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Paysafe Limited (PSFE)

Participants
Kirsten Nielsen Head of Investor Relations
Philip McHugh Chief Executive Officer
Izzy Dawood Chief Financial Officer
Dan Perlin RBC Capital Markets
George Mahola Cowen
Jason Kupferberg Bank of America
David Togut Evercore ISI
Jamie Friedman Susquehanna
Darrin Peller Wolfe Research
Josh Levin Autonomous Research
Timothy Chiodo Credit Suisse
Call transcript
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Operator

Greetings and welcome to the Paysafe Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

If you would like to ask a question you may do so, [Operator Instructions].

As a reminder, this conference is being recorded. pleasure your my now is to host. introduce It Relations. Nielsen, Head Investor of Kirsten Thank you. Please go ahead.

Kirsten Nielsen

and to Philip Thank XXXX morning. Chief good you Welcome Call. Officer, Izzy me Financial Executive Officer. Earnings Paysafe With today Chief are McHugh, and Dawood, Conference Quarter Second

should assumptions, are a statements. contained materially information and and in factors also most Release the considered measures we could our forward-looking begin, beliefs, rules. call recent contain with Company's report. reflect reminder to Earnings current friendly Before differ management's under certain to cause expectations, in financial from These periodic that subject that this conjunction constitute that contains actual Today's will statements non-GAAP results be SEC will forward-looking statements statements those presentation SEC cautionary and

about can this of non-GAAP measures financial will call the the I Relations are Philip. today's additional over You reconciliations turn directly the Investor most to comparable appendix measures information which in these that, and GAAP website. find With the on to of press release in available presentation, our and section

Philip McHugh

to continued thanks cost and and of to through results. After and set joining strategic a for we our are Kirsten, Thanks, pleased another successful announce key Several acquisitions. complementary financial progress strong us. on wins quarter, everyone exciting transformation,

prior XX% Paysafe second the compared begin an direct marketing when the forma On the were impressive excluding to grew year. Reported the quarter. financial Later increase pro an XX% in with Pay me billion revenues of Let million, highlights. basis, XX% Payment grew business, excluding to XX volumes adjusted divestiture. $XXX the an

updated the few XX% Commerce recorded saw several the Across let Services, In growth growth fast-growing update, XX% of Travel. merchants. strong highlights our won goods, and We upfront. Skrill we and announced deals quarter. gaming, America we Before North onto move bids revenue win, piloting Outside year-on-year, me Crypto, of second digital we of app in Digital begin volume multiple Verticals. iGaming, customers with XX Financial in summarize the a

We wallets, for strong eCash the our full-year program, continuing market, as million in identify team of a for continuously continue we very a e-commerce growth. million our and differentiator to the XX a banking, the new On of with true reduction digital to transformation be solutions pipeline combination that delivered year-to-date, opportunities. goal see gateway Cost XX of would online against

and transactions we and Additionally, we to opportunities we're a to business excited enhanced market growth acquisitions about fast-growing gives across Solutions American further market. drive multiple Latin eCash These PagoEfectivo Banking our long-term the SafetyPay, opportunity the recently units. Combined and leadership be all Paysafe as us two of in Open XXXX accretive in announced. expected cross-selling position are

our XX% now context, market at clients direct the to we a To beginning business. revenue and mentioned transitional next I board join into adjusted Head Payments, also adjusts put month the the note, final him years Patel that a On Paysafe we're Chirag compliance. year. We where Chirag of this of as in Chirag marketing and will us the to Head welcome on announced first-quarter exiting of month. that, Wallet from about growth International during over XX set Amazon. to joined brings Payments was discrete Santander next of of And before at Global period a growth. Group, a industry talked excited call, we're Digital experience new lead he

it margins volumes, revenue impacts is immaterial and rate the high to total relatively given the business. headwind take of this While

from truly in of a and in presentation. are now business first the recovery PagoEfectivo unique with processing and winning digital market. payment strong provide already the combine breadth especially global and as card So wallets, risk and to the solutions. a move cover acquisition let's offer that, Banking we of well. with tailwind eCash, of is starts now we quarter about quick With snapshot Canadian a of We'll think our on U.S. this XXXX. payments with It We and signs Paysafe of of we it's seeing how the this and the payment the complete with to SafetyPay, in Company management helped focus as a as deep of focus depth solutions is position breadth fast-growing on color. this strong iGaming later solutions a on spectrum strategy. think leader solutions, to see But and this a verticals. our the We a Open

However, Crypto, travel, seeing pipeline gaming, services. of financial combination online our the we capability digital growth payment in the are and goods, driving

XX Finally, betting some to with the strong sports the iGaming. continues about Paysafe Canada. form is the representing we U.S. strategy. in to signs some on of and traction states legislation U.S, representing execute XX of while see next XX the population. months, today. population collectively continue execute seven about U.S. additional gain scale iGaming. live backdrop, also XX% cost we're And that growth North let's takeout. mobile in states live the turn the to of are platforms market and beginning to have inorganic In said, market on expected Starting over starting with states in also, XX% to opening of go gone live the the of iGaming to With our America

this coming coverage be Wyoming, with representing eyeing in states, our also mobile Arizona, population year-end. XX quarter. in in We sports XX the and bring the in interest Louisiana Connecticut in and Maryland wagering to expect by to weeks. total We're Collectively, live would fourth

timing which York, attention are close markets. to Florida the paying big and we're New around Additionally,

framework Sports pleased with regulatory for level, its sometime to that paving has online. marketing provinces in market see At single nearly legalized, the regulate Turning the event and betting gaming sports expected population opening first way we competitive of of which of and positive Mobile gambling. all connections the is provincial Canada, were been with license half to to Canada's has single-event processing XXXX. million, Ontario, than for longstanding a the serving leading XXXX, XX advancing wagering regulatory a market. leader, we're than more online is momentum and a Canada seeing have Paysafe since position the well-positioned Paysafe and payments globally XX% the operators where more to in thousand regulated history market for in has we a U.S. as in Overall, operators of wagering

the bit a market. So that's on

Let our are me a It few starts with points we growth. on highlight how delivering. quick

