What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-09 compared with 2025-03-03 · 302 added, 303 removed, 1220 unchanged (33% of the section changed)

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We have been monitoring the current economic environment in the U.S.

and globally – characterized by heightened inflation (including changes in wages), rising interest rates, supply chain issues, slower growth and recent banking system volatility.

Such macroeconomic conditions may continue to evolve in ways that are difficult to fully anticipate and may also include increased levels of unemployment and/or a recession.

and globally – characterized by inflationary pressures in certain cost categories (including changes in wages and technology-related expenses), elevated interest rate levels, tighter credit conditions, uneven economic growth and periodic volatility in financial markets.

Such macroeconomic conditions may continue to evolve in ways that are difficult to fully anticipate and may also include the potential for slowing growth, higher levels of unemployment, reduced consumer or commercial spending and/or recessionary conditions.

Some or all of these market factors have and could continue to adversely affect our payment volumes from the consumer loan market, the receivables management industry and consumer and commercial spending.

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Depreciation and amortization

Change in fair value of contingent consideration

Loss on business disposition

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Total other income (expense)

Income (loss) before income tax benefit (expense)

Income tax benefit (expense)

Net income (loss)

Loss before income tax benefit (expense)

Income tax benefit

Net loss attributable to non-controlling interest

Net income (loss) attributable to the Company

Weighted-average shares of Class A common stock outstanding - basic

Weighted-average shares of Class A common stock outstanding - diluted

Income (loss) per Class A share - basic

Income (loss) per Class A share - diluted

Net loss attributable to the Company

Weighted-average shares of Class A common stock outstanding - basic and diluted

Loss per Class A share - basic and diluted

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Total revenue was $313.0 million for the year ended December 31, 2024 and $296.6 million for the year ended December 31, 2023, an increase of $16.4 million or 5.5%.

This increase was the result of newly signed clients, the growth of our existing clients and political media spending associated with the 2024 election cycle in our media payments business.

Total revenue was $309.3 million for the year ended December 31, 2025 and $313.0 million for the year ended December 31, 2024, a decrease of $3.8 million or 1.2%.

This decrease was due to impacts from previously announced client losses and political media spending during 2024 associated with the 2024 election cycle in our media payments business, partially offset from newly signed clients and the growth of our existing clients.

Costs of Services

Costs of services were $77.2 million for the year ended December 31, 2025 and $71.6 million for the year ended December 31, 2024, an increase of $5.6 million or 7.8%.

This increase was the result of newly signed clients, the growth of our existing clients and political media spending associated with the 2024 election cycle in our media payments business.

This increase was the result of newly signed clients and the growth of our existing clients, partially offset from impacts of previously announced client losses and political media spending during 2024 associated with the 2024 election cycle in our media payments business.

Selling, General and Administrative

Selling, general and administrative expenses were $145.5 million for the year ended December 31, 2024 and $148.7 million for the year ended December 31, 2023, a decrease of $3.2 million or 2.1%, primarily due to a $3.0 million decrease in transaction expenses related to the disposition of BCS in the prior year period.

Selling, general and administrative expenses were $142.0 million for the year ended December 31, 2025 and $145.5 million for the year ended December 31, 2024, a decrease of $3.5 million or 2.4%, primarily due to a $6.1 million decrease in equity compensation expenses and $2.2 million decrease in compensation expenses, partially offset by a $3.4 increase in legal and other litigation fees and a $1.5 million increase in professional service fees.

Depreciation and Amortization

Depreciation and amortization expenses were $102.0 million for the year ended December 31, 2025 and $103.7 million for year ended December 31, 2024, a decrease of $1.7 million or 1.6%.

This decrease was driven by a decrease in amortization of non-compete agreements.

Loss on Business Disposition

We incurred a loss on business disposition of $10.0 million for the year ended December 31, 2023 related to the sale of Blue Cow Software (“BCS”).

This decrease was driven by a decrease in amortization of software and non-compete agreements.

Impairment Loss

We incurred an impairment loss of $75.8 million for the year ended December 31, 2023, due to a $75.7 million goodwill impairment loss related to the Business Payments segment and a $0.1 million trade name write-off related to Media Payments.

The fair value of the Business Payments reporting unit was primarily impacted by a change in the discount rate.

Intangible Assets and Note 9.

We incurred a non-cash impairment loss of $242.7 million during the year ended December 31, 2025, primarily due to a $241.7 million goodwill impairment loss related to the Consumer Payments segment.

The fair value of the Consumer Payments reporting unit was primarily impacted by a change in the discount rate and the decrease to comparable publicly traded companies’ multiples.

Goodwill for more information.

Interest Income

Interest income was $6.0 million for the year ended December 31, 2024 and $2.8 million for the year ended December 31, 2023, an increase of $3.2 million, due to higher average interest rates earned on our cash and cash equivalents.

Interest income was $4.1 million for the year ended December 31, 2025 and $6.0 million for the year ended December 31, 2024, a decrease of $1.9 million, due to lower average interest rates earned on our cash and cash equivalents and lower average cash balance during the second half of year primarily due to the use of cash to reduce the amount of 2026 Notes outstanding.

Interest Expense

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Gain on Debt Extinguishment

We incurred a gain of $13.1 million on extinguishment of debt for the year ended December 31, 2024, due to the repurchase of $220.0 million of 2026 Notes principal and net of a write-off of debt issuance costs relating to the repurchased principal.

We incurred a gain of $1.4 million and $13.1 million on extinguishment of debt for the year ended December 31, 2025 and 2024, respectively, due to the repurchase of 2026 Notes principal, net of a write-off of debt issuance costs relating to the repurchased principal.

Change in Fair Value of Tax Receivable Liability

We incurred a loss, related to accretion expense and fair value adjustment of the tax receivable liability of $14.5 million for the year ended December 31, 2024 compared to a net loss of $6.6 million for the year ended December 31, 2023, an increase of $7.9 million.

This increase was due to smaller fair value adjustments related to the tax receivable liability, primarily as a result of a smaller decrease to the discount rate, also referred to as the Early Termination Rate, used to determine the fair value of the liability.

Income Tax Benefit and Expense

We incurred a loss, related to accretion expense and fair value adjustment of the tax receivable liability of $13.5 million for the year ended December 31, 2025 compared to a net loss of $14.5 million for the year ended December 31, 2024, a decrease of $1.0 million.

This decrease was due to smaller fair value adjustments related to the tax receivable liability, primarily as a result of a smaller decrease to the discount rate, also referred to as the Early Termination Rate, used to determine the fair value of the liability.

Income Tax Benefit

The income tax benefit was $5.9 million for the year ended December 31, 2025, reflecting the expected income tax benefit on the loss generated over the same period.

This was a result of the operating loss incurred by the Company, primarily driven by the change in fair value of the tax receivable liability, impairment loss, loss on business disposition, stock-based compensation deductions and the amortization of assets acquired in the Business Combination and prior acquisitions.

The income tax benefit was $2.1 million for the year ended December 31, 2023, which reflected the expected income tax benefit on the loss generated over the same period.

This was a result of the operating loss incurred by the Company primarily offset by impairment loss of assets acquired in the Business Combination, the impact of taxes not being provided for certain non-controlling interests, and stock-based compensation expense net tax shortfall.

The income tax benefit was $0.6 million for the year ended December 31, 2024.

This was a result of the operating loss incurred by the Company, taxes imposed on earnings in certain state jurisdictions, stock based-compensation expense net shortfall, and the creation of Federal and state research and development credits and partially offset by certain state rate changes on deferred taxes, stock-based compensation expense net tax shortfall, and the differential in tax rates on foreign based earnings.

For results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, see Part II, Item 7 of our 2024 Form 10-K, which is incorporated herein by reference.

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Revenue for the Consumer Payments segment was $285.9 million for the year ended December 31, 2025 and $281.0 million for the year ended December 31, 2024, representing a $4.9 million or 1.8% year-over-year increase.

This increase was the result of newly signed clients and the growth of existing clients.

For the year ended December 31, 2023, revenues of approximately $1.2 million are attributable to BCS.

This increase was the result of newly signed clients and the growth of existing clients, partially offset from impacts from previously announced client losses.

Gross profit for the Consumer Payments segment was $223.8 million for the year ended December 31, 2025 and $223.1 million for the year ended December 31, 2024, representing a $0.6 million or 0.3% year-over-year increase.

This increase was the result of newly signed clients and the growth of existing clients.

For the year ended December 31, 2023, gross profit of approximately $1.2 million is attributable to BCS.

This increase was the result of newly signed clients and the growth of existing clients, partially offset from impacts from previously announced client losses.

Business Payments

Revenue for the Business Payments segment was $52.9 million for the year ended December 31, 2024 and $38.1 million for the year ended December 31, 2023, representing a $14.9 million or 39.1% year-over-year increase.

This increase was the result of newly signed clients, the growth of existing clients and political media spending associated with the 2024 election cycle in our media payments business.

Gross profit for the Business Payments segment was $39.1 million for the year ended December 31, 2024 and $28.0 million for the year ended December 31, 2023, representing a $11.2 million or 40.0% year-over-year increase.

This increase was the result of newly signed clients, the growth of existing clients and political media spending associated with the 2024 election cycle in our media payments business.

Revenue for the Business Payments segment was $48.4 million for the year ended December 31, 2025 and $52.9 million for the year ended December 31, 2024, representing a $4.5 million or 8.5% year-over-year decrease.

This decrease was the result of the growth from newly signed clients and existing clients being more than offset from impacts from previously announced client losses and political media spending during 2024 associated with the 2024 election cycle in our media payments business.

Gross profit for the Business Payments segment was $33.3 million for the year ended December 31, 2025 and $39.1 million for the year ended December 31, 2024, representing a $5.8 million or 14.9% year-over-year decrease.

For revenue and gross profit by segments for the year ended December 31, 2024 compared to the year ended December 31, 2023, see Part II, Item 7 of our 2024 Form 10-K, which is incorporated herein by reference.

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This report includes certain non-GAAP financial measures that our management uses to evaluate our operating business, measure our performance and make strategic decisions.

Adjusted EBITDA is a non-GAAP financial measure that represents net income prior to interest expense, tax expense, depreciation and amortization, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as loss on business disposition, gain on extinguishment of debt, non-cash change in fair value of contingent consideration, non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation charges, transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges.

