Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to the Paysafe Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the call over to Kirsten Nielsen, Head of Investor Relations. you. Thank

begin. may You

Kirsten Nielsen

welcome and Earnings Full and the Call Fourth Quarter Year to you, Conference Paysafe’s for Thank XXXX.

that from with be Before this we the materially are reflect to in Company’s should These SEC release expectations and management’s call that results statements. contained factors conjunction considered forward-looking differ statements will contain most subject our begin, forward-looking could statements and a earnings actual cautionary those statements reminder current cause reports. and in recent and to assumptions

You place undue should reliance not on statements. these

call statements during no only Forward-looking Today’s financial date the of update to call, this presentation undertake speak we as contains non-GAAP measures. of and also them. this obligation

comparable additional You today’s information in appendix our release Investor in about the can and most press of section reconciliations the this website. available find on directly are financial presentation, GAAP Relations which of measures measures non-GAAP and these to the

are Financial we shareholders and Say Bruce questions received Officer; from platform. Lowthers, through Executive our Joining analyst the from will take questions we that, After After me remarks, Technologies Officer. today answer Chief Chief will the Gersh, community. Alex prepared

turn I’ll over to the Bruce. call that, With

Bruce Lowthers

joining Thanks, everyone, and you, for thank Kirsten, us.

begin following on If webcast, X. our along you’re on slide let’s

exactly on year exceeding was a X% When constant In be basis, half $XXX growth in done in XXXX, resulting the a our on an second X% our of X% into of currency I the fourth billion, currency. increase approximately the revenue revenue the recent focus increased Full most growth Paysafe, million that. constant in $X.X half. said of on joined we’ve guidance, and back we quarter, would returning to year and

in in above $XXX of $XXX of full million. EBITDA the midpoint QX guidance, slightly EBITDA adjusted of year resulting million Adjusted was

of was year QX cash our against nearly of XXXX, of which a challenging we’re EBITDA. to which XXXX, translates free million a XX% and delivered with results also $XXX for in backdrop. adjusted solid conversion Overall, We flow pleased progress

to demand As in Solutions hospitality across our driven SMBs. on strong in growth particularly U.S. calls, by more America North leisure, our shifted Merchant has we’ve XXXX, and discussed our benefited the prior retail and segment, which travel and from overall mix from

America, and We which growth grew our acquisitions pro of Latin a also led basis. XX% on in by saw PagoEfectivo, SafetyPay revenue forma

experienced regulations of second In wallet the in gambling from business. wallet Europe, Russian-Ukraine these digital and we consecutive five impacts, market the sequential our recording war digital headwinds improved Despite months growth growth. FX, in half,

part function. our repositioned recruiting As rebuilt growth fully the on Paysafe and our verticals. assets our meaningful the synergy businesses to our opportunities on capitalize which and potential these is in across and of high-caliber prioritized our focus positioning on core talent, we leverage organization realize simplified sales reinvigorating We and delivered priorities,

by that recent when expansion our excited I’m multiproduct to our which wins, including portfolio as bring propositions the our existing deals client in we’re and as merchants. cross-selling demonstrates geographical with seeing strength momentum value of the holistic we clients, well

confidence us are these year by progress I strong with that that sales priorities. our XXXX. opportunity growth significant a believe -- the about gives and uniquely organic and to across is to refocusing excited Paysafe in ahead, delivering TAMs entertainment is to have large unique role more we the we XX our in across positioned grow our Looking runway on transformation the the into today ability months seeing deliver am

our after entry XX NFL sports Ohio QX volume reflecting with across to off see America Super payments market, which online new we U.S. followed Maryland. kicking both season into supports during Paysafe now XXXX and including growth Bowl, Additionally, and iGaming, the North our new growth in continue betting existing launch activity across strong in states strong the merchants.

