Good morning and thank you for joining us. With me today are Tom Priore, Chairman and Chief Executive Officer of Priority Technology Holdings and Tim O'Leary, Chief Financial Officer. Before giving our prepared remarks, I would like to remind all participants that our comments today will include forward-looking statements, which involve a number of risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. The company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events, or otherwise. We provide a detailed discussion of the various risk factors in our SEC filings, and we encourage you to review these filings. Additionally, we may refer to non-GAAP measures, including but not limited to EBITDA and adjusted EBITDA during the call. Reconciliations of our non-GAAP performance and liquidity measures to the appropriate GAAP measures can be found in our press release and SEC filings available in the Investors section of our website. With that, I would like to turn the call over to our Chairman and CEO, Tom Priore.

Thank you, Meghna, and thanks to everyone for joining us for our first quarter 2025 earnings call. I'll begin today's call by highlighting our aggregate performance that reinforces our consistent revenue and adjusted EBITDA guidance for 2025, before handing it over to Tim, who will provide segment-level performance, key trends and developments within each of our business segments, and priority overall. This morning, we reported strong growth in both revenue and profit, despite the economic uncertainty over the impact of tariffs and government cuts that emerged in Q1. Summarized on Slide 3, Priority had a solid Q1 by every key financial metric, growing net revenue by 9%, generating adjusted gross profit and adjusted EBITDA growth of 14% and 11%, respectively, and increasing adjusted EPS by $0.19 year-over-year. We ended the first quarter with over 1.3 million total customer accounts operating on our e-commerce platform, up from 1.2 million at the end of the year. Annual transaction volume increased by $5 billion to over $135 billion, and account balances under administration improved to $1.3 billion versus $1.2 billion at year-end 2024. Tim will walk through the full year 2025 guidance specifics and some of the more noteworthy trends we are seeing within our SMB acquiring, B2B payables, and enterprise payment segments later in the call. Based on strong growth trends and continued favorable shifts in business mix, I'm confident that the company can achieve 10% to 14% top-line revenue growth to a range of $965 million to $1 billion, and generate adjusted EBITDA of $220 million to $230 million in 2025. This confidence comes from the value of our unified commerce platform, which streamlines collecting, storing, lending, and sending money that is delivering revenue and operational success to our customers, despite likely headwinds related to lower interest rates and a somewhat murky macroeconomic environment. Turning our attention to our Q1 results noted on Slide 4, revenue of $224.6 million increased 9% from the prior year. This led to a 14% increase in adjusted gross profit to $87.3 million, and an 11% improvement in adjusted EBITDA to $51.3 million. Adjusted gross profit margin of 38.9% increased 170 basis points from the prior year's quarter. For those of you who are new to Priority, Slide 5 highlights our vision for unified commerce. The Priority Commerce engine is purpose-built to streamline collecting, storing, lending, and sending money, and delivers a flexible financial tool set for merchant services, payables, and banking and treasury solutions to accelerate cash flow and optimize working capital for businesses. I would encourage you to play the short one to two minute videos embedded in the product link on this slide to gain a more fulsome appreciation for their value and how they are being leveraged by our growing customer base. While our financial performance demonstrates that partners consistently choose Priority to help power their business, I thought it would be useful for investors to gain a deeper appreciation of why we are emerging as a go-to solution provider for embedded finance solutions. Using an implementation framework, we typically see within our enterprise payment segment. Slide 6 highlights the typical partner integration to our payments and banking API. Importantly, this framework is consistently applied whether the partner is a sports management software company, a debt resolution provider leveraging CFTPay, or a payment facilitator, or property management technology company. Customers connect and can access all routes for digital payment acceptance as well as lockbox for checks, great FDIC pass-through insured, full-feature virtual bank accounts, and virtual and physical card issuing, bill payment, and automated payables options at their own pace. Our tightly coupled platform creates two important benefits for Priority's long-term prospects. First, it allows our partners to choose their adventure, as we like to say, and evolve their offering to respond to opportunities as we add features in collaboration with their goals. Both parties have a clear line of sight to quantify and access revenue growth opportunities. This creates loyalty and gives us the ability to grow with our partners. Second, by maintaining operational workflow consistency across implementation in diverse industry segments, we can clearly identify our operational metrics in key areas like compliance, payment operations, risk, application support, and the like to ensure that we scale cost-efficiently. We're committed to meeting our customers where they are by refining the experience for our partners in order to make working with Priority seamless and easy. Now, this vision explains why we've been able to continually transform Priority into a high-performing payments and banking Fintech with consistently strong recurring revenue prospects. Our customers and current market conditions reinforce our belief that systems facilitating payments and banking solutions to accept and distribute funds in multi-party environments will be critical as businesses put greater demands on software and payment solution providers to unlock value in existing and developing channels. At this point, I'd like to hand it over to Tim, who will provide further insight into the health of our business segment along with current trends in each that factored into our first quarter results and confidence for sustained performance in 2025.

