LAS VEGAS--(BUSINESS WIRE)--Dealer Merchant Services (DMS) will exhibit at the National Automobile Dealers Association (NADA) Show Feb. 3–6 in Las Vegas, marking its first appearance at the industry's flagship event since joining Priority's commerce platform in 2025. At booth 6112N, the DMS team will meet with dealers and industry partners to share its perspective on the future of automotive commerce, including how payments, cost recovery, and money movement across the dealership affect margins, customer ex ...

November 2025 R: 0 G: 62 B: 41 R: 1 G: 39 B: 26 R: 254 G: 109 B: 18 R: 255 G: 255 B: 255 Priority Technology Holdings, Inc. (Nasdaq: PRTH) Supplemental Slides: Q3 2025 Earnings Call R: 231 G: 229 B: 170 R: 166 G: 166 B: 166 R: 117 G: 209 B: 208 R: 131 G: 201 B: 126 R: 37 G: 37 B: 37 Disclaimer Important Notice Regarding Forward-Looking Statements and Non-GAAP Measures This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such stat ...

Financial Data and Key Metrics Changes - The company reported a 9% increase in net revenue for Q2 2025, reaching $239.8 million, with adjusted gross profit growing by 13% to $92.4 million and adjusted EBITDA increasing by 9% to $56 million [4][5][6] - Adjusted EPS rose by $0.15 year over year to $0.26, and adjusted gross profit margin improved by 135 basis points to 38.5% [4][6] - For the year-to-date, revenue grew by 9% to $464.4 million, with adjusted gross profit up 14% to $179.7 million and adjusted EBITDA up 10% to $107.3 million [6][12] Business Line Data and Key Metrics Changes - The SMB segment generated Q2 revenue of $163.2 million, a 5.2% increase year over year, with adjusted gross profit remaining consistent at $35.4 million [12][14] - B2B revenue grew by 14.4% year over year to $25 million, with adjusted gross profit increasing by 30.8% to $7.3 million [15][16] - The Enterprise segment saw a revenue increase of 20.6% to $52.7 million, with adjusted gross profit rising by 22.6% to $49.7 million [17][18] Market Data and Key Metrics Changes - The company ended Q2 with over 1.6 million total customer accounts, up from 1.3 million in the previous quarter [4] - Annual transaction volume increased by nearly $5 billion to $140 billion [4] - Average account balances under administration improved to $1.4 billion from $1.3 billion [4] Company Strategy and Development Direction - The company is focused on its Connected Commerce platform, which integrates payments and banking capabilities to enhance operational success for customers [5][10] - There is a strategic emphasis on expanding recurring revenue, which now represents 62% of total adjusted gross profit, indicating a shift towards more stable revenue streams [24][25] - The company is also pursuing tuck-in acquisitions to enhance its service offerings and capitalize on favorable market conditions [21][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 10% to 12.5% revenue growth for 2025, citing strong growth trends and a favorable business mix [5][22] - The company anticipates moderating headwinds in the SMB segment and expects to see an acceleration of growth in the second half of the year [22][32] - Management noted that the economic environment has not significantly impacted performance, with resilience observed in various customer segments [38][56] Other Important Information - The company successfully refinanced its debt, lowering interest rates and extending maturities, which is expected to save approximately $7 million in annual interest expenses [20][21] - A material weakness related to automated controls has been substantially remediated, with testing currently underway [23] Q&A Session Summary Question: What was the core growth net of the VAMP and the residual headwind versus the 1Q growth? - Core growth was 9.5% for the quarter, slightly down from 10% in Q1, driven by strong performance in larger ISOs despite some attrition in lower-end accounts [30][31] Question: Can you talk about the underlying assumptions at the low end versus the high end of the revised 2025 revenue guide? - The acceleration in the second half is expected due to moderating headwinds in SMB and the onboarding of large customers, with potential upside from deposit balances [32][34] Question: Have you seen any shift in volume trends given the softening jobs and business sentiment? - The portfolio has performed well, with resilience noted in various sectors, although same store sales have been a headwind [38] Question: How have you been thinking about capital allocation in the near and longer term? - The allocation strategy remains focused on deleveraging while being opportunistic in acquisitions, particularly in a favorable market [39] Question: Can you describe the go-to-market strategy of larger ISOs? - The company leads with a technology suite that allows for flexibility in solutions, emphasizing high-quality customer service as a key component [60][63]

Q2 2025 Financial Performance - Priority Technology Holdings' total revenue increased by 9% to $239.8 million in Q2 2025[14] - Adjusted Gross Profit increased by 13% to $92.4 million, with Adjusted Gross Profit margin increasing by 135 basis points to 38.5%[16, 17] - Adjusted EBITDA increased by 9% to $56.0 million[20] - Year-to-date revenue increased by 9% to $464.4 million[24] - Year-to-date Adjusted Gross Profit increased by 14% to $179.7 million, with Adjusted Gross Profit margin increasing by 150 basis points to 38.7%[26, 27] - Year-to-date Adjusted EBITDA increased by 10% to $107.3 million[30] Segment Performance in Q2 2025 - SMB revenue was $163.2 million, a 5% year-over-year increase, with Adjusted Gross Profit of $35.4 million and Adjusted EBITDA of $27.7 million[47] - B2B revenue was $25.0 million, a 14% year-over-year increase, with Adjusted Gross Profit of $7.3 million and Adjusted EBITDA of $3.8 million[53] - Enterprise revenue was $52.7 million, a 21% year-over-year increase, with Adjusted Gross Profit of $49.7 million and Adjusted EBITDA of $45.6 million[59] - B2B and Enterprise segments represented approximately 62% of Adjusted Gross Profit[44] Capital Structure and Guidance - As of June 30, 2025, the company's total debt balance was $935.5 million, with a net debt of $884.9 million and a net leverage ratio of 4.1x[68, 69] - The company revised its 2025 financial guidance, projecting total revenue between $970 million and $990 million, Adjusted Gross Profit between $365 million and $380 million, and Adjusted EBITDA between $222.5 million and $227.5 million[9, 74, 76]

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]

Q1 2025 Financial Performance - Priority Technology Holdings' Q1 2025 total revenue increased by 9% to $2246 million[8, 13, 14] - Adjusted Gross Profit increased by 14% to $873 million[8, 15, 16] - Adjusted EBITDA increased by 11% to $513 million[8, 19, 20] - Adjusted Gross Profit margin increased by 170 basis points to 389%[17] Segment Performance - SMB revenue increased by 5% year-over-year to $1517 million with Adjusted Gross Profit of $331 million[38] - B2B revenue increased by 12% year-over-year to $239 million with Adjusted Gross Profit of $73 million[43] - Enterprise revenue increased by 22% year-over-year to $501 million with Adjusted Gross Profit of $469 million[49] Financial Position - The company repaid $10 million of outstanding Term Loan during Q1 2025[59, 61] - The company has ample liquidity of $1176 million, comprised of $476 million of unrestricted cash and unfunded $700 million Revolver at the end of Q1 2025[61]

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]