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]

Financial Performance - The company reported the strongest revenue performance in its history for both Q4 and the full year, with Q4 revenue of $227.1 million, a 14% increase year-over-year, and full-year revenue of $879.7 million, a 16% increase [7][9][10] - Adjusted gross profit for Q4 was $83.9 million, up 15% from the prior year, and adjusted EBITDA was $51.7 million, reflecting a 16% improvement [9][10][28] - For the full year, adjusted gross profit increased by 19% to $328.1 million, and adjusted EBITDA grew by 21% to $204.3 million [10][28] Business Segment Performance - 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% [18][20] - The B2B segment saw revenue of $23.7 million, a 10.9% increase, with adjusted gross profit rising 24% to $6.4 million [22][23] - The Enterprise segment reported 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 - The company processed over $130 billion in annual transaction volume and managed over $1.2 billion in average daily account balances [7] - The percentage of adjusted gross profit from recurring revenues reached over 63% in Q4, nearly doubling since early 2022 [17] Company Strategy and Industry Competition - The company aims to sustain momentum in its acquiring, payables, and Enterprise segments, projecting 10% to 14% revenue growth for 2025 [8][36] - The focus remains on innovation in SaaS payments and banking solutions, with a commitment to refining customer experiences [12][41] - The company is positioned as an undervalued player compared to industry peers, with a strategy to leverage its public currency for potential acquisitions [18][42] Management Commentary 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 is actively working to address a material weakness in internal controls over financial reporting, which did not affect the financial results [34][35] Other Important Information - The company redeemed its preferred stock, resulting in a fourth-quarter preferred dividend of $2.65 million [31] - A $10 million prepayment on the term loan was made post-quarter end, with plans to continue reducing the cost of capital [32][36] Q&A Session Summary Question: Capital allocation strategy between debt pay down and increased spending - Management will continue to evaluate the best use of capital, balancing debt pay down with potential M&A opportunities [50] Question: Impact of interest rate cuts on guidance - Management has factored in expected interest rate cuts into their 2025 guidance, taking a conservative approach [54][56] Question: Impact of tariffs on business - Management noted that tariffs have not significantly impacted the acquiring side, but there is increased demand for B2B strategies due to constrained working capital [67] Question: Explanation of gross margin decline in consumer payments - Management clarified that organic margins have increased, and the decline is due to residual purchases running off [73][78] Question: Magnitude of CapEx to OpEx shift - The expected impact from the CapEx to OpEx shift in 2025 is approximately $4 million [110]

Financial Data and Key Metrics Changes - The company reported a record revenue performance for both Q4 and the full year, with Q4 revenue of $227.1 million, a 14% increase year-over-year, and full-year revenue of $879.7 million, reflecting a 16% growth [6][7][9] - Adjusted gross profit for Q4 increased by 15% to $83.9 million, while adjusted EBITDA grew by 16% to $51.7 million [6][7] - For the full year, adjusted gross profit rose by 19% to $328.1 million, and adjusted EBITDA increased by 21% to $204.3 million [7][9] Business Line Data and Key Metrics Changes - The SMB segment generated Q4 revenue of $155.7 million, up 11.1% year-over-year, with adjusted gross profit of $32 million, a slight increase of 0.4% [11][13] - The B2B segment saw revenue of $23.7 million, a 10.9% increase, with adjusted gross profit rising by 24% to $6.4 million [14][15] - The Enterprise segment reported Q4 revenue of $48.7 million, a 27% increase, with adjusted gross profit also increasing by 27% to $45.6 million [15][16] Market Data and Key Metrics Changes - The company processed over $130 billion in annual transaction volume and managed over $1.2 billion in average daily account balances [5] - The percentage of adjusted gross profit from recurring revenues reached over 63% in Q4, nearly doubling since early 2022 [10] Company Strategy and Development Direction - The company aims to achieve 10% to 14% top-line revenue growth in 2025, targeting a revenue range of $965 million to $1 billion, and adjusted EBITDA growth of 8% to 13% [5][22] - The focus remains on innovation in SaaS payments and banking solutions, with a commitment to refining customer experiences and enhancing operational efficiencies [8][24] - The management emphasizes the importance of being opportunistic in acquisitions, particularly in sectors facing challenges [25][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining momentum despite potential headwinds from lower interest rates and a challenging macroeconomic environment [5][22] - The company is actively working to remediate identified weaknesses in internal controls over financial reporting, which did not affect the financial results [20][21] Other Important Information - The company redeemed its preferred stock, resulting in a fourth-quarter preferred dividend of $2.65 million [18] - The transition from CapEx to OpEx is expected to impact expenses, with an estimated $4 million effect in 2025 [80] Q&A Session Summary Question: Capital allocation strategy between debt pay down and increased spending - Management will continue to evaluate the best use of capital, balancing debt pay down with potential M&A opportunities [32][33] Question: Impact of interest rate cuts on guidance - The company has factored in conservative estimates regarding deposit growth and interest rate impacts into its 2025 guidance [35][37] Question: Impact of tariffs on business - Management noted that tariffs have not significantly impacted the acquiring side, but there is increased demand for buyer-funded strategies in the B2B segment [45][46] Question: Decline in gross margin percentage for consumer payments - The decline is attributed to residual purchases running off, but core margins have actually expanded when adjusted for one-time write-offs [49][56] Question: Magnitude of CapEx to OpEx shift - The shift is expected to have a $4 million impact on OpEx in 2025 as the company migrates to a public cloud environment [80] Question: Adjusted EPS expectations for 2025 - The company anticipates adjusted EPS could approach $1 per share based on normal growth trends [88][89]

