Priority Technology Holdings, Inc 8-K, filed May 6, 2025
Priority Technology Holdings, Inc. (PRTH)
8-K
2025-05-06
For: 2025-05-06
View Original
Added on
April 12, 2026
About this 8-K
Priority Technology Holdings, Inc filed this 8-K on May 6, 2025.
Items reported
- Item 2.02: Financial results
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
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)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||||||||
Registrant's telephone number, including area code: (800) 935-5961
(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 (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
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 May 6, 2025 , Priority Technology Holdings, Inc. ("Priority") issued a press release announcing its financial results for the quarter ended March 31, 2025. A copy of that press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
Item 7.01. Regulation FD Disclosure.
On May 6, 2025, Priority will hold an earnings conference call and webcast at 11:00 a.m. (Eastern Time) to discuss the financial results for the quarter ended March 31, 2025. The press release referenced in Item 2.02 contains information about how to access the conference call and webcast. A copy of the slide presentation to be used during the earnings call and webcast is furnished as Exhibit 99.2 to this Current Report on Form 8-K. The slide presentation also will be available on our website, www.prioritycommerce.com under the "Investor Relations" section.
The information in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits – The following exhibit is furnished as part of this Current Report on Form 8-K.
| Exhibit Number | Description | ||||
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL | ||||
SIGNATURE
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.
Dated: | ||||||||
| PRIORITY TECHNOLOGY HOLDINGS, INC. | ||||||||
| By: /s/ Timothy M. O'Leary | ||||||||
| Name: Timothy M. O'Leary | ||||||||
| Title: Chief Financial Officer | ||||||||
Priority Technology Holdings, Inc. Reports First Quarter Financial Results
Strong First Quarter Growth Driven by Performance Across Unified Commerce Platform
ALPHARETTA, GA - May 6, 2025 -- Priority Technology Holdings, Inc. (NASDAQ: PRTH) ("Priority" or the "Company"), the payments and banking fintech that streamlines collecting, storing, lending, and sending money to unlock revenue opportunities, today announced its first quarter 2025 financial results including strong year-over-year diversified revenue growth.
"Strong first quarter growth in revenue and profits continues to demonstrate the value of our Priority Commerce Engine, purpose built to help our customers accelerate cash flow and optimize working capital. We delivered consistent results across each of our SMB Acquiring, B2B Payables and Enterprise Payments segments," said Tom Priore, Chairman & CEO of Priority. “The blend of the diverse and counter-cyclical aspects of our platform combined with relentless execution to gain market share in traditional payment segments reinforces that Priority's technology, operations and vision have positioned us to excel through the remainder of 2025 and beyond despite an uncertain macro-economic environment.”
Highlights of Consolidated Results
First Quarter 2025 Financial Highlights compared with First Quarter 20241
•Revenue of $224.6 million increased 9.2% from $205.7 million
•Adjusted gross profit (a non-GAAP measure2) of $87.3 million increased 14.2% from $76.4 million
•Adjusted gross profit margin (a non-GAAP measure2) of 38.9% increased 170 basis points from 37.1%
•Operating income of $32.6 million increased 16.4% from $28.0 million
•Adjusted EBITDA (a non-GAAP measure2) of $51.3 million increased 10.7% from $46.3 million
•Adjusted EPS (a non-GAAP measure2) of $0.22 increased by $0.19, or 633.3%, from $0.03
(1)Certain amounts/percentages may not compute accurately due to rounding.
(2)See "Non-GAAP Financial Measures" and the reconciliations of Adjusted Gross Profit (non-GAAP), Adjusted Gross Profit Margin (non-GAAP), Adjusted EBITDA, and Adjusted EPS (non-GAAP) to their most comparable GAAP measures provided within this document for additional information.
1
Full Year 2025 Financial Guidance
Priority's outlook remains strong and we affirm our full year 2025 guidance as follows:
•Revenue forecast to range between $965 million to $1 billion, a growth rate of 10% to 14%, compared to fiscal 2024 results
•Adjusted gross profit (a non-GAAP measure) forecast to range between $360 million and $385 million, a growth rate of 10% to 17% compared to fiscal 2024 results
•Adjusted EBITDA (a non-GAAP measure) forecast to range between $220 million to $230 million, a growth rate of 8% to 13% compared to fiscal 2024 results
Conference Call
The Company will host a conference call on Tuesday, May 6, 2025 at 11:00 a.m. EST to discuss its first quarter financial results. Participants can access the call by phone in the U.S. or Canada at (877) 407-0752 or internationally at (201) 389-0912.
The Internet webcast link and accompanying slide presentation can be accessed at https://viavid.webcasts.com/starthere.jsp?ei=1717257&tp_key=17b579fc0a and will also be posted in the "Investor Relations" section of the Company's website at www.prioritycommerce.com/investors.
An audio replay of the call will be available shortly after the conference call until May 20, 2025, at 11:59 p.m. ET. To listen to the audio replay, dial (844) 512-2921 or (412) 317-6671 and enter conference ID number 13753537. Alternatively, you may access the webcast replay in the "Investor Relations" section of the Company's website at www.prioritycommerce.com/investors.
