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1. Company Snapshot

1.a. Company Description

Paysafe Limited provides digital commerce solutions to online businesses, small and medium-sized business merchants, and consumers through its Paysafe Network worldwide.The company operates in two segments, US Acquiring and Digital Commerce.It provides PCI-compliant payment acceptance and transaction processing solutions for merchants and integrated service providers, including merchant acquiring, transaction processing, online solutions, fraud and risk management tools, data and analytics, and point of sale systems and merchant financing solutions under the Paysafe and Petroleum Card Services brands.


The company also offers digital wallet solutions under the Skrill and NETELLER brands; and pay-by-bank solution under the Rapid Transfer brand.In addition, it provides eCash solutions, such as Paysafecash, a bill payment eCash solution that allow users to shop online and then pay offline in cash to finalize the transaction; paysafecard, a prepaid eCash solution; and paysafecard prepaid Mastercard that can be linked to a digital paysafecard account and used to make purchases.Further, it offers integrated and ecommerce solutions for online merchants and software-integrated merchants within integrated payment capabilities; online toolkit that allows merchants and integrated software vendor to build and scale their online commerce presence; and turn-key payments gateway solution that offers critical connectivity between merchant online sites and payment acceptance and transaction processing providers.


Additionally, the company manages and provides various connections to card processing networks, acquiring banks, and transaction processors; and offers gateway connectivity,?shopping cart, tokenization and encryption, fraud and risk management, and support to payment alternatives, as well as provides integrations into eCommerce platforms and multiple alternative payment methods.Paysafe Limited is based in London, the United Kingdom.

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1.b. Last Insights on PSFE

Negative drivers behind Paysafe Limited's recent performance include the sale of its direct marketing payment processing business line, which may indicate a strategic shift away from core operations. The disposal of this business line, valued at an undisclosed amount, may have resulted in a one-time gain, but its impact on long-term growth and profitability remains uncertain. Additionally, the company's preliminary Q4 2024 results, which included a 1% revenue growth, may not have met investor expectations, contributing to the negative sentiment. Furthermore, the exploration of options, including a potential sale, following takeover interest may have created uncertainty among investors, weighing on the stock's performance.

1.c. Company Highlights

2. Paysafe's Q3 Earnings: A Mixed Bag

Paysafe delivered a mixed bag in its Q3 earnings report, with revenue increasing by 2% to $433.8 million, driven by 6% organic revenue growth. Adjusted EBITDA grew 7% to $126.6 million, with an adjusted EBITDA margin of 29.2%. However, the company guided that EBITDA margins are not expected to be at this level in Q4. Adjusted EPS came in at $0.70, slightly below estimates of $0.73. The company's unlevered free cash flow was $83.6 million, with a 66% conversion of adjusted EBITDA.

Publication Date: Nov -23

📋 Highlights
  • Organic Revenue & EBITDA Growth:: Q3 organic revenue grew 6%, adjusted EBITDA increased 7% to $126.6M, and adjusted EPS rose 37% to $0.70/share.
  • Shareholder Returns:: $20M returned to shareholders via share repurchases in Q3, totaling $50M year-to-date (1.5M shares repurchased).
  • Regional Performance:: North America and Europe grew 8% each (normalized FX), while Latin America showed 10% normalized growth despite Q3 flatness.
  • E-Commerce Momentum:: E-commerce growth moderated to 20% in Q3, driven by iGaming’s over 50% growth, with 100+ enterprise deals booked (25% YoY increase).
  • 2025 Guidance Update:: Adjusted EBITDA raised to $520M (from $480M) and adjusted EPS to $3.10 (from $2.60), with full-year organic revenue growth revised to 5–6%.

Segment Performance

The e-commerce segment continued to drive growth, with a 20% increase in Q3, led by iGaming growth of more than 50%. The SMB segment grew 4%, driven by new mid-acquisition in the direct channel. The Digital Wallet segment also grew 4% organically. However, the company noted that growth from the Digital Wallet segment, particularly Classic Wallet, was slower than expected.

Outlook and Guidance

Paysafe updated its 2025 outlook, expecting adjusted EBITDA to be around $520 million, up from $480 million previously, and adjusted EPS to be around $3.10, up from $2.60 previously. The company expects full-year organic growth in the range of 5% to 6%. For 2026, Paysafe expects organic revenue growth to be in the mid to high single digits range and adjusted EBITDA to increase high single digits versus 2025.

Valuation and Leverage

With a current P/E Ratio of -8.65, the market is pricing in significant challenges for the company. The EV/EBITDA ratio is 7.48, indicating a relatively high valuation for the company's EBITDA. The Net Debt / EBITDA ratio is 6.34, highlighting the company's leverage. Paysafe aims to reduce leverage below four over the medium term, targeting 3.5% by 2027. Analysts estimate next year's revenue growth at 6.4%, which is slightly above the company's guidance.

Key Takeaways

The company's focus on optimizing its SMB portfolio and accelerating sales productivity is expected to drive growth. However, the slower rollout of new wallet solutions and challenges in higher-risk MCC codes are potential headwinds. The stock's current valuation metrics, such as the P/S Ratio of 0.25 and Free Cash Flow Yield of 24.84%, suggest that the market is pricing in some of the challenges, but the company's growth prospects and deleveraging plans may provide a catalyst for the stock.