Adjusted Net Income is a non-GAAP financial measure that represents net income prior to amortization of acquisition-related intangibles, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as loss on business disposition, gain on extinguishment of debt, non-cash change in fair value of contingent consideration, non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation expense, transaction expenses, restructuring and other strategic initiative costs, other non-recurring charges, non-cash interest expense and net of tax effect associated with these adjustments.

Adjusted EBITDA is a non-GAAP financial measure that represents net income prior to interest expense, tax expense, depreciation and amortization, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as loss on business disposition, gain on extinguishment of debt, non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation charges, transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges.

Adjusted Net Income is a non-GAAP financial measure that represents net income prior to amortization of acquisition-related intangibles, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as loss on business disposition, gain on extinguishment of debt, non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation expense, transaction expenses, restructuring and other strategic initiative costs, other non-recurring charges, non-cash interest expense and net of tax effect associated with these adjustments.

Adjusted Net Income is adjusted to exclude amortization of all acquisition-related intangibles as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions.

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Depreciation and amortization

Change in fair value of contingent consideration

Loss on business disposition

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Total other income (expense)

Income (loss) before income tax benefit (expense)

Income tax benefit (expense)

Net income (loss)

Loss before income tax benefit (expense)

Income tax benefit

Interest income

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Depreciation and amortization (a)

Income tax (benefit) expense

Income tax benefit

Loss on business disposition (h)

Gain on extinguishment of debt (i)

Non-cash change in fair value of contingent consideration (j)

Non-cash impairment loss (b)

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Depreciation and amortization

Change in fair value of contingent consideration

Loss on business disposition

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Total other income (expense)

Income (loss) before income tax benefit (expense)

Income tax benefit (expense)

Net income (loss)

Amortization of acquisition-related intangibles (k)

Loss before income tax benefit (expense)

Income tax benefit

Amortization of acquisition-related intangibles (j)

Loss on business disposition (h)

Gain on extinguishment of debt (i)

Non-cash change in fair value of contingent consideration (j)

Non-cash impairment loss (b)

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Other non-recurring charges (g)

Non-cash interest expense (l)

Pro forma taxes at effective rate (m)

Non-cash interest expense (k)

Pro forma taxes at effective rate (l)

Adjusted Net Income

Shares of Class A common stock outstanding (on an as-converted basis) (n)

Shares of Class A common stock outstanding (on an as-converted basis) (m)

Adjusted Net Income per share

(a) See footnote (k) for details on our amortization and depreciation expenses.

(b) For the year ended December 31, 2023, reflects non-cash goodwill impairment loss related to the Business Payments segment and non-cash impairment loss related to a trade name write-off of Media Payments.

For the year ended December 31, 2022, reflects non-cash impairment loss related to trade names write-offs of BillingTree and Kontrol.

(a) See footnote (j) for details on our amortization and depreciation expenses.

(b) For the year ended December 31, 2025, reflects non-cash goodwill impairment loss primarily related to the Consumer Payments segment and non-cash impairment loss related to operating lease ROU assets.

For the year ended December 31, 2023, reflects non-cash goodwill impairment loss related to the Business Payments segment and non-cash impairment loss related to a trade name write-off of Media Payments.

(c) For the year ended December 31, 2025 and 2024, reflects the changes in management’s estimates of the fair value of the liability relating to the TRA.

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(d) Represents compensation expense associated with equity compensation plans.

(e) Primarily consists of (i) during the year ended December 31, 2024, professional service fees incurred in connection with prior transactions, (ii) during the year ended December 31, 2023, professional service fees and other costs incurred in connection with the disposition of BCS and (iii) during the year ended December 31, 2022, professional service fees and other costs incurred in connection with the acquisitions of BillingTree, Kontrol and Payix.

(f) Reflects costs associated with reorganization of operations, consulting fees related to our processing services and other operational improvements, including restructuring and integration activities related to our acquired businesses, that were not in the ordinary course during the years ended December 31, 2024, 2023 and 2022.

Additionally, for the year ended December 31, 2022, reflects one-time severance payments.

(g) For the year ended December 31, 2024, reflects one-time processing settlements, franchise taxes and other non-income based taxes, non-recurring legal and other litigation expenses and payments made to third-parties in connection with our IT security and personnel.

(e) Primarily consists of (i) during the year ended December 31, 2025 and 2024, professional service fees incurred in connection with prior transactions and (ii) during the year ended December 31, 2023, professional service fees and other costs incurred in connection with the disposition of BCS.

(g) For the year ended December 31, 2025, reflects franchise taxes and other non-income based taxes, non-recurring legal and other litigation expenses and payments made to third-parties in connection with our IT security and

For the year ended December 31, 2024, reflects one-time processing settlements, franchise taxes and other non-income based taxes, non-recurring legal and other litigation expenses and payments made to third-parties in connection with our IT security and personnel.

For the year ended December 31, 2023, reflects payments made to third-parties in connection with an expansion of our personnel, franchise taxes and other non-income based taxes and one-time payments to certain partners.

For the year ended December 31, 2022, reflects one-time payments to certain clients and partners, payments made to third-parties in connection with a significant expansion of our personnel, franchise taxes and other non-income based taxes, other payments related to COVID-19 and non-cash rent expense.

(h) Reflects the loss recognized related to the disposition of BCS.

(i) Reflects a gain on the repurchase of 2026 Notes principal, net of a write-off of debt issuance costs relating to the repurchased principal.

(j) Reflects the changes in management’s estimates of future cash consideration to be paid in connection with prior acquisitions from the amount estimated as of the most recent balance sheet date.

(k) For the years ended December 31, 2024, 2023 and 2022, reflects amortization of client relationships, non-compete agreement, software, and channel relationship intangibles acquired through the Business Combination, and client relationships, non-compete agreement, and software intangibles acquired through our acquisitions of TriSource, APS, Ventanex, cPayPlus, CPS, BillingTree, Kontrol and Payix.

(j) Reflects amortization of client relationships, non-compete agreement, software, and channel relationship intangibles acquired through the Business Combination, and client relationships, non-compete agreement, and software intangibles acquired through our acquisitions of TriSource, APS, Ventanex, cPayPlus, CPS, BillingTree, Kontrol and Payix.

This adjustment excludes the amortization of other intangible assets which were acquired in the regular course of business, such as capitalized internally developed software and purchased software.

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Any future acquisitions may result in the amortization of additional intangibles.

(l) Represents amortization of non-cash deferred debt issuance costs.

(m) Represents pro forma income tax adjustment effect associated with items adjusted above.

(n) Represents the weighted average number of shares of Class A common stock outstanding (on an as-converted basis assuming conversion of outstanding Post-Merger Repay Units) for the years ended December 31, 2024, 2023 and 2022.

(k) Represents amortization of non-cash deferred debt issuance costs.

(l) Represents pro forma income tax adjustment effect associated with items adjusted above.

(m) Represents the weighted average number of shares of Class A common stock outstanding (on an as-converted basis assuming conversion of outstanding Post-Merger Repay Units) for the years ended December 31, 2025, 2024 and 2023.

These numbers do not include any shares issuable upon conversion of our convertible senior notes.

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Shares of Class A common stock outstanding (on an as-converted basis)

Adjusted EBITDA for the years ended December 31, 2024 and 2023 was $140.8 million and $126.8 million, respectively, representing a 11.0% year-over-year increase.

Adjusted Net Income for the years ended December 31, 2024 and 2023 was $87.8 million and $84.9 million, respectively, representing a 3.4% year-over-year increase.

Our net income (loss) attributable to the Company for the years ended December 31, 2024 and 2023 was ($10.2) million and ($110.5) million, respectively, representing a 90.8% year-over-year improvement in our profitability.

The increases in Adjusted EBITDA, Adjusted Net Income and improvement in net income (loss) attributable to the Company for the year ended December 31, 2024 were primarily due to the organic growth of our business from newly signed clients, the growth of existing clients, political media spending associated with the 2024 election cycle in our media payments business and cost savings initiatives that reduced both cost of services and selling, general and administrative expenses as a percentage of revenue.

Adjusted EBITDA for the years ended December 31, 2025 and 2024 was $128.6 million and $140.8 million, respectively, representing a 8.7% year-over-year decrease.

Adjusted Net Income for the years ended December 31, 2025 and 2024 was $74.4 million and $87.8 million, respectively, representing a 15.3% year-over-year decrease.

Our net loss attributable to the Company for the years ended December 31, 2025 and 2024 was $256.7 million and $10.2 million, respectively, representing a 2427.8% year-over-year increase.

The decreases in Adjusted EBITDA and Adjusted Net Income and increase in net loss attributable to the Company for the year ended December 31, 2025 were primarily due to the organic growth of our business from newly signed clients, the growth of existing clients and cost savings initiatives being more than offset from impacts from previously announced client losses and political media spending during 2024 associated with the 2024 election cycle in our media payments business.

In addition, the increase in net loss attributable to the Company for the year ended December 31, 2025 was impacted by the goodwill impairment loss.

For discussion on Adjusted EBITDA, Adjusted Net income, and net income (loss) attributable to the Company for the year ended December 31, 2024 compared to the year ended December 31, 2023, see Part II, Item 7 of the Company’s 2024 Form 10-K.

We have experienced in the past, and may continue to experience, seasonal fluctuations in our volumes and revenues as a result of consumer spending patterns.

Volumes and revenues during the first quarter of the calendar year tend to increase in comparison to the remaining three quarters of the calendar year on a same store basis.

We have experienced in the past, and may continue to experience, seasonal fluctuations in our revenues as a result of consumer spending and political media spending patterns.

Revenues during the first quarter of the calendar year tend to increase in comparison to the remaining three quarters of the calendar year.

This increase is due to consumers’ receipt of tax refunds and the increases in repayment activity levels that follow.

Operating expenses show less seasonal fluctuation, with the result that net income is subject to the similar seasonal factors as our volumes and revenues.

In addition, Business Payments revenue from clients in our media payments business is cyclical.

Revenue connected to political advertising spending increases significantly during the third and fourth quarter of election years, such as the mid-term and presidential election cycles.

Operating expenses show less seasonal fluctuation, with the result that net income is subject to the similar seasonal factors as our revenues.

