Revenue Performance - For the three months ended September 30, 2025, consolidated revenue was $241.4 million, an increase of $14.4 million or 6.3% from $227.0 million for the same period in 2024[143]. - For the nine months ended September 30, 2025, consolidated revenue was $705.9 million, an increase of $53.2 million or 8.2% from $652.6 million for the same period in 2024[144]. - Merchant card fees revenue for the three months ended September 30, 2025 was $178.5 million, an increase of $6.7 million or 3.9% from $171.8 million for the same period in 2024[146]. - Money transmission services revenue for the three months ended September 30, 2025 was $41.0 million, an increase of $7.1 million or 21.0% from $33.9 million for the same period in 2024[148]. - Revenue from the Merchant Solutions segment was $161.9 million for the three months ended September 30, 2025, an increase of $3.1 million or 2.0% from $158.8 million in the same period of 2024[177]. - Revenue from the Payables segment was $25.2 million for the three months ended September 30, 2025, an increase of $3.0 million or 13.6% from $22.1 million in the same period of 2024[182]. - Revenue from the Treasury Solutions segment was $55.7 million for the three months ended September 30, 2025, an increase of $8.6 million from $47.1 million in the same period of 2024[187]. - For the nine months ended September 30, 2025, Treasury Solutions segment revenue reached $158.4 million, a 20.2% increase from $131.8 million in 2024[189]. Operating Expenses - Total operating expenses for the three months ended September 30, 2025 were $203.7 million, an increase of $14.7 million or 7.8% from $189.0 million for the same period in 2024[154]. - Salary and employee benefits expense for the three months ended September 30, 2025 was $26.1 million, an increase of $4.4 million or 20.2% from $21.7 million for the same period in 2024[157]. - Selling, general and administrative expenses for the three months ended September 30, 2025 were $15.7 million, an increase of $3.3 million or 26.7% from $12.4 million for the same period in 2024[161]. - Depreciation and amortization expense for the three months ended September 30, 2025 was $15.1 million, an increase of $1.4 million or 10.1% from $13.7 million for the same period in 2024[159]. EBITDA and Other Income - Adjusted EBITDA from the Merchant Solutions segment was $27.7 million for the three months ended September 30, 2025, a decrease of $0.9 million or 3.2% from $28.6 million in the same period of 2024[179]. - Adjusted EBITDA from the Payables segment was $3.5 million for the three months ended September 30, 2025, an increase of $1.5 million or 78.7% from $1.9 million in the same period of 2024[185]. - Adjusted EBITDA for the Treasury Solutions segment was $46.7 million for the three months ended September 30, 2025, reflecting a 14.0% increase from $40.9 million in 2024[191]. - For the nine months ended September 30, 2025, Adjusted EBITDA was $134.7 million, up 19.3% from $112.9 million in the same period of 2024[192]. - Other income, net for the three months ended September 30, 2025, was $4.6 million, an increase of $3.8 million or 540.5% from $0.7 million in the same period of 2024[169]. Cash Flow and Debt - Net cash provided by operating activities was $63.2 million for the nine months ended September 30, 2025, compared to $61.9 million in 2024[201]. - Net cash used in investing activities was $151.9 million for the nine months ended September 30, 2025, significantly higher than $24.7 million in 2024, primarily due to acquisitions[202]. - Net cash provided by financing activities was $288.6 million for the nine months ended September 30, 2025, compared to cash used of $84.7 million in 2024[203]. - Outstanding debt obligations increased to $1,023.9 million as of September 30, 2025, from $945.5 million at December 31, 2024[204]. Compliance and Risk Management - The Company must comply with restrictions on its Total Net Leverage Ratio if outstanding revolving loans exceed 35% of the total revolving facility, with a maximum permitted ratio of 6.90:1.00 until March 31, 2026, and 6.40:1.00 thereafter[207]. - As of September 30, 2025, the Company was in compliance with the covenants in the 2024 Credit Agreement[207]. - The Residual Finance Credit Facility requires a minimum liquidity of $2.0 million and a minimum tangible net worth of $5.0 million[209]. - The maximum default ratio allowed under the Residual Finance Credit Facility is 2.5%, and the maximum delinquency ratio is 5.0%[209]. - The Company was in compliance with the restrictions in the Residual Finance Credit Facility as of September 30, 2025[209]. - Market risk exposures have not changed materially since December 31, 2024[212]. Future Considerations - New accounting pronouncements may affect future financial statements, as discussed in the Quarterly Report[210]. - The increase in revenues was primarily driven by an increase in total card dollar value processed and new enrollments in the Merchant Solutions segment[143]. - The company experienced a decrease in issuing volume, which partially offset the overall revenue growth[144]. - Interest expense for the three months ended September 30, 2025, was $22.5 million, a decrease of $0.8 million or 3.4% from $23.2 million in the same period of 2024[165]. - Interest expense for the nine months ended September 30, 2025, was $68.7 million, an increase of $2.9 million or 4.3% from $65.8 million for the same period in 2024[166]. - Total other expense, net for the three months ended September 30, 2025, was $(30.4) million, an increase of $(7.8) million from $(22.6) million in the same period of 2024[164].

