Breaking Down Repay Holdings Corporation (RPAY) Financial Health: Key Insights for Investors

You're looking at Repay Holdings Corporation (RPAY) right now, trying to square the strong cash generation with the noise of mixed earnings, and honestly, that's where the real opportunity is. The third quarter of 2025 delivered $77.7 million in revenue, a slight miss against estimates, but the core story is in the operational efficiency: Adjusted EBITDA hit $31.2 million with a robust 40% margin, and they converted 67% of that into Free Cash Flow, which came in at $20.8 million. That cash is defintely being used, as they retired $73.5 million of convertible notes in Q3 alone. Still, the Consumer Payments segment is seeing margin pressure, while the Business Payments segment is a clear winner, posting approximately 12% normalized gross profit growth year-over-year. The near-term risk is managing the $434 million in outstanding debt, but the opportunity is in that Business Payments acceleration and the company's own Q4 2025 outlook for 6% to 8% normalized gross profit growth. So, the question isn't whether they're profitable, but whether the high-growth segment can outrun the drag in the other.

Revenue Analysis

You need to look past the top-line numbers for Repay Holdings Corporation (RPAY) in 2025. While reported revenue shows a slight dip, the underlying, or 'normalized,' growth in their core business is definitely still there, particularly in Business Payments. The reality is that the company's 2025 revenue story is one of managing specific headwinds-namely, the loss of certain clients from 2024 and the absence of the 2024 election cycle's political media spending-while their strategic segments continue to expand.

For the first three quarters of 2025, the consolidated revenue picture has been mixed. Reported revenue for the third quarter (Q3 2025) came in at $77.7 million, which was a decrease of about 1.8% compared to Q3 2024. Q2 2025 was slightly better, showing a 1.0% year-over-year increase to $75.6 million, but Q1 2025 revenue of $77.3 million was down 4% year-over-year. The reported numbers are a bit of a distraction.

Here's the quick math on what's driving the reported dip: when you adjust for the client losses and the political media revenue, the company's normalized revenue growth for Q3 2025 was actually a solid 5% year-over-year. That's the number you should be watching. It shows the platform is still attracting new business and growing organically.

Repay Holdings Corporation (RPAY) operates primarily through two distinct revenue streams, both focused on integrated payment processing solutions:

• Consumer Payments: This segment serves verticals like loan repayment and credit unions, providing a critical service for high-volume transactions.
• Business Payments: Focused on business-to-business (B2B) transactions, specifically Accounts Payable (AP) and Accounts Receivable (AR) automation. This segment is the growth engine.

The contribution of these segments to gross profit-which is a cleaner measure of core performance than raw revenue-highlights the shift in momentum. The Business Payments segment is carrying the weight, showing a normalized gross profit increase of approximately 12% in Q3 2025, which excludes the impact of a specific client loss from 2024. In contrast, the Consumer Payments segment's gross profit growth was a modest 1% in Q3 2025, as it was more directly impacted by the client losses. This is a clear signal of where the company's future growth lies.

What this estimate hides is the margin compression in Q3 2025, which saw gross profit margins shrink by about 3.4% year-over-year due to a mix of client volume discounts and a shift toward higher average transaction values (ATVs) with lower-margin processing methods like ACH and check volumes. Still, the strategic focus is clear: accelerate the high-growth Business Payments segment and manage the legacy Consumer Payments segment. You can see the long-term thinking in their Mission Statement, Vision, & Core Values of Repay Holdings Corporation (RPAY).

The takeaway is that Repay Holdings Corporation (RPAY) is successfully executing on its core strategy to drive digital payment flows. The near-term reported revenue figures are a headwind, but the normalized growth in the Business Payments segment at 12% is a strong indicator of future value creation. Your action should be to monitor the Q4 2025 results for the projected 6% to 8% normalized gross profit growth to confirm the trend is holding.

Profitability Metrics

You need to look past the headline numbers to understand Repay Holdings Corporation (RPAY)'s true earnings power. The key takeaway for the third quarter of 2025 is that the company maintains a high-quality gross margin, but operational efficiency is being tested by revenue mix shifts and the drag of non-cash items. This is defintely a story of strong underlying unit economics masked by corporate-level noise.

