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Business Wire
5 hours ago
- Business
- Business Wire
REPAY Enhances MeridianLink Integration, Modernizing New Member Onboarding and Digital Payment Options
ATLANTA--(BUSINESS WIRE)-- Repay Holdings Corporation (NASDAQ: RPAY) ('REPAY'), a leading provider of vertically-integrated payment solutions, today announced new enhancements to the company's integration with MeridianLink, Inc. (NYSE: MLNK), a leading provider of modern software platforms for financial institutions and consumer reporting agencies. REPAY's innovative, trusted payment technology now enables credit unions and banks in MeridianLink's network to offer new members streamlined account funding via debit card, ACH and digital wallets, including Apple Pay and Google Pay. Expanding account funding options with REPAY's integrated payment technology enables financial institutions that use MeridianLink ® Opening to accept funds into new member accounts faster and improve the consumer experience both in-branch and online. Providing a variety of convenient account funding methods, leveraging the same verifiable payment methods consumers prefer to use daily, simplifies the onboarding process for both credit unions and their members. "We strive to continually enhance our platforms in strategic ways that strengthen our customers' business capabilities while simultaneously addressing evolving member needs,' said Megan Pulliam, SVP, MeridianLink ® Marketplace. 'Flexible account funding options, enabled by our partnership with REPAY, are an essential advantage for our financial institutions and will enable them to uphold the high standards of customer service and convenience members have come to expect." These enhancements supplement REPAY's existing integration with MeridianLink ® Collect, which optimizes loan collection operations by simplifying accounting and consumer payment processes. REPAY's secure payment solutions enable MeridianLink's broad network of financial institution customers to streamline processing efficiencies by accepting ACH and card payments via web, mobile, Interactive Voice Response (IVR) or text. Offering a wide variety of payment modalities provides borrowers with options to make loan payments in the way that is most convenient for them and improves the overall experience. 'As digital payment options increase in consumer popularity, offering convenient account funding and payment methods is critical to attracting and retaining new members,' said Jake Moore, EVP, Consumer Payments, REPAY. "Our expanded partnership with MeridianLink empowers financial institutions and consumers to build trust and forge stronger relationships as a result of REPAY's advanced payment technology solutions." Regardless of payment method, REPAY's integrated platform tracks, logs and posts payment data in real time, ensuring payment updates and information are accurately reflected in credit unions' records immediately after a payment is submitted, mitigating the risk of invalid penalties and unnecessary collection efforts that are triggered for past-due payments. This not only smooths accounting processes for credit unions and banks but also supports better relationships with members due to improved confidence and communication. About REPAY REPAY provides integrated payment processing solutions to verticals that have specific transaction processing needs. REPAY's proprietary, integrated payment technology platform reduces the complexity of electronic payments for clients, while enhancing the overall experience for consumers and businesses. About MeridianLink MeridianLink ® (NYSE: MLNK) empowers financial institutions and consumer reporting agencies to drive efficient growth. MeridianLink's cloud-based digital lending, account opening, background screening, and data verification solutions leverage shared intelligence from a unified data platform, MeridianLink ® One, to enable customers of all sizes to identify growth opportunities, effectively scale up, and support compliance efforts, all while powering an enhanced experience for staff and consumers alike. For more than 25 years, MeridianLink has prioritized the democratization of lending for consumers, businesses, and communities. Learn more at
Yahoo
13-05-2025
- Business
- Yahoo
Q1 2025 Repay Holdings Corp Earnings Call
Stewart Grisante; Head of Investor Relations; Repay Holdings Corp John Morris; Chief Executive Officer, Co-Founder, Director; Repay Holdings Corp Timothy Murphy; Chief Financial Officer; Repay Holdings Corp John Coffey; Analyst; Barclays Sanjay Sakhrani; Analyst; Keefe, Bruyette & Woods North America Joseph Vafi; Analyst; Canaccord Genuity Shefali Tamaskar; Analyst; Morgan Stanley Alex Newman; Analyst; Stephens Peter Heckmann; Analyst; D.A. Davidson & Company Andrew Schmidt; Analyst; Citi Timothy Chiodo; Analyst; UBS Equities Operator Good afternoon. I would like to welcome everyone to REPAY'S first-quarter 2025 earnings conference call. This call is being recorded today, May 12, 2025. I'd like to turn the session over to Stewart Grisante, Head of Investor Relations at REPAY. Stewart, you may begin. Stewart Grisante Thank you. Good afternoon and welcome to REPAY's first-quarter 2025 earnings conference call. With us today are John Morris, Co-Founder and Chief Executive Officer; Tim Murphy, Chief Financial Officer; Thomas Sullivan, Chief Accounting Officer and Interim CFO; and Damian Warner, Vice President of Corporate Development and Strategic Partnership. During this call, we will be making forward-looking statements about our beliefs and estimates regarding future events and results. Those forward-looking statements are subject to risks and uncertainties, including those set forth in the SEC filings related to today's results in our most recent Form 10-K. Actual results may differ materially from any forward-looking statements that we make today. Forward-looking statements speak only as of today, and we do not assume any obligation or intent to update them except as required by law. In an effort to provide additional information to investors, today's discussion will also reference certain non-GAAP financial measures. Reconciliations and other explanations of those non-GAAP financial measures can be found in today's press release in an earnings supplement, each of which are available on the company's IR site. With that, I will now turn the call over to John. John Morris Thanks, Stewart, and good afternoon, everyone. Thank you for joining us today. On today's call, we'll address several topics including an overview of REPAY's core performance and highlights for Q1 2025, the conclusion of our strategic review process, an update to our capital allocation strategy, an update on our 2025 financial outlook, and a farewell to Tim Murphy, REPAY's CFO. First, let's turn to Q1. Throughout the quarter ripe remained focused on executing on our core growth, which continues to reinforce the ongoing secular tailwinds and resiliency of our business models. Our reported growth was impacted from the previously communicated client losses during 2024. REPAY showed steady gross profit growth when excluding these clients and maintained strong adjusted EBITDA margins of 43% during Q1. Reported profit and adjusted EBITDA declined approximately 5% and 7% year over year respectively. Reported free cash flow conversion was also impacted from the client losses and one-time networking capital impacts. When removing these impacts, Q1 2025 free cash flow conversion would have been similar to Q1 2024 free cash flow conversion rate of 38%. While we do not believe these reported Q1 growth rates represent the underlying business trends, the core growth strategy remains intact and underscores our ongoing commitment to executing towards profitable growth, optimizing payment flows, and enhancing operational efficiency, all while driving long-term value to our shareholders. We are starting to see positive impacts from our investments in our enterprise sales and customer support teams. We continue to be encouraged by the healthy sales pipeline with enterprise clients across segments while also working on implementation timelines. We do expect the positive trends to be reflected in our reported growth in the second half of 2025. Beginning with this Consumer Payments segment, our core growth algorithm benefited from contributions from existing clients, and new client wins over recent quarters. During Q1, we continue to see the signs of core Consumer bookings growth year over year, giving us confidence in executing on our go to market client implementations and product initiatives, as well as recent client wins accelerating growth later in the year. Economic unpredictability has increased since March due to several still changing variables. While our value proposition and business model of providing a one-stop-technology platform and visual experience across our diversified client base and verticals remains unchanged, these factors could lead to potential near-term impacts from consumer spending amid this ongoing uncertainty. Year to date, we have seen resiliency with non-discretionary consumer spending ahead of possible tariff-driven inflation. However, during these uncertain times, our clients increasingly seek robust payment capabilities. REPAY serves as their comprehensive platform to streamline payment processes while providing