Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 03, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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, par value $0.001 | |
Trading Symbol | PRTH | |
Security Exchange Name | NASDAQ | |
Entity's Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 80,065,145 | |
Entity Central Index Key | 0001653558 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --12-31 |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 34,290 | $ 39,604 |
Restricted cash | 12,658 | 11,923 |
Accounts receivable, net of allowances of $5,536 and $5,289, respectively | 67,137 | 58,551 |
Prepaid expenses and other current assets | 13,699 | 13,273 |
Current portion of notes receivable, net of allowance of $0 and $0, respectively | 1,972 | 1,468 |
Settlement assets and customer/subscriber account balances | 752,590 | 756,475 |
Total current assets | 882,346 | 881,294 |
Notes receivable, less current portion | 4,549 | 3,728 |
Property, equipment and software, net | 48,120 | 44,680 |
Goodwill | 376,112 | 376,103 |
Intangible assets, net | 261,658 | 273,350 |
Deferred income taxes, net | 24,405 | 22,533 |
Other noncurrent assets | 12,767 | 13,649 |
Total assets | 1,609,957 | 1,615,337 |
Current liabilities: | ||
Accounts payable and accrued expenses | 49,329 | 52,643 |
Accrued residual commissions | 35,965 | 33,025 |
Customer deposits and advance payments | 4,090 | 3,934 |
Current portion of long-term debt | 6,712 | 6,712 |
Settlement and customer/subscriber account obligations | 753,850 | 755,754 |
Total current liabilities | 849,946 | 852,068 |
Long-term debt, net of current portion, discounts and debt issuance costs | 631,352 | 631,965 |
Other noncurrent liabilities | 16,704 | 18,763 |
Total liabilities | 1,498,002 | 1,502,796 |
Commitments and contingencies (Note 14) | ||
Redeemable senior preferred stock, net of discounts and issuance costs: | ||
Redeemable senior preferred stock, $0.001 par value; 250,000 shares authorized; 225,000 issued and outstanding at March 31, 2024 and December 31, 2023 | 264,240 | 258,605 |
Redeemable non-controlling interests in consolidated subsidiary | 5,837 | 0 |
Stockholders' deficit: | ||
Preferred stock, $0.001; 100,000,000 shares authorized; 0 issued or outstanding at March 31, 2024 and December 31, 2023 | 0 | 0 |
Common Stock, $0.000 par value; 1,000,000,000 shares authorized; 80,018,209 and 79,589,055 shares issued at March 31, 2024 and December 31, 2023, respectively; and 75,834,517 and 76,956,889 shares outstanding at March 31, 2024 and December 31, 2023, respectively | 76 | 77 |
Treasury stock at cost, 4,183,692 and 2,632,166 shares at March 31, 2024 and December 31, 2023, respectively | (18,491) | (12,815) |
Additional paid-in capital | 0 | 0 |
Accumulated other comprehensive loss | (42) | (29) |
Accumulated deficit | (141,412) | (134,951) |
Total stockholders' deficit attributable to stockholders of PRTH | (159,869) | (147,718) |
Non-controlling interests in consolidated subsidiaries | 1,747 | 1,654 |
Total stockholders' deficit | (158,122) | (146,064) |
Total liabilities, redeemable senior preferred stock, redeemable NCI and stockholders' deficit | $ 1,609,957 | $ 1,615,337 |
Unaudited Consolidated Balanc_2
Unaudited Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Accounts receivable allowance for credit loss | $ 5,536 | $ 5,289 |
Notes receivable, allowance for credit loss | $ 0 | $ 0 |
Temporary equity par value (in dollars per share) | $ 0.001 | $ 0.001 |
Temporary equity, shares authorized (in shares) | 250,000 | 250,000 |
Temporary equity, shares issued (in shares) | 225,000 | 225,000 |
Temporary equity, shares outstanding (in shares) | 225,000 | 225,000 |
Preferred stock par value (in dollars 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) | 80,018,209 | 79,589,055 |
Common stock, shares outstanding (in shares) | 75,834,517 | 76,956,889 |
Treasury stock (in shares) | 4,183,692 | 2,632,166 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Revenues | $ 205,719 | $ 185,028 |
Operating expenses | ||
Cost of revenue (excludes depreciation and amortization) | 129,298 | 121,966 |
Salary and employee benefits | 22,150 | 19,048 |
Depreciation and amortization | 15,253 | 18,048 |
Selling, general and administrative | 10,995 | 9,118 |
Total operating expenses | 177,696 | 168,180 |
Operating income | 28,023 | 16,848 |
Other (expense) income | ||
Interest expense | (20,880) | (17,699) |
Other income, net | 632 | 212 |
Total other expense, net | (20,248) | (17,487) |
Income (loss) before income taxes | 7,775 | (639) |
Income tax expense (benefit) | 2,582 | (133) |
Net income (loss) | 5,193 | (506) |
Less: Dividends and accretion attributable to redeemable senior preferred stockholders | (12,662) | (11,295) |
Less: Return on redeemable NCI in consolidated subsidiary | (581) | 0 |
Net loss attributable to common stockholders | (8,050) | (11,801) |
Other comprehensive loss | ||
Foreign currency translation adjustments | (13) | 24 |
Comprehensive loss | $ (8,063) | $ (11,777) |
Loss per common share: | ||
Basic (in dollars per share) | $ (0.10) | $ (0.15) |
Diluted (in dollars per share) | $ (0.10) | $ (0.15) |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 78,021 | 78,133 |
Diluted (in shares) | 78,021 | 78,133 |
Unaudited Consolidated Statem_2
Unaudited Consolidated Statements of Changes in Stockholders' Deficit and Non-Controlling Interest - USD ($) $ in Thousands | Total | Deficit Attributable to Stockholders | Common Stock | Treasury Stock | APIC | AOCI | Accumulated Deficit | NCIs |
Beginning balance, common stock (in shares) at Dec. 31, 2022 | 76,044,000 | |||||||
Beginning balance, treasury stock (in shares) at Dec. 31, 2022 | 2,341,000 | |||||||
Beginning balance at Dec. 31, 2022 | $ (102,786) | $ (104,041) | $ 76 | $ (11,559) | $ 9,650 | $ 0 | $ (102,208) | $ 1,255 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity-classified stock-based compensation | 1,936 | 1,936 | 1,936 | |||||
ESPP compensation and vesting of stock-based compensation (in shares) | 517,000 | |||||||
ESPP compensation and vesting of stock-based compensation | 37 | 37 | 37 | |||||
Shares withheld for taxes (in shares) | (157,000) | 157,000 | ||||||
Shares withheld for taxes | (777) | (777) | $ (777) | |||||
Dividends on redeemable senior preferred stock | (10,477) | (10,477) | (10,477) | |||||
Accretion of redeemable senior preferred stock | (818) | (818) | (818) | |||||
Adjustment to NCI | (403) | (403) | ||||||
Foreign currency translation adjustment | 24 | 24 | 24 | |||||
Net income (loss) | (506) | (506) | (506) | |||||
Ending balance, common stock (in shares) at Mar. 31, 2023 | 76,404,000 | |||||||
Ending balance, treasury stock (in shares) at Mar. 31, 2023 | 2,498,000 | |||||||
Ending balance at Mar. 31, 2023 | $ (113,770) | (114,622) | $ 76 | $ (12,336) | 328 | 24 | (102,714) | 852 |
Beginning balance, common stock (in shares) at Dec. 31, 2023 | 76,956,889 | 76,957,000 | ||||||
Beginning balance, treasury stock (in shares) at Dec. 31, 2023 | 2,632,166 | 2,632,000 | ||||||
Beginning balance at Dec. 31, 2023 | $ (146,064) | (147,718) | $ 77 | $ (12,815) | 0 | (29) | (134,951) | 1,654 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity-classified stock-based compensation | 1,540 | 1,540 | 1,540 | |||||
ESPP compensation and vesting of stock-based compensation (in shares) | 429,000 | |||||||
ESPP compensation and vesting of stock-based compensation | 49 | 49 | 49 | |||||
Shares withheld for taxes (in shares) | (123,000) | 123,000 | ||||||
Shares withheld for taxes | (421) | (421) | $ (421) | |||||
Exchange for PHOT redeemable NCI (in shares) | (1,428,000) | 1,428,000 | ||||||
Exchange for PHOT redeemable NCI | (5,837) | (5,837) | $ (1) | $ (5,255) | (581) | |||
Dividends on redeemable senior preferred stock | (11,821) | (11,821) | (11,821) | |||||
Accretion of redeemable senior preferred stock | (841) | (841) | (841) | |||||
Issuance of profit interests/common equity in subsidiaries | 93 | 93 | ||||||
Foreign currency translation adjustment | (13) | (13) | (13) | |||||
Reclassification of negative additional paid-in capital | 0 | 0 | 11,654 | (11,654) | ||||
Net income (loss) | $ 5,193 | 5,193 | 5,193 | |||||
Ending balance, common stock (in shares) at Mar. 31, 2024 | 75,834,517 | 75,835,000 | ||||||
Ending balance, treasury stock (in shares) at Mar. 31, 2024 | 4,183,692 | 4,183,000 | ||||||
Ending balance at Mar. 31, 2024 | $ (158,122) | $ (159,869) | $ 76 | $ (18,491) | $ 0 | $ (42) | $ (141,412) | $ 1,747 |
Unaudited Consolidated Statem_3
Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Cash flows from operating activities: | |||
Net income (loss) | $ 5,193 | $ (506) | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization of assets | 15,253 | 18,048 | |
Stock-based, ESPP and incentive units compensation | 1,633 | 1,936 | |
Amortization of debt issuance costs and discounts | 1,065 | 903 | |
Deferred income tax | (1,872) | (5,716) | |
Change in contingent consideration | 972 | 229 | |
Other non-cash items, net | (259) | 14 | |
Change in operating assets and liabilities: | |||
Accounts receivable | (8,339) | 81 | |
Prepaid expenses and other current assets | (425) | 481 | |
Income taxes (receivable) payable | 0 | 8,666 | |
Notes receivable | (266) | (163) | |
Accounts payable and other accrued liabilities | 1,590 | 3,916 | |
Customer deposits and advance payments | 157 | 250 | |
Other assets and liabilities, net | (1,395) | (462) | |
Net cash provided by operating activities | 13,307 | 27,677 | |
Cash flows from investing activities: | |||
Additions to property, equipment and software | (6,610) | (5,046) | |
Notes receivable, net | (1,059) | 178 | |
Acquisitions of assets and other investing activities | 0 | (2,715) | |
Net cash used in investing activities | (7,669) | (7,583) | |
Cash flows from financing activities: | |||
Repayments of long-term debt | (1,678) | (1,550) | |
Repayments of borrowings under revolving credit facility | 0 | (6,000) | |
Repurchases of Common Stock and shares withheld for taxes | (421) | (777) | |
Dividends paid to redeemable senior preferred stockholders | [1] | (7,027) | (11,435) |
