Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Payoneer's Second Quarter 2021 Earnings Conference Call. At this time, all lines have been placed on mute to prevent any background noise. Following the speaker's remarks, we will open the lines for your questions. As a reminder, this conference call is being recorded. I'd now like to turn the call over to Ignatius Njoku, Vice President of Relations to begin.

Thank you. Before we begin, I'd like to remind you that today's call may contain forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including those set forth in our filings with the SEC and available in the investor relations section of our website, which may cause actual results to differ materially from any forward looking statements we made 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 as a supplement to and not as a substitute for GAAP financial measures. In most cases, reconciliation to the nearest GAAP measure can be found in today's earnings press release, which is available on the company's website. Hosting today's call are Scott Galit, Payoneer's Chief Executive Officer; and Michael Levine, Payoneer's Chief Financial Officer. With that, I'd like to turn the call over to Scott to begin.

Thanks, Ignatius. Good evening and thank you all for joining us on our first earnings call. Payoneer’s transition in June to a public company was a significant milestone as we continue on our journey to be the world's go-to partner for digital commerce everywhere. I want to thank all of my senior colleagues for making this a reality. I am so proud of everything we have accomplished and the positive impact we have on the world. And I am even more excited to take this next step on our journey together. For today's call, I would like to begin by providing a brief overview of Payoneer, for those who are not as familiar with our story. I will then briefly share some customer highlights, recap our strategy to create long-term shareholder value and discuss our second quarter results. Payoneer is a unique global payment and commerce enabling platform that powers growth for digital businesses all over the world. We've built an amazing scale platform that makes global commerce local for millions of customers by leveraging several unique capabilities we've developed as a market leader over the past 15 plus years. Our core value proposition, even from the beginning, was global coverage and connectivity with localized capabilities. Connect once to Payoneer and get the whole world. We are able to move money around the world instantly for our customers in a trusted compliant way. Making it as easy to pay or get paid globally as it is locally, whether it be marketplace payments or B2B accounts payable, accounts receivable payments, which we call B2B APAR, which are payments directly between buyers and suppliers. There are powerful network effects in our business. We connect marketplaces and sellers, buyers and suppliers, creating a virtuous cycle where more suppliers bring more buyers and more buyers bring more suppliers. We are trusted worldwide by global banks, leading marketplaces, and millions of small businesses supporting more than 7,000 trade corridors and customers from more than 190 countries. Our customers and partners range from nine of the 20 largest companies in the world by market cap to some of the smallest businesses in the most remote emerging markets. We are a high-tech high-touch business with modern APIs, mobile and machine learning infrastructure, a broad product suite, and also a global team that works closely and locally with customers all focused on helping our customers grow. And we've built on our platform a growing set of services for our customers and partners who can manage the whole world through a single global multi-currency Payoneer account, which gives them access to local payments and local currency around the world. And also access to a broad suite of tools to support their growth, like MasterCard Virtual Commercial Cards to pay their suppliers; working capital to invest in their business; green channels, which connect them to new sales channels; tax solutions and more. Our compliance capabilities are a real competitive strength and differentiator. We have made significant investments in our compliance and risk infrastructure to ensure that we are a leader in this area and stay compliant with all regulations in the countries in which we operate. To underscore the strength of our capabilities and compliance, and the trust our customers place in us, we often win deals because of the strength of our compliance program. This is all built upon our trusted recognized global brands, which is what connects it all together. Our brand creates tangible financial value through low-cost customer acquisition demonstrated by the more than 300,000 new applications we receive each month and our strong volume retention. Our platform really comes to life through our customers. Both small businesses and marketplace platforms continue to find tremendous value partnering with Payoneer. Let me walk you through a few customer stories from the second quarter of 2021 to help illustrate the unique value Payoneer provides and highlight some of the strong momentum we're building in the market. Omnisend, a provider of e-commerce email marketing and SMS automation based in the UK, highlights our unique value proposition for small businesses. To support Omnisend’s diverse global collection and accounts payable needs, they were working with multiple European banks. Omnisend switched to Payoneer to use our global multi-currency account and access our superior global payment capabilities and our broad suite of product offerings, including our new MasterCard Virtual Commercial Cards. They are now able to use Payoneer to get paid from around the world and also to pay suppliers, advertisers, and