- Earnings call transcript Q3 2022

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Operator

Good afternoon and thank you for standing by. Welcome to Payoneer's Third Quarter 2022 Earnings Conference Call. At this time, all lines have been placed on mute to prevent any background noise.

Following the speakers' remarks, we will open the line for your questions.

As a reminder, this conference call is being recorded. to of call Investor like Wang, to now VP Payoneer's Relations. would hand over the Michelle I

Michelle Wang

Thank you, Caplan; operator. Payoneer's Michael Co-Chief With Payoneer's me on Officers, Levine, Galit today's Scott and Financial John Chief as as Executive well Officer. call are

of results any our statements I'd differ uncertainties, begin, you remind forward-looking update today Investor forth not with may statements our as to including except forward-looking forward-looking intent those to may does and them, subject only law. site. to the These that assume statements as filings Web are the These set Actual or Relations by materially forward-looking like are any the call available SEC, company numerous contain we from we Before today's make statements. speak obligation risks in which of today. and section required in

contain today's to John which be considered to today's release, a is supplement call the addition, With should GAAP earnings Web that, the turn found measures available begin. to measures. site. In as call for be like may to measure I'd company's measures. press can as nearest substitute GAAP to financial not over non-GAAP and in These on a the Reconciliation

John Caplan

is these We XX% revenue year-over-year. over challenging EBITDA delivered XXX% a It the team. traveled entrepreneurs XXX% their be face. over guidance have updated and the and revenue EBITDA face and Payoneer They see third and SMBs and of joining emerging is a as border told recently an scale Scott meet EBITDA. powering to and quarter ability limited India growth quarter face of our them And the understand thank opportunity underscores rest On year-over-year. up us entrepreneurs and I outlook is options you globally, to to growth and local discuss business, with about growing Payoneer's account cover today Good the strong financial Payoneer results. afternoon. our initial detail. that the and third our and our for in of business XXXX all to our discuss grow We us cross will for role business obstacles which business. quarter emerging results will helps Scott market Michael economy. simplify operate when for challenges ways XX% the adjusted cross our more our financial the discuss quarter opportunities will I to border they their can Payoneer market, the customers up deeper we Year-to-date, and generated their XXXX of for businesses. capabilities their outlook helping Payoneer returned have third to for today's results. adjusted appreciation the our I results, XXXX the the call, of value in

less than grown growing Our whose for versus where this we ago. approximately X% revenues XXXX India of country first X% year months have nine SMBs a In from for year GDP the have a and world. is market do in dynamics share, opportunity just other is And XXX We our markets business many market of and emerging India growth XX% and see we exciting example around one similar in and territories. countries the opportunity.

and through Mastercard, to from move they around Payoneer use working partners, their their get need growth. firms They in-network large global capital the their to using our money send access go. can Payoneer They ecosystem pay use expenses They globe. where currency and invest needs Commercial the make to pay customers, their in from paid money and trading to local account ultimately small account, corporate can for buyers, they it to want for their suppliers. funds manage and customers bank Our payments including Payoneer also our marketplaces,

acquiring can accelerate fraction minority existing base to and and from account. a today account cross our of can utilize customers. And more border we to active new, and with broad other Payoneer and that to of freelancers customer SMBs the potential benefit our provide funds of the profitable services customers' represents their pace we One our of of global key A feature will aim and customers the that our our Payoneer full customers serve. range pay services. the of Payoneer is Our ability Payoneer customers store today

in in-network are and hired decelerating one penetration headcount effects our increasingly of first meet directly are platform as In Assaf areas. we our customers border Platform needs, payments low to maintain total major of Ronen company XX% currently reported them and in go-to-market to These we plus active Officer. monetizing we're our balances continue scaling our highlight instantly. today. plan Our our these payments utilizing the included one, growth. QX billions not in acquisition. the of are expand community ecosystem, growth. another metrics a XXXX expanding potential cross dollars believe network to Payoneer product we and customer In of and engaged Number and we meaningful are the suite. pace investments make September, QX, not global made focused to our long-term of Chief two to revenue investment and of to We We long-term as cost, Number our even customer two, SMBs our we are become has new source volume be

