Repay (RPAY) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 6–6.5% year-over-year to $79.1 million, with gross profit up 9% to $61.6 million and net income of $3.2 million, reversing a prior-year loss.

• Adjusted EBITDA increased 10–10.2% year-over-year to $35.1 million, with free cash flow conversion at 139% and free cash flow up 250% to $48.8 million.

• Strategic focus on go-to-market efficiency, client implementations, and product innovation, with new client wins and expanded software partnerships.

• Major refinancing completed: $287.5–$288 million of 2.875% Convertible Senior Notes due 2029 issued, $220 million of 2026 Notes repurchased, resulting in a $13.1 million gain.

• Business Payments segment saw strong growth, especially from political media and new enterprise clients, with supplier network accelerated to over 330,000.

Financial highlights

• Q3 2024 revenue: $79.1 million (up 6–6.5% year-over-year); gross profit: $61.6 million (up 9%); gross profit margin: 78%.

• Adjusted EBITDA: $35.1 million (up 10–10.2%); adjusted net income: $21.2 million ($0.23 per share); net income: $3.2 million.

• Free cash flow: $48.8 million, with conversion at 139% for Q3; year-to-date free cash flow conversion at 78%.

• Year-to-date revenue: $234.8 million (up 6%); gross profit: $181.7 million (up 8%).

• Net leverage at 2.5x; total liquidity of $419 million as of September 30, 2024; cash and equivalents: $168.7–$169 million.

Outlook and guidance

• Full-year 2024 revenue expected at $314–$320 million; gross profit $245–$250 million; adjusted EBITDA $139–$142 million; adjusted EBITDA margin ~44%.

• Free cash flow conversion outlook raised to ~65% (from 60%), benefiting from a one-time net working capital impact, with partial reversal expected in Q4.

• Management remains focused on profitable growth, reducing capex, and maintaining strong liquidity.

• Q4 expected to benefit from political media contributions; multi-year growth confidence based on sales pipeline.

• Cash flow from operations, cash on hand, and available borrowing capacity expected to fund operations and capex for at least the next twelve months and five years.