Payoneer Global Inc. PAYO Form 10-Q filing Q2 FY2025

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Item 1. Financial Statements (Unaudited)

PART I. FINANCIAL INFORMATION

PAYONEER GLOBAL INC.

QUARTERLY REPORT FOR THE PERIOD ENDED JUNE 30, 2025

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PAYONEER GLOBAL INC.

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA

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The accompanying notes are an integral part of the condensed consolidated financial statements (Unaudited).

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PAYONEER GLOBAL INC.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA

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The accompanying notes are an integral part of the condensed consolidated financial statements (Unaudited).

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PAYONEER GLOBAL INC.

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)

U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA

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The accompanying notes are an integral part of the condensed consolidated financial statements (Unaudited).

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PAYONEER GLOBAL INC.

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)

U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA

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The accompanying notes are an integral part of the condensed consolidated financial statements (Unaudited).

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PAYONEER GLOBAL INC.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

U.S. DOLLARS IN THOUSANDS

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PAYONEER GLOBAL INC.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED)

U.S. DOLLARS IN THOUSANDS

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The below table reconciles cash, cash equivalents, restricted cash and customer funds as reported in the condensed consolidated balance sheets to the total of the same amounts shown in the condensed consolidated statements of cash flows:

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The accompanying notes are an integral part of the condensed consolidated financial statements (Unaudited).

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PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 1 – GENERAL OVERVIEW

Unless otherwise noted herein, “we”, “us”, “our”, “Payoneer”, and the “Company” refer to Payoneer Global Inc.

Payoneer, incorporated in Delaware, empowers global commerce by connecting businesses, professionals, countries and currencies with its diversified cross-border payments platform. Payoneer enables small and medium-sized businesses (“SMB(s)”) around the globe to reach new audiences by reducing the complexity of cross-border trade, and facilitating seamless, cross-border payments. Payoneer offers its customers the flexibility to pay and get paid globally as easily as they do locally. The Company offers a global financial stack that includes cross-border AR/AP capabilities and includes services such as funds management, working capital, and multicurrency accounts. The fully hosted service includes various payment options with minimal integration required, full back-office functions and customer support offered.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

a. Principles of consolidation, basis of presentation and accounting principles:

The accompanying condensed consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America (hereafter – U.S. GAAP) and include the accounts of Payoneer Global Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The consolidated interim financial information herein is unaudited; however, such information reflects all adjustments (consisting of normal, recurring adjustments), which are, in the opinion of management, necessary for a fair statement of results for the interim period. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the full year. The year-end condensed balance sheet data was derived from audited financial statements for the year ended December 31, 2024, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These unaudited financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto of Payoneer Global Inc. and its subsidiaries.

b. Use of estimates in the preparation of financial statements:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include, but are not limited to, allowance for capital advance receivables, income taxes, goodwill, revenue recognition, stock-based compensation, contingent consideration associated with M&A, and loss contingencies.

c. Stock-based compensation:

As further discussed in Note 18, in February 2025, the Company granted performance stock units (“PSUs”) under its Omnibus Stock Incentive Plan.

PSUs are accounted for using the grant date fair value method, based on the grant date share price. The Company recognizes the expense over the requisite service period using a graded vesting model. For unvested awards with performance conditions, the Company assesses the probability of attaining the performance conditions at each reporting period. Awards in respect of which attainment is deemed probable are recognized as expenses over the requisite service period.

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PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued):

d. Indefinite-lived intangible asset:

Indefinite-lived intangible asset consists of a payment license recognized in the Payeco Finance Information Holding Corporation (“PayEco”) acquisition. The indefinite-lived intangible asset is not amortized, but is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment assessment begins with a qualitative evaluation to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. If this threshold is met, the Company performs a quantitative assessment, comparing the fair value of the asset to its carrying amount. The indefinite-lived intangible asset is considered impaired if the carrying value exceeds the fair value.

The fair value of the indefinite-lived intangible asset is estimated using a discounted cash flow method. The discounted cash flow method, a form of the income approach, uses expected future operating results and a market participant discount rate. Failure to achieve these expected results, changes in the discount rate or market pricing metrics, may cause a future impairment of the indefinite-lived intangible asset.

e. Customer funds and investments

As previously disclosed during the quarter ended September 30, 2024, the Company identified an error in its condensed consolidated balance sheet as of June 30, 2024, and in its statements of cash flows for the six months ended June 30, 2024. Specifically, the Company incorrectly classified $225,000 of customer funds invested in term deposits with maturities greater than one year as current customer funds on the condensed consolidated balance sheet, rather than as non-current customer funds. In addition, the Company incorrectly classified $300,000 of term deposits in the basis of cash, cash equivalents, restricted deposits, and customer funds on the statement of cash flows, rather than as investing cash flows.

In connection with the Company’s evaluation of these errors during the quarter ended September 30, 2024, management, in accordance SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”, determined that these adjustments were not material to the previously issued financial statements. In the condensed consolidated statements of cash flows for the six months ended June 30, 2024 filed with this Quarterly Report on Form 10-Q, the Company has correctly presented $300,000 in customer funds invested in term deposits in accordance with the statement of cash flows treatment described in the preceding paragraph. In the condensed consolidated balance sheet as of September 30, 2024 and statements of cash flows for the nine months ended September 30, 2024 filed with the Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 and in the Annual Report on Form 10-K for the year ended December 31, 2024, the Company correctly presented $225,000 and $300,000 in customer funds invested in term deposits in accordance with the balance sheet and statement of cash flows treatment described in the preceding paragraph. This error had no impact on the previously issued condensed consolidated statements of comprehensive income or condensed consolidated statements of changes in shareholders’ equity and did not impact any financial liquidity covenants.

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PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued):

f. Recently issued accounting pronouncements:

FASB Standards issued, but not adopted as of June 30, 2025

In 2023, the FASB issued guidance, ASU 2023-09, which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). It also requires entities to disclose their income tax payments (net of refunds received) to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024, and can be applied prospectively with the option for retrospective application to all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

In 2024, the FASB issued guidance, ASU 2024-03, which requires the disaggregated disclosure of certain costs and expenses on an interim and annual basis. The new standard is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and can be applied prospectively with the option for retrospective application to all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

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NOTE 3 – ACQUISITIONS

PayEco

On April 9, 2025, the Company acquired 100% of the equity interests of PayEco, the parent company of EasyLink Payment Co., Ltd., a licensed China based payment service provider, for a total consideration of $76,074. The consideration is comprised of the following:

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Refer to Note 10 for details on the license intangible asset acquired.

Skuad

On August 5, 2024, Payoneer acquired 100% of the outstanding equity of Skuad Pte. Ltd. (“Skuad”) and its subsidiaries, a global workforce and payroll management company. The acquisition accelerates Payoneer’s strategy to deliver a comprehensive and integrated financial stack for SMBs that operate globally. The transaction was accounted for in accordance with ASC 805, Business Combinations (“ASC 805”), using the acquisition method of accounting with Payoneer as the acquirer.

PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 3 – ACQUISITIONS (continued):

The following table summarizes the fair value of the consideration transferred (after measurement period adjustments during the year ended December 31, 2024):

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The contingent consideration was in the form of a $9,709 earn-out subject to meeting certain performance criteria. The fair value of the contingent consideration was estimated using estimates of probability of each outcome and the Option Pricing Model (“OPM”), except for with respect to the integration plan target, which is not exposed to systemic risk. Refer to Note 7 below for details on changes in the fair value of the contingent consideration since acquisition.

