Nuvei Corporation (“Nuvei” or the “Company”) (Nasdaq: NVEI) (TSX:
NVEI), tomorrow’s payment platform, today reported its financial
results for the three months ended March 31, 2022.
“We had a strong start to the year, with
financial results that exceeded our financial outlook for the
quarter,” said Philip Fayer, Nuvei’s Chair and CEO. “Total
volume(1), revenue, and Adjusted EBITDA(2) grew 42%, 43%, and 40%,
respectively over the first quarter of 2021, as we continued
advancing our strategic initiatives. It was an excellent quarter
despite revenue headwind of $7 million from unfavorable changes in
foreign exchange rates year-over year. The prospects for our
business are strong and we are very well-positioned for sustainable
and profitable growth. We remain intently focused on our key
priorities and reiterate both our financial outlook for 2022 and
our medium and long-term targets.”
Financial Highlights for the Three
Months Ended March 31, 2022
- Total volume(1)
increased 42% to $29.2 billion from $20.6 billion
- eCommerce
represented 88% of total volume
- Revenue
increased 43% to $214.5 million from $150.5 million
- The increase was
impacted unfavorably by changes in foreign exchange rates
year-over-year of approximately $7 million
- Organic revenue
growth(2) was 32% with Organic revenue(2) increasing to $198.0
million from $150.5 million
- Net income
decreased by $23.3 million to $4.5 million compared to net income
of $27.8 million, primarily due to a $33.1 million increase in
share-based payments to employees who joined the Company as part of
acquisitions completed in 2021 and other employee incentive
grants
- Adjusted
EBITDA(2) increased 40% to $91.6 million from $65.5 million
- Adjusted net
income(2) increased 35% to $69.1 million from $51.2 million
- Net income per
diluted share was $0.02 compared to net income per diluted share of
$0.19
- Adjusted net
income(2) per diluted share was $0.46 compared to $0.35
- Cash flow from operating activities
increased by 23% to $65.7 million from $53.4 million
- Free cash flow(2) increased by 36%
to $82.5 million from $60.7 million
- Cash balance of
$735.0 million at March 31, 2022 compared to $748.6 million at
December 31, 2021, mainly due to the repurchase and
cancellation of approximately 1.2 million Subordinate Voting Shares
for total consideration, including transaction costs, of $74.8
million.
Operational Highlights
- Revenue for the
first quarter of 2022 increased 73% to $124.6 million in Europe,
the Middle East and Africa (“EMEA”), increased 13% to $80.7 million
in North America, increased 25% to $6.4 million in Latin America
(“LATAM”), and increased 64% to $2.9 million in Asia Pacific
(APAC). North America eCommerce direct revenue increased 71% to $27
million in this year’s first quarter from last year’s first
quarter, representing approximately a third of total North America
revenue.
- Nuvei added
multiple new alternative payment methods (“APMs”) increasing the
Company’s portfolio of APMs to more than 550 at the end of the
first quarter, expanding access and allowing its customers to
accept more forms of regionally familiar and preferred digital
payment methods.
- Nuvei added new
customers across its target high-growth verticals and regions with
notable wins including: FanDuel, The Score, NorthStar Gaming, Hard
Rock, Desert Diamond Casino, Selina, Scott Dunn, Despegar,
Didatravel, Cabify, Aircash, Cellbrite, WIX, SHEIN, The Hut Group
(THG), Eneba, Davivienda, Crypto.com and Pionex. The Company also
expanded wallet share with existing customers including: BetMGM,
888, DraftKings, LeoVegas, Entain, Kaizen Gaming, Betsson, Wplay,
El Al, lastminute.com, Rappi, Yoox (Net-a-Porter), Valentino,
Hatley, Wargaming, and VALVe.
- Nuvei expanded
its digital assets and cryptocurrency solutions in North America
with localized payment acceptance and payouts functionality
providing liquidity, risk management, know-your-customer, risk
scoring and zero chargeback guarantee capabilities. The Company
supported 136 coins and 97 fiat currencies as at March 31,
2022.
- The Company
added 100 new employees in the first quarter of 2022, ending with
1,468 employees at March 31, 2022 compared with 1,368 employees at
December 31, 2021.
- The Company
expanded its Board of Directors to six members with the appointment
of financial services and technology veteran, Samir Zabaneh, as an
additional independent director.
- Nuvei purchased
and canceled 1,208,766 Subordinate Voting Shares (“Shares”) for a
total consideration, including transaction costs of $74.8 million
in the first quarter at an average price of $61.82 per share in
connection with its previously announced NCIB allowing it to
purchase up to 6,617,416 of its Shares. From April 1 to April 30,
2022, the Company purchased an additional 359,983 Shares at an
average price of $67.03 for a total consideration of $24.1 million.
In total, the Company has purchased and canceled 1,568,749 shares
for $98.9 million at an average price of $63.04 through April 30,
2022.
- Nuvei completed
its distinctive brand refresh ahead of launching its largest-ever
marketing campaign (started in May 2022) designed to build greater
brand recognition and awareness, and drive new business.
