Payoneer at 53rd JPMorgan Conference: Strategic Shifts and Growth

On Wednesday, 14 May 2025, Payoneer Global Inc (NASDAQ:PAYO) participated in the 53rd Annual JPMorgan Global Technology, Media and Communications Conference. The event highlighted Payoneer’s strategic focus on B2B customers and its resilience amidst global disruptions. Despite challenges, the company emphasized profitable growth and expanding partnerships, particularly in India.

Key Takeaways

• Payoneer reported a 42% revenue growth over the past two years and has become profitable.
• The company is focusing on B2B customers, with a notable partnership with Alibaba.com in India.
• Payoneer experienced a 37% growth in B2B revenue in Q1 2025.
• Udemy is integrating AI to enhance learning experiences and shifting towards a subscription model.
• Udemy’s enterprise business is growing at 9%, with a significant international revenue contribution.

Financial Results

Payoneer has demonstrated robust financial performance, with a 42% revenue increase over the last two years. The company achieved profitability, with a significant shift towards B2B customers, resulting in a 37% growth in B2B revenue in Q1 2025. The core business turned around from a $14 million loss in 2023 to generating $14 million in core adjusted EBITDA in 2024.

Operational Updates

Payoneer’s strategic shift towards B2B customers has been a key focus. The company has maintained a stable headcount, which has contributed to improved profitability. The partnership with Alibaba.com aims to support India-based sellers, reflecting Payoneer’s commitment to expanding its global footprint. Additionally, the company is applying for a license in India to enhance its operations.

Future Outlook

Payoneer is positioning itself to capture a larger share of the cross-border SMB economy, which remains largely underserved. The company aims for 100% of a business’s international accounts receivable and accounts payable to flow through its platform. With a focus on high-growth markets in APAC and Latin America, Payoneer expects continued revenue growth.

Q&A Highlights

During the conference, Payoneer’s CEO John Kaplan emphasized the company’s resilience in the face of global disruptions, such as the war in Ukraine and the SVB collapse. He noted that while macroeconomic factors pose challenges, Payoneer’s global presence and adaptability ensure sustained growth.

For more details, please refer to the full transcript below.

Full transcript - 53rd Annual JPMorgan Global Technology, Media and Communications Conference:

Unidentified speaker, Host: Great. Thank you everyone for being here today and for joining the fireside chat with Payoneer. I’m here with John Kaplan. John currently serves as CEO and director at Payoneer, a financial technology company empowering the world’s small and medium sized businesses to transact, do business, and to grow globally. John is an executive, investor, and entrepreneur with a track record of scaling companies.

Prior to joining Payoneer, John was president of North America and Europe at alibaba.com, the cross border b to b business unit of Alibaba Group. In this role, he helped lead its transformation into one of Alibaba Group’s fastest growing and most profitable business units. John, thank you for being here. Pleasure to see you.

John Kaplan, CEO and director, Payoneer: It’s awesome to be here. Thank you so much for having me.

Unidentified speaker, Host: To start, John, can you provide for folks a quick overview of Payoneer and why does Payoneer exist?

John Kaplan, CEO and director, Payoneer: Yeah, so thrilled to do it and really glad to be at the conference. It’s great to see the energy at the conference. Payoneer is a twenty year old business. We just celebrated our twentieth anniversary, which we’re very proud of. And our mission is to connect the world’s cross border businesses to the rising global economy.

We are on the ground. We have customers in 190 countries and territories. What we’re working on doing is taking the complexity out of cross border payments, the complexity out of cross border accounts receivable and accounts payable. We offer a sophisticated but yet simple to use global account for cross border businesses and that creates a financial stack. And that financial stack enables businesses that are doing business anywhere to anywhere, to have the tools they need to compete, whether it’s using our card product or our workforce management, newly acquired business, 100% of someone’s international AR and their international AP funnels through the Pay in Your Account, and we are a business that is had 42% revenue growth in the last two years, turned the business, core business profitable.

We are we have teams on the ground in 35 countries. We’re a business with momentum.

Unidentified speaker, Host: Excellent. So John, you’ve been with the company almost three years now. What initially attracted you to Payoneer and why did you join and tell us about how you came to work here.

John Kaplan, CEO and director, Payoneer: Yeah, so if you scratch me, I bleed entrepreneurship. Know, I really care about helping entrepreneurs achieve their business dreams. I’m passionate about entrepreneurs. I’m particularly passionate about those that are competing cross border in most of the world. When you start a business, you go global from day one.

You’re either sourcing human capital or capability internationally and you’re selling your goods or services internationally from day one. And I think that’s largely misunderstood by folks in The United States where you can get rich between Boston, Philadelphia and New York. There’s enough consumer demand right here at home in The U. S. To drive a business success.

But in most parts of the globe, to be successful you’re participating in the global economy. And when I had the incredible opportunity to come join Payoneer, what I saw was a unique set of assets, regulatory assets, product and infrastructure assets, a brand that is well loved and respected by entrepreneurs around the globe. Like if we were in Manila right now, 5,000 people would be in this room. Payoneer is synonymous with entrepreneurship around the globe. And the ecosystem of relationships the team had put in place with bank partners, with big marketplaces around the world like Amazon or or Coupang or Walmart or Etsy or Airbnb really created a platform that I saw that could be expanded to be a bigger business.

You know, we are when I arrived, the company had 20 some odd percent share in what is considered the marketplace payouts business, which is a $300,000,000,000 market. You know, Payner largely innovated and created the industry to help global sellers participate in western marketplaces, but there was an even bigger opportunity in front of the firm. And that bigger opportunity really was cross border payments for B2B, for SMBs and emerging markets. And those four themes, when we looked at the assets Payneer had assembled, those four themes we were uniquely positioned not just to innovate in, but to capture significant market share. And that’s what has been powering our growth.

Unidentified speaker, Unidentified: We’ve put

John Kaplan, CEO and director, Payoneer: in place changes inside the firm to go after it. We have an extraordinary executive management team. You know, the people who are leading Payoneer are the best entrepreneurs I’ve ever had a chance to partner with. So together, we’re really excited that we’re in the earliest innings of what is a very big and exciting growth trajectory for the firm.

