Strong First Quarter Growth Driven by
Performance Across Unified Commerce Platform
Priority Technology Holdings, Inc. (NASDAQ: PRTH) ("Priority" or
the "Company"), the platform for unified commerce that delivers
integrated payments and banking services at scale, today announced
its first quarter 2024 financial results including strong
year-over-year diversified revenue growth.
Highlights of Consolidated
Results
First Quarter 2024 Compared with First Quarter 2023
Financial highlights of the first quarter of 2024 compared with
the first quarter of 2023, are as follows1:
- Revenue of $205.7 million increased 11.2% from $185.0
million
- Adjusted gross profit (a non-GAAP measure2) of $76.4 million
increased 21.2% from $63.1 million
- Adjusted gross profit margin (a non-GAAP measure2) of 37.1%
increased 300 basis points from 34.1%
- Operating income of $28.0 million increased 66.3% from $16.8
million
- Adjusted EBITDA (a non-GAAP measure2) of $46.3 million
increased 23.1% from $37.6 million
(1)
Certain amounts/percentages may
not add mathematically due to rounding.
(2)
See "Non-GAAP Financial Measures"
and the reconciliations of Adjusted Gross Profit (non-GAAP),
Adjusted Gross Profit Margin (non-GAAP), and Adjusted EBITDA, to
their most comparable GAAP measures provided below for additional
information.
"We delivered record results in the first quarter on strong
performance in each business segment of our unified commerce
platform," said Tom Priore, Chairman & CEO of Priority. "Our
growth in the quarter and ongoing consistency reinforces the unique
attributes of our operating infrastructure, diversity of our
business segments and robust demand for our products. We are laser
focused on the continued innovation of our SaaS Payments and
Banking suite of services and Accelerated Commerce Engine and are
eager to meet the evolving needs of our growing portfolio of
customers and enterprise partners."
Full Year 2024 Financial
Guidance
Priority's outlook remains strong and we are reaffirming our
full year 2024 guidance:
- Revenue forecast to range between $875 million to $890 million,
a growth rate of 16% to 18%, compared to fiscal 2023 results
- Adjusted EBITDA (a non-GAAP measure) forecast to range between
$193 million to $198 million, a growth rate of 15% to 18% compared
to fiscal 2023 results
- Adjusted gross profit (a non-GAAP measure) forecast to range
between $325 million and $335 million, a growth rate of 18% to 22%
compared to fiscal 2023 results
Conference Call
Priority's leadership will host a conference call on Thursday,
May 9, 2024 at 11:00 a.m. EDT to discuss its first quarter
financial results. Participants can access the call by phone in the
U.S. or Canada at (833) 636-1319 or internationally at (412)
902-4286.
The Internet webcast link and accompanying slide presentation
can be accessed at
https://edge.media-server.com/mmc/p/ievzjr9d and will also
be posted in the "Investor Relations" section of the Company's
website at www.prioritycommerce.com.
An audio replay of the call will be available shortly after the
conference call until May 16, 2024 at 2:00 p.m. EDT. To listen to
the audio replay, dial (877) 344-7529 or (412) 317-0088 and enter
conference ID number 4087946. Alternatively, you may access
the webcast replay in the "Investor Relations" section of the
Company's website at www.prioritycommerce.com.
Non-GAAP Financial
Measures
This communication includes certain non-GAAP financial measures
that we regularly review to evaluate our business and trends,
measure our performance, prepare financial projections, allocate
resources, and make strategic decisions. We believe these non-GAAP
measures help to illustrate the underlying financial and business
trends relating to our results of operations and comparability
between current and prior periods. We also use these non-GAAP
measures to establish and monitor operational goals. However, these
non-GAAP measures are not superior to or a substitute for prominent
measurements calculated in accordance with GAAP. Rather, the
non-GAAP measures are meant to be a complement to understanding
measures prepared in accordance with GAAP.
Adjusted Gross Profit and Adjusted Gross Profit
Margin
The Company's adjusted gross profit metric represents revenues
less cost of revenue (excluding depreciation and amortization).
