Nuvei Announces Second Quarter 2022 Results
“We reported a solid second quarter with a 44% increase in Total volume at constant currency(1) and a 17% increase in Adjusted EBITDA(2), both exceeding our outlook as we continued to execute on our strategic initiatives. Our strength this quarter was driven by our disciplined investments for sustainable growth, which continue to enhance our financial profile, as well as strong revenue growth, cash generation and a solid balance sheet,” said
“We are amending our outlook for the remainder of the year due to unforeseen changes in currency, volatility in digital assets and cryptocurrencies, and caution with regard to global economic conditions. However, we are maintaining our medium and long-term targets, pursuant to which we aspire to achieve
Please refer to the cautionary statements under “Growth Targets” below.
Financial Highlights for the Three Months Ended
- Total volume(1) increased 38% to
$30.1 billion from$21.9 billion ;- eCommerce represented 87% of total volume;
- Total volume growth at constant currency(1) was 44% with Total volume at constant currency(1) increasing to
$31.4 billion from$21.9 billion ; - Total organic volume growth at constant currency(1) was 37% with Total organic volume at constant currency(1) increasing to
$29.9 billion from$21.9 billion ;
- Revenue increased 19% to
$211.3 million from$178.2 million ;- Revenue was impacted unfavorably by changes in foreign currency exchange rates year-over-year by
$9.4 million ; - Revenue growth at constant currency(2) was 24% with Revenue at constant currency(2) increasing to
$220.7 million from$178.2 million ; - Organic revenue growth at constant currency(2) was 16% with Organic revenue at constant currency(2) increasing to
$206.4 million from$178.2 million ;
- Revenue was impacted unfavorably by changes in foreign currency exchange rates year-over-year by
- Net income decreased to
$35.1 million from$38.9 million , primarily due to a$27.7 million increase in share-based payments to employees who joined the Company as part of acquisitions completed during the third quarter of 2021 and other incentive grants; - Adjusted EBITDA(2) increased 17% to
$92.9 million from$79.4 million ; - Adjusted net income(2) increased 16% to
$74.7 million from$64.5 million ; - Net income per diluted share was
$0.23 compared to$0.26 ; - Adjusted net income(2) per diluted share was
$0.51 compared to$0.44 ; - Cash flow from operating activities increased by 7% to
$91.5 million from$85.6 million ; and - Free cash flow(2) increased by 11% to
$80.8 million from$73.0 million .
Financial Highlights for the Six Months Ended
- Total volume(1) increased 40% to
$59.3 billion from$42.5 billion ;- eCommerce represented 88% of total volume;
- Total volume growth at constant currency(1) was 44% with Total volume at constant currency(1) increasing to
$61.2 billion from$42.5 billion ; - Total organic volume growth at constant currency(1) was 38% with Total organic volume at constant currency(1) increasing to
$58.6 billion from$42.5 billion ;
- Revenue increased 30% to
$425.8 million from$328.7 million ;- Revenue was impacted unfavorably by changes in foreign currency exchanges rates year-over-year by
$16.8 million ; - Revenue growth at constant currency(2) was 35% with Revenue at constant currency increasing to
$442.7 million from$328.7 million ; - Organic revenue growth at constant currency(2) was 25% with Organic revenue at constant currency(2) increasing to
$411.3 million from$328.7 million ;
- Revenue was impacted unfavorably by changes in foreign currency exchanges rates year-over-year by
- Net income decreased by
$27.1 million to$39.6 million compared to net income of$66.7 million , primarily due to a$60.8 million increase in share-based payments to employees who joined the Company as part of acquisitions completed in 2021 and other incentive grants; - Adjusted EBITDA(2) increased 27% to
$184.4 million from$144.8 million ; - Adjusted net income(2) increased 24% to
$143.7 million from$115.7 million ; - Net income per diluted share was
$0.25 compared to net income per diluted share of$0.45 ; - Adjusted net income(2) per diluted share was
$0.97 compared to$0.79 ; - Cash flow from operating activities increased by 13% to
$157.2 million from$139.0 million ; - Free cash flow(2) increased by 22% to
$163.3 million from$133.7 million ; and - Cash balance of
$721.6 million atJune 30, 2022 compared to$748.6 million atDecember 31, 2021 , mainly due to the repurchase and cancellation of approximately 1.8 million Subordinate Voting Shares for total consideration, including transaction costs, of$109.2 million .