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].

Core Viewpoint - Priority Technology Holdings, Inc. (PRTH) has demonstrated significant stock growth of 227.3% over the past year, outperforming both the industry and the S&P 500 composite [1][4]. Company Performance - PRTH's stock closed at $10.55, which is 18.2% lower than its 52-week high of $12.47, yet it is trading above its 50-day moving average, indicating positive investor sentiment [4]. - The company has nearly 1,200 partners and relies on strong reseller relationships, with one reseller contributing over 10% of its total bankcard processing volume in 2023 [6][7]. - In Q3 2024, PRTH reported a 9.7% year-over-year growth in merchant bankcard processing dollar value, highlighting the effectiveness of its reseller strategy [7]. Market Position - The global mobile payment market, valued at $88.5 billion in 2024, is expected to grow at a CAGR of 38% from 2025 to 2030, providing a favorable environment for PRTH [9][10]. - PRTH's top line rose by 20.1% year-over-year in Q3 2024, with significant improvements in key metrics such as merchant bankcard processing dollar value and B2B issuing dollar volume [11]. Financial Metrics - PRTH shares are currently priced at 12.8 times forward 12-month earnings per share, significantly lower than the industry average of 41.5 times, indicating a potentially undervalued stock [13]. - The trailing 12-month EV-to-EBITDA ratio for PRTH is 8.2 times, compared to the industry's average of 87.3 times, further suggesting an attractive valuation [15]. Liquidity and Growth Outlook - The company's current ratio stands at 1.04, which, while lower than the industry average of 2.21, shows improvement from previous quarters, indicating effective short-term debt coverage [17]. - The Zacks Consensus Estimate projects PRTH's 2024 revenues at $878.8 million, reflecting a 16.3% growth year-over-year, with expectations for continued growth into 2025 [19]. Investment Recommendation - The expanding mobile payment market and PRTH's efforts to enhance its reseller partnerships position the company for long-term growth, making it an appealing investment opportunity [20].

Core Viewpoint - Priority Technology (PRTH) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements, particularly due to institutional investors' reliance on these estimates for valuation [4][6]. - Priority Technology is projected to earn -$0.20 per share for the fiscal year ending December 2024, reflecting a year-over-year change of 68.3% [8]. - Over the past three months, the Zacks Consensus Estimate for Priority Technology has increased by 49%, indicating a positive trend in earnings expectations [8]. Zacks Rating System - The Zacks Rank stock-rating 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]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, highlighting the superior earnings estimate revision feature of these stocks [9][10].

