Financial Performance - Q2 2024 revenue was $74.9 million, a 4% year-over-year increase from $71.8 million in Q2 2023[2] - Gross profit for Q2 2024 was $58.6 million, reflecting a 7% growth compared to $54.9 million in Q2 2023[2] - Adjusted EBITDA for Q2 2024 reached $33.7 million, a 10% increase from $30.5 million in Q2 2023[2] - Free Cash Flow for Q2 2024 was $19.3 million, representing a 93% increase compared to $10.0 million in Q2 2023[2] - Revenue for the three months ended June 30, 2024, was $74,906 thousand, an increase from $71,783 thousand for the same period in 2023, representing a growth of 2.9%[18] - Adjusted Net Income per share for the three months ended June 30, 2024, was not explicitly stated, but the net loss attributable to the Company was $4,071 thousand, compared to a loss of $4,643 thousand in the same period of 2023[18] - Revenue for the six months ended June 30, 2024, was $155,626 thousand, an increase of 6.5% compared to $146,320 thousand in 2023[25] - Adjusted EBITDA for the six months ended June 30, 2024, was $69,241 thousand, up from $61,463 thousand in 2023, reflecting a growth of 12.9%[25] - Net loss for the six months ended June 30, 2024, was $9,602 thousand, a significant improvement from a net loss of $33,262 thousand in 2023[25] - The Company reported a net loss of $4,237 thousand for the three months ended June 30, 2024, compared to a net loss of $5,330 thousand for the same period in 2023, indicating an improvement of 20.5%[18] Operating Expenses - Total operating expenses for the three months ended June 30, 2024, were $78,327 thousand, down from $81,649 thousand in the same period of 2023, reflecting a decrease of 2.8%[18] - Total operating expenses for the six months ended June 30, 2024, were $161,551 thousand, down from $174,150 thousand in 2023, indicating a reduction of 7.2%[25] - Total operating expenses for the three months ended June 30, 2024, decreased to $78,327 thousand from $81,649 thousand in 2023, a reduction of 4.5%[26] Cash Flow and Assets - Cash flows from operating activities for the six months ended June 30, 2024, provided $55,780 thousand, compared to $40,784 thousand in 2023, marking a 36.8% increase[22] - Cash, cash equivalents, and restricted cash at the end of the period were $174,036 thousand, an increase from $127,921 thousand at the end of the same period in 2023[22] - Cash and cash equivalents increased to $147,092 thousand as of June 30, 2024, compared to $118,096 thousand at the end of 2023, indicating a growth of 24.6%[19] - Free Cash Flow Conversion was not provided, but Free Cash Flow represents net cash flow from operating activities less total capital expenditures[18] Market and Growth - Consumer Payments gross profit grew approximately 7% year-over-year, while Business Payments gross profit increased by approximately 11%[3] - The company expanded its AP supplier network to over 300,000, marking a 55% year-over-year increase[3] - REPAY added seven new integrated software partners, bringing the total to 273 as of the end of Q2 2024[3] - The company anticipates continued demand for its electronic payment solutions and plans to expand its market presence, although specific financial guidance for 2024 was not detailed[15] - The company reaffirms its 2024 outlook with projected revenue between $314 million and $320 million[11] - Gross profit for the full year 2024 is expected to be between $245 million and $250 million[11] - REPAY's Free Cash Flow Conversion is anticipated to be approximately 60% for the full year 2024[11] Shareholder Information - Shares of Class A common stock outstanding as of June 30, 2024, were 97,665,464, an increase from 96,796,143 in 2023[26] - The weighted average shares of Class A common stock outstanding increased to 91,821,369 for the three months ended June 30, 2024, compared to 89,170,814 for the same period in 2023, reflecting a growth of approximately 2%[34] - The total shares of Class A common stock outstanding on an as-converted basis reached 97,665,464 for the three months ended June 30, 2024, up from 96,796,143 in the prior year, indicating a year-on-year increase of about 0.9%[34] - The weighted average Post-Merger Repay Units exchangeable for Class A common stock decreased to 5,844,095 for the three months ended June 30, 2024, down from 7,625,329 in the same period of 2023, representing a decline of approximately 23.4%[34] Other Financial Metrics - Loss from operations for the three months ended June 30, 2024, was $3,421 thousand, an improvement