Financial
Outlook(3)
For the three months ending June 30, 2022 and
the fiscal year ending December 31, 2022, Nuvei anticipates Total
volume(1), Revenue and Adjusted EBITDA(2) to be in the ranges
below. The updated financial outlook and specifically the Adjusted
EBITDA(2) reflects the Company’s strategy to accelerate its
investment in distribution, marketing, innovation, and
technology.
The financial outlook is fully qualified and
based on a number of assumptions and subject to a number of risks
described under the heading “Forward-Looking Information” of this
press release. Nuvei's outlook also constitutes "financial outlook"
within the meaning of applicable securities laws and is provided
for the purposes of assisting the reader in understanding the
Company's financial performance and measuring progress toward
management's objectives and the reader is cautioned that it may not
be appropriate for other purposes.
|
Three months ending June 30, |
Year ending December 31, |
|
2022 |
2022 |
|
Forward-looking |
Forward-looking |
(In U.S. dollars) |
$ |
$ |
Total volume(1) (in billions) |
29 - 30 |
127 - 132 |
Revenue (in millions) |
217 - 223 |
940 - 980 |
Adjusted EBITDA(2) (in millions) |
88 - 91 |
407 - 425 |
Growth
Targets(4)
Nuvei’s medium-term(5) annual growth targets for
Total volume(1) and revenue, as well as its long-term target for
Adjusted EBITDA margin(2), are shown in the table below. These
medium(5) and long-term(5) targets should not be considered as
projections, forecasts or expected results but rather goals that we
seek to achieve from the execution of our strategy over time,
through geographic expansion, product innovation, growing wallet
share with existing customers and new customer wins.
|
Growth Targets(4) |
Total volume(1) |
30%+ annual year-over-year growth in the medium
term(5) |
Revenue |
30%+ annual year-over-year growth in the medium
term(5) |
Adjusted EBITDA margin(2) |
50%+ over the long term(5) |
(1) Total volume does not represent revenue
earned by the Company, but rather the total dollar value of
transactions processed by merchants under contractual agreement
with the Company. See “Supplementary Financial Measures” below.
(2) Adjusted EBITDA, Adjusted EBITDA margin,
Adjusted net income, Adjusted net income per diluted share and Free
cash flow are non-IFRS measures. See “Non-IFRS and Other Financial
Measures”.
(3) Other than with respect to revenue, the
Company only provides guidance on a non-IFRS basis. The Company
does not provide a reconciliation of forward-looking Adjusted
EBITDA (non-IFRS) to net income (loss) due to the inherent
difficulty in forecasting and quantifying certain amounts that are
necessary for such reconciliation. In periods where significant
acquisitions or divestitures are not expected, the Company believes
it might have a basis for forecasting the IFRS equivalent for
certain costs, such as employee benefits, commissions and
depreciation and amortization. However, because other deductions
such as share-based payments, net finance costs, gain (loss) on
financial instruments carried at fair market value and current and
deferred income taxes used to calculate projected net income (loss)
can vary significantly based on actual events, the Company is not
able to forecast on an IFRS basis with reasonable certainty all
deductions needed in order to provide an IFRS calculation of
projected net income (loss). The amount of these deductions may be
material and, therefore, could result in projected IFRS net income
(loss) being materially less than projected Adjusted EBITDA
(non-IFRS). These statements represent forward-looking information
and may represent a financial outlook, and actual results may vary.
See the risk and assumptions described under the heading
“Forward-looking information” of this press release.
(4) These growth targets are fully qualified and
based on a number of assumptions and subject to a number of risks
as described under the heading “Forward-looking Information” of
this press release. These growth targets serve as guideposts as we
execute on our strategic priorities, and they assume a normal
business environment, continuing momentum and performance of the
Company’s core business and favorable tailwinds of the verticals it
serves. We will review and revise these growth targets as economic,
market and regulatory environments change.
(5) “Medium-term” and “long term” have not been
defined by Nuvei nor does Nuvei intend to define them. These
targets should not be considered as projections, forecasts or
expected results but rather goals that we seek to achieve from the
execution of our strategy over time. These growth targets are fully
qualified and based on a number of assumptions and subject to a
number of risks described under the heading “Forward-Looking
Information” of this press release. These targets are provided for
the purposes of assisting the reader in understanding the Company’s
financial performance and measuring progress toward management’s
objectives and the reader is cautioned that they may not be
appropriate for other purposes.
Conference Call
Information
Nuvei will host a conference call to discuss its
first quarter 2022 financial results today, Tuesday,
May 10, 2022 at 8:30 am ET. Hosting the call will be
Philip Fayer, Chair and CEO, and David Schwartz, CFO.
The conference call will be webcast live from
the Company’s investor relations website at
https://investors.nuvei.com under the “Events &
Presentations” section. A replay will be available on the investor
relations website following the call.
The conference call can also be accessed live
over the phone by dialing 877-425-9470 (US/Canada toll-free), or
201-389-0878 (international). A replay will be available one hour
after the call and can be accessed by dialing 844-512-2921
(US/Canada toll-free), or 412-317-6671 (international); the
conference ID is 13729013. The replay will be available through
Tuesday, May 24, 2022.