value-added services that strengthen their market position. Within Consumer Payments, we signed two new software partnerships during the quarter, further enhancing our existing relationships and bringing our total software partners to 182. Our go-to-market and consumer support teams utilize these integrations to develop a robust sales pipeline and elevate the overall client experience. We onboarded several new clients to our platform in Q1, including 14 new credit unions, increasing our total credit union client base to 343 out of approximately 5,000 across the US. Our payment technology, which is seamlessly integrated into multiple core financial institutions and credit union software systems, continues to generate a strong sales pipeline targeting thousands of regional financial institutions nationwide. We're also working on ways to enhance existing integrations and partnerships with credit union and financial institutions, leading to optimize loan operations by simplifying accounting and consumer payment processes, securing new payment flows, and fostering deeper client relationships. In addition, REPAY clearing and settlement sales and implementation pipeline is expanding from the tech investments and product enhancements we made on our backend processing platform. During Q1, we signed a leading POS software platform that serves thousands of independent retailers across the US and Canada. We're excited to provide this large enterprise client with our best-in-class clearing-and-settlement platform, allowing their retailers to seamlessly manage their operations in one complete retail software ecosystem. In value-added services, our instant funding product achieved healthy growth in Q1, with transaction volumes rising approximately 19% year over year. Clients in the personal lending vertical rely on this product to distinguish themselves by offering rapid and convenient, secure funding options for their customers. Over the medium term, we view instant funding as a potential revenue enhancer as we assess opportunities to expand its capabilities in additional verticals which we believe could further bolster our growth profile. Our Consumer Payments momentum saw similar trends in Q1 as it did in Q4, including the 6 points of full-quarter impact of the previously mentioned clients rolling off our platform. Nevertheless, we remain focused on building our enterprise sales teams, enhancing client experiences, a priority that strengthens retention and creates opportunities for additional value-added services with existing clients. This discipline approach continues to fortify the core consumer payments growth algorithm at REPAY as we progress through 2025. Now turning to Business Payments segment. A reported gross profit increased approximately 7% year over year. When it exploded the impact of the political media during Q1 2024, gross profit would have increased by approximately 12% year over year. This also includes approximately 12 points of client loss headwinds during the quarter. The solid growth acceleration in Q1 was driven by strength in our core accounts payable business. The ramp of new enterprise clients signed in recent quarters and payment monetization initiatives like expanding enhanced ACH and float income. Our sales teams are capitalizing on our 101-plus software partnerships and integrations by building enterprise relationships and thus expanding our client pipeline. By aligning these partnerships with our go-to-market strategy, we're improving normalized bookings growth while increasing our supplier network 40% year over year to approximately 390,000 suppliers. Looking ahead for Business Payments, we maintain strong confidence in our overall sales pipeline. Our go-to-market approach continues to expand our software partnerships and enterprise client base, while additional monetization efforts within total pay position us for accelerated growth in the second half of 2025 and into 2026. Now moving on to the next set of topics related to the conclusion of the strategic review process. On our previous earnings call, the company and the Board announced the commencement of a comprehensive strategic review to assess the full range of strategic alternatives aimed at capturing shareholder value. We have been committed to our core values of profitable growth and improving cash flow generation while also being disciplined on M&A and capital allocation. The company has a strong balance sheet, solid cash flow generation, and ample liquidity, providing financial flexibility to pursue a range of strategic and capital allocation priorities. However, since making this announcement in March, the market and macro environment have drastically changed. In light of the prevailing macro uncertainty, the Board has decided to conclude the strategic review process at this time. We believe that additional investment in our organic growth will yield the best possible result for REPAY and its shareholders, generating returns above what would be possible in other alternative outcomes. As part of the conclusion of the review, we wanted to share some of the operational priorities that we have solidified resulting from an in-depth market and go-to-market assessment we conducted with a highly reputable strategic consulting firm. One, we will be enhancing our direct sales model, which practically means allocating more resources to our sales teams and targeting a list of specific logos in our core growth verticals. Two, we will be capitalizing on more monetization opportunities, including targeting nine card payment volumes. And three, we'll be building more indirect partnership channels in both Consumer and Business Payments segments. On the past few quarters have been challenging, we believe with additional investments towards organic growth combined with priority initiatives, the second half of 2025 will begin to display growth acceleration, leading to strong momentum in our Q4 2025 gross profit exit rate. Next, I'd like to address our 2025 financial outlook. As I just discussed, we have confidence in our ability to invest organically in the business and produce results that generate value to our shareholders. We believe that the initiatives that resulted from our strategic review, combined with our ongoing growth efforts, will deliver sequential quarterly normalized gross profit growth resulting in a fourth quarter growth rate of high-single-digit to low-double-digit growth, as well as free cash flow conversion exceeding 50% in the second quarter and accelerating above 60% by year end when excluding one-time networking capital impacts. We have conviction in our path back to profitable growth and our team's capability to do so. As we progress through 2025, REPAY is strongly positioned to lever the secular shift to digital payments, utilizing our scalable platform and 283-plus software partnerships to drive profitable growth and free cash flow generation. Our commitment remains focused on creating value for our shareholders both through operational excellence and future capital allocation initiatives. As we move forward, our capital allocation parties include continued and incremental organic growth investments. To continue managing cap backs at a percent of revenue while maintaining prudent investments towards technology and products. We purchase shares when we believe our share price is disconnected from our long-term intrinsic value. Today we announced that our Board of Directors increased the authorization of share repurchase program to $75 million. Maintain a strong balance sheet with ample liquidity and cash generation through 2025 to address the 2026 convertible notes. And additionally, we continue to be open to a creative strategic tuck in M&A to further accelerate rephase transition and growth potential. And before turning the call over to Tim, I want to be the first to express REPAY's heartfelt gratitude to Tim Murphy, our Chief Financial Officer, as he will be stepping down from his role in a few days. I was incredibly grateful to have Tim by my side for the past 11 years as he was REPAY's first CFO and helped guide REPAY through many important milestones and successes during his tenure. From all of us at REPAY, we wish Tim all the best in this next chapter. Making the announcement, Tim has helped facilitate a smooth transition to Thomas Sullivan, who has been appointed as an interim Chief Financial Officer as we undergo the process of finding a permanent replacement to lead our financial organization. With that, I'll turn it over to Tim to review our Q1 financials. Tim. Timothy Murphy Thank you, John, for the kind words. These past 11 years have been truly special for me. I'm thankful for being part of REPAY's journey as the company's first CFO, helping transform the business over the course of 11 acquisitions and also elevating the organization to being a public company. I look forward to watching REPAY continue to grow and expand its vital role in the payment ecosystem. Now let's go over our financial results for Q1 2025. In the first quarter of 2025, revenue was $77.3 million, representing a decrease of 4% year over year. Reported gross profit declined by 5% year over year. Consumer Payments segment gross profit declined by 5% during Q1, while the Business Payments segment reported gross profit increased 77% year over year. When excluding the political media contributions