Repay Holdings Corporation Class A Common Stock Canaccord Genuity's 46th Annual Growth Conference
Review the key takeaways and the transcript of this earnings call.
- Repay reported 6% organic growth in Q2, with 2 points from political media and 4% from the consumer business.
- The company achieved $27.4 million in free cash flow in Q2, representing a 75% free cash flow conversion rate.
- Repay expects to exit the year with 10 to 12% organic growth, or 7 to 9% excluding political media.
- The B2B segment grew 19% in Q2 excluding political media and is expected to grow in the mid-teens in the back half of the year.
- Repay completed the acquisition of Cobra, which materially expands the business and adds approximately $240 million in pro forma net revenue with an 18 to 20% EBITDA margin profile.
- Repay identified and committed to $8 million run rate synergies from the Cobra acquisition, with a target of $20 million by the end of 2028.
- The company’s net leverage was 3.7 times at close and is targeted to be below 3 times within 18 months.
- Repay’s revenue mix is roughly 45% core consumer business, 45% Cobra (both reported under consumer segment), and 10% B2B business.
- Repay is investing in new technologies including voice AI and a dynamic wallet to enhance the consumer payment experience.
- The company emphasizes its end-to-end payment and communication platform as a competitive advantage, especially post-Cobra acquisition.
- Repay’s political media business facilitates payments for political advertising and is expected to contribute $8 to $10 million in revenue in Q3 and Q4 due to the midterm election cycle.
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Transcript
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All right. We are continuing here at the 46th Annual Canaccord Growth Conference. I'm Joe Vafi, equity research analyst here at Canaccord, focused on digital assets. Up next, we're pleased to have the team from Repay with us, and that's John Morris, CEO, and Rob Houser, CFO. Repay is a payment technology and software company providing electronic payment processing solutions for businesses, lenders, and financial institutions. The platform handles consumer payments, B2B vendor payments, and loan repayments across multiple payment channels. The company recently closed on an exciting acquisition called KUBRA, which materially increases the size of the company, and we will get into that a little bit more here. We like the Repay story relative valuation, margin profile, and free cash flow generation. So with that, thanks for being with us here today, John.
Thank you. And Rob. Thank you.
Great. So maybe we'll just start off, maybe John, you want to introduce Repay to us in your own words, and where you are right now in the evolution of the company, and then we'll get into more detailed questions from there.
Sounds great. Yeah, so thank you for joining us today. From a Repay perspective, on a post-KUBRA basis, the new Repay is we think we're one of the leading providers of consumer bill payment, bill presentment across the U.S. and Canada. We offer the most modern consumer experience where the modern consumer is today, and that consumer is us, and how we're operating, how we interact with a large biller. We provide services to some of the largest billers in the U.S., whether it may be on the consumer finance side, and now on the utility municipality side, and the government side. And our ability to offer that end-to-end comprehensive solution, that we can provide all those communication services, those bill presentment services, and obviously the payment services of that.
And we'll share a little bit more about that as we walk through today, but our ability to offer that end-to-end enhanced consumer experience on behalf of our clients, which will be many of the large billers that you interact with as consumers.
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