Non-GAAP Financial Measures
This communication includes certain non-GAAP financial measures that we regularly review to evaluate our business and trends, measure our performance, prepare financial projections, allocate resources, and make strategic decisions. We believe these non-GAAP measures help to illustrate the underlying financial and business trends relating to our results of operations and comparability between current and prior periods. We also use these non-GAAP measures to establish and monitor operational goals. However, these non-GAAP measures are not superior to or a substitute for prominent measurements calculated in accordance with GAAP. Rather, the non-GAAP measures are meant to be a complement to understanding measures prepared in accordance with GAAP.
2
Adjusted Gross Profit and Adjusted Gross Profit Margin
The Company's adjusted gross profit metric represents revenues less cost of revenue (excluding depreciation and amortization). Adjusted gross profit margin is adjusted gross profit divided by revenues. We review these non-GAAP measures to evaluate our underlying profit trends. The reconciliation of adjusted gross profit to its most comparable GAAP measure is provided below:
| (in thousands) | Three Months Ended March 31, | ||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Revenues | $ | 224,630 | $ | 205,719 | |||||||||||||||||||
| Cost of revenue (excluding depreciation and amortization) | (137,353) | (129,298) | |||||||||||||||||||||
| Adjusted gross profit | $ | 87,277 | $ | 76,421 | |||||||||||||||||||
| Adjusted gross profit margin | 38.9 | % | 37.1 | % | |||||||||||||||||||
| Depreciation and amortization of revenue generating assets | (4,668) | (3,900) | |||||||||||||||||||||
| Gross profit | $ | 82,609 | $ | 72,521 | |||||||||||||||||||
| Gross profit margin | 36.8 | % | 35.3 | % | |||||||||||||||||||
EBITDA and Adjusted EBITDA
EBITDA and adjusted EBITDA are performance measures. EBITDA is earnings before interest, income tax, and depreciation and amortization expenses ("EBITDA"). Adjusted EBITDA begins with EBITDA but further excludes certain non-cash costs, such as stock-based compensation and the write-off of the carrying value of investments or other assets, as well as debt extinguishment and modification expenses and other expenses and income items considered non-recurring, such as acquisition integration expenses, certain professional fees, and litigation settlements. We review the non-GAAP adjusted EBITDA measure to evaluate our business and trends, measure our performance, prepare financial projections, allocate resources, and make strategic decisions.
The reconciliation of adjusted EBITDA to its most comparable GAAP measure is provided below:
| (in thousands) | Three Months Ended March 31, | ||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Net income | $ | 8,268 | $ | 5,193 | |||||||||||||||||||
| Interest expense | 23,176 | 20,880 | |||||||||||||||||||||
| Income tax expense | 2,250 | 2,582 | |||||||||||||||||||||
| Depreciation and amortization | 13,777 | 15,253 | |||||||||||||||||||||
| EBITDA | 47,471 | 43,908 | |||||||||||||||||||||
| Debt modification and extinguishment expenses | 38 | — | |||||||||||||||||||||
| Selling, general and administrative (non-recurring) | 2,199 | 798 | |||||||||||||||||||||
| Non-cash stock-based compensation | 1,586 | 1,634 | |||||||||||||||||||||
| Adjusted EBITDA | $ | 51,294 | $ | 46,340 | |||||||||||||||||||
3
Further detail of certain of these adjustments, and where these items are recorded in our consolidated statements of operations, is provided below:
| (in thousands) | Three Months Ended March 31, | ||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Selling, general and administrative expenses (non-recurring): | |||||||||||||||||||||||
| Certain legal fees | 1,296 | 450 | |||||||||||||||||||||
| Professional, accounting and consulting fees | 1,044 | 189 | |||||||||||||||||||||
| Other expenses, net | 19 | 159 | |||||||||||||||||||||
| Litigation settlement | (160) | — | |||||||||||||||||||||
| $ | 2,199 | $ | 798 | ||||||||||||||||||||
4
Adjusted Earnings Per Share (Adjusted EPS)
Adjusted EPS is a performance measure. Adjusted EPS is calculated by dividing adjusted net income (loss) attributable to common shareholders by weighted average number shares outstanding for the respective periods.
Adjusted net income attributable to common shareholders begins with net income (loss) attributable to common shareholders adjusted to exclude various items listed below. We believe that adjusted EPS is a measure that is useful to investors and management in understanding our ongoing profitability and in analysis of ongoing profitability trends.
