Payoneer Global Inc. (ticker: PAYO) reported robust first-quarter results for 2024, showcasing significant growth in customer base, volume, and revenue. The company, a key player in the global cross-border B2B payment market, has raised its revenue and adjusted EBITDA guidance for the second quarter and the full year, reflecting confidence in its business strategy and market position. Payoneer's focus on expanding its product offerings and implementing a segment-based pricing strategy has paid off, with a notable increase in B2B volume growth and improved monetization efforts.
Key Takeaways
- Payoneer achieved an 8% increase in customers fitting their ideal customer profile (ICPs) and a 21% rise in volume.
- Total revenue grew by 19%, with an adjusted EBITDA margin reaching a record 29%.
- The company raised Q2 and full-year revenue guidance by $20 million and adjusted EBITDA guidance by $15 million.
- Full-year revenues are projected to be between $895 million and $905 million, with a focus on reducing interest rate sensitivity.
- Transaction costs are expected to remain at approximately 17.5% of revenue.
- Payoneer plans to continue share buybacks and explore M&A opportunities.
- Incremental revenue from pricing initiatives is expected to be $20 million in 2024.
- B2B volume growth is accelerating, with three consecutive quarters of growth.
- The company saw a four basis point increase in the take rate within their SMB business, driven by pricing, currency, cross-selling, and high-value services.
Company Outlook
- Payoneer is aiming for 25% B2B volume growth for the remainder of 2024.
- The company expects continued momentum in B2B volume growth, attributing it to customer acquisition, onboarding, and experience improvements.
- They are expanding their wallet functionality and adding third-party products to enhance customer utility.
Bearish Highlights
- There were no specific bearish highlights mentioned in the earnings call summary.
Bullish Highlights
- Payoneer is optimistic about future growth, driven by strong e-commerce sector performance and a focus on product expansion.
- The company is confident in its strategy to grow market share and create shareholder value.
Misses
- The summary did not indicate any specific misses or underperformance in the earnings report.
Q&A Highlights
- The summary provided did not include details from the Q&A portion of the earnings call.
Payoneer's strategic initiatives, including the introduction of account and transactional fees for non-ICPs and a customer persona-based pricing strategy, are expected to bolster revenue streams and enhance the company's competitive edge in the digital payment space. With the solid performance in the first quarter and promising outlook for the remainder of 2024, Payoneer appears well-positioned to capitalize on the vast opportunities in the $6 trillion global cross-border B2B market.
InvestingPro Insights
Payoneer Global Inc. (PAYO) has been making waves in the financial market with its impressive performance, and recent data from InvestingPro underscores its potential. The company's market capitalization stands at a robust $2.06 billion, reflecting investor confidence in its business model and growth prospects. This is backed by a Price/Earnings (P/E) ratio of 22.73, which has adjusted favorably to 17.54 when looking at the last twelve months as of Q1 2024, signaling that the stock may be more attractively priced relative to its earnings power than it initially appears.
InvestingPro Tips indicate that Payoneer's stock is currently in overbought territory according to the Relative Strength Index (RSI), suggesting that it has been experiencing strong buying pressure. This could be a double-edged sword, indicating both a positive momentum and the potential for a pullback if investors start to take profits. On the flip side, the company has shown significant returns over the last week, month, and three months, which is a testament to its strong market performance and could be indicative of underlying business strength.
Furthermore, Payoneer's revenue growth has been impressive, with a 27.04% increase over the last twelve months as of Q1 2024. This robust top-line growth is a key indicator of the company's ability to expand its market reach and enhance its product offerings.
InvestingPro offers more insights into Payoneer's financials and future outlook, with additional tips that could help investors make more informed decisions. For instance, analysts predict the company will be profitable this year, which is a crucial factor for investors looking for sustainable growth. Additionally, Payoneer has been profitable over the last twelve months, reinforcing the notion that it's on a solid financial footing. It’s worth noting that the company does not pay a dividend, which could be a consideration for income-focused investors.
For those interested in delving deeper into Payoneer's financial health and future prospects, more InvestingPro Tips are available at https://www.investing.com/pro/PAYO. And remember, you can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which includes access to these valuable insights.
