Business Wire | Aug 16, 2021 06:55AM EDT

Paysafe Reports Second Quarter 2021 Results and Reaffirms 2021 Outlook

Aug. 16, 2021

LONDON--(BUSINESS WIRE)--Aug. 16, 2021--Paysafe Limited ("Paysafe" or the "Company") (NYSE:PSFE) (PSFE.WS), a leading specialized payments platform, today announced its financial results for the second quarter of 2021.

Second Quarter 2021 Financial Highlights(metrics compared to second quarter of 2020)

* Total Payment Volume of $32.3 billion, increased 41% * Revenue of $384.3 million, increased 13% * Net income attributable to the Company of $6.6 million, compared to net loss of $15.9 million * Adjusted EBITDA of $118.8 million, increased 8% * Reaffirmed 2021 full year outlook

Philip McHugh, CEO of Paysafe, stated, "We are pleased with the continued momentum Paysafe exhibited over the second quarter with impressive growth and several key wins across iGaming and other attractive digital commerce verticals, including crypto. Paysafe also continues to drive value across the other pillars of our strategy, including strong execution on our cost program and our recently announced acquisitions in Latin America, creating the largest open banking solution in the region. In total, we remain confident in our 2021 outlook and the years ahead as we continue to see the combination of our eCommerce gateway, digital wallets, online banking, and eCash solutions as a true differentiator in the market."

Strategic and Operational Highlights

* Excluding the direct marketing vertical and a 2020 business divestiture, growth from all other revenue was 23% compared to the prior year * Continued strong momentum in North American iGaming, including 48% revenue growth; piloting enhanced Skrill digital wallet for U.S. iGaming with eight major brands * Expanded digital commerce across attractive verticals including digital goods (e.g., eCash live on Microsoft Store on Xbox), crypto (e.g., added 22 new cryptocurrencies to Skrill digital wallet), financial services (multiple eCash wins) and travel (e.g., launched safeguarding solution for travel industry) * 68% volume growth in U.S. Acquiring compared to the prior year * Delivered on transformation initiatives, including $17 million of cost savings achieved year to date of approximately $30 million targeted for 2021 * Announced acquisitions of PagoEfectivo and SafetyPay, leading open banking solutions in Latin America * Appointment of Mark Brooker brings deep iGaming experience and further strengthens Paysafe's Board

Basis of Presentation

The financial information for the three and six months ended June 30, 2021 included in this press release reflect, and is based upon, information of Paysafe Limited after giving effect to the transaction with Foley Trasimene Acquisition Corporation II ("FTAC") completed on March 30, 2021 (as further discussed below under Reorganization and Recapitalization (the "Transaction"). The comparative financial information for the three and six months ended June 30, 2020 is based upon information of Pi Jersey Holdco 1.5 Limited (the "Accounting Predecessor"), prior to giving effect to the Transaction. Prior to the Transaction, Paysafe Limited had no material operations, assets or liabilities.

As of December 31, 2020, an out of period adjustment related to the period ended March 31, 2020 was identified and corrected for the impairment of certain Digital Wallet's intangible assets. This resulted in the overstatement of Intangible assets, net and understatement of Impairment expense on intangible assets, net of $21.4 million ($15.8 million net of tax), respectively, as of March 31, 2020. The prior period results have been revised to reflect the correction of this misstatement.

Second Quarter 2021 Summary of Consolidated Results

Three months ended Six months ended

June 30, June 30,

($ in thousands) 2021 2020 2021 2020(unaudited)

Revenue $ 384,343 $ 341,034 $ 761,767 $ 700,699

Gross Profit (excludingdepreciation and $ 228,565 $ 214,789 $ 454,952 $ 445,066 amortization)

Net income / (loss)attributable to the $ 6,597 $ (15,901 ) $ (54,050 ) $ (85,193 )Company



Adjusted EBITDA $ 118,804 $ 110,375 $ 232,034 $ 223,145

Adjusted EBITDA margin 30.9 % 32.4 % 30.5 % 31.8 %

Total revenue for the second quarter of 2021 was $384.3 million, an increase of 13%, compared to $341.0 million in the prior year. Growth was partially offset by an $8.8 million impact of a business divestiture (Pay Later) in October 2020. Excluding Pay Later, revenue increased 16%. Revenue performance compared to the prior year also reflects the impact of actions taken to improve the Company's overall risk/reward profile in certain markets and channels, specifically related to the exit of certain clients in the direct marketing vertical, which had an unfavorable impact on growth.