| (in thousands) | Three Months Ended March 31, | |||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
| Reconciliation of Adjusted EPS | ||||||||||||||||||||||||||
| Net income (loss) attributable to common shareholders | $ | 8,268 | $ | (8,050) | ||||||||||||||||||||||
| Debt extinguishment and modification costs | 38 | — | ||||||||||||||||||||||||
| Stock based compensation | 1,586 | 1,634 | ||||||||||||||||||||||||
| Other non-recurring expenses | 2,199 | 798 | ||||||||||||||||||||||||
| Amortization of acquisition related intangible assets | 9,314 | 11,692 | ||||||||||||||||||||||||
Tax impact of adjustments(1) | (3,556) | (3,670) | ||||||||||||||||||||||||
| Adjusted net income attributable to common share holders | $ | 17,849 | $ | 2,404 | ||||||||||||||||||||||
| Weighted average common shares outstanding (basic) | 78,774 | 78,021 | ||||||||||||||||||||||||
| Effect of dilutive potential common shares | 1,083 | 204 | ||||||||||||||||||||||||
| Adjusted Weighted average shares outstanding (diluted) | 79,857 | 78,225 | ||||||||||||||||||||||||
| Earnings (loss) per common share: | ||||||||||||||||||||||||||
| Basic | $ | 0.10 | $ | (0.10) | ||||||||||||||||||||||
| Diluted | $ | 0.10 | $ | (0.10) | ||||||||||||||||||||||
| Adjusted earnings per common share | ||||||||||||||||||||||||||
| Basic | $ | 0.23 | $ | 0.03 | ||||||||||||||||||||||
| Diluted | $ | 0.22 | $ | 0.03 | ||||||||||||||||||||||
(1)The tax impact calculated using the blended statutory income tax rate adjusted for discrete items (27.1% and 26.0% for the three months ended March 31, 2025 and March 31, 20204, respectively.)
5
Priority does not provide a reconciliation of forward-looking non-GAAP financial measures to their comparable GAAP financial measures because it could not do so without unreasonable effort due to the unavailability of the information needed to calculate reconciling items and due to the variability, complexity and limited visibility of the adjusting items that would be excluded from the non-GAAP financial measures in future periods. When planning, forecasting and analyzing future periods, the Company does so primarily on a non-GAAP basis without preparing a GAAP analysis as that would require estimates for various cash and non-cash reconciling items that would be difficult to predict with reasonable accuracy. For example, stock-based compensation expense would be difficult to estimate because it depends on the Company's future hiring and retention needs, as well as the future fair market value of the Company's common stock, all of which are difficult to predict and subject to constant change. As a result, the Company does not believe that a GAAP reconciliation would provide meaningful supplemental information about the Company's outlook.
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About Priority Technology Holdings, Inc.
Priority is a solution provider in Payments and Banking as a Service operating at scale with over 1.3 million active customers across its SMB, B2B and Enterprise channels processing approximately $135.0 billion in annual transaction volume and providing administration for over $1.3 billion in account balances. Priority is the payments and banking fintech that streamlines collecting, storing, lending, and sending money through its innovative commerce engine to unlock revenue and generate operational success for businesses. Additional information can be found at www.prioritycommerce.com.
Forward-Looking Statements
This press release 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, our plans, objectives, expectations and intentions with respect to future operations, products and services, and other statements identified by words such as "may," "will," "should," "anticipates," "believes," "expects," "plans," "future," "intends," "could," "estimate," "predict," "projects," "targeting," "potential" or "contingent," "guidance," "outlook" or words of similar meaning. These forward-looking statements include, but are not limited to, our 2025 outlook and statements regarding our market and growth opportunities. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive risks, trends and uncertainties that could cause actual results to differ materially from those projected, expressed, or implied by such forward-looking statements. Our actual results could differ materially, and potentially adversely, from those discussed or implied herein.
We caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this press release in the context of the risks and uncertainties disclosed in our SEC filings, including our most recent Annual Report on Form 10-K filed with the SEC on March 6, 2025. These filings are available online at www.sec.gov or www.prioritycommerce.com.
We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences we anticipate or affect us or our operations in the way we expect. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance. The forward-looking statements included in this press release are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.
Priority Investor Inquiries:
priorityIR@icrinc.com
priorityIR@icrinc.com
7
Priority Technology Holdings, Inc.
Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss)
(in thousands, except per share amounts)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Revenues | $ | 224,630 | $ | 205,719 | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Cost of revenue (excludes depreciation and amortization) | 137,353 | 129,298 | |||||||||||||||||||||
| Salary and employee benefits | 25,775 | 22,150 | |||||||||||||||||||||
| Depreciation and amortization | 13,777 | 15,253 | |||||||||||||||||||||
| Selling, general and administrative | 15,100 | 10,995 | |||||||||||||||||||||
| Total operating expenses | 192,005 | 177,696 | |||||||||||||||||||||
| Operating income | 32,625 | 28,023 | |||||||||||||||||||||
| Other (expense) income | |||||||||||||||||||||||
| Interest expense | (23,176) | (20,880) | |||||||||||||||||||||
| Debt extinguishment and modification costs | (38) | — | |||||||||||||||||||||
| Other income, net | 1,107 | 632 | |||||||||||||||||||||
| Total other expense, net | (22,107) | (20,248) | |||||||||||||||||||||
| Income before income taxes | 10,518 | 7,775 | |||||||||||||||||||||
| Income tax expense | 2,250 | 2,582 | |||||||||||||||||||||
| Net income | 8,268 | 5,193 | |||||||||||||||||||||
| Less: Dividends and accretion attributable to redeemable senior preferred stockholders | — | (12,662) | |||||||||||||||||||||
| Less: Return on redeemable NCI | — | (581) | |||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 8,268 | $ | (8,050) | |||||||||||||||||||
| Other comprehensive income (loss) | |||||||||||||||||||||||
| Foreign currency translation adjustments | 43 | (13) | |||||||||||||||||||||
| Comprehensive income (loss) | $ | 8,311 | $ | (8,063) | |||||||||||||||||||
| Earnings (loss) per common share: | |||||||||||||||||||||||
| Basic | $ | 0.10 | $ | (0.10) | |||||||||||||||||||
| Diluted | $ | 0.10 | $ | (0.10) | |||||||||||||||||||
Adjusted earnings per common share(1): | |||||||||||||||||||||||
| Basic | $ | 0.23 | $ | 0.03 | |||||||||||||||||||
| Diluted | $ | 0.22 | $ | 0.03 | |||||||||||||||||||
| Weighted-average common shares outstanding: | |||||||||||||||||||||||
| Basic | 78,774 | 78,021 | |||||||||||||||||||||
| Diluted | 79,857 | 78,225 | |||||||||||||||||||||
(1)Adjusted EPS in a non-GAAP earnings measure. See Adjusted EPS reconciliation for further detail.