Liquidity and Capital Resources

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On May 16, 2022, our board of directors approved a share repurchase program under which we may repurchase up to $50 million of our outstanding Class A common stock (the “Share Repurchase Program”).

On May 8, 2025, our board of directors approved the increase of its authorized Share Repurchase Program to up to $75 million.

The Share Repurchase Program has no expiration date but may be modified, suspended or discontinued at any time at our discretion.

During the year ended December 31, 2024, we repurchased 158,496 shares for a total of approximately $1.3 million under the Share Repurchase Program.

As of December 31, 2024, we have $36.2 million remaining capacity under the Share Repurchase Program.

In addition, in July 2024 we used approximately $40.0 million of proceeds from the offering of 2029 Notes to repurchase approximately 3.9 million shares of Class A common stock.

During the year ended December 31, 2025, we repurchased 7,883,156 shares for a total of approximately $38.3 million under the Share

Repurchase Program.

As of December 31, 2025, we had approximately $23.0 million remaining capacity under the Share Repurchase Program.

The following table presents a summary of cash flows from operating, investing and financing activities for the periods indicated:

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Net cash used in investing activities was $42.0 million for the year ended December 31, 2025, due to the capitalization of software development activities.

Net cash used in investing activities was $24.1 million for the year ended December 31, 2023, due to the capitalization of software development activities and purchases of intangible assets, partially offset by cash received from the disposition of BCS.

Net cash used in investing activities was $44.9 million for the year ended December 31, 2024, due to the capitalization of software development activities.

Cash Flow from Financing Activities

Net cash used in financing activities was $130.2 million for the year ended December 31, 2025, due to the repayments of the 2026 Notes, treasury shares repurchase, shares repurchased under the Share Repurchase Program, a payment under the TRA and the payments for tax withholding related to shares vesting under the Incentive Plan and ESPP.

Net cash used in financing activities was $12.7 million for the year ended December 31, 2024, due to the 2026 Notes repurchased, shares repurchased under the Share Repurchase Program and purchase of capped calls related to issuance of the 2029 Notes, offset partially by proceeds from the issuance of the 2029 Notes.

Net cash used in financing activities was $28.9 million for the year ended December 31, 2023, due to the repayment of the outstanding revolving credit facility balance, shares repurchased under the Incentive Plan, ESPP and Share Repurchase Program, as well as the CPS earnout payment.

Net cash used in financing activities was $17.5 million for the year ended December 31, 2022, due to the shares repurchased under the Incentive Plan, ESPP and Share Repurchase Program, as well as the Ventanex earnout payment.

Amended Credit Agreement

In February 2021, we entered into the Amended Credit Agreement, which established a 125.0 million senior secured revolving credit facility in favor of Hawk Parent.

On December 29, 2021, we increased our then existing senior secured credit facilities by $60.0 million to provide for a $185.0 million revolving credit facility pursuant to an amendment to the Amended Credit Agreement.

On February 9, 2023, we further amended the Amended Credit Agreement to replace LIBOR with term SOFR as the interest rate benchmark.

On February 28, 2023, we repaid in full the entire amount of $20.0 million of the outstanding revolving credit facility.

Our Amended Credit Agreement provided for a $185.0 million revolving credit facility in favor of Hawk Parent.

On February 9, 2023, we amended the Amended Credit Agreement to replace LIBOR with term SOFR as the interest rate benchmark.

On February 28, 2023, we repaid in full the entire amount of $20.0 million of the outstanding revolving credit facility at that time.

The undrawn capacity of the existing revolving credit facility under the Amended Credit Agreement became $185.0 million after the repayment.

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On July 10, 2024, we entered into the Second Amended Credit Agreement with certain financial institutions, as lenders, and Truist Bank, as administrative agent.

The Second Amended Credit Agreement amends and restates the Amended Credit Agreement, dated as of February 3, 2021.

The Second Amended Credit Agreement amended and restated the Amended Credit Agreement.

The Second Amended Credit Agreement establishes a $250.0 million senior secured revolving credit facility.

This facility matures on the earlier of (a) July 10, 2029, (b) the date that is 91 days prior to the maturity date of the 2026 Notes (subject to certain exceptions for adequate liquidity) and (c) the date that is 91 days prior to the maturity date of the 2029 Notes (subject to certain exceptions for adequate liquidity).

This facility matures on the earlier of (a) July 10, 2029 or (b) the date that is 91 days prior to the maturity date of the 2029 Notes (subject to certain exceptions for adequate liquidity).

The maturity date may be extended, subject to certain terms and conditions.

As of December 31, 2024, the Second Amended Credit Agreement provides for a revolving credit facility of $250.0 million.

As of December 31, 2025, the Second Amended Credit Agreement provided for a revolving credit facility of $250.0 million.

As of December 31, 2025, we had $0 million drawn against the revolving credit facility.

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Borrowings to the financial statements in Item 8 of this Annual Report on Form 10-K for more information.

On January 26, 2026, we borrowed $110.0 million under our revolving credit facility pursuant to the Second Amended Credit Agreement.

Outstanding borrowing under the revolving credit facility will accrue interest at an adjusted SOFR rate plus a margin as provided in the Second Amended Credit Agreement.

Convertible Senior Notes

On January 19, 2021, we issued $440.0 million in aggregate principal amount of 0.00% Convertible Senior Notes due 2026 in a private placement (the “Notes Offering”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended.

On January 19, 2021, we issued $440.0 million in aggregate principal amount of 0.00% Convertible Senior Notes due 2026 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended.

$40.0 million in aggregate principal amount of such 2026 Notes were sold in the 2026 Notes offering in connection with the full exercise of the initial purchasers’ option to purchase such additional 2026 Notes pursuant to the purchase agreement.

Upon conversion, the Company may choose to pay or deliver cash, shares of the Company’s Class A Common Stock, or a combination of cash and shares of the Company’s Class A Common Stock.

The 2026 Notes will mature on February 1, 2026, unless earlier converted, repurchased or redeemed.

The 2026 Notes matured on February 1, 2026.

On July 8, 2024, we used approximately $200.0 million of proceeds from the offering of 2029 Notes and approximately $5.1 million of cash on hand to repurchase $220.0 million in aggregate principal amount of the 2026 Notes in connection with the 2029 Notes offering.

On August 22, 2025, we repurchased $73.5 million in aggregate principal amount of the 2026 Notes.

On or about February 2, 2026, we repaid $146.5 million of the remaining aggregate principal amount of the 2026 Notes using the $110.0 million borrowing under the revolving credit facility and approximately $36.5 million of cash on hand.

The 2026 Notes were satisfied and discharged in full.

On July 8, 2024, we issued $287.5 million aggregate principal amount of 2.875% Convertible Senior Notes due 2029 (the “2029 Notes”) in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended.

$27.5 million aggregate principal amount of the 2029 Notes were sold in connection with the full exercise of the initial purchasers’ option to purchase such additional 2029 Notes offering pursuant to the purchase agreement.

We will settle conversions of the 2029 Notes by paying cash up to the aggregate principal amount of the 2029 Notes to be converted and cash, shares of Class A common stock or a combination of cash and shares, at our election, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the 2029 Notes being converted.

We will settle any conversions of the 2029 Notes by paying cash up to the aggregate principal amount of the 2029 Notes to be converted and cash, shares of Class A common stock or a combination of cash and shares, at our election, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the 2029 Notes being converted.

The 2029 Notes bear interest at a fixed rate of 2.875% per year, payable semiannually in arrears on January 15 and July 15 of each year, beginning on January 15, 2025.

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This evaluation is performed separately for each performance obligation identified.

Business Combinations

We account for business combinations using the acquisition method of accounting.

Under the acquisition method, the consolidated financial statements reflect the operations of an acquired business starting from the closing date of the acquisition.

All assets acquired and liabilities assumed are recorded at fair value as of the acquisition date.

We allocate the purchase price of an acquired business to the fair values of the tangible and identifiable intangible assets acquired and liabilities assumed, with any excess purchase price recorded as goodwill.

Contingent consideration, if any, is included within the purchase price and is recognized at its fair value on the acquisition date.

The application of the acquisition method of accounting for business combinations and determination of fair value requires management to make judgments and may involve the use of significant estimates, including assumptions related to estimated future revenues, growth rates, cash flows, and discount rates, among other items.

Management generally evaluates fair value at acquisition using three valuation techniques–the replacement cost, market and income methods–and weights the valuation methods based on what is most appropriate in the circumstances.

The process of assigning fair values, particularly to acquired intangible assets, is highly subjective.

Management also typically utilizes third party valuation specialists to assist in the determination of the fair value of assets acquired and liabilities assumed.

Fair value estimates are based on assumptions believed to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

If the actual results differ from the estimates and judgments used, the amounts recorded in the consolidated financial statements may be exposed to potential impairment of the intangible assets and goodwill as discussed in the “Impairment” section below.

The determination of fair value is considered a critical accounting estimate because the valuation techniques mentioned use significant estimates and assumptions, including projected future revenues, the expected economic life of the asset, tax rates and a discount rate that reflects the level of risk associated with the future earnings attributable to the asset.

During the measurement period, which is up to one year from the acquisition date, adjustments to the assets acquired and liabilities assumed may be recorded, with the corresponding offset to goodwill.

We review goodwill and indefinite-lived intangible assets for impairment annually in the fourth quarter of our fiscal year, or more frequently as warranted by events or changes in circumstances which indicate that the carrying amount may not be recoverable.

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If, based on the results of the qualitative assessment, it is concluded that it is not more likely than not that the fair value of a reporting unit or indefinite-lived asset exceeds its carrying value, a quantitative test is performed.

Under the quantitative test, we compare the carrying value of the reporting unit or indefinite-lived intangible asset to its fair value, which we estimate using a discounted cash flow analysis or by comparison to the market values of similar assets.

Under the quantitative test, we compare the carrying value of the

reporting unit or indefinite-lived intangible asset to its fair value, which we estimate using a discounted cash flow analysis or by comparison to the market values of similar assets.

If the carrying value exceeds its fair value, we record an impairment charge equal to the excess of the carrying value over the related fair value.

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carrying amounts of existing assets and liabilities and their respective tax bases, which will result in taxable or deductible amounts in the future.