affiliates that are located across various geographies. CCRecord, based in the UAE, is a digital music label and channel on popular music streaming platforms with over 10 million subscribers. CCRecord is using Payoneer to receive music royalty payments, and to pay over 150 artists around the globe. In addition, they also recently started to use Payoneer’s new MasterCard Virtual Commercial Card to purchase advertising across social media platforms. We are excited to continue to provide new value-added services to help CCRecord grow their global business. I'm also happy to report that we have recently partnered with Bukalapak, an Indonesia-based e-commerce unicorn and leading marketplace with over 100 million customers and 13.5 million sellers on its platform. Bukalapak has raised $1.5 billion to become the largest IPO in Indonesia. As their very first mass payout partner, Payoneer is facilitating Bukalapak’s international expansion. They chose us because we're uniquely positioned in the market, offering capabilities to enable seamless and secure payment solutions for their overseas sellers in greater Southeast Asia and beyond. These customers highlight the exciting momentum for digital commerce all over the world and the unique value Payoneer was able to bring to our customers as we help them build and grow their global businesses. And what's most exciting is that we're just getting started, really just scratching the surface of our opportunity. We have a compelling growth strategy with four key drivers of long-term growth. First, we look to leverage our strong market momentum and scale to grow marketplace ecosystems and B2B AP/AR. We expect marketplace ecosystems to continue to demonstrate robust growth. We believe we are still in the early days of marketplace commerce, which is estimated to already be 63% of e-commerce overall and is global and growing. We have a strong market position with those marketplaces and marketplace sellers. Our B2B AP/AR offering has accelerated at scale, with volume growing much faster than our business overall. We see opportunities to continue to grow at a rapid rate for years to come. B2B AP/AR is now big enough that it starts to contribute to our overall growth rate. It has also proven out our ability to upsell our customers and drive scale for new services. Second, we see big opportunities to expand the Payoneer platform ecosystem. As a global platform, we are engaging with a wide range of integrated partners, banks, mobile wallets, tax providers, and much more. Our Payoneer for banks offering has many exciting opportunities that create value for our customers, for our bank partners, and for Payoneer, and reinforce the network effects in our business. Third, we are actively investing in new services. Merchant Services, working capital, and our MasterCard Virtual Commercial Card are big market opportunities. We have meaningful structural advantages with our relationships, data, and global footprint. These will not be material contributors to growth in the near term; in fact, they will consume investment. But over the medium to long term, we see opportunities for accelerating growth and scale contribution from these new services. Which takes us to the fourth growth driver, our M&A strategy. In 2020, we acquired Optile to catalyze the launch of our merchant services business. This was a very strategic acquisition. We went on a global search for a specific type of merchant services platform and a team that we could build around, and Optile was the best target we found and a great fit culturally. We see many opportunities to accelerate our ability to deliver more value to existing and new customers in more places by expanding our M&A efforts going forward. We see almost unlimited opportunities to expand our capabilities in e-commerce enablement, B2B payments, working capital, and global merchant services to name a few, as well as deepen our presence in emerging markets. One area that isn't part of our strategy is processing high-risk transactions. So I would like to briefly address some questions we're hearing related to this. We used to support high-risk business, which started before Michael and I joined Payoneer. We made the decision years ago to exit that business and we no longer support it and haven't for quite some time. We have no plans to get back into it, period. As I think you can tell, we're very excited about our business and our future. We believe we are uniquely positioned to accelerate the growth of digital commerce all over the world for years to come and deliver compelling financial results. Now let's turn to our financial results for the second quarter. This quarter, we delivered a record $111 million in revenue, up 42% year-over-year and well ahead of our internal targets. We processed $13.6 billion in volume in the quarter, representing year-over-year growth of 29%. When looking at the two-year volume growth rate between 2019 and 2021, we achieved a 45% compounded annual growth rate, consistent with the two-year CAGR from the first quarter. Our take rate was strong at 82 basis points, an increase from 75 basis points from the second quarter a year ago. Transaction costs were 26% of revenues, an improvement from 30% of revenues in the second quarter of 2020, as we continue to demonstrate the ability to drive increasing efficiency and incremental profitability from our transactions. We also delivered positive adjusted EBITDA for the second quarter, bolstered by our strong revenue growth and improved transaction costs, despite our increased investments. This quarter, we continue to execute well across the business as we pursue our huge market opportunity. Our strong revenues and momentum reinforce our commitment to our growth strategy and accelerating investments in the business and will drive sustained revenue growth of 20% plus well