Priority Technology Holdings, Inc. Announces Fourth Quarter and Full Year 2024 Financial Results

Strong Fourth Quarter Growth Driven by Performance Across Diverse Business Segments

Priority Technology Holdings, Inc. (NASDAQ:PRTH) ("Priority" or the "Company"), a payments and banking fintech that streamlines collecting, storing, lending and sending money through its innovative commerce engine (the "Priority Commerce Engine" or "PCE") to unlock revenue opportunities and generate operational success for businesses, has announced its fourth quarter and full year 2024 financial results including strong year-over-year revenue and profit growth.

Highlights of Consolidated Results

Fourth Quarter 2024 Compared with Fourth Quarter 2023

Financial highlights of the fourth quarter of 2024 compared with the fourth quarter of 2023, are as follows²:

• Revenue of $227.1 million increased 13.9% from $199.3 million
• Adjusted gross profit (a non-GAAP measure¹) of $83.9 million increased 15.1% from $72.9 million
• Adjusted gross profit margin (a non-GAAP measure¹) of 37.0% increased 40.0 basis points from 36.6%
• Operating income of $34.1 million increased 54.9% from $22.0 million
• Adjusted EBITDA (a non-GAAP measure¹) of $51.7 million increased 16.0% from $44.6 million
• Adjusted EPS (a non-GAAP measure¹) of $0.18 increased 800% from $0.02
• Driven by strong cash flow performance in 2024, the Company made a $10.0 million voluntary prepayment on its term loan on February 28, 2025

Full Year 2024 Compared with Full Year 2023

Financial highlights of the Full Year of 2024 compared with the Full Year of 2023, are as follows²:

• Revenue of $879.7 million increased 16.4% from $755.6 million
• Adjusted gross profit (a non-GAAP measure¹) of $328.1 million increased 19.2% from $275.3 million
• Adjusted gross profit margin (a non-GAAP measure¹) of 37.3% increased 90 basis points from 36.4%
• Operating income of $133.4 million increased 63.7% from $81.5 million
• Adjusted EBITDA (a non-GAAP measure¹) of $204.3 million increased 21.3% from $168.3 million
• Adjusted EPS (a non-GAAP measure¹) of $0.51 increased 750% from $0.06

"We reported the strongest revenue performance in our history, both for the fourth quarter and the full year, driven by continued momentum in every segment of our business," said Tom Priore, Chairman & CEO of Priority. "The numbers demonstrate that the Priority Commerce Engine 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. We remain committed to meeting our customers where they are with a flexible financial toolset that makes working with Priority seamless and easy."

Full Year 2025 Financial Guidance

Priority's outlook remains strong, which is reflected in our full year 2025 guidance:

• Revenue forecast to range between $965 million to $1 billion, a growth rate of 10% to 14%, compared to fiscal 2024 results
• Adjusted gross profit (a non-GAAP measure) forecast to range between $360 million and $385 million, a growth rate of 10% to 17% compared to fiscal 2024 results
• Adjusted EBITDA (a non-GAAP measure) forecast to range between $220 million to $230 million, a growth rate of 8% to 13% compared to fiscal 2024 results

Conference Call

Priority's leadership will host a conference call on Thursday, March 6, 2025 at 11:00 a.m. EST to discuss its fourth quarter and full-year 2024 financial results. Participants can access the call by phone in the U.S. or Canada at (833) 636-1319 or internationally at (412) 902-4286.

The Internet webcast link and accompanying slide presentation can be accessed at https://edge.media-server.com/mmc/p/59kiss68 and will also be posted in the "Investor Relations" section of the Company's website at www.prioritycommerce.com.

An audio replay of the call will be available shortly after the conference call until March 13, 2025 at 2:00 p.m. EST. To listen to the audio replay, dial (877) 344-7529 or (412) 317-0088 and enter conference ID number 2813602. Alternatively, you may access the webcast replay in the "Investor Relations" section of the Company's website at www.prioritycommerce.com.

Non-GAAP Financial Measures

This communication includes certain non-GAAP financial measures that we regularly review to evaluate our business and trends, measure our performance, prepare financial projections, allocate resources, and make strategic decisions. We believe these non-GAAP measures help to illustrate the underlying financial and business trends relating to our results of operations and comparability between current and prior periods. We also use these non-GAAP measures to establish and monitor operational goals. However, these non-GAAP measures are not superior to or a substitute for prominent measurements calculated in accordance with GAAP. Rather, the non-GAAP measures are meant to be a complement to understanding measures prepared in accordance with GAAP.

