Priority Technology Holdings, Inc. Reports First Quarter Financial Results Strong First Quarter Growth Driven by Performance Across Unified Commerce Platform ALPHARETTA, GA - May 6, 2025 -- Priority Technology Holdings, Inc. (NASDAQ: PRTH) ("Priority" or the "Company"), the payments and banking fintech that streamlines collecting, storing, lending, and sending money to unlock revenue opportunities, today announced its first quarter 2025 financial results including strong year-over-year diversified revenue g ...

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Core Viewpoint - Priority Technology Holdings, Inc. (PRTH) has experienced a significant stock decline of 31.8% over the past three months, contrasting with a 4.6% decline in the industry and a 4.9% fall in the Zacks S&P 500 composite [1][4] Group 1: Stock Performance - Over the past year, PRTH's stock has surged by 150%, indicating it is currently in a correction phase [4] - The stock's recent correction may present an appealing opportunity for investors [4] Group 2: Market Position and Growth Potential - The global mobile payment market is projected to reach $88.5 billion in 2024, with a compound annual growth rate (CAGR) of 38% from 2025 to 2030, positioning PRTH to benefit from this growth [5] - In Q4 2024, PRTH reported a 13.9% year-over-year increase in revenue, with merchant bankcard processing dollar value and B2B issuing dollar volume rising by 6.6% and 13.5%, respectively [6] - The enterprise payments segment saw a 37% year-over-year growth in average billed clients, with average monthly new enrollments increasing by 7.8% [7] - PRTH's ability to provide seamless transactions is expected to enhance customer acquisition and market share in the expanding mobile payment market [8] Group 3: Valuation Metrics - PRTH shares are currently priced at 10.3 times forward 12-month earnings per share, significantly lower than the industry average of 32.7 times [9] - The trailing 12-month EV-to-EBITDA ratio for PRTH is 6.7 times, well below the industry's average of 22.8 times [12] Group 4: Financial Outlook - The Zacks Consensus Estimate for PRTH's 2025 revenues is $985.5 million, indicating a 12% growth from the previous year, with a similar growth forecast for 2026 [14] - Earnings per share for 2025 are estimated at 69 cents, reflecting a year-over-year growth of 35.3%, with a projected 58% increase for 2026 [14] Group 5: Competitive Landscape - PRTH faces intense competition in the payments industry, particularly from larger players like Payoneer Global Inc. and Corpay, Inc., which may impact its market share [15] - Competitors possess more resources and brand value, potentially leading to pricing pressures and challenges in customer retention and acquisition [16] Group 6: Risks to Growth - The termination of referral partner agreements or industry consolidation could adversely affect PRTH's growth trajectory [17] - A lack of innovation may hinder PRTH's ability to achieve top-line growth, negatively impacting stock performance [17] Group 7: Investment Considerations - The expanding mobile payment market and PRTH's discounted stock price make it an attractive option for investors [18] - A strong liquidity position supports PRTH's financial stability, with a current ratio of 1.05, although it is lower than the industry's 1.65 [11] - Caution is advised as PRTH is currently in a correction phase, suggesting that investors should monitor share price adjustments before making investment decisions [19]

Group 1 - Priority Technology Holdings (NASDAQ: PRTH) is well-positioned to benefit from the competitive landscape of integrated payment solutions, particularly targeting small and medium-sized businesses (SMB) and B2B markets [1] - The company operates in a sector with at least ten competitors, indicating a robust market environment [1] Group 2 - The analysis emphasizes the importance of fundamental analysis, valuation, and long-term growth potential in sectors such as AI, fintech, and technology [1] - The focus is on business fundamentals, earnings trends, and competitive positioning to assess publicly traded companies [1]

