Priority Technology Holdings Inc (PRTH) 2024 Q2 法說會逐字稿

Good day, and welcome to the Priority Technology Holdings second-quarter 2024 earnings call. (Operator Instructions) Please note this event is being recorded.

美好的一天，歡迎參加優先科技控股公司 2024 年第二季財報電話會議。（操作員說明）請注意此事件正在被記錄。

I would now like to turn the conference over to Chris Kettmann. Please go ahead.

我現在想把會議交給克里斯凱特曼。請繼續。

Good morning and thank you for joining us. With me today are Tom Priore, Chairman and Chief Executive Officer of Priority Technology Holdings; and Tim O'Leary, Chief Financial Officer.

早安，感謝您加入我們。今天與我在一起的有 Priority Technology Holdings 董事長兼執行長 Tom Priore；歐利裡（Tim O'Leary），財務長。

Before giving our prepared remarks, I would like to remind all participants that our comments today will include forward-looking statements, which involve a number of risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. The company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. We provide a detailed discussion of the various risk factors in our SEC filings, and we encourage you to review these filings.

在發表我們準備好的演講之前，我想提醒所有參與者，我們今天的評論將包括前瞻性陳述，其中涉及許多風險和不確定性，可能導致實際結果與我們的前瞻性陳述有重大差異。本公司不承擔更新或修改前瞻性陳述的義務，無論是由於新資訊、未來事件或其他原因。我們在 SEC 文件中詳細討論了各種風險因素，並鼓勵您查看這些文件。

Additionally, we may refer to non-GAAP measures, including, but not limited to, EBITDA and adjusted EBITDA during the call. Reconciliations of our non-GAAP performance and liquidity measures to the appropriate GAAP measures can be found in our press release and SEC filings available in the Investors section of our website.

此外，我們可能會在電話會議期間提及非 GAAP 衡量標準，包括但不限於 EBITDA 和調整後 EBITDA。我們的非 GAAP 業績和流動性指標與相應 GAAP 指標的調整可以在我們網站投資者部分的新聞稿和 SEC 文件中找到。

With that, I would like to turn the call over to our Chairman and CEO, Tom Priore.

說到這裡，我想將電話轉給我們的董事長兼執行長 Tom Priore。

Thank you, Chris, and thanks to everyone for joining us for our second quarter 2024 earnings call. I'd like to start today by highlighting the positive trends we continue to see throughout Priority, and then Tim and I will provide an update on important developments within each segment and the broader enterprise.

謝謝克里斯，也謝謝大家參加我們的 2024 年第二季財報電話會議。我想從今天開始強調我們在整個 Priority 中繼續看到的積極趨勢，然後蒂姆和我將提供每個細分市場和更廣泛的企業內重要發展的最新情況。

As you saw in this morning's press release, in the second quarter, we again reported record financial results by capitalizing on our leading unified commerce platform that delivers elegant product solutions across our segments and dedicated customer service that is committed to our partners' success.

正如您在今天早上的新聞稿中看到的那樣，在第二季度，我們再次報告了創紀錄的財務業績，利用我們領先的統一商務平台，該平台在我們的各個細分市場提供優雅的產品解決方案，並致力於幫助我們的合作夥伴取得成功。

Building on the positive momentum we saw to start the year, we delivered exceptional results in SMB acquiring, B2B Payables and Enterprise Payments in the second quarter. Our unified commerce vision continues to resonate with customers, combining payments and banking functionality on a single platform, accelerated by the strength of our diverse business lines that were positioned to benefit from historically elevated interest rates and to perform in a variety of macroeconomic environments, including the one we're experiencing today.

基於我們年初看到的積極勢頭，我們在第二季度在中小企業收購、B2B 應付帳款和企業支付方面取得了出色的業績。我們統一的商務願景繼續與客戶產生共鳴，將支付和銀行功能結合在一個平台上，並透過我們多樣化的業務線的實力加速，這些業務線的定位是從歷史上高利率中受益，並在各種宏觀經濟環境中表現，包括我們今天所經歷的。

Total customer accounts operating on our commerce platform exceed $1 million as we process nearly $125 billion in annual transaction volume during the prior 12 months, while administrating over $1 billion in average daily deposits during the quarter.

在我們的商務平台上營運的客戶帳戶總數超過 100 萬美元，因為我們在過去 12 個月內處理了近 1,250 億美元的年度交易量，同時在本季度管理超過 10 億美元的日均存款。

Slide 4 highlights our consistent financial performance during the second quarter. Revenue of $219.9 million increased by over 21% from prior year. This led to a 22% increase in adjusted gross profit to $81.7 million and a 25% improvement in adjusted EBITDA to $51.6 million.

投影片 4 強調了我們第二季持續的財務表現。營收為 2.199 億美元，較上年增長 21% 以上。這導致調整後毛利增加 22% 至 8,170 萬美元，調整後 EBITDA 成長 25% 至 5,160 萬美元。

Adjusted gross profit margin of 37.2% increased 40 basis points from the prior year quarter, highlighting the strong and improving operating leverage of our organization. Encouragingly, our purely organic growth trends are equally strong, posting a top line revenue increase of 17.5% and bottom-line improvement in adjusted EBITDA of 25.7% during Q2, which Tim will speak to in greater detail during his remarks.

調整後毛利率為 37.2%，比去年同期成長 40 個基點，凸顯了我們組織強勁且不斷改善的營運槓桿。令人鼓舞的是，我們的純有機成長趨勢同樣強勁，第二季營收成長了 17.5%，調整後 EBITDA 的底線改善了 25.7%，蒂姆將在演講中更詳細地談到這一點。

As you can see from our strong Q2 results combined with the increase of our full year EBITDA guidance, we continue to expect that the robust growth and margin trends in our business channels will deliver full year revenue of $875 million to $883 million, an increase of approximately 16% over 2023, and generate full year adjusted EBITDA of $196 million to $200 million, a 16% to 19% increase over 2023.