This wallets. underlying Russian-Ukraine digital digital on digital classic update impact an in saw business. stabilization for signs for X% focused wallet we transparency. our view X on war. of year prior of versus the recorded wallets, QX, continued the our digital wallets from We of excluding In classic is currency growth slide revenue the classic additional to Turning constant the

We funnel including point X.X churn rates percentage are as improvement adoption of of since up in rate seeing in early XXXX. positive X.X beginning well in trends our the as points year start since the percentage optimization, the improvement

due virtual the and successful and of KYC both assistant center processes diligence, and improvement Drivers enhanced have service VIP premier across UX standard include improvements, campaigns. improved and we customer

of impact year-over-year of volumes well XX% As overall a constant driving QX Nigeria QX, we users active war increase Russia saw improvement. and increase underlying in as excluding ARPU Ukraine meaningful ‘XX, transactions in a in currency, deposit and per result, in one-off a as

since million to $XX rate experience X% year. our initiatives merchant incremental and revenue. improve reduce further increase the our conversion at resulted have last Additionally, driven has in in year in improvement a friction checkout approximately point QX versus prior in This annualized the checkout

despite in overall an engagement half and So, customers of revenue users year-on-year, we’re improvement ARPU from supporting being throughout seeing growth active higher our ‘XX. value stability, lower second and the

drive customer-focused initiatives and our forward our expect in growth to to user into active return base to continue QX. see We a

Turning to slide X.

term. initiatives and creating the immediate we’re XXXX opportunities longer building XXXX, made to Looking on accelerate have growth improve improvements to while several to performance, in

improvement that continue single was a Power’s J.D. survey, on pleased the company. experience. merchant focus services ranked I’m work Paysafe team’s on by very well to client we’ll First, the testament to This a the and industry customer. the satisfaction above on third the focus hard largest standard year recently and was

On core the innovation rates to are through build wallet our On experience. authorization our our improvements auth see to verticals improve addition user consumer increase currently benchmarks investment tokenization upon increasing initiatives, our our fraud the to continue in in immediate see product we the above opportunities to acquisition, we consumer XXXX side, but to new rates, solutions. we management for opportunity and where further in we network the

QX, our by North Europe enterprise-wide begin On single Latin to America, optimization, integration. APMs connecting through available to and America merchants a make our APM we’ll

existing On business headcount a building to XXXX. new we’re focused acquisition the development in team engine customers, plans account on opportunities sales the double with sales and transformation, out world-class

it’s days, excited already multiproduct products While of when enterprise by meaningfully which than this including the across new past closed launched XX geographies. from our I’m has initiative and this cross-selling QX, we still increased more and enterprise strength pipeline, deals, we early wins and summer in

into with Ohio, innovative to states by in the fantasy gateway, leading our APM our Jake online example, wallet Betr, platform digital a recently expanded multiproduct connectivity we provide company In to through and sports deal and card backed new regulated sports acquiring online in One Europe. with long-standing betting a U.S. XXXX. signed we vertical, financial trading which relationship starting trading launch in digital a plans acquiring client provide multiple to wallet recently a Deriv, and Paul

Moving to X. slide

we years APMs. lotteries, at the of to of in processing approval call, with American stack the well market as mentioned as leadership strength rates I beginning North delivering card with Ontario, the As full local provincial on In of continue iGaming. see building XX we’re high

new nine operators now live market. Ontario the with are in We

on partnering we’re markets gaming online Street one As focused sports with leading company America. entertainment and example, Latin Canada Interactive, and in a the U.S., Rush

the result our Ontario Street for with in capabilities Gateway. with currently of and Canada payments long-standing as payments America Paysafe’s throughout supporting iGaming APMs trusted history and is was traditional our This coupled North Latin through Rush provider Paysafe a America. cross-regional in win

examples transformation. share a in our more XXth, March reminder, leadership encourage client tune and Analyst as will where upcoming I’ll to Investor team Lastly, our everyone wins the recent of on and our to Day momentum on our

I’ll review With ask the financial that, Alex results. to

Alex Gersh

Thank you, Bruce.

