Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2022 shares | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Jun. 30, 2022 |
Entity File Number | 001-40547 |
Entity Registrant Name | Payoneer Global Inc. |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 86-1778671 |
Entity Address State Or Province | NY |
Entity Address, Address Line One | 150 W 30th St |
Entity Address, City or Town | New York |
Entity Address, Postal Zip Code | 10001 |
City Area Code | 212 |
Local Phone Number | 600-9272 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 346,439,294 |
Entity Central Index Key | 0001845815 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Common Stock [Member] | |
Title of 12(b) Security | Common Stock, par value $0.01 per share |
Trading Symbol | PAYO |
Security Exchange Name | NASDAQ |
Warrants | |
Title of 12(b) Security | Warrants, each exercisable for one share of common stock, $0.01 par value, at an exercise price of $11.50 per share |
Trading Symbol | PAYOW |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 492,002 | $ 465,926 |
Restricted cash | 3,102 | 3,000 |
Customer funds | 5,140,642 | 4,401,254 |
Accounts receivable, net | 14,334 | 13,844 |
CA receivables, net | 38,602 | 53,675 |
Other current assets | 31,206 | 25,024 |
Total current assets | 5,719,888 | 4,962,723 |
Non-current assets: | ||
Property, equipment and software, net | 13,414 | 12,140 |
Goodwill | 19,480 | 21,127 |
Intangible assets, net | 39,806 | 37,529 |
Restricted cash | 5,349 | 5,113 |
Deferred taxes | 3,834 | 4,900 |
Investment in associated company | 6,635 | 7,013 |
Severance pay fund | 1,242 | 1,723 |
Operating lease right-of-use asset | 19,075 | 12,943 |
Other assets | 13,564 | 13,541 |
Total assets | 5,842,287 | 5,078,752 |
Current liabilities: | ||
Trade payables | 26,738 | 17,200 |
Outstanding operating balances | 5,140,642 | 4,401,254 |
Other payables | 73,479 | 79,374 |
Total current liabilities | 5,240,859 | 4,497,828 |
Non-current liabilities: | ||
Long-term debt from related party (refer to Notes 6 and 14 for further information) | 14,769 | 13,665 |
Warrant liability | 15,850 | 59,877 |
Other long-term liabilities | 27,879 | 20,309 |
Total liabilities | 5,299,357 | 4,591,679 |
Commitments and contingencies (Note 8) | ||
Shareholders' equity: | ||
Preferred stock, $0.01 par value, 380,000,000 shares authorized; no shares were issued and outstanding at June 30, 2022 and December 31, 2021. | ||
Common stock, $0.01 par value, 3,800,000,000 and 3,800,000,000 shares authorized; 346,439,294 and 340,384,157 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively. | 3,464 | 3,404 |
Additional paid-in capital | 611,997 | 575,470 |
Accumulated other comprehensive income (loss) | (605) | 2,253 |
Accumulated deficit | (71,926) | (94,054) |
Total shareholders' equity | 542,930 | 487,073 |
Total liabilities and shareholders' equity | $ 5,842,287 | $ 5,078,752 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 380,000,000 | 380,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 3,800,000,000 | 3,800,000,000 |
Common stock, shares issued | 346,439,294 | 340,384,157 |
Common stock, shares outstanding | 346,439,294 | 340,384,157 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) | ||||
Revenues | $ 148,190 | $ 110,927 | $ 285,148 | $ 211,533 |
Transaction costs ($338 and $658 interest expense and fees associated with related party transaction during the three and six months ended June 30, 2022, respectively; refer to Notes 6 and 14 for further information) | 26,212 | 28,521 | 51,787 | 48,676 |
Other operating expenses | 35,392 | 32,010 | 70,151 | 58,624 |
Research and development expenses | 26,607 | 18,541 | 52,522 | 35,194 |
Sales and marketing expenses | 36,820 | 27,702 | 71,289 | 50,841 |
General and administrative expenses | 20,192 | 18,163 | 38,320 | 28,680 |
Depreciation and amortization | 5,171 | 4,351 | 9,626 | 9,028 |
Total operating expenses | 150,394 | 129,288 | 293,695 | 231,043 |
Operating loss | (2,204) | (18,361) | (8,547) | (19,510) |
Financial income (expense): | ||||
Gain from change in fair value of Warrants | 12,831 | 12,076 | 44,027 | 12,076 |
Other financial expense, net | (4,824) | (2,937) | (7,519) | (3,559) |
Financial income (expense), net | 8,007 | 9,139 | 36,508 | 8,517 |
Income (loss) before taxes on income and share of gain (loss) of associated company | 5,803 | (9,222) | 27,961 | (10,993) |
Taxes on income | 1,374 | 3,197 | 3,341 | 4,928 |
Share in gain (loss) of associated company | (7) | 5 | 13 | (1) |
Net income (loss) | $ 4,422 | $ (12,414) | $ 24,633 | $ (15,922) |
Per share data | ||||
Net income (loss) per share attributable to common stockholders - Basic earnings (loss) per share | $ 0.01 | $ (0.63) | $ 0.07 | $ (0.84) |
Diluted earnings (loss) per share | $ 0.01 | $ (0.63) | $ 0.07 | $ (0.84) |
Weighted average common shares outstanding - Basic and diluted | 345,522,076 | 66,744,348 | 345,831,177 | 58,702,320 |
Weighted average common shares outstanding - Diluted | 366,013,696 | 66,744,348 | 369,047,627 | 58,702,320 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) | ||
Interest expense and fees associated with related party transaction | $ 338 | $ 658 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income (loss) | $ 4,422 | $ (12,414) | $ 24,633 | $ (15,922) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (3,248) | 451 | (2,858) | (738) |
Comprehensive income (loss) | $ 1,174 | $ (11,963) | $ 21,775 | $ (16,660) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE PREFERRED STOCK, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS EQUITY - USD ($) $ in Thousands | Redeemable convertible preferred stock Preferred Stock | Redeemable preferred stock Preferred Stock | Common Stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Accumulated deficit Adoption of new accounting standard | Accumulated deficit | Adoption of new accounting standard | Total |
Beginning balance at Dec. 31, 2020 | $ 154,800 | $ 10,735 | |||||||
Beginning balance (in shares) at Dec. 31, 2020 | 209,529,798 | 3,500 | |||||||
Beginning balance at Dec. 31, 2020 | $ 486 | $ 79,706 | $ 4,174 | $ (60,067) | $ 24,299 | ||||
Beginning balance (in shares) at Dec. 31, 2020 | 48,608,176 | ||||||||
Reverse Recapitalization transaction | $ (154,800) | $ 2,498 | 189,056 | 191,554 | |||||
Reverse Recapitalization transaction (in shares) | (209,529,798) | (249,792,546) | |||||||
PIPE financing | $ 300 | 279,885 | 280,185 | ||||||
PIPE financing (in shares) | 30,000,000 | ||||||||
Redemption of Redeemable Preferred Stock | $ (10,735) | (29,069) | (29,069) | ||||||
Redemption of Redeemable Preferred Stock (in shares) | (3,500) | ||||||||
Exercise of options | $ 100 | 16,246 | 16,346 | ||||||
Exercise of options (in shares) | 9,951,255 | ||||||||
Stock-based compensation | 15,128 | 15,128 | |||||||
Other comprehensive income (loss), net of tax | (738) | (738) | |||||||
Net income (loss) | (15,922) | (15,922) | |||||||
Ending balance at Jun. 30, 2021 | $ 3,384 | 550,952 | 3,436 | (75,989) | 481,783 | ||||
Ending balance (in shares) at Jun. 30, 2021 | 338,351,977 | ||||||||
Beginning balance at Mar. 31, 2021 | $ 154,800 | $ 10,735 | |||||||
Beginning balance (in shares) at Mar. 31, 2021 | 209,529,798 | 3,500 | |||||||
Beginning balance at Mar. 31, 2021 | $ 497 | 84,532 | 2,985 | (63,575) | 24,439 | ||||
Beginning balance (in shares) at Mar. 31, 2021 | 49,697,982 | ||||||||
Reverse Recapitalization transaction | $ (154,800) | $ 2,498 | 189,056 | 191,554 | |||||
Reverse Recapitalization transaction (in shares) | (209,529,798) | (249,792,546) | |||||||
PIPE financing | $ 300 | 279,885 | 280,185 | ||||||
PIPE financing (in shares) | 30,000,000 | ||||||||
Redemption of Redeemable Preferred Stock | $ (10,735) | (29,069) | (29,069) | ||||||
Redemption of Redeemable Preferred Stock (in shares) | (3,500) | ||||||||
Exercise of options | $ 89 | 15,788 | 15,877 | ||||||
Exercise of options (in shares) | 8,861,449 | ||||||||
Stock-based compensation | 10,760 | 10,760 | |||||||
Other comprehensive income (loss), net of tax | 451 | 451 | |||||||
Net income (loss) | (12,414) | (12,414) | |||||||
Ending balance at Jun. 30, 2021 | $ 3,384 | 550,952 | 3,436 | (75,989) | 481,783 | ||||
Ending balance (in shares) at Jun. 30, 2021 | 338,351,977 | ||||||||
Beginning balance at Dec. 31, 2021 | $ 3,404 | 575,470 | 2,253 | $ (2,505) | (94,054) | $ (2,505) | 487,073 | ||
Beginning balance (in shares) at Dec. 31, 2021 | 340,384,157 | ||||||||
Exercise of options | $ 60 | 11,252 | 11,312 | ||||||
Exercise of options (in shares) | 6,055,137 | ||||||||
Stock-based compensation | 25,275 | 25,275 | |||||||
Other comprehensive income (loss), net of tax | (2,858) | (2,858) | |||||||
Net income (loss) | 24,633 | 24,633 | |||||||
Ending balance at Jun. 30, 2022 | $ 3,464 | 611,997 | (605) | (71,926) | 542,930 | ||||
Ending balance (in shares) at Jun. 30, 2022 | 346,439,294 | ||||||||
Beginning balance at Mar. 31, 2022 | $ 3,426 | 592,243 | 2,643 | (76,348) | 521,964 | ||||
Beginning balance (in shares) at Mar. 31, 2022 | 342,596,367 | ||||||||
Exercise of options | $ 38 | 7,593 | 7,631 | ||||||
Exercise of options (in shares) | 3,842,927 | ||||||||
Stock-based compensation | 12,161 | 12,161 | |||||||
Other comprehensive income (loss), net of tax | (3,248) | (3,248) | |||||||
Net income (loss) | 4,422 | 4,422 | |||||||
Ending balance at Jun. 30, 2022 | $ 3,464 | $ 611,997 | $ (605) | $ (71,926) | $ 542,930 | ||||
Ending balance (in shares) at Jun. 30, 2022 | 346,439,294 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash Flows from Operating Activities | ||
Net income (loss) | $ 24,633 | $ (15,922) |
Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 9,626 | 9,028 |
Deferred taxes | 1,066 | 344 |
Stock-based compensation expenses | 25,275 | 15,128 |
Share in loss (gain) of associated company | (13) | 1 |
Gain from change in fair value of Warrants | (44,027) | (12,076) |
Transaction costs allocated to Warrants | 5,087 | |
Foreign currency re-measurement loss | 2,491 | 861 |
Changes in operating assets and liabilities: | ||
Other current assets | (6,650) | (8,311) |
Trade payables | 9,538 | (468) |
Deferred revenue | 24 | 1,862 |
Accounts receivables | (490) | 5,560 |
CA extended to customers | (109,422) | (189,927) |
CA collected from customers | 121,990 | 206,796 |
Other payables | (6,318) | 1,407 |
Other long-term liabilities | (3,695) | (3,582) |
Operating lease right-of-use assets | 5,134 | 4,676 |
Other assets | (288) | (3,768) |
Net cash provided by operating activities | 28,874 | 16,696 |
Cash Flows from Investing Activities | ||
Purchase of property, equipment and software | (5,093) | (2,044) |
Capitalization of internal use software | (7,772) | (6,646) |
Severance pay fund (contributions) distributions, net | 481 | (423) |
Customer funds in transit, net | (22,139) | 9,396 |
