Summary of Paysafe Q3 2025 Earnings Call

1Key Financial Results and Metrics

Revenue: Increased by 2% to $433.8 million; organic revenue growth was 6%.

Adjusted EBITDA: Grew by 7% to $126.6 million, with an adjusted EBITDA margin of 29.2%.

Adjusted EPS: Rose to $0.70 from $0.51 in Q3 2024; however, GAAP net loss was $87.7 million due to a tax charge.

Cash Flow: Generated $83.6 million in unlevered free cash flow, with a conversion rate of 66%.

Debt: Total debt stood at $2.5 billion, with net leverage improving to 5.2 times.

2Strategic Updates and Business Highlights

Regional Performance: North America and Europe both grew by 8%, driven by strong iGaming growth (50% in North America). Latin America was flat due to a prior year contract renewal.

Client Wins: New partnerships include BetMGM for iGaming payments and expansion with Underdog in the predictions market.

E-commerce Growth: Continued strong performance with over 20% growth, although overall e-commerce growth moderated due to lower-tier merchant performance.

Digital Wallets: Achieved over 500,000 registrations for account and card products, with ongoing improvements in consumer engagement.

3Forward Guidance and Outlook

2025 Outlook: Full-year organic growth expected to be in the range of 5% to 6%, with adjusted EBITDA growth of 4% to 5%.

2026 Preliminary Guidance: Anticipating mid to high single-digit organic revenue growth and high single-digit adjusted EBITDA growth compared to 2025.

4Bad News, Challenges, or Points of Concern

E-commerce Deceleration: Notable moderation in growth, particularly in non-core verticals, leading to lower-than-expected overall performance.

Digital Wallet Challenges: Slower rollout of new wallet solutions and lower growth in the Classic Wallet segment due to regulatory and operational complexities.

Margin Pressure: Shift towards lower-margin ISO business impacting overall segment margins, with expectations for adjusted EBITDA margins to decrease in Q4.

5Notable Q&A Insights

SMB Growth: CEO Bruce Lowthers indicated that growth in the direct SMB channel will take time to build, emphasizing the importance of ancillary services to improve client retention.

E-commerce Trends: A last-minute client shutdown led to unexpected write-downs, highlighting risks in lower-tier markets.

Product Delivery Delays: The timeline for new product initiatives, particularly in digital wallets, has extended due to complexities in regulatory and banking alignments.

Deleveraging Strategy: CFO John Crawford stated that while the goal is to reduce leverage below 4, it may take until 2027 to achieve this target. Overall, Paysafe reported a solid Q3 with growth in key areas but faces challenges in margin pressure and product rollout timelines. The company remains optimistic about its long-term strategy and growth potential.