Q1 2024 Payoneer Global Inc Earnings Call
Operator: Good morning. Thank you for standing by. Welcome to Payoneer's first quarter 2024 earnings conference call. At this time, all lines have been placed on mute to prevent any background noise. Following the speaker's remarks, we will open the lines for your questions. As a reminder, this conference call is being recorded. I would now like to turn the call over to Michelle Wang, Payoneer's VP of Investor Relations.
Good morning, Thank you for standing by welcome to opinion Years' first quarter 'twenty 'twenty four earnings call Conference call.
At this time all lines have been placed on mute to prevent any background noise. Following the Speakers' remarks, we will open the lines for your questions. As a reminder, this conference call is being recorded I would now like to turn the call over to Michelle Wang <unk> VP of Investor Relations.
Michelle Wang: Thank you, Operator. With me on today's call are Payoneer's Chief Executive Officer, John Caplan, and Payoneer's Chief Financial Officer, Beatrice Ordonez. Before we begin, I'd like to remind you that today's call may contain forward-looking statements, which are subject to risks and uncertainties. For more information, please refer to our SBC filings, which are available in the Investor Relations section of Payoneer.com. However, actual results may differ materially from any forward-looking statements we make today.
Michelle Wang: Thank you operator with me on today's call our tenure as Chief Executive Officer, Jon Caplan, and Pena, Chief Financial Officer, B or don't yet before we begin I'd like to remind you that today's call may contain forward looking statements, which are subject to risks and uncertainties for more information. Please refer to our filings with SEC, which are available in the.
Michelle Wang: Foster relations section of pay in your Dot com actual results may differ materially from any forward looking statements we make today.
Michelle Wang: These forward-looking statements speak only as of today, and the company does not assume any obligation or intent to update them except as required by law. In addition, today's call may include non-GAAP measures. These measures should be considered in addition to and not instead of GAAP financial measures. Reconciliation to the nearest GAAP measure can be found in today's earnings press release, which is available on our website. Additionally, please note we have posted an earnings presentation supplement alongside our earnings press release on investor.payoneer.com. All comparisons made on today's call are on a year-over-year basis, unless otherwise noted. With that, I'd like to turn the call over to John to begin.
Michelle Wang: Forward looking statements speak only as of today and the company does not assume any obligation or intent to update them, except as required by law.
Michelle Wang: Today's call May include non-GAAP measures. These measures should be considered in addition to and not instead of GAAP financial measures reconciliations to the nearest GAAP measure can be found in today's earnings press release, which is available on our website.
Michelle Wang: Additionally, please note we have posted an earnings presentation supplement alongside our earnings press release on Investor Dot Pioneer Dotcom all comparisons made on todays call are on a year over year basis, unless otherwise noted with that I'd like to turn the call over to John to begin.
John R. Caplan: Good morning, everyone, and thank you for joining us today. We begin 2024 with strong momentum. In Q1, we grew customers who fit our ideal customer profile, or ICPs, by 8%. We continue to drive even faster growth among larger ICPs and those in regions with higher take rates. Our volume increased by 21%, marking the highest growth rate in nearly three years.
John: Good morning, everyone.
John: Thank you for joining us today.
John: We begin 2024 with strong momentum.
John: Q1.
John: Grew customers, who fit our ideal customer profile or ICP it by 8%.
John: We continue to drive even faster growth among larger ICP and those in regions with higher take rate.
John: Our volume increased by 21%, marking the highest growth rate in nearly three years.
John R. Caplan: We generate strong growth across every channel. We grew in our higher take-rate B2B and merchant services businesses, as well as in our marketplace and enterprise payout channels. Total revenue grew 19%, and excluding interest income and normalizing for $7.5 million of non-volume fees earned in Q1 of 2023, our revenue was up 21%. We delivered a record adjusted EBITDA margin of 29%, fueled by strong revenues and sustained expense discipline. S&Bs in 190 plus countries and territories.
John: We generated strong growth across every channel we grew in our higher take rate <unk> and merchant services businesses as well as in our marketplace and enterprise payout channels.
John: Total revenue grew 19% excluding.
John: Excluding interest income and normalizing for seven and $5 million of non volume fees earned in Q1 of 2023, our revenue was up 21%.
John: We delivered record adjusted EBITDA margin of 29% fueled by strong revenues and sustained expense discipline.
John: S&P is at 190 plus countries and territories.
John R. Caplan: Payoneer is building the business-grade financial stack for all their cross-border AR and AP needs. Over the past year, we have focused on accelerating growth and increasing profitability, and our efforts are paying off.
John: Dan Here is building the business great financial stack for all of their cross border E. R. M.
John: Over the past year, we are focused on accelerating growth and increasing profitability.
John: Our efforts are paying off.
John R. Caplan: We are successfully capturing opportunity in the $6 trillion global cross-border B2B market. We achieved 33% volume growth in Q1, more than doubling the 13% growth of the previous quarter. Our momentum comes from a number of strategic initiatives well implemented over the past year. For example, we have focused our B2B acquisition efforts on service-oriented markets where we have strong product market fit and higher take rates. As a result, we have grown B2B volume from service-oriented markets in APEC, LATAM, and SEMEA by over 30% in Q1.
John: We are successfully capturing opportunity in the six trillion dollar global cross border <unk> market.
John: We achieved 33% volume growth in Q1.
John: More than doubling to 13% growth of the previous quarter.
John: The momentum comes from a number of strategic initiatives well implemented over the past year.
John: We are focused on our <unk> acquisition efforts on service oriented markets, where we have strong product market fit and higher take rate as a result, we have grown <unk> volume from service oriented markets in APAC Latam and EMEA.
John: 30% in Q1.
John R. Caplan: We open new verticals we now support, including agriculture in Ukraine, beauty products in Asia, and marketing services firms globally. New verticals launched over the past year have already contributed tens of millions of dollars of incremental B2B volume in Q1. We are deeply committed to building the best products for our customers. We've reduced friction in our onboarding process and delivered new features and functionality. As an example, we made it easier for customers to load funds into their Payoneer accounts, an important feature for B2B customers who use our platform to pay their global suppliers and contractors. We've added features to increase convenience, such as the ability to automate large batches of payments or schedule recurring payments.
John: We opened new verticals, we now support including Agriculture, and Ukraine beauty products in Asia, and marketing services firms globally.
John: New verticals launched over the past year have already contributed tens of millions of dollars of incremental <unk> volume in Q1.
John: We are deeply committed to building the best product for our customers.
John: Reduced friction in our Onboarding process and delivered new features and functionality. One example, we made it easier for customers to load funds into their paying your accounts and an important feature for me to be customers, who use our platform.
John: Pay their global suppliers and contractors.
John: We've added features to increase convenience.
John: Such as the ability to automate large batches of payments or schedule recurring payments.
