OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Payoneer Global Inc. FORM 10-Q Table of Contents ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the quarterly period ended June 30, 2022 (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation) (Commission File Number) ...

○Payoneer Connecting Today's Borderless World Investor Presentation | May 2022 Disclaimers 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. Please see our SEC filings under "Payoneer Global Inc." for the most up to date information. Forward-Looking Statements Certain statements in this presentatio ...

Payoneer Global Inc. (NASDAQ:PAYO) Q1 2022 Earnings Conference Call May 12, 2022 5:00 PM ET Company Participants Scott Galit – Chief Executive Officer Michael Levine – Chief Financial Officer Conference Call Participants Robert Napoli – William Blair & Company Ashwin Shirvaikar – Citi Sanjay Sakhrani – Keefe, Bruyette & Woods, Inc. Josh Siegler – Cantor Fitzgerald Kyle Peterson – Needham & Company Andrew Hummel – WestPark Capital, Inc. Operator Good afternoon ladies and gentlemen. Thank you for standing by. ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Unaudited Q1 2022 financials report 36% revenue growth to $137.0 million and $20.2 million net income, driven by warrant gains [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20consolidated%20balance%20sheets%20%28Unaudited%29) Total assets increased to $5.31 billion from $5.08 billion, with liabilities at $4.79 billion and equity at $522.0 million Condensed Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $465,734 | $465,926 | | Customer funds | $4,630,553 | $4,401,254 | | Total current assets | $5,185,537 | $4,962,723 | | Total assets | $5,307,852 | $5,078,752 | | **Liabilities & Equity** | | | | Outstanding operating balances | $4,630,553 | $4,401,254 | | Total liabilities | $4,785,888 | $4,591,679 | | Total shareholders' equity | $521,964 | $487,073 | [Condensed Consolidated Statements of Income (Loss)](index=6&type=section&id=Condensed%20consolidated%20statements%20of%20income%20%28loss%29%20%28Unaudited%29) Q1 2022 revenues grew 36% to $137.0 million, resulting in a $20.2 million net income, primarily from warrant fair value gains Q1 2022 vs Q1 2021 Income Statement (in thousands, except per share data) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Revenues | $136,958 | $100,606 | | Total operating expenses | $143,301 | $101,755 | | Operating loss | $(6,343) | $(1,149) | | Gain from change in fair value of Warrants | $31,196 | $0 | | Net income (loss) | $20,211 | $(3,508) | | Diluted earnings (loss) per share | $0.06 | $(0.16) | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20consolidated%20statements%20of%20comprehensive%20income%20%28loss%29%20%28Unaudited%29) Q1 2022 comprehensive income was $20.6 million, a significant improvement from a $4.7 million loss in the prior year Comprehensive Income (Loss) (in thousands) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net income (loss) | $20,211 | $(3,508) | | Foreign currency translation adjustments | $390 | $(1,189) | | **Comprehensive income (loss)** | **$20,601** | **$(4,697)** | [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=8&type=section&id=Condensed%20consolidated%20statements%20of%20changes%20in%20redeemable%20preferred%20stock%2C%20redeemable%20convertible%20preferred%20stock%20and%20shareholders%27%20equity%20%28deficit%29%20%28Unaudited%29) Shareholders' equity increased to $522.0 million in Q1 2022, driven by net income and stock-based compensation - Shareholders' equity increased by **$34.9 million** during Q1 2022, from **$487.1 million** to **$522.0 million**[25](index=25&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20consolidated%20statements%20of%20cash%20flows%20%28Unaudited%29) Q1 2022 operating cash flow was $2.4 million, with investing activities providing $28.0 million and financing $233.6 million Summary of Cash Flows (in thousands) | Activity | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $2,372 | $(16,468) | | Net cash provided by (used in) investing activities | $27,953 | $(8,034) | | Net cash provided by financing activities | $233,611 | $2,430 | [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20condensed%20consolidated%20financial%20statements%20%28Unaudited%29) Notes detail accounting policies, Russia-Ukraine conflict impact (immaterial), CECL adoption, and revenue disaggregation by geography - The Russia-Ukraine conflict's impact on revenue was immaterial in Q1 2022. Russia, Belarus, and Ukraine combined accounted for slightly less than **10%** of revenue for the quarter[43](index=43&type=chunk) - The company early adopted the new CECL guidance for credit losses on financial instruments effective