Q2 2025 Priority Technology Holdings Inc Earnings Call & Business Update
Good morning and welcome to the priority technology holding second quarter of 2025 earnings conference call.
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I would now like to turn the conference over to Magna marrow with investor relations. Please go ahead. Good morning, and thank you for joining us with me. Today, are Tom priore, chairman and chief executive officer of priority, technology Holdings. And Tim oeri Chief Financial Officer before giving up prepared remarks. I would like to remind all participants that are comments today. Will include forward-looking statements, which involve a number of risks and uncertainties that may cause actual results to differ materially from our forward-looking statements.
The company undertakes, no obligation to update or revise, the forward-looking statements. Whether as a result of new information, future events or otherwise, we provide a detailed discussion of the various risk factors in our SEC filings and we encourage you to review these filings.
Additionally, we may refer to non-GAAP measures including, but not limited to, EBITDA and adjusted EBITDA during the call. Reconciliations of our non-GAAP performance and liquidity measures to the appropriate GAAP measures can be found in our press release and SEC filings available in the investors section of our website. With that, I would like to turn the call over to our Chairman and CEO, Tom Priore.
Thank you Megan. And thanks everyone for joining us. For our second quarter 2025 earnings call.
Once again, I'll begin today's call by highlighting our aggregate performance.
That reinforces our strong revenue and adjusted EBA guidance for 2025 before handing it over to Tim will provide segment level performance.
See Trends and developments within each of the business segments and priority overall.
This morning, we reported continued solid growth in both revenue and profit despite lingering economic uncertainty over the impact of tariffs, and government cuts that extended into the second quarter.
Summarized on slide 3 Priority had a strong Q2 by every key financial metric.
Growing net, revenue by 9%.
Generating adjusted gross profit and adjusted Diva. Doug growth of 13 and 9% respectively.
And increased adjusted eps.
By 15 cents year-over-year to 26 Cents.
We ended the second quarter with over 1.6 million total customer accounts operating on our Commerce platform up from 1.3 at the end of last quarter.
Annual transaction volume in the LTM period, increased by nearly 5 billion from q1 to 140 billion.
An average account balance is under Administration improved to 1.4 billion versus 1.3 billion in the first quarter of 2025.
The Tim will walk you through the full year, 2025 guidance, specifics. And some of the more noteworthy Trends we're seeing within SMB, acquiring B2B payables and the Enterprise payment segments later, in the call.
Based on strong growth Trends and a continued favorable shift in our business, mix.
I'm confident that priority can achieve 10% to 12 and a half percent Topline Revenue growth.
Which is why we're increasing the low end of our Revenue. Expectations to 970 million and narrowing the overall range to 990 million at the high end while refining adjusted Ava.
Around the midpoint of our original full year guidance.
Increasing the low end to 222.5 million and narrowing. The overall range to 227.5 million at the high end.
Our confidence comes from the adoption. We continue to experience.
For our connected Commerce, platform, combining payments, and banking capabilities to streamline collecting storing lending and sending money to create revenue and operational success for our customers.
But turning our attention to our Q2 results, noted on slide 4.
8 million increased 9% from the prior year.
This led to a 13% increase in adjusted gross profit, in 92.4 million and a 9% Improvement, adjusted by the dust 56 million.
Adjusted gross profit margin of 38.5% increased 135 basis points.
From the prior Year's second quarter.
Highlighted on 55.
Our steady Q2 performance contributed to year-to-date Revenue growth of 9%.
To 464.4 million fueling a 14% increase.
In adjusted gross profit to $179.7 million and an 80% improvement in adjusted EBITDA to $107.3 million, while expanding adjusted gross profit margin by 150 basis points to 38.7%.
for those of you who are new to Priority slides 6 and 7 highlight, our vision for connected Commerce,
the priority Commerce engine is purpose-built to streamline collecting storing lending, and sending money and delivers a flexible Financial tool set for merchant services.
Payables and Banking and treasury solutions to accelerate cash flow and optimize working capital for businesses.
I would encourage you to play the short 1 to 2 minute.
Videos embedded in the product length.
On this slide.
It will give you a more wholesome appreciation for their value and how they're being leveraged by our growing customer base.
While our financial performance demonstrates that Partners can consistently choose priority to help power their businesses.
I thought it would be useful for investors to gain a deeper appreciation.