The following table summarizes the recognized amounts of identifiable assets acquired and liabilities assumed (after measurement period adjustments during the year ended December 31, 2024):

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The excess of the purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill and is primarily attributable to the significant synergies expected to arise from the acquisition, including enhancement of Payoneer’s comprehensive and integrated financial stack. The Company does not expect goodwill to be deductible for income tax purposes.

Due to Skuad’s insignificant size relative to the Company, Payoneer is not providing supplemental pro forma financial information.

The allocation of the purchase price for this acquisition has been finalized and the measurement period has ended. All adjustments to assets, liabilities and tax estimates have been completed based on the information obtained during the measurement period.

PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 4 – CAPITAL ADVANCE (“CA”) RECEIVABLES

The Company enters into transactions with pre-qualified sellers in which the Company purchases a designated amount of future receivables for an upfront cash purchase price.

During the six months ended June 30, 2025 and 2024, the Company has purchased and collected the following principal amounts associated with CA receivables, including foreign exchange adjustments:

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The following are current and overdue balances that are segregated into the timing of expected collections at June 30, 2025:

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The following are current and overdue balances that are segregated into the timing of expected collections at December 31, 2024:

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As of June 30, 2025 and December 31, 2024, the Company applied a range of loss rates to the CA portfolio of 0.87% to 2.02% for the allowance for CA losses.

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PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 5 – CUSTOMER FUNDS AND INVESTMENTS

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The Company has invested certain customer funds in available-for-sale debt securities and term deposits. The following table summarizes the assets underlying customer funds as of June 30, 2025 and December 31, 2024:

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As of June 30, 2025, the estimated fair value of the available-for-sale debt securities included $7,362 in unrealized gains and $54 in unrealized losses, net of tax. The gross unrealized losses of $69 related to assets with a fair value of $176,174, which had been in a continuous unrealized loss position for less than 12 months.

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Unrealized losses have not been recognized into income as the Company neither intends to sell, nor anticipates that it is more likely than not that it will be required to sell, the securities before recovery of their amortized cost basis. The decline in fair value is due to changes in market interest rates, rather than credit losses. The Company will continue to monitor the performance of the investment portfolio and assess whether impairment due to expected credit losses has occurred.

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During the period ended June 30, 2025, the Company did not sell any available-for-sale debt securities or incur any realized gains or losses.

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As of June 30, 2025, $346,405 of the Company’s available-for-sale debt securities were due to mature within one year or less, and $933,369 were due to mature between one and five years.

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PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 6 – DERIVATIVES AND HEDGING

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The table below summarizes the gross notional amount and fair value of outstanding derivative instruments at June 30, 2025 and December 31, 2024.

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Note 1: The Company’s investment in interest rate derivative instruments consists of three and five year investments in 3% interest rate floors to hedge interest income on a $1,900,000 notional investment of customer funds in floating rate cash equivalent instruments. The short-term portion of the investments’ fair value shown in the tables above relates to the portion of the hedge expiring within one year of the balance sheet date.

During the three months ended June 30, 2025 and 2024, the Company recognized $6,445 and $982, respectively, and during the six months ended June 30, 2025 and 2024, the Company recognized $9,730 and $773, respectively, in unrealized gains, net of tax, on derivative instruments designated as cash flow hedges in OCI, respectively.

As of June 30, 2025, the Company estimated that $559 of unrealized gains related to cash flow hedges currently included in AOCI are expected to be reclassified into earnings within the next 12 months. As of June 30, 2025, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for forecasted transactions is 52 months. During the three and six months ended June 30, 2025 and 2024, the Company did not discontinue any cash flow hedges because it was probable that the original forecasted transaction would not occur and as such, did not reclassify any gains or losses to earnings prior to the occurrence of the hedged transaction.

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As of June 30, 2025 and December 31, 2024, the Company recognized an obligation to return cash collateral related to interest rate floors of $25,420 and $18,790, respectively, which was offset against the gross derivative balances shown in the table above.

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PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 7 – FAIR VALUE

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The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024:

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The Company’s foreign currency derivative instruments are valued using pricing models that take into account the contract terms and relevant currency rates. The Company’s interest rate floors are valued using pricing models that take into account the contract terms and relevant interest rates.

As of June 30, 2025 and December 31, 2024, the fair values of the Company’s cash, cash equivalents, customer funds (other than the portion consisting of available-for-sale debt securities), restricted cash, accounts receivable, capital advance receivables, accounts payable, and outstanding operating balances approximated the carrying values of these instruments presented in the Company’s condensed consolidated balance sheets because of their nature.

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PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 7 – FAIR VALUE (continued):

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In 2024, the Company recognized a liability for contingent consideration related to the Skuad acquisition, and recognized $110 and $375 during the three and six months ended June 30, 2025, respectively in loss related to the change in the fair value of the liability, included within General and administrative expenses on the condensed consolidated statements of comprehensive income. Refer to Note 3 above for additional details around valuation.

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NOTE 8 - OTHER CURRENT ASSETS

Composition of Other current assets, grouped by major classifications, is as follows:

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NOTE 9 – PROPERTY, EQUIPMENT AND SOFTWARE

Composition of property, equipment and software, grouped by major classifications, is as follows:

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Depreciation expense for the three months ended June 30, 2025 and 2024 was $2,559 and $2,098, respectively, and $4,696 and $4,206 for the six months ended June 30, 2025 and 2024, respectively.

During the three and six months ended June 30, 2025, the Company retired an insignificant amount of computers, software, and peripheral equipment that were fully depreciated. During the three and six months ended June 30, 2024, the Company retired computers, software, and peripheral equipment with a cost of $7 and $1,718, respectively, that were fully depreciated.

NOTE 10 –INTANGIBLE ASSETS

Composition of intangible assets, grouped by major classifications, is as follows:

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PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 10 –INTANGIBLE ASSETS (continued):

As discussed in Note 3, in April 2025, the Company completed its acquisition of PayEco. The Company determined that this transaction is an asset acquisition under ASC 805, as the acquired group of assets does not have a substantive process that together with the assets acquired significantly contribute to the ability to create outputs. Therefore, the business definition is not met. The Company has determined that the license is an indefinite lived intangible asset with a carrying value of $97,357 at June 30, 2025.

Amortization expense for the three months ended June 30, 2025 and 2024 was $12,994 and $8,614, respectively, and $25,247 and $15,914 for the six months ended June 30, 2025 and 2024, respectively.

During the three and six months ended June 30, 2025, the Company recognized an insignificant amount of impairment related to internal use software assets. Similarly, during the three and six months ended June 30, 2024, the Company recognized an insignificant amount of impairment related to intangible assets. Impairments are presented under Depreciation and amortization expenses in the condensed consolidated statements of comprehensive income.

