Priority Technology Q2 Earnings Call Highlights

Priority Technology reported solid Q2 growth: Revenue rose 9% year over year to $262.3 million, while Adjusted EBITDA increased 6% to $59.4 million and adjusted EPS climbed 12% to $0.29. Customer accounts, transaction volume and balances under administration also grew. Payables and Treasury Solutions drove segment growth , with revenue increases of 21.6% and 14.9%, respectively. However, both segments faced margin pressure from customer mix shifts, lower-margin businesses and higher card-network and interchange costs. The company maintained its 2026 outlook and expects to finish near the high end of its $1.01 billion-$1.04 billion revenue range, but near the low ends of its Adjusted Gross Profit and EBITDA targets. Priority generated $27.4 million in quarterly free cash flow and reduced net leverage to 3.8 times while prioritizing further deleveraging.

Priority Technology reported second-quarter revenue and profit growth, supported by gains across its Merchant Solutions, Payables and Treasury Solutions businesses, while maintaining its full-year outlook. Chairman and Chief Executive Officer Tom Priore said the company generated second-quarter revenue of $262.3 million, up 9% from the prior-year period. Adjusted gross profit increased 8% to $99.9 million, while Adjusted EBITDA rose 6% to $59.4 million. Adjusted earnings per share increased 12% year over year to $0.29. The company ended the quarter with 1.8 million customer accounts on its commerce platform, an increase of nearly 13% from a year earlier. Annual transaction volume rose 8% to $151 billion, and average account balances under administration increased 26% to $1.8 billion.

For the first six months of 2026, Priority reported revenue of $511.8 million, up 10% from the comparable period last year. Year-to-date adjusted gross profit rose 11% to $198.7 million and Adjusted EBITDA increased just over 9% to $117.5 million.

Chief Financial Officer Tim O’Leary said consolidated revenue increased 9.4% in the quarter, including 7.2% organic growth. Payables revenue increased 21.6%, Treasury Solutions revenue grew 14.9%, and Merchant Solutions revenue rose 7.7%, including 4.5% organic growth. O’Leary said Payables and Treasury Solutions represented 66% of total adjusted gross profit on an organic trailing-12-month basis.

Merchant Solutions generated $175.8 million in second-quarter revenue, up $12.5 million from the prior year. The increase included organic growth as well as contributions from the Boom and DMS acquisitions completed in the second half of 2025. Total card volume in Merchant Solutions rose 3.6% to $19.5 billion. The company cited strength in wholesale trade and retail, including convenience stores, gas stations and food stores. Home furnishings and building materials declined, while construction and restaurants remained soft year over year, though construction and restaurant trends improved from the first quarter. Merchant Solutions adjusted gross profit increased 12.4% to $39.8 million, and adjusted gross margin rose by more than 100 basis points to 22.7%. O’Leary attributed the improvement to the Boom and DMS acquisitions, partly offset by higher residual expenses. Segment Adjusted EBITDA rose 11.3% to $30.9 million.

Payables revenue increased 21.6% to $30.4 million. Buyer-funded revenue rose 26.3% to $25.3 million, while supplier-funded revenue increased 2.6% to $5.1 million. However, adjusted gross profit declined 10.4% to $6.9 million, and gross margin fell 760 basis points to 21.4%. O’Leary said the margin decline reflected a greater mix of larger enterprise customers with lower initial ma...