What changed in this filing

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Item 1. Financial Statements

2026-08-06 compared with 2026-05-11 · 242 added, 125 removed, 640 unchanged (36% of the section changed)

Financial Statements

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Current assets:

29 unchanged sentences

100,000,000 shares authorized;

0 issued or outstanding at March 31, 2026 and December 31, 2025

0 issued or outstanding at June 30, 2026 and December 31, 2025

Common Stock, $ 0.001 par value;

1,000,000,000 shares authorized;

87,200,122 and 86,639,593 shares issued at March 31, 2026 and December 31, 2025, respectively;

and 82,301,383 and 81,907,304 shares outstanding at March 31, 2026 and December 31, 2025, respectively

Treasury stock at cost, 4,898,739 and 4,732,289 shares at March 31, 2026 and December 31, 2025, respectively

87,416,670 and 86,639,593 shares issued at June 30, 2026 and December 31, 2025, respectively;

and 82,420,307 and 81,907,304 shares outstanding at June 30, 2026 and December 31, 2025, respectively

Treasury stock at cost, 4,996,363 and 4,732,289 shares at June 30, 2026 and December 31, 2025, respectively

( 24,282 ) ( 22,759 )

2 unchanged sentences

Accumulated deficit ( 71,830 ) ( 91,453 )

Total stockholders' deficit attributable to stockholders of Priority ( 89,915 ) ( 100,415 )

Total stockholders' deficit attributable to stockholders of Priority Commerce ( 79,166 ) ( 100,415 )

Non-controlling interests in consolidated subsidiaries 8,115 8,043

5 unchanged sentences

(in thousands, except per share data)

Three Months Ended

Three Months Ended June 30, Six Months Ended

2026 2025 2026 2025

Revenues $ 262,256 $ 239,812 $ 511,814 $ 464,442

38 unchanged sentences

March 31, 2026 82,301 $ 82 4,899 $ ( 23,643 ) $ 15,902 $ ( 563 ) $ ( 81,693 ) $ ( 89,915 ) $ 8,079 $ ( 81,836 )

Equity-classified stock-based compensation — — — — 1,636 — — 1,636 — 1,636

Vesting of stock awards 216 — — — — — — — — —

Shares withheld for taxes ( 97 ) — 97 ( 639 ) — — — ( 639 ) — ( 639 )

Issuance of profit interests in subsidiaries — — — — — — — — 36 36

Foreign currency translation adjustment — — — — — ( 111 ) — ( 111 ) — ( 111 )

Net income — — — — — — 9,863 9,863 — 9,863

June 30, 2026 82,420 $ 82 4,996 $ ( 24,282 ) $ 17,538 $ ( 674 ) $ ( 71,830 ) $ ( 79,166 ) $ 8,115 $ ( 71,051 )

Priority Technology Holdings, Inc.

Unaudited Consolidated Statements of Changes in Stockholders' Deficit and Non-Controlling Interest

(in thousands)

Stock Treasury

11 unchanged sentences

March 31, 2025 79,712 $ 80 4,508 $ ( 21,077 ) $ 1,669 $ ( 133 ) $ ( 138,866 ) $ ( 158,327 ) $ 1,902 $ ( 156,425 )

Equity-classified stock-based compensation — — — — 1,625 — — 1,625 — 1,625

Vesting of stock awards and ESPP purchases 270 — — — 111 — — 111 — 111

Shares withheld for taxes ( 118 ) — 118 ( 844 ) — — — ( 844 ) — ( 844 )

Exercise of stock options 34 — — — 224 — — 224 — 224

Issuance of profit interests in subsidiaries — — — — — — — — 79 79

Foreign currency translation adjustment — — — — — 217 — 217 — 217

Net income — — — — — — 10,879 10,879 — 10,879

June 30, 2025 79,898 $ 80 4,626 $ ( 21,921 ) $ 3,629 $ 84 $ ( 127,987 ) $ ( 146,115 ) $ 1,981 $ ( 144,134 )

See Notes to Unaudited Consolidated Financial Statements.

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

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( 3,012 ) ( 1,430 )

Short-term investments 25,000 —

Net cash provided by/(used in) investing activities 11,418 ( 9,715 )

Short-term investments, net ( 185,000 ) —

Other investing activities ( 2,400 ) ( 2,275 )

Net cash used in investing activities ( 203,024 ) ( 21,145 )

Cash flows from financing activities:

8 unchanged sentences

Net change in cash and cash equivalents and restricted cash:

Net increase in cash and cash equivalents, and restricted cash 105,883 47,501

Net (decrease)/increase in cash and cash equivalents, and restricted cash ( 64,449 ) 184,026

Cash and cash equivalents and restricted cash at beginning of period 1,345,998 993,864

Cash and cash equivalents and restricted cash at end of period $ 1,281,549 $ 1,177,890

Reconciliation of cash and cash equivalents, and restricted cash:

Cash and cash equivalents $ 92,152 $ 47,587

Priority Technology Holdings, Inc .

1 unchanged sentence

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Reconciliation of cash and cash equivalents, and restricted cash:

Cash and cash equivalents $ 120,261 $ 50,564

Restricted cash 17,439 14,205

6 unchanged sentences

Non-cash investing and financing activities:

Deferred consideration accrual $ — $ 6,500

Foreign currency adjustment to goodwill and intangibles $ 327 $ 488

Exercise of stock options $ — $ 11

See Notes to Unaudited Consolidated Financial Statements.

4 unchanged sentences

Priority Technology Holdings, Inc.

and its consolidated subsidiaries are referred to herein collectively as "Priority," the "Company," "we," "our" or "us," unless the context requires otherwise.

