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What changed in Repay Holdings Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Repay Holdings Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+259 added−248 removedSource: 10-K (2025-03-03) vs 10-K (2024-02-29)

Top changes in Repay Holdings Corp's 2024 10-K

259 paragraphs added · 248 removed · 219 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeAcquisitions Our historical acquisition activity has allowed us to access new markets, expand our presence in existing markets, acquire industry talent, broaden our product suite, and supplement organic growth. Our current acquisition strategy focuses on integrated payments companies serving attractive vertical markets and opportunities to broaden our product offerings.
Biggest changeRevenues from these clients is cyclical because it is connected to U.S. election advertising spending which tends to increase significantly during periods which include congressional mid-term elections and presidential elections. Acquisitions Our historical acquisition activity has allowed us to access new markets, expand our presence in existing markets, acquire industry talent, broaden our product suite, and supplement organic growth.
These payments can be made using any of our payment channels, as further described below. o ACH Processing — Our ACH processing capabilities allow our clients to send and accept traditional and same-day ACH transactions. o ECash — Through third party relationships, we can facilitate customers who want to make payments with cash by converting it into digital payments that are deposited with our clients. o Digital Wallet Services — Enables consumers to quickly and easily pay using payment data securely stored in the digital wallets of their mobile devices. • Accounts Payable Automation o Virtual Credit Card Processing — Our virtual credit card product offering enables our clients to automate their payables transactions by sending single-use virtual credit cards to their suppliers. o Enhanced ACH Processing — Provides the same functionality as our standard ACH processing capability, but with the added benefit of incremental transaction and reconciliation data. • Clearing and Settlement – Our RCS platform offers ISOs and payment facilitators clearing and settlement solutions for all major card brands. 6 • Instant Funding — Our instant funding capabilities allow our clients to transfer funds directly to a consumer’s debit or prepaid card.
These payments can be made using any of our payment channels, as further described below. o ACH Processing — Our ACH processing capabilities allow our clients to send and accept traditional and same-day ACH transactions. o ECash — Through third party relationships, we can facilitate customers who want to make payments with cash by converting it into digital payments that are deposited with our clients. o Digital Wallet Services — Enables consumers to quickly and easily pay using payment data securely stored in the digital wallets of their mobile devices. • Accounts Payable Automation o Virtual Credit Card Processing — Our virtual credit card product offering enables our clients to automate their payables transactions by sending single-use virtual credit cards to their suppliers. o Enhanced ACH Processing — Provides the same functionality as our standard ACH processing capability, but with the added benefit of incremental transaction and reconciliation data. • Clearing and Settlement – Our RCS platform offers ISOs and payment facilitators clearing and settlement solutions for all major card brands. • Instant Funding — Our instant funding capabilities allow our clients to transfer funds directly to a consumer’s debit or prepaid card.
In addition, laws prohibiting these activities and other laws, rules and or regulations, including the Telemarketing Sales Rule, may directly impact the activities of certain of our clients, and in some cases may subject us, as the client’s payment processor or provider of certain services, to 12 investigations, fees, fines and disgorgement of funds if we are deemed to have aided and abetted or otherwise provided the means and instrumentalities to facilitate the illegal or improper activities of a client through our services.
In addition, laws prohibiting these activities and other laws, rules and or regulations, including the Telemarketing Sales Rule, may directly impact the activities of certain of our clients, and in some cases may subject us, as the client’s payment processor or provider of certain services, to investigations, fees, fines and disgorgement of funds if we are deemed to have aided and abetted or otherwise provided the means and instrumentalities to facilitate the illegal or improper activities of a client through our services.
We refer to these software providers as our “software integration partners.” An integration allows our sales force to readily access new client opportunities or respond to inbound leads because, in many cases, a business will prefer, or in some cases only consider, a payments provider that has already integrated or is able to integrate its solutions with the business’ primary enterprise management system.
We refer to these software providers as our “software integration partners.” An integration allows our sales force to readily access new client opportunities 4 or respond to inbound leads because, in many cases, a business will prefer, or in some cases only consider, a payments provider that has already integrated or is able to integrate its solutions with the business’ primary enterprise management system.
The business-to-business vertical relates to transactions occurring between a wide variety of enterprise clients, many of which operate in the automotive, field services, healthcare, homeowner association (“HOA”) management and hospitality industries, as well as educational institutions and governments and municipalities. Our go-to-market strategy combines direct sales with integrations with key software providers in our target verticals.
The business-to-business vertical relates to transactions occurring between a wide variety of enterprise clients, many of which operate in the automotive, field services, healthcare, homeowner association (“HOA”) management, hospitality and media industries, as well as educational institutions and governments and municipalities. Our go-to-market strategy combines direct sales with integrations with key software providers in our target verticals.
Our CMS, developed in conjunction with the Third Party Payment Processors Association, focuses on four main components — board and management oversight, a compliance program with written policies and procedures and employee training and monitoring, responsiveness to consumer complaints and annual compliance audits from an independent third party — and is inclusive of the Electronic Transaction Association guidelines on underwriting and risk.
Our CMS, developed in conjunction 7 with the Third Party Payment Processors Association, focuses on four main components — board and management oversight, a compliance program with written policies and procedures and employee training and monitoring, responsiveness to consumer complaints and annual compliance audits from an independent third party — and is inclusive of the Electronic Transaction Association guidelines on underwriting and risk.
We expect to benefit from this trend as our clients increasingly opt to process payments via the electronic forms of payment in which we specialize. 5 New Vertical Expansion We also expect that we will find attractive growth potential in certain verticals in which we currently have limited operations or do not operate.
We expect to benefit from this trend as our clients increasingly opt to process payments via the electronic forms of payment in which we specialize. New Vertical Expansion We also expect that we will find attractive growth potential in certain verticals in which we currently have limited operations or do not operate.
Our incident response team tests these systems each quarter to assess the effectiveness of our disaster recovery plan, including staff readiness and operational capability. Third Party Processors and Sponsor Banks We partner with institutions in the payment chain to provide authorization, settlement and funding services in connection with our clients’ transactions.
Our incident response team tests these systems each quarter to assess the effectiveness of our disaster recovery plan, including staff readiness and operational capability. 8 Third Party Processors and Sponsor Banks We partner with institutions in the payment chain to provide authorization, settlement and funding services in connection with our clients’ transactions.
Any new rules or regulations implemented by the CFPB, and other similar regulatory agencies in other jurisdictions, or pursuant to the Dodd-Frank Act that 11 are applicable to us or our clients’ businesses, or any adverse changes thereto, could increase our cost of doing business or limit our current offerings of integrated payment solutions.
Any new rules or regulations implemented by the CFPB, and other similar regulatory agencies in other jurisdictions, or pursuant to the Dodd-Frank Act that are applicable to us or our clients’ businesses, or any adverse changes thereto, could increase our cost of doing business or limit our current offerings of integrated payment solutions.
The integration of our technology with key software providers in the verticals that we serve, including loan management systems, dealer management systems (“DMS”), collection management systems, and enterprise resource planning software 4 systems, allows us to embed our omni-channel payment processing technology into our clients’ critical workflow software and ensure seamless operation of our solutions within our clients’ enterprise management systems.
The integration of our technology with key software providers in the verticals that we serve, including loan management systems, dealer management systems (“DMS”), collection management systems, and enterprise resource planning software systems, allows us to embed our omni-channel payment processing technology into our clients’ critical workflow software and ensure seamless operation of our solutions within our clients’ enterprise management systems.
Hawk Parent was formed in 2016 in connection with the acquisition of a majority interest in the successor entity of REPAY LLC and its subsidiaries by certain investment funds sponsored by, or affiliated with, Corsair Capital LLC (“Corsair”). Business Overview We are a leading payments technology company.
Hawk Parent was formed in 2016 in connection with the acquisition of a majority interest in the successor entity of REPAY LLC and its subsidiaries by certain investment funds sponsored by, or affiliated with, Corsair Capital LLC. Business Overview We are a leading payments technology company.
We expect to benefit from this trend as our clients increasingly opt to process payments via the electronic forms of payment in which we specialize. We have experienced in the past, and may continue to experience, seasonal fluctuations in our volumes and revenues as a result of consumer spending patterns.
We expect to benefit from this trend as our clients increasingly opt to process payments via the electronic forms of payment in which we specialize. We have experienced in the past, and may continue to experience, seasonal fluctuations in our revenues as a result of consumer spending patterns.
In addition, the Dodd-Frank Act gave the CFPB broad authority to prohibit “unfair, deceptive or abusive acts or practices” (“UDAAP”) in connection with the provision of consumer financial products and services. The CFPB has extended certain UDAAP-related provisions of the Dodd-Frank Act to directly apply to payment processors.
In addition, the Dodd-Frank Act gave the CFPB broad authority to prohibit “unfair, deceptive or abusive acts or practices” (“UDAAP”) in connection with the provision of consumer financial products and services. The CFPB has previously extended certain UDAAP-related provisions of the Dodd-Frank Act to directly apply to payment processors.
Many of the vertical markets in which we compete are continuing to shift from legacy payment mediums — primarily cash and check — to electronic forms of payment. In addition, 9 the COVID-19 pandemic and the resulting changes in consumer behavior has led to an accelerated shift to electronic payments.
Many of the vertical markets in which we compete are continuing to shift from legacy payment mediums — primarily cash and check — to electronic forms of payment. In addition, the COVID-19 pandemic and the resulting changes in consumer behavior has led to an accelerated shift to electronic payments.
Growth Strategies We intend to drive future growth in the following ways: Increase Penetration in Existing Verticals We expect to grow meaningfully by continuing to provide innovative payment solutions and client support to our existing clients as well as new clients in the verticals that we currently serve.
Growth Strategies We intend to drive future growth in the following ways: Increase Penetration in Existing Verticals We expect to grow by continuing to provide innovative payment solutions and client support to our existing clients as well as new clients in the verticals that we currently serve.
Our bank partners sponsor our adherence to the rules and standards of the payment networks and enable us to route transactions under the sponsor banks’ control and identification numbers (known as BIN for Visa and ICA for MasterCard) across the card and ACH networks to authorize and clear transactions.
Our bank partners sponsor our adherence to the rules and standards of the 13 payment networks and enable us to route transactions under the sponsor banks’ control and identification numbers (known as BIN for Visa and ICA for MasterCard) across the card and ACH networks to authorize and clear transactions.
This team also develops, maintains, tests and verifies our incident 8 response plan. Disaster recovery is built into our primary payment gateway through redundant hardware and software applications hosted in two distinct cloud regions.
This team also develops, maintains, tests and verifies our incident response plan. Disaster recovery is built into our primary payment gateway through redundant hardware and software applications hosted in two distinct cloud regions.
We are required to register with the payment networks through these bank 13 partners because we, as a payment processor, are not a “member bank” as defined by the major payment networks’ rules and standards governing access to those networks.
We are required to register with the payment networks through these bank partners because we, as a payment processor, are not a “member bank” as defined by the major payment networks’ rules and standards governing access to those networks.
Various federal and state regulatory enforcement agencies, including the Federal Trade Commission (“FTC”) and the states attorneys general, have authority to take action against payment processors who violate such laws, rules and regulations.
Various federal and 12 state regulatory enforcement agencies, including the Federal Trade Commission (“FTC”) and the states attorneys general, have authority to take action against payment processors who violate such laws, rules and regulations.
We plan to continue to drive operating leverage in our personnel expenditures, as we believe that, in general, we can process larger payment volumes without significant increases to our personnel and operating expenses. Strategic Acquisitions From January 1, 2016 through December 31, 2023, we have successfully acquired eleven businesses.
We plan to continue to drive operating leverage in our personnel expenditures, as we believe that, in general, we can process larger payment volumes without significant increases to our personnel and operating expenses. Strategic Acquisitions From January 1, 2016 through December 31, 2024, we have successfully acquired eleven businesses.
We intend to continue to strategically target verticals where we believe our ability to tailor payment solutions to our clients’ needs, our deep knowledge of our vertical markets and the embedded nature of our integrated payment solutions will drive strong growth by attracting new clients and fostering long-term client relationships.
We intend to continue to strategically target verticals where we believe our ability to tailor payment solutions to our clients’ needs, our deep knowledge of our vertical markets and the embedded nature of our integrated payment solutions will drive solid growth by attracting new clients and fostering long-term client relationships.
Volumes and revenues during the first quarter of the calendar year tend to increase in comparison to the remaining three quarters of the calendar year on a same store basis. This increase is due to consumers’ receipt of tax refunds and the increases in repayment activity levels that follow.
Revenues during the first quarter of the calendar year tend to increase in comparison to the 9 remaining three quarters of the calendar year on a same store basis. This increase is due to consumers’ receipt of tax refunds and the increases in repayment activity levels that follow.
We offer a comprehensive benefits package, which goes into effect on a person’s first day of employment, including 100% coverage of employee healthcare premiums and several benefits at no cost to our employees, including life insurance, telehealth, mental health and work-life balance resources. We perform a thorough review of our benefits package annually.
We offer a comprehensive benefits package, which goes into effect on a person’s first day of employment, including 100% coverage of employee healthcare premiums and several benefits at no cost to our employees, including health insurance, life insurance, short-term disability insurance, telehealth, mental health and work-life balance resources. We perform a thorough review of our benefits package annually.
If the client incurring the chargeback is unable to fund the refund to the card-issuing bank, we are required to do so by the rules of the payment networks and our contractual arrangements with our sponsor banks. During the year ended December 31, 2023, we believe our chargeback rate was under 1% of our payment volume.
If the client incurring the chargeback is unable to fund the refund to the card-issuing bank, we are required to do so by the rules of the payment networks and our contractual arrangements with our sponsor banks. During the year ended December 31, 2024, our chargeback rate was under 1% of our payment volume.
One of our priorities is to maintain and enhance our culture as we grow and integrate new team members. We participate in an annual employee engagement and feedback survey which allows all full-time employees to anonymously give us feedback on our workplace culture, employee programs, and more.
One of our priorities is to maintain and enhance our culture as we grow and bring on new team members. 14 We participate in an annual employee engagement and feedback survey which allows all full-time employees to anonymously give us feedback on our workplace culture, employee programs, and more.
Our integrated model fosters long-term relationships with our clients, which supports our volume retention rates that we believe are above industry averages. As of December 31, 2023, we maintained approximately 262 integrations with various software providers. Segments We report our financial results based on two reportable segments, Consumer Payments and Business Payments.
Our integrated model fosters long-term relationships with our clients, which supports our volume retention rates that we believe are above industry averages. As of December 31, 2024, we maintained approximately 280 integrations with various software providers. Segments We report our financial results based on two reportable segments, Consumer Payments and Business Payments.
We also maintain a sales support team that supports the onboarding process. Software Integration Partners As of December 31, 2023, we were integrated with approximately 262 software partners that are providers of our clients’ primary enterprise management systems. Our integrations are intended to ensure seamless delivery of our full suite of payment processing capabilities to our clients.
We also maintain a sales support team that supports the onboarding process. Software Integration Partners As of December 31, 2024, we were integrated with approximately 280 software partners that are providers of our clients’ primary enterprise management systems. Our integrations are intended to ensure seamless delivery of our full suite of payment processing capabilities to our clients.
In our Business Payments segment, our primary competitors include AvidXchange, Edenred Pay (a division of Edenred), Corpay (a division of FleetCor Technologies), Paya (a division of Nuvei Corporation) and Fortis.
In our Business Payments segment, our primary competitors include AvidXchange, Edenred Pay (a division of Edenred), Corpay, Paya (a division of Nuvei Corporation) and Fortis.
Additionally, new hire spotlights are socialized in our monthly newsletters to ensure new team members are introduced to the Company and receive a warm welcome and every one of our new employees has the opportunity to meet with our CEO for a “coffee chat” within their first month of employment.
Additionally, new hire spotlights are socialized in companywide channels to ensure new team members are introduced to the Company and receive a warm welcome and every one of our new employees has the opportunity to meet with our CEO for a “coffee chat” within their first month of employment.
Our top 10 clients, with an average tenure of approximately seven years, contributed approximately 18% and 15% of total gross profit during the year ended December 31, 2023 and the year ended December 31, 2022, respectively. Our leading competitive position and differentiated solutions have enabled us to realize unique advantages in fast-growing and strategically important segments of the payments market.
Our top 10 clients, with an average tenure of approximately seven years, contributed approximately 20% and 18% of total gross profit during the year ended December 31, 2024 and 2023, respectively. Our leading competitive position and differentiated solutions have enabled us to realize unique advantages in growing and strategically important segments of the payments market.
