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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 12, 2024, Repay Holdings Corporation (the “Company”) issued a press release announcing the results of the Company’s operations for the quarter ended September 30, 2024.
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 12, 2024, 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 12, 2024 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 12, 2024 |
By: |
/s/ Timothy J. Murphy |
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Timothy J. Murphy |
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Chief Financial Officer |
REPAY Reports Third Quarter 2024 Financial Results
Gross Profit Growth of 9% in Q3 and 8% YTD (9% YTD on an organic basis1)
Strong Adjusted EBITDA Growth and Accelerating Free Cash Flow Conversion
Updated 2024 Outlook, Increasing Free Cash Flow Conversion for 2024
ATLANTA, November 12, 2024 -- 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, 2024.
Third Quarter 2024 Financial Highlights
(in $ millions) |
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Q3 2023 |
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Q4 2023 |
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Q1 2024 |
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Q2 2024 |
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Q3 2024 |
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YoY |
|||||
Revenue |
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$ |
74.3 |
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$ |
76.0 |
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$ |
80.7 |
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$ |
74.9 |
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$ |
79.1 |
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6% |
Gross profit (1) |
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56.7 |
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58.7 |
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61.5 |
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58.6 |
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61.6 |
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9% |
Net (loss) income |
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(6.5 |
) |
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(77.7 |
) |
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(5.4 |
) |
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(4.2 |
) |
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3.2 |
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- |
Adjusted EBITDA (2) |
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31.9 |
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33.5 |
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35.5 |
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33.7 |
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35.1 |
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10% |
Net cash provided by operating activities |
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28.0 |
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34.9 |
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24.8 |
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31.0 |
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60.1 |
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115% |
Free Cash Flow (2) |
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13.9 |
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21.8 |
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13.7 |
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19.3 |
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48.8 |
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250% |
“Q3 represented another quarter of profitable growth and accelerating Free Cash Flow conversion at REPAY,” said John Morris, CEO of REPAY. “We continue to see growth across many areas of our business and remain focused on executing our strategy to capture embedded payment flows from clients within our verticals. We believe this approach, along with new software partnerships and further enhancing our payment technology platform, will continue to help us drive sustainable growth, strong cash generation, and value for our shareholders. REPAY remains committed to efficiently allocating capital, which may include organic investments, strategic M&A, and opportunistically repurchasing shares.”
Third Quarter 2024 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 Organic gross profit growth is a non-GAAP financial measure. See “Non-GAAP Financial Measures” and the reconciliation to its most comparable GAAP measure provided below for additional information.
Segments
The Company reports its financial results based on two reportable segments.
Consumer Payments – The Consumer Payments segment provides payment processing solutions (including debit and credit card processing, Automated Clearing House (“ACH”) processing and other electronic payment acceptance solutions, as well as REPAY’s loan disbursement product) that enable REPAY’S clients to collect payments from and disburse funds to consumers and includes its clearing and settlement solutions (“RCS”). RCS is REPAY’s proprietary clearing and settlement platform through which it markets customizable payment processing programs to other ISOs and payment facilitators. The strategic vertical markets served by the Consumer Payments segment primarily include personal loans, automotive loans, receivables management, credit unions, mortgage servicing, consumer healthcare and diversified retail.
Business Payments – The Business Payments segment provides payment processing solutions (including accounts payable automation, debit and credit card processing, virtual credit card processing, ACH processing and other electronic payment acceptance solutions) that enable REPAY’s clients to collect payments from or send payments to other businesses. The strategic vertical markets served within the Business Payments segment primarily include retail automotive, education, field services, governments and municipalities, healthcare, media, homeowner association management and hospitality.
Segment 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 thousands) |
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2024 |
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2023 |
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% Change |
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2024 |
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2023 |
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% Change |
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Revenue |
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Consumer Payments |
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$ |
69,189 |
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$ |
68,720 |
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1% |
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$ |
214,617 |
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$ |
204,622 |
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5% |
Business Payments |
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15,297 |
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9,704 |
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58% |
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35,566 |
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28,170 |
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26% |
Elimination of intersegment revenues |
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(5,341 |
) |
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(4,104 |
) |
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(15,412 |
) |
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(12,152 |
) |
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Total revenue |
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$ |
79,145 |
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$ |
74,320 |
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6% |
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$ |
234,771 |
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$ |
220,640 |
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6% |
Gross profit (1) |
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Consumer Payments |
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$ |
54,889 |
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$ |
53,599 |
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2% |
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$ |
170,026 |
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$ |
159,929 |
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6% |
Business Payments |
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12,013 |
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7,188 |
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67% |
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27,077 |
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20,421 |
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33% |
Elimination of intersegment revenues |
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(5,341 |
) |
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(4,104 |
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(15,412 |
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(12,152 |
) |
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Total gross profit |
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$ |
61,561 |
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$ |
56,683 |
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9% |
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$ |
181,691 |
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$ |
168,198 |
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8% |
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Total gross profit margin (2) |
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78% |
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76% |
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77% |
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76% |
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2024 Outlook Update
“REPAY’s solid year-to-date results gives us the confidence in double-digit Adjusted EBITDA growth and accelerating Free Cash Flow Conversion,” said Tim Murphy, CFO of REPAY. “We are updating our reported Free Cash Flow Conversion target from approximately 60% to approximately 65% as we benefited from a one-time net working capital impact during the year. Our focus in 2024 remains on profitable growth and reducing overall capex spending to achieve our targeted Free Cash Flow Conversion.”
REPAY updated its outlook for full year 2024, as shown below.
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Full Year 2024 Outlook |
Revenue |
$314 - 320 million |
Gross Profit |
$245 - 250 million |
Adjusted EBITDA |
$139 - 142 million |
Free Cash Flow Conversion (1) |
~ 65% |
REPAY does not provide quantitative reconciliation of forward-looking, non-GAAP financial measures, such as forecasted 2024 Adjusted EBITDA and Free Cash Flow Conversion, to the most directly comparable GAAP financial measure, because it is difficult to reliably predict or estimate the relevant components without unreasonable effort due to future uncertainties that may potentially have a significant impact on such calculations, and providing them may imply a degree of precision that would be confusing or potentially misleading.
Conference Call
REPAY will host a conference call to discuss third quarter 2024 financial results today, November 12, 2024 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 13748834. 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 gain on debt extinguishment, loss on business disposition, 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, gain on debt extinguishment, loss on business disposition, non-cash impairment loss, non-cash charges and/or non-recurring charges, such as loss on business disposition, 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, 2024 and 2023 (excluding shares subject to forfeiture). 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. Free Cash Flow is a non-GAAP financial measure that represents net cash flow provided by operating activities less total capital expenditures. Free Cash Flow Conversion represents Free Cash Flow divided by Adjusted EBITDA. REPAY believes that Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share, organic gross profit growth, Free Cash Flow and Free Cash Flow Conversion 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 2024 outlook update and other financial guidance, statements regarding REPAY’s market and growth opportunities, REPAY’s business strategy and the plans and objectives of management for future
operations and the allocation of capital. Such forward-looking statements are based upon the current beliefs and expectations of REPAY’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond REPAY’s control.
