Navigating Contradictions: Insights from the 2025 Q2 Earnings Call on Growth, Strategy, and Mortgage Market Potential

Revenue and Gross Profit Trends:
- REPAY reported revenue of $75.6 million for Q2, increasing 1% year-over-year.
- The company's gross profit declined by 2% year-over-year, impacted by political media contributions and client losses.
- Sequential improvement in performance was attributed to strategic investments in organic growth opportunities and a strong focus on adjusted EBITDA margins.

Consumer Payments Segment Performance:
- REPAY's Consumer Payments gross profit was approximately flat year-over-year, with a 3-point impact from client losses.
- Improved performance was driven by the ramp-up of new client wins and enhancements in integration with software partners like MeridianLink.

Business Payments Segment Growth:
- Business Payments gross profit decreased by 5% year-over-year, lapsing political media contributions and a previous client loss.
- Excluding these impacts, the segment's normalized gross profit increased approximately 1%, driven by focus on accounts payable platform and payment monetization initiatives.

Capital Allocation and Share Buyback:
- REPAY used Q2 to repurchase approximately 5% of its outstanding shares, utilizing $38 million to buy back 7.9 million shares.
- This decision was made to return capital to shareholders while maintaining a strong balance sheet and cash generation capabilities.

Outlook and Strategic Initiatives:
- The company is confident in achieving high-single digit to low-double digit normalized gross profit growth and free cash flow conversion above 60% in Q4.
- This outlook is supported by strategic initiatives like enhancing software partnerships, improving client pipelines, and increasing digital payment penetration across client bases.