Moody’s Investors Service downgraded Paysafe Group’s credit rating outlook from positive to stable on December 2, 2025, while maintaining the company’s B2 issuer rating. The adjustment reflects deteriorating credit metrics and operational execution challenges following the divestiture of its direct marketing payment processing unit. This rating update signals caution as Paysafe navigates rising leverage and diminished earnings amid ongoing restructuring.

Moody’s Paysafe Rating Outlook Revision: Key Drivers

The credit rating agency reported that Paysafe’s leverage ratio, measured by Moody’s-adjusted debt/EBITDA, reached 6.4 times as of September 30, 2025, compared with 5.5 times at the end of 2024. This increase primarily results from reduced earnings after selling its direct marketing business to KORT Payments in February 2025. The divested segment produced $42.8 million in company-adjusted EBITDA in 2024 but faced rising credit losses and merchant attrition during late 2024.

Moody’s highlighted that the transaction is unlikely to generate meaningful cash inflows over the next 12 to 18 months. Growth within Paysafe’s continuing operations in the first nine months of 2025 only partially offset EBITDA losses caused by the divestiture. Much of the merchant solutions segment’s revenue growth stemmed from the low-margin indirect distribution channel, while Paysafe’s expanded salesforce experienced productivity challenges. At the same time, development delays and underperformance affected the digital wallets segment beyond its core markets.

Analyst Scenarios and Financial Outlook

Additional pressure on EBITDA emerged due to elevated litigation expenses related to ongoing legal proceedings involving the special purpose acquisition company that merged with Paysafe in 2021. Nevertheless, Moody’s baseline forecast anticipates a return to profitability beginning in 2026, driven by a turnaround in merchant solutions and sustained expansion in the digital wallets division.

Under this scenario, Paysafe’s adjusted debt/EBITDA is projected to decline below 6.0 times by the end of 2026, improving from above 6.5 times a year earlier. The company’s liquidity position remains strong, with $249 million in cash and equivalents as of September 30, 2025, complemented by an undrawn revolving credit facility of $193 million. Operating cash flow is expected to exceed $235 million over the subsequent twelve months, supporting Paysafe’s financial flexibility during restructuring and market pressures.

Rating: Market Outlook

Moody’s adjustment of Paysafe’s credit rating outlook to stable underscores near-term execution risks but leaves room for optimism given the anticipated earnings recovery and deleveraging in 2026. Market participants should monitor how operational improvements and liquidity management evolve, as these factors will influence future credit assessments and investor confidence in the company’s financial health.