Priority Technology (NASDAQ:PRTH) management highlighted year-over-year growth in revenue, adjusted profitability, and customer activity during its fourth quarter and full-year 2025 earnings call, while outlining 2026 guidance that anticipates continued expansion despite interest-rate and macroeconomic headwinds.
Full-year 2025 growth and expanding platform metrics
Chairman and CEO Tom Priore said the company grew net revenue 8% in fiscal 2025 and reported adjusted gross profit and adjusted EBITDA growth of 14% and 10%, respectively. Adjusted EPS increased by $0.52, or 102% year over year, to $1.03 for fiscal 2025.
- Total customer accounts on the commerce platform ending the year at 1.8 million, up from 1.2 million a year earlier
- Annual transaction volume rising by $20 billion to $150 billion
- Average account balances under administration increasing by $500 million to $1.7 billion
Fourth-quarter results driven by Payables and Treasury Solutions
For the fourth quarter, management reported revenue of $247.1 million, up 9% from the prior-year period. Adjusted gross profit increased 19% to $100.2 million, and adjusted EBITDA rose 16% to $60.1 million.
Adjusted gross profit margin was 40.6%, up 360 basis points year over year. Priore attributed the improvement to continued performance in Payables and Treasury Solutions and the accretive impact of acquisitions completed in the second half of 2025.
CFO Tim O’Leary added that full-year consolidated revenue growth of 8.3% included 7.7% organic growth, excluding acquisitions. In the fourth quarter, reported revenue growth of 8.8% included 6.8% organic growth, which O’Leary said was fueled by 13% growth in Payables and 18% growth in Treasury Solutions. Merchant Solutions posted 6% reported growth in the quarter, including 3% organic growth.
O’Leary said Payables and Treasury Solutions represented 62% of adjusted gross profit for the full year and 60% in the fourth quarter (or 63% and 65%, respectively, excluding acquisition impacts). He also noted that gross margin expansion was aided by segment mix and acquisition-related activity. Even after normalizing for a non-recurring inventory write-off that reduced gross margins in the fourth quarter of 2024, he said year-over-year margin expansion in the fourth quarter was still 210 basis points.
Segment performance: Merchant Solutions, Payables, Treasury Solutions
Merchant Solutions: Fourth-quarter revenue was $165.3 million, up $9.6 million, or 6.2%, from the prior year. O’Leary said growth reflected 3% organic growth in the core portfolio plus just over 3% from the Boom Commerce and DMS acquisitions. He reiterated that slower growth in certain verticals—restaurants, construction, and select retail trade markets such as home furnishings and building materials—had weighed on the core portfolio in the second half of the year.
Total card volume in Merchant Solutions was $18.5 billion, up 2.3% year over year. The company averaged 179,000 merchant accounts during the quarter, compared with 177,000 a year earlier, and new monthly boards averaged 3,000. Adjusted gross profit rose 25.5% to $40.1 million, with gross margin of 24.3% improving 370 basis points, which O’Leary attributed to the acquisitions. Excluding acquisitions, organic gross profit was flat and gross margin was 60 basis points lower. Adjusted EBITDA increased 14.9% to $30.6 million, as acquisition-related EBITDA more than offset lower EBITDA from specialized acquiring in the core portfolio.
Payables: Revenue grew 12.7% year over year to $26.8 million. Buyer-funded revenue increased 10.9% to $20.9 million, while supplier-funded revenue rose 20% to $5.8 million. Adjusted gross profit increased 15.9% to $7.4 million and gross margin was 27.6%, more than 70 basis points higher than the prior-year quarter. Payables adjusted EBITDA was $3.9 million, up 60.8%, which O’Leary attributed to operating leverage and nearly a 9% reduction in operating expenses before depreciation and amortization.
In the Q&A, O’Leary explained that supplier-funded issuing dollar volume declined year over year largely due to one bank channel partner being acquired, which put a contract on hold temporarily. He said the company has since “re-won” that contract with the acquiring bank. He also said supplier-funded revenue benefited from growing balances in the company’s ACH.com business, with higher float balances contributing to revenue growth.
