REPAY Reports First Quarter 2021 Financial Results and Updated 2021 Guidance
Repay Holdings Corporation (NASDAQ: RPAY) reported a strong first quarter for 2021, with card payment volume rising 20% to $4.6 billion and total revenue increasing 20% to $47.5 million. Gross profit grew 22% to $35 million. However, the company faced a net loss of $18 million, compared to a $13.2 million loss a year prior. Adjusted EBITDA improved by 18% to $20.5 million. The company announced an acquisition of BillingTree for $503 million. For 2021, REPAY anticipates card payment volume between $19.9 billion and $20.4 billion and total revenue of $210 million to $220 million.
- Card payment volume increased by 20% to $4.6 billion.
- Total revenue rose by 20% to $47.5 million.
- Gross profit climbed 22% to $35 million.
- Adjusted EBITDA up 18% to $20.5 million.
- Acquisition of BillingTree for $503 million expected to enhance growth.
- Net loss widened to $18 million from $13.2 million year-over-year.
Repay Holdings Corporation (NASDAQ: RPAY) (“REPAY” or the “Company”), a leading provider of vertically-integrated payment solutions, today reported financial results for its first quarter ended March 31, 2021.
“We are pleased with our results in the first quarter, with card payment volume and gross profit growth of
Three Months Ended March 31, 2021 Highlights
-
Card payment volume was
$4.6 billion , an increase of20% over the first quarter of 2020 -
Total revenue was
$47.5 million , a20% increase over the first quarter of 2020 -
Gross profit was
$35.0 million , an increase of22% over the first quarter of 2020 -
Net loss was (
$18.0) million , as compared to a net loss of ($13.2) million in the first quarter of 2020 -
Adjusted EBITDA was
$20.5 million , an increase of18% over the first quarter of 2020 -
Adjusted Net Income was
$15.1 million , an increase of22% over the first quarter of 2020 -
Adjusted Net Income per share was
$0.18
Gross profit represents total revenue less cost of services. Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share are non-GAAP financial measures. See “Non-GAAP Financial Measures” and the reconciliations of Adjusted EBITDA and Adjusted Net Income to their most comparable GAAP measures provided below for additional information.
Subsequent Events
On May 10, 2021, the Company announced the acquisition of BillingTree for approximately
On April 12, 2021 the Securities and Exchange Commission issued guidance (the “Statement”) regarding the accounting and reporting of warrants by special purpose acquisition companies. On April 30, 2021, the Company announced that, following a review of the Statement and its accounting practices, that it is restating certain of its previously issued financial statements included in the Company’s Form 10-K for the year ended December 31, 2020 and the quarterly periods included therein. There was no impact from the restatement to the Company’s financial results for the quarter ended March 31, 2021, as no warrants were outstanding after July 27, 2020. The financial results for the quarter ended March 31, 2020 reported in this communication reflect the reclassification of warrants as liabilities for the reporting period.
2021 Outlook Update
REPAY expects the following financial results for full year 2021, which reflects the assumption that the BillingTree acquisition closes by the end of the second quarter 2021, and replaces previously provided guidance.
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Full Year 2021 Outlook |
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Updated Guidance |
Card Payment Volume |
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Total Revenue |
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Gross Profit |
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Adjusted EBITDA |
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This range assumes no further unforeseen COVID-related impacts, which could create substantial economic duress in 2021. REPAY does not provide quantitative reconciliation of forward-looking, non-GAAP financial measures, such as forecasted 2021 Adjusted EBITDA, to the most directly comparable GAAP financial measure, because it is difficult to reliably predict or estimate the relevant components without unreasonable effort due to future uncertainties that may potentially have significant impact on such calculations, and providing them may imply a degree of precision that would be confusing or potentially misleading.
Conference Call
REPAY will host a conference call to discuss first quarter 2021 financial results today at 5:00 pm ET. Hosting the call will be John Morris, CEO, and Tim Murphy, CFO. The call will be webcast live from REPAY’s investor relations website at https://investors.repay.com/investor-relations. The conference call can also be accessed live over the phone by dialing (877) 407-3982, or for international callers (201) 493-6780. A replay will be available one hour after the call and can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers; the conference ID is 13718958. The replay will be available at https://investors.repay.com/investor-relations.