start slide Let’s with X.

pleased with which revenues our range slightly for guidance We in line with fourth above the our latest for was adjusted our are guidance and financial performance for quarter, EBITDA.

regulatory X X% in $XX.X of an results. the Solution market European slide fourth our digital growth continued for as Americas, to SMB the Merchant where strength in our the FX Volume well quarter we supported business an the wallet, year-over-year, lapping of e-commerce, U.S. Moving by saw acquisitions where improvement headwinds partly of in as reflecting saw American billion, in increase the in gambling. headwinds Latin by resiliency and summary was initiatives, improvement continued offset

basis. million reported X% Total $XXX.X quarter revenue a to increased for the fourth on

growth as channel. growth in exchange Excluding war, quarter of segments. as the $XXX.X million, was revenue in resulting both reflecting indirect of foreign mix, EBITDA Solutions the to the impact the the from including Russia-Ukraine increased segment from adjusted X%, lower in well impact the rates margin margin from faster Adjusted reflecting fourth due changes channel EBITDA for XX%, Merchant

We expect the in segment support and channel forward. e-commerce to growth for improved our going mix direct both

Adjusted net interest $XX.X previous was During higher an adjusted expense. over increase for generated $XX an fourth QX million the XX% and EBITDA. in of compared year, free in cash the the to quarter, more $XX.X XX% than reflecting of mainly conversion prior million the million year, reflecting we of quarter income flow

Let’s XX the move the of slide to year full results. summary for

Full headwinds acquisition, segment digital or Overall, XXXX strong than Merchant particularly the Solutions offset the the Netherlands a regulations European constant billion. billion half as impacted reflects our Russia-Ukraine on X% year which the currency war year on Latin volume compared of growth and more from wallet, American gambling from a well to Germany, market was as revenue in which nearly inorganic growth first our and X% an to $X.X Full in reported year. of increased the increase basis, performance X% constant basis. $XXX currency from

we second delivered half, X% constant year-over-year growth. The currency

our well Solutions. of net was excluding payments primarily XX% attributable million mix income higher for to above adjusted as cash resulting to interest Merchant million full as in slightly or $XXX margin Adjusted related million in depreciation lower Free XXXX, XXXX. largely as the was debt adjusted conversion, full to to flow well refinancing compared XX.X% EBITDA, adjusted year $XXX.X $XXX as expected EBITDA expense, of was Adjusted EBITDA higher net the mix before XXXX channel within $XXX reflecting for interest in income million, and million in XXXX, for expense segment amortization XX.X% year $XX compared range.

XX%. quarter full slide XX%. an leading quarter increase of growth. volume to for of full volume to million, Solutions increased increase QX fourth was for results. by Transactions $XXX million year. discuss $XXX.X both $XX and and of segment the increased $XXX.X Let’s quarter grew also XX of move another the Revenue full of year revenue an Merchant year XX% X% billion, a billion, to to strong X% delivered Fourth

margin, XXX basis Adjusted channel the our within EBITDA reflecting was quarter fourth million, reflecting primarily mix segment. the down in $XX points, XX.X%

XX For adjusted the X% down reflecting million, margin a EBITDA XX.X%, points. of basis increased full year, $XXX.X to

growth improved segment as direct support from both expect We forward. mix as to in going the channel e-commerce well

seasonality year XX%, in as volume was from slide rate. of growth the sequential adjusted $XX.X headwinds. and well nominal by initiatives, and XX. is for including year-over-year, Fourth Digital $X.X in Wallet this quarter foreign Digital quarter, volume billion, Bruce World the including growth fourth the full X% was to changes improvement excluding respectively. a delivered gambling, This our million, X% revenue quarter continued Cup. driven increase The revenue discussed, Turning billion was as Wallets an $XXX.X segment the X%, significant of of exchange decrease FX impact for not as

