Q3 2022 Paysafe Ltd Earnings Call
Greetings and welcome to the pay States third quarter 2022 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
Minder. This conference is being recorded I would now like to turn the conference over to your host Kirsten Nielsen head of Investor Relations for pesos. Thank you you may begin.
Thank you and welcome to pay say third quarter 2022 earnings conference call before we begin a friendly reminder, that this call will contain forward looking statements and should be considered in conjunction with cautionary statements contained in our earnings release and the company's most recent SEC reports these.
This reflect management's current beliefs assumptions and expectations and are subject to factors that could cause actual results to differ materially from those forward looking statements you should not place undue reliance on these statements forward looking statements. During this call speak only as of the date of this call and we undertake no obligation to update them today's presentation.
Also contains information that will constitute non-GAAP financial measures under SEC rules, you can find additional information about these non-GAAP measures and reconciliations to the most directly comparable GAAP financial measures in today's press release and in the appendix of this presentation, which are available in the Investor Relations section of our website Jordan.
With me today are Bruce leather, Chief Executive Officer, Izzy, Dawood adviser and Alex Gersh, Chief Financial Officer. After our prepared remarks, we will address questions received from shareholders through this day technologies platform. After that we'll take questions from the analyst community.
With that I'll now turn the call over to Bruce.
Thanks, Kristen and good morning, everyone and thank you for joining us today.
Starting with slide three on the last earnings call, which was my first quarter as CEO of PC I shared my early observations on the state of the company and the path forward we.
We discussed the initial steps, we're taking to return to our roots of product innovation rebuild a strong sales engine and to improve efficiency.
I'll share more on our progress in these areas later in my remarks.
With that in mind I'd like to first welcome Alex Kurtz.
As our CFO .
Alex brings highly relevant experience, having served as CFO of major brands in gaming and entertainment. Most recently as the CFO of sports radar.
Alex has a great track record of driving results and financial discipline for public companies and I'm very excited to have him onboard.
Next I want to thank our employees for their contributions during this period of change and I am pleased to share our financial results for the quarter.
Our third quarter revenue of $366 million and adjusted EBITDA of $95 5 million.
Exceeded our financial expectations communicated in August .
Excluding the impact of movements in foreign exchange rates revenue increased 10% year over year, reflecting growth from both the U S acquiring in digital commerce.
As for the rest of the year, we are maintaining and tightening our full year outlook, which is he will take you through in more detail.
I want to reiterate that <unk> maintained a healthy financial position with transaction volume exceeding 128 billion.
Revenue approaching $1 5 billion and adjusted EBITDA exceeding $400 million over the last 12 months.
We also maintain strong liquidity and financial flexibility, while we continue to prioritize reducing our debt and leverage ratio.
Before I move on to our strategic update I'll quickly touch on the planned reverse stock split which was announced this morning.
As stated in our press release, we plan to hold a special meeting in December to seek shareholder approval for a one for 12 reverse stock split.
Once effective our total number of shares outstanding will be reduced from approximately 727 million to approximately 61 million shares which is more in line with the companies of our size and scope.
Additionally, the board believes that affecting a reverse stock split will help us appeal to a broader range of investors and improve the perception of our stock with the investment investment community new talent and other stakeholders.
Turning to slide four.
During the quarter, we made good progress across the long term growth accelerators as part of our focus to drive innovation, we executed a cost reallocation and changes to the organizational structure, which will fund sales and product investments.
Additionally, as we're going through our 2023 planning we are allocating a larger percentage of our investment towards new revenue products and improving operational efficiencies to improve stakeholder engagement.
In the third quarter, we also welcomed Rob Gatto as <unk> first chief revenue officer with the responsibility for building our global sales organization focused on existing customers, New account acquisition and business development opportunities.
Next our focus on customer experience, including improvements and fixes to our wallet, which were rolled out over the summer are yielding positive results with consumers, including increased deposit conversion rates from Q2 to Q3.
In Latin America, we continue to see great progress, while supporting our merchants from other countries looking to expand into Latin America, and tap into the high growth potential of the region.
During the third quarter, we launched with 10 merchants from PC portfolio into Latin America, including with best 365 in Mexico.
