Paysafe (PSFE) Conference Summary - June 10, 2025 Company Overview - Paysafe generates approximately $1.7 billion in revenue, with a revenue split of about 55% from merchant solutions and 45% from digital wallet services [3][4] - The digital wallet segment primarily serves consumers, with products like Skrill and eCash facilitating transactions in gambling and gaming [4][5] - The merchant solutions segment focuses on traditional merchant acquiring, with a significant presence in North America [4][6] Core Business Segments Digital Wallet - The wallet business includes solutions for cash-to-digital transactions, such as Pago Effectivo in Latin America [5][51] - The company has evolved its wallet solutions to include bank account funding options, enhancing its distribution capabilities [5] Merchant Solutions - The merchant solutions segment has been built through acquisitions, including notable names like iPayment [6] - The business model includes both direct sales and independent sales organizations (ISOs) [7] Market Trends and Consumer Behavior - Consumer spending trends have remained stable, with no significant changes in transaction sizes or purchasing behaviors noted [9][10] - The demand environment for merchants has also been stable, with efforts to reduce sales cycle times [12][13] Strategic Partnerships - A new partnership with Fiserv, particularly with Clover, aims to enhance product offerings and customer stickiness [15][16] - The partnership is expected to provide access to Fiserv's customer base, enhancing the business wallet solution [16][17] Growth Projections - The company anticipates organic growth of 8% to 10% in the second half of 2025, driven by effective enterprise sales efforts and new product introductions [19][20] - The focus on small and medium-sized businesses (SMBs) is being refined to optimize lead generation and marketing strategies [20][33] Product Initiatives and Market Expansion - New product launches, such as the Hago Effectiva Wallet, are expected to contribute to revenue growth, although significant impacts may not be seen until 2026 [23][49] - The company is exploring opportunities in Latin America, which currently accounts for about 7% of revenue but is expected to grow faster than other regions [51][52] Financial Performance and Margins - The gross profit profile of the wallet business is significantly higher than that of the merchant solutions segment, impacting overall profitability [26] - The company aims to maintain an EBITDA margin of around 30% by the end of the year, despite some noise from divestitures [28][66] Investment Priorities - Key investment priorities include building product capabilities, driving double-digit revenue from recently launched products, and reducing debt levels [60][61] - The focus remains on achieving operating leverage and controlling operating expenses while continuing to grow high-margin product lines [61][62] Conclusion - Paysafe is positioned for continued organic growth, with a strong emphasis on optimizing its sales force and product offerings [66] - The company is focused on leveraging partnerships and expanding into new markets, particularly in Latin America, to drive future growth [50][52]

Financial Data and Key Metrics Changes - The company reported a record high order intake backlog of €1,800,000,000, an increase of 7.6% compared to €1,769,000,000 in the first quarter of the previous year [4] - Order intake grew by 1.5% to €271,000,000 from €267,000,000 in the previous year [4] - Marginality increased from 15.4% in Q1 2024 to 16% in Q1 2025 [5] - Revenues grew by 5% from €313,000,000 to €329,000,000, exceeding market growth expectations of approximately 4.2% [5][29] - EBITDA reached €53,000,000 with a margin of 16% compared to 15.4% in the previous year [24] Business Line Data and Key Metrics Changes - The made-to-measure yacht segment saw significant growth, now representing 49% of order intake, up from 37% last year [16] - The composite yacht segment remained flat, reflecting a softer U.S. season due to economic uncertainties [15] - The superyacht segment is performing well, with new orders filling slots until 2029 [17] Market Data and Key Metrics Changes - The U.S. market showed strong demand for made-to-measure yachts, while the composite yacht segment faced challenges [35][39] - The Middle East market experienced tough comparisons due to a strong performance in Q1 2024 [18] - The Americas reported a 150% increase in the made-to-measure segment [20] Company Strategy and Development Direction - The company is focusing on expanding its made-to-measure segment and investing in new models, including revamping the Itama brand [11] - The strategy includes maintaining a balanced presence across 