About NuveiNuvei (Nasdaq: NVEI)
(TSX: NVEI) is tomorrow’s payment platform. Designed to accelerate
customers’ business, Nuvei’s modular, flexible and scalable
technology allows leading companies to accept next-gen payments,
offer all payout options and benefit from card issuing, banking,
risk and fraud management services. Connecting businesses to their
customers in more than 200 markets, with local acquiring in 45+
markets, 150 currencies and more than 550 alternative payment
methods, including cryptocurrencies, Nuvei provides the technology
and insights for customers and partners to succeed locally and
globally with one integration.
For more information, visit www.nuvei.com
Non-IFRS and Other Financial Measures
Nuvei’s unaudited condensed interim consolidated
financial statements have been prepared in accordance with IFRS as
issued by the International Accounting Standards Board. The
information presented in this press release includes non-IFRS
financial measures, non-IFRS financial ratios and supplementary
financial measures, namely Adjusted EBITDA, Adjusted EBITDA margin,
Organic Revenue, Organic revenue growth, Adjusted net income,
Adjusted net income per basic share, Adjusted net income per
diluted share, Free cash flow, Total volume and eCommerce volume.
These measures are not recognized measures under IFRS and do not
have standardized meanings prescribed by IFRS and are therefore
unlikely to be comparable to similar measures presented by other
companies. Rather, these measures are provided as additional
information to complement IFRS measures by providing further
understanding of our results of operations from our perspective.
Accordingly, these measures should not be considered in isolation
nor as a substitute for analysis of the Company’s financial
information reported under IFRS. These measures are used to provide
investors with additional insight of our operating performance and
thus highlight trends in Nuvei’s core business that may not
otherwise be apparent when relying solely on IFRS measures. We also
believe that securities analysts, investors and other interested
parties frequently use these non-IFRS and other financial measures
in the evaluation of issuers. We also use these measures in order
to facilitate operating performance comparisons from period to
period, to prepare annual operating budgets and forecasts and to
determine components of management compensation. We believe these
measures are important additional measures of our performance,
primarily because they and similar measures are used widely among
others in the payment technology industry as a means of evaluating
a company’s underlying operating performance.
Non-IFRS Financial Measures
Adjusted EBITDA: We use
Adjusted EBITDA as a means to evaluate operating performance, by
eliminating the impact of non-operational or non-cash items.
Adjusted EBITDA is defined as net income (loss) before finance
costs, finance income, depreciation and amortization, income tax
expense, acquisition, integration and severance costs, share-based
payments and related payroll taxes, loss (gain) on foreign currency
exchange, and legal settlement and other.
Adjusted net income: We use
Adjusted net income as an indicator of business performance and
profitability with our current tax and capital structure. Adjusted
net income is defined as net income (loss) before acquisition,
integration and severance costs, share-based payments and related
payroll taxes, loss (gain) on foreign currency exchange,
amortization of acquisition-related intangible assets, and the
related income tax expense or recovery for these items. Adjusted
net income also excludes change in redemption value of
liability-classified common and preferred shares, change in fair
value of share repurchase liability and accelerated amortization of
deferred transaction costs and legal settlement and other.
Free cash flow: We use Free
cash flow as a supplementary indicator of our operating
performance. Free cash flow means, for any period, Adjusted EBITDA
less capital expenditures.
Non-IFRS Financial Ratios
Adjusted EBITDA margin: Adjusted EBITDA margin
means Adjusted EBITDA divided by revenue.
Adjusted net income per basic share and
per diluted share: We use Adjusted net income per basic
share and per diluted share as an indicator of performance and
profitability of our business on a per share basis. Adjusted net
income per basic share and per diluted share means Adjusted net
income less net income attributable to non-controlling interest
divided by the basic and diluted weighted average number of common
shares outstanding for the period. The number of share-based awards
used in the diluted weighted average number of common shares
outstanding in the Adjusted net income per diluted share
calculation is determined using the treasury stock method as
permitted under IFRS.
Supplementary Financial
Measures
We monitor the following key performance
indicators to help us evaluate our business, measure our
performance, identify trends affecting our business, formulate
business plans and make strategic decisions. Our key performance
indicators may be calculated in a manner that differs from similar
key performance indicators used by other companies.
Organic revenue: We use Organic
revenue as a means of evaluating performance. This measure helps
provide insight on organic and acquisition-related growth and
presents useful information about comparable revenue growth.
Organic revenue means revenue excluding the revenue attributable to
acquired businesses for a period of 12-months following their
acquisition and excluding revenue attributable to divested
businesses.
Organic revenue growth: Organic
revenue growth means the year-over-year change in Organic revenue
divided by Organic revenue in the prior period. We use Organic
revenue growth to assess revenue trends in our business on a
comparable basis versus the prior year.
