Payoneer Reports Fourth Quarter and Full Year 2023 Financial Results
Third consecutive year of 30%+ revenue growth since going public in 2021
Significantly expanded profitability in 2023
Fourth Quarter and Full Year 2023 Financial Highlights
($ in mm) |
4Q 2022 |
1Q 2023 |
2Q 2023 |
3Q 2023 |
4Q 2023 |
YoY
Change |
2022 |
2023 |
YoY
Change |
|||
Revenue |
|
|
|
|
|
22% |
|
|
32% |
|||
Transaction costs as a % of revenue |
16.6% |
14.1% |
13.8% |
14.6% |
16.2% |
(40 bps) |
17.6% |
14.7% |
(290 bps) | |||
Revenue less transaction costs |
|
|
|
|
|
23% |
|
|
37% |
|||
Net income (loss) |
(10.2) |
7.9 |
45.5 |
12.8 |
27.0 |
n.m. |
(12.0) |
93.3 |
n.m. | |||
Adjusted EBITDA |
10.6 |
38.8 |
56.0 |
58.2 |
52.2 |
393% |
48.5 |
205.1 |
323% |
|||
Operational Metrics | ||||||||||||
Active Ideal Customer Profiles (ICPs) ('000s)1 |
488 |
491 |
495 |
502 |
516 |
6% |
488 |
516 |
6% |
|||
Volume ($bn)2 |
|
|
|
|
|
16% |
|
|
11% |
|||
Revenue as a % of volume ("Take Rate") | 112 bps | 125 bps | 135 bps | 127 bps | 118 bps | 6 bps | 105 bps | 126 bps | 21 bps |
1. |
Active ICPs are defined as customers with a Payoneer Account that have on average over |
2. |
For a customer that both receives and later sends payments, we count the volume only once. We have updated our methodology to adjust for previously disclosed limited exceptions where both received and sent payments were counted in volumes, such that we count volume only once for a customer that both receives and later sends payments. The updated methodology has no impact on revenue and had, for all periods presented, less than a 3% impact on volume. The update has been applied to all periods reflected in the table above and we have updated the definition of volume accordingly (please see “Financial Information; Non-GAAP Financial Measures” below). |
“We made meaningful progress in 2023 to expand access for small and medium-sized businesses (SMBs) to the digital, global economy.
Full Year 2023 Business Highlights
-
6% active ICP growth and 36% ARPU expansion. 15% growth in our larger ICPs, or those who have on average over
$10,000 per month in volume -
Strengthened executive team with the addition of Chief People Officer
Elana Brickner , Chief Transformation OfficerJohn Davis , Chief Technology OfficerSarit Frumkes , and Chief Product OfficerOren Ryngler - Deepened ecosystem of marketplace relationships, including renewing our contract with Airbnb and announcing a new collaboration with Etsy to support its expansion of Etsy Payments into emerging markets
-
Announced an agreement to acquire a licensed
China -based payment service provider, which will support Payoneer’s fast-growingChina business upon close, and is subject to customary closing conditions and regulatory approvals - Acquired Spott, a real-time data platform that will help us drive faster underwriting decisions in our working capital business
-
$57 million of share repurchases in 2023 and onDecember 7, 2023 , the Board authorized an amendment to the share repurchase program to increase the authorized amount of repurchases to$250 million -
$6.4 billion of customer funds as ofDecember 31, 2023 , up 9% year-over-year
Fourth Quarter 2023 Business Highlights
-
Total B2B volume increased 13% year-over-year, including 27% growth in APAC, SAMEA, and
Latin America , where we predominantly serve outsourcing and services businesses who usePayoneer to invoice their customers and make payments to their vendors and suppliers -
Merchant Services (Checkout) volume increased more than 400% year-over-year and 61% sequentially. Over 600 merchants are using Checkout on their webstores to collect payments from customers around the world, and on average receive more than
$60,000 of monthly volume -
Record
$1.1 billion of quarterly usage onPayoneer cards, up 32% year-over-year, reflecting increased customer adoption of our AP solutions to manage their expenses -
$1.5 million charitable contribution to thePayoneer Foundation to support small business development, female entrepreneurs, young people in business, financial education and entrepreneurship, and humanitarian aid
2024 Guidance
“Payoneer began 2023 with a focus on profitable growth, and we have delivered. In 2023, we generated 32% revenue growth, over
2024 guidance is as follows:
|
|
|
|
|
||
|
|
Revenue |
|
|
|
|
|
|
Transaction costs |
~17.5% of revenue |
|
|
|
|
|
Adjusted EBITDA (1) |
|
|
|
|
|
|
|
|
|
|
(1) Guidance for fiscal year, where adjusted, is provided on a non-GAAP basis, which |
Webcast
About
Forward-Looking Statements
This press release includes, and oral statements made from time to time by representatives of
Financial Information; Non-GAAP Financial Measures
Some of the financial information and data contained in this press release, such as adjusted EBITDA, have not been prepared in accordance with
Non-GAAP measures include the following item:
Adjusted EBITDA: We provide adjusted EBITDA, a non-GAAP financial measure that represents our net income (loss) adjusted to exclude: M&A related expense (income), stock-based compensation expenses, restructuring expenses, share in losses (gain) of associated company, gain from change in fair value of warrants, other financial expense (income), net, taxes on income, and depreciation and amortization.