Additionally, we saw volume from <unk> customers that we have launched into Latam more than double from Q2 to Q3.
Supported by Pcs single, API, which enables seamless connections to multiple countries in the region.
Lastly, in North America, I gaming, we continue to see robust growth in the regulated market with more than 45% revenue growth in Q3.
We are currently live in 23 states following our third quarter launch in Kansas with Draft Kings Caesars endpoints that.
We look forward to upcoming launches in new states, including Maryland, and Ohio.
Moving to slide five for an update on our sales function.
We're building out our new go to market structure with organizes the sales function by our core verticals consolidates, our systems for better Kpis and visibility and we will provide a sales enablement support function for this sales team.
This new model will improve our ability to sell <unk> as a broader strategic payments offering improved pre and post deal execution and greatly increase our global pipeline and average deal size.
Spent a lot of time with Rob and the team and remain excited about what we can achieve when we align our product direction and enable our teams to efficiently go after sales.
Turning to slide six.
I'll expand upon this a bit more.
<unk> has the unique proposition for both merchant acquiring as well as consumer wallets, which comprises our cash and digital wallet solutions and this slide illustrates where we play in those constructs both regionally and across our verticals.
We have a unique unique network and many of our assets to power end to end payments for our current core verticals.
We have seen strong performance in our merchant business in North America with double digit growth year to date, that's performed well relative to the market, where we've seen headwinds as in Europe , where we have FX impacts as well as a softer market in the verticals we're in.
And we have not done as well here cross selling to our merchants. For example, we historically have had a bifurcated strategy across our gaming, where we have a strong requiring presence in north America, but not in Europe , where we play mostly with wallets need cash with many of the same merchants.
We now haven't organize the vertical under one leader to drive a holistic sales effort and offer a better solution to our merchants.
We also have a great emerging digital asset solution in our wallet business with strong offering in Europe , we are focused on bringing to the Americas.
Overall, we have a lot of opportunity to expand or deepen our presence both geographically and across our verticals to fully leverage our assets to better serve our merchants and consumers.
Let's turn to slide seven.
For an update on digital wallet.
In Q3, we saw continued signs of stabilization in progress we recorded constant currency revenue growth of 2% from those digital wallet business an improvement from the year over year declines we saw through the first half.
Total deposits on our digital wallet, we're up 9% year over year.
Lastly, it's worth pointing out on average that we saw roughly 100000, new accounts funded monthly in Q3, reflecting continued relevancy of our wallets to consumers.
There is still work to do but we're seeing signs of stabilization despite ongoing market headwinds in Europe , and I am confident that the changes we are implementing will drive further improvement and lead to greater customer loyalty and engagement.
Now I'll turn the call over to <unk> to discuss the financial results.
Thanks, Bruce and welcome Alex I would like to add that have been great working with you on the transition over the last several weeks as well, let's start with slide nine basic delivered a solid quarter versus our expectations with revenue and adjusted EBITDA slightly above our third quarter guidance ranges.
This was driven by continued strong growth from U S. Acquiring while digital Commerce segment performed in line with our expectations.
Moving to slide 10 for a summary of our third quarter results.
<unk> was $32 5 billion, an increase of 5% year over year, reflecting continued strength in the Americas, where we saw resiliency in the U S SMB market as well as strong momentum in regulated <unk> gaming in Latin America.
As a reminder, volume does not include our embedded finance solution at the majority of the embedded finance volumes exchange or peer to peer transactions, which are not revenue drivers.
Total revenue for the third quarter increased 4% to 366 million exclude.
Excluding the impact from changes in foreign exchange rates revenue increased 10%, reflecting growth in both U S acquiring and digital commerce.
Compared to the prior year at the Russia, Ukraine War impacted growth by approximately $4 million or roughly 1%.
Adjusted EBITDA for the quarter was $95 5 million, resulting in adjusted EBITDA margin of 26, 1%, primarily reflecting lower margin from the digital Commerce segment business mix as well as the one off items, including a prior year release.
During the quarter, we generated $170 million and free cash flow, bringing our last 12 month free cash flow to $259 million or 64% conversion.