Expected future finite-lived intangible asset amortization as of June 30, 2025, excluding capitalized internal use software of $18,216 not yet placed in service as of that date, was as follows:

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NOTE 11 - OTHER PAYABLES

Composition of Other payables, grouped by major classifications, is as follows:

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PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 12 – OTHER LONG-TERM LIABILITIES

Composition of other long-term liabilities, grouped by major classifications, is as follows:

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NOTE 13 – WARRANTS AND SHAREHOLDERS’ EQUITY:

Share Repurchase Program and Treasury Stock

On May 7, 2023, the Company’s Board of Directors authorized a stock repurchase program that provides for the repurchase of up to $80,000 of its common stock, including any applicable excise tax. On December 7, 2023, the Board of Directors authorized an amendment to the program to increase the authorized amount of repurchases to an aggregate amount not to exceed $250,000, including the amount that remained available as of December 7, 2023 to repurchase common stock under, but not any prior repurchases effected pursuant to, the previous authorization, and any applicable excise tax. Subsequent to June 30, 2025, our Board of Directors amended the existing repurchase authorization to increase the authorized amount of repurchases to an aggregate amount not to exceed $300,000, which amount includes amounts that remained available to repurchase common stock under, but not any prior repurchases effected pursuant to, the existing repurchase program and any applicable excise tax. The effective date of the amended authorization was August 6, 2025, and the amended authorization expires on December 31, 2027. The share repurchase program is intended to offset the impact of dilution from the issuance of new shares as part of employee compensation programs. Any share repurchases under this stock repurchase program may be made through open market transactions, privately negotiated transactions or other means including in accordance with Rule 10b-18 and/or Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The timing and total amount of repurchases is subject to business and market conditions and the Company’s discretion.

During the three and six months ended June 30, 2025, the Company repurchased 4,812,166 and 6,692,475 shares of its common stock for $32,703 and $49,681 at a weighted average cost of $6.80 and $7.43 per share, respectively. During the three and six months ended June 30, 2024, the Company repurchased 8,710,963 and 19,244,897 shares of its common stock for approximately $46,596 and $97,756 at a weighted average cost of $5.33 and $5.06 per share, respectively. As of June 30, 2025, a total of $54,070 remained available for future repurchases of the Company’s common stock under the program.

Warrants

The Company had publicly traded warrants that were assumed upon the closing of the business combination with FTAC Olympus Acquisition Corp. in June 2021, and were exercisable for shares of the Company’s common stock. Warrants were only exercisable for a whole number of shares at an exercise price of $11.50 and would expire on June 25, 2026, or earlier, if redeemed. In September 2024, the Company completed a tender offer (the “Offer”) to repurchase all outstanding Warrants, at $0.78 per Warrant. Concurrently with the Offer, the Company solicited consents (the “Consent Solicitation”) from holders of its outstanding Warrants to amend the agreement governing the Warrants (the “Warrant Agreement”) to permit the Company to redeem all Warrants that remained outstanding after the completion of the Offer for $0.70 per Warrant in cash, without interest.

During 2024, 24,030,937 Warrants were validly tendered and were repurchased for $0.78 per Warrant, or $18,744 in total, with a $13,217 loss recognized upon repurchase, which was the result of the premium paid above the valuation of the Warrants as of the latest revaluation date of June 30, 2024. All remaining untendered and outstanding Warrants were redeemed for $0.70 per Warrant, or $789 in total, with a $530 loss recognized upon repurchase, which was the result of the premium paid above the valuation of the Warrants as of the latest revaluation date of June 30, 2024.

PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 13 – WARRANTS AND SHAREHOLDERS’ EQUITY (continued):

The Warrants were accounted for as liabilities in accordance with ASC 815-40, Derivatives and Hedging, and were presented within warrant liabilities on the condensed consolidated balance sheets. The warrant liabilities were measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the condensed consolidated statements of comprehensive income. The following table presents the changes in the fair value of warrant liabilities (Level 1) during the six months ended June 30, 2024:

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Accumulated Other Comprehensive Income (Loss)

The changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, for the three and six months ended June 30, 2025 and 2024 were as follows:

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PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 13 – WARRANTS AND SHAREHOLDERS’ EQUITY (continued):

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NOTE 14 – COMMITMENTS AND CONTINGENCIES

The Company’s business is subject to various laws and regulations in the United States and other countries from where the Company operates. Any regulatory action, tax or legal challenge against the Company for noncompliance with any regulatory or legal requirement could result in significant fines, penalties, or other enforcement actions, increased costs of doing business through adverse judgment or settlement, reputational harm, loss of banking or other operational relationships, the diversion of significant amounts of management time and operational resources, and could require changes in compliance requirements or impose limits on the Company’s ability to expand its product offerings, or otherwise harm or have a material adverse effect on the Company’s business. From time to time, the Company incurs insignificant fines and penalties in the ordinary course of business.

On September 28, 2021, the National Banking and Securities Commission (CNBV) and the Bank of Mexico revoked the banking license of a banking entity utilized by the Company due to the banking entity not meeting applicable capital requirements. As a result, the Company is unable to withdraw funds from the banking entity. The Company has reserved $2,250 for potential losses related to those funds above the recovered amount. The Company applied for and recovered the maximum statutory reimbursement through the deposit insurance provided by Mexican Institute for the Protection of Banking Services (IPAB), totaling $140. The Company has filed a claim in liquidation for the remaining funds; however, the percentage of the deposit that will be recovered in liquidation is not known at this time.

From time to time, the Company is involved in other disputes or regulatory inquiries that arise in the ordinary course of business. These may include suits by its customers alleging, among other things, acting unfairly and/or not in conformity regarding pricing, rules or agreements, improper disclosure of the Company’s prices, rules, or policies or that the Company’s practices, prices, rules, policies, or customer agreements violate applicable law.

In addition to these types of disputes and regulatory inquiries, the operations of the Company are also subject to regulatory and/or legal review and/or challenges that tend to reflect the increasing global regulatory focus to which the industry in which the Company operates is subject and, when taken as a whole with other regulatory and legislative action, such actions could result in the imposition of costly new compliance burdens on the Company and may lead to increased costs and decreased transaction volume and revenue. Any claims or regulatory actions against the Company, whether meritorious or not, could be time consuming, result in costly litigation, settlement payments, damage awards (including statutory damages for certain causes of action in certain jurisdictions), fines, penalties, injunctive relief, or increased costs of doing business through adverse judgment or settlement, require the Company to change its business practices, require significant amounts of management time, result in the diversion of operational resources, or otherwise harm the business.

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PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 15 – REVENUE

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The following table presents revenue recognized from contracts with customers as well as revenue from other sources:

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Based on the information provided to and reviewed by the Company’s Chief Operating Decision Maker (“CODM”), the Company believes that the nature, amount, timing, and uncertainty of its revenue and cash flows and how they are affected by economic factors are most appropriately depicted through its primary regional markets. The following table presents the Company’s revenue disaggregated by primary regional market, with revenues being attributed to the country (in the region) in which the billing address of the transacting customer is located, with the exception of global bank transfer revenues, where revenues are disaggregated based on the billing address of the transaction funds source.

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Note that in 2024, the Company updated the definition of its primary regional markets to align with the view used by Management. This update eliminates South Asia, Middle East and North Africa as a separate region and instead includes revenues from South Asia in the Asia-Pacific region and Middle East and North Africa in the Europe, Middle East, and Africa region. The update has been applied to all periods reflected in the table below.

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(1) Greater China is inclusive of mainland China, Hong Kong, Macao and Taiwan.

(2) No single country included in any of these regions generated more than 10% of total revenue.

(3) The United States is the Company’s country of domicile. Of North America revenues, the U.S. represents $23,477 and $21,645 during the three months ended June 30, 2025 and 2024, respectively, and $46,089 and $43,570 during the six months ended June 30, 2025 and 2024, respectively.

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PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 16 - TRANSACTION COSTS

Composition of transaction costs, grouped by major classifications, is as follows:

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NOTE 17 – SEGMENT INFORMATION

The Company determines operating segments based on how its CODM manages the business, makes operating decisions around the allocation of resources, and evaluates operating performance. The Company’s CODM are its Chief Executive Officer and Chief Financial Officer, who review its operating results on a consolidated basis. The Company operates in one segment and has one reportable segment.