January 1, 2022, resulting in a cumulative effect adjustment to retained earnings[66](index=66&type=chunk) Revenue by Primary Geographical Market (in thousands) | Region | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Greater China | $43,041 | $39,614 | | United States | $19,782 | $8,053 | | All other countries | $74,135 | $52,939 | | **Total revenues** | **$136,958** | **$100,606** | - The company entered into a Warehouse Facility agreement with related party Viola Credit for external financing of its Capital Advance activity, with an initial committed amount of **$25 million**[77](index=77&type=chunk)[78](index=78&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q1 2022 revenue grew 36% to $137.0 million, with volume up 10% to $14.6 billion, while operating expenses increased 41% Q1 2022 vs Q1 2021 Operational Results (in thousands) | Metric | Q1 2022 | Q1 2021 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $136,958 | $100,606 | 36% | | Total operating expenses | $143,301 | $101,755 | 41% | | Operating loss | $(6,343) | $(1,149) | 452% | | Net income (loss) | $20,211 | $(3,508) | (676)% | - Revenue growth of **36%** was driven by increased acquisition of new customers and fast growth in several developing markets[132](index=132&type=chunk) - Operating expenses increased across the board, primarily due to higher employee compensation from increased headcount in R&D (**+56%**), Sales & Marketing (**+49%**), and G&A (**+72%**)[135](index=135&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) Key Metrics and Non-GAAP Measures (in millions) | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Volume | $14,620 | $13,341 | | Adjusted EBITDA | $10.4 | $7.8 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rate changes and significant foreign currency fluctuations, with potential material impact - Interest rate sensitivity on cash and cash equivalents is low due to the short-term nature of the instruments. A hypothetical **1%** change in rates on the Warehouse Facility debt would not have a material effect[174](index=174&type=chunk)[175](index=175&type=chunk) - The company has significant foreign currency exposure from its global operations. A hypothetical **10%** increase or decrease in exchange rates could have a material impact on financial results[176](index=176&type=chunk)[180](index=180&type=chunk) - The company is an emerging growth company under the JOBS Act and has elected to use the extended transition period for new accounting standards, but expects to lose this status at the end of fiscal year 2022[181](index=181&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2022, with no material changes to internal controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2022[184](index=184&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[185](index=185&type=chunk) [PART II - OTHER INFORMATION](index=34&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various litigation matters incidental to its business, as detailed in Note 8 of the financial statements - The company is involved in various litigation matters that arise in the ordinary course of business. For more details, refer to Note 8 (Commitment and Contingencies)[188](index=188&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the Annual Report on Form 10-K - As of the filing date, no material changes have occurred to the risk factors disclosed in the Annual Report on Form 10-K[190](index=190&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the period - None[191](index=191&type=chunk) [Item 3. Defaults upon Senior Securities](index=34&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) No defaults upon senior securities were reported for the period - None[192](index=192&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[193](index=193&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) No other information to report for the period - None[194](index=194&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) Exhibits include employment agreements and CEO/CFO certifications required by the Sarbanes-Oxley Act - Exhibits filed with the report include CEO and CFO certifications pursuant to Rules 13a-14, 15d-14, and Section 906 of the Sarbanes-Oxley Act[198](index=198&type=chunk)

Payoneer Global Inc. (NASDAQ:PAYO) Q4 2021 Earnings Conference Call March 3, 2022 4:30 PM ET Company Participants Scott Galit – Chief Executive Officer Michael Levine – Chief Financial Officer Conference Call Participants Keeler Patton – Cantor Fitzgerald Will Nance – Goldman Sachs Sam Salvas – Needham and Company Bob Napoli – William Blair Mike Grondahl – Northland Securities Ashwin Shirvaikar – Citi Andrew Hummel – WestPark Capital Operator Good afternoon, ladies and gentlemen, thank you for standing by. ...