Net cash provided by (used in) investing activities | (34,523) | 283 |
Cash Flows from Financing Activities | ||
Exercise of options | 11,312 | 16,346 |
Outstanding operating balances | 739,388 | 287,486 |
Proceeds from Reverse Recapitalization, net | 108,643 | |
Proceeds from PIPE financing, net | 280,185 | |
Proceeds from related party facility, net | 1,103 | |
Repayment of long-term debt | (40,025) | |
Net cash provided by financing activities | 751,803 | 652,635 |
Effect of exchange rate changes on cash and cash equivalents | (2,491) | (871) |
Net change in cash, cash equivalents, restricted cash and customer funds | 743,663 | 668,743 |
Cash, cash equivalents, restricted cash and customer funds at beginning of the period | 4,838,433 | 3,413,289 |
Cash, cash equivalents, restricted cash and customer funds at end of the period | $ 5,582,096 | $ 4,082,032 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Reconciliation of cash, cash equivalents, restricted cash and customer funds - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2022 | |
Reconciliation of cash, cash equivalents, restricted cash and customer funds | ||
Cash and cash equivalents | $ 498,706 | $ 492,002 |
Restricted cash | 7,733 | 8,451 |
Customer funds | 3,575,593 | 5,081,643 |
Total cash, cash equivalents, restricted cash and customer funds shown in the consolidated statements of cash flows | 4,082,032 | 5,582,096 |
Customer funds in transit | 58,618 | $ 58,999 |
Supplemental schedule about Reverse Recapitalization | ||
Cash held by FTOC and cash related to FTOC trust, net of redemptions | 574,961 | |
Less cash consideration paid to Legacy Payoneer Shareholders | 398,201 | |
Less cash paid associated with transaction costs allocated to Reverse Recapitalization | 68,117 | |
Reverse Recapitalization financing | 108,643 | |
Cash related to PIPE | 300,000 | |
Less cash paid associated with transaction costs allocated to PIPE | 19,815 | |
PIPE financing | 280,185 | |
Net contributions from Reverse Recapitalization and PIPE financing | $ 388,828 |
GENERAL OVERVIEW
GENERAL OVERVIEW | 6 Months Ended |
Jun. 30, 2022 | |
GENERAL OVERVIEW | |
GENERAL OVERVIEW | NOTE 1 – GENERAL OVERVIEW Unless otherwise noted herein, “we”, “us”, “our”, “Payoneer”, and the “Company” refer to Payoneer Inc. for the period prior to the Closing Date (as defined below) and to Payoneer Global Inc. for the period thereafter. On June 25, 2021 (the “Closing Date”), FTAC Olympus Acquisition Corporation (“FTOC”), consummated the previously announced merger pursuant to the Agreement and Plan of Reorganization (the “Reorganization Agreement”), dated February 3, 2021, as amended, by and among FTOC, Payoneer Inc. (“Legacy Payoneer”), New Starship Parent Inc., a Delaware corporation (“New Starship”), Starship Merger Sub I Inc., a Delaware corporation and a direct, wholly owned subsidiary of New Starship (“First Merger Sub”), Starship Merger Sub II Inc., a Delaware corporation and a direct, wholly owned subsidiary of New Starship (“Second Merger Sub”). Pursuant to the terms of the Reorganization Agreement, a transaction between FTOC and Legacy Payoneer was effected through the merger of First Merger Sub with and into FTOC and through a merger of Second Merger Sub with and into Legacy Payoneer (the “Reverse Recapitalization”). On the Closing Date, and in connection with the closing of the Reverse Recapitalization, New Starship became the combined company and changed its name to Payoneer Global Inc. (the “Company”). Legacy Payoneer was deemed the accounting acquirer in the Reverse Recapitalization based on an analysis of the criteria outlined in Accounting Standards Codification (“ASC”) 805. This determination was primarily based on Legacy Payoneer’s stockholders prior to the Reverse Recapitalization having a majority of the voting interests in the combined company, Legacy Payoneer’s operations comprising the ongoing operations of the combined company, Legacy Payoneer’s board of directors comprising a majority of the board of directors of the combined company, Legacy Payoneer’s senior management comprising the senior management of the combined company and the assets and revenue of Legacy Payoneer were greater than those of FTOC. As FTOC does not meet the definition of a “business” for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Legacy Payoneer issuing stock for the net assets of FTOC, accompanied by a recapitalization. The net assets of FTOC are stated at historical cost, with no goodwill or other intangible assets recorded. While FTOC was the legal acquirer in the Reverse Recapitalization because Legacy Payoneer was deemed the accounting acquirer, the historical financial statements of Legacy Payoneer became the historical financial statements of the combined company upon the consummation of the Reverse Recapitalization. As a result, the financial statements included in this report reflect (i) the historical operating results of Legacy Payoneer prior to the Reverse Recapitalization; (ii) the combined results of the Company and Legacy Payoneer following the closing of the Reverse Recapitalization; (iii) the assets and liabilities of Legacy Payoneer at their historical cost; and (iv) the Company’s equity structure for all periods presented. In accordance with guidance applicable to these circumstances, the equity structure has been retroactively adjusted in all comparative periods up to the Closing Date, to reflect the number of shares of the Company’s common stock, $0.01 par value per share issued to Legacy Payoneer’s stockholders in connection with the Reverse Recapitalization transaction. As such, the shares and corresponding capital amounts and earnings per share related to Legacy Payoneer redeemable convertible preferred stock and common stock prior to the Reverse Recapitalization have been retroactively restated as shares reflecting the exchange ratio established pursuant to the Reorganization Agreement. In conjunction with the Reverse Recapitalization, the Company’s Common Stock underwent a 1-for- 1.88 Beginning in January 2020, the COVID-19 pandemic impacted our teams, customers, and supply chains. Starting in March 2020, due to broader travel restrictions, global travel and tourism slowed, negatively impacting our travel customer base. Furthermore, the Federal Reserve cut interest rates to zero in mid-March 2020, negatively impacting our interest income revenues associated with underlying customer accounts. In the first half of 2022, global travel and tourism started to return and some travel restrictions were lifted, positively impacting our travel customer base. In addition, in the first half of 2022, the U.S. Federal Reserve raised the benchmark interest rate by 100 basis points to combat rising inflation concerns, positively impacting our interest income revenues associated with underlying customer accounts. Despite the recent acceleration of travel and interest rate increases, uncertainties remain around the current trajectory of travel growth and other macroeconomic factors. NOTE 1 – GENERAL OVERVIEW (continued) During early 2022, a geopolitical and armed conflict between Ukraine and Russia culminated in several countries, including the US, imposing economic sanctions on Russia, Belarus, and certain territories in Ukraine, including on certain Russian and Belarussian banks and entities. Payoneer provides services to customers in Ukraine and in jurisdictions that are or may be impacted by these economic sanctions. We are continually acting to comply with the imposed sanctions. In addition, we reduced our payment services to Russia and Belarus customers. At this time, it is difficult to assess the impact the conflict in Ukraine, the related economic sanctions and the reduction in services to Russia and Belarus customers may have on our results of operations. For the three and six months ended June 30, 2022, Russia and Belarus, combined, accounted for less than 3% of our revenue for each such period, while together with Ukraine, all three countries accounted for slightly less than 10% of our revenue for each such period. There was immaterial impact on revenue from Ukraine, Russia and Belarus during the three and six months ended June 30, 2022 as compared to the three and six months ended June 30, 2021. Continuation or escalation of the conflict may have a material effect on our results of operations. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2022 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES a. Principles of consolidation and basis of presentation: The accompanying condensed consolidated financial statements include the accounts of Payoneer Global Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Investments in an entity where we have the ability to exercise significant influence, but not control, over the investee are accounted for using the equity method of accounting. For such investments, our share of the investee’s results of operations is shown within Share in losses of associated company on our condensed consolidated statements of income and our investment balance as an investment in associated company on our condensed consolidated balance sheets. The consolidated interim financial information herein is unaudited; however, such information reflects all adjustments (consisting of normal, recurring adjustments and except for the Reverse Recapitalization), which are, in the opinion of management, necessary for a fair statement of results for the interim period. The results of operations for the three months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year. The year-end condensed balance sheet data was derived from audited financial statements for the year ended December 31, 2021 but does not include all disclosures required by accounting principles generally accepted in the United States of America. These unaudited financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto of Payoneer Global Inc. and Legacy Payoneer and its subsidiaries. b. Accounting principles: The condensed consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America (hereafter - U.S. GAAP). c. Use of estimates in the preparation of financial statements: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include, but are not limited to, share-based compensation, revenue recognition, valuation allowance on deferred taxes, contingencies, transaction loss provision and allowance for CA losses. NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued) d. Capital Advance (CA) receivable, net: The Company enters into transactions with pre-qualified sellers in which the Company purchases a designated amount of future receivables for an upfront cash purchase price. During the six months ended June 30, 2022 and 2021, the Company has purchased and collected the following principal amounts associated with CAs: June 30, 2022 2021 Beginning