Repay (RPAY)2024-11-13 02:46Financial Data and Key Metrics Changes - In Q3 2024, REPAY reported revenue of 48.8 million [6][23] Business Line Data and Key Metrics Changes - Consumer Payments segment gross profit grew by 2% in Q3 and 6% year-to-date [23] - Business Payments segment gross profit increased by 67% in Q3 and 33% year-to-date, driven by strength in core AP business and political media vertical [14][23] Market Data and Key Metrics Changes - The company added 13 new credit unions in Q3, bringing the total to 313 [9] - The Instant Funding product saw transaction volume increase by approximately 24% year-over-year [12] Company Strategy and Development Direction - The company is focused on three main strategic initiatives: go-to-market efficiency, client implementations, and product focus [7] - The company aims to leverage its 276 integrated software partners to enhance product offerings and sales pipelines [19] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer spending trends are normalizing, impacting growth in certain verticals [33] - The outlook for 2024 includes expected revenue between 320 million, with adjusted EBITDA growth anticipated to outpace revenue growth [28][30] Other Important Information - The company completed a convertible notes offering and extended its revolving credit facility, maintaining a strong balance sheet with $419 million in total liquidity [20][25] - The company is open to strategic M&A opportunities while focusing on organic growth [66] Q&A Session Summary Question: Organic growth in consumer payments and headwinds faced - Management noted that consumer spending normalization and a client loss impacted organic growth, with expectations for mid to high single-digit growth in Q4 [33][34] Question: Business Payments growth and corporate spending patterns - Management highlighted strong growth in Business Payments, particularly from political media contributions, while acknowledging some softness in corporate spending [35] Question: Progress on mortgage debit service offerings - Management confirmed that processing for mortgage debit acceptance began in Q3, with expectations for multi-year growth starting in 2025 [38][39] Question: Framework for FY 2025 growth - Management indicated that while it's early to provide specifics, they are confident in their revenue model and are planning for growth opportunities [47][49] Question: Organic gross profit growth deceleration - Management attributed the deceleration to client loss, consumer spending softness, and implementation delays, quantifying the impact on growth [59] Question: Instant Funding growth drivers - Management noted that Instant Funding is primarily used for personal loans and represents about 20% of revenue in consumer payments, with significant monetization opportunities [61][63] Question: Current M&A strategy and valuation - Management stated that they are seeing increased activity in the M&A market and are focused on attractive valuations for embedded software and payments [64][66]