PRTH 10-K & 10-Q changes, risk factors and insider trading
Priority Technology Holdings, Inc. (also PRTHU) · Nasdaq · Services-Business Services, Nec · CIK 1653558 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “If we fail to keep pace with technological change, including as a result of artificial intelligence, we could lose clients or have trouble attracting new clients.”
New heading “Our largest stockholder, Thomas C. Priore, recently submitted a non-binding proposal to our Board of Directors to acquire all of the outstanding shares of the Company’s common stock for a price in the range of $6.00 to $6.15 per share. Uncertainty regarding a potential going-private transaction could create significant uncertainty to our business, including disruption to our management and employees, and contribute to volatility in our stock price.”
New heading “If we fail to maintain effective internal control over financial reporting, we may not be able to accurately report our financial results”
Removed heading “We have identified a material weakness in our internal control over financial reporting, and if our remediation of such material weakness is not effective, or if we fail to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.”
Largest changes
“We have identified a material weakness in our internal control over financial reporting, and if our remediation of such material weakness is not effective, or if we fail to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.”see in full comparison
“In addition, the 2024 Credit Agreement which governs our revolving credit facility contains a total net leverage ratio financial covenant that is applicable when 35% or more of the revolving credit facility is drawn at quarter end. The Residual Finance Credit Facility requires Finance SPV to comply with certain restrictions including minimum liquidity of $2.0 million, minimum tangible net worth of $5.0 million, maximum default ratio of 2.5%, maximum delinquency ratio of 5.0%, and a minimum excess spread ratio of 1.00 to 1.00.”see in full comparison
“Furthermore, we cannot assure you that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiencies that led to our material weakness in our internal control over financial reporting or that they will prevent or avoid potential future material weaknesses. Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. …”see in full comparison
“If we fail to keep pace with technological change, including as a result of artificial intelligence, we could lose clients or have trouble attracting new clients.”see in full comparison
“If we are unable to further implement and maintain effective internal control over financial reporting or disclosure controls and procedures, our ability to record, process and report financial information accurately, and to prepare financial statements within required time periods could be adversely affected, which could subject us to litigation or investigations requiring management resources and payment of legal and other expenses, negatively affect investor confidence in our financial statements and adversely impact our stock price. …”see in full comparison
“Our largest stockholder, Thomas C. Priore, recently submitted a non-binding proposal to our Board of Directors to acquire all of the outstanding shares of the Company’s common stock for a price in the range of $6.00 to $6.15 per share. Uncertainty regarding a potential going-private transaction could create significant uncertainty to our business, including disruption to our management and employees, and contribute to volatility in our stock price.”see in full comparison
Full comparison: every changed paragraph (23)
The payment processing industry is highly competitive. We primarily compete in the SMB merchant, B2B customer, and Enterpriseembedded finance industry. We compete with FIs and their affiliates, independent payment processing companies and ISOs. We also compete with many of these same entities for production through distribution partners. Many of our distribution partners are not exclusive to us but also have relationships with our competitors, such that we have to continually expend resources to maintain those relationships. Our growth will depend on the continued growth of banking services, Electronic Payments, particularly Electronic Payments to SMB merchants, B2B paymentscustomers and our ability to increase our market share through successful competitive efforts to gain new customers and distribution partners.
Worldwide financial market conditions, as well as various social and political tensions in the U.S. and around the world, may contribute to increased market volatility, may have long-term effects and may cause economic uncertainties or deterioration in the U.S. In addition, the fiscal and monetary policies of foreign nations, such as Russia and China, may have a severe impact on U.S. financial markets. We are monitoring the conflicts between Russia and Ukraine andUkraine, Israel and Hamas.Hamas, and the larger conflict among the U.S., Israel, Iran and other middle eastern countries. While we do not expect that such conflicts will themselves be material to our business, geopolitical instability and adversity arising from such conflict (including additional conflicts that could arise from such conflicts), the imposition of sanctions, taxes and/or tariffs against one of the countries or their response to such sanctions (including retaliatory acts, such as cyber attacks and sanctions against other countries) could adversely affect the global economy or specific international, regional and domestic markets, which could have a material adverse effect on our business, results of operations or financial condition.
We rely on various FIs to provide clearing services in connection with our settlement activities. If such FIs should stop providing clearing services, we must find other FIs to provide those services. Additionally, we rely on FIs to facilitate our B2BPayables and money transmission services offerings. If we are unable to find a replacement financial institution, we may no longer be able to provide these services to certain customers, which could negatively affect our revenues, earnings and cash flows.
If we fail to keep pace with technological change, including as a result of artificial intelligence, we could lose clients or have trouble attracting new clients.
If we fail to keep pace with technological change, including as a result of artificial intelligence, we could lose clients or have trouble attracting new clients. The markets for our products and services are characterized by constant and rapid technological change, evolving industry standards, frequent introduction of new products and services, and increasing client expectations. Our ability to respond timely to these changes, including by enhancing our current products and services and developing and introducing new products and services, will significantly affect our future success. In addition, competitors and other third parties may incorporate artificial intelligence into products and offerings more quickly or more successfully than we do, which could impair our ability to compete effectively and adversely affect our results of operations. Furthermore, the success of certain of our products and services rely, in part, on financial institutions, business partners and other third parties promoting the use of or distributing our products and services.
During 2025, the the One Big Beautiful Bill Act was enacted in the U.S., including provisions such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates beginning in 2025.
Substantially all of our indebtedness is variable rate debt, primarily based on SOFR, which replaced LIBOR effective June 30, 2023. As a result of this variable rate debt, an increase in interest rates generally, such as those we have recently experienced,generally would adversely affect our profitability. We may enter into pay-fixed interest rate swaps or other derivative transactions to limit our exposure to changes in floating interest rates. Such instruments may result in economic losses should interest rates decline to a point lower than our fixed rate commitments. We would be exposed to credit-related losses, which could impact the results of operations in the event of fluctuations in the fair value of the interest rate swaps due to a change in the credit worthiness or non-performance by the counterparties to the interest rate swaps.
In addition, the 2024 Credit Agreement which governs our revolving credit facility contains a total net leverage ratio financial covenant that is applicable when 35% or more of the revolving credit facility is drawn at quarter end. The Residual Finance Credit Facility requires Finance SPV to comply with certain restrictions including minimum liquidity of $2.0 million, minimum tangible net worth of $5.0 million, maximum default ratio of 2.5%, maximum delinquency ratio of 5.0%, and a minimum excess spread ratio of 1.00 to 1.00.
In addition, the credit agreement governing our revolving credit facility contains a total net leverage ratio financial covenant that is applicable when 35% or more of the revolving credit facility is drawn at quarter end. A breach of any of these covenants (or any other covenant in the documents governing our Credit and Guaranty Agreement) could result in a default or event of default under our 2024 Credit andAgreement Guarantyor Agreement.the Residual Finance Credit Facility. If an event of default occurred, the applicable lenders or agents could elect to terminate borrowing commitments and declare all borrowings and loans outstanding thereunder, together with accrued and unpaid interest and any fees and other obligations, to be immediately due and payable. In addition, or in the alternative, the applicable lenders or agents could exercise their rights under the security documents entered into in connection with ourthe 2024 Credit Agreement and Guarantythe Agreement.Residual Finance credit facility. Any acceleration of amounts due under the 2024 Credit and Guaranty Agreement would likely have a material adverse effect on us.
Our largest stockholder, Thomas C. Priore, recently submitted a non-binding proposal to our Board of Directors to acquire all of the outstanding shares of the Company’s common stock for a price in the range of $6.00 to $6.15 per share. Uncertainty regarding a potential going-private transaction could create significant uncertainty to our business, including disruption to our management and employees, and contribute to volatility in our stock price.
