Paysafe (PSFE) Q3 2026 Earnings Call Transcript

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DATE

Thursday, Nov. 12, 2026

CALL PARTICIPANTS

• Chief Executive Officer - Bruce Lowthers
• Chief Financial Officer - John Crawford
• Head of Investor Relations - Kirsten Nielsen

TAKEAWAYS

• Revenue -- $439.6 million, representing 1% growth driven by volume expansion in Latin America and digital wallet momentum in Europe.
• Adjusted EBITDA -- $105.7 million, a 17% decrease reflecting shifts in business mix and increased marketing investment.
• Adjusted EBITDA Margin -- 24.0%, down from 29.2% last year due to 190 basis points of lower gross margin from client mix and higher SG&A costs.
• GAAP Net Loss -- $247.5 million, primarily resulting from a $203.3 million non-cash goodwill impairment charge triggered by market value declines.
• Adjusted EPS -- $0.44, down from $0.70 last year due to lower adjusted EBITDA and a $7.5 million increase in interest expense.
• Three-Month Active Users -- 8.1 million, a 14% increase following successful marketing and consumer acquisition initiatives.
• Digital Wallets Revenue -- $208.1 million, up 2% on a constant currency basis as core market growth offset regulatory headwinds in the crypto sub-vertical.
• Merchant Solutions Revenue -- $236.7 million, up 2% driven by double-digit growth in North American iGaming.
• Merchant Solutions Volume -- $36 billion, a 3% increase supported by expansion in direct and agent sales channels.
• Unlevered Free Cash Flow -- $50.2 million, representing a 48% conversion of adjusted EBITDA influenced by the timing of receivables and higher taxes.
• LTM Unlevered Free Cash Flow -- $265 million, reflecting a 65% conversion rate which remains within the company target range.
• Net Leverage Ratio -- 5.5x at quarter end, following a debt refinancing that extended maturities and upsized the revolving credit facility.
• Full-Year Revenue Guidance -- $1.761 billion to $1.771 billion, updated to reflect softer volume trends and regulatory impacts in the second half.
• Full-Year Adjusted EBITDA Guidance -- $415 million to $422 million, incorporating $5 million in unplanned severance expenses and higher-margin revenue pressure.
• Full-Year Adjusted EPS Guidance -- $1.45 to $1.54, impacted by higher effective interest rates following the August refinancing transaction.
• Vitality Index -- 20%, representing the portion of revenue derived from products launched within the last three years.
• Paysafe Wallet Growth -- Over 30% for the quarter, reflecting continued expansion into additional European markets.
• PagoEfectivo Wallet Growth -- Over 40% in Latin America, driven by strong consumer reception to digital wallet alternatives in the region.
• Active Agents Growth -- 17% year to date, contributing to an 8% combined revenue increase across direct and agent SMB channels.
• Net Debt Reduction -- Nearly $100 million year to date, despite $77 million in cash fees and costs related to debt restructuring.

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RISKS

• Lowthers stated, "The second half has been more challenging than we expected," citing regulatory, banking, and market headwinds affecting activity across digital wallets and e-commerce.
• Crawford noted that "verticals such as crypto and financial trading saw both market softness and regulatory impacts," contributing to slower growth in the latter part of the year.
• Management warned that the drop in the EUR/USD exchange rate has shifted from a tailwind to a headwind for second-half financial performance.

SUMMARY

Paysafe Limited (NYSE:PSFE) reported third-quarter results characterized by modest top-line growth as expansion in digital wallets and North American iGaming was tempered by regulatory and macroeconomic pressures. Management confirmed the completion of a major debt refinancing in August that extended maturities, though the transaction contributed to higher interest expenses and cash fees. The company adjusted its full-year 2026 outlook downward to account for slowing activity in the cryptocurrency and financial trading sectors during the latter half of the year. The company stated its primary focus remains on reducing net leverage through disciplined capital management and driving higher engagement from its growing active user base.