Of why we are merging. As a go-to solution provider.
For embedded Financial Solutions.
Slide 7 highlights a typical Enterprise partner experience for our Commerce API.
Offering payment orchestration, banking optimization, and payables management solutions within a single point connection that allows our partners to choose their adventure.
And leverage our Solutions in a way that best suits their objectives.
Importantly.
This framework is consistently applied. Whether the partner?
Is a sports management software company.
a debt resolution provider leveraging, CFT pay
A vertically focused.
Software provider or property management technology company.
Customers connect and can access all routes for digital payment acceptance as well as lock box for checks create FDIC eligible pass through insured. Full feature virtual bank accounts,
With both virtual and physical card, issuing bill payment.
And automated payables options at their own pace.
Or tightly coupled platform creates 2 important benefits for priorities. Long-term prospects.
First.
It allows our partners to evolve their offering to respond to Opportunities and emerging Trends as we add features and new embedded Solutions in collaboration with their goals.
Both parties have a clear line of sight.
Quantify and tap into revenue growth opportunities.
And this creates loyalty and it gives us the ability to grow with our partners' businesses.
Second.
By maintaining operational. Workflow consistency across implementations of diverse industry segments.
Where collecting storing and sending money is an important part of the value chain.
We can clearly identify and refine our operational metrics.
In key performance areas like compliance payment operations, risk management, application support and others to ensure that we scale cost efficiently.
We are committed to meeting our customers where they are by curating the experience for our partners, in order to make working with priority seamless and easy.
This Vision explains why we've been continually able to transform priority into a high-performing payments and banking Financial technology company.
With consistently strong, recurring Revenue prospects.
our customers and current market conditions, reinforced our belief
That systems connecting payments and banking Solutions.
Software and payment solution providers.
To deliver a full Suite of Core Business Services.
In a single relationship.
At the end of my comments, I'll speak to this accelerating Trend toward bundled services in Greater depth.
But at this point, I'd like to hand it over to Tim who provide further insight into the health of our business segments.
Along with current trends in each that factored into our second quarter results. And our confidence for sustained and accelerated performance in the second half of 2025.
Thank you, Tom, and good morning, everyone.
I'll start on slide 9 as Tom mentioned, we had strong financial performance across the business in the second quarter and the priority Commerce engine continues to generate high growth in our higher margin operating segments as B2B Revenue grew over 14% And Enterprise Revenue grew over 20% on the year-over-year basis for the quarter.
The strong growth in those segments. Also allowed for overall, margin expansion, as adjusted gross profit, margins improved by 135 basis, points from Q2 last year,
Consistent with q1 and as shown in the charts.
The adjusted gross profit from our B2B and Enterprise segments represented over 60% of the total for the quarter.
The continued shift in our business mix. Also contributes to the highly visible. And recurring nature of our business model, as over, 62% of adjusted gross profit in Q2 came from recurring revenues that are not dependent on transaction counts or card volumes.
moving on to the segment level results, and starting with the SMB segment on slide 10
SMB generated Q2 revenue of 163.2 million, which is 8.1 million or 5.2% higher than last year's. Second quarter,
Smbs Revenue growth was a combination of Strong, 9 and a half percent growth in the core portfolio. Partially offset by the attrition of historical, residual purchases along with lower revenue, and specialized acquiring.
Those headwinds will continue in Q3 and Q4, but with a moderating impact compared to what we saw in q1 and Q2 where it was a 4 to 5% drag on overall growth rates for SMD.
Total card volume was 18.7 billion for the quarter, which is up 2.3% from the prior year and 5.6% from q1.
From a merchant standpoint. We averaged approximately 179,000 accounts during a quarter which is consistent with last year and up from 178,000 in q1.
Well, new monthly boards averaged 4,000 during the quarter compared to 4,100 in Q2 of last year and Q1 of this year.
Adjusted gross profit in SMB for the second quarter was 35.4 Million, which is consistent with gross profit in Q2 of last year. And sequentially is almost 7% higher than the first quarter's gross profit.
gross, margins of 21.7% are comparable to the 21.8% in the first quarter, but down 130 basis points from last year,
On a year-over-year basis. Margins were impacted by lower specialized acquiring revenue and the attrition of historical, residual purchases.
if you were to adjust for the impact of those 2 items, gross margins in the core portfolio increased by 125 basis points on a year-over-year basis,
lastly, for snd
adjusted ebta, was 27.7 Million, which is down 850,000 from last year's second quarter and up 2 million from q1 of this year.
