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Item 7. Management’s Discussion and Analysis

2026-03-10 compared with 2025-03-06 · 101 added, 76 removed, 167 unchanged (51% of the section changed)

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Certain amounts in this section may not add mathematically due to rounding.

For a description and additional information about our three reportable segments, see Note 19.

During 2025 the Company renamed its reportable segments, for a description and additional information see Note 18.

Segment Information , contained in " Item 8 - Financial Statements and Supplementary Data " of this Annual Report on Form 10-K.

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This section includes certain components of our results of operations for the years ended December 31, 2025 (or "2025"), and December 31, 2024 (or "2024").

We have derived this data, except key indicators including merchant bankcard processing dollar values and transaction count (SMB Payments), issuing dollar volume and transaction count (B2B Payments), and average billed clients and new enrollments (Enterprise Payments), from our audited Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

We have derived this data, except key indicators including total card processing dollar value and transaction count (Merchant Solutions), buyer funded card processing dollar value, supplier funded issuing dollar value, and transaction count (Payables), and average billed clients, average monthly enrollments, and average total account balances (Treasury Solutions), from our audited Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

For the year ended December 31, 2025, our consolidated revenue of $953.0 million increased by $73.3 million, or 8.3%, from $879.7 million for the year ended December 31, 2024.

This overall increase was driven by increases in merchant bankcard processing dollar value and transaction count in our SMB Payments segment, an increase in new enrollments and higher interest income on permissible investments in our Enterprise Payments segment and an increase in revenue from CPX due to increase in volumes and Plastiq business acquired during the third quarter of 2023 in B2B Payments segment.

This overall increase was driven by increases in merchant bankcard processing dollar value, transaction count and acquisitions in our Merchant Solutions segment, an increase in new enrollments and higher interest income on permissible investments in our Treasury Solutions segment and an increase in revenue due to increase in volumes in Payables segment.

Revenues by type for 2025 and 2024 were as follows:

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For the year ended December 31, 2025, our merchant card fees revenue of $710.9 million increased by $40.5 million, or 6.0%, from $670.4 million for the year ended December 31, 2024.

This increase was primarily driven by revenue from the Plastiq business that was acquired during the third quarter of 2023 and increased bankcard processing dollar values and transaction counts in SMB payments.

This increase was primarily driven by revenue from acquisitions in 2025 and increased bankcard processing dollar values and transaction counts in the Merchant Solutions segment.

Money Transmission Services

Money transmission services revenue of $130.1 million for the year ended December 31, 2024 increased by $32.0 million or 32.6%, from $98.1 million for the year ended December 31, 2023 and is primarily driven by an increase in customer enrollments.

Money transmission services revenue of $159.2 million for the year ended December 31, 2025 increased by $29.0 million or 22.3%, from $130.1 million for the year ended December 31, 2024 and is primarily driven by increased customer enrollments, which resulted in a higher number of billed clients.

Outsourced Services and Other Services

Outsourced services and other services revenue of $70.7 million for the year ended December 31, 2025 increased by $3.7 million, or 5.5%, from $67.0 million for the year ended December 31, 2024.

This increase was primarily due to growth in interest income on permissible investments due to higher interest rates and deposit balances and additional revenues generated by our B2B Payments segment.

Equipment revenue of $12.2 million for the year ended December 31, 2024, decreased by $0.5 million, or 4.1%, from $12.7 million for the year ended December 31, 2023.

The decrease was primarily due to a decrease in point-of-sale equipment sales volume.

This increase was primarily due to growth in interest income on permissible investments due to higher deposit balances and increased volume in ACH.com business partially offset by a decrease in interest rates and decreased issuing dollar volumes in CPX business.

Equipment revenue of $12.2 million for the year ended December 31, 2025, remained consistent in comparison to $12.2 million for the year ended December 31, 2024, as equipment revenue is directly driven by merchant demand for certain equipment.

