Repay Holdings ((RPAY)) has held its Q2 earnings call. Read on for the main highlights of the call.
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REPAY Holdings’ Latest Earnings Call: A Mixed Bag of Optimism and Challenges
The recent earnings call for REPAY Holdings reflected a balanced sentiment, highlighting the company’s efforts to reaccelerate growth through revenue improvements, strong adjusted EBITDA margins, and increased free cash flow conversion. However, challenges persist, particularly in the Business Payments segment, where a decline in gross profit and softness in the AR client base were noted. Despite these hurdles, the company remains optimistic about future growth, bolstered by strategic investments and a robust supplier network.
Sequential Improvement in Revenue
REPAY reported a modest 1% year-over-year increase in revenue for Q2 2025, showcasing a sequential improvement in growth. This indicates a positive trajectory, although the growth rate remains modest.
Strong Adjusted EBITDA Margins
The company successfully maintained strong adjusted EBITDA margins of 42% during the quarter. This was achieved while continuing to invest in organic growth opportunities, demonstrating financial discipline and strategic foresight.
Increased Free Cash Flow Conversion
REPAY’s free cash flow conversion improved significantly to 71% in Q2, underscoring the company’s solid cash generation capabilities and financial health.
Expansion in Consumer Payments
The Consumer Payments segment saw significant expansion, with REPAY onboarding several new clients in the financial institution vertical. This included 10 new credit union wins, bringing the total credit union client base to 353.
Share Repurchase Program
During Q2, REPAY actively engaged in its share repurchase program, buying back approximately 5% of its outstanding shares, amounting to $38 million. This move reflects confidence in the company’s long-term value.
New CFO Appointment
REPAY announced the appointment of Robert Houser as the new Chief Financial Officer. Houser brings over a decade of experience in the payment industry, expected to strengthen the company’s financial leadership.
Strong Supplier Network Growth
The supplier network experienced robust growth, expanding by 47% year-over-year to over 440,000 suppliers. This growth enhances REPAY’s B2B capabilities and strategic positioning.
Decline in Business Payments Gross Profit
The Business Payments segment faced challenges, with a 5% year-over-year decrease in gross profit. This decline was attributed to client losses and political media contributions.
AR Client Base Softness
Softness in the AR client base impacted the Business Payments segment’s overall performance, highlighting an area of concern that the company needs to address.
Revenue Growth Challenges
Despite the sequential improvement, the year-over-year revenue growth was limited to 1%, reflecting ongoing challenges in achieving higher growth rates.
Forward-Looking Guidance
REPAY’s guidance for the remainder of 2025 is optimistic, with expectations of high-single digit to low-double digit normalized gross profit growth. The company anticipates an acceleration in free cash flow conversion above 60% by Q4. Strategic focus will remain on organic growth, managing capital expenditures, and potential strategic M&A activities. REPAY is also planning to address its $220 million convertible notes due in 2026 and remains optimistic about growth in its Consumer and Business Payments segments as they move into 2026.
In conclusion, REPAY Holdings’ earnings call presented a mixed outlook, with positive strides in revenue improvement and cash flow conversion, tempered by challenges in the Business Payments segment. The company’s strategic investments and strong supplier network provide a foundation for future growth, with optimistic guidance for the remainder of 2025.