Core Viewpoint - Payoneer Global Inc. (PAYO) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Revisions - The Zacks rating system is based on the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts for the current and following years [2]. - Payoneer Global is projected to earn $0.32 per share for the fiscal year ending December 2024, representing a year-over-year increase of 33.3% [9]. - Over the past three months, the Zacks Consensus Estimate for Payoneer Global has risen by 30.3%, indicating a positive trend in earnings estimates [9]. Impact of Institutional Investors - Changes in a company's future earnings potential, as shown through earnings estimate revisions, are strongly correlated with near-term stock price movements, largely due to institutional investors adjusting their valuations based on these estimates [5]. - Institutional investors typically react to changes in earnings estimates, leading to significant price movements in the stock [5]. Zacks Rating System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - The upgrade of Payoneer Global to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [11].

Company Overview - Payoneer Global Inc. (PAYO) currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 1 (Strong Buy), which is associated with a high likelihood of outperforming the market [3] Price Performance - Over the past week, PAYO shares increased by 1.2%, while the Zacks Technology Services industry declined by 0.51% [5] - In the last month, PAYO's price change was 36.05%, significantly outperforming the industry's 1.76% [5] - Over the past quarter, PAYO shares rose by 52.57%, and over the last year, they increased by 101.89%, compared to the S&P 500's gains of 15.2% and 38.09%, respectively [6] Trading Volume - PAYO's average 20-day trading volume is 3,134,674 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, three earnings estimates for PAYO have been revised upwards, while none have been lowered, leading to an increase in the consensus estimate from $0.25 to $0.32 [9] - For the next fiscal year, two estimates have also moved upwards with no downward revisions [9]

Core Insights - Payoneer Global Inc. (PAYO) shows potential as a strong investment due to a significant revision in earnings estimates, indicating an improving earnings outlook [1][7] - Analysts are increasingly optimistic about the company's earnings prospects, which is expected to positively influence its stock price [2] - The Zacks Rank system, which rates stocks from 1 (Strong Buy) to 5 (Strong Sell), has a proven track record, with Zacks 1 stocks averaging a +25% annual return since 2008 [3] Current-Quarter Estimate Revisions - For the current quarter, Payoneer is projected to earn $0.04 per share, reflecting a year-over-year decline of -20% [4] - In the last 30 days, one estimate has been revised upward, with no negative revisions, leading to an 8.33% increase in the Zacks Consensus Estimate [4] Current-Year Estimate Revisions - The expected earnings for the full year are $0.29 per share, representing a +20.83% change from the previous year [5] - Over the past month, two estimates have been revised upward, with no negative revisions, resulting in a 16.16% increase in the consensus estimate [5] Favorable Zacks Rank - The positive estimate revisions have earned Payoneer a Zacks Rank 1 (Strong Buy), indicating strong potential for outperformance [6] - Research indicates that stocks with Zacks Rank 1 and 2 significantly outperform the S&P 500 [6] Bottom Line - Payoneer Global's strong estimate revisions have led to a 33.7% increase in stock price over the past four weeks, suggesting further upside potential [7]

