LONDON: Paysafe Limited (“Paysafe” or the “Company”) (NYSE: PSFE), a leading payments platform, today announced its financial results for the first quarter of 2024.

First Quarter 2024 Financial Highlights
(Metrics compared to first quarter of 2023, unless otherwise noted)

• Revenue of $417.7 million, increased 8%; increased 7% on a constant currency basis
• Total Payment Volume of $36.1 billion, increased 7%
• Net income of $3.1 million, or $0.05 per diluted share, compared to net loss of $3.8 million, or ($0.06) per diluted share
• Adjusted net income of $35.3 million, or $0.57 per diluted share, compared to $33.1 million, or $0.54 per diluted share
• Adjusted EBITDA of $111.9 million, increased 4%; increased 3% on a constant currency basis
• Net leverage1 decreased to 4.9x as of March 31, 2024, compared to 5.0x as of December 31, 2023

Bruce Lowthers, CEO of Paysafe, commented: “We are off to a great start this year, delivering 8% year-over-year revenue growth in the first quarter, reinforcing that our strategic initiatives and associated investments are driving momentum in the business and setting us up for long-term success. We remain confident in our financial outlook for this year, which reflects stronger underlying revenue performance, anchored by improved operational execution.”

Recent Strategic and Operational Highlights

• Published Paysafe's inaugural sustainability report
• Expanded sales team as part of previously announced investment plans to enhance Paysafe's go-to-market capabilities to support growth in target verticals
• Capital returns - repurchased 989,419 of Paysafe's common shares for $14 million
• Advanced our white label wallet strategy through a partnership with Xsolla, a leader in game commerce
• Launched Paysafe's Pay by Bank solution for U.S. iGaming, allowing bettors to log-in directly to their bank accounts at online sportsbooks’ cashiers to fund real-time wagers
• Paysafe is now processing iGaming payments in 33 U.S. states and territories, including Q1 launches in Vermont and North Carolina
• Completed our network tokenization offering by integrating with Mastercard’s Secure Card on File, providing cardholders with an extra layer of protection and enhancing their payment journey

First Quarter of 2024 Summary of Consolidated Results

Total revenue for the first quarter of 2024 was $417.7 million, an increase of 8%, compared to $387.8 million in the prior year period, reflecting 7% growth in total payment volume. Excluding a $2.1 million favorable impact from changes in foreign exchange rates, total revenue increased 7%. Revenue from the Merchant Solutions segment increased 11%, reflecting double-digit growth in e-commerce as well as growth from small and medium-sized businesses ("SMBs") driven by initiatives to expand our sales capabilities and optimize the portfolio. Revenue from the Digital Wallets segment increased 5% as reported and 4% in constant currency, reflecting growth from gambling merchants as well as ongoing initiatives related to product and consumer engagement.

Net income for the first quarter increased to $3.1 million, compared to a net loss of $3.8 million in the prior year period. An increase in expenses for depreciation and amortization, share-based compensation, and taxes was more than offset by an increase in other income as well as a decrease in interest expense, which declined by $2.5 million, despite higher interest rates year-over-year, partly reflecting our focus on reducing debt.

Adjusted net income for the first quarter increased 7% to $35.3 million, compared to $33.1 million in the prior year period.

Adjusted EBITDA for the first quarter was $111.9 million, an increase of 4%, compared to $107.8 million in the prior year period. Excluding a $0.4 million favorable impact from changes in foreign exchange rates, Adjusted EBITDA increased 3%, primarily reflecting revenue growth, partially offset by incremental expenses related to previously announced initiatives to expand the sales team and optimize the portfolio as well as higher severance and credit loss expense.

First quarter operating cash flow was $58.8 million, compared to $20.0 million in the prior year period, which was mainly driven by lower taxes paid and the timing of bonus payments. Unlevered free cash flow was $69.2 million, compared to $42.2 million in the prior year period.

Balance Sheet

As of March 31, 2024, total cash and cash equivalents were $202.1 million, total debt was $2.5 billion and net debt was $2.3 billion. Compared to December 31, 2023, total debt decreased by $44.5 million, reflecting net repayments of $14.6 million as well as movement in foreign exchange rates.

2023 Sustainability Report

Demonstrating our commitment to acting as a responsible fintech company, Paysafe published its first Sustainability Report today, outlining the core tenets of the new strategy, its key pillars, and commitments. Paysafe’s approach to sustainability seeks to deepen the company’s work in four key areas where the greatest impact can be realized: Trusted technology, Engaged employees, Thriving society, and Responsible business principles.

Paysafe has established an oversight framework to drive the strategy and set targets across all focus areas to ensure accountability and monitor performance. Embedding sustainability practices into every level of the organization will increase the positive impact Paysafe makes on customers, employees, society and the environment.

The report can be accessed on the Sustainability section of Paysafe’s website at https://www.paysafe.com/en/about/sustainability/.