John R. Caplan: We also recently increased the methods B2B customers can receive payment, including by adding direct from bank payments in Europe. These enhancements will help drive long-term retention of our B2B customers. We are expanding the take rate in our S&B customer business. We increased our S&B customer take rate by four basis points, driven by pricing initiatives we've launched over the past year and faster growth in our higher take rate businesses and regions. We continue to drive our food expansion, up for an increase of 31% in Q1 and 13% excluding interest income. This 13% growth is an acceleration compared to the 9% year-over-year growth in Q4.
John: We also recently increased the methods <unk> customers can receive payments, including by adding direct from bank payments in Europe.
John: These enhancements will help drive long term retention of our <unk> customers.
John: We are expanding the take rate in our SMB customer business.
John: We increased our SMB customer take rate by four basis points, driven by pricing initiatives, we've launched over the past year and faster growth and a higher take rate businesses and region.
John: We continue to drive <unk> expansion.
John: <unk> increased 31% in Q1 and 13% excluding interest income.
John: This 13% growth is an acceleration compared to the 9% year over year growth in Q4.
John R. Caplan: We are increasing our proof for our pricing initiatives and our focus on acquiring larger ICPs. We are pleased with our Q1 results. The accelerating underlying revenue growth we're driving gives us confidence that our strategy is working. We remain incredibly focused on delivering our plan and capturing the significant opportunity ahead of us. Cross-border trade is undergoing a transformative evolution. (Inaudible) changing geopolitical landscapes and increasing consumer purchasing power driven by the rise of the middle class around the globe.
John: We are increasing our pool for our pricing initiatives and our focus on acquiring larger ICP.
John: We are pleased with our Q1 results the accelerating underlying revenue growth, we're driving gives us confidence that our strategy is working.
John: We remain incredibly focused on delivering our plan and capturing the significant opportunity ahead of us.
John: Ross border trade is undergoing a transformative evolution.
John: Okay by technological advancements, which are disrupting traditional ways of working and shopping demographic shifts.
John: Ranging geopolitical landscapes.
John: Increasing consumer purchasing power driven by the rise of the middle class.
John: Round the globe.
John R. Caplan: In this dynamic environment, the role of fast-growing emerging markets as both consumers and entrepreneurs cannot be overstated. Entrepreneurs, particularly in emerging markets where Payoneer is strongest, are driving innovation, creating new business models, and capitalizing on digital platforms to expand their reach beyond traditional borders. And it is these customers that are choosing Payoneer to make it easier for them to do business globally.
John: This dynamic environment, the role of fast growing emerging markets as both consumers and entrepreneurs cannot be overstated.
John: Entrepreneurs, particularly in emerging markets, we're paying here its strongest are driving innovation, creating new business models and capitalizing on digital platforms to expand their reach beyond traditional borders.
John: And it is these customers that are choosing pain here to make it easier for them to do business globally.
Speaker Change: In closing.
John R. Caplan: We're delivering robust revenue growth across the entire platform and significant profitability. As we embark on Q2, we're enthusiastic about our momentum and remain laser focused on our mission to connect global SMBs to the digital economy while delivering significant value for our shareholders. We are proud of our team. We are confident in our opportunity; our efforts are paying off. I'll now turn it to Bean to discuss our financial results and our increased guidance in more detail.
Speaker Change: We are delivering robust revenue growth across the entire platform and significant profitability as we embark on Q2, we're enthusiastic about our momentum and remain laser focused on our mission to connect global SMB is to the digital economy while.
Speaker Change: While delivering significant value for our shareholders.
John: We're proud of our team.
John: We're confident in our opportunity our efforts are paying off.
Speaker Change: I'll now turn it to be.
Speaker Change: To discuss our financial results and our increased guidance in more detail.
Beatrice Ordonez: Thank you, John, and thank you to everyone for joining us. We delivered strong performance across the platform in Q1. We grew volume by 21 percent, representing a fifth straight quarter of accelerating growth. We grew revenue by 19 percent, growing revenues x interest income by 15 percent, or 21 percent when normalized for non-volume fees earned last year. We achieved a record 29% adjusted EBITDA margin. We continue to return cash to shareholders, repurchasing $51 million worth of shares during the quarter.
Be: Thank you John and thank you to everyone for joining us.
Speaker Change: We delivered strong performance across the platform in Q1, we grew volume by 21%, representing a fifth straight quarter of accelerating growth.
Speaker Change: We grew revenue by 19% growing revenues ex interest income by 15% or 21% when normalized for non volume fees earned last year.
Speaker Change: We achieved a record 29% adjusted EBITDA margin.
Speaker Change: We continue to return cash to shareholders repurchasing $51 million worth of shares during the quarter.
Beatrice Ordonez: Turning to our first quarter results, revenue of $228 million was up 19 percent. Growth was driven by interest income on customer funds, momentum in our B2B business, strong performance from SMBs selling on e-com marketplaces, the benefit of pricing initiatives implemented in 2023, and consistent ICP growth. We grew revenues from our SMB customers by 21% and continue to see positive take rate dynamics within our SMB business. Volume growth of 21% reflected broad-based strength.
Speaker Change: Turning to our first quarter results revenue of 228 million was up 19%.
Speaker Change: <unk> was driven by interest income on customer funds momentum in <unk> business strong performance from SMB selling on E. Comm market places the benefit of pricing initiatives implemented in 2023 and consistent ICP growth.
Speaker Change: We grew revenues from our SMB customers by 21% and continue to see positive take rate dynamics within our SMB business.
Beatrice Ordonez: Our B2B business delivered 33% volume growth in Q1, a significant acceleration compared to 13% growth in Q4 of 2020. We generated over 200% volume growth in our merchant services business and continue to grow the number of 10K plus ITPs using our checkout products. 13% volume growth from SMBs that sell on marketplaces reflected both the residual benefits of a strong holiday season, as well as ongoing robust performance in the e-com sector and in our acquisition and retention of large marketplace sellers.
Speaker Change: Volume growth of 21% reflected broad based strength.
Speaker Change: <unk> business delivered 33% volume growth in Q1.
Speaker Change: Michigan acceleration compared to 13% growth in Q4 of 2023.
Speaker Change: We generated over 200% volume growth in our merchant services business and continue to grow the number of 10-K, plus icp's using our checkout product.
Speaker Change: 10% volume growth from Smbs that sell on marketplaces reflected both the residual benefits of a strong holiday season, as well as ongoing robust performance in the E comm sector and in our acquisition and retention of large marketplace sellers.
Beatrice Ordonez: Enterprise payouts growth of 34% was driven by continued strong travel volume, including the ramp-up of new routes we won a year ago. Our Q1 take rate of 124 basis points decreased by one basis point, while on a normalized basis, our take rate increased by three basis points.
