Paysafe (PSFE) - 2024 Q3 - Quarterly Report

Financial Performance - Revenue for Q3 2024 was $427.1 million, a 7.0$396.4 million in Q3 2023[14] - Net loss for Q3 2024 was $13.0 million, compared to a net loss of$2.5 million in Q3 2023, reflecting a significant increase in losses[14] - Operating income for the nine months ended September 30, 2024, was $103.8 million, down from$112.4 million in the same period of 2023, indicating a decline of 7.0%[14] - The company reported a comprehensive income of $5.1 million for Q3 2024, compared to a comprehensive loss of$11.4 million in Q3 2023[14] - For the nine months ended September 30, 2024, the net loss was $11,351 thousand, compared to a net loss of$8,122 thousand for the same period in 2023, representing a 39.5% increase in losses[23] - For the three months ended September 30, 2024, the company reported a net loss of $12,977,000, compared to a net loss of$2,549,000 for the same period in 2023, resulting in a basic and diluted net loss per share of $0.21[46] - Adjusted EBITDA for the three months ended September 30, 2024 was$117,787 million, compared to $116,076 million for the same period in 2023, reflecting a slight increase[121] - Adjusted EBITDA increased by$11,787, or 3.5%, to $348,709 for the nine months ended September 30, 2024[189] Assets and Liabilities - Total assets decreased to$4.92 billion as of September 30, 2024, from $5.23 billion at the end of 2023, a reduction of approximately 5.8$4.04 billion from $4.34 billion, a decline of 6.7$877.0 million, slightly down from $883.3 million at the end of 2023[17] - The company has a total debt of$1,723,000,000, which includes a $305,000,000 revolving credit facility and a$1,018,000,000 senior secured USD first lien term loan facility[62] - As of September 30, 2024, total lease liabilities amounted to $42,317 million, with undiscounted cash flow lease payments totaling$52,060 million[114] Cash Flow and Expenses - Cash and cash equivalents increased to $241.4 million from$202.3 million, representing a growth of 19.3%[17] - Cash flows provided by operating activities for the nine months ended September 30, 2024, were $194,909 thousand, up from$172,430 thousand in 2023, indicating an increase of 13.0%[23] - The company reported a depreciation and amortization expense of $208,006 thousand for the nine months ended September 30, 2024, compared to$197,046 thousand in 2023, an increase of 5.6%[23] - Selling, general and administrative expenses increased by $22,712, or 18.7$143,907 for the three months ended September 30, 2024, from $121,195 for the same period in 2023[166] - Cost of services (excluding depreciation and amortization) increased by$14,022, or 8.5%, to $178,099 for the three months ended September 30, 2024, from$164,077 for the same period in 2023[165] Segment Performance - Revenue from external customers in the Merchant Solutions segment was $235,534 million for the three months ended September 30, 2024, up from$213,106 million in 2023, indicating a growth of 10.5%[119] - Digital Wallets segment revenue for the three months ended September 30, 2024 was $183,397 million, an increase from$172,317 million in the same period of 2023, representing a growth of 6.9%[119] - Merchant Solutions segment revenue grew by $76,452, or 11.7$27,678, or 5.1%, driven by merchants onboarded in the prior year[177] Shareholder Activities - The company repurchased 1,675,815 shares for a total amount of $25 million during the nine months ended September 30, 2024, under its share repurchase program[147] - The company authorized a share repurchase program in November 2023, allowing for the repurchase of up to$50,000 of common shares[95] - Share-based compensation increased to $35,015 thousand for the nine months ended September 30, 2024, compared to$23,061 thousand in 2023, reflecting a 52.0% increase[23] - Share-based compensation expense for the three months ended September 30, 2024, was $12,690, an increase of 156.3$4,938 in the same period of 2023[82] Regulatory and Market Environment - The company is subject to complex regulatory requirements and significant competition, which may impact future performance[131] - Recent leadership changes include the appointment of John Crawford as Chief Financial Officer on September 3, 2024[145] Other Financial Metrics - The effective tax rate for the three months ended September 30, 2024, was 18.5%, while for the nine months it was 533.1%, significantly impacted by U.S. Base Erosion and Anti-Abuse Tax charges[49] - The company incurred impairment expenses on goodwill and intangible assets amounting to $0.1 million in Q3 2024, compared to no such expenses in Q3 2023[14] - The company reported a foreign currency translation gain of$18.1 million in Q3 2024, compared to a loss of $8.9 million in Q3 2023[14] - The company recorded a litigation provision of$1,203 as of September 30, 2024, down from $2,200 as of December 31, 2023, due to a settlement payment[104]