RPAY Filings — Repay Holdings Corp

RPAY Filings — Repay Holdings Corp - FilingSpy

10-Q · Quarter ended Jun 30, 2026 · SEC filing ↗

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Management's Discussion and Analysis

For purposes of this section, "Repay", the “Company", "we", or "our" refer to Repay Holdings Corporation and its subsidiaries, unless the context otherwise requires. Certain figures have been rounded for ease of presentation and may not sum due to rounding. Forward-Looking Statements Statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including those set forth under Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. See “Cautionary Note Regarding Forward-Looking Statements” in this Form 10-Q for a discussion of certain uncertainties, risks and assumptions associated with forward-looking statements. Overview We provide integrated payment processing solutions to industry-oriented markets in which clients have specific transaction processing needs. We refer to these markets as “vertical markets” or “verticals.” Our proprietary, integrated payment technology platform reduces the complexity of the electronic payments process for businesses, while enhancing their consumers’ overall experience. We are a payments innovator, differentiated by our proprietary, integrated payment technology platform and our ability to reduce the complexity of the electronic payments for businesses. We intend to continue to strategically target verticals where we believe our ability to tailor payment solutions to our client needs, our deep knowledge of our vertical markets and the embedded nature of our integrated payment solutions will drive strong growth by attracting new clients and fostering long-term client relationships. We report our financial results based on two reportable segments. Consumer Payments – Our Consumer Payments segment provides an end-to-end bill payment platform, including bill design & presentment, communication services, and payment processing solutions (including debit and credit card processing, ACH processing and other electronic payment acceptance solutions, as well as our loan disbursement product) that enable our clients to notify, distribute billing statements, collect payments from and disburse funds to consumers and includes our RCS offering. RCS is our proprietary clearing and settlement platform through which we market customizable payment processing programs to other ISOs and payment facilitators. In addition, the Company provides professional services to clients for customization and configuration of the product suite offering. The strategic vertical markets served by our Consumer Payments segment primarily include utilities, personal loans, automotive loans, government, receivables management, financial institutions, credit unions, mortgage servicing, consumer healthcare, insurance, and diversified retail. Business Payments – Our Business Payments segment provides payment processing solutions (including accounts payable automation, debit and credit card processing, virtual credit card processing, ACH processing and other electronic payment acceptance solutions) that enable our clients to collect payments from or send payments to other businesses. The strategic vertical markets served within our Business Payments segment primarily include retail automotive, education, field services, governments and municipalities, healthcare, media, HOA management and hospitality. Macroeconomic Conditions We have been monitoring the current economic environment in the U.S. and globally – characterized by heightened inflation (including changes in wages), evolving U.S. trade policies, supply chain issues and slower growth. Such macroeconomic conditions may continue to evolve in ways that are difficult to fully anticipate and may also include increased levels of unemployment and/or a recession. Some or all of these market factors have and could continue to adversely affect our payment volumes from the consumer loan market, the receivables management industry and consumer and commercial spending. The effect of these events on our financial condition, results of operations and cash flows is uncertain and cannot be predicted at this time. Finally, the impact of all of these various events on our results in the first six months of 2026 may not be necessarily indicative of their impact on our results for the remainder of 2026. 28 Business Combination The Company was formed upon closing of the merger of Hawk Parent with a subsidiary of Thunder Bridge, a special purpose acquisition company, on July 11, 2019. On the closing of the Business Combination, Thunder Bridge changed its name to “Repay Holdings Corporation.” Key Factors Affecting Our Business Key factors that we believe impact our business, results of operations and financial condition include, but are not limited to, the following: •the dollar amount volume and the number of transactions that are processed by the clients that we currently serve; •our ability to attract new clients and onboard them as active processing clients; •our ability to (i) successfully integrate recent acquisitions and (ii) complete future acquisitions; •our ability to offer new and competitive payment technology solutions to our clients; and •general economic conditions and consumer finance trends. Key Components of Our Revenues and Expenses Revenues Revenue. As our clients process increased volumes of payments, our revenues increase as a result of the fees we charge for processing these payments. Most of our revenues are derived from volume-based payment processing fees (“discount fees”) and other related fixed per transaction fees. Discount fees represent a percentage of the dollar amount of each credit or debit transaction processed and include fees relating to processing and services that we provide. The transaction price for such processing services is determined, based on the judgment of management, considering factors such as margin objectives, pricing practices and controls, client segment pricing strategies, the product life cycle and the observable price of the service charged to similarly situated clients. During the three and six months ended June 30, 2026 and 2025, our chargeback rate was less than 1% of our card payment volume. With the KUBRA Acquisition, a portion of revenues are derived from bill presentment, communication services, and professional services solutions. Revenues derived from our bill presentment solutions represent a fixed fee per bill, which includes the design, preparation, printing, and distribution of paper or electronic bills, invoices, and documents. Communication services solutions primarily consist of automated messaging, including text and email communications, and service outage notifications for our utility clients. Revenues derived from communication services represent a fixed fee per an interaction, annual subscription fees, and annual maintenance and support fees. In addition, the Company provides professional services to clients for customization and configuration of the product suite offering. Revenues from professional services are recognized on a contract basis. Expenses Costs of services. Costs of services primarily include commissions to our software integration partners and other third-party processing costs, such as front and back-end processing costs and sponsor bank fees. Selling, general and administrative. Selling, general and administrative expenses include salaries, share-based compensation and other employment costs, professional service fees, rent and utilities, and other operating costs. Depreciation and amortization. Depreciation expense consists of depreciation on our investments in property, equipment and computer hardware. Depreciation expense is recognized on a straight-line basis over the estimated useful life of the asset. Amortization expense for software development costs and purchased software is recognized on the straight-line method over a three-year estimated useful life, between eight to ten years estimated useful life for client relationships and channel relationships, and between two to five years estimated useful life for non-compete agreements. Interest income. Interest income consists of interest received on our cash and cash equivalents. 