Priority is a payments and banking fintech purpose-built to collect, store, lend and send money with a connected commerce engine that combines full-service merchant acquiring for accounts receivable, complete automated payables tool for bill payment, and sophisticated treasury management solutions to accelerate cash flow and optimize working capital for its customers.

and its consolidated subsidiaries are referred to herein collectively as "Priority Commerce," the "Company," "we," "our" or "us," unless the context requires otherwise.

Priority Commerce delivers payments and banking solutions that power connected commerce.

Through a unified platform of payables, merchant services, and banking and treasury, Priority Commerce helps businesses manage money more effectively and unlock growth.

The Priority Commerce Engine accelerates cash flow, improves working capital, reduces costs, and creates new revenue opportunities.

The Company operates on a calendar year ending each December 31 and reports quarterly results on four calendar quarters ending on March 31, June 30, September 30 and December 31 of each year.

6 unchanged sentences

Changes in the Company's ownership interest while the Company retains its controlling interest are accounted for as equity transactions.

As of March 31, 2026, there was no income attributable to NCI in accordance with the applicable operating agreements.

As of June 30, 2026, there was no income attributable to NCI in accordance with the applicable operating agreements.

In the opinion of the Company's management, all known adjustments necessary for a fair presentation of the Unaudited Consolidated Financial Statements for interim periods have been made.

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Provision ( 955 ) ( 4,378 )

Balance at March 31, 2026 $ ( 6,217 ) $ ( 5,221 )

The Company has elected not to measure expected losses for accrued interest on notes receivable but instead recognize losses for accrued interest within the period losses are incurred.

Balance at June 30, 2026 $ ( 6,551 ) $ ( 5,457 )

The Company has elected not to measure expected losses for accrued interest on notes receivable but instead recognize losses for accrued interest within the period losses are determined to be uncollectible.

Recently Adopted Accounting Standards

2 unchanged sentences

The ASU is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

Early adoption is permitted.

Adoption of this standard did not have any material impact on results of operations, financial position, cash flows or disclosures.

17 unchanged sentences

Acquisitions that occurred in prior years

On January 21, 2025, Priority’s wholly owned subsidiary, Priority Canada Acquisition Company, Inc., acquired 100 % of the equity interest in Payslate Inc.

On January 21, 2025, Priority Commerce’s wholly owned subsidiary, Priority Canada Acquisition Company, Inc., acquired 100 % of the equity interest in Payslate Inc.

(Canada), and its subsidiary Rentmoola Payment Solutions Ltd (United Kingdom) (jointly referred as "Letus business").

The Letus business is engaged in processing of rent payments for property management companies in the United States and Canada.

The acquisition will provide synergy opportunities to the Company's Treasury Solutions rent payment business and expand Priority's services in Canada.

The acquisition offers synergy opportunities to the Company's Treasury Solutions rent payment business and expand Priority Commerce's services in Canada.

The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, Business Combinations .

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The deferred consideration of $ 4.3 million was recorded at the fair value on the acquisition date.

The deferred consideration will be paid monthly equal to 40 % of gross profit under the agreement and total payments will not exceed $ 6.5 million.

The deferred consideration is paid monthly equal to 40 % of gross profit under the agreement and total payments will not exceed $ 6.5 million.

Any amount remaining but unpaid will be paid in full by January 21, 2030.

The Company will accrete interest expense on the deferred consideration throughout the period.

The Company continues to accrete interest expense on the deferred consideration throughout the period.

The final purchase price allocation is set forth in the table below:

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The goodwill was 100 % allocated to the Company's Treasury Solutions reportable segment.

On August 26, 2025, Priority's wholly owned subsidiary, Priority Tech Ventures, LLC, through it's merger subsidiary, acquired total outstanding shares including all voting interests in Sila Inc.

On August 26, 2025, Priority Commerce's wholly owned subsidiary, Priority Tech Ventures, LLC, through its merger subsidiary, acquired total outstanding shares including all voting interests in Sila Inc.

("the "Sila business" or "Sila").

Sila is a payment platform that enables ACH transfers, instant settlement, digital wallets and built-in compliance through a simple application programming interface.

Technology acquired in this transaction will supplement Priority's current treasury solutions.

Technology acquired in this transaction supplements Priority Commerce's Treasury Solutions reportable segment.

The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, Business Combinations .

33 unchanged sentences

The bargain purchase gain is recorded in other income, net, in the Unaudited Consolidated Statements of Operations and Comprehensive Income.

On October 1, 2025, Priority's subsidiary, Priority DMS, LLC, entered into the asset purchase and contribution agreement with DMSJV, LLC ("DMS"), to acquire substantially all of the assets of DMS, including all voting interests.

DMS provides credit card processing solutions to automotive dealerships via marketing and selling card and ACH processing services and ancillary services including POS systems, payment gateways, payment processing and authorization, clearing, and settlement for credit card, debit and ACH transactions, which will supplement the Company's Merchant Solutions reportable segment.

DMS ( doing business as Priority Commerce Automotive )

On October 1, 2025, Priority Commerce's subsidiary, Priority DMS, LLC, entered into the asset purchase and contribution agreement with DMSJV, LLC ("DMS"), to acquire substantially all of the assets of DMS.

DMS provides credit card processing solutions to automotive dealerships via marketing and selling card and ACH processing services and ancillary services including POS systems, payment gateways, payment processing and authorization, clearing, and settlement for credit card, debit and ACH transactions, which supplements the Company's services within the Merchant Solutions reportable segment.

