Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 07, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-37872 | ||
Entity Registrant Name | Priority Technology Holdings, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 47-4257046 | ||
Entity Address, Address Line One | 2001 Westside Parkway | ||
Entity Address, Address Line Two | Suite 155 | ||
Entity Address, City or Town | Alpharetta, | ||
Entity Address, State or Province | GA | ||
Entity Address, Postal Zip Code | 30004 | ||
City Area Code | 404 | ||
Local Phone Number | 952-2107 | ||
Title of 12(b) Security | Common Stock, $0.001 par value | ||
Trading Symbol | PRTH | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction | false | ||
Entity Shell Company | false | ||
Public Float | $ 69.9 | ||
Entity Common Stock, Shares Outstanding | 75,792,939 | ||
Documents Incorporated by Reference | Portions of the definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A relating to the Annual Meeting of shareholders of Priority Technology Holdings, Inc., scheduled to be held on May 22, 2024, will be incorporated by reference in Part III of this Form 10-K. Priority Technology Holdings, Inc. intends to file such proxy statement with the Securities and Exchange Commission no later than 120 days after its fiscal year ended December 31, 2023. | ||
Entity Central Index Key | 0001653558 | ||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Security Exchange Name | NASDAQ |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Auditor Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | EY |
Auditor Location | Atlanta, Georgia |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 39,604 | $ 18,454 |
Restricted cash | 11,923 | 10,582 |
Accounts receivable, net of allowances of $5,289 and $1,143, respectively | 58,551 | 78,113 |
Prepaid expenses and other current assets | 13,273 | 11,832 |
Current portion of notes receivable, net of allowances of $0 and $0, respectively | 1,468 | 1,471 |
Settlement assets and customer/subscriber account balances | 756,475 | 532,018 |
Total current assets | 881,294 | 652,470 |
Notes receivable, less current portion | 3,728 | 3,191 |
Property, equipment and software, net | 44,680 | 34,687 |
Goodwill | 376,103 | 369,337 |
Intangible assets, net | 273,350 | 288,794 |
Deferred income taxes, net | 22,533 | 16,447 |
Other noncurrent assets | 13,649 | 8,437 |
Total assets | 1,615,337 | 1,373,363 |
Current liabilities: | ||
Accounts payable and accrued expenses | 52,643 | 51,864 |
Accrued residual commissions | 33,025 | 35,979 |
Customer deposits and advance payments | 3,934 | 2,618 |
Current portion of long-term debt | 6,712 | 6,200 |
Settlement and customer/subscriber account obligations | 755,754 | 533,340 |
Total current liabilities | 852,068 | 630,001 |
Long-term debt, net of current portion, discounts and debt issuance costs | 631,965 | 598,926 |
Other noncurrent liabilities | 18,763 | 11,643 |
Total liabilities | 1,502,796 | 1,240,570 |
Commitments and contingencies (Note 16) | ||
Redeemable senior preferred stock, $0.001 par value per share; 250,000 shares authorized; 225,000 issued and outstanding at December 31, 2023 and December 31, 2022 | 258,605 | 235,579 |
Stockholders' deficit: | ||
Preferred stock, $0.001 par value per share; 100,000,000 shares authorized; none issued or outstanding at December 31, 2023 and December 31, 2022 | $ 0 | $ 0 |
Common stock issued (in shares) | 79,589,055 | 78,385,685 |
Common stock, shares outstanding (in shares) | 76,956,889 | 76,044,629 |
Common Stock, $0.001 par value per share; 1,000,000,000 shares authorized; 79,589,055 and 78,385,685 shares issued at December 31, 2023 and December 31, 2022, respectively; and 76,956,889 and 76,044,629 shares outstanding at December 31, 2023 and December 31, 2022, respectively. | $ 77 | $ 76 |
Treasury stock at cost, 2,632,166 and 2,341,056 shares at December 31, 2023 and December 31, 2022, respectively | (12,815) | (11,559) |
Additional paid-in capital | 0 | 9,650 |
Accumulated other comprehensive income | (29) | 0 |
Accumulated deficit | (134,951) | (102,208) |
Total stockholders' deficit attributable to stockholders of PRTH | (147,718) | (104,041) |
Non-controlling interests in consolidated subsidiaries | 1,654 | 1,255 |
Total stockholders' deficit | (146,064) | (102,786) |
Total liabilities, redeemable senior preferred stock and stockholders' deficit | $ 1,615,337 | $ 1,373,363 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable allowance for credit loss | $ 5,289 | $ 1,143 |
Notes receivable, allowance for credit loss | $ 0 | $ 0 |
Redeemable senior preferred stock par value (USD per share) | $ 0.001 | $ 0.001 |
Redeemable senior preferred stock, shares authorized (in shares) | 250,000 | 250,000 |
Redeemable senior preferred stock, shares issued (in shares) | 225,000 | 225,000 |
Redeemable senior preferred stock, shares outstanding (in shares) | 225,000 | 225,000 |
Preferred stock par value (USD per share) | $ 0.001 | $ 0.001 |
Preferred stock authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock issued (in shares) | 79,589,055 | 78,385,685 |
Common stock, shares outstanding (in shares) | 76,956,889 | 76,044,629 |
Treasury stock (in shares) | 2,632,166 | 2,341,056 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
Revenues | $ 755,612 | $ 663,641 | $ 514,901 |
Operating expenses | |||
Costs of services (excludes depreciation and amortization) | 480,307 | 436,753 | 359,885 |
Salary and employee benefits | 79,974 | 65,077 | 43,818 |
Depreciation and amortization | 68,395 | 70,681 | 49,697 |
Selling, general and administrative | 45,412 | 34,965 | 28,408 |
Total operating expenses | 674,088 | 607,476 | 481,808 |
Operating income | 81,524 | 56,165 | 33,093 |
Other (expense) income | |||
Interest expense | (76,108) | (53,554) | (36,485) |
Debt extinguishment and modification costs | 0 | 0 | (8,322) |
Gain on sale of business and investment | 0 | 0 | 7,643 |
Other income, net | 1,736 | 589 | 202 |
Total other (expense) income, net | (74,372) | (52,965) | (36,962) |
Income (loss) before income taxes | 7,152 | 3,200 | (3,869) |
Income tax expense (benefit) | 8,463 | 5,350 | (5,258) |
Net (loss) income | (1,311) | (2,150) | 1,389 |
Less: Dividends and accretion attributable to redeemable senior preferred stockholders | (47,744) | (36,880) | (18,009) |
Less: NCI preferred unit redemptions, net of deferred tax benefit | 0 | 0 | (8,021) |
Net (loss) income available to common stockholders | (49,055) | (39,030) | (24,641) |
Other comprehensive loss | |||
Foreign currency translation adjustments | (29) | 0 | 0 |
Comprehensive loss | $ (49,084) | $ (39,030) | $ (24,641) |
Loss per common share: | |||
Basic (in dollars per share) | $ (0.63) | $ (0.50) | $ (0.34) |
Diluted (in dollars per share) | $ (0.63) | $ (0.50) | $ (0.34) |
Weighted-average common shares outstanding: | |||
Basic (in shares) | 78,333 | 78,233 | 71,902 |
Diluted (in shares) | 78,333 | 78,233 | 71,902 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit and Non-Controlling Interests - USD ($) $ in Thousands | Total | Deficit Attributable to Stockholders | Common Stock | Treasury Stock | APIC | AOCI | Accumulated Deficit | NCIs |
Beginning balance (in shares) at Dec. 31, 2020 | 67,391,000 | |||||||
Beginning balance at Dec. 31, 2020 | $ (98,564) | $ (98,564) | $ 68 | $ (2,388) | $ 5,769 | $ 0 | $ (102,013) | $ 0 |
Beginning balance (in shares) at Dec. 31, 2020 | 451,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity-classified stock-based compensation | 2,888 | 2,888 | 2,888 | |||||
Vesting of stock-based compensation (in shares) | 465,000 | |||||||
Liability-classified stock-based compensation converted to equity-classified | 313 | 313 | 313 | |||||
Issuance of common stock (in shares) | 7,551,000 | |||||||
Issuance of Common Stock | 34,388 | 34,388 | $ 7 | 34,381 | ||||
Exercise of stock options (in shares) | 174,000 | |||||||
Exercise of stock options | 1,195 | 1,195 | 1,195 | |||||
Fair value of NCI preferred units redemption, net of deferred tax benefit | (8,021) | (8,021) | (8,021) | |||||
Fair value of common shares issued for NCI redemption (in shares) | 1,428,000 | |||||||
Fair value of common shares issued for NCI redemption | 9,964 | 9,964 | $ 2 | 9,962 | ||||
Share repurchases and shares withheld of taxes (in shares) | (269,000) | (269,000) | ||||||
Share repurchases and shares withheld of taxes | (1,703) | (1,703) | $ (1,703) | |||||
Warrants issued | 11,357 | 11,357 | 11,357 | |||||
Dividends on redeemable senior preferred stock | (16,164) | (16,164) | (16,164) | |||||
Accretion of unamortized issuance costs for redeemable senior preferred stock | (1,845) | (1,845) | (1,845) | |||||
Change in estimate of tax basis differences | 566 | 566 | 566 | |||||
Net income (loss) | 1,389 | 1,389 | 1,389 | |||||
Ending balance (in shares) at Dec. 31, 2021 | 76,740,000 | |||||||
Ending balance at Dec. 31, 2021 | (64,237) | (64,237) | $ 77 | $ (4,091) | 39,835 | 0 | (100,058) | 0 |
Ending balance (in shares) at Dec. 31, 2021 | 720,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity-classified stock-based compensation | 6,695 | 6,695 | 6,695 | |||||
Vesting of stock-based compensation (in shares) | 925,000 | |||||||
Vesting of stock-based compensation | 1 | 1 | $ 1 | |||||
Issuance of profit interests in wholly-owned subsidiaries | 1,255 | 1,255 | ||||||
Share repurchases and shares withheld of taxes (in shares) | (1,621,000) | (1,621,000) | ||||||
Share repurchases and shares withheld of taxes | (7,470) | (7,470) | $ (2) | $ (7,468) | ||||
Dividends on redeemable senior preferred stock | (33,594) | (33,594) | (33,594) | |||||
Accretion of unamortized issuance costs for redeemable senior preferred stock | (3,286) | (3,286) | (3,286) | |||||
Net income (loss) | $ (2,150) | (2,150) | (2,150) | |||||
Ending balance (in shares) at Dec. 31, 2022 | 76,044,629 | 76,044,000 | ||||||
Ending balance at Dec. 31, 2022 | $ (102,786) | (104,041) | $ 76 | $ (11,559) | 9,650 | 0 | (102,208) | 1,255 |
Ending balance (in shares) at Dec. 31, 2022 | 2,341,056 | 2,341,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity-classified stock-based compensation | $ 6,480 | 6,480 | 6,480 | |||||
Vesting of stock-based compensation (in shares) | 1,204,000 | |||||||
ESPP compensation and vesting of stock-based compensation | 183 | 183 | $ 1 | 182 | ||||
Shares withheld for taxes (in shares) | (291,000) | 291,000 | ||||||
Issuance of profit interests in wholly-owned subsidiaries | 802 | 802 | ||||||
Shares withheld for taxes | (1,256) | (1,256) | $ (1,256) | |||||
Dividends on redeemable senior preferred stock | (44,404) | (44,404) | (44,404) | |||||
Accretion of unamortized issuance costs for redeemable senior preferred stock | (3,340) | (3,340) | (3,340) | |||||
Adjustments to NCI | (403) | (403) | ||||||
Foreign currency translation adjustment | (29) | (29) | (29) | |||||
Reclassification of negative additional paid-in capital | 0 | 0 | 31,432 | (31,432) | ||||
Net income (loss) | $ (1,311) | (1,311) | (1,311) | |||||
Ending balance (in shares) at Dec. 31, 2023 | 76,956,889 | 76,957,000 | ||||||
Ending balance at Dec. 31, 2023 | $ (146,064) | $ (147,718) | $ 77 | $ (12,815) | $ 0 | $ (29) | $ (134,951) | $ 1,654 |
Ending balance (in shares) at Dec. 31, 2023 | 2,632,166 | 2,632,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Cash flows from operating activities: | |||||
Net income (loss) | $ (1,311) | $ (2,150) | $ 1,389 | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||
Gain and transaction costs recognized on sale of business and investment | 0 | 0 | (7,643) | ||
Depreciation and amortization of assets | 68,395 | 70,681 | 49,697 | ||
Stock-based, ESPP and incentive units compensation | 6,769 | 6,228 | 3,213 | ||
Amortization of debt issuance costs and discounts | 3,849 | 3,521 | 2,305 | ||
Write-off of deferred loan costs and discount | 0 | 0 | 2,580 | ||
Deferred income tax | (6,086) | (8,183) | (2,559) | ||
Change in contingent consideration | (1,639) | 2,059 | 0 | ||
PIK interest (paid) | 0 | 0 | (23,715) | ||
Other non-cash items, net | (3,924) | 74 | 462 | ||
Change in operating assets and liabilities: | |||||
Accounts receivable | 24,471 | (19,580) | (16,694) | ||
Prepaid expenses and other current assets | (936) | (160) | (1,597) | ||
Income taxes (receivable) payable | (273) | 6,260 | (5,107) | ||
Notes receivable | (912) | 377 | 333 | ||
Accounts payable and other accrued liabilities | (3,218) | 19,794 | 7,018 | ||
Customer deposits and advance payments | 1,102 | (2,403) | 2,138 | ||
Other assets and liabilities, net | (5,031) | (6,000) | (2,443) | ||
Net cash provided by operating activities | 81,256 | 70,518 | 9,377 | ||
Cash flows from investing activities: | |||||
Acquisition of business, net of cash acquired | (28,222) | (4,976) | (407,129) | ||
Proceeds from sale of business and investment | 0 | 0 | 15,278 | ||
Additions to property, equipment and software | (21,256) | (18,882) | (9,719) | ||
Notes receivable, net | 376 | (4,662) | 0 | ||
Acquisitions of assets and other investing activities | (6,646) | (7,983) | (49,463) | ||
Net cash used in investing activities | (55,748) | (36,503) | (451,033) | ||
Cash flows from financing activities: | |||||
Proceeds from issuance of long-term debt, net of issue discount | 49,750 | 0 | 607,318 | ||
Debt issuance and modification costs paid | (1,220) | 0 | (9,073) | ||
Repayments of long-term debt | (6,328) | (6,200) | (361,425) | ||
Borrowings under revolving credit facility | 44,000 | 29,500 | 30,000 | ||
Repayments of borrowings under revolving credit facility | (56,500) | (32,000) | (15,000) | ||
Proceeds from the issuance of redeemable senior preferred stock, net of discount | 0 | 0 | 219,062 | ||
Redeemable senior preferred stock issuance fees and costs | 0 | 0 | (8,098) | ||
Repurchases of Common Stock and shares withheld for taxes | (1,256) | (7,468) | (1,703) | ||
Dividends paid to redeemable senior preferred stockholders | (24,718) | (11,459) | (7,460) | ||
Profit distributions to redeemable NCIs of subsidiaries | 0 | 0 | (815) | ||
Proceeds from exercise of stock options | 0 | 0 | 1,196 | ||
Settlement and customer/subscriber accounts obligations, net | 211,077 | 43,143 | 417,627 | ||
Payment of contingent consideration related to business combination | (4,700) | (7,014) | 0 | ||
Net cash provided by financing activities | 210,105 | 8,502 | 871,629 | ||
Net increase in cash and cash equivalents, and restricted cash | 235,613 | 42,517 | 429,973 | ||
Cash and cash equivalents and restricted cash at beginning of period | 560,610 | 518,093 | 88,120 | ||
Cash and cash equivalents and restricted cash at end of period | 796,223 | 560,610 | 518,093 | ||
Reconciliation of cash and cash equivalents, and restricted cash: | |||||
Cash and cash equivalents | 39,604 | 18,454 | 20,300 | ||
Restricted cash | 11,923 | 10,582 | 28,859 | ||
Cash and cash equivalents included in settlement assets and customer/subscriber account balances | 744,696 | 531,574 | 468,934 | ||
Total cash and cash equivalents, and restricted cash | 796,223 | 560,610 | 518,093 | ||
Supplemental cash flow information: | |||||
Cash paid for interest | 75,859 | 46,907 | 26,056 | ||
Cash paid for income taxes, net of refunds | 12,917 | 6,744 | 2,212 | ||
Non-cash investing and financing activities: | |||||
Cash portion of dividend payable and ticking fee for redeemable senior preferred stock | (7,027) | [1] | (5,341) | [1] | 0 |
Contingent consideration accrual | 5,951 | 6,079 | 3,000 | ||
Adjustment to value of profit interest unit | (404) | 0 | 0 | ||
Issuance of NCI | 184 | 1,255 | 0 | ||
Measurement period adjustment to purchase price | 111 | 0 | 0 | ||
Notes receivable from sellers used as partial consideration for acquisitions | 0 | 0 | 3,499 | ||
Forfeiture of liability-classified award | 0 | 325 | 0 | ||
Change in ESPP liability | 0 | 143 | 0 | ||
Non-cash additions to other noncurrent assets for right-of-use operating leases | $ 1,520 | $ 1,722 | $ 234 | ||
[1] (1) The dividend payable for year ended December 31, 2023, was paid on January 2, 2024. The dividend payable for year ended December 31, 2022, was paid on January 2, 2023. |
Nature of Business and Signific
Nature of Business and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Nature of Business and Significant Accounting Policies | Nature of Business and Significant Accounting Policies The Business Headquartered in Alpharetta, GA, the Company began operations in 2005 with a mission to build a merchant-inspired payments platform that would advance the goals of its customers and partners. Our approach leverages a single platform to collect, store, lend and send money that operates at scale. Our technology supports high-value payments products complemented by our personalized support. We are a leading provider to businesses, enterprises and distribution partners such as retail ISOs, FIs, wholesale ISOs and ISVs. The Company operates from a purpose-built business platform that includes tailored customer service offerings and bespoke technology development, allowing the Company to provide end-to-end solutions for payment and payment-adjacent needs. The Company provides: • SMB payments processing solutions for B2C transactions through ISOs, FIs, ISVs and other referral partners. Our proprietary MX platform for B2C payments provides merchants a fully customizable suite of business management solutions. We enable customers to accept card, electronic and digital-based payments at the point of sale by providing a suite of services. • B2B payments solutions such as automated vendor payments and professionally curated managed services to industry leading FIs and networks. Our proprietary B2B CPX platform was developed to be a best-in-class solution for buyer/supplier payment enablement. Our Plastiq payables management software helps businesses improve cash flow with instant access to working capital, while automating and enabling control over all aspects of accounts receivable and payable. • Enterprise payments solutions for ISVs and other third parties that allow them to leverage the Company's core payments engine via robust API resources and high-utility embeddable code and consulting and development solutions focused on the increasing demand for integrated payments solutions for transitioning to the digital economy. Our BaaS features transaction monitoring, draft authorization audits, fee collection practice monitoring, and other services. The Company provides its services through three reportable segments: 1) SMB Payments; 2) B2B Payments; and 3) Enterprise Payments. For additional information about our reportable segments, see Note 18. Segment Information . To provide many of its services, the Company enters into agreements with payment processors which in turn, have agreements with multiple card associations. These card associations comprise an alliance aligned with insured FIs ("member banks") that work in conjunction with various local, state, territory and federal government agencies to make the rules and guidelines regarding the use and acceptance of credit and the card associations. The Company has multiple sponsorship bank agreements and is itself a registered ISO with Visa. The Company is also a registered member service provider with Mastercard. The Company's sponsorship agreements allow the capture and processing of electronic data in a format to allow such data to flow through networks for clearing and fund settlement of merchant transactions. The Company also offers money transmission services in 46 U.S. states, the District of Columbia and two U.S. territories. Basis of Presentation and Consolidation The accompanying Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiaries. The Company generally utilizes the equity method of accounting when it has an ownership interest of between 20% and 50% in an entity, provided the Company is able to exercise significant influence over the investee's operations. All material intercompany balances and transactions have been eliminated in consolidation. NCI represents the equity interest not owned by the Company and are recorded for consolidated entities in which the Company owns less than 100% of the interests. Changes in the Company's ownership interest while the Company retains its controlling interest are accounted for as equity transactions, and upon loss of control, retained ownership interests are remeasured at fair value, with any gain or loss recognized in earnings. For 2023, there was no income or loss attributable to NCI in accordance with the applicable operating agreements. The results for the year ended December 31, 2023, include the post-acquisition results of the Plastiq business which was acquired through Chapter 11 bankruptcy process on July 31, 2023. Use of Estimates The preparation of Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reported period. Actual results could materially differ from those estimates. Significant Accounting Policies Revenue Recognition The Company applies the five-step model to assess its contracts with customers. At contract inception, the Company assesses the services and goods promised in its contracts with customers and identifies the performance obligation for each promise to transfer a distinct good or service to the customer. The Company recognizes revenue when it satisfies a performance obligation by transferring a service or good to the customer in an amount to which the Company expects to be entitled (i.e., transaction price) allocated to the distinct services or goods. The Company has elected the permitted practical expedient that allows it to use the portfolio approach for many of its contracts since this approach's impact on the financial statements, when applied to a group of contracts (or performance obligations) with similar characteristics, is not materially different from the impact of applying the revenue standard on an individual contract basis. Under the portfolio practical expedient, collectability is still assessed at the individual contract level when determining if a contract exists. The Company has elected to exclude any contracts with an original duration of one year or less and any variable consideration that meets specified criteria from its disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance. In delivering payment services to the customer, the Company may also provide a limited license agreement to the customer for the use of one or more of the Company's proprietary cloud-based software applications. The Company grants a right to use its software applications only when the customer has contracted with the Company to receive related payment services. When combined with the underlying payment services, the license and the payment services provided to the customer are a single stand-ready obligation and the Company's performance obligation is defined by each time increment, rather than by the underlying activities, (quantity and timing of which is not determinable), satisfied over time based on days elapsed. In order to provide our payment services, we obtain authorization for the transaction and request funds settlement from the card issuing financial institution through the payment network. When third parties are involved in the transfer of services or goods to the customer, the Company considers the nature of each specific promised service or good and applies judgment to determine whether the Company controls the service or good before it is transferred to the customer or whether the Company is acting as an agent of the third party. To determine whether the Company controls the service or good, it assesses indicators including: 1) which party is primarily responsible for fulfillment; 2) which party has discretion in determining pricing for the service or good; and 3) other considerations deemed to be applicable to the specific situation. Based on our assessment of these indicators, we have concluded that the promise to our customers to provide payment services is distinct from the services provided by the card issuing FIs and payment networks in connection with payment transactions. We do not have the ability to direct the use of and obtain substantially all of the benefits of the services provided by the card issuing FIs and payment networks before those services are transferred to our customer, and on that basis, we do not control those services prior to being transferred to our customer. As a result, we present our revenues net of the interchange fees retained by the card issuing FIs and the fees charged by the payment networks. SMB Payments – The Company's SMB Payments segment enables the Company's customers to accept card, electronic and digital-based payments at the point of sale by providing a suite of services including authorization, settlement and funding, customer support and help-desk functions, chargeback resolution, payment security, consolidated billing and statements, and online reporting. Additionally, the Company enables customers to accept card, electronic and digital-based payments at the point of sale by providing a suite of services. The Company also earns revenue and commissions from resale of electronic POS equipment and certain subscription coupons. Typically, revenues generated from these transactions are based on a variable percentage of the dollar amount of each transaction, and in some instances, additional fees (e.g., statement fees, annual fees and monthly minimum fees, fees for handling chargebacks, gateway fees and fees for other miscellaneous services) are charged for each transaction. The Company's sponsoring banks collect the gross merchant discount from the card holder's issuing bank, pay the interchange fees and assessments to the payment networks and credit card associations, retain their fees, and pay to the Company the net amount which represents the Company's revenue. B2B Payments – The Company's B2B Payments segment enables the Company's customers to automate their accounts payable and other commercial payments functions with the Company's payment services that utilize physical and virtual payment cards as well as ACH transactions. The Company also provides cost-plus-fee turn-key business process outsourcing and assists commercial customers with programs that are designed to increase acceptance of Electronic Payments. Revenues are generally earned on a per-transaction basis and are recognized by the Company net of certain third-party costs for interchange fees, assessments to the payment networks, credit card associations fees, sponsor bank fees and rebates to customers. The Company's payables management software helps businesses improve cash flow with instant access to working capital, while automating and enabling control over all aspects of accounts receivable and payable. For these transactions, the Company acts as a merchant of record, therefore, considered as the principal and accordingly presents its revenue on a gross basis. The Company also offers volume rebates as an incentive to increase business and customer engagement. These rebates are presented as net of revenue. Transaction processing costs, including interchange fees, are presented as costs of revenue. Enterprise Payments – The Company's Enterprise Payments segment uses payment-adjacent technologies to facilitate the acceptance of Electronic Payments from customers. Revenue from the Enterprise Payments segment consists of the following: • Enrollment fees : The revenue associated with enrollment fees is recognized upon the receipt of a fully executed enrollment application, completion of the customer account setup, data verification and the constructive receipt of the applicable non-refundable fee. • Subscription fees : The Company recognizes monthly subscription fees as recurring maintenance fees each month during the term of the client's enrollment. Revenue from transaction-based fees is recognized upon constructive receipt of transaction fees for payments to creditors issued via ACH payments, paper checks or wire transfers. These fees are transferred to the Company from the customer account balances, which may be maintained by the Company in money transmission license trust accounts or by partner banks. • Interest revenue : Interest revenue is derived from certain customer balances maintained in interest bearing accounts with select partner banks. • CRM and consulting fees : CRM license fees are recognized on a monthly basis and consulting fees are recognized when services are performed. A substantial portion of this segment's revenues are earned as an agent of a third party, and therefore this earned revenue is reported as a net amount within revenue. See Note 3. Revenues . Transaction Price Allocated to Future Performance Obligations ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations. However, as allowed by ASC 606, the Company has elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. As described above, the Company's most significant performance obligations consist of variable consideration under a stand-ready series of distinct days of service. Such variable consideration meets the specified criteria for the disclosure exclusion. Therefore, the majority of the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied is variable consideration that is not required for this disclosure. The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material. Cost of Services Costs of merchant card fees primarily consist of residual payments to agents and ISOs and other third-party costs directly attributable to payment processing. The residual payments represent commissions paid to agents and ISOs based upon a percentage of the net revenues generated from merchant transactions. Costs of outsourced services and other revenue consist of salaries directly related to outsourced services revenue, the cost of equipment (point of sale terminals) sold, and third-party fees and commissions related to the Company's ACH processing activities. Contracts with Customers and Contract Costs The Company accrues and pays commission expense based on variable merchant payment volumes and for certain customer service and other services provided by its ISOs. Since commission expenses are accrued and paid to ISOs on a monthly basis after the merchant enters into a new or renewed contract, these are not deemed to be a cost to acquire a new contract but they are reported within costs of services on our Consolidated Statements of Operations and Comprehensive Loss. The ISO is typically an independent contractor or agent of the Company. The Company may occasionally elect to buy out all or a portion of an ISO's rights to receive future commission payments related to certain merchants. Amounts paid to the ISO for these residual buyouts are capitalized and amortized over the useful life on a straight-line basis under the accounting guidance for intangible assets and included in intangible assets, net on our Consolidated Balance Sheets. The Company pays bonuses to certain ISOs for meeting established performance criteria which results in a continued benefit to the Company for future periods. The incremental costs are incurred to secure a future stream of revenue and are recorded as contract acquisitions costs and are amortized over the estimated time on which benefit is expected to be received. A contract with a customer creates a legal right and obligation. As the Company performs under customer contracts, its right to consideration that is unconditional is considered to be accounts receivable. If the Company's right to consideration for such performance is contingent upon a future event or satisfaction of additional performance obligations, the amount of revenues recognized in excess of the amount billed to the customer is recognized as a contract asset. Contract liabilities represent consideration received from customers in excess of revenues recognized. Material contract assets and liabilities are presented net at the individual contract level in the Consolidated Balance Sheets and are classified as current or noncurrent based on the nature of the underlying contractual rights and obligations. Contract Acquisition Costs The Company pays certain bonuses to it's ISOs for boarding incremental merchants which the Company expects to obtain benefit from in future periods. These bonuses are recorded as contract acquisition costs and are amortized over five years. Net contract acquisition costs were $6.6 million and $2.1 million at December 31, 2023 and 2022, respectively. Amortization expense for contract acquisition costs for the years ended December 31, 2023 and 2022 was $1.0 million and $0.2 million, respectively. Amortization expense for the year ended December 31, 2021, was immaterial. Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents includes highly liquid instruments with an original maturity of three months or less, and cash owned by the Company that is held in financial institutions. Restricted cash is held by the Company in financial institutions for the purpose of in-process customer settlements or reserves held per contact terms. Accounts Receivable, net Accounts receivable is stated net of allowance for current period credit losses for any uncollectible amounts and are amounts primarily due from the Company's sponsor banks for revenues earned, net of related interchange and processing fees, and do not bear interest. Other types of accounts receivable are from agents, merchants and other customers. Amounts due from sponsor banks are typically paid within 30 days following the end of each month. Inventory Inventory consists primarily of POS terminals and certain subscription coupons which is carried at the lower of cost or net realizable value. Cost is equal to the purchase price and other expenses incurred with acquiring the inventory and is substantially valued using the weighted average cost method. The carrying amount is reduced when items are determined to be obsolete/expired. Notes Receivable Notes receivable are primarily comprised of notes receivable from ISOs under the terms of the agreements the Company preserves the right to hold back residual payments due to the ISOs and to apply such residuals against future payments due to the Company. Notes receivable are recorded at the unpaid principal balance. Interest on notes receivable is recognized on a monthly basis and is included in interest income. See Note 5. Notes Receivable . Allowance for Expected Losses The Company utilizes a combination of aging and loss-rate methodologies to develop an estimate of current expected credit losses based on the nature and risks associated with the underlying asset pool. A broad range of factors are considered during the estimation of the allowance including historical losses, adjustments for current conditions and future trends. The Company may also utilize a mix of qualitative and quantitative risk factors within its estimation. The allowance for expected loss from accounts receivable was $5.3 million and $1.1 million at December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, there was no allowance for expected loss on notes receivable. See Note 5. Notes Receivable . As of December 31, 2023 and 2022, the allowance for expected losses on settlement assets was $6.6 million and $5.0 million, respectively. See Note 4. Settlement Assets and Customer/Subscriber Account Balances and Related Obligations . A reconciliation of the beginning and ending amount of allowance for expected losses is as follows for the year ended December 31, 2023: (in thousands) Trade Receivables Settlement assets Balance at January 1, 2023 $ (1,143) $ (4,976) Charge-offs (recoveries), net 130 3,407 Provision (1) (4,276) (4,989) Balance at December 31, 2023 $ (5,289) $ (6,558) (1) Provision for trade receivables includes restructuring related costs of $3.5 million The Company has elected not to measure expected losses for accrued interest on notes receivable but instead recognize losses for accrued interest within the period losses are incurred. Customer Deposits and Advance Payments The Company may receive cash payments from certain customers and vendors that require future performance obligations by the Company. Amounts associated with obligations expected to be satisfied within one year are reported in customer deposits and advance payments on the Company's Consolidated Balance Sheets and amounts associated with obligations expected to be satisfied after one year are reported as a component of other noncurrent liabilities on the Company's Consolidated Balance Sheets. These payments are subsequently recognized in the Company's Consolidated Statements of Operations and Comprehensive Loss when the Company satisfies the performance obligations required to retain and earn these deposits and advance payments. A vendor may make an upfront payment to the Company to offset costs that the Company incurs to integrate the vendor into the Company's operations. These upfront payments are deferred by the Company and are subsequently amortized against expense in its Consolidated Statements of Operations and Comprehensive Loss as the related costs are incurred by the Company in accordance with the agreement with the vendor. Property and Equipment Property and equipment are stated at cost, except for property and equipment acquired in a business combination, which is recorded at fair value at the time of the transaction. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Expenditures for repairs and maintenance which do not extend the useful life of the respective assets are charged to expense as incurred. Expenditures that increase the value or productive capacity of assets are capitalized. At the time of retirements, sales or other dispositions of property and equipment, the original cost and related accumulated depreciation are removed from the respective accounts and the gains or losses are presented as a component of income or loss from operations. Property, equipment and software Estimated Useful Life Furniture and fixtures 5 - 10 years Equipment 3 - 8 years Computer software 2 - 5 years Leasehold improvements 3 - 10 years See Note 6. Property, Equipment and Software . Costs Incurred to Develop Software for Internal Use Costs incurred to develop or obtain internal-use software and implementation costs are accounted for in accordance with ASC 350-40, Internal-Use Software . The Company uses an agile development methodology in which feature-by-feature updates are made to its software. The costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs incurred to develop internal-use software are capitalized and amortized using the straight-line method over the estimated useful life of the software, which generally range from two Software development costs may become impaired in situations where development efforts are abandoned due to the viability of the planned project becoming doubtful or due to technological obsolescence of the planned software product. For the year ended December 31, 2023, there was accelerated depreciation for internal-use software of $0.3 million from certain restructuring costs. There were no impairment charges associated with internal-use software for the years ended December 31, 2022 and 2021. For the years ended December 31, 2023, 2022 and 2021, the Company capitalized software development costs of $21.3 million, $16.8 million and $7.8 million, respectively. As of December 31, 2023 and 2022, capitalized software development costs, net of accumulated amortization, totaled $40.6 million and $28.1 million, respectively, and are included in property, equipment and software, net on the Consolidated Balance Sheets. Amortization expense for capitalized software development costs for the years ended December 31, 2023, 2022 and 2021 was $9.4 million, $6.9 million and $5.9 million, respectively, and are included in depreciation and amortization on the Consolidated Statements of Operations and Comprehensive Loss. Other Intangible Assets Other intangible assets are initially recorded at cost or fair value when acquired in connection with a business combination. The carrying value of an intangible asset acquired in an asset acquisition may subsequently be increased for contingent consideration when due to the seller and such amounts can be estimated. The portion of any unpaid purchase price that is contingent on future activities is not initially recorded by the Company on the date of acquisition. Rather, the Company recognizes contingent consideration when it becomes probable and estimable. All of the Company's intangible assets, except goodwill and money transmission licenses, have finite lives and are subject to amortization. Intangible assets consist of acquired merchant portfolios, customer relationships, ISO and referral partner relationships, residual buyouts, trade names, technology, non-compete agreements and money transmission licenses. Intangible Asset Nature Estimated Useful Life ISO and Referral Partner Relationships Acquired relationships with ISOs and referral partners 11 – 25 years Residual Buyouts Surrender of rights to receive commissions by ISOs 3 – 9 years Customer Relationships Acquired customer relationships 2 – 10 years Merchant Portfolios Acquired rights to a portfolio of merchants 5 – 10 years Technology Acquired proprietary software and website domains 6 – 10 years Trade Names and Non-compete Agreements Acquired trade names and non-compete agreements 3 – 10 years Money Transmission Licenses Acquired licenses to collect, store, lend and send money in 46 U.S. states, the District of Columbia and two U.S. territories. indefinite Impairment of Long-lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. For long-lived assets, except goodwill, an impairment loss is indicated when the undiscounted future cash flows estimated to be generated by the asset group are not sufficient to recover the carrying value of the asset group. If indicated, the loss is measured as the excess of carrying value over the asset groups' fair value, as determined based on discounted future cash flows. The Company concluded there were no indications of impairment for the years ended December 31, 2023, 2022 and 2021. See Note 7. Goodwill and Other Intangible Assets . Goodwill The Company tests goodwill for impairment on an annual basis, or when events occur or circumstances indicate the fair value of a reporting unit is below its carrying value. The test for goodwill impairment may be a qualitative or a quantitative analysis depending on the facts and circumstances associated with the reporting unit. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that implied fair value of the goodwill within the reporting unit is less than its carrying value. See Note 7. Goodwill and Other Intangible Assets for further information. Leases The Company evaluates lease and service arrangements at lease inception to determine if the arrangement is a lease or contains a lease. Lease arrangements are evaluated at their commencement date to determine classification as operating or finance. Operating leases are reported as part of other noncurrent assets, accounts payable and accrued expenses and other noncurrent liabilities on the Company's Consolidated Balance Sheets. Finance leases, if applicable, are reported as part of property, equipment and software, net, and debt on the Company's Consolidated Balance Sheets. Leases with a term of twelve months or less are generally not included on the Company's Balance Sheets. The Company does not separate lease and non-lease components. Certain estimates and assumptions are made when determining the value of ROU Assets and the related liabilities, including when establishing the lease term and discount rates and variable lease payments (e.g., rent escalations tied to changes in the Producer Price Index). The lease term for all of the Company's leases includes the non-cancelable period of the lease adjusted for any renewal or termination options the Company is reasonably certain to exercise. The lease payment stream includes any rent escalation that is required under certain lease agreements. The Company's leases generally do not provide an implicit rate of interest, nor is it readily determinable by the Company, and as such the Company uses its incremental borrowing rate in determining the discounted value of the lease payments. Lease expense and depreciation expense, if applicable, are recognized on a straight-line basis over the term of the lease. Settlement Assets and Customer/Subscriber Account Balances and Related Obligations Settlement assets and customer/subscriber account balances and the related obligations recognized on the Company's Consolidated Balance Sheets represent intermediary balances arising in the Company's settlement process for merchants and other customers. See Note 4. Settlement Assets and Customer/Subscriber Account Balances and Related Obligations . Debt Issuance and Modification Costs Eligible debt issuance costs associated with the Company's credit facilities are deferred and amortized to interest expense over the term of the related debt using the effective interest method. Debt issuance costs associated with Company's term debt are presented on the Company's Consolidated Balance Sheets as a direct reduction in the carrying value of the associated debt liability. Debt modification costs represent amounts paid to third parties to modify existing debt agreements when those amounts are not eligible for capitalization. See Note 10. Debt Obligations for amounts paid for the year ended December 31, 2023, which were not eligible for capitalization. Restructuring Costs The Company's Management approved a plan to restructure the business of its wholly owned subsidiary, PayRight. PayRight's business activity included advancing funds to customers, which did not generate the desired financial results due to changes in the economic environment, particularly the cost of capital. The restructuring plan includes termination of the advancing business effective June 30, 2024. The Company included costs related to this restructuring within selling, general and administrative operating expenses and depreciation and amortization within its Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2023. The costs include allowance for certain advances whose recoverability was impacted by the restructuring of $3.5 million and $0.3 million for accelerated depreciation and amortization of assets of the restructured business. Acquisitions Business Combinations and Asset Acquisitions The Company uses the acquisition method of accounting for business combinations which requires assets acquired and liabilities assumed to be recognized at their fair values on the acquisition date. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. The fair values of the assets acquired and liabilities assumed are determined based upon the valuation of the acquired business and involves making significant estimates and assumptions based on facts and circumstances that existed as of the acquisition date. The Company uses a measurement period following the acquisition date to gather information that existed as of the acquisition date that is needed to determine the fair value of the assets acquired and liabilities assumed. The measurement period ends once all information is obtained, but no later than one year from the acquisition date. The Company accounts 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. Contingent Consideration Contingent consideration re |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Plastiq Acquisition On May 23, 2023,Plastiq, Powered by Priority, LLC (the "Acquiring Entity"), a subsidiary of PRTH, entered into a stalking horse equity and asset purchase agreement with Plastiq, Inc. and certain of its affiliates ("Plastiq") to acquire substantially all of the assets of Plastiq, including the equity interest in Plastiq Canada, Inc. Plastiq is a buyer funded B2B payments platform offering bill pay and instant access to working capital to its customers and will complement the Company's existing supplier-funded B2B Payments business. On May 24, 2023, Plastiq filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware. The purchase was completed on July 31, 2023 for a total purchase consideration of approximately $37.0 million. The total purchase consideration included $28.5 million in cash and the remaining consideration is in the nature of deferred or contingent consideration and certain equity interest in the Acquiring Entity. The cash consideration for the purchase was funded by borrowings from the Company's revolving credit facility. The acquisition was accounted for as a business combination using the acquisition method of accounting, under which the acquired assets and assumed liabilities were recognized at their fair values as of July 31, 2023 , with the excess of the fair value of consideration transferred over the fair value of the net assets acquired recognized as goodwill. The fair values of the acquired assets and assumed liabilities as of July 31, 2023 were estimated by management using the discounted cash flow method and other factors specific to certain assets and liabilities. The preliminary purchase price allocation is set forth in the table below and expected to be finalized as soon as practicable but no later than one year from the closing date. (in thousands) Consideration: Cash $ 28,500 Contingent consideration payments (1) 8,419 Common equity of the Acquiring Entity 330 Less: cash and restricted cash acquired (3) (278) Total purchase consideration, net of cash and restricted cash acquired $ 36,971 Recognized amounts of assets acquired and liabilities assumed: Accounts receivable (3) $ 831 Prepaid expenses (3) 469 Settlement assets 8,277 Equipment, net 47 Goodwill (3) 7,252 Intangible assets (2) 30,460 Accounts payable and accrued expenses (3) (1,872) Customer deposits (214) Settlement obligations (8,279) Total purchase consideration $ 36,971 (1) The fair value of the contingent consideration payments issued was determined utilizing a Monte Carlo simulation. The contingent consideration payments were calculated based on the path for the simulated metrics and the contractual terms of the contingent consideration payments and were discounted to present value at a rate reflecting the risk associated with the payoffs. The fair value was estimated to be the average present value of the contingent consideration payments over all iterations of the simulation. (2) The intangible assets acquired consist of $13.0 million for customer relationships, $7.0 million for referral partner relationships, $6.5 million for technology and $3.9 million for trade name. (3) During the fourth quarter 2023, the Company recorded measurement period adjustments due to additional information received related to cash acquired, accounts receivable, prepaid expenses, goodwill and accounts payable. This measurement period adjustment resulted in decreases in cash and restricted cash acquired of $40.0 thousand, and accounts receivable of $50.0 thousand offset by increases in prepaid expenses of $46.0 thousand, and goodwill of $0.3 million, and accounts payable of $0.2 million. The contingent consideration will not exceed the contractual undiscounted future value of $23.1 million and will be remeasured quarterly based on actual operating results. As of December 31, 2023, total consideration was $9.7 million, $2.2 million included in accounts payable and accrued expenses and $7.5 million included in noncurrent liabilities on the Consolidated Balance Sheets. Total interest accreted for the year was $1.3 million. The Company will make quarterly payments equal to 75% of the cash available for the contingent consideration as required by the contract. The payment made for the year ended December 31, 2023, was immaterial. This business is reported within the Company's B2B Payments reportable segment. The Company's Consolidated Financial Statements for year ended December 31, 2023 include the operating results of Plastiq from August 1, 2023 through December 31, 2023 as noted in the table below: Year Ended December 31, 2023 (in thousands) Revenues $ 27,436 Operating loss (1) $ (1,997) (1) Excluding acquisition related costs of $1.3 million The bankruptcy of Plastiq, Inc. before acquisition by the Company resulted in significant changes to the cost structure of the acquired business. As a result, pre-acquisition financial information is not relevant and therefore impractical to include. For the twelve months ended December 31, 2023, the Company incurred $1.7 million in acquisition related costs, which primarily consisted of consulting, legal and accounting and valuation expenses. These expenses were recorded in selling, general and administrative expenses in the Company's Consolidated Statements of Operations and Comprehensive Loss. Based on the purchase consideration and pre-acquisition operating results, this business combination did not meet the materiality requirements for pro forma disclosures. Acquisitions occurring in prior years Ovvi Acquisition On November 18, 2022, the Company completed its acquisition of certain assets and assumption of a certain liability of Ovvi, LLC, under an asset purchase agreement through its wholly-owned subsidiary, Priority Ovvi, LLC ("Ovvi"). The acquisition was accounted for as a business combination using the acquisition method of accounting. Prior to this acquisition, the business operated as a SaaS proprietary platform for the restaurant, hospitality and retail industries by providing complete all-in-one point of sale software and hardware systems, comprehensive ancillary services including fraud detection and mitigation, and processing services for various types of cards including credit cards, debit cards, private label cards and prepaid cards. This business is reported within the Company's SMB Payments reportable segment. Transaction costs were not material and were expensed. The non-voting incentive shares issued to the seller will be evaluated at each reporting period to determine whether or not profit or loss should be allocated based on the subsidiary's operating agreement. The preliminary purchase price allocation is set forth in the table below and is expected to be finalized as soon as practicable, but no later than one year from the acquisition date. (in thousands) Consideration: Cash (1) $ 5,026 Fair value of class B shares issued in Ovvi (NCI) (3) 5,026 Total enterprise value of business acquired (3) 659 $ 5,685 Recognized amounts of assets acquired and liabilities assumed: Accounts receivable (4) $ 43 Inventory (4) 98 Property, equipment and software, net 20 Goodwill (3)(4) 3,504 Intangible assets (2) 2,021 Other non-current asset 152 Other non-current liability (153) Total enterprise value of business acquired (3) $ 5,685 (1) Includes $50.0 thousand withheld for inventory acquired which was subsequently released in March 2023. (2) The intangible assets consist of $1.3 million for technology, $0.4 million for customer relationships and $0.3 million for trade names. (3) During the first quarter of 2023, the Company recorded measurement period adjustments due to additional information received related to the valuation of the Class B shares. This measurement period adjustment resulted in a decrease of $0.6 million in goodwill and NCI. (4) During the third quarter of 2023, the Company recorded measurement period adjustments due to additional information received related to accounts receivable and inventory. This measurement period adjustment resulted in a decrease of $0.1 million in accounts receivable and inventory, offset by an increase in goodwill of $0.1 million. Finxera Acquisition On September 17, 2021, the Company completed its acquisition of 100% of the equity interests of Finxera. Finxera is a provider of deposit account management and licensed money transmission services in the U.S. The acquisition allows the Company to offer clients turn-key merchant services, payment facilitation, card issuing, automated payables, virtual banking, e-wallet tools, risk management, underwriting and compliance on a single platform. The transaction was funded with the Company's cash on hand, proceeds from the issuance of the redeemable senior preferred stock and debt, and the issuance of common equity shares to the sellers. The acquisition was accounted for as a business combination using the acquisition method of accounting, under which the assets acquired and liabilities assumed were recognized at their fair values as of the September 17, 2021, with the excess of the fair value of consideration transferred over the fair value of the net assets acquired recognized as goodwill. The fair values of the assets acquired and liabilities assumed as of the September 17, 2021 were estimated by management based on the valuation of the Finxera business using the discounted cash flow method and other factors specific to certain assets and liabilities. The final purchase price allocation is set forth in the table below: (in thousands) Consideration: Cash $ 379,220 Equity instruments (1) 34,388 Less: cash and restricted cash acquired (6,598) Total purchase consideration, net of cash and restricted cash acquired $ 407,010 Recognized amounts of assets acquired and liabilities assumed: Accounts receivable $ 385 Prepaid expenses and other current assets 5,297 Current portion of notes receivable 784 Settlement assets and customer/subscriber account balances 498,811 Property, equipment and software, net 712 Goodwill 244,712 Intangible assets, net (2) 211,400 Other noncurrent assets 955 Accounts payable and accrued expenses (7,837) Settlement and customer/subscriber account obligations (498,811) Deferred income taxes, net (44,018) Other noncurrent liabilities (5,380) Total purchase consideration $ 407,010 (1) The fair value of the 7,551,354 shares of PRTH Common Stock that were issued was determined based on their market price at the time of closing adjusted for an appropriate liquidity discount due to trading restrictions under Securities Rule 144. (2) The intangible assets acquired consist of $154.9 million for referral partner relationships, $34.3 million for technology, $20.1 million for customer relationships and $2.1 million for money transmission licenses. Goodwill of $244.7 million arising from the acquisition primarily consists of the expected synergies and other benefits from combining operations. Goodwill attributable to the acquisition of $8.7 million was deductible for income tax purposes. The goodwill was allocated 100% to the Company's Enterprise Payments reportable segment. Wholesale Payments, Inc. On April 28, 2021, a subsidiary of the Company completed its acquisition of certain residual portfolio rights for a purchase price of $42.4 million and $24.8 million of post-closing payments and earn-out payments based on meeting certain attrition thresholds over a three-year period from the date of acquisition. The transaction did not meet the definition of a business, therefore it was accounted for as an asset acquisition under which the cost of the acquisition was allocated to the acquired assets based on relative fair values. As an asset acquisition, additional purchase price is accounted for when payment to the seller becomes probable and is added to the carrying value of the asset. The seller's note payable to the Company of $3.0 million and an advance of $2.0 million outstanding at the time of the purchase were netted against the initial purchase price, resulting in cash of $41.2 million being paid by the Company to the seller, which was funded from cash proceeds from the issuance of the redeemable senior preferred stock and cash on hand. C&H Financial Services, Inc. On June 25, 2021, a subsidiary of the Company acquired certain assets and assumed certain related liabilities under an asset purchase agreement. The acquisition was accounted for as a business combination using the acquisition method of accounting. Prior to this acquisition, the business was an ISO partner of the Company where it developed expertise in software-integrated payment services, as well as marketing programs for specific verticals such as automotive and youth sports. This business is reported within the Company's SMB Payments reportable segment. The initial purchase price for the net assets was $35.0 million in cash and a total purchase price of not more than $60.0 million including post-closing payments and earn-out payments based on certain gross profit and revenue achievements over a three-year period from the date of acquisition. The acquisition date fair value of the contingent consideration was $4.7 million, which increased the total purchase price to $39.7 million. The seller's note payable to the Company of $0.5 million at the time of purchase was netted against the initial purchase price, resulting in cash of $34.5 million being paid by the Company to the seller, which was funded from a $30.0 million draw down from a revolving credit facility and $4.5 million cash on hand. Transaction costs were not material and were expensed. The purchase price allocation is set forth in the table below. (in thousands) Accounts receivable $ 214 Prepaid expenses and other current assets 209 Property, equipment and software, net and other current assets 287 Goodwill 13,804 Intangible assets, net (1) 25,400 Other noncurrent liabilities (214) Total purchase price $ 39,700 (1) |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Disaggregation of Revenues The following table presents a disaggregation of our consolidated revenues by type: Years Ended December 31, (in thousands) 2023 2022 2021 Revenue Type: Merchant card fees $ 595,205 $ 553,037 $ 468,764 Money transmission services 98,137 71,536 19,415 Outsourced services and other services 49,600 29,627 21,033 Equipment 12,670 9,441 5,689 Total revenues (1)(2) $ 755,612 $ 663,641 $ 514,901 (1) Includes contracts with an original duration of one year or less and variable consideration under a stand-ready series of distinct days of service. The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material. (2) Approximately $33.4 million, $7.5 million and $0.7 million, of interest income for the years ended December 31, 2023, 2022 and 2021, respectively, is included in outsourced services and other services revenue in the table above. The following table presents a disaggregation of our consolidated revenues by segment: Year Ended December 31, 2023 (in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services Equipment Total Segment SMB $ 563,878 $ — $ 6,322 $ 12,670 $ 582,870 B2B 31,114 — 9,612 — 40,726 Enterprise 213 98,137 33,666 — 132,016 Total revenues $ 595,205 $ 98,137 $ 49,600 $ 12,670 $ 755,612 Year Ended December 31, 2022 (in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services Equipment Total Segment SMB $ 549,646 $ — $ 3,150 $ 9,441 $ 562,237 B2B 3,391 — 15,499 — 18,890 Enterprise — 71,536 10,978 — 82,514 Total revenues $ 553,037 $ 71,536 $ 29,627 $ 9,441 $ 663,641 Year Ended December 31, 2021 (in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services Equipment Total Segment SMB $ 466,819 $ — $ 3,122 $ 5,689 $ 475,630 B2B 1,945 — 15,193 — 17,138 Enterprise — 19,415 2,718 — 22,133 Total revenues $ 468,764 $ 19,415 $ 21,033 $ 5,689 $ 514,901 Deferred revenues were not material for the years ended December 31, 2023, 2022 and 2021. Contract Assets and Contract Liabilities Material contract assets and liabilities are presented net at the individual contract level in the Consolidated Balance Sheets and are classified as current or noncurrent based on the nature of the underlying contractual rights and obligations. Contract liabilities were $0.6 million, $0.2 million and $1.3 million as of December 31, 2023, 2022, and 2021, respectively. Substantially all of these balances are recognized as revenue within 12 months. Net contract assets were not material for any period presented. |
Settlement Assets and Customer_
