Paysafe Reports Fourth Quarter and Full Year 2021 Results; Provides 2022 Outlook
March 02 2022 - 06:55AM
Paysafe Limited (“Paysafe” or the “Company”) (NYSE: PSFE) (PSFE.WS), a leading specialized payments platform, today announced its financial results for the fourth quarter and full year 2021 and financial outlook for full year 2022.
Fourth Quarter 2021 Financial Highlights
(Metrics compared to fourth quarter of 2020)
Total Payment Volume of $31.5 billion, increased 20%
Revenue of $371.7 million, approximately flat
Net income attributable to the Company of $90.3 million, compared to net loss of $3.4 million
Adjusted EBITDA of $105.5 million, increased 11%
Full Year 2021 Financial Highlights
(Metrics compared to full year 2020)
Total Payment Volume of $122.4 billion, increased 22%
Revenue of $1,487.0 million, increased 4%
Net loss attributable to the Company of $111.0 million, compared to net loss of $126.7 million
Adjusted EBITDA of $443.9 million, increased 4%
“We are pleased with our fourth quarter results which exceeded our revised guidance for revenue and adjusted EBITDA. We saw continued strong performance from US Acquiring and the turnaround of our digital wallet business is well underway with the actions we’ve taken driving positive results, repositioning the business for success, and enabling us to absorb market risks in Europe,” said Philip McHugh, CEO of Paysafe. “We continue to win and pursue competitive deals with some of the most disruptive companies in high growth verticals, such as North America iGaming and crypto, and our teams remain extremely focused on delivering on our commitments, positioning Paysafe for strong future growth.”
Recent Strategic and Operational Highlights
Launched embedded finance solution and partnership with Binance, the world’s largest crypto exchange by volume, to enable frictionless payments
Expanded into New York sports-betting market with multiple brands, strengthening Paysafe’s position as a leader in North American iGaming payments
Announced new North American iGaming partnerships, including Hard Rock Digital and Bally’s
Strong growth from US Acquiring – volume increased 35% for the fourth quarter and full year 2021
Completed the acquisition of SafetyPay, establishing Paysafe as the leading provider of real-time banking solutions in Latin America
Exceeded cost savings program target, delivering ~$40 million in 2021 (initial target of $30 million)
Board Update
In a separate press release issued today, Paysafe also announced the appointment of Daniel Henson as non-executive chairman of its board of directors. The appointment follows the decision of William P. Foley II to step down as chairman and board member to focus on other commitments.
Changes to Segment Reporting Structure
Beginning in the fourth quarter of 2021, Paysafe has changed its reportable segments as follows:
Digital Commerce, combining the Company's digital wallets and eCash businesses, as well as the integrated & eCommerce business.
The digital wallets and eCash businesses were previously separate segments.
The integrated & eCommerce business was previously included within the Integrated Processing segment.
US Acquiring, previously included within the Integrated Processing segment.
The Company believes this new segment presentation better aligns with Paysafe's strategy and positions the business in a more customer-focused manner across Paysafe's targeted industry verticals. It also better aligns with how Paysafe management reviews its financial results to drive key decisions about the business.
These changes solely impact Paysafe’s segment reporting and there is no change to previously reported consolidated results. The summary of segment results presented in this press release reflects the new reporting structure. The recast of certain financial information for 2020 and 2021, together with the corresponding financial information for the prior reporting structure, are available within the materials accompanying this press release.
Total revenue for the fourth quarter of 2021 was $371.7 million, compared to $370.3 million in the prior year. Growth from US Acquiring and the contribution from the 2021 acquisitions of PagoEfectivo and viafintech was offset by declines in Digital Commerce, including unfavorable market headwinds related to gambling regulations in Europe, which impacted the eCash and digital wallets businesses. Additionally, the prior year comparison reflects strong volumes from eCash in the fourth quarter of 2020 associated with COVID-19 lockdowns in Europe.
Net income attributable to the Company for the fourth quarter was $90.3 million, compared to net loss of $3.4 million in the prior year, primarily reflecting a $64.1 million fair value gain on the remeasurement of the warrant liability at period-end as well as a $19.9 million decrease in interest expense related to the Company’s debt refinancing completed in June of 2021.
Adjusted EBITDA for the fourth quarter was $105.5 million, an increase of 11%, compared to $95.3 million in the prior year. Adjusted EBITDA margin increased to 28.4%, compared to 25.7% in the prior year, primarily reflecting lower credit losses, the accretive impact of acquisitions and a fourth quarter 2020 payback of previous COVID-19 related salary reductions, which more than offset the impact of unfavorable business mix in 2021.
Fourth quarter net cash from operating activities was $131.9 million, compared to $236.3 million in the prior year. Free cash flow was $53.1 million, compared to $116.8 million in the prior year.
Full Year 2021 Results
Total revenue for the full year 2021 was $1,487.0 million, an increase of 4%, compared to $1,426.5 million in the prior year. Growth was partially offset by a $24.0 million impact of a business divestiture (Pay Later) in October of 2020. Excluding Pay Later, revenue increased 6%. Revenue performance compared to the prior year also reflects actions taken to improve the Company’s overall risk/reward profile in certain markets and channels, including the exit of certain clients in the direct marketing vertical.
Excluding the divested business and the direct marketing vertical, growth from all other revenue was approximately 10% compared to 2020, reflecting strong growth from US Acquiring for retail merchants, fueled by the economic recovery as a result of the easing of COVID-19 related lockdowns and increased consumer confidence. In Digital Commerce, growth was led by the eCash business, which benefited from higher gaming and sports betting volumes related to extended COVID-19 lockdowns in Europe and an associated increase in online consumer spending, as well as growth from integrated & eCommerce solutions, including iGaming and other specialized verticals. Growth was partially offset by a decline from digital wallets, reflecting market impacts in Europe associated with gambling regulations in addition to the impact of targeted actions and country exits that occurred in the prior year.
Net loss attributable to the Company for the full year 2021 was $111.0 million, compared to a loss of $126.7 million in the prior year. This decrease in net loss was primarily driven a fair value gain on the Company’s warrant liability and an increase in income tax benefit, partly offset by a non-cash impairment charge to reduce the carrying value of intangible assets in the Digital Commerce segment.
Adjusted EBITDA for the full year 2021 was $443.9 million, an increase of 4%, compared to $425.8 million in the prior year. Adjusted EBITDA margin was 29.9%, compared to 29.8% in the prior year as cost optimization offset an unfavorable business mix.
Net cash from operating activities for 2021 was $224.5 million, compared to $409.1 million in the prior year. Free cash flow was $286.3 million, compared to $356.3 million in the prior year.
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