Full transcript - FTAC Olympus (PAYO) Q1 2024:
Operator: Good morning. Thank you for standing by. Welcome to Payoneer's First Quarter 2024 Earnings Conference Call. At this time, all lines have been placed on mute to prevent any background noise. Following the speakers' remarks, we will open the line for your questions. As a reminder, this conference call is being recorded. I would now like to turn the call over to Michelle Wang, Payoneer's VP of Investor Relations.
Michelle Wang: Thank you, operator. With me on today's call are Payoneer's Chief Executive Officer, John Caplan and Payoneer's Chief Financial Officer, Bea Ordonez. Before we begin, I'd like to remind you that today's call may contain forward-looking statements, which are subject to risks and uncertainties. For more information, please refer to our filings of FDC, which are available in the Investor Relations section of payoneer.com. Actual results may differ materially from any forward-looking statements we make today. These forward-looking statements speak only as of today, and the company does not assume any obligation or intent to update them except as required by law. In addition, today's call may include non-GAAP measures. These measures should be considered in addition to and not instead of GAAP financial measures. Reconciliation to the nearest GAAP measure can be found in today's earnings press release, which is available on our website. Additionally, please note we have posted an earnings presentation supplement alongside our earnings press release on investor.payoneer.com. All comparisons made on today's call are on a year-over-year basis, unless otherwise noted. With that, I'd like to turn the call over to John to begin.
John Caplan: Good morning, everyone, and thank you for joining us today. We begin 2024 with strong momentum. In Q1, we grew customers who fit our ideal customer profile, or ICPs, by 8%. We continue to drive even faster growth among larger ICPs and those in regions with higher take rates. Our volume increased by 21%, marking the highest growth rate in nearly three years. We generated strong growth across every channel. We grew in our higher take rate B2B and merchant services businesses, as well as in our marketplace and enterprise payout channels. Total revenue grew 19%. Excluding interest income and normalizing for $7.5 million of non-volume fees earned in Q1 of 2023, our revenue was up 21%. We delivered record adjusted EBITDA margin of 29%, fueled by strong revenues and sustained expense discipline. S&Bs in 190-plus countries and territories. Payoneer is building the business-grade financial stack for all their cross-border AR and AP needs. Over the past year, we have focused on accelerating growth and increasing profitability. Our efforts are paying off. We are successfully capturing opportunity in the $6 trillion global cross-border B2B market. We achieved 33% volume growth in Q1, more than doubling the 13% growth of the previous quarter. Our momentum comes from a number of strategic initiatives well implemented over the past year. We have focused our B2B acquisition efforts on service-oriented markets, where we have strong product market fit and higher take rates. As a result, we have grown B2B volume from service-oriented markets in APEC, LATAM, and SEMEA at over 30% in Q1. We opened new verticals we now support, including agriculture in Ukraine, beauty products in Asia, and marketing services firms globally. New verticals launched over the past year have already contributed tens of millions of dollars of incremental B2B volume in Q1. We are deeply committed to building the best products for our customers. We have reduced friction in our onboarding process and delivered new features and functionality. One example, we made it easier for customers to load funds into their Payoneer accounts, an important feature for B2B customers who use our platform to pay their global suppliers and contractors. We have added features to increase convenience, such as the ability to automate large batches of payments or schedule recurring payments. We also recently increased the methods B2B customers can receive payments, including by adding direct from bank payments in Europe. These enhancements will help drive long-term retention of our B2B customers. We are expanding the take rate in our S&B customer business. We increased our SMB customer take rate by 4 basis points, driven by pricing initiatives we've launched over the past year and faster growth in our higher take rate businesses and regions. We continue to drive ARPU expansion. ARPU increased 31% in Q1 and 13% excluding interest income. This 13% growth is an acceleration compared to the 9% year-over-year growth in Q4. We are increasing ARPU for our pricing initiatives and are focused on acquiring larger ICPs. We are pleased with our Q1 results. The accelerating underlying revenue growth we're driving gives us confidence that our strategy is working. We remain incredibly focused on delivering our plan and capturing the significant opportunity ahead of us. Cross-border trade is undergoing a transformative evolution shaped by technological advancements, which are disrupting traditional ways of working and shopping, demographic shifts, changing geopolitical landscapes and increasing consumer purchasing power, driven by the rise of the middle class around the globe. In this dynamic environment, the role of fast-growing emerging market as both consumers and entrepreneurs cannot be overstated. Entrepreneurs, particularly in emerging markets where Payoneer is strongest are driving innovation, creating new business models and capitalizing on digital platforms to expand their reach beyond traditional borders. And it is these customers that are choosing Payoneer to make it easier for them to do business globally. In closing, we are delivering robust revenue growth across the entire platform and significant profitability as we embark on Q2. We're enthusiastic about our momentum and remain laser-focused on our mission to connect global SMBs to the digital economy while delivering significant value for our shareholders. We're proud of our team. We're confident in our opportunity, our efforts are paying off. I'll now turn it to Bea to discuss our financial results and our increased guidance in more detail.
