Priority Technology Holdings Inc. Reports Strong Growth in 2024 Annual Report
Priority Technology Holdings Inc. has released its 2024 annual report, showcasing a robust financial performance with significant revenue growth across its business segments. The report highlights the company's ability to navigate challenges in the payment processing industry while capitalizing on strategic acquisitions and investments.
1. Company Overview
Priority Technology Holdings Inc. is a leading provider in the Payments and Banking-as-a-Service (BaaS) sector, recognized as the fifth largest non-bank merchant acquirer in the U.S., with an annual transaction volume of approximately $120 billion. The company serves around 860,000 active customers, focusing on small and medium-sized businesses (SMBs), B2B clients, and enterprise customers, leveraging its proprietary technology to drive operational efficiency and growth.
2. Revenue and Operating Results
For the fiscal year ended December 31, 2024, Priority Technology Holdings reported consolidated revenue of $879.7 million, which marks an impressive increase of 16.4% from $755.6 million in 2023. This growth was primarily driven by increased merchant bankcard processing volumes and transaction counts in the SMB Payments segment, alongside new enrollments and higher interest income in the Enterprise Payments segment. Additionally, the B2B Payments segment benefited from elevated transaction volumes and contributions from the acquisition of Plastiq.
Revenue Breakdown by Segments
The company operates through three primary segments: SMB Payments, B2B Payments, and Enterprise Payments.
- SMB Payments: Revenue reached $613.5 million, a 5.2% increase from $583.3 million in 2023. The segment's adjusted EBITDA slightly decreased to $108.9 million.
- B2B Payments: This segment saw remarkable growth, with revenue soaring to $89.1 million, a staggering increase of 116.5% from $41.2 million in the previous year. Adjusted EBITDA also improved to $7.6 million.
- Enterprise Payments: Revenue grew to $180.4 million, a 36.6% increase from $132.2 million in 2023. The segment's adjusted EBITDA rose significantly to $154.9 million.
3. Operating Expenses and Challenges
Operating expenses for the year totaled $1.1 billion, representing a 14.9% increase from $956.2 million in 2023. This rise in expenses can be attributed to higher costs associated with services, salaries, employee benefits, and interest expenses.
Despite the overall growth, the company faced challenges, including an increase in credit losses and margin compression in the SMB Payments segment. Furthermore, salary expenses in the Enterprise Payments segment escalated, impacting profitability.
4. Financial Statements Overview
Income Statement Highlights
Priority Technology's net income for 2024 was reported at -$23.96 million, compared to a loss of -$49.05 million in 2023. The operating income improved significantly to $133.4 million on revenues of $879.7 million, demonstrating enhanced operational efficiency.
| Mar 2024 | Mar 2025 | |
|---|---|---|
Net Income | -1.31M | 23.37M |
Net Income to Non-controlling Interest | 0 | 639K |
Profit | -1.31M | 24.01M |
Net Income Continuing | -1.31M | 24.01M |
Income Tax Expense | 8.46M | 13.26M |
Pretax Income | 7.15M | 37.28M |
Non-operating Income | -74.37M | -96.14M |
Operating Income | 81.52M | 133.4M |
Revenue | 755.6M | 879.7M |
Costs and Expenses | 674.0M | 746.2M |
Cost of Revenue | 480.3M | 551.6M |
Operating Expenses | 193.7M | 194.6M |
Depreciation, Depletion & Amortization | 68.39M | 58.04M |
Selling, General & Administrative | 45.41M | 47.40M |
Other Operating Expenses | 79.97M | 89.21M |
Balance Sheet Analysis
As of December 31, 2024, total assets stood at $1.82 billion, up from $1.61 billion in 2023. However, the company also reported total liabilities of $1.99 billion, resulting in total equity of -$165.0 million.
| Mar 2024 | Mar 2025 | |
|---|---|---|
Total Assets | 1.61B | 1.82B |
Total Current Assets | 881.2M | 1.10B |
Cash and Equivalents | 39.60M | 58.6M |
Accounts Receivable | 58.55M | 67.96M |
Notes and Loans Receivable | 1.46M | 3.63M |
Restricted Cash and Investments | 11.92M | 11.09M |
Prepaid Expenses | 13.27M | 22.99M |
Other Current Assets | 756.4M | 940.7M |
Total Non-current Assets | 734.0M | 721.7M |
Intangible Assets | 649.4M | 616.9M |
Non-current Accounts and Financing Receivable | 3.72M | 4.91M |
Non-current Deferred Tax Assets | 22.53M | 24.69M |
Net PP&E | 44.68M | 52.47M |
Other Non-current Assets | 13.64M | 22.71M |
Total Liabilities and Equity | 1.61B | 1.82B |
Temporary Equity and Redeemable Non-controlling Interest | 258.6M | 0 |
Total Liabilities | 1.50B | 1.99B |
Total Current Liabilities | 852.0M | 1.05B |
Accounts Payable and Accrued Liabilities | 52.64M | 62.14M |
Current Debt | 6.71M | 9.50M |
Other Current Liabilities | 792.7M | 980.0M |
Total Non-current Liabilities | 650.7M | 940.2M |
Long-term Debt | 631.9M | 920.8M |
Other Non-current Liabilities | 18.76M | 19.32M |
Total Equity and Non-controlling Interests | -146.0M | -165.0M |
Total Equity | -147.7M | -166.8M |
Non-controlling Interests | 1.65M | 1.81M |
Cash Flow Statement
The net change in cash for 2024 was $197.6 million, with robust cash flows from operating activities amounting to $85.6 million. The company successfully refinanced its debt, ensuring liquidity and operational flexibility going forward.
| Mar 2024 | Mar 2025 | |
|---|---|---|
Net Change in Cash | 235.6M | 197.6M |
Net Cash from Operating Activities | 81.25M | 85.60M |
Operating Profit | -1.31M | 24.01M |
Adjustment to Operating Profit | 82.56M | 61.59M |
Net Cash from Investing Activities | -55.74M | -35.54M |
Business & Interest in Affiliates | 28.22M | 0 |
Productive Assets | 27.90M | 32.18M |
Other Investing Activities | 376K | -3.36M |
Net Cash from Financing Activities | 210.1M | 147.5M |
Debt | 30.92M | 286.2M |
Dividends | 24.71M | 23.64M |
Equity Issuance/Repurchase | -1.25M | 278K |
Other Financing Activities | 205.1M | -115.3M |
5. Strategic Initiatives and Acquisitions
In 2023, Priority Technology acquired Plastiq, a move that contributed significantly to revenue growth in the B2B Payments segment. This strategic acquisition underscores the company’s commitment to expanding its service offerings and enhancing customer experience.
Additionally, the company announced a strategic technology partnership with Ahrvo Labs in April 2024, aimed at leveraging innovative solutions to improve service delivery and efficiency.
6. Legal Proceedings
Priority Technology is currently involved in various legal proceedings typical of its business operations. Notably, the company is a party to a class action lawsuit concerning alleged violations of the California Invasion of Privacy Act. The court has preliminarily approved a settlement agreement expected to have a nominal impact on the company's financial condition.
7. Conclusion
Overall, Priority Technology Holdings Inc. has demonstrated resilience and growth in its 2024 annual report, navigating challenges while seizing opportunities for expansion. With a solid financial foundation and strategic investments, the company is well-positioned for continued success in the competitive payment processing landscape.