8
Priority Technology Holdings, Inc.
Unaudited Consolidated Balance Sheets
(in thousands)
| March 31, 2025 | December 31, 2024 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 47,587 | $ | 58,600 | |||||||
| Restricted cash | 11,490 | 11,090 | |||||||||
| Accounts receivable, net of allowances | 80,280 | 67,969 | |||||||||
| Prepaid expenses and other current assets | 19,962 | 22,990 | |||||||||
| Current portion of notes receivable, net of allowance | 2,231 | 3,638 | |||||||||
| Settlement assets and customer/subscriber account balances | 1,003,034 | 940,798 | |||||||||
| Total current assets | 1,164,584 | 1,105,085 | |||||||||
| Notes receivable, less current portion | 6,473 | 4,919 | |||||||||
| Property, equipment and software, net | 53,718 | 52,477 | |||||||||
| Goodwill | 386,822 | 376,091 | |||||||||
| Intangible assets, net | 231,560 | 240,874 | |||||||||
| Deferred income taxes, net | 26,933 | 24,697 | |||||||||
| Other noncurrent assets | 21,568 | 22,717 | |||||||||
| Total assets | $ | 1,891,658 | 1,826,860 | ||||||||
| Liabilities, Stockholders' Deficit and NCI | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued expenses | $ | 54,414 | $ | 62,149 | |||||||
| Accrued residual commissions | 40,478 | 37,560 | |||||||||
| Customer deposits and advance payments | 2,506 | 2,246 | |||||||||
| Current portion of long-term debt | 1,879 | 9,503 | |||||||||
| Settlement and customer/subscriber account obligations | 1,003,395 | 940,213 | |||||||||
| Total current liabilities | 1,102,672 | 1,051,671 | |||||||||
| Long-term debt, net of current portion, discounts and debt issuance costs | 918,944 | 920,888 | |||||||||
| Other noncurrent liabilities | 26,467 | 19,326 | |||||||||
| Total liabilities | 2,048,083 | 1,991,885 | |||||||||
| Stockholders' deficit: | |||||||||||
| Preferred stock | — | — | |||||||||
| Common stock | 80 | 77 | |||||||||
| Treasury stock, at cost | (21,077) | (19,607) | |||||||||
| Additional paid-in capital | 1,669 | — | |||||||||
| Accumulated other comprehensive loss | (133) | (176) | |||||||||
| Accumulated deficit | (138,866) | (147,134) | |||||||||
| Total stockholders' deficit attributable to stockholders of Priority | (158,327) | (166,840) | |||||||||
| Non-controlling interests in consolidated subsidiaries | 1,902 | 1,815 | |||||||||
| Total stockholders' deficit | (156,425) | (165,025) | |||||||||
| Total liabilities, stockholders' deficit and NCI | $ | 1,891,658 | $ | 1,826,860 | |||||||
9
Priority Technology Holdings, Inc.