3. NewsRoom

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Paysafe Enables Brazilian Gamers to Pay for Boosteroid by Pix

Nov -24

Source: businesswire.com

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Bragar Eagel & Squire, P.C. Launches Investigations into Paysafe and StubHub and Encourages Investors to Contact the Firm

Nov -22

Source: globenewswire.com

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Paysafe Limited INVESTIGATION: Kirby McInerney LLP Announces Investigation Into Potential Securities Fraud on behalf of Investors (PSFE)

Nov -21

Source: globenewswire.com

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Securities Fraud Investigation Into Paysafe Limited (PSFE) Announced – Shareholders Who Lost Money Urged To Contact Glancy Prongay & Murray LLP, a Leading Securities Fraud Law Firm

Nov -20

Source: businesswire.com

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Paysafe Limited (PSFE) Shareholders Who Lost Money – Contact Law Offices of Howard G. Smith About Securities Fraud Investigation

Nov -20

Source: businesswire.com

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Securities Fraud Investigation Into Paysafe Limited (PSFE) Announced – Shareholders Who Lost Money Urged to Contact The Law Offices of Frank R. Cruz

Nov -19

Source: businesswire.com

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Paysafe: Holiday Shoppers Prioritizing Experiences and Flexible, Secure Payments

Nov -18

Source: businesswire.com

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18,133 Shares in Paysafe Limited $PSFE Purchased by Campbell & CO Investment Adviser LLC

Nov -18

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.95%)

6. Segments

Merchant Solutions

Expected Growth: 4.5%

Paysafe's Merchant Solutions growth is driven by increasing e-commerce adoption, rising demand for online payment processing, and strategic partnerships. The segment benefits from its scalable platform, diversified customer base, and expanding presence in high-growth markets. Additionally, the company's investments in technology and security enhancements, such as tokenization and 3D Secure, further support its growth momentum.

Digital Wallets

Expected Growth: 5.5%

Paysafe Limited's digital wallets growth of 5.5% is driven by increasing adoption of online payments, rising e-commerce sales, and growing demand for contactless transactions. Additionally, the company's strategic partnerships, expansion into new markets, and investments in digital infrastructure have contributed to its growth.

7. Detailed Products

Neteller

A digital wallet that allows users to store and manage their funds online

Skrill

A digital wallet that enables users to make online payments and send/receive money

paysafecard

A prepaid online payment method that allows users to make payments online without sharing financial information

Income Access

A digital marketing platform that provides affiliate marketing and tracking solutions

FANS Entertainment Inc.

A digital platform that provides online gaming and entertainment solutions

8. Paysafe Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

Paysafe Limited operates in a highly competitive industry, and there are many substitutes available to customers. However, the company's strong brand recognition and customer loyalty help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Paysafe Limited's customers are primarily individual consumers and small businesses, which gives them limited bargaining power. The company's large customer base and diversified revenue streams also reduce the bargaining power of individual customers.

Bargaining Power Of Suppliers

Paysafe Limited has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's large scale of operations and strong relationships with suppliers also help to mitigate the bargaining power of suppliers.

Threat Of New Entrants

The online payment industry is highly competitive, and there are low barriers to entry. New entrants can easily enter the market, which poses a significant threat to Paysafe Limited's market share and revenue.

Intensity Of Rivalry

The online payment industry is highly competitive, with many established players and new entrants vying for market share. The intensity of rivalry is high, and Paysafe Limited must continually innovate and improve its services to remain competitive.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 73.97%
Debt Cost 3.95%
Equity Weight 26.03%
Equity Cost 13.17%
WACC 6.35%
Leverage 284.16%

11. Quality Control: Paysafe Limited passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Datagroup

A-Score: 5.4/10

Value: 4.6

Growth: 7.2

Quality: 3.9

Yield: 3.1

Momentum: 8.5

Volatility: 5.0

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Trifork Holding

A-Score: 4.6/10

Value: 6.4

Growth: 6.8

Quality: 5.7

Yield: 0.6

Momentum: 3.0

Volatility: 5.0

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Stock-Card
INIT

A-Score: 4.4/10

Value: 2.8

Growth: 5.7

Quality: 4.5

Yield: 1.9

Momentum: 8.0

Volatility: 3.7

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Tinexta

A-Score: 4.1/10

Value: 4.4

Growth: 3.6

Quality: 3.6

Yield: 3.8

Momentum: 7.5

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Paysafe

A-Score: 3.0/10

Value: 8.5

Growth: 5.8

Quality: 2.1

Yield: 0.0

Momentum: 1.0

Volatility: 0.7

1-Year Total Return ->

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Stock-Card
Northern Data

A-Score: 2.0/10

Value: 6.4

Growth: 2.2

Quality: 1.7

Yield: 0.0

Momentum: 1.0

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.22$

Current Price

8.22$

Potential

-0.00%

Expected Cash-Flows