As we enter Europe , we fully expect the full year free cash flow conversion to be in line with our target range of 60% to 70%.
Moving to slide 11, I will briefly touch on our GAAP results.
Interest expense was $34 6 million, an increase of roughly $6 million from Q2.
The comparison of interest expense of prior year reflects additional debt to fund the acquisitions of safety pay as well as increased rates and higher amortization of debt issuance costs.
Our GAAP net income for the third quarter was $1 million compared to a net loss of $147 million in the prior year period. The increase in net income is largely a result of the intangible impairment expense recognized in the prior year.
Adjusted net income for the third quarter was $29 2 million compared to adjusted net income of $39 4 million in the prior year largely attributable to the higher interest expense and the decline in adjusted EBITDA.
Let's move to slide 12 for a discussion on the segment results starting with U S acquiring.
Q3 volume in U S. Acquiring was $21 8 billion, an increase of 5% year on year.
Consistent with our expectations, we've seen a slight moderation of growth versus Q2.
Revenue for the third quarter was $185 4 million, an increase of 12% compared to the prior year.
Adjusted EBITDA increased 24% or $53 million, reflecting a 27% EBITDA margin.
Overall, our results for the U S acquired segment reflect continued resiliency in the U S. SMB market recovery of the direct marketing vertical and strong operational performance.
Turning to slide 13 and our.
Digital Commerce segment volumes are $10 7 billion, an increase of 3% year over year, reflecting growth from the acquisitions Rep.
Revenue was $180 6 million, a decrease of 4% year over year.
Excluding the impact from changes in foreign exchange rates, and Russia, Ukraine revenue would have increased 10% year over year, reflecting growth in both digital wallets Andy cash.
And primarily driven by contribution from acquisitions, and our new embedded finance offering.
As a reminder, in September we lap the closing of <unk> acquisition completed last year and in November we will lap the closing of the <unk> Tech deal.
Adjusted EBITDA for the digital Commerce segment was $63 5 million.
In the third quarter compared to $80 million in the prior year down 7% on a constant currency basis adjusted.
Adjusted EBITDA margin of 35, 1% was down year over year, reflecting one offs, including a prior year release as well as the small impact from foreign exchange rates.
Moving to slide 14 for a quick update on segment reporting we will be making a couple of changes in Q4 <unk>.
First the U S acquired segment will be renamed to merchant solutions and a digital commerce segment will be renamed digital wallets.
Second.
We are transitioning our integrated that e-commerce solutions or ies to the merchant solutions segment for reference the IVF business line provides e-commerce payment processing for enterprise merchants and represents revenue of $91 million on an LTM basis.
These changes better aligns our segment reporting with our consumer and merchant propositions and our strategic focus moving forward.
Our external reporting most collect the two new segments beginning in Q4 of this year and our recast version of the segment financials.
<unk> is included in the appendix section of this presentation.
On slide 15, we will look to our balance sheet and liquidity.
Cash and cash equivalents were $220 million at quarter end net debt was $2 3 billion and our net debt to LTM. Adjusted EBITDA ratio was five five times down from five seven times at the end of Q2.
Driven by FX movement in our euro denominated debt as well as debt repayment.
In Q3, we completed debt payments and repurchases of approximately $31 million in notional debt and we continue to monitor pricing of both our term debt and notes and will act opportunistically to take advantage of current trading levels.
Depending on interest rate movements, we expect Q4 interest expense to be between 33 at $35 million.
Let's move to slide 16 to discuss the outlook at.
That's a close out the year, we expect Q4 revenue in the range of $370 million to $378 million and adjusted EBITDA in the range of $105 million to $109 million.
Which reflect flat to modest growth year over year on a reported basis with both metrics.
Excluding an expected 1% headwind from the Russia, Ukraine War, and a 67% headwind from FX. This reflects high single digit growth year over year in Q4.
At the segment level on a year on year basis, we expect merchant solutions to grow high single digits.
And digital wallets to increase sequentially.
Similarly based on the prior segment structure. This would reflect high single digit growth from U S acquiring and a sequential increase from digital commerce.