Excluding the divested business and the direct marketing vertical, growth from all other revenue was approximately 23% compared to the prior year, reflecting growth from all three segments. In eCash Solutions, growth was supported by extended COVID-19 lockdowns in Europe and an associated increase in online consumer spending. In Integrated Processing, growth was driven by the U.S. acquiring business, which continued to benefit from the macroeconomic recovery, as well as growth across integrated eCommerce, including iGaming and other specialized eCommerce verticals. Digital Wallet growth was driven by favorable foreign currency movement, a higher level of sporting events as well as crypto and trading activity, partially offset by the impact of targeted actions and country exits that occurred in 2020.

Net income attributable to the Company for the second quarter was $6.6 million, compared to a loss of $15.9 million in the prior year. Results included a fair value gain on the measurement of the warrant liability at period-end. This increase was partially offset by a $20.1 million increase in interest expense, reflecting the expense of capitalized debt fees as a result of debt repayment, as well as the impact of income tax expense of $16.7 million in the second quarter compared with an income tax benefit of $2.7 million in the prior year.

Adjusted EBITDA for the second quarter was $118.8 million, an increase of 8%, compared to $110.4 million in the prior year. Adjusted EBITDA margin decreased 150 basis points to 30.9%, reflecting business mix, including the headwind from the high margin direct marketing vertical, as described above. These impacts were partially offset by strong cost optimization. Additionally, the prior year margin benefited from temporary cost reductions related to the COVID-19 pandemic.

Second quarter net cash from operating activities was negative $7.7 million, compared to positive $123.5 million in the prior year. Free cash flow was $54.6 million, compared to $96.2 million in the prior year.

Summary of Segment Results

Three months ended Six months ended

June 30, YoY June 30, YoY

($ inthousands) 2021 2020 change 2021 2020 change(unaudited)

Revenue:

Integrated $ 191,242 $ 178,397 7.2 % $ 368,145 $ 364,614 1.0 %Processing

Digital $ 97,271 $ 91,108 6.8 % $ 192,194 $ 199,601 -3.7 %Wallet

eCash $ 103,876 $ 75,998 36.7 % $ 216,792 $ 145,067 49.4 %Solutions

Intersegment $ (8,046 ) $ (4,469 ) 80.0 % $ (15,364 ) $ (8,583 ) 79.0 %

Total $ 384,343 $ 341,034 12.7 % $ 761,767 $ 700,699 8.7 %Revenue



Adjusted EBITDA:

Integrated $ 45,764 $ 52,050 -12.1 % $ 90,691 $ 107,264 -15.5 %Processing

Digital $ 46,927 $ 40,305 16.4 % $ 84,700 $ 93,999 -9.9 %Wallet

eCash $ 43,033 $ 27,297 57.6 % $ 91,104 $ 50,164 81.6 %Solutions

Unallocated $ (16,920 ) $ (9,277 ) 82.4 % $ (34,461 ) $ (28,282 ) 21.8 %Corporate

TotalAdjusted $ 118,804 $ 110,375 7.6 % $ 232,034 $ 223,145 4.0 %EBITDA



AdjustedEBITDA margin:

Integrated 23.9 % 29.2 % (530) 24.6 % 29.4 % (480) Processing bps bps

Digital 48.2 % 44.2 % 400 44.1 % 47.1 % (300) Wallet bps bps

eCash 41.4 % 35.9 % 550 42.0 % 34.6 % 740 Solutions bps bps

TotalAdjusted 30.9 % 32.4 % (150) 30.5 % 31.8 % (130) EBITDA bps bpsmargin

Financial Guidance

($ in millions) Q3 2021 Full Year 2021

Revenue $360 - $1,530 - $375 $1,550

Gross Profit (excluding depreciation and $210 - $930 - $970amortization) $220

Adjusted EBITDA $95- $110 $480 - $495

Refinancing

In the second quarter Paysafe refinanced its existing senior secured loan facility totaling $2.1 billion with a combination of a new $1.1 billion senior secured loan facility and $0.9 billion of senior secured notes, as well as increased its revolving credit facility from $225 million to $305 million. The refinancing extended the Company's maturity profile, lowered its borrowing rate and improved Paysafe's financial flexibility.

Webcast and Conference Call

Paysafe will host a live webcast to discuss the results today at 8:30 a.m. (EDT). The webcast and supplemental information can be accessed on the investor relations section of the Paysafe website at ir.paysafe.com. An archive will be available after the conclusion of the live event and will remain available via the same link for one year.

