Priority Technology Holdings, Inc. · NASDAQ:PRTH
Priority Technology — Investor Presentation (January 2025)
32 slides from Priority Technology's investor presentation, Jan 15, 2025
Slide 1: Priority Technology Holdings, Inc. Investor Presentation January 2025
Priority Technology Holdings, Inc. (Nasdaq: PRTH) Investor Presentation January 2025
Slide 2: Disclaimer
prioritycommerce.com 1 Disclaimer Important Notice Regarding Forward-Looking Statements and Non-GAAP Measures This presentation of Priority Technology Holdings, Inc. (“Priority”, “PRTH”, “we”, “our”, or “us”) contains “forward looking statements” within the meaning of the Private Securities Litigati
Slide 3: Transaction Overview
prioritycommerce.com 2 Issuer: Priority Technology Holdings, Inc. Exchange / Ticker: NASDAQ / PRTH Base Shares Offered: 9,157,600 Overallotment Option: 15% Primary / Secondary: 100% Secondary Lock-Up: 90 Days for the Company, Directors and Officers and Selling Stockholders Joint Lead Bookrunners: Ke
Slide 4: Priority Presenters
prioritycommerce.com Priority Presenters 25+ 20+ TITLE BIO YRS OF EXP PRIOR EXP TOM PRIORE Chairman, President, Chief Executive Officer, and Co-founder TIM O’LEARY Chief Financial Officer Transformed Priority into the 6th largest U.S. non-bank merchant acquirer2 underpinned by unified commerce engin
Slide 5: Priority Commerce: Powering an Ecosystem of Integrated Financial Solutions
prioritycommerce.com Accelerate Cash Flow Optimize Working Capital Priority Commerce Engine (PCE) is a unified platform that provides our customers a personalized financial toolset to accelerate cash flow and optimize working capital on a single platform to collect, store, lend1, and send money comb
Slide 6: Priority at a Glance
prioritycommerce.com 5 Priority at a Glance 1 Adjusted Gross Profit, Adjusted EBITDA, Recurring and Re-Occurring Revenue, and FCF Conversion referred to in this presentation are non-GAAP measures. See slide 1 for further details Priority’s Unified Commerce Engine Model Translates Into A Highly Attra
Slide 7: Unified Technology Platform Operating at Scale
prioritycommerce.com Q3 ’24 Adj. Gross Profit Margin2 93.6% Q3 ’24 Adj. Gross Profit Margin2 28.5% Q3 ‘24 Adj. Gross Profit Margin2 22.4% Unified Technology Platform Operating at Scale Combines SMB, B2B, and Enterprise functionality into a single platform that enables partners / merchants to collect
Slide 8: Large Addressable Markets with Strong Secular Growth Tailwinds
prioritycommerce.com $10.8 $14.8 2022A 2027E $112.0 $24.1 $43.8 2024 TAM (North America) 2024 Market Captured 2030 Market Captured US Consumer Payments Volume The spend opportunity in the global accounts payable/accounts receivable flow is ~$100T, with about ~$25T of that opportunity in North Americ
Slide 9: Experienced Management Team with Proven Track Record of Execution
prioritycommerce.com Experienced Management Team with Proven Track Record of Execution Founder-led management team with significant industry experience and track record of growth & profitability TITLE BIO NAME PRIOR EXP TIM O’LEARY 20+ Chief Financial Officer Seasoned finance, capital markets and M&
Slide 10: Key Investment Highlights
prioritycommerce.com ➔ Purpose-built financial toolset to accelerate cash flow and optimize working capital for businesses on a single platform ➔ Proprietary API suite that enables acquiring, banking & payables solutions ➔ Configurable technology that can manage complex money movement in any industr
Slide 11: Financial Performance Overview
prioritycommerce.com Financial Performance Overview 10
Slide 12: Priority Metrics at a Glance
prioritycommerce.com $514.9 $663.6 $755.6 $652.6 $226.2 18.7% 21.1% 22.3% 23.3% 2021 2022 2023 2024E ~$127B LTM Total Volume1 >1.1M Total Accounts1 >$1.1B Account Balances1 Priority Metrics at a Glance Priority is a tech-enabled Payments and Embedded Banking & Treasury Solutions provider that offers
Slide 13: Responsive and Personalized Financial API Toolkit Drives Enhanced Returns
prioritycommerce.com +13% +58% +34% 12 Responsive and Personalized Financial API Toolkit Drives Enhanced Returns Q3 2024 Revenue YoY Growth1 SMB B2B Enterprise Q3 2024 Adj. Gross Profit Margin1,2 1 Reflects segment level performance and does not include operating overhead and shared costs managed ce
Slide 14: Continued Shift to Higher Margin Segments
prioritycommerce.com SMB 92.4% Enterprise 4.3% B2B 3.3% SMB 41.4% Enterprise 51.3% B2B 7.3% SMB 81.6% Enterprise 12.2% B2B 6.2% SMB 69.6% Enterprise 20.7% B2B 9.7% Continued Shift to Higher Margin Segments FY 2021 Q3 2024 Adj. Gross Profit1 Revenue Contribution by Segment Contribution by Segment FY
Slide 15: YTD Q3 2024 Consolidated Results
prioritycommerce.com 14 YTD Q3 2024 Consolidated Results $202.4M $244.1M 36.4% 37.4% $123.7M $152.5M $556.3M $652.6M YTD Q3 23 YTD Q3 24 YTD Q3 23 YTD Q3 24 YTD Q3 23 YTD Q3 24 YTD Q3 23 YTD Q3 24 17% 21% 100bp 23% Consolidated Adj. EBITDA1 increased 23% to $152.5 million Consolidated Adj. Gross Pro
Slide 16: SMB Segment Highlights
prioritycommerce.com Adj. Gross Profit Margin1 22.4% Adj. EBITDA1 $28.6M Adj. Gross Profit1 $35.6M Provides technology-enabled payment acceptance and business management capabilities to merchants, enterprises and distribution partners Our comprehensive suite of solutions enables merchants to identif
Slide 17: B2B Segment Highlights
prioritycommerce.com Adj. Gross Profit Margin1 28.5% Adj. EBITDA1 $1.9M Adj. Gross Profit1 $6.3M Revenue $22.1M $1.9 $5.2 Q3 '23 YTD Q3 '24 YTD $1.4 $1.9 Q3 '23 Q3 '24 $14.0 $22.1 Q3 '23 Q3 '24 $19.7 $65.4 Q3 '23 YTD Q3 '24 YTD Revenue ($M) 16 B2B Segment Highlights Q3 2024 B2B Segment Results 1 Adj
Slide 18: Enterprise Segment Highlights
prioritycommerce.com Provides solutions that leverage Priority’s core payments engine, automated payables platform and account ledgering capabilities, all via API resources: ➔ Enables software partners and business platform customers to embed payments and treasury solutions into their core operating
Slide 19: Strong Free Cash Flow and Minimal Capital Needs
prioritycommerce.com +25% Growth $9.7 $18.9 $21.3 $15.3 $17.0 1.9% 2.8% 2.8% 2.7% 2.6% 2021 2022 2023 Q3 '23 YTD Q3 '24 YTD $86.6 $121.4 $147.1 $108.4 $135.5 89.9% 86.5% 87.4% 87.7% 88.8% 2021 2022 2023 Q3 '23 YTD Q3 '24 YTD Strong Free Cash Flow and Minimal Capital Needs 18 Free Cash Flow & Free Ca
Slide 20: Disciplined Financial Policy with Strong Balance Sheet
prioritycommerce.com 6.4x 4.3x 3.7x 4.0x 8.8x 6.1x 5.3x 4.6x 2021 2022 2023 Sep '24 Dec '24 Acquired Plastiq Aug. 2023 4.4x Disciplined Financial Policy with Strong Balance Sheet and Proven Ability to De-Lever 19 Historical Net Leverage (incl Preferred Equity) Commentary Priority is committed to sus
Slide 21: Acquisition Strategy
prioritycommerce.com Acquisition Strategy 20 ➔ Acquire leading providers in new vertical markets that represent large TAMs with deep profit pools ➔ Ability to integrate to Priority Commerce Engine to drive operating efficiencies along with market differentiated solutions ➔ Acquire leading providers
Slide 22: Successful Execution of Acquisition Strategy
prioritycommerce.com Successful Execution of Acquisition Strategy 21 ➔ Increased Distribution Capabilities – acquired competitor with significant presence in the ISO market but required operating efficiencies and technology improvement ➔ Vertical Market Expansion – entry into rent payments market ➔
Slide 23: Preliminary Q4 2024 Estimated Results
prioritycommerce.com Three months ended December 31, 2024 ($ in millions) Low High Net Income $6.6 $9.9 Interest expense $23.1 $23.1 Income tax expense $2.0 $3.9 Depreciation and amortization $14.0 $14.0 EBITDA $45.7 $50.9 Stock based compensation $2.8 $2.0 Non-recurring items $1.2 $1.2 Adjusted EBI
Slide 24: Preliminary Full Year 2025 Outlook
prioritycommerce.com We have not yet completed our procedures to set an annual plan approved by the Board of Directors. Presented below are ranges of our estimated preliminary forecasted results for the full year 2025. These ranges are based on the information available to us currently. We have prov
Slide 25: Key Investment Highlights
prioritycommerce.com Key Investment Highlights Leading Unified Commerce Technology Platform Operating at Scale Large Addressable Markets with Strong Secular Growth Tailwinds Diversified Customer Portfolio with Continued Shift to Recurring1 Revenue and Adj. Gross Profit1 Model Attractive Financial Me
Slide 26: Appendix
prioritycommerce.com 25 Appendix
Slide 27: Segment Adjusted Gross Profit Reconciliation
prioritycommerce.com SMB B2B Enterprise Eliminations Total SMB B2B Enterprise Eliminations Total Revenues $ 158.8 $ 22.1 $ 47.1 $ (1.0) $ 227.0 $ 140.2 $ 14.0 $ 35.2 $ (0.4) $ 189.0 Cost of revenue (excluding depreciation and amortization) (123.2) (15.8) (3.0) 1.0 (141.1) (105.8) (8.9) (2.4) 0.4 (11
Slide 28: Segment Adjusted EBITDA Reconciliation
prioritycommerce.com SMB B2B Enterprise Corporate Total SMB B2B Enterprise Corporate Total Adjusted EBITDA $ 28.6 $ 1.9 $ 40.9 $ (16.9) $ 54.6 $ 27.6 $ 1.4 $ 29.8 $ (13.8) $ 45.0 Adjusted EBITDA Margin 18.0% 8.7% 86.9% 24.1% 19.7% 9.7% 84.6% 23.8% Interest Expense -- (1.1) -- (22.2) (23.2) -- (0.5)
Slide 29: Recurring and Re-Occurring Revenue
prioritycommerce.com Three months ended % ($ in Millions) September 30, 2024 of Total Recurring revenue $ 66.9 29% Re-Ocurring revenue 153.7 68% Other 6.5 3% Total Revenue $ 227.0 100% Recurring Cost of Revenue (excludes depreciation and amortization) $ 15.6 11% Re-Ocurring Cost of Rervices (exclude
Slide 30: Adjusted EBITDA to Free Cash Flow Reconciliation
prioritycommerce.com ($ in Millions) 2021 2022 2023 YTD Sep. 23 YTD Sep. 24 Adjusted EBITDA $ 96.3 $ 140.3 $ 168.3 $ 123.7 $ 152.5 Adjusted EBITDA Margin 18.7% 21.1% 22.3% 22.2% 23.4% Interest Expense 36.5 53.6 76.1 55.5 65.8 Depreciation and Amortization 49.7 70.7 68.4 53.3 44.2 Debt Modification a
Slide 31: Priority: Your Trusted Partner
prioritycommerce.com 30 Merchant Services Full featured POS & merchant acquiring solutions that accelerate your cash flow to capture revenue opportunities for businesses Payables Optimize your working capital and earn cash back by leveraging our payables & financing solutions while automating reconc
Slide 32: @ J PRIORITY
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