Great. Hi, everyone. Thanks for joining us this afternoon. I'm Greg Mendelson, Managing Director, Global Head of Fintech at JP Morgan. happy to here with me today, Bruce Lowthers, CEO of Paysafe. Bruce, thanks for joining us here today in Boston. Oh, thank you. It's great to be here with you. Thank you. Thank you. We've got, I think 35 or 40 minutes and a fair bit to talk about today, so, I'll jump right into it. Maybe Bruce, just for everyone's benefit, just curious if you rewind the clock, when you first heard about the opportunity at Paysafe, what was it that got you excited about this opportunity and really draw you to the company? Yeah. Again, just wanna thank you for inviting us here to participate in the conference. Yeah, when I go back, and, you know, first of all, a year has been a blink. It's really amazing how fast it's kind of gone by. When I think back to the opportunities, when I decided I was gonna depart FIS, I was very fortunate that I had a number of opportunities kind of present themselves. One of the things that was very enticing for me and why I probably came ultimately was I love the payment space. It was something that I've always enjoyed, but I really like the construct of kind of a two-sided ecosystem and having the ability to have both the consumer and the merchant side was really something that we really wanted to explore. When I was back at FIS, we had obviously had a two-sided ecosystem with the banks and the merchants, and we had started dabbling in the consumer side in our incubators. Here we had real assets that we could play with and really drive something that we weren't doing at Paysafe. We were still very siloed at the time. The opportunity to kind of bring those together and have them start feeding off each other and generating kind of a flywheel within our ecosystem was really a compelling thought. Really enjoyed that thesis. You know, a year in, I would say it's stronger than ever, and I really felt like I've made the right decision. That's great. now that you're a year in, Bruce, anything that's surprised you, having been there for that much time as you spend time with the customers, the team, and gotten deeper on the products? Yeah. You know, what I would say is I knew what I was stepping into as in where the company was. Obviously, we were, when I came in a year ago, we were really at a point of transition. I had good visibility. Certainly, had the opportunity to know a lot of the people that worked at the company and knew a lot of people involved with the company, and they were a client of mine as well before I came in. I would say not so much surprise, but, you know, if anything, I would say the surprise would be probably not what people would expect, but how well the board really functioned. I've, I've really enjoyed working with the board. I think the board is really thoughtful about what they're doing and, I think the board has been a tremendous asset to the company. That's great. You touched on the two-sided network, which is obviously a big differentiator for Paysafe within the payments market. How do you think about that business today in terms of having or the benefits of having both sides of that within the current ecosystem? Maybe just for folks that aren't as familiar with the wallet business, maybe just a little bit more color on what that is and why it's so differentiated in the market. Sure. Look, I think when we look at our business holistically, we really have two primary businesses that we get very excited about. One, the merchant acquiring business. We're the fourth largest non-bank acquirer in the U.S. We have a full stack that we can compete with, and really putting a lot of energy into our e-commerce business as well. On the wallet side, the second half of the business, this has been around for 20-plus years. It's been a business that has really been predominant in Europe and focused on a couple of industries, in particular, the social gaming area and the gambling area, online gambling area. It's a great business. It's been able to really take a stronghold in those two verticals in particular. As you've seen, when you look at all the different form factors that have emerged in the payment landscape, digital wallets have really become a prominent payment form factor. We sit with an asset that is tremendous of value. I think one of the things that we look at today is the digital wallet, not so much as Skrill and Neteller, but digital wallet as a platform. You really start thinking about what we're capable of doing with that platform and the revenue opportunities and expansion of that is significant for us. This is a, you know, a wallet that is very similar in construct to ones that you would use that probably are more popular here in the U.S., like Apple Pay or PayPal. Ours is predominantly in Europe. It's one of the largest wallets in Europe, as I said, focused on those verticals. As we think about the platform when we think about geographic expansion, we think about the opportunity to bring it to the States. We've started doing that in the gambling vertical. We had an announcement last year with Barstool Sports. Now as we announced at Investor Day, we're gonna take that platform and deliver at the end of the year a merchant wallet, which we're very excited about. One of the things that a lot of people don't know is with our Skrill product in Europe, we settle our merchants' activities into that Skrill wallet. That really was kind of the basis of, hey, we can do this with the couple hundred thousand merchants we have in the U.S. It allows us to create somewhat of a Cash App type of application