• The company appointed Rob Schonfeld as Chief Revenue Officer; Lowthers stated he "will be focused on sharpening our commercial strategy, deepening customer relationships, and helping us capture more of the growth opportunities across our core markets."
• Management launched Paysafe Arena in August; Lowthers noted, "Paysafe Arena connects gamers with publishers through discovery, rewards, content, and commerce," and has recorded over 1 million sessions since launch.
• On the call, Crawford indicated a target of reducing net leverage by approximately half a turn per year through voluntary debt repayments and banking network optimization.
• The company remains on track for a $25 million reduction in operating expenses during the second half of the year compared to the first half.
• Lowthers noted that consumer acquisitions in target markets rose 8% year to date, with management now focusing on expanding average revenue per user through new feature adoption.
• Management reported that data licensing deals did not materialize in the second half to the extent required to offset volume pressure in other business segments.

INDUSTRY GLOSSARY

• Vitality Index: A metric measuring the percentage of revenue generated from products launched within the previous three years.
• iGaming: Online betting and gambling activities, including sports betting and digital casino games.
• Average Revenue Per User (ARPU): A measure of the revenue generated per active consumer over a specific time period.
• Merchant Acquiring: The process by which a financial institution processes credit or debit card payments on behalf of a merchant.
• eCash: Digital payment solutions that allow consumers to pay for online purchases using cash at authorized retail locations.

Full Conference Call Transcript

Operator: Greetings. Welcome to the Paysafe Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this conference call is being recorded. I will now turn the conference over to Kirsten Nielsen, Head of Investor Relations. Thank you, Kirsten. You may begin.

Kirsten Nielsen: Thank you, and welcome to Paysafe's Earnings Conference Call for the Third Quarter of 2026. 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 and the company's most recent SEC reports. These statements reflect management's current assumptions and expectations 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 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 our website. With that, I'll turn the call over to Bruce.

Bruce Lowthers: Good morning, everyone. If you're following along with the webcast, let's start on slide 3. Through the first nine months of the year, we've made good progress across several important areas of the business. Revenue has grown 5%. We've continued to expand our consumer base, and we're seeing strong growth across Latin America, North America iGaming, and Paysafe Wallet in Europe. Three-month active users reached 8.1 million in the third quarter, up 14% year-over-year. We've also strengthened our financial foundation by completing our refinancing and resolving the legacy legal matter in the third quarter. With those milestones behind us, we can sharpen our focus on growing the business and using our cash flow to reduce net leverage.

And we believe this will be a key driver of value over the next 24 months. The second half has been more challenging than we expected. We started the third quarter with good momentum, with volume growth of upper single digits in July, but activity slowed in August and September, and that continued into October. That reflected a combination of greater regulatory, banking, and market headwinds affecting activity across digital wallets and e-commerce. Foreign exchange also shifted from a tailwind to a headwind. As a result, we're updating our full-year outlook. We also saw opportunities to offset some of these headwinds in the second half, including continued strength in Latin America and potential data licensing transactions.

While Latin America continues to deliver strong growth, the market conditions have become more challenging, limiting any material outperformance or upside from the region. Lastly, the data deals, which we've discussed would be inherently lumpy, have not materialized in the second half to the extent needed to offset the volume pressure. Our focus is on what we can control, executing more consistently, strengthening the capabilities and partnerships that support our commercial strategy, and converting more of the opportunities already in front of us. Moving to slide 4, I want to put some additional context around our performance because the underlying business continues to have real growth engines.

On the consumer side, our marketing initiatives continue to bring us more users into the platform, with particularly strong performance in areas where we've concentrated our investments. Consumer acquisitions across these markets are up 8% year-to-date. Our focus is now on expanding ARPU with this growing consumer base, including the adoption of new solutions to drive greater value, higher volumes, and revenue over time. We're also seeing good progress on our newer products. Paysafe Wallet grew more than 30% in the quarter and has continued to expand into additional European markets. In Latin America, our user base for the PagoEfectivo wallet has grown more than 40%.

