Slide 1: Supplemental Slides: Fourth Quarter 2021 Earnings Call
Priority (Nasdaq: PRTH) S u p p l e m e n t a l S l i d e s : F o u r t h Q u a r t e r 2 0 2 1 E a r n i n g s C a l l March 17, 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: Priority Overview: Priority at a Glance
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 240k+ 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 4: 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 4 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 5: Mission: Build innovative payment solutions 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 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 6: Passport Architecture
P R IO R IT Y T E C H N O L O G Y H O L D IN G S S E R V I C E S PAS S PORT ARC HIT EC TURE REPORTING / BI • Offers reports for operational, strategic & analytical needs • History layer providing a full Audit log/trail of all setup and transaction processing. SIMPLE Compliant, security first infrast
Slide 7: MX Connect
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 SMB PAYMENTS Enterprise Operating System Monetizing Merchant Networks and Driving Operational Efficiency 1,250+ 4,300+ Overview MX™ Connect is Priority’s powerful reseller CRM
Slide 8: MX Merchant Suite
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 ™ M E RC HANT S U IT E MERCHCANT ACCOUNTS ANNUAL TOTAL TRANSACTIONS SMB PAYMENTS ANNUAL CARD VOLUME PROCESSED The MX™ Merchant platform offers full-service payment processing and payment-enabled solutions for B2C transactions 240K+ 666M+ $62B+ Ove
Slide 9: Commercial Payments Exchange (CPX)
P R IO R IT Y T E C H N O L O G Y H O L D IN G S C o m m erc ia l Pay m e nts E xc ha nge (C PX) SUPPLIERS ENROLLED ISSUING VOLUME (ANNUAL) ENROLLED B2B PAYMENTS FINANCIAL INSTITUTIONS SUPPORTED CPX provides market-leading A/P automation solutions to corporations, software partners and industry lead
Slide 10: Passport APIs: Priority 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 11: Fourth Quarter 2021 Highlights
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 11 Fourth Quarter 2021 Highlights • Revenue of $144.0 million increased 35.7% from $106.1 million in Q4 2020 • Gross profit of $48.7 million increased 49.8% from $32.5 million in Q4 2020 • Gross profit margin of 33.8% increased 320 basis points from 3
Slide 12: 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 12 Revenue • SMB revenue key growth drivers included: ➢ Bankcard Volume of $13.848 billion increased $2.777 billion, or 25.1%, from $11.071 billion ➢ Bankcard Transactions of 147.1 million increased 26.8 million, or 22.3%, from 120.3 million ➢ Average
Slide 13: 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 13 Revenue • B2B revenue key growth drivers included: ➢ CPX increased 73.3% to $2.6 million from $1.5 million driven by volume and customer growth ➢ Managed Services increased 20.8% to $2.9 million from $2.4 million, driven by program growth • Enterpr
Slide 14: 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 14 Gross Profit • SMB gross profit of $30.5 million increased 0.7% from $30.3 million in Q4 2020 ➢ Specialized Merchant Acquiring (SMA) gross profit of $1.5 million declined $5.8 million from $7.3 million in Q4 2020 due to a temporary pullback from ri
Slide 15: 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 15 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 320 basis points f
Slide 16: 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 16 Other Operating Expenses • Salaries and Benefits of $12.0 million increased 22.4% from $9.8 million in Q4 2020 ➢ Growth driven by Finxera acquisition and headcount growth • SG&A of $6.2 million decreased 4.6% from $6.5 million in Q4 2020 • Deprecia
Slide 17: 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 17 Operating Income • SMB operating income of $10.5 million decreased $2.1 million from $12.6 million in Q4 2020 ➢ Specialized Merchant Acquiring (SMA) gross profit decline $5.8 million ➢ SMB operating income increased $3.7 million, excluding the SMA
Slide 18: 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 18 Adjusted EBITDA Strong Adjusted EBITDA Growth in Q4 and Full Year 2021 2020 Q1 Q2 Q3 Q4 Year Q4 Year Consolidated net income (loss) (GAAP) ($2.7) ($9.5) ($0.5) $14.1 $1.4 ($1.0) $25.7 Add: Interest expense 9.2 7.3 8.2 11.9 36.5 9.4 44.8 Add: Deprec
Slide 19: Other Income (Expense)
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 19 Other Income (Expense) • Other income of $7.8 million in Q4 2021 includes a $7.6 million net gain on disposition of an investment Components of Q4 and Full Year 2021 and 2020 Other Income (Expense) Fourth Quarter YTD 2021 2020 2021 2020 (dollars in
Slide 20: 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 20 Interest Expense • Interest expense of $11.9 million increased $2.5 million from $9.4 million in Q4 2020 ➢ Total outstanding debt of $631.9 million at December 31, 2021 increased $249.9 million from $382.0 million at December 31, 2020 due to acquis
Slide 21: Outstanding Debt Walk
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 21 Outstanding Debt Walk • Total Debt of $631.9 million decreased $16.6 million from $648.5 million at September 30, 2021 ➢ Net Debt of $611.6 million decreased by $19.9 million from $631.5 million at September 30, 2021 Declining Debt Balances Q4 2021
Slide 22: Senior Preferred Stock Walk
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 22 Senior Preferred Stock Walk Senior Preferred Stock of $210.2 million, Net of $23.5 million of Unaccreted Discounts and Issuance Costs • Fourth quarter and full year dividends and accretion is as follows: Q4 Year Dividend: Payment-in-Kind $4.0 $8.7
Slide 23: 2022 Financial Guidance
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 23 2022 Financial Guidance • The Company’s outlook for full year 2022 is follows: ➢ Revenue is forecast to range between $650 to $665 million, a growth rate of 26% to 29%, and ➢ Adjusted EBITDA is forecast to range between $145 to $150 million, a grow
Slide 24: 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 24 ■ Built for the Future of Payments – Large Global Market Opportunity ■ Scalable, Innovative Technology Platform – Low Capital Spending Needs ■ Strong Revenue Growth & S