Investors interested in Financial Transaction Services stocks are likely familiar with Fidelity National Information Services (FIS) and Payoneer Global Inc. (PAYO) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphas ...

Core Viewpoint - Payoneer (NASDAQ: PAYO) has established a strong competitive advantage through its global payment infrastructure, which smaller players will find difficult to replicate, indicating a positive outlook for the company as long as it maintains effective execution [1]. Company Analysis - Payoneer is viewed as a company with long-term growth potential, supported by a solid foundation in fundamental analysis and a focus on identifying undervalued companies [1]. - The investment strategy emphasizes acquiring quality companies at a discount to their intrinsic value and holding them for long-term earnings and shareholder return compounding [1].

Core Viewpoint - Payoneer Global Inc. (PAYO) experienced an 11.7% increase in share price, closing at $6.59, following a significant trading volume and a recent acquisition [1][2]. Company Developments - The recent rise in Payoneer's share price is linked to the Trump administration's announcement of a 90-day halt on reciprocal tariffs for most countries [2]. - Payoneer completed the acquisition of Easylink Payment Co., Ltd., a licensed payment service provider in China, which is expected to enhance its global regulatory framework and improve service offerings in China [2]. Financial Performance Expectations - Payoneer is projected to report quarterly earnings of $0.07 per share, reflecting a year-over-year decline of 12.5%, with revenues expected to reach $242.49 million, an increase of 6.3% from the previous year [3]. - The consensus EPS estimate for Payoneer has been revised down by 3.3% over the last 30 days, indicating a negative trend in earnings estimate revisions [5]. Industry Context - Payoneer operates within the Zacks Financial Transaction Services industry, which includes other companies like Green Dot (GDOT) [5]. - Green Dot's consensus EPS estimate remains unchanged at $0.70, representing an 18.6% increase compared to the previous year, while it closed the last trading session at $7.72, up 15.2% [6].

Investors with an interest in Financial Transaction Services stocks have likely encountered both Payoneer Global Inc. (PAYO) and Visa (V) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis o ...

Financial Performance - Payoneer reported a 21% increase in transaction volume to $80.1 billion and an 18% increase in revenue to $977.7 million for the year ended December 31, 2024, compared to 2023[22]. - Revenues typically increase in the fourth quarter due to higher e-commerce sales during the holiday season, indicating seasonal fluctuations in revenue[52]. - The company recorded a net loss of $12.0 million for the year ended December 31, 2022, despite achieving net income in 2023 and 2024[143]. - Approximately 35% of the company's revenue for the year ended December 31, 2024, was generated from customers in Greater China[202]. Market Opportunities - The global e-commerce and service marketplace payouts business represents a $300 billion volume opportunity, while B2B SMBs represent a $6 trillion volume opportunity[37][38]. - The global B2B e-commerce volume is projected to reach $36 trillion by 2026, with significant growth expected in Asia Pacific, Latin America, and the Middle East[24]. - Payoneer is focused on encouraging existing customers to expand their use of its products and services to drive growth[142]. Customer Base and Operations - Payoneer has approximately 2 million active customers, with over 500,000 fitting the ideal customer profile, processing an average of over $500 monthly[49]. - Payoneer operates in over 190 countries, supported by regional sales and customer support hubs to enhance customer relationships[32]. - The company is working to acquire a locally licensed non-bank payments institution in China, with the transaction expected to close in the first half of 2025[56]. Compliance and Regulatory Risks - Payoneer is subject to extensive and complex regulations, including those related to anti-money laundering and customer verification, which may change frequently[56]. - The company has applied for various licenses, including a Payment Aggregator Cross Border license in India and a payment service provider license in Israel, to enhance its regulatory compliance[55]. - Compliance with anti-money laundering and similar regulations is essential, with failure to comply potentially resulting in penalties and increased operational costs[195]. - The company must continually update its compliance program in response to evolving regulations, which may increase costs and operational complexity[196]. Employee and Corporate Culture - The company emphasizes employee wellness and development, offering programs like a Global Employee Assistance Program and a Top Talent leadership development initiative[72][73]. - Payoneer has a total rewards strategy aimed at attracting and retaining talent, focusing on equitable compensation and benefits[74]. - The company has held its third Global Week of Good in 2024, with participation from employees in 18 countries[75]. Risks and Challenges - The company faces substantial competition in the financial services and payments industry, which could adversely affect margins and results[91]. - Cybersecurity vulnerabilities and operational disruptions could result in significant financial losses and damage to the company's reputation[97]. - The company is exposed to risks associated with changes in interest rates, which could negatively impact the market value of time deposits and U.S. Treasury Securities[99]. - The ongoing conflict in Israel, which began on October 7, 2023, could adversely affect the company's operations and revenues, although revenues from Israeli customers were insignificant for the year ended December 31, 2024[105]. Technology and Innovation - The company must continuously innovate and respond to technological changes to remain competitive, with significant investment required for new product development[85]. - The company has invested in improving its platform to offer new features, but the success of these initiatives is uncertain and critical for future growth[142]. Financial Management - The company funds its Working Capital products through balance sheet cash, but faces risks related to the availability of capital for these products[174]. - Future capital needs may require the company to seek additional financing, which may not be secured on favorable terms, potentially limiting growth and operational flexibility[175]. - The company's Working Capital products, primarily merchant capital advances, are subject to collection risk and regulatory risk, with adverse macroeconomic conditions potentially leading to lower receivables and extended repayment periods[172]. Intellectual Property and Data Protection - Payoneer relies on a combination of trade secrets, trademarks, and confidentiality agreements to protect its intellectual property, with no issued patents[76][78]. - The company is subject to evolving regulations regarding privacy and data protection, which may require substantial modifications to data processing practices[210]. - Non-compliance with data protection laws could result in fines up to the greater of €20 million or 4% of total global annual turnover[211]. Economic and Environmental Factors - Inflation has negatively impacted the purchasing power of consumers, potentially affecting the growth of the e-commerce market and the company's earnings[139]. - The company faces risks related to climate change and environmental issues, which could disrupt operations and increase compliance costs[218].