Revenue and Profitability - Revenue for Q3 2025 was $241.4 million, a 6.3% increase from $227.0 million in Q3 2024[3] - Adjusted gross profit for Q3 2025 was $94.8 million, up 10.2% from $86.0 million in Q3 2024, with an adjusted gross profit margin of 39.2%, an increase of nearly 140 basis points[3] - Adjusted EBITDA for Q3 2025 was $57.8 million, a 5.7% increase from $54.6 million in Q3 2024[3] - Adjusted EPS for Q3 2025 was $0.28, a 55.6% increase from $0.18 in Q3 2024[3] - Operating income for the nine months ended September 30, 2025, was $107,747,000, compared to $99,282,000 for the same period in 2024, reflecting an 8.4% increase[29] - Net income for the nine months ended September 30, 2025, was $46,735,000, significantly up from $16,795,000 in the same period of 2024, marking a 178.5% increase[29] - Basic earnings per share for Q3 2025 were $0.34, compared to $0.07 in Q3 2024, indicating a substantial increase of 385.7%[29] - Adjusted EBITDA for the consolidated entity for the nine months ended September 30, 2025, was $165,103,000, compared to $152,532,000 in 2024, reflecting an 8.2% increase[40] - Net income for the nine months ended September 30, 2025, was $46,735,000, compared to $16,795,000 in 2024, representing a significant increase of 178%[41] Revenue Segments - Treasury Solutions revenue grew by over 18%, while Payables revenue increased by 14%[2] - Merchant Solutions revenue for the three months ended September 30, 2025, was $161,874,000, up from $158,770,000 in 2024, reflecting a 1.4% growth[38] - Payables segment revenue for the three months ended September 30, 2025, was $25,162,000, an increase of 13.7% from $22,143,000 in 2024[38] - Treasury Solutions revenue for the three months ended September 30, 2025, was $55,684,000, compared to $47,099,000 in 2024, marking a 18.2% increase[38] Cash Flow and Assets - The company made a $15.0 million voluntary prepayment on its term loan on October 31, 2025, driven by strong cash flow performance[3] - Cash flows from operating activities for the nine months ended September 30, 2025, amounted to $63,161,000, compared to $61,852,000 in 2024, showing a slight increase of 2.1%[33] - Total cash and cash equivalents, and restricted cash at the end of the period on September 30, 2025, was $1,193,761,000, compared to $918,057,000 at the end of the same period in 2024, a 30% increase[35] - Net increase in cash and cash equivalents and restricted cash for the nine months ended September 30, 2025, was $199,897,000, compared to $121,834,000 for the same period in 2024, representing a 64% increase[35] Assets and Liabilities - Total assets as of September 30, 2025, were $2,217,132,000, up from $1,826,860,000 at the end of 2024, indicating a growth of 21.4%[31] - The total liabilities increased to $2,325,646,000 as of September 30, 2025, from $1,991,885,000 at the end of 2024, reflecting a rise of 16.8%[31] - The company reported a total of $1,187,417,000 in settlement assets as of September 30, 2025, compared to $940,798,000 at the end of 2024, representing a 26.2% increase[31] Acquisitions and Investments - The company acquired Boom Commerce in August 2025 and Dealer Merchant Services in October 2025 to enhance its service offerings[3] - The company has made significant investments in acquisitions, with net cash used in investing activities totaling $151,898,000 for the nine months ended September 30, 2025[33] Credit Facilities - A new $1.1 billion credit facility was closed on July 31, 2025, with a 100 basis point reduction in interest rates[3]