CA receivables, gross $ 56,101 $ 67,682 CA extended to customers 109,713 193,567 Change in revenue receivables 44 117 CA collected from customers (122,034) (206,014) Charge-offs, net of recoveries (1,349) (354) Ending CA receivables, gross $ 42,475 $ 54,998 Allowance for CA losses (3,873) (5,772) CA receivables, net $ 38,602 $ 49,226 The outstanding gross balance at June 30, 2022 consists of the following current and overdue amounts: 1 ‑ 30 days 30 ‑ 60 60 ‑ 90 Above 90 Total Current overdue overdue overdue overdue $ 42,475 39,158 1,065 721 236 1,295 The outstanding gross balance at December 31, 2021 consists of the following current and overdue amounts: 1 ‑ 30 days 30 ‑ 60 60 ‑ 90 Above 90 Total Current overdue overdue overdue overdue $ 56,101 53,150 964 704 163 1,120 The following are current and overdue balances from above that are segregated into the timing of expected collections at June 30, 2022: Due in less Due in 30 ‑ 60 Due in 60 ‑ 90 Due in more Total Overdue than 30 days days days than 90 days $ 42,475 3,318 8,178 6,753 18,365 5,861 The following are current and overdue balances from above that are segregated into the timing of expected collections at December 31, 2021: Due in less Due in 30 ‑ 60 Due in 60 ‑ 90 Due in more Total Overdue than 30 days days days than 90 days $ 56,101 2,951 9,511 12,457 23,008 8,174 NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued) d. Capital Advance (CA) receivable, net (continued): Beginning in 2022, allowance for CA losses is primarily based on expectations of credit losses based on historical lifetime loss data as well as macroeconomic forecasts applied to the portfolio, which is segmented by programs. Loss rates are generated using historical loss data for each portfolio and are applied to segments of each portfolio. We then apply macroeconomic factors such as market unemployment rate, current and forecasted GDP, S&P yield and inflation rate, which are sourced externally, using a single scenario that we believe is most appropriate to the economic conditions applicable to a particular period. Expected credit loss, inclusive of historical loss data and macroeconomic factors, are applied to the principal amount of our CA receivables. Prior to 2022, the Company had implemented a risk-based methodology that was used to estimate future losses based on historical loss experience as well as the qualitative judgment when historical loss data was not available. For product offerings with sufficient historical loss experience, the Company developed loss estimates based on receivable balance attributes such as account payment status, percentage of collections per day, and length of time from advance to collection. Based on these attributes, a historical loss rate is applied to calculate the allowance for CA losses. For product offerings that did not have significant historical loss data to develop a historical loss percentage, the Company estimated losses by evaluating portfolio factors such as average balance outstanding by customer as well as creating specific identification provisions for known collection risks. As of June 30, 2022, the Company applied a range of loss rates to the CA portfolio of 0.7% to 1.6% for the allowance for CA losses. As of June 30, 2021, the Company applied a range of loss rates to the CA portfolio of 2.8% to 4.1%. Below is a rollforward for the allowance for CA losses (“ALCAL”) for the six months ended June 30, 2022 and 2021: June 30, 2022 2021 Beginning balance $ 2,426 $ 1,587 Adjustment for adoption of new accounting standard 2,505 — Provisions 1,293 8,035 Recoveries (1,002) (3,441) Charge-offs (1,349) (409) Ending balance $ 3,873 $ 5,772 e. Revenue: Entity-wide disclosure We determine operating segments based on how our Chief Operating Decision Maker (“CODM”) manages the business, makes operating decisions around the allocation of resources, and evaluates operating performance. The CODM are the Company’s Co- Chief Executive Officers, who review our operating results on a consolidated basis. We operate in one segment and have one reportable segment. Based on the information provided to and reviewed by our CODM, we believe that the nature, amount, timing, and uncertainty of our revenue and cash flows and how they are affected by economic factors are most appropriately depicted through our primary geographical markets. NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued) e. Revenue (continued): The following table presents our revenue disaggregated by primary geographical market where revenues are attributable to the country in which the billing address of the customer is located. Three months ended Six months ended June 30, June 30, 2022 2021 2022 2021 Primary geographical markets Greater China (1) $ 46,785 $ 37,640 $ 89,826 $ 77,027 United States 18,528 13,409 38,310 21,368 All other countries (2) 82,877 59,878 157,012 113,138 Total revenues $ 148,190 $ 110,927 $ 285,148 $ 211,533 (1) Greater China is inclusive of Mainland China, Hong Kong and Taiwan (2) No single country included in the other countries’ category generated more than 10% of total revenue The company did not have any customers during the three and six months ended June 30, 2022 and 2021 that individually contributed greater than 10% of revenue, respectively. Disaggregation of revenue The following table presents revenue recognized from contracts with customers as well as revenue from other sources, consisting of interest income: Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Revenue recognized at a point in time $ 135,063 $ 102,425 $ 261,006 $ 199,768 Revenue recognized over time 9,634 7,856 19,790 10,590 Revenue from contracts with customers 144,697 110,281 280,796 210,358 Revenue from other sources 3,493 646 4,352 1,175 Total revenues $ 148,190 $ 110,927 $ 285,148 $ 211,533 Customer acquisition costs The Company recognizes an asset for incremental costs to obtain a contract such as sales commissions and other customer incentives. The asset is amortized on a systematic basis over the expected customer relationship period, which is estimated to be 1.8 years and is consistent with the pattern of recognition of the associated revenue. The Company periodically reviews these deferred customer acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. There were no impairment losses recorded during the periods presented. The following table represents a rollforward of deferred customer acquisition costs for the six months ended: June 30, 2022 2021 Opening balance $ 11,366 $ 8,976 Additions to deferred customer acquisition costs 6,378 2,628 Amortization of deferred customer acquisition costs (5,933) (2,089) Ending balance $ 11,811 $ 9,515 NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued) f. Recently issued accounting pronouncements: As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act until such time the Company no longer meets the definition of EGC. The adoption dates referenced below reflect this election, except for permitted early adoption upon the Company’s election. The Company will become a large accelerated filer on the last day of its fiscal year 2022 and, therefore, the company will no longer qualify as an EGC. The anticipated adoption dates of standards issued, but not yet adopted reflect this upcoming change in status. Financial Accounting Standards Board (“FASB”) standards adopted during 2022 In 2016, the FASB issued new guidance on the measurement of credit losses on financial instruments. Credit losses on loans, trade and other receivables, held-to-maturity debt securities and other instruments will reflect the Company’s current estimate of the expected credit losses (“CECL”). CECL requires loss estimates for the remaining estimated life of the financial instrument using historical experience, current conditions, and reasonable and supportable forecasts. Generally, the Company expected that CECL will result in the earlier recognition of allowances for losses compared to the current approach of estimating probable incurred losses. The Company is required to apply the provisions of this guidance as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company early adopted the new guidance effective January 1, 2022. For additional information, refer to Note 2d. In 2020, the FASB issued guidance simplifying the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. In addition to other changes, this standard amends ASC 470-20, “Debt with Conversion and Other Options,” by removing the accounting models for instruments with beneficial conversion features and cash conversion features. The standard also amends ASC 260, “Earnings Per Share” addressing the impacts of these instruments. The guidance is effective for the fiscal year beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company early adopted this guidance effective January 1, 2022 and the impact of the adoption on the consolidated financial statements was immaterial. FASB Standards issued, but not adopted as of June 30, 2022 In 2020, the FASB issued amended guidance that provides transition relief for the accounting impact of reference rate reform. For a limited duration, this guidance provides optional expedients and exceptions for applying GAAP to certain contract modifications, hedging relationships, and other transactions that will be impacted by a reference rate expected to be discontinued due to reference rate reform. The amended guidance is effective through December 31, 2022. The Company does not expect reference rate reform to have a material impact on the Company’s financial statements. |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 6 Months Ended |
Jun. 30, 2022 | |
OTHER CURRENT ASSETS | |
OTHER CURRENT ASSETS | NOTE 3 - OTHER CURRENT ASSETS Composition of other current assets, grouped by major classifications, is as follows: June 30, December 31, 2022 2021 Prepaid expenses $ 13,048 $ 9,598 Prepaid income taxes 7,390 2,789 Income receivable 7,544 9,825 Other 3,224 2,812 Total other current assets $ 31,206 $ 25,024 |
PROPERTY, EQUIPMENT AND SOFTWAR
PROPERTY, EQUIPMENT AND SOFTWARE, NET | 6 Months Ended |
Jun. 30, 2022 | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | NOTE 4 – PROPERTY, EQUIPMENT AND SOFTWARE, NET Composition of property, equipment and software, grouped by major classifications, is as follows: June 30, December 31, 2022 2021 Computers, software and peripheral equipment $ 36,956 $ 32,379 Leasehold improvements 9,258 8,920 Furniture and office equipment 4,252 4,074 Property, equipment and software 50,466 45,373 Accumulated depreciation (37,052) (33,233) Property, equipment and software, net $ 13,414 $ 12,140 Depreciation expense for the three months ended June 30, 2022 and 2021 were $2,155 and $1,682, respectively, and $4,071 and $3,441 for the six months ended June 30, 2022 and 2021, respectively. |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 6 Months Ended |