Financial Data and Key Metrics Changes - The company reported the strongest revenue performance in its history for both Q4 and the full year, with net revenue growing by 16% and adjusted EBITDA increasing by 21% for the full year 2024 [7][10] - Q4 revenue reached $227.1 million, a 14% increase from the prior year, leading to a 15% increase in adjusted gross profit to $83.9 million and a 16% improvement in adjusted EBITDA to $51.7 million [9][10] - For the full year 2024, total revenue was $879.7 million, with adjusted gross profit increasing to $328.1 million and adjusted EBITDA reaching $204.3 million [10][30] Business Segment Data and Key Metrics Changes - The SMB segment generated Q4 revenue of $155.7 million, an 11.1% increase year-over-year, with adjusted gross profit of $32 million, up 0.4% from the previous year [18][20] - The B2B segment reported revenue of $23.7 million, a 10.9% increase, with adjusted gross profit rising to $6.4 million, reflecting a 24% growth [22][23] - The Enterprise segment saw Q4 revenue of $48.7 million, a 27% increase, with adjusted gross profit also increasing by 27% to $45.6 million [24][25] Market Data and Key Metrics Changes - The company processed over $130 billion in annual transaction volume during the prior 12 months, with approximately 1.2 million total customer accounts on its commerce platform [7][10] - Bank card dollar volume in the SMB segment was $15.5 billion for the quarter, up 6.6% from the prior year [18][19] Company Strategy and Development Direction - The company aims to sustain momentum in its acquiring, payables, and Enterprise segments, with a revenue growth forecast of 10% to 14% for 2025 [8][36] - The focus remains on refining customer experiences and innovating SaaS payments and banking solutions to meet evolving customer needs [12][41] - The company is positioned as a consolidator in the payments and financial technology space, targeting opportunities in sectors with legacy technology and inefficient operations [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue growth despite potential headwinds from lower interest rates and a challenging macroeconomic environment [8][36] - The company noted that over 63% of adjusted gross profit in Q4 came from recurring revenues, indicating a shift towards a more stable revenue model [17][18] - Management highlighted the importance of maintaining a disciplined approach to capital allocation, balancing debt paydown with potential M&A opportunities [50][58] Other Important Information - The company redeemed its preferred stock during the quarter, which resulted in a fourth-quarter preferred dividend of only $2.65 million [31][35] - A material weakness in internal controls over financial reporting was disclosed, but it did not result in a restatement of financial results [33][35] Q&A Session Summary Question: Capital allocation strategy between debt paydown and increased CapEx or SG&A - Management emphasized the importance of balancing debt paydown with M&A opportunities, while also considering the shift from CapEx to OpEx as platforms migrate to the cloud [50][52] Question: Impact of recent rate cut forecasts on guidance - Management confirmed that they have factored in the expected rate cuts into their 2025 guidance, adopting a conservative approach [54][56] Question: Impact of tariffs on businesses served - Management noted that while tariffs may create inflation, they have not seen significant negative impacts on the acquiring side, and demand for B2B solutions is increasing [67][68] Question: Reasons for declining gross margin percentage in consumer payments - Management explained that the decline is partly due to residual purchases running off and a one-time inventory write-off of $3.5 million, but core margins have actually expanded [71][78] Question: Magnitude of CapEx to OpEx shift - Management estimated a $4 million impact from the CapEx to OpEx shift for 2025, which will affect underlying profitability [110] Question: Guidance on adjusted EPS expectations - Management indicated that adjusted EPS for 2025 could approach $1 per share based on normal growth trends [120]

Priority Technology Holdings, Inc. (NASDAQ:PRTH) Q4 2024 Results Conference Call March 6, 2025 11:00 AM ET Company Participants Chris Kettmann - Investor Relations Tom Priore - Chairman and Chief Executive Officer Tim O'Leary - Chief Financial Officer Conference Call Participants Jacob Stephan - Lake Street Capital Markets Brian Kinstlinger - Alliance Global Partners Tim Switzer - KBW Brian Bergen - TD Cowen Isabella Hondros - DGA Group Operator Good morning, and welcome to the Priority Technology Fourth Qu ...

Priority (PRTH) Q4 2024 Earnings Call March 06, 2025 11:00 AM ET Company Participants Chris Kettmann - Investor RelationThomas Priore - Executive Chairman, President & CEOTim O’Leary - Chief Financial OfficerBrian Kinstlinger - MD, Director of Research & Head of Technology ResearchTim Switzer - Vice PresidentBryan Bergin - Managing Director Conference Call Participants Jacob Stephan - Senior Research AnalystNone - Analyst Operator Good morning, and welcome to the Priority Technology Fourth Quarter twenty tw ...