In addition to factors disclosed in REPAY’s reports filed with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2023 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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2024 |
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2023 |
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2024 |
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2023 |
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Revenue |
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$ |
79,145 |
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$ |
74,320 |
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$ |
234,771 |
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$ |
220,640 |
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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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17,584 |
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17,637 |
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53,080 |
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52,442 |
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Selling, general and administrative |
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36,707 |
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|
35,279 |
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|
|
108,963 |
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|
111,974 |
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Depreciation and amortization |
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25,529 |
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|
26,523 |
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|
79,328 |
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|
79,146 |
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Loss on business disposition |
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— |
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— |
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|
— |
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10,027 |
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Total operating expenses |
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79,820 |
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|
79,439 |
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241,371 |
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|
253,589 |
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Loss from operations |
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|
(675 |
) |
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|
(5,119 |
) |
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(6,600 |
) |
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|
(32,949 |
) |
Other income (expense) |
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|
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|
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Interest (expense) income, net |
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|
(1,310 |
) |
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|
(103 |
) |
|
|
(376 |
) |
|
|
(1,413 |
) |
Gain on extinguishment of debt |
|
|
13,136 |
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|
|
— |
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|
|
13,136 |
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|
|
— |
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Change in fair value of tax receivable liability |
|
|
(6,479 |
) |
|
|
(3,234 |
) |
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|
(12,758 |
) |
|
|
(3,716 |
) |
Other income (loss), net |
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|
67 |
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|
|
(26 |
) |
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|
62 |
|
|
|
(360 |
) |
Total other income (expense) |
|
|
5,414 |
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|
|
(3,363 |
) |
|
|
64 |
|
|
|
(5,489 |
) |
Income (loss) before income tax expense |
|
|
4,739 |
|
|
|
(8,482 |
) |
|
|
(6,536 |
) |
|
|
(38,438 |
) |
Income tax benefit (expense) |
|
|
(1,524 |
) |
|
|
1,998 |
|
|
|
149 |
|
|
|
(1,308 |
) |
Net income (loss) |
|
$ |
3,215 |
|
|
$ |
(6,484 |
) |
|
$ |
(6,387 |
) |
|
$ |
(39,746 |
) |
Net loss attributable to non-controlling interest |
|
|
(28 |
) |
|
|
(316 |
) |
|
|
(347 |
) |
|
|
(2,543 |
) |
Net income (loss) attributable to the Company |
|
$ |
3,243 |
|
|
$ |
(6,168 |
) |
|
$ |
(6,040 |
) |
|
$ |
(37,203 |
) |
|
|
|
|
|
|
|
|
|
|
|
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|
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Weighted-average shares of Class A common stock outstanding - basic |
|
|
88,263,285 |
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|
91,160,415 |
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|
|
90,426,364 |
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|
|
89,658,318 |
|
Weighted-average shares of Class A common stock outstanding - diluted |
|
|
103,129,907 |
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|
|
91,160,415 |
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|
|
90,426,364 |
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|
|
89,658,318 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
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Income (loss) per Class A share - basic |
|
$ |
0.04 |
|
|
$ |
(0.07 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.41 |
) |
Income (loss) per Class A share - diluted |
|
$ |
0.03 |
|
|
$ |
(0.07 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.41 |
) |
Condensed Consolidated Balance Sheets
(in $ thousands) |
|
September 30, 2024 (Unaudited) |
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|
December 31, 2023 |
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Assets |
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|
|
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Cash and cash equivalents |
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$ |
168,715 |
|
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$ |
118,096 |
|
Accounts receivable |
|
|
41,124 |
|
|
|
36,017 |
|
Prepaid expenses and other |
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|
14,930 |
|
|
|
15,209 |
|
Total current assets |
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|
224,769 |
|
|
|
169,322 |
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|
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Property, plant and equipment, net |
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|
2,713 |
|
|
|
3,133 |
|
Restricted cash |
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|
46,540 |
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|
|
26,049 |
|
Intangible assets, net |
|
|
402,292 |
|
|
|
447,141 |
|
Goodwill |
|
|
716,793 |
|
|
|
716,793 |
|
Operating lease right-of-use assets, net |
|
|
11,564 |
|
|
|
8,023 |
|
Deferred tax assets |
|
|
157,097 |
|
|
|
146,872 |
|
Other assets |
|
|
2,500 |
|
|
|
2,500 |
|
Total noncurrent assets |
|
|
1,339,499 |
|
|
|
1,350,511 |
|
Total assets |
|
$ |
1,564,268 |
|
|
$ |
1,519,833 |
|
|
|
|
|
|
|
|
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Liabilities |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
28,792 |
|
|
$ |
22,030 |
|
Accrued expenses |
|
|
52,246 |
|
|
|
32,906 |
|
Current operating lease liabilities |
|
|
1,199 |
|
|
|
1,629 |
|
Current tax receivable agreement |
|
|
— |
|
|
|
580 |
|
Other current liabilities |
|
|
1,026 |
|
|
|
318 |
|
Total current liabilities |
|
|
83,263 |
|
|
|
57,463 |
|
|
|
|
|
|
|
|
||
Long-term debt |
|
|
496,214 |
|
|
|
434,166 |
|
Noncurrent operating lease liabilities |
|
|
10,958 |
|
|
|
7,247 |
|
Tax receivable agreement, net of current portion |
|
|
201,273 |
|
|
|
188,331 |
|
Other liabilities |
|
|