71 countries to mitigate risks associated with market fluctuations [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the U.S. market, indicating a return to normalcy after a period of uncertainty [40][59] - The company expects sustainable mid-range single-digit growth for 2025, with net revenues projected between €1,220,000,000 and €1,240,000,000 [29] Other Important Information - The company plans to complete its CapEx plan with investments expected to be below €90,000,000 for 2025 [26] - The net financial position remains positive with €55,000,000 in net cash [27] Q&A Session Summary Question: Current U.S. Market Environment - Management discussed the strong demand for made-to-measure yachts and the challenges faced by the composite yacht segment due to economic uncertainties [35][39] Question: Guidance on Order Intake for 2025 - Management expects order inflow to be slightly better than the previous year, with a conservative outlook for the superyacht segment due to production capacity constraints [45] Question: Net Working Capital Expectations - Management anticipates normalization of working capital in the second quarter, expecting to end the year with a high single-digit ratio [46] Question: Current Trading in April and Early May - Management noted a significant recovery in market conditions globally, with increased inquiries and negotiations [65] Question: Progress on Ravenna Facility - The CapEx plan for the Ravenna facility is nearly complete, with a utilization rate over 90% [67] Question: M&A Pipeline - Management confirmed they are entering a due diligence process for a potential acquisition [69]

Financial Data and Key Metrics Changes - The company has adjusted its top line estimate for the year, reflecting a demand outlook that aligns with category dynamics and consumer behavior [14][15] - Gross margin contraction is expected in the second quarter, with a stabilization anticipated in the back half of the year [16][40] Business Line Data and Key Metrics Changes - The company is experiencing a rapid acceleration in consumer interest in health and wellness brands within the ready-to-eat cereal category, indicating a positive trend for the business [7][12] - The Kashi relaunch and campaigns across mainstream brands are part of the strategy to capitalize on this trend [9][12] Market Data and Key Metrics Changes - In the U.S., there has been a sequential improvement of about 80 basis points in both sales and volume, indicating a stable backdrop for executing the company's strategy [20][21] - The company is focusing on a stable top line growth of minus 1% to plus 1%, which is essential for delivering long-term margin growth [22] Company Strategy and Development Direction - The company is committed to a strategic reallocation of investments to enhance returns and align with consumer preferences, particularly in health and wellness [28][30] - The long-term guidance includes a target of 500 basis points of EBITDA margin expansion by the end of 2026, primarily through gross margin improvements [42][47] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in the current operating environment but expresses confidence in the strategic priorities and actions being taken to drive business value [65] - The company believes that the current consumer sentiment, focusing on value and health, presents a long-term tailwind for the cereal category [54] Other Important Information - The company is enhancing its marketing strategies and product offerings, including a multi-brand fiber campaign and the relaunch of Special K products [58][59] - There is an ongoing effort to optimize the cost structure and enhance efficiencies in distribution and manufacturing [48][49] Q&A Session Summary Question: What drove the recent acceleration in consumer interest in health and wellness brands? - Management believes the acceleration is a continuation of a trend, driven by consumer focus on value and health, and they are prepared to capitalize on this [11][12] Question: What is the expected gross margin contraction in the second quarter? - Management indicated that the largest impact will be in Q2 as they adjust their manufacturing plan, with expectations for stabilization in the back half of the year [15][16] Question: How does the company define a stable backdrop for sales growth? - The company sees the current category performance as consistent with planning assumptions, allowing for stable top line growth in the range of minus 1% to plus 1% [20][22] Question: How confident is the company in returning to market share performance in line with the category? - Management stated that improvements will be sequential throughout the year, with distribution gains and strategic investments expected to contribute positively [33][35] Question: What is the plan for Special K to stabilize its performance? - Management is focusing on stronger health claims and product relaunches to leverage the brand's health credentials and respond to consumer trends [56][58] Question: How will the company respond to emerging protein-forward brands? - Management indicated a dual approach of enhancing existing brand marketing while also considering acquisitions of smaller brands [60][62]