We've also enhanced our offerings across the video gaming space, leading to over 20% growth in the vertical in the quarter. More broadly, our vitality index, defined as revenue from new products over the last three years, now represents 20% of our revenue. On the merchant side, SMB grew 4% in the third quarter, led by our direct and agent channels, where combined revenue increased 8% in the third quarter. That growth was supported in part by the expansion of our agent program, with the number of active agents increasing by 17% this year.

On the enterprise side, we're enhancing our network and banking relationships in the coming months, which should improve our ability to accelerate onboarding new merchants and capture more of the demand we're seeing across the targeted e-commerce verticals. So overall, the new products and initiatives underpinning our vitality index are delivering strong growth, but they're not yet at the size and scale needed to fully offset the headwinds we're experiencing. Moving forward, we need to continue the momentum from our marketing investment, driving more activity at the top of the funnel, and deepen engagement across our existing consumer and merchant bases. But let's take a step back on slide 5.

Over the last three years, we've reactivated our consumer base, with three-month active surpassing 8 million in the quarter. This marks six quarters of year-on-year growth. At the same time, transactions per active consumer are higher, giving us both a larger base and healthy underlying transaction activity. Our product strategy is evolving to broader consumer groups across different spending and engagement patterns. The opportunity is now to do more with that base and our distribution network, and the results of our initial marketing investment indicate strong consumer reception. Part of monetizing the larger consumer base is extending Paysafe into more of the places where our consumers are already spending their time and money.

On slide 6, I'll highlight two recent examples of how we're broadening our network across gaming and entertainment. We have longstanding relationships across these industries and millions of consumers already using our products. The opportunity is to connect these assets with broader audiences, merchants, and experiences, creating more value for our partners and consumers while expanding the role Paysafe can play. We launched Paysafe Arena in August, building on our strong position in video gaming. Paysafe Arena connects gamers with publishers through discovery, rewards, content, and commerce. For gamers, Arena delivers seamless purchasing, funding, and checkout experiences. For developers and publishers, Arena offers a new way to discover customers and reach Paysafe's global gaming audience of 19 million annual consumers.

We're encouraged by the early engagement with nearly 400,000 unique fans and over 1 million sessions since launch. As we highlighted last quarter, our partnership with Envision Racing creates a compelling platform at the intersection of motorsport, gaming, digital payments, and next-generation fan engagement. It introduces Paysafe to a broader global fan base and creates opportunities over time to connect those fans more directly with the experiences they care about, from the events themselves to the merchandise, travel, and other digital experiences. Together, Paysafe Arena and Paysafe Envision Racing demonstrate how we can expand the ecosystem around Paysafe and bring more consumers into our network.

We see significant opportunity to bring together our consumer reach, merchant network, and payment capabilities to create a new fan ecosystem that delivers richer experiences and greater transaction and revenue potential for Paysafe. With that, I'll turn it over to John.

John Crawford: Thank you, Bruce. Let's move to slide 8 for a summary of our third quarter results. Total revenue for Q3 was $439.6 million, up 1% compared to the prior year, or 2% on a constant currency basis. Growth continues to be led by Latin America, Paysafe Wallet in Europe, and North America iGaming. Growth moderated compared to Q2 and the first half of the year as regulatory headwinds stepped up in the second half. In particular, verticals such as crypto and financial trading saw both market softness and regulatory impacts. Our planning and guidance account for some level of headwinds, but the impact has been more pronounced than we expected.

At the same time, new client sales and growth from same-store sales have not ramped as quickly as we planned. Finally, the drop in the EUR/USD exchange rate and the grow-over from last year's larger data licensing deal have also impacted us. Adjusted EBITDA for the third quarter decreased 17% to $105.7 million, and adjusted EBITDA margin was 24% compared to 29.2% in the prior year. Roughly 190 basis points of the decline reflects lower gross margin, mainly due to the client mix in merchant solutions.

