Paysafe Limited (NYSE:PSFE) tumbled on Thursday after the company delivered a disappointing quarterly update and slashed its full-year outlook.

The payments provider reported weaker results across key metrics and warned of softer expectations ahead, sending investors rushing for the exits.

The company reported third-quarter adjusted earnings per share of 70 cents, missing the analyst consensus estimate of 73 cents.

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Quarterly sales of $433.815 million (+2% year over year) missed the Street view of $439.514 million.

Organic revenue growth for the third quarter was 6%, reflecting 7% organic growth from Merchant Solutions and 4% organic growth from Digital Wallets.

Growth was driven by double-digit gains in e-commerce, supported by heavy volumes at the start of the U.S. football season. Latin America saw strong demand for Paysafe's local payment solutions.

Customer engagement also increased around eCash initiatives and new digital banking partnerships across Europe.

Adjusted EBITDA for the third quarter increased 7% to $126.6 million, compared to $117.8 million in the prior year period.

Third-quarter operating cash flow was $69.2 million, compared to $81.9 million in the prior-year period, mainly driven by higher restructuring costs and income tax paid.

As of Sept. 30, total cash and equivalents were $248.6 million.

Headwinds

In the quarter under review, the firm experienced a $24.1 million headwind related to the disposed direct marketing payments processing business line.

Net loss for the third quarter widened to $87.7 million from $13.0 million a year earlier. The increase primarily reflects an $81.2 million income tax charge tied to a new valuation allowance on U.S. deferred tax assets following passage of the One Big Beautiful Bill Act in July 2025, a non-cash item that does not affect current or future cash taxes.

Results also include $12.4 million in higher restructuring and other costs, mainly legal fees.

Total debt was $2.5 billion, and net debt was $2.2 billion. Compared to Dec. 31, 2024, total debt increased by $133.5 million, primarily due to fluctuations in the EUR/USD exchange rate.

Share repurchase program

Paysafe has authorized a $70 million increase to its existing share repurchase program.

Including the $70 million increase announced today, approximately $97 million in aggregate remains available under the share repurchase program.

Outlook Lowered

The firm cut its 2025 adjusted earnings-per-share outlook to $1.83-$1.88 from $2.21-$2.51, below the $2.42 analyst estimate.

The company also lowered its 2025 revenue forecast to $1.70 billion to $1.71 billion, from $1.710 billion to $1.734 billion, compared with the $1.725 billion consensus.

Smarter Payments Partnership

In a separate release, Paysafe and Endava plc (NYSE:DAVA) announced a multi-year strategic partnership to accelerate innovation in digital payments and customer engagement. The collaboration combines Paysafe's global payments platform with Endava's AI-driven engineering and transformation capabilities.

Both companies plan to deliver faster product rollouts, higher conversion and more immersive digital experiences for merchants and consumers.

A joint steering committee will oversee performance, strategic alignment and continuous improvement under the agreement. Executives from both firms said the partnership aims to redefine trust, connection and usability in payments through smarter, more intuitive technology.

PSFE Price Action: Paysafe shares were down 22.74% at $7.85 at the time of publication on Thursday, according to Benzinga Pro data.

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