EX-99.1 2 a2023_q2xnuveicorporationx.htm EX-99.1 Document


EXHIBIT 99.1
logoa.jpg
Condensed Interim Consolidated Financial Statements
Nuvei Corporation
(Unaudited)
For the three and six months ended June 30, 2023 and 2022
(in thousands of US dollars)



Table of Contents
Pages
Condensed Interim Consolidated Financial Statements
Notes to Condensed Interim Consolidated Financial Statements
1 Reporting entity
2 Basis of preparation and consolidation
3 Significant accounting policies and new accounting standards
4 Business combinations
5 Trade and other receivables
6 Trade and other payables
7 Loans and borrowings
8 Share capital
9 Revenue and expenses by nature
10 Net finance cost (income)
11 Share-based payment arrangements
12 Net income per share
13 Determination of fair values
14 Related party transactions
15 Supplementary cash flow disclosure
16 Contingencies
17 Subsequent event




Nuvei Corporation
Consolidated Statements of Financial Position
(Unaudited)
(in thousands of US dollars)
Notes
June 30,
2023		December 31,
2022
$$
Assets





Current assets


Cash and cash equivalents

118,382 751,686 
Trade and other receivables5100,170 61,228 
Inventory2,352 2,117 
Prepaid expenses

16,730 12,254 
Income taxes receivable
 
2,963 3,126 
Current portion of advances to third parties36 579 
Current portion of contract assets

1,291 1,215 



Total current assets before segregated funds

241,924 832,205 
Segregated funds

827,075 823,666 


Total current assets

1,068,999 1,655,871 



Non-current assets


Advances to third parties— 1,721 
Property and equipment37,187 31,881 
Intangible assets41,344,568 694,995 
Goodwill41,983,727 1,114,593 
Deferred tax assets41,455 17,172 
Contract assets

778 997 
Processor and other deposits

4,956 4,757 
Other non-current assets
13
35,539 2,682 



Total Assets

4,477,209 3,524,669 
3

Nuvei Corporation
Consolidated Statements of Financial Position
(Unaudited)
(in thousands of US dollars)
Notes
June 30,
2023		December 31,
2022
$$
Liabilities





Current liabilities


Trade and other payables6164,592 125,533 
Income taxes payable
 
22,329 16,864 
Current portion of loans and borrowings741,375 8,652 
Other current liabilities8,091 4,224 
Total current liabilities before due to merchants

236,387 155,273 
Due to merchants

827,075 823,666 
Total current liabilities

1,063,462 978,939 
Non-current liabilities


Loans and borrowings71,234,102 502,102 
Deferred tax liabilities4164,312 61,704 
Other non-current liabilities2,763 2,434 
Total Liabilities

2,464,639 1,545,179 



Equity





Equity attributable to shareholders


Share capital81,955,991 1,972,592 
Contributed surplus

274,891 202,435 
Deficit

(188,825)(166,877)
Accumulated other comprehensive loss

(43,429)(39,419)


1,998,628 1,968,731 
Non-controlling interest
13,942 10,759 
Total Equity

2,012,570 1,979,490 


Total Liabilities and Equity

4,477,209 3,524,669 
Contingencies
16
Subsequent event17
The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.
4

Nuvei Corporation
Consolidated Statements of Profit or Loss and Comprehensive Income or Loss
(Unaudited)
For the three and six months ended June 30
(in thousands of US dollars, except for per share amounts)

