Real-time tracking and streamlined payments serve to boost borrower-lender operations, experiences and relationships
ATLANTA--(BUSINESS WIRE)--Jun. 5, 2024-- Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY”), a leading provider of vertically-integrated payment solutions, today announced new enhancements to the company’s integration with partner CU*Answers, a 100% credit union-owned, Credit Union Service Organization (CUSO) that provides core processing solutions and services for hundreds of credit unions across the U.S. Various new features, including real-time payment posting and tracking, simplified sign-in capabilities, and streamlined loan payment modalities are designed to benefit both the members and business operations of credit unions utilizing CU*Answers’ CU*BASE platform.
As an integrated partner, REPAY enables CU*Answers’ wide network of credit union clients to streamline processing efficiencies by securely accepting ACH and card payments via web, mobile, Interactive Voice Response (IVR) or text. Offering a wide variety of payment modalities provides borrowers with options to make loan payments in the way that is most convenient for them and enhances the overall member experience.
Regardless of payment method, REPAY’s integrated platform tracks, logs and posts payment data to the CU*BASE core platform. Real-time posting is designed to ensure payment updates and information are reflected in credit unions’ records immediately after a payment is submitted, mitigating the risk of invalid penalties and unnecessary collection efforts that are triggered for past-due payments. This not only smooths accounting processes for credit unions, but also supports better relationships with members due to improved trust and communication.
“When borrowers are provided with the opportunity to make secure, speedy payments in the method and time that is most convenient to them, all stakeholders benefit from better payment experiences,” said Jake Moore, EVP, Consumer Payments, REPAY. “These improvements to our integration with CU*Answers will enable credit unions and their members to increase trust and communication, ultimately forging better relationships thanks to modern payment technology capabilities.”
Single Sign-On (SSO) capabilities further serve to benefit borrower-lender relationships by streamlining the digital payment experience for credit union members. SSO enables members to access REPAY’s payment portal directly through CU*Answers’ It’s Me 247 Online Banking platform without re-entering their login credentials, which increases the speed and convenience of the payment process. Authenticating users with SSO functionality also protects members by reducing opportunities for incidents that could impact the security of login credentials and financial information.
“We are constantly refining and upgrading the ability of our platform to support our credit union clients’ collection operations and help them meet member demands,” said Geoff Johnson, CEO of CU*Answers. “The integration with REPAY helps us to achieve those goals, and we are proud to offer these new benefits to our customers in collaboration with the REPAY team.”
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.
About CU*Answers, Inc.
CU*Answers offers expertise in implementing technical solutions to operational needs, and is a leader in helping credit unions form strategic alliances and partnerships. CU*Answers provides a wide variety of services for credit unions including its flagship CU*BASE® processing system (online and in-house) and Internet development services featuring It’s Me 247 online and mobile banking. Additional services include web development, network design and security, and image check processing. Founded 50 years ago, CU*Answers is a 100% credit union-owned cooperative CUSO providing services to credit unions representing nearly 2 million members and over $21 billion in credit union assets. For more information, visit www.cuanswers.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240605703996/en/
Investor Relations Contact for REPAY:
IR@repay.com
Media Relations Contact for REPAY:
Kristen Hoyman
khoyman@repay.com
Source: Repay Holdings Corporation
Corelation recognizes REPAY as a KeyBridge Certified partner, validating best practices and security standards
ATLANTA--(BUSINESS WIRE)--May 16, 2024-- Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY”), a leading provider of vertically-integrated payment solutions, today announced that the company has achieved Certified Integration Partner status with Corelation, a leading and innovative core processor for credit unions. By further leveraging REPAY’s integration with Corelation’s KeyStone platform, credit unions can simplify operations, streamline payment processing and surpass member expectations.
Continued success with Corelation has earned REPAY recognition as a KeyBridge Certified partner, meaning clients can rest assured that REPAY’s integration with Corelation is utilizing best practices for the KeyBridge API, which provides third-party solution capabilities to KeyStone users directly through the core utility platform. Through REPAY’s partnership with Corelation, members of credit unions that leverage KeyStone can make omni-channel payments via an online portal, text, mobile and IVR. Payment data is then posted back to Corelation in real time, streamlining operations and providing real-time loan and payment information to credit union staff and members. Payment tokenization and encryption offer enhanced security and reduce the risk of fraud while allowing members to securely store payment information for future transactions.
“We are very pleased to become a KeyBridge Certified partner, and we’re excited about what this will mean for financial institutions down the road,” said Jake Moore, EVP, Consumer Payments, REPAY. “Flexibility in payment methodology and modality are critical to the success of financial institutions in today’s competitive landscape, but credit unions also need to be sure their solutions are utilizing best practices for security. With this certification, credit unions can feel confident in REPAY’s ability to deliver seamless payment experiences to their members.”
“We are proud to add REPAY to our lineage of successful KeyBridge Certified partners,” said Tim Maron, Chief Revenue Officer of Corelation. “Our recognition of REPAY is a direct reflection of REPAY’s dedicated efforts to working closely with our team to deliver a fully integrated solution that meets the needs of credit unions. Given REPAY's proficiency in digital payments and our expertise in the credit union space, we believe we have a prosperous partnership ahead of us.”
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. For more information, visit www.repay.com.
About Corelation
Based in San Diego, CA, Corelation is the innovative core processor for today’s credit union. This solution is a person-centric system that empowers credit unions to offer the best member service possible, enhancing their value for member attraction and retention. In terms of industry experience, Corelation’s staff has dedicated their careers to creating core systems and providing unparalleled client service. For more information, visit www.corelationinc.com.
Contacts
Investor Relations Contact for REPAY:
IR@repay.com
Media Relations Contact for REPAY:
Kristen Hoyman
khoyman@repay.com
ATLANTA--(BUSINESS WIRE)--Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY” or the “Company”), a leading provider of vertically-integrated payment solutions, today announced that the Company will host a conference call to discuss first quarter 2024 financial results on Thursday, May 9, 2024 at 5:00pm ET. A press release with first quarter 2024 financial results will be issued after the market closes that same day.
The conference call will be webcast live from the Company's investor relations website at https://investors.repay.com/ under the “Events” section. 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 two hours after the call and can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers; the conference ID is 13745435. The replay will be available until Thursday, May 23, 2024. An archive of the webcast will be available at the same location on the website shortly after the call has concluded.
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 for REPAY:
ir@repay.com
Media Relations Contact for REPAY:
Kristen Hoyman
(404) 637-1665
khoyman@repay.com
Gross Profit Growth of 2% in Q4 and 6% Full Year 2023
Normalized Organic Gross Profit Growth1 of 13% in Q4 and 13% for Full Year 2023
Provides 2024 Outlook for Acceleration in Free Cash Flow Conversion
ATLANTA--(BUSINESS WIRE)--Feb. 29, 2024-- Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY” or the “Company”), a leading provider of vertically-integrated payment solutions, today reported financial results for its fourth quarter and full year ended December 31, 2023.
Fourth Quarter 2023 Financial Highlights
| ($ in millions) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | YoY Change |
| Card payment volume | $6,611.8 | $6,591.3 | $6,254.4 | $6,401.3 | $6,421.0 | (3%) |
| Revenue | 72.7 | 74.5 | 71.8 | 74.3 | 76.0 | 5% |
| Gross profit (1) | 57.8 | 56.6 | 54.9 | 56.7 | 58.7 | 2% |
| Net loss (2) | (8.2) | (27.9) | (5.3) | (6.5) | (77.7) | - |
| Adjusted EBITDA (3) | 36.0 | 31.2 | 30.3 | 31.9 | 33.5 | (7%) |
| (1) | Gross profit represents revenue less costs of services (exclusive of depreciation and amortization). | |
| (2) | During the fourth quarter of 2023, Net loss was impacted by a $75.7 million goodwill impairment loss. Further information about this non-cash impairment loss can be found in our Annual Report on Form 10-K for the year ended December 31, 2023. | |
| (3) | Adjusted EBITDA is a non-GAAP financial measure. See “Non-GAAP Financial Measures” and the reconciliation of Adjusted EBITDA to its most comparable GAAP measure provided below for additional information. | |
“We closed out the year seeing the continued demand from existing clients adopting more payment capabilities, and new clients demonstrating the need for our powerful payment technology. REPAY delivered solid performance in the fourth quarter, with normalized organic revenue and gross profit growth1 of 14% and 13%, respectively,” said John Morris, CEO of REPAY. We have become a one-stop platform to optimize payment streams and are consistently working to capture new payment flows while enhancing client relationships with many value-added services.”
Fourth Quarter 2023 Business Highlights
The Company's achievements in the quarter, including those highlighted below, reinforce management's belief in the ability of the Company to drive durable and sustained growth across REPAY's diversified business model.
- 13% year-over-year normalized organic gross profit growth1 in Q4
- Consumer Payments organic gross profit growth1 of approximately 13% year-over-year
- Business Payments normalized organic gross profit growth1 of approximately 25% year-over-year
- Accelerated AP supplier network to over 261,000, an increase of over 60% year-over-year
- Added five new integrated software partners to bring the total to 262 software relationships as of the end of the full year
- Increased instant funding transactions by approximately 45% year-over-year in Q4 and 50% for the full year
- The Company now serves over 276 Credit Unions, an increase of approximately 15% year-over-year
1 Normalized organic revenue growth, organic gross profit growth and normalized organic gross profit growth are non-GAAP financial measures. See “Non-GAAP Financial Measures” and the reconciliation to their most comparable GAAP measure provided below for additional information.
Segments
The Company reports its financial results based on two reportable segments.
Consumer Payments –The Consumer Payments segment provides payment processing solutions (including debit and credit card processing, Automated Clearing House (“ACH”) processing and other electronic payment acceptance solutions, as well as REPAY’s loan disbursement product) that enable its clients to collect payments and disburse funds to consumers and includes its clearing and settlement solutions (“RCS”). RCS is REPAY’s proprietary clearing and settlement platform through which it markets customizable payment processing programs to other ISOs and payment facilitators. The strategic vertical markets served by the Consumer Payments segment primarily include personal loans, automotive loans, receivables management, credit unions, mortgage servicing, consumer healthcare and diversified retail.
Business Payments –The Business Payments segment provides payment processing solutions (including accounts payable automation, debit and credit card processing, virtual credit card processing, ACH processing and other electronic payment acceptance solutions) that enable REPAY’s clients to collect or send payments to other businesses. The strategic vertical markets served within the Business Payments segment primarily include retail automotive, education, field services, governments and municipalities, healthcare, media, homeowner association management and hospitality.
Segment Card Payment Volume, Revenue, Gross Profit, and Gross Profit Margin
| Three Months Ended December 31, | Year Ended December 31, | |||||
| ($ in thousand) | 2023 (Unaudited) | 2022 (Unaudited) | % Change | 2023 | 2022 | % Change |
| Card payment volume | ||||||
| Consumer Payments | $5,361,683 | $5,009,527 | 7% | $21,419,047 | $20,156,495 | 6% |
| Business Payments | 1,059,276 | 1,602,295 | (34%) | 4,248,916 | 5,482,359 | (22%) |
| Total card payment volume | $6,420,959 | $6,611,822 | (3%) | $25,667,963 | $25,638,854 | 0% |
| Revenue | ||||||
| Consumer Payments | $71,124 | $64,300 | 11% | $275,708 | $248,191 | 11% |
| Business Payments | 9,850 | 12,334 | (20%) | 38,058 | 42,600 | (11%) |
| Elimination of intersegment revenues | (4,987} | (3,961) | (17,139) | (11,564) | ||
| Total revenue | $75,987 | $72,673 | 5% | $296,627 | $279,227 | 6% |
| Gross profit (1) | ||||||
| Consumer Payments | $56,168 | $53,090 | 6% | $216,096 | $195,542 | 11% |
| Business Payments | 7,545 | 8,648 | (13%) | 27,967 | 30,423 | (8%) |
| Elimination of intersegment revenues | (4,987) | (3,961) | (17,139) | (11,564) | ||
| Total gross profit | $58,726 | $57,777 | 2% | $226,924 | $214,401 | 6% |
| Total gross profit margin (2) | 77% | 80% | 77% | 77% |
| (1) | Gross profit represents revenue less costs of services (exclusive of depreciation and amortization). | |
| (2) | Gross profit margin represents total gross profit / total revenue. |
2024 Outlook
“In 2024, we expect Adjusted EBITDA to grow faster than gross profit, and we also expect to reduce capital expenditures, leading to an acceleration of cash conversion,” said Tim Murphy, CFO of REPAY. “We expect Free Cash Flow Conversion to improve throughout 2024 as we realize the benefits from investments we’ve made in sales, product, and technology over the past several years. We have always focused on profitable growth, refining processes across the business where we can scale through automation while also maintaining investments towards innovation.”
REPAY expects the following financial results for full year 2024.
| Full Year 2024 Outlook | |
| Revenue | $314 - 320 million |
| Gross Profit | $245 - 250 million |
| Adjusted EBITDA | $139 - 142 million |
| Free Cash Flow Conversion | ~ 60% |
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 fourth quarter and full year 2023 financial results today, February 29, 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 13743368. The replay will be available at https://investors.repay.com/investor-relations.
Non-GAAP Financial Measures
This report includes certain non-GAAP financial measures that management uses to evaluate the Company’s operating business, measure performance, and make strategic decisions. Adjusted EBITDA is a non-GAAP financial measure that represents net income prior to interest expense, tax expense, depreciation and amortization, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as loss on business disposition, non-cash change in fair value of contingent consideration, non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation charges, transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges. Adjusted Net Income is a non-GAAP financial measure that represents net income prior to amortization of acquisition-related intangibles, as adjusted to add back certain charges deemed to not be part of normal operating expenses, loss on business disposition, non-cash charges and/or non-recurring charges, such as non-cash change in fair value of contingent consideration, non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation expense, transaction expenses, restructuring and other strategic initiative costs, other non-recurring charges, non-cash interest expense and net of tax effect associated with these adjustments. Adjusted Net Income is adjusted to exclude amortization of all acquisition-related intangibles as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Management believes that the adjustment of acquisition-related intangible amortization supplements GAAP financial measures because it allows for greater comparability of operating performance. Although REPAY excludes amortization from acquisition-related intangibles from its non-GAAP expenses, management believes that it is important for investors to understand that such intangibles were recorded as part of purchase accounting and contribute to revenue generation. Adjusted Net Income per share is a non-GAAP financial measure that represents Adjusted Net Income divided by the weighted average number of shares of Class A common stock outstanding (on an as-converted basis assuming conversion of the outstanding units exchangeable for shares of Class A common stock) for the three months and years ended December 31, 2023 and 2022 (excluding shares subject to forfeiture). Normalized organic revenue growth is a non-GAAP financial measure that represents year-on-year revenue growth that excludes incremental revenue attributable to acquisitions, dispositions and REPAY’s media payments business related to the cyclical political media spending in the applicable prior period or any subsequent period. Organic gross profit growth is a non-GAAP financial measure that represents year-on-year gross profit growth that excludes incremental gross profit attributable to acquisitions and divestitures made in the applicable prior period or any subsequent period. Normalized organic gross profit growth is a non-GAAP financial measure that represents year-on-year organic gross profit growth that excludes incremental gross profit attributable to REPAY’s media payments business related to the cyclical political media spending in the applicable prior period or any subsequent period. Free Cash Flow 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, normalized organic revenue growth, organic gross profit growth, normalized 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 and other financial guidance, expected demand on REPAY’s product offering, including further implementation of electronic payment options and statements regarding REPAY’s market and growth opportunities, and REPAY’s business strategy and the plans and objectives of management for future operations. Such forward-looking statements are based upon the current beliefs and expectations of REPAY’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond REPAY’s control.