Paysafe’s Sustainability Report highlights the company’s commitment to focus on the following four pillars:

• Trusted technology: delivering security and protection for consumers and merchants alike by continually strengthening the security of our products, services and internal processes, providing a great customer experience, underpinned by trust, convenience and support for the vulnerable and a responsible approach to technology and innovation.
• Engaged employees: attracting and retaining the right talent through offering our people a great place to work, which rewards commitment, promotes engagement, offers development opportunities and prioritizes their wellbeing, building upon our diverse workforce at every level of the business.
• Thriving society: striving to make a positive contribution to society by increasing accessibility to financial and digital products for all customers, supporting community volunteer programs, corporate donations, and reducing the impact of our operations and value chain on the environment.
• Responsible business practices: operating in a responsible manner by promoting effective governance, ethics and compliance across our organization through experienced leaders, established committees and robust policies, standards and procedures to guide everyone that works for Paysafe, including our suppliers and partners.

Summary of Segment Results

Full Year 2024 Financial Guidance

Webcast and Conference Call

Paysafe will host a live webcast to discuss the results today at 4:30 p.m. (ET). The webcast and supplemental information can be accessed on the investor relations section of the Paysafe website at ir.paysafe.com. An archive will be available after the conclusion of the live event and will remain available via the same link for one year.

About Paysafe

Paysafe Limited (“Paysafe”) (NYSE: PSFE) (PSFE.WS) is a leading payments platform with an extensive track record of serving merchants and consumers in the global entertainment sectors. Its core purpose is to enable businesses and consumers to connect and transact seamlessly through industry-leading capabilities in payment processing, digital wallet, and online cash solutions. With over 25 years of online payment experience, an annualized transactional volume of $140 billion in 2023, and approximately 3,200 employees located in 12+ countries, Paysafe connects businesses and consumers across 260 payment types in over 40 currencies around the world. Delivered through an integrated platform, Paysafe solutions are geared toward mobile-initiated transactions, real-time analytics and the convergence between brick-and-mortar and online payments. Further information is available at www.paysafe.com.

Forward-looking Statements

This press release includes “forward-looking statements” within the meaning of U.S. federal securities laws. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Paysafe Limited’s (“Paysafe,” “PSFE,” the “Company,” “we,” “us,” or “our”) actual results may differ from their expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “anticipate,” “appear,” “approximate,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “forecast,” “foresee,” “guidance,” “intends,” “likely,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” "will," “would” and variations of such words and similar expressions (or the negative version of such words or expressions) may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include, without limitation, Paysafe’s expectations with respect to future performance.

These forward-looking statements involve significant risks, uncertainties, and events that may cause the actual results to differ materially, and potentially adversely, from those expressed or implied in the forward-looking statements. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: cyberattacks and security vulnerabilities; complying with and changes in money laundering regulations, financial services regulations, cryptocurrency regulations, consumer and business privacy and data use regulations or other regulations in Bermuda, the UK, Ireland, Switzerland, the United States, Canada and elsewhere; risks related to our focus on specialized and high-risk verticals; geopolitical events and the economic and other impacts of such geopolitical events and the responses of governments around the world; acts of war and terrorism; the effects of global economic uncertainties, including inflationary pressure and rising interest rates, on consumer and business spending; risks associated with foreign currency exchange rate fluctuations; changes in our relationships with banks, payment card networks, issuers and financial institutions; risk related to processing online payments for merchants and customers engaged in the online gambling and foreign exchange trading sectors; risks related to becoming an unwitting party to fraud or being deemed to be handling proceeds resulting from the criminal activity by customers; the effects of chargebacks, merchant insolvency and consumer deposit settlement risk; changes to our continued financial institution sponsorships; failure to hold, safeguard or account accurately for merchant or customer funds; risks related to the availability, integrity and security of internal and external IT transaction processing systems and services; our ability to manage regulatory and litigation risks, and the outcome of legal and regulatory proceedings; failure of fourth parties to comply with contractual obligations; changes and compliance with payment card network operating rules; substantial and increasingly intense competition worldwide in the global payments industry; risks related to developing and maintaining effective internal controls over financial reporting; managing our growth effectively, including growing our revenue pipeline; any difficulties maintaining a strong and trusted brand; keeping pace with rapid technological developments; risks associated with the significant influence of our principal shareholders; the effect of regional epidemics or a global pandemic on our business; and other factors included in the “Risk Factors” in our Form 20-F and in other filings we make with the SEC, which are available at https://www.sec.gov. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made.

The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in their expectations with respect thereto or any change in events.

Paysafe Limited Condensed Consolidated Statements of Operations (unaudited)

		Three Months Ended
		March 31,
($ in thousands)		2024				2023
Revenue		$	417,738			$	387,849
Cost of services (excluding depreciation and amortization)			170,373				158,939
Selling, general and administrative			144,808				128,311
Depreciation and amortization			68,310				63,547
Impairment expense on goodwill and intangible assets			653				82
Restructuring and other costs			452				1,990
Loss on disposal of subsidiary and other assets, net			177				—
Operating income			32,965				34,980
Other income, net			12,355				2,547
Interest expense, net			(34,965	)			(37,456	)
Income before taxes			10,355				71
Income tax expense			7,299				3,879
Net income / (loss)		$	3,056			$	(3,808	)
Net income / (loss) per share – basic		$	0.05			$	(0.06	)
Net income / (loss) per share – diluted		$	0.05			$	(0.06	)
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