Three months ended
June 30		Six months ended
June 30
2023202220232022
Notes$$$$
Revenue9307,026 211,294 563,524 425,838 
Cost of revenue953,926 35,980 108,522 82,896 
Gross profit253,100 175,314 455,002 342,942 
Selling, general and administrative expenses9221,755 146,505 416,373 293,317 
Operating profit31,345 28,809 38,629 49,625 
Finance income10(961)(1,665)(6,336)(2,296)
Finance cost (recovery)1029,318 (1,973)47,786 5,768 
Net finance cost (income)28,357 (3,638)41,450 3,472 
Gain on foreign currency exchange(11,115)(8,467)(12,513)(7,887)
Income before income tax14,103 40,914 9,692 54,040 
Income tax expense2,486 5,831 6,364 14,443 
Net income11,617 35,083 3,328 39,597 
Other comprehensive income (loss), net of tax
Item that may be reclassified subsequently to profit and loss
Foreign operations – foreign currency translation differences(9,068)(25,593)(4,010)(30,455)
Comprehensive income (loss)2,549 9,490 (682)9,142 
Net income attributable to:
Common shareholders of the Company9,923 33,979 145 36,982 
Non-controlling interest1,694 1,104 3,183 2,615 
11,617 35,083 3,328 39,597 
Comprehensive income (loss) attributable to:
Common shareholders of the Company855 8,386 (3,865)6,527 
Non-controlling interest1,694 1,104 3,183 2,615 
2,549 9,490 (682)9,142 
Net income per share12
Net income per share attributable to common shareholders of the Company
Basic0.07 0.24 — 0.26 
Diluted0.07 0.23 — 0.25 
The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.
5

Nuvei Corporation
Consolidated Statements of Cash Flows
(Unaudited)
For the six months ended June 30
(in thousands of US dollars)
20232022
Notes$$
Cash flow from operating activities
Net income3,328 39,597 
Adjustments for:
Depreciation of property and equipment6,811 3,720 
Amortization of intangible assets56,770 49,769 
Amortization of contract assets758 913 
Share-based payments
9
71,442 69,851 
Net finance cost1041,450 3,472 
Gain on foreign currency exchange(12,513)(7,887)
Income tax expense6,364 14,443 
Changes in non-cash working capital items15(8,430)(4,819)
Interest paid(42,769)(8,805)
Interest received7,5601,241 
Income taxes paid - net(13,927)(4,272)

116,844 157,223 
Cash flow used in investing activities
Business acquisitions, net of cash acquired
4
(1,379,778)— 
Acquisition of property and equipment(5,902)(4,662)
Acquisition of intangible assets(21,143)(16,425)
Acquisition of distributor commissions(20,318)— 
Increase in other non-current assets13(31,816)(965)
Net decrease in advances to third parties245 1,566 

(1,458,712)(20,486)
Cash flow from (used in) financing activities
Shares repurchased and cancelled
8
(56,042)(109,158)
Transaction costs from issuance of shares— (626)
Proceeds from exercise of stock options86,399 1,129 
Repayment of loans and borrowings7(76,560)(2,560)
Proceeds from loans and borrowings7852,000 — 
Transaction costs related to loans and borrowings7(14,650)— 
Payment of lease liabilities(2,622)(1,682)
Purchase of non-controlling interest— (39,751)
Dividend paid by subsidiary to non-controlling interest— (260)

708,525 (152,908)
Effect of movements in exchange rates on cash39 (10,785)
Net decrease in cash and cash equivalents(633,304)(26,956)
Cash and cash equivalents – Beginning of period751,686 748,576 
Cash and cash equivalents – End of period118,382 721,620 
The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.
6

Nuvei Corporation
Consolidated Statements of Changes in Equity
(Unaudited)
For the six months ended June 30
(in thousands of US dollars)
Attributable to shareholders of the CompanyNon-
Controlling interest		Total equity
NotesShare
capital		Contributed
surplus		DeficitAccumulated
other
comprehensive
 loss
$$$$$$
Balance as at January 1, 20222,057,105 69,943 (108,749)(8,561)12,102 2,021,840 

Contributions and distributions
Exercise of equity-settled share-based payments1,344 (215)— — — 1,129 
Equity-settled share-based payments— 69,851 — — — 69,851 
Tax effect - equity-settled share-based payments— (2,410)— — — (2,410)
Shares repurchased and cancelled(29,094)— (43,290)— — (72,384)
Effect of share repurchase liability(14,672)— (27,812)— — (42,484)
Dividend paid by subsidiary to non-controlling interest— — — — (260)(260)
Effect of purchase of non-controlling interest, net of tax— — (33,445)— (6,306)(39,751)
Net income and comprehensive income