[Payoneer Q3 2024 Financial Results](index=1&type=section&id=Payoneer%20Reports%20Third%20Quarter%202024%20Financial%20Results) [Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) Payoneer achieved record revenue and volume, with significant growth in net income and its high-value customer base Q3 2024 Key Financial & Operational Metrics | ($ in mm) | 3Q 2023 | 3Q 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $208.0 | $248.3 | 19% | | Revenue ex. interest income | $147.6 | $183.1 | 24% | | Net income | $12.8 | $41.6 | 224% | | Adjusted EBITDA | $58.2 | $69.3 | 19% | | Volume ($bn) | $16.3 | $20.4 | 25% | | Active Ideal Customer Profiles ('000s) | 502 | 557 | 11% | - The company has achieved **four consecutive quarters of accelerating growth** in Ideal Customer Profiles (ICPs) and five consecutive quarters of accelerating ARPU excluding interest income, which grew **20%**[3](index=3&type=chunk) [Third Quarter 2024 Business Highlights](index=1&type=section&id=Third%20Quarter%202024%20Business%20Highlights) The company saw strong, broad-based volume growth across key segments, especially in B2B and Merchant Services - B2B volume increased **57% year-over-year to $2.8 billion**, driven by strong customer acquisition and larger transaction sizes[4](index=4&type=chunk) - Merchant Services (Checkout) volume grew **142% year-over-year to $153 million**[4](index=4&type=chunk) - Volume from SMBs selling on marketplaces rose **17% YoY to $12 billion**, while Enterprise payouts volume increased **29% YoY to $5.5 billion**[4](index=4&type=chunk) - Spend on Payoneer cards increased by **41% year-over-year to $1.4 billion**, indicating higher adoption for global accounts payable[4](index=4&type=chunk) - Total customer funds held on the platform grew **13% year-over-year to $6.1 billion** as of September 30, 2024[4](index=4&type=chunk) [2024 Guidance](index=2&type=section&id=2024%20Guidance) Payoneer raised its full-year 2024 guidance for revenue and adjusted EBITDA following strong Q3 performance [Updated Full-Year 2024 Outlook](index=2&type=section&id=Updated%20Full-Year%202024%20Outlook) The company increased its 2024 revenue forecast to $950-$960 million and adjusted EBITDA to $255-$265 million 2024 Full-Year Guidance | Metric | Guidance | | :--- | :--- | | Revenue | $950 million - $960 million | | Transaction costs | ~16.0% of revenue | | Adjusted EBITDA | $255 million to $265 million | - The guidance increase reflects **strong Q3 performance** and higher expectations for both growth and profitability in the final quarter of the year[5](index=5&type=chunk) [Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Consolidated%20Financial%20Statements%20%28Unaudited%29) [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Third-quarter revenue grew to $248.3 million, and net income surged to $41.6 million, driven by revenue growth and a tax benefit Q3 2024 vs Q3 2023 Income Statement Highlights (in thousands) | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Revenues | $248,274 | $208,035 | | Operating income | $35,162 | $29,499 | | Net income | $41,574 | $12,825 | | Diluted earnings per share | $0.11 | $0.03 | - The company recorded a **tax benefit of $19.5 million** in Q3 2024, compared to a tax expense of $10.0 million in Q3 2023, significantly contributing to the net income growth[15](index=15&type=chunk) - A **loss of $14.7 million** was recognized on the repurchase and redemption of warrants during Q3 2024[15](index=15&type=chunk) [Disaggregation of Revenue](index=7&type=section&id=Disaggregation%20of%20Revenue) Revenue growth was geographically diverse, with Greater China as the largest market and significant income from customer balances Revenue by Primary Regional Market (in thousands) | Region | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Greater China | $85,111 | $72,513 | | Europe | $48,666 | $42,378 | | Asia-Pacific | $37,770 | $29,145 | | North America | $25,162 | $22,358 | | South Asia, Middle East and North Africa | $26,809 | $22,181 | | Latin America | $24,756 | $19,460 | | **Total revenues** | **$248,274** | **$208,035** | Revenue by Source (in thousands) | Source | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Revenue from contracts with customers | $180,360 | $145,202 | | Interest income on customer balances | $65,162 | $60,416 | | Other sources | $2,752 | $2,417 | | **Total revenues** | **$248,274** | **$208,035** | [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) Total assets stood at $7.05 billion, with shareholders' equity increasing to $727.9 million as of September 30, 2024 Key Balance Sheet Items (in thousands) | Metric | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $534,170 | $617,022 | | Customer funds (Assets) | $6,085,767 | $6,390,526 | | Total assets | $7,051,174 | $7,283,119 | | Outstanding operating balances (Liabilities) | $6,085,767 | $6,390,526 | | Total liabilities | $6,323,300 | $6,618,846 | | Total shareholders' equity | $727,874 | $664,273 | [Consolidated Statement of Cash Flows](index=11&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) Net cash from operations was $131.0 million, while investing and financing activities resulted in significant cash outflows Cash Flow Summary - Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $131,039 | $101,328 | | Net cash used in investing activities | ($1,814,106) | ($47,754) | | Net cash used in financing activities | ($436,932) | ($492,732) | [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) [Reconciliation of Net Income to Adjusted EBITDA](index=8&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) Adjusted EBITDA increased to $69.3 million, with adjustments for a tax benefit, stock compensation, and warrant-related losses Reconciliation of Net Income to Adjusted EBITDA (in thousands) | | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | **Net income** | **$41,574** | **$12,825** | | Depreciation and amortization | $13,510 | $7,116 | | Tax (benefit) expense on income | ($19,484) | $10,012 | | Stock based compensation expenses | $17,430 | $15,330 | | Loss on Warrant repurchase/redemption | $14,746 | — | | Restructuring charges | — | $4,488 | | **Adjusted EBITDA** | **$69,268** | **$58,178** | [Capital Allocation](index=1&type=section&id=Capital%20Allocation) [Share and Warrant Repurchase](index=1&type=section&id=Share%20and%20Warrant%20Repurchase) The company returned capital via $21 million in share repurchases and a $21 million redemption of all public warrants - The company conducted **$21 million of share repurchases** at a weighted average price of $5.67 per share during the third quarter[4](index=4&type=chunk) - Completed the repurchase and redemption of all **25 million outstanding public warrants for a total of $21 million**[5](index=5&type=chunk) [Company Information and Disclosures](index=3&type=section&id=Company%20Information%20and%20Disclosures) [About Payoneer](index=3&type=section&id=About%20Payoneer) Payoneer is a financial technology company empowering global SMBs to transact and grow in the international digital economy - Payoneer's mission is to enable entrepreneurs and businesses anywhere to participate and succeed in the global digital economy[8](index=8&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements subject to risks and uncertainties detailed in the company's SEC filings - Projections of future revenue, transaction cost, and adjusted EBITDA are considered **forward-looking statements**[9](index=9&type=chunk) - Actual results may differ materially due to risks including **geopolitical events**, changes in laws, and other factors outlined in the company's Form 10-K[9](index=9&type=chunk)