2,861 |
|
|
|
1,838 |
|
Total noncurrent liabilities |
|
|
711,306 |
|
|
|
631,582 |
|
Total liabilities |
|
$ |
794,569 |
|
|
$ |
689,045 |
|
|
|
|
|
|
|
|
||
Commitments and contingencies |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Stockholders' equity |
|
|
|
|
|
|
||
Class A common stock, $0.0001 par value; 2,000,000,000 shares authorized; 93,213,403 issued and 87,720,670 outstanding as of September 30, 2024; 92,220,494 issued and 90,803,984 outstanding as of December 31, 2023 |
|
|
9 |
|
|
|
9 |
|
Class V common stock, $0.0001 par value; 1,000 shares authorized and 100 shares issued and outstanding as of September 30, 2024 and December 31, 2023 |
|
|
— |
|
|
|
— |
|
Treasury stock, 5,492,733 and 1,416,510 shares as of September 30, 2024 and December 31, 2023, respectively |
|
|
(53,782 |
) |
|
|
(12,528 |
) |
Additional paid-in capital |
|
|
1,138,160 |
|
|
|
1,151,324 |
|
Accumulated deficit |
|
|
(329,710 |
) |
|
|
(323,670 |
) |
Total Repay stockholders' equity |
|
$ |
754,677 |
|
|
$ |
815,135 |
|
Non-controlling interests |
|
|
15,022 |
|
|
|
15,653 |
|
Total equity |
|
|
769,699 |
|
|
|
830,788 |
|
Total liabilities and equity |
|
$ |
1,564,268 |
|
|
$ |
1,519,833 |
|
|
|
|
|
|
|
|
||
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
Nine Months Ended September 30, |
|
|||||
(in $ thousands) |
|
2024 |
|
|
2023 |
|
||
Cash flows from operating activities |
|
|
|
|
|
|
||
Net loss |
|
$ |
(6,387 |
) |
|
$ |
(39,746 |
) |
|
|
|
|
|
|
|
||
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
79,328 |
|
|
|
79,146 |
|
Stock based compensation |
|
|
18,495 |
|
|
|
16,256 |
|
Amortization of debt issuance costs |
|
|
2,185 |
|
|
|
2,136 |
|
Loss on business disposition |
|
|
— |
|
|
|
10,027 |
|
Gain on extinguishment of debt |
|
|
(13,136 |
) |
|
|
— |
|
Other loss |
|
|
— |
|
|
|
273 |
|
Fair value change in tax receivable agreement liability |
|
|
12,758 |
|
|
|
3,716 |
|
Deferred tax expense |
|
|
(149 |
) |
|
|
1,308 |
|
Change in accounts receivable |
|
|
(5,107 |
) |
|
|
(4,857 |
) |
Change in prepaid expenses and other |
|
|
279 |
|
|
|
4,161 |
|
Change in operating lease ROU assets |
|
|
(3,541 |
) |
|
|
389 |
|
Change in accounts payable |
|
|
6,762 |
|
|
|
(1,948 |
) |
Change in accrued expenses and other |
|
|
19,339 |
|
|
|
(1,544 |
) |
Change in operating lease liabilities |
|
|
3,281 |
|
|
|
(424 |
) |
Change in other liabilities |
|
|
1,731 |
|
|
|
(142 |
) |
Net cash provided by operating activities |
|
|
115,838 |
|
|
|
68,751 |
|
|
|
|
|
|
|
|
||
Cash flows from investing activities |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(782 |
) |
|
|
(1,062 |
) |
Capitalized software development costs |
|
|
(33,278 |
) |
|
|
(36,678 |
) |
Proceeds from sale of business, net of cash retained |
|
|
— |
|
|
|
40,273 |
|
Net cash provided by (used in) investing activities |
|
|
(34,060 |
) |
|
|
2,533 |
|
|
|
|
|
|
|
|
||
Cash flows from financing activities |
|
|
|
|
|
|
||
Issuance of long-term debt |
|
|
287,500 |
|
|
|
— |
|
Payments on long-term debt |
|
|
(205,150 |
) |
|
|
(20,000 |
) |
Payments of debt issuance costs |
|
|
(9,350 |
) |
|
|
— |
|
Payments for tax withholding related to shares vesting under Incentive Plan |
|
|
(2,720 |
) |
|
|
(1,510 |
) |
Treasury shares repurchased |
|
|
(41,577 |
) |
|
|
— |
|
Stock options exercised |
|
|
395 |
|
|
|
— |
|
Distributions to Members |
|
|
— |
|
|
|
(947 |
) |
Purchase of capped calls related to issuance of convertible notes |
|
|
(39,186 |
) |
|
|
— |
|
Payment of Tax Receivable Agreement |
|
|
(580 |
) |
|
|
— |
|
Payment of contingent consideration liability up to acquisition-date fair value |
|
|
— |
|
|
|
(1,000 |
) |
Net cash used in financing activities |
|
|
(10,668 |
) |
|
|
(23,457 |
) |
|
|
|
|
|
|
|
||
Increase in cash, cash equivalents and restricted cash |
|
|
71,110 |
|
|
|
47,827 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
$ |
144,145 |
|
|
$ |
93,563 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
215,255 |
|
|
$ |
141,390 |
|
|
|
|
|
|
|
|
||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
|
|
|
|
|
|
||
Cash paid during the year for: |
|
|
|
|
|
|
||
Interest |
|
$ |
643 |
|
|
$ |
840 |
|
Income taxes |
|
$ |
2,045 |
|
|
$ |
1,201 |
|
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA
For the Three Months Ended September 30, 2024 and 2023
(Unaudited)
|
|
|
|
|
|
|
||
|
Three Months ended September 30, |
|
|
|||||
(in $ thousands) |
2024 |
|
|
2023 |
|
|
||
Revenue |
$ |
79,145 |
|
|
$ |
74,320 |
|
|
Operating expenses |
|
|
|
|
|
|
||
Costs of services (exclusive of depreciation and amortization shown separately below) |
$ |
17,584 |
|
|
$ |
17,637 |
|
|
Selling, general and administrative |
|
36,707 |
|
|
|
35,279 |
|
|
Depreciation and amortization |
|
25,529 |
|
|
|
26,523 |
|
|
Total operating expenses |
$ |
79,820 |
|
|
$ |
79,439 |
|
|
Loss from operations |
$ |
(675 |
) |
|
$ |
(5,119 |
) |
|
Other income (expense) |
|
|
|
|
|
|
||
Interest (expense) income, net |
|
(1,310 |
) |
|
|
(103 |
) |
|
Gain on extinguishment of debt |
|
13,136 |
|
|
|
— |
|
|
Change in fair value of tax receivable liability |
|
(6,479 |
) |
|
|
(3,234 |
) |
|
Other income (loss), net |
|
67 |
|
|
|
(26 |
) |
|
Total other income (expense) |
|
5,414 |
|
|
|
(3,363 |
) |
|
Income (loss) before income tax expense |
|
4,739 |
|
|
|
(8,482 |
) |
|
Income tax benefit (expense) |
|
(1,524 |
) |
|
|
1,998 |
|
|
Net income (loss) |
$ |
3,215 |
|
|
$ |
(6,484 |
) |
|
|
|
|
|
|
|
|
||
Add: |
|
|
|
|
|
|
||
Interest expense (income), net |
|
1,310 |
|
|
|
103 |
|
|
Depreciation and amortization (a) |
|
25,529 |
|
|
|
26,523 |
|
|
Income tax benefit |
|
1,524 |
|
|
|
(1,998 |
) |
|
EBITDA |
$ |
31,578 |
|
|
$ |
18,144 |
|
|
|
|
|
|
|
|
|
||
Gain on extinguishment of debt (b) |
|
(13,136 |
) |
|
|
— |
|
|
Non-cash change in fair value of assets and liabilities (c) |
|
6,479 |
|
|
|
3,234 |
|
|
Share-based compensation expense (d) |
|
6,477 |
|
|
|
5,686 |
|
|
Transaction expenses (e) |
|
937 |
|
|
|
812 |
|
|
Restructuring and other strategic initiative costs (f) |
|
2,202 |
|
|
|
3,084 |
|
|
Other non-recurring charges (g) |
|
562 |
|
|
|
894 |
|
|
Adjusted EBITDA |
$ |
35,099 |
|
|
$ |
31,854 |
|
|
|
|
|
|
|
|
|
||
Quarterly Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA
(Unaudited)
|
Three Months ended |
|
|||||||||
(in $ thousands) |
December 31, 2023 |
|
|
March 31, 2024 |
|
|
June 30, 2024 |
|
|||
Net income (loss) |
$ |
(77,674 |
) |
|
$ |
(5,365 |
) |
|
$ |
(4,237 |
) |
|
|
|
|
|
|
|
|
|
|||
Add: |
|
|
|
|
|
|
|
|
|||
Interest expense (income), net |
|
(365 |
) |
|
|
(380 |
) |
|
|
(554 |
) |
Depreciation and amortization (a) |
|
24,711 |
|
|
|
27,028 |
|
|
|
26,771 |
|
Income tax (benefit) expense |
|
(3,423 |
) |
|
|
302 |
|
|
|
(1,975 |
) |
EBITDA |
$ |
(56,751 |
) |
|
$ |
21,585 |
|
|
$ |
20,005 |
|
|
|
|
|
|
|
|
|
|
|||
Non-cash impairment loss (i) |
|
75,750 |
|
|
|
— |
|
|
|
— |
|
Non-cash change in fair value of assets and liabilities (c) |
|
3,778 |
|
|
|
2,913 |
|
|
|
3,366 |
|
Share-based compensation expense (d) |
|
5,899 |
|
|
|
6,923 |
|
|
|
5,874 |
|
Transaction expenses (e) |
|
921 |
|
|
|
677 |
|
|
|
414 |
|
Restructuring and other strategic initiative costs (f) |
|
3,372 |
|
|
|
2,184 |
|
|
|
2,584 |
|
Other non-recurring charges (g) |
|
520 |
|
|
|
1,231 |
|
|
|
1,485 |
|
Adjusted EBITDA |
$ |
33,489 |
|
|
$ |
35,513 |
|
|
$ |
33,728 |
|
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA
For the Nine Months Ended September 30, 2024 and 2023
(Unaudited)
|
Nine Months ended September 30, |
|
|
|||||
(in $ thousands) |
2024 |
|
|
2023 |
|
|
||
Revenue |
$ |
234,771 |
|
|
$ |
220,640 |
|
|
Operating expenses |
|
|
|
|
|
|
||
Costs of services (exclusive of depreciation and amortization shown separately below) |
$ |
53,080 |
|
|
$ |
52,442 |
|
|
Selling, general and administrative |