RCS is our proprietary clearing and settlement platform through which we market customizable payment processing programs to other ISOs and payment facilitators. The strategic vertical markets served by our Consumer Payments segment primarily include personal loans, automotive loans, receivables management, credit unions, mortgage servicing, consumer healthcare and diversified retail.
RCS is our proprietary clearing and settlement platform through which we market customizable payment processing programs to other independent sales organization (“ISOs”) and payment facilitators. The strategic vertical markets served by our Consumer Payments segment primarily include personal loans, automotive loans, receivables management, credit unions, mortgage servicing, consumer healthcare and diversified retail.
The strategic vertical markets served within our Business Payments segment primarily include retail automotive, education, field services, governments and municipalities, healthcare, HOA management and hospitality. Our Business Payments segment represented approximately 13% of our total revenue after any intersegment eliminations for the year ended December 31, 2023.
The strategic vertical markets served within our Business Payments segment primarily include retail automotive, education, field services, governments and municipalities, healthcare, media, HOA management and hospitality. Our Business Payments segment represented approximately 17% of our total revenue after any intersegment eliminations for the year ended December 31, 2024.
The Dodd-Frank Act also created the Consumer Financial Protection Bureau (the “CFPB”), which has rulemaking authority over consumer protection laws, including the authority to regulate consumer financial products in the United States, including consumer credit, deposit, payment, and similar products.
The Dodd-Frank Act also created the Consumer Financial Protection Bureau (the “CFPB”), which was vested with rulemaking authority over consumer protection laws, including the authority to regulate consumer financial products in the United States, including consumer credit, deposit, payment, and similar products.
We recognize the importance of giving back to the communities in which we live. Participating in community outreach initiatives and volunteer opportunities is extremely important to our employees and has become an integral part of our corporate culture. Throughout the year, we provide multiple ways for team members to volunteer and positively impact the surrounding communities.
Participating in community outreach initiatives and volunteer opportunities is extremely important to our employees and has become an integral part of our corporate culture. Throughout the year, we provide multiple ways for team members to volunteer and positively impact the surrounding communities.
Human Capital Our employees are a critical component of our success. As of December 31, 2023, we employed approximately 512 full-time employees throughout the U.S. We have 7 office locations with an employee presence and have a remote employee presence in 33 states. None of our employees are represented by a labor union or covered by a collective bargaining agreement.
Human Capital Our employees are a critical component of our success. As of December 31, 2024, we employed approximately 465 full-time employees throughout the U.S. We have 5 office locations with an employee presence and have a remote employee presence throughout the U.S. None of our employees are represented by a labor union or covered by a collective bargaining agreement.
In 2023, 83% of participants responded that REPAY is a great place to work. Our employees’ feedback from the annual surveys have allowed us to be 14 certified as a Great Place to Work® for the last seven consecutive years.
In 2024, 82% of participants responded that REPAY is a great place to work. Our employees’ feedback from the annual surveys have allowed us to be certified as a Great Place to Work® for the last eight consecutive years.
PaidSuite was an electronic payment solutions provider to the receivable management industry. The transaction accelerated our growth into the receivable management space via client and software integration partner relationships. Paymaxx Acquisition On December 15, 2017, we acquired substantially all of the assets of Paymaxx Pro, LLC (“Paymaxx”).
PaidSuite Acquisition On September 28, 2017, we acquired substantially all of the assets of PaidSuite, Inc. and PaidMD, LLC (collectively, “PaidSuite”). PaidSuite was an electronic payment solutions provider to the receivable management industry. The transaction accelerated our growth into the receivable management space via client and software integration partner relationships.
The acquisition of Ventanex accelerated our entry into the mortgage and healthcare payments verticals. cPayPlus Acquisition On July 23, 2020, we acquired all of the equity interest of cPayPlus, LLC (“cPayPlus”).
Ventanex Acquisition On February 10, 2020, we acquired all of the equity interests of CDT Technologies, LTD. d/b/a Ventanex (“Ventanex”). The acquisition of Ventanex accelerated our entry into the mortgage and healthcare payments verticals. cPayPlus Acquisition On July 23, 2020, we acquired all of the equity interest of cPayPlus, LLC (“cPayPlus”).
Sigma was an electronic payment solutions provider to the automotive finance industry. The transaction marked our expansion into the automotive finance space. We have benefited greatly from Sigma’s deep integrations with automotive finance software platforms, or DMS. PaidSuite Acquisition On September 28, 2017, we acquired substantially all of the assets of PaidSuite, Inc. and PaidMD, LLC (collectively, “PaidSuite”).
Sigma Acquisition Effective as of January 1, 2016, we acquired substantially all of the assets of Sigma Payment Solutions, Inc. (“Sigma”). Sigma was an electronic payment solutions provider to the automotive finance industry. The transaction marked our expansion into the automotive finance space. We have benefited greatly from Sigma’s deep integrations with automotive finance software platforms, or DMS.
TriSource Acquisition On August 14, 2019, we acquired all of the equity interests of TriSource Solutions, LLC (“TriSource”). Since 2012, we have used TriSource as one of our primary third-party processors for settlement solutions when we facilitate transactions as a merchant acquirer. The acquisition of TriSource has provided further control over our transaction processing ecosystem and accelerated product delivery capabilities.
Since 2012, we have used TriSource as one of our primary third-party processors for settlement solutions when we facilitate transactions as a merchant acquirer. The acquisition of TriSource has provided further control over our transaction processing ecosystem and accelerated product delivery capabilities. We now generally refer to our clearing and settlement product offerings as RCS.
The above payment acceptance and funding methods are processed through our proprietary payment channels: • Web-based o Virtual Terminal — A terminal that provides virtual payment access for processing of ACH or card transactions. o Hosted Payment Page — A client-branded terminal that enables ACH and card transaction processing. o Online Client Portal — A consumer-facing, client-specific website that gives a client’s customer the ability to pay online and view account information anywhere, anytime.
We have created a proprietary process that decreases processing delays typically associated with traditional fund disbursements. • Communication Solutions — As an ancillary offering to our payment processing solutions, we provide clients document processing and mailing services, including document printing, billing statements, image printing, and check printing. 6 The above payment acceptance and funding methods are processed through our proprietary payment channels: • Web-based o Virtual Terminal — A terminal that provides virtual payment access for processing of ACH or card transactions. o Hosted Payment Page — A client-branded terminal that enables ACH and card transaction processing. o Online Client Portal — A consumer-facing, client-specific website that gives a client’s customer the ability to pay online and view account information anywhere, anytime.
Operations We believe that we have developed an effective operations system, including our proprietary onboarding, compliance and client oversight processes, which is structured to enhance the performance of our platform and support our clients. 7 Client and Transaction Risk Management We target clients that we identify as low-risk through the development of underwriting policies and transaction management procedures to manage approval of new accounts and to establish ongoing monitoring of client accounts.
Operations We believe that we have developed an effective operations system, including our proprietary onboarding, compliance and client oversight processes, which is structured to enhance the performance of our platform and support our clients.
We now generally refer to our clearing and settlement product offerings as RCS. APS Acquisition On October 14, 2019, we acquired substantially all of the assets of American Payment Services of Coeur D’Alene, LLC, North American Payment Solutions LLC, and North American Payment Solutions Inc. (collectively, “APS”) .
APS Acquisition On October 14, 2019, we acquired substantially all of the assets of American Payment Services of Coeur D’Alene, LLC, North American Payment Solutions LLC, and North American Payment Solutions Inc. (collectively, “APS”) . The acquisition of APS meaningfully expanded our addressable market by enabling us to access the business-to-business vertical.
We continue to develop formal career pathing, allowing us to create a roadmap for an individual’s career progression within the organization. Our compensation strategy gives us competitive advantages by offering competitive salaries, bonus potential and employee ownership opportunities for a meaningful portion of our employees through equity incentive grants.
Our compensation strategy gives us competitive advantages by offering competitive salaries, bonus potential and employee ownership opportunities for a meaningful portion of our employees through equity incentive grants. We recognize the importance of giving back to the communities in which we live.
Strengthen and Extend Our Solution Portfolio through Continued Innovation As we further integrate our solution into our clients’ workflows, we will look to continue to innovate on our solution set and broaden our suite of services.
Though we offer highly customized payment solutions to our clients, our core technology platform is comprehensive and can be utilized to penetrate other strategic vertical markets. 5 Strengthen and Extend Our Solution Portfolio through Continued Innovation As we further integrate our solution into our clients’ workflows, we will look to continue to innovate on our solution set and broaden our suite of services.
Our Consumer Payments segment also previously included our Blue Cow Software business (“BCS”), which was sold on February 15, 2023. Our Consumer Payments segment represented approximately 87% of our total revenue after any intersegment eliminations for the year ended December 31, 2023.
Our Consumer Payments segment represented approximately 83% of our total revenue after any intersegment eliminations for the year ended December 31, 2024.
From January 1, 2016 through December 31, 2023, we have completed eleven acquisitions, which are described below. These acquisitions were of payment companies and are representative of the acquisitions we envision consummating in the future. Sigma Acquisition Effective as of January 1, 2016, we acquired substantially all of the assets of Sigma Payment Solutions, Inc. (“Sigma”).
Our current acquisition strategy focuses on integrated payments companies serving attractive vertical markets and opportunities to broaden our product offerings. From January 1, 2016 through December 31, 2024, we have completed eleven acquisitions, which are described below. These acquisitions were of payment companies and are representative of the acquisitions we envision consummating in the future.
The acquisition of Paymaxx has been highly complementary to our earlier acquisition of Sigma and has bolstered our position in the automotive finance market. As part of the acquisition, we acquired increased distribution capabilities in the form of an internal sales force and numerous DMS integrations.
Paymaxx Acquisition On December 15, 2017, we acquired substantially all of the assets of Paymaxx Pro, LLC (“Paymaxx”). The acquisition of Paymaxx has been highly complementary to our earlier acquisition of Sigma and has bolstered our position in the automotive finance market.
In addition, various states have recently enacted laws concerning privacy, data protection and information security.
In addition, various states have recently enacted laws concerning privacy, data protection and information security. These laws commonly require businesses to disclose their data collection and usage practices, provide consumers with access to their personal data, and offer mechanisms to limit certain data processing activities.
We value diverse backgrounds, perspectives and experiences, and we are committed to providing an inclusive environment where all individuals are heard and respected. We maintain an Employee Resource Group aimed at connecting and creating a network for women at REPAY. This group meets several times throughout the year to discuss relevant topics and connect with others at the Company.
We value diverse backgrounds, perspectives and experiences, and we are committed to providing an inclusive environment where all individuals are respected. We continue to develop formal career pathing, allowing us to create a roadmap for an individual’s career progression within the organization.
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Since a significant portion of our revenue is derived from volume-based payment processing fees, card payment volume is a key operating metric that we use to evaluate our business. We processed approximately $25.7 billion of total card payment volume in 2023.
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Client and Transaction Risk Management We target clients that we identify as low-risk through the development of underwriting policies and transaction management procedures to manage approval of new accounts and to establish ongoing monitoring of client accounts.
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Though we offer highly customized payment solutions to our clients, our core technology platform is comprehensive and can be utilized to penetrate other strategic vertical markets.
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We have also experienced in the past, and may continue to experience, cyclical fluctuations in our revenues as a result of our clients that focus on political advertising within our media vertical.
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We have created a proprietary process that decreases processing delays typically associated with traditional fund disbursements. • Communication Solutions — As an ancillary offering to our payment processing solutions, we provide clients document processing and mailing services, including document printing, billing statements, image printing, and check printing.
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As part of the acquisition, we acquired increased distribution capabilities in the form of an internal sales force and numerous DMS integrations. TriSource Acquisition On August 14, 2019, we acquired all of the equity interests of TriSource Solutions, LLC (“TriSource”).
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The acquisition of APS meaningfully expanded our addressable market by enabling us to access the business-to-business vertical. Ventanex Acquisition On February 10, 2020, we acquired all of the equity interests of CDT Technologies, LTD. d/b/a Ventanex (“Ventanex”).
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For example, the CFPB announced in June 2024 that the “Small Dollar Lending Rule” will become effective on March 30, 2025, though current uncertainty about the CFPB’s funding and activity may impact its implementation.
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For example, the California Consumer Privacy Act of 2018 (the “CCPA”), which went into effect on January 1, 2020 and was amended by the California Privacy Rights Act of 2020 (the “CRPA”), for which most provisions were effective on January 1, 2023, requires companies that process personal information of California residents to make certain disclosures to consumers about data practices, grants consumers specific access rights to their data, allows consumers to opt out of certain data sharing activities and creates a private right of action for data breaches.
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This rule generally prohibits certain lenders from attempting to withdraw 11 money from a borrower’s account after two consecutive failed attempts and requires certain lenders to provide specific written notice to consumers before making certain payment attempts.
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The CPRA also establishes a privacy enforcement agency known as the California Privacy Protection Agency. At least 12 other states have enacted similar laws and regulations, and other states are expected to enact new similar laws and regulations in the near future.
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Additionally, many of these laws impose obligations for safeguarding personal information and establish enforcement mechanisms, including penalties for non-compliance. As state regulations vary and are frequently updated, we are required to continually monitor and adapt to these legal requirements to ensure compliance across the jurisdictions in which we operate.
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We have also partnered with diverse organizations and higher education programs to identify a more diverse pool of qualified candidates for recruitment. Our diversity and inclusion initiatives are periodically reviewed and discussed at the board level.
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We are also subject to the Telephone Consumer Protection Act (“TCPA”) and various state laws to the extent we place telephone calls and text messages to or on behalf of our customers. The TCPA imposes restrictions on, among other things, the use of automated telephone dialing systems, prerecorded voice messages and unsolicited faxes.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeTo the extent that we do not distribute such excess cash as dividends on Class A common stock or otherwise undertake ameliorative actions between Post-Merger Repay Units and shares of Class A common stock and instead, for example, hold such cash balances, Repay Unitholders that hold interests in Hawk Parent pre-Business Combination may benefit from any value attributable to such cash balances as a result of their ownership of Class A common stock following an exchange of their Post-Merger Repay Units, notwithstanding that such holders may previously have participated as holders of Post-Merger Repay Units in distributions by Hawk Parent that resulted in such excess cash balances being held by us.
Biggest changeTo the extent that we do not distribute such excess cash as dividends on Class A common stock or otherwise undertake ameliorative actions between Post-Merger Repay Units and shares of Class A common stock and instead, for example, hold such cash balances, Repay Unitholders that hold interests in Hawk Parent pre-Business Combination may benefit from any value attributable to such cash balances as a result of their ownership of Class A common stock following an exchange of their Post-Merger Repay Units, notwithstanding that such holders may previously have participated as holders of Post-Merger Repay Units in distributions by Hawk Parent that resulted in such excess cash balances being held by us. 31 Dividends on our common stock, if any, will be paid at the discretion of our board of directors, which will consider, among other things, our business, operating results, financial condition, current and expected cash needs, plans for expansion and any legal or contractual limitations on our ability to pay such dividends.
Although we expect to continue to execute our acquisition strategy: • we may not be able to identify suitable acquisition candidates or acquire additional assets on favorable terms; • we may compete with others to acquire assets, which competition may increase, and any level of competition could result in decreased availability or increased prices for acquisition candidates; • competing bidders for such acquisitions may be larger, better-funded organizations with more resources and easier access to capital; • we may experience difficulty in anticipating the timing and availability of acquisition candidates; 24 • we may not be able to obtain the necessary financing, on favorable terms or at all, to finance any of our potential acquisitions; • potential acquisitions may be subject to regulatory approvals, which may cause delays and uncertainties; and • we may not be able to generate cash necessary to execute our acquisition strategy.
Although we expect to continue to execute our acquisition strategy: 24 • we may not be able to identify suitable acquisition candidates or acquire additional assets on favorable terms; • we may compete with others to acquire assets, which competition may increase, and any level of competition could result in decreased availability or increased prices for acquisition candidates; • competing bidders for such acquisitions may be larger, better-funded organizations with more resources and easier access to capital; • we may experience difficulty in anticipating the timing and availability of acquisition candidates; • we may not be able to obtain the necessary financing, on favorable terms or at all, to finance any of our potential acquisitions; • potential acquisitions may be subject to regulatory approvals, which may cause delays and uncertainties; and • we may not be able to generate cash necessary to execute our acquisition strategy.
Moreover, the Tax Receivable Agreement provides that, in the event that (i) we exercise our early termination rights under the Tax Receivable Agreement, (ii) we become bankrupt or undergo a similar insolvency event, (iii) certain changes of control of us occur (as described in the Tax Receivable Agreement) or (iv) we are more than three months late in making of a payment due under the Tax Receivable Agreement (unless we in good faith determine that we have insufficient funds to make such payment), our obligations under the Tax Receivable Agreement will accelerate and we will be required to make an immediate lump-sum cash payment to the Repay Unitholders equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement, which lump-sum payment would be based on certain assumptions, including those relating to our future taxable income.
