Usio 2025 Q2 Earnings Mixed Performance as Net Loss Deteriorates 585.7%

Usio reported a mixed second-quarter performance with a slight revenue decline and a significant net loss. While ACH and complementary services drove revenue growth, prepaid card services fell sharply, impacting overall results. Management revised revenue guidance for 2025 to 5–12% growth due to implementation delays.

Revenue
Usio’s total revenue in Q2 2025 declined by 0.6% to $19.96 million compared to $20.08 million in the same period last year. ACH and complementary services emerged as a strong performer, generating $5.19 million in revenue, a notable uplift driven by ACH volume growth. Credit card services also contributed significantly with $7.05 million, reflecting ongoing expansion in payment processing. Meanwhile, Output Solutions accounted for $4.64 million in revenue, supported by increased document delivery activity. Prepaid card services faced a 26% drop, contributing $2.73 million, primarily due to a client losing a key downstream customer. Interest income was reported across segments, with ACH and complementary services earning $176,518, prepaid card services earning $134,823, and Output Solutions earning $43,084.

Earnings/Net Income
Usio’s net loss widened to $366,654 in Q2 2025, representing a 585.7% deterioration compared to a net income of $75,492 in Q2 2024. Despite a stable EPS of -$0.01, the significant shift to a net loss underscores the challenges faced in the quarter, especially in the prepaid card segment and higher SG&A expenses. The performance indicates a difficult operating environment despite growth in high-margin services.

Price Action
The stock price of Usio edged up 0.27% during the latest trading day, climbed 7.80% during the most recent full trading week, and surged 18.79% month-to-date. The positive near-term momentum stands in contrast to the broader earnings performance.

Post-Earnings Price Action Review
The historical strategy of purchasing USIO shares following a quarter of revenue growth and holding for 30 days has underperformed significantly. Over the past three years, this approach yielded a return of -26.73%, far below the 48.58% benchmark. The negative compound annual growth rate (CAGR) of -10.18%, paired with a Sharpe ratio of -0.14, highlights the strategy’s high-risk, low-reward profile and its susceptibility to volatility.

CEO Commentary
Louis Hoch, President and CEO, emphasized strong second-quarter performance driven by a 15% increase in total payment dollar processing. ACH growth led the way with 19% in dollar terms and 33% in transactions. Hoch pointed to expanded margins, positive Adjusted EBITDA of $0.5 million, and strategic investments like the Usio One go-to-market strategy and new technologies such as wearables and biometric payments. He also expressed optimism about future growth from new program implementations and an improved organizational structure.

Guidance
Usio expects stronger performance in the second half of 2025, driven by new client implementations and a rebound in existing customer activity, especially in the credit card business. The company anticipates increased ACH and complementary services revenue, improved cash flow, and a stronger cash position. SG&A expenses are expected to grow only slightly year-over-year, with lower expenses in the second half due to reduced one-time costs. Usio also highlighted a new enterprise card client with potential to generate over $100 million in annual recurring processing volume.

Additional News
Usio announced a share repurchase of $700,000 year-to-date and maintained $7.5 million in cash. The company’s strategic focus on growth initiatives and capital deployment includes opportunities in the merger and acquisition market, aiming to accelerate expansion. The company also highlighted the addition of a new enterprise card client with the potential to drive over $100 million in annual recurring processing volume. Despite these positive developments, implementation delays with two large national accounts led to a revised revenue growth guidance of 5–12% for 2025. Usio remains committed to delivering positive adjusted EBITDA for the remainder of the year and is optimistic about its growth trajectory.