operations account between Payoneer ledgers and one, to deliver the Assaf broaden is things; our efficiency the of check, product platforms the use. gap our software technology, leading as and the two, that service and products value we our increasing physical high Payoneer disconnected customers and suite of teams two

support months. information expect more coming and efforts, the these We investment to will we meaningful XXXX in in share

to Our interest XXXX expected XXXX. increase significantly income is to in relative

initiatives. platform a as The invest benefit recent anomaly. we emerge to our update, and zero adjusted business growth communicated will the in we our this holding been from in this, we customers And has sustained will commitment development positive environment our from growth model attributed We interest quarterly currencies our offer. portion rate balance EBITDA. a last historical our of many a value to the In strategic delivering

lower consumer While is adjusted are our including XXXX for, XXXX in landscape, to partners. non-strategic we inflation certain to moderately it's currently impact the XXXX. half spending and provide specifically guidance, to we related formal non-volume planning on beginning and we Payoneer, in premature margins services revenue expect the uncertain high enterprise of plan second Specific economic onboarding behavior. are global for increase of Ukraine, factors to in EBITDA the war provide There several the

be and with our beyond. We thoughtful efficiency further spend will increasing while our in XXXX

our business Our balance team strong, opportunity sheet our is is well focused. is significant positioned, and our is

We to execute turn Scott it our third over our are quarter discuss I'll successfully to plans ability our confident growth create and results on that, detail. With in strategic to long-term more business value. in shareholder

Scott Galit

John, of million. of tailwinds. year-over-year by and customer positive had delivered XX% high results another of adjusted of new acquisition, joining Total we driven We quarter and sequentially, rising our Thanks, thank you us everyone revenues value quarter adoption $XX strong for rate interest another and grew X% EBITDA and today. services

growth us customers We that in of developed and emerging gives and of are expects our through And and current growth our growth continue seeing economies emerging had sequentially, In will diversity momentum XXXX, global deliver. BXB were in rates challenges solid markets to where that the the of Payoneer confidence than these generate emerging products business execute economies macroeconomic the XX% strong e-commerce, stable. IMF and resilience growth, a and Payoneer's developing content emerging diversity and This travel serve remote in the of range located. higher We markets customers focus industries, including the our freelance, third Volume travel, social our increased faster creators. more to to in and majority work, e-commerce market our than quarter and shareholders are be business year-over-year uncertainties. access Xx drives AP/AR are X% and model provides as the economies. volumes and

year-over-year around uncertainty near cautious remain conditions, term. economic the growth in Given we the about volume

the monetize generated volume on in Payoneer because compliance both customer the BXB AP/AR generates a controls. and This to future who generate the a customers AP/AR and Payoneer. to world move is helps higher rate. for in maintain business volumes, when invoice BXB as Although the blended year-over-year at AP/AR growth a take send compared usage risk across quarter account. to get driven our a our borders and is use to and from on fourth e-commerce volume across we largest of We consistently nearly growth the to typically due open holiday grow have is their ways checks business ensure a rate. the earn primarily to us wires. and countries sequentially, sales. Payoneer to our of to BXB total overall BXB such represented to in our outdated we big growth digital without to continues enhanced paid third XX% by we of opportunity and accounts measures take doing quarter needing customers our implemented money where our take or holiday the rely than fees This position other volumes. money, AP/AR faster customers and around account volume rate, currencies expected that funds season and lower are in and XX% scale increase strong higher bank