— — 36,982 (30,455)2,615 9,142 
Balance as at June 30, 2022

2,014,683 137,169 (176,314)(39,016)8,151 1,944,673 

Balance as at January 1, 20231,972,592 202,435 (166,877)(39,419)10,759 1,979,490 

Contributions and distributions
Exercise of equity-settled share-based payments
8, 11
16,777 (10,378)— — — 6,399 
Equity-settled share-based payments
4, 11
— 81,127 — — — 81,127 
Tax effect - equity-settled share-based payments— 1,707 — — — 1,707 
Effect of share repurchase liability
8
(33,378)— (22,093)— — (55,471)
Net income and comprehensive loss

— — 145 (4,010)3,183 (682)
Balance as at June 30, 2023

1,955,991 274,891 (188,825)(43,429)13,942 2,012,570 
The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.
7

Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)

1. Reporting entity
Nuvei Corporation (“Nuvei” or the “Company”) is a global payment technology provider to businesses across North America, Europe, Middle East and Africa, Latin America and Asia Pacific and is domiciled in Canada with its registered office located at 1100 René-Lévesque Blvd., 9th floor, Montreal, Quebec, Canada. Nuvei is the ultimate parent of the group and was incorporated on September 1, 2017 under the Canada Business Corporations Act (“CBCA”).
The Company's Subordinate Voting Shares are listed on the Toronto Stock Exchange ("TSX") and on the Nasdaq Global Select Market ("Nasdaq") both under the symbol "NVEI".
2. Basis of preparation and consolidation
Statement of compliance
These Condensed Interim Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) applicable to the preparation of interim financial statements, including International Accounting Standard ("IAS") 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”). Certain information and disclosures have been omitted or condensed. The accounting policies and methods of computation described in the audited annual consolidated financial statements for the year ended December 31, 2022 were applied consistently in the preparation of these condensed interim consolidated financial statements. Accordingly, these Condensed Interim Consolidated Financial Statements should be read together with the Company’s audited annual consolidated financial statements for the year ended December 31, 2022.
The Condensed Interim Consolidated Financial Statements as at and for the three and six months ended June 30, 2023 were authorized for issue by the Company’s Board of Directors on August 9, 2023.
Operating segment
The Company has one reportable segment for the provision of payment technology solutions to merchants and partners.
Seasonality of interim operations
The operations of the Company can be seasonal, and the results of operations for any interim period are not necessarily indicative of operations for the full year or any future period.
Estimates, judgments and assumptions
The preparation of these Condensed Interim Consolidated Financial Statements in conformity with IFRS requires management to make estimates, judgments and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The significant estimates, judgments and assumptions made by management are the same as those applied and described in the Company's audited annual consolidated financial statements for the year ended December 31, 2022.
3. Significant accounting policies and new accounting standards
The accounting policies used in these interim financial statements are consistent with those applied and disclosed in the Company's audited annual consolidated financial statements for the year ended December 31, 2022.
8

Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
New accounting standards and interpretations adopted
Amendments to IAS 12 Income taxes
These amendments provide a temporary relief from the requirement to recognize deferred income taxes arising from the Organisation for Economic Co-operation and Development's enacted or substantively enacted Pillar Two Model rules. The Company has applied these amendments.
New accounting standards and interpretations issued but not yet adopted
The IASB has issued new standards and amendments to existing standards which are applicable to the Company in future periods. There were no significant updates to the standards and interpretations issued but not yet adopted described in the Company's audited annual consolidated financial statements for the year ended December 31, 2022.
4. Business combinations
Transactions for the six months ended June 30, 2023
Paya Holdings Inc.
On February 22, 2023, the Company acquired 100% of the shares of Paya Holdings Inc. ("Paya"), a leading U.S. provider of integrated payment and frictionless commerce solutions, for a total consideration of $1,401,121, comprised of $1,391,435 in cash and $9,686 of the portion of replacement share-based awards that was considered part of the consideration transferred. The cash consideration included the settlement by the Company of seller-related payments of $51,876 paid by Paya immediately prior to closing and thereby increased the calculated purchase price. The Company determined that the transaction met the definition of a business combination. Acquisition costs of $15,470 have been expensed during the six months ended June 30, 2023. For the period from the acquisition date to June 30, 2023, Paya contributed revenue of $106,158 and net income of $9,299. The net income includes the amortization of identifiable intangible assets acquired.
Assuming this business combination would have been completed on January 1, 2023, Paya would have contributed pro forma revenue of approximately $146,076 and pro forma net income of approximately $10,019 for the six months ended June 30, 2023. In determining these amounts, the Company assumed that the fair value adjustments, determined provisionally, that arose on the date of acquisition would have been the same if the acquisition had occurred on January 1, 2023. In order to align with the Company's presentation, Paya's revenue contribution amounts are presented net of interchange fees, which was not the case for a small portion of fees prior to its acquisition by the Company.
Paya has become part of the Company's United States federal consolidated tax group. During the six months ended June 30, 2023, this resulted in the set-off of deferred tax assets of the Company with the deferred tax liabilities of Paya.
Since the initial purchase price allocation was recognized, the portion of replacement share-based awards that was considered part of the consideration transferred has been increased by $2,641, current assets decreased by $992, current liabilities increased by $1,015 and deferred tax liabilities decreased by $506 relating to new information obtained about facts and circumstances that existed at the time of acquisition. Those adjustments to the provisional amounts have been recorded with a corresponding impact on goodwill of $4,142.
9


