In This Article:
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Revenue: $74.9 million, a 4% increase year over year.
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Gross Profit: Grew by 7% year over year.
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Consumer Payments Gross Profit Growth: 7% in Q2.
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Business Payments Gross Profit Growth: 11% in Q2.
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Adjusted EBITDA: $33.7 million, representing 10% growth in Q2.
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Adjusted EBITDA Margin: Approximately 45% in Q2.
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Adjusted Net Income: $21.8 million, or $0.22 per share.
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Free Cash Flow: $19.3 million, with a 57% conversion rate and 90%+ year-over-year growth.
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Cash on Balance Sheet: Approximately $147 million as of June 30.
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Total Pro Forma Outstanding Debt: $507.5 million with net leverage of approximately 2.7 times.
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2024 Revenue Guidance: Expected to be between $314 million and $320 million.
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2024 Gross Profit Guidance: Expected to be between $245 million and $250 million.
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2024 Adjusted EBITDA Guidance: Expected to be between $139 million and $142 million.
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2024 Free Cash Flow Conversion Target: Approximately 60% for the full year.
Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Repay Holdings Corp (NASDAQ:RPAY) reported a 7% growth in gross profit and a 10% increase in adjusted EBITDA for Q2 2024.
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The company achieved a free cash flow conversion of 57%, representing over 90% growth year over year.
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RPAY added nine new credit unions to its platform, bringing the total to 300, and integrated its payment platform into multiple core credit union and financial institution software systems.
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The Instant Funding product saw a transaction volume increase of approximately 21% year over year.
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RPAY successfully completed a convertible notes offering, addressing half of its 2026 debt maturities and expanding its revolving credit facility, providing financial flexibility for future growth.
Negative Points
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Revenue growth was relatively modest at 4% over the prior year, with seasonality affecting quarter-over-quarter performance.
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There were implementation delays in both the consumer and business payments segments, impacting growth.
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The Instant Funding product experienced a deceleration in growth due to lapping a large client ramp from the previous year.
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The company is facing a competitive environment in the B2B payment space, with challenges in supplier acceptance of digital payments.
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RPAY's growth in the business payments segment is partially dependent on political media contributions, which are subject to timing fluctuations.
Q & A Highlights
Q: On free cash flow conversion, what is the steady state free cash flow conversion you have in mind over time? A: Timothy Murphy, CFO: We feel good about our 60% target for this year and expect mid- to high-teens growth thereafter. This is driven by adjusted EBITDA growth outpacing revenue and a reduction in CapEx. We aim for CapEx to be 10% to 12% of revenue long-term, supporting sustained free cash flow growth.