UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
(Exact name of Registrant as Specified in Its Charter)
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(IRS Employer |
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Registrant’s Telephone Number, Including Area Code: |
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On August 9, 2022, Repay Holdings Corporation (the “Company”) issued a press release announcing the results of the Company’s operations for the quarter ended June 30, 2022.
A copy of the Company’s press release is attached hereto as Exhibit 99.1 and is hereby incorporated by reference in this Item 2.02. As provided in General Instruction B.2 of Form 8-K, the information and exhibits contained in this Item 2.02 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall they be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01. Regulation FD Disclosure.
On August 9, 2022, the Company provided supplemental information regarding its business and operations in an earnings supplement and investor presentation that will be made available on the investor relations section of the Company’s website.
Copies of the earnings supplement and investor presentation are attached hereto as Exhibits 99.2 and 99.3 and are hereby incorporated by reference in this Item 7.01. As provided in General Instruction B.2 of Form 8-K, the information and exhibits contained in this Item 7.01 shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
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Description |
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99.1* |
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Press release issued August 9, 2022 by Repay Holdings Corporation |
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99.2* |
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99.3* |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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* |
Filed herewith |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Repay Holdings Corporation |
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Dated: August 9, 2022 |
By: |
/s/ Timothy J. Murphy |
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Timothy J. Murphy |
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Chief Financial Officer |
REPAY Reports Second Quarter 2022 Financial Results
ATLANTA, August 9, 2022 -- Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY” or the “Company”), a leading provider of vertically-integrated payment solutions, today reported financial results for its second quarter ended June 30, 2022.
“In the second quarter, we experienced card payment volume and gross profit growth of 34% and 42%, respectively, compared to the second quarter of 2021,” said John Morris, CEO of REPAY. “We continue to see growth across many areas of our business, especially our B2B payments business where our supplier network has reached 135,000, and this growth is aided by strong secular tailwinds and the digitization of business payments. While we continue to believe there is a large and underserved consumer lending opportunity, our clients are experiencing varying degrees of loan growth on the personal loan side. Therefore, we expect that the recovery for this business will take longer than we originally anticipated. In the second half of the year, we will remain focused on executing our strategy by increasing card penetration across our verticals, optimizing our processing infrastructure, developing the best software and payments solutions and practicing thoughtful capital allocation. This approach will help us continue to deliver sustainable, durable growth with strong unit economics.”
Three Months Ended June 30, 2022 Highlights
Gross profit represents total revenue less cost of services. Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share are non-GAAP financial measures. See “Non-GAAP Financial Measures” and the reconciliations of Adjusted EBITDA and Adjusted Net Income to their most comparable GAAP measures provided below for additional information.
2022 Outlook Update
REPAY now expects the following financial results for full year 2022, which replaces previously provided guidance.
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Full Year 2022 Outlook |
Card Payment Volume |
$25.0 - 26.3 billion |
Total Revenue |
$268 - 286 million |
Gross Profit |
$204 - 216 million |
Adjusted EBITDA |
$118 - 126 million |
This range assumes no further unforeseen COVID-related impacts, which could create substantial economic duress in the remainder of 2022. REPAY does not provide quantitative reconciliation of
forward-looking, non-GAAP financial measures, such as forecasted 2022 Adjusted EBITDA, 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 significant impact on such calculations, and providing them may imply a degree of precision that would be confusing or potentially misleading.
Conference Call
REPAY will host a conference call to discuss second quarter 2022 financial results today, August 9, 2022 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 https://investors.repay.com/investor-relations. 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 13730957. The replay will be available at https://investors.repay.com/investor-relations.
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 loss on extinguishment of debt, loss on termination of interest rate hedge, non-cash change in fair value of contingent consideration, non-cash change in fair value of assets and liabilities, share-based compensation charges, transaction expenses, employee recruiting costs, other taxes, 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, non-cash charges and/or non-recurring charges, such as loss on extinguishment of debt, loss on termination of interest rate hedge, non-cash change in fair value of contingent consideration, non-cash change in fair value of assets and liabilities, share-based compensation expense, transaction expenses, employee recruiting costs, 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 and six months ended June 30, 2022 and 2021 (excluding shares subject to forfeiture). REPAY believes that Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share provide useful information to investors and others in understanding and evaluating its operating results in the same manner as management. However, Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share are not financial measures calculated
in accordance with GAAP and should not be considered as a substitute for net income, operating profit, 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 Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share, 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 Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share alongside other financial performance measures, including net income 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, 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, REPAY’s 2022 revised outlook and other financial guidance, expected demand on REPAY’s product offering, including further implementation of electronic payment options and statements regarding REPAY’s market and growth opportunities, and REPAY’s business strategy and the plans and objectives of management for future operations. 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, 2021, 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: exposure to economic conditions and political risk affecting the consumer loan market, the receivables management industry and consumer and commercial spending, including inflationary pressures, general economic slowdown or recession; the impacts of the ongoing COVID-19 pandemic, including the continued emergence of new variants, and the actions taken to control or mitigate its spread; a delay or failure to integrate and/or realize the benefits of the Company’s recent acquisitions; 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.
Contacts
Investor Relations Contact for REPAY:
repayIR@icrinc.com
Media Relations Contact for REPAY:
Kristen Hoyman
(404) 637-1665
khoyman@repay.com
Consolidated Statement of Operations (Unaudited)
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Three Months ended June 30, |
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Six Months ended June 30, |
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(in $ thousands) |
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2022 |
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2021 |
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2022 |
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2021 |
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Revenue |
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$ |
67,435 |
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$ |
48,412 |
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$ |
134,999 |
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$ |
95,932 |
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Operating expenses |
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Costs of services (exclusive of depreciation and amortization shown separately below) |
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16,731 |
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12,721 |
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33,296 |
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25,196 |
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Selling, general and administrative |
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39,130 |
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29,542 |
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71,348 |
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52,935 |
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Depreciation and amortization |
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29,191 |
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19,679 |
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57,780 |
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37,472 |
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Change in fair value of contingent consideration |
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(1,050 |
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(1,200 |
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(3,950 |
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1,449 |
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Total operating expenses |
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$ |
84,002 |
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$ |
60,742 |
