Q4 2023 Payoneer Global Inc Earnings Call

Participants

Darrin David Peller; Senior Analyst; Wolfe Research, LLC

Research Division; Research Analyst; Goldman Sachs Group, Inc.

Trevor Ellis Williams; Analyst; Jefferies LLC,

Joshua Michael Siegler; Analyst; Cantor Fitzgerald & Co.

Chris Kennedy; Analyst; William Blair

Presentation

Operator

Good mornuing. Thank you for standing by, and welcome to Payoneer Fourth Quarter and Full Year 2023 earnings conference call. (Operator Instructions). As a reminder, this conference call is being recorded. I would now like to turn the call over to Michelle Wang, Pioneer's VP of Investor Relations.

Thank you operator. With me on today's call are piers Chief Executive Officer, John Caplan - Payoneer Global Inc., and Pioneer's Chief Financial Officer, Beatrice Ordonez. Before we begin, I'd 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 Pioneer's.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 intend 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 instead of GAAP financial measures reconciliations to the nearest GAAP measure can be found in today's earnings press release, which is available on our website. Additionally, please note, we have posted an earnings presentation supplements alongside our earnings press release on investor dot Pioneer.com. All comparisons made on today's call are on a year-over-year basis, unless otherwise noted.
With that, I'd like to turn the call over to John to begin.

Good morning. Thank you for joining us today and 2023, we delivered 32% revenue growth and 25% adjusted EBITDA margin. Our strong performance is the direct result of our focus on our ideal customers interest we earn on the funds our customers hold in their Pioneer accounts and our disciplined approach to unlocking increased efficiency as we exit 2023. The key performance indicators of our business are all pointing in the right direction. We have approximately 2 million active customers and 516,000 who meet our ideal customer profile or ICPs. We grew our ICPs by 6% in 2023. We increased our two for our 2 million active customers by 36% and by 9% when you exclude interest income.
We generated 66 billion of annual volume, up 11%. We grew total take rate by 21 basis points in 2023. We are trusted by our customers, evidenced by over 6 billion of customer funds held in paying or accounts. Customer funds were up 9% year over year 2023 adjusted EBITDA of $205 million more than quadrupled versus 2022.
I'd like to put our results in context. We've discussed before that we primarily serve SMBs directly. Although we also have direct relationships with certain enterprise clients, our SMB customer business represents 75% of our volume and approximately 90% of revenue. Smb customer volume enters the paying user account from marketplaces, B2B transactions direct to consumer sales from a customer's web store.
And when a customer loads funds from the local bank account SMB customers use our pain or account to hold multicurrency funds and manage their accounts receivable and accounts payable with overseas customers, suppliers, vendors and partners. Our SMB customers are valuable because we have a branded relationship with them and are able to cross-sell to them more of the pain or financial stack over time.
We also operate an enterprise business in which large marketplaces use our payment rails to make payouts directly to appease local bank accounts. This is a scaled, lower risk offering and our enterprise clients benefit from our extensive breadth and geographic reach and because we send payments directly to the recipient bank account, we don't own the end SMB relationship and have therefore limited opportunity to drive greater monetization or product adoption adoption over time to grow our business.
We are increasing the number of ICP.s on our platform, which in turn can drive more volume into paying your accounts. We are also enhancing our AP tools and adding to our financial stack to increase our utility to customers. I became the sole CEO of Pioneer almost exactly one year ago today, reflecting upon the progress we have made in 2023 some highlights. We bolstered the experience and skills among our executive team and our Board of Directors.
We have become an even more SMB centric company and our focus on ICPs, RPU and cost to serve is resulting in greater organizational clarity and focus, which we believe will drive long-term profitable growth. We delivered 6% ICP growth in 2023, including faster growth of 13% in our higher take rate regions of A-Pac, Sameer and LatAm. We also delivered 15% growth in our larger higher-value ICPs that do more than $10,000 a month in volume.
We aligned our go-to market organization to our most valuable customers and biggest opportunity markets. We recruited new leadership to drive the modernization of the pain or platform. We are increasing the velocity of which we released new tools and features and are focused on driving improved monetization, faster activation and increased customer engagement. We announced two acquisitions in 2023, closing a small acquisition in the data space to support our working capital business, and we continue to work towards closing our acquisition of a licensed PSP. in China, which is subject to local regulatory approvals and customary closing conditions.
We drove our account self funding to nearly $500 million in 2023 through the strength of our AP solution. This represents a new source of volume entering Pioneer accounts. We meaningfully reduced the operating losses on non ICP customers in 2022, non ICPs resulted in approximately $25 million of operating losses.
We've cut that by a third in 2023, as we increased our monetization of this segment via our pricing initiatives, we lowered the average cost of a customer inquiry by over 40% as of the fourth quarter versus a year ago, we reduced our total employee headcount by 8% year over year. And we initiated Pioneer's first share repurchase program in May of 2023 and in December increased the authorization to up to $250 million.
We are proud of the hard work by our team to deliver these strong results to accelerate our progress. We are working to drive ICP acquisition, increase retention and improved customer monetization in our B2B and Merchant Services businesses. We believe we have a $6 trillion opportunity and are seeing product market fit and strong customer demand.
Specifically in B2B, our B2B business drove over$ 7 billion of volume into paying accounts in 2023. And we expect volumes to grow by 25% in 2020 for B2B growth accelerated in the second half of 2023, as we saw improved acquisition in the service oriented markets, we are focused upon. We delivered 28% volume growth in A-Pac semi and Lat-Am in 2023. And these fast-growing higher take rates. Regions now make up 42% of B2B volume, up from 35% in 2022 in 2024. We plan to continue focusing our B2B sales efforts on large ICPs in service oriented markets and further differentiate our service level based on customer sites. We also plan to introduce more customer segments, specific pricing within the B2B business to drive greater stickiness and expand on product functionality to better cater to the needs of our larger ICPs. We're confident that successful execution of these initiatives will drive accelerating growth in our B2B business.
Our Merchant Services business ended its first full year with volume growth of over 400%. Fourth quarter volume of over $100 million was up 61% sequentially and included record sales during the Black Friday and Cyber Monday weekend.
Our customers that sell direct to consumers want to receive this portion of their international AR into their pain or account. We believe the $150 billion DTC payments market is a natural extension for Pioneer, given our strong branded relationships with good sellers in these emerging markets. Today, we have over 600 customers in our merchant services business using our checkout product, approximately half of which are net new to pioneer as of December Merchant Services customers on average receive over $60,000 of monthly volume, significantly larger than our ideal customer profile.
As we introduce this product to the market. We anticipate our momentum to continue. We have strong momentum coming into 2024. We are making progress at pace to capture our multiyear opportunity and to more reliably and securely connect the world's 80 million SMBs to the digital global economy.
I'll now hand it over to Bea to discuss financial results and our 2024 guidance in more detail.

