Payoneer (NASDAQ: PAYO) reported its second quarter of 2026 on 6 August 2026. We are writing about it today.
Every figure here was verified against the Form 8-K filed with the SEC under Items 2.02 and 9.01, accession number 0001104659-26-091646. The earnings release itself is attached there as Exhibit 99.1, and because the company cancelled its investor call, that release is all there is. Even so, errors, inaccuracies or omissions are possible, and the figures may change after publication. Spotted something that looks wrong? Write to me and I will correct it.
What the Company Does
Payoneer is a cross-border payments company. That sounds technical, so take an example: a graphic designer in Tel Aviv working for a client in Germany, or a small shop in China selling to American buyers through Amazon. Both sides want the money to move, and neither wants to open a bank account in every country where it has a counterparty.
Payoneer gives them one account that can receive money in one currency and pay it out in another. The company has Israeli roots and trades on Nasdaq under the ticker PAYO.
How does it make money? From two sources.
The first is a cut of the flow. All the money that moves through the platform is called volume, and this quarter it was $23.7 billion. Payoneer's slice of that flow is called the take rate, and it is measured in basis points. One basis point is one hundredth of a percent, so 100 basis points equal 1%.
The second is interest on customer money. When a customer holds a balance in a Payoneer account, that cash sits with Payoneer until it is withdrawn. As of 30 June 2026 that was $7.7 billion of customer funds, and Payoneer earns interest on it. This is income that depends on market interest rates rather than on how the business performs - and when rates fall, that income falls even if the business itself is growing.
Two more terms that will come back later. ARPU is average revenue per user. Adjusted EBITDA is a measure the company defines itself, not an accounting standard, and it takes profit and adds back items the company chooses to exclude.
The Quarter
| The quarter | A year ago | |
|---|---|---|
| GAAP revenue | $274.3 million | $260.6 million |
| Revenue excluding interest income | $222.2 million | $202.3 million |
| Interest income on customer balances | $52.1 million | $58.3 million |
| Total operating expenses | $257.3 million | $230.5 million |
| Operating income | $16.9 million | $30.1 million |
| Other financial expense, net | $10.6 million | $0.2 million |
| Income before income taxes | $6.3 million | $29.9 million |
| Income taxes | $8.7 million | $10.4 million |
| Net income (loss) | Loss of $2.4 million | Profit of $19.5 million |
| Earnings (loss) per share, basic and diluted | Loss of $0.01 | Profit of $0.05 |
| Adjusted EBITDA | $71.4 million | $66.4 million |
| Adjusted EBITDA excluding interest income | $19.3 million | $8.1 million |
| Volume | $23.7 billion | $20.7 billion |
| ARPU | $533 | $452 |
| Overall take rate | 116 basis points | 126 basis points |
| Transaction costs as a share of revenue | 13.7% | 15.6% |
Look at the first row against the second, because the first gap between what the company emphasised and what happened lives right there. GAAP revenue rose 5%. The subheadline of the release chose a different number: a 10% increase in revenue excluding interest income.
Both numbers are true. The difference between them is interest income, which fell 11% from $58.3 million to $52.1 million on lower rates, partially offset by 10% growth in customer funds. But 10% is a measure the company defines itself, and 5% is GAAP revenue. When you read an earnings headline, it is always worth checking which of those two lines is being shown.
The Angle: The Profit Was Not Erased at the Operating Line. It Was Erased Below It
This quarter ended with a net loss of $2.4 million against net income of $19.5 million a year ago. That is a swing from profit to loss, not a percentage decline - the company itself printed N/A in the year-over-year column of its table, because there is no percentage that can be computed here.
The story unfolds in three stages, and each one stands on its own.
Stage one: the operating business weakened. Operating income fell from $30.1 million to $16.9 million, a drop of roughly 44%, and it happened despite revenue growth. The reason is simple: operating expenses grew 12%, from $230.5 million to $257.3 million, while revenue grew 5%.
| Expense line | The quarter | A year ago | Change |
|---|---|---|---|
| Research and development | $47.0 million | $37.4 million | up roughly 26% |
| General and administrative | $48.4 million | $37.0 million | up roughly 31% |
| Sales and marketing | $61.8 million | $57.3 million | up roughly 8% |
| Depreciation and amortization | $21.2 million | $15.6 million | up roughly 36% |
| Transaction costs | $37.7 million | $40.6 million | down |
Much of the Nuvei transaction cost sits inside general and administrative, so part of that 31% jump is not a running expense. But R&D up 26% and D&A up 36% have nothing to do with the deal, and on their own they explain a meaningful share of the operating erosion.
