RPAY — Repay Holdings Corporation

Summary of Repay's Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Revenue: $78.6 million, a 10% increase year-over-year (normalized growth).
• Gross Profit: $58.3 million, reflecting a 9% increase (normalized).
• Adjusted EBITDA: $32.4 million, with a margin of approximately 41%.
• Free Cash Flow: $13.8 million, resulting in a 43% conversion rate.
• Net Income: Reported at $16.8 million, impacted by a noncash goodwill impairment charge of $138.9 million related to the Consumer Payments segment.

2. Strategic Updates and Business Highlights

• Consumer Payments Segment: Revenue grew by 8% and gross profit by 6% year-over-year. The segment benefited from increased software partnerships, reaching 189, and improved client integrations.
• Business Payments Segment: Experienced significant growth with a 41% increase in revenue and a 73% increase in gross profit year-over-year. The focus on the accounts payable (AP) platform led to a 65% increase in the supplier network, totaling 602,000 suppliers.
• Operational Improvements: Throughout 2025, Repay made key executive changes, streamlined processes, and invested in automation and AI to enhance operational efficiency and client service.
• Product Innovations: Launched new capabilities like dynamic Wallet and Repay Voice, aimed at improving client experience and operational efficiency.

3. Forward Guidance and Outlook

• 2026 Revenue Guidance: Expected between $340 million and $346 million, representing 10% to 12% reported growth and 7% to 9% normalized growth.
• Adjusted EBITDA: Projected between $136.5 million and $141.5 million, with margins around 40%.
• Free Cash Flow Conversion: Targeting above 45%, considering fluctuations in net working capital and interest expenses.
• Political Media Contributions: Anticipated to positively impact revenue by $8 million to $10 million in 2026.

4. Bad News, Challenges, or Points of Concern

• Goodwill Impairment: A significant noncash charge of $138.9 million raises concerns about the Consumer Payments segment's valuation.
• Implementation Delays: Some client implementations are pushed to later in 2026, which may affect early-year growth.
• Market Conditions: The company noted stable trends in auto and personal loans, indicating potential headwinds in consumer spending.
• Competitive Pressures: The evolving landscape of payment processing and technology integration may pose challenges in maintaining market share.

5. Notable Q&A Insights

• Market Trends: Management indicated consistent trends in auto and personal loans, with no significant changes expected in healthcare or mortgage markets.
• Tax Refund Impact: Observed a seasonal uplift in payment volume due to tax refunds, although the overall impact on gross tax refunds was not visible.
• M&A Pipeline: The company has a healthy pipeline for potential M&A opportunities across both consumer and business payments, focusing on partnerships that enhance vertical reach.
• Growth Expectations: The business payments segment is expected to achieve high teens growth, while the consumer segment's growth will depend on the successful rollout of existing initiatives.

Overall, Repay demonstrated solid financial performance in Q4 2025, with strategic initiatives aimed at enhancing growth and operational efficiency. However, challenges such as goodwill impairment and implementation delays may pose risks to achieving its 2026 outlook.