Financial Performance and Key Metrics Changes - Priority reported a 6% increase in net revenue, with adjusted gross profit and adjusted EBITDA growing by 10% and 6% respectively [5][9] - Adjusted EPS increased by $0.10, or 56% year-over-year, reaching $0.28 in Q3 [5] - The company ended Q3 with over 1.7 million customer accounts, up from 1.4 million in the previous quarter [6] - Annual transaction volume increased by nearly $4 billion to $144 billion, with average account balances improving by almost $200 million to $1.6 billion [6][10] - Adjusted gross profit margin improved to 39.2%, a 140 basis point increase from the prior year [10] Business Segment Performance Changes - Merchant Solutions revenue grew by 2% to $161.9 million, with core portfolio growth of 4% and contributions from Boom Commerce [19] - Payables segment revenue increased by 13.6% to $25.2 million, with buyer-funded revenues growing by 11.8% and supplier-funded revenues by 21.3% [20] - Treasury Solutions revenue rose by 18.2% to $55.7 million, driven by strong enrollment trends and increased billed clients [22] - Payables and Treasury Solutions accounted for nearly 63% of adjusted gross profit, reflecting a strategic shift towards higher-margin segments [18] Market Data and Key Metrics Changes - The company experienced stable merchant attrition, indicating macroeconomic factors affecting spending [6] - Revenue growth expectations for the full year were revised down to 8-10%, from a previous range of 10-12.5% [7] - The company raised the low end of its full-year gross profit guidance to $370 million, while adjusted EBITDA guidance was slightly improved to $223 million-$228 million [7][29] Company Strategy and Industry Competition - The company is focusing on expanding its commerce platform and enhancing its service offerings in higher-margin segments [12][13] - Recent acquisitions, including Boom Commerce and Dealer Merchant Services, are aimed at strengthening capabilities in automotive commerce and expanding distribution [14] - The reclassification of operating segments to Merchant Solutions, Payables, and Treasury Solutions reflects the evolving business mix and client base [8] Management's Comments on Operating Environment and Future Outlook - Management noted that Q3 was not among the best performing quarters, but emphasized internal growth and strategic investments [31] - The company is committed to maintaining cost discipline while investing in higher growth segments [13][32] - Preliminary expectations for 2026 include high single-digit revenue growth and adjusted gross margins expanding by 75 to 100 basis points [30][60] Other Important Information - The company generated $29 million in free cash flow for the quarter, totaling $71 million year-to-date [27] - Debt at the end of the quarter was $1 billion, with $157 million of available equity [25] - The company is focused on debt reduction while evaluating strategic acquisition opportunities [28] Q&A Session Summary Question: When did the company start seeing same-store sales weakness? - Management noted that signs of weakness began in August and accelerated in September, particularly in the restaurant, construction, and wholesale trade sectors [35][36] Question: What was the impact of lower revenue from specialized acquiring and historical residual purchases? - The impact was approximately $2 million on a year-over-year basis, down from $4.5 million in the first half of the year [38] Question: How much of the Merchant Solutions segment is still in specialized acquiring? - Specialized acquiring has grown quarter over quarter, but it remains a year-over-year headwind [54] Question: What drives the acceleration in gross profit guidance for Q4? - The acceleration is driven by higher organic growth in the Merchant Solutions segment and the full quarter impact of recent acquisitions [58]

November 2025 R: 0 G: 62 B: 41 R: 1 G: 39 B: 26 R: 254 G: 109 B: 18 R: 255 G: 255 B: 255 Priority Technology Holdings, Inc. (Nasdaq: PRTH) Supplemental Slides: Q3 2025 Earnings Call R: 231 G: 229 B: 170 R: 166 G: 166 B: 166 R: 117 G: 209 B: 208 R: 131 G: 201 B: 126 R: 37 G: 37 B: 37 Disclaimer Important Notice Regarding Forward-Looking Statements and Non-GAAP Measures This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such stat ...

Core Insights - Priority Technology (PRTH) reported quarterly earnings of $0.28 per share, missing the Zacks Consensus Estimate of $0.30 per share, but showing an increase from $0.07 per share a year ago, resulting in an earnings surprise of -6.67% [1] - The company posted revenues of $241.44 million for the quarter ended September 2025, which was 4.63% below the Zacks Consensus Estimate, and an increase from $227.05 million year-over-year [2] - Priority Technology shares have declined approximately 40.9% year-to-date, contrasting with the S&P 500's gain of 15.6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.30, with expected revenues of $261.13 million, and for the current fiscal year, the EPS estimate is $1.06 on revenues of $978.73 million [7] - The estimate revisions trend for Priority Technology was favorable prior to the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Technology Services industry, to which Priority Technology belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8]

Revenue Performance - For the three months ended September 30, 2025, consolidated revenue was $241.4 million, an increase of $14.4 million or 6.3% from $227.0 million for the same period in 2024[143]. - For the nine months ended September 30, 2025, consolidated revenue was $705.9 million, an increase of $53.2 million or 8.2% from $652.6 million for the same period in 2024[144]. - Merchant card fees revenue for the three months ended September 30, 2025 was $178.5 million, an increase of $6.7 million or 3.9% from $171.8 million for the same period in 2024[146]. - Money transmission services revenue for the three months ended September 30, 2025 was $41.0 million, an increase of $7.1 million or 21.0% from $33.9 million for the same period in 2024[148]. - Revenue from the Merchant Solutions segment was $161.9 million for the three months ended September 30, 2025, an increase of $3.1 million or 2.0% from $158.8 million in the same period of 2024[177]. - Revenue from the Payables segment was $25.2 million for the three months ended September 30, 2025, an increase of $3.0 million or 13.6% from $22.1 million in the same period of 2024[182]. - Revenue from the Treasury Solutions segment was $55.7 million for the three months ended September 30, 2025, an increase of $8.6 million from $47.1 million in the same period of 2024[187]. - For the nine months ended September 30, 2025, Treasury Solutions segment revenue reached $158.4 million, a 20.2% increase from $131.8 million in 2024[189]. Operating Expenses - Total operating expenses for the three months ended September 30, 2025 were $203.7 million, an increase of $14.7 million or 7.8% from $189.0 million for the same period in 2024[154]. - Salary and employee benefits expense for the three months ended September 30, 2025 was $26.1 million, an increase of $4.4 million or 20.2% from $21.7 million for the same period in 2024[157]. - Selling, general and administrative expenses for the three months ended September 30, 2025 were $15.7 million, an increase of $3.3 million or 26.7% from $12.4 million for the same period in 2024[161]. - Depreciation and amortization expense for the three months ended September 30, 2025 was $15.1 million, an increase of $1.4 million or 10.1% from $13.7 million for the same period in 2024[159]. EBITDA and Other Income - Adjusted EBITDA from the Merchant Solutions segment was $27.7 million for the three months ended September 30, 2025, a decrease of $0.9 million or 3.2% from $28.6 million in the same period of 2024[179]. - Adjusted EBITDA from the Payables segment was $3.5 million for the three months ended September 30, 2025, an increase of $1.5 million or 78.7% from $1.9 million in the same period of 2024[185]. - Adjusted EBITDA for the Treasury Solutions segment was $46.7 million for the three months ended September 30, 2025, reflecting a 14.0% increase from $40.9 million in 2024[191]. - For the nine months ended September 30, 2025, Adjusted EBITDA was $134.7 million, up 19.3% from $112.9 million in the same period of 2024[192]. - Other income, net for the three months ended September 30, 2025, was $4.6 million, an increase of $3.8 million or 540.5% from $0.7 million in the same period of 2024[169]. Cash Flow and Debt - Net cash provided by operating activities was $63.2 million for the nine months ended September 30, 2025, compared to $61.9 million in 2024[201]. - Net cash used in investing activities was $151.9 million for the nine months ended September 30, 2025, significantly higher than $24.7 million in 2024, primarily due to acquisitions[202]. - Net cash provided by financing activities was $288.6 million for the nine months ended September 30, 2025, compared to cash used of $84.7 million in 2024[203]. - Outstanding debt obligations increased to $1,023.9 million as of September 30, 2025, from $945.5 million at December 31, 2024[204]. Compliance and Risk Management - The Company must comply with restrictions on its Total Net Leverage Ratio if outstanding revolving loans exceed 35% of the total revolving facility, with a maximum permitted ratio of 6.90:1.00 until March 31, 2026, and 6.40:1.00 thereafter[207]. - As of September 30, 2025, the Company was in compliance with the covenants in the 2024 Credit Agreement[207]. - The Residual Finance Credit Facility requires a minimum liquidity of $2.0 million and a minimum tangible net worth of $5.0 million[209]. - The maximum default ratio allowed under the Residual Finance Credit Facility is 2.5%, and the maximum delinquency ratio is 5.0%[209]. - The Company was in compliance with the restrictions in the Residual Finance Credit Facility as of September 30, 2025[209]. - Market risk exposures have not changed materially since December 31, 2024[212]. Future Considerations - New accounting pronouncements may affect future financial statements, as discussed in the Quarterly Report[210]. - The increase in revenues was primarily driven by an increase in total card dollar value processed and new enrollments in the Merchant Solutions segment[143]. - The company experienced a decrease in issuing volume, which partially offset the overall revenue growth[144]. - Interest expense for the three months ended September 30, 2025, was $22.5 million, a decrease of $0.8 million or 3.4% from $23.2 million in the same period of 2024[165]. - Interest expense for the nine months ended September 30, 2025, was $68.7 million, an increase of $2.9 million or 4.3% from $65.8 million for the same period in 2024[166]. - Total other expense, net for the three months ended September 30, 2025, was $(30.4) million, an increase of $(7.8) million from $(22.6) million in the same period of 2024[164].

Revenue and Profitability - Revenue for Q3 2025 was $241.4 million, a 6.3% increase from $227.0 million in Q3 2024[3] - Adjusted gross profit for Q3 2025 was $94.8 million, up 10.2% from $86.0 million in Q3 2024, with an adjusted gross profit margin of 39.2%, an increase of nearly 140 basis points[3] - Adjusted EBITDA for Q3 2025 was $57.8 million, a 5.7% increase from $54.6 million in Q3 2024[3] - Adjusted EPS for Q3 2025 was $0.28, a 55.6% increase from $0.18 in Q3 2024[3] - Operating income for the nine months ended September 30, 2025, was $107,747,000, compared to $99,282,000 for the same period in 2024, reflecting an 8.4% increase[29] - Net income for the nine months ended September 30, 2025, was $46,735,000, significantly up from $16,795,000 in the same period of 2024, marking a 178.5% increase[29] - Basic earnings per share for Q3 2025 were $0.34, compared to $0.07 in Q3 2024, indicating a substantial increase of 385.7%[29] - Adjusted EBITDA for the consolidated entity for the nine months ended September 30, 2025, was $165,103,000, compared to $152,532,000 in 2024, reflecting an 8.2% increase[40] - Net income for the nine months ended September 30, 2025, was $46,735,000, compared to $16,795,000 in 2024, representing a significant increase of 178%[41] Revenue Segments - Treasury Solutions revenue grew by over 18%, while Payables revenue increased by 14%[2] - Merchant Solutions revenue for the three months ended September 30, 2025, was $161,874,000, up from $158,770,000 in 2024, reflecting a 1.4% growth[38] - Payables segment revenue for the three months ended September 30, 2025, was $25,162,000, an increase of 13.7% from $22,143,000 in 2024[38] - Treasury Solutions revenue for the three months ended September 30, 2025, was $55,684,000, compared to $47,099,000 in 2024, marking a 18.2% increase[38] Cash Flow and Assets - The company made a $15.0 million voluntary prepayment on its term loan on October 31, 2025, driven by strong cash flow performance[3] - Cash flows from operating activities for the nine months ended September 30, 2025, amounted to $63,161,000, compared to $61,852,000 in 2024, showing a slight increase of 2.1%[33] - Total cash and cash equivalents, and restricted cash at the end of the period on September 30, 2025, was $1,193,761,000, compared to $918,057,000 at the end of the same period in 2024, a 30% increase[35] - Net increase in cash and cash equivalents and restricted cash for the nine months ended September 30, 2025, was $199,897,000, compared to $121,834,000 for the same period in 2024, representing a 64% increase[35] Assets and Liabilities - Total assets as of September 30, 2025, were $2,217,132,000, up from $1,826,860,000 at the end of 2024, indicating a growth of 21.4%[31] - The total liabilities increased to $2,325,646,000 as of September 30, 2025, from $1,991,885,000 at the end of 2024, reflecting a rise of 16.8%[31] - The company reported a total of $1,187,417,000 in settlement assets as of September 30, 2025, compared to $940,798,000 at the end of 2024, representing a 26.2% increase[31] Acquisitions and Investments - The company acquired Boom Commerce in August 2025 and Dealer Merchant Services in October 2025 to enhance its service offerings[3] - The company has made significant investments in acquisitions, with net cash used in investing activities totaling $151,898,000 for the nine months ended September 30, 2025[33] Credit Facilities - A new $1.1 billion credit facility was closed on July 31, 2025, with a 100 basis point reduction in interest rates[3]

Core Viewpoint - Shares of Priority Technology (PRTH) have increased by 10.1% over the past four weeks, closing at $7.72, with a potential upside indicated by Wall Street analysts' price targets suggesting a mean estimate of $12.8, representing a 65.8% upside [1] Price Targets - The average price targets from analysts range from a low of $10.00 to a high of $16.00, with a standard deviation of $2.17, indicating variability in estimates [2] - The lowest estimate suggests a 29.5% increase from the current price, while the highest estimate indicates a 107.3% upside [2] Analyst Consensus and Earnings Estimates - Analysts show strong agreement in revising earnings estimates higher, which historically correlates with stock price movements, suggesting a potential upside for PRTH [4][11] - Over the last 30 days, one estimate has increased, leading to a 1.9% rise in the Zacks Consensus Estimate for the current year [12] Zacks Rank - PRTH holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating a strong potential for upside [13] Caution on Price Targets - While the consensus price target is a useful metric, relying solely on it for investment decisions may not be prudent due to historical inaccuracies in analysts' price targets [3][10]

Core Insights - Priority Technology Holdings, Inc. (NASDAQ:PRTH) has successfully completed the acquisition of certain assets from Dealer Merchant Services (DMS), a reseller focused on the auto and truck dealership sector [1][2][3] - The acquisition is expected to generate approximately $3 million in incremental revenue and over $1 million in incremental adjusted EBITDA in Q4 2025 [3] Company Overview - Priority Technology Holdings, Inc. is a financial technology company that provides payments and banking solutions through its connected commerce platform, which includes services for payables, merchant services, and banking & treasury solutions [3] - The leadership team from DMS, Amberly Allen and Laura Sherman, will join Priority Technology as part of the acquisition [3]

Core Viewpoint - Priority Technology (PRTH) shows potential for significant upside, with a mean price target of $12.6 indicating a 64.7% increase from its current price of $7.65 [1] Price Targets and Analyst Estimates - The mean estimate consists of five short-term price targets with a standard deviation of $2.3, suggesting variability in analyst predictions [2] - The lowest estimate of $10.00 indicates a 30.7% increase, while the highest estimate of $16.00 suggests a 109.2% increase [2] - A low standard deviation indicates strong agreement among analysts regarding the stock's price movement [9] Earnings Estimates and Analyst Agreement - Analysts show strong agreement in revising earnings estimates higher, which correlates with potential stock price increases [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 1.9%, with one estimate moving higher and no negative revisions [12] - PRTH holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - While price targets are often sought after, they can mislead investors, and reliance solely on them may lead to poor investment decisions [3][7][10] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [8]

Company Overview - Priority Technology (PRTH) shares increased by 5.2% to close at $7.65, supported by strong trading volume, contrasting with a 3.5% decline over the past four weeks [1] - The company is experiencing a favorable shift in its business mix, particularly benefiting from higher-margin enterprise and B2B businesses [1] Earnings Expectations - The upcoming quarterly earnings report is expected to show earnings of $0.30 per share, reflecting a year-over-year increase of 328.6% [2] - Revenue is projected to reach $253.16 million, marking an 11.5% increase compared to the same quarter last year [2] Earnings Estimate Revisions - The consensus EPS estimate for Priority Technology has been revised 7.1% higher in the last 30 days, indicating a positive trend that typically correlates with stock price appreciation [3] - Monitoring the stock is advised to see if the recent price increase can lead to sustained strength [3] Zacks Rank and Industry Position - Priority Technology holds a Zacks Rank of 1 (Strong Buy), indicating strong market confidence [4] - The company is part of the Zacks Technology Services industry, which includes Owlet, Inc. (OWLT), another stock in the same sector that has seen a 28.3% return in the past month [4]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential [1] - Identifying the right entry point for fast-moving stocks is challenging, and investors may end up with expensive shares that have limited upside [1] Group 2: Bargain Stocks with Momentum - Investing in bargain stocks that have recently shown price momentum may be a safer strategy [2] - The Zacks Momentum Style Score helps identify strong momentum stocks, while the 'Fast-Paced Momentum at a Bargain' screen highlights attractively priced fast-moving stocks [2] Group 3: Priority Technology (PRTH) Analysis - PRTH has shown a price increase of 0.3% over the past four weeks, indicating growing investor interest [3] - The stock gained 3.8% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [4] - PRTH has a beta of 1.86, suggesting it moves 86% more than the market in either direction [4] Group 4: Performance Metrics - PRTH has a Momentum Score of B, indicating a favorable time to invest [5] - The stock has a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which attract more investors [6] - PRTH is trading at a Price-to-Sales ratio of 0.67, meaning investors pay 67 cents for each dollar of sales, indicating a reasonable valuation [6] Group 5: Additional Investment Opportunities - Besides PRTH, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen [7] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to find potential winning stocks [8]