Under ASC 740, Income Taxes, deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to net operating losses, tax credits, and temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, which will result in taxable or deductible amounts in the future.

Our income tax expense/benefit, deferred tax assets and tax receivable liability reflect management’s best assessment of estimated current and future taxes.

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As of December 31, 2025, we had convertible senior debt of $426.5 million, net of deferred issuance costs, outstanding.

As of December 31, 2023, we had convertible senior debt of $434.2 million, net of deferred issuance costs, and revolving credit facility borrowings of $18.2 million, net of deferred issuance costs, outstanding.

The borrowings under the Second Amended Credit Agreement accrue interest at either base rate, described above under “Liquidity and Capital Resources — Indebtedness ,” plus a margin of 0.75% to 1.75% or at an adjusted SOFR rate plus a margin of 1.75% to 2.75% under the Second Amended Credit Agreement, in each case depending on the total net leverage ratio, as defined in the Second Amended Credit Agreement.

As of December 31, 2024, we had convertible senior debt of $496.8 million, net of deferred issuance costs, net of deferred issuance costs, outstanding.

The borrowings under the Second Amended Credit Agreement accrue interest at either

base rate, described above under “Liquidity and Capital Resources — Indebtedness ,” plus a margin of 0.75% to 1.75% or at an adjusted SOFR rate plus a margin of 1.75% to 2.75% under the Second Amended Credit Agreement, in each case depending on the total net leverage ratio, as defined in the Second Amended Credit Agreement.

We may incur additional borrowings from time to time for general corporate purposes, including working capital and capital expenditures.

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Accrued expenses

Current maturities of long-term debt, net

Current operating lease liabilities

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Total current liabilities

Long-term debt

Long-term debt, net

Noncurrent operating lease liabilities

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Depreciation and amortization

Change in fair value of contingent consideration

Loss on business disposition

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Total other income (expense)

Income (loss) before income tax benefit (expense)

Income tax benefit (expense)

Net income (loss)

Loss before income tax benefit

Income tax benefit

Net loss attributable to

non-controlling interests

Net income (loss) attributable to the Company

Income (loss) per Class A share attributable to the Company:

Net loss attributable to the Company

Loss per Class A share attributable to the Company:

Basic and diluted

Weighted-average shares outstanding:

Basic and diluted

See accompanying notes to consolidated financial statements.

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($ in thousands)

Net income (loss)

Other comprehensive (loss) income, before tax

Foreign currency translation adjustments

Total other comprehensive (loss) income, before tax

Income tax related to items of other comprehensive income:

Tax benefit on foreign currency translation adjustments

Total income tax benefit related to items of other comprehensive income

Total other comprehensive income (loss), net of tax

Total comprehensive income (loss)

Other comprehensive income (loss), net of tax

Comprehensive loss attributable to non-controlling interests

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Balance at December 31, 2022

Issuance of new shares

Exchange of Post-Merger Repay Units

Release of share awards vested under Incentive Plan

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Valuation allowance on Ceiling Rule DTA

Net income (loss)

Other comprehensive income

Balance at December 31, 2023

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Stock-based compensation

Stock options exercised

Purchase of capped calls related to issuance of the 2029 Notes

Tax distribution from Hawk Parent

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Treasury shares repurchased

Stock options exercised

Stock-based compensation

Purchase of capped calls related to issuance of the 2029 Notes

Tax distribution from Hawk Parent

Valuation allowance on Ceiling Rule DTA

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Cash flows from operating activities

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

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Fair value change in tax receivable agreement liability

Fair value change in contingent consideration

Impairment loss

Payments of contingent consideration in excess of acquisition date fair value

Deferred tax expense (benefit)

Deferred tax benefit

Change in accounts receivable, net

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Change in operating lease ROU assets

Change in other assets

Change in accounts payable

Change in related party payable

Change in accrued expenses and other

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Net cash used in financing activities

Increase in cash, cash equivalents and restricted cash

(Decrease) increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

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Cash paid during the year for:

Cash and cash equivalents

Year Ended December 31,

($ in thousands)

Income taxes, net of refunds received

Reconciliation of cash, cash equivalents and restricted cash in the Consolidated Balance Sheets to the amounts shown in the Consolidated Statements of Cash Flows:

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The Company’s legacy business was founded as M & A Ventures, LLC, a Georgia limited liability company doing business as REPAY:

Realtime Electronic Payments (“REPAY LLC”), in 2006 by current executives John Morris and Shaler Alias.

Hawk Parent was formed in 2016 in connection with the acquisition of a majority interest in the successor entity of REPAY LLC and its subsidiaries by certain investment funds sponsored by, or affiliated with, Corsair Capital LLC (“Corsair”).

Realtime Electronic Payments (“REPAY LLC”), in 2006.

Hawk Parent was formed in 2016 in connection with the acquisition of a majority interest in the successor entity of REPAY LLC and its subsidiaries.

Business Overview

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The automotive loans vertical includes a diversified client base across the entire credit spectrum.

The Company’s receivables management vertical relates to consumer loan collections, which typically enter the receivables management process due to delinquency on credit card bills or as a result of major life events, such as job loss or major medical issues.

The Company’s receivables management vertical relates to consumer debt collections, which typically enter the receivables management process due to delinquency on credit card bills or as a result of major life events, such as job loss or major medical issues.

The business-to-business vertical relates to transactions occurring between a wide variety of enterprise clients, many of which operate in the retail automotive, education, field services, governments and municipalities, healthcare, media, HOA management and hospitality industries.

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The Company has successfully integrated its technology solutions with numerous, widely-used enterprise management systems in the verticals that it serves, which makes its platform a more compelling choice for the businesses that use them.

Moreover, the Company’s relationships with its software integration

Moreover, the Company’s relationships with its software integration partners help it to develop deep industry knowledge regarding trends in client needs.

The Company’s integrated model fosters

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

partners help it to develop deep industry knowledge regarding trends in client needs.

The Company’s integrated model fosters long-term relationships with its clients, which supports its volume retention rates that the Company believes are above industry averages.

long-term relationships with its clients, which supports its volume retention rates that the Company believes are above industry averages.

As of December 31, 2025, the Company maintained approximately 294 integrations with various software providers.

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RCS is the Company’s proprietary clearing and settlement platform through which the Company markets customizable payment processing programs to other Independent Sales Organizations (“ISOs”) and payment facilitators.

The strategic vertical markets served by the Consumer Payments segment primarily include personal loans, auto motive loans, receivables management, credit unions, mortgage servicing, consumer healthcare and diversified retail.

The strategic vertical markets served by the Consumer Payments segment primarily include personal loans, automotive loans, receivables management, credit unions, mortgage servicing, consumer healthcare and diversified retail.

The Consumer Payments segment represented approximately 85 % of the Company’s total revenue after any intersegment eliminations for the year ended December 31, 2025.

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Notes to Consolidated Financial Statements

Reclassifications

The Company changed its presentation for Restricted cash to Current restricted cash and Noncurrent restricted cash within the Consolidated Balance Sheets.

Prior period amounts have been revised to conform to the current presentation.

The Company changed its presentation for Interest income (expense), net to Interest income and Interest expense within the Consolidated Statements of Operations.

Prior period amounts have been revised to conform to the current presentation.

Segment Reporting

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The amount of cash that the Company considers to be available for general purposes was $ 115.7 million and $ 189.5 million as of December 31, 2025 and 2024, respectively.

As of December 31, 2024 , approximately 91 % of the Company’s total balance of cash and cash equivalents was held within a small group of financial institutions, primarily large money center banks.

As of December 31, 2025, approximate ly 93 % of the Company’s total balance of cash and cash equivalents was held within a small group of financial institutions, primarily large money center banks.

Although the Company currently believes that the financial institutions with whom the Company does business will be able to fulfill their commitments to the Company, there is no assurance that those institutions will be able to continue to do so.

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Noncurrent restricted cash consists of collateral reserve funds (“Reserves”).

Reserves are held on deposit by the Company’s sponsor banks to secure potential merchant chargebacks or other similar losses or obligations.

Reserves are he ld on deposit by the Company’s sponsor banks to secure potential merchant chargebacks or other similar losses or obligations.

Accounts Receivable

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For accounts receivable outstanding more than 90 days, the Company evaluates and assesses whether the loss reserve percentage requires adjustment for reasonable and supportable forecast of relevant economic factors.

For the year ended December 31, 2024 , the Company’s estimated credit losses on accounts receivable was $ 1.1 million.

For the years ended 2023 and 2022 , the Company’s estimated credit losses on accounts receivable was immaterial.

For the years ended December 31, 2025 and 2023, the Company’s estimated credit losses on accounts receivable were immaterial.

For the year ended December 31, 2024 , the Company’s estimated credit losses on accounts receivable were $ 1.1 million.

Concentration of Credit Risk

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Basic earnings per share of Class A common stock is computed by dividing net income (loss) attributable to the Company by the weighted average number of shares of Class A common stock outstanding during the period.

Diluted earnings

Diluted earnings per share of Class A common stock is computed by dividing net income attributable to the Company, by the weighted average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive elements, including the assumed exchange of all limited liability company interests of Hawk Parent (“Post-Merger Repay Units”), unvested share-based awards, outstanding stock options, outstanding ESPP (“Employee Stock Purchase Program”) purchase rights and the Company’s convertible senior notes.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

per share of Class A common stock is computed by dividing net income attributable to the Company, by the weighted average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive elements, including the assumed exchange of all limited liability company interests of Hawk Parent (“Post-Merger Repay Units”), unvested share-based awards, outstanding stock options, outstanding ESPP (“Employee Stock Purchase Program”) purchase rights and the Company’s convertible senior notes.

Property and Equipment

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These assumptions require significant judgment, and actual results may differ from assumed and estimated amounts.

No impairments were recognized during the year ended December 31, 2024.

During the year ended December 31, 2023, the Company recognized an impairment of $ 0.1 million related to a trade name write-off of Media Payments, as the Company strategically phased out the trade name of the acquired business.

During the year ended December 31, 2022, the Company recognized impairments of $ 8.1 million related to write-offs of certain trade names, as the Company strategically phased out the trade names of several acquired business, which included BillingTree, Kontrol and Payix.

No impairments were recognized during the years ended December 31, 2025 and 2024.

