Paysafe jumps 14% after Q1 earnings

Paysafe Limited (PSFE.US), US online payments company, is rallying at a double-digit pace in premarket today. An around-14% share price jump was triggered by release of an upbeat Q1 earnings report.

Paysafe reported a 7.7% YoY jump in Q1 revenue to $417.7 million, more than expected by analysts. Meanwhile, cost of revenue increased 7.2% YoY, less than expected and less than revenue did. This has paved the way for a beat in gross profit data and an improvement in gross margin. Operating income dropped slightly compared to a year ago, but was still higher than expected by analysts. Q1 2024 was also the first quarter since Q3 2022, when Paysafe managed to achieve positive net income on a GAAP basis (unadjusted basis).

In spite of Q1 2024 earnings beating market expectations, company decided to maintain its previous full-year outlook. Full-year revenue forecast suggest 5.6-6.9% growth this year, while adjusted EBITDA forecast suggests a 7.6-11.1% growth.

Paysafe Q1 earnings

• Revenue: $417.7 million vs $408.3 million expected (+7.7% YoY)
  • Merchants: $231.4 million vs $226.1 million expected (+11% YoY)
  • Digital Waller: $190.5 million vs $184 million expected (+5% YoY)
• Cost of revenue: $170.4 million vs $174.5 million expected (+7.2% YoY)
• Gross profit: $247.4 million vs $235.9 million expected (+8.1% YoY)
  • Gross margin: 59.2% vs 57.6% expected (59% a year ago)
• Adjusted EBITDA: $111.9 million vs $110.8 million expected (+3.8% YoY)
  • Adjusted EBITDA margin: 26.8% vs 27.1% expected (27.8% a year ago)
• Operating income: $43.3 million vs $38.4 million expected (-2.1% YoY)
  • Operating margin: 10.3% vs 9.4% expected (11.4% a year ago)
• Net income: $3.1 million vs $2.4 million expected (-$3.8 million a year ago)
  • Net margin: 0.7% vs 0.6% expected (-1.0% a year ago)
• Diluted EPS: $0.05 vs $0.04 expected (-$0.06 a year ago)
• Adjusted diluted EPS: $0.57 vs $0.50 expected (0.54 a year ago)

Paysafe full-2024 forecast

• Revenue forecast unchanged at $1.69-1.71 billion (exp. $1.70 billion)
• Adjusted EBITDA forecast unchanged at $473-488 million (exp. $476 million)

Beat in Q1 results and a rather conservative 2024 outlook are driving a surge in Paysafe shares in premarket trading today. Stock trades around 14% higher, based on the latest premarket quotes, indicating an opening around $17.85. Taking a look at Paysafe (PSFE.US) chart at D1 interval, we can see that the stock is set to open near the upper limit of a short-term channel. 

Source: xStation5