Paysafe (PSFE) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue grew 4% year-over-year to $447.4 million, with first half revenue up 7% and adjusted EBITDA down 2% to $102.8 million, reflecting increased marketing and IT investments.

• Active consumers rose 8% year-over-year to 7.8 million, with double-digit growth in Latin America, iGaming, and PaysafeWallet in Europe.

• Major legacy litigation (Farzad case) was resolved, removing a key overhang and contributing to higher restructuring and legal costs.

• Completed significant debt refinancing, extending maturities and increasing revolver capacity, supporting deleveraging and liquidity.

• Product vitality index improved to 20% for 2026, up from less than 2% three years ago, reflecting successful portfolio rationalization and product innovation.

Financial highlights

• Q2 revenue: $447.4 million (+4% YoY); adjusted EBITDA: $102.8 million (-2% YoY); adjusted EPS: $0.43 (-7% YoY); adjusted net income: $23.1 million.

• Gross profit (excl. D&A): $243.8 million, up from $238.0 million YoY; adjusted EBITDA margin: 23.0%, down from 24.5%.

• Unlevered free cash flow: $44.8 million in Q2 (44% conversion); LTM unlevered free cash flow: $298 million, up 10% YoY.

• Net leverage ratio: 5.3x at Q2 end, down from 5.5x at Q4; total debt reduced by $106 million since December 2025.

• Net loss widened to $58.9 million, or $(1.13) per diluted share, due to higher restructuring and legal costs.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: revenue $1,790–$1,830 million, adjusted EBITDA $449–$464 million, adjusted EPS $1.90–$2.03, reflecting higher interest expense from refinancing.

• Q4 expected to be the strongest quarter, driven by seasonality, sporting events, and marketing investments.

• Anticipate $25–$30 million reduction in operating expenses in H2 versus H1, due to lower credit losses and front-loaded investments.

• Vitality Index (revenue from new products) tracking to 19–20% for 2026.

• Midterm net leverage target set at 3.5x, with year-end 2026 expected at 5.1–5.2x.