Comparing Second Quarter 2022 Results To Outlook
These factors combined contributed approximately
Operational Highlights
- Revenue for the second quarter of 2022 increased 28% to
$119.9 million inEurope , theMiddle East andAfrica , increased 8% to$83.4 million inNorth America , increased 29% to$6.9 million inLatin America , and decreased 45% to$1.0 million inAsia Pacific .North America eCommerce direct revenue increased 34% to$22.4 million in this year’s second quarter from last year’s second quarter, representing approximately 27% of totalNorth America revenue. - Revenue from Nuvei’s Global eCommerce Direct channel (the Company’s largest distribution channel as a percentage of revenue) increased by 28% in the second quarter of 2022 compared to the second quarter of 2021 as a result of recent investments in sales distribution.
- New business in the Company’s regulated online gaming vertical is progressing well and contributed to an increase in online gaming revenue by 22% in the second quarter of 2022 compared to the second quarter of 2021. In terms of Nuvei’s progress in
North America , its online gaming revenue "run-rate” is now approximately$25 million and is on pace to deliver$100 million of annual “run-rate” revenue. - With respect to advancements in product innovation,
Nuvei :- Enhanced and expanded its payouts solution offering to include instant SEPA payouts for all European countries. It also launched
Visa direct support inCanada , and added local payout options inBrazil ,Canada ,Chile , Columbia,Malaysia ,Mexico ,Peru andRomania . - Introduced Nuvei Simple Connect SDK (software development kit), which dramatically simplifies integration into its platform. The Company believes its SDK solution is ahead of its emerging peers as it’s the easiest to integrate, allows for more than just card payments, and offers customers access to our full array of capabilities with greater flexibility and deeper customization.
- Launched its omnichannel solution, which via a single integration, allows customers to now use
Nuvei for multi-channel, multi-geography integrations with single token, reporting and reconciliation to streamline their global operations.
- Enhanced and expanded its payouts solution offering to include instant SEPA payouts for all European countries. It also launched
Nuvei added multiple new APMs increasing its portfolio to 571 at the end of the second quarter, expanding access and allowing its customers to accept more forms of regionally familiar and preferred digital payment methods.Nuvei expanded local card acquiring capabilities and enhanced its payment capabilities enabling customers to accept additional forms of local payments methods inSingapore andSouth Korea .- The Company added more than 100 new employees in the second quarter of 2022, ending with 1,570 employees at
June 30, 2022 compared with 1,368 employees atDecember 31, 2021 . - The Company expanded its Board of Directors to eight members with the appointments of technology veterans
Maren Lau , Regional Vice President,Latin America at Meta Platforms, Inc.; andTim Dent , former Chief Financial Officer and Chief Compliance Officer of DraftKings Inc. - For the three month period ended
June 30, 2022 ,Nuvei purchased and canceled 559,902 Subordinate Voting Shares (“Shares”) for a total consideration, including transaction costs of$34.4 million in the second quarter at an average price of$61.44 per share in connection with its previously announced normal course issuer bid allowing it to purchase up to 6,617,416 of its Shares. In total, the Company has purchased and canceled 1,768,668 shares for$109.2 million at an average price of$61.71 throughJune 30, 2022 .
Financial Outlook(3)
The following outlook supersedes all prior statements made by the Company and is based on current expectations. The Company has amended its financial outlook for the fiscal year ending
The financial outlook for the remainder of 2022 assumes greater currency headwinds than previously expected from the stronger
For the three months ending
The financial outlook is fully qualified and based on a number of assumptions and subject to a number of risks described under the heading “Forward-Looking Information” of this press release.
Three months ending |
Year ending |
||
2022 | 2022 | 2022 | |
Forward-looking | Forward-looking | Forward-looking | |
Previous | Revised | ||
(In |
$ | $ | $ |
Total volume(1) (in billions) | 25 - 26 | 127 - 132 | 117 - 121 |
Revenue (in millions) | 185 - 195 | 940 - 980 | 820 - 850 |
Revenue at constant currency (in millions) | 195 - 205 | N/A | 855 - 885 |
Adjusted EBITDA(2) (in millions) | 70 - 75 | 407 - 425 | 335 - 350 |
Growth Targets(4)
Nuvei’s medium-term(5) annual growth targets for Total volume(1) and revenue, as well as its long-term target for Adjusted EBITDA margin(2), are shown in the table below. These medium(5) and long-term(5) targets should not be considered as projections, forecasts or expected results but rather goals that we seek to achieve from the execution of our strategy over time, and at further stage of business maturity, through geographic expansion, product innovation, growing wallet share with existing customers and new customer wins. The Company’s medium term targets are not made in respect of any particular fiscal year and should not be assumed or interpreted to be made in any way in respect of 2023 or any other fiscal year, whether by reference to the Company’s financial outlook, or actual results, for 2022 or otherwise.
