Greetings, and welcome to the Paysafe Limited fourth quarter 2025 earnings conference call and webcast. At this time, participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Kirsten Nielsen, Head of Investor Relations. Please go ahead.

Thank you, and welcome to Paysafe Limited's earnings conference call for the fourth quarter and full year 2025. Joining me today are Bruce Lowthers, Chief Executive Officer, and John Crawford, Chief Financial Officer. Before we begin, a reminder that this call will contain forward-looking statements and should be considered in conjunction with cautionary statements contained in our earnings release. These statements reflect management's current assumptions and expectations, and the company's most recent SEC reports, and are subject to factors that may cause actual results to differ materially from those forward-looking statements. You should not place undue reliance on these statements. Forward-looking statements during this call speak only as of the date of this call, and we undertake no obligation to update them. Today's presentation also contains non-GAAP financial measures. You can find additional information about these non-GAAP measures and reconciliations to the most directly comparable GAAP financial measures in today's press release and in the appendix of this presentation, which are available in the Investor Relations section of the website. With that, I will turn the call over to Bruce.

Good morning, everyone, and thank you for joining us today. I will start off with a few key messages. In 2025, we delivered our third consecutive year of organic revenue growth while continuing to sharpen our focus on experience-driven commerce. While business mix led to a different margin outcome than the original outlook called for, I want to reiterate that we have made incredible progress in 2025. For the last three years, we have made deep structural changes modernizing our platform, upgrading our talent, and positioning Paysafe Limited for its next phase of growth. During this time frame, we renewed our focus on product innovation, which is reflected in the progress of our vitality index. I am confident that the positive impact of this work will become increasingly evident through our financial results as we move forward. I am grateful for the dedication of our 2,008 colleagues worldwide. Their resilience has driven us through the challenges and laid a foundation of accelerated growth and exceptional experiences for both customers and employees. Let's move to slide four. For the full year, we reported $1.7 billion in revenue, growth of 6% excluding the disposition. While we saw softer results in the SMB business, this was offset by double-digit growth from e-commerce, including record iGaming volumes across the U.S. football season. We also saw strong demand for our local payment solutions in Latin America and, increasingly, consumer engagement from product initiatives across Europe. Importantly, our digital wallet consumers reached 7.8 million at quarter end, our highest level in three years. We generated an impressive $298 million in unlevered free cash flow in 2025, despite divesting a business line that generated $40 million in EBITDA the prior year. This provided us with the flexibility to return more than $90 million to shareholders in 2025…

Thank you, Bruce. Let's move to slide 16 for a summary of our fourth quarter results. Revenue for Q4 was $438.4 million, an increase of 4% on both a reported and organic basis, as the impact from the business disposal and a modest headwind from interest revenue was offset by favorable FX. Organic performance in the fourth quarter reflects 6% growth from digital wallets, led by Latin America, which increased more than 202%, and organic growth for Merchant Solutions driven by continued strong volumes from e-commerce merchants which offset a decline from SMB. Relative to the revised expectations we outlined in November, our Q4 performance was in line overall. Adjusted EBITDA declined 1% to $102.1 million in the fourth quarter, and adjusted EBITDA margin declined 130 basis points, mainly due to higher marketing investment and OpEx timing items. These impacted the margin comparisons throughout the second half compared to 2024. We generated $103 million in unlevered free cash flow in the quarter, bringing our cash flow conversion to 101%, which benefited from the license deal completed in Q3 as well as timing-related working capital flows. This brings our full-year cash conversion to 69%, which is at the high end of our targeted range. Adjusted EPS decreased 4% to $0.46 compared to $0.48 in Q4 of last year, including higher depreciation and amortization expense, fully offset by a reduction in our adjusted tax rate as well as a reduction in share count from our share repurchase activity. Moving to slide 17. A quick recap: our full-year reported revenue growth was flat year over year at $1.7 billion. Including impacts from FX, interest revenue, and the disposed business, organic revenue growth was 5%. Adjusted EBITDA declined 5% to $429 million, and adjusted EBITDA margin was 25.2%. Excluding the noise from the business…

Thank you. We will now be conducting a question-and-answer session. Our first question is coming from Dan Perlin from RBC Capital Markets. Your line is now live.