Gross Profit and Adjusted Gross Profit Margin

The Company's adjusted gross profit metric represents revenues less cost of services (excluding depreciation and amortization). Adjusted gross profit margin is adjusted gross profit divided by revenues. We review these non-GAAP measures to evaluate our underlying profit trends. The reconciliation of adjusted gross profit to its most comparable GAAP measure is provided below:

EBITDA and Adjusted EBITDA

EBITDA and adjusted EBITDA are performance measures. EBITDA is earnings before interest expense, income tax, and depreciation and amortization expenses ("EBITDA"). Adjusted EBITDA begins with EBITDA but further excludes certain non-cash costs, such as stock-based compensation and the write-off of the carrying value of investments or other assets, as well as debt extinguishment and modification expenses and other expenses and income items considered non-recurring, such as acquisition integration expenses, certain professional fees, and litigation settlements. We review the non-GAAP adjusted EBITDA measure to evaluate our business and trends, measure our performance, prepare financial projections, allocate resources, and make strategic decisions.

The reconciliation of adjusted EBITDA to its most comparable GAAP measure is provided below:

Further detail of certain of these adjustments, and where these items are recorded in our consolidated statements of operations, is provided below:

Adjusted Earnings (Loss) Per Share (Adjusted EPS)

Adjusted EPS is a performance measure. Adjusted EPS is calculated by dividing adjusted net income attributable to common shareholders by weighted average number shares outstanding for the respective periods.

Adjusted net income attributable to common shareholders begins with Net income attributable to common shareholders adjusted to exclude various items listed below. We believe that adjusted EPS is a measure that is useful to investors and management in understanding our ongoing profitability and in analysis of ongoing profitability trends.

Priority does not provide a reconciliation of forward-looking non-GAAP financial measures to their comparable GAAP financial measures because it could not do so without unreasonable effort due to the unavailability of the information needed to calculate reconciling items and due to the variability, complexity and limited visibility of the adjusting items that would be excluded from the non-GAAP financial measures in future periods. When planning, forecasting and analyzing future periods, the Company does so primarily on a non-GAAP basis without preparing a GAAP analysis as that would require estimates for various cash and non-cash reconciling items that would be difficult to predict with reasonable accuracy. For example, stock-based compensation expense would be difficult to estimate because it depends on the Company's future hiring and retention needs, as well as the future fair market value of the Company's common stock, all of which are difficult to predict and subject to constant change. As a result, the Company does not believe that a GAAP reconciliation would provide meaningful supplemental information about the Company's outlook.

About Priority Technology Holdings, Inc.

Priority is a solution provider in Payments and Banking as a Service operating at scale with over 1.2 million customers across its SMB, B2B and Enterprise channels processing over $130.0 billion in annual transaction activity while administrating approximately $1.2 billion in customer account balances. Priority's purpose-built technology enables clients to collect, store, lend and send money and provides customers the acceptance and AP payment applications and Passport financial tools that best optimize their cash flow and maximize working capital. Additional information can be found at www.prioritycommerce.com.

Forward-Looking Statements

This press release 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, our plans, objectives, expectations and intentions with respect to future operations, products and services, and other statements identified by words such as "may," "will," "should," "anticipates," "believes," "expects," "plans," "future," "intends," "could," "estimate," "predict," "projects," "targeting," "potential" or "contingent," "guidance," "outlook" or words of similar meaning. These forward-looking statements include, but are not limited to, our 2025 outlook and statements regarding our market and growth opportunities. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive risks, trends and uncertainties that could cause actual results to differ materially from those projected, expressed, or implied by such forward-looking statements. Our actual results could differ materially, and potentially adversely, from those discussed or implied herein.

We caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this press release in the context of the risks and uncertainties disclosed in our SEC filings, including our most recent Annual Report on Form 10-K filed with the SEC on March 6, 2025. These filings are available online at www.sec.gov or www.prioritycommerce.com.

We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences we anticipate or affect us or our operations in the way we expect. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance. The forward-looking statements included in this press release are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.

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Priority Investor Inquiries:

Chris Kettmann

[email protected]

(773) 497-7575