from a loss of $9,866 thousand in 2023[23] - Interest income for the three months ended June 30, 2024, was $554 thousand, compared to an expense of $(388) thousand in 2023[26] - Change in fair value of tax receivable liability for the six months ended June 30, 2024, resulted in a loss of $6,279 thousand, compared to a loss of $482 thousand in 2023[25] - Payments for tax withholding related to shares vesting under the Incentive Plan amounted to $2,489 thousand for the six months ended June 30, 2024, compared to $1,376 thousand in 2023[22] - Organic gross profit growth for the six months ended June 30, 2024, was 9%, compared to a 1% decline from acquisitions and dispositions[30] - Capital expenditures for the three months ended June 30, 2024, totaled $(11,691) thousand, compared to $(9,985) thousand in 2023[28]

Financial Data and Key Metrics Changes - In Q1 2024, the company reported revenue of $80.7 million, representing a 10% organic growth year-over-year [36] - Adjusted EBITDA for Q1 was $35.5 million, growing 15% year-over-year with margins of 44% [16] - Free cash flow for Q1 was $13.7 million, reflecting over 90% year-over-year growth [47] Business Line Data and Key Metrics Changes - The Consumer Payments segment achieved organic gross profit growth of 11% in Q1 [6][37] - The Business Payments segment saw gross profit growth of 17% year-over-year [10][37] - The company added three partners in the Consumer Payments segment during the quarter [9] Market Data and Key Metrics Changes - The company added 15 new credit union clients in Q1, bringing the total to 291 [28] - The instant funding product experienced a 33% year-over-year increase in transactional volume [30] - The supplier network in Accounts Payable grew to over 279,000 suppliers [31] Company Strategy and Development Direction - The company is focused on three main strategic initiatives: go-to-market efficiency, client implementations, and product focus [5] - There is an emphasis on enhancing software partnerships and developing a healthy sales pipeline [8] - The company aims to reduce overall CapEx spending to accelerate free cash flow conversion throughout 2024 [40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in multiyear growth opportunities driven by software integrations and partnerships [19] - The planning assumptions for 2024 remain consistent, with expectations for revenue between $314 million and $320 million [18] - The company anticipates free cash flow conversion to progress towards a target of approximately 60% for the full year [20] Other Important Information - The company exited Q1 with a strong balance sheet, having approximately $128 million in cash [38] - The company is open to accretive strategic M&A while focusing on organic growth opportunities [35] Q&A Session Summary Question: What drove the adjusted EBITDA margin beat? - Management noted stable SG&A costs and effective cost management led to expanding adjusted EBITDA margins [22] Question: Any updates on exploring strategic alternatives? - Management emphasized their commitment to organic growth and shareholder value, indicating no immediate plans for private equity sponsorship [43] Question: How do you view the growth rates for consumer versus business payments? - Management indicated that consumer payments are expected to grow in the high single-digit to low double-digit range, while business payments are projected to grow in the mid- to high-teens [45] Question: Was the contribution from tax season this year outsized compared to previous years? - Management stated that the contribution was in line with expectations and similar to prior years [98] Question: Any updates on the macroeconomic environment? - Management reported stable trends and no significant changes in the macro environment affecting their outlook [87]

Financial Performance - Revenue for Q1 2024 was $80,720,000, representing a 8.3% increase from $74,537,000 in Q1 2023[13] - Net loss for Q1 2024 was $5,365,000, a significant improvement compared to a net loss of $27,932,000 in Q1 2023[13] - Total revenue for the three months ended March 31, 2024, was $80.72 million, an increase from $74.54 million in the same period of 2023, representing an 8.8% year-over-year growth[33][35] - The net loss attributable to the Company for Q1 2024 was $5.21 million, a decrease from a net loss of $26.39 million in Q1 2023[37] - Total gross profit for Q1 2024 was $61.5 million, compared to $56.6 million in Q1 2023, marking an increase of 8.7%[110] - Adjusted