[Financial & Business Highlights](index=1&type=section&id=Financial%20%26%20Business%20Highlights) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) REPAY reported Q2 2025 revenue of $75.6 million, a slight increase, but incurred a significant net loss primarily due to a non-cash goodwill impairment, while achieving strong Free Cash Flow with a high conversion rate Q2 2025 Key Financial Metrics ($ in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $75.6M | $74.9M | +0.9% | | Gross Profit | $57.2M | $58.6M | -2.4% | | Net Loss | $(108.0)M | $(4.2)M | N/A | | Adjusted EBITDA | $31.8M | $33.7M | -5.6% | | Free Cash Flow | $22.6M | $19.3M | +17.1% | | Free Cash Flow Conversion | 71% | 57% | +14 p.p. | - The net loss in Q2 2025 was primarily driven by a non-cash goodwill impairment loss of **$103.8 million**, mainly related to the Consumer Payments segment[3](index=3&type=chunk)[10](index=10&type=chunk) [Second Quarter 2025 Business Highlights](index=1&type=section&id=Second%20Quarter%202025%20Business%20Highlights) REPAY's Q2 2025 business performance was mixed, with gross profit declines due to client losses, yet strong growth in its AP supplier network and instant funding volumes, alongside expanded partnerships - Reported and normalized gross profit declined by **2%** and **1% YoY**, respectively, due to the impact of previously announced client losses[6](index=6&type=chunk) - The AP supplier network grew to over **440,000**, an increase of approximately **47% year-over-year**[10](index=10&type=chunk) - Instant funding volumes increased by approximately **38% year-over-year**[10](index=10&type=chunk) - The company added **3 new integrated software partners**, reaching a total of **286**, and added **10 new credit unions**, for a total of **353**[10](index=10&type=chunk) [Management Commentary and Capital Allocation](index=1&type=section&id=Management%20Commentary%20and%20Capital%20Allocation) CEO John Morris emphasized strategic investments for reaccelerating growth and operational excellence, with a key capital allocation being the repurchase of approximately 5% of outstanding shares - Management is focused on strategic investments to reaccelerate growth, expecting momentum from these initiatives to build towards the end of the year[5](index=5&type=chunk) - The company repurchased **4.8 million shares** for **$22.6 million** during Q2 2025[1](index=1&type=chunk) - Through August 11, 2025, a total of **$38 million** has been used for share repurchases during the year[5](index=5&type=chunk) [Business Segments & Outlook](index=2&type=section&id=Business%20Segments%20%26%20Outlook) [2025 Outlook](index=2&type=section&id=2025%20Outlook) REPAY reiterates its full-year 2025 outlook, anticipating sequential quarterly acceleration in normalized gross profit growth and significant improvement in Free Cash Flow Conversion by Q4 - The company reiterates its previously provided outlook for fiscal year 2025[7](index=7&type=chunk) - Expects sequential quarterly acceleration of normalized gross profit growth, with a Q4 YoY growth rate of **high-single digits to low double-digits**[10](index=10&type=chunk) - Free Cash Flow Conversion is projected to accelerate to **over 60%** by the fourth quarter of 2025[10](index=10&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) In Q2 2025, Consumer Payments saw 2% revenue growth but flat gross profit, while Business Payments had 3% revenue growth but a 5% gross profit decline, with Business Payments showing stronger growth over six months Segment Financials for Three Months Ended June 30 ($ in millions) | Segment | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | | **Consumer Payments** | Revenue | $70.5M | $69.3M | +2% | | | Gross Profit | $55.4M | $55.5M | 0% | | **Business Payments** | Revenue | $10.9M | $10.6M | +3% | | | Gross Profit | $7.6M | $8.0M | -5% | Segment Financials for Six Months Ended June 30 ($ in millions) | Segment | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | | **Consumer Payments** | Revenue | $142.4M | $145.4M | -2% | | | Gross Profit | $112.1M | $115.1M | -3% | | **Business Payments** | Revenue | $21.9M | $20.3M | +8% | | | Gross Profit | $15.1M | $15.1M | +1% | - The Consumer Payments segment provides solutions for collecting payments from and disbursing funds to consumers in verticals like personal/auto loans and receivables management[9](index=9&type=chunk) - The Business Payments segment provides B2B payment solutions, including AP automation, in verticals such as automotive, healthcare, and media[10](index=10&type=chunk)[11](index=11&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Operations](index=6&type=section&id=Consolidated%20Statement%20of%20Operations) REPAY's