|
108,963 |
|
|
|
111,974 |
|
|
Depreciation and amortization |
|
79,328 |
|
|
|
79,146 |
|
|
Loss on business disposition |
|
— |
|
|
|
10,027 |
|
|
Total operating expenses |
$ |
241,371 |
|
|
$ |
253,589 |
|
|
Loss from operations |
$ |
(6,600 |
) |
|
$ |
(32,949 |
) |
|
Other income (expense) |
|
|
|
|
|
|
||
Interest (expense) income, net |
|
(376 |
) |
|
|
(1,413 |
) |
|
Gain on extinguishment of debt |
|
13,136 |
|
|
|
— |
|
|
Change in fair value of tax receivable liability |
|
(12,758 |
) |
|
|
(3,716 |
) |
|
Other income (loss), net |
|
62 |
|
|
|
(360 |
) |
|
Total other income (expense) |
|
64 |
|
|
|
(5,489 |
) |
|
Income (loss) before income tax expense |
|
(6,536 |
) |
|
|
(38,438 |
) |
|
Income tax benefit (expense) |
|
149 |
|
|
|
(1,308 |
) |
|
Net income (loss) |
$ |
(6,387 |
) |
|
$ |
(39,746 |
) |
|
|
|
|
|
|
|
|
||
Add: |
|
|
|
|
|
|
||
Interest expense (income), net |
|
376 |
|
|
|
1,413 |
|
|
Depreciation and amortization (a) |
|
79,328 |
|
|
|
79,146 |
|
|
Income tax (benefit) expense |
|
(149 |
) |
|
|
1,308 |
|
|
EBITDA |
$ |
73,168 |
|
|
$ |
42,121 |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Loss on business disposition (h) |
|
— |
|
|
|
10,027 |
|
|
Non-cash impairment loss (i) |
|
— |
|
|
|
50 |
|
|
Gain on extinguishment of debt (b) |
|
(13,136 |
) |
|
|
— |
|
|
Non-cash change in fair value of assets and liabilities (c) |
|
12,758 |
|
|
|
3,716 |
|
|
Share-based compensation expense (d) |
|
19,274 |
|
|
|
16,257 |
|
|
Transaction expenses (e) |
|
2,028 |
|
|
|
7,602 |
|
|
Restructuring and other strategic initiative costs (f) |
|
6,970 |
|
|
|
8,536 |
|
|
Other non-recurring charges (g) |
|
3,278 |
|
|
|
5,008 |
|
|
Adjusted EBITDA |
$ |
104,340 |
|
|
$ |
93,317 |
|
|
|
|
|
|
|
|
|
||
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted Net Income
For the Three Months Ended September 30, 2024 and 2023
(Unaudited)
|
Three Months ended September 30, |
|
|
|||||
(in $ thousands) |
2024 |
|
|
2023 |
|
|
||
Revenue |
$ |
79,145 |
|
|
$ |
74,320 |
|
|
Operating expenses |
|
|
|
|
|
|
||
Costs of services (exclusive of depreciation and amortization shown separately below) |
$ |
17,584 |
|
|
$ |
17,637 |
|
|
Selling, general and administrative |
|
36,707 |
|
|
|
35,279 |
|
|
Depreciation and amortization |
|
25,529 |
|
|
|
26,523 |
|
|
Total operating expenses |
$ |
79,820 |
|
|
$ |
79,439 |
|
|
Loss from operations |
$ |
(675 |
) |
|
$ |
(5,119 |
) |
|
Interest (expense) income, net |
|
(1,310 |
) |
|
|
(103 |
) |
|
Gain on extinguishment of debt |
|
13,136 |
|
|
|
— |
|
|
Change in fair value of tax receivable liability |
|
(6,479 |
) |
|
|
(3,234 |
) |
|
Other income (loss), net |
|
67 |
|
|
|
(26 |
) |
|
Total other income (expense) |
|
5,414 |
|
|
|
(3,363 |
) |
|
Income (loss) before income tax expense |
|
4,739 |
|
|
|
(8,482 |
) |
|
Income tax benefit (expense) |
|
(1,524 |
) |
|
|
1,998 |
|
|
Net income (loss) |
$ |
3,215 |
|
|
$ |
(6,484 |
) |
|
|
|
|
|
|
|
|
||
Add: |
|
|
|
|
|
|
||
Amortization of acquisition-related intangibles (j) |
|
19,111 |
|
|
|
19,786 |
|
|
Gain on extinguishment of debt (b) |
|
(13,136 |
) |
|
|
— |
|
|
Non-cash change in fair value of assets and liabilities (c) |
|
6,479 |
|
|
|
3,234 |
|
|
Share-based compensation expense (d) |
|
6,477 |
|
|
|
5,686 |
|
|
Transaction expenses (e) |
|
937 |
|
|
|
812 |
|
|
Restructuring and other strategic initiative costs (f) |
|
2,202 |
|
|
|
3,084 |
|
|
Other non-recurring charges (g) |
|
562 |
|
|
|
894 |
|
|
Non-cash interest expense (k) |
|
762 |
|
|
|
712 |
|
|
Pro forma taxes at effective rate (l) |
|
(5,364 |
) |
|
|
(7,828 |
) |
|
Adjusted Net Income |
$ |
21,245 |
|
|
$ |
19,896 |
|
|
|
|
|
|
|
|
|
||
Shares of Class A common stock outstanding (on an as-converted basis) (m) |
|
94,074,811 |
|
|
|
97,052,574 |
|
|
Adjusted Net Income per share |
$ |
0.23 |
|
|
$ |
0.21 |
|
|
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted Net Income
For the Nine Months Ended September 30, 2024 and 2023
(Unaudited)
|
Nine Months ended September 30, |
|
|
|||||
(in $ thousands) |
2024 |
|
|
2023 |
|
|
||
Revenue |
$ |
234,771 |
|
|
$ |
220,640 |
|
|
Operating expenses |
|
|
|
|
|
|
||
Costs of services (exclusive of depreciation and amortization shown separately below) |
$ |
53,080 |
|
|
$ |
52,442 |
|
|
Selling, general and administrative |
|
108,963 |
|
|
|
111,974 |
|
|
Depreciation and amortization |
|
79,328 |
|
|
|
79,146 |
|
|
Loss on business disposition |
|
— |
|
|
|
10,027 |
|
|
Total operating expenses |
$ |
241,371 |
|
|
$ |
253,589 |
|
|
Loss from operations |
$ |
(6,600 |
) |
|
$ |
(32,949 |
) |
|
Other expenses |
|
|
|
|
|
|
||
Interest (expense) income, net |
|
(376 |
) |
|
|
(1,413 |
) |
|
Gain on extinguishment of debt |
|
13,136 |
|
|
|
— |
|
|
Change in fair value of tax receivable liability |
|
(12,758 |
) |
|
|
(3,716 |
) |
|
Other income (loss), net |
|
62 |
|
|
|
(360 |
) |
|
Total other income (expense) |
|
64 |
|
|
|
(5,489 |
) |
|
Income (loss) before income tax expense |
|
(6,536 |
) |
|
|
(38,438 |
) |
|
Income tax benefit (expense) |
|
149 |
|
|
|
(1,308 |
) |
|
Net income (loss) |
$ |
(6,387 |
) |
|
$ |
(39,746 |
) |
|
|
|
|
|
|
|
|
||
Add: |
|
|
|
|
|
|
||
Amortization of acquisition-related intangibles (j) |
|
58,549 |
|
|
|
60,673 |
|
|
Loss on business disposition (h) |
|
— |
|
|
|
10,027 |
|
|
Non-cash impairment loss (i) |
|
— |
|
|
|
50 |
|
|
Gain on extinguishment of debt (b) |
|
(13,136 |
) |
|
|
— |
|
|
Non-cash change in fair value of assets and liabilities (c) |
|
12,758 |
|
|
|
3,716 |
|
|
Share-based compensation expense (d) |
|
19,274 |
|
|
|
16,257 |
|
|
Transaction expenses (e) |
|
2,028 |
|
|
|
7,602 |
|
|
Restructuring and other strategic initiative costs (f) |
|
6,970 |
|
|
|
8,536 |
|
|
Other non-recurring charges (g) |
|
3,278 |
|
|
|
5,008 |
|
|
Non-cash interest expense (k) |
|
2,186 |
|
|
|
2,136 |
|
|
Pro forma taxes at effective rate (l) |
|
(20,135 |
) |
|
|
(15,658 |
) |
|
Adjusted Net Income |
$ |
65,385 |
|
|
$ |
58,601 |
|
|
|
|
|
|
|
|
|
||
Shares of Class A common stock outstanding (on an as-converted basis) (m) |
|
96,259,523 |
|
|
|
96,778,735 |
|
|
Adjusted Net Income per share |
$ |
0.68 |
|
|
$ |
0.61 |
|
|
Reconciliation of Operating Cash Flow to Free Cash Flow
For the Three and Nine Months Ended September 30, 2024 and 2023
(Unaudited)
|
|
Three Months ended September 30, |
|
|
Nine Months ended September 30, |
|
||||||||||
(in $ thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net cash provided by operating activities |
|
$ |
60,058 |
|
|
$ |
27,967 |
|
|
$ |
115,838 |
|
|
$ |
68,751 |
|
Capital expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash paid for property and equipment |
|
|
(211 |
) |
|
|
(948 |
) |
|
|
(782 |
) |
|
|
(1,062 |
) |
Capitalized software development costs |
|
|
(11,029 |
) |
|
|
(13,078 |
) |
|
|
(33,278 |
) |
|
|
(36,678 |
) |
Total capital expenditures |
|
|
(11,240 |
) |
|
|
(14,026 |
) |
|
|
(34,060 |
) |
|
|
(37,740 |
) |
Free cash flow |
|
$ |
48,818 |
|
|
$ |
13,941 |
|
|
$ |
81,778 |
|
|
$ |
31,011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Free cash flow conversion |
|
|
139 |
% |
|
|
44 |
% |
|
|
78 |
% |
|
|
33 |
% |
Quarterly Reconciliation of Operating Cash Flow to Free Cash Flow
(Unaudited)
|
Three Months ended |
|
|||||||||
(in $ thousands) |
December 31, 2023 |
|
|
March 31, 2024 |
|
|
June 30, 2024 |
|
|||
Net cash provided by operating activities |
$ |
34,863 |
|
|
$ |
24,801 |
|
|
$ |
30,979 |
|
Capital expenditures |
|
|
|
|
|
|
|
|
|||
Cash paid for property and equipment |
|
(183 |
) |
|
|
(87 |
) |
|
|
(484 |
) |
Capitalized software development costs |
|
(12,893 |
) |
|
|
(11,042 |
) |
|
|
(11,207 |
) |
Total capital expenditures |
|
(13,076 |
) |
|
|
(11,129 |
) |
|
|
(11,691 |
) |
Free cash flow |
$ |
21,787 |
|
|
$ |
13,672 |
|
|