Total volume and eCommerce
volume: We believe Total volume and eCommerce volume are
indicators of performance of our business. Total volume and similar
measures are used widely among others in the payments industry as a
means of evaluating a company’s performance. We define Total volume
as the total dollar value of transactions processed in the period
by merchants under contractual agreement with us. eCommerce volume
is the portion of Total volume for which the transaction did not
occur at a physical location. Total volume and eCommerce volume do
not represent revenue earned by us. Total volume includes acquiring
volume, where we are in the flow of funds in the settlement
transaction cycle, gateway/technology volume, where we provide our
gateway/technology services but are not in the flow of funds in the
settlement transaction cycle as well as the total dollar value of
transactions processed relating to alternative payment methods and
payouts. Since our revenue is primarily sales volume and
transaction-based, generated from merchants’ daily sales and
through various fees for value-added services provided to our
merchants, fluctuations in Total volume will generally impact our
revenue.
Forward-Looking Information
This press release contains “forward-looking
information” within the meaning of applicable securities laws,
including Nuvei's outlook on Total volume, Revenue and Adjusted
EBITDA for the three months ending June 30, 2022 and the year
ending December 31, 2022 as well as medium and long-term targets on
Total volume, Revenue and Adjusted EBITDA margin. This
forward-looking information is identified by the use of terms and
phrases such as “may”, “would”, “should”, “could”, “expect”,
“intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”,
or “continue”, the negative of these terms and similar terminology,
including references to assumptions, although not all
forward-looking information contains these terms and phrases.
Particularly, information regarding our expectations of future
results, performance, achievements, prospects or opportunities or
the markets in which we operate, expectations regarding industry
trends and the size and growth rates of addressable markets, our
business plans and growth strategies, addressable market
opportunity for our solutions, expectations regarding growth and
cross-selling opportunities and intention to capture an increasing
share of addressable markets, the costs and success of our sales
and marketing efforts, intentions to expand existing relationships,
further penetrate verticals, enter new geographical markets, expand
into and further increase penetration of international markets,
intentions to selectively pursue and successfully integrate
acquisitions, and expected acquisition outcomes and benefits,
future investments in our business and anticipated capital
expenditures, our intention to continuously innovate, differentiate
and enhance our platform and solutions, expected pace of ongoing
legislation of regulated activities and industries, our competitive
strengths and competitive position in our industry, expectations
regarding our revenue, revenue mix and the revenue generation
potential of our solutions, expectations regarding our margins and
future profitability, our financial outlook and guidance as well as
medium and long-term targets in various financial metrics, and the
future impact of the COVID-19 pandemic is forward-looking
information. The Russia and Ukraine conflict, including potential
impacts of sanctions, may also heighten the impact of certain
factors described herein.
In addition, any statements that refer to
expectations, intentions, projections or other characterizations of
future events or circumstances contain forward-looking information.
Statements containing forward-looking information are not
historical facts but instead represent management’s expectations,
estimates and projections regarding future events or circumstances.
Any financial outlook and targets, as the case may be, may also
constitute “financial outlook” within the meaning of applicable
securities laws and are provided for the purposes of assisting the
reader in understanding the Company’s financial performance and
measuring progress toward management’s objectives and the reader is
cautioned that it may not be appropriate for other purposes.
Forward-looking information involves known and
unknown risks and uncertainties, many of which are beyond our
control, that could cause actual results to differ materially from
those that are disclosed in or implied by such forward-looking
information. These risks and uncertainties include, but are not
limited to, the risk factors described in greater detail under
“Risk Factors” of the Company’s annual information form filed on
March 8, 2022 (the “AIF”) such as: risks relating to our business
and industry, such as the ongoing COVID-19 pandemic, including the
resulting global economic uncertainty and measures taken in
response to the pandemic; the rapid developments and change in our
industry; intense competition both within our industry and from
other payments methods; challenges implementing our growth
strategy; challenges to expand our product portfolio and market
reach; challenges in expanding into new geographic regions
internationally and continuing our growth within our markets;
challenges in retaining existing clients, increasing sales to
existing clients and attracting new clients; managing our growth
effectively; difficulty to maintain the same rate of revenue growth
as our business matures and to evaluate our future prospects;
history of net losses and additional significant investments in our
business; our level of indebtedness; risks associated with past and
future acquisitions; challenges related to a significant number of
our merchants being small-and-medium sized businesses (“SMBs”);
concentration of our revenue from payment services; compliance with
the requirements of payment networks; challenges related to the
reimbursement of chargebacks from our merchants; our bank accounts
being located in multiple territories and relying on banking
partners to maintain those accounts; the impact of the United
Kingdom’s departure from the European Union; decline in the use of
electronic payment methods; changes in foreign currency exchange
rates affecting results of operations; deterioration in the quality
of the products and services offered; loss of key personnel or
difficulties hiring qualified personnel; impairment of a
significant portion of intangible assets and goodwill; increasing
fees from payment networks; challenges related to general economic
and geopolitical conditions, business cycles and credit risks of
our clients; reliance on third-party partners to sell some of our
products and services; misappropriation of end-user transaction
funds by our employees; frauds by merchants, their customers or
others; coverage of our insurance policies; the degree of
effectiveness of our risk management policies and procedures in
mitigating our risk exposure; the integration of a variety of
operating systems, software, hardware, web browsers and networks in
our services; the costs and effects of pending and future
litigation; various claims such as wrongful hiring of an employee
from a competitor, wrongful use of confidential information of
third parties by our employees, consultants or independent
contractors or wrongful use of trade secrets by our employees of
their former employers; challenges to secure financing on favorable
terms or at all; challenges from seasonal fluctuations on our
operating results; risks associated with less than full control
rights of some of our subsidiaries; changes in accounting
standards; estimates and assumptions in the application of
accounting policies; occurrence of a natural disaster, a widespread
health epidemic or pandemic or other events; impacts of climate
change; challenges related to our holding company structure, as
well as risks relating to intellectual property and technology,
risks relating to regulatory and legal proceedings and risks
relating to our Subordinate Voting Shares.
