MONTREAL, May 10, 2021 – Nuvei Corporation (“Nuvei” or the “Company”) (TSX: NVEI and NVEI.U), the global payment technology partner of thriving brands, today reported its financial results for the first quarter ended March 31, 2021.
“We’re very pleased with our results for the first quarter with both continuing momentum in the core business and the acceleration of new client wins contributing to 132% total volume* growth, 80% revenue growth and 97% Adjusted EBITDA** growth over the first quarter of 2020,” said Philip Fayer, Nuvei’s Chair and CEO. “Our focus on building leading-edge solutions to facilitate and help our clients best connect with their clients continued during the first quarter as we expanded our reach with new markets, added multiple alternative payment methods (“APMs”) and introduced new capabilities like supporting payment in cryptocurrencies. These initiatives coupled with significant volume growth from current and new clients position us extremely well to drive our overall performance and growth this year and into the future. We are proud of our results and raising our financial outlook for the full year 2021.”
Financial Highlights for the Three Months Ended March 31, 2021
- Total volume* increased 132%, to $20.6 billion from $8.9 billion
- eCommerce represented approximately 87% of total volume
- Revenue increased 80%, to $149.9 million from $83.2 million
- Net income was $27.8 million compared to a net loss of $62.3 million
- Adjusted EBITDA** increased 97%, to $65.5 million from $33.3 million
- Adjusted net income** was $51.2 million compared to $9.8 million
- Net income per share of $0.19 compared to a net loss per share of $0.74
- Adjusted net income** per diluted share of $0.35 compared to $0.11
Operational Highlights
- Volume growth from current merchant customers and the acceleration of new client wins drove Nuvei’s first quarter performance. New eCommerce business more than tripled in the first quarter of 2021 compared to the first quarter of 2020 largely as a result of the Company’s ongoing investment in and expansion of its direct distribution channel.
- Nuvei expanded its card acquiring coverage launching local processing solutions in Argentina, Chile, Peru and Ecuador, while expanding its acquiring capabilities in Brazil, Colombia and Mexico. The Company now provides local acquiring in 44 markets up from 35 at year end 2020.
- The Company added multiple new APMs including Pix in Brazil, MoMo wallet in Vietnam, PagueloFacil in Panama, Mach in Chile, Kakao Pay in South Korea, TrueMoney in Thailand and Alipay HK in Hong Kong, increasing the Company’s portfolio of APMs to 470 at the end of the first quarter of 2021 from 455 at year end 2020.
- The Company recently added pay-in and payout support for nearly 40 of the world’s leading cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, Litecoin, NEO and XRP. With this capability, merchants can now accept cryptocurrencies as easily as any other form of alternative payment method at a time when both the number of cryptocurrency users continues to expand and mainstream adoption steadily increases.
- The Company entered into several new partnerships including one with Universal Air Travel Plan (“UATP”) to begin offering full payment services as part of UATP’s ongoing effort to expand its offerings to airlines, optimize payment processing, enrich the client experience and lower transaction costs. UATP is a global payment network owned and operated by the world’s leading airlines and accepted by thousands of merchants for air, rail and travel agency payments.
- Nuvei continued to execute on its acquisition strategy by announcing definitive agreements to acquire Mazooma Technical Services Inc. (“Mazooma”) and more recently, SimplexCC Ltd. (“Simplex”).
- The acquisition of Mazooma, a leading account-to-account payments provider to the U.S. online gaming and sports betting market, will further solidify the Company’s commitment to and presence in the U.S. online gaming and sports betting industry by enhancing and expanding Nuvei’s portfolio of alternative payment methods with a leading ACH platform developed and used exclusively for online gaming in the U.S. and providing the necessary product functionality, vendor registration, compliance, and operational infrastructure to address merchant’s requirements in any regulated U.S. state.
- The acquisition of Simplex, a payment solution provider to the cryptocurrency industry, will expand Nuvei’s capabilities to offer bespoke anti-money laundering / know your customer solutions, transaction guarantee solutions, and valued added services to 190 liquidity providers and partners. This results in higher conversion rates when end-users buy/sell digital assets like cryptocurrencies and non fungible tokens. In addition, the acquisition will provide Nuvei with an electronic money institution license to offer international bank account number accounts to end users and merchants, which opens up potential opportunities like banking as a service.
