Payoneer Global Inc.

Previous wording

Our customers have trusted the Payoneer platform to process $19.7 billion and $18.5 billion in volume during the three months ended March 31, 2025 and 2024, respectively.

Current wording

Our customers have trusted the Payoneer platform to process $20.7 billion and $18.7 billion in volume during the three months ended June 30, 2025 and 2024, respectively, and $40.4 billion and $37.2 billion in volume during the six months ended June 30, 2025 and 2024, respectively.

Previous wording

As we increase the utility of the Payoneer Account, we have grown customer funds on our platform over a multi-year period to $6.6 billion as of March 31, 2025. During 2023, the U.S. Federal Reserve raised the target benchmark interest rate by 525 basis points to a high of 525 to 550 basis points by August 2023. Coupled with continued growth in customer balances, this drove a significant increase in the interest income revenue we earn on our customer funds. During 2024, the U.S. Federal Reserve cut the benchmark interest rate by 100 basis points to a target range of 425 to 450 basis points. As of the date of this Quarterly Report on Form 10-Q, there has been no change to the U.S. benchmark rates in the current year. While there remains uncertainty as to the timing and magnitude of future interest rate changes, we expect to see a negative impact on our revenue from declining interest rates over the medium-term. In response, we have invested a total of $1.8 billion of our customer funds in both available-for-sale debt securities and term deposits to reduce our sensitivity to declines in short term interest rates, and have purchased interest rate derivative contracts with respect to $1.9 billion in customer funds to provide a floor against the impact of interest rate declines below levels defined in the relevant interest rate derivative instruments.

Current wording

As we increase the utility of the Payoneer Account, we have grown customer funds on our platform over a multi-year period to $7.0 billion as of June 30, 2025. During 2023, the U.S. Federal Reserve raised the target benchmark interest rate by 525 basis points to a high of 525 to 550 basis points by August 2023. Coupled with continued growth in customer balances, this drove a significant increase in the interest income revenue we earn on our customer funds. During 2024, the U.S. Federal Reserve cut the benchmark interest rate by 100 basis points to a target range of 425 to 450 basis points. As of the date of this Quarterly Report on Form 10-Q, there has been no change to the U.S. benchmark rates in the current year. While there remains uncertainty as to the timing and magnitude of future interest rate changes, we expect to see a negative impact on our revenue from declining interest rates over the medium-term. In response, since 2024, we have been investing a total of $1.8 billion of our customer funds in both available-for-sale debt securities and term deposits to reduce our sensitivity to declines in short term interest rates, and have purchased interest rate derivative contracts with respect to $1.9 billion in customer funds to provide a floor against the impact of interest rate declines below levels defined in the relevant interest rate derivative instruments.

Previous wording

Since October 7, 2023, Israel has been at war with Hamas and Hezbollah, and exchanged attacks with Iran and other proxies of the Iranian regime. Despite the ongoing war, we have continued to operate our business and serve our customers around the world and, to date, our ability to support customers has not been materially impacted. We are monitoring the situation closely and benefit from our broad geographic footprint, partially outsourced operations model, and a robust business continuity plan. Additionally, our technology infrastructure has redundancy in place outside of Israel. Approximately 54% of our global employee base is located in Israel, including approximately 79% of our research and development resources. At this time, an insignificant portion of our Israeli workforce have been called to military reserve duty and we have contingencies in place to cover impacted roles and responsibilities.

Current wording

Since October 7, 2023, Israel has been at war with Hamas, intermittently with Hezbollah, and exchanged attacks with Iran and other proxies of the Iranian regime, including the “12-day war” in June 2025. Despite the ongoing war in the region, we have continued to operate our business and serve our customers around the world and, to date, our ability to support customers has not been materially impacted. We are monitoring the situation closely and benefit from our broad geographic footprint, partially outsourced operations model, and a robust business continuity plan. Additionally, our technology infrastructure has redundancy in place outside of Israel. Approximately 52% of our global employee base is located in Israel, including approximately 78% of our research and development resources. At this time, an insignificant portion of our Israeli workforce have been called to military reserve duty and we have contingencies in place to cover impacted roles and responsibilities.

