Shares of the online payment processing platform Paysafe plunged to a record low Thursday (Nov. 11) after disappointing third quarter revenues were reported, due in part to challenges in the digital wallet business, and lowered its profit forecasts for the year.
According to published reports, Paysafe, which offers customers payment processing, digital wallets, eCash and online banking, posted adjusted earnings of $106.4 million and revenues of $353.6 million, both numbers down 1% from the same period in 2020.
Paysafe shares were marked 39.7% lower in trading mid-Thursday morning at $4.36 each, although the stock hit a record low of $4.11 earlier in the day.
According to Barron’s, the company has attributed its decline in sales to ““exit of certain clients in the direct marketing vertical within the Integrated Processing segment,” and lower-than-anticipated performance of its digital wallet business. Paysafe also reportedly shifted its expectations due to gambling regulations and softer European markets.
As the year winds down, the London-based company says it anticipates adjusted earnings of between $425 million and $435 million, $60 million less than the upper range of its earlier forecast. Meanwhile, sales are expected to be between $1.47 billion and $1.48 billion, a $700 million drop from the previous higher end forecast.
“In the third quarter we reported Adjusted EBITDA in line with our expectations, despite softer than expected revenue, reflecting both market and performance challenges within the digital wallet business,” said CEO Philip McHugh. “While the recent trend will drive an adjusted financial outlook, we continue to see strong momentum across the business.”
Read more: Paysafe Goes Public; Eyes Double-Digit Growth
Paysafe went public on the New York Stock Exchange in March following a merger with the special purpose acquisition company (SPAC) Foley Trasimene Acquisition II Corp, with an initial public offering that valued the firm at about $9 billion.
At the time of the IPO, Bill Foley, the founder of the SPAC, said that “Paysafe … is ubiquitous. It’s just everywhere in terms of the gaming world and digital wallets, eCash solutions.”
In its SEC filings, Paysafe said it had processed $98 billion in payments volume in 2019, and at the end of 2020 had 15 million active users in more than 120 countries by the end of 2020.
Roughly three-quarters of its revenues were from eCommerce and integrated commerce solutions, according to the filing, which said, “eCommerce and brick and mortar merchants are continuing to demand partnering with highly sophisticated payments providers with a broad range of solutions.”