Unaudited Consolidated Statements of Cash Flows
(in thousands)
| Three Months Ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 8,268 | $ | 5,193 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization of assets | 13,777 | 15,253 | |||||||||
| Stock-based, ESPP and incentive units compensation | 1,586 | 1,633 | |||||||||
| Amortization of debt issuance costs and discounts | 434 | 1,065 | |||||||||
| Debt extinguishment and modification costs | 38 | — | |||||||||
| Deferred income tax | (2,236) | (1,872) | |||||||||
| Change in contingent consideration | 1,006 | 972 | |||||||||
| Other non-cash items, net | (20) | (259) | |||||||||
| Change in operating assets and liabilities: | |||||||||||
| Accounts receivable | (12,182) | (8,339) | |||||||||
| Prepaid expenses and other current assets | (73) | (425) | |||||||||
| Income taxes (receivable) payable | 4,429 | — | |||||||||
| Notes receivable | — | (266) | |||||||||
| Accounts payable and other accrued liabilities | (5,796) | 1,590 | |||||||||
| Customer deposits and advance payments | 260 | 157 | |||||||||
| Other assets and liabilities, net | 465 | (1,395) | |||||||||
| Net cash provided by operating activities | 9,956 | 13,307 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Acquisition of business, net of cash acquired | (4,473) | — | |||||||||
| Additions to property, equipment and software | (5,095) | (6,610) | |||||||||
| Notes receivable, net | (147) | (1,059) | |||||||||
| Net cash used in investing activities | (9,715) | (7,669) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Debt issuance and modification costs paid | (40) | — | |||||||||
| Repayments of long-term debt | (10,000) | (1,678) | |||||||||
| Repurchases of shares withheld for taxes | (1,470) | (421) | |||||||||
| Dividends paid to redeemable senior preferred stockholders | — | (7,027) | |||||||||
| Proceeds from exercise of stock options | 110 | — | |||||||||
| Settlement and customer/subscriber accounts obligations, net | 59,060 | 1,918 | |||||||||
| Payment of contingent consideration related to business combination | (400) | (3,071) | |||||||||
| Net cash provided by (used in) financing activities | 47,260 | (10,279) | |||||||||
| Net change in cash and cash equivalents and restricted cash: | |||||||||||
| Net increase in cash and cash equivalents, and restricted cash | 47,501 | (4,641) | |||||||||
| Cash and cash equivalents and restricted cash at beginning of period | 993,864 | 796,223 | |||||||||
| Cash and cash equivalents and restricted cash at end of period | $ | 1,041,365 | $ | 791,582 | |||||||
| Reconciliation of cash and cash equivalents, and restricted cash: | |||||||||||
| Cash and cash equivalents | $ | 47,587 | $ | 34,290 | |||||||
| Restricted cash | 11,490 | 12,658 | |||||||||
| Cash and cash equivalents included in settlement assets and customer/subscriber account balances (restricted in nature) | 982,288 | 744,634 | |||||||||
| Total cash and cash equivalents, and restricted cash | $ | 1,041,365 | $ | 791,582 | |||||||
10
Priority Technology Holdings, Inc.
Unaudited Reportable Segments' Results
(in thousands)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| SMB Payments: | |||||||||||||||||||||||
| Revenues | $ | 151,690 | $ | 144,005 | |||||||||||||||||||
| Adjusted EBITDA | $ | 25,705 | $ | 25,023 | |||||||||||||||||||
| Key Indicators: | |||||||||||||||||||||||
| Merchant bankcard processing dollar value | $ | 15,294,133 | $ | 14,788,095 | |||||||||||||||||||
| Merchant bankcard transaction count | 185,539 | 175,228 | |||||||||||||||||||||
| Total card processing dollar value | $ | 17,685,491 | $ | 17,098,758 | |||||||||||||||||||
| B2B Payments: | |||||||||||||||||||||||
| Revenues | $ | 23,918 | $ | 21,344 | |||||||||||||||||||
| Adjusted EBITDA | $ | 3,516 | $ | 1,747 | |||||||||||||||||||
| Key Indicators: | |||||||||||||||||||||||
| B2B issuing dollar volume | $ | 237,290 | $ | 227,811 | |||||||||||||||||||
| B2B issuing transaction count | 211 | 240 | |||||||||||||||||||||
| Enterprise Payments: | |||||||||||||||||||||||
| Revenues | $ | 50,088 | $ | 40,990 | |||||||||||||||||||
| Adjusted EBITDA | $ | 42,442 | $ | 34,727 | |||||||||||||||||||
| Key Indicators: | |||||||||||||||||||||||
| Average CFTPay billed clients | 940,463 | 703,887 | |||||||||||||||||||||
| Average CFTPay monthly new enrollments | 55,946 | 53,551 | |||||||||||||||||||||
11
Priority Technology Holdings, Inc.
Unaudited Reportable Segments' Results
(in thousands)
| Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||
| SMB Payments | B2B Payments | Enterprise Payments | Corporate | Total Consolidated | ||||||||||||||||||||||||||||
| Reconciliation of Adjusted EBITDA to GAAP Measure: | ||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 25,705 | $ | 3,516 | $ | 42,442 | $ | (20,369) | $ | 51,294 | ||||||||||||||||||||||
| Interest expense | — | (1,006) | — | (22,170) | (23,176) | |||||||||||||||||||||||||||
| Depreciation and amortization | (6,625) | (1,261) | (4,642) | (1,249) | (13,777) | |||||||||||||||||||||||||||
