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DATE

Tuesday, March 10, 2026 at 10 a.m. ET

CALL PARTICIPANTS

  • Chairman and Chief Executive Officer — Thomas Priore
  • Chief Financial Officer — Timothy O’Leary
  • Managing Director, Investor Relations — Meghna Mehra

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TAKEAWAYS

  • Net Revenue Growth -- 8% growth in annual net revenue, with aggregate transaction volume reaching $150 billion, an increase of $20 billion.
  • Adjusted EBITDA -- Full-year adjusted EBITDA increased by 10% to $225.2 million; Q4 adjusted EBITDA improved 16% to $60.1 million.
  • Adjusted EPS -- Adjusted EPS rose by $0.52, or 102%, to $1.03 for fiscal 2025.
  • Customer Accounts -- Active customer accounts on the platform increased to 1,800,000 from 1,200,000 the previous year.
  • 2026 Guidance -- Management projects 6%-9% top-line revenue growth to $1.0 billion-$1.04 billion and adjusted EBITDA between $230 million and $245 million.
  • Q4 Revenue -- Quarterly revenue was $247.1 million, up 9%, with organic revenue growth of 6.8% cited by the CFO.
  • Segment Performance -- Q4 Payables revenue grew 12.7%; Treasury Solutions revenue grew 17.8%; Merchant Solutions revenue up 6.2% with 3% organic growth and a further 3.2% from acquisitions.
  • Gross Profit Margins -- Q4 adjusted gross profit margin expanded to 40.6%, increasing 360 basis points; full-year margin rise primarily driven by Payables and Treasury Solutions and acquisition effects.
  • Payables EBITDA -- Q4 Payables segment adjusted EBITDA grew by 60.8% to $3.9 million, with operating expenses reduced by nearly 9% year over year before D&A.
  • Treasury Solutions Metrics -- Treasury Solutions segment Q4 gross profit margin was 91.9%, despite a 170 basis point decline due to mix shift from rapid growth in Passport and Priority Tech Ventures.
  • New Client Metrics -- Number of billed clients enrolled in CFTPay surpassed 1,100,000 in Q4; integrated partners in Treasury Solutions increased by 30% year over year.
  • Q4 Free Cash Flow -- Free cash flow for Q4 totaled $28 million, driven by $60 million in adjusted EBITDA less $6 million CapEx, $22 million interest expense, and over $4 million in income taxes.
  • Net Leverage -- Net leverage reduced to 4.2x, or 3.9x pro forma for run-rate EBITDA from acquisitions; net debt finished at $945.4 million.
  • Liquidity -- Quarter-end liquidity was $177 million, including $77 million unrestricted cash and $100 million undrawn from the revolving credit facility.
  • Internal Controls -- CFO O’Leary reported, "the company successfully remediated the material weakness in its internal controls over financial reporting that was identified in 12/31/2024."

SUMMARY

Management reaffirmed that investments in real estate, healthcare, NIL sports/entertainment, and international remittance verticals are complete, shifting the strategic focus toward sales execution and adoption across institutional client bases. The enterprise sales pipeline is described as consistently strong, with adoption in segments like real estate and ISVs progressing at measured conversion rates due to the inherently lengthy cycles of large institutions. CFO O’Leary clarified guidance incorporates prevailing macro trends and anticipated interest rate headwinds, with Payables and Treasury Solutions projections moderated for 2026 to reflect these market factors. Product mix shifts in Treasury Solutions, particularly rapid Passport and Venture growth, impact near-term profitability but are tied to expanding long-term addressable market opportunities. Management intends to maintain a disciplined approach to M&A, emphasizing value-accretive opportunities, while also committing incremental investment in top enterprise sales and development talent.

  • CEO Priore said, "No strategic shifts. What we have reflected in the past is what we expect to continue. We will look at some M&A opportunistically. I think as Timothy likes to note, we have a broad funnel but a very narrow filter for what comes through and we think is additive and accretive."
  • CFO O’Leary signaled that, "as you go from construction mode to execution mode, you have less ability to capitalize certain development costs," impacting the bridge from gross profit to EBITDA and reflecting a new phase in the company's investment cycle.
  • Management identified normalized Q4 free cash flow of $28 million and annualized run-rate free cash flow of $112 million as support for future deleveraging and operational flexibility.
  • Payables segment growth rates are projected to align more closely with revenue over time as larger, lower-margin customers are onboarded, but ongoing operating efficiencies are expected to mitigate gross margin pressure.
  • Guidance for Payables organic growth of 8%-10% in 2026 implies a slower rate than 2025, as CFO O’Leary noted "certain market headwinds, including the impact of lower interest rates and certain card network changes."

