Core Insights - Priority Technology Holdings, Inc. reported a strong financial performance for Q4 and full year 2025, with net revenue growth of 8% and adjusted EPS increasing by 102% year over year to $1.03 [5][12] - The company anticipates revenue growth of 6% to 9% for 2026, projecting total revenue between $1.0 billion and $1.04 billion, despite macroeconomic challenges [6][24] Financial Performance - For Q4 2025, revenue reached $247.1 million, a 9% increase from the previous year, with adjusted gross profit rising 19% to $100.2 million and adjusted EBITDA increasing 16% to $60.1 million [7][12] - The company ended 2025 with 1.8 million customer accounts, up from 1.2 million the previous year, and annual transaction volume increased by $20 billion to $150 billion [5][12] Segment Performance - Merchant Solutions generated Q4 revenue of $165.3 million, a 6.2% increase year over year, with adjusted gross profit of $40.1 million, up 25.5% [14][16] - The Payables segment saw revenue of $26.8 million, a 12.7% increase, with adjusted EBITDA growing 60.8% year over year to $3.9 million [17][18] - Treasury Solutions reported Q4 revenue of $57.3 million, a 17.8% increase, with adjusted gross profit margins at 91.9% [19][20] Strategic Updates - The company is focused on enhancing its unified commerce platform and expanding into new verticals such as real estate, healthcare, and sports entertainment, leveraging AI and modern technology stacks [29][48] - Priority Technology Holdings, Inc. has successfully remediated a material weakness in its internal controls over financial reporting as of December 31, 2025 [28] Guidance and Outlook - For 2026, the company expects adjusted gross profit to range from $405 million to $425 million, with gross margins expanding by 75 to 100 basis points from 2025 levels [24][25] - The guidance reflects anticipated organic growth rates of 3% to 4% in Merchant Solutions and 8% to 10% in Payables, while Treasury Solutions is expected to maintain low double-digit growth [25][27]

Financial Data and Key Metrics Changes - Priority Technology reported a net revenue growth of 8% for the full year 2025, with adjusted gross profit and adjusted EBITDA growth of 14% and 10% respectively [5] - Adjusted EPS increased by $0.52 or 102% year-over-year to $1.03 for fiscal 2025 [5] - Q4 revenue was $247.1 million, a 9% increase from the prior year, leading to a 19% increase in adjusted gross profit to $100.2 million and a 16% improvement in adjusted EBITDA to $60.1 million [8][9] Business Line Data and Key Metrics Changes - Merchant Solutions generated Q4 revenue of $165.3 million, up 6.2% year-over-year, with 3% organic growth [16] - Payables segment revenue increased by 12.7% year-over-year to $26.8 million, with adjusted gross profit rising by 15.9% [18] - Treasury Solutions segment revenue grew by 17.8% to $57.3 million, driven by strong enrollment trends and an increase in billed clients [20] Market Data and Key Metrics Changes - The total customer accounts on the commerce platform increased to 1.8 million from 1.2 million year-over-year [6] - Annual transaction volume increased by $20 billion to $150 billion [6] - Average account balances under administration improved by $500 million to $1.7 billion [6] Company Strategy and Development Direction - The company anticipates achieving 6%-9% top-line revenue growth in 2026, with adjusted EBITDA expected to range from $230 million to $245 million [8][25] - Priority is focusing on high-margin segments and investing in new verticals, including real estate, healthcare, and sports entertainment [51][52] - The company is positioning itself to leverage AI's impact on SaaS business models while maintaining a disciplined tech expense structure [28][29] Management's Comments on Operating Environment and Future Outlook - Management noted stabilization in the macro environment compared to Q3, with expectations of similar conditions for 2026 [35] - The company is cautious about headwinds from lower interest rates and a challenging consumer spending environment [8][36] - Management expressed confidence in the growth of the Merchant Solutions, Payables, and Treasury Solutions segments despite market challenges [7][12] Other Important Information - The company successfully remediated a material weakness in its internal controls over financial reporting as of December 31, 2025 [27] - Free cash flow generated in Q4 was $28 million, with a run rate of approximately $112 million [23][24] Q&A Session Summary Question: Is there stabilization in the macro environment? - Management indicated that Q4 showed stabilization compared to Q3, with guidance reflecting current trends [35] Question: Update on enterprise business pipeline? - The pipeline remains strong, but conversion timelines are variable, particularly in real estate and sports [38] Question: Average CFTPay monthly enrollments? - The slowdown in Q4 is seasonal, with expectations for an uptick in Q1 as consumers resolve debts [43] Question: Key strategic priorities for 2026? - The company will continue to invest in high-growth areas, particularly in sectors like real estate and healthcare [50] Question: How to bridge the gap between gross profit and EBITDA growth? - The divergence is mainly due to investments in personnel and technology, with interest rate headwinds affecting both gross profit and EBITDA [71]

