Paysafe (NYS:PSFE) released earnings today and is down ~20%.
We have added to our position, with the stock now trading at 7.6x EV/EBITDA. We were surprised at the market reaction since results were pre-released on 2/11, with no new surprises.
The price action is likely driven by flat revenue guidance for 2024, but this was anticipated. Paysafe divested a low quality ~$100mm revenue business and is guiding for 8% organic growth to offset the lost revenue.
Full Year 2024 Earnings Release
- Total Revenue: $769M for full-year 2024 (+12% YoY)
- Adjusted EBITDA: $452 million (-2% YoY, slightly below market expectations due to increased sales personnel and tech investments)
2025 Guidance
- Revenue: $1,710mm – $1,734mm
- Adjusted EBITDA: $463mm – $478mm
- “Paysafe’s outlook reflects organic revenue growth in the range of 6.5% to 8.0% and Adjusted EBITDA margin in the range of 27.1% to 27.6%, with Adjusted EBITDA growth in the mid-teens. Paysafe continues to expect to generate strong free cash flow and to reduce leverage, including the Company’s goal to achieve 3.5x net leverage by the end of 2026.”
Payment volumes continue to increase nicely and take rates remain steady. We like Paysafe’s positioning.
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