INDUSTRY GLOSSARY

  • ISV: Independent Software Vendor; a company that develops and sells software solutions integrated with payment or treasury platforms.
  • NIL: Name, Image, and Likeness; refers to college sports marketplace opportunities created by student-athletes' rights to monetize their personal brands.
  • CFTPay: A branded repayment and account management platform within Treasury Solutions, focused on debt resolution and consumer account management.
  • Passport: A program platform within Treasury Solutions delivering managed payment, distribution, and account functionality for commercial partners.

Full Conference Call Transcript

Operator: Good day, and welcome to the Priority Technology Holdings, Inc. Fourth Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, to withdraw your question, please press star then 2. Please note that this event is being recorded. I would now like to turn the conference over to Meghna Mehra, Managing Director of Investor Relations. Please go ahead.

Meghna Mehra: Good morning, and thank you for joining us. With me today are Thomas Priore, Chairman and Chief Executive Officer of Priority Technology Holdings, Inc., and Timothy O’Leary, Chief Financial Officer. 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.

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. Before I turn the call over to Thomas, I would like to say that on today's call, we will only be discussing Priority Technology Holdings, Inc.’s financial and operational results and outlook. We will not be commenting or answering questions related to the special committee's ongoing evaluation of the take-private proposal. Please continue to refer to the company's prior press releases for the latest on that topic.

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

Thomas Priore: Thank you, Meghna. And thanks to everyone for joining us for our fourth quarter and full year 2025 earnings call. I will begin today's call by highlighting our aggregate fourth quarter and full year 2025 performance, discuss full year financial guidance for 2026, and provide an overview of key strategic updates. I will then hand the call over to Timothy, who will provide segment-level performance, key trends, and developments across our business segments and Priority Technology Holdings, Inc. overall.

As summarized on Slide 3, Priority Technology Holdings, Inc. grew net revenue for the year by 8%, generated adjusted gross profit and adjusted EBITDA growth of 14% and 10%, respectively, and increased adjusted EPS by $0.52, or 102% year over year, to $1.03 for fiscal 2025. We ended the year with 1,800,000 total customer accounts operating on our commerce platform, up from 1,200,000 at the end of last year. Annual transaction volume in 2025 increased by $20 billion to $150 billion, and average account balances under administration improved by $500 million from the prior year to $1.7 billion.

Timothy will provide more context on the full year 2026 guidance specifics later in the call, but I can reflect that the value our diverse partners and customers see in our unified commerce platform and elegant product solutions provides confidence that we will sustain the momentum in our Merchant Solutions, Payables, and Treasury Solutions segments. We anticipate achieving 6% to 9% top-line revenue growth to a range of $1.0 billion to $1.04 billion and generating adjusted EBITDA of $230 million to $245 million in 2026, despite headwinds related to lower interest rates, a challenging macroeconomic and consumer spending environment, and the continued investment in early-stage growth opportunities within Priority Tech Ventures.

Turning our attention to our aggregate Q4 results on Slide 4, revenue of $247.1 million increased 9% from the prior year. This led to a 19% increase in adjusted gross profit to $100.2 million and a 16% improvement in adjusted EBITDA to $60.1 million. Adjusted gross profit margin of 40.6% increased 360 basis points from the prior year's fourth quarter, reflecting the ongoing performance of our diverse, high-margin Payables and Treasury Solutions segments, combined with the accretive impact of acquisitions completed in 2025. Now for those of you who are new to Priority Technology Holdings, Inc., Slides 6 and 7 highlight our vision for Connected Commerce. The Priority Commerce platform is purpose-built to streamline collecting, storing, lending, and sending money.

