Paysafe Ltd (PSFE)

Results of Operations

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

The following table sets forth our results of operations for the years ended December 31, 2025 and 2024:

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Revenue

Revenue decreased by $3,447, or 0.2%, to $1,701,388 for the year ended December 31, 2025 from $1,704,835 for the year ended December 31, 2024. This was driven by a decrease of $52,955, or 5.5%, in our Merchant Solutions segment due to the sale of the direct marketing payment processing business line which contributed to a decline in revenue of $99,166. This decline was partially offset by an increase in revenue due to higher volumes and growth in e-commerce driven by initiatives to expand our sales capabilities and a licensing agreement executed during the year. This was further offset by an increase of $49,222 or 6.4%, in our Digital Wallets segment primarily due to a favorable impact of $33,510 on foreign exchange rates and growth across all verticals, offset by a decrease in interest revenue earned. For further detail on our segments, see “Analysis by Segments” below.

Cost of services (excluding depreciation and amortization)

Cost of services (excluding depreciation and amortization) increased $25,435, or 3.6%, to $741,197 for the year ended December 31, 2025 from $715,762 for the year ended December 31, 2024. The increase is largely attributable to an increase of $25,513, or 11.9% in our Digital Wallets segment mainly due to growth in lower margin verticals in addition to the unfavorable impact of $12,658 on foreign exchange rates. Cost of services (excluding depreciation and amortization) remained relatively flat in our Merchant Solutions segment as the decrease related to the sale of the direct marketing payment processing business were largely offset by increased costs associated with growth in lower margin verticals.

Selling, general and administrative

Selling, general and administrative expenses decreased $11,906, or 2.1%, to $563,647 for the year ended December 31, 2025 from $575,553 for the year ended December 31, 2024. The decrease is primarily driven by a decrease in legal and professional fees of $11,204 due to a decline in consulting fees following the finalization of the portfolio optimization project in the prior year, a decrease in personnel costs of $6,910 due to a decline in performance based compensation, a decrease in share based compensation of $6,230 due to performance awards and awards that vested after December 31, 2024, and a decrease in credit losses of $4,676. The decrease was offset partially by an increase in advertising and promotions of $7,898, and an increase in severance of $3,868.

Depreciation and amortization

Depreciation and amortization increased $743, or 0.3%, to $274,107 for the year ended December 31, 2025 from $273,364 for the year ended December 31, 2024. This was mainly driven by an increase in amortization due to software development costs placed in service during the year ended December 31, 2025, offset partially by a decrease due to fully amortized customer relationships.

Impairment expense on goodwill and intangible assets

Impairment expense on goodwill and intangible assets increased by $600 or 72.9%, to $1,423 for the year ended, December 31, 2025 from $823 for the year ended December 31, 2024. The increase is mainly driven by impairment expense of $638 related to the right of use asset for a leased office space following the disposal of the direct marketing business line for the year ended December 31, 2025. The remainder of the expense for December 31, 2025 and 2024 relates to specifically identified software development costs which had no future economic benefit.

Restructuring and other costs

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Restructuring and other costs increased $43,188, or 834.1%, to $48,366 for the year ended December 31, 2025 from $5,178 for the year ended December 31, 2024. This was driven by an increase in other costs of $36,868 primarily attributable to higher legal cost related to the securities litigation involving the Company and indemnities provided by the Company in a related class action lawsuit, as well as higher transformation costs of $7,090 associated with projects to improve merchant platforms as well as finance and risk processes.

Loss on disposal of subsidiaries and other assets, net

Loss on disposal of subsidiaries and other assets, net remained relatively flat at $732 for the year ended December 31, 2025. This was a result of an increase in the loss on disposal of non-financial assets, which was offset partially by a gain on disposal of the direct marketing payment processing business line.