On November 9, 2025, Mr. Priore, who directly or beneficially owns approximately 60% of our outstanding common stock as of November 9, 2025, submitted a non-binding proposal to our Board on behalf of himself and his affiliated entities (the “Proposing Shareholders”) to acquire all of the outstanding shares of the Company’s common stock (a “Take Private Transaction”) for a price in the range of $6.00 to $6.15 per share. The Board has established a special committee comprised of disinterested and independent directors in response to interest expressed by the Proposing Shareholders in exploring the Take Private Transaction. Any potential Take Private Transaction may be subject to numerous conditions, including financing availability and regulatory approvals.
We may incur significant costs in connection with the evaluation of, and response to, any proposal regarding a Take Private Transaction. The potential of a Take Private Transaction may also divert the attention of management and employees from the ongoing operation of our business and may impact employee morale and retention, all of which could impair our ability to execute our strategic plans, meet operational objectives, and respond to competitive pressures. Our customers may also react negatively to a Take Private Transaction, including any related negative publicity regarding the Company. Further, the possibility of a Take Private Transaction may contribute to continued or increased volatility in our stock price.
We intend to retain future earnings, if any, for future operations, expansion, and debt repayment and have no current plans to pay any cash dividends for the foreseeable future. The declaration, amount, and payment of any future dividends on shares of Common Stock will be at the sole discretion of our Board of Directors. Our Board of Directors may take into account general and economic conditions, our financial condition, and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax, and regulatory restrictions, implications on the payment of dividends by us to our shareholdersstockholders or by our subsidiaries to us, and such other factors as our Board of Directors may deem relevant. In addition, our ability to pay dividends is limited by covenants of our existing and outstanding indebtedness and may be limited by covenants of any future indebtedness we or our subsidiaries incur. As a result, you may not receive any return on an investment in our Common Stock unless you sell our Common Stock for a price greater than that which you paid for it.
Our Amended and Restated Certificate of Incorporation provides that neither he nor any of his affiliates, or any director who is not employed by us (including any non-employee director who serves as one of our officers in both his director and officer capacities) will have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. So long as Thomas Priore continues to own a significant amount of our combined voting power, even if such amount is less than 50%, he will continue to be able to strongly influence or effectively control our decisions. Furthermore, so long as Thomas Priore and his respective affiliates collectively own at least 50% of all outstanding shares of our Common Stock entitled to vote generally in the election of directors, they will be able to appoint individuals to our Board of Directors. In addition, given his level of control, Thomas Priore will be able to determine the outcome of all matters requiring shareholders'stockholders' approval and will be able to cause or prevent a change of control of the Company or a change in the composition of our Board of Directors and could preclude any unsolicited acquisition of the Company. The concentration of ownership could deprive you of an opportunity to receive a premium for your shares of Common Stock as part of a sale of the Company and ultimately might affect the market price of our Common Stock.
Upon the approval of our Board, our directors and officers may pledge shares of common stock as collateral for personal loans or investments in favor of third parties. Depending on the status of the various loan obligations for which the stock would ultimately serve as collateral and the trading price of our common stock, our directors and/or officers, and their affiliates, may experience foreclosure that could result in the sale of the pledged stock, in the open market or otherwise. Sales by these pledgees may not be subject to the volume limitations of Rule 144 of the Securities Act. Even in the absence of shares being sold, the act of pledging shares and the risk of sales of shares may create a misalignment of interests between insider pledgors and the Company’s shareholders,stockholders, as the insider may be incentivized to take actions that limit his or her exposure to such sales. Either scenario could potentially subject the Company and its insiders to shareholderstockholder lawsuits, particularly in an environment of declining share prices. As of the date of this Form 10-K, no officer or director that has pledged shares of common stock.
If we fail to maintain effective internal control over financial reporting, we may not be able to accurately report our financial results
Section 404 of the Sarbanes-Oxley Act of 2002 requires us to annually evaluate the effectiveness of our internal control over financial reporting as of the end of each year and to include a management report assessing the effectiveness of our internal control over financial reporting in our Annual Report on Form 10-K. If we fail to maintain the adequacy of our internal control, we may be unable to accurately report our financial results, or report them within the required timeframes.
While we continue to dedicate resources to ensure we have effective internal controls over financial reporting, failure to achieve and maintain an effective internal control environment could have a material adverse effect on our ability to timely generate accurate financial statements in conformity with accounting principles generally accepted in the United States, and, resultingly, on the market's perception of our business and on our stock price.
We have identified a material weakness in our internal control over financial reporting, and if our remediation of such material weakness is not effective, or if we fail to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.
In the course of preparing our financial statements for the year ended December 31, 2024, we identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness identified pertains to certain tools or applications involved in the transformation and ingestion of third-party processors’ data in the Company’s control environment.
If we are unable to further implement and maintain effective internal control over financial reporting or disclosure controls and procedures, our ability to record, process and report financial information accurately, and to prepare financial statements within required time periods could be adversely affected, which could subject us to litigation or investigations requiring management resources and payment of legal and other expenses, negatively affect investor confidence in our financial statements and adversely impact our stock price. If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected and we could become subject to litigation or investigations by Nasdaq, the SEC or other regulatory authorities, which could require additional financial and management resources.
Furthermore, we cannot assure you that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiencies that led to our material weakness in our internal control over financial reporting or that they will prevent or avoid potential future material weaknesses. Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods.
Any failure to implement and maintain effective internal control over financial reporting could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we are required to include in our periodic reports that are filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our common stock. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the Nasdaq.
Management's Discussion & Analysis (MD&A)
New heading “Merchant Solutions”
New heading “Treasury Solutions”
Removed heading “Enterprise Payments”
Largest changes
“The Residual Finance credit facility requires Finance SPV to comply with certain restrictions including minimum liquidity of $2.0 million, minimum tangible net worth of $5.0 million, maximum default ratio of 2.5%, maximum delinquency ratio of 5.0%, and a minimum excess spread ratio of 1.00 to 1.00. As of December 31, 2025, Finance SPV was in compliance with the restrictions in the agreement.”see in full comparison
“If the aggregate principal amount of outstanding revolving loans and letters of credit under the Credit Agreement exceeds 35% of the total revolving facility thereunder, the loan parties are required to comply with certain restrictions on its Total Net Leverage Ratio, which is defined in the Credit Agreement as the ratio of consolidated total debt less unrestricted cash to consolidated adjusted EBITDA (as defined in the Credit Agreement). …”see in full comparison
“If the aggregate principal amount of outstanding revolving loans and letters of credit under the 2024 Credit Agreement exceeds 35% of the total revolving facility thereunder at quarter end, the loan parties are required to comply with certain restrictions on its Total Net Leverage Ratio, which is defined in the 2024 Credit Agreement as the ratio of consolidated total debt less unrestricted cash to consolidated adjusted EBITDA (as defined in the 2024 Credit Agreement). …”see in full comparison
“Selling, general and administrative expenses of $47.4 million for the year ended December 31, 2024 increased by $2.0 million, or 4.4%, from $45.4 million for the year ended December 31, 2023, primarily due to increase of $8.5 million in marketing, software, management fee, bad debt write offs and other operating expenses offset by decrease in restructuring expenses ($3.5 million), legal and professional expenses ($1.5 million) primarily related to acquisitions, and gain from changes in fair value of contingent consideration ($1.5 million).”see in full comparison
Full comparison: every changed paragraph (53)
ForDuring 2025 the Company renamed its reportable segments, for a description and additional information about our three reportable segments, see Note 19.18. Segment Information, contained in "Item 8 - Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
This section includes certain components of our results of operations for the years ended December 31, 20242025 (or "20242025"), and December 31, 20232024 (or "20232024"). We have derived this data, except key indicators including merchanttotal bankcardcard processing dollar valuesvalue and transaction count (SMBMerchant PaymentsSolutions), buyer funded card processing dollar value, supplier funded issuing dollar volumevalue, and transaction count (B2B PaymentsPayables), and average billed clientsclients, average monthly enrollments, and newaverage enrollmentstotal account balances (EnterpriseTreasury PaymentsSolutions), from our audited Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.