It delivers a flexible financial toolset for merchant acquiring, payables, and treasury solutions designed to accelerate cash flow and optimize working capital for businesses. I would encourage you to play the short one- to two-minute video embedded in the product links to gain a deeper understanding and appreciation for why customers are consistently partnering with Priority Technology Holdings, Inc. to reach their commerce goals, and why we are emerging as a go-to solution provider for embedded commerce and finance solutions. Slide 7 highlights a typical partner experience with our commerce APIs orchestration capabilities for payments and treasury solutions. This enables partners to use a single API tailored to their specific objectives.

Customers connecting via our API can access all routes for digital payment acceptance; create traditional and virtual bank accounts; issue physical and virtual debit cards; enable lockbox for checks; configure single vendor and advanced bulk vendor payments; and many other commerce options at their own pace. Given our expanding customer base and segments, our commerce platform creates two important benefits for Priority Technology Holdings, Inc.’s long-term success. First, it enables our partners to develop their offering to seize new opportunities and respond to emerging trends. As they add features and embedded solutions, both parties maintain clear visibility into quantifiable revenue growth opportunities, building customer confidence and driving mutual success.

Second, by standardizing operational workflows across diverse industry segments where money movement and treasury tools are critical to the value chain, we can identify and refine key operational metrics in compliance, payment operations, risk, and application support. This enables us to scale efficiently, maintain cost discipline, and ultimately improve profitability. This vision explains why we have been able to evolve Priority Technology Holdings, Inc. into a consistently high-performing payments and banking financial technology company with strong recurring revenue prospects.

Our customers and current market conditions, particularly the accelerating narrative of AI's impact on SaaS providers, reinforce our belief that systems connecting payments and treasury solutions to accept and distribute funds in multiparty environments will be critical as businesses put greater demands on software and payment solution providers to deliver a full suite of core business services in a single relationship. At this point, I would like to hand it over to Timothy, who will provide further insights into the health of our business segments along with current trends in each that factored into our fourth quarter results and our confidence for sustained performance in 2026.

Timothy O’Leary: Thank you, Thomas, and good morning, everyone. As Thomas mentioned, we had solid overall financial performance in the fourth quarter and for the full year. For the full year, consolidated revenue growth of 8.3% included 7.7% of organic growth, excluding the impact of acquisitions. For the fourth quarter, reported revenue growth of 8.8% included organic growth of 6.8%, fueled by strong 13% growth in Payables and 18% growth in Treasury Solutions, complemented by 6% reported growth in Merchant Solutions, which included 3% organic growth. As shown on Slide 9, adjusted gross profit from our Payables and Treasury Solutions segments represented 62% of the total for the year, while for the fourth quarter they combined to represent 60%.

For easier organic comparison to prior data points, if you exclude the impact of acquisitions, those respective percentages would have been 63% for the full year and 65% for the quarter. The three percentage point year-over-year organic increase in Q4 is indicative of our continued investment in higher-growth, higher-margin operating segments. Strong growth in Payables and Treasury Solutions, combined with the impact of acquisition-related activity, also allowed for overall margin expansion as adjusted gross profit margins improved by nearly 360 basis points from Q4 2024 and over 130 basis points sequentially from Q3.

If you normalize for the nonrecurring inventory write-off in 2024, which negatively impacted gross margins in that period, the year-over-year gross margin expansion is still a very healthy 210 basis points. I will move now to the segment-level results, starting with Merchant Solutions on Slide 10. Merchant Solutions generated Q4 revenue of $165.3 million, which is $9.6 million, or 6.2%, higher than last year's fourth quarter. Revenue growth was a mix of 3% organic growth in the core portfolio, combined with just over 3% revenue growth in the quarter contributed by the BoomCommerce and DMS acquisitions.

Slower growth in the core portfolio compared to the first half of the year was a trend we discussed on our Q3 earnings call and was largely attributable to a few key industry verticals, including restaurants, construction, and certain retail trade markets, including home furnishings and building materials. Total card volume was $18.5 billion for the quarter, which is up 2.3% from the prior year. From a merchant standpoint, we averaged 179,000 accounts during the quarter, which is up from 177,000 last year, while new monthly boards averaged 3,000 during the quarter. Adjusted gross profit for the fourth quarter was $40.1 million, which is up $8.1 million, or 25.5%, from Q4 of last year.