No trends affecting equipment revenue were identified.

Operating Expenses

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For the year ended December 31, 2025, costs of services (excluding depreciation and amortization) as a percentage of total revenues decreased to 60.7% as compared to 62.7% for the year ended December 31, 2024.

This decrease was primarily due to the increase in interest income on permissible investments and money transmission revenues which do not have significant cost of services offset by certain credit losses, obsolete inventory write offs and, mix related margin compression.

This decrease was primarily due to increased interest income on permissible investments and money transmission revenues, which do not have significant costs of services, as well as lower credit losses, reduced inventory write-offs, and acquisitions, partially offset by mix-related margin compression.

Salary and employee benefits

Salary and employee benefits expense of $89.2 million for the year ended December 31, 2024 increased by $9.2 million, or 11.6%, from $80.0 million for the year ended December 31, 2023, primarily due to higher wages, and increased headcount from acquisitions to support overall growth of the Company.

Salary and employee benefits expense of $107.8 million for the year ended December 31, 2025 increased by $18.6 million, or 20.8%, from $89.2 million for the year ended December 31, 2024, primarily due to merit increases, increased stock based compensation and increased headcount from acquisitions and to support overall growth of the Company.

The Company's employee headcount increased to 1,200 in 2025 from 1,019 in 2024.

Depreciation and amortization expense

Depreciation and amortization expense of $58.0 million for the year ended December 31, 2024 decreased by $10.4 million, or 15.1%, from $68.4 million for the year ended December 31, 2023, primarily due to full amortization of certain intangible assets partially offset by the depreciation of new assets placed in service.

Depreciation and amortization expense of $63.2 million for the year ended December 31, 2025 increased by $5.1 million, or 8.9%, from $58.0 million for the year ended December 31, 2024, primarily due to the amortization of intangibles acquired during the year, accelerated depreciation on certain assets and depreciation of new assets placed in service partially offset by the full depreciation/amortization of certain assets.

Selling, general and administrative

Selling, general and administrative expenses of $47.4 million for the year ended December 31, 2024 increased by $2.0 million, or 4.4%, from $45.4 million for the year ended December 31, 2023, primarily due to increase of $8.5 million in marketing, software, management fee, bad debt write offs and other operating expenses offset by decrease in restructuring expenses ($3.5 million), legal and professional expenses ($1.5 million) primarily related to acquisitions, and gain from changes in fair value of contingent consideration ($1.5 million).

Selling, general and administrative expenses of $62.5 million for the year ended December 31, 2025 increased by $15.1 million, or 31.8%, from $47.4 million for the year ended December 31, 2024, primarily due to increases in marketing expenses of $1.2 million, accounting expenses of $2.4 million (primarily for SOX compliance and audits), software expenses of $2.9 million, cloud hosting expenses of $2.5 million, travel expenses of $1.4 million, and other variances which are not individually material.

Other Expenses, net

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Interest expense

Interest expense of $88.9 million for the year ended December 31, 2024 increased by $12.8 million, or 16.9%, from $76.1 million for the year ended December 31, 2023, due to higher debt balances to fund the redemption of the redeemable senior preferred stock partially offset by a decrease in interest rates during the fourth quarter of 2024.

Interest expense of $90.7 million for the year ended December 31, 2025, increased by $1.7 million, or 1.9%, from $88.9 million for the year ended December 31, 2024, due to higher debt balances to fund acquisitions offset by decreases in interest rates due to debt refinancings and federal rate cuts during 2025.

Debt extinguishment and modification costs

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Debt Obligations ).

Other income, net of $3.2 million for the year ended December 31, 2024 increased by $1.4 million, or 83.0%, from $1.7 million for the year ended December 31, 2023, due to increased interest income from the Company's operating accounts.

Other income, net

Other income, net of $8.2 million for the year ended December 31, 2025 increased by $5.0 million, or 158.2%, from $3.2 million for the year ended December 31, 2024, due to bargain purchase gain of $4.0 million from Sila acquisition (see Note 2.

