Repay Holdings Corporation - Ordinary Shares (RPAY) 8 Aug 24 2024 Q2 Earnings call transcript

In its recent earnings call, REPAY showcased a strong performance in the second quarter of 2024, highlighting a profitable growth trajectory and strategic initiatives driving long-term growth. With a focus on go-to-market efficiency, client implementations, and product development, REPAY is poised for success in the digital payments landscape.

Gross Profit Growth and Strategic Initiatives

The company reported a gross profit growth of 7% in Q2 2024, with solid performance across both Consumer and Business Payments segments. Consumer Payments, in particular, saw a growth of 7%, driven by the execution of the company's growth algorithm and the addition of new clients. In the Business Payments segment, gross profit grew by 11% year-over-year, underpinned by the ramp of new clients and strategic partnerships.

REPAY's strategic initiatives, including go-to-market efficiency, client implementations, and a focus on product, are key drivers of this growth. The company has made significant progress in the Consumer Payments segment, with the addition of 9 new credit unions, bringing the total to 300 out of the roughly 5,000 credit unions in the U.S. This strategic expansion has led to a healthy sales pipeline for addressing the thousands of financial institutions in the United States.

Financial Highlights and Future Outlook

REPAY's financial performance in Q2 2024 was marked by solid revenue growth and improved adjusted EBITDA margins. The company reported revenue of $74.9 million, up 4% from the prior year, and adjusted EBITDA of $33.7 million, representing a 10% increase. These figures underscore REPAY's ability to drive profitable growth while maintaining financial discipline.

Looking ahead, REPAY is confident in its ability to maintain this momentum. The company expects revenue to be between $214 million and $220 million, gross profit between $245 million and $250 million, and adjusted EBITDA to be between $139 million and $142 million for the year. This outlook is underpinned by the company's strategic initiatives and the ongoing implementation of its growth algorithm.

Market Opportunities and Strategic Partnerships

REPAY's growth strategy is centered on expanding its software partnerships and integrations, with a focus on vertical markets such as healthcare and hospitality. The company's recent partnership with CU Answers, a 100% credit union-owned service organization, is a prime example of this approach. This strategic move has enabled REPAY to release new features and products within CU Answers' platform, enhancing the overall user experience for credit unions and their members.

Challenges and Opportunities Ahead

Despite the strong performance and optimistic outlook, REPAY faces challenges, particularly in the area of supplier acceptance for virtual cards. The company is actively addressing this issue through its real-time vendor enablement process, which aims to drive greater digital adoption and penetration within the supplier base.

In conclusion, REPAY's strong performance in Q2 2024, coupled with its strategic initiatives and partnerships, positions the company well for future growth. With a focus on profitable growth and a clear vision for the digital payments landscape, REPAY is well-positioned to capitalize on the ongoing digital transformation across various industries.