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
Other
On March 1, 2023, the Company acquired certain assets of a service provider. The Company determined that the transaction met the definition of a business combination. The total cash consideration for this acquisition was $10,000. Acquisition costs of $129 have been expensed during the six months ended June 30, 2023. For the period from the acquisition date to June 30, 2023, those assets contributed revenue of $522 and net loss of $1,145. The net loss includes the amortization of identifiable intangible assets acquired resulting from the transaction on March 1, 2023.
Assuming this business combination would have been completed on January 1, 2023, the Company estimates that those assets would have contributed pro forma revenue of $794 and pro forma net loss of $1,881 for the six months ended June 30, 2023. In determining these amounts, the Company has assumed that the fair value adjustments, determined provisionally, that arose on the date of acquisition would have been the same if the acquisition had occurred on January 1, 2023.

10


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
Preliminary Purchase Price Allocation
The following table summarizes the preliminary amounts of assets acquired and liabilities assumed at the acquisition date for acquisitions in the six months ended June 30, 2023:
Paya
$		Other
$		Total
$
Assets acquired
Cash21,657 — 21,657 
Segregated funds244,798 — 244,798 
Trade and other receivables23,555 — 23,555 
Inventory293 — 293 
Prepaid expenses2,816 — 2,816 
Property and equipment5,419 12 5,431 
Processor deposits385 — 385 
Intangible assets
Software3,131 — 3,131 
Trademarks16,607 — 16,607 
Technologies178,173 6,908 185,081 
Partner and merchant relationships455,364 — 455,364 
Goodwill1
862,859 3,193 866,052 
1,815,057 10,113 1,825,170 
Liabilities assumed
Trade and other payables(30,037)(113)(30,150)
Current portion of loans and borrowings(1,142)— (1,142)
Other current liabilities(2,842)— (2,842)
Due to merchants(244,798)— (244,798)
Income taxes payable(2,652)— (2,652)
Loans and borrowings(2,492)— (2,492)
Deferred tax liabilities(129,973)— (129,973)
(413,936)(113)(414,049)
Total consideration
Cash paid1,391,435 10,000 1,401,435 
Share-based payments (note 11)9,686 — 9,686 
1,401,121 10,000 1,411,121 
1 Goodwill mainly consists of future growth, assembled workforce and expected synergies, which were not recorded separately since they did not meet the recognition criteria for identifiable intangible assets. Goodwill arising from the Paya acquisition is not deductible for income tax purposes.
11


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
5. Trade and other receivables
June 30,
2023		December 31,
2022
$
$
Trade receivables65,116 36,298 
Due from processing banks22,560 19,133 
Other receivables12,494 5,797 
Total100,170 61,228 
6. Trade and other payables
Trade and other payables comprise the following:
June 30,
2023		December 31, 2022
$$
Trade payables74,083 43,813 
Accrued bonuses and other compensation-related liabilities46,584 36,379 
Sales tax payable7,756 8,007 
Interest payable525 458 
Due to processors8,041 6,923 
Due to merchants not related to segregated funds17,540 20,076 
Other accrued liabilities10,063 9,877 