29 Interest expense. Interest expense consists of interest paid in respect of our indebtedness under the revolving credit facility, Term Loan Facility and convertible senior notes, amortization of deferred debt issuance costs and interest on finance lease liabilities. Change in fair value of tax receivable liability. This amount represents the change in fair value of the tax receivable agreement liability. The TRA liability is carried at fair value; so, any change to the valuation of this liability is recognized through this line in Other income (expense). The change in fair value can result from the redemption or exchange of Post-Merger Repay Units for Class A common stock of Repay Holdings Corporation, through accretion of the discounted fair value of the expected future cash payments, changes to income tax rates, or changes to the discount rate, or Early Termination Rate, used to determine the fair value of the liability. Results of Operations (Unaudited) Three Months Ended June 30, Six Months Ended June 30, ($ in thousands, except per share data) 2026 2025 2026 2025 Revenue $ 100,705 $ 75,626 $ 181,499 $ 152,951 Operating expenses Costs of services (exclusive of depreciation and amortization shown separately below) 30,079 18,404 49,386 37,068 Selling, general and administrative 46,247 32,864 82,201 69,851 Depreciation and amortization 27,636 25,481 53,176 50,775 Impairment loss — 103,781 — 103,781 Total operating expenses 103,962 180,530 184,763 261,475 Loss from operations (3,257 ) (104,904 ) (3,264 ) (108,524 ) Other income (expense) Interest income 289 1,197 704 2,553 Interest expense (7,983 ) (3,087 ) (11,827 ) (6,194 ) Loss on extinguishment of debt (974 ) — (974 ) — Change in fair value of tax receivable liability (2,547 ) (2,509 ) (7,110 ) (5,531 ) Other income (loss), net 278 (26 ) 276 (253 ) Total other income (expense) (10,937 ) (4,425 ) (18,931 ) (9,425 ) Loss before income tax benefit (14,194 ) (109,329 ) (22,195 ) (117,949 ) Income tax benefit 2,665 1,297 632 1,749 Net loss $ (11,529 ) $ (108,032 ) $ (21,563 ) $ (116,200 ) Less: Net loss attributable to non-controlling interest (543 ) (5,781 ) (637 ) (6,002 ) Net loss attributable to the Company $ (10,986 ) $ (102,251 ) $ (20,926 ) $ (110,198 ) Weighted-average shares of Class A common stock outstanding - basic and diluted 83,285,379 88,647,823 82,903,732 88,825,785 Loss per Class A share attributable to the Company - basic and diluted $ (0.13 ) $ (1.15 ) $ (0.25 ) $ (1.24 ) Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025 Revenue Total revenue was $100.7 million for the three months ended June 30, 2026, and $75.6 million for the three months ended June 30, 2025, an increase of $25.1 million or 33.2%. This increase was the result of newly signed clients and the growth of our existing clients, as well as the KUBRA Acquisition. For the three months ended June 30, 2026, incremental revenues of approximately $20.8 million are attributable to KUBRA. Cost of Services Costs of services were $30.1 million for the three months ended June 30, 2026, and $18.4 million for the three months ended June 30, 2025, an increase of $11.7 million or 63.6%. This increase was the result of newly signed clients and the growth of our existing clients, as well as the KUBRA Acquisition. For the three months ended June 30, 2026, incremental cost of services of approximately $11.4 million are attributable to KUBRA. 30 Selling, General and Administrative Expenses Selling, general and administrative expenses were $46.2 million for the three months ended June 30, 2026, and $32.9 million for the three months ended June 30, 2025, an increase of $13.4 million or 40.8%, primarily due to a $5.0 million increase from the KUBRA Acquisition, a $3.9 million increase in legal and transaction expenses related to the KUBRA Acquisition and a settlement of litigation, a $2.0 million increase in compensation expenses and a $1.7 million increase in equity compensation expenses. Depreciation and Amortization Expenses Depreciation and amortization expenses were $27.6 million for the three months ended June 30, 2026, and $25.5 million for the three months ended June 30, 2025, an increase of $2.2 million or 8.6%, primarily driven by an increase in client relationships amortization and depreciation and amortization related to the KUBRA Acquisition of $1.7 million. Impairment Loss We incurred a non-cash impairment loss of $103.8 million during the three months ended June 30, 2025, primarily due to a $103.2 million goodwill impairment loss related to the Consumer Payments segment. The fair value of the Consumer Payments reporting unit was primarily impacted by a change in the discount rate and the decrease to comparable publicly traded companies’ multiples. Interest Income Interest income was $0.3 million for the three months ended June 30, 2026, and $1.2 million for the three months ended June 30, 2025, due to lower average interest rates earned on our cash and cash equivalents. Interest Expense Interest expense was $8.0 million for the three months ended June 30, 2026, and $3.1 million for the three months ended June 30, 2025, due to a higher outstanding principal balance under the Term Loan Facility and convertible senior notes. Change in Fair Value of Tax Receivable Liability We incurred a loss, related to accretion expense and fair value adjustment of the tax receivable liability of $2.5 million for the three months ended June 30, 2026, compared to a $2.5 million loss for the three months ended June 30, 2025. There was no difference in the fair value adjustments because the lower discount rate, or Early Termination Rate, on June 30, 2026, compared to June 30, 2025, was offset by a higher Tax Receivable Liability over the same measurement period. Income Tax Benefit Income tax benefit was $2.7 million for the three months ended June 30, 2026. This was a result of the operating loss incurred by us, primarily driven by the change in fair value of the tax receivable liability, stock-based compensation deductions and the amortization of assets acquired in the Business Combination and prior acquisitions, partially offset by stock-based compensation adjustments net tax shortfall, the net tax impact of the write-off of deferred debt issuance costs, and the net tax impact of non-deductible transaction costs from the KUBRA Acquisition, which are all required to be recorded discretely in the interim period in which they occur. The income tax benefit was $1.3 million for the three months ended June 30, 2025, which was a result of the operating loss incurred by us, primarily driven by the change in fair value of the tax receivable liability, stock-based compensation deductions and the amortization of assets acquired in the Business Combination and prior acquisitions, partially offset by stock-based compensation expense net tax shortfall and the impact of the recording of the non-cash impairment loss. 31 Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 Revenue Total revenue was $181.5 million for the six months ended June 30, 2026, and $153.0 million for the six months ended June 30, 2025, an increase of $28.5 million or 18.6%. This increase was the result of newly signed clients and the growth of our existing clients, as well as the KUBRA Acquisition. For the six months ended June 30, 2026, incremental revenues of approximately $20.8 million are attributable to KUBRA. Cost of Services Costs of services were $49.4 