Paysafe Limited

Ladies and gentlemen, greetings and welcome to the Paysafe first quarter 2026 earnings conference call. At this time, all participants are in the listen-only mode. A brief question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please signal the operator by pressing star and zero on your telephone keypad. As a reminder, This conference is being recorded. It is now my pleasure to introduce your host for today, Kirsten Nielsen, Head of Investor Relations. Please go ahead.

Thank you and welcome to Paysafe's earnings conference call for the first quarter of 2026. Joining me today are Bruce Lothers, Chief Executive Officer, and John Crawford, Chief Financial Officer. Before we begin, a reminder that this call will contain forward-looking statements and should be considered in conjunction with cautionary statements contained in our earnings release and the company's most recent SEC reports. These statements reflect management's current assumptions and expectations and are subject to factors that may cause actual results to differ materially from those forward-looking statements. You should not place undue reliance on these statements. Forward-looking statements during this call speak only as of the date of this call, and we undertake no obligation to update them. Today's presentation also contains non-GAAP financial measures. You can find additional information about these measures and reconciliations to the most directly comparable GAAP financial measures in today's press release and in the appendix of this presentation. which are available in the investor relations section of our website. With that, I'll turn the call over to Bruce.

Thank you, and good morning, everyone. Thank you for joining us today. We started off 2026 with a strong revenue growth of 10%, adjusted EBITDA growth of 4%, and 21% growth in adjusted EPS. We generated $67 million in unlevered free cash flow in the first quarter, an increase of 17% while improving our net leverage ratio to 5.2 times. Our strong top-line performance included strong sports betting growth during the NFL playoffs, some outperformance of the consumer business where active users reached 7.9 million, an increase of 9% year-over-year. Growth also benefited from favorable FX and another licensing deal to monetize our data. In Q1, our operating expenses grew 6% versus the prior year, excluding bad debt, largely due to FX. We also increased our investment in data infrastructure to support our AI initiatives and data business, as well as increased our marketing investment to accelerate growth. Additionally, we had increased in credit losses while converting to a new risk management platform. We believe these losses were contained over the course of a few weeks beginning in March and shouldn't have an impact on the business going forward as our models continue to mature. Later, John will discuss the revenue cadence and margin considerations for the year. But overall, we're pleased to start off on such a strong note. Our internal model for the year remains intact, supporting our confidence to reaffirm our growth outlook for 2026. I would also like to add another key indicator for the year for shareholders to focus on is our net leverage ratio, which should have a meaningful impact on our valuation over the next 24 months. First, I'll share a few highlights on our strategic progress for the quarter, starting with slide four. On the consumer side, we had a strong quarter with notable strength from Latin America across gaming and e-commerce. Our PaySafe wallet solution continued to see strong adoption across Europe. We're currently live in 18 countries, with new countries expected to launch later this year. PaySafe continues to advance our digital-first support model as a driver of customer experience and operating efficiency, and our virtual assistants play a key role in delivering intelligent, always-on support. In Q1, nearly 60% of all consumer contacts were resolved through digital assistance channels, representing a 25% increase compared to Q1 of 2025. Turning to the merchant side, e-commerce growth was 17% in the first quarter, led by iGaming, which grew 28%. The SMB business grew 2% in Q1, reflecting a modest improvement in attrition. Lastly, we continue to position Paysafe to support new AI native commerce channels, from conversational interfaces to autonomous purchasing. In Q1, we partnered with one of our enterprise clients, Norwegian Air, to demonstrate end-to-end agentic payment capabilities aligned at emerging industry protocols from partners Visa and MasterCard. With one integration, Paysafe can enable merchants to offer AI-powered commerce across ChatGPT, Claude, and Gemini, along with their own portal and apps. The merchant stays in control, plugging in through standard SDK, while PaySafe handles the payment infrastructure. Any AI assistant can use it, built on open standard MCP and Google's AP2 protocol. While still early, we see agentic commerce as a meaningful evolution and how transactions originate, and we are positioning PaySafe to participate at scale. It's also worth highlighting that our revenue per FTE increased 13% from a year ago, normalized for