Adjusted gross profit margin is adjusted gross profit divided by
revenues. We review these non-GAAP measures to evaluate our
underlying profit trends. The reconciliation of adjusted gross
profit to its most comparable GAAP measure is provided below:
(in thousands)
Three Months Ended March
31,
2024
2023
Revenues
$
205,719
$
185,028
Cost of revenue (excluding depreciation
and amortization)
(129,298
)
(121,966
)
Adjusted gross profit
$
76,421
$
63,062
Adjusted gross profit margin
37.1
%
34.1
%
Depreciation and amortization of revenue
generating assets
(3,900
)
(2,959
)
Gross profit
$
72,521
$
60,103
Gross profit margin
35.3
%
32.5
%
EBITDA and Adjusted EBITDA
EBITDA and adjusted EBITDA are performance measures. EBITDA is
earnings before interest, income tax, and depreciation and
amortization expenses ("EBITDA"). Adjusted EBITDA begins with
EBITDA but further excludes certain non-cash costs, such as
stock-based compensation and the write-off of the carrying value of
investments or other assets, as well as debt extinguishment and
modification expenses and other expenses and income items
considered non-recurring, such as acquisition integration expenses,
certain professional fees, and litigation settlements. We review
the non-GAAP adjusted EBITDA measure to evaluate our business and
trends, measure our performance, prepare financial projections,
allocate resources, and make strategic decisions.
The reconciliation of adjusted EBITDA to its most comparable
GAAP measure is provided below:
(in thousands)
Three Months Ended March
31,
2024
2023
Net income (loss)
$
5,193
$
(506
)
Interest expense
20,880
17,699
Income tax expense (benefit)
2,582
(133
)
Depreciation and amortization
15,253
18,048
EBITDA
43,908
35,108
Selling, general and administrative
(non-recurring)
798
437
Non-cash stock-based compensation
1,634
1,936
Non-cash other losses
—
159
Adjusted EBITDA
$
46,340
$
37,640
Further detail of certain of these adjustments, and where these
items are recorded in our consolidated statements of operations, is
provided below:
(in thousands)
Three Months Ended March
31,
2024
2023
Selling, general and administrative
expenses (non-recurring):
Certain legal fees
450
376
Professional, accounting and consulting
fees
189
61
Other expenses, net
159
—
$
798
$
437
Priority does not provide a reconciliation of forward-looking
non-GAAP financial measures to their comparable GAAP financial
measures because it could not do so without unreasonable effort due
to the unavailability of the information needed to calculate
reconciling items and due to the variability, complexity and
limited visibility of the adjusting items that would be excluded
from the non-GAAP financial measures in future periods. When
planning, forecasting and analyzing future periods, the Company
does so primarily on a non-GAAP basis without preparing a GAAP
analysis as that would require estimates for various cash and
non-cash reconciling items that would be difficult to predict with
reasonable accuracy. For example, stock-based compensation expense
would be difficult to estimate because it depends on the Company's
future hiring and retention needs, as well as the future fair
market value of the Company's common stock, all of which are
difficult to predict and subject to constant change. As a result,
the Company does not believe that a GAAP reconciliation would
provide meaningful supplemental information about the Company's
outlook.
About Priority
Technology Holdings, Inc.
Priority is a solution provider in Payments and Banking as a
Service operating at scale with over 1,000,000 active customers
across its SMB, B2B and Enterprise channels processing $120 billion
in annual transaction volume and providing administration for $980
million in deposits. Priority’s purpose-built technology enables
clients to collect, store, lend and send money and provides
customers the acceptance and AP payment applications and Passport
financial tools that best optimize their cash flow and maximize
working capital. Additional information can be found at
www.prioritycommerce.com.
Forward-Looking
Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements include, but are not limited to, statements
about future financial and operating results, our plans,
objectives, expectations and intentions with respect to future
operations, products and services, and other statements identified
by words such as "may," "will," "should," "anticipates,"
"believes," "expects," "plans," "future," "intends," "could,"
"estimate," "predict," "projects," "targeting," "potential" or
"contingent," "guidance," "outlook" or words of similar meaning.
These forward-looking statements include, but are not limited to,
our 2024 outlook and statements regarding our market and growth
opportunities. Such forward-looking statements are based upon the
current beliefs and expectations of our management and are
inherently subject to significant business, economic and
competitive risks, trends and uncertainties that could cause actual
results to differ materially from those projected, expressed, or
implied by such forward-looking statements. Our actual results
could differ materially, and potentially adversely, from those
discussed or implied herein.
We caution that it is very difficult to predict the impact of
known factors, and it is impossible for us to anticipate all
factors that could affect our actual results. All forward-looking
statements are expressly qualified in their entirety by these
cautionary statements. You should evaluate all forward-looking
statements made in this press release in the context of the risks
and uncertainties disclosed in our SEC filings, including our most
recent Annual Report on Form 10-K filed with the SEC on March 12,
2024. These filings are available online at www.sec.gov or
www.prioritycommerce.com.
