Image source: The Motley Fool.
Date
Wednesday, Nov. 5, 2025 at 8:30 a.m. ET
Call participants
Chief Executive Officer — John R. Caplan
Chief Financial Officer — Beatrice Ordonez
Need a quote from a Motley Fool analyst? Email [email protected]
Takeaways
Revenue -- $271 million, up 9% year over year for Q3 2025; revenue excluding interest income was $211 million, up 15% year over year, both marking record quarters.
Adjusted EBITDA -- Adjusted EBITDA was $71 million in the quarter, representing a 26% margin; adjusted EBITDA excluding interest income was $12 million.
Customer funds -- $7.1 billion held on platform as of Q3 2025, a 17% increase year over year for the second consecutive quarter.
Interest income -- Interest income of $60 million was earned in the quarter; sensitivity to short-term interest rates was reduced on $3.7 billion, or 52% of customer funds, via U.S. Treasury investments and derivatives as of September 30, 2025.
ARPU (Average Revenue per User) -- ARPU increased 15% in the quarter, and ARPU is up 65% since Q1 2023, driven by upmarket movement and product bundling; ARPU rose from $286 in Q1 2023 to over $470 in the most recent quarter.
Volume -- Total payment volume was up 9% year over year. SMB volume grew 6% year over year. Marketplace SMB volume grew 4% year over year. B2B SMB volume rose 11% in the quarter; enterprise payout volume increased 19% year over year, aided by key new customer onboarding.
Take rate -- 121 basis points for Q3 2025, remaining roughly flat year over year despite a $6 million headwind from lower interest income.
SMB take rate expansion -- Increased 12 basis points year over year in Q3 2025 and 1 basis point sequentially.
Share repurchases -- $45 million of shares repurchased in Q3 2025 at a weighted average price of $6.73; $273 million remains authorized for further repurchases as of September 30, 2025.
Cash position -- $479 million in cash and cash equivalents at quarter end; operating cash flows significantly outpaced net income.
Guidance update -- Full-year 2025 total revenue guidance raised to $1.05 billion-$1.10 billion; interest income guidance raised by $10 million to $235 million; adjusted EBITDA guidance is now $270 million-$275 million at a 26% margin midpoint.
Expense trends -- Operating expenses rose 10% in Q3 2025; transaction costs of $42 million increased 12% and represented 15.7% of revenue; sales and marketing expense grew $7 million or 14%; R&D expense up $5 million or 15%; G&A expense up $6 million or 22%.
Strategic customer shift -- Multi-entity customers transacting over $250,000 per month now represent nearly 30% of revenue excluding interest, up from 20% in Q1 2023, and are growing faster than the rest of the portfolio.
Hedging program -- $120 million of 2026 interest income secured regardless of short-term rate movements; hedged amounts in 2027, 2028, and 2029 specified to provide durable revenue streams.
Product usage -- Over 50% of account spend comes from customers using three or more AP products.
Summary
Payoneer Global (PAYO 10.28%) reported continued growth across key financial and operational metrics in Q3 2025, highlighted by double-digit year-over-year increases in core revenue and customer funds held on the platform. Management signaled a deliberate migration toward serving larger, more profitable multi-entity clients, which now deliver a growing share of total revenue and demonstrate superior retention and ARPU. The company revealed it has locked in substantial future interest income through explicit hedging actions, insulating a significant portion (approximately 52%) of customer funds from short-term rate volatility for several years. Operational leverage continues to improve as transaction cost ratios held near 20% of revenue excluding interest income over the past two years, despite increasing adoption of higher take-rate products. Updated 2025 guidance reflects upward revisions to total revenue, interest income, and adjusted EBITDA, with management expressing confidence in sustaining profitability improvements and cash generation.
Beatrice Ordonez said, "ARPU has increased 65% since 2023, from $286 to over $470."
CFO Ordonez detailed that Payoneer hedged interest rate exposure on 52% of customer funds through a combination of U.S. Treasuries and derivatives, explicitly stating, "we have secured approximately $120 million of 2026 interest income regardless of moves in short-term interest rates."
Enterprise payout volumes outpaced overall company growth, rising 19% year over year, and reflecting both strong travel sector demand and the impact of new customer acquisition.
The company is actively leveraging partnerships—including with Stripe and Mastercard—to optimize transaction economics and increase platform utility.
With a $300 million buyback authorized, $45 million in repurchases executed, and $479 million in cash, capital allocation remains a strategic lever for shareholder return.
Industry glossary
ARPU (Average Revenue per User): The average revenue generated per active customer account over a defined period, a key metric for platform monetization trends.
AP (Accounts Payable) products: Payment solutions allowing businesses to pay vendors, suppliers, or employees, including cards, payout solutions, and workforce management services, integrated within Payoneer's platform.
ICPs (Ideal Customer Profiles): A segmentation framework used by Payoneer to identify and target customer cohorts with desirable characteristics such as high volume and profitability, notably those with multi-entity operations.
Take rate: The ratio of net revenue to total payment volume processed, indicating the average fee or margin earned on transaction activity.
Full Conference Call Transcript
John R. Caplan, and Chief Financial Officer, Beatrice Ordonez. Before we begin, I would like to remind you that today's call may contain forward-looking statements, which are subject to risks and uncertainties. For more information, please refer to our filings with the SEC, which are available in the investor relations section of payoneer.com. 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 except as required by law. In addition, today's call may include non-GAAP measures. These measures should be considered in addition to and not in lieu of GAAP financial measures.
