Repay Holdings Corporation Q2 FY2025 earnings call

• REPAY executed on reaccelerating growth in Q2 2025, with sequential improvement in go-to-market, implementation pipelines, and operational excellence.
• Consumer Payments saw sequential growth improvement, with software partners and customer support teams enhancing experience; announced integration enhancements with MeridianLink.
• Business Payments focused on core accounts payable platform and payment monetization, with health care and hospitality verticals as strengths.
• In Q2, REPAY bought back ~5% of outstanding shares, using $38 million to repurchase 7.9 million shares.
• Appointed Robert Houser as Chief Financial Officer, effective September 8, with Thomas Sullivan returning to Chief Accounting Officer.

In the second quarter of 2025, revenue was $75.6 million, up 1% year-over-year. Reported gross profit declined 2% year-over-year. The Consumer Payments segment's gross profit growth sequentially improved and was approximately flat year-over-year, with core growth algorithm giving confidence for continued improvement. The Business Payments segment's gross profit declined 5% year-over-year, but normalized gross profit increased ~1% when excluding certain impacts. Consumer Payments had growth driven by software partners and client wins, while Business Payments focused on AP platform and saw supplier network growth to over 440,000 suppliers.

• Expect sequential quarterly normalized gross profit growth in Q3.
• Q4 expected to have high-single digit to low-double digit normalized gross profit growth and free cash flow conversion above 60%.
• Capital allocation priorities: focus on organic growth and investments, manage CapEx, maintain strong balance sheet, use cash for 2026 convertible notes, opportunistically repurchase shares, and consider strategic tuck-in M&A.

No specific risks discussed in detail during the call; however, forward-looking statements are subject to risks and uncertainties as outlined in the company's SEC filings.

Q: Steven Kwok asks about bridging the guidance from low-single digit growth to high-single digits in the back half.

A: Thomas says there will be sequential improvement into Q3 and further acceleration into Q4, with Q4 expected to have high-single digit to low-double digit normalized growth.

Q: Steven Kwok asks about capital management for the 2026 convertible note.

A: John says they will prioritize using cash for the convert but will need to tap the revolver for the remaining amount.

Q: Steven Kwok asks about strategic tuck-in M&A verticals.

A: John says criteria-based, looking for opportunities in consumer or business payments within their swim lanes.

Q: Joseph Vafi asks about moving upmarket into larger customers.

A: John says they are investing in enterprise sales, enhancing direct sales model, and allocating more resources to the sales team.

Q: Joseph Vafi asks about mortgage payments.

A: John says there is positive traction but not a 2025 needle mover.

Q: Alex Neumann asks about RCS partnership.

A: John says in implementation process, nothing major to report yet.

Q: Alex Neumann asks about B2B AR-AP mix.

A: John says it's approximately 60-40 AR-AP.

Q: Shefali Tamaskar asks about consumer softness.

A: John says auto is challenged but overall consumer is resilient.

Q: Pat Ennis asks about TotalPay and supplier network.

A: John says TotalPay TPV is increasing and supplier network growth is due to network effect and vertical focus