FX. This is a strong testament to the hard work we've already done around productivity, resource allocation, and building foundational intelligent systems. Now, let's double click on the growth drivers for the quarter, starting with Latin America on slide five. PaySafe offers a comprehensive network of alternative and local payment methods in Latin America. As the region's traditional cash culture rapidly evolves, digital wallets and account-to-account payments are becoming increasingly popular. Our refreshed consumer strategy is fueling user engagement, strengthened by targeted marketing and collaborative programs with key merchants. Our product strategy also continues to evolve with the unique needs of local consumers, with ongoing enhancements to our product lineup, including Pago Efectivo Wallet, which launched last year, bringing together our trusted local brand and Paysafe's wallet platform to deliver a streamlined, user-friendly experience. Lastly, our enterprise sales initiatives have been highly successful in driving strong cross-selling in the region. Our typical consumer in Latin America enjoys online gambling, video gaming, and e-sports. They need fast, secure, and affordable cash-to-digital solutions, along with quick access to their winnings. We also serve everyday consumers involved in e-commerce, from paying bills to enjoying entertainment services, many of whom prefer cash or non-bank payment options. Additionally, a large portion of our customers regularly send and receive remittances and engage in peer-to-peer transactions. While Q1 benefited from a favorable comparison to the previous year, we anticipate strong double-digit growth throughout 2026 as we continue to build momentum with our product innovations and go-to-market strategies. Moving to slide 6. PaySafe has a rich 30-year history built through acquisitions, but our story as a unified brand truly commenced in early 2024. Over the past two years, we have executed a multidimensional transformation, clarifying who we are and the value we deliver to our customers. This was a deliberate shift from a fragmented siloed approach to a focused intentional model, aligning our brand, product, and go-to-market around a cohesive narrative. Today, the alignment of our marketing and product strategy is delivering measurable commercial outcomes, particularly in our growth markets. In regions where we are making targeted investments, we are seeing strong performance across consumers, campaigns, and countries. We are building a repeatable, scalable model that positions us to accelerate growth even further across our priority markets. We are seeing this in Latin America, where active users reach 3.3 million in Q1, the highest level to date. This combination of local relevance, clear positioning, and targeted consumer activation is driving engagement reinforced through co-marketing programs with merchants. We're seeing it with our core wallet and cash solutions in high potential regions such as Spain and France, where our brand and product and customer position align most strongly. That same approach extends to PaySafe Wallet, which has had its strongest month on record in March. We believe this momentum represents the early stages of a much larger growth opportunity across the experience economy. AI is also a key driver of change in our marketing model, enabling us to scale through automated segmentation, smarter targeting, and a more personalized customer experiences while increasing execution speed. Turning to slide seven, iGaming continued to be a significant growth driver this quarter with global revenue increasing 20% year over year with strong growth across both segments in our core regions. We experienced robust activity during the NFL playoffs with outstanding operational performance during the Super Bowl and March Madness. Additionally, we announced a new partnership with MoonPay, enabling players to seamlessly deposit stablecoins and cryptocurrencies with iGaming and Daily Fantasy Sports brands in the U.S. Five operator pilots are currently underway, positioning us to meet evolving market demand. We also achieved a strong quarter for new bookings, securing agreements with both new and existing merchants. We extended our partnerships with U.S. clients such as Hard Rock and Golden Nugget to support their expansion into Canada. And we signed a new agreement with Cheddar, a popular platform for sports and culture predictions in North America. In the broader entertainment sector, Paysafe has become a headline sponsor for Big Clan, Germany's largest esports organization, and will also sponsor Red Bull's Fortnite and EA Sports FC tournaments in 2026. These high-profile events and partnership attract top content creators and elite competitive players supporting premium brand visibility for Paysafe's digital wallet solutions at the forefront of entertainment. I will wrap up here. As you can see, we've had a very active quarter with a strong start to 2026, with impressive growth across revenue, cash flow, and EPS. We're making good progress with our product initiatives, supported by our maturing sales motion and marketing investments. With that, I will turn over to John.