Slide 1: Supplemental Slides: Second 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 : S e c o n d Q u a r t e r 2 0 2 2 E a r n i n g s C a l l August 9, 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: Second 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 Second Quarter 2022 Highlights • Revenue of $166.4 million increased 33.1% from $125.0 million in Q2 2021 • Gross profit of $55.7 million increased 58.2% from $35.2 million in Q2 2021 • Gross profit margin of 33.5% increased 540 basis points from 28
Slide 4: Year-to-Date 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 4 Year-to-Date 2022 Highlights • Revenue of $319.7 million increased 34.2% from $238.3 million in Q2 YTD 2021 • Gross profit of $107.4 million increased 61.3% from $66.6 million in Q2 YTD 2021 • Gross profit margin of 33.6% increased 560 basis points
Slide 5: Priority company overview
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 248k+ Active Merchants $106B+ in LTM 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 va
Slide 6: Priority Commerce APIs (Passport)
P R IO R IT Y T E C H N O L O G Y H O L D IN G S PRIORITY PRIORITY COMMERCE API’s (PASSPORT) A NATIVE PLATFORM OF SHARED SERVICES DEPLOYED AS SIMPLE SET OF API’S TO COLLECT, STORE & SEND MONEY PASSPORT PLATFORM ARCHITECTURE (SHARED MACRO/MICRO SERVICES) C O M M E R C E B A N K I N G D ATA S C I E N
Slide 7: SMB Payments: MX Connect and 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 ™ 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+ 4,500+ 7 80%+ PERCENT OF INTEGRA
Slide 8: 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 B2B Pay m e nts 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 $33B 46 Overvi
Slide 9: Passport APIs Enterprise Payments: 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 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 $15.403 billion increased $1.514 billion, or 10.9%, from $13.889 billion ➢ Bankcard Transactions of 164.9 million increased 13.6 million, or 9.0%, from 150.7 million ➢ Average
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: ➢ CPX increased 56.3% to $2.5 million from $1.6 million driven by new customer additions, volume increases within existing customers ➢ Managed Services increased 16.7% to $2.8 million from $2.4 mil
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 $35.5 million increased 9.2% from $32.5 million in Q2 2021 • B2B gross profit of $3.2 million increased 28.0% from $2.5 million in Q2 2021 • Enterprise gross profit of $17.0 million increased $16.8 million from $0
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 of 170 basis points was driven by mix related margin compression • Enterprise gross profit margin drove the overall margin expansion, significantly more than offsetting the SMB decline Gross Pro
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 $15.8 million increased 51.9% from $10.4 million in Q2 2021 ➢ Driven by a 70% increase in headcount, primarily from the Q3 2021 acquisition of Finxera • SG&A of $9.3 million increased 38.8% from $
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 $14.0 million decreased $0.4 million from $14.4 million in Q2 2021 ➢Increases of $1.7 million in Salaries, $1.2 million in SG&A and $0.6 million in Depreciation and Amortization o Headcount & SG&A increase
Slide 16: Adjusted EBITDA and EBITDA Walk
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 2022 2021 Q2 Q2 Consolidated net income (loss) (GAAP) 0.3$ (9.5)$ Add: Interest expense 12.3 7.3 Add: Depreciation and amortization 17.5 10.7 Add: Income tax expense (benefit) 0.5 1.5 EBITDA (non-GAAP) 30.6 10.0 Further adjusted by: Add: Non-cash stoc
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 $12.3 million increased $5.0 million from $7.3 million in Q2 2021 driven by higher comparative debt balances ➢ Total outstanding debt of $628.3 million at June 30, 2022 increased $298.3 million from $330.0 mil
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 • Net Debt of $606.1 million declined $5.7 million from $611.8 million at March 31, 2022 • Total Debt of $628.3 million at June 30, 2022 included a $12.0 million temporary five day increase in Revolver borrowings during the last we
Slide 19: 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 19 Senior Preferred Stock Walk Senior Preferred Stock of $220.0 million, Net of $21.9 million of Unaccreted Discounts and Issuance Costs • Second quarter dividends and accretion is as follows: (dollars in millions) 2nd Quarter (dollars in Thousands) 2
Slide 20: Delivering Unified Commerce Solutions
P R IO R IT Y T E C H N O L O G Y H O L D IN G S DELIVERING UNIFIED COMMERCE SOLUTIONS P R IO R IT Y T E C H N O L O G Y H O L D IN G S 20 ■ Priority is a Payments Powerhouse AND Banking Business that Offers Clear Advantages for Businesses to Accelerate Cash Flow ■ Scalable, Innovative Technology Pl