Financial Outlook
For the three months ending June 30, 2021 and year ending December 31, 2021, Nuvei anticipates total volume, revenue and Adjusted EBITDA to be in the ranges below. Considering the strong performance during the three months ended March 31, 2021, where Nuvei exceeded the previously anticipated total volume, revenue and Adjusted EBITDA outlook, as well as continuing momentum in the business, management is raising the financial outlook for the year ending December 31, 2021.
The financial outlook is fully qualified and based on a number of assumptions described under the heading “Forward-Looking Information” of this press release, and does not include the pending acquisitions of Mazooma or Simplex.
| (In U.S. dollars) | Three months ending June 30, 2021 | | Year endingDecember 31, 2021 |
| $ | | $ |
| | | Previous | Updated |
| Total volume* (in billions) | 21 – 22 | | 81 – 87 | 83 – 89 |
| Revenue (in millions) | 153 – 159 | | 570 – 600 | 610 – 640 |
| Adjusted EBITDA** (in millions) | 66 – 70 | | 252 – 265 | 264 – 277 |
*Total volume 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. Total volume is explained in further detail in the Company’s most recent Management’s Discussion and Analysis of Financial Condition and Results of Operations.
**Adjusted EBITDA and Adjusted net income are non-IFRS measures. See “Non-IFRS Measures”.
Conference Call Information
Nuvei will host a conference call to discuss its first quarter 2021 financial results today May 10, 2021 at 8:30 am ET. Hosting the call will be Philip Fayer, Chair and CEO, and David Schwartz, CFO.
The conference call will be webcast live from the Company’s investor relations website at https://investors.nuvei.com/ under the “Events & Presentations” section. The conference call can also be accessed live over the phone by dialing 877-425-9470 (US/Canada toll-Free), or 201-389-0878 (international). A replay will be available approximately two hours after the call, and can be accessed by dialing 844-512-2921 (US/Canada toll-Free), or 412-317-6671 (international); the conference ID is 13718591. The replay will be available until May 24, 2021. An archive of the webcast will be available at the same location on the website shortly after the call has concluded.
About Nuvei
We are Nuvei (TSX: NVEI and NVEI.U), the global payment technology partner of thriving brands. We provide the intelligence and technology businesses need to succeed locally and globally, through one integration – propelling them further, faster. Uniting payment technology and consulting, we help businesses remove payment barriers, optimize operating costs and increase acceptance rates. Our proprietary platform connects merchants in 200 markets worldwide with local acquiring in 44 markets, supports 470 local and alternative payment methods, nearly 150 currencies and 40 cryptocurrencies. Our purpose is to make our world a local marketplace. For more information, visit www.nuvei.com.
Non-IFRS Measures
Nuvei’s unaudited condensed interim consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board. The information presented in this press release includes non-IFRS financial measures, namely Adjusted EBITDA, Adjusted net income, Adjusted net income per basic share, and Adjusted net income per diluted share. These measures are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. Adjusted EBITDA, Adjusted net income, Adjusted net income per basic share, and Adjusted net income per diluted share are used to provide investors with a supplemental measure of the Company’s operating performance and thus highlight trends in Nuvei’s core business that may not otherwise be apparent when relying solely on IFRS measures. The Company’s management also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Nuvei’s management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. The Company’s management believes Adjusted EBITDA, Adjusted net income, Adjusted net income per basic share and Adjusted net income per diluted share are important supplemental measures of Nuvei’s performance, primarily because they and similar measures are used widely among others in the payment technology industry as a means of evaluating a company’s underlying operating performance.
