Paysafe (PSFE) - 2024 Q4 - Annual Report

Financial Performance - Net cash flows provided by operating activities increased by $19,782 to an inflow of $253,804 for the year ended December 31, 2024 [467]. - Net cash used in investing activities decreased by $26,857 to $108,380 for the year ended December 31, 2024 [470]. - Net cash used in financing activities decreased by $490,229 to $280,799 for the year ended December 31, 2024 [471]. - The Company had $216,683 in cash and cash equivalents as of December 31, 2024, compared to $202,322 in 2023 [456]. Debt and Borrowing - The total principal amount of external borrowings was $2,390,689 as of December 31, 2024, down from $2,519,857 in 2023 [453]. - The Company had $214,287 available under its $305,000 Revolving Credit Facility as of December 31, 2024 [456]. - The Company is required to maintain a first lien debt ratio below 7.5x a Last Twelve Months EBITDA measure [454]. Interest Rate and Currency Risk - As of December 31, 2024, a 100 basis points increase in interest rates would result in a $12.6 million unfavorable impact on net loss [442]. - The Company actively manages interest rate risk through interest rate swaps to convert floating rates to fixed rates [441]. - A 10% strengthening of the U.S. dollar would decrease the Company's net assets by $21.5 million [445]. Tax and Deferred Assets - The company has net deferred tax assets of $19,347 in the UK as of December 31, 2024, with a likelihood of realizing these assets depending on future taxable income [496]. Impairments and Goodwill - Intangible asset impairments recognized for the years ended December 31, 2024, 2023, and 2022 were $823, $1,254, and $5,036 respectively, indicating potential future impairments due to reduced earnings or loss of key customer relationships [504]. - No indicators of impairment were identified for goodwill during the year ended December 31, 2024, with the estimated fair value of each reporting unit exceeding its carrying value [501]. - The company regularly reviews finite-lived intangible assets for impairment, with complex assumptions affecting valuations [503]. Credit Losses and Legal Liabilities - The allowance for credit losses has declined, reflecting improved conditions, although significant judgment is required in estimating future credit losses [493]. - The company has exposure to credit losses for financial assets, with estimates based on historical data and current conditions [492]. - The company maintains liabilities for legal actions that are probable and can be reasonably estimated, indicating ongoing litigation risks [505]. Revenue Recognition and Acquisitions - Revenue recognition involves significant judgments, particularly in determining principal-agent considerations for payment processing services [487]. - The company recognizes contingent consideration payables associated with acquisitions, which are remeasured each reporting period based on financial performance targets [480]. - The company did not complete any business combinations in the current year, which may impact future growth strategies [486].