Time Monday, August 16, 2021 at 8:30 a.m. EDT

Hosts Philip McHugh, Chief Executive Officer and Director

Izzy Dawood, Chief Financial Officer

Webcast Go to the Investor Relations section of the Paysafe website to listen and view slides

Dial in 877-407-3037 (U.S. toll-free)

215-268-9852 (International)

About Paysafe

Paysafe Limited ("Paysafe") (NYSE:PSFE) (PSFE.WS) is a leading specialized payments platform. Its core purpose is to enable businesses and consumers to connect and transact seamlessly through industry-leading capabilities in payment processing, digital wallet, and online cash solutions. With over 20 years of online payment experience, an annualized transactional volume of US $92 billion in 2020, and approximately 3,400 employees located in 12+ global locations, Paysafe connects businesses and consumers across 70 payment types in over 40 currencies around the world. Delivered through an integrated platform, Paysafe solutions are geared toward mobile-initiated transactions, real-time analytics and the convergence between brick-and-mortar and online payments. Further information is available at www.paysafe.com.

Reorganization and Recapitalization (the "Transaction")

On March 30, 2021, Paysafe completed the previously announced transaction with FTAC, a special purpose acquisition company, which resulted in Paysafe Limited acquiring, and becoming the successor to, the Accounting Predecessor. Simultaneously, it completed the merger with FTAC with an exchange of the shares and warrants issued by Paysafe Limited for those of FTAC. The acquisition was accounted for as a capital reorganization followed by the merger with FTAC, which was treated as a recapitalization. Following the transaction, both the Accounting Predecessor and FTAC are indirect wholly owned subsidiaries of Paysafe Limited. Upon completion of the Transaction, the common stock and warrants began trading on the New York Stock Exchange under the ticker symbols "PSFE" and "PSFE WS," respectively, on March 31, 2021.

Forward-looking Statements

This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Paysafe Limited's ("Paysafe," "PSFE" or the "Company") actual results may differ from their expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as "anticipate," "appear," "approximate," "believe," "budget," "continue," "could," "estimate," "expect," "forecast," "foresee," "guidance," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "seek," "should," "would" and variations of such words and similar expressions (or the negative version of such words or expressions) may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include, without limitation, Paysafe's expectations with respect to future performance.

These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially, and potentially adversely, from those expressed or implied in the forward-looking statements. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: cyberattacks and security vulnerabilities; complying with and changes in money laundering regulations, financial services regulations, consumer and business privacy and data use regulations or other regulations in Bermuda, the UK, Ireland, Switzerland, the United States, Canada and elsewhere; changes in our relationships with banks, payment card networks, issuers and financial institutions; risk related to processing online payments for merchants and customers engaged in the online gambling and foreign exchange trading sectors; risks related to our focus on specialized and high-risk verticals; risks related to becoming an unwitting party to fraud or be deemed to be handling proceeds of crimes being committed by customers; our ability to satisfy closing conditions related to acquisitions and risks associated with the integration of acquisitions; the effects of chargebacks, merchant insolvency and consumer deposit settlement risk; changes to our continued financial institution sponsorship; failure to hold, safeguard or account accurately for merchant or customer funds; risks related to the availability, integrity and security of internal and external IT transaction processing systems and services; failure of third parties to comply with contractual obligations; changes and compliance with payment card network operating rules; substantial and increasingly intense competition worldwide in the global payments industry; the COVID-19 pandemic, including the resulting global economic uncertainties; risks related to developing and maintaining effective internal controls over financial reporting; managing our growth effectively, including growing our revenue pipeline; any difficulties maintaining a strong and trusted brand; keeping pace with rapid technological developments; risks associated with the significant influence of our principal shareholders; terrorism; and other factors included in the "Risk Factors" in our Form 20-F and in other filings we make with the SEC, which are available at https://www.sec.gov. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in their expectations with respect thereto or any change in events, conditions, or circumstances on which any statement is based, except as required by law.

