This article first appeared on GuruFocus .
Release Date: May 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Paysafe Ltd ( NYSE:PSFE ) reported a strong revenue growth of 10% and adjusted EPS growth of 21% in Q1 2026.
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The company generated $67 million in unlevered free cash flow, marking a 17% increase year-over-year.
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Paysafe Ltd ( NYSE:PSFE ) saw a 9% increase in active users in its consumer business, reaching 7.9 million.
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The company experienced robust growth in its iGaming segment, with global revenue increasing by 20% year-over-year.
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Paysafe Ltd ( NYSE:PSFE ) successfully expanded its Paysafe Wallet solution across Europe, now live in 18 countries.
Negative Points
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Operating expenses grew by 6% year-over-year, largely due to unfavorable foreign exchange impacts.
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The company faced increased credit losses while transitioning to a new risk management platform.
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Adjusted EBITDA margin declined by 130 basis points due to increased marketing and IT investments.
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The SMB business only grew by 2% in Q1, indicating modest improvement in attrition.
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Paysafe Ltd ( NYSE:PSFE ) experienced a decline in underlying gross margin in its Merchant Solutions segment due to business mix.
Q & A Highlights
Q: How should we think about the EBITDA margin and merchant solutions, and what is the expected margin cadence for the rest of the year? A: John Crawford, CFO, explained that margins are expected to slowly improve through the year, particularly in Q3 and Q4. Q2 will likely resemble Q1, but by year-end, margins could be in the upper 15s or higher. This improvement is driven by the mix, with the ISO channel outperforming early in the year and better performance expected from the direct channel in the second half.
Q: Can you elaborate on the customer acquisition strategy in Latin America leading up to the World Cup? A: Bruce Lothers, CEO, noted that while the World Cup is a significant event, its impact on the digital wallet segment was not substantial last time. However, with a stronger business presence in LATAM now, they are running active marketing campaigns in LATAM and North America. They remain conservative in forecasting the impact but expect some positive effects, especially given the World Cup's better time zone alignment with the U.S.
Q: What momentum are you seeing with Paysafe Wallet in Europe, and how are consumers engaging with it? A: Bruce Lothers, CEO, highlighted that strong marketing campaigns in Spain and France have driven consumer acquisition. They are using sophisticated marketing techniques, including bots for lead generation. The Paysafe Wallet is experiencing double-digit growth, providing a good onboarding into their ecosystem. The marketing team is more aggressive and precise in consumer acquisition than before.
Q: What are the expectations for SMB revenue growth for the remainder of the year? A: John Crawford, CFO, stated that they do not expect significant contribution from the SMB segment throughout the year. While performance is expected to be better than Q1, they do not anticipate a dramatic improvement. They are optimistic about reduced attrition but have not modeled it into their full-year forecast yet.
Q: Can you provide an update on the Clover partnership and the incremental sales of value-added services? A: Bruce Lothers, CEO, reported continued strength with the Clover offering, seeing double-digit growth in merchant acquisition. The product is performing well, especially in the restaurant and services verticals, and is considered a strong offering in the marketplace.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