Adjusted ebda was slightly lower than the comparative quarter last year. As a result of increased salaries and benefits, along with higher sgna. Resulting from increased headcount along with higher software expenses, related to the previously discussed Cloud. Migration
Moving to B2B revenue of 25 million was 14.4% higher than Q2 of last year and sequentially increased from 23.9 million in q1.
Our buyer funded revenues grew by 12.7%. While supplier funded revenues grew by 21.7% on a year-over-year basis,
I offered a more detailed explanation on our q1 earnings call. But when we use the terms buyer funded and supplier funded, we are referring to which party in the payable transaction, is paying The Interchange or credit card related to fees for the payments.
Consistent with q1.
The buyer-funded businesses' increased focus on larger customers and bank referral partners continue to show success in the quarter as companies seek to optimize their working capital and streamline their payables operations.
Adjusted gross profit was 7.3 million in the quarter, which is a 30.8% increase over the prior year.
For the quarter, gross, margins are 29.1% or 3665 basis points. Higher compared to 25.4% in the second quarter of 2024.
the B2B segment produced 3.8 million of adjusted ebta during a quarter, which was a 2.2 million for 146%, increase over the comparable period in 2024
The acceleration of adjusted EBITDA growth compared to adjusted gross profit was driven by strong operating leverage in the segment, including a 13% reduction in operating expenses excluding D&A on a year-over-year basis.
Moving to the Enterprise segment.
Q2 revenue of $52.7 million was an increase of $9 million, or 20.6%, over the prior year.
Revenue growth was driven by a continued strong enrollment Trends and an increase in the number of build clients and CFT pay combined with an increase in the number of integrated Partners in organic same store, sales growth with existing passport program managers
higher account, balances in both CFT, pay and passport. We're able to more than offset, the impact of a 100 basis points in the lower interest rates in the quarter compared to Q2 of last year.
As a result of those factors, adjusted gross profit for the Enterprise segment also increased by 22.6% to 49.7 million, while adjusting gross profit margins were 94.4% in the quarter.
Adjusted ebta for the quarter was 45.6 million and increase of 8.3 million or 22.3% from the prior Year's first quarter.
Overall profitability and Enterprise was driven by continued strong performance in CFT, pay combined with an acceleration of Revenue and profitability and passport, which offset Investments. We continue to make in newer verticals within priority Tech Ventures that we believe will provide the next leg of the growth stool for the Enterprise segment.
Moving to Consolidated operating expenses.
Salaries and benefits of 27.1 million, increased by 4.9 million or 222.3% compared to Q2 of last year and sgna of 13.9 million.
Increased by 2.7 million or 24% from Q2 of 2024.
The increase in salaries and benefits.
Was driven by higher stock compensation. Expense in the quarter along with increased headcount from organic growth along with acquisition related activity.
In late Q4 of last year and early q1 of this year.
Sgna expenses were higher in the quarter as a result of increased accounting and fox related expenses along with higher marketing and software expenses.
Moving to the capital structure and liquidity overview: debt at the end of the quarter was $935.5 million, and we ended the quarter with $120.6 million of available liquidity, including all $70 million of borrowing capacity under our revolving credit facility and $50.6 million of unrestricted cash on the balance sheet.
For the LTM period into June 30th adjusted Eva of 213.7 million represents 4.5 million of sequential quarterly growth from 2009.2 million at the end of q1.
This growth and adjusted ebta combined with our net debt of 884.9 million resulted net. Leverage of 4.1 at quarter end, which is down from 4.2 times at the end of q1.
As highlighted in our press release on Monday.
I'm pleased to reiterate that we closed on the issuance of new senior credit facilities to refinance, our existing debt on favorable terms, the new senior credit facilities, consist of an upsized, 100 million 5 year revolver, and the new 1 billion, 7-year term 1.
In addition to extending maturities with successful and lowered, the interest rate on the upsized terminal by 100 basis points, which will save priority and ensure shareholders, nearly 7 million of interest expense on an annualized basis.
Proceeds from the 1 billion dollar term 1, we use to refinance existing Debt, Pay related transaction, fees and expenses, accelerate payment of certain deferred considerations related to the Q3 2023 acquisition of plastic.
And to put cash in the balance sheet that will be used for strategic growth initiatives, including a tuck in acquisition that we anticipate closing within the next several weeks.
Moving down to slide 15 and our revised financial guidance. We are narrowing our original full-year revenue guidance to a range of $970 million to $990 million, which compares to the prior guidance of $965 million to $1 billion.
As Tom noted earlier, we expect to see an acceleration of growth in the second half of the year. That acceleration is due to the timing of our sales pipeline.
The impact of year-over-year. Comparatives and moderating headwinds in specialized acquiring and the attrition from a historical residual purchases, which were 4 to 5% drags against strong growth and core operating performance in SMB. During the first half of the year.
Updated ranges are 365 to 380 million and 222.5 to 227.5 million respectively.
Before I turn the call back over to Tom. I also wanted to provide an update on our progress in the remediation of the material, Lucas related to the design and operating deficiencies in certain automated controls around ingestion and validation of third-party processors data.
As noted in our 10K and comments on our last earnings, call the material weakness did not result in a restatement or any change to our Consolidated Financial results. And as of today, I'm pleased to say the team has substantially completed the work necessary to remediate the deficiency and is now testing those controls in a production environment.
so while we're confident that the hard work on this project is behind us,
The material weakness will remain until we complete our testing procedures and receive validation.
From our external auditor.
With that, I'll now turn the call back over to Tom for his closing comments.
Thank you, Tim.
Before concluding.
I want to reflect on a handful of topics we've detailed in the past that are core to our differentiation
And consistent performance through varying, economic environments. And in an emerging Trend that I believe will be an important Catalyst for outside growth and Equity value creation at priority.
Kim has already discussed the mix shift in our earnings quality over the past four plus years.
As adjusted gross profit from recurring Revenue. Now represent 62% of total adjusted gross profit on the increased strength of 31% and 23% in this key metric.
For B2B and the Enterprise segments respectively.
As with everything we do.
We've built these business lines with intention over years of thoughtful planning and cost efficient execution.
To be in position to capitalize on emerging Trends, early in their cycle.
To create asymmetric risk, reward profiles.
Now when including our results in the second quarter of 2025 that vision and execution delivered, 5-year compound, annual adjusted ebit of growth of nearly 20% through the end of June 2025.
I offer this perspective.
Because I believe some of the recently, publicized transactions.
Reflect an acceleration in the embedded, Finance value, creation thesis, and fintech consolidation.
well, the number of players seeking strategic assets,
Deep in their access to business distribution pools, particularly small, and medium-sized businesses.
And add products.
That you could characterize as non-discretionary.
To be a single Source solution provider to improve their unit economics.
Recent transactions like Zero's acquisition of melio for 2 billion dollars.
Being Capital portfolio company acura's, purchase of Heartland, payroll for 1.1 billion.
Or tpg's purchase of avid Exchange.
Reinforce this emerging dynamic.
And we continue to curate and evolve priorities, flexible Commerce engine, connecting payments and banking on a single platform.
To centralize all money movement at scale for our partners.
and with our expanding menu of Core Business applications,
To go along with that capability.
Through our priority Tech Ventures activity.
We're enabling solutions for payroll benefits.
And vertical markets with large profit pools, including construction and prop Tech among others at attractive entry points.
Giving our strategies time to manifest profits and margin expansion.
While the accelerating Trend toward full service platforms, continues to emerge.
As always, I first want to thank my colleagues at priority who continue to work incredibly hard.
To deliver industry-leading results.
Your commitment and dedication to improving. Everything we do is clear.
Providing our partners and customers with a constant reminder, that they made the right choice to partner with priority.
Last, we continue to appreciate the ongoing support of our investors and analysts.
and for those in attendance who are new to priority for taking the time to participate in today's call,
Operator. We'd like to now open the call for questions.
if your question has already been addressed, you'd like to remove yourself from Hugh, please press star, then 2
Our first question today comes from Brian Bergin with TD Cowen. Please go ahead
Hey guys. Good morning, thank you. Uh, wanted to start on just core SMB growth. So so just first, what was that? Core growth, net, net of the vamp and the residual headwind versus the the 1. Q growth of about 10%, I may have missed it. Sorry I did. And then can you dig into the drivers of the underlying strength of SMD here just any outperformance drivers site that you want to detail?
No, have to.
So it was 9 and a half percent for the quarter compared to, you know, the 10% number you referenced for q1. And you know, as I think about the core, you know what I Define in that core is really just taking the SMB or the acquiring business and then backing out the, the impact of the residual purchases and then the specialized acquiring business and then getting down to that core. So we're continuing to see very strong growth in, you know, our, our larger isos. They continue to perform very well. Um, they're adding a lot of volume, right? The volume growth, in that same core, component was, you know, north of 10%, right? So we do see some attrition at the lower ends of the portfolio. Um, a lot of that is the same store sales, right? We're actually seeing the headwinds from same store sales in the market. Now where our controllable churn is we think about the actual, you know,
Merchant base that remains on the platform. Uh has remained very steady and kind of the high single digits area. You know, the same store sales is a little bit of a headwind but you know, our larger isos continue to grow at a very healthy clip and we continue to add new ISO onto the platform as well. So those are really the main drivers of what we're seeing there with that strong core performance.
Okay. Okay, very good. As we look at the revised 2025 Revenue guide. Can you talk about some of the underlying assumptions at the, at the low end versus the high end? And it's just, we did kind of run around the map on the second half implied growth. Um I think it's about 13 and a half of the midpoint versus 9 year to date to just help us with the the conviction you have on that acceleration.
Sure. Yeah, I think some of it is driven by SMB, right? We're going to have moderating, headwinds and SMB from, you know some of those 2 areas that I spoke about. Um just looking at kind of year-over-year comparatives there, those will moderate a little bit in the second half of the year. Um we also have a number of, you know, large customer wins that, you know, we're rolling onto the platform. They haven't really shown up in the, the numbers just yet and we've been
Let's say probably a conservative as you think about the timing of those and the impact they have in the balance of the year. So I think that could be some potential, you know upside uh if those come on faster and ramp faster than what we've modeled at this stage. Um so just think about kind of the low end and high end. Those are 2 of the variables. Um yeah I think we also have modeled.
You know, 2 rate Cuts right now into the forecast obviously those numbers are still moving around as you think about what could happen in the the broader macro economy. Uh I think
Most estimates right now would show, you know, 2 maybe 2 and a half if you kind of look at the averages. Um, so we've got that built into that the forecasts as well. Uh, and then deposit balance just continue to grow, right? So if those accelerate even faster than what we've been seeing, uh, that could be some further upside to the upper end of that range.
All right, very good. Thank you.
Thank you. And the next 1 today, has some Brian Clinger with Alliance Global Partners. Please go ahead.
Hi, thanks for taking our questions.
Um, this is Kevin from Brian. Um, so last quarter, you spoke about the resilience in the SMB segment, have you seen any shift in the volume trends for some of those businesses given the softening jobs and business sentiment? Um, especially now that we're starting to see the new tariff policies in effect.
we really haven't, I think the the portfolio is performed, you know, very well overall and we talked to q1 about some of the
the resilience within our portfolio on, just the mix of and customers we serve and
Even if you break that apart and say, that we've got caught roughly 30% in retail, you know, there's a lot of sub components within that that have resilience right, whether it's, you know, beer Wine, Liquor Stores, auto parts stores gas stations, right? There's a lot of areas there that, um, are somewhat more resilient to any kind of a recession or a downturn, so, uh, it's performed well, um, you know, same store sales on a macro level, uh, is definitely a headwind. But, uh, that's that's been the case now, for several quarters in a row. So I don't think that's a new phenomenon that we're seeing.
Okay, great. Uh, thank you. Um, and just another 1 with the recent closing of the new credit facilities and stronger balance sheet, how have you been thinking about Capital, allocation, and year, and longer term?
Marketplace, uh, with some dislocation out there and the ability to acquire attractive assets, at what we think are, um, very attractive valuation multiples.
I think the the real driver of this refinancing was to take advantage of a favorable Market condition and our continued, strong performance and and lower the interest rates. So, you know, saving 100 basis points on the rates was really the the main driver, you know, in that refinancing effort.
Great. Thank you.
Thank you. And our next question comes from Jacob. Stephan with Lake Street. Capital markets, please go ahead.
Hey morning, guys. Congrats on the nice quarter here. Uh, maybe just kind of help us think through some of the, uh, the, the average monthly enrollments, the CFT pays looks like they accelerated nicely. Um, you've got almost a, you know, a million clients there. But I mean, is this really a function of, you know, better cross-selling efforts, uh, is this a function of, you know, new new client wins? What, what's the driving Factor here?
