Payoneer Global Inc.

Good morning. Thank you for standing by. Welcome to Payoneer's second quarter 2025 earnings conference call. At this time, all lines have been placed on mute to prevent any background noise. Following the speakers 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, Payoneer's Vice President of Investor Relations. You may begin.

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, which are subject to risks and uncertainties. For more information, please refer to 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 materials, which are available on our Web site. Additionally, please note we have posted an earnings presentation supplement alongside our earnings press release on .Payoneer.com. All comparisons made on today's call are on a -over-year basis, unless otherwise noted. With that, I'd like to turn the call over to John to begin.

Good morning, everyone. Thank you for joining us. Today I'll walk you through our strong second quarter results. We are executing against the significant opportunity in front of us and building the financial stack for cross-border commerce. After that, we will take you through the financials and our reinstated full-year 2025 guidance. Let's start with the big picture. Payoneer is the global payment solution for entrepreneurs and SMBs who power international commerce. These are manufacturers, exporters, agencies, creators, and service providers from every corner of the world. They need to invoice and collect payments from customers globally, manage multiple currencies, pay suppliers and employees, and access capital, all while navigating local regulations and legacy banking rails. That's where Payoneer comes in. We are their trusted partner, delivering innovation at the intersection of global trade and digital finance. Q2 was another strong quarter for Payoneer. Our strategy is working. We're growing and unlocking meaningful operating leverage. In Q2, we delivered record quarterly revenue, ex-interest income, up 16% -over-year ahead of our medium-term target. We delivered 13,000 net new ICPs, up 2% -over-year, led by tier one markets, which account for over 60% of our revenue. We delivered ARPU expansion of 21% ex-interest income, our fourth consecutive quarter above 20%, a sign of strong product adoption, smart pricing, and a deliberate move upmarket. We delivered $66 million of adjusted EBITDA, a 25% margin. We delivered over $15 million of adjusted EBITDA ex-interest income for the first six months of 2025, greater than what we delivered for the full year of 2024. And our latest guidance at the midpoint implies we expect to more than triple our adjusted EBITDA ex-interest in 2025. We're strengthening the fundamentals of our business, improving earnings quality, and building a platform designed for durable, compounding growth. Global commerce is resilient, and it continues to grow and evolve. Our customers are adapting to shifting trade flows, and they're choosing Payoneer to help them grow. In China, we see long-term momentum and growth in cross-border commerce, and we have built a highly differentiated business over two decades serving this market. Our e-com customers are focused on both continuing to serve the U.S. while increasing their investment in new markets. In Q2, approximately a third of our China revenue came from sellers selling to -U.S. markets. We are helping customers expand globally through our Green Channel product, supporting their ad spend with our virtual card, and providing access to trusted tax and compliance partners. We don't just move money. We help our customers scale. B2B remains one of the fastest-growing and most exciting parts of our business. We grew B2B revenue 37% in Q2, led by our largest customer segments. We continue to shift towards larger, multi-entity customers who have more complex needs. In APAC, Latem, and EMEA, we delivered -20% volume growth and continued take-rate expansion. We have strong product market -and-knee service-oriented markets, and our customers are rewarding us with their loyalty. At the same time, our China B2B business grew mid-single digits in Q2. We continue our methodical approach to unlocking the -trillion-dollar China B2B opportunity. We are strengthening our financial stack to better serve the needs of our customers and drive our retention and ARPU. We have expanded our FX capabilities, launched smarter invoicing, and deepened our ERP and third-party integrations. We are delivering more automation, removing friction, and increasing product engagement and adoption. In Q2, we launched a strategic partnership with Stripe to expand our global checkout footprint and enhance the product's capabilities. We are combining their -in-class technology with our local market reach, expertise, and customer relationships. This partnership improves our operating efficiency and lets us stay focused on our customer to provide them with an integrated financial stack. I'd like to share an example of a customer that is leveraging Payoneer as their global payment infrastructure to streamline their operations. Brand 501 is a Korean beauty company with entities across Asia and the U.S. They are using Payoneer to consolidate their payments from major marketplaces, wholesale B2B sales, and via their own website for -to-consumer sales through Payoneer checkout. They also use our cards for operational expenses such as advertising and subscription services. By choosing Payoneer, they are able to eliminate inefficiencies in their operations and are thriving in a competitive, fast-growing industry. That's the kind of customer journey we're enabling every day. We're excited about the momentum we're seeing in stablecoin and blockchain-enabled payment technology innovation and adoption. We believe that increased regulatory clarity, including as the result of the enactment of the Genius Act, will unlock opportunity for Payoneer and provide a framework to drive stablecoin adoption, including by global businesses. Payoneer has unique assets that can help position us as a critical part of the infrastructure for this rapidly developing technology. We have distribution, deep customer relationships, and connectivity to last-mile bank infrastructure around the globe. We enable money movement across 7,000 trade corridors and allow our global customers to transact and hold multiple currencies within a single ecosystem. In pursuit of this opportunity, we're actively exploring enablement of stablecoin functionality for our customers. For example, we're allowing our customers, who already rely on us for business-grade accounts, to send and receive stablecoin along with our full suite of AP and AR products. We're looking at using our world-class last-mile infrastructure to help businesses off-ramp stablecoin globally into the local currency that they need for their operation. We are also investing in scale and talent to drive and accelerate our innovation, serve our customers better, and drive greater efficiency. We recently announced that we are opening a new technology hub in Gorgon, India, one of the world's fastest-growing economies and home to deep engineering expertise.