In addition to factors disclosed in REPAY’s reports filed with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2023, 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.
Consolidated Statements of Operations
| Three Months ended December 31, | Year ended December 31, | |||||||||||||||
| ($ in thousands, except per share data) | 2023 (Unaudited) | 2022 (Unaudited) | 2023 | 2022 | ||||||||||||
| Revenue | $75,987 | $72,673 | $296,627 | $279,227 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Costs of services (exclusive of depreciation and amortization shown separately below) | $17,261 | $14,896 | $69,703 | $64,826 | ||||||||||||
| Selling, general and administrative | 36,679 | 41,682 | 148,653 | 149,061 | ||||||||||||
| Depreciation and amortization | 24,711 | 25,309 | 103,857 | 107,751 | ||||||||||||
| Change in fair value of contingent consideration | — | 990 | — | (3,300) | ||||||||||||
| Loss on business disposition | — | — | 10,027 | — | ||||||||||||
| Impairment loss | 75,750 | 8,090 | 75,800 | 8,090 | ||||||||||||
| Total operating expenses | $154,401 | $90,967 | $408,040 | $326,428 | ||||||||||||
| Loss from operations | ($78,414) | ($18,294) | ($111,413) | ($47,201) | ||||||||||||
| Interest (expense) income, net | 365 | (1,117) | (1,048) | (4,245) | ||||||||||||
| Change in fair value of tax receivable liability | (2,903) | 11,390) | (6,619) | 66,871 | ||||||||||||
| Other (loss) income | (145) | (384) | (455) | (510) | ||||||||||||
| Total other income (expense) | (2,683) | 9,889 | (8,122) | 62,116 | ||||||||||||
| Income (loss) before income tax benefit (expense) | (81,097) | (8,405) | (119,535) | 14,915 | ||||||||||||
| Income tax benefit (expense) | 3,423 | 240 | 2,115 | (6,174) | ||||||||||||
| Net income (loss) | ($77,674) | ($8,165) | ($117,420) | $8,741 | ||||||||||||
| Net loss attributable to non-controlling interest | (4,387) | (1,493) | (6,930) | (4,095) | ||||||||||||
| Net income (loss) attributable to the Company | ($73,287) | ($6,672) | ($110,490) | $12,836 | ||||||||||||
| Weighted-average shares of Class A common stock outstanding - basic | 91,206,870 | 88,519,236 | 90,048,638 | 88,792,453 | ||||||||||||
| Weighted-average shares of Class A common stock outstanding - diluted | 91,206,870 | 88,519,236 | 90,048,638 | 110,671,731 | ||||||||||||
| Income (loss) per Class A share - basic | ($0.80) | ($0.08) | ($1.23) | $0.14 | ||||||||||||
| Income (loss) per Class A share - diluted | ($0.80) | ($0.08) | ($1.23) | $0.12 | ||||||||||||
Consolidated Balance Sheets
| ($ in thousands) | December 31, 2023 | December 31, 2022 | ||||||
| Assets | ||||||||
| Cash and cash equivalents | $118,096 | $64,895 | ||||||
| Accounts receivable | 36,017 | 33,544 | ||||||
| Prepaid expenses and other | 15,209 | 18,213 | ||||||
| Total current assets | 169,322 | 116,652 | ||||||
| Property, plant and equipment, net | 3,133 | 4,375 | ||||||
| Restricted cash | 26,049 | 28,668 | ||||||
| Intangible assets, net | 447,141 | 500,575 | ||||||
| Goodwill | 716,793 | 827,813 | ||||||
| Operating lease right-of-use assets, net | 8,023 | 9,847 | ||||||
| Deferred tax assets | 146,872 | 136,370 | ||||||
| Other assets | 2,500 | 2,500 | ||||||
| Total noncurrent assets | 1,350,511 | 1,510,148 | ||||||
| Total assets | $1,519,833 | $1,626,800 | ||||||
| Liabilities | ||||||||
| Accounts payable | $22,030 | $21,781 | ||||||
| Related party payable | — | 1,000 | ||||||
| Accrued expenses | 32,906 | 29,016 | ||||||
| Current operating lease liabilities | 1,629 | 2,263 | ||||||
| Current tax receivable agreement | 580 | 24,454 | ||||||
| Other current liabilities | 318 | 3,593 | ||||||
| Total current liabilities | 57,463 | 82,107 | ||||||
| Long-term debt | 434,166 | 451,319 | ||||||
| Noncurrent operating lease liabilities | 7,247 | 8,295 | ||||||
| Tax receivable agreement, net of current portion | 188,331 | 154,673 | ||||||
| Other liabilities | 1,838 | 2,113 | ||||||
| Total noncurrent liabilities | 631,582 | 616,400 | ||||||
| Total liabilities | $689,045 | $698,507 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity | ||||||||
| Class A common stock, $0.0001 par value; 2,000,000,000 shares authorized, 92,220,494 issued and 90,803,984 outstanding as of December 31, 2023; 89,354,754 issued and 88,276,613 outstanding as of December 31, 2022 | 9 | 9 | ||||||
| Class V common stock, $0.0001 par value; 1,000 shares authorized and 100 shares issued and outstanding as of December 31, 2023 and 2022 | — | — | ||||||
| Treasury stock, 1,416,510 and 1,078,141 shares as of December 31, 2023 and December 31, 2022, respectively | (12,528) | (10,000) | ||||||
| Additional paid-in capital | 1,151,327 | 1,117,736 | ||||||
| Accumulated other comprehensive loss | (3) | (3) | ||||||
| Accumulated deficit | (323,670) | (213,180) | ||||||
| Total REPAY stockholders’ equity | 815,135 | 894,562 | ||||||
| Non-controlling interests | 15,653 | 33,731 | ||||||
| Total equity | $830,788 | $928,293 | ||||||
| Total liabilities and equity | $1,519,833 | $1,626,800 | ||||||
Consolidated Statements of Cash Flows
| Year Ended December 31, | ||||||||
| ($ in thousands) | 2023 | 2022 | ||||||
| Cash flows from operating activities | ||||||||
| Net income (loss) | ($117,420) | $8,741 | ||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 103,857 | 107,751 | ||||||
| Stock based compensation | 22,156 | 20,255 | ||||||
| Amortization of debt issuance costs | 2,847 | 2,834 | ||||||
| Loss on business disposition | 10,027 | — | ||||||
| Other loss | 238 | 245 | ||||||
| Fair value change in tax receivable agreement liability | 6,619 | (66,871) | ||||||
| Fair value change in contingent consideration | — | (3,300) | ||||||
| Impairment loss | 75,800 | 8,090 | ||||||
| Payments of contingent consideration in excess of acquisition date fair value | — | (8,896) | ||||||
| Deferred tax expense (benefit) | (3,594) | 4,192 | ||||||
| Change in accounts receivable | (3,986) | 696 | ||||||
| Change in prepaid expenses and other | 2,936 | (5,786) | ||||||
| Change in operating lease ROU assets | 1,328 | 653 | ||||||
| Change in accounts payable | (189) | 1,698 | ||||||
| Change in related party payable | — | (347) | ||||||
| Change in accrued expenses and other | 3,890 | 2,197 | ||||||
| Change in operating lease liabilities | (1,388) | (523) | ||||||
| Change in other liabilities | 493 | 2,594 | ||||||
| Net cash provided by operating activities | 103,614 | 74,223 | ||||||
| Cash flows from investing activities | ||||||||
| Purchases of property and equipment | (733) | (3,176) | ||||||
| Purchases of intangible assets | (13,545) | (2,750) | ||||||
| Capitalized software development costs | (50,083) | (33,615) | ||||||
| Proceeds from sale of business, net of cash retained | 40,273 | — | ||||||
| Net cash used in investing activities | (24,088) | (39,541) | ||||||
| Cash flows from financing activities | ||||||||
| Payments on long-term debt | (20,000) | — | ||||||
| Shares repurchased under Incentive Plan and ESPP | (1,891) | (2,657) | ||||||
| Treasury shares repurchased | (2,528) | (10,000) | ||||||
| Distributions to Members | (3,525) | (951) | ||||||
| Payments of contingent consideration up to acquisition date fair value | (1,000) | (3,851) | ||||||
| Net cash provided by (used in) financing activities | (28,944) | (17,459) | ||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | 50,582 | 17,223 | ||||||
| Cash, cash equivalents and restricted cash at beginning of period | $93,563 | $76,340 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $144,145 | $93,563 | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
| Cash paid during the year for: | ||||||||
| Interest | $1,024 | $1,540 | ||||||
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA
For the Three Months Ended December 31, 2023 and 2022
(Unaudited)
| Three Months Ended December 31, | ||||||||
| ($ in thousands) | 2023 | 2022 | ||||||
| Revenue | $75,987 | $72,673 | ||||||
| Operating expenses | ||||||||
| Costs of services (exclusive of depreciation and amortization shown separately below) | $17,261 | $14,896 | ||||||
| Selling, general and administrative | 36,679 | 41,682 | ||||||
| Depreciation and amortization | 24,711 | 25,309 | ||||||
| Change in fair value of contingent consideration | — | 990 | ||||||
| Impairment loss | 75,750 | 8,090 | ||||||
| Total operating expenses | $154,401 | $90,967 | ||||||
| Loss from operations | ($78,414) | ($18,294) | ||||||
| Other (expense) income | ||||||||
| Interest (expense) income, net | 365 | (1,117) | ||||||
| Change in fair value of tax receivable liability | (2,903) | 11,390 | ||||||
| Other (loss) income | (145) | (384) | ||||||
| Total other income (expense) | (2,683) | 9,889 | ||||||
| Income (loss) before income tax benefit (expense) | (81,097) | (8,405) | ||||||
| Income tax benefit (expense) | 3,423 | 240 | ||||||
| Net income (loss) | ($77,674) | ($8,165) | ||||||
| Add: | ||||||||
| Interest expense (income), net | (365) | 1,117 | ||||||
| Depreciation and amortization (a) | 24,711 | 25,309 | ||||||
| Income tax (benefit) expense | (3,423) | (240) | ||||||
| EBITDA | ($56,751) | $18,021 | ||||||
| Non-cash change in fair value of contingent consideration (b) | — | 990 | ||||||
| Non-cash impairment loss (c) | 75,750 | 8,090 | ||||||
| Non-cash change in fair value of assets and liabilities (d) | 3,778 | (11,390) | ||||||
| Share-based compensation expense (e) | 5,899 | 5,990 | ||||||
| Transaction expenses (f) | 921 | 2,877 | ||||||
| Restructuring and other strategic initiative costs (g) | 3,372 | 3,705 | ||||||
| Other non-recurring charges (h) | 520 | 7,599 | ||||||
| Adjusted EBITDA | $33,489 | $35,882 | ||||||
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA
For the Years Ended December 31, 2023 and 2022
(Unaudited)
| Year Ended December 31, | ||||||||
| ($ in thousands) | 2023 | 2022 | ||||||
| Revenue | $296,627 | $279,227 | ||||||
| Operating expenses | ||||||||
| Costs of services (exclusive of depreciation and amortization shown separately below) | $69,703 | $64,826 | ||||||
| Selling, general and administrative | 148,653 | 149,061 | ||||||
| Depreciation and amortization | 103,857 | 107,751 | ||||||
| Change in fair value of contingent consideration | — | (3,300) | ||||||
| Loss on business disposition | 10,027 | — | ||||||
| Impairment loss | 75,800 | 8,090 | ||||||
| Total operating expenses | $408,040 | $326,428 | ||||||
| Loss from operations | ($111,413) | ($47,201) | ||||||
| Interest (expense) income, net | (1,048) | (4,245) | ||||||
| Change in fair value of tax receivable liability | (6,619) | 66,871 | ||||||
| Other (loss) income | (455) | (510) | ||||||
| Total other income (expense) | (8,122) | 62,116 | ||||||
| Income (loss) before income tax benefit (expense) | (119,535) | 14,915 | ||||||
| Income tax benefit (expense) | 2,115 | (6,174) | ||||||
| Net income (loss) | ($117,420) | $8,741 | ||||||
| Add: | ||||||||
| Interest expense (income), net | 1,048 | 4,245 | ||||||
| Depreciation and amortization (a) | 103,857 | 107,751 | ||||||
| Income tax (benefit) expense | (2,115) | 6,174 | ||||||
| EBITDA | ($14,630) | $126,911 | ||||||
| Loss on business disposition (i) | 10,027 | — | ||||||
| Loss on extinguishment of debt (j) | — | — | ||||||
| Loss on termination of interest rate hedge (k) | — | — | ||||||
| Non-cash change in fair value of contingent consideration (b) | — | (3,300) | ||||||
| Non-cash impairment loss (c) | 75,800 | 8,090 | ||||||
| Non-cash change in fair value of assets and liabilities (d) | 7,494 | (66,871) | ||||||
| Share-based compensation expense (e) | 22,156 | 20,532 | ||||||
| Transaction expenses (f) | 8,523 | 18,993 | ||||||
| Restructuring and other strategic initiative costs (g) | 11,908 | 7,870 | ||||||
| Other non-recurring charges (h) | 5,528 | 12,294 | ||||||
| Adjusted EBITDA | $126,806 | $124,519 | ||||||
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income
For the Three Months Ended December 31, 2023 and 2022
(Unaudited)
| Three Months Ended December 31, | ||||||||
| ($ in thousands) | 2023 | 2022 | ||||||
| Revenue | $75,987 | $72,673 | ||||||
| Operating expenses | ||||||||
| Costs of services (exclusive of depreciation and amortization shown separately below) | $17,261 | $14,896 | ||||||
| Selling, general and administrative | 36,679 | 41,682 | ||||||
| Depreciation and amortization | 24,711 | 25,309 | ||||||
| Change in fair value of contingent consideration | — | 990 | ||||||
| Impairment loss | 75,750 | 8,090 | ||||||
| Total operating expenses | $154,401 | $90,967 | ||||||
| Loss from operations | ($78,414) | ($18,294) | ||||||
| Interest (expense) income, net | 365 | (1,117) | ||||||
| Change in fair value of tax receivable liability | (2,903) | 11,390 | ||||||
| Other (loss) income | (145) | (384) | ||||||
| Total other income (expense) | (2,683) | 9,889 | ||||||
| Income (loss) before income tax benefit (expense) | (81,097) | (8,405) | ||||||
| Income tax benefit (expense) | 3,423 | 240 | ||||||
| Net income (loss) | ($77,674) | ($8,165) | ||||||
| Add: | ||||||||
| Amortization of acquisition-related intangibles (l) | 20,969 | 19,549 | ||||||
| Non-cash change in fair value of contingent consideration (b) | — | 990 | ||||||
| Non-cash impairment loss (c) | 75,750 | 8,090 | ||||||
| Non-cash change in fair value of assets and liabilities(d) | 3,778 | (11,390) | ||||||