Bea Ordonez: Thank you, John, and thank you to everyone for joining us. We delivered strong performance across the platform in Q1. We grew volume by 21% representing a fifth straight quarter of accelerating growth. We grew revenue by 19%, growing revenues ex interest income by 15% or 21% when normalized for non-volume fees earned last year. We achieved a record 29% adjusted EBITDA margin. We continue to return cash to shareholders repurchasing $51 million worth of shares during the quarter. Turning to our first quarter results. Revenue of $228 million was up 19%. Growth was driven by interest income on customer funds, momentum in our B2B business, strong performance from SMBs, selling on e-comm marketplaces, the benefit of pricing initiatives implemented in 2023, and consistent ICP growth. We grew revenues from our SMB customers by 21% and continue to see positive take-rate dynamics within our SMB business. Volume growth of 21% reflected broad-based strength. Our B2B business delivered 33% volume growth in Q1, a significant acceleration compared to 13% growth in Q4 of 2023. We generated over 200% volume growth in our merchant services business and continue to grow the number of 10K plus ICPs using our checkout product. 13% volume growth from SMBs that sell on marketplaces reflected both the residual benefits of the strong holiday season as well as ongoing robust performance in the e-comm sector and in our acquisition and retention of large marketplace sellers. Enterprise payout growth of 34% was driven by continued strong travel volume, including the ramp-up of new routes we won a year ago. Our Q1 take rate of 124 basis points decreased 1 basis point. While on a normalized basis, our take rate increased by 3 basis points. We continue to expand our SMB customer take rates, which increased 4 basis points, driven by our pricing initiatives and faster growth in higher take-rate businesses and regions. Our customers value the utility that their payment account provides, including the ability to hold balances in multiple currencies and to manage their cross-border AR and AP needs from a single account. Customer funds held by PP&E increased 8% to $5.9 billion and we earned $65 million in interest income from these balances in Q1. Total operating expenses of $190 million were up 7%, driven primarily by higher transaction costs as well as continued investment in our product roadmap and in marketing spend related to certain cross-sell activities and incentives. Transaction costs of $34 million increased 25%, broadly in line with volume growth and were impacted by continued mix shift into our fast-growing B2B and Merchant Services businesses. Transaction costs represented 14.9% of revenues an 80 basis points increase from the prior year period. Sales and marketing expense of $50 million, increased $2 million or 4%, driven by higher marketing spend related to card incentive programs and partner commissions. We continue to drive greater efficiency within our sales organization and have kept labor costs relatively flat year over year while we increased our acquisition efforts around larger ICPs and in key markets and we're able to increase the number of 10,000 plus ICPs added per sales. G&A expense decreased $2 million or 9%, primarily from reductions in headcount. Other operating expense was relatively flat year-over-year even as transactional volumes increased with decreased labor costs largely offset by higher IT costs. R&D expense increased $3 million or 9%, driven by higher labor related costs. We continued to invest in our platform and capabilities. Average R&D headcount was up nearly 20% year-over-year even as our total average headcount is down mid-single-digits. R&D resources are broadly allocated as follows; approximately a third of resources are dedicated to initiatives tied to growth. This includes enhancing our product offerings and B2B capabilities and improving our overall UX to drive greater engagement cross-sell and retention. A third is tied to enablement and efficiency investments including in our compliance infrastructure and money movement capabilities and in our data capabilities. Today approximately a third is tied to maintenance and