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; net loss narrowed to $1.4 million.

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

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

• Returned $25 million to shareholders via stock repurchases in H1 2024; repurchased 686,396 shares for $11 million in Q2.

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

Financial highlights

• Q2 revenue grew 9% to $439.9 million (10% on constant currency); Adjusted EBITDA was $119 million (+5%).

• Adjusted net income rose 5% to $36.3 million ($0.59 per share); GAAP net loss narrowed to $1.4 million.

• Adjusted EBITDA margin was 27.1%, down 100 bps year-over-year due to planned investments.

• Unlevered free cash flow (LTM) up 16% to $339.1 million, with a 72% conversion rate.

• Take rate increased to 1.2% from 1.1% sequentially.

Outlook and guidance

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

• Adjusted EBITDA margin guidance set at 27.5%-28%, down 50 bps from prior guidance due to portfolio rationalization and severance costs.

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

• Margin acceleration expected in 2H24, with mid-point margin at 28.6%.

• Excluding portfolio rationalization, revenue growth would have been 8%-9%.