Muhla1 The Thesis On August 12, 2024, Payoneer Global Inc. (NASDAQ:PAYO) offered to buy back all its outstanding warrants for a fixed price of $0.78 each. The offer is not subject to financing conditions, approvals, or minimum or maximum number of warrants tendered. Translation: all warrants you tender will be purchased. During the most recent trading day (September 3, 2024) the warrants traded for $0.7725 for most of the day. This allows you to purchase warrants in the open market for $0.7725 and tender th ...

Payoneer Global Inc. (PAYO) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving. Analysts' growing optimism on the earnings prospects of this company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term sto ...

Financial Data and Key Metrics - Revenue grew 16% YoY to $240 million in Q2 2024, driven by a 10% increase in ICPs, higher take rate services, and interest income from customer funds [13] - Volume growth accelerated to 22%, with B2B volume growth reaching 40% [6][14] - Adjusted EBITDA reached a record $73 million, with a 30% margin, up from $56 million in Q2 2023 [6][13] - Interest income increased 19% to $66 million, driven by a 9% growth in customer funds held by Payoneer [16] - Net income was $32 million, compared to $46 million in Q2 2023, which included $18 million in non-operating gains [19] Business Line Performance - B2B business delivered 40% volume growth in Q2, accelerating from 33% in Q1 [14] - Merchant Services volume grew nearly 200%, while enterprise payout volume grew 31% [15] - SMB marketplace volume increased 15%, driven by strong performance in China and emerging marketplaces [14][15] - Take rate for SMB customers increased by 1 basis point, driven by faster growth in higher take rate B2B business [15] Market Performance - Strong growth in APAC, EMEA, and Latin America, with 28% growth in these regions [28] - China saw 19% growth, while North America grew 23% [28] - Emerging markets like Pakistan, the Philippines, Brazil, and South Korea saw over 40% growth [31] Strategic Direction and Industry Competition - The company is focused on building a financial stack for global cross-border SMBs, with a strategy centered on long-term revenue growth and profitability [5] - Payoneer acquired Squad to enhance cross-border payroll capabilities, aiming to increase ARPU and customer stickiness [12][35] - The company is investing in product enhancements, including integrations with accounting ERPs, multi-entity management, and FX capabilities [9][10] Management Commentary on Operating Environment and Future Outlook - Management highlighted stable macro conditions in Q2, with expectations of some softness in the back half of 2024, particularly in the marketplace business [31][33] - The company raised its 2024 revenue guidance by $25 million to $920-$930 million, with adjusted EBITDA guidance increased by $25 million to $225-$235 million [20][22] - Payoneer expects to extend the duration of 30% of its customer funds portfolio to reduce interest rate sensitivity and drive consistent interest income [16][49] Other Important Information - Payoneer repurchased $47 million worth of shares in Q2 and ended the quarter with $576 million in cash and cash equivalents [19][20] - The company is investing in R&D, with a 12% YoY increase in R&D headcount to support long-term product development [19] Q&A Session Summary Question: Pricing initiatives and their impact on revenue growth [24] - The company is seeing traction from pricing initiatives, including the Lite account launch and FX revenue pricing, with an expected $20 million uplift in 2024 [25][26] Question: Cross-selling strategy and product adoption [27] - Payoneer is focused on cross-selling financial stack products, with increasing adoption of 2-3 AP products among customers [28] - The Squad acquisition is expected to enhance payroll capabilities and drive ARPU growth [29] Question: Macro outlook and regional performance [31] - Management expects some macro softness in H2 2024, particularly in the marketplace business, but remains confident in B2B growth [33][34] Question: Intra-network flow pricing pilot [37] - The pilot is progressing well, with potential for more meaningful impact in 2025 [38][39] Question: Incremental margins and transaction costs [47] - The company expects transaction costs to increase in H2 2024 but has lowered its guidance for transaction costs as a percentage of revenue to 16.5% [47] Question: Interest rate sensitivity and customer deposits [49] - Payoneer is extending the duration of customer deposits to reduce interest rate sensitivity, with $1.2 billion already extended as of July [49][50] Question: Tech stack investments [51] - The company has increased the velocity of product releases and is investing in platform modernization, data capabilities, and AI-based tools [51][52]

Payoneer Global Inc. (PAYO) came out with quarterly earnings of $0.09 per share, beating the Zacks Consensus Estimate of $0.06 per share. This compares to earnings of $0.12 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 50%. A quarter ago, it was expected that this company would post earnings of $0.05 per share when it actually produced earnings of $0.08, delivering a surprise of 60%. Over the last four quarters, the company ...