Thank you, John, and thank you to everyone for joining us. 2023 was a transformative year for Pioneer. We shifted the company's focus to acquire and better serve ICPs made meaningful progress in optimizing our output and delivered improved operating efficiency. We were excited to hold our first Investor Day in September.
We reintroduced the company to investors and laid out our strategy for capturing the $6 trillion market opportunity. We initiated payments share repurchase program, and we're pleased to announce in December a refreshed authorization to purchase up to $250 million of common stock through the end of 2025.
We focused the Company on delivering sustainable, profitable growth, and we delivered pain and generated 32% revenue growth in 2023 and $205 million of adjusted EBITDA, representing a 25% adjusted EBITDA margin. These results are a testament to the unique value proposition we offer to our customers, SMBs, looking to capture the opportunities of an increasingly digital and increasingly global economy.
Before I turn to our fourth quarter results, I'd like to direct your attention briefly to our earnings supplement presentation, which is available on our website alongside our earnings release, we are committed to continuously enhancing our disclosures and appreciative of the feedback we continue to receive from investors
on page 23 of our supplement, we've included some additional information that breaks out our volume and revenues. We believe this is helpful in showing how the execution of our strategy drives greater volume into the network and delivered improving take rate dynamics. We believe this additional disclosure will enable investors to better model our business going forward.
Now turning to our fourth quarter results, revenue of $224 million was up 22%, driven by interest income on customer funds, continued steady ICP growth, record quarterly card usage and accelerating growth in our B2B and merchant services business.
As a reminder, our Q4 revenue growth rate is impacted by $7.5 million of revenue earned in the prior year period from the provision of onboarding services for an enterprise client. Excluding the impact of this revenue, growth for the fourth quarter would have been 27% volume growth at 16% reflected strong year-over-year volume trends with our SMB customers that sell on marketplaces, particularly larger customers that sell on e-commerce marketplaces as well as accelerating growth in our B2B and Merchant Services businesses.
We also saw continued growth in our enterprise payout volume, which includes travel related volumes. Our B2B business delivered 13% volume growth in the fourth quarter versus 3% growth in the first quarter, a 2% decline in volumes in the second and 1% growth in the third quarter of 2023. We generated volume of over $100 million in our merchant services business, up more than 400% from a year ago and up 61% versus the third quarter.
Fourth-quarter take rate of 118 basis points increased six basis points. Expansion was driven by higher levels of interest income, record quarterly card usage and the benefits of our various pricing initiatives sequentially, take rate declined nine basis points, driven by a seasonal mix shift towards e-commerce and especially towards larger e-commerce sellers.
Our customers value the utility that the paying their account provides including the ability to hold balances in multiple currencies and to manage their cross-border AR and AP needs from a single account customer funds held by PayNet increased 9% to $6.4 billion, and we earned $65 million in interest income from these balances in the fourth quarter. Total operating expenses of $199 million were up 3%, driven by higher transaction costs from strong volumes, increased depreciation and amortization and higher R&D spend related to continued investment in our platform.
This was partially offset by decreases in G&A and other operating expense before 2023. Operating expenses included $3 million related to our efforts to support employees in Israel as well as a $1.5 million contribution to the payment foundation in line with our continued commitment to driving operating leverage. We ended 2023 with 8% less headcount than we began the year. We continue to operate the business with a focus on streamlining the organization, increasing efficiency and aligning our cost structure with our highest value customers and growth opportunity.
Transaction costs of $36 million increased 20%, driven by higher chargebacks and operational losses, some of them one-time as well as higher network fees from record card usage. Transaction costs represented 16.2% of revenue, a 40 basis point improvement from the prior year period. The decrease was driven primarily by higher interest income, one, improved pricing with bank and processing partners and lower capital advance costs also contributed. Sales and marketing expense was roughly flat with higher partner commissions in the current quarter, offset by lower marketing spend.
As a reminder, the fourth quarter of 2022 included certain costs related to a onetime brand campaign, while labor expense was flat year over year, reflecting lower headcount. Sequentially, sales and marketing expense was up 6%, primarily driven from incentive programs to drive card usage as well as other largely seasonal in-country marketing activities.
G&a expense decreased $3 million or 10%, primarily due to higher onetime consulting and organizational expense in the prior year period. Other operating expense was down $2 million or 4%, driven by lower headcount from initiatives undertaken earlier in 2023 to streamline and localize elements of our operations organization. R&d expense increased $2 million, driven by higher compensation expense and IT costs, partially offset by higher capitalization of payroll and third-party costs.