164,592 125,533 
12


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
7. Loans and borrowings
The terms and conditions of the Company’s loans and borrowings are as follows:
June 30,
2023		December 31,
2022
NotesFacilityCarrying
amount		FacilityCarrying
amount
$$$$
Amended and restated credit facility(a)
Term loan facilities501,732 496,762 504,292 498,199 
Revolving credit facility385,000 — 385,000 — 
New reducing revolving credit facility(b)778,000 763,926 — — 
Total credit facilities1,260,688 498,199 

Lease liabilities14,789 12,555 

1,275,477 510,754 
Current portion of loans and borrowings(41,375)(8,652)
Loans and borrowings1,234,102 502,102 
Facility amount represents the principal amount of the credit facility. The carrying amount of loans and borrowings is presented net of unamortized transaction costs. Transaction costs relating to the issuance of loans and borrowings are amortized over the term of the debt using the effective interest rate method.
a)Amended and restated credit facility
The outstanding principal of the term loan is payable quarterly at an annual rate of 1.00% and the remaining balance is payable at maturity on September 28, 2025. The revolving facility matures on September 28, 2024. The Amended and restated credit facility is secured by all current and future assets of the Company and its existing and future subsidiaries.
i)Loans drawn in US dollars under the First Lien Credit facilities bear interest at the ABR1 plus 1.50% or the adjusted eurocurrency2 rate plus 2.50%. As at June 30, 2023, the outstanding Term loan facilities interest rate was 7.72% (December 31, 2022 – 6.89%).
ii)Loans drawn in Canadian dollars under the First Lien Credit facilities bear interest at the Canadian prime rate plus 1.50% or banker’s acceptance rate plus 2.50%. As at June 30, 2023 and December 31, 2022 there was no loan denominated in Canadian dollars.
iii)LIBOR is no longer available following the benchmark reform and was replaced by the Term Secured Overnight Financing Rate (“SOFR”). For the term loan facilities, LIBOR for the interest computation was replaced by the sums of: a) Term SOFR; and b) 0.11% for interest period of one-month, 0.26% for interest period of three months or 0.43% for interest period of six months. For the revolving credit facility, LIBOR was replaced by the sums of: a) Term SOFR; and b) 0.10%.
1 The Alternate Base Rate is defined as a rate per annum equal to the higher of a) Federal funds effective rate + 0.5%; b) LIBOR plus 1%; c) Prime rate; and d) 1.50%.
2 The adjusted Eurocurrency rate is defined as an interest rate per annum equal to the greater of: a) the Eurocurrency rate multiplied by the Statutory Reserve rate and b) 0.50%.

13


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
b) New reducing revolving credit facility
On February 22, 2023, concurrent with the completion of the Paya acquisition (Note 4), the Company entered into a new reducing revolving credit facility in an amount of $800,000. Commencing on June 30, 2023, the commitments in respect of this facility will automatically be permanently reduced by $10 million on the last day of each fiscal quarter. The maturity date of this facility is September 28, 2025. Until the delivery of the Company's financial statements for the quarter ending September 30, 2023, borrowings under the new reducing revolving credit facility bear interest, at the Company's option, at either (a) Term SOFR (including a 0.10% credit spread adjustment) plus a margin of 3.00% or (b) the Alternate base rate1 plus a margin of 2.00%. Thereafter, borrowings under the new reducing revolving credit facility will bear interest, at the Company's option, at either (a) Term SOFR (including a 0.10% credit spread adjustment) plus a margin ranging from 2.5% to 3.25% or (b) the Alternate base rate1 plus a margin ranging from 1.50% to 2.25%, in each case, based on a first lien leverage ratio. As at June 30, 2023, the new reducing revolving credit facility interest rate was 8.20%.
The new reducing revolving credit facility is secured by all current and future assets of the Company and its existing and future subsidiaries. The continued availability of the new reducing revolving facility is subject to the Company's ability to maintain a total leverage ratio of less than or equal to 4.50 : 1.00 for the test period before September 30, 2023, and with the ratio decreasing by 0.25 on October 1, 2023 and every six months thereafter, until it reaches 3.50 : 1.00 on March 31, 2025. The total leverage ratio considers the Company's consolidated net debt, calculated as long-term debt less unrestricted cash, to consolidated adjusted EBITDA, calculated in accordance with the terms of the agreement. The Company must also maintain its interest coverage ratio above 2.50 : 1.00. The interest coverage ratio considers the Company's consolidated adjusted EBITDA, calculated in accordance with the terms of the agreement, to consolidated cash interest expense. The Company was in compliance with all applicable covenants as at June 30, 2023.