Turning to the full year on slide 17 for the full year, we expect revenue to be roughly flat year over year on a reported basis and mid single digit growth on a constant currency basis.
We expect merchant solutions to grow high single digits year over year, and digital wallets to be up low single digits, excluding the headwind from FX and the Russia, Ukraine War.
For the total company adjusted EBITDA is expected to be between 407 and $411 million, reflecting lower margins, primarily driven by the business mix.
Overall discipline, a tightening towards the higher end of our most recent full year guidance communicated on our Q2 earnings call now I'll turn the call back to Bruce for closing remarks.
Thank you.
To summarize we are pleased with the third quarter results and with the progress our team has made over the last five months we.
We have simplified the organization and go to market model, while adding new talent to help us regain momentum and accelerate growth. We also have refined and improved our strategic focus and priorities, while fostering a more collaborative culture.
I'll conclude by reiterating that I continue to feel excited by the potential I'm seeing in the company.
So much so that in September I personally purchased one 2 million shares of <unk> stock on the open market, which is my earliest opportunity to purchase shares since joining the company.
While we are facing an uncertain economic environment and have changes in the business to address I am confident that the actions. We are taking will set us up for growth in 2023 and beyond.
Now, let's begin with the Q&A session.
Thank you Brad we.
We are partnering with say technology for the first time with this event to open up a new shareholder Q&A Forum, which allows all of our shareholders to submit questions.
Plan to skip questions that were already addressed in our presentation and we will also have grouped together questions that share common theme after that I will turn to questions from our research analyst community.
Our first question is from Jason who would like to know if we have plans for share buyback.
I'll take that question.
So I think as we've said that we don't have any plans for share buyback at this time, considering the current trading levels of our debt and the rising interest rate.
Environment as we've said in the last quarter as well, reducing our debt as a priority.
So our leverage ratio is higher than we want it to be focused on reducing leverage by driving EBITDA growth and debt reduction.
Thank you Brad next we have a couple of questions asking about our growth next year and overall opportunities in this competitive market what actions if peso taking to differentiate and drive customer engagement.
We've touched upon this in our presentation, but is there anything you'd like to add a reiterate Brad.
Sure look thanks for the questions.
We're still finalizing our budget for 2023, we need to kind of work through that process C, where we exit the year.
Then we'll provide guidance as we normally do in the next earnings call.
For the 2023 year.
As I addressed in kind of the prepared remarks.
We've taken a lot of action to re invigorate growth and I expect.
To support improvement next year.
Pacey.
As I talked about last quarter serves massive Tam.
Crossing entertainment verticals with attractive tail winds over the long term.
We're a small player today with plenty of runway to grow in our core markets.
And we must do a better job of executing product innovation and sales.
We have lots of.
Opportunities to expand and deepen our presence both.
Geographically and across our verticals to fully leverage our unique network to better serve merchants and consumers. So feel very very bullish on the opportunities in front of us.
Okay. Thanks, Brad let's take one more question from the same platform today.
Joe asked when will become profitable.
Could you help clarify this one yeah sure Pearson.
First let's clarify that we are profitable today based on the key metrics that we follow and share.
We generated adjusted EBITDA of 408 million over the last 12 months.
Along with positive free cash flow when we look at the bottom line. We also generated positive adjusted net income for the last two quarters, which is when we introduced the metric even this quarter. We had positive net income on a GAAP basis and district will vary due to non operational and non cash items.
If you'd like any further clarification on these metrics welcome you to reach out to our IR Department.
If I could follow up as well.
Alright, Thanks is Ian Thanks, Brad and with that I would now like to turn the call back over to the operator to open up the phone lines and take questions operator.
Thank you.
If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question. Kim You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
Our first question comes from the line of David <unk> with Evercore ISI. Please proceed with your question.
Thank you good morning could you drill down into what drove the strength in F&B retail payments in the quarter.
So.
Look I think we just had a good quarter in SMB, so as you've seen throughout the year.
I should have said good morning, but.
As you've seen throughout the year.
Ashton and his team in our U S acquiring business has performed exceptionally well.
And so we continue to see growth there we continue to see.
That team performing at a high level I think when you look at it compared to <unk>.
