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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(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 November 9, 2023, Repay Holdings Corporation (the “Company”) issued a press release announcing the results of the Company’s operations for the quarter ended September 30, 2023.
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 November 9, 2023, 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 November 9, 2023 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: November 9, 2023 |
By: |
/s/ Timothy J. Murphy |
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Timothy J. Murphy |
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Chief Financial Officer |
REPAY Reports Third Quarter 2023 Financial Results
Raising Full Year 2023 Revenue Outlook
Gross Profit Growth of 3% in Q3 and 7% Year-to-Date
Normalized Organic Gross Profit Growth1 of 12% in Q3 and 13% Year-to-Date
ATLANTA, November 9, 2023 -- Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY” or the “Company”), a leading provider of vertically-integrated payment solutions, today reported financial results for its third quarter ended September 30, 2023.
Third Quarter 2023 Financial Highlights
(in $ millions) |
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Q3 2022 |
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Q4 2022 |
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Q1 2023 |
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Q2 2023 |
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Q3 2023 |
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YoY |
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Card payment volume |
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$ |
6,416.8 |
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$ |
6,611.8 |
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$ |
6,591.3 |
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$ |
6,254.4 |
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$ |
6,401.3 |
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0% |
Revenue |
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71.6 |
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72.7 |
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74.5 |
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71.8 |
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74.3 |
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4% |
Gross profit (1) |
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54.9 |
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57.8 |
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56.6 |
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54.9 |
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56.7 |
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3% |
Net income (loss) |
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5.4 |
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(8.2 |
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(27.9 |
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(5.3 |
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(6.5 |
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- |
Adjusted EBITDA (2) |
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31.7 |
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36.0 |
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31.2 |
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30.3 |
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31.9 |
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1% |
“REPAY delivered solid performance in the third quarter, with normalized organic revenue and gross profit growth1 of 11% and 12%, respectively,” said John Morris, CEO of REPAY. “We continued to see stable and resilient trends from our clients throughout the quarter. Our efforts in developing our go-to-market and implementation teams, as well as innovating on our payment technology, continue to be our top priorities. We remain excited about the future of REPAY as we strive to be a network to all networks.”
Third Quarter 2023 Business Highlights
The Company's achievements in the quarter, including those highlighted below, reinforce management's belief in the ability of the Company to drive durable and sustained growth across REPAY's diversified business model.
1 Normalized organic revenue growth, organic gross profit growth and normalized organic gross profit growth are non-GAAP financial measures. See “Non-GAAP Financial Measures” and the reconciliation to their most comparable GAAP measure provided below for additional information.
Segments
The Company reports its financial results based on two reportable segments.
Consumer Payments – The Consumer Payments segment provides payment processing solutions (including debit and credit card processing, Automated Clearing House (“ACH”) processing and other electronic payment acceptance solutions, as well as REPAY’s loan disbursement product) that enable its clients to collect payments and disburse funds to consumers and includes its clearing and settlement solutions (“RCS”). RCS is REPAY’s proprietary clearing and settlement platform through which it markets customizable payment processing programs to other ISOs and payment facilitators. The strategic vertical markets served by the Consumer Payments segment primarily include personal loans, automotive loans, receivables management, credit unions, mortgage servicing, consumer healthcare and diversified retail.
Business Payments – The Business Payments segment provides payment processing solutions (including accounts payable automation, debit and credit card processing, virtual credit card processing, ACH processing and other electronic payment acceptance solutions) that enable REPAY’s clients to collect or send payments to other businesses. The strategic vertical markets served within the Business Payments segment primarily include retail automotive, education, field services, governments and municipalities, healthcare, media, homeowner association management and hospitality.
Segment Card Payment Volume, Revenue, Gross Profit, and Gross Profit Margin
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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($ in thousand) |
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2023 |
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2022 |
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% Change |
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2023 |
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2022 |
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% Change |
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Card payment volume |
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Consumer Payments |
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$ |
5,338,250 |
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$ |
4,937,825 |
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8% |
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$ |
16,057,365 |
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$ |
15,146,967 |
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6% |
Business Payments |
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1,063,088 |
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1,479,002 |
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(28%) |
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3,189,640 |
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3,880,064 |
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(18%) |
Total card payment volume |
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$ |
6,401,338 |
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$ |
6,416,827 |
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0% |
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$ |
19,247,005 |
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$ |
19,027,031 |
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1% |
Revenue |
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Consumer Payments |
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$ |
68,720 |
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$ |
62,977 |
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9% |
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$ |
204,622 |
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$ |
183,890 |
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11% |
Business Payments |
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9,704 |
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11,440 |
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(15%) |
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28,170 |
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30,266 |
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(7%) |
Elimination of intersegment revenues |
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(4,104 |
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(2,862 |
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(12,152 |
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(7,602 |
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Total revenue |
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$ |
74,320 |
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$ |
71,555 |
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4% |
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$ |
220,640 |
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$ |
206,554 |
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7% |
Gross profit (1) |
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Consumer Payments |
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$ |
53,599 |
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$ |
49,724 |
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8% |
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$ |
159,929 |
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$ |
143,295 |
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12% |
Business Payments |
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7,188 |
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8,059 |
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(11%) |
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20,421 |
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20,931 |
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(2%) |
Elimination of intersegment revenues |
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(4,104 |
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(2,862 |
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(12,152 |
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(7,602 |
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Total gross profit |
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$ |
56,683 |
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$ |
54,921 |
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3% |
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$ |
168,198 |
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$ |
156,624 |
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7% |
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Total gross profit margin (2) |
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76% |
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77% |
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76% |
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76% |
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2023 Outlook Update
“We have solid momentum heading into the fourth quarter and are confident in the fundamentals of our business model. Based on the results from the first nine months of the year, as well as current trends, we are raising the midpoint of our 2023 revenue outlook,” said Tim Murphy, CFO of REPAY. “We expect adjusted free cash flow conversion to accelerate into 2024 as we realize the benefits from investments we've made in sales, product and technology over the past several years.”
REPAY now expects the following financial results for full year 2023, which replaces the previously provided outlook.
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Full Year 2023 Outlook |
Card Payment Volume |
$26.0 - 27.2 billion |
Revenue |
$286 - 292 million |
Gross Profit |
$218 - 228 million |
Adjusted EBITDA |
$122 - 130 million |
REPAY does not provide quantitative reconciliation of forward-looking, non-GAAP financial measures, such as forecasted 2023 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 a 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 third quarter 2023 financial results today, November 9, 2023 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 13741455. 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 business disposition, non-cash change in fair value of contingent consideration, non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation charges, transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges. Adjusted Net Income is a non-GAAP financial measure that represents net income prior to amortization of acquisition-related intangibles, as adjusted to add back certain charges deemed to not be part of normal operating expenses, loss on business disposition, non-cash charges and/or non-recurring charges, such as non-cash change in fair value of contingent consideration, non-cash impairment loss, non-cash change in fair value of
assets and liabilities, share-based compensation expense, transaction expenses, restructuring and other strategic initiative costs, other non-recurring charges, non-cash interest expense and net of tax effect associated with these adjustments. Adjusted Net Income is adjusted to exclude amortization of all acquisition-related intangibles as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Management believes that the adjustment of acquisition-related intangible amortization supplements GAAP financial measures because it allows for greater comparability of operating performance. Although REPAY excludes amortization from acquisition-related intangibles from its non-GAAP expenses, management believes that it is important for investors to understand that such intangibles were recorded as part of purchase accounting and contribute to revenue generation. Adjusted Net Income per share is a non-GAAP financial measure that represents Adjusted Net Income divided by the weighted average number of shares of Class A common stock outstanding (on an as-converted basis assuming conversion of the outstanding units exchangeable for shares of Class A common stock) for the three and nine months ended September 30, 2023 and 2022 (excluding shares subject to forfeiture). Normalized organic revenue growth is a non-GAAP financial measure that represents year-on-year revenue growth that excludes incremental revenue attributable to acquisitions, dispositions and REPAY’s media payments business related to the cyclical political media spending in the applicable prior period or any subsequent period. 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 and divestitures made in the applicable prior period or any subsequent period. Normalized organic gross profit growth is a non-GAAP financial measure that represents year-on-year organic gross profit growth that excludes incremental gross profit attributable to REPAY’s media payments business related to the cyclical political media spending in the applicable prior period or any subsequent period. Free Cash Flow and Adjusted Free Cash Flow are non-GAAP financial measures that represents net cash flow provided by operating activities less total capital expenditures, and Adjusted Free Cash Flow is further adjusted to add back certain charges deemed to not be part of normal operating expenses and/or non-recurring charges, such as transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges. REPAY believes that Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share, normalized organic revenue growth, organic gross profit growth, normalized organic gross profit growth, Free Cash Flow and Adjusted Free Cash Flow provide useful information to investors and others in understanding and evaluating its operating results in the same manner as management. However, these non-GAAP financial measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income, operating profit, net cash provided by operating activities, or any other operating performance measure calculated in accordance with GAAP. Using these non-GAAP financial measures to analyze REPAY’s business has material limitations because the calculations are based on the subjective determination of management regarding the nature and classification of events and circumstances that investors may find significant. In addition, although other companies in REPAY’s industry may report measures titled as the same or similar measures, such non-GAAP financial measures may be calculated differently from how REPAY calculates its non-GAAP financial measures, which reduces their overall usefulness as comparative measures. Because of these limitations, you should consider REPAY’s non-GAAP financial measures alongside other financial performance measures, including net income, net cash provided by operating activities and REPAY’s other financial results presented in accordance with GAAP.
Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, 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 2023 outlook update 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, 2022 and subsequent Form 10-Qs, 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 bank failures or other adverse events affecting financial institutions, inflationary pressures, general economic slowdown or recession; changes in the payment processing market in which REPAY competes, including with respect to its competitive landscape, technology evolution or regulatory changes; changes in the vertical markets that REPAY targets, including the regulatory environment applicable to REPAY’s clients; the ability to retain, develop and hire key personnel; risks relating to REPAY’s relationships within the payment ecosystem; risk that REPAY may not be able to execute its growth strategies, including identifying and executing acquisitions; risks relating to data security; changes in accounting policies applicable to REPAY; and the risk that REPAY may not be able to maintain effective internal controls.
Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance. All information set forth herein speaks only as of the date hereof in the case of information about REPAY or the date of such information in the case of information from persons other than REPAY, and REPAY disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication. Forecasts and estimates regarding REPAY’s industry and end markets are based on sources it believes to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part. Pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.
About REPAY
REPAY provides integrated payment processing solutions to verticals that have specific transaction processing needs. REPAY’s proprietary, integrated payment technology platform reduces the complexity of electronic payments for clients, while enhancing the overall experience for consumers and businesses.
Contacts
Investor Relations Contact for REPAY:
ir@repay.com
Media Relations Contact for REPAY:
Kristen Hoyman
(404) 637-1665
khoyman@repay.com
Condensed Consolidated Statement of Operations (Unaudited)
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Three Months ended September 30, |
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Nine Months ended September 30, |
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(in $ thousands, except per share data) |
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2023 |
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2022 |
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2023 |
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2022 |
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Revenue |
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$ |
74,320 |
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$ |
71,555 |
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$ |
220,640 |
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$ |
206,554 |
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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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17,637 |
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16,634 |
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52,442 |
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49,930 |
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Selling, general and administrative |
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35,279 |
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36,032 |
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111,974 |
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107,379 |
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Depreciation and amortization |
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26,523 |
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24,662 |
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79,146 |
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82,442 |
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Change in fair value of contingent consideration |
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— |
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(340 |
) |
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— |
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(4,290 |
) |
Loss on business disposition |
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— |
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— |
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10,027 |
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— |
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Total operating expenses |
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79,439 |
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76,988 |
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253,589 |
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235,461 |
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Loss from operations |
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(5,119 |
) |
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(5,433 |
) |
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(32,949 |
) |
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(28,907 |
) |
Other income (expense) |
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Interest (expense) income, net |
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(103 |
) |
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(1,100 |
) |
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(1,413 |
) |
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(3,128 |
) |
Change in fair value of tax receivable liability |
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(3,234 |
) |
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11,411 |
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(3,716 |
) |
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55,481 |
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Other (loss) income |
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(26 |
) |
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20 |
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(360 |
) |
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(126 |
) |
Total other income (expense) |
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(3,363 |
) |
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10,331 |
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(5,489 |
) |
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52,227 |
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Income (loss) before income tax benefit (expense) |
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(8,482 |
) |
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4,898 |
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(38,438 |
) |
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23,320 |
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Income tax benefit (expense) |
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1,998 |
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|
474 |
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(1,308 |
) |
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(6,414 |
) |
Net income (loss) |
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$ |
(6,484 |
) |
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$ |
5,372 |
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$ |
(39,746 |
) |
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$ |
16,906 |
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Net loss attributable to non-controlling interest |
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(316 |
) |
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(473 |
) |
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(2,543 |
) |
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(2,602 |
) |
Net income (loss) attributable to the Company |
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$ |
(6,168 |
) |
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$ |
5,845 |
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$ |
(37,203 |
) |
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$ |
19,508 |
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Weighted-average shares of Class A common stock outstanding - basic |
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91,160,415 |
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88,735,518 |
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89,658,318 |
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88,749,417 |
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Weighted-average shares of Class A common stock outstanding - diluted |
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91,160,415 |
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110,114,054 |
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89,658,318 |
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110,789,646 |
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Income (loss) per Class A share - basic |
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$ |
(0.07 |
) |
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$ |
0.07 |
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$ |
(0.41 |
) |
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$ |
0.22 |
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Income (loss) per Class A share - diluted |
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$ |
(0.07 |
) |
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$ |
0.05 |
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|
$ |
(0.41 |
) |
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$ |
0.18 |
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Condensed Consolidated Balance Sheets
(in $ thousands) |
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September 30, 2023 (Unaudited) |
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December 31, 2022 |
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Assets |
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Cash and cash equivalents |
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$ |
117,730 |
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$ |
64,895 |
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Accounts receivable |
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36,889 |
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|
33,544 |
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Prepaid expenses and other |
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|
13,984 |
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|
|
18,213 |
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Total current assets |
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|
168,603 |
|
|
|
116,652 |
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|
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Property, plant and equipment, net |
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|
3,557 |
|
|
|
4,375 |
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Restricted cash |
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|
23,660 |
|
|
|
28,668 |
|
Intangible assets, net |
|
|
444,822 |
|
|
|
500,575 |
|
Goodwill |
|
|
792,543 |
|
|
|
827,813 |
|
Operating lease right-of-use assets, net |
|
|
8,961 |
|
|
|
9,847 |
|
Deferred tax assets |
|
|
138,121 |
|
|
|
136,370 |
|
Other assets |
|
|
2,500 |
|
|
|
2,500 |
|
Total noncurrent assets |
|
|
1,414,164 |
|
|
|
1,510,148 |
|
Total assets |
|
$ |
1,582,767 |
|
|
$ |
1,626,800 |
|
|
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
20,271 |
|
|
$ |
21,781 |
|
Related party payable |
|
|
— |
|
|
|
1,000 |
|
Accrued expenses |
