Priority Technology Holdings, Inc. Q4 FY2025 earnings call

Tom Priore highlighted aggregate 2025 performance, 2026 guidance, and strategic updates. Priority's Commerce platform is for connected commerce. Tim O'Leary discussed segment-level performance, including full year and Q4 growth, margin expansion, and details on merchant solutions, payables, and treasury solutions. Also, mention of remediating material weakness in internal controls over financial reporting.

For full year 2025, Priority grew net revenue by 8%, adjusted gross profit by 14%, adjusted EBITDA by 10%, and adjusted EPS by 52 cents to $1.03. Net revenue for Q4 2025 was $247.1 million, up 9% y-o-y. Adjusted gross profit was $100.2 million, up 19% y-o-y, and adjusted EBITDA was $60.1 million, up 16% y-o-y. Merchant Solutions: Q4 revenue $165.3 million, up 6.2% y-o-y. Adjusted gross profit $40.1 million, up 25.5% y-o-y. Payables: Q4 revenue $26.8 million, up 12.7% y-o-y. Adjusted gross profit $7.4 million, up 15.9% y-o-y. Treasury Solutions: Q4 revenue $57.3 million, up 17.8% y-o-y. Adjusted gross profit $52.7 million, up 15.7% y-o-y. Adjusted EBITDA $47.6 million, up 13.2% y-o-y.

Priority anticipates 6% to 9% top-line revenue growth in 2026 to $1.1 - $1.4 billion and adjusted EBITDA of $230 - $245 million. Merchant solutions expected 6% - 8% revenue growth. Payables organic top-line growth expected 8% - 10%. Treasury Solutions expected low double-digit growth. Considered macro environment headwinds like lower interest rates and consumer spending.

Q: Macro environment impact on verticals and 2026 guide.

A: Q4 stabilized from Q3, 2026 guide assumes similar macro, core organic growth slowdown in merchant solutions, interest rate impacts.

Q: Enterprise business pipeline.

A: Pipeline strong, verticals like real estate, sports entertainment have longer sales cycles.

Q: CFTPA monthly enrollments.

A: Seasonal slowdown in Q4, uptick in Q1 expected, new partners mostly on non-CFT pay side.

Q: Supplier-funded issuing dollars and revenue.

A: Dollar volume down due to bank partner acquisition, revenue up from ACH.com balance growth.

Q: 2026 strategic priorities and investments.

A: Invest in verticals like real estate, healthcare, NIL, international remittance, focus on execution.

Q: EBITDA guidance and cash flow.

A: Operating cash flow $36M in Q4, annualized free cash flow over $110M, confident in deleveraging.

Q: 2026 strategy shifts.

A: No strategic shifts, discerning on M&A, emphasize direct sales on large enterprise.

Q: Payables EBITDA growth sustainability.

A: EBITDA growth to more closely correlate with revenue, operating efficiencies offset margin pressure