RPAY 10-K & 10-Q changes, risk factors and insider trading

Many of our competitors have substantially greater financial, technological, management and marketing resources than we have. Accordingly, if these competitors target our business model and, in particular, the vertical markets that we serve, they may be able to offer more attractive fees or payment terms and advances to our clients and more attractive compensation to our software integration partners. They also may be able to offer and provide services and solutions that we do not offer. ThereIn areaddition, alsocertain aclients, largeparticularly numberlarger ofenterprises, smallmay providersseek ofto processingdevelop services,or includingbring emergingin-house technology and non-traditionalcertain payment processing companies,capabilities thator provideotherwise variousreduce rangestheir reliance on third-party payment service providers. If such efforts are successful, we could experience reduced transaction volumes, pricing pressure or the loss of servicesclient to our existing and potential clients. This competition may effectively limit the prices we can charge, cause us to increase the compensation we pay to our software integration partners and require us to control costs aggressively in order to maintain acceptable profit margins.relationships.

Although we generally require that our agreements with our software integration partners or service providers include confidentiality obligations that restrict these parties from using or disclosing any client or consumer data except as necessary to perform their services under the applicable agreements,obligations, we cannot guarantee that these contractual measures will prevent the unauthorized use, modification, destruction or disclosure of data or allow us to seek reimbursement from the contracted party. In addition, many of our clients are small and medium-sized businesses that may have limited competency regarding data security and handling requirements and may thus experience data breaches. Any unauthorized use, modification, destruction or disclosure of data could result in protracted and costly litigation and the incurrence of significant losses by us.

Security breaches may be subject to scrutiny from governmental agencies such as the CFPB, the FTC andFTC, the U.S. Department of Health and Human Services Office for Civil Rights.Rights, state attorneys general and the CFPB. See “Risks Related to Regulation” below.

The electronic payments market is subject to constant and significant changes. This market is characterized by rapid technological evolution, new product and service introductions, evolving industry standards, changing client needs and the entrance of new competitors, including products and services that enable card networks and banks to transact with consumers directly. For example, in July 2023, the U.S. Federal Reserve launched its FedNow Service that enables individuals and businesses to send instant payments through their depositary institution accounts. To remain competitive, we continually pursue initiatives to develop new products and services to compete with these new market entrants. These projects carry risks, such as difficulty in determining market demand and timing for delivery, cost overruns, delays in delivery, performance problems and lack of client acceptance, and some projects may require investment in non-revenue generating products or services that our software integration partners and clients expect to be included in our offerings. In addition, newadvances productsin automation, data analytics and offeringsartificial mayintelligence notare performincreasingly asbeing intendedincorporated orinto generatepayment processing, risk management, compliance and customer support workflows across the business or revenue growth expected.industry.

The continued growth and development of our payment processing services and solutions will depend on our ability to anticipate and adapt to changes in consumer and business behavior.behavior, client expectations and technology adoption. Any failure to timely integrate emerging payment methods into our software, to anticipate consumer or business behavior changes or to contract with processing partners that support such emerging payment technologies could cause us to lose traction among our clients or referral sources, including industry associations, resulting in a corresponding loss of revenue, if those methods become popular among end-users of their services.

Our products and services are designed to process complex transactions and provide reports and other information on those transactions, all at very high volumes and processing speeds. Our technology offerings must also integrate with a variety of network, hardware, mobile and software platforms and technologies, and we need to continuously modify and enhance our products and services to adapt to changes and innovation in these technologies. Any failure to deliver an effective, reliable and secure service or any performance issue that arises with a new product or service could result in significant processing or reporting errors or other losses. If we do not deliver a promised new product or service to our clients or software integration partners in a timely manner or the product or service does not perform as anticipated, our development efforts could result in increased costs and a loss in business, reducing our earnings and causing a loss of revenue. We also rely in part on third parties, including some of our competitors and potential competitors, for the development of and access to, or production of, new technologies, including software and hardware. For example, we rely on our software integration partners to integrate our services and products into the software platforms being used by our clients. Our future success will depend in part on our ability to develop or adapt to technological changes and evolving industry standards.standards (including those related to automation and artificial intelligence). If we are unable to develop, adapt to or access technological changes or evolving industry standards on a timely and cost-effective basis, our business, financial condition and results of operations could be materially adversely affected.

The electronic payment industry depends heavily on the overall level of consumer and commercial spending. We are exposed to general economic conditions that affect consumer confidence, consumer spending, consumer discretionary income and changes in consumer purchasing habits, including natural disasters and health emergencies, including earthquakes, fires, power outages, typhoons, floods, pandemics or epidemics (such as the COVID-19 pandemic) and manmade events such as civil unrest, labor disruption, international trade disputes, international conflicts, terrorism, wars and critical infrastructure attacks. A sustained deterioration in general economic conditions, particularly in the United States, continued uncertainty for an extended period of time, persistent inflation or increases in interest rates, could adversely affect our financial performance by reducing the number or aggregate volume of transactions made using electronic payments. Our consumer finance and mortgage clients may be disproportionately impacted by increased interest rates or a general economic downturn, which could result in a decrease to our revenue and profits. If our consumer finance or mortgage clients make fewer or smaller loans (or their borrowers fail to make required payments), or consumers and businesses spend less money through electronic payments, we will have fewer transactions to process at lower dollar amounts, resulting in lower revenue. Smaller tax refunds to consumers, due to the absence of additional stimulus or similar impacts or otherwise, could also negatively impact our results of operations.