<unk> out there the team this year has really performed very well.
Sales is going very well and we continue to.
Look for big things coming from our acquiring business.
Got it just as a quick follow up.
With net debt to EBITDA at five five times LTM EBITDA, how much headroom do you have.
Until you reach your loan covenant.
Ratios.
Hey, David Thanks for the question Yeah, We got a fair amount of headroom I mean for our first clean now can get anywhere close to where we get like a seven plus.
In terms of our debt covenants, a fair amount of capacity there.
Thank you.
Thank you David.
Thank you. Our next question comes from the line of Jamie Friedman with Susquehanna. Please proceed with your question.
Hi.
Good quarter greetings.
I wanted to ask about.
Two.
Rebuilding our sales organization slide Bruce it's slide five.
You're moving into these new this new structure vertical wise I was hoping you could share any context about the rationale and what you hope to achieve with the new sales structure.
Yes, Jamie good morning, and thanks for the question look.
As I talked about in the call last quarter.
One of the things that that was very obvious as our sales teams were very siloed and so there, we're leaving a lot of opportunity on the table.
When you look at.
How we're constructing now lining up around verticals.
Not so much just by product what youre going to have is the opportunity for our team to go in and sell our full solution suite instead of just a point product.
We're already having some success with that Youll hear more about that in the next quarter, but.
We've brought in some great talent I think Rob has done a really phenomenal job of.
In such a short time period.
Getting us organized.
Putting together.
Sales structure is putting together a sales plan on what we're going to sell to those.
To those merchants and <unk>.
Feel like we've really made a great transition in a short time.
So I would expect to see.
As we're moving forward.
<unk> from that fairly quickly.
But theres a lot of work to go there.
Again.
The nice thing is we've been able to sell our E comm solution into the gaming space for example.
In North America, we just because of the silos that we had.
We just didnt sell it into Europe , and now the way Rob has the organization constructed it's a much more natural motion for us to sell everything into those clients. So feel very excited about the change in and I think we'll be very pleased with the outcome.
And then for my follow up.
Slide seven I wanted to ask you about the improvement in the wallet, which is now stabilizing.
It's actually growing.
For the first time in a while.
So.
Why are you seeing the improved performance here Bruce is it.
Total deposits that you called out or is it.
The new interface that you bill what some high level comments on this would be helpful.
Yes again, great question look at fixture Rog and his team have done very well here.
It came in.
What in some new talent trucks done a great job of also bringing in some talent to look at the usability of the product, we've really kind of changed a little bit of our mindset to talk about the experience within the wallet and we're focusing on.
Bringing new feature functionality to the wallet.
To create better experiences some of the things that his team has done has been to improve that experience and we've seen benefits from that so people are we've reduced some of the friction that is with the wallet and so youre seeing a higher conversion rate of deposits. So.
Early signs here are very positive.
Still a long way to go on product, but the things that <unk> and his team are doing are you can see some results.
And I agree with you guys it looks like its stabilized and now.
<unk> will need to build upon that.
Great. Thank you I'll jump back in the queue.
Thank you.
Thank you. Our next question comes from the line of Darrin Peller with Wolfe Research. Please proceed with your question.
Good morning, Darrin, Hey, guys.
Maybe we could just follow up on the wallet side, because the stability was nice to see but.
And I think the initiatives you guys have been working on it seems to be paying off.
Maybe we could just remind us what exactly the strategic vision is for the segment and then I know there's also been some partnership with finance and some others.
In an industry, that's been at least perceived as a little bit more risky so.
If you could just comment.
The exposure there.
Sure.
So first just strategically on the on the wallet.
<unk>.
I think historically the wallet has been really geared at the.
The gaming vertical.
It has done historically very well it's been around for 20 years.
It's had a great.
Great lifecycle.
I think what Youre seeing is now a movement where experience is really important to us and so we're really trying to take into how do we increase the velocity of usage of the wallet, how do we broaden out the wallet a little bit within the entertainment vertical as I call it and make it more.
Usable for people not so specific so that seems to be the strategy for it. We also we're going to focus a little bit on.
Bringing our products together, so incorporating more of our E com payments.