|
|
27,473 |
|
|
|
29,016 |
|
Current operating lease liabilities |
|
|
1,786 |
|
|
|
2,263 |
|
Current tax receivable agreement |
|
|
— |
|
|
|
24,454 |
|
Other current liabilities |
|
|
1,603 |
|
|
|
3,593 |
|
Total current liabilities |
|
|
51,133 |
|
|
|
82,107 |
|
|
|
|
|
|
|
|
||
Long-term debt |
|
|
433,454 |
|
|
|
451,319 |
|
Noncurrent operating lease liabilities |
|
|
8,054 |
|
|
|
8,295 |
|
Tax receivable agreement, net of current portion |
|
|
185,901 |
|
|
|
154,673 |
|
Other liabilities |
|
|
1,879 |
|
|
|
2,113 |
|
Total noncurrent liabilities |
|
|
629,288 |
|
|
|
616,400 |
|
Total liabilities |
|
$ |
680,421 |
|
|
$ |
698,507 |
|
|
|
|
|
|
|
|
||
Commitments and contingencies |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Stockholders' equity |
|
|
|
|
|
|
||
Class A common stock, $0.0001 par value; 2,000,000,000 shares authorized; 92,014,648 issued and 90,936,507 outstanding as of September 30, 2023; 89,354,754 issued and 88,276,613 outstanding as of December 31, 2022 |
|
|
9 |
|
|
|
9 |
|
Class V common stock, $0.0001 par value; 1,000 shares authorized and 100 shares issued and outstanding as of September 30, 2023 and December 31, 2022 |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
1,140,588 |
|
|
|
1,117,736 |
|
Treasury stock, 1,078,141 shares as of September 30, 2023 and December 31, 2022 |
|
|
(10,000 |
) |
|
|
(10,000 |
) |
Accumulated other comprehensive loss |
|
|
(3 |
) |
|
|
(3 |
) |
Accumulated deficit |
|
|
(250,383 |
) |
|
|
(213,180 |
) |
Total Repay stockholders' equity |
|
$ |
880,211 |
|
|
$ |
894,562 |
|
Non-controlling interests |
|
|
22,135 |
|
|
|
33,731 |
|
Total equity |
|
|
902,346 |
|
|
|
928,293 |
|
Total liabilities and equity |
|
$ |
1,582,767 |
|
|
$ |
1,626,800 |
|
|
|
|
|
|
|
|
||
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
Nine Months Ended September 30, |
|
|||||
(in $ thousands) |
|
2023 |
|
|
2022 |
|
||
Cash flows from operating activities |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
(39,746 |
) |
|
$ |
16,906 |
|
|
|
|
|
|
|
|
||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
79,146 |
|
|
|
82,442 |
|
Stock based compensation |
|
|
16,256 |
|
|
|
14,265 |
|
Amortization of debt issuance costs |
|
|
2,136 |
|
|
|
2,123 |
|
Loss on business disposition |
|
|
10,027 |
|
|
|
— |
|
Other loss |
|
|
273 |
|
|
|
154 |
|
Fair value change in tax receivable agreement liability |
|
|
3,716 |
|
|
|
(55,481 |
) |
Fair value change in contingent consideration |
|
|
— |
|
|
|
(4,290 |
) |
Payment of contingent consideration liability in excess of acquisition-date fair value |
|
|
— |
|
|
|
(8,896 |
) |
Deferred tax expense |
|
|
1,308 |
|
|
|
6,414 |
|
Change in accounts receivable |
|
|
(4,857 |
) |
|
|
(246 |
) |
Change in prepaid expenses and other |
|
|
4,161 |
|
|
|
(3,056 |
) |
Change in operating lease ROU assets |
|
|
389 |
|
|
|
(275 |
) |
Change in accounts payable |
|
|
(1,948 |
) |
|
|
3,168 |
|
Change in related party payable |
|
|
— |
|
|
|
(257 |
) |
Change in accrued expenses and other |
|
|
(1,544 |
) |
|
|
(2,200 |
) |
Change in operating lease liabilities |
|
|
(424 |
) |
|
|
394 |
|
Change in other liabilities |
|
|
(142 |
) |
|
|
1,227 |
|
Net cash provided by operating activities |
|
|
68,751 |
|
|
|
52,392 |
|
|
|
|
|
|
|
|
||
Cash flows from investing activities |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(1,062 |
) |
|
|
(2,623 |
) |
Capitalized software development costs |
|
|
(36,678 |
) |
|
|
(26,232 |
) |
Proceeds from sale of business, net of cash retained |
|
|
40,273 |
|
|
|
— |
|
Net cash provided by (used in) investing activities |
|
|
2,533 |
|
|
|
(28,855 |
) |
|
|
|
|
|
|
|
||
Cash flows from financing activities |
|
|
|
|
|
|
||
Payments on long-term debt |
|
|
(20,000 |
) |
|
|
— |
|
Shares repurchased under Incentive Plan and ESPP |
|
|
(1,510 |
) |
|
|
(1,981 |
) |
Treasury shares repurchased |
|
|
— |
|
|
|
(6,831 |
) |
Distributions to Members |
|
|
(947 |
) |
|
|
(488 |
) |
Payment of contingent consideration liability up to acquisition-date fair value |
|
|
(1,000 |
) |
|
|
(3,851 |
) |
Net cash used in financing activities |
|
|
(23,457 |
) |
|
|
(13,151 |
) |
|
|
|
|
|
|
|
||
Increase in cash, cash equivalents and restricted cash |
|
|
47,827 |
|
|
|
10,386 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
$ |
93,563 |
|
|
$ |
76,340 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
141,390 |
|
|
$ |
86,726 |
|
|
|
|
|
|
|
|
||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
|
|
|
|
|
|
||
Cash paid during the year for: |
|
|
|
|
|
|
||
Interest |
|
$ |
840 |
|
|
$ |
1,047 |
|
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA
For the Three Months Ended September 30, 2023 and 2022
(Unaudited)
|
|
|
|
|
|
|
||
|
Three Months ended September 30, |
|
|
|||||
(in $ thousands) |
2023 |
|
|
2022 |
|
|
||
Revenue |
$ |
74,320 |
|
|
$ |
71,555 |
|
|
Operating expenses |
|
|
|
|
|
|
||
Costs of services (exclusive of depreciation and amortization shown separately below) |
$ |
17,637 |
|
|
$ |
16,634 |
|
|
Selling, general and administrative |
|
35,279 |
|
|
|
36,032 |
|
|
Depreciation and amortization |
|
26,523 |
|
|
|
24,662 |
|
|
Change in fair value of contingent consideration |
|
— |
|
|
|
(340 |
) |
|
Total operating expenses |
$ |
79,439 |
|
|
$ |
76,988 |
|
|
Loss from operations |
$ |
(5,119 |
) |
|
$ |
(5,433 |
) |
|
Other income (expense) |
|
|
|
|
|
|
||
Interest (expense) income, net |
|
(103 |
) |
|
|
(1,100 |
) |
|
Change in fair value of tax receivable liability |
|
(3,234 |
) |
|
|
11,411 |
|
|
Other (loss) income |
|
(26 |
) |
|
|
20 |
|
|
Total other income (expense) |
|
(3,363 |
) |
|
|
10,331 |
|
|
Income (loss) before income tax benefit (expense) |
|
(8,482 |
) |
|
|
4,898 |
|
|
Income tax benefit (expense) |
|
1,998 |
|
|
|
474 |
|
|
Net income (loss) |
$ |
(6,484 |
) |
|
$ |
5,372 |
|
|
|
|
|
|
|
|
|
||
Add: |
|
|
|
|
|
|
||
Interest expense (income), net |
|
103 |
|
|
|
1,100 |
|
|
Depreciation and amortization (a) |
|
26,523 |
|
|
|
24,662 |
|
|
Income tax (benefit) expense |
|
(1,998 |
) |
|
|
(474 |
) |
|
EBITDA |
$ |
18,144 |
|
|
$ |
30,660 |
|
|
|
|
|
|
|
|
|
||
Non-cash change in fair value of contingent consideration (b) |
|
— |
|
|
|
(340 |
) |
|
Non-cash change in fair value of assets and liabilities (c) |
|
3,234 |
|
|
|
(11,411 |
) |
|
Share-based compensation expense (d) |
|
5,686 |
|
|
|
5,250 |
|
|
Transaction expenses (e) |
|
812 |
|
|
|
4,117 |
|
|
Restructuring and other strategic initiative costs (f) |
|
3,084 |
|
|
|
1,484 |
|
|
Other non-recurring charges (g) |
|
894 |
|
|
|
1,903 |
|
|
Adjusted EBITDA |
$ |
31,854 |
|
|
$ |
31,663 |
|
|
|
|
|
|
|
|
|
||
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA
For the Nine Months Ended September 30, 2023 and 2022
(Unaudited)
|
Nine Months ended September 30, |
|
|
|||||
(in $ thousands) |
2023 |
|
|
2022 |
|
|
||
Revenue |
$ |
220,640 |
|
|
$ |
206,554 |
|
|
Operating expenses |
|
|
|
|
|
|
||
Costs of services (exclusive of depreciation and amortization shown separately below) |
$ |
52,442 |
|
|
$ |
49,930 |
|
|
Selling, general and administrative |
|
111,974 |
|
|
|
107,379 |
|
|
Depreciation and amortization |
|
79,146 |
|
|
|
82,442 |
|
|
Change in fair value of contingent consideration |
|
— |
|
|
|
(4,290 |
) |
|
Loss on business disposition |
|
10,027 |
|
|
|
— |
|
|
Total operating expenses |
$ |
253,589 |
|
|
$ |
235,461 |
|
|
Loss from operations |
$ |
(32,949 |
) |
|
$ |
(28,907 |
) |
|
Other income (expense) |
|
|
|
|
|
|
||
Interest (expense) income, net |
|
(1,413 |
) |
|
|
(3,128 |
) |
|
Change in fair value of tax receivable liability |
|
(3,716 |
) |
|
|
55,481 |
|
|
Other (loss) income |
|
(360 |
) |
|
|
(126 |
) |
|
Total other income (expense) |
|
(5,489 |
) |
|
|
52,227 |
|
|
Income (loss) before income tax benefit (expense) |
|
(38,438 |
) |
|
|
23,320 |
|
|
Income tax benefit (expense) |
|
(1,308 |
) |
|
|
(6,414 |
) |
|
Net income (loss) |
$ |
(39,746 |
) |
|
$ |
16,906 |
|
|
|
|
|
|
|
|
|
||
Add: |
|
|
|
|
|
|
||
Interest expense (income), net |
|
1,413 |
|
|
|
3,128 |
|
|
Depreciation and amortization (a) |
|
79,146 |
|
|
|
82,442 |
|
|
Income tax (benefit) expense |
|
1,308 |
|
|
|
6,414 |
|
|
EBITDA |
$ |
42,121 |
|
|
$ |
108,890 |
|
|
|
|
|
|
|
|
|
||
Loss on business disposition (h) |
|
10,027 |
|
|
|
— |
|
|
Non-cash change in fair value of contingent consideration (b) |
|
— |
|
|
|
(4,290 |
) |
|
Non-cash impairment loss (i) |
|
50 |
|
|
|
|
|
|
Non-cash change in fair value of assets and liabilities (c) |
|
3,716 |
|
|
|
(55,481 |
) |
|
Share-based compensation expense (d) |
|
16,257 |
|
|
|
14,542 |
|
|
Transaction expenses (e) |
|
7,602 |
|
|
|
16,116 |
|
|
Restructuring and other strategic initiative costs (f) |
|
8,536 |
|
|
|
4,165 |
|
|
Other non-recurring charges (g) |
|
5,008 |
|
|
|
4,671 |
|
|
Adjusted EBITDA |
$ |
93,317 |
|
|
$ |
88,613 |
|
|
|
|
|
|
|
|
|
||
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income
For the Three Months Ended September 30, 2023 and 2022
(Unaudited)
|
Three Months ended September 30, |
|
|
|||||
(in $ thousands) |
2023 |
|
|
2022 |
|
|
||
Revenue |
$ |
74,320 |
|
|
$ |
71,555 |
|
|
Operating expenses |
|
|
|
|
|
|
||
Costs of services (exclusive of depreciation and amortization shown separately below) |
$ |
17,637 |
|
|
$ |
16,634 |
|
|
Selling, general and administrative |
|
35,279 |
|
|
|
36,032 |
|
|
Depreciation and amortization |
|
26,523 |
|
|
|
24,662 |
|
|
Change in fair value of contingent consideration |
|
— |
|
|
|
(340 |
) |
|
Total operating expenses |
$ |
79,439 |
|
|
$ |
76,988 |
|
|
Loss from operations |
$ |
(5,119 |
) |
|
$ |
(5,433 |
) |
|
Interest (expense) income, net |
|
(103 |
) |
|
|
(1,100 |
) |
|
Change in fair value of tax receivable liability |
|
(3,234 |
) |
|
|
11,411 |
|
|
Other (loss) income |
|
(26 |
) |
|
|
20 |
|
|
Total other income (expense) |
|
(3,363 |
) |
|
|
10,331 |
|
|
Income (loss) before income tax benefit (expense) |
|
(8,482 |
) |
|
|
4,898 |
|
|
Income tax benefit (expense) |
|
1,998 |
|
|
|
474 |
|
|
Net income (loss) |
$ |
(6,484 |
) |
|
$ |
5,372 |
|
|
|
|
|
|
|
|
|
||
Add: |
|
|
|
|
|
|
||
Amortization of acquisition-related intangibles (j) |
|
19,786 |
|
|
|
20,847 |
|
|
Non-cash change in fair value of contingent consideration (b) |
|
— |
|
|
|
(340 |
) |
|
Non-cash change in fair value of assets and liabilities (c) |
|
3,234 |
|
|
|
(11,411 |
) |
|
Share-based compensation expense (d) |
|
5,686 |
|
|
|
5,250 |
|
|
Transaction expenses (e) |
|
812 |
|
|
|
4,117 |
|
|
Restructuring and other strategic initiative costs (f) |
|
3,084 |
|
|
|
1,484 |
|
|
Other non-recurring charges (g) |
|
894 |
|
|
|
1,903 |
|
|
Non-cash interest expense (k) |