Forward-looking information is based on
management’s beliefs and assumptions and on information currently
available to management, regarding, among other things, general
economic conditions and the competitive environment within our
industry, including the following assumptions: (a) Nuvei's results
of operations and ability to achieve suitable margins will continue
in line with management’s expectations, (b) the Company will
continue to effectively execute against its key strategic growth
priorities, without any material adverse impact from the COVID-19
pandemic on its or its merchants’ business, financial condition,
financial performance, liquidity nor any significant reduction in
demand for its products and services, (c) losses owing to business
failures of merchants and customers will remain in line with
anticipated levels, (d) the Company’s ability to capture an
increasing share of addressable markets by continuing to retain and
grow existing customer relationships in high growth verticals while
adding new customers adopting our technology processing
transactions in existing and new geographies at or above historical
levels, (e) Nuvei’s continued ability to maintain its
competitiveness relative to competitors’ products or services,
including as to changes in terms, conditions and pricing, (f)
Nuvei’s continued ability to manage its growth effectively, (g) the
Company will continue to attract and retain key talent and
personnel required to achieve its plans and strategies, including
sales, marketing, support and product and technology operations, in
each case both domestically and internationally, (h) the Company’s
ability to successfully identify, complete, integrate and realize
the expected benefits of, acquisitions and manage the associated
risks, (i) absence of material changes in economic conditions in
our core markets, geographies and verticals, (j) the size and
growth rates of our addressable markets and verticals, including
that the industries in which Nuvei operates will continue to grow
consistent with management’s expectations, (k) the accuracy of our
assumptions as to currency exchange rates and interest rates,
including inflation, and volatility in financial markets, (l) the
absence of adverse changes in legislative or regulatory matters,
(m) the absence of adverse changes in current tax laws, (n)
projected operating and capital expenditure requirements, and (o)
the COVID-19 pandemic, including any variants, having durably
subsided with broad immunity achieved in our core markets,
geographies and verticals, including the elimination of social
distancing measures and other restrictions generally in such
markets. Unless otherwise indicated, forward-looking information
does not give effect to the potential impact of any mergers,
acquisitions, divestitures or business combinations that may be
announced or closed after the date hereof. Although the
forward-looking information contained herein is based upon what we
believe are reasonable assumptions, investors are cautioned against
placing undue reliance on this information since actual results may
vary from the forward-looking information.
Consequently, all of the forward-looking
information contained herein is qualified by the foregoing
cautionary statements, and there can be no guarantee that the
results or developments that we anticipate will be realized or,
even if substantially realized, that they will have the expected
consequences or effects on our business, financial condition or
results of operation. Unless otherwise noted or the context
otherwise indicates, the forward-looking information contained
herein represents our expectations as of the date hereof or as of
the date it is otherwise stated to be made, as applicable, and is
subject to change after such date. However, we disclaim any
intention or obligation or undertaking to update or amend such
forward-looking information whether as a result of new information,
future events or otherwise, except as may be required by applicable
law.
Contact:
Investors
Anthony GersteinVice President, Head of Investor
Relations anthony.gerstein@nuvei.com
Statements of Profit or Loss and
Comprehensive Income or Loss Data (in thousands of U.S.