As internal-use software.
We continued to invest in our R&D organization and average headcount was up 13% year over year. Adjusted EBITDA was $52 million compared to $11 million in the prior year period. This represents a 23% adjusted EBITDA margin in the quarter, net income was $27 million compared to a net loss of $10 million in the fourth quarter of last year.
Q4 basic earnings per share was $0.08 and diluted earnings per share was $0.07. We ended the quarter with cash and cash equivalents of $617 million, up $74 million or 14% year over year as our business continues to generate positive free cash flows and our free cash flow conversion is well above 100% for the full year. We have been actively returning capital to shareholders in 2023.
And since the inception of our share repurchase program in May we repurchased $57 million of paying shares, including $22 million in the fourth quarter. We have accelerated the pace of our repurchases following our $250 million authorization in mid-December. And in the first quarter through last Friday, February 23rd, we have repurchased over $30 million of pay initiatives.
Moving now to our 2020 full guidance. For the full year 2024, we expect revenues to be between $875 million and $885 million. This includes $235 million of interest income for the year and $640 million to 650 million of revenue. Excluding interest income,
we expect revenue excluding interest income to grow 7% at the midpoint of our guidance, representing 10% growth when excluding the impact of non-volume enterprise revenues of $15 million in the first half of 2023, we expect revenue growth, excluding interest income to accelerate throughout 2024 and to exit the year in the mid 10s. In line with our medium-term targets.
We expect that acceleration will be driven by continued penetration of the large B2B and direct to consumer markets as well as high single digit volume growth in marketplace related volumes. We expect B2B volumes to grow 25% this year and are seeing impressive performance year to date with volume growth of over 30%.
Our strategy to focus our product road map and acquisition efforts on higher take rates, service oriented market is working. We saw a 16 basis point take rate improvement in our B2B business in 2023, given strong performance in our higher take rate regions, take rates up 2% to 3% in Lat-Am, Sameer and A-Pac versus China.
B2b take rates, which are approximately 50 basis points in 2024, we expect China B2B volume to rebound, which will drive some decrease in B2B take rates overall, while we expect that these take rates will remain significantly higher, then take rates on our non B2B business, we expect our merchant services volume to grow north of 100% this year as we continue to see strong adoption among existing sellers as well as strong demand from new customers in critical markets like China and Vietnam, we grew the number of merchants using our checkout product by more than threefold in 2023.
We also intend to continue implementing changes to our pricing to better align to the customer segments we serve to deliver improved monetization and to drive improved share of wallet capture. We believe we have further opportunity in our pricing strategy to refine our corridor based pricing and to better monetize FX. We continue to test various pricing models related to us significant in network payment volume and believe this represents a meaningful opportunity.
We expect to generate $235 million of interest income for the year, which is modeled based on continued growth in customer balances broadly in line with volumes and probability weighted market interest rate expectations. We are taking steps to further manage and optimize this revenue stream through different interest rate cycles. By prudently extending the duration of our portfolio and investing in longer-dated assets.
As previously discussed, we recently launched a program to begin investing a portion of our customer funds in short duration US treasuries, a very small portion of customer funds has been invested as of today, but we expect to grow this portfolio and potentially extend to other asset classes over the course of the year. And as we further mature the program, we expect transaction costs as a percentage of revenue to be approximately 17.5%, which reflects the impact of shifting our business mix towards higher take rate, but also higher transaction costs, business lines and products like B2B merchant services and cards, 2024 cash OpEx, less anticipated transaction costs is expected to be approximately $540 million, which represents 6% growth over 2023.
Cash OpEx represents our guidance for revenue less adjusted EBITDA. We expect adjusted EBITDA to be between $185 million to $195 million, representing an adjusted EBITDA margin of approximately 23% at the midpoint, our 2023 results demonstrate that our strategy and focus on growing ICPs, optimizing RPU and delivering improving leverage is working.
We plan to continue enhancing our product offerings to deliver value for our customers, expanding our addressable market, optimizing monetization and driving improved retention. We believe our unique assets, the scale and breadth of our ecosystem and relationships position us to further expand our market share and create lasting value for our shareholders.
We are now happy to answer any questions you may have. Operator, please open the line.