Speaker Change: Enterprise payouts gross of 34% was driven by continued strong travel volume, including the ramp up of new routes, we won a year ago.
Speaker Change: Our Q1 take rate of 124 basis points decreased one basis point, while on a normalized basis, our take rate increased by three basis points.
Beatrice Ordonez: We continue to expand our SMB customer take rate, which increased four basis points driven by our pricing initiatives and faster growth in higher take rate businesses and re. Our customers value the utility that their Payoneer account provides, including the ability to hold balances in multiple currencies and to manage their cross-border AR and AP needs from a single account. Customer funds held by Payoneer increased 8% to $5.9 billion, and we earned $65 million in interest income from these balances in Q1.
Speaker Change: We continue to expand our SMB customer take rate, which increased four basis points, driven by our pricing initiatives and faster growth and higher take rate businesses and region.
Speaker Change: Our customers value the utility that that payment account provides including the ability to hold balances in multiple currencies and to manage that cross border.
Speaker Change: <unk> needs from a single account.
Speaker Change: Customer funds held by paying it increased 8% to $5 9 billion and we earned $65 million in interest income from these balances in Q1.
Beatrice Ordonez: Total operating expenses of $190 million were up 7%, driven primarily by higher transaction costs, as well as continued investment in our product roadmap and in marketing spend related to certain cross-sell activities and incentives. Transaction costs of $34 million increased 25% broadly in line with volume growth and were impacted by continued mix shift into our fast growing B2B and merchant services business. Transaction costs represented 14.9% of revenue and an 80 basis point increase from the prior year period.
Speaker Change: Total operating expenses of $190 million were up 7% driven primarily by higher transaction cost as.
Speaker Change: As well as continued investment in our product roadmap and in marketing spend related to certain cross sell activities and incentives.
Speaker Change: Transaction cost of $34 million increased 25% broadly in line with volume growth and were impacted by continued mix shift into our fast growing <unk> and merchant services businesses.
Speaker Change: <unk> costs represented 14, 9% of revenue, an 80 basis point increase from the prior year period.
Beatrice Ordonez: Sales and marketing expense of $50 million increased $2 million, or 4%, driven by higher marketing spend related to card incentive programs and partner commissions. We continue to drive greater efficiency within our sales organization and have kept labor costs relatively flat year over year, while we increased our acquisition efforts around larger ICPs and in key markets, and we're able to increase the number of 10k plus ICPs added per salesperson. P&A expense decreased $2 million, or 9%, primarily due to reductions in headcount.
Speaker Change: Sales and marketing expense of $50 million increased $2 million or 4% driven by higher marketing spend related to card incentive programs and partner Commission.
Speaker Change: We continue to drive greater efficiency within our sales organization and have kept labor costs relatively flat year over year, while we increased our acquisition efforts around larger ICP and in key market.
Speaker Change: We're able to increase the number of 10-K, plus icp's added per sales person.
Speaker Change: G&A expense decreased $2 million or 9% primarily from reductions in head count and other operating expense was relatively flat year over year, even as transactional volumes increased with decreased labor costs, largely offset by higher <unk> costs.
Beatrice Ordonez: Other operating expense was relatively flat year-over-year, even as transactional volumes increased, with decreased labor costs largely offset by higher IT costs. R&D expense increased $3 million, or 9%, driven by higher labor-related costs. We continue to invest in our platform and capabilities. Average R&D headcount was up nearly 20% year-over-year, even as our total average headcount is down mid-single digit.
Speaker Change: R&D expense increased $3 million or 9% driven by higher labor related costs, we continue to invest in our platform and capabilities.
Speaker Change: R&D head count was up nearly 20% year over year, even as our total average head count is down mid single digits.
Beatrice Ordonez: Our R&D resources are broadly allocated as follows. Approximately a third of resources are dedicated to initiatives tied to growth. This includes enhancing our product offerings and B2B capabilities and improving our overall UX to drive greater engagement, cross-sell, and retention. A third is tied to enablement and efficiency investments, including in our compliance infrastructure and money movement capabilities and in our data capability. Today, approximately a third is tied to maintenance and ongoing platform modernization efforts, which are in part designed to reduce the spend in this category over time.
Speaker Change: R&D resources are broadly allocated as follows.
Speaker Change: Approximately a third of resources are dedicated to initiatives tied to growth.
Speaker Change: This includes enhancing our product offerings, and <unk> capabilities and improving our overall UX to drive greater engagement cross sell and retention.
Speaker Change: A third is tied to enablement and efficiency investments, including in our compliance infrastructure and money movement capabilities and in our data capabilities today.
Speaker Change: Today, approximately a third is tied to maintenance and ongoing platform modernization efforts, which are in part designed to reduce the spend in this category over time.
Beatrice Ordonez: Adjusted EBITDA was $65 million compared to $39 million in the prior year period. This represents a record 29% adjusted EBITDA margin in the quarter. Net income was $29 million compared to $8 million in the first quarter of last year. Q1 basic and diluted earnings per share was $0.08.
Speaker Change: Adjusted EBITDA was 65 million compared to $79 million in the prior year period. This represents a record 29% adjusted EBITDA margin in the quarter.
Speaker Change: Net income was $29 million compared to $8 million in the first quarter of last year Q1 basic and diluted earnings per share was eight cents.
Beatrice Ordonez: We have been actively returning capital to shareholders. We accelerated the pace of our share purchases in 2024, buying back 51 million shares in Q1. We ended the quarter with cash and cash equivalents of $587 million.
Speaker Change: We have been actively returning capital to shareholders, we accelerated the pace of our share purchases in 2020 for buying back $51 million of shares in Q1.
Beatrice Ordonez: Our business continues to generate positive free cash flows, and our free cash flow conversion is well above 100% year to date. Moving to our 2024 guidance. We are raising our guidance for revenue by $20 million and guidance for adjusted EBITDA by $15 million to reflect our strong results and momentum heading into the second quarter. For the full year, we expect revenue to be between $895 and $905 million. This includes $655 million to $665 million of revenue excluding interest income and $240 million of interest income for the year.
Speaker Change: We ended the quarter with cash and cash equivalents of $587 million. Our business continues to generate positive free cash flows and our free cash flow conversion is well above 100% year to date.
Speaker Change: Moving to our 2024 guidance, we are raising our guidance for revenue by $20 million and guidance for adjusted EBITDA by $15 million to reflect our strong results and momentum heading into the second quarter.
Speaker Change: For the full year, we expect revenues to be between $895 $905 million.
Speaker Change: This includes $655 million to $665 million of revenue, excluding interest income and $240 million of interest income for the year.
