Paysafe (PSFE) Conference September 04, 2025 11:20 AM ET Speaker0Excited to have the PaySafe team with us. We have CEO, Bruce Lauthors, CFO, John Crawford, Kirsten from the IR team. So thank you guys very much for being here with us. Maybe just to to kick things off, we'll start a little bit higher level. So for those in the room or on the webcast that aren't as familiar with PaySafe, just talk us through the business today as it sits between merchant and digital wallets.And then maybe talk us through some ...

Financial Data and Key Metrics Changes - The company reported a 4% decline in revenue to $401 million, but organic revenue increased by 5% when excluding inorganic impacts from foreign exchange, interest, and divestitures [20][21] - Adjusted EBITDA was $95.2 million, with an adjusted EBITDA margin of 23.7%, slightly ahead of expectations [21][28] - Unlevered free cash flow for the quarter was $57 million, reflecting a 60% conversion of adjusted EBITDA [22] Business Line Data and Key Metrics Changes - Merchant Solutions volume increased by 11% to $34.3 billion, resulting in organic revenue growth of 6% [25] - Digital Wallet segment revenue was $187.6 million, an increase of 3% on an organic basis, with volume up 5% to $5.9 billion [26] - The enterprise sales organization signed over 100 enterprise-level contracts in Q1, with strong growth in gaming and e-commerce [7][14] Market Data and Key Metrics Changes - E-commerce growth was strong at 31% for the first quarter, with processing growth in iGaming exceeding 50% year-over-year [14] - The company anticipates that the Latin American market will contribute to mid to upper single-digit growth, with expectations for low double-digit growth as the year progresses [83] Company Strategy and Development Direction - The company is focusing on expanding its PaySafe wallet platform to unlock geographic expansion and target new consumer groups [9] - Partnerships are a key strategy, with recent collaborations including Fiserv and Tilde to enhance product offerings and market reach [18][19] - The company aims to achieve at least 10% of annual revenue contributions from products released in the last three years [50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in accelerating growth in the second half of the year, driven by existing contracts and new product initiatives [8][30] - The company is mindful of macroeconomic dynamics but remains confident in delivering full-year guidance [28][29] - Management noted that attrition in the SMB segment has been slightly higher than expected, but improvements are anticipated as new initiatives are implemented [29] Other Important Information - The company repurchased 613,000 shares during the first quarter and an additional 693,000 shares in April, returning approximately $20 million to shareholders year-to-date [28] - Total debt at the end of the quarter was just under $2.4 billion, with net leverage increasing slightly to 4.9 times [27] Q&A Session Summary Question: How much of the sales pipeline is booked but not yet live? - Management indicated good visibility in the sales pipeline, with strong enterprise sales and a positive outlook for onboarding merchants [35][38] Question: Expectations for Q2 EBITDA margin? - Management expects Q2 EBITDA margin to be similar to Q1, with an increase in the second half of the year [39][40] Question: Update on e-commerce mix within the merchant segment? - E-commerce accounts for about a quarter of the merchant segment revenue, with iGaming being a significant contributor [44][45] Question: Strategy for the SMB side of the business? - The company is focusing on balancing direct sales and ISO channels, with recent investments aimed at increasing direct sales productivity [54][56] Question: Differentiation of Clover in the market? - Management believes Clover has a strong growth profile and is investing in additional services to enhance its competitive position [62][63] Question: Availability of Clover's software packages to merchants? - The company is expanding its product offerings through Clover, including digital wallets and other services [70] Question: Commission structures for direct versus indirect sales? - The commission structures differ significantly, with direct sales having shorter-term residuals compared to the ISO channel [72][76] Question: Conviction for growth from new products? - Management highlighted strong sales performance and new product launches, including the Pago Effectivo wallet, as key growth drivers [80][81]