Jun. 30, 2022 | |
GOODWILL AND INTANGIBLE ASSETS, NET | |
GOODWILL AND INTANGIBLE ASSETS, NET | NOTE 5 – GOODWILL AND INTANGIBLE ASSETS, NET Goodwill The following table presents goodwill balances and adjustments to those balances during the six months ended June 30, 2022: December 31, Goodwill Translation June 30, 2021 Acquired Adjustments 2022 Total goodwill $ 21,127 — (1,647) $ 19,480 Intangible assets, net Composition of intangible assets, grouped by major classifications, is as follows: June 30, December 31, 2022 2021 Internal use software $ 63,298 $ 55,164 Developed technology 14,069 15,259 Intangible assets 77,367 70,423 Accumulated amortization (37,561) (32,894) Intangible assets, net $ 39,806 $ 37,529 Amortization expense for the three months ended June 30, 2022 and 2021 were $3,016 and $2,669 respectively, and $5,555 and $5,473 for the six months ended June 30, 2022 and 2021, respectively. No impairment was recognized during the three and six months ended June 30, 2022. During the three and six months ended June 30, 2021 the Company recognized impairment of internal use of software in the amount of $114, due to the abandonment of specific projects. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2022 | |
DEBT | |
DEBT | NOTE 6 – DEBT On October 28, 2021, Payoneer Early Payments Inc. (“PEPI”), a wholly-owned second tier subsidiary of the Company and its subsidiary (the “Borrower”) entered into a Receivables and Loan Security Agreement (the “Warehouse Facility”) with Viola Credit VI, L.P., Viola Credit Alternative Lending FNX SPV, L.P. (the “Lenders”) and Viola Credit Alternative Lending Management 2018 L.P. (collectively, the “Parties”) for the purpose of external financing of Capital Advance activity. The Company notes that the Lenders are related parties through the Company’s Board of Directors’ chairman’s ownership interest in the Lenders. Refer to Note 14 for further information regarding related party considerations. In accordance with the Warehouse Facility agreement, the Lenders will make available to the Company an initial committed amount of $25,000, which may be increased at the request of the Company, and with the consent of the Lenders, in $25,000 increments up to $100,000. The associated borrowings will be secured by the assets of the Borrower, which consist primarily of merchant cash advances as well as a pledge of the equity of the Borrower. The recourse under the Warehouse Facility agreement is limited to Borrower's assets, and no other Payoneer entity guarantees repayment by the Borrower. The Warehouse Facility agreement stipulates a borrowing base calculated at an advance rate of 80% out of the eligible portfolio outstanding receivables balance and that borrowings under the facility bear interest as follows: greater of 0.25% or LIBOR plus: ● 9.00% per annum if the commitment amount is $25,000; ● 7.75% per annum if the commitment amount is $50,000; ● 7.50% per annum if the commitment amount is $75,000; ● 7.00% per annum if the commitment amount is $100,000. On June 8, 2022, the Warehouse Facility agreement was amended to create a condition that the total interest rate, calculated as the sum per above, shall not exceed 10.5% per annum for all outstanding balances. The revolving period of the facility is 36 months from the closing date and the maturity date is 42 months from the date the Warehouse Facility agreement was entered into. The Company recorded expenses included in transaction cost in the total amount of $338 and $658 for the three and six months ended June 30, 2022, respectively. As of June 30, 2022, the outstanding associated balance was $14,769 with $104 of accrued expenses. As of December 31, 2021, the outstanding associated balance was $13,665 with $128 of accrued expenses. The Warehouse Facility agreement includes certain affirmative and negative covenants that must be maintained by the Company and includes certain financial measures such as minimum tangible equity and minimum unrestricted cash at the Company level. As of June 30, 2022 and December 31, 2021, the Company was in compliance with all applicable covenants. As of June 30, 2022 and December 31, 2021, the fair value of the debt approximates the book value due to the short time span between initiation and balance sheet date with the outstanding balance classified as Level 3 in the fair value leveling hierarchy as the inputs into the valuation are not observable. |
OTHER PAYABLES
OTHER PAYABLES | 6 Months Ended |
Jun. 30, 2022 | |
OTHER PAYABLES | |
OTHER PAYABLES | NOTE 7 - OTHER PAYABLES Composition of other payables, grouped by major classifications, is as follows: June 30, December 31, 2022 2021 Employee related compensation $ 42,938 $ 47,007 Commissions payable 11,755 10,712 Lease liability 8,567 9,290 Accrued expenses 8,129 10,661 Other 2,090 1,704 Total other payables $ 73,479 $ 79,374 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 – COMMITMENTS AND CONTINGENCIES The Company’s business is subject to various laws and regulations in the United States and other countries from where the Company operates. Any regulatory action, tax or legal challenge against the Company for noncompliance with any regulatory or legal requirement could result in significant fines, penalties, or other enforcement actions, increased costs of doing business through adverse judgment or settlement, reputational harm, the diversion of significant amounts of management time and operational resources, and could require changes in compliance requirements or limits on the Company’s ability to expand its product offerings, or otherwise harm or have a material adverse effect on the Company’s business. On September 28, 2021, the National Banking and Securities Commission (CNBV) and the Bank of Mexico revoked the banking license of a banking entity utilized by the Company due to the banking entity not meeting applicable capital requirements. As a result, the Company is unable to withdraw funds from the banking entity. The Company has reserved $2,250 for potential losses related to the inaccessible funds above the recovered amount. The Company applied for and recovered the maximum statutory reimbursement through the deposit insurance provided by Mexican Institute for the Protection of Banking Services (IPAB), totaling $140. The Company has made a claim in liquidation for the remaining funds; however, the percentage of the deposit that will be recovered in liquidation is not known at this time. From time to time, the Company is involved in other disputes or regulatory inquiries that arise in the ordinary course of business. These may include suits by our customers (individually or as class actions) alleging, among other things, acting unfairly and/or not in conformity regarding pricing, rules or agreements, improper disclosure of our prices, rules, or policies or that our practices, prices, rules, policies, or customer agreements violate applicable law. In addition to these types of disputes and regulatory inquiries, the operations of the Company are also subject to regulatory and/or legal review and/or challenges that tend to reflect the increasing global regulatory focus to which the industry in which the Company operates is subject and, when taken as a whole with other regulatory and legislative action, such actions could result in the imposition of costly new compliance burdens on the Company and may lead to increased costs and decreased transaction volume and revenue. Any claims or regulatory actions against the Company, whether meritorious or not, could be time consuming, result in costly litigation, settlement payments, damage awards (including statutory damages for certain causes of action in certain jurisdictions), fines, penalties, injunctive relief, or increased costs of doing business through adverse judgment or settlement, require the Company to change our business practices, require significant amounts of management time, result in the diversion of operational resources, or otherwise harm the business. |
WARRANTS
WARRANTS | 6 Months Ended |
Jun. 30, 2022 | |
WARRANTS. | |
WARRANTS | NOTE 9 – WARRANTS The Company has warrants that are exercisable for shares of the Company’s common stock. Warrants may only be exercised for a whole number of shares at an exercise price of $11.50. These warrants expire on June 25, 2026. At June 30, 2022, there were 25,158,086 warrants outstanding with a corresponding liability valued at $15,850. The warrants are considered to be a Level 1 fair value measurement due to the observability of the inputs. Note that 723,333 Placement Warrants were forfeited at the close of the Reverse Recapitalization transaction. The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on our balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the consolidated statement of operations. The following table presents the changes in the fair value of warrant liabilities: Warrant Liability Fair value as of December 31, 2021 $ 59,877 Change in fair value (44,027) Fair value as of June 30, 2022 $ 15,850 Initial measurement as of June 25, 2021 $ 71,701 Change in fair value (12,076) Fair value as of June 30, 2021 $ 59,625 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2022 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 10 – STOCK-BASED COMPENSATION Stock Options and RSUs The following table summarizes the options to purchase shares of common stock activity under our equity incentive plans for the six months ended June 30, 2022: Options Outstanding at December 31, 2021 44,940,169 Granted — Exercised (5,543,336) Expired — Forfeited (1,559,308) Outstanding at June 30, 2022 37,837,525 Exercisable at June 30, 2022 28,931,045 The weighted average exercise price of the options outstanding as of June 30, 2022 was $4.36 per share. The following table summarizes the RSUs activity under our equity incentive plans as of June 30, 2022: Units Outstanding December 31, 2021 9,725,027 Awarded 13,229,187 Vested (500,874) Forfeited (1,357,293) Outstanding June 30, 2022 21,096,047 In the six months ended June 30, 2022, the Company granted options and RSUs that vest over a three Employee Stock Purchase Plan The Company initiated, on May 16, 2022, the first offering period under the Company’s Employee Stock Purchase Plan (the “ESPP”), the purpose of which is to provide employees of the Company and its designated subsidiaries with an opportunity to purchase Company Common Stock at a discount through payroll deductions and to help eligible employees provide for their future security and to encourage them to remain in the employment of the Company. Each eligible employee enrolling for any offering period under the ESPP is required to designate a whole percentage of their monthly payroll to be withheld by the Company or the designated subsidiary employing such eligible employee on each payday during the applicable offering period. The designated deduction percentage may not be less than 1% and may not be more than 15% of the employee’s salary, unless otherwise determined by the Company for any specific offering period. Any offering period is comprised of one or more 6 months NOTE 10 – STOCK-BASED COMPENSATION (continued) The impact on our results of operations of recording stock-based compensation expense under the Company’s equity incentive plans, including the ESPP, were as follows: Three Months Ended Six months ended June 30, June 30, 2022 2021 2022 2021 Other operating expenses $ 2,606 $ 2,427 $ 5,663 $ 3,626 Research and development expenses 2,387 1,153 4,600 2,052 Sales and marketing expenses 3,642 3,539 7,407 4,579 General and administrative expenses 3,255 3,552 7,128 4,711 Total stock-based compensation $ 11,890 $ 10,671 $ 24,798 $ 14,968 |
