Repay Holdings Corp

Previous wording

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, HOA management and hospitality.

Current wording

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.

Previous wording

We have been monitoring the current economic environment in the U.S. and globally – characterized by heightened inflation (including changes in wages), rising interest rates, supply chain issues, slower growth and recent banking system volatility. 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 2024 may not be necessarily indicative of their impact on our results for the remainder of 2024.

Current wording

We have been monitoring the current economic environment in the U.S. and globally – characterized by heightened inflation (including changes in wages), rising interest rates, supply chain issues, slower growth and recent banking system volatility. 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 nine months of 2024 may not be necessarily indicative of their impact on our results for the remainder of 2024.

Previous wording

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, 2024 and 2023, our chargeback rate was less than 1% of our card payment volume.

Current wording

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 nine months ended September 30, 2024 and 2023, our chargeback rate was less than 1% of our card payment volume.

Previous wording

Interest income (expense), net. Interest income consists of interest received on our cash and cash equivalents. Interest expense consists of interest paid in respect of our indebtedness under the Amended Credit Agreement.

Current wording

Interest income (expense), net. Interest income consists of interest received on our cash and cash equivalents. Interest expense consists of interest paid in respect of our indebtedness under the convertible senior notes.

Previous wording

Interest income (expense), net was $0.9 million for the six months ended June 30, 2024, and included $2.7 million of interest income and ($1.8) million of interest expense. Interest income (expense), net was ($1.3) million for the six months ended June 30, 2023, and included $0.8 million of interest income and ($2.1) million of interest expense. Interest income increased by $1.9 million compared to prior year period, due to higher average interest rates earned on our cash and cash equivalents. Interest expense decreased by $0.3 million compared to the prior year period, due to a lower outstanding principal balance under our Amended Credit Agreement.

Current wording

Interest (expense) income, net was ($1.3) million for the three months ended September 30, 2024, and included ($2.9) million of interest expense and $1.6 million of interest income. Interest (expense) income, net was ($0.1) million for the three months ended September 30, 2023, and included ($0.9) million of interest expense and $0.8 million of interest income. Interest expense increased by $2.0 million compared to the prior year period, due to a higher outstanding principal balance under the convertible senior notes. Interest income increased by $0.8 million compared to the prior year period, due to higher average interest rates earned on our cash and cash equivalents.

Previous wording

We incurred a loss, related to accretion expense and fair value adjustment of the tax receivable liability of $3.4 million for the three months ended June 30, 2024, compared to a $4.1 million gain for the three months ended June 30, 2023, a decrease of $7.4 million. This decrease was due to lower fair value adjustments related to the tax receivable liability, primarily as a result of accretion and changes to the discount rate, or Early Termination Rate, used to determine the fair value of the liability.

Current wording

We incurred a loss, related to accretion expense and fair value adjustment of the tax receivable liability of $6.5 million for the three months ended September 30, 2024, compared to a $3.2 million loss for the three months ended September 30, 2023, an increase of $3.2 million. This increase was due to higher fair value adjustments related to the tax receivable liability, primarily as a result of accretion and changes to the discount rate, or Early Termination Rate, used to determine the fair value of the liability.

Previous wording

The income tax benefit was $2.0 million for the three months ended June 30, 2024. 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, offset by stock-based compensation expense net tax shortfall which is required to be reported discretely in the interim period in which they occur. The income tax benefit was $1.1 million for the three months ended June 30, 2023, 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, offset by stock-based compensation expense net tax shortfall and the impact of the BCS disposition which are both required to be reported discretely in the interim period in which they occur.

Current wording

The income tax expense was $1.5 million for the three months ended September 30, 2024. 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, offset by stock-based compensation expense net tax shortfall and impact related to cancellation of debt income and write-off of unamortized debt issuance costs associated with the partial repurchase of the 2026 Notes, which are required to be recorded discretely in the interim period in which they occur. The income tax benefit was $2.0 million for the three months ended September 30, 2023, 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, offset by stock-based compensation expense net tax shortfall and the impact of the BCS disposition which are both required to be reported discretely in the interim period in which they occur.

Previous wording

Total revenue was $155.6 million for the six months ended June 30, 2024 and $146.3 million for the six months ended June 30, 2023, an increase of $9.3 million or 6.4%. This increase was the result of newly signed clients and the growth of our existing clients. For the six months ended June 30, 2023, revenues of approximately $1.2 million are attributable to BCS.

