Priority Technology Holdings, Inc. 10-Q

Item 1. Financial Statements June 30, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $ 120,261 $ 77,192 Restricted cash 17,439 16,457 Accounts receivable, net of allowances of $ 6,551 and $ 6,297 , respectively 93,075 91,300 Prepaid expenses and other current assets 28,161 32,145 Current portion of notes receivable, net of allowance of $ 0 and $ 0 , respectively 1,751 2,062 Settlement assets 1,372,510 1,295,896 Total current assets 1,633,197 1,515,052 Notes receivable, less current portion 20,952 17,629 Property, equipment and software, net 62,329 58,636 Goodwill 416,405 416,641 Intangible assets, net 287,633 315,190 Deferred income taxes, net 46,677 46,350 Other noncurrent assets 29,198 29,306 Total assets $ 2,496,391 $ 2,398,804 Liabilities, Stockholders' Deficit and Non-controlling interest Current liabilities: Accounts payable and accrued expenses $ 57,520 $ 70,636 Accrued residual commissions 44,415 40,463 Customer deposits and advance payments 1,637 1,972 Current portion of long-term debt 3,112 — Settlement obligations 1,374,736 1,297,263 Total current liabilities 1,481,420 1,410,334 Long-term debt, net of current portion, discounts and debt issuance costs 1,044,685 1,039,358 Other noncurrent liabilities 41,337 41,484 Total liabilities 2,567,442 2,491,176 Commitments and contingencies ( Note 13 ) Stockholders' deficit: Preferred stock, $ 0.001 ; 100,000,000 shares authorized; 0 issued or outstanding at June 30, 2026 and December 31, 2025 — — Common Stock, $ 0.001 par value; 1,000,000,000 shares authorized; 87,416,670 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 82 82 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 ) Additional paid-in capital 17,538 13,925 Accumulated other comprehensive loss ( 674 ) ( 210 ) Accumulated deficit ( 71,830 ) ( 91,453 ) Total stockholders' deficit attributable to stockholders of Priority Commerce ( 79,166 ) ( 100,415 ) Non-controlling interests in consolidated subsidiaries 8,115 8,043 Total stockholders' deficit ( 71,051 ) ( 92,372 ) Total liabilities, stockholders' deficit and Non-controlling interest $ 2,496,391 $ 2,398,804 See Notes to Unaudited Consolidated Financial Statements. 1 Table of Contents Priority Technology Holdings, Inc . Unaudited Consolidated Statements of Operations and Comprehensive Income (in thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenues $ 262,256 $ 239,812 $ 511,814 $ 464,442 Operating expenses Cost of revenue (excludes depreciation and amortization) 162,358 147,399 313,145 284,752 Salary and employee benefits 29,153 27,060 57,675 52,835 Depreciation and amortization 20,893 14,093 38,508 27,870 Selling, general and administrative 16,808 13,910 36,052 29,010 Total operating expenses 229,212 202,462 445,380 394,467 Operating income 33,044 37,350 66,434 69,975 Other expense Interest expense ( 21,051 ) ( 23,054 ) ( 42,067 ) ( 46,230 ) Debt extinguishment and modification costs — — — ( 38 ) Other income, net 1,644 1,006 2,676 2,113 Total other expense, net ( 19,407 ) ( 22,048 ) ( 39,391 ) ( 44,155 ) Income before income taxes 13,637 15,302 27,043 25,820 Income tax expense 3,774 4,423 7,420 6,673 Net income attributable to common stockholders 9,863 10,879 19,623 19,147 Other comprehensive income Foreign currency translation adjustments ( 111 ) 217 ( 464 ) 260 Comprehensive income $ 9,752 $ 11,096 $ 19,159 $ 19,407 Earnings per common share: Basic $ 0.12 $ 0.14 $ 0.24 $ 0.24 Diluted $ 0.12 $ 0.14 $ 0.23 $ 0.24 Weighted-average common shares outstanding: Basic 81,549 78,981 81,462 78,878 Diluted 83,823 79,837 83,736 79,968 See Notes to Unaudited Consolidated Financial Statements. 2 Priority Technology Holdings, Inc. Unaudited Consolidated Statements of Changes in Stockholders' Deficit and Non-Controlling Interest (in thousands) Common Stock Treasury Stock APIC AOCI Accumulated Deficit Deficit Attributable to Stockholders NCIs Total Shares $ Shares $ December 31, 2025 81,907 $ 82 4,732 $ ( 22,759 ) $ 13,925 $ ( 210 ) $ ( 91,453 ) $ ( 100,415 ) $ 8,043 $ ( 92,372 ) Equity-classified stock-based compensation — — — — 1,869 — — 1,869 — 1,869 Vesting of stock awards and ESPP purchases 561 — — — 108 — — 108 — 108 Shares withheld for taxes ( 167 ) — 167 ( 884 ) — — — ( 884 ) — ( 884 ) Issuance of profit interests in subsidiaries — — — — — — — — 36 36 Foreign currency translation adjustment — — — — — ( 353 ) — ( 353 ) — ( 353 ) Net income — — — — — — 9,760 9,760 — 9,760 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 ) 3 Priority Technology Holdings, Inc. Unaudited Consolidated Statements of Changes in Stockholders' Deficit and Non-Controlling Interest (in thousands) Common Stock Treasury Stock APIC AOCI Accumulated Deficit Deficit Attributable to Stockholders NCIs Total Shares $ Shares $ December 31, 2024 77,480 $ 77 4,386 $ ( 19,607 ) $ — $ ( 176 ) $ ( 147,134 ) $ ( 166,840 ) $ 1,815 $ ( 165,025 ) Equity-classified stock-based compensation — — — — 1,499 — — 1,499 — 1,499 Vesting of stock awards and ESPP purchases 534 1 — — 62 — — 63 — 63 Shares withheld for taxes ( 122 ) — 122 ( 1,470 ) — — — ( 1,470 ) — ( 1,470 ) Exercise of stock options 16 — — — 110 — — 110 — 110 Exercise of warrants 1,804 2 — — ( 2 ) — — — — — Issuance of profit interests in subsidiaries — — — — — — — — 87 87 Foreign currency translation adjustment — — — — — 43 — 43 — 43 Net income — — — — — — 8,268 8,268 — 8,268 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. 