Acquisitions ) and increased interest income from the Company's operating accounts.

Income tax expense

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Income before income taxes $ 46,278 $ 37,281 $ 8,997

Income tax expense $ 13,266 $ 8,463 $ 4,803

Income tax (benefit) expense $ (9,402) $ 13,266 $ (22,668)

Effective tax rate (20.3) % 35.6 %

The decrease in the effective tax rate from 2023 to 2024 is primarily due to a reduction in the amount of additional valuation allowance recorded against certain business interest carryover deferred tax assets.

The decrease in the effective tax rate from 2024 to 2025 is primarily due to a reduction in the valuation allowance recorded against certain business interest carryover deferred tax assets resulting from the enactment of the One Big Beautiful Bill Act (“OBBBA”) during the year ended December 31, 2025.

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.

The consolidated effective income tax rate for 2025 may not be indicative of our effective tax rate for future periods.

Earnings Attributable to Common Shareholders

Earnings Attributable to Common Stockholders

(in thousands) Years Ended December 31, 2025 vs 2024

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NCI preferred unit redemptions, net of deferred tax benefit — (639) 639

Net loss attributable to common shareholders $ (23,960) $ (49,055) $ 25,095

Dividends, accretion and related excise tax attributable to redeemable senior preferred stockholders consists of $27.7 million of dividends, $16.9 million of accretion and $2.7 million of excise tax related to redemption of redeemable senior preferred stock and redeemable NCI for the year ended December 31, 2024.

The balance remained consistent as compared to 2023 due to redemption of redeemable senior preferred stock during 2024.

Net income (loss) attributable to common stockholders $ 55,681 $ (23,960) $ 79,641

The increase in net income (loss) attributable to common stockholders is attributable to an increase in operating income, an income tax benefit due to release of valuation allowance on deferred tax assets due to changes in the tax laws and the discontinuance of dividend obligations.

Segment Results

The Company's chief operating decision makers ("CODM") are our CEO and CFO.

The CODM uses adjusted earnings before interest expense, income tax and depreciation and amortization expenses ("Adjusted EBITDA") as measures of segment profit and loss to allocate resources.

The CODM uses adjusted earnings before interest expense, income tax and depreciation and amortization expenses ("Adjusted EBITDA") as the measure of segment profit and loss to allocate resources.

Adjusted EBITDA represents, EBITDA, adjusted for certain non-cash costs, such as stock-based compensation and the write-off of the carrying value of investments or other assets, as well as debt extinguishment and modification expenses and other expenses and income items considered non-recurring, such as acquisition integration expenses, certain professional fees, and litigation settlements.

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This non-GAAP financial measure helps to understand 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.

Merchant Solutions

(in thousands) Year Ended December 31,

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Key Indicators:

Merchant bankcard processing dollar value $ 61,703,021 $ 59,054,039 $ 2,648,982

Merchant bankcard transaction count 755,989 696,203 59,786

Total card processing dollar value $ 72,373,800 $ 71,566,091 $ 807,709

Revenue from our SMB Payments segment was $613.5 million for the year ended December 31, 2024, compared to $583.3 million for the year ended December 31, 2023.

The increase of $30.3 million, or 5.2%, was primarily driven by merchant card fee rate and bankcard processing dollar value and transaction count increases.

The Company's merchant card fee revenue from the SMB Payments segment ($595.0 million for 2024 and $564.3 million for 2023) as a percentage of merchant bankcard

processing dollar value during 2024 increased to 0.96% from 0.95% during 2023.

The increase was primarily driven by changes in the merchant mix.

Total card transaction count 888,688 857,548 31,140

Revenue from our Merchant Solutions segment was $642.1 million for the year ended December 31, 2025, compared to $613.5 million for the year ended December 31, 2024.