Question and Answer Session

Operator

(Operator Instructions)
Our first question comes from the line of Darrin David Peller, Wolfe Research.

Darrin David Peller

Good morning.
And could we just start a little higher level on maybe what what might have changed a bit from the timing of your September Investor Day through today?
In terms of the expectations really for 24 point from I know we expected mid 10s and I think it's at 6% for revenue growth now and then make margins a bit lower. And B, I know you mentioned as the year progressed some of the growth rates getting back to those levels, but maybe just talk about some of the nuances on the year progression also?

Yes, thanks for the question. Down. Look at, as we said in the middle of December, and I was saying today with our guidance and reiterating that guidance from an ex interest income revenue perspective reflects a 10% growth rate at the midpoint, again on a normalized basis. So apples to apples when accounting for the impact of non-volume seats. And as we said, we expect those revenues, as you know, in your question, ex interest income to accelerate throughout the year and to be exiting mid 10s at a mid 10s growth rate when we exit 2024, very much in line with those medium term target as you have two things in our business to sort of broad trends, I think as we lap some of the headwinds that we discussed related to 2023, so we're lapping the termination of B2B customers.
We lapped the termination of our exit from Russia were lapping the impact of those non-volume fees while lapping the take rate impact from very strong growth in our travel sector. So all of those sort of come off of the table, if you like, as you look at 2024 and much more importantly, as we see that accelerating momentum that we've highlighted related to B2B and merchant services, but especially B2B and what our guidance calls for a 25% increase in volume and again, accelerating through the back half of the year.
So our guidance for 24 is really very consistent with what we said in December. We're very encouraged overall with the overall momentum of the business, we're seeing increased penetration into that large B2B market strong and improving take rate dynamics from that B2B growth, stable growth and stable economics in our marketplace business. And overall, many of the indicators that we look for are really showing strong momentum.