The primary driver there has been um uh investment from uh some of our partners.
uh, so there's uh,
there's been a a favorable condition for, for some time. Um, in terms of customer acquisition. Um, I think we've, you know, we've spoken about it just some of the changes
in, um,
You know, in in credit counseling and so forth. So, uh, some of our partners have, um, you know, have have just amped up their efforts in, uh, sales and marketing. And, uh, we, we had the expectations that, that that would kick in and the latter part of the year. Uh, and and it, you know, you're seeing that acceleration
Um, so we don't expect that to Abate anytime soon.
Got it. Um, and maybe just on the priority Tech Ventures, uh, Investments, you're making, um, you know, help us understand kind of how this piece is into the overall portfolio. And these kind of companies, you know, you're taking early stage investments in and you know, bringing them onto the, the, uh, the tech stack. As as you as they kind of grow or how are you thinking about that?
Yeah, sure. Um, you know, just I'll digress for a moment, but you'll probably recall from, you know, more than a year ago, we had noted that like the the just the, The Venture space generally um, was struggling for Capital and uh, you know, there was some
Just well-built technology platforms out there that, um, collecting storing lending sending money was a core part of the value chain, uh, payroll for 1, uh, property Tech and, uh, you know, real estate, uh, Property Management, um, benefits another and, um, you know, the, the, the platforms out there were that were competing with were somewhat Legacy. And, you know, not that they weren't at scale, they're they're, uh, a number of excellent competitors out there. But, um, they were, uh, I'll probably less Capital efficient, uh, operating from an operating cost standpoint. So, you know, we were able to
Find platforms that, you know, at real attractive prices that fit well into our core customer base. Uh, like payroll, you know, buying rolli like, you know, our our Prisma product where, you know, we've we've
Um, you know, we've been able to build out a, a presence in, um, property management and treasury, um, activity in that in that segment, um, or, you know, the benefits space as well. So all these are, uh, you know, especially payroll and benefits. They're, they're non-discretionary, every business needs them. We got a few hundred thousand small businesses. Doesn't take a genius to figure out. Well, you know, you buy it at the right price point. You get it into the sales funnel and uh you incentivize, you know, really strong sales teams that you know. I think we know we deliver. You can just see those results in small business growth. Um, then uh, you know it's it's really making our partners portfolios worth more.
That priority. Um, that's a phenomenon you're seeing, you know, in the SMB space when you look at acquiring and you know, why the volume's consistent and you know, why we drive loyalty because, you know, we invest in, in, in their ability to make, you know, to make things happen and, and make money. So, it's really bringing all that together. Uh, and that's what tech Ventures is, you know, has been designed to do. Um, and uh,
you know, we're we're excited about
The um you know, the the the potential within that segment, particularly given, as I said our our our price point of entry.
Got a very helpful. I appreciate all the color.
Yeah, absolutely.
And our next question, today comes from Tim Switzer at KBW. Please go ahead.
Hey, good morning, thank you for answering my questions. Um,
Follow-ups on the capital stack with this tuck-in acquisition you guys are talking about: is that anything where you might need to raise more debt for it, or would it be debt coming along with it? And do you guys have any plans at all to utilize the share repurchase authorization?
Sure. Any time. Um, now the the acquisition is is largely
Pre-funded, right? So the billion dollars of debt was obviously an upsize from the existing debt level. We had part of that increase in the proceeds went to prepaying, the Deferred consideration on plastic, the balance of it, went to the balance sheet, um, in cash. And we'll be there for this, this talk and acquisition. Uh, assuming that 1 closest, um, if not, it'll remain there. Uh, as we continue to look at opportunities, you know, in the broader Marketplace. But um, but we're we're excited about this opportunity that's in front of us. Um, you know, it
It won't have a large impact on the balance of this year. Uh, but you know, going into full year of 26, um, you know, that'll have a, a nice uplift for us. Um,
On the rest of the p&l.
Okay, great. Um, good caller. And then can you also discuss it? It sounds like you haven't seen any material impacts at all from, um, you know, tariffs and some of the macro on certainly. But you know, if things did sort of turn around with certainty of weaker labor market here, how would that impact? You know, the revenue Outlook. You have um, overall and you know, particularly in SNB versus Enterprise
yeah, in fact let let's let me let Tim speak to the SMB segment and then
I think, as we've, you know, we've publicized very intentionally, we have.