During the year ended December 31, 2023, the Company recognized an impairmen t of $ 0.1 million related to a trade name write-off of Media Payments, as the Company strategically phased out the trade name of the acquired business.

Goodwill represents the excess of purchase price over tangible and intangible assets acquired less liabilities assumed arising from business combinations.

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Relative fair value is estimated using a combination of a discounted cash flow (“DCF”) analysis and market valuation approach.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

The Company performs a qualitative goodwill assessment at the reporting unit level at least annually, or more frequently as events occur or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount.

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If the Company elects to bypass the qualitative analysis, or concludes from the Company’s qualitative analysis that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test is performed by comparing the fair value of each reporting unit with its carrying amount.

If the fair value is greater than the carrying amount, then the reporting unit’s goodwill is deemed not to be impaired.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

fair value is greater than the carrying amount, then the reporting unit’s goodwill is deemed not to be impaired.

If the fair value is less than the carrying amount, a non-cash impairment loss is recognized for the amount by which a reporting unit’s carrying amount exceeds its fair value, without exceeding the total amount of goodwill allocated to that reporting unit.

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The Company applies comparable publicly traded companies’ multiples (e.g., revenue or Adjusted EBITDA) to the Company’s reporting units’ financial forecasts when using market multiples under the market approach.

The Company determined that no impairment of goodwill existed for either the Consumer Payments or Business Payments segment as of the last testing date, December 31, 2024.

Future impairment reviews may require write downs in the Company’s goodwill and could have a material adverse impact on the Company’s operating results for the periods in which such write downs occur.

After considering the decline in the Company’s stock price during the second quarter of 2025, the Company considered goodwill impairment triggering events and determined that goodwill was more likely than not impaired.

The Company performed a quantitative analysis using both a discounted cash flow method and a market comparable method of estimating fair value and concluded that goodwill associated with the Consumer Payments reporting unit was impaired as of June 30, 2025.

The fair value of the Consumer Payments reporting unit was primarily impacted by a change in the discount rate and the decrease to comparable company multiples.

The Company recognized an impairment loss of $ 103.2 million on goodwill related to the Consumer Payments segment and an impairment loss of $ 0.6 million related to the Business Payments segment within the Impairment loss in the Company’s Consolidated Statements of Operations for the year ended December 31, 2025.

Following the decline in the Company’s stock price during the fourth quarter of 2025, the Company evaluated potential goodwill impairment triggering events and concluded that it was more likely than not that the goodwill was impaired.

The Company conducted a quantitative assessment using both a discounted cash flow approach and a market comparable approach to estimate fair value.

Based on this analysis, the Company determined that the goodwill associated with the Consumer Payments reporting unit was impaired as of December 31, 2025.

The estimated fair value of the Consumer Payments reporting unit was primarily impacted by changes in the discount rate and comparable market multiples .

The Company recognized an impairment of $ 138.5 million rela ted to the Consumer Payments reporting unit within Impairment loss in the Company’s Consolidated Statements of Operations for the year ended December 31, 2025 .

Repay provides integrated payment processing solutions to niche markets that have specific transaction processing needs;

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Discount fees represent a percentage of the dollar amount of each credit or debit transaction processed and include fees relating to processing and services that we provide.

As our clients process increased volumes of payments, our revenues increase as a result of the fees we charge for processing these payments.

As the Company’s clients process increased volumes of payments, our revenues increase as a result of the fees we charge for processing these payments.

The Company’s performance obligation in its contracts with clients is the promise to stand-ready to provide front-end authorization and back-end settlement payment processing services (“processing services”) for an unknown or unspecified quantity of transactions and the consideration received is contingent upon the client’s use (e.g., number of transactions submitted and processed) of the related processing services.

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chargebacks, gateway) as well as other miscellaneous service fees.

These services are considered immaterial in the overall context of our contractual arrangements and, as such, do not represent distinct performance obligations.

Instead, the fees associated with these services are bundled with the processing services performance obligation identified.

These services are considered immaterial in the overall context of our contractual arrangements and, as such, do

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

not represent distinct performance obligations.

Instead, the fees associated with these services are bundled with the processing services performance obligation identified.

Interest earned on Settlements is recognized as a part of revenue as the collecting, holding, and remitting of client funds are integral components of providing the Company’s payment services.

The transaction price for such processing services is determined, based on the judgment of the Company’s management, considering factors such as margin objectives, pricing practices and controls, client segment pricing strategies, the product life cycle and the observable price of the service charged to similarly situated clients.

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The Company does not have any costs incurred to fulfill a contract.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

Practical Expedients

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The Company has also utilized the practical expedient for immaterial goods and services per ASC 606-10-25-16A, which permits the Company not to recognize a promised good or service as a performance obligation if it is considered an immaterial promise in the context of the contract.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

Transaction Costs

The Company expenses all transaction costs associated with business combinations and dispositions as incurred and such expenses are included in Selling, general, and administrative expenses in the Consolidated Statements of Operations.

For the years ended December 31, 2024, 2023 and 2022 , the Company incurred $ 0 , $ 3.4 million and $ 13.7 million transaction costs, respectively.

Equity Units Awarded

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Under the provisions of ASC 718, stock-based compensation costs are measured at the grant date, based on the fair value of the award, and are recognized as expense over the employee’s requisite or derived service period.

PSUs, RSAs, RSUs and stock options granted under the Incentive Plan are measured based on the fair value of the awards on the date of the grant.

PSUs, RSAs, RSUs and PSOs granted under the Incentive Plan are measured based on the fair value of the awards on the date of the grant.

Compensation expense is recognized for those awards over the requisite service period within Selling, general, and administrative in the Consolidated Statements of Operations.

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A lease exists if the Company obtains substantially all of the economic benefits of, and has the right to control the use of, an asset for a period of time.

The Company has operating leases for real estate.

Operating leases with an original lease term in excess of twelve months are included in Operating lease right-of-use assets, net, Current operating lease liabilities and Noncurrent operating lease liabilities in the Consolidated Balance Sheets.

Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities

The Company has operating

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

represent the obligation to make lease payments arising from the lease.

leases for real estate.

Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease.

Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.

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ROU assets for operating leases are periodically reduced by impairment losses.

As of December 31, 2024 , the Company has no t encountered any impairment losses.

As of December 31, 2025 , the Company recognized an impairment loss of $ 0.4 million related to the Consumer Payments segment when the Company entered an agreement with a third party to sublease one of the operating leases.

The impairment loss was recorded within Impairment loss in the Company's Consolidated Statements of Operations.

The Company monitors for events or changes in circumstances that require a reassessment of a lease.

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For the years ended December 31, 2025, 2024, and 2023, the noncontrolling interest in the net loss of subsidiaries was $ 14.4 million , $ 0.2 million, and $ 6.9 million, respectively.

Contingent Consideration

The Company estimates and records the acquisition date estimated fair value of contingent consideration as part of purchase price consideration for acquisitions.

Additionally, each reporting period, the Company estimates changes in the fair value of contingent consideration, and any change in fair value is recognized in the Consolidated Statements of Operations.

An increase in the contingent consideration expected to be paid will result in a charge to operations in the period that the anticipated fair value of contingent consideration increases, while a decrease in the contingent consideration expected to be paid will result in a credit to operations in the period that the anticipated fair value of contingent consideration decreases.

The estimate of the fair value of contingent consideration requires subjective assumptions to be made of future operating results, discount rates, and probabilities assigned to various potential operating result scenarios.

Incurred But Not Reported ( “IBNR”) Reserve

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The liability for these claims is based on the Company’s estimated ultimate cost of settling all claims.

The Company derives estimates for the development of IBNR claims using actuarial methods that are based on many variables,

The Company derives estimates for the development of IBNR claims using actuarial methods that are based on many variables, including historical patterns of claims, cost trends, and other factors.

As of December 31, 2025 and 2024, the Company recognized IBNR reserve of $ 0.5 million and $ 0.9 million , respectively, recorded within Accrued expenses in the Consolidated Balance Sheets.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

including historical patterns of claims, cost trends, and other factors.

As of both December 31, 2024 and 2023, the Company recognized $ 0.9 million of IBNR reserve recorded within Accrued expenses in the Consolidated Balance Sheets.

Recently Adopted Accounting Pronouncements

Segment Reporting

In November 2023, the FASB issued Accounting Standards Update No.

2023-07, “ Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ” (“ASU 2023-07”).

ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, on an annual and interim basis.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company adopted ASU 2023-07 as of December 31, 2024.

The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.

Segments for further discussion.

Recently Issued Accounting Pronouncements not yet Adopted

In December 2023, the FASB issued Accounting Standards Update No.

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ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently in the process of evaluating the effects of ASU 2023-09 on its Consolidated Financial Statements.

The Company adopted ASU 2023-09 as of December 31, 2025 retrospectively and prior period disclosures have been revised to conform to the current presentation.

The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.

Taxation for disclosures required by this standard.

Recently Issued Accounting Pronouncements not yet Adopted

Disaggregation of Income Statement Expenses

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The Company is currently in the process of evaluating the effects of ASU 2024-04 on its Consolidated Financial Statements.

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued Accounting Standards Update No.

2025-05, “ Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets ” (“ASU 2025-05”).

ASU 2025-05 provides (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606.

ASU 2025-05 is effective for annual periods beginning after December 15, 2025, with early adoption permitted.

The Company is currently in the process of evaluating the effects of ASU 2025-05 on its Consolidated Financial Statements.

Accounting for Internal-Use Software

In September 2025, the FASB issued Accounting Standards Update No.

2025-06, “ Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software ” (“ASU 2025-06”).

ASU 2025-06 removes all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40 and requires an entry to start capitalizing software costs when both of the following occur:

(1) Management has authorized and committed to funding the software project;

(2) It is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”).

ASU 2025-06 is effective for annual periods beginning after December 15, 2027, with early adoption permitted as of the beginning of an annual reporting period.

The Company is currently in the process of evaluating the effects of ASU 2025-06 on its Consolidated Financial Statements.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

Interim Reporting

In December 2025, the FASB issued Accounting Standards Update No.

2025-11, “ Interim Reporting (Topic 270):

Narrow-Scope Improvements ” (“ASU 2025-11”).

