I'm Matthew Inglis. I'm on the FinTech Equity Research team here at RBC, and I'm happy to have with us, or with me, John Crawford, CFO of Paysafe. John, thanks for being here today. Really appreciate it. Thanks for having me. For those in the room maybe not so familiar with Paysafe, can you provide an overview of the company and maybe what end markets you serve between the digital wallet and merchant acquiring businesses? Sure. We're about $1.7 billion of revenue, which is a little not quite 50/50 between the digital wallet piece, a little more 55/45-ish, more heavily weighted toward the merchant solution segment relative to digital wallet. On the wallet side of the business, that is mostly, vast majority today, a consumer business. Consumers will download the wallet and use it to conduct the transactions they're transacting. The merchant side of the business is much more of a traditional merchant acquiring, selling card acceptance to merchants and a U.S., North America business. A little more specificity around the two quickly. On the wallet side of the business, some of these solutions go back decades. If you're in Europe and a sports bettor, for example, you may be very familiar with a product we own called Skrill, which is a digital wallet used by consumers to pay into gambling, pay in and pay out of gambling sites or video gaming sites, that sort of thing. We also have a solution in the wallet business called eCash, which is essentially what it sounds like, which is getting people's cash into the digital economy. We can talk about that a little more, but we've evolved that solution as well as of last year into a solution that can be funded by bank accounts as well. We are now the largest distributor ourselves versus our endpoint distributors that we've used historically to bring in cash. Our Latin America business rolls into the wallet business as well, where we have a solution called PagoEfectivo, which is also very much like an eCash product, cash coming into the digital economy ecosystem, and then more of a network solution branded as SafetyPay. All of those solutions were acquired over the years and have come together into what is today our wallet segment. Likewise, our merchant solutions business was built through a series of acquisitions. Some names you may know if you followed payments for a long time. iPayment was one that was public off and on in the U.S. for a little while. That is now part of our merchant solutions business. Largely more of a distributor of third-party solutions where we have a direct sales force. We also have independent sales organizations that we use to get to that market who are not on our payroll. Folks who are familiar, we use the term ISOs, and we use both direct and indirect distribution in that space. That is also where our e-commerce acquiring business sits, which is probably half gaming today, iGaming today, and the other half more traditional e-com verticals. That is a direct distribution model, our own sales force. Awesome. Thank you so much. Got to ask, what are maybe some current trends you're seeing as far as consumer spending across your verticals? Then on the merchant side, how would you maybe describe the demand environment? Sure. On the consumer spend, I wouldn't say we've seen much different than probably what you're hearing from others. In fact, when I heard on some of the calls around Q1, some folks talk about January, February softness and March better and April feeling better, that sort of thing. We saw largely the same kinds of trends in our business. On the consumer side, not seeing really a lot of change between expenditures or really differentials in transaction size or any of the other kinds of things. We kind of look at those periodically to see if you're seeing changes in the macro environment, people making more frequent smaller purchases, that sort of thing. If you've been around payments for a while, you may look at those as ways to try to get a lens on the economy. Likewise, on the business side, not really much different in terms of buying behavior. For us, we're still so small in the markets that we serve. We don't feel like we're sort of big enough to run into real trend. Other than a big macro trend, we're still a small fry in every vertical where we play. Got it. On the merchant side, are you at all seeing any changes in the sales cycles, anything like that, just given the uncertainty going on? No. In fact, if anything, we're trying to do things on our side to try and reduce cycles because sometimes cycle time, more often cycle time is driven by on the larger end. Think e-commerce or larger merchants is driven by the need to do integrations where you probably need some reliance on the customer's IT organization to get up and live, not just our own. Everything we can do to make ourselves simpler to work with can speed those cycles. Likewise, on the small merchant side, we've already improved it dramatically from the standpoint of approval to onboarding and shipment of hardware and go live, but there's still room to improve there too. The actual move through a pipeline and discussions has trended relatively flat with where it's been. Larger deals, enterprise deals, e-com deals