PAYO - Earnings call transcript Q3 2024

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Operator

Good morning. Thank you for standing by. Welcome to Payoneer Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to Michelle Wang, Payoneer's, VP of Investor Relations. ahead. go Please

Michelle Wang

With Executive operator. Officer, today's are call Ordonez. Thank John me Caplan; Chief Officer, Financial and Payoneer's you, on Payoneer's B Chief

Before risks and that remind forward-looking like which uncertainties. we may statements to call contain you subject are begin, I'd today's to

available only Actual statements information, are speak results except forward-looking of materially any refer forward-looking may law. make the not SEC, please Relations today. company statements Investor more required as or assume our filings differ the For the today, and any section we by These them, with intent as to which in of payoneer.com. does update to from obligation

today's can which is considered Reconciliation today's financial addition, measures measures. release, may to be These earnings the press of measures. should in GAAP nearest found GAAP In to be website. in measure include and call available non-GAAP addition not our on instead

an press call All supplement we that, Additionally, presentation John alongside turn earnings I'd note a like on are made earnings our otherwise comparisons over basis, to year-over-year have noted. please to to call unless With investor.payoneer.com. on on posted the release begin. today's

John Caplan

you everyone, once delivered volume today. record-breaking us Good and again both for and quarter Payoneer in morning, a revenue. thank joining

a for businesses of small around We full-service and financial are the systematically medium-sized the building platform cross-border needs globe.

performance meaningful We are financial committed past curve the of second Payoneer a growth and In profitable evidenced entered progress. making our over significant X has as by XXXX, quarters.

sustainable are all capital is global who of and on execution of strong driving the our momentum a management team, Our accident. allocation and effective strategic It's no result growth. the team. profitable aligned disciplined

enterprise fifth performance across onboarding China. for LatAm quarter results. consecutive of XX%. exceptional fourth our with up including excluding margin, a our for strategy. XX% on excluding marketplaces, XX% strong the excluding We're by quarter profitable, and marking interest by first We sell income, interest Payoneer reached accelerating highlighting half operational underscoring SMBs volume $XX seventh that delivered services we to increased and accelerating revenue consecutive BXB, company. products interest by the strength low optimizing grew the like our quarter, versus and accelerated from in merchant a with pricing our beginning have the revenue discipline. we momentum XX%. XX%, payouts. high-growth in QX. QX, growth XXXX straight million year. Adjusted digits rose is to And of Total customers, cards growth XX% drove income, growth income, and larger single ICP Since the cross-selling growth. Total XX% revenue increased EBITDA APAC, of a ARPU, accelerated when In with business,

adjusted this turned first positive EBITDA of for net quarters year. also have the interest We of X income,

serve is driving QX, the grew business In BXB we Our as Payoneer by capture growth BXB volume the forward cross-border and multitrillion dollar engine market. XX%. BXB

XX% generated our nearly go-to-market we're business, affiliate as the BXB our to of and growth sizes. excluding acquiring in interest excluding amplified from clients over acquisition of the successful contributed came and our customers network. and and Within realigned QX volume have compared larger BXB income. X expanding XXXX income growth average we transaction represents our our partner high-potential revenue, focused of growth quarters We BXB larger SMBs on revenue, XXXX. strategy, BXB growth first X/X XX% to year-over-year in single-digit interest of for

receivable costs. simplifying company Payoneer, multiple and and few improving our at operating This look their processes currencies in functions. travel streamline treasury efficiency on are countries across how Asia, customers management a reducing relies a BXB Let's Payoneer examples is of accounts using to

local consolidating collections monthly business the virtual Philippines. local of in centralize without Payoneer millions They cross-border needs, are and need payouts financial the worldwide of in payments and dollars to with legacy but traditional than contractors underserved. Our with have of more and gap X millions account, the assistant traditional institutions. greater Payoneer that have These fill focus is U.S. banks clients serving efficiently bank into process this for outsourcer, accounts. just faster, SMBs stepping their in

We their businesses to manage to scale seamlessly payments global are worldwide. empowering multicurrency and

on by this customer transaction ICPs, revenue approximately and our start and and XX% the XX% within larger the and ICPs up of we XX,XXX-plus with more We're now our complex part cross-border those emerging our continues of portfolio needs of XX,XXX-plus underserved And in continue ICPs Our XX% on grown ICPs base represent over to to volume SMBs, XX% evolve our XXXX. at BXB comprising with both of overall sharpen critical of focused from focus markets. payments from year. volume, SMB trade, QX have ecosystem, and we customers a

supported and execution our by of dollar We culture of a with strong strategic to brand opportunity are and collaboration, positioned infrastructure, service. this regulatory alliances, all capture multitrillion banking is strength, which partnerships,