Darrin David Peller

I guess my follow-up maybe just be around RPU, which was a big part of your story and underlying expectations for growth also on.
So maybe just it continues.
I know you still have quite a few levers on pricing. So just maybe a quick update on where you guys executing some of the account fees or lower volume fees or KT monetizing Internet work, cross border volumes to help drive some of the some more take rate expansion there?

Yes, absolutely. Look, as we noted at Investor Day, our pricing strategy is really much more segment-based and really focused on optimizing our pool is sort of the second leg of the stool, if you like, growing ICPs, optimizing our pool. And there's really strong signs that that strategy's working early signs. We grew our proven 2023 overall by 36%. We grew our Polk RPU, even excluding interest income by 9% from that acceleration in B-to-B, driving improved card and working capital.
And as you know, from pricing, so you have looked at a broader pricing strategy, much more segment focused, much more focused on bundling and corridor based pricing initiatives. And we've been able to drive improved monetization through that and made really very meaningful progress in 23.
As you noted, accounting fees, we talked about last year, we were able to increase our pool on our $1.5 million ICPs by almost 30% year over year. We've introduced more nuanced FX pricing, which drove uplift in 23 and we see additional uplift in '24.
We launched our lighthouse account late last year, which is specifically designed for gig workers and freelancers and offers a different product bundle, which allows us to better manage our cost to serve and differentiated pricing to better monetize that segment. And we're doing additional development to really bundle for more segments as we look into '24.
And then finally, you mentioned the significant opportunity around Internet Web fees. We highlighted that at Investor Day, many, many billions of Internet work flow that we see annually close to half or more than half of that slow is cross border. And we're launching in Q2 a significant pilot to test interim network fees across some of those important routes and see significant opportunity there within our within our portfolio.
So overall, I think we saw significant success and meaningful progress in '23, but there's more value to unlock, Darren.

Operator

Our next question comes from the line of William Alfred Nance - Goldman Sachs. Your line is open.
Hey, guys.

Research Division

I appreciate you taking the questions. Look, I just wanted to ask on the long-term targets of mid 10s, recognizing you're telegraphing ending the year on that basis, you know, I guess could you maybe talk about the gap in the first part of the year between where you're where you're expecting to grow and that long-term target?
And I guess in your mind, what are the two or three things that I guess are underperforming relative to that long-term growth framework? And then just how should investors kind of get confidence that that 15% exit rate is sustainable, particularly if there's some pricing benefits in those numbers? Or how do you see the bridge to a more consistent mid-teens growth rate in the business?
Thanks.

Should you look at as we've said, that 10% growth on a normalized basis year over year does imply, and we are assuming strong trajectory throughout the year and acceleration. We do have certain headwinds that come off only after the second quarter, most notably those non-volume fees that are about a $15 million headwind in terms of those fees that we saw in early 2023.
In terms of the momentum look, as we've highlighted, the significant headwinds that impacted us in 23, both from a volume and a take rate perspective that are coming off our revenue guide for 24 certainly does account for some potential to modest near term headwinds from more muted consumer and business spending just to account for really some degree of macro and geopolitical uncertainty.
'But overall as we look at that guidance and to double-click into the components of that, if we look at the volume from SMB selling on marketplaces, a little over 60% of our total volume in 23. We're expecting and have have conviction around high single digit volume growth, really underpinned by strong e-com performance over the course of the year.
And we've seen I'd expect stable take rate. We've been very successful in defending our economics within that portfolio and holding that state that take rate stable. From a B2B perspective, we really are seeing improving trajectory there, again, lapping those headwinds from terminations. But as we look at the trajectory over the course of '23 and now into '24 in January, we grew volumes by 30%.
Our strategy there is working. We focused the organization from a B2B perspective on large ICPs and service-oriented markets were driving additional volume, and we were able to expand our take rate in that important segment for us by 16 basis points in '23.

Research Division

Got it. Appreciate it.

You might expect that December just from a service oriented flow might be seasonally a little bit weaker. But overall, again, we want to emphasize that the trajectory is what we think is important up 3% from a volume perspective to one down 2%, Q2, up 1% in Q3 and accelerating to 13% in Q4. 30% is a year to date numbers from a volume perspective.
So we're seeing really strong momentum and really strong signs that that business has excellent product market fit in the markets that we are targeting and drives improving dynamics, which is really the additional disclosure that we put in the supplement to really disaggregate it. This business in large part is to demonstrate the positive impact to take rate. That mix shift into B2B is driving over the long term.