Paysafe Limited Condensed Consolidated Balance Sheets (unaudited)

($ in thousands) June 30, 2021 December 31, 2020

Assets

Current assets

Cash and cash equivalents $ 247,801 $ 387,616

Customer accounts and other restricted cash,net of allowance for credit losses of $4,428 1,249,268 1,376,236 and $4,096, respectively

Accounts receivable, net of allowance forcredit losses of $12,102 and $25,035, 129,708 117,410 respectively

Settlement receivables, net of allowance credit 170,890 223,083 losses of $4,571 and $5,859, respectively

Prepaid expenses and other current assets 72,780 63,252

Related party receivables - current 6,733 6,271

Contingent consideration receivable - current 2,964 26,668

Total current assets 1,880,144 2,200,536

Deferred tax assets 17,390 17,669

Property, plant and equipment, net 14,431 18,691

Operating lease right-of-use assets 35,574 40,187

Intangible assets, net 1,461,324 1,524,817

Goodwill 3,483,539 3,481,816

Contingent consideration receivable - - 125,107 non-current

Other assets - noncurrent 1,859 508

Total non-current assets 5,014,117 5,208,795

Total assets $ 6,894,261 $ 7,409,331



Liabilities and equity

Current liabilities

Accounts payable and other liabilities $ 211,433 $ 231,724

Short-term debt 6,280 15,400

Funds payable and amounts due to customers 1,404,975 1,552,187

Operating lease liabilities - current 8,635 8,969

Income taxes payable 7,355 8,161

Contingent consideration payable - current 10,495 5,820

Derivative financial liabilities, current 16,506 2,651

Total current liabilities 1,665,679 1,824,912

Non-current debt 2,114,909 3,246,871

Related party payables - non-current - 195,228

Operating lease liabilities - non-current 30,489 34,540

Deferred tax liabilities 121,352 122,519

Warrant liabilities 194,044 -

Derivative financial liabilities - non-current - 47,547

Liability for share-based compensation 12,153 -

Contingent consideration payable - non-current 4,142 3,742

Other liabilities - non-current 968 969

Total non-current liabilities 2,478,057 3,651,416

Total liabilities 4,143,736 5,476,328

Accumulated other comprehensive income / (loss) 2,039 (2,419 )

Shareholders' equity in the Company 2,612,840 1,921,705

Non-controlling interest 137,685 11,298

Total shareholders' equity 2,750,525 1,933,003

Total liabilities and shareholders' equity $ 6,894,261 $ 7,409,331

Paysafe Limited Condensed Consolidated Statements of Operations (unaudited)

For the three months ended June 30,

For the six months ended June 30,

($ in thousands)

2021

2020

2021

2020

Revenue

$

384,343

$

341,034

$

761,767

$

700,699

Cost of services (excluding depreciation and amortization)

155,778

126,245

306,815

255,633

Selling, general and administrative

113,037

104,414

307,035

221,921

Depreciation and amortization

70,114

67,492

135,576

136,991

Impairment expense on intangible assets

1,357

5,038

1,935

79,403

Restructuring and other costs

4,518

4,359

7,488

10,006

(Gain) / loss on disposal of subsidiary and other assets, net

(28

)

-

(28

)

261

Operating income / (loss)

39,567

33,486

2,946

(3,516

)

Other income / (expense), net

46,558

(9,498

)

79,083

(24,578

)

Interest expense, net

(62,650

)

(42,531

)

(125,019

)

(80,754

)

Income / (loss) before taxes

23,475

(18,543

)

(42,990

)

(108,848

)

Income tax expense / (benefit)

16,690

(2,714

)

10,754

(23,768

)

Net income / (loss)

$

6,785

$

(15,829

)

$

(53,744

)

$

(85,080

)

Less: net income attributable to non-controlling interest

188

72

306

113

Net income / (loss) attributable to the Company

$

6,597

$

(15,901

)

$

(54,050

)

$

(85,193

)

Net income / (loss)

$

6,785

$

(15,829

)

$

(53,744

)

$

(85,080

)

Other comprehensive income / (loss), net of tax of $0:

(Gain) / Loss on foreign currency translation

(12,956

)

4,601

(4,458

)

15,642

Total comprehensive income / (loss)

$

19,741

$

(20,430

)

$

(49,286

)

$

(100,722

)

Less: comprehensive income attributable to non-controlling interest

188

72

306

113

Total comprehensive income / (loss) attributable to the Company

$

19,553

$

(20,502

)

$

(49,592

)

$

(100,835

)

Paysafe Limited Condensed Consolidated Statements of Operations (unaudited)

For the three months For the six months ended ended June 30, June 30,

($ in thousands) 2021 2020 2021 2020

Revenue $ 384,343 $ 341,034 $ 761,767 $ 700,699

Cost of services(excluding 155,778 126,245 306,815 255,633 depreciation andamortization)