ongoing platform modernization efforts, which are in part designed to reduce the spend in this category over time. Adjusted EBITDA was $65 million compared to $39 million in the prior year period. This represents a record 29% adjusted EBITDA margin in the quarter. Net income was $29 million compared to $8 million in the first quarter of last year. Q1 basic and diluted earnings per share was $0.08. We have been actively returning capital to shareholders. We accelerated the pace of our share purchases in 2024 buying back $51 million of shares in Q1. We ended the quarter with cash and cash equivalents of $587 million. Our business continues to generate positive free cash flows and our free cash flow conversion is well above 100% year-to-date. Moving to our 2024 guidance, we are raising our guidance for revenue by $20 million and guidance for adjusted EBITDA by $15 million to reflect our strong results and momentum heading into the second quarter. For the full year, we expect revenues to be between $895 million and $905 million. This includes $655 million to $665 million of revenue excluding interest income and $240 million of interest income for the year. We are raising our expectations for revenue excluding interest income by $15 million. This implies 10% growth at the midpoint of our guidance, representing 13% year-over-year growth on a normalized basis. Our updated guidance reflects our strong performance in the first quarter and assumes revenue ex interest income for the second quarter will be higher by approximately $5 million versus our prior expectations. We have not modeled changes to third and fourth quarter revenue at this time relative to our expectations in February, which we believe remain appropriately prudent. We are increasing our interest income revenue expectations by $5 million to $240 million for the year. As of March 31, we invested approximately $100 million of customer funds into US treasuries. We intend to more actively extend duration on the portfolio over the next few quarters with the intention of reducing our interest rate sensitivity and to drive greater interest income consistency in 2025 and 2026 as rates decline. We will continue to prioritize safety and liquidity as we do so. Our expectation for transaction costs as a percentage of revenue remains unchanged at approximately 17.5%. We expect this percentage will ramp up over the course of 2024, reflecting the impact of shifting business mix towards higher take rate, but also higher transaction cost business lines and products like B2B, Merchant Services and cards. We are increasing our adjusted EBITDA guidance to be between $200 million and $210 million, representing an adjusted EBITDA margin of approximately 23% at the midpoint. Our guidance for cash OpEx less anticipated transaction cost remains unchanged at approximately $540 million. Cash OpEx represents our guidance for revenue less adjusted EBITDA. Our first quarter results demonstrate that our strategy and focus on growing and retaining ICDs, driving increased adoption of our financial stack, optimizing ARPU and delivering improving operational leverage is working. We believe our unique assets, the scale and breadth of our ecosystem and relationship position us to further expand our market share and create lasting value for our shareholders. We are now happy to answer any questions you may have. Operator, please open the line.
Operator: Thank you. [Operator Instructions] Our first question comes from the line of Will Nance with Goldman Sachs. Your line is now open.
Will Nance: Hey, guys. Appreciate taking the question. Nice quarter, really nice to see things falling into place here. I wanted to ask around just sort of the cadence of revenue growth in your expectations. I know you had spoken kind of intra-quarter about sort of a U-shaped revenue growth for the year, and it sounds like with the higher expectations now for 2Q, that might be a slightly more lopsided view, but just any color you have on just cadence? And maybe remind us again what's sort of driving modestly lower growth I guess, in the middle quarters and the acceleration that it sounds like you continue to expect in the fourth quarter? Thanks.
