PAYO - Earnings call transcript Q4 2024

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Operator

Good morning. Thank you for standing by. Welcome to Payoneer's Fourth 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 Caius Slater, Payoneer's Director of Investor Relations.

Caius Slater

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

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

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

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

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

John Caplan

record-breaking morning, in We focus Good thank joining a for today. hit had are precision. and and a profitability and QX new you Payoneer highs because and volume, standout with revenue us we everyone, XXXX. executing

build strategy working. is to a Our global financial SMBs stack for

of Payoneer's XX% customers to underserved our We're and laid breakthrough XXXX. for a they and rising global accelerated accelerated financial plan, exactly to customer we strong regulatory largest provider $XX,XXX-plus cross-border regions. delivering interest usage adoption for year-over-year, themselves. Revenue helping XX% marking growth simple operating usage the across portal broad Key year-over-year. banks Card over our of disciplined more performance. stack of all their integrations grew our XX% XX% access increase ICPS customers target year-over-year the Channel costs. or ahead excluding growth were reached and far grew year-over-year, consecutive strategy, the global businesses year AP XXXX there significantly about China, The September income, share the brand profitable in our Payoneer. positioning strengths, our Leveraging of acquisition interest XX% BXB a XXXX, trusted broad-based of shareholder doing us to was ecosystem, across to results, value. At in products X payments Our the initial quarters speak become infrastructure, with world's team, borders, grew mission profitability. Investor grew XXXX. volumes and from Skuad, demand. We connect SMBs. XX% XXXX account, excluding and ERP a a global QX prioritized capture product that. our and financial both clear: income, volume SMBs acceleration. Customer of X increase AP Green is with sharpened while our We growth XX% and our We to sustainable, and Day services of ICP in and global key ARPU, included in out management. XX% launches total expanded X% we Lite don't. our of products in our to leading workforce a QX XXXX, outpacing economy underserve XXXX growth, diverse base. Traditional in

X delivered income. profitably. largely scaling efficiently excluding adjusted has headcount been We're Payoneer flat X EBITDA, consecutive positive quarters example, interest of for For years. We and

increasingly results strength our we've strong, XXXX and is execution execution. our targets. Day of the scalable, model and profitable demonstrate Our Investor our September exceeded These

prime we landscape position in are technology it. the are is shifting, on the creation We capitalize early trade, in of stages journey. The to multiyear financial value and a and

and enhancing acquisition optimizing intend further pricing. refining improving retention Here's our and growth deliver increasing sustained We strategy, focused. profitability, to ICP where cross-sell, we're efficiency,

to will expansion. platform our and implement We continue modernization

We provide We weeks UX required to of in a our our financial infrastructure, and will advancing this that all regulatory towards customers our stack to and we few an first buy regulatory the provider our simplifying acquisition partner close with half in are have acquisition our China. the products, of need. We ecosystem with approvals shared secured build, proceed plan service and closing the ago licensed a year. to working of payment

continue review capital We optimize to allocation. will and

growth We shareholders to value. drive returns with to are investments balancing long-term

April, consistent results this the creating are strategy, Payoneer shareholders. With As we The cross-border financial look that, strong over payments multitrillion-dollar in unlocking payments the team, With is walk to XXth through to our to brand details you and our strong, I'll opportunity. ahead it turn SMB we and committed trusted. our clear anniversary guidance. are taking XXXX and to share profitability, cross-border and BXB our improving we value for recognized Bea

Bea Ordonez

excluding and to XX% a growth Thank growth million interest generated $XXX XX% had of Payoneer We us. EBITDA, record-breaking volume you, to SMBs an we representing for a the customers, joining of a value opportunities John, increasingly global revenue, of digital and XX%, thank EBITDA economy. the you income adjusted year. offer everyone our the proposition delivered and margin in XXXX. looking These entrepreneurs adjusted are unique of to results for access testament to

