Payoneer (PAYO) - 2025 Q1 - Quarterly Results

Payoneer First Quarter 2025 Financial Results Payoneer's Q1 2025 results show revenue growth and profitability, with a suspended 2025 outlook Financial & Business Highlights Payoneer's Q1 2025 highlights include 8% revenue growth driven by volume and take rate expansion, and strategic achievements Q1 2025 Financial Highlights Key financial metrics for Q1 2025 show revenue growth excluding interest income, but a decrease in net income Q1 2025 Key Financial Metrics | ($ in millions) | 1Q 2024 | 1Q 2025 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue ex. interest income | $162.9 | $188.6 | 16% | | Interest income | $65.3 | $58.0 | (11)% | | Revenue | $228.2 | $246.6 | 8% | | Net income | $29.0 | $20.6 | (29)% | | Adjusted EBITDA | $65.2 | $65.4 | 0% | | Volume ($ in billions) | $18.5 | $19.7 | 7% | | Active ICPs ('000s) | 530 | 556 | 5% | - Revenue excluding interest income grew 16% year-over-year, while total revenue grew 8%. Net income decreased by 29% YoY to $20.6 million[1][2] - The take rate for SMB customers increased by 11 bps YoY to 119 bps, contributing to stronger revenue performance relative to volume[2][3] Q1 2025 Business Highlights Business highlights include strong ARPU growth, increased card usage, and a strategic acquisition in China - Average Revenue Per User (ARPU) excluding interest income grew 22%, marking the seventh consecutive quarter of acceleration[6] SMB Customer Revenue Growth (YoY) | SMB Segment | Q1 2025 Revenue | YoY Growth | | :--- | :--- | :--- | | SMBs on marketplaces | $110 million | 8% | | B2B SMBs | $52 million | 37% | | Merchant Services (Checkout) | $7 million | 96% | - Spend on Payoneer cards increased 29% YoY to $1.4 billion[12] - Customer funds grew 11% YoY to $6.6 billion as of March 31, 2025[12] - In April 2025, Payoneer completed the acquisition of Easylink Payment Co., Ltd., a licensed China-based payment service provider, to strengthen its regulatory infrastructure and service for Chinese customers[4][12] - The company repurchased $17 million of shares at an average price of $9.04, a slowdown from the $51 million repurchased in the prior year period[12] 2025 Outlook Payoneer suspended its full-year 2025 guidance due to uncertain global macroeconomic and trade conditions - Payoneer has suspended its full-year 2025 guidance due to macroeconomic uncertainty[7][9] - The company faces substantial risks from the uncertain global macro and trade environment, which could negatively impact the cross-border businesses it serves[9] - Management remains focused on supporting customers and positioning the company to capture new opportunities that may arise from shifts in global trade and supply chains[10] Consolidated Financial Statements Consolidated financial statements for Q1 2025 detail revenues, net income, balance sheet, and cash flow Consolidated Statements of Comprehensive Income The comprehensive income statement for Q1 2025 details total revenues and net income Consolidated Statements of Comprehensive Income (Unaudited) | (U.S. dollars in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $246,617 | $228,183 | | Total operating expenses | $217,298 | $189,807 | | Operating income | $29,319 | $38,376 | | Income before income taxes | $27,769 | $42,884 | | Net income | $20,577 | $28,974 | | Comprehensive income | $29,327 | $29,001 | - Operating expenses increased to $217.3 million from $189.8 million YoY, driven by increases across all categories, including R&D, Sales & Marketing, and G&A[20] Disaggregation of Revenue Revenue disaggregation details sources from customer contracts, interest income, and regional markets Revenue by Source (Unaudited) | (U.S. dollars in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Revenue from contracts with customers | $186,263 | $160,458 | | Interest income on customer balances | $57,972 | $65,268 | | Total revenues | $246,617 | $228,183 | Revenue by Primary Regional Market (Unaudited) | (U.S. dollars in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Greater China | $84,896 | $81,358 | | Europe, Middle East, and Africa | $58,893 | $59,163 | | Asia-Pacific | $51,260 | $41,582 | | Latin America | $27,873 | $23,070 | | North America | $23,695 | $23,010 | | Total revenues | $246,617 | $228,183 | - The Asia-Pacific region showed the strongest YoY revenue growth at 23.3%, followed by Latin America at 20.8%[23] Reconciliation of Net Income to Adjusted EBITDA This section reconciles net income to Adjusted EBITDA, detailing various non-GAAP adjustments Reconciliation of Net Income to Adjusted EBITDA (Unaudited) | (U.S. dollars in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net income | $20,577 | $28,974 | | Depreciation and amortization | $14,390 | $9,408 | | Income taxes | $7,192 | $13,910 | | Other financial expense (income), net | $1,550 | $(2,747) | | Stock based compensation expenses | $18,755 | $15,077 | | M&A related expenses | $337 | $2,375 | | Restructuring charges | $2,630 | — | | Adjusted EBITDA | $65,431 | $65,236 | - Adjusted EBITDA remained flat YoY at approximately $65.4 million. Key adjustments from net income included stock-based compensation ($18.8 million), depreciation & amortization ($14.4 million), and income taxes ($7.2 million). A new restructuring charge of $2.6 million was recorded in Q1 2025[26] Earnings Per Share Earnings per share for Q1 2025 show a decrease in both basic and diluted EPS YoY Earnings Per Share (Unaudited) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Basic EPS | $0.06 | $0.08 | | Diluted EPS | $0.05 | $0.08 | - Diluted earnings per share decreased to $0.05 in Q1 2025 from $0.08 in Q1 2024[28] Consolidated Balance Sheets The balance sheet highlights total assets, customer funds, and shareholders' equity as of March 31, 2025 Consolidated Balance Sheet Highlights (Unaudited) | (U.S. dollars in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $524,150 | $497,467 | | Customer funds | $6,578,390 | $6,964,153 | | Total assets | $7,550,162 | $7,930,380 | | Outstanding operating balances | $6,578,390 | $6,964,153 | | Total liabilities | $6,799,431 | $7,205,590 | | Total shareholders' equity | $750,731 | $724,790 | - Total assets decreased from $7.93 billion at year-end 2024 to $7.55 billion at the end of Q1 2025, primarily due to a decrease in customer funds and outstanding operating balances[30] - Shareholders' equity increased to $750.7 million from $724.8 million at the end of 2024, driven by net income and other comprehensive income, partially offset by share repurchases[30] Consolidated Statements of Cash Flows Cash flow statements detail operating, investing, and financing activities for the first quarter of 2025 Consolidated Cash Flow Highlights (Unaudited) | (U.S. dollars in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $53,716 | $39,510 | | Net cash used in investing activities | $(47,986) | $(114,147) | | Net cash used in financing activities | $(402,446) | $(521,113) | - Cash flow from operating activities was a net inflow of $53.7 million, an improvement from $39.5 million in the prior year period[32] - Net cash used in financing activities was $402.4 million, primarily driven by a $385.8 million decrease in outstanding operating balances and $17.8 million in common stock repurchases[32] Other Information This section provides corporate information, forward-looking statements, and non-GAAP financial measure definitions About Payoneer Payoneer's mission is to empower global entrepreneurs and businesses in the digital economy - Payoneer's mission is to enable entrepreneurs and businesses anywhere to participate and succeed in the digital global economy by simplifying cross-border commerce[11] Forward-Looking Statements This section outlines the risks and uncertainties associated with forward-looking statements in the report - The report contains forward-looking statements subject to risks and uncertainties, including geopolitical events, changes in laws or regulations, and shifts in global trade policies[13] Non-GAAP Financial Measures This section defines and explains the use of non-GAAP financial measures like Adjusted EBITDA - The company uses non-GAAP measures like Adjusted EBITDA for performance comparison. These measures are not prepared in accordance with GAAP and may not be comparable to those of other companies[14] - Adjusted EBITDA is defined as net income adjusted to exclude items such as M&A expenses, stock-based compensation, restructuring charges, certain financial income/expenses, taxes, and depreciation & amortization[15]