ASU 2025-11 includes a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, for public business entities and for interim reporting periods within annual reporting periods beginning after December 15, 2028, for entities other than public business entities, with early adoption permitted.

The Company is currently in the process of evaluating the effects of ASU 2025-11 on its Consolidated Financial Statements.

Disaggregation of Revenue

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The following table presents the Company’s revenue disaggregated by segment and by the type of relationship for the years ended December 31, 2025, 2024, and 2023.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

Year Ended December 31, 2025

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(1) Represents revenue eliminations between business units within the Consumer Payments segment and eliminations of intersegment revenues for consolidation purpose.

(2) Direct relationships revenue includes $ 5.4 million, $ 0 , and $ 0 of interest earned on Settlements for the years ended December 31, 2025, 2024, and 2023, respectively, which do not represent revenues recognized in the scope of ASC 606, Revenue from contracts with customers .

When the Company’s right to consideration for performance is contingent upon a future event or satisfaction of additional performance obligations, the amount of revenues the Company has recognized in excess of the amount the Company has billed to the client is recognized as a contract asset.

The contract asset balance wa s $ 1.7 million and $ 1.4 million as of December 31, 2024 and 2023 , respectively, and is included within Prepaid expenses and other in the Consolidated Balance Sheets.

Earnings Per Share

During the years ended December 31, 2024 and 2023, basic and diluted net income (loss) per common share is the same since the inclusion of the assumed exchange of all Post-Merger Repay Units, unvested share-based awards, outstanding stock options, outstanding ESPP purchase rights and the Company’s convertible senior notes would have been anti-dilutive.

During the year ended December 31, 2024, the aggregate principal amount of the 2029 Notes is not included in the computation of senior notes convertible into Class A Common Stock as the Company is required to settle such amount in cash.

The Company may elect to settle the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the 2029 Notes being converted in cash, shares of the Company’s Class A common stock, or a combination of cash and shares.

Because the average market price of the Company’s Class A common stock for the period was less than the conversion price, there are no incremental shares to be considered in the computation of senior notes convertible into Class A Common Stock.

The contract asset balance was $ 3.2 million an d $ 1.7 million as of December 31, 2025 and 2024, respectively, and is included within Prepaid expenses and other in the Consolidated Balance Sheets.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024, the Company recorded deferred commissions of $ 2.3 million a nd $ 0 , net of amortization, respectively, within Other assets in the Consolidated Balance Sheets.

The amortization of deferred commissions is recorded within Selling, general and administrative in the Consolidated Statements of Operations.

Earnings Per Share

During the years ended December 31, 2025, 2024 and 2023, basic and diluted net income (loss) per common share is the same since the inclusion of the assumed exchange of all Post-Merger Repay Units, unvested share-based awards, outstanding stock options, outstanding ESPP purchase rights and the Company’s convertible senior notes would have been anti-dilutive.

The following table summarizes net income (loss) attributable to the Company and the weighted average basic and diluted shares outstanding:

1 unchanged sentence

($ in thousands, except per share data)

Net income (loss) attributable to the Company

Weighted average shares of Class A common stock outstanding - basic

Add weighted average effect of dilutive common stock equivalent shares:

Post-Merger Repay Units exchangeable for Class A common stock

Unvested share-based awards of Class A common stock

Outstanding ESPP purchase rights for Class A common stock

2026 Notes convertible into Class A common stock

Weighted average shares of Class A common stock outstanding - diluted

Income (loss) per share of Class A common stock outstanding - basic

Income (loss) per share of Class A common stock outstanding - diluted

Net loss attributable to the Company

Weighted average shares of Class A common stock outstanding - basic and diluted

Loss per share of Class A common stock outstanding - basic and diluted

For the years ended December 31, 2025, 2024 and 2023, the following common stock equivalent shares were excluded from the computation of the diluted loss per share, since their inclusion would have been anti-dilutive:

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Goodwill for further discussion.

For the years ended December 31, 2023 and 2022, BCS contributed $ 1.2 million an d $ 9.8 million to the Consumer Payments segment revenue, respectively.

For the year ended December 31, 2023, BCS contributed $ 1.2 million to the Consumer Payments segment revenue.

Fair Value of Assets and Liabilities

The following table summarizes, by level within the fair value hierarchy, the estimated fair values of our assets and liabilities measured at fair value on a recurring or nonrecurring basis or disclosed, but not carried, at fair value in the Consolidated Balance Sheets as of the dates presented.

There were no transfers into, out of, or between levels within the fair value hierarchy during any of the periods presented.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

Consolidated Balance Sheets as of the dates presented.

There were no transfers into, out of, or between levels within the fair value hierarchy during any of the periods presented.

December 31, 2025

51 unchanged sentences

The Company used a discount rate, also referred to as the Early Termination Rate, to determine the present value, based on a risk-free rate plus a spread , pursuant to the TRA.

A rate of 6.2 % w as applied to the forecasted TRA payments as of December 31, 2024, in order to determine the fair value.

A significant increase or decrease in the discount rate could have r esulted in a lower or higher balance, respectively, as of the measurement date.

The TRA balance was adjusted by $ 14.7 million through exchanges , a payment, accretion expense and a valuation adjustment, related to a decrease in the income tax rate used to measure the TRA as of the Early Termination Date and a decrease in the discount rate, which was 7.10 % as of December 31, 2023.

A rate of 5.59 % was applied to the forecasted TRA payments as of December 31, 2025 , in order to determine the fair value.

A significant increase or decrease in the discount rate could have resulted in a lower or higher balance, respectively, as of the measurement date.

The TRA balance was adjusted by $ 2.7 million through exchanges, a payment, accretion expense and a valuation adjustment, related to a change in the discount rate , which was 6.21 % as of December 31, 2024.

The following table provides a rollforward of the TRA related to the Business Combination and subsequent exchanges of Post-Merger Repay Units.

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The Company holds definite and indefinite-lived intangible assets.

As of December 31, 2024 and 2023, the indefinite-lived intangible assets consist of one trade name, arising from the acquisitions of Hawk Parent.

As of December 31, 2025 and 2024 , the indefinite-lived intangible assets consisted of one trade name, arising from the acquisition of Hawk Parent.

During the year ended December 31, 2025 , the Company capitalized $ 41.5 million of software costs related to business operations and software integrations.

In addition, the Company wrote-off fully amortized software costs and associated accumulated amortization of $ 49.0 million.

During the year ended December 31, 2024 , the Company capitalized $ 44.1 million of software costs related to business operations and software integrations.

In addition, the Company wrote-off fully amortized software costs and associated accumulated amortization of $ 151.7 million and fully amortized non-compete agreements and associated accumulated amortization of $ 4.4 million.

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The impairment loss was recognized within Impairment loss in the Company’s Consolidated Statements of Operations.

During the year ended December 31, 2022, the Company recorded an impairment loss of $ 8.1 million related to the write-offs of certain trade names, of which $ 8.1 million and $ 0.0 million of the impairment loss related to the Consumer Payments and Business Payments segments, respectively.

The impairment loss was recognized within Impairment loss in the Company’s Consolidated Statements of Operations.

Intangible assets consisted of the following:

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Software costs

Non-compete agreements

Balance as of December 31, 2025

4 unchanged sentences

Balance as of December 31, 2024

The Company’s amortization expense for intangible assets was $ 102.0 million, $ 101.4 million and $ 105.4 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company’s amortization expense for intangible assets wa s $ 100.9 million, $ 102.0 million and $ 101.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.

REPAY HOLDINGS CORPORATION

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The Company’s reporting units for goodwill impairment evaluation purposes are the same as its reportable segments.

The Company concluded that goodwill was no t impaired for either the Consumer Payments or the Business Payments segment as of December 31, 2024.

As of December 31, 2025, accumulated impairment losses were $ 241.7 million for the Consumer Payments segment and $ 76.3 million for the Business Payments segment.

As of December 31, 2024 and 2023 , accumulated impairment loss was $ 75.7 million for the Business Payments segment.

As of December 31, 2022, there were no accumulated impairment losses for either the Consumer Payments or Business Payments segment.

The following table presents changes to goodwill by business segment, for the year ended December 31, 2025:

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Balance at December 31, 2025

During the year ended December 31, 2025 , t he Company recognized an impairment loss of $ 241.7 million on goodwill related to the Consumer Payments segment and an impairment loss of $ 0.6 million related to the Business Payments segment within the Impairment loss in the Company’s Consolidated Statements of Operations for the year ended December 31, 2025.

The estimated fair value of the Consumer Payments reporting unit was primarily impacted by changes in the discount rate and comparable market multiples.

There were no changes in the carrying amount of goodwill for either the Consumer Payments or Business Payments segment during the year ended December 31, 2024.

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Amended Credit Agreement

On February 3, 2021, the Company announced the closing of a new undrawn $ 125.0 million senior secured revolving credit facility through Truist Bank.

The Amended Credit Agreement replaces the Company’s Successor Credit Agreement, which included an undrawn $ 30.0 million Revolving Credit Facility.

On December 29, 2021, the Company increased its existing senior secured credit facilities by $ 60.0 million to a $ 185.0 million revolving credit facility pursuant to an amendment to the Amended Credit Agreement.

The Company was in compliance with its restrictive covenants under the Amended Credit Agreement at December 31, 2024.

On February 9, 2023, the Company further amended the Amended Credit Agreement to replace London Inter-bank Offer Rate (“LIBOR”) with term SOFR as the interest rate benchmark.

On February 28, 2023, the Company repaid in full the entire amount of $ 20.0 million of the outstanding revolving credit facility.

The Amended Credit Agreement previously provided the Company with a $ 185.0 million revolving credit facility.

On February 9, 2023, the Company amended the Amended Credit Agreement to replace London Inter-bank Offer Rate (“LIBOR”) with term SOFR as the interest rate benchmark.

On February 28, 2023, the Company repaid in full the entire amount of $ 20.0 million of the outstanding revolving credit facility at that time.

The undrawn capacity of the existing revolving credit facility under the Amended Credit Agreement became $ 185.0 million after the repayment.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

Second Amended Credit Agreement

On July 10, 2024, the Company entered into a Second Amended and Restated Revolving Credit Agreement (the “Second Amended Credit Agreement”) with certain financial institutions, as lenders, and Truist Bank, as administrative agent.

