NVEI Nuvei Corporation

Nuvei reports in U.S. dollars and in accordance with International Financial Reporting Standards ("IFRS")

MONTREAL, Nov. 7, 2023 /PRNewswire/ -- Nuvei Corporation ("Nuvei" or the "Company") (Nasdaq: NVEI) (TSX: NVEI), the Canadian fintech company, today reported its financial results for the three and nine months ended  September 30, 2023. The Company's results are also included in a quarterly shareholder letter which can be found in the "Events and presentations" and "Financial information" sections of the Company's Investor Relations website at https://investors.nuvei.com.

Financial Highlights for the Three Months Ended September 30, 2023

• Total volume^(a) increased by 72% to $48.2 billion from $28.0 billion;
  • eCommerce represented 88% of Total volume^(a);
  • Organic total volume growth at constant currency^(a) was 20% with Organic total volume at constant currency^(a) increasing to $33.7 billion from $28.0 billion;
• Revenue increased 55% to $304.9 million from $197.1 million;
  • Revenue growth at constant currency^(b) was 52% with Revenue at constant currency^(b) increasing to $299.9 million from $197.1 million;
  • Organic revenue growth at constant currency^(b) was 13% with Organic revenue at constant currency^(b) increasing to $223.3 million from $197.1 million;
• Net loss was $18.1 million compared to net income of $13.0 million;
  • Results include an increase in net finance cost of $23.6 million mainly related to amounts drawn under the Company's Reducing revolving credit facility as well as an unfavorable change in foreign currency exchange of $25.6 million;
  • Net loss margin was 5.9% compared to a net income margin of 6.6%;
• Adjusted EBITDA^(b) increased by 36% to $110.7 million from $81.2 million;
  • Adjusted EBITDA margin^(b) was 36.3%, an increase of 40 basis points sequentially, compared to an Adjusted EBITDA margin^(b) of 35.9% in the three months ended June 30, 2023 and compared to an Adjusted EBITDA margin^(b) of 41.2% in the three months ended September 30, 2022.
• Adjusted net income^(b) decreased by 9% to $56.8 million from $62.4 million;
• Net loss per share was $0.14 compared to net income per share of $0.08;
• Adjusted net income per diluted share^(b) decreased by 9% to $0.39 from $0.43; and,
• Adjusted EBITDA less capital expenditures^(b) increased by 42% to $97.5 million from $68.5 million.

Financial Highlights for the Nine Months Ended September 30, 2023

• Total volume^(a) increased by 62% to $141.2 billion from $87.4 billion;
  • eCommerce represented 89% of Total volume^(a);
  • Organic total volume growth at constant currency^(a) was 24% with Organic total volume at constant currency^(a) increasing to $108.7 billion from $87.4 billion;
• Revenue increased 39% to $868.4 million from $623.0 million;
  • Revenue growth at constant currency^(b) was 40% with Revenue at constant currency^(b) increasing to $869.9 million from $623.0 million;
  • Organic revenue growth at constant currency^(b) was 10% with Organic revenue at constant currency^(b) increasing to $686.7 million from $623.0 million;
• Net loss was $14.8 million compared to net income of $52.6 million; 
  • Results include an increase in net finance cost of $61.6 million mainly related to amounts drawn under the Company's Reducing revolving credit facility;
• Adjusted EBITDA^(b) increased by 19% to $317.3 million from $265.6 million;
• Adjusted net income^(b) decreased by 13% to $179.3 million from $206.2 million;
• Net loss per share was $0.14 compared to net income per share of $0.34;
• Adjusted net income per diluted share^(b) decreased by 13% to $1.21 from $1.39;
• Adjusted EBITDA less capital expenditures^(b) increased by 20% to $277.0 million from $231.8 million; and,
• Share repurchases totaled 1,350,000 shares for total cash consideration of $56 million.