We and the clients we serve are subject to numerous federal and state regulations that affect the electronic payments industry. RegulationThe ofregulatory environment applicable to our industry has increased significantly in recent yearsbusiness and our clients’ businesses is constantlycomplex, evolving.fragmented and subject to change, and regulatory priorities, interpretations and enforcement approaches may vary over time due to legal, policy, funding and administrative factors. Changes to statutes, regulations or industry standards, including interpretation and implementation of statutes, regulations or standards, could increase our cost of doing business or affect the competitive balance. Failure to comply with regulations may have an adverse effect on our business, including the limitation, suspension or termination of services provided to, or by, third parties, and the imposition of penalties or fines. To the extent these regulations negatively impact the business, operations or financial condition of our clients, our business and results of operations could be materially and adversely affected because, among other matters, our clients could have less capacity to purchase products and services from us, could decide to avoid or abandon certain lines of business, or could seek to pass on increased costs to us by negotiating price reductions. We could be required to invest a significant amount of time and resources to comply with additional regulations or oversight or to modify the manner in which we contract with or provide products and services to our clients; and those regulations could directly or indirectly limit how much we can charge for our services. We may not be able to update our existing products and services, or develop new ones, to satisfy our client’ needs. Any of these events, if realized, could have a material adverse effect on our business, results of operations and financial condition.

We provide payment processing services through our various operating subsidiaries. We, along with our third party service providers, use structural arrangements designed to remove our activities from the scope of money transmitter regulation. There can be no assurance that these structural arrangements will remain effective as money transmitter laws continue to evolve or that the applicable regulatory bodies, particularly state agencies, will view our payment processing activities as compliant. Any determination that we are in fact required to be licensed under the state money transmission statutes may require substantial expenditures of time and money and could lead to liability in the nature of penalties or fines, which would have a materially adverse effect on our business and our financial results.

On July 10, 2024, we increased our existing senior secured credit facilities to a $250.0 million revolving credit facility pursuant to an amendment to the revolving credit agreement with Truist Bank and certain other lenders (the “Second Amended Credit Agreement”). On January 19, 2021, we issued $440.0 million in aggregate principal amount of our 0.00% convertible senior notes due 2026 (the “2026 Notes”). On July 8, 2024, we repurchased $220.0 million of the 2026 Notes. Additionally, on July 8, 2024, we issued $287.5 million in aggregate principal amount of our 2.875% convertible senior notes due 2029 (the “2029 Notes”). On August 22, 2025, we repurchased $73.5 million of the 2026 Notes. On or about February 2, 2026, we used borrowings from the Second Amended Credit Agreement, together with some of our cash hand, to satisfy the remaining obligations under the 2026 Notes. Our ability to service our obligations under our indebtedness, including the 2026 Notes, the 2029 Notes and any indebtedness we have incurred or may further incur under the Second Amended Credit Agreement, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. If we are unable to generate the necessary cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional debt financing or equity capital on terms that may be onerous or highly dilutive.

We may not have the ability to raise the funds necessary to settle conversions of the 2026 Notes or the 2029 Notes, or to repurchase the 2026 Notes or the 2029 Notes upon a fundamental change, and our future debt may contain, limitations on our ability to pay cash upon conversion or repurchase of the 2026 Notes and the 2029 Notes.

Holders of the 2026 Notes and the 2029 Notes (together “Notes”) have the right to require us to repurchase their 2029 Notes upon the occurrence of a fundamental change at a repurchase price equal to 100% of their principal amount, plus accrued and unpaid interest, if any. Upon conversion of the 2026 Notes, unless we elect to cause to be delivered solely shares of our Class A common stock to settle such conversion, we will be required to make cash payments in respect of the 2026 Notes being converted. In addition, upon conversion of the 2029 Notes, we will be required to make cash payments up to the aggregate principal amount of the 2029 Notes being converted and in respect of the remainder, if any, of our conversion obligation, we may elect to make cash payments or deliver shares of our Class A common stock, or a combination, to settle such conversion. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the 2029 Notes surrendered therefor or to pay cash with respect to the 2029 Notes being converted.

In addition, our ability to repurchase the 2029 Notes or to pay cash upon conversion of the 2029 Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness. Our failure to repurchase the 2029 Notes at a time when the repurchase is required by the indenture governing the 2026 Notes and the indenture governing the 2029 Notes (together the “indenturesindenture”) or to pay any cash payable on future conversions of the 2029 Notes as required by the indentures,indenture, would constitute a default under the indentures.indenture. A default under the indentures,indenture, or the fundamental change itself, could also lead to a default under our Second Amended Credit Agreement and other agreements governing our existing or future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness, repurchase, make interest payments on or make cash payments upon conversion of the 2029 Notes.

