Nuvei Corp

TSX:NVEI

Earnings Call Transcript 2020-Q4

[Operator]

Greetings, and welcome to the Nuvei Corporation Preliminary Fourth Quarter Results call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Anthony Gerstein, Vice President, Head of Investor Relations for Nuvei Corporation. Thank you. You may begin.

[Anthony Gerstein, VP & Head of Investor Relations]

Thank you, operator, and good morning, everyone, and thank you for joining us. With me today are Phil Fayer, Chairman and Chief Executive Officer; and David Schwartz, Chief Financial Officer. Before we begin, please note the forward-looking statements included in our press release issued this morning and filed with the Canadian Securities Regulatory Authority. We will be making forward-looking statements on today's call. These forward-looking statements are subject to numerous risks and uncertainties, including those set forth in our filings with the Canadian Securities Regulatory Authority. Actual results may differ materially from any forward-looking statements we make today. These forward-looking statements speak only as of today, and the company does not assume any obligation or intent to update them as except required by law. In addition, the fourth quarter and full year 2020 results discussed today are preliminary unaudited estimates based on currently available information and are subject to change as we complete our year-end accounting procedures and our audited financial statements. As a reminder, we will not be taking any questions on today's call, and expect to report and host a conference call for our audited 2020 results on March 10, 2021.With that, I'd like to turn the call over to Phil.

[Philip Fayer, Chair of the Board & CEO]

Thank you, Anthony, and good morning, everyone, and thank you for joining our call. 2020 was a successful year during which we made progress in our strategic initiatives and executed on multiple growth opportunities.Today, I'm pleased to share with you our preliminary financial results, which for the fourth quarter include a total volume of between $13.8 billion and $14.1 billion, revenue of between $114 million to $118 million, and adjusted EBITDA of approximately $50 million to $52 million. We are pleased with these results, and I'm very proud of the entire Nuvei team that helped make them possible. As you know, Nuvei is a true global payment technology partner to thriving brands. Our purpose is to help make our world a local marketplace. And we do this by providing not only amazing technology, but the intelligence our merchants need to succeed locally and globally as they expand and operate in more countries, all through one simple and single integration.Our performance was driven by our customizable, scalable and feature-rich technology platform, which provides one of the industry's most complete payment technology solutions, going well beyond merchant acquiring. Our technology is built around our 3 cornerstone pillars, including global connectivity; innovation and flexibility; and security and reliability. Around connectivity, we provide a single source to help our merchants operate in more than 200 markets, accept well over 450 different forms of payment as is relevant in those markets, and doing so in more than 150 different currencies. We are continuously and steadfast focused on driving innovation and flexibility, powering our clients to convert more sales, access more local market tools while using these solutions à la carte as appropriate to their unique business model.Finally, we provide security and reliability, helping our clients streamline back-office operations, comply with local regulatory requirements, and manage day-to-day business events around risk, transaction fraud and transaction verifications. Our platform is built so that our clients can focus on their business and their customers. We are a payment technology partner to thriving brands operating around the world, all through one single and simple integration. In addition to our technology, we focus on a very specific vertical that has 3 key elements: longevity, growth and the propensity to operate globally. We operate in high-growth and often complex verticals which require very specific expertise and know-how, effectively creating deep moats around our business and making it more difficult for new entrants. Our vertical focus includes online gambling and iGaming, social games, online retail, marketplaces, digital goods, financial services and travel. Each of these verticals provides longevity. Each has sustainable industry tailwinds and inherent growth, and they all have the tendency to operate around the world, the foundation that we seek for our growth.Looking at our mix, e-commerce represented approximately 80% of our total volume in the fourth quarter, which compares sequentially to 75% in the third quarter and 70% in the second quarter. For the full year 2020, e-commerce accounted for approximately 76% of our total volume. We had some notable highlights in the fourth quarter, including completing the acquisition of Smart2Pay on November 2, and our announcement to acquire Base Commerce, which we completed in January 2021. Both these acquisitions fit our M&A strategy, which includes expanding to new geographies, adding capabilities to our solution set, and increasing our scale. I'll have some closing remarks at the end of the call. I will now turn over to Dave to discuss the financials.

[David S. Schwartz, CFO & Corporate Secretary]

Thanks, Phil, and good morning, everyone. As outlined in our press release and based on preliminary information, we currently expect total volume in the fourth quarter to be between $13.8 billion and $14.1 billion, an increase of more than 50% compared to the fourth quarter of 2019, resulting in total volume for the full year of 2020 of between $43.1 million and $43.4 billion, an increase of more than 70% compared to the full year of 2019.We expect revenue for the fourth quarter to be between $114 million and $118 million, an increase of more than 40% compared to the fourth quarter of 2019, resulting in revenue for the full year 2020 of between $373 million and $377 million, an increase of more than 50% compared to the full year of 2019. Adjusted EBITDA for the fourth quarter is expected to be between $50 million and $52 million, an increase of more than 50% compared to the fourth quarter of 2019, and between $162 million and $164 million for the full year of 2020, an increase of more than 80% compared to the prior year. Operating profit for the fourth quarter is expected to be between $16.5 million and $19.5 million and between $61.4 million and $64.4 million for the full year of 2020. In addition to those expenses deducted to arrive at adjusted EBITDA, operating profit also includes expenses primarily relating to depreciation and amortization, acquisition, integration and severance costs, share-based payments and gains/losses on foreign currency exchange, which are included in selling, general and administrative expenses.In summary, we're very pleased with our fourth quarter results and full year results. I will now hand it back to Phil for some closing comments.

[Philip Fayer, Chair of the Board & CEO]

Thanks, Dave. As Anthony said, we are not going to be taking questions today. And we'll be releasing our final results for the fourth quarter and full year on March 10, as well as hosting a conference call. We continue to make progress on all our strategic initiatives, which I look forward to sharing with you in the upcoming months and quarters. Thank you again for joining us this morning, and have a great day.

[Operator]

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.