As at XXXX. first of customers volumes we grew of relationships compared these a year-over-year. half with for for the customers, result these enhanced customers Normalizing terminated growth certain BXB controls, AP/AR to XX% remaining over slowing terminated

retention generated consistent prior terminated customer have small customer acquisition average periods. paid volume and higher We take The customers for lower continue remained number rate. strong a to BXB and of AP/AR with on

a our the dollars the their the of BXB result. rate volume. We in long-term for the ability BXB increasing confident quarter the measured capture this So growth business BXB impact opportunity AP/AR remain to third trillions in blended potential as successfully about take market opportunity. for of and execute AP/AR AP/AR massive of to addressable in revenue wasn't is significant, as termination the a

are Looking own ahead, economic BXB we customers' see headwinds. our early signs businesses their that facing

very compliance us, a the our enhanced risk and year in volumes to ago. from in conditions growth near lap may slower particularly measures result BXB volume strong For of AP/AR macro we as growth begin term, and

globally, rate. along growth of blended momentum a will expect We growth, with higher strong revenue take be faster customer than growth because and volume continued

While our what them. customers offer fears, find immune in times in uncertainty Payoneer are our and customers it's these to more especially that challenging value not recession can macroeconomic

Our the customer strong, customers continues to number of acquisition remains products multiple and increase. using

dollars. is our more our And XXX% than with we service from the high Mastercard, U.S. Commercial value excited year-to-date, want is virtual they of Most liabilities. grow, to Another appreciating Card is year their to about dollar a match adoption services. which up increasingly receive our significantly the and are continues one spend that of payments card customers in ago. dollar

which Payoneer As are expenses interest for pay to a from seeing balance. we result, account Commercial more allows our Mastercard, directly customers their for

continue of complete Payoneer our with partnership offer We of to and and WooCommerce develop Checkout SMBs, the partners recently enabling Payoneer to us announced ecosystem a WooCommerce, suite services.

of all globally. of The dedication aims We your the of in opportunity, direct team third strong are and employees, our translated execution grow and help web globally for you expand through thank efforts. quarter. stage of continued the the to results management To all which employees Payoneer sales for to SMBs our entire consumer their Checkout our successful into early from store

cash positive us results our ample it detail. We for I'll guidance sheet and ahead and confident future long-term Michael discuss us the are growth profitability. cash and flow invest our revenue enabled to forward over more in and about hand now opportunities to to on financial of balance

Michael Levine

you acquisition, high are QX of million such in us. once interest and another Scott, continued joining value and thank our regions customer everyone Southeast by Payoneer revenue for increased year-over-year strong of driven benefits Latin South exceeding and to our accelerating finances see the services, manage of you, quarter utilizing forecast. as of remain income. Thank their Customer North customers We XX% to growth results, delivered faster again the $XXX growth receive Africa account. above businesses. September grow Payoneer make use their on Asia, America, Asia, as funds world payments, Payoneer around multiple to and and Middle $X as XX. billion SMBs platform East, the Payoneer

X% and our We dollar September emerging it. hold a U.S. that period. currencies markets as major Payoneer million XX, customer whom balances was quarter, the currency AP/AR, to year-over-year earned continued prior travel in the an from in they of acceleration new less sequentially volume in to increased other XX% impacted, growth value ability acquisition driven many been from $XX customer and With through have appreciating basket of of year BXB of XX% the third as are growth trust than well $XX.X to U.S. income volumes. interest customers, by to million the Payoneer these Year-over-year up $X volume versus compared billion. do

included costs, million, marketing employees returned operating XX% and compensation. teams, of than $XX increase expenses second loss of quarter XX% of in versus to expenses, Sequentially, costs representing rate from from revenue. transaction expenses expansion XX% capital million, XX.X% partially of in was loss diluted from thirds net revenue costs, due seeing and transaction We The up in $XX year-over-year. $X take each first structure QX shift travel, rate mix quarter. plans QX in to half benefits in primarily and certain of fees, higher QX million as revenue our lower a funds revenue. Net take increases higher related are to in by fair achieving quarter third points the improved third QX the and basis investments, driven XXXX. of $X.XX. terms, year-over-year the volumes. including and hiring and Including in non-volume year-over-year, partially in costs by was to transaction costs, the the to to to an million, and lower the the million base offices and take impact rate fees increased network costs Transaction was of quarter of increased and million in by This as connected income income year-over-year as third growth. industry change stability and were year-over-year driven the points, income quarter R&D per of Bank platform QX vertical e-commerce loss compared as grew year last costs the a new announced receive last increased labor top EBITDA large interest basic net up less commercial higher were XX third customers and to total and revenue revenue QX $X compared was in $XX our and sales adjusted improvement lap customers for lower transaction largest related to revenue, transaction points our We hires and XX% less marketplaces, in optimizations started $XX and than year. other at well revenue excluding in representing the interest working XX.X% transaction previous Compensation quarter XX% in the begins the the from also component lower XX.X% year of transaction the milestones, we QX of QX sequentially higher offset improvement transaction costs, from of million comps. quarter $XXX million from travel below XX.X% up processor Two to XXX higher costs. year-over-year last in QX. X% loss also share year The XXX internal compared rate equity a marketing volume-related third moderate with rebound who million basis operating was costs, basis increased as of person. for growth QX. full as benefited at employees cost $XXX increased in salary the earnings by offset expenses, operating reflected cost percent value year-over-year $XX well sequentially, headcount reflecting call. in employee compensation. QX last warrants.

