Priority Technology Holdings, Inc. · NASDAQ:PRTH
Priority Technology — Q1 2022 Earnings Presentation
21 slides from Priority Technology's earnings presentation, May 11, 2022
Slide 1: Supplemental Slides: First Quarter 2022 Earnings Call
Priority (Nasdaq: PRTH) S u p p l e m e n t a l S l i d e s : F i r s t Q u a r t e r 2 0 2 2 E a r n i n g s C a l l May 11, 2022 P R IO R IT Y T E C H N O L O G Y H O L D IN G S
Slide 2: Disclaimer
P R IO R IT Y T E C H N O L O G Y H O L D IN G S DISCLAIMER Important Notice Regarding Forward-Looking Statements and Non-GAAP Measures This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are
Slide 3: First Quarter 2022 Highlights
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 3 First Quarter 2022 Highlights • Revenue of $153.2 million increased 35.2% from $113.3 million in Q1 2021 • Gross profit of $51.8 million increased 65.0% from $31.4 million in Q1 2021 • Gross profit margin of 33.8% increased 610 basis points from 27.
Slide 4: Excluding CFTPay and Specialized Acquiring
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 4 Excluding CFTPay and Specialized Acquiring • Revenue of $132.2 million increased 30.9% from $101.0 million in Q1 2021 • Adjusted EBITDA of $17.0 million increased 63.5% from $10.4 million in Q1 2021 Revenue and Adjusted EBITDA, Adjusted to Exclude C
Slide 5: Priority Technology Holdings overview
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 245k+ Active Merchants $90B+ in Annual Payment Volume ■ Priority Technology Holdings, Inc. (NASDAQ:PRTH), is a payments technology company that leverages a purpose-built platform to enable clients to collect, store and send money. ■ Priority delivers
Slide 6: Mission and Passport platform architecture
P R IO R IT Y T E C H N O L O G Y H O L D IN G S MISSION: Build innovative payment solutions that collect, store & send money to power modern commerce PRIORITY SMB PAYMENTS B2B PAYMENTS ENTERPRISE PAYMENTS PASSPORT – API / UI + UX “ YOUR TICKET TO MODERN COMMERCE” A N ATIVE PLATFORM OF SHARED SERVIC
Slide 7: MX Connect and MX Merchant Suite: SMB Payments
P R IO R IT Y T E C H N O L O G Y H O L D IN G S M X ™ CON NEC T PARTNER / RESELLER ACCOUNTS NEW MERCHANT ONBOARDS PER MONTH MX™ Connect is Priority’s powerful reseller CRM and business operating system for partners, powered through web and mobile applications 1,250+ 4,600+ 7 80%+ PERCENT OF INTEGRA
Slide 8: CPX: B2B Payments
P R IO R IT Y T E C H N O L O G Y H O L D IN G S SUPPLIERS ENROLLED ISSUING VOLUME (ANNUAL) ENROLLED FINANCIAL INSTITUTIONS SUPPORTED CPX provides market-leading A/P automation solutions to corporations, software partners and industry leading financial institutions 75K $26B 46 Overview CPX offers a
Slide 9: Passport APIs: Enterprise Payments and value proposition
P R IO R IT Y T E C H N O L O G Y H O L D IN G S PASSPORT APIs E N TE RPRIS E PAYM E N TS P R I O R I T Y VA LU E P R O P O S I T I O N Priority is a payments powerhouse driving the convergence of payments and banking with a single platform to collect, store & send money INNOVATIVE PAYMENT SOLUTIONS
Slide 10: Revenue: SMB
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 10 Revenue • SMB revenue key growth drivers included: ➢ Bankcard Volume of $14.1 billion increased $2.2 billion, or 18.5%, from $11.9 billion ➢ Bankcard Transactions of 145.9 million increased 18.4 million, or 14.4%, from 127.6 million ➢ Average Ticke
Slide 11: Revenue: B2B and Enterprise
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 11 Revenue • B2B revenue key growth drivers included: ➢ Managed Services increased 44.4% to $2.6 million from $1.8 million, driven by program growth ➢ CPX increased 94.1% to $3.3 million from $1.7 million driven by new customer additions, volume incre
Slide 12: Gross Profit
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 12 Gross Profit • SMB gross profit of $32.9 million increased 12.7% from $29.2 million in Q1 2021 ➢ Specialized Merchant Acquiring (SMA) gross profit of $2.2 million declined $5.5 million from $7.7 million in Q1 2021 due to a temporary pullback from r
Slide 13: Gross Profit Margin
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 13 Gross Profit Margin • SMB gross profit margin decline was driven by the temporary pullback in SMA • Enterprise gross profit margin overcame the SMB decline and drove overall margin expansion Gross Profit Margin of 33.8% increased 610 basis points f
Slide 14: Other Operating Expenses
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 14 Other Operating Expenses • Salaries and Benefits of $16.1 million increased 67.8% from $9.6 million in Q1 2021 ➢ Growth driven by the CFTPay (Finxera) acquisition, other headcount growth and $1.0 million of higher non-cash, stock-based compensation
Slide 15: Operating Income
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 15 Operating Income • SMB operating income of $12.5 million decreased $0.8 million from $13.3 million in Q1 2021 ➢ Specialized Merchant Acquiring (SMA) gross profit declined $5.5 million ➢ SMB operating income increased $4.7 million, excluding the SMA
Slide 16: Adjusted EBITDA
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 16 Adjusted EBITDA Strong Adjusted EBITDA Growth in Q1 • Q1 2022 Adjusted EBITDA of $30.3 million increased 68.3% from $18.0 million in Q1 2021 (dollars in millions) 2022 2021 Q1 Q1 Consolidated net income (loss) (GAAP) (0.3)$ (2.7)$ Add: Interest exp
Slide 17: Interest Expense
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 17 Interest Expense • Interest expense of $11.5 million increased $2.3 million from $9.2 million in Q1 2021 ➢ Total outstanding debt of $625.4 million at March 31, 2022 increased $246.3 million from $379.1 million at March 31, 2021 due to acquisition
Slide 18: Outstanding Debt
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 18 Outstanding Debt • Total Debt of $625.4 million decreased $6.5 million from $631.9 million at December 31, 2021 ➢ Scheduled amortization payment of $1.5 million, and ➢ Revolver repayment of $5.0 million • Total Debt reduced further to $621.4 millio
Slide 19: Senior Preferred Stock
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 19 Senior Preferred Stock Senior Preferred Stock of $215.1 million, Net of $22.7 million of Unaccreted Discounts and Issuance Costs • First quarter dividends and accretion is as follows: (dollars in millions) First Quarter (dollars in Millions) 2022 D
Slide 20: Strong Financial Performance with Peer Valuation Discount
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 20 STRONG FINANCIAL PERFORMANCE with PEER VALUATION DISCOUNT ENTERPRISE VALUE MULTIPLE 1 (1) Recent Enterprise Values divided by twelve-month Adjusted EBITDA (Management calculations based on recent publicly available information). ■ Revenue CAGR2: 18
Slide 21: Built to Power Modern Commerce
P R IO R IT Y T E C H N O L O G Y H O L D IN G S BUILT TO POWER MODERN COMMERCE P R IO R IT Y T E C H N O L O G Y H O L D IN G S 21 ■ Built for the Future of Payments – Large Global Market Opportunity ■ Scalable, Innovative Technology Platform – Low Capital Spending Needs ■ Strong Revenue Growth & S
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