Core Viewpoint - Shares of Priority Technology (PRTH) have increased by 10.1% over the past four weeks, closing at $7.72, with a potential upside indicated by Wall Street analysts' price targets suggesting a mean estimate of $12.8, representing a 65.8% upside [1] Price Targets - The average price targets from analysts range from a low of $10.00 to a high of $16.00, with a standard deviation of $2.17, indicating variability in estimates [2] - The lowest estimate suggests a 29.5% increase from the current price, while the highest estimate indicates a 107.3% upside [2] Analyst Consensus and Earnings Estimates - Analysts show strong agreement in revising earnings estimates higher, which historically correlates with stock price movements, suggesting a potential upside for PRTH [4][11] - Over the last 30 days, one estimate has increased, leading to a 1.9% rise in the Zacks Consensus Estimate for the current year [12] Zacks Rank - PRTH holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating a strong potential for upside [13] Caution on Price Targets - While the consensus price target is a useful metric, relying solely on it for investment decisions may not be prudent due to historical inaccuracies in analysts' price targets [3][10]

Core Insights - Priority Technology Holdings, Inc. (NASDAQ:PRTH) has successfully completed the acquisition of certain assets from Dealer Merchant Services (DMS), a reseller focused on the auto and truck dealership sector [1][2][3] - The acquisition is expected to generate approximately $3 million in incremental revenue and over $1 million in incremental adjusted EBITDA in Q4 2025 [3] Company Overview - Priority Technology Holdings, Inc. is a financial technology company that provides payments and banking solutions through its connected commerce platform, which includes services for payables, merchant services, and banking & treasury solutions [3] - The leadership team from DMS, Amberly Allen and Laura Sherman, will join Priority Technology as part of the acquisition [3]

Core Viewpoint - Priority Technology (PRTH) shows potential for significant upside, with a mean price target of $12.6 indicating a 64.7% increase from its current price of $7.65 [1] Price Targets and Analyst Estimates - The mean estimate consists of five short-term price targets with a standard deviation of $2.3, suggesting variability in analyst predictions [2] - The lowest estimate of $10.00 indicates a 30.7% increase, while the highest estimate of $16.00 suggests a 109.2% increase [2] - A low standard deviation indicates strong agreement among analysts regarding the stock's price movement [9] Earnings Estimates and Analyst Agreement - Analysts show strong agreement in revising earnings estimates higher, which correlates with potential stock price increases [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 1.9%, with one estimate moving higher and no negative revisions [12] - PRTH holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - While price targets are often sought after, they can mislead investors, and reliance solely on them may lead to poor investment decisions [3][7][10] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [8]

Company Overview - Priority Technology (PRTH) shares increased by 5.2% to close at $7.65, supported by strong trading volume, contrasting with a 3.5% decline over the past four weeks [1] - The company is experiencing a favorable shift in its business mix, particularly benefiting from higher-margin enterprise and B2B businesses [1] Earnings Expectations - The upcoming quarterly earnings report is expected to show earnings of $0.30 per share, reflecting a year-over-year increase of 328.6% [2] - Revenue is projected to reach $253.16 million, marking an 11.5% increase compared to the same quarter last year [2] Earnings Estimate Revisions - The consensus EPS estimate for Priority Technology has been revised 7.1% higher in the last 30 days, indicating a positive trend that typically correlates with stock price appreciation [3] - Monitoring the stock is advised to see if the recent price increase can lead to sustained strength [3] Zacks Rank and Industry Position - Priority Technology holds a Zacks Rank of 1 (Strong Buy), indicating strong market confidence [4] - The company is part of the Zacks Technology Services industry, which includes Owlet, Inc. (OWLT), another stock in the same sector that has seen a 28.3% return in the past month [4]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential [1] - Identifying the right entry point for fast-moving stocks is challenging, and investors may end up with expensive shares that have limited upside [1] Group 2: Bargain Stocks with Momentum - Investing in bargain