Our expansion platform success hinges of our compliance regulatory financial focus our stack, moat. of relentless modernization on execution, our and our on daily and

partner will need grow improve stickiness and acquisition, products or to ARPU retention. and build, the drive also with acquire to We work we and services

with As we so, they we our our review and long-term products goals. programs continuously to do will align ensure

in creating to Small shareholders. holds value even economy, ahead for believe most enabling We over allocate global way value expect drive us We jobs generate businesses our the road and effective the this innovation. the term the will greater long enable to capital creation.

to to empower SMBs, exports a markets, thrive suppliers global growing to these into engine. contribute and these cross-border engage helping are global expand, simplifying customers, reach reach in the emerging economy. growth businesses, enable For new them and management. new economy by tap Payoneer markets, new SMBs a especially financial We

just growth support is SMBs prosperity. trade growth, than for more a to and catalyst opportunity At foster of money. Payoneer, flows Payoneer economic worldwide. and proud It's collaboration,

is All of this possible.

our pursuit is over you. it that With to dedication to of behind I'll momentum force financial our to into the relentless opportunities our XXXX. and team's results ahead. energy, that, dive our execution increased guidance profitable the of our Bea are growth Thank disciplined They pass of driving deeper All for specific customers. because lie and

Bea Ordonez

for and John, joining you everyone to you, thank Thank us.

We strong third quarter revenue volume, record record continued quarterly momentum the our and and profitability. strong quarterly in generated

the winning We we revenue, of stack are financial results in of by demonstrate this drove multitrillion growth quarter looking share XX% are our grow for market. choice income grew and to SMBs volume XX%. and financial globally, which building third excluding interest dollar We

growth, was a top line income. exclude driven of XX% Record was discipline continued XX% growth also of marketplace and are positive product, income, interest and platform. and we an EBITDA adjusted when We funds million strong our held interest delivering growth, by to revenue in from a higher our our in of BXB of Revenue another adjusted on growth consecutive initiatives our customer you the pricing achieved delivered alongside continued ICP result quarterly a Notably, increase margin. accelerating benefit continues increase adoption largely EBITDA card even impact XX% of growth expense quarter up $XXX XX%

supported sell and on of strength that from the from sellers macro across continued our large growth reflected customers e-com on. sell growth consumer large growth XX% on the broad-based SMBs platform, our spending Volume stable Chinese XX% reflected trends conditions robust by marketplaces marketplaces volume

last Our BXB from growth XX% business growth delivered quarter. volume accelerating XX%

growth on results and growth continued our generated payouts. a highlighted, larger XXX% acquisition customers. volume volume Merchant result our in XX% We in benefited were As BXB BXB customer of strong John Services focus enterprise and from

XXX QX of primarily Our decreased due X take rate growth. to basis impact interest points basis of the income points, slowing

Customer our our basis in driven BXB business, customer increased of points by initiatives. accelerating pricing penetration take rate growth impact offering X SMB U.S. core of Our value points, ability hold proposition. of dollar capabilities our XX% card XXX is a such the basis by continued and increased value on funds balances to the $X.X billion. stable to Payoneer in currencies as held and Customers multicurrency the

to as interest increase interest $XX grow which continue We for even an year-over-year. our flat X% rates drove to steadily funds, in million relatively average were QX, customer income

We to cycle. Federal begins rate interest our its taking Reserve to active as are rate-cutting U.S. steps reduce the movements sensitivity

we volatility. approximately years our with approximately to in funds of and continued We bonds of to have execute exposure average duration an rate of of X/X weighted our have approximately programs U.S. to yield as deposits bank customer term on November average And interest and X.X%. X X, a treasury mitigate invested

We minimum rates interest to a X/X floor of a approximately interest of providing customer instruments covered on over years. X the short-term next stream These decrease interest X derivatives against the also funds, on provide our X%. revenue principal a purchased rate below X% the have in declines event in below even

to X, November floating rates subject and of X/X in U.S. predominantly prevailing short-term funds are the As customer the of interest remaining

