Payoneer (US:PAYO) Yahoo Finance·2026-02-27 06:12Core Insights - Payoneer reported a record quarterly revenue of $275 million in Q4 2025, with a 9% year-over-year increase in revenue excluding interest income, driven by strong B2B performance and pricing actions [3][4][6] - The company achieved total adjusted EBITDA of $69 million in Q4, representing a 25% margin, and a significant increase in adjusted EBITDA excluding interest income, which was $13 million, a five-fold increase compared to the prior year [2][6] - For 2026, management projects revenue excluding interest income to be between $900 million and $940 million, indicating a growth rate of approximately 12% at the midpoint, alongside a core adjusted EBITDA target of about $90 million [5][17] Financial Performance - Full-year 2025 revenue excluding interest income grew by 14%, with total adjusted EBITDA reaching $272 million and free cash flow of $146 million, reflecting nearly 200% free cash flow conversion [1][6] - Q4 net income was reported at $19 million, slightly up from $18 million in the same quarter of the previous year, with basic and diluted EPS both at $0.05 [2] - Customer funds held in Payoneer accounts increased by 13% year-over-year to $7.9 billion, contributing to the company's financial stability [13] B2B Growth and Market Strategy - B2B volume increased by 21% in Q4, with B2B revenue growing by 28% in 2025, now accounting for approximately 30% of total revenue, up from 20% in 2023 [6][8][10] - The company is focusing on moving upmarket to serve larger customers, with those generating over $600,000 in annual average volume representing 42% of revenue and driving 60% of overall growth [10][11] - Payoneer is migrating its checkout business to Stripe's solution, which is expected to create a near-term headwind of about 300 basis points in revenue growth [5][18] Operational Metrics and Cost Management - Total operating expenses in Q4 were $246 million, a 6% increase driven by IT, communications, and labor-related costs, while transaction costs remained flat year-over-year at $43 million [15] - The company reported a 9 basis point expansion in SMB take rate in 2025, with Q4 SMB take rate at 113 basis points, reflecting a shift towards higher take rate areas [12] - Management has hedged approximately 51% of customer funds to mitigate interest rate sensitivity, securing over $130 million of interest income for 2026 [14] Strategic Initiatives - Payoneer is launching stablecoin capabilities in partnership with Bridge and is also pursuing an AI-first strategy to enhance product velocity and operational efficiency [21] - The company has repurchased $175 million of shares in 2025, with $80 million repurchased in Q4, indicating a commitment to returning capital to shareholders [16] - Management expects to achieve a double-digit margin for the first time as a public company, even when fully burdened with stock-based compensation [20]