Selling, general and 113,037 104,414 307,035 221,921 administrative

Depreciation and 70,114 67,492 135,576 136,991 amortization

Impairment expense on 1,357 5,038 1,935 79,403 intangible assets

Restructuring and 4,518 4,359 7,488 10,006 other costs

(Gain) / loss ondisposal of (28 ) - (28 ) 261 subsidiary and otherassets, net

Operating income / 39,567 33,486 2,946 (3,516 )(loss)

Other income / 46,558 (9,498 ) 79,083 (24,578 )(expense), net

Interest expense, net (62,650 ) (42,531 ) (125,019 ) (80,754 )

Income / (loss) 23,475 (18,543 ) (42,990 ) (108,848 )before taxes

Income tax expense / 16,690 (2,714 ) 10,754 (23,768 )(benefit)

Net income / (loss) $ 6,785 $ (15,829 ) $ (53,744 ) $ (85,080 )

Less: net incomeattributable to 188 72 306 113 non-controllinginterest

Net income / (loss)attributable to the $ 6,597 $ (15,901 ) $ (54,050 ) $ (85,193 )Company



Net income / (loss) $ 6,785 $ (15,829 ) $ (53,744 ) $ (85,080 )

Other comprehensiveincome / (loss), net of tax of $0:

(Gain) / Loss onforeign currency (12,956 ) 4,601 (4,458 ) 15,642 translation

Total comprehensive $ 19,741 $ (20,430 ) $ (49,286 ) $ (100,722 )income / (loss)

Less: comprehensiveincome attributable 188 72 306 113 to non-controllinginterest

Total comprehensiveincome / (loss) $ 19,553 $ (20,502 ) $ (49,592 ) $ (100,835 )attributable to theCompany

Paysafe Limited Condensed Consolidated Statements of Cash Flow (unaudited)

Six Months Ended June 30,

($ in thousands)

2021

2020

Cash flows from operating activities

Net loss

$

(53,744

)

$

(85,080

)

Adjustments for non-cash items:

Depreciation and amortization

135,576

136,991

Unrealized foreign exchange loss / (gain)

2,245

(10,255

)

Deferred tax expense / (benefit)

4,714

(24,547

)

Interest expense, net

69,155

22,908

Share based compensation

84,117

-

Other (income) / expense, net

(75,901

)

10,459

Impairment expense on intangible assets

1,935

79,403

Allowance for credit losses and other

9,600

27,897

(Gain) / loss on disposal of subsidiary and other assets, net

(28

)

261

Non-cash lease expense

4,909

5,085

Movements in working capital:

Accounts receivable, net

(21,342

)

(29,457

)

Prepaid expenses, other current assets, and related party receivables

(9,282

)

4,048

Settlement receivables, net

44,113

33,155

Accounts payable, other liabilities, and related party payables

(21,139

)

(19,065

)

Funds payable and amounts due to customers

(116,268

)

(15,073

)

Income tax payable

(17,650

)

(1,688

)

Net cash flows from operating activities

41,010

135,042

Cash flows in investing activities

Purchase of property, plant & equipment

(1,169

)

(1,722

)

Purchase of merchant portfolios

(36,703

)

(3,241

)

Purchase of other intangible assets

(37,452

)

(28,034

)

Net cash outflow on acquisition of subsidiary

(23,531

)

-

Net cash flows used in investing activities

(98,855

)

(32,997

)

Cash flows from financing activities

Net cash inflow from reorganization and recapitalization

1,167,874

-

Payment of equity issuance costs

(149,496

)

-

Proceeds from loans and borrowings

2,112,816

235,435

Repayments of loans and borrowings

(3,267,269

)

(95,059

)

Payment of debt issuance costs

(1,068

)

Payments under derivative financial instruments, net

(31,515

)

(2,617

)

Cash outflow on foreign exchange forward contract

(6,504

)

Proceeds under line of credit

300,000

205,867

Repayments under line of credit

(300,000

)

(185,230

)

Contingent consideration received

7,942

-

Contingent consideration paid

(1,002

)

(748

)

Net cash flows (used in) / provided by financing activities

(168,222

)

157,648

Effect of foreign exchange rate changes

(40,716

)

2,638

(Decrease) / increase in cash and cash equivalents, including customer accounts and other restricted cash during the period

$

(266,783

)

$

262,331

Less: Net decrease in cash and cash equivalents classified within current assets held for sale

$

-

$

(1,422

)