into the future. While these investments will impact near-term profitability, our scale, operating leverage, and highly efficient marketing position us to achieve long-term profitability and ultimately generate adjusted EBITDA margin of 20% plus. Finally, our strong momentum gives us confidence to raise our full-year guidance for revenue and adjusted EBITDA, and Michael will provide further details on our financial guidance in just a few minutes. Next, I want to provide some insight into the macro environment we are seeing and how it impacts our business. We executed very well this quarter with record new customer additions, improving take rate, and strong profitability metrics. And while we still see strong demand and a long road ahead for digitalization trends globally, our volume was lighter than we expected for the second quarter. As always, we operate in a broader market context and our performance is impacted by market forces, and COVID continues to impact short-term performance. First, while we are excited about the reopening occurring across the US and in multiple places around the globe, we have seen the impact of the shift in consumer buying behavior, causing slowing growth in e-commerce compared to the growth we saw in the peak of the pandemic. We continue to see strong two-year growth trends indicating the continued momentum of digital commerce. But a number of our partners and customers are experiencing slower growth trends compared to the very tough comparisons from 2020. In addition, global logistics is facing challenges with the cost of containers up substantially, with longer container turnaround times, and intense competition for containers. While this has created some additional near-term headwinds, we do not expect this will have a meaningful long-term impact. In Europe, there has been the introduction of new VAT requirements that require VAT to be paid by marketplaces, prior to dispersing funds to cross-border sellers, and international travel trends also remain soft. We now don’t expect this trend to improve through the remainder of 2021. As a result of these factors, we are lowering our volume guidance for the year. The diversification of our business, strong execution, and positive take rate trends more than offset the lower volume, enabling us to increase our revenue guidance. We are monitoring all these trends and recognize that COVID continues to create short-term uncertainty. Now I'd like to walk through some of the operational highlights for the quarter that demonstrate the strength and momentum we are seeing in the business. We added a record number of new customers in the quarter. In addition, our customers remain loyal to the Payoneer platform as we continue to achieve net volume retention of more than 100% and with a payback period of less than 12 months. Earlier this year, we announced a strategic partnership with eBay, which we started to onboard in the second quarter. While we are still in the early stages of our relationship, our partnership is progressing well as we are ramping the onboarding of eBay sellers on our platform. Our B2B APAR service continues to perform ahead of our expectations and is growing well faster than the business overall. Our newer services also all have strong performance with working capital, merchant services, and our MasterCard Virtual Commercial Card all exceeding our targets for the first half of the year. While we are still early, we believe these services represent compelling value for our customers and exciting growth opportunities for Payoneer. We are actively investing in our product offering in all of these areas. I want to highlight a few product introductions from the second quarter, which include introducing a cash-back rewards program for our MasterCard Virtual Commercial Card, expanding our working capital program to Mexican pesos and Canadian dollars for e-commerce merchants, offering new and improved KYC services for enterprises, and launching an artificial intelligence-based platform to detect fraudulent documents as part of our efforts to improve customer experience by introducing scalable automation. These are just a few of the exciting new services and enhancements we recently introduced for our customers. Finally, we continue to invest in people. And we are thrilled to have recently added new leadership talent like Ya Wen, who joined us from Amazon to be Vice President of Enterprise, Americas, and Robert Clarkson, who joined us as Chief Revenue Officer to lead our global go-to-market activities, bringing relevant industry knowledge and leadership experience from leading companies like PayPal and American Express. To conclude, I am incredibly proud of our execution this quarter. While we see broader market forces impacting volume trends in the short-term, we are increasing our guidance for revenues and adjusted EBITDA due to the strength of the Payoneer business. We remain focused on the compelling long-term growth opportunity in digital commerce globally, which is sized in the tens of trillions of dollars, and will enable us to sustain strong revenue growth trends well into the future. We are leveraging our global brands, expanding on our broad ecosystem of small businesses, marketplaces and partners. We're going to continue investing in our industry-leading infrastructure and product platform, while further enhancing our deep risk management and compliance capabilities. We were built for the modern interconnected global digital economy, and our competitive advantages are meaningful, and this is why we continue to win in the market. Before I turn the call over to Michael, I want to again thank everyone who has contributed to our success, our customers, our partners, our investors, and our employees. We wouldn't be here today without your tireless efforts and dedication. So thank you all very much.

