PSFE - Earnings call transcript Q2 2024

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Operator

Ladies and gentlemen, good morning, and welcome to Paysafe's Second Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Matthew Parker, Investor Relations. Please go ahead.

Matthew Parker

Thank you, and welcome to Paysafe's earnings conference call for the second quarter of 2024.

Joining me today are Bruce Lowthers, Chief Executive Officer; and Alex Gersh, Chief Financial Officer.

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

You should not place undue reliance on these statements.

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

find measures can these in measures press call You Investor presentation, information additional non-GAAP the website. With direct and on this Relations and about the most over the that, which to comparable reconciliations available turn are the release in Bruce. to appendix of GAAP all financial today's I'll

Bruce Lowthers

and you joining us Matthew, Thanks, for thank today. all Great.

efforts moment It want Alex the of their all last half and work team I last take First, guidance. great results. On to reflection years QX the is I'll thank to our X the update journey. and Paysafe over transformation close for and their today's call, and driving for through the full Then our years. outstanding on determination QX results hard walk a the year first with of X the a and our will I year see

XXXX. the conviction strategy higher have a day. We not X% We our execution XX% right growing While These revenue. growing every year-over-year, QX reduced we to results, business, are strong Wallets first portfolio of X% fueled delivered and half and and of in from also acceleration X.Xx, grew wallet same X.X% approximately debt XXXX $XXX adjusted quality from and better excited the Digital our revenue million on in optimization done, period getting e-commerce higher our attributed the of QX our in our Solutions net of that volumes the by we reinforce return driven in eCash Merchant in reflect by results double-digit the and focused we're businesses EBITDA, half XX% million about progress growth efforts. XXXX, a the in in achieved growth product. we on LatAm further XXXX, first to progress reduction ratio increase grew continued is X.X% year-over-year, classic revenue, across which $XXX an year-over-year, to improvements our working. In

the recorded Additionally, which adjusted $X.X incremental points adjusted net year-over-year, first X.X% EBITDA grew in grew planned the Adjusted year-over-year, year. and X.X% we XXXX. basis half of of at income margins while to we declined investments, XXX income our EBITDA net outlined beginning million of by the GAAP due positive

stock also our million to of value We $XX repurchase our returned through program. shareholders

will which growth these revised profile. This take initiatives, customer are right the to the our actions higher are rate create on XXXX which We with certain merchants. deliver As in part risk of second headwind brings optimization increase our us long-term but has of will move quality sales to year our taking revenue a guidance. led reduce our and to long-term for our higher in believe guidance limit ideal we allow me a to higher-risk to quickly. of or These short-term strength year, our shareholder volumes to for steps the sustainable will our value, actions we the full business revenue, portfolio revenue refocus short-term headwind original half growth exit overcome us XXXX. The as relationships steps to

expect adjusted of at moving to our our basis the end the pleased now bottom guidance revenue are full former our margins point X%, XXX the guidance to to XX%. previous to to from EBITDA between of X% XX.X% to range increase our and We midpoint, X%, end outlook X.X% raise year up of range. be a We high

updated our we And in In results will the we through XXXX walk guidance I I'm great on calendar you X strategic a actions pleased mentioned. ahead the year. track say or moment. Slide laid Alex guidance out remain for impacts X. the more that and QX, of of progress detail priorities quarterly previously and in includes Our expectations. in just coming to made

with sales start capabilities. our Let's expanding

of reps year-to-date XXX hired have We year full new our sales or XX% target.

new up are as expected, we we've talent in the are and QX with Our ramping hires pleased recruited.

ramp we giving X expand ] approximately us take to The pats allowed reps sales geographic than reps ever XX% sales than the these a increase XX the last vertical [ executed number reminder, which prior fully more coverage, SMB that and year sales greater additional up. enterprise is in months wins, XX a different us As states, to versus our logged quarter, In before. have year. over and Xx deals

year we optimization Year-to-date, expected. coming Our target. portfolio of efforts generated XX% revenue or better are have full million than of along our $XX in-year approximately

be As the more to of to the initially expected half weighted you second we recall, revenue year. may the

the value-added and capital flexible integrated to working program for invest their businesses. grow we as services During such short-term program This partners our our to quarter, loan provides in offerings. launched merchants loan and

