The fourth quarter of 2020 represented the strongest period of growth for Nuvei in its company history as it reported revenue of $115.9 million, a 46 percent year-over-year increase.
The company’s full-year revenue also increased noticeably to $375 million, a nearly 53 percent increase from last year when the company pulled in $245.8 million (all numbers in USD).
The Montréal-based Nuvei released its financial results for the fourth quarter and full fiscal year ended December 31, 2020, on Wednesday morning.
“We remain excited about the opportunity ahead of us with the momentum of our current customers and the strength of our new business pipeline.”
– Philip Fayer, CEO and chairman, Nuvei
This is the second quarterly earnings report Nuvei has issued since publicly listing on the Toronto Stock Exchange (TSX) after a successful year of financing. Nuvei closed its initial public offering (IPO) at $833 million USD, making it the largest technology IPO by both equity capital raised and market capitalization in TSX history.
Founded in 2003 by chairman and CEO Philip Fayer, Nuvei offers payment solutions to retail merchants, as well as technology, and distribution companies. The company’s clients span Canada, the United States, Europe, Latin America, and the Asia Pacific region.
With net income for Q4 of $22.6 million and a net loss of $3.1 million, Nuvei attributed part of the growth to new ecommerce business nearly tripling year-over-year in the quarter. The company noted that momentum has continued into the current quarter. Nuvei said the growth was also driven by its current merchants increasing their share of wallet with Nuvei, as well as the “acceleration of new merchant wins.” The company stated this was due to the continued expansion and investment in its direct distribution channel.
Nuvei’s adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) increased by 61 percent in Q4 to $51.3 million from $31.9 million last year.
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“Our performance continues to be driven by strong momentum in the high-growth verticals we serve, as well as 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,” said Fayer. “As we look to 2021, we remain excited about the opportunity ahead of us with the momentum of our current customers and the strength of our new business pipeline which is reflected in our financial outlook.”
For the full year, Nuvei reported net losses of $103.7 million, a large increase from 2019 which saw a net loss of $69.5 million. The increase was associated, in part, with the cost of Nuvei going public, with the company noting that $83.4 million resulted from its IPO and associated valuation in the third quarter of 2020.
Formerly called Pivotal Payments, the company received one of its first large investments from Goldman Sachs, totalling $60 million CAD, in the mid-2000s. In December 2019, the company raised $358 million CAD, the majority of which came from existing shareholders, Novacap, some of Novacap’s limited partners, and Caisse de dépôt et placement du Québec (CDPQ). That raise gave Nuvei a valuation of $2.65 billion CAD at the time.
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During the fourth quarter of 2020, Nuvei announced it was set to acquire the assets of Base Commerce, LLC, a provider of integrated payment solutions. At the time of the deal, Nuvei stated that the acquisition offered both revenue opportunities and the ability to broaden its product capabilities. Nuvei also said that the deal would diversify its acquiring portfolio, enhance its sponsor bank coverage, and expand its distribution network. The deal officially closed in January.
Nuvei added a new member to its executive team in January. Neil Erlic, previously at Paysafe Group, joined as chief corporate development officer at Nuvei.
This past year also saw Nuvei move into the online gaming and sports betting market in the United States. The company was approved as a registered industry vendor in four US states (Colorado, West Virginia, Indiana, and Tennessee) and noted in its quarterly report it is “well-positioned” to support the growing regulated online gaming and sports betting market in the country. Nuvei is also waiting on vendor approval in all other US states that regulate online sports betting and gaming.
Nuvei is expecting its financial outlook to substantially increase in 2021. The company projected revenue for the full year to be between $570 million and $600 million, with an adjusted EBITDA of $252 million to $265 million.
Image source Nuvei.