Current wording

Total revenue was $234.8 million for the nine months ended September 30, 2024 and $220.6 million for the nine months ended September 30, 2023, an increase of $14.1 million or 6.4%. This increase was the result of newly signed clients, the growth of our existing clients, and political media spending associated with the 2024 election cycle in our media payments business. For the nine months ended September 30, 2023, revenues of approximately $1.2 million are attributable to BCS.

Previous wording

Costs of services were $35.5 million for the six months ended June 30, 2024 and $34.8 million for the six months ended June 30, 2023, an increase of $0.7 million or 2.0%. This increase was the result of newly signed clients and the growth of our existing clients. For the six months ended June 30, 2023, costs of services of less than $0.1 million are attributable to BCS.

Current wording

Costs of services were $53.1 million for the nine months ended September 30, 2024 and $52.4 million for the nine months ended September 30, 2023, an increase of $0.6 million or 1.2%. This increase was the result of newly signed clients, the growth of our existing clients, and political media spending associated with the 2024 election cycle in our media payments business. For the nine months ended September 30, 2023, costs of services of less than $0.1 million are attributable to BCS.

Previous wording

Selling, general and administrative expenses were $72.3 million for the six months ended June 30, 2024 and $76.7 million for the six months ended June 30, 2023, a decrease of $4.4 million or 5.8%, primarily due to a $3.3 million decrease in transaction expenses related to the disposition of BCS in the prior year period and a $1.2 million decrease in compensation expenses related to our strategic restructuring.

Current wording

Selling, general and administrative expenses were $109.0 million for the nine months ended September 30, 2024 and $112.0 million for the nine months ended September 30, 2023, a decrease of $3.0 million or 2.7%, primarily due to a $3.6 million decrease in transaction expenses related to the disposition of BCS in the prior year period, offset by a $0.8 million increase in legal expenses related to the 2029 Notes issuance.

Previous wording

Depreciation and amortization expenses were $26.8 million for the three months ended June 30, 2024 and $26.5 million for the three months ended June 30, 2023, an increase of $0.3 million or 1.1%. This increase was driven by additional amortization related to newly capitalized software.

Current wording

Depreciation and amortization expenses were $79.3 million for the nine months ended September 30, 2024 and $79.1 million for the nine months ended September 30, 2023, an increase of $0.2 million or 0.2%. This increase was driven by additional amortization related to newly capitalized software.

Previous wording

We incurred a loss, related to accretion expense and fair value adjustment of the tax receivable liability of $6.3 million for the six months ended June 30, 2024, compared to a $0.5 million net loss for the six months ended June 30, 2023, a decrease of $5.8 million. This decrease was due to lower fair value adjustments related to the tax receivable liability, primarily as a result of accretion and changes to the discount rate, or Early Termination Rate, used to determine the fair value of the liability.

Current wording

We incurred a loss, related to accretion expense and fair value adjustment of the tax receivable liability of $12.8 million for the nine months ended September 30, 2024, compared to a $3.7 million net loss for the nine months ended September 30, 2023, an increase of $9.0 million. This increase was due to higher fair value adjustments related to the tax receivable liability, primarily as a result of accretion and changes to the discount rate, or Early Termination Rate, used to determine the fair value of the liability.

Previous wording

The income tax benefit was $1.7 million for the six months ended June 30, 2024. 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, offset by stock-based compensation expense net tax shortfall and the state rate change impact on deferred taxes which are both required to be reported discretely in the interim period in which they occur. The income tax expense was $3.3 million for the six months ended June 30, 2023, 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, offset by stock-based compensation expense net tax shortfall and the impact of the BCS disposition which are both required to be reported discretely in the interim period in which they occur.

Current wording

The income tax benefit was $0.1 million for the nine months ended September 30, 2024. 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, offset by stock-based compensation expense net tax shortfall, the state rate change impact on deferred taxes and the impact related to cancellation of debt income and write-off of unamortized debt issuance costs associated with the partial repurchase of the 2026 Notes, which are required to be recorded discretely in the interim period in which they occur. The income tax expense was $1.3 million for the nine months ended September 30, 2023, 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, offset by stock-based compensation expense net tax shortfall and the impact of the BCS disposition which are both required to be reported discretely in the interim period in which they occur.