in Q1 2024, Business Payments gross profit growth accelerated to approximately 12% during Q1 2025, demonstrating the ramp in our partnerships and sales pipeline. As John mentioned, REPAY's reported gross profit growth was impacted by select client losses in the strategic technology migration of targeted business payment volumes to our total pay solution. Excluding these impacts, reported gross profit growth would have been low-single digits in Q1. Our core growth remains resilient, and we are starting to benefit from ongoing go-to-market and customer support investments and from additional modernization opportunities across our segments. In addition, our Q1 results benefited from the annual tax refund seasonality. Q1 adjusted EBITDA it was $33.2 million, representing approximately 43% adjusted EBITDA margins. This demonstrates our disciplined approach to managing operating expenses while still being able to invest towards our sales, implementation, and client service teams across the company. First quarter adjusted net income is $20.3 million or $0.22 per share. Reported Q1 free cash flow was negative $8 million. Reported Q1 free cash flow and free cash flow conversion were negatively impacted by approximately $16 million due to reversal in timing, networking capital by approximately $3 million to the previously mentioned client losses. In excluding these impacts, Q1 free cash flow conversion would have been similar to the free cash flow conversion metric of approximately 38% in Q1 2024. As a reminder, our 2025 free cash flow conversion is expected to follow a similar quarterly cadence of 2024. It is expected to accelerate to above 60% by the end of 2025. As of March 31, we had approximately $165 million of cash on the balance sheet with access to $250 million of undrawn revolver capacity for a total liquidity amount of $415 million. During Q1, we made an approximate $16 million payment related to the tax receivable agreement or TRA. We're expecting to make annual TRA payments on a go-forward basis and REPAY a sufficient taxable income. Exiting the quarter, REPAY now leverage is approximately 2.5 times. Total outstanding debt of $507.5 million is comprised of a $220 million convertible note due in February 2026 with a 0% coupon and a $287.5 million convertible note due in 2029 with a 2.875% coupon. Net leverage will naturally benefit as REPAY continues to execute towards profitable growth and cash flow generation during 2025, while also applying a balanced approach to capital allocation. I'm not trying to call back over to the operator to take your questions. Operator. Operator Thank you. We will now be conducting a question-and-answer session. (Operator Instructions) Ramsey El-Assal, Barclays. John Coffey Hi, this is John Coffey on for Ramsey. Thanks for taking my questions. I was wondering just to begin with, can you provide some additional color on what you're seeing in the consumer spending environment? I know you talked about this a little bit in some of your prepared remarks, in particular, I was wondering what's the -- how would you view the top of the funnel from a credit perspective? John Morris Hi John, this is John. Good afternoon. Yeah, as I mentioned earlier, from an overall market perspective, at least is pertaining to our clients, year to date, we've seen resiliency in the non-discretionary consumer spending. So from a market perspective, our perspective, we're not seeing any major impact from overall payment processing as it relates to kind of the macro associated with the consumer. John Coffey Okay. Great, thank you. I just have one follow up. Given your increased buyback authorization of $25 million, do you plan to continue leaning into this rather than M&A? John Morris Yes, we, as I also mentioned earlier as well, when we believe that our share price is disconnected from our overall long term intrinsic value, we will opportunistically repurchase shares. So when we see that and we believe that it's happening, we have our convictions around that. Timothy Murphy And I'll add to that the capital allocation priorities we mentioned would be still focused on organic growth. And then we would look to execute on the buybacks, the reasons John just mentioned and then provide ourselves with enough liquidity to address the $220 million convertibles coming due in 2026, and then I would say that tuck and M&A would be after those other priorities. John Coffey Perfect, thank you very much. Operator Sanjay Sakhrani, KBW. Sanjay Sakhrani Thank you. Congratulations, Tim, and good luck. John, you mentioned the evolving macro view as a reason for concluding the strategic review process. Maybe you could just share with us, how far you guys went down the process to actually see if you could extract more value. John Morris Yeah, Sanjay, so we looked at the overall as this is a collective Board decision and we in the strategic review. As you are aware, I've seen markets have changed and the microenvironment has changed since we announced in March. But ultimately, as we looked at everything, we looked at -- we believe that the additional investment in organic growth, which will yield the best result for REPAY, at this time for the shareholders, we think that generates above what we think it would be possible with these other alternative outcomes. And as you heard me mention as well, we did conclude our in-depth dive into our additional organic investments with an outside reputable firm and we're actually, we're in the process of adding those additional investments which we think is a multi-year investment and also a multi-year opportunity to continue to accelerate growth. Timothy Murphy And I would add to that the investments John's mentioning are not incremental to any of the forecasts we provided. They're included in the forecasts we provided on free cash flow. So while we're executing on those, there's no incremental spend relative to what we've laid out for the outlook in terms of the outlook. Sanjay Sakhrani Okay, got it. And then appreciate sort of the forward view for 2025 on gross profit. Can you help us think about like EBITDA growth trajectory over the course of 2025. And then just maybe as we think about 2024, maybe you could just give us, Tim, like what the normalized gross profit dollars were, excluding some of the political and media stuff. Thanks. Timothy Murphy So I would say again there's no incremental spend, so I would think the adjusted EBITDA growth would be similar, follow a similar path as the gross profit growth we described. Just because we're expecting similar margins and there's nothing incremental to what you've already described. And then just in terms of the 2024 political contribution, I would say that to think about that is about 4 or 5 points of growth impact to the full-year '25, which is normalized out in the growth rates we've mentioned. Sanjay Sakhrani Okay. Wonderful, thank you. Operator Joseph Vafi, Canaccord Genuity. Joseph Vafi Hey guys, good afternoon and congratulations and best of luck on from me as well, Tim. Just wanted to kind of drill down on the comments on ending the strategic review a little bit more and some of the additional investments for growth. Just kind of wondering, was there kind of some aha moments there or was you know the consultants providing, a certain kind of insight that perhaps you hadn't made those similar investments yourselves previously just want to kind of drill down on that because I mean it sounds like you've got a lot of confidence in accelerating growth with some of these additional investments and just wondering why again why you might not have done it before now. Thanks a lot. John Morris Yeah, Joe, great question. Obviously this is something that I've been doing this for a while and so I wanted a really outside third-party view to help me look at certain markets and potentials were there. What it did confirm to us is the absolute market potential was there with for additional investments, and we have the opportunity to make those and those will deliver a really great shareholder value. And so that's just this opportunity just sitting right in front of us to just commit more dollars to investing there. Joseph Vafi Got it. And is there any other insight you can provide as to kind of what those markets are, or that's kind of I guess a competitive aspect and maybe we should wait for more from you on that once it's in place. Is that what you're thinking about? John Morris Yeah, Joe. Say in the immediate term that's specifically related to our existing verticals and markets, specifically in the consumer side and also there's opportunity in the B2B side. But then, you look a few years out, there's other opportunities for us, but specifically for the immediate term here near term it's on existing verticals. Timothy Murphy And that's that one of the one of the items we were looking to confirm was just we've talked about going more enterprise sales and consumer just really confirming the largest logos across each of the sub-verticals and finding ways to address those logos and being more efficient with our go-to-market efforts and just generally having more success in terms of winning those logos and then also implementing them faster. There's just a different implementation cycle with enterprise accounts. We've been doing that for a while now, but we wanted to hone that skill and that focus