Priority Technology (US:PRTH)2022-08-09 12:18Revenue Growth - For the three months ended June 30, 2022, consolidated revenue was $166.4 million, an increase of $41.4 million, or 33.1%, from $125.0 million for the same period in 2021[125]. - For the six months ended June 30, 2022, consolidated revenue reached $319.7 million, up by $81.4 million, or 34.2%, from $238.3 million for the same period in 2021[126]. - Merchant card fees revenue for the three months ended June 30, 2022 was $139.8 million, an increase of $21.4 million, or 18.1%, from $118.4 million for the same period in 2021[127]. - Outsourced services and other services revenue for the three months ended June 30, 2022 was $6.9 million, an increase of $2.1 million, or 43.8%, from $4.8 million for the same period in 2021[129]. - Money transmission services revenue for the three months ended June 30, 2022 was $17.2 million, related to the business acquired from Finxera in September 2021[131]. - Revenue from the SMB Payments segment was $142.5 million for the three months ended June 30, 2022, representing an increase of $22.2 million, or 18.5%, compared to $120.3 million in the same period of 2021[152]. - For the six months ended June 30, 2022, SMB Payments segment revenue reached $272.5 million, an increase of $43.1 million, or 18.8%, from $229.4 million in the same period of 2021[153]. - Revenue from the B2B Payments segment was $5.3 million for the three months ended June 30, 2022, an increase of $1.3 million, or 32.5%, compared to $4.0 million in the same period of 2021[159]. - Revenue from the B2B Payments segment was $11.2 million for the six months ended June 30, 2022, a 49.3% increase from $7.5 million in the same period of 2021[160]. - Revenue from the Enterprise Payments segment was $18.6 million for the three months ended June 30, 2022, a significant increase from $0.7 million in the same period of 2021, driven by the Finxera acquisition[165]. Operating Expenses - Total operating expenses for the three months ended June 30, 2022 were $153.4 million, an increase of $35.8 million, or 30.5%, from $117.6 million for the same period in 2021[133]. - Cost of revenue for the three months ended June 30, 2022 was $110.7 million, an increase of $20.9 million, or 23.3%, from $89.8 million for the same period in 2021[134]. - Salary and employee benefits expense for the three months ended June 30, 2022 was $15.8 million, an increase of $5.4 million, or 51.9%, from $10.4 million for the same period in 2021[136]. - Depreciation and amortization expense for the three months ended June 30, 2022 was $17.5 million, an increase of $6.8 million, or 63.6%, from $10.7 million for the same period in 2021[138]. - Selling, general and administrative expenses for the three months ended June 30, 2022 were $9.3 million, an increase of $2.6 million, or 38.8%, from $6.7 million for the same period in 2021[140]. Interest and Other Expenses - Interest expense for the three months ended June 30, 2022, was $12.3 million, an increase of $5.0 million, or 68.5%, from $7.3 million in the same period of 2021, primarily due to additional borrowings for the acquisition of Finxera[143]. - For the six months ended June 30, 2022, interest expense was $23.9 million, up $7.4 million, or 44.8%, from $16.5 million in the same period of 2021, also driven by the acquisition-related borrowings[144]. - Total other expense, net for the three months ended June 30, 2022, was $(12.3) million, a decrease of $3.1 million from $(15.4) million in the same period of 2021[142]. Operating Income - Operating income from the SMB Payments segment was $14.0 million for the three months ended June 30, 2022, a decrease of $0.4 million, or 2.8%, from $14.4 million in the same period of 2021[154]. - For the six months ended June 30, 2022, operating income from the SMB Payments segment was $26.5 million, down $1.2 million, or 4.3%, from $27.7 million in the same period of 2021[155]. - Operating income from the B2B Payments segment was $663,000 for the three months ended June 30, 2022, compared to $21,000 in the same period of 2021, reflecting a significant improvement[158]. - Operating income from the B2B Payments segment was $1.1 million for the six months ended June 30, 2022, compared to an operating loss of $0.4 million for the same period in 2021[163]. - Operating income from the Enterprise Payments segment was $10.2 million for the six months ended June 30, 2022, compared to $0.3 million for the same period in 2021[168]. Tax and Cash Flow - The effective tax rate for 2022 was 61.9%, significantly higher than the -18.7% in 2021, primarily due to changes in the valuation allowance against certain business interest carryover deferred tax assets[146]. - Net cash provided by operating activities was $30.3 million for the six months ended June 30, 2022, a 409.2% increase from net cash used in operating activities of $9.8 million in the same period of 2021[177]. - Net cash used in investing activities was $12.7 million for the six months ended June 30, 2022, a decrease from $83.1 million in the same period of 2021[178]. Debt and Liquidity - As of June 30, 2022, the company had outstanding debt obligations of $608.4 million, a decrease of $1.9 million from $610.3 million at December 31, 2021[180]. - The company had cash totaling $22.2 million as of June 30, 2022, compared to $20.3 million at December 31, 2021[174]. - The current portion of long-term debt included in current liabilities was $6.2 million as of June 30, 2022[174]. - The company anticipates that cash on hand and funds generated from operations will be sufficient to meet working capital requirements for at least the next 12 months[172].