tend to take longer. They're bigger, more sophisticated customers. By definition, it's going to involve a full discussion and a decision-making team. Small businesses, often it's an individual owner operator of a business. They typically are moving faster. They've already made a decision of some sort that they're going to change providers or pick a provider. No real change on the, as I said, on the consumer side either there. Got it. So you guys recently announced a pretty interesting partnership with Fiserv, specifically Clover. Can you walk us through the partnership and maybe what opportunities that opens up for the business? Sure. A little background first. Fiserv has been a partner for many years. As I mentioned, some of the businesses that were acquired on the merchant solution side built their businesses with Fiserv as a primary partner when they were founded, like an iPayment. As Bruce has been trying to flatten the organization and remove some of the silos, one of the things that stood out was we were not working with Fiserv as a corporate level or enterprise level partner. They are now a very good partner. I think we are a good partner too. We just distribute a lot of Fiserv and Clover. As part of this new series of new deals that we've announced, we're now offering more of the attachment solutions, which you've heard them talk about a lot is important in terms of driving both longer-term merchant viability as well as stickiness as a customer, which is great. Importantly, I think maybe something that people haven't focused on as much is there was a mention in the May press release about the Business Wallet solution and the ability to start having access to Fiserv's Clover customer base with that. We've been talking about the Business Wallet in the U.S. for a long time. We're pretty excited now to have a very large partner now to help us start driving that. Super early days, to be clear. Yeah. No, absolutely. I mean, do you think that this partnership, though, is more like stickiness with just kind of a more holistic product you can come to market with, or does it also drive sort of incremental value-added services that you can attach and get better economics on each deal? Both. Both. The most important thing, though, to be clear, is it's a great product suite. We offer multiple product suites with partners. The Clover suite is very competitive, and we're glad to be a partner. Great. One of the big themes coming out of your last quarter was sort of this ramp in organic growth to the 8%, 10% in the second half, 2025. What gives you confidence in your ability to achieve that targeted growth? I got to peel back how we go to market a little bit to get there because I feel like on the merchant side, our enterprise sales effort that has been building for a couple of years now is very effective. We were talking a lot in 2024, even before my time, about the investments being made in that sales force and in the product organization. Those are both now firing, which is great. The investment on the SMB side has been a little more mixed, where we talked in Q1 about the telesales group, which is very effective. It was a little less effective at the end of last year and into the very beginning of this year, not because they became less effective, but because we were trying some new things from a lead gen and marketing standpoint. We stopped trying those things and are now back to a much more formulaic business. That is a business where you can pretty clearly determine how many seats you want to add to a pod, how many leads you need to feed them, what kinds of verticals they can be most effective in, and that sort of thing. It is working very, very well. On the in-market piece in SMB, we found certain groups and certain GOs were very effective and certain were not. That is an area where we have been revisiting the approach and deciding where to deploy capital and/or redeploy capital. I'll give you a minute. On the partner side, I think everything is largely status quo. We've put a few folks in that group to drive more and more out of our existing partners. In general, I think, as you've seen, that's also something we talk about on a gross profit side, causing some mixed issues for us, is that the ISO channel has been very, very effective through all of this, but that drives a lower gross profit point. Gotcha. I'll give you a sec. In order to actually hit that organic growth, this is purely just sales ramping? It is. I apologize. I should have apologized. Thank you for tracking me back. The other piece that we talk about is our new product introductions and new partnerships. I'll talk about them together. Part of the reason why it's back and loaded is we've got some things that are just launching, about to launch, that sort of thing. PagoEfectivo Wallet is one example. It's 30 days in market. It's difficult to drive a lot of revenue in Q2 with that. We've got similar solutions both on the merchant side and on the wallet side. There were a series of things that we talked about on the last quarter, whether it's the PayFac partnership, the self-checkout partnership, those kinds of things. They're super exciting when they get launched, but they take a little while to get to run rate. As you might imagine, those things also have a disproportionate impact on margin, which is also part of the double story of not just the higher growth rate in the back half, but actually dropping more EBITDA margin as well. Yeah. So why don't we dive into that a little bit? Can you maybe walk us through specifically how this favorable segment mix and channel mix is actually going to drive that sequential increase in gross margin you've talked about? I think you're saying more so in the third into the fourth quarter. Can you walk us through that? Sure. The big picture starting point is relative mix between wallet and merchant because the gross profit profile of the wallet business is substantially higher than the merchant solution segment. Every incremental half a point point that we can drive on the wallet side of the business has a disproportionate impact on flow through down the P&L. Within merchant, as I mentioned earlier, we've had the ISO channel on a relative basis outperforming early in the year. As we get the direct channel specifically, as I mentioned earlier, the in-house direct piece right-sized and moving in the right direction, the gross profit profile of that piece of the merchant business is substantially more attractive than the ISO piece as well. There were a bunch of noisy things. We were delighted to divest the direct marketing business at the beginning of the year, but that's created noise, created noise in the first quarter. Some of that goes away in the second quarter, but we got to work through it. Got it. So all that kind of mixed together, you're still thinking 30ish% EBITDA margin exiting the year? For the quarter. For the quarter. Yeah. Right. Because I just want to be clear, we're still thinking margin range for the year in line with what we've been talking about. Right. Fourth quarter. Correct. Yep. Yep. Yep. Because it's so topical as far as the actual ramp, can you talk about the actual optimizations you made within that enterprise sales team and what's really driving that 20% increase in ACV per rep? I'd like to take credit for something we've done really smart. I think some of it is we are better at the recruiting and the ramping and the vertical specialization and that sort of thing. I think the leadership of that group is fantastic. Also, to be clear, we started that piece sooner than the SMB direct build. They have had more time to get it right. At this point, they've gotten it right. The ACV up 20% is a great metric. If you look at the ACV that the company was talking about a couple of years ago, it's multiples of what we were then. That group's performing very well. That piece of it really is just executing on the pipeline that they have, getting the deals that have been signed but not deployed yet, all those sorts of things to execute there. Yeah. So then on the SMB side, that's kind of been a focal point. You guys have talked about in the past, like unlocking new states. Can you maybe talk about how that's progressing and maybe how you think about the cadence and impact to fiscal 2025, if not 2025 into 2026? Yeah. I expect that's going to be more of a 2026 and beyond story because I'd say the track record there right now is mixed. We are much more focused on optimizing there and making sure that we have a repeatable, executable plan on that side of the business versus dramatically diversifying what we're doing. I think we realized with the lead gen and marketing experiments that we had late last year that we don't want to do anything to rock that boat until we've proven it to ourselves and to investors. All right. What about the progression in new verticals? New verticals actually is going reasonably well. That's something we're driving through both the organization of the sales force and salespeople also to how we're driving leads and lead generation into that group. We're definitely seeing positive results from that. Yeah. Can you give us a sense for which verticals are maybe performing best as you progress into them? I'd rather not. Okay. No worries. worries. Yeah. Totally fine. So we've talked about. It's a very competitive space. Yeah. No, I hear you. You talked about these product initiatives. Can you maybe just expand on that a little bit? What are the key product initiatives that maybe you're most excited about to drive improved RPU? What's maybe the trajectory and main drivers for RPU acceleration as in Q1 it was down quarter over quarter? I would start with I do not necessarily think about driving RPU per se other than just having RPU be one of the metrics that we are looking at for the health of that business. We think about driving users, driving that user engagement, which you can see through transaction activity. Are they transacting two times instead of one, seven times instead of four, that sort of thing? Driving engagement with the solution and then driving more endpoints or merchants for them to use the solution. All of those things combined give you sort of network-like opportunities to grow the business where even if RPU is declining, if you are bringing in lots of new consumers and they have tons of new places to transact and they are transacting multiple times, you can really grow the business. We are very focused when we talk about the de-risking of our business and divesting certain pieces and that sort of thing with direct marketing, it's really all focused on trying to get to something that is a more stable, sustainable, predictable growth profile. On the wallet side of the business, that's true as well. That means not being fixated on RPU per se, but really thinking about getting out of our niche lanes and providing broader value to a broader consumer set. For example, the PagoEfectivo Wallet announcement, we purposely used two slides to talk about it. Even though it's very early, I want to hit that, which is the first slide was our kind of core customer today. 60% of our customers there are relatively young gamblers. The second slide is meant to represent more of the mainstream consumer base in Peru. Admittedly, Peru isn't a giant market, but it's a market where we have great brand awareness. We have merchants and customers who really like us. It is a great place to try a new launch. This company hasn't launched products in a really long time. We are really thinking about driving a business that hopefully actually has a little less RPU and a lot more users and transactions per user and merchant endpoints and, and, and. Gotcha. Yeah. I want to come back to the PagoEfectivo Wallet, but just really quick. One thing that you guys have talked about at length is sort of this unified platform for the digital wallet. Can you just walk us through what exactly that means and how that maybe allows for greater product attachment, that kind of thing? I think it touches on what you were just speaking on, but. It does. The easiest part to think about is we were a company that actually had several siloed products historically, and they did not work together, and they did not sell together, and those teams did not talk, and that sort of thing. What we realized was we really want to be able to have a wallet solution that also has our prepaid card solution. I use that term a little loosely because we literally have one, but it is also how I think about our eCash product. You get cash into an ecosystem, it then is on a prepaid type solution. Those things needed to evolve toward one solution so that you can provide something more useful and longer-term useful to the consumer versus being a one transaction. I make my bet, I get paid out, I'm done, or I load my PagoEfectivo, I buy my service, or I make my bet, I'm done to get to something that the consumer uses over and over again. An ecosystem. Yeah. Yes. Yeah. That was partly technical, but it was also partly mindset of getting those teams to get together, work together. Again, why Peru makes sense because it is a relatively small market. The team down there works really well together already. Being able to show success in a market where we have a right to win was a great place to start that process. Yeah, absolutely. You touched on maybe why you started with Peru, but what's the potential timeline for meaningful contribution to revenue from that specific product? What does the margin profile look like as you think about it now? From a gross profit standpoint, it should look largely like our core wallet business. This isn't a business like where on the eCash side, we're having to share economics with our distribution partners. That's not the way this solution works. I'll also say we're 40 days in. It's a little early to talk about meaningful impact. I would expect it to be something that has a more meaningful impact in 2026. Although I'll say it's really exciting to be at a company that's got some products that are 20 years or 25 years old to be on calls with teams that are looking at weekly data and seeing users coming to the website, downloading the app, activating the app, that sort of thing at growth numbers that are really exciting. Yeah. I assume we won't get too much out of you on this one, but how should we think about the broader opportunity for this wallet across LatAm as you look to expand the product across the region? I think we are very excited about it. This is beachhead number one, and we expect to be proof point number one, but then we also expect it to be a playbook that we can roll out on a repetitive basis. I'd rather not talk about specific markets that we're targeting next because we have certain aspects of our solution. Having pay-in and pay-out in one solution is right now a unique proposition. That's not a proposition that can't be replicated, but we'd like to move while we have some competitive advantages. Gotcha. And just LatAm more broadly, not necessarily just this wallet component, but how much of that is part of this 10% expected growth from your new customers and products for full year 2025? It's probably 10% of that, roughly. The way to think about it, I'm sorry, I don't mean to be pejorative, Matthew. LatAm is about 7% of our revenue. To be 10% of that growth means it is going to be punching above its weight or growing more than the other pieces. Got it. What's sort of driving that acceleration there in LatAm? The market's growing really well is the starting point. The move there, whatever report you look at, the move to electronic payments and e-com in Latin America and in Peru specifically is high as in the teens. It is a very attractive market. It is a very attractive continent with opportunities throughout. We have customers and banking partners who are looking for us to continue to roll out into further GOs. Got it. Should we think about there being any sort of large investment cycle related to this LatAm growth over the next few years? No. But I'd also say as we prove out the model and we're able to show really clear metrics, starting with ourselves for that matter, we'll be revisiting that as we go forward. This year, I think as we said at the beginning of the year, it was all about showing up the operating leverage in our business because last year was such a big investment year. The last thing we want to do is just pile on investments again. What we're trying to show everybody is we can grow through the P&L and show double-digit EBITDA growth. We may decide in future years, the playbook is now complete and very clear, then we would make it clear to everyone why we're starting a new big investment cycle. Gotcha. I want to bring it back to North America. Can you maybe talk, give us maybe a sense for how that market's been developing? It's growing very fast for you. It's a big contributor. Can you talk about maybe what you're seeing in the North American, iGaming market? It also comes with a lower take rate for you guys. Talk about maybe the puts and takes there and maybe how Paysafe offsets that with maybe incremental value-added services. Sure. The best thing about it on the iGaming side is it is such a fast-moving current on its own. It's great to just be a raft in that river and flowing at that speed. To the extent that we can win disproportionate deals and win the best deals, we can outgrow it, which we've been doing. I think the other key is going to be to start wrapping other services around that really good core installed base. With respect to take rates, I don't think we're looking to do anything specific there. I would just say the take rates are lower than our SMB take rates, but they are still very attractive relative to typical e-com take rates. Given the fact that we're directing that business and driving a lot of gross profit out of that, take rate is not really a strategy. Gotcha. Can you maybe expand a little bit on the value-added services component of that? It does not even have to be value-added services. It can just be expanding from our core gateway position in some of these markets to offering broader processing and acquiring services. Some of that is getting all of our platforms as we work through our merchant platform consolidation, getting all of our platforms really up to a much higher competitive standard for that. Gotcha. So we're fortunate enough to have the CFO here. What are your key investment priorities for this year and beyond, Franklin? Sure. We are going to continue to build our product capability. So organically, I feel like the sales force is there. We're continuing to invest in product to get that further along. I think we mentioned on the last call, we want to be driving double-digit revenue from product launched in the last three years. That is a big strategic focus for the whole company. We want to continue to show operating leverage primarily through control of our operating expenses and driving growth in our highest gross profit margin product lines. We want to delever. We're very focused on getting our debt targets down to 3.5% exiting 2026. And that's about it. Got it. So just going back, actually, so I think in the past you called out maybe $8-$10 million or so in OpEx, in operating leverage. Can you talk about the key levers there to drive that? 8-10? Correct me if I'm wrong. From Q1? Yeah. We'll move it for full year 2025. Yeah. I think most of that was noise in Q1 related to the divestiture and some stranded costs as well as some growover of prior year investment in the sales force. The sales force build that was talked about a lot in 2024 was primarily a first six to nine-month investment. I think everybody probably remembers, but in Q3, the call said we've hit our number, 170 new salespeople. That expense is disproportionately in the first half of the year. That also enables an easier growover as you get to the back half, as well as some of the non-recurring costs from 2024 that do not appear in 2025. Got it. We are coming up on time here. Are there any closing thoughts you would like to leave investors with as we wrap the conversation? We're excited to be pursuing our third straight year of good organic growth. We feel like the sales force, while we're continuing to optimize in certain areas, is built and ready to roll. The product area is an area we're very excited about, as I mentioned on my strategic priorities. I'd say the one piece that we're not seeing right now because of the divestiture of direct marketing is delevering. That is the other thing we want to be really focused on right now that we're not seeing yet. Got it. It is really exciting stuff. You guys have done a great job executing on all these priorities, and we are really excited to see where this goes. Thanks so much for being here, John. Thanks, Matthew. Thanks.