for our merchant customers. It gives us great acceleration of the market into the U.S. with our wallet. Having small business owners use the wallet also allow them to push payments out to their employees, so for incidental management or a variety of other things. It gives us a great platform to build off and accelerate in the U.S. marketplace. Overall, we feel very strongly that the digital wallet is the platform is one that we can build off of. We see lots of use cases, both on a branded basis and an unbranded basis. That white label, we are seeing a lot of interest in that, and certainly, you know, I think that'll be something that'll drive and accelerate growth as we move into 2024 and 2025. That's great, Bruce. Do you see, other than maybe PayPal in the States, are there any other competitors you see on the wallet side of the business in North America? Oh, there's lots of competitors out there, right? I mean, it's the payment space as a whole is filled with competitors. Having competitors doesn't worry me. What we're focused on predominantly has been certain verticals and places where we think we have an advantage. Offering a wallet to our merchants is a great distinct value proposition that nobody else has, right? We have a reason to be there. We have a reason to expand. As you'll notice, we've started laying out the transactions per user in our wallet, the ARPU per user in our wallet. It gives us a great base to build into, that's a distinct advantage for us. I think when you look at the verticals that we're playing in and the other ideas that are coming to bear here as we move through the year, we play in really five verticals that are all large verticals that have strong growth opportunities in front of them, the gambling, online gambling, the social gaming, retail, hospitality, travel and leisure, and our digital assets. We like those verticals. We're gonna stay very focused within those verticals, and we see distinct wallet opportunities in each of those verticals. We don't have any intention of going to just a common app like Apple Pay or a utility type of wallet. We're really gonna try to drive experiences within those verticals and stay very focused to those verticals. We think that really will be a key to the growth as we move forward. That sounds good, Bruce. As it relates to those verticals, obviously they're high growth verticals and they're differentiated compared to many of the competitors or peers, how do you drive go-to-market and success within those verticals? Is the sales team going to market by vertical? How are you driving that expertise and domain knowledge that the team has built within those five or six verticals? Yeah, great question. I think for us, when we came in, a year ago, what we saw was the company was very siloed, so we had 5 or 6 different divisions. The sales organizations were split up by those 5 or 6 divisions. What we found out very quickly was, we have 800 customers that are kind of our large customer base, our enterprise customers, and there wasn't 1 person calling on them for all of the Paysafe product suite. They were calling on them for merchant acquiring, or they were calling on them for eCash, or they were calling on them for the wallet. Nobody was taking kind of a holistic viewpoint. One of the first things that we did, we said, "Okay, we gotta fix this. We've gotta get account coverage on these, so that we can really drive more products into this category. The other thing that we did is we started lining up around the verticals. What we have, you know, Zak Cutler was at Investor Day, so I'll use him as just a great illustration. Zak is an expert in the gaming vertical and so, and whether he was just selling merchant acquiring, didn't make any sense if he wasn't selling the wallet and eCash as well. Now what our team leads off with when they go into one of these accounts is the thought process and knowledge of that industry and coming in and saying, "We have an offering of a wallet, eCash, and merchant acquiring right out of the gate." That's fundamentally different for us as we've looked at it. We're having a lot of success with that early on. We've got kind of two quarters behind us now. We've seen significant improvement in 1, the number of deals closed, 2, the pipeline continues to build and accelerate. Rob Gatto and Zach and the teams are doing really well. We've also brought in Chris Petersen, who's taken on another vertical. We've got leaders in each of these verticals as we're continuing to build out strength in those verticals. We just find that having the domain expertise to be able to talk to people in their natural language about what's going on in their vertical and representing all of our products at one time instead of piecemeal, it really puts us in a distinct advantage when we're out selling. That's great. The cross-sell that you're talking about, Bruce, is that if we'd have put analogy of baseball game, what inning are we in terms of that cross-sell opportunity that you've just put in place over the last couple of quarters? Is it a substantial opportunity going ahead? Yeah, look, I don't want to be very clear, right? This is a turnaround, a transformation that we're executing on. I would say, it's early innings of what we're doing. What's great so far, just in these early innings, is we're seeing real proof points. We're seeing, you know, The story was pretty easy. We set out, the first three, six months of trying to understand what was going on, getting out, talking to a number of customers, getting out, talking to our employees, the former employees, really trying to develop