stocks that have recently shown price momentum may be a safer strategy [2] - The Zacks Momentum Style Score helps identify strong momentum stocks, while the 'Fast-Paced Momentum at a Bargain' screen highlights attractively priced fast-moving stocks [2] Group 3: Priority Technology (PRTH) Analysis - PRTH has shown a price increase of 0.3% over the past four weeks, indicating growing investor interest [3] - The stock gained 3.8% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [4] - PRTH has a beta of 1.86, suggesting it moves 86% more than the market in either direction [4] Group 4: Performance Metrics - PRTH has a Momentum Score of B, indicating a favorable time to invest [5] - The stock has a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which attract more investors [6] - PRTH is trading at a Price-to-Sales ratio of 0.67, meaning investors pay 67 cents for each dollar of sales, indicating a reasonable valuation [6] Group 5: Additional Investment Opportunities - Besides PRTH, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen [7] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to find potential winning stocks [8]

Summary of Priority Technology (PRTH) FY Conference Call Company Overview - **Company Name**: Priority Technology - **Industry**: Fintech, Payments, and Banking - **Established**: 20 years ago, celebrating its anniversary in August 2025 - **Business Segments**: - Merchant acquiring - B2B payables - Enterprise payments - **Core Services**: A comprehensive commerce engine for collecting, storing, lending, and sending money, including traditional payment methods and virtual/physical card issuance [4][5][6] Financial Performance - **Annual Payments Volume**: Approximately $140 billion [7] - **Customer Accounts**: About 1.4 million accounts with $1.6 billion in customer funds under administration [8] - **Revenue Model**: - Transaction-based revenue - 62% of adjusted gross profit from recurring revenue [10][11] - **Recent Financial Highlights**: - Q2 net revenue increased by 9% - Adjusted gross profit rose by 13% - Adjusted EBITDA grew by 9% - EPS of $0.26, up 15% year-over-year [25][26] Market Position and Growth Potential - **Total Addressable Market (TAM)**: - B2C market in the US: $6 trillion - B2B market in the US: Nearly $20 trillion, largely underpenetrated [13][15] - **Market Share**: Fifth largest non-bank merchant acquirer in the US [18][19] - **Growth Strategy**: - Focus on B2B segment and enterprise solutions - High customer growth rate of 2,500 to 3,000 new customers per month [29] - Emphasis on integrated solutions for cash flow optimization and working capital [21][22] Competitive Landscape - **Competitors**: Traditional acquirers like Fiserv, TSYS, and newer entrants like Stripe [7] - **Market Trends**: Increasing demand for integrated payment solutions across various sectors, including healthcare and construction [30][34] Risks and Challenges - **Execution Risks**: Importance of maintaining delivery and operational precision to sustain growth [35][36] - **Economic Sensitivity**: Potential impacts from economic cycles and tariff policies, though currently positioned to benefit from such conditions [47][48] Capital Allocation and M&A Strategy - **Debt Management**: Recently refinanced debt to reduce capital costs and improve liquidity [39][40] - **M&A Focus**: Targeting countercyclical segments and early-stage conversion opportunities within fintech [41][42] - **Investment Areas**: Payroll, benefits, construction technology, and property technology [45][46] Investor Insights - **Valuation Perspective**: Analysts suggest that certain business lines are undervalued, indicating potential for higher market valuation [50][51] - **Shareholder Commitment**: CEO holds over 60% of shares, indicating strong alignment with shareholder interests [52] Conclusion Priority Technology is positioned for growth within the fintech space, leveraging its diversified service offerings and strong market presence. The company is focused on executing its growth strategy while managing risks associated with economic fluctuations and operational execution.