Settlement Assets and Customer/Subscriber Account Balances and Related Obligations | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Settlement Assets and Customer/Subscriber Account Balances and Related Obligations | Settlement Assets and Customer/Subscriber Account Balances and Related Obligations SMB Payments Segment In the Company's SMB Payments reportable segment, funds settlement refers to the process of transferring funds for sales and credits between card issuers and merchants. The standards of the card networks require possession of funds during the settlement process by a member bank which controls the clearing transactions. Since settlement funds are required to be in the possession of a member bank until the merchant is funded, these funds are not assets of the Company and the associated obligations related to these funds are not liabilities of the Company. Therefore, neither is recognized in the Company's Consolidated Balance Sheets. Member banks held merchant funds of $98.0 million and $110.3 million at December 31, 2023 and 2022, respectively. Exception items include items such as customer chargeback amounts received from merchants and other losses. Under agreements between the Company and its merchant customers, the merchants assume liability for such chargebacks and losses. If the Company is ultimately unable to collect amounts from the merchants for any charges or losses due to merchant fraud, insolvency, bankruptcy or any other reason, it may be liable for these charges. In order to mitigate the risk of such liability, the Company may: 1) require certain merchants to establish and maintain reserves designed to protect the Company from such charges or losses under its risk-based underwriting policy; and 2) engage with certain ISOs in partner programs in which the ISOs assume liability for these charges or losses. A merchant reserve account is funded by the merchant and held by the member bank during the term of the merchant agreement. Unused merchant reserves are returned to the merchant after termination of the merchant agreement or in certain instances upon a reassessment of risks during the term of the merchant agreement. Exception items that become the liability of the Company are recorded as merchant losses, a component of costs of services in the Consolidated Statements of Operations and Comprehensive Loss. Exception items that the Company is still attempting to collect from the merchants through the funds settlement process or merchant reserves are recognized as settlement assets and customer/subscriber account balances in the Company's Consolidated Balance Sheets, with an offsetting reserve for those amounts the Company estimates it will not be able to recover. Expenses for merchant losses for the years ended December 31, 2023, 2022 and 2021 were $6.2 million, $4.4 million and $2.8 million, respectively. B2B Payments Segment In the Company's B2B Payments segment, the Company earns revenues from certain of its services by processing transactions for FIs and other business customers. Customers transfer funds to the Company, which are held in either Company-owned bank accounts controlled by the Company or bank-owned FBO accounts controlled by the banks, until such time as the transactions are settled with the customer payees. Amounts due to customer payees that are held by the Company in Company-owned bank accounts are included in restricted cash. Amounts due to customer payees that are held in bank-owned FBO accounts are not assets of the Company. As such, the associated obligations related to these funds are not liabilities of the Company; therefore, neither is recognized in the Company's Consolidated Balance Sheets. Bank-owned FBO accounts held funds of $69.0 million and $52.9 million at December 31, 2023 and 2022, respectively. Company-owned bank accounts held $1.2 million and $4.1 million at December 31, 2023 and 2022, respectively, which are included in restricted cash and settlement obligations in the Company's Consolidated Balance Sheets. For the Plastiq business, the Company accepts card payments from its customers and processes disbursements to their vendors. The time lag between authorization and settlement of card transactions creates certain receivables (from card networks) and payables (to the vendors of customers). These receivables and payables arise from the settlement activities that the Company performs on the behalf of its customers and therefore, are presented as Settlement assets and related obligations. Enterprise Payments Segment In the Company's Enterprise Payments segment, revenue is derived primarily from enrollment fees, monthly subscription fees, transaction-based fees and money transmission services fees. As part of its licensed money transmission services, the Company accepts deposits from customers and subscribers which are held in bank accounts maintained by the Company on behalf of customers and subscribers. After accepting deposits, the Company is allowed to invest available balances in these accounts in certain permitted investments, and the return on such investments contributes to the Company's net cash inflows. These balances are payable on demand. As such, the Company recorded these balances and related obligations as current assets and current liabilities. The nature of these balances is cash and cash equivalents but they are not available for day-to-day operations of the Company. Therefore, the Company has classified these balances as settlement assets and customer/subscriber account balances and the related obligations as settlement and customer/subscriber account obligations in the Company's Consolidated Balance Sheets. In certain states, the Company accepts deposits under agency arrangement with member banks wherein accepted deposits remain under the control of the member banks. Therefore, the Company does not record assets for the deposits accepted and liabilities for the associated obligation. Agency owned accounts held $19.6 million and $6.1 million and at December 31, 2023 and 2022, respectively. The Company's consolidated settlement assets and customer/subscriber account balances and settlement and customer/subscriber account obligations were as follows: (in thousands) December 31, 2023 December 31, 2022 Settlement Assets, net of estimated losses (1) : Card settlements due from merchants $ 2,705 $ 444 Card settlements due from networks 8,185 — Customer/Subscriber Account Balances: Cash and cash equivalents 745,585 531,574 Total settlement assets and customer/subscriber account balances $ 756,475 $ 532,018 Settlement and Customer/Subscriber Account Obligations: Customer account obligations $ 710,775 $ 516,086 Subscriber account obligations 33,921 15,488 Total customer/subscriber account obligations 744,696 531,574 Due to customer payees (2) 11,058 1,766 Total settlement and customer/subscriber account obligations $ 755,754 $ 533,340 (1) Allowance for estimated losses was $6.6 million and $5.0 million as of December 31, 2023 and 2022, respectively (2) Card settlements due from networks includes $8.2 million as of December 31, 2023 of related assets and remainder are included in restricted cash on our Consolidated Balance Sheets. There were no card settlements due from networks in 2022. |
Notes Receivable
Notes Receivable | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Notes Receivable | Notes Receivable The Company has notes receivable of $5.2 million and $4.7 million as of December 31, 2023 and 2022, respectively, which are reported as current portion of notes receivable and notes receivable less current portion on the Company's Consolidated Balance Sheets. The notes bear a weighted-average interest rate of 18.6% and 15.4% as of December 31, 2023 and 2022, respectively. The notes receivable are comprised of notes receivable from ISOs, and under the terms of the agreements the Company preserves the right to hold back residual payments due to the ISOs and to apply such residuals against future payments due to the Company. As of December 31, 2023, the principal payments for the Company's notes receivables are due as follows: (in thousands) Year Ending December 31, 2024 $ 1,468 2025 1,365 2026 909 2027 1,031 2028 423 Thereafter — Total $ 5,196 As of December 31, 2023 and 2022, the Company had no allowance for doubtful notes receivable. |
Property, Equipment and Softwar
Property, Equipment and Software | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Equipment and Software | Property, Equipment and Software A summary of property, equipment and software, net was as follows: (in thousands) December 31, 2023 December 31, 2022 Computer software $ 78,492 $ 64,197 Equipment 10,377 13,302 Leasehold improvements 1,535 6,990 Furniture and fixtures 1,442 2,909 Property, equipment and software 91,846 87,398 Less: Accumulated depreciation (56,442) (58,409) Capital work in-progress 9,276 5,698 Property, equipment and software, net $ 44,680 $ 34,687 Years Ended December 31, (in thousands) 2023 2022 2021 Depreciation expense $ 11,494 $ 9,511 $ 8,460 Computer software consists of purchased software, internally developed back office systems including those used to assist in the reporting of merchant processing transactions and other related information. Fully depreciated assets are retained in property, equipment and software, net, until removed from service. During the year ended December 31, 2023, certain fully depreciated assets were removed from service. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The Company records goodwill upon acquisition of a business when the purchase price is greater than the fair value assigned to the underlying separately identifiable tangible and intangible assets acquired and the liabilities assumed. The Company's goodwill relates to the following reporting units: (in thousands) December 31, 2023 December 31, 2022 SMB Payments $ 124,139 $ 124,625 Enterprise Payments 244,712 244,712 Plastiq (B2B Payments) 7,252 — Total $ 376,103 $ 369,337 The following table summarizes the changes in the carrying value of goodwill: (in thousands) Amount Balance at January 1, 2022 365,740 Final purchase price adjustment for Finxera (392) Ovvi acquisition 3,989 Balance at December 31, 2022 369,337 Purchase price adjustment for Ovvi (486) Plastiq acquisition and purchase price adjustments 7,252 Balance at December 31, 2023 $ 376,103 For business combinations consummated during the year ended December 31, 2023, goodwill was fully deductible for income tax purposes. The Company performed its most recent annual goodwill impairment analysis as of October 1, 2023, as noted below: • For the purpose of the goodwill impairment analysis, the Company determined the reporting units were Enterprise Payments, SMB Payments, and Plastiq, a component of the B2B Payments operating segment, as allowed by ASC 350. • The Company's SMB Payments operating segment experienced a decrease in bankcard volume and revenue during 2023 due to the diversification of an ISV. Additionally, this operating segment also experienced compressed margins due to expenses associated with costs of sales increasing at a larger rate than revenue. Considering the most recent fair value valuation was performed in 2019, the Company elected the option to unconditionally bypass the qualitative impairment analysis and proceed with performing the quantitative analysis for the SMB Payments reporting unit as allowed by ASC 350. For the purpose of the quantitative analysis, the guideline public company method and the discounted cash flow method (equally weighted) were determined to be the appropriate methodology. The impairment analysis concluded the fair value of the reporting unit was greater than its carrying amount and therefore, no impairment was recognized. • The Company's Enterprise Payments operating segment had an increase in volumes, revenue and margins for 2023. The remaining goodwill related to the acquisition of Plastiq (see Note 2. Acquisitions ). Given the performance of the Enterprise Payments operating segment and the relatively short time passed since the Plastiq acquisition, the Company elected to perform the qualitative impairment analysis for these reporting units. Under the qualitative impairment analysis, the Company identified drivers which may affect the reporting units' fair value, determined which events and circumstances impacted those drivers and concluded it was not more likely than not that the fair value of the reporting units was less than the carrying amount. There were no impairment losses for the years ended December 31, 2023, 2022 or 2021. As of December 31, 2023, the Company is not aware of any triggering events that have occurred since October 1, 2023. Other Intangible Assets At December 31, 2023 and 2022, other intangible assets consisted of the following: (in thousands, except weighted-average data) December 31, 2023 Weighted-average Gross Carrying Value Accumulated Amortization Net Carrying Value Other intangible assets: ISO and referral partner relationships $ 182,339 $ (36,506) $ 145,833 14.7 Residual buyouts 135,164 (92,699) 42,465 6.3 Customer relationships 109,017 (92,781) 16,236 8.4 Merchant portfolios 83,350 (56,139) 27,211 6.5 Technology 57,639 (22,712) 34,927 9.0 Non-compete agreements 3,390 (3,390) — 0.0 Trade names 7,104 (2,526) 4,578 11.7 Money transmission licenses (1) 2,100 — 2,100 Total gross carrying value $ 580,103 $ (306,753) $ 273,350 9.7 (1) These assets have an indefinite useful life. (in thousands, except weighted-average data) December 31, 2022 Weighted-average Gross Carrying Value Accumulated Amortization Net Carrying Value Other intangible assets: ISO relationships $ 175,300 $ (24,021) $ 151,279 14.8 Residual buyouts 132,325 (76,316) 56,009 6.6 Customer relationships 96,000 (83,298) 12,702 8.2 Merchant portfolios 76,423 (43,170) 33,253 6.7 Technology 50,963 (18,566) 32,397 8.4 Non-compete agreements 3,390 (3,390) — 0.0 Trade names 3,183 (2,129) 1,054 11.6 Money transmission licenses (1) 2,100 — 2,100 Total gross carrying value $ 539,684 $ (250,890) $ 288,794 9.7 (1) These assets have an indefinite useful life. Years Ended December 31, (in thousands) 2023 2022 2021 Amortization expense $ 56,901 $ 61,170 $ 41,237 The estimated amortization expense of intangible assets as of December 31, 2023, for the next five years and thereafter is: (in thousands) Estimated Amortization Expense Year Ending December 31, 2024 $ 40,559 2025 34,480 2026 33,691 2027 31,427 2028 23,426 Thereafter 107,667 Total (1) $ 271,250 (1) Total will not agree to the intangible asset net book value due to intangible assets with indefinite useful life. Actual amortization expense to be reported in future periods could differ from these estimates as a result of new intangible asset acquisitions, changes in useful lives and other relevant events or circumstances. The Company tests intangible assets for impairment when events occur or circumstances indicate that the fair value of an intangible asset or group of intangible assets may be impaired. The Company also considered the market conditions and other factors and concluded that there were no additional impairment indicators present at December 31, 2023. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company's leases consist primarily of real estate leases for office space, which are classified as operating leases. Lease expense for the Company's operating leases is recognized on a straight-line basis over the term of the lease. The Company did not have any finance leases at December 31, 2023 and 2022. The ROU Assets and lease liabilities consisted of the following: (in thousands, except weighted-average data) Financial Statement Classification December 31, 2023 December 31, 2022 Operating Lease ROU Assets: Operating lease ROU Assets Other noncurrent assets $ 5,427 $ 4,593 Operating Lease Obligations: Operating lease obligations - current Accounts payable and accrued expenses $ 1,582 $ 1,336 Operating lease obligations - noncurrent Other noncurrent liabilities 4,592 4,110 Total operating lease obligations $ 6,174 $ 5,446 Weighted-average remaining lease term in years 3.8 4.4 Weighted-average discount rate 5.9 % 6.9 % The Components of lease expense were as follows: Years Ended December 31, (in thousands) Financial Statement Classification 2023 2022 2021 Operating lease expense (1) Selling, general and administrative $ 1,760 $ 1,984 $ 1,841 (1) Excludes short-term lease expense and sublease income, which was immaterial for the years ended December 31, 2023 and 2022. Years Ended December 31, (in thousands) Financial Statement Classification 2023 2022 2021 Operating cash flows from operating leases Operating activities $ 1,862 $ 2,131 $ 1,803 Lease Commitments Future minimum lease payments for the Company's real estate operating leases at December 31, 2023 were as follows: (in thousands) Year Ending December 31, Amount Due 2024 $ 1,873 2025 1,731 2026 1,701 2027 1,254 2028 265 Thereafter 65 Total future minimum lease payments 6,889 Amount representing interest (715) Total future minimum lease payments, net of interest $ 6,174 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2023 | |
Accounts Payable [Abstract] | |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses The components of accounts payable and accrued expenses consisted of the following: (in thousands) December 31, 2023 December 31, 2022 Accrued expenses $ 12,621 $ 17,742 Accrued card network fees 14,320 14,243 Accrued compensation 8,748 7,287 Contingent consideration, current portion 5,951 6,079 Accounts payable 11,003 6,513 Total accounts payable and accrued expenses $ 52,643 $ 51,864 |
Debt Obligations
Debt Obligations | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations Outstanding debt obligations consisted of the following: (in thousands) December 31, 2023 December 31, 2022 Credit Agreement: Term facility - matures April 27, 2027, interest rate of 11.21% and 9.82% at December 31, 2023 and 2022, respectively $ 654,373 $ 610,700 Revolving credit facility - $65.0 million ($40.0 million for 2022) line, matures April 27, 2026, interest rate of 10.20% and 8.82% at December 31, 2023 and 2022, respectively — 12,500 Total debt obligations 654,373 623,200 Less: current portion of long-term debt (6,712) (6,200) Less: unamortized debt discounts and deferred financing costs (15,696) (18,074) Long-term debt, net $ 631,965 $ 598,926 Contractual Maturities Based on terms and conditions existing at December 31, 2023, future minimum principal payments for long-term debt are as follows: (in thousands) Revolving Credit Facility December 31, Term Facility Total Principal Due 2024 $ 6,712 $ — $ 6,712 2025 6,712 — 6,712 2026 6,712 — 6,712 2027 634,237 — 634,237 Total $ 654,373 $ — $ 654,373 Additionally, the Company may be obligated to make certain additional mandatory prepayments after the end of each year based on excess cash flow, as defined in the Credit Agreement. Credit Agreement On April 27, 2021, the Company entered into a Credit Agreement with Truist which provides for: 1) a $300.0 million Initial Term Loan; 2) a $290.0 million Delayed Draw Term Loan (together, the "Term Facility"); and 3) a $40.0 million senior secured revolving credit facility. The First Amendment to the Credit Agreement on May 20, 2021, clarified and provided further detail on the Credit Agreement's terms. The Second Amendment to the Credit Agreement on September 17, 2021, increased the amount of the Delayed Draw Term Loan facility by $30.0 million to $320.0 million. The additional Delayed Draw Term Loan is part of the same class of term loans made pursuant to the original commitments under the Credit Agreement. Third Amendment to the April 2021 Credit Agreement On June 30, 2023, the Credit Agreement of the Company was amended to incorporate the following: • Reference rate : The reference rate for the calculation of interest on the Company’s term loan and revolving credit facility was amended from LIBOR to SOFR effective June 30, 2023. Per the amended terms, the outstanding borrowings under the Credit Agreement interest will accrue using the SOFR rate plus a term SOFR adjustment plus an applicable margin per year, subject to a SOFR floor of 1.00% per year. The applicable interest rate as of December 31, 2023, for the revolving credit facility based on one-month SOFR was 10.20% and for the term facility based on one-month SOFR was 11.21%. • Increase in the revolving credit facility: The amendments also resulted in an increase in the Company’s revolving credit facility from $40.0 million to $65.0 million. Fourth Amendment to the April 2021 Credit Agreement On October 2, 2023, the Company modified its existing Term Facility Credit agreement with Truist. The agreement increased the principal balance by $50.0 million and increased the quarterly principal amortization payment from $1.6 million to $1.7 million. There were no other significant modifications to the Credit Agreement. Outstanding borrowings under the Credit Agreement accrue interest using either a base rate or a SOFR rate plus an applicable margin per year, subject to a SOFR rate floor of 1.00% per year. Accrued interest is payable on each interest payment date (as defined in the Credit Agreement). The revolving credit facility incurs an unused commitment fee on any undrawn amount in an amount equal to 0.50% per year of the unused portion. The future applicable interest rate margins may vary based on the Company's Total Net Leverage Ratio in addition to future changes in the underlying market rates for SOFR and the rate used for base-rate borrowings. Prepayments of outstanding principal may be made in permitted increments subject to a 1.00% penalty for certain prepayments made in connection with repricing transactions. Proceeds from the Initial Term Loan were used to partially fund the refinancing of the Company's existing credit facilities as of April 27, 2021. Proceeds from the Delayed Draw Term Loan were used to fund the Company's acquisition of Finxera. Proceeds from the Fourth Amendment were used to repay the balance of the revolving credit facility (used to acquire Plastiq business) and added additional cash for general corporate purposes. Interest Expense and Amortization of Deferred Loan Costs and Discounts Deferred financing costs and debt discounts are amortized using the effective interest method over the remaining term of the respective debt and are recorded as a component of interest expense. Unamortized deferred financing costs and debt discount are included in long-term debt on the Company's Consolidated Balance Sheets. Twelve Months Ended December 31, (in thousands) 2023 2022 2021 Interest expense (1) $ 76,108 $ 53,554 $ 36,485 (1) Included in this amount is $1.7 million and $0.9 million of interest expense related to the accretion of contingent considerations from acquisitions for December 31, 2023 and 2022. Interest expense included amortization of deferred financing costs and debt discounts of $3.8 million, $3.5 million and $4.0 million for the years ended December 31, 2023, 2022 and 2021, respectively. As a result of the Third Amendment in June 2023, the Company incurred $0.8 million of deferred loan costs. The Fourth Amendment in October 2023 was issued at a discount of $0.3 million. These costs, along with other capitalized modification costs of $0.4 million, will be amortized over the remaining period of the existing Term Loan as a reduction of the carrying amount of the debt obligation. Debt issuance costs of $0.1 million for the Fourth Amendment were expensed as incurred. Debt Covenants The Credit Agreement contains 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. The outstanding amount of any loans and any other amounts owed under the Credit Agreement may, after the occurrence of an event of default, at the option of Truist on behalf of lenders representing a majority of the commitments, be declared immediately due and payable. Events of default include the failure of the Company to make principal, premium or interest payment when due, or the failure by the Company to perform or comply with any term or covenant in the Credit Agreement, after any applicable cure period. If the aggregate principal amount of outstanding revolving loans and letters of credit under the Credit Agreement exceeds 35% of the total revolving credit facility thereunder, the loan parties are required to comply with certain restrictions on its Total Net Leverage Ratio. If applicable, the maximum permitted Total Net Leverage Ratio is: 1) 6.50:1.00 at each fiscal quarter ended September 30, 2021 through June 30, 2022; 2) 6.00:1.00 at each fiscal quarter ended September 30, 2022 through June 30, 2023; and 3) 5.50:1.00 at each fiscal quarter ended September 30, 2023 each fiscal quarter thereafter. As of December 31, 2023, the Company was in compliance with the covenants in the Credit Agreement. |
Redeemable Senior Preferred Sto
Redeemable Senior Preferred Stock and Warrants | 12 Months Ended |
Dec. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Redeemable Senior Preferred Stock and Warrants | Redeemable Senior Preferred Stock and Warrants On April 27, 2021, the Company entered into an agreement pursuant to which it issued 150,000 shares of redeemable senior preferred stock, par value $0.001 per share, and a detachable warrant to purchase 1,803,841 shares of the Company's Common Stock, for gross proceeds of $150.0 million, less a $5.0 million discount and $5.5 million of issuance costs. The agreement also provided the Company the option to issue an additional 50,000 shares of redeemable senior preferred stock upon the closing of the Finxera acquisition for $50.0 million, less a $0.6 million discount and within 18 months after the issuance of those additional shares, subject to the satisfaction of certain customary closing conditions. The Company was also provided with the option to issue an additional delayed 50,000 shares at a purchase price of $50.0 million, less a $0.6 million discount, subject to the satisfaction of certain customary closing conditions. Of the total net proceeds of $139.5 million, $131.4 million was allocated to the redeemable senior preferred stock, $11.4 million was allocated to additional paid-in capital for the warrants and $3.3 million was allocated to noncurrent assets for the committed financing put right. On September 17, 2021, the Company issued an additional 75,000 shares of redeemable senior preferred stock for $75.0 million, less a $0.9 million discount, $0.7 million of ticking fees and $1.9 million of issuance costs. Upon issuance of these additional shares, the $3.3 million that was previously allocated to noncurrent assets for the committed financing put right was reclassified to the redeemable senior preferred stock. The redeemable senior preferred stock ranks senior to the Company's Common Stock, equal with any other class of the Company's stock designated as being ranked on a parity basis with the redeemable senior preferred stock and junior to any other class of the Company's stock, including preferred stock, that is designated as being ranked senior to the redeemable senior preferred stock, with respect to the payment and distribution of dividends, the purchase or redemption of the Company's stock and the liquidation, winding up of and distribution of assets of the Company. The redeemable senior preferred stock does not meet the definition of a liability pursuant to ASC 480, Distinguishing Liabilities from Equity , as it is redeemable upon the occurrence of events that are not solely within the Company's control. Therefore, the Company classified the redeemable senior preferred stock as temporary equity and is accreting the carrying amount to its full redemption amount from the date of issuance to the earliest redemption date using the effective interest method. The following table provides the redemption value of the redeemable senior preferred stock for the periods presented: (in thousands) December 31, 2023 December 31, 2022 Redeemable senior preferred stock $ 225,000 $ 225,000 Accumulated unpaid dividend 43,498 25,498 Dividend payable 7,027 5,341 Redemption value 275,525 255,839 Less: unamortized discounts and issuance costs (16,920) (20,260) Redeemable senior preferred stock, net of discounts and issuance costs $ 258,605 $ 235,579 The following table provides a reconciliation of the beginning and ending carrying amounts of the redeemable senior preferred stock for the periods presented: (in thousands) Shares Amount January 1, 2022 225 $ 210,158 Unpaid dividend on redeemable senior preferred stock — 16,794 Accretion of discounts and issuance cost — 3,286 Cash portion of dividend and ticking fee outstanding at the end of the year — 5,341 December 31, 2022 225 $ 235,579 Unpaid dividend on redeemable senior preferred stock — 18,000 Accretion of discounts and issuance cost — 3,340 Cash portion of dividend outstanding at December 31, 2023 — 7,027 Payment of cash portion of dividend and ticking fee outstanding at December 31, 2022 — (5,341) December 31, 2023 225 $ 258,605 On June 30, 2023, the Company amended the Certificate of Designation of its redeemable senior preferred stock to transition the reference rate used for the calculation of dividends from LIBOR to SOFR. Under the Amended Certificate of Designation, the dividend rate (capped at 22.50%) will be equal to the three-month term SOFR (minimum of 1.00%), plus the three-month term SOFR spread adjustment of 0.26% plus the applicable margin of 12.00%. All other terms in the agreement were unchanged. For the three months ended December 31, 2023, SOFR is the reference rate for calculation of the dividend. The dividend rate is subject to future increases if the Company doesn't comply with the minimum cash payment requirements outlined in the agreement, which includes required payments of dividends, required payments related to redemption or required prepayments. The dividend rate may also increase if the Company fails to obtain the required stockholder approval for a forced sale transaction triggered by investors or if an event of default as outlined in the agreement occurs. The dividend rate as of December 31, 2023, and 2022 was 17.7% and 15.7% respectively. The following table provides a summary of the dividends for the period presented: (in thousands) Year Ended December 31, 2023 Year Ended Dividends paid in cash (1) $ 26,404 $ 16,800 Accumulated dividends accrued as part of the carrying value of redeemable senior preferred stock 18,000 16,794 Dividends declared $ 44,404 $ 33,594 (1) Included in this amount is $7.0 million and $5.3 million of dividends outstanding as of December 31, 2023 and 2022 respectively. The following table presents cumulative dividends in arrears in aggregate and per-share: (in thousands, except per share amounts) Year Ended December 31, 2023 Year Ended Cumulative preferred dividends in arrears $ 43,498 $ 25,497 Redeemable senior preferred stock, outstanding 225 225 Cumulative preferred dividends in arrears, per share $ 193.3 $ 113.3 The redeemable senior preferred shares have no stated maturity and will remain outstanding indefinitely until redeemed or otherwise repurchased by the Company. Outstanding shares of redeemable senior preferred stock can be redeemed at the option of the Company for cash in whole or in part at the following redemption price: Redemption Date Redemption Price Prior to April 27, 2023 100% of liquidation preference (i.e., $1,000 per share) plus any accrued and unpaid dividends and the make-whole amount (i.e., present value of additional 2% of the liquidation preference plus any accrued and unpaid dividends thereon through the redemption date plus 102% of the amount of dividends that will accrue from the redemption date through April 27, 2023) April 27, 2023 - April 26, 2024 102% of the sum of the (a) outstanding liquidation preference plus (b) any accrued and unpaid dividends through and including the applicable redemption date April 27, 2024 and thereafter 100% of the sum of the (a) outstanding liquidation preference plus (b) any accrued and unpaid dividends through and including the applicable redemption date Upon the occurrence of a change in control or a liquidation event, the Company will redeem all of the outstanding redeemable senior preferred shares for cash at the applicable redemption price described above. The holders of the redeemable senior preferred stock may request the Company to pursue a sale transaction for the purpose of redeeming the redeemable senior preferred stock from and after the earliest of: 1) October 27, 2028; 2) 30 days after the redeemable senior preferred stockholders provide written notice to the Company of a failure by the Company to take steps within its control to prevent the Company's Common Stock from no longer being listed; and 3) the date that is 90 days following the Company's failure to consummate a mandatory redemption of the redeemable senior preferred stock upon the occurrence of a change in control or liquidation event. The Company used the proceeds from the April 2021 sale of the redeemable senior preferred stock to partially fund the refinancing to partially fund the Wholesale Payments, Inc. and C&H Financial Services, Inc. acquisitions in the second quarter of 2021 (see Note 2. Acquisitions ) and to pay certain fees and expenses relating to the Refinancing and the offering of the redeemable senior preferred stock and warrants. The Company used the proceeds from the September 2021 sale of additional shares of redeemable senior preferred stock to fund the Finxera acquisition (see Note 2. Acquisitions ). Warrants |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Components of consolidated income tax (benefit) expense were as follows: (in thousands) For the Years Ended December 31, 2023 2022 2021 U.S. current income tax expense (benefit) Federal $ 10,624 $ 10,411 $ (2,321) State and local 3,187 2,546 (379) Foreign 738 349 1 Total current income tax expense (benefit) $ 14,549 $ 13,306 $ (2,699) U.S. deferred income tax expense (benefit) Federal $ (5,149) $ (5,001) $ (1,343) State and local (712) (2,970) (1,213) Foreign (225) 15 (3) Total deferred income tax (benefit) expense $ (6,086) $ (7,956) $ (2,559) Total income tax expense (benefit) $ 8,463 $ 5,350 $ (5,258) The Company's consolidated effective income tax rate was 118.3% for the year ended December 31, 2023, compared to a consolidated effective income tax rate of 167.2% for the year ended December 31, 2022. For the year ended December 31, 2021, the Company's consolidated effective income tax benefit rate was 135.9%. The effective rate for 2023 differed from the statutory rate of 21% primarily due to: 1) an increase in the valuation allowance against certain business interest carryover deferred tax assets. The effective rate for December 31, 2022 differed from the statutory federal rate of 21% primarily due to: 1) an increase in the valuation allowance against certain business interest carryover deferred tax assets; 2) non-deductible transaction costs incurred in the acquisition of Finxera; 3) the finalization of prior estimates on the sale of the assets of PRET's real estate services business impacting amounts attributable to noncontrolling partners; and 4) an increase in the tax basis of certain intangible assets resulting from a change in a subsidiary's entity status. The effective rate for December 31, 2021, differed from the statutory federal rate of 21% primarily due to earnings attributable to noncontrolling interests and valuation allowance changes against certain business interest carryover deferred tax assets. The following table provides a reconciliation of the consolidated income tax (benefit) expense at the statutory U.S. federal tax rate to actual consolidated income tax (benefit) expense: (in thousands) For the Years Ended December 31, 2023 2022 2021 U.S. federal statutory expense (benefit) $ 1,502 $ 672 $ (813) Non-controlling interests — — (3,024) State and local income taxes, net 1,588 421 (372) Foreign rate differential 114 142 — Excess tax benefits pursuant to ASU 2016-09 235 4 (339) Valuation allowance changes 3,958 4,957 1,120 Nondeductible items 768 576 703 Transaction Costs — — 2,338 Intangible assets — (1,226) (4,110) Tax credits — (100) (223) Other, net 298 (96) (538) Income tax expense (benefit) $ 8,463 $ 5,350 $ (5,258) Deferred income taxes reflect the expected future tax consequences of temporary differences between the financial statement carrying amount of the Company's assets and liabilities, tax credits and their respective tax bases, and loss carry forwards. The significant components of consolidated deferred income taxes were as follows: As of December 31, (in thousands) 2023 2022 Deferred Tax Assets: Accruals and reserves $ 1,392 $ 1,510 Investments in partnership 689 — Intangible assets 25,682 15,600 Net operating loss carryforwards 934 749 Interest limitation carryforwards 18,917 15,142 Other 3,982 4,107 Gross deferred tax assets 51,596 37,108 Valuation allowance (19,421) (15,462) Total deferred tax assets 32,175 21,646 Deferred Tax Liabilities: Prepaid assets (1,124) (1,101) Investments in partnership — (41) Property and equipment (8,518) (4,057) Total deferred tax liabilities (9,642) (5,199) Net deferred tax assets $ 22,533 $ 16,447 In accordance with the provisions of ASC 740, Income Taxes , the Company provides a valuation allowance against deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The assessment considers all available positive and negative evidence and is measured quarterly. As of December 31, 2023 and 2022, the Company had a consolidated valuation allowance of approximately $19.4 million and $15.5 million, respectively, against certain deferred income tax assets related to business interest deduction carryovers and business combination costs that the Company believes are not more likely than not to be realized. The Company recognizes the tax effects of uncertain tax positions only if such positions are more likely than not to be sustained based solely upon its technical merits at the reporting date. The Company refers to the difference between the tax benefit recognized in its financial statements and the tax benefit claimed in the income tax return as an "unrecognized tax benefit." A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (in thousands) Balance as of January 1, 2023 $ 302 Additions based on tax positions related to the current year — Additions based on positions of prior years — Reductions for tax positions of prior years — Reductions related to lapse of the applicable statutes of limitations (148) Settlements — Balance as of December 31, 2023 $ 154 As of December 31, 2023 and 2022, the balance of unrecognized tax benefits that, if recognized, affect our effective tax rate was $0.0 million and $0.1 million, respectively. The Company continually evaluates the uncertain tax benefit associated with its uncertain tax positions. It is reasonably possible that the liability for uncertain tax benefits could decrease during the next 12 months by up to $0.1 million due to the expiration of statutes of limitations. The Company is subject to U.S. federal income tax and income tax in multiple state jurisdictions. Tax periods for December 31, 2020 and all years thereafter remain open to examination by the federal and state taxing jurisdictions and tax periods for December 31, 2019 and all years thereafter remain open for certain state taxing jurisdictions to which the Company is subject. At December 31, 2023 and December 31, 2022, the Company had state NOL carryforwards of approximately $17.9 million and $13.4 million, respectively, with expirations dates ranging from 2023 to 2043. The Company has historically been impacted by the new interest deductibility rule under the Tax Act. This rule disallows interest expense to the extent it exceeds 30% of ATI, as defined. In March 2020, the CARES Act was enacted, which among other provisions, provides for the increase of the 163(j) ATI limitation from 30% to 50% for tax years 2019 and 2020. As of December 31, 2023, the Company had interest deduction limitation carryforwards of $78.1 million. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Stockholders' Deficit | Stockholders' Deficit Except as otherwise required by law or as otherwise provided in any certificate of designation for any series of preferred stock, the holders of the Company's Common Stock possess all voting power for the election of members of the Company's Board of Directors and all other matters requiring stockholder action and will at all times vote together as one class on all matters submitted to a vote of the Company's stockholders. Holders of the Company's Common Stock are entitled to one vote per share on matters to be voted on by stockholders. Holders of the Company's Common Stock will be entitled to receive such dividends and other distributions, if any, as may be declared from time to time by the Company's Board of Directors in its discretion. Historically, the Company has neither declared nor paid dividends. The holders of the Company's Common Stock have no conversion, preemptive or other subscription rights and there is no sinking fund or redemption provisions applicable to the Common Stock. The Company is authorized to issue 100,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors. As of December 31, 2023, the Company has not issued any shares of preferred stock. Share Repurchase Program During the second quarter of 2022, PRTH's Board of Directors authorized a general share repurchase program under which the Company may purchase up to 2.0 million shares of its outstanding Common Stock for a total of up to $10.0 million. Under the terms of this plan, the Company may purchase shares through open market purchases, unsolicited or solicited privately negotiated transactions, or in another manner so long as it complies with applicable rules and regulations. Share re-purchase activity under these programs was as follows: Years Ended December 31, in thousands, except share data, which is in whole units 2023 2022 Number of shares purchased (1) — 1,309,374 Average price paid per share $ — $ 4.42 Total Investment (1) $ — $ 5,791 (1) These amounts may differ from the repurchases of Common Stock amounts in the Consolidated Statements of Cash Flows due to shares withheld for taxes and unsettled share repurchases at the end of the year. Warrants and Purchase Options As of December 31, 2022 and December 31, 2021, 3,556,470 warrants from the original business combination in July 2018, were outstanding. These warrants allowed the holders to purchase shares of the Company's Common Stock at an exercise price of $11.50 per share. These warrants expired on August 24, 2023 and no warrants were exercised. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Compensation | Stock-based Compensation 2018 Equity Incentive Plan The 2018 Plan was approved by the Company's Board of Directors and shareholders in July 2018. The 2018 Plan provided for the issuance of up to 6,685,696 of the Company's Common Stock, and these shares were registered on a Form S-8 during 2018. Under the 2018 Plan, the Company's compensation committee may grant awards of non-qualified stock options, incentive stock options, SARs, restricted stock awards, RSUs, other stock-based awards (including cash bonus awards) or any combination of the foregoing. Any current or prospective employees, officers, consultants or advisors that the Company's compensation committee (or, in the case of non-employee directors, the Company's Board of Directors) selects, from time to time, are eligible to receive awards under the 2018 Plan. If any award granted under the 2018 Plan expires, terminates, or is canceled or forfeited without being settled or exercised, or if a SAR is settled in cash or otherwise without the issuance of shares, shares of the Company's Common Stock subject to such award will again be made available for future grants. In addition, if any shares are surrendered or tendered to pay the exercise price of an award or to satisfy withholding taxes owed, such shares will again be available for grants under the 2018 Plan. On March 17, 2022, the Company's Board of Directors unanimously approved an amendment to the 2018 Plan which was subsequently approved by our shareholders, to increase the number of shares authorized for issuance under the plan by 2,500,000 shares, resulting in 9,185,696 shares of the Company's Common Stock authorized for issuance under the plan. These additional shares were registered on Form S-8 in December 2022. Stock-based compensation was as follows: Years Ended December 31, (in thousands) 2023 2022 2021 2018 Equity Incentive Plan Restricted stock units compensation expense $ 6,423 $ 6,182 $ 2,561 Stock options compensation expense 7 7 327 Liability-classified compensation expense — — 325 Total stock-based compensation under the 2018 Equity Incentive Plan 6,430 6,189 3,213 ESPP compensation expense 50 39 — Incentive units compensation expense 288 — — Total $ 6,768 $ 6,228 $ 3,213 For the year ended December 31, 2023, the Company recognized an income tax expense of approximately $0.1 million for stock-based compensation expense. For the years ended December 31, 2022 and 2021, the Company recognized and income tax benefit of approximately $0.7 million and $0.4 million, respectively, for stock-based compensation expense. No stock-based compensation has been capitalized. A summary of the activity in stock units for the 2018 Plan is as follows: Common Stock available for issuance at January 1, 2021 3,862,134 Stock options forfeited 50,589 Stock options expired 53,870 RSUs granted (711,987) RSUs forfeited 1,957 Shares withheld for taxes (1) 106,477 Common Stock available for issuance at December 31, 2021 3,363,040 New shares authorized for issuance 2,500,000 Stock options forfeited 221,733 RSUs granted (3,223,949) RSUs forfeited 353,196 Shares withheld for taxes (1) 291,266 Common Stock available for issuance at December 31, 2022 3,505,286 Stock options forfeited 129,380 RSUs granted (641,578) RSUs forfeited 263,600 Shares withheld for taxes (1) 291,110 Common Stock available for issuance at December 31, 2023 3,547,798 (1) The number of shares surrendered to satisfy withholding taxes owed are subsequently added back to the shares available for grant under the 2018 Plan. Details about the time-based equity-classified stock options granted under the plan are as follows: Number of Shares Weighted-average Exercise Price Weighted-average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2022 1,005,892 $ 6.88 5.7 years $ 42 Forfeited (1) (129,380) 6.95 Outstanding, December 31, 2023 876,512 6.87 4.9 years $ 16 Exercisable at December 31, 2023 872,762 $ 6.89 5.0 years $ 12 (1) Forfeited includes awards for which the participant has been terminated but has 90 days from the date of termination to exercise the award based on the agreement. There were no options granted in 2023, 2022, or 2021. The intrinsic value of options exercised in 2021 was $0.2 million and there were no options exercised in 2023 or 2022. As of December 31, 2023, there was $4.2 thousand of unrecognized compensation costs related to stock options, which is expected to be recognized over a remaining weighted-average period of 0.6 years. Equity-classified Restricted Stock Units Below is a summary of the Company's equity-classified RSUs for the periods presented: Underlying Common Shares Weighted-average Grant Date Fair Value Service-based vesting: Unvested at January 1, 2021 596,401 $ 3.18 Granted (1) 647,512 $ 6.63 Forfeited (1,957) $ 7.92 Vested (362,706) $ 3.65 Unvested at December 31, 2021 879,250 $ 5.51 Granted (1) 2,878,948 $ 6.14 Forfeited (353,196) $ 6.04 Vested (822,602) $ 5.44 Unvested at December 31, 2022 2,582,400 $ 5.70 Granted (1) 641,578 $ 3.81 Forfeited (226,100) $ 5.44 Vested (1,028,782) $ 5.60 Unvested at December 31, 2023 1,969,096 $ 5.68 Performance-based vesting: Unvested at January 1, 2021 139,598 $ 2.56 Granted (2) 64,475 $ 6.90 Vested (104,620) $ 7.24 Unvested at December 31, 2021 99,453 $ 4.46 Granted (2) 64,366 $ 5.00 Vested (64,366) $ 6.90 Unvested at December 31, 2022 99,453 $ 3.24 Granted 345,000 $ 5.31 Forfeited (37,500) $ 5.31 Vested (116,958) $ 5.12 Unvested at December 31, 2023 289,995 $ 5.31 (1) Includes 143,605 shares with an estimated fair value of $0.5 million, 228,347 shares with an estimated fair value of $1.1 million and 55,689 shares with an estimated fair value of $0.5 million issued to non-employees in December 31, 2023, 2022 and 2021, respectively. (2) Includes only the portions of grants for which the performance goals have been determined and communicated to the grant recipient. Any grants for which the required performance goals have not been determined and communicated to the grant recipient are not considered to have been granted for accounting purposes. As of December 31, 2023, there was $9.6 million and $1.2 million of unrecognized compensation costs for equity-classified service-based RSUs and performance-based RSUs, respectively, which are expected to be recognized over a remaining weighted-average period of 2.0 years and 2.0 years, respectively. The total fair value of RSUs and PSUs that vested in 2023, 2022, and 2021 was $1.3 million, $0.9 million and $3.2 million, respectively. Employee Stock Purchase Plan On April 16, 2021, the 2021 Stock Purchase Plan was authorized by the Company's Board of Directors. The maximum number of shares available for purchase under the 2021 Stock Purchase Plan is 200,000 shares. The shares issued under the 2021 Stock Purchase Plan may be authorized but unissued or reacquired shares of Common Stock. All employees of the Company who work more than 20 hours per week and have been employed by the Company for at least 30 days may participate in the 2021 Stock Purchase Plan. Under the 2021 Stock Purchase Plan, participants are offered, on the first day of the offering period, the option to purchase shares of Common Stock at a discount on the last day of the offering period. The offering period shall be for a period of three months, and the first offering period began during the first quarter of 2022. The 2021 Stock Purchase Plan provides eligible employees the opportunity to purchase shares of the Company's Common Stock on a quarterly basis through payroll deductions at a price equal to 95% of the lesser of the fair value on the first and last trading day of each quarter. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2023 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The Company sponsors a 401(k) defined contribution savings plan that covers substantially all of its eligible employees. Under the plan, the Company contributes safe-harbor matching contributions to eligible plan participants on an annual basis. The Company may also contribute additional discretionary amounts to plan participants. The Company's contributions to the plan were $2.0 million, $1.7 million and $1.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. The Company offers a comprehensive medical benefit plan to eligible employees. All obligations under the plan are fully insured through third-party insurance companies. Employees participating in the medical plan pay a portion of the costs for the insurance benefits. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Minimum Annual Commitments with Third-party Processors The Company has multi-year agreements with third parties to provide certain payment processing services to the Company. The Company pays processing fees under these agreements that are based on the volume and dollar amounts of processed payment transactions. Some of these agreements have minimum annual requirements for processing volumes. Based on existing contracts in place at December 31, 2023, the Company is committed to pay minimum processing fees under these agreements of approximately $21.6 million in 2024 and $21.6 million in 2025. Annual Commitment with Vendor Effective January 1, 2022, the Company entered into a three-year business cooperation agreement with a vendor to resell its services. Under the agreement, the Company purchased vendor services worth $1.5 million for the year ended December 31, 2023, and is committed to purchase vendor services worth $2.3 million in 2024. The Company committed to capital contributions to fund the operations of certain subsidiaries totaling $26.0 million and $22.0 million as of December 31, 2023 and 2022, respectively. The Company is obligated to make the contributions within 10 business days of receiving notice for such contribution from the subsidiary. As of December 31, 2023 and 2022, the Company contributed $11.8 million and $6.9 million, respectively. Merchant Reserves See Note 4. Settlement Assets and Customer/Subscriber Account Balances and Related Obligations , for information about merchant reserves. Contingent Consideration The following table provides a reconciliation of the beginning and ending balance of the Company's contingent consideration liabilities related to completed acquisitions: (in thousands) Contingent Consideration Liabilities January 1, 2022 $ 10,686 Accretion of contingent consideration 864 Fair value adjustments due to changes in estimates of future payments 1,195 Payment of contingent consideration (4,666) December 31, 2022 $ 8,079 Addition of contingent consideration (related to asset acquisition) 263 Addition of contingent consideration due to resolution of contingency 7,000 Addition of contingent consideration (related to business combination) 8,419 Accretion of contingent consideration 1,658 Fair value adjustments due to changes in estimates of future payments (19) Payment of contingent consideration (9,909) Adjustment for receivable due to residual shortfall (2,053) December 31, 2023 $ 13,438 Legal Proceedings The Company is involved in certain legal proceedings and claims which arise in the ordinary course of business. In the opinion of the Company and based on consultations with inside and outside counsel, the results of any of these matters, individually and in the aggregate, are not expected to have a material effect on the Company's results of operations, financial condition or cash flows. As more information becomes available, and the Company determines that an unfavorable outcome is probable on a claim and that the amount of probable loss that the Company will incur on that claim is reasonably estimable, the Company will record an accrued expense for the claim in question. If and when the Company records such an accrual, it could be material and could adversely impact the Company's results of operations, financial condition and cash flows. The Company is involved in a case that was filed on October 11, 2023 and is currently pending in the United States District Court for the Northern District of California (the “Complaint”). The Complaint is a putative class action against The Credit Wholesale Company, Inc. (“Wholesale”), Priority Technology Holdings, Inc., Priority Payment Systems (“PPS”), LLC and Wells Fargo Bank, N.A. (“Wells Fargo”). The Complaint alleges that Wholesale is an agent of Priority, PPS and Wells Fargo and that it made non-consensual recordation of telephonic communications with California businesses in violation of California Invasion of Privacy Act (the “Act”). T he Complaint seeks to certify a class of affected businesses and an award of $5,000 per violation of the Act. As of March 12, 2024, the financial impact, if any, of the outcome of this legal proceeding is neither probable nor estimable. Concentration of Risks The Company's revenue is substantially derived from processing Visa and Mastercard bankcard transactions. Because the Company is not a member bank, to process these bankcard transactions, the Company maintains sponsorship agreements with member banks which require, among other things, that the Company abide by the by-laws and regulations of the card association. A majority of the Company's cash and restricted cash is held in certain FIs, substantially all of which is in excess of federal deposit insurance corporation limits. The Company does not believe it is exposed to any significant credit risk from these transactions. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Fair Value Measurements The Company's contingent consideration derived from business combinations are classified within Level 3 of the fair value hierarchy due to the uncertainty of the fair value measurement created by the absence of quoted market prices, the inherent lack of liquidity and unobservable inputs used to measure fair value which require judgement. The Company uses valuation techniques including discounted cash flow analysis based on cash flow projections and Monte Carlo simulations to estimate fair value based on projection period and assumed growth rates. A change in inputs in the valuation techniques used might result in a significantly higher or lower fair value measurement than what is reported. The current portion of contingent consideration is included in accounts payable and accrued expenses on the Company's Consolidated Balance Sheets and the noncurrent portion of contingent consideration is included in other noncurrent liabilities on the Company's Consolidated Balance Sheets. Contingent consideration liabilities related to certain of the Company's acquisitions are uncertain due to the utilization of unobservable inputs and management's judgement in determining the likelihood of achieving the earn-out criteria or the years ended December 31, 2023 and 2022. These liabilities measured at fair value on a recurring basis consisted of the following: Years Ended December 31, (in thousands) Fair Value Hierarchy 2023 2022 Contingent consideration, current portion Level 3 $ 5,951 $ 6,079 Contingent consideration, noncurrent portion Level 3 7,487 2,000 Total contingent consideration $ 13,438 $ 8,079 During the year ended December 31, 2023, there were no transfers into, out of, or between levels of the fair value hierarchy. Fair Value Disclosures Notes Receivable Notes receivable are carried at amortized cost. Substantially all of the Company's notes receivable are secured, and the Company provides for allowances when it believes that certain notes receivable may not be collectible. The carrying value of the Company's notes receivable, net approximates fair value was approximately $5.2 million and $4.7 million at December 31, 2023 and December 31, 2022, respectively. On the fair value hierarchy, Level 3 inputs are used to estimate the fair value of these notes receivable. Debt Obligations Outstanding debt obligations (see Note 10. Debt Obligations ) are reflected in the Company's Consolidated Balance Sheets at carrying value since the Company did not elect to remeasure debt obligations to fair value at the end of each reporting period. The fair value of the term loan facility was estimated to be approximately $651.9 million and $606.1 million at December 31, 2023 and 2022, respectively, and was estimated using binding and non-binding quoted market prices in an active secondary market, which considers the credit risk and market related conditions, and is within Level 2 of the fair value hierarchy. The carrying values of the other long-term debt obligations approximate fair value due to mechanisms in the credit agreements that adjust the applicable interest rates and the lack of a market for these debt obligations. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company's three reportable segments included SMB Payments, B2B Payments and Enterprise Payments. The Company does not have dedicated assets assigned to any particular reportable segment and such information is not available and continues to be aggregated. More information about our three reportable segments: • SMB Payments : Provides full-service acquiring and payment-enabled solutions for B2C transactions, leveraging Priority's proprietary software platform, distributed through ISO, direct sales and vertically focused ISV channels in addition. • B2B Payments : Provides market-leading AP automation solutions to corporations, software partners and industry leading FIs (including Citibank and Mastercard) in addition to working improving cash flow by providing instant access to working capital. • Enterprise Payments : Provides embedded finance and treasury solutions to enterprise customers to modernize legacy platforms and accelerate software partners' strategies to monetize payments. Corporate includes costs of corporate functions and shared services not allocated to our reportable segments. Information on reportable segments and reconciliations to consolidated revenues, consolidated depreciation and amortization, and consolidated operating income are as follows: (in thousands) Years Ended December 31, 2023 2022 2021 Revenues: SMB Payments $ 582,870 $ 562,237 $ 475,630 B2B Payments 40,726 18,890 17,138 Enterprise Payments 132,016 82,514 22,133 Consolidated revenues $ 755,612 $ 663,641 $ 514,901 Depreciation and amortization: SMB Payments $ 41,036 $ 43,925 $ 41,144 B2B Payments 2,221 744 294 Enterprise Payments 23,753 24,892 7,158 Corporate 1,385 1,120 1,101 Consolidated depreciation and amortization $ 68,395 $ 70,681 $ 49,697 Operating income: SMB Payments $ 46,482 $ 54,866 $ 52,884 B2B Payments (2,535) 208 135 Enterprise Payments 73,964 30,937 6,763 Corporate (36,387) (29,846) (26,689) Consolidated operating income $ 81,524 $ 56,165 $ 33,093 A reconciliation of total operating income of reportable segments to the Company's net (loss) income is provided in the following table: (in thousands) Years Ended December 31, 2023 2022 2021 Total operating income of reportable segments $ 117,911 $ 86,011 $ 59,782 Corporate (36,387) (29,846) (26,689) Interest expense (76,108) (53,554) (36,485) Debt modification and extinguishment costs — — (8,322) Gain on sale of business — — 7,643 Other income, net 1,736 589 202 Income tax (expense) benefit (8,463) (5,350) 5,258 Net (loss) income $ (1,311) $ (2,150) $ 1,389 |
(Loss) Earnings per Common Shar
(Loss) Earnings per Common Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
(Loss) Earnings per Common Share | (Loss) Earnings per Common Share The following tables set forth the computation of the Company's basic and diluted earnings (loss) per common share: (in thousands except per share amounts) Years Ended December 31, 2023 2022 2021 Numerator: Net (loss) income $ (1,311) $ (2,150) 1,389 Less: Dividends and accretion attributable to redeemable senior preferred stockholders (47,744) (36,880) (18,009) Less: NCI preferred unit redemptions — — (8,021) Net loss attributable to common stockholders $ (49,055) $ (39,030) $ (24,641) Denominator: Basic: Weighted-average common shares outstanding (1) 78,333 78,233 71,902 Basic (loss) earnings per common share $ (0.63) $ (0.50) $ (0.34) Diluted: Weighted-average common shares outstanding (1) 78,333 78,233 71,902 Diluted weighted-average common shares outstanding 78,333 78,233 71,902 Diluted (loss) earnings per common share $ (0.63) $ (0.50) $ (0.34) (1) The weighted-average common shares outstanding includes 1,803,841 warrants issued in the second quarter of 2021 (refer to Note 11, Redeemable Senior Preferred Stock and Warrants ) . Potentially anti-dilutive securities that were excluded from (loss) earnings per common share that could potentially be dilutive in future periods are as follows: Common Stock Equivalents at December 31, (in thousands) 2023 2022 2021 Outstanding warrants on common stock (1) — 3,556 3,556 Outstanding options and warrants issued to adviser (2) — 600 600 Restricted stock awards (3) 1,180 2,440 442 Liability-classified restricted stock units — — 129 Outstanding stock option awards (3) 900 1,098 1,313 Total 2,080 7,694 6,040 (1) The warrants were exercisable at $11.50 per share and expired on August 24, 2023. Refer to Note 13. Stockholders' Deficit . (2) The warrants and options were exercisable at $12.00 per share and expired on August 24, 2023. Refer Note 13. Stockholders' Deficit . (3) Granted under the 2018 Plan. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In February 2019, PHOT, a subsidiary of the Company, received contributions of certain assets from its Chairman and CEO and issued redeemable preferred units as consideration. Part of these preferred units were later assigned to other related parties. In May 2021, the Company entered into an exchange agreement wherein these preferred units were exchanged for 1,428,358 equity shares and $814,219 in cash. On October 31, 2023, a lawsuit was filed alleging that the Board breached its fiduciary duties by approving the transaction. The Company denied any wrongdoing. The lawsuit was settled on January 30, 2024, wherein the Company agreed to unwind the exchange transaction and pay $0.4 million to settle all claims. The unwinding of this transaction does not meet the recognition criteria as of December 31, 2023, and therefore considered as non-recognized subsequent event. |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 12 Months Ended |
Dec. 31, 2023 shares | Dec. 31, 2023 shares | |
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | Rule 10b5-1 Director and Officer Trading Arrangements On June 16, 2023, Sean Kiewiet, an officer of the Company as defined in Section 16 of the Exchange Act, adopted a Rule 10b5-1 trading arrangement as defined in Item 408(a) of Regulation S-K. Officer or Director Name and Title Action Plan Type Date Number of Shares to be sold Expiration Sean Kiewiet, Chief Strategy Officer Adopted Rule 10b5-1 June 16, 2023 620,000 December 31, 2024 | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Sean Kiewiet [Member] | ||
Trading Arrangements, by Individual | ||
Name | Sean Kiewiet | |
Title | Chief Strategy Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | June 16, 2023 | |
Arrangement Duration | 564 days | |
Aggregate Available | 620,000 | 620,000 |
Nature of Business and Signif_2
Nature of Business and Significant Accounting Policies - (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Segments | The Company provides its services through three reportable segments: 1) SMB Payments; 2) B2B Payments; and 3) Enterprise Payments. |
Basis of Presentation and Consolidation | The accompanying Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiaries. The Company generally utilizes the equity method of accounting when it has an ownership interest of between 20% and 50% in an entity, provided the Company is able to exercise significant influence over the investee's operations. All material intercompany balances and transactions have been eliminated in consolidation. Occasionally, the Company issues common equity and non-voting incentive units within its subsidiaries. The Company is the majority owner of these subsidiaries and, therefore, the common equity and incentive units are deemed to be NCI. NCI is valued based on the events and methodologies including the acquisition-date fair value or the option pricing method. See Note 2. Acquisitions for further information related to the fair value of the common equity issued during 2023. To estimate the initial fair value of the incentive units, the Company utilizes future cash flow scenarios with focus on those cash flow scenarios which could result in future distributions to the NCIs. In subsequent periods, income or loss will be attributed to an NCI based on the hypothetical liquidation at book value method utilizing the terms of the operating agreement between the Company and the NCI. As the majority owner, the Company has call rights on the incentive units issued to the NCIs. These call rights can only be executed under certain circumstances and execution is always optional at the Company's discretion. The call rights do not meet the definition of a free-standing financial instrument or derivative; thus no separate accounting is required for these call rights. |
Noncontrolling Interest | NCI represents the equity interest not owned by the Company and are recorded for consolidated entities in which the Company owns less than 100% of the interests. Changes in the Company's ownership interest while the Company retains its controlling interest are accounted for as equity transactions, and upon loss of control, retained ownership interests are remeasured at fair value, with any gain or loss recognized in earnings. For 2023, there was no income or loss attributable to NCI in accordance with the applicable operating agreements. The results for the year ended December 31, 2023, include the post-acquisition results of the Plastiq business which was acquired through Chapter 11 bankruptcy process on July 31, 2023. |
Use of Estimates | The preparation of Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reported period. Actual results could materially differ from those estimates. |