a true understanding of what the challenges were in front of us. Then we laid out a plan. Look, the first year was about stabilizing the company. The second year was about returning to growth and getting growth in the company. Third year was about accelerating growth. All the same things that I've said at Investor Day and other earnings calls. We also said how we're gonna do it is focusing on the transformation of our sales organization. We took out a bunch of costs. We reinvested in the sales organization. While our sales team is getting larger and bringing in better talent, it hasn't cost us on our P&L. We've been able to self-fund that, if you will. And we're seeing real great results out of that. Then we've really focused on client experience. As you heard me mention at the Investor Day, we've gone from basically last in the J.D. Power report for merchant satisfaction to third, behind Bank of America and Square. According to J.D. Power, it's the fastest anyone's accelerated up that list. We're really focusing on experiences. I think the team has done a tremendous amount from user experience in both sides of the house, both on the wallet side and on the merchant side. Product innovation and driving products. This is something that, you know, takes a little time to get products going. As I said, we've got a couple announced already, the merchant wallet being one of the more prominent ones. We've got some in beta out in the market today that, you know, we're excited about and seeing positive returns. We were able to go recruit Nicole Carroll, who's got a great background through Visa and driving innovation at Visa, and more recently at Experian as Chief Product Officer of Data over there. Feel very good about our ability to attract talent and drive, you know, this transformation. It's probably a long-winded answer to it, but it's certainly early innings, but we're very excited about the opportunities that are sitting right in front of us. Good. That's great, Bruce. Thank you. If we take a step back and just think about your business from a broader perspective and what you're seeing across your business, across payments, across the geographies in which you're located. Investors spending a lot of time at this conference, I've noticed, focused on the macro environment, the impact to the consumer, the impact to the merchant. Just curious, what are you seeing right now across your business, both on the merchant acquiring the digital side or on the wallet side, and also across the different geographies? Are you still seeing a healthy consumer? Are you seeing any changes within the cohorts there? Yeah. It's funny, as we were talking a little bit earlier, we get this question a lot, and it's, you know, I think people are looking for this material drop-off from a macroeconomic perspective, as we reported, we're just not seeing it. We still see solid volumes here as we're halfway through the second quarter. We feel good about it, the volumes that we have. We're still seeing strength in the activities within the account, so feel very good about it. You know, I think as I joke, everybody's got their favorite economist. You know, and you see wide ranges of predictions of what's gonna happen. We've read a lot of those. We've participated in a lot of discussions with them. You know, based on what we can see is it, you know, we would agree here and that there's probably gonna be some mild recession that occurs. Probably not long in duration, but that still seems to be the path we're on. I like to make the point that we have a lot of our own destiny controlled by what we go do and execute. Yes, we can say that there might be a recession and. I don't think that's gonna impact us that much. It's really about us going out and executing. We have lots of opportunity to go execute that should offset that headwind. You know, we'll see how that plays out. I don't view on the short term that that'll be an issue for us. Keep in mind, I think if our CFO was here, Alex would be telling you that the gambling vertical is not sensitive to recession and pullback. When you look at our eCash business, our eCash business actually thrives in economic downturns. We feel like we're fairly balanced in that, you know, from a product standpoint. Great. I'd be remiss if I didn't ask an AI question, so I'll ask the AI question, Bruce. Just as folks think about AI, generative AI, how do we think about impact both on the payment sector in general and then on your business, and as we think about both opportunities and threats that it might present? Well, look, I, you know, everybody's talking about this. I, it's very interesting, and I had the opportunity to go to the Microsoft CEO conference just a couple weeks ago, and as you would imagine, it was a significant topic there. Look, my own personal view on AI is that it's gonna be something that will help revolutionize the payments industry. Everyone is gonna be driving it at to some level. We are as well, as which we talked about in the earnings call. It's not about necessarily the cost savings that you're driving, it's not necessarily about making the one particular function more efficient. It's really about accelerating how quickly you respond to things and how quickly you adapt to things and personalization of the experiences that you're looking to execute. For us, I think, you know, obviously having Nicole on board, with a lot of data background, it was not by, you know, haphazard occurrence. We believe that as you look at why digital wallets are so prominent today and why they're one of the fastest growing payment types today, it's because of the experiences that they provide. Anybody can go execute a transaction. It's about that holistic experience. When you look at AI, we think that's really gonna, excuse me, accelerate those experiences and create wonderful experiences for people. For us, we're pretty excited about it. We think there's certainly gonna be challenges with AI. There's a lot of challenges with AI, but, excuse me. I think when you think about the opportunities that we have to create better products, to create better experiences, we'll be able to navigate the challenges that AI present as well. Good. There's a number of areas, Bruce, that folks talk about now within fintech with some form of regularity, as it relates to trends or areas of focus, ranging from B2B software and payments to embedded payments, embedded finance, et cetera. We talked a lot about your wallets business, which is obviously a huge differentiator in the market and a business that's enviable amongst peers. Are there any other areas that you're focused on strategically right now that are either businesses you're upscaling or areas that you'd like to strategically focus on over the next couple of years? I would say, you know, for us, the. We have a lot of opportunity in front of us. You know, whether it's geographic opportunity, just bringing our products from predominantly Europe to the U.S., expansion into Latin America. I don't know that we need to expand outside of those three geographic, but we have lots of opportunity around those. I think when we think about what the wallet is doing, it's very early innings in the wallet, so I expect tremendous amount of functionality to be driven into the wallet. I think, as I said, bringing that together will, with the merchant acquiring in the e-commerce business, I think is really gonna transform payments, and we stand to be in a very good position to do that. I think when you look at kind of the technologies around, right. There's 1 billion new users on the Internet in the last 3 years. In the U.S., there's people who are grabbing their phones 352 times a day, just under three minutes. When we start looking at how do we get more of those looks, that creates lots of opportunities because we're there. We're there with the app. We're there, allows us to. We're very mobile first, so allows us to really be in a position to capture some of those 352 looks a day. You know, so without kind of going through what we think the product roadmap is, we're very bullish on the opportunities in front of us. We see a lot of opportunities to leverage the customer base we have. We have a tremendous customer base, the who's who in the particular verticals that we're in. We think we have great assets to deliver on kind of that experiential economy that's emerging, that has tremendous TAM, double-digit growth over the foreseeable future. We feel like we're in the right verticals, right product sets. There's gonna be a lot of things. As AI continues on, there are gonna be a lot of things that are iterating faster and faster. That's what's gonna really determine who's gonna be successful, is which companies can adapt quickly to the changing. It's not gonna be technology so much anymore. It's gonna be about adapting to the technology. Makes sense. We've seen a continuation, Bruce, in the consolidation within the payment sector and merchant acquiring sector in particular, Global Payments, Adyen a year ago, Nuvei, Paya earlier this year. As you think about those types of transactions and the competitors you have as the acquirers of those businesses, how do you think about those situations and those consolidation plays. Does the scale still count a lot in the sector? Is that a big driver? Do these consolidation plays help the acquirer get stronger, or do you also see some challenges that come through the cracks by virtue of the consolidation or the integrations that come out in the back end? No, it's a great question. I First, I would say, obviously, the M&A has been part of the payment space for as long as I can remember, so, and I'm pretty old, so it's been around for a long time. I don't think that's gonna go away. I mean, the deal flow that's out in the market today is, seems very strong. It seems like it's kind of had a resurgence in the last couple months. I don't expect that to go away. There is challenges with picking the right one, right? It really comes down to culture, making sure the cultures align. If the cultures are aligned, you can have a tremendous amount of success integrating those companies, and that's really where the value comes from. Being able to integrate those companies, being able to drive synergies both on the top line and on the bottom, are really critical. It's very, very important, as I've learned over my career, to make sure that you pick the right ones. There's all kinds of deals that can get done, and you know it better than anyone, but picking the right one is really critical for long-term success. I, you know, I think that there's gonna be a lot of activity here probably in the next 12 to 18 months in this space. Scale is still important, right? It's just driving margin expansion and, you know, I think that that'll probably always be something that's important. But for us, we're not trying to just get big. We're trying to become great in our verticals and create great experiences. That's what the focus is for us. We're gonna grow, as I said before, when we get to 2024, 2025, you know, we'll be a double-digit growing company, and it's about creating great experiences. That'll be the bedrock of what we build off of. Excellent. Bruce, what misconceptions