Net (decrease) / increase in cash and cash equivalents, including customer accounts and other restricted cash during the year

$

(266,783

)

$

260,909

Cash and cash equivalents, including customer accounts and other restricted cash at beginning of the period (1)

1,763,852

1,382,361

Cash and cash equivalents at end of the period, including customer accounts and other restricted cash

$

1,497,069

$

1,643,270

Paysafe Limited Condensed Consolidated Statements of Cash Flow (unaudited)

Six Months Ended June 30,

($ in thousands) 2021 2020

Cash flows from operating activities

Net loss $ (53,744 ) $ (85,080 )

Adjustments for non-cash items:

Depreciation and amortization 135,576 136,991

Unrealized foreign exchange loss / (gain) 2,245 (10,255 )

Deferred tax expense / (benefit) 4,714 (24,547 )

Interest expense, net 69,155 22,908

Share based compensation 84,117 -

Other (income) / expense, net (75,901 ) 10,459

Impairment expense on intangible assets 1,935 79,403

Allowance for credit losses and other 9,600 27,897

(Gain) / loss on disposal of subsidiary and (28 ) 261 other assets, net

Non-cash lease expense 4,909 5,085

Movements in working capital:

Accounts receivable, net (21,342 ) (29,457 )

Prepaid expenses, other current assets, and (9,282 ) 4,048 related party receivables

Settlement receivables, net 44,113 33,155

Accounts payable, other liabilities, and (21,139 ) (19,065 )related party payables

Funds payable and amounts due to customers (116,268 ) (15,073 )

Income tax payable (17,650 ) (1,688 )

Net cash flows from operating activities 41,010 135,042

Cash flows in investing activities

Purchase of property, plant & equipment (1,169 ) (1,722 )

Purchase of merchant portfolios (36,703 ) (3,241 )

Purchase of other intangible assets (37,452 ) (28,034 )

Net cash outflow on acquisition of subsidiary (23,531 ) -

Net cash flows used in investing activities (98,855 ) (32,997 )

Cash flows from financing activities

Net cash inflow from reorganization and 1,167,874 - recapitalization

Payment of equity issuance costs (149,496 ) -

Proceeds from loans and borrowings 2,112,816 235,435

Repayments of loans and borrowings (3,267,269 ) (95,059 )

Payment of debt issuance costs (1,068 )

Payments under derivative financial (31,515 ) (2,617 )instruments, net

Cash outflow on foreign exchange forward (6,504 ) contract

Proceeds under line of credit 300,000 205,867

Repayments under line of credit (300,000 ) (185,230 )

Contingent consideration received 7,942 -

Contingent consideration paid (1,002 ) (748 )

Net cash flows (used in) / provided by (168,222 ) 157,648 financing activities

Effect of foreign exchange rate changes (40,716 ) 2,638

(Decrease) / increase in cash and cashequivalents, including customer accounts and $ (266,783 ) $ 262,331 other restricted cash during the period

Less: Net decrease in cash and cashequivalents classified within current assets $ - $ (1,422 )held for sale

Net (decrease) / increase in cash and cashequivalents, including customer accounts and $ (266,783 ) $ 260,909 other restricted cash during the year

Cash and cash equivalents, including customeraccounts and other restricted cash at 1,763,852 1,382,361 beginning of the period ^(1)

Cash and cash equivalents at end of theperiod, including customer accounts and other $ 1,497,069 $ 1,643,270 restricted cash

Six Months Ended June 30,

2021

2020

Cash and cash equivalents

$

247,801

$

502,560

Customer accounts and other restricted cash, net

1,249,268

1,140,710

Total cash and cash equivalents, including customer accounts and other restricted cash, net

$

1,497,069

$

1,643,270

Non-GAAP Financial Measures

To supplement the Company's condensed consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, the company uses non-GAAP measures of certain components of financial performance. This includes Gross Profit (excluding depreciation and amortization), Gross Profit Margin (excluding depreciation and amortization), Adjusted EBITDA, Adjusted EBITDA margin, Free cash flow and Free cash flow conversion, which are supplemental measures that are not required by, or presented in accordance with, accounting principles generally accepted in the United States ("U.S. GAAP").

Gross Profit (excluding depreciation and amortization) is defined as revenue less cost of services (excluding depreciation and amortization). Gross Profit Margin (excluding depreciation and amortization) is defined as Gross Profit (excluding depreciation and amortization) as a percentage of revenue. Management believes Gross Profit to be a useful profitability measure to assess the performance of our businesses and ability to manage cost.

Adjusted EBITDA is defined as net income/(loss) before the impact of income tax (benefit)/expense, interest expense, net, depreciation and amortization, share based compensation, impairment expense on intangible assets, restructuring and other costs, loss/(gain) on disposal of a subsidiaries and other assets, net, and other income/(expense), net. These adjustments also include certain costs and transaction items that are not reflective of the underlying operating performance of the Company. Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of Revenue. Management believes Adjusted EBITDA to be a useful profitability measure to assess the performance of our businesses and improves the comparability of operating results across reporting periods.

Free cash flow is defined as net cash flows provided by/used in operating activities, adjusted for the impact of capital expenditure, payments relating to restructuring and other costs, cash paid for interest and movements in customer accounts and other restricted cash. Capital expenditure includes purchases of property plant & equipment and purchases of other intangible assets, including software development costs. Capital expenditure does not include purchases of merchant portfolios. Free cash flow conversion is defined as free cash flow as a percentage of Adjusted EBITDA. Management believes free cash flow to be a liquidity measure that provides useful information about the amount of cash generated by the business.

Management believes the presentation of these non-GAAP financial measures, including Gross Profit, Gross Profit Margin, Adjusted EBITDA and Adjusted EBITDA margin, when considered together with the Company's results presented in accordance with GAAP, provide users with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of Paysafe's core operating performance. In addition, management believes the presentation of these non-GAAP financial measures provides useful supplemental information in assessing the Company's results on a basis that fosters comparability across periods by excluding the impact on the Company's reported GAAP results of acquisitions and dispositions that have occurred in such periods. However, these non-GAAP measures exclude items that are significant in understanding and assessing Paysafe's financial results or position. Therefore, these measures should not be considered in isolation or as alternatives to revenue, net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP.

You should be aware that Paysafe's presentation of these measures may not be comparable to similarly titled measures used by other companies. In addition, the forward-looking non-GAAP financial measures of Adjusted EBITDA and Gross Profit provided herein have not been reconciled to comparable GAAP measures due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations. We have reconciled the historical non-GAAP financial measures presented herein to their most directly comparable GAAP financial measures. A reconciliation of our forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures cannot be provided without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the adjusting items necessary for such reconciliations that have not yet occurred, are out of our control, or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.

Reconciliation of GAAP Net Income / (Loss) to Non-GAAP Adjusted EBITDA

Six Months Ended June 30,

2021 2020

Cash and cash equivalents $ 247,801 $ 502,560

Customer accounts and other restricted cash, 1,249,268 1,140,710 net

Total cash and cash equivalents, includingcustomer accounts and other restricted cash, $ 1,497,069 $ 1,643,270 net

Non-GAAP Financial Measures

To supplement the Company's condensed consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, the company uses non-GAAP measures of certain components of financial performance. This includes Gross Profit (excluding depreciation and amortization), Gross Profit Margin (excluding depreciation and amortization), Adjusted EBITDA, Adjusted EBITDA margin, Free cash flow and Free cash flow conversion, which are supplemental measures that are not required by, or presented in accordance with, accounting principles generally accepted in the United States ("U.S. GAAP").

Gross Profit (excluding depreciation and amortization) is defined as revenue less cost of services (excluding depreciation and amortization). Gross Profit Margin (excluding depreciation and amortization) is defined as Gross Profit (excluding depreciation and amortization) as a percentage of revenue. Management believes Gross Profit to be a useful profitability measure to assess the performance of our businesses and ability to manage cost.

Adjusted EBITDA is defined as net income/(loss) before the impact of income tax (benefit)/expense, interest expense, net, depreciation and amortization, share based compensation, impairment expense on intangible assets, restructuring and other costs, loss/(gain) on disposal of a subsidiaries and other assets, net, and other income/(expense), net. These adjustments also include certain costs and transaction items that are not reflective of the underlying operating performance of the Company. Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of Revenue. Management believes Adjusted EBITDA to be a useful profitability measure to assess the performance of our businesses and improves the comparability of operating results across reporting periods.

Free cash flow is defined as net cash flows provided by/used in operating activities, adjusted for the impact of capital expenditure, payments relating to restructuring and other costs, cash paid for interest and movements in customer accounts and other restricted cash. Capital expenditure includes purchases of property plant & equipment and purchases of other intangible assets, including software development costs. Capital expenditure does not include purchases of merchant portfolios. Free cash flow conversion is defined as free cash flow as a percentage of Adjusted EBITDA. Management believes free cash flow to be a liquidity measure that provides useful information about the amount of cash generated by the business.