Unidentified speaker, Host: You know, in the last three years, the market’s evolving rapidly. It’s changing, you know, every day. What you how has the company evolved since you’ve joined and, you know, what are some of the things that excite you going forward?

John Kaplan, CEO and director, Payoneer: Yeah. I think I think the first and sort of the most central thing that’s happened is that we’ve evolved our strategy at Payoneer from a one size fits all approach to a much more focused customer go to market and product and pricing strategy. And we are and we’ve shared this in our disclosures, we have 2,000,000 active customers. We love all of them. We get 11,000,000 applications a year from people around the globe who want Payoneer accounts, but we are very focused on the B2B customer, the customer that needs a comprehensive set of financial solutions both on AR and AP, and those customers are generally larger.

Their entities exist in multiple geographies. Their headquarters might be in Ho Chi Minh City, but they have an operation in Dubai and in Colombia and in Turkey. And that isn’t easy for a 50 person organization. You know, we just celebrated as I said, our twentieth anniversary and we had a customer here in The United States, The firm is called IA Blueprint. Bo Pilgrim runs the business from Louisiana.

Bo helps U. S. Based insurance companies and insurance agents outsource part of their operation to The Philippines. And he uses our Payoneer Workforce Management product to both manage employees around the globe and pay contractors around the globe. And it is incredibly exciting to see how our business is growing because we’re expanding the suite of services we offer and who we offer it to.

We delivered 20% revenue growth in 2024, well ahead of the medium term targets we had and much greater than our 20235% revenue growth. And we’ve unlocked significant leverage in our business. Our headcount has largely remained flat for a couple of years now. We’ve taken the business from money losing to money making. We have great momentum, disciplined focus on driving profitable revenue growth and lots of opportunity and runway in front of us.

Unidentified speaker, Host: That’s great. Payoneer, you joined in the last few years, you’ve built out the management team, you’ve invested in the business. What are some of your proudest accomplishments in the last few years since you joined?

John Kaplan, CEO and director, Payoneer: Yeah, think the proudest thing that I could look at is not just the team we have, the culture we’ve built, the customer love and centricity in the organization, it’s just how resilient Payoneer is, right? During my tenure leading the firm, we’ve had the war in Ukraine, October seventh, and then the most recent we had the SVB collapse, most recent event with the tariffs. And Payoneer is so resilient and so global and so necessary in the lives of our customers that while short term macro disruptions are time consuming, gray hair inducing things, our business is very strong and resilient. So I’m particularly proud of that and the capability our organization has to weather what a weaker firm wouldn’t grow through. And we’re strong and we’re growing through them.

So I’d say that’s one. The second is we’re in the earliest stages of our growth journey. The momentum in the firm is really exceptional. We’ve shared six plus quarters of 30% growth in our card product. We had 39% or 37 growth in our B2B revenue in the first quarter, ’16 percent revenue growth overall in our core business in Q1, expanded profitability in the first quarter.

So we’re in the earliest stages of a multi year growth journey that this team is capable of executing against in a disciplined and focused way. Another particularly proud accomplishment at Payoneer is how we’ve refined our focus on our customer. We’ve defined who our best customers are and we’re disciplined about focusing on quality customers. The investments we’ve made in the SMB grade financial stack, cross selling the stack. The data in platform shows customers who use more of our accounts payable bring in more accounts receivable and stay longer.

So, our net revenue retention grows really nicely. And then at the end of the day delivering value for shareholders. Twenty twenty three, the firm core business lost $14,000,000 2024 we generated $14,000,000 of core adjusted EBITDA. Being innovators who are also disciplined on costs and focused on growth, those things together create shareholder value.

Unidentified speaker, Host: And maybe we could talk a little bit about the industry in the competitive landscape. Can you talk a little bit about the industry, what you’re seeing not only in the cross border payments landscape, but you know, who your main competitors are, who do you see? I imagine it varies by geography quite a bit. You guys are, you know, very global, so you probably it’s it’s a pretty fragmented environment, but would love to hear your thoughts on it.

John Kaplan, CEO and director, Payoneer: Yeah. I love this question because people don’t realize I think often don’t realize how big the cross border SMB economy really is and don’t understand that in a 90 countries and territories, Payoneer is a meaningful part of the export economy and the import economy. We sit at the intersection of what I think are underserved but incredibly exciting areas in cross border payments. The first is cross border in and of itself. The second is B2B.

Businesses as the digitization economy grows, as the globalization economy continues to grow despite the sort of near term news about the trade war and tariffs, I do think that that news in fact brought more eyes on how important SMB is in cross border, the cross border economy is. And then the emerging markets. In India, we shared in earnings a week ago that we’re in the process of applying for our license in India. We are excited about a new partnership that I’m sharing for the first time today with you with Alibaba.com where we’ve just partnered with Alibaba.com to help India based exporters onboard into the Payoneer account and participate in the cross border export economy. I think that’s very exciting sort of signal for how necessary India is and how much momentum Payoneer has both in our ecosystem of partnerships and the value we provide to SMBs around the world.

As it relates to who we take share from, really we’re not PayPal is a competitor, but we do a lot of business together and there’s enough room for both of us to grow and capture share. We complement one another pretty nicely. We actually are disrupting the local analog bank. 90% of cross border B2B payments are activity is happening between an analog old world bank and another bank around the world. And they don’t have the technology, multi currency account capability, support 20 fourseven support services, they’re built for the old economy and Payoneer is built for the new economy.

So, as you’re right, the landscape is fragmented and different. What we do in Argentina may be a little bit different than what we do in Pakistan. But at the end of the day, young people and entrepreneurs are changing the global economy and driving the innovation and those people choose Payoneer as the solution to be their financial solution cross border.

Unidentified speaker, Host: Yeah. I mean I can’t imagine how much friction there is in setting up a business and selling globally. These answers may seem obvious, but why do you guys win? What’s your right to win in the global marketplace? What do you think differentiates you from some of the competitors that you mentioned in the marketplace?

John Kaplan, CEO and director, Payoneer: Yeah. So probably the most important dynamic of Payoneer is both that we’re global and local. Right? We are integrated into local ecosystems with local customers, with people who speak to understand local traditions, but also have built a global regulatory moat around the business, a brand, payment infrastructure, and capability that enables a business anywhere to do business everywhere. And that is a competitive advantage for us without question.

