What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-07 · 123 added, 100 removed, 173 unchanged (56% of the section changed)

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We cannot assure you that future developments affecting us will be those that we have anticipated.

These forward-looking statements involve a number of risks, uncertainties (some of

which are beyond our control) or other assumptions, including the risk factors set forth in the " Item 1A - Risk Factors " section of this Quarterly Report on Form 10-Q or our Annual Report on Form 10-K, that may cause our actual results or performance to be materially different from those expressed or implied by these forward-looking statements.

These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions, including the risk factors set forth in the " Item 1A - Risk Factors " section of this Quarterly Report on Form 10-Q or our Annual Report on Form 10-K, that may cause our actual results or performance to

be materially different from those expressed or implied by these forward-looking statements.

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

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Results of Operations

This section includes certain components of our results of operations for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024.

This section includes certain components of our results of operations for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024.

We have derived this data, except the key indicators, from our Unaudited Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q and our Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

For the three months ended June 30, 2025, our consolidated revenue of $239.8 million increased by $19.9 million, or 9.1%, from $219.9 million for the three months ended June 30, 2024.

This overall increase was mainly driven by increase in merchant bankcard dollar value and total card dollar value processed in our SMB Payments segment, an increase in new enrollments and higher interest income in our Enterprise Payments segment and, an increase in incentive income and, increased processing volume in our B2B Payments Segment, which was partially offset by a decrease in issuing volume.

For the six months ended June 30, 2025, our consolidated revenue of $464.4 million increased by $38.9 million, or 9.1%, from $425.6 million for the six months ended June 30, 2024.

For the three months ended September 30, 2025, our consolidated revenue of $241.4 million increased by $14.4 million, or 6.3%, from $227.0 million for the three months ended September 30, 2024.

This overall increase was mainly driven by increase in total card dollar value processed in our Merchant Solutions segment, an increase in new enrollments, number of billed clients and higher interest income in our Treasury Solutions segment, and, increases in processing volume and ACH transactions count in our Payables Segment, which was partially offset by a decrease in issuing volume.

For the nine months ended September 30, 2025, our consolidated revenue of $705.9 million increased by $53.2 million, or 8.2%, from $652.6 million for the nine months ended September 30, 2024.

This overall increase was mainly driven by increase in total card dollar value processed in our Merchant Solutions segment, an increase in new enrollments, number of billed clients and higher interest income in our Treasury Solutions segment, and, increases in processing volume, incentive income and ACH transactions count in our Payables Segment, which was partially offset by a decrease in issuing volume.

The following table presents our revenues by type:

(in thousands) Three Months Ended June 30, Six Months Ended June 30,

(in thousands) Three Months Ended September 30, Nine Months Ended September 30,

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Merchant card fees

Merchant card fees revenue for the three months ended June 30, 2025 was $180.5 million an increase of $11.2 million or 6.6%, from $169.2 million for the three months ended June 30, 2024.

The increase was primarily driven by an increase in merchant bankcard value, total card value, and the transaction count processed by the Company.

Merchant card fees revenue for the six months ended June 30, 2025 was $347.6 million an increase of $20.4 million or 6.2%, from $327.2 million for the six months ended June 30, 2024.

The increase was primarily driven by an increase in merchant bankcard value, total card value, and the transaction count processed by the Company.

Merchant card fees revenue for the three months ended September 30, 2025 was $178.5 million an increase of $6.7 million or 3.9%, from $171.8 million for the three months ended September 30, 2024.

The increase was primarily driven by an increase in total card value, and the transaction count processed by the Company.

Merchant card fees revenue for the nine months ended September 30, 2025 was $526.1 million an increase of $27.1 million or 5.4%, from $499.0 million for the nine months ended September 30, 2024.

The increase was primarily driven by an increase in total card value, and the transaction count processed by the Company.

Money transmission services

Money transmission services for the three months ended June 30, 2025 was $39.3 million, an increase of $7.9 million, or 25.3%, from $31.3 million for the three months ended June 30, 2024.

Money transmission services for the three months ended September 30, 2025 was $41.0 million, an increase of $7.1 million, or 21.0%, from $33.9 million for the three months ended September 30, 2024.

This increase was primarily driven by an increase in new customer enrollments and average billed clients.

Money transmission services for the six months ended June 30, 2025 was $76.7 million, an increase of $16.2 million, or 26.8%, from $60.5 million for the six months ended June 30, 2024.

Money transmission services for the nine months ended September 30, 2025 was $117.7 million, an increase of $23.4 million, or 24.8%, from $94.4 million for the nine months ended September 30, 2024.

This increase was primarily driven by an increase in new customer enrollments and average billed clients.

Outsourced services and other services revenue

Outsourced services and other services revenue of $16.9 million for the three months ended June 30, 2025 increased by $0.6 million, or 3.7%, from $16.3 million for the three months ended June 30, 2024, primarily due to growth in interest income due to higher balances of permissible investments offset by reduction in interest rates.