Other income, net

Other expense, net changed $29,038, or 135.2%, to an expense of $7,563 for the year ended December 31, 2025 from an income of $21,475 for the year ended December 31, 2024. The change was primarily driven by a foreign exchange loss of $9,758 in the current year compared to a foreign exchange gain of $11,316 in the prior year, a fair value loss on derivative instruments of $1,294 compared to a gain of $3,994 in the prior year, and a decrease in other gains of $3,196 mainly related to a release of a goods and services tax provision of $4,120 due to the statute of limitations.

Interest expense, net

Interest expense, net decreased by $4,391, or 3.1%, to $136,414 for the year ended December 31, 2025 from $140,805 for the year ended December 31, 2024. The decrease in interest expense, net was mainly due to the benefit of decreased effective interest rates.

Income tax expense / benefit

Income tax expense was $110,446 for the year ended December 31, 2025 compared to an income tax benefit of $8,136 for the year ended December 31, 2024. The increase in the income tax expense is a result of the recognition of a valuation allowance related to our recoverability of deferred tax assets on tax losses and restricted interest carryforwards in the UK and tax losses in the US during the year ended December 31, 2025, offset by an income tax benefit due to the release of a valuation allowance in Canada.

The effective tax rate for the year ended December 31, 2025 and 2024 was (153.3)% and (58.0)%, respectively. The change in the effective tax rate for the year ended December 31, 2025 compared to year ended December 31, 2024 primarily arises as a result of movements in the valuation allowance as described above. A reconciliation between the statutory income tax rate and the income tax benefit / provision reported in the Consolidated Statements of Comprehensive (Loss) / Income is summarized in Note 3, Taxation, within Item 18, Financial Statements included elsewhere in this Report.

Net income / (loss)

The Company had a net loss of $182,507 for the year ended December 31, 2025 compared to a net income of $22,160 for the year ended December 31, 2024. The net loss was largely driven by the increase in income tax expense compared to an income tax benefit in the prior year, an increase in restructuring and other costs, an increase in other expense, net compared to other income, net in the prior year and an increase in cost of services (excluding depreciation and amortization). This is offset partially by a decrease a decrease in selling, general and administrative expenses.

Non-GAAP financial measure

Adjusted EBITDA

Adjusted EBITDA for the Company decreased by $23,206, or 5.1%, to $428,848 for the year ended December 31, 2025 from $452,054 for the year ended December 31, 2024. This decrease was primarily driven by increased cost of services of $25,435, offset partially by a decrease in selling, general and administrative expenses, excluding share-based compensation cost of $5,676 as described above. For further explanation on the year-over-year change on these financial statement line items, please refer to the commentary above in “Results of Operations.”

A reconciliation of Net (loss) / income to Adjusted EBITDA is as follows for the years ended December 31, 2025 and 2024:

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(1)
For the year ended December 31, 2025, restructuring costs were $8,322, mainly consisting of transformation costs associated with projects to improve merchant platforms as well as finance and risk processes, and other costs were $40,044, which primarily consisted of legal costs associated with the securities litigation involving the Company and other indemnified parties. For the year ended December 31, 2024, restructuring costs were $2,582, and other costs were $2,596, which primarily consisted of legal costs.

(2)
For the year ended December 31, 2025, other expense / (income), net includes a loss on foreign exchange of $9,758 and a fair value loss on derivative instruments of $1,294. This was partly offset by a fair value gain on warrant liabilities of $1,401, other gains of $1,580 and a fair value gain on contingent consideration of $508. For the year ended December 31, 2024, other expense / (income), net includes a gain on foreign exchange of $11,316, a gain on derivative instruments of $3,994, gains on debt repurchases of $1,696 and other income of $4,776.

Analysis by Segment

We operate in two operating segments: Merchant Solutions and Digital Wallets. Our reportable segments are the same as our operating segments. Segment Adjusted EBITDA is reported to the Chief Operating Decision Maker for purposes of making decisions about allocating resources to the segments and assessing their performance. Segment Adjusted EBITDA includes the revenues of the segment less operating expenses that are directly related to those revenues and an allocation of shared

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