Q2 2025 total revenue slightly increased to $75.6 million, but operating expenses surged to $180.5 million due to a $103.8 million impairment loss, resulting in a significant net loss of $102.3 million or $(1.15) per share Q2 Statement of Operations Highlights ($ in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $75,626 | $74,906 | | Total operating expenses | $180,530 | $78,327 | | Impairment loss | $103,781 | $0 | | Loss from operations | $(104,904) | $(3,421) | | Net loss attributable to the Company | $(102,251) | $(4,071) | | Loss per Class A share | $(1.15) | $(0.04) | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, REPAY's total assets decreased to $1.41 billion, primarily due to a goodwill impairment, while total liabilities and stockholders' equity also declined Balance Sheet Summary ($ in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $162,615 | $189,530 | | Goodwill | $613,012 | $716,793 | | Total Assets | $1,413,374 | $1,571,908 | | Total Liabilities | $773,970 | $798,739 | | Total Equity | $639,404 | $773,169 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash from operating activities decreased to $35.6 million, while significant cash was used in financing activities for share repurchases and Tax Receivable Agreement payments, leading to a decrease in cash and cash equivalents Six Months Cash Flow Summary ($ in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $35,568 | $55,780 | | Net cash used in investing activities | $(21,002) | $(22,820) | | Net cash used in financing activities | $(42,295) | $(3,069) | | Increase in cash, cash equivalents and restricted cash | $(27,729) | $29,891 | - Key uses of cash in financing activities for the first half of 2025 included **$22.6 million** for treasury share repurchases and **$16.3 million** for payment of the Tax Receivable Agreement[29](index=29&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=9&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) [Reconciliation of Net Income to Adjusted EBITDA](index=9&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 was $31.8 million, down from Q2 2024, with reconciliation from net loss including significant add-backs for non-cash impairment, depreciation, amortization, and share-based compensation Adjusted EBITDA Reconciliation for Q2 ($ in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net loss | $(108,032) | $(4,237) | | Add: Non-cash impairment loss | $103,781 | $0 | | Add: Depreciation and amortization | $25,481 | $26,771 | | Add: Share-based compensation | $3,049 | $5,874 | | **Adjusted EBITDA** | **$31,811** | **$33,728** | [Reconciliation of Net Income to Adjusted Net Income](index=12&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) Adjusted Net Income for Q2 2025 was $19.1 million or $0.20 per share, with key adjustments to GAAP net loss including impairment, amortization of intangibles, and share-based compensation Adjusted Net Income Reconciliation for Q2 ($ in thousands, except per share) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net loss | $(108,032) | $(4,237) | | Add: Amortization of acquisition-related intangibles | $19,506 | $19,702 | | Add: Non-cash impairment loss | $103,781 | $0 | | **Adjusted Net Income** | **$19,083** | **$21,762** | | **Adjusted Net Income per share** | **$0.20** | **$0.22** | [Reconciliation of Operating Cash Flow to Free Cash Flow](index=14&type=section&id=Reconciliation%20of%20Operating%20Cash%20Flow%20to%20Free%20Cash%20Flow) REPAY generated $22.6 million in Free Cash Flow in Q2 2025, an increase from the prior year, calculated from operating cash flow minus capital expenditures, with the conversion rate significantly improving to 71% Free Cash Flow Reconciliation for Q2 ($ in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $33,065 | $30,979 | | Total capital expenditures | $(10,465) | $(11,691) | | **Free cash flow** | **$22,600** | **$19,288** | | **Free cash flow conversion** | **71%** | **57%** | [Reconciliation of Gross Profit Growth to Normalized Gross Profit Growth](index=14&type=section&id=Reconciliation%20of%20Gross%20Profit%20Growth%20to%20Normalized%20Gross%20Profit%20Growth) REPAY presents normalized gross profit growth, adjusting for political media spending, showing a total normalized decline of -1% for Q2 2025 compared to a reported -2% decline Normalized Gross Profit Growth Reconciliation for Q2 2025 vs Q2 2024 | Segment | Gross Profit Growth | Less: Political Media Impact | Normalized Gross Profit Growth | | :--- | :--- | :--- | :--- | | Consumer Payments | (0%) | — | (0%) | | Business Payments | (5%) | (6%) | 1% | | **Total** | **(2%)** | **(1%)** | **(1%)** |