Bea Ordonez: Look, as your question calls out and as we talked about in March, it's broadly speaking, a U-shape core revenue trajectory over the course of 2024. We delivered record Q1 results, really happy to deliver that 21% normalized growth. We expect a strong Q2, roughly high single digits core mid-teens normalized. So a robust performance coming into Q2, benefiting from that really strong momentum in our B2B business. But as your question notes, moderating from Q1, which as we called out, benefited from a really strong e-com quarter and strong performance in that sector in general, moderating again into Q3 where we expect, roughly speaking, high single-digit core growth. By then, as you know, we will have fully lapped those non-volume fees we've talked about. And look, recall that in February when we gave full year guidance, it was based on our estimation that marketplace volumes would grow high single digit. What we've seen in Q1 is that we're hitting mid-teens. We're seeing a very robust marketplace environment, 13% volume growth from our marketplaces. We're not going to run rate out through the back half of the year. So we've raised based on our strong B2B momentum and a strong April. Our Q2 expectations were not run rating out into the back half of the year, keeping our guidance where it's at. We think that's frankly prudent. Given the macro context and some of the signs of consumer distress that I think everyone is seeing, we do think there's room to outperform, obviously, if the macro remains stable. And ultimately, we see really strong fundamentals in our business coming into that second quarter. And John --
John Caplan: I'll just add. Yes, I think, Bea said it really well. What's so exciting inside the company we see is that we're executing on the strategy we laid out a year ago and our new leaders we brought in, accelerating our growth, seeing B2B growth in Q3 of last year at 1% and now at 33% for Q1 and really solid performance for that team. We're excited about the pace of product deployments and advancements and we're confident in our ability to continue executing and delivering on the parts of the business that we directly control, and we benefit from the performance of our partners on their strong execution. So we are making steady progress, big opportunity in front of us, and we feel confident about what we're going to deliver for the full year and how we'll exit the Q4 in a very strong position going into 2025.
Will Nance: Got it. That's super helpful. Appreciate it. Just to level set those numbers, I think you said the mid-single, high singles for the next two quarters as a relative to the 21% underlying growth in the slides?
Bea Ordonez: Yes, high single-digit Q2, mid-teens normalized. Again, we still have one more quarter of those non-volume fees, and in Q3, high single-digit. And obviously, there's no normalized impact as we will have fully lapped, and exiting, as we've said consistently since the back half of last year, exiting mid-teens core revenue growth as we round-out the year. So overall, roughly 13% is the midpoint in terms of core growth on a normalized basis year-over-year.
Operator: Thank you, Will. Our next question comes from the line of Mark Palmer with Benchmark. Your line is now open.
Mark Palmer: Yes. Thanks very much for taking my question. And congratulations on the strong quarter. Looking at the various regions, the regional markets in which Payoneer operates during the quarter, it looks like Greater China had some significant strength. What are you seeing right now in China as it pertains to macro and the extent to which that is impacting your operations there?
John Caplan: That's a great question. So I think the first thing is we generated double-digit growth in each of our major regions, normalizing for the impact of non-volume enterprise fees earned last year and over 20% revenue growth in the higher take rate regions in Q1 of 2024. Specifically, the China, the team there and our brand position there are so strong and the power of our relationships with the world's largest marketplaces, Amazon (NASDAQ:AMZN), Walmart (NYSE:WMT), eBay (NASDAQ:EBAY), Etsy (NASDAQ:ETSY), et cetera, those relationships are strong, and we're picking up customers and cross-selling the full financial stack. We saw great growth in our commercial card product in Q1. And as consumers have kept buying in the West is benefiting our merchants in China and we've begun to step back into the B2B business in China. We're seeing some early positive signs there as well. So we are executing well across the board in that region and proud of the progress we're making, and I feel good about our guidance as it relates to the full year, particularly seeing our local teams on the ground, their relationships with our big customers, the share of wallet we're gathering and the cross-sell of products we're delivering, the Payoneer financial stack is increasingly valuable to our customers in China and around the globe.
Mark Palmer: Thank you. Just one follow-up question. Where do you stand right now with regard to capital deployment priorities? You bought back a healthy amount of shares during the quarter. How are you thinking about balancing buybacks versus tack-on M&A and other alternatives at this point? Thank you.
John Caplan: Sure. I'll start and then Bea and I will sort of answer this one together. I think the first thing is we have ample capital, and we're generating capital. So the business is a healthy one. We have lots of opportunities in front of us in M&A pursuing tack-ons to drive our cross-sell and upsell of AP products and tools and services for over 2 million active customers and 0.5 million ICP customers. So we see real opportunity for tuck-in M&A to extend our financial stack as one area. And as the Board approved the $250 million stock buyback program, we've executed $51 million of that in Q1 and that will continue at pace but Bea, I'll pass it to you if you want to add.