For the year ended December 31, 2024,2025, our consolidated revenue of $879.7$953.0 million increased by $124.1$73.3 million, or 16.4%,8.3%, from $755.6$879.7 million for the year ended December 31, 2023.2024. This overall increase was driven by increases in merchant bankcard processing dollar value andvalue, transaction count and acquisitions in our SMBMerchant PaymentsSolutions segment, an increase in new enrollments and higher interest income on permissible investments in our EnterpriseTreasury PaymentsSolutions segment and an increase in revenue from CPX due to increase in volumes and Plastiq business acquired during the third quarter of 2023 in B2B PaymentsPayables segment.
For the year ended December 31, 2024,2025, our merchant card fees revenue of $670.4$710.9 million increased by $75.2$40.5 million, or 12.6%,6.0%, from $595.2$670.4 million for the year ended December 31, 2023.2024. This increase was primarily driven by revenue from theacquisitions Plastiqin business that was acquired during the third quarter of 20232025 and increased bankcard processing dollar values and transaction counts in SMBthe payments.Merchant Solutions segment.
Money transmission services revenue of $159.2 million for the year ended December 31, 2025 increased by $29.0 million or 22.3%, from $130.1 million for the year ended December 31, 2024 increased by $32.0 million or 32.6%, from $98.1 million for the year ended December 31, 2023 and is primarily driven by anincreased increasecustomer enrollments, which resulted in customera enrollments.higher number of billed clients.
Outsourced services and other services revenue of $70.7 million for the year ended December 31, 2025 increased by $3.7 million, or 5.5%, from $67.0 million for the year ended December 31, 2024 increased by $17.4 million, or 35.1%, from $49.6 million for the year ended December 31, 2023.2024. This increase was primarily due to growth in interest income on permissible investments due to higher deposit balances and increased volume in ACH.com business partially offset by a decrease in interest rates and depositdecreased balancesissuing anddollar additionalvolumes revenuesin generatedCPX by our B2B Payments segment.business.
Equipment revenue of $12.2 million for the year ended December 31, 2024,2025, decreasedremained byconsistent $0.5in million,comparison orto 4.1%, from $12.7$12.2 million for the year ended December 31, 2023.2024, The decrease was primarily due to a decrease in point-of-saleas equipment salesrevenue volume.is directly driven by merchant demand for certain equipment. No trends affecting equipment revenue were identified.
Costs of services (excludes depreciation and amortization) of $578.3 million for the year ended December 31, 2025 increased by $26.7 million, or 4.8%, from $551.6 million for the year ended December 31, 2024 increased by $71.3 million, or 14.8%, from $480.3 million for the year ended December 31, 2023,2024, primarily due to the corresponding increase in revenues. For the year ended December 31, 2024,2025, costs of services (excluding depreciation and amortization) as a percentage of total revenues decreased to 62.7%60.7% as compared to 63.6%62.7% for the year ended December 31, 2023.2024. This decrease was primarily due to the increase inincreased interest income on permissible investments and money transmission revenuesrevenues, which do not have significant costcosts of servicesservices, as well as lower credit losses, reduced inventory write-offs, and acquisitions, partially offset by certain credit losses, obsolete inventory write offs and, mix relatedmix-related margin compression.
Salary and employee benefits expense of $107.8 million for the year ended December 31, 2025 increased by $18.6 million, or 20.8%, from $89.2 million for the year ended December 31, 2024 increased by $9.2 million, or 11.6%, from $80.0 million for the year ended December 31, 2023,2024, primarily due to highermerit wages,increases, increased stock based compensation and increased headcount from acquisitions and to support overall growth of the Company. The Company's employee headcount increased to 1,200 in 2025 from 1,019 in 2024 from 977 in 2023.2024.
Depreciation and amortization expense of $63.2 million for the year ended December 31, 2025 increased by $5.1 million, or 8.9%, from $58.0 million for the year ended December 31, 2024 decreased by $10.4 million, or 15.1%, from $68.4 million for the year ended December 31, 2023,2024, primarily due to fullthe amortization of intangibles acquired during the year, accelerated depreciation on certain intangible assets partially offset by theand depreciation of new assets placed in service.service partially offset by the full depreciation/amortization of certain assets.
Selling, general and administrative expenses of $62.5 million for the year ended December 31, 2025 increased by $15.1 million, or 31.8%, from $47.4 million for the year ended December 31, 2024, primarily due to increases in marketing expenses of $1.2 million, accounting expenses of $2.4 million (primarily for SOX compliance and audits), software expenses of $2.9 million, cloud hosting expenses of $2.5 million, travel expenses of $1.4 million, and other variances which are not individually material.
Selling, general and administrative expenses of $47.4 million for the year ended December 31, 2024 increased by $2.0 million, or 4.4%, from $45.4 million for the year ended December 31, 2023, primarily due to increase of $8.5 million in marketing, software, management fee, bad debt write offs and other operating expenses offset by decrease in restructuring expenses ($3.5 million), legal and professional expenses ($1.5 million) primarily related to acquisitions, and gain from changes in fair value of contingent consideration ($1.5 million).
Interest expense of $90.7 million for the year ended December 31, 2025, increased by $1.7 million, or 1.9%, from $88.9 million for the year ended December 31, 2024, due to higher debt balances to fund acquisitions offset by decreases in interest rates due to debt refinancings and federal rate cuts during 2025.
Interest expense of $88.9 million for the year ended December 31, 2024 increased by $12.8 million, or 16.9%, from $76.1 million for the year ended December 31, 2023, due to higher debt balances to fund the redemption of the redeemable senior preferred stock partially offset by a decrease in interest rates during the fourth quarter of 2024.
Debt extinguishment and modification costs for the year ended December 31, 20242025, increased by $10.4$2.1 million or 100%,20.7%, from the year ended December 31, 2023,2024, due to debt refinancings (see Note 10. Debt Obligations). Other income, net of $3.2 million for the year ended December 31, 2024 increased by $1.4 million, or 83.0%, from $1.7 million for the year ended December 31, 2023, due to increased interest income from the Company's operating accounts.
Other income, net
Other income, net of $8.2 million for the year ended December 31, 2025 increased by $5.0 million, or 158.2%, from $3.2 million for the year ended December 31, 2024, due to bargain purchase gain of $4.0 million from Sila acquisition (see Note 2. Acquisitions) and increased interest income from the Company's operating accounts.
The decrease in the effective tax rate from 20232024 to 20242025 is primarily due to a reduction in the amount of additional valuation allowance recorded against certain business interest carryover deferred tax assets.assets resulting from the enactment of the One Big Beautiful Bill Act (“OBBBA”) during the year ended December 31, 2025.
Earnings Attributable to Common ShareholdersStockholders
The increase in net income (loss) attributable to common stockholders is attributable to an increase in operating income, an income tax benefit due to release of valuation allowance on deferred tax assets due to changes in the tax laws and the discontinuance of dividend obligations.
Dividends, accretion and related excise tax attributable to redeemable senior preferred stockholders consists of $27.7 million of dividends, $16.9 million of accretion and $2.7 million of excise tax related to redemption of redeemable senior preferred stock and redeemable NCI for the year ended December 31, 2024. The balance remained consistent as compared to 2023 due to redemption of redeemable senior preferred stock during 2024.
The Company's chief operating decision makers ("CODM") are our CEO and CFO. The CODM uses adjusted earnings before interest expense, income tax and depreciation and amortization expenses ("Adjusted EBITDA") as measuresthe measure of segment profit and loss to allocate resources.
