Priority Technology Holdings, Inc. · NASDAQ:PRTH
Priority Technology — Q2 2023 Earnings Presentation
20 slides from Priority Technology's earnings presentation, Aug 10, 2023
Slide 1: Supplemental Slides: Q2 2023 Earnings Call
Priority Technology Holdings, Inc. (Nasdaq: PRTH) Supplemental Slides: Q2 2023 Earnings Call August 10, 2023
Slide 2: Disclaimer
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 not limited to, statements about future financia
Slide 3: Key 2nd Quarter 2023 Highlights
Key 2nd Quarter 2023 Highlights Q2 2023 Results Continued STRONG MOMENTUM REVENUE ADJ EBITDA1 NET REVENUE ADJ GROSS PROFIT1 % Growth % Margin +10% +20% $765 - $780 $15 $160 - $165 $5 Guidance Guidance ADJ EBITDA1 OPERATING INCOME Range Range +21% +46% Q2 2023 KEY METRICS $765 $160 $140 $664 $96 $515
Slide 4: Second Quarter 2023 Consolidated Results
Second Quarter 2023 Consolidated Results 10% 20% 330BP 21% $182.3M $67.0M 36.8% $41.1M $166.4M $55.7M 33.5% $33.9M Q2 22 Q2 23 Q2 22 Q2 23 Q2 22 Q2 23 Q2 22 Q2 23 Revenue Adj Gross Profit1 Adj Gross Profit Adjusted EBITDA1 increased 10% to increased 20% to margin1 increased increased 21% to $182.3 m
Slide 5: Year-to-Date Consolidated Results
Year-to-Date Consolidated Results 15% 21% 180BP 23% $367.3M $130.1M 35.4% $78.7M $319.7M $107.4M 33.6% $64.2M Q2 22 Q2 23 Q2 22 Q2 23 Q2 22 Q2 23 Q2 22 Q2 23 Revenue Adj Gross Profit1 Adj Gross Profit Adjusted EBITDA1 increased 15% to increased 21% to margin1 increased increased 23% to $367.3 millio
Slide 6: Priority Unified Commerce Platform
Priority Unified Commerce Platform SMB ACQUIRING B2B PAYMENTS ENTERPRISE PAYMENTS POS Terminals MXM™ POS Suite CPX Plastiq Passport APPLICATIONS CFTPay • Pro Applications Supplier Buyer Program Mgmt CFTConnect • Flex • Retail • Build Funded Funded • Enterprise • Restaurant • Givve • e|tab • PayRight
Slide 7: Plastiq Overview
Plastiq Overview • Leading software platform for B2B payments automation Helps SMBs to pay any invoice with a credit that powers all aspects of accounts payable (“AP”) and card regardless of card acceptance by the suppliers; centralized cash management accounts receivable (“AR”) operations for SMBs
Slide 8: Financial Results
(S Priority FINANCIAL RESULTS
Slide 9: Second Quarter 2023 – SMB (Revenue)
Second Quarter 2023 – SMB (Revenue) 4% Key Revenue Drivers SMB revenue of $147.9 million increased 4% from $142.5 million in Q2 2022 $147.9M ➢ Bankcard $ Volumes of $15.1 billion decreased 2% $142.5M ➢ Average Merchant Count of 257K increased by 4% Q2 22 Q2 23 ➢ New Merchant Boards averaged 4K per m
Slide 10: Second Quarter 2023 – SMB (Profits)
Second Quarter 2023 – SMB (Profits) 1% 100BP 18% 24.9% $14.0M $35.5M $11.5M $35.3M 23.9% Q2 22 Q2 23 Q2 22 Q2 23 Q2 22 Q2 23 Adj Gross Profit1 Adj Gross Profit margin1 Operating Income decreased 1% to $35.3 decreased 100 basis decreased 18% to $11.5 million points to 23.9% million 10 1Adjusted Gross
Slide 11: Second Quarter 2023 – B2B (Revenue)