I think probably the single most important reason we have the right to win. The next is we’re a customer focused company. The 500 person SMB in Serbia is not getting the attention from a multinational bank. But they have multinational financial needs that the local branch of a multinational bank can’t serve or won’t serve, but Payoneer, that is our target customer. We’re giving them the support they need and we’re part of their we coach the Little League team with them, like we’re part of their community.

I think that’s pretty important. And I do think we’re so responsive to the needs of our customers that our product roadmap and our innovation roadmap is focused on that unique customer. And we had at our twentieth anniversary, I was sharing with you before we got on stage here, the at the twentieth anniversary that we had a celebration of entrepreneurship. We brought together customers from around the globe into New York along with our colleagues and employees and listened to them talk about how valuable a multi currency account is. If you’re an entrepreneur in Colombia and your customers are in Venezuela, the traditional banks generally charge you 30% to move the money from point A to point B.

So our 3% feels pretty good to that entrepreneur. And the fact that he can do it in the palm of his hand in his Payoneer mobile account with all the invoicing capability connected to his Payoneer card so his employees when they go global on business trips, they can track their expenses, makes doing business easier. We don’t help them grow their business by selling their products or price their products, but we make the financial activity simpler. And the office of the CFO for a cross border emerging market SMB is not easy. I listened to Bill at Renee’s interview yesterday and he was talking about how valuable the Bill.com product is to US based SMBs, And in some ways we mirror that on the others around the world.

And as investors and shareholders and customers begin to take a look at Payoneer and understand our revenue growth rate, our profitability, our utility for SMBs, the question about the competitive landscape becomes clearer and clearer. There isn’t somebody in most of the world delivering the value we deliver to a customer that without us struggles.

Unidentified speaker, Host: Yeah. That’s great analogy in serving the market that’s not served around the world. One of the topics in terms of the industry that has come up in a lot of our client conversations recently, whether it’s a consumer remittance player or if you talk to Visa or you talk to SMB focused players in the industry is just is the role evolving role of stable coins in the industry and how is that going to impact cross border payments and trade. Can you talk a little bit about that? Have you thought about it?

Are you guys focused on it? What are you seeing in

Unidentified speaker, Unidentified: the market?

John Kaplan, CEO and director, Payoneer: I think this is a really exciting opportunity and we’re probably one of the best positioned firms to benefit and capitalize on it. And the reason for that is we’re trusted at the last mile. We’re trusted by the person who has to not just receive the stablecoins, but use them and convert them into their local currency. So it is a very interesting long term opportunity and one that we’re exploring. In many ways, if you look at the history of Payoneer over twenty years, as our volumes have grown, our balances that we hold with our customers have grown as well.

$6,600,000,000 of customer balances funds held today. And in some ways, we provide a similar utility today to customers in emerging markets who are holding stable fiat currencies and we think of stable coins as another form, another payment rail that Payoneer is, I think, best positioned to capitalize on and innovate around and partner with the ecosystem of infrastructure firms who’ve built really purpose built infrastructure that can integrate with a platform like Payoneer to bring more mainstream the utilization of cross border stablecoin payments, right? So that as those use cases develop that they’re deployed by people who are doing real business cross border, not this sort of peripherally side of it. And so, continue to talk to partners. There’s nothing new to announce today, but it’s an important innovation opportunity and one that we think we’re uniquely positioned to participate in.

Unidentified speaker, Host: Maybe we could switch gears into the macro. There’s obviously a ton going on in the market. You saw some of the announcements yesterday on trade. You know, obviously, there’s been conflict with China. There’s been tariffs.

Those are moving around quite a bit. We get a lot of questions from our clients around how this is going to impact their business. Can you talk a little bit about how the macro is affecting your customers, their business, your business, and what you guys see going forward?

John Kaplan, CEO and director, Payoneer: Yeah, so let’s start with our customers, which is as a customer first organization, let’s start with how they’re thinking and what they’re doing and then we can go broader from there. It is obviously a dynamic, rapidly changing environment, and entrepreneurs are the most creative, the most focused on finding solutions, and the most resilient. So, we’ve had a front row seat to see cross border businesses driving change in their own business because of decisions outside of their own control. And what sellers and businesses are doing to what industry they’re in, what corridors they trade in, where they source or sell, what margin structures they have in their business, and where they want to invest and diversify. So I think I wouldn’t paint sellers with one picture, I think there really depends by geography, industry and margin profiles.

In our financials, we haven’t seen any deterioration of our results as a result of the disruption from the trade. We’ve Maybe more gray hair, but no impact in the P and L. And we expect our Q2 growth to be in line with our medium term targets, which I think is a very important signal about how important Payoneer is and where we are in the trade cycle. Sellers in China specifically where we have a third of our revenue at Payoneer are exporters from China. And we shared last week at Q1 earnings that 15% of our total revenue are China Sellers selling to the rest of the world, not to The United States.

And so this is a corridor and corridors to Europe, Latin America, The Middle East, Australia where we have well worn tracks and relationships and distribution, and those channels will grow because the China based sellers who are manufacturing high quality low cost goods want to sell them wherever they can, and they are focused on expanding their market distribution. They’re focused on optimizing their pricing for the 20% of volume that is on our platform that are China based sellers to The United States. They’re focused on optimizing their pricing, evaluating their cross border logistics, thinking about their supply chains themselves, addressing their product mix. If you had 100 SKUs January 1, on May 15 looking at the tariff environment to adjust at 30% tariffs or 40% tariffs, what products, what margins are the most important products. Going from 145 tariffs which is effectively an embargo to a more manageable tariff environment where we’re currently in during the pause gives the sellers more I think latitude to adjust and manage their business.

Nobody wants empty shelves in The United States, that’s for sure, and those sellers want to have invested a lot in driving the distribution of their products. One of the things Scott that I find really interesting is 43% of the world’s consumer consumption happens in The United States. So, is no seller in Vietnam or China or Bangladesh or India that isn’t doesn’t care about preserving and capturing competing for that shelf space, and they are really focused on doing that. And I shared with you the news about our Alibaba.com announcement. We signed a deal with Alibaba.com to offer the Payoneer account to their thousands of India based sellers on their platform.