The Company’s CODM use consolidated net income, as shown on the condensed consolidated statements of comprehensive income, as the measure of segment profitability. The CODM use net income to evaluate the Company’s ongoing operations and for internal planning and forecasting purposes. This analysis is used in making strategic investment decisions. The Company’s measure of segment assets is reported on the condensed consolidated balance sheets as total assets.

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(1) Refer to Note 16 for disaggregation of transaction cost into significant segment expense categories.

(2) Other operating expenses include miscellaneous, individually insignificant operating expenses. The Company’s CODM review these items in aggregate.

(3) Other segment items included in net income include finance income and expense, which primarily includes corporate interest income and foreign currency remeasurement gains and losses. For the period ended June 30, 2024, this also includes public warrant revaluation.

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PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 18 – STOCK-BASED COMPENSATION

Stock Options

The following table summarizes the options to purchase shares of common stock activity under the Company’s equity incentive plans for the six months ended June 30, 2025:

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The weighted average exercise price of the options outstanding as of June 30, 2025 was $3.01 per share.

Restricted and Performance Stock Units

The following table summarizes the restricted stock unit (“RSU”) and performance stock unit (“PSU”) activity under the Company’s equity incentive plans as of June 30, 2025:

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In the six months ended June 30, 2025, the Company granted 6,903,168 RSUs under the Company's Omnibus Stock Incentive Plan, which are subject to time-vesting and continued service conditions.

In the same period, the Company granted 895,103 PSUs under the same Plan, which are subject to time-vesting, continued service conditions and achievement of specified company performance goals.

The Company withholds common stock shares associated with net share settlements to cover tax withholding obligations upon the vesting of restricted stock units under its employee equity incentive plans in the United States. During the three months ended June 30, 2025 and 2024, the Company withheld 492,509 and 343,249 shares for $3,373 and $2,117, respectively, and for the six months ended June 30, 2025 and 2024, the Company withheld 1,214,946 and 1,148,679 shares for $10,867 and $5,997, respectively. RSU vesting is shown net of this withholding on the condensed consolidated statements of shareholders’ equity and cash flows.

The Company collects cash from proceeds from certain international employees’ sales of common stock. The amount is held in a Company bank account until it is remitted to the employees. Due to the restrictions on the use of the funds in the bank account, we have classified the amount as short-term restricted cash, and a corresponding liability is included in Other payables in the condensed consolidated balance sheets. As of June 30, 2025, $242 of such funds were held.

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PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 18 – STOCK-BASED COMPENSATION (continued):

Employee Stock Purchase Plan

As of June 30, 2025, approximately 2,819,906 shares were reserved for future issuance under the Company’s Employee Stock Purchase Plan (“ESPP”). The fair value attributable to the ESPP was $1,587 as of May 31, 2025, the beginning of the current offering period, and was measured using the Black-Scholes pricing model. The current offering period is expected to close November 29, 2025.

The expense associated with the ESPP recognized during the three and six months ended June 30, 2025 was $693 and $1,486, respectively.

Impact on Results of Operations

The impact on the Company’s results of operations of recording stock-based compensation expense under the Company’s equity incentive plans, including the ESPP, were as follows:

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Note that $697 and $817 in stock-based compensation awards were capitalized as part of internal-use software during the three months ended June 30, 2025 and 2024, respectively, and $1,313 and $1,736 were capitalized during the six months ended June 30, 2025 and 2024, respectively.

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NOTE 19 - INCOME TAXES

The Company’s provision for income taxes in the interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in the period.

The Company had an effective tax rate of 30% and 33% for the six months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025, the difference between the Company’s effective tax rate and the U.S. federal statutory rate of 21% was primarily the result of an increase in the provision for uncertain tax positions and nondeductible stock-based compensation, partially offset by a benefit under U.S. tax law for income earned from foreign customers. For the six months ended June 30, 2024, the difference between the Company’s effective tax rate and the U.S. federal statutory rate of 21% was the result of an increase in the provision for uncertain tax positions as well as discrete tax adjustments, primarily related to stock-based compensation.

The Company maintains a valuation allowance in jurisdictions where it is more likely than not that all or a portion of a deferred tax asset may not be realized. In determining whether a valuation allowance is warranted, the Company evaluates factors such as prior earnings history, expected future earnings and the reversal of existing taxable temporary differences. As of June 30, 2025, the Company maintains a full valuation allowance on its deferred tax assets in Singapore, associated with the Skuad acquisition in Singapore, and in Germany as management believes it is more likely than not that the deferred tax assets will not be recognized in these jurisdictions. The Company maintains its previous conclusion that a valuation allowance on deferred tax assets in the United States and Israel is not necessary.

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PAYONEER GLOBAL INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

U.S. DOLLARS IN THOUSANDS (EXCEPT SHARE DATA)

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NOTE 20 – NET EARNINGS PER SHARE

The Company’s basic net earnings per share is calculated by dividing net income attributable to common shareholders by the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities. The diluted net earnings per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net earnings per share is the same as basic net earnings per share in periods when the effects of potentially dilutive shares of common shares are anti-dilutive.

Basic and diluted net earnings per share attributable to common stockholders were calculated as follows:

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For the three and six month periods ended June 30, 2025, 2,750,000 RSUs with market conditions, 895,103 PSUs, 15,000,000 Earn-Out Shares (as that term is defined in the Agreement and Plan of Reorganization dated February 3, 2021 (as amended) with FTAC Olympus Acquisition Corp.), and ESPP shares to be issued under the current offering period were excluded from the computation of diluted net earnings per share, as their effect was antidilutive, conditions were not met or they were not in the money in the reporting period. For the three and six month period ended June 30, 2025, 8,116,630 and 7,804,304 RSUs, respectively, have been excluded for the same reason. For the three month period ended June 30, 2025, 1,487,008 options to purchase common stock was excluded for the same reason. In both the three and six month periods ended June 30, 2024, 25,158,086 Public Warrants, 3,620,000 RSUs with market conditions, 15,000,000 Earn-Out Shares, 2,043,479 options to purchase common stock, and ESPP shares to be issued under the May 15, 2024 offering period were excluded for the same reason. For the three and six month periods ended June 30, 2024, 2,208,513 and 11,018,581 RSUs, respectively, have been excluded for the same reason.

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NOTE 21 – SUBSEQUENT EVENTS

On July 30, 2025, the Company’s Board of Directors amended the existing repurchase authorization to increase the authorized amount of repurchases to up to $300,000, which amount includes amounts that remained available to repurchase common stock under, but not any prior repurchases effected pursuant to, the existing repurchase program and any applicable excise tax. The effective date of the amended authorization was August 6, 2025, and the amended authorization expires on December 31, 2027. See Note 13 for further information.

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PAYONEER GLOBAL INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Throughout this section, unless otherwise noted, “we”, “us”, “our”, “Payoneer”, and the “Company” refer to Payoneer Global Inc.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis, including information with respect to our future performance, liquidity and capital resources, and general and administrative functions, includes forward-looking statements that involve risks and uncertainties. You should review the sections titled “Cautionary Note on Forward-Looking Statements” and “Risk Factors” for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

Payoneer is a financial technology company purpose-built to enable the world’s small and medium-sized businesses (“SMB(s)”) to grow and operate their businesses around the world by reliably and securely connecting them to the global digital economy. Payoneer’s financial stack makes it easier for millions of SMBs and entrepreneurs, particularly in emerging markets, to access global demand and supply, pay and get paid, and manage their cross border and other needs from a single platform. Our financial stack provides a suite of cross-border accounts receivable (AR) and accounts payable (AP) capabilities, including multicurrency account capabilities, and includes services such as working capital and funds management. Payoneer’s core value proposition is that we remove the complexity and barriers of doing business across borders for our customers. With a multi-currency Payoneer Account, businesses and entrepreneurs around the world can serve and transact with their overseas customers, suppliers, vendors, contractors, and partners as if they were local.