Financial Performance & Credit Profile - HighPeak Energy reported Q2 2025 production of 486 thousand Boe/d [14] - The company's Q2 2025 unhedged EBITDAX per BOE was $3358 [14] - Q2 2025 EBITDAX reached $156 million [14] - As of June 30, 2025, the company's total net debt was $1032 million [16] - Total Proved PV-10 was $3529 million [16] - Total liquidity stood at $268 million, including $168 million in cash and cash equivalents [16] - The company's Net Debt / TTM EBITDAX ratio is 14x [16] Debt & Hedging - HighPeak Energy extended Term Loan and Revolving Credit Facility maturities to September 2028 [21] - The Term Loan was upsized to $12 billion [21] - Approximately 53% of 2H25 oil volumes are hedged [25] - Approximately 89% of 2H25 gas volumes are hedged [25] Operational Efficiency & Cost Savings - Simulfrac operations saved approximately $400000 per well [29] - The company achieved solar savings of $809487 from June to December 2024 [34] - Completion costs decreased by 3-5% due to simulfrac savings of 10% [30]

Core Insights - Repay Holdings (NASDAQ: RPAY) is experiencing a stagnant share price, but there are signs of a potential inflection point that may not be immediately apparent [1] Company Analysis - The current trading price of Repay Holdings does not reflect the underlying opportunities that may arise from market overreactions or shifts in business models [1] - The company is positioned within the financial and technology sectors, which are known for their volatility and potential for asymmetric investment opportunities [1]

Core Viewpoint - Repay Holdings (RPAY) reported quarterly earnings of $0.22 per share, missing the Zacks Consensus Estimate of $0.23 per share, representing a -4.35% earnings surprise [1][2] Financial Performance - The company posted revenues of $77.33 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 7.06%, compared to $80.72 million in the same quarter last year [2] - Over the last four quarters, Repay Holdings has surpassed consensus EPS estimates just once and topped consensus revenue estimates two times [2] Stock Performance - Repay Holdings shares have declined approximately 48.4% since the beginning of the year, while the S&P 500 has decreased by 3.8% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.22 on revenues of $78.49 million, and for the current fiscal year, it is $0.91 on revenues of $331.6 million [7] - The estimate revisions trend for Repay Holdings is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Financial Transaction Services industry, to which Repay Holdings belongs, is currently in the top 30% of over 250 Zacks industries, suggesting a favorable industry outlook [8]

Financial Data and Key Metrics Changes - In Q1 2025, revenue was $77.3 million, representing a decrease of 4% year over year [22] - Reported gross profit declined by 5% year over year, with consumer payment segment gross profit also down by 5%, while business payment segment gross profit increased by 77% year over year [22] - Adjusted EBITDA for Q1 was $33.2 million, maintaining an adjusted EBITDA margin of approximately 43% [23] - Reported free cash flow was negative $8 million, impacted by client losses and working capital changes, but excluding these impacts, free cash flow conversion would have been similar to 38% in Q1 2024 [24] Business Line Data and Key Metrics Changes - Consumer payments showed core growth with contributions from existing clients and new client wins, despite client losses impacting reported growth [8][12] - Business payments reported a gross profit increase of approximately 7% year over year, with a normalized growth of about 12% when excluding political media contributions from the previous year [13][22] - Instant funding product in value-added services saw transaction volumes rise approximately 19% year over year [11] Market Data and Key Metrics Changes - Non-discretionary consumer spending remained resilient year to date, with no major impacts observed from macroeconomic factors [9][52] - The company signed two new software partnerships in consumer payments, increasing total software partners to 182 [10] Company Strategy and Development Direction - The company concluded its strategic review process, focusing on organic growth investments rather than M&A, believing this will yield the best results for shareholders [16][17] - Key operational priorities include enhancing the direct sales model, capitalizing on monetization opportunities, and building indirect partnership channels [17] - The company aims for sequential quarterly normalized gross profit growth, projecting high single-digit to low double-digit growth by Q4 2025 [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to