1 The Alternate Base Rate is defined as a rate per annum equal to the higher of a) Federal funds effective rate + 0.5%; b) Adjusted Term Secured Overnight Financing Rate (“SOFR”) effective plus 1.00%; (c) Prime Rate; and (d) 1.00%.
8. Share capital
On March 20, 2023, the Board approved a normal-course issuer bid ("NCIB") to purchase for cancellation a maximum of 5,556,604 Subordinate Voting Shares, representing approximately 10% of the Company’s Subordinate Voting Shares as at March 8, 2023. The Company is authorized to make purchases under the NCIB during the period from March 22, 2023 to March 21, 2024 in accordance with the requirements of the Toronto Stock Exchange ("TSX") and the Nasdaq and applicable securities laws. During the six months ended June 30, 2023, the Company repurchased and cancelled 1,350,000 Subordinate Voting Shares for a total consideration, including transaction costs, of $56,042.
The Company also issued 815,201 Subordinate Voting Shares for a cash consideration of $6,399 during the six months ended June 30, 2023 following the exercise of stock options and the settlement of Restricted Share Units ("RSUs").
There were 76,064,619 Multiple Voting Shares and 62,926,809 Subordinate Voting Shares outstanding as at June 30, 2023.
14


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
Share repurchase liability
In March 2023, the Company entered into an automatic share purchase plan ("ASPP") with a third-party broker for the Company to allow for the purchase of Subordinate Voting Shares under the NCIB during the Company's blackout periods. Under this agreement, the broker was authorized to repurchase Subordinate Voting Shares, without consultation with the Company, subject to predefined share price and other limitations imposed by the Company and subject to rules and policies of the TSX and the Nasdaq and applicable securities laws, such as a daily purchase restriction. The Company recognized a share repurchase liability on that date. The fair value of the share repurchase liability was determined using the Company's quoted share price.
During the six months ended June 30, 2023, shares were repurchased and cancelled under the ASPP for a cash consideration of $56,042. The change in fair value of share repurchase liability during the six months ended June 30, 2023 was a loss of $571.
9. Revenue and expenses by nature
Three months ended
June 30		Six months ended
June 30

2023202220232022
$$$$
Revenue
Merchant transaction and processing services revenue304,935 209,121 559,448 421,533 
Other revenue2,091 2,173 4,076 4,305 

307,026 211,294 563,524 425,838 
Cost of revenue
Processing cost52,729 34,806 106,223 80,660 
Cost of goods sold1,197 1,174 2,299 2,236 

53,926 35,980 108,522 82,896 
Selling, general and administrative expenses
Commissions60,268 29,757 98,567 57,555 
Employee compensation53,409 37,443 99,130 75,242 
Share-based payments35,869 32,664 71,442 69,851 
Depreciation and amortization35,925 27,046 63,581 53,489 
Professional fees11,327 4,784 39,992 12,434 
Transaction losses (recovery)1,842 (379)3,535 (1,772)
Contingent consideration adjustment— (504)— (504)
Other23,115 15,694 40,126 27,022 

221,755 146,505 416,373 293,317 
15


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
10. Net finance cost (income)
Three months ended
June 30		Six months ended
June 30

2023202220232022
$$$$
Finance income

Interest on advances to third parties and interest income(961)(1,665)(6,336)(2,296)

Finance cost (recovery)
Interest on loans and borrowings (excluding lease liabilities)28,751 5,259 46,358 10,152 
Change in fair value of share repurchase liability— (7,884)571 (5,710)
Interest expense on lease liabilities177 159 349 265 
Other interest expense390 493 508 1,061 