Thank you, Tom, and good morning, everyone. I'll start on Slide 8. As Tom mentioned, we had strong financial performance across the business in the first quarter and the Priority commerce engine continues to generate high growth in our higher margin operating segments. I'll go into more detail in the segment results, but B2B revenue grew over 12% and enterprise revenue grew over 22% on a year-over-year basis for the quarter. That growth has resulted in adjusted gross profit from our B2B and enterprise segments, now representing 62% of our total. The growth in those higher margin segments also allowed for overall margin expansion as adjusted gross profit margins improved by over 170 basis points from Q1 2024. The continued shift in our business mix also contributes to the highly visible and recurring nature of our business model as nearly 62% of adjusted gross profit in Q1 came from recurring revenues that are not dependent on transaction counts or card volumes. Moving now to the segment level results and starting with the SMB segment on Slide 9, SMB generated Q1 revenue of $151.7 million, which is $7.7 million or 5.3% higher than last year. Day count for the quarter compared to last year had an approximate 2% drag on the growth rate. SMB's revenue growth was a combination of strong 10% growth in the core portfolio, partially offset by the continued attrition of historical residual portfolio purchases, along with risk pairing and specialized acquiring in advance of certain network program management changes being implemented that we believe will benefit us in the future. Total card volume was $17.7 billion for the quarter, which is up 3.4% from the prior year. Again, day count also had an impact on volume growth, giving fewer processing days in Q1 of 2025. From a merchant standpoint, we averaged approximately 178,000 accounts during the quarter, up modestly from 177,000 in Q1 of 2024, while new monthly boards averaged 4,100 during the quarter compared to 4,300 in Q1 of last year and 3,700 in Q4. Adjusted gross profit in SMB for the first quarter was $33.1 million, which is 3.9% higher than last year's first quarter. Gross margins of 21.8% in the quarter are down 30 basis points from last year, but sequentially increased almost 130 basis points from Q4 as we recovered certain credit losses during the quarter that were charged off in early 2024. On a year-over-year basis, margins were impacted by the combination of reseller mix, lower specialized acquiring revenue, and the attrition of historical residual portfolio purchases. Lastly for SMB, adjusted EBITDA was $25.7 million, which is up 2.7% from last year. Adjusted EBITDA growth lagged adjusted gross profit growth in the quarter because of increased salary and benefits, along with higher software expenses related to the previously discussed migration to the public cloud, which will convert certain CapEx to OpEx, but provide longer-term benefits to the company. Moving to B2B, revenue of $23.9 million was an increase of 12.1%, or $2.6 million from the prior year. Our buyer-funded revenues grew by 7.1%, while supplier-funded revenues grew by 35% on a year-over-year basis. To clarify, when we use the terms buyer-funded and supplier-funded, we're referring to who is paying the interchange or credit card-related fees. In the supplier-funded model, or what we've historically referred to as CPX, the supplier accepted card payment net of the interchange discount because they want to receive the payment faster while receiving the funds electronically with reconciliation back into their GL and without the cost of handling paper checks. In the buyer-funded model, which came by the plastic acquisition, the buyer pays the card fee because they want to utilize existing credit card capacity to extend their payables terms and optimize their working capital while generating cash back or rewards points for using their card. The buyer-funded businesses' increased focus on enterprise-level customers and large bank referral partners showed success in the quarter as companies seek to optimize their working capital and streamline their payables operations in the face of rising input costs, whether resulting from general inflation or from increased tariff rates. Adjusted gross profit in B2B increased to $7.3 million in the quarter, which is a 17.8% increase over the prior year. For the quarter, gross margins were 30.5%, or 150 basis points higher, compared to 29% in the first quarter of 2024. The B2B segment produced $3.5 million of adjusted EBITDA during the quarter, which was a $1.8 million, or 101% increase over the comparable period in 2024. The acceleration of adjusted EBITDA growth compared to adjusted gross profit was driven by strong operating leverage in the segment, including a 14% reduction in operating expenses on a year-over-year basis. Moving to the enterprise segment, Q1 revenue of $50.1 million was an increase of $9.1 million, or 22.2% from the prior year. Revenue growth was driven by continued strong enrollment trends and an increase in the number of billed clients in CFTPay, combined with an increase in the number of integrated partners and organic same-store sales growth with those existing partners. Higher account balances in CFTPay and Passport were able to largely offset the impact of lower interest rates in the quarter. As a result of those factors, adjusted gross profit for the enterprise segment also increased by 22.2% to $46.9 million, while adjusted gross profit margins remained at 93.6%. Adjusted EBITDA for the quarter was $42.4 million, an increase of $7.7 million, or 22.2% from the prior year's first quarter. Overall profitability in enterprise was driven by continued strong performance in CFTPay, which offset investments made in newer verticals that we believe will provide the next lag of the growth stool for the enterprise segment. Moving to consolidated operating expenses, salaries and benefits of $25.8 million increased by $3.6 million, or 16.4% compared to Q1 of last year, and SG&A of $15.1 million increased by $4.1 million from Q1 of 2024. Higher SG&A expenses were driven by increased spend on software, including the continued public cloud migration, higher marketing expenses in the quarter, and certain nonrecurring legal and other expenses, including those related to the secondary equity offering we closed in January. Moving to the capital structure and liquidity overview, debt levels during the quarter declined to $935.5 million, following a $10 million prepayment of a term loan during the quarter. We ended the quarter with $117.6 million of available liquidity, including all $70 million of borrowing capacity available under our revolving credit facility, and $47.6 million of unrestricted cash on the balance sheet. For the LTM period, ended March 31st, adjusted EBITDA of $209.2 million represents $4.9 million of sequential quarterly growth from $204.3 million at the end of Q4. This growth in adjusted EBITDA combined with net debt of $887.9 million resulted in net leverage of 4.2 times at quarter end, which is down from 4.3 times at 2024's year end. As mentioned on our last earnings call, we will continue to focus on opportunities to reduce leverage on our balance sheet while also remaining nimble in the face of inorganic growth opportunities in this market. If you were to use the midpoint of our 2025 adjusted EBITDA guidance, we would be under four times leverage by year end based on today's net debt balance. This is the first quarter since I joined Priority where this page doesn't include mention of the preferred stock dividend. With the redemption in full of the preferred stock in 2024, I'm happy to report that all of our net income now flows to the benefit of our common shareholders, which resulted in adjusted EPS of $0.22 for the quarter. That compares to $0.18 in Q4 2024 and $0.03 in Q1 of last year. As Tom mentioned, based on our Q1 results and our forecast for the remainder of the year, we are maintaining the full year financial guidance that was provided on our Q4 2024 earnings call. This outlook is informed by the current environment where consumer spending remains stable and interest rate changes remain aligned with current market forecasts. If you compare Q1 results to the full year guidance, the simple math will show that we're not 25% of the way there yet, but our expectation is and has been that we will grow revenue and profits sequentially each quarter as we move through the year. Before I turn the call back over to Tom, I wanted to provide an update on our progress in the remediation of the material weakness related to the design and operating deficiencies in certain automated controls around ingestion and validation of third-party processor data. As noted in our 10-K and comments on our last earnings call, the material weakness did not result in a restatement or any change to our consolidated financial results. The Board of Directors and management team are actively working to remediate the automated controls deficiency. As of today, the team has made substantial progress in those efforts, and we are testing the existing data translation controls in a non-production environment. Once we are certain those controls meet our internal standards and those of our external auditors, we will move them into a production environment for formal certification. To be clear, though, the material weakness will remain intact until we complete our fiscal 2025 audit process and receive a formal opinion from our external auditor. With that, I'll now turn the call back over to Tom for his closing comments.

