• Revenue: $262 million in Q4, up 17% year-over-year.
• Volume Growth: 18% in Q4, with SMB volumes up 18% and B2B volumes up 37% year-over-year.
• Adjusted EBITDA: $63 million in Q4, representing a 24% margin.
• Net Income: $18 million in Q4.
• Cash and Cash Equivalents: $497 million at the end of Q4.
• Customer Funds Held: $7 billion, up 9% year-over-year.
• Interest Income: $61 million in Q4.
• Operating Expenses: $233 million in Q4, up 17% year-over-year.
• Transaction Costs: $43 million in Q4, representing 16.5% of revenue.
• 2025 Revenue Guidance: $1,040 million to $1,050 million.
• 2025 Adjusted EBITDA Guidance: $255 million to $265 million, with a margin of approximately 25%.

• Warning! GuruFocus has detected 6 Warning Signs with PAYO.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Payoneer Global Inc (NASDAQ:PAYO) achieved a record-breaking 2024 with significant growth in volume, revenue, and profitability.
• Revenue growth excluding interest income accelerated from 5% in 2023 to 20% in 2024, with B2B volume growing 42% year-over-year.
• Customer adoption of three or more AP products reached 53% of total usage in Q4 2024, a 30% increase over Q1 2022.
• Payoneer Global Inc (NASDAQ:PAYO) delivered three consecutive quarters of positive adjusted EBITDA excluding interest income.
• The company expanded its financial stack with the acquisition of Squad, positioning itself to capture share in global workforce management.

Negative Points

• The Q4 take rate decreased by 2 basis points year-over-year and 6 basis points sequentially, primarily driven by lower interest income.
• Total operating expenses increased by 17%, driven by labor-related expenses, higher transaction costs, and consultancy fees.
• Transaction costs represented 16.5% of revenue, an increase of 30 basis points from the prior year period.
• Sales and marketing expenses increased by 14% year-over-year, driven by higher labor-related costs and increased spend on card incentives.
• R&D expenses increased by 15%, reflecting higher labor-related costs and increased headcount.

Q & A Highlights

Q: Could you discuss the macro assumptions underpinning your guidance and any potential upside or downside? A: Beatrice Ordonez, CFO, explained that their guidance reflects expected business performance and market conditions. They anticipate marketplace volume growth to normalize to high single digits and B2B growth at about 25%. This results in low double-digit volume growth for SMBs, with revenue expected to grow faster than volume due to take rate dynamics.

Q: How do you view the impact of tariffs and the de minimis loophole on your business? A: Beatrice Ordonez stated that the de minimis rule is not significantly impactful, with less than 3% of their China volume affected. The business is diversified across goods, services, and trade routes, proving resilient to trade policy changes.

Q: Can you elaborate on the expected revenue growth excluding interest income and its cadence throughout the year? A: Beatrice Ordonez noted a step down to 15% growth in 2025 from 26% in 2024, driven by normalization in marketplace and B2B volumes. They expect mid-teens growth in Q1 and Q2, with modest acceleration in the latter half of the year.

Q: What are the opportunities for ARPU optimization, and how do you plan to execute this in 2025? A: Beatrice Ordonez highlighted continued take rate expansion through accelerated B2B growth, cross-selling high-value products like cards and checkout, and ongoing pricing strategies. They expect modest take rate expansion in 2025.

Q: Could you provide an update on the acquisition in mainland China and its potential impact? A: John Caplan, CEO, mentioned that regulatory approvals have been received, and they expect to close in the first half of the year. The acquisition will enhance their competitive position in China, offering opportunities for outbound money flows and improved cost structures.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.