Revenue by channel

• The Company operates its commercial organization and distributes its products and technology through three distinct sales channels: Global commerce, Business-to-business ("B2B"), government and independent software vendors ("ISV"), and Small and medium-sized businesses ("SMB"):
  • Global commerce revenue increased 25% year over year on a pro forma basis^(g), to $170 million and represented 56% of total revenue in the third quarter. Sequentially, pro forma revenue growth^(g) accelerated 890 basis points compared to the second quarter's pro forma revenue growth^(g) rate.
  • B2B, government and ISV revenue increased 16% year over year on a pro forma basis^(g), to $55 million and represented 18% of total revenue in the third quarter. Sequentially, pro forma revenue growth^(g) accelerated by more than 360 basis points compared to the second quarter's pro forma revenue growth^(g) rate.
  • SMB revenue declined 4% year over year on a pro forma^(g) basis, to $80 million and represented 26% of total revenue in the third quarter. Sequentially, pro forma revenue growth^(g) improved by 170 basis points compared to the second quarter's pro forma revenue growth^(g) rate.
  • In summary, total revenue increased 14% year over year on a pro forma^(g) basis in the third quarter.  Sequentially, pro forma revenue growth^(g) improved by 550 basis points compared to the second quarter's pro forma revenue growth^(g) rate.

Revenue by region

• From a regional perspective, revenue for the third quarter of 2023 increased 100% to $166.5 million in North America, increased 17% to $123.0 million in Europe, the Middle East and Africa, increased 81% to $13.8 million in Latin America, and increased 67% to $1.6 million in Asia Pacific.

Cash Dividend

Nuvei today announced that its Board of Directors has authorized and declared a cash dividend of $0.10 per subordinate voting share and multiple voting share, payable on December 7, 2023 to shareholders of record as of November 20, 2023. The aggregate amount of the dividend is expected to be approximately $14 million, to be funded from the Company's existing cash on hand.

The Company, for the purposes of the Income Tax Act (Canada) and any similar provincial or territorial legislation, designates the dividend declared for the quarter ending September 30, 2023, and any future dividends, to be eligible dividends. The Company further expects to report such dividend as a dividend to U.S. shareholders for U.S. federal income tax purposes. Subject to applicable limitations, dividends paid to certain non-corporate U.S. shareholders may be eligible for taxation as "qualified dividend income" and therefore may be taxable at rates applicable to long-term capital gains. A U.S. shareholder should talk to its advisor regarding such dividend, including with respect to the "extraordinary dividend" provisions of the Internal Revenue Code (US).

The declaration, timing, amount and payment of future dividends remain at the discretion of the Board of Directors, as more fully described under the heading "Forward-Looking Information" of this press release.

Financial Outlook^(d)

We continue to see momentum in the business, and we are raising our outlook for the full year. Daily average volumes in October and early November have remained consistent with our expectations, and we are not seeing any signs that the near-term spending environment has changed.  In terms of our updated ranges for the full year, we are raising our outlook range for Total volume^(a) and Adjusted EBITDA^(b), and we are narrowing our outlook range by raising the low end for Revenue and Revenue at constant currency^(b).  These updates to our outlook ranges reflect our view of consistent execution into year end in driving margin expansion.

For the three months ending December 31, 2023 and the fiscal year ending December 31, 2023, Nuvei anticipates Total volume^(a), Revenue, Revenue at constant currency^(b) and Adjusted EBITDA^(b) to be in the ranges below. Nuvei also expects Organic revenue growth excluding digital assets and cryptocurrencies at constant currency^(b) to be between 16% and 20% for the fiscal year ending December 31, 2023.

The financial outlook, including the various underlying assumptions, constitute forward-looking information within the meaning of applicable securities laws and is fully qualified and based on a number of assumptions and subject to a number of risks described under the headings "Forward-Looking Information" and "Financial Outlook and Growth Targets Assumptions" of this press release.