Growth Targets(4) | |
Total volume(1) | 30%+ annual year-over-year growth in the medium term(5) |
Revenue | 30%+ annual year-over-year growth in the medium term(5) |
Adjusted EBITDA margin(2) | 50%+ over the long term(5) |
(1) Total volume, Total volume at constant currency and Total organic volume at constant currency does not represent revenue earned by the Company, but rather the total dollar value of transactions processed by merchants under contractual agreement with the Company. See “Supplementary Financial Measures” below.
(2) Revenue at constant currency, Revenue growth at constant currency, Organic Revenue at constant currency, Organic revenue growth at constant currency, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, Adjusted net income per diluted share and Free cash flow are non-IFRS and other financial measures. See “Non-IFRS and Other Financial Measures”.
(3) Other than with respect to revenue, the Company only provides guidance on a non-IFRS basis. The Company does not provide a reconciliation of forward-looking revenue at constant currency (non-IFRS), Adjusted EBITDA (non-IFRS) to net income (loss) due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. In periods where significant acquisitions or divestitures are not expected, the Company believes it might have a basis for forecasting the IFRS equivalent for certain costs, such as employee benefits, commissions and depreciation and amortization. However, because other deductions such as share-based payments, net finance costs, gain (loss) on financial instruments carried at fair market value and current and deferred income taxes used to calculate projected net income (loss) can vary significantly based on actual events, the Company is not able to forecast on an IFRS basis with reasonable certainty all deductions needed in order to provide an IFRS calculation of projected net income (loss). The amount of these deductions may be material and, therefore, could result in projected IFRS net income (loss) being materially less than projected Adjusted EBITDA (non-IFRS). These statements represent forward-looking information and may represent a financial outlook, and actual results may vary. See the risk and assumptions described under the heading “Forward-looking information” of this press release.
(4) These growth targets are fully qualified and based on a number of assumptions and subject to a number of risks as described under the heading “Forward-looking Information” of this press release. These growth targets serve as guideposts as we execute on our strategic priorities in the medium to long term, and they assume a near term resumption to a normal business and macroeconomic environment, continuing momentum and performance of the Company’s core business and favorable tailwinds of the verticals it serves. We will review and revise these growth targets as economic, market and regulatory environments change.
(5) “Medium-term” and “long term” have not been defined by
Conference Call Information
The conference call will be webcast live from the Company’s investor relations website at https://investors.nuvei.com under the “Events & Presentations” section. A replay will be available on the investor relations website following the call.
The conference call can also be accessed live over the phone by dialing 877-425-9470 (US/
About
For more information, visit www.nuvei.com
Non-IFRS and Other Financial Measures
Nuvei’s unaudited condensed interim consolidated financial statements have been prepared in accordance with IFRS as issued by the
Non-IFRS Financial Measures
Revenue at constant currency: In the second quarter of 2022, we introduced a new non-IFRS financial measure to measure our revenue on a constant currency basis. Revenue at constant currency means revenue adjusted for the impact of foreign currency exchange fluctuations. This measure helps provide insight on comparable revenue growth by removing the effect of changes in foreign currency exchange rates year-over-year. Foreign currency exchange impact in the current period is calculated using prior period quarterly average exchange rates applied to the current period foreign currency amounts.
Organic revenue at constant currency: In the second quarter of 2022, we modified the composition of our Organic revenue metric to Organic revenue at constant currency. The only change in the composition of our Organic revenue metric as compared to prior periods is to exclude foreign currency exchange impact on organic revenue. This measure helps provide insight on organic and acquisition-related growth and presents useful information about comparable revenue growth. Organic revenue at constant currency means revenue excluding the revenue attributable to acquired businesses for a period of 12 months following their acquisition and excluding revenue attributable to divested businesses, adjusted for the impact of foreign currency exchange fluctuations. Foreign currency exchange impact in the current period is calculated using prior period quarterly average exchange rates applied to the current period foreign currency amounts. See Reconciliation of Organic Revenue at Constant Currency and Organic Revenue Growth at Constant Currency to Revenue for more detail on the change in composition.
Adjusted EBITDA: We use Adjusted EBITDA as a means to evaluate operating performance, by eliminating the impact of non-operational or non-cash items. Adjusted EBITDA is defined as net income (loss) before finance costs (recovery), finance income, depreciation and amortization, income tax expense, acquisition, integration and severance costs, share-based payments and related payroll taxes, loss (gain) on foreign currency exchange, and legal settlement and other.