Second Quarter 2023 – B2B (Revenue) 44% Key Revenue Drivers B2B revenue of $3.0 million decreased 44% from $5.3 million in Q2 2022 $5.3M ➢ Largely driven by Managed Services decrease from $2.8 $3.0M million to $0.2 million due to final wind down of a specific customer program Q2 22 Q2 23 ➢ CPX incre
Slide 12: Second Quarter 2023 – B2B (Profits)
Second Quarter 2023 – B2B (Profits) 26% 1900 103% BP $0.7M 78.8% $3.2M 59.7% $2.3M ($0.0M) Q2 22 Q2 23 Q2 22 Q2 23 Q2 22 Q2 23 Adj Gross Profit1 Adj Gross Profit margin1 Operating Loss of $0.0 decreased 26% to $2.3 increased from 59.7% to million decreased from million 78.8% Operating Income of $0.7
Slide 13: Second Quarter 2023 – Enterprise (Revenue)
Second Quarter 2023 – Enterprise (Revenue) 69% Key Revenue Drivers ENTERPRISE revenue of $31.4 million increased 69% from $18.6 million in Q2 2022 $31.4M ➢ Avg Monthly New Enrollments of 53K increased 89% from $18.6M 28K Q2 22 Q2 23 ➢ Avg Number of Billed Clients increased 44% to 520K from 362K ➢ In
Slide 14: Second Quarter 2023 – Enterprise (Profits)
Second Quarter 2023 – Enterprise (Profits) 72% 200BP 182% $29.3M $16.1M 93.3% $17.0M 91.3% $5.7M Q2 22 Q2 23 Q2 22 Q2 23 Q2 22 Q2 23 Adj Gross Profit1 increased Adj Gross Profit margin1 Operating Income increased 72% to $29.3 million increased 200 basis 182% to $16.1 million points to 93.3% 14 1Adju
Slide 15: Operating Expenses
Operating Expenses 21% 15% 3% $10.8M $19.1M $18.0M $15.8M $9.3M $17.5M Q2 22 Q2 23 Q2 22 Q2 23 Q2 22 Q2 23 Salaries & Benefits SG&A increased 15% to Depreciation & Amortization increased 21% to $19.1 $10.8 million increased 3% to $18.0 million million 15
Slide 16: Adjusted EBITDA Walk
Adjusted EBITDA1 Walk Adjusted EBITDA experienced strong growth in Q2 2023 ➢ Q2 2023 Adjusted EBITDA of $41.1 million increased 21.2% from $33.9 million in Q2 2022 EBITDA Walk (In millions) 2023 2022 Q2 Q2 Consolidated net income (loss) (GAAP) $ (0.6) $ 0.3 Add: Interest expense 17.8 12.3 Add: Depre
Slide 17: Outstanding Debt
Outstanding Debt Total Debt of $612.7 million at end of Q2 2023 decreased from $615.7 million in Q1 2023 ➢ Decrease driven by net $1.0 million Revolver decrease and $2.0 million in Term Loan Repayments ➢ Net Debt of $595.1 million decreased $4.7 million compared to Q1 2023 ➢ Revolver Capacity at the
Slide 18: Senior Redeemable Preferred Stock
Senior Redeemable Preferred Stock Preferred Stock of $240.7 million, Net of $19.5 million of Unaccreted Discounts and Issuance Costs ➢ Second Quarter Dividends and Accretion as follows: 2nd Quarter (dollars in Millions) 2023 In Millions Dividend: Payment in Kind $ 4.46 Cash 6.47 10.93 Accretion 0.83
Slide 19: Appendix
(S Priority APPENDIX
Slide 20: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation The reconciliation of adjusted gross profit to its most comparable GAAP measure is provided below: (in Millions) (in Millions) Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 SMB B2B Enterprise Total SMB B2B Enterprise Total Revenues $ 147.9 $ 3
Priority Technology Holdings — Q2 2023 Earnings Presentation on 6ix