Payoneer Global Inc.

Good morning. Thank you for standing by. Welcome to Pioneer's second quarter 2023 earnings conference call. At this time, all lines have been placed on mute to prevent any background noise. Following the speaker's remarks, we will open the lines for your questions. As a reminder, this conference call is being recorded. I would now like to turn the call over to Michelle Wang, Pioneer's VP of Investor Relations.

Thank you, Operator. With me on today's call are Payoneer's Chief Executive Officer, John Kaplan, and Payoneer's Chief Financial Officer, Bea Ordonez. Before we begin, I'd like to remind you that today's call may contain forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those set forth in our filings with the SEC, which are available in the Investor Relations section of Payoneer.com. Actual results may differ materially from any forward-looking statements we make today. These forward-looking statements speak only as of today, and the company does not assume any obligation or intent to update them except as required by law. In addition, today's call may include non-GAAP measures. These measures should be considered in addition to and not instead of GAAP financial measures. Reconciliation to the nearest GAAP financial can be found in today's earnings press release, which is available on our website. Additionally, please note we have posted an earnings presentation supplement alongside our earnings press release. on investor.payoneer.com. With that, I'd like to turn the call over to John to begin.

Good morning, and thank you all for joining us today to discuss our second quarter 2023 results. On today's call, I will discuss our business results, including a progress report on our strategic priorities. We will then cover our second quarter financial results and updated 2023 guidance. Global commerce, the export of goods and services is more prevalent, digital, and borderless than ever. In a recent survey of thousands of global SMBs, we learned that they expect that by 2025, they will double their rate of revenue growth with nearly two-thirds of those revenues coming from outside their domestic market. At the same time, they plan for nearly half of their vendors to be abroad as well. These businesses must manage accounts receivable and payable flows across multiple countries, currencies, and jurisdictions. Only Payoneer offers them the ability to do so in one centrally managed account that enables them to transact globally. Payoneer generated 40% year-over-year revenue growth in the second quarter. We diversified toward higher take rate geographies acquired more ICPs, increased our revenue from non-ICPs, and earned interest income from customer balances held on our network. Adjusted EBITDA of $56 million nearly quadrupled year over year and represented a 27% adjusted EBITDA margin. We once again grew revenue in each of our six regions by 25% or greater year over year. In China, we generated over 50% year over year revenue growth in Q2, driven by net customer growth, increasing ARPU, and improving trends with large e-commerce marketplaces. China remains a large market for us. And while we are focused on capturing the enormous promise of other emerging fast-growing markets, we anticipate that China will continue to be a major contributor to our business for the long term. China is the world's largest exporter and second largest importer behind the U.S. We intend to maintain and expand our strong position in that market. That is why we announced this morning that we have signed an agreement to acquire a licensed China-based payment service provider. The acquisition is subject to regulatory approval and customary closing conditions. Once closed, we expect it will strengthen our regulatory infrastructure and position us to better serve our customers with enhanced and localized products and services and acquire new customer segments that we are not serving today. We look forward to working with our stakeholders in China to facilitate the closing of the transaction over the next few quarters. While our B2B payments volume declined 2% year over year, B2B volume grew 12% year over year, excluding the proactive customer terminations we made last year. We have strong traction for our B2B business in service-oriented markets, such as APAC, Samia, and Latin America. We are driving the fastest customer growth in these regions. And in total, across the three, B2B volumes grew by 29% year over year. We are excited about the growth opportunities within B2B. For example, We generated 45% year-over-year volume growth in Samia. We are successfully acquiring customers in the IT programming and services sector. Growth is driven by India and the UAE and is due to both increasing wallet share with customers and early momentum acquiring larger customers. We are also supporting new industry verticals in B2B. For example, within Europe, we recently began serving agricultural exporters representing $30 billion of potential annual volume. We continue to invest and focus our product roadmap to better serve the more complex needs of this customer segment and to position Payoneer to win in B2B over the long term. Let's turn now to our progress in acquiring our ideal customer profiles. Kenya grew total active ICPs by 6% year-over-year in the second quarter. Our region, we saw 13% growth in each of APEC, CMEA, and Latin America. Total ICP growth was 12%, excluding Europe, where we continue to see the impact of the war in Ukraine on year-over-year growth rates. We grew our largest ICPs, or those who do more than $10,000 a month on average in volume, by 18% once again. This segment represents approximately 10% of our overall ICPs, and it contributes to over 50% of total paying year revenues. In addition to ICP acquisition, we have experiments underway to increase ICP ARPU. Near term, we continue to drive strong adoption of our virtual commercial card, which has a roughly 2.5% take rate. 4% of our customers use their Payoneer virtual commercial card in the second quarter, up 100% versus a year ago. We are also adjusting pricing across different customer segments and routes. and we continue to grow and scale our working capital business. We increased originations from first-time users by 80% in Q2 as we expanded our coverage of eligible customers. Longer term, ARPU will be driven by increased product penetration and an overall mixed shift towards our larger customers. We continue to make progress on our multi-year platform transformation. We remain focused on developing our scaled cloud-based platform, including our new onboarding functionality. In the last 90 days, I'm pleased that we are accelerating our launch of new product features as we make it even easier and faster for our customers to send and receive payments. We have improved functionality around scheduling payments. We are now providing our U.S. B2B customers with real-time availability of funds via open banking integration. For our commercial card, we have increased functionality around spending limits and monitoring. This will make it easier for customers who issue multiple cards within their organization to track their expenses, and we believe will lead to greater usage and increase customer penetration over time. More broadly, for our working capital business, we announced last week the acquisition of Spot, a real-time data platform. We will use this technology to enhance our underwriting capabilities to reduce risk and drive origination volumes. And in our merchant services business, we released a new merchant of record service for initial group of goods selling ICPs. This functionality delivers material uplift in acceptance rates for our customers selling goods cross-border, while capturing significant greater yield and therefore economics on volumes processed for Payoneer. The Payoneer team is focused. We are executing against the strategic priorities we articulated at the beginning of the year. We are enhancing our customer value proposition and accelerating core growth. We are investing in strategic, long-term initiatives that we believe will deliver durable, profitable growth. I'll now hand it over to Bea to discuss financial results and forward guidance in more detail.