Growth Targets

Nuvei's medium-term^(e) annual growth target for revenue, as well as its medium-term^(e) target for capital expenditures (acquisition of intangible assets and property and equipment) as a percentage of revenue and long-term^(e) target for Adjusted EBITDA margin^(c), are shown in the table below.  In addition to category-leading growth in its Global commerce channel^(c), the Company believes it has a defined path to accelerate the growth in its B2B, government and ISV channel^(c) to 20%-plus over the medium term. Furthermore, the Company believes its scaled global platform has reached an inflection point whereby it can continue to expand Adjusted EBITDA margin^(c). Nuvei's targets are intended to provide insight into the execution of its strategy as it relates to growth, profitability and cash generation.   These medium^(e) 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, and at a further stage of business maturity, through geographic expansion, product innovation, growing wallet share with existing customers and new customer wins, as more fully described under the heading "Summary of Factors Affecting our Performance" of our most recent Management's Discussion and Analysis of Financial Condition and Results of Operations. These growth targets, including the various underlying assumptions, constitute forward-looking information within the meaning of applicable securities laws and are fully qualified and based on a number of assumptions and subject to a number of risks described under the headings "Forward-Looking Information" and "Financial Outlook and Growth Targets Assumptions" of this press release. We will review and revise these growth targets as economic, market and regulatory environments change.

Conference Call Information

Nuvei will host a conference call to discuss its third quarter financial results Wednesday, November 8, 2023 at 8:00 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 Company's results are also included in a quarterly shareholder letter posted in the "Events & presentations" and "Financial information" sections of its investor relation website at https://investors.nuvei.com

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 approximately one hour after the conclusion of the call and can be accessed by dialing 844-512-2921 (US/Canada toll-free), or 412-317-6671 (international); the conference ID is 13740869. The audio replay will be available through Wednesday, November 22, 2023.

The shareholder letter is available to read and download at https://nuvei.com/shl-q3-2023.

About Nuvei

Nuvei (Nasdaq: NVEI) (TSX: NVEI) is the Canadian fintech company accelerating the business of clients around the world. 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 47 markets, 150 currencies and 669 alternative payment methods, 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, applicable to the preparation of interim financial statements, including International Accounting Standard ("IAS") 34, Interim Financial Reporting, 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, Paya Adjusted EBITDA, Adjusted EBITDA margin, Revenue at constant currency, Revenue growth at constant currency, Organic Revenue at constant currency, Organic revenue growth at constant currency, Nuvei pro forma revenue and Nuvei pro forma revenue growth, Combined trailing twelve months Adjusted EBITDA, Combined leverage ratio, Adjusted net income, Adjusted net income per basic share, Adjusted net income per diluted share, Adjusted EBITDA less capital expenditures, Adjusted EBITDA less capital expenditures conversion, Total volume, Organic total organic volume at constant currency and eCommerce volume. These measures are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS and therefore may not 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 statements reported under IFRS. These measures are used to provide investors with additional insight of our operating performance and thus highlight trends in Nuvei's 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 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.

The information in this press release also includes a non-U.S. GAAP financial measure, namely Paya Adjusted EBITDA, for periods prior to Nuvei's acquisition of Paya on February 22, 2023. This measure is not a recognized measure under U.S. GAAP and does not have standardized meaning prescribed by U.S. GAAP and therefore may not be comparable to similar measures presented by other companies, including Nuvei's. Rather, this measure is provided as additional information to complement U.S. GAAP measures by providing further understanding of Paya's results of operations. Prior to its acquisition by Nuvei, Paya's financial statements were prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), and Paya Adjusted EBITDA has been derived from Paya's annual or interim financial statements for the period prior to the acquisition. IFRS differs in certain material respects from U.S. GAAP. Paya adjusted EBITDA presented in this press release has not been adjusted to give effect to the differences between U.S. GAAP and IFRS or to accounting policies that comply with IFRS and as applied by Nuvei, nor has such financial information been conformed from accounting principles under U.S. GAAP to IFRS as issued by the IASB, and thus may not be directly comparable to Nuvei's presentation of Adjusted EBITDA. However, we have assessed the differences between U.S. GAAP and IFRS and have determined the impact to be immaterial on the combined financial metrics presented in this press release, such that no adjustments would be necessary. Paya Adjusted EBITDA is not a financial measure calculated in accordance with U.S. GAAP and should not be considered as a substitute for net income, income before income taxes, or any other operating performance measure calculated in accordance with U.S. GAAP.

