Repay (US:RPAY)2022-05-11 01:32Financial Data and Key Metrics Changes - In Q1 2022, the company reported card payment volume growth of 39%, total revenue growth of 42%, and gross profit growth of 46% [4][15] - Card payment volume reached $6.4 billion, total revenue was $67.6 million, and gross profit was $51 million [15][19] - Adjusted EBITDA for Q1 was $29.3 million, an increase of 43% year-over-year, with adjusted EBITDA as a percentage of total revenue at 43% [19] Business Line Data and Key Metrics Changes - The business payments vertical is targeting a total addressable market (TAM) of $3.4 trillion and performed well, with significant growth in B2B software integrations [5][6] - The consumer payments segment saw strong performance, particularly in personal loans, with volumes boosted by tax refund season [8][9] - The mortgage service and payment business experienced growth from existing customers, with instant funding volume up 70% compared to Q1 2021 [10] Market Data and Key Metrics Changes - The personal loan market saw a 31% increase in originations year-over-year, with total nonmortgage consumer debt reaching $4.33 trillion [9] - The auto loan business is focused on used car payments, which are growing rapidly due to high demand and prices [9] - The company has expanded its supplier network to over 127,000, contributing to its B2B growth strategy [17][58] Company Strategy and Development Direction - The company is focused on increasing card penetration across all verticals and optimizing processing infrastructure to reduce costs [12][13] - Strategic M&A remains a key focus, with the company looking for attractive opportunities to enhance long-term growth [14][30] - The company aims to capitalize on the secular trends towards frictionless digital payments, which are expected to drive business growth for years to come [12][63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of personal loans and the overall recovery in healthcare, which supports the positive outlook for the remainder of the year [21][46] - The company anticipates organic growth to gradually increase throughout the year, with stronger growth expected in the second half [22][46] - Management reiterated guidance for 2022, projecting volumes between $27 billion and $28 billion and total revenue between $296 million and $306 million [21] Other Important Information - The company had $65 million in cash and access to $165 million in undrawn revolver capacity, totaling $230 million in liquidity as of March 31 [20] - The company expects to maintain a combined pro forma net leverage of approximately 3.5x, which is projected to decrease to below 3.3x by the end of 2022 [19] Q&A Session Summary Question: Can you provide insights on macro assumptions in your guidance? - Management noted that the recovery in personal loans and healthcare, along with strong demand in the used car market, are key drivers for growth [23][25] Question: Are you seeing lenders seeking repayment options? - Management indicated that consumer health is strong, and there is great demand for personal loans, which supports their positive outlook [31][32] Question: Can you elaborate on the B2B business growth? - Management clarified that growth in B2B is primarily from moving businesses to electronic payments rather than competitive takeaways [34][35] Question: What is the outlook for the second quarter? - Management expects slight sequential decline from Q1 due to the end of tax refund season but anticipates organic growth to be higher in Q2 [36][38] Question: Is the go-to-market strategy fully consolidated under TotalPay? - Management confirmed that Repay is the single brand, with TotalPay describing the comprehensive solution for both sending and receiving funds [40][41] Question: What is the outlook for the full year? - Management reiterated confidence in the full year outlook, citing strong underlying business momentum and recovery in healthcare [46][47] Question: How is the instant funding solution performing? - Management reported a 70% growth in instant funding, indicating it drives competitive differentiation and influences repayment mechanisms [49][50] Question: What are the expectations for gross profit margins? - Management expects gross profit margins to potentially be higher for the remainder of the year due to the conversion of BillingTree back to the RCS platform [52][53]