Shares of Paysafe Limited (PSFE, Financials) fell 18.9% to $18.47 as of midday trading Monday after the company announced the sale of its direct marketing payment processing business and reported preliminary financial results for 2024.
Paysafe decided to let Joel Leonoff, the creator and former CEO of KORT Payments, pay for the company. Designed mostly as yearly earnout payments over five years, the deal is likely to conclude in thirty days. The business said the transaction fits its approach to maximize its portfolio and concentrate on fast-growing sectors. Paysafe has been cutting direct marketing, a business line under its Merchant Solutions division, and found that an expedited departure would best promote long-term shareholder value while minimizing disturbance to staff and consumers.
Paysafe projects $1.71 billion in full-year 2024 income, up 6% from the year before—or 7% when excluding disposed business. Compared with a net loss of $20 million in 2023, net income is projected to be between $19 million and $25 million. Excluding the divested company, adjusted EBITDA for the year is estimated to be $452 million, showing a 2% drop year over year but a 2% growth otherwise.
Revenue for the fourth quarter is projected to be $420 million, a 1% rise over the same quarter in 2023, or 4% minus the divested company. Excluding the disposed business, Adjusted EBITDA for the quarter is expected to drop 16% to $103 million but show a 1% increase. Rising credit losses of $23 million—up $16 million from the previous year—affected the quarter.
Paysafe projected income growth between 6.5% and 8% and modified EBITDA growth in the mid-teens percentage range for the first view of 2025. By the end of 2026, the business reiterated intentions to produce robust free cash flow and lower net leverage to 3.5x.
The board of the firm also approved a $70 million boost to its current share buyback program, thereby augmenting the overall available for repurchases to around $77 million. Subject to market circumstances and regulatory constraints, Paysafe said share repurchases might be carried out via open market acquisitions or privately negotiated agreements.