Non-IFRS Financial Measures

Revenue at constant currency: Revenue at constant currency means revenue, as determined by IFRS, adjusted for the impact of foreign currency exchange fluctuations. This measure helps provide insight on comparable revenue growth by removing the effect of changes in foreign currency exchange rates year-over-year. Foreign currency exchange impact in the current period is calculated using prior period quarterly average exchange rates applied to the current period foreign currency amounts.

Organic revenue at constant currency: Organic revenue at constant currency means revenue, as determined under IFRS, adjusted to exclude the revenue attributable to acquired businesses for a period of 12 months following their acquisition and excluding revenue attributable to divested businesses, adjusted for the impact of foreign currency exchange fluctuations. Foreign currency exchange impact in the current period is calculated using prior period quarterly average exchange rates applied to the current period foreign currency amounts. This measure helps provide insight on organic and acquisition-related growth and presents useful information about comparable revenue growth.

Organic revenue excluding digital assets and cryptocurrencies at constant currency: Organic revenue excluding digital assets and cryptocurrencies at constant currency 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 and digital assets and cryptocurrencies, and adjusted for the impact of foreign currency exchange fluctuations. This measure helps provide insight on comparable revenue growth by removing the effect of volatility in digital assets and cryptocurrencies and changes in foreign currency exchange rates year-over-year. Foreign currency exchange impact in the current period is calculated using prior period quarterly average exchange rates applied to the current period foreign currency amounts. The revenue attributable to digital assets and cryptocurrencies is calculated in accordance with the accounting policies used to prepare the revenue line item presented in the Company's financial statements under IFRS.

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 (recovery), 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.

Paya Adjusted EBITDA: Paya Adjusted EBITDA represents earnings before interest and other expense, income taxes, depreciation, and amortization, or EBITDA and further adjustments to EBITDA to exclude certain non-cash items and other non-recurring items that Paya believes are not indicative of ongoing operations. Prior to its acquisition by Nuvei, Paya was disclosing Paya Adjusted EBITDA because this non-U.S. GAAP measure was a key measure used by it to evaluate its business, measure its operating performance and make strategic decisions. Nuvei is disclosing Paya Adjusted EBITDA in order to show Combined trailing twelve months Adjusted EBITDA and Combined leverage ratio.

Combined trailing twelve months Adjusted EBITDA: Combined trailing twelve months Adjusted EBITDA represents the summation for the trailing twelve months of Nuvei's Adjusted EBITDA with Paya's Adjusted EBITDA for the period prior to the acquisition. Prior to its acquisition by Nuvei, Paya's financial statements were prepared in accordance with U.S. GAAP, and Paya Adjusted EBITDA has been derived from Paya's annual or  interim financial statements for periods prior to the acquisition. IFRS differs in certain material respects from U.S. GAAP. Paya Adjusted EBITDA presented in this press release has not been adjusted to give effect to the differences between U.S. GAAP and IFRS or to accounting policies that comply with IFRS and as applied by Nuvei, nor has such financial information been conformed from accounting principles under U.S. GAAP to IFRS as issued by the IASB, and thus may not be directly comparable to Nuvei's presentation of Adjusted EBITDA. The presentation of financial information on a combined basis does not comply with IFRS. The combined financial information included in this press release is unaudited and does not purport to be indicative of the Company's results of operations and financial condition had Nuvei and Paya operated as a combined entity during the periods presented, and should not be considered as a prediction of the financial information that will result from the operations of the Company on a consolidated basis following the acquisition. We use Combined trailing twelve months Adjusted EBITDA because we believe it provides insight into the operations of the combined company for the periods presented.