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$ |
158,474 |
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$ |
117,052 |
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Loss from operations |
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$ |
(16,567 |
) |
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$ |
(12,330 |
) |
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$ |
(23,475 |
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$ |
(21,120 |
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Interest expense |
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(1,051 |
) |
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(817 |
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(2,040 |
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(2,000 |
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Loss on extinguishment of debt |
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— |
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— |
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— |
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(5,941 |
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Change in fair value of tax receivable liability |
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19,450 |
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(4,355 |
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44,070 |
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(3,312 |
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Other income |
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10 |
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34 |
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17 |
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63 |
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Other loss |
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(150 |
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— |
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(150 |
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(9,080 |
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Total other income (expense) |
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18,259 |
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(5,138 |
) |
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41,897 |
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(20,270 |
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Income (loss) before income tax (expense) benefit |
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1,692 |
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(17,468 |
) |
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18,422 |
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(41,390 |
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Income tax (expense) benefit |
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(3,045 |
) |
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4,117 |
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(6,888 |
) |
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10,059 |
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Net income (loss) |
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$ |
(1,353 |
) |
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$ |
(13,351 |
) |
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$ |
11,534 |
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$ |
(31,331 |
) |
Net loss attributable to non-controlling interest |
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(1,362 |
) |
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(1,081 |
) |
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(2,129 |
) |
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(3,268 |
) |
Net income (loss) attributable to the Company |
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$ |
9 |
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$ |
(12,270 |
) |
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$ |
13,663 |
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$ |
(28,063 |
) |
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Weighted-average shares of Class A common stock outstanding - basic |
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88,903,674 |
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79,781,185 |
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88,756,482 |
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78,200,752 |
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Weighted-average shares of Class A common stock outstanding - diluted |
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113,250,564 |
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79,781,185 |
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112,866,991 |
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78,200,752 |
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Income (loss) per Class A share - basic |
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$ |
0.00 |
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$ |
(0.15 |
) |
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$ |
0.15 |
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$ |
(0.36 |
) |
Income (loss) per Class A share - diluted |
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$ |
0.00 |
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$ |
(0.15 |
) |
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$ |
0.12 |
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$ |
(0.36 |
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Consolidated Balance Sheets
(in $ thousands) |
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June 30, 2022 (Unaudited) |
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December 31, 2021 |
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Assets |
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Cash and cash equivalents |
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$ |
60,375 |
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$ |
50,049 |
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Accounts receivable |
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32,401 |
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33,236 |
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Prepaid expenses and other |
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13,599 |
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12,427 |
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Total current assets |
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106,375 |
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95,712 |
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Property, plant and equipment, net |
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4,514 |
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3,801 |
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Restricted cash |
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19,154 |
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26,291 |
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Intangible assets, net |
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535,796 |
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577,694 |
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Goodwill |
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827,802 |
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824,082 |
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Operating lease right-of-use assets, net |
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11,327 |
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10,500 |
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Deferred tax assets |
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133,813 |
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145,260 |
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Other assets |
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2,500 |
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2,500 |
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Total noncurrent assets |
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1,534,906 |
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1,590,128 |
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Total assets |
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$ |
1,641,281 |
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$ |
1,685,840 |
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Liabilities |
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Accounts payable |
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$ |
21,573 |
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$ |
20,083 |
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Related party payable |
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|
775 |
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17,394 |
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Accrued expenses |
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21,568 |
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26,819 |
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Current operating lease liabilities |
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2,207 |
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|
1,990 |
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Current tax receivable agreement |
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24,454 |
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24,496 |
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Other current liabilities |
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91 |
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|
1,566 |
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Total current liabilities |
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70,668 |
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92,348 |
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Long-term debt |
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449,896 |
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448,485 |
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Noncurrent operating lease liabilities |
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9,766 |
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|
9,091 |
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Tax receivable agreement, net of current portion |
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177,470 |
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221,333 |
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Other liabilities |