Good morning, everyone. Bruce, I was wondering if we could revisit the strategic initiatives as you see them to reaccelerate SMB as we think about going into 2026. You alluded to it a little bit in the prepared remarks, but anything incremental would be helpful. Thank you. That is great. And then just on the guide for 2026, I am wondering, given the state of the world, what expectations you have baked in in terms of macro environments. I think you touched a little bit on FX. And then if there is any delineation you can draw between SMB and e-commerce growth, that would be great. Thank you.

On the SMB side of things, we have been putting a lot of energy around that in 2025 and building momentum into 2026, which we can see already emerging early in Q1. We feel very good about the product sets that we have, seeing significant lift with our Clover sales in Q4—really pretty strong. I think we were north of 30% in new MIDs year over year in Q4 with Clover, so we feel very good about that. We have engaged new management, so we have a new team that is leading us in the SMB space. I think that is going to really pay tremendous dividends, and we are excited about having the team on board. From a product standpoint, we feel very good about the product set that we have. It really now is just about execution. We have really honed our marketing on the SMB side. We see real strength in the direct channel, so we feel like we are in a pretty good position overall with the new team, strong product, value-added services, and increased marketing around merchant acquisition. Overall, we feel like we are coming into 2026 in a very good place. John, do you want to take the macro?

On the macro, I think we are baking in relative stability on the FX side. As folks probably remember, Q1 last year, the euro was much lower and moved a lot at the end of the quarter. We do not have dramatic changes other than what is projected in the current curves out there in terms of interest rate changes as well, and no significant real change in the macroeconomic environment.

As John said in the prepared remarks, the nice thing about 2026 is it is a very clean year for us. We do not have a lot of activity. Obviously, the divestitures have worked their way through, all the grow-overs have worked their way through, and it looks like a very clean year for us as we go into 2026.

Thank you. Our next question is coming from Darrin Peller from Wolfe Research. Your line is now live.

Hi, thanks. This is Paul Obrecht on for Darrin. Can you help frame the opportunity of the Paysafe wallet? Where are you seeing momentum with this product initially? What do consumer engagement trends look like? And then, in the deck, you also called out plans to expand it to more geos. Where do you see the most opportunity? And then, you briefly touched on it in your prepared remarks, but could you provide any more detail on how you see Paysafe Limited’s role evolving in Agenic Commerce and what steps you are taking today to prepare for eventual consumer adoption down the line?

Good morning, and thank you for the question. We are very excited about Paysafe wallet. We have had a lot of momentum with that product over the last 12 to 18 months as we have been flying under the radar with it. It is something that we have invested in quite a bit over the last year. We are in 18 countries right now. As we look at the growth of that product, it is really about continued execution on the rollout. The product is very solid. We feel very good. We talked about the 500,000 registered users for it. When we look at that, it is really on pace with what the others that are in that vertical—embedded finance—have done. When you go back and look at their initial couple of years, we are tracking right in line with them, which is great to see. I think the big differential is the cost, because we have roughly 8 million active users out there. We are marketing a lot to our own users and driving those into the Paysafe wallet. We feel very good from a feature-functionality standpoint and from cost of acquisition right now. We are going to invest some marketing behind this and really drive it in 2026. From a geographic footprint for 2026, we are going to continue to focus within Europe and really drive within Europe. It is not an aggressive geographic expansion outside of Europe. We will do some test-and-learn in probably a couple of markets, but predominant growth is expected within the Europe region. So for us, we have been really incorporating a foundational change to the organization. When we look at Agenic Commerce, it is really about TAM expansion for us. We are going to stay within the entertainment area—or the experience economy is really where we like to play—so you will see us continue to stay within those verticals. For us, it gives us the ability to accelerate product into travel and leisure, for example. When we look at our verticals, we have tremendous strength in the gaming space, whether that be video gaming or sports betting. We think Agenic Commerce allows us to step into some of these adjacent verticals that will help really drive an overall experience for us in our market within the experiential economy. We think it is a great opportunity. It is something that we have been working with over the last few years. Going back to when the first Copilot rolled out a few years ago, we were one of the 200 companies to adopt that. We have had our head of technology out on the West Coast working with all the major players in this space on protocols and making sure that we are aligned with how the market is moving, so we feel very good about our level of engagement around this.