Net Income for the period was $22.38 million, up from $19.19 million in the same period last year, representing a 11.4% increase[136] - Adjusted Net Income per share increased to $0.23, compared to $0.20 in the prior year[136] Segment Performance - Consumer Payments segment revenue for Q1 2024 was $76.14 million, up from $69.94 million in Q1 2023, indicating a growth of 8.8%[33][35] - Business Payments segment revenue for Q1 2024 was $9.68 million, compared to $8.68 million in Q1 2023, reflecting an increase of 11.5%[33][35] - The Consumer Payments segment accounted for approximately 88% of the Company's total revenue for the three months ended March 31, 2024[91] - The Business Payments segment represented approximately 12% of the Company's total revenue for the same period[92] Cash Flow and Liquidity - Cash flows from operating activities provided $24,801,000 in Q1 2024, an increase from $20,831,000 in Q1 2023[19] - Cash and cash equivalents rose to $128,318,000 from $118,096,000, marking an increase of 8.5%[10] - Cash and cash equivalents as of March 31, 2024, totaled $128.3 million, with an available borrowing capacity of $185.0 million under the Amended Credit Agreement[143] - The Company expects cash flow from operations and available borrowing capacity to be sufficient to fund operations and capital expenditures for the next twelve months[143] Expenses and Cost Management - Operating expenses for Q1 2024 totaled $83,224,000, down from $92,501,000 in Q1 2023, a decrease of 10.0%[13] - Selling, general and administrative expenses decreased to $37.0 million in Q1 2024 from $38.5 million in Q1 2023, a reduction of 3.9%[113] - Costs of services rose to $19.2 million in Q1 2024, up from $18.0 million in Q1 2023, an increase of 6.7%[112] - Depreciation and amortization expenses increased to $27.0 million in Q1 2024 from $26.1 million in Q1 2023, a rise of 3.4%[114] Assets and Liabilities - Total current assets increased to $184,029,000 as of March 31, 2024, up from $169,322,000 at the end of 2023, reflecting a 8.7% growth[10] - Total liabilities decreased slightly to $687,422,000 from $689,045,000, indicating a reduction of 0.2%[11] - Total equity as of March 31, 2024, was $829,298,000, slightly down from $830,788,000 at the end of 2023[11] - The estimated fair value of borrowings as of March 31, 2024, was $407.55 million, compared to $375.65 million as of December 31, 2023[49] Shareholder Activities - The Company has $37.5 million remaining under its Share Repurchase Program as of March 31, 2024[145] - During the three months ended March 31, 2024, the company purchased a total of 245,376 shares of Class A common stock at an average price of $9.82 per share[172] - The Share Repurchase Program has no expiration date and may be modified, suspended, or discontinued at the company's discretion[172] Tax and Accounting - The effective tax rate for the three months ended March 31, 2024, was (6%), with an income tax expense of $0.3 million recorded[81] - The Company had deferred tax assets, net of $146.6 million as of March 31, 2024, primarily related to the basis difference in its investment in Hawk Parent[83] - The Company is evaluating the effects of recently issued accounting standards updates on its consolidated financial statements, including ASU 2023-07 and ASU 2023-09[30][31] Other Notable Items - The Company recognized a loss of $9.9 million associated with the sale of Blue Cow Software, LLC in February 2023, which contributed $1.2 million to revenue in Q1 2023[38][39] - The Company incurred transaction expenses of $3.4 million related to the disposition of Blue Cow Software in Q1 2023, included in selling, general, and administrative expenses[40] - The Company recognized total lease costs of $434,000 for the three months ended March 31, 2024, down from $664,000 in the same period of 2023[68] - The Company recognized a total fair value of $7.4 million for vested PSUs, RSAs, and RSUs during the three months ended March 31, 2024[75]

"REPAY's Q1 results represent a strong start to the year, with organic gross profit growth 1 of 11%, demonstrating continued success in enhancing our client's embedded payment flows," said John Morris, CEO of REPAY. "As we continue to strengthen our technical and go-to-market relationships with our software partners, we are excited about the multi-year growth opportunities across our Consumer and Business Payment's verticals." First Quarter 2024 Business Highlights REPAY Reports First Quarter 2024 Financial ...