Merchant Solutions
SMB Payments
Revenue from our SMBMerchant PaymentsSolutions segment was $642.1 million for the year ended December 31, 2025, compared to $613.5 million for the year ended December 31, 2024, compared to $583.3 million for the year ended December 31, 2023.2024. The increase of $30.3$28.5 million, or 5.2%,4.6%, was primarily driven by merchanttotal card fee rate and bankcard processing dollar value and total card transaction count increases.partially offset by a decrease in merchant card fee rate. The Company's merchant card fee revenue from the SMBMerchant PaymentsSolutions segment ($595.0$625.2 million for 2025 and $595.1 million for 2024 and $564.3 million for 2023) as a percentage of merchanttotal bankcardcard processing dollar value during 20242025 increaseddecreased to 0.96%0.85% from 0.95%0.83% during 2023.2024. The increasedecrease was primarily driven by changes in the merchant mix.
Adjusted EBITDA from our SMBMerchant PaymentsSolutions segment was $108.9$111.8 million for the year ended December 31, 2024,2025, compared to $109.5$108.9 million for the year ended December 31, 2024. The decreaseincrease of $0.6$2.9 million or 0.6%2.6% was primarily due to certainacquisitions and decreased credit losses,losses offset by mix-related margin compression andas increasewell as increases in salary expenses partially offset by increased revenue and gainother fromoperating changes in the fair value of contingent consideration from a past acquisition.expenses.
B2B PaymentsPayables
Revenue from our B2B PaymentsPayables segment was $100.9 million for the year ended December 31, 2025, compared to $89.1 million for the year ended December 31, 2024, compared to $41.2 million for the year ended December 31, 2023.2024. The increase of $47.9$11.8 million, or 116.5%,13.2%, was primarily driven by an increase of $44.4$7.7 million in the Plastiq business whichdue wasto acquiredhigher duringbuyer thefunded thirdcard quarterprocessing of 2023volume and an increase of $4.1 million in the CPX business due to increased interest revenue and volumes.ACH Thistransaction increase was offset by a decrease of $0.6 million driven by the wind down of certain customer programs in the managed services business during the fourth quarter of 2023.count.
Adjusted EBITDA from our B2B PaymentsPayables segment was $7.6$14.6 million for the year December 31, 2024,2025, compared to $2.2$7.6 million for the year ended December 31, 2023.2024. The increase of $5.4$7.0 million was primarily driven by increase in revenues offsetand bya increasedecrease in operating expenses.
Treasury Solutions
(1) This represents the average total account balance in the Treasury Solutions segment, and excludes the deposits and balances maintained in the Merchant Solution and Payables segment. The total account and deposit balances as of December 31, 2025 and 2024, were $1.7 billion and $1.2 billion respectively.
Enterprise Payments
Revenue from our EnterpriseTreasury PaymentsSolutions segment was $215.8 million for the year ended December 31, 2025, compared to $180.4 million for the year ended December 31, 2024, compared to $132.2 million for the year ended December 31, 2023.2024. The increase of $48.3$35.3 million, or 36.6%,19.6%, was primarily driven by an increase in customer enrollments,enrollments in our CFTPay business, additional revenues generated by our Passport platform, acquisitions of Sila and Letus businesses, and growth in interest income due to higher deposit balances and higher returns on the permissible investments related to our money transmission licenses.
Adjusted EBITDA from our EnterpriseTreasury PaymentsSolutions segment was $182.2 million for the year ended December 31, 2025, compared to $154.9 million for the year ended December 31, 2024, compared to $110.9 million for the year ended December 31, 2023.2024. The increase of $44.0$27.3 million or 39.8%17.6% was primarily due to increase inincreased revenue partially offset by increasedan salaries.increase in salary expenses and other operating expenses.
(1) excludes stock based compensation settled in cash of $2.5 million subsequent to the year ended December 31, 2025 (2) represents cash settled stock based compensation which is non-recurring in nature
Liquidity and capital resource management is a process focused on providing the funding we need to meet our short-term and long-term cash and working capital needs. We have used our funding sources to build our customer base, for technology solutions and to make acquisitions with the expectation that such investments will generate cash flows sufficient to cover our working capital needs and other anticipated needs, including for our acquisition strategy. We anticipate that cash on hand, funds generated from operations and available borrowings under our revolving credit agreement are sufficient to meet our working capital requirements for at least the next twelve months. This is based upon management's estimates and assumptions regarding effects of micro and macro factors impacting the economic environment in which the Company operates on our financial results. Actual future results could differ materially, as the magnitude, duration and effects of changes in economic, political and market conditions are difficult to predict, and ultimately could negatively impact our liquidity and capital resources. Our principal uses of cash are to fund business operations (including capital expenditures and strategic investments) and administrative costs, and to service our debt.
At December 31, 2024,2025, we had availability of approximately $70.0$100.0 million under our revolving credit arrangement.arrangement and $14.6 million under our Residual Finance credit facility's delayed draw term facility.
Net cash used in investing activities was $35.5$174.0 million compared to cash used investing activities of $55.7$35.5 million for the years ended December 31, 20242025 and 2023,2024, respectively. The Company had three business acquisitions for the year ended December 31, 2025, which used net cash of $39.3 million compared to no business acquisitions for the year ended December 31, 2024, compared to net cash used of $28.2 million in 2023 to acquire Plastiq business.2024. Additions to property, equipment and software was $21.7$24.9 million for the year ended December 31, 20242025 compared to $21.3$21.7 million in 2023December 31, 2024. Net amount of $11.1 million was advanced for loans to ISOs and acquisitionsISVs for the year ended December 31, 2025, compared to $3.4 million in 2024. The Company acquired intangible assets, unconsolidated equity investments and other short term investment of intangible assets was $10.5$98.7 million for the year ended December 31, 2024,2025 compared to $6.6acquisition of intangible assets and an unconsolidated equity investment $10.5 million in 2023. Net amount of $3.4 million was advanced for loans to ISOs for the year ended December 31, 2024, compared to $0.4 million related to payments received against loans to ISOs in 2023.2024.
Net cash provided by financing activities was $426.2 million for the year ended December 31, 2025, compared to $147.6 million for the year ended December 31, 2024, compared to $210.1 million for the year ended December 31, 2023.2024. The net cash provided by for the year ended December 31, 2025 included changes in the net obligations for funds held on the behalf of customers of $355.1 million, borrowings under the Second and Third Amendment to the 2024 Credit Agreement and the Residual Finance credit facility net of issues discount, principal repayments and payments of debt issuance and modification costs of $100.8 million, and proceeds for the exercise of stock options of $0.5 million. This was further offset by redemption of non-controlling interest in subsidiary of $7.0 million, $3.2 million of cash used for shares withheld for taxes, and $20.1 million of payment of contingent consideration for business combinations. For the year ended December 31, 2024, included changes in the net obligations for funds held on the behalf of customers of $179.6 million, borrowings under the 2024 Credit Agreement (including the First Amendment) net of issue discounts of $945.1 million, and proceeds for the exercise of stock options of $1.8 million. This was offset by repayment of the principal of the 2021 Credit Agreement and debt issuance and modification costs related to the refinancing of $666.5 million, redemption of the redeemable senior preferred stock including dividends of $303.2 million, redemption of non-controlling interest in subsidiary of $2.1 million, $1.5 million of cash used for shares withheld for taxes, and $5.6 million of payment of contingent consideration for business combinations. For the year ended December 31, 2023, included changes in the net obligations for funds held on the behalf of customers of $211.1 million, $49.8 million related to proceeds from the increase of the term Facility under the 2021 Credit Agreement and $44.0 million related to additional borrowings under the revolving credit facility. This was offset by $56.5 million of cash used for the repayment of borrowings under the revolving credit facility, $6.3 million of cash used for the repayment of the 2021 Credit Agreement's term facility, $24.7 million of cash dividends paid to redeemable senior preferred stockholders, $1.3 million of cash used for shares withheld for taxes, $4.7 million of payments of contingent consideration for business combinations and $1.2 million for debt issuance and modification costs paid related to the modification of the 2021 Credit Agreement.
