Slide 1: Supplemental Slides: Third 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 : T h i r d Q u a r t e r 2 0 2 2 E a r n i n g s C a l l November 10, 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: Forward-Looking Statements and Non-GAAP Measures
P R IO R IT Y T E C H N O L O G Y H O L D IN G S DISCLAIMER 2 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 a
Slide 3: Third 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 Third Quarter 2022 Highlights • Revenue of $166.4 million increased 25.6% from $132.5 million in Q3 2021 • Gross profit1 of $58.5 million increased 47.4% from $39.7 million in Q3 2021 • Gross profit margin1 of 35.1% increased 510 basis points from 3
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 $486.1 million increased 31.1% from $370.9 million in Q3 YTD 2021 • Gross profit1 of $165.9 million increased 56.1% from $106.3 million in Q3 YTD 2021 • Gross profit margin1 of 34.1% increased 540 basis poin
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 254k+ Active Merchants $110B+ in LTM Total 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 valu
Slide 6: Priority Commerce APIs (Passport) Native Platform
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 and Enterprise Payments 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 Drivers: 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 Drivers • SMB revenue key growth drivers included: ➢ Bankcard Volume of $15.098 billion increased $1.268 billion, or 9.2%, from $13.830 billion ➢ Bankcard Transactions of 165.8 million increased 12.7 million, or 8.3%, from 153.1 million ➢ A
Slide 11: Revenue Drivers: 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 Drivers • B2B revenue key growth drivers included: ➢ CPX increased 68.8% to $2.7 million from $1.6 million driven by new customer additions and volume increases within existing customers ➢ Managed Services decreased 15.2% to $2.2 million fr
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 1 • SMB gross profit of $35.5 million increased 3.3% from $34.3 million in Q3 2021 • B2B gross profit of $3.0 million increased 24.6% from $2.4 million in Q3 2021 • Enterprise gross profit of $20.0 million increased $17.0 million from
Slide 13: Gross Profit Margin Analysis
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 1 Margin Analysis • SMB gross profit margin decline of 220 bps was driven by mix related margin compression • B2B gross profit margin expanded by 410 bps due to increased CPX revenue and operating leverage • Enterprise gross profit mar
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 $16.4 million increased 37.8% from $11.9 million in Q3 2021 ➢ Primarily driven by acquisition related headcount increases combined with continued investments in the team • SG&A of $10.2 million in
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 $13.4 million decreased $1.2 million from $14.6 million in Q3 2021 ➢Increases of $1.7 million in Salaries and $0.7 million in SG&A o Headcount & SG&A increases are attributable to growth initiatives • B2B
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 Q3 • Q3 2022 Adjusted EBITDA of $35.1 million increased 48.7% from $23.6 million in Q3 2021 (dollars in millions) 2022 2021 Q3 Q3 Consolidated net income (loss) (GAAP) (0.8)$ (0.5)$ Add: Interest exp
Slide 17: Outstanding Debt and Debt Repayments
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 17 Outstanding Debt Debt Repayments (dollars in millions) • Total Debt of $618.3 million at end of Q3 2022 includes a $10.0 million reduction since Q2 2022 • Decrease driven by $8.5 million net Revolver repayments and $1.55 million amortization • Net
Slide 18: 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 18 Senior Preferred Stock Walk Senior Preferred Stock of $225.1 million, Net of $21.9 million of Unaccreted Discounts and Issuance Costs • Third quarter dividends and accretion is as follows: (dollars in millions) Q3 (dollars in Thousands) 2022 Divide
Slide 19: Embedded Finance Opportunities
P R IO R IT Y T E C H N O L O G Y H O L D IN G S Embedded Finance Opportunit ies P R IO R IT Y T E C H N O L O G Y H O L D IN G S 19 ■ The market is large and growing. We estimate the 2021 US market for platforms and enablers at $22 billion in total revenue across payments, lending, banking, and car
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
Slide 21: Appendix
P R IO R IT Y T E C H N O L O G Y H O L D IN G S APPENDIX 21
Slide 22: Gross Profit (non-GAAP) Reconciliation
P R IO R IT Y T E C H N O L O G Y H O L D IN G S 22 Gross Profit (non-GAAP) reconcil iation Appendix 1 The reconciliation of gross profit (non-GAAP) to its most comparable GAAP measure is provided below: 2022 2021 Revenues $ 166.4 $ 132.5 Costs of services (excluding depreciation and amortization) (