Thank you, Tim. Before concluding, I want to speak to Priority's market positioning as consumers, businesses, and investors reconcile the current economic picture. There was a 0.3% decline in U.S. GDP during the first quarter. Consumer spending, which accounts for two-thirds of GDP, grew by only 1.8% in the quarter from a healthy 4% exiting 2024. April's 32% decline in consumer sentiment to levels not seen since the 1990s recession. It's clearly a challenging environment, but candidly, not one that has surprised us. Entering 2025, we believe the post-election optimism for economic growth required near-perfect execution, and we were more likely to experience measures of volatility and uncertainty. Therefore, our goals were basic: to gain market share in the acquiring segment as cyclical challenges we anticipated emerged, while continuing to strengthen our countercyclical assets, including automated payables and CFTPay, and investing efficiently in new verticals with large addressable markets that are still early in the adoption of integrated payment and banking solutions. In fact, during our 2024 year-end earnings call, we reflected that there was likely to be growing urgency for working capital solutions among U.S. businesses, as tariffs took shape, and that our CFTPay business was well-positioned for growth by assisting the increasing population of stressed consumers find financial wellness through debt resolution. As our results demonstrate, we executed in each regard. While the card brand networks and large-scale issuing banks reported 3% to 5% volume growth, our core acquiring channels produced 10% organic revenue growth. Meanwhile, our countercyclical segments grew 12% and 22% respectively, despite investment for the future in emerging integrated verticals like payroll and benefits, real estate and construction technology, and sports entertainment, where collecting, storing, and sending money are an important part of the value chain, which would cause a modest drag on our results while they scale. Now, I offer these observations to our stakeholders with humility and recognition from our teams that success must be earned each day, with relentless pursuit of execution and openness to critique and thorough evaluation to avoid complacency, particularly as economic conditions can further erode. We're hopeful that our consistent results in the first quarter of 2025, and a unified commerce vision that has delivered five-year compound annual adjusted EBITDA growth of 19.8% through the end of 2024, will convince our current and future stakeholders that Priority routinely stays ahead of the market trends and that its technology, operations, and decision-making are geared for the future of payments and banking. To put it simply, we're built differently. As always, I want to thank my colleagues at Priority who continue to work incredibly hard to deliver industry-leading results. Your commitment and dedication to improving everything we do is clear, providing our partners and customers with a constant reminder that they made the right decision to partner with Priority. Last, we continue to appreciate the ongoing support of our investors and analysts, and for those in attendance who are new to Priority for taking the time to participate in today's call. Operator, we would like to now open the call for questions.