[ ability sell services X.XX% in quarter. Solutions to prior ] from Merchant increase Our our [ to rate ] value-added take helped the X.XX% these like in (sic) from

on to which track. remain third for revamp year consumer priority our was acquisition Our efforts, the

our July. these checkout. partnership as use to sponsorships We've viewers. and partnership we Towards experience Riot and broadcast entered region a move into the million audience was allows This across nice the becoming paysafecard tournament for the of seamless tournaments. we're with quarter, Esports the sponsor the This new generated through results a an end gamers seeing secure we EMEA strategy, and the of of incorporated transaction X.X during Valorant Games, main

under efforts our Finally, innovation next experiences. customer and deliver on acquisition to example remain experiences to either consumers This go innovation could probably track. or

to in of Revolut's our our access network X As partnership partnership with providing Revolut. recently Revolut's services to a this U.K. us it read, locations. XX,XXX have eCash customers, probably What's eCash we lets you customers about may announced great million is bring turn,

We and new exciting generate expect eventually is European to to product this other helping innovation revenue markets. ways. roll in out service This us

of amount quarter, This product year. new XX% by innovation grew over last revenue from the generated

to take quarter. merchant e-commerce, led book saw our stabilization merchant Turning on by our grow SMB have we throughout Last by being impacted have stabilize business XX% taken SMB improvement, increase we ISO roughly This of in discussed led line to one our book. was solid direct rate portfolio book X. a number in and with QX, now that of growth portfolio steps XX% with quarter, along and volume which the to our just direct volume. our Slide portfolio, over represents SMB that by We

ISO to another Our double-digit show book with continues strength growth quarter.

executed Approximately moving continued of rebalance expanding which new QX to continuing with upstream off. highlighting Acceleration from of existing years enterprise portfolio almost up to across the XX% revenue QX these in the sales efforts X We the signed approximately and the zero a X% efforts, in in deals was as we XX saw were progress, across ago. higher-value per merchants to verticals QX. sales presence our increase XXXX. is the merchants Our of wins XX our our pay key cross-selling U.S. geographies, our success customers, continue in and enterprise our

over merchant. Slide services saw XX% quarter in update of revenue QX was higher year-over-year, and XXXX grew occurred strong and that to which quarter net North QX assisted to more XXXX revenue states revenue further deals we versus customers per last A iGaming efforts executed quarter. revenue year QX XXXX. America last on came that as X. drives XX% proving merchant from accelerating our by products XXX%, existing in sell iGaming, XX% Global grew our retention QX from additional quick iGaming Additionally, and year. XX% another the in legalized this wins additional X that QX the year-over-year year online in

XX% sales customer iGaming cross-sell clients. cash allow find quarter the the won continue our the existing register. larger in with to coming a Our from cross-sells of deals payments us into piece of to These opportunities take to base

to holistic be work active In saw successful. Slide QX, on the core digital started eCash. with we driven their our to and by based view merchants grow we product segment X. expansion, ready offerings QX, additional wallet revenue help our Digital through provide stand them and performance. As geographic a per KPIs checkout improvements, XX%, we more grow In of quick to transactions user wallet, investors reporting Wallets'

users, we sporting in quarter. with line users saw seasonality acquired for events This quarter. we in QX reduction grew per X%, This X-month marks both those driven revenue on eCash and average more quarter by of user growth the initiatives to year-over-year, the metrics. We users is largely attributed active given and Additionally, remain of approximately the consecutive the year-over-year in product million the by iGaming. revenue experienced sixth flat the of during active X.X

While this our our goal. not stable, base user remains is

growth. returning our focused to are We on base user

we year-over-year, and did longer had momentum growth, classic X% wallet, see we active base. out continued of grow break user quarters growing have no reflecting X now While consecutive our our we users X-month

continues a also our to comparing with payback, additional we generating and on conducting this consumer us a We revenue adoption When this engagement. an highly driving are highlights solid base users ARPU, as and why priority. ARPU which remain the transactions is growth foundation and returning cost, our opportunity more a acquisition cost, X-month are is $XX.XX to new in current user quarter. higher KPI: a and why attractive which focus was introducing Overall, which provides consumer acquisition approximate consumer is

leverage our rate the consecutive and to in financial X.X% by sales that to and laid revenue focusing for ask a X%, X-plus-percent take EBITDA points XXXX great year Year-over-year, Alex in years name detail. basis net of us volume allowing X% experience, out in more innovation and product transformation for quality metric. from us X%, XXX we raise reduced growth the years. With to strong to had build delivered our every original results guidance Paysafe to So expansion, X.Xx, to X on I'll just X% X% the at adjusted summary, to hold growth QX a review puts strategy ago of few. a that, growth are by X% a guidance and growth revenue of enabling position to us X% The momentum, we QX client of full taking midpoint revenue

Alexander Gersh

Thank you, Bruce.

to currency in summary revenue a million Slide XX% the e-commerce led quarter and for channel our as X% well year-over-year $XXX.X basis. constant to billion. Solutions of or increased growth Wallets. $XX.X expectations, Merchant on X% Digital within initiatives product our to as Total by grew double-digit new Total within revenue of volume move Revenue second volume X Let's accelerated ahead the growth results.