Reconciliations to the nearest GAAP measure can be found in today's earnings material, which are available on our site. Additionally, please note we have posted an earnings presentation supplement alongside our earnings press on investor.payoneer.com. All comparisons made on today's call are on a year-over-year basis unless otherwise noted. With that, I would like to turn the call over to John to begin.
John R. Caplan: Good morning, and welcome to Payoneer Global Inc. Q3 2025 earnings call. Payoneer Global Inc. is a global payments and financial operating platform built on durable infrastructure. Together, our technology, strategic relationships, and regulatory framework form the moat we have built over twenty years. Our mission is straightforward: We remove the friction between an entrepreneur's ambition and their achievement by delivering a secure, easy-to-use, and trusted financial platform built for global commerce. Our strong Q3 and year-to-date results reflect consistent execution against our strategic priorities in a massive, fragmented, cross-border payments market. Our results give us confidence in our long-term opportunity even as we navigate short-term volatility.
We are evolving our business to be on offense as global trade evolves, supply chains adapt, and as innovations in money movement continue to gain momentum. I will share our progress, where we are investing, and how we are positioning Payoneer Global Inc. to win. Beatrice will then walk you through our financials and increased guidance for 2025. In 2023, when I became sole CEO and Beatrice joined as CFO, Payoneer Global Inc. generated mid-single-digit revenue growth excluding interest.
Beatrice Ordonez: Adjusted EBITDA excluding interest was negative. Our priority at the time as a new management team was on reigniting growth and resetting the business for durable profitability. Two and a half years later, we have delivered record Q3 results and are raising our 2025 guidance. Q3 revenue excluding interest was up 15%, and we have delivered seven consecutive quarters of mid-teens or greater growth, in line with or exceeding our stated targets. We have delivered six consecutive quarters of positive adjusted EBITDA excluding interest, including $12 million in Q3. Our total adjusted EBITDA margin was north of 25% in 2024 as well as in 2025.
The strength and consistency of our results in an evolving macro backdrop underscore our successful execution as we deliver for customers. So a few highlights. First, improved unit economics and higher quality customer portfolio. We are moving from casting a wide net to prioritizing quality. We define quality as larger, more complex customers with scale, ambition, and global reach. And we are focusing on industries and countries where we have the strongest product market fit. We are exiting customers that do not meet our risk tolerance or desired economics. We are driving meaningful ARPU growth as we move upmarket and as we deliver segment-specific pricing and product bundles. ARPU has increased 65% since 2023 from $286 to over $470.
In our long tail segment, we have raised prices and tightened product access, and the cohort is now profitable.
John R. Caplan: We are focusing our acquisition efforts, service model, and product roadmap to capture and serve larger customers, especially multi-entity customers. ICPs receiving over $250,000 a month in volume represented nearly 30% of our Q3 revenue excluding interest and are growing significantly faster than the rest of the customer portfolio. The higher quality of our customer portfolio is evident. You will note that total ICP counts have been roughly flat year over year, while we have delivered consistent mid-teens revenue growth excluding interest. Our focus on larger 27% in Q3 now represents roughly 30% of revenue excluding interest, up from 20% in Q1 2023. Our platform solves for the complex AR and AP needs of global businesses.
Our AP capabilities are built on infrastructure, licenses, and compliance trusted by large global enterprise partners, and we are making these capabilities available to global SMBs. In B2B, we are also focusing our acquisition efforts on larger customers. More than 50% of B2B revenue came from ICPs doing more than $150,000 per month in volume, and the average invoice size in our B2B franchise increased mid-teens percentage year over year. Third, our customers have shown that the ability to hold balances across currencies in their Payoneer Global Inc. account is a core Payoneer Global Inc. value proposition. As such, the interest we earn on those balances represents a core component of our economics.
Ending Q3, customers held over $7 billion on our platform, up 17% year over year, for the second straight quarter. This demonstrates both the trust our customers have in our platform and the accounts payable utility that we provide. Together, this drives our revenue. We monetize customer funds through interest income and transaction fees as funds leave the Payoneer Global Inc. account, either when a customer withdraws to their local bank account or spends via Payoneer Global Inc.'s AP products. Customer funds have grown in excess of volume year to date and represent substantial future revenue as customers deploy their funds.
We have protected a substantial portion of our interest income over the next three years through hedging programs, which Beatrice will discuss in more detail. Our customers turn to Payoneer Global Inc. as they grow their businesses globally, and we are investing in our platform to deliver more value for them. We continue to drive multiproduct adoption as we increase the utility of the Payoneer Global Inc. account and move away from being, quote, a tollbooth on the money highway, unquote. Over 50% of Payoneer Global Inc. account spend is now coming from customers who use three or more AP products, up 200 basis points year over year.
Customers are increasingly using Payoneer Global Inc. as their central account to manage their business network payments and shifting to our card to pay for cross-border expenses. We are expanding the Payoneer Global Inc. account ecosystem and the services we provide to customers through strategic partnerships. Here's one example. We are partnering with a third-party lender to expand access to capital for our customers in a capital-efficient and tech-enabled way. On stablecoins and blockchain, the rails are evolving, and we are evolving our platform to capture the opportunity. Just as when Payoneer Global Inc. started, global businesses need multicurrency wallets and interoperability between different currencies and stores of value.
Our strategy is to orchestrate across payment schemes and rails so cross-border businesses can focus on growth without compromising on safety or convenience. We are making steady progress on these efforts. We are now using Citi's on-chain money movement capabilities to move hundreds of millions of dollars quarterly, allowing us to manage liquidity even more efficiently. For customers, we are working on offering stablecoin wallet functionality in 2026. In summary, what you can expect from us going forward: one, relentless focus on profitable growth, guided by a refined portfolio segmentation across region, vertical, use case, product, and unit economics. We do what is best for the long-term health of the business every single day.
