Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2025
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Payoneer Global Inc.
(Exact name of registrant as specified in its charter)
Delaware
001-40547
86-1778671
(State or other jurisdiction ofincorporation)
(Commission File Number)
(I.R.S. EmployerIdentification Number)
195 Broadway, 27th floorNew York, New York, 10007
(Address of principal executive offices,including zip code)
(212) 600-9272
Registrant’s Telephone Number, Including Area Code
N/A
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
PAYO
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
As of July 31, 2025, the registrant had 360,315,543 shares of common stock outstanding.
Form 10-Q
For the Period Ended June 30, 2025
Page
PART I. FINANCIAL INFORMATION
4
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets (Unaudited)
5
Condensed consolidated statements of comprehensive income (Unaudited)
6
Condensed consolidated statements of changes in shareholders’ equity (Unaudited)
7
Condensed consolidated statements of cash flows (Unaudited)
9
Notes to the condensed consolidated financial statements (Unaudited)
11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
29
Item 3. Quantitative and Qualitative Disclosures About Market Risk
37
Item 4. Controls and Procedures
38
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings
Item 1A. Risk Factors
39
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
40
Item 6. Exhibits
Signatures
41
2
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, including the information incorporated herein by reference, contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “anticipate,” “appear,” “approximate,” “believe,” “continue,” “could,” “estimate,” “expect,” “foresee,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “would” and other similar words and expressions (or the negative version of such words or expressions), but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements are based on the current expectations of Payoneer Global Inc.’s (“Payoneer”) management and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to: (1) changes in applicable laws or regulations; (2) the possibility that Payoneer may be adversely affected by geopolitical events and conflicts, such as Israel’s ongoing conflicts in the Middle East, and other economic, business and/or competitive factors, such as changes in global trade policies (including the imposition of tariffs); (3) changes in the assumptions underlying Payoneer’s financial estimates; (4) the outcome of any known and/or unknown legal or regulatory proceedings; and (5) other factors, described under the heading “Risk Factors” discussed and identified in public filings made with the U.S. Securities and Exchange Commission (the “SEC”) by Payoneer.
Should one or more of these risks or uncertainties materialize or should any of the assumptions made by the management of Payoneer prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.
All subsequent written and oral forward-looking statements concerning the matters addressed in this Quarterly Report on Form 10-Q and attributable to Payoneer or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Quarterly Report on Form 10-Q. Except to the extent required by applicable law or regulation, Payoneer undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events.
3
PAYONEER GLOBAL INC.
QUARTERLY REPORT FOR THE PERIOD ENDED JUNE 30, 2025
TABLE OF CONTENTS
Condensed consolidated financial statements (unaudited) in thousands of U.S. dollars:
Notes to condensed consolidated financial statements (Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA
June 30,
December 31,
2025
2024
Assets:
Current assets:
Cash and cash equivalents
$
497,144
497,467
Restricted cash
8,606
6,633
Customer funds
6,583,839
6,439,153
Accounts receivable (net of allowance of $336 and $382 at June 30, 2025 and December 31, 2024, respectively)
13,904
11,937
Capital advance receivables (net of allowance of $4,875 at June 30, 2025 and $4,955 at December 31, 2024, respectively)
31,810
56,242
Other current assets
77,227
88,210
Total current assets
7,212,530
7,099,642
Non-current assets:
Property, equipment and software, net
17,880
16,053
Goodwill
77,785
Intangible assets, net
203,940
102,390
450,000
525,000
20,948
17,653
Deferred tax assets, net
44,644
41,523
Severance pay fund
797
757
Operating lease right-of-use assets
44,784
19,403
Other assets
37,120
30,174
Total assets
8,110,428
7,930,380
Liabilities and shareholders’ equity:
Current liabilities:
Trade payables
42,375
37,302
Outstanding operating balances
7,033,839
6,964,153
Other payables
131,952
129,621
Total current liabilities
7,208,166
7,131,076
Non-current liabilities:
Deferred tax liabilities, net
25,146
1,471
Other long-term liabilities
106,211
73,043
Total liabilities
7,339,523
7,205,590
Commitments and contingencies (Note 14)
Shareholders’ equity:
Preferred stock, $0.01 par value, 380,000,000 shares authorized; no shares were issued and outstanding at June 30, 2025 and December 31, 2024.
—
Common stock, $0.01 par value, 3,800,000,000 and 3,800,000,000 shares authorized; 404,801,165 and 395,965,588 shares issued and 362,236,351 and 360,093,249 shares outstanding at June 30, 2025 and December 31, 2024, respectively.
4,048
3,960
Treasury stock at cost, 42,564,814 and 35,872,339 shares as of June 30, 2025 and December 31, 2024, respectively.
(243,405)
(193,724)
Additional paid-in capital
859,590
821,196
Accumulated other comprehensive income (loss)
4,648
(12,609)
Retained earnings
146,024
105,967
Total shareholders’ equity
770,905
724,790
Total liabilities and shareholders’ equity
The accompanying notes are an integral part of the condensed consolidated financial statements (Unaudited).
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
Three months ended
Six months ended
Revenues
260,614
239,520
507,231
467,703
Transaction costs (Excluding depreciation and amortization shown separately below)
40,566
36,961
79,915
70,927
Other operating expenses
42,703
41,242
84,361
81,525
Research and development expenses
37,387
27,580
74,658
59,631
Sales and marketing expenses
57,312
50,614
112,038
100,504
General and administrative expenses
37,016
26,102
66,920
50,311
Depreciation and amortization
15,553
10,712
29,943
20,120
Total operating expenses
230,537
193,211
447,835
383,018
Operating income
30,077
46,309
59,396
84,685
Financial income (expense):
Gain from change in fair value of Warrants
-
1,006
2,767
Other financial income (expense), net
(227)
976
(1,777)
3,723
Financial income (expense), net
1,982
6,490
Income before income taxes
29,850
48,291
57,619
91,175
Income taxes
10,370
15,866
17,562
29,776
Net income
19,480
32,425
40,057
61,399
Other comprehensive income
Unrealized gain on available-for-sale debt securities, net
2,565
872
9,804
871
Tax expense on unrealized gains on available-for-sale debt securities, net
(569)
(2,174)
Unrealized gain (loss) on cash flow hedges, net
5,932
(699)
4,145
(665)
Tax benefit (expense) on unrealized gains (losses) on cash flow hedges, net
(1,135)
126
(808)
120
Unrealized gain on interest rate floor, net
2,117
8,138
Tax expense on unrealized gains on interest rate floor, net
(469)
(1,745)
Foreign currency translation adjustments
66
(103)
8,507
299
17,257
326
Comprehensive income
27,987
32,724
57,314
61,725
Per Share Data
Net income per share attributable to common stockholders — Basic earnings per share
0.05
0.09
0.11
0.17
— Diluted earnings per share
0.10
0.16
Weighted average common shares outstanding — Basic
368,770,598
356,315,658
368,185,088
357,795,857
Weighted average common shares outstanding — Diluted
380,632,789
373,368,383
385,250,558
376,727,575
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA
Accumulated
Additional
other
Common Stock
Treasury Stock
paid-in
comprehensive
Retained
Shares
Amount
capital
income (loss)
earnings
Total
Balance at March 31, 2025
400,261,352
4,003
(37,752,648)
(210,702)
834,745
(3,859)
126,544
750,731
Exercise of options and vested RSUs, net of taxes paid related to settlement of equity awards
3,861,462
168
206
Stock-based compensation
20,756
ESPP shares issued
678,351
3,921
3,928
Common stock repurchased
(4,812,166)
(32,703)
Unrealized gain on cash flow hedges, net
Tax expense on unrealized gains on cash flow hedges, net
Balance at June 30, 2025
404,801,165
(42,564,814)
Balance at March 31, 2024
377,294,480
3,773
(21,598,626)
(108,096)
752,236
(149)
13,778
661,542
5,007,237
50
3,971
14,482
ESPP shares issues
697,263
3,249
3,256
(8,710,963)
(46,596)
Unrealized loss on cash flow hedges, net
Tax benefit on unrealized losses on cash flow hedges, net
Balance at June 30, 2024
382,998,980
3,830
(30,309,589)
(154,692)
773,888
150
46,203
669,379
Balance at December 31, 2024
395,965,588
(35,872,339)
8,157,226
81
(5,653)
(5,572)
40,126
(6,692,475)
(49,681)
Balance at December 31, 2023
368,655,185
3,687
(11,064,692)
(56,936)
732,894
(176)
(15,196)
664,273
13,646,532
136
7,267
7,403
30,478
(19,244,897)
(97,756)
8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
U.S. DOLLARS IN THOUSANDS
Cash Flows from Operating Activities
Adjustment to reconcile net income to net cash provided by operating activities:
Deferred taxes
(7,957)
(3,640)
Stock-based compensation expenses
38,814
28,742
(2,767)
Interest and amortization of discount on investments
(1,896)
(3,275)
Foreign currency re-measurement (gain) loss
(5,840)
2,311
Changes in operating assets and liabilities:
11,449
(12,728)
5,943
4,606
Deferred revenue
211
273
Accounts receivable, net
(1,958)
1,413
Capital advance extended to customers
(167,223)
(154,357)
Capital advance collected from customers
191,655
150,372
(10,918)
(17,664)
3,571
1,168
5,777
4,370
(7,227)
571
Net cash provided by operating activities
124,401
80,914
Cash Flows from Investing Activities
Purchase of property, equipment and software
(7,304)
(2,802)
Capitalization of internal use software
(29,993)
(27,345)
Severance pay fund distributions, net
(40)
22
Customer funds in transit, net
(45,619)
(988)
Purchases of investments in available-for-sale debt securities
(272,974)
(739,185)
Maturities of investments in available-for-sale debt securities
180,500
105,000
Purchases of investments in term deposits
(300,000)
Maturities of investments in term deposits
75,000
Cash paid in connection with acquisition, net of cash and customer funds acquired (refer to Note 3 for further information)
(33,081)
Net cash used in investing activities
(133,511)
(965,298)
Cash Flows from Financing Activities
Proceeds from issuance of common stock in connection with stock-based compensation plan, net of taxes paid related to settlement of equity awards and proceeds from employee equity transactions to be remitted to employees
(2,183)
12,027
Outstanding operating balances, net
47,549
(353,421)
Borrowings under related party facility
11,920
Repayments under related party facility
(15,347)
Receipts of collateral on interest rate derivatives
68,130
Payments of collateral on interest rate derivatives
(61,500)
(49,756)
(98,654)
Net cash provided by (used in) financing activities
2,240
(443,475)
Effect of exchange rate changes on cash and cash equivalents
6,045
(2,311)
Net change in cash, cash equivalents, restricted cash and customer funds
(825)
(1,330,170)
Cash, cash equivalents, restricted cash and customer funds at beginning of period
5,658,210
7,018,367
Cash, cash equivalents, restricted cash and customer funds at end of period
5,657,385
5,688,197
Supplemental information of investing and financing activities not involving cash flows:
Property, equipment, and software acquired but not paid
142
1,237
Internal use software capitalized but not paid
5,229
7,408
Common stock repurchased but not paid
700
602
Right of use assets obtained in exchange for new operating lease liabilities
28,614
2,594
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED)
The below table reconciles cash, cash equivalents, restricted cash and customer funds as reported in the condensed consolidated balance sheets to the total of the same amounts shown in the condensed consolidated statements of cash flows:
As of June 30,
575,730
Current restricted cash
10,653
Non-current restricted cash
6,018
Current customer funds
5,812,105
Non-current customer funds
225,000
Customer funds shown in the condensed consolidated balance sheets
6,037,105
Less: Customer funds in transit
(98,378)
(2,979)
Less: Customer funds invested in available-for-sale debt securities
(1,279,774)
(638,330)
Less: Customer funds invested in term deposits
(525,000)
Net customer funds shown in the condensed consolidated statements of cash flows
5,130,687
5,095,796
Total cash, cash equivalents, restricted cash and customer funds shown in the condensed consolidated statements of cash flows
10
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)
NOTE 1 – GENERAL OVERVIEW
Unless otherwise noted herein, “we”, “us”, “our”, “Payoneer”, and the “Company” refer to Payoneer Global Inc.
Payoneer, incorporated in Delaware, empowers global commerce by connecting businesses, professionals, countries and currencies with its diversified cross-border payments platform. Payoneer enables small and medium-sized businesses (“SMB(s)”) around the globe to reach new audiences by reducing the complexity of cross-border trade, and facilitating seamless, cross-border payments. Payoneer offers its customers the flexibility to pay and get paid globally as easily as they do locally. The Company offers a global financial stack that includes cross-border AR/AP capabilities and includes services such as funds management, working capital, and multicurrency accounts. The fully hosted service includes various payment options with minimal integration required, full back-office functions and customer support offered.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
a. Principles of consolidation, basis of presentation and accounting principles:
The accompanying condensed consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America (hereafter – U.S. GAAP) and include the accounts of Payoneer Global Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
The consolidated interim financial information herein is unaudited; however, such information reflects all adjustments (consisting of normal, recurring adjustments), which are, in the opinion of management, necessary for a fair statement of results for the interim period. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the full year. The year-end condensed balance sheet data was derived from audited financial statements for the year ended December 31, 2024, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These unaudited financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto of Payoneer Global Inc. and its subsidiaries.
b. Use of estimates in the preparation of financial statements:
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include, but are not limited to, allowance for capital advance receivables, income taxes, goodwill, revenue recognition, stock-based compensation, contingent consideration associated with M&A, and loss contingencies.
c. Stock-based compensation:
As further discussed in Note 18, in February 2025, the Company granted performance stock units (“PSUs”) under its Omnibus Stock Incentive Plan.
PSUs are accounted for using the grant date fair value method, based on the grant date share price. The Company recognizes the expense over the requisite service period using a graded vesting model. For unvested awards with performance conditions, the Company assesses the probability of attaining the performance conditions at each reporting period. Awards in respect of which attainment is deemed probable are recognized as expenses over the requisite service period.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued):
d. Indefinite-lived intangible asset:
Indefinite-lived intangible asset consists of a payment license recognized in the Payeco Finance Information Holding Corporation (“PayEco”) acquisition. The indefinite-lived intangible asset is not amortized, but is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment assessment begins with a qualitative evaluation to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. If this threshold is met, the Company performs a quantitative assessment, comparing the fair value of the asset to its carrying amount. The indefinite-lived intangible asset is considered impaired if the carrying value exceeds the fair value.
The fair value of the indefinite-lived intangible asset is estimated using a discounted cash flow method. The discounted cash flow method, a form of the income approach, uses expected future operating results and a market participant discount rate. Failure to achieve these expected results, changes in the discount rate or market pricing metrics, may cause a future impairment of the indefinite-lived intangible asset.
e. Customer funds and investments
As previously disclosed during the quarter ended September 30, 2024, the Company identified an error in its condensed consolidated balance sheet as of June 30, 2024, and in its statements of cash flows for the six months ended June 30, 2024. Specifically, the Company incorrectly classified $225,000 of customer funds invested in term deposits with maturities greater than one year as current customer funds on the condensed consolidated balance sheet, rather than as non-current customer funds. In addition, the Company incorrectly classified $300,000 of term deposits in the basis of cash, cash equivalents, restricted deposits, and customer funds on the statement of cash flows, rather than as investing cash flows.
In connection with the Company’s evaluation of these errors during the quarter ended September 30, 2024, management, in accordance SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”, determined that these adjustments were not material to the previously issued financial statements. In the condensed consolidated statements of cash flows for the six months ended June 30, 2024 filed with this Quarterly Report on Form 10-Q, the Company has correctly presented $300,000 in customer funds invested in term deposits in accordance with the statement of cash flows treatment described in the preceding paragraph. In the condensed consolidated balance sheet as of September 30, 2024 and statements of cash flows for the nine months ended September 30, 2024 filed with the Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 and in the Annual Report on Form 10-K for the year ended December 31, 2024, the Company correctly presented $225,000 and $300,000 in customer funds invested in term deposits in accordance with the balance sheet and statement of cash flows treatment described in the preceding paragraph. This error had no impact on the previously issued condensed consolidated statements of comprehensive income or condensed consolidated statements of changes in shareholders’ equity and did not impact any financial liquidity covenants.
12
f. Recently issued accounting pronouncements:
FASB Standards issued, but not adopted as of June 30, 2025
In 2023, the FASB issued guidance, ASU 2023-09, which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). It also requires entities to disclose their income tax payments (net of refunds received) to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024, and can be applied prospectively with the option for retrospective application to all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.
In 2024, the FASB issued guidance, ASU 2024-03, which requires the disaggregated disclosure of certain costs and expenses on an interim and annual basis. The new standard is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and can be applied prospectively with the option for retrospective application to all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.
NOTE 3 – ACQUISITIONS
PayEco
On April 9, 2025, the Company acquired 100% of the equity interests of PayEco, the parent company of EasyLink Payment Co., Ltd., a licensed China based payment service provider, for a total consideration of $76,074. The consideration is comprised of the following:
Amounts Recognized as of Acquisition Date (Adjusted)
License intangible asset
97,357
Deferred tax liability
(23,783)
Acquired net assets
2,500
Total consideration
76,074
Fair value of deferred payment liability payable in 12 and 24 months after acquisition
(12,010)
Other adjustments
(4,474)
Cash paid in connection with acquisition
59,590
Cash and customer funds acquired
(26,509)
Cash paid in connection with acquisition, net of cash and customer funds acquired
33,081
Refer to Note 10 for details on the license intangible asset acquired.
Skuad
On August 5, 2024, Payoneer acquired 100% of the outstanding equity of Skuad Pte. Ltd. (“Skuad”) and its subsidiaries, a global workforce and payroll management company. The acquisition accelerates Payoneer’s strategy to deliver a comprehensive and integrated financial stack for SMBs that operate globally. The transaction was accounted for in accordance with ASC 805, Business Combinations (“ASC 805”), using the acquisition method of accounting with Payoneer as the acquirer.
13
NOTE 3 – ACQUISITIONS (continued):
The following table summarizes the fair value of the consideration transferred (after measurement period adjustments during the year ended December 31, 2024):
Cash
61,099
Contingent consideration
6,974
Extinguishment of pre-existing receivable
1,000
Settlement of unvested acquiree stock-based compensation awards
315
69,388
The contingent consideration was in the form of a $9,709 earn-out subject to meeting certain performance criteria. The fair value of the contingent consideration was estimated using estimates of probability of each outcome and the Option Pricing Model (“OPM”), except for with respect to the integration plan target, which is not exposed to systemic risk. Refer to Note 7 below for details on changes in the fair value of the contingent consideration since acquisition.
The following table summarizes the recognized amounts of identifiable assets acquired and liabilities assumed (after measurement period adjustments during the year ended December 31, 2024):
Cash and cash equivalents and restricted deposits
3,875
9,005
Accounts receivable
4,294
Tax indemnification asset
3,004
Customer relationships intangible asset
6,683
Developed technology intangible asset
2,354
1,499
(1,514)
(9,005)
(1,373)
Uncertain tax positions
(3,004)
(4,326)
Total identifiable net assets
11,492
57,896
The excess of the purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill and is primarily attributable to the significant synergies expected to arise from the acquisition, including enhancement of Payoneer’s comprehensive and integrated financial stack. The Company does not expect goodwill to be deductible for income tax purposes.
Due to Skuad’s insignificant size relative to the Company, Payoneer is not providing supplemental pro forma financial information.
The allocation of the purchase price for this acquisition has been finalized and the measurement period has ended. All adjustments to assets, liabilities and tax estimates have been completed based on the information obtained during the measurement period.
14
NOTE 4 – CAPITAL ADVANCE (“CA”) RECEIVABLES
The Company enters into transactions with pre-qualified sellers in which the Company purchases a designated amount of future receivables for an upfront cash purchase price.
During the six months ended June 30, 2025 and 2024, the Company has purchased and collected the following principal amounts associated with CA receivables, including foreign exchange adjustments:
Six Months Ended
Beginning CA receivables, gross
61,197
50,552
CA extended to customers
167,143
154,357
Change in revenue receivables
(451)
(44)
CA collected from customers
(189,081)
(147,654)
Charge-offs, net of recoveries
(2,123)
(2,288)
Ending CA receivables, gross
36,685
54,923
Allowance for CA losses
(4,875)
(5,445)
CA receivables, net
49,478
The following are current and overdue balances that are segregated into the timing of expected collections at June 30, 2025:
Due in less
Due in 30‑60
Due in 60‑90
Due in more
Overdue
than 30 days
days
than 90 days
2,419
9,456
6,016
11,679
7,115
The following are current and overdue balances that are segregated into the timing of expected collections at December 31, 2024:
2,825
13,654
13,357
23,252
8,109
As of June 30, 2025 and December 31, 2024, the Company applied a range of loss rates to the CA portfolio of 0.87% to 2.02% for the allowance for CA losses.
15
NOTE 5 – CUSTOMER FUNDS AND INVESTMENTS
The Company has invested certain customer funds in available-for-sale debt securities and term deposits. The following table summarizes the assets underlying customer funds as of June 30, 2025 and December 31, 2024:
5,229,065
5,189,216
Available-for-sale debt securities
1,279,774
1,174,937
Term deposits
Total current customer funds
Total non-current customer funds
Total customer funds
As of June 30, 2025, the estimated fair value of the available-for-sale debt securities included $7,362 in unrealized gains and $54 in unrealized losses, net of tax. The gross unrealized losses of $69 related to assets with a fair value of $176,174, which had been in a continuous unrealized loss position for less than 12 months.
Unrealized losses have not been recognized into income as the Company neither intends to sell, nor anticipates that it is more likely than not that it will be required to sell, the securities before recovery of their amortized cost basis. The decline in fair value is due to changes in market interest rates, rather than credit losses. The Company will continue to monitor the performance of the investment portfolio and assess whether impairment due to expected credit losses has occurred.
During the period ended June 30, 2025, the Company did not sell any available-for-sale debt securities or incur any realized gains or losses.
As of June 30, 2025, $346,405 of the Company’s available-for-sale debt securities were due to mature within one year or less, and $933,369 were due to mature between one and five years.
16
NOTE 6 – DERIVATIVES AND HEDGING
The table below summarizes the gross notional amount and fair value of outstanding derivative instruments at June 30, 2025 and December 31, 2024.
June 30, 2025
Balance Sheet Location
Notional Amount
Fair Value
Derivative assets designated as hedge accounting instruments:
Interest rate floors
Other Current Assets
Note 1
1,564
Foreign currency forwards
44,962
4,036
Foreign currency net purchased options
16,013
1,404
Total current derivative assets
60,975
7,004
Other Non-Current Assets
24,343
Total derivative assets
31,347
December 31, 2024
739
40,330
910
15,966
385
56,296
2,034
17,692
19,726
Note 1: The Company’s investment in interest rate derivative instruments consists of three and five year investments in 3% interest rate floors to hedge interest income on a $1,900,000 notional investment of customer funds in floating rate cash equivalent instruments. The short-term portion of the investments’ fair value shown in the tables above relates to the portion of the hedge expiring within one year of the balance sheet date.
During the three months ended June 30, 2025 and 2024, the Company recognized $6,445 and $982, respectively, and during the six months ended June 30, 2025 and 2024, the Company recognized $9,730 and $773, respectively, in unrealized gains, net of tax, on derivative instruments designated as cash flow hedges in OCI, respectively.
As of June 30, 2025, the Company estimated that $559 of unrealized gains related to cash flow hedges currently included in AOCI are expected to be reclassified into earnings within the next 12 months. As of June 30, 2025, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for forecasted transactions is 52 months. During the three and six months ended June 30, 2025 and 2024, the Company did not discontinue any cash flow hedges because it was probable that the original forecasted transaction would not occur and as such, did not reclassify any gains or losses to earnings prior to the occurrence of the hedged transaction.
As of June 30, 2025 and December 31, 2024, the Company recognized an obligation to return cash collateral related to interest rate floors of $25,420 and $18,790, respectively, which was offset against the gross derivative balances shown in the table above.
17
NOTE 7 – FAIR VALUE
The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024:
Level 1
Level 2
Level 3
U.S. Treasury Securities (included within Customer funds)
Derivative assets (included within Other current assets)
Derivative assets (included within Other non-current assets)
Total financial assets
1,311,121
Skuad acquisition earnout liability (included within Other payables)
9,119
Current portion of Payeco deferred payment liability (included within Other payables)
3,754
Non-current portion of Payeco deferred payment liability (included within Other long-term liabilities)
8,256
Total financial liabilities
21,129
1,194,663
Current portion of Skuad acquisition earnout liability (incuded within Other payables)
723
Non-current portion of Skuad acquisition earnout liability (included within Other long-term liabilities)
8,021
8,744
The Company’s foreign currency derivative instruments are valued using pricing models that take into account the contract terms and relevant currency rates. The Company’s interest rate floors are valued using pricing models that take into account the contract terms and relevant interest rates.
As of June 30, 2025 and December 31, 2024, the fair values of the Company’s cash, cash equivalents, customer funds (other than the portion consisting of available-for-sale debt securities), restricted cash, accounts receivable, capital advance receivables, accounts payable, and outstanding operating balances approximated the carrying values of these instruments presented in the Company’s condensed consolidated balance sheets because of their nature.
18
NOTE 7 – FAIR VALUE (continued):
In 2024, the Company recognized a liability for contingent consideration related to the Skuad acquisition, and recognized $110 and $375 during the three and six months ended June 30, 2025, respectively in loss related to the change in the fair value of the liability, included within General and administrative expenses on the condensed consolidated statements of comprehensive income. Refer to Note 3 above for additional details around valuation.
NOTE 8 - OTHER CURRENT ASSETS
Composition of Other current assets, grouped by major classifications, is as follows:
Prepaid expenses
30,396
21,429
Income receivable
22,952
24,654
Prepaid income taxes
11,921
33,476
Derivative assets
5,440
1,295
Other
6,518
7,356
Total Other current assets
NOTE 9 – PROPERTY, EQUIPMENT AND SOFTWARE
Composition of property, equipment and software, grouped by major classifications, is as follows:
Computers, software and peripheral equipment
48,468
43,003
Leasehold improvements
9,443
8,846
Furniture and office equipment
6,423
6,286
Property, equipment and software
64,334
58,135
Accumulated depreciation
(46,454)
(42,082)
Depreciation expense for the three months ended June 30, 2025 and 2024 was $2,559 and $2,098, respectively, and $4,696 and $4,206 for the six months ended June 30, 2025 and 2024, respectively.
During the three and six months ended June 30, 2025, the Company retired an insignificant amount of computers, software, and peripheral equipment that were fully depreciated. During the three and six months ended June 30, 2024, the Company retired computers, software, and peripheral equipment with a cost of $7 and $1,718, respectively, that were fully depreciated.
NOTE 10 –INTANGIBLE ASSETS
Composition of intangible assets, grouped by major classifications, is as follows:
Gross Carrying Value
Accumulated Amortization
Net Carrying Value
Internal use software
205,124
(109,525)
95,599
175,698
(86,882)
88,816
Acquired developed technology
20,269
(15,380)
4,889
(13,111)
7,158
Customer relationships
(588)
6,095
(267)
6,416
License
329,433
(125,493)
202,650
(100,260)
19
NOTE 10 –INTANGIBLE ASSETS (continued):
As discussed in Note 3, in April 2025, the Company completed its acquisition of PayEco. The Company determined that this transaction is an asset acquisition under ASC 805, as the acquired group of assets does not have a substantive process that together with the assets acquired significantly contribute to the ability to create outputs. Therefore, the business definition is not met. The Company has determined that the license is an indefinite lived intangible asset with a carrying value of $97,357 at June 30, 2025.
Amortization expense for the three months ended June 30, 2025 and 2024 was $12,994 and $8,614, respectively, and $25,247 and $15,914 for the six months ended June 30, 2025 and 2024, respectively.
During the three and six months ended June 30, 2025, the Company recognized an insignificant amount of impairment related to internal use software assets. Similarly, during the three and six months ended June 30, 2024, the Company recognized an insignificant amount of impairment related to intangible assets. Impairments are presented under Depreciation and amortization expenses in the condensed consolidated statements of comprehensive income.
Expected future finite-lived intangible asset amortization as of June 30, 2025, excluding capitalized internal use software of $18,216 not yet placed in service as of that date, was as follows:
Fiscal years
2025 (Excluding the six months ended June 30, 2025)
24,570
2026
38,809
2027
18,762
2028
2,099
2029 and thereafter
4,127
88,367
NOTE 11 - OTHER PAYABLES
Composition of Other payables, grouped by major classifications, is as follows:
Employee related compensation
66,616
81,482
Commissions payable
20,882
18,057
Accrued expenses
13,570
14,704
Current portion of Skuad acquisition earnout liability
8,693
5,157
Lease liability
6,567
5,735
Current portion of PayEco acquisition deferred payment liability
Income tax payable
2,751
3,763
Total Other payables
20
NOTE 12 – OTHER LONG-TERM LIABILITIES
Composition of other long-term liabilities, grouped by major classifications, is as follows:
Reserves for uncertain income tax positions
47,539
39,633
Long-term lease liabilities
39,315
15,645
Other tax provisions
8,898
7,699
Non-current portion of PayEco acquisition deferred payment liability
Severance pay liabilities
2,203
2,045
Non-current portion of Skuad acquisition earnout liability
Total other long-term liabilities
NOTE 13 – WARRANTS AND SHAREHOLDERS’ EQUITY:
Share Repurchase Program and Treasury Stock
On May 7, 2023, the Company’s Board of Directors authorized a stock repurchase program that provides for the repurchase of up to $80,000 of its common stock, including any applicable excise tax. On December 7, 2023, the Board of Directors authorized an amendment to the program to increase the authorized amount of repurchases to an aggregate amount not to exceed $250,000, including the amount that remained available as of December 7, 2023 to repurchase common stock under, but not any prior repurchases effected pursuant to, the previous authorization, and any applicable excise tax. Subsequent to June 30, 2025, our Board of Directors amended the existing repurchase authorization to increase the authorized amount of repurchases to an aggregate amount not to exceed $300,000, which amount includes amounts that remained available to repurchase common stock under, but not any prior repurchases effected pursuant to, the existing repurchase program and any applicable excise tax. The effective date of the amended authorization was August 6, 2025, and the amended authorization expires on December 31, 2027. The share repurchase program is intended to offset the impact of dilution from the issuance of new shares as part of employee compensation programs. Any share repurchases under this stock repurchase program may be made through open market transactions, privately negotiated transactions or other means including in accordance with Rule 10b-18 and/or Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The timing and total amount of repurchases is subject to business and market conditions and the Company’s discretion.
During the three and six months ended June 30, 2025, the Company repurchased 4,812,166 and 6,692,475 shares of its common stock for $32,703 and $49,681 at a weighted average cost of $6.80 and $7.43 per share, respectively. During the three and six months ended June 30, 2024, the Company repurchased 8,710,963 and 19,244,897 shares of its common stock for approximately $46,596 and $97,756 at a weighted average cost of $5.33 and $5.06 per share, respectively. As of June 30, 2025, a total of $54,070 remained available for future repurchases of the Company’s common stock under the program.
Warrants
The Company had publicly traded warrants that were assumed upon the closing of the business combination with FTAC Olympus Acquisition Corp. in June 2021, and were exercisable for shares of the Company’s common stock. Warrants were only exercisable for a whole number of shares at an exercise price of $11.50 and would expire on June 25, 2026, or earlier, if redeemed. In September 2024, the Company completed a tender offer (the “Offer”) to repurchase all outstanding Warrants, at $0.78 per Warrant. Concurrently with the Offer, the Company solicited consents (the “Consent Solicitation”) from holders of its outstanding Warrants to amend the agreement governing the Warrants (the “Warrant Agreement”) to permit the Company to redeem all Warrants that remained outstanding after the completion of the Offer for $0.70 per Warrant in cash, without interest.
During 2024, 24,030,937 Warrants were validly tendered and were repurchased for $0.78 per Warrant, or $18,744 in total, with a $13,217 loss recognized upon repurchase, which was the result of the premium paid above the valuation of the Warrants as of the latest revaluation date of June 30, 2024. All remaining untendered and outstanding Warrants were redeemed for $0.70 per Warrant, or $789 in total, with a $530 loss recognized upon repurchase, which was the result of the premium paid above the valuation of the Warrants as of the latest revaluation date of June 30, 2024.
21
NOTE 13 – WARRANTS AND SHAREHOLDERS’ EQUITY (continued):
The Warrants were accounted for as liabilities in accordance with ASC 815-40, Derivatives and Hedging, and were presented within warrant liabilities on the condensed consolidated balance sheets. The warrant liabilities were measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the condensed consolidated statements of comprehensive income. The following table presents the changes in the fair value of warrant liabilities (Level 1) during the six months ended June 30, 2024:
Warrant
Liability
Fair value as of December 31, 2023
8,555
Change in fair value
Fair value as of June 30, 2024
5,788
Accumulated Other Comprehensive Income (Loss)
The changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, for the three and six months ended June 30, 2025 and 2024 were as follows:
Three Months Ended June 30, 2025
Unrealized gains on available-for-sale debt securities
Unrealized gains (losses) on cash flow hedges
Beginning balance
(411)
5,312
(8,760)
Other comprehensive income before reclassifications
1,996
7,643
9,705
Amount of loss reclassified from AOCI
(1,198)
Net current period other comprehensive income
6,445
Ending balance
(345)
7,308
(2,315)
Six months ended June 30, 2025
Unrealized gains (losses) on available-for-sale debt securities
(242)
(322)
(12,045)
Other comprehensive income (loss) before reclassifications
7,630
11,401
18,928
(1,671)
Net current period other comprehensive income (loss)
9,730
Three Months Ended June 30, 2024
(1)
28
(982)
(110)
409
(573)
(545)
Six Months Ended June 30, 2024
(773)
98
228
NOTE 14 – COMMITMENTS AND CONTINGENCIES
The Company’s business is subject to various laws and regulations in the United States and other countries from where the Company operates. Any regulatory action, tax or legal challenge against the Company for noncompliance with any regulatory or legal requirement could result in significant fines, penalties, or other enforcement actions, increased costs of doing business through adverse judgment or settlement, reputational harm, loss of banking or other operational relationships, the diversion of significant amounts of management time and operational resources, and could require changes in compliance requirements or impose limits on the Company’s ability to expand its product offerings, or otherwise harm or have a material adverse effect on the Company’s business. From time to time, the Company incurs insignificant fines and penalties in the ordinary course of business.
On September 28, 2021, the National Banking and Securities Commission (CNBV) and the Bank of Mexico revoked the banking license of a banking entity utilized by the Company due to the banking entity not meeting applicable capital requirements. As a result, the Company is unable to withdraw funds from the banking entity. The Company has reserved $2,250 for potential losses related to those funds above the recovered amount. The Company applied for and recovered the maximum statutory reimbursement through the deposit insurance provided by Mexican Institute for the Protection of Banking Services (IPAB), totaling $140. The Company has filed a claim in liquidation for the remaining funds; however, the percentage of the deposit that will be recovered in liquidation is not known at this time.
From time to time, the Company is involved in other disputes or regulatory inquiries that arise in the ordinary course of business. These may include suits by its customers alleging, among other things, acting unfairly and/or not in conformity regarding pricing, rules or agreements, improper disclosure of the Company’s prices, rules, or policies or that the Company’s practices, prices, rules, policies, or customer agreements violate applicable law.
In addition to these types of disputes and regulatory inquiries, the operations of the Company are also subject to regulatory and/or legal review and/or challenges that tend to reflect the increasing global regulatory focus to which the industry in which the Company operates is subject and, when taken as a whole with other regulatory and legislative action, such actions could result in the imposition of costly new compliance burdens on the Company and may lead to increased costs and decreased transaction volume and revenue. Any claims or regulatory actions against the Company, whether meritorious or not, could be time consuming, result in costly litigation, settlement payments, damage awards (including statutory damages for certain causes of action in certain jurisdictions), fines, penalties, injunctive relief, or increased costs of doing business through adverse judgment or settlement, require the Company to change its business practices, require significant amounts of management time, result in the diversion of operational resources, or otherwise harm the business.
23
NOTE 15 – REVENUE
The following table presents revenue recognized from contracts with customers as well as revenue from other sources:
Three months ended June 30,
Six months ended June 30,
Revenue recognized at a point in time
199,560
170,751
384,893
330,547
Revenue recognized over time
936
492
1,866
1,154
Revenue from contracts with customers
200,496
171,243
386,759
331,701
Interest income on customer balances
58,334
65,821
116,306
131,089
Capital advance income
1,784
2,456
4,166
4,913
Revenue from other sources
60,118
68,277
120,472
136,002
Total revenues
Based on the information provided to and reviewed by the Company’s Chief Operating Decision Maker (“CODM”), the Company believes that the nature, amount, timing, and uncertainty of its revenue and cash flows and how they are affected by economic factors are most appropriately depicted through its primary regional markets. The following table presents the Company’s revenue disaggregated by primary regional market, with revenues being attributed to the country (in the region) in which the billing address of the transacting customer is located, with the exception of global bank transfer revenues, where revenues are disaggregated based on the billing address of the transaction funds source.
Note that in 2024, the Company updated the definition of its primary regional markets to align with the view used by Management. This update eliminates South Asia, Middle East and North Africa as a separate region and instead includes revenues from South Asia in the Asia-Pacific region and Middle East and North Africa in the Europe, Middle East, and Africa region. The update has been applied to all periods reflected in the table below.
Primary regional markets
Greater China1
85,913
84,439
170,809
165,797
Europe, Middle East, and Africa2
67,396
62,752
126,289
121,915
Asia-Pacific2
53,762
44,996
105,022
86,578
Latin America2
28,883
24,535
56,756
47,605
North America3
24,660
22,798
48,355
45,808
Greater China is inclusive of mainland China, Hong Kong, Macao and Taiwan.
(2)
No single country included in any of these regions generated more than 10% of total revenue.
(3)
The United States is the Company’s country of domicile. Of North America revenues, the U.S. represents $23,477 and $21,645 during the three months ended June 30, 2025 and 2024, respectively, and $46,089 and $43,570 during the six months ended June 30, 2025 and 2024, respectively.
24
NOTE 16 - TRANSACTION COSTS
Composition of transaction costs, grouped by major classifications, is as follows:
Three Months Ended
Bank and processor fees
30,684
25,476
59,342
49,855
Network fees
7,358
5,680
13,826
10,716
Chargebacks and operational losses
1,076
3,689
3,450
5,576
Card costs
366
587
749
1,106
Capital advance costs, net of recoveries
661
1,485
1,729
3,522
421
44
819
152
Total transaction costs
NOTE 17 – SEGMENT INFORMATION
The Company determines operating segments based on how its CODM manages the business, makes operating decisions around the allocation of resources, and evaluates operating performance. The Company’s CODM are its Chief Executive Officer and Chief Financial Officer, who review its operating results on a consolidated basis. The Company operates in one segment and has one reportable segment.
The Company’s CODM use consolidated net income, as shown on the condensed consolidated statements of comprehensive income, as the measure of segment profitability. The CODM use net income to evaluate the Company’s ongoing operations and for internal planning and forecasting purposes. This analysis is used in making strategic investment decisions. The Company’s measure of segment assets is reported on the condensed consolidated balance sheets as total assets.
Three Months Ended June 30,
Revenue
Less:
Transaction cost1
(40,566)
(36,961)
(79,915)
(70,927)
Labor & related
(75,741)
(66,267)
(148,805)
(134,558)
(20,059)
(13,666)
(38,814)
(28,742)
3rd party contractors
(9,419)
(8,587)
(18,260)
(18,057)
IT & communication
(21,550)
(18,033)
(39,535)
(34,428)
Depreciation & amortization
(15,553)
(10,712)
(29,943)
(20,120)
Other operating expenses2
(47,649)
(38,985)
(92,563)
(76,186)
(10,370)
(15,866)
(17,562)
(29,776)
Other segment items3
Net income (loss)
(1) Refer to Note 16 for disaggregation of transaction cost into significant segment expense categories.
(2) Other operating expenses include miscellaneous, individually insignificant operating expenses. The Company’s CODM review these items in aggregate.
(3) Other segment items included in net income include finance income and expense, which primarily includes corporate interest income and foreign currency remeasurement gains and losses. For the period ended June 30, 2024, this also includes public warrant revaluation.
25
NOTE 18 – STOCK-BASED COMPENSATION
Stock Options
The following table summarizes the options to purchase shares of common stock activity under the Company’s equity incentive plans for the six months ended June 30, 2025:
Options
Outstanding at December 31, 2024
11,560,158
Granted
Exercised
(2,267,422)
Forfeited
(144,900)
Outstanding at June 30, 2025
9,147,836
Exercisable at June 30, 2025
8,283,157
The weighted average exercise price of the options outstanding as of June 30, 2025 was $3.01 per share.
Restricted and Performance Stock Units
The following table summarizes the restricted stock unit (“RSU”) and performance stock unit (“PSU”) activity under the Company’s equity incentive plans as of June 30, 2025:
Units
Outstanding December 31, 2024
29,163,413
7,798,271
Vested
(5,889,804)
Withhold to cover shares repurchased
(1,214,946)
(1,873,969)
Outstanding June 30, 2025
27,982,965
In the six months ended June 30, 2025, the Company granted 6,903,168 RSUs under the Company's Omnibus Stock Incentive Plan, which are subject to time-vesting and continued service conditions.
In the same period, the Company granted 895,103 PSUs under the same Plan, which are subject to time-vesting, continued service conditions and achievement of specified company performance goals.
The Company withholds common stock shares associated with net share settlements to cover tax withholding obligations upon the vesting of restricted stock units under its employee equity incentive plans in the United States. During the three months ended June 30, 2025 and 2024, the Company withheld 492,509 and 343,249 shares for $3,373 and $2,117, respectively, and for the six months ended June 30, 2025 and 2024, the Company withheld 1,214,946 and 1,148,679 shares for $10,867 and $5,997, respectively. RSU vesting is shown net of this withholding on the condensed consolidated statements of shareholders’ equity and cash flows.
The Company collects cash from proceeds from certain international employees’ sales of common stock. The amount is held in a Company bank account until it is remitted to the employees. Due to the restrictions on the use of the funds in the bank account, we have classified the amount as short-term restricted cash, and a corresponding liability is included in Other payables in the condensed consolidated balance sheets. As of June 30, 2025, $242 of such funds were held.
26
NOTE 18 – STOCK-BASED COMPENSATION (continued):
Employee Stock Purchase Plan
As of June 30, 2025, approximately 2,819,906 shares were reserved for future issuance under the Company’s Employee Stock Purchase Plan (“ESPP”). The fair value attributable to the ESPP was $1,587 as of May 31, 2025, the beginning of the current offering period, and was measured using the Black-Scholes pricing model. The current offering period is expected to close November 29, 2025.
The expense associated with the ESPP recognized during the three and six months ended June 30, 2025 was $693 and $1,486, respectively.
Impact on Results of Operations
The impact on the Company’s results of operations of recording stock-based compensation expense under the Company’s equity incentive plans, including the ESPP, were as follows:
3,279
2,963
5,866
5,770
5,228
1,329
10,281
4,469
4,732
4,436
9,533
8,626
6,820
4,938
13,134
9,877
Total stock-based compensation
20,059
13,666
Note that $697 and $817 in stock-based compensation awards were capitalized as part of internal-use software during the three months ended June 30, 2025 and 2024, respectively, and $1,313 and $1,736 were capitalized during the six months ended June 30, 2025 and 2024, respectively.
NOTE 19 - INCOME TAXES
The Company’s provision for income taxes in the interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in the period.
The Company had an effective tax rate of 30% and 33% for the six months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025, the difference between the Company’s effective tax rate and the U.S. federal statutory rate of 21% was primarily the result of an increase in the provision for uncertain tax positions and nondeductible stock-based compensation, partially offset by a benefit under U.S. tax law for income earned from foreign customers. For the six months ended June 30, 2024, the difference between the Company’s effective tax rate and the U.S. federal statutory rate of 21% was the result of an increase in the provision for uncertain tax positions as well as discrete tax adjustments, primarily related to stock-based compensation.
The Company maintains a valuation allowance in jurisdictions where it is more likely than not that all or a portion of a deferred tax asset may not be realized. In determining whether a valuation allowance is warranted, the Company evaluates factors such as prior earnings history, expected future earnings and the reversal of existing taxable temporary differences. As of June 30, 2025, the Company maintains a full valuation allowance on its deferred tax assets in Singapore, associated with the Skuad acquisition in Singapore, and in Germany as management believes it is more likely than not that the deferred tax assets will not be recognized in these jurisdictions. The Company maintains its previous conclusion that a valuation allowance on deferred tax assets in the United States and Israel is not necessary.
27
NOTE 20 – NET EARNINGS PER SHARE
The Company’s basic net earnings per share is calculated by dividing net income attributable to common shareholders by the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities. The diluted net earnings per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net earnings per share is the same as basic net earnings per share in periods when the effects of potentially dilutive shares of common shares are anti-dilutive.
Basic and diluted net earnings per share attributable to common stockholders were calculated as follows:
(In thousands, except share and per share data)
Numerator:
Denominator:
Weighted average common shares outstanding —
Basic
Add:
Dilutive impact of RSUs, ESPP and options to purchase common stock
11,066,906
16,327,840
16,225,157
18,226,359
Dilutive impact of private warrants
795,285
724,885
840,313
705,359
Weighted average common shares – diluted
Diluted earnings per share
For the three and six month periods ended June 30, 2025, 2,750,000 RSUs with market conditions, 895,103 PSUs, 15,000,000 Earn-Out Shares (as that term is defined in the Agreement and Plan of Reorganization dated February 3, 2021 (as amended) with FTAC Olympus Acquisition Corp.), and ESPP shares to be issued under the current offering period were excluded from the computation of diluted net earnings per share, as their effect was antidilutive, conditions were not met or they were not in the money in the reporting period. For the three and six month period ended June 30, 2025, 8,116,630 and 7,804,304 RSUs, respectively, have been excluded for the same reason. For the three month period ended June 30, 2025, 1,487,008 options to purchase common stock was excluded for the same reason. In both the three and six month periods ended June 30, 2024, 25,158,086 Public Warrants, 3,620,000 RSUs with market conditions, 15,000,000 Earn-Out Shares, 2,043,479 options to purchase common stock, and ESPP shares to be issued under the May 15, 2024 offering period were excluded for the same reason. For the three and six month periods ended June 30, 2024, 2,208,513 and 11,018,581 RSUs, respectively, have been excluded for the same reason.
NOTE 21 – SUBSEQUENT EVENTS
On July 30, 2025, the Company’s Board of Directors amended the existing repurchase authorization to increase the authorized amount of repurchases to up to $300,000, which amount includes amounts that remained available to repurchase common stock under, but not any prior repurchases effected pursuant to, the existing repurchase program and any applicable excise tax. The effective date of the amended authorization was August 6, 2025, and the amended authorization expires on December 31, 2027. See Note 13 for further information.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Throughout this section, unless otherwise noted, “we”, “us”, “our”, “Payoneer”, and the “Company” refer to Payoneer Global Inc.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis, including information with respect to our future performance, liquidity and capital resources, and general and administrative functions, includes forward-looking statements that involve risks and uncertainties. You should review the sections titled “Cautionary Note on Forward-Looking Statements” and “Risk Factors” for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
Payoneer is a financial technology company purpose-built to enable the world’s small and medium-sized businesses (“SMB(s)”) to grow and operate their businesses around the world by reliably and securely connecting them to the global digital economy. Payoneer’s financial stack makes it easier for millions of SMBs and entrepreneurs, particularly in emerging markets, to access global demand and supply, pay and get paid, and manage their cross border and other needs from a single platform. Our financial stack provides a suite of cross-border accounts receivable (AR) and accounts payable (AP) capabilities, including multicurrency account capabilities, and includes services such as working capital and funds management. Payoneer’s core value proposition is that we remove the complexity and barriers of doing business across borders for our customers. With a multi-currency Payoneer Account, businesses and entrepreneurs around the world can serve and transact with their overseas customers, suppliers, vendors, contractors, and partners as if they were local.
We primarily generate revenues when Payoneer customers use the funds in their Payoneer account to make a payment, make a purchase or to withdraw the funds to a financial institution. For our customers transacting on a B2B or DTC basis, we also in certain circumstances generate revenue when they receive funds, such as when they invoice a customer or collect payments via their webstore. Additionally, given the significant customer funds held on our platform and ongoing growth in those balances, and in light of the high interest rate environment in the U.S. and elsewhere, interest earned on customer funds held on our platform has been a significant source of revenue. Our long-term strategy is centered on growing with customers on our platform who fit our ideal customer profile, namely – those who are customers that have on average over $500 a month in volume and were active over the trailing twelve-month period, and on increasing the revenue we earn from each customer. We believe that successful execution of this strategy will drive revenue growth as (i) adding new customers who meet our ideal customer profile, improving retention, and increasing our product offerings to capture more wallet share will drive greater ad valorem volume of transactions processed through the Payoneer platform; and (ii) introducing new products and services and increasing customer adoption of additional products and services will improve our monetization of customers over time. Volume is one of the primary drivers for our revenue growth. See “Key Metrics and Non-GAAP Financial Measures” for additional information.
Our customers have trusted the Payoneer platform to process $20.7 billion and $18.7 billion in volume during the three months ended June 30, 2025 and 2024, respectively, and $40.4 billion and $37.2 billion in volume during the six months ended June 30, 2025 and 2024, respectively.
Looking forward, we intend to continue to invest actively to enhance our global platform, deliver new products, extend our regulatory footprint, further automate our operations, increase new customer growth and make acquisitions to accelerate our ability to deliver more value to customers around the world.
Key Developments and Trends
Macroeconomic Conditions
We are focused on executing our strategy for growth and capturing the long-term opportunity of serving cross-border SMBs from around the world. However, macroeconomic conditions, including geopolitical and other global events that impact consumer and business spending and behavior, such as, but not limited to, the interest rate environment, inflation, changes in global trade policies (including the imposition of tariffs), local political instability, global health crises, supply chain dislocations, regional and other conflicts, including the ongoing war in Ukraine and Israel’s ongoing conflicts in the Middle East, and disruptions and instability and regulatory changes in the banking sector may impact our customers, providers, banking partners and relationships and ultimately the amount of volume processed on our platform which may affect our results of operations. For example, the recent imposition of significant trade policy measures and tariffs by the U.S. government, including but not limited to tariffs on China, has introduced increased uncertainty and potential risks and opportunities for both our customers and our business. The long-term effects of these and any future trade actions on the global economy and our business remain uncertain. These developments could have a material adverse impact on our financial results in any given reporting period. We continue to monitor evolving trade policies and will evaluate potential impacts on our financial statements as more information becomes available.
As we increase the utility of the Payoneer Account, we have grown customer funds on our platform over a multi-year period to $7.0 billion as of June 30, 2025. During 2023, the U.S. Federal Reserve raised the target benchmark interest rate by 525 basis points to a high of 525 to 550 basis points by August 2023. Coupled with continued growth in customer balances, this drove a significant increase in the interest income revenue we earn on our customer funds. During 2024, the U.S. Federal Reserve cut the benchmark interest rate by 100 basis points to a target range of 425 to 450 basis points. As of the date of this Quarterly Report on Form 10-Q, there has been no change to the U.S. benchmark rates in the current year. While there remains uncertainty as to the timing and magnitude of future interest rate changes, we expect to see a negative impact on our revenue from declining interest rates over the medium-term. In response, since 2024, we have been investing a total of $1.8 billion of our customer funds in both available-for-sale debt securities and term deposits to reduce our sensitivity to declines in short term interest rates, and have purchased interest rate derivative contracts with respect to $1.9 billion in customer funds to provide a floor against the impact of interest rate declines below levels defined in the relevant interest rate derivative instruments.
Impact of Israel’s Conflicts in the Middle East
Since October 7, 2023, Israel has been at war with Hamas, intermittently with Hezbollah, and exchanged attacks with Iran and other proxies of the Iranian regime, including the “12-day war” in June 2025. Despite the ongoing war in the region, we have continued to operate our business and serve our customers around the world and, to date, our ability to support customers has not been materially impacted. We are monitoring the situation closely and benefit from our broad geographic footprint, partially outsourced operations model, and a robust business continuity plan. Additionally, our technology infrastructure has redundancy in place outside of Israel. Approximately 52% of our global employee base is located in Israel, including approximately 78% of our research and development resources. At this time, an insignificant portion of our Israeli workforce have been called to military reserve duty and we have contingencies in place to cover impacted roles and responsibilities.
The evolving conflict is likely to continue to impact economic activity in the region and could impact revenues from customers located in Israel. Our revenue derived from customers based in Israel was insignificant for the three and six months ended June 30, 2025 and is included within revenues from Europe, Middle East, and Africa within Note 16 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
The state of the ongoing conflict remains highly uncertain and could worsen or expand which could, in turn, further impact economic conditions in Israel and in the broader region. At this time, it is difficult to assess the impact the war may have on our future results of operations. Any further escalation, expansion, or prolonged continuation of the ongoing conflict has the potential to impact our operations as well as to negatively impact the broader global economy and may have a material adverse effect on our results of operations.
30
Impact of the war in Ukraine
During 2022, a geopolitical and armed conflict between Ukraine and Russia, which developed into an ongoing war, resulted in economic sanctions on Russia, Belarus, and certain territories in Ukraine. We provide services to customers in Ukraine and in jurisdictions that are or may be impacted by these economic sanctions. We have developed and implemented a robust transaction monitoring program designed to comply with imposed sanctions and to monitor the impact the conflict may have on our results of operations. During 2022, we ceased to provide services to customers in Russia and have limited our payment services to Belarus customers. Our revenues in Ukraine have remained relatively stable. For the three and six months ended June 30, 2025, Ukraine and Belarus, combined, accounted for less than 10% of our revenue, of which Belarus accounted for less than 1% of our revenue. Further escalation of the conflict may have a material effect on our results of operations.
Mergers & Acquisitions
On April 9, 2025, Payoneer acquired 100% of the outstanding equity of Payeco Finance Information Holding Corporation, the parent company of EasyLink Payment Co., Ltd., a licensed China based payment service provider. The acquisition strengthens Payoneer’s global regulatory infrastructure and positions it to better serve China-based customers with enhanced and localized products and services. Refer to Note 3 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information on the acquisition.
On August 5, 2024, Payoneer acquired 100% of the outstanding equity of Skuad Pte. Ltd. (“Skuad”), a global workforce and payroll management company. The acquisition accelerates Payoneer’s strategy to deliver a comprehensive and integrated financial stack for SMBs that operate internationally.
Results of Operations
The period-to-period comparisons of our results of operations have been prepared using the historical periods in our condensed consolidated financial statements. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related Notes included within this Quarterly Report on Form 10-Q.
Increase/
(Decrease)
(in thousands except percentages)
%
Transaction costs
36
42
33
45
49
(35)
(30)
(100)
**
(38)
(37)
(41)
**not meaningful
31
Revenues were $260.6 million and $507.2 million for the three and six months ended June 30, 2025, an increase of $21.1 million and $39.5 million, or 9% and 8%, respectively, compared to the prior-year period. This increase in revenue was comprised of an increase in SMB revenue, including $15.7 million and $29.8 million from B2B SMBs, $8.5 million and $16.4 million from SMBs that sell on marketplaces, and $4.0 million and $7.5 million from SMBs selling DTC, for the three and six months ended June 30, 2025, respectively. This growth in SMB revenue was driven by continued adoption of our high value services, certain monetization initiatives, and ongoing growth in high take rate regions. This increase in revenues was partially offset by a decrease of $7.5 million and $14.8 million in interest income earned on customer balances for the three and six months ended June 30, 2025, respectively, resulting from modestly lower interest rates, and partially offset by an increase in customer balances held on our platform compared to the prior year period. Transaction costs
Transaction costs were $40.6 million for the three months ended June 30, 2025, an increase of $3.6 million, or 10%, compared to the prior-year period, driven by an increase of $5.2 million in bank and processor fees and $1.7 million in card network fees offset by a decrease in chargebacks and operational losses of $2.6 million. The increase in transaction costs is broadly in line with the increase in volume.
Transaction costs were $79.9 million for the six months ended June 30, 2025, an increase of $9.0 million, or 13%, compared to the prior-year period, driven by an increase of $9.5 million in bank and processor fees and $3.1 million in card network fees offset by improvements in chargebacks and operational losses of $2.1 million. The increase in transaction costs outpaced the increase in total volume due to shift toward products with a higher cost per transaction.
Other operating expenses were $42.7 million for the three months ended June 30, 2025, an increase of $ 1.5 million, or 4%, compared to the prior-year period, driven primarily by an increase of $2.1 million in information technology expenses, partially offset by a decrease of $1.5 million in reserves related to ongoing regulatory matters.
Other operating expenses were $84.4 million for the six months ended June 30, 2025, an increase of $2.8 million, or 3%, compared to the prior-year period, driven primarily by an increase of $3.2 million in information technology expenses partially offset by a decrease of $1.5 million in reserves related to ongoing regulatory matters and a decrease of $1.3 million in third party contractor expenses.
Research and development expenses were $37.4 million for the three months ended June 30, 2025, an increase of $9.8 million, or 36%, compared to the prior-year period, driven by an increase of $6.3 million in employee compensation, benefits and other employee-related expenses in line with an increase in employee headcount, an increase of $2.4 million in third-party contractor expenses and an increase of $1.1 million in information technology expenses.
Research and development expenses were $74.7 million for the six months ended June 30, 2025, an increase of $15 million, or 25%, compared to the prior-year period, driven by an increase of $10.2 million in employee compensation, benefits and other employee-related expenses in line with an increase in employee headcount and including certain restructuring charges, an increase of $3.1 million in third-party contractor expenses and an increase of $1.8 million in information technology expenses, partially offset by an increase of $1.2 million in employee compensation costs capitalized as internal use software in connection with ongoing investments in our platform infrastructure.
Sales and marketing expenses were $57.3 million for the three months ended June 30, 2025, an increase of $6.7 million, or 13%, compared to the prior-year period, driven primarily by an increase of $3.0 million in employee compensation, benefits and other employee-related expenses in line with an increase in employee headcount and an increase of $2.8 million in expenditures on certain marketing efforts.
Sales and marketing expenses were $112.0 million for the six months ended June 30, 2025, an increase of $11.5 million, or 11%, compared to the prior-year period, driven by an increase of $5.5 million in employee compensation, benefits and other employee-related expenses in line with an increase in employee headcount and an increase of $5.0 million in spend on certain marketing efforts.
32
General and administrative expenses were $37.0 million for the three months ended June 30, 2025, an increase of $10.9 million, or 42%, compared to the prior-year period, driven predominately by an increase of $5.4 million in employee compensation, benefits and other employee-related expenses primarily due to an increase in employee headcount and an increase of $1.9 million in third-party legal expenses.
General and administrative expenses were $66.9 million for the six months ended June 30, 2025, an increase of $16.6 million, or 33%, compared to the prior-year period, driven predominately by an increase of $10.6 million in employee compensation, benefits and other employee-related expenses primarily due to an increase in employee headcount and an increase of $1.8 million in consulting expenses.
Depreciation and amortization expenses
Depreciation and amortization expenses were $15.6 million and $29.9 million for the three and six months ended June 30, 2025, an increase of $4.8 million and $9.8 million, or 45% and 49%, respectively, compared to the prior-year period, mainly driven by an increase in amortization of internal use of software.
Financial income and expense, net
Financial expense, net was $0.2 million for the three months ended June 30, 2025, a decrease of $2.2 million, or 111%, compared to the prior-year period, primarily driven by a $4.1 million reduction in corporate interest income as a result of lower average invested balances and lower interest rates, as well as a $1.0 million gain from the change in fair value of the warrant liability in the prior year period which did not recur. These effects were offset by a $3.6 million decrease on the exchange rate loss during the current period compared to the prior-year period.
Financial expense, net was $1.8 million for the six months ended June 30, 2025, a decrease of $8.3 million, or 127%, compared to the prior-year period, primarily driven by a $8.1 million reduction in corporate interest income as a result of lower average invested balances and lower interest rates, as well as a $2.8 million gain from the change in fair value of the warrant liability in the prior year period which did not recur. These effects were offset by a $3.6 million decrease in the exchange rate loss during the current period compared to the prior period.
Income tax expense was $10.4 million for the three months ended June 30, 2025, a decrease of $5.5 million, or 35%, compared to the three months ended June 30, 2024. This decrease was primarily driven by a decrease of $6.7 million in our U.S. federal current income tax expense as compared to the prior year period, which is due to a significant benefit under U.S. tax law for income earned from foreign customers. Additionally, the decrease in income tax expense compared to the prior year period is due to a favorable impact from deferred tax benefits in the U.S. of $2.3 million, primarily related to stock-based compensation and capitalization of research and development costs. These decreases were offset by a $5.1 million increase in the provision for uncertain tax positions.
Income tax expense was $17.6 million for the six months ended June 30, 2025, a decrease of $12.2 million, or 41%, compared to the six months ended June 30, 2024. This decrease was primarily driven by a decrease of $12.4 million in our U.S. federal current income tax expense as compared to the prior year period, which is due to a significant benefit under U.S. tax law for income earned from foreign customers. Additionally, the decrease in income tax expense compared to the prior year period is due to a favorable impact from deferred tax benefits in the U.S. of $3.0 million, primarily related to stock-based compensation and capitalization of research and development costs. These decreases were offset by a $4.0 million increase in the provision for uncertain tax positions.
On July 4, 2025, the One Big Beautiful Bill Act (“the Act”) was enacted into U.S. law. The Act includes changes to corporate taxation including making permanent certain provisions of the Tax Cuts and Jobs Act that were previously set to expire on December 31, 2025. The Company is currently evaluating the potential impacts of the Act. Based on a preliminary review, the Company does not currently expect the Act to have a material impact on its effective tax rate or deferred tax assets for the period ended June 30, 2025. The Company will continue to assess the impact as further guidance becomes available and will monitor any implications for its effective tax rate and cash tax payments.
Liquidity and Capital Resources
The following discussion of our liquidity and capital resources is based on the financial information derived from our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
We believe our existing cash and cash equivalents and cash flows from operating activities will be sufficient to meet our operating working capital, share repurchase, capital advance, and capital expenditure requirements for at least the next twelve months. Our future financing requirements will depend on many factors including our growth rate, the timing and extent of spending to support development of our platform and the ongoing expansion needs of sales and marketing activities. We have in the past and may in the future enter into agreements with third parties with respect to investments in, or acquisitions of, businesses or technologies, which could also require us to seek additional equity or debt financing.
Sources of Liquidity
As of June 30, 2025, we had $497.1 million of cash and cash equivalents.
Current and Future Cash Requirements
On May 7, 2023, our Board of Directors authorized a stock repurchase program that provides for the repurchase of up to $80.0 million of our common stock, including any applicable excise tax. On December 7, 2023, the Board of Directors authorized an amendment to the program to increase the authorized amount of repurchases to an aggregate amount not to exceed $250.0 million, including the amount that remained available as of December 7, 2023 to repurchase common stock under, but not any prior repurchases effected pursuant to, the previous authorization, and any applicable excise tax. Subsequent to June 30, 2025, our Board of Directors amended the existing repurchase authorization to increase the authorized amount of repurchases to up to $300 million, which amount includes amounts that remained available to repurchase common stock under, but not any prior repurchases effected pursuant to, the existing repurchase program and any applicable excise tax. The effective date of the amended authorization was August 6, 2025, and the amended authorization expires on December 31, 2027. Refer to Note 13 for further information on the share repurchase amendment.
During the six months ended June 30, 2025, we repurchased 6,692,475 shares of our common stock for $49.7 million, of which $0.7 million was not yet settled at period end. As of June 30, 2025, a total of $54.1 million remained available for future repurchases of our common stock under the program in place at June 30, 2025.
Cash Flows
The following table presents a summary of cash flows from operating, investing, and financing activities for the following comparative periods.
(in thousands)
Change in cash, cash equivalents, restricted cash and customer funds
Note that as described in Note 5 to our condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q, during the quarter ended September 30, 2024, the Company identified an error in its condensed consolidated statements of cash flows for the six months ended June 30, 2024. Specifically, the Company incorrectly classified customer funds invested in term deposits in the basis of cash, cash equivalents, restricted deposits, and customer funds on the statement of cash flows, rather than as investing cash flows. In connection with the Company’s evaluation of these errors during the quarter ended September 30, 2024, management, in accordance SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”, determined that these adjustments were not material to the previously issued financial statements. In the condensed consolidated statements of cash flows for the six months ended June 30, 2024 filed with this Quarterly Report on Form 10-Q, the Company has correctly presented these investments as investing cash flows.
34
Operating Activities
Net cash provided by operating activities was $124.4 million for the six months ended June 30, 2025, an increase of $43.5 million compared to $80.9 million for the six months ended June 30, 2024.
Impact of changes in operating assets and liabilities - $53.3 million current period over prior period increase to operating cash flows
During the six months ended June 30, 2025, cash flows related to Capital advance receivables increased $28.4 million compared to the prior year period, driven by an increase in collections of $41.1 million which outpaced increased originations of $12.7 million during the period compared to the previous period.
Cash flows from Other current assets increased $24.2 million relative to the prior year period, driven by a one-time cash tax refund and timing of payments relative to period cutoff. Additionally, cash flows related to Other payables and Trade payables increased $6.7 million and $1.3 million, respectively, in each case compared to the prior year period, due to changes in timing of payments relative to period cut-off.
These increases were partially offset by cash flows from Other assets, which decreased $7.8 million compared to the prior year, primarily due to interest receivable from certificates of deposits that was not accrued in the prior period.
Impact of non-cash items - $11.6 million current period over prior period increase to operating cash flows
Current year period operating cash flows include, higher non-cash addbacks to net income to arrive at operating cash flows compared to prior year, consisting primarily of a $9.8 million increase in depreciation and amortization expense and a $10.1 million increase in stock-based compensation expense.
The overall increase to operating cash flows from non-cash items was partially offset by higher non-cash reductions to net income compared to prior years, consisting primarily of a decrease of $8.2 million in the amount of the addback due to the effect of exchange rate changes on cash and cash equivalents and a $4.3 million increase in deferred taxes.
Impact of net income - $21.3 million current period over prior period decrease to operating cash flows
The overall increase in operating cash flows was offset by a decrease in net income of $21.3 million in the six months ended June 30, 2025 compared to the prior year period, which was primarily a result of $64.8 million of growth in operating expenses which outpaced $39.5 million of growth in revenue, as discussed in the Results of Operations section above.
Investing Activities
Net cash used in investing activities was $133.5 million for the six months ended June 30, 2025, a decrease of $831.8 million compared to net cash used in investing activities of $965.3 million for the six months ended June 30, 2024.
During the six months ended June 30, 2025, our net cash used in investing activities saw a significant decrease. This contrasts with the six months ended June 30, 2024, when we made an initial substantial investment in U.S. Treasury securities and term deposits, resulting in net purchases of $934.2 million. In the current period, our purchases of these investments, net of maturities, amounted to $17.5 million, reflecting a shift from the initial ramping up of our program to a more measured approach of reinvestment. This decrease in net cash used in investing activities was partially offset by the increase in customer funds in-transit balances of $44.6 million and $33.1 million of cash paid for the acquisition of PayEco, net of cash and customer funds acquired.
Financing Activities
Net cash provided by financing activities was $2.2 million for the six months ended June 30, 2025, a decrease of $456.6 million compared to net cash used in financing activities of $443.5 million for the six months ended June 30, 2024. Current period cash used in financing activities reflects the $47.5 million increase in customer balances since the beginning of the period which was $401.0 million lower than the $353.4 million decline in the prior year period. Additionally share repurchases were $48.9 million lower than in the prior year period.
35
Key Metrics and Non-GAAP Financial Measures
Our management uses a variety of financial and operating metrics to evaluate our business, analyze our performance, and make strategic decisions. We believe these metrics and non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as management. However, certain of these measures are not financial measures calculated in accordance with GAAP and should not be considered as substitutes for financial measures that have been calculated in accordance with GAAP. We primarily review the following key performance indicators and non-GAAP measures when assessing our performance:
Volume
Volume refers to the total dollar value of transactions successfully completed or enabled by our platform, not including orchestration transactions. For a customer that both receives and later sends payments, we count the volume only once. Volume serves as a key metric for overall business activity, as growing volume is one of the primary drivers for our revenue growth.
(in millions)
20,688
18,713
40,363
37,169
Volume grew 11% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, and 9% for the six months ended June 30, 2025 when compared to the six months ended June 30, 2024, respectively, driven by a combination of continued growth in volumes from SMBs selling on marketplaces, strong growth in volume from B2B SMBs, and in volumes processed for enterprise partners, including in the travel segment.
We generate revenues mainly from transaction fees, which vary based on the type of service the customer utilizes. Transaction fee revenue principally consists of fees for withdrawals and usage. We also earn revenues in certain instances from volumes coming into the platform related to our B2B services and through our Checkout offering. We generate significant revenues from interest earned on customer funds held on our platform. In addition, we generate revenue from non-volume-based products and services which are based on a fixed fee. We believe that Revenue demonstrates our ability to monetize volume activity on our platform. Our revenues can be impacted by the following:
Management closely monitors volume and revenue to ensure that we continue to grow funds and business activity that enters into the platform, expanding our overall scale and the reach of our business.
Adjusted EBITDA
In addition to our financial results determined in accordance with GAAP, we believe Adjusted EBITDA, as a non-GAAP measure, is useful in evaluating our operating performance. We use Adjusted EBITDA to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial measure, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of Adjusted EBITDA is helpful to our investors as it is a metric used by management in assessing our operating performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measure as a tool for comparison. A reconciliation is provided below for our non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measure and the reconciliation of this non-GAAP financial measure to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.
Other financial expense (income), net
227
(976)
1,777
(3,723)
EBITDA
45,630
58,027
89,339
107,572
Stock based compensation expenses(1)
M&A related expenses(2)
736
2,091
1,073
4,466
Gain from change in fair value of Warrants(3)
(1,006)
Restructuring charges(4)
2,630
66,425
72,778
131,856
138,013
(1) Represents non-cash charges associated with stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy.
(2) Amounts relate to M&A-related third-party fees, including related legal, consulting and other expenditures. Additionally, amounts for the three and six months ended June 30, 2025 include $0.1 million and $0.4 million, respectively in non-recurring fair value adjustment of the Skuad contingent consideration liability discussed in Note 3 to our condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q.
(3) Changes in the estimated fair value of the warrants are recognized as gain or loss on the condensed consolidated statements of comprehensive income. The impact is removed from EBITDA as it represents market conditions that are not in our control.
(4) Represents non-recurring costs related to severance and other employee termination benefits.
Critical Accounting Policies and Estimates
For more information, see “Payoneer Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Form 10-K filed with the SEC on February 27, 2025.
Recent Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position, result of operations or cash flows is disclosed in Note 2 to our unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have operations both within the United States and globally, and we are exposed to market risks in the ordinary course of our business, including the effects of interest rate changes and foreign currency fluctuations. Information relating to quantitative and qualitative disclosures about these market risks is described below.
Interest Rate Sensitivity
The majority of our cash and cash equivalents and assets underlying customer funds were held in cash deposits and money market funds as of June 30, 2025, the fair value of which would not be materially affected by either an increase or decrease in interest rates, due mainly to the relatively short-term nature of these instruments. The fair value of our investments in term deposits and U.S. Treasury Securities, amounting to $1.8 billion, would be affected by changes in interest rates, and such changes could be material.
The Company has entered into interest rate floor contracts with respect to $1.9 billion in customer funds to limit the potential risk declining interest rates would have on our revenues from interest income, though as of the periods ended June 30, 2025 and 2024, respectively, a hypothetical 1% increase or decrease in interest rates could have a material effect on our revenues and earnings.
Foreign Currency Risk
While most of our revenue is earned in U.S. dollars, our foreign currency exposure includes currencies of the countries in which our operations are located, including operating expenses denominated in New Israeli Shekels. To reduce that risk, we invest in foreign currency forward contracts and net purchased options, which are accounted for as cash flow hedges.
A hypothetical 10% strengthening or weakening of the U.S. dollar against the New Israeli Shekel would have had a material impact on unrealized gains (losses) recognized in AOCI at June 30, 2025.
Our foreign currency exposure also includes currencies in which our customer funds are held, or in which they are withdrawn or utilized, and may be subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro, Japanese Yen, Chinese Yuan, Canadian Dollar, New Israeli Shekel, Philippine Peso, Indian Rupee, Mexican Peso, Pakistani Rupee, South Korean Won, Turkish Lira, New Zealand Dollar, Australian Dollar, British Pound, and Polish Zloty. As of the six months ended June 30, 2025 and 2024, respectively, a hypothetical 10% increase or decrease in current exchange rates could have a material impact on our financial results.
In addition, some of our services include the opportunity for Payoneer to generate revenues from foreign exchange transactions as part of the payment delivery process. Our ability to generate such revenues is partially dependent on external factors such as market conditions, applicable regulations and our ability to negotiate with third-party financial institutions. The impact of these efforts to optimize foreign exchange can be material to revenues and earnings.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2025. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective.
During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 1. LEGAL PROCEEDINGS
From time to time we are a party to various litigation matters incidental to the conduct of our business. Refer to Note 15 (Commitments and Contingencies) to the condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.
For more information on risks related to litigation, see the section titled “Risk Factors — General Risks Related to Payoneer — We may be subject to various legal proceedings which could materially adversely affect our business, financial condition or results of operations” in our Annual Report on Form 10-K, filed with the SEC on February 27, 2025.
ITEM 1A. RISK FACTORS
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K, filed with the SEC on February 27, 2025. However, we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The Company did not complete any unregistered sales of equity securities during the three months ended June 30, 2025.
Share Repurchase Activities
The following table provides information with respect to repurchases made by the Company during the three months ended June 30, 2025. All repurchases listed below were made in the open market.
Period
Total Number of Shares Purchased1
Average Price Paid Per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Progreams2
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs2
April 1, 2025 - April 30, 2025
1,121,787
$6.55
$ 79,426
May 1, 2025 - May 31, 2025
1,633,848
$6.98
$ 68,017
June 1, 2025 - June 30, 2025
2,056,531
$6.78
$ 54,070
4,812,166
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements
During the three months ended June 30, 2025, the following officer took the following actions with respect to trading arrangements for the sale of shares of our common stock:
Plans
Action
Date
Rule 10b5-1*
Non-Rule 10b5-1**
Number of Shares to be Sold
Expiration
Bea Ordonez, Chief Financial Officer
Adoption
June 3, 2025
X
100,000
September 30, 2026
*
Intended to satisfy the affirmative defense conditions of Rule 10b5-1(c)
Not intended to satisfy the affirmative defense conditions of Rule 10b5-1(c)
ITEM 6. EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
Exhibit No.
Description of Exhibit
3.1
Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on June 17, 2025)
3.2
Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed with the SEC on June 17, 2025)
10.1
Supplement and Amendment No. 2 to Transition Agreement with Scott Galit.*†
31.1
Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934.*
31.2
Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934.*
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
Filed herewith.
Furnished herewith.
†
Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish copies of any of the omitted schedules upon request by the Securities and Exchange Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant)
By:
/s/ John Caplan
John Caplan
Chief Executive Officer
(Principal Executive Officer)
/s/ Bea Ordonez
Bea Ordonez
Chief Financial Officer
(Principal Financial Officer)
Date: August 6, 2025