M&A-related represented $XXX and the a increased Transaction primarily our higher chargebacks market million our of amortization and prior ongoing R&D, million The with operational this by and will XX%, revenue stream year higher increased by of banking in conditions. XX% and and expenses. operating volume expenses up increase XX% Total costs in to period. of XX.X% processor based from $XX actively in and Transaction higher driven which from was We XX driven growth. the and increase expect line programs increased quarter XX%, the manage of volume increase fees, transaction assessment losses. on primarily costs continue were costs depreciation to basis revenue fine-tune point prudently

headcount, million R&D reserves, over Approximately costs consulting and the our or XX%, and to last to million and operating growth. acquisition from increased increased related regulatory to expense G&A $X was $XX income is EBITDA well Net consulting as spend $X is EBITDA related to up adjusted from card as marketing XX%, and XX% August. increased costs a $X and of IT higher up labor-related or million results. headcount our Other primarily margin. in million reflecting to expense. million expense or million expense driven which up in was are $X year. by by labor of expenses, driven reflected increased of which XX%, labor expense QX primarily excluded due higher X/X million and higher $XX lower XX% X%, Skuad up or XX%. Adjusted $XX costs compared offset was Sales was partially adjusted of by programs higher incentive drive M&A-related

year-over-year earnings derived $XXX earned on the was increase per earnings The U.S. per QX to deduction million. related well largely was quarter from tax reflects the lower share compensation. $XX cash basic equivalents $X.XX expense and as law ended as a results cash foreign customers benefit share and million a diluted and from $X.XX. with tax foreign tax operating We stock-based of income

in Our acquisition use third million the a of cash quarter. of $XX approximately of Skuad represented

repurchased public as sequentially lower during shares we of also repurchased we the We redeemed repurchases warrants tender and million. to $XX which during had our for And share was quarter, approximately period. million [indiscernible] outstanding finally, warrant the pull

have repurchased million our worth price total weighted we of XXXX, For of average of excess in the of a of per to first at XXXX a in repurchases X share. months $X.XX our of doubling XXXX. when shares compared $XXX is This share target

a work provider, of customary and As we reminder, the continue to closing subject in towards a We closing our acquisition first licensed approval closing of half which the Chinese XXXX. conditions. anticipate is payment acquisition regulatory service to of the

our now Moving XXXX to guidance.

for revenue our raising our quarter reflect to the year. guidance final quarter continued are and We million strong adjusted and heading results $XX both into third the momentum EBITDA of by

year. million For revenue, of the $XXX to interest million interest the full excluding and expect $XXX income for $XXX between revenues be and includes of This million $XXX we million million. $XXX income year, to

Investor income raising more target mid-teens year midpoint. our approximately are $XX growth full at the than ahead expectations rate of is XX% million, the the excluding This interest Day. of triple set and We we XXXX of revenue, which for growth our by at implies

quarter excluding believe We continue look fourth interest exit as run and an is XXXX. revenues to grow to this rate expect mid-teens appropriate we to

our to growth target year. We remain mid-teens committed medium-term of delivering next on

$XX interest year our increasing for million. by quarter the expectations are expectations and rates on interest $XXX third to We This million our income reflects latest outperformance and growth. revenue balanced

approximately to look We'd currently lower our to rates funds. from interest our duration with over the expects in come in expect year-over-year. balanced The program to income decline of market of average XXXX, to with impact we our customer we'd X.X% X% expect offset XXXX. to growth to extend partially and rates As XXXX down the

and expectation year We costs of to due related also as quarter, approximately stepping the a first for take products. our XX.X% year quarters from to lines fourth XX.X%. percentage of services more the broadly and transaction mix the including business continued revenue as be both the rate of our of for as implies expect This prior to higher well towards the X business up a XX% seasonality versus shift transaction rate merchant cost higher but

interest our XXXX. we'd dynamics percentage a for expectations quarter lower XXXX, these exit revenue an of costs run expect as be Given as appropriate fourth to rate transaction into business as income heading well

guidance the full of to an our our adjusted This EBITDA to million. We EBITDA represents at XX% $XXX are approximately increasing midpoint adjusted for of by margin million year, million targets. $XX medium-term also ahead the $XXX

cash unchanged revenue million. guidance anticipated OpEx adjusted Our for less for transaction Cash EBITDA. plus remains OpEx guidance at our $XXX approximately cost represents

stack Our value remain third investing innovation demonstrates efficiency. our strategy, committed retaining growing adoption quarter line financial both our shareholders drive improved customers, in solutions to of performance for top our and to execution ICPs, on which and delivering our strong boosting We and financial centers and long-term growth of and operational employees. driving

the you any answer to may We have. line. are Operator, please open happy now questions

Operator

Instructions] [Operator

today KBW. question go ahead. comes line please from the Sakhrani of Sanjay, Sanjay with first Our

Sanjay Sakhrani

show SMB comps to as the helping you surprised this margins, the year. are know upside through trends So strong BXB progress at continue but I the pretty the the trends year? we what to most