正如您從我們強勁的第二季業績以及全年EBITDA 指引的增加中看到的那樣，我們繼續預計，我們業務通路的強勁成長和利潤率趨勢將帶來全年收入8.75 億美元至8.83 億美元，增幅為比 2023 年增長約 16%，全年調整後 EBITDA 為 1.96 億美元至 2 億美元，比 2023 年增長 16% 至 19%。

Our guidance is informed by our year-to-date performance highlighted on slide 5, reflecting 16% revenue growth to $425.6 million that drove 22% adjusted gross profit expansion to $158.2 million and 24% improvement in adjusted EBITDA to $97.9 million. Year-to-date organic growth is consistent with Q2 at 17% revenue growth and 27% EBITDA growth. Our growing partner base continues to see value in our product and technology offering, and our diverse sales channels remain consistent with strong performance.

我們的指引以投影片5 強調的年初至今的績效為基礎，反映出營收成長16% 至4.256 億美元，帶動調整後毛利成長22% 至1.582 億美元，調整後EBITDA 成長24% 至9,790 萬美元。年初至今的有機成長與第二季一致，營收成長 17%，EBITDA 成長 27%。我們不斷壯大的合作夥伴群體繼續看到我們的產品和技術提供的價值，並且我們多樣化的銷售管道保持了強勁的業績。

Now for those of you who are new to the company, slide 6 highlights the market orientation of our proprietary unified commerce platform, it's purpose built to collect, store, lend and send money, combining elegant payments and banking functionality to monetize the commerce networks we serve.

現在，對於剛接觸公司的人來說，幻燈片6 重點介紹了我們專有的統一商務平台的市場定位，它的目的是收集、存儲、借貸和匯款，結合優雅的支付和銀行功能，使我們的商務網路貨幣化。

Our customers and current market conditions reinforce our belief that systems facilitating payments and banking solutions to distribute funds in multiparty environments will be critical as businesses put greater demands on software and payment solution providers to accelerate cash flow and optimize working capital.

我們的客戶和當前的市場狀況強化了我們的信念，即促進支付的系統和在多方環境中分配資金的銀行解決方案將至關重要，因為企業對軟體和支付解決方案提供者提出了更高的要求，以加速現金流和優化營運資金。

We remain committed to meeting our customers where they are by refining the experience for our partners to make working with Priority seamless and easy. Our financial performance demonstrates that partners consistently choose the unified commerce applications in acquiring payables and banking that best fit their businesses to accelerate cash flow and optimize their working capital.

我們仍然致力於透過改善合作夥伴的體驗來滿足客戶的需求，使與 Priority 的合作變得無縫且輕鬆。我們的財務業績表明，合作夥伴在收購應付帳款和銀行業務方面始終選擇最適合其業務的統一商務應用程序，以加速現金流並優化其營運資金。

We are incredibly focused on the continued innovation of our SaaS payments and banking suite of services that are powered by Priority's accelerated commerce engine and are eager to meet the evolving needs of our growing portfolio of customers and enterprise partners.

我們非常專注於 SaaS 支付和銀行服務套件的持續創新，這些服務由 Priority 的加速商務引擎提供支持，並渴望滿足我們不斷增長的客戶和企業合作夥伴組合不斷變化的需求。

At this point, I'd like to hand it over to Tim, who will provide further insights into our segment-level performance during the quarter along with current trends in each that factored into our confidence to deliver on our strong guidance for the full year 2024.

在這一點上，我想將其交給蒂姆，他將進一步深入了解我們本季度的部門級業績以及每個部門的當前趨勢，這些趨勢使我們有信心實現全年的強有力指導2024 年。

Thank you, Tom, and good morning, everyone. As I review the second quarter results, please refer to the supplemental slides or the MD&A for further details. Our MD&A is included in the Form 10-Q that was filed with the SEC this morning and provides a discussion of our comparative second quarter results. A link to that filing can also be found on our website.

謝謝你，湯姆，大家早安。當我回顧第二季業績時，請參閱補充幻燈片或 MD&A 以了解更多詳細資訊。我們的 MD&A 包含在今天早上向 SEC 提交的 10-Q 表中，並討論了我們第二季度的比較結果。該文件的連結也可以在我們的網站上找到。

Consistent with the first quarter, our strong financial performance in the second quarter was driven by the diverse and countercyclical mix of our business segments along with continued growth in our higher margin operating segments. The highly recurring nature of our business model also remains strong with almost 59% of adjusted gross profit in Q2 coming from monthly fees or revenues that are not dependent on transactions or bankcard volume.

與第一季一致，我們第二季強勁的財務表現是由業務部門的多元化和反週期組合以及利潤率較高的營運部門的持續成長所推動的。我們業務模式的高度經常性質也依然強勁，第二季調整後毛利的近 59% 來自不依賴交易或銀行卡交易量的月費或收入。

I'd also highlight our organic growth rates which continue to outperform compared to many industry competitors. If you adjust for the impact of Plastiq, which was not part of our financial results in Q2 of last year as well as for the impact of the large reseller that we've discussed on prior calls, Priority had year-over-year organic growth in Q2 of 17.5% for revenue 18.9% for adjusted gross profit and 25.7% for adjusted EBITDA.

我還要強調我們的有機成長率，與許多行業競爭對手相比，我們的有機成長率持續表現出色。如果您調整 Plastiq 的影響（這不屬於我們去年第二季度的財務業績）以及我們在之前的電話會議中討論過的大型經銷商的​​影響，那麼 Priority 的同比有機增長第二季度收入為17.5%，調整後毛利為18.9%，調整後EBITDA 為25.7%。

When you combine those industry-leading organic growth rates with a scaled business that produces a high level of recurring gross profit, you can easily understand why we're excited about our business and the value that we believe has been built at Priority.

當您將這些行業領先的有機成長率與產生高水平經常性毛利的規模化業務結合起來時，您就可以輕鬆理解為什麼我們對我們的業務以及我們認為在 Priority 建立的價值感到興奮。

Before moving to the segment-level financial results, I want to take a minute to discuss a change in our reporting metrics for this quarter and going forward. Historically, we provided revenue, adjusted gross profit and operating income at the segment level.