Two, expansion of core operating margin as we focus on unlocking the meaningful leverage we see in our business over the long term. Three, prudent capital allocation as we fund innovation, pursue selective M&A, and return capital to shareholders via repurchases. We have nearly $500 million of cash and generated roughly $50 million of operating cash flow in Q3. In July, our Board approved a $300 million buyback, and we are executing with intent. We repurchased $45 million of shares in Q3. I am proud of the progress the global Payoneer Global Inc. team has made this quarter and year to date to deliver for our customers.
We remain confident in the secular drivers supporting our long-term opportunity and believe our platform and competitive moat position us well to generate long-term durable, profitable growth. I will now hand it over to Beatrice to walk through the numbers and our increased guidance for 2025.
Beatrice Ordonez: Thank you, John, and thank you to everyone for joining us. Payoneer Global Inc. delivered another strong quarter with record quarterly revenue, 15% revenue growth excluding interest income, and adjusted EBITDA ahead of our medium-term targets. In a dynamic global macro environment, we grew volumes, expanded ARPU, increased our SMB take rate, and improved our core business profitability. We are increasing our full-year 2025 guidance and are well-positioned to capture the significant long-term opportunity ahead of us. Now turning to our third-quarter results. We delivered revenue of $271 million, up 9% year over year, and our highest ever quarterly revenue. Revenue excluding interest income reached $211 million, also a quarterly record and up 15% year over year.
Our strong growth was driven by our B2B increasing adoption of our high-value products and services such as checkout and card and the ongoing implementation of our pricing and fee initiatives. ARPU increased 15% in the quarter and excluding interest income was up 22%. Since Q1 2023, we have increased total ARPU by 65%. This is a direct result of our multifaceted growth strategy. To move upmarket, drive cross-sell of our higher-yielding AP products, prioritize growth in our highest take rate geographies, increase the value of our SMB grade services by expanding our financial stack, and refine our pricing and monetization strategies to capture the value we provide to our customers. Total volume was up 9% year over year.
SMB volume grew 6% year over year, with volume from SMBs that sell on marketplaces up 4%. Volume from B2B SMBs up 11%, and checkout volume up 46%. All consistent with the outlook we provided during our second-quarter call in August. Enterprise payout volume increased 19% year over year above our expectations primarily due to strong demand in key travel routes we serve and the onboarding of a new enterprise customer. Our Q3 take rate of 121 basis points was roughly flat on a year-over-year basis despite a $6 million headwind from lower interest income.
We continued to drive significant expansion in our SMB customer take rate, which increased 12 basis points over the prior year period and one basis point sequentially. Customer funds held by Payoneer Global Inc. increased 17% year over year to $7.1 billion, partially offsetting the impact of lower rates on our interest income revenue. We generated interest income of $60 million in the quarter. Customer balances reflect the trust our customers place in our platform and the value they place on the utility we provide. They also represent future revenues that will be realized as customers utilize our AP products.
The Payoneer Global Inc. account gives customers the ability to manage balances in multiple currencies and to choose how, when, and in which currencies to use those balances. These are important aspects of the value we provide to customers, and our interest income revenue is a direct outcome of this. As of September 30, we had reduced our sensitivity to fluctuations in short-term interest rates in relation to approximately $3.7 billion or roughly 52% of customer funds. This consists of approximately $1.8 billion of assets underlying customer funds that are invested in a portfolio of U.S.
Treasury securities and term-based deposits as well as interest rate derivatives on approximately $1.9 billion of funds underlying customer balances providing a floor against interest rate declines below 3%. Through these programs, we have secured approximately $120 million of 2026 interest income regardless of moves in short-term interest rates. Approximately $80 to $85 million in 2027 and 2028, and approximately $60 million in 2029. Additional amounts will be locked in based on ongoing reinvestment as the portfolio runs off, and these positions provide a durable and sustainable revenue stream.
We continue to expect that customer balances should broadly grow in line with volumes over time and that our unhedged balances will predominantly be subject to prevailing short-term interest rates mainly in the US. We will continue to actively manage our hedging programs while always prioritizing liquidity and security. Total operating expenses of $235 million increased 10%, primarily driven by increases in labor-related expenses, higher transaction costs, incentives, and other spend designed to drive card adoption and usage, and the effect of our EZ Link acquisition in China and our workforce management acquisition. Transaction costs of $42 million increased 12%, the lower growth in revenue excluding interest income.
Transaction costs represented 15.7% of revenue, an increase of approximately 40 basis points from the prior year period primarily due to lower interest income. Excluding interest income, transaction costs represented 20.1% of revenue, a decrease of around 70 basis points versus that prior year period, despite a mix shift towards higher take rate, higher transaction cost products, driven by improved operational efficiency. We see transaction costs as a key aspect of our opportunity to continue to unlock operating leverage. When excluding interest income, transaction costs have been roughly stable over the past two years at approximately 20% of revenue, even as we shift towards higher-yielding products.
We are optimizing our transaction cost economics by using our scale to negotiate with our partners, by deepening our strategic relationships and partnerships, including those with Stripe and with Mastercard announced in August, by improving the efficiency of our money movement and treasury operations. Over time, we expect through our ongoing blockchain-related initiatives. As we continue to grow and scale our business, we are confident that the durable, highly profitable nature of our transaction-based revenues should enable us to continue expanding our core business profitability. Sales and marketing expense increased $7 million or 14%, primarily due to higher labor-related costs and increased incentives related to our card offering.