The conditional conversion feature of the 2026 Notes and the 2029 Notes, if triggered, may adversely affect our financial condition and operating results.

In the event the conditional conversion feature of the 2029 Notes is triggered, holders of the 2029 Notes will be entitled to convert their 2029 Notes at any time during specified periods at their option. If one or more holders elect to convert their notes,2029 Notes, we would be required to settle any converted principal amount of such notes through the payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their notes,2029 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the notes2029 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

Provisions in the indenturesindenture could delay or prevent an otherwise beneficial takeover of the Company

Certain provisions of the 2029 Notes and the indenturesindenture could make a third party attempt to acquire us more difficult or expensive. For example, if a takeover constitutes a fundamental change, then we will be required to make an offer to the holders of the 2029 Notes to repurchase for cash all or part of their outstanding 2029 Notes. In addition, if a takeover constitutes a make-whole fundamental change, then we may be required to increase the conversion rate temporarily. In either case, and in other cases, our obligations under the 2029 Notes could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that you may view as favorable.

We are a holding company and our only material asset is our interest in Hawk Parent, and we are accordingly dependent upon distributions made by our subsidiaries to pay taxes, make payments under the Tax Receivable Agreement, meet our financial obligations under the 2026Second NotesAmended Credit Agreement or the 2029 Notes and pay dividends.

Hawk Parent has outstanding an aggregate of 5,379,5435,285,883 Post-Merger Repay Units as of FebruaryMarch 25,4, 2024.2026. Pursuant to the Exchange Agreement, Repay Unitholders have the right to elect to exchange such Post-Merger Repay Units into shares of our Class A common stock on a one-for-one basis, subject to the terms of the Exchange Agreement. However, Hawk Parent may elect to settle such exchange in cash in lieu of delivering shares of our Class A common stock pursuant to the terms of the Exchange Agreement.

We also have outstanding $220 million aggregate principal amount of our 2026 Notes and $287.5 million aggregate principal amount of our 2029 Notes which are convertible into shares of our Class A common stock in certain circumstances. Investors will incur further dilution upon the conversion of any of our convertible senior notes if we elect to deliver shares of Class A common stock upon such conversion. In the future, we may also issue additional securities in connection with investments, acquisitions or capital raising activities, which could constitute a material portion of our then-outstanding shares of our Class A common stock and may result in additional dilution to investors or adversely impact the price of our Class A common stock.

We have been monitoring the current economic environment in the U.S. and globally – characterized by heightenedinflationary inflationpressures in certain cost categories (including changes in wages and technology-related expenses), risingelevated interest rates,rate supplylevels, chaintighter issues,credit slowerconditions, uneven economic growth and recentperiodic bankingvolatility systemin volatility.financial markets. Such macroeconomic conditions may continue to evolve in ways that are difficult to fully anticipate and may also include increasedthe potential for slowing growth, higher levels of unemploymentunemployment, reduced consumer or commercial spending and/or arecessionary recession.conditions. Some or all of these market factors have and could continue to adversely affect our payment volumes from the consumer loan market, the receivables management industry and consumer and commercial spending. The effect of these events on our financial condition, results of operations and cash flows is uncertain and cannot be predicted at this time. Finally, the impact of all of these various events on our results in 20242025 may not be necessarily indicative of their impact on our results in 2025.2026.

Total revenue was $309.3 million for the year ended December 31, 2025 and $313.0 million for the year ended December 31, 20242024, anda $296.6 million for the year ended December 31, 2023, an increasedecrease of $16.4$3.8 million or 5.5%.1.2%. This increasedecrease was thedue resultto ofimpacts newlyfrom signedpreviously clients,announced theclient growth of our existing clientslosses and political media spending during 2024 associated with the 2024 election cycle in our media payments business.business, partially offset from newly signed clients and the growth of our existing clients.

Costs of services were $77.2 million for the year ended December 31, 2025 and $71.6 million for the year ended December 31, 2024 and $69.7 million for the year ended December 31, 2023,2024, an increase of $1.9$5.6 million or 2.8%.7.8%. This increase was the result of newly signed clients,clients and the growth of our existing clientsclients, partially offset from impacts of previously announced client losses and political media spending during 2024 associated with the 2024 election cycle in our media payments business.

Selling, general and administrative expenses were $142.0 million for the year ended December 31, 2025 and $145.5 million for the year ended December 31, 2024 and $148.7 million for the year ended December 31, 2023,2024, a decrease of $3.2$3.5 million or 2.1%,2.4%, primarily due to a $3.0$6.1 million decrease in transactionequity compensation expenses relatedand to$2.2 themillion disposition of BCSdecrease in thecompensation priorexpenses, yearpartially period.offset by a $3.4 increase in legal and other litigation fees and a $1.5 million increase in professional service fees.