This presentation does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any security. You should not construe the contents of this presentation as legal, tax, accounting or investment advice or a recommendation. Forward-Looking Statements Certain statements in this presentation may be considered "forward- looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-look ...

Payoneer Global Inc. (NASDAQ:PAYO) Q4 2024 Earnings Conference Call February 27, 2025 8:30 AM ET Company Participants Caius Slater - Director, Investor Relations John Caplan - Chief Executive Officer Bea Ordonez - Chief Financial Officer Conference Call Participants Sanjay Sakhrani - KBW Nate Svensson - Deutsche Bank Will Nance - Goldman Sachs Cris Kennedy - William Blair Spencer James - Jefferies Daniel Krebs - Wolfe Research Operator Good morning. Thank you for standing by. Welcome to Payoneer's Fourth Qu ...

Core Insights - Payoneer Global Inc. reported quarterly earnings of $0.05 per share, missing the Zacks Consensus Estimate of $0.07 per share, representing an earnings surprise of -28.57% [1] - The company posted revenues of $261.74 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 8.24% and showing an increase from $224.32 million year-over-year [2] - Payoneer Global has outperformed the market with a 1.4% increase in shares since the beginning of the year, compared to the S&P 500's gain of 1.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.06 on revenues of $241.92 million, and for the current fiscal year, it is $0.37 on revenues of $1.02 billion [7] - The estimate revisions trend for Payoneer Global is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Financial Transaction Services industry, to which Payoneer Global belongs, is currently in the top 31% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Another company in the same industry, Ryvyl, is expected to report a quarterly loss of $0.29 per share, with revenues projected to decline by 32.8% year-over-year [9]