Beatrice Ordonez: We are raising our expectations for revenue excluding interest income by $15 million. This implies 10% growth at the midpoint of our guidance, representing 13% year-over-year growth on a normalized basis. Our updated guidance reflects our strong performance in the first quarter and assumes revenue x interest income for the second quarter will be higher by approximately $5 million versus our prior expectation. We have not modeled changes to third and fourth quarter revenue at this time relative to our expectations in February, which we believe remain appropriately prudent.
Speaker Change: We are raising our expectations for revenue excluding interest income by $15 million. This implies 10% growth at the midpoint of our guidance.
Speaker Change: Representing 13% year over year growth on a normalized basis.
Speaker Change: Our updated guidance reflects our strong performance in the first quarter and assumes revenue ex interest income for the second quarter will be higher by approximately $5 million versus our prior expectation.
Speaker Change: We have not model changes to third and fourth quarter revenue at this time relative to our expectations in February which we believe remain appropriately prudent.
Beatrice Ordonez: We are increasing our interest income revenue expectations by $5 million to $240 million for the year. As of March 31st, we invested approximately $100 million of customer funds into the U.S. Treasury. We intend to more actively extend duration on the portfolio over the next few quarters with the intention of reducing our interest rate sensitivity and to drive greater interest income consistency in 2025 and 2026 as rates decline. We will continue to prioritize safety and liquidity as we do.
Speaker Change: We are increasing our interest income revenue expectations by 5 million to $240 million for the year.
Speaker Change: As of March 31st we invested approximately $100 million of customer funds into U S treasuries.
Speaker Change: We intend to more actively extend duration on the portfolio over the next few quarters with the intention of reducing our interest rate sensitivity and to drive greater interest income consistency in 2025 and 2026 as rates decline we.
Speaker Change: We will continue to prioritize safety and liquidity as we do so.
Beatrice Ordonez: Our expectation for transaction costs as a percentage of revenue remains unchanged at approximately 17.5%. However, we expect this percentage will ramp up over the course of 2024, reflecting the impact of the shift in business mix towards higher take rates but also higher transaction cost business lines and products like B2B, merchant services, and cards. We are increasing our adjusted EBITDA guidance to be between $200M and $210M, representing an adjusted EBITDA margin of approximately 23% at the midpoint.
Speaker Change: Our expectation for transaction cost as a percentage of revenue remains unchanged at approximately 17, 5%.
Speaker Change: We expect this percentage will ramp up over the course of 2024, reflecting the impact of shifting business mix towards higher take rate, but also higher transaction cost business lines and products like <unk> merchant services and card.
Speaker Change: We're increasing our adjusted EBITDA guidance to be between 200 and $210 million, representing an adjusted EBITDA margin of approximately 23% at the midpoint.
Beatrice Ordonez: Our guidance for Cash OPEX, which represents our guidance for revenue less adjusted EBITDA, remains unchanged at approximately $540 million. Our first quarter results demonstrate that our strategy and focus on growing and retaining ICT customers, driving increased adoption of our financial stack, optimizing ARPU, and delivering improved operational leverage is working. We believe our unique assets, the scale and breadth of our ecosystem, and relationships position us to further expand our market share and create lasting value for our shareholders. We are now happy to answer any questions you may have.
Speaker Change: Our guidance for cash Opex less anticipated transaction cost remains unchanged at approximately 540 million cash.
Speaker Change: Cash Opex represents our guidance for revenue less adjusted EBITDA.
Speaker Change: Our first quarter results demonstrate that our strategy and focus on growing and retaining ICT driving increased adoption of our financial stock optimizing <unk> and delivering improving operational leverage is working.
Speaker Change: We believe our unique asset the scale and breadth of our ecosystem and relationships position us to further expand our market share and create lasting value for our shareholders. We are now happy to answer any questions. You may have operator, please open the line.
Operator: Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered. Our first question goes to Will Nance on the line with Goldman Sachs. Your line is now open.
Speaker Change: Thank you.
Speaker Change: If you would like to ask a question. Please press star followed by one on your telephone keypad. If for any reason you would like to remove that question. Please press star followed by two again to ask a question press Star one.
Speaker Change: As a reminder, if youre using a speakerphone. Please remember to pick up your handset before asking your question.
Speaker Change: We'll pause here briefly as questions are registered.
Speaker Change: Our first question goes to the line of will Nance with Goldman Sachs. Your line is now open.
Beatrice Ordonez: Hey guys, appreciate you taking the question. Nice quarter, really nice to see things falling into place here. I wanted to ask around just sort of the cadence of revenue growth in your expectations. I know you spoke kind of intra-quarter about sort of U-shaped revenue growth for the year, and it sounds like with the higher expectations now for 2Q, that might be a slightly more lopsided U, but any color you have on just the cadence and maybe remind us again what's sort of driving modestly lower growth in the middle quarters and the acceleration that Thanks.
William Alfred Nance: Hey, guys I. Appreciate you taking the question nice quarter of really nice to see things falling into place here.
William Alfred Nance: I wanted to ask around just sort of the cadence of revenue growth and your expectations. I know you had spoken kind of intra quarter about sort of a U shaped revenue growth for the year and it sounds like with the higher expectations out for <unk> that might be a slightly more lopsided U but just any color you have on just cadence and maybe remind us.
Speaker Change: Again, what's sort of driving.
Speaker Change: Modestly lower growth.
Speaker Change: I guess in the middle quarters and.
Speaker Change: The acceleration that it sounds like you continue to expect in the fourth quarter. Thanks.
Beatrice Ordonez: Sure, thanks, Will, for your question. Look, as your question calls out, and as we talked about in March, it's broadly speaking a U-shaped core revenue trajectory over the course of 24. We delivered record Q1 results, really happy to deliver that 21% normalized growth. We expect a strong Q2, roughly high single digits core mid-teams normalized, so a robust performance coming into Q2. Benefiting from that really strong momentum in our B2B business, but as your question notes, moderating from Q1, which, as we called out, benefited from a really strong e-comm quarter and strong performance in that sector in general.
Speaker Change: Sure. Thanks, well to your question look as your question pulls out and as we talked about in March is broadly speaking any U shaped core revenue trajectory over the course of 'twenty four we delivered record Q1 results really happy to deliver that 21% normalized growth we.
Speaker Change: Expect a strong Q2, roughly high single digits core mid teens normalized so a robust performance coming into into Q2 benefiting from that really strong momentum may not be <unk> business, but as your question nuts moderating from Q1, which as we called out benefited from a really strong E.
Speaker Change: Calm quarter and strong performance in that sector in general moderating again into Q3, where we expect roughly speaking high single digit core growth by then as you know we will have fully lapped those non volume fees. We've talked about I look recall that in February when we gave full year guidance. It was based.