Gross margins of 24.3% are 370 basis points higher than the comparable quarter last year due to the BoomCommerce and DMS acquisitions. If you exclude the impact of acquisitions, organic gross profit was flat, and gross margins were 60 basis points lower than the prior year's fourth quarter. Lastly, adjusted EBITDA was $30.6 million, which is up $4.0 million, or 14.9%, from last year, as inorganic EBITDA more than offset the impact of lower EBITDA from specialized acquiring in the core portfolio. Moving to the Payables segment, revenue of $26.8 million was 12.7% higher than Q4 of last year. Buyer-funded revenues grew 10.9% year over year to $20.9 million, while supplier-funded revenues grew 20% year over year to $5.8 million.

Adjusted gross profit was $7.4 million in the quarter, which is a 15.9% increase over the prior year. For the quarter, gross margins were 27.6%, which is over 70 basis points favorable to last year's comparable quarter. The Payables segment contributed $3.9 million of adjusted EBITDA during the quarter, which was a $1.5 million, or 60.8%, increase year over year. The acceleration of adjusted EBITDA growth compared to revenue and adjusted gross profit was driven by continued strong operating leverage in the segment, including an almost 9% year-over-year reduction in operating expenses before D&A. Moving to the Treasury Solutions segment, Q4 revenue of $57.3 million was an increase of $8.7 million, or 17.8%, over the prior year's fourth quarter.

Revenue growth was driven by continued strong enrollment trends and an increase in the number of billed clients enrolled in CFTPay to over 1,100,000, combined with a 30% year-over-year increase in the number of integrated partners and organic same-store sales growth from existing Passport program managers. Higher account balances in CFTPay and Passport were able to more than offset the impact of lower interest rates in the quarter compared to Q4 of last year. As a result of those factors, adjusted gross profit for the segment increased by 15.7% to $52.7 million, while adjusted gross profit margins were 91.9% for the quarter.

Gross margins were approximately 170 basis points lower than the prior year's fourth quarter due to mix shift resulting from strong 110% revenue growth in Passport and over 200% revenue growth in Priority Tech Ventures, both of which operate at lower gross margins than the CFTPay platform. Adjusted EBITDA for the quarter was $47.6 million, an increase of $5.5 million, or 13.2%, year over year. Overall profitability in Treasury Solutions was driven by low-teens revenue growth in CFTPay, combined with strong profitable growth in Passport, which offset investments we continue to make in newer vertical software assets within Priority Tech Ventures.

While many of these investments are still scaling and not yet profitable, we view them as highly compelling opportunities to enhance Priority Technology Holdings, Inc.’s already comprehensive product suite and expand further into both new and existing markets, including construction, payroll and benefits, asset management, and sports and entertainment, including the NIL marketplace. Moving to consolidated operating expenses, salaries and benefits of $28.8 million increased by $5.6 million, or 24.2%, compared to Q4 of last year. The year-over-year increase was primarily driven by a $2.4 million increase in stock compensation expense, combined with a $2.1 million increase related to acquisition activity.

SG&A of $17.7 million increased by $5.0 million, or 38.8%, compared to Q4 of last year as a result of increased accounting and SOX-related expenses, combined with higher cloud and software expenses. With respect to our capital structure on Page 14, debt at the end of the quarter was $1.02 billion, and we ended the quarter with $177 million of available liquidity, including all $100 million of borrowing capacity available under our revolving credit facility and $77 million of unrestricted cash on the balance sheet.

With respect to free cash flow, we generated $28 million of free cash flow in the quarter, based on adjusted EBITDA of approximately $60 million minus $6 million of CapEx, $22 million of interest expense, and just over $4 million of income taxes. On a run-rate basis, that same metric totals approximately $112 million, which equates to almost $1.34 of free cash flow per diluted share. For the LTM period ended December 31, adjusted EBITDA of $225.2 million combined with net debt of $945.4 million resulted in net leverage of 4.2 times at quarter end, which is down from 4.4 times at the end of Q3, with increased EBITDA and free cash flow contributing to lower net debt.

For further comparison, if you were to include the run-rate EBITDA impact of acquisitions, pro forma net leverage would have been 3.9 times at year end. Page 15 highlights our financial guidance for the full year. As Thomas highlighted earlier, we are forecasting 6% to 9% top-line growth, inclusive of 4% to 7% organic growth, for the full year to a revenue range of $1.01 billion to $1.04 billion. Adjusted gross profit is expected to range from $405 million to $425 million, with gross margins expanding by 75 to 100 basis points from full year 2025 levels. Lastly, adjusted EBITDA is forecast to range from $230 million to $245 million.

To provide some color on the guidance by segment, we expect 6% to 8% revenue growth in Merchant Solutions, inclusive of approximately 3% to 4% organic growth, as we continue to add new resellers and win new large enterprise customers while also inorganically benefiting from the impact of acquisitions made in 2025. Payables organic top-line growth in 2026 is expected to be in the 8% to 10% range, which is lower on a comparative basis to 2025's reported growth given certain market headwinds, including the impact of lower interest rates and certain card network changes.

Lastly, Treasury Solutions is expected to continue its momentum, although we have moderated our growth expectations in 2026 to low double-digit percentages to account for the impact of lower interest rates, combined with strong growth already experienced in the past three years, contributing to the simple math of a larger denominator. If you take those segment-level growth rates and then factor in an estimated $10 million of intercompany eliminations at the consolidated level, that brings you to the 6% to 9% guidance range for revenue growth for the full year.

Lastly, and separate from guidance, I am pleased to announce that as of 12/31/2025, the company successfully remediated the material weakness in its internal controls over financial reporting that was identified in 12/31/2024. Further, our internal assessments and external audits have confirmed that the company maintained effective internal controls over financial reporting as of the end of the 2025 fiscal year. With that, I will now turn the call back over to Thomas for his closing comments.

Thomas Priore: Thank you, Timothy. Before concluding, I wanted to offer our perspective on widely publicized research about the impact of AI on SaaS business models and how the plummeting cost of app development is influencing Priority Technology Holdings, Inc. To put it simply, we are and have been fully bought in, and have been positioning for this eventuality for some time.

Our expectations of how vertically specialized applications could and would be built and deployed has informed our strategy to, one, maintain a highly disciplined tech expense structure framework, with CapEx consistently representing approximately 10% of EBITDA; two, establishing the Priority Tech Ventures platform to drive growth in new verticals with large addressable TAMs, and executing through nimble application teams that could self-test usability of the Priority Commerce engine; and three, prioritizing the optimization of the Priority Commerce Engine and its API as a foundational moat for emerging SaaS providers to connect to Priority Technology Holdings, Inc. for all modalities of payments, and sophisticated banking and treasury tools without the burdens required to manage compliance, regulatory requirements, or risk responsibilities.

These capabilities are important distinctions because while AI tools can dramatically affect the proliferation of app development and drive operating cost efficiency, they cannot replace money transmission licenses or regulatory requirements, or critical payment operations connections that influence the profitability of SaaS platforms. Last, I want to reflect on the ultimate bear story that AI will displace an overwhelming number of white-collar professionals, spike unemployment, and accelerate a transition to lower-paying jobs. Deep downside economic risks or potential outliers are why we continue to invest in defensive and early digital cycle segments like real estate, sports entertainment, health care, and auto.

Perhaps more compelling to consider is that the population of workers potentially considered most at risk from broad AI adoption is arguably the most likely segment to benefit from the services of CFTPay during a period of debt resolution or credit improvement. I would not call these predictions, but rather our purposefully positioned hedges to preserve long-term stability and consistent performance at Priority Technology Holdings, Inc. As always, I want to thank all of my colleagues at Priority Technology Holdings, Inc. for continuing to work incredibly hard to deliver results.

Your commitment and dedication to improving everything we do is clear, providing our partners and customers with a consistent reminder that they made the right choice to partner with Priority Technology Holdings, Inc. Finally, we continue to appreciate the ongoing support of our investors and analysts, and for those in attendance who are new to Priority Technology Holdings, Inc., for taking the time to participate in today's call. Operator, we would now like to open the call for questions.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question today comes from Vasundhara Govil with KBW. Please go ahead.

Vasundhara Govil: Hi. Thank you for taking my question. I guess just the first one on the macro environment. I know you have called out the pullback in restaurants, construction, and some other verticals. I am just curious if you are seeing a stabilization in that trend versus last quarter and sort of what is baked into your guide with respect to the macro environment?

Timothy O’Leary: Hi, Vasundhara. Thanks for the question. I think we have seen Q4 stabilize from what we saw in Q3. Obviously, Q3 caught us by a little bit of surprise as we moved through the quarter, which caused us to update our guidance for the full year. But I would say Q4 came right in line with what we expected from a volume standpoint and how we expected the macro environment to operate. I think as we think about the 2026 guidance, we have assumed a similar macro environment we are operating in now. We have not assumed any changes to the positive or the negative.

We really looked at some of the current trends we have seen from Q3 and Q4. Obviously, we saw a little bit of a slowdown in our core organic growth in the Merchant Solutions business in the second half of the year, and our guide reflects that in 2026 as you think about the organic along with the total growth rates on Merchant Solutions. And then we also have expected interest rate declines, which have some headwinds to the business overall, which we have also called out on some of the growth rates for the Payables and Treasury Solutions platforms.

Vasundhara Govil: Thank you very much. And I wanted to ask about the enterprise business pipeline as well. I know in the past you have talked about how the pipeline is really strong, particularly in the ISV space, but it can take some time to convert. The timelines can be variable. I am just looking for an update on both the pipeline and what you are seeing in terms of timelines for ramping within the customers.

Thomas Priore: Yes. I think, first off, pipeline remains strong. And in verticals we have reflected in the past, real estate, we are seeing very good adoption, but converting renters over, for instance, or property-level conversion just takes time and goes step by step. Sports and entertainment, kind of very similar circumstance. And then ISV adoption goes through the process of integration and release and then you work your way through the population of customers. Those sales cycles and conversion cycles are longer because it is less predictable. We have tried to be conservative in the way we have reflected that in guidance, and so nothing has changed in terms of the dynamic of adoption.

And if anything, it has reinforced our belief in investing in the commerce platform. And I will say all of those dynamics are what informs our outlook for 2026 and how we best manage it.

Vasundhara Govil: Appreciate the color. Thank you.

Operator: The next question comes from Jacob Stephan with Lake Street Capital Markets. Please go ahead.

Jacob Stephan: Hey, good morning, guys. Thanks for taking the questions. Maybe just to start out, average monthly enrollments. I know that I saw a sequential decrease into Q4, nothing out of the ordinary in terms of seasonality, but in Q3 I am wondering if you can correlate that with the significant ramp in partners, and also is there a potential to accelerate that average monthly enrollments number?

Timothy O’Leary: Thanks, Jacob. Good morning. As you noted, the slowdown in new enrollments in Q4 compared to Q3 is seasonal. That is a predictable pattern we see every year, and you should see an uptick again in Q1 as people come out of the holiday season and look to resolve some of their debts and their consumer wellness. So we will continue to see those types of trends. As you think about the broader environment for that platform, Thomas noted potentially some upside there as you see any uptick in unemployment as AI continues to have an impact on the white-collar employee base. But overall, we are just projecting very steady type growth.

We are not projecting any large uptick in enrollments until we see a change in the macro environment, and most of the new integrated partners that you are referencing that was disclosed in the earnings presentation, that is really coming on the non-CFTPay side of the business.

So as you think about how we continue to build the Treasury Solutions platform and the success we are having on the embedded finance side and working across the connected commerce engine, most of the new increase in partners is coming there, which is why you are seeing very high growth rates on the Passport side and even on the Priority Tech Ventures side where those are triple-digit type growth rates year over year. So where we continue to add a lot of new partners, there are not a lot of new partners to add on the CFTPay side.

We have leading market share there and continue to add small partners, but most of the growth is coming from the non-CFTPay side of Treasury Solutions as you think about the new integrated partners.

Jacob Stephan: Okay. Got it. That is helpful. And then maybe supplier-funded issuing dollars was down year over year on an absolute dollar basis, but you guys said that revenue was up 20% there. I am wondering if you can put some context behind those two data points.