The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, Business Combinations .

34 unchanged sentences

Boom Commerce

On August 18, 2025, Priority Boom, LLC, a subsidiary of Priority, completed its acquisition of certain residual portfolio rights for a purchase price of $ 73.5 million in cash, $ 13.5 million in Common shares of Priority and earn-out payments not to exceed $ 17.0 million based on meeting certain thresholds over a three-year period from the date of acquisition.

On August 18, 2025, Priority Boom, LLC, a subsidiary of Priority Commerce, completed its acquisition of certain residual portfolio rights for a purchase price of $ 73.5 million in cash, $ 13.5 million in Common shares of Priority Commerce and earn-out payments not to exceed $ 17.0 million based on meeting certain thresholds over a three-year period from the date of acquisition.

The transaction did not meet the definition of a business;

2 unchanged sentences

Disaggregation of Revenues

The following table presents a disaggregation of our consolidated revenues by type:

Three Months Ended March 31,

(in thousands) 2026 2025

Revenue Type:

Merchant card fees $ 185,933 $ 167,079

Money transmission services 41,748 37,449

Outsourced services and other services (2)

19,826 17,002

Equipment 2,051 3,100

Total revenues (1)

$ 249,558 $ 224,630

(1) Includes contracts with an original duration of one year or less and variable consideration under a stand-ready series of distinct days of service.

Total revenues include contracts with an original duration of one year or less and variable consideration under a stand-ready series of distinct days of service.

The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material.

(2) Approximately $ 14.8 million and $ 12.6 million of interest income on customer funds for the three months ended March 31, 2026 and 2025, respectively, is included in outsourced services and other services revenue in the table above.

Approximately $ 1.0 million and $ 1.1 million of interest income on corporate funds for the three months ended March 31, 2026 and 2025, respectively, is included in other income, net on the Company's Unaudited Consolidated Statements of Operations and Comprehensive Income and not reflected in the table above.

The following table presents a disaggregation of our consolidated revenues by segment:

Three Months Ended March 31, 2026

(in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services Equipment Total

Three Months Ended June 30, 2026

(in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services (1)

Equipment Total

Merchant Solutions $ 171,917 $ — $ 1,542 $ 2,319 $ 175,778

3 unchanged sentences

Total revenues $ 199,093 $ 41,989 $ 18,855 $ 2,319 $ 262,256

Three Months Ended March 31, 2025

(in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services Equipment Total

(1) Approximately $ 15.4 million of interest income on customer funds is included in outsourced services and other services revenue in the table above and approximately $ 1.4 million of interest income on corporate funds is included in other income, net on the Company's Unaudited Consolidated Statements of Operations and Comprehensive Income and is not reflected in the table above for the there months ended June 30, 2026.

Six Months Ended June 30, 2026

(in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services (1)

Equipment Total

Merchant Solutions $ 330,416 $ — $ 2,778 $ 4,370 $ 337,564

3 unchanged sentences

Total revenues $ 385,026 $ 83,737 $ 38,681 $ 4,370 $ 511,814

(1) Approximately $ 30.2 million of interest income on customer funds is included in outsourced services and other services revenue in the table above and approximately $ 2.4 million of interest income on corporate funds is included in other income, net on the Company's Unaudited Consolidated Statements of Operations and Comprehensive Income and is not reflected in the table above for the six months ended June 30, 2026.

Three Months Ended June 30, 2025

(in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services (1)

Equipment Total

Merchant Solutions $ 158,825 $ — $ 1,202 $ 3,203 $ 163,230

Payables 21,488 — 3,545 — 25,033

Treasury Solutions 968 39,273 12,417 — 52,658

Eliminations ( 798 ) — ( 311 ) — ( 1,109 )

Total revenues $ 180,483 $ 39,273 $ 16,853 $ 3,203 $ 239,812

(1) Approximately $ 14.1 million of interest income on customer funds is included in outsourced services and other services revenue in the table above and approximately $ 1.0 million of interest income on corporate funds is included in other income, net on the Company's Unaudited Consolidated Statements of Operations and Comprehensive Income and is not reflected in the table above for the three months ended June 30, 2025.

Six Months Ended June 30, 2025

(in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services (1)

Equipment Total

Merchant Solutions $ 306,307 $ — $ 2,310 $ 6,303 $ 314,920

Payables 41,257 — 7,694 — 48,951

Treasury Solutions 1,575 76,722 24,449 — 102,746

Eliminations ( 1,577 ) — ( 598 ) — ( 2,175 )

Total revenues $ 347,562 $ 76,722 $ 33,855 $ 6,303 $ 464,442

(1) Approximately $ 26.7 million of interest income on customer funds is included in outsourced services and other services revenue in the table above and approximately $ 2.1 million of interest income on corporate funds is included in other income, net on the Company's Unaudited Consolidated Statements of Operations and Comprehensive Income and is not reflected in the table above for the six months ended June 30, 2025.

Settlement Assets and Obligations

7 unchanged sentences

Exception items that the Company has deemed uncollectible are recorded as merchant losses, a component of cost of revenue in the Company's Unaudited Consolidated Statements of Operations and Comprehensive Income.

Expenses for merchant losses net of recoveries for the three months ended March 31, 2026 and 2025 were $ 1.8 million and $ 2.0 million, respectively.

Expenses for merchant losses, net of recoveries for the

three and six months ended June 30, 2026 were $ 2.2 million and $ 5.5 million, respectively.

Expenses for merchant losses were $ 0.2 million and $ 1.9 million for the three and six months ended June 30, 2025, respectively.

