PaySafe Stock Slips As Q3 Net Loss Balloons, Turns Retail Heads

Shares of online payments provider Paysafe Ltd. ($PSFE) fell over 3% in pre-market trading on Wednesday after the company reported a sharp increase in its third-quarter (Q3) net loss, sparking mixed reactions among retail investors.

Adjusted earnings per share (EPS) came in at $0.51, significantly above the consensus estimate of $0.02. Revenue reached $427.1 million, slightly beating analyst expectations of $423.1 million.

However, net loss ballooned to $13.0 million for the quarter from $2.5 million in the year-ago period, primarily due to increased expenses, including a significant foreign exchange loss.

Paysafe’s Merchant Solutions segment showed robust growth, with an 11% revenue increase driven by strong performance in e-commerce and small to medium-sized businesses (SMBs). 

CEO Bruce Lowthers highlighted, “Revenue growth continues to be strong this year, reaching 8% for the third quarter and year-to-date.”

“We are pleased to reaffirm our full year financial outlook for 2024 and we remain confident that we are taking the right actions to drive continued momentum in 2025 and beyond,” he added.

The company reaffirmed its FY24 revenue guidance of $1.713 billion to $1.729 billion, roughly in line with the consensus estimate of $1.72 billion.

FY24 Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) is projected between $471 million and $484 million.

As of Sept. 30, 2024, Paysafe reported $241.4 million in cash and $2.4 billion in total debt, resulting in a net debt position of $2.2 billion.

Following the mixed Q3 results, Paysafe was among the top three trending tickers on Stocktwits before the market opened on Wednesday. 

However, retail sentiment was divided, with several users expressing concerns over the rising net loss and questioning the company’s leadership.

https://stocktwits.com/badaboom/message/592311153 

https://stocktwits.com/Big_bad_orange_man/message/592309567 

Still, the stock has more than doubled year-to-date.

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