Management believes the presentation of these non-GAAP financial measures, including Gross Profit, Gross Profit Margin, Adjusted EBITDA and Adjusted EBITDA margin, when considered together with the Company's results presented in accordance with GAAP, provide users with useful supplemental information in comparing the operating results across reporting periods by excluding items that are not considered indicative of Paysafe's core operating performance. In addition, management believes the presentation of these non-GAAP financial measures provides useful supplemental information in assessing the Company's results on a basis that fosters comparability across periods by excluding the impact on the Company's reported GAAP results of acquisitions and dispositions that have occurred in such periods. However, these non-GAAP measures exclude items that are significant in understanding and assessing Paysafe's financial results or position. Therefore, these measures should not be considered in isolation or as alternatives to revenue, net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP.

You should be aware that Paysafe's presentation of these measures may not be comparable to similarly titled measures used by other companies. In addition, the forward-looking non-GAAP financial measures of Adjusted EBITDA and Gross Profit provided herein have not been reconciled to comparable GAAP measures due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations. We have reconciled the historical non-GAAP financial measures presented herein to their most directly comparable GAAP financial measures. A reconciliation of our forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures cannot be provided without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the adjusting items necessary for such reconciliations that have not yet occurred, are out of our control, or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.

Reconciliation of GAAP Net Income / (Loss) to Non-GAAP Adjusted EBITDA

Three months ended Six months ended

June 30, June 30,

($ in thousands) 2021 2020 2021 2020

Net Income / (Loss) $ 6,785 $ (15,829 ) $ (53,744 ) $ (85,080 )

Income tax expense / 16,690 (2,714 ) 10,754 (23,768 )(benefit)

Interest expense, net 62,650 42,531 125,019 80,754

Depreciation and 70,114 67,492 135,576 136,991 amortization

Share based 3,276 - 84,117 - compensation expense

Impairment expense on 1,357 5,038 1,935 79,403 intangible assets

Restructuring and other 4,518 4,359 7,488 10,006 costs

(Gain) / loss ondisposal of (28 ) - (28 ) 261 subsidiaries and otherassets, net

Other (income) / (46,558 ) 9,498 (79,083 ) 24,578 expense, net

Adjusted EBITDA $ 118,804 $ 110,375 $ 232,034 $ 223,145

Adjusted EBITDA Margin 30.9 % 32.4 % 30.5 % 31.8 %

Reconciliation of Operating Cash Flow to Non-GAAP Free Cash Flow

Three months ended Six months ended

June 30, June 30,

($ in thousands) 2021 2020 2021 2020

Net cash (outflows)/inflows from operating $ (7,730 ) $ 123,463 $ 41,010 $ 135,042 activities

Capital Expenditure (23,215 ) (14,848 ) (38,621 ) (29,756 )

Cash paid for interest 19,011 19,560 55,864 57,846

Payments relating toRestructuring and other 725 7,282 4,180 12,124 costs

Movement in CustomerAccounts and other 65,805 (39,219 ) 100,691 5,369 restricted cash

Free Cash Flow $ 54,596 $ 96,238 $ 163,124 $ 180,625

Adjusted EBITDA 118,804 110,375 232,034 223,145

Free Cash Flow 46 % 87 % 70 % 81 %Conversion

Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (excluding depreciation and amortization)

Three months ended Six months ended

June 30, June 30,

($ in thousands) 2021 2020 2021 2020

Revenue $ 384,343 $ 341,034 $ 761,767 $ 700,699

Cost of services(excluding depreciation 155,778 126,245 306,815 255,633 and amortization)

Depreciation and 70,114 67,492 135,576 136,991 amortization

Gross Profit^ (1) $ 158,451 $ 147,297 $ 319,376 $ 308,075

Depreciation and 70,114 67,492 135,576 136,991 amortization

Gross Profit (excludingdepreciation and $ 228,565 $ 214,789 $ 454,952 $ 445,066 amortization)

(1)

Gross Profit has been calculated as revenue, less cost of services and depreciation and amortization. Gross profit is not presented within the Company's consolidated financial statements.

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CONTACT: Media Kate Aldridge Paysafe kate.aldridge@paysafe.com +44 750 079 7547

CONTACT: Investors Kirsten Nielsen Paysafe +1 (646) 901-3140 kirsten.nielsen@paysafe.com