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3,266 |
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|
1,547 |
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Total noncurrent liabilities |
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640,398 |
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|
680,456 |
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Total liabilities |
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$ |
711,066 |
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$ |
772,804 |
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Commitments and contingencies |
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Stockholders' equity |
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Class A common stock, $0.0001 par value; 2,000,000,000 shares authorized, 88,993,722 issued and 88,892,919 outstanding as of June 30, 2022; 2,000,000,000 shares authorized, and 88,502,621 issued and outstanding as of December 31, 2021 |
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9 |
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9 |
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Class V common stock, $0.0001 par value; 1,000 shares authorized and 100 shares issued and outstanding as of June 30, 2022 and December 31, 2021 |
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— |
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— |
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Additional paid-in capital |
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1,107,432 |
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|
1,100,012 |
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Treasury stock, 100,803 and 0 shares as of June 30, 2022 and December 31, 2021, respectively |
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|
(1,152 |
) |
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— |
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Accumulated other comprehensive loss |
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(2 |
) |
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(2 |
) |
Accumulated deficit |
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(212,353 |
) |
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|
(226,016 |
) |
Total Repay stockholders' equity |
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$ |
893,934 |
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$ |
874,003 |
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Non-controlling interests |
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|
36,281 |
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|
39,033 |
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Total equity |
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930,215 |
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|
|
913,036 |
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Total liabilities and equity |
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$ |
1,641,281 |
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$ |
1,685,840 |
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Key Operating and Non-GAAP Financial Data
Unless otherwise stated, all results compare three and six month 2022 results to three and six month 2021 results from continuing operations for the period ended June 30, respectively.
The following tables and related notes reconcile these non-GAAP measures to GAAP information for the three and six months ended June 30, 2022 and 2021:
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Three months ended June 30, |
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Six months ended June 30, |
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(in $ thousands) |
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2022 |
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2021 |
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% Change |
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2022 |
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2021 |
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% Change |
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Card payment volume |
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$ |
6,196,253 |
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$ |
4,623,964 |
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34 |
% |
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$ |
12,610,205 |
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$ |
9,237,966 |
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37 |
% |
Gross profit1 |
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50,704 |
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|
35,691 |
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|
42 |
% |
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|
101,703 |
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|
70,736 |
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|
44 |
% |
Adjusted EBITDA2 |
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27,636 |
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|
20,403 |
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|
35 |
% |
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|
56,965 |
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|
40,864 |
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39 |
% |
(1) Gross profit represents total revenue less other costs of services.
(2) Adjusted EBITDA is a non-GAAP financial measure that represents net income adjusted for interest expense, depreciation and amortization and certain other charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring items. See “Non-GAAP Financial Measures” above and the reconciliation of Adjusted EBITDA to its most comparable GAAP measure below.
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA
For the Three Months Ended June 30, 2022 and 2021
(Unaudited)
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Three Months ended June 30, |
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|||||
(in $ thousands) |
2022 |
|
|
2021 |
|
|
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Revenue |
$ |
67,435 |
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|
$ |
48,412 |
|
|
Operating expenses |
|
|
|
|
|
|
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Costs of services (exclusive of depreciation and amortization shown separately below) |
$ |
16,731 |
|
|
$ |
12,721 |
|
|
Selling, general and administrative |
|
39,130 |
|
|
|
29,542 |
|
|
Depreciation and amortization |
|
29,191 |
|
|
|
19,679 |
|
|
Change in fair value of contingent consideration |
|
(1,050 |
) |
|
|
(1,200 |
) |
|
Total operating expenses |
$ |
84,002 |
|
|
$ |
60,742 |
|
|
Loss from operations |
$ |
(16,567 |
) |
|
$ |
(12,330 |
) |
|
Interest expense |
|
(1,051 |
) |
|
|
(817 |
) |
|
Change in fair value of tax receivable liability |
|
19,450 |
|
|
|
(4,355 |
) |
|
Other income |
|
10 |
|
|
|
34 |
|
|
Other loss |
|
(150 |
) |
|
|
— |
|
|
Total other income (expense) |
|
18,259 |
|
|
|
(5,138 |
) |
|
Income (loss) before income tax (expense) benefit |
|
1,692 |
|
|
|
(17,468 |
) |
|
Income tax (expense) benefit |
|
(3,045 |
) |
|
|
4,117 |
|
|
Net income (loss) |
$ |
(1,353 |
) |
|
$ |
(13,351 |
) |
|
|
|
|
|
|
|
|
||
Add: |
|
|
|
|
|
|
||
Interest expense |
|
1,051 |
|
|
|
817 |
|
|
Depreciation and amortization (a) |
|
29,191 |
|
|
|
19,679 |
|
|
Income tax expense (benefit) |
|
3,045 |
|
|
|
(4,117 |
) |
|
EBITDA |
$ |
31,934 |
|
|
$ |
3,028 |
|
|
|
|
|
|
|
|
|
||
Non-cash change in fair value of contingent consideration (b) |
|
(1,050 |
) |
|
|
(1,200 |
) |
|
Non-cash change in fair value of assets and liabilities (c) |
|
(19,450 |
) |
|
|
4,355 |
|
|
Share-based compensation expense (d) |
|
5,934 |
|
|
|
5,505 |
|
|
Transaction expenses (e) |
|
7,069 |
|
|
|
6,978 |
|
|
Employee recruiting costs (f) |
|
259 |
|
|
|
38 |
|
|
Other taxes (g) |
|
548 |
|
|
|
420 |
|
|
Restructuring and other strategic initiative costs (h) |
|
1,435 |
|
|
|
945 |
|
|
Other non-recurring charges (i) |
|
957 |
|
|
|
334 |
|
|
Adjusted EBITDA |
$ |
27,636 |
|
|
$ |
20,403 |
|
|
|
|
|
|
|
|
|
||
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA
For the Six Months Ended June 30, 2022 and 2021
(Unaudited)
|
Six Months ended June 30, |
|
|
|||||
(in $ thousands) |
2022 |
|
|
2021 |
|
|
||
Revenue |
$ |
134,999 |
|
|
$ |
95,932 |
|
|
Operating expenses |
|
|
|
|
|
|
||
Costs of services (exclusive of depreciation and amortization shown separately below) |
$ |
33,296 |
|
|
$ |
25,196 |
|
|
Selling, general and administrative |
|
71,348 |
|
|
|
52,935 |
|
|
Depreciation and amortization |
|
57,780 |
|
|
|
37,472 |
|
|
Change in fair value of contingent consideration |
|
(3,950 |
) |
|
|
1,449 |
|
|
Total operating expenses |
$ |
158,474 |
|
|
$ |
117,052 |
|
|
Loss from operations |
$ |
(23,475 |
) |
|
$ |
(21,120 |
) |
|
Interest expense |
|
(2,040 |
) |
|
|
(2,000 |
) |
|
Loss on extinguishment of debt |
|
— |
|
|
|
(5,941 |
) |
|
Change in fair value of tax receivable liability |
|
44,070 |
|
|
|
(3,312 |
) |
|
Other income |
|
17 |
|
|
|
63 |
|
|
Other loss |
|
(150 |
) |
|
|
(9,080 |
) |
|
Total other income (expense) |
|
41,897 |
|
|
|
(20,270 |
) |
|
Income (loss) before income tax (expense) benefit |
|
18,422 |
|
|
|
(41,390 |
) |
|
Income tax (expense) benefit |
|
(6,888 |
) |
|
|
10,059 |
|
|
Net income (loss) |
$ |
11,534 |
|
|
$ |
(31,331 |
) |
|
|
|
|
|
|
|
|
||
Add: |
|
|
|
|
|
|
||
Interest expense |
|
2,040 |
|
|
|
2,000 |
|
|
Depreciation and amortization (a) |
|
57,780 |
|
|
|
37,472 |
|
|
Income tax expense (benefit) |
|
6,888 |
|
|
|
(10,059 |
) |
|
EBITDA |
$ |
78,242 |
|
|
$ |
(1,918 |
) |
|
|
|
|
|
|
|
|
||
Loss on extinguishment of debt (j) |
|
— |
|
|
|
5,941 |
|
|
Loss on termination of interest rate hedge (k) |
|
— |
|
|
|
9,080 |
|
|
Non-cash change in fair value of contingent consideration (b) |
|
(3,950 |
) |
|
|
1,449 |
|
|
Non-cash change in fair value of assets and liabilities (c) |
|
(44,070 |
) |
|
|
3,312 |
|
|
Share-based compensation expense (d) |
|
9,292 |
|
|
|
10,656 |
|
|
Transaction expenses (e) |
|
11,999 |
|
|
|
9,318 |
|
|
Employee recruiting costs (f) |
|
459 |
|
|
|
174 |
|
|
Other taxes (g) |
|
698 |
|
|
|
559 |
|
|
Restructuring and other strategic initiative costs (h) |
|
2,681 |
|
|
|
1,573 |
|
|
Other non-recurring charges (i) |
|
1,614 |
|
|
|
720 |
|
|
Adjusted EBITDA |
$ |
56,965 |
|
|
$ |
40,864 |
|
|
|
|
|
|
|
|
|
||
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income
For the Three Months Ended June 30, 2022 and 2021
(Unaudited)
|
Three Months ended June 30, |
