Priority Technology Holdings’ Mixed Earnings Call Reveals Growth and Challenges

Priority Technology Holdings ((PRTH)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call for Priority Technology Holdings revealed a mixed sentiment among company executives and stakeholders. While there was notable growth in the Payables and Treasury Solutions segments, challenges in the Merchant Solutions segment and broader macroeconomic factors led to a downward revision in revenue guidance. Despite these hurdles, the company showcased resilience through improved profitability metrics and strategic initiatives.

Revenue and Profit Growth

Priority Technology Holdings reported a commendable 6% increase in net revenue, alongside a 10% rise in adjusted gross profit, and a 6% growth in adjusted EBITDA for the third quarter of 2025. These figures underscore the company’s ability to maintain financial health amidst a challenging economic environment.

Customer Base Expansion

The company successfully expanded its customer base, ending the third quarter with over 1.7 million customer accounts, up from 1.4 million in the previous quarter. This expansion was accompanied by an increase in annual transaction volume by nearly $4 billion, reaching $144 billion.

Strong Performance in Payables and Treasury Solutions

The Payables and Treasury Solutions segments were standout performers, reporting revenue growth of 14% and 18%, respectively. This growth significantly contributed to the overall margin expansion, highlighting the strength of these business areas.

Strategic Acquisitions and Investments

Priority Technology Holdings completed strategic acquisitions of Boom Commerce and Dealer Merchant Services. Additionally, the launch of a new residual financing facility aims to support growth in ISO and ISV partnerships, further strengthening the company’s market position.

Positive Adjusted EPS Growth

The company reported a substantial increase in adjusted EPS, which rose by $0.10 or 56% year-over-year to $0.28 in the third quarter. This growth reflects the company’s effective cost management and operational efficiency.

Improved Gross Profit Margins

Gross profit margins improved to 38.9% year-to-date, prompting an increase in the full-year gross profit guidance. This improvement is a testament to the company’s focus on enhancing profitability.

Merchant Solutions Segment Challenges

Despite overall growth, the Merchant Solutions segment experienced a slowdown, with growth decelerating to 2%. This was attributed to a decline in same-store sales across multiple areas, impacting revenue expectations.

Revised Revenue Guidance

Due to moderated growth in the Merchant Solutions segment, Priority Technology Holdings revised its full-year revenue guidance downward from $970 million to $990 million to $950 million to $965 million. This adjustment reflects the company’s cautious approach in light of current market conditions.

Impact of Macro-Economic Factors

Macroeconomic factors, including reduced consumer spending in sectors such as restaurants, construction, and wholesale trade, have adversely affected segment performance, posing challenges to the company’s growth trajectory.

Increased Operating Expenses

Operating expenses saw a significant increase, with salaries and benefits rising by 20.2% and SG&A expenses increasing by 26.7% compared to the previous year. These increases were primarily due to recent acquisitions and other strategic initiatives.

Debt Levels and Leverage

The company’s total debt reached $1 billion, with net leverage increasing to 4.35x from 4.1x in the previous quarter. This rise in debt levels highlights the financial commitments associated with the company’s growth strategies.

Forward-Looking Guidance

Looking ahead, Priority Technology Holdings provided guidance on several key metrics. The company expects revenue growth at the lower end of their range, between 8% to 10%, and has revised its full-year revenue guidance downward to $950 million to $965 million. However, they have raised the low end of their full-year gross profit guidance to $370 million, with the upper end at $380 million, and slightly improved their adjusted EBITDA guidance to $223 million to $228 million. The company remains optimistic about the growth potential in their Payables and Treasury Solutions segments.

In conclusion, Priority Technology Holdings’ earnings call highlighted a mixed bag of results, with strong performances in certain segments offset by challenges in others. The company’s strategic initiatives and focus on profitability metrics demonstrate resilience in the face of economic headwinds. Investors and stakeholders will be keenly watching how the company navigates these challenges in the coming quarters.