Depreciation and amortization expenses were $103.7$102.0 million for the year ended December 31, 20242025 and $103.9$103.7 million for year ended December 31, 2023,2024, a decrease of $0.2$1.7 million or 0.1%.1.6%. This decrease was driven by a decrease in amortization of software and non-compete agreements.

We incurred ana non-cash impairment loss of $75.8$242.7 million forduring the year ended December 31, 2023,2025, primarily due to a $75.7$241.7 million goodwill impairment loss related to the BusinessConsumer Payments segment and a $0.1 million trade name write-off related to Media Payments.segment. The fair value of the BusinessConsumer Payments reporting unit was primarily impacted by a change in the discount rate.rate and the decrease to comparable publicly traded companies’ multiples. See Note 8. Intangible Assets and Note 9. Goodwill for more information.

Interest income was $4.1 million for the year ended December 31, 2025 and $6.0 million for the year ended December 31, 20242024, anda $2.8 million for the year ended December 31, 2023, an increasedecrease of $3.2$1.9 million, due to higherlower average interest rates earned on our cash and cash equivalents.equivalents and lower average cash balance during the second half of year primarily due to the use of cash to reduce the amount of 2026 Notes outstanding.

We incurred a gain of $1.4 million and $13.1 million on extinguishment of debt for the year ended December 31, 2025 and 2024, respectively, due to the repurchase of $220.0 million of 2026 Notes principal andprincipal, net of a write-off of debt issuance costs relating to the repurchased principal.

We incurred a loss, related to accretion expense and fair value adjustment of the tax receivable liability of $13.5 million for the year ended December 31, 2025 compared to a net loss of $14.5 million for the year ended December 31, 2024 compared to2024, a net lossdecrease of $6.6 million for the year ended December 31, 2023, an increase of $7.9$1.0 million. This increasedecrease was due to smaller fair value adjustments related to the tax receivable liability, primarily as a result of a smaller decrease to the discount rate, also referred to as the Early Termination Rate, used to determine the fair value of the liability.

Income Tax Benefit and Expense

The income tax benefit was $0.6$5.9 million for the year ended December 31, 2024,2025, reflecting the expected income tax benefit on the loss generated over the same period. This was a result of the operating loss incurred by the Company,Company primarily drivenoffset by the change in fair value of the tax receivable liability, impairment loss, loss on business disposition, stock-based compensation deductions and the amortization of assets acquired in the Business CombinationCombination, the impact of taxes not being provided for certain non-controlling interests, and priorstock-based acquisitions.compensation expense net tax shortfall. The income tax benefit was $2.1$0.6 million for the year ended December 31, 2023,2024. whichThis reflectedwas a result of the expectedoperating incomeloss incurred by the Company, taxes imposed on earnings in certain state jurisdictions, stock based-compensation expense net shortfall, and the creation of Federal and state research and development credits and partially offset by certain state rate changes on deferred taxes, stock-based compensation expense net tax benefitshortfall, and the differential in tax rates on theforeign lossbased generated over the same period.earnings.

Revenue for the BusinessConsumer Payments segment was $52.9$285.9 million for the year ended December 31, 20242025 and $38.1$281.0 million for the year ended December 31, 2023,2024, representing a $14.9$4.9 million or 39.1%1.8% year-over-year increase. This increase was the result of newly signed clients,clients and the growth of existing clientsclients, andpartially politicaloffset mediafrom spendingimpacts associatedfrom withpreviously theannounced 2024client election cycle in our media payments business.losses.

Gross profit for the BusinessConsumer Payments segment was $39.1$223.8 million for the year ended December 31, 20242025 and $28.0$223.1 million for the year ended December 31, 2023,2024, representing a $11.2$0.6 million or 40.0%0.3% year-over-year increase. This increase was the result of newly signed clients,clients and the growth of existing clientsclients, andpartially politicaloffset mediafrom spendingimpacts associatedfrom withpreviously theannounced 2024client election cycle in our media payments business.losses.

Adjusted EBITDA is a non-GAAP financial measure that represents net income prior to interest expense, tax expense, depreciation and amortization, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as loss on business disposition, gain on extinguishment of debt, non-cash change in fair value of contingent consideration, non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation charges, transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges.

Adjusted Net Income is a non-GAAP financial measure that represents net income prior to amortization of acquisition-related intangibles, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as loss on business disposition, gain on extinguishment of debt, non-cash change in fair value of contingent consideration, non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation expense, transaction expenses, restructuring and other strategic initiative costs, other non-recurring charges, non-cash interest expense and net of tax effect associated with these adjustments. Adjusted Net Income is adjusted to exclude amortization of all acquisition-related intangibles as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Management believes that the adjustment of acquisition-related intangible amortization supplements GAAP financial measures because it allows for greater comparability of operating performance. Although we exclude amortization from acquisition-related intangibles from our non-GAAP expenses, management believes that it is important for investors to understand that such intangibles were recorded as part of purchase accounting and contribute to revenue generation.

See footnote (kj) for details on our amortization and depreciation expenses.