Thank you, Scott. Given this is our first earnings call, I want to briefly discuss our financial models, review our second quarter results in detail, and provide updated guidance for the full year 2021. Our revenue models are primarily driven by our ability to grow volume and optimize take rate. Volume is counted only once when funds arrive on or pass through our platform. The take rate is a measurement of revenue as a percent of volume in a given period. The majority of our revenue is generated when funds are withdrawn from the platform to customers' bank accounts, or when used to send a payment off the platform. The majority of our revenues are from transaction fees, which in most, but not all cases, are borne by the customer getting paid. Revenue growth is generated by increasing volumes, increasing take rate, or a combination of both. We have a number of customer types and product categories with varying take rates, and the weighting of each can influence the overall blended take rate. Adding more services and products that leverage existing volumes, such as working capital products and our MasterCard commercial card offerings, has had a positive impact on our take rate. Additionally, we have introduced non-volume related offerings, such as value-added compliance services for enterprise clients that further enhance our take rate. Transaction costs mainly consist of fees paid to banks, processors, and networks that process payments to and from the Payoneer platform. Over the years, we've built a global banking infrastructure, the scale of which gives us an advantage in our ability to reduce our underlying transaction costs. We manage our business with long-term profitable growth in mind and continue to acquire customers in an efficient manner. We believe our customers will need additional products and services as they grow, which puts us in a favorable position to leverage our unique platform, brand, and global reach to support their growth and increase their lifetime value. We are aggressively investing in our platform to expand our product suite and strengthen our capabilities, to be either partner of choice for our customers and partners in the digital economy. With that background, let's take a closer look at our second quarter results. As Scott mentioned, we are very pleased with our performance and our ability to deliver strong financial results for the full year 2021. Revenues in the second quarter were $110.9 million, up 42% year-over-year, driven by solid volume growth and a higher take rate. Volume increased 29% year-over-year to $13.6 billion. Looking at a two-year compounded growth rate between second quarter 2019 and second quarter 2021, our volume grew 45% annually, consistent with first-quarter growth, representing stable quarterly growth this year as compared to pre-pandemic time periods. We continue to benefit from secular e-commerce trends and continued growth from new and existing customers, albeit the volume in the quarter was lower than our expectations, due to the factors Scott described earlier that have impacted e-commerce and international travel. Blended take rates for the quarter were 82 basis points, up from 75 basis points in Q1 of this year, as well as up from 75 basis points in Q2 of last year. The increase in take rate was driven by growth in higher take rate parts of our business, such as B2B APAR, MasterCard commercial card, and working capital with slower growth in lower take rate businesses, such as domestic payouts. Additionally, the growth of non-volume based value-added services continues to help increase our overall take rate. Transaction costs were $28.5 million, representing 25.7% of revenues, a significant improvement compared to last year's second quarter of 30.3%, which reflects the company's ability to benefit from improved operating leverage as we scale. In Q2, we increased our provision for capital advance losses due to increased losses in reserves as a result of market conditions we're seeing in e-commerce. As a result of our second quarter revenue growth and active management of transaction costs, revenues less transaction costs improved to $82.4 million, an increase of 51% year-over-year, representing 74.3% of revenues, up approximately 460 basis points from the same period one year ago. Turning to the remainder of our operating expenses. We continue to make investments to expand our platform's capabilities and resiliency, build new products, functionality, accelerate customer acquisition, and develop new automation that allows us to scale faster and reduce the need for adding manual labor. We incurred $12 million in one-time costs in the second quarter. These one-time costs include deal-related costs, equity-based compensation adjustments, and other non-recurring adjustments. We incurred total equity-based compensation expenses of $11 million in the quarter, of which $5 million were one-time adjustments triggered by the transaction with FTAC Olympus. Labor-related