Outsourced services and other services revenue of $33.9 million for the six months ended June 30, 2025 increased by $1.9 million, or 6.1%, from $31.9 million for the six months ended June 30, 2024, primarily due to growth in interest income due to higher balances of permissible investments offset by reduction in interest rates.

Equipment revenue of $3.2 million for the three months ended June 30, 2025 increased by $0.2 million, or 5.9% from $3.0 million for the three months ended June 30, 2024.

Outsourced services and other services revenue of $18.3 million for the three months ended September 30, 2025 increased by $0.2 million, or 1.2%, from $18.1 million for the three months ended September 30, 2024, primarily due to growth in interest income from higher balances of permissible investments driven by higher account balances offset by reduction in interest rates.

Outsourced services and other services revenue of $52.1 million for the nine months ended September 30, 2025 increased by $2.2 million, or 4.3%, from $50.0 million for the nine months ended September 30, 2024, primarily due to growth in interest income from higher balances of permissible investments driven by higher account balances offset by reduction in interest rates.

Equipment revenue of $3.6 million for the three months ended September 30, 2025 increased by $0.3 million, or 10.2% from $3.3 million for the three months ended September 30, 2024.

The increase was primarily due to increased sales of point-of-sale equipment.

Equipment revenue of $6.3 million for the six months ended June 30, 2025 increased by $0.3 million, or 5.3% from $6.0 million for the six months ended June 30, 2024.

Equipment revenue of $9.9 million for the nine months ended September 30, 2025 increased by $0.7 million, or 7.0% from $9.3 million for the nine months ended September 30, 2024.

The increase was primarily due to increased sales of point-of-sale equipment.

Operating expenses were as follows:

(in thousands) Three Months Ended June 30, Six Months Ended June 30,

(in thousands) Three Months Ended September 30, Nine Months Ended September 30,

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Cost of revenue (excludes depreciation and amortization)

Cost of revenue (excludes depreciation and amortization) of $147.4 million for the three months ended June 30, 2025 increased by $9.3 million, or 6.7%, from $138.1 million for the three months ended June 30, 2024, primarily due to the corresponding increase in revenues.

Cost of revenue (excludes depreciation and amortization) of $284.8 million for the six months ended June 30, 2025 increased by $17.3 million, or 6.5%, from $267.4 million for the six months ended June 30, 2024, primarily due to the corresponding increase in revenues offset by recovery of certain bad debts.

Cost of revenue (excludes depreciation and amortization) of $146.7 million for the three months ended September 30, 2025 increased by $5.6 million, or 4.0%, from $141.1 million for the three months ended September 30, 2024, primarily due to the corresponding increase in revenues.

Cost of revenue (excludes depreciation and amortization) of $431.4 million for the nine months ended September 30, 2025 increased by $22.9 million, or 5.6%, from $408.5 million for the nine months ended September 30, 2024, primarily due to the corresponding increase in revenues offset by recovery of certain bad debts.

Salary and employee benefits

Salary and employee benefits expense of $27.1 million for the three months ended June 30, 2025 increased by $4.9 million, or 22.3%, from $22.1 million for the three months ended June 30, 2024, primarily due to merit increases, increased headcount to support overall growth of the Company and from the acquisition of the Letus business, and increased stock based compensation related to long term incentive awards to executives.

Salary and employee benefits expense of $52.8 million for the six months ended June 30, 2025 increased by $8.6 million, or 19.3%, from $44.3 million for the six months ended June 30, 2024, primarily due to merit increases, increased headcount to support overall growth of the Company and from the acquisition of the Letus business, and increased stock based compensation related to long term incentive awards to executives.

Salary and employee benefits expense of $26.1 million for the three months ended September 30, 2025 increased by $4.4 million, or 20.2%, from $21.7 million for the three months ended September 30, 2024, primarily due to merit increases, lower capitalization rates, increased headcount to support overall growth of the Company and from the acquisition of Letus, Sila and Boom, and increased stock based compensation related to long term incentive awards to executives.

Salary and employee benefits expense of $79.0 million for the nine months ended September 30, 2025 increased by $13.0 million, or 19.6%, from $66.0 million for the nine months ended September 30, 2024, primarily due to merit increases, lower capitalization rates, increased headcount to support overall growth of the Company and from the acquisition of Letus, Sila and Boom, and increased stock based compensation related to long term incentive awards to executives.

Depreciation and amortization expense

Depreciation and amortization expense of $14.1 million for the three months ended June 30, 2025 decreased by $1.2 million, or 7.6%, from $15.2 million for the three months ended June 30, 2024, primarily due to full amortization of certain intangible assets.

Depreciation and amortization expense of $27.9 million for the six months ended June 30, 2025 decreased by $2.6 million, or 8.6%, from $30.5 million for the six months ended June 30, 2024, primarily due to full amortization of certain intangible assets.

Depreciation and amortization expense of $15.1 million for the three months ended September 30, 2025 increased by $1.4 million, or 10.1%, from $13.7 million for the three months ended September 30, 2024, primarily due to additional intangible assets from the Letus, Sila and Boom acquisitions and software capitalization, offset by full amortization of certain intangible assets.