Thank you. Our next question is coming from Andrew Harte from BTIG. Your line is now live.

Hey, thanks for the question. Good morning. Bruce, last quarter we talked about the Digital Wallets segment still being under construction, but it feels like in 4Q the business seems to have really accelerated. What changed there, and how should we think about it going forward? Are there any one-off benefits we should think about that happened in the fourth quarter? And then, on the merchant side, you called out the expectation for 2026 e-commerce revenue growth in the mid-teens and SMB to return to growth. Could you break out how we should think about direct sales versus ISO—any growth rates we should think about for those two, and maybe e-commerce as well—and help us with how to think about the relative margin contributions of each?

There was really nothing in a one-off context in Q4 around the digital wallet space. We have a lot of momentum building. Earlier in 2025, we had some issues that we needed to work through as we continued to expand the use cases around our wallet, but those are normal new-product launches. You can see our vitality index is getting very strong, moving from 2% in 2022 to 16%. We will see that accelerate in 2026, so we feel very good about new products that we are bringing to market. In the payments space, it is a very complex network or ecosystem that we participate in. There are a lot of moving parts—from the networks themselves, the back-end processors, the banks that are the bank sponsors. There are a lot of components that all have to be aligned, including regulators by country, and sometimes there are starts and stops as you roll out a product, as each of them make their own determination as to how it is going to work within their institution or regulatory framework. We have worked our way through that. We feel good momentum building, and we feel like we are in a good spot for our vitality index to continue to accelerate in 2026 and ultimately 2027. Overall, really good progress in the back half of the year on our product set. I do not think we have provided historically the direct sales versus ISO segmentation. We can have Kirsten follow up with you. Overall, we feel very good about SMB returning to positive growth in 2026. It will be in line with the overall segment guidance that we have given, and we are already seeing a positive move coming into Q1. We have moved in the right direction early here in Q1.

Thank you. Our next question is coming from Timothy Chiodo from UBS. Your line is now live.

Great, thanks a lot. Slide eight had some good data around the revenue contribution in-year from the sales hires. The number was $257 million for 2025. I am assuming that the gross margin on that is high given generally the direct margins are higher on a gross margin basis. Could you give us a rough sense—how many productive, in-field salespeople were contributing to that number earlier in the year, say January 2025, and how many ended the year—so we can get a sense of the average number of salespeople that produced that in-year contribution of $257 million in revenue? And then I have a follow-up on Agenic Commerce. Are you able to share roughly what that number was, just as a reminder? And then, on Agenic Commerce, when you say that you are preparing to accept payments in that environment—supporting ACP, MCP, UCP, the various Visa and Mastercard initiatives—what do you have to do on the ground to make sure that you can receive that information through that channel and process the payment? What are some of the additional complexities to consider relative to a traditional e-commerce transaction? Is this something you think all merchant acquirers will be doing, or a more select group because of the effort required?

I do not have the number of active enterprise salespeople in front of me. Maybe John has it there, but there has not been a tremendous amount of movement in the number of salespeople throughout the year on the enterprise sales team, so it has been relatively consistent through 2025.

I was just going to say the same thing, Bruce. The number at the end of 2025 is very similar to the number at the end of 2024—about 132. That is just our enterprise sales team.

Right, exactly—the ones associated with the $257 million.

Yes.