Research Division

Thank you, Will.

Operator

Our next question comes from the line of Trevor Ellis Williams, Jefferies
Great.

Trevor Ellis Williams

Thanks a lot. And I wanted to go back to the '24 revenue outlook as well and all the detail be that you ran through just on the underlying components.
That's all super helpful.
But maybe at a higher level, I'd be curious to hear how you'd frame, at least on the ex float outlook, how you'd frame the level of conservatism in the outlook. And as you sit here today with the visibility that you have in the business on the quarter-to-date trends, it sounds like maybe there's a little bit of cushion built in on the macro, but would be helpful to hear if there's anything else worth calling out just in terms of overall conservatism?
Thanks.

I look, I think you've read through to what we said, right, some amount of modest near term headwinds have factored in, as you would expect, just from a sort of prudence perspective for us to be guiding to in the beginning part of the year, there's still significant geopolitical uncertainty right. And despite very strong e-comm numbers in December, there's still some lingering concern about the health of the US consumer and some of the other developed economies. So some near term potential for headwinds from more muted consumer and business spending.
Overall, from a macro perspective, look at the guide assumes that volumes from our SMB selling on marketplaces grow high single digits supported by strong e-comm accelerating towards the back half of the year, both seasonally and in general from an interest rate. I know you said sort of ex interest, but interest rates in line with market expectations with all of the potential impact that that could have to consumers spending overall.

Trevor Ellis Williams

Okay.
That's all that's all helpful on. And then, John, I want to go back to checkout and merchant services. Maybe if you could just revisit that opportunity more broadly, the incremental disclosure is all helpful. I know you guys laid out what the underlying expectation is for '24, but maybe just a refresh on the out of the ideal customer profile for that service, in particular, where you've seen really good traction to date?
I guess the expectation for '24 is just kind of more tapping into that part of the customer base or there some kind of expansion in terms of customer types or geographies expected for this year? Thanks.
You bet.

Thanks for the question. So we or what we what we saw from our customers that sell primarily goods on large marketplaces is they wanted pay near to be able to power their direct to consumer checkout and because they wanted all of their international AR to enter their Pioneer accounts so they could leverage the use of our AP tools. And we think this is a very significant opportunity for us to extend our capabilities and our strength with those Marketplace sellers.
We currently have less than 1% market share of this $150 billion market. We have strong acquisition, as we said, strong product market fit, great leadership of that group of 600 plus active merchants monthly volume greater than $60,000, up more than three times year over year. And I note in my prepared remarks, 50% of and customers through checkout are net new to pain there.
And this is significant because we're competing in in markets like China, Vietnam, where we've held our take rate in a strong way. And now we're adding new products and services as we look to lock in and retain customers and gain share in the market. So we're bringing new customers to the business new AR into our existing customers. And those net new customers we add are also using ARM by not just joining pioneer for checkout, joining Pioneer to leverage our marketplace payouts and our AP tool. So all in all, we see this as a big opportunity, a significant one.
We have partnerships with Shopify shop Plaza and will commerce. And this is a big business for us. It's small today, but we'll grow and I'm proud of what the team's done and we'll continue to drive its growth.

Trevor Ellis Williams

Thank you, Trevor.

Operator

Our next question goes to the line of Joshua Michael Siegler, Cantor Fitzgerald

Joshua Michael Siegler

Hi, guys, good morning. Thanks for taking my call today. So look throughout 2023, obviously, there was a pretty significant tailwind associated with interest income, which is real cash in the door, and we've seen that cash balance increase over time.
I was wondering, as you're looking at 2024, how you're thinking about allocating that cash between returning it to shareholders, reinvesting in the business and inorganic opportunities?
Thanks.

Thanks for the question, Josh. Look, at the, you know, significant free cash flow coming to the business in '23 continues to be significant in '24. And frankly, given interest rate outlooks beyond that, puts us in a really strong position to do all of the things that you've said right, one to return capital to investors. As we noted in our prepared remarks, we kicked off a share repurchase program in May. We repurchased $57 million last year, including $22 million in Q4, we announced a refresh to have that authorization back in December over the next two years for $250 million.
But it really obviously reflects our confidence in the long-term opportunity and strategy, and we accelerated our repurchases through the year to date. So year to date through last Friday, more than $30 million. So we will actively return cash to investors. We expect to be more aggressive in '24 than we were in '23 in terms of doing more than offsetting dilution from stock-based comp. And then from an investment perspective, look what we're making, we talked about it in '23.
We made significant investments in our platform in '23 in our data infrastructure in our infrastructure, more generally to enable greater velocity and product rollouts in our compliance infrastructure to extend our moat in our B-to-B road roadmap to drive more company great features and capture more of that very large addressable market in our merchant services business, as you've just heard from from John, and we're going to continue to do that because we're bullish on the opportunity. We're going to continue to make investments to capture that opportunity.
We announced in our press release, we noted in our press release that we've made some significant hires into that organization. They're going to help us unlock value and really drive towards that opportunity. So we're excited to make those investments that we think really position us to drive growth over the long term.