Previous wording

Gross profit for the Consumer Payments segment was $55.5 million for the three months ended June 30, 2024 and $51.7 million for three months ended June 30, 2023, representing a $3.8 million or 7.4% year-over-year increase. This increase was the result of newly signed clients and the growth of existing clients.

Current wording

Gross profit for the Consumer Payments segment was $54.9 million for the three months ended September 30, 2024 and $53.6 million for three months ended September 30, 2023, representing a $1.3 million or 2.4% year-over-year increase. This increase was the result of newly signed clients and the growth of existing clients.

Previous wording

Gross profit for the Business Payments segment was $8.0 million for the three months ended June 30, 2024 and $7.2 million for the three months ended June 30, 2023, representing a $0.8 million or 11.2% year-over-year increase. This increase was the result of newly signed clients and the growth of existing clients.

Current wording

Gross profit for the Business Payments segment was $12.0 million for the three months ended September 30, 2024 and $7.2 million for the three months ended September 30, 2023, representing a $4.8 million or 67.1% year-over-year increase. This increase was the result of newly signed clients, the growth of existing clients and political media spending associated with the 2024 election cycle in our media payments business.

Previous wording

Revenue for the Consumer Payments segment was $145.4 million for the six months ended June 30, 2024 and $135.9 million for the six months ended June 30, 2023, representing a $9.6 million or 7.0% year-over-year increase. This increase was the result of newly signed clients and the growth of existing clients. For the six months ended June 30, 2023, revenues of approximately $1.2 million are attributable to BCS.

Current wording

Revenue for the Consumer Payments segment was $214.6 million for the nine months ended September 30, 2024 and $204.6 million for the nine months ended September 30, 2023, representing a $10.0 million or 4.9% year-over-year increase. This increase was the result of newly signed clients and the growth of existing clients. For the nine months ended September 30, 2023, revenues of approximately $1.2 million are attributable to BCS.

Previous wording

Gross profit for the Consumer Payments segment was $115.1 million for the six months ended June 30, 2024 and $106.3 million for six months ended June 30, 2023, representing a $8.8 million or 8.3% year-over-year increase. This increase was the result of newly signed clients and the growth of existing clients. For the six months ended June 30, 2023, gross profit of approximately $1.2 million is attributable to BCS.

Current wording

Gross profit for the Consumer Payments segment was $170.0 million for the nine months ended September 30, 2024 and $159.9 million for nine months ended September 30, 2023, representing a $10.1 million or 6.3% year-over-year increase. This increase was the result of newly signed clients and the growth of existing clients. For the nine months ended September 30, 2023, gross profit of approximately $1.2 million is attributable to BCS.

Previous wording

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 loss on business disposition, 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.

Current wording

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 gain on extinguishment of debt, loss on business disposition, 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.

Previous wording

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 loss on business disposition, 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.

Current wording

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 gain on extinguishment of debt, loss on business disposition, 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.

Previous wording

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 thethree and six months ended June 30, 2024 and 2023 (excluding shares subject to forfeiture).

Current wording

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 thethree and nine months ended September 30, 2024 and 2023 (excluding shares subject to forfeiture).

Previous wording

The following tables set forth a reconciliation of our results of operations for the three and six months ended June 30, 2024 and 2023.

Current wording

The following tables set forth a reconciliation of our results of operations for the three and nine months ended September 30, 2024 and 2023.

Previous wording

See footnote (i) for details on amortization and depreciation expenses.

Current wording

See footnote (j) for details on amortization and depreciation expenses.

Previous wording

Primarily consists of (i) during the three and six months ended June 30, 2024, professional service fees incurred in connection with prior transactions, and (ii) during the three and six months ended June 30, 2023, professional service fees and other costs incurred in connection with the disposition of BCS.

Current wording

Primarily consists of (i) during the three and nine months ended September 30, 2024, professional service fees incurred in connection with prior transactions, and (ii) during the three and nine months ended September 30, 2023, professional service fees and other costs incurred in connection with the disposition of BCS.