TRANSACTION COSTS
TRANSACTION COSTS | 6 Months Ended |
Jun. 30, 2022 | |
TRANSACTION COSTS | |
TRANSACTION COSTS | NOTE 11 - TRANSACTION COSTS Composition of transaction costs, grouped by major classifications, is as follows: Three Months Ended Six months ended June 30, June 30, 2022 2021 2022 2021 Bank and processor fees $ 20,778 $ 18,748 $ 40,524 $ 36,302 Network fees 3,518 3,061 6,934 2,343 Chargebacks and operational losses 781 587 1,282 1,751 Card costs 441 406 872 800 Capital advance costs 164 5,194 1,106 5,781 Other 530 525 1,069 1,699 Total transaction costs $ 26,212 $ 28,521 $ 51,787 $ 48,676 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2022 | |
INCOME TAXES | |
INCOME TAXES | NOTE 12 - INCOME TAXES The Company had an effective tax rate of 12% for the six months ended June 30, 2022 compared to effective tax rate of 45% for the six months ended June 30, 2021. The difference between the Company’s effective tax rate and the U.S. federal statutory rate was due to the result of foreign income taxed at different rates and the provision for a full valuation allowance in respect of tax benefits from carry forward tax losses due to the uncertainty of the realization of such tax benefits. |
NET EARNINGS (LOSS) PER SHARE
NET EARNINGS (LOSS) PER SHARE | 6 Months Ended |
Jun. 30, 2022 | |
NET EARNINGS (LOSS) PER SHARE | |
NET EARNINGS (LOSS) PER SHARE | NOTE 13 – NET EARNINGS (LOSS) PER SHARE The Company computes net loss per share using the two-class method required for participating securities. The two-class method requires income available to ordinary shareholders for the period to be allocated between shares of Common Stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company considers any issued and outstanding convertible preferred shares to be participating securities as the holders of the convertible preferred shares, as the case may be, would be entitled to dividends that would be distributed to the holders of ordinary shares, on a pro-rata basis assuming conversion of all convertible preferred shares into ordinary shares. These participating securities do not contractually require the holders of such shares to participate in the Company’s losses. As such, net loss for the period ended June 30, 2021 presented was not allocated to the Company’s participating securities. This was applied for the three and six month period ended June 30, 2021. The participating securities were converted in the Company's shares of common stock in June 2021. The Company’s basic net loss per share is calculated by dividing net loss attributable to ordinary shareholders by the weighted-average number of shares of ordinary shares outstanding for the period, without consideration of potentially dilutive securities. The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive shares of ordinary shares are anti-dilutive. The earn-out shares (as such term is defined in the Reorganization Agreement) which were subject to the occurrence of certain conditions, were excluded from the diluted net loss per share calculation for the three and six month period ended June 30, 2022, because the earn-out shares conditions were not met at the end of the reporting period. NOTE 13 – NET EARNINGS (LOSS) PER SHARE (continued) Basic and diluted net loss per share attributable to common stockholders was calculated as follows: Three Months Ended Six months ended June 30, June 30, 2022 2021 2022 2021 Numerator: Net income (loss) $ 4,422 $ (12,414) $ 24,633 $ (15,922) Less dividends and revaluation attributable to redeemable and redeemable convertible preferred stock — 29,611 — 33,632 Net income (loss) attributable to common stockholders $ 4,422 $ (42,025) $ 24,633 $ (49,554) Denominator: Weighted average common shares outstanding — Basic 345,522,076 66,744,348 345,831,177 58,702,320 Add: Dilutive impact of options to purchase common stock 19,844,013 — 22,541,797 — Dilutive impact of private warrants 647,607 — 674,653 — Weighted average common shares – diluted 366,013,696 66,744,348 369,047,627 58,702,320 Net income (loss) per share attributable To common stockholders — Basic earnings (loss) per share $ 0.01 $ (0.63) $ 0.07 $ (0.84) Diluted earnings (loss) per share $ 0.01 $ (0.63) $ 0.07 $ (0.84) Warrants and earn-out shares have been excluded from the computation of diluted net loss per share for the three and six months period ended June 30, 2022 as their effect was anti-dilutive or the conditions were not met as of the end of the reporting period. The Company’s potentially dilutive securities, which include stock options, preferred stock, warrants and deferred consideration related to the 2020 acquisition of Optile have been excluded from the computation of diluted net loss per share for the three and six months ended June 30, 2021 as their effect was anti-dilutive. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same, as shown in the above table. The Company excluded the following potential common shares , presented based on weighted average amounts outstanding from the computation of diluted net earnings (loss) per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: Three Months Ended Six months ended June 30, June 30, 2022 2021 2022 2021 Options to purchase common stock — 27,017,355 — 26,053,787 Redeemable convertible preferred stock (as converted to common stock) — 197,889,251 — 203,709,524 Warrants — 848,480 — 848,480 Total potentially dilutive securities — 225,755,086 — 230,611,791 *Note that 25,158,125 Warrants and 30,000,000 earn-out shares have been excluded from the computation of diluted net earnings per share for the three months period ended June 30, 2022 as their effect was anti-dilutive or the conditions were not met as of the end of the reporting period |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 14 – RELATED PARTY TRANSACTIONS As indicated in Note 6, the Company entered into a Warehouse Facility agreement with Lenders where a member of the Board of Directors has an interest. The Company has evaluated the relationship and determined that the Warehouse Facility agreement represents a related party transaction that has been entered into in the ordinary course of business. As such, the Warehouse Facility agreement was reviewed and approved as a related party transaction in accordance with the related party transaction approval process implemented by the Company. The Company analyzed the terms of Warehouse Facility agreement and concluded that the terms represent a transaction conducted at arm’s length. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Jun. 30, 2022 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENT | NOTE 15 – SUBSEQUENT EVENT On July 1, 2022, the Board of Directors approved the grant of equity awards to the Co-Chief Executive Officer of the Company who was appointed by the Board of Directors on May 24, 2022 (effective as of May 25, 2022), in accordance with the terms of his employment agreement. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Principles of consolidation and basis of presentation: | a. Principles of consolidation and basis of presentation: The accompanying condensed consolidated financial statements include the accounts of Payoneer Global Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Investments in an entity where we have the ability to exercise significant influence, but not control, over the investee are accounted for using the equity method of accounting. For such investments, our share of the investee’s results of operations is shown within Share in losses of associated company on our condensed consolidated statements of income and our investment balance as an investment in associated company on our condensed consolidated balance sheets. The consolidated interim financial information herein is unaudited; however, such information reflects all adjustments (consisting of normal, recurring adjustments and except for the Reverse Recapitalization), which are, in the opinion of management, necessary for a fair statement of results for the interim period. The results of operations for the three months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year. The year-end condensed balance sheet data was derived from audited financial statements for the year ended December 31, 2021 but does not include all disclosures required by accounting principles generally accepted in the United States of America. These unaudited financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto of Payoneer Global Inc. and Legacy Payoneer and its subsidiaries. |
Accounting principles: | b. Accounting principles: The condensed consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America (hereafter - U.S. GAAP). |
Use of estimates in the preparation of financial statements: | c. Use of estimates in the preparation of financial statements: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include, but are not limited to, share-based compensation, revenue recognition, valuation allowance on deferred taxes, contingencies, transaction loss provision and allowance for CA losses. |