G&A expense increased $6 million or 22%, primarily due to higher labor-related costs, including from our workforce management and EZ Link acquisition, higher facilities costs related to our offices in Israel, and higher legal and consulting fees, including relating to our application in India. R&D expense increased $5 million or 15%, primarily due to higher labor-related costs, while other operating expenses decreased by $5 million or 10%, primarily due to lower IT and communication costs. Adjusted EBITDA was $71 million, representing a 26% adjusted EBITDA margin in the quarter.
We generated $12 million of adjusted EBITDA excluding interest income, and year to date we have generated approximately $27 million of adjusted EBITDA excluding interest income, nearly double the amount we generated on a full-year basis for 2024. We are unlocking leverage through growth, managing our transaction costs, and being disciplined with OpEx. We believe we have a significant opportunity to continue to increase the profitability of our business. Net income was $14 million compared to $42 million in the third quarter of last year.
While income before income taxes grew 38% year over year, net income in the prior year period included a $19 million income tax benefit largely derived from a federal tax deduction for 2024 and for the prior year for income earned from foreign customers, and lower foreign tax expense related to stock-based compensation. Basic and diluted earnings per share were both $0.04, down from basic earnings of $0.12 and diluted earnings of $0.11 per share in the prior year period, largely due to the impact in the prior year period of the discrete income tax benefit just noted. We ended the quarter with cash and cash equivalents of $479 million.
Our operating cash flows continue to significantly exceed net income, allowing us to continue to invest for profitable growth and to return capital to shareholders. During the quarter, we repurchased approximately $45 million of shares at a weighted average price of $6.73. As of September 30, we had approximately $273 million remaining on our current share repurchase authorization. Turning now to our increased 2025 guidance. We expect total revenue between $1.05 billion and $1.10 billion, an increase of $10 million at the midpoint relative to the guidance we issued in August. This includes interest income of $235 million and $815 million to $835 million of revenue excluding interest income.
We are increasing our expectations for interest income by $10 million to reflect robust growth in customer funds. In 2025, customer funds have grown significantly in excess of volume and above our expectations, at 11% year over year in Q1 and 17% for both Q2 and Q3, reflecting the trust and value our customers place in our platform and partially offsetting the impact of lower interest rates. We are reiterating our expectations for revenue excluding interest income of $815 million to $835 million. This reflects the current macro and trade environment and our view of the range of outcomes that this environment could imply, especially as we enter the holiday spending season.
For the fourth quarter, we expect marketplace volumes to be flat to up mid-single digits and B2B volumes to grow mid-teens. For the full year, we expect transaction costs as a percentage of revenue to be 16%, a 50 basis point reduction compared to our prior guide, and a 200 basis point reduction versus the guidance we provided at the beginning of the year. We expect 2025 adjusted OpEx, which represents our guidance for revenue, less adjusted EBITDA and transaction costs, of approximately $618 million at the midpoint of our adjusted EBITDA guidance range. We are raising our expectations for adjusted EBITDA to be between $270 million and $275 million, representing a 26% margin at the midpoint.
While we see a broad range of potential outcomes on the top line, we are focused on what we can control. We expect to continue to deliver growing profitability through optimizing our transaction cost economics and managing OpEx. Excluding interest income, we expect adjusted EBITDA of $38 million at the midpoint, almost three times the amount generated in 2024. We are making meaningful progress in evolving our business to capture the significant long-term growth opportunity. Behind our strong headline results is a healthier, higher quality, and more durable customer portfolio.
We are capturing and growing our business with larger customers, improving our risk profile, unlocking robust operating leverage, making strategic investments, generating substantial cash flow, and positioning the company to create long-term shareholder value. We are now happy to answer any questions you may have. Operator, please open the line.
Operator: Thank you. We will now begin the question and answer session. We ask that you please limit yourself to one question and one follow-up. If you would like to ask a question, please press star then the number one on your telephone keypad. Thank you. First question comes from Mayank Tandon from Needham and Company. Your line is open.
Mayank Tandon: Thank you. Good morning. Congrats on the quarter. I know you are not going to probably give guidance for 2026, but just as you think about the business momentum, John and Beatrice, I was curious if you could share any sort of insights into what your might be for the sustainability of some of the key metrics around volume, take rate, also if you could remind us of any sort of seasonal impact that we should factor in as we lay out our quarters for 2026?
Beatrice Ordonez: Sure, Mayank. So thanks for the look. I think what we were looking to convey in the prepared remarks is really, you know, exactly to your point, the sustainability and the durability of the growth we are creating. The business performed very well in the third quarter, very much in line with the commentary that we provided in August. Our full-year guidance, which we are raising as we said, we are raising both revenue and EBITDA guidance is in line with the medium-term targets we communicated back in 2023, even with what I think everyone would acknowledge is a pretty dynamic macro. So overall, business is performing really well and performing really well in a sustainable way. Right?
ARPU has been consistently growing above 20% for I think now five quarters. We are continuing to deliver SMB take rate expansion from that multifaceted strategy that we outlined. We are really building, in our view, a healthier, more durable, and sustainable customer portfolio, and it is showing up in the metrics. So overall, look, to your point, we are not giving guidance to next year, but we see the business really performing well. We see a resilient business, a healthier business, with a lot of momentum and opportunity in front of us.