Revenue Growth and Performance - Revenue excluding interest income grew 15% year-over-year to $173.7 million, while total revenue increased 16% to $239.5 million[2] - Revenue increased to $239.52 million in Q2 2024, up 15.9% from $206.73 million in Q2 2023[13] - Greater China region contributed $84.44 million in revenue, representing 35.3% of total revenue in Q2 2024[15] - Revenue recognized at a point in time increased to $170.75 million in Q2 2024, up 20.9% from $141.23 million in Q2 2023[14] - Interest income on customer balances grew to $65.82 million in Q2 2024, up 19.0% from $55.29 million in Q2 2023[14] Profitability and Adjusted EBITDA - Adjusted EBITDA rose 30% year-over-year to $72.8 million, reflecting improved profitability[2] - Adjusted EBITDA rose to $72.78 million in Q2 2024, up 30.1% from $55.97 million in Q2 2023[16] - Operating income increased to $46.31 million in Q2 2024, up 38.7% from $33.39 million in Q2 2023[13] Volume Growth and Customer Metrics - 22% volume growth year-over-year, with B2B volume increasing 40% to $2.5 billion, marketplace volume up 15% to $11.4 billion, and merchant services volume surging 192% to $119 million[5] - Active Ideal Customer Profiles (ICPs) grew 10% year-over-year to 547,000, with larger ICPs (over $10,000/month) increasing 7%[5] - SMB customer take rate increased 1 basis point year-over-year to 111 bps, driven by B2B volume growth[2] - Payoneer card spend grew 33% year-over-year to $1.2 billion, supported by new integrations with accounting platforms like Xero and QuickBooks[5] - Enterprise payouts volume increased 31% year-over-year to $4.7 billion, led by expansion in the travel vertical[5] Acquisitions and Strategic Investments - Payoneer acquired Skuad for $61 million in cash, with potential additional payments of up to $20 million, to expand into global workforce management services[4] Financial Position and Cash Flow - Customer funds increased 9% year-over-year to $6.0 billion as of June 30, 2024[5] - Cash and cash equivalents decreased to $575,730 thousand as of June 30, 2024, from $617,022 thousand as of December 31, 2023[19] - Customer funds decreased to $6,037,105 thousand as of June 30, 2024, from $6,390,526 thousand as of December 31, 2023[19] - Net cash provided by operating activities for the six months ended June 30, 2024, was $80,914 thousand, compared to $59,919 thousand for the same period in 2023[20] - Net cash used in investing activities for the six months ended June 30, 2024, was $665,298 thousand, compared to $63,453 thousand for the same period in 2023[20] - Net cash used in financing activities for the six months ended June 30, 2024, was $443,475 thousand, compared to $315,444 thousand for the same period in 2023[20] Net Income and Earnings - Net income decreased to $32.43 million in Q2 2024, down 28.8% from $45.55 million in Q2 2023[13] - Basic earnings per share decreased to $0.09 in Q2 2024 from $0.12 in Q2 2023[18] - Net income for the six months ended June 30, 2024, was $61,399 thousand, compared to $53,487 thousand for the same period in 2023[20] Expenses and Compensation - Research and development expenses slightly decreased to $27.58 million in Q2 2024 from $27.99 million in Q2 2023[13] - Stock-based compensation expenses decreased to $13.67 million in Q2 2024 from $16.17 million in Q2 2023[17] Assets, Liabilities, and Equity - Total assets decreased to $6,920,312 thousand as of June 30, 2024, from $7,283,119 thousand as of December 31, 2023[19] - Total liabilities decreased to $6,250,933 thousand as of June 30, 2024, from $6,618,846 thousand as of December 31, 2023[19] - Retained earnings (accumulated deficit) improved to $46,203 thousand as of June 30, 2024, from a deficit of $15,196 thousand as of December 31, 2023[19] - Common stock repurchased during the six months ended June 30, 2024, amounted to $98,654 thousand, compared to $17,125 thousand for the same period in 2023[20] Guidance and Future Projections - Payoneer raised 2024 guidance, projecting revenue of $920 million to $930 million and adjusted EBITDA of $225 million to $235 million[6]

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