Financial Data and Key Metrics Changes - Priority Technology reported a net revenue growth of 8% for the year, with adjusted gross profit and adjusted EBITDA growth of 14% and 10% respectively, and adjusted EPS increased by 102% year-over-year to $1.03 for fiscal 2025 [5][6] - Q4 revenue was $247.1 million, a 9% increase from the prior year, leading to a 19% increase in adjusted gross profit to $100.2 million and a 16% improvement in adjusted EBITDA to $60.1 million [8][9] - Adjusted gross profit margin for Q4 was 40.6%, up 360 basis points from the prior year [9] Business Line Data and Key Metrics Changes - Merchant Solutions generated Q4 revenue of $165.3 million, a 6.2% increase year-over-year, with 3% organic growth [16] - Payables segment revenue was $26.8 million, a 12.7% increase year-over-year, with adjusted gross profit up 15.9% to $7.4 million [18] - Treasury Solutions segment revenue increased by 17.8% to $57.3 million, with adjusted gross profit margins at 91.9% for the quarter [20] Market Data and Key Metrics Changes - The company ended the year with 1.8 million total customer accounts, up from 1.2 million the previous year, and annual transaction volume increased by $20 billion to $150 billion [6] - Average account balances under administration improved by $500 million to $1.7 billion [6] Company Strategy and Development Direction - The company anticipates achieving 6%-9% top-line revenue growth in 2026, with adjusted EBITDA expected to range from $230 million to $245 million [8][25] - Priority is focusing on high-growth areas such as real estate, healthcare, and sports entertainment, while also investing in international remittance and optimizing its commerce platform [50][51] Management's Comments on Operating Environment and Future Outlook - Management noted stabilization in the macro environment compared to Q3, with expectations of similar conditions for 2026 [35] - The company is aware of headwinds from lower interest rates and is adjusting growth expectations accordingly [36][26] Other Important Information - The company successfully remediated a material weakness in its internal controls over financial reporting as of December 31, 2025 [27] - Free cash flow generated in Q4 was $28 million, with a run rate of approximately $112 million, equating to almost $1.34 of free cash flow per diluted share [23][24] Q&A Session Summary Question: Is there stabilization in the macro environment? - Management observed stabilization in Q4 compared to Q3 and expects similar conditions for 2026 [35] Question: Update on enterprise business pipeline? - The pipeline remains strong, but conversion takes time due to the nature of the sales cycles [38] Question: Average CFTPay monthly enrollments? - The slowdown in Q4 is seasonal, with expectations for an uptick in Q1 [43] Question: Key strategic priorities for 2026? - The company will continue to invest in high-growth areas and maintain a disciplined approach to M&A [48][65] Question: How to bridge the gap between gross profit and EBITDA growth? - The divergence is mainly due to investments in personnel and technology, with interest rate headwinds affecting both levels [71]

Financial Data and Key Metrics Changes - Priority Technology reported a net revenue growth of 8% for the full year 2025, with adjusted gross profit and adjusted EBITDA growth of 14% and 10% respectively, and adjusted EPS increased by 102% year-over-year to $1.03 [4][5] - For Q4 2025, revenue was $247.1 million, a 9% increase from the prior year, leading to a 19% increase in adjusted gross profit to $100.2 million and a 16% improvement in adjusted EBITDA to $60.1 million [6][12] - Adjusted gross profit margin for Q4 was 40.6%, up 360 basis points from the prior year, reflecting strong performance in high-margin segments [7][12] Business Line Data and Key Metrics Changes - Merchant Solutions generated Q4 revenue of $165.3 million, a 6.2% increase year-over-year, with 3% organic growth [14] - Payables segment revenue increased by 12.7% year-over-year to $26.8 million, with adjusted gross profit rising by 15.9% to $7.4 million [17] - Treasury Solutions revenue for Q4 was $57.3 million, up 17.8% year-over-year, driven by strong enrollment trends and an increase in billed clients [19] Market Data and Key Metrics Changes - The company ended 2025 with 1.8 million total customer accounts, up from 1.2 million the previous year, and annual transaction volume increased by $20 billion to $150 billion [5] - Average account balances under administration improved by $500 million to $1.7 billion [5] Company Strategy and Development Direction - The company anticipates achieving 6%-9% top-line revenue growth in 2026, with adjusted EBITDA expected to range from $230 million to $245 million [6][24] - Priority is focusing on its Connected Commerce platform to streamline financial operations for businesses, emphasizing the importance of compliance and operational efficiency [8][10] - The company is investing in high-growth areas such as real estate, healthcare, and sports entertainment, while also addressing the competitive landscape with modern technology solutions [49][50] Management's Comments on Operating Environment and Future Outlook - Management noted stabilization in the macro environment in Q4 compared to Q3, with expectations of similar conditions for 2026 [33] - The company is cautious about potential headwinds from lower interest rates and is adjusting growth expectations accordingly [34][25] - Management expressed confidence in the long-term stability and performance of the company despite economic uncertainties [29] Other Important Information - The company successfully remediated a material weakness in its internal controls over financial reporting as of December 31, 2025 [26] - Free cash flow for Q4 was $28 million, with expectations for continued cash generation in 2026 [21][58] Q&A Session Summary Question: Stabilization in the macro environment - Management indicated that Q4 showed stabilization compared to Q3, with guidance for 2026 reflecting similar macro conditions [33] Question: Update on enterprise business pipeline - The pipeline remains strong, but conversion timelines are variable, particularly in real estate and sports entertainment [36] Question: Average CFTPay monthly enrollments - The slowdown in new enrollments in Q4 was seasonal, with expectations for an uptick in Q1 [40] Question: Key strategic priorities for 2026 - The company will continue to invest in high-growth areas and maintain a disciplined approach to M&A [47][62] Question: Sustainability of Payables EBITDA growth - Management expects EBITDA growth to correlate more closely with revenue growth moving forward, with no significant margin shifts anticipated [72]

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]