The rest reflects a 13% increase in SG&A, driven by two main items: first, $5 million of higher investment in marketing and IT to support our consumer strategy and technology platforms; and second, roughly $7 million of net one-offs or timing items, primarily last year's bonus accrual release, which creates a tough comparison, in addition to severance costs this year. Compared to Q2, adjusted EBITDA margin improved 100 basis points. Excluding severance costs, operating expenses remain on track with our outlook, including a $25 million reduction in the second half compared to the first half. We'll see most of that improvement in Q4. Turning to cash flow, we generated $50.2 million in unlevered free cash flow.

The 48% conversion of adjusted EBITDA was influenced primarily by the timing of receivables and higher taxes paid. On an LTM basis, unlevered free cash flow was $265 million, roughly flat compared to the prior year, reflecting a 65% conversion, which is within our target range. Adjusted net income for the third quarter was $23.8 million, and adjusted EPS was $0.44 a share compared to $0.70 a share in the prior year. The decline reflects lower adjusted EBITDA and a $7.5 million increase in interest expense, driven by higher effective interest rates following the refinancing. This was partially offset by a lower effective tax rate and a reduced share count.

On a GAAP basis, we reported a $247.5 million net loss for the quarter, including a $203 million goodwill impairment, largely triggered by the declines in the market value of our equity and debt. This charge is a non-cash accounting adjustment that does not impact cash flow. Turning to the segment results on slide 9. Starting with digital wallets, volume in Q3 was $6.7 billion, up 1%, and revenue was $208.1 million, an increase of 2% on a constant currency basis. Growth was driven by continued momentum and active user growth in Latin America and Paysafe Wallet in Europe.

This partially offset by regulatory pressures in certain geographies and sub-verticals, such as crypto and financial trading, though not at the pace we expected. Three-month actives increased 14% year-over-year to 8.1 million, and transactions per active user were stable. Average revenue per user decreased 10%, reflecting regional and product mix, including strong user growth in Latin America. Adjusted EBITDA for digital wallets was $85 million, down 9%, with a margin of 40.9% compared to 45.4% last year. The decline was driven by the product and regional business mix, which influenced gross margins, coupled with higher SG&A as expected, including $4.5 million of additional marketing and IT investment.

And as I mentioned earlier, last year benefited from the bonus accrual release, which was $4.8 million in digital wallets, making the margin comparison tougher this quarter. Turning to merchant solutions, volume increased 3% to $36 billion, and revenue increased 2% to $236.7 million. We saw revenue growth across all business lines in the segment, including double-digit growth for iGaming and our direct SMB sales channel and continued growth in the agent channel. Adjusted EBITDA for the segment was $45.2 million, down 5%, and the adjusted EBITDA margin was 19.1% compared to 20.6% in the prior year.

The margin decline reflects client mix, including faster growth from larger partners earning higher residuals, partly offset by a decrease in SG&A expense, including lower credit losses. Excluding the impact of lower data licensing revenue, adjusted EBITDA margin would have improved year-on-year even with the mix headwind. Turning to slide 10 for an update on debt and leverage. As a quick reminder, in August we successfully refinanced a significant portion of our debt, upsized our revolver, and extended the maturities of our term loans. Our net leverage ratio at quarter end was 5.5x. The refinancing resulted in $77 million of fees and related cash costs in the quarter.

While the majority of those costs are deferred for accounting purposes, they represented a meaningful use of cash during the period. I'd also note that our total net debt is down almost $100 million year-to-date, and the reduction of debt remains a key focus. Looking ahead, we expect net leverage of approximately 5.5x at year-end, reflecting our updated adjusted EBITDA outlook, as well as the $39 million litigation settlement payment expected in the fourth quarter. While these exceptional cash uses have constrained principal reduction this year, we are glad to have them behind us, and our underlying cash generation remains healthy. That brings me to slide 11 and why we remain confident in our ability to delever from here.