|
|
|||||
(in $ thousands) |
2022 |
|
|
2021 |
|
|
||
Revenue |
$ |
67,435 |
|
|
$ |
48,412 |
|
|
Operating expenses |
|
|
|
|
|
|
||
Costs of services (exclusive of depreciation and amortization shown separately below) |
$ |
16,731 |
|
|
$ |
12,721 |
|
|
Selling, general and administrative |
|
39,130 |
|
|
|
29,542 |
|
|
Depreciation and amortization |
|
29,191 |
|
|
|
19,679 |
|
|
Change in fair value of contingent consideration |
|
(1,050 |
) |
|
|
(1,200 |
) |
|
Total operating expenses |
$ |
84,002 |
|
|
$ |
60,742 |
|
|
Loss from operations |
$ |
(16,567 |
) |
|
$ |
(12,330 |
) |
|
Interest expense |
|
(1,051 |
) |
|
|
(817 |
) |
|
Change in fair value of tax receivable liability |
|
19,450 |
|
|
|
(4,355 |
) |
|
Other income |
|
10 |
|
|
|
34 |
|
|
Other loss |
|
(150 |
) |
|
|
— |
|
|
Total other income (expense) |
|
18,259 |
|
|
|
(5,138 |
) |
|
Income (loss) before income tax (expense) benefit |
|
1,692 |
|
|
|
(17,468 |
) |
|
Income tax (expense) benefit |
|
(3,045 |
) |
|
|
4,117 |
|
|
Net income (loss) |
$ |
(1,353 |
) |
|
$ |
(13,351 |
) |
|
|
|
|
|
|
|
|
||
Add: |
|
|
|
|
|
|
||
Amortization of acquisition-related intangibles (l) |
|
25,941 |
|
|
|
17,270 |
|
|
Non-cash change in fair value of contingent consideration (b) |
|
(1,050 |
) |
|
|
(1,200 |
) |
|
Non-cash change in fair value of assets and liabilities (c) |
|
(19,450 |
) |
|
|
4,355 |
|
|
Share-based compensation expense (d) |
|
5,934 |
|
|
|
5,505 |
|
|
Transaction expenses (e) |
|
7,069 |
|
|
|
6,978 |
|
|
Employee recruiting costs (f) |
|
259 |
|
|
|
38 |
|
|
Restructuring and other strategic initiative costs (h) |
|
1,435 |
|
|
|
945 |
|
|
Other non-recurring charges (i) |
|
957 |
|
|
|
334 |
|
|
Non-cash interest expense (m) |
|
709 |
|
|
|
802 |
|
|
Pro forma taxes at effective rate (n) |
|
(4,368 |
) |
|
|
(7,693 |
) |
|
Adjusted Net Income |
$ |
16,083 |
|
|
$ |
13,983 |
|
|
|
|
|
|
|
|
|
||
Shares of Class A common stock outstanding (on an as-converted basis) (o) |
|
96,787,200 |
|
|
|
87,734,237 |
|
|
Adjusted Net income per share |
$ |
0.17 |
|
|
$ |
0.16 |
|
|
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income
For the Six Months Ended June 30, 2022 and 2021
(Unaudited)
|
Six Months ended June 30, |
|
|
|||||
(in $ thousands) |
2022 |
|
|
2021 |
|
|
||
Revenue |
$ |
134,999 |
|
|
$ |
95,932 |
|
|
Operating expenses |
|
|
|
|
|
|
||
Costs of services (exclusive of depreciation and amortization shown separately below) |
$ |
33,296 |
|
|
$ |
25,196 |
|
|
Selling, general and administrative |
|
71,348 |
|
|
|
52,935 |
|
|
Depreciation and amortization |
|
57,780 |
|
|
|
37,472 |
|
|
Change in fair value of contingent consideration |
|
(3,950 |
) |
|
|
1,449 |
|
|
Total operating expenses |
$ |
158,474 |
|
|
$ |
117,052 |
|
|
Loss from operations |
$ |
(23,475 |
) |
|
$ |
(21,120 |
) |
|
Interest expense |
|
(2,040 |
) |
|
|
(2,000 |
) |
|
Loss on extinguishment of debt |
|
— |
|
|
|
(5,941 |
) |
|
Change in fair value of tax receivable liability |
|
44,070 |
|
|
|
(3,312 |
) |
|
Other income |
|
17 |
|
|
|
63 |
|
|
Other loss |
|
(150 |
) |
|
|
(9,080 |
) |
|
Total other income (expense) |
|
41,897 |
|
|
|
(20,270 |
) |
|
Income (loss) before income tax (expense) benefit |
|
18,422 |
|
|
|
(41,390 |
) |
|
Income tax (expense) benefit |
|
(6,888 |
) |
|
|
10,059 |
|
|
Net income (loss) |
$ |
11,534 |
|
|
$ |
(31,331 |
) |
|
|
|
|
|
|
|
|
||
Add: |
|
|
|
|
|
|
||
Amortization of acquisition-related intangibles(l) |
|
49,077 |
|
|
|
33,309 |
|
|
Loss on extinguishment of debt (j) |
|
— |
|
|
|
5,941 |
|
|
Loss on termination of interest rate hedge (k) |
|
— |
|
|
|
9,080 |
|
|
Non-cash change in fair value of contingent consideration (b) |
|
(3,950 |
) |
|
|
1,449 |
|
|
Non-cash change in fair value of assets and liabilities (c) |
|
(44,070 |
) |
|
|
3,312 |
|
|
Share-based compensation expense (d) |
|
9,292 |
|
|
|
10,656 |
|
|
Transaction expenses (e) |
|
11,999 |
|
|
|
9,318 |
|
|
Employee recruiting costs (f) |
|
459 |
|
|
|
174 |
|
|
Restructuring and other strategic initiative costs (h) |
|
2,681 |
|
|
|
1,573 |
|
|
Other non-recurring charges (i) |
|
1,614 |
|
|
|
720 |
|
|
Non-cash interest expense (m) |
|
1,411 |
|
|
|
1,338 |
|
|
Pro forma taxes at effective rate (n) |
|
(5,562 |
) |
|
|
(16,473 |
) |
|
Adjusted Net Income |
$ |
34,485 |
|
|
$ |
29,066 |
|
|
|
|
|
|
|
|
|
||
Shares of Class A common stock outstanding (on an as-converted basis) (o) |
|
96,661,414 |
|
|
|
86,165,128 |
|
|
Adjusted Net income per share |
$ |
0.36 |
|
|
$ |
0.34 |
|
|
|
|
Three months ended June 30, |
|
|
Six Months ended June 30, |
|
||||||||||
(in $ thousands) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Acquisition-related intangibles |
|
$ |
25,941 |
|
|
$ |
17,270 |
|
|
$ |
49,077 |
|
|
$ |
33,309 |
|
Software |
|
|
2,700 |
|
|
|
2,120 |
|
|
|
7,646 |
|
|
|
3,291 |
|
Amortization |
|
$ |
28,641 |
|
|
$ |
19,390 |
|
|
$ |
56,723 |
|
|
$ |
36,600 |
|
Depreciation |
|
|
550 |
|
|
|
289 |
|
|
|
1,057 |
|
|
|
872 |
|
Total Depreciation and amortization (1) |
|
$ |
29,191 |
|
|
$ |
19,679 |
|
|
$ |
57,780 |
|
|
$ |
37,472 |
|
|
|
Three months ended June 30, |
|
Six Months ended June 30, |
||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Weighted average shares of Class A common stock outstanding - basic |
|
88,903,674 |
|
79,781,185 |
|
88,756,482 |
|
78,200,752 |
Add: Non-controlling interests |
|
7,883,526 |
|
7,953,052 |
|
7,904,932 |
|
7,964,376 |
Shares of Class A common stock outstanding (on an as-converted basis) |
|
96,787,200 |
|
87,734,237 |
|
96,661,414 |
|
86,165,128 |
August 2022 Q2 2022 Earnings Supplement Exhibit 99.2
Disclaimer Repay Holdings Corporation (“REPAY” or the “Company”) is required to file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (“SEC”) Such filings, which you may obtain for free at the SEC’s website at http://www.sec.gov, discuss some of the important risk factors that may affect REPAY’s business, results of operations and financial condition. Forward-Looking Statements This presentation (the “Presentation”) 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, REPAY’s plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, REPAY’s revised 2022 outlook and other financial guidance, expected demand on REPAY’s product offering, including further implementation of electronic payment options and statements regarding REPAY’s market and growth opportunities, and REPAY’s business strategy and the plans and objectives of management for future operations. 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 previously disclosed in REPAY’s reports filed with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2021, 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 inflationary pressures, general economic slowdown or recession; the impacts of the ongoing COVID-19 pandemic, including the continued emergence of new variants, and the actions taken to control or mitigate its spread; a delay or failure to integrate and/or realize the benefits of REPAY’s recent acquisitions; 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 Presentation. Forecasts and estimates regarding our industry and end markets are based on sources REPAY believes to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results. Industry and Market Data The information contained herein also includes information provided by third parties, such as market research firms. Neither of REPAY nor its affiliates and any third parties that provide information to REPAY, such as market research firms, guarantee the accuracy, completeness, timeliness or availability of any information. Neither REPAY nor its affiliates and any third parties that provide information to REPAY, such as market research firms, are responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or the results obtained from the use of such content. Neither REPAY nor its affiliates give any express or implied warranties, including, but not limited to, any warranties of merchantability or fitness for a particular purpose or use, and they expressly disclaim any responsibility or liability for direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees or losses (including lost income or profits and opportunity costs) in connection with the use of the information herein. Non-GAAP Financial Measures This Presentation includes certain non-GAAP financial measures that REPAY’s management uses to evaluate its operating business, measure its 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 and/or non-recurring charges, such as loss on extinguishment of debt, loss on termination of interest rate hedge, non-cash change in fair value of contingent consideration, non-cash change in fair value of assets and liabilities, share-based compensation charges, transaction expenses, employee recruiting costs, other taxes, 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, non-cash and/or non-recurring charges, such as loss on extinguishment of debt, loss on termination of interest rate hedge, non-cash change in fair value of contingent consideration, non-cash change in fair value of assets and liabilities, share-based compensation expense, transaction expenses, employee recruiting costs, restructuring and strategic initiative costs and other non-recurring charges, non-cash interest expense, 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 management excludes amortization from acquisition-related intangibles from REPAY’s 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. Organic gross profit growth is a non-GAAP financial measure that represents year-on-year gross profit growth that excludes incremental gross profit attributable to acquisitions made in the applicable prior period (or any subsequent period). REPAY believes that Adjusted EBITDA, Adjusted Net Income and organic gross profit growth provide useful information to investors and others in understanding and evaluating its operating results in the same manner as management. However, Adjusted EBITDA, Adjusted Net Income and organic gross profit growth are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income, operating profit, 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 Adjusted EBITDA, Adjusted Net Income, organic gross profit growth, 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 Adjusted EBITDA, Adjusted Net Income and organic gross profit growth alongside other financial performance measures, including net income and REPAY’s other financial results presented in accordance with GAAP. .
1 Financial Update & Outlook
We remain positioned for another year of growth in 2022 We will continue to take advantage of the many secular trends towards frictionless digital payments that have been, and will continue to be, a tailwind driving our business
