Priority Technology Reports Record Q2 Results and Raises Guidance

Priority Technology Holdings, Inc. (PRTH), a prominent player in payment processing and banking solutions, has reported outstanding financial results for the second quarter of 2024. The company’s revenue reached $219.9 million, reflecting a 21% increase compared to the same period last year. This growth was largely fueled by robust performances in the SMB acquiring, B2B Payables, and Enterprise Payments sectors.

With over one million customer accounts and nearly $125 billion in annual transaction volume, Priority Technology’s unified commerce platform is gaining significant traction in the market. The company has revised its full-year revenue forecast to between $875 million and $883 million and has raised its adjusted EBITDA prediction to a range of $196 million to $200 million.

### Key Takeaways
– Priority Technology experienced a 21% year-over-year revenue increase, hitting $219.9 million in Q2.
– The company’s unified commerce platform is successfully attracting a growing customer base.
– With approximately $125 billion in annual transaction volume and over one million customer accounts, the company is well-positioned.
– The revenue guidance for the full year has been adjusted to $875 million to $883 million, with adjusted EBITDA anticipated between $196 million and $200 million.
– A recapitalization effort in May is expected to lower preferred dividends in the third quarter and beyond.

### Company Outlook
– Priority Technology anticipates higher operating costs in the latter half of the year, which will be related to compliance efforts and cloud platform migrations.
– The Enterprise segment is expected to perform well, potentially thriving during economic downturns.
– Interest rates will impact the balance sheet, benefiting permissible investments while also increasing interest costs on debt and preferred stock dividends.

### Bearish Highlights
– Operating expenses are expected to rise due to compliance and technology migration.
– An economic slowdown may negatively affect the SMB segment; however, the company aims to counter this with strong retention and market share growth.

### Bullish Highlights
– The adjusted EBITDA outlook has been raised following a record quarter.
– The unified commerce platform shows promising growth in processing volumes, point-of-sale suite downloads, and banking solutions.

### Misses
– No specific misses or shortfalls were noted during the earnings call.

### Q&A Highlights
– CFO Tim O’Leary confirmed that the recapitalization’s full impact would be evident in Q3, with preferred dividends of $4.8 million.
– O’Leary noted that the economic slowdown could have a lesser impact on the SMB segment due to the company’s hedging strategies.
– The company aims to further reduce leverage by year’s end following a successful quarter of deleveraging.

Priority Technology Holdings’ earnings call showcased strong financial performance alongside optimistic projections for future growth. Initiatives such as recapitalization and the development of the unified commerce platform are expected to support the company’s trajectory. With a solid balance sheet and a cautious approach to capital management, Priority Technology is strategically positioned to navigate market fluctuations while delivering value to customers and shareholders.