4 Table of Contents Priority Technology Holdings, Inc . Unaudited Consolidated Statements of Cash Flows (in thousands) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net income $ 19,623 $ 19,147 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of assets 38,508 27,870 Stock-based compensation, ESPP, and incentive units compensation 4,371 4,792 Amortization of debt issuance costs and discounts 949 882 Debt extinguishment and modification costs — 38 Deferred income tax ( 327 ) ( 2,318 ) Change in contingent consideration ( 679 ) 2,039 Other non-cash items, net ( 136 ) ( 228 ) Change in operating assets and liabilities: Accounts receivable ( 1,775 ) ( 17,912 ) Prepaid expenses and other current assets ( 1,146 ) ( 2,312 ) Income taxes 5,081 ( 339 ) Accounts payable and accrued expenses ( 13,002 ) ( 6,810 ) Accrued residual commissions 3,952 2,966 Customer deposits and advance payments ( 335 ) 1,187 Other assets, net 433 1,043 Other liabilities, net ( 172 ) ( 2,965 ) Net cash provided by operating activities 55,345 27,080 Cash flows from investing activities: Acquisition of business, net of cash acquired — ( 4,452 ) Additions to property, equipment and software ( 12,612 ) ( 12,988 ) Notes receivable, net (see Note 5 ) ( 3,012 ) ( 1,430 ) 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: Proceeds from issuance of long-term debt 7,681 — Debt issuance and modification costs paid — ( 40 ) Repayments of long-term debt ( 191 ) ( 10,000 ) Shares withheld for taxes ( 1,523 ) ( 2,314 ) Proceeds from exercise of stock options — 334 Settlement obligations, net 77,359 190,863 Payment of deferred/contingent consideration ( 96 ) ( 752 ) Net cash provided by financing activities 83,230 178,091 Net change in cash and cash equivalents and restricted cash: 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 5 Table of Contents Priority Technology Holdings, Inc . Unaudited Consolidated Statements of Cash Flows (in thousands) Six Months Ended June 30, 2026 2025 Reconciliation of cash and cash equivalents, and restricted cash: Cash and cash equivalents $ 120,261 $ 50,564 Restricted cash 17,439 14,205 Cash and cash equivalents included in settlement assets (restricted in nature) (see Note 4 ) 1,143,849 1,113,121 Total cash and cash equivalents, and restricted cash $ 1,281,549 $ 1,177,890 Supplemental cash flow information: Cash paid for interest $ 40,447 $ 43,331 Cash paid for income taxes, net of refunds $ 2,311 $ 8,950 Non-cash investing and financing activities: Foreign currency adjustment to goodwill and intangibles $ 327 $ 488 Exercise of stock options $ — $ 11 See Notes to Unaudited Consolidated Financial Statements. 6 Table of Contents Priority Technology Holdings, Inc. Notes to Unaudited Consolidated Financial Statements 1. Basis of Presentation and Significant Accounting Policies Business, Consolidation and Presentation Priority Technology Holdings, Inc. 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. Results of operations reported for interim periods are not necessarily indicative of results for the entire year. The accompanying Unaudited Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. These Unaudited Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information pursuant to the rules and regulations of the SEC. The Consolidated Balance Sheet as of December 31, 2025 was derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 but does not include all disclosures required by GAAP for annual consolidated financial statements. NCI represents the equity interest in certain consolidated entities in which the Company owns less than 100% of the profit interests. Changes in the Company's ownership interest while the Company retains its controlling interest are accounted for as equity transactions. 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. These adjustments consist of normal recurring accruals and estimates that affect the carrying amounts of assets and liabilities. These Unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. Certain amounts from prior periods have been reclassified to conform to the current period’s presentation. The effect of these reclassifications on our Company’s previously reported consolidated financial statements was not material. Segment Renaming During the year ended December 31, 2025, the Company renamed its segments to align with the services offered. SMB Payments was renamed to Merchant Solutions, B2B Payments was renamed to Payables and Enterprise Payments was renamed to Treasury Solutions. There was no other change to the segments, see further information at Note 14. Segment Information . Use of Estimates The preparation of Unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Unaudited Consolidated Financial Statements and the reported amounts of revenues and expenses during the reported period. Actual results could materially differ from those estimates. Foreign Currency The Company's reporting currency is the U.S. dollar. The functional currency of the Indian subsidiary of the Company is the Indian Rupee. The functional currency of the Canadian subsidiaries of the Company is the Canadian Dollar. Accordingly, assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the current exchange rate on the last day of 7 the reporting period. Revenues and expenses are translated using the average exchange rate in effect during the reporting period. Translation adjustments are reported as a component of accumulated other comprehensive income. Allowance for Expected Losses A reconciliation of the beginning and ending amount of allowance for expected losses is as follows: (in thousands) Accounts receivable Settlement assets Balance at December 31, 2025 $ ( 6,297 ) $ ( 7,069 ) Charge-offs (recoveries), net 701 5,990 Provision ( 955 ) ( 4,378 ) 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 Measurement of Credit Losses for Accounts Receivable and Contract Assets ASU 2025-05 In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) ("ASU 