Priority Technology Holdings, Inc.

Good morning and welcome to the Priority Technology fourth 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 touch-tone phone. To withdraw your question, please press star then two. Please note this 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 fourth quarter 2024 earnings call. I'd like to begin today's call by discussing the culmination of our consistently strong full-year performance that informs our aggregate revenue and adjusted EBITDA guidance for 2025. I will then highlight our excellent Q4 results before handing it over to Tim, who will provide segment-level performance and key trends and developments within each of our business segments and priority overall. In this morning's press release, we're excited to report the strongest revenue performance in our history, both for the fourth quarter and the full year. Summarized on slide three, Priority had an outstanding year by every key financial metric, growing net revenue by 16%, generating adjusted gross profit and EBITDA growth of 19% and 21%, respectively, and improving operating income by 19%, for the full year 2024. We ended the year with approximately 1.2 million total customer accounts operating on our commerce platform, processing over 130 billion in annual transaction volume during the prior 12 months, while administrating over 1.2 billion in average daily account balances. Tim will walk through the full year 2025 guidance specifics later in the call, But I can reflect that the value of our diverse partners and customers see in our unified commerce platform and elegant product solutions provides confidence that will sustain the momentum in our acquiring payables and enterprise segments. We anticipate comfortably achieving 10 to 14% top line revenue growth to a range of $965 million to $1 billion. and generating 8% to 13% adjusted EBITDA growth to 220 to 230 million in 2025, despite likely headwinds related to lower interest rates, a somewhat murky macroeconomic environment, and the migration of some technology resources from a CapEx to OpEx treatment. Our unified commerce platform that streamlines collecting, storing, lending and sending money with solutions for acquiring payables and banking and creates revenue and operational success for businesses continues to resonate with our partners and customers, which is reflected in our organic growth performance. Turning our attention to our Q4 results noted on slide four, revenue of $227.1 million increased by more than 14% from the prior year. This led to a 15% increase in adjusted gross profit to $83.9 million and a 16% improvement in adjusted EBITDA to $51.7 million. Adjusted gross profit margin of 37% increased 40 basis points from the prior year's quarter. Having now sunset the impact of the plastic acquisition during Q3 of 2024 on our financials, Our Q4 performance represents purely organic growth. The strong closing quarter contributed to the previously noted 16% revenue growth to $879.7 million, a 19% adjusted gross profit increase to $328.1 million, and a 21% improvement in adjusted EBITDA to $204.3 million on the strength of a 90 basis point expansion in adjusted gross profit margin to 37.3% as highlighted on slide five. For those of you who are new to the company, slide six highlights Priority's vision for unified commerce and the value proposition we bring to the market that empowers businesses to leverage our flexible financial tool set whether through our apps or API connection to accelerate cash flow and optimize working capital. Priority Commerce Engine is purpose-built to streamline collecting, storing, lending, and sending money through our acquiring payables and banking and treasury solutions. Our customers and current market conditions reinforce our belief that systems facilitating payments and banking to accept and distribute funds in multi-party environments will be critical as businesses put greater demands on software and payment solution providers to unlock value in existing and developing channels. We're committed to meeting our customers where they are by refining the experience for our partners to make working with Priority seamless and easy. Our financial performance demonstrates that partners consistently choose the unified commerce applications in acquiring payables and banking that best fit their business or connect to our API to leverage these features in their own applications. We remain intently focused on the continued innovation of our SaaS payments and banking solutions that are powered by Priority Commerce and are eager to meet the evolving needs of our growing portfolio of customers and enterprise partners. I would encourage you to play the short one to two minute videos embedded in the product links on slide six to gain a full appreciation for their value and how they are being reflected in our growing customer base. 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 confidence for sustained momentum in 2025.