invest organically and produce results that generate shareholder value, with expectations for growth acceleration in the second half of 2025 [18][19] - The macroeconomic environment has changed, but the company remains focused on profitable growth and cash flow generation [16][19] Other Important Information - The Board of Directors increased the share repurchase program authorization to $75 million, maintaining a strong balance sheet with ample liquidity [19][25] - Tim Murphy, the CFO, will be stepping down, with Thomas Sullivan appointed as interim CFO [20][19] Q&A Session Summary Question: Can you provide additional color on the consumer spending environment? - Management noted resiliency in non-discretionary consumer spending, with no major impacts from overall payment processing related to macroeconomic factors [29] Question: Given the increased buyback authorization, do you plan to continue leaning into this rather than M&A? - Management confirmed that they will opportunistically repurchase shares when the share price is disconnected from intrinsic value, while focusing on organic growth [30][31] Question: How far did you go down the strategic review process? - The company assessed various strategic alternatives but concluded that additional investment in organic growth would yield the best results for shareholders [34] Question: Can you help us think about the EBITDA growth trajectory over 2025? - Management indicated that adjusted EBITDA growth would follow a similar path as gross profit growth, with no incremental spend beyond what has been forecasted [38] Question: What are you seeing in terms of repayment volume health in the auto vertical? - Management reported strength in nondiscretionary spending in the auto sector, with no specific issues observed [77]

Financial Data and Key Metrics Changes - In Q1 2025, revenue was $77.3 million, representing a decrease of 4% year over year [19] - Reported gross profit declined by 5% year over year, with consumer payment segment gross profit also down by 5%, while business payment segment gross profit increased by 77% year over year [19] - Adjusted EBITDA for Q1 was $33.2 million, reflecting approximately 43% adjusted EBITDA margins [21] - Reported free cash flow was negative $8 million, impacted by client losses and working capital changes [22] - As of March 31, the company had approximately $165 million in cash and access to $250 million in undrawn revolver capacity, totaling $415 million in liquidity [23] Business Line Data and Key Metrics Changes - Consumer payments showed core growth with contributions from existing clients and new client wins, despite client losses impacting reported growth [6][10] - Business payments reported a gross profit increase of approximately 7% year over year, with a normalized growth of about 12% when excluding political media contributions from the previous year [11][19] - The company signed two new software partnerships in consumer payments, increasing total software partners to 182 [8] Market Data and Key Metrics Changes - The company noted resiliency in non-discretionary consumer spending year to date, despite economic unpredictability [7] - The sales pipeline for enterprise clients remains healthy, with ongoing efforts to enhance payment capabilities [7][8] Company Strategy and Development Direction - The company concluded its strategic review process, focusing on organic growth investments as the best way to create shareholder value [13][14] - Key operational priorities include enhancing the direct sales model, capitalizing on monetization opportunities, and building indirect partnership channels [15] - The company aims for sequential quarterly normalized gross profit growth, targeting high single-digit to low double-digit growth by Q4 2025 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to invest organically and produce results that generate shareholder value [16] - The company anticipates free cash flow conversion exceeding 50% in Q2 and accelerating above 60% by year-end, excluding one-time impacts [22] - Management acknowledged the ongoing macroeconomic uncertainties but emphasized the strength of their business model and value proposition [7][10] Other Important Information - The company announced an increase in its share repurchase program authorization to $75 million [17] - Tim Murphy, the CFO, will be stepping down, with Thomas Sullivan appointed as interim CFO [18] Q&A Session Summary Question: Can you provide additional color on the consumer spending environment? - Management noted resiliency in non-discretionary consumer spending year to date, with no major impacts from overall payment processing related to