Timothy O’Leary: Sure. Two components there moving against each other. The dollar volume, as you noted, was down largely due to one of our bank channel partners. One of the avenues we go to market there is through bank partners who use our automated payables platform on a white-label basis. One of those bank channel partners was acquired, so that contract was put on hold for a while. We have since re-won that contract with the larger bank that acquired them, so we are optimistic about that business overall still, but that did put a slowdown in some of the volume last year while they worked through that integration on the acquisition.

The uptick overall in the supplier-funded side was also from some of the balances we manage. We have an ACH.com business that sits within our payables platform, and balances there continue to grow as we continue to expand the ACH business and benefited from those larger float balances. So that was really the largest driver of the revenue growth on the supplier-funded side.

Jacob Stephan: Okay. Great. I appreciate all the color. Thanks, guys.

Operator: The next question comes from Brian Kinstlinger with Alliance Global Partners. Please go ahead.

Brian Kinstlinger: Great. Thanks, guys. Can you highlight the key strategic priorities and/or investments for 2026, especially as it relates to the growth ventures piece? And then maybe separately expand on how you are attacking the NIL sports and entertainment and other key markets, and touch on the competitive landscape in these markets right now.

Thomas Priore: Yes. Sure. From a standpoint of where we will invest, I think those investments have been made to establish platforms and, just taking a macro thesis sort of step back, each of them and where we will deploy are segments where collecting, storing, and sending money is an important part of the value chain, particularly from storing money as it gets repositioned in the commerce environments that they serve. Those are real estate, health care, the NIL and college sports arena, and I would say also we see some opportunities in international remittance. We will continue to go deep into those verticals. Most of those are sitting on legacy systems, legacy software providers.

To tie in a little bit of the AI theme that everyone has spoken about, we think we have been ahead of the game in building nimble platforms that are more comprehensive, provide more solutions to operators in that space, and can do so at a better price point because they are built on more modern technology stacks and not burdened by a lot of redundant expense. So we will continue to, and our guidance reflects that, invest in those high-growth areas. But we are already seeing the benefits of those, where conversion of larger players in real estate—specifically to your question on NIL, that environment is—we were on with a very large university.

Their comment was this is the best NIL platform, the most comprehensive NIL platform I have seen. So we know we have the right toolset. Now it is about driving adoption and distribution. So a lot of our construction work is done. It is now about sales. Those sales cycles are longer just given the nature of who the constituent is. You are going through either large institutions that are private institutions or public institutions. So just by the very nature of a state university, it takes time. Maybe it is going through an RFP. There are processes to get to the end game that we are really well positioned to win, but they take time to win.

So we feel really confident about where we are set, and now it is just about being relentlessly focused on execution as we have in the past.

Brian Kinstlinger: And then my second question, my follow-up is, you obviously gave EBITDA guidance. What does that equate to operating cash flow? And then how should we think about the cash or excess cash being used as it relates to paying down debt?

Thomas Priore: Sure. That is fine. Yes. So we—

Timothy O’Leary: If you think about operating cash flow, we did $36 million of operating cash flow in Q4. As I look at it from an EBITDA walk-down to free cash flow, it was $28 million. I take out some of the working capital changes, which I know we have spoken about, or in our mind somewhat timing issues since we are not a working capital-intensive business. So if I take that $28 million of free cash flow in Q4, there is no reason that should come down going into 2026. So if you annualize that, you are north of $110 million of free cash flow. I think that number will grow from where we finished out on Q4.

So we are a very cash flow positive business. We had $77 million of cash on the balance sheet at quarter end last year. So we have got plenty of liquidity, and we will continue to look at opportunities to pay down the debt. We have kept the balance sheet liquid right now, but we obviously generate a lot of cash flow. We can continue to address the debt this year and, I made the comment in my prepared remarks, but just to emphasize it, if you look at our leverage on a pro forma basis—so if you include a full-year effect of the acquisitions—we actually finished under four times leverage.

So we are 3.9 times if you give us a full-year credit for the acquired EBITDA. Obviously, that debt is already on the balance sheet. So we feel like we are in a very good position to continue to delever the balance sheet between free cash flow and just EBITDA growth.

Brian Kinstlinger: Great. Thanks, guys.

Operator: The next question comes from Bryan C. Bergin with TD Cowen. Please go ahead.

David Duca: Good morning. This is David Duca on for Bryan C. Bergin at TD Cowen. Just on overall strategy, as you look at the year ahead, are there any meaningful shifts in priorities, whether that is organic investment, M&A, or investing in those high margin segments?

Thomas Priore: No strategic shifts. What we have reflected in the past is what we expect to continue. We will look at some M&A opportunistically. I think as Timothy likes to note, we have a broad funnel but a very narrow filter for what comes through and we think is additive and accretive. So we are very discerning on M&A. And from a SaaS standpoint, I think particularly now, we have historically been very judicious, and we have conviction around where we invest and why. And that is—I think performance in that regard speaks for itself. So we are acutely focused on maintaining that discipline, particularly in an environment where AI is changing the landscape so quickly.

So I would say if anything, we are going to become more discerning, and we will be more value-seeking, to be candid.

Timothy O’Leary: I would add to that, though it is not a change in strategy, we are going to continue to emphasize growth going through direct sales on large enterprise-type opportunities. So we will continue to add top sales talent to attack that market. We continue to support wholeheartedly the reseller community across Merchant Solutions.

But as we continue to go up market on some of these enterprise sales, we will continue to add top sales talent there, which, as you think about the EBITDA guidance for the year, that is part of the reason you see the guide we have out, as we know we are going to continue to invest in the overall platform and team to continue to have the right type of pipeline from a future growth standpoint.

David Duca: Got it. Thank you for the extra color there.

Thomas Priore: If I can just point something out for you—and, Timothy, that is a really great observation—if you look at some of the announcements you have heard from peers, they are jettisoning talent. So we have been very intentional about the way we have built the business for these opportunities to emerge, so this is a year to capitalize on them, for sure, and that is going to—

David Duca: Okay. Thank you on that. So my follow-up to that is just on the 2026 guide, can you help us bridge the gap between gross profit and EBITDA growth? I know that you guys just touched on it there, but specifically, how much of that divergence is from the interest rate headwind and the investments?

Timothy O’Leary: I think it is mainly from the investments in the business, both personnel from a sales talent standpoint and continuing to add to the development team. We have also got a little bit lower capitalization rates. As Thomas mentioned, the construction is largely done; now it is execution. So as you go from construction mode to execution mode, you have less ability to capitalize certain development costs. So that is part of the impact as you go from gross profit to EBITDA. It is less about the interest rate headwind because that is going to be a headwind in gross profit as well. Obviously, it flows straight through, so it does have some impact there.

But most of the headwind you see on the interest rates is flowing through at the gross profit level also. It is mainly about investing in the business from a personnel and a technology standpoint.

David Duca: Thank you for answering my questions.

Operator: The next question comes from Dylan Hines with B. Riley Securities. Please go ahead.

Dylan Hines: Hey, I am on for Hal Goetsch. Thanks for taking the question. I was wondering about Payables. Payables EBITDA up 61% in 4Q on 13% revenue growth, which is very impressive operating leverage. I was wondering how sustainable is that trajectory? Is there a certain natural margin ceiling for Payables, and if the trajectory can hold, would it be from continued cost takeout or revenue scale?

Timothy O’Leary: We will continue to be very efficient in that business. There is not a lot of incremental personnel added to that from an operational side. It is really sales talent to continue to go after distribution channels. You also have the benefit in 2025 of the increase in balances on the ACH business, which I mentioned earlier. That flows through at a very high margin. So I think you will see EBITDA growth more closely correlate with revenue growth going forward. I do not think there is a big margin shift to be had in the Payables segment right now.

As we add some of the larger enterprise customers coming on for Payables, whether it is using buyer-funded or supplier-funded, some of those are coming on at larger volumes but with lower margins. So I think you will have an offset there between the two. I think operating efficiencies will offset some of the margin pressure you may see from larger customers, but I think you will see that growth rate more closely correlate with revenue growth.

Dylan Hines: Got it. Thank you.

Operator: This concludes our question and answer session. I would like to turn the call back over to Thomas Priore for any closing remarks.

Thomas Priore: Thank you very much. We would like to just express our appreciation to all of our investors and analysts who continue to support Priority Technology Holdings, Inc. Hope everyone has a great remainder of the week and the markets treat you well. Thank you, and have a great day.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.