PagoNxt Anticipates Growth by Year 2025, Despite H1 '24 One-Time Losses
Santander's digital payments division, PagoNxt, has reported impressive growth in the first half of 2025. The open market revenue for PagoNxt increased by 54% year-on-year (YoY) to €131m, accounting for 22% of the division's total revenue.
If PagoNxt achieves its projected growth, its H1 2025 revenue would be approximately €758m, marking a significant leap from its H1 2024 total revenue of €583m. This growth would put PagoNxt on track to achieve multiple €1bn+ revenue years, following its first milestone in 2023.
The improved revenue performance is reflected in PagoNxt's EBITDA margin, which increased by 8.9 percentage points YoY to reach 20.1% in H1 2024. If PagoNxt achieves its projected growth, its estimated EBITDA margin for H1 2025 is around 30%. Correspondingly, the attributable profit for PagoNxt is projected to reach €230.4m for H1 2025, based on an EBITDA margin of 30%.
The growth in PagoNxt's revenue and EBITDA margin can be attributed to increased transaction volume. Getnet’s Total Payments Volume (TPV) rose 15% YoY in constant euros, and the number of transactions grew by 7%, contributing to the revenue base supporting margin improvement.
In H1 2024, PagoNxt contributed 1.9% of Santander's total revenue, up from 1.8% in H1 2023 and 1.6% in H1 2022. Despite some strategic decisions resulting in significant one-off losses, PagoNxt's reporting alongside Santander's Cards segment as the wider Payments division helped offset these losses.
Notably, PagoNxt reduced its cost-per-transaction by 10% YoY to 3.7c in H1 2024. Although the cost-per-transaction is not mentioned to have changed in the context of H1 2025, PagoNxt aims to maintain its open market revenue growth, which currently accounts for 22% of total revenue.
The strategic decisions causing one-off losses in 2024 are not expected to significantly impact PagoNxt's growth trajectory in 2025. As PagoNxt continues to grow, it is projected to increase its contribution to Santander's total revenue.
In conclusion, PagoNxt's strong performance in H1 2025 underscores its potential for continued growth and its significant contribution to Santander's payments business segment. The division's robust profitability and revenue growth momentum are promising indicators for the future of digital payments at Santander.
Investing in PagoNxt's growth might be a lucrative move for business individuals, given its potential to reach multiple €1bn+ revenue years. Increased revenue and improved EBITDA margin are a result of increased transaction volume and reduced cost-per-transaction, which bodes well for the division's future prospects in the finance sector.