The Second Amended Credit Agreement amends and restates the Amended Credit Agreement.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

The Second Amended Credit Agreement amended and restated the Amended Credit Agreement.

The Second Amended Credit Agreement establishes a $ 250.0 million senior secured revolving credit facility.

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The unused commitment fees accrue at 0.25 % on the daily amount of unused commitment.

This facility matures on the earlier of (a) July 10, 2029 , (b) the date that is 91 days prior to the maturity date of the 2026 Notes (defined below) (subject to certain exceptions for adequate liquidity) and (c) the date that is 91 days prior to the maturity date of the 2029 Notes (defined below) (subject to certain exceptions for adequate liquidity).

This facility matures on the earlier of (a) July 10, 2029 or (b) the date that is 91 days prior to the maturity date of the 2029 Notes (defined below) (subject to certain exceptions for adequate liquidity).

The maturity date may be extended, subject to certain terms and conditions.

As of December 31, 2025 , the Company had $ 0 drawn against the revolving credit facility.

The Company paid $ 0.6 million and $ 0.5 million in fees related to unused commitments for the years ended December 31, 2024 and 2023, respectively.

The Company paid $ 0.7 million, $ 0.6 million and $ 0.5 million in fees related to unused commitments for the years ended December 31, 2025, 2024 and 2023 respectively.

Convertible Senior Notes

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Upon conversion of the 2026 Notes, the Company may choose to pay or deliver cash, shares of the Company’s Class A common stock, or a combination of cash and shares of the Company’s Class A common stock.

The 2026 Notes will mature on February 1, 2026 , unless earlier converted, repurchased or redeemed.

Subject to Nasdaq requirements, the Company controls the conversion rights prior to November 3, 2025, unless a fundamental change or an event of default occurs.

The 2026 Notes matured on February 1, 2026 .

On July 8, 2024, the Company repurchased $ 220.0 million in aggregate principal amount of the 2026 Notes at a discount based on the quoted prices from over-the-counter markets, with a cash payment of $ 205.2 million.

The repurchase of the 2026 Notes resulted in a gain of $ 13.1 million, net of a write-off of debt issuance costs relating to the repurchased principal during the year ended December 31, 2024 and was recorded within Gain on debt extinguishment in the Company’s Condensed Consolidated Statements of Operations.

On August 22, 2025, the Company repurchased $ 73.5 million in aggregate principal amount of the 2026 Notes at a discount, for a total cash consideration of $ 72.0 million.

The transaction resulted in a gain on extinguishment of debt of $ 1.4 million, net of a write-off of unamortized debt issuance costs associated with the repurchased principal.

This gain was recognized within Gain on extinguishment of debt in the Company’s Consolidated Statements of Operations during the year ended December 31, 2025.

On July 8, 2024, the Company issued $ 287.5 million aggregate principal amount of 2.875 % Convertible Senior Notes due 2029 (the “2029 Notes”) in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended.

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During the year ended December 31, 2025, the conversion contingencies of the convertible senior notes were not met, and the conversion terms of the 2026 Notes and 2029 Notes were not significantly changed.

The Company’s interest expense on the convertible senior notes was $ 4.0 million and $ 0 for the years ended December 31, 2024 and 2023, respectively.

The Company’s interest expense on the convertible senior notes w as $ 8.3 million, $ 4.0 million and $ 0 for the years ended December 31, 2025, 2024 and 2023 respectively.

The following table summarizes the total borrowings under the credit agreements and convertible senior notes:

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Total borrowings (1)

Long-term loan debt issuance cost (1)

Current maturities of long-term debt

Debt issuance cost (2)

Total non-current borrowings

(1) The Company incurre d $ 3.0 million, $ 2.8 million and $ 2.8 million of interest expense for the amortization of deferred debt issuance costs for the years ended December 31, 2024, 2023 and 2022 , respectively.

(1) The effective interest rate was 2.62 % and 1.38 % as of December 31, 2025 and 2024 , respectively.

(2) The Company incurr ed $ 3.1 million, $ 3.0 million and $ 2.8 million of interest expense for the amortization of deferred debt issuance costs for the years ended December 31, 2025, 2024 and 2023 , respectively.

Following is a summary of principal maturities of borrowings outstanding as of December 31, 2025 for each of the next five years ending December 31 and in the aggregate:

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Options that are reasonably certain of being exercised are factored into the determination of the lease term, and related payments are included in the calculation of the right-of-use asset and lease liability.

On December 31, 2023, the Company entered into an amendment for one of the existing leases to relocate to another space within the building, commencing on August 1, 2024.

The landlord provided a construction allowance, in the form of reimbursements, of up to $ 1.4 million related to approved improvements and renovations of the landlord’s property during the construction period.

On July 25, 2024, the Company further amended and restated the agreement which modified the commencement date of the lease to September 1, 2024.

On July 12, 2024, the Company entered an agreement with a third party to sublease one of the operating leases.

No impairment test was performed due to the anticipated sublease income exceeding the lease costs for the term of the sublease.

On December 22, 2025, the Company entered an agreement with a third party to sublease one of the operating leases.

The Company performed an impairment analysis and used the market approach to calculate the fair value of the associated ROU asset.

An impairment loss of $ 0.4 million related to Consumer Payments segment was recorded within Impairment loss in the Company’s Consolidated Statements of Operations as the result of the reassessment.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

During the year ended December 31, 2024 and 2023, the Company recognized sub lease income of $ 0.3 million and $ 0.1 million, respectively, within Other (loss) income in the Company’s Consolidated Statements of Operations.

During both the years ended December 31, 2025 and 2024, the Company recognized sublease income of $ 0.3 million, within Other (loss) income in the Company’s Consolidated Statements of Operations.

The components of lease costs are presented in the following table:

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Related Party Transactions

The Company incurred transaction costs on behalf of related parties of $ 0 , $ 5.4 million and $ 10.6 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company incurred transaction costs on behalf of related parties o f $ 0.9 million, $ 0 and $ 5.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.

These costs consist of retention bonuses and other compensation to employees, associated with the costs resulting from the integration of new businesses.

The Company held TRA payables for related parties of $ 27.5 million and $ 25.4 million as of December 31, 2024 and 2023 , respectively.

These amounts were owed to holders of the Post-Merger Repay Units.

During the years ended December 31, 2025, 2024 and 2023 , the Company paid fees of $ 1.3 million, $ 1.0 million and $ 0.2 million, respectively, to a related party vendor for consulting services for the Business Payments segment.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

The Company held TRA payables for related pa rties of $ 22.3 million and $ 27.5 million as of December 31, 2025 and 2024, respectively.

These amounts were owed to holders of the Post-Merger Repay Units.

During the year ended December 31, 2025 , the Company made a payment of $ 16.3 million for TRA payables, of which $ 2.4 million was for related parties.

Share Based Compensation

23 unchanged sentences

Unvested at December 31, 2025

(1) The forfeited shares include shares forfeited as a result of employee terminations, retirement from the Board and shares withheld to satisfy employees’ tax withholding and payment obligations in connection with the vesting of restricted stock awards under the Incentive Plan during the year ended December 31, 2025 ;

further, these forfeited shares are added back to the amount of shares available for grant under the Incentive Plan.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

Activity for RSUs for the year ended December 31, 2025 was as follows:

3 unchanged sentences

Unvested at December 31, 2025

(1) The forfeited shares include shares forfeited as a result of employee terminations and shares withheld to satisfy employees’ tax withholding and payment obligations in connection with the vesting of restricted stock awards under the Incentive Plan during the year ended December 31, 2024 ;

further, these forfeited shares are added back to the amount of shares available for grant under the Incentive Plan.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

The Company has two types of PSU grant agreements, with one vesting based on relative total stock return (“TSR PSUs”) and one vesting based on adjusted EBITDA growth (“EBITDA PSUs”).

TSR PSUs are based on a performance condition, such that the Company’s total shareholder return relative to a comparator group for the applicable performance period determines the number of shares (if any) that is ultimately issued upon vesting.

TSR PSUs are based on a market condition, such that the Company’s total shareholder return relative to a comparator group for the applicable performance period determines the number of shares (if any) that is ultimately issued upon vesting.

The grant date fair value of TSR PSUs is estimated using the Monte Carlo simulation.

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Correlation coefficients are calculated between the index and the peer group using the same daily stock prices that are used for the expected volatility assumptions.

The dividend yield assumption was determined as 0 % since the Company pays no dividends.

The dividend yield assumption was determined as 0 % since

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

the Company pays no dividends.

Expected term was based on the time period from the grant date to the end of the performance period.

1 unchanged sentence

Unrecognized compensation expense related to unvested PSUs, RSAs and RSUs was $ 21.2 million as of December 31, 2025 , which is expected to be recognized as expense over the weighted-average period of 1.69 years.

Stock Options

Stock options are granted with an exercise price equal to the market value of the Company’s common stock on the grant date and have a term of seven years .

Stock options vest in three tranches, and each tranche may vest upon the later of (i)

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

the date that the market value of the Company’s common stock for a period of twenty consecutive trading days exceeds a stock price goal and (ii) the corresponding time based service requirement.

PSOs are granted with an exercise price equal to the market value of the Company’s common stock on the grant date and have a term of seven years .

Stock options vest in three tranches, and each tranche may vest upon the later of (i) the date that the market value of the Company’s common stock for a period of twenty consecutive trading days exceeds a stock price goal and (ii) the corresponding time based service requirement.

Activity for PSOs for the year ended December 31, 2025 was as follows:

5 unchanged sentences

Options vested and exercisable at December 31, 2025

The Company recognized compensation expense for PSOs o f $ 1.1 million during the year ended December 31, 2024 .

Unrecognized compensation expense related to outstanding PSOs was $ 0.5 million at December 31, 2024 , which is expected to be recognized as expense over the weighted-average period of 1.0 year.

During the year ended December 31, 2024 , cash received from exercise of PSOs was $ 0.4 million, and $ 0.0 million of tax benefit was recognized from PSOs exercise.

The Company recognized compensation expense for PSOs o f $ 0.5 million d uring the year ended December 31, 2025.

Unrecognized compensation expense related to outstanding PSOs was $ 0.1 million a t December 31, 2025, which is expected to be recognized as expense over the weighted-average period of 0.2 year.