Moreover, the Tax Receivable Agreement provides that, in the event that (i) we exercise our early termination rights under the Tax Receivable Agreement, (ii) we become bankrupt or undergo a similar insolvency event, (iii) certain changes of 32 control of us occur (as described in the Tax Receivable Agreement) or (iv) we are more than three months late in making of a payment due under the Tax Receivable Agreement (unless we in good faith determine that we have insufficient funds to make such payment), our obligations under the Tax Receivable Agreement will accelerate and we will be required to make an immediate lump-sum cash payment to the Repay Unitholders equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement, which lump-sum payment would be based on certain assumptions, including those relating to our future taxable income.
Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware, or if such court does not have subject matter jurisdiction, any other court located in the State of Delaware with subject matter jurisdiction, will be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, other employees or stockholders to us or our stockholders, (iii) any action asserting a claim against us or our officers or directors arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (iv) any action 34 asserting a claim against us or any of our directors or officers governed by the internal affairs doctrine of the law of the State of Delaware.
Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware, or if such court does not have subject matter jurisdiction, any other court located in the State of Delaware with subject matter jurisdiction, will be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, other employees or stockholders to us or our stockholders, (iii) any action asserting a claim against us or our officers or directors arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (iv) any action asserting a claim against us or any of our directors or officers governed by the internal affairs doctrine of the law of the State of Delaware.
In addition, provisions of the Dodd-Frank Act that prohibit unfair, deceptive or abusive acts or practices, the Telemarketing Sales Act and other laws, rules and/or regulations, may directly impact the activities of certain of our clients, and in some cases may subject us, as the electronic payment processor or provider of payment settlement services, to investigations, fees, fines and disgorgement of funds if we are found to have improperly aided and abetted or otherwise provided the means and instrumentalities to facilitate the illegal or improper activities of a client through our services.
In addition, provisions of the Dodd-Frank Act that prohibit unfair, deceptive or abusive acts or practices, the Telemarketing Sales Act and other laws, rules and/or regulations, may directly impact the activities of certain of our clients, and in some cases may subject us, as the electronic 27 payment processor or provider of payment settlement services, to investigations, fees, fines and disgorgement of funds if we are found to have improperly aided and abetted or otherwise provided the means and instrumentalities to facilitate the illegal or improper activities of a client through our services.
Any claim from third parties may result in a limitation on our ability to use the intellectual property subject to these claims. Additionally, in recent years, individuals and groups have been purchasing intellectual property assets for the sole purpose of making claims of infringement or other violations and attempting to extract settlements from companies like us.
Any claim from third parties may result in a limitation on our ability to use the intellectual property subject to these claims. Additionally, in recent years, individuals and groups have been purchasing intellectual property assets for the sole purpose of making claims of infringement or other violations and attempting to extract settlements 23 from companies like us.
Additionally, as our products and services evolve, and as regulators continue to increase their scrutiny of compliance with these obligations, we may be subject to a variety of additional laws and regulations, or we may be 26 required to further revise or expand our compliance management system, including the procedures we use to verify the identity of our clients and their end customers and to monitor transactions.
Additionally, as our products and services evolve, and as regulators continue to increase their scrutiny of compliance with these obligations, we may be subject to a variety of additional laws and regulations, or we may be required to further revise or expand our compliance management system, including the procedures we use to verify the identity of our clients and their end customers and to monitor transactions.
A sustained deterioration in general economic conditions, particularly in the United States, continued uncertainty for an extended period of time, persistent inflation or further increases in interest rates, could adversely affect our financial performance by reducing the number or aggregate volume of transactions made using electronic payments.
A sustained deterioration in general economic conditions, particularly in the United States, continued uncertainty for an extended period of time, persistent inflation or increases in interest rates, could adversely affect our financial performance by reducing the number or aggregate volume of transactions made using electronic payments.
If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed. As part of our ongoing monitoring of internal control, we have discovered in the past and may discover in the future material weaknesses or significant deficiencies in internal control that require remediation.
If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed. As part of our ongoing monitoring of internal control, we have discovered 28 in the past and may discover in the future material weaknesses or significant deficiencies in internal control that require remediation.
The occurrence of any of these factors could adversely affect our growth strategy. Our acquisitions subject us to a variety of risks that could harm our business and the anticipated benefits from our acquisitions may not be realized on the expected timeline or at all.
The occurrence of any of these factors could continue to adversely affect our growth strategy. Our acquisitions subject us to a variety of risks that could harm our business and the anticipated benefits from our acquisitions may not be realized on the expected timeline or at all.
For example, if a takeover constitutes a fundamental change, then we will be required to make an offer to the holders of the 2026 Notes to repurchase for cash all or part of their outstanding 2026 Notes. In addition, if a takeover constitutes a make-whole fundamental change, then we may be required to increase the conversion rate temporarily.
For example, if a takeover constitutes a fundamental change, then we will be required to make an offer to the holders of the Notes to repurchase for cash all or part of their outstanding Notes. In addition, if a takeover constitutes a make-whole fundamental change, then we may be required to increase the conversion rate temporarily.
To provide our merchant acquiring services, we are registered through our sponsor banks with the Visa and MasterCard networks as a service provider for member institutions. As such, we, our sponsor banks and many of our 18 clients are subject to complex and evolving payment network rules.
To provide our merchant acquiring services, we are registered through our sponsor banks with the Visa and MasterCard networks as a service provider for member institutions. As such, we, our sponsor banks and many of our clients are subject to complex and evolving payment network rules.
The Amended Credit Agreement imposes restrictions that could impede our ability to enter into certain corporate transactions, as well as increases our vulnerability to adverse economic and industry conditions, by limiting our flexibility in planning for, and reacting to, changes in our business and industry.
The Second Amended Credit Agreement imposes restrictions that could impede our ability to enter into certain corporate transactions, as well as increases our vulnerability to adverse economic and industry conditions, by limiting our flexibility in planning for, and reacting to, changes in our business and industry.
The conditional conversion feature of the 2026 Notes, if triggered, may adversely affect our financial condition and operating results. In the event the conditional conversion feature of the 2026 Notes is triggered, holders of the 2026 Notes will be entitled to convert their 2026 Notes at any time during specified periods at their option.
The conditional conversion feature of the 2026 Notes and the 2029 Notes, if triggered, may adversely affect our financial condition and operating results. In the event the conditional conversion feature of the 2026 Notes is triggered, holders of the 2026 Notes will be entitled to convert their 2026 Notes at any time during specified periods at their option.
These increases in tax basis may increase (for tax 31 purposes) depreciation and amortization deductions and therefore reduce the amount of income or franchise tax that we would otherwise be required to pay in the future had such exchanges never occurred.
These increases in tax basis may increase (for tax purposes) depreciation and amortization deductions and therefore reduce the amount of income or franchise tax that we would otherwise be required to pay in the future had such exchanges never occurred.
Similarly, our clients could be adversely affected by any bank failure or other adverse event involving 25 their financial institution relationships, which could result in a decrease in the amount of payment volume we receive from these clients.
Similarly, our clients could be adversely affected by any bank failure or other adverse event involving their financial institution relationships, which could result in a decrease in the amount of payment volume we receive from these clients.
To the extent we are processing payments or providing products and services for a client suspected of 27 violating such laws, rules and regulations, we may face enforcement actions and incur losses and liabilities that may adversely affect our business.
To the extent we are processing payments or providing products and services for a client suspected of violating such laws, rules and regulations, we may face enforcement actions and incur losses and liabilities that may adversely affect our business.
If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness, repurchase, make interest payments on or make cash payments upon conversion of the 2026 Notes.
If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness, repurchase, make interest payments on or make cash payments upon conversion of the Notes.
Our ability to pay taxes, make payments under the Tax Receivable Agreement, meet our financial obligations under the 2026 Notes and pay dividends will depend on the financial results and cash flows of Hawk Parent and its subsidiaries and the distributions we receive from Hawk Parent.
Our ability to pay taxes, make payments under the Tax Receivable Agreement, meet our financial obligations under the Notes and pay dividends will depend on the financial results and cash flows of Hawk Parent and its subsidiaries and the distributions we receive from Hawk Parent.
In addition, upon conversion of the 2026 Notes, unless we elect to cause to be delivered solely shares of our Class A common stock to settle such conversion, we will be required to make cash payments in respect of the 2026 Notes being converted.
Upon conversion of the 2026 Notes, unless we elect to cause to be delivered solely shares of our Class A common stock to settle such conversion, we will be required to make cash payments in respect of the 2026 Notes being converted.
However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the 2026 Notes surrendered therefor or to pay cash with respect to the 2026 Notes being converted.
However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the Notes surrendered therefor or to pay cash with respect to the Notes being converted.
Our consumer finance and mortgage clients may be disproportionately impacted by further increased interest rates or a general economic downturn, which could result in a decrease to our revenue and profits.
Our consumer finance and mortgage clients may be disproportionately impacted by increased interest rates or a general economic downturn, which could result in a decrease to our revenue and profits.
In addition, our ability to repurchase the 2026 Notes or to pay cash upon conversion of the 2026 Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness.
In addition, our ability to repurchase the Notes or to pay cash upon conversion of the Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness.
Depending on how our products and services evolve, we may be subject to a variety of additional laws and regulations, including those governing money transmission, gift cards and other prepaid access instruments, electronic funds transfers, anti-money laundering, counter-terrorist financing, restrictions on foreign assets, gambling, banking and lending, and import and export restrictions.
Depending on how our products and services evolve, we may be subject to a variety of additional laws and regulations, including those governing money transmission, gift cards and other prepaid access instruments, electronic funds transfers, 26 anti-money laundering, counter-terrorist financing, restrictions on foreign assets, banking and lending, and import and export restrictions.
In addition, the Amended Credit Agreement contains certain negative covenants that restrict the incurrence of indebtedness unless certain incurrence-based financial covenant requirements are met.
In addition, the Second Amended Credit Agreement contains certain negative covenants that restrict the incurrence of indebtedness unless certain incurrence-based financial covenant requirements are met.
Our ability to service our obligations under our indebtedness, including the 2026 Notes and any indebtedness we may incur under the Amended Credit Agreement, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
Our ability to service our obligations under our indebtedness, including the 2026 Notes, the 2029 Notes and any indebtedness we may incur under the Second Amended Credit Agreement, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
Among other things, our certificate of incorporation and bylaws include provisions regarding: • the ability of our board of directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the requirement that directors may only be removed from the board of directors for cause (until our 2024 annual meeting of stockholders, at which time this provision will terminate); • a prohibition on stockholder action by written consent (except in limited circumstances), which forces stockholder action to be taken at an annual or special meeting of stockholders and could delay the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors; • the requirement that a special meeting of stockholders may be called only by our board of directors, the chairman of our board of directors or our chief executive officer, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • controlling the procedures for the conduct and scheduling of our board of directors and stockholder meetings; • the ability of our board of directors to amend our bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend our bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Among other things, our certificate of incorporation and bylaws include provisions regarding: • the ability of our board of directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • a prohibition on stockholder action by written consent (except in limited circumstances), which forces stockholder action to be taken at an annual or special meeting of stockholders and could delay the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors; • the requirement that a special meeting of stockholders may be called only by our board of directors, the chairman of our board of directors or our chief executive officer, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • controlling the procedures for the conduct and scheduling of our board of directors and stockholder meetings; • the ability of our board of directors to amend our bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend our bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
The CFPB and the FTC devote substantial attention to debt collection activities, and, as a result, the CFPB and the FTC have brought multiple investigations and enforcement actions against debt collectors for violations of the FDCPA and other applicable laws.
The CFPB and the FTC have devoted substantial attention to debt collection activities, and, as a result, the CFPB and the FTC have brought multiple investigations and enforcement actions against debt collectors for violations of the FDCPA and other applicable laws.
We have established systems and procedures to detect and reduce the impact of business fraud, but these measures may not be effective, and incidents of fraud could increase in the future. During the year ended December 31, 2023, we believe our chargeback rate was less than 1% of payment volume.
We have established systems and procedures to detect and reduce the impact of business fraud, but these measures may not be effective, and incidents of fraud could increase in the future. During the year ended December 31, 2024, our chargeback rate was less than 1% of payment volume.
In a fraudulent card-not-present transaction, even if the merchant receives authorization for the transaction, the merchant may be liable for any loss arising from the transaction. In addition, consumers may dispute repayments on a loan by claiming it was unlawful under applicable law.
In a fraudulent card-not-present transaction, even if the merchant receives authorization for the transaction, the merchant may be liable for any loss arising from the transaction. In addition, consumers may dispute repayments on a loan or other obligation by claiming it was unlawful under applicable law.
However, Hawk Parent may elect to settle such exchange in cash in lieu of delivering shares of our Class A common stock pursuant to the terms of the Exchange Agreement. In addition, we have reserved a total of 13,826,728 shares of Class A common stock for issuance under our Repay Holdings Corporation Omnibus Incentive Plan (as amended, the “Incentive Plan.”).
However, Hawk Parent may elect to settle such exchange in cash in lieu of delivering shares of our Class A common stock pursuant to the terms of the Exchange Agreement. In addition, we have reserved a total of 22,226,728 shares of Class A common stock for issuance under our Repay Holdings Corporation Omnibus Incentive Plan (as amended, the “Incentive Plan.”).
Holders of the 2026 Notes have the right to require us to repurchase their 2026 Notes upon the occurrence of a fundamental change at a repurchase price equal to 100% of their principal amount, plus accrued and unpaid interest, if any.
Holders of the 2026 Notes and the 2029 Notes (together “Notes”) have the right to require us to repurchase their Notes upon the occurrence of a fundamental change at a repurchase price equal to 100% of their principal amount, plus accrued and unpaid interest, if any.
Provisions in the indenture could delay or prevent an otherwise beneficial takeover of the Company Certain provisions of the 2026 Notes and the indenture could make a third party attempt to acquire us more difficult or expensive.
Provisions in the indentures could delay or prevent an otherwise beneficial takeover of the Company Certain provisions of the Notes and the indentures could make a third party attempt to acquire us more difficult or expensive.
Any judgments or settlements in any pending or future claims, litigation or investigations could have a material adverse effect on our business, financial condition and results of operations. We may not be able to successfully execute our strategy of growth through acquisitions.
Any judgments or settlements in any pending or future claims, litigation or investigations could have a material adverse effect on our business, financial condition and results of operations. We may not be able to successfully execute our growth strategies.
A default under the indenture, or the fundamental change itself, could also lead to a default under our Amended Credit Agreement and other agreements governing our existing or future indebtedness.
A default under the indentures, or the fundamental change itself, could also lead to a default under our Second Amended Credit Agreement and other agreements governing our existing or future indebtedness.
Hawk Parent has outstanding an aggregate of 5,844,095 Post-Merger Repay Units as of February 22, 2024. Pursuant to the Exchange Agreement, Repay Unitholders have the right to elect to exchange such Post-Merger Repay Units into shares of our Class A common stock on a one-for-one basis, subject to the terms of the Exchange Agreement.
Hawk Parent has outstanding an aggregate of 5,379,543 Post-Merger Repay Units as of February 25, 2024. Pursuant to the Exchange Agreement, Repay Unitholders have the right to elect to exchange such Post-Merger Repay Units into shares of our Class A common stock on a one-for-one basis, subject to the terms of the Exchange Agreement.
The payment networks routinely update and modify requirements applicable to merchant acquirers, including rules regulating data integrity, third-party relationships (such as those with respect to sponsor banks and independent sales organization (“ISOs”)), merchant chargeback standards and PCI DSS.
The payment networks routinely update and modify requirements applicable to merchant acquirers, including rules regulating data integrity, third-party relationships (such as those with respect to sponsor banks and ISOs), merchant chargeback standards and PCI DSS.
Our failure to repurchase the 2026 Notes at a time when the repurchase is required by the indenture governing the 2026 Notes (the “indenture”) or to pay any cash payable on future conversions of the 2026 Notes as required by the indenture, would constitute a default under the indenture.
Our failure to repurchase the Notes at a time when the repurchase is required by the indenture governing the 2026 Notes and the indenture governing the 2029 Notes (together the “indentures”) or to pay any cash payable on future conversions of the Notes as required by the indentures, would constitute a default under the indentures.
We may need to incur additional indebtedness to finance payments under the Tax Receivable Agreement to the extent our cash resources are insufficient to meet our obligations under the Tax Receivable Agreement as a result of timing discrepancies or otherwise.
We may need to incur additional indebtedness to finance payments under the Tax Receivable Agreement to the extent our cash resources are insufficient to meet our obligations under the Tax Receivable Agreement as a result of timing discrepancies or otherwise. Such indebtedness may have a material adverse effect on our financial condition.
Such indebtedness may have a material adverse effect on our financial condition. 32 Risks Related to our Class A Common Stock Future issuances or sales of substantial amounts of our Class A common stock in the public market, or the perception that such issuances or sales may occur, could cause the market price for our Class A common stock to decline.
Risks Related to our Class A Common Stock Future issuances or sales of substantial amounts of our Class A common stock in the public market, or the perception that such issuances or sales may occur, could cause the market price for our Class A common stock to decline.
Smaller tax refunds to consumers, due to the absence of additional stimulus or similar impacts or otherwise, could also negatively impact our results of operations. The U.S. and international markets are experiencing uncertain and volatile economic conditions, including from the impacts of sustained inflation, recession concerns and supply chain disruptions.
Smaller tax refunds to consumers, due to the absence of additional stimulus or similar impacts or otherwise, could also negatively impact our results of operations. The U.S. and international markets are continuing to experience uncertain and volatile economic conditions, including from the impacts of sustained inflation, recession concerns and threat of increased tariffs or other protectionist trade policies.
A significant part of our growth strategy is to enter into new vertical markets through platform acquisitions of vertically-focused integrated payment and software solutions providers, to expand within our existing vertical markets through selective tuck-in acquisitions and to otherwise increase our presence in the payments processing market.
An important part of our growth strategy is to enter into new vertical markets through platform acquisitions of vertically-focused integrated payment and software solutions providers, to expand within our existing vertical markets through selective tuck-in acquisitions and to otherwise increase our presence in the payments processing market. However, we have not completed an acquisition in over three years.
On December 29, 2021, we increased our existing senior secured credit facilities to a $185.0 million revolving credit facility pursuant to an amendment to the revolving credit agreement with Truist Bank and certain other lenders (as amended, the “Amended Credit Agreement”).
On July 10, 2024, we increased our existing senior secured credit facilities to a $250.0 million revolving credit facility pursuant to an amendment to the revolving credit agreement with Truist Bank and certain other lenders (the “Second Amended Credit Agreement”).
Because large enterprises tend to have more consumers impacted by a change in payment processing providers, they often evaluate our solutions and our technology platform at multiple levels within their organization, each of which often have specific requirements, and typically involve their senior management.
Large enterprises often have more consumers impacted by a change in payment processing providers, which leads these potential clients to evaluate our solutions and our technology platform at multiple levels within their organization. These evaluations often involve their senior management and require specific and stringent requirements.
State laws and regulations (as well as any related modifications or changes in interpretation in the payment network rules related to those fees and costs) could negatively the willingness of some of our clients to accept credit or debit card or other electronic payment or result in less favorable terms to us in exchange for our clients to absorb those fees and costs, all of which would negatively affect our business.
These developments could negatively affect the willingness of some of our clients to accept credit or debit card or other electronic payment or result in less favorable terms to us in exchange for our clients to absorb those fees and costs, all of which would negatively affect our business.
Additionally, to the extent that we need funds and Hawk Parent and/or any of its subsidiaries are restricted from making such distributions under applicable law or regulation or under the terms of any financing arrangements, or Hawk Parent is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition. 30 Hawk Parent is treated as a partnership for U.S. federal income tax purposes and, as such, generally is not subject to any entity-level U.S. federal income tax.
Additionally, to the extent that we need funds and Hawk Parent and/or any of its subsidiaries are restricted from making such distributions under applicable law or regulation or under the terms of any financing arrangements, or Hawk Parent is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition.
Although we have elected not to be governed by Section 203 of the DGCL, certain provisions of our certificate of incorporation, in a manner substantially similar to Section 203 of the DGCL, prohibit certain of our stockholders (other than those stockholders who are party to a stockholders’ agreement with us) who hold 15% or more of our outstanding capital stock from engaging in certain business combination transactions with us for a specified period of time unless certain conditions are met.
Although we have elected not to be governed by Section 203 of the DGCL, certain provisions of our certificate of incorporation, in a manner substantially similar to Section 203 of the DGCL, prohibit certain of our stockholders (other than those stockholders who are party to a stockholders’ agreement with us) who hold 15% or more of our outstanding capital stock from engaging in certain business combination transactions with us for a specified period of time unless certain conditions are met. 34 Our certificate of incorporation designates a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, or employees.
We continue to work to improve our internal controls. We cannot be certain that these measures will ensure that we implement and maintain adequate controls over our financial processes and reporting in the future.
We have in the past discovered, and may in the future discover, material weaknesses and other areas of our internal controls that need improvement. We continue to work to improve our internal controls. We cannot be certain that these measures will ensure that we implement and maintain adequate controls over our financial processes and reporting in the future.
In particular, speculation on our go-forward strategy, competition in some of the markets we address and the effect of general economic and political conditions (such as recession concerns, interest rate changes and inflation) on our business, may have a dramatic effect on our stock price.
In particular, speculation on our go-forward strategy, competition in some of the markets we address and the effect of general economic and political conditions (such as recession concerns, interest rate changes and inflation) on our business, may have a dramatic effect on our stock price. 33 Volatility in the stock price of our common stock or other reasons may in the future cause us to become the target of securities litigation or shareholder activism.
As a result, the success of an investment in our common stock will depend entirely upon future appreciation in its value.
As a result, the success of an investment in our common stock will depend entirely upon future appreciation in its value. There is no guarantee that our Class A common stock will maintain its value or appreciate in value.
If our policies and procedures are not fully effective or we are not always successful in capturing all risks to which we are or may be exposed, we may suffer harm to our reputation or be subject to litigation or regulatory actions that materially increase our costs and limit our ability to grow and may cause us to lose existing clients. 22 We may not be able to continue to expand our share in our existing vertical markets or continue to expand into new vertical markets, which would inhibit our ability to grow and increase our profitability.
If our policies and procedures are not fully effective or we are not always successful in capturing all risks to which we are or may be exposed, we may suffer harm to our reputation or be subject to litigation or regulatory actions that materially increase our costs and limit our ability to grow and may cause us to lose existing clients. 22 Certain payment funding methods expose us to the credit and/or operating risk of our clients.
A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. 28 We have in the past discovered, and may in the future discover, material weaknesses and other areas of our internal controls that need improvement.
A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.
On January 19, 2021, we issued $440.0 million in aggregate principal amount of our 0.00% convertible senior notes due 2026 (the “2026 Notes”).
On January 19, 2021, we issued $440.0 million in aggregate principal amount of our 0.00% convertible senior notes due 2026 (the “2026 Notes”). On July 8, 2024, we repurchased $220.0 million of the 2026 Notes. Additionally, on July 8, 2024, we issued $287.5 million in aggregate principal amount of our 2.875% convertible senior notes due 2029 (the “2029 Notes”).
For example, the closing price per share of our Class A common stock on The Nasdaq Capital Market ranged from a low of $5.68 to a high of $10.29 during the period from January 3, 2023 to December 29, 2023.
For example, the closing price per share of our Class A common stock on The Nasdaq Capital Market ranged from a low of $7.13 to a high of $11.05 during the period from January 2, 2024 to December 31, 2024.
There is no guarantee that our Class A common stock will maintain its value or appreciate in value. 33 Delaware law and our governing documents contain certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.
Delaware law and our governing documents contain certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.
We rely on sponsor banks and, in certain cases, third-party processors to access the payment card networks, such as Visa and MasterCard, that enable our ability to offer to our clients the acceptance of credit cards and debit cards, and we must pay fees for such services.
If we fail to comply with the applicable requirements of payment networks and industry self-regulatory organizations, those payment networks or organizations could seek to fine us, suspend us or terminate our registrations through our sponsor banks. 18 We rely on sponsor banks and, in certain cases, third-party processors to access the payment card networks, such as Visa and MasterCard, that enable our ability to offer to our clients the acceptance of credit cards and debit cards, and we must pay fees for such services.
Many potential clients and software integration partners worry about potential disadvantages associated with switching payment processing providers, such as a loss of accustomed functionality, increased costs and business disruption.
Potential clients or software integration partners may be reluctant to switch to, or develop a relationship with, a new payment processor, which may adversely affect our growth. Many potential clients and software integration partners worry about potential disadvantages associated with switching payment processing providers, such as a loss of accustomed functionality, increased costs and business disruption.
Volatility in the stock price of our common stock or other reasons may in the future cause us to become the target of securities litigation or shareholder activism. Securities litigation and shareholder activism, including potential proxy contests, could result in substantial costs and divert management’s and board of directors’ attention and resources from our business.
Securities litigation and shareholder activism, including potential proxy contests, could result in substantial costs and divert management’s and board of directors’ attention and resources from our business.
Many of our clients desire to impose a convenience fee or a surcharge in connection with their customers’ use of a credit or debit card or other form of electronic payment. Various state laws and regulations impose prohibitions or other limitations on those types of fees or charges, and interpretation of those state laws and regulations is constantly evolving.
Many of our clients desire to impose a convenience fee or a surcharge in connection with their customers’ use of a credit or debit card or other form of electronic payment.
Instead, taxable income is allocated to Repay Unitholders (including us). Accordingly, we will be required to pay income taxes on our allocable share of any net taxable income of Hawk Parent.
Hawk Parent is treated as a partnership for U.S. federal income tax purposes and, as such, generally is not subject to any entity-level U.S. federal income tax. Instead, taxable income is allocated to Repay Unitholders (including us). Accordingly, we will be required to pay income taxes on our allocable share of any net taxable income of Hawk Parent.
In the event of an acceleration of our indebtedness, we could be forced to apply all available cash flows to repay such debt, which would reduce or eliminate distributions to us, which could also force us into bankruptcy or liquidation. 29 We may not have the ability to raise the funds necessary to settle conversions of the 2026 Notes, or to repurchase the 2026 Notes upon a fundamental change, and our future debt may contain, limitations on our ability to pay cash upon conversion or repurchase of the 2026 Notes.
In the event of an acceleration of our indebtedness, we could be forced to apply all available cash 29 flows to repay such debt, which would reduce or eliminate distributions to us, which could also force us into bankruptcy or liquidation.
Risks Related to Our Ownership Structure We are a holding company and our only material asset is our interest in Hawk Parent, and we are accordingly dependent upon distributions made by our subsidiaries to pay taxes, make payments under the Tax Receivable Agreement, meet our financial obligations under the 2026 Notes and pay dividends.
In either case, and in other cases, our obligations under the Notes could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that you may view as favorable. 30 Risks Related to Our Ownership Structure We are a holding company and our only material asset is our interest in Hawk Parent, and we are accordingly dependent upon distributions made by our subsidiaries to pay taxes, make payments under the Tax Receivable Agreement, meet our financial obligations under the 2026 Notes or the 2029 Notes and pay dividends.
We also have outstanding $440.0 million aggregate principal amount of our 2026 Notes which are convertible into shares of our Class A common stock in certain circumstances. Investors will incur further dilution upon the conversion of any of our 2026 Notes if we elect to deliver shares of Class A common stock upon such conversion.
Investors will incur further dilution upon the conversion of any of our convertible senior notes if we elect to deliver shares of Class A common stock upon such conversion.
If we cannot or do not license the infringed technology on reasonable terms or substitute similar technology from another source, our revenue and earnings could be adversely impacted. 23 The loss of key personnel or the loss of our ability to attract, recruit, retain and develop qualified employees, could adversely affect our business, financial condition and results of operations.
The loss of key personnel or the loss of our ability to attract, recruit, retain and develop qualified employees, could adversely affect our business, financial condition and results of operations.
Even if we have an agreement for indemnification against such costs, the indemnifying party, if any in such circumstance, may be unable to uphold its contractual obligations.
Even if we have an agreement for indemnification against such costs, the indemnifying party, if any in such circumstance, may be unable to uphold its contractual obligations. If we cannot or do not license the infringed technology on reasonable terms or substitute similar technology from another source, our revenue and earnings could be adversely impacted.
As a result, we may need to be nimble and quickly respond to the evolving needs of the vertical markets that we serve.
The combination of these factors could materially adversely affect the business of our clients and may force our consumer lender or receivables management clients to change their business models. As a result, we may need to be nimble and quickly respond to the evolving needs of the vertical markets that we serve.
The loss of intellectual property protection or the inability to license or otherwise use third-party intellectual property could harm our business and ability to compete. We are also subject to costly litigation if our services and technology are alleged to infringe upon or otherwise violate a third party’s proprietary rights.
We are also subject to costly litigation if our services and technology are alleged to infringe upon or otherwise violate a third party’s proprietary rights. Third parties may have, or may eventually be issued, patents that could be infringed by our products, services or technology.
In addition, our clients include credit unions, banks and non-bank lenders who utilize our payment technology solutions in exchange for processing fees. Since March 2023, Silicon Valley Bank, Signature Bank and First Republic Bank were each closed by their applicable regulators and the FDIC was appointed as receiver.
In addition, our clients include credit unions, banks and non-bank lenders who utilize our payment technology solutions in exchange for processing fees. 25 We do not believe we have been materially and adversely impacted by the financial institution failures that began with the closure of Silicon Valley Bank in March 2023.
We did not use Silicon Valley Bank, Signature Bank or First Republic Bank for any of our depository or investment accounts nor did we have any payment processing relationships with these particular financial institutions. However, we cannot guarantee that there will not be similar issues with any of the financial institutions with whom we maintain relationships.
While we continue to monitor developments in the banking sector, we cannot guarantee that there will not be similar issues with any of the financial institutions with whom we maintain relationships.
Removed
Regulatory changes may also result in our clients seeking to charge their own clients additional fees for use of credit or debit cards which may result in such clients using other payment methods.
Added
Industry consolidation within our vertical markets can adversely affect our growth or results. Our focus on specific vertical markets exposes us to various risks associated with changes or disruptions within these sectors. For example, the consolidation or merger of businesses within the vertical markets we primarily serve reduces the number of potential clients and may limit our market opportunities.
Removed
Additionally, in recent years, increased incidents of security breaches have caused some consumers to lose confidence in the ability of businesses to protect their information, causing certain consumers to discontinue use of electronic payment methods.
Added
If key clients in these vertical markets merge or consolidate at an accelerated pace, we may face a decrease in demand, loss of business relationships or pricing pressures. These events may have a material and adverse impact on our results of operations.
Removed
Security breaches could result in financial institutions canceling large numbers of credit and debit cards, or consumers or businesses electing to cancel their cards following such incidents. Potential clients or software integration partners may be reluctant to switch to, or develop a relationship with, a new payment processor, which may adversely affect our growth.
Added
In connection with these evaluations, large enterprise clients may demand that we implement enhanced cybersecurity measures, privacy protocols or other compliance initiatives tailored to their needs or their industry regulations, which could increase our costs.
Removed
If we fail to comply with the applicable requirements of payment networks and industry self-regulatory organizations, those payment networks or organizations could seek to fine us, suspend us or terminate our registrations through our sponsor banks.
Added
When we process certain types of transactions (including ACH payments and our Instant Funding solutions) for certain clients, we occasionally transfer funds from our settlement account to the intended destination account before we receive funds from a client’s source account. The vast majority of these occurrences are resolved quickly through normal processes.
Removed
Third parties may have, or may eventually be issued, patents that could be infringed by our products, services or technology.
Added
However, if they are not resolved and we are then unable to reverse the transaction that sent funds to the intended destination, a shortfall in our settlement account will be created.
Removed
For example, the CFPB previously proposed new rules applicable to such loans that could have an adverse effect on our clients’ businesses, and numerous state laws impose similar requirements.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have implemented a variety of physical security controls to protect our offices and assets from unauthorized access, tampering and environmental hazards. We utilize a combination of third party logging, intrusion detection and penetration systems to monitor our information systems for anomalous and suspicious activity in support of our security objectives and incident management plans.
Biggest changeOur systems include third party logging, intrusion detection and penetration systems to monitor our information systems for anomalous and suspicious activity in support of our security objectives and incident management plans.
ITEM 1C. CYBERSECURITY. We recognize the importance of developing, implementing and maintaining robust cybersecurity programs in order to mitigate risk and to safeguard the sensitive data collected, processed and stored by us. Our cybersecurity programs are guided in part by certain regulatory requirements (including payment network rules) that require periodic testing and external reviews.
ITEM 1C. CYBERSECURITY. We recognize the critical importance of developing, implementing and maintaining robust cybersecurity programs in order to mitigate risk and to safeguard the sensitive data collected, processed and stored by us. Our cybersecurity programs are guided in part by certain regulatory requirements (including payment network rules) that require periodic testing and external reviews.
Our CTO holds an undergraduate degree in management and information systems, and he has served in various technology roles for over 30 years. Our CTO’s prior experience includes serving as the Chief Information Officer and Chief Information Security Officer of a public company and as Chief Technology Officer of a separate public company. 36
Our CTO holds an undergraduate degree in management and information systems, and he has served in various technology roles for over 30 years. Our CTO’s prior experience includes serving as the Chief Information Officer and Chief Information Security Officer of a public company and as Chief Technology Officer of a separate public company.
Our CISO holds an undergraduate degree in electronics and communications engineering, and he has attained a professional certification in leadership from a leading graduate school. He also maintains a Certificate Information Systems Security Professional (CISSP) certification from the International Information System Security Certification Consortium (ISC2).
Our CISO holds an undergraduate degree in electronics and communications engineering, and he has attained a professional certification in leadership from a leading graduate school. He also maintains a Certificate Information Systems 36 Security Professional (CISSP) certification from the International Information System Security Certification Consortium (ISC2).
Our CISO maintains a cybersecurity risk assessment program that includes, for each identified material risk, an evaluation of the applicable threat level for such risk and the current mitigation plan for such risk. The cybersecurity risk assessment receives input from cross-functional teams across our organization.
Our CISO oversees a cybersecurity risk assessment program that includes, for each identified material risk, an evaluation of the applicable threat level for such risk and the current mitigation plan for such risk. The cybersecurity risk assessment receives input from cross-functional teams across our organization.
We also rely on these third party firms for educational opportunities and materials intended to keep our team members, including our CISO, up to date on the latest industry developments and best practices. 35 As an important part of our cybersecurity programs, we perform defined due diligence procedures prior to engaging with new vendors.
These firms also provide educational opportunities and materials intended to keep our team members, including our CISO, up to date on the latest industry developments and best practices. As an important part of our cybersecurity programs, we perform defined due diligence procedures prior to engaging with new vendors.
All of our employees and contractors are required to complete security awareness training (which covers the policies and other information regarding our cybersecurity programs) both at the time of hire or engagement and then on annual basis. We also routinely disseminate cybersecurity and physical security educational materials to all employees and contractors.
All of our employees and contractors are required to complete security awareness training (which covers the policies and other information regarding our cybersecurity programs) both at the time of hire or engagement and then on annual basis.
Due to the critical risks associated with cybersecurity incidents in the payment processing business, our cybersecurity programs are generally operated in a dedicated and independent manner. Risk Management and Strategy Risk Identification and Assessment We have adopted processes and procedures, including those described below to identify cybersecurity risks and events.
Given the significant risks associated with cybersecurity incidents in the payment processing business, our cybersecurity programs are generally operated in a dedicated and independent manner. Risk Management and Strategy Risk Identification and Assessment We employ structured processes and procedures to identify and assess cybersecurity risks and events.
Removed
We have implemented hiring, onboarding and termination procedures that are designed to ensure our employees and contractors assist us in meeting our cybersecurity compliance objectives.
Added
During the past year, we conducted a tabletop exercise with our executive management team that simulated a cybersecurity incident to evaluate the effectiveness of our SIRP, identify potential improvements and enhance our incident response readiness. Employee and contractor compliance is bolstered by hiring, onboarding and termination procedures that are designed to align with cybersecurity objectives.
Added
We also routinely disseminate cybersecurity and physical security educational materials to all employees and contractors. 35 We utilize a variety of physical security controls to protect our offices and assets from unauthorized access, tampering and environmental hazards.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PRO PERTIES. The following table sets forth selected information concerning our principal facilities, as of December 31, 2023. Location Owned/Leased Approximate Square Footage Corporate Headquarters: Atlanta, Georgia Leased 8,700 Additional Facilities: Atlanta, Georgia Leased 13,300 Bettendorf, IA Leased 12,900 The Colony, Texas Leased 14,100 East Moline, Illinois Leased 800 Ft.
Biggest changeITEM 2. PRO PERTIES. The following table sets forth selected information concerning our principal facilities, as of December 31, 2024. Location Owned/Leased Approximate Square Footage Corporate Headquarters: Atlanta, Georgia Leased 20,300 Additional Facilities: Bettendorf, IA Leased 12,900 East Moline, Illinois Leased 800 Ft. Worth, Texas Leased 7,900 Tempe, Arizona Leased 7,500 Sandy, Utah Leased 5,200
Removed
Worth, Texas Leased 7,900 Tempe, Arizona Leased 7,500 Sandy, Utah Leased 5,200

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−0 removed3 unchanged
Biggest change(2) Includes 338,369 shares purchased pursuant to the Share Repurchase Program. On May 16, 2022, our board of directors approved the Share Repurchase Program under which we may repurchase up to $50 million of our outstanding Class A common stock.
Biggest change(2) On May 16, 2022, our board of directors approved the Share Repurchase Program under which we may repurchase up to $50 million of our outstanding Class A common stock. The Share Repurchase Program has no expiration date but may be modified, suspended or discontinued at any time at our discretion.
The stock performance graph and table assume an initial investment of $100 on December 31, 2018 and that all dividends of the S&P 500 Index and S&P Information Technology Index, were reinvested. 37 The performance graph and table are not intended to be indicative of future performance.
The stock performance graph and table 37 assume an initial investment of $100 on December 31, 2019 and that all dividends of the S&P 500 Index and S&P Information Technology Index, were reinvested. The performance graph and table are not intended to be indicative of future performance.
Performance The following graph compares the total shareholder return from December 31, 2018 through December 31, 2023 of (i) our Class A common stock, (ii) the Standard and Poor’s 500 Stock Index (“S&P 500 Index”) and (iii) the Standard and Poor’s 500 Information Technology Index (“S&P Information Technology Index”).
Performance The following graph compares the total shareholder return from December 31, 2019 through December 31, 2024 of (i) our Class A common stock, (ii) the Standard and Poor’s 500 Stock Index (“S&P 500 Index”) and (iii) the Standard and Poor’s 500 Information Technology Index (“S&P Information Technology Index”).
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAR EHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our Class A common stock is traded on Nasdaq under the symbol “RPAY”. As of February 22, 2024, the closing price for our Class A common stock was $8.33.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAR EHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our Class A common stock is traded on Nasdaq under the symbol “RPAY”. As of February 25, 2025, the closing price for our Class A common stock was $7.16.
Holders As of February 22, 2024, there were 14 holders of record of our Class A common stock, 19 holders of record of our Class V common stock and 19 holders of record of Post-Merger Repay Units (not including the Company).
Holders As of February 25, 2025, there were 15 holders of record of our Class A common stock, 15 holders of record of our Class V common stock and 15 holders of record of Post-Merger Repay Units (not including the Company).
The Share Repurchase Program has no expiration date but may be modified, suspended or discontinued at any time at our discretion. Repurchases under the Share Repurchase Program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases depending on market conditions and corporate needs. ITEM 6. [Reserved]. 39
Repurchases under the Share Repurchase Program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases depending on market conditions and corporate needs. ITEM 6. [Reserved]. 39
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table summarizes purchases of Class A common stock made by the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) of the Exchange Agent) in connection with tax withholdings, under the ESPP and pursuant to our share repurchase program for the three months ended December 31, 2023: Total Number of Shares Purchased (1) (2) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May yet be Purchased Under the Plans or Programs October 1-31, 2023 5,612 $ 5.91 — $ 40,000,000 November 1-30, 2023 161,406 $ 7.10 112,682 (824,475 ) December 1-31, 2023 227,514 $ 7.56 225,687 (1,703,949 ) Total 394,532 $ 7.35 338,369 $ 37,471,576 (1) Includes 56,163 shares that we withheld pursuant to the Incentive Plan and the ESPP in order to satisfy employees’ tax withholding and payment obligations in connection with the vesting of awards of restricted stock under the 38 Incentive Plan and share purchases under the ESPP, which, in each case, we withheld at fair market value on the applicable vesting date or purchase date.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table summarizes purchases of Class A common stock made by the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) of the Exchange Agent) in connection with tax withholdings, under the ESPP and pursuant to our share repurchase program for the three months ended December 31, 2024: Total Number of Shares Purchased (1) Average Price Paid per Share 'Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that May yet be Purchased Under the Plans or Programs October 1-31, 2024 8,228 $ 7.84 — $ 36,217,871 November 1-30, 2024 15,320 8.03 — — December 1-31, 2024 19,477 7.64 — — Total 43,025 $ 7.82 — $ 36,217,871 38 (1) Includes 43,025 shares that we withheld pursuant to the Incentive Plan and the ESPP in order to satisfy employees’ tax withholding and payment obligations in connection with the vesting of awards of restricted stock under the Incentive Plan and share purchases under the ESPP, which, in each case, we withheld at fair market value on the applicable vesting date or purchase date.
Repay Holdings Corporation S&P 500 Index S&P Information Technology Index December 31, 2018 $ 100.00 $ 100.00 $ 100.00 December 31, 2019 147.98 128.88 148.04 December 31, 2020 275.25 149.83 210.54 December 31, 2021 189.60 190.13 280.75 December 31, 2022 81.31 153.16 199.59 December 31, 2023 86.26 190.27 312.15 Recent Sales of Unregistered Securities None.
Repay Holdings Corporation S&P 500 Index S&P Information Technology Index December 31, 2019 $ 100.00 $ 100.00 $ 100.00 December 31, 2020 186.01 116.26 142.21 December 31, 2021 128.12 147.52 189.64 December 31, 2022 54.95 118.84 134.82 December 31, 2023 58.29 147.64 210.85 December 31, 2024 52.08 182.05 286.10 Recent Sales of Unregistered Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following tables set forth a reconciliation of our results of operations for the years ended December 31, 2023, 2022 and 2021 . 45 REPAY HOLDINGS CORPORATION Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA Year Ended December 31, ($ in thousands) 2023 2022 2021 Revenue $ 296,627 $ 279,227 $ 219,258 Operating expenses Costs of services (exclusive of depreciation and amortization shown separately below) $ 69,703 $ 64,826 $ 55,484 Selling, general and administrative 148,653 149,061 120,053 Depreciation and amortization 103,857 107,751 89,692 Change in fair value of contingent consideration — (3,300 ) 5,846 Loss on business disposition 10,027 — — Impairment loss 75,800 8,090 2,180 Total operating expenses $ 408,040 $ 326,428 $ 273,255 Loss from operations $ (111,413 ) $ (47,201 ) $ (53,997 ) Interest (expense) income, net (1,048 ) (4,245 ) (3,599 ) Loss on extinguishment of debt — — (5,941 ) Change in fair value of tax receivable liability (6,619 ) 66,871 (14,109 ) Other (loss) income (455 ) (510 ) (9,082 ) Total other income (expense) (8,122 ) 62,116 (32,731 ) Income (loss) before income tax benefit (expense) (119,535 ) 14,915 (86,728 ) Income tax benefit (expense) 2,115 (6,174 ) 30,691 Net income (loss) $ (117,420 ) $ 8,741 $ (56,037 ) Add: Interest expense (income), net 1,048 4,245 3,599 Depreciation and amortization (a) 103,857 107,751 89,692 Income tax (benefit) expense (2,115 ) 6,174 (30,691 ) EBITDA $ (14,630 ) $ 126,911 $ 6,563 Loss on business disposition (i) 10,027 — — Loss on extinguishment of debt (j) — — 5,941 Loss on termination of interest rate hedge (k) — — 9,080 Non-cash change in fair value of contingent consideration (b) — (3,300 ) 5,846 Non-cash impairment loss (c) 75,800 8,090 2,180 Non-cash change in fair value of assets and liabilities (d) 7,494 (66,871 ) 14,109 Share-based compensation expense (e) 22,156 20,532 22,311 Transaction expenses (f) 8,523 18,993 19,250 Restructuring and other strategic initiative costs (g) 11,908 7,870 4,578 Other non-recurring charges (h) 5,528 12,294 3,262 Adjusted EBITDA $ 126,806 $ 124,519 $ 93,120 46 REPAY HOLDINGS CORPORATION Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income Year Ended December 31, ($ in thousands) 2023 2022 2021 Revenue $ 296,627 $ 279,227 $ 219,258 Operating expenses Costs of services (exclusive of depreciation and amortization shown separately below) $ 69,703 $ 64,826 $ 55,484 Selling, general and administrative 148,653 149,061 120,053 Depreciation and amortization 103,857 107,751 89,692 Change in fair value of contingent consideration — (3,300 ) 5,846 Loss on business disposition 10,027 — — Impairment loss 75,800 8,090 2,180 Total operating expenses $ 408,040 $ 326,428 $ 273,255 Loss from operations $ (111,413 ) $ (47,201 ) $ (53,997 ) Interest (expense) income, net (1,048 ) (4,245 ) (3,599 ) Loss on extinguishment of debt — — (5,941 ) Change in fair value of tax receivable liability (6,619 ) 66,871 (14,109 ) Other (loss) income (455 ) (510 ) (9,082 ) Total other income (expense) (8,122 ) 62,116 (32,731 ) Income (loss) before income tax benefit (expense) (119,535 ) 14,915 (86,728 ) Income tax benefit (expense) 2,115 (6,174 ) 30,691 Net income (loss) $ (117,420 ) $ 8,741 $ (56,037 ) Add: Amortization of acquisition-related intangibles (l) 81,642 89,473 79,932 Loss on business disposition (i) 10,027 — — Loss on extinguishment of debt (j) — — 5,941 Loss on extinguishment of interest rate hedge (k) — — 9,080 Non-cash change in fair value of contingent consideration (b) — (3,300 ) 5,846 Non-cash impairment loss (c) 75,800 8,090 2,180 Non-cash change in fair value of assets and liabilities (d) 7,494 (66,871 ) 14,109 Share-based compensation expense (e) 22,156 20,532 22,311 Transaction expenses (f) 8,523 18,993 19,250 Restructuring and other strategic initiative costs (g) 11,908 7,870 4,578 Other non-recurring charges (h) 5,528 12,294 3,262 Non-cash interest expense (m) 2,848 2,835 2,536 Pro forma taxes at effective rate (n) (23,564 ) (18,871 ) (39,219 ) Adjusted Net Income $ 84,942 $ 79,786 $ 73,769 Shares of Class A common stock outstanding (on an as-converted basis) (o) 96,850,559 96,684,629 91,264,512 Adjusted Net Income per share $ 0.88 $ 0.83 $ 0.81 (a) See footnote (l) for details on our amortization and depreciation expenses.
Biggest changeThe following tables set forth a reconciliation of our results of operations for the years ended December 31, 2024, 2023 and 2022 . 45 REPAY HOLDINGS CORPORATION Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA Year Ended December 31, ($ in thousands) 2024 2023 2022 Revenue $ 313,042 $ 296,627 $ 279,227 Operating expenses Costs of services (exclusive of depreciation and amortization shown separately below) $ 71,636 $ 69,703 $ 64,826 Selling, general and administrative 145,466 148,653 149,061 Depreciation and amortization 103,710 103,857 107,751 Change in fair value of contingent consideration — — (3,300 ) Loss on business disposition — 10,027 — Impairment loss — 75,800 8,090 Total operating expenses $ 320,812 $ 408,040 $ 326,428 Loss from operations $ (7,770 ) $ (111,413 ) $ (47,201 ) Interest income 5,992 2,822 130 Interest expense (7,873 ) (3,870 ) (4,375 ) Gain on extinguishment of debt 13,136 — — Change in fair value of tax receivable liability (14,543 ) (6,619 ) 66,871 Other income (loss) 138 (455 ) (510 ) Total other income (expense) (3,150 ) (8,122 ) 62,116 Income (loss) before income tax benefit (expense) (10,920 ) (119,535 ) 14,915 Income tax benefit (expense) 575 2,115 (6,174 ) Net income (loss) $ (10,345 ) $ (117,420 ) $ 8,741 Add: Interest income (5,992 ) (2,822 ) (130 ) Interest expense 7,873 3,870 4,375 Depreciation and amortization (a) 103,710 103,857 107,751 Income tax (benefit) expense (575 ) (2,115 ) 6,174 EBITDA $ 94,671 $ (14,630 ) $ 126,911 Loss on business disposition (h) — 10,027 — Gain on extinguishment of debt (i) (13,136 ) — — Non-cash change in fair value of contingent consideration (j) — — (3,300 ) Non-cash impairment loss (b) — 75,800 8,090 Non-cash change in fair value of assets and liabilities (c) 14,543 7,494 (66,871 ) Share-based compensation expense (d) 25,195 22,156 20,532 Transaction expenses (e) 2,325 8,523 18,993 Restructuring and other strategic initiative costs (f) 12,494 11,908 7,870 Other non-recurring charges (g) 4,718 5,528 12,294 Adjusted EBITDA $ 140,810 $ 126,806 $ 124,519 46 REPAY HOLDINGS CORPORATION Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income Year Ended December 31, ($ in thousands) 2024 2023 2022 Revenue $ 313,042 $ 296,627 $ 279,227 Operating expenses Costs of services (exclusive of depreciation and amortization shown separately below) $ 71,636 $ 69,703 $ 64,826 Selling, general and administrative 145,466 148,653 149,061 Depreciation and amortization 103,710 103,857 107,751 Change in fair value of contingent consideration — — (3,300 ) Loss on business disposition — 10,027 — Impairment loss — 75,800 8,090 Total operating expenses $ 320,812 $ 408,040 $ 326,428 Loss from operations $ (7,770 ) $ (111,413 ) $ (47,201 ) Interest income 5,992 2,822 130 Interest expense (7,873 ) (3,870 ) (4,375 ) Gain on extinguishment of debt 13,136 — — Change in fair value of tax receivable liability (14,543 ) (6,619 ) 66,871 Other income (loss) 138 (455 ) (510 ) Total other income (expense) (3,150 ) (8,122 ) 62,116 Income (loss) before income tax benefit (expense) (10,920 ) (119,535 ) 14,915 Income tax benefit (expense) 575 2,115 (6,174 ) Net income (loss) $ (10,345 ) $ (117,420 ) $ 8,741 Add: Amortization of acquisition-related intangibles (k) 77,144 81,642 89,473 Loss on business disposition (h) — 10,027 — Gain on extinguishment of debt (i) (13,136 ) — — Non-cash change in fair value of contingent consideration (j) — — (3,300 ) Non-cash impairment loss (b) — 75,800 8,090 Non-cash change in fair value of assets and liabilities (c) 14,543 7,494 (66,871 ) Share-based compensation expense (d) 25,195 22,156 20,532 Transaction expenses (e) 2,325 8,523 18,993 Restructuring and other strategic initiative costs (f) 12,494 11,908 7,870 Other non-recurring charges (g) 4,718 5,528 12,294 Non-cash interest expense (l) 3,031 2,848 2,835 Pro forma taxes at effective rate (m) (28,151 ) (23,564 ) (18,871 ) Adjusted Net Income $ 87,818 $ 84,942 $ 79,786 Shares of Class A common stock outstanding (on an as-converted basis) (n) 95,678,128 96,850,559 96,684,629 Adjusted Net Income per share $ 0.92 $ 0.88 $ 0.83 (a) See footnote (k) for details on our amortization and depreciation expenses.
The actual increase in tax basis, as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors, including the timing of redemptions or exchanges by the holders of Post-Merger Repay Units, the price of our Class A common stock at the time of the redemption or exchange, whether such redemptions or 51 exchanges are taxable, the amount and timing of the taxable income we generate in the future, the tax rate then applicable and the portion of our payments under the TRA constituting imputed interest.
The actual increase in tax basis, as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors, including the timing of redemptions or exchanges by the holders of Post-Merger Repay Units, the price of our Class A common stock at the time of the redemption or exchange, whether such redemptions or exchanges are taxable, the amount and timing of the taxable income we generate in the future, the tax rate then applicable and the portion of our payments under the TRA constituting imputed interest.
Convertible Senior Debt On January 19, 2021, we issued $440.0 million in aggregate principal amount of 0.00% Convertible Senior Notes due 2026 in a private placement (the “Notes Offering”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. $40.0 million in aggregate principal amount of such 2026 Notes were sold in the Notes Offering in connection with the full exercise of the initial purchasers’ option to purchase such additional 2026 Notes pursuant to the purchase agreement.
Convertible Senior Notes On January 19, 2021, we issued $440.0 million in aggregate principal amount of 0.00% Convertible Senior Notes due 2026 in a private placement (the “Notes Offering”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. $40.0 million in aggregate principal amount of such 2026 Notes were sold in the Notes Offering in connection with the full exercise of the initial purchasers’ option to purchase such additional 2026 Notes pursuant to the purchase agreement.
Income Taxes Under ASC 740, Income Taxes, deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to net operating losses, tax credits, and temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, which will result in taxable or deductible amounts in the future.
Income Taxes Under ASC 740, Income Taxes, deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to net operating losses, tax credits, and temporary differences between the financial statement 53 carrying amounts of existing assets and liabilities and their respective tax bases, which will result in taxable or deductible amounts in the future.
Management also typically utilizes third 52 party valuation specialists to assist in the determination of the fair value of assets acquired and liabilities assumed. Fair value estimates are based on assumptions believed to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
Management also typically utilizes third party valuation specialists to assist in the determination of the fair value of assets acquired and liabilities assumed. Fair value estimates are based on assumptions believed to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
Therefore, in estimating fair value, management uses a discount rate, also referred to as the early termination rate, to determine the present value based on a risk-free rate plus a spread pursuant to the TRA. A significant increase or decrease in the discount rate could result in a lower or higher balance, respectively, as of the measurement date. 53
Therefore, in estimating fair value, management uses a discount rate, also referred to as the Early Termination Rate, to determine the present value based on a risk-free rate plus a spread pursuant to the TRA. A significant increase or decrease in the discount rate could result in a lower or higher balance, respectively, as of the measurement date.
Business Combination The Company was formed upon closing of the merger (the “Business Combination”) of Hawk Parent Holdings LLC (together with Repay Holdings, LLC and its other subsidiaries, “Hawk Parent”) with a subsidiary of Thunder Bridge Acquisition, Ltd., (“Thunder Bridge”), a special purpose acquisition company, on July 11, 2019.
Business Combination The Company was formed upon closing of the merger (the “Business Combination”) of Hawk Parent Holdings LLC (together with Repay Holdings, LLC and its other subsidiaries, “Hawk Parent”) with a subsidiary of Thunder Bridge 40 Acquisition, Ltd., (“Thunder Bridge”), a special purpose acquisition company, on July 11, 2019.
Amortization expense for software development costs and purchased software is recognized on the straight-line method over a three-year estimated useful life, between eight to ten years estimated useful life for client relationships and channel relationships, and between two to five years estimated useful life for non-compete agreements. Interest (expense) income, net.
Amortization expense for software development costs and purchased software is recognized on the straight-line method over a three-year estimated useful life, between eight to ten years estimated useful life for client relationships and channel relationships, and between two to five years estimated useful life for non-compete agreements. Interest income.
Cash Flow from Investing Activities Net cash used in investing activities was $24.1 million for the year ended December 31, 2023, due to the capitalization of software development activities and purchases of intangible assets, partially offset by cash received from the disposition of BCS.
Net cash used in investing activities was $24.1 million for the year ended December 31, 2023, due to the capitalization of software development activities and purchases of intangible assets, partially offset by cash received from the disposition of BCS.
For revenue and gross profit by segments for the year ended December 31, 2022 compared to the year ended December 31, 2021, see Part II, Item 7 of our 2022 Form 10-K, which is incorporated herein by reference. 44 Non-GAAP Financial Measures This report includes certain non-GAAP financial measures that our management uses to evaluate our operating business, measure our performance and make strategic decisions.
For revenue and gross profit by segments for the year ended December 31, 2023 compared to the year ended December 31, 2022, see Part II, Item 7 of our 2023 Form 10-K, which is incorporated herein by reference. 44 Non-GAAP Financial Measures This report includes certain non-GAAP financial measures that our management uses to evaluate our operating business, measure our performance and make strategic decisions.
Adjusted Net Income per share is a non-GAAP financial measure that represents Adjusted Net Income divided by the weighted average number of shares of Class A common stock outstanding (on an as-converted basis assuming conversion of the outstanding Post-Merger Repay Units) for the years ended December 31, 2023, 2022 and 2021 (excluding certain shares that were subject to forfeiture).
Adjusted Net Income per share is a non-GAAP financial measure that represents Adjusted Net Income divided by the weighted average number of shares of Class A common stock outstanding (on an as-converted basis assuming conversion of the outstanding Post-Merger Repay Units) for the years ended December 31, 2024, 2023 and 2022 (excluding certain shares that were subject to forfeiture).
We depend on the payment of distributions by our current subsidiaries, including Hawk Parent, which distributions may be restricted by law or contractual agreements, including agreements 49 governing their indebtedness.
We depend on the payment of distributions by our current subsidiaries, including Hawk Parent, which distributions may be restricted by law or contractual agreements, including agreements governing their indebtedness.
The strategic vertical markets served within our Business Payments segment primarily include retail automotive, education, field services, governments and municipalities, healthcare, HOA management and hospitality.
The strategic vertical markets served within our Business Payments segment primarily include retail automotive, education, field services, governments and municipalities, healthcare, media, HOA management and hospitality.
Our chargeback rate was less than 1% of our card payment volume, during the years ended December 31, 2023, 2022 and 2021. Expenses Costs of services . Costs of services primarily include commissions to our software integration partners and other third-party processing costs, such as front and back-end processing costs and sponsor bank fees. Selling, general and administrative .
Our chargeback rate was less than 1% of our card payment volume, during the years ended December 31, 2024, 2023 and 2022. Expenses Costs of services . Costs of services primarily include commissions to our software integration partners and other third-party processing costs, such as front and back-end processing costs and sponsor bank fees. Selling, general and administrative .
Amortization of intangibles that relate to past acquisitions will recur in future periods until such intangibles have been fully amortized. Any future acquisitions may result in the amortization of additional intangibles. (m) Represents amortization of non-cash deferred debt issuance costs. (n) Represents pro forma income tax adjustment effect associated with items adjusted above.
Amortization of intangibles that relate to past acquisitions will recur in future periods until such intangibles have been fully amortized. Any future acquisitions may result in the amortization of additional intangibles. (l) Represents amortization of non-cash deferred debt issuance costs. (m) Represents pro forma income tax adjustment effect associated with items adjusted above.
There have been no significant changes in our application of accounting estimates during the year ended December 31, 2023. Revenue Recognition The consideration to be received in our contracts with clients consists of variable consideration where the timing and quantity of transactions to be processed is not determinable at contract inception.
There have been no significant changes in our application of accounting estimates during the year ended December 31, 2024. Revenue Recognition The consideration to be received in our contracts with clients consists of variable consideration where the timing and quantity of transactions to be processed is not determinable at contract inception.
We paid $0.5 million and $0.6 million in fees related to unused commitments for the years ended December 31, 2023 and 2022, respectively. See Note 10. Borrowings to the financial statements in Item 8 of this Annual Report on Form 10-K for more information.
We paid $0.6 million and $0.5 million in fees related to unused commitments for the years ended December 31, 2024 and 2023, respectively. See Note 10. Borrowings to the financial statements in Item 8 of this Annual Report on Form 10-K for more information.
Adjusted Net Income is a non-GAAP financial measure that represents net income prior to amortization of acquisition-related intangibles, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as loss on business disposition, loss on extinguishment of debt, loss on termination of interest rate hedge, non-cash change in fair value of contingent consideration, non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation expense, transaction expenses, restructuring and other strategic initiative costs, other non-recurring charges, non-cash interest expense and net of tax effect associated with these adjustments.
Adjusted Net Income is a non-GAAP financial measure that represents net income prior to amortization of acquisition-related intangibles, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as loss on business disposition, gain on extinguishment of debt, non-cash change in fair value of contingent consideration, non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation expense, transaction expenses, restructuring and other strategic initiative costs, other non-recurring charges, non-cash interest expense and net of tax effect associated with these adjustments.
Cash provided by operating activities for the years ended December 31, 2023, 2022 and 2021, reflects net income as adjusted for non-cash operating items including depreciation and amortization, share-based compensation, and changes in working capital accounts.
Cash provided by operating activities for the years ended December 31, 2024, 2023 and 2022, reflects net income as adjusted for non-cash operating items including depreciation and amortization, share-based compensation, and changes in working capital accounts.
(c) For the year ended December 31, 2023, reflects non-cash goodwill impairment loss related to the Business Payments segment and non-cash impairment loss related to a trade name write-off of Media Payments. For the year ended December 31, 2022, reflects non-cash impairment loss related to trade names write-offs of BillingTree and Kontrol.
(b) For the year ended December 31, 2023, reflects non-cash goodwill impairment loss related to the Business Payments segment and non-cash impairment loss related to a trade name write-off of Media Payments. For the year ended December 31, 2022, reflects non-cash impairment loss related to trade names write-offs of BillingTree and Kontrol.
Adjusted EBITDA is a non-GAAP financial measure that represents net income prior to interest expense, tax expense, depreciation and amortization, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as loss on business disposition, loss on extinguishment of debt, loss on termination of interest rate hedge, non-cash change in fair value of contingent consideration, non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation charges, transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges.
Adjusted EBITDA is a non-GAAP financial measure that represents net income prior to interest expense, tax expense, depreciation and amortization, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as loss on business disposition, gain on extinguishment of debt, non-cash change in fair value of contingent consideration, non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation charges, transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges.
For discussion on Adjusted EBITDA, Adjusted Net income, and net income (loss) attributable to the Company for the year ended December 31, 2022 compared to the year ended December 31, 2021, see Part II, Item 7 of the Company’s 2022 Form 10-K.
For discussion on Adjusted EBITDA, Adjusted Net income, and net income (loss) attributable to the Company for the year ended December 31, 2023 compared to the year ended December 31, 2022, see Part II, Item 7 of the Company’s 2023 Form 10-K.
Commitments and Contingencies to the financial statements in Item 8 of this Annual Report on Form 10-K for more information related to operating leases liabilities. Based on our current lease terms, $1.6 million of operating lease liabilities are due within the next twelve months, and the remaining lease liabilities of $7.2 million are due within the next ten years.
Commitments and Contingencies to the financial statements in Item 8 of this Annual Report on Form 10-K for more information related to operating leases liabilities. Based on our current lease terms, $1.2 million of operating lease liabilities are due within the next twelve months, and the remaining lease liabilities of $10.5 million are due within the next ten years.
For a discussion of those considerations and restrictions, refer to Part II, Item 1A “Risk Factors - Risks Related to Our Class A Common Stock.” As of December 31, 2023, our material contractual obligations primarily consist of operating leases liabilities. See Note 11.
For a discussion of those considerations and restrictions, refer to Part II, Item 1A “Risk Factors - Risks Related to Our Class A Common Stock.” 49 As of December 31, 2024, our material contractual obligations primarily consist of operating leases liabilities. See Note 11.
The effect of these events on our financial condition, results of operations and cash flows is uncertain 40 and cannot be predicted at this time. Finally, the impact of all of these various events on our results in 2023 may not be necessarily indicative of their impact on our results in 2024.
The effect of these events on our financial condition, results of operations and cash flows is uncertain and cannot be predicted at this time. Finally, the impact of all of these various events on our results in 2024 may not be necessarily indicative of their impact on our results in 2025.
(l) For the years ended December 31, 2023, 2022 and 2021, reflects amortization of client relationships, non-compete agreement, software, and channel relationship intangibles acquired through the Business Combination, and client relationships, non-compete agreement, and software intangibles acquired through our acquisitions of TriSource, APS, Ventanex, cPayPlus, CPS, BillingTree, Kontrol and Payix.
(k) For the years ended December 31, 2024, 2023 and 2022, reflects amortization of client relationships, non-compete agreement, software, and channel relationship intangibles acquired through the Business Combination, and client relationships, non-compete agreement, and software intangibles acquired through our acquisitions of TriSource, APS, Ventanex, cPayPlus, CPS, BillingTree, Kontrol and Payix.
Additionally, for the year ended December 31, 2022, reflects one-time severance payments. (h) For the year ended December 31, 2023, reflects payments made to third-parties in connection with an expansion of our personnel, franchise taxes and other non-income based taxes and one-time payments to certain partners.
For the year ended December 31, 2023, reflects payments made to third-parties in connection with an expansion of our personnel, franchise taxes and other non-income based taxes and one-time payments to certain partners.
For the year ended December 31, 2022, reflects one-time payments to certain clients and partners, payments made to third-parties in connection with a significant expansion of our personnel, franchise taxes and other non-income based taxes, other payments related to COVID-19 and non-cash rent expense.
For the year ended December 31, 2022, reflects one-time payments to certain clients and partners, payments made to third-parties in connection with a significant expansion of our personnel, franchise taxes and other non-income based taxes, other payments related to COVID-19 and non-cash rent expense. (h) Reflects the loss recognized related to the disposition of BCS.
Liquidity and Capital Resources We have historically financed our operations and working capital through net cash from operating activities. We also finance our operations through proceeds from the issuance of our Class A common stock in June 2020 and our January 2021 convertible notes offering.
Liquidity and Capital Resources We have historically financed our operations and working capital through net cash from operating activities. We also finance our operations through proceeds from the issuance of our Class A common stock in June 2020 and our convertible senior notes offerings.
(o) Represents the weighted average number of shares of Class A common stock outstanding (on an as-converted basis assuming conversion of outstanding Post-Merger Repay Units) for the years ended December 31, 2023, 2022 and 2021. These numbers do not include any shares issuable upon conversion of our 2026 Notes.
(n) Represents the weighted average number of shares of Class A common stock outstanding (on an as-converted basis assuming conversion of outstanding Post-Merger Repay Units) for the years ended December 31, 2024, 2023 and 2022. These numbers do not include any shares issuable upon conversion of our convertible senior notes.
Cash Flow from Financing Activities Net cash used in financing activities was $28.9 million for the year ended December 31, 2023, due to the repayment of the outstanding revolving credit facility balance, shares repurchased under the Incentive Plan, ESPP and Share Repurchase Program, as well as the CPS earnout payment.
Net cash used in financing activities was $28.9 million for the year ended December 31, 2023, due to the repayment of the outstanding revolving credit facility balance, shares repurchased under the Incentive Plan, ESPP and Share Repurchase Program, as well as the CPS earnout payment. 50 Net cash used in financing activities was $17.5 million for the year ended December 31, 2022, due to the shares repurchased under the Incentive Plan, ESPP and Share Repurchase Program, as well as the Ventanex earnout payment.
Interest expense consists of interest paid in respect of our indebtedness under the Amended Credit Agreement. Interest income consists of interest received on our cash and cash equivalents. Change in fair value of tax receivable liability . This amount represents the change in fair value of the tax receivable agreement liability.
Interest income consists of interest received on our cash and cash equivalents. Interest expense. Interest expense consists of interest paid in respect of our indebtedness under the convertible senior notes. Change in fair value of tax receivable liability . This amount represents the change in fair value of the tax receivable agreement liability.
We intend to continue to strategically target verticals where we believe our ability to tailor payment solutions to our client needs, our deep knowledge of our vertical markets and the embedded nature of our integrated payment solutions will drive strong growth by attracting new clients and fostering long-term client relationships.
We intend to continue to strategically target verticals where we believe our ability to tailor payment solutions to our client needs, our deep knowledge of our vertical markets and the embedded nature of our integrated payment solutions will drive strong growth by attracting new clients and fostering long-term client relationships. We report our financial results based on two reportable segments.
See additional information below for an analysis of our amortization expenses: Year ended December 31, ($ in thousands) 2023 2022 2021 Acquisition-related intangibles $ 81,642 $ 89,473 $ 79,932 Software 19,789 15,921 8,464 Amortization $ 101,431 $ 105,394 $ 88,396 Depreciation 2,426 2,357 1,296 Total Depreciation and amortization (1) $ 103,857 $ 107,751 $ 89,692 (1) Adjusted Net Income is adjusted to exclude amortization of all acquisition-related intangibles as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions (see corresponding adjustments in the reconciliation of net income to Adjusted Net Income presented above).
See additional information below for an analysis of our amortization expenses: Year ended December 31, ($ in thousands) 2024 2023 2022 Acquisition-related intangibles $ 77,144 $ 81,642 $ 89,473 Software 24,826 19,789 15,921 Amortization $ 101,970 $ 101,431 $ 105,394 Depreciation 1,740 2,426 2,357 Total Depreciation and amortization (1) $ 103,710 $ 103,857 $ 107,751 (1) Adjusted Net Income is adjusted to exclude amortization of all acquisition-related intangibles as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions (see corresponding adjustments in the reconciliation of net income to Adjusted Net Income presented above).
Income Tax Benefit and Expense The income tax benefit was $2.1 million for the year ended December 31, 2023, reflecting the expected income tax benefit on the loss generated over the same period.
The income tax benefit was $2.1 million for the year ended December 31, 2023, which reflected the expected income tax benefit on the loss generated over the same period.
This decrease was due to smaller fair value adjustments related to the tax receivable liability, primarily as a result of accretion and changes to the discount rate, or Early Termination Rate, used to determine the fair value of the liability.
This increase was due to smaller fair value adjustments related to the tax receivable liability, primarily as a result of a smaller decrease to the discount rate, also referred to as the Early Termination Rate, used to determine the fair value of the liability.
(2) Gross profit margin represents total gross profit / total revenue. Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Consumer Payments Revenue for the Consumer Payments segment was $275.7 million for the year ended December 31, 2023 and $248.2 million for the year ended December 31, 2022, representing a $27.5 million or 11.1% year-over-year increase.
(2) Gross profit margin represents total gross profit / total revenue. Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Consumer Payments Revenue for the Consumer Payments segment was $281.0 million for the year ended December 31, 2024 and $275.7 million for the year ended December 31, 2023, representing a $5.3 million or 1.9% year-over-year increase.
This increase was the result of newly signed clients and the growth of existing clients. For the year ended December 31, 2022, incremental revenues of approximately $8.6 million are attributable to BCS.
This increase was the result of newly signed clients and the growth of existing clients. For the year ended December 31, 2023, revenues of approximately $1.2 million are attributable to BCS.
(f) Primarily consists of (i) during the year ended December 31, 2023, professional service fees and other costs incurred in connection with the disposition of BCS, (ii) during the year ended December 31, 2022, professional service fees and other costs incurred in connection with the acquisitions of BillingTree, Kontrol and Payix and (iii) during the year ended December 31, 2021, professional service fees and other costs incurred in connection 47 with the acquisitions of Ventanex, cPayPlus, CPS, BillingTree, Kontrol and Payix, as well as professional service expenses related to the January 2021 equity and convertible notes offerings (g) Reflects costs associated with reorganization of operations, consulting fees related to our processing services and other operational improvements, including restructuring and integration activities related to our acquired businesses, that were not in the ordinary course during the years ended December 31, 2023, 2022 and 2021.
(e) Primarily consists of (i) during the year ended December 31, 2024, professional service fees incurred in connection with prior transactions, (ii) during the year ended December 31, 2023, professional service fees and other costs incurred in connection with the disposition of BCS and (iii) during the year ended December 31, 2022, professional service fees and other costs incurred in connection with the acquisitions of BillingTree, Kontrol and Payix. 47 (f) Reflects costs associated with reorganization of operations, consulting fees related to our processing services and other operational improvements, including restructuring and integration activities related to our acquired businesses, that were not in the ordinary course during the years ended December 31, 2024, 2023 and 2022.
Change in Fair Value of Tax Receivable Liability We incurred a net loss, related to accretion expense and fair value adjustment of the tax receivable liability of $6.6 million for the year ended December 31, 2023 compared to a gain of $66.9 million for the year ended December 31, 2022, a decrease of $73.5 million.
Change in Fair Value of Tax Receivable Liability We incurred a loss, related to accretion expense and fair value adjustment of the tax receivable liability of $14.5 million for the year ended December 31, 2024 compared to a net loss of $6.6 million for the year ended December 31, 2023, an increase of $7.9 million.
See the reconciliation of basic weighted average shares outstanding to the non-GAAP Class A common stock outstanding on an as-converted basis for each respective period below: 48 Year Ended December 31, 2023 2022 2021 Weighted average shares of Class A common stock outstanding - basic 90,048,638 88,792,453 83,318,189 Add: Non-controlling interests Weighted average Post-Merger Repay Units exchangeable for Class A common stock 6,801,921 7,892,176 7,946,323 Shares of Class A common stock outstanding (on an as-converted basis) 96,850,559 96,684,629 91,264,512 Adjusted EBITDA for the years ended December 31, 2023 and 2022 was $126.8 million and $124.5 million, respectively, representing a 1.8% year-over-year increase.
See the reconciliation of basic weighted average shares outstanding to the non-GAAP Class A common stock outstanding on an as-converted basis for each respective period below: 48 Year Ended December 31, 2024 2023 2022 Weighted average shares of Class A common stock outstanding - basic 89,915,137 90,048,638 88,792,453 Add: Non-controlling interests Weighted average Post-Merger Repay Units exchangeable for Class A common stock 5,762,991 6,801,921 7,892,176 Shares of Class A common stock outstanding (on an as-converted basis) 95,678,128 96,850,559 96,684,629 Adjusted EBITDA for the years ended December 31, 2024 and 2023 was $140.8 million and $126.8 million, respectively, representing a 11.0% year-over-year increase.
As of December 31, 2023, we had $118.1 million of cash and cash equivalents and available borrowing capacity of $185.0 million under the Amended Credit Agreement. This balance does not include restricted cash, which reflects cash accounts holding reserves for potential losses and client settlement funds of $26.0 million as of December 31, 2023.
As of December 31, 2024, we had $189.5 million of cash and cash equivalents and available borrowing capacity of $250.0 million under the Second Amended Credit Agreement. This balance does not include restricted cash, which reflects cash accounts holding reserves for potential losses and client settlement funds of $47.2 million as of December 31, 2024.
Net cash provided by operating activities was $74.2 million for the year ended December 31, 2022. Net cash provided by operating activities was $53.3 million for the year ended December 31, 2021.
Net cash provided by operating activities was $103.6 million for the year ended December 31, 2023. Net cash provided by operating activities was $74.2 million for the year ended December 31, 2022.
Cash Flows The following table presents a summary of cash flows from operating, investing and financing activities for the periods indicated: Year Ended December 31, ($ in thousands) 2023 2022 2021 Net cash provided by operating activities $ 103,614 $ 74,223 $ 53,330 Net cash used in investing activities (24,088 ) (39,541 ) (397,335 ) Net cash (used in) provided by financing activities (28,944 ) (17,459 ) 313,840 Cash Flow from Operating Activities Net cash provided by operating activities was $103.6 million for the year ended December 31, 2023.
Cash Flows The following table presents a summary of cash flows from operating, investing and financing activities for the periods indicated: Year Ended December 31, ($ in thousands) 2024 2023 2022 Net cash provided by operating activities $ 150,090 $ 103,614 $ 74,223 Net cash used in investing activities (44,853 ) (24,088 ) (39,541 ) Net cash used in financing activities (12,673 ) (28,944 ) (17,459 ) Cash Flow from Operating Activities Net cash provided by operating activities was $150.1 million for the year ended December 31, 2024.
We allocate the purchase price of an acquired business to the fair values of the tangible and identifiable intangible assets acquired and liabilities assumed, with any excess purchase price recorded as goodwill. Contingent consideration, if any, is included within the purchase price and is recognized at its fair value on the acquisition date.
All assets acquired and liabilities assumed are recorded at fair value as of the acquisition date. We allocate the purchase price of an acquired business to the fair values of the tangible and identifiable intangible assets acquired and liabilities assumed, with any excess purchase price recorded as goodwill.
The change in fair value can result from the redemption or exchange of Post-Merger Repay Units for Class A common stock of Repay Holdings Corporation, through accretion of the discounted fair value of the expected future cash payments, or changes to the discount rate, or Early Termination Rate, used to determine the fair value of the liability. 41 Results of Operations Year ended December 31, ($ in thousands, except per share data) 2023 2022 2021 Revenue $ 296,627 $ 279,227 $ 219,258 Operating expenses Costs of services (exclusive of depreciation and amortization shown separately below) $ 69,703 $ 64,826 $ 55,484 Selling, general and administrative 148,653 149,061 120,053 Depreciation and amortization 103,857 107,751 89,692 Change in fair value of contingent consideration — (3,300 ) 5,846 Loss on business disposition 10,027 — — Impairment loss 75,800 8,090 2,180 Total operating expenses $ 408,040 $ 326,428 $ 273,255 Loss from operations $ (111,413 ) $ (47,201 ) $ (53,997 ) Interest (expense) income, net (1,048 ) (4,245 ) (3,599 ) Loss on extinguishment of debt — — (5,941 ) Change in fair value of tax receivable liability (6,619 ) 66,871 (14,109 ) Other (loss) income (455 ) (510 ) (9,082 ) Total other income (expense) (8,122 ) 62,116 (32,731 ) Income (loss) before income tax benefit (expense) (119,535 ) 14,915 (86,728 ) Income tax benefit (expense) 2,115 (6,174 ) 30,691 Net income (loss) $ (117,420 ) $ 8,741 $ (56,037 ) Net loss attributable to non-controlling interest (6,930 ) (4,095 ) (5,953 ) Net income (loss) attributable to the Company $ (110,490 ) $ 12,836 $ (50,084 ) Weighted-average shares of Class A common stock outstanding - basic 90,048,638 88,792,453 83,318,189 Weighted-average shares of Class A common stock outstanding - diluted 90,048,638 110,671,731 83,318,189 Income (loss) per Class A share - basic $ (1.23 ) $ 0.14 $ (0.60 ) Income (loss) per Class A share - diluted $ (1.23 ) $ 0.12 $ (0.60 ) Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenue Total revenue was $296.6 million for the year ended December 31, 2023 and $279.2 million for the year ended December 31, 2022, an increase of $17.4 million or 6.2%.
The change in fair value can result from the redemption or exchange of Post-Merger Repay Units for Class A common stock of Repay Holdings Corporation, through accretion of the discounted fair value of the expected future cash payments, or changes to the discount rate, also referred to as the Early Termination Rate, used to determine the fair value of the liability. 41 Results of Operations Year ended December 31, ($ in thousands, except per share data) 2024 2023 2022 Revenue $ 313,042 $ 296,627 $ 279,227 Operating expenses Costs of services (exclusive of depreciation and amortization shown separately below) $ 71,636 $ 69,703 $ 64,826 Selling, general and administrative 145,466 148,653 149,061 Depreciation and amortization 103,710 103,857 107,751 Change in fair value of contingent consideration — — (3,300 ) Loss on business disposition — 10,027 — Impairment loss — 75,800 8,090 Total operating expenses $ 320,812 $ 408,040 $ 326,428 Loss from operations $ (7,770 ) $ (111,413 ) $ (47,201 ) Other income (expense) Interest income 5,992 2,822 130 Interest expense (7,873 ) (3,870 ) (4,375 ) Gain on extinguishment of debt 13,136 — — Change in fair value of tax receivable liability (14,543 ) (6,619 ) 66,871 Other income (loss) 138 (455 ) (510 ) Total other income (expense) (3,150 ) (8,122 ) 62,116 Income (loss) before income tax benefit (expense) (10,920 ) (119,535 ) 14,915 Income tax benefit (expense) 575 2,115 (6,174 ) Net income (loss) $ (10,345 ) $ (117,420 ) $ 8,741 Net loss attributable to non-controlling interest (189 ) (6,930 ) (4,095 ) Net income (loss) attributable to the Company $ (10,156 ) $ (110,490 ) $ 12,836 Weighted-average shares of Class A common stock outstanding - basic 89,915,137 90,048,638 88,792,453 Weighted-average shares of Class A common stock outstanding - diluted 89,915,137 90,048,638 110,671,731 Income (loss) per Class A share - basic $ (0.11 ) $ (1.23 ) $ 0.14 Income (loss) per Class A share - diluted $ (0.11 ) $ (1.23 ) $ 0.12 Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Revenue Total revenue was $313.0 million for the year ended December 31, 2024 and $296.6 million for the year ended December 31, 2023, an increase of $16.4 million or 5.5%.
Gross profit for the Consumer Payments segment was $216.1 million for the year ended December 31, 2023 and $195.5 million for the year ended December 31, 2022, representing a $20.6 million or 10.5% year-over-year increase. This increase was the result of newly signed clients and the growth of existing clients.
Gross profit for the Consumer Payments segment was $223.1 million for the year ended December 31, 2024 and $216.1 million for the year ended December 31, 2023, representing a $7.0 million or 3.2% year-over-year increase. This increase was the result of newly signed clients and the growth of existing clients.
Net cash used in investing activities was $39.5 million for the year ended December 31, 2022, due to the capitalization of software development activities. Net cash used in investing activities was $397.3 million for the year ended December 31, 2021, due to the acquisitions of BillingTree, Kontrol and Payix, as well as the capitalization of software development activities.
Net cash used in investing activities was $39.5 million for the year ended December 31, 2022, due to the capitalization of software development activities.
Costs of Services Costs of services were $69.7 million for the year ended December 31, 2023 and $64.8 million for the year ended December 31, 2022, an increase of $4.9 million or 7.5%.
Costs of Services Costs of services were $71.6 million for the year ended December 31, 2024 and $69.7 million for the year ended December 31, 2023, an increase of $1.9 million or 2.8%.
Gross profit for the Business Payments segment was $28.0 million for the year ended December 31, 2023 and $30.4 million for the year ended December 31, 2022, representing a $2.5 million or 8.1% year-over-year decrease.
Gross profit for the Business Payments segment was $39.1 million for the year ended December 31, 2024 and $28.0 million for the year ended December 31, 2023, representing a $11.2 million or 40.0% year-over-year increase.