Joshua Michael Siegler

Got it. Thanks.
We appreciate the color there. And then I think you earlier you touched on travel volume. Can you give us an update on how you're thinking about the travel volume outlook for planes going forward.

So we would expect some moderating in that travel volume. So the travel volume sits from a disclosure perspective within that supplement on page 23 within that volume from enterprise customers. So as we've highlighted over the past couple of calls, this is volume that we facilitate through our payment rails for large enterprise customers that has proportionately a lower take rate, but also a very different profile from that risk and cost-to-serve perspective. So that is that volume that you see in that line. That is not all travel, but it's a large component of that.
Overall enterprise payout business is travel lower, take rate. We saw significant growth in that bucket, largely travel driven in 2023. It did, as we highlighted, put some downward pressure on take rate overall, which is why I think it's super helpful to disaggregate take rate on our customer business, while we grew modestly in '23 and take rate on our payout business, when we saw that compression, as we look out to '24, we would expect growth in that travel volume overall, but not at such an accelerated pace as we saw in '23.
There's some leveling off there, I think of trends in the market more generally but still an important segment for us, as I say, lower take rate, but very different sort of risk and cost to serve dynamics. So we're very comfortable with that volume.
Thank you, Josh.

Operator

Our last question will go to the line of Chris Kennedy with William Blair. Your line is open.

Chris Kennedy

Good morning.
Thanks for taking the question and for the new disclosure John, can you talk about the competitive moat for pain here today versus a couple of years ago? And what's your did I thinking in that?
Yes.

Thanks for the question. I am really excited about where we sit with our relationships with our SMB customers. I think the moat we have starts with our relationship with them, 2 million active customers, 500,000 plus ICPs, about 55,000 plus high-value ICPs. These are customers that are using pioneer and the pain your account to capture their internationally are folded in multi currencies and manage our international AP. That relationship with those customers is really powerful as an ally to them. We are providing them the gateway to the global economy.
And I think that relationship and we did an event in China a couple of weeks ago and over 1,000, our customers were in the room talking about participating in the global economy. And I think the momentum we have in B to B & APACMEA. and Latin America, the volume, the new disclosure that helps people see the power of our relationship with our customers and therefore take rate dynamics. I think that's important for shareholders to understand right, our business has two components. An enterprise component is be just very articulately share the volume and take rate dynamics there and an SMB customer die of business, which is about ICPs and RPU and volume into the paying user account.
So our moat is strong with our customers.
It's strong with regulators is strong with our go to market engine is strong with the balances we hold from customer funds. And at the end of the day, the team here, Pioneer organizations, an extraordinary one. I've been CEO for just about a year, and I can tell you the thing that surprised me the most in the last year is our opportunity is greater. Our momentum is stronger and our team has the capability to capture it. And so right from where I sit, we're in a very strong position to capture the global opportunity right in front of us, and there are $80 million customer agreement to serve.

Chris Kennedy

Right.
Very clear. Thanks for taking the questions.

Operator

Thank you.
There are no additional questions waiting at this time. So I'll pass the conference back over to John Caplan, CEO for closing remarks.

Thank you so much. Thanks, everybody, for your support and your questions. And we're excited about pain. There's opportunity in 2024 and beyond, and we appreciate your support.
We're confident in the strategy we've laid out, we believe, in our team, our brand and our opportunity. This is a $6 trillion opportunity that we are best positioned to go capture. And there is exciting growth happening within our business and by disclosing as we did on slide 23 of that disclosure, B reference, you can see the fast-growing businesses built within the pain or platform that will power our growth through the 2024 year and beyond. So thank you for joining us, and thank you for your support.

Operator

That concludes today's conference call. Thank you for your participation. I hope you have a wonderful rest.
Of your day.
Yes.