For the year ended December 31, 2025, reflects non-cash goodwill impairment loss primarily related to the Consumer Payments segment and non-cash impairment loss related to operating lease ROU assets. For the year ended December 31, 2023, reflects non-cash goodwill impairment loss related to the Business Payments segment and non-cash impairment loss related to a trade name write-off of Media Payments. For the year ended December 31, 2022, reflects non-cash impairment loss related to trade names write-offs of BillingTree and Kontrol.

Primarily consists of (i) during the year ended December 31, 2025 and 2024, professional service fees incurred in connection with prior transactions,transactions and (ii) during the year ended December 31, 2023, professional service fees and other costs incurred in connection with the disposition of BCS and (iii) during the year ended December 31, 2022, professional service fees and other costs incurred in connection with the acquisitions of BillingTree, Kontrol and Payix.BCS.

Reflects costs associated with reorganization of operations, consulting fees related to our processing services and other operational improvements, including restructuring and integration activities related to our acquired businesses, that were not in the ordinary course during the years ended December 31, 2024, 2023 and 2022. Additionally, for the year ended December 31, 2022, reflects one-time severance payments.course.

For the year ended December 31, 2025, reflects franchise taxes and other non-income based taxes, non-recurring legal and other litigation expenses and payments made to third-parties in connection with our IT security and personnel. For the year ended December 31, 2024, reflects one-time processing settlements, franchise taxes and other non-income based taxes, non-recurring legal and other litigation expenses and payments made to third-parties in connection with our IT security and personnel. For the year ended December 31, 2023, reflects payments made to third-parties in connection with an expansion of our personnel, franchise taxes and other non-income based taxes and one-time payments to certain partners. For the year ended December 31, 2022, reflects one-time payments to certain clients and partners, payments made to third-parties in connection with a significant expansion of our personnel, franchise taxes and other non-income based taxes, other payments related to COVID-19 and non-cash rent expense.

Adjusted EBITDA for the years ended December 31, 20242025 and 20232024 was $140.8$128.6 million and $126.8$140.8 million, respectively, representing a 11.0%8.7% year-over-year increase.decrease. Adjusted Net Income for the years ended December 31, 20242025 and 20232024 was $87.8$74.4 million and $84.9$87.8 million, respectively, representing a 3.4%15.3% year-over-year increase.decrease. Our net income (loss) attributable to the Company for the years ended December 31, 20242025 and 20232024 was ($10.2)$256.7 million and ($110.5)$10.2 million, respectively, representing a 90.8%2427.8% year-over-year improvement in our profitability.increase.

The increasesdecreases in Adjusted EBITDA,EBITDA and Adjusted Net Income and improvementincrease in net income (loss) attributable to the Company for the year ended December 31, 20242025 were primarily due to the organic growth of our business from newly signed clients, the growth of existing clients,clients and cost savings initiatives being more than offset from impacts from previously announced client losses and political media spending during 2024 associated with the 2024 election cycle in our media payments businessbusiness. andIn costaddition, savingsthe initiativesincrease thatin reducednet bothloss costattributable ofto servicesthe andCompany selling,for generalthe andyear administrativeended expensesDecember as31, a2025 percentagewas ofimpacted revenue.by the goodwill impairment loss.

We have experienced in the past, and may continue to experience, seasonal fluctuations in our volumes and revenues as a result of consumer spending and political media spending patterns. Volumes and revenuesRevenues during the first quarter of the calendar year tend to increase in comparison to the remaining three quarters of the calendar year on a same store basis.year. This increase is due to consumers’ receipt of tax refunds and the increases in repayment activity levels that follow. In addition, Business Payments revenue from clients in our media payments business is cyclical. Revenue connected to political advertising spending increases significantly during the third and fourth quarter of election years, such as the mid-term and presidential election cycles. Operating expenses show less seasonal fluctuation, with the result that net income is subject to the similar seasonal factors as our volumes and revenues.

We are a holding company with no operations and depend on our subsidiaries for cash to fund all of our consolidated operations, including future dividend payments, if any. We depend on the payment of distributions by our current subsidiaries, including Hawk Parent, which distributions may be restricted by law or contractual agreements, including agreements governing their indebtedness. For a discussion of those considerations and restrictions, refer to Part II, Item 1A “Risk Factors -— Risks Related to Our Class A Common Stock.”

On May 16, 2022, our board of directors approved a share repurchase program under which we may repurchase up to $50 million of our outstanding Class A common stock (the “Share Repurchase Program”). On May 8, 2025, our board of directors approved the increase of its authorized Share Repurchase Program to up to $75 million. The Share Repurchase Program has no expiration date but may be modified, suspended or discontinued at any time at our discretion. During the year ended December 31, 2024,2025, we repurchased 158,4967,883,156 shares for a total of approximately $1.3$38.3 million under the Share Repurchase Program. As of December 31, 2024,2025, we havehad $36.2approximately $23.0 million remaining capacity under the Share Repurchase Program. In addition, in July 2024 we used approximately $40.0 million of proceeds from the offering of 2029 Notes to repurchase approximately 3.9 million shares of Class A common stock.