We continue to have a strong cash flow profile that provides us with sufficient capacity to pay down debt and invest for growth. We've demonstrated the durability of our cash profile through a period of meaningful change. Over the last several years, we've rationalized parts of the portfolio and navigated a number of external headwinds while continuing to grow the business organically and generate healthy margins and attractive cash flow. We expect to keep growing and generating strong free cash flow with capacity to comfortably cover our cash interest and required debt repayments, and to direct excess cash to voluntary repayments.

We also have flexibility within the model, disciplined management of capital spending, and further opportunities to optimize our banking network, partner contracts, and legal entity structures to unlock cash. Turning now to our full-year outlook on slide 12. Putting this all together, our updated outlook reflects the trends we've discussed, with approximately 4% top-line growth expected for the full year. The modest reduction in revenue flows through disproportionately to adjusted EBITDA because much of the revenue pressure is in our highest-margin areas, and we also had $5 million of unplanned severance expense. Despite the severance, we remain on track for a $25 million reduction in operating expenses in the second half compared to the first half.

With that, I'll turn the call back to Bruce for closing remarks.

Bruce Lowthers: Thank you, John. To wrap up, we continue to grow despite the challenges we've discussed today, extending what has now been several years of mid-single-digit organic growth. We have a clear view of where we need to improve. Our focus is on more consistent execution, continuing to drive innovation and product vitality, and translating that growth into strong cash flow and lower leverage. An important part of that is strengthening our commercial execution, and I'm very pleased to welcome Rob Schonfeld as our new Chief Revenue Officer.

Rob brings more than 25 years of experience across gaming, entertainment, and strategic partnerships, and will be focused on sharpening our commercial strategy, deepening customer relationships, and helping us capture more of the growth opportunities across our core markets. I want to thank our employees around the world for their hard work and continued commitment to Paysafe. With that, John and I are happy to take your questions.

Operator: [Operator Instructions] And our first question comes from Andrew Harte with BTIG.

Andrew Harte: On the headwinds that are in the deck, I think market, regulatory, and the banking environment, when do you expect those to subside, and is there anything you can do to combat them? And I guess how should we be thinking about growth headed into '27 when we kind of look at the implied fourth quarter guidance? Thanks.

Bruce Lowthers: Yes. Andrew, I'll start off, and I'll let John talk about full-year direction. But look, I think for us, when we look at the headwinds around the regulatory changes, that's something we've talked about over the last couple of years. We see that this is something that we're solving by diversifying our data, diversifying our product offering by increasing products coming to market, and really focusing on the vitality index to diversify the portfolio. So for us, that's really what we're focused on. We don't see the regulatory environment changing in any particular way going forward. We think this is something that's going to continue to evolve.

We think AI is going to drive more regulatory change, and we will just have to continue to adapt with it. And that's why it's really important for us to diversify through our product offerings. As we've talked about, we're having a lot of success with our new products. We feel very good about that. When we look at the revenue streams of those new products, they're now up to about 20% of Q3 revenue for the product lines that are growing upper single-digit, double-digit profile. So we feel very good about what's happening with Paysafe Wallet, with Pago Wallet, our data business, and really the improved or re-energy around the video game vertical as well.

So those things are doing exceptionally well, as John talked about. The margin is really good with those businesses. We just need more of it. We need it to accelerate to offset the regulatory headwinds that we've talked about. You can see within the crypto space overall, the general macro environment, crypto transactions are down pretty meaningfully year-over-year. That kind of finally started to impact us when we got into August, but really more so into September and October is really when it started to hit. We had a really, to be honest, pretty solid July. We came out of July looking pretty good, and volume started trending or sloping down once we got into August and September.