to get not only win them but get them live faster. Joseph Vafi Sure. Great. Thanks for those comments. Best of luck, Tim. Timothy Murphy Thank you. Operator James Faucette, Morgan Stanley. Shefali Tamaskar Hi, this is Shefali Tamaskar on for James. Thank you for taking my question. Thanks for all the color on the quarter. I just wanted to see if you could speak to how the recent macro environment has potentially impacted some of your exposures, which you've talked about on past calls around auto affordability, personal lending trends. Want to hear about both what you were seeing in 1Q and also trends through April and May if you could. Timothy Murphy Yeah, so like we said, our various end markets were resilient. Spending was resilient. These are largely non-discretionary payments, and so they held up nicely through Q1, and I'd say the trends are similar to Q2, which again gave us confidence to discuss the free cash flow conversion acceleration in Q2 specifically and so trends have held up nicely. Nothing I don't think materially different from what we talked about on prior calls, but it is certainly, we're paying close attention to it, particularly in the auto space as we have been in trying to get out there and speak to our clients and understand what they're seeing to try to gain visibility, but you know nothing we've seen through Q1, nothing we've seen in the early part of Q2 yet in terms of different dynamics. Shefali Tamaskar Okay, thank you. Operator Alex Newman, Stephens. Alex Newman Hi, thanks for taking my question here. Just going on top of that, could you discuss any underwriting trends that you're seeing within the consumer end market that you've observed recently and what kind of impact do you expect those trends to have on the overall volume and penetration rates? John Morris Yeah, I would obviously reiterate Tim's comments, we're not seeing specific trends that would change specifically from first quarter to second quarter what we're seeing. We are monitoring, as Tim mentioned. But overall, I mean, you can also you look at what we're saying for our outlook though we do see it obviously we see our growth accelerating that has a lot to do with new wins, implementations, lapping of some of those client losses. But as we round out the year and we push through the rest of this year, especially the second half of the year, we see very positive things. Alex Newman Great, thank you. Operator Peter Heckmann, DA Davidson. Peter Heckmann Hey, good afternoon. I joined the call a little bit late, and I'm just trying to fill in some holes, but the client losses, can you remind us, is that three primary client losses and with two in consumer and one in business, is that how we should be thinking about it. And if so, you said about a 600-basis-point drag on consumer, but what would be the drag on overall revenue growth? Timothy Murphy Yeah, so we mentioned the 600 basis points on Consumer and then 12 points in Business Payments and then what we said is if you excluded the client losses, our growth would have been low-single digits. Peter Heckmann Okay great and then in terms of the level of confidence looking at your guidance of sequential re-acceleration of normalized gross profit growth. So starting from a base of negative four in the first quarter, you're thinking you can get to high-single digit to low-double digit normalized gross profit growth in the fourth quarter. There's a lot of math there. Is there a way to kind of maybe narrow that range down a little bit and you know make sure that we're getting to the right spot and does that you know is it ratedly increase through the year or is the second quarter going to be relatively weaker and then we see a pick up in the third quarter a little bit more so we can kind of triangulate it on a little closer to where we should be from a quarterly standpoint. Timothy Murphy Yeah, so as I said, if you stripped out the losses, it would be low-single digits in Q1, so going from negative four to low-single digits, I would think that would be a good estimate for Q2, somewhere in that range, slightly faster in Q3, and then ending the year exiting a high-single digit to low-double digit. You could, I guess, use the midpoint of that range is probably a good way to think about it. So it's not going further down in Q2 and then picking up a lot more in Q3 and even more in Q4. It's getting to a similar number as the low-single digits for Q2 and a little bit higher than that in Q3 and the midpoint of low-single digit, high-single digit for Q4. Peter Heckmann Okay, and then the timing of those customer losses, do I remember correctly, it was 2 and 2.5 in the third quarter and what happened in the fourth quarter in terms of anniversary then. Timothy Murphy I meant to say, excuse me, on the previous comment, I meant to say midpoint of high-single digit to low-double digit for Q4. And then, yes, there was one loss in Q3 and two in Q4 of last year. Peter Heckmann Okay, thank you. Operator (Operator Instructions) Andrew Schmidt, Citi. Andrew Schmidt Hey guys, thanks for taking the question. Sorry I hopped on a little bit late here. Maybe, and I apologize if I missed any remarks on the strategic review, but if you could just, we've obviously seen some modernization of B2B assets this quarter. If you just talk about kind of your inclination to kind of continue to expand and scale the B2B versus monetizing it. Anything you share in terms of prerogative there would be helpful. Thanks so much. John Morris Hi, Andrew, yes. As you're aware, I have watched the B2B space for many years. I think this has many years of growth opportunity for us, just a lot of white space. Our ability to profitably make investments there and grow that and what I see in our pipeline and what I see coming in the future, we think, there's some really great days ahead of us there as we drive and scale that business. And as we continue to invest as we said in these additional partnership channels, we see a really winning formula around some things there. We think that will drive great shareholder value for us on the long term, at least as we look out in the immediate, medium term here on how we drive investments there. We really like that that part of our business. Timothy Murphy I would add to that that you know. Business payments performed nicely as we said in Q1, it was 12% growth normalized, so we feel good about that and there are a lot of investments we have been making, particularly on the partnership side, enterprise software platforms were embedding payables. That's something we have been doing for a while now. We've increased our speed of implementation. And then we're also winning some large individual clients and I've had a lot of success in the hospital space and you're starting to see that flow through the results here in Q1. So there is positive momentum there. John Morris If you add what we also said and Tim mentioned earlier that there are growth in that business segment despite the client loss in that space, the growth rates actually on a normalized space actually even better, so we think as we you know clear some of those things. Hopefully the world will see the quality of the investment. Andrew Schmidt That's helpful. And then, again, sorry if I missed this, but I know last quarter you mentioned transition of the total pay, solution some impacts there any impacts this quarter is that stabilized just curious where we are from that standpoint. Thanks so much. Timothy Murphy It's largely stabilized. I mean what happened previously resulted in a few client losses that will flow through, but there haven't been any -- there have been incremental impacts related to that, and so the impact be called out on the previously was related to the loss of the client versus the migration. And so like John said, the 12% normalized we tell was pretty strong and then you include the loss of that individual client and that led to very nice growth. Andrew Schmidt Got it. And then so I think I'm last up here. If I could just ask, about just the auto vertical, obviously a lot of puts and takes there in terms of consumer health origination, obviously, auto prices potentially. What are you seeing there in terms of just repayment volume health? What are you forecasting? Would love to get under the hood there. Thanks again, guys. John Morris And we, as we mentioned earlier, we still see it as non-discretionary spending, and there's still strength there, so we're not specifically seeing it on the client side, on our client side specifically. There is no overall macro uncertainty of what may be happening with tariffs, etc. But we don't see anything specifically right now. And couldn't tell you that there would be something specifically as we're looking out. Andrew Schmidt Got it. Thanks, John. Thanks for reiterating that and Tim, best of luck with the transition. Good work we do. Timothy Murphy I appreciate it. Operator Timothy Chiodo, UBS. Timothy Chiodo Great, thank you. And also just started off, Tim, thank you for everything over the years. Wish you the best, definitely. Timothy Murphy Yeah Timothy Chiodo All right, great. Well, I want to hit it with an industry question if that's okay. So this topic of both merchants and platforms, meaning ISVs, software companies, etc. Going to more of a, let's call it multi-processor type of environment. I just want to see if you're picking up in your, I don't know what you're seeing with your ISVs that you work with. Is that something that they're looking to do more of to the extent they were already doing that my understanding is many were already integrated with more than one payments provider. But maybe you could talk a little bit about the number of payments processors that ISVs are looking to work with and whether or not that's changed much at all over the last call it 3, 5, 10 years. John Morris Yeah, hi, Tim. So great question. If we look out at the market at the consolidation happening at the large processor level, I would tell you our opportunity there as you're aware we do REPAY clearing and settlement. We see and have seen opportunities coming to us that historically probably would maybe would not have, so we see maybe what you're thinking and what you're saying there are a multiprocessor potentially, but we also see with some of that disruption in the marketplace that should be a really good opportunity for us. We will be very selective, but yet we are partnered with some really strong strategic processors or ISOs in the marketplace as we continue to build our pipeline there as I mentioned earlier in the call as well. We just won a large ISV this past quarter and so we think there's a great opportunity for us as we are selective on how we want to build out with our partners there. We have about 30 of those today, and then we see more opportunities out there, especially if you look at the whole ISV-embedded partnership, lots of lots of niche opportunities for those specific partners that we would use -- that we would process for. Timothy Murphy In terms of ISVs and utilizing payment processors, I don't think there's really been much of a change in our particular verticals. They typically have two or maybe three payment providers, and we're often the preferred provider. So it's not necessarily exclusivity, but we're typically in the preferred position because we've had the relationship for the longest we have more domain expertise in that and market. So I don't think that's really changed much. These aren't shopping-cart environments or marketplace environments where there's 6 or 10 payment providers you can choose from. It's usually a small group. John Morris Yes, Tim, what I was referring to is really the overall processing, clearing and settlement world. My comments, Tim made a great point for our 283 partners out there. We're not seeing a huge op any kind of disruption associated with that on our side, actually we're seeing more enterprise software coming to us because of our ability to fully do the whole AR and the AP side of the world. So we think we're in a pretty good position when it comes to that. Our overall payment expertise as well as our embedded software expertise, is a great value added for those who are coming to possibly partner with us on some things there. And then I'll remind you as well, specifically in our core Consumer verticals, we do a total payment on modality solutions. So it's not just a card-based total solution. It's all the way from our instant funding of funding the transactions potentially to the debit side of the world, whether it be an ACH or a debit card or even some of the other features of functionalities on an omnichannel perspective. So a lot of technology fintech embedded capabilities there. Timothy Chiodo Excellent. John, Tim. And Tim, thank you again. Timothy Murphy Absolutely. Thank you. Operator Thank you. There are no further questions at this time. I'd like to pass the call over to John for any closing remarks. John Morris Thank you, everyone, and thank you for your time today. Tim, thank you again for a great 11 years. We discussed many topics today on our call, the key areas of accelerating organic growth and our focus on creating value for our shareholders through our capital allocation initiatives. We will continue to execute towards profitable growth and stronger cash flow generation along the way, and we look forward to demonstrating the growth acceleration in the second half of the year and beyond. Thank you again for your time. Operator This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
12-05-2025
- Business
- Business Wire
REPAY Reports First Quarter 2025 Financial Results
ATLANTA--(BUSINESS WIRE)--Repay Holdings Corporation (NASDAQ: RPAY) ('REPAY' or the 'Company'), a leading provider of vertically-integrated payment solutions, today reported financial results for its first quarter ended March 31, 2025. First Quarter 2025 Financial Highlights (1) Gross profit represents revenue less costs of services (exclusive of depreciation and amortization). (2) Adjusted EBITDA, Free Cash Flow and Free Cash Flow Conversion are non-GAAP financial measures. See 'Non-GAAP Financial Measures' and the reconciliation of Adjusted EBITDA, Free Cash Flow and Free Cash Flow Conversion to their most comparable GAAP measure provided below for additional information. Expand 'REPAY is focused on executing on core growth, which continues to reinforce the ongoing secular tailwinds and resiliency of our business model. Our Business Payments segment normalized gross profit growth 1 accelerated to 12% year-over-year, driven by the strength of our core accounts payable business, the onboarding of new enterprise customers, and the success of recent monetization efforts. Free cash flow was impacted by one-time working capital impacts as well as previously announced client losses. We believe the reported first quarter growth rates do not fully reflect our underlying business trends, and in fact, our 2025 outlook includes sequential quarterly normalized gross profit growth 1 resulting in a high single-digit to low double-digit fourth quarter growth rate, as well as free cash flow conversion accelerating throughout the year. Our core growth strategy remains robust, with a relentless focus on profitable growth, optimized payment flows, and operational efficiency to create lasting value for our shareholders,' said John Morris, Chief Executive Officer of REPAY. 'The Board has made the decision to conclude our strategic review process at this time. I am confident in REPAY's ability to deliver growth and value for our shareholders in the near term and believe that we will be well positioned for positive organic results as we move through 2025. Additionally, we separately announced that our Board of Directors approved an increase in our share repurchase authorization by $25 million. I also want to express our heartfelt gratitude to Tim Murphy, our Chief Financial Officer, for his 11 years of dedicated service and partnership. Tim will be leaving REPAY in the coming days, and we all wish him every success in his future endeavors.' First Quarter 2025 Business Highlights The Company's achievements in the quarter, including those highlighted below, reinforce management's belief in the ability of the Company to drive durable and long-term growth across REPAY's diversified business model. Reported and normalized gross profit 1 declines of 5% and 4% year-over-year due to impacts from previously announced client losses, which include certain losses due to consolidation Consumer Payments gross profit declined approximately 5% year-over-year, which was impacted by the previously announced client losses Business Payments normalized gross profit growth 1 of approximately 12% year-over-year Accelerated AP supplier network to over 390,000, an increase of approximately 40% year-over-year Added three new integrated software partners to bring the total to 283 software relationships as of the end of the first quarter Instant funding volumes increased by approximately 19% year-over-year Added 14 new credit unions bringing total credit union clients to 343 2025 Outlook For fiscal year 2025, the Company now expects: Sequential quarterly acceleration of normalized gross profit growth 1, including a fourth quarter year-over-year growth rate of high-single digits to low double-digits; Free cash flow conversion expected to exceed 50% in the second quarter, accelerating above 60% by the fourth quarter of 2025 REPAY does not provide quantitative reconciliation of forward-looking, non-GAAP financial measures, such as forecasted normalized gross profit growth and Free Cash Flow Conversion, to the most directly comparable GAAP financial measure, because it is difficult to reliably predict or estimate the relevant components without unreasonable effort due to future uncertainties that may potentially have a significant impact on such calculations, and providing them may imply a degree of precision that would be confusing or potentially misleading. 1 Normalized gross profit growth is a non-GAAP financial measure that accounts for cyclical political media spending contributions. See 'Non-GAAP Financial Measures' and the reconciliation to their most comparable GAAP measure provided below for additional information. Segments The Company reports its financial results based on two reportable segments. Consumer Payments – The Consumer Payments segment provides payment processing solutions (including debit and credit card processing, Automated Clearing House ('ACH') processing and other electronic payment acceptance solutions, as well as REPAY's loan disbursement product) that enable REPAY's clients to collect payments from and disburse funds to consumers and includes its clearing and settlement solutions ('RCS'). RCS is REPAY's proprietary clearing and settlement platform through which it markets customizable payment processing programs to other ISOs and payment facilitators. The strategic vertical markets served by the Consumer Payments segment primarily include personal loans, automotive loans, receivables management, credit unions, mortgage servicing, consumer healthcare and diversified retail. Business Payments – The Business Payments segment provides payment processing solutions (including accounts payable automation, debit and credit card processing, virtual credit card processing, ACH processing and other electronic payment acceptance solutions) that enable REPAY's clients to collect payments from or send payments to other businesses. The strategic vertical markets served within the Business Payments segment primarily include retail automotive, education, field services, governments and municipalities, healthcare, media, homeowner association management and hospitality. (1) Gross profit represents revenue less costs of services (exclusive of depreciation and amortization). (2) Gross profit margin represents total gross profit / total revenue. Expand Conference Call REPAY will host a conference call to discuss first quarter financial results today, May 12, 2025 at 5:00 pm ET. Hosting the call will be John Morris, CEO, and Tim Murphy, CFO. The call will be webcast live from REPAY's investor relations website at The conference call can also be accessed live over the phone by dialing (877) 407-3982, or for international callers (201) 493-6780. A replay will be available one hour after the call and can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers; the conference ID is 13752562. The replay will be available at Non-GAAP Financial Measures This report includes certain non-GAAP financial measures that management uses to evaluate the Company's operating business, measure performance, and make strategic decisions. Adjusted EBITDA is a non-GAAP financial measure that represents net income prior to interest expense, tax expense, depreciation and amortization, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as gain on extinguishment of debt, non-cash change in fair value of assets and liabilities, share-based compensation charges, transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges. Adjusted Net Income is a non-GAAP financial measure that represents net income prior to amortization of acquisition-related intangibles, as adjusted to add back certain charges deemed to not be part of normal operating expenses, such as non-cash change in fair value of assets and liabilities, share-based compensation expense, transaction expenses, restructuring and other strategic initiative costs, other non-recurring charges, non-cash interest expense and net of tax effect associated with these adjustments. Adjusted Net Income is adjusted to exclude amortization of all acquisition-related intangibles as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Management believes that the adjustment of acquisition-related intangible amortization supplements GAAP financial measures because it allows for greater comparability of operating performance. Although REPAY excludes amortization from acquisition-related intangibles from its non-GAAP expenses, management believes that it is important for investors to understand that such intangibles were recorded as part of purchase accounting and contribute to revenue generation. Adjusted Net Income per share is a non-GAAP financial measure that represents Adjusted Net Income divided by the weighted average number of shares of Class A common stock outstanding (on an as-converted basis assuming conversion of the outstanding units exchangeable for shares of Class A common stock) for the three months ended March 31, 2025 and 2024 (excluding shares subject to forfeiture). Free Cash Flow is a non-GAAP financial measure that represents net cash flow provided by operating activities less total capital expenditures. Free Cash Flow Conversion represents Free Cash Flow divided by Adjusted EBITDA. Normalized gross profit growth represents year-over-year gross profit growth that excludes incremental gross profit attributable to political media spending associated with the 2024 election cycle in our media payments business. REPAY believes that Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share, Free Cash Flow, Free Cash Flow Conversion and Normalized gross profit growth provide useful information to investors and others in understanding and evaluating its operating results in the same manner as management. However, these non-GAAP financial measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income, operating profit, net cash provided by operating activities, or any other operating performance measure calculated in accordance with GAAP. Using these non-GAAP financial measures to analyze REPAY's business has material limitations because the calculations are based on the subjective determination of management regarding the nature and classification of events and circumstances that investors may find significant. In addition, although other companies in REPAY's industry may report measures titled as the same or similar measures, such non-GAAP financial measures may be calculated differently from how REPAY calculates its non-GAAP financial measures, which reduces their overall usefulness as comparative measures. Because of these limitations, you should consider REPAY's non-GAAP financial measures alongside other financial performance measures, including net income, net cash provided by operating activities and REPAY's other financial results presented in accordance with GAAP. Forward-Looking Statements This communication contains 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, including 2025 outlook, REPAY's plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as 'guidance,' 'will likely result,' 'are expected to,' 'will continue,' 'should,' 'is anticipated,' 'estimated,' 'believe,' 'intend,' 'plan,' 'projection,' 'outlook' or words of similar meaning. These forward-looking statements include, but are not limited to, statements regarding the strategic review process, REPAY's market and growth opportunities, REPAY's business strategy and the plans and objectives of management for future operations and the allocation of capital. Such forward-looking statements are based upon the current beliefs and expectations of REPAY's management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond REPAY's control. In addition to factors disclosed in REPAY's reports filed with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2024 and those identified elsewhere in this communication, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: risks or uncertainties relating to the outcome or timing of REPAY's strategic review process, exposure to economic conditions and political risk affecting the consumer loan market, the receivables management industry and consumer and commercial spending, including bank failures or other adverse events affecting financial institutions, inflationary pressures, evolving U.S. trade policies, general economic slowdown or recession; changes in the payment processing market in which REPAY competes, including with respect to its competitive landscape, technology evolution or regulatory changes; changes in the vertical markets that REPAY targets, including the regulatory environment applicable to REPAY's clients; the ability to retain, develop and hire key personnel; risks relating to REPAY's relationships within the payment ecosystem; risk that REPAY may not be able to execute its growth strategies, including identifying and executing acquisitions; risks relating to data security; changes in accounting policies applicable to REPAY; and the risk that REPAY may not be able to maintain effective internal controls. Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance. All information set forth herein speaks only as of the date hereof in the case of information about REPAY or the date of such information in the case of information from persons other than REPAY, and REPAY disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication. Forecasts and estimates regarding REPAY's industry and end markets are based on sources it believes to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part. Pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results. About REPAY REPAY provides integrated payment processing solutions to verticals that have specific transaction processing needs. REPAY's proprietary, integrated payment technology platform reduces the complexity of electronic payments for clients, while enhancing the overall experience for consumers and businesses. Consolidated Balance Sheets (in $ thousands) December 31, 2024 Assets Cash and cash equivalents $ 165,466 $ 189,530 Current restricted cash 31,184 35,654 Accounts receivable 36,831 32,950 Prepaid expenses and other 16,646 17,114 Total current assets 250,127 275,248 Property, plant and equipment, net 1,778 2,383 Noncurrent restricted cash 12,541 11,525 Intangible assets, net 374,615 389,034 Goodwill 716,793 716,793 Operating lease right-of-use assets, net 10,713 11,142 Deferred tax assets 163,846 163,283 Other assets 4,979 2,500 Total noncurrent assets 1,285,265 1,296,660 Total assets $ 1,535,392 $ 1,571,908 Liabilities Accounts payable $ 24,136 $ 28,912 Accrued expenses 41,573 55,501 Current operating lease liabilities 1,266 1,230 Current tax receivable agreement ($0 and $2,413 held for related parties as of March 31, 2025 and December 31, 2024, respectively) — 16,337 Other current liabilities 457 267 Total current liabilities 67,432 102,247 Long-term debt 497,588 496,778 Noncurrent operating lease liabilities 10,043 10,507 Tax receivable agreement, net of current portion ($25,518 and $25,134 held for related parties as of March 31, 2025 and December 31, 2024, respectively) 190,441 187,308 Other liabilities 2,690 1,899 Total noncurrent liabilities 700,762 696,492 Total liabilities $ 768,194 $ 798,739 Commitments and contingencies Stockholders' equity Class A common stock, $0.0001 par value; 2,000,000,000 shares authorized; 94,565,875 issued and 89,073,142 outstanding as of March 31, 2025; 93,732,227 issued and 88,239,494 outstanding as of December 31, 2024 9 9 Class V common stock, $0.0001 par value; 1,000 shares authorized and 100 shares issued and outstanding as of March 31, 2025 and December 31, 2024 — — Treasury stock, 5,492,733 as of March 31, 2025 and December 31, 2024 (53,782 ) (53,782 ) Additional paid-in capital 1,151,265 1,148,871 Accumulated deficit (341,773 ) (333,826 ) Total Repay stockholders' equity $ 755,719 $ 761,272 Non-controlling interests 11,479 11,897 Total equity 767,198 773,169 Total liabilities and equity $ 1,535,392 $ 1,571,908 Expand Consolidated Statements of Cash Flows Three Months Ended March 31, (in $ thousands) 2025 2024 Cash flows from operating activities Net loss $ (8,168 ) $ (5,365 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 25,294 27,028 Stock based compensation 5,344 6,282 Amortization of debt issuance costs 810 712 Other loss 267 — Fair value change in tax receivable agreement liability 3,022 2,913 Deferred tax expense (452 ) 302 Change in accounts receivable (3,881 ) (3,967 ) Change in prepaid expenses and other 468 (520 ) Change in operating lease ROU assets 429 2,084 Change in other assets (2,479 ) — Change in accounts payable (4,776 ) 1,679 Change in accrued expenses and other (13,928 ) (4,982 ) Change in operating lease liabilities (428 ) (2,201 ) Change in other liabilities 981 836 Net cash provided by operating activities 2,503 24,801 Cash flows from investing activities Purchases of property and equipment (146 ) (87 ) Capitalized software development costs (10,391 ) (11,042 ) Net cash used in investing activities (10,537 ) (11,129 ) Cash flows from financing activities Payments for tax withholding related to shares vesting under Incentive Plan (3,147 ) (2,407 ) Payment of Tax Receivable Agreement (16,337 ) (580 ) Net cash used in financing activities (19,484 ) (2,987 ) Increase in cash, cash equivalents and restricted cash (27,518 ) 10,685 Cash, cash equivalents and restricted cash at beginning of period $ 236,709 $ 144,145 Cash, cash equivalents and restricted cash at end of period $ 209,191 $ 154,830 Cash paid during the period for: Interest $ 4,525 $ 200 Income taxes (net of refunds received) $ (25 ) $ 4 Expand Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA For the Three Months Ended March 31, 2025 and 2024 (Unaudited) Three Months ended March 31, (in $ thousands) 2025 2024 Revenue $ 77,325 $ 80,720 Operating expenses Costs of services (exclusive of depreciation and amortization shown separately below) $ 18,664 $ 19,175 Selling, general and administrative 36,987 37,021 Depreciation and amortization 25,294 27,028 Total operating expenses $ 80,945 $ 83,224 Loss from operations $ (3,620 ) $ (2,504 ) Other income (expense) Interest income 1,356 1,292 Interest expense (3,107 ) (912 ) Change in fair value of tax receivable liability (3,022 ) (2,913 ) Other income (loss), net (227 ) (26 ) Total other income (expense) (5,000 ) (2,559 ) Loss before income tax expense (8,620 ) (5,063 ) Income tax benefit (expense) 452 (302 ) Net loss $ (8,168 ) $ (5,365 ) Add: Interest income (1,356 ) (1,292 ) Interest expense 3,107 912 Depreciation and amortization (a) 25,294 27,028 Income tax benefit (452 ) 302 EBITDA $ 18,425 $ 21,585 Non-cash change in fair value of assets and liabilities (b) 3,022 2,913 Share-based compensation expense (c) 6,045 6,923 Transaction expenses (d) 782 677 Restructuring and other strategic initiative costs (e) 3,511 2,184 Other non-recurring charges (f) 1,390 1,231 Adjusted EBITDA $ 33,175 $ 35,513 Expand Quarterly Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA (Unaudited) Three Months ended (in $ thousands) June 30, 2024 September 30, 2024 December 31, 2024 Net income (loss) $ (4,237 ) $ 3,215 $ (3,958 ) Add: Interest income $ (1,463 ) $ (1,608 ) $ (1,629 ) Interest expense 909 2,918 3,134 Depreciation and amortization (a) 26,771 25,529 24,382 Income tax (benefit) expense (1,975 ) 1,524 (426 ) EBITDA $ 20,005 $ 31,578 $ 21,503 Gain on extinguishment of debt (k) — (13,136 ) — Non-cash change in fair value of assets and liabilities (b) 3,366 6,479 1,785 Share-based compensation expense (c) 5,874 6,477 5,921 Transaction expenses (d) 414 937 297 Restructuring and other strategic initiative costs (e) 2,584 2,202 5,524 Other non-recurring charges (f) 1,485 562 1,440 Adjusted EBITDA $ 33,728 $ 35,099 $ 36,470 Expand Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted Net Income For the Three Months Ended March 31, 2025 and 2024 (Unaudited) Three Months ended March 31, (in $ thousands) 2025 2024 Revenue $ 77,325 $ 80,720 Operating expenses Costs of services (exclusive of depreciation and amortization shown separately below) $ 18,664 $ 19,175 Selling, general and administrative 36,987 37,021 Depreciation and amortization 25,294 27,028 Total operating expenses $ 80,945 $ 83,224 Loss from operations $ (3,620 ) $ (2,504 ) Interest income 1,356 1,292 Interest expense (3,107 ) (912 ) Change in fair value of tax receivable liability (3,022 ) (2,913 ) Other income (loss), net (227 ) (26 ) Total other income (expense) (5,000 ) (2,559 ) Loss before income tax expense (8,620 ) (5,063 ) Income tax benefit (expense) 452 (302 ) Net loss $ (8,168 ) $ (5,365 ) Add: Amortization of acquisition-related intangibles (g) 19,329 19,736 Non-cash change in fair value of assets and liabilities (b) 3,022 2,913 Share-based compensation expense (c) 6,045 6,923 Transaction expenses (d) 782 677 Restructuring and other strategic initiative costs (e) 3,511 2,184 Other non-recurring charges (f) 1,390 1,231 Non-cash interest expense (h) 845 712 Pro forma taxes at effective rate (i) (6,442 ) (6,633 ) Adjusted Net Income $ 20,314 $ 22,378 Shares of Class A common stock outstanding (on an as-converted basis) (j) 94,358,268 97,062,303 Adjusted Net Income per share $ 0.22 $ 0.23 Expand Reconciliation of Operating Cash Flow to Free Cash Flow For the Three Months and Years Ended December 31, 2024 and 2023 (Unaudited) Three Months ended March 31, (in $ thousands) 2025 2024 Net cash provided by operating activities $ 2,503 $ 24,801 Capital expenditures Cash paid for property and equipment (146 ) (87 ) Capitalized software development costs (10,391 ) (11,042 ) Total capital expenditures (10,537 ) (11,129 ) Free cash flow $ (8,034 ) $ 13,672 Free cash flow conversion (24 %) 38 % Expand (a) See footnote (g) for details on amortization and depreciation expenses. (b) Reflects the changes in management's estimates of the fair value of the liability relating to the Tax Receivable Agreement. (c) Represents compensation expense associated with equity compensation plans. (d) Primarily consists of professional service fees incurred in connection with prior transactions. (e) Reflects costs associated with reorganization of operations, consulting fees related to processing services and other operational improvements, including restructuring and integration activities related to acquired businesses, that were not in the ordinary course. (f) For the three months ended March 31, 2025, the three months ended December 31, 2024, the three months ended September 30, 2024, the three months ended June 30, 2024 and the three months ended March 31, 2024, , reflects franchise taxes and other non-income based taxes, non-recurring legal and other litigation expenses and payments made to third-parties in connection with our IT security and personnel. (g) Reflects amortization of client relationships, non-compete agreement, software, and channel relationship intangibles acquired through the business combination with Thunder Bridge, and client relationships, non-compete agreement, and software intangibles acquired through REPAY's acquisitions of TriSource Solutions, APS Payments, Ventanex, cPayPlus, CPS Payments, BillingTree, Kontrol Payables and Payix. This adjustment excludes the amortization of other intangible assets which were acquired in the regular course of business, such as capitalized internally developed software and purchased software. See additional information below for an analysis of amortization expenses: Expand Three Months ended March 31, (in $ thousands) 2025 2024 Acquisition-related intangibles $ 19,329 $ 19,736 Software 5,482 6,713 Amortization $ 24,811 $ 26,449 Depreciation 483 579 Total Depreciation and amortization (1) $ 25,294 $ 27,028 Expand Three Months ended (in $ thousands) June 30, 2024 September 20, 2024 December 31, 2024 Acquisition-related intangibles $ 19,702 $ 19,111 $ 18,595 Software 6,856 6,008 5,249 Amortization $ 26,558 $ 25,119 $ 23,844 Depreciation 213 410 538 Total Depreciation and amortization (1) $ 26,771 $ 25,529 $ 24,382 Expand (1) Adjusted Net Income is adjusted to exclude amortization of all acquisition-related intangibles as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions (see corresponding adjustments in the reconciliation of net income to Adjusted Net Income presented above). Management believes that the adjustment of acquisition-related intangible amortization supplements GAAP financial measures because it allows for greater comparability of operating performance. Although REPAY excludes amortization from acquisition-related intangibles from its non-GAAP expenses, management believes that it is important for investors to understand that such intangibles were recorded as part of purchase accounting and contribute to revenue generation. Amortization of intangibles that relate to past acquisitions will recur in future periods until such intangibles have been fully amortized. Any future acquisitions may result in the amortization of additional intangibles. (h) Represents amortization of non-cash deferred debt issuance costs. (i) Represents pro forma income tax adjustment effect associated with items adjusted above. (j) Represents the weighted average number of shares of Class A common stock outstanding (on an as-converted basis assuming conversion of outstanding Post-Merger Repay Units) for the three months ended March 31, 2025 and 2024. These numbers do not include any shares issuable upon conversion of the Company's convertible senior notes. See the reconciliation of basic weighted average shares outstanding to the non-GAAP Class A common stock outstanding on an as-converted basis for each respective period below: Expand (k) Reflects a gain on the repurchase of 2026 Notes principal, net of a write-off of debt issuance costs relating to the repurchased principal. (l) Represents year-over-year gross profit growth that excludes incremental gross profit attributable to political media spending in Q1 2024 associated with the 2024 election cycle in our media payments business. Expand
Business Wire
12-05-2025
- Business
- Business Wire
REPAY Board of Directors Authorizes Increase to Share Repurchase Program, Up to $75 million
ATLANTA--(BUSINESS WIRE)-- Repay Holdings Corporation (NASDAQ: RPAY) ('REPAY' or the 'Company'), a leading provider of integrated payment processing solutions, today announced that its Board of Directors has increased its authorized share repurchase program. The share repurchase program authorizes the Company to now purchase up to $75 million (up from $50 million) of the Company's Class A common stock. As of the date of this release, there remains approximately $61.2 million in capacity for share repurchases under the increased share repurchase program. 'This upsized buyback authorization reinforces the Board's confidence in REPAY's profitable growth and free cash flow generation,' said John Morris, CEO of REPAY. 'Our capital allocation priorities remain focused on maintaining a strong balance sheet and investing towards organic and inorganic opportunities to create value for shareholders. This increased authorization enhances our ability to make disciplined capital decisions based on REPAY's financial position and current market conditions.' Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of any repurchases depending on market conditions and corporate needs. Open market repurchases are expected to be structured to occur within the pricing and volume requirements of Rule 10b-18. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. This program does not obligate the Company to acquire any particular amount of its Class A common stock and the program may be modified, suspended or discontinued at any time at the Company's discretion. About REPAY REPAY provides integrated payment processing solutions to verticals that have specific transaction processing needs. REPAY's proprietary, integrated payment technology platform reduces the complexity of electronic payments for clients, while enhancing the overall experience for consumers and businesses. Forward-Looking Statements This communication contains 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the share repurchase program, capital allocation initiatives, future financial and operating results, REPAY's plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as 'guidance,' 'will likely result,' 'are expected to,' 'will continue,' 'should,' 'is anticipated,' 'estimated,' 'believe,' 'intend,' 'plan,' 'projection,' 'outlook' or words of similar meaning. These forward-looking statements include, but are not limited to, statements regarding REPAY's growth and free cash flow generation and any share repurchases. Such forward-looking statements are based upon the current beliefs and expectations of REPAY's management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond REPAY's control. In addition to factors disclosed in REPAY's reports filed with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2024, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: exposure to economic conditions and political risk affecting the consumer loan market, the receivables management industry and consumer and commercial spending, including bank failures or other adverse events affecting financial institutions, inflationary pressures, evolving U.S. trade policies, general economic slowdown or recession; changes in the payment processing market in which REPAY competes, including with respect to its competitive landscape, technology evolution or regulatory changes; changes in the vertical markets that REPAY targets, including the regulatory environment applicable to REPAY's clients; the ability to retain, develop and hire key personnel; risks relating to REPAY's relationships within the payment ecosystem; risk that REPAY may not be able to execute its growth strategies, including identifying and executing acquisitions; risks relating to data security; changes in accounting policies applicable to REPAY; and the risk that REPAY may not be able to maintain effective internal controls. Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance. All information set forth herein speaks only as of the date hereof in the case of information about REPAY or the date of such information in the case of information from persons other than REPAY, and REPAY disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication. Forecasts and estimates regarding REPAY's industry and end markets are based on sources it believes to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part. Pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.
Business Wire
25-04-2025
- Business
- Business Wire
REPAY Announces Chief Financial Officer Transition
ATLANTA--(BUSINESS WIRE)-- Repay Holdings Corporation (NASDAQ: RPAY) ('REPAY' or the 'Company'), a leading provider of integrated payment processing solutions, today announced that Tim Murphy will be stepping down from his role as Chief Financial Officer to pursue an opportunity outside of the payments industry with a private equity-backed company. Mr. Murphy has served as the Chief Financial Officer of REPAY since 2014, and helped guide the company to its successful public listing in 2019 while also completing eleven acquisitions during his tenure. Mr. Murphy will remain with the Company until May 15, 2025 to help facilitate a smooth transition. Upon his departure from the Company, Thomas Sullivan will be appointed as Interim Chief Financial Officer until a permanent replacement can be identified. Mr. Sullivan is currently the Company's Chief Accounting Officer. 'We are incredibly grateful to Tim for his many contributions to REPAY over the last eleven plus years,' said John Morris, CEO of REPAY. 'His unique combination of skills has been essential as REPAY's first Chief Financial Officer, as both a private and a public company. We wish him well in all his future endeavors, and we are now focused on conducting a search process for the right candidate to continue leading our financial organization.' 'I want to thank John and the entire REPAY team, along with REPAY's Board of Directors, for their partnership and contributions since I joined in 2014,' said Tim Murphy. 'I have nothing but respect and admiration for the organization and the people who have made my time here extremely meaningful, and I look forward to watching their success in the future.' About REPAY REPAY provides integrated payment processing solutions to verticals that have specific transaction processing needs. REPAY's proprietary, integrated payment technology platform reduces the complexity of electronic payments for clients, while enhancing the overall experience for consumers and businesses. Forward-Looking Statements This communication contains 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about REPAY's executive search plans. Such forward-looking statements are based upon the current beliefs and expectations of REPAY's management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond REPAY's control, including, without limitation, the factors described in REPAY's reports filed with the U.S. Securities and Exchange Commission. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements. All information set forth herein speaks only as of the date hereof in the case of information about REPAY or the date of such information in the case of information.