Beatrice Ordonez: Moving again into Q3, where we expect roughly speaking high single-digit core growth. By then, as you know, we will have fully lapped those non-volume fees we've talked about. And look, recall that in February when we gave full year guidance, it was based on our estimation that marketplace volumes would grow high single-digit. What we've seen in Q1 is that we're hitting mid-teams.
Speaker Change: On our estimation that marketplace volumes should grow high single digits. What we've seen in Q1 is that we're hitting mid teens, we're seeing a very robust marketplace environment, 13% volume growth from our market places, we're not going to run right out through the back half of the year. So we've raised based on our strong <unk> momentum.
Beatrice Ordonez: We're seeing a very robust marketplace environment, 13% volume growth from our marketplaces. We're not gonna run this rate out through the back half of the year, so we've raised based on our strong B2B momentum and a strong April. Our Q2 expectations were not run rating out into the back half of the year, keeping our guidance where it's at. We think that's frankly prudent, given the macro context and some of the signs of consumer distress that I think everyone is seeing.
Speaker Change: On a strong April our Q2 expectations, we're not run rating out into the back half of the year, keeping our guidance, where it's at we think that.
Speaker Change: Frankly prudent given the macro context in some of the signs of consumer distress that I think everyone is seeing we do think there's room to outperform obviously if the macro.
John R. Caplan: We do think there's room to outperform, obviously if the macro remains stable. And ultimately, we see really strong fundamentals in our business coming into that second quarter. John, I'll just add.
Speaker Change: <unk> stable and ultimately we see really strong fundamentals in our business coming into that second quarter in China.
John R. Caplan: Yeah, I think Bea said it really well, but what's so exciting inside the company we see is that we're executing on the strategy we laid out a year ago, and our new leaders we brought in are accelerating our growth, seeing B2B growth in Q3 of last year at 1% and now at 33% for Q1, and really solid performance for that team. We're excited about the pace of product deployments and advancements. And we're confident in our ability to continue executing and delivering on the parts of the business that we directly control.
Speaker Change: I'll just add I think you said, it really well, but what's so exciting inside the company. We see is that we're executing on the strategy, we laid out a year ago and our new leaders, we brought in accelerating our growth seeing <unk> growth in Q in Q3 of last year at 1% and now.
Speaker Change: With 33% for Q1, and really solid performance for that team. We're excited about the pace of product deployments and advancements we are confident in our ability to continue executing and delivering on the parts of the business that we directly control and we benefit from the performance of our partners.
John R. Caplan: And we benefit from the performance of our partners in their strong execution. So we are making steady progress, and we have a big opportunity in front of us, and we feel confident about what we're gonna deliver for the full year and how we'll exit Q4 in a very strong position going into 2020.
Speaker Change: On their strong execution. So we are making steady progress big opportunity in front of us and we feel confident about what we're going to deliver.
Speaker Change: The full year and how we will exit Q4.
Speaker Change: And a very strong position going into 2025.
Beatrice Ordonez: Got it. That's super helpful. Appreciate it. I just level set those numbers. I think you said the mid singles and high singles for the next two quarters as compared to the 21% underlying growth in the slides.
Speaker Change: Got it that's super helpful. I appreciate it I just just to level set those numbers I think you said the mid singles High singles for the next two quarters as a relative to the 21% underlying growth in the slides.
Beatrice Ordonez: So yeah, high single-digit Q2, mid-teams normalized. But again, we still have one more quarter of those non-volume fees. And in Q3, high single-digit, and obviously, there's no normalized impact as we will have fully lapped. And exiting, as we've said consistently since the back half of last year, exiting mid-teams core revenue growth as we round out the year. So overall, roughly 13% is the midpoint in terms of core growth on a normalized basis year over year.
Speaker Change: Yeah high single digit Q2 mid teens normalized again, we still have one more quarter of those non volume fees and in Q3 high single digit and obviously, there's no normalized impact because we will have fully lapped and exiting as we've said consistently since the back half of last year exiting mid teens.
Speaker Change: Core revenue growth as we as we round out the year. So overall roughly 13% is the midpoint in terms of core growth on a normalized basis year over year.
Speaker Change: Thank you will.
Operator: Our next question goes to the line of Mark Palmer with Benchmark. Your line is open.
Speaker Change: Our next question comes from the line of Mark Palmer with Benchmark. Your line is now open.
John R. Caplan: Yes, thanks very much for taking my question and congratulations on the strong quarter. Looking at the various regions, the regional markets in which Payoneer operates during the quarter, it looks like Greater China had some significant strength. What are you seeing right now in China as it pertains to macro and the extent to which that is impacting your operations there?
Mark Anthony Palmer: Yes, thanks very much for taking my question.
Mark Anthony Palmer: Congratulations on the strong quarter.
Mark Anthony Palmer: Looking at the various regions the regional markets in which <unk> operates during the quarter.
Mark Anthony Palmer: It looks like greater China had.
Mark Anthony Palmer: Some significant strengths.
Mark Anthony Palmer: What are you seeing right now in China as it pertains to match.
Mark Anthony Palmer: Macro and the extent to which that is impacting your operations there.
John R. Caplan: That's a great question. So, I think the first thing is that we generated double-digit growth in each of our major regions, normalizing for the impact of non-volume enterprise fees earned last year, and over 20% revenue growth in the higher take rate regions in Q1 of 2024. Specifically, China, the team there, and our brand position there are so strong, and the power of our relationships with the world's largest marketplaces, Amazon, Walmart, eBay, Etsy, etc., those relationships are strong, and we're picking up customers and cross-selling the full financial stack.
Speaker Change: That's a great question. So I think the first thing is we generated double digit growth in each of our major regions normalizing for the impact of non volume enterprise fees earned last year.
Speaker Change: And over 20% revenue growth in the higher take rate regions in Q1 of 2024, specifically to China. The team there and our brand position. There are so strong and the power of our relationships with the world's largest marketplaces, Amazon Walmart ebay etsy et cetera.
Speaker Change: Those relationships are strong and we're picking up customers and cross selling the full financial stack, we saw great growth in our commercial card product.
John R. Caplan: We saw great growth in our commercial card product in Q1, and as consumers have kept buying in the West, it's benefiting our merchants in China, and we've begun to step back into the B2B business in China. We're seeing some early positive signs there as well. So we are executing well across the board in that region and proud of the progress we're making, and I feel good about our guidance as it relates to the full year, particularly seeing our local teams on the ground, their relationships with our big customers, the share of wallet we're gathering, and the cross-sell of products we're delivering. The Payoneer financial stack is increasingly valuable to our customers in China and around the globe.
Speaker Change: In Q1 and as consumers.
Speaker Change: Have kept buying in the west it's benefiting our merchants in China, and we've begun to step back into the <unk> business in China, We're seeing some early positive signs there as well.