May, second as platform a As integrating we continued U.S. wins. Awards. across over July, X payment at In gaming XX% America Review's on was leading the grow and in North grew Winant, our saw stated momentum Paysafe of the earlier, recognized North a states. partnership payments with XX% we new client the gateway In quarter back volumes announced revenues America in

globally operators. where Entertainment, integrated Skrill Digital for has Wallet PaySafe to one in continue Golden And forward We brands, expand gambling to our presence later Poker and a BetFair FOX have been second by Stars is Also have supporting we're sister with biggest we we and global Bet additional -- live FOX more than went flagships expanded decade. this our Flutter the looking been Bet Nugget partnership Bet Paysafe the Michigan, we in card. of year. And with quarter. launch in where an FOX we Michigan, operated

initiative the enhancements, Skrill among product digital last call previewed brands, capabilities. with major Skrill on brands. FOX funding the wallet to instant piloting VIP other the [Indiscernable] on our folks PlayUp, [Indiscernable] players We're with expand to BetXXX, we now X Turning and including Bet,

it and comes depositing and experience operators make the payout players will Our customer product to upgrade acquisition the giving frictionless edge for competitive retention. when truly a

it's instant the planned I'm and from early focused their deposits the needs. and with we've this While feedback our of pleased clients first implementing and initiatives the build is with progress made still we days products just on several

iGaming. customers these organizational Crypto, we integrated to to XX%. verticals in travel, weeks. be and hires some growth verticals, and second focus Outside goods, talent e-commerce financial our industry Lastly, through exciting the America quarter, digital from strengthen continue In the coming announcing seeing game We'll revenue the in commitment including our of we're winning strong new from growth services, attractive and verticals. in North

eCash gaming with card Games, second expanded of Paysafe live see Riot the to in our integrated Microsoft growth went with continue significant X-box. Skrill one quarter, is the We online which In partnership onto and online further publishers. game

driver payment exchanges. we exchanges trade, Equally, now We XX as expand growth a continue and Digital across Since to to XX business. and the Crypto growth And continue the pipeline. more supporting X in bringing Wallet major markets. to first are on capability Crypto now our in with quarter, our to to available cryptocurrencies processing see than also strong live XX we're Crypto XX cryptocurrencies total added

as is a a position merchants further Finally, the and win we market understand across at new partner our Intellipay, banking to specialist we're to with accept and over XX,XXX partnerships Repay, becoming locations In player, enhance needs. retail to to partnerships our services eCash, financial cash expanding enabling acquire where Extra recent Paysafe Finance, including continue global payments customers meaningful these U.S.

than to our of including the announced transactions for airline of in with more to the uniquely recently businesses overall is specific meet Paysafe and risk solution, industry. settlement we provider a flexible ARC, already, safeguarding more services leading with payment response continue lower Lastly, strong We're for traction funding airlines. see travel. the to needs providing good seeing travel a partnership network XXX positioned our of

U.S. Now savings, well migration, so targeting time, platform, and initiatives, risk delivered annualized. transformation, million, verticals accelerate core and organic will digital on emerging playbook key we merchants. we iGaming Foley is as-a-service. as the we regulatory continues progress solutions million consumers make are enhance accelerating XX which to banking investments our as further to about driving on platforms. our announced build turning and such and cost banking Bill In continued year-to-date, growth in track. $XX with cost implemented million our for year, This banking make we the At banking we're same June to and XX savings out we've around to a our good and further which tech service, Bankable, we

new live and acquiring two signed went and wallet to We also Morgan for Europe payments with facilitate in exchanges. banks crypto JP

three banking and let key for including acquisitions, M&A. foothold a for serves Paysafe There in SafetyPay want and emphasize grow, travel, in the region. active digital iGaming, goods, this SafetyPay, where the leading are to fourth and of increase solutions the open establishes Two, complementary to strategy, are pillar that me e-commerce. leading PagoEfectivo to America, verticals and Latin PagoEfectivo we Paysafe the areas American. services, this to turn Now in announced financial strategic Latin here. our want open solution the One, I been messages We've quarter two growth eCash banking the very

the expand reach augment Lastly, while our these international and we right, wallets their businesses open digital eCash merchant are base. growing material business, of and in can PSP with own our where rapidly leading synergies across see our banking, cross-sell we

look it opportunities rails from banking the We emerging also We Paysafe see other into markets. to welcoming expand forward these open family. companies to to their

direct it hand few over a I Before Izzy, comments marketing. I'll to make on

As set discrete and entered we a of XXXX. on as quarter, of our we upcoming channels views and we the anticipation exited clients our Based changes. noted market last referral some compliance of

transition market year, new in period rules. adjusts to a compliance we're So these the as this

new While you some net and the strong we're but in will the year, somewhat recovery we take beginning in XXXX. Izzy financials, market pullback had of positive. a than anticipated. the second merchants is wider we're half the expecting seeing In improvement June, turned through deeper

space. solid to year. invest business requires the strong we to seeing this over to do. and the support this business. a Overall, to the of growth specialized. tailwind not market in With monitoring. already in that data I'll It offering It's space we're strongest It's And relationships continue a hand So to this We early Izzy. despite next good bank continue signs we like easy said, turnaround. as pullback, starting developing it see

Izzy Dawood

Thank you, Philip.