Adjusted net income: We use Adjusted net income as an indicator of business performance and profitability with our current tax and capital structure. Adjusted net income is defined as net income (loss) before acquisition, integration and severance costs, share-based payments and related payroll taxes, loss (gain) on foreign currency exchange, amortization of acquisition-related intangible assets, and the related income tax expense or recovery for these items. Adjusted net income also excludes change in redemption value of liability-classified common and preferred shares, change in fair value of share repurchase liability and accelerated amortization of deferred transaction costs and legal settlement and other.
Free cash flow: We use Free cash flow as a supplementary indicator of our operating performance. Free cash flow means, for any period, Adjusted EBITDA less capital expenditures.
Non-IFRS Financial Ratios
Revenue growth at constant currency: Revenue growth at constant currency means the year-over-year change in Revenue at constant currency divided by reported revenue in the prior period. We use Revenue growth at constant currency to provide better comparability of revenue trends year-over-year, without the impact of fluctuations in foreign currency exchange rates.
Organic revenue growth at constant currency: Organic revenue growth at constant currency means the year-over-year change in Organic revenue at constant currency divided by comparable Organic revenue in the prior period. We use Organic revenue growth at constant currency to provide better comparability of revenue trends year-over-year, without the impact of acquisitions, divestitures and fluctuations in foreign currency exchanges rates. See Reconciliation of Organic Revenue at Constant Currency and Organic Revenue Growth at Constant Currency to Revenue for more detail on the change in composition.
Adjusted EBITDA margin: Adjusted EBITDA margin means Adjusted EBITDA divided by revenue.
Adjusted net income per basic share and per diluted share: We use Adjusted net income per basic share and per diluted share as an indicator of performance and profitability of our business on a per share basis. Adjusted net income per basic share and per diluted share means Adjusted net income less net income attributable to non-controlling interest divided by the basic and diluted weighted average number of common shares outstanding for the period. The number of share-based awards used in the diluted weighted average number of common shares outstanding in the Adjusted net income per diluted share calculation is determined using the treasury stock method as permitted under IFRS.
Supplementary Financial Measures
We monitor the following key performance indicators to help us evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. Our key performance indicators may be calculated in a manner that differs from similar key performance indicators used by other companies.
Total volume and eCommerce volume: We believe Total volume and eCommerce volume are indicators of performance of our business. Total volume and similar measures are used widely among others in the payments industry as a means of evaluating a company’s performance. We define Total volume as the total dollar value of transactions processed in the period by merchants under contractual agreement with us. eCommerce volume is the portion of Total volume for which the transaction did not occur at a physical location. Total volume and eCommerce volume do not represent revenue earned by us. Total volume includes acquiring volume, where we are in the flow of funds in the settlement transaction cycle, gateway/technology volume, where we provide our gateway/technology services but are not in the flow of funds in the settlement transaction cycle, as well as the total dollar value of transactions processed relating to APMs and payouts. Since our revenue is primarily sales volume and transaction-based, generated from merchants’ daily sales and through various fees for value-added services provided to our merchants, fluctuations in Total volume will generally impact our revenue.
Total volume at constant currency: Total volume at constant currency is used as an indicator of performance of our business on a more comparable foreign currency exchange basis. Total volume at constant currency means Total volume adjusted for the impact of foreign currency exchange fluctuations. This measure helps provide to provide better comparability of business trend year-over-year, without the impact of fluctuations in foreign currency exchange rates. Foreign currency exchange impact in the current period is calculated using prior period quarterly average exchange rates applied to the current period foreign currency amounts.
Total organic volume at constant currency: Total organic volume at constant currency is used as an indicator of performance of our business on a more comparable basis. This measure helps provide insight on organic and acquisition-related growth and presents useful information about comparable Total volume growth. Total organic volume at constant currency means Total volume excluding Total volume attributable to acquired businesses for a period of 12 months following their acquisition and excluding Total volume attributable to divested businesses, adjusted for the impact of foreign currency exchange fluctuations. Foreign currency exchange impact in the current period is calculated using prior period quarterly average exchange rates applied to the current period foreign currency amounts.
Forward-Looking Information
This press release contains “forward-looking information” within the meaning of applicable securities laws, including
In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances. Any financial outlook and targets, as the case may be, may also constitute “financial outlook” within the meaning of applicable securities laws and are provided for the purposes of assisting the reader in understanding the Company’s financial performance and measuring progress toward management’s objectives and the reader is cautioned that it may not be appropriate for other purposes.