Settlement and customer/subscriber accounts obligations, net | 1,918 | 79,258 | |
Payment of contingent consideration related to business combination | (3,071) | (1,959) | |
Net cash (used in) provided by financing activities | (10,279) | 57,537 | |
Net (decrease) increase in cash and cash equivalents, and restricted cash | (4,641) | 77,631 | |
Cash and cash equivalents and restricted cash at beginning of period | 796,223 | 560,610 | |
Cash and cash equivalents and restricted cash at end of period | 791,582 | 638,241 | |
Reconciliation of cash and cash equivalents, and restricted cash: | |||
Cash and cash equivalents | 34,290 | 15,882 | |
Restricted cash | 12,658 | 11,012 | |
Cash and cash equivalents included in settlement assets and customer/subscriber account balances (see Note 4) | 744,634 | 611,347 | |
Cash paid for income taxes, net of refunds | 791,582 | 638,241 | |
Supplemental cash flow information: | |||
Cash paid for interest | 18,436 | 16,330 | |
Non-cash investing and financing activities: | |||
Forfeiture of liability-classified award | 0 | 596 | |
Acquisition of intangible asset | 0 | 193 | |
Issuance of NCI | $ 93 | $ 0 | |
[1] The dividend payable for the quarter ended March 31, 2024, was paid on April 1, 2024. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Business, Consolidation and Presentation Priority Technology Holdings, Inc. is a holding company with no material operations of its own. Priority Technology Holdings, Inc. and its consolidated subsidiaries are referred to herein collectively as "Priority," "PRTH," the "Company," "we," "our" or "us," unless the context requires otherwise. Priority is a provider of merchant acquiring, integrated payment software, money transmission services and commercial payments solutions. The Company operates on a calendar year ending each December 31 and on four calendar quarters ending on March 31, June 30, September 30 and December 31 of each year. Results of operations reported for interim periods are not necessarily indicative of results for the entire year. The accompanying Unaudited Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. These Unaudited Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information pursuant to the rules and regulations of the SEC. The Consolidated Balance Sheet as of December 31, 2023 was derived from the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 but does not include all disclosures required by GAAP for annual financial statements. NCI represents the equity interest in certain consolidated entities in which the Company owns less than 100% of the profit interests. Changes in the Company's ownership interest while the Company retains its controlling interest are accounted for as equity transactions. As of March 31, 2024, there was no income or loss attributable to NCI in accordance with the applicable operating agreements. Redeemable NCI represents non-controlling ownership of certain redeemable preferred units in one of the Company's consolidated subsidiaries. These preferred units carry a compounded coupon rate of 6% per annum. The return on the redeemable NCI for the three months ended March 31, 2024, since the reissuance of these redeemable preferred units, is $0.6 million. Refer to Note 13. Related Party Transactions . In the opinion of the Company's management, all known adjustments necessary for a fair presentation of the Unaudited Consolidated Financial Statements for interim periods have been made. These adjustments consist of normal recurring accruals and estimates that affect the carrying amounts of assets and liabilities. These Unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. The results for the quarter ended March 31, 2024 include the results of the Plastiq business acquired through Chapter 11 bankruptcy process on July 31, 2023. Use of Estimates The preparation of Unaudited Consolidated Financial Statements in conformity with 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 Unaudited Consolidated Financial Statements and the reported amounts of revenues and expenses during the reported period. Actual results could materially differ from those estimates. 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). Reclassification In January 2024, the Company changed the grouping of certain business activity to conform to the way we internally manage and monitor the business. As a result, certain immaterial activity was reassigned from the SMB Payments segment to the Enterprise Payments segment effective January 1, 2024. Impact on prior year segment results were determined to be immaterial and have not been reclassified to reflect this change. 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 the potential effects this guidance will have on its disclosures. Profit Interest ASU 2024-01 In March 2024, the FASB issued ASU 2024-01, Profit Interest and Similar Awards ("ASU 2024-01"), to improve GAAP by adding an illustrative example to demonstrate how an entity should apply the scope in paragraph 718-10-15-3 to determine whether profit interest and similar awards should be accounted for in accordance with Topic 718, Compensation- Stock Compensation. This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is in the process of evaluating the potential effects this guidance will have on its disclosures. |
Acquisition
Acquisition | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition | Acquisition Plastiq Acquisition On May 23, 2023, PRTH’s subsidiary, Plastiq, Powered by Priority, LLC (the "acquiring entity"), entered into a stalking horse equity and asset purchase agreement (the "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 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 469 Settlement assets 8,277 Equipment, net 47 Goodwill (3) 7,261 Intangible assets (2) 30,460 Accounts payable and accrued expenses (1,881) 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 first quarter of 2024, the Company recorded an immaterial measurement period adjustment due to a pre-acquisition tax accrual which resulted in an adjustment to goodwill and accounts payable and accrued expenses. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Disaggregation of Revenues The following table presents a disaggregation of our consolidated revenues by type: Three Months Ended March 31, (in thousands) 2024 2023 Revenue Type: Merchant card fees $ 157,947 $ 149,644 Money transmission services 29,144 21,406 Outsourced services and other services 15,665 11,005 Equipment 2,963 2,973 Total revenues (1),(2) $ 205,719 $ 185,028 (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 $11.9 million and $5.0 million of interest income for the three months ended March 31, 2024 and 2023, respectively, is included in outsourced services and other services revenue in the table above. Approximately $0.6 million and $0.2 million of interest income for the three months ended March 31, 2024, and 2023, respectively, is included in other income, net on the Company's Unaudited Consolidated Statements of Operations and Comprehensive Loss and not reflected in the table above. The following table presents a disaggregation of our consolidated revenues by segment: Three months ended March 31, 2024 (in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services Equipment Total Segment SMB Payments $ 139,488 $ — $ 1,300 $ 2,963 $ 143,751 B2B Payments 18,289 — 2,826 — 21,115 Enterprise Payments 170 29,144 11,539 — 40,853 Total revenues $ 157,947 $ 29,144 $ 15,665 $ 2,963 $ 205,719 Three Months Ended March 31, 2023 (in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services Equipment Total Segment SMB Payments $ 148,688 $ — $ 3,272 $ 2,973 $ 154,933 B2B Payments 927 — 1,859 — 2,786 Enterprise Payments 29 21,406 5,874 — 27,309 Total revenues $ 149,644 $ 21,406 $ 11,005 $ 2,973 $ 185,028 Deferred revenues were not material for the three months ended March 31, 2024 and 2023. Contract Assets and Contract Liabilities Material contract assets and liabilities are presented net at the individual contract level in the Unaudited 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 and $0.6 million as of March 31, 2024 and December 31, 2023, 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 | 3 Months Ended |
Mar. 31, 2024 | |
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 are not liabilities of the Company. Therefore, neither is recognized in the Company's Unaudited Consolidated Balance Sheets. Member banks held merchant funds of $109.2 million and $98.0 million at March 31, 2024 and December 31, 2023, respectively. Exception items that become the liability of the Company are recorded as merchant losses, a component of cost of revenue in the Company's Unaudited 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 Unaudited 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 three months ended March 31, 2024 and 2023 were $4.7 million and $1.0 million, respectively. B2B Payments Segment In the Company's B2B Payments segment, the Company earns revenues 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 that 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, and the associated obligations are not liabilities of the Company. Therefore, neither is recognized in the Company's Unaudited Consolidated Balance Sheets. Bank-owned FBO accounts held funds of $79.1 million and $69.0 million at March 31, 2024 and December 31, 2023, respectively. Company-owned bank accounts held $1.6 million and $1.2 million at March 31, 2024 and December 31, 2023, respectively, which are included in restricted cash and settlement and customer/subscriber account obligations in the Company's Unaudited Consolidated Balance Sheets. Exception items that the Company is still attempting to collect from the customers through the funds settlement process are recognized as settlement assets and customer/subscriber account balances in the Company's Unaudited Consolidated Balance Sheets, with an offsetting reserve for those amounts the Company estimates it will not be able to recover. Expenses for these merchant losses for the three months ended March 31, 2024 were $0.2 million. There were no expenses for these merchant losses in 2023. 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 and transaction-based fees from licensed money transmission services. As part of its licensed money transmission services, the Company accepts deposits from consumers and subscribers which are held in bank accounts maintained by the Company on behalf of consumers 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 are 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 Unaudited 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 $46.2 million and $19.6 million at March 31, 2024 and December 31, 2023, respectively. The Company's consolidated settlement assets and customer/subscriber account balances and settlement and customer/subscriber account obligations were as follows: (in thousands) March 31, 2024 December 31, 2023 Settlement Assets, net of estimated losses (1) : Card settlements due from merchants $ 881 $ 2,705 Card settlements due from networks 6,338 8,185 Other settlement assets 737 889 Customer/subscriber account balances Cash and cash equivalents 744,634 744,696 Total settlement assets and customer/subscriber account balances $ 752,590 $ 756,475 Settlement and Customer/Subscriber Account Obligations: Customer account obligations $ 703,212 $ 710,775 Subscriber account obligations 41,422 33,921 Total customer/subscriber account obligations 744,634 744,696 Due to customers' payees (2) 9,216 11,058 Total settlement and customer/subscriber account obligations $ 753,850 $ 755,754 (1) Allowance for estimated losses was $9.2 million and $6.6 million as of March 31, 2024 and December 31, 2023, respectively (2) Card settlements due from networks includes $6.3 million and $8.2 million as of March 31, 2024 and December 31, 2023, respectively, related assets and remainder are included in restricted cash on our Unaudited Consolidated Balance Sheets. |
Notes Receivable
Notes Receivable | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Notes Receivable | Notes Receivable The Company had notes receivable of $6.5 million and $5.2 million as of March 31, 2024 and December 31, 2023, respectively, which are reported as current portion of notes receivable and notes receivable less current portion on the Company's Unaudited Consolidated Balance Sheets. The notes receivable carried weighted-average interest rates of 18.5% and 18.6% as of March 31, 2024 and December 31, 2023. 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 March 31, 2024 and December 31, 2023, the Company had no allowance for doubtful notes receivable. As of March 31, 2024, the principal payments for the Company's notes receivable are due as follows: (in thousands) Twelve months ending March 31, 2025 $ 1,972 2026 1,688 2027 1,522 2028 1,092 After 2028 247 Total $ 6,521 |
Property, Equipment and Softwar
Property, Equipment and Software | 3 Months Ended |
Mar. 31, 2024 | |
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) March 31, 2024 December 31, 2023 Computer software $ 85,933 $ 78,492 Equipment 10,712 10,377 Leasehold improvements 2,788 1,535 Furniture and fixtures 1,442 1,442 Property, equipment and software 100,875 91,846 Less: Accumulated depreciation (59,549) (56,442) Capital work in-progress 6,794 9,276 Property, equipment and software, net $ 48,120 $ 44,680 Three Months Ended March 31, (in thousands) 2024 2023 Depreciation expense $ 3,170 $ 2,757 Computer software represents purchased software and internally developed software that is used to provide the Company's services to its customers. Fully depreciated assets are retained in property, equipment and software, net, until removed from service. During the quarter ended March 31, 2024, certain fully depreciated assets were removed from service. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The Company's goodwill relates to the following reporting units: (in thousands) March 31, 2024 December 31, 2023 SMB Payments $ 124,139 $ 124,139 Enterprise Payments 244,712 244,712 Plastiq (B2B Payments) 7,261 7,252 Total $ 376,112 $ 376,103 The following table summarizes the changes in the carrying value of goodwill: (in thousands) Amount Balance at December 31, 2023 $ 376,103 Plastiq adjustment 9 Balance at March 31, 2024 $ 376,112 As of March 31, 2024, the Company is not aware of any triggering events for impairment that have occurred since the last annual impairment test. Other Intangible Assets Other intangible assets consisted of the following: March 31, 2024 Weighted-average (in thousands, except weighted-average data) Gross Carrying Value Accumulated Amortization Net Carrying Value Other intangible assets: ISO and referral partner relationships $ 182,339 $ (39,824) $ 142,515 14.6 Residual buyouts 135,164 (95,505) 39,659 6.3 Customer relationships 109,017 (93,459) 15,558 8.4 Merchant portfolios 83,350 (59,565) 23,785 6.5 Technology 57,639 (23,989) 33,650 8.7 Trade names 7,104 (2,713) 4,391 10.6 Non-compete agreements 3,390 (3,390) — 0.0 Money transmission licenses (1) 2,100 — 2,100 Total $ 580,103 $ (318,445) $ 261,658 9.6 (1) These assets have an indefinite useful life. December 31, 2023 Weighted-average (in thousands, except weighted-average data) 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 Trade names 7,104 (2,526) 4,578 11.7 Non-compete agreements 3,390 (3,390) — 0.0 Money transmission licenses (1) 2,100 — 2,100 Total $ 580,103 $ (306,753) $ 273,350 9.7 (1) These assets have an indefinite useful life. Three Months Ended March 31, (in thousands) 2024 2023 Amortization expense (1) $ 12,083 $ 15,291 (1) Included in amortization expense is $0.4 million and $0.1 million as of March 31, 2024 and 2023, respectively, related to the amortization of certain contract acquisition costs. |
Debt Obligations
Debt Obligations | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations Outstanding debt obligations consisted of the following: (in thousands) March 31, 2024 December 31, 2023 Term facility - matures April 27, 2027, interest rates of 11.19% and 11.21% at March 31, 2024 and December 31, 2023, respectively $ 652,695 $ 654,373 Revolving credit facility - $65.0 million line as of March 31, 2024 and December 31, 2023, matures April 27, 2026, interest rate of 10.20% at March 31, 2024 and December 31, 2023 — — Total debt obligations 652,695 654,373 Less: current portion of long-term debt (6,712) (6,712) Less: unamortized debt discounts and deferred financing costs (14,631) (15,696) Long-term debt, net $ 631,352 $ 631,965 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 discounts are included in long-term debt on the Company's Unaudited Consolidated Balance Sheets. Interest expense for outstanding debt, including fees for undrawn amounts and amortization of deferred financing costs and debt discounts was as follows: Three Months Ended March 31, (in thousands) 2024 2023 Interest expense (1),(2) $ 20,880 $ 17,699 (1) Included in interest expense is $1.0 million and $0.1 million related to the accretion of contingent consideration from acquisitions for the three months ended March 31, 2024, and 2023, respectively. (2) Interest expense included amortization of deferred financing costs and debt discounts of $1.1 million and $0.9 million for the three months ended March 31, 2024, and 2023, respectively. 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. 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 March 31, 2024, the Company was in compliance with the covenants in the Credit Agreement. |
Redeemable Senior Preferred Sto
Redeemable Senior Preferred Stock and Warrants | 3 Months Ended |
Mar. 31, 2024 | |
Temporary Equity [Abstract] | |
Redeemable Senior Preferred Stock and Warrants | Redeemable Senior Preferred Stock and Warrants 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 following table provides the redemption value of the redeemable senior preferred stock for the periods presented: (in thousands) March 31, 2024 December 31, 2023 Redeemable senior preferred stock $ 225,000 $ 225,000 Accumulated unpaid dividend 48,197 43,498 Dividend payable 7,122 7,027 Redemption value 280,319 275,525 Less: unamortized discounts and issuance costs (16,079) (16,920) Redeemable senior preferred stock, net of discounts and issuance costs: $ 264,240 $ 258,605 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 December 31, 2023 225 $ 258,605 Unpaid dividend on redeemable senior preferred stock — 4,699 Accretion of discounts and issuance costs — 841 Cash portion of dividend outstanding at March 31, 2024 — 7,122 Payment of cash portion of dividend outstanding at December 31, 2023 (7,027) March 31, 2024 225 $ 264,240 The dividend rate as of March 31, 2024 and December 31, 2023, was 17.6% and 17.7% respectively. The following table provides a summary of the dividends for the period presented: Three Months Ended March 31, (in thousands) 2024 2023 Dividends paid in cash (1) $ 7,122 $ 6,094 Accumulated dividends accrued as part of the carrying value of redeemable senior preferred stock 4,699 4,383 Dividends declared $ 11,821 $ 10,477 (1) Dividend payable for the three months ended March 31, 2024 was paid on April 1, 2024. Under the Amended Certificate of Designation, the dividend rate (capped at 22.50%) is 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%. 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. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's consolidated effective income tax rate for the three months ended March 31, 2024, was 33.2% compared to a consolidated effective income tax rate of 20.8% for the three months ended March 31, 2023. The effective rates differed from the statutory rate of 21.0% primarily due to an increase in the valuation allowance against certain business interest carryover deferred tax assets, and certain forecasted nondeductible expenses. Valuation Allowance for Deferred Income Tax Assets The Company considers all available positive and negative evidence to determine whether sufficient taxable income will be generated in the future to permit realization of the existing deferred tax assets. In accordance with the provisions of ASC 740, Income Taxes , the Company is required to provide a valuation allowance against deferred income tax assets when it is "more likely than not" that some portion or all of the deferred tax assets will not be realized. Based on management's assessment, as of March 31, 2024, the Company continues to record a full valuation allowance against non-deductible interest expense. The Company will continue to evaluate the realizability of the net deferred tax asset on a quarterly basis and, as a result, the valuation allowance may change in future periods. |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Stockholders' Deficit | Stockholders' Deficit 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 March 31, 2024 and December 31, 2023, the Company has not issued any shares of preferred stock. Share Repurchase Program In 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. There have been no shares repurchased under this plan since December 2022. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation Stock-based compensation expense was as follows: Three Months Ended March 31, (in thousands) 2024 2023 Stock options compensation expense $ 1,528 $ 1,922 Incentive units compensation expense 93 — ESPP compensation expense 12 14 Total $ 1,633 $ 1,936 Income tax benefit for stock-based compensation was immaterial for the three months ended March 31, 2024 and 2023. No stock-based compensation has been capitalized. 2018 Plan The Company's 2018 Plan initially provided for the issuance of up to 6,685,696 shares of the Company's Common Stock. 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. 2021 Stock Purchase Plan The 2021 Stock Purchase Plan provides for up to 200,000 shares to be purchased under the plan. Shares issued under the 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 on January 10, 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 offering period. Non-voting Incentive Units |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In February 2019, PHOT, a subsidiary of the Company, received a contribution of substantially all of the operating assets of eTab and Cumulus under asset contribution agreements. PHOT is a part of the Company's SMB reportable segment. These contributed assets were primarily composed of technology-related assets. Prior to these transactions, eTab was 80.0% owned by the Company's Chairman and Chief Executive Officer ("CEO"). No cash consideration was paid to the contributors of the eTab or Cumulus assets on the date of the transactions. As consideration for these contributed assets, the contributors were issued redeemable non-controlling preferred equity interests ("redeemable NCIs") in PHOT. Under these redeemable NCIs, the contributors were eligible to receive up to $4.5 million of profits earned by PHOT, plus a preferred yield (6.0% per year) on any undistributed preferred equity interest ("Total Preferred Equity Interest"). Once the total preferred equity interest is distributed to the holders, the redeemable NCIs cease to exist. The Company's CEO initially owned 83.3% of the redeemable NCIs, which ownership interest was subsequently reduced to 35.3% through the CEO's disposition of interests to others. In November 2020, the Company agreed with the contributors to an exchange of shares of common stock of the Company, or cash, for the remaining undistributed Total Preferred Equity Interests of $4.8 million. An exchange valuation for the Company's common stock was established as of November 12, 2020 at the prior 20-day volume weighted average price of $2.78 per share. The exchange was contingent upon receiving approval of the Company's lenders; therefore, the binding exchange agreements were not entered into until after lender approval was received in April 2021 in connection with the debt refinancing. In May 2021, the Company entered into exchange agreements and completed the exchange of 1,428,358 shares of common stock and $0.8 million of cash for the Total Preferred Equity Interests. The CEO received 605,623 shares of common stock of the Company in exchange for his 35.3% interest, and the Company's Chief Operating Officer (“COO”) received 413,081 shares of common stock of the Company in exchange for her 24.1% interest. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
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. Based on existing contracts in place, the Company is committed to pay minimum processing fees under these agreements of approximately $21.6 million in 2024 and $25.0 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. Capital Commitments The Company committed to capital contributions to fund the operations of certain subsidiaries totaling $26.0 million as March 31, 2024 and December 31, 2023. The Company is obligated to make the contributions within 10 business days of receiving notice for such contribution from the subsidiary. As of March 31, 2024 and December 31, 2023, the Company has contributed $13.4 million and $11.8 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 December 31, 2023 $ 13,438 Accretion of contingent consideration 972 Payment of contingent consideration (3,071) March 31, 2024 $ 11,339 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 internal and external 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 May 9, 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, in order 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 associations. As of March 31, 2024 , the Company's customer account balances of $703 million are maintained in FDIC insured eligible accounts with certain FIs (refer to Note 4. Settlement Assets and Customer/Subscriber Account Balances and Related Obligations ) A majority of the Company's cash and restricted cash is held in certain FIs, substantially all of which is in excess of FDIC limits. The Company does not believe it is exposed to any significant credit risk from these transactions. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Fair Value Measurements Contingent consideration related to the Company's business combinations is estimated based on the present value of a weighted payout probability at the measurement date, which 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 Unaudited Consolidated Balance Sheets and the noncurrent portion of contingent consideration is included in other noncurrent liabilities on the Company's Unaudited Consolidated Balance Sheets. Liabilities measured at fair value on a recurring basis consisted of the following: (in thousands) Fair Value Hierarchy March 31, 2024 December 31, 2023 Contingent consideration, current portion Level 3 $ 2,880 $ 5,951 Contingent consideration, noncurrent portion Level 3 $ 8,459 7,487 Total contingent consideration $ 11,339 $ 13,438 During the three months ended March 31, 2024, 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 and was approximately $6.5 million and $5.2 million at March 31, 2024 and December 31, 2023, 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 8. Debt Obligations ) are reflected in the Company's Unaudited 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 facility was estimated to be $651.9 million at March 31, 2024 and December 31, 2023 and was estimated using binding and non-binding quoted 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 | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company has 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. • 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. In January 2024, the Company changed the grouping of certain business activity to conform to the way we internally manage and monitor the business. As a result, certain immaterial activity was reassigned from the SMB Payments segment to the Enterprise Payments segment effective January 1, 2024. Impact on prior year segment results were determined to be immaterial and have not been reclassified to reflect this change. Information on reportable segments and reconciliations to consolidated revenues, consolidated depreciation and amortization, and consolidated operating income are as follows: (in thousands) Three Months Ended March 31, 2024 2023 Revenues: SMB Payments $ 143,751 $ 154,933 B2B Payments 21,115 2,786 Enterprise Payments 40,853 27,309 Consolidated revenues $ 205,719 $ 185,028 Depreciation and amortization: SMB Payments $ 8,802 $ 10,846 B2B Payments 1,640 125 Enterprise Payments 4,356 6,690 Corporate 455 387 Consolidated depreciation and amortization $ 15,253 $ 18,048 Operating income (loss): SMB Payments $ 12,383 $ 12,011 B2B Payments (793) (849) Enterprise Payments 25,547 12,663 Corporate (9,114) (6,977) Consolidated operating income $ 28,023 $ 16,848 A reconciliation of total operating income of reportable segments to the Company's net (loss) income is provided in the following table: (in thousands) Three Months Ended March 31, 2024 2023 Total operating income of reportable segments $ 37,137 $ 23,825 Corporate (9,114) (6,977) Interest expense (20,880) (17,699) Other income, net 632 212 Income tax (expense) benefit (2,582) 133 Net income (loss) $ 5,193 $ (506) |
Loss per Common Share
Loss per Common Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Loss per Common Share | Loss per Common Share The following tables set forth the computation of the Company's basic and diluted loss per common share: Three Months Ended March 31, (in thousands except per share amounts) 2024 2023 Numerator: Net income (loss) $ 5,193 $ (506) Less: Dividends and accretion attributable to redeemable senior preferred stockholders (12,662) (11,295) Less: Return on redeemable NCI in consolidated subsidiary (581) — Net loss attributable to common stockholders $ (8,050) $ (11,801) Denominator: Basic and diluted: Weighted-average common shares outstanding (1) 78,021 78,133 Loss per common share $ (0.10) $ (0.15) (1) The weighted-average common shares outstanding includes 1,803,841 warrants (refer to Note 9. Redeemable Senior Preferred Stock and Warrants ). For the three months ended March 31, 2024 and 2023, all potentially dilutive securities were anti-dilutive, so diluted net loss per share was equivalent to basic net loss per share. Potentially anti-dilutive securities that were excluded from the Company's loss per common share are as follows: Three Months Ended March 31, (in thousands) 2024 2023 Outstanding warrants on Common Stock (1) — 3,557 Outstanding options and warrants issued to adviser (2) — 600 Restricted stock awards (3) 1,078 2,245 Outstanding stock option awards (3) 864 952 Total 1,942 7,354 (1) The warrants were issued in 2018 and were exercisable at $11.50 per share. These warrants expired on August 24, 2023. (2) The warrants were issued in 2018 and were exercisable at $12.00 per share. These warrants expired on August 24, 2023. (3) Granted under the 2018 Plan. |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies - (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Consolidation | The accompanying Unaudited Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. |