Financial Data and Key Metrics Changes - In Q4, the company reported normalized organic revenue growth of 14% and gross profit growth of 13%, both metrics exceeding expectations [50][71] - Adjusted net income for Q4 was $26.3 million, or $0.27 per share, with pro forma net leverage at approximately 2.6 times [72] - The company expects revenue for 2024 to be between $314 million and $320 million, with a free cash flow conversion target of approximately 60% [73][80] Business Line Data and Key Metrics Changes - The consumer payments segment saw organic gross profit growth of 13% in Q4, driven by ongoing demand and new client implementations [51][71] - The business payment segment experienced a gross profit increase of 25%, excluding political media impacts from 2022 [55][71] - Value-added services, particularly instant funding, grew significantly with transactions up approximately 45% year-over-year [54][71] Market Data and Key Metrics Changes - The supplier network increased by 60% year-over-year to over 261,000 suppliers, enhancing the monetization of digital payment flows [60][56] - The company added 10 new credit union clients, bringing the total to 276, indicating strong market penetration [53] Company Strategy and Development Direction - The company aims to enhance its embedded payment solutions within software partners and expand its sales pipeline through new partnerships [49][67] - Strategic initiatives for 2024 include improving go-to-market efficiency, client implementations, and evolving the tech platform [66][68] - The company is focused on organic growth while remaining open to strategic M&A opportunities [69] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential driven by existing clients adopting more payment capabilities and new client acquisitions [50][74] - The outlook for 2024 includes expectations for mid to high teens growth in the underlying business payments segment, excluding political media contributions [89] Other Important Information - The company has a total outstanding debt of $440 million, with a 0% coupon convertible note maturing in February 2026 [79] - The company utilized its share repurchase program to buy back shares in a disciplined manner, with $37.5 million remaining under the current authorization [79] Q&A Session Summary Question: What are the biggest levers for improving free cash flow conversion this year? - The biggest drivers include adjusted EBITDA growing faster than gross profits and reducing CapEx to around 13% to 14% of revenue [85][86] Question: Can you comment on expectations for revenue growth related to political media spend? - The company expects strong growth in political media contributions, estimating a 20% increase from the previous cycle [89] Question: How is the existing client growth bucket defined? - Existing client growth is driven by increased penetration of existing clients and includes clients signed in prior periods that are ramping [93][94]

$57.8 $58.7 Q4 2022 Q4 2023 80% 77% % Margin (5) 13% y/y organic growth, excl. political media (1) Revenue Gross Profit Adjusted EBITDA (2) $35.9 $33.5 Q4 2022 Q4 2023 (3) Growth by Segment – Q4 2023 ($MM) Business Payments 25% 1) Organic growth, excluding political media is a non-GAAP financial measure. See slide 1 under "Non-GAAP Financial Measures" and slide 32 for reconciliation 2) Includes the impact from Intercompany eliminations REPAY's Unique Model Translates Into a Highly Attractive Financial Profi ...