$ |
19,288 |
|
|
|
|
|
|
|
|
|
|
|||
Free cash flow conversion |
|
65 |
% |
|
|
38 |
% |
|
|
57 |
% |
Reconciliation of Gross Profit Growth to Organic Gross Profit Growth
For the Year-over-Year Change Between the Nine Months Ended September 30, 2024 and 2023
(Unaudited)
|
|
Q3 Year-to-Date YoY Change |
|
|
|
Gross profit growth |
|
|
8 |
% |
|
Less: Growth from acquisitions and dispositions |
|
|
(1 |
%) |
|
Organic gross profit growth (n) |
|
|
9 |
% |
|
|
|
Three Months ended September 30, |
|
|
Nine Months ended September 30, |
|
||||||||||
(in $ thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Acquisition-related intangibles |
|
$ |
19,111 |
|
|
$ |
19,786 |
|
|
$ |
58,549 |
|
|
$ |
60,673 |
|
Software |
|
|
6,008 |
|
|
|
6,391 |
|
|
|
19,577 |
|
|
|
16,639 |
|
Amortization |
|
$ |
25,119 |
|
|
$ |
26,177 |
|
|
$ |
78,126 |
|
|
$ |
77,312 |
|
Depreciation |
|
|
410 |
|
|
|
346 |
|
|
|
1,202 |
|
|
|
1,834 |
|
Total Depreciation and amortization (1) |
|
$ |
25,529 |
|
|
$ |
26,523 |
|
|
$ |
79,328 |
|
|
$ |
79,146 |
|
|
|
Three Months ended |
|
|||||||||
(in $ thousands) |
|
December 31, 2023 |
|
|
March 31, 2024 |
|
|
June 30, 2024 |
|
|||
Acquisition-related intangibles |
|
$ |
20,969 |
|
|
$ |
19,736 |
|
|
$ |
19,702 |
|
Software |
|
|
3,150 |
|
|
|
6,713 |
|
|
|
6,856 |
|
Amortization |
|
$ |
24,119 |
|
|
$ |
26,449 |
|
|
$ |
26,558 |
|
Depreciation |
|
|
592 |
|
|
|
579 |
|
|
|
213 |
|
Total Depreciation and amortization (1) |
|
$ |
24,711 |
|
|
$ |
27,028 |
|
|
$ |
26,771 |
|
|
|
Three Months ended September 30, |
|
Nine Months ended September 30, |
||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Weighted average shares of Class A common stock outstanding - basic |
|
88,263,285 |
|
91,160,415 |
|
90,426,364 |
|
89,658,318 |
Add: Non-controlling interests |
|
|
|
|
|
|
|
|
Weighted average Post-Merger Repay Units exchangeable for Class A common stock |
|
5,811,526 |
|
5,892,159 |
|
5,833,159 |
|
7,120,417 |
Shares of Class A common stock outstanding (on an as-converted basis) |
|
94,074,811 |
|
97,052,574 |
|
96,259,523 |
|
96,778,735 |
Q3 2024 Earnings Supplement November 2024 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 2024 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, 2023 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 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 is a non-GAAP financial measure that represents net cash flow provided by operating activities less total capital expenditures. Free Cash Flow Conversion represents Free Cash Flow divided by Adjusted EBITDA. 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, while being focused on accelerating FCF conversion in 2024 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
Financial Update – Q3 2024 ($MM) Revenue Gross Profit Adjusted EBITDA (2) Gross profit margin represents gross profit / revenue Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See slide 1 under “Non-GAAP Financial Measures” and slide 23 for reconciliation. Adjusted EBITDA margin represents adjusted EBITDA / revenue Free Cash Flow and Free Cash Flow conversion are non-GAAP financial measures. See slide 1 under “Non-GAAP Financial Measures” and slide 26 for reconciliation. Free Cash Flow conversion represents Free Cash Flow / Adjusted EBITDA 76% 78% % Margin (1) 43% 44% % Margin (2) 9% y/y growth 6% y/y growth 10% y/y growth Free Cash Flow (3) 44% 139% FCF conversion (3) 250% y/y growth
Strong Growth and Accelerating FCF Conversion – Year-to-Date 2024 Q3 2024 YTD 2024 Gross Profit growth 9% 8% Divestiture impact n/a 1% Organic Gross Profit Growth (1) 9% 9% Adjusted EBITDA growth (2) 10% 12% Free Cash Flow Growth (3) 250% 164% Organic gross profit growth is a non-GAAP financial measure. See slide 1 under “Non-GAAP Financial Measures” and slide 29 for reconciliation Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA growth represents percentage change in this non-GAAP financial measure for a fiscal period over the comparable prior fiscal period, with no other adjustments. See slide 1 under “Non-GAAP Financial Measures” and slide 23 for reconciliation Free Cash Flow and Free Cash Flow Conversion are non-GAAP financial measures. Free Cash Flow growth represents percentage change in this non-GAAP financial measure for a fiscal period over the comparable prior fiscal period, with no other adjustments. See slide 1 under “Non-GAAP Financial Measures” and slide 26 for reconciliations. Free Cash Flow Conversion represents Free Cash Flow / Adjusted EBITDA Free Cash Flow Conversion (3) Q3 Free Cash Flow benefited from ~$20 million favorable net working capital impact due to the timing of settlement accounts ~$15 million expected to reverse during Q4
Consumer Payments Results – Q3 2024 ($MM) Key Business Highlights Winning large enterprise clients who are adopting more payment channels and modalities Resilent trends across auto loans, personal loans, credit unions, and mortgage servicing, while seeing general consumer softness Continued strong adoption of non-card volume-based products Executing on integration refreshes to further penetrate software partnerships, which leads to confidence in our sales pipeline GP margins benefited from processing costs optimization and strategic initiatives Gross Profit Margin 78% 79% 1% y/y growth 2% y/y growth
Strong sales pipeline within healthcare, property management, and municipality verticals via direct sales and new / refreshed integrations Benefiting from strong political media contributions Increased our AP Supplier Network to 330,000+ suppliers GP margins benefited from processing costs optimization and automation initiatives Business Payments Results – Q3 2024 ($MM) Key Business Highlights Gross Profit Margin 74% 79% 58% y/y growth 67% y/y growth
Balance Sheet Flexibility and Net Leverage Total liquidity represents cash balance plus undrawn $250 million revolver facility Management estimated 2024E cash balance based on updated Adjusted EBITDA outlook of $139 million – $142 million, ~65% reported FCF conversion outlook, and estimated Q4 net working capital impact of ~$15 million. Management estimated total liquidity for 2025E expected to be in excess of near-term debt maturity Adjusted EBITDA is a non-GAAP financial measure. See slide 1 under “Non-GAAP Financial Measures.” LTM Adjusted EBITDA represents the sum of the Adjusted EBITDA for the four most recent fiscal quarters. See slide 12 for such amounts and additional reconciliation information contained in footnote 2 of Slide 12 Liquidity & Near-Term Debt Maturity Focused on Maintaining Significant Liquidity Business focused on high cash flow conversion and further improvements Continued investments in organic growth Preserve liquidity and profitability through: Hiring focused on revenue generating / supporting roles Limited discretionary expenses Negotiations with vendors Accelerating FCF conversion On-going cash generation & continued improvements in FCF conversion (1) (In $ millions) (3) ~$192 – $194 ~$442 – $444 Net Leverage as of September 30, 2024 Total Debt $508 MM Cash Balance $169 MM Net Debt $339 MM LTM Adjusted EBITDA (4) $138 MM Net Leverage 2.5x Committed to Prudently Managing Leverage Total Outstanding Debt comprised of: $220 million 2026 Convertible Notes with 0% coupon Newly issued $288 million 2029 Convertible Notes with 2.875% coupon $250 million revolver facility provides flexibility for debt maturities and further acquisitions (upsized on July 10, 2024) Secured net leverage covenant is max of 2.5x (definitionally excludes convertible notes balance) (1) (2)