Previous wording

The evolving conflict is likely to continue to impact economic activity in the region and could impact revenues from customers located in Israel. Our revenue derived from customers based in Israel was insignificant for the three months ended March 31, 2025 and is included within revenues from Europe, Middle East, and Africa within Note 16 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

The evolving conflict is likely to continue to impact economic activity in the region and could impact revenues from customers located in Israel. Our revenue derived from customers based in Israel was insignificant for the three and six months ended June 30, 2025 and is included within revenues from Europe, Middle East, and Africa within Note 16 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

During 2022, a geopolitical and armed conflict between Ukraine and Russia, which developed into an ongoing war, resulted in economic sanctions on Russia, Belarus, and certain territories in Ukraine. We provide services to customers in Ukraine and in jurisdictions that are or may be impacted by these economic sanctions. We have developed and implemented a robust transaction monitoring program designed to comply with imposed sanctions and to monitor the impact the conflict may have on our results of operations. During 2022, we ceased to provide services to customers in Russia and have limited our payment services to Belarus customers. Our revenues in Ukraine have remained relatively stable. For the three months ended March 31, 2025, Ukraine and Belarus, combined, accounted for less than 10% of our revenue, of which Belarus accounted for less than 1% of our revenue. Further escalation of the conflict may have a material effect on our results of operations.

Current wording

During 2022, a geopolitical and armed conflict between Ukraine and Russia, which developed into an ongoing war, resulted in economic sanctions on Russia, Belarus, and certain territories in Ukraine. We provide services to customers in Ukraine and in jurisdictions that are or may be impacted by these economic sanctions. We have developed and implemented a robust transaction monitoring program designed to comply with imposed sanctions and to monitor the impact the conflict may have on our results of operations. During 2022, we ceased to provide services to customers in Russia and have limited our payment services to Belarus customers. Our revenues in Ukraine have remained relatively stable. For the three and six months ended June 30, 2025, Ukraine and Belarus, combined, accounted for less than 10% of our revenue, of which Belarus accounted for less than 1% of our revenue. Further escalation of the conflict may have a material effect on our results of operations.

Previous wording

On April 9, 2025, Payoneer acquired 100% of the outstanding equity of Payeco Finance Information Holding Corporation, the parent company of EasyLink Payment Co., Ltd., a licensed China based payment service provider. The acquisition strengthens Payoneer’s global regulatory infrastructure and positions it to better serve China-based customers with enhanced and localized products and services. Refer to Note 23 above for further information on the acquisition.

Current wording

On April 9, 2025, Payoneer acquired 100% of the outstanding equity of Payeco Finance Information Holding Corporation, the parent company of EasyLink Payment Co., Ltd., a licensed China based payment service provider. The acquisition strengthens Payoneer’s global regulatory infrastructure and positions it to better serve China-based customers with enhanced and localized products and services. Refer to Note 3 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information on the acquisition.

Previous wording

Revenues were $246.6 million for the three months ended March 31, 2025, an increase of $18.4 million, or 8%, compared to the prior-year period. This increase in revenue was comprised of an increase in SMB revenue, including $14.1 million from B2B SMBs, $7.9 million from SMBs that sell on marketplaces, and $3.5 million from SMBs selling DTC. This growth in SMB revenue was driven by continued adoption of our high value services, certain monetization initiatives, and ongoing growth in high take rate regions. This increase in revenues was partially offset by a decrease of $7.3 million in interest income earned on customer balances resulting from modestly lower interest rates despite an increase in customer balances held on our platform compared to the prior year period.

Current wording

Revenues were $260.6 million and $507.2 million for the three and six months ended June 30, 2025, an increase of $21.1 million and $39.5 million, or 9% and 8%, respectively, compared to the prior-year period. This increase in revenue was comprised of an increase in SMB revenue, including $15.7 million and $29.8 million from B2B SMBs, $8.5 million and $16.4 million from SMBs that sell on marketplaces, and $4.0 million and $7.5 million from SMBs selling DTC, for the three and six months ended June 30, 2025, respectively. This growth in SMB revenue was driven by continued adoption of our high value services, certain monetization initiatives, and ongoing growth in high take rate regions. This increase in revenues was partially offset by a decrease of $7.5 million and $14.8 million in interest income earned on customer balances for the three and six months ended June 30, 2025, respectively, resulting from modestly lower interest rates, and partially offset by an increase in customer balances held on our platform compared to the prior year period. Transaction costs

Previous wording

Transaction costs were $39.3 million for the three months ended March 31, 2025, an increase of $5.4 million, or 16%, compared to the prior-year period, driven by an increase of $4.3 million in bank and processor fees and $1.4 million in card network fees. The increase in transaction costs outpaced the increase in total volume due to shift toward products with a higher cost per transaction.

Current wording

Transaction costs were $79.9 million for the six months ended June 30, 2025, an increase of$9.0 million, or 13%, compared to the prior-year period, driven by an increase of $9.5 million in bank and processor fees and $3.1 million in card network fees offset by improvements in chargebacks and operational losses of $2.1 million. The increase in transaction costs outpaced the increase in total volume due to shift toward products with a higher cost per transaction.

Previous wording

Other operating expenses were $41.7 million for the three months ended March 31, 2025, an increase of $1.4 million, or 3%, compared to the prior-year period, driven by an increase of $1.1 million in information technology expenses.

Current wording

Other operating expenses were $84.4 million for the six months ended June 30, 2025, an increase of $2.8 million, or 3%, compared to the prior-year period, driven primarily by an increase of $3.2 million in information technology expenses partially offset by a decrease of $1.5 million in reserves related to ongoing regulatory matters and a decrease of $1.3 million in third party contractor expenses.

Previous wording

Research and development expenses were $37.3 million for the three months ended March 31, 2025, an increase of $5.2 million, or 16%, compared to the prior-year period, driven by an increase of $3.8 million in employee compensation, benefits and other employee-related expenses, which were impacted by our acquisition of Skuad and also included certain restructuring charges, as well as an increase of $1.1 million in third-party contractor and consulting expenses.

Current wording

Research and development expenses were $37.4 million for the three months ended June 30, 2025, an increase of $9.8 million, or 36%, compared to the prior-year period, driven by an increase of $6.3 million in employee compensation, benefits and other employee-related expenses in line with an increase in employee headcount, an increase of $2.4 million in third-party contractor expenses and an increase of $1.1 million in information technology expenses.

Previous wording

Sales and marketing expenses were $54.7 million for the three months ended March 31, 2025, an increase of $4.8 million, or 10%, compared to the prior-year period, driven by an increase of $2.5 million in employee compensation, benefits and other employee-related expenses in line with an increase in employee headcount and an increase of $2.2 million in expenditures on certain direct marketing efforts.

Current wording

Sales and marketing expenses were $57.3 million for the three months ended June 30, 2025, an increase of $6.7 million, or 13%, compared to the prior-year period, driven primarily by an increase of $3.0 million in employee compensation, benefits and other employee-related expenses in line with an increase in employee headcount and an increase of $2.8 million in expenditures on certain marketing efforts.

Previous wording

General and administrative expenses were $29.9 million for the three months ended March 31, 2025, an increase of $5.7 million, or 24%, compared to the prior-year period, driven by an increase of $5.1 million in employee compensation, benefits and other employee-related expenses primarily due to an increase in employee headcount and an increase of $1.2 million in consulting expenses, partially offset by a decrease of $1.8 million in M&A related expenses.

Current wording

General and administrative expenses were $66.9 million for the six months ended June 30, 2025, an increase of $16.6 million, or 33%, compared to the prior-year period, driven predominately by an increase of $10.6 million in employee compensation, benefits and other employee-related expenses primarily due to an increase in employee headcount and an increase of $1.8 million in consulting expenses.

Previous wording

Depreciation and amortization expenses were $14.4 million for the three months ended March 31, 2025, an increase of $5.0 million, or 53%, compared to the prior-year period, mainly driven by an increase in amortization of internal use of software.

Current wording

Depreciation and amortization expenses were $15.6 million and $29.9 million for the three and six months ended June 30, 2025, an increase of $4.8 million and $9.8 million, or 45% and 49%, respectively, compared to the prior-year period, mainly driven by an increase in amortization of internal use of software.

Previous wording

Financial expense, net was $1.6 million for the three months ended March 31, 2025, a change of $6.1 million, or 134%, compared to the prior-year period, primarily driven by a $4.0 million reduction in corporate interest income as a result of lower average invested balances and lower interest rates, as well as a $1.8 million gain from the change in fair value of the warrant liability in the prior year period which did not recur.

Current wording

Financial expense, net was $1.8 million for the six months ended June 30, 2025, a decrease of $8.3 million, or 127%, compared to the prior-year period, primarily driven by a $8.1 million reduction in corporate interest income as a result of lower average invested balances and lower interest rates, as well as a $2.8 million gain from the change in fair value of the warrant liability in the prior year period which did not recur. These effects were offset by a $3.6 million decrease in the exchange rate loss during the current period compared to the prior period.

Previous wording

Income tax expense was $7.2 million for the three months ended March 31, 2025, a decrease of $6.7 million, or 48%, compared to the three months ended March 31, 2024. This decrease was primarily driven by a decrease of $5.8 million in our U.S. federal current income tax expense as compared to the prior year period, which is due to a significant benefit under U.S. tax law for income earned from foreign customers.

Current wording

Income tax expense was $10.4 million for the three months ended June 30, 2025, a decrease of $5.5 million, or 35%, compared to the three months ended June 30, 2024. This decrease was primarily driven by a decrease of $6.7 million in our U.S. federal current income tax expense as compared to the prior year period, which is due to a significant benefit under U.S. tax law for income earned from foreign customers. Additionally, the decrease in income tax expense compared to the prior year period is due to a favorable impact from deferred tax benefits in the U.S. of $2.3 million, primarily related to stock-based compensation and capitalization of research and development costs. These decreases were offset by a $5.1 million increase in the provision for uncertain tax positions.

Previous wording

As of March 31, 2025, we had $524.2* *million of cash and cash equivalents.

Current wording

As of June 30, 2025, we had $497.1* *million of cash and cash equivalents.

Previous wording

On May 7, 2023, our Board of Directors authorized a stock repurchase program that provides for the repurchase of up to $80.0 million of our common stock, including any applicable excise tax. On December 7, 2023, the Board of Directors authorized an amendment to the program to increase the authorized amount of repurchases to an aggregate amount not to exceed $250.0 million, including the amount that remained available as of December 7, 2023 to repurchase common stock under, but not any prior repurchases effected pursuant to, the previous authorization, and any applicable excise tax. The amended authorization expires on December 31, 2025.

Current wording

On May 7, 2023, our Board of Directors authorized a stock repurchase program that provides for the repurchase of up to $80.0 million of our common stock, including any applicable excise tax. On December 7, 2023, the Board of Directors authorized an amendment to the program to increase the authorized amount of repurchases to an aggregate amount not to exceed $250.0 million, including the amount that remained available as of December 7, 2023 to repurchase common stock under, but not any prior repurchases effected pursuant to, the previous authorization, and any applicable excise tax. Subsequent to June 30, 2025, our Board of Directors amended the existing repurchase authorization to increase the authorized amount of repurchases to up to $300 million, which amount includes amounts that remained available to repurchase common stock under, but not any prior repurchases effected pursuant to, the existing repurchase program and any applicable excise tax. The effective date of the amended authorization was August 6, 2025, and the amended authorization expires on December 31, 2027. Refer to Note 13 for further information on the share repurchase amendment.

Previous wording

During the three months ended March 31, 2025, we repurchased 1,880,309* shares of our common stock for $17.0 million. As of March 31, 2025, a total of $86.8 *million remained available for future repurchases of our common stock under the program.

Current wording

During the six months ended June 30, 2025, we repurchased 6,692,475* shares of our common stock for $49.7 million, of which $0.7 million was not yet settled at period end. As of June 30, 2025, a total of $54.1 *million remained available for future repurchases of our common stock under the program in place at June 30, 2025.

Previous wording

Net cash provided by operating activities was $53.7 million for the three months ended March 31, 2025, an increase of $14.2 million compared to $39.5 million for the three months ended March 31, 2024.

Current wording

Net cash provided by operating activities was $124.4 million for the six months ended June 30, 2025, an increase of $43.5 million compared to $80.9 million for the six months ended June 30, 2024.

Previous wording

Impact of changes in operating assets and liabilities - $18.5 million year over year increase to operating cash flows

Current wording

Impact of changes in operating assets and liabilities - $53.3 million current period over prior period increase to operating cash flows

Previous wording

During the three months ended March 31, 2025, cash flows related to Capital advance receivables increased $17.8 million compared to the prior year period, driven by higher originations in late 2024 compared to 2023 which were collected in the current year period.

Current wording

During the six months ended June 30, 2025, cash flows related to Capital advance receivables increased $28.4 million compared to the prior year period, driven by an increase in collections of $41.1 million which outpaced increased originations of $12.7 million during the period compared to the previous period.

Previous wording

These increases were partially offset by cash flows from Other assets, which decreased $5.1 million compared to the prior year, primarily due to interest receivable from certificates of deposits that was not accrued in the prior period. Additionally, cash flows related to Other payables and trade payables decreased $4.6 million and $4.3 million, respectively, in each case compared to the prior year period, due to changes in timing of payments relative to period cut-off.

Current wording

Cash flows from Other current assets increased $24.2 million relative to the prior year period, driven by a one-time cash tax refund and timing of payments relative to period cutoff. Additionally, cash flows related to Other payables and Trade payables increased $6.7 million and $1.3 million, respectively, in each case compared to the prior year period, due to changes in timing of payments relative to period cut-off.