Financial Performance - The company processed approximately $25.7 billion in total card payment volume in 2023, with top 10 clients contributing about 18% of total gross profit[25]. - The Consumer Payments segment represented approximately 87% of total revenue for the year ended December 31, 2023, while the Business Payments segment accounted for approximately 13%[29][30]. - The chargeback rate for the year ended December 31, 2023, was under 1% of the payment volume[47]. - Revenue is sensitive to shifts in payment methods, with higher fees associated with card-based payments compared to ACH payments[122]. - The company faces potential liability for chargebacks associated with fraudulent transactions, which could adversely affect financial performance[134]. Business Strategy and Growth - The company aims to increase penetration in existing verticals by providing innovative payment solutions and support to both existing and new clients[31]. - The company plans to expand into new verticals where it currently has limited operations, leveraging its comprehensive core technology platform[32]. - A significant part of the company's growth strategy involves acquisitions of vertically-focused integrated payment and software solutions providers[158]. - The company has successfully acquired eleven businesses from January 1, 2016, through December 31, 2023, while focusing primarily on organic growth[35]. - The company has completed eleven acquisitions from January 1, 2016, to December 31, 2023, to access new markets and expand its product offerings[59]. Technology and Innovation - The company intends to strengthen its solution portfolio through continued innovation and investment in technology capabilities, including its proprietary RCS platform[33]. - The company emphasizes operational efficiencies to process larger payment volumes without significant increases in personnel and operating expenses[34]. - The company has developed a proprietary Compliance Management System to enhance risk management and ensure adherence to regulations[42]. - The electronic payments market is rapidly evolving, and failure to keep pace with technological changes could result in reduced revenue[115]. - The company relies on a combination of intellectual property laws to protect its proprietary technology, which is critical for success in strategic verticals[153]. Compliance and Regulatory Environment - The Dodd-Frank Act has resulted in significant changes to the regulation of the financial services industry, impacting debit interchange transaction fees and merchant routing restrictions[72]. - The company is subject to extensive governmental regulations regarding consumer information, which could impact its ability to provide products and services effectively[181]. - Compliance with payment network rules is critical; failure to do so could result in fines or suspension of processing capabilities[123]. - The regulatory environment for the electronic payments industry is evolving, and compliance with new laws and regulations could increase operational costs and affect competitiveness[166]. - The company has developed compliance programs to address legal and regulatory requirements related to anti-money laundering and counter-terrorism[78]. Competition and Market Position - The company competes with various payment processing companies, including traditional merchant acquirers and technology firms, focusing on economics, product offerings, service, and reliability[55]. - The payment processing industry is highly competitive, impacting the fees received and overall margins[105]. - The company faces significant competition from larger firms with greater financial and technological resources, which may limit pricing power and profit margins[106]. - The company depends on software integration partners for client acquisition, and these partners may also work with competitors[130]. Employee and Organizational Culture - As of December 31, 2023, the company employed approximately 512 full-time employees across the U.S.[92]. - In 2023, 83% of employees indicated that the company is a great place to work, contributing to its certification as a Great Place to Work® for seven consecutive years[94][95]. - The company emphasizes employee development and retention, with initiatives for career progression and performance-based recognition[96][97]. - The company offers a comprehensive benefits package, including 100% coverage of employee healthcare premiums and a generous 401(k) employer match[100]. Financial Obligations and Risks - The company's ability to service its debt obligations depends on future performance, which is subject to various external factors[187]. - The company may incur future debt obligations that could impose additional restrictive covenants, affecting its financial and operational flexibility[189]. - The conditional conversion feature of the 2026 Notes could adversely affect the company's liquidity if triggered[193]. - The company is dependent on distributions from its subsidiaries to meet financial obligations, which could be limited by various factors[195]. - Economic conditions, including inflation and recession concerns, create challenges in accurately forecasting future business activities[149]. Cybersecurity and Risk Management - The company emphasizes robust cybersecurity programs to mitigate risks and safeguard sensitive data, guided by regulatory requirements[220]. - Cybersecurity breaches could lead to significant financial losses and damage to the company's reputation, increasing operational costs[110]. - The company has a dedicated team for continuous monitoring and security incident response, ensuring compliance with industry security standards[48]. - The company has established systems to detect and reduce business fraud, but effectiveness may vary, and incidents of fraud could increase[136]. Corporate Governance and Shareholder Matters - The board of directors will determine the use of excess cash accumulated from distributions, which may include acquiring additional units or funding stock repurchases[198]. - The board of directors has the authority to issue preferred stock without stockholder approval, which could dilute ownership for hostile acquirers[216]. - Delaware law and the company's governing documents contain provisions that could delay or discourage takeover attempts, potentially affecting the trading price of Class A common stock[214]. - Stockholder actions require a meeting, which may delay proposals or director removals[216].

