Management highlights transformational
performance achieved year-to-date
TORONTO, Sept. 28,
2023 /CNW/ - Payfare Inc.
("Payfare'' or the "Company") (TSX: PAY) (OTCQX:
PYFRF), a leading fintech powering instant payout and digital
banking solutions for workforces, today commented that it is not
aware of any material events impacting operations that have
occurred to drive elevated share price volatility in the month of
September. Management is taking this opportunity to highlight the
financial and operational milestones achieved to date in 2023.
Financial Highlights for the Six Months Ended June 30, 2023:
- Increased revenue to a record $88.8
million representing a $32.2
million (+57%) increase compared to the same period in
2022.
- Ended Q2 2023 with 1,188,325 active users1, up by
304,074 active users (+34%) versus the prior year period.
- Total gross dollar value (Total GDV)1 was
$5.5 billion, an increase of
$2.1 billion (+63%) over the first
half of 2022.
- Net income of $3.4 million, or
$0.07 per share, up $8.4 million (+168%), compared to the same period
in 2022.
- Adjusted net income1 of $8.1
million, or $0.17 per share,
representing growth of $8.4 million
compared to the prior year period.
- Adjusted EBITDA1 of $7.8
million, reflecting an $8.4
million increase compared to the same period in 2022.
- Free cash flow1 of $4.7
million which equates to growth of $8.6 million (+221%) over the prior year
period.
- Ended Q2 2023 with a cash balance of $52.0 million and no debt.
Year-to-Date 2023 Operational Highlights :
- In its Q2 2023 financial results Payfare announced that it was
successfully selected in two Request for Proposal (RFP) processes
to launch new private label and embedded finance programs for
globally recognized strategic partners on its platform.
- Launched a new cashback rewards program partnering with Upside
to provide personalized price promotion offers at fuel stations,
restaurants, convenience and grocery stores to Dasher Direct
cardholders.
- Introduced Avibra's suite of free and low-cost health and
wellness protection and perks access to Dasher Direct
cardholders.
- Expanded the partnership with NCR Corporation to deliver self
service financial tools for US cardholders by providing access to
Allpoint+ cash accepting ATMs, enabling cash deposits in addition
to cash withdrawals, and NCR Pay360, an API solution that allows
cardholders to access cash via Payfare's digital banking apps.
- As of July 28, 2023, Payfare's
Common Shares qualified for trading in the United States on the OTCQX Best Market,
having been upgraded from the OTC Pink Market. The shares trade
under the symbol "PYFRF" and will facilitate trading by interested
Payfare investors in the United
States.
"While the recent share price volatility is disappointing it
does not impact Payfare's ability to execute on its growth
initiatives," said Marco Margiotta,
CEO and Founding Partner of Payfare. "Our business generates
positive net earnings and free cash flow which eliminates the need
for external financing to fund our robust pipeline of organic
growth opportunities."
About Payfare (TSX:PAY)
Payfare is a global financial technology company powering
digital banking and instant payment solutions for today's gig
workforce. Payfare partners with leading platforms and
marketplaces, such as Uber, Lyft and DoorDash, to provide financial
health for their workforce.
For further information please visit www.payfare.com
1Non-IFRS and Supplementary Financial
Measures
This press release contains references to "active users", "Total
GDV", "adjusted net income (loss)", "adjusted net income (loss) per
share", "EBITDA", "Adjusted EBITDA" and "free cash flow", which are
not measures prescribed by International Financial Reporting
Standards (IFRS). These supplementary financial measures are
provided as additional information to complement IFRS measures by
providing a further understanding of our results of operations from
management's perspective, to provide investors and security
analysts with supplemental measures to evaluate the financial
performance of the Company and highlight trends in our core
business that may not otherwise be apparent when relying solely on
IFRS financial measures. Management also uses non-IFRS and
supplementary financial measures to facilitate operating
performance comparisons from period to period, prepare annual
operating budgets and strategic business plans and to evaluate and
price potential acquisitions. Accordingly, non-IFRS and
supplementary financial measures should not be considered in
isolation or as a substitute for analysis of our financial
information reported under IFRS. Such measures do not have any
standardized meaning prescribed by IFRS and, therefore, may not be
comparable to similar measures presented by other corporations. The
non-IFRS and supplementary financial measures are not subject to
standard industry definition and our definitions and method of
calculation may differ from other issuers and therefore may not be
comparable to similar measures presented by other issuers.