and We sequential equivalents the generate ended cash cash quarter and flow continue with of million. we of $XXX cash million, positive $XX a to increase over

our to XXXX, XXXX for full raising year outlook Turning our we guidance. are

updated results Our evolving and year-to-date reflects interest environments. and macroeconomic, rate strong geopolitical guidance broader the

costs $XXX reducing million, between We revenue guidance EBITDA and EBITDA sales services, our guidance increasing XX% fourth million adjusted of as midpoint and in We and increase The our revenue revenue believe $XX quarter. to along XX% value geographies are and and increase quarter our million. to income, of million be between to latest e-commerce $XX percent XX% transaction represents be $XXX raising seasonality and drive will high faster our with growing holiday to the growth revenue adjusted interest guidance fourth to year-over-year.

war the that Ukrainian found survey we the Regarding in continue our region incredibly A continuing to resilient. of to XX% Ukrainian their are businesses Ukraine, the invasion in situation be recent remains while of despite country. fluid, the conducted operate customers

expect going our in budget. our on remains we volume fourth of stable original at accelerate quarter. the outlook growth business Our Sequentially, Ukraine to into XX%

rate rate. take seasonal impacted interest larger quarter to holiday and as volumes, take by higher the average partially a who fourth in as continued shift pay be expected be lower by will be impact shift faster in geographies fourth mix mix income towards quarter, on tend This is driven by products. well Our growing the customers which to offset

small of platform. As terminated discussed, Scott we number customers on recently a our BXB

expect proactive impact first perspective. quarter of half year from fourth to a next continue We our actions and volume

We volume of the long-term confident growth AP/AR. growth. likely We growth expect potential will revenue remain BXB outpace in

Fed to in our on million exit funds the third quarter income increases. quarter We and mid in fourth customer expect the funds rate run based interest range current $XX anticipated rate interest be

improvement driven a year-to-date. expect previous XX% by our We approximately of of is revenues of over transaction This lower percentage from guidance costs costs XX.X%. be as revenues, transaction XXXX an improvement to

$XX be and We $XX are revising our XXXX million. adjusted to EBITDA million guidance between

EBITDA adjusted investing additional is as our our forward, going our our drive guidance to in future confidence well positive as generating year-to-date to business results due raised in continue growth. strong Our ability to while

non-compensation expenses our discretionary is beyond. include operating organization Nearly key four of and quarter sequentially approximately to additional increase accelerating this $XX and penetration penetration, XXXX spend strengthening investments focusing market markets related share strategy. fourth thirds to increase investments to our growth expect our million two of and We in market in

expect connectivity the quarter We more increase to across fourth and the related collaboration to drive travel in organization. expenses

platform initiatives We increase head party and with efficiency to of are investing momentum into our we in growth help our XXXX. as third the consultants

to a a margins. we to year we the We business. of expect interest revenues income the portion deliver adjusted generate next into increase XXXX, moderate invest plan back to For EBITDA

earnings strong in when success team's to share formal report financial results. demonstrated we deliver conclusion, QX will ability We In XXXX February. once our guidance again

profitable trends a have business positive and our see business, and resilient We built we going and forward. exciting for

in confidence targets, you our growth. the have position John, Payoneer questions thank investing for We interest On happy behalf future team, line. Scott of continued answer meet senior ability please the while open We're rest your XXXX to financial Operator, have. of to and and and myself, our the management now we may you profitable of support. many to years for any