our We by was sell more product that our SMBs continued than $XXX of was strength XXX% results. marketplace of card at our quarter Services driven as outperformance in impact ecosystem. fourth to grow XX% up to and continued delivered by of checkout Volume on by our volume Now volumes offering year-over-year. quarter of as XX%. BXB our robust growth record SMB well performance our year-over-year. pricing BXB XX%. up across Merchant increased from sell We the SMBs capabilities million, grew volumes in business, Growth revenue XX% strategy. Volume turning reflected and marketplaces grew franchise, XX%. another broad-based from that adoption

interest QX income. customer SMB the basis drive were lower X in by On points delivering rate, basis take and basis value we our decreased X to to a expansion primarily year-over-year reflecting customers. of rate XXX sequentially, incremental points basis, a we are take our Our driven on basis points able year-over-year

and products, stable points sequentially continued high-value $X especially continued capabilities core ability seasonal well balances e-comm card of in ongoing was year-over-year the of adoption the product Our impact our initiatives, shift our X our as our Payoneer value as multicurrency acquisition. Customer customer growth of by Customers a impact management proposition. is up X% by the franchise, larger to flat SMB held value hold driven a and funds pricing various to in currencies our towards sellers, BXB take basis workforce despite rate year-over-year our increased mix billion.

generated grow QX, in income average even of $XX declined and year-over-year. interest interest steadily We continue to million as customer rates funds

on interest of described XXXX, we our fluctuations. our implemented reduce to As short-term a third number to sensitivity rate quarter in call, actions

As approximately billion and weighted term-based assets this deposits. on of portfolio yield X securities weighted $X.X The funds had we December customer in invested approximately of treasury approximately a U.S. years. X.X% of underlying average a duration with is of XXst, portfolio average

U.S. purchased to are the X%. customer derivatives $X.X interest billion providing assets funds customer rates, have highly rate Approximately predominantly short-term rate of declines thus approximately balances, balances subject our underlying of to liquid the short and underlying term, below XX% a rates We on in interest interest floating floor against

as management labor-related represents higher acquisition impact expenses, period. drive investments our of donation EBITDA $XX basis or product. certain higher revenue, and consulting approximately the performance. incentives, Payoneer as even line our represented our incentive from fees. R&D volume services EBITDA, Other business card hedging million as accruals management million especially and compared of million infrastructure initiatives X%, fees XX%, $XX in strong driven or the G&A increased was our the to an actively This the consulting third workforce adjusted into full million certain of we higher quarter excluding prior the our line workforce and We costs, the impact expense as other seasonal of Foundation. Adjusted China increased higher items, or will card commissions. labor-related increased and programs XX%, a expense million of communication up including higher Total which acquisition, year headcount, up XX%, to reflecting platform higher million Foundation, and of XX% consultancy on approximately of again, costs expenses higher in driven expense or card higher XXXX XX%, period. Sales the with due product. costs well to and of accruals well from increased included onetime Payoneer programs. Total million items. Transaction marketing saw our employee spend by XXXX million year-over-year, by by of to bonus and operating seasonal costs lines, transaction including primarily of our to million from transaction primarily designed operating higher XX donation XX% onetime adjusted including and fees products bonus continue mix increase partner merchant quarter accruals interest with $X margin as among cashback and $XX broadly performance, growth benefit $X our XX%, is year manage including in consecutive in costs, IT and $XX Transaction labor-related increased adoption nonrecurring operating to BXB $X cost our EBITDA higher and XX% expenses in bonus with $XXX benefits expenses the shift and and positive to adjustments in income. was line points year-over-year, were and prior year in $X increased the from driven costs XX.X%

million last in year. and interest $X.XX. year, income share million with quarter income basic compared the quarter loss, $XX of positive million million. We diluted adjusted $XX fourth was XXXX. Net in to per interest cash of ended $XX full was the we equivalents versus earnings the excluding of adjusted EBITDA of $XXX cash and million excluding an QX For $XX achieved EBITDA, income

for quarter, XXXX repurchases price weighted our approximately XXXX. in During we $XXX exceeded XXXX, million $XX million And a a approximately at shares our shares. worth $X.XX of of repurchased total we versus doubling of the and average worth of target purchased of share

quarter on million all XXXX, million. public call, outstanding during $XX also redeemed discussed repurchased our warrants XX we As third and for

Turning XXXX now to our guidance.

