8-K: REPAY Appoints New CFO, Reports Q2 Net Loss

REPAY Holdings Corporation announced the appointment of Robert Houser as its new Chief Financial Officer and reported a significant net loss for the second quarter of 2025, primarily due to a goodwill impairment, while reiterating its full-year outlook.

Summary

• Robert Houser has been appointed as the new Chief Financial Officer, effective September 8, 2025, succeeding interim CFO Thomas Sullivan.
• Reported a net loss of $108.0 million for Q2 2025, significantly wider than the $4.2 million net loss in Q2 2024, primarily due to a $103.8 million non-cash goodwill impairment loss in the Consumer Payments segment.
• Revenue increased by 1% year-over-year to $75.6 million in Q2 2025 from $74.9 million in Q2 2024.
• Gross profit decreased by 2% year-over-year to $57.2 million in Q2 2025 from $58.6 million in Q2 2024.
• Adjusted EBITDA decreased by 6% year-over-year to $31.8 million in Q2 2025 from $33.7 million in Q2 2024.
• Net cash provided by operating activities increased to $33.1 million in Q2 2025 from $31.0 million in Q2 2024.
• Free Cash Flow improved by 17% to $22.6 million in Q2 2025 from $19.3 million in Q2 2024, with Free Cash Flow Conversion at 71%.
• Repurchased 4.8 million shares for $22.6 million during Q2 2025, contributing to a total of $38 million in share repurchases in 2025 through August 11.
• Reiterated its fiscal year 2025 outlook, expecting sequential quarterly acceleration of normalized gross profit growth, with Q4 year-over-year growth rate of high-single digits to low double-digits, and Free Cash Flow Conversion above 60% by Q4 2025.
• Added three new integrated software partners, bringing the total to 286 software relationships.
• Accelerated AP supplier network to over 440,000, an increase of approximately 47% year-over-year.
• Instant funding volumes increased by approximately 38% year-over-year.
• Added 10 new credit unions, bringing total credit union clients to 353.

Sentiment

Score: 5

Explanation: The sentiment is neutral to slightly negative. While there are strong positives like improved Free Cash Flow, share repurchases, and strategic growth initiatives, the significant non-cash goodwill impairment and declines in gross profit and Adjusted EBITDA present notable concerns. The reiteration of the outlook suggests management believes in a turnaround, but the Q2 results themselves are mixed.

Positives

• Free Cash Flow increased by 17% year-over-year to $22.6 million in Q2 2025.
• Free Cash Flow Conversion improved significantly to 71% in Q2 2025 from 57% in Q2 2024.
• The company repurchased 4.8 million shares for $22.6 million during Q2 2025, demonstrating capital return to shareholders.
• Net cash provided by operating activities increased to $33.1 million in Q2 2025.
• Added three new integrated software partners, expanding the total to 286 relationships.
• Accelerated AP supplier network growth by approximately 47% year-over-year to over 440,000 suppliers.
• Instant funding volumes increased by approximately 38% year-over-year.
• Added 10 new credit unions, reaching a total of 353 clients in this segment.
• The appointment of Robert Houser as CFO brings over a decade of relevant divisional CFO and operational experience within the payment industry.

Negatives

• Reported a substantial net loss of $108.0 million in Q2 2025, a significant increase from the $4.2 million net loss in Q2 2024.
• The net loss was primarily driven by a $103.8 million non-cash goodwill impairment loss in the Consumer Payments segment.
• Gross profit decreased by 2% year-over-year to $57.2 million in Q2 2025.
• Adjusted EBITDA decreased by 6% year-over-year to $31.8 million in Q2 2025.
• Consumer Payments gross profit was approximately flat year-over-year, impacted by previously announced client losses.
• Business Payments gross profit declined by 5% year-over-year, including a headwind from a previously communicated client loss in 2024.

Risks

• Exposure to economic conditions and political risk affecting the consumer loan market, receivables management industry, and consumer/commercial spending, including bank failures, inflationary pressures, and general economic slowdown or recession.
• Changes in the payment processing market, including competitive landscape, technology evolution, or regulatory changes.
• Changes in the vertical markets REPAY targets, including the regulatory environment applicable to its clients.
• Ability to retain, develop, and hire key personnel.
• Risks relating to REPAY’s relationships within the payment ecosystem.
• Risk that REPAY may not be able to execute its growth strategies, including identifying and executing acquisitions.
• Risks relating to data security.
• Changes in accounting policies applicable to REPAY.
• Risk that REPAY may not be able to maintain effective internal controls.