Financial Performance - Payoneer achieved a record annual volume of $80 billion, reflecting a 21% year-over-year growth[6]. - Revenue for 2024 reached $977.7 million, representing an 18% increase compared to 2023[2]. - Net income for Q4 2024 was $18.2 million, a decrease of 33% year-over-year, while full-year net income increased by 30% to $121.2 million[2][5]. - Adjusted EBITDA for 2024 was $270.6 million, up 32% from the previous year[2]. - Revenues for Q4 2024 reached $261.739 million, a 16.7% increase from $224.320 million in Q4 2023[21]. - Total revenues for the year 2024 were $977.716 million, up 17.6% from $831.103 million in 2023[21]. - Operating income for Q4 2024 was $29.184 million, compared to $25.706 million in Q4 2023, reflecting a 9.7% increase[21]. - Adjusted EBITDA for Q4 2024 was $63.271 million, an increase of 21.5% from $52.245 million in Q4 2023[27]. - Revenue recognized from contracts with customers for Q4 2024 was $198.233 million, a 26.4% increase from $156.774 million in Q4 2023[22]. - Interest income on customer balances for Q4 2024 was $60.595 million, a decrease of 6.5% from $64.867 million in Q4 2023[22]. - Greater China contributed $89.938 million in revenue for Q4 2024, up 12.5% from $80.244 million in Q4 2023[24]. Customer and Market Growth - The company reported a 42% year-over-year growth in B2B volume, reaching $3.0 billion[6][12]. - Active Ideal Customer Profiles (ICPs) grew by 8% year-over-year, totaling 560,000[6]. Future Projections - Payoneer plans to achieve revenue guidance of $1,040 million to $1,050 million for 2025[11]. Expenses and Liabilities - The company reported total operating expenses of $232.555 million for Q4 2024, compared to $198.614 million in Q4 2023, representing a 17.1% increase[21]. - Total current liabilities rose to $7.13 billion in 2024, up from $6.54 billion in 2023, indicating an increase of 9.0%[33]. Assets and Cash Flow - Total assets increased to $7.93 billion in 2024 from $7.28 billion in 2023, reflecting a growth of 8.9%[33]. - Cash and cash equivalents decreased to $497.47 million in 2024 from $617.02 million in 2023, a decline of 19.4%[33]. - Net cash provided by operating activities for 2024 was $176.93 million, compared to $159.49 million in 2023, representing a growth of 10.9%[35]. - Net cash used in investing activities significantly increased to $1.96 billion in 2024 from $44.25 million in 2023[35]. Shareholder Information - The weighted average common shares outstanding for diluted earnings per share was 385,074,151 for Q4 2024, compared to 379,881,231 for Q4 2023[21]. - Basic earnings per share for Q4 2024 was $0.05, down from $0.08 in Q4 2023, while diluted earnings per share decreased from $0.07 to $0.05[31]. - Total shareholders' equity increased to $724.79 million in 2024 from $664.27 million in 2023, a rise of 9.1%[33]. Tax and Other Financial Activities - Cash paid for taxes in 2024 was $52.32 million, compared to $40.91 million in 2023, reflecting a 28.0% increase[35]. - The company reported a loss on Warrant repurchase/redemption of $19.83 million in 2024, with no such loss reported in 2023[35]. Strategic Initiatives - The company implemented strategies to reduce sensitivity to interest rate fluctuations, with $1.8 billion of customer funds invested in US treasury securities[12]. - Payoneer acquired Skuad, enhancing its financial stack for SMBs operating internationally[12]. - The company reported a record $1.5 billion in spend on Payoneer cards, a 36% increase year-over-year[12].

Core Viewpoint - Payoneer (PAYO) is set to report its fourth-quarter 2024 results on February 27, with expectations of revenue growth and improved earnings per share compared to the previous year [1][5]. Revenue Expectations - The Zacks Consensus Estimate for Payoneer's Q4 2024 revenues is $241.8 million, reflecting a 7.8% year-over-year increase, driven by growth in B2B, International Commercial Partners (ICP), and marketplace segments [3]. - Revenue growth is also anticipated from the adoption of card products, pricing initiatives, and high-interest income due to increased customer funds on the platform [4]. Earnings Projections - The consensus estimate for Payoneer's earnings in Q4 2024 is 7 cents per share, indicating a 40% year-over-year rise, supported by robust top-line growth, strong margins, and disciplined expense management [5]. - However, the current Earnings ESP for Payoneer is -31.49%, and it holds a Zacks Rank of 3 (Hold), suggesting uncertainty regarding an earnings beat this quarter [6][7].