Priority Technology Holdings, Inc. Slides Supplementing Fourth - PowerPoint PPT Presentation

Priority Technology Holdings, Inc. Slides Supplementing Fourth Quarter and Full Year 2019 Earnings Call 1

Fourth Quarter 2019 2

Revenue – Q4 2019 vs. Q4 2018 • Revenue increased $9.5 million, or 10.7%, to $98.2 million – Consumer Payments increased 7.9% to $87.4 million from $81.0 million – Commercial Payments declined 6.0% to $6.5 million from $6.9 million – Integrated Partners amounted to $4.3 million compared with $0.8 million in the fourth quarter of 2018 • Subscription-billing e-commerce revenue declined $5.3 million from $6.8 million in 2018 to $1.5 million in 2019 • Adjusted revenue of $96.6 million increased $14.7 million, or 18.0% – Consumer Payments adjusted revenue increased $11.6 million, or 15.7% 3

Merchant Bankcard – Q4 2019 vs. Q4 2018 4

Subscription-Billing e-Commerce Revenue Trend The comparative consolidated revenue has been negatively affected by the wind-down of high- margin accounts with certain subscription-billing e-commerce merchants due to industry-wide changes for enhanced card association compliance. During the fourth quarter 2019 this decline bottomed, and we have begun to experience growth moving into the 2020 first quarter. 5

Gross Profit – Q4 2019 vs. Q4 2018 • Gross profit of $31.4 million increased $4.1 million, or 15.1% – Gross profit margin increased 124 bps from 30.8% to 32.0% • Gross profit associated with subscription-billing e-commerce merchants was $0.7 million in the fourth quarter of 2019, compared with $3.0 million in the fourth quarter of 2018 • Adjusted gross profit increased by $6.4 million from $24.3 million to $30.7 million – Adjusted gross profit margin increased 209 bps from 29.7% to 31.8% 6 Any differences are due to rounding

Income from Operations – Q4 2019 vs. Q4 2018 • Income from Operations declined $1.6 million to $1.1 million from $2.7 million – Consumer Payments declined 4.9% to $9.9 million – Commercial Payments increased $0.4 million to $0.2 million – Integrated Partners increased $0.7 million from a loss of $1.3 million to a loss of $0.6 million – Corporate Expense increased 36.1% to $8.5 million from $6.2 million • Adjusted Income from Operations increased $3.5 million to $5.2 million – Consumer Payments increased 23.2% to $9.2 million 7

Subscription-Billing e-Commerce Gross Profit & Income from Operations Trend The comparative consolidated gross profit and income from operations have also been negatively affected by the wind-down of high-margin accounts with certain subscription-billing e-commerce merchants. This gross profit and income from operations were entirely within the Consumer Payments segment. During the fourth quarter 2019 this decline bottomed, and we have begun to experience growth moving into the 2020 first quarter. 8

Certain Expenses Operating expenses in both comparative quarters include certain costs that the company considers non-recurring in nature. These expenses were $4.9 million ($1.7 million in Integrated Partners and $3.2 million in Corporate expense) in the fourth quarter of 2019, and $2.1 million (in Corporate expense) in the fourth quarter of 2018. In 2019, these expenses were associated with transitional integration services from YapStone, certain litigation costs, and acquisition related diligence expenses. In 2018, these expenses were associated with legal, accounting, advisory and consulting costs, largely associated with the conversion to a public company, as well as certain litigation costs. 9

Interest Expense – Q4 2019 vs. Q4 2018 Interest expense of $10.1 million in the fourth quarter of 2019 increased by $2.0 million from $8.0 million in the 2018 fourth quarter. The increase is due to higher outstanding borrowings driven by debt financing of acquisitions subsequent to the fourth quarter of 2018. Any differences are due to rounding 10

Adjusted EBITDA – Q4 2019 vs. Q4 2018 Adjusted EBITDA of $16.2 million increased $4.2 million from $12.0 million in 2018 11

Full Year 2019 12

Revenue – Full Year 2019 vs. 2018 • Revenue declined $3.9 million, or 1.1%, to $371.9 million – Consumer Payments declined 4.7% to $330.6 million from $347.0 million – Commercial Payments declined 4.0% to $26.0 million from $27.1 million – Integrated Partners amounted to $15.3 million compared with $1.8 million in 2018 • Subscription-billing e-commerce revenue declined $51.5 million from $59.3 million in 2018 to $7.8 million in 2019 • Adjusted revenue of $364.1 million increased $47.6 million, or 15.0% – Consumer Payments adjusted revenue increased $35.1 million, or 12.2% 13

Merchant Bankcard – Full Year 2019 vs. 2018 14

Gross Profit – Full Year 2019 vs. 2018 • Gross profit of $119.3 million increased $12.8 million, or 12.0%. – Gross profit margin increased 373 bps from 28.3% to 32.1% • Gross profit associated with subscription-billing e-commerce merchants was $3.5 million in 2019, compared with $21.3 million in 2018. • Adjusted gross profit increased by $30.6 million from $85.2 million to $115.8 million – Adjusted gross profit margin increased 488 bps from 26.9% to 31.8% 15 Any differences are due to rounding

Income from Operations – Full Year 2019 vs. 2018 • Income from Operations declined $9.2 million to $7.2 million from $16.4 million – Consumer Payments declined 31.4% to $32.2 million – Commercial Payments increased $0.1 million to a loss of $0.9 million – Integrated Partners increased $2.7 million from a loss of $2.0 million to $0.7 million – Corporate Expense declined 10.1% to $24.9 million from $27.7 million • Adjusted Income from Operations increased $5.1 million to $12.6 million – Consumer Payments increased 11.8% to $28.7 million 16

Certain Expenses – Full Year 2019 vs. 2018 Operating expenses in both comparative years include certain costs that the company considers non-recurring in nature. These expenses were $8.9 million ($2.9 million in Integrated Partners and $6.0 million in Corporate expense) in 2019, and $12.4 million (in Corporate expense) in 2018. In 2019, these expenses were associated with transitional integration services from YapStone, certain litigation costs, and acquisition related diligence expenses. In 2018, these expenses were associated with legal, accounting, advisory and consulting costs, largely associated with the conversion to a public company, as well as certain litigation costs. 17

Interest Expense – Full Year 2019 vs. 2018 Interest expense of $40.7 million in 2019 increased by $10.7 million from $29.9 million in 2018. The increase is due to higher outstanding borrowings driven by debt financing of acquisitions in 2019. Any differences are due to rounding 18

Adjusted EBITDA – Full Year 2019 vs. Full Year 2018 Adjusted EBITDA of $58.9 million increased $9.5 million from $49.4 million in 2018 19