| Debt modification and extinguishment expenses | — | — | — | (38) | (38) | |||||||||||||||||||||||||||
| Selling, general and administrative (non-recurring) | — | — | — | (2,199) | (2,199) | |||||||||||||||||||||||||||
| Non-cash stock based compensation | (4) | (84) | (32) | (1,466) | (1,586) | |||||||||||||||||||||||||||
| Income (loss) before taxes | $ | 19,076 | $ | 1,165 | $ | 37,768 | $ | (47,491) | $ | 10,518 | ||||||||||||||||||||||
| Income tax expense | (2,250) | |||||||||||||||||||||||||||||||
| Net Income | $ | 8,268 | ||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2024 | ||||||||||||||||||||||||||||||||
| SMB Payments | B2B Payments | Enterprise Payments | Corporate | Total Consolidated | ||||||||||||||||||||||||||||
| Reconciliation of Adjusted EBITDA to GAAP Measure: | ||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 25,023 | $ | 1,747 | $ | 34,727 | $ | (15,157) | $ | 46,340 | ||||||||||||||||||||||
| Interest expense | (1) | (973) | — | (19,906) | (20,880) | |||||||||||||||||||||||||||
| Depreciation and amortization | (8,586) | (1,470) | (4,039) | (1,158) | (15,253) | |||||||||||||||||||||||||||
| Selling, general and administrative (non-recurring) | — | — | — | (798) | (798) | |||||||||||||||||||||||||||
| Non-cash stock based compensation | (4) | (118) | (32) | (1,480) | (1,634) | |||||||||||||||||||||||||||
| Income (loss) before taxes | $ | 16,432 | $ | (814) | $ | 30,656 | $ | (38,499) | $ | 7,775 | ||||||||||||||||||||||
| Income tax expense | (2,582) | |||||||||||||||||||||||||||||||
| Net Income | $ | 5,193 | ||||||||||||||||||||||||||||||
12
Priority Technology Holdings, Inc. (Nasdaq: PRTH) Supplemental Slides: Q1 2025 Earnings Call May 2025
prioritycommerce.com 2 Disclaimer Important Notice Regarding Forward-Looking Statements and Non-GAAP Measures This 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, our plans, objectives, expectations and intentions with respect to future operations, products and services, and other statements identified by words such as “may,” “will,” “should,” “anticipates,” “believes,” “expects,” “plans,” “future,” “intends,” “could,” “estimate,” “predict,” “projects,” “targeting,” “potential” or “contingent,” “guidance,” “anticipates,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, Priority Technology Holdings, Inc.’s (“Priority”, “we”, “our” or “us”) 2025 outlook and statements regarding our market and growth opportunities. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive risks, trends and uncertainties that could cause actual results to differ materially from those projected, expressed, or implied by such forward-looking statements. Our actual results could differ materially, and potentially adversely, from those discussed or implied herein. We caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. All forward- looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this presentation in the context of the risks and uncertainties disclosed in our Securities and Exchange Commission (“SEC”) filings, including our Annual Report on Form 10-K filed with the SEC on March 6, 2025. These filings are available online at www.sec.gov or www.prioritycommerce.com. We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences we anticipate or affect us or our operations in the way we expect. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance. The forward-looking statements included in this presentation are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements. This presentation includes certain non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and that may be different from non- GAAP financial measures used by other companies. Priority believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends of the Company. These non-GAAP measures should not be considered in isolation from, or as an alternative to, financial measures determined in accordance with GAAP. See the footnotes on the slides where these measures are discussed and the slides at the end of this presentation for a reconciliation of such non-GAAP financial measures to the most comparable GAAP numbers. Additionally, we present guidance for Adjusted EBITDA and Adjusted EBITDA as percentage of revenue, non-GAAP measures without reconciliation due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations. See more information in Priority’s earnings press release. Adjusted Gross profit referred throughout this presentation is a non-GAAP measure calculated by subtracting Cost of services (excluding depreciation and amortization) from Revenue. Adjusted Gross profit margin referred throughout this presentation is a non-GAAP measure calculated by dividing Adjusted Gross Profit discussed above by Revenue. Adjusted EBITDA referred to throughout this presentation is a non-GAAP measure calculated as net income prior to interest expense, tax expense, depreciation and amortization expense, adjusted to add back certain non-cash charges and / or non-recurring charges deemed to not be part of normal operating expenses. Adjusted EBITDA margin referred throughout this presentation is a non-GAAP measure calculated by dividing Adjusted EBITDA discussed above by Revenue. See Appendix 1 – 2 of this presentation for a reconciliation of Adjusted Gross Profit to Gross Profit as per GAAP, a reconciliation of Adj. EBITDA to GAAP Income (loss) before Taxes and Priority’s earnings press release for more details.
