Payoneer Reports Fourth Quarter and Full Year 2024 Financial Results

Business Wire 27-Feb-2025 7:30 AM

Achieved record annual volume of $80 billion, 18% annual revenue growth and record profitability

2025 guidance reflects business momentum and confidence in further strong performance

Payoneer Global Inc. ("Payoneer" or the "Company") (NASDAQ:PAYO), the financial technology company empowering the world's small and medium-sized businesses to transact, do business and grow globally, today reported financial results for its fourth quarter and full year ended December 31, 2024.

Fourth Quarter 2024 Financial Highlights

1. Active ICPs are defined as customers with a Payoneer Account that have on average over $500 per month in volume and were active over the trailing twelve-month period.
2. SMB customer take rate represents revenue from SMBs who sell on marketplaces, B2B SMBs, and Merchant Services, divided by the associated volume from each respective channel.

Full Year 2024 Business Highlights

• Total volume grew 21% year-over-year to $80 billion dollars. B2B volume growth was particularly strong, growing 42% year-over-year.
• 8% ICP growth year-over-year. Volume and revenue from $10K+ ICPs both increased by over 20% for the full year.
• 18% year-over-year growth in ARPU driven by business mix, increased adoption of our high value products, in particular our card product, our various pricing and offering initiatives and higher interest income. ARPU excluding interest income increased 21% year over year.
• $7.0 billion of customer funds (including both short-term and long-term funds) as of December 31, 2024, up 9% year-over-year.
• Implemented actions to reduce future sensitivity to interest rate fluctuations with $1.8 billion of funds underlying customer balances invested in US treasury securities and term-based deposits as of December 31, 2024, and long-term interest rate derivative instruments purchased with respect to $1.9 billion in funds to provide a floor against interest rate declines below 3%.
• Acquired Skuad, a global workforce and payroll management company. The acquisition accelerates our strategy to deliver a comprehensive and integrated financial stack for SMBs that operate internationally.
• $137 million of share repurchases at a weighted average price of $5.50 and repurchased and redeemed all 25 million outstanding public warrants for $21 million.
• In February 2025, announced that we had received the regulatory approvals in China required to complete our previously announced acquisition of a licensed China-based payment service provider. The transaction is expected to close in the first half of 2025, subject to customary closing conditions.

Fourth Quarter 2024 Business Highlights

• 18% volume growth year-over-year reflects:
  • B2B volume of $3.0 billion increased 37% year-over-year, driven by continued strong customer acquisition and increased average transaction sizes.
  • SMBs that sell on marketplaces volume of $13.4 billion increased 14% year-over-year led by strong performance with large ecommerce sellers.
  • Merchant Services (Checkout) volume of $218 million increased 114% year-over-year.
  • Enterprise payouts volume of $5.9 billion increased 17% year-over-year.
• Record $1.5 billion of spend on Payoneer cards, up 36% year-over-year, as customers increasingly use our card product for their global accounts payable needs and as we continue to drive adoption across all regions. Full year card usage of $5.2 billion increased 36% year-over-year.

2025 Guidance

2025 guidance is as follows:

Webcast

Payoneer will host a live webcast of its earnings on a conference call with the investment community beginning at 8:30 a.m. ET today, February 27, 2025. To access the webcast, go to the investor relations section of the Company's website at https://investor.payoneer.com. A replay will be available on the investor relations website following the call.

About Payoneer

Payoneer is the financial technology company empowering the world's small and medium-sized businesses to transact, do business, and grow globally. Payoneer was founded in 2005 with the belief that talent is equally distributed, but opportunity is not. It is our mission to enable any entrepreneur and business anywhere to participate and succeed in an increasingly digital global economy. Since our founding, we have built a global financial stack that removes barriers and simplifies cross-border commerce. We make it easier for millions of SMBs, particularly in emerging markets, to connect to the global economy, pay and get paid, manage their funds across multiple currencies, and grow their businesses.