Capital Advance (CA) receivable, net: | d. Capital Advance (CA) receivable, net: The Company enters into transactions with pre-qualified sellers in which the Company purchases a designated amount of future receivables for an upfront cash purchase price. During the six months ended June 30, 2022 and 2021, the Company has purchased and collected the following principal amounts associated with CAs: June 30, 2022 2021 Beginning CA receivables, gross $ 56,101 $ 67,682 CA extended to customers 109,713 193,567 Change in revenue receivables 44 117 CA collected from customers (122,034) (206,014) Charge-offs, net of recoveries (1,349) (354) Ending CA receivables, gross $ 42,475 $ 54,998 Allowance for CA losses (3,873) (5,772) CA receivables, net $ 38,602 $ 49,226 The outstanding gross balance at June 30, 2022 consists of the following current and overdue amounts: 1 ‑ 30 days 30 ‑ 60 60 ‑ 90 Above 90 Total Current overdue overdue overdue overdue $ 42,475 39,158 1,065 721 236 1,295 The outstanding gross balance at December 31, 2021 consists of the following current and overdue amounts: 1 ‑ 30 days 30 ‑ 60 60 ‑ 90 Above 90 Total Current overdue overdue overdue overdue $ 56,101 53,150 964 704 163 1,120 The following are current and overdue balances from above that are segregated into the timing of expected collections at June 30, 2022: Due in less Due in 30 ‑ 60 Due in 60 ‑ 90 Due in more Total Overdue than 30 days days days than 90 days $ 42,475 3,318 8,178 6,753 18,365 5,861 The following are current and overdue balances from above that are segregated into the timing of expected collections at December 31, 2021: Due in less Due in 30 ‑ 60 Due in 60 ‑ 90 Due in more Total Overdue than 30 days days days than 90 days $ 56,101 2,951 9,511 12,457 23,008 8,174 NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued) d. Capital Advance (CA) receivable, net (continued): Beginning in 2022, allowance for CA losses is primarily based on expectations of credit losses based on historical lifetime loss data as well as macroeconomic forecasts applied to the portfolio, which is segmented by programs. Loss rates are generated using historical loss data for each portfolio and are applied to segments of each portfolio. We then apply macroeconomic factors such as market unemployment rate, current and forecasted GDP, S&P yield and inflation rate, which are sourced externally, using a single scenario that we believe is most appropriate to the economic conditions applicable to a particular period. Expected credit loss, inclusive of historical loss data and macroeconomic factors, are applied to the principal amount of our CA receivables. Prior to 2022, the Company had implemented a risk-based methodology that was used to estimate future losses based on historical loss experience as well as the qualitative judgment when historical loss data was not available. For product offerings with sufficient historical loss experience, the Company developed loss estimates based on receivable balance attributes such as account payment status, percentage of collections per day, and length of time from advance to collection. Based on these attributes, a historical loss rate is applied to calculate the allowance for CA losses. For product offerings that did not have significant historical loss data to develop a historical loss percentage, the Company estimated losses by evaluating portfolio factors such as average balance outstanding by customer as well as creating specific identification provisions for known collection risks. As of June 30, 2022, the Company applied a range of loss rates to the CA portfolio of 0.7% to 1.6% for the allowance for CA losses. As of June 30, 2021, the Company applied a range of loss rates to the CA portfolio of 2.8% to 4.1%. Below is a rollforward for the allowance for CA losses (“ALCAL”) for the six months ended June 30, 2022 and 2021: June 30, 2022 2021 Beginning balance $ 2,426 $ 1,587 Adjustment for adoption of new accounting standard 2,505 — Provisions 1,293 8,035 Recoveries (1,002) (3,441) Charge-offs (1,349) (409) Ending balance $ 3,873 $ 5,772 |
Revenue: | e. Revenue: Entity-wide disclosure We determine operating segments based on how our Chief Operating Decision Maker (“CODM”) manages the business, makes operating decisions around the allocation of resources, and evaluates operating performance. The CODM are the Company’s Co- Chief Executive Officers, who review our operating results on a consolidated basis. We operate in one segment and have one reportable segment. Based on the information provided to and reviewed by our CODM, we believe that the nature, amount, timing, and uncertainty of our revenue and cash flows and how they are affected by economic factors are most appropriately depicted through our primary geographical markets. NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued) e. Revenue (continued): The following table presents our revenue disaggregated by primary geographical market where revenues are attributable to the country in which the billing address of the customer is located. Three months ended Six months ended June 30, June 30, 2022 2021 2022 2021 Primary geographical markets Greater China (1) $ 46,785 $ 37,640 $ 89,826 $ 77,027 United States 18,528 13,409 38,310 21,368 All other countries (2) 82,877 59,878 157,012 113,138 Total revenues $ 148,190 $ 110,927 $ 285,148 $ 211,533 (1) Greater China is inclusive of Mainland China, Hong Kong and Taiwan (2) No single country included in the other countries’ category generated more than 10% of total revenue The company did not have any customers during the three and six months ended June 30, 2022 and 2021 that individually contributed greater than 10% of revenue, respectively. Disaggregation of revenue The following table presents revenue recognized from contracts with customers as well as revenue from other sources, consisting of interest income: Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Revenue recognized at a point in time $ 135,063 $ 102,425 $ 261,006 $ 199,768 Revenue recognized over time 9,634 7,856 19,790 10,590 Revenue from contracts with customers 144,697 110,281 280,796 210,358 Revenue from other sources 3,493 646 4,352 1,175 Total revenues $ 148,190 $ 110,927 $ 285,148 $ 211,533 Customer acquisition costs The Company recognizes an asset for incremental costs to obtain a contract such as sales commissions and other customer incentives. The asset is amortized on a systematic basis over the expected customer relationship period, which is estimated to be 1.8 years and is consistent with the pattern of recognition of the associated revenue. The Company periodically reviews these deferred customer acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. There were no impairment losses recorded during the periods presented. The following table represents a rollforward of deferred customer acquisition costs for the six months ended: June 30, 2022 2021 Opening balance $ 11,366 $ 8,976 Additions to deferred customer acquisition costs 6,378 2,628 Amortization of deferred customer acquisition costs (5,933) (2,089) Ending balance $ 11,811 $ 9,515 |
Recently issued accounting pronouncements: | f. Recently issued accounting pronouncements: As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act until such time the Company no longer meets the definition of EGC. The adoption dates referenced below reflect this election, except for permitted early adoption upon the Company’s election. The Company will become a large accelerated filer on the last day of its fiscal year 2022 and, therefore, the company will no longer qualify as an EGC. The anticipated adoption dates of standards issued, but not yet adopted reflect this upcoming change in status. Financial Accounting Standards Board (“FASB”) standards adopted during 2022 In 2016, the FASB issued new guidance on the measurement of credit losses on financial instruments. Credit losses on loans, trade and other receivables, held-to-maturity debt securities and other instruments will reflect the Company’s current estimate of the expected credit losses (“CECL”). CECL requires loss estimates for the remaining estimated life of the financial instrument using historical experience, current conditions, and reasonable and supportable forecasts. Generally, the Company expected that CECL will result in the earlier recognition of allowances for losses compared to the current approach of estimating probable incurred losses. The Company is required to apply the provisions of this guidance as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company early adopted the new guidance effective January 1, 2022. For additional information, refer to Note 2d. In 2020, the FASB issued guidance simplifying the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. In addition to other changes, this standard amends ASC 470-20, “Debt with Conversion and Other Options,” by removing the accounting models for instruments with beneficial conversion features and cash conversion features. The standard also amends ASC 260, “Earnings Per Share” addressing the impacts of these instruments. The guidance is effective for the fiscal year beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company early adopted this guidance effective January 1, 2022 and the impact of the adoption on the consolidated financial statements was immaterial. FASB Standards issued, but not adopted as of June 30, 2022 In 2020, the FASB issued amended guidance that provides transition relief for the accounting impact of reference rate reform. For a limited duration, this guidance provides optional expedients and exceptions for applying GAAP to certain contract modifications, hedging relationships, and other transactions that will be impacted by a reference rate expected to be discontinued due to reference rate reform. The amended guidance is effective through December 31, 2022. The Company does not expect reference rate reform to have a material impact on the Company’s financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of purchased and collected principal amounts associated with Capital Advance (CA) receivables | During the six months ended June 30, 2022 and 2021, the Company has purchased and collected the following principal amounts associated with CAs: June 30, 2022 2021 Beginning CA receivables, gross $ 56,101 $ 67,682 CA extended to customers 109,713 193,567 Change in revenue receivables 44 117 CA collected from customers (122,034) (206,014) Charge-offs, net of recoveries (1,349) (354) Ending CA receivables, gross $ 42,475 $ 54,998 Allowance for CA losses (3,873) (5,772) CA receivables, net $ 38,602 $ 49,226 |
Schedule of current and overdue amounts of CAs | The outstanding gross balance at June 30, 2022 consists of the following current and overdue amounts: 1 ‑ 30 days 30 ‑ 60 60 ‑ 90 Above 90 Total Current overdue overdue overdue overdue $ 42,475 39,158 1,065 721 236 1,295 The outstanding gross balance at December 31, 2021 consists of the following current and overdue amounts: 1 ‑ 30 days 30 ‑ 60 60 ‑ 90 Above 90 Total Current overdue overdue overdue overdue $ 56,101 53,150 964 704 163 1,120 |
Schedule of current and overdue balances CAs that are segregated into the timing of expected collections | The following are current and overdue balances from above that are segregated into the timing of expected collections at June 30, 2022: Due in less Due in 30 ‑ 60 Due in 60 ‑ 90 Due in more Total Overdue than 30 days days days than 90 days $ 42,475 3,318 8,178 6,753 18,365 5,861 The following are current and overdue balances from above that are segregated into the timing of expected collections at December 31, 2021: Due in less Due in 30 ‑ 60 Due in 60 ‑ 90 Due in more Total Overdue than 30 days days days than 90 days $ 56,101 2,951 9,511 12,457 23,008 8,174 |
