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01/11 11:27
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary shows a mixed picture: solid revenue growth and a strong cash position are positive, but the suspension of full-year guidance and potential revenue headwinds are concerning. The Q&A section reveals confidence in navigating tariffs, interest in stable coins, and strategic growth, but lacks clarity on tariff impacts and guidance. Given the company's small-cap status, the market may react within a neutral range (-2% to 2%) as investors weigh these factors.
Revenue $261 million, up 9% year-over-year. Revenue excluding interest income reached $202 million, a quarterly record, up 16% year-over-year. Growth driven by B2B franchise, adoption of high-value products and services, and pricing strategy.
Adjusted EBITDA $66 million, representing a 25% margin. This is the fifth consecutive quarter of positive adjusted EBITDA excluding interest income. Adjusted EBITDA for the first 6 months of 2025 exceeded the full year of 2024.
Net Income $19 million, compared to $32 million in the second quarter of last year. Basic and diluted earnings per share were both $0.05, down from $0.09 in the prior year period.
Total Volume Up 11% year-over-year. SMB volume grew 9%, with volume from SMBs selling on marketplaces up 6%, B2B SMBs up 19%, and checkout volumes up 83%. Enterprise payout volume increased 15% year-over-year.
Take Rate Q2 take rate of 126 basis points, decreased 2 basis points year-over-year due to lower interest income. SMB customer take rate increased 9 basis points year-over-year and 1 basis point sequentially.
Customer Funds Held Increased 17% year-over-year to $7 billion, demonstrating customer trust and platform utility.
Transaction Costs $41 million, increased 10% year-over-year, representing 15.6% of revenue, up 20 basis points from the prior year due to lower interest income. Excluding interest income, transaction costs represented 20.1% of revenue, a decrease of 120 basis points year-over-year.
Operating Expenses $231 million, increased 19% year-over-year, driven by labor-related expenses, transaction costs, consultancy fees, and investments in card product scaling and acquisitions.
R&D Expense Increased $10 million or 36% year-over-year, mainly due to higher labor-related costs and acquisitions.
G&A Expense Increased $11 million or 42% year-over-year, primarily due to higher legal and consulting fees and labor-related costs.
Cash and Cash Equivalents $497 million at the end of the quarter, reflecting strong cash generation. Operating cash flows significantly exceeded net income over the last 12 months.
B2B revenue growth: Grew 37% in Q2, led by largest customer segments.
Checkout volumes: Increased by 83% year-over-year.
Card products: Substantial growth with nearly $6 billion of card usage over the trailing 12 months.
Stable coin and blockchain-enabled payment technology: Actively exploring enablement for customers, including sending and receiving stable coins.
China market: Approximately 1/3 of China revenue came from sellers selling to non-U.S. markets. China B2B business grew mid-single digits in Q2.
APAC, LATAM, and EMEA regions: Delivered mid-20% volume growth and continued take rate expansion.
Strategic partnership with Stripe: Launched to expand global checkout footprint and enhance product capabilities.
Adjusted EBITDA: Delivered $66 million in Q2, representing a 25% margin.
Revenue excluding interest income: Reached $202 million, a quarterly record, up 16% year-over-year.
Customer funds held: Increased 17% year-over-year to $7 billion.
New technology hub in Gurgaon, India: Opened to drive innovation and efficiency.
Share repurchase program: Announced a refreshed $300 million buyback authorization.
Mastercard partnership: Signed a new long-term agreement to deepen collaboration and launch an SMB growth hub.
Global macro and tariff environment: Modest softening in volumes from large e-commerce marketplaces, likely in response to the global macro and tariff environment, which could impact revenue growth.
China B2B franchise: Slower growth in the China B2B franchise compared to other regions, which could affect overall B2B revenue growth.
Transaction costs: Higher transaction costs in certain geographies and products, driven by business mix shift towards higher take rate products, which could impact profitability.
Regulatory licensing efforts: Incremental investments in regulatory licensing efforts in key jurisdictions, which could increase operational costs and complexity.
Interest income sensitivity: Lower interest income due to fluctuations in short-term interest rates, which could impact overall revenue.
Labor-related expenses: Increases in labor-related expenses, including from acquisitions, which could pressure operating margins.
Global economic uncertainties: Uncertain macroeconomic environment leading to moderated customer usage behavior in certain key markets, potentially affecting growth.
Tariff environment: Potential changes in global tariffs, particularly between the U.S. and China, which could impact trade volumes and revenue.
Technology and R&D investments: Higher R&D expenses due to investments in technology hubs and innovation, which could strain short-term financials.
Revenue Guidance for 2025: Payoneer expects total revenue between $1,040 and $1,060 million for 2025, including $225 million from interest income and $815 million to $835 million excluding interest income. Growth rate for revenue excluding interest income is expected to remain consistent from Q3 to Q4.
Volume Growth Expectations: High single-digit growth in total volume is anticipated for the second half of 2025. SMB volume from marketplaces is expected to grow mid-single digits, while B2B volume is projected to grow mid-teens overall, with low double-digit growth in Q3 and high teens growth in Q4.
B2B Revenue Growth: B2B revenue is expected to grow approximately 25% in the second half of 2025, driven by strong growth in regions outside China, partially offset by slower growth in the China B2B franchise.
Transaction Costs: Transaction costs as a percentage of revenue are expected to be approximately 16.5% for 2025, reflecting a mix shift towards higher take rate and higher transaction cost products and geographies.
Adjusted EBITDA Guidance: Adjusted EBITDA for 2025 is projected to be between $260 million and $275 million, representing an adjusted EBITDA margin of approximately 25%. Excluding interest income, adjusted EBITDA is expected to be $43 million at the midpoint, over three times the amount generated in 2024.
Strategic Investments: Incremental investments are planned in regulatory licensing efforts, scaling the card product, and stable coin-focused initiatives, while still exceeding the 25% adjusted EBITDA margin target.
Blockchain and Treasury Management: Payoneer is actively working on blockchain technology initiatives, including real-time treasury management capabilities and on-chain fund transfers in collaboration with Citi, with plans to expand these capabilities to additional markets in the coming quarters.
Mastercard Partnership: A new long-term agreement with Mastercard has been signed, including the launch of an SMB growth hub to drive innovation and engagement globally.
Share Repurchase Program: In Q2, Payoneer nearly doubled its share repurchases compared to Q1, buying back approximately $33 million worth of shares at a weighted average price of $6.80. Additionally, the company announced a refreshed $300 million buyback authorization, reflecting confidence in the value of its business and financial performance.
The earnings call summary and Q&A section reveal strong financial performance, optimistic guidance, and strategic partnerships (e.g., Mastercard). Despite some challenges like tariffs and macro volatility, management's focus on profitability and innovation, particularly in B2B growth and stablecoin technology, is promising. The market cap suggests moderate volatility, leading to a positive stock price outlook.
The earnings call summary shows a mixed picture: solid revenue growth and a strong cash position are positive, but the suspension of full-year guidance and potential revenue headwinds are concerning. The Q&A section reveals confidence in navigating tariffs, interest in stable coins, and strategic growth, but lacks clarity on tariff impacts and guidance. Given the company's small-cap status, the market may react within a neutral range (-2% to 2%) as investors weigh these factors.
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