Payments orchestration with the wallet as we move forward, you'll start hearing me talk more and more about that as we get to our Investor day in Q4.
As far as the the crypto I mean, we've got a nice little crypto business, we've been in that business I think going back to 2012 as if memory serves me correctly.
On Binance specifically.
It's a great customer we've.
<unk> had them for a little while and we provide.
Label wallet for them.
So it's from an exposure perspective, we don't really see a lot of exposure.
That relationship and Darren.
Overall, the crypto business.
That we have is less than 3% of our overall revenue base as well.
Events of the last couple of days, obviously increased volatility, which you know has a small short term benefit by the end of the day, it's a relatively small exposure.
Okay are those are those binance downloads or apps are those in your number your accounts for digital wallet growth at all or is that separate it out because I know, it's a different model to some degree but just a quick follow up if you don't mind I'd just add on I put it all together at once.
Profitability of the store it looks like you've found a place that makes sense from a EBITDA standpoint.
Great to see the the <unk>.
<unk>, where it was.
Narrowed in and really maintained and when we look at what Youre thinking about going forward I mean is if you.
Could just remind us on the levers you guys have in different kinds of environments throughout the next year or so profitability wise and expense management wise would be great.
Yes, I never get much into next year as Bruce mentioned.
The Investor day.
After the Q4 call, we'll get into it but I think just going into next quarter, a couple of levers to think about.
First and foremost it is a.
Seasonally more active quarter for sports betting.
In Q4 up on top of that this World Cup.
And third initiatives discussed <unk> been working on so as a result, our digital commerce business.
<unk> show sequential increase and that business also has a higher EBITDA margin. So a combination of those two give us the the outlook and confidence into Q4 in terms of the leverage that will be driving improved profitability.
And just on the finance is that is that included in the numbers here.
It started at 90 accounts no. We don't have any of the castle volumes because it's just.
It's just like if all the volume that comes through there is really peer to peer exchanges and.
And wallet.
That's not generate revenue.
Great. Thanks, guys.
Yes.
Thank you. Our next question comes from the line of Tim Chiodo with Credit Suisse. Please proceed with your question.
Great. Thanks, a lot I know we hit on this before but I wanted to circle back on the strength in U S. SMB retail if you could just do a recap of maybe how large that portion is within the current segment of us acquiring and also just a recap on the means of distribution how much of that is a direct sales force selling into someone else's software how.
Much is.
Indirect how much of that might relate to clover or others in other words, what what is being sold into the smbs that seems to be gaining a good bit of traction.
Yes.
From a from an overall <unk>.
Vertical it is about half of the company as a U S acquiring.
When you break down a little bit further between direct and indirect you can look at it about a 50% split between direct and indirect.
So.
The team is just performing very well.
Yes.
What they do have the ability to do as they do sell.
A variety of <unk>.
Platforms, whether it be.
Clover as you as you called out in particular.
Or a variety of other platforms they sell as well so I think that drives kind of the value proposition a little bit for them is we have a group that is somewhat agnostic to the.
Pos.
Software or device.
And our clients get to choose which ones. They want to go with what you have to win matches their needs. So it's kind of a unique value proposition from that construct.
But again, I think ash and and the team are doing a really good job too.
Performed.
Right up there with the best in the space. This.
This year and we expect that to continue.
Excellent. Thank you.
The second question around.
In the past you had mentioned in some of the gaming verticals in Europe that there had been some other atms or LTM bank based type of payment methods that had been maybe creating a little bit of price competition.
Maybe that was account to account type stuff if you could maybe just update on.
Anything's changed there if that's dissipated or if that's still happening in other words is there increasing options <unk> pricing pressure associated with.
European online gaming.
Yes look from my perspective.
What I would say is short all of those things are happening right. There is I think thats just a normal piece of competition.
Payment types are changing.
Avenues are changing on a way to execute things.
None of that is impeding our growth.
We are impeding our growth we have to execute better and that's what we're doing we've reorganized the sales organization to attack that market.
And Theres no reason to believe that we can't grow.
In line with our peers as we continue to make progress on the transformation. So this is ed.