full increased For a year, X% revenue the on constant basis. currency

of segment war, the Digital would was EBITDA have impact full headwinds currency with Wallet prior and with year, quarter and from fourth Russia-Ukraine margin XX.X%. Adjusting gambling EBITDA the X% reflecting increased X% operations. million revenue year million and respectively. and quarter, XXX Full European constant points, basis approximately at consistent Adjusted and the $XX.X for adjusted margins Russia-Ukraine for the decreased $XXX.X investments was in in year

completed to At summary and our total year, repurchases QX the of of turn value $XX for million of the end million $X.X repayments balance year. debt leverage. We and debt face for was billion. the the full the slide Let’s in and XX $XX.X sheet

act both advantage monitor notes, term take of levels. current we’ll We continue and trading to our debt pricing to and on opportunistically

times to we we growth net be believe of debt X.X will X.X X.X was LTM the year-end, reducing focused through EBITDA We to range EBITDA on in Our are debt the times in times reductions year-end. XXXX. by leverage and and highly adjusted ratio at further

slide to to Moving the XX discuss outlook.

by the revenue billion transformation ramp-up and we and the billion, $X.XX to in second first initiatives. at from of XXXX, driven half above half growth reported growth $X.X the range midpoint. in year, the sales reflecting reflects single-digit other expect X% This low high our of growth currently For the to single-digit

XXX least year. EBITDA margin expect million for exchange range of adjusted We basis at We $XXX operating $XXX the by from assume euro to to current leverage. reflecting to improvements of points USD the million, driven remainder rate

an the range adjusted to $XXX above of on to million, to increase $XXX range The a Adjusted first quarter slightly the EBITDA million, expected reflecting currency in be of is in be of XX%. $XXX $XXX expected to constant million approximately is EBITDA margin million X% year-over-year basis. an

to Bruce. Now, I’ll back turn the call

Bruce Lowthers

Thank you, Alex.

their thank I this closing, to during want In our transition. hard team for work

XX client experience, return As we to would by sales on organization, drive stated growth focusing ago, product simplifying I months innovation. our the and

that, done half has grow prepared a XXXX strong team and Our after to back of XXXX. in we’re

placed better move for great forward. that outcomes their We talented as and will and talent roles we drive have added us teammates

We in have the conversion and flow $XXX move about we the XX% in a with the grow and scaled of will free stabilized million the that year, forward. in is revenue, half excited mid-single-digits Paysafe XXXX. $X.X Company back cash we player have plus billion opportunities as EBITDA, in I’m

New week next everyone seeing to forward looking are in We York.

with begin the let’s Q&A session. Now

Kirsten Nielsen

Alex. Bruce and Thank you,

with of turn again from the upvote After community. that, submit to to partnering analyst shareholders and Q&A Technologies allows Say our Forum, questions our which we’ll all are questions. research We

Devraj, asked price this? stock Wouldn’t Our first a why Bruce, it to would the Paysafe split? like organically? to up question you is to from who bring share do more decided address assuring reverse be

Bruce Lowthers

Kirsten. Sure,

product think the thank right the question, But reverse Look, felt it was stock and all. about prepared where by sales around to growth. the delivering innovation accelerate shareholder clear, our to talk go we’re as you for back experience, transformation drive us our make organic the was our look, we in heard you and stronger focus growth, the of at split. to Board to when So priorities trading first the And expanding margins. is stock to client on enable value be delivering decision our time, our remarks, I

We at see to improvement XXXX, drive a of can positioning talked guidance with organic in basis points range you do EBITDA least growth ourselves X% our shareholder coupled revenue X% XXX we’re for just value. the think Alex margin. about, as in So, and to which that reflects

Kirsten Nielsen

is question don’t America improve you why from to like Our this to North as our brand initiatives next Cody well? about Bruce, any would recognition of hear take who operations. one

Bruce Lowthers

Sure.

look, So, are we North streams predominantly revenue our North what about do acquiring North around as America, you from America, really our in America in merchant think business.

