Repay Q2 Earnings Call Highlights

Repay Q2 Earnings Call Highlights

Repay’s Q2 revenue rose 33% to $100.7 million, helped by one month of contributions from the KUBRA acquisition, while organic growth was 6%. Adjusted EBITDA increased 14% to $36.3 million and free cash flow rose 21% to $27.4 million. Management reported more than $4.5 million in annualized KUBRA synergies and is targeting over $8 million exiting 2026, with longer-term operating and capital-expenditure synergies exceeding $20 million. Repay aims to reduce pro forma net leverage from approximately 3.7 times to below three times within 18 months. Repay reaffirmed its 2026 outlook, calling for $490 million to $500 million in revenue, adjusted EBITDA of $168.5 million to $176 million and organic revenue growth of 10% to 12%. Political-media revenue is expected to contribute $8 million to $10 million, primarily in the second half of the year.

Repay NASDAQ: RPAY reported second-quarter revenue growth of 33% as the payments company began consolidating results from its June acquisition of KUBRA, while management reiterated its full-year outlook and outlined integration, synergy and deleveraging targets. Revenue totaled $100.7 million in the quarter, up 33% from a year earlier and including one month of KUBRA results. Organic revenue growth was 6%, including roughly two percentage points from political media activity, according to Chief Financial Officer Rob Houser.

Adjusted EBITDA was $36.3 million, up 14% year over year, with an adjusted EBITDA margin of about 36%. Adjusted net income was $17.9 million, or $0.20 per share. Free cash flow increased 21% to $27.4 million, representing 75% conversion, while adjusted free cash flow was approximately $29.3 million, or 81% conversion, excluding $1.9 million of technology, merger and integration costs.

Chief Executive Officer John Morris said the KUBRA acquisition, completed in June, substantially expanded Repay’s scale and capabilities in consumer bill payment and communication services. On a pro forma basis, he said the combination “essentially doubled” company revenue and brought annualized payment volume above $130 billion. KUBRA contributed approximately $21 million in June revenue. Houser said KUBRA grew about 6% during the second quarter and about 5% on a pro forma basis for the first half, with management expecting mid-single-digit pro forma growth for the rest of 2026. Management said the combined company can offer clients an end-to-end digital bill-payment platform that includes bill design and presentment, communications, payment processing, clearing and settlement. Morris said existing Repay clients have expressed interest in KUBRA’s bill presentment capabilities, while KUBRA clients are asking about expanded payment channels and modalities.

Repay said it had already realized more than $4.5 million in annualized run-rate synergies exiting the second quarter. The company is targeting more than $8 million in run-rate cost savings exiting 2026 and more than $20 million in operating and capital-expenditure synergies, plus revenue opportunities, exiting 2028. The company plans to unify platforms over the next 18 to 24 months, with several large clients volunteering as early adopters of the upgraded KUBRA platform. Morris said clients will have input on the pace of upgrades and that sales and client-service teams have been insulated from integration work to avoid disrupting core growth.

Consumer payments revenue rose approximately 33% year over year, supported by the KUBRA contribution. Organic growth in the segment was 4%, driven by enterprise-client ramps in automotive and personal-fina.