Depreciation and amortization expense of $43.0 million for the nine months ended September 30, 2025 decreased by $1.2 million, or 2.8%, from $44.2 million for the nine months ended September 30, 2024, primarily due to full amortization of certain intangible assets offset by the addition of intangible assets from the Letus, Sila and Boom acquisitions and software capitalization.

Selling, general and administrative

Selling, general and administrative expenses of $13.9 million for the three months ended June 30, 2025 increased by $2.7 million, or 24.1%, from $11.2 million for the three months ended June 30, 2024, primarily due to increase in professional charges related to SOX compliance and increased marketing and software expenses to support overall growth.

Selling, general and administrative expenses of $29.0 million for the six months ended June 30, 2025 increased by $6.8 million, or 30.6%, from $22.2 million for the six months ended June 30, 2024, primarily due to increase in professional charges related to SOX compliance, increased marketing and software expenses to support overall growth, and legal expenses related to the Company's secondary offering of common shares and the Letus business acquisition.

Selling, general and administrative expenses of $15.7 million for the three months ended September 30, 2025 increased by $3.3 million, or 26.7%, from $12.4 million for the three months ended September 30, 2024, primarily due to increase in professional

charges related to SOX compliance, increased marketing and software expenses to support overall growth and cloud migration, expenses related to acquired businesses and assets, and certain nonrecurring expenses.

Selling, general and administrative expenses of $44.7 million for the nine months ended September 30, 2025 increased by $10.1 million, or 29.2%, from $34.6 million for the nine months ended September 30, 2024, primarily due to increase in professional charges related to SOX compliance, increased marketing and software expenses to support overall growth and cloud migration, expenses related to acquired businesses and assets, legal expenses related to the Company's secondary offering of common shares, and certain nonrecurring expenses.

Other Expense, net

Other expense, net were as follows:

(in thousands) Three Months Ended June 30, Six Months Ended June 30,

(in thousands) Three Months Ended September 30, Nine Months Ended September 30,

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Interest expense

Interest expense of $23.1 million for the three months ended June 30, 2025 increased by $1.3 million, or 6.2%, from $21.7 million for the three months ended June 30, 2024, due to increased outstanding balance of the term loan facility used for the redemption of redeemable senior preferred stock, offset by decrease in interest rates.

Interest expense of $46.2 million for the six months ended June 30, 2025 increased by $3.6 million, or 8.5%, from $42.6 million for the six months ended June 30, 2024, due to increased outstanding balance of the term loan facility used for the redemption of redeemable senior preferred stock, offset by decrease in interest rates.

Interest expense of $22.5 million for the three months ended September 30, 2025 decreased by $0.8 million, or 3.4%, from $23.2 million for the three months ended September 30, 2024, due to increased outstanding balance of the term loan facility and residual finance credit facility, offset by decreases in interest rates due to lower SOFR rates and beneficial changes in margin from the recent refinancing.

Interest expense of $68.7 million for the nine months ended September 30, 2025 increased by $2.9 million, or 4.3%, from $65.8 million for the nine months ended September 30, 2024, due to increased outstanding balance of the term loan facility and residual finance credit facility, offset by decreases in interest rates due to lower SOFR rates and beneficial changes in margin from the recent refinancing.

Debt Extinguishment and Modification Costs

Debt extinguishment and modification costs for the three and nine months ended September 30, 2025 were $12.5 million, driven by the recent financing of the term loan facility, acceleration of deferred consideration payment related to a prior acquisition, and offset by gain from early repayment of a loan granted by the Company.

Debt extinguishment and modification costs for the nine months ended September 30, 2025 were $12.5 million, an decrease of $3.8 million, or 44.4%, from $8.7 million for the nine months ended September 30, 2024, driven by the recent financing of the term loan facility, acceleration of deferred consideration payment related to a prior acquisition, and offset by gain from early repayment of a loan granted by the Company.

Other income, net

Other income, net, for three months ended September 30, 2025 and September 30, 2024 was $4.6 million and $0.7 million respectively, an increase of $3.8 million or 540.5%, primarily driven by the bargain purchase gain recognized due to the deferred tax assets (resulting from historical losses) related to the Sila acquisition.

Other income, net, for the nine months ended September 30, 2025 and September 30, 2024 was $6.7 million and $2.0 million respectively, an increase of $4.7 million or 231.5%, primarily driven by the bargain purchase gain recognized due to the deferred tax assets (resulting from historical losses) related to the Sila acquisition.

Income tax (benefit) expense

Income tax expense was as follows:

(in thousands) Three Months Ended June 30, Six Months Ended June 30,

(in thousands) Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 $ Change 2025 2024 $ Change

Income before income taxes $ 7,387 $ 15,507 $ (8,120) $ 33,208 $ 26,791 $ 6,417

Income tax expense $ 4,423 $ 2,515 $ 1,908 $ 6,673 $ 5,097 $ 1,576

Income tax (benefit) expense $ (20,201) $ 4,899 $ (25,100) $ (13,528) $ 9,996 $ (23,524)

Effective tax rate (273.5) % 31.6 % (40.7) % 37.3 %

We compute our interim period income tax expense or benefit by using a forecasted EAETR and adjust for any discrete items arising during the interim period and any changes in our projected full-year business interest expense and taxable income.