recognition us fourth largest satisfaction. pointed in J.D. with earlier, the for strong Power’s acquirer the merchant I we’re And So, nonbank we bit a market. ranking out little as have third some brand

to acquiring nice has market So, U.S. and a that we feel that Paysafe focus brand in time. over the in continue we’ll the

and when have North our think which us. emerging at the you I for brand look business, an consumer in America strong great is digital markets. And wallet Europe we is recognition other opportunity business,

you’ll in Latin our in move the forward as forward of new we into America activity lot and we side move of consumer a well. series business and as campaigns a So, North America of as see branding with

America As has I growing mentioned, it’s Latin -- grown XX%.

America brand on a the you’ll down in build have there Paysafe Pago us Latin the with brand consumer see well. to as start but We strong side,

Kirsten Nielsen

more Okay. profitability? it the you one? Say or the Dale could new Is platform. is Thanks, path this Bruce. users? from question Alex, to We’ll asks take what money take one

Alex Gersh

in EBITDA $XXX Sure. that net first I delivered positive to cash and income. would we like adjusted XXXX reiterate flow of reported and positive adjusted million

forward, of guidance margin points our in XXX expansion. improved Going including to points basis XXXX, profitability

growth. our drive You near-term discuss heard priorities Bruce to

within and our recent As existing pipeline. our we’re sales from in our that an and growth and in both seeing cross-selling deliver base, geographically expect products example, the expanding we to merchant wins

grow. year. continue time, to disciplined which being the as to We users leverage At of with focus touched drive we cost the believe management support we also active Wallet user operating we to improvements on Digital same will growth experience, this on

Kirsten Nielsen

I back the With open like Alex. call now over the turn to would the up to to phone line Thanks, to that, take operator Operator? Okay. questions.

Operator

RBC. first [Operator the from Instructions] with questions of line Our come Dan Perlin

Matt Roswell

morning. you SMB gained Good of wondering in share the sitting in the in I two for environment Dan. guess, you operations. have improved U.S. travel strength macro Yes. hospitality. coming was that’s all actually from first, if could whether Matt remarks improving, It’s and or disaggregate mentioned the especially you I I of questions. prepared your kind sort market, Roswell

Bruce Lowthers

of I was question. kind didn’t the choppy. hear It

Sorry.

Matt Roswell

SMB little you disaggregate Sorry in I or you it a it if the that. wondering Hopefully, of all -- improving, kind bit could U.S. about gains sounds especially Strength now. was share for better. executing macro better into conditions

Bruce Lowthers

Yes.

the So acquiring performed merchant I we SMB think environment? performance off against think our business, the throughout I has business U.S. And well exceptionally question is map how look, really the our do SMB year. macro

I in think it perform continued well QX. to

as to well continue very We ‘XX. perform expect it we into move to

in the it’s message provide the selling we out we a really SMB Street the we that So, that is believe optionality we’re resonating marketplace, perspective, proposition. very unique have with from the our that and

So, share would that vertical. forward And we in to continue expect we that as ‘XX. move take to we’re say we continuing into

Matt Roswell

as a And in Okay. we about flow free think follow-up, how ‘XX? should conversion cash

Bruce Lowthers

the think flow in be more about Monday the that on ‘XX. cash talk free go at as still very as we’ll we We’ll flow, think cash So little depth we Alex mentioned free consistent Day. earlier, on Analyst in I bit into a

And free we there, consistency so, for my everybody flow to but that’s see part go get of into in Monday as our ‘XX. cash plug you’ll

Operator

questions ISI. Evercore David Togut line next with come from Our of the

David Togut

of to impacts Obviously, likely headcount to kind then of but of that the would expansion sales be how out sales Could called global could Europe? EBITDA. adjusted expansion would show then, be the what tailwinds margin negative, this percentage guidance, walk the What significant kind margin the you adjusted big bridge North EBITDA that expansion? would in adds? of America? to a be You And those Is headcount you distribution primarily year. doubling if new through going

Bruce Lowthers

Yes.