For the quarter ended September 30, 2025, Repay Holdings Corporation reported revenue of $77.7 million and a gross profit of $57.8 million. This translates to a Gross Profit Margin of approximately 74.39%. This figure is excellent and sits at the high end of the typical range for payment processing and software-led fintechs, which generally target 50%-70% gross margins.

However, the trend is one to watch. Management noted that gross profit margins compressed by roughly 3.4% year-over-year. This pressure is directly linked to a shifting revenue mix-specifically, onboarding larger clients who demand volume discounts, and an increase in lower-margin payment types like Automated Clearing House (ACH) and electronic checks. Still, the Business Payments segment remains a bright spot, delivering normalized gross profit growth of approximately 12% year-over-year in Q3 2025.

When we move down the income statement, the picture gets more complex, which is common in the fintech space. The company's operational efficiency, measured by Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), remains robust. Repay Holdings Corporation achieved Adjusted EBITDA of $31.2 million in Q3 2025, resulting in an Adjusted EBITDA margin of approximately 40%. This suggests tight control over operating expenses (OpEx), even while the company invests incrementally in sales and client service teams to support future growth.

The GAAP (Generally Accepted Accounting Principles) Net Profit Margin, however, shows a loss. The reported Net Loss for Q3 2025 was ($6.6 million), which gives us a GAAP Net Profit Margin of approximately -8.50%. This loss is significantly better than the second quarter of 2025, which included a massive $103.8 million non-cash goodwill impairment charge. For a cleaner view of core profitability, we look at the non-GAAP Adjusted Net Income, which was $18.2 million, or $0.21 per share, for the quarter.

Here's the quick math on the core Q3 2025 profitability figures:

What this estimate hides is the ongoing pressure on the Gross Margin line. Your action should be to monitor the mix shift and the company's ability to offset volume-discount pressure with higher-value, software-integrated services. For a full picture of the company's financial standing, you should review the full analysis at Breaking Down Repay Holdings Corporation (RPAY) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

You want to know how Repay Holdings Corporation (RPAY) is funding its growth, and the short answer is that they are leaning on a conservative mix, favoring equity over debt compared to many peers. The company's financial structure, as of late 2025, shows a manageable debt load, but there's a clear, near-term capital priority: addressing the remaining convertible notes due in early 2026.

As a seasoned analyst, I look at the balance sheet to see where the risk sits. Repay Holdings Corporation's total outstanding debt as of September 30, 2025, stood at $434 million. This is not a massive number for a company of this scale, but the structure is what matters. The debt is primarily composed of two tranches of convertible notes, which are a common financing tool for growth companies:

• $147 million: A 0% coupon convertible note due in February 2026. This is the short-term focus.
• $288 million: A 2.875% coupon convertible note due in 2029. This is the longer-term, less-pressing obligation.

The key takeaway here is that Repay Holdings Corporation has a significant maturity-the $147 million note-coming up fast. They've been very clear that managing this is a top priority for capital allocation, and it will defintely shape their cash flow decisions heading into 2026.

To gauge the company's financial leverage (how much debt is used to finance assets relative to shareholder equity), we use the debt-to-equity (D/E) ratio. For Repay Holdings Corporation, this ratio was approximately 0.45 as of November 2025. This is a relatively low figure, indicating the company is funding a larger portion of its assets with shareholder equity than with debt.

To be fair, a D/E ratio of 0.45 is significantly lower than the industry benchmark for Transaction & Payment Processing Services, which sits around 0.85. This suggests Repay Holdings Corporation has a more conservative, less leveraged capital structure than many of its competitors. That low leverage offers a cushion, but it also means they have room to take on more debt if a large, accretive acquisition opportunity arises.

The company's strategy is a clear balance between debt management and equity funding. On the debt side, Repay Holdings Corporation successfully retired $73.5 million of the 2026 convertible notes at a discount, which is smart debt management. On the equity side, they've been active with share repurchases, a direct return of capital to shareholders. Year-to-date in 2025, they repurchased 7.9 million shares for $38 million. This dual approach shows they are using strong cash flow to both de-risk the balance sheet and bolster shareholder value.