Future Outlook

REPAY reiterates its fiscal year 2025 outlook, anticipating sequential quarterly acceleration in normalized gross profit growth, with the fourth quarter year-over-year growth rate expected to be in the high-single digits to low double-digits. Free Cash Flow Conversion is also projected to accelerate above 60% by the end of 2025.

Management Comments

• "We are extremely excited to welcome Rob to REPAY. Rob brings over a decade of divisional CFO and operational experience within the payment industry to help him contribute immediately. Rob has held key strategic roles across his career and will be a great partner in running our company."
• "We are extremely grateful for Thomass help in managing the finance organization over the past several months and the entire REPAY team for supporting the company through the CFO transition."
• "REPAY executed on our path to reaccelerating growth during 2025, while making great progress to improve on our go-to-market, implementation pipelines, and operational excellence."
• "We began to deploy incremental strategic investments into our growth opportunities, while sequentially improving Free Cash Flow Conversion to over 71%."
• "REPAY used the second quarter as a prime opportunity to buy back approximately 5% of REPAYs outstanding shares and we have used a total of $38 million in 2025 to repurchase shares through August 11th."
• "Looking forward, REPAY is building momentum from our strategic initiatives to accelerate growth exiting the year."

Industry Context

The announcement reflects the ongoing trend towards digital payments and automation in various industry verticals, particularly in consumer and business payments. REPAY's focus on integrated payment solutions, expanding software partnerships, and growing its AP supplier network aligns with the broader industry shift away from traditional payment methods like checks and towards more frictionless, electronic transactions. The company's efforts to optimize payment flows and enhance operational efficiency are critical in a competitive fintech landscape, while the goodwill impairment highlights valuation challenges faced by some companies in the sector amidst changing market conditions.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results for direct industry comparison.

Management Changes

Related Party Transactions

• No related party transactions are required to be reported under Item 404(a) of Regulation S-K regarding Mr. Houser's employment.

Stakeholder Impact

• **Shareholders**: Impacted by the significant net loss due to goodwill impairment, but also by the company's share repurchase program and improved Free Cash Flow. The appointment of a new CFO with extensive industry experience could be seen as a positive for future financial stewardship.
• **Employees**: Thomas Sullivan returns to his Chief Accounting Officer role, indicating continuity in the finance organization. The company's focus on operational efficiencies and strategic initiatives may affect roles and responsibilities.
• **Customers (Clients)**: Benefit from expanded software partnerships (286 total), accelerated AP supplier network (440,000+), and increased instant funding volumes (38% YoY), enhancing payment processing solutions and overall experience.
• **Suppliers/Vendors**: The growth in the AP supplier network suggests increased engagement and opportunities for vendors working with REPAY's clients.
• **Creditors**: The company's management of its convertible debt liability and the upsized revolver facility indicate active financial management, which is relevant for creditors.

Next Steps

• Sequential quarterly acceleration of normalized gross profit growth, with Q4 year-over-year growth rate of high-single digits to low double-digits.
• Free Cash Flow Conversion expected to accelerate above 60% by the fourth quarter of 2025.
• Continued deployment of incremental strategic investments into growth opportunities.
• Continued focus on optimizing payment flows and enhancing operational efficiency.
• Ongoing efforts to acquire new clients in existing verticals and expand new and existing software partnerships.
• Potential strategic M&A and additional value-added service opportunities.

Key Dates

Recommendation

The filing presents a mixed financial picture. The significant non-cash goodwill impairment leads to a large net loss, which is a negative headline. However, the company demonstrated strong Free Cash Flow generation and actively returned capital to shareholders through buybacks. The appointment of a seasoned CFO with payments industry experience is a positive for financial leadership. While gross profit and Adjusted EBITDA saw slight declines, the company reiterated its outlook for accelerating normalized gross profit growth and improved Free Cash Flow Conversion by year-end, suggesting confidence in its strategic initiatives. The operational performance, excluding the one-time impairment, appears to be on a path towards reacceleration. Given the balance of a significant one-time accounting hit against operational improvements and a positive future outlook, a 'hold' recommendation is appropriate, awaiting further clarity on the reacceleration of gross profit growth and the impact of strategic investments.

Keywords

Payment Processing, Fintech, SEC Filing, Financial Results, CFO Appointment, Goodwill Impairment, Free Cash Flow, Share Repurchase, Consumer Payments, Business Payments, Integrated Payments, Electronic Payments, Q2 Earnings