- Payments platform Paysafe Ltd PSFE reported second-quarter FY21 revenue growth of 13% year-on-year to $384.3 million, beating the analyst consensus of $378.45 million.
- Segments: Integrated Processing revenue grew 7.2% Y/Y to $191.2 million driven by the U.S. Acquiring business, which continued to gain from the macroeconomic recovery, and growth across integrated eCommerce, including iGaming and other specialized eCommerce verticals.
- Digital Wallet revenue rose 6.8% Y/Y to $97.3 million driven by favorable foreign currency movement, a higher level of sporting events, and crypto and trading activity.
- eCash Solutions revenue increased 36.7% Y/Y to $103.9 million, supported by extended lockdowns in Europe and a corresponding increase in online consumer spending.
- Margin: The adjusted EBITDA margin contracted 150 bps to 30.9%, reflecting business mix, including the headwind from the high margin direct marketing vertical.
- Digital Wallet and eCash Solutions' Adjusted EBITDA margins grew while Integrated Processing's margins fell.
- Paysafe held $247.8 million in cash and equivalents and used $7.7 million in operating cash flow.
- Outlook: Paysafe sees Q3 revenue of $360 million – $375 million, below the analyst consensus of $389.1 million.
- The company reiterated FY21 revenue of $1.53 billion - $1.55 billion against the analyst consensus of $1.55 billion.
- Acquisition: Additionally, Paysafe agreed to acquire SafetyPay for $441 million in an all-cash transaction.
- SafetyPay is a payments platform that enables eCommerce transactions open banking and eCash solutions, operating primarily in Latin America.
- The arrangement strengthens Paysafe's strategic foothold in Latin America, building on its recently announced acquisition agreement with Peruvian payments platform, PagoEfectivo.
- The transaction is likely to close in Q4 of 2021.
- Price Action: PSFE shares traded lower by 2.94% at $9.90 in the premarket session on the last check Monday.
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