Core Viewpoint - Priority Technology (PRTH) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of earnings estimate revisions, which have a strong correlation with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. Company Performance Indicators - For the fiscal year ending December 2025, Priority Technology is projected to earn $1.06 per share, reflecting a 107.8% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Priority Technology has risen by 39.5%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Priority Technology to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Group 1 - The stock of Priority Technology (PRTH) closed at $6.71, with a 2.1% gain over the past four weeks, and analysts set a mean price target of $12.80, indicating a potential upside of 90.8% [1] - The mean estimate consists of five short-term price targets with a standard deviation of $2.77, where the lowest estimate is $10 (49% increase) and the highest is $16 (138.5% increase) [2] - Analysts show strong agreement in revising earnings estimates higher, which correlates with potential stock price movements [11][12] Group 2 - The Zacks Consensus Estimate for the current year has increased by 1.9% over the past month, indicating positive sentiment among analysts [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] - While the consensus price target may not be a reliable indicator of the stock's potential gain, it suggests a positive direction for price movement [13]

Group 1 - Priority Technology Holdings, Inc. held its Q1 2025 Earnings Conference Call on May 6, 2025, at 11:00 AM ET [1] - The call featured key participants including Tom Priore, Chairman and CEO, and Tim O'Leary, CFO [3] - Meghna Mehra, Managing Director at ICR, introduced the call and the participants [2][3] Group 2 - The company emphasized that the remarks during the call would include forward-looking statements, which are subject to risks and uncertainties [4] - There is no obligation for the company to update or revise these forward-looking statements based on new information or future events [4] - The call may reference non-GAAP measures such as EBITDA and adjusted EBITDA, with reconciliations available in the press release and SEC filings [5]

Financial Data and Key Metrics Changes - The company reported a 9% increase in net revenue year-over-year, reaching $224.6 million [5][8] - Adjusted gross profit grew by 14% to $87.3 million, with an adjusted EBITDA increase of 11% to $51.3 million [5][8] - Adjusted EPS rose by $0.19 compared to the previous year, reaching $0.22 for the quarter [21] Business Segment Data and Key Metrics Changes - The SMB segment generated revenue of $151.7 million, a 5.3% increase from the previous year, with adjusted gross profit of $33.1 million, up 3.9% [13][15] - B2B revenue grew by 12.1% to $23.9 million, with adjusted gross profit increasing by 17.8% to $7.3 million [12][17] - The Enterprise segment saw revenue rise by 22.2% to $50.1 million, with adjusted gross profit also increasing by 22.2% to $46.9 million [18] Market Data and Key Metrics Changes - The company ended the quarter with over 1.3 million total customer accounts on its e-commerce platform, up from 1.2 million at the end of the previous year [5] - Annual transaction volume increased by $5 billion to over $135 billion, and account balances under administration improved to $1.3 billion [6] Company Strategy and Development Direction - The company aims to gain market share in the acquiring segment while strengthening countercyclical assets like automated payables and CFT Pay [25][26] - The focus is on investing in new verticals with large total addressable markets (TAMs) that are still early in the adoption of integrated payment and banking solutions [25][26] - The unified commerce platform is designed to streamline financial operations for businesses, enhancing cash flow and optimizing working capital [8][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging economic environment, citing a 0.3% decline in U.S. GDP and a 1.8% growth in consumer spending [24][25] - Despite economic uncertainties, the company remains confident in achieving 10% to 14% revenue growth for 2025, driven by strong growth trends and a favorable business mix [6][7] - Management noted that the material weakness related to automated controls is being actively remediated, with substantial progress made [22] Other Important Information - The company reported a decline in debt levels to $935.5 million after a $10 million prepayment of the term loan [19] - Adjusted EBITDA for the last twelve months ended March 31 was $209.2 million, with net leverage decreasing to 4.2 times [20] Q&A Session Summary Question: Can you provide details on the increase in SG&A and salaries? - Management explained that SG&A increased due to non-recurring items and costs associated with the migration to the public cloud, with a normalized increase of about 26% year-over-year [32][33] Question: What percentage of gross profit comes from B2B and enterprise? - Management confirmed that over 62% of gross profit now comes from B2B and enterprise segments, with a significant portion also from recurring revenues [34][35] Question: How did the Minnesota Wild contract come about? - Management highlighted the efficiency of their payment and banking solutions as key factors in winning the contract, emphasizing the ability to optimize cash flow and working capital [40][41] Question: What impact did the one less day in Q1 have on revenue? - Management acknowledged that the one less day did impact daily revenue, particularly in the SMB segment, affecting overall volume and income [43][44] Question: How is the company positioned regarding consumer spending and economic uncertainty? - Management noted that while there may be some impact, the company has a resilient portfolio, particularly in sectors less affected by economic downturns [54][56]

Financial Data and Key Metrics Changes - The company reported a 9% increase in net revenue, reaching $224.6 million, with adjusted gross profit growing by 14% to $87.3 million and adjusted EBITDA increasing by 11% to $51.3 million [4][6] - Adjusted EPS rose by $0.19 year over year, reaching $0.22 for the quarter [21][22] - Annual transaction volume increased by $5 billion to over $135 billion, and account balances under administration improved to $1.3 billion [5][6] Business Segment Data and Key Metrics Changes - The SMB segment generated Q1 revenue of $151.7 million, a 5.3% increase year over year, with adjusted gross profit of $33.1 million, up 3.9% [12][13] - B2B revenue grew by 12.1% to $23.9 million, with adjusted gross profit increasing by 17.8% to $7.3 million [15][17] - The Enterprise segment saw revenue of $50.1 million, a 22.2% increase, with adjusted gross profit also rising by 22.2% to $46.9 million [18] Market Data and Key Metrics Changes - The company noted a 0.3% decline in U.S. GDP during Q1, with consumer spending growth slowing to 1.8% from 4% [25][26] - The company reported that its core acquiring channels produced 10% organic revenue growth, while countercyclical segments grew by 12% to 22% [27][28] Company Strategy and Development Direction - The company aims to gain market share in the acquiring segment while strengthening countercyclical assets like automated payables and CFT Pay [26][27] - The focus is on investing efficiently in new verticals with large total addressable markets (TAMs) that are still early in the adoption of integrated payment and banking solutions [26][28] - The company is positioned to benefit from the fallout of less stable banking as a service providers [64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 10% to 14% top-line revenue growth for 2025, despite potential headwinds from lower interest rates and macroeconomic uncertainty [5][22] - The company is actively working to remediate a material weakness related to automated controls, with substantial progress reported [23] Other Important Information - The company ended the quarter with $117.6 million in available liquidity, including $70 million of borrowing capacity under its revolving credit facility [19] - The company has made a $10 million prepayment on its term loan during the quarter, reducing debt levels to $935.5 million [19][20] Q&A Session Summary Question: Can you provide details on the increase in SG&A and salaries? - Management clarified that SG&A increased by 26% year over year when normalizing for non-recurring items, with significant costs related to cloud migration and headcount additions [31][32] Question: What percentage of gross profit comes from B2B and enterprise? - Management confirmed that over 62% of gross profit now comes from B2B and enterprise segments, with a significant portion also from recurring revenues [34][35] Question: Can you elaborate on the Minnesota Wild contract win? - Management highlighted that the contract was won due to the ability to optimize cash flow and provide banking transparency, which is crucial for sports franchises [39][41] Question: How did the one less day in Q1 impact revenue? - Management acknowledged that the one less day did impact daily revenue, particularly in the SMB segment, and noted other unusual influences on volume [43][44] Question: What are the considerations for segment growth in Q2? - Management indicated that shifts in interest rates could impact growth, particularly in high-margin interest income [48] Question: How has consumer behavior changed post-tariffs? - Management noted no material changes in consumer behavior yet, with a resilient portfolio that includes recession-resistant sectors [54][56] Question: What opportunities exist in the embedded finance space? - Management stated that the company is well-positioned to capture opportunities from the fallout of less stable banking service providers [64]

Priority Technology (PRTH) came out with quarterly earnings of $0.22 per share, beating the Zacks Consensus Estimate of $0.20 per share. This compares to loss of $0.10 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 10%. A quarter ago, it was expected that this company would post earnings of $0.06 per share when it actually produced earnings of $0.18, delivering a surprise of 200%.Over the last four quarters, the company has s ...