million for the six months ended June 30, 2026, and $37.1 million for the six months ended June 30, 2025, an increase of $12.3 million or 33.2%. This increase was the result of newly signed clients and the growth of our existing clients, as well as the KUBRA Acquisition. For the six months ended June 30, 2026, incremental cost of services of approximately $11.4 million are attributable to KUBRA. Selling, General and Administrative Expenses Selling, general and administrative expenses were $82.2 million for the six months ended June 30, 2026, and $69.9 million for the six months ended June 30, 2025, an increase of $12.4 million or 17.8%, primarily due to a $5.0 million increase from the KUBRA Acquisition, a $4.5 million increase in legal and transaction expenses related to the KUBRA Acquisition and a settlement of litigation, as well as a $3.0 million increase in compensation expenses. Depreciation and Amortization Expenses Depreciation and amortization expenses were $53.2 million for the six months ended June 30, 2026, and $50.8 million for the six months ended June 30, 2025, an increase of $2.4 million or 4.7%, primarily driven by an increase in client relationships amortization and depreciation and amortization related to the KUBRA Acquisition of $1.7 million. Impairment Loss We incurred a non-cash impairment loss of $103.8 million during the six months ended June 30, 2025, primarily due to a $103.2 million goodwill impairment loss related to the Consumer Payments segment. The fair value of the Consumer Payments reporting unit was primarily impacted by a change in the discount rate and the decrease to comparable publicly traded companies’ multiples. Interest Income Interest income was $0.7 million for the six months ended June 30, 2026, and $2.6 million for the six months ended June 30, 2025, due to lower average interest rates earned on our cash and cash equivalents. Interest Expense Interest expense was $11.8 million for the six months ended June 30, 2026, and $6.2 million for the six months ended June 30, 2025, due to a higher outstanding principal balance under the Term Loan Facility and convertible senior notes. Change in Fair Value of Tax Receivable Liability We incurred a loss, related to accretion expense and fair value adjustment of the tax receivable liability of $7.1 million for the six months ended June 30, 2026, compared to a $5.5 million loss for the six months ended June 30, 2025, an increase of $1.6 million. This increase was due to a higher fair value adjustments related to the tax receivable liability, primarily as a result of accretion, adjustment to the net present value as a result of payments made, and changes to the discount rate, or Early Termination Rate, used to determine the fair value of the liability. 32 Income Tax Benefit Income tax benefit was $0.6 million for the six months ended June 30, 2026. This was a result of the operating loss incurred by us, primarily driven by the change in fair value of the tax receivable liability, stock-based compensation deductions and the amortization of assets acquired in the Business Combination and prior acquisitions, partially offset by stock-based compensation adjustments net tax shortfall, the net tax impact of the write-off of deferred debt issuance costs, and the net tax impact of non-deductible transaction costs from the KUBRA Acquisition, which are all required to be recorded discretely in the interim period in which they occur. The income tax benefit was $1.7 million for the six months ended June 30, 2025, which was a result of the operating loss incurred by us, primarily driven by the change in fair value of the tax receivable liability, stock-based compensation deductions and the amortization of assets acquired in the Business Combination and prior acquisitions, partially offset by stock-based compensation expense net tax shortfall and the impact of the recording of the non-cash impairment loss. Segments We provided our services through two reportable segments: (1) Consumer Payments and (2) Business Payments. The following table presents our segment revenue and selected performance measures. Three Months Ended June 30, Six Months Ended June 30, ($ in thousands) 2026 2025 2026 2025 Revenue Consumer Payments $ 93,730 $ 70,474 $ 168,798 $ 142,417 Business Payments 14,478 10,945 27,469 21,933 Elimination of intersegment revenues (1) (7,503 ) (5,793 ) (14,768 ) (11,399 ) Total revenue $ 100,705 $ 75,626 $ 181,499 $ 152,951 Gross profit (2) Consumer Payments $ 68,015 $ 55,429 $ 128,297 $ 112,139 Business Payments 10,114 7,586 18,584 15,143 Elimination of intersegment revenues (1) (7,503 ) (5,793 ) (14,768 ) (11,399 ) Total gross profit $ 70,626 $ 57,222 $ 132,113 $ 115,883 Total gross profit margin (3) 70% 76% 73% 76% (1)Represents revenue eliminations between business units within the Consumer Payments segment and Business Payments segment, as well as eliminations of intersegment revenues for consolidation purpose. (2)Gross profit represents revenue less cost of services (exclusive of depreciation and amortization). (3)Gross profit margin represents total gross profit / total revenue. Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025 Consumer Payments Revenue for the Consumer Payments segment was $93.7 million for the three months ended June 30, 2026 and $70.5 million for the three months ended June 30, 2025, representing a $23.3 million or 33.1% year-over-year increase. This increase was the result of newly signed clients and the growth of our existing clients, as well as the KUBRA Acquisition. For the three months ended June 30, 2026, incremental revenues of approximately $20.8 million are attributable to KUBRA. Gross profit for the Consumer Payments segment was $68.0 million for the three months ended June 30, 2026 and $55.4 million for the three months ended June 30, 2025, representing a $12.6 million or 22.7% year-over-year increase. This increase was the result of newly signed clients and the growth of our existing clients, as well as the KUBRA Acquisition. For the three months ended June 30, 2026, incremental gross profit of approximately $9.4 million are attributable to KUBRA. 33 Business Payments Revenue for the Business Payments segment was $14.5 million for the three months ended June 30, 2026 and $10.9 million for the three months ended June 30, 2025, representing a $3.5 million or 32.0% year-over-year increase. This increase was the result of the growth from newly signed clients and existing clients, as well as political media spending in the second quarter of 2026. Gross profit for the Business Payments segment was $10.1 million for the three months ended June 30, 2026 and $7.6 million for the three months ended June 30, 2025, representing a $2.5 million or 33.0% year-over-year increase. This increase was the result of the growth from newly signed clients and existing clients, as well as political media spending in the second quarter of 2026. Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 Consumer Payments Revenue for the Consumer Payments segment was $168.8 million for the six months ended June 30, 2026 and $142.4 million for the six months ended June 30, 2025, representing a $26.4 million or 18.5% year-over-year increase. This increase was the result of newly signed clients and the growth of our existing clients, as well as the KUBRA Acquisition. For the six months ended June 30, 2026, incremental revenues of approximately $20.8 million are attributable to KUBRA. Gross profit for the Consumer Payments segment was $128.3 million for the six months ended June 30, 2026 and $112.1 million for the six months ended June 30, 2025, representing a $16.2 million or 14.4% year-over-year increase. This increase was the result of newly signed clients and the growth of our existing clients, as well as the KUBRA Acquisition. For the six months ended June 30, 2026, incremental gross profit of approximately $9.4 million are attributable to KUBRA. Business Payments Revenue for the Business Payments segment was $27.5 million for the six months ended June 30, 2026 and $21.9 million for the six months ended June 30, 2025 representing a $5.5 million or 25.1% year-over-year increase. This increase was the result of the growth from newly signed clients and existing clients, as well as political media spending in the first half of 2026. Gross profit for the Business Payments segment was $18.6 million for the six months ended June 30, 2026 and $15.1 million for the six months ended June 30, 2025, representing a $3.4 million or 22.5% year-over-year increase. This increase was the result of the growth from newly signed clients and existing clients, as well as political media spending in the first half of 2026. 