|
712 |
|
|
|
712 |
|
|
Pro forma taxes at effective rate (l) |
|
(7,828 |
) |
|
|
(5,152 |
) |
|
Adjusted Net Income |
$ |
19,896 |
|
|
$ |
22,782 |
|
|
|
|
|
|
|
|
|
||
Shares of Class A common stock outstanding (on an as-converted basis) (m) |
|
97,052,574 |
|
|
|
96,618,566 |
|
|
Adjusted Net Income per share |
$ |
0.21 |
|
|
$ |
0.24 |
|
|
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income
For the Nine Months Ended September 30, 2023 and 2022
(Unaudited)
|
Nine Months ended September 30, |
|
|
|||||
(in $ thousands) |
2023 |
|
|
2022 |
|
|
||
Revenue |
$ |
220,640 |
|
|
$ |
206,554 |
|
|
Operating expenses |
|
|
|
|
|
|
||
Costs of services (exclusive of depreciation and amortization shown separately below) |
$ |
52,442 |
|
|
$ |
49,930 |
|
|
Selling, general and administrative |
|
111,974 |
|
|
|
107,379 |
|
|
Depreciation and amortization |
|
79,146 |
|
|
|
82,442 |
|
|
Change in fair value of contingent consideration |
|
— |
|
|
|
(4,290 |
) |
|
Loss on business disposition |
|
10,027 |
|
|
|
— |
|
|
Total operating expenses |
$ |
253,589 |
|
|
$ |
235,461 |
|
|
Loss from operations |
$ |
(32,949 |
) |
|
$ |
(28,907 |
) |
|
Other expenses |
|
|
|
|
|
|
||
Interest (expense) income, net |
|
(1,413 |
) |
|
|
(3,128 |
) |
|
Change in fair value of tax receivable liability |
|
(3,716 |
) |
|
|
55,481 |
|
|
Other income |
|
— |
|
|
|
— |
|
|
Other (loss) income |
|
(360 |
) |
|
|
(126 |
) |
|
Total other income (expense) |
|
(5,489 |
) |
|
|
52,227 |
|
|
Income (loss) before income tax benefit (expense) |
|
(38,438 |
) |
|
|
23,320 |
|
|
Income tax benefit (expense) |
|
(1,308 |
) |
|
|
(6,414 |
) |
|
Net income (loss) |
$ |
(39,746 |
) |
|
$ |
16,906 |
|
|
|
|
|
|
|
|
|
||
Add: |
|
|
|
|
|
|
||
Amortization of acquisition-related intangibles(j) |
|
60,673 |
|
|
|
69,924 |
|
|
Loss on business disposition (h) |
|
10,027 |
|
|
|
— |
|
|
Non-cash change in fair value of contingent consideration (b) |
|
— |
|
|
|
(4,290 |
) |
|
Non-cash impairment loss (i) |
|
50 |
|
|
|
— |
|
|
Non-cash change in fair value of assets and liabilities (c) |
|
3,716 |
|
|
|
(55,481 |
) |
|
Share-based compensation expense (d) |
|
16,257 |
|
|
|
14,542 |
|
|
Transaction expenses (e) |
|
7,602 |
|
|
|
16,116 |
|
|
Restructuring and other strategic initiative costs (f) |
|
8,536 |
|
|
|
4,165 |
|
|
Other non-recurring charges (g) |
|
5,008 |
|
|
|
4,671 |
|
|
Non-cash interest expense (k) |
|
2,136 |
|
|
|
2,123 |
|
|
Pro forma taxes at effective rate (l) |
|
(15,658 |
) |
|
|
(10,714 |
) |
|
Adjusted Net Income |
$ |
58,601 |
|
|
$ |
57,962 |
|
|
|
|
|
|
|
|
|
||
Shares of Class A common stock outstanding (on an as-converted basis) (m) |
|
96,778,735 |
|
|
|
96,646,974 |
|
|
Adjusted Net Income per share |
$ |
0.61 |
|
|
$ |
0.60 |
|
|
Reconciliation of Operating Cash Flow to Free Cash Flow and Adjusted Free Cash Flow
For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited)
|
|
Three Months ended September 30, |
|
|
Nine Months ended September 30, |
|
||||||||||
(in $ thousands) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net cash provided by operating activities |
|
$ |
27,967 |
|
|
$ |
25,332 |
|
|
$ |
68,751 |
|
|
$ |
52,392 |
|
Capital expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash paid for property and equipment |
|
|
(948 |
) |
|
|
(799 |
) |
|
|
(1,062 |
) |
|
|
(2,623 |
) |
Cash paid for intangible assets (n) |
|
|
(13,078 |
) |
|
|
(8,657 |
) |
|
|
(36,678 |
) |
|
|
(23,482 |
) |
Total capital expenditures |
|
|
(14,026 |
) |
|
|
(9,456 |
) |
|
|
(37,740 |
) |
|
|
(26,105 |
) |
Free cash flow |
|
$ |
13,941 |
|
|
$ |
15,876 |
|
|
$ |
31,011 |
|
|
$ |
26,287 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Transaction expenses (e) |
|
|
812 |
|
|
|
4,117 |
|
|
|
7,602 |
|
|
|
16,116 |
|
Restructuring and other strategic initiative costs (f) |
|
|
3,084 |
|
|
|
1,484 |
|
|
|
8,536 |
|
|
|
4,165 |
|
Other non-recurring charges (g) |
|
|
894 |
|
|
|
1,903 |
|
|
|
5,008 |
|
|
|
4,671 |
|
Adjusted free cash flow |
|
$ |
18,731 |
|
|
$ |
23,380 |
|
|
$ |
52,157 |
|
|
$ |
51,239 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reconciliation of Revenue Growth to Organic Revenue Growth and Normalized Organic Revenue Growth
For the Year-over-Year Change Between the Three Months Ended September 30, 2023 and 2022
(Unaudited)
|
|
Q3 YoY Change |
|
|
|
Total Revenue growth |
|
|
4 |
% |
|
Less: Growth from acquisitions and dispositions |
|
|
(4 |
%) |
|
Organic revenue growth (o) |
|
|
8 |
% |
|
Less: Growth from contributions related to political media |
|
|
(3 |
%) |
|
Normalized organic revenue growth (p) |
|
|
11 |
% |
|
Reconciliation of Gross Profit Growth to Organic Gross Profit Growth and Normalized Organic Gross Profit Growth by Segment
For the Year-over-Year Change Between the Three Months Ended September 30, 2023 and 2022
(Unaudited)
|
|
Consumer Payments |
|
|
Business Payments |
|
|
Total |
|
|
|||
Gross profit growth |
|
|
8 |
% |
|
|
(11 |
%) |
|
|
3 |
% |
|
Less: Growth from acquisitions and dispositions |
|
|
(6 |
%) |
|
|
— |
|
|
|
(6 |
%) |
|
Organic gross profit growth (q) |
|
|
14 |
% |
|
|
(11 |
%) |
|
|
9 |
% |
|
Less: Growth from contributions related to political media |
|
|
— |
|
|
|
(24 |
%) |
|
|
(3 |
%) |
|
Normalized organic gross profit growth (r) |
|
|
14 |
% |
|
|
13 |
% |
|
|
12 |
% |
|
Reconciliation of Gross Profit Growth to Organic Gross Profit Growth and Normalized Organic Gross Profit Growth
For the Year-over-Year Change Between the Nine Months Ended September 30, 2023 and 2022
(Unaudited)
|
|
Q3 Year-to-Date YoY Change |
|
|
|
Gross profit growth |
|
|
7 |
% |
|
Less: Growth from acquisitions and dispositions |
|
|
(4 |
%) |
|
Organic gross profit growth (q) |
|
|
11 |
% |
|
Less: Growth from contributions related to political media |
|
|
(2 |
%) |
|
Normalized organic gross profit growth (r) |
|
|
13 |
% |
|
|
|
Three Months ended September 30, |
|
|
Nine Months ended September 30, |
|
||||||||||
(in $ thousands) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Acquisition-related intangibles |
|
$ |
19,786 |
|
|
$ |
20,847 |
|
|
$ |
60,673 |
|
|
$ |
69,924 |
|
Software |
|
|
6,391 |
|
|
|
3,209 |
|
|
|
16,639 |
|
|
|
10,855 |
|
Amortization |
|
$ |
26,177 |
|
|
$ |
24,056 |
|
|
$ |
77,312 |
|
|
$ |
80,779 |
|
Depreciation |
|
|
346 |
|
|
|
606 |
|
|
|
1,834 |
|
|
|
1,663 |
|
Total Depreciation and amortization (1) |
|
$ |
26,523 |
|
|
$ |
24,662 |
|
|
$ |
79,146 |
|
|
$ |
82,442 |
|
|
|
Three Months ended September 30, |
|
Nine Months ended September 30, |
||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Weighted average shares of Class A common stock outstanding - basic |
|
91,160,415 |
|
88,735,518 |
|
89,658,318 |
|
88,749,417 |
Add: Non-controlling interests |
|
5,892,159 |
|
7,883,048 |
|
7,120,417 |
|
7,897,557 |
Shares of Class A common stock outstanding (on an as-converted basis) |
|
97,052,574 |
|
96,618,566 |
|
96,778,735 |
|
96,646,974 |
Q3 2023 Earnings Supplement November 2023 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. On July 11, 2019, Thunder Bridge Acquisition Ltd. (“Thunder Bridge”) and Hawk Parent Holdings LLC (“Hawk Parent”) completed their previously announced business combination under which Thunder Bridge acquired Hawk Parent, upon which Thunder Bridge changed its name to Repay Holdings Corporation. 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 2023 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, 2022 and subsequent Form 10-Qs, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: exposure to economic conditions and political risk affecting the consumer loan market, the receivables management industry and consumer and commercial spending, including bank failures or other adverse events affecting financial institutions, inflationary pressures, general economic slowdown or recession; changes in the payment processing market in which REPAY competes, including with respect to its competitive landscape, technology evolution or regulatory changes; changes in the vertical markets that REPAY targets, including the regulatory environment applicable to REPAY’s clients; the ability to retain, develop and hire key personnel; risks relating to REPAY’s relationships within the payment ecosystem; risk that REPAY may not be able to execute its growth strategies, including identifying and executing acquisitions; risks relating to data security; changes in accounting policies applicable to REPAY; and the risk that REPAY may not be able to maintain effective internal controls. Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance. All information set forth herein speaks only as of the date hereof in the case of information about REPAY or the date of such information in the case of information from persons other than REPAY, and REPAY disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this 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 business disposition, 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, restructuring and other strategic initiative costs and other non-recurring charges. Adjusted EBITDA margin is a non-GAAP financial measure that represents Adjusted EBITDA divided by GAAP revenue. 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 business disposition, 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, 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. Each of “organic card payment volume growth,” “organic revenue growth,” and “organic gross profit (GP) growth” is a non-GAAP financial measure that represents the percentage change in the applicable metric for a fiscal period over the comparable prior fiscal period, exclusive of any incremental amount attributable to acquisitions or divestitures made in the comparable prior fiscal period or any subsequent fiscal period through the applicable current fiscal period. Any financial measure (whether GAAP or non-GAAP) that is modified by “excl. political media” or “normalized” (such as Normalized Organic GP Growth) is a non-GAAP financial measure that measures a defined growth rate exclusive of the estimated contribution from political media clients in the prior corresponding period. Free Cash Flow and Adjusted Free Cash Flow are non-GAAP financial measures that represent net cash flow provided by operating activities less total capital expenditures, and Adjusted Free Cash Flow is further adjusted to add back certain charges deemed to not be part of normal operating expenses and/or non-recurring charges, such as transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges. REPAY believes that each of the non-GAAP financial measures referenced in this paragraph provide useful information to investors and others in understanding and evaluating its operating results in the same manner as management. However, these non-GAAP financial measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income, operating profit, 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 with the same or similar description, 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 each of the non-GAAP financial measures referenced in this paragraph 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 profitable growth in 2023 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