Updated FY 2024 Outlook REVENUE GROSS PROFIT ADJUSTED EBITDA FREE CASH FLOW CONVERSION (1) $314 – $320MM $245 – $250MM $139 – $142MM ~65% reported (2) Note: REPAY does not provide quantitative reconciliation of forward-looking, non-GAAP financial measures such as forecasted Adjusted EBITDA and Free Cash Flow Conversion to the most directly comparable GAAP financial measure because it is difficult to reliably predict or estimate the relevant components without unreasonable effort due to future uncertainties that may potentially have significant impact on such calculations, and providing them may imply a degree of precision that would be confusing or potentially misleading Free Cash Flow Conversion represents Free Cash Flow / Adjusted EBITDA Reported Free Cash Flow Conversion outlook of ~65% incorporates the favorable net working capital impact (and expected partial reversal) due to the timing of settlement accounts as explained on slide 5. When excluding these net working capital impacts, Free Cash Flow Conversion outlook is ~60% REPAY updates it previously provided outlook for full year 2024 ~44% Margins ~78% Margins (unchanged) (unchanged) (unchanged) (prior ~60% reported)
FY 2024 Gross Profit Outlook Bridge Blue Cow divestiture Existing Client Growth (1) Political media contribution (1) $245 - $250 New Client Growth (1) Management estimates as of 11/12/2024 (In $ Millions)
Updated FY 2024 Outlook Bridge Free Cash Flow Conversion represents Free Cash Flow / Adjusted EBITDA. See slide 1 under “Non-GAAP Financial Measures” and slides 24 & 26 for reconciliations Updated Free Cash Flow Conversion (1) Gross Profit & Adjusted EBITDA $245 - $250 $139 - $142 Adjusted EBITDA to grow faster than Gross Profit… (In $ Millions) … combined with Capex reduction, FCF Conversion to accelerate ~
History of Sustained Growth Across All Key Metrics… Gross Profit (1) Revenue (1) Free Cash Flow (2) Adjusted EBITDA(2) (In $ Millions) (In $ Millions) (In $ Millions) (In $ Millions) 16% CAGR 85% CAGR (3) Consumer Payments Business Payments Consolidated Consolidated totals include the elimination of intersegment revenues Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures. See slide 1 under “Non-GAAP Financial Measures” and slides 23 & 26 for reconciliations. For historical periods shown with respect to Adjusted EBITDA, see the reconciliations provided in the Company’s previous reported earnings releases and filings on Form 10-K or Form 10-Q with respect to such period ended. CAGR is from Q2 2021 to Q3 2024 17% CAGR 17% CAGR
…With Expanding Gross Profit Margins and Accelerating FCF Conversion FCF Conversion (1) Gross Profit Margin Free Cash Flow Conversion represents Free Cash Flow / Adjusted EBITDA. Free Cash Flow Conversion is non-GAAP financial measure. See slide 1 under “Non-GAAP Financial Measures” and slide 26 for reconciliation
2 Strategy & Business Updates
Acquire New Clients in Existing Verticals With Our YTD 2024 Performance We See Multiple Levers to Continue to Drive Growth YTD 2024 Organic GP Growth 9% 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 276 SOFTWARE PARTNER RELATIONSHIPS(1), INCLUDING: As of 9/30/2024 Third-party research and management estimates as of 9/30/2024 Total liquidity represents cash balance as of 9/30/2024 plus undrawn $250 million revolver facility. See slide 8 for further information 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 Continuing to grow existing relationships and add new opportunities within existing verticals & ISVs Cash on balance sheet and revolving credit facility gives the Company ample liquidity of $418 million(3) to pursue our capital allocation initiatives such as investing in organic growth, balancing reduction of net leverage, while managing our convertible debt liability, and potentially pursuing M&A Continuing to thoughtfully invest in new product and research & development capabilities EXPANDING EXISTING BUSINESS CONSUMER PAYMENTS BUSINESS PAYMENTS Ended Q3 2024 with 313 credit union clients VISA ACCEPTANCE FASTRACK PROGRAM
Ample Runway in Consumer Payments Third-party research and management estimates as of 9/30/2024 Evolving consumer preferences and technology are requiring clients to embrace payment digitization TOTAL ADDRESSABLE MARKET(1) $1.8Tn VERTICAL END MARKETS 6 ISV INTEGRATION PARTNERS 176 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 9/30/2024 $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+ SUPPLIER NETWORK 333,000+ B2B INTEGRATED SOFTWARE PARTNERS 100 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 2024 Financial Update Note: Not meaningful (NM) for comparison Operating expenses includes SG&A and expenses associated with non-cash impairment loss, 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 23 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 See “Free Cash Flow Reconciliation” on slide 26 for reconciliation of Free Cash Flow to its most comparable GAAP measure THREE MONTHS ENDED SEPTEMBER 30 CHANGE $MM 2024 2023 AMOUNT % Revenue $79.1 $74.3 $4.8 6% Costs of Services 17.6 17.6 (0.1) (0%) Gross Profit $61.6 $56.7 $4.9 9% Operating Expenses(1) 30.0 38.5 (8.6) (22%) EBITDA $31.6 $18.1 $13.4 74% Depreciation and Amortization 25.5 26.5 (1.0) (4%) Interest Expense (Income), net 1.3 0.1 1.2 NM Income Tax Expense (Benefit) 1.5 (2.0) 3.5 NM Net Income (Loss) $3.2 ($6.5) $9.7 150% Adjusted EBITDA(2) $35.1 $31.9 $3.2 10% Adjusted Net Income(3) $21.2 $19.9 $1.3 7% Free Cash Flow(4) $48.8 $13.9 $34.9 250%
Q3 & YTD 2024 Adjusted EBITDA Reconciliation 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 loss recognized related to the disposition of Blue Cow. Reflects impairment loss related to a trade name write-off of Media Payments. Reflects a gain on the repurchase of 2026 Notes principal, net of a write-off of debt issuance costs relating to the repurchased principal. 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 three and nine months ended September 30, 2024, professional service fees incurred in connection with prior transactions, and (ii) 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. 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. For the three and nine months ended September 30, 2024, reflects franchise taxes and other non-income based taxes, non-recurring legal and other litigation expenses and payments made to third-parties in connection with our IT security and personnel. For the three and nine months ended September 30, 2023, reflects non-recurring payments made to third-parties in connection with an expansion of our personnel, one-time payments to certain partners and franchise taxes and other non-income based taxes. $MM Q3 2024 Q3 2023 YTD 2024 YTD 2023 Net Income (Loss) $3.2 ($6.5) ($6.4) ($39.7) Interest Expense (Income), net 1.3 0.1 0.4 1.4 Depreciation and Amortization(1) 25.5 26.5 79.3 79.1 Income Tax Expense (Benefit) 1.5 (2.0) (0.1) 1.3 EBITDA $31.6 $18.1 $73.2 $42.1 Loss on business disposition(2) – – – 10.0 Non-cash impairment loss (3) – – – 0.1 Gain on extinguishment of debt(4) (13.1) – (13.1) – Non-cash change in fair value of assets and liabilities(5) 6.5 3.2 12.8 3.7 Share-based compensation expense(6) 6.5 5.7 19.3 16.3 Transaction expenses(7) 0.9 0.8 2.0 7.6 Restructuring and other strategic initiative costs(8) 2.2 3.1 7.0 8.5 Other non-recurring charges(9) 0.6 0.9 3.3 5.0 Adjusted EBITDA $35.1 $31.9 $104.3 $93.3
