Paysafe Group plc: Trading update for year ended 31 December 2016

Paysafe expected to surpass $1 billion revenue milestone in FY 2016

FY revenue and adjusted EBITDA expected to be ahead of market consensus

LONDON, 12 January 2017 – Paysafe Group plc (LSE: PAYS, “Paysafe” or the “Group”), a leading global payment provider, issues the following unaudited trading update for the year ended 31 December 2016.

The Group saw continued strong momentum during the second-half as it focused on building a portfolio of payment-related products and services to meet the evolving needs of businesses and consumers in a rapidly-changing payments industry.

Financial highlights

  • The Group expects to exceed the $1 billion revenue milestone in FY 16, ahead of the upper end of the guidance range and current market expectations.[1]
  • The Group also expects FY 16 adjusted EBITDA[2] to reach $300 million for the first time, with implied adjusted EBITDA as a percentage of revenue marginally ahead of expectations.
  • Strong business performance throughout the year led to the Group raising guidance twice in 2016, resulting in a c.$110 million (c.13%) upgrade to revenue expectations over the last 12 months from $868 million[3] to a range of $970-990 million.
  • Adjusted EBITDA expectations were also raised by c.$40m (c.15%) from $252 million to a range of $287-293 million. This represented an adjusted EBITDA margin expectation of 29.6%, compared to 24.9% delivered in FY 15.
  • In addition to growth in adjusted EBITDA, the Group continues to demonstrate strong cash conversion, enabling it to capitalise on market conditions with an inaugural share buy-back programme announced in December, without compromising the pursuit of bold M&A opportunities.

Current trading and outlook

  • Given the strong revenue performance in H2 16, management remains confident about the Group’s outlook for FY 17. Management expects to achieve low double-digit organic revenue growth in FY 17[4]from a base of 2016’s record performance, while expecting to at least maintain adjusted EBITDA margins.

Second-half operational highlights

  • As a result of the successful completion of the Skrill business integration five months ahead of schedule, the Group has begun integrating its comprehensive product suite into a single, scalable payment platform and ecosystem. This includes new and centralised data, analytics, reconciliation, compliance and risk management tools. New platform functionality will be delivered in a modular approach throughout FY 17, reflecting developing needs of the business and its clients.
  • The Group launched its new developer portal, making it easier for merchants and developers to access, familiarise and integrate Paysafe products through open APIs and SDKs. This will simplify onboarding and enable Paysafe to share its payments expertise and augment its merchant and consumer base, by creating a vibrant developer-centric community of users.
  • Paysafe completed the acquisition of Income Access in August 2016, following the acquisition of MeritCard in February 2016. This affiliate technology business further enhances and expands the relevance of Paysafe’s Digital Wallet proposition.
  • Paysafe has ended the year with enhanced operations, processes, products and technology that position the business strongly for growth in FY 2017 and beyond.  More specifically, the Group has already made substantial investments in Know Your Customer infrastructure, as well as risk management and compliance capabilities, underpinning its longstanding ability to adapt and respond quickly and seamlessly to the ongoing development of anti-money laundering regulations worldwide.  The Group is confident that new and draft anti-money laundering regulatory changes in Europe will not have any material effect on revenue or adjusted EBITDA margin projections for 2017, with prudent assumptions in relation to additional costs having been built into internal forecasts.
  • In line with the Group’s strategic pillars, the business continues to pursue bold M&A alongside organic growth, in order to accelerate growth opportunities and fortify its strong position in the payments space.

Paysafe President and Chief Executive Officer Joel Leonoff said: “We have delivered another excellent financial performance and expect to surpass $1 billion in revenue, an impressive milestone of which we are extremely proud. Our ongoing momentum underpins our confidence in our growth prospects for 2017.

We have longstanding expertise in the payments industry, and we have made targeted investments in both our technology and our risk and compliance processes through the year. We are well prepared for the additional levels of customer due diligence expected as part of forthcoming regulatory requirements, including anti-money laundering legislation in Europe. Operating amid regulatory change is simply business as usual for Paysafe.

We continue to execute on our vision to offer feature-rich and relevant payment solutions that address the specific needs of the businesses and industry verticals we operate in and the consumers we serve. We have big ambitions this year as we focus on building a payments business with unrivalled capabilities, reach and relevance to enable us to capitalise on the opportunities ahead.”

Paysafe expects to announce its final results for the year to 31 December 2016 on Tuesday 7 March 2017.

Investor call

The company will host an investor call hosted by Paysafe CEO Joel Leonoff at 2:00 pm GMT on Thursday 12 January. Participants may join the call either over the phone or via a live online webcast.

Dial-in number: +44(0) 8445718892 (UK) / +1 16315107495 (US)

Conference ID: 51375527

Audiocast link: http://engage.vevent.com/rt/webcasting/index.jsp?seid=769

 Chairs: Joel Leonoff (CEO), Brian McArthur-Muscroft (CFO)

Participants will be asked to register their names and companies when joining the call.

About Paysafe

Paysafe provides digital payments and transaction-related solutions to businesses and consumers around the world. Paysafe is redefining payments by enabling fast, convenient and secure ways to pay before, pay now and pay later through its digital wallets, prepaid solution, payment processing and card issuing, and acquiring products and services. We believe that every point of every payment should be relevant, simple and secure. With two decades of experience, Paysafe is trusted by businesses and consumers to move and manage money through more than 100 payment types and 40 currencies. Paysafe offers multi-platform products with an emphasis on emerging payment technologies including mobile. Paysafe’s brand portfolio includes NETELLER® and Skrill®, MeritCard, paysafecard®, payolution®, Income Access and FANS Entertainment. Paysafe Group plc shares trade on the London Stock Exchange under the symbol (PAYS.L). For more information, visit: www.paysafe.com.

This announcement contains inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.

For further information, contact:

Paysafe Group plc

Michelle Singleton, VP Investor Relations
+44 (0) 20 3826 9800 / investorrelations@paysafe.com

Gavin Haycock, SVP Corporate Communications
+44 (0) 203 8269767 / gavin.haycock@paysafe.com

Brunswick Group LLP

Brian Buckley / Rowan Brown
+44 (0) 20 7404 5959 / paysafe@brunswickgroup.com

Certain statements in this announcement are forward-looking statements, for example, statements including the words “anticipate”, “expects”, “believe” or other similar words. These forward-looking statements speak only as at the date of this announcement. These statements concern, or may affect, future matters and include matters that are opinions. Such statements are based on current expectations and beliefs and, by their nature, are subject to a number of known and unknown risks and uncertainties that could cause actual results and outcomes to differ materially from any expected future results or performance expressed or implied by the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements. The information and opinions expressed in this announcement are subject to change without notice and, except as required by law, neither Paysafe Group plc nor any other person assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise.


[1] Company-compiled FY16 consensus of $988m revenue and adjusted EBITDA of $292m at 10 January 2017.

[2] Adjusted EBITDA is defined as results of operating activities before depreciation, amortisation, and share-based payments and adjusted for exceptional non-recurring items which are defined as items of income and expense of such size, nature or incidence that, in the view of management, should be disclosed to explain the performance of the Group.

[3] Company-compiled FY16 consensus of $868m revenue and adjusted EBITDA of $252m at 7 January 2016.

[4] At current exchange rates.