Third Quarter 2023 Financial Highlights Gross profit represents revenue less costs of services Represents normalized organic growth (a non-GAAP financial measure) for each applicable metric. Normalized organic growth represents organic growth (which, for this period comparison, reflects the Blue Cow Software divestiture), exclusive of the estimated calculation from political media in 2022. See slide 1 under “Non-GAAP Financial Measures.” See slides 28 and 29 for reconciliation Adjusted EBITDA is a non-GAAP financial measure. See slide 1 under “Non-GAAP Financial Measures.” See slide 24 for reconciliation. Adjusted EBITDA margin represents adjusted EBITDA / revenue CARD PAYMENT VOLUME $6.4bn (+7% organic, excl. political media)(2) REVENUE ADJUSTED EBITDA(3) REPAY’s Unique Model Translates Into a Highly Attractive Financial Profile (Represents YoY Growth) $74.3MM (+11% organic, excl. political media)(2) GROSS PROFIT(1) $56.7MM (+12% organic, excl. political media)(2) $31.9MM 43% margin
Financial Update – Q3 2023 ($MM) Card Payment Volume Gross Profit Adjusted EBITDA Take rate represents revenue / card payment volume Gross profit margin represents gross profit / revenue Adjusted EBITDA margin represents adjusted EBITDA / revenue 77% 76% % Margin (2) 44% 43% % Margin (3) 1.12% 1.16% Take Rate (1) 12% y/y organic growth, excl. political media 7% y/y organic growth, excl. political media
Growth by Segment – Q3 2023 ($MM) LTM as of 9/30/2023 Includes the impact from Intercompany eliminations Gross Profit Margin 76.8% 76.3% 11% y/y organic, excl. political media Take Rate 1.12% 1.16% Percentage of Card Payment Volume(1) ~80% Consumer Payments Business Payments Total Company (2) Organic GP growth, excl. political media 14% 13% 12% ~20% 12% y/y organic, excl. political media
Q3 2023 Gross Profit Bridge ($MM) New GP Dollars Political media impact Divestiture impact Q3 2023 Gross Profit growth 3% Divestiture impact (6%) Organic Gross Profit Growth (1) 9% Political media impact (3%) Normalized Organic GP Growth (2) 12% Organic gross profit (or GP) growth is a non-GAAP financial measure that represents the percentage change in gross profit for a fiscal period over the comparable prior fiscal period, exclusive of any incremental gross profit attributable to acquisitions or divestitures made in the comparable prior fiscal period or any subsequent fiscal period through the applicable current fiscal period. See slide 1 under “Non-GAAP Financial Measures” Normalized organic GP growth is a non-GAAP financial measure that represents organic gross profit growth (which, for this period comparison, reflects the Blue Cow Software divestiture), exclusive of the estimated gross profit calculation from political media in Q3 2022. See slide 1 under “Non-GAAP Financial Measures”
Consumer Payments Results – Q3 2023 ($MM) Key Business Highlights Strength across personal loans, credit unions, and mortgage servicing Large enterprise clients are adopting more payment channels and modalities Take rates continued to benefit from our non-card volume-based businesses Executing on integration refreshes to further penetrate software partnerships, which leads to confidence in our sales pipeline Gross Profit Margin 79.0% 78.0% Take Rate 1.28% 1.29% 14% y/y organic growth (1) (9% y/y growth, as reported) 14% y/y organic growth (1) (8% y/y growth, as reported) Organic growth is a non-GAAP financial measure that excludes the revenue and gross profit attributable to Blue Cow Software in Q3 2022, respectively. See slide 1 under “Non-GAAP Financial Measures” and slide 29 for reconciliation
Strong sales pipeline within healthcare, property management, auto, and municipality verticals via direct sales and new / refreshed integrations Accelerated our AP Supplier Network to over 233,000 suppliers Gross Profit growth impacted by lapping political media Sustained momentum of teens y/y growth, excluding political media GP margins benefited from processing costs optimization and automation initiatives Business Payments Results – Q3 2023 ($MM) Key Business Highlights Gross Profit Margin 70.4% 74.1% Take Rate 0.77% 0.91% Business Payments revenue and gross profits excl. political media is a non-GAAP financial measure. This represents Business Payments revenue and gross profit minus the estimated contributions related to political media in Q3 2022, respectively. See slide 29 for reconciliation 1% y/y growth, excl. political media (1) 13% y/y growth, excl. political media (1) (-15% y/y growth, as reported) (-11% y/y growth, as reported)
Calculated using LTM September 2023 adjusted EBITDA, excluding estimated contribution from Blue Cow Focused on Maintaining Significant Liquidity Preserve liquidity and profitability through: Hiring focused on revenue generating / supporting roles Limited discretionary expenses Negotiations with vendors Business continues to show high cash flow conversion Continued investments in organic growth Committed to Prudently Managing Leverage Total Outstanding Debt comprised of 0% coupon on $440 million Convertible Note with 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) Paid down $20 million balance on February 28, 2023 Leverage Total Debt $440 MM Cash on Hand $118 MM Net Debt $322 MM Net Leverage(1) 2.5x Liquidity Cash on Hand $118 MM Revolver Capacity $185 MM Total Liquidity $303 MM Strong Liquidity Position as of September 30, 2023
Updated FY 2023 Outlook REPAY updates its previously provided guidance for full year 2023, as shown below CARD PAYMENT VOLUME REVENUE GROSS PROFIT ADJUSTED EBITDA $26.0 – $27.2Bn $286 – $292MM $218 – $228MM $122 – $130MM ~44% margins Note: REPAY does not provide quantitative reconciliation of forward-looking, non-GAAP financial measures such as forecasted Organic GP Growth, Normalized Organic GP Growth, and 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 (Prior $280-$288mm) 6% - 11% Organic GP Growth 9% - 14% Normalized Organic GP Growth (Prior ~45% margins)
FY 2023 Gross Profit Outlook Bridge ($MM) Blue Cow divestiture Existing Client Growth (3) Political media impact $218 – $228 New Client Growth (3) Q1 Reported Q2 Reported Q3 Reported FY 2023 Outlook Gross Profit Growth 11% 8% 3% 2% - 6% Organic GP Growth(1) 13% 12% 9% 6% - 11% Normalized Organic GP Growth(2) 13% 14% 12% 9% - 14% Organic gross profit (or GP) growth is a non-GAAP financial measure that represents the percentage change in gross profit for a fiscal period over the comparable prior fiscal period, exclusive of any incremental gross profit attributable to acquisitions or divestitures made in the comparable prior fiscal period or any subsequent fiscal period through the applicable current fiscal period. See slide 1 under “Non-GAAP Financial Measures” Normalized organic GP growth is a non-GAAP financial measure that represents organic gross profit growth (which, for this period comparison, reflects the Blue Cow Software divestiture), exclusive of the estimated gross profit calculation from political media in 2022. See slide 1 under “Non-GAAP Financial Measures” Management estimates as of 9/30/2023
History of Sustained Growth Across All Key Metrics… Revenue (1) Card Payment Volume Adjusted EBITDA(2) Gross Profit (1) (In $ Billions) (In $ Millions) (In $ Millions) (In $ Millions) 14% CAGR 18% CAGR 20% CAGR 18% CAGR Consumer Payments Business Payments Consolidated Consolidated totals include the elimination of intersegment revenues Certain periods experienced large declines due to a historical accounting presentation change
…With Expanding Take Rates and Gross Profit Margins Gross Profit Margin Take Rate
2 Strategy & Business Updates
Acquire New Clients in Existing Verticals With Our Q3 2023 Performance We See Multiple Levers to Continue to Drive Growth Q3 2023 Normalized Organic GP Growth 12% 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 Consumer Payments growth from further penetration of existing client base Majority of Business Payments growth from acquiring new clients
ADDED NEW CLIENTS VIA DIRECT SALESFORCE ACROSS ALL VERTICALS 257 SOFTWARE PARTNER RELATIONSHIPS(1), INCLUDING: As of 9/30/2023 Third-party research and management estimates as of 9/30/2023 Executing on Growth Plan BROADEN ADDRESSABLE MARKET AND SOLUTIONS ERP & accounting software integrations provide vertical agnostic opportunities Expanded TAM to ~$5.2 trillion(2) through strategic M&A 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 $303 million(1) to pursue deals Engaged ~45 software developers thus far through relationship with Protego in Ireland to enhance and accelerate new product and research & development capabilities EXPANDING EXISTING BUSINESS CONSUMER PAYMENTS BUSINESS PAYMENTS Ended Q3 2023 with 266 credit union clients VISA ACCEPTANCE FASTRACK PROGRAM
Ample Runway in Consumer Payments Third-party research and management estimates as of 9/30/2023 Evolving consumer preferences and technology are requiring clients to embrace payment digitization TOTAL ADDRESSABLE MARKET(1) $1.8Tn VERTICAL END MARKETS 6 CLIENTS ~20,600 ISV INTEGRATION PARTNERS 161 REPAY’s integrated payment processing platform automates and modernizes our clients' operations, resulting in increased cash flow, lower costs, and improved customer experience Loan repayments expertise is core to our efficiency: from tokenization to our clearing & settlement engine Instant Funding accelerates the time at which borrowers receive loans while increasing digital repayments Multipronged go-to-market approach leverages both direct and indirect sales Continuing to invest into deeper ISV integrations, product innovation, and vertical specific technologies
Consumer Payments Offering Omnichannel Capabilities across Modalities Clients in REPAY’s verticals look to partner with innovative vendors that can provide evolving payment functionality and acceptance solutions Credit and Debit Card Processing ACH Processing Instant Funding eCash New & Emerging Payments Virtual Terminal IVR / Phone Pay Mobile Application Web Portal / Online Bill Pay Hosted Payment Page POS Equipment Text Pay PAYMENT MODALITIES PAYMENT CHANNELS REPRESENTATIVE CLIENTS