Full Year 2023 Adjusted EBITDA Reconciliation For the years ended December 31, 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 loss recognized related to the disposition of Blue Cow. 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, 2023, reflects non-cash goodwill impairment loss related to the Business Payments segment and non-cash impairment loss related to a trade name write-off of Media Payments. For the year ended December 31, 2022, reflects non-cash impairment loss related to trade names write-offs of BillingTree and Kontrol. For the year ended December 31, 2023, reflects the changes in management’s estimates of (i) the fair value of the liability relating to the Tax Receivable Agreement, and (ii) non-cash insurance reserve. For the year ended December 31, 2022, 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, 2023, professional service fees and other costs incurred in connection with the disposition of Blue Cow Software, and (ii) 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. 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, 2023 and 2022. For the year ended December 31, 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 year ended December 31, 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 December 31, 2023, no longer reflects non-cash rent expense. $MM FY 2023 FY 2022 Net Income (Loss) ($117.4) $8.7 Interest Expense (Income), net 1.0 4.2 Depreciation and Amortization(1) 103.9 107.8 Income Tax Expense (Benefit) (2.1) 6.2 EBITDA ($14.6) $126.9 Loss on business disposition(2) 10.0 – Non-cash change in fair value of contingent consideration(3) – (3.3) Non-cash impairment loss (4) 75.8 8.1 Non-cash change in fair value of assets and liabilities(5) 7.5 (66.9) Share-based compensation expense(6) 22.2 20.5 Transaction expenses(7) 8.5 19.0 Restructuring and other strategic initiative costs(8) 11.9 7.9 Other non-recurring charges(9) 5.5 12.3 Adjusted EBITDA $126.8 $124.5
Quarterly Adjusted Net Income Reconciliation 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 a gain on the repurchase of 2026 Notes principal, net of a write-off of debt issuance costs relating to the repurchased principal. 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 three months ended September 30, 2024, professional service fees incurred in connection with prior transactions, and (ii) during the three months ended September 30, 2023, professional service fees and other costs incurred in connection with the disposition of Blue Cow Software. 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. For the three months ended September 30, 2024, reflects franchise taxes and other non-income based taxes, non-recurring legal and other litigation expenses and payments made to third-parties in connection with our IT security and personnel. For the three months ended September 30, 2023, reflects non-recurring payments made to third-parties in connection with an expansion of our personnel, one-time payments to certain partners and franchise taxes and other non-income based taxes. Represents amortization of non-cash deferred debt issuance costs. Represents pro forma income tax adjustment effect associated with items adjusted above. ($MM) Q3 2024 Q3 2023 Net Income (Loss) $3.2 ($6.5) Amortization of acquisition-related intangibles(1) 19.1 19.8 Gain on extinguishment of debt(2) (13.1) – Non-cash change in fair value of assets and liabilities(3) 6.5 3.2 Share-based compensation expense(4) 6.5 5.7 Transaction expenses(5) 0.9 0.8 Restructuring and other strategic initiative costs(6) 2.2 3.1 Other non-recurring charges(7) 0.6 0.9 Non-cash interest expense(8) 0.8 0.7 Pro forma taxes at effective rate(9) (5.4) (7.8) Adjusted Net Income $21.2 $19.9
Free Cash Flow Reconciliation 2021 2022 2023 2024 Full Year $MM Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2021 2022 2023 Net Cash provided by Operating Activities $4.8 $12.1 $14.6 $21.8 $13.8 $13.3 $25.3 $21.8 $20.8 $20.0 $28.0 $34.9 $24.8 $31.0 $60.1 $53.3 $74.2 $103.6 Capital expenditures Cash paid for property and equipment (0.6) (0.3) (0.9) (0.9) (0.6) (1.3) (0.8) (0.6) (0.5) 0.4 (0.9) (0.2) (0.1) (0.5) (0.2) (2.9) (3.2) (0.7) Cash paid for capitalized software development costs (1) (4.6) (5.2) (5.2) (5.7) (7.0) (5.1) (8.7) (7.4) (13.2) (10.4) (13.1) (12.9) (11.0) (11.2) (11.0) (20.6) (33.6) (50.1) Total capital expenditures (5.2) (5.5) (6.1) (6.7) (7.6) (6.3) (9.5) (7.9) (13.7) (10.0) (14.0) (13.1) (11.1) (11.7) (11.2) (23.5) (36.8) (50.8) Free Cash Flow ($0.4) $6.6 $8.5 $15.2 $6.2 $7.0 $15.9 $13.9 $7.1 $10.0 $13.9 $21.8 $13.7 $19.3 $48.8 $29.8 $37.4 $52.8 Adjusted EBITDA $20.5 $20.4 $24.5 $27.8 $29.3 $27.6 $31.7 $35.9 $30.9 $30.3 $31.9 $33.5 $35.5 $33.7 $35.1 $93.2 $124.5 $126.8 Free Cash Flow Conversion(2) (2%) 32% 35% 54% 21% 25% 50% 39% 23% 33% 44% 65% 38% 57% 139% 32% 30% 42% Historical periods beginning Q3 2023 reflect cash paid for intangibles assets that exclude acquisition costs that are capitalized as channel relationships Represents Free Cash Flow / Adjusted EBITDA Year to Date $MM Q3 2023 Q3 2024 Net Cash provided by Operating Activities $68.8 $115.8 Capital expenditures Cash paid for property and equipment (1.1) (0.8) Cash paid for capitalized software development costs (36.7) (33.3) Total capital expenditures (37.7) (34.1) Free Cash Flow $31.0 $81.8 Adjusted EBITDA $93.3 $104.3 Free Cash Flow Conversion(2) 33% 78%
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 2024 Q3 2023 Acquisition-related intangibles $19.1 $19.8 Software 6.0 6.4 Amortization $25.1 $26.2 Depreciation 0.4 0.3 Total Depreciation and Amortization $25.5 $26.5
Revenue and Gross Profit Growth Reconciliations Q3 2024 $MM Consumer Payments Business Payments Total Company Revenue Growth 1% 58% 6% Acquisitions / (Divestitures) impact n/a n/a n/a Organic Revenue Growth 1% 58% 6% Political Media contribution / (impact) n/a 55% 7% Organic Revenue Growth, excl. political media 1% 3% (1%) Q3 2024 $MM Consumer Payments Business Payments Total Company Gross Profit Growth 2% 67% 9% Acquisitions / (Divestitures) impact n/a n/a n/a Organic Gross Profit Growth 2% 67% 9% Political Media contribution / (impact) n/a 63% 8% Organic GP Growth, excl. political media 2% 4% 1%
Gross Profit Growth Reconciliation 2023 2024 $MM Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 YTD Gross Profit Growth 11% 8% 3% 2% 6% 9% 7% 9% 8% Acquisitions / (Divestitures) impact (2%) (4%) (6%) (6%) (4%) (2%) n/a n/a (1%) Organic Gross Profit Growth 13% 12% 9% 8% 10% 11% 7% 9% 9% Political Media contribution / (impact) (<1%) (2%) (3%) (5%) (3%) 1% 2% 8% 4% Organic GP Growth excl. political media 13% 14% 12% 13% 13% 10% 5% 1% 5%
Historical Segment Details Note: Historical periods reflect the reclassification of revenue and gross profit between Consumer Payments and Business Payments segments 2022 2023 2024 Full Year $MM Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2022 2023 Consumer Payments $61.1 $59.8 $63.0 $64.3 $69.9 $65.9 $68.7 $71.1 $76.1 $69.3 $69.2 $248.2 $275.7 Business Payments 8.9 9.9 11.4 12.3 8.7 9.8 9.7 9.9 9.7 10.6 15.3 42.6 38.1 Intercompany eliminations (2.4) (2.3) (2.9) (4.0) (4.1) (4.0) (4.1) (5.0) (5.1) (5.0) (5.3) (11.6) (17.1) Revenue $67.6 $67.4 $71.6 $72.7 $74.5 $71.8 $74.3 $76.0 $80.7 $74.9 $79.1 $279.2 $296.6 Consumer Payments $47.5 $46.1 $49.7 $53.1 $54.6 $51.7 $53.6 $56.2 $59.6 $55.5 $54.9 $195.5 $216.1 Business Payments 5.9 7.0 8.1 8.6 6.0 7.2 7.2 7.5 7.0 8.0 12.0 30.4 28.0 Intercompany eliminations (2.4) (2.3) (2.9) (4.0) (4.1) (4.0) (4.1) (5.0) (5.1) (5.0) (5.3) (11.6) (17.1) Gross Profit $51.0 $50.7 $54.9 $57.8 $56.6 $54.9 $56.7 $58.7 $61.5 $58.6 $61.6 $214.4 $226.9 Consumer Payments 77.8% 77.0% 79.0% 82.6% 78.1% 78.4% 78.0% 79.0% 78.3% 80.2% 79.3% 78.8% 78.4% Business Payments 66.5% 70.0% 70.4% 70.1% 69.5% 73.3% 74.1% 76.6% 72.8% 75.7% 78.5% 71.4% 73.5% Gross Profit Margin 75.5% 75.2% 76.8% 79.5% 75.9% 76.5% 76.3% 77.3% 76.2% 78.2% 77.8% 76.8% 76.5%
Investor Presentation Exhibit 99.3 November 2024
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, 2023 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. Each of “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” 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 is a non-GAAP financial measure that represents net cash flow provided by operating activities less total capital expenditures. Free Cash Flow Conversion represents Free Cash Flow divided by Adjusted EBITDA. 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 descriptions, 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.