We are India is one if not the fastest growing global exporting GDP, 7% GDP growth or better, 1,400,000,000 people. We’ve shared that we’re underway in applying for the license there. We’re excited about our momentum in India and we think that’s an important geography for us.

Unidentified speaker, Host: Yeah, congratulations on that. That’s a really Maybe we could switch bit to the product. I think you’ve touched on this before, but you mentioned creating a comprehensive financial stack for your customers. It’s very exciting.

Obviously, you have a core SMB marketplace business. You’re helping these customers with checkout. You’re helping them with b to b goods and services, accounts payable. What’s really exciting is the workforce management and payroll applications that you have. It’s becoming a really big financial stack.

What’s exciting to you? What’s growing fast? Some of the things that you’re doing with your customers?

John Kaplan, CEO and director, Payoneer: Yeah, you nailed it, right? We want 100% of a business’ international AR to flow into their Payoneer account. You sell on 15 marketplaces around the world, consolidate all that AR into your Payoneer account. You sell your goods wholesale, use Payoneer to invoice people around the world. You sell direct to consumer, use the Payoneer checkout solution.

So all of that international AR flows in. And at the same time, we want to serve 100% of our businesses cross border AP needs. And whether that’s withdrawing some funds to your local bank because you have to pay your local rent and you’re going to use your local bank account to do that, but more than anything we’re focused on helping our customers pay suppliers, pay international employees, use our FX tools to manage currency, and increase the penetration of our card solutions with our global customers. I think this is maybe overlooked by people the power of the Payoneer card franchise, because our AP tools, the growth of our AP tools, 30 some odd percent growth of card usage each quarter for the last six or more quarters, indicates with a platform that has $80,000,000,000 of AR flowing through it and just about $6,000,000,000 of card spend on it, how much upside we have in our card product. And I think you’d understand this, I certainly see it in my own behavior.

Once I use a card for my personal accounts payable, it’s hard to take it out of my wallet, right? I create loyalty and stickiness around it. We see exactly the same data with our customers. The more AP tools our customers use, the more our volume flows into the platform, the broader their network inside of our company platform grows and the better the net revenue retention and logo retention is. So, AP plus AR and a multi currency account at Payoneer is I think a killer app for cross border SMBs.

The team is our product and edge team is so strong and what they’re doing is constantly driving to drive the simplicity, speed, utility and convenience of the Payoneer application so more businesses can focus on doing business. And so, we feel good about where we are, the investments we’re making in the product, and think they will continue to help us capture more share and more share of wallet from the customers we have.

Unidentified speaker, Host: Yeah, it’s really interesting. I mean you see in the office of the CFO people focused on the enterprise and the mid market, you have US, but what you guys are doing in SMB globally, it’s just a very we see as a very underserved market.

John Kaplan, CEO and director, Payoneer: Yeah. And just if you look at the enterprise companies, the payments firms focus on the enterprise, generally see take rate erosion. Well Payoneer, we’ve seen 16 bps of take rate expansion over the last couple of years and continue to see more there. I think that’s again an overlooked dynamic of our business. 2,000,000 active customers, 560,000 of what we call our ICPs, which is a blunt force definition of customers, but the simple way to think of it is a bigger multi entity cross border business makes us more money and uses more of our products and we have more run a lot more runway in front of us with those customers to drive profitable revenue growth with high value customers and expand our take rate.

And I think that speaks to the strength of trust that our customers have with Payoneer. They’re not nickel and diming us on our fees. What they’re actually doing is using more and more of our

Unidentified speaker, Host: Yeah, a huge market opportunity. I mean, bigger SMB pool, global, higher obviously better economics with those customers. They’re growing a lot faster than some of the other up market parts of the market. Maybe I’ll open it up to the floor for any audience questions if there are any. Okay.

We’ll keep going. So you mentioned earlier about your customer base. One

Unidentified speaker, Unidentified: of

Unidentified speaker, Host: the things you’ve done successfully is really focused on your ideal customer profile. Obviously, moving a little bit more to larger customers. You’ve mentioned that take rates expanding, ARPUs expanding over time. So what is it about these larger customers? Are you able to sell more of your products and services that some of which we just went through?

Tell us about that target segment.

John Kaplan, CEO and director, Payoneer: Yeah. I think the our 560,000 ICPs in the multi entity cross border SMB is underserved by the financial services landscape and we intend to serve them. We are very focused on delivering them the products and services they need, whether an SMB that sells on a marketplace, an SMB that sells B2B, or even some of the smaller enterprise partners that are turning to Payoneer because they want to use our platform to handle their payouts globally. What we see is that we’re increasingly focused on high growth, service oriented, emerging market customers, particularly in places like APAC and Latin America. In Q1, we saw 20% plus revenue growth in APAC and Latin America.

Those regions together are a third of our total revenue, And the firm overall had 16% core revenue growth. And there is given the shifting reshaping global trade landscape, we think really strong product market fit for us in APAC and Latin America and good tailwinds for our business there. And as it relates to ARPU expansion, we’re getting smarter and smarter and more bespoke about our pricing. And going from a one size fits all approach to more disciplined look at corridors, customers, geographies, and industries, and that’s having a positive impact. We’ve looked at the bundling of our products and services more sensibly, so that we can cross sell more products into our customers in a bundled way.

And we think we’ll see strong take rate expansion over the next number of quarters and years because there is value in what we’re providing and we’ve shown that the elasticity of our pricing isn’t having a negative impact either on our customer retention or our customer acquisition. So it feels like today the more product value we provide for customers, we can charge even more for it.

Unidentified speaker, Host: I think we have a question in the audience.

Unidentified speaker, Audience Member: Here. So, I’ve been listening to you and I’m trying to wrap my head around because I do a lot of work in emerging markets. Hi. So, I do a lot of work in emerging markets and I’m trying to wrap my head around, are you seeing a big difference now given the tariff conversation that’s happening on the product side, so FMCG products or the services side, right? So, outsourcing technology to India or APAC, right?

So, where are you seeing the shift if at all you’re tracking that information?