34 Non-GAAP Financial Measures This report includes certain non-GAAP financial measures that management uses to evaluate our operating business, measure our performance and make strategic decisions. Adjusted EBITDA is a non-GAAP financial measure that represents net income prior to interest expense, tax expense, depreciation and amortization, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation charges, transaction expenses, restructuring and other strategic initiative costs and other non-recurring charges. Adjusted Net Income is a non-GAAP financial measure that represents net income prior to amortization of acquisition-related intangibles, as adjusted to add back certain charges deemed to not be part of normal operating expenses, non-cash charges and/or non-recurring charges, such as non-cash impairment loss, non-cash change in fair value of assets and liabilities, share-based compensation expense, transaction expenses, restructuring and other strategic initiative costs, other non-recurring charges, non-cash interest expense and net of tax effect associated with these adjustments. Adjusted Net Income is adjusted to exclude amortization of all acquisition-related intangibles as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Management believes that the adjustment of acquisition-related intangible amortization supplements GAAP financial measures because it allows for greater comparability of operating performance. Although we exclude amortization from acquisition-related intangibles from our non-GAAP expenses, management believes that it is important for investors to understand that such intangibles were recorded as part of purchase accounting and contribute to revenue generation. Adjusted Net Income per share is a non-GAAP financial measure that represents Adjusted Net Income divided by the weighted average number of shares of Class A common stock outstanding (on an as-converted basis assuming conversion of the outstanding Post-Merger Repay Units) for the three and six months ended June 30, 2026 and 2025 (excluding shares subject to forfeiture). We believe that Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per share provide useful information to investors and others in understanding and evaluating its operating results in the same manner as management. However, Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per share are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income, operating profit or any other operating performance measure calculated in accordance with GAAP. Using these non-GAAP financial measures to analyze our business has material limitations because the calculations are based on the subjective determination of management regarding the nature and classification of events and circumstances that investors may find significant. In addition, although other companies in our industry may report measures titled Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share or similar measures, such non-GAAP financial measures may be calculated differently from how we calculate our non-GAAP financial measures, which reduces their overall usefulness as comparative measures. Because of these limitations, you should consider Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per share alongside other financial performance measures, including net income and our other financial results presented in accordance with GAAP. The following tables set forth a reconciliation of our results of operations for the three and six months ended June 30, 2026 and 2025. 35 REPAY HOLDINGS CORPORATION Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA For the three months ended June 30, 2026 and 2025 (Unaudited) Three Months Ended June 30, ($ in thousands) 2026 2025 Revenue $ 100,705 $ 75,626 Operating expenses Costs of services (exclusive of depreciation and amortization shown separately below) $ 30,079 $ 18,404 Selling, general and administrative 46,247 32,864 Depreciation and amortization 27,636 25,481 Impairment loss — 103,781 Total operating expenses $ 103,962 $ 180,530 Loss from operations $ (3,257 ) $ (104,904 ) Other income (expense) Interest income 289 1,197 Interest expense (7,983 ) (3,087 ) Loss on extinguishment of debt (974 ) — Change in fair value of tax receivable liability (2,547 ) (2,509 ) Other income (loss), net 278 (26 ) Total other income (expense) (10,937 ) (4,425 ) Loss before income tax benefit (14,194 ) (109,329 ) Income tax benefit 2,665 1,297 Net loss $ (11,529 ) $ (108,032 ) Add: Interest income (289 ) (1,197 ) Interest expense 7,983 3,087 Depreciation and amortization (a) 27,636 25,481 Income tax benefit (2,665 ) (1,297 ) EBITDA $ 21,136 $ (81,958 ) Non-cash impairment loss (b) — 103,781 Loss on extinguishment of debt (c) 974 — Non-cash change in fair value of assets and liabilities (d) 2,547 2,509 Share-based compensation expense (e) 4,736 3,049 Transaction expenses (f) 2,780 394 Restructuring and other strategic initiative costs (g) 2,113 2,724 Other non-recurring charges (h) 2,015 1,312 Adjusted EBITDA $ 36,301 $ 31,811 36 REPAY HOLDINGS CORPORATION Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA For the six months ended June 30, 2026 and 2025 (Unaudited) Six Months Ended June 30, ($ in thousands) 2026 2025 Revenue $ 181,499 $ 152,951 Operating expenses Costs of services (exclusive of depreciation and amortization shown separately below) $ 49,386 $ 37,068 Selling, general and administrative 82,201 69,851 Depreciation and amortization 53,176 50,775 Impairment loss — 103,781 Total operating expenses $ 184,763 $ 261,475 Loss from operations $ (3,264 ) $ (108,524 ) Other income (expense) Interest income 704 2,553 Interest expense (11,827 ) (6,194 ) Loss on extinguishment of debt (974 ) — Change in fair value of tax receivable liability (7,110 ) (5,531 ) Other income (loss), net 276 (253 ) Total other income (expense) (18,931 ) (9,425 ) Loss before income tax benefit (22,195 ) (117,949 ) Income tax benefit 632 1,749 Net loss $ (21,563 ) $ (116,200 ) Add: Interest income (704 ) (2,553 ) Interest expense 11,827 6,194 Depreciation and amortization (a) 53,176 50,775 Income tax benefit (632 ) (1,749 ) EBITDA $ 42,104 $ (63,533 ) Non-cash impairment loss (b) — 103,781 Loss on extinguishment of debt (c) 974 — Non-cash change in fair value of assets and liabilities (d) 7,110 5,531 Share-based compensation expense (e) 9,756 9,094 Transaction expenses (f) 3,038 1,176 Restructuring and other strategic initiative costs (g) 3,980 6,235 Other non-recurring charges (h) 3,701 2,702 Adjusted EBITDA $ 70,663 $ 64,986 37 REPAY HOLDINGS CORPORATION Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income For the three months ended June 30, 2026 and 2025 (Unaudited) Three Months Ended June 30, ($ in thousands) 2026 2025 Revenue $ 100,705 $ 75,626 Operating expenses Costs of services (exclusive of depreciation and amortization shown separately below) $ 30,079 $ 18,404 Selling, general and administrative 46,247 32,864 Depreciation and amortization 27,636 25,481 Impairment loss — 103,781 Total