John R. Caplan: Yeah. I would just add to Beatrice's remarks that, you know, the strength in the portfolio as we move upmarket is evident. Those $250,000 a month customers that are growing exceptionally well, 30% of our Q3 revenue overall, 50% of the B2B revenue. The strength of that portfolio and the opportunity there is really bold. And we are going after it. We are focused on it. We believe we have the product for those customers. And as the shape of the portfolio moves upmarket, the profitability dynamics are unlocked in our business. So we feel really good about where we are.
Mayank Tandon: Got it. That is very helpful. And maybe if I could just follow-up with a question, John, around sort of your investments in sales capacity. And I asked that in terms of as you diversify the business, over time, you know, from China into other markets. As you grow ICPs, as you look to cross-sell, upsell, into your base, how is your go-to-market strategy changing, if at all, if you could share any insights into your investments in sales and your overall approach to attacking the market?
John R. Caplan: Yeah. That is a great question and an exciting part of the evolution of Payoneer Global Inc. The majority of our customers are acquired organically, as you know. Right? They come to the application or through our website. And if we get millions of applications annually, so we sift through those to find look-alikes of our best customers. And then alongside of that are partnerships we are putting in place with resellers, affiliates, and others around the globe in the key hubs of activity for the multi-entity entrepreneurs of the globe. So this is, I think, a very exciting engine of our growth looking forward because it helps us bring in bigger, higher quality customers.
And when you look deep into our portfolio, the volume retention, net revenue retention data of our largest customers is the best in the portfolio. And so moving to focus on acquiring those customers in the hubs around the world where they exist gives us, I think, a leg up in the market. And we have, obviously, select paid acquisition and lead generation underway, but we are a loved and well-known brand that is trusted by partners. You know, the brand scores we get are exceptionally good.
And when we host events, you know, hundreds or thousands of people come to learn about what Payoneer Global Inc. has to offer and why we are helping people bridge their ambition to their achievements. So we feel good about the go-to-market effort. You know, we are focused on not the total number of customers, but the quality of them. And we are moving the portfolio deliberately upmarket. You saw in our results the 10k plus customers' revenue was up 18%, volume was up 7% despite the count coming down a bit. And that is a deliberate effort on our part as we monetize intranet work volumes.
We are $4 million a quarter of monetization there, which is the beginning of something we think very exciting, and the exit customers that do not fit our profitability and growth targets.
Mayank Tandon: Great. Thank you so much for taking my questions.
Operator: Your next question comes from the line of Sanjay Sakhrani with KBW. Your line is open.
Sanjay Sakhrani: Thank you. Good morning. John, you guys talked about a dynamic macro. Maybe you could just drill down a little bit on what you are seeing with the SMBs on your platform and how they are reacting to all these day-to-day fluctuations in policy?
Beatrice Ordonez: Yeah. Thanks, Andrew, for the question. Look. I think, you know, in terms of the Q3 performance of the business, which as we said has been robust, is very much in line not only with the medium-term targets but with the commentary we shared back in August. Volume consistent with that commentary. Revenue performance consistent with that commentary. It is obviously difficult to quantify, sort of what the tariff impact is and all of those moving parts, you know, from the volatile nature of the tariffs to how timing in around shipping and stocking can impact. But we are likely seeing an impact on marketplace volumes from tariffs.
Certainly, our discussions with our customers in China suggest that there is an impact. Obviously, those customers are resilient as we have pointed out in the past, and they are deploying all manner of strategies to really sort of continue to grow their business, whether that is logistics strategies, globalization strategies, pricing, and so on. So there are always many factors. Look. At in October, we saw what I would call a modest softening in volumes versus our expectations. Obviously, October is not at all a good proxy for the E-Com Heavy, China-heavy e-com season that is coming in November and December. Golden week is in October. Obviously, that e-com holiday spending season is both China-heavy and goods-heavy.
So we are seeing those tariffs impacts get absorbed through the portfolio. And the guidance we have laid out for Q4 really sort of incorporates it in line, as I say, with sort of what we expected in Q3, that broad range of outcomes from those potential sort of shifts and dislocations that we are seeing sort of frankly across trade routes and chain routes and so on.
Sanjay Sakhrani: Okay. Helpful. And then, John, you talked about stablecoins and its availability on your platform in 2026. I am just curious, like, are your customers asking you for this technology? And maybe you could just talk a little bit about the evolution of your revenue model to the extent there is any if you provide this technology? Thanks.
John R. Caplan: Sure. And I will add some dimension and then, Beatrice, please jump in. We see stablecoins as a really interesting long-term opportunity for Payoneer Global Inc., and we are exploring it with intent. And similar to how we built the financial stack on our network of bank and payment providers over the last twenty years, to facilitate the movement of money around the world, we really believe that tokenized assets and the distributed ledger technology could be another component of what we have already put in place and in the market. It is really the core essence of the value prop we provide to those entrepreneurs.
Beatrice Ordonez: Is being able to operate in whatever currency they want to use to run their business. But we all know that you cannot buy a hammer in Ho Chi Minh City with an Argentinian peso today. So we need the world, you know, for the stablecoin technology and those rails to be turned into mainstream B2B use cases, companies like Payoneer Global Inc. are purpose-built to turn tradable assets into commercial, and we feel very excited about what our role in that can be. So we expect adoption corridor use corridors use specific use cases to develop as our customers explore the impact in their own businesses and how it can both remove payment friction and create opportunity for them.