| Share-based compensation expense (e) | 5,899 | 5,990 | ||||||
| Transaction expenses (f) | 921 | 2,877 | ||||||
| Restructuring and other strategic initiative costs (g) | 3,372 | 3,705 | ||||||
| Other non-recurring charges (h) | 520 | 7,599 | ||||||
| Non-cash interest expense (m) | 712 | 712 | ||||||
| Pro forma taxes at effective rate (n) | (7,906) | (8,157) | ||||||
| Adjusted Net Income | $26,341 | $21,800 | ||||||
| Shares of Class A common stock outstanding (on an as-converted basis) (o) | 97,063,687 | 96,388,127 | ||||||
| Adjusted Net Income per share | $0.27 | $0.23 | ||||||
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income
For the Years Ended December 31, 2023 and 2022
(Unaudited)
| Year Ended December 31, | ||||||||
| ($ in thousands) | 2023 | 2022 | ||||||
| Revenue | $296,627 | $279,227 | ||||||
| Operating expenses | ||||||||
| Costs of services (exclusive of depreciation and amortization shown separately below) | $69,703 | $64,826 | ||||||
| Selling, general and administrative | 148,653 | 149,061 | ||||||
| Depreciation and amortization | 103,857 | 107,751 | ||||||
| Change in fair value of contingent consideration | — | (3,300) | ||||||
| Loss on business disposition | 10,027 | — | ||||||
| Impairment loss | 75,800 | 8,090 | ||||||
| Total operating expenses | $408,040 | $326,428 | ||||||
| Loss from operations | ($111,413) | ($47,201) | ||||||
| Interest (expense) income, net | (1,048) | (4,245) | ||||||
| Change in fair value of tax receivable liability | (6,619) | 66,871 | ||||||
| Other (loss) income | (455) | (510) | ||||||
| Total other income (expense) | (8,122) | 62,116 | ||||||
| Income (loss) before income tax benefit (expense) | (119,535) | 14,915 | ||||||
| Income tax benefit (expense) | 2,115 | (6,174) | ||||||
| Net income (loss) | ($117,420) | $8,741 | ||||||
| Add: | ||||||||
| Amortization of acquisition-related intangibles (l) | 81,642 | 89,473 | ||||||
| Loss on business disposition (i) | 10,027 | — | ||||||
| Loss on extinguishment of debt (j) | — | — | ||||||
| Loss on extinguishment of interest rate hedge (k) | — | — | ||||||
| Non-cash change in fair value of contingent consideration (b) | — | (3,300) | ||||||
| Non-cash impairment loss (c) | 75,800 | 8,090 | ||||||
| Non-cash change in fair value of assets and liabilities (d) | 7,494 | (66,871) | ||||||
| Share-based compensation expense (e) | 22,156 | 20,532 | ||||||
| Transaction expenses (f) | 8,523 | 18,993 | ||||||
| Restructuring and other strategic initiative costs (g) | 11,908 | 7,870 | ||||||
| Other non-recurring charges (h) | 5,528 | 12,294 | ||||||
| Non-cash interest expense (m) | 2,848 | 2,835 | ||||||
| Pro forma taxes at effective rate (n) | (23,564) | (18,871) | ||||||
| Adjusted Net Income | $84,942 | $79,786 | ||||||
| Shares of Class A common stock outstanding (on an as-converted basis) (o) | 96,850,559 | 96,684,629 | ||||||
| Adjusted Net Income per share | $0.88 | $0.83 | ||||||
Reconciliation of Operating Cash Flow to Free Cash Flow
For the Three Months and Years Ended December 31, 2023 and 2022
(Unaudited)
| Three Months ended December 31, | Year Ended December 31, | |||||||||||||||
| ($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net cash provided by operating activities | $34,863 | $21,831 | $103,614 | $74,223 | ||||||||||||
| Capital expenditures | ||||||||||||||||
| Cash paid for property and equipment | (183) | (553) | (733) | (3,176) | ||||||||||||
| Capitalized software development costs | (12,893) | (7,383) | (50,083) | (33,615) | ||||||||||||
| Total capital expenditures | (13,076) | (7,936) | (50,816) | (36,791) | ||||||||||||
| Free cash flow | $21,787 | $13,895 | $52,798 | $37,432 | ||||||||||||
| Free cash flow conversion (p) | 65% | 39% | 42% | 30% | ||||||||||||
Reconciliation of Revenue Growth to Organic Revenue Growth and Normalized Organic Revenue Growth
For the Year-over-Year Change Between the Three Months Ended December 31, 2023 and 2022
(Unaudited)
| Q4 YoY Change | |||||
| Total Revenue growth | 5% | ||||
| Less: Growth from acquisitions and dispositions | (5%) | ||||
| Organic revenue growth (q) | 10% | ||||
| Less: Growth from contributions related to political media | (4%) | ||||
| Normalized organic revenue growth (r) | 14% | ||||
Reconciliation of Gross Profit Growth to Organic Gross Profit Growth and Normalized Organic Gross Profit Growth by Segment
For the Year-over-Year Change Between the Three Months Ended December 31, 2023 and 2022
(Unaudited)
| Consumer Payments | Business Payments | Total | |||||||||||
| Gross profit growth | 6% | (13%) | 2% | ||||||||||
| Less: Growth from acquisitions and dispositions | (7%) | — | (6%) | ||||||||||
| Organic gross profit growth (s) | 13% | (13%) | 8% | ||||||||||
| Less: Growth from contributions related to political media | — | (38%) | (5%) | ||||||||||
| Normalized organic gross profit growth (t) | 13% | 25% | 13% | ||||||||||
Reconciliation of Gross Profit Growth to Organic Gross Profit Growth and Normalized Organic Gross Profit Growth
For the Year-over-Year Change Between the Years Ended December 31, 2023 and 2022
(Unaudited)
| FY 2023 YoY Change | |||||
| Gross profit growth | 6% | ||||
| Less: Growth from acquisitions and dispositions | (4%) | ||||
| Organic gross profit growth (s) | 10% | ||||
| Less: Growth from contributions related to political media | (3%) | ||||
| Normalized organic gross profit growth (t) | 13% | ||||
| (a) | See footnote (l) for details on amortization and depreciation expenses. | |
| (b) | 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. | |
| (c) | For the three months ended December 31, 2023, reflects non-cash goodwill impairment loss related to the Business Payments segment. In addition, for the year ended December 31, 2023, reflects non-cash impairment loss related to a trade name write-off of Media Payments. For the three months and the year ended December 31, 2022, reflects non-cash impairment loss related to trade names write-offs of BillingTree and Kontrol. | |
| (d) | For the three months and 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 three months and 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. | |
| (e) | Represents compensation expense associated with equity compensation plans. | |
| (f) | Primarily consists of (i) during the three months and 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 three months and year ended December 31, 2022, professional service fees and other costs incurred in connection with the acquisitions of BillingTree, Kontrol Payables and Payix. | |
| (g) | Reflects costs associated with reorganization of operations, consulting fees related to processing services and other operational improvements, including restructuring and integration activities related to acquired businesses, that were not in the ordinary course during the three months and years ended December 31, 2023 and 2022. | |
| (h) | For the three months and 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 three months and 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. | |
| (i) | Reflects the loss recognized related to the disposition of Blue Cow. | |
| (j) | Reflects write-offs of debt issuance costs relating to Hawk Parent’s term loans. | |
| (k) | Reflects realized loss of REPAY's interest rate hedging arrangement which terminated in conjunction with the repayment of Hawk Parent’s term loans. | |
| (l) | For the three months and 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. See additional information below for an analysis of amortization expenses: |
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| ($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Acquisition-related intangibles | $20,969 | $19,549 | $81,642 | $89,473 | ||||||||||||
| Software | 3,150 | 5,067 | 19,789 | 15,921 | ||||||||||||
| Amortization | $24,119 | $24,616 | $101,431 | $105,394 | ||||||||||||
| Depreciation | 592 | 693 | 2,426 | 2,357 | ||||||||||||
| Total Depreciation and amortization (1) | $24,711 | $25,309 | $103,857 | $107,751 | ||||||||||||
| (1) | 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. | |
| (m) | Represents amortization of non-cash deferred debt issuance costs. | |
| (n) | Represents pro forma income tax adjustment effect associated with items adjusted above. | |
| (o) | Represents the weighted average number of shares of Class A common stock outstanding (on an as-converted basis assuming conversion of outstanding Post-Merger REPAY Units) for the three months and year ended December 31, 2023 and 2022. These numbers do not include any shares issuable upon conversion of the Company’s convertible senior notes due 2026. See the reconciliation of basic weighted average shares outstanding to the non-GAAP Class A common stock outstanding on an as-converted basis for each respective period below: | |
| Three Months Ended December 31, | Year Ended December 31, | |||||||
| 2023 | 2022 | 2023 | 2022 | |||||
| Weighted average shares of Class A common stock outstanding - basic | 91,206,870 | 88,519,236 | 90,048,638 | 88,792,453 | ||||
| Add: Non-controlling interests Weighted average Post-Merger REPAY Units exchangeable for Class A common stock | 5,856,817 | 7,868,891 | 6,801,921 | 7,892,176 | ||||
| Shares of Class A common stock outstanding (on an as-converted basis) | 97,063,687 | 96,388,127 | 96,850,559 | 96,684,629 | ||||
| (p) | Represents Free Cash Flow divided by Adjusted EBITDA. | |
| (q) | Represents year-on-year revenue growth that excludes incremental revenue attributable to acquisitions and dispositions made in the applicable prior period or any subsequent period. | |
| (r) | Represents year-on-year organic revenue growth that excludes incremental revenue attributable to REPAY’s media payments business related to the cyclical political media spending associated with the 2022 mid-term elections in the applicable prior period or any subsequent period. | |
| (s) | Represents year-on-year gross profit growth that excludes incremental gross profit attributable to acquisitions and dispositions made in the applicable prior period or any subsequent period. | |
| (t) | Represents year-on-year organic gross profit growth that excludes incremental gross profit attributable to REPAY’s media payments business related to the cyclical political media spending associated with the 2022 mid-term elections in the applicable prior period or any subsequent period. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240228027217/en/
Investor Relations Contact for REPAY:
ir@repay.com
Media Relations Contact for REPAY:
Kristen Hoyman
(404) 637-1665
khoyman@repay.com
Source: Repay Holdings Corporation
ACG Atlanta Announces 40 Fastest--Growing Companies in Georgia
Honorees are recognized at the Celebration in June and via an Online Platform
May 18, 2023: ATLANTA - The Atlanta Chapter of the Association for Corporate Growth® (ACG), a
global professional organization with the mission of Driving Middle-Market Growth®, today announced the 2023 Georgia Fast 40, recognizing the top 40 fastest-growing middle-market companies in Georgia.
“The companies being honored this year exemplify ACG’s focus on driving middle-market growth and demonstrate the strength and significance of this sector in Georgia,” said Meg Williams, Executive Director of the Association for Corporate Growth’s Atlanta chapter.
Applicants were required to submit three years of verifiable revenue and employment growth
records, which were validated by the national accounting firm and founding Diamond sponsor,
Cherry Bekaert LLP. An ACG Committee evaluated each company and conducted in-person interviews with all qualified applicants. All companies on the list are for-profit and headquartered in Georgia. These firms reported 2022 year-end revenues ranging from $15 to $500 million. ACG Atlanta will announce additional honorees with revenues up to $1 billion in the next coming weeks.
“These 40+ companies represent almost 10,000 new jobs and over 2.6 billion dollars in revenue growth over the last three years,” said Brooks Morris of the Georgia Fast 40 Awards and principal with Cresa. “In speaking with many of the CEO’s, the supportive business environment and accessibility of capital are contributors to growth. By far the biggest challenge is the tightness of the labor market. We are proud to honor these companies and look forward to learning more insights online and at the celebration in June.”
ACG Atlanta will present the awards and ranking at the 2023 Georgia Fast 40 celebration at the
Buckhead Theatre on June 27, 2023. Single tickets for ACG Members can be purchased online at
http://www.acg.org/atlanta.
Honored companies for 2023 include:
Amware Fulfillment, LLC
Acadia.IO LLC
Albion General Contractors, Inc.
Aprio, LLP
Arkadios Capital
Artisan Custom Closets
BIG Language Solutions
BIOLYTE
C & H Services of NGA, Hankins Transportation, Hankins Crushing
Core Clinical Partners
Diversified Energy Supply
DLH Corporation
EDS Service Solutions, LLC
Enpol, LLC
Exploring Inc
Flip Electronics
Flock Safety
Florence Healthcare
Grayshift
Green Worldwide Shipping, LLC
Groundfloor Finance, Inc
Hamilton International LLC
Innovien Solutions
Kahua, Inc.
Kamstrup Water Metering LLC
LeaseQuery
MADISON STEEL, INC.
Merit Financial Advisors
MessageGears
Moneypenny
Office Images, Inc.