Treasury Solutions: Fourth-quarter revenue increased 17.8% to $57.3 million, driven by enrollment trends and an increase in billed clients enrolled in CFTPay to more than 1.1 million, plus a 30% increase in integrated partners and same-store sales growth from existing Passport program managers. O’Leary said higher account balances in CFTPay and Passport more than offset lower interest rates versus the prior-year quarter. Adjusted gross profit rose 15.7% to $52.7 million, and adjusted gross margin was 91.9%, down about 170 basis points year over year due to mix shift. O’Leary cited 110% revenue growth in Passport and over 200% revenue growth in Priority Tech Ventures, both of which carry lower gross margins than the CFTPay platform. Treasury Solutions adjusted EBITDA increased 13.2% to $47.6 million.
Expenses, leverage, and cash flow
O’Leary said fourth-quarter salaries and benefits expense rose 24.2% to $28.8 million, driven primarily by a $2.4 million increase in stock compensation expense and a $2.1 million increase related to acquisition activity. SG&A increased 38.8% to $17.7 million due to higher accounting and SOX-related costs as well as increased cloud and software expenses.
On the balance sheet, the company ended the quarter with $1.02 billion of debt and $177 million of available liquidity, including $100 million of available revolver capacity and $77 million of unrestricted cash. O’Leary said the company generated $28 million of free cash flow in the quarter, based on roughly $60 million of adjusted EBITDA less $6 million in capex, $22 million of interest expense, and just over $4 million in income taxes. He framed the run-rate equivalent as about $112 million, or nearly $1.34 of free cash flow per diluted share.
For the trailing twelve months ended December 31, the company reported adjusted EBITDA of $225.2 million and net debt of $945.4 million, resulting in net leverage of 4.2x, down from 4.4x at the end of the third quarter. O’Leary added that pro forma net leverage would have been 3.9x at year-end when including the run-rate EBITDA impact of acquisitions.
O’Leary also said the company remediated the material weakness in internal controls over financial reporting that had been identified as of December 31, 2024, and that internal assessments and external audits confirmed effective internal controls as of the end of fiscal 2025.
2026 outlook and management commentary on macro and AI
Management guided to 2026 revenue of $1.01 billion to $1.04 billion, representing 6% to 9% growth, including 4% to 7% organic growth. Adjusted gross profit is expected to range from $405 million to $425 million, with gross margins expanding 75 to 100 basis points from full-year 2025 levels. Adjusted EBITDA is forecast at $230 million to $245 million.
By segment, O’Leary said the company expects Merchant Solutions revenue growth of 6% to 8%, including 3% to 4% organic growth, supported by adding new resellers and winning large enterprise customers, plus contributions from 2025 acquisitions. Payables organic growth is expected at 8% to 10%, which he said reflects headwinds from lower interest rates and card network changes. Treasury Solutions growth expectations were described as “low double-digit” for 2026, reflecting lower interest rates and the effect of a larger revenue base after strong growth over the past three years. O’Leary also noted the guidance incorporates roughly $10 million of intercompany eliminations at the consolidated level.
In response to questions about macro trends, O’Leary said conditions stabilized in the fourth quarter versus the third quarter, and that 2026 guidance assumes a similar macro environment to current conditions without assuming improvement or deterioration. He added that expected interest rate declines remain a headwind for the business overall.
Priore discussed the company’s positioning amid what he described as widely publicized research on AI’s impact on SaaS business models and the declining cost of app development. He said Priority has been positioning for these changes by maintaining a “disciplined” tech expense framework, building Priority Tech Ventures to pursue new verticals with large addressable markets, and optimizing the Priority Commerce Engine and API to serve as infrastructure for emerging SaaS providers seeking payments and treasury tools without managing compliance and regulatory requirements themselves.
On investment priorities, management said there were no strategic shifts, but it plans to continue investing in direct sales to pursue large enterprise customers and to remain discerning on M&A. Priore also referenced investment focus in verticals where collecting, storing, and sending money are important parts of the value chain, including real estate, healthcare, and NIL-related college sports, and he noted the company continues to explore international remittance opportunities.
The company also reiterated at the start of the call that it would not discuss or answer questions related to the special committee’s evaluation of a take-private proposal.
About Priority Technology (NASDAQ:PRTH)
Priority Technology Acquisition Corp is a special purpose acquisition company formed to effect a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization or similar business combination with one or more businesses in the technology sector. As a blank-check company, it does not conduct any operations of its own and holds the proceeds from its initial public offering in a trust account pending the identification and completion of a business combination.
The company’s management team is focused on evaluating target businesses that offer scalable technology products or services, including software, digital platforms and related infrastructure.