Schedule of rollforward for the allowance for CA losses ("ALCAL") | Below is a rollforward for the allowance for CA losses (“ALCAL”) for the six months ended June 30, 2022 and 2021: June 30, 2022 2021 Beginning balance $ 2,426 $ 1,587 Adjustment for adoption of new accounting standard 2,505 — Provisions 1,293 8,035 Recoveries (1,002) (3,441) Charge-offs (1,349) (409) Ending balance $ 3,873 $ 5,772 |
Schedule of revenue disaggregated by primary geographical market | Three months ended Six months ended June 30, June 30, 2022 2021 2022 2021 Primary geographical markets Greater China (1) $ 46,785 $ 37,640 $ 89,826 $ 77,027 United States 18,528 13,409 38,310 21,368 All other countries (2) 82,877 59,878 157,012 113,138 Total revenues $ 148,190 $ 110,927 $ 285,148 $ 211,533 (1) Greater China is inclusive of Mainland China, Hong Kong and Taiwan (2) No single country included in the other countries’ category generated more than 10% of total revenue |
Schedule of revenue recognized from contracts with customers as well as revenue from other sources | Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Revenue recognized at a point in time $ 135,063 $ 102,425 $ 261,006 $ 199,768 Revenue recognized over time 9,634 7,856 19,790 10,590 Revenue from contracts with customers 144,697 110,281 280,796 210,358 Revenue from other sources 3,493 646 4,352 1,175 Total revenues $ 148,190 $ 110,927 $ 285,148 $ 211,533 |
Schedule of deferred customer acquisition costs | June 30, 2022 2021 Opening balance $ 11,366 $ 8,976 Additions to deferred customer acquisition costs 6,378 2,628 Amortization of deferred customer acquisition costs (5,933) (2,089) Ending balance $ 11,811 $ 9,515 |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
OTHER CURRENT ASSETS | |
Schedule of composition of other current assets | Composition of other current assets, grouped by major classifications, is as follows: June 30, December 31, 2022 2021 Prepaid expenses $ 13,048 $ 9,598 Prepaid income taxes 7,390 2,789 Income receivable 7,544 9,825 Other 3,224 2,812 Total other current assets $ 31,206 $ 25,024 |
PROPERTY, EQUIPMENT AND SOFTW_2
PROPERTY, EQUIPMENT AND SOFTWARE, NET (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |
Schedule of composition of property, equipment and software, grouped by major classifications | Composition of property, equipment and software, grouped by major classifications, is as follows: June 30, December 31, 2022 2021 Computers, software and peripheral equipment $ 36,956 $ 32,379 Leasehold improvements 9,258 8,920 Furniture and office equipment 4,252 4,074 Property, equipment and software 50,466 45,373 Accumulated depreciation (37,052) (33,233) Property, equipment and software, net $ 13,414 $ 12,140 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
GOODWILL AND INTANGIBLE ASSETS, NET | |
Goodwill balances and adjustments to those balances | December 31, Goodwill Translation June 30, 2021 Acquired Adjustments 2022 Total goodwill $ 21,127 — (1,647) $ 19,480 |
Schedule of composition of intangible assets, grouped by major classifications | June 30, December 31, 2022 2021 Internal use software $ 63,298 $ 55,164 Developed technology 14,069 15,259 Intangible assets 77,367 70,423 Accumulated amortization (37,561) (32,894) Intangible assets, net $ 39,806 $ 37,529 |
OTHER PAYABLES (Tables)
OTHER PAYABLES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
OTHER PAYABLES | |
Schedule of composition of other payables, grouped by major classifications | June 30, December 31, 2022 2021 Employee related compensation $ 42,938 $ 47,007 Commissions payable 11,755 10,712 Lease liability 8,567 9,290 Accrued expenses 8,129 10,661 Other 2,090 1,704 Total other payables $ 73,479 $ 79,374 |
WARRANTS (Tables)
WARRANTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
WARRANTS. | |
Schedule of changes in fair value of warrant liabilities | Warrant Liability Fair value as of December 31, 2021 $ 59,877 Change in fair value (44,027) Fair value as of June 30, 2022 $ 15,850 Initial measurement as of June 25, 2021 $ 71,701 Change in fair value (12,076) Fair value as of June 30, 2021 $ 59,625 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
STOCK-BASED COMPENSATION | |
Schedule of options to purchase shares of common stock activity under our equity incentive plans | Options Outstanding at December 31, 2021 44,940,169 Granted — Exercised (5,543,336) Expired — Forfeited (1,559,308) Outstanding at June 30, 2022 37,837,525 Exercisable at June 30, 2022 28,931,045 |
Schedule of RSUs activity | The following table summarizes the RSUs activity under our equity incentive plans as of June 30, 2022: Units Outstanding December 31, 2021 9,725,027 Awarded 13,229,187 Vested (500,874) Forfeited (1,357,293) Outstanding June 30, 2022 21,096,047 |
Schedule of stock-based compensation expense | Three Months Ended Six months ended June 30, June 30, 2022 2021 2022 2021 Other operating expenses $ 2,606 $ 2,427 $ 5,663 $ 3,626 Research and development expenses 2,387 1,153 4,600 2,052 Sales and marketing expenses 3,642 3,539 7,407 4,579 General and administrative expenses 3,255 3,552 7,128 4,711 Total stock-based compensation $ 11,890 $ 10,671 $ 24,798 $ 14,968 |
TRANSACTION COSTS (Tables)
TRANSACTION COSTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
TRANSACTION COSTS. | |
Schedule of composition of transaction costs, grouped by major classifications | Three Months Ended Six months ended June 30, June 30, 2022 2021 2022 2021 Bank and processor fees $ 20,778 $ 18,748 $ 40,524 $ 36,302 Network fees 3,518 3,061 6,934 2,343 Chargebacks and operational losses 781 587 1,282 1,751 Card costs 441 406 872 800 Capital advance costs 164 5,194 1,106 5,781 Other 530 525 1,069 1,699 Total transaction costs $ 26,212 $ 28,521 $ 51,787 $ 48,676 |
NET EARNINGS (LOSS) PER SHARE (
NET EARNINGS (LOSS) PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
NET EARNINGS (LOSS) PER SHARE | |
Schedule of basic and diluted net loss per share attributable to common stockholders | Three Months Ended Six months ended June 30, June 30, 2022 2021 2022 2021 Numerator: Net income (loss) $ 4,422 $ (12,414) $ 24,633 $ (15,922) Less dividends and revaluation attributable to redeemable and redeemable convertible preferred stock — 29,611 — 33,632 Net income (loss) attributable to common stockholders $ 4,422 $ (42,025) $ 24,633 $ (49,554) Denominator: Weighted average common shares outstanding — Basic 345,522,076 66,744,348 345,831,177 58,702,320 Add: Dilutive impact of options to purchase common stock 19,844,013 — 22,541,797 — Dilutive impact of private warrants 647,607 — 674,653 — Weighted average common shares – diluted 366,013,696 66,744,348 369,047,627 58,702,320 Net income (loss) per share attributable To common stockholders — Basic earnings (loss) per share $ 0.01 $ (0.63) $ 0.07 $ (0.84) Diluted earnings (loss) per share $ 0.01 $ (0.63) $ 0.07 $ (0.84) |
Schedule of excluded potential common shares | Three Months Ended Six months ended June 30, June 30, 2022 2021 2022 2021 Options to purchase common stock — 27,017,355 — 26,053,787 Redeemable convertible preferred stock (as converted to common stock) — 197,889,251 — 203,709,524 Warrants — 848,480 — 848,480 Total potentially dilutive securities — 225,755,086 — 230,611,791 |
GENERAL OVERVIEW (Details)
GENERAL OVERVIEW (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2021 $ / shares | Jun. 30, 2022 $ / shares | Jun. 30, 2022 $ / shares | Dec. 31, 2021 $ / shares | |
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
Exchange Ratio | 0.53 | |||
Total revenues | Geographic Concentration Risk | Russia and Belarus | ||||
Percentage of total revenue | 3% | 3% | ||
Maximum | Total revenues | Geographic Concentration Risk | Russia, Belarus and Ukraine | ||||
Percentage of total revenue | 10% | 10% |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Capital Advance receivable, net (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | ||
CA receivable, gross, beginning balance | $ 56,101 | $ 67,682 |
CA extended to customers | 109,713 | 193,567 |
Change in revenue receivables | 44 | 117 |
CA collected from customers | (122,034) | (206,014) |
Charge-offs, net of recoveries | (1,349) | (354) |
CA receivable, gross, ending balance | 42,475 | 54,998 |
Allowance for CA losses | (3,873) | (5,772) |
CA receivable, net, ending balance | $ 38,602 | $ 49,226 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Capital Advance receivable, net - current and overdue amounts (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Past Due [Line Items] | ||||
Total | $ 42,475 | $ 56,101 | $ 54,998 | $ 67,682 |
Current | ||||
Financing Receivable, Past Due [Line Items] | ||||
Total | 39,158 | 53,150 | ||
1-30 days overdue | ||||
Financing Receivable, Past Due [Line Items] | ||||
Total | 1,065 | 964 | ||
30-60 overdue | ||||
Financing Receivable, Past Due [Line Items] | ||||
Total | 721 | 704 | ||
60-90 overdue | ||||
Financing Receivable, Past Due [Line Items] | ||||
Total | 236 | 163 | ||
Above 90 overdue | ||||
Financing Receivable, Past Due [Line Items] | ||||
Total | $ 1,295 | $ 1,120 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Capital Advance receivable, net - timing of expected collections (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Past Due [Line Items] | ||||
Total | $ 42,475 | $ 56,101 | $ 54,998 | $ 67,682 |
Overdue | ||||
Financing Receivable, Past Due [Line Items] | ||||
Total | 3,318 | 2,951 | ||
Due in less than 30 days | ||||
Financing Receivable, Past Due [Line Items] | ||||
Total | 8,178 | 9,511 | ||
Due in 30-60 days | ||||
Financing Receivable, Past Due [Line Items] | ||||
Total | 6,753 | 12,457 | ||
Due in 60-90 days | ||||
Financing Receivable, Past Due [Line Items] | ||||
Total | 18,365 | 23,008 | ||
Due in more than 90 days | ||||
Financing Receivable, Past Due [Line Items] | ||||
Total | $ 5,861 | $ 8,174 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Allowance for CA losses (ALCAL) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
ALCAL balance, beginning | $ 2,426 | $ 1,587 |
Provision for ALCAL | 1,293 | 8,035 |
Recoveries for ALCAL | (1,002) | (3,441) |
CA receivables charged off | (1,349) | (409) |
ALCAL balance, ending | 3,873 | $ 5,772 |
Adoption of new accounting standard | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
ALCAL balance, beginning | $ 2,505 | |
Minimum | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Percentage of loss rate to the allowance for CA losses | 0.70% | 2.80% |
Maximum | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Percentage of loss rate to the allowance for CA losses | 1.60% | 4.10% |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition - Primary Geographical Market (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) segment | Jun. 30, 2021 USD ($) | ||