I we’ve as a self-funded. moves I the of look, would how have that been lot classify all, So made first think, of

pay we’ve the to made adjustments So, organization the changes within for done. we’ve that

So, movement product. there a repositioned lot have where has within we that were thought been People the are organization of lacking. sales positions -- we

of had the have lot in on line that. a transition up we So, organization to

So, not change we’re exact EBITDA significant organization. in -- forget of I be the adding you would will expect but people the word our I self-funding. profile because used, the sales That into

as As Alex margin basis XXX as XXX expansion. we you’ll to go ‘XX, guide points see into alluded to, our

as So fully to our to move continue we ‘XX. margin into improve expect we

any you to color add want if too. Alex,

Alex Gersh

by well stops. margin our that in look, our those to expansion. I -- think revenue the grow is cost one direct said remarks that I’ve e-commerce point channel it’s our on and continuing of our as we’re on facilities, headcount, here the continue will focus as our to will our things And solution efficiency as things, we well, efficiency to now sales of that more expand merchant we base, it’s on base, the and on seeking planning as is cost focus the focusing costs, the we said it’s never will and automation, whether we faster than all continue we’re whether the whether are gains

David Togut

Just distribution geographies? and adds the additions in the segments your are to XXXX, new of force business what between sales different clarify, those

Bruce Lowthers

David. Yes,

is -- subscale view So, everywhere organization. would think what sales the with we I within we’re say that for generally are sales. our We opportunities growth

Gatto’s that hear see enterprise, So, world, additions structure. around on being the him account talk in the you’ll management Monday about Rob you’ll

in that, a amount cross-selling base. people tremendous and more We’re need very existing early We of that optimistic avenue. about into feel our success having on we client

tremendous opportunities, see also e-commerce. in Alex just about as We talked

in to e-commerce us and acquiring spaces. our continuing expand merchant see And so, you’ll

sales So, places expanding predominant our that those will be we’re the organization.

Operator

come Scott Wolfe Wurtzel next line the with Our of Research. questions from

Scott Wurtzel

wondering we some color I’m the assumptions growth Digital And and there. Merchant then embedded Solutions you on should think on Maybe also first guidance, maybe off about how can macro Wallets? are starting us between of Thanks. give that if your

Alex Gersh

would assumptions, I you we -- expect we’ve assumptions So well. a That’s macroeconomic range. that’s regulatory things obviously, a in to it’s to Well, the know of think how assumptions or of our do terms the reflect on we’ve then headwinds given continue whether there. range, improve right? best bottom and at whether regulatory got as of and of macro some you range, And we some the top to relating the environment, the the now, that’s it’s

Sorry, what was the part? second

Scott Wurtzel

Merchant just how the Digital top this and was Wallets line think part Second growth we year? on between Solutions should about

Alex Gersh

guiding our Yes. the I units to that to. of expect for both both mean continue at those for of -- we average grow to -- rates we’re

single-digit we those both So, today, in that guide sit the as grow would implies. here percentages

Bruce Lowthers

a I little Scott, just add would color. just

this think about about us I you believe we as earlier about that’s looked fundamentally And I -- going probably heard me at is and that talk executing. really year last out We’ve still said. this any number over get a We last talked months, sense just a point, impact about the economists see few case. Alex macro of trying environment. at as to the don’t of --

better we if today, out based at do So and going really this at we do. is recession, it on that we really impact and think And what what is have about us a the executing and every there we getting information least mild doesn’t day. be will

Scott Wurtzel

Wondering on helpful. iGaming your on Got have some follow-up as Penn of And ads color side some maybe there. operators you heard if media the U.S. the maybe specifically maybe it. their on in with with your of relationships been things. and how Barstool, some That’s going, larger then have share of just a can U.S.

going that’s provide can you if wondering launch? just an been update how on since So