operating expenses $ 103,962 $ 180,530 Loss from operations $ (3,257 ) $ (104,904 ) Other income (expense) Interest income 289 1,197 Interest expense (7,983 ) (3,087 ) Loss on extinguishment of debt (974 ) — Change in fair value of tax receivable liability (2,547 ) (2,509 ) Other income (loss), net 278 (26 ) Total other income (expense) (10,937 ) (4,425 ) Loss before income tax benefit (14,194 ) (109,329 ) Income tax benefit 2,665 1,297 Net loss $ (11,529 ) $ (108,032 ) Add: Amortization of acquisition-related intangibles (i) 21,954 19,506 Non-cash impairment loss (b) — 103,781 Loss on extinguishment of debt (c) 974 — Non-cash change in fair value of assets and liabilities (d) 2,547 2,509 Share-based compensation expense (e) 4,736 3,049 Transaction expenses (f) 2,780 394 Restructuring and other strategic initiative costs (g) 2,113 2,724 Other non-recurring charges (h) 2,015 1,312 Non-cash interest expense (j) 476 809 Pro forma taxes at effective rate (k) (8,174 ) (6,969 ) Adjusted Net Income $ 17,892 $ 19,083 Shares of Class A common stock outstanding (on an as-converted basis) (l) 88,571,262 93,937,366 Adjusted Net Income per share $ 0.20 $ 0.20 38 REPAY HOLDINGS CORPORATION Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income For the six months ended June 30, 2026 and 2025 (Unaudited) Six Months Ended June 30, ($ in thousands) 2026 2025 Revenue $ 181,499 $ 152,951 Operating expenses Costs of services (exclusive of depreciation and amortization shown separately below) $ 49,386 $ 37,068 Selling, general and administrative 82,201 69,851 Depreciation and amortization 53,176 50,775 Impairment loss — 103,781 Total operating expenses $ 184,763 $ 261,475 Loss from operations $ (3,264 ) $ (108,524 ) Other income (expense) Interest income 704 2,553 Interest expense (11,827 ) (6,194 ) Loss on extinguishment of debt (974 ) — Change in fair value of tax receivable liability (7,110 ) (5,531 ) Other income (loss), net 276 (253 ) Total other income (expense) (18,931 ) (9,425 ) Loss before income tax benefit (22,195 ) (117,949 ) Income tax benefit 632 1,749 Net loss $ (21,563 ) $ (116,200 ) Add: Amortization of acquisition-related intangibles (i) 41,763 38,835 Non-cash impairment loss (b) — 103,781 Loss on extinguishment of debt (c) 974 — Non-cash change in fair value of assets and liabilities (d) 7,110 5,531 Share-based compensation expense (e) 9,756 9,094 Transaction expenses (f) 3,038 1,176 Restructuring and other strategic initiative costs (g) 3,980 6,235 Other non-recurring charges (h) 3,701 2,702 Non-cash interest expense (j) 1,035 1,619 Pro forma taxes at effective rate (k) (12,500 ) (13,411 ) Adjusted Net Income $ 37,294 $ 39,362 Shares of Class A common stock outstanding (on an as-converted basis) (l) 88,189,615 94,146,654 Adjusted Net Income per share $ 0.42 $ 0.42 (a)See footnote (i) for details on amortization and depreciation expenses. (b)Reflects non-cash goodwill impairment loss primarily related to the Consumer Payments segment. (c)Reflects a loss on the extinguishment of the revolving credit facility, net of a write-off of debt issuance costs relating to the principal. (d)Reflects the changes in management’s estimates of the fair value of the liability relating to TRA. (e)Represents compensation expense associated with equity compensation plans. (f)Primarily consists of (i) during the three and six months ended June 30, 2026, professional service fees and other costs incurred in connection with the KUBRA Acquisition and (ii) during the three and six months ended June 30, 2025, professional service fees and other costs incurred in connection with prior transactions. (g)Reflects costs associated with reorganization of operations, consulting fees related to processing services and other operational improvements, including restructuring and integration activities related to acquired businesses, that were not in the ordinary course. (h)Reflects franchise taxes and other non-income based taxes, non-recurring legal and other litigation expenses and payments made to third-parties in connection with our IT security and personnel. 39 (i)For the three and six months ended June 30, 2026, reflects amortization of client relationships, non-compete agreement, software, and channel relationship intangibles acquired through the Business Combination, and client relationships, non-compete agreement, and software intangibles acquired through our acquisitions of TriSource, APS, Ventanex, cPayPlus, CPS, BillingTree, Kontrol, Payix and KUBRA. For the three and six months ended June 30, 2025, reflects amortization of client relationships, non-compete agreement, software, and channel relationship intangibles acquired through the Business Combination, and client relationships, non-compete agreement, and software intangibles acquired through our acquisitions of TriSource, APS, Ventanex, cPayPlus, CPS, BillingTree, Kontrol and Payix. This adjustment excludes the amortization of other intangible assets which were acquired in the regular course of business, such as capitalized internally developed software and purchased software. See additional information below for an analysis of our amortization expenses: Three Months Ended June 30, Six Months Ended June 30, ($ in thousands) 2026 2025 2026 2025 Acquisition-related intangibles $ 21,954 $ 19,506 $ 41,763 $ 38,835 Software 3,833 5,815 9,353 11,297 Amortization $ 25,787 $ 25,321 $ 51,116 $ 50,132 Depreciation 1,849 160 2,060 643 Total Depreciation and amortization (1) $ 27,636 $ 25,481 $ 53,176 $ 50,775 (1)Adjusted Net Income is adjusted to exclude amortization of all acquisition-related intangibles as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions (see corresponding adjustments in the reconciliation of net income to Adjusted Net Income presented above). Management believes that the adjustment of acquisition-related intangible amortization supplements GAAP financial measures because it allows for greater comparability of operating performance. Although we exclude amortization from acquisition-related intangibles from our non-GAAP expenses, management believes that it is important for investors to understand that such intangibles were recorded as part of purchase accounting and contribute to revenue generation. Amortization of intangibles that relate to past acquisitions will recur in future periods until such intangibles have been fully amortized. Any future acquisitions may result in the amortization of additional intangibles. (j)Represents amortization of non-cash deferred debt issuance costs. (k)Represents pro forma income tax adjustment effect associated with items adjusted above. (l)Represents the weighted average number of shares of Class A common stock outstanding (on an as-converted basis assuming conversion of outstanding Post-Merger Repay Units) for the three and six months ended June 30, 2026 and 2025. These numbers do not include any shares issuable upon conversion of our 2026 Notes. See the reconciliation of basic weighted average shares outstanding to the non-GAAP Class A common stock outstanding on an as-converted basis for each respective period below: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Weighted average shares of Class A common stock outstanding - basic 83,285,379 88,647,823 82,903,732 88,825,785 Add: Non-controlling interests Weighted average Post-Merger Repay Units exchangeable for Class A common stock 5,285,883 5,289,543 5,285,883 5,320,869 Shares of Class A common stock outstanding (on an as-converted basis) 88,571,262 93,937,366 88,189,615 94,146,654 Adjusted EBITDA for the three months ended June 30, 2026 and 2025 was $36.3 million and $31.8 million, respectively, representing a 14.1% year-over-year increase. Adjusted EBITDA for the six months ended June 30, 2026 and 2025 was $70.7 million and $65.0 million, respectively, representing an 8.7% year-over-year increase. 