macroeconomic factors [26][27] Question: Given the increased buyback authorization, do you plan to focus more on this rather than M&A? - Management confirmed that they will opportunistically repurchase shares when they believe the share price is disconnected from intrinsic value, while still focusing on organic growth [28][30] Question: How far did you go down the strategic review process? - Management indicated that the decision to conclude the review was based on the belief that additional investment in organic growth would yield the best results for shareholders [33][34] Question: Can you discuss the EBITDA growth trajectory for 2025? - Management expects adjusted EBITDA growth to follow a similar path as gross profit growth, with no incremental spend beyond what has been forecasted [36] Question: What are the trends in the auto vertical? - Management reported strength in nondiscretionary spending within the auto vertical, with no significant changes observed in client dynamics [75]

Financial Performance - Q1 2025 - Revenue decreased by 4% year-over-year, from $80.7 million in Q1 2024 to $77.3 million in Q1 2025[14, 67] - Gross profit decreased by 5% year-over-year, from $61.5 million in Q1 2024 to $58.7 million in Q1 2025[14, 67] - Adjusted EBITDA decreased by 7% year-over-year, from $35.5 million in Q1 2024 to $33.2 million in Q1 2025[14, 67] - Free Cash Flow decreased significantly from $13.7 million in Q1 2024 to -$8.0 million in Q1 2025, representing a 159% decrease[14, 67] - Free Cash Flow conversion decreased from 38% in Q1 2024 to -24% in Q1 2025[14] Segment Performance - Q1 2025 - Consumer Payments revenue decreased by 6% year-over-year, from $76.1 million in Q1 2024 to $71.9 million in Q1 2025[20] - Consumer Payments gross profit decreased by 5% year-over-year, from $59.6 million in Q1 2024 to $56.7 million in Q1 2025[20] - Business Payments revenue increased by 17% year-over-year excluding political media, but increased 14% as reported, from $9.7 million in Q1 2024 to $11.0 million in Q1 2025[23, 78] - Business Payments gross profit increased by 12% year-over-year excluding political media, but increased 7% as reported, from $7.0 million in Q1 2024 to $7.6 million in Q1 2025[23, 78] Liquidity and Leverage - Total liquidity was $415 million as of Q1 2025, including cash and undrawn revolver capacity[26, 50] - Net debt was $343 million as of March 31, 2025[28] - Net leverage was 2.5x LTM Adjusted EBITDA as of March 31, 2025[28] FY 2025 Outlook - The company expects sequential quarterly acceleration in normalized growth year-over-year[34] - The company expects Q4 normalized growth of high single digit to low double digit[34] - The company expects Free Cash Flow conversion to exceed 50% in Q2 and accelerate above 60% by the end of 2025[34]

Financial Performance - Total revenue for Q1 2025 was $77,325,000, a decrease of 4.3% compared to $80,720,000 in Q1 2024[10] - Net loss for Q1 2025 was $8,168,000, compared to a net loss of $5,365,000 in Q1 2024, representing a 52.5% increase in losses year-over-year[10] - Total revenue for the three months ended March 31, 2025, was $77.325 million, a decrease from $80.720 million in the same period of 2024, representing a decline of approximately 3.0%[32] - The net loss attributable to the Company for the three months ended March 31, 2025, was $7.947 million, compared to a net loss of $5.212 million in the same period of 2024[37] - The Company reported a net loss of $8.2 million for the three months ended March 31, 2025, compared to a net loss of $5.4 million for the same period in 2024[109] - Adjusted Net Income for the same period was $20.3 million, representing a 9.2% year-over-year decrease from $22.4 million in 2024[139] - Net loss attributable to the Company increased by 51.8% year-over-year, reaching $7.9 million in 2025 compared to $5.2 million in 2024[139] Revenue Breakdown - Revenue from direct relationships in the Consumer Payments segment was $69.254 million for Q1 2025, down from $73.311 million in Q1 2024, indicating a decrease of about 5.0%[32] - Consumer Payments segment represented approximately 86% of total revenue for the three months ended March 31, 2025, while Business Payments segment accounted for approximately 14%[90][91] - Consumer Payments segment revenue decreased by $4.2 million or 5.5% year-over-year, totaling $71.9 million for the three months ended March 31, 2025[122] - Business Payments segment revenue increased to $11.0 million for the three months ended March 31, 2025, compared to $9.7 million for the same period in 2024[93] Cash Flow and Liquidity - Cash and cash equivalents at the end of Q1 2025 were $165,466,000, down from $189,530,000 at the end of 2024, a decrease of 12.7%[8] - Net cash provided by operating activities was $2,503,000 for Q1 2025, a significant decrease from $24,801,000 in Q1 2024[16] - As of March 31, 2025, the Company had $165.5 million in cash and cash equivalents, with an available borrowing capacity of $250.0 million under the Second Amended Credit Agreement[143] - Net cash used in investing activities was $10.5 million in 2025, consistent with $11.1 million in 2024, primarily for software development[148] - Net cash used in financing activities was $19.5 million in 2025, compared to $3.0 million in 2024, due to payments under the TRA and tax withholding related to shares vesting[149] Expenses and Costs - Operating expenses for Q1 2025 totaled $80,945,000, a decrease of 2.7% from $83,224,000 in Q1 2024[10] - Costs of services were $18.7 million for the three months ended March 31, 2025, a decrease of $0.5 million or 2.6% from $19.2 million in the same period of 2024[111] - Depreciation and amortization expenses decreased by $1.7 million or 6.3%, totaling $25.3 million for the three months ended March 31, 2025, down from $27.0 million in 2024[113] - Selling, general and administrative expenses remained flat at $37.0 million for the three months ended March 31, 2025, compared to the same period in 2024, reflecting a 0.0% change[112] Assets and Liabilities - Total assets decreased to $1,535,392,000 as of March 31, 2025, down from $1,571,908,000 at the end of 2024, a decline of 2.3%[8] - Total liabilities decreased to $768,194,000 as of March 31, 2025, down from $798,739,000 at the end of 2024, a reduction of 3.8%[8] - Total equity decreased to $767,198,000 as of March 31, 2025, down from $773,169,000 at the end of 2024, a decline of 0.8%[8] - The Tax Receivable Agreement (TRA) balance at the end of the period was $190.4 million, reflecting a decrease from $203.6 million at the beginning of the period[52] - The Company had TRA payables for related parties of $25.5 million as of March 31, 2025, down from $27.5 million as of December 31, 2024[70] Interest and Borrowings - The Company incurred interest expense of $3,107,000 in Q1 2025, compared to $912,000 in Q1 2024, indicating a substantial increase in borrowing costs[10] - The Company incurred interest expense of $2.1 million on convertible senior notes for the three months ended March 31, 2025[64] - The estimated fair value of borrowings as of March 31, 2025, was $456.189 million, reflecting the amortized cost of the revolving credit facility and convertible senior notes[44] - As of March 31, 2025, total borrowings amounted to $507.5 million, with a carrying value of $497.6 million after accounting for debt issuance costs[65] Tax and Compliance - The effective tax rate for the Company was 5.2% for the three months ended March 31, 2025, compared to (6%) for the same period in 2024[79] - The Company recorded an income tax benefit of $0.5 million for Q1 2025, while an income tax expense of $0.3 million was recorded for Q1 2024[79] - The Company recognized adjustments of $0.5 million for deferred tax assets related to the income tax benefit for the three months ended March 31, 2025[80] Shareholder Activities - The company purchased a total of 465,103 shares of Class A common stock during the three months ended March 31, 2025, at an average price of $6.76 per share[170] - The company has a Share Repurchase Program approved for up to $50 million of its outstanding Class A common stock, with no expiration date[170] Risk Factors and Economic Conditions - The Company continues to monitor macroeconomic conditions, including inflation and potential recession impacts, which may affect payment volumes and overall financial performance[101] - The company believes the effects of inflation on its results of operations and financial condition have not been significant, but future impacts cannot be assured[161] - There have been no material changes in risk factors since the last annual report for the year ended December 31, 2024[169]