John Caplan

particularly BXB growth was really the really or XX% quarter we the initiatives at in for and company services the year-over-year our across the in $XXX,XXX a region of by QX Europe, than XXXX for the have really X% solid look quarters, a exceeded last targeted particularly larger fit target QX and really a solid we've BXB. QX the greater growth businesses, LatAm, company I a across acquisition, XXXX If question. globally look acceleration experience of ICPs, the our taken, volume expansion negative Thanks average XX% new third EMEA into customer quarter. grounded And performance across in think APAC, we're and strategic we month the companies at market Every Board. XX% was team improvements volume. those verticals was and tremendous performance the strong and on And the of When quarter. X seeing had in is has even the I penetration, in in company XXXX product in both the growth are China quarter. we goods a seeing And Board.

to We guided We at XX% had the it, We the beginning continue and confidence we to -- that at call is time that our guidance business statement. and year delivered XX% to that for of solid capture have globally. brave made growth faster let's was, long-term the the growth. opportunity grow and upped which BXB than we massive a business the will are BXB really overall business we to position that in the

So are growth team business. we of the believe execution we're beginning where of the we proud feel curve the of the confident at BXB our of in and

Sanjay Sakhrani

me, great model been maybe a of guess And has It execution. sort have X I follow-up questions. for I

Maybe You're but know more talk then about I seasonality in what's in XQ. step there's forecasting just XQ a And little driving float. higher transaction could you ex you costs a deceleration that. will that assumptions? some in underlying Could up. about the there, this revenues profit seems outlook than bit implies those gross be talk just

Bea Ordonez

guidance No, growth out thanks you're question, which QX midpoint, for roughly year-over-year at revenue revenue implies in 'XX, mid-teens. year-to-date does XX% Sanjay. as deceleration the core step calling to imply on for a a core look, down Yes, from XX% growth again normalized our the

of we're as targets. to last think medium-term from is of the an in medium-term of we continue geopolitical very that But rate to throughout out year we at the those looking in call think, that some could that we the in exit as here course, this going back quarter said appropriate we've that well drive to run XXXX. as with of sit the aligned We we in on exit September that much again, broader appropriate as the rate call were and spending everything with we macro consistent as set including, it's XXXX, we year. Investor super with into and that's targets election look, prudence the head continued uncertainty, Now in Day consumer softening tensions, the line U.S. said terms hit

really BXB, head your do question tougher as called QX. have And on as out we around into comps you we

certainly an actually strong in to overall, year-to-date. look, pretty in But that how holiday to quarter the perspective. XXXX, we a we're have QX. is stable There has robust mid-teens sort outperformed that's e-comm recall the is room outperform of performance macro out. You'll if remains playing line, excited today. has and from we're it And So saw as October a really robust really season in Mid-teens seeing right? remained strong,

costs. seasonal out lower the acceleration, or step-up QX mix on the larger again, in take transaction shift Certainly, generally just merchant calling business, we've that been effect e-com a speaking, up look, business China MRS we To your rate in question services. sellers, see from step proactively to

proactively So pick We're as out also see but we costs. called that's remarks out rates just XXXX. prepared beginning that And come is shift step beginning a that down we from calling mix transaction we've impact into interest going to interest been the our going to income down. think heading -- the of good to up rate in run again, those

Operator

with comes Sachs. Nance Next question from Will Goldman

William Nance

ask on marketplace I wanted payouts to business. the

relationships where digits. TAM share double of the quite performed seem to you and business more some wanted has to you overall how had quarter. a kind I low business there against of clearly nicely growing kind very was gains a that this numbers suggest And understand the in These high is market journey. would customer e-commerce time guys just period I teens exited of probably going frame slower. know the that's So

that the you long the of just can couple leader kind Is just that kind sustainability you of of acknowledging kind about market there do of sort think you element period are you So from prior of just how share how think the years? the gains And up? market TAM, are an growing catch-up there? do putting of above you kind guys of the sustain given of market

John Caplan

Yes. question. Thanks, Will, for the

by On world done States the the our United of in customers multiple that team as and broad-based share cross-selling products Board. XX% as well have our from around strength Etsy, for volume the job, the really China an in colleagues working in PSP others customers marketplace and the cards taking in has and growth Chinese globally businesses, Amazon, to the exceptional our the here both e-commerce providing led our Walmart, competitors relationships, with in business eBay across QX

winning the in are China, well We as as in the both share increasing wallet have. share sellers that customers of acquisition e-com we new with

that's grow We continue important BXB think as addressable the bigger continues will expand I And even business into grow our is of broader, part marketplace at our Payoneer to to business a marketplace opportunities. ecosystem. very that flywheel our

e-commerce We growth distribution sellers trade. have green we where you access know, on and they so a program, to them their help call get participate the help That's multiple can we in the partnership between to customers it marketplaces. as channel, Payoneer cross-border drive and our

as relationships. marketplace adding new We you are, focused on note,

we're a are strong we to -- add. in position We continue believe and do to so we'll

the on is in Payoneer marketplace strong spend And outperform in way, Bea consumers the as money behaved. engaged and think the fourth I how nicely will quarter has spoke line. consumer about the a

