Summary of Repay's Q3 2025 Earnings Call

1Key Financial Results and Metrics

Revenue: $77.7 million

Gross Profit: $57.8 million, with a normalized year-over-year growth of 51% (excluding political media contributions).

Adjusted EBITDA: $31.2 million, representing a margin of approximately 40%.

Free Cash Flow: $20.8 million, translating to a conversion rate of 67%.

Net Income: $18.2 million or $0.21 per share.

Cash Position: Approximately $96 million in cash and $250 million in undrawn revolver capacity, totaling $346 million in liquidity.

Debt: Total outstanding debt of $434 million, with a net leverage ratio of approximately 2.5 times.

2Strategic Updates and Business Highlights

Growth Strategy: Focus on optimizing digital payment flows and enhancing client experiences through technology integration.

Consumer Payments: Gross profit increased 1% year-over-year, with a notable partnership with Alpha Systems in auto and equipment financing.

Business Payments: Normalized gross profit rose 12% year-over-year, driven by accounts payable initiatives and a growing supplier network of over 540,000.

Product Development: Launched the Dynamic Wallet for seamless loan payment integration into digital wallets, improving customer experience.

Sales Pipeline: Sustained growth in bookings and partnerships, with 291 software partners and 11 new credit union wins.

3Forward Guidance and Outlook

Q4 2025 Expectations: Anticipate 6% to 8% normalized gross profit growth and free cash flow conversion greater than 50%.

Growth Drivers: Expected benefits from lapping prior client losses and a robust sales pipeline.

Long-term Strategy: Continued focus on organic growth, maintaining a strong balance sheet, and potential M&A opportunities to enhance growth.

4Bad News, Challenges, or Points of Concern

Margin Compression: Gross profit margins compressed by approximately 3.4% year-over-year due to client mix and increased volume discounts.

Client Losses Impact: Continued effects from previous client losses, with a noted 4% impact on Q3 growth.

Political Media Contributions: Anticipated headwinds from strong political media contributions in Q4 of the previous year, expected to impact reported growth by about 10%.

Consumer Softness: Notable softness in the automotive sector, particularly in used car financing, which may affect consumer payments.

5Notable Q&A Insights

Free Cash Flow Outlook: Management expects free cash flow conversion in the upper 50% range for Q4 2025, with a focus on working capital timing affecting guidance.

Political Media Spend: Clarified that the headwind from political media contributions in Q4 of the previous year was approximately $4.6 million in gross profit.

B2B Interchange Rates: Discussion on changes in Visa's commercial enhanced data program and its implications for interchange rates, with a focus on adapting to new data requirements.

Consumer Payment Trends: Management noted stable consumer conditions overall but highlighted specific softness in automotive-related payments. This summary encapsulates the key financial metrics, strategic initiatives, forward guidance, and notable concerns discussed during the earnings call, providing a balanced view of Repay's current position and outlook.