excluding Investor million to year shared medium-term our be interest midpoint interest late with revenue, between $X,XXX For expect we million This interest income, guidance $XXX million excluding million. million income. of of XXXX. we XXXX, growth revenue, $XXX our revenues implies $XXX The targets in in and in at $X,XXX includes Day of income and to line XX% full

offering and higher-yielding in We high-yield card expand the growth expect rate in and our like ARPU offering faster volume, with from strategy. line stated from of to business our at revenue, our continued excluding products our grow as than of as interest ongoing pricing a rollout income BXB strategy faster to penetration well

interest weighted to of expect year market based investment rate expectations, program. and growth interest impact our generate our We on $XXX balance million probability for income of the for the expectations

a of BXB, checkout card rates XX.X% We from of from with expect in costs approximately higher declining XX%, line in up revenue cost as to the be transaction our interest growth in impact ongoing percentage XXXX and offerings. and

expect adjusted EBITDA. XXXX approximately million, represents We represents costs Adjusted XXXX. which for over OpEx $XXX of transaction less OpEx less our growth guidance adjusted X% revenue

increasing EBITDA we be income, $XXX medium-term set our showing When an profitability with and over EBITDA midpoint, adjusted again, targets adjusted expect business. $XX at XXXX representing $XX million adjusted of our We Day. higher XX% to EBITDA approximately our core in in than implies interest margin $XXX between million, line between the excluding in Investor at of Xx and and million million, XXXX the guidance

to volume grew our results We our our from and our demonstrating our and execution. of strong in and the adjusted business XXXX ICPs service-oriented income. delivering product opportunity EBITDA, innovation and positive fit meaningful business, demonstrate ICPs, We our of in size BXB with customers, and momentum increased long-term delivered our committed growth larger strength excluding across reflect delivered Our and driving markets. We the shareholders generated interest ARPU SMBs value employees. emerging for strong our remain market the

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

Operator

with question first KBW. Sanjay Our comes Instructions] from [Operator Sakhrani

Sanjay Sakhrani

upside, assumptions views. your you the underpin in factored I about are and the just talk just downside was wondering you the if of that inside macro cases of we sort think what about guidance? Could what sort

Bea Ordonez

it's to Sanjay, hear Bea. you. Nice from

there's change our So terms guidance of no philosophy, been in there. look,

that in other how environment reflects the models to to in ecosystem which assumptions our we anchored as guidance we metrics and the Our well to as operate, in are key how the we part expect that perform, of seeing business perform. expect those we're marketplaces business

single in as consistent at prepared remarks into. is steps we're marketplace which are rates well business happy that guidance in volume and down looking mid-teens BXB consistent. We XXXX. talked saw in rate guidance So with that growth main our the dynamics, to XXXX, assumptions feel the our to really year And marketplace conservative. The assume around those volume, the BXB growth as our in We we're assumptions pragmatic, we not be our But that on take normalize to come the assume appropriate, that seeing volume we digits we around to there. in is about of high off right we're XX%. but now. That record dynamics continues from in dive

we revenue grow taken general, we that the to points aggregate, to again so our in And our expect double-digit modest business guide, gets together, to our as said dynamics rate volume that off coming and remarks, within We're And right? expansion. are range. And year, volume in all that look, SMB seeing as we've faster for record that in take that on we growth than prepared all in take low a of a revenue based said. business, rate us

We we in. confident feel have those about targets our we the We're medium-term good that hitting assumptions all with XXXX, set really of late baked in and guide momentum.

Sanjay Sakhrani

I guess that. a just on maybe mean, quick follow-up I

tariffs. Just And as the point and up or you the key there's chatter of rate. obviously China, guys you I'll take a cetera, specific, is contemplating the outlined. a strategic we that around world? guys discussions about Anything around tariffs Pricing you lot that on think that factored ARPU have on macro in take then point. of et

Just execution are as think the what the where opportunities? inning we And forward just optimization, sort over And are move and ARPU maybe you we in? of talk about we XXXX. about could