We caution you that the important factors referenced above may
not contain all of the factors that are important to you. In
addition, we cannot assure you that we will realize the results or
developments we expect or anticipate or, even if substantially
realized, that they will result in the consequences we anticipate
or affect us or our operations in the way we expect. You are
cautioned not to place undue reliance on forward-looking statements
as a predictor of future performance. The forward-looking
statements included in this press release are made only as of the
date hereof. We undertake no obligation to publicly update or
revise any forward-looking statement as a result of new
information, future events or otherwise, except as otherwise
required by law. If we do update one or more forward-looking
statements, no inference should be made that we will make
additional updates with respect to those or other forward-looking
statements. We qualify all of our forward-looking statements by
these cautionary statements.
Priority Technology Holdings,
Inc.
Unaudited Consolidated
Statements of Operations and Comprehensive Loss
(in thousands, except per share
amounts)
Three Months Ended March
31,
2024
2023
Revenues
$
205,719
$
185,028
Operating expenses
Cost of revenue (excludes depreciation and
amortization)
129,298
121,966
Salary and employee benefits
22,150
19,048
Depreciation and amortization
15,253
18,048
Selling, general and administrative
10,995
9,118
Total operating expenses
177,696
168,180
Operating income
28,023
16,848
Other (expense) income
Interest expense
(20,880
)
(17,699
)
Other income, net
632
212
Total other expense, net
(20,248
)
(17,487
)
Income (loss) before income taxes
7,775
(639
)
Income tax expense (benefit)
2,582
(133
)
Net income (loss)
5,193
(506
)
Less: Dividends and accretion attributable
to redeemable senior preferred stockholders
(12,662
)
(11,295
)
Less: Return on redeemable NCI in
consolidated subsidiary
(581
)
—
Net loss attributable to common
stockholders
(8,050
)
(11,801
)
Other comprehensive loss
Foreign currency translation
adjustments
(13
)
24
Comprehensive loss
$
(8,063
)
$
(11,777
)
Loss per common share:
Basic and diluted
$
(0.10
)
$
(0.15
)
Weighted-average common shares
outstanding:
Basic and diluted
78,021
78,133
Priority Technology Holdings,
Inc.
Unaudited Consolidated Balance
Sheets
(in thousands)
March 31, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
34,290
$
39,604
Restricted cash
12,658
11,923
Accounts receivable, net of allowances
67,137
58,551
Prepaid expenses and other current
assets
13,699
13,273
Current portion of notes receivable, net
of allowance
1,972
1,468
Settlement assets and customer/subscriber
account balances
752,590
756,475
Total current assets
882,346
881,294
Notes receivable, less current portion
4,549
3,728
Property, equipment and software, net
48,120
44,680
Goodwill
376,112
376,103
Intangible assets, net
261,658
273,350
Deferred income taxes, net
24,405
22,533
Other noncurrent assets
12,767
13,649
Total assets
$
1,609,957
1,615,337
Liabilities, Redeemable Senior
Preferred Stock, Redeemable NCI, and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued expenses
$
49,329
$
52,643
Accrued residual commissions
35,965
33,025
Customer deposits and advance payments
4,090
3,934
Current portion of long-term debt
6,712
6,712
Settlement and customer/subscriber account
obligations
753,850
755,754
Total current liabilities
849,946
852,068
Long-term debt, net of current portion,
discounts and debt issuance costs
631,352
631,965
Other noncurrent liabilities
16,704
18,763
Total liabilities
1,498,002
1,502,796
Redeemable senior preferred stock, net of
discounts and issuance costs
264,240
258,605
Redeemable non-controlling interests in
consolidated subsidiary
5,837
—
Stockholders' deficit:
Preferred stock
—
—
Common stock
76
77
Treasury stock, at cost
(18,491
)
(12,815
)
Additional paid-in capital
—
—
Accumulated other comprehensive loss
(42
)
(29
)
Accumulated deficit
(141,412
)
(134,951
)
Total stockholders' deficit
attributable to stockholders of PRTH
(159,869
)
(147,718
)
Non-controlling interest
1,747
1,654
Total stockholders' deficit
(158,122
)
(146,064
)
Total liabilities, redeemable senior
preferred stock, redeemable NCI and stockholders' deficit
$
1,609,957
$
1,615,337
Priority Technology Holdings,
Inc.
