Priority Technology Holdings Reports Strong Q2 2025 Earnings

Priority Technology Holdings ((PRTH)) has held its Q2 earnings call. Read on for the main highlights of the call.

Priority Technology Holdings’ recent earnings call showcased a robust performance, marked by significant growth in key financial metrics and strategic initiatives. Despite facing challenges in the SMB segment and increased operating expenses, the company’s highlights, including refinancing and increased revenue guidance, significantly outweighed the lowlights.

Strong Revenue and Profit Growth

Priority Technology Holdings reported impressive financial results for Q2 2025, with a 9% increase in net revenue and a 13% growth in adjusted gross profit. The company also saw a 9% rise in adjusted EBITDA, while adjusted EPS increased by $0.15 to $0.26 year-over-year, underscoring the company’s solid financial footing.

Expansion in Customer Accounts and Transaction Volume

The company ended the second quarter with over 1.6 million total customer accounts, up from 1.3 million in the previous quarter. Additionally, annual transaction volume surged by nearly $5 billion, reaching $140 billion, reflecting the company’s expanding market presence and customer base.

Increased Revenue Guidance

Priority Technology Holdings raised the low end of its full-year revenue expectations to $970 million and narrowed the range to $990 million at the high end. The adjusted EBITDA guidance was refined around the midpoint, with an increase in the low end to $222.5 million, indicating strong confidence in future performance.

B2B and Enterprise Segment Growth

The B2B and Enterprise segments demonstrated remarkable growth, with B2B revenue increasing by over 14% and Enterprise revenue growing by over 20% year-over-year. These segments contributed to a 135 basis point improvement in adjusted gross profit margins, highlighting their strategic importance.

Successful Refinancing

The company successfully refinanced its debt, lowering the interest rate on its upsized term loan by 100 basis points. This strategic move is expected to save nearly $7 million in annual interest expenses, enhancing the company’s financial flexibility.

Challenges in SMB Segment

The SMB segment faced challenges, including attrition of historical residual purchases and lower revenue in specialized acquiring. These factors contributed to a 4% to 5% drag on overall growth rates for the SMB segment, posing a challenge to the company’s growth trajectory.

Increased Operating Expenses

Operating expenses saw a significant increase, with salaries and benefits rising by 22.3% and SG&A expenses up by 24% compared to Q2 2024. These increases were driven by higher stock compensation and increased headcount, impacting the company’s cost structure.

Headwinds from Same-Store Sales

Priority Technology Holdings experienced ongoing headwinds from same-store sales in the SMB segment, a challenge that has persisted for several quarters, affecting the segment’s performance.

Forward-Looking Guidance

Priority Technology Holdings provided an optimistic outlook for the future, with management expressing confidence in achieving 10% to 12.5% top-line revenue growth. The company adjusted its full-year revenue expectations to a range of $970 million to $990 million, with adjusted EBITDA projected between $222.5 million and $227.5 million. The connected commerce platform was highlighted as a key driver of success, emphasizing its role in streamlining financial operations for customers.

In conclusion, Priority Technology Holdings’ earnings call painted a picture of strong financial health and strategic growth. While challenges in the SMB segment and increased operating expenses were noted, the company’s significant achievements in revenue growth, customer expansion, and successful refinancing underscore a positive outlook. Investors and stakeholders can look forward to continued growth and strategic advancements in the coming quarters.