Bea Ordonez

that. do to happy Yes,

the basis maybe take ex right? through about X So and rate rate business good the take tracked we And QX, see expansion, in demonstrated the Look, in take grow point in all talked basis XXXX. look, something about SMB we we ability that take we've at interest fact quarter-over-quarter usually I were to feel point question first. we basis decline. really That we in was X our flat We X I'll that income, that in And rate of QX, QX, X points grew points where sequential QX. right? delivered basis think

drivers record that on guidance our your to to we that customer look we our expand. expansion, to us going our continue continue sort is we're X.Xx we're marketplace business. seeing along. financial business talking BXB That's So take rate product, Modestly really to what up record to to in continue in. delivered and all strategy. And point in with We One, that nice modestly on higher-value to we're that consistently for And to of roughly 'XX, accelerated going continue stack we've about. checkout. very basis business, X factoring expect marketplace growth SMB our question, to our performance talked drive rate and means growth when take in products, We're going which, we on deliver the overall our compared XX%, cards. We're drivers reminding in take the spend as card to the X rate been the range. are business aligned core like cross-sell our through to that strategy our things is to that that card

we're pricing. value our iterate So you our and has We're unlock Sanjay, that. to journey continued workforce continuing going to as know, that to then management continuing for checkout with we there, This And sell finally, capabilities. acquisition, see us. a been,

give and those continued one in our degree our take move 'XX. I'll as us I take could So there expand the through ability as on, we of high rate as a that overall in overall, all and all strategy of you to factors tariffs conviction go of those, well. threw

guidance modeled talked Obviously, broad a philosophy guidance not in. we explicit to of quickly. assumptions There's about an share look, in So quite and evolving very baked is assumption and range the situation potential here our the policy. the obviously evolving bit of I'm a little trade going outcomes. for all

consistent just what goods example, said as of our we've has BXB talked and So range across say trade would I it the right? XX% business historically. think services, very of with geographies, we've we really but routes, proven of itself diversified is business our be an broad trade similar before, our historically, about resilient in again, of outcomes, policy sort right? business is what across across to face It's challenges services. Look, diversified, is and

we're the closely tariff course, actually I observers expect most to in think our So monitoring moderate and point, what at we, scenarios, monitor of don't In over to acknowledge opportunity. near any the an continue longer term, we most while is business, creates we'll impact uncertainty. it think to term, expect material this which medium I

we're that's about over thinking the So really how that long term.

Operator

comes from Nate Bank. Our next question Svensson Deutsche with

Christopher Svensson

about the know to to ask a income. bit XX% of Obviously, wanted XX% I step you're I a And XX%. year really down a expecting clip. ex healthy year-over-year at revenue exited interest in

So out? maybe know, comments then And about drivers Should BXB the decel. you some quarters anything that it in could of of you sort I the of just of cadence on talked talk that? any or functions steady issues of that Bea. the or be marketplace the step any timing volumes, decel about other any a to beyond but through call decel and year?

Bea Ordonez

Yes. Nate, welcome. the Thanks and question, for

came think time talk Outsized we BXB uplift. a record with we our which frankly, marketplaces That in So us, guidance. this from growth. in X 'XX, throughout down year-over-year core to look, know, So as drove in anybody as And some business. right? for year for we a at business a in for 'XX, volume that was a us definitely recession outperformance coming right? take, was That lot you I up right? growth and give than performance revenue that high single-digit we're a marketplaces or performance delivering is XXXX. much out marketplace or And of of step of XX% year called XX%, anticipated, calling There back yes, in baked from volume the midpoint mid-teens stronger the factors, a of lot ago, our ended again

business, with able our growth. we accelerate happy look, we were to were super While how BXB quickly

February. high we're behaviors volume we're January e-comm end As right, we look consistent, expecting to We're me That and tail longer-term is frankly, the a to deliver growth in seeing a in XXXX, we're what of are BXB very reversion we're our trend growth you of that that 'XX would very to volume comfortable at normalization, from that in should level. with a expect be we into digit. to marketplace to back XX% That's perspective. And business. those see beginning sort in single and going confident what what

of step think, with bit I little but down, comps again, to be So and a a a baseline, expected. growing tougher

those you low So take volume again, growth X overall. double-digit things combined,

acceleration that not some comfortable of half expect growth the the terms business mid-teens it. how is QX It's ramp-up points, revenue to the -- should take. take in the can revenue back in for the XXXX, X give about quarterly and target. first growth, is I hit of sort think a the need of we -- of that back you that assuming year, percentage of think we're or or higher versus rate where up QX don't sort measure of level half or accelerated modestly, not versus meaning seasonally ramp-up accelerating about. And it's that and to massive a look, of just sort very big that's modestly talked and quarters implications this stepping from in good be We're we couple X cadence, with operating, through how all mid-teens in volume we