For the year ended December 31, 2024,2025, the Company had outstanding debt obligations, including the current portion and net of unamortized debt discountdiscount, of $945.5$1.06 million,billion, compared to $654.4$945.5 million for the year ended December 31, 2023,2024, resulting in an increase of $291.1$109.9 million. The debt balance for the year ended December 31, 20242025 consisted of funds outstanding under the 2024 term facility and Residual Finance credit facility, offset by $15.1$16.0 million of unamortized debt discounts and issuance costs. There were no funds outstanding under the revolving credit facility as of December 31, 20242025 and 2023.2024. Minimum amortization of the 2024 Credit Agreement term facility are equal quarterly installments in aggregate annual amounts equal to 1.0%$10.4 of the original principal,million, with the balance paid upon maturity. Payment is due on maturity for the Residual Finance credit facility.
On May 16, 2024, the Company entered in to the 2024 Credit Agreement, which provided a $835.0 million term facility and a revolving credit facility of $70.0$100.0 million. The term facility was was further increased by $115.0 million (First Amendment to the 2024 Credit Agreement) effective November 21, 2024. The outstanding borrowings will accrue using the SOFR rate plus an applicable margin per year subject to a SOFR floor of 0.50%. The term facility matures in May 2031 and the revolving credit facility expires in May 2029.
On July 31, 2025, the Company entered into the second amendment to the 2024 Credit agreement, which increased the principal balance of the term facility from $935.5 million to $1.00 billion, increased quarterly principal payments from $2.4 million to $2.5 million, extended the maturity date from May 2031 to July 2032 and decreased the margin rate from 4.75% to 3.75%. The amendment also increased the credit commitment under the revolving credit facility from $70.0 million to $100.0 million, extended the maturity date from May 2029 to July 2030 and decreased the margin rate from 4.25% to 3.50%.
On October 1, 2025, the Company entered into the third amendment to the 2024 Credit Agreement, which increased the principal balance of the term loan from $1.00 billion to $1.04 billion and increased quarterly principal payments from $2.5 million to $2.6 million. All other material terms of the 2024 Credit agreement remained unchanged. As of December 31, 2025, there are no principal payments due for the next 12 months due to a prepayment in the fourth quarter of 2025.
On August 18, 2025, a wholly owned subsidiary of the Company not restricted by the 2024 Credit Agreement entered into the Residual Finance credit facility which provides a delayed draw term loan facility with a total commitment of $50.0 million of which the Company has drawn $35.4 million. The agreement also provides an accordion feature to increase the commitment by an aggregate amount not to exceed $75.0 million such that the total commitment may equal, but not exceed, $125.0 million. The purpose of this credit facility is to fund certain residual purchases and loans to ISOs and ISVs. Outstanding borrowings under the Residual Finance credit facility accrue interest using a SOFR rate plus an applicable margin per year, equal to 6.25%, subject to a SOFR rate floor of 2.0% per year. Unused commitments are subject to an unused commitment fee on any undrawn amount equal to 1.0% per year of the unused portion.
The 2024 Credit Agreement containsand Residual Finance credit facility both contain representations and warranties, financial and collateral requirements, mandatory payment events, events of default and affirmative and negative covenants, including without limitation, covenants that restrict among other things, the ability to create liens, pay dividends or distribute assets from the loan parties to the Company, merge or consolidate, dispose of assets, incur additional indebtedness, make certain investments or acquisitions, enter into certain transactions (including with affiliates) and to enter into certain leases.
If the aggregate principal amount of outstanding revolving loans and letters of credit under the 2024 Credit Agreement exceeds 35% of the total revolving facility thereunder at quarter end, the loan parties are required to comply with certain restrictions on its Total Net Leverage Ratio, which is defined in the 2024 Credit Agreement as the ratio of consolidated total debt less unrestricted cash to consolidated adjusted EBITDA (as defined in the 2024 Credit Agreement). If applicable, the maximum permitted Total Net Leverage Ratio is: 1) 6.90:1.00 at each fiscal quarter ended September 30, 2025 through March 31, 2026;
2) 6.40:1.00 at each fiscal quarter ended June 30, 2026 and each fiscal quarter thereafter. As of December 31, 2025, the Company was in compliance with the covenants in the 2024 Credit Agreement.
The Residual Finance credit facility requires Finance SPV to comply with certain restrictions including minimum liquidity of $2.0 million, minimum tangible net worth of $5.0 million, maximum default ratio of 2.5%, maximum delinquency ratio of 5.0%, and a minimum excess spread ratio of 1.00 to 1.00. As of December 31, 2025, Finance SPV was in compliance with the restrictions in the agreement.
If the aggregate principal amount of outstanding revolving loans and letters of credit under the Credit Agreement exceeds 35% of the total revolving facility thereunder, the loan parties are required to comply with certain restrictions on its Total Net Leverage Ratio, which is defined in the Credit Agreement as the ratio of consolidated total debt less unrestricted cash to consolidated adjusted EBITDA (as defined in the Credit Agreement). If the aggregate principal amount of outstanding revolving loans and letters of credit under the 2024 Credit Agreement exceeds 35% of the total revolving credit facility thereunder, the Company is required to comply with certain restrictions on its Total Net Leverage Ratio. If applicable, the maximum permitted Total Net Leverage Ratio is: 1) 6.90:1.00 at each fiscal quarter ended September 30, 2024 through December 31, 2025; 2) 6.40:1.00 at each fiscal quarter ended March 31, 2026 and each fiscal quarter thereafter. As of December 31, 2024, the Company was in compliance with the covenants in the 2024 Credit Agreement.
We test goodwill for impairment for each of our reporting units on an annual basis on October 1 or when events occur, or circumstances indicate the fair value of a reporting unit may be below its carrying value. We perform the annual assessment using either the qualitative or quantitative method. WhereThe deemedqualitative appropriate,assessment weconsiders mayindustry performand market considerations, overall financial performance and other relevant events and factors affecting the reporting units or the Company as a whole. The quantitative assessment thatconsiders usesboth the market dataapproach, which estimates fair value using market multiples of comparable companies and transaction multiples of recent transactions, and the income approach, which estimates fair value using a discounted cash flow analysis,utilizing whichforecasted involveprojections estimatesdiscount rates based on the reporting unit’s weighted average cost of future revenues and operating cash flows.capital. Changes in these estimates and assumptions or a significant decrease in earnings could materially affect the fair value of goodwill and could result in a goodwill impairment charge.
Business Combinations and Asset Acquisitions
We allocate the purchase price of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. For acquisitions that include contingent consideration, we estimate the fair value of contingent consideration at the acquisition date. The estimated fair value of contingent consideration is updated in future periods based on information available at that time. Management uses all available information when estimating the fair values of the assets acquired, liabilities assumed and contingent consideration, and must apply judgementjudgment and make certain assumptions when making these estimates. The assumptions management uses when determining fair values include estimated future cash flows or income, market rate assumptions, actuarial assumptions and discount rate assumptions. We typically engage third-party valuation advisors to assist in estimating the fair values of acquired assets and assumed liabilities. Our estimates of fair value are based upon assumptions the Company believes to be reasonable, but that are inherently uncertain, and therefore, may not be realized. Accordingly, there can be no assurance that the estimates, assumptions and values reflected in the valuations will be realized, and actual results could differ materially.
We account for a transaction as an asset acquisition when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, or otherwise does not meet the definition of a business. Asset acquisition-related costs are capitalized as part of the asset or assets acquired.