Indebtedness Amended Credit Agreement In February 2021, we entered into the Amended Credit Agreement, which established a $125.0 million senior secured revolving credit facility in favor of Hawk Parent. In December 2021, we increased our existing senior secured credit facilities by $60.0 million to a $185.0 million revolving credit facility pursuant to an amendment to the Amended Credit Agreement.
Indebtedness Amended Credit Agreement In February 2021, we entered into the Amended Credit Agreement, which established a 125.0 million senior secured revolving credit facility in favor of Hawk Parent.
Depreciation and Amortization Depreciation and amortization expenses were $103.9 million for the year ended December 31, 2023 and $107.8 million for year ended December 31, 2022, a decrease of $3.9 million or 3.6%.
Depreciation and Amortization Depreciation and amortization expenses were $103.7 million for the year ended December 31, 2024 and $103.9 million for year ended December 31, 2023, a decrease of $0.2 million or 0.1%.
Tax Receivable Agreement Upon the completion of the Business Combination, we entered into that certain Tax Receivable Agreement (the “Tax Receivable Agreement” or “TRA”) with holders (other than the Company) of limited liability company interests of Hawk Parent (the “Post-Merger Repay Units”). As a result of the TRA, we established a liability in our consolidated financial statements.
Additionally, we currently expect that we will remain in compliance with the restrictive financial covenants prospectively. 51 Tax Receivable Agreement Upon the completion of the Business Combination, we entered into that certain Tax Receivable Agreement (the “Tax Receivable Agreement” or “TRA”) with holders (other than the Company) of limited liability company interests of Hawk Parent (the “Post-Merger Repay Units”).
Adjusted Net Income for the years ended December 31, 2023 and 2022 was $84.9 million and $79.8 million, respectively, representing a 6.5% year-over-year increase. Our net income (loss) attributable to the Company for the years ended December 31, 2023 and 2022 was ($110.5) million and $12.8 million, respectively, representing a 960.8% year-over-year decrease.
Adjusted Net Income for the years ended December 31, 2024 and 2023 was $87.8 million and $84.9 million, respectively, representing a 3.4% year-over-year increase. Our net income (loss) attributable to the Company for the years ended December 31, 2024 and 2023 was ($10.2) million and ($110.5) million, respectively, representing a 90.8% year-over-year improvement in our profitability.
For the year ended December 31, 2022, incremental gross profit of approximately $8.4 million is attributable to BCS. Business Payments Revenue for the Business Payments segment was $38.1 million for the year ended December 31, 2023 and $42.6 million for the year ended December 31, 2022, representing a $4.5 million or 10.6% year-over-year decrease.
For the year ended December 31, 2023, gross profit of approximately $1.2 million is attributable to BCS. Business Payments Revenue for the Business Payments segment was $52.9 million for the year ended December 31, 2024 and $38.1 million for the year ended December 31, 2023, representing a $14.9 million or 39.1% year-over-year increase.
For results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021, see Part II, Item 7 of our 2022 Form 10-K, which is incorporated herein by reference.
For results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022, see Part II, Item 7 of our 2023 Form 10-K, which is incorporated herein by reference. 43 Segments We provided our services through two reportable segments: (1) Consumer Payments and (2) Business Payments.
As of December 31, 2023, we had convertible senior debt outstanding of $434.2 million, net of deferred issuance costs, under the 2026 Notes. We were in compliance with the related restrictive financial covenants. Additionally, we currently expect that we will remain in compliance with the restrictive financial covenants prospectively.
As of December 31, 2024, we had convertible senior notes outstanding of $496.8 million, net of deferred issuance costs, under the 2026 Notes and 2029 Notes. We were in compliance with the related restrictive financial covenants.
This decrease was driven by a significant component of capitalized software related to the Business Combination being fully amortized in the prior year, partially offset by additional amortization related to newly capitalized software. 42 Loss on business disposition We incurred a loss on business disposition of $10.0 million for the year ended December 31, 2023 related to the sale of BCS.
This decrease was driven by a decrease in amortization of non-compete agreements. 42 Loss on Business Disposition We incurred a loss on business disposition of $10.0 million for the year ended December 31, 2023 related to the sale of Blue Cow Software (“BCS”).
For the year ended December 31, 2021, reflects impairment loss related to trade names write-offs of TriSource, APS, Ventanex, cPayPlus and CPS. (d) For the year ended December 31, 2023, reflects the changes in management’s estimates of (i) the fair value of the liability relating to the TRA, and (ii) non-cash insurance reserve.
(c) For the year ended December 31, 2024 and 2022, reflects the changes in management’s estimates of the fair value of the liability relating to the TRA. For the year ended December 31, 2023, reflects the changes in management’s estimates of (i) the fair value of the liability relating to the TRA and (ii) non-cash insurance reserve.
Year Ended December 31, ($ in thousand) 2023 2022 Revenue Consumer Payments $ 275,708 $ 248,191 Business Payments 38,058 42,600 Elimination of intersegment revenues (17,139 ) (11,564 ) Total revenue $ 296,627 $ 279,227 Gross profit (1) Consumer Payments $ 216,096 $ 195,542 Business Payments 27,967 30,423 Elimination of intersegment revenues (17,139 ) (11,564 ) Total gross profit $ 226,924 $ 214,401 Total gross profit margin (2) 77% 77% (1) Gross profit represents revenue less cost of services (exclusive of depreciation and amortization).
Year Ended December 31, ($ in thousand) 2024 2023 Revenue Consumer Payments $ 280,966 $ 275,708 Business Payments 52,923 38,058 Elimination of intersegment revenues (20,847 ) (17,139 ) Total revenue $ 313,042 $ 296,627 Gross profit (1) Consumer Payments $ 223,107 $ 216,096 Business Payments 39,146 27,967 Elimination of intersegment revenues (20,847 ) (17,139 ) Total gross profit $ 241,406 $ 226,924 Total gross profit margin (2) 77% 77% (1) Gross profit represents revenue less cost of services (exclusive of depreciation and amortization).
(b) Reflects the changes in management’s estimates of future cash consideration to be paid in connection with prior acquisitions from the amount estimated as of the most recent balance sheet date.
(i) Reflects a gain on the repurchase of 2026 Notes principal, net of a write-off of debt issuance costs relating to the repurchased principal. (j) Reflects the changes in management’s estimates of future cash consideration to be paid in connection with prior acquisitions from the amount estimated as of the most recent balance sheet date.
During the year ended December 31, 2023, we repurchased 338,369 shares for a total of approximately $2.5 million under the Share Repurchase Program.
During the year ended December 31, 2024, we repurchased 158,496 shares for a total of approximately $1.3 million under the Share Repurchase Program. As of December 31, 2024, we have $36.2 million remaining capacity under the Share Repurchase Program.
The strategic vertical markets served by our Consumer Payments segment primarily include personal loans, automotive loans, receivables management, credit unions, mortgage servicing, consumer healthcare and diversified retail.
RCS is our proprietary clearing and settlement platform through which we market customizable payment processing programs to other ISOs and payment facilitators. The strategic vertical markets served by our Consumer Payments segment primarily include personal loans, automotive loans, receivables management, credit unions, mortgage servicing, consumer healthcare and diversified retail.
The principal versus agent evaluation is matter of judgment that depends on the facts and circumstances of the arrangement and is dependent on whether we control the good or service before it is transferred to the client or whether we are acting as an agent of a third party. This evaluation is performed separately for each performance obligation identified.
We follow the requirements of ASC 606-10-55-36 through -40, Revenue from Contracts with Customers, Principal Agent Considerations , in determining the gross versus net revenue recognition for performance obligation(s) in the contract with a client. 52 The principal versus agent evaluation is matter of judgment that depends on the facts and circumstances of the arrangement and is dependent on whether we control the good or service before it is transferred to the client or whether we are acting as an agent of a third party.
This increase was the result of newly signed clients and the growth of our existing clients, partially offset by a decrease in our media payments business due to the cyclical political media spending associated with the 2022 mid-term elections in the prior period.
This increase was the result of newly signed clients, the growth of our existing clients and political media spending associated with the 2024 election cycle in our media payments business.
Business Combinations We account for business combinations using the acquisition method of accounting. Under the acquisition method, the consolidated financial statements reflect the operations of an acquired business starting from the closing date of the acquisition. All assets acquired and liabilities assumed are recorded at fair value as of the acquisition date.
This evaluation is performed separately for each performance obligation identified. Business Combinations We account for business combinations using the acquisition method of accounting. Under the acquisition method, the consolidated financial statements reflect the operations of an acquired business starting from the closing date of the acquisition.
The undrawn capacity of the existing revolving credit facility under the Amended Credit Agreement became $185.0 million after the repayment. As of December 31, 2023, the Amended Credit Agreement provides for a revolving credit facility of $185.0 million. As of December 31, 2023, we had $0 million drawn against the revolving credit facility.
On February 28, 2023, we repaid in full the entire amount of $20.0 million of the outstanding revolving credit facility. The undrawn capacity of the existing revolving credit facility under the Amended Credit Agreement became $185.0 million after the repayment.
Selling, General and Administrative Selling, general and administrative expenses were $148.7 million for the year ended December 31, 2023 and $149.1 million for the year ended December 31, 2022, a decrease of $0.4 million or 0.3%, primarily due to a $4.9 million decrease in legal expenses related to settlement payments to certain clients and partners in the prior year period and a $0.7 million decrease in transaction expenses, offset by a $1.9 million increase in equity compensation expense related to restricted shares and stock options granted and a $1.9 million increase in software and technological services expenses related to the integration of acquired businesses.
Selling, General and Administrative Selling, general and administrative expenses were $145.5 million for the year ended December 31, 2024 and $148.7 million for the year ended December 31, 2023, a decrease of $3.2 million or 2.1%, primarily due to a $3.0 million decrease in transaction expenses related to the disposition of BCS in the prior year period.
For the year ended December 31, 2021, reflects one-time payments to certain clients and partners, other payments related to COVID-19, payments made to third-parties in connection with expansion of our personnel, franchise taxes and other non-income based taxes and non-cash rent expense. Beginning in the year ended December 31, 2023, no longer reflects non-cash rent expense.
Additionally, for the year ended December 31, 2022, reflects one-time severance payments. (g) For the year ended December 31, 2024, reflects one-time processing settlements, franchise taxes and other non-income based taxes, non-recurring legal and other litigation expenses and payments made to third-parties in connection with our IT security and personnel.
Interest (Expense) Income, net Interest (expense) income, net was ($1.0) million for the year ended December 31, 2023, and included ($3.8) million of interest expense and $2.8 million of interest income. Interest (expense) income, net was ($4.2) million for the year ended December 31, 2022, and included ($4.4) million of interest expense and $0.2 million of interest income.
Interest Income Interest income was $6.0 million for the year ended December 31, 2024 and $2.8 million for the year ended December 31, 2023, an increase of $3.2 million, due to higher average interest rates earned on our cash and cash equivalents.
Segments We provided our services through two reportable segments: (1) Consumer Payments and (2) Business Payments. 43 The following table presents our segment revenue and selected performance measures.
The following table presents our segment revenue and selected performance measures.
This increase was the result of newly signed clients and the growth of our existing clients, partially offset by a decrease in our media payments business due to the cyclical political media spending associated with the 2022 mid-term elections in the prior period. We report our financial results based on two reportable segments.
This increase was the result of newly signed clients, the growth of our existing clients and political media spending associated with the 2024 election cycle in our media payments business.
Net cash used in financing activities was $17.5 million for the year ended December 31, 2022, due to the shares repurchased under the Incentive Plan, ESPP and Share Repurchase Program, as well as the Ventanex earnout payment. 50 Net cash provided by financing activities was $313.8 million for the year ended December 31, 2021, due to proceeds from the issuance of new shares in the Equity Offering, and proceeds from the 2026 Notes, offset by repayment of the outstanding revolver balance related to the Successor Credit Agreement, repayments of the Term Loan principal balance under the Successor Credit Agreement and the cPayPlus earnout payment.
Cash Flow from Financing Activities Net cash used in financing activities was $12.7 million for the year ended December 31, 2024, due to the 2026 Notes repurchased, shares repurchased under the Share Repurchase Program and purchase of capped calls related to issuance of the 2029 Notes, offset partially by proceeds from the issuance of the 2029 Notes.
Accordingly, the total transaction price is variable. These services are stand-ready obligations, as the timing and quantity of transactions to be processed is not determinable. We follow the requirements of ASC 606-10-55-36 through -40, Revenue from Contracts with Customers, Principal Agent Considerations , in determining the gross versus net revenue recognition for performance obligation(s) in the contract with a client.
Accordingly, the total transaction price is variable. These services are stand-ready obligations, as the timing and quantity of transactions to be processed is not determinable.
Growth from newly signed clients and existing clients was more than offset by declines in our media payments business due to the cyclical political media spending associated with the 2022 mid-term elections in the prior period.
This increase was the result of newly signed clients, the growth of existing clients and political media spending associated with the 2024 election cycle in our media payments business.
Growth from newly signed and existing clients was more than offset by declines in our media payments business due to the cyclical political media spending associated with the 2022 mid-term elections in the prior period.
This increase was the result of newly signed clients, the growth of existing clients and political media spending associated with the 2024 election cycle in our media payments business.
The fair value of the Business Payments reporting unit was primarily impacted by a change in the discount rate. We incurred an impairment loss of $8.1 million for the year ended December 31, 2022, due to trade names write-offs related to BillingTree, Kontrol and Payix.
The fair value of the Business Payments reporting unit was primarily impacted by a change in the discount rate. See Note 8. Intangible Assets and Note 9. Goodwill for more information.
These increases in Adjusted EBITDA and Adjusted Net Income and for the year ended December 31, 2023 were primarily due to the organic growth of our business, which was partially offset from the disposition of BCS and declines in our media payments business.
The increases in Adjusted EBITDA, Adjusted Net Income and improvement in net income (loss) attributable to the Company for the year ended December 31, 2024 were primarily due to the organic growth of our business from newly signed clients, the growth of existing clients, political media spending associated with the 2024 election cycle in our media payments business and cost savings initiatives that reduced both cost of services and selling, general and administrative expenses as a percentage of revenue.
We currently expect that we will remain in compliance with the restrictive financial covenants of the Amended Credit Agreement, prospectively. In February 2023, we further amended the Amended Credit Agreement to replace LIBOR with term SOFR as the interest rate benchmark. In February 2023, we repaid in full the entire amount of $20.0 million of the outstanding revolving credit facility.
On December 29, 2021, we increased our then existing senior secured credit facilities by $60.0 million to provide for a $185.0 million revolving credit facility pursuant to an amendment to the Amended Credit Agreement. On February 9, 2023, we further amended the Amended Credit Agreement to replace LIBOR with term SOFR as the interest rate benchmark.
The income tax expense was $6.2 million for the year ended December 31, 2022, which reflected the expected income tax expense to be received on the net earnings related to our economic interest in Hawk Parent.
Income Tax Benefit and Expense The income tax benefit was $0.6 million for the year ended December 31, 2024, reflecting the expected income tax benefit on the loss generated over the same period.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed5 unchanged
Biggest changeThe borrowings accrue interest at either base rate, described above under “ Liquidity and Capital Resources — Indebtedness ,” plus a margin of 1.50% to 2.50% or at an adjusted SOFR rate plus a margin of 2.50% to 3.50% under the Amended Credit Agreement, in each case depending on the total net leverage ratio, as defined in the Amended Credit Agreement.
Biggest changeThe borrowings under the Second Amended Credit Agreement accrue interest at either base rate, described above under “Liquidity and Capital Resources — Indebtedness ,” plus a margin of 0.75% to 1.75% or at an adjusted SOFR rate plus a margin of 1.75% to 2.75% under the Second Amended Credit Agreement, in each case depending on the total net leverage ratio, as defined in the Second Amended Credit Agreement.
Therefore, increases in interest rates may reduce our net income or loss by increasing the cost of debt. As of December 31, 2023, we had convertible senior debt of $434.2 million, net of deferred issuance costs, outstanding.
Therefore, increases in interest rates may reduce our net income or loss by increasing the cost of debt. As of December 31, 2024, we had convertible senior debt of $496.8 million, net of deferred issuance costs, outstanding.
As of December 31, 2022, we had convertible senior debt of $433.1 million, net of deferred issuance costs, and revolving credit facility borrowings of $18.2 million, net of deferred issuance costs, outstanding.
As of December 31, 2023, we had convertible senior debt of $434.2 million, net of deferred issuance costs, and revolving credit facility borrowings of $18.2 million, net of deferred issuance costs, outstanding.

Other RPAY 10-K year-over-year comparisons