XXX slightly basis of X% our or year-over-year of margin was sales Adjusted on the for a quarter, the in take X% Our currency X.X% in increase EBITDA and points, from prior million to XX.X%, portfolio rate constant $XXX quarter. Adjusted basis. reflecting EBITDA increased investment primarily optimization. a X.X% was incremental an decline

mentioned, remain remainder Bruce $XX.X As a year-over-year flow throughout cash expect initiatives Adjusted increased to of $XX.X increased XX% unlevered million, basis, year. On our and EPS and to income LTM we to the the $X.XX invest free on reflecting X.X% net rate. XX% an adjusted per $XXX.X to X% million, conversion grew million approximately track, share.

EBITDA and the optimize investment reflecting our XX.X%, move to points on our to to of an initiatives XX growth business, progress increase $XX.X The year-over-year X%. declined X% e-commerce and volume year-over-year, segment contribution to XX% with led to the of XX% within Merchant was results. basis iGaming. increased the Let's from the SMB rate discuss segment, initiatives. Margin by capabilities XXX reflecting continuous strong Adjusted our Starting grew expand $XXX take was our strategic driven portfolio. revenue increased $XX.X million. XXXX Slide by Growth revenue billion to business, sales volume remainder our million, and Solutions,

to revenue Segment's segment basis. million. increased to strong XX and Turning Digital revenue growth adjusted on performance expanded in driven an iGaming basis improved was Adjusted basis driven on the on which to engagement X% KPIs, X% quarter. EBITDA margin or and increased X% constant of million, product digital points, XX. the by wallet was a EBITDA X% $X.X results a Volume within currency billion Wallets increase And initiatives. Slide currency drove ongoing and by $XX.X constant or X% $XXX.X

of the Slide to end XX debt the total for summary Turning of $X.X was just capital under the our quarter, billion. allocation. At

During net decreased million. the by $XX quarter, debt

to the adjusted stands EBITDA ratio QX X.Xx X.Xx leverage XXXX. in Our compared at

continue us with shares Additionally, million an of XXXX. of business per remaining million generation QX. To to year, to during XXX,XXX at allow discipline and the to at will $XX on the also average approximately for first shares in repurchased last continuing the $XX.XX repurchasing we solid approximately remain the shareholders. recap, end confident to while quarter, half while flow capital leaving We million of second since our us of XX%, cash delever by in program reduced debt EBITDA repurchase cost investing capital QX $XX our have and the share, of we our $XX our allocation return that

Before just and income months going that in X.X%. remind rates, growth was headwinds into top tailwinds, X%. with this line first FX to you from interest even the year, our X FY accelerated let growth excluding me interest guidance, the 'XX, FX In and approximately of

let's turn to the full Now guidance. year

end. our Therefore, We with at now results X% growth we X.X% a top is progress implies are of investments. to outlook growth our are X%, of the bottom ongoing the which rate revenue to The midpoint. end raising the range of second pleased the our former range our and strategic of half

efforts the mentioned updated revenue includes outlook portfolio of earlier. our Our rationalization Bruce impact

have the to expectations. we X%, between is ahead to points Excluding the initial XX.X% XX%, impacts, Despite to reduce long impacts, run benefit we basis guidance. prior a those XX our as reduction EBITDA well X% will actions would our from risk these company business. We the now adjusted expect believe grow with in short-term these margin our expected come to in associated which between of of revenue we

been severance-related would still Excluding ahead the to between expected our our we year XX.X%, have with and costs, margins the effort of year. initially beginning portfolio rationalization full at what XX.X%

first expansion updated year. half points implies our versus basis guidance of Additionally, this of XXX the margin

be the unchanged into be heading our year the margin at to X.Xx our now we end year. exit will that We expect XXXX. leverage Also, for to adjusted the between expect of X.Xx net EBITDA

appendix see Finally, please our for below-the-line other assumptions.

to for questions. back before Now I'll we call take remarks the Bruce closing turn

Bruce Lowthers

Thank you, Alex.

plan Just take and years, ago, would and year X to around. would and our X over was innovation. a X At to return company we the I growth XXXX, to to it to Investor and on experience, we've join reiterated our us client put focus aggressive turn growth; to years I product I forward transformation the year profile. company; year Paysafe, X to Day sales stated in normalized that accelerate bold stabilize X fortunate

a I last talent our When would addition, we the be would In recruiting the of stated the to unified metrics to thoughts right silos. years. were streamlined in culture on that structure and are became we who and progress create on decentralized company, in over the to competitive. I improvement. brought on some to us joined organization as allow like focus eager talent the working We work couple embraced a and team. focused We right I offer

operational reduced team. XX%. of in we our office by we and change layers brought people footprint management a together by had the reducing by Specifically, our leadership XX%, XX% our We

become operational on a As employees offices deliver have a relationships, result, vibrant collaborate and our build vision, where strategy excellence. place can and our

help an lifeblood we #X Power these of enjoy. any customers a X merchant study; weren't grow office Finally, is before. to part savings provide to together, of reduce just experience front using years our U.S. ranked We our that to J.D. efficiencies we've business back in satisfaction the been and able even drive XXXX expense study office. The

Our focus we've XX%, there's merchant consumer automation help helped that gets XX%. These wallet improvements and to conversion still digital times by and attention. some examples our drive merchant the been of transformation are us interactions merchant on experience reduce call a and do. Sales satisfaction, of lot but our client by just able increased has onboarding for to checkout much by XX% center reduced

our result, doubled our of and needed XX% and will point just margin And existing sales our while portfolio than enterprise we our which XXXX book sold expanded on quota-carrying our We deals SMB a making now cross-selling. progress have footprint. geographic that our as QX good focused force rebalance out were I'll customers. into We So to with help merchant expansion. e-commerce book, with direct more

revenue our wallet place. innovation allows and point-of-sale the transactions take of to which our the as of device in rightsize see be wanted and the growth a together wallet must lot XXXX, focused settlements, more this drive as a This manage help finances XXXX, of QX In usability their of community ARPU. a merchants building. receive and mix, margin-accretive. SMBs. merchant to advantage phone in Success launch We direct focus. In their business more with Product better for our our come platform will wallet merchant to and acquiring opportunity would improving we wallet never-ending growing on market. momentum use one fragmented have We a we drive be our in with the a usage, help business wallet

We beginning declining. in in our that emerging remembering experiential we're and lines business were changes, feel before these many that positioned innovation are our the worth just well of economy. It's

had basis, in XX% plus led returning our basis. while have EBITDA a by actions growth to X-year SMB financial the These improved turnaround revenue and the leverage revenue of On while and shareholders. our driven financial XX%, employee improved classic a This ratio on in utilization net volume of drive impact decisive e-commerce. Our and our improvement X%, a digital on debt X% back down million increase adjusted wallet, value results. results CAGR headcount positive to $XX revenue X-year grew in CAGR by helped grew a per us X%,

future, It team we importantly, starts by foundation actions More need compete. us scale the here. to are these to the taken positioning the building and Paysafe

by we outside were Tech are seeing fun by years the Year We're list EGR Company Elite. To and job added X the were named ago. top we fintech close, CNBC's XXX organizations. Another team not of to Year by Company the world's also companies. of same is the of recognized be the part the company recently of the Payments Software We

years, possibilities. free revenues strong our the many Even environment leverage. in us expected. generation flow excited and new business, enables our rate last the about capital high over our reduce in team to cash we Our have Today, return of faster is the interest shareholders grown couple than invest to our

the value would execute continue continue we strategic we you if As in a in as our please. the will deleverage, see We your of lines, business the significant will upside initiatives. With take price. be to that, to believe future Operator, we we the increasingly share reflected open questions. on our

Operator

line of is Instructions] the Our from BTIG. with [Operator first Andrew Harte question

Andrew Harte

merchant the drivers. called On lot side, a of you out

you e-comm things that but main called think pickup XX% really the can you those order the was other And going this -- one, value-added forward, in. charge-back was nice, stuck we're SMB there guess really us And I ones drivers to this the sales kind kick most? growth guess loan the backup of of team still yet obviously, was quarter, I out too. some offerings. I accelerating one which growth then at solid direct growth on services, terminals, protection, for rank of in increased out have

going quarter will we'll XQ, So kind you What contribute quarters? there guess, look of then that things to to I that how are still the growth well? drive to it start saw maybe this is to sales headcount as different? sales increased is And future begin the see

Bruce Lowthers

quarter color along. much. first, for triple add then the say would start second Andrew. and And row. think consensus, you consensus all But Alex net revenue Thank a we're EBITDA go this off, just those some we is, versus Yes, and I things in with strong very really I'll what beat, as I very versus adjusted the look, quarter, pleased we had overall, can income,

the iGaming business the growth, merchant really momentum. In in in to good some show by America. e-comm driven building North we're growth to solid the continues really So obviously, business, regard part

a lot of there. seeing you're growth So

of rate we continuous activity, piece think providing optimization take lot to the are that's solid other a nice programs that hoped, I a as volume, we've lot our but working really coming and bear driving got the out of expansion.