The EAETR for 2025 is 28.9% and includes the income tax provision on pre-tax income and a tax provision related to the establishment of a valuation allowance for deferred income tax on the future portion of the Section 163(j) limitation created by additional 2025 interest expense.

The effective tax rate for 2025 changed primarily due to an increase in the valuation allowance against certain business interest carryover deferred tax assets.

The EAETR for 2025 is 20.7% and includes the income tax provision on pre-tax income and a tax benefit related to the release of a valuation allowance against deferred income taxes related to section 163(j) interest limitation carry over utilized in the current year.

The effective tax rate for 2025 changed primarily due to a decrease in the valuation allowance against certain business interest carry over deferred tax assets.

Our consolidated effective income tax rates differ from the statutory rate due to timing and permanent differences between amounts calculated under GAAP and the U.S.

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The OBBBA, among other provisions, extends or reinstates certain provisions of the 2017 Tax Cuts and Jobs Act (TCJA), including but not limited to, 100% bonus depreciation on eligible property, immediate expensing of domestic research and development costs, and the restoration of an EBITDA based interest expense limitation calculation.

We are in the process of evaluating the provisions of the OBBBA, and their impact on the Company's financial statements.

As a result of the OBBBA interest expense limitation provision changes, the Company has released its valuation allowance against its interest limitation deferred tax assets.

Segment Results

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This non-GAAP financial measure helps to illustrate the underlying financial and business trends relating to results of operations of the Company and therefore used as a measure of segment profit or loss for the purposes of evaluation of segment performance and allocation of resources.

(in thousands) Three Months Ended June 30, Six Months Ended June 30,

Merchant Solutions

(in thousands) Three Months Ended September 30, Nine Months Ended September 30,

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Key Indicators:

Merchant bankcard processing dollar value $ 16,150,363 $ 15,801,626 $ 348,737 $ 31,444,496 $ 30,579,730 $ 864,766

Merchant bankcard transaction count 205,530 193,841 11,689 391,068 369,069 21,999

Total card processing dollar value $ 18,469,447 $ 18,076,156 $ 393,291 $ 54,822,837 $ 53,428,816 $ 1,394,021

Revenue from our SMB Payments segment was $163.2 million for the three months ended June 30, 2025, compared to $155.1 million for the three months ended June 30, 2024.

The increase of $8.1 million, or 5.2%, was primarily driven by an increase in merchant card fee rate, increased card processing dollar value, and transaction count increases.

The Company's merchant card fee revenue from the SMB Payments segment ($158.8 million for the three months ended June 30, 2025 and $150.7 million for the three months ended June 30, 2024) as a percentage of total card processing dollar value during the three months ended June 30, 2025 increased to 0.85% from 0.83% as compared to the three months ended June 30, 2024.

Revenue from our SMB Payments segment was $314.9 million for the six months ended June 30, 2025, compared to $299.1 million for the six months ended June 30, 2024.

The increase of $15.8 million, or 5.3%, was primarily driven by an increase in merchant card fee rate, increased card processing dollar value, and transaction count increases.

The Company's merchant card fee revenue from the SMB Payments segment ($306.3 million for the six months ended June 30, 2025 and $290.5 million for the six months ended June 30, 2024) as a percentage of total card processing dollar value during the six months ended June 30, 2025 increased to 0.84% from 0.82% as compared to the six months ended June 30, 2024.

Total card transaction count 230,741 223,700 7,041 671,233 642,827 28,406

Revenue from our Merchant Solutions segment was $161.9 million for the three months ended September 30, 2025, compared to $158.8 million for the three months ended September 30, 2024.

The increase of $3.1 million, or 2.0%, was primarily driven by an increased total card processing value and total card transaction count.

The Company's merchant card fee revenue from the Merchant Solutions segment ($157.2 million for the three months ended September 30, 2025 and $153.1 million for the three months ended September 30, 2024) as a percentage of total card processing dollar value during the three months ended September 30, 2025 remained consistent at 0.85% as compared to the three months ended September 30, 2024.

Revenue from our Merchant Solutions segment was $476.8 million for the nine months ended September 30, 2025, compared to $457.9 million for the nine months ended September 30, 2024.

The increase of $18.9 million, or 4.1%, was primarily driven by an increase in merchant card fee rate, increased total card processing value and total card transaction count.

The Company's merchant card fee revenue from the Merchant Solutions segment ($463.5 million for nine months ended September 30, 2025 and $443.6 million for the nine months ended September 30, 2024) as a percentage of total card processing value during the nine months ended September 30, 2025 increased to 0.85% from 0.83% as compared to the nine months ended September 30, 2024.

Adjusted EBITDA

Adjusted EBITDA from our SMB Payments segment was $27.7 million for the three months ended June 30, 2025, compared to $28.6 million for the three months ended June 30, 2024.