What changed in the latest 10-Q
Risk Factors
In addition to the other information set forth in this report, you should carefully consider the factors discussed in our Annual Report under Part I, Item 1A "Risk Factors" because these risk factors may affect our operations and financial results. The risks described in the Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition and operating results.
No wording changes found in this section.
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Management's Discussion & Analysis (MD&A)
Largest changes
“Revenue from our Treasury Solutions segment was $119.4 million for the six months ended June 30, 2026, compared to $102.7 million for the six months ended June 30, 2025. The increase of $16.6 million, or 16.2%, was primarily driven by an increase in average billed clients and average total account balances, the acquisition of Sila, and growth in interest income due to higher balances of permissible investments offset by a reduction in interest rates and decreased average monthly enrollments.”see in full comparison
“Outsourced services and other services revenue of $38.7 million for the six months ended June 30, 2026, increased by $4.8 million, or 14.3%, from $33.9 million for the six months ended June 30, 2025, primarily due to growth in interest income from higher balances of permissible investments driven by higher account balances offset by reduction in interest rates.”see in full comparison
“Revenue from our Merchant Solutions segment was $337.6 million for the six months ended June 30, 2026, compared to $314.9 million for the six months ended June 30, 2025. The increase of $22.6 million, or 7.2%, was primarily driven by acquisition related activity, an increase in merchant card fee rate, and increased total card processing dollar value. …”see in full comparison
Net cashsee in full comparisonprovidedusedbyin investing activities was$11.4$203.0 million for thethreesix months endedMarchJune31,30, 2026, compared to$9.7$21.1 million of cash used in investing activities for thethreesix months endedMarchJune31,30, 2025. For thethreesix months endedMarchJune31,30, 2026, investing activities included the$25.0$12.6 millionredemptionadditionsoftoshort-termproperty,investmentsequipmentofandMTLsoftware,funds offset by $8.1$3.0 million related to net funding of new loans to ISOs and$5.5ISVs, $185.0 millionadditionsnet short-term investments of MTL funds, and $2.4 million related toproperty,residualequipmentpurchases andsoftware.investments in unconsolidated entities. For thethreesix months endedMarchJune31,30, 2025, net cash used in investing activities included additions to property, equipment and software of$5.1$13.0 million,$0.1$1.4 million related to net funding of new loans to ISOs and ISVs, $4.5 million related to the acquisition of abusiness.business and $2.3 million investments in unconsolidated entities.
“For the six months ended June 30, 2026, our consolidated revenue of $511.8 million increased by $47.4 million, or 10.2%, from $464.4 million for the six months ended June 30, 2025. …”see in full comparison
“Selling, general and administrative expenses of $36.1 million for the six months ended June 30, 2026, increased by $7.0 million, or 24.3%, from $29.0 million for the six months ended June 30, 2025, primarily due to increase in professional and legal charges related to the Company's on-going special committee process, increased marketing, telecommunications and software expenses to support overall growth and cloud migration, expenses related to acquired businesses and assets, which was partially offset by decreased accounting expenses.”see in full comparison
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As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to the terms "Company," "Priority,Priority Commerce," "we," "us" and "our" refer to Priority Technology Holdings, Inc. and its consolidated subsidiaries.
This section includes certain components of our results of operations for the three and six months ended MarchJune 31,30, 2026, compared to the three and six months ended MarchJune 31,30, 2025. We have derived this data, except the key indicators, from our Unaudited Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q and our Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.
For the three months ended MarchJune 31,30, 2026, our consolidated revenue of $249.6$262.3 million increased by $24.9$22.4 million, or 11.1%,9.4%, from $224.6$239.8 million for the three months ended MarchJune 31,30, 2025. This overall increase was mainly driven by increase in total card processing dollar value andwhich was partially offset by lower total card transaction count in our Merchant Solutions segment, increases in buyer funded card processing dollar value, and supplier funded issuing dollar value which was partially offset by lower ACH transactions count in our Payables Segment, and, an increase in number of billed clients and higher interest income which is partially offset by lower new enrollments in our Treasury Solutions segment, and, increases in buyer funded card processing dollar value, supplier funded issuing dollar value, incentive income, and ACH transactions count in our Payables Segment.segment.
For the six months ended June 30, 2026, our consolidated revenue of $511.8 million increased by $47.4 million, or 10.2%, from $464.4 million for the six months ended June 30, 2025. This overall increase was mainly driven by increase in total card processing dollar value in our Merchant Solutions segment, increases in buyer funded card processing dollar value, supplier funded issuing dollar value, incentive income, and ACH transactions count in our Payables Segment, and, an increase in number of billed clients and higher interest income which was partially offset by lower new enrollments in our Treasury Solutions segment.
Merchant card fees revenue for the three months ended MarchJune 31,30, 20262026, was $185.9$199.1 million an increase of $18.9$18.6 million or 11.3%,10.3%, from $167.1$180.5 million for the three months ended MarchJune 31,30, 2025. The increase was primarily driven by an increase in total card dollar value,value andwhich thewas partially offset by lower total card transaction count processed by the Company.
Merchant card fees revenue for the six months ended June 30, 2026, was $385.0 million an increase of $37.5 million or 10.8%, from $347.6 million for the six months ended June 30, 2025. The increase was primarily driven by an increase in total card dollar value.
Money transmission services for the three months ended MarchJune 31,30, 20262026, was $41.7$42.0 million, an increase of $4.3$2.7 million, or 11.5%,6.9%, from $37.4$39.3 million for the three months ended MarchJune 31,30, 2025. This increase was primarily driven by an increase in average billed clients which was partially offset by lower new customer enrollments.
Money transmission services for the six months ended June 30, 2026, was $83.7 million, an increase of $7.0 million, or 9.1%, from $76.7 million for the six months ended June 30, 2025. This increase was primarily driven by an increase in average billed clients which was partially offset by lower new customer enrollments.
Outsourced services and other services revenue of $19.8$18.9 million for the three months ended MarchJune 31,30, 20262026, increased by $2.8$2.0 million, or 16.6%,11.9%, from $17.0$16.9 million for the three months ended MarchJune 31,30, 2025, primarily due to growth in interest income from higher balances of permissible investments driven by higher account balances offset by reduction in interest rates.
Outsourced services and other services revenue of $38.7 million for the six months ended June 30, 2026, increased by $4.8 million, or 14.3%, from $33.9 million for the six months ended June 30, 2025, primarily due to growth in interest income from higher balances of permissible investments driven by higher account balances offset by reduction in interest rates.
Equipment revenue of $2.1$2.3 million for the three months ended MarchJune 31,30, 20262026, decreased by $1.0$0.9 million, or 33.8%27.6% from $3.1$3.2 million for the three months ended MarchJune 31,30, 2025. The decrease was primarily due to lower point-of-sale equipment sales caused by a decrease in demand from merchants.
Equipment revenue of $4.4 million for the six months ended June 30, 2026, decreased by $1.9 million, or 30.7% from $6.3 million for the six months ended June 30, 2025. The decrease was primarily due to lower point-of-sale equipment sales caused by a decrease in demand from merchants.
Cost of revenue (excludes depreciation and amortization) of $150.8$162.4 million for the three months ended MarchJune 31,30, 20262026, increased by $13.4$15.0 million, or 9.8%,10.1%, from $137.4$147.4 million for the three months ended MarchJune 31,30, 2025, primarily due to the corresponding increase in revenues.
Cost of revenue (excludes depreciation and amortization) of $313.1 million for the six months ended June 30, 2026, increased by $28.4 million, or 10.0%, from $284.8 million for the six months ended June 30, 2025, primarily due to the corresponding increase in revenues.