John Kaplan, CEO and director, Payoneer: Yeah, we haven’t seen a shift in our activity or engagement with our customers by category or by geography. If you’re a goods exporter in Vietnam, you’re thinking differently about the business, where you’re going to sell to, where you’re to hold pallets and container loads of product, similar for a China based exporter. If you’re a services business in most of the globe, there’s lots of opportunity to sell globally and have not been largely impacted by the tariffs. There have been some concern about if a consumer recession happens, what impact that would have on B2B services trade. So far we haven’t seen any deceleration there.

Our business and our relationships with our customers indicate that SMBs around the world view macro disruptions as an opportunity for dynamic market share gains, because they can move faster than big or old companies. And that I was talking to our sales organization in Dubai just the other day, we sell that team sells a lot of marketing services solution to marketing services companies, are spend management and card virtual card products. That team is cooking and doing great, talking to our team in Latin America about Brazil and the penetration of our cards product and the momentum we have there. I shared our alibaba.com exciting announcement, helping India based goods exporters more quickly participate and sell to the rest of the world by participating in the Payoneer platform. Our green channel program in China helps the world’s best SMB exporters in China get access to and connect to the marketplaces around the globe.

So, Kupang or MercadoLibre or Etsy or eBay or Walmart basically come to Payoneer and want to meet the best exporting high quality goods exporters. And those exporters want to meet Coupang and MercadoLibre and Walmart. And we help make connections. So there’s to date, the disruption from the trade conflict has shown up in the boats leaving China, we see all of that data, but has yet to show up in Payoneer’s financials. You bet.

Unidentified speaker, Host: Well, thank you everybody. John, thank you very much for coming to our conference. Very exciting you know looking forward to hearing more.

John Kaplan, CEO and director, Payoneer: You bet. Thanks, everybody. Thanks.

Unidentified speaker, Unidentified: I’m so used to. Okay.

Unidentified speaker, Host, JPMorgan: I think we’ll get started. Thanks everyone for coming today to JPMorgan’s TMZ conference. I’m delighted to be hosting Udemy, current CEO Hugo Sarazin. Thanks so much for joining us Hugo.

Unidentified speaker, Unidentified: Thank you for having me.

Unidentified speaker, Host, JPMorgan: Yeah. So, you know, maybe we could start with a quick introduction about yourself, about Udemy, and what your reasons were for joining the company recently.

Unidentified speaker, Unidentified: Okay. Very good. Let’s start with the easy one. 30 years in tech across a series of different roles. Most of it at McKinsey where I was on the West Coast.

I serve a bunch of iconic tech companies in the software space, in the service space, in the hardware space, a whole range. I also worked with private equity when they invested in tech, often also in ed tech. I spent the last four years at UKG as the President and Chief Product and Technology Officer, where I helped double the size of the company. It’s now almost 15,000 employees. We’ve had a quarter of a billion dollars of revenue in 2023, the last time that was public.

Just to kind of give you a bit of a sense of scale and scope, we introduced eight AI products that are broadly used. And it was a space that was very close to this one. It was in the HCM space, serving CHRO and chief people officers. So I got to experience a lot of the end buyer, understanding their issues, and I think it’s really applicable to the space. In terms of your second part of the question, what draw me to Udemy?

A few things. First, there’s a personal aspect. There’s always a personal story. Both my parents were first time first in their families to go to university, so I saw the impact it had on social mobility. Our family is currently clearly different than what they’ve experienced.

The second piece, I did have the opportunity. I did spend a lot of time in school. I did a PhD in robotics and a bunch of AI stuff back in the early nineties, so I love learning. I worked also for the on an advisory basis for the prime minister of Canada on the future of education and even at Stanford when they were making the transition to MOOCs. So learning has been a passion play.

So reason number one. Reason number two, it is a space that has gone through a lot of change, but hasn’t yet fully realized its potential. And I was excited by Udemy because Udemy is one of the players that has the broadest platform and could end up being the one that will restructure or or frame what this could be. And I I wanna be a part of that. And we’re gonna talk about, you know, some of the investment thesis I had behind that, but I I was really drawn to the opportunity because I really wanted to do what’s right in terms of creating that social mobility, helping, you know, a lot of folks realize their full potential, and then do it with a platform that could be very, very powerful.

Unidentified speaker, Host, JPMorgan: Yeah. No. That’s great. You know, you’ve you’ve been in the CEO role for roughly two months now, but I understand you’ve had some time to speak with some some customers, partners, other key stakeholders of the business. What have been some of your key observations about the company, and what is sort of, you know, your vision over the next couple of years?

Unidentified speaker, Unidentified: Yeah. So I used to do this for a living. Get into a new company, quickly assess the industry. I did this before I started, and I did this in the last sixty days. And what I told the employees on day one, on the first on haul, I said, hey, I’m gonna be learning.

I’m gonna spend a lot of time with our customers, our partners, our employees. And I did that. I think, you know, almost a 50 customers, you know, many instructors, something like 250 employees, like a really thorough review of everything and and anything under the sun. And what I come back with is I was excited before coming. I’m even more excited now.

The opportunity is phenomenal. There are both from a market point of view and from what this platform can do. There were things I hoped I could find and I found under the hood. The product road map is pretty exciting. There’s more to do, but there was already some good stuff.

The transition to the large enterprise side was in flight. It was exactly the right direction of travel. There were some really exciting stuff we’ve done to improve the bottom line that’s delivering results. So the foundation is really, really good. Now to the second part of your question, where to?

And here’s where I’m going get a bit into the investment thesis. There’s an overhang on this the ed tech space. The overhang is at least in part driven by what people think AI is going to do to this space. You know, is it really going to bring the cost of content creation to zero? Because you can.

Like, you can now today take a PowerPoint chart and dump it into wonderful tool, and it will create some sort of little talking avatar. You can put the same PowerPoint into another gizmo, and it will create a podcast for you. So that’s an overhang. What is gonna happen to the space if now you have AI that can do these wonderful things? And I have the thesis that actually it’s gonna unleash a bunch of new wonderful things.