Forward-looking information involves known and unknown risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, the risk factors described in greater detail under “Risk Factors” of the Company’s annual information form filed on
Forward-looking information is based on management’s beliefs and assumptions and on information currently available to management, regarding, among other things, general economic conditions and the competitive environment within our industry, including the following assumptions: (a)
Consequently, all of the forward-looking information contained herein is qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained herein represents our expectations as of the date hereof or as of the date it is otherwise stated to be made, as applicable, and is subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or amend such forward-looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law.
Contact:
Investors
Vice President, Head of Investor Relations
anthony.gerstein@nuvei.com
Statements of Profit or Loss and Comprehensive Income or Loss Data
(in thousands of
Three months ended |
Six months ended |
|||||||
2022 | 2021 | 2022 | 2021 | |||||
$ | $ | $ | $ | |||||
Revenue | 211,294 | 178,239 | 425,838 | 328,719 | ||||
Cost of revenue | 35,980 | 33,124 | 82,896 | 60,308 | ||||
Gross profit | 175,314 | 145,115 | 342,942 | 268,411 | ||||
Selling, general and administrative expenses | 146,505 | 95,870 | 293,317 | 184,306 | ||||
Operating profit | 28,809 | 49,245 | 49,625 | 84,105 | ||||
Finance income | (1,665 | ) | (912 | ) | (2,296 | ) | (1,771 | ) |
Finance cost (recovery) | (1,973 | ) | 3,432 | 5,768 | 6,747 | |||
Net finance cost (income) | (3,638 | ) | 2,520 | 3,472 | 4,976 | |||
Loss (gain) on foreign currency exchange | (8,467 | ) | 1,691 | (7,887 | ) | 1,246 | ||
Income before income tax | 40,914 | 45,034 | 54,040 | 77,883 | ||||
Income tax expense | 5,831 | 6,120 | 14,443 | 11,179 | ||||
Net income | 35,083 | 38,914 | 39,597 | 66,704 | ||||
Other comprehensive income | ||||||||
Items that may be reclassified subsequently to profit and loss | ||||||||
Foreign operations – foreign currency translation differences | (25,593 | ) | 4,310 | (30,455 | ) | (10,539 | ) | |
Comprehensive income | 9,490 | 43,224 | 9,142 | 56,165 | ||||
Net income attributable to: | ||||||||
Common shareholders of the Company | 33,979 | 37,830 | 36,982 | 64,644 | ||||
Non-controlling interest | 1,104 | 1,084 | 2,615 | 2,060 | ||||
35,083 | 38,914 | 39,597 | 66,704 | |||||
Comprehensive income attributable to: | ||||||||
Common shareholders of the Company | 8,386 | 42,140 | 6,527 | 54,105 | ||||
Non-controlling interest | 1,104 | 1,084 | 2,615 | 2,060 | ||||
9,490 | 43,224 | 9,142 | 56,165 | |||||
Net income per share | ||||||||
Net income per share attributable to common shareholders of the Company | ||||||||
Basic | 0.24 | 0.27 | 0.26 | 0.47 | ||||
Diluted | 0.23 | 0.26 | 0.25 | 0.45 | ||||
Weighted average number of common shares outstanding | ||||||||
Basic | 141,442,328 | 138,719,227 | 142,148,713 | 138,462,027 | ||||
Diluted | 144,884,842 | 143,265,259 | 145,703,289 | 142,991,370 |
Consolidated Statements of Financial Position Data (in thousands of |
||||
$ | $ | |||
Assets | ||||
Current assets | ||||
Cash | 721,620 | 748,576 | ||
Trade and other receivables | 51,438 | 39,262 | ||
Inventory | 1,245 | 1,277 | ||
Prepaid expenses | 9,221 | 8,483 | ||
Income taxes receivable | 3,019 | 3,702 | ||
Current portion of advances to third parties | 1,281 | 3,104 | ||
Current portion of contract assets | 1,542 | 1,354 | ||
Total current assets before segregated funds | 789,366 | 805,758 | ||
Segregated funds | 701,387 | 720,874 | ||
Total current assets | 1,490,753 | 1,526,632 | ||
Non-current assets | ||||
Advances to third parties | 4,934 | 13,676 | ||
Property and equipment | 26,078 | 18,856 | ||
Intangible assets | 711,940 | 747,600 | ||
1,111,889 | 1,126,768 | |||
Deferred tax assets | 11,256 | 13,036 | ||
Contract assets | 981 | 1,091 | ||