[Report Overview and Key Announcements](index=1&type=section&id=Report%20Overview%20and%20Key%20Announcements) REPAY's Q1 2025 revenue was $77.3 million with a net loss of $8.2 million, showing strong Business Payments growth despite overall gross profit decline and negative free cash flow [First Quarter 2025 Financial & Business Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20%26%20Business%20Highlights) REPAY reported Q1 2025 revenue of $77.3 million and a net loss of $8.2 million, with Business Payments showing 12% normalized gross profit growth despite overall gross profit decline and negative free cash flow Q1 2025 Financial Highlights | (in $ millions) | Q1 2024 | Q1 2025 | | :--- | :--- | :--- | | Revenue | $80.7 | $77.3 | | Gross profit | $61.5 | $58.7 | | Net (loss) income | $(5.4) | $(8.2) | | Adjusted EBITDA | $35.5 | $33.2 | | Net cash provided by operating activities | $24.8 | $2.5 | | Free Cash Flow | $13.7 | $(8.0) | | Free Cash Flow Conversion | 38% | (24%) | - The Business Payments segment's normalized gross profit growth accelerated to **12% year-over-year**, driven by the core accounts payable business, new enterprise customers, and recent monetization efforts[4](index=4&type=chunk) - Free cash flow was negatively impacted by one-time working capital issues and previously announced client losses[4](index=4&type=chunk) - Key operational achievements in Q1 2025 include an AP supplier network growth to over **390,000** (an increase of approximately **40% year-over-year**), instant funding volumes increasing by approximately **19% year-over-year**, and the addition of **14 new credit unions**, bringing the total to **343**[10](index=10&type=chunk) [Strategic Updates & Management Changes](index=1&type=section&id=Strategic%20Updates%20%26%20Management%20Changes) The company concluded its strategic review process, increased its share repurchase authorization by $25 million to $75 million, and announced the departure of its Chief Financial Officer - The Board of Directors has decided to conclude the company's strategic review process[5](index=5&type=chunk) - The share repurchase authorization was increased by **$25 million**, for a new total authorization of **$75 million**[1](index=1&type=chunk)[5](index=5&type=chunk) - Tim Murphy, the Chief Financial Officer, will be leaving REPAY after **11 years** with the company[5](index=5&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) The company operates two reportable segments: Consumer Payments, focusing on consumer collections, and Business Payments, providing B2B solutions including accounts payable automation [Segment Overview](index=2&type=section&id=Segment%20Overview) The company operates two segments: Consumer Payments for collecting funds from consumers in various verticals, and Business Payments for B2B solutions like accounts payable automation - **Consumer Payments** provides solutions like debit/credit card and ACH processing for clients to collect payments from consumers in key markets including personal loans, automotive loans, and credit unions[9](index=9&type=chunk)[11](index=11&type=chunk) - **Business Payments** offers B2B payment solutions including accounts payable automation and virtual credit card processing in key markets such as retail automotive, education, healthcare, and media[12](index=12&type=chunk) [Segment Financial Results (Q1 2025)](index=3&type=section&id=Segment%20Financial%20Results%20(Q1%202025)) In Q1 2025, Consumer Payments revenue decreased 6% to $71.9 million, while Business Payments revenue increased 14% to $11.0 million, reflecting divergent segment performance Segment Revenue and Gross Profit (Three Months Ended March 31) | ($ in thousands) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Revenue** | | | | | Consumer Payments | $71,942 | $76,136 | (6%) | | Business Payments | $10,988 | $9,677 | 14% | | **Total revenue** | **$77,325** | **$80,720** | **(4%)** | | **Gross profit** | | | | | Consumer Payments | $56,709 | $59,591 | (5%) | | Business Payments | $7,557 | $7,047 | 7% | | **Total gross profit** | **$58,661** | **$61,545** | **(5%)** | [2025 Outlook](index=2&type=section&id=2025%20Outlook) REPAY anticipates accelerating normalized gross profit growth throughout 2025, reaching high-single to low-double digits by Q4, with free cash flow conversion exceeding 60% by Q4 [2025 Company Expectations](index=2&type=section&id=2025%20Company%20Expectations) REPAY expects sequential quarterly acceleration of normalized gross profit growth throughout 2025, with free cash flow conversion projected to exceed 60% by the fourth quarter - The company expects sequential quarterly acceleration of normalized gross profit growth throughout **2025**[4](index=4&type=chunk)[10](index=10&type=chunk) - The fourth quarter year-over-year normalized gross profit growth rate is projected to be in the **high-single digits to low double-digits**[4](index=4&type=chunk)[10](index=10&type=chunk) - Free cash flow conversion is expected to exceed **50% in Q2 2025** and accelerate to above **60% by Q4 2025**[10](index=10&type=chunk) [Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) This section presents REPAY's unaudited consolidated financial statements, including the statement of operations, balance sheets, and cash flows for the reported periods [Consolidated Statement of