Speaker Change: So we are executing well across the board in that in that region and proud of the progress, we're making and I feel good about our guidance as it relates to the full year, particularly seeing our local teams on the ground there relationships with our big customers.
Speaker Change: Share of wallet, we're gathering and the cross sell of products. We are delivering the pay in your financial stack is increasingly valuable to our customers in China and around the globe.
John R. Caplan: Thank you. Just one follow-up question. Where do you stand right now with regard to capital deployment priorities? You bought back a healthy amount of shares during the quarter. How are you thinking about balancing buybacks versus focusing on M&A and other alternatives at this point?
Speaker Change: Thank you and just one follow up question.
Speaker Change: Where do you stand right now with regard to capital deployment priorities.
Speaker Change: Bought back a healthy amount of shares during the quarter.
Speaker Change: How are you thinking about.
Speaker Change: Balancing.
Speaker Change: Buybacks versus tack on M&A and other alternatives at this point.
Speaker Change: <unk>.
John R. Caplan: Sure, I'll start and then Bea and I will sort of answer this one together. I think the first thing is that we have ample capital and we're degenerating capital, so the business is a healthy one. We have lots of opportunities in front of us in M&A, pursuing tack-ons to drive our cross-sell and up-sell of AP products and tools and services to our over 2 million active customers and over half a million ICP customers.
Speaker Change: Sure I'll start I'll start and then I and then the P&L sort of answered. This one together and I think the first thing is we have ample capital capital and we're generating capital. So the business is a healthy one we have lots of opportunities in front of us and M&A pursuing tack ons that drive our cross sell and upsell of AP products and tools.
Speaker Change: In services for.
Speaker Change: Over 2 million active customers and half over half a million dollars ICP customers. So we see real opportunity for <unk>.
John R. Caplan: So we see real opportunity for tuck-in M&A to extend our financial stack in one area. And as the board approved the $250 million stock buyback program, we've executed $51 million of that in Q1, and that will continue at pace. But Bea, I'll pass it to you if you want to add. You covered it.
Speaker Change: <unk> in M&A to extend our financial stack is one area and as the board approved the $250 million stock buyback program, we've executed $51 million of that in Q1 and that will continue at pace, but I'll pass it to you if you want to add.
Beatrice Ordonez: Yeah, you covered that. And Mark, in your question, you noted a balanced approach, so we're going to apply that balanced approach. We obviously accelerated our buyback activity coming out of last year, as we saw opportunities from a relative price perspective. We bought back $51 million in the first quarter, as John noted. We would expect a more than offset dilution this year from our stock-based plan and other share events occurring during the year.
Speaker Change: Covenant and Mark in your question you noted a balanced approach. So we're going to deploy that balanced approach, we obviously accelerated our buyback activity coming out of last year as we saw opportunities from our relative price perspective, we bought back in the first quarter as John noted $51 million, we would expect to more than offset dilution this year.
Speaker Change: From a stock based plan another I'm sure.
Speaker Change: Occurring in the year. So what we expect roughly if I was to ballpark it to be buying back roughly double what we would have bought back last year, but we'll be opportunistic in the market as we see that opportunity as John noted look our business benefits from a really strong free cash flow generating engine.
Beatrice Ordonez: So what we expect roughly, if I were to ballpark it, to be buying back roughly double what we would have bought back last year, but we'll be opportunistic in the market as we see that opportunity. As John noted, our business benefits from a really strong free cash flow generating engine. We expect that to continue throughout the year. We'll be opportunistic and disciplined in terms of how we look at M&A opportunities and expand our financial stack, and we'll be able to return cash to shareholders. Thank you, Mark. Our next
Speaker Change: We expect that to continue throughout the year, we'll be opportunistic and disciplined in terms of how we look at M&A opportunities and expand our financial stack and we'll be able to return cash to shareholders as well.
Operator: Thank you, Mark. Our next question goes to the line with Chris Kennedy and William Blair.
Speaker Change: Thank you Mark our next question comes from the line of Cris Kennedy with William Blair.
Cristopher David Kennedy: Your line is now open.
Operator: Your line is now open. Good morning. Thank you for taking the question. Can you talk about it?
Cristopher David Kennedy: Good morning. Thank you for taking the question can you talk about some of the pricing initiatives and where you are in that journey.
Cristopher David Kennedy: Yes.
Beatrice Ordonez: Thanks for the question, Chris. Sure, I'll take that.
Cristopher David Kennedy: Thanks for the question, Chris sure I'll take that.
Cristopher David Kennedy: As we noted in 2023.
Beatrice Ordonez: Look, as we noted in 2023, you know, we really spent 2023 executing on what I would call low-hanging fruit in our business, largely to improve monetization around non-ICPs by introducing certain account fees that we weighed at minimum thresholds and certain minimum transactional fees. But we also, much more strategically, began to define a more segment-based pricing strategy. And we've been making active investments and are making investments this year in our product, out of our product team, in a sophisticated pricing engine and data and testing capabilities that really allow us to deploy that much more. I'll call it a customer persona-based pricing strategy.
Speaker Change: We really spent 23 executing on what I would call low hanging fruit in our business largely to improved monetization around non ICP by introducing an account fees that we waived minimum thresholds and certain minimum transactional fees, but we also have much more strategically began to define.
Speaker Change: Our most segment based pricing strategy and we've been making active investments and are making investments. This year in our product out of our product team and our sophisticated pricing engine and data and testing capabilities that really allow us to deploy that much more I'll call it customer persona based pricing.
Cristopher David Kennedy: Strategy. So at the end of 'twenty three we launched phase one of that segment based pricing strategy, we called it a light to account, which is targeted to freelancers and gig workers that receive from market places and broadly use only withdraw the bank capabilities and we were able to much more effectively monetize given the competitive.
Beatrice Ordonez: So at the end of 23, we launched phase one of that segment-based pricing strategy. We called it our light account, which is targeted to freelancers and gig workers that receive payments from marketplaces and broadly use only withdraw-to-bank capabilities.
Beatrice Ordonez: And we were able to much more effectively monetize, given the competitive environment, that flow. In 2024, we're continuing to roll out that segment-based model in the back half of the year. We've talked about, and we are launching very shortly, significant testing of fees on intranetwork flows. So that's flows between Payoneer account holders on our platform, many billions of flows. So we are launching a significant pilot to test those. We've spent the last several months understanding the use cases and really developing a nuanced and use case-based approach to how we should monetize that flow.
Cristopher David Kennedy: Environment monetize that slug in 2024, we're continuing to roll out that segment based model in the back half of the year, we've talked about and we are launching very shortly significant testing our fees on intra network flows. So that's flows between pena account holders.
Cristopher David Kennedy: On our platform many billions of floor. So we are launching a significant pilot to test was we spent the last several months understanding the use cases and really developing a nuanced and use case based approach to how we should monetize that slow and look to frame we've talked to in terms of the strategy.