Christopher Svensson

guide great detail. really the you used to I That's think And describe the word pragmatic earlier.

So hear that. to it's good

I pace hear region. cohort some ICP I know both volume was of sequential size ICP. it think across follow-up, ICPs of be you're more great and return And the per focused see But then 'XX, the more for growth capturing to per about doing month. in ICP, about in how to how per So on volume that would you've of that it adds you're a greater $XX,XXX to than been wallet, similarly, the growing et by nice maybe cetera. share And buckets thinking thinking growing

John Caplan

revenue, $XX taking propelled to context, great our some they And that and execute we the XXXX it I'll a fees introduced about first specifically, to and million think growth, growth, stack all controllable Payoneer you team customers framework and and to million that you we at to of the onetime ICP you macro because XXXX, of the business in solve business revenue about internally was the the that XXXX benefit think question, coming our firm for factors the and the We're financial approximately core amount full over clarify take of are where as multi-geography plan about from frankly, factors $XXX face that ICPs lost execution globe. dynamics million of for amount of EBITDA. guiding think, the and delivered was think our us. When drive present XXXX, of about challenges basis, largest X% the speaks contribute is and XX% the million. continue some 'XX asking the for SMBs the $XX of off revenue our a important volume, we the need out business most our of on delivering forward. and most tailwinds But were the our one. When core multicurrency, macro where market September to extraordinary That's $XXX if normalized for I

is ARPU ICP growth serve. minus for cost times to So our formula

our obviously the adjusted with core growth we're and ARPU acquiring customers, in XXXX larger in EBITDA. Xx ICPs. leverage So large our growth driving we're larger and unlocking with We're

of those look retention that the revenue retention logo, and strongest have disclose largest net ICPS, segment, volume to if of We for you that numbers. yet revenue customers. group at cohorts the of the numbers But -- of have our $XX,XXX-plus

not we resources drive important growth, driving levers ICP that the that's, to understand metrics. to allocating are So for profitable I that. are turn folks think, our very And we

about think growth, The checkout card the you strength XX% in growth exceptional we growth there. some over components of products, XXX% of mentioned when of So them, our ARPU our results. product,

Our knocked ball, low off BXB of of we to coming single-digit hell growth, team results of single-digit, were off drove the the XXXX, and in growth confidence and the and sort and at have guided profitability. company guided we And we the has cover and When at we of XX%, executed we out a it business. XX%. growth that extraordinary kind that billion at over revenue $X our deliver

So extraordinary you scale it more having team platform. making doing us platform Cohen organization customers costs the because Ryngler of Oren is our our product and through larger acquire and easier will need onboard for drive see headcount at our go-to-market incremental it. is we to scale to so that Adam to organization, or XXXX ICPs add success us our don't

arc every we ability we're to of team, the them. proven on when opportunity the business landscape, competitive exceptional given ICPs look the So building, strong add measure, business the the at and a monetize and have we

continues board, share the growth note there's rest -- I shared, rate ICPs in highest our great the the where outpace across XX Slide, the you the will are. I so. regions to around So ICPs think supplement about we We take in of don't we the it's feel see world. or firm. And on know, I we in

profitable and up resources drive of shareholder growth are we our are all lined to -- value. So

Operator

with next from Goldman The question Nance comes Will Sachs.