Bruce Lowthers

Yes.

say So, who’s the Overall, Day. he’s early the just to He’s Barstool got color in Monday is stages. out a to going a you Cutler, great Zak going example that have what We couple of I of at present is around would things. that Investor lot that. actually throw provide the

So of seems that. well. of kind with the It progressing that’s just like getting we’re gate out

a U.S. a about term. position we’re that And whole moving now, optimistic that we’re pretty long have right leader in a for about is have The small think moves a the great well us. forward. we industry great we’re is along as It’s over be growth in but we them, that marketplace. partnership to Barstool And We great with and excited doing. what as the

Operator

Suisse. line the Chiodo come questions of next Credit Tim from with Our

Tim Chiodo

to the what business then, follow-up if within the that the you great win iGaming a a is is, A and in merchant rate in maybe revenue exiting I of run a percentage annualized of revenue here lot for see that year? new of us in give terms mentioned highlights was an Merchant Solutions wanted America. And could or the in North update business terms business you on of Ohio. that now

as an North anywhere this general, but Just processing, where to meaning your example, one maybe recent they more only? separate with beginning within specifically, Are in not you Are stack gateway in partnership wins gaming are Worldpay? America. in they full there the you’re Worldpay? from do Are

Bruce Lowthers

Yes. question. we’re think Tim, good thanks doing. about -- what for I the Look, feel very we’re

for are at the winning. vertical, U.S. gaming what us. look and It broader wallet we’re about e-com providing it’s gateway We we is there. than When

having success our e-comm lot with So, we of a are gateway.

Monday seeing great are are buying we’ll and Day, We where at Investor our examples have people some stack. full

we’re so, very And excited.

a I you think mentioned at Tim, in the actually, fall with conference. I

think shared on to direction. forward. is for deals we in we’re a going really but excited opportunity a right move And is as we’re QX things the that selling is multiproduct me we And exciting and fair has that what as about would I multiproduct look is moving in had number forward about the moving what for we’re talk and of it I me us showing us the to that Monday, signpost deals. of One be

Tim Chiodo

Excellent.

brief more follow-up. you If mix in if mind, don’t could one I

within correctly, around impacted margins a prepared being comment caught was merchant. I there the Solutions, just margins but believe Merchant around by remarks various I during for channel So it mix

what for If profiles the was margin could the about drove just and talk the you quarter? various mix channels margin of that outcome the those the

Bruce Lowthers

Yes.

in in in him and was let here that second. I’ll So, comments, jump Alex’s a

to is our see look channel the So, as what business, Merchant channel. we direct you indirect our and U.S.

little We channel in growth great indirect a our had direct than has in Our lower profile that margin QX. channel.

impacted margin it quarter. the as so, wrapped up of we kind slightly And the

top So, look bit growth perspective, from in that just a margin we acceleration aggregate. at it the it a as threw line off was really little

Alex Gersh

channel, thing more is, of to e-commerce, is on And we the add higher, said overall. as focused only expect has Yes. margins drive should Bruce also on more direct going what course, which the focused before, forward but

Operator

Susquehanna. Friedman questions next of Our Jamie line come with the from

Jamie Friedman

Hey. you results I -- I Good -- in thinking trends and Digital are And good through go Digital the about slide what in active morning. was wallet disclosed. X this number XXXX had is question the user just appreciate a guys. terms Wallets, curious But slide where here, of you about how Wallet? I

Bruce Lowthers

Yes.