Salary and employee benefits expense of $28.5$29.2 million for the three months ended MarchJune 31,30, 20262026, increased by $2.7$2.1 million, or 10.7%,7.7%, from $25.8$27.1 million for the three months ended MarchJune 31,30, 2025, primarily due to merit increases, and increased headcount to support overall growth of the Company and from the acquisition of Sila, Boom and DMS, and increased stock based compensation related to long term incentive awards to executives.activity.
Salary and employee benefits expense of $57.7 million for the six months ended June 30, 2026, increased by $4.8 million, or 9.2%, from $52.8 million for the six months ended June 30, 2025, primarily due to merit increases, and increased headcount to support overall growth of the Company and from the acquisition related activity.
Depreciation and amortization expense of $17.6$20.9 million for the three months ended MarchJune 31,30, 20262026, increased by $3.8$6.8 million, or 27.9%,48.3%, from $13.8$14.1 million for the three months ended MarchJune 31,30, 2025, primarily due to the addition of intangible assets from the Letus,acquisition Sila,related Boom and DMS acquisitionsactivity and software capitalization.
Depreciation and amortization expense of $38.5 million for the six months ended June 30, 2026, increased by $10.6 million, or 38.2%, from $27.9 million for the six months ended June 30, 2025, primarily due to the addition of intangible assets from the acquisition related activity and software capitalization.
Selling, general and administrative expenses of $19.2$16.8 million for the three months ended MarchJune 31,30, 20262026, increased by $4.1$2.9 million, or 27.4%,20.8%, from $15.1$13.9 million for the three months ended MarchJune 31,30, 2025, primarily due to increase in professional and legal chargesfees related to the Company's go-privateon-going project,special committee process, and increased marketingmarketing, telecommunications and software expenses to support overall growth and cloud migration, expenses related to acquired businesses and assets, which was partially offset by legaldecreased andaccounting other expenses related to the Company's secondary offering of common shares incurred during the quarter ended March 31, 2025.expenses.
Selling, general and administrative expenses of $36.1 million for the six months ended June 30, 2026, increased by $7.0 million, or 24.3%, from $29.0 million for the six months ended June 30, 2025, primarily due to increase in professional and legal charges related to the Company's on-going special committee process, increased marketing, telecommunications and software expenses to support overall growth and cloud migration, expenses related to acquired businesses and assets, which was partially offset by decreased accounting expenses.
Interest expense of $21.0$21.1 million for the three months ended MarchJune 31,30, 20262026, decreased by $2.2$2.0 million, or (9.3)%,8.7%, from $23.2$23.1 million for the three months ended MarchJune 31,30, 2025, due to decreased SOFR rates and beneficial changes in margin from the recent refinancing which was partially offset by increased outstanding balances of the 2024 Credit Agreement and the Residual Finance creditCredit facilityFacility established during the quarter ended September 30, 2025.
Interest expense of $42.1 million for the six months ended June 30, 2026, decreased by $4.2 million, or 9.0%, from $46.2 million for the six months ended June 30, 2025, due to decreased SOFR rates and beneficial changes in margin from the recent refinancing which was partially offset by increased outstanding balances of the 2024 Credit Agreement and the Residual Finance Credit Facility established during the quarter ended September 30, 2025.
Revenue from our Merchant Solutions segment was $161.8$175.8 million for the three months ended MarchJune 31,30, 2026, compared to $151.7$163.2 million for the three months ended MarchJune 31,30, 2025. The increase of $10.1$12.5 million, or 6.7%,7.7%, was primarily driven by acquisition related activity, an increase in merchant card fee rate, and increased total card processing dollar value andwhich was partially offset by a decrease in total card transaction count. The Company's merchant card fee revenue from the Merchant Solutions segment ($158.5$171.9 million for three months ended MarchJune 31,30, 2026 and $147.5$158.8 million for the three months ended MarchJune 31,30, 2025) as a percentage of total card processing dollar value during the three months ended MarchJune 31,30, 2026 increased to 0.87%0.88% from 0.83%0.84% as compared to the three months ended MarchJune 31,30, 2025.
Revenue from our Merchant Solutions segment was $337.6 million for the six months ended June 30, 2026, compared to $314.9 million for the six months ended June 30, 2025. The increase of $22.6 million, or 7.2%, was primarily driven by acquisition related activity, an increase in merchant card fee rate, and increased total card processing dollar value. The Company's merchant card fee revenue from the Merchant Solutions segment ($330.4 million for six months ended June 30, 2026 and $306.3 million for the six months ended June 30, 2025) as a percentage of total card processing dollar value during the six months ended June 30, 2026 increased to 0.87% from 0.84% as compared to the six months ended June 30, 2025.
Adjusted EBITDA from our Merchant Solutions segment was $30.9 million for the three months ended June 30, 2026, compared to $27.7 million for the three months ended MarchJune 31, 2026, compared to $25.7 million for the three months ended March 31,30, 2025. The increase of $2.0$3.1 million, or 7.9%11.3% was primarily driven by an increase in revenue,revenue and the Boom Commerce acquisition, which was partially offset by mix related margin compression, certain chargeback losses, and increase in other operating expenses.
Adjusted EBITDA from our Merchant Solutions segment was $58.6 million for the six months ended June 30, 2026, compared to $53.5 million for the six months ended June 30, 2025. The increase of $5.2 million, or 9.7% was primarily driven by an increase in revenue and the Boom Commerce acquisition, which was partially offset by mix related margin compression, and increase in other operating expenses.
Revenue from our Payables segment was $32.4$30.4 million for the three months ended MarchJune 31,30, 2026, compared to $23.9$25.0 million for the three months ended MarchJune 31,30, 2025. The increase of $8.5$5.4 million, or 35.6%21.6% was primarily driven by increased buyer funded card processing dollar value, certain incentive income, ACH transaction count, supplier funded issuing dollar value, and interest from higher account balances.balances which was partially offset by a decrease in ACH transaction count.
Revenue from our Payables segment was $62.9 million for the six months ended June 30, 2026, compared to $49.0 million for the six months ended June 30, 2025. The increase of $13.9 million, or 28.4% was primarily driven by increased buyer funded card processing dollar value, certain incentive income, ACH transaction count, supplier funded issuing dollar value, and interest from higher account balances.
Adjusted EBITDA from our Payables segment ofwas $5.5$3.1 million for the three months ended MarchJune 31,30, 2026, compared to $3.5$3.8 million for the three months ended MarchJune 31,30, 2025.The increasedecrease in Adjusted EBITDA of $1.9$0.7 million or 55.1%17.5% was contributed by $4.0 million in the supplier funded business (driven by increase in revenues) and $1.5$0.8 million in the buyer funded businessbusiness, (driven by increasedmix processingrelated volumemargin compression, which was partially offset by mixincreased relatedprocessing marginvolume. compression).The decrease in Adjusted EBITDA was partially offset by a $0.1 million increase in the supplier funded business, driven by increase in operating income.
Adjusted EBITDA from our Payables segment was $8.6 million for the six months ended June 30, 2026, compared to $7.3 million for the six months ended June 30, 2025.The increase in Adjusted EBITDA of $1.3 million or 17.5% was contributed by $2.3 million in the supplier funded business, driven by increase in revenues and operating income, which was partially offset by a decrease of $1.0 million in the buyer funded business, driven by mix related margin compression partially offset by increased processing volume.
(1) This represents the average total account balance in the Treasury Solutions segment, and excludes the deposits and balances maintained in the Merchant Solutions and Payables segments. The total account and deposit balances as of MarchJune 31,30, 2026 and 2025, were $1.8 billion and $1.3$1.4 billion, respectively.
Revenue from our Treasury Solutions segment was $58.8$60.5 million for the three months ended MarchJune 31,30, 2026, compared to $50.1$52.7 million for the three months ended MarchJune 31,30, 2025. The increase of $8.8$7.9 million, or 17.5%,14.9%, was primarily driven by an increase in average billed clients and average total account balances, the acquisition of Sila, and growth in interest income due to higher balances of permissible investments offset by a reduction in interest rates and decreased average monthly enrollments.