QX the $XXX which of expenses were and the EBITDA for our Let's turn at of high Adjusted guidance, guidance. Gross was million, profit high of of eCash. quick we're strong Overall, Performance also came at a XX was in with in Financial a driven end guidance. our for by line. performance to compared summary momentum Revenue $XXX pleased million Slide continued U.S. and our right recovery the in our our to end quarter.

Total was which year-over-year, million, excluding revenue by in $XXX.X segments. all quarter XXXX, revenue growth driven digital up for three of integrated we to wallets. all across compared in the growth was to Turning in and year XX, Pay billion second XX%. volumes with October XX% divested saw $XX of Later, Slide growth growth segments. sequential both And last was processing XX% up

As $XXX.X expansion XX% EBITDA direct year. was revenue details further presentation. to year. the the Philip business We provide the in Wallets, and quarter. for Digital And X% I in later the the the mentioned, excluding in an divested for compared Pay growth prior was vertical, will resulting prior up adjusting margin Later eCash for growth Adjusted quarter EBITDA both versus adjusted saw the million, and of and margin XX% marketing

While the year code-related decrease Cost XXXX, margin the temporary there in primarily the margin compared noise, the comparison, prior reflects mix is in business in processing. integrated including year-over-year to reduction

to Lastly, with free $XX.X free lower for part was an our conversion to approximately expect on quarter cash this of XX% full of in driven approximately XX% expectation which Year-to-date, million XX% consistent cash The significant we XXXX. by flow conversion flow XX% and year. our tax be EBITDA was conversion is ratio basis. the adjusted payments, refunded

over underlying for the additional we XX for details slide at growth Turning on how to quarter. the look

direct through results our we believe goes business helpful marketing through transitional year, this excluding look a to vertical. As it's the

measurement period growth as strong quarter. our the of the compared Direct by second on and vertical warrant increase the the debit points reflecting million long-term in the $XX.X Income Loss million will expansion. grew and fees, Excluding end. is a of Income acceleration tax onto expanding performance of million at $XX.X growth in quarter million the Pay XX% grew and thesis gain Net XXX of income value to prior was Marketing year, from $X.X the year. compared of I $XX company This an while EBITDA GAAP over liability expense of Net the margin the XX, a margins. fair Net adjusted expense On with as to reflecting basis approximately for consistent our offset of XX%, prior capitalized was benefited million interest revenues well for $XX.X This of quickly results. Slide touch Later,

rate we forward, effective XX%. of expect tax Going an to XX%

billion consumer slide to increased reflecting segment on move increased an Volumes Europe million, an to discussion increase eCash. year-over-year. XX the quarter, $XXX.X our second in in adjusted million, XX%, for X.X starting of to in lockdowns of and XXX margin $XX XX%, a basis Let's Adjusted was behavior. with revenue results an and increase XX% extended associated XX% EBITDA points resulting EBITDA of

impact segment slide calendar in the an in sporting were basis exchange rates, X.X million, to quarter of EBITDA billion, offset driven X% by Adjusted of for XX% exits. was was up trading Revenue second Crypto year. the margin favorable an XX. events, the of by Moving prior X% million, increased to points increase EBITDA $XX.X the market Adjusted digital and $XX.X Volumes wallet XX% year-over-year. and Digital Wallet XXX higher normalized activity, compared of and partially increase year-over-year.

XXXX, an Turning second compared to On more can U.S. than the the the to year. mix, XX% X% in pro, channel EBITDA as marketing integrated volume our year. that forma the look and our their QX high the for Revenue quarter basis revenue including relatively EBITDA of Adjusted in direct XX% to was reflecting a to prior $XX.X of processing the the as strong, prior a headwind pro Compared operational performance rate meaningfully you quarter. business. of are and volumes Growth prior the million $XXX.X was XX, was impacted Adjusted the for XX% increase Direct increased impacted to vertical, XX%, the in discrete channel. reflecting our Slide basis processing of $XX.X given XX. the compared The industry approximately well. segment. decrease review year. slide Year-over-year. take would margin XX% Adjusted by Integrated compared the direct increased led EBITDA we On decline segment XX% items merchant On to due revenue marketing through year-over-year margins, excluding million the than Marketing approximately up more million, for have economic is market growth strong performance growth growth strong across most improvement and verticals. continued up

the and a received address analysts. I'd the XX, to take our to of like Moving to we rates questions to across help moment slide have some segments investors discuss take from

see how last over few years. the a Here have our rates can trended you take by segment

out X%. for the trading. the business of its has by long-term bottom, Given you take trading and driven and rate, generate as take Wallet. entirely consistent Digital happened a build expectation mix. Digital compression X.X%, expand from than Wallet new average normalizing recent Paysafe X.X% take take in also anticipate Crypto top slightly long-term to increased continues rate markets, to steadily as at We rates rate such of functionality FX Starting our higher eCash

integrated decreased the XX charts volume quarter last driven lower. few shift business page is within integrated take pie Finally, processing processing, the by X% of showed over segment primarily rate Basis rate the the overall The in in to to the from our a which this at meaningful the driving quarters year this points quarter bottom has take last mix segment.