and consultants' expenses were the largest component for the operating expense increase, excluding transaction costs. We hired personnel in our R&D and product teams to grow our platform and expand our product offerings. We continue to grow our global sales and account management teams to support our go-to-market strategies. Additionally, we have onboarded additional support for onboarding a record number of new customers. Total operating expenses, including transaction costs, were $129.3 million, up 54% from $84.1 million in a year-ago period. Adjusting for one-time expenses, total operating expenses were $117.4 million, up 40% from one year ago. Operating loss was $18.4 million, as compared to a loss of $5.7 million in the prior year period. Net loss of $12.4 million or a loss of $0.63 per share is based on weighted average shares outstanding of 66.7 million shares. Note that the average shares at Q2 will be significantly different from the end of period shares outstanding, given the transaction with FTAC Olympus and Payoneer was completed on June 25. To calculate fully diluted shares outstanding, please visit our industrial website, where we have a slide detailing share counts. Adjusted EBITDA, the calculation of which is detailed in table two of our press release, was $674,000, as compared to $1.4 million in the second quarter last year. This reflects the increased investment in OpEx that we've already discussed. Turning our attention to the balance sheet. Our cash and cash equivalents were $498.7 million as of the end of Q2. This reflects approximately $389 million net proceeds from the completion of our transaction with FTAC Olympus. We repaid all of our bank debt and have no outstanding bank debt as of the end of the second quarter. Lastly, we recognize the Series 1 preferred stock as a liability after we determined that we would redeem the shares after the quarter ended. In July of 2021, we retired the Series 1 shares for approximately $40 million. Turning now to our guidance, given our strong first-half performance, we are updating our full-year 2021 guidance as follows. We expect revenue in the range of $442 million to $448 million, representing year-over-year growth between 28% and 30%, up from our original guidance of $432 million, which reflected 25% year-over-year growth. We expect volume in the range of $57 billion to $60 billion, $58.5 billion at the midpoint, our expected year-over-year growth between 28% to 35%. Our volume outlook is based on the following assumptions: as Scott discussed earlier, we are projecting moderate growth in e-commerce in the third quarter, and global supply chain logistics issues will need time to be resolved, and the reopening in the US and Europe has led to changes in consumer behavior. We expect to see improving growth as we get into the holiday season. Additionally, we are projecting the travel vertical will not show significant recovery for international travel this year due to the ongoing concerns related to COVID. We project our take rate will improve to approximately 76 basis points in 2021 at the midpoint compared to previous guidance of 58 basis points. Our take rate assumption is based on a continued simple mix of customers and higher take rate business, as well as from revenues from non-volume based value-added services. We do expect the debt and take rates in Q4 as a result of annual seasonality related to a larger waiting for e-commerce during the holiday season. As e-commerce has a lower take rate than the business overall. We expect transaction costs to be in a range of $112 million to $113 million, approximately 25.3% of revenues, and an improvement from previous guidance of $121 million, which represented 28% of revenues. Revenue less transaction costs is expected to be $330 million to $335 million, representing growth of approximately 33% to 35% year-over-year, representing approximately 74.7% of revenues. We've projected adjusted EBITDA in the range of $1 million to $3 million. We had previously shared guidance that we expected to run at an adjusted EBITDA loss in 2021, while investing significantly in growing up by formally making other investments. As a result of our strong first half performance, we will be able to increase our investments and still generate positive adjusted EBITDA. While we will not be providing normal quarterly guidance, I would remind you that we tend to have some seasonality with stronger growth in the fourth quarter compared to the third quarter. In summary, we remain incredibly excited about our business and the impact we can make on the world. We continue to help businesses everywhere and anywhere grow and thrive. We're also excited to be a public company and to share our story with the market so that investors can understand the unique positioning of our platform, the brand, the people, and the universe of opportunities in front of us. We are now happy to answer any questions you may have. Operator, please open the line.

