Payoneer shares surge on optimistic guidance and $61 million acquisition of Skuad
Payoneer shares surge on optimistic guidance and $61 million acquisition of Skuad
The Israeli fintech company reported a 16% growth in revenue in the second quarter, but also a 29% decrease in net profit to $32.4 million. Payoneer also announced an acquisition that expands its services into global HR management.
Fintech company Payoneer recorded its sixth consecutive quarter of growth and is expanding into the field of HR management.
The Israeli company’s traditional activity in payment management and clearing for small and medium-sized businesses generated revenues of $239.5 million in the second quarter, reflecting a 16% growth compared to the corresponding quarter last year and a more modest 5% increase compared to the previous quarter.
Part of Payoneer’s income comes from clearing fees, including those on its credit cards, and a smaller portion from interest income on customer balances, which stood at $6 billion at the end of the second quarter, an increase of 9%. Payoneer’s corporate credit cards recorded expenses of $1.2 billion, a 33% increase compared to the corresponding quarter. Excluding interest income, Payoneer’s operations grew at a faster rate of 21%.
Against the backdrop of increasing revenues, Payoneer raised its annual revenue forecast to $920-$930 million and is expected to become another Israeli company with revenues approaching $1 billion.
However, Payoneer is still facing challenges on the bottom line. The company recorded a sharp 29% drop in net profit, amounting to $32.4 million. Compared to the previous quarter, this represents a slight improvement, indicating that while Payoneer shows consistent revenue growth, its operational performance remains more volatile.
About a year and a half ago, Payoneer’s senior management underwent changes, including the appointment of John Caplan as CEO, replacing Scott Galit, who held senior positions at the company for 12 years. The new management team decided to focus on larger and more profitable customers to improve the company’s efficiency and profitability. As part of this strategy, the company conducted a significant round of layoffs, reducing its workforce by 200 from its 2,000 employees. The current report indicates that the average revenue per customer increased significantly by 27% in the second quarter compared to the same period in 2023, before the strategic changes were implemented.
Payoneer is also embarking on an acquisition that will expand its services into payroll and HR management for global companies, complementing its existing payment management offerings. The company has acquired Skuad, a Singapore-based startup founded five years ago with 200 employees. Payoneer will pay $61 million in cash for the acquisition, with the amount potentially increasing by an additional $20 million depending on Skuad’s performance targets.
Payoneer is considered one of the few successful SPAC (Special Purpose Acquisition Company) issues, with real business operations rather than speculative promises. This is reflected in its market value, which, while lower than the $3.3 billion valuation at its summer 2021 IPO, currently trades at around $2 billion before Wednesday's jump.
