Payoneer Global Inc. Q1 FY2025 earnings call

• Payoneer is a long-term partner for cross border SMBs to connect them to the global economy. 2024 was a record year and Q1 2025 results show growth with revenue up 16% excluding interest income and adjusted EBITDA at $65 million with 27% margin.
• Focus on quality customers, shifting customer portfolio and cross selling products. 10K+ ICP volume up 8% and revenue up 18% in Q1, ARPU growth excluding interest income accelerated for seventh straight quarter at 22%.
• APAC and Latin America regions have revenue growth over 20% in Q1, together making up about a third of total revenue. Over half a million ICPs are evenly distributed across five regions, with ~40% of revenue from customers selling to non-U.S. markets.
• Recently closed acquisition of licensed China based payment provider, applied for Cross Border Payment Aggregator license in India, and actively pursuing licenses in Canada, Israel etc. Trade is services based and Payoneer's workforce management solution (rebranded Skuad) is well positioned.
• Customer funds held increased 11% to $6.6 billion, helping offset lower interest income impact. Actively managing hedging programs for customer funds.

Payoneer's revenue in Q1 2025 was $247 million, up 8% year-over-year. Excluding interest income, revenue grew 16%. B2B revenue increased 37% driven by growth in APAC, EMEA and Latin America. Adjusted EBITDA was $65 million with a 27% margin. APAC and Latin America customer regions each grew revenue over 20% in Q1, together representing about a third of total revenue with an average take rate of approximately 2% to 3%. Customer funds held by Payoneer increased 11% year-over-year to $6.6 billion. Interest income was $58 million in Q1.

• Suspended previously issued full-year 2025 guidance due to high uncertainty in global macroeconomic and trade policy environment. Assuming existing tariff regime remains, there could be a ~$50 million headwind to 2025 revenue.
• Expect Q2 2025 growth to be broadly in line with medium term targets. Will continue to monitor the macro and trade policy environment and align investment and costs to business opportunity.

• Uncertainty in global macroeconomic and trade policy environment which is dynamic and evolving. Existing tariff regime could have significant negative impact on future financial performance.

Q: Daniel Krebs from Wolfe Research asked about customer reception to price increases in March and pricing power.

A: Bea Ordonez said pricing strategy remains customer segment focused, focusing on serving customers and aligning value to pricing in current macro uncertainty, and $30 million pricing upwards was pre-tariff and no change in pricing as of now.

Q: Daniel Krebs followed up on customer onboardings and retention trended over past cycles.

A: John Caplan said net revenue retention is strongest among largest customers, focusing on customer support, go-to-market, and cross sell efforts, with strong results in driving retention for B2B customers.

Q: Will Nance from Goldman Sachs asked about the $50 million number and considerations around pulling guidance.

A: Bea Ordonez said the $50 million sizing was based on assumptions about China sellers' response, marketplace volumes, services businesses, and card usage impact, with broad range of outcomes and environment being dynamic.

Q: Will Nance asked about 20% China revenue number including float revenues and take rate expansion breakdown.

A: Bea Ordonez said 20% number includes float revenues, take rate expansion is from increasing value provided to SMBs, cross selling, growth in B2B franchise, adoption of high value products, pricing initiatives, and workforce management acquisition.

Q: Trevor Williams from Jefferies asked about China business mix and share gains.

A: Bea Ordonez said China sellers are diverse in size and product, larger sellers more tariff resilient; John Caplan added about China sellers' integrated business models and expansion to other markets with Green Channel program.

Q: Cris Kennedy from William Blair asked about levers to maintain momentum and strategy in workforce management.

A: Bea Ordonez said disciplined on expense base and scrutinizing investments; John Caplan said workforce management is growing, rebranded Skuad, seeing strong growth, leveraging U.S. distribution, and passing $1 million of new incremental AAR from newly signed deals in U.S.

Q: Sanjay Sakhrani from KBW asked about tariffs impact and ICPs.

A: Bea Ordonez said impact of tariffs is based on current regime with broad range of outcomes, hard to say on pull forward in months leading up to May; John Caplan said ICP definition is not how business is managed now, focused on profitable revenue growth and moving towards larger customers.