Financial Data and Key Metrics Changes - The company reported a 9% increase in net revenue for Q2 2025, reaching $239.8 million, with adjusted gross profit growing by 13% to $92.4 million and adjusted EBITDA increasing by 9% to $56 million [4][5][6] - Adjusted EPS rose by $0.15 year over year to $0.26, and adjusted gross profit margin improved by 135 basis points to 38.5% [4][6] - For the year-to-date, revenue grew by 9% to $464.4 million, with adjusted gross profit up 14% to $179.7 million and adjusted EBITDA up 10% to $107.3 million [6][12] Business Line Data and Key Metrics Changes - The SMB segment generated Q2 revenue of $163.2 million, a 5.2% increase year over year, with adjusted gross profit remaining consistent at $35.4 million [12][14] - B2B revenue grew by 14.4% year over year to $25 million, with adjusted gross profit increasing by 30.8% to $7.3 million [15][16] - The Enterprise segment saw a revenue increase of 20.6% to $52.7 million, with adjusted gross profit rising by 22.6% to $49.7 million [17][18] Market Data and Key Metrics Changes - The company ended Q2 with over 1.6 million total customer accounts, up from 1.3 million in the previous quarter [4] - Annual transaction volume increased by nearly $5 billion to $140 billion [4] - Average account balances under administration improved to $1.4 billion from $1.3 billion [4] Company Strategy and Development Direction - The company is focused on its Connected Commerce platform, which integrates payments and banking capabilities to enhance operational success for customers [5][10] - There is a strategic emphasis on expanding recurring revenue, which now represents 62% of total adjusted gross profit, indicating a shift towards more stable revenue streams [24][25] - The company is also pursuing tuck-in acquisitions to enhance its service offerings and capitalize on favorable market conditions [21][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 10% to 12.5% revenue growth for 2025, citing strong growth trends and a favorable business mix [5][22] - The company anticipates moderating headwinds in the SMB segment and expects to see an acceleration of growth in the second half of the year [22][32] - Management noted that the economic environment has not significantly impacted performance, with resilience observed in various customer segments [38][56] Other Important Information - The company successfully refinanced its debt, lowering interest rates and extending maturities, which is expected to save approximately $7 million in annual interest expenses [20][21] - A material weakness related to automated controls has been substantially remediated, with testing currently underway [23] Q&A Session Summary Question: What was the core growth net of the VAMP and the residual headwind versus the 1Q growth? - Core growth was 9.5% for the quarter, slightly down from 10% in Q1, driven by strong performance in larger ISOs despite some attrition in lower-end accounts [30][31] Question: Can you talk about the underlying assumptions at the low end versus the high end of the revised 2025 revenue guide? - The acceleration in the second half is expected due to moderating headwinds in SMB and the onboarding of large customers, with potential upside from deposit balances [32][34] Question: Have you seen any shift in volume trends given the softening jobs and business sentiment? - The portfolio has performed well, with resilience noted in various sectors, although same store sales have been a headwind [38] Question: How have you been thinking about capital allocation in the near and longer term? - The allocation strategy remains focused on deleveraging while being opportunistic in acquisitions, particularly in a favorable market [39] Question: Can you describe the go-to-market strategy of larger ISOs? - The company leads with a technology suite that allows for flexibility in solutions, emphasizing high-quality customer service as a key component [60][63]

Q2 2025 Financial Performance - Priority Technology Holdings' total revenue increased by 9% to $239.8 million in Q2 2025[14] - Adjusted Gross Profit increased by 13% to $92.4 million, with Adjusted Gross Profit margin increasing by 135 basis points to 38.5%[16, 17] - Adjusted EBITDA increased by 9% to $56.0 million[20] - Year-to-date revenue increased by 9% to $464.4 million[24] - Year-to-date Adjusted Gross Profit increased by 14% to $179.7 million, with Adjusted Gross Profit margin increasing by 150 basis points to 38.7%[26, 27] - Year-to-date Adjusted EBITDA increased by 10% to $107.3 million[30] Segment Performance in Q2 2025 - SMB revenue was $163.2 million, a 5% year-over-year increase, with Adjusted Gross Profit of $35.4 million and Adjusted EBITDA of $27.7 million[47] - B2B revenue was $25.0 million, a 14% year-over-year increase, with Adjusted Gross Profit of $7.3 million and Adjusted EBITDA of $3.8 million[53] - Enterprise revenue was $52.7 million, a 21% year-over-year increase, with Adjusted Gross Profit of $49.7 million and Adjusted EBITDA of $45.6 million[59] - B2B and Enterprise segments represented approximately 62% of Adjusted Gross Profit[44] Capital Structure and Guidance - As of June 30, 2025, the company's total debt balance was $935.5 million, with a net debt of $884.9 million and a net leverage ratio of 4.1x[68, 69] - The company revised its 2025 financial guidance, projecting total revenue between $970 million and $990 million, Adjusted Gross Profit between $365 million and $380 million, and Adjusted EBITDA between $222.5 million and $227.5 million[9, 74, 76]