PDI Technologies
PrizePicks
Prosponsive Logistics
Quatrro Business Support Services
REPAY
SGA Dental Partners
SpendHQ
Stord
Summit Spine & Joint Centers
T Sportline
About ACG Atlanta
ACG’s Global Network comprises more than 100,000 middle market professionals from corporations, private equity, finance, and professional service firms representing Fortune 500, Fortune1000, FTSE 100, and mid-market companies in 59 chapters in North America and Europe. Founded in 1974, ACG Atlanta is one of the oldest and most active chapters, providing the area's executives and professionals with a unique forum for exchanging ideas and experiences concerning organic and acquisitive growth. Programs include M&A SOUTH, The Georgia Fast 40 Honoree Awards and Celebration, Taste of ACG Atlanta, a Deal of the Year event as well as an active Women’s Forum and Young Professionals group.
Contact: Meg Williams, 404.846.4455, mwilliams@acg.org
Financial Institutions can now provide REPAY’s payment solution to their users through Q2’s Digital Banking Platform
ATLANTA--(BUSINESS WIRE)--May 19, 2023-- Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY”), a leading provider of vertically-integrated payment solutions, today announced its integration with Q2’s Digital Banking Platform, via the Q2 Partner Accelerator Program. Q2 Holdings, Inc. (NYSE: QTWO) is a leading provider of digital transformation solutions for banking and lending. As part of the Q2 Partner Accelerator Program, financial institutions will be able to purchase REPAY and then offer its payment technology directly through Q2’s Digital Banking Platform, further expanding REPAY’s reach in the personal loan and credit union industries.
The Q2 Partner Accelerator is a program through the Q2 Innovation Studio that allows in-demand financial services companies who are leveraging the Q2 SDK to pre-integrate their technology into the Q2 Digital Banking Platform. This enables financial institutions to work with these partners, purchase their solutions and rapidly deploy their standardized integrations to their customers.
“Q2 has a strong reputation as a company that works to provide the best services possible in the financial and banking industries,” says Jake Moore, EVP, Consumer Payments, REPAY. “We are committed to expanding our offerings in the personal loan and credit union verticals and look forward to delivering our robust payment technology to clients using Q2’s Digital Banking Platform.”
"We are pleased to welcome REPAY to the Q2 Partner Accelerator program," said Johnny Ola, managing director of the Q2 Innovation Studio. "Financial Institutions now have the capability to offer REPAY’s payment solution through Q2’s Digital Banking Platform.”
The integration will enable REPAY to offer its payment acceptance capabilities, including card and ACH solutions, to financial institutions using Q2’s Digital Banking Platform.
To learn more about the Q2 Innovation Studio Partner Accelerator Program, please click here.
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.
About Q2 Holdings, Inc.
Q2 is a leading provider of digital banking and lending solutions to banks, credit unions, alternative finance, and fintech companies in the U.S. and internationally. Q2 enables its financial institutions and fintech companies to provide comprehensive, secure, data-driven digital client engagement solutions – from consumers to small businesses and corporate clients. Headquartered in Austin, Texas, Q2 has offices throughout the world and is publicly traded on the NYSE under the stock symbol QTWO. To learn more, please visit Q2.com. Follow us on LinkedIn and Twitter to stay up-to-date.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230519005015/en/
Investor Relations for REPAY:
ir@repay.com
Media Relations for REPAY:
Kristen Hoyman
khoyman@repay.com
Source: Repay Holdings Corporation
Q1 2023 Gross Profit Growth of 11% and Organic Gross Profit Growth of 13% Year-over-Year
Reiterates Full Year 2023 Outlook
ATLANTA--(BUSINESS WIRE)--May 10, 2023-- Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY” or the “Company”), a leading provider of vertically-integrated payment solutions, today reported financial results for its first quarter ended March 31, 2023.
First Quarter 2023 Financial Highlights
| ($ in millions) | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | Q1 2023 | YoY Change | |||||
| Card payment volume | $6414.0 | $6,196.3 | $6,416.8 | $6,611.8 | $6,581.4 | 3% | |||||
| Revenue | 67.6 | 67.4 | 71.6 | 72.7 | 74.5 | 10% | |||||
| Gross profit (1) | 51.0 | 50.7 | 54.9 | 57.8 | 56.6 | 11% | |||||
| Net (loss) income | 12.9 | (1.4) | 5.4 | (8.2) | (27.9) | - | |||||
| Adjusted EBITDA (2) | 29.3 | 27.6 | 31.7 | 36.0 | 31.2 | 6% | |||||
| Adjusted Net Income (2) | 18.6 | 16.6 | 22.8 | 21.8 | 19.2 | 3% |
| (1) | Gross profit represents revenue less costs of services. | |
| (2) | Adjusted EBITDA and Adjusted Net Income are non-GAAP financial measures. See “Non-GAAP Financial Measures” and the reconciliations of Adjusted EBITDA and Adjusted Net Income to their most comparable GAAP measures provided below for additional information. |
“We are pleased with our results for the first quarter, which include organic revenue growth of 12% and organic gross profit growth of 13%. We believe these results highlight our resilient and diversified business model,” said John Morris, CEO of REPAY. “Our Consumer Payments segment experienced 17% organic gross profit growth year over year driven by the ongoing secular tailwinds within the payments industry, the demand for our products, along with our focus on go-to-market and product expansions. We remain excited about our prospects in the Business Payments segment, where we saw positive momentum in gross profit growth for that segment exiting the quarter, which has continued into the second quarter of 2023. We also grew our AP supplier network to over 174,000 from approximately 160,000 at the end of 2022.”
First Quarter 2023 Business Highlights
The Company's achievements in the quarter, including those highlighted below, reinforce management's belief in the ability of the Company to drive durable and sustained growth across REPAY's diversified business model.
- 13% year-over-year organic gross profit growth 1
- Consumer Payments organic gross profit growth 1 of approximately 17% year-over-year
- Expanded AP supplier network to 174,000, an increase of approximately 37% year-over-year
- Added eight new integrated software partners to bring the total to 248 software relationships as of the end of the first quarter
- Increased instant funding volume by 45% year-over-year
- The Company now serves over 250 Credit Unions, an increase of approximately 20% year-over-year
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 its clients to collect payments and disburse funds to consumers and includes its clearing and settlement solutions (“RCS”). RCS is REPAY’s proprietary clearing and settlement platform through which it markets customizable payment processing programs to other ISOs and payment facilitators. The strategic vertical markets served by the Consumer Payments segment primarily include personal loans, automotive loans, receivables management, credit unions, mortgage servicing, consumer healthcare and diversified retail.
Business Payments –The Business Payments segment provides payment processing solutions (including accounts payable automation, debit and credit card processing, virtual credit card processing, ACH processing and other electronic payment acceptance solutions) that enable REPAY’s clients to collect or send payments to other businesses. The strategic vertical markets served within the Business Payments segment primarily include retail automotive, education, field services, governments and municipalities, healthcare, media, homeowner association management and hospitality.
Segment Card Payment Volume, Revenue, Gross Profit, and Gross Profit Margin
| Three Months Ended March 31, | ||||
| ($ in thousand) | 2023 | 2022 | % Change | |
| Card payment volume | ||||
| Consumer Payments | $5,524,764 | $5,290,543 | 4% | |
| Business Payments | 1,056,619 | 1,123,409 | (6%) | |
| Total card payment volume | $6,581,383 | $6,413,952 | 3% | |
| Revenue | ||||
| Consumer Payments | $69,940 | $61,081 | 15% | |
| Business Payments | 8,675 | 8,892 | (2%) | |
| Elimination of intersegment revenues | (4,078) | (2,409) | ||
| Total revenue | $74,537 | $67,564 | 10% | |
| Gross profit (1) | ||||
| Consumer Payments | $54,625 | $47,491 | 15% | |
| Business Payments | 6,025 | 5,917 | 2% | |
| Elimination of intersegment revenues | (4,078) | (2,409) | ||
| Total gross profit | $56,572 | $50,999 | 11% | |
| Total gross profit margin (2) | 76% | 75% |
| (1) | Gross profit represents revenue less costs of services. | |
| (2) | Gross profit margin represents total gross profit / total revenue. |
2023 Outlook
“We're off to a strong start in 2023 and feel good about our Q1 results. Based on the current macroeconomic uncertainty, we are reaffirming our 2023 outlook,” said Tim Murphy, CFO of REPAY. “We continue to expect adjusted free cash flow conversion to remain strong in 2023, accelerating throughout the year into 2024 as we realize the benefits from investments we’ve made in sales, product, and technology over the past several years.”
REPAY reiterates its previously provided outlook for full year 2023, as shown below.
| Full Year 2023 Outlook | |
| Card Payment Volume | $26.0 - 27.2 billion |
| Revenue | $272 - 288 million |
| Gross Profit | $216 - 228 million |
| Adjusted EBITDA | $122 - 130 million |
REPAY does not provide quantitative reconciliation of forward-looking, non-GAAP financial measures, such as forecasted 2023 Adjusted EBITDA, to the most directly comparable GAAP financial measure, because it is difficult to reliably predict or estimate the relevant components without unreasonable effort due to future uncertainties that may potentially have a significant impact on such calculations, and providing them may imply a degree of precision that would be confusing or potentially misleading.
Conference Call
REPAY will host a conference call to discuss first quarter 2023 financial results today, May 10, 2023 at 5:00 pm ET. Hosting the call will be John Morris, CEO, and Tim Murphy, CFO. The call will be webcast live from REPAY’s investor relations website at https://investors.repay.com/investor-relations. The conference call can also be accessed live over the phone by dialing (877) 407-3982, or for international callers (201) 493-6780. A replay will be available one hour after the call and can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers; the conference ID is 13737310. The replay will be available at https://investors.repay.com/investor-relations.
Non-GAAP Financial Measures
This report includes certain non-GAAP financial measures that management uses to evaluate the Company’s operating business, measure performance, and make strategic decisions. Adjusted EBITDA is a non-GAAP financial measure that represents net income prior to interest expense, tax expense, depreciation and amortization, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as loss on business disposition, non-cash change in fair value of contingent consideration, non-cash change in fair value of assets and liabilities, share-based compensation charges, transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges. Adjusted Net Income is a non-GAAP financial measure that represents net income prior to amortization of acquisition-related intangibles, as adjusted to add back certain charges deemed to not be part of normal operating expenses, loss on business disposition, non-cash charges and/or non-recurring charges, such as non-cash change in fair value of contingent consideration, non-cash 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 months ended March 31, 2023 and 2022 (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. Adjusted Free Cash Flow is a non-GAAP financial measure that represents net cash flow provided by operating activities less total capital expenditures, as adjusted to add back certain charges deemed to not be part of normal operating expenses and/or non-recurring charges, such as transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges. REPAY believes that Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share, organic gross profit growth and Adjusted Free Cash Flow provide useful information to investors and others in understanding and evaluating its operating results in the same manner as management. However, these non-GAAP financial measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income, operating profit, net cash provided by operating activities, or any other operating performance measure calculated in accordance with GAAP. Using these non-GAAP financial measures to analyze REPAY’s business has material limitations because the calculations are based on the subjective determination of management regarding the nature and classification of events and circumstances that investors may find significant. In addition, although other companies in REPAY’s industry may report measures titled as the same or similar measures, such non-GAAP financial measures may be calculated differently from how REPAY calculates its non-GAAP financial measures, which reduces their overall usefulness as comparative measures. Because of these limitations, you should consider REPAY’s non-GAAP financial measures alongside other financial performance measures, including net income, net cash provided by operating activities and REPAY’s other financial results presented in accordance with GAAP.
Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, REPAY’s plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “guidance,” “will likely result,” “are expected to,” “will continue,” “should,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, REPAY’s 2023 outlook and other financial guidance, expected demand on REPAY’s product offering, including further implementation of electronic payment options and statements regarding REPAY’s market and growth opportunities, and REPAY’s business strategy and the plans and objectives of management for future operations. Such forward-looking statements are based upon the current beliefs and expectations of REPAY’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond REPAY’s control.
In addition to factors disclosed in REPAY’s reports filed with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent Form 10-Qs, and those identified elsewhere in this communication, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: exposure to economic conditions and political risk affecting the consumer loan market, the receivables management industry and consumer and commercial spending, including bank failures or other adverse events affecting financial institutions, inflationary pressures, general economic slowdown or recession; changes in the payment processing market in which REPAY competes, including with respect to its competitive landscape, technology evolution or regulatory changes; changes in the vertical markets that REPAY targets, including the regulatory environment applicable to REPAY’s clients; the ability to retain, develop and hire key personnel; risks relating to REPAY’s relationships within the payment ecosystem; risk that REPAY may not be able to execute its growth strategies, including identifying and executing acquisitions; risks relating to data security; changes in accounting policies applicable to REPAY; and the risk that REPAY may not be able to maintain effective internal controls.
Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance. All information set forth herein speaks only as of the date hereof in the case of information about REPAY or the date of such information in the case of information from persons other than REPAY, and REPAY disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication. Forecasts and estimates regarding REPAY’s industry and end markets are based on sources it believes to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part. Pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.
About REPAY
REPAY provides integrated payment processing solutions to verticals that have specific transaction processing needs. REPAY’s proprietary, integrated payment technology platform reduces the complexity of electronic payments for clients, while enhancing the overall experience for consumers and businesses.