Forward-Looking Information
This press release contains “forward-looking information” within the meaning of applicable securities laws, including Nuvei’s outlook on total volume, revenue and Adjusted EBITDA for the three months ending June 30, 2021 and the year ending December 31, 2021. Nuvei’s outlook on revenue and Adjusted EBITDA also constitutes “financial outlook” within the meaning of applicable securities laws and is 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 the Company’s 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 those described under the “Risks Factors” section of the Company’s annual information form filed on March 17, 2021. Forward-looking information is based on management’s beliefs and assumptions and on information currently available to management. Particularly, management’s assessments of, and outlook for, total volume, revenue and Adjusted EBITDA set out herein are generally based on the following assumptions: (a) Nuvei’s results of operations will continue as expected, (b) the Company will continue to effectively execute against its key strategic growth priorities, despite the current COVID-19 pandemic and measures taken to contain the virus, (c) the Company will continue to retain and grow its existing customer base while adding new customers, (d) the Company will not complete any acquisitions or divestitures (e) economic conditions will remain relatively stable throughout the period, (f) the industries Nuvei operates in will continue to grow consistent with past experience, (g) there will be no fluctuations in currency exchange rates and volatility in financial markets, (h) there will be no changes in legislative or regulatory matters that negatively impact Nuvei’s business, and (i) current tax laws will remain in effect and will not be materially changed. Although the forward-looking information contained in this press release is based upon what management believes are reasonable assumptions, you are cautioned against placing undue reliance on this information since actual results may vary from the forward-looking information. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained in this press release is provided as of the date of this press release, and the Company does not undertake 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
Anthony Gerstein
Vice President, Head of Investor Relations
agerstein@nuvei.com
Consolidated Statements of Profit or Loss and Comprehensive Income or Loss Data
(in thousands of U.S. dollars except for share and per share amounts)
| Three months ended March 31 |
| 2021 | 2020 |
| $ | $ |
| Revenue | 149,895 | 83,239 |
| Cost of revenue | 28,979 | 15,168 |
| Gross profit | 120,916 | 68,071 |
| | |
| Selling, general and administrative expenses | 86,056 | 54,866 |
| Operating profit | 34,860 | 13,205 |
| | |
| Finance income | (859) | (1,346) |
| Finance costs | 3,315 | 31,259 |
| | |
| Net finance costs | 2,456 | 29,913 |
| | |
| Loss (gain) on foreign currency exchange | (445) | 45,719 |
| Income (loss) before income tax | 32,849 | (62,427) |
| Income tax expense (recovery) | 5,059 | (84) |
| Net income (loss) | 27,790 | (62,343) |
| | |
| Other comprehensive income (loss) | | |
| Foreign operations – foreign currency translation differences | (14,849) | 39,667 |
| Total comprehensive income (loss) | 12,941 | (22,676) |
| | |
| Net income (loss) attributable to: | | |
| Common shareholders of the Company | 26,814 | (62,593) |
| Non-controlling interest | 976 | 250 |
| 27,790 | (62,343) |
| | |
| Comprehensive income (loss) attributable to | | |
| Common shareholders of the Company | 11,965 | (22,926) |
| Non-controlling interest | 976 | 250 |
| 12,941 | (22,676) |
| | |
| Net income (loss) per share attributable to common shareholders of the Company – Basic and diluted | 0.19 | (0.74) |
| | |
| Weighted average number of common shares outstanding(a) | | |
| Di base | 138,201,970 | 84,604,769 |
| Diluted | 142,741,312 | 84,604,769 |
2020. The weighted average number of common shares outstanding previous to the IPO has been adjusted to take into consideration the Reorganization discussed in Note 17 of the Consolidated Financial Statements for the year ended December 31, 2020.
Reconciliation of Adjusted EBITDA to net income (loss)
(In thousands of U.S. dollars)
| Three months ended March 31 |
| 2021 | 2020 |
| $ | $ |
| Net income (loss) | 27,790 | (62,343) |
| Finance cost | 3,315 | 31,259 |
| Finance income | (859) | (1,346) |
| Depreciation and amortization | 20,998 | 17,313 |
| Income tax expense (recovery) | 5,059 | (84) |
| Acquisition, integration and severance costs(a) | 5,340 | 1,670 |
| Share-based payments(b) | 4,105 | 333 |
| Loss (gain) on foreign currency exchange | (445) | 45,719 |
| Legal settlement costs and other(c) | 159 | 766 |
| Adjusted EBITDA(d) | 65,462 | 33,287 |
| Advance from third party – merchant residual received(e) | 2,728 | 2,948 |
- These expenses relate to:
- professional, legal, consulting, accounting and other fees and expenses related to our acquisition activities and financing activities during the period, which were $5.3 million for the three months ended March 31, 2021 (March 31, 2020 – $1.2 million). These costs are presented in the professional fees line item of selling, general and administrative expenses.
- acquisition-related compensation, which was nil for the three months ended March 31, 2021 (March 31, 2020 – $0.2 million). These costs are presented in the employee compensation line item of selling, general and administrative expenses.