在討論部門級財務表現之前，我想花一點時間討論本季及未來報告指標的變化。從歷史上看，我們在部門層面提供收入、調整後的毛利和營業收入。

As you'll note in today's presentation, we still provide revenue and adjusted gross profit, but now report adjusted EBITDA at the segment level instead of operating income. We've made this change because the business continues to evolve and we want to ensure that the greatest possible transparency into our core results.

正如您在今天的演示中註意到的那樣，我們仍然提供收入和調整後的毛利，但現在報告部門級別的調整後 EBITDA，而不是營業收入。我們做出這項改變是因為業務不斷發展，我們希望確保我們的核心結果具有最大程度的透明度。

In that regard, as we continue to implement a shared services operating model in our business along with managing a single unified commerce engine across our payment's infrastructure, the allocation of certain operating and technology costs becomes less identifiable.

在這方面，隨著我們繼續在業務中實施共享服務營運模式，並在我們的支付基礎設施中管理單一統一的商務引擎，某些營運和技術成本的分配變得越來越難以識別。

So we will report those costs in Corporate with only direct costs for each segment having an impact on its adjusted EBITDA results. We've included reconciliations in the earnings release to help you compare current quarter results to historical quarterly results on a comparable basis.

因此，我們將在企業中報告這些成本，僅每個部門的直接成本對其調整後的 EBITDA 結果產生影響。我們在收益發布中包含了調節表，以幫助您在可比較的基礎上將當前季度業績與歷史季度業績進行比較。

With that explanation, I'll now move to the segment level results for the SMB segment on slide 8. SMB generated Q2 revenue of $155.1 million, which is $7.2 million or 4.8% higher than the prior year second quarter. As discussed on prior calls, a large reselling partner started to diversify their processing activity in Q2 of 2023 and concluded that effort in Q4 of last year.

有了這個解釋，我現在將轉向幻燈片 8 上 SMB 細分市場的細分級別結果。SMB 第二季營收為 1.551 億美元，比去年第二季增加 720 萬美元，成長 4.8%。正如先前電話會議中所討論的，一家大型轉售合作夥伴於 2023 年第二季度開始實現加工活動多元化，並於去年第四季度完成了這項努力。

The year-over-year impact of that ended this quarter and was just over $8 million of revenue, which is down from the $21 million headwind that we saw in Q1. We do not expect future impacts from this reseller on a comparative basis. And excluding its impact this quarter, the SMB business experienced a 12.2% organic revenue growth on a year-over-year basis.

其年比影響在本季結束，營收略高於 800 萬美元，低於我們在第一季看到的 2,100 萬美元的逆風。相較之下，我們預計該經銷商未來不會產生影響。排除本季的影響，中小企業業務的有機收入年增 12.2%。

Bankcard dollar volume in SMB was $15.8 billion for the quarter, which increased 4.6% from $15.1 billion in the comparable quarter last year. As an additional point to emphasize the strength of organic sales in the SMB segment, if you adjust for the impact of the aforementioned reseller, bankcard dollar volume increased 9% in the quarter compared to the prior year.

本季中小企業銀行卡金額為 158 億美元，比去年同期的 151 億美元成長 4.6%。作為強調中小企業領域有機銷售實力的另一點，如果考慮上述經銷商的影響，本季銀行卡美元交易量與前一年相比增長了 9%。

From a merchant standpoint, we averaged 179,000 accounts during the quarter, higher than 177,000 average in Q1 of this year while new monthly boards averaged 3,900 during the quarter, which is consistent with the comparable quarter of last year. Adjusted gross profit in SMB for the second quarter was $35.6 million, which is up 1% from last year's second quarter but a $3.7 million or 11.8% increase from Q1 of this year. Gross margins of 23% in the quarter were down from 23.9% in last year's second quarter, but up over 80 basis points sequentially from Q1 of this year.

從商家的角度來看，我們本季平均有 179,000 個帳戶，高於今年第一季的 177,000 個平均帳戶，而本季新月度董事會平均有 3,900 個帳戶，與去年同期一致。中小企業第二季調整後毛利為 3,560 萬美元，比去年第二季成長 1%，但比今年第一季成長 370 萬美元，成長 11.8%。本季毛利率為 23%，低於去年第二季的 23.9%，但比今年第一季連續成長了 80 個基點以上。

Lastly for SMB, quarterly adjusted EBITDA of $28.6 million was up slightly from the prior year second quarter and is up $3.6 million or 14.3% sequentially from Q1 of this year as we continue to manage operating expenses within our business, which results in a strong flow through of incremental adjusted gross profit to adjusted EBITDA.

最後，對於中小型企業來說，季度調整後EBITDA 為2860 萬美元，比去年第二季度略有增長，比今年第一季連續增長360 萬美元，即14.3%，因為我們繼續管理業務內的運營費用，這導致了強勁的流量通過增量調整後的毛利調整後的 EBITDA。

Moving to B2B. Revenue of $21.9 million was an increase of $18.9 million from the prior year. Plastiq, which joined Priority in Q3 of last year contributed $17.8 million of the increase during the quarter while CPX grew by $1.4 million or 49% on a year-over-year basis. Those increases were partially offset by a $200,000 reduction in the remainder of the B2B business.

轉向 B2B。營收為 2,190 萬美元，比上年增加 1,890 萬美元。去年第三季加入 Priority 的 Plastiq 為該季度的成長貢獻了 1,780 萬美元，而 CPX 年增了 140 萬美元，即 49%。這些成長被 B2B 業務剩餘部分 20 萬美元的減少部分抵消。

Adjusted gross profit in B2B increased to $5.6 million from $2.3 million in Q2 of as a result of the Plastiq acquisition combined with over 25% growth in gross profit for the CPX business unit. For the quarter, gross margins were 25.4% or 3.6% lower compared to 29% in the first quarter of 2024. The lower margins in Q2 were a result of changes in mix of business and the timing of certain incentive fees in Q1 of this year which flowed through at a high margin and did not have a comparative benefit in Q2.

由於收購 Plastiq，加上 CPX 業務部門毛利成長超過 25%，B2B 調整後毛利從第二季的 230 萬美元增至 560 萬美元。本季毛利率較 2024 年第一季的 29% 下降 25.4% 或 3.6%。第二季利潤率較低的原因是業務組合的變化以及今年第一季某些激勵費用的時間安排，這些費用以高利潤流入，在第二季度沒有產生相對效益。

As a reminder, the sequential comparison is a more relevant metric until Q4 of this year given the year-over-year comparison of margins is impacted by the timing of the Plastiq acquisition and Plastiq's GAAP reporting requirements for revenue recognition which was discussed in prior earnings calls. The B2B segment had $1.5 million of adjusted EBITDA in the quarter compared to $600,000 in Q2 of last year. On a year-over-year basis the growth was largely related to Plastiq, but also included 17% growth in CPX's adjusted EBITDA.

提醒一下，在今年第四季之前，連續比較是一個更相關的指標，因為利潤率的同比比較受到 Plastiq 收購時間和 Plastiq 的 GAAP 收入確認報告要求的影響，這一點已在之前的收益中討論過來電。B2B 部門本季調整後 EBITDA 為 150 萬美元，去年第二季為 60 萬美元。年比成長主要與 Plastiq 有關，但也包括 CPX 調整後 EBITDA 17% 的成長。

Moving to the Enterprise segment. Q2 revenue of $43.7 million was an increase of $12.2 million or 38.9% and from $31.4 million in the prior year. Favorable trends from the past several quarters in new monthly enrollments and billed clients combined with an increase in the number of Passport program managers growth in deposit balances and the stable interest rate environment all contributed to strong revenue growth.

轉向企業領域。第二季營收為 4,370 萬美元，較上年同期的 3,140 萬美元增加了 1,220 萬美元，即 38.9%。過去幾季新增每月註冊人數和計費客戶的有利趨勢，加上 Passport 專案經理數量的增加、存款餘額的增長以及穩定的利率環境，都促成了收入的強勁增長。

As a reminder, there is a countercyclical aspect to portions of the Enterprise segment that should continue to benefit us if the economy does end up having more of a hard landing. As a result of the strong revenue growth, adjusted gross profit for the Enterprise segment increased by 38% to $40.6 million while adjusted gross profit margins were 92.9% in the quarter compared to 93.3% in the second quarter of 2023. Adjusted EBITDA for the quarter was $37.2 million which is up 45% from $25.7 million in last year's second quarter.

提醒一下，如果經濟最終確實出現更多的硬著陸，企業部門的某些部分有反週期因素，這應該會繼續使我們受益。由於營收強勁成長，企業部門調整後毛利成長 38%，達到 4,060 萬美元，本季調整後毛利率為 92.9%，而 2023 年第二季為 93.3%。本季調整後 EBITDA 為 3,720 萬美元，比去年第二季的 2,570 萬美元成長 45%。

Moving to consolidated operating expenses. Salaries and benefits of $22.1 million increased by $3 million or 16% compared to Q2 of last year which was largely due to the addition of Plastiq in Q3 of 2023. However on a sequential quarterly basis, salary and benefits remained flat due to our continued focus on expense discipline.

轉向綜合營運費用。薪資和福利為 2,210 萬美元，與去年第二季相比增加了 300 萬美元，即 16%，這主要是由於 Plastiq 在 2023 年第三季的加入。然而，由於我們繼續關注費用紀律，因此按季度計算，工資和福利保持不變。

We finished the quarter with approximately 990 employees which is compared to approximately 980 at the end of Q1 2024 and 930 at the end of Q2 of last year. SG&A of $11.2 million increased by less than $450,000 a from $10.8 million in Q2 of 2023 and was relatively flat with the $11 million in the first quarter of this year. Depreciation and amortization of $15.2 million for the quarter decreased by $2.7 million from last year, but is comparable to D&A in Q1 of this year and is consistent with our quarterly expectations for the balance of this year.

截至本季度，我們擁有約 990 名員工，而 2024 年第一季末約有 980 名員工，去年第二季末約有 930 名員工。SG&A 為 1,120 萬美元，較 2023 年第二季的 1,080 萬美元增加了不到 45 萬美元，與今年第一季的 1,100 萬美元持平。本季折舊和攤銷為 1520 萬美元，比去年減少 270 萬美元，但與今年第一季的折舊和攤銷相當，並且與我們對今年餘額的季度預期一致。

Moving to the next slide. Adjusted EBITDA for the quarter was $51.6 million which is another new quarterly record for Priority and was an increase of almost 26% from $41.1 million in Q2 of 2023 and an 11% sequential increase from $46.3 million in Q1 of this year. Interest expense of $21.7 million for the quarter increased $3.9 million from Q2 2023 levels as a result of acquisition-related debt increases during Q3 of last year combined with the broader recapitalization we closed in Q2 of this year.

轉到下一張投影片。該季度調整後 EBITDA 為 5,160 萬美元，創下 Priority 的另一季新紀錄，較 2023 年第二季的 4,110 萬美元增長近 26%，較今年第一季的 4,630 萬美元環比增長 11%。由於去年第三季與收購相關的債務增加，加上我們在今年第二季完成的更廣泛的資本重組，本季利息支出為 2,170 萬美元，較 2023 年第二季增加了 390 萬美元。

As seen on page 13 and discussed on our Q1 earnings call we refinanced our debt during the quarter on more favorable terms and also upsized the credit facilities with the excess proceeds used for a partial redemption of our preferred stock. The new credit facilities consist of a $70 million revolving credit facility and an $835 million term loan with pricing that is 100 basis points lower than our previous rate.

正如第13 頁所示以及我們在第一季財報電話會議上所討論的，我們在本季度以更優惠的條件對債務進行了再融資，並利用超額收益用於部分贖回我們的優先股，擴大了信貸額度。新的信貸安排包括 7000 萬美元的循環信貸安排和 8.35 億美元的定期貸款，定價比我們之前的利率低 100 個基點。

Proceeds from the new term loan were used to refinance the prior senior debt, pay related fees and expenses and redeem $170 million of the preferred stock including $3.7 million of accrued but unpaid dividends. The net impact of the refinancing results in over $6 million of annualized free cash flow improvement as we lowered the cash dividends on the preferred stock and pay a lower interest rate on the debt but pay that lower rate on a larger quantum of debt.

新定期貸款的收益用於為先前的優先債務再融資、支付相關費用和開支以及贖回 1.7 億美元的優先股，其中包括 370 萬美元的應計但未支付的股息。再融資的淨影響導致年化自由現金流改善超過 600 萬美元，因為我們降低了優先股的現金股息並支付較低的債務利率，但為較大數額的債務支付較低的利率。

Further the related reduction in dividends on the preferred stock results in a $22 million annualized increase in net income available to common shareholders. As we move through the back half of the year, we will continue to evaluate our capital structure while seeking ways to further optimize our balance sheet and cost of capital.

此外，優先股股息的相關減少導致普通股股東的淨利潤年化增加 2,200 萬美元。下半年，我們將繼續評估我們的資本結構，同時尋求進一步優化資產負債表和資本成本的方法。

From a liquidity standpoint, we ended the quarter with all $70 million of borrowing capacity available under our new revolving credit facility and $34.6 million of unrestricted cash on the balance sheet. For the LTM period ended June 30 adjusted EBITDA of $187.5 million represents over $10 million of sequential quarterly growth from $177 million at the end of Q1.

從流動性的角度來看，本季結束時，我們新的循環信貸安排下的全部可用借款能力為 7,000 萬美元，資產負債表上有 3,460 萬美元的無限制現金。截至 6 月 30 日的 LTM 期間，調整後 EBITDA 為 1.875 億美元，較第一季末的 1.77 億美元環比增長超過 1,000 萬美元。

Preferred stock on our balance sheet totaled $105.7 million at June 30, net of $5.9 million of unaccreted discounts and issuance costs. The second quarter preferred dividend of $8.4 million, included $5.1 million paid in cash and $3.4 million of a PIK component. As I mentioned earlier, $3.7 million of the dividend was accrued and paid in conjunction with the May refinancing. It's important to note that the refinancing closed mid-quarter. So the go-forward dividend on the lower amount of preferred stock will be closer to $4.8 million in Q3, with increases from there based on the PIK component.

截至 6 月 30 日，我們資產負債表上的優先股總額為 1.057 億美元，扣除 590 萬美元的未提列折扣和發行成本。第二季優先股股息為 840 萬美元，其中包括 510 萬美元現金支付和 340 萬美元 PIK 成分。正如我之前提到的，370 萬美元的股息是與 5 月份的再融資一起應計和支付的。值得注意的是，再融資已於季度中期結束。因此，第三季優先股數量較少的未來股息將接近 480 萬美元，並根據 PIK 部分增加。

Before turning the call back over to Tom for his closing comments, I'd like to further address our revised financial guidance for the full year. As Tom noted in his opening remarks, we have narrowed our revenue and adjusted profit full year guidance to the low end of the range that we originally established in our earnings call in March of this year. However, we are raising our adjusted EBITDA guidance to a new range of $196 million to $200 million.

在將電話轉回給湯姆徵求總結意見之前，我想進一步討論我們修訂後的全年財務指引。正如湯姆在開場白中指出的那樣，我們已經縮小了收入範圍，並將全年利潤指導調整至我們最初在今年 3 月的財報電話會議中確定的範圍的低端。然而，我們將調整後的 EBITDA 指引值提高到 1.96 億美元至 2 億美元的新範圍。

I'm sure everyone has already done the quick math to figure out that if we just repeat the first half of the year in Q3 and Q4, we'll meet the new adjusted EBITDA guidance. However, there are a couple of factors that will result in increased operating expenses in Q3 and Q4.

我相信每個人都已經快速計算過，如果我們在第三季和第四季重複上半年的情況，我們將達到新調整後的 EBITDA 指引。然而，有幾個因素將導致第三季和第四季的營運費用增加。

First, we became an accelerated filer at the end of the second quarter based on our public float calculation. So we will incur increased expenses related to SOX 404 compliance. In addition, we continue to migrate certain platforms to the cloud, which will convert certain CapEx items to OpEx, but will have minimal impact on our net cash flow.

首先，根據我們的公眾持股量計算，我們在第二季末成為加速申報者。因此，我們將增加與 SOX 404 合規性相關的費用。此外，我們繼續將某些平台遷移到雲端，這會將某些資本支出項目轉換為營運支出，但對我們的淨現金流影響最小。

Those combined expenses will both accelerate in the back half of this year and apply some pressure to adjusted EBITDA, which is why you aren't seeing an even higher range for our revised full year guidance. To be clear, though, we are going to continue to maintain our expense discipline and focus on generating a high flow-through from gross profit to the bottom line.

這些綜合費用將在今年下半年加速，並對調整後的 EBITDA 施加一定壓力，這就是為什麼我們修訂後的全年指引看不到更高的範圍。不過，需要明確的是，我們將繼續維持我們的費用紀律，並專注於產生從毛利到利潤的高流量。

With that, I'll now turn the call back over to Tom for his closing comments.

現在，我將把電話轉回給湯姆，讓他發表結束語。

Thank you, Tim. Now that we're a little more than halfway through the year, I'd like to take a minute to highlight where Priority is in its journey. Everything we did over the past several years, from accelerating our investment in our unified commerce, payments and banking infrastructure, to our focus on building countercyclical business lines, to our acquisition of Plastiq a year ago was done with intention and purpose to provide our customers with an elegantly delivered experience combining acquiring, payables and banking solutions on a single platform.

謝謝你，提姆。現在，今年已過半，我想花一點時間強調 Priority 的發展歷程。過去幾年我們所做的一切，從加速對統一商務、支付和銀行基礎設施的投資，到專注於建設反週期業務線，再到一年前收購 Plastiq，都是為了向我們的客戶提供服務。在單一平台上結合收單、應付帳款和銀行解決方案，提供優雅的體驗。

Our financial and operating results demonstrate that we've continued to execute with exceptional consistency and a forward-looking vision that resonates with the constituents we serve. Our tech-enabled service platform is delivering on the promise of a financial tool set that can accelerate cash flow and optimize working capital for our partners.

我們的財務和營運業績表明，我們繼續以卓越的一致性和前瞻性願景執行，與我們所服務的選民產生共鳴。我們的技術支援服務平台正在兌現金融工具集的承諾，可以加速現金流並優化合作夥伴的營運資金。

The success of our capabilities and style of engagement is evident, not only in our organic growth numbers and improving margins that have meaningfully outpaced our peers for several quarters now, but also when talking to our customers and partners. Let me offer some current examples of the unique advantage of our platform that elegantly delivers a suite of embedded payments and banking solutions, which can be smoothly adopted within our customer networks.

我們的能力和參與方式的成功是顯而易見的，不僅體現在我們的有機增長數字和不斷提高的利潤率上，目前已經連續幾個季度明顯超過了同行，而且還體現在與我們的客戶和合作夥伴交談時。讓我提供一些當前的例子來說明我們平台的獨特優勢，該平台優雅地提供了一套嵌入式支付和銀行解決方案，可以在我們的客戶網路中順利採用。

Since launching Plastiq bill payment in late January with our acquiring partners, run rate processing volumes continue to pick up steam having grown quarter-over-quarter by 200%. Additionally, Q2 downloads across our POS suite continue to represent approximately 20% of total new processing activity. And we continue to activate new distributors with 35 new resellers executing contracts during the quarter. And the growing penetration of our POS tools will increase our mix of recurring SaaS revenue, improve merchant loyalty and continue to open additional paths for banking and payables product adoption that increase margin per merchant.

自從 1 月底與我們的收單合作夥伴推出 Plastiq 帳單支付以來，運行率處理量持續增長，季度環比增長了 200%。此外，第二季我們 POS 套件的下載量持續佔新處理活動總量的約 20%。我們繼續啟動新經銷商，本季有 35 家新經銷商執行合約。我們的 POS 工具的日益普及將增加我們的經常性 SaaS 收入組合，提高商家忠誠度，並繼續為銀行和應付帳款產品的採用開闢更多途徑，從而提高每個商家的利潤。

As previously mentioned, our banking solutions suite now maintains over $1 billion in average daily balances. Importantly, approximately 25% have been driven by unifying our technology and shared service operations to execute our unified commerce vision across our acquiring, payables and Enterprise business segments, which delivered 50% quarter-over-quarter growth in the number of account holders.

如前所述，我們的銀行解決方案套件目前平均每日餘額維持在 10 億美元以上。重要的是，大約25% 是透過統一我們的技術和共享服務營運來推動的，以在我們的收單、應付帳款和企業業務部門執行我們統一的商務願景，這使得帳戶持有者數量環比增長50%。

And lastly, as you may recall, in April, we launched our working capital line of credit offering Priority Capital with our partners at Pipe. Since that time, total advances have grown from $360,000 during our Q1 beta period to nearly $4 million in quarter two. Our working capital solutions are well positioned to accelerate as we roll out more streamlined integrated solutions for customers to request or advance from within their MX Merchant acquiring app, and then receive those funds directly into their passport banking account. The cumulative success of these ongoing initiatives represents continued upside to our projections.

最後，您可能還記得，四月份，我們與 Pipe 合作夥伴推出了營運資金信貸額度，提供 Priority Capital。自那時起，預付款總額已從第一季測試期間的 36 萬美元增長到第二季的近 400 萬美元。隨著我們推出更簡化的整合解決方案，客戶可以從 MX Merchant 收單應用程式中請求或預付款，然後將這些資金直接存入他們的護照銀行帳戶，我們的營運資金解決方案將加速發展。這些正在進行的舉措的累積成功表明我們的預測持續上升。

I offer these successes to reinforce that Priority's technology and operations are built for the future and executing consistently on our mission to deliver that thriving ecosystem of financial solutions to accelerate cash flow and optimize working capital for businesses. We're delivering this message, as we broaden the unified commerce conversation, and it resonates with current and prospective customers alike.

我提供這些成功是為了強調 Priority 的技術和營運是面向未來而建構的，並始終如一地執行我們的使命，即提供蓬勃發展的金融解決方案生態系統，以加速現金流並優化企業的營運資本。隨著我們擴大統一商務對話，我們正在傳達這一訊息，它引起了當前和潛在客戶的共鳴。

Before wrapping up, I want to thank all of my colleagues at Priority who continue to execute our unified conversation and for striving to enhance our industry-leading offering every day. Your dedication to continued improvement is clear in everything you do, providing our customers a constant reminder that they made the right choice to partner with Priority.

在結束之前，我要感謝 Priority 的所有同事，他們繼續執行我們的統一對話，並每天努力增強我們行業領先的產品。您所做的每一件事都清楚地體現了您對持續改進的奉獻精神，不斷提醒我們的客戶，他們做出了與 Priority 合作的正確選擇。

Lastly, we greatly appreciate the ongoing support of our investors and analysts and for those in attendance who are new to Priority for taking the time to participate on today's call.

最後，我們非常感謝投資者和分析師的持續支持，以及剛接觸 Priority 的與會者抽出時間參加今天的電話會議。

Operator, we'd now like to open the call for questions.

接線員，我們現在要開始提問。

(Operator Instructions) Tim Switzer, KBW.

（操作員說明）Tim Switzer，KBW。

Hey, good morning. Thank you, guys for taking my question. Can we touch on the recapitalization real quick? I believe most of that was accomplished in May. So the full run rate impact I don't believe was in Q2 results. So what's the incremental impact to Q3? And if I remember what you guys said last quarter, I think the preferred dividend would be around $4.7 million in Q3. Is that still the right number?

嘿，早安。謝謝你們回答我的問題。我們能盡快討論資本重組嗎？我相信其中大部分已在五月完成。因此，我認為第二季的業績不會對運行率產生全面影響。那麼對第三季的增量影響是什麼？如果我記得你們上個季度所說的話，我認為第三季的優先股股息將約為 470 萬美元。這仍然是正確的數字嗎？

It is. Yes, I think we're calling it $4.8 million at this point based on the final balance on the pref. But on a go-forward basis, we should be running a $4.8 million a quarter total preferred dividend, about $2 million of that's PIK and the other $2.8 billion or so is cash. And then obviously that PIK component will grow over time.

這是。是的，我想我們現在根據 pref 的最終餘額將其稱為 480 萬美元。但從長遠來看，我們每季的優先股股息總額應該為 480 萬美元，其中約 200 萬美元為 PIK，另外 28 億美元左右為現金。顯然，PIK 元件會隨著時間的推移而成長。

Okay. Perfect. And then could you guys talk about the expense outlook. You mentioned an acceleration due to a few different items in the back half of this year. What's the pace of that? Should it be like even acceleration in Q3 and Q4? And then, what does it mean for 2025? Should there be continued investments on top of those that we should expect? Just would look -- would like some more color there please.

好的。完美的。然後你們能談談費用前景嗎？您提到今年下半年由於一些不同的項目而加速。那是怎樣的節奏？Q3和Q4的加速應該是均勻的嗎？那麼，這對 2025 年意味著什麼？除了我們應該期望的投資之外，還應該繼續投資嗎？只是看起來——請再多一些顏色。

Sure. Yes. I think, it will be relatively evenly spread between Q3 and Q4, maybe a 60:40 split there with heavier balance towards Q4 just given some of the timing of the audit process and some of the SOX 404 aspects of it. And then as you think about next year that should normalize, right? We're not going to see a further acceleration of those costs going into next year.

當然。是的。我認為，第三季和第四季之間的分佈將相對均勻，可能是60:40，而第四季度的平衡將更重，只是考慮到審計流程的一些時間安排以及其中的一些SOX 404 方面。然後當你想到明年這應該會正常化，對吧？明年我們不會看到這些成本進一步加速。

Great. Okay. That's good to hear. If I can get one more too. You mentioned how the Enterprise business is a little countercyclical to the macro environment. But what impact would you expect to the rest of the business and just the company broadly, if we had a bit of an economic slowdown? And then, do interest rates factor into that at all one way or the other? Thank you.

偉大的。好的。很高興聽到這個消息。如果我也能再得到一張就好了。您提到企業業務與宏觀環境有點反週期。但是，如果我們的經濟稍微放緩，您預計會對其他業務以及整個公司產生什麼影響？那麼，利率是否會以某種方式影響這個因素呢？謝謝。

Yes, I can answer those. Maybe I'll go in reverse. So if you think about interest rates, obviously, we benefit on one side with the balances we have in putting those into permissible investments which are largely earning income at roughly Fed funds or so type rates. And then on the flip side obviously, we have the interest expense on the debt as well as the cash portion of the preferred dividend.

是的，我可以回答這些問題。也許我會反其道而行。因此，如果你考慮利率，顯然，我們一方面會受益於將這些餘額投入到允許的投資中，這些投資主要以大致聯邦基金或類似利率賺取收入。另一方面，顯然，我們有債務利息費用以及優先股股息的現金部分。

If you look at those balances, we're almost perfectly hedged right now. So if there's a decrease in rates depending on what the Fed does in the balance of the year, there's almost zero impact on free cash flow. There's a roughly $600000 per quarter impact to EBITDA for every 25 basis points of rate cuts. But again zero impact to cash flow given we're hedged on the debt side there.

如果你看看這些餘額，我們現在幾乎已經完全對沖了。因此，如果利率根據聯準會在今年剩餘時間內的行動而下降，那麼對自由現金流的影響幾乎為零。每降息 25 個基點，每季 EBITDA 就會受到約 60 萬美元的影響。但鑑於我們在債務方面進行對沖，對現金流的影響再次為零。

And then more broadly, as you think about the economy and going into next year, if there is a hard landing and we start to see some softness, I think we'll see some impact on the SMB side. But I feel like we're able to continue to grow and offset that decline you may see within the broader macro environment because we're continuing to maintain very high retention rates with our existing reselling partners, maintaining good retention rates with our merchants.

更廣泛地說，當你考慮經濟並進入明年時，如果出現硬著陸並且我們開始看到一些疲軟，我認為我們會看到對中小企業方面的一些影響。但我覺得我們能夠繼續成長並抵消在更廣泛的宏觀環境中可能看到的下降，因為我們繼續與現有的轉售合作夥伴保持非常高的保留率，並與我們的商家保持良好的保留率。

We've seen some impact this year and last year candidly from same-store sales. But as we think about our retention rates and what we can control, those have maintained very steady levels. But you have seen some impact from same-store sales. So that could have another impact next year, but I think we'll continue to grow through that.

坦白說，我們今年和去年都看到了同店銷售的一些影響。但當我們考慮我們的保留率以及我們可以控制的內容時，這些保留率一直保持著非常穩定的水平。但您已經看到了同店銷售的一些影響。因此，這可能會在明年產生另一個影響，但我認為我們將繼續透過這一點實現成長。

Great. Thank you.

偉大的。謝謝。

One other point you may just want to take a peek at. If you go look at the volume growth across MasterCard and Visa and then look at our volume growth, you'll see we're winning market share in the acquiring segment relative to total volume. So given the tool set we're rolling out now, we -- across some new segments in hospitality, in salon, in construction, we feel pretty optimistic, we can continue to grow the market share there, which would of course, offset some of the potential recessionary softness in spending, if it were to emerge.

您可能只想看一眼另一點。如果你看看萬事達卡和維薩卡的銷售成長，然後看看我們的銷售成長，你會發現我們正在贏得收單領域相對於總銷量的市場份額。因此，考慮到我們現在推出的工具集，我們——在酒店、沙龍、建築領域的一些新領域，我們感到非常樂觀，我們可以繼續擴大那裡的市場份額，這當然會抵消一些如果出現的話，可能會出現支出疲軟的衰退。

Okay. That's really helpful. Thank you.

好的。這真的很有幫助。謝謝。

Jacob Stephan, Lake Street.