OnOur DecemberAmended 29,Credit 2021,Agreement we increased our then existing senior secured credit facilities by $60.0 million to provideprovided for a $185.0 million revolving credit facility pursuantin tofavor anof amendmentHawk to the Amended Credit Agreement.Parent. On February 9, 2023, we further amended the Amended Credit Agreement to replace LIBOR with term SOFR as the interest rate benchmark.

On February 28, 2023, we repaid in full the entire amount of $20.0 million of the outstanding revolving credit facility.facility at that time. The undrawn capacity of the existing revolving credit facility under the Amended Credit Agreement became $185.0 million after the repayment.

On July 10, 2024, we entered into the Second Amended Credit Agreement with certain financial institutions, as lenders, and Truist Bank, as administrative agent. The Second Amended Credit Agreement amendsamended and restatesrestated the Amended Credit Agreement, dated as of February 3, 2021.Agreement. The Second Amended Credit Agreement establishes a $250.0 million senior secured revolving credit facility. This facility matures on the earlier of (a) July 10, 2029,2029 or (b) the date that is 91 days prior to the maturity date of the 2026 Notes (subject to certain exceptions for adequate liquidity) and (c) the date that is 91 days prior to the maturity date of the 2029 Notes (subject to certain exceptions for adequate liquidity). The maturity date may be extended, subject to certain terms and conditions.

As of December 31, 2024,2025, the Second Amended Credit Agreement providesprovided for a revolving credit facility of $250.0 million. As of December 31, 2024,2025, we had $0 million drawn against the revolving credit facility. We paid $0.6$0.7 million and $0.5$0.6 million in fees related to unused commitments for the years ended December 31, 20242025 and 2023,2024, respectively. See Note 10. Borrowings to the financial statements in Item 8 of this Annual Report on Form 10-K for more information.

On January 19, 2021, we issued $440.0 million in aggregate principal amount of 0.00% Convertible Senior Notes due 2026 in a private placement (the “Notes Offering”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. $40.0 million in aggregate principal amount of such 2026 Notes were sold in the 2026 Notes Offeringoffering in connection with the full exercise of the initial purchasers’ option to purchase such additional 2026 Notes pursuant to the purchase agreement. Upon conversion, the Company may choose to pay or deliver cash, shares of the Company’s Class A Common Stock, or a combination of cash and shares of the Company’s Class A Common Stock. The 2026 Notes will maturematured on February 1, 2026, unless earlier converted, repurchased or redeemed.2026. On July 8, 2024, we used approximately $200.0 million of proceeds from the offering of 2029 Notes and approximately $5.1 million of cash on hand to repurchase $220.0 million in aggregate principal amount of the 2026 Notes in connection with the 2029 Notes offering. On August 22, 2025, we repurchased $73.5 million in aggregate principal amount of the 2026 Notes. On or about February 2, 2026, we repaid $146.5 million of the remaining aggregate principal amount of the 2026 Notes using the $110.0 million borrowing under the revolving credit facility and approximately $36.5 million of cash on hand. The 2026 Notes were satisfied and discharged in full.

On July 8, 2024, we issued $287.5 million aggregate principal amount of 2.875% Convertible Senior Notes due 2029 (the “2029 Notes”) in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. $27.5 million aggregate principal amount of the 2029 Notes were sold in connection with the full exercise of the initial purchasers’ option to purchase such additional 2029 Notes offering pursuant to the purchase agreement. We will settle any conversions of the 2029 Notes by paying cash up to the aggregate principal amount of the 2029 Notes to be converted and cash, shares of Class A common stock or a combination of cash and shares, at our election, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the 2029 Notes being converted. The 2029 Notes bear interest at a fixed rate of 2.875% per year, payable semiannually in arrears on January 15 and July 15 of each year, beginning on January 15, 2025. The 2029 Notes will mature on July 15, 2029, unless earlier repurchased, redeemed, or converted in accordance with their terms.

Our pending acquisition of KUBRA involves a number of risks, the occurrence of which could adversely affect our business, financial condition, and operating results.

In March 2026, we entered into a stock purchase agreement to acquire KUBRA.KUBRA, and we closed the KUBRA Acquisition on June 1, 2026. The acquisition involves certain risks, the occurrence of which could adversely affect our business, financial condition, and operating results, including:

the incurrence of indebtedness in connection with the acquisition, which will increaseincreased our leverage and debt service obligations and may reduce our financial flexibility;

diversion of management's attention to complete the acquisition and integrate KUBRA’s operations thereafterfollowing the closing of the acquisition;

significant transactions costs and expenses associated with the acquisition; and potential loss of key KUBRA employees, partners or customers, or other adverse effects on existing business relationships with partners or customers, including as a result of uncertainty relating tofollowing the acquisition.