Operations](index=7&type=section&id=Consolidated%20Statement%20of%20Operations) For Q1 2025, REPAY's total revenue decreased to $77.3 million, and net loss widened to $8.2 million, resulting in a $0.09 loss per share Q1 2025 Statement of Operations Highlights | (in $ thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $77,325 | $80,720 | | Loss from operations | $(3,620) | $(2,504) | | Net loss | $(8,168) | $(5,365) | | Loss per Class A share | $(0.09) | $(0.06) | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $1.54 billion, with cash at $165.5 million, and total liabilities decreased to $768.2 million Balance Sheet Highlights | (in $ thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $165,466 | $189,530 | | Total current assets | $250,127 | $275,248 | | Goodwill | $716,793 | $716,793 | | Total assets | $1,535,392 | $1,571,908 | | Long-term debt | $497,588 | $496,778 | | Total liabilities | $768,194 | $798,739 | | Total equity | $767,198 | $773,169 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 net cash from operating activities significantly decreased to $2.5 million, with $10.5 million used in investing and $19.5 million in financing activities Q1 2025 Statement of Cash Flows Highlights | (in $ thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,503 | $24,801 | | Net cash used in investing activities | $(10,537) | $(11,129) | | Net cash used in financing activities | $(19,484) | $(2,987) | [Non-GAAP Financial Measures and Reconciliations](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section provides reconciliations of non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income, Free Cash Flow, and Normalized Gross Profit Growth [Reconciliation of Net Income to Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) Q1 2025 Adjusted EBITDA was $33.2 million, down from $35.5 million, with significant adjustments for depreciation, share-based compensation, and restructuring costs Reconciliation of Net Loss to Adjusted EBITDA (Q1) | (in $ thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net loss | $(8,168) | $(5,365) | | Depreciation and amortization | $25,294 | $27,028 | | Share-based compensation expense | $6,045 | $6,923 | | Restructuring and other strategic initiative costs | $3,511 | $2,184 | | **Adjusted EBITDA** | **$33,175** | **$35,513** | [Reconciliation of Net Income to Adjusted Net Income](index=12&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) Q1 2025 Adjusted Net Income was $20.3 million ($0.22 per share), primarily adjusted by adding back $19.3 million for amortization of acquisition-related intangibles Reconciliation of Net Loss to Adjusted Net Income (Q1) | (in $ thousands, except per share) | 2025 | 2024 | | :--- | :--- | :--- | | Net loss | $(8,168) | $(5,365) | | Amortization of acquisition-related intangibles | $19,329 | $19,736 | | Share-based compensation expense | $6,045 | $6,923 | | **Adjusted Net Income** | **$20,314** | **$22,378** | | **Adjusted Net Income per share** | **$0.22** | **$0.23** | [Reconciliation of Operating Cash Flow to Free Cash Flow](index=13&type=section&id=Reconciliation%20of%20Operating%20Cash%20Flow%20to%20Free%20Cash%20Flow) Q1 2025 Free Cash Flow was negative $8.0 million, a significant drop from $13.7 million in Q1 2024, resulting in a -24% conversion rate Reconciliation to Free Cash Flow (Q1) | (in $ thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,503 | $24,801 | | Total capital expenditures | $(10,537) | $(11,129) | | **Free cash flow** | **$(8,034)** | **$13,672** | | **Free cash flow conversion** | **(24%)** | **38%** | [Reconciliation to Normalized Gross Profit Growth](index=13&type=section&id=Reconciliation%20to%20Normalized%20Gross%20Profit%20Growth) Q1 2025 total gross profit decline of 5% normalizes to 4%, while Business Payments' normalized growth was 12%, adjusted for prior year's political media spending Normalized Gross Profit Growth by Segment (Q1 2025 vs Q1 2024) | | Consumer Payments | Business Payments | Total | | :--- | :--- | :--- | :--- | | Gross profit growth | (5%) | 7% | (5%) | | Less: Growth from political media | — | (5%) | (1%) | | **Normalized gross profit growth** | **(5%)** | **12%** | **(4%)** |

Economics and Finance student with a strong interest in uncovering unique opportunities within special situations and value investing. My focus lies in identifying and analyzing market inefficiencies, leveraging insights to capture both upside and downside potentiality. With a disciplined approach to research and valuation, I aim to uncover opportunities by employing a detail-oriented approach and applying rigorous analysis to deliver superior risk-adjusted returns in dynamic market environments. Analyst's ...