Basis of Presentation | These Unaudited Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information pursuant to the rules and regulations of the SEC. The Consolidated Balance Sheet as of December 31, 2023 was derived from the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 but does not include all disclosures required by GAAP for annual financial statements. NCI represents the equity interest in certain consolidated entities in which the Company owns less than 100% of the profit interests. Changes in the Company's ownership interest while the Company retains its controlling interest are accounted for as equity transactions. As of March 31, 2024, there was no income or loss attributable to NCI in accordance with the applicable operating agreements. Redeemable NCI represents non-controlling ownership of certain redeemable preferred units in one of the Company's consolidated subsidiaries. These preferred units carry a compounded coupon rate of 6% per annum. The return on the redeemable NCI for the three months ended March 31, 2024, since the reissuance of these redeemable preferred units, is $0.6 million. Refer to Note 13. Related Party Transactions . In the opinion of the Company's management, all known adjustments necessary for a fair presentation of the Unaudited Consolidated Financial Statements for interim periods have been made. These adjustments consist of normal recurring accruals and estimates that affect the carrying amounts of assets and liabilities. These Unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. The results for the quarter ended March 31, 2024 include the results of the Plastiq business acquired through Chapter 11 bankruptcy process on July 31, 2023. |
Use of Estimates | The preparation of Unaudited Consolidated Financial Statements in conformity with 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 Unaudited Consolidated Financial Statements and the reported amounts of revenues and expenses during the reported period. Actual results could materially differ from those estimates. |
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). |
Reclassification | In January 2024, the Company changed the grouping of certain business activity to conform to the way we internally manage and monitor the business. As a result, certain immaterial activity was reassigned from the SMB Payments segment to the Enterprise Payments segment effective January 1, 2024. Impact on prior year segment results were determined to be immaterial and have not been reclassified to reflect this change. |
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 the potential effects this guidance will have on its disclosures. Profit Interest ASU 2024-01 In March 2024, the FASB issued ASU 2024-01, Profit Interest and Similar Awards ("ASU 2024-01"), to improve GAAP by adding an illustrative example to demonstrate how an entity should apply the scope in paragraph 718-10-15-3 to determine whether profit interest and similar awards should be accounted for in accordance with Topic 718, Compensation- Stock Compensation. This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is in the process of evaluating the potential effects this guidance will have on its disclosures. |
Acquisition (Tables)
Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 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 469 Settlement assets 8,277 Equipment, net 47 Goodwill (3) 7,261 Intangible assets (2) 30,460 Accounts payable and accrued expenses (1,881) 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 first quarter of 2024, the Company recorded an immaterial measurement period adjustment due to a pre-acquisition tax accrual which resulted in an adjustment to goodwill and accounts payable and accrued expenses. |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents a disaggregation of our consolidated revenues by type: Three Months Ended March 31, (in thousands) 2024 2023 Revenue Type: Merchant card fees $ 157,947 $ 149,644 Money transmission services 29,144 21,406 Outsourced services and other services 15,665 11,005 Equipment 2,963 2,973 Total revenues (1),(2) $ 205,719 $ 185,028 (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 $11.9 million and $5.0 million of interest income for the three months ended March 31, 2024 and 2023, respectively, is included in outsourced services and other services revenue in the table above. Approximately $0.6 million and $0.2 million of interest income for the three months ended March 31, 2024, and 2023, respectively, is included in other income, net on the Company's Unaudited Consolidated Statements of Operations and Comprehensive Loss and not reflected in the table above. The following table presents a disaggregation of our consolidated revenues by segment: Three months ended March 31, 2024 (in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services Equipment Total Segment SMB Payments $ 139,488 $ — $ 1,300 $ 2,963 $ 143,751 B2B Payments 18,289 — 2,826 — 21,115 Enterprise Payments 170 29,144 11,539 — 40,853 Total revenues $ 157,947 $ 29,144 $ 15,665 $ 2,963 $ 205,719 Three Months Ended March 31, 2023 (in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services Equipment Total Segment SMB Payments $ 148,688 $ — $ 3,272 $ 2,973 $ 154,933 B2B Payments 927 — 1,859 — 2,786 Enterprise Payments 29 21,406 5,874 — 27,309 Total revenues $ 149,644 $ 21,406 $ 11,005 $ 2,973 $ 185,028 |
Settlement Assets and Custome_2
Settlement Assets and Customer/Subscriber Account Balances and Related Obligations (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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) March 31, 2024 December 31, 2023 Settlement Assets, net of estimated losses (1) : Card settlements due from merchants $ 881 $ 2,705 Card settlements due from networks 6,338 8,185 Other settlement assets 737 889 Customer/subscriber account balances Cash and cash equivalents 744,634 744,696 Total settlement assets and customer/subscriber account balances $ 752,590 $ 756,475 Settlement and Customer/Subscriber Account Obligations: Customer account obligations $ 703,212 $ 710,775 Subscriber account obligations 41,422 33,921 Total customer/subscriber account obligations 744,634 744,696 Due to customers' payees (2) 9,216 11,058 Total settlement and customer/subscriber account obligations $ 753,850 $ 755,754 (1) Allowance for estimated losses was $9.2 million and $6.6 million as of March 31, 2024 and December 31, 2023, respectively (2) Card settlements due from networks includes $6.3 million and $8.2 million as of March 31, 2024 and December 31, 2023, respectively, related assets and remainder are included in restricted cash on our Unaudited Consolidated Balance Sheets. |
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) March 31, 2024 December 31, 2023 Settlement Assets, net of estimated losses (1) : Card settlements due from merchants $ 881 $ 2,705 Card settlements due from networks 6,338 8,185 Other settlement assets 737 889 Customer/subscriber account balances Cash and cash equivalents 744,634 744,696 Total settlement assets and customer/subscriber account balances $ 752,590 $ 756,475 Settlement and Customer/Subscriber Account Obligations: Customer account obligations $ 703,212 $ 710,775 Subscriber account obligations 41,422 33,921 Total customer/subscriber account obligations 744,634 744,696 Due to customers' payees (2) 9,216 11,058 Total settlement and customer/subscriber account obligations $ 753,850 $ 755,754 (1) Allowance for estimated losses was $9.2 million and $6.6 million as of March 31, 2024 and December 31, 2023, respectively (2) Card settlements due from networks includes $6.3 million and $8.2 million as of March 31, 2024 and December 31, 2023, respectively, related assets and remainder are included in restricted cash on our Unaudited Consolidated Balance Sheets. |
Notes Receivable (Tables)
Notes Receivable (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Financing Receivable, before Allowance for Credit Loss, Maturity | As of March 31, 2024, the principal payments for the Company's notes receivable are due as follows: (in thousands) Twelve months ending March 31, 2025 $ 1,972 2026 1,688 2027 1,522 2028 1,092 After 2028 247 Total $ 6,521 |
Property, Equipment and Softw_2
Property, Equipment and Software (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property, Equipment and Software | A summary of property, equipment and software, net was as follows: (in thousands) March 31, 2024 December 31, 2023 Computer software $ 85,933 $ 78,492 Equipment 10,712 10,377 Leasehold improvements 2,788 1,535 Furniture and fixtures 1,442 1,442 Property, equipment and software 100,875 91,846 Less: Accumulated depreciation (59,549) (56,442) Capital work in-progress 6,794 9,276 Property, equipment and software, net $ 48,120 $ 44,680 Three Months Ended March 31, (in thousands) 2024 2023 Depreciation expense $ 3,170 $ 2,757 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets - (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The Company's goodwill relates to the following reporting units: (in thousands) March 31, 2024 December 31, 2023 SMB Payments $ 124,139 $ 124,139 Enterprise Payments 244,712 244,712 Plastiq (B2B Payments) 7,261 7,252 Total $ 376,112 $ 376,103 The following table summarizes the changes in the carrying value of goodwill: (in thousands) Amount Balance at December 31, 2023 $ 376,103 Plastiq adjustment 9 Balance at March 31, 2024 $ 376,112 |
Schedule of Other Intangible Assets | Other intangible assets consisted of the following: March 31, 2024 Weighted-average (in thousands, except weighted-average data) Gross Carrying Value Accumulated Amortization Net Carrying Value Other intangible assets: ISO and referral partner relationships $ 182,339 $ (39,824) $ 142,515 14.6 Residual buyouts 135,164 (95,505) 39,659 6.3 Customer relationships 109,017 (93,459) 15,558 8.4 Merchant portfolios 83,350 (59,565) 23,785 6.5 Technology 57,639 (23,989) 33,650 8.7 Trade names 7,104 (2,713) 4,391 10.6 Non-compete agreements 3,390 (3,390) — 0.0 Money transmission licenses (1) 2,100 — 2,100 Total $ 580,103 $ (318,445) $ 261,658 9.6 (1) These assets have an indefinite useful life. December 31, 2023 Weighted-average (in thousands, except weighted-average data) 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 Trade names 7,104 (2,526) 4,578 11.7 Non-compete agreements 3,390 (3,390) — 0.0 Money transmission licenses (1) 2,100 — 2,100 Total $ 580,103 $ (306,753) $ 273,350 9.7 (1) These assets have an indefinite useful life. Three Months Ended March 31, (in thousands) 2024 2023 Amortization expense (1) $ 12,083 $ 15,291 (1) |
Debt Obligations (Tables)
Debt Obligations (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Outstanding debt obligations consisted of the following: (in thousands) March 31, 2024 December 31, 2023 Term facility - matures April 27, 2027, interest rates of 11.19% and 11.21% at March 31, 2024 and December 31, 2023, respectively $ 652,695 $ 654,373 Revolving credit facility - $65.0 million line as of March 31, 2024 and December 31, 2023, matures April 27, 2026, interest rate of 10.20% at March 31, 2024 and December 31, 2023 — — Total debt obligations 652,695 654,373 Less: current portion of long-term debt (6,712) (6,712) Less: unamortized debt discounts and deferred financing costs (14,631) (15,696) Long-term debt, net $ 631,352 $ 631,965 |
Schedule of Interest Expense for Outstanding Debt | Interest expense for outstanding debt, including fees for undrawn amounts and amortization of deferred financing costs and debt discounts was as follows: Three Months Ended March 31, (in thousands) 2024 2023 Interest expense (1),(2) $ 20,880 $ 17,699 (1) Included in interest expense is $1.0 million and $0.1 million related to the accretion of contingent consideration from acquisitions for the three months ended March 31, 2024, and 2023, respectively. (2) |
Redeemable Senior Preferred S_2
Redeemable Senior Preferred Stock and Warrants (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Temporary Equity [Abstract] | |
Temporary Equity | The following table provides the redemption value of the redeemable senior preferred stock for the periods presented: (in thousands) March 31, 2024 December 31, 2023 Redeemable senior preferred stock $ 225,000 $ 225,000 Accumulated unpaid dividend 48,197 43,498 Dividend payable 7,122 7,027 Redemption value 280,319 275,525 Less: unamortized discounts and issuance costs (16,079) (16,920) Redeemable senior preferred stock, net of discounts and issuance costs: $ 264,240 $ 258,605 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 December 31, 2023 225 $ 258,605 Unpaid dividend on redeemable senior preferred stock — 4,699 Accretion of discounts and issuance costs — 841 Cash portion of dividend outstanding at March 31, 2024 — 7,122 Payment of cash portion of dividend outstanding at December 31, 2023 (7,027) March 31, 2024 225 $ 264,240 The following table provides a summary of the dividends for the period presented: Three Months Ended March 31, (in thousands) 2024 2023 Dividends paid in cash (1) $ 7,122 $ 6,094 Accumulated dividends accrued as part of the carrying value of redeemable senior preferred stock 4,699 4,383 Dividends declared $ 11,821 $ 10,477 (1) Dividend payable for the three months ended March 31, 2024 was paid on April 1, 2024. |
Stock-based Compensation - (Tab
Stock-based Compensation - (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Equity-Based Compensation | Stock-based compensation expense was as follows: Three Months Ended March 31, (in thousands) 2024 2023 Stock options compensation expense $ 1,528 $ 1,922 Incentive units compensation expense 93 — ESPP compensation expense 12 14 Total $ 1,633 $ 1,936 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 December 31, 2023 $ 13,438 Accretion of contingent consideration 972 Payment of contingent consideration (3,071) March 31, 2024 $ 11,339 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | Liabilities measured at fair value on a recurring basis consisted of the following: (in thousands) Fair Value Hierarchy March 31, 2024 December 31, 2023 Contingent consideration, current portion Level 3 $ 2,880 $ 5,951 Contingent consideration, noncurrent portion Level 3 $ 8,459 7,487 Total contingent consideration $ 11,339 $ 13,438 |
Segment Information - (Tables)
Segment Information - (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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) Three Months Ended March 31, 2024 2023 Revenues: SMB Payments $ 143,751 $ 154,933 B2B Payments 21,115 2,786 Enterprise Payments 40,853 27,309 Consolidated revenues $ 205,719 $ 185,028 Depreciation and amortization: SMB Payments $ 8,802 $ 10,846 B2B Payments 1,640 125 Enterprise Payments 4,356 6,690 Corporate 455 387 Consolidated depreciation and amortization $ 15,253 $ 18,048 Operating income (loss): SMB Payments $ 12,383 $ 12,011 B2B Payments (793) (849) Enterprise Payments 25,547 12,663 Corporate (9,114) (6,977) Consolidated operating income $ 28,023 $ 16,848 |
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) Three Months Ended March 31, 2024 2023 Total operating income of reportable segments $ 37,137 $ 23,825 Corporate (9,114) (6,977) Interest expense (20,880) (17,699) Other income, net 632 212 Income tax (expense) benefit (2,582) 133 Net income (loss) $ 5,193 $ (506) |
Loss per Common Share - (Tables
Loss per Common Share - (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Common Share | The following tables set forth the computation of the Company's basic and diluted loss per common share: Three Months Ended March 31, (in thousands except per share amounts) 2024 2023 Numerator: Net income (loss) $ 5,193 $ (506) Less: Dividends and accretion attributable to redeemable senior preferred stockholders (12,662) (11,295) Less: Return on redeemable NCI in consolidated subsidiary (581) — Net loss attributable to common stockholders $ (8,050) $ (11,801) Denominator: Basic and diluted: Weighted-average common shares outstanding (1) 78,021 78,133 Loss per common share $ (0.10) $ (0.15) (1) The weighted-average common shares outstanding includes 1,803,841 warrants (refer to Note 9. Redeemable Senior Preferred Stock and Warrants |
Schedule of Antidilutive Securities | Potentially anti-dilutive securities that were excluded from the Company's loss per common share are as follows: Three Months Ended March 31, (in thousands) 2024 2023 Outstanding warrants on Common Stock (1) — 3,557 Outstanding options and warrants issued to adviser (2) — 600 Restricted stock awards (3) 1,078 2,245 Outstanding stock option awards (3) 864 952 Total 1,942 7,354 (1) The warrants were issued in 2018 and were exercisable at $11.50 per share. These warrants expired on August 24, 2023. (2) The warrants were issued in 2018 and were exercisable at $12.00 per share. These warrants expired on August 24, 2023. (3) Granted under the 2018 Plan. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Class of Stock [Line Items] | ||
Return on redeemable NCI in consolidated subsidiary | $ 581 | $ 0 |
Redeemable Preferred Stock | ||
Class of Stock [Line Items] | ||
Preferred units coupon rate | 6% |
Acquisition - Narrative (Detail
Acquisition - Narrative (Details) - Plastiq $ in Thousands | Jul. 31, 2023 USD ($) |
Business Acquisition [Line Items] | |
Consideration transferred | $ 37,000 |
Cash paid to acquire business | $ 28,500 |
Acquisition - Schedule of Plast
Acquisition - Schedule of Plastiq Business Acquisition (Details) - USD ($) $ in Thousands | Jul. 31, 2023 | Mar. 31, 2024 | Dec. 31, 2023 |
Recognized amounts of assets acquired and liabilities assumed: | |||
Goodwill | $ 376,112 | $ 376,103 | |
Plastiq | |||
Consideration: | |||
Cash | $ 28,500 | ||
Contingent consideration payments | 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 | 469 | ||
Settlement assets | 8,277 | ||
Equipment, net | 47 | ||
Goodwill | 7,261 | ||
Intangible assets | 30,460 | ||
Accounts payable and accrued expenses | (1,881) | ||
Customer deposits | (214) | ||
Settlement obligations | (8,279) | ||
Total purchase consideration | 36,971 | ||
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 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 205,719 | $ 185,028 |
Other income, net | 632 | 212 |
SMB Payments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 143,751 | 154,933 |
B2B Payments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 21,115 | 2,786 |
Enterprise Payments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 40,853 | 27,309 |
Merchant card fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 157,947 | 149,644 |
Merchant card fees | SMB Payments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 139,488 | 148,688 |
Merchant card fees | B2B Payments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 18,289 | 927 |
Merchant card fees | Enterprise Payments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 170 | 29 |
Money transmission services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 29,144 | 21,406 |
Money transmission services | SMB Payments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Money transmission services | B2B Payments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Money transmission services | Enterprise Payments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 29,144 | 21,406 |
Outsourced services and other services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 15,665 | 11,005 |
Other income, net | 11,900 | 5,000 |
Outsourced services and other services | SMB Payments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,300 | 3,272 |
Outsourced services and other services | B2B Payments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,826 | 1,859 |
Outsourced services and other services | Enterprise Payments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 11,539 | 5,874 |
Equipment | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,963 | 2,973 |
Equipment | SMB Payments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,963 | 2,973 |
Equipment | B2B Payments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Equipment | Enterprise Payments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 0 | $ 0 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Contract with customer, liabilities | $ 0.6 | $ 0.6 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | ||
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 | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Settlement and customer/subscriber account obligations | $ 753,850 | $ 755,754 | |
SMB Payments | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Merchant reserves held by sponsor banks | 109,200 | 98,000 | |
Provision for merchant losses | 4,700 | $ 1,000 | |
B2B Payments | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Provision for merchant losses | 200 | $ 0 | |
Enterprise Payments | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Deposits, agency-owned accounts | 46,200 | 19,600 | |
Due To ACH Payees | B2B Payments | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Settlement and customer/subscriber account obligations | 1,600 | 1,200 | |
Due To ACH Payees | Bank | B2B Payments | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Settlement and customer/subscriber account obligations | $ 79,100 | $ 69,000 |
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 | Mar. 31, 2024 | Dec. 31, 2023 |
Settlement Assets, net of estimated losses | ||
Settlement assets and customer/subscriber account balances | $ 752,590 | $ 756,475 |
Settlement and Customer/Subscriber Account Obligations: | ||
Settlement and customer/subscriber account obligations | 753,850 | 755,754 |
Allowance for settlement assets | 9,200 | 6,600 |
Total customer/subscriber account obligations | ||
Settlement and Customer/Subscriber Account Obligations: | ||
Settlement and customer/subscriber account obligations | 744,634 | 744,696 |
Customer account obligations | ||
Settlement and Customer/Subscriber Account Obligations: | ||
Settlement and customer/subscriber account obligations | 703,212 | 710,775 |
Subscriber account obligations | ||
Settlement and Customer/Subscriber Account Obligations: | ||
Settlement and customer/subscriber account obligations | 41,422 | 33,921 |
Due to customer payees | ||
Settlement and Customer/Subscriber Account Obligations: | ||
Settlement and customer/subscriber account obligations | 9,216 | 11,058 |
Cash and cash equivalents | ||
Settlement Assets, net of estimated losses | ||
Settlement assets and customer/subscriber account balances | 744,634 | 744,696 |
Card settlements due from merchants | ||
Settlement Assets, net of estimated losses | ||
Settlement assets and customer/subscriber account balances | 881 | 2,705 |
Card settlements due from networks | ||
Settlement Assets, net of estimated losses | ||
Settlement assets and customer/subscriber account balances | 6,338 | 8,185 |
Other settlement assets | ||
Settlement Assets, net of estimated losses | ||
Settlement assets and customer/subscriber account balances | $ 737 | $ 889 |
Notes Receivable - Narrative (D
Notes Receivable - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Receivables [Abstract] | ||
Notes receivable | $ 6,521,000 | $ 5,200,000 |
Notes receivable, average interest rate | 18.50% | 18.60% |
Notes receivable allowance for credit loss | $ 0 | $ 0 |
Notes Receivable - Schedule of
Notes Receivable - Schedule of Principal Payments to be Received (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Receivables [Abstract] | ||
2025 | $ 1,972 | |
2026 | 1,688 | |
2027 | 1,522 | |
2028 | 1,092 | |
After 2028 | 247 | |
Total | $ 6,521 | $ 5,200 |
Property, Equipment and Softw_3
Property, Equipment and Software (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Property, Plant and Equipment [Line Items] | |||
Property, equipment and software | $ 100,875 | $ 91,846 | |
Less: Accumulated depreciation | (59,549) | (56,442) | |
Property, equipment and software, net | 48,120 | 44,680 | |
Depreciation expense | 3,170 | $ 2,757 | |
Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Property, equipment and software | 85,933 | 78,492 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, equipment and software | 10,712 | 10,377 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, equipment and software | 2,788 | 1,535 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property, equipment and software | 1,442 | 1,442 | |
Capital work in-progress | |||
Property, Plant and Equipment [Line Items] | |||
Capital work in-progress | $ 6,794 | $ 9,276 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill Allocation (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Goodwill [Line Items] | ||
Goodwill | $ 376,112 | $ 376,103 |
SMB Payments | ||
Goodwill [Line Items] | ||
Goodwill | 124,139 | 124,139 |
Enterprise Payments | ||
Goodwill [Line Items] | ||
Goodwill | 244,712 | 244,712 |
Plastiq (B2B Payments) | ||
Goodwill [Line Items] | ||
Goodwill | $ 7,261 | $ 7,252 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 376,103 |
Plastiq adjustment | 9 |
Goodwill, ending balance | $ 376,112 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (318,445) | $ (306,753) |
Weighted-average Useful Life | 9 years 7 months 6 days | 9 years 8 months 12 days |
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 580,103 | $ 580,103 |
Net Carrying Value | 261,658 | 273,350 |
Money transmission licenses | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Money transmission licenses | 2,100 | 2,100 |
ISO and referral partner relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 182,339 | 182,339 |
Accumulated Amortization | (39,824) | (36,506) |
Net Carrying Value | $ 142,515 | $ 145,833 |
Weighted-average Useful Life | 14 years 7 months 6 days | 14 years 8 months 12 days |
Residual buyouts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 135,164 | $ 135,164 |
Accumulated Amortization | (95,505) | (92,699) |
Net Carrying Value | $ 39,659 | $ 42,465 |
Weighted-average Useful Life | 6 years 3 months 18 days | 6 years 3 months 18 days |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 109,017 | $ 109,017 |
Accumulated Amortization | (93,459) | (92,781) |
Net Carrying Value | $ 15,558 | $ 16,236 |
Weighted-average Useful Life | 8 years 4 months 24 days | 8 years 4 months 24 days |
Merchant portfolios | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 83,350 | $ 83,350 |
Accumulated Amortization | (59,565) | (56,139) |
Net Carrying Value | $ 23,785 | $ 27,211 |
Weighted-average Useful Life | 6 years 6 months | 6 years 6 months |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 57,639 | $ 57,639 |
Accumulated Amortization | (23,989) | (22,712) |
Net Carrying Value | $ 33,650 | $ 34,927 |
Weighted-average Useful Life | 8 years 8 months 12 days | 9 years |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 7,104 | $ 7,104 |
Accumulated Amortization | (2,713) | (2,526) |
Net Carrying Value | $ 4,391 | $ 4,578 |
Weighted-average Useful Life | 10 years 7 months 6 days | 11 years 8 months 12 days |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 3,390 | $ 3,390 |
Accumulated Amortization | (3,390) | (3,390) |
Net Carrying Value | $ 0 | $ 0 |
Weighted-average Useful Life | 0 years | 0 years |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 12,083 | $ 15,291 |
Amortization of acquisition costs | $ 400 | $ 100 |
Debt Obligations - Schedule of
Debt Obligations - Schedule of Long-Term Debt (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Total debt obligations | $ 652,695,000 | $ 654,373,000 |
Less: current portion of long-term debt | (6,712,000) | (6,712,000) |
Less: unamortized debt discounts and deferred financing costs | (14,631,000) | (15,696,000) |
Long-term debt, net | 631,352,000 | 631,965,000 |
Credit Agreement | Line of Credit | Secured Debt | ||
Debt Instrument [Line Items] | ||
Total debt obligations | $ 652,695,000 | $ 654,373,000 |
Interest rate during period | 11.19% | 11.21% |
Credit Agreement | Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total debt obligations | $ 0 | $ 0 |
Interest rate during period | 10.20% | 10.20% |
Maximum borrowing capacity | $ 65,000,000 | $ 65,000,000 |
Debt Obligations - Interest Exp
Debt Obligations - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Business Acquisition, Contingent Consideration [Line Items] | ||
Interest expense for outstanding debt | $ 20,880 | $ 17,699 |
Amortization of debt discount (premium) and debt issuance costs | 1,100 | 900 |
Prior Acquisitions | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Interest expense for outstanding debt | $ 1,000 | $ 100 |
Debt Obligations - Narrative (D
Debt Obligations - Narrative (Details) - Credit Agreement - Line of Credit - Revolving Credit Facility | 3 Months Ended |
Mar. 31, 2024 | |
Debt Instrument [Line Items] | |
Maximum percentage of credit outstanding (as a percent) | 35% |
Net leverage ratio, period one | 6.50 |
Net leverage ratio, period two | 6 |
Net leverage ratio, period three | 5.50 |
Redeemable Senior Preferred S_3
Redeemable Senior Preferred Stock and Warrants - Redemption Value (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Temporary Equity [Abstract] | ||
Redeemable senior preferred stock | $ 225,000 | $ 225,000 |
Accumulated unpaid dividend | 48,197 | 43,498 |
Dividend payable | 7,122 | 7,027 |
Redemption value | 280,319 | 275,525 |
Less: unamortized discounts and issuance costs | (16,079) | (16,920) |
Redeemable senior preferred stock, net of discounts and issuance costs: | $ 264,240 | $ 258,605 |
Redeemable Senior Preferred S_4