If we look at over five years, I am excited about what that traction can mean, we are paying your sits. I think people misunderstand how valuable the Payoneer Global Inc. platform is to turning the promise of stablecoins into a reality, and we are in a very disciplined, organized way pursuing it. But, Beatrice, if you would like to add, go ahead.
Beatrice Ordonez: I mean, I think yes to all of that. I would add a couple of sort of additional points. You know, in terms of adoption use case demand, I think there are sort of multiple lenses. One of them is certainly sort of a regional lens. As we think of regions that have high inflation and stability locally, and who today use Payoneer Global Inc. and other such platforms to basically dollarize, right, to hold dollars as a hedge against local instability. The ability to hold dollars in a different or tokenized asset or in a different store of value is by definition valuable to them as well.
So I think the stablecoin opportunity dovetails really nicely with the core utility or one of the core utilities that we already provide. And against the broader payment scheme sort of landscape as we see really more of a fragmented payment scheme regional players, regional payment schemes coming up, increasingly mobile-first, local schemes. Really, the name of the game in the cross-border space is to neatly, cleanly, and efficiently orchestrate across all of those payment schemes, and stores of value like Stablecoin are one such scheme. Right? So we view it as very sort of tightly coupled to our money movement, evolution, and strategy overall.
And we are seeing sort of use cases develop as customers to John's point really are able to explore the real-time benefits and programmability potential around their own use cases and business in the corridors where it begins to become available.
Operator: Your next question comes from the line of Trevor Williams with Jefferies. Your line is open.
Trevor Williams: Hi, guys. This is Ryan on for Trevor. Thanks for taking the question. Just wanted to ask on take rate. Looks like that has been pretty healthy here. Just wanted to see what you guys think about the sustainability of that take rate expansion. Of break down what the core drivers have been in that strength? Thank you, guys.
Beatrice Ordonez: Yeah. Thanks for the question, Ryan. Look. At we appreciate the call out. Right? I think of the many, many where we are seeing really sustainable performance, it is in the take rate dynamics. Right? We have demonstrated the ability to continue to drive that take rate expansion in our SMB business, and excluding interest income, we have grown it by 12 basis points in the quarter. Right? And there are numerous levers within that and numerous inputs. One is certainly the growth of our B2B business, which is outpacing the growth of the business as a whole, as John pointed out in his prepared remarks. That B2B revenue is about a third now of our core revenue.
And it grew 27%. Right? So that is driving some of that uplift. Beyond that product adoption, right, as we continue to drive adoption of our card product, of checkout, of our invoicing service within B2B, of our workforce management product, that is also providing uplift. And then ultimately, pricing, right, as we continue to refine and optimize our pricing strategy. So we are seeing take rate expansion across our business lines. From our marketplace business to our B2B business. In B2B, look, we will see some moderating of increase going into Q4 as we lap workforce management.
But still comfortably ahead of that, volume across the book and really demonstrating that expanding value that we are providing to our customers and the take rate expansion that goes along with that.
Trevor Williams: Understood. That all makes sense. Thank you. And then just as a follow-up on B2B volume, I think the prior expectation had been to get to high teens B2B volume growth by 4Q. I just wanted to see if that was still the expectation. And if so, I guess, what is the level of visibility in what are the main drivers into that acceleration into 4Q?
Beatrice Ordonez: No. Thanks for the question. That is still the expectation. So the B2B business as I have said performed in line in Q3. We grew volume 11%. We grew revenue 7%. Coming into the back half of the year, we expect that volume to increase mid-teens, and we expect the revenue increase somewhere between 20-25%. So for the full year, the B2B business is going to generate approximately 25% year-over-year revenue growth. That is really robust growth in a sustainable and growing part of our business. We have good visibility into that business. We obviously are, as John has noted, really moving upmarket and bringing in acquiring, and serving larger customers with more predictable business models.
So we feel good about how that business is performing. We are making investments in that business both in the go-to-market motions that serve it, as John has noted, with partners and affiliates. In the product roadmap that really sort of delivers that SMB grade experience. And in the service model to make sure that we are driving the improving retention that we are seeing. So we feel really good about that business. It is moving upmarket. It is healthier. It is more profitable, and it is growing really nicely.
Trevor Williams: Great. Thank you, guys.
Operator: Next question comes from Nate Vincent with Deutsche Bank. Your line is open.
Nate Vincent: Hi, guys. Really nice to see the continued progress here. I guess, first, I wanted to ask on the growth in customer funds. Obviously been really impressive, two quarters of 17% growth. And I think you have been pretty clear that this is a core part of the Payoneer Global Inc. value proposition. Sounded like going forward, you think balances will grow in line with overall volumes. But they have clearly been growing above that recently. So I am maybe just wondering how much more room we have to run in this environment where maybe balances can continue to grow faster than volumes?
And then qualitatively, I know you talked about things like trust in the platform, but maybe you can talk more specifically about what you are doing to drive or incentivize clients to keep more funds on the platform.
Beatrice Ordonez: Yeah. Appreciate the question, Nate. So look, you know, historically, we have certainly called out that our expectation over sort of a long enough time horizon is that we are able to grow balances in line with volume into the platform. We have seen outperformance this year. There are likely many factors, some of that macro volatility, especially around the corridors as well as relative weakness and volatility in the dollar that can impact kind of near-term usage behavior. So I think we are seeing sort of some of that the kind of cyclicality that you see.
Obviously, we love seeing that number grow, right, not only because it demonstrates to your point the trust, but because it is future revenues in effect when the customers utilize those balances using one of our AP products. That is revenue that comes to us in future periods, future quarters. So we like to see this growth and obviously, monetize it in the short term. What are we doing? Look, really, it is very much aligned to some of the themes we have shared. One is we move upmarket and provide more utility, customers are increasingly using us as their sort of broad-based bank replacement for want of a better word.