William Nance

before, the goods U.S. I the appreciate before. We've this spoken of sitting think just just today questions some great. do another kind watching you've on about with That's about potential lived tariffs? Chinese gotten topical know just through broader audience, exposure you're And I a how know to election. obviously, maybe mechanism that. maybe as of here just then I And question, the but sellers. transition we've you

understand doesn't what through if that of maybe kind what the talk and people does was how or So impact the experience business. you could

John Caplan

I listening voted the question. Yes, XX thanks do hope like and million Americans anybody I the election you in for other And and too.

come the $XX Main Our and the world support Specific A in I economy the for for Street that good tariffs hope global is consumers pass. at And strong the U.S. An they next good a past, iPhone to on that policies jobs. should can for and case that my retails is economy store whoever is in to economy, guessing manufactured for is, SMBs. resilient. place exceptionally certainly put $X.XX. experience in at with America administration

tariffs good chain exports tariff even place. a worked generally growth exceptional past, we through put absorbed group in that despite business is or my supply in pretty I a saw So effectively. on the our Alibaba in maybe alibaba.com, the at experience, in at were of $X.XX in Alibaba And when because

and on share business right? comfortable are focused And SMBs. to XXX position territory, market, just to our us market countries ability are very about We business, any and in customers the and growth the in India of country in we are you We're in Brazil the value Argentina Morocco with our our services Turkey of or and could businesses BXB we with know. and So business, as providing take do every and our confident driving name. that diverse our

is exceptionally We're So global. Payoneer resilient. and diverse

yoga for economy the Our SMBs fine precious in that and the positioned. priorities, metals, not part doing very just resilient, to in of it's We're the are that's verticals customers customers things. pants our feel iPhone mentioned, important are are national goods cases business. doubt, think this, I know in and people related serve we we And and semiconductors, steel around of and other and but fun absence -- well security I we the

get the developers are it's in businesses turn to services, economy. the out driving that in and the Payoneer the and in Those the people we're I services BPOs are as And said, trusted financial It's partner, I hope positioned. Latin globalization Philippines in America. both. And software really their well as folks really global and global who

Operator

comes Mayank next question with Needham. Tandon from Our

Mayank Tandon

general, just and what is headcount speak as go Bea your if bigger of you Congrats sales to wanted the today to marketing, in your terms after to sort could to larger of Bea of And your target in ICP? investments in you marketing initiative you quarter. John sales sales. that and engine? turn on ramp the I where as and at John is up And approach in the terms

John Caplan

Thanks, Mike.

been and One go-to-market is things execution countries. prioritized and of that's our in the exceptional we tiered

a plus, team they ICPs. First the that prioritize and We And retention it adding did $XX,XXX as specific receivable. to specific was prioritize out this ago, and of compensate our of are we high-value incentivize is set set around and thing, go-to-market year sales verticals we out and our countries. organization to we $XXX,XXX $XX,XXX as a then earlier, year plus acquisition And we was that plus. mentioned customers month accounts are I

I organization, think actually out point middle of headcount, strength our team, that opportunity friction of the our have as stable we're layer. we in the our to across speaks reducing to And of organization. relatively brand go-to-market sales I'll the management areas our and and marketing We're think the adding about count power built. has your We're headcount system taking been what high of year-over-year. head

demonstrates organization. So to think cross-sell effort who to CSM us cross-sell of And strength cross-sell customer the is the I the our in and responsible acquisition opportunity. as there's it our And our more will Skuad acquisition. in are relates cards drive management -- hear talk XXXX, people workforce about KPIs with and directly product shareholders

as their our opportunity AR solution an We excited it are solution direct-to-consumer relates to around for but helping to employees manage their management needs business and on spend or the not buying not of management payroll marketplace ads globe. or elsewhere BXB sales, part offer the or high-value their actually payments to an robust just about just AP very for which contractors the them internetwork is other Facebook and of workforce customers, Payoneer a

the contractors, will the turning XXXX and and entities around They Payoneer Our and needs solution one-stop superpower in is employees increasingly world. the go-to-market distribution they're the firm. box, engine, our a customers around have of world our multi in and have the as to beyond those are engine, the for globalization

We a expanding, regulatory offering, the to growing a brand, around growth need. a powerful enables framework great SMB people, get an have unique the they world that