Part I [Business Overview](index=4&type=section&id=Item%201.%20Business) Payoneer operates a global payment and commerce-enabling platform for digital businesses, facilitating cross-border transactions and offering diverse financial services globally - Payoneer, founded in 2005, is a global payment and commerce-enabling platform democratizing access to global commerce for SMBs[17](index=17&type=chunk) Fiscal Year 2021 Performance Highlights | Metric | Value | | :--- | :--- | | Revenue | $473.4 million | | Revenue Growth (YoY) | 37% | | Supported Trade Corridors | Over 7,000 | | Countries and Territories Served | Over 190 | | Average New Customer Applications per Month | Over 300,000 | - The company's growth strategy focuses on leveraging marketplace ecosystems and B2B AP/AR, expanding partnerships, extending product offerings, and pursuing strategic M&A[65](index=65&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk) - Payoneer is regulated as a non-bank financial institution in key markets including the United States, Europe, Hong Kong, Japan, Australia, and India[39](index=39&type=chunk) - As of December 31, 2021, Payoneer's workforce comprised **1,871 employees** across 32 countries and 58 nationalities[91](index=91&type=chunk) [Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business, regulatory, operational, and financial risks, including intense competition, customer concentration, evolving global regulations, cybersecurity threats, and a history of net losses - A significant concentration risk exists with Amazon, which generated an estimated **24% of Payoneer's 2021 revenues**[125](index=125&type=chunk) - The company faces substantial competition from traditional banks, global digital platforms, and merchant service providers[117](index=117&type=chunk)[119](index=119&type=chunk) - Approximately **24% of 2021 revenue** was generated from Greater China, exposing the company to local economic, political, and regulatory changes, including ongoing license application processes[210](index=210&type=chunk)[211](index=211&type=chunk) - The business is subject to extensive global regulations, including money transmission, data protection, and anti-money laundering laws, with non-compliance potentially leading to significant fines and penalties[195](index=195&type=chunk)[216](index=216&type=chunk)[219](index=219&type=chunk) - The company has a history of net losses, including **$34.0 million in 2021**, **$23.7 million in 2020**, and **$0.6 million in 2019**, with anticipated increasing future expenses[126](index=126&type=chunk) - Cybersecurity breaches, system failures, and unauthorized data disclosure pose significant risks, potentially leading to liability, reputational damage, and service disruptions[162](index=162&type=chunk)[164](index=164&type=chunk) [Unresolved Staff Comments](index=42&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[266](index=266&type=chunk) [Properties](index=42&type=section&id=Item%202.%20Properties) Payoneer's principal executive office is in New York City, with all global office spaces leased and deemed adequate for immediate needs - The company's principal executive office is in New York City, with additional leased offices in major global metropolitan areas[267](index=267&type=chunk) [Legal Proceedings](index=42&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently party to any legal proceedings expected to significantly affect its financial position or profitability - Payoneer is not presently party to any legal proceedings expected to significantly impact its financial position or profitability[268](index=268&type=chunk) [Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[269](index=269&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=43&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Payoneer's common stock and warrants trade on Nasdaq, with **353 holders of record** as of February 25, 2022, no cash dividends paid, and recent share repurchases for tax liabilities - The company's common stock and warrants trade on The Nasdaq Global Market under symbols \"PAYO\" and \"PAYOW\"[272](index=272&type=chunk) - As of February 25, 2022, there were **353 holders of record** for the company's common stock[273](index=273&type=chunk) - The company has not paid any cash dividends on its common stock to date[274](index=274&type=chunk) Issuer Purchases of Equity Securities (Q4 2021) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Oct 2021 | N/A | N/A | | Nov 2021 | N/A | N/A | | Dec 2021 | 279,596 | $6.46 | | **Total** | **279,596** | **$6.46** | [Reserved](index=44&type=section&id=Item%206.