Repay (RPAY) - 2024 Q1 - Earnings Call Transcript

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]