Condensed Consolidated Statement of Operations (Unaudited)
| Three Months ended March 31, | ||||
| ($ in thousands) | 2023 | 2022 | ||
| Revenue | $74,537 | $67,564 | ||
| Operating expenses | ||||
| Costs of services (exclusive of depreciation and amortization shown separately below) | $17,965 | 16,565 | ||
| Selling, general and administrative | 38,518 | 32,218 | ||
| Depreciation and amortization | 26,140 | 28,589 | ||
| Change in fair value of contingent consideration | - | (2,900) | ||
| Loss on business disposition | 9,878 | - | ||
| Total operating expenses | $92,501 | $74,472 | ||
| Loss from operations | ($17,964) | ($6,908) | ||
| Other income (expense) | ||||
| Interest expense | (1,160) | (988) | ||
| Change in fair value of tax receivable liability | (4,538) | 24,619 | ||
| Other income | 87 | 6 | ||
| Total other income (expense) | (5,611) | 23,637 | ||
| Income (loss) before income tax expense | (23,575) | 16,729 | ||
| Income tax expense | (4,357) | (3,843) | ||
| Net income (loss) | ($27,932) | $12,886 | ||
| Net loss attributable to non-controlling interest | (1,540) | (767) | ||
| Net income (loss) attributable to the Company | ($26,392) | ($13,653) | ||
| Weighted-average shares of Class A common stock outstanding - basic | 88,615,760 | 88,607,655 | ||
| Weighted-average shares of Class A common stock outstanding - diluted | 88,615,760 | 113,015,159 | ||
| Income (loss) per Class A share - basic | ($0.30) | $0.15 | ||
| Income (loss) per Class A share - diluted | ($0.30) | $0.12 |
Condensed Consolidated Balance Sheets
| ($ in thousands) | March 31, 2023 (Unaudited) | December 31, 2022 | ||
| Assets | ||||
| Cash and cash equivalents | $91,739 | $64,895 | ||
| Accounts receivable | 34,572 | 33,544 | ||
| Prepaid expenses and other | 14,223 | 18,213 | ||
| Total current assets | 140,534 | 116,652 | ||
| Property, plant and equipment, net | 4,117 | 4,375 | ||
| Restricted cash | 27,090 | 28,668 | ||
| Intangible assets, net | 473,308 | 500,575 | ||
| Goodwill | 792,543 | 827,813 | ||
| Operating lease right-of-use assets, net | 9,302 | 9,847 | ||
| Deferred tax assets | 132,044 | 136,370 | ||
| Other assets | 2,500 | 2,500 | ||
| Total noncurrent assets | 1,440,904 | 1,510,148 | ||
| Total assets | $1,581,438 | $1,626,800 | ||
| Liabilities | ||||
| Accounts payable | $21,303 | $21,781 | ||
| Related party payable | 435 | 1,000 | ||
| Accrued expenses | 27,300 | 29,016 | ||
| Current operating lease liabilities | 2,264 | 2,263 | ||
| Current tax receivable agreement | - | 24,454 | ||
| Other current liabilities | 1,681 | 3,593 | ||
| Total current liabilities | 52,983 | 82,107 | ||
| Long-term debt | 432,031 | 451,319 | ||
| Noncurrent operating lease liabilities | 7,737 | 8,295 | ||
| Tax receivable agreement, net of current portion | 183,696 | 154,673 | ||
| Other liabilities | 1,836 | 2,113 | ||
| Total noncurrent liabilities | 625,300 | 616,400 | ||
| Total liabilities | $678,283 | $698,507 | ||
| Commitments and contingencies | ||||
| Stockholders' equity | ||||
| Class A common stock, $0.0001 par value; 2,000,000,000 shares authorized; 89,750,330 issued and 88,672,189 outstanding as of March 31, 2023; 89,354,754 issued and 88,276,613 outstanding as of December 31, 2022 | 9 | 9 | ||
| Class V common stock, $0.0001 par value; 1,000 shares authorized and 100 shares issued and outstanding as of March 31, 2023 and December 31, 2022 | — | — | ||
| Additional paid-in capital | 1,120,721 | 1,117,736 | ||
| Treasury stock, 1,078,141 shares as of March 31, 2023 and December 31, 2022 | (10,000) | (10,000) | ||
| Accumulated other comprehensive loss | (3) | (3) | ||
| Accumulated deficit | (239,572) | (213,180) | ||
| Total REPAY stockholders' equity | $871,155 | $894,562 | ||
| Non-controlling interests | 32,000 | 33,731 | ||
| Total equity | 903,155 | 928,293 | ||
| Total liabilities and equity | $1,581,438 | $1,626,800 |
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended March 31, | |||
| ($ in thousands) | 2023 | 2022 | |
| Cash flows from operating activities | |||
| Net income (loss) | ($27,932) | $12,886 | |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
| Depreciation and amortization | 26,140 | 28,589 | |
| Stock based compensation | 4,054 | 3,094 | |
| Amortization of debt issuance costs | 712 | 702 | |
| Loss on business disposition | 9,878 | - | |
| Fair value change in tax receivable agreement liability | 4,538 | (24,619) | |
| Fair value change in contingent consideration | - | (2,900) | |
| Deferred tax expense | 4,357 | 3,842 | |
| Change in accounts receivable | (2,541) | (1,076) | |
| Change in prepaid expenses and other | 3,921 | (362) | |
| Change in operating lease ROU assets | 270 | (973) | |
| Change in accounts payable | (916) | 1,656 | |
| Change in related party payable | 435 | (170) | |
| Change in accrued expenses and other | (1,716) | (7,266) | |
| Change in operating lease liabilities | (264) | 1,030 | |
| Change in other liabilities | (105) | (679) | |
| Net cash provided by operating activities | 20,831 | 13,754 | |
| Cash flows from investing activities | |||
| Purchases of property and equipment | (528) | (553) | |
| Purchases of intangible assets | (13,201) | (7,013) | |
| Proceeds from sale of business, net of cash retained | 40,423 | - | |
| Net cash provided by (used in) investing activities | 26,694 | (7,566) | |
| Cash flows from financing activities | |||
| Payments on long-term debt | (20,000) | — | |
| Shares repurchased under Incentive Plan and ESPP | (1,205) | (1,698) | |
| Payment of loan costs | (54) | — | |
| Payments of contingent consideration up to acquisition date fair value | (1,000) | — | |
| Net cash used in financing activities | (22,259) | (1,698) | |
| Increase in cash, cash equivalents and restricted cash | 25,266 | 4,490 | |
| Cash, cash equivalents and restricted cash at beginning of period | $93,563 | $76,340 | |
| Cash, cash equivalents and restricted cash at end of period | $118,829 | $80,830 | |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||
| Cash paid during the year for: | |||
| Interest | $449 | $286 |
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA For the Three Months Ended March 31, 2023 and 2022 (Unaudited)
| Three Months Ended March 31, | ||
| ($ in thousands) | 2023 | 2022 |
| Revenue | $74,537 | $67,564 |
| Operating expenses | ||
| Costs of services (exclusive of depreciation and amortization shown separately below) | $17,965 | $16,565 |
| Selling, general and administrative | 38,518 | 32,218 |
| Depreciation and amortization | 26,140 | 28,589 |
| Change in fair value of contingent consideration | — | (2,900) |
| Loss on business disposition | 9,878 | — |
| Total operating expenses | $92,501 | $74,472 |
| Loss from operations | ($17,964) | ($6,908) |
| Other income (expense) | ||
| Interest expense | (1,160) | (988) |
| Change in fair value of tax receivable liability | (4,538) | 24,619 |
| Other income | 87 | 6 |
| Total other income (expense) | (5,611) | 23,637 |
| Income (loss) before income tax expense | (23,575) | 16,729 |
| Income tax expense | (4,357) | (3,843) |
| Net income (loss) | ($27,932) | $12,886 |
| Add: | ||
| Interest expense | 1,160 | 988 |
| Depreciation and amortization (a) | 26,140 | 28.589 |
| Income tax expense (benefit) | 4,357 | 3,843 |
| EBITDA | $3,725 | $46,306 |
| Loss on business disposition (b) | 9,878 | — |
| Non-cash change in fair value of contingent consideration (c) | — | (2,900) |
| Non-cash change in fair value of assets and liabilities (d) | 4,538 | (24,619) |
| Share-based compensation expense (e) | 4,054 | 3,357 |
| Transaction expenses (f) | 5,997 | 4,930 |
| Restructuring and other strategic initiative costs (g) | 1,411 | 1,246 |
| Other non-recurring charges (h) | 1,572 | 1,007 |
| Adjusted EBITDA | $31,175 | $29,327 |
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income For the Three Months Ended March 31, 2023 and 2022 (Unaudited)
| Three Months Ended March 31, | ||
| ($ in thousands) | 2023 | 2022 |
| Revenue | $74,537 | $67,564 |
| Operating expenses | ||
| Costs of services (exclusive of depreciation and amortization shown separately below) | $17,965 | $16,565 |
| Selling, general and administrative | 38,518 | 32,218 |
| Depreciation and amortization | 26,140 | 28,589 |
| Change in fair value of contingent consideration | — | (2,900) |
| Loss on business disposition | 9,878 | — |
| Total operating expenses | $92,501 | $74,472 |
| Loss from operations | ($17,964) | ($6,908) |
| Interest expense | (1,160) | (988) |
| Change in fair value of tax receivable liability | (4,538) | 24,619 |
| Other income | 87 | 6 |
| Total other income (expense) | (5,611) | 23,637 |
| Income (loss) before income tax expense | (23,575) | 16,729 |
| Income tax expense | (4,357) | (3,843) |
| Net income (loss) | ($27,932) | $12,886 |
| Add: | ||
| Amortization of acquisition-related intangibles (i) | 19,924 | 23,136 |
| Loss on business disposition (b) | 9,878 | — |
| Non-cash change in fair value of contingent consideration (c) | — | (2,900) |
| Non-cash change in fair value of assets and liabilities (d) | 4,538 | (24,619) |
| Share-based compensation expense (e) | 4,054 | 3,357 |
| Transaction expenses (f) | 5,997 | 4,930 |
| Restructuring and other strategic initiative costs (g) | 1,411 | 1,246 |
| Other non-recurring charges (h) | 1,572 | 1,007 |
| Non-cash interest expense (j) | 712 | 703 |
| Pro forma taxes at effective rate (k) | (961) | (1,194) |
| Adjusted Net Income | $19,193 | $18,552 |
| Shares of Class A common stock outstanding (on an as-converted basis) (l) | 96,481,208 | 96,534,231 |
| Adjusted Net Income per share | $0.20 | $0.19 |
Reconciliation of Operating Cash Flow to Free Cash Flow and Adjusted Free Cash Flow For the Three Months Ended March 31, 2023 and 2022 (Unaudited)
| Three Months ended March 31, | ||
| ($ in thousands) | 2023 | 2022 |
| Net cash provided by operating activities | $20,831 | $13,754 |
| Capital expenditures | ||
| Cash paid for property and equipment | (528) | (553) |
| Cash paid for intangible assets | (13,201) | (7,013) |
| Total capital expenditures | (13,729) | (7,566) |
| Free cash flow | $7,102 | $6,188 |
| Adjustments | ||
| Transaction expenses (f) | 5,997 | 4,930 |
| Restructuring and other strategic initiative costs (g) | 1,411 | 1,246 |
| Other non-recurring charges (h) | 1,572 | 1,007 |
| Adjusted free cash flow | $16,082 | $13,371 |
Reconciliation of Gross Profit Growth to Organic Gross Profit Growth For the Year-over-Year Change Between the Three Months Ended March 31, 2023 and 2022 (Unaudited)
| Q1 YoY Change | |
| Total gross profit growth | 11% |
| Less: Growth from acquisitions and dispositions | (2%) |
| Organic gross profit growth (m) | 13% |
| (a) | See footnote (i) for details on amortization and depreciation expenses. | |
| (b) | Reflects the loss recognized related to the disposition of Blue Cow. | |
| (c) | 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. | |
| (d) | Reflects the changes in management’s estimates of the fair value of the liability relating to the Tax Receivable Agreement. | |
| (e) | Represents compensation expense associated with equity compensation plans, totaling $4.1 million and $3.4 million for the three months ended March 31, 2023 and 2022, respectively. | |
| (f) | Primarily consists of (i) during the three months ended March 31, 2023, professional service fees and other costs incurred in connection with the disposition of Blue Cow Software, and (ii) during the three months ended March 31, 2022, professional service fees and other costs incurred in connection with the acquisitions of BillingTree, Kontrol Payables and Payix. | |
| (g) | Reflects costs associated with reorganization of operations, consulting fees related to processing services and other operational improvements, including restructuring and integration activities related to acquired businesses, that were not in the ordinary course during the three months ended March 31, 2023 and 2022. | |
| (h) | For the three months ended March 31, 2023, reflects payments made to third-parties in connection with a significant expansion of our personnel, one-time payments to certain partners, and non-cash rent expense. For the three months ended March 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. | |
| (i) | For the three months ended March 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. See additional information below for an analysis of amortization expenses: |
| Three months ended March 31, | |||
| ($ in thousands) | 2023 | 2022 | |
| Acquisition-related intangibles | $19,924 | $23,136 | |
| Software | 5,475 | 4,946 | |
| Amortization | $25,399 | $28,082 | |
| Depreciation | 741 | 507 | |
| Total Depreciation and amortization (1) | $26,140 | $28,589 |
| (1) | 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. | |
| (j) | Represents amortization of non-cash deferred debt issuance costs. | |
| (k) | Represents pro forma income tax adjustment effect associated with items adjusted above. | |
| (l) | Represents the weighted average number of shares of Class A common stock outstanding (on an as-converted basis assuming conversion of outstanding Post-Merger REPAY Units) for the three months ended March 31, 2023 and 2022. These numbers do not include any shares issuable upon conversion of the Company’s convertible senior notes due 2026. See the reconciliation of basic weighted average shares outstanding to the non-GAAP Class A common stock outstanding on an as-converted basis for each respective period below: |
| Three Months Ended March 31, | ||
| 2023 | 2022 | |
| Weighted average shares of Class A common stock outstanding - basic | 88,615,760 | 88,607,655 |
| Add: Non-controlling interests | ||
| Weighted average Post-Merger REPAY Units exchangeable for Class A common stock | 7,865,448 | 7,926,576 |
| Shares of Class A common stock outstanding (on an as-converted basis) | 96,481,208 | 96,534,231 |
| (m) | Represents year-on-year gross profit growth that excludes incremental gross profit attributable to acquisitions and dispositions made in the applicable prior period or any subsequent period. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230510005787/en/
Investor Relations Contact for REPAY:
ir@repay.com
Media Relations Contact for REPAY:
Kristen Hoyman
(404) 637-1665
khoyman@repay.com
Source: Repay Holdings Corporation
REPAY is pleased to announce that CRN®, a brand of The Channel Company, has named REPAY’s VP of Partner Marketing, Liz Anderson, to its Women of the Channel list for 2023. Each year, this acclaimed list acknowledges outstanding women across the IT channel whose expertise and vision are leaving a noticeable and commendable mark on the technology industry. This is the seventh consecutive year Liz has been recognized for this honor.
A sought-after thought leader and world-class strategic planner, Liz currently leads the REPAY team responsible for planning and executing highly effective partner programs that leverage automation in support of partner acceleration. Combining sales and marketing (which Liz calls “smarketing” in a tip of the hat to HubSpot). The REPAY partner programs are known to drive increased demand and grow partnership sales.
Each day, Liz harnesses her 20+ years of industry experience to streamline and automate the sales and marketing processes that successfully support, motivate and engage REPAY’s partners. She is truly passionate about the people she works with and is committed to driving mutual success across her team, REPAY’s partners and the channel.