%20Reserved) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2021, Payoneer's revenue grew **37% to $473.4 million** driven by increased transaction volume, though net loss widened to **$34.0 million** due to higher operating expenses following its June 2021 public listing and reorganization Key Financial Performance (2021 vs. 2020) | Metric (in thousands) | 2021 | 2020 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $473,403 | $345,592 | $127,811 | 37% | | **Transaction costs** | $101,476 | $97,040 | $4,436 | 5% | | **Operating loss** | ($30,209) | ($17,295) | ($12,914) | 75% | | **Net loss** | ($33,987) | ($23,746) | ($10,241) | 43% | Transaction Volume Trend (2019-2021) | Year | Volume (in billions) | YoY Growth | | :--- | :--- | :--- | | 2019 | $28.9 | 35% | | 2020 | $44.4 | 53% | | 2021 | $56.7 | 28% | Adjusted EBITDA Reconciliation (in thousands) | Metric | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Net loss** | $(33,987) | $(23,746) | $(625) | | Depreciation and amortization | 17,997 | 17,095 | 10,341 | | Stock based compensation | 37,012 | 10,892 | 9,535 | | Reorganization related expenses | 5,087 | — | — | | Gain from change in fair value of Warrants | (11,824) | — | — | | Other adjustments | (1,684) | (4,161) | 1,179 | | **Adjusted EBITDA** | **$28,166** | **$6,388** | **$24,615** | - The company completed its reorganization with FTAC Olympus Acquisition Corp. on June 25, 2021, becoming publicly traded and raising **$874.5 million** in gross proceeds[294](index=294&type=chunk)[354](index=354&type=chunk) - As of December 31, 2021, the company held **$465.9 million** in cash and cash equivalents, deemed sufficient for at least the next twelve months of operating and capital expenditure requirements[358](index=358&type=chunk)[359](index=359&type=chunk) [Quantitative and Qualitative Disclosures About Market Risks](index=61&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) Payoneer is exposed to market risks, primarily from interest rate changes affecting borrowings and foreign currency fluctuations impacting global operations and financial results - The company is exposed to interest rate risk, with floating-rate borrowings under its Warehouse Facility, where a hypothetical **1% change** could materially affect financial results[416](index=416&type=chunk) - Payoneer faces foreign currency risk from global operations, with expenses and balances in various currencies subject to exchange rate fluctuations despite most revenue being in U.S. dollars[417](index=417&type=chunk)[418](index=418&type=chunk) [Financial Statements and Supplementary Data](index=63&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for Payoneer Global Inc. for fiscal years 2019-2021, including balance sheets, statements of loss, comprehensive income, shareholders' equity, and cash flows, reflecting the 2021 reverse recapitalization Consolidated Balance Sheet Data (in thousands) | Account | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $4,962,723 | $3,570,459 | | **Total Assets** | $5,078,752 | $3,669,684 | | **Total Current Liabilities** | $4,497,828 | $3,440,922 | | **Total Liabilities** | $4,591,679 | $3,479,850 | | **Total Shareholders' Equity** | $487,073 | $24,299 | Consolidated Statement of Loss Data (in thousands) | Account | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Revenues** | $473,403 | $345,592 | $317,750 | | **Operating loss** | $(30,209) | $(17,295) | $3,641 | | **Net loss** | $(33,987) | $(23,746) | $(625) | | **Net loss per share (Basic & Diluted)** | $(0.33) | $(0.80) | $(0.33) | Consolidated Statement of Cash Flows Data (in thousands) | Account | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Net cash from operating activities** | $20,015 | $9,526 | $(14,312) | | **Net cash from investing activities** | $10,156 | $(66,854) | $(20,581) | | **Net cash from financing activities** | $1,396,195 | $1,673,464 | $353,743 | Revenue by Geographic Market (in thousands) | Region | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Greater China | $160,583 | $127,307 | $103,531 | | United States | $55,941 | $38,729 | $69,016 | | All other countries | $256,879 | $179,556 | $145,203 | | **Total revenues** | **$473,403** | **$345,592** | **$317,750** | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=116&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting principles, financial disclosure, or auditing scope - None[702](index=702&type=chunk) [Controls and Procedures](index=116&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of December 31, 2021, with no material changes to internal control over financial reporting, and