Paysafe raises full-year revenue guidance after Q2 success

Revenue hit $402.3m for the three months ended 30 June. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was $113.0m, up by 9.8%.

Performance in both Q1 and Q2 prompted Paysafe to increase its full-year outlook to between $1.59bn and $1.60bn. Prior guidance projected full-year revenue between $1.58bn and $1.60bn.

Bruce Lowthers, CEO of Paysafe, said the revenue had been aided by small and medium sized business (SMB) volume and ecommerce, as well as improvements in online gaming performance in North America.

“We are pleased with our results through the first half of 2023, including 6% revenue growth and 7% adjusted EBITDA growth, driven by strong volumes across SMB and ecommerce, particularly North America igaming, as well as progress in classic digital wallets, where we continue to see improved user engagement,” said Lowthers.

“Based on our results to date, we are raising our full-year 2023 revenue growth outlook to the range of 6.5% to 7.5%, while maintaining more than 100 basis points in adjusted EBITDA margin expansion this year.”

North America operations improve overall revenue

The 6.0% growth in Paysafe’s merchant solutions segment was attributed to igaming operations in North America during the quarter. In May, Paysafe launched an updated version of its Skrill digital wallet for customers based in Ontario.

Merchant solutions generated $225.6m in revenue for the three months. Digital wallets accounted for $179.0m, while intersegment revenue incurred a loss of $2.4m.

Turning to Q2 expenses, cost of services hit $166.6m. Selling, general and administrative expenses were $133.6m, while depreciation and amortisation costs were $66.4m.

Impairment charge widens year-on-year increases

Impairment expense on goodwill and intangible assets was $193,000, a staggering difference from the $676.4m impairment charge noted in Q2 2022.

Paysafe recognised the impairment charge during the prior corresponding quarter due to a decline in its market capitalisation.

Following restructuring costs, operating profit was $34.1m, significantly higher than the operating loss of $703.0m year-on-year.

Other income of $7.3m, combined with interest expense of $36.7m, brought the pre-tax profit to $4.7m, marking another significant yearly increase of $680.1m.

Paysafe paid tax of $6.5m throughout the year. This brought the total net loss to $1.7m.

Half-year revenue ticks up

Looking to the half-year results, revenue for the six months to 30 June came to £790.1m, up by 5.8%.

Due to the impairment charge in Q2 2022, there was once again a major difference in impairment expense for the second quarter of 2023. This totalled $275,000, compared to $1.88bn year-on-year.

The total costs for the period resulted in operating profit of $69.1m. Other income at $9.9m and interest expense at $74.2m resulted in pre-tax profit of $4.8m.

After income tax expense of $10.4m, the net loss for the period was $5.5m.