Paysafe Limited (NYSE:PSFE) Q1 2023 Earnings Conference Call May 16, 2023 8:30 AM ET

Company Participants

Kirsten Nielsen - Head, IR

Bruce Lowthers - CEO and Executive Director

Alex Gersh - CFO

Conference Call Participants

James Friedman - Susquehanna Financial Group

Timothy Chiodo - Crédit Suisse

Aditya Buddhavarapu - Bank of America

Operator

Hello and welcome to the Paysafe Q1 2023 Earnings Conference Call and Webcast. [Operator Instructions]. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Kirsten Nielsen, Head of Investor Relations. Please go ahead, Kirsten.

Kirsten Nielsen

Thank you, and welcome to Paysafe’s Earnings Conference Call for the First Quarter of 2023. Joining me today are Bruce Lowthers, Chief Executive Officer; and Alex Gersh, Chief Financial Officer.

Before we begin, a reminder that this call will contain forward-looking statements and should be considered in conjunction with cautionary statements contained in our earnings release and the Company’s most recent SEC reports. These statements reflect management’s current assumptions and expectations and are subject to factors that could cause actual results to differ materially from those forward-looking statements. You should not place undue reliance on these statements. Forward-looking statements during this call speak only as of the date of this call, and we undertake no obligation to update them. Today’s presentation also contains non-GAAP financial measures. You can find additional information about these non-GAAP measures and reconciliations to the most directly comparable GAAP financial measures in today’s press release and in the appendix of this presentation, which are available on the Investor Relations section of our website. With that, I’ll turn the call over to Bruce.

Bruce Lowthers

Thanks Kirsten and thank you everyone for joining us today. If you are following along our webcast let’s begin on Slide 3. After returning to growth in the back half of 2022, we kicked off 2023 by delivering our strongest quarter revenue since the IPO. First quarter revenue was $388 million exceeded our guidance range and increased 7% year-over-year on a constant currency basis. We recorded 8% growth in the Merchant Solutions segment including double-digit e-commerce growth. In Digital Wallets revenue increased 6% on a constant currency basis including strong performance from our classic Digital Wallets.

In first quarter adjusted EBITDA of $108 million was at the high end of our guidance, and increased 5% year-over-year on a constant currency basis. Excluding one-off personnel expenses related to executive severance, adjusted EBITDA would have increased approximately 7% in line with our constant currency revenue growth. Throughout the turbulence in the banking market Paysafe has been unaffected by the failures of SVB, Signature, Silvergate or First Republic and we have no direct relationships with these institutions. We operate a network of roughly 100 banks globally and always look to build resilience into our payment flows so that we can route payments through other partners as needed. We have robust safeguarding in place to ensure the ring fencing of customer funds, and we operate our acquiring business in the U.S. through FBO accounts to further manage any risk of our customers. Our U.S. customer balances are supported by passthrough FDIC insurance.