You can dive deeper into the full picture of their financial standing in the main post: Breaking Down Repay Holdings Corporation (RPAY) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You need a clear picture of whether Repay Holdings Corporation (RPAY) can cover its near-term obligations, and the answer is nuanced: the balance sheet ratios look tight, but the company's strong cash generation capacity provides a significant buffer. The critical takeaway is that while the current ratio is below 1.0, the firm's non-GAAP free cash flow (FCF) is robust, which is a better indicator for a payment processor.

As of late 2025, Repay's liquidity positions are a bit concerning on paper. The Current Ratio and Quick Ratio both sit at approximately 0.81. Here's the quick math: a ratio below 1.0 means that current liabilities (debts due within one year) are greater than current assets (assets expected to be converted to cash within one year). For a non-financial company, this would be a major red flag, but for a payment processor like Repay, which has minimal inventory and rapid cash conversion, the low ratio is less dire, still, it's defintely something to watch.

The working capital trends for fiscal year 2025 show some volatility. In Q1 2025, the company reported a negative FCF of $8 million, which management attributed largely to a one-time reversal and timing impact related to net working capital of about $16 million. This indicates that the timing of receivables and payables can swing short-term cash flow significantly. For Q4 2025, the free cash flow conversion outlook was revised down to exceed 50%, from a prior expectation of over 60%, again due to working capital timing.

Looking at the cash flow statement overview, the operating cash flow is the company's clear strength. In Q3 2025, Repay generated a Free Cash Flow of $20.8 million, translating to a strong 67% FCF conversion rate. This cash generation fueled strategic actions in the investing and financing activities:

• Financing Cash Flow: Repay retired $73.5 million of its 2026 convertible notes at a discount.
• Investing/Financing Cash Flow: The company also repurchased approximately 3.1 million shares for $15.6 million in Q3 2025.

These capital deployments signal management's confidence in their ability to generate cash and service their total outstanding debt of $434 million.

Despite the low current ratio, Repay's overall liquidity position is strong, mitigating any immediate concerns. As of September 30, 2025, the company had approximately $96 million in cash on the balance sheet. Plus, they have access to a fully undrawn revolving credit facility of $250 million, bringing their total liquidity to a comfortable $346 million. What this estimate hides is the long-term debt structure, which includes a 0% coupon convertible note due in February 2026, a maturity they are actively addressing with their current cash flow strategy.

Here is a snapshot of the key liquidity metrics for Repay Holdings Corporation (RPAY):

For a deeper dive into the company's valuation models, you can check out the full analysis: Breaking Down Repay Holdings Corporation (RPAY) Financial Health: Key Insights for Investors.

Valuation Analysis

You're looking at Repay Holdings Corporation (RPAY) right now, and the numbers are telling a complicated, but potentially compelling, story about its valuation. The direct takeaway is this: based on forward-looking metrics for the 2025 fiscal year, the stock appears undervalued, but that assessment is heavily masked by its current lack of GAAP profitability and significant price volatility.

Is Repay Holdings Corporation (RPAY) Overvalued or Undervalued?

The short answer is Repay Holdings Corporation (RPAY) is likely undervalued, especially when you consider its growth prospects and how analysts are modeling its future earnings. The market is pricing in a lot of risk right now, which is why the stock trades near its 52-week low. Here's the quick math on why a deep-value opportunity might be present, but you defintely need to be a trend-aware realist on this one.

• Price-to-Earnings (P/E): The trailing twelve months (TTM) P/E ratio is negative, sitting around -2.61x as of November 2025, because the company reported a negative net margin of approximately -39.08% in Q3 2025. This negative number is a red flag, but it's a backward-looking one.
• Forward P/E: Looking ahead, the projected forward P/E ratio is a remarkably low 3.97x, based on a consensus fiscal year 2025 EPS forecast of around $0.84. For a growth-focused payments company, that's a very cheap multiple, suggesting future profitability is not being fully valued by the market.

The non-GAAP (Generally Accepted Accounting Principles) earnings are what matter most here, as they strip out non-cash charges like amortization from past acquisitions. The core business is generating cash, but the accounting net income (the GAAP number) is still negative. That's the disconnect.

Key Valuation Multiples (2025 Fiscal Year)

To get a clearer picture, we look past the negative P/E to the Enterprise Value-to-EBITDA (EV/EBITDA) and Price-to-Book (P/B) ratios. EV/EBITDA is a better tool for a company like Repay Holdings Corporation (RPAY) because it factors in the company's debt and ignores non-cash expenses, giving you a cleaner look at operating performance.

An EV/EBITDA of 6.0x for a technology-enabled payments processor is low. For context, many peers trade well into the double digits. This low multiple is a clear signal that the market is either discounting the company's future growth potential or punishing it for its high debt load and recent revenue misses, like the Q3 2025 revenue of $77.7 million, which was slightly below the $78.6 million consensus estimate. Still, that 6.0x is a concrete opportunity signal.

Stock Price Trends and Analyst Consensus

The stock price trend over the last 12 months shows the market's skepticism. The 52-week trading range is stark, moving from a high of $8.57 to a low of $3.27, with the stock trading near the low end at around $3.36 in mid-November 2025. This -60.29% decrease over the last year is painful, but it's where the opportunity lies.

Analyst consensus, however, maps a clear path to recovery. The average 12-month price target among brokerages is around $7.00, which represents an upside of over 100% from the current price. The consensus rating is a 'Hold' or 'Moderate Buy,' with five analysts rating it a 'Buy' or 'Strong Buy' and five rating it a 'Hold.' The split is a perfect reflection of the risk/reward profile: the 'Holds' see the near-term risk and volatility, but the 'Buys' see the value in the low forward multiples. You can learn more about the company's strategic focus here: Mission Statement, Vision, & Core Values of Repay Holdings Corporation (RPAY).

Risk Factors

You're looking for a clear-eyed view of Repay Holdings Corporation (RPAY), and honestly, the financial health picture is mixed. The company is generating strong free cash flow, but it's still navigating significant operational headwinds and a near-term debt hurdle. The core takeaway is this: management is actively addressing debt and investing in high-growth segments, but the legacy client losses and margin pressures are real, creating a short-term drag on reported growth.

Operational and Competitive Headwinds

The most immediate internal risk is the drag from client attrition, a factor that has depressed reported results throughout 2025. Specifically, a major client loss in 2024 created a 10-point headwind in the Business Payments segment's growth for much of 2025. While the Business Payments segment's normalized gross profit still increased by approximately 12% in Q3 2025, that headwind shows how quickly a single large client can impact a specialized payments company. Plus, the Consumer Payments segment only saw a 1% gross profit increase in Q3 2025, showing softness in sub-verticals like automotive lending. That's a slow pace for a segment that makes up about 85% of their revenue.

• Client losses slash reported growth.
• Margin compression is an ongoing issue.

We're also seeing margin pressure. Repay Holdings Corporation's gross profit margin compressed by about 3.4% year-over-year in Q3 2025 due to a mix of factors, including volume discounts for larger clients and higher assessment fees on capped interchange volume (the fee paid to card networks and banks, which eats into profit). This means even when transaction volume grows, the profit per transaction is shrinking.

Financial and Capital Structure Risks

The biggest near-term financial risk is the looming debt maturity. Repay Holdings Corporation has $434 million in total outstanding debt as of September 30, 2025, and a critical portion of that is the remaining $147 million in convertible notes (debt that can be converted to stock) due in February 2026. Management has been proactive, retiring $73.5 million of these notes at a discount in Q3 2025, but they will still need to use cash on hand and potentially tap into their revolver (a line of credit) to cover the rest.

Another major financial flag was the non-cash $103.8 million goodwill impairment loss recorded in Q2 2025, primarily tied to the Consumer Payments segment. Goodwill impairment signals that the value of past acquisitions in that segment is now considered less than the price paid, which is a structural concern that contributed to a Q2 2025 net loss of $108.0 million.