Greetings and welcome to the Priority Technology Holdings Q1 2025 Earnings Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Meghna Mehra, Managing Director, ICR. Thank you. You may begin.

Hey, thanks, guys. Quick question on expenses. SG&A dollars and salaries and benefits rose about $5 million in spending sequentially, and I know you called out, you know, the secondary offering and the cloud migration. Could you parse out some of those numbers for us to let us know, you know, if you can, the details of how much that cloud is different than a year ago and any other kind of expense variances you can share with us?

Sure, thanks, Hal. Yes, if you look at the SG&A in particular for Q1 of this year and compare that to last year, if you normalize for the non-recurring items, right, obviously we had about $2.2 million this year in non-recurring items and about $0.8 million last year. So if you adjust for those, SG&A was up about 26% year-over-year. Another million or so of that is related to the continued migration from, you know, the private hybrid cloud to the public cloud. So you'd have to adjust for that as well. So that was really the large part of the drivers there in SG&A. And then on the salary and benefits side, you know, a lot of that is just driven by some of the headcount additions last year that obviously didn't have a full year impact into the financials, you know, in Q3 or Q4 of last year, but you've got the full quarter impact of that this year. I think going forward though, obviously we've maintained our guidance and feel comfortable with where we sit from an overall margin standpoint and some of the trends on the expense side and continue to look at efficiencies, especially across the technology part of the team and things we can utilize automated tools for. So, we'll continue to evaluate those opportunities to manage expenses from here.

I have one follow-up. I think you mentioned the number 62%, I think twice, I think, or me. You said 62% of your gross product or gross profit dollars now are coming from B2B and enterprise. Is that right? We sure heard that right.

It is. And actually this quarter, both of the numbers I referenced were 62%. So probably a little confusing with the exact same figure, but the gross profit coming from B2B and enterprise aggregates to just over 62% for the quarter. And then the other figure I referenced at 62% is the percentage of our adjusted gross profit that comes from recurring revenues in the quarter.

Okay. And that includes some, you know, just recurring revenues and SMB.

It does. It includes, yes. That's on a consolidated basis. That's right.

Okay. Before we move on, I wanted to ask about your recent win with the Minnesota Wild, which is a significant enterprise. Can you share your insights on the sales cycle for that contract, how you secured it, and what factors contributed to your selection over other competitors in the stadium sector? Thank you.