William Nance

I The full the the finishing I talk totally wanted for that maybe XX%. and on for guess strong. guys the dynamics. expecting year the first is Congrats quarter to both BXB year, seeing through you you. in hear the outlook I are

large guys that been that done and clear -- go-to-market you have it XXXX? to proud year? Investor about the you generate pretty are and I the You XX% through there, get long-term there of that side, efficiencies outperformance take are level generate to talk continue that I do that Day and that, that have you everything we to know you hit Do mean, on Or guys would further we focus since you been expectation. given this over the have think opportunities of able the outperformance guys what level? same on the is Can as above numbers

John Caplan

it market. is, because long for XXX% is shareholders the for customers valuable extraordinary great business question. from I Yes, more of -- BXB we proud us team. an which the large for a achievement by that very very and AP long our the percentage had. a important -- term of of growth we which of have full for continues Will, traction the Thank to you And in consider AR exceeded grow, think, it. our raising the we're volume BXB, coming billion And and term think you makes stronger, our to XXXX, is stack, we momentum the about $XX when everyone. The volume financial XXX% of of BXB opportunity enormous. It's

that is those which exceptionally right? know focused acquisition on Our market one pace, been serving has Our is team full in We pace, customers, only strong. acquiring customers.

the so And seeking think business that outperform multicurrency that's Latin is we So always outperform. diversified see -- or provide. whether the regions of in America when need we you solution seek about China or across globe, that the that or Europe, APAC customers because we're to our you to it's can

at coming In growth XX% EMEA, by saw XX%; of growth it BXB. I from some lot America, Latin growth we when region, in a our So of stats. XX%. We -- I'll the in look just of the region APAC, by I when think share

are know And So are is of much And by the franchise multi-entity BXB banks. the do with penetrating solution. competing power their SMBs SMBs that not are by that we well domestic our the well business. are, them, served providing a served, all we markets we where local superior particularly not

us capture. stack for the platform. and and is financial So when that see of management workforce the of there integration acquisition I And the cross-sell potential look as our at to is there believe upside upside we we product, some

William Nance

bit little lot any thoughts corridor. shared an if to the in share then what Could Chinese That's Awesome. you been Got maybe on China. update I process there? in give just just super opportunities there's it. or without the the a the acquisition And you versus that even around you a additional speak Mainland know of acquisition helpful. could previously gains

guess, corridor you that of of how and of represents? the Chinese sort the deal one that I wondering unlock dynamics competitive Just what view,

John Caplan

the and Yes. a all from a that or that we I approvals few transaction ago and that closing weeks advantages move we can ago we've we in week mean first straightforward. anticipate towards regulatory deal now half. are that very announced received shared The

-- We governments first, that's to the we're for regulated trusted SMBs. global and globe, by have global solution and a provide essential around

will We this handful a our forward of China of to customers with our couple there of firms customers. be with in a we in working looking very and respect seeing one be NASDAQ-listed and it. I'll small weeks, privilege,

and and talked serving local foremost, customers capabilities in provide share are help for just R&D, the past. our improve their and the for opportunity to think, market map past, provide cost help outbound money expand you which because are and yes, superior and First it's to specifically note, development and the if us, about to around you with global -- and technology in distributions to There accelerate flows. take explore this an road one our enable our to us which opportunities certainly talked in to I about Will, customers the us our will in on-the-ground the providers, And there product opportunities China solutions the we've regions to continue are channel structure. And our network, initiatives, globe. operations those green acquisition, will

the for because our around continue Payoneer franchise expanding prioritize exceptional footprint regulatory provides an We moat to our shareholders. that

William Nance

No, Yes. certainly differentiated the space. in payment that's

Operator

Kennedy Our question comes next William with Blair. from Cris

Cristopher Kennedy

the see that to Is calls progress for there in XXXX. to way EBITDA. guidance core the good think in continued long-term about about X% I It's any margin think for metric?