Financial Data and Key Metrics Changes - The company reported first quarter revenue of $478 million, representing a 14.9% increase compared to the same quarter last year [8][29] - Adjusted EBITDA for the first quarter grew to nearly $43 million, an increase of 18.6% year-over-year, with an EBITDA margin of 9%, up 30 basis points from the previous year [10][29] - GAAP net income per diluted share was $0.07, compared to a net loss per share of $0.11 a year ago, while adjusted EPS was $0.31, up from $0.25 in the prior year [31] Business Line Data and Key Metrics Changes - Lawson Products generated first quarter sales of $120.5 million, with organic average daily sales down 6.8% primarily due to military sales decline and sales force transformation efforts [31] - Gexpro Services reported first quarter revenue of $118.9 million, up over 20% year-over-year, with adjusted EBITDA of $15 million, or 12.6% of sales [34] - Test Equity Group's first quarter sales were $188.8 million, with adjusted EBITDA of $12.8 million, or 6.8% of sales, reflecting a slight increase from the prior year [36] Market Data and Key Metrics Changes - The Canadian segment's first quarter sales were $50.5 million, with organic sales increasing 5.3%, but softer sales were noted due to market disruptions and tariff changes [33][18] - The aerospace and defense, renewables, and technology sectors showed strong growth, contributing to the momentum in JetPro Services [21] Company Strategy and Development Direction - The company is focused on maximizing long-term value through strategic acquisitions and organic growth initiatives, with a robust M&A pipeline [40][41] - Investments in sourcing capabilities and customer-centric sales platforms are expected to enhance margins and profitability [17][39] - The company aims to double EBITDA over the next three years while improving current EBITDA margins [13] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the impact of trade policy changes on customer engagement and profitability [4][5] - The company anticipates that the current market noise will stabilize, allowing for better sourcing strategies [5][6] - There is a belief that the ongoing reshaping of global trade patterns may create long-term opportunities for the company [72][73] Other Important Information - The company repurchased $11.2 million of stock in the first quarter, with over $15 million remaining under prior authorization [7] - The company expects to maintain a debt leverage ratio of 3.6 times, with a focus on managing working capital effectively [38] Q&A Session Summary Question: Daily sales trends and April pacing - Management noted that April sales trends are relatively flat compared to Q1, with no major movements observed [48][49] Question: Military sales and sales force rebuild - Military sales remain flat, with sequential improvement seen in strategic accounts, while the sales force transformation is ongoing with a focus on productivity [55][56][57] Question: M&A pipeline and market opportunities - The current environment is expected to create more M&A opportunities, with a robust pipeline but a measured approach to new acquisitions [67][70] Question: Path to 20% returns on invested capital - The company aims to improve the numerator through acquisitions and manage working capital effectively to reach the target [80][82]

Financial Data and Key Metrics Changes - Organic revenue increased by 1.9% year on year, driven primarily by positive volume trends [6][12] - EBITDA was $114 million, which was at the high end of guidance, but declined year on year as expected, with an EBITDA margin of 14.5% [6][12] - Adjusted earnings per share (EPS) was $0.54, down compared to the same quarter in 2024, driven by lower operating income [13] - Net debt to EBITDA ratio increased to 3.5 times at the end of the first quarter, up from 3.1 times at the end of 2024 [14] Business Line Data and Key Metrics Changes - In HHC (Hygiene, Health, and Cleaning), organic revenue was up 4% year on year, with an EBITDA margin of 12.7%, down from last year due to higher raw material costs [7][8] - Engineering Adhesives saw a 2% decline in organic revenue, but EBITDA increased by 16%, with an EBITDA margin of 18.7% [9] - Building Adhesive Solutions (BAS) had a 2% increase in organic sales, with EBITDA also increasing by 2% year on year [10] Market Data and Key Metrics Changes - In the Americas, organic revenue was down 1% year on year, driven by declines in HHC and Engineering Adhesives, but BAS achieved over 8% organic revenue growth [10] - EIMEA (Europe, India, Middle East, and Africa) saw a 4% increase in organic revenue, driven by double-digit growth in HHC [11] - Asia Pacific experienced a 7% increase in organic revenue, primarily due to strength in China [11] Company Strategy and Development Direction - The company is focused on maintaining pricing discipline, driving market share gains, and managing costs effectively while optimizing its portfolio mix [5][18] - The strategic direction includes streamlining the cost structure and improving operational efficiency, with a target of achieving greater than 20% EBITDA margin [5][19] - The company is prioritizing share buybacks and has temporarily slowed the timing of M&A transactions due to market volatility [15][16] Management's Comments on Operating Environment and Future Outlook - Management remains cautious due to weak overall market demand and unpredictable geopolitical conditions [5] - The company expects to see a favorable net benefit from pricing and raw material actions for the remainder of the year [6] - Management is confident in their ability to adapt and execute in the current environment to deliver growth in organic sales and EBITDA [6][18] Other Important Information - The company is experiencing raw material cost inflation, with about 20% of the portfolio seeing increases [73] - The solar business is expected to remain weak throughout the year, but margins are anticipated to improve as the company repositions away from lower efficiency panels [70][71] Q&A Session Summary Question: What are the current operating conditions and customer management strategies? - Management noted that customers are cautious and not seeing prebuying trends, focusing instead on innovation and new product development [25][26] Question: Can you provide an update on market share and competitive environment? - Management confirmed gaining market share in multiple segments, particularly in HHC, and noted ongoing challenges in the solar market [31][32] Question: What is the outlook for pricing and EBITDA margins in HHC? - Management expects improving margins in HHC throughout the year, ideally reaching a 16% to 17% EBITDA margin range [39][41] Question: How is working capital impacting cash flow? - Management indicated that working capital needs are higher due to volume and pricing growth, but improvements are expected as the year progresses [42][44] Question: What is the outlook for the European and U.S. economies? - Management observed that the U.S. business is slowing, while the European market showed mixed results, with some segments accelerating [80][81] Question: How is the company positioned regarding tariffs and their impact? - Management stated that durable goods production will be more impacted by tariffs, but the company is well-positioned to manage costs in a low-volume environment [102] Question: Are there opportunities in the PFAS-free market? - Management confirmed that they have PFAS-free alternatives and are actively working with customers to capture market share in this area [105]

Core Viewpoint - J.P. Morgan analyst Christian Carlino maintains a Neutral rating on Holley Inc. due to concerns over growth catalysts and macroeconomic challenges impacting the company [1] Group 1: Financial Performance and Projections - Holley's 2025 guidance indicates a potential achievement of a 20% EBITDA margin, but overall sentiment may be affected by a "softer" top-line outlook [1] - The analyst forecasts first-quarter sales of $144 million, reflecting a 2% organic decline, and total sales for the year at $590 million, down 2% year-over-year, with organic growth projected at 2.5% [4] - Direct-to-consumer sales increased by 8% in the fourth quarter, supported by improved marketing efforts, while sales through national retailers rose by 12% due to expanded SKU offerings [3] Group 2: Market Dynamics and Challenges - Softer revenue projections are likely to influence market sentiment, particularly in the current consumer environment [2] - Holley's market share performance in the fourth quarter was affected by distribution partners reducing safety stock, attributed to the company's enhanced supply chain capabilities [2] - Sales guidance for the year is skewed towards the second half, with initial pressures from consumer confidence and weather conditions impacting the first quarter [4] Group 3: Stock Performance - HLLY shares are currently trading higher by 0.61% at $2.485 [4]