Forward-Looking Statements

This press release includes, and oral statements made from time to time by representatives of Payoneer, may be considered "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Payoneer's future financial or operating performance. For example, projections of future revenue, transaction cost and adjusted EBITDA are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expect," "intend," "plan," "will," "estimate," "anticipate," "believe," "predict," "potential" or "continue," or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Payoneer and its management, as the case may be, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (1) changes in applicable laws or regulations; (2) the possibility that Payoneer may be adversely affected by geopolitical events and conflicts, such as Israel's ongoing conflicts in the Middle East, and other economic, business and/or competitive factors, such as trade policies (including tariffs); (3) changes in the assumptions underlying our financial estimates; (4) the outcome of any known and/or unknown legal or regulatory proceedings; and (5) other risks and uncertainties set forth in Payoneer's Annual Report on Form 10-K for the period ended December 31, 2024 and future reports that Payoneer may file with the SEC from time to time. Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Payoneer does not undertake any duty to update these forward-looking statements.

Financial Information; Non-GAAP Financial Measures

Some of the financial information and data contained in this press release, such as adjusted EBITDA, have not been prepared in accordance with United States generally accepted accounting principles ("GAAP"). Payoneer uses these non-GAAP measures to compare Payoneer's performance to that of prior periods for budgeting and planning purposes. Payoneer believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Payoneer's results of operations. Payoneer's method of determining these non-GAAP measures may be different from other companies' methods and, therefore, may not be comparable to those used by other companies and Payoneer does not recommend the sole use of these non-GAAP measures to assess its financial performance. Payoneer management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in Payoneer's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. You should review Payoneer's financial statements, which are included in Payoneer's Annual Report on Form 10-K for the year ended December 31, 2024 and its subsequent Quarterly Reports on Form 10-Q, and not rely on any single financial measure to evaluate Payoneer's business.

Non-GAAP measures include the following item:

Adjusted EBITDA: We provide adjusted EBITDA, a non-GAAP financial measure that represents our net income (loss) adjusted to exclude, as applicable: M&A related expense (income), stock-based compensation expenses, restructuring charges, share in losses (gain) of associated company, loss (gain) from change in fair value of warrants and warrant repurchase/redemption, other financial expense (income), net, income taxes, and depreciation and amortization.

Other companies may calculate the above measure differently, and therefore Payoneer's measures may not be directly comparable to similarly titled measures of other companies.

In addition, in this earnings release, we reference volume, which is an operational metric. Volume refers to the total dollar value of transactions successfully completed or enabled by our platform, not including orchestration transactions. For a customer that both receives and later sends payments, we count the volume only once. We also reference ARPU (Average Revenue Per User), which is defined as the Revenue from Active Customers divided by the number of Active Customers over the period in which the Revenue was earned. Active Customers for these purposes are defined as Payoneer accountholders with at least 1 financial transaction over the period. Revenue from Active Customers represents revenue attributed to Active Customers based on their use of the Payoneer platform, including interest income earned from their balances, and excluding revenues unrelated to their activities.

Disaggregation of revenue

The following table presents revenue recognized from contracts with customers as well as revenue from other sources:

The following table presents the Company's revenue disaggregated by primary regional market, with revenues being attributed to the country (in the region) in which the billing address of the transacting customer is located, with the exception of global bank transfer revenues, where revenues are disaggregated based on the billing address of the transaction funds source.

Note that the Company has updated the definition of its primary regional markets to align with the view used by Management. This update eliminates South Asia, Middle East and North Africa as a separate region and instead includes revenues from South Asia in the Asia-Pacific region and Middle East and North Africa in the Europe, Middle East, and Africa region. The update has been applied to all periods reflected in the table below.

1. Greater China is inclusive of mainland China, Hong Kong, Macao and Taiwan.
2. No single country included in any of these regions generated more than 10% of total revenue.
3. The United States is the Company's country of domicile. Of North America revenues, the U.S. represents $28,194 and $22,452 during the three months ended December 31, 2024 and 2023, and $95,794 and $93,371 during the years ended December 31, 2024 and 2023, respectively.

1. Represents non-cash charges associated with stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy.
2. Amounts relate to M&A-related third-party fees, including related legal, consulting and other expenditures. Additionally, amounts for 2024 include $1.8 million in non-recurring fair value adjustment of the Skuad contingent consideration liability.
3. Changes in the estimated fair value of the warrants are recognized as gain or loss on the consolidated statements of comprehensive income. The impact is removed from EBITDA as it represents market conditions that are not in our control.
4. Amounts relate to a non-recurring loss on the repurchase and redemption of outstanding public warrants.
5. The Company initiated a plan to reduce its workforce during the year ended December 31, 2023 and had non-recurring costs related to severance and other employee termination benefits.

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Investor Contact: Caius Slater investor@payoneer.com Media Contact: Alison Dahlman PR@payoneer.com