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• Revenue: $227 million, increased by more than 20% from the prior year.

• Adjusted Gross Profit: $86 million, with a margin of 37.9%, decreased by 40 basis points from the prior year quarter.

• Adjusted EBITDA: $54.6 million, a 22% improvement from the prior year.

• Total Customer Accounts: Over 1.1 million operating on the commerce platform.

• Annual Transaction Volume: Nearly $127 billion processed during the prior 12 months.

• Average Daily Account Balances: Over $1.1 billion during the quarter.

• SMB Revenue: $158.8 million, a 13.2% increase from the prior year.

• Bank Card Dollar Volume in SMB: $15.5 billion, increased almost 10% from the prior year.

• B2B Revenue: $22.1 million, a 58.3% increase from the prior year.

• Enterprise Revenue: $47.1 million, a 33.9% increase from the prior year.

• Interest Expense: $23.2 million for the quarter, increased by $3.2 million from the prior year.

• Total Debt: $832.9 million at the end of Q3.

• Net Debt: $791.8 million at the end of Q3.

• Preferred Stock: $105.1 million at September 30th.

• Net Income Available to Common Shareholders: 7 cents per share.

• Full Year Revenue Guidance: $875 to $883 million, an increase of approximately 16% over 2023.

• Full Year Adjusted EBITDA Guidance: $200 to $204 million, an 18 to 21% increase over 2023.

• Warning! GuruFocus has detected 9 Warning Signs with PRTH.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Priority Technology Holdings Inc (NASDAQ:PRTH) reported record financial results for the third quarter of 2024, driven by the strength of their unified commerce platform.

• The company experienced over 20% revenue growth year-over-year, reaching $227 million, with a similar increase in adjusted gross profit.

• The B2B segment saw a significant revenue increase of 58.3%, largely due to the acquisition of Plastic, which contributed positively to the company's performance.

• The enterprise segment experienced a 33.9% increase in revenue, supported by favorable trends in new enrollments and an increase in passport program managers.

• Priority Technology Holdings Inc (NASDAQ:PRTH) raised its full-year adjusted EBITDA guidance to a range of $200 million to $204 million, reflecting strong year-to-date performance and improved operating margins.

Negative Points

• Adjusted gross profit margins decreased by 40 basis points year-over-year, primarily due to the acquisition of Plastic.

• The SMB segment's gross margins declined from 24.6% to 22.4% due to higher credit losses and a mix shift with top resellers.

• Interest expense increased by $3.2 million compared to the previous year, attributed to acquisition-related debt and recapitalization efforts.

• The company faces potential headwinds from increased compliance and cloud migration expenses, which could impact adjusted EBITDA.

• The guidance for Q4 suggests only a slight sequential revenue increase, indicating potential conservatism or challenges in maintaining growth momentum.