Certainly [Operator Instructions] The first question on the line is from Sanjay Sakhrani with KWB. You may proceed.

Thanks and congrats on your first quarter out of the gate. I guess Scott, you went through a laundry list of some of the impacts that negatively impacted you this quarter. Maybe you can just talk about which one of those you think might have the potential to come back sooner than the others? And then as far as the take rate is concerned, maybe just talk about what the underlying assumptions are that you continue to see the strength in that take rate? Thanks.

Great, thanks so much, Sanjay. So first, in terms of the trends that we've been seeing that have made us a little bit more cautious on volume. Really the potential for e-commerce to rebound faster at this point seems more likely than a significant surge in international travel, for example. What we're continuing to see is the changes in the evolution of consumer behavior. Obviously, going into COVID and now, I wouldn't say we're out of COVID, but as things evolve, we're seeing people spending their time on different types of activities. We've seen reports from various companies in the market that we've worked with that have reported earnings so far. So I think, again, all of our underlying trends are positive. We're seeing more customers sign up than ever, and more new customers than we ever had in the quarter. We're just seeing again, kind of, fairly broadly across the board, a bit of a softening compared to what we saw a year ago with a really strong COVID trend. Again, to your trends, we really strong as Mike and I touched on. 45% two-year CAGR. We continue to believe that long-term digital commerce is really the place to be, so we've remained really bullish and enthusiastic. The demand among customers and prospects around the world to participate in digital commerce has never been stronger; however, there is certainly a little bit more choppiness in the near-term as we see again, some of these unprecedented moves in and out of COVID. Travel, at this point, we sense that domestic travel has rebounded quite a bit, but not surprisingly, that's not really where we focus, and international travel has certainly been a laggard. We are staying cautious on that through the rest of the year and not anticipating any improvement from what we've been seeing so far. In terms of the take rates, we talked about some of the take rate moves that we saw in 2020. There are two important components to the take rate change that we're seeing. First is mix, some of the mix impacts that we saw last year, which we discussed having a meaningful effect. An example of that was in 2020, the rapid growth of some domestic e-commerce volumes at much lower take rates. Now we're seeing a bit of the flip side of that with recorded growth slowing down, and again, the importance of mix is we've seen good pricing stability for quite some time. So, as we see the mix shift, the take rate may fluctuate a bit here or there, but ultimately it's all contributing positively to our growth and to our profitability. The second part is take rate, which I think gives us more confidence, kind of a purposeful focus that we have in the execution on take rate in the accretive parts of our business. B2B is growing faster than the rest of the business overall, and as we talked about, that's the higher take rate part of the business. Working capital that we continue to invest in also drives incremental take rates, and the commercial card that we've been introducing and ramping up is also at a much higher take rate. There are investments that we're making in parts of the business that are intended to drive incremental value out of the volume coming through the platform. We're executing well on those.

Thank you, Mr. Sakhrani. The next question is from the line of Josh Siegler with Cantor Fitzgerald. You may proceed.

Hi. Good evening. Thanks for taking my call. First one, it looks like your concentration in China declined sequentially. Can you elaborate a little on some of the drivers of this diversification?

Yes, sure. And hi, Josh. In general, we’ve had trends overall with a diversification around the business, and growth outside of China has been even stronger than growth in our customer base that comes from China. Some of that will go along with e-commerce. When e-commerce is really strong, you may see a bit of a hiccup or less of a gradual decline. But when e-commerce shows weakness, as it did this quarter and what we're guiding into looking forward, that means that other parts of the business are growing faster relative to e-commerce and that skews us away from China in terms of the mix of the business geographically.

Got it. Thanks.

And hey, Josh, it’s Michael. I’ll just add, if you look at No. 2, you'll see the breakout in 10-Q, and footnote 2 will have the breakout. You'll see we went from 39% last year down to 34%. In this quarter for China, but the US grew from 8% to 12%. Part of that and another thing that has helped us continue to grow, in addition to things which got mentioned, is that we are adding services that are non-volume based value-added services, like related to compliance and other areas where we can help our enterprise customers, and that has grown, not materially, but has helped. So that also continues to contribute to the diversification from a geographic standpoint.

Got it. Thank you. That's some helpful color. Can you also talk a little bit more about the current M&A pipeline? How are you guys feeling about valuations in the market right now?

