Payoneer (US:PAYO)2025-05-07 13:30Financial Data and Key Metrics Changes - Revenue grew 16% year over year excluding interest income, reaching $247 million, with adjusted EBITDA of $65 million and a 27% margin [22][23][29] - Net income was $21 million compared to $29 million in the same quarter last year, with basic and diluted earnings per share at $0.06 and $0.05 respectively [30] - Customer funds held by Payoneer increased 11% year over year to $6.6 billion, contributing to interest income of $58 million despite declining average interest rates [25][26] Business Line Data and Key Metrics Changes - B2B revenue increased 37%, driven by growth in APAC, EMEA, and Latin America [9] - SMB volume grew 7% year over year, with B2B SMB volume up 21% and merchant services volume up 88% [23] - Average revenue per user (ARPU) growth excluding interest income accelerated to 22% year over year, marking the seventh consecutive quarter of growth [11] Market Data and Key Metrics Changes - APAC and Latin America customer regions each grew revenue over 20%, representing about a third of total revenue [15] - Approximately 40% of revenue comes from helping customers sell to non-US markets, indicating a strong diversification strategy [16] Company Strategy and Development Direction - The company aims to become the essential partner for cross-border SMBs, leveraging its core assets to navigate the changing trade landscape [5][12] - Focus on quality customers and targeting high-value segments by industry, region, size, and product need [10] - Recent acquisition of a licensed China-based payment provider enhances the company's regulatory footprint and market access [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term opportunities despite current macroeconomic uncertainties and potential impacts from tariffs [31][34] - The company is suspending its previously issued full-year 2025 guidance due to high uncertainty around global trade policies [31][34] - Management noted that they have not seen a slowdown in volumes or revenue through early May, expecting growth in Q2 to align with medium-term targets [32] Other Important Information - Total operating expenses increased 14% year over year, primarily due to higher transaction costs and labor-related expenses [27] - The company is actively managing its hedging programs to reduce sensitivity to fluctuations in short-term interest rates [26] Q&A Session Summary Question: Customer reception to price increases and confidence in pricing power - Management stated that their pricing strategy remains customer segment-focused and they have not seen pressure from price increases [38][40] Question: Trends in customer onboarding and retention - Management highlighted strong net revenue retention among larger customers and ongoing focus on improving retention strategies [41][42] Question: Clarification on the $50 million revenue impact from tariffs - Management explained that the $50 million figure is based on various assumptions regarding customer behavior and market dynamics, emphasizing the uncertainty of outcomes [45][49] Question: Breakdown of revenue from China and merchant size - Management indicated that larger sellers in China are expected to be more resilient to tariffs, with a diverse range of sellers supported [60][62] Question: Potential for share gains post-tariff disruptions - Management sees significant long-term opportunities for Chinese sellers to expand into other markets, supported by their established relationships with global marketplaces [68][70] Question: Maintaining momentum in a difficult environment - Management emphasized disciplined operations and the ability to optimize expenses in response to changing market conditions [71][72] Question: Strategy for workforce management - Management expressed excitement about the growth potential in workforce management, aligning with customer needs for global teams [73][74]