Financial Performance - Gross profit growth of 2% in Q4 2023 and 6% for the full year 2023[1] - Normalized organic gross profit growth of 13% in Q4 2023 and for the full year 2023[1] - Total revenue increased by 5% year-over-year to $76.0 million in Q4 2023[2] - Revenue for the year ended December 31, 2023, was $296.627 million, an increase of 6.1% from $279.227 million in 2022[25] - Revenue for Q4 2023 was $75,987,000, an increase of 5% compared to $72,673,000 in Q4 2022[30] - For the full year 2023, revenue increased to $296,627,000 from $279,227,000 in 2022, representing a growth of 6.1%[31] - Organic revenue growth for Q4 2023 was 10%, after adjusting for growth from acquisitions and dispositions[36] - Normalized organic revenue growth for Q4 2023 was 14%, indicating strong underlying performance[36] Profitability and Loss - Net loss for Q4 2023 was $77.7 million, impacted by a $75.7 million goodwill impairment loss[3] - Net loss attributable to the Company for the year ended December 31, 2023, was $110.490 million, compared to a net income of $12.836 million in 2022[25] - The company reported a net loss of $117,420,000 for the year ended December 31, 2023, compared to a net income of $8,741,000 in 2022[33] - The Company experienced a loss from operations of $111.413 million for the year ended December 31, 2023, compared to a loss of $47.201 million in 2022[25] - Adjusted EBITDA for Q4 2023 was $33,489,000, compared to $35,882,000 in Q4 2022, reflecting a decrease of 6.7%[30] - Free cash flow for Q4 2023 was $21,787,000, an increase from $13,895,000 in Q4 2022, with a free cash flow conversion rate of 65%[35] - Adjusted Net Income for the year 2023 was $84,942,000, compared to $79,786,000 in 2022, reflecting a year-over-year increase of 6.8%[33] Expenses and Liabilities - Total operating expenses for the year ended December 31, 2023, were $408.040 million, up from $326.428 million in 2022, reflecting a 24.9% increase[25] - Total operating expenses for Q4 2023 were $154,401,000, up from $90,967,000 in Q4 2022, resulting in a loss from operations of $78,414,000[30] - The Company’s total liabilities decreased slightly to $689.045 million as of December 31, 2023, from $698.507 million in 2022[27] Cash Flow and Assets - Cash and cash equivalents as of December 31, 2023, were $118.096 million, compared to $64.895 million as of December 31, 2022, representing an increase of 82.0%[27] - The Company reported a net cash provided by operating activities of $103.614 million for the year ended December 31, 2023, compared to $74.223 million in 2022, an increase of 39.7%[29] - Total assets decreased to $1.519 billion as of December 31, 2023, from $1.627 billion in 2022, a decline of 6.6%[27] Segment Performance - Consumer Payments segment achieved organic gross profit growth of approximately 13% year-over-year[6] - Business Payments segment experienced normalized organic gross profit growth of approximately 25% year-over-year[6] - The company experienced a non-cash goodwill impairment loss in the Business Payments segment for Q4 2023[38] Future Outlook - The company expects 2024 revenue to be between $314 million and $320 million[15] - Free Cash Flow Conversion is expected to improve to approximately 60% in 2024[15] - The company plans to continue focusing on operational improvements and restructuring activities related to acquired businesses[38] Shareholder Information - The weighted-average shares of Class A common stock outstanding were 90,048,638 for the year ended December 31, 2023, compared to 88,792,453 in 2022[25] - Weighted average shares of Class A common stock outstanding increased to 91,206,870 for Q4 2023, compared to 88,519,236 in Q4 2022[40]