So we probably have a little bit of a headwind here for the coming months, but we really like the product offerings that we have and the revenue energy that it's bringing. John, anything you want to add as far as...

John Crawford: To put a little bit of math on it, as Bruce just discussed, it's somewhat the inverse of where we were seeing things in August when we were on the phone, where we were seeing the trends coming into the quarter as positive, and this quarter we're actually seeing them negative. So I think -- clearly, as you implied in the question, we think we're going to see more impact in Q4 than we saw in Q3, especially on the wallet side of the business from the standpoint of the regulatory headwinds and the headwinds in crypto and financial trading.

Also, the impact from FX, just looking at it now under 1.11 on the euro that was happening into Q3, but now we're seeing it well into Q4. We're not looking, and I don't want to get into a lot of '27 yet, but it's unclear how much these flow into '27, but we're not seeing anything new on the horizon. These came up kind of into the early-to-mid part of Q3.

Andrew Harte: Okay. And then it was good to see SMB stable, and there's improvements in the direct and agent channels. I think the stat was agent channels or active agents were up 17% year-to-date. I guess if we pair that with the broader merchant portfolio, would just love to kind of hear some granular detail on the puts and takes of what's driving growth and detracting from growth in the merchant segment. Thanks.

Bruce Lowthers: Yes, I think on the merchant side of the house, we continue to see really nice solid double-digit growth in the iGaming e-commerce piece. That continues to do well; we expect that will continue to have a strong year throughout the end of the year. On the SMB side, it's been candidly a battle throughout the year, and it was great to see the direct and agent side of that business kind of rebound, have a strong quarter, and show some good momentum there. So we feel good about SMB returning to that steady state, which is kind of a mid-single-digit growth profile.

For us, as we look at that, that's typically a 3% to 5%, kind of, growth profile is great profile for SMB. And I think on the e-com side, it has probably slowed a little bit on the non-iGaming side. That probably brings that down to more of an upper-single-digit kind of growth profile for us, but we really still have good, solid growth in the iGaming piece.

John Crawford: Yes. The non-gaming -- as Bruce mentioned, the non-gaming e-com piece has been bouncing around for us much of the year, and we're still trying to figure out how to navigate that. We've been slower than we would have liked on both the banking front and, in some cases, the product front, and we don't see that changing in Q4. But on the SMB side, that is an area where we're expecting that to continue to perform well in that mid-single-digit area, and the recent months in that business have been very good.

Operator: Our next question comes from Matthew Inglis with RBC Capital Markets.

Matthew Nakajima-Inglis: This is Matthew on for Dan Perlin over at RBC. So I just want to touch, with the new CRO coming in, and you touched on this a little bit before but what are the biggest opportunities to improve commercial execution? And it might be too early, but what's maybe the strategy change to accelerate both merchant wins and improve monetization in both segments?

Bruce Lowthers: Yes, Matthew, thank you. Yes. Great question. Look, we're really excited about Rob being on the team. He brings a great background, as we talked about on the call. I think the opportunities for us are really to monetize the consumer side of our business better, and he brings a tremendous amount of experience in that. So we'll -- or you will see us really talking a lot more about the consumer side of our business. There are a couple of reasons for that. One, we've really been pushing on that business, as you've seen, with the product releases like the Pago wallet and the Paysafe Wallet, so we really want to amplify that. Arena is really our first marketplace.

We're excited about what's happening there. Again, having 1 million sessions in the first 45 days for us is really a nice milestone because it gives us clear evidence that our consumers are receptive to more offerings from us. And so I think Rob is really going to help with that. He has a tremendous understanding of the consumer space, coming from that background with Activision, and I think it's just a tremendous benefit for us. So we'll see a lot more business development efforts coming around the consumer side of the business.

John Crawford: I also think he, in his prior experience, has a lot of exposure to businesses that we're seeing transition from physical to digital in their business models. When we've been talking about our eCash to Paysafe Wallet and PagoEfectivo to the Pago wallet stories in Europe and Latin America respectively, that is largely a physical-to-digital story where consumers are going from buying a card to funding a wallet. And he has, obviously, significant global market expertise in running global teams.

