REPAY Q1 2022 Investor Presentation
REPAY Q1 2022 Investor Presentation
REPAY Q1 2022 Investor Presentation
Investor Presentation
May 2022
1
Disclaimer
On July 11, 2019 (the “Closing Date”), Thunder Bridge Acquisition Ltd. (“Thunder Bridge”) and Hawk Parent Holdings LLC (“Hawk Parent”) completed their previously announced business combination (the “Business Combination”) under which Thunder Bridge acquired Hawk Parent,
upon which Thunder Bridge changed its name to Repay Holdings Corporation (“REPAY” or the “Company”). Unless otherwise indicated, information provided in this presentation (a) that relates to any period ended prior to the Closing Date reflects that of Hawk Parent prior to the
Business Combination, and (b) that relates to any period ended December 31, 2019 reflects the combination of (i) Hawk Parent for the periods from January 1, 2019 through July 10, 2019 and (ii) REPAY for the period from the Closing Date through December 31, 2019. Such
combination reflects a simple arithmetic addition of the relevant periods. The historical financial information of Thunder Bridge prior to the Business Combination has not been reflected in any financial information of Hawk Parent.
The Company’s filings with the Securities and Exchange Commission (“SEC”), which you may obtain for free at the SEC’s website at http://www.sec.gov, discuss some of the important risk factors that may affect REPAY’s business, results of operations and financial condition.
Forward-Looking Statements This presentation (the “Presentation”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating
results, REPAY’s plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,”
“projection,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, expected demand on REPAY’s product offering, including further implementation of electronic payment options and statements regarding REPAY’s market and growth
opportunities, and our business strategy and the plans and objectives of management for future operations. Such forward-looking statements are based upon the current beliefs and expectations of REPAY’s management and are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. In addition to factors previously disclosed in REPAY’s reports filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2021, the
following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: exposure to economic conditions and political risk affecting the consumer loan
market, the receivables management industry and consumer and commercial spending; the impacts of the ongoing COVID-19 coronavirus pandemic and the actions taken to control or mitigate its spread; a delay or failure to integrate and/or realize the benefits of REPAY’s recent
acquisitions; changes in the payment processing market in which REPAY competes, including with respect to its competitive landscape, technology evolution or regulatory changes; changes in the vertical markets that REPAY targets, including the regulatory environment applicable to
REPAY’s clients; the ability to retain, develop and hire key personnel; risks relating to REPAY’s relationships within the payment ecosystem; risk that REPAY may not be able to execute its growth strategies, including identifying and executing acquisitions; risks relating to data security;
changes in accounting policies applicable to REPAY; and the risk that REPAY may not be able to maintain effective internal controls. Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and
the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future
performance. All information set forth herein speaks only as of the date hereof in the case of information about us or the date of such information in the case of information from persons other than us, and we disclaim any intention or obligation to update any forward-looking
statements as a result of developments occurring after the date of this communication. Forecasts and estimates regarding our industry and end markets are based on sources we believe to be reliable, however there can be no assurance these forecasts and estimates will prove accurate
in whole or in part. Projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.
Industry and Market Data The information contained herein also includes information provided by third parties, such as market research firms. Neither of REPAY nor its affiliates and any third parties that provide information to REPAY, such as market research firms, guarantee the
accuracy, completeness, timeliness or availability of any information. Neither REPAY nor its affiliates and any third parties that provide information to REPAY, such as market research firms, are responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or
the results obtained from the use of such content. Neither REPAY nor its affiliates give any express or implied warranties, including, but not limited to, any warranties of merchantability or fitness for a particular purpose or use, and they expressly disclaim any responsibility or liability
for direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees or losses (including lost income or profits and opportunity costs) in connection with the use of the information herein.
Non-GAAP Financial Measures This Presentation includes certain non-GAAP financial measures that REPAY’s management uses to evaluate its operating business, measure its performance and make strategic decisions. 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 not to be part of normal operating expenses, non-cash and/or non-recurring charges, such as loss on extinguishment of debt, non-cash change in fair value
of contingent consideration, non-cash change in fair value of assets and liabilities, non-cash change in fair value of warrant liabilities; share-based compensation charges, transaction expenses, management fees, employee recruiting costs, other taxes, strategic initiative related costs
and other non-recurring charges. REPAY believes that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating its operating results in the same manner as management. However, Adjusted EBITDA is not a financial measure calculated in
accordance with GAAP and should not be considered as a substitute for net income, operating profit, or any other operating performance measure calculated in accordance with GAAP. Using a non-GAAP financial measure to analyze REPAY’s business has material limitations because
the calculations are based on the subjective determination of management regarding the nature and classification of events and circumstances that investors may find significant. In addition, although other companies in REPAY’s industry may report measures titled Adjusted EBITDA or
similar measures, such non-GAAP financial measures may be calculated differently from how REPAY calculates its non-GAAP financial measures, which reduces their overall usefulness as comparative measures. Because of these limitations, you should consider Adjusted EBITDA
alongside other financial performance measures, including net income and REPAY’s other financial results presented in accordance with GAAP.