Mayank Tandon

model, back where you were if XXXX, plenty to continued initial we driven that BXB? in can relative us marketplaces And think to think turn do to framework could way the outperform just levers gave that your year guidance? the helpful your think our performance to the if year, this be XXXX. going about comes very outperformance on you of That's outperform momentum about you expectations given for Just the it But by color. XXXX? did as I from? just what Do think this are to Is then you

Bea Ordonez

and growth, on Yes. his strategy. Look, called performance. XX% acquisition. question, answer, comps, said we obviously, retention think mid-teens the go continued it's I really performance and Look, We're XXXX is that's as And improving for we that customers, said against. BXB in we've as a What stable 'XX to drive in again, and to at that in we think we into through Day, say what it mid-teens business delivering most a growth target push with focused e-com plus can us read-throughs drive for those we're Investor out in would robust the that's, our or driving the think on Look, tougher that ahead that good on volume certainly we that's is XXXX, of room also think Look, targets rate. XX% they're so line medium-term in we We're and can of in as with great performing. rate outperform. right, strong marketplace, outsized foremost, volume question, macro. we strong we right? and XXXX, ahead as of think sort consistently larger we we're of out, we've run acquisition where strong of strong that. -- we John execute exit retention, seeing we've line seen with think of continue that appropriate there's a -- markets to can seeing e-com outperforming outperformance? to it We've today. then So an and these that you that's But we first terms If that performance can sort called the as of executing we in help outperform, through through seen October room underlying to continue said certainly some BXB. the but that we seeing We're at to that marketplaces, are of really where sort is outperform looking and said a

there So great and strong a multiple be, place levers, to fundamentals look, XXXX. think which in forward looking is we're business, I the to are

Operator

comes Peller question Wolfe Research. with Next from Darrin

Darrin Peller

on pricing road job we start off quarter. and just with opportunities. the Nice Maybe map the the

think the a which you been when the I point, on opportunity though, follow-up us And do we good they guys really mean year-over-year. they of were revenue can a to were I you've I start as down, different the of think, in of expect terms that are pricing bps on guess mean, you path business, I to where float Just remind around. if X equation, you about -- still monetize out benefit take know applications parts see to the I

it forward? So has of impact of playing just you the more see numbers on curious out kind going an where where it material

Bea Ordonez

Yes. XXXX. question. on strategy that to we continue throughout we Look, execute Thanks, for pricing the Darrin. the Thanks outlined

sort very revenue the particular corridors. about successfully. in we corridors non of monetization we to products in about look we much how of and think terms past, at We've monetize improving in terms on pricing. terms out that ICPs. XXXX of we how it FX And of segments our nuanced monetization the done of be done more also in customers, how And relative in called to As was really aspects

pricing we of out We've in roughly continuing which our our from XXXX we've uplift XXXX. generate $XX launched we're is expect of XXXX. as late called account those in We continued distribution to incremental. light execute. throughout that And $XX roll initiatives, million partners through million to to out, So

to highlighted that dynamics, We've can of terms the In on penetration and of we'll that. drive unlock look, as continue that 'XX beyond. take of execute rate into share sort gains, head longer-term wallet we improve

In levers rate. look, of improvement it's that rate, terms take in driving think that of is the the many one take I

take as rate take products. interest, is impact X factor year-over-year rate businesses as That's up those to higher it's than up and shift take SMB Our pricing, that. that of a higher rate points more well the mix ex basis

to economics stable important quiver, capture to continue and penetration see speak, market to drive overall, trends. as even in So arrow of so pricing to to the our rate we the improving and improve improved sort of and in an the really drive take business

Darrin Peller

It for more just larger the focusing overall looks growth was side on about And a helpful. on That's the ICPs. second like Okay. guys, X%.

I of sense really long-term see well. you large for think But whether quarter. mid-single give last where bit for whether penetrate digit, level, the it's any just the hard all What's way ICPs. to Overall, on KPI maybe to the more that to you it's customer it it's was us X% as a these the the little large can you're TAM tell see on obviously, grow growth front? continuing color up ICPs, to underlying opportunity you

John Caplan

great it's question, Darrin. Yes, a

When people understand with comfortable very to a our are create a help framework, and for business. ICP We we ICP XX,XXX-plus growth. introduced our was to it understand blunt people instrument the rubric force

the XXXXand XX% fitting customers, definition, XXXX-plus the we below customers million volume. -- shared million X.X recall, call X.X introduced XXXX to the you'll XXX today, of the plus We've the represents on definition. As

for our board, strategy, provide strategy, can our helped opportunity about ICP focus driving the for has the is, we value ICPs. crystallize product clearly just are acquisition work on on we those the XXXX-plus partners across across retention the our definition them. think our who high-value shareholders, And customer employees We our really