Revenue Performance - Consolidated revenue for Q1 2025 was $224.6 million, an increase of $18.9 million or 9.2% from $205.7 million in Q1 2024[121] - Merchant card fees revenue increased to $167.1 million, up $9.1 million or 5.8% from $157.9 million in Q1 2024, driven by higher transaction counts and card values[123] - Money transmission services revenue rose to $37.4 million, an increase of $8.3 million or 28.5% from $29.1 million in Q1 2024, attributed to new customer enrollments[124] - Total revenues from the SMB Payments segment were $151.7 million, a 5.3% increase from $144.0 million in Q1 2024, driven by increased card processing activity[139] - B2B Payments segment revenue increased to $23.9 million for Q1 2025, up 12.1% from $21.3 million in Q1 2024, driven by higher issuing dollar volume[142] - Enterprise Payments segment revenue reached $50.1 million in Q1 2025, reflecting a 22.2% increase from $41.0 million in Q1 2024, primarily due to growth in billed clients and new customer enrollments[145] Operating Expenses - Total operating expenses for Q1 2025 were $192.0 million, an increase of $14.3 million or 8.1% from $177.7 million in Q1 2024[127] - Salary and employee benefits expense increased by $3.6 million or 16.4% to $25.8 million in Q1 2025, due to merit increases and higher headcount[129] EBITDA Performance - Adjusted EBITDA for the SMB Payments segment was $25.7 million, a 2.7% increase from $25.0 million in Q1 2024, driven by revenue growth[140] - Adjusted EBITDA for the B2B Payments segment rose to $3.5 million in Q1 2025, a 101.3% increase from $1.7 million in Q1 2024, attributed to contributions from CPX and Plastiq businesses[143] - Adjusted EBITDA for the Enterprise Payments segment was $42.4 million in Q1 2025, up 22.2% from $34.7 million in Q1 2024, driven by revenue increases[146] - Total consolidated adjusted EBITDA for Q1 2025 was $51.3 million, compared to $46.3 million in Q1 2024, indicating overall growth[147] Cash Flow and Financing - Net cash provided by operating activities decreased to $10.0 million in Q1 2025 from $13.3 million in Q1 2024, primarily due to changes in operating assets and liabilities[155] - Cash used in investing activities was $9.7 million in Q1 2025, up from $7.7 million in Q1 2024, with significant investments in property and acquisitions[156] - Net cash provided by financing activities was $47.3 million in Q1 2025, contrasting with $10.3 million used in Q1 2024, driven by changes in customer fund obligations[157] - As of March 31, 2025, the company had cash totaling $47.6 million, an increase from $34.3 million at the same time in 2024[152] Debt and Tax - Outstanding debt obligations decreased to $935.5 million as of March 31, 2025, down from $945.5 million at December 31, 2024, due to an unscheduled principal payment[158] - Interest expense for Q1 2025 was $23.2 million, an increase of $2.3 million or 11.0% from $20.9 million in Q1 2024, due to higher outstanding balances[133] - Effective tax rate for Q1 2025 was 21.4%, down from 33.2% in Q1 2024, primarily due to changes in valuation allowances[134] Merchant Processing - Merchant bankcard processing dollar value increased to $15.3 billion in Q1 2025, up $506.0 million from $14.8 billion in Q1 2024[138]

Q1 2025 Financial Performance - Priority Technology Holdings' Q1 2025 total revenue increased by 9% to $2246 million[8, 13, 14] - Adjusted Gross Profit increased by 14% to $873 million[8, 15, 16] - Adjusted EBITDA increased by 11% to $513 million[8, 19, 20] - Adjusted Gross Profit margin increased by 170 basis points to 389%[17] Segment Performance - SMB revenue increased by 5% year-over-year to $1517 million with Adjusted Gross Profit of $331 million[38] - B2B revenue increased by 12% year-over-year to $239 million with Adjusted Gross Profit of $73 million[43] - Enterprise revenue increased by 22% year-over-year to $501 million with Adjusted Gross Profit of $469 million[49] Financial Position - The company repaid $10 million of outstanding Term Loan during Q1 2025[59, 61] - The company has ample liquidity of $1176 million, comprised of $476 million of unrestricted cash and unfunded $700 million Revolver at the end of Q1 2025[61]

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 ...

Core Viewpoint - The article emphasizes the importance of value investing and highlights Priority Technology (PRTH) as a strong value stock based on its financial metrics and Zacks Rank [1][3][6]. Company Analysis - Priority Technology (PRTH) has a Zacks Rank of 1 (Strong Buy) and a Value grade of A, indicating it is among the best value stocks currently available [3]. - The P/S ratio for PRTH is 0.61, significantly lower than the industry average of 1.59, suggesting it is undervalued relative to its peers [4]. - PRTH's P/CF ratio stands at 6.07, compared to the industry's average of 23.08, further indicating its undervaluation based on cash flow performance [5]. - Over the past 12 months, PRTH's P/CF has fluctuated between a high of 12.06 and a low of 3.30, with a median of 6.45, showcasing its cash flow stability [5]. - The combination of these metrics suggests that PRTH is likely undervalued and presents an impressive value opportunity at the moment [6].