The increase of $28.5 million, or 4.6%, was primarily driven by total card processing dollar value and total card transaction count partially offset by a decrease in merchant card fee rate.

The Company's merchant card fee revenue from the Merchant Solutions segment ($625.2 million for 2025 and $595.1 million for 2024) as a percentage of total card processing dollar value during 2025 decreased to 0.85% from 0.83% during 2024.

The decrease was primarily driven by changes in the merchant mix.

Adjusted EBITDA

Adjusted EBITDA from our SMB Payments segment was $108.9 million for the year ended December 31, 2024, compared to $109.5 million for the year ended December 31, 2024.

The decrease of $0.6 million or 0.6% was primarily due to certain credit losses, mix-related margin compression and increase in salary expenses partially offset by increased revenue and gain from changes in the fair value of contingent consideration from a past acquisition.

Adjusted EBITDA from our Merchant Solutions segment was $111.8 million for the year ended December 31, 2025, compared to $108.9 million for the year ended December 31, 2024.

The increase of $2.9 million or 2.6% was primarily due to acquisitions and decreased credit losses offset by mix-related margin compression as well as increases in salary expenses and other operating expenses.

(in thousands) Year Ended December 31,

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Key Indicators:

B2B issuing dollar volume $ 977,278 $ 851,948 $ 125,330

B2B issuing transaction 974 1,087 (113)

Revenue from our B2B Payments segment was $89.1 million for the year ended December 31, 2024, compared to $41.2 million for the year ended December 31, 2023.

The increase of $47.9 million, or 116.5%, was primarily driven by an increase of $44.4 million in the Plastiq business which was acquired during the third quarter of 2023 and an increase of $4.1 million in the CPX business due to increased interest revenue and volumes.

This increase was offset by a decrease of $0.6 million driven by the wind down of certain customer programs in the managed services business during the fourth quarter of 2023.

Buyer funded card processing dollar value $ 3,090,310 $ 2,816,270 $ 274,040

Supplier funded issuing dollar value $ 919,860 $ 977,278 $ (57,418)

ACH transaction count 19,286 17,182 2,104

Revenue from our Payables segment was $100.9 million for the year ended December 31, 2025, compared to $89.1 million for the year ended December 31, 2024.

The increase of $11.8 million, or 13.2%, was primarily driven by an increase of $7.7 million in the Plastiq business due to higher buyer funded card processing volume and an increase of $4.1 million in the CPX business due to increased interest revenue and ACH transaction count.

Adjusted EBITDA

Adjusted EBITDA from our B2B Payments segment was $7.6 million for the year December 31, 2024, compared to $2.2 million for the year ended December 31, 2023.

The increase of $5.4 million was primarily driven by increase in revenues offset by increase in operating expenses.

Enterprise Payments

Adjusted EBITDA from our Payables segment was $14.6 million for the year December 31, 2025, compared to $7.6 million for the year ended December 31, 2024.

The increase of $7.0 million was primarily driven by increase in revenues and a decrease in operating expenses.

Treasury Solutions

(in thousands) Year Ended December 31,

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Key Indicators:

Average billed clients $ 797,567 $ 556,526 $ 241,041

Average new enrollments 56,072 51,059 5,013

Revenue from our Enterprise Payments segment was $180.4 million for the year ended December 31, 2024, compared to $132.2 million for the year ended December 31, 2023.

The increase of $48.3 million, or 36.6%, was primarily driven by an increase in customer enrollments, additional revenues generated by our Passport platform, and growth in interest income due to higher deposit balances and higher returns on the permissible investments related to our money transmission licenses.

Average CFTPay billed clients 1,022,225 797,567 224,658

Average CFTPay monthly enrollments 57,123 56,072 1,051

Average total account balances (1)

$ 1,193,011 $ 878,257 $ 314,754

(1) This represents the average total account balance 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 December 31, 2025 and 2024, were $1.7 billion and $1.2 billion respectively.

