 260 payment types in over 40 currencies around the world. Delivered through an integrated platform, Paysafe solutions are geared toward mobile-initiated transactions, real-time analytics and the convergence between brick-and-mortar and online payments. Further information is available at www.paysafe.com.

Forward-looking Statements

This press release includes “forward-looking statements” within the meaning of U.S. federal securities laws. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Paysafe Limited’s (“Paysafe,” “PSFE,” the “Company,” “we,” “us,” or “our”) actual results may differ from their expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “anticipate,” “appear,” “approximate,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “forecast,” “foresee,” “guidance,” “intends,” “likely,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would” and variations of such words and similar expressions (or the negative version of such words or expressions) may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include, without limitation, Paysafe’s expectations with respect to future performance.

These forward-looking statements involve significant risks, uncertainties, and events that may cause the actual results to differ materially, and potentially adversely, from those expressed or implied in the forward-looking statements. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: cyberattacks and security vulnerabilities; complying with and changes in money laundering regulations, financial services regulations, cryptocurrency regulations, consumer and business privacy and data use regulations or other regulations in Bermuda, the UK, Ireland, Switzerland, the United States, Canada and elsewhere; risks related to our focus on specialized and high-risk verticals; geopolitical events and the economic and other impacts of such geopolitical events and the responses of governments around the world; acts of war and terrorism; the effects of global economic uncertainties, including inflationary pressure and rising interest rates, on consumer and business spending; risks associated with foreign currency exchange rate fluctuations; changes in our relationships with banks, payment card networks, issuers and financial institutions; risk related to processing online payments for merchants and customers engaged in the online gambling and foreign exchange trading sectors; risks related to becoming an unwitting party to fraud or being deemed to be handling proceeds resulting from the criminal activity by customers; the effects of chargebacks, merchant insolvency and consumer deposit settlement risk; changes to our continued financial institution sponsorships; failure to hold, safeguard or account accurately for merchant or customer funds; risks related to the availability, integrity and security of internal and external IT transaction processing systems and services; our ability to manage regulatory and litigation risks, and the outcome of legal and regulatory proceedings; failure of fourth parties to comply with contractual obligations; changes and compliance with payment card network operating rules; substantial and increasingly intense competition worldwide in the global payments industry; risks related to developing and maintaining effective internal controls over financial reporting; managing our growth effectively, including growing our revenue pipeline; any difficulties maintaining a strong and trusted brand; keeping pace with rapid technological developments; risks associated with the significant influence of our principal shareholders; the effect of regional epidemics or a global pandemic on our business; and other factors included in the “Risk Factors” in our Form 20-F and in other filings we make with the SEC, which are available at https://www.sec.gov. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made.

The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in their expectations with respect thereto or any change in events.

Paysafe Limited Condensed Consolidated Balance Sheets (unaudited)

Paysafe Limited Condensed Consolidated Statements of Operations (unaudited)

Paysafe Limited Consolidated Net (loss) / income per share attributable to the Company

Paysafe Limited Condensed Consolidated Statements of Cash Flow (unaudited)

Contacts

Media

Crystal Wright

Paysafe

[email protected]
+1 (904) 328-7740

Investors

Kirsten Nielsen

Paysafe

+1 (646) 901-3140

[email protected]

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