Disaggregation of Revenue [Line Items] | |||||
Number of Operating Segments | segment | 1 | ||||
Number of Reportable Segments | segment | 1 | ||||
Total revenues | $ 148,190 | $ 110,927 | $ 285,148 | $ 211,533 | |
Greater China | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | [1] | 46,785 | 37,640 | 89,826 | 77,027 |
United States | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 18,528 | 13,409 | 38,310 | 21,368 | |
All other countries | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | [2] | $ 82,877 | $ 59,878 | $ 157,012 | $ 113,138 |
[1] Greater China is inclusive of Mainland China, Hong Kong and Taiwan No single country included in the other countries’ category generated more than 10% of total revenue |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognized From Contracts With Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | $ 144,697 | $ 110,281 | $ 280,796 | $ 210,358 |
Revenue from other sources | 3,493 | 646 | 4,352 | 1,175 |
Total revenues | 148,190 | 110,927 | 285,148 | 211,533 |
Revenue recognized at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 135,063 | 102,425 | 261,006 | 199,768 |
Revenue recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | $ 9,634 | $ 7,856 | $ 19,790 | $ 10,590 |
SIGNIFICANT ACCOUNTING POLIC_10
SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition - Deferred Customer Acquisition Costs (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | ||
Capitalized Contract Cost, Amortization Period | 1 year 9 months 18 days | |
Capitalized Contract Cost, Impairment Loss | $ 0 | $ 0 |
Opening balance | 11,366 | 8,976 |
Additions to deferred customer acquisition costs | 6,378 | 2,628 |
Amortization of deferred customer acquisition costs | (5,933) | (2,089) |
Ending balance | $ 11,811 | $ 9,515 |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
OTHER CURRENT ASSETS | ||
Prepaid expenses | $ 13,048 | $ 9,598 |
Prepaid income taxes | 7,390 | 2,789 |
Income receivable | 7,544 | 9,825 |
Other | 3,224 | 2,812 |
Total other current assets | $ 31,206 | $ 25,024 |
PROPERTY, EQUIPMENT AND SOFTW_3
PROPERTY, EQUIPMENT AND SOFTWARE, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||||
Property, equipment and software | $ 50,466 | $ 50,466 | $ 45,373 | ||
Accumulated depreciation | (37,052) | (37,052) | (33,233) | ||
Property, equipment and software, net | 13,414 | 13,414 | 12,140 | ||
Depreciation expense | 2,155 | $ 1,682 | 4,071 | $ 3,441 | |
Computers, software and peripheral equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, equipment and software | 36,956 | 36,956 | 32,379 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, equipment and software | 9,258 | 9,258 | 8,920 | ||
Furniture and office equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, equipment and software | $ 4,252 | $ 4,252 | $ 4,074 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, NET (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 21,127 |
Foreign Currency Translation Adjustments | (1,647) |
Ending balance | $ 19,480 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS, NET - Intangible assets, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 77,367 | $ 77,367 | $ 70,423 | ||
Accumulated amortization | (37,561) | (37,561) | (32,894) | ||
Intangible assets net | 39,806 | 39,806 | 37,529 | ||
Amortization expense | 3,016 | $ 2,669 | 5,555 | $ 5,473 | |
Impairment of internal use software | 0 | $ 114 | 0 | $ 114 | |
Internal use software | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | 63,298 | 63,298 | 55,164 | ||
Developed technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 14,069 | $ 14,069 | $ 15,259 |
DEBT (Details)
DEBT (Details) - Receivables And Loan Security Agreement - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 08, 2022 | Oct. 28, 2021 | Jun. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 100,000 | ||||
Initial borrowing commitment | $ 25,000 | ||||
Initial rate of value of underlying capital advance receivables outstanding | 80% | ||||
Revolving maturity term | 36 months | ||||
Additional payback period after revolving maturity date | 42 months | ||||
Floating rate (in percent) | 0.25% | ||||
Expenses included in transaction cost | $ 338 | $ 658 | |||
Outstanding balance associated with related party | 14,769 | 14,769 | $ 13,665 | ||
Accrued expenses associated with related party | $ 104 | $ 104 | $ 128 | ||
Maximum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on floating rate | 10.50% | ||||
LIBOR | Commitment amount equal to 25,000 | |||||
Debt Instrument [Line Items] | |||||
Basis spread on floating rate | 9% | ||||
LIBOR | Commitment amount equal to 50,000 | |||||
Debt Instrument [Line Items] | |||||
Basis spread on floating rate | 7.75% | ||||
LIBOR | Commitment amount equal to 75,000 | |||||
Debt Instrument [Line Items] | |||||
Basis spread on floating rate | 7.50% | ||||
LIBOR | Commitment amount equal to 100,000 | |||||
Debt Instrument [Line Items] | |||||
Basis spread on floating rate | 7% |
OTHER PAYABLES (Details)
OTHER PAYABLES (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
OTHER PAYABLES | ||
Employee related compensation | $ 42,938 | $ 47,007 |
Commissions payable | 11,755 | 10,712 |
Lease liability | 8,567 | 9,290 |
Accrued expenses | 8,129 | 10,661 |
Other | 2,090 | 1,704 |
Total | $ 73,479 | $ 79,374 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - CNBV and Bank of Mexico $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Loss Contingencies [Line Items] | |
Maximum amount of exposure | $ 2,250 |
Loss Contingency, Estimated Recovery from Third Party | $140 |
WARRANTS - Narrative (Details)
WARRANTS - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2022 | Jun. 25, 2021 |
WARRANTS. | ||
Exercise price of warrants | $ 11.50 | |
Warrants outstanding | 25,158,086 | |
Warrants outstanding amount | $ 15,850 | |
Warrants forfeited | 723,333 |
WARRANTS - Changes in fair valu
WARRANTS - Changes in fair value of warrant liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
WARRANTS. | |||||
Fair value at beginning of period | $ 71,701 | $ 59,877 | |||
Change in fair value of Warrants | (12,076) | $ (12,831) | $ (12,076) | (44,027) | $ (12,076) |
Fair value at end of period | $ 59,625 | $ 15,850 | $ 59,625 | $ 15,850 | $ 59,625 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) - Stock options - $ / shares | 6 Months Ended |
Jun. 30, 2022 | |
Options to purchase shares of common stock activity | |
Outstanding at December 31, 2021 | 44,940,169 |
Exercised | (5,543,336) |
Forfeited | (1,559,308) |
Outstanding at March 31, 2022 | 37,837,525 |
Exercisable at March 31, 2022 | 28,931,045 |
Weighted average exercise price | $ 4.36 |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of RSU activity (Details) | 6 Months Ended |
Jun. 30, 2022 shares | |
Restricted stock units | |
RSUs activity | |
Outstanding December 31, 2021 | 9,725,027 |
Awarded | 13,229,187 |
Vested | (500,874) |
Forfeited | (1,357,293) |
Outstanding March 31, 2022 | 21,096,047 |
Vesting period (in years) | 4 years |
Stock options | |
RSUs activity | |
Vesting period (in years) | 3 years 6 months |
STOCK BASED COMPENSATION - Empl
STOCK BASED COMPENSATION - Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
May 16, 2022 | Jun. 30, 2022 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
ESPP offering period | 6 months | ||
ESPP minimum share price as a percentage of closing sales price | 85% | ||
Fair value attributable to ESPP | $ 1,646 | $ 1,646 | |
ESPP expense recognized | $ 411 | $ 411 | |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
ESPP designated deduction percentage | 1% | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
ESPP designated deduction percentage | 15% |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | $ 11,890 | $ 10,671 | $ 24,798 | $ 14,968 |
Other operating expenses | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | 2,606 | 2,427 | 5,663 | 3,626 |
Research and development expenses | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | 2,387 | 1,153 | 4,600 | 2,052 |
Sales and marketing expenses | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | 3,642 | 3,539 | 7,407 | 4,579 |
General and administrative expenses | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | $ 3,255 | $ 3,552 | $ 7,128 | $ 4,711 |
TRANSACTION COSTS (Details)
TRANSACTION COSTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
TRANSACTION COSTS. | ||||
Bank and processor fees | $ 20,778 | $ 18,748 | $ 40,524 | $ 36,302 |
Network fees | 3,518 | 6,934 | 2,343 | |
Network fees | 3,061 | |||
Chargebacks and operational losses | 781 | 587 | 1,282 | 1,751 |
Card costs | 441 | 406 | 872 | 800 |
Capital advance costs | 164 | 5,194 | 1,106 | 5,781 |
Other | 530 | 525 | 1,069 | 1,699 |
Total transaction costs | $ 26,212 | $ 28,521 | $ 51,787 | $ 48,676 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
INCOME TAXES | ||
Effective income tax rate | 12% | 45% |
NET EARNINGS (LOSS) PER SHARE_2
NET EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator: | ||||
Net income (loss) | $ 4,422 | $ (12,414) | $ 24,633 | $ (15,922) |
Less dividends and revaluation attributable to redeemable preferred stock and redeemable convertible preferred stock | 29,611 | 33,632 | ||
Net loss attributable to common stockholders | $ 4,422 | $ (42,025) | $ 24,633 | $ (49,554) |
Denominator: | ||||
Weighted average common shares outstanding - Basic and diluted | 345,522,076 | 66,744,348 | 345,831,177 | 58,702,320 |
Dilutive impact of options to purchase common stock | 19,844,013 | 22,541,797 | ||
Dilutive impact of warrants | 647,607 | 674,653 | ||
Weighted average common shares outstanding - Diluted | 366,013,696 | 66,744,348 | 369,047,627 | 58,702,320 |
Net income (loss) per share attributable to common stockholders - Basic earnings (loss) per share | $ 0.01 | $ (0.63) | $ 0.07 | $ (0.84) |
Diluted earnings (loss) per share | $ 0.01 | $ (0.63) | $ 0.07 | $ (0.84) |
NET EARNINGS (LOSS) PER SHARE -
NET EARNINGS (LOSS) PER SHARE - Anti-Dilutive effect (Details) - shares | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive potential common shares | 225,755,086 | 230,611,791 | |
Options to purchase common stock and unvested RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive potential common shares | 27,017,355 | 26,053,787 | |
Redeemable preferred stock and redeemable convertible preferred stock (as converted to common stock) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive potential common shares | 197,889,251 | 203,709,524 | |
Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive potential common shares | 848,480 | 848,480 | |
Warrants and Earn-out shares excluded from computation | 25,158,125 | ||
Earn-Out Shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Warrants and Earn-out shares excluded from computation | 30,000,000 |