The decrease of $0.8 million, or 3.0% was primarily driven by an increase in revenue, offset by mix related margin compression and other operating expenses.

Adjusted EBITDA from our SMB Payments segment was $53.5 million for the six months ended June 30, 2025, compared to $53.6 million for the six months ended June 30, 2024.

The decrease of $0.2 million, or 0.3% was primarily driven by an increase in revenue, and recovery of certain chargeback losses, offset by mix related margin compression and other operating expenses.

(in thousands) Three Months Ended June 30, Six Months Ended June 30,

Adjusted EBITDA from our Merchant Solutions segment was $27.7 million for the three months ended September 30, 2025, compared to $28.6 million for the three months ended September 30, 2024.

The decrease of $0.9 million, or 3.2% was primarily driven by an increase in revenue, offset by mix related margin compression and increase in other operating expenses.

Adjusted EBITDA from our Merchant Solutions segment was $81.2 million for the nine months ended September 30, 2025, compared to $82.3 million for the nine months ended September 30, 2024.

The decrease of $1.1 million, or 1.3% was primarily driven by an increase in revenue, and recovery of certain chargeback losses, offset by mix related margin compression and increase in other operating expenses.

(in thousands) Three Months Ended September 30, Nine Months Ended September 30,

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Key Indicators:

B2B issuing dollar volume $ 220,227 $ 249,454 $ (29,227) $ 457,517 $ 477,266 $ (19,749)

B2B issuing transaction count 223 242 (19) 434 482 (48)

Revenue from our B2B Payments segment was $25.0 million for the three months ended June 30, 2025, compared to $21.9 million for the three months ended June 30, 2024.

The increase of $3.2 million, or 14.4% was primarily driven by increases in total card volume processed and certain incentive income offset by decreases in issuing dollar volume and issuing transaction count.

Revenue from our B2B Payments segment was $49.0 million for the six months ended June 30, 2025, compared to $43.2 million for the six months ended June 30, 2024.

The increase of $5.7 million, or 13.2% was primarily driven by increases in total card volume processed and certain incentive income offset by decreases in issuing dollar volume and issuing transaction count.

Buyer funded card processing dollar value $ 789,700 $ 700,510 $ 89,190 $ 2,295,100 $ 2,082,590 $ 212,510

Supplier funded issuing dollar value $ 230,882 $ 255,323 $ (24,441) $ 688,399 $ 732,589 $ (44,190)

ACH transaction count 14,451 11,042 3,409 41,085 29,621 11,464

Revenue from our Payables segment was $25.2 million for the three months ended September 30, 2025, compared to $22.1 million for the three months ended September 30, 2024.

The increase of $3.0 million, or 13.6% was primarily driven by increased buyer funded card processing dollar value, ACH transaction count and interest from higher account balances offset by the decrease in supplier funded issuing dollar value.

Revenue from our Payables segment was $74.1 million for the nine months ended September 30, 2025, compared to $65.4 million for the nine months ended September 30, 2024.

The increase of $8.7 million, or 13.4% was primarily driven by

increases buyer funded card processing dollar value, certain incentive income, ACH transaction and interest from higher account balances offset by the decrease in supplier funded issuing dollar value.

Adjusted EBITDA

Adjusted EBITDA from our B2B Payments segment of $3.8 million for the three months ended June 30, 2025, compared to $1.5 million for the three months ended June 30, 2024.The increase in Adjusted EBITDA of $2.2 million or 146.4% was contributed by $0.9 million in the supplier funded business (driven by incentive income) and $1.3 million in the buyer funded business (driven by increased processing volume).

Adjusted EBITDA from our B2B Payments segment of $7.3 million for the six months ended June 30, 2025, compared to $3.3 million for the six months ended June 30, 2024.The increase in Adjusted EBITDA of $4.0 million or 122.4% was contributed by $1.4 million in the supplier funded business (driven by incentive income) and $2.6 million in the buyer funded business (driven by increased processing volume).

Enterprise Payments

(in thousands) Three Months Ended June 30, Six Months Ended June 30,

Adjusted EBITDA from our Payables segment of $3.5 million for the three months ended September 30, 2025, compared to $1.9 million for the three months ended September 30, 2024.The increase in Adjusted EBITDA of $1.5 million or 78.7% was contributed by $1.1 million in the supplier funded business (driven by increase in revenues) and $0.4 million in the buyer funded business (driven by increased processing volume).

Adjusted EBITDA from our Payables segment of $10.7 million for the nine months ended September 30, 2025, compared to $5.2 million for the nine months ended September 30, 2024.The increase in Adjusted EBITDA of $5.5 million or 106.2% was contributed by $2.4 million in the supplier funded business (driven by increase in revenues) and $3.1 million in the buyer funded business (driven by increased processing volume).

Treasury Solutions

(in thousands) Three Months Ended September 30, Nine Months Ended September 30,

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Average CFTPay billed clients 1,054,238 832,351 221,887 995,660 766,370 229,290

Average CFTPay new enrollments 57,818 55,416 2,402 56,882 54,484 2,398

Revenue from our Enterprise Payments segment was $52.7 million for the three months ended June 30, 2025, compared to $43.7 million for the three months ended June 30, 2024.