Operator

Of Instructions]. course. [Operator

The line Goldman ahead. first comes question go on Sachs. from Nance of Please the Will

Will Nance

Hi, afternoon. guess in nice of giving you investments guys. business. wanted to or guess interest topics. guys I windfall two one Very is the I it kind or to most income make several Good changes hit the like seems I results important, on today. of the opportunity the

discretionary some sounds mentioned or investments. XX million for due of diligence onboarding the you've and controls like KYC BXB. You around the enhanced in It

but the little also the half be falling I could drill that BXB around on year. particularly next latter think specifically you you two, to kind you've in I the I these, of revenues guess all there. expect could you're on some you a revenues, in year? of back non-volume, and non-strategic then year changes the think expected business? next mentioned you made this off what the way profile kind either bit off non-strategic of on And down quantum of any -- asking said the that like customers platform is And of there Sorry of or for margin quantify the taking that questions for the around five you then fall those? types on looks

Scott Galit

Scott. It's you. with Hi, to talk Great Will.

just term a volume. So first this is with us on measured as trillions think for a us exciting really and long this is we talked do, really on massive opportunity addressable we the BXB, the we've in we everything about, of opportunity and focus of dollars for

for that And we vertical there and to so our kind are different of as offerings, every the activities. we types grow market as what we've of continue find of different partners product had markets, industries and the and learn risk serve different that we trading one is with profiles

verticals are for And we appetite. so flows that ordinary our and to or exceed to we certain models risk to support, course us of it's refine our and think recognize tune that there risk others then enthusiastic types are that

in BXB perspective from change that we the actually representing was underlying AP/AR customers made volume prune customers. to that that intact. our really of small It's there good group So in than a more number very performance select was underlying remain long-term a and of in revenues, views

KYC partners the non-volume business of provide. non-strategic, from less all represent variety that or those with them might might of our together some include revenues, onboarding their of or we time with marketplace On provide to services a of our help Collectively, different X% business. to and services time certain might activities, we than other their that larger ramping up

in to just activity next something see some world, again, give around we we that in up small of expect see reduction certain partners wanted next half with to year. their as of back so of a part ramping the a bit the we've half businesses little really to that, back the year of provided of those insight into decline of XXXX and starting facilitating a in And to

John Caplan

John. And Will. It's Scott -- hi, I'll add.

out margin growing accurately and for sustainable make absolute growing balanced dollars also what term strategic revenue sort XXXX, while investments we we're in the significant to approach doing our a how important which EBITDA and the for for we of see long-term is interest focused EBITDA handling the XXXX short taking revenue. you on are In the growth think years. I

short value both And revenue. to so we long-term approach the are taking and interest deliver balanced with a

Will Nance

maybe quarter. then just lapping eBay the in accelerated as up, that. of some they a and it last and of ton despite headwinds makes it. you volume, sounds like dynamics Got trends some e-commerce a sense. the And of that's mentioned quarter-over-quarter follow obviously Appreciate That the

could about accelerate maybe sustainability a at quarter. you next So you of what and mentioned space about e-commerce seeing know levels? just in feel I bit you you're volume talk the will growth broadly how the it current

John Caplan

here again. John Will,

volumes stable in e-commerce are year-over-year. So

You're right.

are beginning remain seasonality. has lifted. are the year-over-year, comps. saw volume We our growth travel, And which benefited We to year-over-year, volume about e-commerce lap due some markets, in which ways from to we quarter-over-quarter the we saw long-term optimistic difficult And customers. obviously, in growth largest for restrictions the lockdown our

is Europe So results the consistent less bit for think to of make than although Asia improving a stability we and up relates our as growth e-commerce the volume. did, volume it both

Will Nance

All I you all questions. right. appreciate taking my Understood.