Revenue Growth and Financial Performance - Priority's revenue CAGR from 2021 to 2023 was ~21%, with Adjusted Gross Profit CAGR at ~33% and Adjusted EBITDA CAGR at ~32%[9] - Q3 2024 consolidated revenue increased 17% to $652.6 million, with adjusted gross profit up 21% to $244.1 million and adjusted EBITDA growing 23% to $152.5 million[25] - Revenue for Q4 2024 is expected to be between $225.2M and $227.2M[50][51] - Revenue growth for 2025 is forecasted to be in the range of 10.0% to 14.0%[54] - Total Revenue for Q3 2024 was $227.0 million, with Recurring and Re-Occurring revenue contributing 97% of the total[60] Segment Performance - Q3 2024 revenue breakdown: SMB segment generated $158.8M with a 22.4% Adj. Gross Profit margin, B2B segment generated $22.1M with a 28.5% margin, and Enterprise segment generated $47.1M with a 93.6% margin[11] - SMB segment revenue grew 13% YoY in Q3 2024, with adjusted gross profit margin at 22.4%[23][29] - B2B segment revenue surged 58% YoY in Q3 2024, with adjusted gross profit margin reaching 28.5%[23][31] - Enterprise segment revenue increased 34% YoY in Q3 2024, with adjusted gross profit margin at 93.6%[23][35] - B2B segment added 28,000 suppliers in 2024 and now has 90,000 buyers on its platform as of Q3 2024[31] - Enterprise segment account balances reached $1.1 billion in Q3 2024, with 100% nationwide MTL coverage[33] Recurring Revenue and Profitability - ~60% of Q3 2024 Adjusted Gross Profit came from recurring revenue, with ~97% of Q3 2024 revenue being recurring or re-occurring[9] - Recurring revenue for Q3 2024 was $66.9 million, accounting for 29% of total revenue, while Re-Occurring revenue was $153.7 million, making up 68% of total revenue[60] - Adjusted Gross Profit from Recurring revenue in Q3 2024 was $51.3 million, representing 60% of total Adjusted Gross Profit[60] - Priority's Free Cash Flow Conversion was ~89% YTD 2024, driven by a highly visible revenue model with largely recurring or re-occurring revenue[9] - Free Cash Flow for YTD September 2024 was $135.5 million, with a Free Cash Flow Conversion rate of 88.8%, up from 87.7% in the same period last year[61] Adjusted EBITDA and Margins - Priority's Adjusted EBITDA margin is estimated to expand by 456 basis points since 2021, reaching 23.3% in 2024E[21] - Adjusted EBITDA for Q3 2024 increased to $54.6 million, up from $45.0 million in Q3 2023, with an Adjusted EBITDA Margin of 24.1% compared to 23.8% in the same period last year[59] - Adjusted EBITDA for YTD September 2024 was $152.5 million, up from $123.7 million in the same period last year, with an Adjusted EBITDA Margin of 23.4% compared to 22.2%[61] - Adjusted Gross Profit for Q4 2024 is projected to range from $82.7M to $86.5M[50][51] - Adjusted EBITDA for Q4 2024 is estimated to be between $49.7M and $54.1M[50][51] - Adjusted Gross Profit margin for 2025 is expected to be between 37.5% and 39.0%[54] - Adjusted EBITDA margin for 2025 is anticipated to range from 22.5% to 24.0%[54] Market Position and Opportunities - The company has a $25 trillion addressable market in North America for accounts payable/receivable flows and a $112B embedded finance market, with only ~17% captured[12] - The U.S. consumer card payment volume is expected to grow by $4 trillion from 2022A to 2027E[15] - Priority is the 6th largest U.S. non-bank merchant acquirer, with $127B in LTM Q3 2024 volume and 1.1M merchants[19] Acquisitions and Strategic Moves - The company completed the acquisition of Plastiq in Q3 2023 and continues to pursue strategic acquisitions in vertical markets and geographic expansion[31][46] - The company acquired RentPayment from Yapstone, Inc for $71M in 2019, leading to a 25% revenue growth and 65% increase in Adj. EBITDA[47] - Finxera was acquired for $407M net of cash in 2021, leveraging its technology platform for Banking & Treasury Solutions[47] - Plastiq assets were acquired out of bankruptcy for $37.3M in 2023, achieving Adj. EBITDA positivity within 2 quarters[47] Financial Metrics and Ratios - Priority's LTM Q3 2024 volume was $46.4B, with $1.1B in account balances and $70.3B in total card dollar volume[11] - YTD Q3 2024 free cash flow grew 25% to $147.1 million, with free cash flow conversion at 89.9%[38] - CapEx spend for YTD Q3 2024 was $21.3 million, representing 2.8% of revenue[40] - Net leverage ratio decreased to 4.0x as of Q3 2024, down from 8.8x in 2021[43] - Capex for YTD September 2024 was $17.0 million, slightly higher than the $15.3 million in the same period last year[61] - Interest Expense for YTD September 2024 increased to $65.8 million, compared to $55.5 million in the same period last year[61] - Depreciation and Amortization for YTD September 2024 decreased to $44.2 million, down from $53.3 million in the same period last year[61] - Income Before Taxes for Q3 2024 was $15.5 million, with a margin of 6.8%, compared to $4.2 million and a margin of 2.2% in Q3 2023[59] Ownership and Market Cap - The company has a 75.0% insider ownership and a market cap of $739M as of January 14, 2025[6] Adjusted Gross Profit and EBITDA Details - Adjusted Gross Profit for the nine months ended September 30, 2024, was $244.1M, with a margin of 37.4%[58]