雅各史蒂芬，湖街。

Hey, guys. Thanks for taking my question. Congrats on the quarter. Maybe if you guys could just help us piece out. Obviously, you referenced 59% of adjusted gross profit is from recurring sources or non-transaction-dependent sources. Maybe if you could just help us piece those non-transaction dependencies out of your business so we can really understand the driving forces between -- or being behind the recurring gross profit growth.

嘿，夥計們。感謝您提出我的問題。恭喜本季。也許你們能幫我們解決這個問題。顯然，您提到 59% 的調整後毛利來自經常性來源或非交易​​依賴來源。也許您可以幫助我們將這些非交易依賴性從您的業務中剔除出來，這樣我們就可以真正了解經常性毛利成長之間的驅動力或背後的驅動力。

Sure. Happy to do that, Jacob. Yes, so if you think about the revenue and our split obviously, there is transaction volume, right Bankcard volumes, right, that's going to be what we consider reoccurring but it's not in our recurring gross profit numbers that I quoted, right? So within the recurring aspect we have, we have monthly subscription fees and monthly fees that we earn on a regular basis right and those are not transaction dependent or volume dependent.

當然。很高興這樣做，雅各。是的，所以如果你考慮一下收入和我們的劃分，你會發現交易量，銀行卡交易量，對吧，這將是我們考慮重複發生的，但它不在我引用的我們的經常性毛利數字中，對嗎？因此，在我們的經常性方面，我們有每月的訂閱費和我們定期賺取的月費，這些費用不依賴交易或數量。

We have the income on the permissible investments, that's not volume or transaction dependent. And then we have other fees that we generate on a monthly basis from merchants and resellers as well as within the enterprise segment. So there's a number of different aspects of that that are very subscription-like, as you think about the software we deploy and the way we earn revenue across the business.

我們透過允許的投資獲得收入，這與數量或交易無關。然後，我們每月向商家和經銷商以及企業部門收取其他費用。因此，當您考慮我們部署的軟體以及我們在整個業務中賺取收入的方式時，有許多不同的方面都非常類似於訂閱。

Okay. Got it. That's helpful. And then obviously, it's over a year here since you guys acquired Plastiq. I'm just curious do you see any seasonality factoring into the back half of the year with the Plastiq?

好的。知道了。這很有幫助。顯然，自從你們收購 Plastiq 以來已經一年多了。我只是好奇您是否認為 Plastiq 在下半年會受到季節性因素的影響？

Not as much seasonality. I think what you do see is that from quarter-to-quarter you may have some larger enterprise customers come in and contribute some meaningful volume. That volume tends to come through at obviously a little bit lower margin given the scale of those customers. And it's a little harder to predict. But I think we continue to expect those types of customers to use the Plastiq product offering and continue to contribute to the back half of the year. But not as much seasonality as much as there's maybe some timing differences with some of those larger customers.

沒有那麼多季節性。我認為您確實看到的是，每個季度您可能都會有一些較大的企業客戶進來並貢獻一些有意義的數量。考慮到這些客戶的規模，這一銷量的利潤率顯然要低一些。而且預測起來有點困難。但我認為我們仍然期望這些類型的客戶使用 Plastiq 產品並繼續為今年下半年做出貢獻。但季節性並不那麼嚴重，因為與一些較大的客戶可能存在一些時間差異。

Okay. And obviously, nice to see the progress on the balance sheet in Q2 here. You took out the majority of the preferred but obviously, the cash balance and revolver, the $70 million revolver isn't quite enough to take out the remaining. But I'm curious, how you're thinking about the remaining $106 million of preferred?

好的。顯然，很高興看到第二季資產負債表的進展。你拿出了大部分首選，但顯然，現金餘額和左輪手槍，7000萬美元的左輪手槍不足以拿出剩餘的。但我很好奇，您如何看待剩餘的 1.06 億美元優先股？

Yes. We'll continue to evaluate the balance sheet. And obviously, we look at a lot of different uses of capital, whether it's thinking about acquisitions to grow inorganically or investing in the business to grow organically. We'll also look at the preferred equities and other use of capital.

是的。我們將繼續評估資產負債表。顯然，我們關注資本的許多不同用途，無論是考慮收購以實現無機成長，還是投資業務以實現有機成長。我們也將研究優先股和其他資本用途。

When we did the recapitalization, we closed at roughly 4.5 times leverage, we're already down below 4.25 at the end of this quarter. So we've already seen a quarter turn of deleveraging just intra-quarter with EBITDA growth. If you just take the numbers for the balance of the year and if you just assume the midpoint of EBITDA guidance and assume we don't pay down another $1 of debt from here to the end of the year, you'll be closer to 4 times leverage. So you can start to do the math to figure out the capacity you have to address the rest of the balance sheet.

當我們進行資本重組時，我們的槓桿率約為 4.5 倍，到本季末已經跌破 4.25 倍。因此，我們已經看到季度內的去槓桿化和 EBITDA 的成長。如果你只考慮今年剩餘時間的數字，並且假設 EBITDA 指導的中點，並假設我們從現在到年底不再償還 1 美元的債務，那麼你將接近 4倍槓桿。因此，您可以開始計算，計算出處理資產負債表其餘部分的能力。

Okay. Got it. Very helpful. Appreciate it, guys.

好的。知道了。非常有幫助。非常感謝，夥計們。

This concludes our question-and-answer session. I would like to turn the conference back over to Tom Priore for any closing remarks.

我們的問答環節到此結束。我想將會議轉回湯姆·普賴雷 (Tom Priore) 發表閉幕詞。

All right. Well thank you. First of all, thanks for the questions. And just want to express our appreciation for everyone attending the call and your interest in Priority and the platform we're building for we think is a future of commerce. And we'll get back to executing. So thanks everyone for your time. Hope everyone has a great weekend. Enjoy the rest of the summer.

好的。嗯，謝謝。首先，感謝您的提問。我只是想表達我們對參加電話會議的每個人的感謝，以及你們對 Priority 和我們正在建立的平台的興趣，我們認為這是商業的未來。我們將繼續執行。謝謝大家的寶貴時間。希望大家週末愉快。享受夏天剩下的時光。