Previous wording

Impact of non-cash items - $4.1 million year over year increase to operating cash flows

Current wording

Impact of non-cash items - $11.6 million current period over prior period increase to operating cash flows

Previous wording

Current year period operating cash flows include, higher non-cash addbacks to net income to arrive at operating cash flows compared to prior year, consisting primarily of a $5.0 million increase in depreciation and amortization expense and a $3.7 million increase in stock-based compensation expense.

Current wording

Current year period operating cash flows include, higher non-cash addbacks to net income to arrive at operating cash flows compared to prior year, consisting primarily of a $9.8 million increase in depreciation and amortization expense and a $10.1 million increase in stock-based compensation expense.

Previous wording

The overall increase to operating cash flows from non-cash items was partially offset by higher non-cash reductions to net income compared to prior years, consisting primarily of a decrease of $3.4 million in the amount of the addback due to the effect of exchange rate changes on cash and cash equivalents and a $2.1 million increase in interest not paid in cash and amortization of discount on investments in debt securities.

Current wording

The overall increase to operating cash flows from non-cash items was partially offset by higher non-cash reductions to net income compared to prior years, consisting primarily of a decrease of $8.2 million in the amount of the addback due to the effect of exchange rate changes on cash and cash equivalents and a $4.3 million increase in deferred taxes.

Previous wording

Impact of net income - $8.4 million year over year decrease to operating cash flows

Current wording

Impact of net income - $21.3 million current period over prior period decrease to operating cash flows

Previous wording

The overall increase in operating cash flows was offset by a decrease in net income of $8.4 million in the three months ended March 31, 2025 compared to the prior year period, which was primarily a result of $27.5 million of growth in operating expenses which outpaced $18.4 million of growth in revenue, as discussed in the Results of Operations section above.

Current wording

The overall increase in operating cash flows was offset by a decrease in net income of $21.3 million in the six months ended June 30, 2025 compared to the prior year period, which was primarily a result of $64.8 million of growth in operating expenses which outpaced $39.5 million of growth in revenue, as discussed in the Results of Operations section above.

Previous wording

Net cash used in investing activities was $48.0 million for the three months ended March 31, 2025, a decrease of $66.2 million compared to net cash used in investing activities of $114.1 million for the three months ended March 31, 2024.

Current wording

Net cash used in investing activities was $133.5 million for the six months ended June 30, 2025, a decrease of $831.8 million compared to net cash used in investing activities of $965.3 million for the six months ended June 30, 2024.

Previous wording

Net cash used in financing activities was $402.4 million for the three months ended March 31, 2025, a decrease of $118.7 million compared to net cash used in financing activities of $521.1 million for the three months ended March 31, 2024. Current period cash used in financing activities reflects the $385.8 million decline in customer balances since the beginning of the period which was $83.8 million lower than the $469.6 million decline in the prior year period. Additionally share repurchases were $33.2 million lower than in the prior year period.

Current wording

Net cash provided by financing activities was $2.2 million for the six months ended June 30, 2025, a decrease of $456.6 million compared to net cash used in financing activities of $443.5 million for the six months ended June 30, 2024. Current period cash used in financing activities reflects the $47.5 million increase in customer balances since the beginning of the period which was $401.0 million lower than the $353.4 million decline in the prior year period. Additionally share repurchases were $48.9 million lower than in the prior year period.

Previous wording

Volume grew 7% for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, driven by a combination of continued strong growth in volume from B2B SMBs, as well as growth in volumes from SMBs selling on marketplaces, and in volumes processed for enterprise partners, including in the travel segment.

Current wording

Volume grew 11% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, and 9% for the six months ended June 30, 2025 when compared to the six months ended June 30, 2024, respectively, driven by a combination of continued growth in volumes from SMBs selling on marketplaces, strong growth in volume from B2B SMBs, and in volumes processed for enterprise partners, including in the travel segment.

Previous wording

(2)Amounts relate to M&A-related third-party fees, including related legal, consulting and other expenditures. Additionally, amounts for the three months ended March 31, 2025 include $0.3 million in non-recurring fair value adjustment of the Skuad contingent consideration liability discussed in Note 3 to our condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q.

Current wording

(2)Amounts relate to M&A-related third-party fees, including related legal, consulting and other expenditures. Additionally, amounts for the three and six months ended June 30, 2025 include $0.1 million and $0.4 million, respectively in non-recurring fair value adjustment of the Skuad contingent consideration liability discussed in Note 3 to our condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q.