Financial Data and Key Metrics Changes - In Q3 2023, the company reported revenue of $74.3 million, representing a take rate of approximately 116 basis points, with card payment volume reaching $6.4 billion [5][82] - Normalized organic gross profit grew by 12% year-over-year, amounting to $56.7 million, after excluding contributions from Blue Cow and political media [6][82] - Adjusted net income for Q3 was $19.9 million, or $0.21 per share [7] - The company had approximately $118 million in cash and $185 million in undrawn revolver capacity, totaling $303 million in liquidity, with total outstanding debt of $440 million [8][84] Business Line Data and Key Metrics Changes - The Business Payments segment saw a gross profit increase of 13%, driven by strong sales momentum in healthcare, property management, auto, and municipality verticals [1][82] - The Consumer Payments segment reported a 14% organic gross profit growth, supported by ongoing secular tailwinds and large client implementations [69][82] - The company added 9 new credit unions, bringing the total to 266, with the credit union market representing over $185 billion in annual total payment volume [71] Market Data and Key Metrics Changes - The company is now integrated with 257 software partners, with 96 in the Business Payments segment and 161 in the Consumer Payments segment [66][2] - The Instant Funding product experienced a significant growth in transaction volume, up approximately 50% year-over-year [76] Company Strategy and Development Direction - The company is focused on enhancing its technology and payment solutions, aiming to streamline the payment experience for clients and their customers [65][68] - There is a strong emphasis on partnerships with software providers to expand service offerings and improve client integration [4][66] - The company is exploring M&A opportunities while maintaining a strong balance sheet and cash generation for organic growth [4] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum heading into Q4, expecting adjusted free cash flow conversion to accelerate into 2024 [10] - The company anticipates a potential slowdown in the macroeconomic environment, particularly in the auto market, which may impact future performance [93] - Management noted that the competitive landscape remains stable, with expectations for growth in the political media segment due to the upcoming presidential cycle [113] Other Important Information - The company has implemented various automation processes to enhance productivity across its operations, particularly in charge-backs, compliance, and risk monitoring [68] - The company reaffirmed its gross profit outlook for 2023, expecting normalized organic gross profit growth of 9% to 14% [85] Q&A Session Summary Question: Insights on free cash flow conversion - Management indicated that capital expenditures (CapEx) are expected to decrease to 12% to 14% of revenue next year, which will enhance free cash flow conversion [13] Question: Performance in the consumer business - Management reported strong year-to-date performance with normalized 13% organic growth, driven by enterprise wins and digital transformation trends [15] Question: Fourth quarter normalized organic gross profit outlook - Management acknowledged the challenges of lapping strong results from the previous year but remains optimistic about trends observed in October [93] Question: Trends in payment cost acceptance from enterprise suppliers - Management noted no significant pushback on virtual card acceptance and highlighted the growth of their supplier network to over 233,000 [102] Question: Take rate expectations moving forward - Management suggested that while take rates may decrease slightly with more enterprise wins, gross profit dollars are expected to increase, leading to faster growth [24] Question: Competitive landscape in the domestic healthcare space - Management reported positive momentum in healthcare wins and noted that implementation delays were specific to client size and technical capabilities [34] Question: Impact of the upcoming political cycle on growth - Management expects a 25% growth in gross profit for the political media segment due to the larger presidential cycle compared to the previous non-presidential cycle [113]