Yes, Hal. I want to highlight an additional point related to expenses. Migrating to the public cloud allows us to improve engineering efficiency by standardizing the engineering work that gets done. More people can operate within that environment, so we expect to see some of this efficiency reflected in our operating expenses in the upcoming quarters. Regarding the press release about the Minnesota Wild, I believe the comments from their Chief Revenue Officer were quite clear. We've enhanced ticketing efficiency and also improved banking transparency and cash flow management. By combining payments and banking on a single platform, we can manage revenue more effectively. Instead of funneling all funds into one settlement bucket, we can distribute them like a clearing account. As money comes in, the reconciliation of batches is automated, allowing for swift transfers to their operating bank account. You might be surprised to learn that although many sports organizations have seen their valuations skyrocket, many are still small market teams managed by a limited number of personnel. As a result, funds in their systems may not be earning interest in overnight investments. Our tools help them optimize working capital and deploy their funds quickly, which is a key reason for our success. We provide a more comprehensive toolset to accelerate cash flow and optimize working capital, resonating with both professional sports franchises and small local businesses.

Yes. Very good. One last thing. Could you comment on the, you know, Q1 this year versus last year had one last day and Easter was several weeks into April versus in March a year ago. Did that one last day bear any impact on volume and flow and income and revenue in any manner?

It did. It did. I'll let Tim speak to the specifics, but it also, you know, I would also add in you had the, you know, had President Carter's funeral, which, you know, we saw some weird influence there in the way it affected volume. So there's a few abnormalities from the historical in this quarter.

Okay. And how it does, obviously your intuition's right. So one last day this year compared to Q1 of last year. If you look at just our daily revenue, it impacts SMB the most. I mean, the daily revenue there, it's, you know, about $1.6 million, $1.7 million, right? So it's got an impact. And then if you look at just Q4 to Q1, there's two days of difference between Q4 and Q1. So that has an impact on us as well.

Hey, guys. Good morning. Thanks for taking the question. First, I appreciate the outlook for growing overall revenue and profit sequentially as you go through 2025. Are there any important considerations as you get into the segment forecast on growth and profit as you go through 2Q and the balance of the year?

I think the biggest potential impact that would affect maybe one segment more than others is just if there's any, you know, major shift in rate curves. And you think about where interest rates go and how that impacts our balances and the income we generate on permissible investments. At this point, we've taken the latest estimates we have from, you know, the other forward curves and applied that against our 3 plus 9 forecast. And ultimately, obviously, you know, roll that into how we feel about the full year guidance. But if there's any meaningful shift in rates, which, look, at this point, you know, we've assumed, you know, three cuts this year consistent with what we're seeing in the Fed dollar plot and some of the curves. So if that changes one way or the other, then, you know, that could have an impact certainly on the high margin interest income we generate on the permissible investments.

Okay. Okay. Makes sense. And then within SMB, so 10% growth in the core ex, the residual attrition and the risk pairing, can you scale just the impact between those two categories? And how should we be thinking about the remaining size of the business that may face incremental risk pairing as you go forward?

Sure. I would say that most of the impact, likely a ratio of two to one or more, is primarily due to risk pairing rather than the runoff from historical residual purchases. I don't anticipate seeing significant changes on the risk pairing side. We believe we're in a solid position in that portfolio and are proactively addressing some of the potential changes that Tom can discuss. Overall, I think all of this has been considered in our guidance and the timing of our quarterly estimates.

Yes, Brian, to provide more detailed context, there are some network adjustments happening within the specialized e-commerce space. This means there will be an increase in reporting requirements, and the way networks assess performance is going to become more rigorous. In anticipation of this, we've taken steps to reduce our footprint, believing that several historical players in this space will likely exit due to economic pressures that will make it unsustainable for them. We expect this will ultimately benefit us in the long run, and we're positioning ourselves in advance of these market realities being recognized by participants. This is why we aim to stay ahead of emerging opportunities.

Hey, good morning. Thank you for taking my questions. Given your exposure to consumer spending, small businesses, I thought you guys might have a pretty good sense of how those customer segments have reacted to the tariffs and economic uncertainty since Liberation Day. Have you guys seen any notable changes in behavior or anything like that?