2025-05") providing a practical expedient when estimating expected credit losses which assumes current conditions as of the balance sheet date do not change for the remaining life of the accounts receivable and contract asset. The ASU is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Adoption of this standard did not have any material impact on results of operations, financial position, cash flows or disclosures. Recently Issued Accounting Standards Pending Adoption Disaggregation of Income Statement Expenses ASU 2024-03 In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) ("ASU 2024-03") requiring additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included on the face of the income statement. The ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company will adopt this guidance for the year ended December 31, 2027. This guidance is expected to only impact the disclosures with no impact on the results of operations, financial position or cash flows. Accounting for Internal-Use Software ASU 2025-06, In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) ("ASU 2025-06") for targeted improvements to the accounting for internal-use software. The amendment updates guidance to consider different methods of software development, updating the requirements for capitalization of software costs. This ASU is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements. Interim Reporting ASU 2025-11 In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) ("ASU 2025-11") provides clarity about the current requirements for a comprehensive list of interim disclosures and also requires the Company to disclose events since the end of the last annual reporting period which have a material impact on the Company. This ASU is effective for interim 8 reporting periods within annual reporting periods beginning after December 15, 2027 and early adoption is permitted. The Company is currently evaluating the impact this ASU will have on its interim consolidated financial statements and disclosures. 2. Acquisitions Acquisitions that occurred in prior years Payslate 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 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 . The total purchase consideration was $ 8.8 million, consisting of $ 4.4 million in cash consideration funded by the Company’s cash flows, deferred consideration of $ 4.3 million and contingent consideration of $ 0.1 million. The deferred consideration of $ 4.3 million was recorded at the fair value on the acquisition date. 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 continues to accrete interest expense on the deferred consideration throughout the period. The final purchase price allocation is set forth in the table below: (in thousands) Consideration: Cash (1) $ 4,627 Deferred consideration (2) 4,282 Contingent consideration (3) 104 Less: cash acquired ( 175 ) Total purchase consideration, net of cash acquired $ 8,838 Recognized amounts of assets acquired and liabilities assumed (4) : Accounts receivable $ 149 Prepaid expenses 229 Property, equipment and software 8 Goodwill 6,070 Intangible assets: Customer relationships 1,555 Trademarks 480 Technology 706 Accounts payable and accrued expenses ( 359 ) Total purchase consideration $ 8,838 (1) Cash at closing net of adjustments from estimated net working capital to actual working capital. (2) The fair value of the deferred consideration was determined utilizing a Monte Carlo simulation. The payments were calculated based on the path for the simulated metrics and the contractual terms of the deferred consideration payments 9 and were discounted to present value at a rate reflecting a risk associated with the payoffs. The fair value was estimated to be the average present value of the deferred consideration payments over all iterations of the simulation. (3) The contingent consideration represents the fair value of the share of net operating loss carryforwards owed to the seller in the future. (4) Includes deferred tax asset of $ 3.8 million which has a full valuation allowance. Goodwill of $ 6.1 million arising from the acquisition primarily consists of the expected synergies and other benefits from combining operations. There was no goodwill deductible for income tax purposes. The goodwill was 100 % allocated to the Company's Treasury Solutions reportable segment. Sila 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 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 . The total purchase consideration was $ 7.2 million, consisting of $ 3.4 million in cash consideration funded by the Company's cash flows, and contingent consideration of $ 3.9 million for contractual earn-outs and additional contingent consideration. Earn-outs will be paid as a percentage of gross profit when certain thresholds are met and additional contingent considerations will be paid based on utilization of the seller's carryforward tax losses. The purchase price is considered preliminary pending finalization of customary adjustments from timing differences. The contingent consideration for the contractual earn-outs was recorded at the fair value of $ 3.9 million on the acquisition date. The contingent consideration will be paid quarterly subject to terms and conditions noted within the agreement over a period of seven years and total payments will not exceed $ 17.0 million. The preliminary purchase price allocation is set forth in the table below: (in thousands) Consideration: Cash (1)(4) $ 3,449 Contingent consideration (2)(4) 3,881 Less: cash acquired ( 100 ) Total purchase consideration, net of cash acquired $ 7,230 Recognized amounts of assets acquired and liabilities assumed: Accounts receivable (4) $ 68 Prepaid expenses (4) 346 Other noncurrent assets (3)(4) 9,522 Intangible assets: Trademarks (4) 772 Technology (4) 943 Accounts payable and accrued expenses (4) ( 386 ) Customer deposits ( 46 ) Fair value of net assets acquired $ 11,219 Estimated bargain purchase gain (4) $ 3,989 (1) Cash at closing net of adjustments from estimated net working capital and closing cash. (2) The fair value of the contingent consideration was determined utilizing a Monte Carlo simulation. The payments were calculated based on the path for the simulated metrics and the contractual terms of the contingent consideration 10 payments and were discounted to present value at a rate reflecting a risk associated with the payoffs. The fair value was estimated to be the average present value of the contingent consideration payments over all iterations of the simulation. The contingent consideration represents the fair value of the contractual earn-outs and the share of net operating loss carryforwards owed to the seller in the future. (3) Includes a deferred tax asset of $ 9.5 million. (4) During the fourth quarter of 2025, the Company recorded measurement period adjustments due to additional information received that existed on the acquisition date. The fair value of acquired assets and assumed liabilities exceeded the consideration paid, resulting in a bargain purchase gain. The Company reviewed its acquisition accounting methods, confirmed all assets and liabilities were properly identified, and ensured measurements reflected all consideration as of the closing date. The gain was primarily due to recognizing a deferred tax asset recorded in accordance with ASC 740 related to Sila's historical net operating losses. The bargain purchase gain is recorded in other income, net, in the Unaudited Consolidated Statements of Operations and Comprehensive Income. 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 . The total purchase consideration was $ 57.9 million, consisting of $ 31.5 million in cash consideration funded by the Company's term loan facility, deferred consideration of $ 2.8 million, contingent consideration of $ 17.1 million for contractual earn-outs and $ 6.6 million in non-voting subsidiary shares issued to the sellers. Earn-outs will be paid as a percentage of gross profit when certain thresholds are met. The purchase price is considered preliminary pending finalization of customary adjustments from timing differences. The contingent consideration for the contractual earn-outs was recorded at the fair value of $ 17.1 million on the acquisition date. The contingent consideration will be paid when an initial cumulative threshold for gross profit is met, subject to terms and conditions noted within the agreement, over a period of at least four years and total payments will not exceed $ 22.5 million. 11 The preliminary purchase price allocation is set forth in the table below: (in thousands) Consideration: Cash $ 31,500 Contingent consideration (2) 17,066 Common equity of the Acquiring Entity (3) 6,562 Deferred consideration (1) 2,801 Total purchase consideration, net of cash acquired $ 57,929 Recognized amounts of assets acquired and liabilities assumed: Accounts receivable $ 11 Inventory 145 Other noncurrent assets 7 Goodwill 34,159 Intangible assets: Customer relationships 17,187 Trademarks 3,222 Technology 3,277 Accounts payable and accrued expenses ( 79 ) Total purchase consideration $ 57,929 (1) The deferred consideration represents the fair value of the amount to be remitted upon direction of the seller no later than four years from the acquisition date. (2) The fair value of the contingent consideration was determined utilizing a Monte Carlo simulation. The payments were calculated based on the path for the simulated metrics and the contractual terms of the deferred consideration payments and were discounted to present value at a rate reflecting a risk associated with the payoffs. The fair value was estimated to be the average present value of the contingent consideration payments over all iterations of the simulation. (3) The fair value determination for the Class B units utilized an option pricing model. The seller may request to convert 50 % of the Class B Units to shares in the Company no later than five years from the acquisition date. Goodwill of $ 34.2 million arising from the acquisition primarily consists of the expected synergies and other benefits from combining operations. There was no goodwill deductible for income tax purposes. The goodwill was 100 % allocated to the Company's Merchant Solutions reportable segment. Other Acquisitions Boom Commerce 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; therefore, it was accounted for as an asset purchase under which the cost of the acquisition was allocated to the acquired assets based on relative fair values. As an asset purchase, additional purchase price (in the form of earn-outs) is accounted for when payment to the seller becomes payable and is added to the carrying value of the asset, as long as it does not meet the definition of a derivative. 12 3. Revenues Disaggregation of Revenues 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. The following table presents a disaggregation of our consolidated revenues by segment: Three Months Ended June 30, 2026 (in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services (1) Equipment Total Segment Merchant Solutions $ 171,917 $ — $ 1,542 $ 2,319 $ 175,778 Payables 26,932 — 3,498 — 30,430 Treasury Solutions 3,844 41,989 14,686 — 60,519 Eliminations ( 3,600 ) — ( 871 ) — ( 4,471 ) Total revenues $ 199,093 $ 41,989 $ 18,855 $ 2,319 $ 262,256 (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 Segment Merchant Solutions $ 330,416 $ — $ 2,778 $ 4,370 $ 337,564 Payables 54,127 — 8,744 — 62,871 Treasury Solutions 7,121 83,737 28,501 — 119,359 Eliminations ( 6,638 ) — ( 1,342 ) — ( 7,980 ) 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. 