Second Quarter 2022 Financial Highlights CARD PAYMENT VOLUME $6.2Bn (+34%) TOTAL REVENUE GROSS PROFIT(1) ADJUSTED EBITDA REPAY’s Unique Model Translates Into a Highly Attractive Financial Profile (Represents YoY Growth) $67.4MM (+39%) $50.7MM (+42%) $27.6MM (+35%) Gross profit represents total revenue less other costs of services
Card Payment Volume Gross Profit(1) Adjusted EBITDA Financial Update – Q2 2022 ($MM) Gross profit represents total revenue less other costs of services 74% 75% % Margin 42% 41% % Margin 42% 35% 34%
Organic Growth Recovery Primary COVID Impact Organic Gross Profit Growth Rebound(1) The growth rates shown below provide evidence of a resilient business model and a rebound in organic growth from COVID impacts, which the Company expects will continue in future periods Organic gross profit growth is a non-GAAP financial measure that represents year-on-year gross profit growth that excludes incremental gross profit attributable to acquisitions made in the applicable prior period (or any subsequent period). See slide 20 for additional details See slide 9 for additional details (2)
Strong Liquidity Position as of June 30, 2022 Based on LTM June 2022 PF adjusted EBITDA, pro forma for adjusted EBITDA contribution of Payix Focused on Maintaining Significant Liquidity Preserve liquidity and profitability through: Implementing a soft hiring freeze Limiting discretionary expenses Negotiations with vendors Business continues to show high cash flow conversion Continued investments in organic and inorganic growth Committed to Prudently Managing Leverage Proceeds from convertible notes and follow-on equity offerings used to refinance existing term loan No interest payments, no principal due until maturity in 2026 (if not converted) $185 million revolver facility provides flexibility for further acquisitions Secured net leverage covenant is max of 2.5x (definitionally excludes convertible notes balance) $165 million remaining in revolver facility provides flexibility for additional acquisitions Leverage Total Debt $460 MM Cash on Hand $60 MM Net Debt $400 MM PF Net Leverage(1) 3.5x Liquidity Cash on Hand $60 MM Revolver Capacity $165 MM Total Liquidity $225 MM
Revised FY 2022 Outlook Note: REPAY does not provide quantitative reconciliation of forward-looking, non-GAAP financial measures such as forecasted 2022 Adjusted EBITDA 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 significant impact on such calculations, and providing them may imply a degree of precision that would be confusing or potentially misleading REPAY revised its previously provided guidance for full year 2022, as shown below CARD PAYMENT VOLUME TOTAL REVENUE GROSS PROFIT ADJUSTED EBITDA $25.0 – $26.3Bn $268 – $286MM $204 – $216MM $118 – $126MM
FY 2022 Gross Profit Outlook Bridge ($MM) Represents high end of FY 2022 gross profit guidance REPAY’s 2022 Gross Profit Outlook Represents ~32% Total Growth & ~14% Organic Growth Organic Growth Growth from Recently Acquired Entities (1)
2 Strategy & Business Updates
Acquire New Clients in Existing Verticals With Our Q2 2022 Performance We See Multiple Levers to Continue to Drive Growth Q2 2022 Gross Profit Growth 42% EXECUTE ON EXISTING BUSINESS BROADENING ADDRESSABLE MARKET AND SOLUTIONS REPAY’s leading platform & attractive market opportunity position it to build on its record of robust growth & profitability Operational Efficiencies Expand Usage and Increase Adoption Strategic M&A Future Market Expansion Opportunities Majority of growth derived from further penetration of existing client base
ADDED NEW CUSTOMERS VIA DIRECT SALESFORCE ACROSS ALL VERTICALS 230 SOFTWARE PARTNER RELATIONSHIPS(1), INCLUDING: As of June 30, 2022; certain logos added post this date Third-party research and management estimates as of 6/30/2022 Executing on Growth Plan BROADEN ADDRESSABLE MARKET AND SOLUTIONS Partnered with Veem to expand ability to deliver cross-border payment options Ended Q2 2022 with 225 total credit union customers Expanded TAM to ~$5.3 trillion(2) through strategic M&A, including our acquisitions of BillingTree, Kontrol Payables and Payix Continued to grow existing relationships and add new names to our Buy Now Pay Later pipeline Completed concurrent common stock and convertible notes offerings in Q1 2021, as well as amended our revolving credit facility – providing the Company with ample liquidity of $225 million to pursue deals Engaged 40+ software developers thus far through relationship with Protego to enhance and accelerate new product and research & development capabilities EXPANDING EXISTING BUSINESS B2B CROSS BORDER LOAN REPAYMENT / ARM / CREDIT UNION B2B VIRTUAL CARD / AP AUTOMATION MORTGAGE SERVICING Further product expansion in loan repayments, through partnership with Finicity VISA ACCEPTANCE FASTRACK PROGRAM
REPAY’s Growing B2B Payments Business $1.2Tn total addressable market Integrations with leading ERP platforms, serving a highly diversified client base across a wide range of industry verticals Expanded into B2B vertical via APS acquisition Cross sell initiative happening within Sage and Acumatica ERPs to add AP solutions TOTAL ADDRESSABLE MARKET(1) $3.4Tn VERTICAL END MARKETS 15+ ANNUALIZED PAYMENT VOLUME(2) ~$6.0Bn CLIENTS ~3,800 SUPPLIER NETWORK ~135K B2B INTEGRATED SOFTWARE PARTNERS ~85 Combined AR and AP automation solution provides a compelling value proposition to clients $2.2Tn total addressable market Fully integrated AP automation platform with electronic payment capabilities including virtual cards and ACH Expanded into AP automation vertical via cPayPlus, CPS, and Kontrol acquisitions Entered the B2B healthcare space through Ventanex acquisition Third-party research and management estimates as of 6/30/22 Volume includes merchant acquiring credit and debit card, virtual card, and enhanced ACH B2B Merchant Acquiring B2B AP Automation
One-stop-shop B2B payments solutions provider REPRESENTATIVE CLIENTS Automated Reporting and Reconciliation Multiple Payment Options Including Virtual Card and Cross Border Vendor Management Customer Rebates Deep ERP Integrations Multiple Payment Methods Tracking and Reconciliation Highly Secure ACCOUNTS RECEIVABLE AUTOMATION ACCOUNTS PAYABLE AUTOMATION TotalPay Solution Cash Inflow Cash Outflow Buyers Suppliers Powerful B2B Offering
3 Appendix
Q2 2022 Financial Update Gross Profit is defined as Total Revenue less Cost of Services SG&A includes expense associated with the change in fair value of tax receivable liability, change in fair value of contingent consideration, and other income / expenses See “Adjusted EBITDA Reconciliation” on slide 17 for reconciliation of Adjusted EBITDA to its most comparable GAAP measure See “Adjusted Net Income Reconciliation” on slide 18 for reconciliation of Adjusted Net Income to its most comparable GAAP measure old THREE MONTHS ENDED JUNE 30 CHANGE ($MM) 2022 2021 AMOUNT % Card Payment Volume $6,196.3 $4,624.0 $1,572.3 34% Total Revenue $67.4 $48.4 $19.0 39% Cost of Services 16.7 12.7 4.0 32% Gross Profit(1) $50.7 $35.7 $15.0 42% SG&A(2) 18.8 32.7 (13.9) 43% EBITDA $31.9 $3.0 $28.9 NM Depreciation and Amortization 29.2 19.7 9.5 48% Interest Expense 1.1 0.8 0.2 29% Income Tax Expense (Benefit) 3.0 (4.1) 7.2 NM Net Income (Loss) ($1.4) ($13.4) $12.0 90% Adjusted EBITDA(3) $27.6 $20.4 $7.2 35% Adjusted Net Income(4) $16.1 $14.0 $2.1 15%
Adjusted EBITDA Reconciliation For the three months ended June 30, 2022, reflects amortization of client relationships, non-compete agreement, software, and channel relationship intangibles acquired through the Business Combination, 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. For the three months ended June 30, 2021, reflects amortization of client relationships, non-compete agreement, software, and channel relationship intangibles acquired through the Business Combination, and client relationships, non-compete agreement, and software intangibles acquired through REPAY’s acquisitions of TriSource Solutions, APS Payments, Ventanex, cPayPlus, CPS, BillingTree, and Kontrol Payables. 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. Reflects the changes in management’s estimates of future cash consideration to be paid in connection with prior acquisitions from the amount estimated as of the most recent balance sheet date. Reflects the changes in management’s estimates of the fair value of the liability relating to the Tax Receivable Agreement. Represents compensation expense associated with equity compensation plans, totaling $5.9 million and $5.5 million for the three months ended June 30, 2022 and 2021, respectively. Primarily consists of (i) during the three months ended June 30, 2022, professional service fees and other costs incurred in connection with the acquisitions of BillingTree, Kontrol Payables and Payix, and (ii) during the three months ended June 30, 2021, professional service fees and other costs incurred in connection with the acquisition of Ventanex, cPayPlus, CPS, BillingTree and Kontrol Payables, as well as professional service expenses related to the January 2021 equity and convertible notes offerings. Represents payments made to third-party recruiters in connection with a significant expansion of personnel, which REPAY expects will become more moderate in subsequent periods. Reflects franchise taxes and other non-income based taxes. Reflects consulting fees related to processing services and other operational improvements, including restructuring and integration activities related to our acquired businesses, that were not in the ordinary course during the three months ended June 30, 2022 and 2021. For the three months ended June 30, 2022 and 2021, reflects extraordinary refunds to clients and other payments related to COVID-19 and non-cash rent expense. Additionally, for the three and six months ended June 30, 2022, reflects loss on termination of lease and loss on disposal of fixed assets. ($MM) Q2 2022 Q2 2021 Net Income (Loss) ($1.4) ($13.4) Interest Expense 1.1 0.8 Depreciation and Amortization(1) 29.2 19.7 Income Tax Expense (Benefit) 3.0 (4.1) EBITDA $31.9 $3.0 Non-cash change in fair value of contingent consideration(2) (1.1) (1.2) Non-cash change in fair value of assets and liabilities(3) (19.5) 4.4 Share-based compensation expense(4) 5.9 5.5 Transaction expenses(5) 7.1 7.0 Employee recruiting costs(6) 0.3 0.0 Other taxes(7) 0.5 0.4 Restructuring and other strategic initiative costs(8) 1.4 0.9 Other non-recurring charges(9) 1.0 0.3 Adjusted EBITDA $27.6 $20.4
Adjusted Net Income Reconciliation For the three months ended June 30, 2022, reflects amortization of client relationships, non-compete agreement, software, and channel relationship intangibles acquired through the Business Combination, 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. For the three months ended June 30, 2021, reflects amortization of client relationships, non-compete agreement, software, and channel relationship intangibles acquired through the Business Combination, and client relationships, non-compete agreement, and software intangibles acquired through REPAY’s acquisitions of TriSource Solutions, APS Payments, Ventanex, cPayPlus, CPS, BillingTree, and Kontrol Payables. 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. Reflects the changes in management’s estimates of future cash consideration to be paid in connection with prior acquisitions from the amount estimated as of the most recent balance sheet date. Reflects the changes in management’s estimates of the fair value of the liability relating to the Tax Receivable Agreement. Represents compensation expense associated with equity compensation plans, totaling $5.9 million and $5.5 million for the three months ended June 30, 2022 and 2021, respectively. Primarily consists of (i) during the three months ended June 30, 2022, professional service fees and other costs incurred in connection with the acquisitions of BillingTree, Kontrol Payables and Payix, and (ii) during the three months ended June 30, 2021, professional service fees and other costs incurred in connection with the acquisition of Ventanex, cPayPlus, CPS, BillingTree and Kontrol Payables, as well as professional service expenses related to the January 2021 equity and convertible notes offerings. Represents payments made to third-party recruiters in connection with a significant expansion of personnel, which REPAY expects will become more moderate in subsequent periods. Reflects consulting fees related to our processing services and other operational improvements, including restructuring and integration activities related to acquired businesses, that were not in the ordinary course during the three months ended June 30, 2022 and 2021. For the three months ended June 30, 2022 and 2021, reflects extraordinary refunds to clients and other payments related to COVID-19 and non-cash rent expense. Additionally, for the three and six months ended June 30, 2022, reflects loss on termination of lease and loss on disposal of fixed assets. Represents non-cash deferred debt issuance costs. Represents pro forma income tax adjustment effect associated with items adjusted above. ($MM) Q2 2022 Q2 2021 Net Income (Loss) ($1.4) ($13.4) Amortization of acquisition-related intangibles(1) 25.9 17.3 Non-cash change in fair value of contingent consideration(2) (1.1) (1.2) Non-cash change in fair value of assets and liabilities(3) (19.5) 4.4 Share-based compensation expense(4) 5.9 5.5 Transaction expenses(5) 7.1 7.0 Employee recruiting costs(6) 0.3 0.0 Restructuring and other strategic initiative costs(7) 1.4 0.9 Other non-recurring charges(8) 1.0 0.3 Non-cash interest expense(9) 0.7 0.8 Pro forma taxes at effective rate(10) (4.4) (7.7) Adjusted Net Income $16.1 $14.0
Depreciation and Amortization Detail Note: Adjusted Net Income is adjusted to exclude amortization of all acquisition-related intangibles as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions (see corresponding adjustments in the reconciliation of net income to Adjusted Net Income on slide 18). Management believes that the adjustment of acquisition-related intangible amortization supplements GAAP financial measures because it allows for greater comparability of operating performance. Although REPAY excludes amortization from acquisition-related intangibles from our non-GAAP expenses, management believes that it is important for investors to understand that such intangibles were recorded as part of purchase accounting and contribute to revenue generation. Amortization of intangibles that relate to past acquisitions will recur in future periods until such intangibles have been fully amortized. Any future acquisitions may result in the amortization of additional intangibles. ($MM) Q2 2022 Q2 2021 Acquisition-related intangibles $25.9 $17.3 Software 2.7 2.1 Amortization 28.6 19.4 Depreciation 0.6 0.3 Total Depreciation and amortization $29.2 $19.7
Organic Gross Profit Reconciliation FY 2020A FY 2021A FY 2022E Total Gross Profit Growth 44% 44% 32% Less: Growth from Acquisitions 33% 30% 18% Organic Gross Profit Growth(1) 11% 14% 14% Organic gross profit growth is a non-GAAP financial measure that represents year-on-year gross profit growth that excludes incremental gross profit attributable to acquisitions made in the applicable prior period (or any subsequent period)
August 2022 Investor Presentation Exhibit 99.3
Disclaimer On July 11, 2019 (the “Closing Date”), Thunder Bridge Acquisition Ltd. (“Thunder Bridge”) and Hawk Parent Holdings LLC (“Hawk Parent”) completed their previously announced business combination (the “Business Combination”) under which Thunder Bridge acquired Hawk Parent, upon which Thunder Bridge changed its name to Repay Holdings Corporation (“REPAY” or the “Company”). Unless otherwise indicated, information provided in this presentation (a) that relates to any period ended prior to the Closing Date reflects that of Hawk Parent prior to the Business Combination, and (b) that relates to any period ended December 31, 2019 reflects the combination of (i) Hawk Parent for the periods from January 1, 2019 through July 10, 2019 and (ii) REPAY for the period from the Closing Date through December 31, 2019. Such combination reflects a simple arithmetic addition of the relevant periods. The historical financial information of Thunder Bridge prior to the Business Combination has not been reflected in any financial information of Hawk Parent. The Company’s filings with the Securities and Exchange Commission (“SEC”), which you may obtain for free at the SEC’s website at http://www.sec.gov, discuss some of the important risk factors that may affect REPAY’s business, results of operations and financial condition. Forward-Looking Statements This presentation (the “Presentation”) 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, REPAY’s plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, expected demand on REPAY’s product offering, including further implementation of electronic payment options and statements regarding REPAY’s market and growth opportunities, and our business strategy and the plans and objectives of management for future operations. 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 our control. In addition to factors previously disclosed in REPAY’s reports filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2021, 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 inflationary pressures, general economic slowdown or recession; the impacts of the ongoing COVID-19 pandemic, including the continued emergence of new variants, and the actions taken to control or mitigate its spread; a delay or failure to integrate and/or realize the benefits of REPAY’s recent acquisitions; 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 us or the date of such information in the case of information from persons other than us, and we disclaim 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 our industry and end markets are based on sources we believe to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part. Projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results. Industry and Market Data The information contained herein also includes information provided by third parties, such as market research firms. Neither of REPAY nor its affiliates and any third parties that provide information to REPAY, such as market research firms, guarantee the accuracy, completeness, timeliness or availability of any information. Neither REPAY nor its affiliates and any third parties that provide information to REPAY, such as market research firms, are responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or the results obtained from the use of such content. Neither REPAY nor its affiliates give any express or implied warranties, including, but not limited to, any warranties of merchantability or fitness for a particular purpose or use, and they expressly disclaim any responsibility or liability for direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees or losses (including lost income or profits and opportunity costs) in connection with the use of the information herein. Non-GAAP Financial Measures This Presentation includes certain non-GAAP financial measures that REPAY’s management uses to evaluate its operating business, measure its 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 not to be part of normal operating expenses, non-cash and/or non-recurring charges, such as loss on extinguishment of debt, non-cash change in fair value of contingent consideration, non-cash change in fair value of assets and liabilities, non-cash change in fair value of warrant liabilities; share-based compensation charges, transaction expenses, management fees, employee recruiting costs, other taxes, strategic initiative related costs and other non-recurring charges. REPAY believes that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating its operating results in the same manner as management. However, Adjusted EBITDA is not a financial measure calculated in accordance with GAAP and should not be considered as a substitute for net income, operating profit, or any other operating performance measure calculated in accordance with GAAP. Using a non-GAAP financial measure 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 Adjusted EBITDA 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 Adjusted EBITDA alongside other financial performance measures, including net income and REPAY’s other financial results presented in accordance with GAAP. Beginning with the quarter ended December 31, 2021, REPAY changed its method of calculating Adjusted EBITDA by removing the adjustment related to legacy commission restructuring charges and their tax effects. Adjusted EBITDA for the years ended December 31, 2020 and 2019 were also adjusted to conform to the current presentation, resulting in reductions in the Adjusted EBITDA from the previously reported amounts. The presentation for Adjusted EBITDA for all periods presented have been updated to reflect these changes and a reconciliation between the revised and previous definition of Adjusted EBITDA has been provided within the “Adjusted EBITDA Reconciliation – Historical” slide contained herein.
Agenda Introduction to REPAY REPAY Investment Highlights REPAY Financial Overview 1 2 3 2
1 Introduction to REPAY
REPAY’s proprietary, integrated payment technology platform reduces the complexity of electronic payments for clients, while enhancing the overall experience for consumers and businesses REPAY provides integrated payment processing solutions to verticals that have specific transaction processing needs
ENERGY AUTOMOTIVE LOANS B2B MERCHANT ACQUIRING PERSONAL LOANS CREDIT UNIONS HEALTHCARE MORTGAGE ARM B2B AP AUTOMATION Your Industry. Our Expertise.
Who We Are A leading, highly-integrated omni-channel payment technology platform modernizing B2B payments, loan repayment verticals, and healthcare payments CAGR is from 2019A–2021A As of 6/30/2022 2021A Cash Flow Conversion calculated as Adjusted EBITDA – Capex / Adjusted EBITDA 2021 ANNUAL CARD PAYMENT VOLUME HISTORICAL GROSS PROFIT CAGR(1) SOFTWARE INTEGRATIONS(2) $20.5Bn 44% 230 76% CASH FLOW CONVERSION(3)
LONG-TERM GROWTH ORGANIC GROWTH M&A CATALYSTS Deepen presence in existing verticals (e.g. Automotive, B2B, Credit Unions, Revenue Cycle Management, Healthcare) Expand into new verticals/geographies Transformational acquisitions extending broader solution suite Driving Shareholder Value 1) Third-party research and management estimates as of 6/30/2022 Secular trends away from cash and check toward digital payments Transaction growth in key verticals Further penetrate existing clients ~$5.3Tn TAM(1) Creates long runway for growth Deep presence in key verticals creates significant defensibility Highly attractive financial model =
Our Strong Execution and Momentum TOTAL ADDRESSABLE MARKET ~$535Bn ~$5.3Tn(2) # OF ISV INTEGRATIONS 53 230(4) CLIENT COUNT ~4,000 ~21,000+(3) Delivering Superior Results (FY 2021) Second Quarter 2022(1) AT INITIAL BUSINESS COMBINATION (IBC) CARD PAYMENT VOLUME GROSS PROFIT ADJ. EBITDA +35% +44% +57% As of 6/30/2022 Third-party research and management estimates Management estimate, includes TriSource, APS, Ventanex, cPayPlus , CPS Payments, BillingTree, Kontrol Payables and Payix Includes integrations from APS, Ventanex, cPayPlus, CPS Payments, BillingTree, Kontrol Payables and Payix (Represents YoY Growth)
2 REPAY Investment Highlights
1 Business Strengths and Strategies A leading, omni-channel payment technology provider Fast growing and underpenetrated market opportunity Vertically integrated payment technology platform driving frictionless payments experience Experienced board with deep payments expertise Multiple avenues for long-term growth Highly strategic and diverse client base 2 3 4 5 6 Key software integrations enabling unique distribution model
1 We are Capitalizing on Large, Underserved Market Opportunities REPAY’s existing verticals represent ~$5.3Tn(1) of projected annual total payment volume END MARKET OPPORTUNITIES Healthcare $30Bn $185Bn $70Bn $420Bn $500Bn $70Bn $600Bn $1.2Tn $2.2Tn Energy Credit Unions ARM Mortgage Personal Loans Automotive Loans B2B Merchant Acquiring B2B AP Automation Future New Verticals Canada Buy Now. Pay Later. Growth Opportunities $20.5Bn REPAY’s 2021 Annual Card Payment Volume 1) Third-party research and management estimates as of 6/30/2022
1 Key end markets have been underserved by payment technology and service providers Credit cards are not permitted in loan repayment which has resulted in overall low card penetration CLIENTS SERVING REPAY’S MARKETS ARE FACING INCREASING DEMAND FROM CUSTOMERS They want electronic and omnichannel payment solutions LOAN REPAYMENT, B2B, AND HEALTHCARE MARKETS Lagged behind other industry verticals in moving to electronic payments CONSUMER PAYMENTS BUSINESS PAYMENTS B2B payments have traditionally been made via check or ACH (including AP and AR) Shift towards high deductible health plans resulting in growing proportion of consumer payments
Card and Debit Payments Underpenetrated in Our Verticals The Nilson Report – December 2018. Represents debit and credit as a percentage of all U.S. consumer payment systems, including various forms of paper, card, and electronic payment methods Third-party research and management estimates Across REPAY’s Verticals(2) Card Payment Penetration Across Industries(1) 1
REPAY Has Built a Leading Next-Gen Software Platform Proprietary, integrated payment technology platform reduces complexity for a unified commerce experience Pay Anywhere, Any Way, Any Time Businesses and Consumers Clients 2
REPAY Has Built a Leading Next-Gen Software Platform Clients Value Proposition to REPAY’s Clients Accelerated payment cycle (ability to lend more / faster) through card processing Faster access to funds to help businesses with working capital 24 / 7 payment acceptance through “always open” omni-channel offering Direct software integrations into loan, dealer, and business management systems reduces operational complexity for client Improved regulatory compliance through fewer ACH returns 2 Pay Anywhere, Any Way, Any Time
REPAY Has Built a Leading Next-Gen Software Platform Businesses and Consumers Value Proposition to REPAY’s Clients’ End Customers Self-service capabilities through ability to pay anywhere, any way and any time, 24 / 7 Option to make real-time payments through use of card transactions Immediate feedback that payment has been processed Omni-channel payment methods (e.g. Web, Mobile, IVR, Text) Fewer ancillary charges (e.g. NSF fees) for borrowers through automatic recurring online debit card payments 2 Pay Anywhere, Any Way, Any Time
Key Software Integrations Accelerate Distribution REPAY leverages a vertically tiered sales strategy supplemented by software integrations to drive new client acquisitions Tier 3 (Direct Sales) $5MM+ Monthly Volume Tier 2 (Direct Sales) $1MM – $5MM Monthly Volume Tier 1 (Call Center) <$1MM Monthly Volume Sales Support Team NUMBER OF SOFTWARE INTEGRATION PARTNERS Sales Strategy / Distribution Model 3 55% CAGR Software Integrations
Attractive and Diverse Client Base Across Key Verticals REPAY’s platform provides significant value to >21,000(1) clients offering solutions across a variety of industry verticals offering solutions across a variety of industry verticals Healthcare Other ARM B2B Loan Repayment ~20% of card payment volume(2) One-stop shop B2B payments solutions provider, offering AP automation and B2B merchant acquiring solutions Integrations with ~85 leading ERP platforms, serving a highly diversified client base across a wide range of industry verticals Percentage of Card Payment Volume(2) B2B Deep domain expertise in compliance, underwriting and risk management Omni-channel payment options integrated into 100% of solution providers ARM Emerging software and payments platform in large and growing $420Bn(3) healthcare payments market Comprehensive, streamlined payments acceptance and communications solutions HEALTHCARE Expanding presence in nascent markets with increasing card penetration (i.e., energy) Best-in-class processing technology solutions for ISOs, acquirers and owned clients OTHER LOAN REPAYMENT 4 Management estimate, including TriSource, APS, Ventanex, cPayPlus, CPS Payments , BillingTree, Kontrol Payables and Payix as of 6/30/2022 As of 6/30/2022 Represents out-of-pocket payments to providers Market leader in personal loans, automotive loans and mortgage servicing Blue chip ISV partnerships and ~5,200(2) clients, including 225+(2) credit unions Recent expansions into adjacent Buy-Now-Pay-Later vertical as well as Canada
Demonstrated Ability to Acquire and Successfully Integrate Businesses Represents a significant opportunity to enhance organic growth in existing verticals and accelerate entry into new markets and services Extend Solution Set via New Capabilities New Vertical Expansion Deepen Presence in Existing Verticals Back-end transaction processing capabilities, which enhance M&A strategy Value-add complex exception processing capabilities Expansion into the Healthcare, Automotive, Receivables Management, B2B Acquiring, B2B Healthcare, Mortgage Servicing, B2B AP Automation, BNPL verticals Accelerates expansion into Automotive, Credit Union and Receivables Management verticals THEME Demonstrated ability to source, acquire and integrate various targets across different verticals Dedicated team to manage robust M&A pipeline ACQUISITIONS RATIONALE 5 2017 2019 2016 2017 * 2019 * 2020 2020 * * 2020 * 2020 * 2021 2021 * * 2021 * 2021 * 2021 * *Completed since becoming a public company *
*Majority of growth derived from further penetration of existing client base Multiple Levers to Continue to Drive Growth EXPAND USAGE AND INCREASE ADOPTION* ACQUIRE NEW CLIENTS IN EXISTING VERTICALS OPERATIONAL EFFICIENCIES FUTURE MARKET EXPANSION OPPORTUNITIES STRATEGIC M&A REPAY’s leading platform & attractive market opportunity position it to build on its record of robust growth & profitability EXECUTE ON EXISTING BUSINESS BROADEN ADDRESSABLE MARKET AND SOLUTIONS 5
Richard Thornburgh Senior Advisor, Corsair Bob Hartheimer Former Managing Director, Promontory Experienced Board with Deep Payments Expertise John Morris CEO & Co-Founder Shaler Alias President & Co-Founder William Jacobs Former SVP, Mastercard / Board Member, Global Payments and Green Dot Peter Kight Chairman, Founder of CheckFree / Former Vice Chairman, Fiserv Paul Garcia Former Chairman and CEO, Global Payments Maryann Goebel Former CIO, Fiserv 9-member board of directors comprised of industry veterans and influential leaders in the financial services and payment industries Emnet Rios CFO and COO, Digital Asset 6
3 REPAY Financial Overview
Financial Highlights Low volume attrition and low risk portfolio Differentiated technology platform & ecosystem Deeply integrated with customer base Recurring transaction / volume-based revenue 2021 ANNUAL CARD PAYMENT VOLUME $20.5B SOFTWARE INTEGRATIONS(1) 230 CASH FLOW CONVERSION(2) 76% HISTORICAL CARD PAYMENT VOLUME CAGR(3) 38% HISTORICAL GROSS PROFIT CAGR(3) 44% HISTORICAL ADJUSTED EBITDA CAGR(3) 41% REPAY’s Unique Model Translates Into A Highly Attractive Financial Profile As of 6/30/2022 2021A Cash Flow Conversion calculated as Adjusted EBITDA – Capex / Adjusted EBITDA CAGR is from 2019A-2021A
Total Card Payment Volume ($Bn) Total Revenue ($MM) Significant Volume and Revenue Growth REPAY has generated strong, consistent volume growth, resulting in ~$20.5Bn in annual card processing volume in 2021 REPAY’s revenue growth has been strong, resulting in 45% CAGR from 2019 to 2021 42% 42% 44% 27% YoY Growth 48% 35% YoY Growth 38% CAGR 45% CAGR
Gross Profit ($MM)(1) Adjusted EBITDA ($MM)(2) ...Translating into Accelerating Profitability Gross margins are improving due to a decrease in processing costs Highly scalable platform with attractive margins 75% 75% 73% 44% % Margin 41% CAGR 38% 43% % Margin 44% CAGR Gross profit represents total revenue less other costs of services See “Adjusted EBITDA Reconciliation” on slide 26
Adjusted EBITDA Reconciliation – Historical Note: Financials have been updated to match the Company’s restated financials in its Form 10-K for the year ended December 31, 2020. For the year ended December 31, 2021, reflects amortization of customer relationships, non-compete agreement, software, and channel relationship intangibles acquired through the Business Combination, and customer relationships, non-compete agreement, and software intangibles acquired through REPAY’s acquisitions of TriSource Solutions, APS Payments, Ventanex, cPayPlus, CPS Payments, BillingTree and Kontrol Payables. For the year ended December 31, 2020 reflects amortization of customer relationships, non-compete agreement, software, and channel relationship intangibles acquired through the Business Combination, and customer relationships, non-compete agreement, and software intangibles acquired through REPAY’s acquisitions of TriSource Solutions, APS Payments, Ventanex, cPayPlus and CPS. 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. For the year ended December 31, 2019, reflects amortization of client relationships intangibles acquired through Hawk Parent’s acquisitions and the recapitalization transaction in 2016 and the acquisition of TriSource Solutions and APS Payments. 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. Reflects write-offs of debt issuance costs relating to Hawk Parent’s term loans. Reflects realized loss of REPAY’s interest rate hedging arrangement which terminated in conjunction with the repayment of Term Loans. Reflects the mark-to-market fair value adjustments of the warrant liabilities. Reflects the changes in management’s estimates of future cash consideration to be paid in connection with prior acquisitions from the amount estimated as of the most recent balance sheet date. Reflects the changes in management’s estimates of the fair value of the liability relating to the Tax Receivable Agreement. Represents compensation expense associated with equity compensation plans, totaling $22,311,251 in the year ended December 31, 2021, and totaling $19,445,800 in the year ended December 31, 2020, and totaling $22,922,265 in the year ended December 31, 2019. Primarily consists of (i) during the year ended December 31, 2021, professional service fees and other costs incurred in connection with the acquisitions of Ventanex, cPayPlus, CPS Payments, BillingTree, Kontrol Payables and Payix, as well as professional service expenses related to the January 2021 equity and convertible notes offerings, and (ii) during the year ended December 31, 2020, professional service fees and other costs incurred in connection with the acquisition of CPS Payments, and additional transaction expenses incurred in connection with the Business Combination and the acquisitions of TriSource Solutions, APS Payments, Ventanex and cPayPlus, as well as professional service expenses related to the June 2020 and September 2020 equity offerings, and (iiI) during the year ended December 31, 2019, professional service fees and other costs in connection with the Business Combination, as well as the acquisitions of TriSource Solutions and APS Payments. Reflects management fees paid to Corsair Investments, L.P. pursuant to the management agreement, which terminated upon the completion of the Business Combination. Represents payments made to third-party recruiters in connection with a significant expansion of REPAY’s personnel, which REPAY expects will become more moderate in subsequent periods. Reflects franchise taxes and other non-income based taxes. Reflects 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 during the years ended December 31, 2021, 2020 and 2019. For the years ended December 31, 2021 and 2020, reflects extraordinary refunds to clients and other payments related to COVID-19. Additionally, in the year ended December 31, 2021, reflects non-cash rent expense and loss on disposal of fixed assets, and in the year ended December 31, 2020, reflects expenses incurred related to one-time accounting system and compensation plan implementation related to becoming a public company. For the year ended December 31, 2019, reflects expenses incurred related to other one-time legal and compliance matters, as well as a one-time credit issued to a customer which was not in the ordinary course of business. Represents fully discretionary charges incurred to restructure certain sales representatives’ commission arrangements, by making a one-time payment to the representative to buy out the right to receive future monthly commission payments associated with a portfolio of client contracts. The commission restructuring transactions are subject to negotiation and therefore do not follow a fixed structure, timetable or standard terms. Neither the Company nor the representatives are obligated to offer or accept such restructuring of commission arrangements. Beginning the quarter ended December 31, 2021, REPAY changed its method of calculating Adjusted EBITDA by removing the adjustment related to legacy commission restructuring charges. Does not include adjustments of $32.6 million for the year ended December 31, 2020, which were presented as pro forma adjustments in previously filed reports, for incremental depreciation and amortization recorded due to fair-value adjustments for Hawk Parent under ASC 805 as a result of Business Combination. ($MM) 2019A 2020A(15) 2021A Net Loss ($70.6) ($117.4) ($56.0) Interest Expense 9.1 14.4 3.7 Depreciation and Amortization(1) 30.0 60.8 89.7 Income Tax Benefit (5.0) (12.4) (30.7) EBITDA ($36.5) ($54.5) $6.6 Loss on extinguishment of debt(2) 1.4 – 5.9 Loss on termination of interest rate hedge(3) – – 9.1 Non-cash change in fair value of warrant liabilities(4) 15.3 70.8 – Non-cash change in fair value of contingent consideration(5) – (2.5) 5.8 Non-cash change in fair value of assets and liabilities(6) 1.6 12.4 14.1 Share-based compensation expense(7) 22.9 19.4 22.3 Transaction expenses(8) 40.1 10.9 19.3 Management fees(9) 0.2 – – Employee recruiting costs(10) 0.1 0.2 0.6 Other taxes(11) 0.2 0.4 1.0 Restructuring and other strategic initiative costs(12) 0.4 1.1 4.6 Other non-recurring charges(13) 0.2 1.2 3.9 Adjusted EBITDA, revised definition $45.9 $59.6 $93.2 Revised definition no longer adjusts for: Commission restructuring charges(14) 2.6 8.6 2.5 Adjusted EBITDA, previous definition $48.4 $68.2 $95.7
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