The increase of $9.0 million, or 20.6%, was primarily driven by an increase in billed clients and new customer enrollments, the addition of new integrated partners, acquisition of the Letus business, and growth in interest income due to higher balances of permissible investments offset by reduction in interest rates.

Revenue from our Enterprise Payments segment was $102.7 million for the six months ended June 30, 2025, compared to $84.7 million for the six months ended June 30, 2024.

The increase of $18.1 million, or 21.4%, was primarily driven by an increase in billed clients and new customer enrollments, the addition of new integrated partners, acquisition of the Letus business, and growth in interest income due to higher balances of permissible investments offset by reduction in interest rates.

Average CFTPay monthly enrollments 61,185 62,875 (1,690) 58,316 57,281 1,035

Average total account balances (1)

$ 1,248,432 $ 900,690 $ 347,742 $ 1,145,164 $ 847,486 $ 297,678

(1) This represents the average total account balance during the three and nine months ended on September 30, 2025, in the Treasury solutions segment, and excludes the deposits and balances maintained in the Merchant Solution and Payables segment.

The total account and deposit balances as of September 30, 2025, were $1.6 billion.

Revenue from our Treasury Solutions segment was $55.7 million for the three months ended September 30, 2025, compared to $47.1 million for the three months ended September 30, 2024.

The increase of $8.6 million, or 18.2%, was primarily driven by an increase in average billed clients and average total account balances, acquisition of the Letus business, and growth in interest income due to higher balances of permissible investments offset by reduction in interest rates and lower average monthly enrollments.

Revenue from our Treasury Solutions segment was $158.4 million for the nine months ended September 30, 2025, compared to $131.8 million for the nine months ended September 30, 2024.

The increase of $26.7 million, or 20.2%, was primarily driven by an increase in average billed clients, average monthly enrollments and average total account balances, acquisition of the Letus business, and growth in interest income due to higher balances of permissible investments offset by reduction in interest rates.

Adjusted EBITDA

Adjusted EBITDA from our Enterprise Payments segment was $45.6 million for the three months ended June 30, 2025, compared to $37.2 million for the three months ended June 30, 2024.

Adjusted EBITDA from our Treasury Solutions segment was $46.7 million for the three months ended September 30, 2025, compared to $40.9 million for the three months ended September 30, 2024.

The increase of $5.7 million, or 14.0%, was primarily driven by increases in revenues.

Adjusted EBITDA from our Enterprise Payments segment was $88.0 million for the six months ended June 30, 2025, compared to $72.0 million for the six months ended June 30, 2024.

Adjusted EBITDA from our Treasury Solutions segment was $134.7 million for the nine months ended September 30, 2025, compared to $112.9 million for the nine months ended September 30, 2024.

The increase of $21.8 million, or 19.3%, was primarily driven by increases in revenues.

Three Months Ended June 30, 2025

SMB Payments B2B Payments Enterprise Payments Corporate Total Consolidated

Three Months Ended September 30, 2025

Merchant Solutions Payables

Solutions Treasury Solutions Corporate Total Consolidated

Reconciliation of Adjusted EBITDA to GAAP Measure:

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Depreciation and amortization (7,607) (1,275) (4,924) (1,316) (15,122)

Debt modification and extinguishment expenses — — — (12,476) (12,476)

Selling, general and administrative (non-recurring) — — — (1,491) (1,491)

Non-cash stock based compensation — (133) (33) (2,161) (2,327)

Bargain purchase gain (non-recurring) — — — 3,507 3,507

Income (loss) before taxes $ 19,763 $ 1,686 $ 41,576 $ (55,638) $ 7,387

Income tax expense (4,423)

Income tax benefit 20,201

Net income $ 27,588

Three Months Ended June 30, 2024

SMB Payments B2B Payments Enterprise Payments Corporate Total Consolidated

Three Months Ended September 30, 2024

Merchant Solutions Payables

Solutions Treasury Solutions Corporate Total Consolidated

Reconciliation of Adjusted EBITDA to GAAP Measure:

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Net income $ 10,608

Six Months Ended June 30, 2025

SMB Payments B2B Payments Enterprise Payments Corporate Total Consolidated

Nine Months Ended September 30, 2025

Merchant Solutions Payables

Solutions Treasury Solutions Corporate Total Consolidated

Reconciliation of Adjusted EBITDA to GAAP Measure:

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Non-cash stock based compensation 1 (301) (98) (6,721) (7,119)

Bargain purchase gain (non-recurring) — — — 3,507 3,507

Income (loss) before taxes $ 59,960 $ 4,484 $ 119,687 $ (150,924) $ 33,207

Income tax expense (6,673)

Income tax benefit 13,528

Net income $ 46,735

Six Months Ended June 30, 2024

SMB Payments B2B Payments Enterprise Payments Corporate Total Consolidated

Nine Months Ended September 30, 2024

Merchant Solutions Payables

Solutions Treasury Solutions Corporate Total Consolidated

Reconciliation of Adjusted EBITDA to GAAP Measure:

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Our critical accounting policies and estimates are discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no material changes to these critical accounting policies and estimates as of June 30, 2025.

