In a noteworthy financial update, Paysafe, a leading payments provider, has reported an 8% increase in revenue, attributing a significant portion of its success to rapid growth in ecommerce solutions and established digital wallets. The rise in revenue, amounting to $396.4 million, reflects confidence in the firm’s continuing growth trajectory as it redefined previous forecasts that projected a full-year revenue of between $1.58 billion to $1.60 billion, elevating estimates to between $1.59 billion and $1.60 billion.
This financial growth emerges despite fluctuating foreign exchange rates, with an $11.9 million favorable adjustment noted. Even with such currency considerations set aside, revenue was up by 5% on a constant currency basis.
Paysafe’s Merchant Solutions segment demonstrated a sturdy performance with a 6% revenue increase to $216.8 million, steered by ecommerce solutions’ double-digit ascent. Making up 54% of Paysafe’s total income, this unit remains a critical pillar in their financial structure, mirroring its position from the previous year.
Meanwhile, the Digital Wallets segment soared by 12% to $182.9 million, illustrating a robust foothold in the industry. On a constant currency basis, the growth amounted to 5%. Despite witnessing a downturn in ecash solutions, the gains were more than recouped by the vigorous performance of classic digital wallets. Initiatives to amplify user engagement and enhance merchant checkout conversion rates are among the key drivers of this success. The addition of novel features and the generation of interest revenue on consumer deposits also bolstered this expansion.
Operational strides have been apparent across client experience and product innovation. Paysafe’s efforts have manifested in a continual enhancement to its branded wallet portfolio, improvement of customer journey, and the streamlining of the merchant checkout experience.
Financially, the third quarter revealed a net loss of $2.5 million attributable to the company. Nevertheless, adjusted net income for the same quarter presented a brighter picture with a 21% increment to $35.3 million. This surge in adjusted EBITDA counterbalanced heightened costs stemming from depreciation, amortization, interest, and taxes. Cost of services, excluding depreciation and amortization, escalated by 8.7%, but this was partly offset by an 8.3% reduction in selling, general, and administrative costs.
Adjusted EBITDA for the third quarter was particularly noteworthy, hitting $116.1 million, an increase of 22% from the previous year’s $95.5 million. This growth further stood firm against currency rate variances, rising by an impressive 18% after excluding a $3.4 million favorable currency impact. The Adjusted EBITDA margin for this period thus leapt by 320 basis points to 29.3%, up from 26.1% in 2022, a reflection of diminished credit losses and sustained operating leverage.
Bruce Lowthers, CEO of Paysafe, expressed confidence in the company’s strategic course and its ability to meet mid-term growth objectives. He acknowledged the dedication of the Paysafe team, whose exceptional efforts have enabled the firm to align more closely with its pursuit of operational excellence.
Reviewing the nine-month period up to September 30, revenue climbed by 6.3% to $1.19 billion, with adjusted EBITDA growing by 11.3% to $336.9 million. In a strategic move to buttress this growth momentum, Nicole Carroll was appointed as chief strategy and innovation officer earlier this year. Carroll is now at the forefront of guiding Paysafe’s corporate vision, driving long-term strategy, and leading product innovation and capital expenditure programs.
Furthermore, Paysafe has strengthened its market position through a noteworthy collaboration with Fanatics Sportsbook, integrating its services to offer traditional card payments along with alternative payment methods across five US states. The provider enables Fanatics’ customers in Kentucky, Maryland, Massachusetts, Ohio, and Tennessee to transact using debit cards, alternative payment methods, and Paysafecash—a barcode-based online cash solution.
Zak Cutler, president of global gaming at Paysafe, remarked with pride on the partnership with Fanatics Betting and Gaming. Highlighting the strength of the Fanatics brand within the sports sector, he assured that Paysafe’s comprehensive payment solutions will not only meet but exceed the transactional needs of Fanatics Sportsbook’s diverse clientele.