13 Three Months Ended June 30, 2025 (in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services (1) Equipment Total Segment 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 Segment 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. 4. Settlement Assets and Obligations Settlement assets and obligations include, 1) funds due from merchants arising from settlement of funds for sales and credits between card issuers, merchants, 2) card settlement funds due from networks due to timing and its related obligations, and 3) Customer/Subscriber account balances and related obligations resulting from licensed money transmitter services. Card settlements due from merchants, net The merchant solution services of the Company include settlement of funds for sales and credits between card issuers, card networks and merchants. The standards of the card networks require possession of funds during the settlement process by a member bank which controls the clearing transactions. Since settlement funds are required to be in the possession of a member bank until merchants are funded, these funds 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. Exception items that the Company is still attempting to collect from the merchants through the funds settlement process or merchant reserves are recognized as settlement assets in the Company's Unaudited Consolidated Balance Sheets, with an offsetting reserve for those amounts the Company estimates it will not be able to recover. 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 14 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 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 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. Therefore, neither is recognized in the Company's Unaudited Consolidated Balance Sheets. Amounts due to customers’ payees that are held in Company-owned bank accounts are included in restricted cash in the Company's Unaudited Consolidated Balance Sheets and related obligations are presented as due to customers’ payees. 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 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. While waiting for disbursement, these funds are held in bank accounts maintained by the Company on behalf of its customers. Per the money transmission regulations, the Company is allowed to invest available balances in these accounts in certain permitted investments, and returns on such investments contribute to the Company's net cash inflows. As such, the Company recognized these balances and related obligations on its balance sheet. Considering these balances are payable on demand and are related to settlement activities, they are presented as settlement assets (as part of the current assets) and the related obligations as settlement obligations (as part of the current liabilities) in the Company's Unaudited Consolidated Balance Sheets. The nature of these MTL Customer cash and cash equivalent are restricted in nature and therefore these balances are presented as restricted cash on the Company's Unaudited Consolidated Statements of Cash Flows. The MTL Short-term investments are included within other investing activities on the Company's Unaudited Consolidated Statements of Cash Flows. 15 The Company's consolidated settlement assets and obligations were as follows: (in thousands) June 30, 2026 December 31, 2025 Settlement Assets, net of estimated losses (1) : Card settlements due from merchants (1)(2) $ 3,051 $ 2,455 Card settlements due from networks 15,610 16,092 Subtotal 18,661 18,547 MTL Customer cash and cash equivalents (restricted in nature) (3) 1,143,849 1,252,349 MTL Short-term investments 210,000 25,000 Total settlement assets $ 1,372,510 $ 1,295,896 Settlement Obligations: MTL Customer account obligations $ 1,326,284 $ 1,244,975 Subscriber account obligations 27,920 32,031 Total customer/subscriber account obligations 1,354,204 1,277,006 Due to customers' payees (4)(5) 20,532 20,257 Total settlement obligations $ 1,374,736 $ 1,297,263 (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 $ 144.5 million and $ 151.8 million at June 30, 2026 and December 31, 2025, respectively. 5. Notes Receivable 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 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: 16 (in thousands) Balance at December 31, 2025 $ 19,691 Principal payments received ( 516 ) Advances during the period 8,575 Balance at March 31, 2026 $ 27,750 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 June 30, 2027 $ 1,751 2028 4,420 2029 4,964 2030 5,040 2031 6,528 Thereafter — Total $ 22,703 6. Property, Equipment and Software A summary of property, equipment and software, net was as follows: (in thousands) June 30, 2026 December 31, 2025 Computer software $ 136,982 $ 125,073 Equipment 14,031 14,037 Leasehold improvements 2,585 2,621 Furniture and fixtures 871 875 Property, equipment and software 154,469 142,606 Less: Accumulated depreciation ( 94,983 ) ( 86,245 ) Capital work in-progress 2,843 2,275 Property, equipment and software, net $ 62,329 $ 58,636 Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Depreciation expense $ 4,545 $ 4,075 $ 8,918 $ 7,937 Computer software represents purchased software and internally developed software that is used to provide the Company's services to its customers. 17 Fully depreciated assets are retained in property, equipment and software, net, until removed from service. 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. 7. Goodwill and Intangible Assets Goodwill The Company's goodwill relates to the following reportable segments: (in thousands) June 30, 2026 December 31, 2025 Merchant Solutions $ 158,298 $ 158,298 Treasury Solutions 250,867 251,103 Payables 7,240 7,240 Total $ 416,405 $ 416,641 The following table summarizes the changes in the carrying value of goodwill: (in thousands) Amount Balance at December 31, 2025 $ 416,641 Foreign currency translation adjustment ( 236 ) Balance at June 30, 2026 $ 416,405 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: June 30, 2026 Weighted-average Useful Life (in thousands, except weighted-average data) Gross Carrying Value Accumulated Amortization Net Carrying Value Intangible assets: ISO and referral partner relationships $ 223,420 $ ( 71,347 ) $ 152,073 14.3 Residual buyouts 178,229 ( 129,639 ) 48,590 6.0 Customer relationships 139,517 ( 101,389 ) 38,128 8.5 Merchant portfolios 83,350 ( 70,537 ) 12,813 6.5 Technology 63,574 ( 35,370 ) 28,204 8.7 Trade names 13,327 ( 7,602 ) 5,725 8.3 Money transmission licenses (1) 2,100 — 2,100 Total $ 703,517 $ ( 415,884 ) $ 287,633 9.5 (1) These assets have an indefinite useful life. 18 December 31, 2025 Weighted-average Useful Life (in thousands, except weighted-average data) Gross Carrying Value Accumulated Amortization Net Carrying Value Intangible assets: ISO and referral partner relationships $ 223,016 $ ( 63,701 ) $ 159,315 13.8 Residual buyouts 177,864 ( 119,861 ) 58,003 6.0 Customer relationships 139,463 ( 98,478 ) 40,985 8.8 Merchant portfolios 83,350 ( 68,787 ) 14,563 6.5 Technology 63,602 ( 32,684 ) 30,918 8.5 Trade names 13,329 ( 4,023 ) 9,306 10.6 Money transmission licenses (1) 2,100 — 2,100 Total $ 702,724 $ ( 387,534 ) $ 315,190 9.4 (1) These assets have an indefinite useful life. Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Amortization expense (1) $ 16,348 $ 10,018 $ 29,590 $ 19,933 (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. 8. Debt Obligations Outstanding debt obligations consisted of the following: (in thousands) June 30, 2026 December 31, 2025 2024 Credit Agreement 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 7.14 % 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 9.88 % and 9.98 % at June 30, 2026 and December 31, 2025, respectively 42,884 35,394 Total debt obligations 1,062,884 1,055,394 Less: current portion of long-term debt ( 3,112 ) — Less: unamortized debt discounts and deferred financing costs ( 15,087 ) ( 16,036 ) Long-term debt, net $ 1,044,685 $ 1,039,358 Interest Expense and Amortization of Deferred Loan Costs and Discounts Deferred financing costs and debt discounts are amortized using the effective interest method over the remaining term of the respective debt and are recorded as a component of interest expense. Unamortized deferred financing costs and debt discounts are included in long-term debt on the Company's Unaudited Consolidated Balance Sheets. 19 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 June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Interest expense (1)(2) $ 21,051 $ 23,054 $ 42,067 $ 46,230 (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 The 2024 Credit Agreement contains representations and warranties, financial and collateral requirements, mandatory payment events, events of default and affirmative and negative covenants, including without limitation, covenants that restrict among other things, the ability to create liens, pay dividends or distribute assets from the loan parties to the Company, merge or consolidate, dispose of assets, incur additional indebtedness, make certain investments or acquisitions, enter into certain transactions (including with affiliates) and to enter into certain leases. 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. If applicable, the maximum permitted Total Net Leverage Ratio is: 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. 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. 9. Income Taxes 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. Valuation Allowance for Deferred Income Tax Assets The Company considers all available positive and negative evidence to determine whether sufficient taxable income will be generated in the future to permit realization of the existing deferred tax assets. 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 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 20 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. 10. 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 June 30, 2026 and December 31, 2025, the Company has not issued any shares of preferred stock. Share Repurchase Program 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. The Company has purchased 1,309,374 shares for $ 5.8 million under this plan. On May 5, 2025, the Company's Board of Directors amended the program to increase the authorization to 5,000,000 shares of its outstanding common stock for a total of $ 40.0 million. There have been no shares repurchased under this plan since the year ended December 31, 2022. 11. Stock-based Compensation 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 June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Stock-based compensation expense $ 1,636 $ 1,597 $ 3,479 $ 3,081 Incentive units compensation expense 36 79 72 166 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 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 and six months ended June 30, 2026 and 2025, were not material. 