Paysafe has signed a final agreement as part of its FY24 update to sell its direct sales payment processing business line.
Fourth Quarter of 2024
For the three months ending December 31, 2024, the company's total revenue grew by 1%, reaching $420 million.
Breaking it down by verticals, Merchant Solutions grew by 1% to $230 million; Digital Wallets increased by 2% to $194 million; inter-divisional segment remained at -$4 million.
During this period, the direct sales payment processing business line declined by 46%, from $24 million to $13 million.
In previous earnings calls, Paysafe executives discussed plans to reduce the company's direct marketing risks, ultimately deciding in the fourth quarter that "accelerating the exit would best support long-term shareholder value and minimize disruption to affected employees and remaining customers."
Nevertheless, net income for the fourth quarter is expected to be between $31 million and $37 million, compared to a net loss of $12 million in the same period last year.
Adjusted EBITDA fell 16% to $103 million, mainly due to a 42% decrease in Merchant Solutions to $33 million.
Company operations also declined by 6% to -$18 million, with direct sales payment processing business line dropping from $13 million to -$6 million.
The Digital Wallets' adjusted EBITDA was the only vertical industry to see growth this quarter, increasing from $319 million to $339 million.
Fiscal Year 2024
For the full year ending December 31, 2024, Paysafe's total revenue grew by 6% to $1.71 billion, thanks to growth in almost all vertical industries.
Merchant Solutions grew by 9% to $958 million, Digital Wallets by 4% to $766 million, and direct sales payment processing business line also grew by 2% to $104 million.
The only department that did not improve was the inter-divisional business, with losses increasing from -$12 million to -$18 million.
Net income for the year is expected to be between $19 million and $25 million, compared to a net loss of $20 million in 2023.
Adjusted EBITDA for 2024 fell by 2% to $452 million, mainly due to a 14% decrease in Merchant Solutions to $191 million, and a 25% decrease in direct marketing payment processing business line to $43 million.
The Digital Wallets' adjusted EBITDA grew by 6% to $339 million, while corporate profits improved from -$82 million to -$78 million.
Expectations for 2025
Paysafe expects this year's revenue growth rate to be between 6.5% and 8%, with an adjusted EBITDA profit margin between 27.1% and 27.6%, and an adjusted EBITDA growth rate reaching double digits.
The company has also approved an additional $70 million to its existing stock repurchase program.
Selling its Direct Sales Payment Processing Business Line
As part of the above results, Paysafe also announced it has signed a final agreement to sell its direct sales payment processing business line.
These assets will belong to the omni-channel payment provider Kort Payments, which is composed of several former Paysafe team members, including Joel Leonoff.
Leonoff is the Chairman and CEO of Kort Payments and was the former President and CEO of Paysafe.
He founded SureFire Commerce, which was eventually merged and acquired by Skrill to form Paysafe Group.
Paysafe's CFO John Crawford stated: "This is a meaningful step forward, by eliminating declining non-core revenue sources while significantly reducing Paysafe's exposure in high-risk verticals, we can improve financial performance.
"It is worth emphasizing that the performance of the core business is in line with our expectations for 2024, including a 10% revenue growth from the Merchant Solutions department (excluding disposed businesses), and a 4% revenue growth from the Digital Wallets department.
"We look forward to providing more details about our 2024 performance and 2025 outlook at next month's earnings call."
Meanwhile, Kort Payments stated: "We are excited to announce that Kort Payments has acquired the direct sales payment processing business from US Paysafe Direct LLC. This strategic move is an important milestone in our journey to expand capabilities, enhance service quality, and better serve our customers.
"We are very excited about the opportunities this brings and look forward to integrating the strengths of both companies to create unparalleled value for our customers.
"As we embark on this exciting new chapter, please stay tuned for more updates!"
At the 2025 EMEA Global Gaming Awards, Paysafe defeated runner-up Okto and third place Trustly to win the Payment Solution of the Year award.
