Paysafe Ltd (NYSE:PSFE), a leading payments platform, stock rallies 22.49% (As on May 10, 11:28:34 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the first quarter of FY 24. Revenue from the Merchant Solutions segment increased 11%, reflecting double-digit growth in e-commerce as well as growth from small and medium-sized businesses (“SMBs”) driven by initiatives to expand our sales capabilities and optimize the portfolio. Revenue from the Digital Wallets segment increased 5% as reported and 4% in constant currency, reflecting growth from gambling merchants as well as ongoing initiatives related to product and consumer engagement.
PSFE in the first quarter of FY 24 has reported the adjusted earnings per share of 57 cents, beating the analysts’ estimates for the adjusted earnings per share of 34 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 8 percent to $417.74 million in the first quarter of FY 24, beating the analysts’ estimates for revenue by 2.49%. This reflects 7% growth in total payment volume. Adjusted net income for the first quarter increased 7% to $35.3 million, compared to $33.1 million in the prior year period. Adjusted EBITDA increased 3%, primarily reflecting revenue growth, partially offset by incremental expenses related to previously announced initiatives to expand the sales team and optimize the portfolio as well as higher severance and credit loss expense.
Additionally, first quarter operating cash flow was $58.8 million, compared to $20.0 million in the prior year period, which was mainly driven by lower taxes paid and the timing of bonus payments. Unlevered free cash flow was $69.2 million, compared to $42.2 million in the prior year period. As of March 31, 2024, total cash and cash equivalents were $202.1 million, total debt was $2.5 billion and net debt was $2.3 billion. Compared to December 31, 2023, total debt decreased by $44.5 million, reflecting net repayments of $14.6 million as well as movement in foreign exchange rates.
On the other hand, the company has advanced thr white label wallet strategy through a partnership with Xsolla, a leader in game commerce. The company has launched Paysafe’s Pay by Bank solution for U.S. iGaming, allowing bettors to log-in directly to their bank accounts at online sportsbooks’ cashiers to fund real-time wagers Paysafe is now processing iGaming payments in 33 U.S. states and territories, including Q1 launches in Vermont and North Carolina.