Adjusted EBITDA less capital expenditures: We use Adjusted EBITDA less capital expenditures (which we define as acquisition of intangible assets and property and equipment) as a supplementary indicator of our operating performance.

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.

Non-IFRS Financial Ratios

Revenue growth at constant currency: Revenue growth at constant currency means the year-over-year change in Revenue at constant currency divided by reported revenue in the prior period. We use Revenue growth at constant currency to provide better comparability of revenue trends year-over-year, without the impact of fluctuations in foreign currency exchange rates.

Organic revenue growth at constant currency: Organic revenue growth at constant currency means the year-over-year change in Organic revenue at constant currency divided by comparable Organic revenue in the prior period. We use Organic revenue growth at constant currency to provide better comparability of revenue trends year-over-year, without the impact of acquisitions, divestitures and fluctuations in foreign currency exchanges rates.

Organic revenue growth excluding digital assets and cryptocurrencies at constant currency: Organic revenue growth excluding digital assets and cryptocurrencies at constant currency means the year-over-year change in Organic revenue excluding digital assets and cryptocurrencies at constant currency divided by comparable Organic revenue excluding digital assets and cryptocurrencies in the prior period. We use Organic revenue growth excluding digital assets and cryptocurrencies at constant currency to provide better comparability of revenue trends year-over-year, without the impact of acquisitions, divestitures, volatility in digital assets and cryptocurrencies and fluctuations in foreign currency exchange rates.

Adjusted EBITDA margin: Adjusted EBITDA margin means Adjusted EBITDA divided by revenue.

Adjusted EBITDA less capital expenditures conversion: Adjusted EBITDA less capital expenditures conversion means Adjusted EBITDA less capital expenditures divided by Adjusted EBITDA. We use Adjusted EBITDA less capital expenditures conversion to measure our capacity to convert Adjusted EBITDA into Adjusted EBITDA less capital expenditures.

Combined leverage ratio: Combined leverage ratio means net debt divided by Combined trailing twelve months adjusted EBITDA. Net debt represents the carrying amount of Nuvei's Total credit facilities excluding unamortized transaction costs less Cash and cash equivalents. We use Combined leverage ratio as an additional measure to monitor our financial leverage.

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.

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 customers 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 APMs 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 customers, fluctuations in Total volume will generally impact our revenue.

Organic total volume at constant currency: Organic total volume at constant currency is used as an indicator of performance of our business on a more comparable basis. This measure helps provide insight on organic and acquisition-related growth and presents useful information about comparable Total volume growth. This measure also helps provide better comparability of business trends year-over-year, without the impact of fluctuations in foreign currency exchange rates. Organic total volume at constant currency means Total volume excluding Total volume attributable to acquired businesses for a period of 12 months following their acquisition and excluding Total volume attributable to divested businesses, adjusted for the impact of foreign currency exchange fluctuations. Foreign currency exchange impact in the current period is calculated using prior period quarterly average exchange rates applied to the current period foreign currency amounts.

Nuvei pro forma revenue:  Nuvei pro forma revenue represents Nuvei's reported revenue after giving effect to the acquisition of Paya as though such acquisition had occurred at the beginning of the period presented. Nuvei pro forma revenue is presented both on an aggregated basis and by channel. In order to align with the Company's presentation of revenue calculated in accordance with the accounting policies used to prepare the revenue line item presented in the Company's financial statement under IFRS, Paya's revenue contribution amounts are presented net of interchange fees, which was not the case for a small portion of fees prior to the acquisition of Paya by the Company. This presentation is consistent with the pro forma disclosure required under IFRS in Nuvei's condensed interim consolidated financial statements for the three months and nine months ended September 30, 2023. This measure helps provide insight on the combined revenue of the Nuvei and Paya businesses.