Revenue Recognition, Cost of Services, and Contracts with Customers and Contract Costs | The Company applies the five-step model to assess its contracts with customers. At contract inception, the Company assesses the services and goods promised in its contracts with customers and identifies the performance obligation for each promise to transfer a distinct good or service to the customer. The Company recognizes revenue when it satisfies a performance obligation by transferring a service or good to the customer in an amount to which the Company expects to be entitled (i.e., transaction price) allocated to the distinct services or goods. The Company has elected the permitted practical expedient that allows it to use the portfolio approach for many of its contracts since this approach's impact on the financial statements, when applied to a group of contracts (or performance obligations) with similar characteristics, is not materially different from the impact of applying the revenue standard on an individual contract basis. Under the portfolio practical expedient, collectability is still assessed at the individual contract level when determining if a contract exists. The Company has elected to exclude any contracts with an original duration of one year or less and any variable consideration that meets specified criteria from its disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance. In delivering payment services to the customer, the Company may also provide a limited license agreement to the customer for the use of one or more of the Company's proprietary cloud-based software applications. The Company grants a right to use its software applications only when the customer has contracted with the Company to receive related payment services. When combined with the underlying payment services, the license and the payment services provided to the customer are a single stand-ready obligation and the Company's performance obligation is defined by each time increment, rather than by the underlying activities, (quantity and timing of which is not determinable), satisfied over time based on days elapsed. In order to provide our payment services, we obtain authorization for the transaction and request funds settlement from the card issuing financial institution through the payment network. When third parties are involved in the transfer of services or goods to the customer, the Company considers the nature of each specific promised service or good and applies judgment to determine whether the Company controls the service or good before it is transferred to the customer or whether the Company is acting as an agent of the third party. To determine whether the Company controls the service or good, it assesses indicators including: 1) which party is primarily responsible for fulfillment; 2) which party has discretion in determining pricing for the service or good; and 3) other considerations deemed to be applicable to the specific situation. Based on our assessment of these indicators, we have concluded that the promise to our customers to provide payment services is distinct from the services provided by the card issuing FIs and payment networks in connection with payment transactions. We do not have the ability to direct the use of and obtain substantially all of the benefits of the services provided by the card issuing FIs and payment networks before those services are transferred to our customer, and on that basis, we do not control those services prior to being transferred to our customer. As a result, we present our revenues net of the interchange fees retained by the card issuing FIs and the fees charged by the payment networks. SMB Payments – The Company's SMB Payments segment enables the Company's customers to accept card, electronic and digital-based payments at the point of sale by providing a suite of services including authorization, settlement and funding, customer support and help-desk functions, chargeback resolution, payment security, consolidated billing and statements, and online reporting. Additionally, the Company enables customers to accept card, electronic and digital-based payments at the point of sale by providing a suite of services. The Company also earns revenue and commissions from resale of electronic POS equipment and certain subscription coupons. Typically, revenues generated from these transactions are based on a variable percentage of the dollar amount of each transaction, and in some instances, additional fees (e.g., statement fees, annual fees and monthly minimum fees, fees for handling chargebacks, gateway fees and fees for other miscellaneous services) are charged for each transaction. The Company's sponsoring banks collect the gross merchant discount from the card holder's issuing bank, pay the interchange fees and assessments to the payment networks and credit card associations, retain their fees, and pay to the Company the net amount which represents the Company's revenue. B2B Payments – The Company's B2B Payments segment enables the Company's customers to automate their accounts payable and other commercial payments functions with the Company's payment services that utilize physical and virtual payment cards as well as ACH transactions. The Company also provides cost-plus-fee turn-key business process outsourcing and assists commercial customers with programs that are designed to increase acceptance of Electronic Payments. Revenues are generally earned on a per-transaction basis and are recognized by the Company net of certain third-party costs for interchange fees, assessments to the payment networks, credit card associations fees, sponsor bank fees and rebates to customers. The Company's payables management software helps businesses improve cash flow with instant access to working capital, while automating and enabling control over all aspects of accounts receivable and payable. For these transactions, the Company acts as a merchant of record, therefore, considered as the principal and accordingly presents its revenue on a gross basis. The Company also offers volume rebates as an incentive to increase business and customer engagement. These rebates are presented as net of revenue. Transaction processing costs, including interchange fees, are presented as costs of revenue. Enterprise Payments – The Company's Enterprise Payments segment uses payment-adjacent technologies to facilitate the acceptance of Electronic Payments from customers. Revenue from the Enterprise Payments segment consists of the following: • Enrollment fees : The revenue associated with enrollment fees is recognized upon the receipt of a fully executed enrollment application, completion of the customer account setup, data verification and the constructive receipt of the applicable non-refundable fee. • Subscription fees : The Company recognizes monthly subscription fees as recurring maintenance fees each month during the term of the client's enrollment. Revenue from transaction-based fees is recognized upon constructive receipt of transaction fees for payments to creditors issued via ACH payments, paper checks or wire transfers. These fees are transferred to the Company from the customer account balances, which may be maintained by the Company in money transmission license trust accounts or by partner banks. • Interest revenue : Interest revenue is derived from certain customer balances maintained in interest bearing accounts with select partner banks. • CRM and consulting fees : CRM license fees are recognized on a monthly basis and consulting fees are recognized when services are performed. A substantial portion of this segment's revenues are earned as an agent of a third party, and therefore this earned revenue is reported as a net amount within revenue. See Note 3. Revenues . Transaction Price Allocated to Future Performance Obligations ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations. However, as allowed by ASC 606, the Company has elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. As described above, the Company's most significant performance obligations consist of variable consideration under a stand-ready series of distinct days of service. Such variable consideration meets the specified criteria for the disclosure exclusion. Therefore, the majority of the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied is variable consideration that is not required for this disclosure. The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material. Cost of Services Costs of merchant card fees primarily consist of residual payments to agents and ISOs and other third-party costs directly attributable to payment processing. The residual payments represent commissions paid to agents and ISOs based upon a percentage of the net revenues generated from merchant transactions. Costs of outsourced services and other revenue consist of salaries directly related to outsourced services revenue, the cost of equipment (point of sale terminals) sold, and third-party fees and commissions related to the Company's ACH processing activities. Contracts with Customers and Contract Costs The Company accrues and pays commission expense based on variable merchant payment volumes and for certain customer service and other services provided by its ISOs. Since commission expenses are accrued and paid to ISOs on a monthly basis after the merchant enters into a new or renewed contract, these are not deemed to be a cost to acquire a new contract but they are reported within costs of services on our Consolidated Statements of Operations and Comprehensive Loss. The ISO is typically an independent contractor or agent of the Company. The Company may occasionally elect to buy out all or a portion of an ISO's rights to receive future commission payments related to certain merchants. Amounts paid to the ISO for these residual buyouts are capitalized and amortized over the useful life on a straight-line basis under the accounting guidance for intangible assets and included in intangible assets, net on our Consolidated Balance Sheets. The Company pays bonuses to certain ISOs for meeting established performance criteria which results in a continued benefit to the Company for future periods. The incremental costs are incurred to secure a future stream of revenue and are recorded as contract acquisitions costs and are amortized over the estimated time on which benefit is expected to be received. A contract with a customer creates a legal right and obligation. As the Company performs under customer contracts, its right to consideration that is unconditional is considered to be accounts receivable. If the Company's right to consideration for such performance is contingent upon a future event or satisfaction of additional performance obligations, the amount of revenues recognized in excess of the amount billed to the customer is recognized as a contract asset. Contract liabilities represent consideration received from customers in excess of revenues recognized. Material contract assets and liabilities are presented net at the individual contract level in the Consolidated Balance Sheets and are classified as current or noncurrent based on the nature of the underlying contractual rights and obligations. The Company may receive cash payments from certain customers and vendors that require future performance obligations by the Company. Amounts associated with obligations expected to be satisfied within one year are reported in customer deposits and advance payments on the Company's Consolidated Balance Sheets and amounts associated with obligations expected to be satisfied after one year are reported as a component of other noncurrent liabilities on the Company's Consolidated Balance Sheets. These payments are subsequently recognized in the Company's Consolidated Statements of Operations and Comprehensive Loss when the Company satisfies the performance obligations required to retain and earn these deposits and advance payments. A vendor may make an upfront payment to the Company to offset costs that the Company incurs to integrate the vendor into the Company's operations. These upfront payments are deferred by the Company and are subsequently amortized against expense in its Consolidated Statements of Operations and Comprehensive Loss as the related costs are incurred by the Company in accordance with the agreement with the vendor. |
Cash and Cash Equivalents and Restricted Cash | Cash and cash equivalents includes highly liquid instruments with an original maturity of three months or less, and cash owned by the Company that is held in financial institutions. Restricted cash is held by the Company in financial institutions for the purpose of in-process customer settlements or reserves held per contact terms. |
Accounts Receivable, net | Accounts receivable is stated net of allowance for current period credit losses for any uncollectible amounts and are amounts primarily due from the Company's sponsor banks for revenues earned, net of related interchange and processing fees, and do not bear interest. Other types of accounts receivable are from agents, merchants and other customers. Amounts due from sponsor banks are typically paid within 30 days following the end of each month. Inventory Inventory consists primarily of POS terminals and certain subscription coupons which is carried at the lower of cost or net realizable value. Cost is equal to the purchase price and other expenses incurred with acquiring the inventory and is substantially valued using the weighted average cost method. The carrying amount is reduced when items are determined to be obsolete/expired. Notes Receivable |
Allowance for Expected Losses | The Company utilizes a combination of aging and loss-rate methodologies to develop an estimate of current expected credit losses based on the nature and risks associated with the underlying asset pool. A broad range of factors are considered during the estimation of the allowance including historical losses, adjustments for current conditions and future trends. The Company may also utilize a mix of qualitative and quantitative risk factors within its estimation.The Company has elected not to measure expected losses for accrued interest on notes receivable but instead recognize losses for accrued interest within the period losses are incurred. |
Property and Equipment | Property and equipment are stated at cost, except for property and equipment acquired in a business combination, which is recorded at fair value at the time of the transaction. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Expenditures for repairs and maintenance which do not extend the useful life of the respective assets are charged to expense as incurred. Expenditures that increase the value or productive capacity of assets are capitalized. At the time of retirements, sales or other dispositions of property and equipment, the original cost and related accumulated depreciation are removed from the respective accounts and the gains or losses are presented as a component of income or loss from operations. Property, equipment and software Estimated Useful Life Furniture and fixtures 5 - 10 years Equipment 3 - 8 years Computer software 2 - 5 years Leasehold improvements 3 - 10 years See Note 6. Property, Equipment and Software . Costs Incurred to Develop Software for Internal Use Costs incurred to develop or obtain internal-use software and implementation costs are accounted for in accordance with ASC 350-40, Internal-Use Software . The Company uses an agile development methodology in which feature-by-feature updates are made to its software. The costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs incurred to develop internal-use software are capitalized and amortized using the straight-line method over the estimated useful life of the software, which generally range from two Software development costs may become impaired in situations where development efforts are abandoned due to the viability of the planned project becoming doubtful or due to technological obsolescence of the planned software product. For the year ended December 31, 2023, there was accelerated depreciation for internal-use software of $0.3 million from certain restructuring costs. There were no impairment charges associated with internal-use software for the years ended December 31, 2022 and 2021. For the years ended December 31, 2023, 2022 and 2021, the Company capitalized software development costs of $21.3 million, $16.8 million and $7.8 million, respectively. As of December 31, 2023 and 2022, capitalized software development costs, net of accumulated amortization, totaled $40.6 million and $28.1 million, respectively, and are included in property, equipment and software, net on the Consolidated Balance Sheets. Amortization expense for capitalized software development costs for the years ended December 31, 2023, 2022 and 2021 was $9.4 million, $6.9 million and $5.9 million, respectively, and are included in depreciation and amortization on the Consolidated Statements of Operations and Comprehensive Loss. |
Other Intangible Assets | Other intangible assets are initially recorded at cost or fair value when acquired in connection with a business combination. The carrying value of an intangible asset acquired in an asset acquisition may subsequently be increased for contingent consideration when due to the seller and such amounts can be estimated. The portion of any unpaid purchase price that is contingent on future activities is not initially recorded by the Company on the date of acquisition. Rather, the Company recognizes contingent consideration when it becomes probable and estimable. All of the Company's intangible assets, except goodwill and money transmission licenses, have finite lives and are subject to amortization. Intangible assets consist of acquired merchant portfolios, customer relationships, ISO and referral partner relationships, residual buyouts, trade names, technology, non-compete agreements and money transmission licenses. Intangible Asset Nature Estimated Useful Life ISO and Referral Partner Relationships Acquired relationships with ISOs and referral partners 11 – 25 years Residual Buyouts Surrender of rights to receive commissions by ISOs 3 – 9 years Customer Relationships Acquired customer relationships 2 – 10 years Merchant Portfolios Acquired rights to a portfolio of merchants 5 – 10 years Technology Acquired proprietary software and website domains 6 – 10 years Trade Names and Non-compete Agreements Acquired trade names and non-compete agreements 3 – 10 years Money Transmission Licenses Acquired licenses to collect, store, lend and send money in 46 U.S. states, the District of Columbia and two U.S. territories. indefinite |
Impairment of Long-lived Assets | The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. For long-lived assets, except goodwill, an impairment loss is indicated when the undiscounted future cash flows estimated to be generated by the asset group are not sufficient to recover the carrying value of the asset group. If indicated, the loss is measured as the excess of carrying value over the asset groups' fair value, as determined based on discounted future cash flows. The Company concluded there were no indications of impairment for the years ended December 31, 2023, 2022 and 2021. |
Goodwill | The Company tests goodwill for impairment on an annual basis, or when events occur or circumstances indicate the fair value of a reporting unit is below its carrying value. The test for goodwill impairment may be a qualitative or a quantitative analysis depending on the facts and circumstances associated with the reporting unit. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that implied fair value of the goodwill within the reporting unit is less than its carrying value. |
Leases | The Company evaluates lease and service arrangements at lease inception to determine if the arrangement is a lease or contains a lease. Lease arrangements are evaluated at their commencement date to determine classification as operating or finance. Operating leases are reported as part of other noncurrent assets, accounts payable and accrued expenses and other noncurrent liabilities on the Company's Consolidated Balance Sheets. Finance leases, if applicable, are reported as part of property, equipment and software, net, and debt on the Company's Consolidated Balance Sheets. Leases with a term of twelve months or less are generally not included on the Company's Balance Sheets. The Company does not separate lease and non-lease components. Certain estimates and assumptions are made when determining the value of ROU Assets and the related liabilities, including when establishing the lease term and discount rates and variable lease payments (e.g., rent escalations tied to changes in the Producer Price Index). The lease term for all of the Company's leases includes the non-cancelable period of the lease adjusted for any renewal or termination options the Company is reasonably certain to exercise. The lease payment stream includes any rent escalation that is required under certain lease agreements. The Company's leases generally do not provide an implicit rate of interest, nor is it readily determinable by the Company, and as such the Company uses its incremental borrowing rate in determining the discounted value of the lease payments. Lease expense and depreciation expense, if applicable, are recognized on a straight-line basis over the term of the lease. Settlement Assets and Customer/Subscriber Account Balances and Related Obligations |
Settlement Assets and Customer/Subscriber Account Balances and Related Obligations | Settlement assets and customer/subscriber account balances and the related obligations recognized on the Company's Consolidated Balance Sheets represent intermediary balances arising in the Company's settlement process for merchants and other customers. |
Debt Issuance and Modification Costs | Eligible debt issuance costs associated with the Company's credit facilities are deferred and amortized to interest expense over the term of the related debt using the effective interest method. Debt issuance costs associated with Company's term debt are presented on the Company's Consolidated Balance Sheets as a direct reduction in the carrying value of the associated debt liability. Debt modification costs represent amounts paid to third parties to modify existing debt agreements when those amounts are not eligible for capitalization. See Note 10. Debt Obligations for amounts paid for the year ended December 31, 2023, which were not eligible for capitalization. |
Acquisitions | The Company uses the acquisition method of accounting for business combinations which requires assets acquired and liabilities assumed to be recognized at their fair values on the acquisition date. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. The fair values of the assets acquired and liabilities assumed are determined based upon the valuation of the acquired business and involves making significant estimates and assumptions based on facts and circumstances that existed as of the acquisition date. The Company uses a measurement period following the acquisition date to gather information that existed as of the acquisition date that is needed to determine the fair value of the assets acquired and liabilities assumed. The measurement period ends once all information is obtained, but no later than one year from the acquisition date. The Company accounts 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. Contingent Consideration Contingent consideration related to the Company's business combinations are estimated based on the present value of a weighted payout probability at the measurement date using a Monte Carlo simulation model. This valuation falls within Level 3 on the fair value hierarchy. The current portion of contingent consideration is included in accounts payable and accrued expenses on the Company's Consolidated Balance Sheets and the noncurrent portion of contingent consideration is included in other noncurrent liabilities on the Company's Consolidated Balance Sheets. |
Accrued Residual Commissions | Accrued residual commissions consist of amounts due to ISOs and independent sales agents based on a percentage of the net revenues generated from the Company's merchant customers referred by the respective ISO and independent sales agent. Percentages vary based on the program type and transaction volume of each merchant. |
ISO Deposits and Loss Reserves | ISOs may partner with the Company in an exclusive partner program in which ISOs are given negotiated pricing in exchange for bearing the risk of loss. Through the arrangement, the Company accepts deposits on behalf of the ISO and a reserve account is established by the Company. All amounts maintained by the Company are included in the accompanying Consolidated Balance Sheets as other liabilities, which are directly offset by restricted cash accounts owned by the Compan |
Stock-based Compensation | The Company recognizes the cost resulting from all stock-based payment transactions in the financial statements at grant date fair value. Stock-based compensation expense is recognized over the requisite service period and is reflected in salary and employee benefits expense on the Company's Consolidated Statements of Operations and Comprehensive Loss. Awards generally vest over three The Company measures a liability award under a stock-based compensation payment arrangement based on the award's fair value remeasured at each reporting date until the date of settlement. Compensation cost for each period until settlement is based on the change (or a portion of the change, depending on the percentage of the requisite service that has been rendered at the reporting date) in the fair value of the instrument for each reporting period. Stock Options Under the Company's 2018 Plan, the Company determines the fair value of stock options using the Black-Scholes option pricing model, which requires the use of the following subjective assumptions: Expected volatility – Measure of the amount by which a stock price has fluctuated or is expected to fluctuate. In 2018, when the Company's outstanding stock options were granted, there was a relatively short amount of time that the Company's Common Stock (Nasdaq: PRTH) were traded on a public market, the Company utilized volatility data for the Common Stock of a peer group of comparable public companies. An increase in the expected volatility would increase the fair value of the stock option and related compensation expense. Risk-free interest rate – U.S. Treasury rate for a stripped-principal treasury note as of the grant date having a term equal to the expected term of the stock option. An increase in the risk-free interest rate will increase the fair value of the stock option and related compensation expense. Expected term – Period of time over which the stock options granted are expected to remain outstanding. In 2018, when the Company's outstanding stock options were granted, the Company lacked sufficient exercise information for its stock option plan since it was a newly public company. Accordingly, the Company used a method permitted by the SEC whereby the expected term was estimated to be the mid-point between the vesting dates and the expiration dates of the stock option grants. An increase in the expected term will increase the fair value of the stock option and the related compensation expense. Dividend yield – The Company uses an amount of zero as the Company has paid no cash or stock dividends and does not anticipate doing so in the foreseeable future. An increase in the dividend yield will decrease the fair value of the stock option and the related compensation expenses. If a participant terminates employment with the Company, vested options may be exercised for a short period of time while unvested options are forfeited. However, in any event, a stock option will expire ten years from the date of the grant. Time-based restricted stock awards The fair value of time-based restricted stock awards is determined based on the quoted closing price of the Company's Common Stock on the business day prior to the grant date and is recognized as compensation expense over the vesting term of the awards. Performance-based restricted stock awards The Company accounts for its performance-based restricted stock awards based on the quoted closing price of the Company's Common Stock on the business day prior to the grant date, adjusted for any market-based vesting criteria, and records stock-based compensation expense over the vesting term of the awards based on the probability that the performance criteria will be achieved. The performance goals may be work-related goals for the individual recipient and/or based on certain corporate performance goals. The Company reassesses the probability of vesting at each reporting period and prospectively adjusts stock-based compensation expense based on its probability assessment. Additionally, if performance goals are set or reset on an annual basis, compensation cost is recognized in any reporting period only for performance-based restricted stock awards in which the performance goals have been established and communicated to the award recipient. Non-voting Incentive Units The Company issued non-voting incentive units to certain employees and partners in six subsidiaries. These non-voting incentive units were determined to be equity and are accounted for under ASC 718 Stock Compensation. The non-voting incentive units are either fully vested when granted, or vest according to the service period and/or performance measure noted in the grant agreement. As the non-voting incentive units are vested, they are recognized as NCI to the Company, who is the majority owner of the subsidiaries. Employee Stock Purchase Program The 2021 Employee Stock Purchase plan authorizes the issuance of shares of the Company’s Common Stock pursuant to purchase rights granted to employees. The fair value of purchase rights issued under the Employee Stock purchase Plan is estimated using the Black-Scholes option pricing model. The model requires management to make a number of assumptions, including the fair value of the Company’s Common Stock, expected volatility, expected term, risk-free interest rate, and |
Repurchased Stock | Pursuant to the provisions of ASC 505-30, Treasury Stock , the Company has elected to apply the cost method when accounting for treasury stock resulting from the repurchase of its Common Stock. Under the cost method, the gross cost of the shares reacquired is charged to a contra equity account, treasury stock. The equity accounts that were originally credited for the original share issuance, Common Stock and additional paid-in capital, remain intact. See Note 13. Stockholders' Deficit . If the treasury shares are ever reissued in the future, proceeds in excess of repurchased cost will be credited to additional paid-in capital. Any deficiency will be charged to retained earnings (accumulated deficit), unless additional paid-in capital from previous treasury stock transactions exists, in which case the deficiency will be charged to that account, with any excess charged to retained earnings (accumulated deficit). If treasury stock is reissued in the future, a cost flow assumption (e.g., FIFO, LIFO or specific identification) will be adopted to compute excesses and deficiencies upon subsequent share reissuance. |
Earnings (Loss) per Share | Basic EPS is computed by dividing net income (loss) available to Common Stockholders by the weighted-average number of shares of Common Stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to the potential dilution, if any, that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock, using the more dilutive of the two-class method or if-converted method. Diluted EPS excludes potential shares of Common Stock if their effect is anti-dilutive. If there is a net loss in any period, basic and diluted EPS are computed in the same manner. |
Income Taxes | The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered or settled. Realization of deferred tax assets is dependent upon future taxable income. A valuation allowance is recognized if it is more likely than not that some portion or all of a deferred tax asset will not be realized based on the weight of available evidence, including expected future earnings. The Financial Accounting Standards Board, or FASB, Staff has provided additional guidance to address the accounting for the effects of the provisions related to the taxation of Global Intangible Low-Tax Income noting that companies should make an accounting policy election to recognize deferred taxes for temporary basis differences expected to reverse in future years or to include the tax expense in the year it is incurred. The Company has made a policy election to recognize such taxes as current period expenses when incurred. |
Fair Value Measurements | The Company measures certain assets and liabilities at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company uses a three-level fair value hierarchy to prioritize the inputs used to measure fair value and maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 – Quoted market prices in active markets for identical assets or liabilities as of the reporting date. Level 2 – Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 – Unobservable inputs that are not corroborated by market data. The fair values of the Company's merchant portfolios, assets and liabilities acquired in mergers and business combinations, and contingent consideration are primarily based on Level 3 inputs and are generally estimated based upon valuation techniques that include discounted cash flow analysis based on cash flow projections or Monte Carlo simulations and, for years beyond the projection period, estimates based on assumed growth rates. Assumptions are also made regarding appropriate discount rates, perpetual growth rates, and capital expenditures, among others. In certain circumstances, the discounted cash flow analysis or Monte Carlo simulation is corroborated by a market-based approach that utilizes comparable company public trading values and, where available, values observed in public market transactions. The carrying values of accounts and notes receivable, accounts payable and accrued expenses, long-term debt, restricted cash and cash and cash equivalents, including settlement assets and the associated deposit liabilities, approximate their fair values due to either the short-term nature of such instruments or the fact that the interest rate of the debt is based upon current market rates. See Note 17. Fair Value. Foreign Currency The Company's reporting currency is the U.S. dollar. The functional currency of the Indian subsidiary of the Company is Indian Rupee (i.e. local currency of Republic of India). The functional currency of the Canadian subsidiary of the Company is the Canadian Dollar. Accordingly, assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the current exchange rate on the last day of the reporting period. Revenues and expenses are translated using the average exchange rate in effect during the reporting period. Translation adjustments are reported as a component of accumulated other comprehensive income (loss). |
Concentration of Risk | A substantial portion of the Company's revenues and receivables are attributable to merchants. For the years ended December 31, 2023, 2022 and 2021, no individual merchant customer accounted for 10% or more of the Company's consolidated revenues. Most of the Company's merchant customers were referred to the Company by an ISO or other reseller partners. If the Company's agreement with an ISO allows the ISO to have merchant portability rights, the ISO can move the underlying merchant relationships to another merchant acquirer upon notice to the Company and completion of a "wind down" period. For the years ended December 31, 2023, 2022 and 2021, merchants referred by one ISO organization with merchant portability rights generated revenue within the Company's SMB Payments reportable segment that represented approximately 15%, 21% and 22%, respectively, of the Company's consolidated revenues. As of December 31, 2023, the Company's settlement assets and customer /subscriber account balances of $745.6 million includes cash and cash equivalents of $710.8 million related to customer account balances which are maintained in FDIC insured accounts with certain FIs. See Note 4. Settlement Assets and Customer/Subscriber Account Balances and Related Obligations . A majority of the Company's cash and restricted cash (including subscriber account balances) is held in certain FIs, substantially all of which is in excess of FDIC limits. On at least an annual basis, the Company reviews qualitative and quantitative factors including earnings (with emphasis on return on equity and net interest margin), capitalization (with emphasis on Tier 1 and Capital ratios), asset quality (emphasis on Net charge-offs ratios), and liquidity, evaluating the performance of these FIs with their peers. The Company may shift funds as a response to risks noted and to optimize returns and costs . The Company does not believe it is exposed to any significant credit risk from these transactions. |
Recently Adopted Accounting Standards and Recently Issued Accounting Standards Pending Adoption | Credit Losses In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). This new guidance changes how entities account for credit impairment for trade and other receivables, as well as for certain financial assets and other instruments. ASU 2016-13 replaces the current "incurred loss" model with an "expected loss" model. Under the "incurred loss" model, a loss (or allowance) is recognized only when an event has occurred (such as a payment delinquency) that causes the entity to believe that a loss is probable (i.e., that it has been "incurred"). Under the "expected loss" model, a loss (or allowance) is recognized upon initial recognition of the asset that reflects all future events that leads to a loss being realized, regardless of whether it is probable that the future event will occur. The Company adopted ASU 2016-13 effective January 1, 2023 using the modified-retrospective approach. The implementation of ASU 2016-13 did not have a material impact on the Company's Audited Consolidated Financial Statements. Additionally, the Company modified its accounting policy to conform with the requirements of the adoption of this standard. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the LIBOR and other interbank offered rates to alternative reference rates, such as the SOFR. An entity that makes this election would not have to remeasure the contract at the modification date or reassess a previous accounting determination. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), Scope ASU 2021-01, which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The Company adopted the optional expedients of Topic 848 on June 30, 2023 upon the amendments of its Credit Agreement (see Note 10. Debt Obligations ) and the Certificate of Designation (see Note 11. Redeemable Senior Preferred Stock and Warrants ), which transitioned the Company's reference rates from LIBOR to SOFR. The adoption of this standard did not have a material impact on the Company's Consolidated Financial Statements. Recently Issued Accounting Standards Pending Adoption Segment Reporting ASU 2023-07 In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires incremental reportable segment disclosures, primarily about significant segment expenses. The amendments also require entities with a single reportable segment to provide all disclosures required by these amendments, and all existing segment disclosures. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods after December 15, 2024. The Company will adopt this guidance for the year ended December 31, 2024. This guidance is expected to only impact the disclosures with no impact on the results of operations, financial position or cash flows. Income Taxes ASU 2023-09 In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures. The guidance includes improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid. This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is in the process of evaluating when it will adopt this guidance and the potential effects this guidance will have on its disclosures. |
Nature of Business and Signif_3
Nature of Business and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Property, Equipment and Software | Property, equipment and software Estimated Useful Life Furniture and fixtures 5 - 10 years Equipment 3 - 8 years Computer software 2 - 5 years Leasehold improvements 3 - 10 years A summary of property, equipment and software, net was as follows: (in thousands) December 31, 2023 December 31, 2022 Computer software $ 78,492 $ 64,197 Equipment 10,377 13,302 Leasehold improvements 1,535 6,990 Furniture and fixtures 1,442 2,909 Property, equipment and software 91,846 87,398 Less: Accumulated depreciation (56,442) (58,409) Capital work in-progress 9,276 5,698 Property, equipment and software, net $ 44,680 $ 34,687 Years Ended December 31, (in thousands) 2023 2022 2021 Depreciation expense $ 11,494 $ 9,511 $ 8,460 |
Schedule of Indefinite-Lived Intangible Assets | Intangible Asset Nature Estimated Useful Life ISO and Referral Partner Relationships Acquired relationships with ISOs and referral partners 11 – 25 years Residual Buyouts Surrender of rights to receive commissions by ISOs 3 – 9 years Customer Relationships Acquired customer relationships 2 – 10 years Merchant Portfolios Acquired rights to a portfolio of merchants 5 – 10 years Technology Acquired proprietary software and website domains 6 – 10 years Trade Names and Non-compete Agreements Acquired trade names and non-compete agreements 3 – 10 years Money Transmission Licenses Acquired licenses to collect, store, lend and send money in 46 U.S. states, the District of Columbia and two U.S. territories. indefinite |
Schedule of Other Intangible Assets | Intangible Asset Nature Estimated Useful Life ISO and Referral Partner Relationships Acquired relationships with ISOs and referral partners 11 – 25 years Residual Buyouts Surrender of rights to receive commissions by ISOs 3 – 9 years Customer Relationships Acquired customer relationships 2 – 10 years Merchant Portfolios Acquired rights to a portfolio of merchants 5 – 10 years Technology Acquired proprietary software and website domains 6 – 10 years Trade Names and Non-compete Agreements Acquired trade names and non-compete agreements 3 – 10 years Money Transmission Licenses Acquired licenses to collect, store, lend and send money in 46 U.S. states, the District of Columbia and two U.S. territories. indefinite At December 31, 2023 and 2022, other intangible assets consisted of the following: (in thousands, except weighted-average data) December 31, 2023 Weighted-average Gross Carrying Value Accumulated Amortization Net Carrying Value Other intangible assets: ISO and referral partner relationships $ 182,339 $ (36,506) $ 145,833 14.7 Residual buyouts 135,164 (92,699) 42,465 6.3 Customer relationships 109,017 (92,781) 16,236 8.4 Merchant portfolios 83,350 (56,139) 27,211 6.5 Technology 57,639 (22,712) 34,927 9.0 Non-compete agreements 3,390 (3,390) — 0.0 Trade names 7,104 (2,526) 4,578 11.7 Money transmission licenses (1) 2,100 — 2,100 Total gross carrying value $ 580,103 $ (306,753) $ 273,350 9.7 (1) These assets have an indefinite useful life. (in thousands, except weighted-average data) December 31, 2022 Weighted-average Gross Carrying Value Accumulated Amortization Net Carrying Value Other intangible assets: ISO relationships $ 175,300 $ (24,021) $ 151,279 14.8 Residual buyouts 132,325 (76,316) 56,009 6.6 Customer relationships 96,000 (83,298) 12,702 8.2 Merchant portfolios 76,423 (43,170) 33,253 6.7 Technology 50,963 (18,566) 32,397 8.4 Non-compete agreements 3,390 (3,390) — 0.0 Trade names 3,183 (2,129) 1,054 11.6 Money transmission licenses (1) 2,100 — 2,100 Total gross carrying value $ 539,684 $ (250,890) $ 288,794 9.7 (1) These assets have an indefinite useful life. Years Ended December 31, (in thousands) 2023 2022 2021 Amortization expense $ 56,901 $ 61,170 $ 41,237 |
Accounts Receivable, Allowance for Credit Loss | A reconciliation of the beginning and ending amount of allowance for expected losses is as follows for the year ended December 31, 2023: (in thousands) Trade Receivables Settlement assets Balance at January 1, 2023 $ (1,143) $ (4,976) Charge-offs (recoveries), net 130 3,407 Provision (1) (4,276) (4,989) Balance at December 31, 2023 $ (5,289) $ (6,558) (1) Provision for trade receivables includes restructuring related costs of $3.5 million |
Financing Receivable, Allowance for Credit Loss | A reconciliation of the beginning and ending amount of allowance for expected losses is as follows for the year ended December 31, 2023: (in thousands) Trade Receivables Settlement assets Balance at January 1, 2023 $ (1,143) $ (4,976) Charge-offs (recoveries), net 130 3,407 Provision (1) (4,276) (4,989) Balance at December 31, 2023 $ (5,289) $ (6,558) (1) Provision for trade receivables includes restructuring related costs of $3.5 million |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The preliminary purchase price allocation is set forth in the table below and expected to be finalized as soon as practicable but no later than one year from the closing date. (in thousands) Consideration: Cash $ 28,500 Contingent consideration payments (1) 8,419 Common equity of the Acquiring Entity 330 Less: cash and restricted cash acquired (3) (278) Total purchase consideration, net of cash and restricted cash acquired $ 36,971 Recognized amounts of assets acquired and liabilities assumed: Accounts receivable (3) $ 831 Prepaid expenses (3) 469 Settlement assets 8,277 Equipment, net 47 Goodwill (3) 7,252 Intangible assets (2) 30,460 Accounts payable and accrued expenses (3) (1,872) Customer deposits (214) Settlement obligations (8,279) Total purchase consideration $ 36,971 (1) The fair value of the contingent consideration payments issued was determined utilizing a Monte Carlo simulation. The contingent consideration payments were calculated based on the path for the simulated metrics and the contractual terms of the contingent consideration payments and were discounted to present value at a rate reflecting the risk associated with the payoffs. The fair value was estimated to be the average present value of the contingent consideration payments over all iterations of the simulation. (2) The intangible assets acquired consist of $13.0 million for customer relationships, $7.0 million for referral partner relationships, $6.5 million for technology and $3.9 million for trade name. (3) During the fourth quarter 2023, the Company recorded measurement period adjustments due to additional information received related to cash acquired, accounts receivable, prepaid expenses, goodwill and accounts payable. This measurement period adjustment resulted in decreases in cash and restricted cash acquired of $40.0 thousand, and accounts receivable of $50.0 thousand offset by increases in prepaid expenses of $46.0 thousand, and goodwill of $0.3 million, and accounts payable of $0.2 million. |
Business Acquisition, Pro Forma Information | The Company's Consolidated Financial Statements for year ended December 31, 2023 include the operating results of Plastiq from August 1, 2023 through December 31, 2023 as noted in the table below: Year Ended December 31, 2023 (in thousands) Revenues $ 27,436 Operating loss (1) $ (1,997) (1) Excluding acquisition related costs of $1.3 million |
Schedule of Business Acquisitions, by Acquisition | The preliminary purchase price allocation is set forth in the table below and is expected to be finalized as soon as practicable, but no later than one year from the acquisition date. (in thousands) Consideration: Cash (1) $ 5,026 Fair value of class B shares issued in Ovvi (NCI) (3) 5,026 Total enterprise value of business acquired (3) 659 $ 5,685 Recognized amounts of assets acquired and liabilities assumed: Accounts receivable (4) $ 43 Inventory (4) 98 Property, equipment and software, net 20 Goodwill (3)(4) 3,504 Intangible assets (2) 2,021 Other non-current asset 152 Other non-current liability (153) Total enterprise value of business acquired (3) $ 5,685 (1) Includes $50.0 thousand withheld for inventory acquired which was subsequently released in March 2023. (2) The intangible assets consist of $1.3 million for technology, $0.4 million for customer relationships and $0.3 million for trade names. (3) During the first quarter of 2023, the Company recorded measurement period adjustments due to additional information received related to the valuation of the Class B shares. This measurement period adjustment resulted in a decrease of $0.6 million in goodwill and NCI. (4) During the third quarter of 2023, the Company recorded measurement period adjustments due to additional information received related to accounts receivable and inventory. This measurement period adjustment resulted in a decrease of $0.1 million in accounts receivable and inventory, offset by an increase in goodwill of $0.1 million. (in thousands) Consideration: Cash $ 379,220 Equity instruments (1) 34,388 Less: cash and restricted cash acquired (6,598) Total purchase consideration, net of cash and restricted cash acquired $ 407,010 Recognized amounts of assets acquired and liabilities assumed: Accounts receivable $ 385 Prepaid expenses and other current assets 5,297 Current portion of notes receivable 784 Settlement assets and customer/subscriber account balances 498,811 Property, equipment and software, net 712 Goodwill 244,712 Intangible assets, net (2) 211,400 Other noncurrent assets 955 Accounts payable and accrued expenses (7,837) Settlement and customer/subscriber account obligations (498,811) Deferred income taxes, net (44,018) Other noncurrent liabilities (5,380) Total purchase consideration $ 407,010 (1) The fair value of the 7,551,354 shares of PRTH Common Stock that were issued was determined based on their market price at the time of closing adjusted for an appropriate liquidity discount due to trading restrictions under Securities Rule 144. (2) The intangible assets acquired consist of $154.9 million for referral partner relationships, $34.3 million for technology, $20.1 million for customer relationships and $2.1 million for money transmission licenses. (in thousands) Accounts receivable $ 214 Prepaid expenses and other current assets 209 Property, equipment and software, net and other current assets 287 Goodwill 13,804 Intangible assets, net (1) 25,400 Other noncurrent liabilities (214) Total purchase price $ 39,700 (1) |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents a disaggregation of our consolidated revenues by type: Years Ended December 31, (in thousands) 2023 2022 2021 Revenue Type: Merchant card fees $ 595,205 $ 553,037 $ 468,764 Money transmission services 98,137 71,536 19,415 Outsourced services and other services 49,600 29,627 21,033 Equipment 12,670 9,441 5,689 Total revenues (1)(2) $ 755,612 $ 663,641 $ 514,901 (1) Includes contracts with an original duration of one year or less and variable consideration under a stand-ready series of distinct days of service. The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material. (2) Approximately $33.4 million, $7.5 million and $0.7 million, of interest income for the years ended December 31, 2023, 2022 and 2021, respectively, is included in outsourced services and other services revenue in the table above. The following table presents a disaggregation of our consolidated revenues by segment: Year Ended December 31, 2023 (in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services Equipment Total Segment SMB $ 563,878 $ — $ 6,322 $ 12,670 $ 582,870 B2B 31,114 — 9,612 — 40,726 Enterprise 213 98,137 33,666 — 132,016 Total revenues $ 595,205 $ 98,137 $ 49,600 $ 12,670 $ 755,612 Year Ended December 31, 2022 (in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services Equipment Total Segment SMB $ 549,646 $ — $ 3,150 $ 9,441 $ 562,237 B2B 3,391 — 15,499 — 18,890 Enterprise — 71,536 10,978 — 82,514 Total revenues $ 553,037 $ 71,536 $ 29,627 $ 9,441 $ 663,641 Year Ended December 31, 2021 (in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services Equipment Total Segment SMB $ 466,819 $ — $ 3,122 $ 5,689 $ 475,630 B2B 1,945 — 15,193 — 17,138 Enterprise — 19,415 2,718 — 22,133 Total revenues $ 468,764 $ 19,415 $ 21,033 $ 5,689 $ 514,901 |
Settlement Assets and Custome_2
Settlement Assets and Customer/Subscriber Account Balances and Related Obligations (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Settlement Assets | The Company's consolidated settlement assets and customer/subscriber account balances and settlement and customer/subscriber account obligations were as follows: (in thousands) December 31, 2023 December 31, 2022 Settlement Assets, net of estimated losses (1) : Card settlements due from merchants $ 2,705 $ 444 Card settlements due from networks 8,185 — Customer/Subscriber Account Balances: Cash and cash equivalents 745,585 531,574 Total settlement assets and customer/subscriber account balances $ 756,475 $ 532,018 Settlement and Customer/Subscriber Account Obligations: Customer account obligations $ 710,775 $ 516,086 Subscriber account obligations 33,921 15,488 Total customer/subscriber account obligations 744,696 531,574 Due to customer payees (2) 11,058 1,766 Total settlement and customer/subscriber account obligations $ 755,754 $ 533,340 (1) Allowance for estimated losses was $6.6 million and $5.0 million as of December 31, 2023 and 2022, respectively (2) Card settlements due from networks includes $8.2 million as of December 31, 2023 of related assets and remainder are included in restricted cash on our Consolidated Balance Sheets. There were no card settlements due from networks in 2022. |
Settlement Obligations | The Company's consolidated settlement assets and customer/subscriber account balances and settlement and customer/subscriber account obligations were as follows: (in thousands) December 31, 2023 December 31, 2022 Settlement Assets, net of estimated losses (1) : Card settlements due from merchants $ 2,705 $ 444 Card settlements due from networks 8,185 — Customer/Subscriber Account Balances: Cash and cash equivalents 745,585 531,574 Total settlement assets and customer/subscriber account balances $ 756,475 $ 532,018 Settlement and Customer/Subscriber Account Obligations: Customer account obligations $ 710,775 $ 516,086 Subscriber account obligations 33,921 15,488 Total customer/subscriber account obligations 744,696 531,574 Due to customer payees (2) 11,058 1,766 Total settlement and customer/subscriber account obligations $ 755,754 $ 533,340 (1) Allowance for estimated losses was $6.6 million and $5.0 million as of December 31, 2023 and 2022, respectively (2) Card settlements due from networks includes $8.2 million as of December 31, 2023 of related assets and remainder are included in restricted cash on our Consolidated Balance Sheets. There were no card settlements due from networks in 2022. |
Notes Receivable (Tables)
Notes Receivable (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Financing Receivable, before Allowance for Credit Loss, Maturity | As of December 31, 2023, the principal payments for the Company's notes receivables are due as follows: (in thousands) Year Ending December 31, 2024 $ 1,468 2025 1,365 2026 909 2027 1,031 2028 423 Thereafter — Total $ 5,196 |
Property, Equipment and Softw_2
Property, Equipment and Software (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Equipment and Software | Property, equipment and software Estimated Useful Life Furniture and fixtures 5 - 10 years Equipment 3 - 8 years Computer software 2 - 5 years Leasehold improvements 3 - 10 years A summary of property, equipment and software, net was as follows: (in thousands) December 31, 2023 December 31, 2022 Computer software $ 78,492 $ 64,197 Equipment 10,377 13,302 Leasehold improvements 1,535 6,990 Furniture and fixtures 1,442 2,909 Property, equipment and software 91,846 87,398 Less: Accumulated depreciation (56,442) (58,409) Capital work in-progress 9,276 5,698 Property, equipment and software, net $ 44,680 $ 34,687 Years Ended December 31, (in thousands) 2023 2022 2021 Depreciation expense $ 11,494 $ 9,511 $ 8,460 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The Company's goodwill relates to the following reporting units: (in thousands) December 31, 2023 December 31, 2022 SMB Payments $ 124,139 $ 124,625 Enterprise Payments 244,712 244,712 Plastiq (B2B Payments) 7,252 — Total $ 376,103 $ 369,337 The following table summarizes the changes in the carrying value of goodwill: (in thousands) Amount Balance at January 1, 2022 365,740 Final purchase price adjustment for Finxera (392) Ovvi acquisition 3,989 Balance at December 31, 2022 369,337 Purchase price adjustment for Ovvi (486) Plastiq acquisition and purchase price adjustments 7,252 Balance at December 31, 2023 $ 376,103 |
Schedule of Other Intangible Assets | Intangible Asset Nature Estimated Useful Life ISO and Referral Partner Relationships Acquired relationships with ISOs and referral partners 11 – 25 years Residual Buyouts Surrender of rights to receive commissions by ISOs 3 – 9 years Customer Relationships Acquired customer relationships 2 – 10 years Merchant Portfolios Acquired rights to a portfolio of merchants 5 – 10 years Technology Acquired proprietary software and website domains 6 – 10 years Trade Names and Non-compete Agreements Acquired trade names and non-compete agreements 3 – 10 years Money Transmission Licenses Acquired licenses to collect, store, lend and send money in 46 U.S. states, the District of Columbia and two U.S. territories. indefinite At December 31, 2023 and 2022, other intangible assets consisted of the following: (in thousands, except weighted-average data) December 31, 2023 Weighted-average Gross Carrying Value Accumulated Amortization Net Carrying Value Other intangible assets: ISO and referral partner relationships $ 182,339 $ (36,506) $ 145,833 14.7 Residual buyouts 135,164 (92,699) 42,465 6.3 Customer relationships 109,017 (92,781) 16,236 8.4 Merchant portfolios 83,350 (56,139) 27,211 6.5 Technology 57,639 (22,712) 34,927 9.0 Non-compete agreements 3,390 (3,390) — 0.0 Trade names 7,104 (2,526) 4,578 11.7 Money transmission licenses (1) 2,100 — 2,100 Total gross carrying value $ 580,103 $ (306,753) $ 273,350 9.7 (1) These assets have an indefinite useful life. (in thousands, except weighted-average data) December 31, 2022 Weighted-average Gross Carrying Value Accumulated Amortization Net Carrying Value Other intangible assets: ISO relationships $ 175,300 $ (24,021) $ 151,279 14.8 Residual buyouts 132,325 (76,316) 56,009 6.6 Customer relationships 96,000 (83,298) 12,702 8.2 Merchant portfolios 76,423 (43,170) 33,253 6.7 Technology 50,963 (18,566) 32,397 8.4 Non-compete agreements 3,390 (3,390) — 0.0 Trade names 3,183 (2,129) 1,054 11.6 Money transmission licenses (1) 2,100 — 2,100 Total gross carrying value $ 539,684 $ (250,890) $ 288,794 9.7 (1) These assets have an indefinite useful life. Years Ended December 31, (in thousands) 2023 2022 2021 Amortization expense $ 56,901 $ 61,170 $ 41,237 |
Schedule of Intangible Assets, Estimated Amortization Expense by Year | The estimated amortization expense of intangible assets as of December 31, 2023, for the next five years and thereafter is: (in thousands) Estimated Amortization Expense Year Ending December 31, 2024 $ 40,559 2025 34,480 2026 33,691 2027 31,427 2028 23,426 Thereafter 107,667 Total (1) $ 271,250 (1) Total will not agree to the intangible asset net book value due to intangible assets with indefinite useful life. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Assets and Liabilities, Lessee | The ROU Assets and lease liabilities consisted of the following: (in thousands, except weighted-average data) Financial Statement Classification December 31, 2023 December 31, 2022 Operating Lease ROU Assets: Operating lease ROU Assets Other noncurrent assets $ 5,427 $ 4,593 Operating Lease Obligations: Operating lease obligations - current Accounts payable and accrued expenses $ 1,582 $ 1,336 Operating lease obligations - noncurrent Other noncurrent liabilities 4,592 4,110 Total operating lease obligations $ 6,174 $ 5,446 Weighted-average remaining lease term in years 3.8 4.4 Weighted-average discount rate 5.9 % 6.9 % |
Lease, Cost | The Components of lease expense were as follows: Years Ended December 31, (in thousands) Financial Statement Classification 2023 2022 2021 Operating lease expense (1) Selling, general and administrative $ 1,760 $ 1,984 $ 1,841 (1) Excludes short-term lease expense and sublease income, which was immaterial for the years ended December 31, 2023 and 2022. Years Ended December 31, (in thousands) Financial Statement Classification 2023 2022 2021 Operating cash flows from operating leases Operating activities $ 1,862 $ 2,131 $ 1,803 |
Lessee, Operating Lease, Liability, Maturity | Future minimum lease payments for the Company's real estate operating leases at December 31, 2023 were as follows: (in thousands) Year Ending December 31, Amount Due 2024 $ 1,873 2025 1,731 2026 1,701 2027 1,254 2028 265 Thereafter 65 Total future minimum lease payments 6,889 Amount representing interest (715) Total future minimum lease payments, net of interest $ 6,174 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounts Payable [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | The components of accounts payable and accrued expenses consisted of the following: (in thousands) December 31, 2023 December 31, 2022 Accrued expenses $ 12,621 $ 17,742 Accrued card network fees 14,320 14,243 Accrued compensation 8,748 7,287 Contingent consideration, current portion 5,951 6,079 Accounts payable 11,003 6,513 Total accounts payable and accrued expenses $ 52,643 $ 51,864 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Outstanding debt obligations consisted of the following: (in thousands) December 31, 2023 December 31, 2022 Credit Agreement: Term facility - matures April 27, 2027, interest rate of 11.21% and 9.82% at December 31, 2023 and 2022, respectively $ 654,373 $ 610,700 Revolving credit facility - $65.0 million ($40.0 million for 2022) line, matures April 27, 2026, interest rate of 10.20% and 8.82% at December 31, 2023 and 2022, respectively — 12,500 Total debt obligations 654,373 623,200 Less: current portion of long-term debt (6,712) (6,200) Less: unamortized debt discounts and deferred financing costs (15,696) (18,074) Long-term debt, net $ 631,965 $ 598,926 |
Schedule of Maturities of Long-Term Debt | Based on terms and conditions existing at December 31, 2023, future minimum principal payments for long-term debt are as follows: (in thousands) Revolving Credit Facility December 31, Term Facility Total Principal Due 2024 $ 6,712 $ — $ 6,712 2025 6,712 — 6,712 2026 6,712 — 6,712 2027 634,237 — 634,237 Total $ 654,373 $ — $ 654,373 |
Interest Expense Disclosure | Twelve Months Ended December 31, (in thousands) 2023 2022 2021 Interest expense (1) $ 76,108 $ 53,554 $ 36,485 (1) |
Redeemable Senior Preferred S_2
Redeemable Senior Preferred Stock and Warrants (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Temporary Equity | The following table provides the redemption value of the redeemable senior preferred stock for the periods presented: (in thousands) December 31, 2023 December 31, 2022 Redeemable senior preferred stock $ 225,000 $ 225,000 Accumulated unpaid dividend 43,498 25,498 Dividend payable 7,027 5,341 Redemption value 275,525 255,839 Less: unamortized discounts and issuance costs (16,920) (20,260) Redeemable senior preferred stock, net of discounts and issuance costs $ 258,605 $ 235,579 The following table provides a reconciliation of the beginning and ending carrying amounts of the redeemable senior preferred stock for the periods presented: (in thousands) Shares Amount January 1, 2022 225 $ 210,158 Unpaid dividend on redeemable senior preferred stock — 16,794 Accretion of discounts and issuance cost — 3,286 Cash portion of dividend and ticking fee outstanding at the end of the year — 5,341 December 31, 2022 225 $ 235,579 Unpaid dividend on redeemable senior preferred stock — 18,000 Accretion of discounts and issuance cost — 3,340 Cash portion of dividend outstanding at December 31, 2023 — 7,027 Payment of cash portion of dividend and ticking fee outstanding at December 31, 2022 — (5,341) December 31, 2023 225 $ 258,605 The following table provides a summary of the dividends for the period presented: (in thousands) Year Ended December 31, 2023 Year Ended Dividends paid in cash (1) $ 26,404 $ 16,800 Accumulated dividends accrued as part of the carrying value of redeemable senior preferred stock 18,000 16,794 Dividends declared $ 44,404 $ 33,594 (1) Included in this amount is $7.0 million and $5.3 million of dividends outstanding as of December 31, 2023 and 2022 respectively. The following table presents cumulative dividends in arrears in aggregate and per-share: (in thousands, except per share amounts) Year Ended December 31, 2023 Year Ended Cumulative preferred dividends in arrears $ 43,498 $ 25,497 Redeemable senior preferred stock, outstanding 225 225 Cumulative preferred dividends in arrears, per share $ 193.3 $ 113.3 Redemption Date Redemption Price Prior to April 27, 2023 100% of liquidation preference (i.e., $1,000 per share) plus any accrued and unpaid dividends and the make-whole amount (i.e., present value of additional 2% of the liquidation preference plus any accrued and unpaid dividends thereon through the redemption date plus 102% of the amount of dividends that will accrue from the redemption date through April 27, 2023) April 27, 2023 - April 26, 2024 102% of the sum of the (a) outstanding liquidation preference plus (b) any accrued and unpaid dividends through and including the applicable redemption date April 27, 2024 and thereafter 100% of the sum of the (a) outstanding liquidation preference plus (b) any accrued and unpaid dividends through and including the applicable redemption date |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Components of consolidated income tax (benefit) expense were as follows: (in thousands) For the Years Ended December 31, 2023 2022 2021 U.S. current income tax expense (benefit) Federal $ 10,624 $ 10,411 $ (2,321) State and local 3,187 2,546 (379) Foreign 738 349 1 Total current income tax expense (benefit) $ 14,549 $ 13,306 $ (2,699) U.S. deferred income tax expense (benefit) Federal $ (5,149) $ (5,001) $ (1,343) State and local (712) (2,970) (1,213) Foreign (225) 15 (3) Total deferred income tax (benefit) expense $ (6,086) $ (7,956) $ (2,559) Total income tax expense (benefit) $ 8,463 $ 5,350 $ (5,258) |
Schedule of Effective Income Tax Rate Reconciliation | The following table provides a reconciliation of the consolidated income tax (benefit) expense at the statutory U.S. federal tax rate to actual consolidated income tax (benefit) expense: (in thousands) For the Years Ended December 31, 2023 2022 2021 U.S. federal statutory expense (benefit) $ 1,502 $ 672 $ (813) Non-controlling interests — — (3,024) State and local income taxes, net 1,588 421 (372) Foreign rate differential 114 142 — Excess tax benefits pursuant to ASU 2016-09 235 4 (339) Valuation allowance changes 3,958 4,957 1,120 Nondeductible items 768 576 703 Transaction Costs — — 2,338 Intangible assets — (1,226) (4,110) Tax credits — (100) (223) Other, net 298 (96) (538) Income tax expense (benefit) $ 8,463 $ 5,350 $ (5,258) |