And it and I’m gonna try to make the case for that and and tell you why I think Udemy in that context is well positioned to do that. The first one, it’s creating new demand. So in the last six months not six months, sixty days, I spent a lot of time with enterprise leaders, and they’re all saying AI is really overwhelming. I don’t know how to do the rescaling of my organization. I don’t know

Unidentified speaker, Audience Member: what it means for marketing. I don’t know

Unidentified speaker, Unidentified: what it means for HR. I don’t know

Unidentified speaker, Audience Member: what it means for finance. I don’t know

Unidentified speaker, Unidentified: what it means for legal, my frontline employees. And every CEO goes to some wonderful conference and comes back and says, hey, I’ve heard that x y z is doing some AI amazing thing. Why can’t we do the same thing? So everybody now is like trying to figure out what to do. And every vendor, whether it’s, you know, the Salesforce, the ServiceNow, the Googles of the world, they’re all coming up with their own version of things.

So there is a moment in time right now where reskilling is the demand question, And that’s wonderful because we have 4,000 AI classes on the platform to facilitate reskilling. And that’s new demand, demand that did not exist a year ago. That’s number one. Number two, I think online learning did not fulfill its potential. Full stop.

Full stop. It was wonderful to change the economic of distribution and create an opportunity for, you know, long form video to be distributed and reach thousands, millions of people around the world. But it didn’t fundamentally change the experience. Like, you choose whether you’re a beginner, an intermediate, or advanced, and then you go. And then we’re gonna walk you through the same learning experience no matter who you are, what you know, and what your learning experience is.

And this is where AI changes the game. This is why we have this amazing opportunity to raise the effectiveness of learning. Because now you can start and I can go through 250,000 courses, reverse engineer using AI a bunch of assessment that instructor cannot create on their own. Create a bunch of assessment, assessment, assessment, assessment. Start you at the beginning of your journey for re skilling with an assessment, understand where your learning gaps are, then take the curriculum, which is long form, reassemble it to meet the gaps.

That’s pretty amazing. So I can do massively personalized learning, and that experience is better, more engaging. You will complete the classes, which is often the issue that many traditional players have, and then you will have better learning outcomes. So you can deliver a better ROI. So my ability now to show up to a business leader and say, Take this reskilling program, it will be personalized to your need because I’m using AI in a very powerful way.

I will create feedback loop. I can introduce it in the flow of work. There’s a lot of new things now that AI is creating. And that’s the opportunity. And our entire product roadmap right now is made to do one thing.

It’s to take what made Udemy great in this first round, which is this marketplace, the two sided gizmo blah blah blah, but now inject AI for the creators and inject AI for the learners. And that is a huge, huge opportunity. And what that allows us to do is this mega idea, at least I think it’s a mega idea, is online catalogs are interesting but not the future. The future is about an AI enabled platform that will facilitate the reskilling of the workforce of the future. And that, I can deliver an ROI, and I can become mission critical for large enterprise.

Unidentified speaker, Host, JPMorgan: Yeah. So maybe I hope there’s lot to unpack there.

Unidentified speaker, Unidentified: Yes. I I just went in to give you the investment thesis in the most

Unidentified speaker, Host, JPMorgan: great. Well, mean, you have recently launched a few AI offerings like skills mapping, learning assistant. What has been sort of the the feedback from those recently?

Unidentified speaker, Unidentified: I couldn’t be more proud. I mean, we we’ve we’ve done we’ve only begun, by the way. It is just basic, basic, and it’s already a game changer. So we can do skill mapping. Imagine, I mean, imagine this basic you’re a CHRO, and you’re trying to figure out what are the initiatives to reposition your workforce from A to B.

You need to assess the skills that B requires. You need to assess your starting point. And then you need to connect the two. Nobody can do that today. Nobody.

It’s amazing. Like there’s a huge opportunity to connect the two, and then connect it to skill program. Not learning program, skill program. I’m making a very important difference. There’s skill acquisition, there’s skill mastery, and there’s skill recency.

Those are three characteristics that need to coexist to deliver the ROI. And the skill mapping stuff right now, people are saying, this is a good first step. We’re now getting there. The AI assistant, again, very basic. We’re able to be within a class, you know, do the whole AI consumption of the thing, and then give you the ability to search through the class.

That’s pretty good. I mean, wait until what we do next. We’re gonna go across the whole catalog, and then we’re gonna do even more because now what we need to create for you both on the consumer and on the business, and it’ll be a bit different, and we can go into that difference in a second. We we want to have your companion to make you successful in the world. And then instead of being a transaction, it becomes, you know, kind of something that sticks with you in the same way that you you don’t wanna, you know, cut your your Spotify subscription or your Netflix subscription.

You wanna keep that, and that’s that’s kind of part of the vision. We need to get to that level of intimacy with you as a person who wants to be successful and needs to learn a bunch of things. So that’s the tutor. We’ve we’ve recently launched another thing that’s really it’s role plays. Mhmm.

Literally, what is it? Two and a half weeks now. So role play, we’re using AI to create ability to test certain scenarios. And here we’re not the first one. We didn’t invent this idea.

Right? There are other people who do that. But some people have been working on it in the traditional publisher model, and they got 80. 80 role plays. And a role play is like, hey, let’s have a tough conversation during a performance review, or let’s kind of practice, you know, to be run a meeting.

Right? You can have these role plays. We have this marketplace. So what we did is we created in the platform the ability to create role play. Day one, we got 32.

Day two, we got 200. After one week, we got 400. Now, we’re two and a half weeks, we got 1,400 role plays. So this is the power of a platform solution versus a publishing. And I’m gonna keep emphasizing that.

We’re trying to enable the creators to create a lot of these role plays. And will they all be great? No. You know, there’s gonna be the range of things. But again, because people can choose, they can vote, we will get the better role plays to make it to the top.

So we’re very focused on making the platform AI enabled so that we can do role plays, we can do labs, we can do assessment, we can do everything to make you more successful, and we’re doing it in a platform way. So we’re very excited. There’s more. I’ll just say one last thing, which is we’re at the very beginning. We took you know, as I said, it’s a two sided platform.

One one for the creator, one for the learner. On the creator, we took the same set of tools, and now we’re making it available to the large enterprise. So now if large enterprise can begin to have agency with the content and use these AI tools to create the role plays that are specific to how they like to do x y z in there. Then they do custom creation. And then what you have is stickiness.

Stickiness, stickiness, stickiness in a way that an online catalog could not deliver.

Unidentified speaker, Host, JPMorgan: And are you starting to see some I know it’s pretty recent, but are you starting to see some of these newer tools drive more customer conversations or even maybe some conversions or maybe even expansion

Unidentified speaker, Unidentified: So it’s early days. I can tell you that in my conversation, what I’m telling you as the narrative here, the arc, people are saying, wow, this is a different experience. This is a different story than what we’ve heard from others. And the fact that we can now have agency, it’s a pretty big deal. It’s a really big deal because L and D teams have been wondering, hey, what’s my role in this moving forward?

And I’m like, hey, I’m here to help you. I’m going to make it easy for you to have a different role in this new future where you can bring your expertise, your understanding of the company to make sure that these learning and re skilling journeys are built custom to you. So I think this is going to be pretty powerful.

Unidentified speaker, Host, JPMorgan: Got it. Maybe we could talk a little bit more about the business segments. So maybe first starting off with consumer, it’s slightly over a third of the total revenue today, just below a $300,000,000 run rate. Growth has been sort of volatile in this business, but it’s been very anchored towards, like you said last quarter, a transaction based approach. But it seems like you’re really making a big push to shift that over to subscription going So maybe help us understand what initiatives you’re taking to revitalize that part of the business.

Unidentified speaker, Unidentified: Yeah. So let me great question. If I step all the way back, we came from the b to c world, the consumer side. That’s our history. That’s where this marketplace came from.

And it was an amazing innovation when it was an innovation. But at the end of the day, we we kept the model too heavily focused on transaction. And that is a hard way to make a living. One transaction at a time, so you need to fill the bucket with lots of consumers and then you need to monetize each one of them and go back to the ones who bought one thing to make sure they bought a second thing and a third thing and a fourth thing. And it really also diminishing the impact of the platform.

As I’ve just told you, with AI, we can kind of be your companion. So we’re making a hard pivot towards subscription. Our B2B side is subscription already. Our consumer, 13% of our 300,000,000 is subscription. We want to grow that significantly because, first of all, it delivers a better experience.

It helps the end user, the learner achieve more. Because the economics are different, we have an LTV to CAC, just the economics is much better. And it allows us to reinvest for the learners, and it allows us to be very deliberate in the way we choose to acquire and nurture customer. So it is a really important shift that we’re doing. In terms of initiative, we’re doing a few things.

You can already go not this week, this week that’s special, but in general, you can now see on our marketplace we’re emphasizing subscription more than we’ve ever had before. So we’re changing the way we merchandise things. So instead of emphasizing all the wonderful one off, we’re going to emphasize subscription. So that’s one. Two, in our customer acquisition we’re shifting some of the emphasis towards more subscription and nurturing customers from transaction to subscription.

So there’s a lot of proprietary channel We actually know where people live. We know where 80,000,000 people live. So we’re gonna sit down with them and try to make the case. We’re also introducing new products and new subscription.

We used to only have one subscription. It’s kind of limited. You either hit the mark or miss. So we created career accelerators earlier two weeks ago. We have six of them.

We’re going to monetize that as subscription because, again, we’re trying to make it clear we’re here to help you achieve your goal. And we’ve got a bunch of other subscription that are in the hopper that we’re exploring and we’re going to introduce a bit later this year. So very important transition for us.

Unidentified speaker, Host, JPMorgan: Yeah, on career accelerators it seems like an interesting new offering. You’re basically making professional development more accessible for people. What has been some of the early learnings from that? And is there any way to kind of get a sense for how it may impact growth for that segment?

Unidentified speaker, Unidentified: So the main idea is, you know, be more outcome focused even for consumer. Right? People They want to be and and as you as we know right now, the economy is you know, there’s a lot of transition folks from one type of role to another. So we wanna give people more control. And again, this word, I keep using it, it’s a very important word, agency.

So if you have agency with the outcome, you have more engagement. So we’re trying to find ways to get that level of engagement and, you know, helping, you know, our consumer do that. So we’re assembling a learning path. So that’s content. So it’s this, again, the idea of that these different classes together help you move up the ladder and achieve a better outcome for yourself as a career.

We’re including assessment. We’re including badging and recognition. And then over time we’ve got a bunch of additional value added services and merchandising opportunity. I’m not ready to announce them, that we’re going to introduce along with that. So that makes these career more not just episodic, but ongoing.

I mean, if you want to become a a cloud engineer, it’s not just for three months. It’s forever. Right? Or for a period of time. You know, it could be multiple years.

So how do we become that? What kind of additional membership? What additional recognition? What kind of community do you wanna be a part of? So there’s some really, really interesting thing.

And then the feedback so far is actually pretty good. Now what we need to determine is what are all the different flavors of careers that we want to be supporting. And also, how do we ladder those things up? And how do we, you know, bring together folks that are like minded to participate and help each other and encourage each other.

Unidentified speaker, Host, JPMorgan: And so, the other portion of the business is on the Udemy business side. That is about a $500,000,000 run rate business. It’s growing positively. Growth has deceled, but you’re only less than 10% penetrated with UB across your existing 17,000 customers. So aside from macro, which maybe we’ll touch on a little but how would you sort of characterize the opportunity over the next year or two to really increase the penetration of that 10%?

Unidentified speaker, Unidentified: Yeah, so our enterprise business growing at 9%. I mean I wish we were almost at 10. I could have said double digit, but we didn’t quite make it. It is growing faster than anybody else in the industry, so it’s a really, really important part of our business. As we all know, enterprise monetize at a different rate and our LTV to CAC there is good.

It’s already a subscription business and we like that. And 17,000 large enterprise, nobody comes close to that, very iconic brands, very large brands. We made a shift a year ago towards five verticals, move up and focus more on large enterprise versus SMB. And we’re pretty happy with what we’re seeing. We got 40 deals last quarter that were more than 100 ks.

And, you know, we think that strategy is a winning strategy. Right now, we’re at a moment in time where the opportunity ahead is humongous. And the stats that you quoted is the important stat and we need to figure out, and I’ll hit that, 10% penetration in the installed base. That is phenomenal. I’ve never come across a situation where you have only 10% penetration.

So it begs the question, why is that? Why is that? And there’s a few pieces to the answer. One piece of the answer is there are different buying center in large organizations. So we need to do a better job doing the account coverage and meeting all these different buying centers, which I think as we do this transition to large enterprise, we’re getting our heads around.

