Payoneer Global Inc.

Good morning. Thank you for standing by. Welcome to Payoneer's third 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'll open the lines for your questions. As a reminder, this conference call is being recorded. I'd now like to turn this call over to Michelle Wang, Payoneer'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 measure 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 investors.pioneers.com. With that, I'd like to turn the call over to John to begin.

Good morning, everybody, and thank you for joining us today. Before we begin, I just want to say how deeply saddened we all are about the terrorist attacks in Israel last month and the ongoing war. The violence and loss of innocent lives has been shocking and heartbreaking. Our thoughts go out to all who are suffering. We continue to monitor the situation and our focus on supporting our colleagues and the Payoneer community in the region. We have donated $1 million via the Payoneer Foundation to support humanitarian relief efforts. She will provide a more detailed update on our business operations during her remarks, but I would be remiss if I didn't express how deeply and immensely proud I am of the determination and resilience our team has displayed in light of the current circumstances. Now, turning to our third quarter earnings, Payoneer delivered 31% revenue growth year over year and a 28% adjusted EBITDA margin. We are making progress executing our strategy and are confident about the pace of our efforts. We are diversifying toward higher take rate geographies acquiring more high-value ideal customer profiles, or ICPs, and enhancing our financial stack. As we shared at our inaugural Investor Day in September, Payoneer makes it easy for small and medium-sized businesses to access the global economy by providing them with the financial tools to compete and win in the markets they want to do business in. We are positioned to capture this $6 trillion opportunity and are laying the foundation for durable, profitable growth. We are focusing on our ICPs, building more products to cross-sell into our base of 2 million customers, and leveraging our scale, technology, and data to operate even more efficiently. Our comprehensive financial stack is a core driver of the opportunity ahead for Payoneer. We are penetrating the B2B and checkout markets, and cross-selling our cards. As we highlighted at Investor Day, we remain confident about the long-term potential of our B2B business and continue to gain traction in our prioritized service-oriented markets. Third quarter total B2B volume growth accelerated versus the second quarter and increased 1% year-over-year, or 6% excluding the impact of the customer terminations we made a year ago. We delivered improving B2B volume growth trends throughout the third quarter, and most recently generated 17% year-over-year volume growth in October. By region, in our priority service-oriented markets, we continue to see strong traction. APEC, Samia, Latin America B2B volume grew 23% year-over-year, and have an overall blended take rate of over 2%. In Samia, we've delivered year-over-year B2B volume growth of approximately 40% or greater each quarter of this year. We are penetrating the large programming, tech support, and consulting industries in the region. For example, we recently hosted a series of events in India with over 1,000 attendees to discuss the next decade of export growth and how our customers can build a brand as an entrepreneur looking to capture this full opportunity. In checkout, we grew volume by 50% quarter over quarter. Checkout is emerging as a part of our value proposition to increase ARPU, grow ICPs, and enable our customers to scale. As of the end of September, checkout was generating over $1 million in daily volume. We expect further momentum as we continue to enhance checkout's features and capabilities. For example, we launched our Shopify native capabilities for checkout, which should improve customers' payment conversion rates by providing a more seamless consumer shopping experience. We are also cross-selling our product stack to our existing customer base. Our customers are using Payoneer cards to manage their accounts payable. Card usage was nearly $1 billion in the third quarter, up 31% year over year. This represented 6% of total usage, and we believe there is significant room to grow that further. Let's turn now to our ICPs. Payoneer Group total active ICPs by 5% year-over-year in the third quarter. By region, we saw double-digit growth in our higher take rate regions, 13% ICP growth in APAC, 11% in CMEA, and 10% in Latin America. We grew our largest ICPs, or those who do more than $10,000 a month on average in volume, by 17% year-over-year. This segment represents approximately 10% of our overall ICPs, yet it contributes to over 50% of total Payoneer revenues. We continue to add new marketplace relationships to grow our ICPs. I'm excited to announce that we recently partnered with Etsy to service sellers in emerging markets. Our marketplace relationships are a key differentiator for Payoneer and contribute to the significant scale we've built in our banking infrastructure. The customers we acquire from marketplaces frequently expand to use our full financial stack, underscoring the significant value behind our focus on ICP. We continue to invest in our platform and product capabilities to drive greater ease, trust, and convenience for all of our customers. I'd like to highlight just a few of the new features we've launched recently, which we believe will drive greater retention, volume, and AP usage. We expanded the ecosystem of integrations of our financial stack and launched bank feed integrations with QuickBooks. This will reduce manual processes and improve AR collection efforts for our customers. We now enable customers to receive funds locally in New Zealand. We offer 10 local collection accounts for our customers, which helps remove the borders and complexities of doing business globally. We are integrating generative AI into our operations to improve our customers' experience and increase efficiency. To accelerate our B2B growth, we are enhancing our AP tools to better meet the needs of large service customers. Our customers can now add funds from their bank to their Payoneer account. This significant enhancement positions us to drive growth in our accounts payable tools independent of a customer's AR flow. We believe this is an important value proposition for customers who have global business expenses and payroll needs. We also enhance functionality around scheduling recurring payments and sending large groups of batch payments. These are features our largest, most sophisticated customers ask for and we're pleased that they can now make their workflows even more efficient leveraging the Payoneer stack. I'm also happy to announce that we have begun the rollout of a Payoneer Lite account for customers who have simple AP and AR needs. For example, those who use Payoneer only for receiving funds from a marketplace and withdrawing those funds to their local bank account. By limiting their eligibility for our full stack, we can reduce our cost to serve and work towards our long-term ambition of profitably serving every entrepreneur and business seeking to tap into the global economy. This is a part of our phased approach to implementing our customer segment-specific service and pricing strategy that we've spoken frequently about. In closing, we are executing against the strategic priorities that we articulated at the beginning of the year and at our recent investor day. We are enhancing our customers' value proposition, delivering strong growth and significant profitability, while investing in strategic long-term initiatives. Our strong results are a testament to our global team and their tireless efforts and dedication to our customers and our mission. They inspire me every day, and I'm proud of what Payoneer has achieved so far this year and excited about what's ahead. I'll now hand it over to Bea to discuss financial results and forward guidance in more detail.