RPAY — Repay Holdings Corporation

Summary of Repay Holdings Corporation Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Revenue: $80.8 million, up 4% year-over-year.
• Consumer Payments Revenue: Increased 4% year-over-year.
• Business Payments Revenue: Increased 18% year-over-year; normalized revenue (excluding political media) increased approximately 16%.
• Adjusted EBITDA: $34.4 million with a margin of approximately 43%.
• Adjusted Net Income: $19.4 million, or $0.22 per share.
• Free Cash Flow: $5.4 million, representing a 16% conversion rate.
• Total Debt: $288 million in convertible notes due in 2029 and a $110 million draw on the revolving credit facility.
• Net Leverage: Approximately 2.7x.

2. Strategic Updates and Business Highlights

• Acquisition of Kubra: A strategically significant acquisition aimed at creating a scaled bill payment provider. Expected to close in Q2 2026, it is anticipated to double revenue and enhance free cash flow.
• New Leadership: Matt Morrow appointed as executive leader of Consumer Payments, bringing extensive experience in payments and business services.
• Growth Initiatives: Continued investment in sales and customer support, automation of workflows, and deployment of AI capabilities to improve operational efficiency.
• Vendor Network: Expanded to over 665,000 vendors, a 70% year-over-year increase, enhancing digital monetization opportunities.

3. Forward Guidance and Outlook

• 2026 Revenue Guidance: Expected between $340 million and $346 million, translating to 10% to 12% growth (7% to 9% normalized growth excluding political media).
• Adjusted EBITDA Guidance: Expected between $141 million and $146 million, with a margin of approximately 42%.
• Free Cash Flow Conversion Target: Aiming for 45% for the full year.
• Political Media Cycle Impact: Anticipated revenue boost of $8 million to $10 million in Q3 and Q4 due to midterm elections.

4. Bad News, Challenges, or Points of Concern

• Impact of Enhanced Data Programs: Near-term gross profit margins affected by changes in card network data programs, particularly in Business Payments.
• Market Conditions: While current trends appear stable, there are inherent risks in consumer spending and macroeconomic conditions that could impact growth.
• Integration Risks: The upcoming Kubra acquisition poses integration challenges that could affect operational and client transition if not managed effectively.

5. Notable Q&A Insights

• Revenue Growth Expectations: Management expressed confidence in achieving a ramp in revenue growth in the latter half of 2026, driven by new client wins.
• Consumer Payments Dynamics: Stable consumer trends were noted, with recent strong performance attributed to tax refund season.
• Acquisition Rationale: The Kubra acquisition was highlighted for its potential to create a comprehensive digital platform and increase scale, with management emphasizing the importance of executing the integration effectively.
• Future Client Renewals: No significant client renewals were flagged as concerning, indicating stability in existing contracts.

Overall, Repay Holdings Corporation reported solid Q1 results and outlined a positive growth outlook, bolstered by strategic acquisitions and ongoing operational improvements, while acknowledging certain market risks and integration challenges ahead.