Priority Technology Holdings, Inc.

Thank you for standing by, and welcome to Priority Technologies' fourth quarter and full year 2021 earnings conference. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. Should you require any further assistance, please press star 0. I would now like to hand the call over to Chris Kettman.

Good morning, and thank you for joining us. With me today are Tom Priori, Chairman and Chief Executive Officer of Priority Technology Holdings, and Mike Volkimer, Chief Financial Officer. Before we provide the prepared remarks, I would like to remind all participants that our comments today will include forward-looking statements, which involve a number of risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. The company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events, or otherwise. We provide a detailed discussion of the various risk factors in our SEC filings, and we encourage you to review these filings. Additionally, we may refer to non-GAAP measures, including but not limited to EBITDA and adjusted EBITDA, during the call. Reconciliations of our non-GAAP performance and liquidity measures to the appropriate GAAP measures can be found in our press release and SEC filings available in the Investors section of our website. With that, I would like to now turn the call over to our Chairman and CEO, Tom Priori.

Thank you, Chris. And thanks to everyone for joining us for our fourth quarter and full year 2021 earnings call. As you saw in our earnings release, we continued our positive momentum with a strong fourth quarter, generating exceptional year-over-year revenue and profitability growth. On a consolidated basis, total revenue for the quarter increased 36% to $144 million. Our top-line strength drove a increase in gross profit to $48.7 million and a roughly 81% improvement in adjusted EBITDA to $32.9 million. Importantly, these results were underpinned by a 320 basis point expansion in gross margin to 33.8% despite the drag from the reduction in our specialized merchant acquiring segment noted in our quarter three earnings call. our strong growth trends have continued through the first quarter as well. For the year, revenue increased 27% to $514.9 million, gross profit grew 22% to $155 million, and consolidated adjusted EBITDA rose 37% to $96.3 million. Mike will go into the segment level detail in our fourth quarter and full year results shortly. Now, prior to Mike's remarks, I'd like to spend our time to provide details on our current positioning in the market and the powerful platform at Priority that is poised to continue to deliver market-leading results. This slide presentation is also available for download on the IR portion of our website and is embedded in the webcast link. During our earnings call earlier last year, we said, 2021 would be regarded as Priority's year of transformation and one in which we realize our mission to emerge as a payments powerhouse with a single platform to collect, store, and send money that delivers differentiated products to our existing verticals. I'm excited to say that our transformation has been achieved. Starting with slide three, let's look at some of the high-level stats of Priority and the strength of its performance through the recent years and how it's poised to perform in 2022. Our native platform efficiently serves the SMB, B2B, and enterprise payment verticals at scale, supporting over 240,000 active merchant accounts, more than 340,000 active bank deposit accounts, and processing total payment volume of over $90 billion. with nearly 88% derived from integrated software products. Over the past three years, Priority has produced annualized growth in revenue of 18% and EBITDA of 31%, rates we expect to exceed in 2022, with revenue between $650 to $664 million and EBITDA of $145 to $150 million. Importantly, driving our strong top-line and bottom-line growth has been accomplished with relatively low CapEx spending of approximately 8% of EBITDA. Our operating efficiency is underscored by an already compelling gross profit margin that today is 62% of adjusted EBITDA and poised to climb. Further, this efficiency pulls through to free cash flow at an impressive 55%, of adjusted EBITDA. These results reflect that priority has been built with intention and built to last. We believe we'll ultimately be rewarded as the market recognizes that we are valued at a meaningful discount to our peers who perform at lower growth trajectories and possess less robust technology solutions. Our high growth and outstanding operating margins are driven by the elegance of our native technology core. As they say, a picture is worth a thousand words. I hope this depiction helps to codify the unique commerce engine that we've constructed that provides a single platform to collect, store, and send money, combining robust payment functionality with banking-as-a-service capability to monetize merchant networks we touch. Upon our priority passport platform, we deliver a full suite of proprietary payment and banking solutions into the SMB and B2B markets and provide enterprise partners the ability to embed payments and banking features into their core software offering or legacy non-digital operating platforms to monetize their payment networks. As evidenced from the number of merchants and deposit accounts we support, as well as the rate of growth we produce. Our architecture is simple, scalable, and secure. It supports all models for merchant acquiring, including payment facilitation, ACH, check, and wire payment methods. It has full commercial card issuing capabilities and will soon support consumer debit card issuing and global payment processing. Importantly, it's all available with a rigorous compliance capability that includes nationwide money transmission licenses. Today, our F&B solutions serve over 1,250 reselling partners that board an average in excess of 4,300 new merchants per month. Over 80% of the revenue in this channel is from integrated or semi-integrated software products. Our flagship product, MX Merchant, currently supports over 240,000 merchant accounts and $62 billion in annual card processing volume. Our fast-growing B2B payment segment is consistently winning accolades and new partner channels on the strength of CPX as the recently announced CISPRO and Premier Healthcare Partnerships demonstrate. These two partners alone represent combined addressable payable spend of $85 billion for us to harvest over the coming years. And our contracted pipeline continues to grow. Simply stated, Priority's B2B business line is poised for even greater acceleration from the 46 financial institutions we support today and the strong adoption trends that have enrolled 75,000 suppliers onto the platform to date. Finally, our enterprise payment segment that provides embedded payments and banking solutions to modernize legacy platforms and accelerate software partner strategies to monetize payments is already supporting over 20 integrations. managing over 340,000 deposit accounts and over half a billion in deposits. This segment is consistently piling up wins as new partners recognize priority as the payments powerhouse with a unique platform built for the future of commerce where they can leverage our technology for payments and banking features without the burden of dealing with payment operations, risk management, and compliance considerations. At this point, I'd like to hand over to Mike who will provide further insight into our performance during the quarter and the year, along with current trends in each business segment.