We primarily generate revenues when Payoneer customers use the funds in their Payoneer account to make a payment, make a purchase or to withdraw the funds to a financial institution. For our customers transacting on a B2B or DTC basis, we also in certain circumstances generate revenue when they receive funds, such as when they invoice a customer or collect payments via their webstore. Additionally, given the significant customer funds held on our platform and ongoing growth in those balances, and in light of the high interest rate environment in the U.S. and elsewhere, interest earned on customer funds held on our platform has been a significant source of revenue. Our long-term strategy is centered on growing with customers on our platform who fit our ideal customer profile, namely – those who are customers that have on average over $500 a month in volume and were active over the trailing twelve-month period, and on increasing the revenue we earn from each customer. We believe that successful execution of this strategy will drive revenue growth as (i) adding new customers who meet our ideal customer profile, improving retention, and increasing our product offerings to capture more wallet share will drive greater ad valorem volume of transactions processed through the Payoneer platform; and (ii) introducing new products and services and increasing customer adoption of additional products and services will improve our monetization of customers over time. Volume is one of the primary drivers for our revenue growth. See “Key Metrics and Non-GAAP Financial Measures” for additional information.

Our customers have trusted the Payoneer platform to process $20.7 billion and $18.7 billion in volume during the three months ended June 30, 2025 and 2024, respectively, and $40.4 billion and $37.2 billion in volume during the six months ended June 30, 2025 and 2024, respectively.

Looking forward, we intend to continue to invest actively to enhance our global platform, deliver new products, extend our regulatory footprint, further automate our operations, increase new customer growth and make acquisitions to accelerate our ability to deliver more value to customers around the world.

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PAYONEER GLOBAL INC.

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Key Developments and Trends

Macroeconomic Conditions

We are focused on executing our strategy for growth and capturing the long-term opportunity of serving cross-border SMBs from around the world. However, macroeconomic conditions, including geopolitical and other global events that impact consumer and business spending and behavior, such as, but not limited to, the interest rate environment, inflation, changes in global trade policies (including the imposition of tariffs), local political instability, global health crises, supply chain dislocations, regional and other conflicts, including the ongoing war in Ukraine and Israel’s ongoing conflicts in the Middle East, and disruptions and instability and regulatory changes in the banking sector may impact our customers, providers, banking partners and relationships and ultimately the amount of volume processed on our platform which may affect our results of operations. For example, the recent imposition of significant trade policy measures and tariffs by the U.S. government, including but not limited to tariffs on China, has introduced increased uncertainty and potential risks and opportunities for both our customers and our business. The long-term effects of these and any future trade actions on the global economy and our business remain uncertain. These developments could have a material adverse impact on our financial results in any given reporting period. We continue to monitor evolving trade policies and will evaluate potential impacts on our financial statements as more information becomes available.

As we increase the utility of the Payoneer Account, we have grown customer funds on our platform over a multi-year period to $7.0 billion as of June 30, 2025. During 2023, the U.S. Federal Reserve raised the target benchmark interest rate by 525 basis points to a high of 525 to 550 basis points by August 2023. Coupled with continued growth in customer balances, this drove a significant increase in the interest income revenue we earn on our customer funds. During 2024, the U.S. Federal Reserve cut the benchmark interest rate by 100 basis points to a target range of 425 to 450 basis points. As of the date of this Quarterly Report on Form 10-Q, there has been no change to the U.S. benchmark rates in the current year. While there remains uncertainty as to the timing and magnitude of future interest rate changes, we expect to see a negative impact on our revenue from declining interest rates over the medium-term. In response, since 2024, we have been investing a total of $1.8 billion of our customer funds in both available-for-sale debt securities and term deposits to reduce our sensitivity to declines in short term interest rates, and have purchased interest rate derivative contracts with respect to $1.9 billion in customer funds to provide a floor against the impact of interest rate declines below levels defined in the relevant interest rate derivative instruments.

Impact of Israel’s Conflicts in the Middle East

Since October 7, 2023, Israel has been at war with Hamas, intermittently with Hezbollah, and exchanged attacks with Iran and other proxies of the Iranian regime, including the “12-day war” in June 2025. Despite the ongoing war in the region, we have continued to operate our business and serve our customers around the world and, to date, our ability to support customers has not been materially impacted. We are monitoring the situation closely and benefit from our broad geographic footprint, partially outsourced operations model, and a robust business continuity plan. Additionally, our technology infrastructure has redundancy in place outside of Israel. Approximately 52% of our global employee base is located in Israel, including approximately 78% of our research and development resources. At this time, an insignificant portion of our Israeli workforce have been called to military reserve duty and we have contingencies in place to cover impacted roles and responsibilities.

The evolving conflict is likely to continue to impact economic activity in the region and could impact revenues from customers located in Israel. Our revenue derived from customers based in Israel was insignificant for the three and six months ended June 30, 2025 and is included within revenues from Europe, Middle East, and Africa within Note 16 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

The state of the ongoing conflict remains highly uncertain and could worsen or expand which could, in turn, further impact economic conditions in Israel and in the broader region. At this time, it is difficult to assess the impact the war may have on our future results of operations. Any further escalation, expansion, or prolonged continuation of the ongoing conflict has the potential to impact our operations as well as to negatively impact the broader global economy and may have a material adverse effect on our results of operations.

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PAYONEER GLOBAL INC.

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Impact of the war in Ukraine

During 2022, a geopolitical and armed conflict between Ukraine and Russia, which developed into an ongoing war, resulted in economic sanctions on Russia, Belarus, and certain territories in Ukraine. We provide services to customers in Ukraine and in jurisdictions that are or may be impacted by these economic sanctions. We have developed and implemented a robust transaction monitoring program designed to comply with imposed sanctions and to monitor the impact the conflict may have on our results of operations. During 2022, we ceased to provide services to customers in Russia and have limited our payment services to Belarus customers. Our revenues in Ukraine have remained relatively stable. For the three and six months ended June 30, 2025, Ukraine and Belarus, combined, accounted for less than 10% of our revenue, of which Belarus accounted for less than 1% of our revenue. Further escalation of the conflict may have a material effect on our results of operations.

Mergers & Acquisitions

On April 9, 2025, Payoneer acquired 100% of the outstanding equity of Payeco Finance Information Holding Corporation, the parent company of EasyLink Payment Co., Ltd., a licensed China based payment service provider. The acquisition strengthens Payoneer’s global regulatory infrastructure and positions it to better serve China-based customers with enhanced and localized products and services. Refer to Note 3 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information on the acquisition.

On August 5, 2024, Payoneer acquired 100% of the outstanding equity of Skuad Pte. Ltd. (“Skuad”), a global workforce and payroll management company. The acquisition accelerates Payoneer’s strategy to deliver a comprehensive and integrated financial stack for SMBs that operate internationally.

Results of Operations

The period-to-period comparisons of our results of operations have been prepared using the historical periods in our condensed consolidated financial statements. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related Notes included within this Quarterly Report on Form 10-Q.

**not meaningful

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PAYONEER GLOBAL INC.