Jamie, thank for So this I appreciate you. joining thanks it, and morning. us

I over the stabilization what last you the think is So, really around months the saw users. several

our Digital in expect And we we user on accelerating good about pretty QX. March. Wallet here We to start classic the of as feel beginning that the sit in

move for on growth numbers digital we the wallet looking So, users QX. as into

the But last months. end expecting as stabilized wallet at clearly, we the five the of -- direction. think QX, that it I over So, you’ll reported right we’re to see moving we’ve the in

Jamie Friedman

could Okay. just follow-up. I as if then, ask a And

thinking we of the how the dynamics to growth substantial terms I’m and rate is driving results? the that should, about increase be In year-over-year. we curious just be we this interest is deposit relative what about if should thinking pretty trends how of deposit-related a should

Bruce Lowthers

getting having wallet. we’re Obviously, loading more the into Yes. people success,

of I usability of friction of and lot of lot use done what Megan itself. think of driving the the around is wallet have wallet It’s her a the that the out taken team the really activity. a

to people load getting fund success, the more having wallet. and we’re So,

deposit that forward been So, we to accelerated. point rightly the we have. That rates base move And deposits interest rates hasn’t the feel do move, on as have as Jamie, better return for optimize will very of our expect good out, obviously, we us as certainly, to continue about a story a much our with we best you that that. But historically.

Operator

the [Operator Instructions] Aditya of America. with Bank line come Our next from of questions Buddhavarapu

Aditya Buddhavarapu

a from side. my Just couple

the how could your a there So of you there to maybe might you think impacts be there? speak CMD, into and some differentiating in offering. year? Wallet go you ‘XX? sort as it you you’re your is something you give regulatory business, residual Or understand the any flavor about regulatory Digital around could in in about more us do second, going competitive iGaming, on some I just this And just from incremental anything impact see Europe then, if of the position in but headwinds

Kirsten Nielsen

So, the -- the for just question, your having were little we XXXX. so hearing the a time then mind Would to first clarify, digital was hard filling your wallet, environment second for you And a about soft. you, restating question regulatory question? into first it’s it’s expectations

Aditya Buddhavarapu

Yes.

Sorry that. about

question on First iGaming. was

you’re differentiating talk of about the expand in that you from your As opportunity your U.S., you just could competitive offering merchants? for and sort the or there how -- pursue position

Bruce Lowthers

it. Got

So look, question in Wallet go years. didn’t in would the Digital regulatory on standpoint. very don’t guidance We look, first, a We for see I’ll this take regulatory the into XX-something we kind the But from things our of environment that say I anything order. understand account well. I business we’ve reverse regulatory of one been vertical, think into the environment

We’re in a lot different of marketplaces.

of a we in don’t concentration So credit country. have really any particular

any headwinds feel gave, a exist. that potential we So with like the we’re may guidance we incorporating good spot in regulatory

got we’ve the like in covered we that guidance that feel we So, gave.

be you’ve XX for this us, to single and e-commerce from U.S. different vertical the We landing success at what participate a we’re the business. having look we’re both perspective. I look product regard a in from in. states. wallet In Look, it perspective And and in clients. is the Gaming gateway to of a we that think not This is active lot seen,

strong it -- we’ve forward. expect multiple the up position operators market We very competitive feel very, coming got is with and line in and we a very the Ohio as press into in Gaming moves the market, We’re having example continue great with as to clients. state obviously U.S. success of be to a

Operator

Thank you.

have Lowthers for back turn We now our end Bruce call the the closing session. question-and-answer would over like reached I of to to any remarks.

Bruce Lowthers

Yes. you very Thank much.

all, that’s just Paysafe all us the the really And excited of very for great First to exciting of in an I we’re thank our want look and opportunity continue that of to XXXX. done. It everything was you’ve transformation. see to the on about team forward progress front

in of us New Stock you has you. and here York. have pitch, share my the to anxious And tell team at great We’ll for that hope Thank New lot York all at And Day of they’re be we the joining all the to today. Monday again, a see success Exchange. had, Investor to stories you last

forward seeing much. look Thank York Monday. you very on in So, everybody to New

Operator

participation. teleconference. does This your today’s appreciate you. We Thank conclude

You at your may lines time. of Enjoy disconnect this day. rest the your

Paysafe Limited (PSFE) 9 Mar 232022 Q4 Earnings call transcript