Payoneer Global Inc.

Ladies and gentlemen, thank you for standing by. My name is Demi, and I'll be your conference operator today. At this time, I would like to welcome you to the Pioneer fourth quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. Thank you. I would now like to turn the call over to Michelle Wang. Please go ahead.

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 website. Additionally, please note we have posted an earnings presentation supplement alongside our earnings press release on investor.pioneer.com. All comparisons made on today's call are on a year-over-year basis unless otherwise noted. With that, I'd like to turn the call over to John to begin.

Good morning, everyone, and thank you for joining us. Payoneer is the financial operating system for global commerce. We have a 20-year head start building assets, network effects, and brand that are highly differentiated and difficult to replicate. We have proven product market fit, deep, global distribution, and the payment and regulatory infrastructure to support profitable growth at scale. We are capturing share in a large and growing market and continue to strengthen our strategic advantages every quarter. First, Payoneer has global scale that eliminates the friction of growing cross-border. We processed over $87 billion in volume across 190 countries and territories in 2025. When a manufacturer in Vietnam pays a supplier in Mexico, when a business in India wants to sell on Japan's e-commerce marketplaces, or a software developer in Dubai invoices a client in Germany, we're there. Payoneer supports cross-border commerce across every SMB use case. Second, trust and safety built over decades. We are regulated in key markets around the world and have built robust compliance infrastructure based on years of experience navigating the challenges associated with cross-border payments, particularly those into and out of emerging markets. Third, we are driving growing profitability through disciplines. We've increased adjusted EBITDA X interest from negative $25 million in 2023 to positive $40 million in 2025, while investing in innovation and strengthening our capabilities. We're entering 2026 with conviction around our margin expansion opportunity. We are orienting Payoneer towards an AI-first strategy, which will reshape our customer experience, operations, and cost structure. The impact is tangible across every major function. Engineering is shipping code meaningfully faster. Our go-to-market team is using AI for scoring leads, improving funnel efficiency, and increasing ROI. And in our customer support and compliance teams, AI agents are creating a flywheel effect, better customer outcomes, greater efficiency for our teams, and a structurally lower cost base. Our leading position in cross-border B2B payments uniquely positions us as stable coins and AI fundamentally reshape global money movement. We are the beneficiaries of this innovation and have the assets, scale, and market position to capture outsized value. Before I dive into our record 2025 results, I'd like to spend a moment on our 2026 outlook. We plan to deliver significant core profitability expansion. We expect to more than double core adjusted EBITDA to $90 million at the midpoint. Revenue X interest of $900 to $940 million represents 12% growth at the midpoint. This accounts for finishing the work we started in 2025 to optimize our checkout business and our customer portfolio. These actions are expected to reduce our 2026 revenue growth by approximately 300 basis points, but will lead to higher margins and a stronger, healthier customer portfolio. We plan to exit the year with mid-teens growth and mid-teens core margins. Now, turning to our results, 2025 was a pivotal year for Payoneer. We increased the utility we provide to our customers, made deliberate choices about where to focus in a dynamic environment, and executed and innovated with discipline. The results, they speak for themselves. We grew revenue X interest 14%. B2B revenue grew twice as fast at 28% as we take share from traditional financial institutions. B2B now represents 30% of our revenue X interest, up from 20% in 2023. We strengthened and expanded our ecosystem of enterprise relationships, including with Airbnb, Upwork, TikTok Live, Alibaba, MercadoLibre, and Best Buy. 21% ARPU expansion at interest, driven by upmarket momentum and multi-product adoption. Nine basis points of SMB take rate expansion. $7.9 billion of customer funds held in Payoneer accounts, up 13% year over year, and outpacing volume growth. We have hedging strategies in place to reduce interest rate sensitivity. We have locked in a substantial portion of interest income for 2026, 2027, and 2028, regardless of the interest rate environment. We improved our unit economics and are driving meaningful efficiencies in our operations. Other operating expenses, which include customer onboarding, support, and KYC costs, were down 3% in 2025. While at the same time, we grew volume and revenue, mix shifted to more complex verticals, such as B2B, and added to our regulatory licenses. Total adjusted EBITDA of $272 million, a 26% margin, was up year over year as we unlocked substantial operating leverage and powered through a $25 million headwind from declining interest income. We delivered $40 million of adjusted EBITDA X interest, nearly triple versus 2024. We generate significant free cash flow of $146 million, representing nearly 200% free cash flow conversion. These aren't just great numbers. They reflect a healthy, strong business that is positioned for long-term value creation. We believe our current share price does not fully reflect the strength of our balance sheet, the durability of our cash flows, or our long-term growth opportunities, including those from Adjantic Commerce and Stablecoin. We've continued to align our capital allocation with our conviction in the intrinsic value of our business. In 2025, we stepped up our buybacks, repurchasing $175 million of shares, including $80 million in Q4 alone. We plan to continue buying our shares at or close to these levels. Since we began our transformation in 2023, we've prioritized unlocking Payoneer's full potential with a sharp focus on profitability. At our inaugural investor day, We presented the first phase of our strategy and disclosed metrics that focused on, quote, ideal customer profiles, unquote, customers that were profitable based on a simple minimum volume threshold. In the two years since, we have delivered meaningful impact. Today, we're proud to share that all customer cohorts are profitable. We've grown our ICP base by 8% and increased ARPU by more than 50%. We've delivered a 17% CAGR in our revenue X interest, and we've significantly expanded core profitability and demonstrated consistent 25% adjusted EBITDA margins in the declining interest rate environment. We're now entering the next stage of our transformation. We're moving further upmarket to focus on larger, more sophisticated customers. Customers receiving tens of thousands or even hundreds of thousands of dollars a month on Payoneer's platform are generally scaled, often multi-entity, multi-geography businesses. These businesses have proven business models, complex cross-border needs, and potential for significant wallet share expansion. They also demonstrate significantly higher ARPU, retention, and product adoption characteristics. We have strong product market fit and proven ability to serve these businesses. For example, customers with $600,000 or more of annual average volume in their Payoneer account now represent 42% of our revenue, and they were our fastest-growing segment in 2025, driving 60% of our overall growth. The UAE is a great example of a region where our upmarket strategy is taking hold. The city of Dubai is one of five major global business hubs. Its economy is projected to double over the next decade, driven by service exports. And 20,000 foreign-owned companies registered there in 2025 alone. Payoneer is successfully acquiring and serving these cross-border businesses, which is driving our strong results. Our business from customers in the UAE generated over $1 billion in volume, and $15 million of revenue in 2025. Revenue is growing nearly 50% year-over-year, driven by large IT and digital marketing agencies. To support our upmarket strategy, we are making targeted investments to expand and enhance our value prop. For example, we recently launched expanded capabilities in Mexico and Indonesia. We plan to expand our product offerings in India, the world's fastest-growing large economy, supported by our recent, in principle, license authorization. We recently acquired Boundless, which deepens our workforce management capabilities for global teams. And we're adding more partners to expand working capital and credit solutions, enabling customers to access the capital they need to invest in inventory, marketing, and expansions. We will press our near-term advantages and make bold bets to position ourselves at the center of ongoing innovation in the payment space. One of these big bets is stablecoin. We believe Payoneer is uniquely positioned to bridge traditional finance and blockchain-based payments. Here's why. We have world-class last-mile infrastructure in emerging markets. supported by the robust and complex regulatory framework necessary to operate compliantly at scale. We have deep compliance expertise to onboard and support customers in markets that are complex to serve. We have longstanding, trusted relationships with millions of cross-border SMBs around the world. We are partnering with Bridge, a Stripe company, to launch stablecoin capabilities. We launched a wait list a few weeks ago and have brought our first customers live. What's most exciting about this is that Stablecoin is TAM expanding for Payoneer. We are seeing meaningful interest from larger, scaled businesses that fit the upmarket profile we're pursuing, and we are seeing new customers come to Payoneer for these features across a diverse set of markets and industries. As part of our broader Stablecoin strategy, We've also just this week applied to establish an uninsured national trust bank in the United States. We expect this will enable Payoneer to seamlessly integrate stablecoin capabilities within our broader ecosystem. We plan to unlock utility for our customers, remove complexity and barriers to entry, and open up additional addressable markets for a new breed of digitally native global businesses. We are on a multi-year journey to position Payoneer as a category-defining company in cross-border commerce. We've demonstrated that we have the right team, a strong position in the market, and a track record of successful execution. I'm proud of our team, grateful to our customers, and excited for our future. Thank you all for your confidence and support of Payoneer. I'll now turn it over to Bea to discuss our financial results and 2026 guidance in more detail.