- severances, which were immaterial for the three months ended March 31, 2021 (March 31, 2020 – $0.2 million), and integration expenses. Severance costs are presented in the employee compensation line item of selling, general and administrative expenses.
- These expenses represent non-cash expenses recognized in connection with stock options and other awards issued under share-based plans.
- This line item primarily represents legal settlements and associated legal costs reached outside of the normal course of business, as well as non-cash gains, losses and provisions and certain other costs. These costs are presented in the other line item of the selling, general and administrative expenses.
- Adjusted EBITDA is a non-IFRS measure that the Company uses to assess its operating performance and cash flows.
- Commencing in 2018, the Company entered into various agreements with a single third-party independent sales organization to acquire the rights to future cash flows from a portfolio of merchant contract.
Reconciliation of Adjusted net income to net income (loss)
(In thousands of U.S. dollars except for per share amounts)
| Three months ended March 31 |
| 2021 | 2020 |
| $ | $ |
| Net income (loss) | 27,790 | (62,343) |
| Change in redemption value of liability-classified common and preferred shares(a) | – | 11,636 |
| Amortization of acquisition-related intangible assets(b) | 18,212 | 14,178 |
| Acquisition, integration and severance costs(c) | 5,340 | 1,670 |
| Share-based payments(d) | 4,105 | 333 |
| Loss (gain) on foreign currency exchange | (445) | 45,719 |
| Legal settlement costs and other(e) | 159 | 766 |
| Adjustments | 27,371 | 74,302 |
| Income tax expense related to adjustments(f) | (4,000) | (2,179) |
| Adjusted net income (loss)(g) | 51,161 | 9,780 |
| Adjusted net income per share attributable to common shareholders of the Company(h) | | |
| Di base | 0.36 | 0.11 |
| Diluted | 0.35 | 0.11 |
- This line item represents change in redemption value related to shares classified as liabilities prior to the IPO. As part of the IPO, the shares were converted into equity as Subordinate Voting Shares. These expenses are included in finance costs.
- This line item relates to amortization expense taken on intangible assets created from the purchase price adjustment process on acquired companies and businesses and from the acquisition of all the outstanding shares of Pivotal Holdings Ltd. by Nuvei in September 2017 and excludes amortization expense related to capitalized development costs incurred in the normal course of operations.
- These expenses relate to:
- professional, legal, consulting, accounting and other fees and expenses related to our acquisition activities and financing activities during the period, which were $5.3 million for the three months ended March 31, 2021 (March 31, 2020 – $1.2 million). These costs are presented in the professional fees line item of selling, general and administrative expenses.
- acquisition-related compensation, which was nil for the three months ended March 31, 2021 (March 31, 2020 – $0.2 million). These costs are presented in the employee compensation line item of selling, general and administrative expenses.
- severances, which were immaterial for the three months ended March 31, 2021 (March 31, 2020 – $0.2 million), and integration expenses. Severance costs are presented in the employee compensation line item of selling, general and administrative expenses.
- These expenses represent non-cash expenses recognized in connection with stock options and other awards issued under share-based plans.
- This line item primarily represents legal settlements and associated legal costs reached outside of the normal course of business, as well as non-cash gains, losses and provisions and certain other costs. These costs are presented in the other line item of the selling, general and administrative expenses.
- This line item reflects income tax expense on taxable adjustments using the tax rate of the applicable jurisdiction.
- Adjusted net income is a non-IFRS measure that the Company uses to further assess its operating performance.
- Adjusted net income per diluted share is calculated using stock options outstanding at the end of each period on a fully diluted basis if they were in-the-money at that time.