The weighted average grant date fair value of PSOs granted during the year ended December 31, 2023 was $ 2.61 .

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Given that the Company’s Class A common stock has been publicly traded for less than seven years, the Company believes that the simplified method is an applicable methodology to estimate the expected term of the options as of the grant date.

Inducement Award

On September 8, 2025, the Company granted an inducement award of 118,243 shares of restricted stock outside the Incentive Plan to Robert S.

Houser, the Company’s recently appointed CFO, with the grant date fair value of $ 5.92 , which is

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

based on the quoted market value of the Company’s Class A common stock on the grant date.

This award vests in four equal annual installments commencing September 8, 2026.

Compensation expense for the inducement award is recognized on a graded vesting basis over the requisite service period.

Employee Stock Purchase Plan

On August 18, 2021, the Company’s stockholders approved the Repay Holdings Corporation 2021 Employee Stock Purchase Plan.

The purpose of the ESPP is to provide eligible employees with the opportunity to purchase the Company’s Class A common stock through accumulated payroll deductions.

A total of 1,000,000 shares of the Company’s Class A common stock is reserved for issuance under the ESPP.

Under the ESPP, participants are offered the right to purchase shares of the Company’s Class A common stock at a discount during a series of offering periods.

The length of the offering periods under the ESPP will be determined by the administrator and may be up to twenty-seven months long.

Repay Holdings Corporation is taxed as a corporation and is subject to paying corporate federal, state and local taxes on the income allocated to it from Hawk Parent, based upon Repay Holding Corporation’s economic interest held in Hawk Parent, as well as any stand-alone income or loss it generates.

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Hawk Parent’s members, including Repay Holdings Corporation, are liable for federal, state and local income taxes based on their allocable share of Hawk Parent’s pass-through taxable income.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

The components of loss before income taxes are as follows:

The components of income (loss) before income taxes are as follows:

Year Ended December 31,

($ in thousands)

Income (loss) before income tax expense (benefit)

The Company recorded a provision for income tax as follows:

Loss before income tax benefit

The Company recorded a provision (benefit) for income tax as follows:

Year Ended December 31,

($ in thousands)

Current expense

Current expense (benefit)

state and local

Total current expense

Deferred expense (benefit)

Total deferred expense (benefit)

state and local

Total deferred benefit

Income tax expense (benefit)

state and local

Income tax benefit

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

A reconciliation of the income taxes paid, net of refunds received by the Company is as follows for the years indicated:

Year Ended December 31,

($ in thousands)

state and local

Canada - Federal

Canada - British Columbia

(1) The amount of income taxes paid during the year does not meet the 5% disaggregation threshold.

A reconciliation of the United States statutory income tax rate to the Company’s effective income tax rate is as follows for the years indicated:

Year Ended December 31,

Federal income tax expense

State taxes, net of federal benefit

Income attributable to noncontrolling interest

Excess tax shortfall related to share-based compensation

Business disposition

($ in thousands)

Federal Statutory Tax Rate

Domestic Federal

Research and development tax credits

Foreign tax credit

Nontaxable or Nondeductible Items

Goodwill impairment

Change in fair value of contingent consideration

Foreign rate differential

R&D credit - Federal

Provision to return - Federal

State rate change impact on deferred taxes

Effect of Changes in Tax Laws or Rates Enacted in the Current Period

Other Adjustments

Excess tax shortfall related to share-based compensation

Gain on sale of Blue Cow

Domestic State and Local Income Taxes, Net of Federal Income Tax Effect (1)

Foreign Tax Effects

Statutory tax rate difference between Canada and United States

Effective tax rate

(1) State taxes in Arizona, California, Georgia, Florida and Pennsylvania made up the majority (greater than 50 percent) of the tax effect in this category.

The Company’s effective tax rate was 2.1 %, 5.3 % and 1.8 % for the years ended December 31, 2025, 2024 and 2023 , respectively.

The comparison of the Company’s effective tax rate to the U.S.

statutory tax rate of 21 % was primarily influenced by the fact that the Company is not liable for the income taxes on the portion of Hawk Parent’s earnings that are attributable to noncontrolling interests, the calculation of the Federal and state research and development credit and its impact on income taxes and the excess tax shortfall related to share-based compensation.

statutory tax rate of 21 % was primarily influenced by the fact that the Company is not liable for the income taxes on the portion of Hawk Parent’s earnings that are attributable to

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

noncontrolling interests, the calculation of the Federal and state research and development credit and its impact on income taxes, the excess tax shortfall related to share-based compensation and the impact of the goodwill impairment.

Further, the comparison is reflective of the effect of remeasuring net deferred tax assets for state tax rate changes.

1 unchanged sentence

Details of the Company’s deferred tax assets and liabilities are as follows:

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

($ in thousands)

16 unchanged sentences

As a result of the finalization of 2024 income tax returns, Post-Merger Repay Unit exchanges during the year ended December 31, 2025 , and estimates of current year activity, the Company recognized a reduction of the deferred tax asset (“DTA”) and offsetting deferred tax liability (“DTL”) in the amount of $ 3.0 million, compared to a reduction of $ 3.2 million during the year ended December 31, 2024, to account for the portion of the Company’s outside basis in the partnership interest that it will not recover through tax deductions, a ceiling rule limitation arising under Internal Revenue Code (the “Code”) sec.

As the ceiling rule causes taxable income allocations to be in excess of 704(b) book allocations the DTL will unwind, leaving only the DTA, which may only be recovered through the sale of the partnership interest in Hawk Parent.

As t he ceiling rule causes taxable income allocations to be in excess of 704(b) book allocations the DTL will unwind, leaving only the DTA, which may only be recovered through the sale of the partnership interest in Hawk Parent.

The Company has concluded, based on the weight of all positive and negative evidence, that all of the DTA associated with the ceiling rule limitation is not likely to be realized as of December 31, 2025 .

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The Company believes as of December 31, 2025 , based on the weight of all positive and negative evidence, it is more likely than not that the results of future operations will generate sufficient taxable income to realize the NOLs and tax credits and, as such, no valuation allowance was recorded.

On July 4, 2025, the United States enacted tax reform legislation through the One Big Beautiful Bill Act (“OBBBA”).

Included in this legislation are provisions that allow for the immediate expensing of domestic United States research and development expenses, immediate expensing of certain capital expenditures, and other changes to the United States taxation of profits derived from foreign operations.

The Company accounted for the effects of OBBBA in accordance with ASC740, Income Taxes, in the year ended December 31, 2025.

The OBBBA did not have a material effect on the financial statements for the year ended December 31, 2025, and the Company is continuing to evaluate the potential effect on future periods.

The Company is no longer subject to U.S.

1 unchanged sentence

No uncertain tax positions existed as of December 31, 2025.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

Tax Receivable Agreement Liability

6 unchanged sentences

The TRA Payments are not conditioned upon any continued ownership interest in Hawk Parent or Repay.

The rights of each party under the TRA other

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

than the Company are assignable.

The rights of each party under the TRA other than the Company are assignable.

The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the timing and amount of taxable income generated by the Company each year, as well as the tax rate then applicable, among other factors.

As of December 31, 2025, the Company had a liability of $ 200.9 million related to the fair value of its projected obligations under the TRA, which is captioned as the tax receivable agreement liability in the Company’s Consolidated Balance Sheets.

The increase of $ 14.7 million in the TRA liability for the year ended December 31, 2024 , was primarily a result of the decrease in the Early Termination Rate, subsequent exchanges of Post-Merger Repay Units occurring during the period, and accretion, partially offset by a decrease in the tax rate and a payment of the current portion of the TRA liability, as reported at December 31, 2023, over the same period.

The decrease of $ 2.7 million in the TRA liability for the year ended December 31, 2025 , was primarily a result of the decrease in the Early Termination Rate, subsequent exchanges of Post-Merger Repay Units occurring during the period, and accretion, partially offset by a decrease in the tax rate and a payment of the current portion of the TRA liability, as reported at December 31, 2024, over the same period.

The Company organizes its business structure around two operating segments based on review of discrete financial results for each of the operating segments by the Company’s chief operating decision maker (“CODM”), for performance assessment and resource allocation purposes.

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The CODM considers budget-to-actual variances on a monthly basis for the gross profit measure when making decisions about allocating capital and personnel to the segments.

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

The following table presents revenue, cost of services and gross profit for each reportable segment.

16 unchanged sentences

Total other income (expense)

Income (loss) before income tax benefit (expense)

Income tax benefit (expense)

Net income (loss)

(1) Represents revenue eliminations between business units within the Consumer Payments segment and eliminations of intersegment revenues for consolidation purpose.

Loss before income tax benefit

Income tax benefit

(1) Represents revenue eliminations between business units within the Consumer Payments segment and Business Payments segment, as well as eliminations of intersegment revenues for consolidation purpose.

(2) Represents revenue less costs of services (exclusive of depreciation and amortization).

(3) Represents total operating expenses less costs of services (exclusive of depreciation and amortization).

REPAY HOLDINGS CORPORATION

Notes to Consolidated Financial Statements

Revenue and costs of services are attributed directly to each segment.

There is no significant concentration of revenue or assets in foreign countries as of December 31, 2025.

The CODM reporting package does not include interest income (expense), net, depreciation and amortization, income tax benefit (expense) and discrete asset details of the operating segments as this information is not considered by the CODM for resource allocation or other segment analysis purposes.

The CODM reporting package does not include interest income, interest expense, depreciation and amortization, income tax benefit (expense) and discrete asset details of the operating segments as this information is not considered by the CODM for resource allocation or other segment analysis purposes.

Subsequent Events

Management has evaluated subsequent events and their potential effects on these consolidated financial statements.

Based upon the review, management did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

On January 26, 2026, the Company borrowed $ 110.0 million under its revolving credit facility pursuant to the Second Amended Credit Agreement and, together with approximately $ 36.5 million of cash on hand, used such funds on or about February 2, 2026 to repay $ 146.5 million of the remaining outstanding principal amount of its 2026 Notes, which were satisfied and discharged in full.

Borrowings under the revolving credit facility bear interest at adjusted SOFR plus an applicable margin as provided in the Second Amended Credit Agreement.

CHANGES IN AND DISAGREEMENTS WITH ACCO UNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis