Nuvei Corporation

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Nuvei Corporation's first quarter 2022 earnings call. As a reminder, this conference call is being recorded. I'll now turn the conference over to Anthony Gerstein, Vice President and Head of Investor Relations for Nuvei. Please go ahead, sir.

Thank you, Operator, and good morning, everyone, and thank you for joining us. With me today are Philip Fair, Chair and CEO, and David Schwartz, CFO. As a reminder, this conference call is being recorded and webcast and is copyrighted property of New Bay. Any rebroadcast of this information in whole or in part without written consent of New Bay is prohibited. This morning, New Bay issued a press release announcing financial results for the three-month period ended March 31, 2022. The release as well as an accompanying presentation is available in the investor relations section of the company's website, nuvea.com, under events and presentations. During this call, we may make certain forward-looking statements within the meaning of the applicable securities laws. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements of the business or developments in Nuvea's industry could differ materially from the anticipated results, performance achievements, and developments expressed or implied by such forward-looking statements. Information about these factors that could cause actual results to differ materially from anticipated results or performance can be found in new base filings with the Canadian Securities Regulatory Authority and on the company's website. Our discussion today will include non-IFRS measures including adjusted EBITDA, adjusted net income, adjusted net income per share, and free cash flow. Management believes non-IFRS results are useful in order to enhance our understanding of our ongoing performance, but they are not a supplement to and should not be considered in isolation from or as a substitute for IFRS financial measures. Reconciliation of these measures to IFRS measures is available on our earnings release and MD&A. We'll open up the call to your questions after our prepared remarks. With that, I'd like to now turn the call over to Phil.

Thanks, Anthony, and thank you, everyone, for joining our call today. It's good to once again be sharing our progress with you following our inaugural Capital Markets Day back in March, where we had the opportunity to meet many of you in person. We're off to a strong start in 2022, delivering results ahead of our financial outlook, driven by the successful execution of our growth strategies. For the quarter, Total volume increased 42% to $29.2 billion, revenue increased 43% to $214.5 million, and adjusted EBITDA increased 40% to $91.6 million. Organic revenue growth, which excludes revenue from acquisitions completed in the trailing 12-month period, increased 32%. What's important to note is these excellent results include a revenue headwind of approximately $7 million from unfavorable changes in foreign exchange rates year over year. As a company, we are just getting started as our TAMs are large and growing with so much white space in each of our focus verticals and current geographies, as well as significant opportunities in our underpenetrated global geographies in North America, LATAM, and APAC for future growth. Looking at revenue by region in the first quarter, EMEA, North America, LATAM, and APAC represented 58%, 38%, 3%, and 1% of revenue, respectively. From a growth perspective, EMEA, North America, LATAM, and APAC increased by 73%, 13%, 25%, and 64%, respectively. We're experiencing sequential growth quarter-over-quarter of more than 100% in APAC and 6% in North America. It is worth reminding you that while our global e-commerce channel is the largest channel in EBA, LATAM, and APAC, it remains subscale in North America. As you know, we are making investments there, and the transformation in North America is well underway. For Perspective North America e-commerce direct revenue increased 71% to 27 million in this year's first quarter from last year's first quarter, and now represents approximately a third of the total North American revenue. As I will highlight in a minute, we see enormous opportunity converging in North America with recent customer wins and expansions, which will contribute to our growth in the upcoming quarters. Overall, The prospects for our business remain strong and we are well positioned for sustainable and profitable growth. Turning to new customers, the first quarter was notable for the number of new customer wins and increasing wallet share gains we achieved with existing customers. As you recall, growing with existing customers drives the majority of our in-year growth. while the onboarding of new customers contributes to our future growth as those relationships scale over time and open doors to further opportunities going forward as we help them grow their businesses globally. Meanwhile, our robust pipeline gives us good visibility for the year. Looking at our high growth focus verticals, in gaming, we're executing and on plan with our strategy for North America as the market continues to evolve, signing new flagship customers, including FanDuel, The Score, North Star Gaming, Hard Rock, and Desert Diamond. We also added the province of Ontario, the newest market to open in North America. We also expanded wallet share, adding further capabilities and geographic support with existing gaming customers like DraftKings, BetMGM, 888, Leo Vegas, Intane, Kazen Gaming, Betson, and WPlay. As you can see, Nuve is now integrated and supporting really the who's who of the industry and has made meaningful progress essentially with all the leading online gaming operators in North America as well as globally. It's really important to remember that each state and product is an additional implementation which creates ample opportunity to go state to state, country to country, and product solution to product solution, helping our customers grow. In travel, We added new customers, including international hotel operator Celina, supporting them globally in EMEA, LATAM, and North America with local payments and a vast number of capabilities. Luxury tour operator Scott Dunn, which we won through an RFP in the first quarter. Despigar, the largest online travel company in LATAM with operations in more than 20 countries and started using Nuve in Colombia in the first quarter. And wholesale travel company Dita Travel, a leading wholesaler and travel industry out of Asia. We also expanded support with existing customers, including Israeli national carrier El Al, which expanded our contract to support payments in North America and Israel, and BSP processing, online travel and leisure retail at lastminute.com, and we also expanded our partnership with Universal Air Travel Plan, UATP, by enabling payment services globally. In digital goods and services, we added Cabify, a leading ride-hailing company in LATAM, which started using Nuvei in Chile. Aircash, their first Croatian fintech, offering a digital wallet for money transfers, and Cellbrite, a global digital intelligence company. We also increased wallet share with Rappi, an on-demand delivery leader in LATAM, providing more of our solution offering in the region. In online retail, we accelerated new customer wins announcing agreements with Wix, global marketplace Sheen, and of course, the hot glue. And at the same time, we've expanded existing customer relationships with Ux, Net-a-Porter, Valentino, and Canadian online retailer, Hatley. In online and social video gaming, we added fast-growing video games marketplace, Anita, an expanded wallet share with Wargaming, and digital video game distributor, Valve. In digital assets, we added several new customers, including cryptocurrency exchange, Crypto.com, and Pionex, as well as several NFT exchanges and marketplaces, including Ulti Arena, Ixfin, and Maxar. We've also partnered with Ledger, the leading hardware wallet provider to enable direct on-ramps with the leading fiat funding options Nuve supports, allowing Ledger users to purchase cryptocurrencies through our vast supported payment rails. And in financial services, we added Da Vivienda, one of the largest banks in Colombia, which launched Portal de Pagos, a platform powered by Nuve, process collection and payments for more than 5,000 of their customers in Colombia. In addition, we also signed a payment orchestration agreement with one of the largest processors in Mexico. As you can see, the momentum in new client wins across all focus verticals is accelerating. As we discussed in our last earnings call, we recently launched a dynamic new global marketing campaign, the largest in the company's history, highlighted by our distinctive brand refresh. The campaign is designed to strengthen and support our brand awareness and lead generation by leveraging all channels to make an impact across our verticals and geographies. Because of the macro environment, we prudently deferred some of the planned marketing spend for Q1 into Q2. We're now on track, and those who haven't seen the company's rebrand, I encourage you to visit our corporate website to get a flavor. There are many exciting things to come. You will start to see some of the bigger elements of the advertising campaign on leading media outlets over the coming weeks. I'm really excited about the overall program. This is the first time we've undertaken a marketing campaign of this scale, and I look forward to sharing the results with you throughout the year. Now, turning to product innovation highlights. As a technology company, we continuously invest in product in order to drive more feature functionality with our modern and scalable solution stack. Adding innovative product capabilities always expands our tab and creates opportunities to expand wallet share with our customers. Most recently, we announced real-time deposits in the United States using the RTP network, the first in the industry to do so. Like with real-time withdrawals, which again, we were the first to offer last year, real-time deposits are game changers, enhancing the experience and proving market credibility and trust between customer and a merchant. Furthermore, It reduces fraud and lowers insufficient fund risk to the merchant. While relevant to all our verticals, real-time deposits are immediately advantageous to our online gaming customers in the United States as in-play betting occurs in real-time during live sporting events and players need to fund their accounts instantly and safely. As we stated before with respect to RTP and bank account-based payments and real-time payments, we believe there's a significant opportunity for growth as this is an increasing popular and accepted payment method allowing customers to purchase as simply as using a credit card and to receive both pay-ins and payouts instantly into their bank accounts 24-7, 365. With respect to adding to our capabilities in the first quarter, we added multiple new alternate payment methods, increasing our portfolio of alternate payment methods to over 550. expanding access, and allowing customers to accept more forms of regionally familiar and preferred digital payment methods. Specifically, in Europe, we added online-offline voucher solutions for customers in Romania, Greece, Cyprus, and Italy. In Asia, we enabled several local card payments and APNs in South Korea and added several essential payment methods such as net banking, Paytm, RuPay, PhonePeace, as well as other eWallet solutions in India. In Africa, we began offering bank transfers, vouchers, mobile money, local car payments, and eWallet solutions in Kenya, Rwanda, Nigeria, Ghana, Tanzania, Uganda, and Zambia. And in LATAM, we implemented our own direct integrations rather than using third parties to several APMs, including Pix and Boleto in Brazil, resulting in significantly higher conversion rates for our customers. And finally, we implemented UnionPay globally under our own acquiring license. In digital assets and cryptocurrency solutions, we launched in North America with localized payment acceptance, payout functionality, providing liquidity, risk management, KYC, risk scoring, and zero chargeback guarantee capabilities. We're really excited about what's happening with digital assets, and we believe we're well positioned for the industry with a seat at the table with our technology and growing list of customers as the industry continues to evolve. As of March 31st, the company supported 136 coins and 97 fiat currencies. In travel, we expanded our footprint, adding enhanced connectivity to BSP, which stands for Billing and Settlement Plan, a system designed to facilitate and simplify the selling, reporting, and remitting procedures of IATA-accredited passenger agents. BSP is a central point through which data and funds flow between travel agents and airlines. Rather than agents having individual relationships with each airline, all information is consolidated through BSP, and Nuvei can now process and accept payment of BSP through networks like UATP. Although travel remains our smallest vertical, it's having these types of capabilities that will help us grow especially as the category recovers. I'd like now to shift gears and talk about Nuvei's unique financial profiles. From a financial perspective, our consistent revenue growth, profitability, low capex yields exceptional cash flow generation. And when combined with our strong balance sheet, gives us incredible flexibility with respect to capital allocation and ample opportunity to create your other value. For the quarter, we generated free cash flow of nearly $83 million. Previously, we have discussed our disciplined approach towards capital allocation for continued growth. and outline the multiple alternatives we have at our disposal to drive shareholder value. This includes investing in organic growth, pursuing inorganic opportunities, and managing our capital structure, focusing on governance and stewardship of capital. With respect to organic growth, we continue to invest in the business for future growth. This includes our investment in product, people, and our recent marketing campaigns. When it comes to inorganic growth, you'll recall that M&A remains one of our key growth pillars focusing on capabilities, geography, and scale. However, we maintain a disciplined approach and have never subscribed to revenue without profitability model. In other words, we don't do financial engineering to simply buy short-term growth. We do believe, however, that our position, strength of our balance sheet, and cash flow generation affords us tremendous opportunities to pursue acquisitions. While to date we have focused mostly on smaller tuck-ins, the current backdrop of the market and compression of valuations is making for a really interesting environment, both for private and public companies, and we're ready and looking to execute on potential transformational deals in the future. Finally, with respect to capital structure, we have purchased approximately 1.6 million shares as part of the previously announced share buyback plan we communicated in March. For a total consideration of $99 million, as of April 30th, 2022. Looking at our priorities for 2022, our areas of focus are continuously expanding our commercial teams globally, expanding our geographic footprint as we look to continue growing at APAC, LATAM, and MENA, accelerating our global gaming footprint in which we believe we are the industry leader, building out a cart issuing product capabilities, enhancing our marketplace and platform capabilities, launching omni-channel capabilities in certain markets, offering single API, tokenization, and reporting to simplify multi-channel operations, and monetizing our banking-as-a-service solutions in EMEA. As you can see, we never sit still and we're constantly evolving to support the needs of our customers as they continue to grow globally. Before I turn the call over to Dave, who will provide more details on the financials, We're maintaining our full year outlook for 2022 and reiterating our medium and long-term targets previously provided, despite the current FX headwind and macro environment. Finally, I want to welcome all approximately 100 new teammates who join us in the first quarter from around the world. We're excited to have you part of the new bait team, which totaled 1,468 at March 31st. As usual, I also want to recognize all the fabulous and hard work of all our employees who contribute to the new wave success each and every day. In keeping with our recently implemented policy that each time we beat our outlook, our employees receive an additional two and a half days of vacation. You guys are rock stars and I'm grateful for your dedication and contribution to our mutual success. In closing, I'll reiterate how pleased I am with our results and the progress we're making across the entire company. With that, I'll now turn it over to Dave to discuss the financials.