ICPs XX% the year XX% XXXX-plus ICPs As ago a accelerated revenue for of revenue from has XX% XXXXs from segment. to to X% growth you volume growth a year our XXXX-plus we've X% to QX. in X%, but growth ago Volume for and in QX, mentioned, to slowed the accelerated growth

is So need look of our many, in pay the are a the many, that There businesses many I tremendous. around globe the solution. opportunity ahead, when size

deliberate a Payoneer networks we've you focused of in are industry past, there And as and We talked that and way will the see millions of that, are need that SMBs tens geographies, solution. penetrating in about ICPs. of

we are unlocking volume we absolute have from of ahead dynamics us. We up and revenue the on less the making have, morning them to sure service driving focused then the and growth customer providing the customers waking this count,

So a forward. confident strong those and monetizing a what customers. a have product you focused will rate team the we and it way on I be I grow think in won't I will looking give in number set of terms a am growth

So you growth the in see will years ahead.

Operator

Northland comes question from Mike with Securities. Next Grondahl

Mike Grondahl

a there ICP left process? then described a bit unique your little your priorities is hands? in multiple there products initiatives, into about Is On process for you and And you of a Or some it cross-sell little or lot think that? your larger the kind the a left how secondly, pricing you're the ICP is talk focused a there? I there go-to-market getting on same area. Could of in

Bea Ordonez

Look, for Look, pricing. question. thanks framing. the I'll a or love there a take Is little. I I'll take lot and the the

we've in 'XX I to out think of in long-term driver it in of explicit view, terms we've performance, 'XX. we'll what generated we be So and future a called in numbers that very continues right? our generated what say

on products the broader the is more the improved account. said, do segmentation approach, to that With product there's We've launched more the sure, lever that around designed right? of wallet and that look, on engagement adoption using sort think I driving to light that. one a and for is of bundling, point focus opportunity all and pricing customer-based as share of

generate we're monetize we're account, forms monetization of think, early can said, launching frankly, But predominantly market, We and that's we've at viewing I driver meaningful capture gig SMBs it's that upgrade is and Pro year fees. a of smaller think we workers, it. introduce fees. larger we freelancers think how uplift, that that, As improved called We And and we the next again, long-term of of and usage right? overall, may and improved which what covers some entrepreneurs. sort probably will targeted the

John Caplan

add I'll this And just to answer.

in cross-sell, separate the where really about the we high-value have is whose to the our product. motions of think underway. card, and cards the we match we north performance As And the And set to quarter-over-quarter. high-touch it's X of you're pull needs XX% motion, XX% of ICPs. there's XX% -- One was in call product our is what was between card CSMs responsibility globally our QX seeing that growth right? Our and through X quarters for growth prior,

occur products. We will management with our cross-sell the workforce see high-touch -- you'll

employees portfolio. the end introduced is work. account, itself, their of bundles, limits As manage bundles But when contractors, those right as each customers that platinum which they see into of as product customers lower from which of is and so distribution Payoneer account log in around or the -- the the our access in customer our at account Bea, join the the scale, ability of highlights features. we to they it's the it we or The or others help light that products sort of front our product will Pro their and features to for account enable

to we through cross-sell we feel ability place. drive the our have ARPU So good in about motions

Operator

comes The question Trevor Jefferies. with from next Williams

Trevor Williams

the Great. I ARPU wanted to go back growth. to

so think or think up the was heard I I say. quarter, you I it in John,

on be know If you specifically there's view could us of cross-sell, pricing, the and any how a that a level pricing but of few sustainability there's that that much can flows network on been questions give of on rollout coming is growth update great? And the give sense just I mix, ARPU would for if from intra you your growth? already,

John Caplan

AP number of we than growth very our the high-value One ARPU the that we activities when lot into customers the a route-specific we that largest appropriately need, cross-sell, of customers, more not paid And to tuck-in to customers, performance just of So for our Board, seen can frankly, volume march them. a we'll driven across management $XX,XXX we card seeing workforce that drives those by strong a organization, have result, pricing self-funding service our bring expand acquire -- at for initiatives bespoke, accounts product high-value ARPU they through both value pricing, but the so across -- fee on our month. pulling up organization in for offer cohort. them acquisitions folks. be their making that's value And acquiring think kind underway. for ARPU volume, to design other the when about a cross-sell -- those we are was $XXX,XXX really is more look greater add that self-loading we've by customers. customers, the suite customers And products, cross-sell provide provide they can larger use and