There have been no material changes to these critical accounting policies and estimates as of September 30, 2025.

Liquidity and Capital Resources

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Our principal uses of cash are to fund business operations and administrative costs, and to service our debt.

Our working capital, defined as current assets less current liabilities, was $76.7 million at June 30, 2025 and $23.6 million at June 30, 2024.

As of June 30, 2025, we had cash totaling $50.6 million compared to $34.6 million at June 30, 2024.

These cash balances do not include restricted cash of $14.2 million and $12.6 million at June 30, 2025 and June 30, 2024, respectively, which reflects cash accounts holding customer settlement funds and cash reserves for potential losses.

The current portion of long-term debt included in current liabilities was $4.3 million and $8.4 million at June 30, 2025 and June 30, 2024, respectively.

At June 30, 2025, we had availability of approximately $70.0 million under our revolving credit facility.

The following table and discussion reflect our changes in cash flows for the comparative six month periods.

Six Months Ended June 30,

Our working capital, defined as current assets less current liabilities, was $82.0 million at September 30, 2025 and $37.7 million at September 30, 2024.

As of September 30, 2025, we had cash totaling $57.0 million compared to $41.1 million at September 30, 2024.

These cash balances do not include restricted cash of $13.0 million and $13.4 million at September 30, 2025 and September 30, 2024, respectively, which reflects cash accounts holding customer settlement funds and cash reserves for potential losses.

The current portion of long-term debt included in current liabilities was $10.0 million and $8.4 million at September 30, 2025 and September 30, 2024, respectively.

At September 30, 2025, we had availability of approximately $100.0 million under our revolving credit facility.

The following table and discussion reflect our changes in cash flows for the comparative nine month periods.

Nine Months Ended September 30,

(in thousands) 2025 2024

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Cash Provided by Operating Activities

Net cash provided by operating activities was $27.1 million for the six months ended June 30, 2025 compared to $42.0 million for the six months ended June 30, 2024.

The $14.9 million decrease was primarily driven by a decrease in interest expense and changes in the operating assets and liabilities.

Net cash provided by operating activities was $63.2 million for the nine months ended September 30, 2025 compared to $61.9 million for the nine months ended September 30, 2024.

The $1.3 million increase was driven by an increase in net income offset by non-cash adjustments and changes in the operating assets and liabilities.

Cash Used in Investing Activities

Net cash used in investing activities was $21.1 million and $20.6 million for the six months ended June 30, 2025 and 2024, respectively.

For the six months ended June 30, 2025, investing activities included additions to property, equipment and software of $13.0 million, $1.4 million related to net funding of new loans to ISOs, $4.5 million related to the acquisition of a business and $2.3 million investments in unconsolidated entities.

For the six months ended June 30, 2024, net cash used in investing activities included additions to property, equipment and software of $11.7 million, $1.4 million related funding of new loans to ISOs and $7.5 million related to the acquisition of intangible assets and an investment in an unconsolidated entity.

Net cash used in investing activities was $151.9 million and $24.7 million for the nine months ended September 30, 2025 and 2024, respectively.

For the nine months ended September 30, 2025, investing activities included acquisitions of businesses, net of cash acquired of $77.4 million, additions to property, equipment and software of $19.0 million, $5.1 million related to net funding of new loans to ISOs, and $50.5 million in short-term investments of MTL funds and investments in unconsolidated entities.

For the nine months ended September 30, 2024, net cash used in investing activities included additions to property, equipment and software of $17.0 million, $0.2 million related funding of new loans to ISOs and $7.5 million related to the acquisition of intangible assets and an investment in an unconsolidated entity.

Cash Provided by Financing Activities

Net cash provided by financing activities was $178.1 million for the six months ended June 30, 2025, compared to $18.1 million of cash used in financing activities for the six months ended June 30, 2024.

The net cash provided by financing activities for the six months ended June 30, 2025 included changes in the net obligations for funds held on the behalf of customers of $190.9 million and proceeds from the exercise of stock options of $0.3 million offset by $10.0 million of cash used for the unscheduled repayment of the term loan principal, $2.3 million of cash used to purchase shares withheld for taxes and $0.8 million for payments of deferred consideration.

The net cash provided by financing activities for the six months ended June 30, 2024 included changes in the net obligations for funds held on the behalf of customers of $40.9 million, and borrowings under the 2024 Credit Agreement net of issue discounts of $830.2 million, offset by $661.9 million of cash used for the repayment of the principal of the 2021 Credit Agreement and debt issuance and modification costs related to the refinancing, $167.8 million related to the redemption of senior preferred stock and accumulated unpaid dividend, $2.1 million for the redemption of redeemable NCI in subsidiary, $16.4 million of cash dividends paid to redeemable senior preferred stockholders, $0.6 million of cash used for shares withheld for taxes and $4.2 million of payments of contingent/deferred consideration.