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 2021A–2023A As of 9/30/2024 Free Cash Flow Conversion calculated as 2023A Free Cash Flow / 2023A Adjusted EBITDA. These are non-GAAP measures. See slide 1 for definitions and slides 30 and 31 for additional details 2023 ANNUAL CARD PAYMENT VOLUME HISTORICAL GROSS PROFIT CAGR(1) SOFTWARE INTEGRATIONS(2) $25.7Bn 18% 276 42% FREE 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 9/30/2024 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) SUPPLIER NETWORK _ 330,000+ # OF ISV INTEGRATIONS 53 276 Delivering Superior Results (4) Third Quarter 2024(2) July 2019(1) REVENUE GROSS PROFIT ADJ. EBITDA +16% +18% As of 7/11/2019 (the closing date of the Business Combination) As of 9/30/2024 Third-party research and management estimates Represents CAGR from 2021A-2023A. See slide 30 for Adjusted EBITDA reconciliation and slide 31 for Free Cash Flow reconciliation +17% FREE CASH FLOW +33%
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 Expand New & Existing Software Partnerships Buy Now. Pay Later. Growth Opportunities $25.7Bn REPAY’s 2023 Annual Card Payment Volume 1) Third-party research and management estimates as of 9/30/2024 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 37% CAGR Software Integrations Management estimate as of 9/30/2024
Attractive and Diverse Client Base Across Key Verticals REPAY’s platform provides significant value to our clients 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 9/30/2024. Reflects the reclassification of partnerships between Consumer Payments and Business Payments segments Management estimate as of 12/31/2023, which includes normalization for political media contributions Percentage of Card Payment Volume (2) One-stop shop B2B payments solutions provider, offering AP automation and AR merchant acquiring solutions Integrations with ~100(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 ~176(1) integrations 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 2023 ANNUAL CARD PAYMENT VOLUME $25.7B SOFTWARE INTEGRATIONS(1) 276 FREE CASH FLOW CONVERSION(2) 42% HISTORICAL REVENUE CAGR(3) 16% HISTORICAL GROSS PROFIT CAGR(3) 18% HISTORICAL ADJUSTED EBITDA CAGR(3) 17% REPAY’s Unique Model Translates Into A Highly Attractive Financial Profile As of 6/30/2024 Free Cash Flow Conversion calculated as 2023A Free Cash Flow / 2023A Adjusted EBITDA. These are non-GAAP measures. See slide 1 under “Non-GAAP Financial Measures” and see slides 30 and 31 for reconciliations CAGR is from 2021A-2023A
Total Card Payment Volume ($Bn) Revenue ($MM) Significant Volume and Revenue Growth… REPAY has generated strong, consistent volume growth, resulting in ~$25.7Bn in annual card processing volume in 2023 REPAY’s revenue growth has been strong, resulting in 16% CAGR from 2021 to 2023 1.07% 1.09% 1.16% 12% CAGR 16% CAGR Take Rate (1) Take rate represents revenue / card payment volume
Gross Profit ($MM)(1) Adjusted EBITDA ($MM)(2) ...Translating into Accelerating Profitability… Gross margins continue to improve from processing cost savings Highly scalable platform with attractive margins 75% 77% 77% 43% % Margin 45% 43% % Margin Gross profit represents revenue less costs of services This is a non-GAAP measure. See slide 1 under “Non-GAAP Financial Measures” and see slide 30 for reconciliation 17% CAGR 18% CAGR
Consumer Payments Business Payments …Across Our Segments 15% y/y organic growth (2) Gross Profit Margin 78.8% 78.4% Take Rate 1.23% 1.29% Take rate represents revenue / card payment volume Organic growth is a non-GAAP financial measure. See slide 1 under “Non-GAAP Financial Measures” and slide 32 for reconciliation Business Payments revenue and gross profits excl. political media is a non-GAAP financial measure. See slide 1 under “Non-GAAP Financial Measures” and slide 32 for reconciliation Gross Profit Margin 71.4% 73.5% Take Rate 0.78% 0.90% (1) (1) 16% y/y organic growth (2) (11% reported growth) (11% reported growth) 3% y/y growth, excl. political media (3) (-11% reported growth) 10% y/y growth, excl. political media (3) (-8% reported growth)
Adjusted EBITDA Reconciliation For the years ended December 31, 2023, 2022 and 2021, reflects amortization of client relationships, non-compete agreement, software, and channel relationship intangibles acquired through the Business Combination, and client relationships, non-compete agreement, and software intangibles acquired through our acquisitions of TriSource, APS, Ventanex, cPayPlus, CPS, BillingTree, Kontrol 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 loss recognized related to the disposition of Blue Cow Software. Reflects write-offs of debt issuance costs relating to Term Loans. Reflects realized loss of our interest rate hedging arrangement which terminated in conjunction with the repayment of Term Loans. 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, 2023, reflects non-cash goodwill impairment loss related to the Business Payments segment and impairment loss related to a trade name write-off of Media Payments. For the year ended December 31, 2022, reflects impairment loss related to trade names write-offs of BillingTree and Kontrol. For the year ended December 31, 2021, reflects impairment loss related to trade names write-offs of TriSource, APS, Ventanex, cPayPlus and CPS. For the year ended December 31, 2023, reflects the changes in management’s estimates of (i) the fair value of the liability relating to the Tax Receivable Agreement, and (ii) non-cash insurance reserve. For the years ended December 31, 2022 and 2021, 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, 2023, professional service fees and other costs incurred in connection with the disposition of Blue Cow Software, (ii) during the year ended December 31, 2022, professional service fees and other costs incurred in connection with the acquisitions of BillingTree, Kontrol and Payix and (iii) during the year ended December 31, 2021, professional service fees and other costs incurred in connection with the acquisitions of Ventanex, cPayPlus, CPS, BillingTree, Kontrol 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 our processing services and other operational improvements, including restructuring and integration activities related to our acquired businesses, that were not in the ordinary course during the years ended December 31, 2023, 2022 and 2021. Additionally, for the year ended December 31, 2022, reflects one-time severance payments. For the year ended December 31, 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 year ended December 31, 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. For the year ended December 31, 2021, reflects one-time payments to certain clients and partners, other payments related to COVID-19, payments made to third-parties in connection with expansion of our personnel, franchise taxes and other non-income based taxes and non-cash rent expense. Beginning in the year ended December 31, 2023, no longer reflects non-cash rent expense. ($MM) 2021A 2022A 2023A Net Loss ($56.0) $8.7 ($117.4) Interest Expense 3.7 4.2 1.0 Depreciation and Amortization(1) 89.7 107.8 103.9 Income Tax Benefit (30.7) 6.2 (2.1) EBITDA $6.6 $126.9 ($14.6) Loss on business disposition (2) – – 10.0 Loss on extinguishment of debt(3) 5.9 – – Loss on termination of interest rate hedge(4) 9.1 – – Non-cash change in fair value of contingent consideration(5) 5.8 (3.3) – Non-cash impairment loss(6) 2.2 8.1 75.8 Non-cash change in fair value of assets and liabilities(7) 14.1 (66.9) 7.5 Share-based compensation expense(8) 22.3 20.5 22.2 Transaction expenses(9) 19.3 19.0 8.5 Restructuring and other strategic initiative costs(10) 4.6 7.9 11.9 Other non-recurring charges(11) 3.3 12.3 5.5 Adjusted EBITDA $93.2 $124.5 $126.8
Free Cash Flow Reconciliation Excludes acquisition costs that are capitalized as channel relationships. Represents Free Cash Flow / Adjusted EBITDA. ($MM) 2021A 2022A 2023A Net Cash provided by Operating Activities $53.3 $74.2 $103.6 Capital expenditures Cash paid for property and equipment (2.9) (3.2) (0.7) Cash paid for intangible assets (20.6) (33.6) (50.1) Total capital expenditures(1) (23.5) (36.8) (50.8) Free Cash Flow $29.8 $37.4 $52.8 Adjusted EBITDA $93.2 $124.5 $126.8 Free Cash Flow conversion(2) 32% 30% 42%
2023 Growth Reconciliation FY 2023 $MM Consumer Payments Business Payments Total Company Revenue Growth 11% (11%) 6% Growth from Acquisitions / (Divestitures) (4%) n/a (4%) Organic Revenue Growth 15% (11%) 10% Growth from Political Media n/a (14%) (2%) Organic Revenue Growth, excl. political media 15% 3% 12% FY 2023 $MM Consumer Payments Business Payments Total Company Gross Profit Growth 11% (8%) 6% Growth from Acquisitions / (Divestitures) (5%) n/a (4%) Organic Gross Profit Growth 16% (8%) 10% Growth from Political Media n/a (18%) (3%) Organic GP Growth, excl. political media 16% 10% 13%
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