In addition to being named to the Women of the Channel list for seven consecutive years, Liz has also received recognition in recent years as an Acumatica MVP and a REPAY Influencer for Sales & Marketing. She also serves on the Board of Directors for acu-connect. Fun fact: To keep herself motivated on tiring days, Liz listens to upbeat Broadway showtunes.
Here at REPAY, we celebrate Liz and the rest of the incredible Women of the Channel honorees who each focus their unique creativity, strategic thinking, and leadership talents toward driving success for channel partners and customers. CRN honors all the extraordinary women on the CRN 2023 Women of the Channel list for their unwavering dedication and commitment to furthering channel excellence.
“We are ecstatic to announce this year’s honorees and shine a light on these women for their significant achievements, knowing that what they’ve accomplished has paved the way for continued success within the IT channel,” said Blaine Raddon, CEO of The Channel Company. “The channel is stronger because of them, and we look forward to seeing what they do next.”
CRN’s 2023 Women of the Channel list will be featured in the June issue of CRN Magazine and online at www.CRN.com/WOTC.
Why Partner with REPAY?
The world is a busy place these days, which is why REPAY’s philosophy is to act as an extension of your team and drive mutual success.
Our team of payment experts not only makes it easy for you to help your clients accept customer payments and make vendor payments, we also make the partnering experience seamless for you. When you partner with REPAY, you know you’ll work with a team who values a relationship with you and gets to know you so we can prioritize your goals as we would our own.
We are truly committed to mutual partnership success, whether you prefer to be a Referral partner, an Integration partner or a Strategic partner.
Learn more about REPAY’s partnership program.
REPAY’s payment functionality will be integrated directly into Optima’s accounts payable automation solution, transcendAP
ATLANTA--(BUSINESS WIRE)--Apr. 4, 2023-- Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY”), a leading provider of vertically-integrated payment solutions, today announced a new technology integration with Optima Global Solutions (“Optima”), a software and services firm specializing in providing IT consulting and digital transformation solutions. The integration will enable Optima’s customers to further streamline accounts payable processes and securely pay vendors and suppliers directly through transcendAP, Optima’s intelligent accounts payable automation solution for efficient and secure payment of approved invoices.
transcendAP, built on Kofax TotalAgility®, the market leading intelligent automation platform, streamlines the procure to pay lifecycle through automatically capturing, extracting, classifying and processing purchase order and non-purchase order invoices. Available on the cloud, transcendAP includes purchase order (2way) and receipt (3way) matching, role-based approval workflows, exception processing, notifications, intelligent GL coding, end-to-end analytics and real-time ERP integration to single or multiple ERPs.
In tandem with transcendAP’s back-office benefits, the REPAY integration allows businesses to seamlessly pay vendors by streamlining and automating digital outbound payments. Additionally, clients using REPAY’s technology can significantly reduce their fraud risk and earn rebates through the use of virtual cards, which are designated for a single use and specific dollar amount.
The two companies also partner with Sigma Analytics, a professional firm that specializes in accounts payable optimization and monetization through utilizing advanced analytics to audit suppliers and accounts payable to identify and recover lost profits due to overpayments and errors. Together, REPAY, Optima and Sigma Analytics offer a comprehensive digital solution for managing accounts payable that reduces risk, saves time and optimizes and monetizes AP payments.
“The accounts payable process is daunting for businesses across verticals,” said Darin Horrocks, EVP, Business Payments, REPAY. “Through our work with Optima, we’re enabling a full service back-office solution, adding automated payments to a system that already simplifies workflows and makes it easier for businesses to operate at their full capacity and grow for the future.”
“REPAY addresses a key requirement for our accounts payable customers looking to fully automate their payment processes” says Mahesh Yadav, CEO, Optima. “We are excited to partner with REPAY to provide our customers a market-leading, comprehensive payment processing solution. Customers enrolled in the program will have options to efficiently process payments by way of ACH, checks or virtual cards.”
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.
About Optima Global Solutions, Inc.
Optima Global Solutions, Inc. provides solutions, services and consulting that help progressive organizations automate their financial processes. This results in increased efficiency, lower operating costs, fewer processing errors, greater employee productivity, and improved reliability and accuracy for their stakeholders, customers, employees, vendors, and business partners.
Optima builds and optimizes Intelligent Automation Solutions that combine intelligent data capture with business process management best practices to streamline your business operations and increase your bottom line. The transcend portfolio includes accounts payable processing, vendor management, expense tracking, sales order processing, receipt processing and HR onboarding. For more information, visit https://www.optimags.com/.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230404005005/en/
Investor Relations Contact for REPAY:
ir@repay.com
Media Relations Contact for REPAY:
Kristen Hoyman
khoyman@repay.com
Media Relations Contact for Optima:
Art Sarno
asarno@optimags.com
Source: Repay Holdings Corporation
Q4 2022 Gross Profit Growth of 22% Year-over-Year with Strong Margins
Provides 2023 Outlook for Continued Solid Organic Gross Profit Growth
New Segment Disclosure of Consumer Payments and Business Payments
ATLANTA--(BUSINESS WIRE)--Mar. 1, 2023-- Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY” or the “Company”), a leading provider of vertically-integrated payment solutions, today reported financial results for its fourth quarter and full year ended December 31, 2022.
Fourth Quarter 2022 Financial Highlights
| ($ in millions) | Q4 2021 | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | YoY Change | |||||
| Card payment volume | $5,643.1 | $6,414.0 | $6,196.3 | $6,416.8 | $6,611.8 | 17% | |||||
| Revenue | 62.2 | 67.6 | 67.4 | 71.6 | 72.7 | 17% | |||||
| Gross profit (1) | 47.2 | 51.0 | 50.7 | 54.9 | 57.8 | 22% | |||||
| Net (loss) income | (17.4) | 12.9 | (1.4) | 5.4 | (8.2) | 53% | |||||
| Adjusted EBITDA (2) | 27.8 | 29.3 | 27.6 | 31.7 | 36.0 | 29% | |||||
| Adjusted Net Income (2) | 27.2 | 18.6 | 16.6 | 22.8 | 21.8 | (20%) |
| (1) | Gross profit represents revenue less costs of services. | |
| (2) | Adjusted EBITDA and Adjusted Net Income are non-GAAP financial measures. See “Non-GAAP Financial Measures” and the reconciliations of Adjusted EBITDA and Adjusted Net Income to their most comparable GAAP measures provided below for additional information. |
“REPAY delivered strong performance across all key metrics in the fourth quarter, with Revenue and Gross Profit growth of 17% and 22%, respectively. These results capped off a productive year at REPAY, as we invested in sales, marketing and product to position the Company for long term growth,” said John Morris, CEO of REPAY. “Our new business segments – Consumer Payments and Business Payments – demonstrate our areas of focus, investment and opportunity as we move through 2023 and beyond. We believe that we have the right team and technology in place to further penetrate the large, growing addressable market across our target verticals.”
Fourth Quarter 2022 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.
- 17% year-over-year organic gross profit growth1
- Business Payments volumes grew approximately 36% year-over-year
- Expanded AP supplier network to 160,000, an increase of approximately 45% year-over-year
- Added four new integrated software partners to bring the total to 240 software relationships as of the end of the fourth quarter
- Increased instant funding volume by 50% year-over-year
- The Company now serves over 240 Credit Unions, an increase of approximately 20% year-over-year
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
Starting from December 31, 2022, the Company reports its financial results based on two reportable segments.
Consumer Payments –The Consumer Payments segment provides payment processing solutions (including debit and credit card processing, Automated Clearing House (“ACH”) processing and other electronic payment acceptance solutions, as well as REPAY’s loan disbursement product) that enable its clients to collect payments and disburse funds to consumers and includes its clearing and settlement solutions (“RCS”) and Blue Cow Software business (“BCS”). RCS is REPAY’s proprietary clearing and settlement platform through which it markets customizable payment processing programs to other ISOs and payment facilitators. BCS provides enterprise resource planning software solutions that are customized to propane and fuel oil dealers. The strategic vertical markets served by the Consumer Payments segment primarily include personal loans, automotive loans, receivables management, credit unions, mortgage servicing, consumer healthcare, diversified retail and energy related software services. With the divestiture of BCS on February 15, 2023, BCS is no longer included in the Consumer Payments segment as of the sale date.
Business Payments –The Business Payments segment provides payment processing solutions (including accounts payable automation, debit and credit card processing, virtual credit card processing, ACH processing and other electronic payment acceptance solutions) that enable REPAY’s clients to collect or send payments to other businesses. The strategic vertical markets served within the Business Payments segment primarily include retail automotive, education, field services, governments and municipalities, healthcare, homeowner association management and hospitality.
Segment Card Payment Volume, Revenue, Gross Profit, and Gross Profit Margin
| Three Months Ended December 31, | Year Ended December 31, | ||||||
| ($ in thousand) | 2022 (Unaudited) | 2021 (Unaudited) | % Change | 2022 | 2021 | % Change | |
| Card payment volume | |||||||
| Consumer Payments | $5,008,929 | $4,465,705 | 12% | $20,154,657 | $16,109,941 | 25% | |
| Business Payments | 1,602,893 | 1,177,441 | 36% | 4,353,869 | 26% | ||
| Total card payment volume | $6,611,822 | $5,643,146 | 17% | $25,638,854 | $20,463,810 | 25% | |
| Revenue | |||||||
| Consumer Payments | $64,300 | $55,206 | 16% | $248,191 | $194,044 | 28% | |
| Business Payments | 12,334 | 9,333 | 32% | 42,600 | 33,818 | 26% | |
| Elimination of intersegment revenues | (3,961 | (2,339) | (11,564) | (8,604) | |||
| Total revenue | $72,673 | $62,200 | 17% | $279,227 | $219,258 | 27% | |
| Gross profit (1) | |||||||
| Consumer Payments | $53,075 | $42,916 | 24% | $195,542 | $148,614 | 32% | |
| Business Payments | 8,663 | 6,623 | 31% | 30,423 | 23,764 | 28% | |
| Elimination of intersegment revenues | (3,961) | (2,339) | (11,564) | (8,604) | |||
| Total gross profit | $57,777 | $47,200 | 22% | $214,401 | $163,774 | 31% | |
| Total gross profit margin (2) | 80% | 76% | 77% | 75% |
| (1) | Gross profit represents revenue less costs of services. | |
| (2) | Gross profit margin represents total gross profit / total revenue. |
2023 Outlook
“In 2023, we will continue to invest in growth opportunities across our Consumer and Business Payments segments,” said Tim Murphy, CFO of REPAY. “We aim to achieve double digit organic gross profit growth, which excludes contributions of the Blue Cow divestiture following the closing date. We expect Adjusted Free Cash Flow conversion to remain strong in 2023, accelerating throughout the year into 2024, as we realize the benefits from the investments we have been making in sales, product, and technology over the past several years.”
REPAY expects the following financial results for full year 2023:
| Full Year 2023 Outlook | |
| Card Payment Volume | $26.0 - 27.2 billion |
| Revenue | $272 - 288 million |
| Gross Profit | $216 - 228 million |
| Adjusted EBITDA | $122 - 130 million |
REPAY does not provide quantitative reconciliation of forward-looking, non-GAAP financial measures, such as forecasted 2023 Adjusted EBITDA, to the most directly comparable GAAP financial measure, because it is difficult to reliably predict or estimate the relevant components without unreasonable effort due to future uncertainties that may potentially have a significant impact on such calculations, and providing them may imply a degree of precision that would be confusing or potentially misleading.
Conference Call
REPAY will host a conference call to discuss fourth quarter and full year 2022 financial results today, March 1, 2023 at 5:00 pm ET. Hosting the call will be John Morris, CEO, and Tim Murphy, CFO. The call will be webcast live from REPAY’s investor relations website at https://investors.repay.com/investor-relations. The conference call can also be accessed live over the phone by dialing (877) 407-3982, or for international callers (201) 493-6780. A replay will be available one hour after the call and can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers; the conference ID is 13735158. The replay will be available at https://investors.repay.com/investor-relations.
Non-GAAP Financial Measures
This report includes certain non-GAAP financial measures that management uses to evaluate the Company’s operating business, measure performance, and make strategic decisions. Adjusted EBITDA is a non-GAAP financial measure that represents net income prior to interest expense, tax expense, depreciation and amortization, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as loss on extinguishment of debt, loss on termination of interest rate hedge, non-cash change in fair value of contingent consideration, non-cash change in fair value of assets and liabilities, share-based compensation charges, transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges. Adjusted Net Income is a non-GAAP financial measure that represents net income prior to amortization of acquisition-related intangibles, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as loss on extinguishment of debt, loss on termination of interest rate hedge, non-cash change in fair value of contingent consideration, non-cash change in fair value of assets and liabilities, share-based compensation expense, transaction expenses, 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 months and years ended December 31, 2022 and 2021 (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 made in the applicable prior period or any subsequent period. Adjusted Free Cash Flow is a non-GAAP financial measure that represents net cash flow provided by operating activities less total capital expenditures, as adjusted to add back certain charges deemed to not be part of normal operating expenses and/or non-recurring charges, such as transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges. REPAY believes that Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share, organic gross profit growth and Adjusted Free Cash Flow provide useful information to investors and others in understanding and evaluating its operating results in the same manner as management. However, Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share, organic gross profit growth and Adjusted Free Cash Flow are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income, operating profit, 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 Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share, organic gross profit growth, Adjusted Free Cash Flow, or similar measures, such non-GAAP financial measures may be calculated differently from how REPAY calculates its non-GAAP financial measures, which reduces their overall usefulness as comparative measures. Because of these limitations, you should consider Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share, organic gross profit growth, and Adjusted Free Cash Flow alongside other financial performance measures, including net income, net cash provided by operating activities and REPAY’s other financial results presented in accordance with GAAP.
Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, REPAY’s plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “guidance,” “will likely result,” “are expected to,” “will continue,” “should,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, REPAY’s 2023 outlook and other financial guidance, expected demand on REPAY’s product offering, including further implementation of electronic payment options and statements regarding REPAY’s market and growth opportunities, and REPAY’s business strategy and the plans and objectives of management for future operations. Such forward-looking statements are based upon the current beliefs and expectations of REPAY’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond REPAY’s control.
In addition to factors disclosed in REPAY’s reports filed with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2022, and those identified elsewhere in this communication, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: exposure to economic conditions and political risk affecting the consumer loan market, the receivables management industry and consumer and commercial spending, including inflationary pressures, general economic slowdown or recession; 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.