Stage two: a financing line nobody explained. Other financial expense, net rose from $0.2 million to $10.6 million. That is a $10.4 million adverse swing, and it consumed most of pretax income. The release gives no breakdown at all of what caused it. It is the single largest line in the report with no explanation attached.
Stage three: the tax. After all of that, income before taxes was still positive, at $6.3 million. Then came a tax charge of $8.7 million - more than the entire pretax profit. An effective tax rate above 100% is the mechanical cause of the net loss. The release does not explain what drove the charge.
This is the most important point in the report: a reader who stops at the operating income line sees a profitable company. The loss is created entirely below that line.
The bridge from a net loss to adjusted EBITDA: nearly $74 million of add-backs
In the same quarter that net income turned negative, adjusted EBITDA rose 7% to $71.4 million. How do those two live together? Like this.
Start from a net loss of $2.4 million, and add back $21.2 million of depreciation and amortization, $8.7 million of taxes, $10.6 million of other financial expense, $19.5 million of stock-based compensation, $13.5 million of expenses attributed to the transaction and $0.3 million of restructuring charges.
The add-backs total nearly $74 million. There is no trick here - every item is disclosed in the release, and this is the conventional way the measure is built. But two things are worth remembering.
One: the $13.5 million of deal expenses is cash that left the company this quarter, including $10.8 million to bankers, lawyers, consultants and regulatory work. A year ago that line was only $0.7 million. The 7% growth in adjusted EBITDA depends on a real, immediate cost not being counted.
Two: stock-based compensation of $19.5 million is the largest add-back after depreciation, and the company itself concedes in the release that it is a significant recurring expense.
Underneath the Volume: The Impressive Growth Sits on the Small Base
Volume rose 15%, from $20.7 billion to $23.7 billion. That is a good number. But breaking it apart tells a different story.
| Volume bucket | The quarter | Year-over-year |
|---|---|---|
| Total | $23.7 billion | up 15% |
| SMBs that sell on marketplaces | $12.4 billion | up only 2% |
| Enterprise payouts | $6.6 billion | up 22% |
| B2B | $4.3 billion | up 48% |
| Checkout | $332 million | up 52% |
An important note on this table: the release does not publish the dollar comparison base for these buckets, only the percentage changes. So I am showing the percentages exactly as the company gave them, without deriving a prior-year figure from them.
And now the substance. The bucket that grew 48% is $4.3 billion out of $23.7 billion. The bucket that grew 52% is $332 million - less than 2% of volume. And the largest bucket, more than half of all volume, grew 2%.
Weighted for size, Payoneer's core franchise looks closer to flat than to growing. High percentage growth on a small base is a good thing, but it does not move the overall picture until the base itself gets bigger.
The same shape repeats in SMB customer revenue, which was $201 million, up 10%: marketplaces $119 million up 2%, B2B SMBs $69 million up 18%, and Checkout $13 million up 51%.
And there is one number that ties it all together: the take rate fell from 126 to 116 basis points. In plain terms, revenue grew 5% while volume grew 15%. More money is going through the pipe, and less of it stays with the company for every dollar that moves. Among SMB customers the decline was milder, from 120 to 118 basis points.
What did improve: transaction costs fell to 13.7% of revenue from 15.6% a year ago, an improvement of 190 basis points, and in absolute terms from $40.6 million to $37.7 million. And ARPU rose 18%, to $533 from $452, and 22% excluding interest income - which the company calls the eighth consecutive quarter of growth above 20% on that basis.
The Geographic Split
| Region | The quarter | A year ago |
|---|---|---|
| Greater China | $93.2 million | $85.9 million |
| EMEA | $68.3 million | $67.4 million |
| Asia-Pacific | $60.8 million | $53.8 million |
| North America | $26.2 million | $24.7 million |
| Latin America | $25.8 million | $28.9 million |
Greater China is the largest region, about a third of total revenue, and it includes mainland China, Hong Kong, Macao and Taiwan. Asia-Pacific was the fastest growing of the regions disclosed. Within North America, the United States alone was $25.3 million against $23.5 million.
And two less comfortable points: Latin America shrank, from $28.9 million to $25.8 million, and it is the only region that declined. And EMEA was essentially flat, $68.3 million against $67.4 million. The regional detail is less healthy than the consolidated growth rate implies.
What Management Said
There was no investor call. The company said it is suspending earnings calls in light of the pending transaction, so every quote here comes from the earnings release itself.
"Payoneer's Q2 results reflect the strength of our business and execution of our team: double-digit revenue growth excluding interest, continued ARPU expansion"
John Caplan, Chief Executive Officer of Payoneer
"In June, we announced an agreement to be acquired by Nuvei. The transaction validates the strength of the business our team has built"
John Caplan, Chief Executive Officer of Payoneer
"We've built highly differentiated assets over decades, including specialized infrastructure for cross border commerce, network effects that strengthen as we scale"
John Caplan, Chief Executive Officer of Payoneer
Buybacks at $4.91, a deal at $7.40
In the second quarter Payoneer repurchased $16 million of its own stock at a weighted average price of $4.91 per share. The price agreed with Nuvei is $7.40 per share in cash. Repurchases were suspended during the quarter in connection with the transaction, and will not resume while it is pending.
The weighted average basic share count fell from 368.8 million to 337.5 million, down roughly 8.5%, on those buybacks.
And one technical point worth understanding: the diluted share count fell from 380.6 million to 337.5 million, down roughly 11%. But comparing the diluted number across years is not a like-for-like comparison. This quarter diluted equals basic only because in a loss period potential shares are antidilutive and are therefore left out of the calculation. That is an accounting rule, not a real reduction in dilution.
The Outlook
There is no outlook. That is the news.
The release states that in light of the potential take-private transaction with Nuvei, Payoneer is suspending its quarterly earnings calls as well as its practice of providing financial guidance - and in doing so is withdrawing its financial outlook for the year ending 31 December 2026, along with its medium and long-term targets. No forward-looking figure of any kind was given.
The company will continue to publish quarterly earnings releases and file reports with the SEC until the transaction closes.
And this is exactly the place to point out what that decision costs. This quarter contains two large items the release does not explain: the tax charge that exceeded pretax income, and a $10.4 million swing in other financial expense. With no investor call, there is no analyst to ask about either. The reduction in disclosure is not theoretical here - it touches the two numbers that determined the bottom line.
The transaction details as they appear in the release: an acquisition at $7.40 per share in cash, at a total equity value of approximately $2.75 billion. The acquirer is Neon Maple Parent Inc. of Canada, and the merger sub is Panda Acquisition Sub Inc. The deal is expected to close in mid-2027. Early termination of the waiting period under the US antitrust statute known as HSR was granted on 28 July 2026, and a preliminary proxy statement on Schedule 14A was filed on 31 July 2026.
A small note I saw in the release itself: the body says the acquisition was announced on 15 June 2026, while the forward-looking statements section refers to an Agreement and Plan of Merger dated as of 12 June 2026. The signing date and the announcement date appear to differ, and the release does not reconcile them.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
The first thing I mark in this report is exactly where the profit was erased. Not only in operations, though there was damage there too. Pretax income was still positive, at $6.3 million. Then came $8.7 million of tax. An effective rate above 100% is not something you see every day, and the release does not explain it in a single word. A reader who stops at the operating line simply will not see it.
The second thing that holds my attention is one $10.6 million line with no detail. Other financial expense, net rose from $0.2 million a year ago. A $10.4 million adverse swing consumed most of pretax income, and nobody wrote down what it was. With no investor call, nobody will ask either.
And what bothers me more than the bottom line is the mix. Volume of $23.7 billion growing 15% sounds excellent, until you see that more than half of it, $12.4 billion, grew 2%. The 48% and 52% growth sits on $4.3 billion and on $332 million. And the take rate fell from 126 to 116 basis points - meaning volume is not converting into revenue at the same ratio.
And the fair point I hold for the other side: revenue excluding interest grew 10%, ARPU rose 18%, transaction costs fell to 13.7% of revenue from 15.6%, and customer funds grew 10%. The underlying business has not stopped. And a large part of this quarter's damage is $13.5 million of one-time deal expenses that will not repeat every year.
And what I will be looking for next time, because there will not be much else to look for: whether other financial expense returns to something like $0.2 million or stays around $10 million, and whether marketplace volume breaks out of 2%. An expected close in mid-2027 means a long stretch of reports with no guidance, no targets and no investor call - a situation in which those two numbers are close to all that is left to read.
