0001653558-25-000102
SEC filingRevenue grew 9.1% to $239.8M in Q2 2025, driven by SMB and Enterprise segments; net income improved to $10.9M.
For the three months ended June 30, 2025, consolidated revenue rose 9.1% to $239.8 million from $219.9 million in the prior-year quarter, driven by broad-based growth across all segments. Merchant card fees increased 6.6% to $180.5 million, money transmission services jumped 25.3% to $39.3 million, outsourced services grew 3.7% to $16.9 million, and equipment revenue rose 5.9% to $3.2 million. Cost of revenue (excluding D&A) increased 6.7% to $147.4 million, while total operating expenses grew 8.4% to $202.5 million, with salary and benefits up 22.3% due to headcount additions and the Letus acquisition. Net income swung sharply to $10.9 million from $1.0 million in Q2 2024, boosted by reduced debt extinguishment costs ($0 vs $8.6 million) and higher operating leverage. For the six months ended June 30, 2025, revenue increased 9.1% to $464.4 million, and net income rose to $19.1 million from $6.2 million.
SMB Payments revenue grew 5.2% to $163.2 million in Q2, driven by higher processing volume and transaction counts, but Adjusted EBITDA declined 3.0% to $27.7 million due to margin compression from merchant mix. Key indicators showed merchant bankcard dollar value up 2.2% and transaction count up 6.0%. B2B Payments revenue increased 14.4% to $25.0 million, with Adjusted EBITDA surging 146.4% to $3.8 million, benefiting from incentive income and processing volume gains despite lower issuing volume. Enterprise Payments revenue rose 20.6% to $52.7 million, and Adjusted EBITDA grew 22.3% to $45.6 million, reflecting higher billed clients, new enrollments, and the Letus acquisition. Interest income contributed to outsourced services growth. The corporate segment reported negative Adjusted EBITDA of $21.0 million, reflecting centralized overhead costs.
Management expects cash on hand, operating cash flows, and available borrowings under the $70.0 million revolving credit facility to be sufficient for working capital needs over the next 12 months. The company continues to invest in technology and acquisitions, as evidenced by the Letus acquisition and capital expenditures of $13.0 million in H1 2025. No specific revenue or earnings guidance was provided. The effective tax rate for 2025 is 28.9%, impacted by valuation allowances on business interest carryovers. The recent enactment of the One Big Beautiful Bill Act is being evaluated for potential effects on tax provisions.
As of June 30, 2025, cash and cash equivalents stood at $50.6M, down from $58.6M at year-end 2024. Total debt obligations (gross) were $935.5M, a decrease of $10M due to scheduled repayments. The company's stockholders' deficit widened to $144.1M (from $165M deficit at year-end), driven by share repurchases and accumulated losses. Settlement assets and obligations ballooned to over $1.1B, reflecting growth in money transmission services. The company maintains a net debt position with $935.5M debt versus $50.6M cash, but note the high liquidity from settlement assets (restricted).
Purchase commitments total $44.0M, consisting of minimum processing fee agreements ($36.9M over 2025-2026), a $5.6M capital contribution commitment to fund subsidiary operations, and a $1.5M minimum investment in an unconsolidated entity expected in 2025. Deferred consideration liabilities from acquisitions reached $16.4M (up from $10.7M at year-end due to the Payslate acquisition), with $0.6M current and $3.9M noncurrent, plus accretion of $2.0M in H1 2025. The company also has a capital contribution commitment of $5.6M and a $1.5M investment commitment.
Share repurchases: The Board authorized a new $40M buyback program on May 5, 2025 (replacing the prior $10M authorization). Through June 30, 2025, the company repurchased 1,309,374 shares for $5.8M, leaving $34.2M available. No dividends were paid. Debt management: Net debt decreased by $10M due to term loan repayments; no new debt issued. Capital expenditures totaled $13.0M in H1 2025 (2.8% of revenue), up from $11.7M in H1 2024, driven by software and equipment investments. The subsequent event (July 31, 2025) included a new $1.0B term loan refinancing, accelerating deferred consideration payments and acquiring noncontrolling interests.
Segment contribution (three months ended June 30, 2025): SMB Payments generated $163.2M revenue (+5.2% YoY) and $27.7M Adjusted EBITDA; B2B Payments $25.0M revenue (+14.2%) and $3.8M EBITDA; Enterprise Payments $52.7M revenue (+20.7%) and $45.6M EBITDA. Enterprise Payments dominates profitability with 59% of total segment EBITDA despite only 22% of revenue, reflecting high-margin money transmission and outsourced services. Geographic mix is not disclosed beyond minor foreign currency translation adjustments (Canada and India operations).