Repay (RPAY) - 2025 Q2 - Quarterly Results

Financial & Business Highlights Second Quarter 2025 Financial Highlights 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][10] Second Quarter 2025 Business Highlights 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] - The AP supplier network grew to over 440,000, an increase of approximately 47% year-over-year[10] - Instant funding volumes increased by approximately 38% year-over-year[10] - 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] Management Commentary and Capital Allocation 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] - The company repurchased 4.8 million shares for $22.6 million during Q2 2025[1] - Through August 11, 2025, a total of $38 million has been used for share repurchases during the year[5] Business Segments & Outlook 2025 Outlook REPAY reiterates its full-year 2025 outlook, anticipating sequential quarterly acceleration in normalized gross profit growth and significant improvement in Free Cash Flow Conversion by Q4 - The company reiterates its previously provided outlook for fiscal year 2025[7] - Expects sequential quarterly acceleration of normalized gross profit growth, with a Q4 YoY growth rate of high-single digits to low double-digits[10] - Free Cash Flow Conversion is projected to accelerate to over 60% by the fourth quarter of 2025[10] Segment Performance In Q2 2025, Consumer Payments saw 2% revenue growth but flat gross profit, while Business Payments had 3% revenue growth but a 5% gross profit decline, with Business Payments showing stronger growth over six months Segment Financials for Three Months Ended June 30 ($ 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] - The Business Payments segment provides B2B payment solutions, including AP automation, in verticals such as automotive, healthcare, and media[10][11] Consolidated Financial Statements Consolidated Statement of Operations 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 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 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] Non-GAAP Financial Measures & Reconciliations Reconciliation of Net Income to Adjusted EBITDA 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 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 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 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%) |