Summary of REPAY Holdings Corporation Q2 2026 Earnings Call

1Key Financial Results and Metrics

Revenue: $100.7 million, up 33% year-over-year, with approximately 6% organic growth.

Free Cash Flow: $27.4 million, representing a 75% conversion rate; adjusted free cash flow was approximately $29.3 million (81% conversion).

Adjusted EBITDA: $36.3 million, up 14% year-over-year, with margins around 36%.

Adjusted Net Income: $17.9 million or $0.20 per share.

Gross Profit: $70.6 million, with a margin of 70%, down from 76% year-over-year, primarily due to KUBRA's lower-margin business mix.

Net Leverage: Approximately 3.7x; target to reduce below 3x within 18 months.

2Strategic Updates and Business Highlights

KUBRA Acquisition: Completed in June 2026, significantly enhancing REPAY's capabilities in consumer bill payment and communication services. KUBRA contributed approximately $21 million in revenue for June.

Integration Progress: Over $4.5 million in annualized run rate synergies realized exiting Q2, with a target of $8 million by the end of 2026 and over $20 million by 2028.

Consumer Payments: Revenue increased by 33% year-over-year; organic growth was 4%. New client implementations are expected to drive acceleration in the second half of 2026.

Business Payments: Revenue growth accelerated to 32% year-over-year, with a normalized growth rate of approximately 19%, excluding political media contributions.

AI Deployment: Ongoing integration of AI tools across the organization to enhance operational efficiency and client experience.

3Forward Guidance and Outlook

Full-Year 2026 Guidance: Revenue expected between $490 million and $500 million (60% growth), with 10-12% organic growth. Adjusted EBITDA projected between $168.5 million and $176 million (approximately 35% margins).

Political Media Revenue: Anticipated between $8 million and $10 million for the full year, with strong contributions expected in Q3 and Q4.

Organic Growth: Management expects to achieve double-digit organic growth in the second half of 2026.

4Challenges and Points of Concern

Margin Compression: Gross profit margin decreased due to KUBRA's lower-margin business mix, which may raise concerns about profitability in the short term.

Integration Risks: While integration is progressing well, there is inherent risk in managing the transition and ensuring that core growth is not impeded.

Debt Levels: The company has significant debt, with a focus on reducing leverage, which may constrain financial flexibility if cash flow generation does not meet expectations.

5Notable Q&A Insights

KUBRA Growth: KUBRA's growth was approximately 6% year-over-year, with expectations for continued mid-single-digit growth. Its integration is expected to enhance REPAY's overall offerings.

Organic Growth Drivers: The organic growth in Consumer Payments is driven by new client ramps and existing clients adopting more payment channels.

Free Cash Flow Dynamics: The strong free cash flow conversion was attributed to timing of working capital, with expectations for continued strong cash generation despite increased interest expenses from the new term loan.

Future Margin Improvement: Management expressed confidence in improving margins through cost synergies and operational efficiencies as the integration progresses. Overall, REPAY demonstrated strong revenue growth and strategic progress with the KUBRA acquisition, while also facing challenges related to margin compression and integration risks. The outlook remains positive with expectations for accelerated organic growth and improved financial metrics in the second half of 2026.