Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Payfare Inc (PYFRF, Financial) reported its sixth consecutive earnings-positive quarter, showcasing consistent profitability.
- The company reaffirmed its 2024 revenue and adjusted EBITDA guidance, indicating strong growth expectations.
- Payfare Inc (PYFRF) signed a long-term contract extension with Lyft, ensuring continued collaboration and future product enhancements.
- The company reported record quarterly revenue of $56 million, up 20% year-over-year, driven by marketing initiatives and organic growth.
- Payfare Inc (PYFRF) maintains a strong financial condition with $67 million in cash and $28 million in liquid high-yield deposit investments, and remains debt-free.
Negative Points
- The company did not provide specific details on contract discussions with DoorDash, leaving some uncertainty about future collaborations.
- The recent launch with a big box retailer is not expected to have meaningful implications immediately.
- Payfare Inc (PYFRF) faces challenges in expanding its Earned Wage Access (EWA) market due to the complexity of integrating with various payroll and time attendance platforms.
- The company’s growth is heavily reliant on a few key clients like Lyft, DoorDash, and Uber, which could pose a risk if any of these partnerships were to change.
- There is ongoing competition in the EWA space, and regulatory uncertainties could impact the company's operations and growth.
Q & A Highlights
Q: Nice to see solid results. I was wondering if you could kind of -- I know you reiterated your guide for the year and the guide does imply acceleration during the year. Could you just kind of walk us through, again, some of the factors that are driving that, the reiteration of the guide and what's implied in acceleration? And then I have a follow-up.
A: Joe, it's Charles here. I can take that question. Joe, so in terms of the guidance from a revenue perspective, as you know, our stronger quarters tend to be on the latter half of the year. In addition to that, we had a really successful launch of our most recent program, the Uber Pro Canada program, which has onboarded quite a few active users, in addition to the continuing growth that we've seen in our existing platforms as well or programs with both Lyft and DoorDash. Those are the main drivers. As you know, those are our key clients that we have on board. So both kind of driven by kind of new programs that have launched and continuing growth with our existing programs with kind of the seasonality that we've always seen in the second half of the year. Those are the main drivers.
Q: Drill down on the Uber Canada. I know -- I believe the launch has gone pretty well and you're signing a lot of drivers because you're still really driving your business from these 3 big partners today. Maybe if you could provide a little more color on where Uber Canada sits today versus where it was under the previous program, that would be helpful.
A: Sure, Joe. So we don't disclose specific numbers, but maybe I can take -- talk to you in quantums of percentages. Year-over-year, we're looking at an increase of over 400% just in terms of the user base. And quarter-over-quarter, we're looking at well over 100%, just to give you quantum.
Q: That's great. And then just maybe a quick update on your announcement with BDP Canada. I know that's set for a little later in the year. Any updates to provide to everybody here on progress on that?
A: Joe, it's Marco. I guess nothing more to update, at this point, other than we're on track to kind of hit the targets we had set out, which was to be live at some capacity beyond just testing in Q4. And so as that progresses, we'll certainly keep everyone aware of what the progress has been and then reaffirming the launch time of early Q4.
Q: My congratulations on the quarter. Just [indiscernible] big box retailer seems to be live now [indiscernible] Expectations for that kind of as we head into the back half of the year and beyond that.
A: Adhir, I'm not sure if it was just me, but it kind of cut out, but I think I got the bulk of it. If I haven't, maybe Charles step in. But I think the question was around the big box retailer we had recently launched. It is launched. I can confirm that. In terms of the opportunity itself, it's not going to have any meaningful implications as of right now, but there are already talks about expanding the program elsewhere potentially as well as giving good footprint into another market we're keen on entering into. And so when that kind of becomes public knowledge and we're able to share what those details look like, we'll certainly do that. But the playbook for us there was launch the program with another marquee name and then rapidly expand it into other markets where we can actually pick up significant business activity and leverage the infrastructure we'll use in those new markets.
Q: Okay. Got it. Hopefully, you can hear me a little bit better. When you talk about the pipeline, I think you mentioned you have a pipeline that could potentially double the GDV. What verticals are those coming from? Is that kind of ongoing gig partnerships? Or is it kind of new EWA players from, like, maybe the ADP partnership that [indiscernible]
A: Yes, gig platforms, everyone would know. Yes, I mean we can leave it at that, but no surprise. There would be large-scale gig platforms delivery to be specific. And so yes, those are in the pipe. We're not banking on them just yet, but they are there, and there's significant volume as well as markets we're already established in. So it could come sooner than later, but we're just not sure on timing, and hopefully, we could get to a point where we could have that all signed up and announced in short order.
Q: Got it. And then maybe one last one just on the corporate development executive that you signed, Alex Ceballos. He's going to be leading our international expansion efforts. Is that largely also kind of to coincide with the international big box retailer and expanding that into new markets? Or do you see kind of stuff beyond just the gig platforms and that big box retailer in terms of expansion into international markets?
A: Yes. Alex brings a wealth of experience, as you can imagine in what was highlighted in the press release, even just the tenure of all the things he has done at Amazon as well as Nubank and several other companies that he's helped out over the years. He brings a wealth of experience that certainly aligns with what we're after right now, which is global expansion as well as inorganic expansion. And so we thought he would be an amazing fit for our strategic moves and where we're going next. What specifics around the big box retailer? There is a market in there that he's very familiar with, and so that certainly does play a part. We were looking at that market irrespective for some other initiatives we have. And so it was just a perfect fit in that regard. So it's not just for that big box retailer. It's more of a global expansion effort, which, in order for us to do this efficiently, we are looking to grow organically -- or inorganically rather. And I think he could play a big part in that as well.
Q: Marco, maybe just go back to the EWA, the ADP partnership. I mean, is that your preferred method to get more into payroll is partnering with, like, tech providers like that as opposed to some of the EWA providers out there that are kind of -- I think we've talked in the past like block-and-tackle, signing up restaurant chains on an individual basis? I mean is there a lot of ADPs out there that you can try and partner with, like, to offer similar products?
A: Yes. I think the clear path for us is partnering with major distribution channels. Well, when you think of payroll, I mean, obviously, we're speaking about payroll providers. And so in that regard, if we were to partner with payroll providers along the way, we would certainly get access to the data and infrastructure we need to actually execute those EWA
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