29,318 (1,973)47,786 5,768 
Net finance cost (income)28,357 (3,638)41,450 3,472 
11. Share-based payment arrangements
The Omnibus Incentive Plan permits the Board of Directors to grant awards of options, RSUs, Performance Share Units ("PSUs") and Deferred Share Units (“DSUs”) to eligible participants.
RSUs, PSUs and DSUs will be settled by the issuance of shares at the settlement date. DSUs vest immediately as they are granted for past services. The RSUs and PSUs vest over a period of up to three years.
Share-based payments continuity
The table below summarizes the changes in the outstanding RSUs, PSUs, DSUs, and stock options for the six months ended June 30, 2023:
16


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
Stock options
Restricted share unitsPerformance share unitsDeferred share unitsQuantityWeighted
average
exercise
price
$
Outstanding, beginning of period
3,892,643
1,778,431 48,596 8,594,289 56.24 
Forfeited(266,888)(454,132)— (142,597)81.53 
Replacement awards in a business combination909,735 — — 414,606 19.71 
Granted783,151 — 22,758 49,068 28.75 
Exercised(303,049)— — (511,716)12.41 
Outstanding, end of period5,015,592 1,324,299 71,354 8,403,650 56.51 
Exercisable, end of period474,006 141,122 71,354 3,610,093 23.33 
Granted - weighted average grant date fair value1
$27.35
— $33.94$18.15— 
1 Granted - weighted average grant date fair value includes units granted and replacement awards in a business combination.
Share-based payments by exercise price
The table below summarizes the share-based payments units outstanding based on the greater of the exercise price and the share price to be reached under the market performance conditions:
As at June 30, 2023For the six months ended June 30, 2023
Units outstandingUnrecognized share-based paymentsShare-based payments
$$
$0.00 - $37.51
10,495,285 111,314 49,159 
$47.21 - $78.58
718,501 1,010 572 
$104.53 and above
3,601,109 49,809 21,711 
Total14,814,895 162,132 71,442 
As at June 30, 2023, unrecognized share-based payments expense was approximately $162,132. The period over which such expense will be recognized is 4.5 years (0.8 year on a weighted average basis).
Replacement awards in a business combination
In connection with the Paya acquisition, the Company granted 909,375 RSU and 414,606 stock options to replace awards held by Paya employees under a new plan ("Paya equity plan"). Under the Paya equity plan, 1,324,341 Subordinate Voting Shares of the Company are reserved for issuance and issuable upon the exercise or settlement of awards, which represents the replacement awards granted upon closing of the Paya acquisition. The Company cannot grant further awards under the Paya equity plan.
The portion of the replacement awards at the acquisition date relating to services rendered up to the acquisition date, representing an amount of $9,686 was included as part of the consideration transferred (note 4). At the acquisition date, the portion of the replacement awards' fair value relating to services to be rendered in the future was $12,077 and will be recognized as compensation expense over the remaining vesting period.
17


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
The fair value of stock options granted as replacement awards was estimated on the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:
Replacement awards
Share price$31.49
Exercise price$19.71
Risk-free interest rate4.00%
Expected volatility35.5%
Dividend yield—
Expected term6.0 years
12. Net income per share
Diluted net income (loss) per share excludes all dilutive potential shares if their effect is anti-dilutive as well as all potential shares for which performance conditions have not yet been met as of the reporting date. For the six months ended June 30, 2023 and 2022, anti-dilutive stock options, RSUs and PSUs were excluded from the calculation of diluted net income (loss) per share because the effect was anti-dilutive.

Three months ended
June 30		Six months ended
June 30

2023202220232022
$$$$
Net income attributable to common shareholders of the Company (basic and diluted)9,923 33,979 145 36,982 
Weighted average number of common shares outstanding – basic138,841,224 141,442,328 139,245,992 142,148,713 
Effect of dilutive securities4,700,797 3,442,514 4,306,514 3,554,576 
Weighted average number of common shares outstanding – diluted143,542,021 144,884,842 143,552,506 145,703,289 
Net income per share attributable to common shareholders of the Company:
Basic0.07 0.24 0.00 0.26 
Diluted0.07 0.23 0.00 0.25 
13. Determination of fair values
Certain of the Company’s accounting policies and disclosures require the determination of fair value for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes using the following methods.
18