Revenue from our Treasury Solutions segment was $119.4 million for the six months ended June 30, 2026, compared to $102.7 million for the six months ended June 30, 2025. The increase of $16.6 million, or 16.2%, was primarily driven by an increase in average billed clients and average total account balances, the acquisition of Sila, and growth in interest income due to higher balances of permissible investments offset by a reduction in interest rates and decreased average monthly enrollments.
Adjusted EBITDA from our Treasury Solutions segment was $46.7$47.5 million for the three months ended MarchJune 31,30, 2026, compared to $42.4$45.6 million for the three months ended MarchJune 31,30, 2025. The increase of $4.2$2.0 million, or 10.0%,4.3%, was primarily driven by increases in revenues.
Adjusted EBITDA from our Treasury Solutions segment was $94.2 million for the six months ended June 30, 2026, compared to $88.0 million for the six months ended June 30, 2025. The increase of $6.2 million, or 7.0%, was primarily driven by increases in revenues.
Our Unaudited Consolidated Financial Statements have been prepared in accordance with GAAP for interim periods, which often require the judgment of management in the selection and application of certain accounting principles and methods. Our critical accounting policies and estimates are discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to these critical accounting policies and estimates as of MarchJune 31,30, 2026.
Our working capital, defined as current assets less current liabilities, was $122.9$151.8 million at MarchJune 31,30, 2026 and $61.9$76.7 million at MarchJune 31,30, 2025. As of MarchJune 31,30, 2026, we had cash totaling $92.2$120.3 million compared to $47.6$50.6 million at MarchJune 31,30, 2025. These cash balances do not include restricted cash of $16.4$17.4 million and $11.5$14.2 million at MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively, which reflects cash accounts holding customer settlement funds andfunds, cash reserves for potential losses.losses and other contractual restricted cash balances. The current portion of long-term debt included in current liabilities was $0.5$3.1 million and $1.9$4.3 million at MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively. At MarchJune 31,30, 2026, we had availability of approximately $100.0 million under our revolving credit facility.
The following table and discussion reflect our changes in cash flows for the comparative threesix month periods.
Net cash provided by operating activities was $23.8$55.3 million for the threesix months ended MarchJune 31,30, 2026 compared to $10.0$27.1 million for the threesix months ended MarchJune 31,30, 2025. The $13.8$28.2 million increase was driven by an increase in net income and favorable non-cash adjustments and changes in the operating assets and liabilities.
Cash Provided by/(Used in) Investing Activities
Net cash providedused byin investing activities was $11.4$203.0 million for the threesix months ended MarchJune 31,30, 2026, compared to $9.7$21.1 million of cash used in investing activities for the threesix months ended MarchJune 31,30, 2025. For the threesix months ended MarchJune 31,30, 2026, investing activities included the $25.0$12.6 million redemptionadditions ofto short-termproperty, investmentsequipment ofand MTLsoftware, funds offset by $8.1$3.0 million related to net funding of new loans to ISOs and $5.5ISVs, $185.0 million additionsnet short-term investments of MTL funds, and $2.4 million related to property,residual equipmentpurchases and software.investments in unconsolidated entities. For the threesix months ended MarchJune 31,30, 2025, net cash used in investing activities included additions to property, equipment and software of $5.1$13.0 million, $0.1$1.4 million related to net funding of new loans to ISOs and ISVs, $4.5 million related to the acquisition of a business.business and $2.3 million investments in unconsolidated entities.
Cash Provided by FinanceFinancing Activities
Net cash provided by financing activities was $70.6$83.2 million and $47.3$178.1 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The net cash provided by financing activities for the threesix months ended MarchJune 31,30, 2026, included borrowings under the Residual Finance credit facility of $6.8$7.7 million and changes in the net obligations for funds held on the behalf of customers of $65.0$77.4 million, offset by $0.2 million of cash used for the repayment of the Residual Finance credit facility, $0.9$1.5 million of cash used to purchase shares withheld for taxes, and $0.1 million for a deferred consideration payment. The net cash used in financing activities for the threesix months ended MarchJune 31,30, 2025, included changes in the net obligations for funds held on the behalf of customers of $59.1$190.9 million and proceeds from the exercise of stock options of $0.1$0.3 million offset by $10.0 million of cashedcash used for the unscheduled repayment of the term loan principalprincipal, for the 2024 Credit Agreement, $1.5$2.3 million of cash used forto purchase shares withheld for taxes and $0.4$0.8 million offor payments of contingentdeferred consideration.
As of MarchJune 31,30, 2026, we had outstanding debt obligations, including the current portion and unamortized debt discount of $1.06$1,062.9 billion,million, compared to $1.06$1,055.4 billionmillion at December 31, 2025, resulting in an increase due to net borrowings from the Residual Finance credit facility. The debt balance at MarchJune 31,30, 2026 consisted of $1.02$1,020.0 billionmillion outstanding under the 2024 Credit Agreement's (as amended) term facility and $0.04$42.9 billionmillion under the Residual Finance Credit Facility's term facility offset by $15.6$15.1 million of unamortized debt discounts and issuance costs.
PRTH insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 3 filings (3 insiders, 1 trade date, 3,565 shares, about $23.8K). Net open-market shares: -3,565 (purchases minus sales); net value about -$23.8K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-10-01 | Main Clayton James |
Option exercise | 4,296 | — | — |
| 2026-10-01 | Crisafulli Marc A |
Option exercise | 4,296 | — | — |
| 2026-10-01 | Davis Marietta |
Option exercise | 4,296 | — | — |
| 2026-10-01 | Davis Marietta |
Disposition to issuer | 1,159 | $7.80 | $9.0K |
| 2026-10-01 | Passilla Michael |
Option exercise | 4,296 | — | — |
| 2026-10-01 | Passilla Michael |
Disposition to issuer | 1,159 | $7.80 | $9.0K |
| 2026-10-01 | Favilla Christina M |
Option exercise | 4,296 | — | — |
| 2026-10-01 | Favilla Christina M |
Disposition to issuer | 1,229 | $7.80 | $9.6K |
| 2026-09-19 | O'leary Tim |
Option exercise | 61,727 | — | — |
| 2026-09-19 | O'leary Tim |
Option exercise | 31,496 | — | — |
| 2026-09-19 | O'leary Tim |
Disposition to issuer | 27,352 | $5.83 | $159.5K |
| 2026-08-01 | Sun Yi |
Disposition to issuer | 7,338 | $6.50 | $47.7K |
| 2026-08-01 | Sun Yi |
Grant/award | 25,000 | — | — |
| 2026-07-01 | Crisafulli Marc A |
Option exercise | 4,296 | — | — |
| 2026-07-01 | Favilla Christina M |
Open-market sale | 1,229 | $6.67 | $8.2K |
| 2026-07-01 | Favilla Christina M |
Option exercise | 4,296 | — | — |
| 2026-07-01 | Passilla Michael |
Option exercise | 4,296 | — | — |
| 2026-07-01 | Passilla Michael |
Open-market sale | 1,168 | $6.67 | $7.8K |
| 2026-07-01 | Davis Marietta |
Option exercise | 4,296 | — | — |
| 2026-07-01 | Davis Marietta |
Open-market sale | 1,168 | $6.67 | $7.8K |
| 2026-07-01 | Main Clayton James |
Option exercise | 4,296 | — | — |
| 2026-02-18 | Ram Ranjana |
Disposition to issuer | 12,762 | $5.50 | $70.2K |
| 2026-02-18 | Sun Yi |
Disposition to issuer | 5,268 | $5.50 | $29.0K |
Well-known investors holding PRTH (13F)
None of the 59 investors we track reported a position in their latest 13F.