Paysafe (PSFE) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 9% year-over-year to $440 million, with Adjusted EBITDA up 5% to $119 million and adjusted net income at $36.3 million ($0.59 per share).

• Total payment volume reached $38.1 billion, up 7% year-over-year, driven by e-commerce and iGaming growth.

• Net leverage reduced to 4.8x from 5.6x a year ago; net debt decreased by $26 million in Q2.

• Full-year 2024 revenue guidance raised to $1,713–$1,729 million (7–8% growth), with adjusted EBITDA guidance at $471–$484 million.

• Returned $25 million to shareholders via stock repurchases in the first half; repurchased 686,000 shares for $11 million in Q2.

Financial highlights

• Revenue grew 9% to $439.9 million (10% on constant currency); adjusted EBITDA margin was 27.1%, down 100 bps due to planned investments.

• Adjusted net income increased 5% to $36.3 million; adjusted EPS up 5.3% to $0.59.

• Unlevered free cash flow grew 16% to $339.1 million (72% conversion rate LTM).

• Net loss narrowed to $1.4 million, improved from $1.8 million loss last year.

• Take rate increased to 1.2% from 1.1% in the prior quarter.

Outlook and guidance

• Raised full-year 2024 revenue growth outlook to 7%-8% ($1,713–$1,729 million); adjusted EBITDA guidance at $471–$484 million.

• Adjusted EBITDA margin guidance set at 27.5%-28%; margin acceleration expected in 2H24, with mid-point at 28.6%.

• Net leverage expected to be 4.6x-4.7x by year-end; FY26 target is 3.5x.

• Portfolio rationalization expected to create a short-term revenue headwind in H2 2024, but long-term benefits anticipated.

• Strategic initiatives and investments expected to drive sustainable long-term growth.