Repay (RPAY)2024-03-01 02:22Financial 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 0.27 per share, with pro forma net leverage at approximately 2.6 times [72] - The company expects revenue for 2024 to be between 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 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]