Mitigation and Strategic Response

The company isn't sitting still. Their strategy is a classic financial playbook: use strong cash flow to de-risk the balance sheet while simultaneously funding organic growth in the most promising areas. They're focusing heavily on their Business Payments segment, which is showing real momentum, and they are guiding for normalized gross profit growth between 6% and 8% in Q4 2025 as they move past the prior year's losses.

• Prioritize debt reduction to de-risk.
• Invest in B2B to drive future growth.
• Buy back stock to boost shareholder value.

Management is prioritizing debt paydown, having already reduced the 2026 notes. They also deployed capital toward share repurchases, buying back 7.9 million shares for $38 million year-to-date in 2025. This focus on returning capital and cleaning up the debt structure, coupled with a Q3 Free Cash Flow Conversion of 67% (Free Cash Flow of $20.8 million), shows a defintely disciplined approach to capital allocation. You can find more on their long-term direction here: Mission Statement, Vision, & Core Values of Repay Holdings Corporation (RPAY).

Next Step: Finance/Strategy: Model the full repayment of the remaining $147 million in 2026 notes using current cash and revolver capacity to confirm no liquidity crunch by Q1 2026.

Growth Opportunities

You're looking for a clear map of where Repay Holdings Corporation (RPAY) is going, not just where it's been, and honestly, the path is a tale of two segments. The company is defintely executing a strategic pivot, focusing on high-growth areas to offset softness in its core business, which is smart.

The immediate takeaway is that while overall revenue growth is modest, the underlying normalized growth in the Business Payments segment is strong and is the key driver for the future. Wall Street consensus maintains an 'Outperform' rating, seeing a promising upside, with an average one-year price target of $7.89.

Key Growth Drivers and Strategic Focus

Repay Holdings Corporation's growth strategy is anchored in deepening its integration with software partners and aggressively expanding its Business Payments (B2B) footprint. This B2B segment, while only representing about 15% of total revenue today, is the high-octane part of the business, showing approximately 12% normalized gross profit growth in Q3 2025. The Consumer Payments segment still accounts for the bulk of the revenue, around 85%, but its growth is slower.

The company is making concrete moves to drive future growth:

• Expanding the Network: The Accounts Payable (AP) supplier network grew by a massive 59% year-over-year in Q3 2025, now including over 524,000 suppliers. This is a critical mass play.
• Software Integration: Repay Holdings Corporation added five new integrated software partners in Q3 2025, bringing the total to 291. This embedding of their payment technology (vertically-integrated payment solutions) is their core competitive advantage.
• Product Innovation: They introduced REPAY's Dynamic Wallet, which integrates loan payments into iOS and Android wallets, plus they are testing and deploying new AI tools to build a more scalable platform.

Financial Projections and Earnings Estimates

Looking at the full fiscal year 2025, the picture is one of stabilization and modest growth after some earlier headwinds. Here's the quick math on the analyst consensus for the full year:

For the near-term, the Q4 2025 guidance is a better indicator of momentum. Management expects normalized gross profit growth between 6% and 8% and anticipates Free Cash Flow Conversion to be above 50%. This focus on cash flow and normalized gross profit (excluding one-time noise) shows a clear path to improved profitability. Long-term, analysts forecast revenue to grow at a compound annual rate of 4.4% over the next three years.

Competitive Edge and Clear Actions

Repay Holdings Corporation operates in a massive, non-discretionary payments market, estimated to be around $5.6 trillion. Their key competitive advantage is their proprietary, full-stack processing capabilities and clearing engine. This allows them to offer seamless, integrated payment solutions (payment technology embedded directly into a client's software systems) to verticals like auto finance and credit unions, which is a big moat. They are also actively managing their capital structure, having repurchased 7.9 million shares for $38 million year-to-date and retired $73.5 million of their 2026 convertible notes.

The business payments segment is the one to watch. Exploring Repay Holdings Corporation (RPAY) Investor Profile: Who's Buying and Why?

Next Step: Re-evaluate your valuation model using the Q4 2025 normalized gross profit growth guidance of 6% to 8% as the near-term organic growth baseline.