and in, full that and started driving force, We maybe invest projects both don't the if a program return, full going great QX. look this halfway We're project. recall, started for million from through were seeing that sales talking quick target we I million to know, $XX you our the right? that like it project. more started, QX, So with maybe initial investment in talking a for on optimization we So was optimization about we a a about year the the $XX great results on year, we're point. We that the right

good very about feeling we're So that.

nice when I bit, SMB balance kind touched direct us. talked business and that little about you back of the a a think up accelerating on for was

and sales ultimately 'XX take start your at force, continue question, the we'll we continue that that really and to the of to part things we So to with last those as these to into hope then 'XX. actions, look accelerating as move that

the little half team I yes, should say, see salespeople a they to his activity we able Rob is year, and first. of the So enterprise What that were hired first bit in what do the of a of cadence. in lot would

And people so late we on those should towards as half the start of QX seeing probably year, the board. start back that coming

from that So see going QX 'XX an should really we into team. acceleration

I good the touched feel there. we're on and so think right on as like track seeing deck, far, We so we good. they're progress in

So the Alex, questions. I appreciate anything?

Alexander Gersh

thing say only I portfolio showing The is the great that talks acceleration. optimization that Bruce is about Yes. would

delivered revenue revenue. quarter, you or in so, $XX it that if right? think remember, of the million about it said first quarter of million delivered I the $X second So we In

quarter the $XX we $XX talks $XX to to acceleration the maybe would the that second could a from So the the million, million slightly total the see quarter that that's what's happening. $X and proof target to from quarter million is expect first better even than the it's from second, certainly exactly million to first about is make when the fact which of acceleration Bruce you why

Bruce Lowthers

Hopefully, Andrew. everything, that answers

Andrew Harte

nice Alex, that And make the then portfolio right. the high-risk to quickly want exiting, the you're of on how through it's optimization just side. see flows relationships we're that merchant kind on No, sure to I Yes. quantifying revenue

just can as revenue walk EBITDA impact. impact to about a million about it's guess, to $XX you through headwind well? You I X% so said the growth,

Alexander Gersh

No.

our is this guidance. in of all baked So

I to expect don't half of the the know We year. be in $XX million revenue from. it the where coming second

the second -- get be -- is It roughly need to the $XX higher-margin we to And for in a need EBITDA again, of is our it these is and it year million. to we already. but -- things it more expect do side, something to stuff, be on is make We the to guidance sustainable. half that that impact us

it year, -- So not second specific It's guidance for for but have the in is a half a disclosing EBITDA it of will we're the this. our higher margin revenue.

Operator

Our Jefferies. next of Williams question is line from the Trevor with

Trevor Williams

Great. be go just Bruce, any to to higher-risk could to Alex, you yes, some if why we that back decision there now, exit specific of on spur verticals, the the could would just if helpful. catalyst if expand was

Bruce Lowthers

Sure. Thank the appreciate you, question. Trevor. I

look, changes, reactive in very at regulatory they the changes. think changes So market historically, been to whether look when Paysafe we we've marketplace, be I

across some And do that movements as consumer globe. confidence that proactive. we're being a around putting we and going 'XX take there's out to And 'XX. revenue growing accelerating growth -- businesses We for into the so some are [ our to at have 'XX, these forward benefit we the up clearly we're here what a just we back trying now, as we we're can look pace, ] forward because 'XX, -- is see now, such position have sustainable ourselves the sales at in going feel

have chargeback at looking is to higher-risk Higher-risk -- things about these this about that are rates. this us So really us businesses. really higher yes, us is driving

us we a to part position as portfolio. that I trying is being we the in we can we're and our at put portfolio historically that this and it, look growth hope than different a being just doing trying to forward. stance ourselves And on be is market what of taking of we that aware optimization drive Trevor. now go so proactive And as helps, sustainable have

Trevor Williams

base. the that. that's the main growing to to there to back and on the want Wallets then, getting being how user the appreciate And Bruce, great. No, Digital focus Yes. back I go on comments I

the the back or maybe growth? base or down of And think user to If are X you playing that out to could the so, to most things just path see you X year kind as about important think distill how the we you getting there? next

Bruce Lowthers

Yes.

So we a I comment digital look, I up probably think growth -- I product, What in in solid there. the my continuous say is would wallet we messed there. hindsight, had

the When users, had in that. So accelerate. the third in it's you our that Wallets growth X-month the quarter that so We'd look of to segment. we did at Digital we a row what switched in like number active, to we've is

Games also to done million marketing lot to accelerate the the is Digital partnering money new on light about this So acquisition probably eCash, that what through that feel some the number under [ like of got as Exela customers we're We've consumers. We've much mentioned we a grow better at into a our we're Revolut, partnership transformed Riot with was we're did wallet some what the But that is doing really nice results what product. job. our allow we things When doing, really group us accelerate with with bit our is you as to the with in well. little we're the good think with move our segment from acquisition And X results year. as But opening, back Wallets confusing [ better and the doing the ]. Those shed want saying more of others we our We'll of I seeing is. a success team. products, taken. to initiatives had and type where opportunities cost of I that are of And to for as marketing half spending going And we've QX. and as of other versus we go accelerate digital we million X a with ]. really, us, I our look the they're handle think to forward we're of we've we've the starting continue

So I of think good a we're steps. lot taking

we're grow think that -- little we see bit. can a X million in a where I position number those

Operator

UBS. with is Our Timothy from Chiodo next the question line of

Timothy Chiodo

protection services the more figure part chargeback bit referenced in chargeback types taking little could that. are services then you're the e-commerce back protection, combination shed providers? $XX likes on basically of they're the shift I'm different there, card of -- or follow-up of and towards segment leveraging the about with mix services. just shift hoping the a more the listed not And the on world mean that Apple click-to-pay needed? and third-party some issuer, clients meaning maybe capabilities that related that The what e-commerce take Or a in a to do the that's million chargeback a the for just Great. liability if internal roughly may Pay or ] or of maybe revenue Google as these and more the maybe slides moves light form this talk you value-added could is, of [ from the you assuming may Pay, that is networks, for and something was aspects less

Bruce Lowthers

Thank you, Tim. Great question.

I not clients. what say SMB by offering is chargeback our clients, predominantly we is our So would that taken being e-comm have the

that And not revenue stream that exposed these are trying may just are be a the so businesses to to and anything small lot chargeback appear arena. in of their stabilize

I will to regulatory question, around a other continues but that more own diminish way see and you'll allow or duty, going as And how the broader I of chargebacks. to any mitigating to your technology over and it period more forward. that think consumer the refer whether just from time. see And technology to of or around refers global you're more see evolve bodies on you scrutiny an chargeback, think to will it extended I that regulatory technology the revenue the probably as more we're that's FCA impact do think CFPB moving my time, theory way over streams I think emphasis consumer, be and

Timothy Chiodo

Okay. that I The follow-up value-added another appreciate is service. Bruce. context, around

balance you in of So you about structure and the little rate. about year-over-year mentioned, went off the sheet Can bit that balance a contributing how which loans working talk to on you capital that just are the decision? sheet, take increase program

Bruce Lowthers

product third-party That your of question. using, this that I Yes. Tim, to a I And just product. apologize, are I we like loan a think answer forgot other part is

an we risks know, our this here. just customers. similar a type no well to is competitors for Tim, loan. So the third-party, of program a fee offer you really This as large origination most their is take

more our start bringing these You'll suite up we to be start see filling as of product more commensurate of with and programs us our type group. more peer

see So good parity first ends a in days. good early what what it's first up a the the perspective. XX we having days And merchants. SMB we're for the creates too our it us, is offer our in particular, But XX great to program, for, very uptake some offering positive. materiality from It -- Early world. in to was

Operator

Our next Paul line question is Research. of Obrecht from Wolfe with the

Paul Obrecht

on just existing to Can Darrin. how just Paul is of base for conversations products cross-selling would existing touching you're further Maybe great. on merchants? by Obrecht start you're driving approaching adoption with you This the merchant seeing success the these and be with really

Bruce Lowthers

Yes, you. Paul, thank

couple products And I of a of the we with nobody I had I talking beginning each acquiring. presentations we wallet, when how one go look, sales we predominantly each to U.S. had I really is had was organizations, had. was in siloed So that predominantly you No other's one was think talking because clients. Europe to the all other organizations, talked the to and years these was we about ago, came did the first if very back

last as They're on our that organizations couple over growth years, for Rob's So has mentioned going account. We Chief responsible now those largest account managers team of Gatto -- and together. we've the our the accounts. Revenue brought they're have Officer, in of Rob

And And to ours we And taking the is one using now bring we're customers, for that. weren't our someone. certainly of opportunity what seeing every were of we're doing e-comm wallet forward. example, gateway so

a added last We Pay also product, quarter. new by Bank,

that And take so America more market of those things to share it give existing our North the be go gain opportunity customers, or more register whether the back register, and us to of in Europe.

more adds So going be as Carroll's team, for mix strategy our into add us, back products that the will our to we existing customers. to Nicole we'll be continue

We've base be we businesses. that really we're from base. to need got a great sure anybody their a want, successful respective payment have make a with offering perspective everything We would want customer customer they that and to

Paul Obrecht

you're can QX? both you patterns, have trends in provide then a just maybe in e-comm far growth seeing there? as then any And quarter and Great. consumer any in on some spend the shifts and color seen And follow-up, second the thus you

Bruce Lowthers

Yes.

prepared So in we of on the what the e-comm business, said it's kind remarks.

I think it's -- business e-comm across our we see solid growth in the board.

We North are that America. of online states in some seeing the the [indiscernible] of came

the and a of And normal was quarter, back Premier to due seeing the half the euros going little lift year, part now of of our we're you're year Europe. from League We the into bit is So some in busier which great. which the the in had lift sports that. from

e-comm, maybe little continued well regard. it's good very overall, overall, doing that just results, broadening in So a bit. really out But steady performance,

be results a I the with regard we the July, pretty solid look, -- expectations. being We're may in in spend, to QX for consumer seeing but up something with spend quarter we're not on there lining it. consumer line seeing July think there in

materializing So for nothing really us.

momentum. have a good sales lot of I we think

about So we feel are pretty good we QX. heading into where

Operator

question with line next Aditya America. of from is Buddhavarapu of Our Bank the

Aditya Buddhavarapu

couple a already asked, -- I a have been of few. Most them do have

SMB Firstly, back growth, just you've direct could about, that been I XX% Merchant to up Solutions, that know get in talk QX. trying was business to and in in the you business?

year, CMD you're then high So of back last about maybe double-digit. and step the taking to going more single-digit just just bit maybe And a the to growth initiatives talk mentioned target there how at midterm that? low the looking you a

of take XXXX. portfolio out impact to have the say the you for X% optimization, did If growth would X% merchant been you

color that eCash you future add maybe of the into you from economics? sort Revolut in let's more of talk heading that partnering levels double-digit then business, say, model that that sort get general, just terms partnership one those And for with and of current you maybe could you question. growth how that on low 'XX last of in as the works with could growth The of, some see how about sharing And players? 'XX? just just do to terms the in [indiscernible] that eCash, fintech So on

Bruce Lowthers

those. was through try right. -- to way All will work my That I

the Solutions around was direct think Merchant I our first So one business.

the teams. those a have of of We management lot changed

about gentleman a bolster good taken that that a that business. us for we've have to now. running that. see We steps feel We lot We of

into We have that salespeople adding a lot that. of we're

historically, The As We the that a We I want growing a direct the that the it we of business to We were like gives business. of business. part be like mentioned, all focusing on clear. like it's place we're all where we better part we reason have. portfolio that felt I us very our of direct our subscale. margin. is much

drives really for that's that so what us. And

the steps taking to that So We're into to product we're them allowing scale direct force. and new cross-sell. sales adding up team

hopefully, from that. so results And we'll see

The was We on... understand, about the second double-digit quite I question, didn't in won't 'XX. comment growth 'XX,

Aditya Buddhavarapu

can repeat I Maybe that.

Bruce Lowthers

Yes.

Aditya Buddhavarapu

I at when about the Sorry, back just beginning go the growth you was going of high double-digit to low last CMD the over midterm. to back year single-digit did ability speak the to to

X% termination would to to been you've you have year, X%. this closer merchant raised impact, Now the but without the guidance,

closer to So that it midterm to be range. seems you're growth getting

going 'XX, key what could as into be what's the Just get to there drive you you drivers? wanted to to see head

Bruce Lowthers

my the momentum. first. we understand Look, year when back have I was then did if want I so enjoy was to we're question, a Investor it we I lot a really going what Look, And to progressing. still ago. of guidance guess, midterm Yes. Day, quarter this

to trying quite the have about lot company, course. We when our We've are look we quality talked we bit. good growing better of an question, and 'XX -- from feel We of X.X% about do, day. revenue to on over a guidance and progress year. right X-plus-percent due we're but the had good still growing which to back direction, that moving work feel in the opportunity accelerated do years, give the in a no to you we'll execute we've there's this But from prior now, we've each

nice see year. we year So this acceleration to growth from last

you So and 'XX always we'll we're give seeing keep do we'll had question the in guidance doing for another to like We're we what 'XX, or guide. And our doing. no? just continue QX results, good

Aditya Buddhavarapu

Yes.

you sort would partnership with the on eCash opportunity at that similar for forward, partnerships? and growth of of on look eCash the Just going product. Revolut Is types

Bruce Lowthers

Yes.