Everything's cheap. No, I mean, look, it's interesting. We're seeing certain areas where price expectations are quite high. We're also seeing other areas where we are seeing really good opportunities. We have the benefit of having a broad and diverse business in terms of geography and also in terms of the services that we either offer or are looking to offer. It cuts across a wide spectrum. Keep in mind that there have been many startups that have been funded. While you're seeing some breakouts and you're seeing a lot of big funding rounds with companies that are breaking through, there are lots of companies that aren't getting the same kind of breakthrough and traction in the same way. So when we are looking, we are looking at a range of different companies as targets; some of them are larger. But we're also looking at really strong tuck-ins that can bring terrific functionality that we expect that our global customer base and distribution capabilities can bring a lot of value. On average, we are seeing things be a bit more expensive than they were, but we're also seeing pockets of opportunity out there. Overall, I'd say we're pretty upbeat about the opportunities ahead.

That's great to hear. Thanks for taking my questions.

Yes. Thank you.

The next question is from the line of Mayank Tandon with Needham. You may proceed.

Thank you. Good evening. Congrats, Scott and Michael, on your first quarter as a public company. I wanted to start with just, Scott, how do you think about growth going forward between new customers versus increased penetration of the existing base? With all the additional services that you called out, what are the projections going to look like over time, not near-term, but really, over a multi-year period, between new customer growth and the landing expand, if I can call it?

Great and thanks, Mayank. It's great to talk to you again. The great thing right now is that we're firing on all cylinders. We're getting really strong, new application volumes of customers signing up. We're seeing, as we touched on, a record number of new customers, and we continue to have strong momentum in the market, and continuing to see more and more opportunities. At the same time, we're getting more sophisticated in terms of our global sales teams and our ability to engage our customers and grow the portfolio of services that we're offering to our existing customers. We’ve talked about the cohorts that we build and how each cohort builds upon the previous models. Those positive volume retention trends and our ability to steepen those curves certainly give us a big opportunity to drive leverage through the existing customer base. That will continue to be a really important driver of growth. But right now, part of what's exciting is that we're seeing so much interest all over the world in our platform and in digital commerce that we think we still have a long way to go here with new customer acquisition as an important driver as well. We're executing well on both fronts, and I actually expect that will continue to be an important thing for us over the next couple of years.

That’s helpful. And then as a quick follow-up, Michael, you talked about the transaction losses coming down, and you've been able to manage that very effectively. Could you just give us a little bit more details into what is driving that? How sustainable is that? Now, should we think about that modeling going forward in terms of transactional losses?

I think when you refer to transaction losses, you mean transaction costs. Bringing up a critical element of our entire business model, something we've spoken about as a core part of how our model works. That basically variable expense is really key. If you look at revenues less those transaction costs, and those transaction costs go up, the inverse of revenue less transaction costs becomes a metric effectively to look at the variable profitability of the business. So when costs come down, that profitability goes up. We look at that effective KPI of revenue less transaction costs as a way to measure the variable profitability of the business to see how we're improving over time. It has been really strong. When you adjust out and sort of normalize and look at first quarter and second quarter in terms of variable profitability, you would actually see that there was a lot of consistency between the two quarters because in the first quarter, we had that 400 basis points that you'd probably take out. Maybe the other way, you'd add one or two points to the transaction costs related to one-time benefits we got from the MasterCard deal. In this quarter, again for our approach to managing risk, we increased our reserves for our working capital and capital advance business. If you were to adjust that to a normal level, you would see that we actually, on that normalized basis, performed really well from that variable profitability analysis. So, what's driving it ultimately are continued efficiency and business mix, which are the two main drivers of that.

I appreciate that. Thank you so much.

Thanks, guys. I guess on the B2B side or even the service provider vertical, can you give us a little bit more sense if their growth rates have continued how that shook out? And then, maybe just with your marketing strategy and customer acquisition, have you tweaked anything there, anything new to call out?