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
Financial assets and financial liabilities
In establishing fair value, the Company uses a fair value hierarchy based on levels as defined below:
•Level 1: defined as observable inputs such as quoted prices in active markets.
•Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable.
•Level 3: defined as inputs that are based on little or no observable market data, therefore requiring entities to develop their own assumptions.
The Company has determined that the carrying amounts of its current financial assets and financial liabilities approximate their fair value given the short-term nature of these instruments.
The fair value of the variable interest rate non-current liabilities approximates the carrying amount as the liabilities bear interest at a rate that varies according to the market rate.
As at June 30, 2023 and December 31, 2022, financial instruments measured at fair value in the Condensed Interim Consolidated Financial Statements statements of financial position were as follows:
NotesFair value hierarchyJune 30,
2023		December 31,
2022
$$
Assets
Investments measured at fair value through profit or lossLevel 11,145 1,002 
Investments measured at fair value through profit or lossLevel 32,148 2,148 
Investment in equity instrument designated at fair value through other comprehensive incomeLevel 325,861 — 
Advances to a third party independent sales organizationLevel 3— 2,154 

The following table presents the changes in level 3 items for the six months ended June 30, 2023:
Advances to a
third party
independent
sales
organization		Investments measured at fair value through profit or lossInvestment measured at fair value through other comprehensive income
$$$
Balance as at December 31, 20222,154 2,148 — 
Acquisition— — 25,000 
Merchant residuals received, net of interest on advances to a third parties(108)— — 
Settlement of advances to a third party(2,046)— — 
Effect of movements in exchange rates— — 861 
Balance as at June 30, 2023— 2,148 25,861 
19


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
Fair value remeasurement of level 3 instruments is recognized in selling, general and administrative expenses. Investments measured at fair value through profit and loss and through other comprehensive income are recognized in other non-current assets. Below are the assumptions and valuation methods used in the level 3 fair value measurements:
•On March 15, 2023, the Company acquired an equity interest in a private company for a total cash consideration of $25,000. The company designated this equity investment at fair value through other comprehensive income.
•As at June 30, 2023, the fair value of the contingent consideration for the Mazooma acquisition is nil (nil for December 2022). The fair value of the contingent consideration is determined using a formula specified in the purchase agreement. The main assumption is the forecast of financial performance. The maximum contingent consideration that could be paid if the future financial targets are met is $331,658 thousands Canadian dollars ($250,346).
14. Related party transactions
Transactions with key management personnel
Key management personnel compensation comprises the following:

Three months ended
June 30		Six months ended
June 30

2023202220232022
$$$$
Salaries and short-term employee benefits2,190 1,317 4,650 2,667 
Share-based payments19,050 16,281 37,683 34,147 

21,240 17,598 42,333 36,814 
Other related party transactions
Three months ended
June 30		Six months ended
June 30

2023202220232022
$$$$
Expenses – Travel(i)469 51 947 338 
(i)In the normal course of operations, the Company receives services from a company owned by a shareholder of the Company. The services received consist of travel services.
20


Nuvei Corporation
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(in thousands of US dollars, except for share and per share amounts)
15. Supplementary cash flow disclosure

Six months ended
June 30

20232022

$$
Changes in non-cash working capital items:
Trade and other receivables1
(16,776)(13,417)
Inventory58 32 
Prepaid expenses(1,660)(738)
Contract assets(591)(1,012)
Trade and other payables9,185 16,350 
Other current and non-current liabilities1,354 (6,034)

(8,430)(4,819)
1 Interest received on cash and cash equivalents has been presented separately within cash flows from operating activities (previously was presented within cash flow movements on trade and other receivables). Interest received that was reclassified from trade and other receivables was $1,241 for the six months ended, June 30, 2022.
16. Contingencies
From time to time, the Company is involved in various litigation matters arising in the ordinary course of its business. The Company is also exposed to possible uncertain tax positions in certain jurisdictions. Management does not expect that the resolution of those matters, either individually or in the aggregate, will have a material effect on the Company’s Condensed Interim Consolidated Financial Statements.
17. Subsequent event
On August 8, 2023, the Board of Directors approved a regular quarterly cash dividend of $0.10 per common share payable on September 5, 2023 to shareholders of record on August 21, 2023.

21