Revenue from our Treasury Solutions segment was $215.8 million for the year ended December 31, 2025, compared to $180.4 million for the year ended December 31, 2024.

The increase of $35.3 million, or 19.6%, was primarily driven by an increase in customer enrollments in our CFTPay business, additional revenues generated by our Passport platform, acquisitions of Sila and Letus businesses, and growth in interest income due to higher deposit balances and higher returns on the permissible investments related to our money transmission licenses.

Adjusted EBITDA

Adjusted EBITDA from our Enterprise Payments segment was $154.9 million for the year ended December 31, 2024, compared to $110.9 million for the year ended December 31, 2023.

The increase of $44.0 million or 39.8% was primarily due to increase in revenue offset by increased salaries.

Adjusted EBITDA from our Treasury Solutions segment was $182.2 million for the year ended December 31, 2025, compared to $154.9 million for the year ended December 31, 2024.

The increase of $27.3 million or 17.6% was primarily due to increased revenue partially offset by an increase in salary expenses and other operating expenses.

Year Ended December 31, 2025

SMB Payments B2B Payments Enterprise Payments Corporate Total Consolidated

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)

(1) (336) (130) (7,839) (8,306)

Salary and employee benefits (non recurring) (2)

— — — (2,501) (2,501)

Bargain purchase gain (non-recurring) — — — 3,989 3,989

Income (loss) before taxes $ 79,366 $ 7,016 $ 161,943 $ (202,046) $ — $ 46,279

Income tax expense (13,266)

Income tax benefit 9,402

Net income $ 55,681

(1) excludes stock based compensation settled in cash of $2.5 million subsequent to the year ended December 31, 2025

(2) represents cash settled stock based compensation which is non-recurring in nature

Year Ended December 31, 2024

SMB Payments B2B Payments Enterprise Payments Corporate Total Consolidated

Merchant Solutions Payables Solutions Treasury Solutions Corporate Total Consolidated

Reconciliation of Adjusted EBITDA to GAAP Measure:

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Depreciation and amortization (30,865) (5,258) (16,928) (4,990) (58,041)

Debt modification and extinguishment expenses — — — (10,369) (10,369)

Selling, general and administrative (non-recurring) — — — (3,510) (3,510)

Non-cash stock based compensation (16) (220) (131) (5,751) (6,118)

Non-cash other losses — — — (84) (84)

Income (loss) before taxes $ 78,031 $ (2,213) $ 137,877 $ (176,414) $ 37,281

Income tax expense (13,266)

Net loss $ (1,311)

Net income $ 24,015

Liquidity and Capital Resources

Liquidity and capital resource management is a process focused on providing the funding we need to meet our short-term and long-term cash and working capital needs.

We have used our funding sources to build our customer base, for technology solutions and to make acquisitions with the expectation that such investments will generate cash flows sufficient to cover our working capital needs and other anticipated needs, including for our acquisition strategy.

We anticipate that cash on hand, funds generated from operations and available borrowings under our revolving credit agreement are sufficient to meet our working

capital requirements for at least the next twelve months.

This is based upon management's estimates and assumptions regarding effects of micro and macro factors impacting the economic environment in which the Company operates on our financial results.

We have used our funding sources to build our customer base, technology solutions and to make acquisitions with the expectation that such investments will generate cash flows sufficient to cover our working capital needs and other anticipated needs, including for our acquisition strategy.

We anticipate that cash on hand, funds generated from operations and available borrowings under our revolving credit agreement are sufficient to meet our working capital requirements for at least the next twelve months.

This is based upon management's estimates and assumptions regarding

effects of micro and macro factors impacting the economic environment in which the Company operates on our financial results.

Actual future results could differ materially, as the magnitude, duration and effects of changes in economic, political and market conditions are difficult to predict, and ultimately could negatively impact our liquidity and capital resources.