REPAY’s Growing Business Payments Segment Third-party research and management estimates as of 9/30/2023 $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+ CLIENTS ~5,000 SUPPLIER NETWORK ~233K B2B INTEGRATED SOFTWARE PARTNERS 96 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 B2B Merchant Acquiring B2B AP Automation
Powerful Business Payments Offering One-stop-shop B2B payments solutions provider REPRESENTATIVE CLIENTS Automated Reporting and Reconciliation Multiple Payment Options Including Virtual Card and Cross Border Vendor Management Client 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
3 Appendix
Q3 2023 Financial Update Note: Not meaningful (NM) for comparison SG&A includes expense associated with the change in fair value of tax receivable liability, change in fair value of contingent consideration, loss on extinguishment of debt, and other income / expenses See “Adjusted EBITDA Reconciliation” on slide 24 for reconciliation of Adjusted EBITDA to its most comparable GAAP measure See “Adjusted Net Income Reconciliation” on slide 25 for reconciliation of Adjusted Net Income to its most comparable GAAP measure THREE MONTHS ENDED SEPTEMBER 30 CHANGE $MM 2023 2022 AMOUNT % Card Payment Volume $6,401.3 $6,416.8 ($15.5) (0%) Revenue $74.3 $71.6 $2.8 4% Costs of Services 17.6 16.6 1.0 6% Gross Profit $56.7 $54.9 $1.8 3% SG&A(1) 38.5 24.3 14.3 59% EBITDA $18.1 $30.7 ($12.5) (41%) Depreciation and Amortization 26.5 24.7 1.9 8% Interest Expense (Income), net 0.1 1.1 (1.0) (91%) Income Tax Expense (Benefit) (2.0) (0.5) (1.5) NM Net Income (Loss) ($6.5) $5.4 ($11.9) NM Adjusted EBITDA(2) $31.9 $31.7 $0.2 1% Adjusted Net Income(3) $19.9 $22.8 ($2.9) (13%)
Adjusted EBITDA Reconciliation For the three and nine months ended September 30, 2023 and 2022, reflects amortization of client relationships, non-compete agreement, software, and channel relationship intangibles acquired through the business combination with Thunder Bridge, and client relationships, non-compete agreement, and software intangibles acquired through REPAY's acquisitions of TriSource Solutions, APS Payments, Ventanex, cPayPlus, CPS Payments, BillingTree, Kontrol Payables and Payix. This adjustment excludes the amortization of other intangible assets which were acquired in the regular course of business, such as capitalized internally developed software and purchased software. 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 $5.7 million and $5.3 million for the three months ended September 30, 2023 and September 30, 2022, respectively. Primarily consists of (i) during the three and nine months ended September 30, 2023, professional service fees and other costs incurred in connection with the disposition of Blue Cow Software, and (ii) during the three and nine months ended September 30, 2022, professional service fees and other costs incurred in connection with the acquisitions of BillingTree, Kontrol Payables and Payix. Reflects costs associated with reorganization of operations, consulting fees related to processing services and other operational improvements, including restructuring and integration activities related to acquired businesses, that were not in the ordinary course during the three and nine months ended September 30, 2023 and 2022. For the three and nine months ended September 30, 2023, reflects payments made to third-parties in connection with an expansion of our personnel, franchise taxes and other non-income based taxes and one-time payments to certain partners. For the three and nine months ended September 30, 2022, reflects one-time payments to certain clients and partners, payments made to third-parties in connection with a significant expansion of our personnel, franchise taxes and other non-income based taxes, other payments related to COVID-19 and non-cash rent expense. Beginning in the period ended September 30, 2023, no longer reflects non-cash rent expense. $MM Q3 2023 Q3 2022 Net Income (Loss) ($6.5) $5.4 Interest Expense (Income), net 0.1 1.1 Depreciation and Amortization(1) 26.5 24.7 Income Tax Expense (Benefit) (2.0) (0.5) EBITDA $18.1 $30.7 Non-cash change in fair value of contingent consideration(2) – (0.3) Non-cash change in fair value of assets and liabilities(3) 3.2 (11.4) Share-based compensation expense(4) 5.7 5.3 Transaction expenses(5) 0.8 4.1 Restructuring and other strategic initiative costs(6) 3.1 1.5 Other non-recurring charges(7) 0.9 1.9 Adjusted EBITDA $31.9 $31.7
Adjusted Net Income Reconciliation For the three and nine months ended September 30, 2023 and 2022, reflects amortization of client relationships, non-compete agreement, software, and channel relationship intangibles acquired through the business combination with Thunder Bridge, and client relationships, non-compete agreement, and software intangibles acquired through REPAY's acquisitions of TriSource Solutions, APS Payments, Ventanex, cPayPlus, CPS Payments, BillingTree, Kontrol Payables and Payix. This adjustment excludes the amortization of other intangible assets which were acquired in the regular course of business, such as capitalized internally developed software and purchased software. 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 $5.7 million and $5.3 million for the three months ended September 30, 2023 and September 30, 2022, respectively. Primarily consists of (i) during the three and nine months ended September 30, 2023, professional service fees and other costs incurred in connection with the disposition of Blue Cow Software, and (ii) during the three and nine months ended September 30, 2022, professional service fees and other costs incurred in connection with the acquisitions of BillingTree, Kontrol Payables and Payix. Reflects costs associated with reorganization of operations, consulting fees related to processing services and other operational improvements, including restructuring and integration activities related to acquired businesses, that were not in the ordinary course during the three and nine months ended September 30, 2023 and 2022. For the three and nine months ended September 30, 2023, reflects payments made to third-parties in connection with an expansion of our personnel, franchise taxes and other non-income based taxes and one-time payments to certain partners. For the three and nine months ended September 30, 2022, reflects one-time payments to certain clients and partners, payments made to third-parties in connection with a significant expansion of our personnel, franchise taxes and other non-income based taxes, other payments related to COVID-19 and non-cash rent expense. Beginning in the period ended September 30, 2023, no longer reflects non-cash rent expense. Represents amortization of non-cash deferred debt issuance costs. Represents pro forma income tax adjustment effect associated with items adjusted above. ($MM) Q3 2023 Q3 2022 Net Income (Loss) ($6.5) $5.4 Amortization of acquisition-related intangibles(1) 19.8 20.8 Non-cash change in fair value of contingent consideration(2) – (0.3) Non-cash change in fair value of assets and liabilities(3) 3.2 (11.4) Share-based compensation expense(4) 5.7 5.3 Transaction expenses(5) 0.8 4.1 Restructuring and other strategic initiative costs(6) 3.1 1.5 Other non-recurring charges(7) 0.9 1.9 Non-cash interest expense(8) 0.7 0.7 Pro forma taxes at effective rate(9) (7.8) (5.2) Adjusted Net Income $19.9 $22.8
Adjusted Free Cash Flow Reconciliation Primarily consists of (i) during the three and nine months ended September 30, 2023, professional service fees and other costs incurred in connection with the disposition of Blue Cow Software, and (ii) during the three and nine months ended September 30, 2022, professional service fees and other costs incurred in connection with the acquisitions of BillingTree, Kontrol Payables and Payix. Reflects costs associated with reorganization of operations, consulting fees related to processing services and other operational improvements, including restructuring and integration activities related to acquired businesses, that were not in the ordinary course during the three and nine months ended September 30, 2023 and 2022. For the three and nine months ended September 30, 2023, reflects payments made to third-parties in connection with an expansion of our personnel, franchise taxes and other non-income based taxes and one-time payments to certain partners. For the three and nine months ended September 30, 2022, reflects one-time payments to certain clients and partners, payments made to third-parties in connection with a significant expansion of our personnel, franchise taxes and other non-income based taxes, other payments related to COVID-19 and non-cash rent expense. Beginning in the period ended September 30, 2023, no longer reflects non-cash rent expense. $MM Q3 2023 Q3 2022 Net Cash provided by Operating Activities $28.0 $25.3 Capital expenditures Cash paid for property and equipment (0.9) (0.8) Cash paid for intangible assets (13.1) (8.7) Total capital expenditures (14.0) (9.5) Free Cash Flow $13.9 $15.9 Adjustments Transaction expenses(1) 0.8 4.1 Restructuring and other strategic initiative costs(2) 3.1 1.5 Other non-recurring charges(3) 0.9 1.9 Adjusted Free Cash Flow $18.7 $23.4
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 presented above). Management believes that the adjustment of acquisition-related intangible amortization supplements GAAP financial measures because it allows for greater comparability of operating performance. Although REPAY excludes amortization from acquisition-related intangibles from its non-GAAP expenses, management believes that it is important for investors to understand that such intangibles were recorded as part of purchase accounting and contribute to revenue generation. Amortization of intangibles that relate to past acquisitions will recur in future periods until such intangibles have been fully amortized. Any future acquisitions may result in the amortization of additional intangibles. $MM Q3 2023 Q3 2022 Acquisition-related intangibles $19.8 $20.8 Software 6.4 3.2 Amortization $26.2 $24.1 Depreciation 0.3 0.6 Total Depreciation and Amortization $26.5 $24.7
Card Payment Volume Growth Reconciliation 2023 $MM Q3 Card Payment Volume Growth (0%) Growth from Acquisitions / (Divestitures) (2%) Organic Card Payment Volume Growth(1) 2% Growth from political media (5%) Normalized Organic Card Payment Volume Growth(2) 7% Organic growth is a non-GAAP financial measure and See slide 1 under “Non-GAAP Financial Measures.” Organic CPV growth excludes CPV attributable to Blue Cow Software in Q3 2022 Normalized organic growth is a non-GAAP financial measure and See slide 1 under “Non-GAAP Financial Measures.” Normalized organic CPV growth excludes estimated contributions related to political media in Q3 2022
Revenue and Gross Profit Growth Reconciliations Q3 2023 $MM Consumer Payments Business Payments Total Company Revenue Growth 9% (15%) 4% Growth from Acquisitions / (Divestitures) (5%) n/a (4%) Organic Revenue Growth(1) 14% (15%) 8% Growth from Political Media n/a (16%) (3%) Organic Revenue Growth, excl. political media (2) 14% 1% 11% Organic growth is a non-GAAP financial measure that excludes the revenue and gross profit attributable to Blue Cow Software in Q3 2022, respectively. See slide 1 under “Non-GAAP Financial Measures” Organic growth excl. political media is a non-GAAP financial measure that excludes the political media contribution in Q3 2022. See slide 1 under “Non-GAAP Financial Measures” Q3 2023 $MM Consumer Payments Business Payments Total Company Gross Profit Growth 8% (11%) 3% Growth from Acquisitions / (Divestitures) 6% n/a (6%) Organic Gross Profit Growth(1) 14% (11%) 9% Growth from Political Media n/a (24%) (3%) Organic GP Growth, excl. political media (2) 14% 13% 12%
Quarterly Gross Profit Growth Reconciliation Organic gross profit growth is a non-GAAP financial measure that excludes gross profit attributable to Blue Cow Software in Q3 2022. See slide 1 under “Non-GAAP Financial Measures” Organic GP growth excl. political media is a non-GAAP financial measure that excludes the political media contribution. See slide 1 under “Non-GAAP Financial Measures” 2022 Full Year 2023 $MM Q1 Q2 Q3 Q4 2022 Q1 Q2 Q3 Gross Profit Growth 46% 42% 20% 22% 31% 11% 8% 3% Growth from Acquisitions/(Divestitures) 41% 32% 5% 5% 19% (2%) (4%) (6%) Organic Gross Profit Growth (1) 12% 13% 12% 9% Growth from political media 3% (<1%) (2%) (3%) Organic GP Growth excl. political media (2) 9% 13% 14% 12%
Historical Segment Details 2021 2022 2023 Full Year $MM Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2021 2022 Consumer Payments $3,694.1 $3,523.4 $4,426.7 $4,465.7 $5,290.5 $4,918.6 $4,937.8 $5,009.5 $5,524.8 $5,183.8 $5,338.3 $16,109.9 $20,156.5 Business Payments 919.9 1,100.1 1,156.4 1,177.4 1,123.4 1,277.7 1,479.0 1,602.3 1,056.6 1,069.9 1,063.1 4,353.9 5,482.4 Card Payment Volume $4,614.0 $4,623.5 $5,583.1 $5,643.1 $6,414.0 $6,196.3 $6,416.8 $6,611.8 $6,581.4 $6,253.7 $6,401.3 $20,463.8 $25,638.9 Consumer Payments $42.4 $42.0 $54.5 $55.2 $61.1 $59.8 $63.0 $64.3 $69.9 $65.9 $68.7 $194.0 $248.2 Business Payments 7.1 8.5 8.9 9.3 8.9 9.9 11.4 12.3 8.7 9.8 9.7 33.8 42.6 Intercompany eliminations (2.0) (2.0) (2.2) (2.3) (2.4) (2.3) (2.9) (4.0) (4.1) (4.0) (4.1) (8.6) (11.6) Revenue $47.5 $48.4 $61.1 $62.2 $67.6 $67.4 $71.6 $72.7 $74.5 $71.8 $74.3 $219.3 $279.2 Consumer Payments $32.2 $31.7 $41.9 $42.9 $47.5 $46.1 $49.7 $53.1 $54.6 $51.7 $53.6 $148.6 $196.4 Business Payments 4.9 6.1 6.2 6.6 5.9 7.0 8.1 8.6 6.0 7.2 7.2 23.8 29.6 Intercompany eliminations (2.0) (2.0) (2.2) (2.3) (2.4) (2.3) (2.9) (4.0) (4.1) (4.0) (4.1) (8.6) (11.6) Gross Profit $35.0 $35.7 $45.8 $47.2 $51.0 $50.7 $54.9 $57.8 $56.6 $54.9 $56.7 $163.8 $214.4 Consumer Payments 1.15% 1.19% 1.23% 1.24% 1.15% 1.22% 1.28% 1.28% 1.27% 1.27% 1.29% 1.20% 1.23% Business Payments 0.78% 0.77% 0.77% 0.79% 0.79% 0.78% 0.77% 0.77% 0.82% 0.92% 0.91% 0.78% 0.78% Take Rate 1.03% 1.05% 1.09% 1.10% 1.05% 1.09% 1.12% 1.10% 1.13% 1.15% 1.16% 1.07% 1.09% Consumer Payments 75.9% 75.4% 76.9% 77.7% 77.8% 77.0% 79.0% 82.6% 78.1% 78.4% 78.0% 76.6% 79.1% Business Payments 68.0% 71.8% 69.9% 71.0% 66.5% 70.0% 70.4% 70.1% 69.5% 73.3% 74.1% 70.3% 69.4% Gross Profit Margin 73.7% 73.7% 75.0% 75.9% 75.5% 75.2% 76.8% 79.5% 75.9% 76.5% 76.3% 74.7% 76.8% Note: Historical periods reflect the reclassification of volumes, revenue, and gross profit between Consumer Payments and Business Payments segments
Investor Presentation Exhibit 99.3 November 2023
Disclaimer On July 11, 2019 (the “Closing Date”), Thunder Bridge Acquisition Ltd. (“Thunder Bridge”) and Hawk Parent Holdings LLC (“Hawk Parent”) completed a 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”). 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, 2022 and subsequent Form 10-Qs, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: exposure to economic conditions and political risk affecting the consumer loan market, the receivables management industry and consumer and commercial spending, including bank failures or other adverse events affecting financial institutions, inflationary pressures, general economic slowdown or recession; changes in the payment processing market in which REPAY competes, including with respect to its competitive landscape, technology evolution or regulatory changes; changes in the vertical markets that REPAY targets, including the regulatory environment applicable to REPAY’s clients; the ability to retain, develop and hire key personnel; risks relating to REPAY’s relationships within the payment ecosystem; risk that REPAY may not be able to execute its growth strategies, including identifying and executing acquisitions; risks relating to data security; changes in accounting policies applicable to REPAY; and the risk that REPAY may not be able to maintain effective internal controls. Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance. All information set forth herein speaks only as of the date hereof in the case of information about 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, 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, non-cash change in fair value of warrant liabilities; share-based compensation charges, transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges. Free Cash Flow and Adjusted Free Cash Flow are non-GAAP financial measures that represent net cash flow provided by operating activities less total capital expenditures, and Adjusted Free Cash is further adjusted to add back certain charges deemed not to be part of normal operating expenses and/or non-recurring charges, such as transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges. REPAY believes that Adjusted EBITDA, Free Cash Flow and Adjusted Free Cash Flow provide useful information to investors and others in understanding and evaluating its operating results in the same manner as management. However, Adjusted EBITDA, Free Cash Flow and Adjusted Free Cash Flow 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, Free Cash Flow, Adjusted Free Cash Flow 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, Free Cash Flow and Adjusted Free Cash Flow alongside other financial performance measures, including net income and REPAY’s other financial results presented in accordance with GAAP.
2 Agenda Introduction to REPAY REPAY Investment Highlights REPAY Financial Overview 1 2 3
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
AUTO FINANCE PERSONAL FINANCE AR AUTOMATION CREDIT UNIONS HEALTHCARE MORTGAGE ARM AP AUTOMATION Your Industry. Our Expertise. CONSUMER PAYMENTS BUSINESS PAYMENTS
Who We Are A leading, highly-integrated omnichannel payment technology platform modernizing Consumer and Business Payments CAGR is from 2020A–2022A As of 9/30/2023 Cash Flow Conversion calculated as 2022A Adjusted Free Cash Flow / 2022A Adjusted EBITDA. These are non-GAAP measures. See slide 1 for definitions and slides 30 and 31 for additional details 2022 ANNUAL CARD PAYMENT VOLUME HISTORICAL GROSS PROFIT CAGR(1) SOFTWARE INTEGRATIONS(2) $25.6Bn 37% 257 61% 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 9/30/2023 Secular trends away from cash and check toward digital payments Transaction growth in key verticals Further penetrate existing clients ~$5.2Tn 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 ~$5.2Tn(3) # OF ISV INTEGRATIONS 53 257 CLIENT COUNT ~4,000 ~25,600 Delivering Superior Results (FY 2022) Third Quarter 2023(2) July 2019(1) CARD PAYMENT VOLUME GROSS PROFIT ADJ. EBITDA +25% +31% +34% As of 7/11/2019 (the closing date of the Business Combination) As of 9/30/2023 Third-party research and management estimates (Represents YoY Growth)
Driving Value for Shareholders Fast growing, large and underpenetrated market opportunity Deep presence in key verticals drives competitive moat Highly strategic and diverse client base Multiple avenues for long term, durable growth Experienced Board and Management team Highly attractive and profitable financial model Accelerating cash flow generation Strong balance sheet Investment Rationale
2 REPAY Investment Highlights
1 A leading, omnichannel 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 Business Strengths and Strategies
1 We are Capitalizing on Large, Underserved Market Opportunities REPAY’s existing verticals represent ~$5.2Tn(1) of projected annual total payment volume END MARKET OPPORTUNITIES Healthcare $185Bn $70Bn $420Bn $500Bn $70Bn $600Bn $1.2Tn $2.2Tn Credit Unions ARM Mortgage Personal Loans Automotive Loans AR Automation AP Automation Future New Verticals Canada Buy Now. Pay Later. Growth Opportunities $25.6Bn REPAY’s 2022 Annual Card Payment Volume 1) Third-party research and management estimates as of 9/30/2023 Business Payments Consumer Payments
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. 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. Personal Loans and Mortgage verticals represent debit card only. 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 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” omnichannel offering Direct software integrations into loan, dealer, and business management systems reduces operational complexity for client Improved regulatory compliance through fewer ACH returns 2 Clients Pay Anywhere, Any Way, Any Time
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 Omnichannel 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 Businesses and Consumers REPAY Has Built a Leading Next-Gen Software Platform
Consumer Payments Offering Omnichannel Capabilities across Modalities 2 Clients in REPAY’s verticals look to partner with innovative vendors that can provide evolving payment functionality and acceptance solutions Credit and Debit Card Processing ACH Processing Instant Funding eCash New & Emerging Payments Virtual Terminal IVR / Phone Pay Mobile Application Web Portal / Online Bill Pay Hosted Payment Page POS Equipment Text Pay PAYMENT MODALITIES PAYMENT CHANNELS REPRESENTATIVE CLIENTS
Powerful Business Payments Offering 2 One-stop-shop B2B payments solutions provider Automated Reporting and Reconciliation Multiple Payment Options Including Virtual Card and Cross Border Vendor Management Client 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 One-stop-shop B2B payments solutions provider REPRESENTATIVE CLIENTS