Great. Hi Mike. B2B continues to grow quite a bit faster than our business overall and continues to actually perform ahead of our internal expectations. We really continue to see tremendous opportunities there, which is a bright spot. In the service provider vertical, I would say we’ve seen a bit more resilience than e-commerce. Given the timing of some of these year-over-year tough comparisons, you start to get into some real nuance when you look at what kind of services were performed last year. Some of the e-commerce volumes started to grow a bit faster last year, than some of the platforms that support remote work, which picked up further into the summer last year. But I would say, overall, we’re still seeing strengths, and the two-year growth trends are really strong. We think the overall growth of more flexible work arrangements and third-party service providers will continue to be very strong. Even there are some reports and indications that there are some tough year-over-year comps, which is creating a little softness. B2B is small in such a big pool of opportunity, and so far it hasn’t impacted it much. In terms of customer acquisition, we're amplifying most of what we've been doing and adding a bit more around partnerships where we think we can drive opportunities for partners and for us.

Got it. Thank you.

Yeah. Thanks, Mike.

Hey, Scott and Michael. Good afternoon.

Hey, Bob.

So, I guess, just on the -- your volume guide, $57 billion to $60 billion is about in line with where we had forecasted. I did see in the first half of the year, you're at about $27 billion. What would cause you to be at the low end and are you expecting based on some of your commentary to be at the low end of that range? What would cause you to be at the low end or to miss that range or will entice you to be at the high end?

Yeah. So I'll start, and obviously Michael can amplify on some of this. But on the low end, it would take us seeing increased softness in e-commerce from where we've been, really looking at trends continuing to soften, and on the positive side, if we see, continuing to perform more the way we expect with e-commerce, staying solid, not extraordinary, or anything, and continuing positive trends in other parts of the business. We try to be on the more cautious side. We certainly, with travel, are trying to make sure that we really keep that pretty cautious in the way we’ve looked at the rest of the year. But overall, we feel good about the range and good about how our performance is.

So what is -- how much of the change -- was there -- what percentage of eComm is your business? And what was the change in growth rates for eComm?

E-commerce is... Bob, can you hear me?

Yes.

Okay. Yeah, hi. E-commerce is directionally about half of the business. We haven't broken out specific growth rates overall. That's not something we’ve shared. But given the percentage that represents of the business overall, you can see how if the trends are softening, it has a meaningful impact on the overall volumes that we report.

And then, just as you have a guidance out there for 2022 and for top line growth of 20%, at least 20%. How do you feel about that being able to hit that target, that revenue growth target in 2022? And you're actually doing better from the profitability side? What do you -- what are your thoughts on investing versus reporting a little better bottom line result?

In general, we remain very upbeat about digital commerce overall. The broad macro trends and themes around our business and around our customers and the opportunities haven't changed. We really are very positive about those opportunities, our specific market position, the execution that we have, and our ability to drive increased revenue growth and increasing take rates. We're very much looking forward to making more investments and helping more businesses around the world capitalize on opportunities in digital commerce. We feel good about the long-term growth trends and the numbers that we've shared about our long-term growth rates and our long-term EBITDA targets. We're continuing to invest as the strength in the business and the strength in the P&L. The short-term volume considerations from some of the macro trends in the market, we don’t think impacts that at all.

Thank you. Appreciate the commentary.

Yeah. Bob, I’ll just add that we have a great first half. We're really happy with the results. We think we're in a really strong position, no different than when we spoke at the beginning of the year. We think our platform gives us a distinct advantage. We think now is the time to accelerate our investment. We're pressing on the gas harder than ever. We think there's tremendous growth opportunity in the future, and we're executing on it now. The first half results show that we've had back-to-back really strong quarters. Given some of the things we're flagging in the market, which now you're seeing across with other companies that are reporting, we're still raising our guidance with confidence that we can increase our revenue growth from what was prior guidance to 25% raising that to 28% to 30% growth for this year. We'll continue to work hard to execute on that.

Great. Thank you. I really appreciate the commentary.

Thanks.

Thank you, Mr. Napoli. There are no additional questions waiting at this time. I would like to pass it back to the management team for any closing remarks.

I want to thank you all for joining us and for all the good questions and your time and attention. We appreciate it, and look forward to continuing our discussions. Thank you all so much, and we'll talk to you sometime soon. Thanks.

That concludes Payoneer’s second quarter 2021 earnings conference call. I hope you all enjoy the rest of your day.