do people have on Paysafe? If you were to try to sort of set the record straight in terms of things you think are just not fully understood about the business, what are the two or three things you'd highlight? Well, I'm not sure what people understand or don't understand. I think, you know, certainly, we can't fix the things that happened, you know, a couple years ago of how we came public and that those things are beyond our control. What we can control is laying out a course for how we're gonna get better every day, how we're gonna improve our experiences for our customers, focusing in on what products we can bring to market to help our customers. Those are the things that we can really focus in on. We have a great company that is loaded with talented people that are passionate and care. We have a management team that's invested, personally and spiritually in the company and want the company to do exceptionally well. We're out there fighting every day to try to get better. We're very excited about the opportunity we have, and believe that we can get this turned around and we, you know, we're now a couple quarters in to doing what we said we were gonna do. It's gonna take time. We'll continue to push on it's certainly not gonna be a lack of effort. Great. We've got five or six minutes left. Why don't we open it up for any questions from the audience? We'll start here in the room, and then we've got some questions, some folks that are dialed in remotely. Any questions from folks in the room here? Okay, I'll go to the questions we've gotten from the audience that's remote today, Bruce. First question is, how does Paysafe benefit financially from the Apple Wallet? How does Paysafe? Benefit financially from the Apple Wallet. How does Paysafe benefit from, financially from the Apple Wallet? The way we benefit from the Apple Wallet is if someone is using one of our cards in the wallet. It's just transactions, no different than any other card in Apple Wallet. Whether it's a Skrill card or a Paysafe card, we are simply just another card in the wallet just like every other bank card. Got it. I'm hopping around. Yeah. Random questions here, so bear with me. No problem. When will the Jacksonville office be fully open? The Jacksonville office is scheduled to be open August 1st, I believe. We just opened the London headquarters a couple weeks ago. It was great to see everybody back in the office. The office was lively and spirits are high and really excited about it. It's good to have both the headquarters in London back online and really looking forward to getting Jacksonville online. Centralizing in Jacksonville for the U.S. Great. As relates to the sales force, could you just talk about the size of the sales force today and how far you are down the path of potentially doubling the size of the sales force? Our sales force, we're very far along. There's probably only a handful of hires left throughout the back half of the year. Really made a lot of great strides with the sales force. All in, everybody related around sales is a little over 400 people in total. We feel like we're getting there. I think Rob and the team have made great progress with the organization. Brought in some excellent talent. Gave us a lot of strength in verticals that we needed to bolster. We'll kind of pause here and see how we settle in and see how that works. Very optimistic as I said, pipeline's up, cross-sell numbers are up, multi-product deals are up, substantially. I, as I mentioned to someone earlier, I don't like throwing out the percentages because percentages are massive because we're coming off of a small number. You know, it's really just about continuing to build and continue to drive. You know, the numbers are trending in the right direction and very excited about what they've been able to do. The only thing I would just say is, again, we've done this with the construct of taking cost out of other places, so there's no incremental cost that's dropping in for the sales organization. I just wanna clarify that. I do get that question every once in a while of, how much more cost is coming. We've taken cost out to pay for that shift. It's really a reallocation of asset, if you would. Got it. There's a lot of examples right now of companies in the market that are selling, divesting, spinning non-core assets. Is there anything within Paysafe that you deem to be non-core today? Anything that we think is non-core. Look, we're not a, this may sound strange, but we're not a huge company, right? It's only a billion and a half. The assets that we have are very germane to what we're doing. What I would say is, when you look at the assets, our eCash business has the ability to fuel our wallet, and so that's pretty cool. We have a feeder system there where there's interaction between the two. When you look at the wallet, the wallet has the ability to connect with our... Whoops. Connect with our merchants and really drive more consumers into the wallet, more merchants onto the wallet, expanding both merchant acceptance and usability of the wallet. When we think about the things that we have, they all kind of start feeding together. What I would say is, we just, as we came together as an organization, we never looked at it that way, but there clearly is a flywheel that is coming together, and we're very excited about the opportunity of how they all interact and the outcomes of that ecosystem. Great. I think we're just about out of time now. Thank you, everybody, for joining us today. Bruce and the Paysafe team, thank you, and good luck with the rest of the day. Thank you. Really appreciate it.