Our acquisitions, including the pending KUBRA acquisition,Acquisition, subject us to a variety of risks relating to the integration and operation of those acquisitions or otherwise that could harm our business and the anticipated benefits from our acquisitions may not be realized on the expected timeline or at all.

We may experience various challenges associated with the integration and operation of our acquired businesses, including the pending KUBRA acquisition,Acquisition, such as:

Consumer Payments – Our Consumer Payments segment provides an end-to-end bill payment platform, including bill design & presentment, communication services, and payment processing solutions (including debit and credit card processing, ACH processing and other electronic payment acceptance solutions, as well as our loan disbursement product) that enable our clients to notify, distribute billing statements, collect payments from and disburse funds to consumers and includes our RCS offering. RCS is our proprietary clearing and settlement platform through which we market customizable payment processing programs to other ISOs and payment facilitators. In addition, the Company provides professional services to clients for customization and configuration of the product suite offering. The strategic vertical markets served by our Consumer Payments segment primarily include utilities, personal loans, automotive loans, government, receivables management, financial institutions, credit unions, mortgage servicing, consumer healthcarehealthcare, insurance, and diversified retail.

We have been monitoring the current economic environment in the U.S. and globally – characterized by heightened inflation (including changes in wages), evolving U.S. trade policies, supply chain issues and slower growth. Such macroeconomic conditions may continue to evolve in ways that are difficult to fully anticipate and may also include increased levels of unemployment and/or a recession. Some or all of these market factors have and could continue to adversely affect our payment volumes from the consumer loan market, the receivables management industry and consumer and commercial spending. The effect of these events on our financial condition, results of operations and cash flows is uncertain and cannot be predicted at this time. Finally, the impact of all of these various events on our results in the first threesix months of 2026 may not be necessarily indicative of their impact on our results for the remainder of 2026.

Revenue. As our clients process increased volumes of payments, our revenues increase as a result of the fees we charge for processing these payments. Most of our revenues are derived from volume-based payment processing fees (“discount fees”) and other related fixed per transaction fees. Discount fees represent a percentage of the dollar amount of each credit or debit transaction processed and include fees relating to processing and services that we provide. The transaction price for such processing services is determined, based on the judgment of management, considering factors such as margin objectives, pricing practices and controls, client segment pricing strategies, the product life cycle and the observable price of the service charged to similarly situated clients. During the three and six months ended MarchJune 31,30, 2026 and 2025, our chargeback rate was less than 1% of our card payment volume. With the KUBRA Acquisition, a portion of revenues are derived from bill presentment, communication services, and professional services solutions. Revenues derived from our bill presentment solutions represent a fixed fee per bill, which includes the design, preparation, printing, and distribution of paper or electronic bills, invoices, and documents. Communication services solutions primarily consist of automated messaging, including text and email communications, and service outage notifications for our utility clients. Revenues derived from communication services represent a fixed fee per an interaction, annual subscription fees, and annual maintenance and support fees. In addition, the Company provides professional services to clients for customization and configuration of the product suite offering. Revenues from professional services are recognized on a contract basis.

Interest expense. Interest expense consists of interest paid in respect of our indebtedness under the convertible senior notes and revolving credit facility, asTerm wellLoan asFacility and convertible senior notes, amortization of deferred debt issuance costs.costs and interest on finance lease liabilities.

Change in fair value of tax receivable liability. This amount represents the change in fair value of the tax receivable agreement liability. The TRA liability is carried at fair value; so, any change to the valuation of this liability is recognized through this line in otherOther expense.income (expense). The change in fair value can result from the redemption or exchange of Post-Merger Repay Units for Class A common stock of Repay Holdings Corporation, through accretion of the discounted fair value of the expected future cash payments, changes to income tax rates, or changes to the discount rate, or Early Termination Rate, used to determine the fair value of the liability.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Total revenue was $80.8$100.7 million for the three months ended MarchJune 31,30, 2026, and $77.3$75.6 million for the three months ended MarchJune 31,30, 2025, an increase of $3.5$25.1 million or 4.5%.33.2%. This increase was the result of newly signed clients and the growth of our existing clients.clients, as well as the KUBRA Acquisition. For the three months ended June 30, 2026, incremental revenues of approximately $20.8 million are attributable to KUBRA.

Costs of services were $19.3$30.1 million for the three months ended MarchJune 31,30, 2026, and $18.7$18.4 million for the three months ended MarchJune 31,30, 2025, an increase of $0.6$11.7 million or 3.2%.63.6%. This increase was the result of newly signed clients and the growth of our existing clients.clients, as well as the KUBRA Acquisition. For the three months ended June 30, 2026, incremental cost of services of approximately $11.4 million are attributable to KUBRA.

Selling, general and administrative expenses were $36.0$46.2 million for the three months ended MarchJune 31,30, 2026, and $37.0$32.9 million for the three months ended MarchJune 31,30, 2025, aan decreaseincrease of $1.0$13.4 million or 2.7%,40.8%, primarily due to a 2.1$5.0 million decreaseincrease infrom transactionthe expensesKUBRA andAcquisition, a $0.3 million decrease in equity compensation expenses, partially offset by a $1.3$3.9 million increase in legal and transaction expenses related to the KUBRA Acquisition and a settlement of litigation, a $2.0 million increase in compensation expenses and a $1.7 million increase in equity compensation expenses.