prioritycommerce.com $140 $168 $204 $51 2022 2023 2024 2025 $664 $756 $880 $225 2022 2023 2024 2025 3 Key 1st Quarter 2025 Highlights Q1 2025 RESULTS MAINTAINING STRONG FY 2025 GUIDANCE Q1 2025 KEY METRICS TOTAL REVENUE (In Millions) ADJUSTED EBITDA1 (In Millions) $965 - $1,000 $220 - $230 2025 Guidance Range 2025 Guidance Range NET REVENUE +9% ADJ GROSS PROFIT1 +14% ADJ EBITDA1 +11% ADJ EPS $0.22 $1.3B Account Balances 1.3M Customer Accounts $135B Total Payments Volume 1 Adjusted Gross Profit, Adjusted Gross Profit margin, Adjusted EBITDA and Adjusted EBITDA margin referred to in this presentation are non-GAAP measures. See slide 2 for further details Q1 Actual Q1 Actual (+$0.19)
prioritycommerce.com 4 Q1 2025 Consolidated Results $76.4M $87.3M $46.3M $51.3M $205.7M $224.6M Q1 24 Q1 25 Q1 24 Q1 25 Q1 24 Q1 25Q1 24 Q1 25 9% 14% 11% Adjusted EBITDA1 increased 11% to $51.3 million Adj Gross Profit margin1 increased 170 basis points to 38.9% Adj Gross Profit1 increased 14% to $87.3 million Revenue increased 9% to $224.6 million 1 Adjusted Gross Profit, Adjusted Gross Profit margin, Adjusted EBITDA and Adjusted EBITDA margin referred to in this presentation are non-GAAP measures. See slide 2 for further details 170bp 37.1% 38.9%
prioritycommerce.com Accelerate Cash Flow Optimize Working Capital ▪ Priority Commerce Engine (PCE) is a unified platform that provides our customers a personalized financial toolset to accelerate cash flow and optimize working capital on a single platform to collect, store, lend, and send money combining merchant services, payables and banking & treasury solutions ▪ Built with vision: PCE is a native platform built to manage money movement in complex multi- party environments Priority Commerce: Powering an Ecosystem of Integrated Financial Solutions 5 A Proprietary API Suite that Enables Acquiring, Banking & Payables Solutions Banking & Treasury Passport automates reconciliation, streamlines financial operations & provides full transparency to your liquidity Merchant Services Full featured POS & merchant acquiring solutions that accelerate your cash flow to capture revenue opportunities for businesses Payables Optimize your working capital and earn cash back by leveraging our payables & financing solutions while automating reconciliation LendCollect Store We Provide Personalized Payments and Banking Solutions to: Send + Priority Commerce Engine
prioritycommerce.com 6 Priority Commerce Enterprise Flow Pr io rit y Co m m er ce E ng in e ✓ Monthly Platform SaaS Fees ✓ Interchange on Card Volume ✓ Payment Processing Fees ✓ Float Income on Funds held in Passport Account Onboard Customers (KYC, Underwriting, Compliance) Process Payments (Credit, Debit, ACH, Check, Wire) Manage Funds (Bank Account, Card Management, Loans, Lines of Credit) $ $ $ $ $ $ Enterprise Partner’s Customer Platform SaaS Fees Customer’s Passport Account + Enterprise Partner Integration
prioritycommerce.com 7 First Quarter 2025 Financial Results
prioritycommerce.com SMB 37.9% Enterprise 53.7% B2B 8.4% SMB 67.2% Enterprise 22.2% B2B 10.6% SMB 92.4% Enterprise 4.3% B2B 3.3% SMB 81.6% Enterprise 12.2% B2B 6.2% FY 2021 Q1 2025 Adj. Gross Profit1 Contribution by SegmentRevenue Contribution by Segment FY 2021 Q1 2025 8 B2B and Enterprise segments represented over 62% of Adjusted Gross Profit in Q1 2025 and contributed to 170 bps of YoY expansion in Adjusted Gross Profit margins 1 Adjusted Gross Profit, Adjusted Gross Profit margin, Adjusted EBITDA and Adjusted EBITDA margin referred to in this presentation are non-GAAP measures. See slide 2 for further details Growth in Higher Margin Operating Segments
prioritycommerce.com 9 SMB Highlights – Q1 2025 1 Adjusted Gross Profit, Adjusted Gross Profit margin, Adjusted EBITDA and Adjusted EBITDA margin referred to in this presentation are non-GAAP measures. See slide 2 for further details Q1 2025 Segment Highlights ➔ Revenue growth of 5% with strong 10% growth in core partially offset by historical residual portfolio purchase attrition and risk-paring in specialized acquiring ➔ Total Card $ Volumes increased 3% to $17.7bn ➔ New monthly boards averaged 4.1K during quarter Revenue $151.7MM +5% YoY Adj. Gross Profit1 $33.1MM +4% YoY | 21.8% Margin Adj. EBITDA1 $25.7MM +3% YoY | 16.9% Margin
prioritycommerce.com 10 B2B Highlights – Q1 2025 1 Adjusted Gross Profit, Adjusted Gross Profit margin, Adjusted EBITDA and Adjusted EBITDA margin referred to in this presentation are non-GAAP measures. See slide 2 for further details Q1 2025 Segment Highlights ➔ $2.6mm of Revenue growth driven by 35% increase in Supplier-Funded revenues and 7% increase in Buyer-Funded revenues ➔ Adjusted Gross Profit margin increased 150+ bps YoY ➔ Adjusted EBITDA growth of 101% driven by strong operating leverage Revenue $23.9MM +12% YoY Adj. Gross Profit1 $7.3MM +18% YoY | 30.5% Margin Adj. EBITDA1 $3.5MM +101% YoY | 14.7% Margin