Non-GAAP Financial Measures
This communication includes certain non-GAAP financial measures that REPAY’s management uses to evaluate its operating business, measure its performance and make strategic decisions. Adjusted EBITDA is a non-GAAP financial measure that represents net income prior to interest expense, tax expense, depreciation and amortization, as adjusted to add back certain non-cash and non-recurring charges, such as loss on extinguishment of debt, loss on termination of interest rate hedge, non-cash change in fair value of contingent consideration, non-cash change in fair value of assets and liabilities, non-cash change in fair value of warrant liabilities, share-based compensation charges, transaction expenses, employee recruiting costs, other taxes, restructuring and other strategic initiative costs and other non-recurring charges. Adjusted Net Income is a non-GAAP financial measure that represents net income prior to amortization of acquisition-related intangibles, as adjusted to add back certain non-cash and non-recurring charges, such as loss on extinguishment of debt, loss on termination of interest rate hedge, non-cash change in fair value of contingent consideration, non-cash change in fair value of assets and liabilities, non-cash change in fair value of warrant liabilities, share-based compensation expense, transaction expenses, employee recruiting costs, restructuring and strategic initiative costs and other non-recurring charges, non-cash interest expense, net of tax effect associated with these adjustments. Adjusted Net Income is adjusted to exclude amortization of all acquisition-related intangibles as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Management believes that the adjustment of acquisition-related intangible amortization supplements GAAP financial measures because it allows for greater comparability of operating performance. Although REPAY excludes amortization from acquisition-related intangibles from its non-GAAP expenses, management believes that it is important for investors to understand that such intangibles were recorded as part of purchase accounting and contribute to revenue generation. Adjusted Net Income per share is a non-GAAP financial measure that represents Adjusted Net Income divided by the weighted average number of shares of Class A common stock outstanding (on as-converted basis) for the three months ended March 31, 2021 and the three months ended March 31, 2020 (in each case, excluding shares subject to forfeiture). REPAY believes that Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share provide useful information to investors and others in understanding and evaluating its operating results in the same manner as management. However, Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income, operating profit, or any other operating performance measure calculated in accordance with GAAP. Using these non-GAAP financial measures to analyze REPAY’s business has material limitations because the calculations are based on the subjective determination of management regarding the nature and classification of events and circumstances that investors may find significant. In addition, although other companies in REPAY’s industry may report measures titled Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share, or similar measures, such non-GAAP financial measures may be calculated differently from how REPAY calculates its non-GAAP financial measures, which reduces their overall usefulness as comparative measures. Because of these limitations, you should consider Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share alongside other financial performance measures, including net income and REPAY’s other financial results presented in accordance with GAAP.
Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, REPAY’s plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “guidance,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, REPAY’s updated 2021 outlook, anticipated benefits from, and the expected timing for completion of, the BillingTree acquisition, the impact of the restatement, the effects of the COVID-19 pandemic, expected demand on REPAY’s product offering, including further implementation of electronic payment options and statements regarding REPAY’s market and growth opportunities, and our business strategy and the plans and objectives of management for future operations. Such forward-looking statements are based upon the current beliefs and expectations of REPAY’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control.
In addition to factors disclosed in REPAY’s reports filed with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2020, as amended, and those identified elsewhere in this communication, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: exposure to economic conditions and political risk affecting the consumer loan market and consumer and commercial spending; the impacts of the ongoing COVID-19 coronavirus pandemic and the actions taken to control or mitigate its spread (which impacts are highly uncertain and cannot be reasonably estimated or predicted at this time); a delay or failure to complete, integrate and/or realize the benefits of the BillingTree acquisition; a delay or failure to integrate and/or realize the benefits of the Company’s other recent acquisitions; changes in the payment processing market in which REPAY competes, including with respect to its competitive landscape, technology evolution or regulatory changes; changes in the vertical markets that REPAY targets, including the regulatory environment applicable to REPAY’s customers; risks relating to REPAY’s relationships within the payment ecosystem; risk that REPAY may not be able to execute its growth strategies, including identifying and executing acquisitions; risks relating to data security; changes in accounting policies applicable to REPAY; and the risk that REPAY may not be able to develop and maintain effective internal controls.
Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance. All information set forth herein speaks only as of the date hereof in the case of information about REPAY or the date of such information in the case of information from persons other than REPAY, and REPAY disclaims any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this communication. Forecasts and estimates regarding REPAY’s industry and end markets are based on sources it believes to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part. Pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.
About REPAY
REPAY provides integrated payment processing solutions to verticals that have specific transaction processing needs. REPAY’s proprietary, integrated payment technology platform reduces the complexity of electronic payments for merchants, while enhancing the overall experience for consumers and businesses.
Consolidated Statement of Operations |
||||
|
Three Months ended March 31 |
|||
(in $ thousands) |
2021 |
2020 |
||
Revenue |
|
|
||
Operating expenses |
|
|
||
Other costs of services |
|
|
||
Selling, general and administrative |
23,393 |
18,166 |
||
Depreciation and amortization |
17,793 |
13,904 |
||
Change in fair value of contingent consideration |
2,649 |
— |
||
Total operating expenses |
|
|
||
Income (loss) from operations |
|
|
||
Interest expenses |
(1,183) |
(3,518) |
||
Loss on extinguishment of debt |
(5,941) |
— |
||
Change in fair value of warrant liabilities |
— |
(6,898) |
||
Change in fair value of tax receivable liability |
1,043 |
(542) |
||
Other income |
28 |
39 |
||
Other loss |
(9,080) |
— |
||
Total other (expenses) income |
(15,133) |
(10,919) |
||
Income (loss) before income tax expense |
(23,923) |
(14,298) |
||
Income tax benefit |
5,942 |
1,116 |
||
Net income (loss) |
|
|
||
Net income (loss) attributable to non-controlling interest |
(2,187) |
(2,852) |
||
Net income (loss) attributable to the Company |
|
|
||
Weighted-average shares of Class A common stock outstanding - basic and diluted |
76,602,766 |
37,624,829 |
||
Loss per Class A share - basic and diluted |
( |
( |
||
Consolidated Balance Sheets |
||||
(in $ thousands) |
March 31, 2021
|
|
|
December 31,
|
Assets |
|
|
|
|
Cash and cash equivalents |
|
|
|
|
Accounts receivable |
23,897 |
|
|
21,311 |
Prepaid expenses and other |
6,078 |
|
|
6,925 |
Total current assets |
420,897 |
|
|
119,366 |
|
|
|
|
|
Property, plant and equipment, net |
1,980 |
|
|
1,628 |
Restricted cash |
19,525 |
|
|
15,375 |
Customer relationships, net of amortization |
272,923 |
|
|
280,887 |
Software, net of amortization |
59,987 |
|
|
64,435 |
Other intangible assets, net of amortization |
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