Schedule of Deferred Tax Assets and Liabilities | The significant components of consolidated deferred income taxes were as follows: As of December 31, (in thousands) 2023 2022 Deferred Tax Assets: Accruals and reserves $ 1,392 $ 1,510 Investments in partnership 689 — Intangible assets 25,682 15,600 Net operating loss carryforwards 934 749 Interest limitation carryforwards 18,917 15,142 Other 3,982 4,107 Gross deferred tax assets 51,596 37,108 Valuation allowance (19,421) (15,462) Total deferred tax assets 32,175 21,646 Deferred Tax Liabilities: Prepaid assets (1,124) (1,101) Investments in partnership — (41) Property and equipment (8,518) (4,057) Total deferred tax liabilities (9,642) (5,199) Net deferred tax assets $ 22,533 $ 16,447 |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (in thousands) Balance as of January 1, 2023 $ 302 Additions based on tax positions related to the current year — Additions based on positions of prior years — Reductions for tax positions of prior years — Reductions related to lapse of the applicable statutes of limitations (148) Settlements — Balance as of December 31, 2023 $ 154 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Class of Treasury Stock | Share re-purchase activity under these programs was as follows: Years Ended December 31, in thousands, except share data, which is in whole units 2023 2022 Number of shares purchased (1) — 1,309,374 Average price paid per share $ — $ 4.42 Total Investment (1) $ — $ 5,791 (1) These amounts may differ from the repurchases of Common Stock amounts in the Consolidated Statements of Cash Flows due to shares withheld for taxes and unsettled share repurchases at the end of the year. |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Equity-Based Compensation | Stock-based compensation was as follows: Years Ended December 31, (in thousands) 2023 2022 2021 2018 Equity Incentive Plan Restricted stock units compensation expense $ 6,423 $ 6,182 $ 2,561 Stock options compensation expense 7 7 327 Liability-classified compensation expense — — 325 Total stock-based compensation under the 2018 Equity Incentive Plan 6,430 6,189 3,213 ESPP compensation expense 50 39 — Incentive units compensation expense 288 — — Total $ 6,768 $ 6,228 $ 3,213 |
Summary of Cumulative Activity for the 2018 Plan | A summary of the activity in stock units for the 2018 Plan is as follows: Common Stock available for issuance at January 1, 2021 3,862,134 Stock options forfeited 50,589 Stock options expired 53,870 RSUs granted (711,987) RSUs forfeited 1,957 Shares withheld for taxes (1) 106,477 Common Stock available for issuance at December 31, 2021 3,363,040 New shares authorized for issuance 2,500,000 Stock options forfeited 221,733 RSUs granted (3,223,949) RSUs forfeited 353,196 Shares withheld for taxes (1) 291,266 Common Stock available for issuance at December 31, 2022 3,505,286 Stock options forfeited 129,380 RSUs granted (641,578) RSUs forfeited 263,600 Shares withheld for taxes (1) 291,110 Common Stock available for issuance at December 31, 2023 3,547,798 (1) |
Schedule of Stock Options Roll Forward | Details about the time-based equity-classified stock options granted under the plan are as follows: Number of Shares Weighted-average Exercise Price Weighted-average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2022 1,005,892 $ 6.88 5.7 years $ 42 Forfeited (1) (129,380) 6.95 Outstanding, December 31, 2023 876,512 6.87 4.9 years $ 16 Exercisable at December 31, 2023 872,762 $ 6.89 5.0 years $ 12 (1) |
Schedule of RSU Activity | Below is a summary of the Company's equity-classified RSUs for the periods presented: Underlying Common Shares Weighted-average Grant Date Fair Value Service-based vesting: Unvested at January 1, 2021 596,401 $ 3.18 Granted (1) 647,512 $ 6.63 Forfeited (1,957) $ 7.92 Vested (362,706) $ 3.65 Unvested at December 31, 2021 879,250 $ 5.51 Granted (1) 2,878,948 $ 6.14 Forfeited (353,196) $ 6.04 Vested (822,602) $ 5.44 Unvested at December 31, 2022 2,582,400 $ 5.70 Granted (1) 641,578 $ 3.81 Forfeited (226,100) $ 5.44 Vested (1,028,782) $ 5.60 Unvested at December 31, 2023 1,969,096 $ 5.68 Performance-based vesting: Unvested at January 1, 2021 139,598 $ 2.56 Granted (2) 64,475 $ 6.90 Vested (104,620) $ 7.24 Unvested at December 31, 2021 99,453 $ 4.46 Granted (2) 64,366 $ 5.00 Vested (64,366) $ 6.90 Unvested at December 31, 2022 99,453 $ 3.24 Granted 345,000 $ 5.31 Forfeited (37,500) $ 5.31 Vested (116,958) $ 5.12 Unvested at December 31, 2023 289,995 $ 5.31 (1) Includes 143,605 shares with an estimated fair value of $0.5 million, 228,347 shares with an estimated fair value of $1.1 million and 55,689 shares with an estimated fair value of $0.5 million issued to non-employees in December 31, 2023, 2022 and 2021, respectively. (2) Includes only the portions of grants for which the performance goals have been determined and communicated to the grant recipient. Any grants for which the required performance goals have not been determined and communicated to the grant recipient are not considered to have been granted for accounting purposes. |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Fair Value, Net Derivative Asset (Liability), Unobservable Input Reconciliation | The following table provides a reconciliation of the beginning and ending balance of the Company's contingent consideration liabilities related to completed acquisitions: (in thousands) Contingent Consideration Liabilities January 1, 2022 $ 10,686 Accretion of contingent consideration 864 Fair value adjustments due to changes in estimates of future payments 1,195 Payment of contingent consideration (4,666) December 31, 2022 $ 8,079 Addition of contingent consideration (related to asset acquisition) 263 Addition of contingent consideration due to resolution of contingency 7,000 Addition of contingent consideration (related to business combination) 8,419 Accretion of contingent consideration 1,658 Fair value adjustments due to changes in estimates of future payments (19) Payment of contingent consideration (9,909) Adjustment for receivable due to residual shortfall (2,053) December 31, 2023 $ 13,438 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | These liabilities measured at fair value on a recurring basis consisted of the following: Years Ended December 31, (in thousands) Fair Value Hierarchy 2023 2022 Contingent consideration, current portion Level 3 $ 5,951 $ 6,079 Contingent consideration, noncurrent portion Level 3 7,487 2,000 Total contingent consideration $ 13,438 $ 8,079 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segment | Information on reportable segments and reconciliations to consolidated revenues, consolidated depreciation and amortization, and consolidated operating income are as follows: (in thousands) Years Ended December 31, 2023 2022 2021 Revenues: SMB Payments $ 582,870 $ 562,237 $ 475,630 B2B Payments 40,726 18,890 17,138 Enterprise Payments 132,016 82,514 22,133 Consolidated revenues $ 755,612 $ 663,641 $ 514,901 Depreciation and amortization: SMB Payments $ 41,036 $ 43,925 $ 41,144 B2B Payments 2,221 744 294 Enterprise Payments 23,753 24,892 7,158 Corporate 1,385 1,120 1,101 Consolidated depreciation and amortization $ 68,395 $ 70,681 $ 49,697 Operating income: SMB Payments $ 46,482 $ 54,866 $ 52,884 B2B Payments (2,535) 208 135 Enterprise Payments 73,964 30,937 6,763 Corporate (36,387) (29,846) (26,689) Consolidated operating income $ 81,524 $ 56,165 $ 33,093 |
Reconciliation of Revenue from Segments to Consolidated | A reconciliation of total operating income of reportable segments to the Company's net (loss) income is provided in the following table: (in thousands) Years Ended December 31, 2023 2022 2021 Total operating income of reportable segments $ 117,911 $ 86,011 $ 59,782 Corporate (36,387) (29,846) (26,689) Interest expense (76,108) (53,554) (36,485) Debt modification and extinguishment costs — — (8,322) Gain on sale of business — — 7,643 Other income, net 1,736 589 202 Income tax (expense) benefit (8,463) (5,350) 5,258 Net (loss) income $ (1,311) $ (2,150) $ 1,389 |
(Loss) Earnings per Common Sh_2
(Loss) Earnings per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Common Share | The following tables set forth the computation of the Company's basic and diluted earnings (loss) per common share: (in thousands except per share amounts) Years Ended December 31, 2023 2022 2021 Numerator: Net (loss) income $ (1,311) $ (2,150) 1,389 Less: Dividends and accretion attributable to redeemable senior preferred stockholders (47,744) (36,880) (18,009) Less: NCI preferred unit redemptions — — (8,021) Net loss attributable to common stockholders $ (49,055) $ (39,030) $ (24,641) Denominator: Basic: Weighted-average common shares outstanding (1) 78,333 78,233 71,902 Basic (loss) earnings per common share $ (0.63) $ (0.50) $ (0.34) Diluted: Weighted-average common shares outstanding (1) 78,333 78,233 71,902 Diluted weighted-average common shares outstanding 78,333 78,233 71,902 Diluted (loss) earnings per common share $ (0.63) $ (0.50) $ (0.34) (1) The weighted-average common shares outstanding includes 1,803,841 warrants issued in the second quarter of 2021 (refer to Note 11, Redeemable Senior Preferred Stock and Warrants ) |
Schedule of Antidilutive Securities | Potentially anti-dilutive securities that were excluded from (loss) earnings per common share that could potentially be dilutive in future periods are as follows: Common Stock Equivalents at December 31, (in thousands) 2023 2022 2021 Outstanding warrants on common stock (1) — 3,556 3,556 Outstanding options and warrants issued to adviser (2) — 600 600 Restricted stock awards (3) 1,180 2,440 442 Liability-classified restricted stock units — — 129 Outstanding stock option awards (3) 900 1,098 1,313 Total 2,080 7,694 6,040 (1) The warrants were exercisable at $11.50 per share and expired on August 24, 2023. Refer to Note 13. Stockholders' Deficit . (2) The warrants and options were exercisable at $12.00 per share and expired on August 24, 2023. Refer Note 13. Stockholders' Deficit . (3) Granted under the 2018 Plan. |
Nature of Business and Signif_4
Nature of Business and Significant Accounting Policies - Corporate History and Recapitalization (Details) | 12 Months Ended |
Dec. 31, 2023 segment License | |
Accounting Policies [Abstract] | |
Number of reportable segments | segment | 3 |
Finite-Lived Intangible Assets [Line Items] | |
Number of reportable segments | segment | 3 |
UNITED STATES MINOR OUTLYING ISLANDS | |
Finite-Lived Intangible Assets [Line Items] | |
Number of money transmission licenses | License | 2 |
UNITED STATES | |
Finite-Lived Intangible Assets [Line Items] | |
Number of money transmission licenses | License | 46 |
Nature of Business and Signif_5
Nature of Business and Significant Accounting Policies - Contract Acquisitions Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||
Contract acquisition costs, amortization period | 5 years | ||
Contract acquisition costs | $ 6.6 | $ 2.1 | |
Capitalized contract cost, amortization | $ 1 | $ 0.2 | $ 0 |
Nature of Business and Signif_6
Nature of Business and Significant Accounting Policies - Allowance for Doubtful Accounts Receivable and Notes Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Accounts receivable allowance for credit loss | $ 5,289 | $ 1,143 |
Notes receivable, allowance for credit loss | 0 | 0 |
Allowance for estimated losses | $ 6,600 | $ 5,000 |
Nature of Business and Signif_7
Nature of Business and Significant Accounting Policies - Allowance for Trade Receivables and Settlement Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Trade Receivables and Settlement assets | ||
Balance at January 1, 2023 | $ 1,143 | |
Balance at December 31, 2023 | 5,289 | $ 1,143 |
Restructuring | 3,500 | 300 |
Trade Receivables | ||
Trade Receivables and Settlement assets | ||
Balance at January 1, 2023 | 1,143 | |
Charge-offs (recoveries), net | 130 | |
Provision | (4,276) | |
Balance at December 31, 2023 | 5,289 | 1,143 |
Settlement assets | ||
Trade Receivables and Settlement assets | ||
Balance at January 1, 2023 | 4,976 | |
Charge-offs (recoveries), net | 3,407 | |
Provision | (4,989) | |
Balance at December 31, 2023 | $ 6,558 | $ 4,976 |
Nature of Business and Signif_8
Nature of Business and Significant Accounting Policies - Property and Equipment and Costs Incurred to Develop Software for Internal Use (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Impairment of internal use software | $ 0.3 | $ 0 | $ 0 |
Software costs capitalized during the period | 21.3 | 16.8 | 7.8 |
Capitalized computer software, net | 40.6 | 28.1 | |
Capitalized computer software, amortization | $ 9.4 | $ 6.9 | $ 5.9 |
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 10 years | ||
Equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 3 years | ||
Equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 8 years | ||
Computer software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 2 years | ||
Computer software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Leasehold improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 3 years | ||
Leasehold improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 10 years |
Nature of Business and Signif_9
Nature of Business and Significant Accounting Policies - Intangible Assets (Details) - License | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful lives (in years) | 9 years 8 months 12 days | 9 years 8 months 12 days |
UNITED STATES | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of money transmission licenses | 46 | |
UNITED STATES MINOR OUTLYING ISLANDS | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of money transmission licenses | 2 | |
ISO and referral partner relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful lives (in years) | 14 years 8 months 12 days | 14 years 9 months 18 days |
ISO and referral partner relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful lives (in years) | 11 years | |
ISO and referral partner relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful lives (in years) | 25 years | |
Residual buyouts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful lives (in years) | 6 years 3 months 18 days | 6 years 7 months 6 days |
Residual buyouts | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful lives (in years) | 3 years | |
Residual buyouts | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful lives (in years) | 9 years | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful lives (in years) | 8 years 4 months 24 days | 8 years 2 months 12 days |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful lives (in years) | 2 years | |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful lives (in years) | 10 years | |
Merchant Portfolios | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful lives (in years) | 5 years | |
Merchant Portfolios | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful lives (in years) | 10 years | |
Technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful lives (in years) | 6 years | |
Technology | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful lives (in years) | 10 years | |
Trade Names and Non-compete Agreements | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful lives (in years) | 3 years | |
Trade Names and Non-compete Agreements | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful lives (in years) | 10 years |
Nature of Business and Signi_10
Nature of Business and Significant Accounting Policies - Restructuring Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Restructuring | $ 3.5 | $ 0.3 |
Nature of Business and Signi_11
Nature of Business and Significant Accounting Policies - Accrued Residual Commissions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||
Residual commission expenses | $ 415.1 | $ 396.2 | $ 330.2 |
Nature of Business and Signi_12
Nature of Business and Significant Accounting Policies - ISO Deposit and Loss Reserve (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Restricted cash | $ 6.4 | $ 5.1 |
Nature of Business and Signi_13
Nature of Business and Significant Accounting Policies - Share-based Compensation (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period (in years) | 3 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period (in years) | 4 years |
Employee Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expiration period (in years) | 10 years |
Nature of Business and Signi_14
Nature of Business and Significant Accounting Policies - Non-voting Incentive Units (Details) | 12 Months Ended |
Dec. 31, 2023 subsidiary | |
Accounting Policies [Abstract] | |
Number of subsidiaries | 6 |
Nature of Business and Signi_15
Nature of Business and Significant Accounting Policies - Concentration of Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Product Information [Line Items] | |||
Settlement assets and customer/subscriber account balances | $ 756,475 | $ 532,018 | |
Customer Account Balances | |||
Product Information [Line Items] | |||
Settlement assets and customer/subscriber account balances | 745,600 | ||
Cash, FDIC insured amount | $ 710,800 | ||
Revenue from Contract with Customer | Merchant Portability Rights | SMB Payments | |||
Product Information [Line Items] | |||
Concentration risk, percentage | 15% | 21% | 22% |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | 36 Months Ended | |||||||
Jul. 31, 2023 USD ($) | Nov. 18, 2022 USD ($) | Sep. 17, 2021 USD ($) | Jun. 25, 2021 USD ($) | Apr. 28, 2021 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 24, 2024 USD ($) | |
Business Acquisition [Line Items] | ||||||||||
Contingent consideration | $ 13,438 | $ 13,438 | $ 8,079 | |||||||
Contingent consideration, current portion | 5,951 | 5,951 | 6,079 | |||||||
Acquisition related costs | 1,700 | 1,300 | ||||||||
Goodwill | $ 13,804 | 376,103 | 376,103 | 369,337 | $ 365,740 | |||||
Borrowings under revolving credit facility | 44,000 | 29,500 | $ 30,000 | |||||||
Enterprise Payments | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill | 244,712 | 244,712 | $ 244,712 | |||||||
Revolving Credit Facility | Credit and Guaranty Agreement | Line of Credit | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Borrowings under revolving credit facility | 30,000 | |||||||||
Wholesale Payments, Inc., Residual Portfolio Rights | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Total consideration transferred in asset acquisition | $ 42,400 | |||||||||
Contingent consideration transferred | $ 24,800 | |||||||||
Threshold period (in years) | 3 years | |||||||||
Note payable netted against purchase price | $ 3,000 | |||||||||
Advance payments | 2,000 | |||||||||
Payments for asset acquisition | $ 41,200 | |||||||||
Finxera | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Total consideration transferred | $ 407,010 | |||||||||
Cash | $ 379,220 | |||||||||
Equity interest acquired (as a percent) | 100% | |||||||||
Goodwill | $ 244,712 | |||||||||
Tax deductible goodwill | $ 8,700 | |||||||||
Finxera | Enterprise Payments | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill allocation (as a percent) | 100% | |||||||||
C&H Financial Services | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Cash | $ 34,500 | |||||||||
Threshold period (in years) | 3 years | |||||||||
Other consideration transferred | $ 500 | |||||||||
Cash on hand | 4,500 | |||||||||
C&H Financial Services | Previously Reported | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Total consideration transferred | 39,700 | |||||||||
Cash | 35,000 | |||||||||
Debt incurred | $ 4,700 | |||||||||
C&H Financial Services | Scenario, Forecast | Maximum | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Total consideration transferred | $ 60,000 | |||||||||
Ovvi | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Total consideration transferred | $ 5,026 | |||||||||
Cash | 5,026 | |||||||||
Total enterprise value of business acquired | 5,685 | |||||||||
Goodwill | $ 3,504 | |||||||||
Plastiq | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Total consideration transferred | $ 37,000 | |||||||||
Cash | 28,500 | |||||||||
Contingent consideration, maximum | 23,100 | 23,100 | ||||||||
Contingent consideration | 9,700 | 9,700 | ||||||||
Contingent consideration, current portion | 2,200 | 2,200 | ||||||||
Contingent consideration, noncurrent portion | 7,500 | 7,500 | ||||||||
Interest payable | $ 1,300 | $ 1,300 | ||||||||
Quarterly payments equal to percent of cash available for contingent consideration | 0.75 | 0.75 | ||||||||
Goodwill | 7,252 | |||||||||
Debt incurred | $ 8,419 | |||||||||
Revenues | $ 27,436 | |||||||||
Operating income since acquisition | $ (1,997) |
Acquisitions - Schedule of Plas
Acquisitions - Schedule of Plastiq Business Acquisition (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jul. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 25, 2021 | |
Recognized amounts of assets acquired and liabilities assumed: | ||||||
Accounts receivable | $ 214 | |||||
Prepaid expenses and other current assets | 209 | |||||
Goodwill | $ 376,103 | $ 376,103 | $ 369,337 | $ 365,740 | 13,804 | |
Intangible assets, net | $ 25,400 | |||||
Goodwill, purchase accounting adjustments | $ (486) | $ (392) | ||||
Plastiq | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 28,500 | |||||
Debt incurred | 8,419 | |||||
Common equity of acquiring entity | 330 | |||||
Less: cash and restricted cash acquired | (278) | |||||
Total purchase consideration, net of cash and restricted cash acquired | 36,971 | |||||
Recognized amounts of assets acquired and liabilities assumed: | ||||||
Accounts receivable | 831 | |||||
Prepaid expenses and other current assets | 469 | |||||
Settlement assets | 8,277 | |||||
Equipment, net | 47 | |||||
Goodwill | 7,252 | |||||
Intangible assets, net | 30,460 | |||||
Accounts payable and accrued expenses | (1,872) | |||||
Customer deposits | (214) | |||||
Settlement obligations | (8,279) | |||||
Total enterprise value of business acquired | 36,971 | |||||
Decreases in cash and restricted cash acquired | 40 | |||||
Decrease in accounts receivable | 50 | |||||
Increases in prepaid expenses | 46 | |||||
Goodwill, purchase accounting adjustments | 300 | |||||
Increase in accounts payable | $ 200 | |||||
Plastiq | Customer relationships | ||||||
Recognized amounts of assets acquired and liabilities assumed: | ||||||
Finite-lived intangible assets acquired | 13,000 | |||||
Plastiq | Referral Partner Relationships | ||||||
Recognized amounts of assets acquired and liabilities assumed: | ||||||
Finite-lived intangible assets acquired | 7,000 | |||||
Plastiq | Technology | ||||||
Recognized amounts of assets acquired and liabilities assumed: | ||||||
Finite-lived intangible assets acquired | 6,500 | |||||
Plastiq | Trade names | ||||||
Recognized amounts of assets acquired and liabilities assumed: | ||||||
Finite-lived intangible assets acquired | $ 3,900 |
Acquisitions - Revenues and Ope
Acquisitions - Revenues and Operating Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2023 | Dec. 31, 2023 | |
Business Acquisition [Line Items] | ||
Acquisition related costs | $ 1,700 | $ 1,300 |
Plastiq | ||
Business Acquisition [Line Items] | ||
Revenues | 27,436 | |
Operating loss | $ (1,997) |
Acquisitions- Schedule of Ovvi
Acquisitions- Schedule of Ovvi Acquisition (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Nov. 18, 2022 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 25, 2021 | |
Recognized amounts of assets acquired and liabilities assumed: | |||||||
Accounts receivable | $ 214 | ||||||
Goodwill | $ 376,103 | $ 376,103 | $ 369,337 | $ 365,740 | 13,804 | ||
Intangible assets | 25,400 | ||||||
Other non-current liability | $ (214) | ||||||
Goodwill, purchase adjustments | $ 486 | $ 392 | |||||
Ovvi | |||||||
Business Acquisition [Line Items] | |||||||
Cash | $ 5,026 | ||||||
Total consideration transferred | 5,026 | ||||||
Fair value of class B shares issued in Ovvi (NCI) | 659 | ||||||
Total enterprise value of business acquired | 5,685 | ||||||
Recognized amounts of assets acquired and liabilities assumed: | |||||||
Accounts receivable | 43 | ||||||
Inventory | 98 | ||||||
Property, equipment and software, net | 20 | ||||||
Goodwill | 3,504 | ||||||
Intangible assets | 2,021 | ||||||
Other non-current asset | 152 | ||||||
Other non-current liability | (153) | ||||||
Total enterprise value of business acquired | 5,685 | ||||||
Payments to acquire business, inventory holdback | 50 | ||||||
Goodwill, purchase adjustments | (100) | $ 600 | |||||
Decrease in accounts receivable | $ 100 | ||||||
Ovvi | Technology | |||||||
Recognized amounts of assets acquired and liabilities assumed: | |||||||
Finite-lived intangible assets acquired | 1,300 | ||||||
Ovvi | Customer relationships | |||||||
Recognized amounts of assets acquired and liabilities assumed: | |||||||
Finite-lived intangible assets acquired | 400 | ||||||
Ovvi | Trade names | |||||||
Recognized amounts of assets acquired and liabilities assumed: | |||||||
Finite-lived intangible assets acquired | $ 300 |
Acquisitions- Schedule of Finxe
Acquisitions- Schedule of Finxera Acquisition (Details) - USD ($) $ in Thousands | Sep. 17, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 25, 2021 |
Recognized amounts of assets acquired and liabilities assumed: | |||||
Accounts receivable | $ 214 | ||||
Prepaid expenses and other current assets | 209 | ||||
Goodwill | $ 376,103 | $ 369,337 | $ 365,740 | 13,804 | |
Intangible assets, net | 25,400 | ||||
Other non-current liability | $ (214) | ||||
Finxera | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 379,220 | ||||
Equity Instruments | 34,388 | ||||
Less: cash and restricted cash acquired | (6,598) | ||||
Total consideration transferred | 407,010 | ||||
Recognized amounts of assets acquired and liabilities assumed: | |||||
Accounts receivable | 385 | ||||
Prepaid expenses and other current assets | 5,297 | ||||
Current portion of notes receivable | 784 | ||||
Settlement assets and customer/subscriber account balances | 498,811 | ||||
Property, equipment and software, net | 712 | ||||
Goodwill | 244,712 | ||||
Intangible assets, net | 211,400 | ||||
Other noncurrent assets | 955 | ||||
Accounts payable and accrued expenses | (7,837) | ||||
Settlement and customer/subscriber account obligations | (498,811) | ||||
Deferred income taxes, net | (44,018) | ||||
Other non-current liability | (5,380) | ||||
Total purchase consideration | $ 407,010 | ||||
Business acquisition, shares issued (in shares) | 7,551,354 | ||||
Finxera | Money Transmitter Licenses | |||||
Recognized amounts of assets acquired and liabilities assumed: | |||||
Indefinite-lived intangible assets acquired | $ 2,100 | ||||
Finxera | Referral Partner Relationships | |||||
Recognized amounts of assets acquired and liabilities assumed: | |||||
Finite-lived intangible assets acquired | 154,900 | ||||
Finxera | Technology | |||||
Recognized amounts of assets acquired and liabilities assumed: | |||||
Finite-lived intangible assets acquired | 34,300 | ||||
Finxera | Customer relationships | |||||
Recognized amounts of assets acquired and liabilities assumed: | |||||
Finite-lived intangible assets acquired | $ 20,100 |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jun. 25, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | ||||
Accounts receivable | $ 214 | |||
Prepaid expenses and other current assets | 209 | |||
Property, equipment and software, net and other current assets | 287 | |||
Goodwill | 13,804 | $ 376,103 | $ 369,337 | $ 365,740 |
Intangible assets, net | 25,400 | |||
Other non-current liability | (214) | |||
C&H Financial Services | ||||
Business Acquisition [Line Items] | ||||
Total purchase consideration | 39,700 | |||
C&H Financial Services | Merchant Portfolio Rights | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | $ 20,200 | |||
Useful life (in years) | 10 years | |||
C&H Financial Services | ISO Partner Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | $ 5,200 | |||
Useful life (in years) | 12 years |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 755,612 | $ 663,641 | $ 514,901 |
Other income, net | 1,736 | 589 | 202 |
SMB Payments | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 582,870 | 562,237 | 475,630 |
B2B Payments | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 40,726 | 18,890 | 17,138 |
Enterprise Payments | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 132,016 | 82,514 | 22,133 |
Merchant card fees | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 595,205 | 553,037 | 468,764 |
Merchant card fees | SMB Payments | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 563,878 | 549,646 | 466,819 |
Merchant card fees | B2B Payments | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 31,114 | 3,391 | 1,945 |
Merchant card fees | Enterprise Payments | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 213 | 0 | 0 |
Money transmission services | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 98,137 | 71,536 | 19,415 |
Money transmission services | SMB Payments | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 0 | 0 |
Money transmission services | B2B Payments | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 0 | 0 |
Money transmission services | Enterprise Payments | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 98,137 | 71,536 | 19,415 |
Outsourced services and other services | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 49,600 | 29,627 | 21,033 |
Other income, net | 33,400 | 7,500 | 700 |
Outsourced services and other services | SMB Payments | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 6,322 | 3,150 | 3,122 |
Outsourced services and other services | B2B Payments | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 9,612 | 15,499 | 15,193 |
Outsourced services and other services | Enterprise Payments | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 33,666 | 10,978 | 2,718 |
Equipment | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 12,670 | 9,441 | 5,689 |
Equipment | SMB Payments | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 12,670 | 9,441 | 5,689 |
Equipment | B2B Payments | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 0 | 0 |
Equipment | Enterprise Payments | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 0 | $ 0 | $ 0 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Contract liabilities | $ 600 | $ 200 | $ 1,300 |
Impairment losses on receivables or contract assets | $ 500 | $ 0 | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Remaining performance obligations, which are expected to be recognized as revenue, period (in months) | 12 months |
Settlement Assets and Custome_3
Settlement Assets and Customer/Subscriber Account Balances and Related Obligations - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Merchant reserves held by sponsor banks | $ 98,000 | $ 110,300 | |
Provision for merchant losses | 6,200 | 4,400 | $ 2,800 |
Settlement and customer/subscriber account obligations | 755,754 | 533,340 | |
Enterprise Payments | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Deposits, agency-owned accounts | 19,600 | 6,100 | |
Due To ACH Payees | B2B Payments | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Settlement and customer/subscriber account obligations | 1,200 | 4,100 | |
Due To ACH Payees | Bank | B2B Payments | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Settlement and customer/subscriber account obligations | $ 69,000 | $ 52,900 |
Settlement Assets and Custome_4
Settlement Assets and Customer/Subscriber Account Balances and Related Obligations - Schedule of Settlement Assets and Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Settlement Assets, net of estimated losses | ||
Settlement assets and customer/subscriber account balances | $ 756,475 | $ 532,018 |
Settlement and Customer/Subscriber Account Obligations | ||
Settlement and customer/subscriber account obligations | 755,754 | 533,340 |
Allowance for estimated losses | 6,600 | 5,000 |
Customer account obligations | ||
Settlement and Customer/Subscriber Account Obligations | ||
Settlement and customer/subscriber account obligations | 710,775 | 516,086 |
Subscriber account obligations | ||
Settlement and Customer/Subscriber Account Obligations | ||
Settlement and customer/subscriber account obligations | 33,921 | 15,488 |
Total customer/subscriber account obligations | ||
Settlement and Customer/Subscriber Account Obligations | ||
Settlement and customer/subscriber account obligations | 744,696 | 531,574 |
Due to customer payees | ||
Settlement and Customer/Subscriber Account Obligations | ||
Settlement and customer/subscriber account obligations | 11,058 | 1,766 |
Card settlements due from merchants | ||
Settlement Assets, net of estimated losses | ||
Settlement assets and customer/subscriber account balances | 2,705 | 444 |
Card settlements due from networks | ||
Settlement Assets, net of estimated losses | ||
Settlement assets and customer/subscriber account balances | 8,185 | 0 |
Cash and cash equivalents | ||
Settlement Assets, net of estimated losses | ||
Settlement assets and customer/subscriber account balances | $ 745,585 | $ 531,574 |
Notes Receivable - Narrative (D
Notes Receivable - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Receivables [Abstract] | ||
Notes receivable | $ 5,200 | $ 4,700 |
Notes receivable, average interest rate | 18.60% | 15.40% |
Notes receivable, allowance for credit loss | $ 0 | $ 0 |
Notes Receivables - Schedule of
Notes Receivables - Schedule of Principal Payments to be Received (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Receivables [Abstract] | |
2024 | $ 1,468 |
2025 | 1,365 |
2026 | 909 |
2027 | 1,031 |
2028 | 423 |
Thereafter | 0 |
Total | $ 5,196 |
Property, Equipment and Softw_3
Property, Equipment and Software - (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Property, equipment and software | $ 91,846 | $ 87,398 | |
Less: Accumulated depreciation | (56,442) | (58,409) | |
Property, equipment and software, net | 44,680 | 34,687 | |
Depreciation expense | 11,494 | 9,511 | $ 8,460 |
Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Property, equipment and software | 78,492 | 64,197 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, equipment and software | 10,377 | 13,302 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, equipment and software | 1,535 | 6,990 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property, equipment and software | 1,442 | 2,909 | |
Capital work in-progress | |||
Property, Plant and Equipment [Line Items] | |||
Capital work in-progress | $ 9,276 | $ 5,698 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 25, 2021 |