Processor deposits | 4,852 | 4,788 | ||
Other non-current assets | 3,924 | 3,023 | ||
Total Assets | 3,366,607 | 3,455,470 | ||
Liabilities | ||||
Current liabilities | ||||
Trade and other payables | 105,972 | 101,848 | ||
Income taxes payable | 29,047 | 13,478 | ||
Current portion of loans and borrowings | 8,397 | 7,349 | ||
Other current liabilities | 7,695 | 13,226 | ||
Total current liabilities before due to merchants | 151,111 | 135,901 | ||
Due to merchants | 701,387 | 720,874 | ||
Total current liabilities | 852,498 | 856,775 | ||
Non-current liabilities | ||||
Loans and borrowings | 504,341 | 501,246 | ||
Deferred tax liabilities | 61,087 | 71,100 | ||
Other non-current liabilities | 4,008 | 4,509 | ||
Total Liabilities | 1,421,934 | 1,433,630 | ||
Equity | ||||
Equity attributable to shareholders | ||||
Share capital | 2,014,683 | 2,057,105 | ||
Contributed surplus | 137,169 | 69,943 | ||
Deficit | (176,314 | ) | (108,749 | ) |
Accumulated other comprehensive loss | (39,016 | ) | (8,561 | ) |
1,936,522 | 2,009,738 | |||
Non-controlling interest | 8,151 | 12,102 | ||
Total Equity | 1,944,673 | 2,021,840 | ||
Total Liabilities and Equity | 3,366,607 | 3,455,470 |
Consolidated Statements of Cash Flow Data (in thousands of |
||||
For the six months ended |
2022 | 2021 | ||
$ | $ | |||
Cash flow from operating activities | ||||
Net income | 39,597 | 66,704 | ||
Adjustments for: | ||||
Depreciation of property and equipment | 3,720 | 2,780 | ||
Amortization of intangible assets | 49,769 | 38,958 | ||
Amortization of contract assets | 913 | 1,017 | ||
Share-based payments | 69,851 | 9,058 | ||
Net finance cost | 3,472 | 4,976 | ||
Loss (gain) on foreign currency exchange | (7,887 | ) | 1,246 | |
Income tax expense | 14,443 | 11,179 | ||
Changes in non-cash working capital items | (3,578 | ) | 14,265 | |
Interest paid | (8,805 | ) | (5,435 | ) |
Income taxes paid | (4,272 | ) | (5,754 | ) |
157,223 | 138,994 | |||
Cash flow used in investing activities | ||||
Business acquisitions, net of cash acquired | — | (88,930 | ) | |
Acquisition of property and equipment | (4,662 | ) | (2,419 | ) |
Acquisition of intangible assets | (16,425 | ) | (8,706 | ) |
Decrease (increase) in other non-current assets | (965 | ) | 9,787 | |
Net decrease in advances to third parties | 1,566 | 5,982 | ||
(20,486 | ) | (84,286 | ) | |
Cash flow from (used in) financing activities | ||||
Shares repurchased and cancelled | (109,158 | ) | — | |
Transaction costs from issuance of shares | (626 | ) | — | |
Proceeds from exercise of stock options | 1,129 | 3,968 | ||
Repayment of loans and borrowings | (2,560 | ) | — | |
Proceeds from loans and borrowings | — | 300,000 | ||
Transaction costs related to loans and borrowings | — | (5,373 | ) | |
Payment of lease liabilities | (1,682 | ) | (1,327 | ) |
Purchase of non-controlling interest | (39,751 | ) | — | |
Dividend paid by subsidiary to non-controlling interest | (260 | ) | (680 | ) |
(152,908 | ) | 296,588 | ||
Effect of movements in exchange rates on cash | (10,785 | ) | 1,670 | |
Net increase (decrease) in cash | (26,956 | ) | 352,966 | |
Cash – Beginning of period | 748,576 | 180,722 | ||
Cash – End of period | 721,620 | 533,688 |
Reconciliation of Adjusted EBITDA and Free cash flow to Net Income and Cash flow from operating activities
(In thousands of
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|||||||
2022 | 2021 | 2022 | 2021 | |||||
$ | $ | $ | $ | |||||
Cash flow from operating activities | 91,489 | 85,591 | 157,223 | 138,994 | ||||
Adjustments for: | ||||||||
Depreciation of property and equipment | (1,927 | ) | (1,430 | ) | (3,720 | ) | (2,780 | ) |
Amortization of intangible assets | (25,119 | ) | (19,310 | ) | (49,769 | ) | (38,958 | ) |
Amortization of contract assets | (486 | ) | (530 | ) | (913 | ) | (1,017 | ) |
Share-based payments | (32,664 | ) | (4,953 | ) | (69,851 | ) | (9,058 | ) |
Net finance cost (income) | 3,638 | (2,520 | ) | (3,472 | ) | (4,976 | ) | |
Gain (loss) on foreign currency exchange | 8,467 | (1,691 | ) | 7,887 | (1,246 | ) | ||
Income tax expense | (5,831 | ) | (6,120 | ) | (14,443 | ) | (11,179 | ) |
Changes in non-cash working capital items | (10,040 | ) | (17,463 | ) | 3,578 | (14,265 | ) | |
Interest paid | 4,539 | 2,599 | 8,805 | 5,435 | ||||
Income taxes paid | 3,017 | 4,741 | 4,272 | 5,754 | ||||
Net income | 35,083 | 38,914 | 39,597 | 66,704 | ||||
Finance cost (recovery) | (1,973 | ) | 3,432 | 5,768 | 6,747 | |||
Finance income | (1,665 | ) | (912 | ) | (2,296 | ) | (1,771 | ) |
Depreciation and amortization | 27,046 | 20,740 | 53,489 | 41,738 | ||||
Income tax expense | 5,831 | 6,120 | 14,443 | 11,179 | ||||
Acquisition, integration and severance costs (a) | 3,612 | 4,500 | 10,166 | 9,840 | ||||
Share-based payments and related payroll taxes (b) | 32,704 | 4,953 | 69,944 | 9,058 | ||||
Loss (gain) on foreign currency exchange | (8,467 | ) | 1,691 | (7,887 | ) | 1,246 | ||
Legal settlement and other (c) | 682 | (63 | ) | 1,207 | 96 | |||
Adjusted EBITDA | 92,853 | 79,375 | 184,431 | 144,837 | ||||
Acquisition of property and equipment, and intangible assets | (12,026 | ) | (6,387 | ) | (21,087 | ) | (11,125 | ) |
Free cash flow | 80,827 | 72,988 | 163,344 | 133,712 |
(a) These expenses relate to:
(i) professional, legal, consulting, accounting and other fees and expenses related to our acquisition activities and financing activities. For the three months and six months ended
(ii) acquisition-related compensation were
(iii) change in deferred purchase consideration for previously acquired businesses. A
(iv) severance and integration expenses, which were
(b) These expenses represent expenses recognized in connection with stock options and other awards issued under share-based plans as well as related payroll taxes that are directly attributable to share-based payments. For the three months and six months ended
(c) This line item primarily represents legal settlements and associated legal costs, as well as non-cash gains, losses and provisions and certain other costs. These costs are presented in selling, general and administrative expenses.
Reconciliation of Adjusted net income and Adjusted net income per basic share and per diluted share to Net Income
(In thousands of
Three months ended |
Six months ended |
|||||||
2022 | 2021 | 2022 | 2021 | |||||
$ | $ | $ | $ | |||||
Net income | 35,083 | 38,914 | 39,597 | 66,704 | ||||
Change in fair value of share repurchase liability | (7,884 | ) | — | (5,710 | ) | — | ||
Amortization of acquisition-related intangible assets (a) | 23,496 | 17,897 | 46,477 | 36,109 | ||||
Acquisition, integration and severance costs (b) | 3,612 | 4,500 | 10,166 | 9,840 | ||||
Share-based payments and related payroll taxes(c) | 32,704 | 4,953 | 69,944 | 9,058 | ||||
Loss (gain) on foreign currency exchange | (8,467 | ) | 1,691 | (7,887 | ) | 1,246 | ||
Legal settlement and other (d) | 682 | (63 | ) | 1,207 | 96 | |||
Adjustments | 44,143 | 28,978 | 114,197 | 56,349 | ||||
Income tax expense related to adjustments (e) | (4,567 | ) | (3,386 | ) | (10,079 | ) | (7,386 | ) |
Adjusted net income | 74,659 | 64,506 | 143,715 | 115,667 | ||||
Net income attributable to non-controlling interest | (1,104 | ) | (1,084 | ) | (2,615 | ) | (2,060 | ) |
Adjusted net income attributable to the common shareholders of the Company | 73,555 | 63,422 | 141,100 | 113,607 | ||||
Weighted average number of common shares outstanding | ||||||||
Basic | 141,442,328 | 138,719,227 | 142,148,713 | 138,462,027 | ||||
Diluted | 144,884,842 | 143,265,259 | 145,703,289 | 142,991,370 | ||||
Adjusted net income per share attributable to common shareholders of the Company (f) | ||||||||
Basic | 0.52 | 0.46 | 0.99 | 0.82 | ||||
Diluted | 0.51 | 0.44 | 0.97 | 0.79 |
(a) This line item relates to amortization expense taken on intangible assets created from the purchase price adjustment process on acquired companies and businesses and resulting from a change in control of the Company.
(b) These expenses relate to:
(i) professional, legal, consulting, accounting and other fees and expenses related to our acquisition activities and financing activities. For the three months and six months ended
(ii) acquisition-related compensation was
(iii) change in deferred purchase consideration for previously acquired businesses. A
(iv) severance and integration expenses, which were
(c) These expenses represent expenses recognized in connection with stock options and other awards issued under share-based plans as well as related payroll taxes that are directly attributable to share-based payments. For the three months and six months ended
(d) This line item primarily represents legal settlements and associated legal costs, as well as non-cash gains, losses and provisions and certain other costs. These costs are presented in selling, general and administrative expenses.
(e) This line item reflects income tax expense on taxable adjustments using the tax rate of the applicable jurisdiction.
(f) The number of share-based awards used in the diluted weighted average number of common shares outstanding in the Adjusted net income per diluted share calculation is determined using the treasury stock method as permitted under IFRS.
Revenue by geography
The following table summarizes our revenue by geography based on the billing location of the merchant:
Three months ended |
Change | Six months ended |
Change | |||||||||||
(In thousands of |
2022 | 2021 | 2022 | 2021 | ||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||
Revenue | ||||||||||||||
119,932 | 93,435 | 26,497 | 28 | % | 244,519 | 165,567 | 78,952 | 48 | % | |||||
83,418 | 77,553 | 5,865 | 8 | % | 164,083 | 149,008 | 15,075 | 10 | % | |||||
6,911 | 5,368 | 1,543 | 29 | % | 13,336 | 10,508 | 2,828 | 27 | % | |||||
1,033 | 1,883 | (850 | ) | (45 | )% | 3,900 | 3,636 | 264 | 7 | % | ||||
211,294 | 178,239 | 33,055 | 19 | % | 425,838 | 328,719 | 97,119 | 30 | % |
Reconciliation of Revenue at Constant Currency and Revenue Growth at Constant Currency to Revenue
In the second quarter of 2022, we introduced this new non-IFRS measure to assess the performance of the business on a more comparable foreign currency exchange basis. Management believes that excluding the impact of changes in foreign currency exchange rates will provide better information on the Company's comparable performance year-over-year. The following table reconciles Revenue to Revenue at constant currency and Revenue growth at constant currency for the period indicated:
(In thousands of |
Three months ended |
Three months ended |
|||||||
Revenue as reported | Foreign currency exchange impact on revenue |
Revenue at constant currency |
Revenue as reported | Revenue growth |
Revenue growth at constant currency |
||||
$ | $ | $ | $ | ||||||
Revenue | 211,294 | 9,413 | 220,707 | 178,239 | 19 | % | 24 | % |
(In thousands of |
Six months ended |
Six months ended |
|||||||
Revenue as reported | Foreign currency exchange impact on revenue |
Revenue at constant currency |
Revenue as reported | Revenue growth |
Revenue growth at constant currency |
||||
$ | $ | $ | $ | ||||||
Revenue | 425,838 | 16,842 | 442,680 | 328,719 | 30 | % | 35 | % |
Reconciliation of Organic revenue and Organic revenue growth to Revenue
In the second quarter of 2022, we modified the composition of our Organic revenue metric to Organic revenue at constant currency. The only change in the composition of our Organic revenue metric as compared to prior periods is to exclude foreign currency exchange impact on Organic revenue. Management believes that excluding the impact of changes in foreign currency exchange rates will provide better information on the Company's comparable performance year-over-year. The following table reconciles Revenue to Organic revenue at constant currency and Organic revenue growth at constant currency for the period indicated:
(In thousands of |
Three months ended |
Three months ended |
||||||||||||
Revenue as reported | Revenue from acquisitions (a) | Revenue from divestitures | Foreign currency exchange impact on organic revenue | Organic revenue at constant currency | Revenue as reported | Revenue from divestitures | Comparable organic revenue | Revenue growth | Organic revenue growth at constant currency | |||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||
Revenue | 211,294 | (13,672 | ) | — | 8,801 | 206,423 | 178,239 | — | 178,239 | 19 | % | 16 | % |
(In thousands of |
Six months ended |
Six months ended |
||||||||||||
Revenue as reported | Revenue from acquisitions (a) | Revenue from divestitures | Foreign currency exchange impact on organic revenue | Organic revenue at constant currency | Revenue as reported | Revenue from divestitures | Comparable organic revenue | Revenue growth | Organic revenue growth at constant currency | |||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||
Revenue | 425,838 | (30,263 | ) | — | 15,713 | 411,288 | 328,719 | — | 328,719 | 30 | % | 25 | % |
(a) We acquired
Source: Nuvei Corporation