On Agenic Commerce, I think this creates an opportunity. I would imagine that most payment organizations get involved with these new standards as we move forward. It is extremely complex. When you think about this new, emerging commerce, it is really about elevating the experience for consumers, and through that it creates a tremendous amount of complexity. It creates personalization, which brings options and different data sets that have to be exchanged, interrogated, and acted upon. You have coordination between all kinds of embedded software—not just the schemes but also the information you are sharing with sponsor banks, additional software providers, and consumers themselves. The biggest thing you hear a lot of people talk about right now is liability management—how do we deal with the liability management of Agenic Commerce? Those things still have a long way to go before they are worked out—the governance rules. Every organization dealing with this has to set up the right governance framework from a board level and an operating level. This is not an easy product that will roll out quickly. It is going to take time. We think this is a great opportunity for us to accelerate into new verticals and create great experiences around the experience economy, but I think this is something that everyone will find a way to participate in, in some form or fashion, within our industry. I would not say this is a one- or two-player, winner-take-all situation. The industry as a whole will participate.

Thank you. Next question is coming from Jamie Friedman from Susquehanna International Group. Your line is now live.

Hi. Good morning. Good finish to the year. To step back about the sales strategy, Bruce, without getting into the details of the commission per head or margin characteristics, could you share what you see as the strengths and challenges between a direct and ISO strategy? And then, you referenced the success in cross-sell between products and services on the platform. Could you elaborate on that and what a good account looks like? Is there any metric you have shared in the past about how many products each is taking, or what you target for the cross-sell opportunity?

Good morning, Jamie, and thank you for the question. Between the ISO and direct, the direct is a much higher-margin profile, which is why we put so much energy behind that side of the sales channel. We are focusing on building the infrastructure that drives scaled sales. We feel like we have the management team in place for that and the product in place. We have a variety of products that we sell in the SMB space, but our partnership with Fiserv has really been working in the back half of the year. We have had a lot of success selling Clover, and we feel like that is a great model for us in the SMB space—not only because it provides the merchant acquiring, but also the value-added services that SMBs need to be successful. We provide that in a great form factor through Clover. Not everybody is going to want that, so we have optionality. We have other products that we use for people that are not looking for such a robust solution, but I would argue that Clover is probably the best solution in market in the U.S. for SMB today. In the ISO channel, it is a little bit different. It is us helping our partners be successful, making sure that they are trained on the products that we have, creating good second-line support for them, and helping them find ways to grow their customer base. That is what we have been focused on over the last year—how we reframe that ISO marketplace. On the SMB space, you have probably seen a lot of energy around the agent space. We have rolled out a new agent program, which we are very excited about. We like the agent program quite a bit. We can see a tremendous amount…

Thank you. We have reached the end of our question-and-answer session. I would like to turn the floor back over to management for any further or closing comments.

Yes, thank you. Just a couple of comments before we head out. As we enter 2026, we are in a very good position. We feel good about the foundation we have built. We are operating with more discipline, clear priorities, and stronger execution across the business. Our outlook is rooted in what we control—continuing to innovate, deepening relationships with our customers, and allocating capital in a way that drives sustainable value—and that is what we are focused on. I also want to take a moment to welcome our new board members. I think everybody has probably seen we added four new board members in the last month, so we are very excited about Rupert and Ruth Aquile, Pete Thompson, Karen Tamponi, and Edward joining the team. We are very excited about that. I also want to quickly thank our departing board members from CVC and congratulate them on their career journeys—Peter Rutland and Matthew Bryant, just congratulations. We are so proud of them, what they have been able to do, and we wish them all the success in their new roles as they move forward. There has been a lot of change for us in the last month, but we are incredibly excited about it as we move forward. Finally, I want to thank our employees for their continued commitment and hard work. As we start 2026, we are starting from a position of strength. For what feels like the first time, we have a clean year to start the year and feel very good about that. We are confident in our ability to build momentum that we created off of Q4. Thank you for joining us today, and we look forward to speaking with everyone next quarter.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.