John Caplan

Will. Thanks, bet. You

Operator

the from KBW. ahead. Please question Sanjay Sakhrani comes line The of next on go

open. is line Your

Sanjay Sakhrani

Thank Maybe just question. Will's last a up you. follow on

your backdrop quarter. low just obviously Some as I'm your to in about volumes seem of you year? you the larger how don't profile that. next trends of to e-commerce players maybe But e-commerce sort kind growth being revenue it's platform curious digits that your moderating on in single see move have next suggest of talked

Michael Levine

Michael. you? Hi, are Sanjay. It's How

Sanjay Sakhrani

Good.

Michael Levine

our I it's think revenue stream. diversity really in

times, So spoke drivers. we many many as about

we Then so get in are that the we've e-commerce, the to said, heavily in QX. seen continue stability. markets John And as season We'll invest going forward, of growing those fastest. more holiday benefit

you'll marketing and continue our that where fastest revenue of see that will and putting we're markets we So the we others to hope we investments, one were about sales investments the growth go-to-market stream the biggest number talked in a see times OpEx, ongoing emerging drive continued among things. of

Sanjay Sakhrani

go articulated Okay, because you had guys ahead. --

Michael Levine

continues high It's driver. going still of a our about we're rest was excited I do so. major the continue faster just to to very No, the growing will than services. be and Obviously, value that say to business

Sanjay Sakhrani

be Thanks. the it. or AP/AR, just going you just it just to to new that space? is in it Maybe talk BXB exactly forward, market selling who as to And is customers you're follow you there it it to could out go actually about competing with up in on going cross Got selling marketplace? guys

Scott Galit

It's talk Sanjay. Hi, Good with you. to Scott.

what's legacy for most we ways the So that part the and of part, BXB small competing business. exciting AP/AR, is medium-sized new against businesses, so are

giving asked that. customers So or accounts around replaces we're open really send have to like way or to go new would the -- their the had world they something used that them things potentially wires bank

really a their exporters. more like and much ways, more it's much business for local In more that's way world. bit Bill.com they're a business and business friendly, much it's small an around little digital, customer kind international efficient many managing medium-sized of more of version the of So wherever a much doing

So that's the think AP/AR way to about BXB the business.

Sanjay Sakhrani

Okay, great. Thank you.

Operator

question next Fitzgerald. from on Josh the line Cantor comes Siegler from The

Your line is open.

Josh Siegler

and taking questions. Yes. Hi. my thanks Congratulations on the results for

or two global Thank concerns, growth coming than a Given growth better say ago? uncertainty and the a weather recently, ongoing you. of year macro out especially China how's business the to slowdown positioned today

John Caplan

frankly a the our Europe, Caplan risk in here. X% to global other geopolitical recession, growth, inflation stronger are the U.S. war I'll we issues, and as XX% which customer them headwinds you both economic business from the those had in in are tailwinds at and operations. mentioned, in the immune unique headwinds nor results Hi, is through take think that and spending. and powers acquisition. macro growth There X% consumer and Ukraine actually We aren't actively business us quarter-over-quarter But what number and to one. John managing, slowing right? Josh. and The we that and are are of of tailwinds Payoneer even I

strong of have volume and retention revenue our We customers.

and on both as over million the in then million Middle investments our is Scott Michael an are feel rate positioned. increased we like our with good $XXX in who that million, go-to-market trust in are And X% North customers Southeast services, in in for are and just in their balances and balance using We've made two providing East, America, on prepared Africa, for $XX mentioned remarks, I mentioned well have $X of unique market are $XXX Asia. interest. which up take growth in quarter We we organization where our customers remarks, them. prepared or customer in needs have with and and more to products to -- of this on -- our retention. their And Payoneer value over increasingly strong customer we I that share. my India our to customer hold And focused up billion monetizing sheet, we funds were Latin in we on his relentlessly

the feel And to uncertainty we're that going like through And economic positioned well any like so and through positioned. face. we're team well we prepared and feel we here power well experienced is

