Repay Holdings Earnings Call Highlights Growth, Cash Strength

Repay Holdings ((RPAY)) has held its Q4 earnings call. Read on for the main highlights of the call.

Repay Holdings’ latest earnings call struck a cautiously optimistic tone, as management highlighted strengthening underlying growth, robust margins and powerful momentum in Business Payments despite headline noise from a sizable goodwill impairment and higher leverage. Executives argued that operational fixes and product investments are beginning to pay off, supporting confident 2026 guidance even as near-term implementation timing clouds Q1.

Solid Underlying Q4 Growth Despite Noise

Repay reported Q4 2025 normalized revenue up 10% year over year and normalized gross profit up 9%, excluding volatile political media contributions. On a reported basis, revenue reached $78.6 million and gross profit came in at $58.3 million, underscoring that the core business is expanding at a healthy clip even as reported numbers are distorted by one-off factors.

Strong Profitability and Cash Generation

Profitability remained a key bright spot, with Q4 adjusted EBITDA of $32.4 million translating to an impressive roughly 41% margin. Free cash flow of $13.8 million equated to a 43% conversion rate, and management reiterated a goal to push free cash flow conversion above 45% in 2026, signaling confidence in the company’s ability to translate earnings into cash.

Business Payments Delivers Breakout Momentum

Business Payments was the standout growth engine, with normalized Q4 revenue surging about 41% and gross profit jumping roughly 73% year over year. The supplier network expanded to 602,000 suppliers, more than 65% growth as roughly 240,000 were added in 2025, and embedded software partners reached 105, reinforcing a scalable, partner-led growth model.

Consumer Payments Growth and Partner Expansion

Consumer Payments also grew, albeit at a steadier pace, with Q4 revenue up 8% and gross profit up 6% year over year. The company ended 2025 with 189 consumer software partners and more than 294 total partners overall, and highlighted new integrations such as Emotive plus ongoing client implementations as key drivers of future volume capture.

Advancing Product, Technology and AI Capabilities

Management spotlighted continued innovation, including rollout of a dynamic Wallet capability and pilot of Repay Voice, an IVR voice AI solution. The company is also using AI and middleware to shorten integrations and onboarding while lowering costs, and it earned industry recognition from the Strawhecker Group for best gateway uptime and leading authorization performance.

2026 Outlook and Capital Allocation Priorities

Repay guided 2026 revenue to $340–346 million, implying 10–12% reported growth and about 7–9% normalized growth excluding an expected $8–10 million political media boost. The company expects adjusted EBITDA of $136.5–141.5 million at roughly a 40% margin and is prioritizing organic investment, targeted M&A, disciplined tech CapEx, remaining share repurchases and optional debt reduction within its roughly $219 million liquidity and about 2.5x net leverage profile.

Goodwill Impairment Weighs on Reported Earnings

A major talking point was a $138.9 million noncash goodwill impairment related to the Consumer Payments segment that sharply reduced reported net income in Q4. Adjusted net income was $16.8 million, or $0.19 per share, but investors must look past the impairment to assess underlying performance, as management framed the charge as accounting-driven rather than a reflection of current operating trends.

Leverage Rises After Liquidity Actions

The company retired $147 million of zero-percent convertible notes at maturity, using about $37 million of cash and drawing $110 million on its revolver to complete the transaction. Pro forma metrics after these moves included roughly $79 million of cash, about $398 million of total debt, approximately $219 million in total liquidity and pro forma net leverage around 2.5 times, elevating balance sheet risk but still within a manageable range.

Implementation Delays and Q1 Growth Headwinds

Management cautioned that some client implementations slipped from late 2025 to later go-live dates, tempering near-term volume ramp. As a result, Q1 2026 year-over-year growth is expected to run below the full-year pace, as the company works through timing impacts and laps churn that occurred in the second half of 2025 before benefits from new wins fully materialize.

Free Cash Flow Timing and Working Capital Effects

Q4 free cash flow landed slightly below internal expectations, driven primarily by the quarterly timing of net working capital movements rather than weaker fundamentals. Management added that this working capital timing is not expected to reverse in Q1, implying some near-term pressure on reported cash generation despite the company’s higher long-term conversion target.

Political Media and Revenue Seasonality

Political media contributions remain a double-edged sword, adding meaningful but lumpy revenue around election cycles and complicating year-over-year comparisons. For 2026, midterm election-related activity is expected to contribute $8–10 million of revenue, equating to roughly three percentage points of reported growth, but investors will need to adjust for this noise when assessing core momentum.

Operational Fixes Follow a Challenging 2025

Executives acknowledged that 2025 brought operational challenges, prompting executive turnover, process streamlining and broader organizational changes. While these initiatives entail restructuring effort and costs, management argued that they have improved execution, supported recent momentum and positioned the company to capture more durable growth from its expanded partner ecosystem.

Forward-Looking Guidance and Growth Trajectory

Looking ahead, Repay expects 2026 to deliver solid double-digit reported revenue growth with normalized growth in the high single digits and an adjusted EBITDA margin around 40%. Management anticipates softer growth in Q1 followed by a reacceleration to strong double-digit normalized growth in the back half of the year, underpinned by Business Payments scaling, partner-driven implementations and a free cash flow conversion rate exceeding 45% despite roughly $15 million of interest expense.

Repay’s earnings call painted a picture of a business strengthening beneath the surface, with high-margin growth in Business Payments, solid Consumer Payments expansion and improving operational execution. While a large impairment, higher leverage and near-term implementation delays are valid concerns, management’s confident 2026 outlook and focus on cash generation and product innovation will be key markers for investors tracking the stock’s next leg of performance.