Repay (RPAY) Q2 2024 earnings summary

Executive summary

• Achieved profitable growth in Q2 2024, with revenue up 4–4.4% to $74.9 million, gross profit up 7%, and Adjusted EBITDA up 10–10.5%, driven by both existing and new clients and secular tailwinds in digital payments.

• Free cash flow conversion reached 57%, up 93% year-over-year, with net loss narrowing to $4.1–$4.2 million.

• Strategic focus on go-to-market efficiency, client implementations, product innovation, and cost savings initiatives continues to drive results.

• Liquidity remains strong with $147 million in cash and $185 million in undrawn credit as of June 30, 2024.

• Management reiterated 2024 outlook, expecting accelerated free cash flow conversion and ongoing investment in growth.

Financial highlights

• Q2 2024 revenue was $74.9 million, up 4–4.4% year-over-year; gross profit was $58.6 million, up 7%, with a margin of 78%.

• Adjusted EBITDA reached $33.7 million, up 10–10.5% year-over-year, with a margin of 45%.

• Adjusted net income was $21.8 million ($0.22 per share), up 11.5–12% year-over-year.

• Free cash flow for Q2 was $19.3 million, up 90–93% year-over-year; free cash flow conversion reached 57%.

• Net loss attributable to the company improved to $4.1–$4.2 million from $5.3 million in Q2 2023.

Outlook and guidance

• 2024 revenue expected between $314 million and $320 million; gross profit between $245 million and $250 million; Adjusted EBITDA between $139 million and $142 million.

• Adjusted EBITDA margins expected around 44%, with EBITDA growth outpacing revenue and gross profit.

• Free cash flow conversion target of ~60% for the year, with Q3 expected to exceed this level.

• Management expects cash flow from operations, cash on hand, and available credit to be sufficient for operations and debt service for the next twelve months and five years.

• Focus remains on profitable growth and reduced capex to drive higher free cash flow.