Payoneer Earnings Call Highlights B2B-Fueled Momentum

Payoneer Inc. ((PAYO)) has held its Q1 earnings call. Read on for the main highlights of the call.

Payoneer’s latest earnings call struck an upbeat tone, with management emphasizing strong operational momentum despite modest headline revenue growth. Executives highlighted accelerating B2B volumes, sustained ARPU gains and record adjusted EBITDA, arguing these trends underpin confidence in mid‑teens exit growth and continued margin expansion even as interest income and take rates face pressure from a softer rate environment.

Revenue ex Interest Accelerates as Core Engine Strengthens

Revenue excluding interest income grew 11% year over year to $210 million, an acceleration of roughly 200 basis points from the prior quarter and a key sign that Payoneer’s underlying business is gaining speed. Total GAAP revenue reached $262 million, up 6% year over year, underscoring that core payments and services are doing the heavy lifting while reported growth is tempered by interest-related headwinds.

B2B Volumes Surge, Cementing Growth Driver Status

Total payment volume surpassed $22 billion, rising 16% year over year, but the standout was B2B, which grew 44% and more than doubled its growth rate from 21% in the prior quarter. Management expects B2B volumes to expand more than 30% for the rest of the year, positioning this segment as the primary engine for Payoneer’s next leg of growth.

ARPU Strength and SMB Monetization Continue to Improve

Average revenue per user climbed 17% in the quarter, while ARPU excluding interest income jumped 22%, marking the seventh straight quarter of at least 20% ARPU growth on a core basis. SMB monetization also improved, with take rates up 1 basis point year over year and 7 basis points sequentially, signaling success in pushing more value‑added services and moving customers upmarket.

Record Adjusted EBITDA and Expanding Margins

Adjusted EBITDA hit $69 million with a 27% margin, reflecting both scale and disciplined cost control across the platform. Excluding interest income, adjusted EBITDA grew more than 140% year over year to $18 million, the highest such print since going public, and management reiterated a goal to more than double core adjusted EBITDA to $90 million by 2026 at the midpoint.

Unit Economics Improve as Transaction Costs Decline

Transaction costs fell to $35 million, down 11% from a year ago, and dropped to 13.5% of revenue, a roughly 250 basis point improvement that showcases better unit economics. On a revenue‑ex‑interest basis, transaction costs declined to 16.8%, more than 400 basis points lower, aided by partnerships with Mastercard and Stripe and internal operational efficiencies.

Customer Funds Grow with Increased but Partial Hedging

Customer funds held on the platform expanded 15% year over year to $7.6 billion, representing more than $1 billion in incremental balances. As of March 31, about 53% of those funds, roughly $4 billion, were hedged through treasury securities, term deposits and derivatives, providing some protection but still leaving meaningful exposure to rate and market swings.

Segment and Regional Engines Show Broad-Based Momentum

Checkout volumes surged 53% year over year, while enterprise payouts volumes climbed 28% and SMB volumes rose 11%, pointing to healthy demand across key segments. Marketplace seller volumes delivered double‑digit growth in APAC and EMEA, with China marketplace volume acquired doubling, and management highlighted particularly strong B2B gains across China, APAC and EMEA.

Raised Guidance and Active Capital Allocation

Payoneer lifted full‑year revenue guidance, now targeting total revenue of $1.10 billion to $1.14 billion and revenue excluding interest in the $900 million to $940 million range, with interest income around $200 million. Adjusted EBITDA guidance rose to $285 million to $295 million, and the company repurchased about $74 million of stock in the quarter at an average price of $5.16, leaving roughly $117 million of authorization.

Strategic Investments and Product Innovation Advance

Management underscored progress on multiple strategic fronts, including a stablecoin wallet pilot via its Bridge offering and an application for an uninsured national trust bank that has already attracted thousands of waitlist sign‑ups, most from new customers. The company is also running AI pilots aimed at cutting support tickets and accelerating product development, while expanding regulatory and licensing capabilities across major markets and about 7,000 trade corridors.

Modest Headline Growth Masks Mixed Interest Dynamics

Despite the operational gains, total GAAP revenue increased a modest 6% year over year, reflecting the drag from softer interest income and business mix effects. The company reported $52 million in interest income and an overall take rate of 115 basis points, down around 10 basis points from the prior year as lower market rates and mix shifts chipped away at interest-related yields.

Flat Net Income and Higher Operating Costs Temper Upside

Net income came in at $20 million versus $21 million a year earlier, leaving GAAP earnings per share essentially flat at $0.06 and highlighting limited near‑term profit growth under accounting rules. Operating expenses rose 7%, with G&A up about 20% and R&D up roughly 16%, driven by labor, legal, consulting and acquisition‑related investments that partially offset the margin gains achieved elsewhere.

China Mix and Partial Hedging Add Take Rate and Rate Risk

The company’s fast‑growing B2B goods business in China was a double‑edged sword, as strong volumes came with structurally lower take rates than services B2B, weighing on the blended take rate even as revenue scales. Meanwhile, with only about 53% of customer funds hedged, Payoneer remains exposed on the remainder to interest‑rate and market movements, contributing to volatility in interest income and overall profitability.

Updated Guidance Points to Sustained B2B-Led Expansion

Looking ahead, Payoneer now expects 2026 total revenue of $1.10 billion to $1.14 billion, a modest midpoint increase that bakes in $200 million of interest income and $900 million to $940 million of core revenue. Management plans for adjusted EBITDA of $285 million to $295 million, mid‑single‑digit adjusted operating expense growth, more than doubling core adjusted EBITDA to $90 million, sustained B2B volume growth above 30%, mid‑single‑digit marketplace growth with a stronger back half, and broadly stable second‑quarter revenue growth versus the first quarter.

Payoneer’s earnings call painted the picture of a company shifting its growth engine from interest windfalls to core B2B and ARPU expansion, while using partnerships and technology to deepen margins. While modest GAAP revenue growth, flat net income, higher operating costs and partial interest‑rate exposure remain watchpoints, investors heard a clear message of disciplined execution and rising confidence in the company’s long‑term earnings power.