Bea Ordonez

we're in again, midpoint year. increasing proud rates $XX Cris, leverage to we've right? as and been provide business interest for Xx as Look, as we're to $XX business, million. driving business XXXX, we all you well. deliver at now of in question. even did going profitability in the context, XXXX, that we for excess thanks decline, some what the of lost Hope EBITDA, last the at the John look said. profitability in that to as adjusted the Look, million as core core That's able And of did, unlock core really that we're

So geographies, added and and even added this made we the products complexity I've into our adds we expanded and to licensed in business of as regulatory more our observation sort -- have mix past, our which adds moat. more moat, shifted infrastructure, yes, -- complicated and

and we as some we there, look our platform well. And from we driving interest think right? in a of will we face target set look back XX% journey how some in were long-term that. that the is So agnostic that us We as XXXX to our AI able capabilities of and time, done areas, XX% there's related leverage to good to those inclusive right? rates Even 'XX, that We're our to EBITDA, John and as can going all continue for as We our upside as efficiently, the leverage. more those and investments, platform that. other we've Look, to it more delivered been things, can the driven in to we that would adjusted do that come EBITDA AI confident a hit can headwinds. feel and serve as over profitability. improving we to target in we've do capabilities right, further we efficiently said, unlock think to innovation in customer customers we're we've of adjusted move, of We think that in that's and business, we had we function even hit

in we're and For with very target hitting comfortable that 'XX. that target with now, XX%,

Cristopher Kennedy

Great. I that John, that just alluded volume. to you and it last over give ] $XXX,XXX and what Can [ about additional monthly you talked color cohort earlier, ICPs think like? And quarter, any of you generating looks on those

John Caplan

you them, Yes, meet traditional they're scale system. the And is by real see with what you serve because banking underserved when it's they're frigging businesses our exciting and awesome, happy product. are these them with to

very great them, mentioned, strong identifying team is retention high-value so being revenue And and we with as our I net them logo customers. effective see go-to-market at with retention

China, an framework brand, in of process Philippines serving business regulatory Payoneer services marketing whether in it's traders or strong the outsourcers So customers companies coming exciting Dubai exporters upmarket or to global cohort out very case and iPhone it's pretty of see effectively. the

Operator

Williams comes next with Trevor question from Our Jefferies.

Spencer James

for ask Trevor specifically de maybe wondering This wanted point, the is finer to comment close put was and impact the to minimis effect? how affect this around shipped sellers earlier for question base of I on Williams. on rule different expect for the on James into I maybe to could to Sanjay's Spencer maybe to to you a follow-up across it a loophole Payoneer risk U.S. go tariff you your if efforts goods to

Bea Ordonez

say than think super right? coming directionally the Yes. our see. for in not of impactful that's very straightforward is a that our question. rule not Less always exception. minimis that I X% specific confidently can X% It's But Look, our I volume estimate, volume is de minimis de to And we is us. mean, of under

our very comfortable in that -- of that coming we under just we're be so exception. China And volume, is clear, to

very comfortable significantly we're we're impacted there. So not that

think we sort changes point, sort many through I and through important the many, and look, speculate directions. policy more of could of iterate

that. we reiterate the geographies, in that is see goods, that point routes terms Sanjay question important diversified has be trade business of to right? our resilient, really itself is across services, one and is I'll continue to proven The that And asked the

resilient. sellers are Our

global a have X,XXX We trade enables that routes. network

overall there's value momentum business comfortable the long-term and And obviously and with resilient, we're our is that monitoring our feel business. right? it have we we're Ultimately, that so that creation, directionality we customers very resilient that we're uncertainty, in our for building and while closely are the good

Spencer James

a the one appreciate Could cadence quick And add I Great. you modeling by any it. on year as EBITDA color quick question. quarter? the throughout follow-up, adjusted of

Bea Ordonez

Yes, for sure.

a at to expect XX% of over be interest again, And the the guidance, back our about mix we just we year. revenue rates the them year. bit up in and Transaction core in the half cadence modestly talked of of that costs, total called very from declining the the mid-teens out revenue, stepping we course of look, year. in and over little course stepping up So shift the again,

stepping costs the XX%, or starting transaction stepping the So more XX% quarters to pretty with so, that's less first overall you adjusted QX, QX of impacts. that X EBITDA for very in of around the aligned if with exit in and the less, from QX up those modestly that behaving how X a year. Adjusted you're stepping you're aligned we or up we for over course directionally, see expectations the if consistent OpEx But over XX% up or assume rate quarters, course XX%, the or margin relatively business. seasonal more again much have flat