Matthew Nakajima-Inglis: Got it. Super helpful. I guess kind of in that vein, when we look at this slide here with the three-month actives and the ARPU, 3-month actives obviously trending really, really well. But then we look at the ARPU, and that's been kind of trending down for the past, call it, a year, and you called out Lat Am influencing the overall ARPU. So should we think about kind of with headwinds in Lat Am, like is ARPU inverting back upward, is that going to have to come from outside of Lat Am, or is Lat Am kind of structurally going to be lower ARPU just given the macro?

Bruce Lowthers: Yes, so let me take a swing at ARPU. What I would say about ARPU is when you look at that particular chart, I guess, Slide 5, it's -- what I see is basically ARPU has been somewhat range-bound around $25 across the time span of the last three years. And so I would expect my initial thesis when I came in, our hypothesis when I came in was that ARPU would decline as we continued to start building a broader use case for our consumers. I now think it's probably going to stay closer to stable because we're adding new features and new functionality to drive the wallets and new product offerings.

We're also seeing really solid ARPU with our new products. So when you look at Paysafe Wallet, it's got a really nice ARPU related to that. The Pago wallet is -- has a solid ARPU as well. So I feel like we're finding our way along, adding in new functionality in each of these products will help drive it. But I do think you're going to get a little bit of variability quarter-to-quarter based on the sheer number of people that you put on in a quarter as three-month actives that may cause ARPU to bounce around just a little bit. But my expectation is it's going to hang around that $25 to $30 range for the foreseeable future.

John Crawford: I mean, the exciting thing for us, Matthew, is the ARPU on the wallet solutions in our two big e-cash markets are 2 to 3x the ARPU of the cash-in solution. They're just smaller; they're growing very fast, but they're smaller. And so the other solutions continue to grow, too. So they've got to grow exceptionally fast to drive that ARPU in the near term.

Operator: [Operator Instructions] Our next question comes from Timothy Chiodo with UBS.

Timothy Chiodo: Great. The really helpful slides 10 and 11 around debt and leverage and some of the prepared remarks around the focus there. I know that you said you wanted to stop short a little bit of initial '27 outlook and totally appreciate that. This is quasi-related, but ending the year around 5.5x levered, if you could just give some even directional context around the plan for debt paydown into '27 and how we should just think about the 5.5x and the trajectory of that over, let's even call it, the next maybe two to three years.

John Crawford: Honestly, there's probably lenders on this call too. So there's one area where I'd like to be firm and say we are going to be delevering significantly over the next two to three years. While we're not finished with budgets and those kind of things yet, I'd say our anticipation is half a turn a year as a good target, and trying to be aggressive in wringing out cash in working capital and our banking network and regulated entities to drive that further.

Timothy Chiodo: I really appreciate that. And as a follow-up, the point around wringing out cash from the banking partners, what does that mean mechanically? Like, what are some of the tools that you could employ there?

John Crawford: So on the banking side, it's moving to banks that have more of a fintech focus and where we have lower requirements for keeping deposits with the banks that aren't doing anything relative to the portfolio, and also continuing to work with more strategic partners there where we can get the cash out of the system faster.

Operator: [Operator Instructions] It looks like we have reached the end of the question and answer session. I would like to turn the floor back over to Bruce for closing comments.

Bruce Lowthers: Great. Thank you very much. Look, I just want to thank all of the Paysafe employees for all of their efforts this year. We really appreciate all the hard work that everyone's put forward. We're very excited about the new products that are coming to market, certainly very excited about Paysafe Arena and the consumer business as a whole. So we'll continue to drive new products and try to drive our vitality index up further to accelerate our growth rate. So with that, thank you for joining us this morning, and thanks to the team here as well.

Operator: And this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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