Business Combination

12 Months Ended

Dec. 31, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Business Combination

Business Combinations

TransactPay

On December 23, 2024, we entered into an agreement with Neptune International Ltd, an exempted company limited by shares incorporated under the laws of Bermuda, to purchase its TransactPay business for approximately €45.0 million in cash, and an additional amount up to €5.0 million for contingent consideration tied to performance-based goals. TransactPay provides BIN Sponsorship, E-Money Licensing, and Virtual Account services in the UK and Europe. The transaction is expected to close in the third quarter of 2025 and is subject to the regulatory transfer of the E-Money Institution license and other customary closing conditions.

Power Finance Inc.

On February 3, 2023, the Company acquired all outstanding stock of Power Finance Inc. (“Power Finance”) for a base cash purchase price of $221.9 million. The purchase price does not include $53.1 million of contingent consideration tied to performance-based goals which were expected to be achieved within 12 months from the date of acquisition. The Company determined the acquisition-date fair value of the contingent consideration liability, based on the likelihood of payment related to the contingent earn-out clauses, as part of the consideration transferred.

Power Finance’s cloud-based platform offers credit card program management services for companies creating new credit card programs. The acquisition of Power Finance will accelerate the Company’s credit product capabilities and allow the Company’s customers to launch a wide range of credit products and constructs.

The following table summarizes the components of the purchase consideration transferred (in thousands):

Base purchase price less contingent consideration	$	221,933
Less: postcombination cash, non-cash expense and other purchase adjustments	118,447
Plus: cash acquired on acquisition date	7,089
Total purchase consideration, excluding contingent consideration	110,575
Contingent consideration	53,067
Purchase consideration	$	163,642

Of the $117.6 million postcombination compensation excluded from purchase consideration, approximately $32.4 million was recognized as non-cash postcombination compensation cost at closing as a result of the vesting provisions of the employee replacement awards on the acquisition date. The remaining $85.1 million is subject to continuous employment and will be recognized as postcombination cash compensation cost over a weighted-average period of 2.2 years. Postcombination expense recognized was $39.7 million and $36.4 million for the years ended December 31, 2024 and 2023 and is included within Compensation and benefits in the Consolidated Statements of Operations and Comprehensive Income (Loss).

The assets acquired and liabilities assumed were recorded at fair value as of the acquisition date. The final $163.6 million purchase consideration was attributed to $41.0 million of developed technology intangible assets (to be amortized over an estimated useful life of 7.0 years), $8.0 million of deferred tax liabilities, and $7.1 million of net assets acquired, with the $123.5 million excess of purchase consideration over the fair value of assets acquired and liabilities assumed recorded as goodwill. The fair value of the developed technology intangible assets was estimated using the multi-period excess earnings method (“MPEEM”), a form of the income approach. The principle behind this method is that the value of the intangible asset is equal to the present value of the after-tax cash flows attributable to the intangible asset. The Company applied judgment which involved the use of certain assumptions with respect of the revenue and EBITDA forecasts, obsolescence rate, and discount rate. The goodwill recognized was primarily attributable to the expected synergies from integrating Power Finance’s technology into the Company’s platform. Goodwill was not considered deductible for tax purposes.

The financial results of Power Finance are included in the Company’s Consolidated Financial Statements from the date of acquisition. Separate operating results and pro forma results of operations for Power Finance have not been presented as the effect of this acquisition was not material to the Company’s financial results. Acquisition-related third-party transaction costs were $3.3 million for the year ended December 31, 2023 and are included in Professional services in the Consolidated Statements of Operations and Comprehensive Income (Loss). Transaction costs for the Power Finance acquisition were immaterial for the year ended December 31, 2024.

During the third quarter of 2023, the Company paid out $53.1 million as the performance-based goals tied to the contingent consideration were achieved during the second quarter of 2023.