Card settlements due from networks and Dues to Customers’ Payees

As part of the Payables service offering:

• Priority accepts card payments for its customers and processes disbursements to their vendors (customers’ payees).

• Priority Commerce accepts card payments for its customers and processes disbursements to their vendors (customers’ payees).

The time lag between authorization and settlement of card transactions creates certain receivables (from card networks) and payables (to the vendors of customers).

These receivables and payables arise from the settlement activities that the Company performs on behalf of its customers and therefore, are presented as settlement assets and related obligations.

• Priority processes payments to the customers’ payees wherein customers funds are received either in Company-owned bank accounts controlled by the Company or bank-owned FBO accounts controlled by the banks, until such time that the transactions are settled with the customers’ payees.

• Priority Commerce processes payments to the customers’ payees wherein customers funds are received either in Company-owned bank accounts controlled by the Company or bank-owned FBO accounts controlled by the banks, until such time that the transactions are settled with the customers’ payees.

Balances in the bank-owned FBO accounts and related obligations are not considered assets and obligations of the Company.

2 unchanged sentences

MTL Customer cash and cash equivalents (restricted in nature), short-term investments and MTL Customer account obligations

The Company provides treasury solutions to its customers through its money transmission licenses in 46 states, the District of Columbia, and 2 territories of the United States and through agency relationships with banks in the remaining states.

The Company provides treasury solutions to its customers either through its money transmission licenses in 46 states, the District of Columbia, and 2 territories of the United States or through agency relationships with banks.

These services include the acceptance and disbursement of funds.

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The Company's consolidated settlement assets and obligations were as follows:

(in thousands) March 31, 2026 December 31, 2025

(in thousands) June 30, 2026 December 31, 2025

Settlement Assets, net of estimated losses (1) :

14 unchanged sentences

Total settlement obligations $ 1,374,736 $ 1,297,263

(1) Allowance for estimated losses were $ 5.2 million and $ 7.1 million as of March 31, 2026 and December 31, 2025, respectively.

(2) Excludes merchant funds held at member banks of $ 114.0 million and $ 103.9 million on March 31, 2026 and December 31, 2025, respectively.

(3) Excludes funds held under agency arrangement with member banks (in states where the Company does not have a money transmitter license), balances remain under the control of the member banks (therefore not the assets or obligations of the Company).

Agency owned accounts held $ 34.9 million and $ 50.3 million at March 31, 2026 and December 31, 2025, respectively.

(4) Includes $ 10.2 million and $ 16.1 million as of March 31, 2026 and December 31, 2025, respectively, of card settlements due from networks and the remainder is included in restricted cash on our Unaudited Consolidated Balance Sheets.

(1) Allowance for estimated losses were $ 5.5 million and $ 7.1 million as of June 30, 2026 and December 31, 2025, respectively.

(2) Excludes merchant funds held at member banks of $ 117.3 million and $ 103.9 million on June 30, 2026 and December 31, 2025, respectively.

(3) Excludes funds held under agency arrangement with member banks, balances remain under the control of the member banks (therefore not the assets or obligations of the Company).

Agency owned accounts held $ 58.0 million and $ 50.3 million at June 30, 2026 and December 31, 2025, respectively.

(4) Includes $ 15.6 million and $ 16.1 million as of June 30, 2026 and December 31, 2025, respectively, of card settlements due from networks and the remainder is included in restricted cash on our Unaudited Consolidated Balance Sheets.

(5) Excludes amounts due to customer payees that are held in bank-owned FBO accounts which are not assets of the Company, and the associated obligations are not liabilities of the Company.

Therefore, neither is recognized in the Company's Unaudited Consolidated Balance Sheets.

Bank-owned FBO accounts held funds of $ 177.1 million and $ 151.8 million at March 31, 2026 and December 31, 2025, respectively.

Bank-owned FBO accounts held funds of $ 144.5 million and $ 151.8 million at June 30, 2026 and December 31, 2025, respectively.

Notes Receivable

The Company had notes receivable of $ 27.8 million and $ 19.7 million as of March 31, 2026 and December 31, 2025, respectively, which are reported as current portion of notes receivable and notes receivable less current portion on the Company's Unaudited Consolidated Balance Sheets.

The notes receivable carried weighted-average interest rates of 13.1 % and 13.6 % as of March 31, 2026 and December 31, 2025, respectively.

The Company had notes receivable of $ 22.7 million and $ 19.7 million as of June 30, 2026 and December 31, 2025, respectively, which are reported as current portion of notes receivable and notes receivable less current portion on the Company's Unaudited Consolidated Balance Sheets.

The notes receivable carried weighted-average interest rates of 12.3 % and 13.6 % as of June 30, 2026 and December 31, 2025, respectively.

The notes are receivables from ISOs and ISVs, which are made with a term of 1 - 5 years.

Under the terms of the agreements, the Company will hold back residual payments due to the ISOs and ISVs and apply such residuals against future payment due to the Company.

As of March 31, 2026 and December 31, 2025, there were no allowance for expected losses on notes receivable.

The following table provides a reconciliation for activity within the notes receivable as of March 31, 2026:

Under the terms of the agreements, the advances are secured by residual payments due to the ISOs and ISVs and apply such residuals against future payment due to the Company.

As of June 30, 2026 and December 31, 2025, there were no allowance for expected losses on notes receivable.