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Revenues

Revenues were $260.6 million and $507.2 million for the three and six months ended June 30, 2025, an increase of $21.1 million and $39.5 million, or 9% and 8%, respectively, compared to the prior-year period. This increase in revenue was comprised of an increase in SMB revenue, including $15.7 million and $29.8 million from B2B SMBs, $8.5 million and $16.4 million from SMBs that sell on marketplaces, and $4.0 million and $7.5 million from SMBs selling DTC, for the three and six months ended June 30, 2025, respectively. This growth in SMB revenue was driven by continued adoption of our high value services, certain monetization initiatives, and ongoing growth in high take rate regions. This increase in revenues was partially offset by a decrease of $7.5 million and $14.8 million in interest income earned on customer balances for the three and six months ended June 30, 2025, respectively, resulting from modestly lower interest rates, and partially offset by an increase in customer balances held on our platform compared to the prior year period. Transaction costs

Transaction costs were $40.6 million for the three months ended June 30, 2025, an increase of $3.6 million, or 10%, compared to the prior-year period, driven by an increase of $5.2 million in bank and processor fees and $1.7 million in card network fees offset by a decrease in chargebacks and operational losses of $2.6 million. The increase in transaction costs is broadly in line with the increase in volume.

Transaction costs were $79.9 million for the six months ended June 30, 2025, an increase of $9.0 million, or 13%, compared to the prior-year period, driven by an increase of $9.5 million in bank and processor fees and $3.1 million in card network fees offset by improvements in chargebacks and operational losses of $2.1 million. The increase in transaction costs outpaced the increase in total volume due to shift toward products with a higher cost per transaction.

Other operating expenses

Other operating expenses were $42.7 million for the three months ended June 30, 2025, an increase of $ 1.5 million, or 4%, compared to the prior-year period, driven primarily by an increase of $2.1 million in information technology expenses, partially offset by a decrease of $1.5 million in reserves related to ongoing regulatory matters.

Other operating expenses were $84.4 million for the six months ended June 30, 2025, an increase of $2.8 million, or 3%, compared to the prior-year period, driven primarily by an increase of $3.2 million in information technology expenses partially offset by a decrease of $1.5 million in reserves related to ongoing regulatory matters and a decrease of $1.3 million in third party contractor expenses.

Research and development expenses

Research and development expenses were $37.4 million for the three months ended June 30, 2025, an increase of $9.8 million, or 36%, compared to the prior-year period, driven by an increase of $6.3 million in employee compensation, benefits and other employee-related expenses in line with an increase in employee headcount, an increase of $2.4 million in third-party contractor expenses and an increase of $1.1 million in information technology expenses.

Research and development expenses were $74.7 million for the six months ended June 30, 2025, an increase of $15 million, or 25%, compared to the prior-year period, driven by an increase of $10.2 million in employee compensation, benefits and other employee-related expenses in line with an increase in employee headcount and including certain restructuring charges, an increase of $3.1 million in third-party contractor expenses and an increase of $1.8 million in information technology expenses, partially offset by an increase of $1.2 million in employee compensation costs capitalized as internal use software in connection with ongoing investments in our platform infrastructure.

Sales and marketing expenses

Sales and marketing expenses were $57.3 million for the three months ended June 30, 2025, an increase of $6.7 million, or 13%, compared to the prior-year period, driven primarily by an increase of $3.0 million in employee compensation, benefits and other employee-related expenses in line with an increase in employee headcount and an increase of $2.8 million in expenditures on certain marketing efforts.

Sales and marketing expenses were $112.0 million for the six months ended June 30, 2025, an increase of $11.5 million, or 11%, compared to the prior-year period, driven by an increase of $5.5 million in employee compensation, benefits and other employee-related expenses in line with an increase in employee headcount and an increase of $5.0 million in spend on certain marketing efforts.

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PAYONEER GLOBAL INC.

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General and administrative expenses

General and administrative expenses were $37.0 million for the three months ended June 30, 2025, an increase of $10.9 million, or 42%, compared to the prior-year period, driven predominately by an increase of $5.4 million in employee compensation, benefits and other employee-related expenses primarily due to an increase in employee headcount and an increase of $1.9 million in third-party legal expenses.

General and administrative expenses were $66.9 million for the six months ended June 30, 2025, an increase of $16.6 million, or 33%, compared to the prior-year period, driven predominately by an increase of $10.6 million in employee compensation, benefits and other employee-related expenses primarily due to an increase in employee headcount and an increase of $1.8 million in consulting expenses.

Depreciation and amortization expenses

Depreciation and amortization expenses were $15.6 million and $29.9 million for the three and six months ended June 30, 2025, an increase of $4.8 million and $9.8 million, or 45% and 49%, respectively, compared to the prior-year period, mainly driven by an increase in amortization of internal use of software.

Financial income and expense, net

Financial expense, net was $0.2 million for the three months ended June 30, 2025, a decrease of $2.2 million, or 111%, compared to the prior-year period, primarily driven by a $4.1 million reduction in corporate interest income as a result of lower average invested balances and lower interest rates, as well as a $1.0 million gain from the change in fair value of the warrant liability in the prior year period which did not recur. These effects were offset by a $3.6 million decrease on the exchange rate loss during the current period compared to the prior-year period.

Financial expense, net was $1.8 million for the six months ended June 30, 2025, a decrease of $8.3 million, or 127%, compared to the prior-year period, primarily driven by a $8.1 million reduction in corporate interest income as a result of lower average invested balances and lower interest rates, as well as a $2.8 million gain from the change in fair value of the warrant liability in the prior year period which did not recur. These effects were offset by a $3.6 million decrease in the exchange rate loss during the current period compared to the prior period.

Income taxes

Income tax expense was $10.4 million for the three months ended June 30, 2025, a decrease of $5.5 million, or 35%, compared to the three months ended June 30, 2024. This decrease was primarily driven by a decrease of $6.7 million in our U.S. federal current income tax expense as compared to the prior year period, which is due to a significant benefit under U.S. tax law for income earned from foreign customers. Additionally, the decrease in income tax expense compared to the prior year period is due to a favorable impact from deferred tax benefits in the U.S. of $2.3 million, primarily related to stock-based compensation and capitalization of research and development costs. These decreases were offset by a $5.1 million increase in the provision for uncertain tax positions.

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Income tax expense was $17.6 million for the six months ended June 30, 2025, a decrease of $12.2 million, or 41%, compared to the six months ended June 30, 2024. This decrease was primarily driven by a decrease of $12.4 million in our U.S. federal current income tax expense as compared to the prior year period, which is due to a significant benefit under U.S. tax law for income earned from foreign customers. Additionally, the decrease in income tax expense compared to the prior year period is due to a favorable impact from deferred tax benefits in the U.S. of $3.0 million, primarily related to stock-based compensation and capitalization of research and development costs. These decreases were offset by a $4.0 million increase in the provision for uncertain tax positions.

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On July 4, 2025, the One Big Beautiful Bill Act (“the Act”) was enacted into U.S. law. The Act includes changes to corporate taxation including making permanent certain provisions of the Tax Cuts and Jobs Act that were previously set to expire on December 31, 2025. The Company is currently evaluating the potential impacts of the Act. Based on a preliminary review, the Company does not currently expect the Act to have a material impact on its effective tax rate or deferred tax assets for the period ended June 30, 2025. The Company will continue to assess the impact as further guidance becomes available and will monitor any implications for its effective tax rate and cash tax payments.

