Payoneer Inc. ((PAYO)) has held its Q4 earnings call. Read on for the main highlights of the call.
Payoneer’s Earnings Call Highlights Record Growth Amid Challenges
Payoneer Inc. recently held its earnings call, revealing a year of record-breaking achievements despite facing some challenges. The overall sentiment was positive, with notable revenue and volume growth, particularly in the B2B and card usage segments. The company’s successful launch of new products and a strategic acquisition further contributed to its strong performance. However, issues such as a decreased take rate, increased operating expenses, and the impact of declining interest rates were acknowledged. Nevertheless, the highlights of the year significantly outweighed these challenges, indicating robust execution and growth potential.
Record-Breaking Revenue and Growth
Payoneer reported impressive financial results, with a 21% increase in volume growth and a 20% rise in revenue excluding interest income. The company achieved $271 million in adjusted EBITDA, representing a 28% adjusted EBITDA margin for 2024. This performance underscores Payoneer’s strong market position and effective growth strategies.
Strong B2B Performance
The B2B segment was a standout performer, with volume growth of 42% year-over-year. This exceeded initial targets and 2023 performance, highlighting the segment’s strong product market fit with service-oriented SMBs. This growth trajectory positions Payoneer well for continued success in this area.
Card Usage Growth
Card usage saw a significant increase of 36% year-over-year, with broad-based growth across all regions. This reflects strong customer adoption and the effectiveness of Payoneer’s strategies to enhance card usage among its clientele.
Successful New Product Launches
Payoneer successfully launched several key products, including the lite account, ERP integrations, and the Green Channel portal in China. These launches have enhanced customer access to global demand, further solidifying Payoneer’s competitive edge.
Strategic Acquisition
The acquisition of Skuad expanded Payoneer’s financial stack, positioning the company to capture a larger share in global workforce management. This strategic move aligns with Payoneer’s growth objectives and enhances its service offerings.
Positive Adjusted EBITDA
Payoneer achieved three consecutive quarters of positive adjusted EBITDA excluding interest income, culminating in $14 million of positive adjusted EBITDA for the full year. This marks a significant turnaround from a loss in 2023, demonstrating improved financial health.
Share Repurchase Program
The company exceeded its target by repurchasing $137 million worth of shares in 2024, doubling its share repurchases compared to 2023. This move reflects Payoneer’s confidence in its growth prospects and commitment to returning value to shareholders.
Decreased Take Rate
Payoneer experienced a decrease in its take rate, with Q4 figures showing a drop of 2 basis points year-over-year and 6 basis points sequentially. This was primarily due to lower interest income, presenting a challenge for the company.
Increased Operating Expenses
Operating expenses rose by 17%, totaling $233 million. This increase was driven by labor-related expenses, higher transaction costs, consultancy fees, and seasonal cashback incentive programs, impacting the company’s cost structure.
Impact of Declining Interest Rates
The company anticipates a decline in interest income in 2025, which is expected to increase transaction costs as a percentage of revenue to approximately 18%. This poses a potential challenge for Payoneer’s financial performance.
Forward-Looking Guidance
Looking ahead, Payoneer provided robust guidance for 2025, forecasting revenue between $1,040 million and $1,050 million, including $215 million of interest income. The company expects adjusted EBITDA to be between $255 million and $265 million, reflecting a 25% adjusted EBITDA margin. Payoneer aims to sustain growth by enhancing its ICP strategy, improving cross-sell, retention, and pricing, and expanding its platform through modernization and strategic acquisitions.
In conclusion, Payoneer’s earnings call highlighted a year of significant achievements and growth, despite some challenges. The company’s strong performance in revenue and volume growth, successful product launches, and strategic acquisitions underscore its robust execution and growth potential. With a positive outlook for 2025, Payoneer is well-positioned to continue its upward trajectory.