40 Adjusted Net Income for the three months ended June 30, 2026 and 2025 was $17.9 million and $19.1 million, respectively, representing a 6.2% year-over-year decrease. Adjusted Net Income for the six months ended June 30, 2026 and 2025 was $37.3 million and $39.4 million, respectively, representing a 5.3% year-over-year decrease. Net loss attributable to the Company for the three months ended June 30, 2026 and 2025 was $11.0 million and $102.3 million, respectively, representing an 89.3% year-over-year improvement in our profitability. Net loss attributable to the Company for the six months ended June 30, 2026 and 2025 was $20.9 million and $110.2 million, respectively, representing an 81.0% year-over-year improvement in our profitability. The increase in Adjusted EBITDA and improvement in net loss attributable to the Company for the three and six months ended June 30, 2026 were primarily due to the KUBRA Acquisition, the organic growth of our business from newly signed clients and the growth of existing clients and cost savings initiatives. The decreases in Adjusted Net Income and net loss attributable to the Company for the three and six months ended June 30, 2026 were primarily due to increased interest expense and lower interest income. Seasonality We have experienced in the past, and may continue to experience, seasonal fluctuations in our revenues as a result of consumer spending and political media spending patterns. Revenues during the first quarter of the calendar year tend to increase in comparison to the remaining three quarters of the calendar year. This increase is due to consumers’ receipt of tax refunds and the increases in repayment activity levels that follow. There are external factors such as weather and natural disasters that can create seasonal impacts, especially in our utilities vertical. In addition, Business Payments revenue from clients in our media payments business is cyclical. Revenue connected to political advertising spending increases significantly during the third and fourth quarter of election years, such as the mid-term and presidential election cycles. Operating expenses show less seasonal fluctuation, with the result that net income is subject to the similar seasonal factors as our revenues. Liquidity and Capital Resources We have historically financed our operations and working capital through net cash from operating activities. As of June 30, 2026, we had $83.7 million of cash and cash equivalents and available borrowing capacity of $100.0 million under the Credit Agreement. This balance does not include restricted cash, which reflects cash accounts holding reserves for potential losses and client settlement funds of $43.8 million as of June 30, 2026. Our primary cash needs are to fund working capital requirements, invest in technology development, fund acquisitions and related contingent consideration, including make principal and interest payments on, refinance or repurchase our outstanding indebtedness, repurchase stock under our Share Repurchase Program, and pay tax distributions to members of Hawk Parent. We expect that our cash flow from operations, current cash and cash equivalents and available borrowing capacity will be sufficient to fund our operations, planned capital expenditures, acquisitions, commitment letters and to service our debt obligations for the next twelve months and the following five years. We are a holding company with no operations and depend on our subsidiaries for cash to fund all of our consolidated operations, including future dividend payments, if any. We depend on the payment of distributions by our current subsidiaries, including Hawk Parent, which distributions may be restricted by law or contractual agreements, including agreements governing their indebtedness. For a discussion of those considerations and restrictions, refer to Part I, Item 1A “Risk Factors - Risks Related to Our Class A Common Stock” in our Annual Report on Form 10-K for the year ended December 31, 2025. On May 16, 2022, our board of directors approved a share repurchase program under which we may repurchase up to $50 million of our outstanding Class A common stock (the “Share Repurchase Program”). On May 8, 2025, our board of directors approved the increase of its authorized Share Repurchase Program to up to $75 million. The Share Repurchase Program has no expiration date but may be modified, suspended or discontinued at any time at our discretion. As of June 30, 2026, we have $23.0 million remaining capacity under the Share Repurchase Program. 41 The following table presents a summary of cash flows from operating, investing and financing activities for the periods indicated: Six Months Ended June 30, ($ in thousands) 2026 2025 Net cash provided by operating activities $ 57,062 $ 35,568 Net cash used in investing activities (394,969 ) (21,002 ) Net cash provided by (used in) financing activities 309,707 (42,295 ) Cash Flow from Operating Activities Net cash provided by operating activities was $57.1 million and $35.6 million for the six months ended June 30, 2026 and 2025, respectively, which reflects net income as adjusted for non-cash operating items including depreciation and amortization, share-based compensation, and changes in working capital accounts. Cash Flow from Investing Activities Net cash used in investing activities was $395.0 million for the six months ended June 30, 2026, due to the KUBRA Acquisition. Net cash used in investing activities was $21.0 million for the six months ended June 30, 2025, due to the capitalization of software development activities. Cash Flow from Financing Activities Net cash provided by financing activities was $309.7 million for the six months ended June 30, 2026, due to the withdrawal of the Term Loan Facility and revolving credit facility under the Second Amended Credit Agreement, partially offset by the repayments of the revolving credit facility under the Second Amended Credit Agreement and the 2026 Notes, a payment under the TRA and the payments for tax withholding related to shares vesting under the Incentive Plan and ESPP. Net cash used in financing activities was $42.3 million for the six months ended June 30, 2025, due to shares repurchased under the Share Repurchase Program, a payment under the TRA and the payments for tax withholding related to shares vesting under the Incentive Plan and ESPP. Indebtedness 2026 Credit Agreement On June 1, 2026, we entered into a Credit Agreement (the “Credit Agreement”) with certain financial institutions party thereto, as lenders, and Truist Bank, as administrative agent. The Credit Agreement provides for (i) a senior secured first lien term loan facility in an aggregate principal amount of $500.0 million (the “Term Loan Facility”) and (ii) a senior secured first lien revolving credit facility in an aggregate principal amount of $100.0 million (the “Revolving Credit Facility”), which includes a $15.0 million sublimit for letters of credit and a $15.0 million swingline subfacility. The Revolving Credit Facility is available in U.S. dollars and Canadian dollars, subject to a cap on Canadian dollar borrowings. The Credit Agreement permits the Borrower to increase the principal amount of the Term Loan Facility or the Revolving Credit Facility subject to certain restrictions and conditions. Borrowings under the Credit Agreement bear interest, at our option, at either (i) a term SOFR-based rate plus an applicable margin or (ii) a base rate plus an applicable margin, in each case as set forth in the Credit Agreement. The applicable margin under the Term Loan Facility is 5.5% for term SOFR loans and 4.5% for base rate loans, and the applicable margin under the Revolving Credit Facility is initially 4.25% for term SOFR loans and 3.25% for base rate loans, with the Revolving Credit Facility margin subject to certain adjustments as set forth in the Credit Agreement. The Term Loan Facility matures on the earlier of (a) the seventh anniversary of the Closing Date and (b) the date that is 91 days prior to the maturity date of the Company’s 2.875% Convertible Senior Notes due 2029 (subject to certain exceptions for adequate liquidity). The maturity date of the Term Loan Facility may be extended, subject to certain terms and conditions. The Term Loan Facility is subject to scheduled quarterly amortization, with the balance due at maturity. The Revolving Credit Facility matures on the earlier of (a) the fifth anniversary of the Closing Date, (b) the date that is 182 days prior to the maturity date of the Company’s 2.875% Convertible Senior Notes 42 due 2029 (subject to certain exceptions for adequate liquidity) and (c) the date that is 91 days prior to the maturity date of the Company’s 2.875% Convertible Senior Notes due 2029 (subject to certain exceptions for adequate liquidity). The Credit Agreement includes customary provisions regarding mandatory and voluntary prepayments and commitment reductions. As of June 30, 2026, we had $500.0 million outstanding under the Term Loan Facility. We paid $0.0 million in fees related to unused commitments for the Revolving Credit Facility for both the three and six months ended June 30, 2026. 2024 Second Amended Credit Agreement On July 10, 2024, we entered into the Second Amended Credit Agreement with certain financial institutions, as lenders, and Truist Bank, as administrative agent. The Second Amended Credit Agreement established a $250.0 million senior secured revolving credit facility. This facility matured on the earlier of (a) July 10, 2029, (b) the date that is 91 days prior to the maturity date of the 2026 Notes (subject to certain exceptions for adequate liquidity) and (c) the date that is 91 days prior to the maturity date of the 2029 Notes (subject to certain exceptions for adequate liquidity), subject to extension. On June 1, 2026, in connection with our entry into the Credit Agreement, we repaid in full all outstanding obligations and terminated all commitments pursuant to the Second Amended Credit Agreement. We paid $0.1 million and $0.2 million in fees related to unused commitments under the Second Amended Credit Agreement for the three and six months ended June 30, 2026, respectively. We paid $0.2 million and $0.3 million in fees related to unused commitments under the Second Amended Credit Agreement for the three and six months ended June 30, 2025, respectively. Convertible Senior Notes On January 19, 2021, we issued $440.0 million in aggregate principal amount of 0.00% Convertible Senior Notes due 2026 (the “2026 Notes”) in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). $40.0 million in aggregate principal amount of such 2026 Notes were sold in the 2026 Notes offering in connection with the full exercise of the initial purchasers’ option to purchase such additional 2026 Notes pursuant to the purchase agreement. Upon conversion, we had the option to choose to pay or deliver cash, shares of our Class A common stock, or a combination of cash and shares of our Class A common stock. The 2026 Notes matured on February 1, 2026. On July 8, 2024, we used approximately $200.0 million of proceeds from the offering of 2029 Notes and approximately $5.1 million of cash on hand to repurchase $220.0 million in aggregate principal amount of the 2026 Notes. On August 22, 2025, we repurchased $73.5 million in aggregate principal amount of the 2026 Notes. On or about February 2, 2026, we repaid $146.5 million of the remaining aggregate principal amount of the 2026 Notes using $110.0 million borrowing under the revolving credit facility and approximately $36.5 million of cash on hand. The 2026 Notes were satisfied and discharged in full at such time. On July 8, 2024, we issued $287.5 million aggregate principal amount of 2.875% Convertible Senior Notes due 2029 (the “2029 Notes”) in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. $27.5 million aggregate principal amount of the 2029 Notes were sold in connection with the full exercise of the initial purchasers’ option to purchase such additional 2029 Notes offering pursuant to the purchase agreement. We will settle any conversions of the 2029 Notes by paying cash up to the aggregate principal amount of the 2029 Notes to be converted and cash, shares of Class A common stock or a combination of cash and shares, at our election, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the 2029 Notes being converted. The 2029 Notes bear interest at a fixed rate of 2.875% per year, payable semiannually in arrears on January 15 and July 15 of each year, beginning on January 15, 2025. The 2029 Notes will mature on July 15, 2029, unless earlier repurchased, redeemed, or converted in accordance with their terms. As of June 30, 2026, we had borrowings outstanding of $753.1 million, net of deferred issuance costs, under the Term Loan Facility and the 2029 Notes. We were in compliance with the related restrictive covenants. Additionally, we currently expect that we will remain in compliance with the restrictive covenants under the 2029 Notes and the Credit Agreement, prospectively. 43 Tax Receivable Agreement Upon the completion of the Business Combination, we entered into the TRA with holders of Post-Merger Repay Units. As a result of the TRA, we established a liability in our condensed consolidated financial statements. Such liability, which will increase upon the redemptions or exchanges of Post-Merger Repay Units for our Class A common stock, generally represents 100% of the estimated future tax benefit, if any, relating to the increase in tax basis that will result from redemptions or exchanges of the Post-Merger Repay Units for shares of Class A common stock pursuant to the Exchange Agreement and certain other tax attributes of the Company and tax benefits of entering into the TRA, including tax benefits attributable to payments under the TRA. Under the terms of the TRA, we may elect to terminate the TRA early but will be required to make an immediate payment equal to the present value of the anticipated future cash tax savings. As a result, the associated liability reported on our condensed consolidated financial statements may be increased. We expect that the payment obligations required under the TRA will be substantial. The actual increase in tax basis, as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors, including the timing of redemptions or exchanges by the holders of Post-Merger Repay Units, the price of our Class A common stock at the time of the redemption or exchange, whether such redemptions or exchanges are taxable, the amount and timing of the taxable income we generate in the future, the tax rate then applicable and the portion of our payments under the TRA constituting imputed interest. We expect to fund the payment of the amounts due under the TRA out of the cash savings that we actually realize in respect of the attributes to which TRA relates. However, the payments required to be made could be in excess of the actual tax benefits that we realize and there can be no assurance that we will be able to finance our obligations under the TRA. Critical Accounting Policies and Recently Issued Accounting Pronouncements There have been no significant changes to our critical accounting policies and critical accounting estimates for the six months ended June 30, 2026. See Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025, for a complete discussion of critical accounting policies and critical accounting estimates. For information related to recent accounting pronouncements and the impact of these pronouncements on our condensed consolidated financial statements, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies, to our Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.

