Payfare (PAY) Q3 2024 earnings summary

Executive summary

• DoorDash will not renew its contract expiring in early 2025, prompting a strategic review to diversify revenue and address concentration risk; transition terms are still under negotiation.

• Q3 2024 revenue grew 25% year-over-year to $59.0 million, with net income of $4.5 million and adjusted net income per share of $0.17.

• Active users increased 24% to 1,502,028, and total gross dollar value rose 29% to $3.8 billion compared to Q3 2023.

• Programs with Lyft and Uber achieved record activity, with long-term extensions secured and upgraded features launched.

• Active business development pipeline includes three significant opportunities, two in late-stage due diligence.

Financial highlights

• Q3 2024 revenue was $59.0 million, up from $47.2 million in Q3 2023, with gross profit of $16.0 million (27.1% margin) and adjusted EBITDA of $7.8 million (13.2% margin).

• Net income for Q3 2024 was $4.5 million, down from $4.8 million in Q3 2023; adjusted net income was $8.1 million, up 8%.

• Free cash flow for Q3 2024 was $5.4 million, up $1.7 million year-over-year.

• Over $100 million in cash, cash equivalents, and guaranteed investment certificates as of September 30, 2024; no debt.

• 2025 revenue visibility is CAD 50–60 million from existing programs, excluding DoorDash.

Outlook and guidance

• Strategic review process initiated to explore options to enhance value and reduce concentration risks, including acquisitions, investments, partnerships, or sale.

• DasherDirect will contribute revenue at least through early 2025; timing and impact of DoorDash exit remain uncertain.

• Any two of the three pipeline opportunities could offset the lost DoorDash GDV on a full-run basis.

• Pilot EWA product launched with ADP for the Canadian market post-quarter-end, with material activity expected from Q1 2025 onward.

• Well capitalized to fund new strategic initiatives, with no debt on the balance sheet.