Beatrice Ordonez: And look, we've talked in terms of the strategy to frame with more specific numbers. In 23, we generated roughly $25 million of incremental revenue from those various pricing initiatives that we've discussed, what we've called that low-hanging fruit. In 2024, we expect to generate an incremental $20 million or so in uplift from additional changes to corridor and segment-specific pricing, from much more sophisticated FX monetization and product offerings, and from those intranetwork fees.
Cristopher David Kennedy: Training with more specific numbers in.
Cristopher David Kennedy: In 'twenty, three we generated roughly $25 million of incremental revenue from those various pricing initiatives that we've discussed what we've called that low hanging fruit in 'twenty 'twenty four we expect to generate an incremental $20 million also in uplift from additional changes.
Cristopher David Kennedy: Corridor in segment specific pricing for much more sophisticated FX monetization and product offerings and from those internetwork seats. So again, we've highlighted that this is a multiyear strategy that there's real ROI here and we're investing to capture that.
Beatrice Ordonez: So again, we've highlighted that this is a multi-year strategy, that there's real ROI here, and we're investing to capture that, and that we're really looking at that customer persona-based sort of offering strategy of which pricing and monetization is such a key part.
Cristopher David Kennedy: Really looking at that customer persona based sort of offering strategy of which pricing and monetization is such a key part.
Speaker Change: Great very clear thank you very much.
Speaker Change: Thank you Chris.
Operator: Our next question goes to the line of Trevor Williams with Jefferson. Your line is now open.
Speaker Change: Our next question comes from the line of Trevor Williams with Jefferies. Your line is now open.
John R. Caplan: Hi, this is Spencer James on behalf of Trevor Williams. Good morning, and thank you for taking the question. I was wondering if you could maybe share some updated thoughts on expectations for B2B volume growth for the remainder of 2024. I know you've previously shared around 25%, but that's looking more conservative given the strong performance in 1Q. I was wondering if you could comment on anything to be mindful of in the back half.
Speaker Change: Hi, This is spenser James on for Trevor Williams.
Spenser James: And thank you for taking the question.
Spenser James: I was wondering if you could maybe share some updated thoughts on expectations for <unk> volume growth for the remainder of 2024 I know you've previously shared around 25%.
Spenser James: It's looking more conservative given the strong performance in <unk> I was wondering if you could comment on anything to be mindful of in the back half.
John R. Caplan: I'm happy to take it. It's a super exciting part of our business. And we're thrilled with the progress we're making in product market fit; we have the response from our customers and the network dynamics that are in the B2B business. We've had three consecutive quarters of accelerating volume growth in B2B. The third quarter of 2023 was up 1%, and the fourth quarter of 2023 was up 13%. And as we just noted, the first quarter of 2024, up 33% positive across all of our global regions, including in China.
Speaker Change: Happy to take it it's a super exciting part of our business and we're thrilled with the progress we're making the product market fit we have the response from our customers and the network dynamics that are in the <unk> business, we've had three consecutive quarters of accelerating volume growth in <unk>.
Speaker Change: Got it third quarter of 2023 was up 1%.
John R. Caplan: The accelerating momentum that we see reflects the result of hard work across the entire organization cross-functionally, improved our acquisition of ICP customers, expanded into new verticals, accelerated the onboarding time of B2B customers, and we have had a series of continuous improvements in the customer experience. When we look deep into the specific regions, what's so exciting that we see is SEMEA, 41% year over year growth in B2B. APEC, 39% year over year growth in B2B.
Speaker Change: Fourth quarter of 2023 was up 13% and as we just noted first quarter of 2024 up 33% positive across all of our global regions, including in China.
Speaker Change: The accelerating momentum that we see.
Speaker Change: The result of hard work on behalf of our entire organization Cross functionally.
Speaker Change: We.
Speaker Change: Improved our acquisition of ICP customers expanded into new verticals.
Speaker Change: Celebrated the Onboarding time of <unk> customers and have had a series of continuous improvements in the customer experience. When we look deep into the specific regions, but so exciting that we see is <unk>, 41% year over year growth in <unk> APAC, 39% year over year growth in <unk>.
John R. Caplan: You know, that response from this extraordinary product we have and the big opportunity in the $6 trillion market gives us confidence in the 25% year over year volume growth. And we hope to continue to see strong results throughout the course of the year so we can beat that handily. Our team is focused on delivering well better than that.
Speaker Change: That response from this extraordinary product, we have and the big opportunity in the six trillion dollar market gives us confidence that the 25% year over year volume growth and we hope to continue to see the strong results throughout the course of the year. So we can beat that handily, our our team is focused on delivering well better than.
Speaker Change: Other than that.
Beatrice Ordonez: Yeah, the only thing I'd add to that, yes to all of that, right? But, and we're seeing really strong momentum, and it really is a result of that strong execution of the China rebound, as John called out, strong acquisition, the new lines of business that we support. But look, business isn't linear, right? There's seasonality, it's not gonna be a linear trajectory.
Speaker Change: Yeah, the only thing I would add to that yes to all of that right and we're seeing really strong momentum and it really is a result of that strong execution of the China rebound as John called out strong acquisition, the new lines of business that we support but look the business isn't linear right the seasonality it's not going.
Speaker Change: Linear trajectory, we're maintaining the expectation that we baked into our guidance back in February which was a really healthy 25% year over year volume growth, we hit 33% in Q1, that's fantastic and was thrilled we're baking in as we've called out sort of macro uncertainty I think that that's a good.
Beatrice Ordonez: We're maintaining the expectation that we baked into our guidance back in February, which was for a really healthy 25% year-over-year volume growth. We hit 33% in Q1, that's fantastic, and we're thrilled. We're baking in, as we've called out, some sort of macro uncertainty. I think that that's a good and prudent thing. That gives us room to outperform if the macro stays stable, but we're maintaining that expectation around 25% year-over-year volume growth.
Speaker Change: Prudent thing that gives us room to outperform if the macro stays stable, but we're maintaining that expectation around 25% year over year volume growth.
Beatrice Ordonez: Appreciate it. Great to hear. Thank you. And then, as a follow-up, I was wondering if you could comment on the delta between the revenue raised to the full-year guide and the adjusted EBITDA raised to the full-year guide, anywhere to call out where you might be investing incrementally.
Speaker Change: I appreciate it great to hear thank you and then as a follow up I was wondering if you could comment on.
Speaker Change: The delta between the revenue raised to the full year guide on the adjusted EBITDA raise for the full year guide.
Speaker Change: We were to call out you might be investing incrementally.
Beatrice Ordonez: Cash OPEC stayed flat, as we called out in the prepared remarks; the delta is really just transaction costs on that core revenue increase.
unknown: Noah Cashaw
Speaker Change: No cash Opex stayed flat as we called out in the prepared remarks. The Delta is really just transaction costs on the coal revenue increase.