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 (1) Sales Strategy / Distribution Model 3 47% CAGR Software Integrations Management estimate as of 9/30/2023
Attractive and Diverse Client Base Across Key Verticals REPAY’s platform provides significant value to >25,600 clients (1) offering solutions across a variety of industry verticals Healthcare Other ARM B2B Loan Repayment ~20% of card payment volume(2) 4 Management estimate as of 9/30/2023 LTM as of 9/30/2023 Percentage of Card Payment Volume (2) One-stop shop B2B payments solutions provider, offering AP automation and AR merchant acquiring solutions to ~5,000(1) clients Integrations with ~96(1) leading ERP platforms, serving a highly diversified client base across a wide range of industry verticals AP: Media, Healthcare, Home Services & Property Management, Auto, Municipality, and Other AR: Manufacturing, Distribution, and Hospitality BUSINESS PAYMENTS CONSUMER PAYMENTS ~80% Blue chip ISV partnerships with ~161(1) integrations and ~20,600(1) clients, including ~266(1) credit unions Market leader in several niche verticals, including the following: Personal Finance Auto Finance Credit Unions ARM Healthcare Mortgage Diversified Retail & Other RCS: Best-in-class clearing & settlement solutions for ~30(1) ISOs and owned clients Expansions into adjacent Buy-Now-Pay-Later vertical as well as Canada ~20%
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 within Consumer Payments is derived from further penetration of existing client base. Majority of growth within Business Payments is derived from acquiring new clients. Multiple Levers to Continue to Drive Growth EXPAND USAGE AND INCREASE ADOPTION (1) ACQUIRE NEW CLIENTS IN EXISTING VERTICALS (2) 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 Senior Advisor, Klaros Group Experienced Board with Deep Payments Expertise John Morris CEO & Co-Founder Shaler Alias President & Co-Founder William Jacobs Former Board Member, Global Payments Board Member, Green Dot Former SVP, Mastercard 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, Digital Asset 6
3 REPAY Financial Overview
Financial Highlights Low volume attrition and low risk portfolio Differentiated technology platform & ecosystem Deeply integrated with client base Recurring transaction / volume-based revenue 2022 ANNUAL CARD PAYMENT VOLUME $25.6B SOFTWARE INTEGRATIONS(1) 257 CASH FLOW CONVERSION(2) 61% HISTORICAL CARD PAYMENT VOLUME CAGR(3) 30% HISTORICAL GROSS PROFIT CAGR(3) 37% HISTORICAL ADJUSTED EBITDA CAGR(3) 45% REPAY’s Unique Model Translates Into A Highly Attractive Financial Profile As of 9/30/2023 Cash Flow Conversion calculated as 2022A Adjusted Free Cash Flow / 2022A Adjusted EBITDA. These are non-GAAP measures. See slide 1 under “Non-GAAP Financial Measures” and see slides 30 and 31 for reconciliations CAGR is from 2020A-2022A
Total Card Payment Volume ($Bn) Revenue ($MM) Significant Volume and Revenue Growth… REPAY has generated strong, consistent volume growth, resulting in ~$25.6Bn in annual card processing volume in 2022 REPAY’s revenue growth has been strong, resulting in 34% CAGR from 2020 to 2022 42% 25% 35% 48% YoY Growth 41% 27% YoY Growth 30% CAGR 34% CAGR
Gross Profit ($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 73% 77% 75% 38% % Margin 43% 45% % Margin Gross profit represents revenue less costs of services These are non-GAAP measures. See slide 1 under “Non-GAAP Financial Measures” and see slide 30 for reconciliation 45% CAGR 37% CAGR
Consumer Payments Business Payments …Across Our Segments 32% y/y growth 28% y/y growth Gross Profit Margin 76.6% 79.1% Take Rate 1.20% 1.23% Take rate represents revenue / card payment volume 24% y/y growth 26% y/y growth Gross Profit Margin 70.3% 69.4% Take Rate 0.78% 0.78% (1) (1)
Adjusted EBITDA Reconciliation For the twelve months ended December 31, 2022 and 2021, reflects amortization of client relationships, non-compete agreement, software, and channel relationship intangibles acquired through the business combination with Thunder Bridge, and client relationships, non-compete agreement, and software intangibles acquired through REPAY's acquisitions of TriSource Solutions, APS Payments, Ventanex, cPayPlus, CPS Payments, BillingTree, Kontrol Payables and Payix. This adjustment excludes the amortization of other intangible assets which were acquired in the regular course of business, such as capitalized internally developed software and purchased software. For the twelve months 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 Holdings, LLC’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. Reflects write-off 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 Hawk Parent’s 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. For the year ended December 31, 2022, reflects impairment loss related to trade names write-off of BillingTree and Kontrol. For the year ended December 31, 2021, reflects impairment loss related to trade names write-off of TriSource, APS, Ventanex, cPayPlus and CPS. 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. Primarily consists of (i) during the year ended December 31, 2022, professional service fees and other costs incurred in connection with the acquisitions of BillingTree, Kontrol Payables and Payix, (ii) during the year ended December 31, 2021, professional service fees and other costs incurred in connection with the acquisition of Ventanex, cPayPlus, CPS, BillingTree, Kontrol Payables and Payix, as well as professional service expenses related to the January 2021 equity and convertible notes offerings, and (iii) during twelve months 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. Reflects costs associated with reorganization of operations, consulting fees related to processing services and other operational improvements, including restructuring and integration activities related to acquired businesses, that were not in the ordinary course during the years ended December 31, 2022, 2021, and 2020. Additionally, for the year ended December 31, 2022, reflects one-time severance payments. For the year ended December 31, 2022, reflects one-time settlement payments to certain clients and partners, payments made to third-parties in connection with expansion of our personnel, non-recurring acquisition bonus payments, franchise taxes and other non-income based taxes, other payments related to COVID-19, non-cash rent expense, loss on disposal of fixed assets, and reflects loss on termination of lease. For the year ended December 31, 2021, reflects one-time payments to certain clients and partners, and other payments related to COVID-19. Additionally, to be consistent with the current year presentation, for the year ended December 31, 2021, reflects payments made to third-parties in connection with expansion of our personnel and franchise taxes and other non-income based taxes. For 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, payments made to third-parties in connection with expansion of our personnel, franchise taxes and other non-income based taxes, one-time settlement payments to certain clients, and other payments related to COVID-19. Does not include adjustments of $32.6 million for the twelve months ended December 31, 2020, which were presented as pro forma adjustments in previously filed reports, for incremental depreciation and amortization recorded due to fair-value adjustments for Hawk Parent under ASC 805 as a result of Business Combination. ($MM) 2020A(12) 2021A 2022A Net Loss ($117.4) ($56.0) $8.7 Interest Expense 14.4 3.7 4.4 Depreciation and Amortization(1) 60.8 89.7 107.8 Income Tax Benefit (12.4) (30.7) 6.2 EBITDA ($54.5) $6.6 $127.0 Loss on extinguishment of debt(2) – 5.9 – Loss on termination of interest rate hedge(3) – 9.1 – Non-cash change in fair value of warrant liabilities(4) 70.8 – – Non-cash change in fair value of contingent consideration(5) (2.5) 5.8 (3.3) Non-cash impairment loss(6) 2.2 8.1 Non-cash change in fair value of assets and liabilities(7) 12.4 14.1 (66.9) Share-based compensation expense(8) 19.4 22.3 20.5 Transaction expenses(9) 10.9 19.3 19.0 Restructuring and other strategic initiative costs(10) 1.1 4.6 7.9 Other non-recurring charges(11) 1.8 3.3 12.3 Adjusted EBITDA $59.6 $93.2 $124.6
Adjusted Free Cash Flow Reconciliation Excludes acquisition costs that are capitalized as channel relationships. Primarily consists of (i) during the year ended December 31, 2022, professional service fees and other costs incurred in connection with the acquisitions of BillingTree, Kontrol Payables and Payix, and (ii) during the year ended December 31, 2021, professional service fees and other costs incurred in connection with the acquisition of Ventanex, cPayPlus, CPS, BillingTree, Kontrol Payables and Payix, as well as professional service expenses related to the January 2021 equity and convertible notes offerings. Reflects costs associated with reorganization of operations, consulting fees related to processing services and other operational improvements, including restructuring and integration activities related to acquired businesses, that were not in the ordinary course during the years ended December 31, 2022, and 2021. Additionally, for the year ended December 31, 2022, reflects one-time severance payments. For the year ended December 31, 2022, reflects one-time settlement payments to certain clients and partners, payments made to third-parties in connection with expansion of our personnel, non-recurring acquisition bonus payments, franchise taxes and other non-income based taxes, other payments related to COVID-19, non-cash rent expense, loss on disposal of fixed assets, and reflects loss on termination of lease. For the year ended December 31, 2021, reflects one-time payments to certain clients and partners, and other payments related to COVID-19. Additionally, to be consistent with the current year presentation, for the year ended December 31, 2021, reflects payments made to third-parties in connection with expansion of our personnel and franchise taxes and other non-income based taxes. Represents Adjusted free cash flow / Adjusted EBITDA. ($MM) 2021A 2022A Net Cash provided by Operating Activities $53.3 $74.2 Capital expenditures Cash paid for property and equipment (2.9) (3.2) Cash paid for intangible assets (20.6) (33.6) Total capital expenditures(1) (23.5) (36.8) Free Cash Flow $29.8 $37.4 Adjustments Transaction expenses(2) 19.3 19.0 Restructuring and other strategic initiative costs(3) 4.6 7.9 Other non-recurring charges(4) 3.3 12.3 Adjusted free cash flow $56.9 $76.6 Adjusted EBITDA $93.2 $124.6 Adjusted free cash flow conversion(5) 61% 61%
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