2018 Plan 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, 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 The 2021 Employee Stock Purchase Plan ("ESPP") provides for up to 200,000 shares to be purchased under the plan. Shares issued under the plan may be authorized but unissued or reacquired shares of Common Stock. All non-executive employees 21 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. The offering period shall be for a period of three months and the first offering period began on January 10, 2022. The ESPP provides eligible employees the opportunity to purchase shares of the Company's Common stock at 95 % of the lesser of the fair value on the first and last trading day of each offering period. The ESPP was amended by shareholder approval on June 13, 2025, to increase the number of shares available by 200,000 . As of June 30, 2026, the Company had 156,437 shares available for issuance under the 2021 Stock Purchase Plan. Non-voting Incentive Units The Company issued non-voting incentive units to certain employees and partners in seven subsidiaries. These non-voting incentive units were determined to be equity and are accounted for under ASC 718, Compensation - Stock Compensation . The non-voting incentive units are either fully vested when granted, or vest according to the service period and/or performance measure noted in the grant agreement. As the non-voting incentive units are vested, they are recognized as NCI to the Company, who is the majority owner of the subsidiaries. 12. Commitments and Contingencies Minimum Annual Commitments with Third-party Processors The Company has multi-year agreements with third parties to provide certain payment processing services to the Company. The Company pays processing fees under these agreements that are based on the volume and dollar amounts of processed payment transactions. Some of these agreements have minimum annual requirements for processing volumes. 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) Twelve months ending June 30, 2027 $ 27,009 2028 30,078 2029 21,575 2030 18,625 2031 18,625 Thereafter 13,969 Total $ 129,881 Other Commitments 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. 22 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, 2027 $ 1,626 2028 1,754 2029 1,693 2030 815 2031 572 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 business acquisitions: (in thousands) Contingent Consideration Liabilities Deferred Consideration Liabilities December 31, 2025 $ 21,058 $ 7,296 Accretion 402 277 Payments — ( 96 ) 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 June 30, 2026, and December 31, 2025, the total contingent liabilities related to our asset purchases are $ 27.2 million. Legal Proceedings The Company is involved in certain legal proceedings and claims which arise in the ordinary course of business. In the opinion of the Company and based on consultations with internal and external counsel, the results of any of these matters, individually and in the aggregate, are not expected to have a material effect on the Company's results of operations, financial condition or cash flows. As more information becomes available, and the Company determines that an unfavorable outcome is probable on a claim and that the amount of probable loss that the Company will incur on that claim is reasonably estimable, the Company will record an accrued expense for the claim in question. If and when the Company records such an accrual, it could be material and could adversely impact the Company's results of operations, financial condition and cash flows. Concentration of Risks The Company's revenue is substantially derived from processing Visa and Mastercard bankcard transactions. Because the Company is not a member bank, to process these bankcard transactions, the Company maintains sponsorship agreements with member banks which require, among other things, that the Company abide by the by-laws and regulations of the card association. A majority of the Company's cash and restricted cash is held in certain FIs, substantially all of which is in excess of FDIC limits. The Company does not believe it is exposed to any significant credit risk from these transactions. 23 13. Fair Value Fair Value Disclosures The Company's contingent and deferred considerations were derived from business combinations occurring during the year ended December 31, 2025 (refer to Note 2. Acquisitions ). The contingent considerations are classified within Level 3 of the fair value hierarchy due to the uncertainty of the fair value measurement created by the absence of quoted market prices, the inherent lack of liquidity and unobservable inputs used to measure fair value which require judgment. The Company uses valuation techniques including Monte Carlo simulations to estimate fair value based on projection period and assumed growth rates. A change in inputs in the valuation techniques used might result in a significantly higher or lower fair value measurement than what is reported. 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 $ 28.9 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 Notes receivable are carried at amortized cost. 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 $ 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 Outstanding debt obligations (see Note 8. 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 $ 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 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 The Company has established a long-term incentive award for the Chief Executive Officer, which is subject to specified performance conditions. Upon satisfaction of these performance criteria, the Chief Executive Officer becomes entitled to a predetermined amount of incentive compensation, which may be settled either in cash or in shares of the Company's Common Stock. Consequently, this arrangement is accounted for as a liability award in accordance with applicable accounting standards. 