Other companies may calculate the above measure differently, and therefore Payoneer’s measures may not be directly comparable to similarly titled measures of other companies.
In addition, in this earnings release, we reference volume, which is an operational metric. Volume refers to the total dollar value of transactions successfully completed or enabled by our platform, not including orchestration transactions. For a customer that both receives and later sends payments, we count the volume only once. Note: we have updated our methodology to adjust for previously disclosed limited exceptions where both received and sent payments were counted in volumes, such that we count volume only once for a customer that both receives and later sends payments. The updated methodology has no impact on revenue and had for all periods presented, less than a 3% impact on volume. The update has been applied to all periods reflected in the volume table in this press release and we have updated the definition of volume accordingly.
In this earnings release, we also reference ARPU. ARPU (Average Revenue Per User) is defined as the Revenue from Active Customers divided by the number of Active Customers over the period in which the Revenue was earned. Active Customers for these purposes are defined as
TABLE - 1 | ||||||||||||
|
||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||||||||||
( |
||||||||||||
(Unaudited) | ||||||||||||
Three months ended |
Year ended |
|||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||
Revenues | $ |
224,320 |
$ |
183,558 |
$ |
831,103 |
$ |
627,623 |
||||
Transaction costs (Exclusive of depreciation and amortization shown separately below and inclusive of |
36,320 |
30,392 |
122,291 |
110,165 |
||||||||
Other operating expenses |
39,686 |
41,304 |
160,609 |
149,199 |
||||||||
Research and development expenses |
34,972 |
32,902 |
119,197 |
115,041 |
||||||||
Sales and marketing expenses |
51,762 |
52,194 |
196,654 |
164,564 |
||||||||
General and administrative expenses |
27,124 |
29,997 |
100,929 |
90,010 |
||||||||
Depreciation and amortization |
8,750 |
5,333 |
27,814 |
20,858 |
||||||||
Total operating expenses |
198,614 |
192,122 |
727,494 |
649,837 |
||||||||
Operating income (loss) |
25,706 |
(8,564) |
103,609 |
(22,214) |
||||||||
Financial income (expense): | ||||||||||||
Gain from change in fair value of Warrants |
11,824 |
5,031 |
17,359 |
33,963 |
||||||||
Other financial income (expense), net |
3,763 |
1,005 |
11,568 |
(10,131) |
||||||||
Financial income, net |
15,587 |
6,036 |
28,927 |
23,832 |
||||||||
Income (loss) before taxes on income and share in losses of associated company |
41,293 |
(2,528) |
132,536 |
1,618 |
||||||||
Taxes on income |
14,272 |
7,610 |
39,203 |
13,586 |
||||||||
Share in losses of associated company |
— |
13 |
— |
2 |
||||||||
Net income (loss) | $ |
27,021 |
$ |
(10,151) |
$ |
93,333 |
$ |
(11,970) |
||||
Other comprehensive income (loss), net of tax | ||||||||||||
Foreign currency translation adjustments |
— |
2,087 |
— |
(2,429) |
||||||||
Other comprehensive income (loss), net of tax |
— |
2,087 |
— |
(2,429) |
||||||||
Comprehensive income (loss) | $ |
27,021 |
$ |
(8,064) |
$ |
93,333 |
$ |
(14,399) |
||||
Per Share Data | ||||||||||||
Net income (loss) per share attributable to common stockholders — Basic earnings (loss) per share | $ |
0.08 |
$ |
(0.03) |
$ |
0.26 |
$ |
(0.03) |
||||
— Diluted earnings (loss) per share | $ |
0.07 |
$ |
(0.03) |
$ |
0.24 |
$ |
(0.03) |
||||
Weighted average common shares outstanding — Basic |
354,697,812 |
352,756,697 |
361,678,893 |
348,044,831 |
||||||||
Weighted average common shares outstanding — Diluted |
379,881,231 |
352,756,697 |
392,665,718 |
348,044,831 |
Disaggregation of revenue
The following table presents revenue recognized from contracts with customers as well as revenue from other sources:
Three months ended |
Year ended |
|||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||
Revenue recognized at a point in time | $ |
156,114 |
$ |
137,813 |
$ |
573,902 |
$ |
533,213 |
||||
Revenue recognized over time |
660 |
7,723 |
16,925 |
30,354 |
||||||||
Revenue from contracts with customers | $ |
156,774 |
$ |
145,536 |
$ |
590,827 |
$ |
563,567 |
||||
Interest income on customer balances | $ |
64,867 |
$ |
35,894 |
$ |
230,634 |
$ |
55,292 |
||||
Capital advance income |
2,679 |
2,128 |
9,642 |
8,764 |
||||||||
Revenue from other sources | $ |
67,546 |
$ |
38,022 |
$ |
240,276 |
$ |
64,056 |
||||
Total revenues | $ |
224,320 |
$ |
183,558 |
$ |
831,103 |
$ |
627,623 |
The following table presents the Company’s revenue disaggregated by primary regional market, with revenues being attributed to the country (in the region) in which the billing address of the transacting customer is located, with the exception of global bank transfer revenues, where revenues are disaggregated based on the billing address of the transaction funds source.
Three months ended |
Year ended |
|||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||
Primary regional markets | ||||||||||||
|
$ |
80,244 |
$ |
55,675 |
$ |
287,944 |
$ |
195,663 |
||||
|
44,170 |
38,334 |
166,868 |
130,850 |
||||||||
|
32,424 |
24,060 |
114,335 |
84,817 |
||||||||
|
23,499 |
29,408 |
97,434 |
92,045 |
||||||||
|
23,400 |
19,167 |
87,237 |
69,239 |
||||||||
|
20,583 |
16,914 |
77,285 |
55,009 |
||||||||
Total revenues | $ |
224,320 |
$ |
183,558 |
$ |
831,103 |
$ |
627,623 |
1. |
|
2. |
No single country included in any of these regions generated more than 10% of total revenue |
3. |
|
TABLE - 2 | |||||||||||||||
|
|||||||||||||||
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA (UNAUDITED) | |||||||||||||||
( |
|||||||||||||||
Three months ended | Year ended | ||||||||||||||
|
|
||||||||||||||
2023 |
2022 |
2023 |
2022 |
||||||||||||
Net income (loss) | $ |
27,021 |
$ |
(10,151) |
$ |
93,333 |
$ |
(11,970) |
|||||||
Depreciation and amortization |
8,750 |
5,333 |
27,814 |
20,858 |
|||||||||||
Taxes on income |
14,272 |
7,610 |
39,203 |
13,586 |
|||||||||||
Other financial (income) expense, net |
(3,763) |
(1,005) |
(11,568) |
10,131 |
|||||||||||
EBITDA |
46,280 |
1,787 |
148,782 |
32,605 |
|||||||||||
Stock based compensation expenses(1) |
17,338 |
13,827 |
65,767 |
52,150 |
|||||||||||
Share in loss of associated company |
— |
13 |
— |
2 |
|||||||||||
M&A related expense (income)(2) |
451 |
— |
3,468 |
(2,323) |
|||||||||||
Gain from change in fair value of Warrants(3) |
(11,824) |
(5,031) |
(17,359) |
(33,963) |
|||||||||||
Restructuring charges(4) |
— |
— |
4,488 |
— |
|||||||||||
Adjusted EBITDA | $ |
52,245 |
$ |
10,596 |
$ |
205,146 |
$ |
48,471 |
|||||||
Three months ended, | |||||||||||||||
|
|
|
|
|
|||||||||||
Net income (loss) | $ |
(10,151) |
$ |
7,938 |
$ |
45,549 |
$ |
12,825 |
$ |
27,021 |
|||||
Depreciation and amortization |
5,333 |
6,039 |
5,909 |
7,116 |
8,750 |
||||||||||
Taxes on income |
7,610 |
9,172 |
5,747 |
10,012 |
14,272 |
||||||||||
Other financial income, net |
(1,005) |
(2,350) |
(4,318) |
(1,137) |
(3,763) |
||||||||||
EBITDA |
1,787 |
20,799 |
52,887 |
28,816 |
46,280 |
||||||||||
Stock based compensation expenses(1) |
13,827 |
16,927 |
16,173 |
15,330 |
17,338 |
||||||||||
Share in losses of associated company |
13 |
— |
— |
— |
— |
||||||||||
M&A related expense(2) |
— |
774 |
498 |
1,745 |
451 |
||||||||||
Loss (gain) from change in fair value of Warrants(3) |
(5,031) |
252 |
(13,586) |
7,799 |
(11,824) |
||||||||||
Restructuring charges(4) |
— |
— |
— |
4,488 |
— |
||||||||||
Adjusted EBITDA | $ |
10,596 |
$ |
38,752 |
$ |
55,972 |
$ |
58,178 |
$ |
52,245 |
1. |
Represents non-cash charges associated with stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy. |
2. |
Amounts for 2023 relate to M&A-related third-party fees, including related legal, consulting and other expenditures. Amounts for the year ended |
3. |
Changes in the estimated fair value of the warrants are recognized as gain or loss on the statements of comprehensive income (loss). The impact is removed from EBITDA as it represents market conditions that are not in our control. |
4. |
We initiated a plan to reduce our workforce during the year ended |
TABLE - 3 | ||||||||||||
|
||||||||||||
EARNINGS (LOSS) PER SHARE | ||||||||||||
( |
||||||||||||
(Unaudited) | ||||||||||||
Three months ended |
Year ended |
|||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||
Numerator: | ||||||||||||
Net income (loss) | $ |
27,021 |
$ |
(10,151) |
$ |
93,333 |
$ |
(11,970) |
||||
Denominator: | ||||||||||||
Weighted average common shares outstanding — | ||||||||||||
Basic |
354,697,812 |
352,756,697 |
361,678,893 |
348,044,831 |
||||||||
Add: | ||||||||||||
Dilutive impact of RSUs, ESPP and options to purchase common stock |
24,453,273 |
— |
30,256,559 |
— |
||||||||
Dilutive impact of private Warrants |
730,146 |
— |
730,266 |
— |
||||||||
Weighted average common shares — diluted |
379,881,231 |
352,756,697 |
392,665,718 |
348,044,831 |
||||||||
Net income (loss) per share attributable to common stockholders — Basic earnings (loss) per share | $ |
0.08 |
$ |
(0.03) |
$ |
0.26 |
$ |
(0.03) |
||||
Diluted earnings (loss) per share | $ |
0.07 |
$ |
(0.03) |
$ |
0.24 |
$ |
(0.03) |
TABLE - 4 | |||||||
|
|||||||
CONSOLIDATED BALANCE SHEETS | |||||||
( |
|||||||
|
|||||||
2023 |
2022 |
||||||
Assets: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ |
617,022 |
$ |
543,299 |
|||
Restricted cash |
7,030 |
2,882 |
|||||
Customer funds |
6,390,526 |
5,838,612 |
|||||
Accounts receivable (net of allowance of |
7,980 |
12,878 |
|||||
Capital advance receivables (net of allowance of |
45,493 |
37,155 |
|||||
Other current assets |
40,672 |
36,278 |
|||||
Total current assets |
7,108,723 |
6,471,104 |
|||||
Non-current assets: | |||||||
Property, equipment and software, net |
15,499 |
14,392 |
|||||
|
19,889 |
19,889 |
|||||
Intangible assets, net |
76,266 |
45,444 |
|||||
Restricted cash |
5,780 |
4,848 |
|||||
Deferred taxes |
15,291 |
4,169 |
|||||
Investment in associated company |
— |
6,429 |
|||||
Severance pay fund |
840 |
1,095 |
|||||
Operating lease right-of-use assets |
24,854 |
15,260 |
|||||
Other assets |
15,977 |
12,021 |
|||||
Total assets | $ |
7,283,119 |
$ |
6,594,651 |
|||
Liabilities and shareholders’ equity: | |||||||
Current liabilities: | |||||||
Trade payables | $ |
33,941 |
$ |
41,566 |
|||
Outstanding operating balances |
6,390,526 |
5,838,612 |
|||||
Other payables |
117,508 |
97,334 |
|||||
Total current liabilities |
6,541,975 |
5,977,512 |
|||||
Non-current liabilities: | |||||||
Long-term debt from related party |
18,411 |
16,138 |
|||||
Warrant liability |
8,555 |
25,914 |
|||||
Other long-term liabilities |
49,905 |
29,831 |
|||||
Total liabilities |
6,618,846 |
6,049,395 |
|||||
Commitments and contingencies | |||||||
Shareholders’ equity: | |||||||
Preferred stock, |
— |
— |
|||||
Common stock, |
3,687 |
3,528 |
|||||
|
(56,936) |
— |
|||||
Additional paid-in capital |
732,894 |
650,433 |
|||||
Accumulated other comprehensive loss |
(176) |
(176) |
|||||
Accumulated deficit |
(15,196) |
(108,529) |
|||||