Unaudited Consolidated
Statements of Cash Flows
(in thousands)
Three Months Ended March
31,
2024
2023
Cash flows from operating
activities:
Net income (loss)
$
5,193
$
(506
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization of
assets
15,253
18,048
Stock-based, ESPP and incentive units
compensation
1,633
1,936
Amortization of debt issuance costs and
discounts
1,065
903
Deferred income tax
(1,872
)
(5,716
)
Change in contingent consideration
972
229
Other non-cash items, net
(259
)
14
Change in operating assets and
liabilities:
Accounts receivable
(8,339
)
81
Prepaid expenses and other current
assets
(425
)
481
Income taxes (receivable) payable
—
8,666
Notes receivable
(266
)
(163
)
Accounts payable and other accrued
liabilities
1,590
3,916
Customer deposits and advance payments
157
250
Other assets and liabilities, net
(1,395
)
(462
)
Net cash provided by operating
activities
13,307
27,677
Cash flows from investing
activities:
Additions to property, equipment and
software
(6,610
)
(5,046
)
Notes receivable, net
(1,059
)
178
Acquisitions of assets and other investing
activities
—
(2,715
)
Net cash used in investing
activities
(7,669
)
(7,583
)
Cash flows from financing
activities:
Repayments of long-term debt
(1,678
)
(1,550
)
Repayments of borrowings under revolving
credit facility
—
(6,000
)
Repurchases of Common Stock and shares
withheld for taxes
(421
)
(777
)
Dividends paid to redeemable senior
preferred stockholders
(7,027
)
(11,435
)
Settlement and customer/subscriber
accounts obligations, net
1,918
79,258
Payment of contingent consideration
related to business combination
(3,071
)
(1,959
)
Net cash (used in) provided by
financing activities
(10,279
)
57,537
Net change in cash and cash equivalents
and restricted cash:
Net (decrease) increase in cash and cash
equivalents, and restricted cash
(4,641
)
77,631
Cash and cash equivalents and restricted
cash at beginning of period
796,223
560,610
Cash and cash equivalents and
restricted cash at end of period
$
791,582
$
638,241
Reconciliation of cash and cash
equivalents, and restricted cash:
Cash and cash equivalents
$
34,290
$
15,882
Restricted cash
12,658
11,012
Cash and cash equivalents included in
settlement assets and customer/subscriber account balances
744,634
611,347
Total cash and cash equivalents, and
restricted cash
$
791,582
$
638,241
Priority Technology Holdings,
Inc.
Unaudited Reportable Segments'
Results
(in thousands)
Three Months Ended March
31,
2024
2023
SMB Payments:
Revenue
$
143,751
$
154,933
Operating expenses
131,368
142,922
Operating income
$
12,383
$
12,011
Operating margin
8.6
%
7.8
%
Depreciation and amortization
$
8,802
$
10,846
Key indicators:
Merchant bankcard processing dollar
value
$
14,788,095
$
15,220,715
Merchant bankcard transaction count
175,228
163,406
B2B Payments:
Revenue
$
21,115
$
2,786
Operating expenses
21,908
3,635
Operating loss
$
(793
)
$
(849
)
Operating margin
(3.8
)%
(30.5
)%
Depreciation and amortization
$
1,640
$
125
Key indicators:
B2B issuing dollar volume
$
227,811
$
198,456
B2B issuing transaction count
240
280
Enterprise Payments:
Revenue
$
40,853
$
27,309
Operating expenses
15,306
14,646
Operating income
$
25,547
$
12,663
Operating margin
62.5
%
46.4
%
Depreciation and amortization
$
4,356
$
6,690
Key indicators:
Average billed clients
703,887
465,219
Average monthly new enrollments
53,551
45,948
Operating income of reportable
segments
$
37,137
$
23,825
Less: Corporate expense
(9,114
)
(6,977
)
Consolidated operating income
$
28,023
$
16,848
Corporate depreciation and
amortization
$
455
$
387
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240509004141/en/
Priority Investor Inquiries: Chris Kettmann
chris.kettmann@dentonsglobaladvisors.com (773) 497-7575
Grafico Azioni Priority Technology (NASDAQ:PRTH)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Priority Technology (NASDAQ:PRTH)
Storico
Da Giu 2023 a Giu 2024