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Investing.com -- Shares of Paysafe Limited (NYSE: NYSE:PSFE) fell 15% after the company announced its decision to sell its direct marketing payment processing business and provided preliminary financial results for the fourth quarter and full year of 2024 that missed consensus expectations. The transaction is expected to close within 30 days, subject to finalizing certain transition services-related items.
The payment solutions provider reported preliminary Q4 revenue of $420 million, falling short of the consensus estimate of $437.6 million. The revenue represents a marginal increase of 1% compared to the fourth quarter of 2023, or 4% when excluding the soon-to-be-disposed business.
For the full year 2024, Paysafe’s estimated revenue is $1,705 million, a 6% increase from 2023, or a 7% rise when excluding the business line set for divestiture. However, adjusted EBITDA for 2024 is anticipated to be $452 million, reflecting a 2% decrease from the previous year, or a 2% increase when excluding the disposed business.
The company provided a preliminary outlook for the full year 2025, expecting revenue growth to be between 6.5% and 8.0% and adjusted EBITDA margin to be between 27.1% and 27.6%, with adjusted EBITDA growth in the mid-teens. This forecast excludes the results of the disposed business for both 2024 and 2025.
Paysafe’s CEO, Bruce Lowthers, expressed that the divestiture aligns with the company’s focus on optimizing its portfolio and resources to target its most significant growth opportunities. CFO John Crawford highlighted the move as a significant step to improve financial performance by eliminating a declining, non-core revenue stream and reducing exposure to higher-risk verticals.
Despite the revenue miss and business divestiture, Paysafe remains optimistic about its core businesses, which performed in line with expectations for 2024, excluding the disposed business. The company continues to project strong free cash flow and aims to achieve a net leverage ratio of 3.5x by the end of 2026.
The detailed financial results and further insights into the company’s performance and outlook will be discussed in the upcoming earnings call next month.
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