Nuvei pro forma revenue growth: Nuvei pro forma revenue growth represents Nuvei reported revenue divided by Nuvei pro forma revenue in the comparative year. This ratio is presented both on an aggregated basis and by channel. This ratio helps provide a better understanding of the additional contribution of the Paya business on Nuvei's year-over-year revenue growth. Nuvei pro forma revenue is used as a component of this ratio only until the completion of a full financial year following the acquisition of Paya.

Forward-Looking Information

This press release contains "forward-looking information" and "forward-looking statements" (collectively, "Forward-looking information") within the meaning of applicable securities laws, including Nuvei's outlook on Total volume, Revenue, Revenue at constant currency and Adjusted EBITDA for the three months ending December 31, 2023 and the year ending December 31, 2023 as well as medium and long-term targets on Revenue, Capital expenditures as a percentage of 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, statements relating to the Paya acquisition, including expectations regarding anticipated cost savings and synergies and the strength, complementarity and compatibility with Nuvei's business; 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 expectation to prioritize share repurchases with excess cash, 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 is forward-looking information. Economic and geopolitical uncertainties, including regional conflicts and wars, 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.

Forward-looking information is based on management's beliefs and assumptions and on information currently available to management, regarding, among other things, assumptions related to the Paya acquisition (including the Company's ability to retain and attract new business, achieve synergies and strengthen its market position arising from successful integration plans relating to the Paya acquisition); the Company's ability to otherwise complete the integration of the Paya business within anticipated time periods and at expected cost levels; the Company's ability to attract and retain key employees in connection with the Paya acquisition; management's estimates and expectations in relation to future economic and business conditions and other factors in relation to the Paya acquisition and resulting impact on growth in various financial metrics; assumptions regarding foreign exchange rate, competition, political environment and economic performance of each region where the Company operates; the realization of the expected strategic, financial and other benefits of the Paya acquisition in the timeframe anticipated; and the absence of significant undisclosed costs or liabilities associated with the Paya acquisition; and general economic conditions and the competitive environment within our industry. See also "Financial Outlook and Growth Targets Assumptions".

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. Nuvei's financial outlook also constitutes financial outlook within the meaning of applicable securities laws and is provided for the purposes of assisting the reader in understanding management's expectations regarding our financial performance and the reader is cautioned that it may not be appropriate for other purposes. Our medium and long-term growth targets serve as guideposts as we execute on our strategic priorities in the medium to long term and are provided for the purposes of assisting the reader in measuring progress toward management's objectives, and the reader is cautioned that they may not be appropriate for other purposes.

The Company's dividend policy is at the discretion of the Board. Any future determination to declare cash dividends on our securities will be made at the discretion of our Board, subject to applicable Canadian laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions (including covenants contained in our credit facilities), general business conditions and other factors that our Board may deem relevant. Further, the ability of the Company to pay dividends, as well as make share repurchases, will be subject to applicable laws and contractual restrictions contained in the instruments governing its indebtedness, including its credit facility. Any of the foregoing may have the result of restricting future dividends or share repurchases.

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, 2023 (the "AIF"). In particular, our financial outlook and medium and long-term targets are subject to risks and uncertainties related to:

• geopolitical risks relating to our business and industry, such as the Middle East conflict and the Ukraine-Russia conflict, including the resulting global economic uncertainty and measures and sanctions taken in response thereto;
• a declining level of volume activity and significant volatility in certain verticals, including digital assets, and the resulting negative impact on the demand for, and prices of, our products and services and the resulting effect on consumer spending trends;
• the rapid developments and change in our industry;
• intense competition both within our industry and from other payments providers and methods;
• changes in foreign currency exchange rates, inflation, interest rates, consumer spending trends, supply chain challenges and other macroeconomic factors affecting our customers and our results of operations;
• Nuvei's inability to successfully integrate the Paya business;
• legal proceedings that may be instituted, including related to the Paya acquisition, and the impact of significant demands placed on management as a result thereof;
• the potential failure to realize anticipated benefits from the Paya acquisition;
• potential undisclosed costs of liabilities associated with the Paya acquisition, which may be significant;
• the failure to retain Paya's personnel and customers;
• 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 customers, increasing sales to existing customers and attracting new customers;
• 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;
• any potential acquisitions or other strategic opportunities, some of which may be material in size or result in significant integration difficulties or expenditures;
• challenges related to our customers being small-and-medium sized businesses ("SMBs");
• concentration of our revenue from payment services;
• reliance on, and compliance with, the requirements of acquiring banks and payment networks;
• challenges related to the reimbursement of chargebacks from our customers;
• decline in the use of electronic payment methods;
• loss of key personnel or difficulties hiring qualified personnel;
• impairment of a significant portion of intangible assets and goodwill;
• increasing fees from payment networks;
• reliance on third-party partners to sell some of our products and services;
• misappropriation of end-user transaction funds by our employees;
• risks related to data security incidents, including cyber-attacks, computer viruses, or otherwise which may result in a disruption of services or liability exposure;
• fraud by customers, their customers or others;
• 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;
• regulatory compliance in the jurisdictions in which we operate, due to complex, conflicting and evolving local laws and regulations;
• the costs and effects of pending and future regulatory proceedings and litigation;
• challenges to secure financing on favorable terms or at all; and, 
• measures determined in accordance with IFRS may be affected by unusual, extraordinary, or non-recurring items, or by items which do not otherwise reflect operating performance, making period-to-period comparisons less relevant.

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.

Financial Outlook and Growth Targets Assumptions

The financial outlook for the three months ending December 31, 2023, and the year ending December 31, 2023, and specifically the Adjusted EBITDA, as well as the Adjusted EBITDA margin long-term growth target, reflect the Company's strategy to accelerate its investment in distribution, marketing, innovation, and technology. When measured as a percentage of revenue, these expenses are expected to decrease as our investments in distribution, marketing, innovation, and technology normalize over time.

Our financial outlook and growth targets are based on a number of additional assumptions, including the following:

• our results of operations and ability to achieve suitable margins will continue in line with management's expectations;
• our mix of channels and their expected contribution to consolidated revenue growth, with  Global commerce channel revenue growth in a range of 20%-30%; B2B, government and ISV channel revenue growth of 20%+; and improvement in SMB channel from negative mid-single digit revenue growth;
• we will continue to effectively execute against our key strategic growth priorities, and expanded end market and distribution opportunities, without any material adverse impact from macroeconomic trends on our or our customers' business, financial condition, financial performance, liquidity nor any significant reduction in demand for our products and services;
• losses owing to business failures of merchants and customers will remain in line with anticipated levels;
• existing customers growing their business and expanding into new markets within selected high-growth eCommerce end-markets, including online retail, online marketplaces, digital goods and services, regulated online gaming, social gaming, financial services and travel;
• economic conditions in our core markets, geographies and verticals, including resulting consumer spending and employment, remaining at close to current levels;
• that our operations, business and employees in Israel will not be materially disrupted or impacted by the Middle East conflict;
• assumptions as to the value of digital assets, foreign exchange and interest rates, as well as inflation;
• higher volatility and lower volume in digital assets; Nuvei expects the contribution of digital assets will continue to decline and to represent no more than 5% of revenue going forward;
• Nuvei's ability to retain and attract new business, achieve synergies and strengthen its market position arising from successful integration plans relating to the Paya acquisition;
• management's estimates and expectations in relation to future economic and business conditions and other factors, including in relation to the Paya acquisition, and resulting impact on growth in various financial metrics;
• assumptions regarding competition, political environment and economic performance of each region where Nuvei operates;
• the realization of the expected strategic, financial and other benefits of the Paya acquisition in the timeframe anticipated;
• the absence of significant undisclosed costs or liabilities associated with the Paya acquisition;
• our ability to cross-sell and up-sell new and existing products and services to our existing customers with limited incremental sales and marketing expenses;
• our customers increasing their daily sales, and in turn their business volume of our solutions, at growth rates at or above historical levels for the past few years;
• our ability to maintain existing customer relationships and to continue to expand our customers' use of more solutions from our Native Commerce Platform at or above historical levels for the past few years;
• our ability to leverage our sales and marketing experience in capturing and serving customers in North America and large enterprises in Europe and enable customer base expansion by targeting large enterprises in North America, with a focus in Core global commerce channel;
• our sales and marketing efforts and continued investment in our direct sales team and account management driving future growth by adding new customers adopting our technology processing transactions in existing and new geographies at or above historical levels and in the timeframe anticipated;
• our ability to further leverage our broad and diversified network of partners;
• our ability to expand and deepen our footprint and to add new customers adopting our technology processing transactions in geographies where we have an emerging presence, such as Asia Pacific and Latin America;
• our ability to expand and keep our portfolio of services technologically current through continued investment in our Native Commerce Platform and to design and deliver solutions that meet the specific and evolving needs of our customers;
• our ability to maintain and/or expand our relationships with acquiring banks and payment networks;
• our continued ability to maintain our competitiveness relative to competitors' products or services, including as to changes in terms, conditions and pricing,
• our ability to expand profit margins by reducing variable costs as a percentage of total expenses, and leveraging fixed costs with additional scale and as our investments in, for example, direct sales and marketing normalize;
• increases in volume driving profitable revenue growth with limited additional overhead costs required, as a result of the highly scalable nature of our business model and the inherent operating leverage;
• our continued ability to manage our growth effectively;
• we will continue to attract and retain key talent and personnel required to achieve our plans and strategies, including sales, marketing, support and product and technology operations, in each case both domestically and internationally,
• our ability to successfully identify, complete, integrate and realize the expected benefits of past and future acquisitions and manage the associated risks;
• the absence of adverse changes in legislative or regulatory matters;
• our continued ability to upskill and modify our compliance capabilities as regulations change or as we enter new markets, such as our customer underwriting, risk management, know your customer and anti-money laundering capabilities, with minimal disruption to our customers' businesses;
• our liquidity and capital resources, including our ability to secure debt or equity financing on satisfactory terms; and,
• the absence of adverse changes in current tax laws.

Moreover, and more specifically, our ability to achieve new revenue synergy opportunities from the Paya acquisition over the long term is based on a number of additional assumptions, including the following:

• the Paya standalone business achieving its projected annual revenue growth;
• our ability to leverage Nuvei's regulatory licenses/exemptions and relationships to capture market share and win new business in Paya's existing U.S. market;
• our ability to leverage Nuvei's global distribution and capabilities to offer an integrated Nuvei and Paya product offering outside of the U.S.; and
• our ability to continue to invest in expanding our Nuvei and Paya integrated product offering to win new business.

Contact:

Investors

Chris Mammone, Head of Investor Relations
Anthony Gerstein, VP of Investor Relations
IR@nuvei.com 

The Company operates its commercial organization and distributes its products and technology through three distinct sales channels: Global commerce, B2B, government and independent software vendors and small and medium sized businesses. In its Global commerce channel, the Company supports mid-market to large enterprise customers across multiple verticals with domestic, regional, international, and cross-border payments; leveraging its deep industry expertise and utilizing its modern scalable modular technology stack that is purpose-built for businesses whose operations span multi-location, multi-country, and multi-currency. In its B2B, government and ISV channel, the Company embeds its global payment capabilities and proprietary software into enterprise resource planning ("ERP") solutions and software platforms. The Company's SMB channel, consists of its North American based traditional SMB customers that utilize Nuvei for card acceptance.

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SOURCE Nuvei