Turning year-over-year processing. strong robust the e-commerce lower basis fueled year-over-year, has take year. dig from recovery, deeper compared to We're with XX% acquiring growing rates albeit seeing U.S. into prior Integrated to business as steady around macroeconomic the at been points. able to we're well, rate integrated a Slide volume take by up XX, our XX% XX at growth

Company. e-commerce, should the we're in integrated segment and across the robust for and further in the While strong EBITDA the revenue moderate from processing Overall, will momentum is in levels, rates which acquiring growth we take which see gross these U.S. processing. integrated absolute continuing influence driving growth by pleased

last on Total XXth. was was of a focus $X.X and June as And to ratio the our months XX, balance adjusted debt Slide liquidity outstanding net debt EBITDA billion to XX shift let's Now line successfully In with liquidity long-term future in our times high June, for debt needs. market the a by source as new existing accessing and market the QX. added sheet of X.X refinanced loan we yield

make size With to also we the recently our synergies We leverage acquisitions, times. of adjusted allow XXXX increase $XXX and million. forma remained our to quickly our profile times de-lever our rising temporary revolving as expect will the this of in to meaningfully towards approximately credit our announced EBITDA. increased target We comfortable growth to X.X facility pro X.X with us deal and progress

with starting XX. guidance Now transition on slide full year to the

We are full reaffirming our guidance for the year.

to adjusted to EBITDA $X.XX the $XXX range in two to the XXXX XX, and view in continue $XXX any billion a $X.XX acquisitions. expect excluding supplemental range We slide from On have provided billion, million, of of performance. expected revenue the of million impact our we

Excluding the Marketing, be reflecting the with full-year over roughly are line margin is EBITDA expansion and with Pay adjusted expected to thesis. growth and XX%, strong long-term metrics in using of These growth our growth margin expansion. revenue Later Direct midpoint guidance, XX% and growth

to Now, the on turning third-quarter Slide XX. outlook

million For revenue basis. $XXX we on $XXX of expect QX, million reported to a

$XX expect and moderation a summer return $XXX European growth adjusted Gross million continued expected markets. a is the segment, between We but million. the between see post-COVID normalized processing quieter $XXX rate be to profit of to in We activity in wallets. to gaming $XXX and to in eCash integrated and seasonality, strong digital million EBITDA our growth

including as closing digital growth I turn Stronger for the in in reflects to expect of to and back the several strong processing, will to direct integrated call continued coupled strengthen well Philip as early e-commerce We as improvement late growth in QX margin clients well. remarks. sequential the onboarding fourth This performance double-digit new wallets over quarter QX. now return in to with marketing.

Philip McHugh

recovery we our welcome the of second with Paysafe verticals the We're to We're of execution excited the Thanks, strong the in emerging in We family. like are discipline about and happy Izzy. quarter. America cost PagoEfectivo seeing of to faster-growing SafetyPay, and return growth especially and pipeline a program. to good In seeing momentum direct we signs with building the excited and and marketing, some in the are conclusion, North iGaming. we're pleased

continue long-term Thank additional you. all you execute growth these our outlook pieces strategy to Paysafe. line together, As in we to with for opportunities the had grow. of Putting

up Now let's open for the Q&A. call

Operator

Perlin is gentlemen, Thank and Please question ahead. RBC is you. Ladies questions. Capital the [Operator open Markets. coming from floor Our for now Instructions] of Dan first go

Dan Perlin

mentioned bit I Latin could, Good on giving Bill, foothold more you're Thanks. America. in a dive in it's little the strategical, we to everyone. you morning, wanted I if acquisitions, a know you

had turns. about but the X, particular, over little complimentary synergies to in strategy, Thank Company want little verticals more be you expectations out from you a around You synergies there's you. couple understand maybe bit would can I playing I that some else levering some the context just provide then of years? a make see sure the up X and that of those over And around and in maybe what if next anything great. bit

Philip McHugh

to great from it's Dan, you. Thanks, hear

Let talk what on -- you real basics. synergies. give you deal give couple a me a review the about about color could bit we talk really and I'll on on a liked give those I'll leverage. I then about And the

into and Paysafe Paysafe about and would that go on off about kicked when the go deals we overall. doing performance of X.X-X.X it that of we'd businesses the those see range. when strategy, performance That's then up, our talked plan. that's our XXX% we of leverage and And of we outlook down we started we back of see kind mid-X, So our kind see talking

So really we that comfortable front. feel on

terms the With million In XXX transactions. basics, was million deal about all-cash total. of SafetyPay in PagoEfectivo, XXX it's

revenue a next two topline of of about those business million the kind a growth and XX% Historically, $XX the for We million of CAGR X expect about two rate. from years, XX had year pieces. past EBITDA has

American they're markets. Brazil, XXX Colombia, us most in markets, including principal terms coverage. in and bank of Mexico, businesses. very of So merchants XX% Either Over Chile and markets Latin Peru, gives fast-growing note. include importantly, a markets presence XX It XX

solutions. them, XX% for predominantly are bids in these with of banking can eCash access the So with integration, a some banking you open open and networks single

we in about big this, as standalone coverage. successful They're a bank banking Dan. What very businesses. and businesses. as a high major very They Latin these like are we and are high-demand demand as that's And We we eCash Latin see basis, a One, see the see with the trend. open in snapshot these open very So a very, growth APM a America, banking growing love America. of great trends. on deals. We

it. talk to standalone travel, our in I'd goods. snapshot we an really on And a likes strong to they they They're Two, clients at from iGaming. have they and video the U.S., obviously the growing expand sectors. as Canada really incredibly as clients aside majority -- in online America the So in iGaming, They're well. the Latin gaming, in digital our management, won't U.S., the in expand say the same are example, plans to expand and that growing like as want we but of