Operator

Krebs with next Research. The question from Daniel Wolfe comes

Daniel Krebs

again for ask what We you $XXX,XXX as market in Could you view focus wanted customer a a customer? of I ICPs, larger the the talked fit? to potentially segmentation. discuss what potential too on maybe a does At point on about the ICP cohort. product max the size terms increased large become

John Caplan

it. Daniel, great actually haven't seen question. We

loyal ICPs book some in that have been have multiyear the large very customers. We Payoneer

out. We level focused do and we have focused actually service So topped and efficiency unit that's economic that's focus. haven't

as cross-border think add without cross-border ICPs to build us, a SMBs that CSM payments-focused multicurrency, have is access financial stack enables those other platform context, isn't right? a ICPs platform that that self-serve you well emerging markets, that SMB, financial in stack so some all seek. And the that service global serving support it, volumes multi-entity, we of acquisition able are and about we're customers what high high-growth global There of to continuing cross-border building our as to the don't if Payoneer. capture than BXB full we're way, a of a So we on-the-ground to

have attach high-value, customers, and products And being opportunity of highest rates top. the at real fat so middle with to the customer our when see AP our we customers the to the largest look and of continue base about we the the our complex needs those customers serve high-volume

Daniel Krebs

update great. size XXXX? of us That's on you up And any intranetwork monetization perhaps flows. Could on follow If an the I intranetwork give efforts the update can there? flows on in

Bea Ordonez

important Look, a our more talk around it's us think offering to question. pricing thing broadly a little and Yes. really Thanks for for talk the I'll sort strategy because through. of I really

about the from strategy approach with to to right, move strategy past and So just one to anchored segmented look, not one-size-fits-all really offering we've and to and pricing customer-centric sort that goes of our is but that's pricing, ongoing talked bundling it. in to along a the

a really customer A, fits Y. starting and size understanding our bundling our that in cash and away we've product you from you defining Very all, personas, shift withdraw pay use So aligning spent those to one geography XXXX, a of their much personas, cases pricing right? lot time in

'XX, in So thinking fruit, executed that on a continue non-ICPs, of $XXX XXXX, $XX we to to million we and through in on that we largely in base. invest monetization low-hanging improve journey million generated In uplift infrastructure.

We continue Lite roll our out to account.

research cases use and on on We base. $XXX offering for SMBs yet prior And generated had we our John larger we of year, uplift FX million of premium those and and We $XX was developed uplift on that refined measures. from did about. talking million XXXX, about testing intranetwork the fees. views the a in continued just optimization pro to a we addition in And

be FX $XX to roughly have offering with guidance And segment-based out our rolling optimize of in for look an in differentiated out million testing uplift to continuing continues some upgrade we and functionality prices larger of intranetwork we're So those fees. fees and opportunity our with continuing those broader us, premium lite, or that out approach, roll as products to those expecting included fees and from that for those larger approach to services, initiatives. we're continuing fees pro, for customers, those customers, some XXXX, for those pricing and annual

cross-sell purpose and really right, bunch think into for to terms things, add in our or offerings So how the size. again, we cost for sort fit journey it's we multi-quarter as a how to type to for do recurring and more of reduce whole fit in and opportunity to to flex those monetization, complexity us. and and SaaS It's improve a bundle, make been available that revenues premium we those overall a really to fees of making long-term engagement to about customers account meaningful type pro drive the of serve products by we

think part point value is that $XX.X X companies network we've others the big We've XXXX and in continuing that's that in and a intranetwork broader pricing ecosystem. and that strategy. made monetize in billion part to that it to proof X-sided and do really X flows. of right, created of that, a powerful has intranetwork of of we're directionally So that, We about the and operating offering that as are individuals strides that

Operator

any and We call the I'll back for team so the questions, to remarks. have no hand closing management further

John Caplan

for Thanks, today. us joining everybody,

an had size the confident of our our extraordinary the and team, our the around from brand, we're customers. in of XXXX, our opportunity, QX, power and moat have standout a We the response firm the

your I So final and you incredible to for is our for shareholders our thing their probably say team hard support to the to want thank work.

Operator

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

Payoneer Global (PAYO) 27 Feb 252024 Q4 Earnings call transcript