Impairment brings Paysafe FY22 net loss to $1.86bn

The payments platform total revenue grew in 2022 by 0.6% from the previous year.

The company has undergone multiple strategic and operational changes to the business. It expanded into the Ohio sports betting market, contributing to the 25 different US states in which Paysafe offers its services. 

Reflecting on the FY22 and Q4 results, Paysafe CEO Bruce Lowthers, commented: “We are pleased with our progress and fourth quarter financial results, including 8% year-over-year constant currency revenue growth,” he said. “When I joined Paysafe, we said our focus would be on returning to growth in the back half of the year and into 2023, and we have done exactly that.

“We have recruited high-calibre talent, simplified and re-positioned the business and re-built our sales organisation, which is driving early success in cross-selling and multi-product client wins.” 

As of the final day of 2022, total cash and cash equivalents were $260.2m, total debt was $2.60bn and net debt was $2.40bn. 

Q4 results 

Looking at the financial performance in the fourth quarter; revenue increased by 3% from $371.6m in the previous year’s Q4 to $383.6m in 2022. Not including the $17.6m lost to foreign exchange rates, the revenue increase would have been 8% year-on-year.  

Notably, Paysafe reported a net loss $33.7m for the quarter, down from the $90.3m profit the business achieved the previous year. The payments platform attributed this huge loss to fair value gain on the remeasurement of the warrant liability and income tax benefit in 2021. In addition to increases in interest expense and share-based compensation expense in 2022’s Q4, the year-on-year decrease is significant.  

Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for the company rose by 2% from $105.5m to $107.6m year-on-year. Due to the impact from changes in foreign exchange rates, the company reported this figure would be around 6% were it not for the unfavourable loss.   

Full-year results 

Shifting now to FY22, revenue for the full year increased by 1% from $1.49bn to $1.50bn year-on-year. Paysafe attributes this to revenue growth from Merchant Solutions by 10% that offset the 9% loss Digital Wallets experienced. Again, the company notes the loss from changing exchange rates as a contributing factor in the overall revenue. 

Net loss this year was a tremendous $1.86bn, compared to 2021’s $111.0m. However, this is due to non-cash charges from the impairment of goodwill and intangibles from 2022.  

In contrast to Q4, adjusted EBITDA for FY22 decreased by 8% from $433.9m in 2021 to $410.0m in 2022. The company notes foreign exchange rates, business mix and the war between Russia and Ukraine as contributing factors to the loss.  

These factors also impacted the net income loss of 26% from $185.8m to $137.0m year-on-year.  

Plans for 2023 

Bruce Lowthers highlighted customer-centricity as key to the business’ plans in the year ahead.  

He commented: “Looking ahead, we remain relentlessly focused on client experience, product innovation and further sales transformation to fully leverage our assets globally and capture meaningful growth opportunities for years to come.”