Bea Ordonez

of the of on run doing through question, meaningful continued on It's And ecosystem just cases sort SMBs. multiple interim from we've the And testing the larger year. back are been look, intra-network to in a network our functions of really to flows the highlighted treasury half those there's type to to true internal pilot the of pilot. payroll intra network.Yes, we're we've and through A/B quasi calls, for look, prior Again, corridors. sort significant across use AP that tied

look it the billion we've that. of are the feel billion look, of behavior. super super a how it So customer was flows carefully measure to behave, end impact internetwork important really we very that and proof real felt point look it's and trailing day, highlighted, we as XX-month we've to At X-sided network, a powerful important $XX of the a pricing, around the flows in $XX real at built sense, at

monetization a of be to continue part that a can as that. strategy we flows that driver So powerful internet broader believe work to

Trevor Williams

in float heard year-over-year on float I Okay. 'XX, in margins down you 'XX. Got and on I say you. And income, then the think

that Just margins based how year. of as sit terms on mid-XXs specific the order more you of mean, feel anything mind, curve, visibility if today? in you do EBITDA the I here about the And in with of there's magnitude next then

I on where expansion that any margin positive incremental exflow expect already the you think contribution from had would the comment -- be come of but on I heard just to EBITDA EXFO detail more would you from great. revenue, kind

Bea Ordonez

X.X%. right roughly think to a surprise an a that probably said, we rate reasonable as Again, like been expectations income, I they've that's float X.X%, down. curve down don't stepping on number they to to that would least any stepped the model. Look, noted choppy, of on anyone. bit now We've be Yes. based average look but at

on able We've detailed of to that to growth. course, that on floors done offset provided roughly that extended portfolio. decline balances place roughly of X.X%. yield current a XX% the X/X weighted on We've years duration. in portfolio. the put grow balanced rate quarter, duration in We rate third extend interest call, We've with the to including a on expect program on portion of and the we of a commentary around pretty our with uptick platform average We've X/X consistently, been our X roughly of

reduce meaningful optimize taken that rate we've really and to steps we'll interest continue to our movements, sensitivity So to program.

So and rates duration look so down from partially on initiatives a offset extend on. based will those those get to step from

medium-term EBITDA Investor As we in at going we we margin XX%. hitting growth. Day adjusted target. talked to core feel our drive at margin to look about ones good We're very revenue about look, XXXX, The

appropriate we'll run we said, with QX we line rate disciplined think operators. exit continue rate. to And be our is in an As

demonstrated think ability we've I the to do that.

huge a it's overall, opportunity. So

we're medium-term said, hit we've business. and the we in we're capture As investing targets, we momentum can by the to our TAM excited the think

Operator

from Kennedy comes William today Chris question final Our Blair. with

Cristopher Kennedy

we as and John, or color you're talked you XXXX? on wanted I Skuad, about bit more there get how the mentioned little thinking just to opportunity is about a what that enter

John Caplan

super exciting, Yes, it's really Cris.

are And and is it. opportunity go-to-market an the I'm sales our learning introduce the be organization. response cross-border And as with existing and are made. actually days track that it beginning more the about product cross-sell acquisition very progress closed first team is of takes excited to opportunity cycle completed. on our phase seeing the not team Bea first feel And the XX it the on time just to relates areas early the The from infrastructure but integration. integration, deal against the good as the of full get we financial for and focusing executing the needs existing to closed and team, customers are in about team We tremendous. And our the as solution very with our we we've product Payoneer's capturing Payoneer said, opportunity the were activity one we We historically, SMBs. effectively branded becoming to we Skuad a customers. provider about are quickly both August. the and more We're it with with customers,

Cristopher Kennedy

more to then update M&A it. continue a And the just add you to environment your on quick products Got as Yes. platform.

John Caplan

Yes, it's important question. an

our our about excited cross-sell our to are for to utility drive and for tuck-in shareholders. extend We product customers acquisitions the ARPU capability

ARPU, markets, work the in of important grow discussing the culturally doing, and our cetera, will our licensing, We've our is underway. product, map targets, so footprint road do is is part is deep extend that XXXX et we the I key that identifying high the which growth in and And drive and fit philosophy, team ahead beyond. is via think M&A, shared and

Operator

you. Thank

We have no further questions.

call the to back I'll closing so hand And John for remarks.

John Caplan

I joining want to us thank for everybody today.

I XX the exciting think the record your on in over to share had countries. call, it's turnout paying a here incredible and we employees progress of

a are of X the we everybody. SMBs to on of are global results We the moving for momentum. provide XXXX first global great diverse been continuing Thanks, focused value competing trade that and our organization at It's pace to quarters the landscape. are on global

Operator

joining lines. This call, today. for may everyone, your you you, disconnect concludes Thank now us our and

Payoneer Global (PAYO) 5 Nov 242024 Q3 Earnings call transcript