Total shareholders’ equity |
664,273 |
545,256 |
|||||
Total liabilities and shareholders’ equity | $ |
7,283,119 |
$ |
6,594,651 |
TABLE - 5 | ||||||
|
||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
( |
||||||
Year ended |
||||||
2023 |
2022 |
|||||
Cash Flows from Operating Activities | ||||||
Net income (loss) | $ |
93,333 |
$ |
(11,970) |
||
Adjustment to reconcile net loss to net cash provided by operating activities: | ||||||
Depreciation and amortization |
27,814 |
20,858 |
||||
Deferred taxes |
(11,122) |
731 |
||||
Stock-based compensation expenses |
65,767 |
52,149 |
||||
Share in losses of associated company |
— |
2 |
||||
Gain from change in fair value of Warrants |
(17,359) |
(33,963) |
||||
Transaction costs allocated to Warrants |
— |
— |
||||
Foreign currency re-measurement (income) loss |
(4,359) |
2,752 |
||||
Changes in operating assets and liabilities, net of the effects of business combinations: | ||||||
Other current assets |
(4,310) |
(11,421) |
||||
Trade payables |
(8,326) |
24,284 |
||||
Deferred revenue |
1,348 |
224 |
||||
Accounts receivable, net |
4,898 |
964 |
||||
Capital advance extended to customers |
(299,139) |
(223,819) |
||||
Capital advance collected from customers |
290,801 |
237,834 |
||||
Other payables |
13,619 |
16,608 |
||||
Other long-term liabilities |
232 |
(3,480) |
||||
Operating lease right-of-use assets |
10,248 |
10,686 |
||||
Other assets |
(3,956) |
1,521 |
||||
Net cash provided by operating activities | $ |
159,489 |
$ |
83,960 |
||
Cash Flows from Investing Activities | ||||||
Purchase of property, equipment and software |
(8,459) |
(10,504) |
||||
Capitalization of internal use software |
(39,333) |
(18,329) |
||||
Related party asset acquisition |
(3,600) |
— |
||||
Severance pay fund distributions, net |
255 |
628 |
||||
Customer funds in transit, net |
930 |
33,939 |
||||
Net cash inflow from acquisition of remaining interest in joint venture |
5,953 |
— |
||||
Net cash provided by (used in) investing activities | $ |
(44,254) |
$ |
5,734 |
||
Cash Flows from Financing Activities | ||||||
Proceeds from issuance of common stock in connection with stock based compensation plan, net of taxes paid related to settlement of equity awards |
13,203 |
21,346 |
||||
Outstanding operating balances, net |
551,914 |
1,437,358 |
||||
Borrowings under related party facility |
26,855 |
29,363 |
||||
Repayments under related party facility |
(24,582) |
(26,755) |
||||
Common stock repurchased |
(55,436) |
— |
||||
Net cash provided by financing activities | $ |
511,954 |
$ |
1,461,312 |
||
Effect of exchange rate changes on cash and cash equivalents | $ |
4,458 |
$ |
(2,719) |
||
Net change in cash, cash equivalents, restricted cash and customer funds |
631,647 |
1,548,287 |
||||
Cash, cash equivalents, restricted cash and customer funds at beginning of year |
6,386,720 |
4,838,433 |
||||
Cash, cash equivalents, restricted cash and customer funds at end of year | $ |
7,018,367 |
$ |
6,386,720 |
||
Supplemental disclosure of cash flow information: | ||||||
Cash paid for taxes, net of refunds | $ |
40,910 |
$ |
9,425 |
||
Cash interest paid | $ |
1,767 |
$ |
1,466 |
||
Supplemental information of investing and financing activities not involving cash flows: | ||||||
Property, equipment, and software acquired but not paid | $ |
810 |
$ |
109 |
||
Internal use software capitalized but not paid | $ |
10,159 |
$ |
4,392 |
||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ |
19,842 |
$ |
13,003 |
||
Common stock repurchased but not paid | $ |
1,500 |
$ |
— |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240228385123/en/
Investors:
investor@payoneer.com
Media:
PR@payoneer.com
Source: