Repay Aims for 10–12% Revenue Growth in 2026 with AI and AP Advancements

Earnings Call Insights: Repay Holdings Corporation (RPAY) Q4 2025

Management View

John Morris, CEO of Repay, highlighted that the company "delivered on its promise to improve growth as it exited 2025." The company achieved 10% revenue growth and 9% gross profit growth in Q4, measured on a normalized year-over-year basis, excluding political media contributions from 2024. Adjusted EBITDA margins reached 41%, and free cash flow conversion was 43%. Morris emphasized strengthening operations, go-to-market efforts, and leadership as key drivers, noting "our bookings have gained momentum, giving us confidence in the full year 2026."

The Consumer Payments segment saw Q4 revenue increase by 8% and gross profit by 6% year-over-year, supported by growth in software partnerships and deeper integrations. A new integration with Emotive software for the automotive finance sector was announced.

In Business Payments, normalized Q4 revenue increased by 41% and gross profit by 73%, with supplier network growth exceeding 65% year-over-year. The company added over 240,000 suppliers during 2025, exiting the quarter with 602,000 suppliers and 105 software partners. Morris pointed to "modernization initiatives like float income, expanded enhanced ACH offerings, and increased total pay adoption" as major achievements. He also highlighted a new referral partnership with Western Virginia University Gold and Blue enterprises.

Morris emphasized the adoption of AI and automation across operations, including AI assist for client onboarding and AI middleware for tech migrations. He announced "Repay Voice," an IVR product set for rollout in 2026, and referenced industry recognition for best gateway uptime and highest authorization rate.

Robert Houser, CFO, stated, "Revenue was $78.6 million and gross profit of $58.3 million" for Q4, with Q4 gross profit margins at approximately 74.2%. Houser noted Q4 adjusted EBITDA of $32.4 million, adjusted net income of $16.8 million ($0.19 per share), and free cash flow of $13.8 million. He reported a noncash goodwill impairment charge of $138.9 million in the Consumer Payments segment. As of December 31, the company had $116 million in cash, and after a January debt payment, pro forma cash stood at $79 million with $398 million in debt.

Outlook

Repay projects 2026 revenues between $340 million and $345 million, representing 10% to 12% reported revenue growth and 7% to 9% normalized revenue growth, excluding political media. Adjusted EBITDA is expected to be between $136.5 million and $141.5 million, or about 40% margins. Houser explained, "We are confident in achieving a free cash flow conversion target of above 45%." Interest expense is expected to be about $15 million in 2026, and political media is anticipated to contribute $8 million to $10 million in revenue.

Management indicated that Q1 2026 growth will be lower due to some implementations pushing to later in the year, but "the second half returning to strong double-digit normalized growth."

Capital deployment will prioritize organic growth, targeted OpEx investments, strategic M&A, partnerships, product and technology initiatives, and potential share buybacks.

Financial Results

Q4 revenue was $78.6 million and gross profit $58.3 million. Adjusted EBITDA was $32.4 million, and free cash flow was $13.8 million. Pro forma net leverage after the January debt payment is about 2.5x. The company paid off $147 million in convertible notes, funded through a $37 million cash draw and $110 million from a revolving credit facility. Pro forma total liquidity is $219 million.

Consumer Payments revenue and gross profit increased 8% and 6% year-over-year, respectively. Business Payments normalized revenue and gross profit rose 41% and 73% in Q4. Q4 gross profit margins were 74.2%.

Q&A

Mike Grondahl, Northland Capital Markets, asked for updates on end markets such as auto, personal loans, health care, and mortgage. Morris responded that trends remain stable and consistent with prior quarters, and "nothing major that we would not be inside of our guide" regarding customer renewals.

Alexander Neumann, Stephens Inc., asked about tax refund season impacts. Morris stated, "We do see seasonal uplift in our first quarter related to tax refunds. That appears to be relatively normal."

Neumann also inquired about B2B float income. Houser replied, "The flow is from our customer deposits in our B2B business... it played a part of our strong results in the fourth quarter."

Shefali Tamaskar, Morgan Stanley, asked for an M&A pipeline update and focus for 2026 investments. Morris said the company has a "healthy pipeline" in both consumer and business payments and is investing in enterprise sales, go-to-market, and AI-driven product initiatives.

Timothy Chiodo, UBS, asked about the Visa CDP program's impact on business payments. Morris explained, "Level 2 effectively is going away to level 3... we should have -- we would have some impact on our AR side of our B2B business related to that."

Peter Heckmann, D.A. Davidson, asked about sustainable organic growth for business payments and major consumer initiatives. Houser said high teens growth is possible, factoring in political seasonality. Morris noted that initiatives like auto OEM and mortgage are "baked into our 2026 forecast."

Sentiment Analysis

Analysts’ tone was neutral, focusing on market trends, business segment performance, and capital allocation without notable skepticism or pessimism.

Management maintained a confident and forward-looking tone, particularly in prepared remarks and when discussing AI, product rollouts, and financial outlook. Phrases such as "We are confident in achieving a free cash flow conversion target" and "our bookings have gained momentum" signal optimism.

Compared to the previous quarter, analyst tone remained steady and neutral. Management’s sentiment shifted from cautious optimism to more pronounced confidence, supported by sequential improvement and operational achievements.

Quarter-over-Quarter Comparison

In Q4, Repay reported improved normalized growth rates (10% revenue, 9% gross profit) compared to Q3 (5% revenue, 1% gross profit).

Business Payments segment saw accelerated growth in Q4 (41% revenue, 73% gross profit) versus Q3 (12% normalized gross profit growth).

Management’s guidance language became more assertive, with double-digit revenue growth targets for 2026 and a positive outlook on AI and automation benefits.

Analysts maintained consistent questioning around end markets, B2B growth, and capital allocation, while management’s tone shifted to higher confidence in outlook and execution.

Strategic focus continued on AI and automation, with added emphasis on scaling partnerships and integration capabilities.

Risks and Concerns

Management cited client implementation delays impacting Q1 2026 growth, but expects normalization in the second half.

A noncash goodwill impairment charge of $138.9 million was reported in the Consumer Payments segment.

Morris noted the complexity of Visa network changes could impact the AR side of the B2B business.

Houser addressed working capital timing as a factor in free cash flow conversion, indicating no reversal in Q1.

No major customer renewals or contract expirations outside of standard auto-renewals are expected to impact 2026 guidance.

Final Takeaway

Repay Holdings capped 2025 with accelerated normalized growth, robust profitability, and significant advancements in AI-driven automation and integration across its Consumer and Business Payments segments. Leadership projects double-digit revenue growth in 2026, supported by expanding partnerships, product innovation, and targeted investments in organic and inorganic opportunities. Management’s outlook is buoyed by healthy pipelines, scalable technology, and prudent capital allocation, positioning the company for continued operational momentum and long-term value creation for shareholders.