Bea Ordonez: Yes, you covered it and Mark in your question you noted a balanced approach. So we're going to deploy that balanced approach. We obviously, accelerated our buyback activity coming out of last year, as we saw opportunities from a relative price perspective we bought back in the first quarter as John noted $51 million. We would expect to more than offset the dilution this year from our stock based plan and other share events occurring in the year. So what we expect roughly, if I were to ballpark it to be buying back roughly double what we would have bought back last year. But we'll be opportunistic in the market as we see that opportunity. As John noted, look our business benefits from a really strong free cash flow generating engine. We expect that to continue throughout the year. We'll be opportunistic and disciplined in terms of how we look at M&A opportunities and expand our financial stack and we'll be able to return cash to shareholders as well.
Operator: Thank you, Mark. Our next question comes from the line of Cris Kennedy with William Blair. Your line is now open.
Cris Kennedy: Good morning. Thank you for taking the question. Can you talk about some of the pricing initiatives and where you are in that journey? Thank you.
Bea Ordonez: Thanks for the question Cris. Sure I'll take that. Look as we noted in 2023, we really spent 2023 executing on what I would call low-hanging fruit in our business, largely to improved monetization around non-ICPs by introducing certain account fees that we waived at minimum thresholds and certain minimum transactional fees. But we also much more strategically began to define a more segment based pricing strategy. And we've been making active investments and are making investments this year in our products and out of our product team in a sophisticated pricing engine and data and testing capabilities that really allow us to deploy that much more I'll call it customer persona based pricing strategy. So at the end of 2023 we launched Phase 1 of that segment based pricing strategy. We called it our Lite account, which is targeted to freelancers and gig workers that received from marketplaces and broadly use only withdraw the bank capabilities and we were able to much more effectively monetize, given the competitive environment, monetize that flow. In 2024, we're continuing to roll out that segment based model in the back half of the year. We've talked about and we are launching very shortly significant testing of fees on Internet workflows. So that flows between Payoneer account holders on our platform many billions of flow. So we are launching a significant pilot to test those. We've spent the last several months understanding the use cases and really developing a nuanced and used case based approach to how we should monetize that flow. And look to frame, we've talked in terms of the strategy to train with more specific numbers. In 2023, we generated roughly $25 million of incremental revenue from those various pricing initiatives that we've discussed, what we've called that low-hanging fruit. In 2024, we expect to generate an incremental $20 million also in uplift from additional changes from corridor and segment-specific pricing from much more sophisticated FX monetization and product offerings. And from those into network feeds. So again we've highlighted that this is a multiyear strategy that there's real ROI here and we're investing to capture that. And that we're really looking at that customer persona based sort of offering strategy, of which pricing and monetization is such a key part.
Cris Kennedy: Great. Very clear. Thank you very much.
Operator: Thank you, Cris. Our next question comes from the line of Trevor Williams with Jefferies. Your line is now open.
Unidentified Analyst: Hi. This is Spencer James on for Trevor Williams. Good morning and thank you for taking the question.
John Caplan: Good morning.
Unidentified Analyst: I was wondering, if you could maybe share some updated thoughts on expectations for B2B volume growth for the remainder of 2024? I know you've previously shared around 25% that's looking more conservative given the strong performance in 1Q. I was wondering, if you could comment on anything to be mindful of in the back half.
John Caplan: Happy to take it. It's a super exciting part of our business and we're thrilled with the progress we're making the product market fit. We have the response from our customers and the network dynamics that are in the B2B business. We've had three consecutive quarters of accelerating volume growth in B2B. Yes, third quarter of 2023 was up 1%. Fourth quarter of 2023 was up 13%. And as we just noted first quarter of 2024 up 33% positive across all of our global regions including in China. The accelerating momentum that we see reflects the result of hard work on behalf of our entire organization cross-functionally. We improved our acquisition of ICP customers, expanded into new verticals, accelerated the onboarding time of B2B customers and have had a series of continuous improvements in the customer experience. When we look deep into the specific regions what's so exciting that we see is CEMEA a 41% year-over-year growth in B2B, APAC 39% year-over-year growth in B2B. With that response from this extraordinary product we have and the big opportunity in the $6 trillion market gives us confidence that the 25% year-over-year volume growth. And we hope to continue to see the strong results throughout the course of the year. So we can beat that handily. Our team is focused on delivering well better than them.
