Paysafe (PSFE) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 8% year-over-year to $427 million, with merchant solutions up 11% and digital wallets up 4%; adjusted EBITDA rose 1% to $117.8 million, and adjusted net income was $31.4 million.

• Net leverage improved to 4.7x from 5.1x a year ago, achieving the year-end target ahead of schedule.

• Strategic priorities—sales expansion, portfolio optimization, consumer acquisition, and product innovation—are on track or ahead of schedule, with 170 new sales reps hired year-to-date.

• Full-year 2024 outlook reaffirmed, with revenue guidance of $1,713–$1,729 million and adjusted EBITDA of $471–$484 million.

• Net loss widened to $13.0 million, mainly due to higher other expenses, including foreign exchange losses.

Financial highlights

• Total payment volume reached $38 billion, up 8% year-over-year; take rate steady at 1.1%.

• Adjusted net income was $31.4 million; adjusted EPS was $0.51, down from $0.57 last year due to a higher effective tax rate.

• Unlevered free cash flow conversion was 68%, with Q3 unlevered free cash flow at $89.9 million.

• Adjusted EBITDA margin was 27.6%, down 170 basis points year-over-year due to investments and client exits.

• Gross profit (excluding depreciation and amortization) increased to $249.0 million from $232.3 million year-over-year.

Outlook and guidance

• 2024 revenue guidance: $1,713–$1,729 million, with adjusted EBITDA guidance of $471–$484 million and margin 27.5%-28%.

• Net leverage expected to remain between 4.6x and 4.7x at year-end, with a target of 3.5x by FY26.

• Every 1% euro weakening vs. USD impacts annual revenue by $6–$8 million and adjusted EBITDA by $1.5–$2.5 million.

• Management expects continued momentum into 2025.