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Liquidity and Capital Resources

The following discussion of our liquidity and capital resources is based on the financial information derived from our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

We believe our existing cash and cash equivalents and cash flows from operating activities will be sufficient to meet our operating working capital, share repurchase, capital advance, and capital expenditure requirements for at least the next twelve months. Our future financing requirements will depend on many factors including our growth rate, the timing and extent of spending to support development of our platform and the ongoing expansion needs of sales and marketing activities. We have in the past and may in the future enter into agreements with third parties with respect to investments in, or acquisitions of, businesses or technologies, which could also require us to seek additional equity or debt financing.

Sources of Liquidity

As of June 30, 2025, we had $497.1 million of cash and cash equivalents.

Current and Future Cash Requirements

On May 7, 2023, our Board of Directors authorized a stock repurchase program that provides for the repurchase of up to $80.0 million of our common stock, including any applicable excise tax. On December 7, 2023, the Board of Directors authorized an amendment to the program to increase the authorized amount of repurchases to an aggregate amount not to exceed $250.0 million, including the amount that remained available as of December 7, 2023 to repurchase common stock under, but not any prior repurchases effected pursuant to, the previous authorization, and any applicable excise tax. Subsequent to June 30, 2025, our Board of Directors amended the existing repurchase authorization to increase the authorized amount of repurchases to up to $300 million, which amount includes amounts that remained available to repurchase common stock under, but not any prior repurchases effected pursuant to, the existing repurchase program and any applicable excise tax. The effective date of the amended authorization was August 6, 2025, and the amended authorization expires on December 31, 2027. Refer to Note 13 for further information on the share repurchase amendment.

During the six months ended June 30, 2025, we repurchased 6,692,475 shares of our common stock for $49.7 million, of which $0.7 million was not yet settled at period end. As of June 30, 2025, a total of $54.1 million remained available for future repurchases of our common stock under the program in place at June 30, 2025.

Cash Flows

The following table presents a summary of cash flows from operating, investing, and financing activities for the following comparative periods.

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Note that as described in Note 5 to our condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q, during the quarter ended September 30, 2024, the Company identified an error in its condensed consolidated statements of cash flows for the six months ended June 30, 2024. Specifically, the Company incorrectly classified customer funds invested in term deposits in the basis of cash, cash equivalents, restricted deposits, and customer funds on the statement of cash flows, rather than as investing cash flows. In connection with the Company’s evaluation of these errors during the quarter ended September 30, 2024, management, in accordance SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”, determined that these adjustments were not material to the previously issued financial statements. In the condensed consolidated statements of cash flows for the six months ended June 30, 2024 filed with this Quarterly Report on Form 10-Q, the Company has correctly presented these investments as investing cash flows.

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PAYONEER GLOBAL INC.

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Operating Activities

Net cash provided by operating activities was $124.4 million for the six months ended June 30, 2025, an increase of $43.5 million compared to $80.9 million for the six months ended June 30, 2024.

Impact of changes in operating assets and liabilities - $53.3 million current period over prior period increase to operating cash flows

During the six months ended June 30, 2025, cash flows related to Capital advance receivables increased $28.4 million compared to the prior year period, driven by an increase in collections of $41.1 million which outpaced increased originations of $12.7 million during the period compared to the previous period.

Cash flows from Other current assets increased $24.2 million relative to the prior year period, driven by a one-time cash tax refund and timing of payments relative to period cutoff. Additionally, cash flows related to Other payables and Trade payables increased $6.7 million and $1.3 million, respectively, in each case compared to the prior year period, due to changes in timing of payments relative to period cut-off.

These increases were partially offset by cash flows from Other assets, which decreased $7.8 million compared to the prior year, primarily due to interest receivable from certificates of deposits that was not accrued in the prior period.

Impact of non-cash items - $11.6 million current period over prior period increase to operating cash flows

Current year period operating cash flows include, higher non-cash addbacks to net income to arrive at operating cash flows compared to prior year, consisting primarily of a $9.8 million increase in depreciation and amortization expense and a $10.1 million increase in stock-based compensation expense.

The overall increase to operating cash flows from non-cash items was partially offset by higher non-cash reductions to net income compared to prior years, consisting primarily of a decrease of $8.2 million in the amount of the addback due to the effect of exchange rate changes on cash and cash equivalents and a $4.3 million increase in deferred taxes.

Impact of net income - $21.3 million current period over prior period decrease to operating cash flows

The overall increase in operating cash flows was offset by a decrease in net income of $21.3 million in the six months ended June 30, 2025 compared to the prior year period, which was primarily a result of $64.8 million of growth in operating expenses which outpaced $39.5 million of growth in revenue, as discussed in the Results of Operations section above.

Investing Activities

Net cash used in investing activities was $133.5 million for the six months ended June 30, 2025, a decrease of $831.8 million compared to net cash used in investing activities of $965.3 million for the six months ended June 30, 2024.

During the six months ended June 30, 2025, our net cash used in investing activities saw a significant decrease. This contrasts with the six months ended June 30, 2024, when we made an initial substantial investment in U.S. Treasury securities and term deposits, resulting in net purchases of $934.2 million. In the current period, our purchases of these investments, net of maturities, amounted to $17.5 million, reflecting a shift from the initial ramping up of our program to a more measured approach of reinvestment. This decrease in net cash used in investing activities was partially offset by the increase in customer funds in-transit balances of $44.6 million and $33.1 million of cash paid for the acquisition of PayEco, net of cash and customer funds acquired.

Financing Activities

Net cash provided by financing activities was $2.2 million for the six months ended June 30, 2025, a decrease of $456.6 million compared to net cash used in financing activities of $443.5 million for the six months ended June 30, 2024. Current period cash used in financing activities reflects the $47.5 million increase in customer balances since the beginning of the period which was $401.0 million lower than the $353.4 million decline in the prior year period. Additionally share repurchases were $48.9 million lower than in the prior year period.

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PAYONEER GLOBAL INC.

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Key Metrics and Non-GAAP Financial Measures

Our management uses a variety of financial and operating metrics to evaluate our business, analyze our performance, and make strategic decisions. We believe these metrics and non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as management. However, certain of these measures are not financial measures calculated in accordance with GAAP and should not be considered as substitutes for financial measures that have been calculated in accordance with GAAP. We primarily review the following key performance indicators and non-GAAP measures when assessing our performance:

Volume

Volume refers to the total dollar value of transactions successfully completed or enabled by our platform, not including orchestration transactions. For a customer that both receives and later sends payments, we count the volume only once. Volume serves as a key metric for overall business activity, as growing volume is one of the primary drivers for our revenue growth.

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Volume grew 11% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, and 9% for the six months ended June 30, 2025 when compared to the six months ended June 30, 2024, respectively, driven by a combination of continued growth in volumes from SMBs selling on marketplaces, strong growth in volume from B2B SMBs, and in volumes processed for enterprise partners, including in the travel segment.

Revenue

We generate revenues mainly from transaction fees, which vary based on the type of service the customer utilizes. Transaction fee revenue principally consists of fees for withdrawals and usage. We also earn revenues in certain instances from volumes coming into the platform related to our B2B services and through our Checkout offering. We generate significant revenues from interest earned on customer funds held on our platform. In addition, we generate revenue from non-volume-based products and services which are based on a fixed fee. We believe that Revenue demonstrates our ability to monetize volume activity on our platform. Our revenues can be impacted by the following:

(i) Mix in customer size, products, and services;

(ii) Mix between domestic and cross-border transactions;

(iii) Geographic region or country in which a transaction occurs; and

(iv) Pricing and other market conditions including interest rates.