Beginning with the quarter ended December 31, 2021, REPAY changed its method of calculating Adjusted EBITDA by removing the adjustment related to legacy commission restructuring charges and their tax effects. Adjusted EBITDA for the years ended December 31, 2020 and 2019
were also adjusted to conform to the current presentation, resulting in reductions in the Adjusted EBITDA from the previously reported amounts. The presentation for Adjusted EBITDA for all periods presented have been updated to reflect these changes and a reconciliation between
the revised and previous definition of Adjusted EBITDA has been provided within the “Adjusted EBITDA Reconciliation – Historical” slide contained herein.
2
Agenda
1 Introduction to REPAY
Introduction
1 to REPAY
4
B2B MERCHANT
ARM AUTOMOTIVE LOANS B2B AP AUTOMATION
ACQUIRING
Who We Are
225 76%
SOFTWARE CASH FLOW
INTEGRATIONS(2) CONVERSION(3)
M&A CATALYSTS
=
ORGANIC GROWTH LONG-TERM GROWTH
AT INITIAL BUSINESS
COMBINATION (IBC) First Quarter 2022(1)
TOTAL ADDRESSABLE
MARKET ~$535Bn ~$5.3Tn(2)
# OF ISV
INTEGRATIONS 53 225(4)
REPAY Investment
2 Highlights
10
ARM $70Bn
Personal Loans $70Bn Buy Now. Pay Later.
Energy $30Bn $20.5Bn
REPAY’s 2021 Annual
Card Payment Volume
Mortgage 10%
2012A 2017A 2022E
B2B Acquiring 8%
Credit Card Penetration Debit Card Penetration
1) The Nilson Report – December 2018. Represents debit and credit as a percentage of all U.S. consumer payment systems, including various forms of paper, card, and electronic payment methods
2) Third-party research and management estimates
14
2 REPAY Has Built a Leading Next-Gen Software Platform
Pay
Businesses and
Clients Anywhere, Consumers
Any Way,
Any Time
15
2 REPAY Has Built a Leading Next-Gen Software Platform
Tier 2 100
(Direct Sales) 70
$1MM – $5MM Monthly Volume 53
50 37
16 25
Tier 1 0
(Call Center) 2015A 2016A 2017A 2018A 2019A 2020A 2021A Q1 2022A
<$1MM Monthly Volume
NUMBER OF SOFTWARE
INTEGRATION PARTNERS
18
4 Attractive and Diverse Client Base Across Key Verticals
REPAY’s platform provides significant value to >19,000(1) clients offering solutions across
a variety of industry verticals
Percentage of Card Payment Volume(2)
B2B
LOAN REPAYMENT
• One-stop shop B2B payments solutions provider, offering AP
automation and B2B merchant acquiring solutions
• Market leader in personal loans, automotive
loans and mortgage servicing 20% • Integrations with ~85 leading ERP platforms, serving a highly
diversified client base across a wide range of industry
• Blue chip ISV partnerships and ~5,000(2) clients, including
verticals
210+(2) credit unions
• Recent expansions into adjacent
Buy-Now-Pay-Later vertical as well
as Canada ARM
50% 10% • Deep domain expertise in compliance, underwriting and risk
management
• Omni-channel payment options integrated
into 100% of solution providers
offering solutions across a
10%
variety of industry verticals
OTHER HEALTHCARE
• Expanding presence in nascent markets with increasing card • Emerging software and payments platform
10% in large and growing $420Bn(3) healthcare payments market
penetration (i.e., energy)
• Best-in-class processing technology solutions • Comprehensive, streamlined payments acceptance and
for ISOs, acquirers and owned clients communications solutions
1) Management estimate, including TriSource, APS, Ventanex, cPayPlus, CPS Payments , BillingTree, Kontrol Payables and Payix as of 3/31/2022
2) As of 3/31/2022
3) Represents out-of-pocket payments to providers
19
5 Demonstrated Ability to Acquire and Successfully Integrate Businesses
Demonstrated ability to source, acquire and integrate Dedicated team to manage robust
various targets across different verticals M&A pipeline
20
5 Multiple Levers to Continue to Drive Growth
9-member board of
directors comprised of John Morris Shaler Alias Paul Garcia Maryann Goebel
CEO & Co-Founder President & Co-Founder Former Chairman Former CIO, Fiserv
industry veterans and and CEO,
Global Payments
influential leaders
in the financial
services and payment
industries
Bob Hartheimer William Jacobs Peter Kight Emnet Rios Richard Thornburgh
Former Managing Director, Former SVP, Chairman, Founder of CFO and COO, Senior Advisor, Corsair
Promontory Mastercard / Board CheckFree / Former Vice Digital Asset
Member, Global Payments Chairman, Fiserv
and Green Dot
22
REPAY Financial
3 Overview
23
Financial Highlights
✓ Low volume attrition and low risk portfolio ✓ Deeply integrated with customer base
1) As of 3/31/2022
2) 2021A Cash Flow Conversion calculated as Adjusted EBITDA – Capex / Adjusted EBITDA
3) CAGR is from 2019A-2021A
24
REPAY has generated strong, consistent volume growth, resulting REPAY’s revenue growth has been strong, resulting in 45% CAGR from 2019
in ~$20.5Bn in annual card processing volume in 2021 to 2021
$15.2 $155.0
$10.7 $104.6
Gross margins are improving due to a decrease in processing costs Highly scalable platform with attractive margins
$113.6 $59.6
$78.7 $45.9