Revolut accelerate is for but great but other we partners, from the program. paysafecard early, consumers, growth. growth, products to not access blueprint a accelerate another I creates that program allowing It's certainly do normally in a to what and us to only the very opportunity our it's think way eCash, it with

the and with forward. they're Alisa great efforts are things think her I So team marketing some Barber doing putting

had But -- very all about So nice our We out. early. we it's We'll in see that but good plays growth that. feel business. double-digit how LatAm

about seeing acceleration lot to at reflect seeing a And eCash. we're emerge accelerate, you things come starting eCash and we're positive the So having to I to end we if think that of of now back on, some in of QX, talked bear.

So about it. very excited

Operator

is Capital question from RBC Dan next line Our Markets. Perlin with the of

Daniel Perlin

marketing the touch including the new customer you third KPI expense there's brought looks out, cost, to $XX.XX. -- you're And this wanted on parties. like I acquisition like it and -- sales and

kind incredibly fast. X-month so a that scales? like can the rank those things. then which about secondly, order is, how can And payback, you is you a couple of One of we X, of contextualize period said just So implies payback think the think I

So my to to customer drive kind question where that the in want of into there? of cost ARPU the to and on X-month kind on a is that you acquisition that order is, Or expand bit lean period? you're increasing little be activation to ultimately willing

Bruce Lowthers

what's Yes, as trying chime just marketing putting more to acquisition, mentioned Dan, we're is do approach. what money, this. where in revolutionize here consumer our to in But there, I QX, think digging thanks the question. also Alex we're I -- for how in do on trying to of let our Look, going understand on we we're I think kind I'll

we as of that of around on innings know, to series if got be customer it's results, a stage. I it add we're ideal metrics how test that it's payback Alex, some you. sorting with And QX we We've there But but share want very we and is wanted market these this is focus as what good on at this to so go we're through. seem bringing we programs our early don't a that are QX we're now acquiring. more is out to the lean that forward consumers very you do any... share into profile, the having And We'll great into payback this. we agree, to what

Alexander Gersh

expensive maybe that is us, and use that to only the mean our digital the have of that goes right, attracting new and say is wallet And how eCash much, that who revenue. in in is customers. is. I But X thing using our with more, whole how ways register unregistered I customers in the We other -- One thing we'll we division, of customers, starts our see right? that driving somebody that ARPU registered would know that who's year, or us once us maybe converting a is customers, higher. much business

registered. a the of converting cost new being acquiring than different from of to acquisition could very of customers So the acquisition existing customer be of being cost unregistered having

has it bit, we to think it's payback. -- it's will don't a a said, Bruce as So I little great problem. increase If a

ways think to doing grow going invest that and I our more try right that now show will to forward. -- revenue. What ways, new have is finding that that we metric you certainly to we opportunity. we're progress the And would do efficient

Daniel Perlin

there. That's Yes. drive great growth It like seems of got expand continue you've to to plenty to room to that see.

a doing be kind shifting march optimizations optically, you're of that customers, just to and kind -- and want just expected of us services, bit? these rid guess, lot follow-up given and portfolio kind of to to higher. sound I like out then rate. is we It down just maybe of heard call going higher-risk some quick more again, half, little for hold some it the going pruning other also value-added that of the about a but all there profile mix that dynamics you're mix kind EBITDA. second portfolio to about larger And of continues impacts as to think the does getting a take Or on enterprises? enterprise. even shifting The I Are then of kind though state, you to the that's

Bruce Lowthers

that, covered guidance our think I all Look, Dan. Yes.

So had in we don't guidance. have any additional margin impact already than we our what

good very feel guidance where we about at. So we're the

of allowing faster luxury a top being long-term our accelerating bit being company. line. I just the little think, for right proactive stability and making totally That's the these decisions us of the transparent, candidly, probably, are we on

great it's it's of for So the because organization. contained, and very the think we'll think a to we of doing. be fairly I thing sales I strength think grow us quickly And it over

Operator

closing Ladies comments. question-and-answer Bruce? over hand his to Bruce now and gentlemen, this concludes our conference I the session. Lowthers would for

Bruce Lowthers

Yes. Thank you.

for thank It up everyone So we first -- possibilities. quarterly into of appreciate second all, call everybody we a together; and first involved excited here, at really all us the here year start the and pulling it. for really Parker, the about preparation as contributes. Paysafe, here We're year. the gearing very of second Matthew just the of strong great half want everybody half half to a starts I of getting of the job

So thank very you much.

Alexander Gersh

you. Thank

Operator

of for Thank you your Paysafe conference now has concluded. participation. The

may disconnect lines. your You now

Paysafe Limited (PSFE) 13 Aug 242024 Q2 Earnings call transcript