Consolidated Statement of Operations
| Three Months ended December 31, | Year ended December 31, | |||||
| ($ in thousands) | 2022 (Unaudited) | 2021 (Unaudited) | 2022 | 2021 | ||
| Revenue | $72,673 | $62,200 | $279,227 | $219,258 | ||
| Operating expenses | ||||||
| Costs of services (exclusive of depreciation and amortization shown separately below) | $14,896 | 15,000 | $64,826 | $55,484 | ||
| Selling, general and administrative | 41,682 | 33,421 | 149,061 | 120,053 | ||
| Depreciation and amortization | 25,309 | 26,312 | 107,751 | 89,692 | ||
| Change in fair value of contingent consideration | 990 | 5,947 | (3,300) | 5,846 | ||
| Impairment loss | 8,090 | 2,180 | 8,090 | 2,180 | ||
| Total operating expenses | $90,967 | $82,860 | $326,428 | $273,255 | ||
| Loss from operations | ($18,294) | ($20,660) | ($47,201) | ($53,997) | ||
| Interest expense | (1,205) | (916) | (4,375) | (3,679) | ||
| Loss on extinguishment of debt | — | — | — | (5,941) | ||
| Change in fair value of tax receivable liability | 11,390 | (14,208) | 66,871 | (14,109) | ||
| Other (expense) income | (205) | 15 | (135) | 97 | ||
| Other loss | (91) | — | (245) | (9,099) | ||
| Total other income (expense) | 9,889 | (15,109) | 62,116 | (32,731) | ||
| Income (loss) before income tax (expense) benefit | (8,405) | (35,769) | 14,915 | (86,728) | ||
| Income tax (expense) benefit | 240 | 18,371 | (6,174) | 30,691 | ||
| Net income (loss) | ($8,165) | ($17,398) | $8,741 | ($56,037) | ||
| Net loss attributable to non-controlling interest | (1,493) | (1,642) | (4,095) | (5,953) | ||
| Net income (loss) attributable to the Company | ($6,672) | ($15,756) | $12,836 | ($50,084) | ||
| Weighted-average shares of Class A common stock outstanding - basic | 88,519,236 | 88,431,186 | 88,792,453 | 83,318,189 | ||
| Weighted-average shares of Class A common stock outstanding - diluted | 88,519,236 | 88,431,186 | 110,671,731 | 83,318,189 | ||
| Income (loss) per Class A share - basic | ($0.08) | ($0.18) | $0.14 | ($0.60) | ||
| Income (loss) per Class A share - diluted | ($0.08) | ($0.18) | $0.12 | ($0.60) |
Consolidated Balance Sheets
| ($ in thousands) | December 31, 2022 | December 31, 2021 | ||
| Assets | ||||
| Cash and cash equivalents | $64,895 | $50,049 | ||
| Accounts receivable | 33,544 | 33,236 | ||
| Prepaid expenses and other | 18,213 | 12,427 | ||
| Total current assets | 116,652 | 95,712 | ||
| Property, plant and equipment, net | 4,375 | 3,801 | ||
| Restricted cash | 28,668 | 26,291 | ||
| Intangible assets, net | 500,575 | 577,694 | ||
| Goodwill | 827,813 | 824,081 | ||
| Operating lease right-of-use assets, net | 9,847 | 10,500 | ||
| Deferred tax assets | 136,370 | 145,260 | ||
| Other assets | 2,500 | 2,500 | ||
| Total noncurrent assets | 1,510,148 | 1,590,127 | ||
| Total assets | $1,626,800 | $1,685,839 | ||
| Liabilities | ||||
| Accounts payable | $21,781 | $20,083 | ||
| Related party payable | 1,000 | 17,394 | ||
| Accrued expenses | 29,016 | 26,819 | ||
| Current operating lease liabilities | 2,263 | 1,990 | ||
| Current tax receivable agreement | 24,454 | 24,495 | ||
| Other current liabilities | 3,593 | 1,566 | ||
| Total current liabilities | 82,107 | 92,347 | ||
| Long-term debt | 451,319 | 448,485 | ||
| Noncurrent operating lease liabilities | 8,295 | 9,091 | ||
| Tax receivable agreement, net of current portion | 154,673 | 221,333 | ||
| Other liabilities | 2,113 | 1,547 | ||
| Total noncurrent liabilities | 616,400 | 680,456 | ||
| Total liabilities | $698,507 | $772,803 | ||
| Commitments and contingencies | ||||
| Stockholders' equity | ||||
| Class A common stock, $0.0001 par value; 2,000,000,000 shares authorized, 89,354,754 issued and 88,276,613 outstanding as of December 31, 2022; 88,502,621 issued and outstanding as of December 31, 2021 | 9 | 9 | ||
| Class V common stock, $0.0001 par value; 1,000 shares authorized and 100 shares issued and outstanding as of December 31, 2022 and 2021 | — | — | ||
| Treasury stock, 680,548 and 0 shares as of December 31, 2022 and December 31, 2021, respectively | (10,000) | — | ||
| Additional paid-in capital | 1,117,736 | 1,100,012 | ||
| Accumulated other comprehensive loss | (3) | (2) | ||
| Accumulated deficit | (213,180) | (226,016) | ||
| Total REPAY stockholders' equity | 894,562 | 874,003 | ||
| Non-controlling interests | 33,731 | 39,033 | ||
| Total equity | $928,293 | $913,036 | ||
| Total liabilities and equity | $1,626,800 | $1,685,839 |
Consolidated Statements of Cash Flows
| Year Ended December 31, | |||
| ($ in thousands) | 2022 | 2021 | |
| Cash flows from operating activities | |||
| Net income (loss) | $8,741 | ($56,037) | |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
| Depreciation and amortization | 107,751 | 89,692 | |
| Stock based compensation | 20,255 | 22,311 | |
| Amortization of debt issuance costs | 2,834 | 2,536 | |
| Loss on disposal of property and equipment | 245 | 19 | |
| Loss on extinguishment of debt | — | 5,941 | |
| Loss on sale of interest rate swaps | — | 9,316 | |
| Fair value change in tax receivable agreement liability | (66,871) | 14,109 | |
| Fair value change in contingent consideration | (3,300) | 5,846 | |
| Impairment loss | 8,090 | 2,180 | |
| Payments of contingent consideration in excess of acquisition date fair value | (8,896) | (1,500 | |
| Deferred tax expense (benefit) | 4,192 | (30,728) | |
| Change in accounts receivable | 696 | (6,518) | |
| Change in prepaid expenses and other | (5,786) | (3,801) | |
| Change in operating lease ROU assets | 653 | 2,013 | |
| Change in accounts payable | 1,698 | 4,771 | |
| Change in related party payable | (347) | 1,336 | |
| Change in accrued expenses and other | 2,197 | 637 | |
| Change in operating lease liabilities | (523) | (1,323) | |
| Change in other liabilities | 2,594 | (7,470) | |
| Net cash provided by operating activities | 74,223 | 53,330 | |
| Cash flows from investing activities | |||
| Purchases of property and equipment | (3,176) | (2,863) | |
| Purchases of intangible assets | (36,365) | (20,643) | |
| Purchases of equity investment | — | (2,500) | |
| Acquisition of CPS, net of cash and restricted cash acquired | — | 11 | |
| Acquisition of BillingTree, net of cash and restricted cash acquired | — | (269,003) | |
| Acquisition of Kontrol, net of cash and restricted cash acquired | — | (7,439) | |
| Acquisition of Payix, net of cash and restricted cash acquired | — | (94,898) | |
| Net cash used in investing activities | (39,541) | (397,335) | |
| Cash flows from financing activities | |||
| Issuance of long-term debt | — | 460,000 | |
| Payments on long-term debt | — | (262,654) | |
| Public issuance of Class A Common Stock | — | 142,098 | |
| Shares repurchased under Incentive Plan and ESPP | (2,657) | (4,042) | |
| Treasury shares repurchased | (10,000) | — | |
| Distributions to Members | (951) | (62) | |
| Payment of loan costs | — | (14,051) | |
| Payments of contingent consideration up to acquisition date fair value | (3,851) | (7,449) | |
| Net cash provided by (used in) financing activities | (17,459) | 313,840 | |
| Increase (decrease) in cash, cash equivalents and restricted cash | 17,223 | (30,165) | |
| Cash, cash equivalents and restricted cash at beginning of period | $76,340 | $106,505 | |
| Cash, cash equivalents and restricted cash at end of period | $93,563 | $76,340 | |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||
| Cash paid during the year for: | |||
| Interest | $1,540 | $1,143 | |
| SUPPLEMENTAL SCHEDULE OF NONCASH | |||
| INVESTING AND FINANCING ACTIVITIES | |||
| Acquisition of BillingTree in exchange for Class A Common Stock | $— | $228,250 | |
| Acquisition of Kontrol in exchange for contingent consideration | $— | $500 | |
| Acquisition of Payix in exchange for contingent consideration | $— | $2,850 |
Key Operating and Non-GAAP Financial Data
Unless otherwise stated, all results compare fourth quarter and year ended 2022 results to fourth quarter and year ended 2021 results from continuing operations for the periods ended December 31, respectively.
The following tables and related notes reconcile these non-GAAP measures to GAAP information for the three-months and years ended December 31, 2022 and 2021:
| Three months ended December 31, | Year ended December 31, | ||||||||
| ($ in thousands) | 2022 | 2021 | % Change | 2022 | 2021 | % Change | |||
| Card payment volume | $6,611,822 | $5,643,146 | 17% | $25,638,854 | $20,463,810 | 25% | |||
| Gross profit (1) | 57,777 | 47,200 | 22% | 214,401 | 163,774 | 31% | |||
| Adjusted EBITDA (2) | 35,970 | 27,846 | 29% | 124,649 | 93,200 | 34% |
| (1) | Gross profit represents revenue less costs of services. | |
| (2) | Adjusted EBITDA is a non-GAAP financial measure that represents net income adjusted for interest expense, depreciation and amortization and certain other charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring items. See “Non-GAAP Financial Measures” above and the reconciliation of Adjusted EBITDA to its most comparable GAAP measure below. |
Quarterly Segment Card Payment Volume, Revenue, Gross Profit, and Gross Profit Margin
(Unaudited)
| ($ in thousands) | March 31, 2020 | June 30, 2020 | September 30, 2020 | December 31, 2020 | March 31, 2021 | June 30, 2021 | September 30, 2021 | December 31, 2021 | March 31, 2022 | June 30, 2022 | September 30, 2022 | December 31, 2022 |
| Card payment volume | ||||||||||||
| Consumer Payments | $3,357,611 | $ 3,126,568.00 | $3,121,932 | $3,006,412 | $3,694,138 | $3,523,419 | $4,426,679 | $4,465,705 | $5,290,032 | $4,918,253 | $4,937,443 | $5,008,929 |
| Business Payments | 503,853 | 486,252 | 643,789 | 948,522 | 919,865 | 1,100,127 | 1,156,436 | 1,177,441 | 1,123,920 | 1,278,000 | 1,479,384 | 1,602,893 |
| Total card payment volume | $3,861,464 | $ 3,612,820.00 | $3,765,721 | $3,954,934 | $4,614,003 | $4,623,546 | $5,583,115 | $5,643,146 | $6,413,952 | $6,196,253 | $6,416,827 | $6,611,822 |
| Revenue | ||||||||||||
| Consumer Payments | $36,619 | $33,415 | $34,270 | $36,540 | $42,359 | $41,999 | $54,478 | $55,206 | $61,081 | $59,833 | $62,977 | $64,300 |
| Business Payments | 4,438 | 4,578 | 4,840 | 6,764 | 7,136 | 8,458 | 8,891 | 9,333 | 8,892 | 9,934 | 11,440 | 12,334 |
| Elimination of intersegment revenues | (1,594) | (1,492) | (1,475) | (1,866) | (1,975) | (2,045) | (2,244) | (2,339) | (2,409) | (2,332) | (2,862) | (3,961) |
| Total revenue | $39,463 | $36,501 | $37,635 | $41,438 | $47,520 | $48,412 | $61,125 | $62,200 | $67,564 | $67,435 | $71,555 | $72,673 |
| Gross profit (1) | ||||||||||||
| Consumer Payments | $27,216 | $26,397 | $25,532 | $26,870 | $32,165 | $31,662 | $41,869 | $42,916 | $47,118 | $45,747 | $49,602 | $53,075 |
| Business Payments | 3,069 | 2,869 | 3,086 | 4,977 | 4,855 | 6,074 | 6,212 | 6,623 | 6,290 | 7,289 | 8,181 | 8,663 |
| Elimination of intersegment revenues | (1,594) | (1,492) | (1,475) | (1,866) | (1,975) | (2,045) | (2,244) | (2,339) | (2,409) | (2,332) | (2,862) | (3,961) |
| Total gross profit | $28,691 | $27,774 | $27,143 | $29,981 | $35,045 | $35,691 | $45,837 | $47,200 | $50,999 | $50,704 | $54,921 | $57,777 |
| Total gross profit margin (2) | 73% | 76% | 72% | 72% | 74% | 74% | 75% | 76% | 75% | 75% | 77% | 80% |
| (1) | Gross profit represents revenue less costs of services. | |
| (2) | Gross profit margin represents total gross profit / total revenue. |
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDAFor the Three Months Ended December 31, 2022 and 2021(Unaudited)
| ($ in thousands) | 2022 | 2021 |
| Revenue | $72,673 | $62,200 |
| Operating expenses | ||
| Costs of services (exclusive of depreciation and amortization shown separately below) | $14,896 | $15,000 |
| Selling, general and administrative | 41,682 | 33,421 |
| Depreciation and amortization | 25,309 | 26,312 |
| Change in fair value of contingent consideration | 990 | 5,947 |
| Impairment loss | 8,090 | 2,180 |
| Total operating expenses | $90,967 | $82,860 |
| Loss from operations | ($18,294) | ($20,660) |
| Other (expense) income | ||
| Interest expense | (1,205) | (916) |
| Change in fair value of tax receivable liability | 11,390 | (14,208) |
| Other (expense) income | (205) | 15 |
| Other loss | (91) | — |
| Total other income (expense) | 9,889 | (15,109) |
| Income (loss) before income tax (expense) benefit | (8,405) | (35,769) |
| Income tax (expense) benefit | 240 | 18,371 |
| Net income (loss) | ($8,165) | ($17,398) |
| Add: | ||
| Interest expense | 1,205 | 916 |
| Depreciation and amortization (a) | 25,309 | 26,312 |
| Income tax expense (benefit) | (240) | (18,371) |
| EBITDA | $18,109 | ($8,541) |
| Non-cash change in fair value of contingent consideration (b) | 990 | 5,947 |
| Non-cash impairment loss (c) | 8,090 | 2,180 |
| Non-cash change in fair value of assets and liabilities (d) | (11,390) | 14,208 |
| Share-based compensation expense (e) | 5,990 | 6,082 |
| Transaction expenses (f) | 2,877 | 5,507 |
| Restructuring and other strategic initiative costs (g) | 3,705 | 1,643 |
| Other non-recurring charges (h) | 7,599 | 820 |
| Adjusted EBITDA | $35,970 | $27,846 |
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDAFor the Years Ended December 31, 2022 and 2021(Unaudited)
| Year Ended December 31, | ||
| ($ in thousands) | 2022 | 2021 |
| Revenue | $279,227 | $219,258 |
| Operating expenses | ||