Josh Siegler

Appreciate is was volumes travel color curious, for the travel you. some there Great. room more returned pre-pandemic that. Thank or recovery? I still levels on to volume have also

Scott Galit

Hi, to if you Josh. for we the the that had from volumes The has actually overall up was pre-pandemic. Yes. just pandemic, XXXX travel before it routes where isolate returned us. are not It's in Scott. But it

basket in far So kind routes Asia a of ties of which of in specific again, other Payoneer kind that that's more a into places and of the read kind towards markets to around skew more had, flung we've world. tends

before. we're we've not what basis comparison had increased share portfolios. some XXXX, we our where yet So of in back to for we travel, were again, a But on

Josh Siegler

again. And right, it. once All congratulations got Thanks, Scott.

Scott Galit

Thank Josh. you,

Operator

The next Please Cris Kennedy Blair. of from go ahead. William comes question

is line open. Your

Cris Kennedy

the detail and how Platform initiatives and term? key long taking more for the of division the you of the over hiring thanks kind the bit what a and will afternoon and Officer that Can the are impact provide Chief Good questions. his business platform little into

John Caplan

Nice question. to John Hi, hear Cris. your here.

Assaf who a and value had product we that he joined our led unit, and at the into made and our to products product teams where So that services one the by our services scale both high judgment SoFi ran combine and us to opportunity prior from Ronen team, technology Microsoft. significant we around Amazon

Our the phase focus the we the features and investing capabilities, be efficiency of on is which and the in innovation. and next the around the of that platform, of product how scale platform enhancing driving will operate

activity It's M&A through which than we products our to better record border of hallmarks relationships to we're very checks and our track increasingly alternatives. work other strong. channels, there. and our emerging existing our are developed which services the focused well additional and the to are of One products are at complement customer markets that SMBs cross And services are sell been look for and and and analog distribution and wires doing releasing a adding has

Cris Kennedy

because helpful. seeing the M&A, just are? you the kind talk opportunities Thank about the come you're questions. of mentioned And you. you What what taking for in very down? can that then, there Have valuations And Thanks market? out

John Caplan

Sure.

several evaluating are potential we opportunities. So M&A

customer high as capabilities can on are mentioned, services. we cross our upsell our engaged focused sell to that We adding and enhance base. I valued And

is base. product straightforward, Our very our relevant global to acquire we customer capabilities are that think approach

are focused call on We today not what acquisitions. would transformational I

We are to to primarily focused add the on portfolio. things

on $XXX to capital believe we growth revenue of optimize sheet M&A. our of We and our accelerate have balance corporate through cash strategic that over million use that can

As it relates seeing are to believe we valuations market, valuations, are disciplined I in private do that and company down we're very acquirers. coming the and

CEOs. company they believe passed so where unrealistic private on were we And acquisitions have we

Cris Kennedy

you. Thank

Operator

comes ahead. question Please go next from The from Tandon Mayank Needham.

is line open. Your

Mayank Tandon

model. Thank on Wanted you. about that expansion strong ask already think and here. the few leverage you but next maybe If we interest the to mentioned could in sort gave Congrats for Michael terms contribution next year Michael, it efficiencies out a Maybe John you you the margin first any the maybe it this to year? the expense might parse from on it bit of versus in things a be little of how a model, you should model us helpful income? Scott, higher quarter. just

Michael Levine

we haven't for specifics don't obviously, year. Yes, -- out given we so next

that is leverage interest in BXB factors, including different income, AP/AR certain growth and would things benefit margin available mitigate have geos the a year in of but a potentially that terms at to benefit. think in get overall, some the have have of February. yet. But lower forecast of we next about We'll to or of of we that in this we're will not point to XXXX for mix Some guidance give guidance position

Mayank Tandon

that. patient be to to get guess I have Sure. we'll

my do to your that take And the across I little for attach over volume terms usage In from going using to term, on longer where from terms it. of wanted products, I how higher follow ask talk a the growth up, great rates about granularity growth give the revenue of maybe AP/AR could today? rate? products better maybe Hopefully, But your about you they're think general of us both framework the number and that progress see there. to strategic what time clear. is question otherwise can repeat in just bit see in the on product, you more But to is maybe value accounts about good a