Nothing material yet, Tim. Obviously, Liberation Day came in after the quarter, so we haven't really seen a dramatic shift in anything. And, you know, if we continue to look at just recent volume trends here even after the quarter, I think, you know, relatively consistent. And I think some of this goes to the mix of customers we have as well. If you think about our overall portfolio, you know, we feel like we've got some good resilience, you know, in that portfolio. We certainly have, you know, restaurants who make up a good portion, kind of mid- to high-teens percentage of the portfolio, which could have an impact. But if you think about the retail component of our end market, while that's, you know, high 20% range as a percentage of the portfolio, if you break that apart even further and look at the mix within that retail component, you've got package stores or liquor stores, you've got auto parts stores, right, you've got other end markets that have more resiliency. And then we also have, obviously, meaningful components in, you know, professional or business services, including, you know, law firms, doctors' offices, other areas that are more recession-resistant. So, look, we'll see some impact, but we think we're well-positioned for what we expect to happen in the consumer spend cycle.

I would like to highlight that based on recent research from various banks regarding small business owner sentiment, businesses generating over $500,000 in revenue are mostly reporting minimal to no concerns, with no significant decline observed. On average, our customers are processing nearly $40,000 on bank cards each month, indicating they are larger, healthier clients. Our strategy focuses on targeting the upper segment of small businesses, which we believe contributes to our stability.

Okay. Got it. That's helpful. And then, within your enterprise segment, what kind of impact do you think some of this uncertainty recession could have on the debt resolution business? Like, have you started to see a pickup in activity there? I think there could be a lot of opportunities with some of the layoffs related to Doge and maybe even as student loan payments are now being reported to credit bureaus. And, you know, the potential for some students to be picked off, you know, repayment plans and see rising payments there, it's going to probably pressure a lot of consumers with debt.

We are observing several key indicators, and the headlines certainly provide insight. One notable trend is the steady increase in seriously delinquent unsecured credit card debt. We believe this presents a significant opportunity for CFTPay to support stressed consumers in finding resolutions. Historically, the data backs up this outlook, and Tim can provide details on the business and revenue trends. Typically, there is about a six-month delay before we notice an uptick in resolution efforts following economic downturns. Consumers often wait until they hit a 90-day delinquency before card issuers become aware, and those engaged in resolution typically have jobs, as being employed is necessary to participate in these processes. These were once healthy consumers capable of managing over $30,000 in unsecured debt, but their payment abilities have diminished recently. We anticipate a growing number of consumers fitting this profile, which should create more opportunities for us in the near future.

Okay, got it. That was really helpful. And if I could have one more. It seems like there's been an opportunity for you guys in the embedded finance space, largely related to some of the disruption and banking as a service relationships, you can call out the Evolve and Synapse situation. I believe another middleware provider, Solid, also recently filed for bankruptcy. What kind of opportunities has this created for you guys with your embedded finance and ledgering products?

We have found ourselves in a favorable situation and have concentrated on certain businesses within those platforms. I believe we will continue to achieve success, and you will see that in the upcoming months as these businesses move from less stable environments. We have been deliberate in differentiating our platforms and ensuring the stability of our banking partners while building with a long-term goal in mind. We are also maintaining our money transmission licenses to provide clarity and assurance to our bank partners regarding our compliance rigor. This positions us to take advantage of the challenges facing some banking and service providers that are struggling to remain viable in the present regulatory landscape.

Got it. Very helpful. Thank you.

And look, there was a question that was asked about, you know, the potential headwinds and Tim referenced, if interest rates were to decline more than have more than three cuts, right? The offset to that is deposit growth. So, we are seeing positive trends in deposit growth. A driver of that is, are the segments outside of our CFTPay application and other segments within enterprise, some of which are these vast providers looking for a more stable home.

Yes, thanks. Just a quick question. I want to talk about countercyclical, you know, payments here. I mean, is it possible for you guys to kind of parse out, you know, maybe some exposure to some of these end markets you referenced, like doctors' offices, lawyers, either in terms of like a dollar volume or revenue or even adjusted gross profit?

We can. From, I mean, just if you think about volume, Jacob, when you look at kind of the comments already made, I mean, restaurants as an end market is, you know, kind of mid to high teens, you know, call it, you know, 15% 16% of our volume. You know, retail starts to get up into, you know, the high 20% range. And then within that, there's obviously subsectors that, as I referenced, have some resiliency. So, there's a good mix thereof, I'd say, half of that volume is in end markets that have a good level of recession resistance. Legal services and doctors' offices, broader professional services, you know, that's up north of 16%, 17% percent of the portfolio. You start getting down into, you know, other, you know, smaller subsectors, real estate in those areas is, call it, 5%. Then everything from there really trails off, right? You've got things like education, sub-3%, public administration, sub-3%. So, really, the ones I've touched on already are the larger end markets and then pretty diversified from there.