Quantitative and Qualitative Disclosures About Market Risk

Effects of Inflation While inflation may impact our revenues and cost of services, we believe the effects of inflation, if any, on our results of operations and financial condition have not been significant. Inflationary pressures can lead to higher average bills, especially in our utility vertical. Our ability to adjust pricing can typically lag behind the impacts of inflation on clients and rising bill amounts. There can be no assurance that our results of operations and financial condition will not be materially impacted by inflation in the future. Interest Rate Risk Interest rates are highly sensitive to many factors, including U.S. fiscal and monetary policies and domestic and international economic and political considerations, as well as other factors beyond our control. Interest rate risk is the exposure to loss resulting from changes in the level of interest rates and the spread between different interest rates. We are exposed to market risk from changes in interest rates on debt, which bears interest at variable rates. Our Term Loan Facility and Revolving Credit Facility under the Credit Agreement have floating interest rates. We are exposed to changes in the level of interest rates and to changes in the relationship or spread between interest rates for its floating rate debt. Our floating rate debt requires payments based on variable interest rates such as the federal funds rate, prime rate, eurocurrency rate, and SOFR. Therefore, increases in interest rates may reduce our net income or loss by increasing the cost of debt. As of June 30, 2026, we had Term Loan Facility and convertible senior notes indebtedness of $753.1 million, net of deferred issuance costs outstanding. As of December 31, 2025, we had convertible senior notes of $426.5 million, net of deferred issuance costs, outstanding. The Term Loan Facility borrowings under the Credit Agreement accrue interest at either a base rate, described above under “Liquidity and Capital Resources — Indebtedness,” plus a margin of 4.5%, or at an 44 adjusted SOFR rate plus a margin of 5.5%, in each case as set forth in the Credit Agreement. The Revolving Credit Facility borrowings under the Credit Agreement accrue interest at either a base rate, described above under “Liquidity and Capital Resources — Indebtedness,” plus a margin of 2.75% to 3.75%, or at an adjusted SOFR rate plus a margin of 3.75% to 4.25% under the Credit Agreement, in each case depending on the total net leverage ratio, as defined in the Credit Agreement. We may incur additional borrowings from time to time for general corporate purposes, including working capital and capital expenditures. Foreign Currency Exchange Rate Risk Invoices for our services are denominated in U.S. dollars and Canadian dollars. We do not expect our future operating results to be significantly affected by foreign currency exchange rate risk.

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Risk Factors

There have been no material changes with respect to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, except as set forth below: Delaware law, our governing documents and our stockholder rights plan contain certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable. Our certificate of incorporation, bylaws and Delaware General Corporation Law (“DGCL”) contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our board of directors and therefore depress the trading price of our Class A common stock. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of our board of directors or taking other corporate actions, including effecting changes in management. Among other things, our certificate of incorporation and bylaws include provisions regarding: •the ability of our board of directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; •the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; •a prohibition on stockholder action by written consent (except in limited circumstances), which forces stockholder action to be taken at an annual or special meeting of stockholders and could delay the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors; •the requirement that a special meeting of stockholders may be called only by our board of directors, the chairman of our board of directors or our chief executive officer, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; •controlling the procedures for the conduct and scheduling of our board of directors and stockholder meetings; •the ability of our board of directors to amend our bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend our bylaws to facilitate an unsolicited takeover attempt; and •advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us. As a Delaware corporation, we are generally subject to provisions of Delaware law, including the DGCL. Although we have elected not to be governed by Section 203 of the DGCL, certain provisions of our certificate of incorporation, in a manner substantially similar to Section 203 of the DGCL, prohibit certain of our stockholders (other 46 than those stockholders who are party to a stockholders’ agreement with us) who hold 15% or more of our outstanding capital stock from engaging in certain business combination transactions with us for a specified period of time unless certain conditions are met. In addition, in certain circumstances, the stockholder rights plan adopted by our board of directors in April 2026 would impose significant dilution upon any person or group that is or becomes the beneficial owner of 12.5% or more of our outstanding Class A common stock and thereby make it more difficult for such person or group to acquire the Company. The Company’s business has been and could be negatively affected because of actions of activist stockholders. Stockholder activism could cause us to incur significant expense, disrupt our business, result in a proxy contest or litigation and impact our stock price. We have been, and may continue to be, subject to actions from activist stockholders and others that may not align with the Company’s business strategies or may not be in the best interests of all stockholders. Responding to actions by activist stockholders has been, and may continue to be, costly and time-consuming and divert management’s and our board of directors’ attention and resources from our business. Such stockholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with our employees, customers, or suppliers and make it more difficult to attract and retain qualified personnel. We may continue to be required to incur significant fees and other expenses related to activist stockholder matters, including costs for third party advisors. We may be subjected to a proxy contest or to litigation by activist investors. Our stock price has been and could be subject to significant fluctuation or otherwise be affected by the events, risks and uncertainties of any stockholder activism. Actions of activist stockholders may cause fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business. Our acquisition of KUBRA involves a number of risks, the occurrence of which could adversely affect our business, financial condition, and operating results. In March 2026, we entered into a stock purchase agreement to acquire KUBRA, and we closed the KUBRA Acquisition on June 1, 2026. The acquisition involves certain risks, the occurrence of which could adversely affect our business, financial condition, and operating results, including: •the incurrence of indebtedness in connection with the acquisition, which increased our leverage and debt service obligations and may reduce our financial flexibility; •diversion of management's attention to integrate KUBRA’s operations following the closing of the acquisition; •difficulties in integrating KUBRA’s business and operations, including the risk that the combined company does not operate as effectively or efficiently as expected; •significant transactions costs and expenses associated with the acquisition; and •potential loss of key KUBRA employees, partners or customers, or other adverse effects on existing business relationships with partners or customers, including as a result of uncertainty following the acquisition. Our acquisitions, including the KUBRA Acquisition, subject us to a variety of risks relating to the integration and operation of those acquisitions or otherwise that could harm our business and the anticipated benefits from our acquisitions may not be realized on the expected timeline or at all. We may experience various challenges associated with the integration and operation of our acquired businesses, including the KUBRA Acquisition, such as: •we may need to allocate substantial operational, financial and management resources in integrating new businesses, technologies and products, and management may encounter difficulties in integrating the operations, personnel or systems of the acquired business; 47 •the acquisition may have a material adverse effect on our business relationships with existing or future clients or software integration partners; •we may assume substantial actual or contingent liabilities, known and unknown; •the acquisition may not meet our expectations of future financial performance on our expected timeline or at all; •we may experience delays or reductions in realizing expected synergies or benefits; •we may incur substantial unanticipated costs or encounter other problems associated with the acquired business, including challenges associated with transfer of various data processing functions and connections to our systems and those of our third-party service providers; •we may be required to take write-downs or write-offs, restructuring and impairment or other charges; •we may be unable to achieve our intended objectives for the transaction, including growth prospects, synergies and other financial results; and •we may not be able to retain the key personnel, clients and suppliers of the acquired business. These challenges and costs and expenses may adversely affect our business, financial condition and results of operations.