Priority Technology Holdings, Inc. Priority Technology Holdings, Inc. June 2020 June 2020
Disclaimer Important Notice Regarding Forward-Looking Statements and Non-GAAP Measures This presentation contains “forward - looking statements” within the meaning of the Private Securities Litigation Reform Act of 19 95. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, pr oducts and services, and other statements identified by words such as “may,” “will,” “should,” “anticipates,” “believes,” “expects,” “plans,” “future,” “intends,” “could,” “estimate,” “predict,” “projec ts, ” “targeting,” “potential” or “contingent,” “guidance,” “anticipates,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, our 2020 outlook and statements regarding our market and growth opportunities. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive risks, trends and uncertainties that could cause actual results to differ materially from those projected, expressed, or implied by such forward-looking statements. Our actual results could differ materially, and potentially adversely, from those discussed or implied herein. We caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this press release in the context of the risks and uncertainties disclosed in our SEC filings, including our most recent Annual Report on Form 10-K for 2019 filed with the SEC on March 30, 2020. These filings are available online at www.sec.gov or www.PRTH.com. We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences we anticipate or affect us or our operations in the way we expect. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance. The forward-looking statements included in this press release are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements. This communication includes certain non-GAAP financial measures that we regularly review to evaluate our business and trends, measure our performance, prepare financial projections, allocate resources, and make strategic decisions. We believe these non-GAAP measures help illustrate the underlying financial and business trends relating to our results of operations and comparability between current and prior periods. We also use these non-GAAP measures to establish and monitor operational goals. However, these non-GAAP measures are not superior to or a substitute for prominent measurements calculated in accordance with GAAP. Rather, the non-GAAP measures are meant to be a complement to understanding measures prepared in accordance with GAAP. 2
Table of Contents I. I. Exec ecutiv ive Summary 4 II. II. Reven enue Seg egments 9 III. Tech echnology & Oper erations 17 IV. Growth Opportunit ities 20 V. V. Managemen ent 25 3
Executive Summary
Priority Overview Priority is a leading provider of merchant acquiring and commercial payment solutions. The Company leverages a proprietary platform of microservices purpose-built to monetize vertically-specialized merchant networks Net Revenue by Segment (1) Gross Profit by Segment (2) Priority Overview • Priority operates the following business segments: Consumer Payments , ($mm) ($mm) Consumer Consumer Commercial Payments , and Integrated Partners Commercial Commercial Integrated Integrated – Consumer Payments : Provides full-service payment processing and payment- enabled solutions for B2C transactions, leveraging Priority’s proprietary $372 software platform, distributed through ISOs, agents, banks, and ISVs 4% – Commercial Payments : Provides market-leading accounts payable automation 7% software, payment processing and managed services to industry leading financial institutions (including Citi, MasterCard, and AMEX) and corporations – Integrated Partners : Provides vertical-specific payment-enabled software solutions for high-growth markets $119 • Priority’s solutions are delivered via its internally -developed infrastructure and product platforms 11% 85 % Margin – Vortex Cloud & OS: Curated cloud and API-driven operating system providing 10% 47 % Margin payment integration and infrastructure for operations and development 89% – MX Connect : Portfolio and customer relationship management system for Priority’s reseller partners – MX Merchant : Customizable virtual terminal with proprietary business 28 % Margin 79% management tools and add- on “apps” – CPX : Buyer & supplier payment enablement platform in an accounts payable automation environment • Priority primarily generates revenue from volume-based payment processing fees, along with software and subscription fees and managed services fees for 2019A 2019A supporting B2B programs (1) Net Revenue defined as Gross Revenue less any interchange and assessment fees, sponsor bank fees, association fees, certain residuals and discounts related to managed services 5 (2) Gross profit defined as revenue less any interchange and assessment fees, sponsor bank fees, association fees, residuals, expenses related to managed services and other cost of services
Priority Key Highlights 5 th $48 B+ $370 M + $72 M + 2019 Largest Non-Bank 2019 2019 Consolidated Adjusted Merchant Acquirer Volume Net Revenue EBITDA (1) 4,900 + 11 % 1,000 + 209 k+ New Merchants Total LTM Volume Enterprise Merchant Base Onboarded per Month Attrition (2) Clients (1) Includes pro forma impacts for acquisitions, contracted savings, and professional fee adjustments as detailed in our 2019 Form 10-K (2) LTM as of February 2020. Excludes Specialty Acquiring, Company.com, Direct Connect and SignaPay. 6
Priority Enterprise Overview Priority’s purpose -built payment technology and operating platform is designed to monetize vertically focused merchant networks Operations Business Technology Infrastructure Monetizing Powerful Resource Group Resource Group Resource Group Resource Group Leveraging Back-End Payment Distribution Networks Processors, Bank Sponsors and Networks Resellers Vertical Software / Payments Commercial SMB Payments FIs Payments BIN Sponsors Real Estate Healthcare ISVs & VARs Hospitality Consumer Finance Vortex.Cloud Vortex.Connect Vortex.EOS Curated Cloud Infrastructure Enterprise CRM / Data Management Enterprise Operating System 7
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