| Costs of services (exclusive of depreciation and amortization shown separately below) | 64,826 | 55,484 |
| Selling, general and administrative | 149,061 | 120,053 |
| Depreciation and amortization | 107,751 | 89,692 |
| Change in fair value of contingent consideration | (3,300) | 5,846 |
| Impairment loss | 8,090 | 2,180 |
| Total operating expenses | $326,428 | $273,255 |
| Loss from operations | ($47,201) | ($53,997) |
| Interest expense | (4,375) | (3,679) |
| Loss on extinguishment of debt | — | (5,941 |
| Change in fair value of tax receivable liability | 66,871 | (14,109) |
| Other (expense) income | (135) | 97 |
| Other loss | (245) | (9,099) |
| Total other income (expense) | 62,116 | (32,731) |
| Income (loss) before income tax (expense) benefit | 14,915 | (86,728) |
| Income tax (expense) benefit | (6,174) | 30,691 |
| Net income (loss) | $8,741 | ($56,037) |
| Add: | ||
| Interest expense | 4,375 | 3,679 |
| Depreciation and amortization (a) | 107,751 | 89,692 |
| Income tax expense (benefit) | 6,174 | (30,691) |
| EBITDA | $127,041 | $6,643 |
| Loss on extinguishment of debt (i) | — | 5,941 |
| Loss on termination of interest rate hedge (j) | — | 9,080 |
| Non-cash change in fair value of warrant liabilities (k) | — | — |
| Non-cash change in fair value of contingent consideration (b) | (3,300) | 5,846 |
| Non-cash impairment loss (c) | 8,090 | 2,180 |
| Non-cash change in fair value of assets and liabilities (d) | (66,871) | 14,109 |
| Share-based compensation expense (e) | 20,532 | 22,311 |
| Transaction expenses (f) | 18,993 | 19,250 |
| Restructuring and other strategic initiative costs (g) | 7,870 | 4,578 |
| Other non-recurring charges (h) | 12,294 | 3,262 |
| Adjusted EBITDA | $124,649 | $93,200 |
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net IncomeFor the Three Months Ended December 31, 2022 and 2021(Unaudited)
| Three Months Ended December 31, | ||
| ($ in thousands) | 2022 | 2021 |
| Revenue | $72,673 | $62,200 |
| Operating expenses | ||
| Costs of services (exclusive of depreciation and amortization shown separately below) | $14,896 | $15,000 |
| Selling, general and administrative | 41,682 | 33,421 |
| Depreciation and amortization | 25,309 | 26,312 |
| Change in fair value of contingent consideration | 990 | 5,947 |
| Impairment loss | 8,090 | 2,180 |
| Total operating expenses | $90,967 | $82,860 |
| Loss from operations | ($18,294) | ($20,660) |
| Interest expense | (1,205) | (916) |
| Change in fair value of tax receivable liability | 11,390 | (14,208) |
| Other (expense) income | (205) | 15 |
| Other loss | (91) | — |
| Total other income (expense) | 9,889 | (15,109) |
| Income (loss) before income tax (expense) benefit | (8,405) | (35,769) |
| Income tax (expense) benefit | 240 | 18,371 |
| Net income (loss) | ($8,165) | ($17,398) |
| Add: | ||
| Amortization of acquisition-related intangibles (l) | 19,549 | 23,174 |
| Non-cash change in fair value of contingent consideration (b) | 990 | 5,947 |
| Non-cash impairment loss (c) | 8,090 | 2,180 |
| Non-cash change in fair value of assets and liabilities(d) | (11,390) | 14,208 |
| Share-based compensation expense (e) | 5,990 | 6,082 |
| Transaction expenses (f) | 2,877 | 5,507 |
| Restructuring and other strategic initiative costs (g) | 3,705 | 1,643 |
| Other non-recurring charges (h) | 7,599 | 820 |
| Non-cash interest expense (m) | 712 | 676 |
| Pro forma taxes at effective rate (n) | (8,157) | (15,614) |
| Adjusted Net Income | $21,800 | $27,225 |
| Shares of Class A common stock outstanding (on an as-converted basis) (o) | 96,388,127 | 96,357,762 |
| Adjusted Net Income per share | $0.23 | $0.28 |
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income For the Years Ended December 31, 2022 and 2021 (Unaudited)
| Year Ended December 31, | ||
| ($ in thousands) | 2022 | 2021 |
| Revenue | $279,227 | $219,258 |
| Operating expenses | ||
| Costs of services (exclusive of depreciation and amortization shown separately below) | 64,826 | 55,484 |
| Selling, general and administrative | 149,061 | 120,053 |
| Depreciation and amortization | 107,751 | 89,692 |
| Change in fair value of contingent consideration | (3,300) | 5,846 |
| Impairment loss | 8,090 | 2,180 |
| Total operating expenses | $326,428 | $273,255 |
| Loss from operations | ($47,201) | ($53,997) |
| Interest expense | (4,375) | (3,679) |
| Loss on extinguishment of debt | — | (5,941) |
| Change in fair value of tax receivable liability | 66,871 | (14,109) |
| Other (expense) income | (135) | 97 |
| Other loss | (245) | (9,099) |
| Total other income (expense) | 62,116 | (32,731) |
| Income (loss) before income tax (expense) benefit | 14,915 | (86,728) |
| Income tax (expense) benefit | (6,174) | 30,691 |
| Net income (loss) | $8,741 | ($56,037) |
| Add: | ||
| Amortization of acquisition-related intangibles (l) | 89,473 | 79,932 |
| Loss on extinguishment of debt (i) | — | 5,941 |
| Loss on extinguishment of interest rate hedge (j) | — | 9,080 |
| Non-cash change in fair value of warrant liabilities (k) | — | — |
| Non-cash change in fair value of contingent consideration (b) | (3,300) | 5,846 |
| Non-cash goodwill impairment loss (c) | 8,090 | 2,180 |
| Non-cash change in fair value of assets and liabilities (d) | (66,871) | 14,109 |
| Share-based compensation expense (e) | 20,532 | 22,311 |
| Transaction expenses (f) | 18,993 | 19,250 |
| Restructuring and other strategic initiative costs (g) | 7,870 | 4,578 |
| Other non-recurring charges (h) | 12,294 | 3,262 |
| Non-cash interest expense (m) | 2,835 | 2,536 |
| Pro forma taxes at effective rate (n) | (18,871) | (39,219) |
| Adjusted Net Income | $79,786 | $73,769 |
| Shares of Class A common stock outstanding (on an as-converted basis) (o) | 96,684,629 | 91,264,512 |
| Adjusted Net Income per share | $0.83 | $0.81 |
Reconciliation of Operating Cash Flow to Free Cash Flow and Adjusted Free Cash FlowFor the Three Months and Years Ended December 31, 2022 and 2021(Unaudited)
| Three Months ended Dec. 31, | Year Ended Dec. 31, | |||
| ($ in thousands) | 2022 | 2021 | 2022 | 2021 |
| Net cash provided by operating activities | $21,831 | $21,848 | $74,223 | $53,330 |
| Capital expenditures | ||||
| Cash paid for property and equipment | -553 | -935 | -3,176 | -2,863 |
| Cash paid for intangible assets (p) | -7,383 | -5,743 | -33,615 | -20,643 |
| Total capital expenditures | -7,936 | -6,678 | -36,791 | -23,506 |
| Free cash flow | $13,895 | $15,170 | $37,432 | $29,824 |
| Adjustments | ||||
| Transaction expenses (f) | 2,877 | 5,507 | 18,993 | 19,250 |
| Restructuring and other strategic initiative costs (g) | 3,705 | 1,643 | 7,870 | 4,578 |
| Other non-recurring charges (h) | 7,599 | 820 | 12,294 | 3,262 |
| Adjusted free cash flow | $28,076 | $23,140 | $76,589 | $56,914 |
Reconciliation of Gross Profit Growth to Organic Gross Profit GrowthFor the Year-over-Year Change Between the Three Months Ended December 31, 2022 and 2021(Unaudited)
| Q4 YoY Change | |
| Total gross profit growth | 22% |
| Less: growth from acquisitions | 5% |
| Organic gross profit growth (q) | 17% |
| (a) | See footnote (l) for details on amortization and depreciation expenses. | |
| (b) | 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. | |
| (c) | For the three months and the year ended December 31, 2022, reflects impairment loss related to trade names write-offs of BillingTree and Kontrol. For the three months and the year ended December 31, 2021, reflects impairment loss related to trade names write-offs of TriSource, APS, Ventanex, cPayPlus and CPS. | |
| (d) | Reflects the changes in management’s estimates of the fair value of the liability relating to the Tax Receivable Agreement. | |
| (e) | Represents compensation expense associated with equity compensation plans, totaling $6.0 million and $20.5 million for the three months and year ended December 31, 2022, respectively, and totaling $6.1 million and $22.3 million for the three months and year ended December 31, 2021, respectively. | |
| (f) | Primarily consists of (i) during the three months and year ended December 31, 2022, professional service fees and other costs incurred in connection with the acquisitions of BillingTree, Kontrol Payables and Payix, and (ii) during the three months and year ended December 31, 2021, professional service fees and other costs incurred in connection with the acquisition of Ventanex, cPayPlus, CPS, BillingTree, Kontrol Payables and Payix, as well as professional service expenses related to the January 2021 equity and convertible notes offerings. | |
| (g) | Reflects costs associated with reorganization of operations, consulting fees related to processing services and other operational improvements, including restructuring and integration activities related to acquired businesses, that were not in the ordinary course during the three months and years ended December 31, 2022 and 2021. Additionally, for the three months and year ended December 31, 2022, reflects one-time severance payments. | |
| (h) | For the three months and year ended December 31, 2022, reflects one-time settlement payments to certain clients and partners, payments made to third-parties in connection with expansion of our personnel, non-recurring performance incentives to employees, franchise taxes and other non-income based taxes, other payments related to COVID-19, non-cash rent expense and loss on disposal of fixed assets. Additionally, for the year ended December 31, 2022, reflects loss on termination of lease. For the three months and year ended December 31, 2021, reflects one-time payments to certain clients and partners and other payments related to COVID-19. For the year ended December 31, 2021, reflects non-cash rent expense and loss on disposal of fixed assets. Additionally, to be consistent with the current year presentation, for the three months and year ended December 31, 2021, reflects payments made to third-parties in connection with expansion of our personnel and franchise taxes and other non-income based taxes. | |
| (i) | Reflects write-offs of debt issuance costs relating to Hawk Parent’s term loans. | |
| (j) | Reflects realized loss of REPAY's interest rate hedging arrangement which terminated in conjunction with the repayment of Hawk Parent’s term loans. | |
| (k) | Reflects the mark-to-market fair value adjustments of the warrant liabilities. | |
| (l) | For the three months and years ended December 31, 2022 and 2021, reflects amortization of client relationships, non-compete agreement, software, and channel relationship intangibles acquired through the business combination with Thunder Bridge, and client relationships, non-compete agreement, and software intangibles acquired through REPAY's acquisitions of TriSource Solutions, APS Payments, Ventanex, cPayPlus, CPS Payments, BillingTree, Kontrol Payables and Payix. This adjustment excludes the amortization of other intangible assets which were acquired in the regular course of business, such as capitalized internally developed software and purchased software. See additional information below for an analysis of amortization expenses: |
| Three months ended December 31, | Year ended December 31, | ||||
| ($ in thousands) | 2022 | 2021 | 2022 | 2021 | |
| Acquisition-related intangibles | $19,549 | $23,174 | $89,473 | $79,932 | |
| Software | 5,067 | 2,714 | 15,921 | 8,464 | |
| Amortization | $24,616 | $25,888 | $105,394 | $88,396 | |
| Depreciation | 693 | 424 | 2,357 | 1,296 | |
| Total Depreciation and amortization (1) | $25,309 | $26,312 | $107,751 | $89,692 |
| (1) | 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. | |
| (m) | Represents amortization of non-cash deferred debt issuance costs. | |
| (n) | Represents pro forma income tax adjustment effect associated with items adjusted above. | |
| (o) | Represents the weighted average number of shares of Class A common stock outstanding (on an as-converted basis assuming conversion of outstanding Post-Merger REPAY Units) for the three months and years ended December 31, 2022 and 2021. These numbers do not include any shares issuable upon conversion of the Company’s convertible senior notes due 2026. See the reconciliation of basic weighted average shares outstanding to the non-GAAP Class A common stock outstanding on an as-converted basis for each respective period below: |
| Three Months Ended December 31, | Year Ended December 31, | |||
| 2022 | 2021 | 2022 | 2021 | |
| Weighted average shares of Class A common stock outstanding - basic | 88,519,236 | 88,431,186 | 88,792,453 | 83,318,189 |
| Add: Non-controlling interests | ||||
| Weighted average Post-Merger REPAY Units exchangeable for Class A common stock | 7,868,891 | 7,926,576 | 7,892,176 | 7,946,323 |
| Shares of Class A common stock outstanding (on an as-converted basis) | 96,388,127 | 96,357,762 | 96,684,629 | 91,264,512 |
| (p) | Excludes acquisition costs that are capitalized as channel relationships. | |
| (q) | Represents year‐on-year gross profit growth that excludes incremental gross profit attributable to acquisitions made in the applicable prior period or any subsequent period. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230301005985/en/
Investor Relations Contact for REPAY:
ir@repay.com
Media Relations Contact for REPAY:
Kristen Hoyman
(404) 637-1665
khoyman@repay.com
Source: Repay Holdings Corporation