To hold multiple currencies across them, sort of multiple entities to manage that, and they are keeping their funds as they see greater adoption of those sorts of products. They are keeping their funds on the platform for longer, and we will tend to see large balances not only corresponding to those larger customers but as we see greater adoption of those products. So overall, the inputs to that growing balance in addition to volume are moving upmarket towards those larger customers and adding more utility such that those customers really keep balances in order to utilize the cross-border AP capabilities that we are providing.
John R. Caplan: Yeah. I think, Beatrice, you have absolutely nailed it, but I would just add one point, which is that the perception of Payoneer Global Inc. has been it is an AR company. We are an AR company. And I think that is wrong. We are as much an AP company as we are an AR company today. We have made that transition really effectively. You know, the card volume card spend growing so nicely, the AP usage of, you know, the product attach of multiple AP products for our largest customers. And that pulls through. We see the net revenue retention of those customers really is exceptional.
And we are seeing customers take funds out of their local banks to put them into their Payoneer Global Inc. account so that they can use our AP products and that as that continues, the correlation between AR volume and total balance becomes spreads even wider. And so we would anticipate over time that as we continue to drive excellent AP products and great cross-sell of those products, even more balanced activity.
Nate Vincent: That is super detailed. I really appreciate that. For the follow-up, I did want to ask about trends in the checkout business and maybe some future outlook there. Obviously, it is still growing really nicely in the high 40s, was in line with what you told us last quarter. Obviously, you could not sustain the levels of growth we had been seeing indefinitely, but we would love to hear about maybe some of the tailwinds or headwinds in that business over the last ninety days. And then I think moving forward, I think historically, that business had maybe been more focused on sellers in particular geographies like Hong Kong.
So I was just hoping you could talk about the growth or strategic initiatives you have lined up to expand that business in the future, whether that is internal investments, Stripe partnership, anything else?
John R. Caplan: Yeah. So let us first of all, thank you for asking. I think the checkout team is doing an awesome job at Payoneer Global Inc., and so really proud of their efforts. You know, we think that as checkout transitions, we announced the Stripe partnership as we from our owned and operated solution to the partnership we have with Stripe, it will drive much better cost and yield dynamics in this business but at the same time top-line growth will moderate in Q4 as into 2026 as we migrate there.
What is most important about the checkout business is that we provide a comprehensive solution for our customers for all of their GMV that they are doing globally, either with selling on a marketplace selling B2B, or selling direct to consumer. They are able to aggregate that AR into their Payoneer Global Inc. account and then obviously use the AP products that we were just sharing and so excited about. We have some good traction with APAC sellers, particularly in India and South Korea following the migration to Stripe, which really validates the core thesis we have, which was to switch to a great partner with solid technology that lets us globalize this franchise.
And as you note, the growth rates year over year will be more modest but the actual dollars in revenue will be more significant as we look out.
Nate Vincent: Thanks, John.
John R. Caplan: You bet.
Operator: Your next question comes from Darrin Peller with Wolfe Research. Your line is open.
Daniel Krebs: Hi. This is Daniel Krebs on for Darrin Peller. I wanted to ask about the focus on larger ICPs and we are seeing ARPU that is rising very nicely. But I am still struggling a bit to reconcile that goal with the large ICP customer growth numbers in 2025. And maybe a more direct way to ask this is, you know, what percentage of those 47,000 large ICPs are not high quality and a focus for you?
John R. Caplan: Thanks. Yeah. Great question and thanks for asking. I think if you look at the 10k plus cohort, let us actually go back. We introduced the ICP framework a couple of years ago largely to dimensionalize the size of the portfolio at the long tail that was unprofitable. And we are pleased that the long tail of Payoneer Global Inc. is solidly profitable now. And it was a definition that was, let us call it, a broad paint push way of looking at customers. Very small, sort of small, and bigger. But it is less relevant a way to look at Payoneer Global Inc. overall certainly how we are operating the business going forward.
We are very focused on retaining, serving, adding high-value customers that are multi-entity that have the profitability and usage dynamics that mirror our best customers. And that is where we are shifting our focus pretty intently. And we have discussed this a number of times as we have talked about the shape of the portfolio, how valuable it is for us to have product market fit at the top end, those $250,000 a month customers are 30% of Q3 revenue, 50% of B2B revenue, more volume, more AP usage, and the best net revenue retention we have.
Specifically, I would anticipate that 10k plus ICP count continues to decline as we scrub the portfolio, manage who we add and who we retain, and monetize the intranet work payments. The $4 million a quarter for those intranet work payments is new disclosure and I think an exciting statement about how we are really fitting our pricing and our monetization to the needs of our customers and the profitability dynamics that we have. So we will continue to drive our focus upmarket because that is the best way to deliver the profitable growth we are committed to.
Daniel Krebs: Thanks, John. Helpful.
John R. Caplan: You bet.
Operator: Your next question comes from Pete Christiansen with Citi. Your line is open.
Pete Christiansen: Thank you. Good morning. Great to see Rising Solutions engagement take rate expansion and makeshift drive strong incremental margin gains quarter over quarter? Nice results there. I had two questions. First, I was wondering if you can give us an update on the Scout acquisition you did last year and how that how you see that scaling over the platform and potentially driving new areas new vectors of growth? And then my second question back on the stablecoin topic, we could not agree with you more multicurrency wallet providers are certainly key enablers of stablecoins.