So an this on clearly really merchant five there's think in does synergy way. key then basis, globally cross-sell. connect about obvious And I a important an One, synergies. for income

strong really, a those SafetyPay PagoEfectivo to payments to fund that's wallet and Three, way that a can to we gateway. clients, and Latin plug versa. plug in America augmenting They plug America our Europe. in clients some those When and as and you gateway, relationships strong we our pay Two, amongst on in synergies wallet in a payout effective global vice and the create like competitive. have really two can into, well. have where very We brands Open Banking, pay, North in accept you really

scaled our bit we two XX now. also synergies. and That points. on then together that really deal. last in nice So competitors there. like There gives points and in over and the companies combined you these color we market X eCash of just hopefully countries business, the good us And there treasuries position the a a put gives are with are fact We this million a have distribution context some

Dan Perlin

That's very much. great. Thank you

Operator

Thank you.

is question Cowen. George from next Mahola of coming Our

George

thanks the I those basis? taking guess, direct guys, Hey obviously questions. the understand the and want a I impacts? overs. would sure to the of Izzy, help guide. growth on have marketing, us didn't firstly, out you we normalized for frame grow some implied be, that my quarter maybe third I make expected Can What what and rate morning, have would other if good Factoring

Izzy Dawood

from to you. George, Hey, let's good hear Yeah, Yeah. into dig that.

we're our in about. XX%, in to -- obviously, revenue. to all Marketing mentioned conversations, the be growth are recovery of interesting got roughly Again, seeing kind once we'll as going calls events COVID impact XX% lack on marketing seasonal see talked it's I you seeing prior took QX, you're we Once to activity, August, - Europe. I've Direct in for So seeing that of XX% in to of as see. And Philip about in post direct year-on-year traditional of a to We're July, quiet sporting like what slate activity the the focused vacation. XX%

a that saw, what informs we of color guide that's George? part. So kind QX what kind there, provide of little most additional our for the Does that

George

I get And XX%. if was U.S. I I of being just to an up like apples-to-apples curious, looking what two more just questions. comparison. volumes may what actually that's kind then exactly for think the Yeah, I'm

to you. if eCash. for in. Europe, then little the that should XQ, So question playing you be seeing how bit nice the Thank to can assuming be somewhat see that the strength there. Appreciate growth third post And last may curious maybe of about in quarter? in reopening guys. year-over-year, what some is you're talk color, I'm we the flattish maybe, a

Philip McHugh

of bit maybe and little onto if a it. also grab that, grab then I'll you

Europe, a in things couple going. So of

uncertainty of There our see U.S. about. more post are open So lockdown, of comparison. kind a COVID stringent really much market's - the we did reopening, kind

softness So that's of kind online summer gambling the of some kind in creates space months. in the

regular the summer as consider well. seasonality to soft we in where In addition can

an been eCash So we've it's the Two, seeing see very tempering do we down We and are side, that that. about on consistent one. strong incredibly story. been that

to signs down. we slowing that So starting are of see

of eCommerce is On new our pipeline strong business an up build eCommerce growth pipeline the seeing a we as our flip and expand side, integrated and business, extremely of clients.

So that's also us as creating outlook for well. some nice

have you markets. international happening Europe across a couple things So of and

Izzy Dawood

see seeing specific XX%+ on terms in a close the growth growth, out been the eCash. year-on-year that going down, teams our strong customers in but year-over-year still we're to And growth, driving business. [Indiscernable] still alike, temper and The least that we Definitely are to doing, work engagement with see QX doing, in greater credentialed pretty that not it's at and as QX. of in

George

helpful. you. Very Thank

Operator

you. Thank

Jason question ahead. of Kupferberg next is go of coming Our America. from Bank Please

Jason Kupferberg

Maybe just George's it's there's Good specifics build guys. terms maybe to little whether Thanks, quarter-to-date of of a the a know in underlying more. the of happening e-com, weeks. kind variant? in that light I of volumes what's Can in call just one morning. you're of around bit acquiring out recent seeing, interest lot you on versus some in-store questions

Izzy Dawood

Yes.

So versus have pretty would handy, the to feel see up processing in-store flat, seeing pretty we're that mean, overall. good the it's volumes integrated seem for we the with consistent continue up I momentum we so can slightly like business about July. but online don't August and

Philip McHugh

Yes, we acquiring SMB variant debt performing. because pretty We haven't is coming and the U.S. how Delta of through. the noticed that ed remain on positive

Jason Kupferberg

Okay. to That's hear. good

to big XX%. it the XX% the I a EBITDA target for the margins, for think on midpoint pretty you'd full the like year. And you implied as in at alluded ramp QX to around get there's looks QX, So be to,

drill quarter? guys. rattled a off the visibility just on you know in Thanks, you in your bit little that, in dynamics of margin but driving the couple acceleration can the a I So that fourth regarding

Philip McHugh

Hey, Jason, there. good in questions two

expansion. but see the reported on provide through you'll and in the similar right look margin what to you're we'll basis we shrinks, So margin direct marketing a QX, a did on continued

I to think look can we that. forward

QX, that that work with. ramp from as seasonality drives factors. for there again, of basis more that part you That comp there up. activity there about, recognizing think three right? a to three One So QX call. good in probably the And out couple details, again, major guys the is there we'll a holiday. is for things But of active the In major we are traditional call QX, gaming are

the That's the pretty well. So to QX. one, Digital starting investments on making, start is that second Sequentially, as and in the Wallets' Based growth we headwinds see solid we're abate. market recover, to marketing. direct

the QX. on-boarding revenue that head a form Right we the pipeline of the QX, we'll pretty most well growth and and anticipate in now, probably strong and integrated, into The we to driving continue is so our third as as e-commerce the meaningful absolute business.

Jason Kupferberg

Okay. Well, it. the color. for thanks Appreciate

Operator

Thank you.

Please Our Evercore next Togut question ahead. from go is of coming ISI. David

David Togut

part take morning. in expectations Thank QX a your more of year for you of eCash, get that walk embedded average outlook integrated we XXXX? take again start this unpack should processing. Could once beyond for for and your is wallet, And see rate in And expand when through fact QX rate you. and to expectations your guidance? we could begin you that Good if year-end, is digital specifically, your to then on

Izzy Dawood

David, added a I'm end. questions, So hopeful sure towards the couple that I of was

by when about rate, think it talk more regarding call you I the naturally, to taking will of a growth or I strong what each higher Right? on XXXX we pretty more expectations right. slides we obviously, segment where see see well. basically, if customers have see about effect of drive our going the our just as It's really what and growth think right? effect take more we'll taking becomes stickiness activity denominator clarity, be But with our the denominator we of matter e-commerce, greater it's as a pretty impacts, But than rates at growth the the of that, if we is businesses, is we integrated revenue and show absolute -- or to happy So really solid. So when and more lower them time growth integrate continue processing individual in we'll the rate.

aspect one that's of taking So rates.

of integrated just the a e-commerce or pretty probably the focus been will take rates, growth and for rest help process right integrated dynamics, good and again, will Digital kind has matter right? of staying the where absolute But we will towards help the -- revenue now, on rates for help the we're Marketing that's growth focused. of us, of and terms growth -- outlook the will Direct the growth take year, and Wallets take rates, In

Philip McHugh

but said of In take Yeah, to -- take really on that. seeing individual I is lines, think a We said, a that will as as next eCash we're direct a recoveries the the we And was be taking unpack mix slow-down, important some Those just ultimately of but are eCommerce rate. year. big and that gave rate, to we tailwind rates growth. share go so issues, it That on thought lot business the early a also detail to go mixed consistent business. marketing revenue, Izzy on we in.

David Togut

Understood. Would the to level? at rates you sustain expect eCash take X.X%

Izzy Dawood

towards wants last long-term just always been of of pieces where kind of to basis. down medium think But X% some expect plan actually on come through. I have quarters X%. a bit a The David for to [Indiscernable] of higher seen additional target the couple plan No, kind as we've -- we little towards come is to we we

David Togut

much. you very Thank Understood.

Operator

Thank you.

Please Jamie next Susquehanna. go question Friedman of ahead. Our coming from is

Jamie Friedman

Good though, Hi. Day comfortable Xth, I Slide really the slides years? these Page Because that? on generally, and and with the are with of March XX are directionally you just to Slide still with you with like X ask discussion. job guidance XX. Analyst XX I out XXXX, comfortable wanted that's

Philip McHugh

we as results showing out in Marketing Jamie, Pay absolutely. taken long-term adjusted that it's through And our talked Directionally, we've think thesis. our as I Direct Later, about

Izzy Dawood

Marketing. to EBITDA definitely it's with period growth, low this transitional Direct coming revenue growth, work with as high teens we teens through

our and that's yeah, showed range. that So also outlook what long-term

comfortable So the far, overall yes, so pretty we're today with outlook.

Jamie Friedman

if you correct prepared in Direct then me said exactly, your that -- bit worse wrong, the little Philip a and I have than but And to thought. it had was Marketing apologize, you don't remarks, something I effect I'm

be quantify, bit would sense -- you little us So that and you had of why worse? you helpful. unpack if can you And had a what just relative like you a if what just it's thought, to can't what that give thought

Philip McHugh

[Indiscernable] Jamie, that Yes. the I'll just to Hi, this is one, take recap issue.

spend some talking and that QX, in about issue. sense to about would QX impact set time, Right said call, the lap million talked $XX in So we the client of a is, seen adjusts we've That as some slight also the general, in adjusted investments, anticipated, The size the the so, players changes the take have did in of We other the exited first a here. [Indiscernable] in same is have it direct on market we which marketing market and some pullback issue. XXXX quarter market quarter. comment that first how we discrete seen, as should you give softness scope back. in we as we XX% the marginal

that's what So seeing. we're

slight just continue not this us. -- the to some why But business, about down this talked we business. invest we for we in like pull just So across say why slightly, really we market,

been strong And are back coming they in at our and direct back We We've CRM it set look, with very recovery. about volume. wide of a risk reinvesting strongest the on a much market. a on partners, lots conversations seeing on marketing are into with go the focusing clients and this. There's of MasterCard programs and Visa got higher partners, very management, bank we've relations talking

us So in partner it to when position business puts that turns really this strong be a around.

little stabilized because that's but discrete we're people all start that marketing a we of campaigns. got is back numbers. seeing through the set and Markets as direct in changes, coming So what work its the way back we that the that reinvest bit see market to that's had to pulled and

Jamie Friedman

for Got the it. color. Thanks

Operator

Thank you.

Darrin from go coming is question Wolfe Peller of Research. Please next ahead. Our

Darrin Peller

Digital better anniversary just the potential big and the that Wallet you'd the well. the part to partners versus us it you Digital Hey, new or long or products started both story something thesis And the know digitization Digital the side double-digits at I those guys. steps the growth Crypto teens the as But seeing rate and on lines? about into -term. Can of want the referral Wallet to through the of off that I what to bridging sustainably. walk potentially we Wallet on quarter encompasses eCash expect on low-to-mid X% to a opportunity, and in along from when is in we I we're opportunity all the a When hone X% that, it's with minute. whether for you're think something or those get U.S. is think X%,

Philip McHugh

we the a Again, million those Because third headwind in first second, in the get customer some We're seeing talked some things, basis, is quarter lap question impacts you in we growth steady these and growth some really albeit specific think we issues about. back markets positive the always. accounts network Hey, Darrin, exiting some of some turned we in gaming growing, Canada of about $XX as to It's that basis. first what some as still fact, the core we level. up, it's and long-term obviously and that three good a about of from good are area do lower talked is to negative great those Two strong legacy one is that's there, markets. Latin where the in growth. and quarter a America why quarter, is two about so opening in some is And at of have U.S. positions are customer just that's good an growth.

really payment let's ago. over as see Crypto. very one where more and becoming it We major rail it the And that similar some iGaming is years We see lift. say geographic we XX a see third time. this We more the So to creating really pieces, nice was, do business. like

sign-ups. Digital driving positioning. well-positioned like as Wallets The we there so And very that is

So those get back the the are I really to when math factors the three of do to kind consistent growth. big us XX+%

Izzy Dawood

you'll in because growth start think we there aspects. fewer full just you where Wallets quieter start good I X we're Digital games. QX In seeing start in other Darrin, that see revenue. to QX, is the seasonal, up double-digit But when showing And it are expecting Yeah. seeing comparison activity

Darrin Peller

in what? Next that be year your on views or timing would 'XX? in Just

Philip McHugh

double-digit. we'll And with a consistent see growth. QX that, good For initial to some start more then XXXX, we'll some to see in start

Darrin Peller

Okay. And then Philip. -- thanks,

around year and billion on for mid-teens sure puts year, I quickly the $XXX-$XXX how QX, just somewhat, like Izzy, to, if moving for it think have full the on terms the the incorporate and finalize guidance takes, the if and Growth. think in for all we there, different on getting it seems the you straight a the just about given still because overall we're Just said puts of had we guidance, and just we you just volume about should could investor takes guidance then previously just questions parts making

of guiding. you're numbers the just missing high terms or conservative to hard It in the side, to pretty single-digit wallet In side, seems we're merchant it's where digital even the get something. unless

element all just that in there, how if us -- just the putting you're any remind conservatism the again, of Thanks guys. So of in missing anything? maybe outlook we're

Philip McHugh

Sure.

just a is couple One for year. on things. of full start I'll volume for -- side So the the

but to Wallets, full-year. probably volumes Our that's But integrated grows one or that, thinking earlier in on quickly eCash, QX, it'd it's closer That's we year. the meaningfully just and to We more. be higher. come billion fast and depending thought billion again, obviously, in XXX regardless definitely actually, of are puts to how what the takes a sticking really than how we on higher processing little XXX bit Darrin, going is Digital about, -- will for in to XX%-XX% just would above processing expect Again effectively probably events quiet be I XXXX it's QX this going the a and -- lockdowns great, this also, weaker. of and be QX really year-on-year. And had a and Europe. see seasonally in say expected. in little because on integrated everything to just is a X%-XX% bunch integrated sporting includes QX, as We challenging processing. comp, year-on-year year

a likely decrease slightly will have lower So one. That basically QX in a new than it Effectively comps revenue. QX. make year-over-year it's

Darrin Peller

Okay. Thanks, guys.

Operator

Thank you.

ahead. Levin question is Research. from coming go of Autonomous Please Our next Josh

Josh Levin

be follow-up so, would Hi. about on iGaming would you December, guess strikes I story describe really if with in expansion is ago, in a deal as back LatAm months what in Latin bit how strategy? March, a to would in I back what here, A thinking what -- change on ask advantage And accurate? you. season And caused expansion. like when was LatAm guess, of you being Thank Does your has evolve? opportunity. -- American your Paysafe's would or the the a that Good competitive follow-up the the be in morning. the I America? to I question growth U.S. announced remember your presentation analyst the Latin few