Bea Ordonez: And the only thing I'd add to that yes to all of that right, but we're seeing really strong momentum and it really is a result of that strong execution of the China rebound as John called out from acquisition, the new lines of business that we support. But look the business isn't linear, right? The seasonality it's not going to be a linear trajectory. What maintaining the expectation that we baked into our guidance back in February which was really healthy 25% year-over-year volume growth. We hit 33% in Q1. That's fantastic. And was thrilled when baking in as we've called out sort of macro uncertainty. I think that that's a good an imprudent thing that gives us room to outperformance if the macro stays stable, but we're maintaining that expectation around 25% year-over-year volume growth.
Unidentified Analyst: Appreciate it. Great to hear. Thank you. And then as a follow-up I was wondering if you could comment on the delta between the revenue raise to the full year guide and the adjusted EBITDA raise to the full year guide, anywhere to call out you might be investing incrementally?
Bea Ordonez: No. Cash OpEx stayed flat as we called out in the prepared remarks the delta is really just transaction costs on that core revenue increase.
Operator: Thank you. The next question we will go line of Sanjay Sakhrani with KBW. Your line is now open.
Sanjay Sakhrani: Thank you. Good morning. You know obviously you talked a little bit about pricing and I'm just looking at the take rate improvements sequentially in the SMB business, were there other drivers outside of pricing that drove but take rate higher?
Bea Ordonez: Yeah. Look I we are really happy to see that we can continue to execute on expanding take rate within our SMB business, as your question notes. We grew the take rate in our SMB business by four basis points. As you noted, some of that is the benefit of pricing and currency including FX, but it's also really effective cross-selling of our stack especially card into that very, very robust growth in the e-Comm sector, we grew card usage volumes 34%, that hits the revenue out of roughly 2% take rate. We're growing other high-value services. We generated that really strong B2B. We haven't talked particularly about merchant services were really strong more than 200% volume growth in that direct-to-consumer or checkout products. So what's sort of firing on all cylinders to continue to drive that take rate expansion, pricing cross-selling those products gross in B2B and NMR?
John Caplan: And I'd just add since we have a direct relationship with SMB customers those SMB customers two million of them over 0.5 million. ICPs want to buy more products from us. We hear from them directly. We engage with them directly. They're excited about our full financial stack roadmap. We shared in the supplement the increasing number of customers that are using three plus AP products. That growth I think inside the business should give shareholders the confidence that our strategy is working. Our team is focused and we're confident about what we can do and deliver for 2024 and beyond.
Sanjay Sakhrani: Great. And just a follow-up question, I think John, you mentioned a bunch of different ways you increase the utility of the wallet. And I'm just curious are there other things in the pipeline that can really help drive more engagement as you mentioned just now and sort of increase or accelerate the flywheel?
John Caplan: Yeah. We are very excited about the work our platform organization and our product team. Our corporate development team as well as our partnerships team is doing to deliver enhanced functionality into the stack. Some of it being products we build on our own, some of that being products we buy and add to the stack as we talked earlier in the call about, tuck small tuck-in acquisitions to extend our AP capability. And then, we're working on a group of partnership relationships to bring third-party products into the pay in your stack over the course of the next many years to increase the utility of the pain our application for our customers, we're seeing as being noted and really powerful results with our commercial card product. And I think that indicates that paying your customers come to pioneer for all of their International AR and AP needs. And that as the I think frankly as shareholders start to recognize we are a full financial stack for a population of global entrepreneurs that have not had a purpose-built solution they will begin to recognize just what the potential of this extraordinary team is.
Operator: Thank you, Sanjay. There are no additional questions waiting at this time. So I'll pass the conference back over to John Caplan, for closing remarks.
John Caplan: So I'd just like to say thank you for your questions and your participation this morning. We're so excited about the all of the initiatives underway at pain here. We appreciate the continued support of our shareholders. We're proud of our team. And the hard work of our team around the globe. And we look forward to our next discussion, at the end of next quarter. Thanks everybody.
Operator: That concludes today's conference call. Thank you for your participation. I hope you have a wonderful rest of your day.
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