Just curious from what you are seeing on the infrastructure side, whether it be, you know, perhaps things like the G7 stablecoin that has been proposed with potentially working on something circles, arc Blockchain development. Just wondering if you are seeing any of these infrastructure developments as key events that could help improve or drive demand for Payoneer Global Inc. users to increasingly adopt stablecoins? Thank you.
John R. Caplan: Sounds good. I will take the workforce management. Beatrice will grab the stablecoin. So in workforce management, you know, it is really nice to see that secular 10 win that are driving the employer of record solution growth. Right? The more and more companies around the world are recognizing seven and a half billion people on the planet. Let us employ the best at the best price and use companies like Payoneer Global Inc. to manage the complexity of the compliance-heavy HR landscape. To handle both managing those people and getting them paid. So our growth is really solid there.
We are pleased with the progress and obviously we have seen the news around H1B visas I think that bodes really well as it relates to the REOR solution and what US businesses want to do as they globalize their workforces. And then you think about our workforce management business, it really expands our ecosystem of AP capabilities. And broadens the core B2B value prop. So it is a small franchise for us, but it is growing really nicely. The contribution is solid. The team is great and full of entrepreneurs that are hell-bent on grabbing market share there.
So we feel really good about the traction as we continue to step into that space in a deliberate focused way that is delivering take rate expansion in our B2B business, solid retention for us, and an additional value prop for us to offer our customers. It is the early days, but these are good days for that business.
Beatrice Ordonez: Yeah. And look at on the stablecoin, look at it. It is super exciting. Right? We see all of the items you mentioned, lots of innovation in the space. I think the regular clarity that the Genius Act brought was really helpful, obviously, in that sense, has provided real tailwinds to some of this innovation. And I think we can expect to see a broad range of players in the space both innovating around the infrastructure and beginning to integrate elements of that infrastructure into legacy financial systems, into other payment schemes, into payment orchestration platforms, you know, in ways small and big. Right? We have done some of that already today.
We have integrated some of Citibank's blockchain-based tokenized deposit technology to really enable some of those treasury management use cases that can benefit a business like ours. Right? So we are going to continue to innovate in that space as John said in his prepared remarks. Really evolving our money movement capabilities to provide that use case or to provide those capabilities to our customers. And ultimately, we see the value that a platform like ours brings to this. It is really in seamlessly connecting those digital currencies, those stores of value with the legacy payment rails, the legacy fiat rails.
And allowing customers whatever their use case is to be able to seamlessly move between those stores of value and those local rails to enable what they need in order to grow their business to transact and so on. And we are very well positioned given our best-in-class last-mile infrastructure to be a part of solving for that challenge. So look, in short, we think it is super exciting. We follow the space carefully. We talk to a lot of players in the space, and we see it as an opportunity for continued innovation in our business and in general.
Pete Christiansen: Thank you. That is super helpful. Thank you.
Operator: And your last question comes from Mike Grondahl with Northland Securities. Your line is open.
Mike Grondahl: Hey, guys. Two questions. One, you guys have done a lot on OpEx and margins. Anything that you are still targeting there for improvement? And then secondly, John, what are your two priorities going into year-end and in 2026?
Beatrice Ordonez: Sure. So let me take hey, Mike. How are you doing? Thanks for the question. So yeah. Look. We are really proud of the progress we have made in unlocking core profitability. Right? Meaning, profitability excluding interest income. At the midpoint, it will be up three times versus last year, and we have shown continued progress in unlocking that profitability, obviously, from growing the business, you know, organically and otherwise, but also from driving improvements. And we see and we called some of that out in the prepared remarks. We see continued runway both from improving transaction revenue economics in general.
We talked at the last call around the pricing power we have, the strategic relationships we have with payments players in the space like Mastercard, like Stripe, to continue to evolve the economics and evolve the profit dynamics of that business. And then on the OpEx line, lots of opportunity in that space to continue to align our service model towards those larger customers that we are serving to drive increased automation to use AI within our back office, within our operations teams, within our risk management infrastructure to really continue to unlock profitability in that business going forward. So we see a lot of runway, I am sure.
John R. Caplan: Yeah. And, Mike, I would just say we are, you know, intensely determined to deliver the shareholder value that we are committed to creating. And we think we do that by moving our business upmarket focusing on those multi-entity customers that are underserved by anybody else on the planet that we have the ability to deliver a high amount of value for. We have a brand that is trusted. The licenses, that we need the innovation happening in our money movement organization. And a broad set of AP products that we are cross-selling effectively to those customers.
So the shape of our customer portfolio gets stronger and stronger which drives the shape of our P&L to be more and more profitable. And doing those two things are really what motivates us every day to fight and continue to build what is an exceptional platform a kick-ass team and a big opportunity. So we are really, you know, we are fired up about doing that through the end of the year. But I do not think that changes at year-end. It just motivates us to continue to execute at a really high level.
Mike Grondahl: Sounds very good. Hey. Thank you.
Operator: Thank you. That concludes our question and answer session. I would like to turn the conference back over to John R. Caplan, CEO, for closing remarks.
John R. Caplan: Thanks, everybody, for your questions and participation today. We delivered record results in the third quarter. And we are executing with the kind of intense focus and discipline that great teams and great management teams come together to do. I want to thank our team all over the world for their energy, their drive, their commitment to collaboration, and delivering for our customers. We are excited about the opportunities ahead and really look forward to speaking to everyone again in February as we talk about the future.
Operator: This concludes today's conference call. You may now disconnect.