Speaker Change: Thank you.
Operator: The next question will go to the line of Sanjay Sakhrani with KBW. Your line is now open.
Speaker Change: The next question will go to the line of Sanjay Zaccone with K B W.
Sanjay Harkishin Sakhrani: Your line is now open.
Beatrice Ordonez: Thank you, good morning. Obviously, you talked a little bit about pricing, and I'm just looking at the take rate improvements sequentially in the SMB business. Were there other drivers outside of pricing that drove the take rate higher?
Sanjay Harkishin Sakhrani: Thank you good morning.
Sanjay Harkishin Sakhrani: Obviously, you've talked a little bit about pricing and I'm just looking at the take rate improvement sequentially in the SMB business were there other drivers outside of pricing that drove the take rate higher.
Beatrice Ordonez: Yeah, look, we're really happy to see that we can continue to execute on expanding take rates within our S&B business. As your question notes, we grew the take rate in our S&B business by four basis points. As you noted, some of that is the benefit of pricing, including FX.
Sanjay Harkishin Sakhrani: Yeah look.
Sanjay Harkishin Sakhrani: We're really happy to see that we can continue to execute on expanding take rate within our SMB business is your question notes. We grew the take rate in our SMB business by four basis points. As you noted some of that is the benefit of pricing, including FX, but it's also really effective cross selling.
Beatrice Ordonez: But it's also really affected cross-selling of our stack, especially cards, into that very, very robust growth in the e-com sector. We grew card usage volumes by 34 percent. That hits revenue at a roughly 2 percent take rate. We're growing other high-value services, We generated that really strong B2B. We haven't talked particularly about merchant services, but really strong, more than 200 percent volume growth in that direct-to-consumer or checkout product. So we're sort of firing on all cylinders to continue to drive that take rate expansion through pricing, cross-selling those products, and growth in B2B and MRAS. And I just did it.
Sanjay Harkishin Sakhrani: Stack, especially card into that very very robust growth in the E. Comm sector. We grew card usage volume steady, 4% that hits the revenue out of roughly 2% take rate we're growing other high value services, we generated that really strong beta b, we havent talked particularly about much in services.
Sanjay Harkishin Sakhrani: But really strong more than 200% volume growths in that direct to consumer with checkout product. So what sort of firing on all cylinders to continue to drive that take rate expansion pricing cross selling those those products gross <unk>.
John R. Caplan: And I'd just add, since we have a direct relationship with S&B customers, those S&B customers, two million of them, over a half a million ICPs, want to buy more products from us. We hear from them directly, we engage with them directly, and they're excited about our full financial stack roadmap. We shared in the supplement the increasing number of customers that are using three plus AP products. That growth, I think, inside the business should give shareholders confidence that our strategy is working, our team is focused, and we're confident about what we can do and deliver for 2024 and beyond.
Sanjay Harkishin Sakhrani: I'd just add since we have a direct relationship with SMB customers.
Sanjay Harkishin Sakhrani: Those SMB customers 2 million of them over a half a million dollars ICP is want to buy more products from us we hear from them directly we engage with them directly. They are excited about our full financial stack roadmap. We shared in the supplement the increasing number of customers that are using three plus AEP prop.
Sanjay Harkishin Sakhrani: <unk>.
Sanjay Harkishin Sakhrani: That growth I think inside the business should give shareholders the confidence that our strategy is working our team is focused and we're confident about what we can do and deliver for 2024 and beyond.
John R. Caplan: Great. And just a follow-up question. I think, John, you mentioned a bunch of different ways you increase the utility of the wallet. And I'm just curious, are there other things in the pipeline that can really help drive more engagement, as you mentioned just now, and sort of increase or accelerate the flywheel? Yeah, we are.
Speaker Change: Great and just a follow up question I think John you mentioned, a bunch of different ways you increase the utility of the wallet and I'm. Just curious are there other things in the pipeline that can really help drive more engagement as you mentioned, just now and sort of increase or accelerate the flywheel.
John R. Caplan: Yeah, we are very excited about the work our platform organization, our product team, our corporate development team, as well as our partnerships team is doing to deliver enhanced functionality in the stack, some of it being products we build on our own, some of it being products we buy and add to the stack, as we talked about earlier in the call about small tuck-in acquisitions to extend our AP capability. And then we're working on a group of partnership relationships to bring third-party products into the Payoneer stack over the course of the next many years to increase the utility of the Payoneer application for our customers.
John: Yes. We are we are very excited about the work our platform organization and our product team our corporate development team as well as our partnerships team is doing to deliver enhanced functionality into the stack some of it being products, we build on our own some of it being products, we buy and add to the staff.
John: As we've talked earlier in the call about tuck small tuck in acquisitions to extend our AP capability and then we're working on a group of partnership relationships to bring third party products into the pay in your stack over the course of the next many years to increase the utility of the paint application for our customers we're seeing.
John: As <unk> noted.
John R. Caplan: We're seeing, as noted, really powerful results with our commercial card product, and I think that indicates that Payoneer customers come to Payoneer for all of their international remittance and payments needs. And that as shareholders start to recognize us as a full financial stack for a population of global entrepreneurs that have not had a purpose-built solution, they will begin to recognize just what the potential of this extraordinary team is.
John: And really powerful results with our commercial card product and I think that indicates that paying your customers come to <unk> for all of their international AOR and AEP needs and that as the I think frankly as shareholders start to recognize we are a full financial stack.
John: For a population of global entrepreneurs that have not had a purpose built solution. They will begin to recognize just what the potential of this extraordinary team is.
John: Yeah.
Speaker Change: Thank you Sanjay.
John R. Caplan: There are no additional questions waiting at this time, so I'll pass the conference back over to John Caplan for closing remarks.
Speaker Change: There are no additional questions waiting at this time, so I'll pass the conference back over to John Kaplan for closing remarks.
John R. Caplan: So I'd just like to say thank you for your questions and your participation this morning. We're excited about all of the initiatives underway at Payoneer. We appreciate the continued support of our shareholders. We're proud of our team and the hard work of our team around the globe. And we look forward to our next discussion at the end of next quarter. Thanks, everybody.
John R. Caplan: So I'd just like to say thank you for your questions and your participation. This morning.
John R. Caplan: Excited about the all of the initiatives underway a pioneer we appreciate the continued support of our shareholders. We are proud of our team and the hard work of our team around the globe and we look forward to our next discussion at the end of next quarter. Thanks, everybody.
Operator: That concludes today's conference call. Thank you for your participation. I hope you have a wonderful rest of your day.
Speaker Change: That concludes today's conference call. Thank you for your participation I Hope you have a wonderful rest of your day.
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