dollars except for shares and per share amounts)
|
Three months endedMarch 31 |
|
|
2022 |
|
2021 |
|
|
$ |
|
$ |
|
Revenue |
214,544 |
|
150,480 |
|
Cost of revenue |
46,916 |
|
27,184 |
|
Gross profit |
167,628 |
|
123,296 |
|
Selling, general and administrative expenses |
146,812 |
|
88,436 |
|
Operating profit |
20,816 |
|
34,860 |
|
Finance income |
(631 |
) |
(859 |
) |
Finance costs |
7,741 |
|
3,315 |
|
Net finance costs |
7,110 |
|
2,456 |
|
Loss (gain) on foreign currency exchange |
580 |
|
(445 |
) |
Income before income tax |
13,126 |
|
32,849 |
|
Income tax expense |
8,612 |
|
5,059 |
|
Net income |
4,514 |
|
27,790 |
|
Other comprehensive
income (loss) |
|
|
Items that may be reclassified
subsequently to profit and loss |
|
|
Foreign
operations – foreign currency translation differences |
(4,862 |
) |
(14,849 |
) |
Comprehensive income (loss) |
(348 |
) |
12,941 |
|
Net income attributable to: |
|
|
Common shareholders of the Company |
3,003 |
|
26,814 |
|
Non-controlling interest |
1,511 |
|
976 |
|
|
4,514 |
|
27,790 |
|
Comprehensive income (loss) attributable to: |
|
|
Common shareholders of the Company |
(1,859 |
) |
11,965 |
|
Non-controlling interest |
1,511 |
|
976 |
|
|
(348 |
) |
12,941 |
|
Net income per share |
|
|
Net income per share
attributable to common shareholders of the Company |
|
|
Basic |
0.02 |
|
0.19 |
|
Diluted |
0.02 |
|
0.19 |
|
Weighted average number of
common shares outstanding |
|
|
Basic |
142,862,946 |
|
138,201,970 |
|
Diluted |
146,604,820 |
|
142,741,312 |
|
Consolidated Statements of Financial Position
Data(in thousands of U.S. dollars) |
|
|
|
March 31, 2022 |
|
December 31, 2021 |
|
|
$ |
|
$ |
|
Assets |
|
|
|
|
|
Current assets |
|
|
Cash |
735,038 |
|
748,576 |
|
Trade
and other receivables |
44,733 |
|
39,262 |
|
Inventory |
1,403 |
|
1,277 |
|
Prepaid expenses |
10,399 |
|
8,483 |
|
Income taxes receivable |
575 |
|
3,702 |
|
Current portion of advances to third parties |
1,698 |
|
3,104 |
|
Current portion of contract assets |
1,639 |
|
1,354 |
|
|
|
|
Total
current assets before segregated funds |
795,485 |
|
805,758 |
|
Segregated funds |
759,696 |
|
720,874 |
|
Total current assets |
1,555,181 |
|
1,526,632 |
|
|
|
|
Non-current assets |
|
|
Advances to third parties |
6,707 |
|
13,676 |
|
Property and equipment |
23,959 |
|
18,856 |
|
Intangible assets |
735,700 |
|
747,600 |
|
Goodwill |
1,122,957 |
|
1,126,768 |
|
Deferred tax assets |
12,854 |
|
13,036 |
|
Contract assets |
872 |
|
1,091 |
|
Processor deposits |
4,854 |
|
4,788 |
|
Other
non-current assets |
4,037 |
|
3,023 |
|
|
|
|
Total Assets |
3,467,121 |
|
3,455,470 |
|
Liabilities |
|
|
|
|
|
Current liabilities |
|
|
Trade
and other payables |
104,873 |
|
101,848 |
|
Income taxes payable |
22,004 |
|
13,478 |
|
Current portion of loans and borrowings |
8,152 |
|
7,349 |
|
Liability due to purchase of non-controlling interests |
39,751 |
|
— |
|
Share
repurchase liability |
43,726 |
|
— |
|
Other
current liabilities |
11,121 |
|
13,226 |
|
|
|
|
Total
current liabilities before due to merchants |
229,627 |
|
135,901 |
|
Due to merchants |
759,696 |
|
720,874 |
|
|
|
|
Total
current liabilities |
989,323 |
|
856,775 |
|
|
|
|
Non-current liabilities |
|
|
Loans
and borrowings |
504,816 |
|
501,246 |
|
Deferred tax liabilities |
64,707 |
|
71,100 |
|
Other
non-current liabilities |
4,286 |
|
4,509 |
|
|
|
|
Total Liabilities |
1,563,132 |
|
1,433,630 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Equity attributable to shareholders |
|
|
Share capital |
2,013,732 |
|
2,057,105 |
|
Contributed surplus |
107,868 |
|
69,943 |
|
Deficit |
(211,235 |
) |
(108,749 |
) |
Accumulated other comprehensive loss |
(13,423 |
) |
(8,561 |
) |
|
|
|
|
1,896,942 |
|
2,009,738 |
|
Non-controlling interest |
7,047 |
|
12,102 |
|
|
|
|
Total Equity |
1,903,989 |
|
2,021,840 |
|
|
|
|
Total Liabilities and Equity |
3,467,121 |
|
3,455,470 |
|
|
|
|
Consolidated Statements of Cash Flow Data(in
thousands of U.S. dollars) |
|
|
For the three months ended March 31, |
2022 |
|
2021 |
|
|
$ |
|
$ |
|
Cash flow from operating activities |
|
|
Net
income |
4,514 |
|
27,790 |
|
Adjustments for: |
|
|
Depreciation of property and equipment |
1,793 |
|
1,350 |
|
Amortization of intangible assets |
24,650 |
|
19,648 |
|
Amortization of contract assets |
427 |
|
487 |
|
Share-based payments |
37,187 |
|
4,105 |
|
Net finance costs |
7,110 |
|
2,456 |
|
Loss (gain) on foreign currency exchange |
580 |
|
(445 |
) |