Philip McHugh

all. If deep and or I our gateways. SafetyPay Josh. We either is very talked in I pay about winning talked look APM sub-grade talked we PagoEfectivo incredibly consistent do for right strategy What we still of we card payout talked clearly in Open the credit wouldn't We and the really through expanding clearly Banking in Thanks, and APMs, payment verticals, interested through we about We debit offer lot liked were We see a about We eCash, in see That a more, processing. iGaming. buckets at we Those verticals. really a the be rails. all. about in we U.S. earlier. grow. deal iGaming we capabilities. merchant iGaming, and what buckets. the We change I strategy about in player this investing there. are provide at there. throughout. emerging call when at you of all and One, options to digital important see s We this wallet payment as more Crypto when And see of this, the do completing really you're We like iGaming. for talked an three our it very investments about doesn't U.S. would change

we have in that's to an I cross-sell But play. We provide in the They're close. more started LatAm really close and about We to now. that U.S. The the and strategies. more, in eCash iGaming. deals, as that these are we have at have we look verticals they So started can a that It's nice initially, therein. clients it. started excited there's got Europe, more get

can payments more markets. you of more across get broader integration a a and So set much single

other client Two, factor. and a our Latin overlap it complements think is major as common very there's well. is And trend. attractive by vertical emerging Open our position. position definitely America form It's our complements we that expanding iGaming pretty there. we strategically It is Banking It emerging of payment a important, So driven into lots needs think definitely markets, very

from strategic the of real really are a we point like that view. So those drivers

Josh Levin

you. Thank

Operator

you. Thank

go from Our Credit ahead. Chiodo next Please Timothy coming Suisse. question of is

Timothy Chiodo

earnings to one, hit guidance I And you pretty that confidence on earlier. happening kind a the XXXX? XX are words, quickly and the when but I drill on know a are have call, is seasonality giving between on just some that heading to more. more to you appreciate that QX be this are positive expected? and seem the lot. is full-year last want to into that. are the come follow-up back rate your a in there Thanks echo the that this slightly on I exit Jamie's how Slide would bit under what a of at last Relative helpful. is you reiterated implied mix Or other on guidance I'll we QX the higher hood QX would little take roughly shifted? the comments there In in things that

Philip McHugh

great right. Yeah. you're And Hey, Tim, question.

anywhere you talk XXXX In seeing did out, prior terms about play if of kind or how be If recall, it's right? to July, compared close we August,t of to to years. going quieter seasonally

QX. always in of and we'll Europe, which seeing, quieter rebound Post-COVID activity we're was kind there was obviously through, recovery where then this robust COVID. in expectation So our comes see a

feel pretty we're and So our QX, your overall, is welcoming second gaming to e-commerce real we that marketing, the we would to seeing relative recovery, you historically, direct And seasonality terms that, good planning kind pretty be QX. point, the how exit us drives a pretty about confident going good rate in pipeline But business thinking just some gives confidence to of integrated play of thought where activity. how we it. to there granted, given out, strong and out. this They're it an about in in it, are

Timothy Chiodo

Okay, verticals? like segment. just it context Basis mix? part there Gateway XX rate is acquiring? points a why U.S. U.S. a Is also the large a there Is the with bit of great. range. Slide it, than is e-commerce little things take reasons merchant e-commerce mix? why big on Just lower a Izzy. is but again, The little think bit the XX I something that you more it's lower and on XX is rate that than us to follow-up acquiring? a The take you, integrated Thank on the there for recap little Could

Philip McHugh

take I'll that one. Yeah.

is of smaller so really with a a end player, it's the think out, a mix to important card-not-present. scale, scaled U.S. call very a card-present I with U.S. we're dealing merchants So of right? SMB we're

in where the very see U.S. So there they industry that market. rates are the you line sits take with in -- much

It There focused here. larger right. merchants, e-commerce on no e-commerce business is global. XXX% international Our XXX% is card-present These are is verticals. business It's digital. specialized

So that's the profile clients. of

of trading it's it Wallets So the other we're gaming, it's and client, working. The type iGaming gateway risk in at. is plugging really Digital and process really, in sector clients, our Crypto is eCash video it's an travel. formula That's multiple We markets. with management, that looking API, APM's, mix single that can of

what you get so is e-commerce. scale And this larger

will. retailer say So if international are margins XX fairly lower, but they rates - you more XX The for and are lower. let's versus are e you XX to Basis to the specialized, the take much Basis in because an points land XX the points

that's there. that business strong very happening So and We profile what's growth, do the growth of we like continued channel. in that see

Timothy Chiodo

Thank you, Philip.

a acquiring risk? -- is the rough within though, sense follow-up, of gateway a portion As quick there that that's give though, me is portion that you only of versus taking what could

Philip McHugh

we'll We significant exact It's going have But can a Then to don't on acquiring exact -- to split. have be to good I question. portion don't I on We'll split hand. that up. a that fairly it. have hand. follow it's the go

that with you breakdown. So you give follow to we can up

Timothy Chiodo

those Appreciate Okay. questions. taking Thanks for that.

Operator

McHugh for would run Unfortunately, the to comments. turn I we time like of have closing out Mr. questions to over today. floor for back

Philip McHugh

the growth look We excited We and the wrap Thanks. you execution to an Thanks iGaming U.S. When QX of Open in our winner some in as Wallets, and combine marketing now being Look, seeing just mix and to We We the numbers. business combine year. in the we areas. e-commerce, formula the to as confident next direction story. happening think everybody. in is we're our forward very noise in a pipeline you but very, we the and overall, combine on have confident very emerging Thanks, to the We're well. I'll a the eCash, verticals. thesis like and pipeline conversations. of that on our valuable we don't you coming market. that up de that our everyone that very feel calls look in facto plenty really the the our like long-term what's for at look we direct forward winning Digital when the and we direction, But we the feel delivering to really a like Banking. really particularly And about with see it questions. follow-up and following. like tailwind we continuing the numbers, tell

Operator

Ladies and you participation. gentlemen. Thank for your

disconnect your off have log webcast may and time, You lines, a the this at wonderful day. or