John Caplan

start Scott, then grab I'll could maybe you it. and

our and services utilize, what of they is more our think seeing that customers more the engage. they volumes on do I longer platform the we're the our

ours, And So to basic the recently I our they high base, offering very Card most to the it those we've BXB value of and Commercial services, a the early tools be way about they started more and BXB book, the days. think core our use stay. only up that's more that able ramping sell the the longer of the is organization. the -- It's product of to -- card of and customer AP/AR cross and focus to think

Scott Galit

maybe slightly just Sanjay's realize question thread earlier. And didn't pulling a I more I and answer Yes. fully

also customers So on are a had in have it. actually mentioned we of are selling cross lot third -- about we that But on success BXB a existing that early there had customers our AP/AR, we've customers. only of

of existing service value high an attracts well that something that's as for both service customers value as So a Payoneer. a extension example to that new high customers is

an see success. win-win mentioned still finding And opportunity again, grow where and market and of an Card Commercial actually customer in rate, and a higher we is to had continue relatively actually that ceiling see money generate we're lot XXX% we're it's quite our take actually opportunity. to where and We that area still ahead. being that keen example opportunity that a saves year-over-year. penetrate of we are a ways great Our solution it's we something with a high early another days over we to And seeing growth

Mayank Tandon

reflect margins What Michael, I then one quarter? then impact for the item. income just housekeeping Great. apologize, And fourth was that. the in I going think the I terms interest And in XQ guidance investments this. down in are dollars is or to fourth that to XQ, down that those going from going rates else incremental up the is there your market? or per are quarter downtick of quarter, the you in despite missed something the did give EBITDA driving

Michael Levine

terms in in non-compensation $XX are $XX talk in QX, million about the investing of press income. about investments. million it's -- $XX we so And meaningfully talked we release, -- we did interest discretionary of the so Yes, million

an EBITDA QX. that's on So having impact margin in

Mayank Tandon

congrats Understood. Well, again. Thanks.

Michael Levine

you. Thank

Operator

The Please next ahead. Mike question go Grondahl from comes Securities. from Northland

Your line open. is

Mike Grondahl

of any you think be Congratulations, guys. Yes. provide balances, making, the deposits Could if that about? intra-quarter XQ little you're customer about kind on and rate helpful? XQ to maybe of kind anything you can a that to talk bit color would And

Michael Levine

Yes.

second billion, then customer million were Mike, down we row for And pretty billion. sorry, we've $X over by amount, most just So in I'm what the stability about went It the again, funds. had? in question quarter-over-quarter. a was $X seen part, small we quarter were that above a second the you But $XXX good

Mike Grondahl

anything of call little hikes. there? that Well, you a from bit Fed you you're last think quarter earning, I said can And just rate lag out the there's

Michael Levine

Yes.

had that the percentage the Fed time rate. that our funds when off guidance some So banks difference increase basis, so announces and customer funds the I between keep And a we discount for as historically funds generally optimize Fed is hard remains think rates. usually timing a the shared rate are the than earning. the to their We're again, of Fed consistent. What often actually working And banks and very there's think, that. interest half our more of themselves, to

but are on funds the to optimize to on we focus And continue return funds. so trying those making sure safe, the

Mike Grondahl

Great.

you. Thank Okay.

Operator

We further have questions. no

John remarks. back I'll any closing So to for hand

John Caplan

for everybody and lots had opportunities capital the growth you growth and capture strong Thank of a potential of. we with us in built strong business full us Payoneer front of financials resilient has that a We've today. position. joining to tremendous intend a

and I We in their products incredible dedication boundless by every again we of will all of to serve more continue want We most in look our shareholders ways. soon. our thank can and you for increasingly platform forward employees your for close all to day invest And so our to customers. customers our support. helping passion for Payoneer to talking at thanking

Operator

all today's Thank concludes This for you joining. call.

your lines. disconnect now may You

Payoneer Global (PAYO) 10 Nov 222022 Q3 Earnings call transcript