The following table provides a reconciliation for activity within the notes receivable as of June 30, 2026:

(in thousands)

3 unchanged sentences

Balance at March 31, 2026 $ 27,750

As of March 31, 2026, the principal payments for t

he Company's notes receivable are due as follows:

Principal payments received ( 6,540 )

Advances during the period 1,493

Balance at June 30, 2026 $ 22,703

As of June 30, 2026, the principal payments for the Company's notes receivable are due as follows:

(in thousands)

Twelve months ending March 31,

Twelve months ending June 30,

Total $ 22,703

1 unchanged sentence

A summary of property, equipment and software, net was as follows:

(in thousands) March 31, 2026 December 31, 2025

(in thousands) June 30, 2026 December 31, 2025

Computer software $ 136,982 $ 125,073

6 unchanged sentences

Property, equipment and software, net $ 62,329 $ 58,636

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2026 2025 2026 2025

2 unchanged sentences

Fully depreciated assets are retained in property, equipment and software, net, until removed from service.

Certain fully depreciated assets were removed from service during the three months ended March 31, 2026 and 2025.

No fully depreciated assets were removed from service during the three months ended June 30, 2026.

Certain fully depreciated assets were removed from service during the six months ended June 30, 2026 and three and six months ended ended June 30, 2025.

Goodwill and Intangible Assets

The Company's goodwill relates to the following reportable segments:

(in thousands) March 31, 2026 December 31, 2025

(in thousands) June 30, 2026 December 31, 2025

Merchant Solutions $ 158,298 $ 158,298

6 unchanged sentences

Foreign currency translation adjustment ( 236 )

Balance at March 31, 2026

As of March 31, 2026, the Company is not aware of any triggering events for impairment that have occurred since the last annual impairment test.

Balance at June 30, 2026

As of June 30, 2026, the Company is not aware of any triggering events for impairment that have occurred since the last annual impairment test.

Intangible Assets

Intangible assets consisted of the following:

March 31, 2026 Weighted-average

June 30, 2026 Weighted-average

(in thousands, except weighted-average data) Gross Carrying Value Accumulated Amortization Net Carrying Value

23 unchanged sentences

(1) These assets have an indefinite useful life.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2026 2025 2026 2025

1 unchanged sentence

$ 16,348 $ 10,018 $ 29,590 $ 19,933

(1) Included in amortization expense is $ 0.6 million for the three months ended March 31, 2026 and 2025, respectively, related to the amortization of certain contract acquisition costs.

As of March 31, 2026, there were no impairment indicators present.

(1) Included in amortization expense is $ 0.6 million and $ 1.2 million for the three and six months ended June 30, 2026, respectively, and $ 0.6 million and $ 1.2 million for the three and six months ended June 30, 2025 respectively, related to the amortization of certain contract acquisition costs.

As of June 30, 2026, there were no impairment indicators present.

Debt Obligations

Outstanding debt obligations consisted of the following:

(in thousands) March 31, 2026 December 31, 2025

(in thousands) June 30, 2026 December 31, 2025

2024 Credit Agreement

Term facility - matures July 31, 2032, interest rate of 7.42 % and 7.47 % at March 31, 2026 and December 31, 2025, respectively

Term facility - matures July 31, 2032, interest rate of 7.39 % and 7.47 % at June 30, 2026 and December 31, 2025, respectively

$ 1,020,000 $ 1,020,000

Revolving credit facility - $ 100.0 million line matures July 31, 2030, interest rate of 7.17 % and 7.22 % at March 31, 2026 and December 31, 2025, respectively

Revolving credit facility - $ 100.0 million line matures July 31, 2030, interest rate of 7.14 % and 7.22 % at June 30, 2026 and December 31, 2025, respectively

Residual Finance Credit Facility

Term facility - matures August 18, 2031, interest rate of 9.93 % and 9.98 % at March 31, 2026 and December 31, 2025, respectively

Term facility - matures August 18, 2031, interest rate of 9.88 % and 9.98 % at June 30, 2026 and December 31, 2025, respectively

42,884 35,394

7 unchanged sentences

Interest expense for outstanding debt, including fees for undrawn amounts and amortization of deferred financing costs and debt discounts was as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2026 2025 2026 2025

1 unchanged sentence

$ 21,051 $ 23,054 $ 42,067 $ 46,230

(1) Included in interest expense is $ 0.4 million and $ 1.0 million related to the accretion of deferred consideration from acquisitions for the three months ended March 31, 2026 and 2025, respectively.

(2) Interest expense included amortization of deferred financing costs and debt discounts of $ 0.5 million and $ 0.4 million for the three months ended March 31, 2026 and 2025, respectively.

(1) Included in interest expense is $ 0.3 million and $ 0.7 million related to the accretion of deferred consideration from acquisitions for the three and six months ended ended June 30, 2026, respectively, and $ 1.0 million and $ 2.0 million for the three and six months ended ended June 30, 2025, respectively.

(2) Interest expense included amortization of deferred financing costs and debt discounts of $ 0.4 million and $ 0.9 million for the three and six months ended ended June 30, 2026, respectively, and $ 0.5 million and $ 0.9 million for the three and six months ended June 30, 2025, respectively.

Debt Covenants

4 unchanged sentences

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

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 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.

The Company's consolidated effective income tax rate for the three months ended March 31, 2026 was 27.2 % compared to a consolidated effective income tax rate of 21.4 % for the three months ended March 31, 2025.

The Company's consolidated effective income tax rate for the three and six months ended June 30, 2026 was 27.7 % and 27.4 %, respectively, compared to a consolidated effective income tax rate of 28.9 % and 25.8 % for the three and six months ended June 30, 2025, respectively.

The effective rates differed from the statutory rate of 21.0% primarily due to certain forecasted nondeductible expenses.

2 unchanged sentences

In accordance with the provisions of ASC 740, Income Taxes , the Company is required to provide a valuation allowance against deferred income tax assets when it is "more likely than not" that some portion or all of the deferred tax assets will not be realized.

Based on management's assessment, as of March 31, 2026, the Company continues to record a full valuation allowance against certain transaction costs, and net deferred tax assets acquired as part of the Payslate acquisition.

The Company will continue to evaluate the realizability of the net deferred tax asset on a quarterly basis and, as a result, the valuation allowance may change in future periods.

Based on management's assessment, as of June 30, 2026, the Company continues to record a full valuation allowance against certain transaction costs, and net deferred tax assets acquired as part of the Payslate acquisition.

The Company will continue to

evaluate the realizability of the net deferred tax asset on a quarterly basis and, as a result, the valuation allowance may change in future periods.

Stockholders' Deficit

The Company is authorized to issue 100,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors.

As of March 31, 2026 and December 31, 2025, the Company has not issued any shares of preferred stock.

As of June 30, 2026 and December 31, 2025, the Company has not issued any shares of preferred stock.

Share Repurchase Program

In 2022, Priority's Board of Directors authorized a general share repurchase program under which the Company may purchase up to 2,000,000 shares of its outstanding Common Stock for a total of up to $ 10.0 million.

In 2022, Priority Commerce's Board of Directors authorized a general share repurchase program under which the Company may purchase up to 2,000,000 shares of its outstanding Common Stock for a total of up to $ 10.0 million.

Under the terms of this plan, the Company may purchase shares through open market purchases, unsolicited or solicited privately negotiated transactions, or in another manner so long as it complies with applicable rules and regulations.

4 unchanged sentences

Stock-based compensation expense, which is included in salary and employee benefits within the Unaudited Consolidated Statements of Operations and Comprehensive Income, was as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2026 2025 2026 2025

1 unchanged sentence

Incentive units compensation expense 36 79 72 166

Liability-classified compensation expense 183 —

Liability-classified awards compensation expense 611 1,502 794 1,502

ESPP compensation expense — 28 26 43

Total $ 2,283 $ 3,206 $ 4,371 $ 4,792

Income tax expense for stock-based compensation was $ 0.1 million for the three months ended March 31, 2026.

Income tax benefit for stock-based compensation was $ 0.7 million for the three months ended March 31, 2025.

Income tax expense for stock-based compensation was immaterial for the three and six months ended June 30, 2026.

Income tax benefit for stock-based compensation was $ 0.1 million and $ 0.8 million, respectively, for the three and six months ended June 30, 2025.

No stock-based compensation has been capitalized in any period presented.

Awards granted during the three months ended March 31, 2026 and 2025, were not material.

Awards granted during the three and six months ended June 30, 2026 and 2025, were not material.

The Company's 2018 Plan initially provided for the issuance of up to 6,685,696 shares of the Company's Common Stock.

On March 17, 2022, the Company's Board of Directors unanimously approved an amendment to the 2018 Plan, which was subsequently approved by our shareholders, to increase the number of shares authorized for issuance under the plan by 2,500,000 shares, resulting in 9,185,696 shares of the Company's Common Stock authorized for issuance under the plan.

As of March 31, 2026, the Company had 1,121,191 shares available for issuance under the 2018 Plan.

On March 17, 2022, and February 5, 2026, the Company's Board of Directors unanimously approved amendments to the 2018 Plan which was subsequently approved by our shareholders to increase the numbers of shares authorized for issuance under the plan by 2,500,000 and 8,000,000 shares respectively, resulting in 17,185,696 shares of the Company's Common Stock authorized for issuance under the plan.

As of June 30, 2026, the Company had 9,224,615 shares available for issuance under the 2018 Plan.

2021 Employee Stock Purchase Plan

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Shares issued under the plan may be authorized but unissued or reacquired shares of Common Stock.

All employees of the Company who work more than 20 hours per week and have been employed by the Company for at least 30 days may participate in the ESPP.

All non-executive employees

based in the United States who work more than 20 hours per week and have been employed by the Company for at least 30 days may participate in the ESPP.

Under the ESPP, participants are offered, on the first day of the offering period, the option to purchase shares of Common Stock at a discount on the last day of the offering period.

2 unchanged sentences

The ESPP was amended by shareholder approval on June 13, 2025, to increase the number of shares available by 200,000 .

As of March 31, 2026, the Company had 156,437 shares available for issuance under the 2021 Stock Purchase Plan.

As of June 30, 2026, the Company had 156,437 shares available for issuance under the 2021 Stock Purchase Plan.

Non-voting Incentive Units

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Some of these agreements have minimum annual requirements for processing volumes.

Based on existing contracts in place at March 31, 2026, the Company is committed to pay minimum processing fees under these agreements as noted below:

Based on existing contracts in place at June 30, 2026, the Company is committed to pay minimum processing fees under these agreements as noted below:

(in thousands)

Period Ending March 31,

Twelve months ending June 30,

2027 $ 27,009

2 unchanged sentences

Other Commitments

As of March 31, 2026 and December 31, 2025, the Company had a capital contribution commitment of $ 2.2 million and $ 3.2 million respectively, to fund operations of certain subsidiaries.

As of June 30, 2026 and December 31, 2025, the Company had a capital contribution commitment of $ 1.4 million and $ 3.2 million respectively, to fund operations of certain subsidiaries.

The Company is obligated to make the contributions within 10 business days of receiving notice for such contribution from the subsidiary.

Sponsorship Commitments

The Company entered into various sponsorship agreements with sports and entertainment organizations in exchange for certain advertisement opportunities.

The Company committed to paying the amounts in the table below:

(in thousands)

Twelve months ending June 30,

Total $ 6,460

Contingent/Deferred Consideration

The following table provides a reconciliation of the beginning and ending balance of the Company's deferred and contingent consideration liabilities related to completed acquisitions:

The following table provides a reconciliation of the beginning and ending balance of the Company's deferred and contingent consideration liabilities related to completed business acquisitions:

(in thousands) Contingent Consideration Liabilities Deferred Consideration Liabilities

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Payments — ( 96 )

Foreign currency translation adjustment ( 2 ) —

March 31, 2026 $ 21,345 $ 7,355

June 30, 2026 $ 21,460 $ 7,477

Earn-outs/additional considerations from asset purchase transactions are considered as contingent liabilities until it becomes payable or paid.

As of March 31, 2026, and December 31, 2025, the total contingent liabilities related to our asset purchases are $ 27.2 million.

As of June 30, 2026, and December 31, 2025, the total contingent liabilities related to our asset purchases are $ 27.2 million.

Legal Proceedings

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Contingent and deferred consideration liabilities are uncertain due to the utilization of unobservable inputs and management's judgment in determining the likelihood of achieving criteria required by the respective agreements.

The contingent and deferred considerations have a fair value of $ 28.7 million at March 31, 2026, $ 1.1 million included in accounts payable and accrued expenses and $ 27.6 million included in other noncurrent liabilities on the Company's Unaudited Consolidated Balance Sheets.

The contingent and deferred considerations have a fair value of $ 28.9 million at June 30, 2026, $ 1.2 million included in accounts payable and accrued expenses and $ 27.7 million included in other noncurrent liabilities on the Company's Unaudited Consolidated Balance Sheets.

Notes Receivable

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Substantially all of the Company's notes receivable are secured, and the Company provides for allowances when it believes that certain notes receivable may not be collectible.

The carrying value of the Company's notes receivable, net approximates fair value and was approximately $ 27.8 million and $ 19.7 million at March 31, 2026 and December 31, 2025, respectively and is within Level 3 of the fair value hierarchy.

The carrying value of the Company's notes receivable, net, approximates fair value and was approximately $ 22.7 million and $ 19.7 million at June 30, 2026 and December 31, 2025, respectively and is within Level 3 of the fair value hierarchy.

Investment in Unconsolidated Entities

The Company's investment in unconsolidated entities are carried at cost minus any impairment, if any.

The carrying value of the investments approximate fair value and was $ 10.1 million and $ 8.6 million at June 30, 2026 and December 31, 2025, respectively, within other noncurrent assets on the Company's Unaudited Consolidated Balance Sheets.

The investments in unconsolidated entities are within Level 3 of the fair value hierarchy.

Debt Obligations

1 unchanged sentence

Debt Obligations ) are reflected in the Company's Unaudited Consolidated Balance Sheets at carrying value since the Company did not elect to remeasure debt obligations to fair value at the end of each reporting period.

The fair value of the term facility under the 2024 Credit Agreement was estimated to be $ 989.4 million and $ 998.3 million at March 31, 2026 and December 31, 2025, respectively.

The fair value of the term facility under the 2024 Credit Agreement was estimated to be $ 1,004.7 million and $ 998.3 million at June 30, 2026 and December 31, 2025, respectively.

The fair value was estimated using binding and non-binding quoted prices in an active secondary market, which considers the credit risk and market related conditions, and is within Level 2 of the fair value hierarchy.

During the three months ended March 31, 2026, there were no transfers into, out of, or between levels of the fair value hierarchy.

During the three and six months ended June 30, 2026, there were no transfers into, out of, or between levels of the fair value hierarchy.

Long term incentive award

3 unchanged sentences

The fair value of these awards is remeasured at each reporting date utilizing Level 3 inputs, which encompass management's estimates regarding the anticipated achievement of relevant financial metrics.

The fair value of these awards as of March 31, 2026 was $ 2.2 million, $ 1.5 million included in accounts payable and accrued expenses and $ 0.7 million in other noncurrent liabilities on the Company's Unaudited Consolidated Balance Sheets.

The fair value of these awards as of June 30, 2026 was $ 2.8 million, $ 1.6 million included in accounts payable and accrued expenses and $ 1.2 million in other noncurrent liabilities on the Company's Unaudited Consolidated Balance Sheets.

Segment Information

1 unchanged sentence

• Merchant Solutions :

Provides full-service acquiring and payment-enabled solutions for B2C transactions, leveraging Priority's proprietary software platform, distributed through ISO, direct sales and vertically focused ISV channels.

Provides full-service acquiring and payment-enabled solutions for B2C transactions, leveraging Priority Commerce's proprietary software platform, distributed through ISO, direct sales and vertically focused ISV channels.

Provides market-leading AP automation solutions to corporations, software partners and industry leading FIs in addition to improving cash flows by providing instant access to working capital.

1 unchanged sentence

Provides embedded finance and treasury solutions to customers to modernize legacy platforms and accelerate software partners' strategies to monetize payments.

Corporate includes costs of corporate functions and shared services not allocated to our reportable segments.

Corporate items includes costs of corporate functions and shared services not allocated to our reportable segments.

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 the measure of segment profit or loss to allocate resources.

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

Adjusted EBITDA represents EBITDA (i.e.

earnings before interest, income tax, and depreciation and amortization expenses) 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.

earnings before interest, income tax, depreciation and amortization expenses) 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.

Segment level assets information is not provided or subject to review by the CODM and therefore not provided.

Information on reportable segments and reconciliations to income before income taxes are as follows:

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

(in thousands) Merchant Solutions Payables Treasury Solutions Total

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(4) Adjustment for corporate items include:

(in thousands) March 31, 2026

(in thousands) June 30, 2026

Elimination of cost of services (excludes depreciation and amortization) $ 4,457

3 unchanged sentences

(in thousands) Other specified segment disclosure

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

Merchant Solutions Payables Treasury Solutions Total

Depreciation and amortization $ 13,094 $ 1,289 $ 5,297 $ 19,680

Three Months Ended March 31, 2025

Six Months Ended June 30, 2026

(in thousands) Merchant Solutions Payables Treasury Solutions Total

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Interest expense ( 42,067 )

Selling, general and administrative (non-recurring) ( 5,500 )

Non-cash stock-based compensation ( 4,371 )

Income before income taxes $ 27,043

(1) The significant expense categories and amounts align with the segment level information regularly provided to the CODM.

(2) Other operating expenses including salary and employee benefits, and selling, general and administrative expenses.

(3) Other segment items for each reportable segment include other income, net, and stock-based compensation expense.

(4) Adjustment for corporate items include:

(in thousands) June 30, 2026

Elimination of cost of services (excludes depreciation and amortization) $ 7,959

Other operating expenses (2)

Other items (5)

(5) Other items include other income net, stock-based compensation expense, and selling general and administrative (non-recurring expense).

(in thousands) Other specified segment disclosure

Six Months Ended June 30, 2026

Merchant Solutions Payables Treasury Solutions Total

Depreciation and amortization $ 23,011 $ 2,577 $ 10,500 $ 36,088

Three Months Ended June 30, 2025

(in thousands) Merchant Solutions Payables Treasury Solutions Total

Revenue from external customers $ 162,788 $ 24,668 $ 52,356 $ 239,812

Intersegment revenue 442 365 302 1,109

163,230 25,033 52,658 240,921

Elimination of intersegment revenues ( 1,109 )

Total consolidated revenues 239,812

Cost of revenue (excludes depreciation and amortization) (1)

( 127,814 ) ( 17,751 ) ( 2,939 )

Other operating expenses (1)(2)

( 8,367 ) ( 3,606 ) ( 4,457 )

Other segment items (3)

Segment Adjusted EBITDA $ 27,749 $ 3,770 $ 45,558 $ 77,077

Reconciliation of Segment Adjusted EBITDA to income before income taxes

Segment Adjusted EBITDA $ 77,077

Adjustment for corporate items (4)

Intersegment revenue elimination ( 1,109 )

Depreciation and amortization ( 14,093 )

Interest expense ( 23,054 )

Selling, general and administrative (non-recurring) ( 395 )

Non-cash stock-based compensation ( 3,206 )

Income before income taxes $ 15,302

(1) The significant expense categories and amounts align with the segment level information regularly provided to the CODM.

(2) Other operating expenses including salary and employee benefits, and selling, general and administrative expenses.

(3) Other segment items for each reportable segment include other income, net, and stock-based compensation expense.

(4) Adjustment for corporate items include:

(in thousands) June 30, 2025

Elimination of cost of services (excludes depreciation and amortization) $ 1,105

Other operating expenses (2)

Other items (5)

(5) Other items include other income net, stock-based compensation expense, and selling general and administrative (non-recurring expense).

(in thousands) Other specified segment disclosure

Three Months Ended June 30, 2025

Merchant Solutions Payables Treasury Solutions Total

Depreciation and amortization $ 6,633 $ 1,262 $ 4,941 $ 12,836

Six Months Ended June 30, 2025

(in thousands) Merchant Solutions Payables Treasury Solutions Total

Revenue from external customers $ 314,029 $ 48,356 $ 102,057 $ 464,442

Intersegment revenue 891 595 689 2,175

314,920 48,951 102,746 466,617

Elimination of intersegment revenues ( 2,175 )

Total consolidated revenues 464,442

Cost of revenue (excludes depreciation and amortization) (1)

( 246,386 ) ( 34,376 ) ( 6,160 )

Other operating expenses (1)(2)

( 16,580 ) ( 7,534 ) ( 9,066 )

Other segment items (3)

1,500 245 481

Segment Adjusted EBITDA $ 53,454 $ 7,286 $ 88,001 $ 148,741

Reconciliation of Segment Adjusted EBITDA to income before income taxes

Segment Adjusted EBITDA $ 148,741

Adjustment for corporate items (4)

Intersegment revenue elimination ( 2,175 )

Depreciation and amortization ( 27,870 )

Interest expense ( 46,230 )

Debt modification and extinguishment expenses ( 38 )

6 unchanged sentences

(4) Adjustment for corporate items include:

(in thousands) March 31, 2025

(in thousands) June 30, 2025

Elimination of cost of services (excludes depreciation and amortization) $ 2,170

3 unchanged sentences

(in thousands) Other specified segment disclosure

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

Merchant Solutions Payables Treasury Solutions Total

2 unchanged sentences

The following tables set forth the computation of the Company's basic and diluted earnings per common share:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands except per share amounts) 2026 2025 2026 2025

6 unchanged sentences

Anti-dilutive securities that were excluded from the Company's earnings per common share are as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(number of shares, in thousands) 2026 2025 2026 2025

6 unchanged sentences

The Company’s management evaluated subsequent events through the date of the issuance of the unaudited consolidated financial statements.

There have been no subsequent events that occurred during such period that would require disclosure in, or would be required to be recognized in the unaudited consolidated financial statements as of and for the quarter ended March 31, 2026.

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 1. Financial Statements