Paysafe Ltd’s Q1 2025 Earnings Call: Mixed Results with Promising Growth

Paysafe Ltd ((PSFE)) has held its Q1 earnings call. Read on for the main highlights of the call.

Paysafe Ltd’s recent earnings call for Q1 2025 presented a mixed picture, reflecting both achievements and challenges. The company showcased strong organic revenue growth, successful enterprise sales, and significant new product launches and partnerships. However, it also faced declines in adjusted EBITDA and revenue, alongside growth challenges in the SMB segment.

Organic Revenue Growth

Paysafe reported a commendable 5% organic revenue growth in Q1 2025. This growth was primarily driven by strong performance from existing customers and new sales initiatives, highlighting the company’s ability to leverage its current client base while attracting new business.

Enterprise Sales Success

The company achieved significant success in enterprise sales, signing over 100 enterprise-level contracts. These contracts spanned across key sectors such as gaming, Latin America, and broader e-commerce, underscoring Paysafe’s robust presence in its core verticals.

E-commerce Growth

E-commerce continued to be a strong growth area for Paysafe, with a 31% increase in the first quarter. Notably, processing growth in iGaming surged over 50% year-over-year, reflecting the company’s strategic focus on high-growth areas.

New Product Launch in Latin America

Paysafe expanded its footprint in the Latin American payments landscape by launching the PagoEfectivo wallet in Peru. This new product is a leading cash and bank transfer payment solution, marking an important step in the company’s regional expansion strategy.

Partnership Expansion

The company expanded its partnerships with Fiserv and Tilled, enhancing its product offerings. These partnerships introduced solutions like Clover Capital Solution for SMBs and PayFac solutions for ISVs in the US and Canada, broadening Paysafe’s market reach.

Decline in Adjusted EBITDA

Paysafe reported a decline in adjusted EBITDA to $95 million, down from $112 million in the same quarter last year. This decrease was attributed to inorganic impacts and changes in business mix, highlighting areas for potential improvement.

Revenue Decline

The company experienced a 4% decline in reported revenue, bringing it to $401 million. This decline was influenced by inorganic headwinds such as foreign exchange, interest rates, and divestiture impacts.

SMB Growth Challenges

Growth in the SMB segment was challenged by a slower ramp-up of in-market direct sellers. Paysafe acknowledged the need for further optimization of its SMB team and go-to-market channels to enhance growth.

Higher Attrition Rate

Attrition impacted revenue by approximately 12% in Q1, which was slightly higher than the company’s expectations for the full year. This highlights a critical area for Paysafe to address in its operational strategy.

Forward-Looking Guidance

Looking ahead, Paysafe anticipates an acceleration in the second half of the year, with organic growth expected to reach 8-10%. This growth is expected to be supported by new products, expanded partnerships, and improved sales productivity. The company is strategically focusing on expanding its sales team and product capabilities, particularly in Latin America, where e-commerce is projected to grow significantly.

In conclusion, Paysafe’s Q1 2025 earnings call reflected a balanced performance with both strengths and areas for improvement. The company demonstrated strong organic growth and strategic expansions, yet faced challenges in revenue and EBITDA declines. Looking forward, Paysafe remains optimistic about its growth trajectory, driven by strategic initiatives and market expansions.