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 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. 24 14. Segment Information The Company's three reportable segments included Merchant Solutions, Payables and Treasury Solutions: • Merchant Solutions : 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. • Payables : 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. • Treasury Solutions : Provides embedded finance and treasury solutions to customers to modernize legacy platforms and accelerate software partners' strategies to monetize payments. 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, 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, 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: 25 Three Months Ended June 30, 2026 (in thousands) Merchant Solutions Payables Treasury Solutions Total Revenue from external customers $ 174,008 $ 30,057 $ 58,191 $ 262,256 Intersegment revenue 1,770 373 2,328 4,471 175,778 30,430 60,519 266,727 Elimination of intersegment revenues ( 4,471 ) Total consolidated revenues 262,256 Less: Cost of revenue (excludes depreciation and amortization) (1) ( 135,955 ) ( 23,906 ) ( 6,954 ) Less: Other operating expenses (1)(2) ( 10,095 ) ( 3,461 ) ( 6,499 ) Add: Other segment items (3) 1,159 47 447 Segment Adjusted EBITDA $ 30,887 $ 3,110 $ 47,513 $ 81,510 Reconciliation of Segment Adjusted EBITDA to income before income taxes Segment Adjusted EBITDA $ 81,510 Adjustment for corporate items (4) ( 17,644 ) Intersegment revenue elimination ( 4,471 ) Depreciation and amortization ( 20,893 ) Interest expense ( 21,051 ) Selling, general and administrative (non-recurring) ( 1,531 ) Non-cash stock-based compensation ( 2,283 ) Income before income taxes $ 13,637 (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) $ 4,457 Other operating expenses (2) ( 25,907 ) Other items (5) 3,806 $ ( 17,644 ) (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, 2026 Merchant Solutions Payables Treasury Solutions Total Depreciation and amortization $ 13,094 $ 1,289 $ 5,297 $ 19,680 26 Six Months Ended June 30, 2026 (in thousands) Merchant Solutions Payables Treasury Solutions Total Revenue from external customers $ 334,286 $ 62,086 $ 115,442 $ 511,814 Intersegment revenue 3,278 785 3,917 7,980 337,564 62,871 119,359 519,794 Elimination of intersegment revenues ( 7,980 ) Total consolidated revenues 511,814 Less: Cost of revenue (excludes depreciation and amortization) (1) ( 261,052 ) ( 47,124 ) ( 12,928 ) Less: Other operating expenses (1)(2) ( 19,925 ) ( 7,276 ) ( 12,772 ) Add: Other segment items (3) 2,040 93 525 Segment Adjusted EBITDA $ 58,627 $ 8,564 $ 94,184 $ 161,375 Reconciliation of Segment Adjusted EBITDA to income before income taxes Segment Adjusted EBITDA $ 161,375 Adjustment for corporate items (4) ( 35,906 ) Intersegment revenue elimination ( 7,980 ) Depreciation and amortization ( 38,508 ) 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) ( 53,754 ) Other items (5) 9,889 $ ( 35,906 ) (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 27 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 Less: Cost of revenue (excludes depreciation and amortization) (1) ( 127,814 ) ( 17,751 ) ( 2,939 ) Less: Other operating expenses (1)(2) ( 8,367 ) ( 3,606 ) ( 4,457 ) Add: Other segment items (3) 700 94 296 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) ( 19,918 ) 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) ( 24,541 ) Other items (5) 3,518 $ ( 19,918 ) (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 28 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 Less: Cost of revenue (excludes depreciation and amortization) (1) ( 246,386 ) ( 34,376 ) ( 6,160 ) Less: Other operating expenses (1)(2) ( 16,580 ) ( 7,534 ) ( 9,066 ) Add: 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) ( 39,222 ) Intersegment revenue elimination ( 2,175 ) Depreciation and amortization ( 27,870 ) Interest expense ( 46,230 ) Debt modification and extinguishment expenses ( 38 ) Selling, general and administrative (non-recurring) ( 2,594 ) Non-cash stock-based compensation ( 4,792 ) Income before income taxes $ 25,820 (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) $ 2,170 Other operating expenses (2) ( 48,665 ) Other items (5) 7,273 $ ( 39,222 ) (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, 2025 Merchant Solutions Payables Treasury Solutions Total Depreciation and amortization $ 13,258 $ 2,523 $ 9,583 $ 25,364 29 15. Earnings per Common Share The following tables set forth the computation of the Company's basic and diluted earnings per common share: Three Months Ended June 30, Six Months Ended June 30, (in thousands except per share amounts) 2026 2025 2026 2025 Numerator: Net income attributable to common stockholders $ 9,863 $ 10,879 $ 19,623 $ 19,147 Weighted average shares outstanding 81,549 78,981 81,462 78,878 Effect of dilutive potential common shares 2,274 856 2,274 1,090 Adjusted Weighted average shares outstanding 83,823 79,837 83,736 79,968 Basic earnings per common share $ 0.12 $ 0.14 $ 0.24 $ 0.24 Diluted earnings per common share $ 0.12 $ 0.14 $ 0.23 $ 0.24 Anti-dilutive securities that were excluded from the Company's earnings per common share are as follows: Three Months Ended June 30, Six Months Ended June 30, (number of shares, in thousands) 2026 2025 2026 2025 Restricted stock awards (1) 36 26 40 — Liability-classified restricted stock units 380 — 277 — Outstanding stock option awards (1) 438 — 454 — Total 854 26 771 — (1) Granted under the 2018 Plan. 16. Subsequent Events 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 June 30, 2026. 30