Management closely monitors volume and revenue to ensure that we continue to grow funds and business activity that enters into the platform, expanding our overall scale and the reach of our business.

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PAYONEER GLOBAL INC.

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Adjusted EBITDA

In addition to our financial results determined in accordance with GAAP, we believe Adjusted EBITDA, as a non-GAAP measure, is useful in evaluating our operating performance. We use Adjusted EBITDA to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial measure, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of Adjusted EBITDA is helpful to our investors as it is a metric used by management in assessing our operating performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measure as a tool for comparison. A reconciliation is provided below for our non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measure and the reconciliation of this non-GAAP financial measure to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

Adjusted EBITDA

(1) Represents non-cash charges associated with stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy.

(2) Amounts relate to M&A-related third-party fees, including related legal, consulting and other expenditures. Additionally, amounts for the three and six months ended June 30, 2025 include $0.1 million and $0.4 million, respectively in non-recurring fair value adjustment of the Skuad contingent consideration liability discussed in Note 3 to our condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q.

(3) Changes in the estimated fair value of the warrants are recognized as gain or loss on the condensed consolidated statements of comprehensive income. The impact is removed from EBITDA as it represents market conditions that are not in our control.

(4) Represents non-recurring costs related to severance and other employee termination benefits.

Critical Accounting Policies and Estimates

For more information, see “Payoneer Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Form 10-K filed with the SEC on February 27, 2025.

Recent Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position, result of operations or cash flows is disclosed in Note 2 to our unaudited condensed consolidated financial statements included elsewhere within this Quarterly Report on Form 10-Q.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have operations both within the United States and globally, and we are exposed to market risks in the ordinary course of our business, including the effects of interest rate changes and foreign currency fluctuations. Information relating to quantitative and qualitative disclosures about these market risks is described below.

PAYONEER GLOBAL INC.

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Interest Rate Sensitivity

The majority of our cash and cash equivalents and assets underlying customer funds were held in cash deposits and money market funds as of June 30, 2025, the fair value of which would not be materially affected by either an increase or decrease in interest rates, due mainly to the relatively short-term nature of these instruments. The fair value of our investments in term deposits and U.S. Treasury Securities, amounting to $1.8 billion, would be affected by changes in interest rates, and such changes could be material.

The Company has entered into interest rate floor contracts with respect to $1.9 billion in customer funds to limit the potential risk declining interest rates would have on our revenues from interest income, though as of the periods ended June 30, 2025 and 2024, respectively, a hypothetical 1% increase or decrease in interest rates could have a material effect on our revenues and earnings.

Foreign Currency Risk

While most of our revenue is earned in U.S. dollars, our foreign currency exposure includes currencies of the countries in which our operations are located, including operating expenses denominated in New Israeli Shekels. To reduce that risk, we invest in foreign currency forward contracts and net purchased options, which are accounted for as cash flow hedges.

A hypothetical 10% strengthening or weakening of the U.S. dollar against the New Israeli Shekel would have had a material impact on unrealized gains (losses) recognized in AOCI at June 30, 2025.

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Our foreign currency exposure also includes currencies in which our customer funds are held, or in which they are withdrawn or utilized, and may be subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro, Japanese Yen, Chinese Yuan, Canadian Dollar, New Israeli Shekel, Philippine Peso, Indian Rupee, Mexican Peso, Pakistani Rupee, South Korean Won, Turkish Lira, New Zealand Dollar, Australian Dollar, British Pound, and Polish Zloty. As of the six months ended June 30, 2025 and 2024, respectively, a hypothetical 10% increase or decrease in current exchange rates could have a material impact on our financial results.

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In addition, some of our services include the opportunity for Payoneer to generate revenues from foreign exchange transactions as part of the payment delivery process. Our ability to generate such revenues is partially dependent on external factors such as market conditions, applicable regulations and our ability to negotiate with third-party financial institutions. The impact of these efforts to optimize foreign exchange can be material to revenues and earnings.

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ITEM 4. CONTROLS AND PROCEDURES

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2025. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective.

During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time we are a party to various litigation matters incidental to the conduct of our business. Refer to Note 15 (Commitments and Contingencies) to the condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

For more information on risks related to litigation, see the section titled “Risk Factors — General Risks Related to Payoneer — We may be subject to various legal proceedings which could materially adversely affect our business, financial condition or results of operations” in our Annual Report on Form 10-K, filed with the SEC on February 27, 2025.

PAYONEER GLOBAL INC.

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ITEM 1A. RISK FACTORS

As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K, filed with the SEC on February 27, 2025. However, we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company did not complete any unregistered sales of equity securities during the three months ended June 30, 2025.

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Share Repurchase Activities

The following table provides information with respect to repurchases made by the Company during the three months ended June 30, 2025. All repurchases listed below were made in the open market.

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(1) No shares were repurchased other than through a publicly announced plan or program.

(2) On May 7, 2023, our Board of Directors authorized a stock repurchase program that provides for the repurchase of up to $80 million of our common stock, including any applicable excise tax. On December 7, 2023, our Board of Directors authorized an amendment to the above program to increase the authorized amount of repurchases to an aggregate amount not to exceed $250 million. The $250 million authorization amended the previous repurchase authorization, and includes the amount that remains available as of December 7, 2023 to repurchase common stock under, but not any prior repurchases effected pursuant to, the previous authorization, and any applicable excise tax. Subsequent to June 30, 2025, our Board of Directors amended the existing repurchase authorization to increase the authorized amount of repurchases to up to $300 million, which amount includes amounts that remained available to repurchase common stock under, but not any prior repurchases effected pursuant to, the existing repurchase program and any applicable excise tax. The effective date of the amended authorization was August 6, 2025, and the amended authorization expires on December 31, 2027. These share repurchases may take place from time to time, in the open market, through privately negotiated transactions or other means, including in accordance with Rule 10b-18 and/or Rule 10b5-1 of the Securities Exchange Act of 1934. The timing and total amount of repurchases is subject to the Company’s discretion.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PAYONEER GLOBAL INC.

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ITEM 5. OTHER INFORMATION

Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements

During the three months ended June 30, 2025, the following officer took the following actions with respect to trading arrangements for the sale of shares of our common stock:

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​ ​ ​ Plans ​ ​

​ Action Date Rule 10b5-1* Non-Rule 10b5-1** Number of Shares to be Sold Expiration

Bea Ordonez, Chief Financial Officer Adoption June 3, 2025 X ​ 100,000 September 30, 2026

* Intended to satisfy the affirmative defense conditions of Rule 10b5-1(c)

** Not intended to satisfy the affirmative defense conditions of Rule 10b5-1(c)

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ITEM 6. EXHIBITS

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

Exhibit No. Description of Exhibit

3.1 Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on June 17, 2025) 3.2 Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed with the SEC on June 17, 2025) 10.1 Supplement and Amendment No. 2 to Transition Agreement with Scott Galit.† 31.1 Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934. 31.2 Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934.* 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** 32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document (104) Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

** Furnished herewith.

† Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish copies of any of the omitted schedules upon request by the Securities and Exchange Commission.

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PAYONEER GLOBAL INC.

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PAYONEER GLOBAL INC. ​

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(Registrant) ​

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By: /s/ John Caplan ​

John Caplan ​

Chief Executive Officer ​

(Principal Executive Officer) ​

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By: /s/ Bea Ordonez ​

Bea Ordonez ​

Chief Financial Officer ​

(Principal Financial Officer) ​

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Date: August 6, 2025 ​

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