Built out, counter cyclical uh, business lines. That, you know, I'll just say do well in uh, economically challenging environments. Um, and then I'll, I'll sort of maybe reflect on that counter cyclical component that, you know, that offsets any any pressures that emerge in SMB. Um, which you know, I'll just say at this stage. We're not seeing but Tim, go ahead. Sure. And Tim I, maybe offer a more nuanced.
Um, response to kind of what you said about SMB and not seeing any impact from the tariffs because I think it it's hard to delineate. You know what's the impact on the Tariff versus just broader economy? But we you know we have been seeing some headwinds from same store sales and that's been continuing for you know, several quarters now. So I think that could be part of the impact of the economy or tariffs. So I don't want to say, we're not seeing any impact in SMB because that probably lays into that.
We're just we're out running it right? Our our ISO base is growing or adding more ISO onto the platform um and we continue to just really grow The Core Business at a faster pace. So we're out running, you know some of those headwinds
The other thing, I'll just note and and this is what gives us the optimism for the remainder of the year is, um, you know, our our isv partners. Um
Have, uh, you know, have continued continued to grow. We're still
You know, those those you harvest over a longer period of time, um, once they connect. So um,
You know, we have a a number of those contracted that are just uh being harvested. Um, so as those
As that occurs, you'll.
um, that gives us, you know,
confidence in the, in the acquiring segments, um, stability,
Now, aside from that and to your point on um, let's say a potential label Mark, Labour Market impact or um, on tariffs. Um, those are environments where we
Uh, generally see our B2B payable segment. Um,
accelerate because working capital becomes a greater concern folks are are looking for, you know,
Sources. Like, you know, like plastic and um and our our payables uh Suite to extend working capital
so, um,
that's been a benefit in previous, um, economic Cycles. Uh, so we would expect that to continue and then, of course, you know, within the, um, within the CFT pay segment, you know, again, that that's just a, when, when consumers become a bit more stressed, you know, they're, they're more, they're more likely to,
You know to look for assistance and we're really well positioned to work with our partners in that uh in that segment to provide that assistance. And you know, we see generally enrollments accelerate
That's great. Thank you for all the color.
Thank you. And our next question comes from. How gets with B Riley? Please go ahead.
Describe their go to market. Are they leading with a software enabled solution or a point of sale system either yours or, or, um, reselling? Somebody else? Give us a call for on what is working in SMB because what is working seems to be like, you know, growing nicely above. What, what you would see from, you know, the card network, uh, you know, they're only growing, you know, 6 7%, you know. So you you clearly have some success there and want to know more a little bit more about that.
Yeah, you know? Um,
It is.
We lead with with a technology Suite, right? We we like to say choose your adventure.
um, so you know, enabling uh, a more agile approach to
Um, I'll call it like vertical solutions that are resellers focus on is um, you know, has just been has been a benefit. Um,
so that
is, you know, not just it, it's certainly POS, um, that, uh, um, you know, to some extent.
But the
the menu of options that are available to accelerate cash flow and optimize working capital, that's really our value proposition. And, you know, sort of
Build your Alle carte menu the way your business operates.
that's,
That's been the winning formula.
um, and it's it's not a 1 size, fits all
I think that comes from the deep understanding of who our reselling partners are.
and, you know, enabling that flexibility for them to.
To play to their strengths.
I would just add on to that how that I think the other component, in addition to the technology I'm talking about, is
Is having high-quality customer service important? Being available for those reselling partners to get problems solved, as well as for the merchants to resolve their issues, is crucial. I believe that having a high level of customer service, including having someone available to pick up the phone and address these problems, is a key component for us.
Okay.
Terrific, thank you very much.
Thank you. And this concludes the question and answer session. I'd like to turn the conference back over to the management team for any closing remarks.
We'd ugh.
And priority. Um, we are, uh, you know, I appreciate the
You know, the final comment how, um, on our, you know, execution and uh, rest assured.
We'll uh we'll be continued laser focused on on just that so thanks everyone. And we look forward to getting together next quarter.
Um, to demonstrate our execution.
Thank you. This concludes today's conference call. We thank you all for attending. Today's presentation.
You may not describe your lines and have a wonderful day.