no management assessment or auditor attestation report is included as permitted for newly public companies - The CEO and CFO concluded the company's disclosure controls and procedures were effective as of December 31, 2021[704](index=704&type=chunk) - The annual report does not include a management report or auditor attestation on internal control over financial reporting, as permitted for newly public companies[706](index=706&type=chunk) Part III [Items 10-14](index=117&type=section&id=Items%2010-14) Information for Items 10 through 14, covering directors, executive officers, corporate governance, compensation, security ownership, and related transactions, is incorporated by reference from the forthcoming 2022 Proxy Statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the forthcoming 2022 Proxy Statement[711](index=711&type=chunk)[712](index=712&type=chunk)[713](index=713&type=chunk)[714](index=714&type=chunk)[715](index=715&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=117&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, financial statement schedules, and exhibits filed as part of the Form 10-K report, including an exhibit index and noting the omission of certain schedules - This section contains the index to the consolidated financial statements and the list of exhibits filed with the Form 10-K[717](index=717&type=chunk)[718](index=718&type=chunk) [Form 10-K Summary](index=119&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates there is no Form 10-K summary - None[723](index=723&type=chunk)

Payoneer Global Inc. (NASDAQ:PAYO) Q3 2021 Earnings Conference Call November 10, 2021 5:30 PM ET Company Participants Ignatius Njoku - Vice President of Investor Relations Scott Galit - Chief Executive Officer Michael Levine - Chief Financial Officer Conference Call Participants Sam Salvas - Needham & Company Sanjay Sakhrani - KBW Josh Siegler - Cantor Fitzgerald Robert Napoli - William Blair Ashwin Shirvaikar - Citigroup Operator Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to P ...

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed consolidated financial statements for Q3 and nine months ended September 30, 2021, reflecting the Reverse Recapitalization impact [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20consolidated%20balance%20sheets) Balance sheet as of September 30, 2021, shows significant increases in cash, total assets, and shareholders' equity due to the Reverse Recapitalization Balance Sheet Comparison (in thousands) | Metric | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $448,955 | $102,988 | | **Total assets** | $4,360,204 | $3,669,684 | | **Total liabilities** | $3,868,280 | $3,479,850 | | **Warrant liability** | $48,304 | $0 | | **Total shareholders' equity** | $491,924 | $24,299 | [Condensed Consolidated Statements of Income (Loss)](index=7&type=section&id=Condensed%20consolidated%20statements%20of%20income%20(loss)) Q3 2021 revenues grew 35% to $122.7 million, but net income decreased due to a 44% rise in operating expenses Income Statement Summary (in thousands) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $122,651 | $90,537 | $334,184 | $250,885 | | **Operating income (loss)** | $(6,506) | $941 | $(26,016) | $(7,871) | | **Gain from change in fair value of Warrants** | $11,321 | $0 | $23,397 | $0 | | **Net income (loss)** | $837 | $1,608 | $(15,085) | $(12,531) | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20consolidated%20statements%20of%20cash%20flows) Nine-month cash flow shows decreased operating cash, significant financing inflow from Reverse Recapitalization, and $4.5 million used in investing Cash Flow Summary - Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $10,788 | $18,873 | | **Net cash provided by (used in) investing activities** | $(4,539) | $(45,880) | | **Net cash provided by financing activities** | $686,881 | $960,587 | - Net contributions from the Reverse Recapitalization and PIPE financing totaled **$388.8 million**[41](index=41&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20the%20condensed%20consolidated%20financial%20statements) Notes detail significant events like the Reverse Recapitalization, OFAC settlement, and a $2.25 million reserve for funds at a Mexican bank - On June 25, 2021, the company consummated its Reverse Recapitalization with FTOC, becoming a publicly traded company, Payoneer Global Inc. The transaction was accounted for as a reverse recapitalization, with Legacy Payoneer as the accounting acquirer[47](index=47&type=chunk)[50](index=50&type=chunk) - The company reached a final settlement with the U.S. Office of Foreign