Income tax expense |
8,612 |
|
5,059 |
|
Changes in non-cash working capital items |
(13,618 |
) |
(3,198 |
) |
Interest paid |
(4,266 |
) |
(2,836 |
) |
Income taxes paid |
(1,255 |
) |
(1,013 |
) |
|
65,734 |
|
53,403 |
|
Cash flow used in investing activities |
|
|
Business acquisitions, net of
cash acquired |
— |
|
(88,930 |
) |
Acquisition of property
and equipment |
(1,083 |
) |
(593 |
) |
Acquisition of intangible
assets |
(7,978 |
) |
(4,145 |
) |
Decrease (increase) in other
non-current assets |
(1,080 |
) |
522 |
|
Net
decrease in advances to third parties |
993 |
|
2,865 |
|
|
(9,148 |
) |
(90,281 |
) |
Cash flow from (used in) financing activities |
|
|
Shares repurchased and
cancelled |
(74,754 |
) |
— |
|
Repayment of loans and
borrowings |
(1,280 |
) |
— |
|
Proceeds from exercise of
stock options |
742 |
|
1,178 |
|
Transaction costs from
issuance of shares |
(15 |
) |
— |
|
Payment of lease
liabilities |
(770 |
) |
(642 |
) |
Dividend paid by subsidiary to
non-controlling interest |
(260 |
) |
(200 |
) |
|
(76,337 |
) |
336 |
|
Effect of movements in exchange rates on cash |
6,213 |
|
284 |
|
Net decrease in
cash |
(13,538 |
) |
(36,258 |
) |
Cash – Beginning of period |
748,576 |
|
180,722 |
|
Cash – End of period |
735,038 |
|
144,464 |
|
Reconciliation of Adjusted EBITDA and
Free cash flow to Net Income and Cash flow from operating
activities(In thousands of U.S. dollars)
|
Three months endedMarch 31 |
|
|
2022 |
|
2021 |
|
|
$ |
|
$ |
|
|
|
|
Cash flow from
operating activities |
65,734 |
|
53,403 |
|
Adjustments for: |
|
|
Depreciation of property and equipment |
(1,793 |
) |
(1,350 |
) |
Amortization of intangible assets |
(24,650 |
) |
(19,648 |
) |
Amortization of contract assets |
(427 |
) |
(487 |
) |
Share-based payments |
(37,187 |
) |
(4,105 |
) |
Net finance costs |
(7,110 |
) |
(2,456 |
) |
Gain (loss) on foreign currency exchange |
(580 |
) |
445 |
|
Income tax expense |
(8,612 |
) |
(5,059 |
) |
Changes in non-cash working capital items |
13,618 |
|
3,198 |
|
Interest paid |
4,266 |
|
2,836 |
|
Income taxes paid |
1,255 |
|
1,013 |
|
Net income |
4,514 |
|
27,790 |
|
Finance costs |
7,741 |
|
3,315 |
|
Finance income |
(631 |
) |
(859 |
) |
Depreciation and amortization |
26,443 |
|
20,998 |
|
Income tax expense |
8,612 |
|
5,059 |
|
Acquisition, integration and severance costs (a) |
6,554 |
|
5,340 |
|
Share-based payments and related payroll taxes(b) |
37,240 |
|
4,105 |
|
Loss
(gain) on foreign currency exchange |
580 |
|
(445 |
) |
Legal settlement and other (c) |
525 |
|
159 |
|
Adjusted EBITDA |
91,578 |
|
65,462 |
|
Acquisition of property and equipment, and intangible assets |
(9,061 |
) |
(4,738 |
) |
Free cash flow |
82,517 |
|
60,724 |
|
- These expenses relate to:
- professional, legal, consulting, accounting and other fees and
expenses related to our acquisition activities and financing
activities. For the three months ended March 31, 2022, those
expenses were $2.8 million ($5.3 million for the three months ended
March 31, 2021). These costs are presented in the professional
fees line item of selling, general and administrative
expenses.
- acquisition-related compensation was $3.4 million for the three
months ended March 31, 2022 and nil for the three months ended
2021. These costs are presented in the employee compensation line
item of selling, general and administrative expenses.
- change in deferred purchase consideration for previously
acquired businesses. No amount was recognized in 2022 and 2021.
These amounts are presented in selling, general and administrative
expenses.
- severance and integration expenses, which were $0.4 million for
the three months ended March 31, 2022 (immaterial for the
three months ended March 31, 2021). These expenses are
presented in selling, general and administrative
expenses.
- These expenses represent
expenses recognized in connection with stock options and other
awards issued under share-based plans as well as related payroll
taxes that are directly attributable to share-based payments. For
the three months ended March 31, 2022, the expenses were
non-cash share-based payments of $37.2 million ($4.1 million for
three months ended March 31, 2021), and $0.1 million for
related payroll taxes (nil in 2021).
- This line item primarily represents
legal settlements and associated legal costs, as well as non-cash
gains, losses and provisions and certain other costs. These costs
are presented in selling, general and administrative expenses.