Redeemable Senior Preferred Stock and Warrants - Reconciliation of Temporary Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Beginning balance (in shares) | 225,000 | |
Beginning balance | $ 258,605 | |
Unpaid dividend on redeemable senior preferred stock | 4,699 | $ 4,383 |
Accretion of discounts and issuance costs | 841 | |
Cash portion of dividend outstanding at March 31, 2024 | 7,122 | |
Payment of cash portion of dividend outstanding at December 31, 2023 | $ (7,027) | |
Ending balance (in shares) | 225,000 | |
Ending balance | $ 264,240 |
Redeemable Senior Preferred S_5
Redeemable Senior Preferred Stock and Warrants - Narrative (Details) - $ / shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2021 | |
Debt and Equity Securities, FV-NI [Line Items] | ||||
Dividend rate (as a percent) | 17.60% | 17.70% | ||
Dividend rate, floor (as a percent) | 1% | |||
Warrants and rights, number of shares allowed to purchase (in shares) | 1,803,841 | 1,803,841 | 1,803,841 | |
Warrants, exercise price (in dollars per share) | $ 0.001 | |||
Base Rate | Dividend Rate 1 | ||||
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_6
Redeemable Senior Preferred Stock and Warrants - Schedule of Dividends (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Temporary Equity [Abstract] | ||
Dividends paid in cash | $ 7,122 | $ 6,094 |
Accumulated dividends accrued as part of the carrying value of redeemable senior preferred stock | 4,699 | 4,383 |
Dividends declared | $ 11,821 | $ 10,477 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 33.20% | 20.80% |
Stockholders' Deficit - Narrati
Stockholders' Deficit - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Equity [Abstract] | |||
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 |
Stock-based Compensation - Sche
Stock-based Compensation - Schedule of Equity-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 1,633 | $ 1,936 |
Stock options compensation expense | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 1,528 | 1,922 |
Incentive units compensation expense | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 93 | 0 |
ESPP compensation expense | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 12 | $ 14 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) | 3 Months Ended | 12 Months Ended | |||
Mar. 17, 2022 shares | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2021 hour shares | Dec. 31, 2018 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity-based compensation expense capitalized | $ | $ 0 | $ 0 | |||
Maximum hours per week | hour | 20 | ||||
2021 Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum number of shares available for purchase (in shares) | 200,000 | ||||
Minimum number of days employed to be eligible for plan | 30 days | ||||
Purchase price (as a percent) | 95% | ||||
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 | |||
Additional number of shares available for purchase (in shares) | 2,500,000 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | ||||
Nov. 12, 2020 | Jan. 31, 2019 | May 31, 2021 | Feb. 28, 2019 | Nov. 30, 2020 | |
Chief Executive Officer And Chairman | |||||
Related Party Transaction [Line Items] | |||||
Percentage ownership prior to transaction | 80% | ||||
Redemption value | $ 4.5 | ||||
Redeemable non-controlling interest preferred yield percent | 6% | ||||
Percentage of preferred stock owned | 83.30% | ||||
Percentage of ownership after transaction | 35.30% | ||||
Chief Executive Officer And Chairman | Share Exchange | |||||
Related Party Transaction [Line Items] | |||||
Number of shares issued in transaction (in shares) | 605,623 | ||||
Subsidiaries | |||||
Related Party Transaction [Line Items] | |||||
Redemption value | $ 4.8 | ||||
Subsidiaries | Share Exchange | |||||
Related Party Transaction [Line Items] | |||||
Volume of days | 20 days | ||||
Exercise price (in dollars per share) | $ 2.78 | ||||
Number of shares issued in transaction (in shares) | 1,428,358 | ||||
Purchase price | $ 0.8 | ||||
Chief Operating Officer | |||||
Related Party Transaction [Line Items] | |||||
Percentage of ownership after transaction | 24.10% | ||||
Chief Operating Officer | Share Exchange | |||||
Related Party Transaction [Line Items] | |||||
Number of shares issued in transaction (in shares) | 413,081 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | Jan. 01, 2022 | |
Other Commitments [Line Items] | |||
Purchase commitment, term | 3 years | ||
Payments for purchase obligation | $ 1,500,000 | ||
Damages sought per violation | $ 5,000 | ||
Settlement and customer/subscriber account obligations | 753,850,000 | 755,754,000 | |
Customer account obligations | |||
Other Commitments [Line Items] | |||
Settlement and customer/subscriber account obligations | $ 703,212,000 | 710,775,000 | |
Capital Commitments | |||
Other Commitments [Line Items] | |||
Other commitment | 26,000,000 | ||
Purchase commitment, maximum contractual term | 10 days | ||
Payments to acquire interest in subsidiaries and affiliates | $ 13,400,000 | 11,800,000 | |
Third-Party Processing Fees | |||
Other Commitments [Line Items] | |||
Purchase obligation current year | 21,600,000 | ||
Purchase obligation next year | $ 25,000,000 | ||
Vendor Services | |||
Other Commitments [Line Items] | |||
Purchase obligation next year | $ 2,300,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Contingent Consideration Rollforward (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 13,438 |
Accretion of contingent consideration | $ 972 |
Fair Value, Liability, Recurring Basis, Still Held, Unrealized Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other noncurrent liabilities |
Payment of contingent consideration | $ (3,071) |
Ending balance | $ 11,339 |
Fair Value - Contingent Conside
Fair Value - Contingent Consideration Current and Non-Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total contingent consideration | $ 11,339 | $ 13,438 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration, current portion | 2,880 | 5,951 |
Contingent consideration, noncurrent portion | $ 8,459 | $ 7,487 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes receivable, fair value | $ 6.5 | $ 5.2 |
Line of Credit | Credit Agreement | Secured Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | $ 651.9 | $ 651.9 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended |
Mar. 31, 2024 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 | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues: | ||
Revenues | $ 205,719 | $ 185,028 |
Depreciation and amortization: | ||
Depreciation and amortization | 15,253 | 18,048 |
Operating income (loss): | ||
Consolidated operating income | 28,023 | 16,848 |
Operating Segments | ||
Operating income (loss): | ||
Consolidated operating income | 37,137 | 23,825 |
Corporate | ||
Depreciation and amortization: | ||
Depreciation and amortization | 455 | 387 |
Operating income (loss): | ||
Consolidated operating income | (9,114) | (6,977) |
SMB Payments | ||
Revenues: | ||
Revenues | 143,751 | 154,933 |
SMB Payments | Operating Segments | ||
Depreciation and amortization: | ||
Depreciation and amortization | 8,802 | 10,846 |
Operating income (loss): | ||
Consolidated operating income | 12,383 | 12,011 |
B2B Payments | ||
Revenues: | ||
Revenues | 21,115 | 2,786 |
B2B Payments | Operating Segments | ||
Depreciation and amortization: | ||
Depreciation and amortization | 1,640 | 125 |
Operating income (loss): | ||
Consolidated operating income | (793) | (849) |
Enterprise Payments | ||
Revenues: | ||
Revenues | 40,853 | 27,309 |
Enterprise Payments | Operating Segments | ||
Depreciation and amortization: | ||
Depreciation and amortization | 4,356 | 6,690 |
Operating income (loss): | ||
Consolidated operating income | $ 25,547 | $ 12,663 |
Segment Information - Reconcili
Segment Information - Reconciliation of Total Operating Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information [Line Items] | ||
Operating income | $ 28,023 | $ 16,848 |
Interest expense | (20,880) | (17,699) |
Other income, net | 632 | 212 |
Income tax (expense) benefit | (2,582) | 133 |
Net income (loss) | 5,193 | (506) |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Operating income | 37,137 | 23,825 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Operating income | $ (9,114) | $ (6,977) |
Loss per Common Share - Schedul
Loss per Common Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2021 | |
Numerator: | |||
Net income (loss) | $ 5,193 | $ (506) | |
Less: Dividends and accretion attributable to redeemable senior preferred stockholders | (12,662) | (11,295) | |
Less: Return on redeemable NCI in consolidated subsidiary | (581) | 0 | |
Net loss attributable to common stockholders | $ (8,050) | $ (11,801) | |
Basic weighted-average common shares outstanding (in shares) | 78,021,000 | 78,133,000 | |
Diluted weighted-average common shares outstanding (in shares) | 78,021,000 | 78,133,000 | |
Basic loss per common share (in dollars per share) | $ (0.10) | $ (0.15) | |
Diluted loss per common share (in dollars per share) | $ (0.10) | $ (0.15) | |
Warrants and rights, number of shares allowed to purchase (in shares) | 1,803,841 | 1,803,841 | 1,803,841 |
Loss per Common Share - Sched_2
Loss per Common Share - Schedule of Antidilutive Securities (Details) - $ / shares shares in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities that were excluded from EPS (in shares) | 1,942 | 7,354 | |
Warrants, exercise price (in dollars per share) | $ 0.001 | ||
Warrant | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Warrants, exercise price (in dollars per share) | $ 11.50 | ||
Warrants Issued To Advisor | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Warrants, exercise price (in dollars per share) | $ 12 | ||
Warrant | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities that were excluded from EPS (in shares) | 0 | 3,557 | |
Outstanding options and warrants issued to adviser | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities that were excluded from EPS (in shares) | 0 | 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) | 1,078 | 2,245 | |
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) | 864 | 952 |