prioritycommerce.com 11 Enterprise Highlights – Q1 2025 1 Adjusted Gross Profit, Adjusted Gross Profit margin, Adjusted EBITDA and Adjusted EBITDA margin referred to in this presentation are non-GAAP measures. See slide 2 for further details Q1 2025 Segment Highlights ➔ CFTPay Avg Monthly New Enrollments of 56K increased 4% from 54K in Q1 2024 ➔ CFTPay Avg Number of Billed Clients increased 34% to 940K from 704K in Q1 2024 ➔ Growth in balances largely offset the impact of 100 bps in Fed rate cuts in 2024 ➔ 99 Integrated Partners at quarter-end (+7 from year-end 2024) Revenue $50.1MM +22% YoY Adj. Gross Profit1 $46.9MM +22% YoY | 93.6% Margin Adj. EBITDA1 $42.4MM +22% YoY | 84.7% Margin
prioritycommerce.com 12 Consolidated Operating Expenses – Q1 2025 Q1 2025 Segment Highlights ➔ Higher Salaries & Benefits driven by overall growth of the Company with investments in IT ➔ Increase in SG&A expenses primarily driven by software (incl public cloud migration), marketing spend, and certain non-recurring legal and transaction expenses Salaries & Benefits $25.8MM +16% YoY SG&A $15.1MM +37% YoY Depreciation & Amortization $13.8MM (10%) YoY
prioritycommerce.com 13 Capital Structure & Liquidity Outstanding Debt Balance as of December 31, 2024 $945.5 (+/-) Net Revolver Borrowings -- (+/-) Net Term Loan Borrowings ($10.0) Balance as of March 31, 2025 $935.5 Net Leverage Calculation Total Debt Balance $935.5 ( - ) Unrestricted Cash Balance $47.6 Net Debt $887.9 LTM Adj. EBITDA (Q1 2025)1 $209.2 Net Leverage Ratio 4.2x 1 Adjusted Gross Profit, Adjusted Gross Profit margin, Adjusted EBITDA and Adjusted EBITDA margin referred to in this presentation are non-GAAP measures. See slide 2 for further details Simplified Balance Sheet and Reduced Leverage During Q1 2025, used excess cash to repay $10 million of outstanding Term Loan Ample liquidity of $117.6 million, comprised of $47.6 million of unrestricted cash and unfunded $70.0 million Revolver at the end of Q1 2025 Bolster FCF Generation & Prudently Deploy Capital Redeemed the senior preferred stock in 2024, reducing cost of capital and allowing net income to flow to benefit of common shareholders Maintain a disciplined acquisition strategy focused on delivering profitable growth while capitalizing on market dislocation
prioritycommerce.com 14 Appendix
prioritycommerce.com 15 The reconciliation of adjusted gross profit to its most comparable GAAP measure is provided below: Appendix 1 – Adjusted Gross Profit1 Reconciliation Note: Certain dollar amounts may not add mathematically due to rounding 1Adjusted Gross Profit, Adjusted Gross Profit margin, Adjusted EBITDA and Adjusted EBITDA margin referred to in this presentation are non-GAAP measures. See slide 2 for further details. SMB B2B Enterprise Eliminations Total SMB B2B Enterprise Eliminations Total Revenues $ 151.7 $ 23.9 $ 50.1 $ (1.1) $ 224.6 $ 144.0 $ 21.3 $ 41.0 $ (0.6) $ 205.7 Cost of revenue (excluding depreciation and amortization) (118.6) (16.6) (3.2) 1.1 (137.4) (112.1) (15.2) (2.6) 0.6 (129.3) Adjusted Gross Profit 33.1 7.3 46.9 (0.0) 87.3 31.9 6.2 38.3 (0.0) 76.4 Adjusted Gross Profit Margin 21.8% 30.5% 93.6% 38.9% 22.1% 29.0% 93.6% 37.1% Depreciation and amortiztion of revenue generating assets (2.0) (0.7) (2.0) -- (4.7) (1.8) (0.8) (1.4) -- (3.9) Gross profit $ 31.1 $ 6.6 $ 44.9 $ (0.0) $ 82.6 $ 30.1 $ 5.4 $ 37.0 $ (0.0) $ 72.5 Gross profit margin 20.5% 27.6% 89.6% 36.8% 20.9% 25.4% 90.2% 35.3% (in Millions) (in Millions) Three Months Ended March 31, 2025 Three Months Ended March 31, 2024
prioritycommerce.com 16 The reconciliation of adjusted EBITDA to its most comparable GAAP measure is provided below: Appendix 2 – Adjusted EBITDA1 Reconciliation Note: Certain dollar amounts may not add mathematically due to rounding 1Adjusted Gross Profit, Adjusted Gross Profit margin, Adjusted EBITDA and Adjusted EBITDA margin referred to in this presentation are non-GAAP measures. See slide 2 for further details. (in Millions) (in Millions) Three Months Ended March 31, 2025 Three Months Ended March 31, 2024 SMB B2B Enterprise Corporate Total SMB B2B Enterprise Corporate Total Adjusted EBITDA 25.7$ 3.5$ 42.4$ (20.4)$ 51.3$ 25.0$ 1.7$ 34.7$ (15.2)$ 46.3$ Adjusted EBITDA Margin 16.9% 14.7% 84.7% 22.8% 17.4% 8.2% 84.7% 22.5% Interest Expense -- (1.0) -- (22.2) (23.2) (0.0) (1.0) -- (19.9) (20.9) Depreciation and Amortization (6.6) (1.3) (4.6) (1.2) (13.8) (8.6) (1.5) (4.0) (1.2) (15.3) Debt Modification and Extinguishment Expenses -- -- -- (0.0) (0.0) -- -- -- -- -- Selling, General and Administrative (Non-Recurring) -- -- -- (2.2) (2.2) -- -- -- (0.8) (0.8) Non-Cash Stock Based Compensation (0.0) (0.1) (0.0) (1.5) (1.6) (0.0) (0.1) (0.0) (1.5) (1.6) Income (Loss) Before Taxes 19.1$ 1.2$ 37.8$ (47.5)$ 10.5$ 16.4$ (0.8)$ 30.7$ (38.5)$ 7.8$ Income (Loss) Before Taxes % of Revenue 12.6% 4.9% 75.4% 4.7% 11.4% (3.8%) 74.8% 3.8%
17