Goodwill [Line Items] | ||||
Goodwill | $ 376,103 | $ 369,337 | $ 365,740 | $ 13,804 |
SMB Payments | ||||
Goodwill [Line Items] | ||||
Goodwill | 124,139 | 124,625 | ||
Enterprise Payments | ||||
Goodwill [Line Items] | ||||
Goodwill | 244,712 | 244,712 | ||
Plastiq (B2B Payments) | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 7,252 | $ 0 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 369,337 | $ 365,740 |
Goodwill, purchase accounting adjustments | (486) | (392) |
Goodwill acquired from business combinations | 7,252 | 3,989 |
Goodwill, ending balance | $ 376,103 | $ 369,337 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Residual buyouts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Net carrying value | $ 135,164 | $ 132,325 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Accumulated Amortization | $ (306,753) | $ (250,890) | |
Total | $ 271,250 | ||
Weighted-average Useful Life | 9 years 8 months 12 days | 9 years 8 months 12 days | |
Indefinite-lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 580,103 | $ 539,684 | |
Net Carrying Value | 273,350 | 288,794 | |
Amortization expense | 56,901 | 61,170 | $ 41,237 |
Money Transmitter Licenses | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Money transmitter licenses | 2,100 | 2,100 | |
ISO and referral partner relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | 182,339 | 175,300 | |
Accumulated Amortization | (36,506) | (24,021) | |
Total | $ 145,833 | $ 151,279 | |
Weighted-average Useful Life | 14 years 8 months 12 days | 14 years 9 months 18 days | |
Residual buyouts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 135,164 | $ 132,325 | |
Accumulated Amortization | (92,699) | (76,316) | |
Total | $ 42,465 | $ 56,009 | |
Weighted-average Useful Life | 6 years 3 months 18 days | 6 years 7 months 6 days | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 109,017 | $ 96,000 | |
Accumulated Amortization | (92,781) | (83,298) | |
Total | $ 16,236 | $ 12,702 | |
Weighted-average Useful Life | 8 years 4 months 24 days | 8 years 2 months 12 days | |
Merchant portfolios | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 83,350 | $ 76,423 | |
Accumulated Amortization | (56,139) | (43,170) | |
Total | $ 27,211 | $ 33,253 | |
Weighted-average Useful Life | 6 years 6 months | 6 years 8 months 12 days | |
Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 57,639 | $ 50,963 | |
Accumulated Amortization | (22,712) | (18,566) | |
Total | $ 34,927 | $ 32,397 | |
Weighted-average Useful Life | 9 years | 8 years 4 months 24 days | |
Non-compete agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 3,390 | $ 3,390 | |
Accumulated Amortization | (3,390) | (3,390) | |
Total | $ 0 | $ 0 | |
Weighted-average Useful Life | 0 years | 0 years | |
Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 7,104 | $ 3,183 | |
Accumulated Amortization | (2,526) | (2,129) | |
Total | $ 4,578 | $ 1,054 | |
Weighted-average Useful Life | 11 years 8 months 12 days | 11 years 7 months 6 days |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Amortization Expense By Year (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 40,559 |
2025 | 34,480 |
2026 | 33,691 |
2027 | 31,427 |
2028 | 23,426 |
Thereafter | 107,667 |
Total | $ 271,250 |
Leases - Assets and Liabilities
Leases - Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Lease ROU Assets: | ||
Operating lease ROU Assets | $ 5,427 | $ 4,593 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other noncurrent assets | Other noncurrent assets |
Operating Lease Obligations: | ||
Operating lease obligations - current | $ 1,582 | $ 1,336 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accounts payable and accrued expenses | Accounts payable and accrued expenses |
Operating lease obligations - noncurrent | $ 4,592 | $ 4,110 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other noncurrent liabilities | Other noncurrent liabilities |
Total operating lease obligations | $ 6,174 | $ 5,446 |
Weighted-average remaining lease term in years | 3 years 9 months 18 days | 4 years 4 months 24 days |
Weighted-average discount rate | 5.90% | 6.90% |
Leases - Components of Lease Co
Leases - Components of Lease Costs and Payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Operating lease expense | $ 1,760 | $ 1,984 | $ 1,841 |
Operating cash flows from operating leases | $ 1,862 | $ 2,131 | $ 1,803 |
Leases - Schedule of Lease Matu
Leases - Schedule of Lease Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
2024 | $ 1,873 | |
2025 | 1,731 | |
2026 | 1,701 | |
2027 | 1,254 | |
2028 | 265 | |
Thereafter | 65 | |
Total future minimum lease payments | 6,889 | |
Amount representing interest | (715) | |
Total operating lease obligations | $ 6,174 | $ 5,446 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts Payable [Abstract] | ||
Accrued expenses | $ 12,621 | $ 17,742 |
Accrued card network fees | 14,320 | 14,243 |
Accrued compensation | 8,748 | 7,287 |
Contingent consideration, current portion | 5,951 | 6,079 |
Accounts payable | 11,003 | 6,513 |
Accounts payable and accrued expenses | $ 52,643 | $ 51,864 |
Debt Obligations - Schedule of
Debt Obligations - Schedule of Long-Term Debt (Details) - USD ($) | Dec. 31, 2023 | Oct. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Sep. 17, 2021 | Apr. 27, 2021 |
Debt Instrument [Line Items] | ||||||
Total debt obligations | $ 654,373,000 | $ 623,200,000 | ||||
Less: current portion of long-term debt | (6,712,000) | (6,200,000) | ||||
Less: unamortized debt discounts and deferred financing costs | (15,696,000) | (18,074,000) | ||||
Long-term debt, net of current portion, discounts and debt issuance costs | 631,965,000 | 598,926,000 | ||||
Credit Agreement | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Less: unamortized debt discounts and deferred financing costs | $ (300,000) | $ (800,000) | ||||
Credit Agreement | Line of Credit | Term Facility | ||||||
Debt Instrument [Line Items] | ||||||
Total debt obligations | $ 654,373,000 | $ 610,700,000 | ||||
Interest rate during period | 11.21% | 9.82% | ||||
Credit Agreement | Line of Credit | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Total debt obligations | $ 0 | $ 12,500,000 | ||||
Interest rate during period | 10.20% | 8.82% | ||||
Maximum borrowing capacity | $ 65,000,000 | $ 40,000,000 | $ 320,000,000 | $ 40,000,000 |
Debt Obligations - Rolling Matu
Debt Obligations - Rolling Maturities of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
2024 | $ 6,712 | |
2025 | 6,712 | |
2026 | 6,712 | |
2027 | 634,237 | |
Total debt obligations | 654,373 | $ 623,200 |
Credit Agreement | Line of Credit | Term Facility | ||
Debt Instrument [Line Items] | ||
2024 | 6,712 | |
2025 | 6,712 | |
2026 | 6,712 | |
2027 | 634,237 | |
Total debt obligations | 654,373 | 610,700 |
Credit Agreement | Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
Total debt obligations | $ 0 | $ 12,500 |
Debt Obligations - Narrative (D
Debt Obligations - Narrative (Details) | 6 Months Ended | 12 Months Ended | |||||||
Oct. 02, 2023 USD ($) | Oct. 01, 2023 USD ($) | Sep. 17, 2021 USD ($) | Apr. 27, 2021 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Oct. 31, 2023 USD ($) | |
Debt Instrument [Line Items] | |||||||||
Amortization of debt discount (premium) and debt issuance costs | $ 3,800,000 | $ 3,500,000 | $ 4,000,000 | ||||||
Deferred lender fees | 15,696,000 | 18,074,000 | |||||||
Capitalized modification costs | 400,000 | ||||||||
Debt issuance costs | 100,000 | ||||||||
Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, interest rate, LIBOR floor | 1% | ||||||||
Incremental prepayment penalty (as a percent) | 1% | ||||||||
Credit Agreement | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Deferred lender fees | $ 800,000 | $ 300,000 | |||||||
Credit Agreement | Line of Credit | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 320,000,000 | $ 40,000,000 | $ 65,000,000 | $ 40,000,000 | |||||
Increase in borrowing capacity | $ 50,000,000 | $ 30,000,000 | |||||||
Debt instrument, SOFR floor rate | 0.0100 | ||||||||
Interest rate during period | 10.20% | 8.82% | |||||||
Principal amortization payment | $ 1,600,000 | ||||||||
Amortization of debt issuance costs, quarterly payment | $ 1,700,000 | ||||||||
Unused commitment fee percentage | 0.50% | ||||||||
Maximum percentage of credit outstanding (as a percent) | 35% | ||||||||
Debt instrument, covenant, maximum net leverage ratio, period one | 6.50 | ||||||||
Debt instrument, covenant, maximum net leverage ratio, period two | 6 | ||||||||
Debt instrument, covenant, maximum net leverage ratio, period three | 5.50 | ||||||||
Credit Agreement | Line of Credit | Term Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate during period | 11.21% | 9.82% | |||||||
Credit Agreement | Term Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount of debt | $ 300,000,000 | ||||||||
Maximum borrowing capacity | $ 290,000,000 |
Debt Obligations - Interest Exp
Debt Obligations - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |||
Interest expense | $ 76,108 | $ 53,554 | $ 36,485 |
Accretion expense | $ 1,700 | $ 900 |
Redeemable Senior Preferred S_3
Redeemable Senior Preferred Stock and Warrants - Narrative (Details) | 12 Months Ended | |||||
Jun. 30, 2023 | Sep. 17, 2021 USD ($) shares | Apr. 27, 2021 USD ($) day $ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | |
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Redeemable senior preferred stock, shares issued (in shares) | shares | 150,000 | 225,000 | 225,000 | |||
Redeemable senior preferred stock par value (USD per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||
Warrants and rights, number of shares allowed to purchase (in shares) | shares | 1,803,841 | |||||
Purchase price | $ 150,000,000 | |||||
Discount | 5,000,000 | |||||
Issuance costs | $ 1,900,000 | 5,500,000 | ||||
Sale of stock, additional shares, period one (in shares) | shares | 75,000 | |||||
Maximum purchase price | $ 75,000,000 | |||||
Discount on maximum purchase price | 900,000 | |||||
Proceeds from issuance of temporary equity | 139,500,000 | |||||
Temporary equity carrying value | 131,400,000 | $ 258,605,000 | $ 235,579,000 | $ 210,158,000 | ||
Non-current assets | $ 3,300,000 | |||||
Ticketing fees | $ 700,000 | |||||
Dividend rate, floor (as a percent) | 1% | |||||
Dividend rate (as a percent) | 17.70% | 15.70% | ||||
Number of days after written notice (in days) | day | 30 | |||||
Number of days after redemption (in days) | day | 90 | |||||
Warrants, exercise price (in dollars per share) | $ / shares | $ 0.001 | $ 11.50 | ||||
Issuance Upon Acquisition Closing | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Sale of stock, additional shares, period one (in shares) | shares | 50,000 | |||||
Maximum purchase price | $ 50,000,000 | |||||
Discount on maximum purchase price | $ 600,000 | |||||
Period of agreement (in months) | 18 months | |||||
Issuance Upon Satisfaction Of Closing Conditions | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Sale of stock, additional shares, period one (in shares) | shares | 50,000 | |||||
Maximum purchase price | $ 50,000,000 | |||||
Discount on maximum purchase price | 600,000 | |||||
APIC | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Maximum purchase price | $ 11,400,000 | |||||
Base Rate | Dividend Rate | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Variable rate (as a percent) | 12% | |||||
Secured Overnight Financing Rate (SOFR) | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Temporary equity, adjustment rate | 0.0026 | |||||
Secured Overnight Financing Rate (SOFR) | Maximum | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Variable rate (as a percent) | 22.50% |
Redeemable Senior Preferred S_4
Redeemable Senior Preferred Stock and Warrants - Redemption Value (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 27, 2021 |
Temporary Equity [Abstract] | ||||
Redeemable senior preferred stock | $ 225,000 | $ 225,000 | ||
Accumulated unpaid dividend | 43,498 | 25,498 | ||
Dividend payable | 7,027 | 5,341 | ||
Redemption value | 275,525 | 255,839 | ||
Less: unamortized discounts and issuance costs | (16,920) | (20,260) | ||
Redeemable senior preferred stock, net of discounts and issuance costs | $ 258,605 | $ 235,579 | $ 210,158 | $ 131,400 |
Redeemable Senior Preferred S_5
Redeemable Senior Preferred Stock and Warrants - Reconciliation of Temporary Equity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Beginning balance (in shares) | 225,000 | 225,000 |
Beginning balance | $ 235,579 | $ 210,158 |
PIK dividends declared on redeemable senior preferred stock | 18,000 | 16,794 |
Accretion of redeemable senior preferred stock discount | 3,340 | 3,286 |
Cash portion of dividend payable and ticking fee for redeemable senior preferred stock(1) | $ 7,027 | $ 5,341 |
Ending balance (in shares) | 225,000 | 225,000 |
Ending balance | $ 258,605 | $ 235,579 |
Temporary Equity, Payment Of Cash Portion Of Dividend And Ticketing Fee Outstanding | $ (5,341) |
Redeemable Senior Preferred S_6
Redeemable Senior Preferred Stock and Warrants - Schedule of Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |||
Dividends paid in cash | $ 26,404 | $ 16,800 | |
Accumulated dividends accrued as part of the carrying value of redeemable senior preferred stock | 18,000 | 16,794 | |
Dividends declared | 44,404 | 33,594 | |
Temporary equity, dividends payable | 7,000 | 5,300 | |
Cumulative preferred dividends in arrears | $ 43,498 | $ 25,497 | |
Redeemable senior preferred stock, shares outstanding (in shares) | 225,000 | 225,000 | 225,000 |
Cumulative preferred dividends in arrears, per share (in dollars per share) | $ 193.3 | $ 113.3 |
Redeemable Senior Preferred S_7
Redeemable Senior Preferred Stock and Warrants - Redemption (Details) | Dec. 31, 2023 $ / shares |
Investments, Debt and Equity Securities [Abstract] | |
Liquidation percentage, period one (as a percent) | 100% |
Liquidation preference per share (USD per share) | $ 1,000 |
Additional liquidation percentage (as a percent) | 2% |
Liquidation percentage, period two (as a percent) | 102% |
Liquidation percentage, period three (as a percent) | 102% |
Liquidation percentage, period four (as a percent) | 100% |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
U.S. current income tax expense (benefit) | |||
Federal | $ 10,624 | $ 10,411 | $ (2,321) |
State and local | 3,187 | 2,546 | (379) |
Foreign | 738 | 349 | 1 |
Total current income tax expense (benefit) | 14,549 | 13,306 | (2,699) |
U.S. deferred income tax expense (benefit) | |||
Federal | (5,149) | (5,001) | (1,343) |
State and local | (712) | (2,970) | (1,213) |
Total deferred income tax (benefit) expense | (225) | 15 | (3) |
Total deferred income tax (benefit) expense | (6,086) | (7,956) | (2,559) |
Total income tax expense (benefit) | $ 8,463 | $ 5,350 | $ (5,258) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | |||
Effective income tax rate | 118.30% | 167.20% | 135.90% |
Deferred tax assets, valuation allowance | $ 19,421 | $ 15,462 | |
Unrecognized tax benefits that would impact effective tax rate | 0 | 100 | |
Possible decrease in uncertain tax benefits | 100 | ||
Tax Cuts and Jobs Act of 2017, interest deduction limitation | 78,100 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforward | $ 17,900 | $ 13,400 |
Income Taxes - Income Tax Benef
Income Taxes - Income Tax Benefit Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal statutory expense (benefit) | $ 1,502 | $ 672 | $ (813) |
Non-controlling interests | 0 | 0 | (3,024) |
State and local income taxes, net | 1,588 | 421 | (372) |
Foreign rate differential | 114 | 142 | 0 |
Excess tax benefits pursuant to ASU 2016-09 | 235 | 4 | (339) |
Valuation allowance changes | 3,958 | 4,957 | 1,120 |
Nondeductible items | 768 | 576 | 703 |
Transaction Costs | 0 | 0 | 2,338 |
Intangible assets | 0 | (1,226) | (4,110) |
Tax credits | 0 | (100) | (223) |
Other, net | 298 | (96) | (538) |
Total income tax expense (benefit) | $ 8,463 | $ 5,350 | $ (5,258) |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Deferred Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Tax Assets: | ||
Accruals and reserves | $ 1,392 | $ 1,510 |
Investments in partnership | 689 | 0 |
Intangible assets | 25,682 | 15,600 |
Net operating loss carryforwards | 934 | 749 |
Interest limitation carryforwards | 18,917 | 15,142 |
Other | 3,982 | 4,107 |
Gross deferred tax assets | 51,596 | 37,108 |
Valuation allowance | (19,421) | (15,462) |
Total deferred tax assets | 32,175 | 21,646 |
Deferred Tax Liabilities: | ||
Prepaid assets | (1,124) | (1,101) |
Investments in partnership | 0 | (41) |
Property and equipment | (8,518) | (4,057) |
Total deferred tax liabilities | (9,642) | (5,199) |
Net deferred tax assets | $ 22,533 | $ 16,447 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Beginning balance | $ 302 |
Additions based on tax positions related to the current year | 0 |
Additions based on positions of prior years | 0 |
Reductions for tax positions of prior years | 0 |
Reductions related to lapse of the applicable statutes of limitations | (148) |
Settlements | 0 |
Ending balance | $ 154 |
Stockholders' Deficit - Narrati
Stockholders' Deficit - Narrative (Details) $ / shares in Units, $ in Millions | Dec. 31, 2023 vote $ / shares shares | Dec. 31, 2022 shares | Jun. 30, 2022 USD ($) shares | Apr. 27, 2021 $ / shares shares | Jul. 24, 2018 $ / shares shares |
Class of Stock [Line Items] | |||||
Number of votes per share | vote | 1 | ||||
Preferred stock authorized (in shares) | 100,000,000 | 100,000,000 | |||
Preferred stock shares issued (in shares) | 0 | 0 | |||
Authorized amount to be repurchased (in shares) | 2,000,000 | ||||
Authorized amount to be repurchased | $ | $ 10 | ||||
Warrants outstanding (in shares) | 3,556,470 | ||||
Warrants, exercise price (in dollars per share) | $ / shares | $ 11.50 | $ 0.001 | |||
Warrants and rights, number of shares allowed to purchase (in shares) | 1,803,841 | ||||
MI Acquisitions Purchase Options | |||||
Class of Stock [Line Items] | |||||
Warrants, exercise price (in dollars per share) | $ / shares | $ 12 | ||||
Call-right, aggregate purchase price (in dollars per share) | $ / shares | $ 100 | ||||
Warrants and rights, number of shares allowed to purchase (in shares) | 300,000 |
Stockholders' Deficit - Share R
Stockholders' Deficit - Share Repurchase Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Number of shares repurchased (in shares) | 0 | 1,309,374 |
Average price paid per share (in dollars per share) | $ 0 | $ 4.42 |
Total Investment | $ 0 | $ 5,791 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - USD ($) | 12 Months Ended | ||||
Mar. 17, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Tax benefit recognized for equity-based compensation expense | $ 100,000 | $ 700,000 | $ 400,000 | ||
Equity-based compensation expense capitalized | $ 0 | ||||
2018 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum number of shares available for purchase (in shares) | 9,185,696 | 6,685,696 | |||
New shares authorized for issuance (in shares) | 2,500,000 | 2,500,000 | |||
Exercise of stock options (in shares) | 0 | 0 | |||
Stock option expense, not yet recognized | $ 4,200 | ||||
Restricted Stock Units (RSUs) - Service Based | 2018 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option expense, not yet recognized | $ 9,600,000 | ||||
Share-based awards, compensation cost recognition period (in years) | 2 years | ||||
Restricted Stock Units (RSUs) - Performance Based With Market Condition | 2018 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option expense, not yet recognized | $ 1,200,000 | ||||
Share-based awards, compensation cost recognition period (in years) | 2 years | ||||
Restricted Stock Units | 2018 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value | $ 1,300,000 | $ 900,000 | $ 3,200,000 |
Stock-based Compensation - Sche
Stock-based Compensation - Schedule of Equity-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | $ 6,768 | $ 6,228 | $ 3,213 |
ESPP compensation expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | 50 | 39 | 0 |
Incentive units compensation expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | 288 | 0 | 0 |
2018 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | 6,430 | 6,189 | 3,213 |
2018 Equity Incentive Plan | Restricted stock units compensation expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | 6,423 | 6,182 | 2,561 |
2018 Equity Incentive Plan | Stock options compensation expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | 7 | 7 | 327 |
2018 Equity Incentive Plan | Liability-classified compensation expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | $ 0 | $ 0 | $ 325 |
Stock-based Compensation - 2018
Stock-based Compensation - 2018 Equity Incentive Plan (Details) - 2018 Equity Incentive Plan - shares | 12 Months Ended | |||
Mar. 17, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options and RSUs, Nonvested, Number of Shares [Roll Forward] | ||||
Common stock available for issuance at beginning of the period (in shares) | 3,505,286 | 3,363,040 | 3,862,134 | |
New shares authorized for issuance (in shares) | 2,500,000 | 2,500,000 | ||
Stock option forfeited (in shares) | 129,380 | 221,733 | 50,589 | |
Stock options expired (in shares) | 53,870 | |||
RSU granted (in shares) | (641,578) | (3,223,949) | (711,987) | |
RSUs forfeited (in shares) | 263,600 | 353,196 | 1,957 | |
Shares withheld for taxes (in shares) | 291,110 | 291,266 | 106,477 | |
Common stock available for issuance at end of the period (in shares) | 3,547,798 | 3,505,286 | 3,363,040 |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock Options Activity (Details) - 2018 Equity Incentive Plan - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding, beginning balance (in shares) | 1,005,892 | ||
Forfeited (in shares) | (129,380) | ||
Outstanding, ending balance (in shares) | 876,512 | 1,005,892 | |
Exercisable (in shares) | 872,762 | ||
Weighted-average Exercise Price | |||
Outstanding, beginning balance (in dollars per share) | $ 6.88 | ||
Forfeited (in dollars per share) | 6.95 | ||
Outstanding, ending balance (in dollars per share) | 6.87 | $ 6.88 | |
Exercisable, weighted average exercise price (in dollars per share) | $ 6.89 | ||
Weighted-average Remaining Contractual Term | |||
Outstanding, weighted-average remaining contractual terms (in years) | 4 years 10 months 24 days | 5 years 8 months 12 days | |
Exercisable, weighted average remaining contractual term (in years) | 5 years | ||
Aggregate Intrinsic Value | |||
Aggregate intrinsic value | $ 16,000 | $ 42,000 | |
Exercisable, aggregate intrinsic value | $ 12,000 | ||
Stock options granted (in shares) | 0 | 0 | 0 |
Intrinsic value | $ 200,000 | ||
Exercise of stock options (in shares) | 0 | 0 | |
Stock option expense, not yet recognized | $ 4,200 | ||
Employee Stock Option | |||
Aggregate Intrinsic Value | |||
Share-based awards, compensation cost recognition period (in years) | 7 months 6 days |
Stock-based Compensation - Equi
Stock-based Compensation - Equity-classified Restricted Stock Units Activity (Details) - 2018 Equity Incentive Plan - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Underlying Common Shares | |||
Granted (in shares) | 641,578 | 3,223,949 | 711,987 |
Forfeited (in shares) | (263,600) | (353,196) | (1,957) |
Restricted Stock Units (RSUs) - Service Based | |||
Underlying Common Shares | |||
Unvested, beginning of period (in shares) | 2,582,400 | 879,250 | 596,401 |
Granted (in shares) | 641,578 | 2,878,948 | 647,512 |
Forfeited (in shares) | (226,100) | (353,196) | (1,957) |
Vested (in shares) | (1,028,782) | (822,602) | (362,706) |
Unvested, end of period (in shares) | 1,969,096 | 2,582,400 | 879,250 |
Weighted-average Grant Date Fair Value | |||
Unvested at beginning of period (in dollars per share) | $ 5.70 | $ 5.51 | $ 3.18 |
Granted (in dollars per share) | 3.81 | 6.14 | 6.63 |
Vested (in dollars per share) | 5.60 | 5.44 | 3.65 |
Forfeited (in dollars per share) | 5.44 | 6.04 | 7.92 |
Unvested at ending of period (in dollars per share) | $ 5.68 | $ 5.70 | $ 5.51 |
Restricted Stock Units (RSUs) - Service Based | Non-Employee Board Of Directors | |||
Underlying Common Shares | |||
Granted (in shares) | 143,605 | 228,347 | 55,689 |
Weighted-average Grant Date Fair Value | |||
Fair value of granted arrangement | $ 0.5 | $ 1.1 | $ 0.5 |
Restricted Stock Units (RSUs) - Performance Based With Market Condition | |||
Underlying Common Shares | |||
Unvested, beginning of period (in shares) | 99,453 | 99,453 | 139,598 |
Granted (in shares) | 345,000 | 64,366 | 64,475 |
Forfeited (in shares) | (37,500) | ||
Vested (in shares) | (116,958) | (64,366) | (104,620) |
Unvested, end of period (in shares) | 289,995 | 99,453 | 99,453 |
Weighted-average Grant Date Fair Value | |||
Unvested at beginning of period (in dollars per share) | $ 3.24 | $ 4.46 | $ 2.56 |
Granted (in dollars per share) | 5.31 | 5 | 6.90 |
Vested (in dollars per share) | 5.12 | 6.90 | 7.24 |
Forfeited (in dollars per share) | 5.31 | ||
Unvested at ending of period (in dollars per share) | $ 5.31 | $ 3.24 | $ 4.46 |
Stock-based Compensation - Empl
Stock-based Compensation - Employee Stock Purchase Plan Narrative (Details) | Apr. 16, 2021 hour shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum hours per week | hour | 20 |
Employee Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum number of shares available for purchase (in shares) | shares | 200,000 |
Minimum number of days employed to be eligible for plan | 30 days |
Purchase price (as a percent) | 95% |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Postemployment Benefits [Abstract] | |||
Company contributions to the plan | $ 2 | $ 1.7 | $ 1.2 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2022 | |
Other Commitments [Line Items] | |||
Purchase commitment term | 3 years | ||
Payments for purchase obligation | $ 1.5 | ||
Capital Commitments | |||
Other Commitments [Line Items] | |||
Capital commitments | $ 26 | $ 22 | |
Maximum number of days to compete capital contribution obligation | 10 days | ||
Payments to acquire interest in subsidiaries and affiliates | $ 11.8 | $ 6.9 | |
Third-Party Processing Fees | |||
Other Commitments [Line Items] | |||
Purchase obligation current year | 21.6 | ||
Purchase obligation, to be paid, year two | 21.6 | ||
Vendor Services | |||
Other Commitments [Line Items] | |||
Purchase obligation, to be paid, year two | $ 2.3 |
Commitments and Contingencies_2
Commitments and Contingencies - Contingent Consideration Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 8,079 | $ 10,686 |
Accretion of contingent consideration | 1,658 | $ 864 |
Fair Value, Liability, Recurring Basis, Still Held, Unrealized Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other noncurrent liabilities | |
Fair value adjustments due to changes in estimates of future payments | (19) | $ 1,195 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other noncurrent liabilities | |
Addition of contingent consideration due to resolution of contingency | 7,000 | |
Payment of contingent consideration | (9,909) | $ (4,666) |
Adjustment for receivable due to residual shortfall | (2,053) | |
Ending balance | 13,438 | $ 8,079 |
C&H Financial Services | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Addition of contingent consideration | 8,419 | |
Wholesale Payments, Inc., Residual Portfolio Rights | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Addition of contingent consideration | $ 263 |
Fair Value - Contingent Conside
Fair Value - Contingent Consideration Current and Non-Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration, current portion | $ 5,951 | $ 6,079 |
Total contingent consideration | 13,438 | 8,079 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration, current portion | 5,951 | 6,079 |
Contingent consideration, noncurrent portion | $ 7,487 | $ 2,000 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes receivable, fair value | $ 5.2 | $ 4.7 |
Senior Notes | Senior Term Loan, Maturing January 3, 2023 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | $ 651.9 | $ 606.1 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 12 Months Ended |
Dec. 31, 2023 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues: | |||
Revenues | $ 755,612 | $ 663,641 | $ 514,901 |
Depreciation and amortization: | |||
Depreciation and amortization of assets | 68,395 | 70,681 | 49,697 |
Operating income (loss): | |||
Income from operations | 81,524 | 56,165 | 33,093 |
SMB Payments | |||
Revenues: | |||
Revenues | 582,870 | 562,237 | 475,630 |
B2B Payments | |||
Revenues: | |||
Revenues | 40,726 | 18,890 | 17,138 |
Enterprise Payments | |||
Revenues: | |||
Revenues | 132,016 | 82,514 | 22,133 |
Operating Segments | |||
Revenues: | |||
Revenues | 755,612 | 663,641 | 514,901 |
Operating income (loss): | |||
Income from operations | 117,911 | 86,011 | 59,782 |
Operating Segments | SMB Payments | |||
Revenues: | |||
Revenues | 582,870 | 562,237 | 475,630 |
Depreciation and amortization: | |||
Depreciation and amortization of assets | 41,036 | 43,925 | 41,144 |
Operating income (loss): | |||
Income from operations | 46,482 | 54,866 | 52,884 |
Operating Segments | B2B Payments | |||
Revenues: | |||
Revenues | 40,726 | 18,890 | 17,138 |
Depreciation and amortization: | |||
Depreciation and amortization of assets | 2,221 | 744 | 294 |
Operating income (loss): | |||
Income from operations | (2,535) | 208 | 135 |
Operating Segments | Enterprise Payments | |||
Revenues: | |||
Revenues | 132,016 | 82,514 | 22,133 |
Depreciation and amortization: | |||
Depreciation and amortization of assets | 23,753 | 24,892 | 7,158 |
Operating income (loss): | |||
Income from operations | 73,964 | 30,937 | 6,763 |
Corporate | |||
Depreciation and amortization: | |||
Depreciation and amortization of assets | 1,385 | 1,120 | 1,101 |
Operating income (loss): | |||
Income from operations | $ (36,387) | $ (29,846) | $ (26,689) |
Segment Information - Reconcili
Segment Information - Reconciliation of Total Operating Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Total operating income of reportable segments | $ 81,524 | $ 56,165 | $ 33,093 |
Interest expense | (76,108) | (53,554) | (36,485) |
Debt modification and extinguishment costs | 0 | 0 | (8,322) |
Gain on sale of business | 0 | 0 | 7,643 |
Other income, net | 1,736 | 589 | 202 |
Income tax (expense) benefit | (8,463) | (5,350) | 5,258 |
Net income (loss) | (1,311) | (2,150) | 1,389 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total operating income of reportable segments | 117,911 | 86,011 | 59,782 |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Total operating income of reportable segments | $ (36,387) | $ (29,846) | $ (26,689) |
(Loss) Earnings per Common Sh_3
(Loss) Earnings per Common Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 27, 2021 | |
Numerator: | ||||
Net income (loss) | $ (1,311) | $ (2,150) | $ 1,389 | |
Less: Dividends and accretion attributable to redeemable senior preferred stockholders | (47,744) | (36,880) | (18,009) | |
Less: NCI preferred unit redemptions | 0 | 0 | (8,021) | |
Net (loss) income available to common stockholders | $ (49,055) | $ (39,030) | $ (24,641) | |
Basic: | ||||
Basic weighted-average common stock shares outstanding (in shares) | 78,333,000 | 78,233,000 | 71,902,000 | |
Basic earnings (loss) per common share (in dollars per share) | $ (0.63) | $ (0.50) | $ (0.34) | |
Diluted: | ||||
Diluted (in shares) | 78,333,000 | 78,233,000 | 71,902,000 | |
Diluted earnings (loss) per common share (in dollars per share) | $ (0.63) | $ (0.50) | $ (0.34) | |
Warrants and rights, number of shares allowed to purchase (in shares) | 1,803,841 |
(Loss) Earnings per Common Sh_4
(Loss) Earnings per Common Share - Schedule of Antidilutive Securities (Details) - $ / shares shares in Thousands | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 27, 2021 | Jul. 24, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Anti-dilutive securities that were excluded from EPS (in shares) | 2,080 | 7,694 | 6,040 | ||
Warrants, exercise price (in dollars per share) | $ 11.50 | $ 0.001 | |||
MI Acquisitions Purchase Options | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Warrants, exercise price (in dollars per share) | $ 12 | ||||
Outstanding warrants on common stock | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Anti-dilutive securities that were excluded from EPS (in shares) | 0 | 3,556 | 3,556 | ||
Restricted stock units compensation expense | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Anti-dilutive securities that were excluded from EPS (in shares) | 0 | 600 | 600 | ||
Restricted stock awards | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Anti-dilutive securities that were excluded from EPS (in shares) | 1,180 | 2,440 | 442 | ||
Liability-classified restricted stock units | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Anti-dilutive securities that were excluded from EPS (in shares) | 0 | 0 | 129 | ||
Outstanding stock option awards | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Anti-dilutive securities that were excluded from EPS (in shares) | 900 | 1,098 | 1,313 |
SUBSEQUENT EVENTS - Narrative (
SUBSEQUENT EVENTS - Narrative (Details) - USD ($) | 1 Months Ended | |
Jan. 30, 2024 | May 31, 2021 | |
Subsequent Event [Line Items] | ||
Convertible preferred units exchanged (in shares) | 1,428,358 | |
Convertible preferred stock converted, amount | $ 814,219 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Litigation settlement | $ 400,000 |