The Company determines the number of users to its services based
on active users. "Active users" represent users who have loaded
earnings and direct deposits on their card in the period. "Total
GDV" is defined as the aggregate dollar amount of active user
earnings and direct deposits loaded on their payment card during
the period.
"EBITDA" means net income (loss) before amortization and
depreciation expenses, foreign exchange loss (gain), amortization
of deferred income, finance and interest costs (income), current
tax expense and change in fair value of derivative liability.
"Adjusted EBITDA" adjusts EBITDA for stock-based compensation
expense, transactional gains or losses on assets, asset impairment
charges, loss on extinguishment of debts, gains or losses from
changes in fair value of derivative financial instruments and
contingent consideration liabilities measured at fair value through
profit or loss, gains or losses from disposals of equipment, net
income or loss from equity accounted investees, restructuring costs
and non-recurring expense items. Non-recurring expense items are
transactions or events which management believes will not re-occur
within the foreseeable future and includes legal and professional
fees related to claim settlements, acquisition, divestiture and
going public transaction.
The table below reconciles net income (loss) to EBITDA and
Adjusted EBITDA for the three and six months ended June 30, 2023 and 2022.
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
In CAD
$
|
2023
|
|
2022
|
2023
|
|
2022
|
Net income
(loss)
|
$
2,113,525
|
|
$
(2,310,824)
|
$
3,402,401
|
|
$
(5,015,362)
|
Add:
|
|
|
|
|
|
|
Current tax
expense
|
28,099
|
|
-
|
45,368
|
|
-
|
Finance
income
|
(287,090)
|
|
(123,752)
|
(769,972)
|
|
(189,087)
|
Other
income
|
(1,607)
|
|
(32,946)
|
(9,397)
|
|
(72,908)
|
Foreign exchange
loss
|
370,450
|
|
26,998
|
425,681
|
|
28,424
|
Amortization of
intangible assets
|
713,262
|
|
209,038
|
1,285,245
|
|
398,319
|
Depreciation of
building, property
and equipment
|
34,917
|
|
36,966
|
70,433
|
|
69,970
|
EBITDA
|
2,971,556
|
|
(2,194,520)
|
4,449,759
|
|
(4,780,644)
|
Adjustments:
|
|
|
|
|
|
|
Restructuring
expense/other
|
688,829
|
|
-
|
1,303,319
|
|
-
|
Share based
compensation
|
1,095,813
|
|
2,485,980
|
2,037,506
|
|
4,212,902
|
Adjusted
EBITDA
|
$
4,756,198
|
|
$
291,460
|
$
7,790,584
|
|
$
(567,742)
|
"Adjusted net income (loss)" adjusts net income (loss) for
share-based compensation expense, amortization and depreciation
expenses, transactional gains or losses on assets, asset impairment
charges, loss on extinguishment of debts, gains or losses from
changes in fair value of derivative financial instruments and
contingent consideration liabilities measured at fair value through
profit or loss, gains or losses from disposals of equipment, net
income or loss from equity accounted investees, restructuring
costs and non-recurring expense items. Non-recurring expense items
are transactions or events which management believes will not
re-occur within the foreseeable future and includes legal and
professional fees related to claim settlements, acquisition,
divestiture and going public transaction. The table below
reconciles net income (loss) to Adjusted net income (loss) for the
three and six months ended June 30,
2023 and 2022.
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
In CAD
$
|
2023
|
|
2022
|
2023
|
|
2022
|
Net income
(loss)
|
$
2,113,525
|
|
$
(2,310,824)
|
$
3,402,401
|
|
$
(5,015,362)
|
Add:
|
|
|
|
|
|
|
Amortization of
intangible assets
|
713,262
|
|
209,038
|
1,285,245
|
|
398,319
|
Depreciation of
building, property
and equipment
|
34,917
|
|
36,966
|
70,433
|
|
69,970
|
Restructuring
expense/other
|
688,829
|
|
-
|
1,303,319
|
|
-
|
Share based
compensation
|
1,095,813
|
|
2,485,980
|
2,037,506
|
|
4,212,902
|
Adjusted net income
(loss)
|
$
4,646,346
|
|
$
421,160
|
$
8,098,904
|
|
$
(334,171)
|
"Adjusted net income (loss)" per share is calculated as
Adjusted net income (loss) divided by the basic weighted average
number of shares outstanding during the period.
The Company defines its free cash flow as cash from operating
activities less cash used in investing activities (including
additions to intangible assets and purchase of building, property
and equipment). The table below reconciles cash from operating
activities to free cash flow for the three and six months ended
June 30, 2023 and 2022.
|
Three months ended
June 30,
|
Six months ended
June 30,
|
In CAD
$
|
2023
|
|
2022
|
2023
|
|
2022
|
|
|
|
|
|
|
|
Cash from operating
activities
|
$
1,945,639
|
|
$
(3,619,877)
|
$
7,263,567
|
|
$
(2,274,911)
|
Less: Cash used in
investing
activities
|
|
|
|
|
|
|
Purchase of
building,
property and equipment
|
(2,930)
|
|
(13,320)
|
(4,213)
|
|
(86,407)
|
Additions to
intangible assets
|
(1,369,002)
|
|
(879,719)
|
(2,561,099)
|
|
(1,527,901)
|
Free cash
flow
|
$
573,707
|
|
$
(4,512,916)
|
$
4,698,255
|
|
$
(3,889,219)
|
Additional information on these measure may be found under the
heading "Definitions – IFRS, Additional GAAP and Non-GAAP
Measures" in the MD&A for the three and six months ended
June 30, 2023 which is available
under Payfare's profile on SEDAR+ at www.sedarplus.ca and is
incorporated by reference to this press release.
Forward-Looking Information
This press release contains forward-looking information within
the meaning of applicable securities legislation, which reflects
Payfare's current expectations regarding future events as of the
date hereof. Such forward-looking information may include but are
not limited to statements regarding growth initiatives, success in
two recent RFPs, business continuing to generate positive net
earnings and free cash flow, the launch of new features and
partnerships, and robust pipeline of organic growth opportunities.
Forward-looking information is based on a number of assumptions and
is subject to a number of risks and uncertainties, many of which
are beyond Payfare's control, that could cause actual results and
events to differ materially from those that are disclosed in or
implied by such forward-looking information. Such risks include the
factors discussed under the "Risk Factors" section in Payfare's
MD&A for the year ended December 31,
2022. Other factors that could cause actual results or
events to differ materially include the inability of Payfare to
launch and market its new programs or platforms that are planned in
a timely manner, Payfare's inability to realize on growth
initiatives or on its pipeline of opportunities, the decline in
third party ranking of Payfare's mobile apps, the impact of
inflation and rising costs of goods and services on Payfare's
business model which may impact management's expectations on active
user growth in the year 2023 and beyond, the failure to enter into
definitive agreements with parties who have selected Payfare
through their RFP processes, Payfare's ability to finance and
support new programs and platforms, a general decline in the credit
markets, gig economy or confidence in the banking sector in
North America. Accordingly,
readers should not place undue reliance on forward-looking
information. Payfare does not undertake any obligation to update
such forward-looking information, whether as a result of new
information, future events or otherwise, except as expressly
required by applicable law.
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SOURCE Payfare