Yes. I don't know that I would call it exposure. In fact, where I was going to transition your question, because I think the observation is a good one, where we see kind of a counter-cyclical opportunity is in B2B, right? Where you are seeing the influence of tariffs and some of what buyers in the U.S. have not prepared for. They're using our, you know, card strategies, working capital strategies in our B2B segment to help them manage through that. That's why, you know, you're seeing, you know, pretty outsized growth relative to consumer on the B2B side. Tim referenced it, you know, our plastic volume, you know, was up 7%. So, our buyer funded, our supplier funded was up 35%. So, this B2B automated payable suite of tools has meaningful counter-cyclical aspects.

That's helpful. I just have one last question. Congratulations on the success with Minnesota Wild ticketing. I was hoping they would reach the Western Conference semifinals for you. Can you share your thoughts on the differences in contracting with a venue like the Accel Energy Center, which is operated by the City of St. Paul? Do you see this as a step towards broader opportunities with the Wild and similar organizations?

Yes, it is. We are well positioned to help professional sports franchises optimize their payment environment. And I'll say their payment and banking environment. If you think about that stadium environment you referenced while, yeah, it's owned by the city, the team is still responsible for concerts, other activities within that venue that they're selling tickets within. And they need to account for those discrete properties differently. So, having a combination of flexible payment tools that can, you know, handle them all, but also, you know, do so with, I'll call it a banking container that can ease their reconciliation and operations and how they recognize that cash, maybe even revenue shares or other payouts that need to occur within it. It's a very useful financial tool set that brings them some efficiencies that their core bank providers, and it's not just true of the Wild, this is across the board, it's just not what banks do. So, that's where we're bringing value to the system. And we have a very healthy pipeline of like-minded franchises that we're speaking to about that very approach. So, as we get more wins, you know, we'll talk about it.

Great. Thank you. I just want to make sure I understood. Just under 40% of your revenues from restaurants and retail, just doing the simple math. So, I want to make sure I heard you right. In this slice of business, have the volumes or average back basket sizes materially changed? It sounds like no, at least since the beginning of April.

No, Brian. No major changes to the basket sizes, but I do want to clarify, when you say it's almost 40% of our revenue, it's about 40% of the volume in SMB, which obviously is meaning less from an overall revenue standpoint. Nothing that we wouldn't expect. Obviously, there's some seasonality in certain subsectors. You think of package stores and certain food stores, right? You're going to see a little bit of a bump around the holidays, and then that tails off a little bit more and it gets normalized levels in Q1. So, we saw some of that activity, which we expect, but outside of that, no other real meaningful shift in the volumes by end market. Sure. I think the overall free cash flow for the year is going to be pretty consistent with Q1. We had some working capital swings in Q1, just given timing of the quarter end. But if I think about cash flow more as an adjusted EBITDA walk down to free cash flow, if you take out the cash interest, taxes, CapEx, take out the non-recurring expenses, we had about $20 million of free cash flow in the quarter. I think you'll see consistent levels of cash flow compared to EBITDA as we go out through the year. So, $80 million plus of free cash flow for the year on that basis. Working capital swings may impact that a little bit, but that's mostly time-related. We don't have a lot of working capital in the business outside of just when the quarter happens to end. It usually normalizes the next quarter as things reverse if it ends midweek versus on a Friday or Monday.

And if $80 million is that number, how much to debt reduction and how much for other purposes?

We'll continue to evaluate debt reductions throughout the year. Obviously, we've made a $10 million prepayment in Q1. We'll continue to look at deleveraging over time. But we're also seeing some pretty unique opportunities in this market, given some of the dislocation we've seen out there. And Tom's referenced a few end markets on prior calls that we have interest in. So, we'll remain nimble around capital deployment. But I assure you the team here is very focused on the balance sheet to continue to focus on deleveraging if there's not some other meaningful value-enhancing activity out there available to us.

This concludes the question-and-answer session. I would like to turn the floor back over to Tom Priore for closing comments.

Thank you very much. I just want to, once again, thank everyone for their participation on the call. We appreciate everyone's support. And after any further questions, we'll get back to work. So, I hope everyone has a great rest of the week. And thanks again.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.