The second, we until recently had three SKUs. That’s it. It’s the UB enterprise, UB pro, or the, you know, the cohort based that’s it. Three SKUs to try to meet all the needs, all the personas, all the types of workers. That’s incredible.

It’s such a missed opportunity to do basic segmentation based on an understanding of the needs of different population and large organization. So that’s one of the things we’re doing right now is we’re going back to the drawing board and saying, okay, how do we create packages that meet the needs of different types of users? The frontline workers don’t need a 30,000 course offering. They don’t. It’s absolutely not what they need.

And to try to monetize that at the same price as we are trying to monetize a, know, back to my cloud engineer, makes no sense. So we are going to do a lot of willingness to pay and appropriate segmentation to cover better the needs in an account. So that’s one. The second, you know, we need to recognize where we’ve come and where we’re going as an industry. This industry benefited from, you know, this horrific thing called COVID by accelerating an enormous amount of future purchase in a very short amount of time.

That’s one way to accelerate revenue growth. But now what we need to do is help deliver on the ROI. And when you were in the period of COVID, a lot of purchase was done just to kind of offer a thing to the employees that were all stuck at home in their basement or in their studio. It wasn’t an ROI based purchase. Now we have a product that delivers a really good ROI, better than the average for all sorts of reasons, we can go into that.

So the second way we’re going to go after beyond better account coverage, beyond more product tailored segmentation, is we’re going to go make the case for the ROI. And we’re in an economic uncertain time. Usually people ask tough questions about your spend. And I like I like our chances when when there’s a consolidation play in an account. I like our chances because our mousetrap is a stronger mousetrap.

And we would we want we want these conversations to happen because we can demonstrate the engagement, we can demonstrate the learning outcome, we can demonstrate how AI is gonna help. Our road map is pretty powerful. So that’s the other way we think we’re gonna move from, you know, a 10% penetration to something a bit more reasonable and exciting.

Unidentified speaker, Host, JPMorgan: So with that, it seems like you’re really changing some of the messaging too around like consolidation, cost savings. Does that require you to sort of like revisit the the like sales incentives or something like the playbook there?

Unidentified speaker, Unidentified: Yeah. So we’re we’re doing a bunch of that, you know, in the first sixty days. The first one is really emphasizing I I mentioned earlier that there is right now, this is a moment. This may not have been a moment six months ago, at least when I was at UKG, I didn’t hear it from CHRO and chief people officer. But now I’m hearing it.

So there is a moment right now. AI is it. So we are changing the messaging so that we can kind of bring to the forefront that conversation and make sure that we merchandise what we’re offering to meet that. So that’s one piece. The second is we are being very thoughtful about, you know, the moment of uncertainty and trying to be proactive in saying we got a better offer.

Let me help you, CHRO. You may not have had to demonstrate the ROI, but we’re going to help you because we know we’ve got a better way to do that. We’re going to help you. So we’re bringing forward a bunch of value engineering tools to demonstrate the value. We’re sitting down proactively with our customers to kind of help with that.

And yeah, it requires both of these require retooling of the sales plays, a retooling of the enablement. We had already made some incentive changes to facilitate expansion, so we didn’t need to do much there. But the first two, absolutely.

Unidentified speaker, Host, JPMorgan: So I think coming into this year, I think we all had a little bit more clarity with the macro where it was headed until maybe some recent headlines in the last month or so. But I mean you delivered I think what it was like a fine Q1 from a P and L perspective. But you are taking a more prudent guidance posture based on some of the signals you’re seeing. Maybe just if you can kind of help us understand what are some of those signals and your take on the macro?

Unidentified speaker, Unidentified: Yeah. So mean Q1 we delivered top line and bottom line. We actually did really well on the bottom line. So it was it was a really good Q1. And then for the bottom line, it’s 10 quarters in a row where we’ve delivered really to the bottom line.

So I think the team has done some really, really good work, and I want to kind of call them out for that. Now for the right now we’re not seeing a lot of mixed signal in this moment in time. I mean, sorry, let me kind of rephrase that. So it’s not affecting the way the pipeline has been built for Q2. That being said, in the conversation, we have, you know, things like I’ll give you an example.

We have a large government account and all of a sudden the person we were dealing with no longer is there. They were doge, if that’s a verb. So what does that mean? Well, it means that it will take longer to close that thing because the person with whom we were having the conversation just disappeared. So there’s a bit of that in the water, not everywhere.

You know, we’re not seeing it in some geography. We’re not seeing it in some sector. So it led us to try to be a bit cautious for the second half of the year, And we feel confident that those numbers that we guided to, we can achieve. But we’re who knows? Who could have predicted all of this?

And what happened this week will be different with what will happen tomorrow and will be different with what happened. I mean, it is unprecedented times and we’re trying to be conservative.

Unidentified speaker, Host, JPMorgan: But so far it’s not really impacting pipeline or conversions as of so far?

Unidentified speaker, Unidentified: Q2 we’re in really good shape.

Unidentified speaker, Host, JPMorgan: Okay, got it. And then maybe just on the we only have a minute or so here, but maybe just we can talk about international. I know that’s also like a nice untapped opportunity

Unidentified speaker, Unidentified: Yep.

Unidentified speaker, Host, JPMorgan: To sort of tackle there. But maybe if you can kind of characterize what you’re seeing on the international front and ways to expand there.

Unidentified speaker, Unidentified: Yeah. So 60% of our revenue are coming from international. We have the broadest number of language that we cover in our offering, which is great. But the opportunity is so big, so big. We don’t do local activation.

Like we don’t have on the consumer side in market folks who are kind of making sure that a marketing campaign in India doesn’t run-in the middle of a cricket game. It’s pretty obvious stuff. So imagine if we start doing that. On the consumer side, we have a really, really fun opportunity to do full stack in market activation. On the B2B side, we do have either partners a country or a sales team in the country.

So there we’re doing the normal motion. And we’re seeing back to, you know, we’re on a differentiated basis. APAC and LATAM are incredibly robust right now, incredibly robust. So we’re feeling really good about that. And the diversification we have from a geographic point of view is one of the appeal of the business.

Unidentified speaker, Host, JPMorgan: Yeah. I think with that we just ran out of time. But thanks so much for attending.

Unidentified speaker, Unidentified: Thank Appreciate it. Thank you.

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