Priority Technology Holdings, Inc.

Good day and welcome to the Priority Technology first quarter 2024 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, today's event is being recorded. I would now like to turn the conference over to Chris Kettman. Please go ahead.

Good morning, and thank you for joining us. With me today are Tom Priory, Chairman and Chief Executive Officer of Priority Technology Holdings, and Tim O'Leary, Chief Financial Officer. Before giving our 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 turn the call over to our Chairman and CEO, Tom Priori.

Thank you, Chris. And thanks to everyone for joining us for our first quarter 2024 earnings call. I'd like to start today by highlighting the positive trends we continue to see at priority And then Tim and I will provide an update on important developments within each segment and the broader enterprise. As you saw in this morning's press release, our unwavering focus on delivering the best products and service in the industry drove record first quarter results that placed priority on a strong financial trajectory for 2024. Maintaining the momentum we established throughout 2023, we delivered solid results in SMB acquiring, B2B payables, and enterprise payments in the first quarter. Our unified commerce vision continues to resonate with our customers, combining payments and banking functionality in a single platform, accelerated by the strength of our diverse business lines that were positioned to benefit from higher interest rates and to perform in a variety of macroeconomic environments, including the one we're experiencing today. Total customer accounts operating on our commerce platform now exceed 1 million. as we processed over $120 billion in annual transaction volume during the prior 12 months, while administrating $980 million in average daily deposits as of the end of the quarter. Slide four highlights our consistent financial performance during the first quarter. Revenue of $205.7 million increased over 11% from the prior year, and this led to a 21% increase in adjusted gross profit to 76.4 million and a 23% improvement in adjusted EBITDA to 46.3 million. Adjusted gross profit margin of 37.1% increased 300 basis points from the prior year quarter, highlighting the strong operating leverage of our purpose-built platform. As you can see from our Q1 results and the reiteration of our full-year guidance, we continue to expect that the robust growth and margin trends in our business channels will deliver full-year revenue of $875 to $890 million, an increase of approximately 16% to 18% over 2023, and generate full-year adjusted EBITDA of $193 to $198 million, a 15% to 18% increase over 2023. Our growing partner base continues to see great value in our product and technology offering, and our diverse sales channel performance remains consistent. For those of you who are new to the company, slide five highlights the market orientation of our proprietary unified commerce platform that's purpose-built to collect, store, lend, and send money, combining elegant payment and banking functionality to monetize the commerce networks we serve. Our customers in current market conditions continue to reinforce our belief that systems combining both features of payments and banking to distribute funds in multi-party environments will be critical as businesses put greater demands on software and payment solution providers to accelerate cash flow and optimize working capital. We are committed to meeting our customers' expectations by refining the experience for our partners to make working with priority seamless and simple. Our performance illustrates that partners consistently choose the unified commerce applications in acquiring payables and banking that best fit their businesses to accelerate cash flow and optimize their working capital. We're laser focused on the continued innovation of our SaaS payments and banking suite of services and accelerated commerce engine and are eager to meet the evolving needs of our growing portfolio of customers and enterprise partners. At this point, I'd like to hand it over to Tim, who will provide further insights into our segment-level performance during the quarter, along with current trends in each that factored into our strong guidance for the full year 2024.