Reconciliation of Adjusted net income
and Adjusted net income per basic share and per diluted share to
Net Income(In thousands of U.S. dollars except for share
and per share amounts)
|
Three months endedMarch 31 |
|
|
2022 |
|
2021 |
|
$ |
|
$ |
|
|
|
|
Net income |
4,514 |
|
27,790 |
|
Change in fair value of share repurchase liability |
2,174 |
|
— |
|
Amortization of acquisition-related intangible assets (a) |
22,981 |
|
18,212 |
|
Acquisition, integration and severance costs (b) |
6,554 |
|
5,340 |
|
Share-based payments and related payroll taxes(c) |
37,240 |
|
4,105 |
|
Loss
(gain) on foreign currency exchange |
580 |
|
(445 |
) |
Legal settlement and other (d) |
525 |
|
159 |
|
Adjustments |
70,054 |
|
27,371 |
|
Income tax expense related to adjustments (e) |
(5,512 |
) |
(4,000 |
) |
Adjusted net income |
69,056 |
|
51,161 |
|
Net income attributable to non-controlling interest |
(1,511 |
) |
(976 |
) |
Adjusted net income attributable to the common shareholders of the
Company |
67,545 |
|
50,185 |
|
Weighted average number of common shares outstanding |
|
|
Basic |
142,862,946 |
|
138,201,970 |
|
Diluted |
146,604,820 |
|
142,741,312 |
|
|
|
|
Adjusted net income per share attributable to common
shareholders of the Company (f) |
|
|
Basic |
0.47 |
|
0.36 |
|
Diluted |
0.46 |
|
0.35 |
|
- This line item relates to
amortization expense taken on intangible assets created from the
purchase price adjustment process on acquired companies and
businesses and resulting from a change in control of the
Company.
- These expenses relate to:
- professional, legal, consulting, accounting and other fees and
expenses related to our acquisition activities and financing
activities. For the three months ended March 31, 2022, those
expenses were $2.8 million ($5.3 million for the three months ended
March 31, 2021). These costs are presented in the professional
fees line item of selling, general and administrative
expenses.
- acquisition-related compensation was $3.4 million for the three
months ended March 31, 2022 and nil for the three months ended
2021. These costs are presented in the employee compensation line
item of selling, general and administrative expenses.
- change in deferred purchase consideration for previously
acquired businesses. No amount was recognized in 2022 and 2021.
These amounts are presented in selling, general and administrative
expenses.
- severance and integration expenses, which were $0.4 million for
the three months ended March 31, 2022 (immaterial for the
three months ended March 31, 2021). These expenses are
presented in selling, general and administrative expenses.
- These expenses represent
expenses recognized in connection with stock options and other
awards issued under share-based plans as well as related payroll
taxes that are directly attributable to share-based payments. For
the three months ended March 31, 2022, the expenses were
non-cash share-based payments of $37.2 million ($4.1 million for
three months ended March 31, 2021), and $0.1 million for
related payroll taxes (nil in 2021).
- This line item primarily represents
legal settlements and associated legal costs, as well as non-cash
gains, losses and provisions and certain other costs. These costs
are presented in selling, general and administrative expenses.
- This line item reflects income tax
expense on taxable adjustments using the tax rate of the applicable
jurisdiction.
- The number of share-based awards
used in the diluted weighted average number of common shares
outstanding in the Adjusted net income per diluted share
calculation is determined using the treasury stock method as
permitted under IFRS.
Revenue by geography
The following table summarizes our revenue by
geography based on the billing location of the merchant:
|
Three months endedMarch 31 |
|
Change |
(In
thousands of U.S. dollars, except for percentages) |
2022 |
2021 |
|
|
|
$ |
$ |
|
$ |
% |
Revenue |
|
|
|
|
|
Europe, Middle East and Africa |
124,587 |
72,132 |
|
52,455 |
73 % |
North America |
80,665 |
71,455 |
|
9,210 |
13 % |
Latin America |
6,425 |
5,140 |
|
1,285 |
25 % |
Asia Pacific |
2,867 |
1,753 |
|
1,114 |
64 % |
|
214,544 |
150,480 |
|
64,064 |
43 % |
Reconciliation of Organic revenue and
Organic revenue growth to Revenue
(Inthousands ofU.S. dollarsexcept forpercentages) |
Three months endedMarch 31,
2022 |
|
Three months endedMarch 31,
2021 |
|
|
Revenue asreported |
Revenuefromacquisitions(a) |
Revenue fromdivestitures |
Organicrevenue |
|
Revenue asreported |
Revenue fromdivestitures |
Comparableorganic revenue |
Revenuegrowth |
Organicrevenuegrowth |
$ |
$ |
$ |
$ |
|
$ |
$ |
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
214,544 |
(16,591 |
) |
— |
197,953 |
|
150,480 |
— |
150,480 |
43 % |
32 % |
- We acquired Mazooma Technical
Services Inc. ("Mazooma") on August 3, 2021, and SimplexCC Ltd.
("Simplex") and Paymentez LLC ("Paymentez") on September 1,
2021.
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