Revenue Growth - Consolidated revenue for the year ended December 31, 2024, was $879.7 million, an increase of $124.1 million or 16.4% from $755.6 million in 2023[174] - Merchant card fees revenue increased by $75.2 million or 12.6% to $670.4 million in 2024, driven by the acquisition of Plastiq and increased transaction counts[176] - Money transmission services revenue rose by $32.0 million or 32.6% to $130.1 million in 2024, primarily due to an increase in customer enrollments[177] - Outsourced services and other services revenue increased by $17.4 million or 35.1% to $67.0 million in 2024, attributed to higher interest income and additional revenues from the B2B Payments segment[178] - B2B Payments segment revenue increased to $89.1 million for the year ended December 31, 2024, up 116.5% from $41.2 million in 2023, driven by the acquisition of Plastiq and increased interest revenue[199] - Enterprise Payments segment revenue reached $180.4 million in 2024, a 36.6% increase from $132.2 million in 2023, attributed to higher customer enrollments and growth in interest income[202] Operating Expenses - Total operating expenses for 2024 were $746.3 million, an increase of $72.2 million or 10.7% from $674.1 million in 2023[180] - Adjusted EBITDA from the SMB Payments segment was $108.9 million in 2024, a slight decrease of $0.6 million or 0.6% from $109.5 million in 2023[197] - Adjusted EBITDA for the B2B Payments segment rose to $7.6 million in 2024, a 245.5% increase from $2.2 million in 2023, primarily due to higher revenues despite increased operating expenses[200] - Adjusted EBITDA for the Enterprise Payments segment was $154.9 million in 2024, reflecting a 39.8% increase from $110.9 million in 2023, driven by revenue growth offset by increased salaries[203] Net Income and Financial Performance - Net income for 2024 was $24.0 million, a significant increase of $25.3 million from a net loss of $1.3 million in 2023[190] - Operating income improved to $133,421 in 2024, up 63.7% from $81,524 in 2023[258] - The company reported a basic and diluted loss per common share of $0.31 for 2024, improving from a loss of $0.63 in 2023[258] - The total shareholders' deficit attributable to shareholders increased to $(166,840) in 2024 from $(147,718) in 2023[256] Cash Flow and Working Capital - Working capital improved to $53.4 million at December 31, 2024, compared to $29.2 million at the end of 2023, with cash and cash equivalents increasing to $58.6 million from $39.6 million[207] - Net cash provided by operating activities was $85.6 million in 2024, a 5.3% increase from $81.3 million in 2023, driven by net income growth[211] - Net cash used in investing activities decreased to $35.5 million in 2024 from $55.7 million in 2023, with no business acquisitions in 2024 compared to $28.2 million spent on acquiring Plastiq in 2023[212] - Total cash and cash equivalents, and restricted cash at the end of 2024 reached $993,864 thousand, up from $796,223 thousand in 2023[268] Debt and Financing - Long-term debt obligations increased to $945.5 million in 2024 from $654.4 million in 2023, marking a $291.1 million rise[215] - The company entered into a $835.0 million term facility and a $70.0 million revolving credit facility under the 2024 Credit Agreement, with the term facility maturing in May 2031[216] - As of December 31, 2024, the company had $945.5 million in outstanding borrowings under its Credit Agreement, with a potential cash interest expense fluctuation of approximately $9.5 million per year for a hypothetical 1.00% change in the SOFR rate[228][229] Tax and Valuation - The effective tax rate decreased to 35.6% in 2024 from 118.3% in 2023, primarily due to a reduction in valuation allowance against deferred tax assets[188] - The company recognized interest and penalties associated with uncertain tax positions as a component of income tax expense[351] Internal Controls and Compliance - The company has identified a material weakness in internal control over financial reporting related to automated controls for data transformation from third-party processors, affecting revenue and expense determinations[246] - The company’s internal control over financial reporting was found to be ineffective as of December 31, 2024, due to identified deficiencies[245] Asset Management - Total current assets increased to $1,105,085 in 2024, up 25.5% from $881,294 in 2023[256] - Total liabilities rose to $1,991,885 in 2024, an increase of 32.5% from $1,502,796 in 2023[256] - The company’s total assets grew to $1,826,860 in 2024, up 13.1% from $1,615,337 in 2023[256] Business Operations and Strategy - The company aims to enhance its payment solutions through its proprietary Priority Commerce Engine, focusing on optimizing cash flow and working capital for customers[270] - The Company’s B2B Payments segment enables customers to automate accounts payable and other commercial payments functions[284] Acquisitions and Goodwill - The acquisition of Plastiq was completed on July 31, 2023, for a total purchase consideration of approximately $37.0 million, including $28.5 million in cash[366][367] - The fair value of the acquired intangible assets includes $13.0 million for customer relationships, $7.0 million for referral partner relationships, $6.5 million for technology, and $3.9 million for trade name[369] - The company tests goodwill and indefinite-lived intangibles for impairment annually, concluding no impairment for the years ended December 31, 2024, 2023, and 2022[316]

Core Viewpoint - Priority Technology Holdings, Inc. (PRTH) is expected to report its fourth-quarter 2024 results on March 6, with a consensus estimate for revenues at $226.2 million, indicating a 13.5% year-over-year growth driven by strong reseller relationships [1][3]. Revenue Expectations - The Zacks Consensus Estimate for PRTH's fourth-quarter revenues is $226.2 million, reflecting a 13.5% increase compared to the previous year [3]. - The anticipated revenue growth is attributed to the company's effective acquisition and retention of high-quality resellers focused on growth [3]. Earnings Projections - The consensus estimate for earnings is 6 cents per share, a significant improvement from a loss of 16 cents in the same quarter last year [5]. - Focus on expense discipline and strong margins is expected to positively impact the bottom line [5]. Market Trends and Strategies - Merchant bankcard processing dollar value and B2B issuing dollar volume are projected to have improved due to PRTH's ability to leverage market trends effectively [4]. - The company's innovative strategies are likely to have supported growth in average billed clients and average monthly new enrollments [4]. Earnings Prediction Model - The current model does not predict a definitive earnings beat for PRTH, with an Earnings ESP of 0.00% and a Zacks Rank of 2 (Buy) [6][7].

Priority Technology Holdings, Inc. (PRTH) stock has shown remarkable growth over the past year. The stock has gained 227.3%, outperforming the industry's 53.6% rally and the Zacks S&P 500 composite's 18.5% growth.One Year Price PerformanceImage Source: Zacks Investment ResearchPRTH has performed better than its industry peers, such as Byrna Technologies Inc. (BYRN) and Cellebrite (CLBT) . BYRN has gained 129.8% and CLBT has returned 59.1% over the same period.In the last trading session, the PRTH stock clos ...