Financial Performance - Total revenue for Q3 2023 was $74,320,000, representing a 3.5% increase from $71,555,000 in Q3 2022[10] - Net loss attributable to the Company for Q3 2023 was $6,168,000, compared to a net income of $5,845,000 in Q3 2022[10] - For the nine months ended September 30, 2023, the net loss was $39.746 million compared to a net income of $16.906 million for the same period in 2022[19] - Total revenue for the three months ended September 30, 2023, was $74.3 million, an increase from $71.6 million in the same period of 2022[102] - Total revenue for the nine months ended September 30, 2023, was $220.6 million, a 6.4% increase from $206.6 million in 2022[161] - The Company reported a net loss of $39.746 million for the nine months ended September 30, 2023, compared to a net income of $16.906 million in the same period of 2022[157] Expenses and Costs - Operating expenses for Q3 2023 totaled $79,439,000, up from $76,988,000 in Q3 2022, reflecting a 3.0% increase[10] - Total operating expenses for the nine months ended September 30, 2023 were $253.589 million, an increase from $235.461 million in the prior year[157] - Costs of services for Q3 2023 were $17.6 million, up 6.0% from $16.6 million in Q3 2022, attributed to new client growth[122] - Selling, general and administrative expenses decreased by 2.1% to $35.3 million in Q3 2023 from $36.0 million in Q3 2022[123] - The company incurred depreciation and amortization expenses of $79.146 million for the nine months ended September 30, 2023, down from $82.442 million in 2022[19] Cash and Liquidity - Cash and cash equivalents increased to $117,730,000 as of September 30, 2023, from $64,895,000 at the end of 2022, marking an 81.5% increase[8] - Cash flows from operating activities provided $68.751 million, an increase from $52.392 million in the prior year[19] - Total cash, cash equivalents, and restricted cash at the end of the period was $141.390 million, up from $86.726 million at the end of September 2022[19] - The company had $117.7 million in cash and cash equivalents as of September 30, 2023, with an available borrowing capacity of $185.0 million under the Amended Credit Agreement[173] Debt and Liabilities - Total liabilities decreased to $680,421,000 as of September 30, 2023, from $698,507,000 at the end of 2022, a reduction of 2.6%[8] - The Company’s long-term debt stood at $433,454,000 as of September 30, 2023, slightly down from $451,319,000 at the end of 2022, a decrease of 4.0%[8] - The Company had $0 drawn against the revolving credit facility as of September 30, 2023, with an undrawn capacity of $185 million[67] - The carrying value of the 2026 Notes was $433.5 million as of September 30, 2023, compared to $451.3 million at the end of 2022[54] Equity and Stock Performance - Total stockholders' equity as of September 30, 2023, was $902,346,000, down from $928,293,000 at the end of 2022, a decrease of 2.8%[8] - The Company recognized a loss of $10 million associated with the sale of Blue Cow Software, LLC, which had cash proceeds of $41.9 million[22] - The Company has a share repurchase program approved for up to $50 million of its outstanding Class A common stock[175] Segment Performance - The Consumer Payments segment accounted for approximately 87% of total revenue for both the three and nine months ended September 30, 2023, generating $68.7 million and $204.6 million respectively[99][102] - Business Payments segment revenue decreased by 15.2% to $9.7 million in Q3 2023 from $11.4 million in Q3 2022, impacted by declines in media payments[140] - Revenue for the Consumer Payments segment increased by 9.1% to $68.7 million in Q3 2023 from $63.0 million in Q3 2022[138] Tax and Regulatory Matters - The effective tax rate for the three months ended September 30, 2023, was 24%, compared to an effective tax rate of (9.7%) for the same period in 2022[87] - The Company recognized an income tax benefit of $2.0 million for the three months ended September 30, 2023[87] - The company has concluded that all deferred tax assets associated with the ceiling rule limitation are not likely to be realized, resulting in a 100% valuation allowance[92] Future Outlook - The Company plans to continue focusing on market expansion and new product development to drive future growth[10] - The company anticipates that cash flow from operations and available borrowing capacity will be sufficient to fund operations and capital expenditures for the next twelve months[173] - The company continues to monitor macroeconomic conditions, including inflation and rising interest rates, which may impact payment volumes and overall financial performance[111]