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The current portion of long-term debt included in current liabilities was $0.0 million and $9.5 million at December 31, 2025 and 2024, respectively.

At December 31, 2024, we had availability of approximately $70.0 million under our revolving credit arrangement.

At December 31, 2025, we had availability of approximately $100.0 million under our revolving credit arrangement and $14.6 million under our Residual Finance credit facility's delayed draw term facility.

The following tables and narrative reflect our changes in cash flows for the comparative annual periods.

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Net cash used in investing activities was $174.0 million compared to cash used investing activities of $35.5 million for the years ended December 31, 2025 and 2024, respectively.

The Company had no business acquisitions for the year ended December 31, 2024, compared to net cash used of $28.2 million in 2023 to acquire Plastiq business.

Additions to property, equipment and software was $21.7 million for the year ended December 31, 2024 compared to $21.3 million in 2023 and acquisitions of intangible assets was $10.5 million for the year ended December 31, 2024, compared to $6.6 million in 2023.

Net amount of $3.4 million was advanced for loans to ISOs for the year ended December 31, 2024, compared to $0.4 million related to payments received against loans to ISOs in 2023.

The Company had three business acquisitions for the year ended December 31, 2025, which used net cash of $39.3 million compared to no business acquisitions for the year ended December 31, 2024.

Additions to property, equipment and software was $24.9 million for the year ended December 31, 2025 compared to $21.7 million in December 31, 2024.

Net amount of $11.1 million was advanced for loans to ISOs and ISVs for the year ended December 31, 2025, compared to $3.4 million in 2024.

The Company acquired intangible assets, unconsolidated equity investments and other short term investment of $98.7 million for the year ended December 31, 2025 compared to acquisition of intangible assets and an unconsolidated equity investment $10.5 million in December 31, 2024.

Cash Provided by Financing Activities

Net cash provided by financing activities was $426.2 million for the year ended December 31, 2025, compared to $147.6 million for the year ended December 31, 2024.

The net cash provided by for the year ended December 31, 2024 included changes in the net obligations for funds held on the behalf of customers of $179.6 million, borrowings under the 2024 Credit Agreement (including the First Amendment) net of issue discounts of $945.1 million, and proceeds for the exercise of stock options of $1.8 million.

The net cash provided by for the year ended December 31, 2025 included changes in the net obligations for funds held on the behalf of customers of $355.1 million, borrowings under the Second and Third Amendment to the 2024 Credit Agreement and the Residual Finance credit facility net of issues discount, principal repayments and payments of debt issuance and modification costs of $100.8 million, and proceeds for the exercise of stock options of $0.5 million.

This was further offset by redemption of non-controlling interest in subsidiary of $7.0 million, $3.2 million of cash used for shares withheld for taxes, and $20.1 million of payment of contingent consideration for business combinations.

For the year ended December 31, 2024, included changes in the net obligations for funds held on the behalf of

customers of $179.6 million, borrowings under the 2024 Credit Agreement (including the First Amendment) net of issue discounts of $945.1 million, and proceeds for the exercise of stock options of $1.8 million.

This was offset by repayment of the principal of the 2021 Credit Agreement and debt issuance and modification costs related to the refinancing of $666.5 million, redemption of the redeemable senior preferred stock including dividends of $303.2 million, redemption of non-controlling interest in subsidiary of $2.1 million, $1.5 million of cash used for shares withheld for taxes, and $5.6 million of payment of contingent consideration for business combinations.

For the year ended December 31, 2023, included changes in the net obligations for funds held on the behalf of customers of $211.1 million,

$49.8 million related to proceeds from the increase of the term Facility under the 2021 Credit Agreement and $44.0 million related to additional borrowings under the revolving credit facility.

This was offset by $56.5 million of cash used for the repayment of borrowings under the revolving credit facility, $6.3 million of cash used for the repayment of the 2021 Credit Agreement's term facility, $24.7 million of cash dividends paid to redeemable senior preferred stockholders, $1.3 million of cash used for shares withheld for taxes, $4.7 million of payments of contingent consideration for business combinations and $1.2 million for debt issuance and modification costs paid related to the modification of the 2021 Credit Agreement.

Long-Term Debt

For the year ended December 31, 2024, the Company had outstanding debt obligations, including the current portion and net of unamortized debt discount of $945.5 million, compared to $654.4 million for the year ended December 31, 2023, resulting in an increase of $291.1 million.

The debt balance for the year ended December 31, 2024 consisted of funds outstanding under the term facility, offset by $15.1 million of unamortized debt discounts and issuance costs.

For the year ended December 31, 2025, the Company had outstanding debt obligations, including the current portion and net of unamortized debt discount, of $1.06 billion, compared to $945.5 million for the year ended December 31, 2024, resulting in an increase of $109.9 million.

The debt balance for the year ended December 31, 2025 consisted of funds outstanding under the 2024 term facility and Residual Finance credit facility, offset by $16.0 million of unamortized debt discounts and issuance costs.

There were no funds outstanding under the revolving credit facility as of December 31, 2025 and 2024.

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.

Minimum amortization of the 2024 Credit Agreement term facility are equal quarterly installments in aggregate annual amounts equal to $10.4 million, with the balance paid upon maturity.

Payment is due on maturity for the Residual Finance credit facility.

On May 16, 2024, the Company entered in to the 2024 Credit Agreement, which provided a $835.0 million term facility and a revolving credit facility of $100.0 million.

The term facility was was further increased by $115.0 million (First Amendment to the 2024 Credit Agreement) effective November 21, 2024.

The term facility was further increased by $115.0 million (First Amendment to the 2024 Credit Agreement) effective November 21, 2024.

The outstanding borrowings will accrue using the SOFR rate plus an applicable margin per year subject to a SOFR floor of 0.50%.

The term facility matures in May 2031 and the revolving credit facility expires in May 2029.

The 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.

If the aggregate principal amount of outstanding revolving loans and letters of credit under the Credit Agreement exceeds 35% of the total revolving facility thereunder, the loan parties are required to comply with certain restrictions on its Total Net Leverage Ratio, which is defined in the Credit Agreement as the ratio of consolidated total debt less unrestricted cash to consolidated adjusted EBITDA (as defined in the Credit Agreement).

If the aggregate principal amount of outstanding revolving loans and letters of credit under the 2024 Credit Agreement exceeds 35% of the total revolving credit facility thereunder, the Company is required to comply with certain restrictions on its Total Net Leverage Ratio.

On July 31, 2025, the Company entered into the second amendment to the 2024 Credit agreement, which increased the principal balance of the term facility from $935.5 million to $1.00 billion, increased quarterly principal payments from $2.4 million to $2.5 million, extended the maturity date from May 2031 to July 2032 and decreased the margin rate from 4.75% to 3.75%.

The amendment also increased the credit commitment under the revolving credit facility from $70.0 million to $100.0 million, extended the maturity date from May 2029 to July 2030 and decreased the margin rate from 4.25% to 3.50%.

On October 1, 2025, the Company entered into the third amendment to the 2024 Credit Agreement, which increased the principal balance of the term loan from $1.00 billion to $1.04 billion and increased quarterly principal payments from $2.5 million to $2.6 million.

All other material terms of the 2024 Credit agreement remained unchanged.

As of December 31, 2025, there are no principal payments due for the next 12 months due to a prepayment in the fourth quarter of 2025.

On August 18, 2025, a wholly owned subsidiary of the Company not restricted by the 2024 Credit Agreement entered into the Residual Finance credit facility which provides a delayed draw term loan facility with a total commitment of $50.0 million of which the Company has drawn $35.4 million.

The agreement also provides an accordion feature to increase the commitment by an aggregate amount not to exceed $75.0 million such that the total commitment may equal, but not exceed, $125.0 million.

The purpose of this credit facility is to fund certain residual purchases and loans to ISOs and ISVs.

Outstanding borrowings under the Residual Finance credit facility accrue interest using a SOFR rate plus an applicable margin per year, equal to 6.25%, subject to a SOFR rate floor of 2.0% per year.

Unused commitments are subject to an unused commitment fee on any undrawn amount equal to 1.0% per year of the unused portion.

The 2024 Credit Agreement and Residual Finance credit facility both contain 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.

If the aggregate principal amount of outstanding revolving loans and letters of credit under the 2024 Credit Agreement exceeds 35% of the total revolving facility thereunder at quarter end, the loan parties are required to comply with certain restrictions on its Total Net Leverage Ratio, which is defined in the 2024 Credit Agreement as the ratio of consolidated total debt less unrestricted cash to consolidated adjusted EBITDA (as defined in the 2024 Credit Agreement).

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.

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 December 31, 2025, the Company was in compliance with the covenants in the 2024 Credit Agreement.

The Residual Finance credit facility requires Finance SPV 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 December 31, 2025, Finance SPV was in compliance with the restrictions in the agreement.

Critical Accounting Estimates

5 unchanged sentences

Realization of deferred tax assets is dependent upon future taxable income.

A valuation allowance is recognized if it is more

likely than not that some portion or all of a deferred tax asset will not be realized based on the weight of available evidence, including expected future earnings.

A valuation allowance is recognized if it is more likely than not that some portion or all of a deferred tax asset will not be realized based on the weight of available evidence, including expected future earnings.

We recognize an uncertain tax position in our financial statements when we conclude that a tax position is more likely than not to be sustained upon examination based solely on its technical merits.

6 unchanged sentences

We test goodwill for impairment for each of our reporting units on an annual basis on October 1 or when events occur, or circumstances indicate the fair value of a reporting unit may be below its carrying value.

We perform the annual assessment using the qualitative method.

Where deemed appropriate, we may perform a quantitative assessment that uses market data and discounted cash flow analysis, which involve estimates of future revenues and operating cash flows.

We perform the annual assessment using either the qualitative or quantitative method.

The qualitative assessment considers industry and market considerations, overall financial performance and other relevant events and factors affecting the reporting units or the Company as a whole.

The quantitative assessment considers both the market approach, which estimates fair value using market multiples of comparable companies and transaction multiples of recent transactions, and the income approach, which estimates fair value using a discounted cash flow utilizing forecasted projections discount rates based on the reporting unit’s weighted average cost of capital.

Changes in these estimates and assumptions or a significant decrease in earnings could materially affect the fair value of goodwill and could result in a goodwill impairment charge.

3 unchanged sentences

We amortize the cost of our acquired intangible assets over their estimated useful lives using either a straight-line or an accelerated method that most accurately reflects the estimated pattern in which the economic benefit of the respective asset is consumed.

Business Combinations

Business Combinations and Asset Acquisitions

We allocate the purchase price of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values.

2 unchanged sentences

The estimated fair value of contingent consideration is updated in future periods based on information available at that time.

Management uses all available information when estimating the fair values of the assets acquired, liabilities assumed and contingent consideration, and must apply judgement and make certain assumptions when making these estimates.

Management uses all available information when estimating the fair values of the assets acquired, liabilities assumed and contingent consideration, and must apply judgment and make certain assumptions when making these estimates.

The assumptions management uses when determining fair values include estimated future cash flows or income, market rate assumptions, actuarial assumptions and discount rate assumptions.

2 unchanged sentences

Accordingly, there can be no assurance that the estimates, assumptions and values reflected in the valuations will be realized, and actual results could differ materially.

We account for a transaction as an asset acquisition when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, or otherwise does not meet the definition of a business.

Asset acquisition-related costs are capitalized as part of the asset or assets acquired.

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-K

Item 7. Management’s Discussion and Analysis