Consolidated Statements of Financial Position Data
(in thousands of U.S. dollars)
| | March 31, | | December 31, |
| 2021 | 2020 |
| $ | $ |
| Assets | | | |
| Current assets | | | |
| Cash | 144,464 | | 180,722 |
| Trade and other receivables | 42,546 | | 32,055 |
| Inventory | 110 | | 80 |
| Prepaid expenses | 5,214 | | 4,727 |
| Income taxes receivables | 6,401 | | 6,690 |
| Current portion of advances to third parties | 8,302 | | 8,520 |
| Current portion of contract assets | 1,858 | | 1,587 |
| Total current assets before segregated funds | 208,895 | | 234,381 |
| Segregated funds | 540,018 | | 443,394 |
| Total current assets | 748,913 | | 677,775 |
| | | | |
| Non-current assets | | | |
| Advances to third parties | 36,690 | | 38,478 |
| Property and equipment | 15,721 | | 16,537 |
| Intangible assets | 561,115 | | 524,232 |
| Goodwill | 995,935 | | 969,820 |
| Deferred tax assets | 5,457 | | 3,785 |
| Contract assets | 923 | | 1,300 |
| Processor deposits | 14,804 | | 13,898 |
| Other non-current assets | 1,902 | | 1,944 |
| Total Assets | 2,381,460 | | 2,247,769 |
Consolidated Statements of Financial Position Data
(in thousands of U.S. dollars)
| | March 31, | | December 31, |
| 2021 | 2020 |
| $ | $ |
| Liabilities | | | |
| Current liabilities | | | |
| Trade and other payables | 69,964 | | 64,779 |
| Income taxes payable | 13,564 | | 7,558 |
| Current portion of loans and borrowings | 2,274 | | 2,527 |
| Other current liabilities | 8,098 | | 7,132 |
| Total current liabilities before due to merchants | 93,900 | | 81,996 |
| Due to merchants | 540,018 | | 443,394 |
| Total current liabilities | 633,918 | | 525,390 |
| | | |
| Non-current liabilities | | | |
| Loans and borrowings | 212,602 | | 212,726 |
| Deferred tax liabilities | 47,296 | | 50,105 |
| Other non-current liabilities | 11,731 | | 1,659 |
| Total Liabilities | 905,547 | | 789,880 |
| | | |
| Equity | | | |
| Equity attributable to shareholders | | | |
| Share capital | 1,628,244 | | 1,625,785 |
| Contributed surplus | 14,790 | | 11,966 |
| Deficit | (184,228) | | (211,042) |
| Accumulated other comprehensive income | 7,621 | | 22,470 |
| 1,466,427 | | 1,449,179 |
| Non-controlling interest | 9,486 | | 8,710 |
| Total Equity | 1,475,913 | | 1,457,889 |
| Total Liabilities and Equity | 2,381,460 | | 2,247,769 |
Consolidated Statements of Cash Flows Data
(in thousands of U.S. dollars)
| | Three months ended March 31 |
| | 2021 | 2020 |
| $ | $ |
| Cash flows from (used in) operating activities | | |
| Net income (loss) | 27,790 | (62,343) |
| Adjustments for: | | |
| Depreciation of property and equipment | 1,350 | 1,841 |
| Amortization of intangible assets | 19,648 | 15,472 |
| Amortization of contract assets | 487 | 525 |
| Share-based payments | 4,105 | 333 |
| Net finance costs | 2,456 | 29,913 |
| Loss (gain) on foreign currency exchange | (445) | 45,719 |
| Income tax expense (recovery) | 5,059 | (84) |
| | |
| Changes in non-cash working capital items | (3,198) | (15,631) |
| | |
| Interest paid | (2,836) | (16,299) |
| Income taxes paid | (1,013) | (12) |
| 53,403 | (566) |
| Cash flows used in investing activities | | |
| Business acquisitions, net of cash acquired | (88,930) | – |
| Decrease in other non-current assets | 522 | 181 |
| Net decrease (increase) in advances to third parties | 2,865 | (1,734) |
| Acquisition of property and equipment | (593) | (978) |
| Acquisition of intangible assets | (4,145) | (3,034) |
| (90,281) | (5,565) |
| Cash flows from financing activities | | |
| Transaction costs related to loans and borrowings | – | (20) |
| Proceeds from exercise of stock options | 1,178 | – |
| Proceeds from loans and borrowings | – | 56,999 |
| Repayment of loans and borrowings | – | (34,185) |
| Payment of lease liabilities | (642) | (631) |
| Dividend paid by subsidiary to non controlling interest | (200) | (200) |
| 336 | 21,963 |
| | |
| Effect of movements in exchange rates on cash | 284 | (401) |
| | | |
| Net increase (decrease) in cash | (36,258) | 15,431 |
| | | |
| Cash – Beginning of period | 180,722 | 60,072 |
| Cash – End of period | 144,464 | 75,503 |