Depreciation and amortization expenses were $27.6 million for the three months ended June 30, 2026, and $25.5 million for the three months ended MarchJune 31, 2026, and $25.3 million for the three months ended March 31,30, 2025, an increase of $0.2$2.2 million or 0.8%,8.6%, primarily driven by an increase in softwareclient amortization.relationships amortization and depreciation and amortization related to the KUBRA Acquisition of $1.7 million.

Interest income was $0.4$0.3 million for the three months ended MarchJune 31,30, 2026, and $1.4$1.2 million for the three months ended MarchJune 31,30, 2025, due to lower average interest rates earned on our cash and cash equivalents.

Interest expense was $3.8$8.0 million for the three months ended MarchJune 31,30, 2026, and $3.1 million for the three months ended MarchJune 31,30, 2025, due to a higher outstanding principal balance under the Term Loan Facility and convertible senior notes and revolving credit facility.notes.

We incurred a loss, related to accretion expense and fair value adjustment of the tax receivable liability of $4.6$2.5 million for the three months ended MarchJune 31,30, 2026, compared to a $3.0$2.5 million loss for the three months ended MarchJune 31,30, 2025,2025. an increase of $1.6 million. This increaseThere was dueno todifference ain higherthe fair value adjustments related tobecause the tax receivable liability, primarily as a result of accretion, adjustment to the net present value as a result of payments made, and changes to thelower discount rate, or Early Termination Rate, usedon June 30, 2026, compared to determineJune 30, 2025, was offset by a higher Tax Receivable Liability over the fairsame valuemeasurement of the liability.period.

Income Tax Expense and Benefit

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Revenue for the Consumer Payments segment was $75.1$93.7 million for the three months ended MarchJune 31,30, 2026 and $71.9$70.5 million for the three months ended MarchJune 31,30, 2025, representing a $3.1$23.3 million or 4.3%33.1% year-over-year increase. This increase was the result of newly signed clients and the growth of our existing clients.clients, as well as the KUBRA Acquisition. For the three months ended June 30, 2026, incremental revenues of approximately $20.8 million are attributable to KUBRA.

Gross profit for the Consumer Payments segment was $60.3$68.0 million for the three months ended MarchJune 31,30, 2026 and $56.7$55.4 million for the three months ended MarchJune 31,30, 2025, representing a $3.6$12.6 million or 6.3%22.7% year-over-year increase. This increase was the result of newly signed clients and the growth of our existing clients.clients, as well as the KUBRA Acquisition. For the three months ended June 30, 2026, incremental gross profit of approximately $9.4 million are attributable to KUBRA.

Revenue for the Business Payments segment was $13.0$14.5 million for the three months ended MarchJune 31,30, 2026 and $11.0$10.9 million for the three months ended MarchJune 31,30, 2025, representing a $2.0$3.5 million or 18.2%32.0% year-over-year increase. This increase was the result of the growth from newly signed clients and existing clients, as well as political media spending in the firstsecond quarter of 2026.

Gross profit for the Business Payments segment was $8.5$10.1 million for the three months ended MarchJune 31,30, 2026 and $7.6 million for the three months ended MarchJune 31,30, 2025, representing a $0.9$2.5 million or 11.9%33.0% year-over-year increase. This increase was the result of the growth from newly signed clients and existing clients, as well as political media spending in the firstsecond quarter of 2026.

Adjusted EBITDA is a non-GAAP financial measure that represents net income prior to interest expense, tax expense, depreciation and amortization, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as gain on extinguishment of debt, non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation charges, transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges.

Adjusted Net Income is a non-GAAP financial measure that represents net income prior to amortization of acquisition-related intangibles, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation expense, transaction expenses, restructuring and other strategic initiative costs, other non-recurring charges, non-cash interest expense and net of tax effect associated with these adjustments. Adjusted Net Income is adjusted to exclude amortization of all acquisition-related intangibles as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Management believes that the adjustment of acquisition-related intangible amortization supplements GAAP financial measures because it allows for greater comparability of operating performance. Although we exclude amortization from acquisition-related intangibles from our non-GAAP expenses, management believes that it is important for investors to understand that such intangibles were recorded as part of purchase accounting and contribute to revenue generation.

Adjusted Net Income per share is a non-GAAP financial measure that represents Adjusted Net Income divided by the weighted average number of shares of Class A common stock outstanding (on an as-converted basis assuming conversion of the outstanding Post-Merger Repay Units) for the three and six months ended MarchJune 31,30, 2026 and 2025 (excluding shares subject to forfeiture).

The following tables set forth a reconciliation of our results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025.

For the three months ended MarchJune 31,30, 2026 and 2025

For the three months ended MarchJune 31,30, 2026 and 2025

See footnote (gi) for details on amortization and depreciation expenses.