Assets Control (OFAC) for **$1.4 million** regarding payments to sanctioned regions, which was paid prior to September 30, 2021[128](index=128&type=chunk) - The company reserved **$2.25 million** for potential losses after a banking partner in Mexico had its license revoked by regulators, rendering funds inaccessible[134](index=134&type=chunk) - The company terminated its Loan and Security Agreement on September 14, 2021, and repaid the outstanding balance of **$40.0 million** during the nine months ended September 30, 2021[124](index=124&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 2021 operational performance, highlighting 35% revenue growth, an operating loss due to higher expenses, and strengthened liquidity post-Reverse Recapitalization [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Q3 2021 revenues increased 35% to $122.7 million, but a 44% rise in operating expenses led to a $6.5 million operating loss Q3 2021 vs Q3 2020 Performance (in thousands) | Metric | Q3 2021 | Q3 2020 | % Change | | :--- | :--- | :--- | :--- | | **Revenues** | $122,651 | $90,537 | 35% | | **Total operating expenses** | $129,157 | $89,596 | 44% | | **Operating income (loss)** | $(6,506) | $941 | (791)% | - Transaction costs remained relatively flat, increasing only **0.6%** in Q3 2021 despite a **16% increase in volume**, due to improved commercial terms, platform optimizations, and payment network incentives[193](index=193&type=chunk) - The increase in operating expenses across R&D, Sales & Marketing, and G&A was primarily driven by higher employee compensation and benefits resulting from increased headcount to support business growth[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity significantly enhanced by $874.5 million from Reverse Recapitalization, resulting in $449 million cash and no debt as of September 30, 2021 - The company raised gross proceeds of **$874.5 million** from the Reverse Recapitalization and PIPE financing[206](index=206&type=chunk) - As of September 30, 2021, the company held **$449 million** in cash and cash equivalents and had no outstanding borrowings[212](index=212&type=chunk) - On October 28, 2021, the company entered into a new Receivables Loan and Security Agreement to provide external financing for its capital advance activities, with an initial borrowing commitment of **$25 million**[209](index=209&type=chunk)[211](index=211&type=chunk) [Key Metrics and Non-GAAP Financial Measures](index=46&type=section&id=Key%20Metrics%20and%20Non-GAAP%20Financial%20Measures) Q3 2021 Volume grew **16%** to **$13.6 billion**, while Adjusted EBITDA more than doubled to **$6.1 million** from Q3 2020 Volume Growth (in millions) | Period | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | **Three months ended Sep 30** | $13,615 | $11,716 | 16% | | **Nine months ended Sep 30** | $40,535 | $30,531 | 33% | Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | **Net income (loss)** | $837 | $1,608 | | **Stock based compensation expenses** | $8,590 | $3,023 | | **Gain from change in fair value of Warrants** | $(11,321) | $0 | | **Other adjustments** | $8,223 | $3,745 | | **Adjusted EBITDA** | $6,129 | $2,576 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are foreign currency fluctuations and interest rate changes, with a hypothetical 10% exchange rate change potentially having a material impact - The company is exposed to market risks from interest rate changes and foreign currency fluctuations[237](index=237&type=chunk) - Foreign currency exposure exists for currencies in which it operates and serves customers. A hypothetical **10%** change in exchange rates could materially impact financial results[239](index=239&type=chunk) - As an emerging growth company under the JOBS Act, Payoneer can delay the adoption of new or revised accounting standards applicable to public companies[240](index=240&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2021[243](index=243&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[244](index=244&type=chunk) [PART II - OTHER INFORMATION](index=50&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The company is periodically involved in various litigation matters incidental to its business, with further details provided in Note 11 of the financial statements - The company is party to various litigation matters incidental to its business, with further details provided in Note 11 of the financial statements[246](index=246&type=chunk) [Item 1A. Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Registration Statement dated August 6, 2021, have occurred - As of the filing date, there have been no material changes to the risk factors previously disclosed in the company's Registration Statement[248](index=248&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2021, the company issued unregistered securities, including 409,988 restricted stock units/options and 218,798 common shares for the Optile acquisition - A total of **409,988** restricted stock units and options were settled or exercised during the quarter pursuant to the company's equity incentive plans[249](index=249&type=chunk) - The company issued **218,798** shares of common stock as deferred consideration related to the Optile acquisition from 2020[251](index=251&type=chunk) [Other Information Items](index=50&type=section&id=Items%203%2C%204%2C%205%2C%20and%206) The company reported no defaults on senior securities, confirmed mine safety disclosures are not applicable, and listed exhibits filed with the report - The company reported no defaults on senior securities[253](index=253&type=chunk) - Mine safety disclosures are not applicable to the company[254](index=254&type=chunk)

Financial Data and Key Metrics Changes - The company reported a record revenue of $111 million for Q2 2021, representing a 42% year-over-year increase, exceeding internal targets [26][49] - Processed volume reached $13.6 billion, reflecting a 29% year-over-year growth [26][49] - The two-year compounded annual growth rate (CAGR) from 2019 to 2021 was 45%, consistent with the previous quarter [26][50] - The take rate improved to 82 basis points, up from 75 basis points in Q2 2020 [27][52] - Transaction costs were 26% of revenues, down from 30% in the same quarter last year, indicating improved efficiency [28][53] Business Line Data and Key Metrics Changes - The B2B accounts payable and receivable (AP/AR) segment is growing faster than the overall business, contributing positively to growth [20][105] - New services, including working capital and MasterCard Virtual Commercial Cards, exceeded targets for the first half of the year [38][105] Market Data and Key Metrics Changes - The company noted a decline in volume expectations due to changes in consumer behavior post-COVID and challenges in global logistics [31][35] - The introduction of new VAT requirements in Europe has impacted operations, particularly for cross-border sellers [35] Company Strategy and Development Direction - The company aims to leverage strong market momentum to grow marketplace ecosystems and B2B AP/AR offerings [19][20] - Plans to expand the Payoneer platform ecosystem through partnerships with banks and mobile wallets [21] - Continued investment in new services and M&A strategy to enhance capabilities in e-commerce enablement and B2B payments [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth in digital commerce despite short-term challenges [25][41] - The company raised its full-year revenue guidance to $442 million to $448 million, reflecting a year-over-year growth of 28% to 30% [61] - Management acknowledged the impact of COVID-19 on short-term performance but remains confident in the company's growth trajectory [31][35] Other Important Information - The company added a record number of new customers in the quarter, maintaining a net volume retention rate of over 100% [36] - Significant investments were made in R&D and product teams to support growth and enhance service offerings [56][60] Q&A Session Summary Question: What trends might rebound sooner? - Management indicated that e-commerce is likely to rebound faster than international travel, with ongoing positive trends in customer sign-ups [72][76] Question: What drove the decline in concentration in China? - The company noted stronger growth outside of China, with e-commerce showing some weakness impacting the geographic mix [83][86] Question: How is the M&A pipeline looking? - Management sees both high valuations and good opportunities in the market, focusing on diverse targets for potential acquisitions [87][90] Question: How does the company view growth between new customers and existing base? - The company is experiencing strong new customer acquisition while also expanding services for existing customers, indicating a balanced growth strategy [94][98] Question: What is driving the reduction in transaction costs? - Management highlighted efficiency and business mix as key drivers for improved transaction costs, contributing to variable profitability [100][102]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Payoneer Global Inc. (Exact name of registrant as specified in its charter) Delaware 001-40547 86-1778671 (State or other jurisdiction of incorpora ...