Paysafe incurs loss of $33.7M in Q4 2022
Payments platform Paysafe Limited (NYSE:PSFE) today announced its financial results for the fourth quarter and full year 2022.
Total revenue for the fourth quarter of 2022 was $383.6 million, an increase of 3%, compared to $371.7 million in the prior year period, driven by strong revenue growth from Merchant Solutions, which increased 10%, partly offset by Digital Wallets, which declined 4%.
Net loss attributable to the Company for the fourth quarter was $33.7 million, compared to net income of $90.3 million in the prior year period. The decrease is largely attributable to a fair value gain on the remeasurement of the warrant liability and an income tax benefit in the prior year period as well as increases in interest expense and share-based compensation expense in the fourth quarter of 2022.
Adjusted EBITDA for the fourth quarter was $107.6 million, an increase of 2%, compared to $105.5 million in the prior year period. Excluding a $4.1 million unfavorable impact from changes in foreign exchange rates, Adjusted EBITDA increased 6% compared to the prior year period. Adjusted EBITDA margin for the fourth quarter was 28.0%, compared to 28.4% in the prior year period.
Adjusted net income for the fourth quarter was $33.1 million, compared to $52.2 million in the prior year period, reflecting an increase in interest expense.
Fourth quarter net cash used in operating activities was $449.1 million, compared to an inflow of $131.9 million in the prior year period, mainly reflecting the timing of settlement of funds payable and amounts due to customers. Free cash flow was $91.5 million, compared to $53.1 million in the prior year period, which includes the movement in customer accounts and other restricted cash which was an increase of $504.8 million in 2022, compared to a decrease of $94.8 million in the prior year period.
Bruce Lowthers, CEO of Paysafe, commented:
“We are pleased with our progress and fourth quarter financial results, including 8% year-over-year constant currency revenue growth. When I joined Paysafe, we said our focus would be on returning to growth in the back half of the year and into 2023, and we have done exactly that. We have recruited high-caliber talent, simplified and re-positioned the business, and re-built our sales organization, which is driving early success in cross-selling and multi-product client wins.
Looking ahead, we remain relentlessly focused on client experience, product innovation, and further sales transformation to fully leverage our assets globally and capture meaningful growth opportunities for years to come.”