Net cash provided by financing activities was $288.6 million for the nine months ended September 30, 2025, compared to $84.7 million of cash used in financing activities for the nine months ended September 30, 2024.

The net cash provided by financing activities for the nine months ended September 30, 2025 included borrowings under the Second Amendment to the 2024 Credit Agreement and the Residual Finance Credit Facility of $1.0 billion, proceeds from the exercise of stock options of $0.4 million and changes in the net obligations for funds held on the behalf of customers of $247.5 million, offset by $945.5 million of cash used for the repayment of the term loan facility due to refinancing, $4.7 million in debt issuance and modification costs paid for the Second Amendment to the 2024 Credit Agreement, $3.0 million of cash used to purchase shares withheld for taxes, $19.8 million for the accelerated deferred consideration payments, and $6.0 million used to repurchase NCI in one of the subsidiaries.

The net cash provided by financing activities for the nine months ended September 30, 2024 included changes in the net obligations for funds held on the behalf of customers of $116.1 million and borrowings under the 2024 Credit Agreement net of issue discounts of $830.2 million, offset by $661.9 million of cash used for the repayment of the principal of the 2021 Credit Agreement and debt issuance and modification costs related to the refinancing, $167.8 million related to the redemption of senior preferred stock and accumulated unpaid dividend, $2.1 million for the redemption of redeemable NCI in subsidiary, $22.1 million of cash dividends paid to redeemable senior preferred stockholders, $1.2 million of cash used for shares withheld for taxes and $5.0 million of payments of contingent consideration.

Long-term Debt

As of June 30, 2025, we had outstanding debt obligations, including the current portion and net of unamortized debt discount of $935.5 million, compared to $945.5 million at December 31, 2024, resulting in a decrease of $10.0 million .

The decrease is related to an unscheduled principal payment.

The debt balance at June 30, 2025 consisted of $935.5 million outstanding under the term facility offset by $14.3 million of unamortized debt discounts and issuance costs.

Minimum amortization of the term facility are equal quarterly installments in aggregate annual amounts equal to 1.0% of the original principal, with the balance paid upon maturity.

The term facility matures on May 16, 2031 and the revolving credit facility matures on May 16, 2029.

As of September 30, 2025, we had outstanding debt obligations, including the current portion and unamortized debt discount of $1,023.9 billion, compared to $945.5 million at December 31, 2024, resulting in an increase of $78.4 million.

The increase is due to the Second Amendment to the 2024 Credit Agreement and the addition of the Residual Finance Credit Facility offset by an unscheduled principal payment.

The debt balance at September 30, 2025 consisted of $1.0 billion outstanding under the 2024 Credit Agreement's (as amended) term facility and $23.9 million under the Residual Finance Credit Facility's term facility offset by $16.4 million of unamortized debt discounts and issuance costs.

Minimum amortization of the 2024 Credit Agreement's term facility are equal quarterly installments in aggregate annual amounts equal to 1.0% of the original principal, with the balance paid upon maturity.

The term facility matures on July 31, 2032 and the revolving credit facility matures on July 31, 2030.

The 2024 Credit Agreement contains representations and warranties, financial and collateral requirements, mandatory payment events, events of default and affirmative and negative covenants, including without limitation, covenants that restrict among other things, the ability to create liens, pay dividends or distribute assets from the loan parties to the Company, merge or consolidate, dispose of assets, incur additional indebtedness, make certain investments or acquisitions, enter into certain transactions (including with affiliates) and to enter into certain leases.

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If applicable, the maximum permitted Total Net Leverage Ratio is:

1) 6.90:1.00 at each fiscal quarter ended September 30, 2024 through December 31, 2025;

2) 6.40:1.00 at each fiscal quarter ended March 31, 2026 and each fiscal quarter thereafter.

As of June 30, 2025, the Company was in compliance with the covenants in the 2024 Credit Agreement.

1) 6.90:1.00 at each fiscal quarter ended September 30, 2025 through March 31, 2026;

2) 6.40:1.00 at each fiscal quarter ended June 30, 2026 and each fiscal quarter thereafter.

As of September 30, 2025, the Company was in compliance with the covenants in the 2024 Credit Agreement.

The Residual Finance Credit Facility contains customary representations and warranties, financial and collateral requirements, mandatory payment events, events of default and affirmative and negative covenants, including without limitation, covenants that restrict among other things, the ability to create liens, pay dividends or distribute assets from the Loan Parties to the Company, merge or consolidate, dispose of assets, incur additional indebtedness, make certain investments or acquisitions, and enter into certain transactions (including with affiliates).

The Residual Finance Credit Facility requires the Company to comply with certain restrictions including minimum liquidity of $2.0 million, minimum tangible net worth of $5.0 million, maximum default ratio of 2.5%, maximum delinquency ratio of 5.0%, and a minimum excess spread ratio of 1.00 to 1.00.

As of September 30, 2025, the Company was in compliance with the restrictions in the agreement.

Effect of New Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis