Payoneer (US:PAYO)2022-11-08 16:00Revenue Growth - Revenues for the three months ended September 30, 2022, were $158.9 million, a 30% increase from $122.7 million in the prior year, and for the nine months, revenues were $444.1 million, up 33% from $334.2 million[132]. - Payoneer processed $44.4 billion in volume during the nine months ended September 30, 2022, compared to $40.5 billion in the same period of 2021, reflecting a strong growth trajectory[122]. - Volume grew by 11% and 9% for the three and nine months ended September 30, 2022, reaching $15.1 billion and $44.4 billion respectively, driven by customer acquisition and growth in digital commerce[174]. Expenses - Research and development expenses increased by 47% to $29.6 million for the three months ended September 30, 2022, and by 49% to $82.1 million for the nine months, driven by increased headcount and related costs[140][141]. - Sales and marketing expenses rose by 39% to $41.1 million for the three months ended September 30, 2022, and by 40% to $112.4 million for the nine months, primarily due to higher employee compensation and marketing program spending[142][143]. - General and administrative expenses increased by $5.7 million, or 36%, to $21.7 million for the three months ended September 30, 2022, driven by higher employee-related expenses and consultant costs[145]. - For the nine months ended September 30, 2022, general and administrative expenses rose by $15.4 million, or 34%, totaling $60.0 million, primarily due to increased compensation and consultant expenses[146]. - Depreciation and amortization expenses were $5.9 million and $15.5 million for the three and nine months ended September 30, 2022, reflecting increases of 33% and 15% respectively[147]. - Transaction costs for the three months ended September 30, 2022, were $28.0 million, a 13% increase, while for the nine months, they were $79.8 million, up 9%, reflecting a 9% increase in transaction volume[136][137]. Operating Performance - Operating loss improved to $(5.1) million for the three months ended September 30, 2022, compared to $(6.5) million in the prior year, and $(13.7) million for the nine months, a significant improvement from $(26.0) million[132]. - Adjusted EBITDA for the three months ended September 30, 2022, was $12.7 million, compared to $6.1 million in the prior year, while for the nine months it was $37.9 million versus $14.6 million[178]. Cash Flow and Financial Position - Net cash provided by operating activities was $44.3 million for the nine months ended September 30, 2022, an increase of $33.5 million compared to the prior year[165]. - Net cash used in investing activities was $13.9 million for the nine months ended September 30, 2022, an increase of $9.4 million compared to the prior year, primarily due to purchases of property and equipment[170]. - Net cash provided by financing activities was $655.7 million for the nine months ended September 30, 2022, a decrease of $31.2 million compared to the prior year, mainly due to the absence of inflow from the Reverse Recapitalization[171]. - As of September 30, 2022, the company had $507.9 million in cash and cash equivalents, which is expected to meet operating and capital expenditure requirements for at least the next twelve months[161]. Market and Economic Factors - The geopolitical conflict between Russia and Ukraine had a limited impact on revenues, with combined revenues from these regions accounting for less than 10% of total revenue[125]. - The COVID-19 pandemic has shifted buying patterns towards e-commerce, which has positively influenced Payoneer's role in the global economy, although recent trends indicate softening growth rates[127]. - Most revenue is earned in U.S. dollars, minimizing significant foreign currency risk, although fluctuations in currencies like the Euro and British Pound could impact results[7]. - The company has the potential to generate revenues from optimizing foreign exchange during payment delivery, which can materially affect revenues and earnings[8]. - A hypothetical 10% increase or decrease in current exchange rates could have a material impact on the company's financial results[9]. Strategic Outlook - The company expects to continue investing in global platform growth, product development, and regulatory expansion, alongside pursuing acquisitions to enhance customer value[123]. - Payoneer aims to increase monetization rates by focusing on higher monetization regions and introducing new services like the Payoneer Commercial Mastercard[121]. Accounting and Compliance - The company is classified as an emerging growth company under the JOBS Act, allowing it to delay the adoption of new accounting standards until they apply to private companies[10]. - The company will become a large accelerated filer at the end of fiscal year 2022, losing its emerging growth company status[11]. - A fair value adjustment of a liability from the 2020 acquisition of Optile was noted, impacting the financial results[3]. - The company reported non-recurring reorganizational costs related to legal and professional services associated with the Reorganization[2]. - As of September 30, 2022, the company's cash and cash equivalents were primarily held in cash deposits and money market funds, with a hypothetical 1% interest rate change potentially having a material effect on financial results[5].