A big Tam opportunity natural tailwind, we have the assets to compete and we will compete as we move forward here.
Excellent. Thank you for taking the questions.
Thank you, ladies and gentlemen, as a reminder, if you'd like to join the question queue. Please press star one on your telephone keypad.
Next question comes from the line of Dan Perlin with RBC capital markets. Please proceed with your question.
Thanks, Good morning.
Wanted to just dive in a bit on your international expansion that you called out specifically around.
Latin America I'm, just wondering what specifically.
Youre doing in that market I mean, we've heard from others as well that the Latin American market has been quite strong. So I'm wondering one is it just the market dynamics that are driving this massive growth that you saw recently.
On a sequential basis.
Or are there specific things that are transpiring in the products that you're offering that is maybe share gaining.
Anything there would be fantastic. Thanks.
Yes, let me start off and I'll ask you to kind of jump in.
A little more of the history of it but as you know we've done a couple of acquisitions down there over the last year.
Those are performing very well alright, so when you look at our growth rates there.
We have a really solid growth growth rate on those acquisitions.
Performing in line with what we expected as we did our business case to do the acquisition. So feel very good about the business. Obviously, there are small businesses relative to the overall size of the company.
But.
The product resonates.
Down there I think there's a lot of growth opportunities for us, we're bringing some of our existing products to Latin America. So we'll be able to cross sell more we've opened up some natural channels.
On between Europe , and Latin America, So, we're bringing our customers European customers down to Latin America, and that's really going to help accelerate our revenue down in Latin America as well, so a lot of opportunity for us there.
We feel very bullish about it to stoffel and his team doing a great job and.
If you want to add any yes, Bruce I'll, just double click on it.
One of the key things, obviously, bringing our European game.
Gaming operators in Latin America, which is a fast growing market is definitely a plus.
Why do they want to get down there of Pago has incredibly strong brand recognition in Peru.
And we're basically leveraging the growth off that brand recognition is driving its been performing really well and the second part safety <unk> had some really good technology and connections in the real time banking or open banking space again, improving b.
The efficacy of that payment method and multiple Latin American markets. So you combine that with our strong operator based in Europe , which again that operated basis global it's turning out to be a very nice set of acquisitions are propelling our growth.
Yeah, that's a very good point about the about the corridor.
Thank you for that just my quick follow up are you seeing any and maybe even more broadly are you seeing any consumer behavior dynamics.
Just as we think through kind of gaming.
Kind of a discretionary category versus non discretionary any weakness there that you can call out and then how do you think that market or business in general performed to the extent that we move into a recession or certainly.
More difficult times ahead. Thank you.
Yes.
So thank you for the question.
Alex is on as well and if he wants to chime in in a minute on kind of the gaming experience but.
We're not seeing anything right now that indicates.
Any issues with the spend.
October was pretty solid month for us.
So we're feeling.
We're in a good spot.
Again, what I would kind of point out is.
We have a lot of opportunities to grow and you come up to.
Where our peers are performing so well some of them that are high growing organizations may be running into some.
The headwinds we have a lot of a.
A lot of room to continue to improve and accelerate.
Plan on doing that so we're not seeing any real issues around discretionary spend I think the.
What we see.
In the gaming space the recession, it doesn't seem to impact at that greatly.
Alex has come from that space, you can probably comment better on that.
Bruce I can only comment on economic Echo.
Your comments.
Certainly if you've seen what some of the operators have been reporting globally and then the U S. Particularly those that are growing in the U S. We have the opportunity to work with the some of the operators in the US you could see that April seems to be quite short.
Yes, I know it seems to be holding up pretty well I'm a little surprised by quite frankly, so thank you so much I appreciate it.
Thank you.
Thank you, ladies and gentlemen that concludes our time allowed for questions I'll turn the floor back to Mr. Leathers for any final comments.
Great well look.
Thank you everyone for your time today I also want to make sure that we think.
Is he who has been a great partner with me here over these last six months.
For all your contributions here at <unk> and we all wish you well as you.
Move on to your future endeavors.
Thank you very much.
Thats it from here, we really appreciate it and look forward to talking to everyone. Soon.
Thank you. This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.