Previous wording

For the three and six months ended June 30, 2024, 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. For the three and six months ended June 30, 2023, reflects non-recurring payments made to third-parties in connection with a significant expansion of our personnel, one-time payments to certain partners and franchise taxes and other non-income based taxes.

Current wording

For the three and nine months ended September 30, 2024, 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. For the three and nine months ended September 30, 2023, reflects non-recurring payments made to third-parties in connection with a significant expansion of our personnel, one-time payments to certain partners and franchise taxes and other non-income based taxes.

Previous wording

For the three and six months ended June 30, 2023, reflects impairment loss related to trade name write-offs of MPI.

Current wording

For the nine months ended September 30, 2023, reflects impairment loss related to trade name write-offs of MPI.

Previous wording

For the three and six months ended June 30, 2024 and 2023, 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:

Current wording

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:

Previous wording

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, 2024 and 2023. 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:

Current wording

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 nine months ended September 30, 2024 and 2023. 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:

Previous wording

Adjusted EBITDA for the three months ended June 30, 2024 and 2023 was $33.7 million and $30.5 million, respectively, representing a 10.5% year-over-year increase. Adjusted EBITDA for the six months ended June 30, 2024 and 2023 was $69.2 million and $61.5 million, representing a 12.7% year-over-year increase.

Current wording

Adjusted EBITDA for the three months ended September 30, 2024 and 2023 was $35.1 million and $31.9 million, respectively, representing a 10.2% year-over-year increase. Adjusted EBITDA for the nine months ended September 30, 2024 and 2023 was $104.3 million and $93.3 million, representing a 11.8% year-over-year increase.

Previous wording

Adjusted Net Income for the three months ended June 30, 2024 and 2023 was $21.8 million and $19.5 million, respectively, representing a 11.5% year-over-year increase. Adjusted Net Income for the six months ended June 30, 2024 and 2023 was $44.1 million and $38.7 million, respectively, representing a 14.0% year-over-year increase.

Current wording

Adjusted Net Income for the three months ended September 30, 2024 and 2023 was $21.2 million and $19.9 million, respectively, representing a 6.8% year-over-year increase. Adjusted Net Income for the nine months ended

Previous wording

Net loss attributable to the Company for the three months ended June 30, 2024 and 2023 was $4.1 million and $4.6 million, respectively, representing a 12.3% year-over-year improvement in our profitability. Net loss attributable to the Company for the six months ended June 30, 2024 and 2023 was $9.3 million and $31.0 million, respectively, representing a 70.1% year-over-year improvement in our profitability.

Current wording

Net income (loss) attributable to the Company for the three months ended September 30, 2024 and 2023 was $3.2 million and ($6.2) million, respectively, representing a 152.6% year-over-year improvement in our profitability. Net loss attributable to the Company for the nine months ended September 30, 2024 and 2023 was $6.0 million and $37.2 million, respectively, representing a 83.8% year-over-year improvement in our profitability.

Previous wording

The increases in Adjusted EBITDA and Adjusted Net Income and improvement in net loss attributable to the Company for the three and six months ended June 30, 2024 were primarily due to the organic growth of our business from newly signed clients and the growth of existing clients, and cost savings initiatives that reduced both cost of services and selling, general and administrative expenses as a percentage of revenue.

Current wording

The increases in Adjusted EBITDA and Adjusted Net Income and improvement in net loss attributable to the Company for the three and nine months ended September 30, 2024 were primarily due to the organic growth of our business from newly signed clients, the growth of existing clients, political media spending associated with the 2024 election cycle in our media payments business and cost savings initiatives that reduced both cost of services and selling, general and administrative expenses as a percentage of revenue.

Previous wording

We have experienced in the past, and may continue to experience, seasonal fluctuations in our revenues as a result of consumer 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. Operating expenses show less seasonal fluctuation, with the result that net income is subject to the similar seasonal factors as our revenues.

Current wording

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. Operating expenses show less seasonal fluctuation, with the result that net income is subject to the similar seasonal factors as our revenues.

Previous wording

We have historically financed our operations and working capital through net cash from operating activities. As of June 30, 2024, we had $147.1 million of cash and cash equivalents and available borrowing capacity of $185.0 million under the Amended Credit Agreement. This balance does not include restricted cash, which reflects cash accounts holding reserves for potential losses and client settlement funds of $26.9 million as of June 30, 2024. We amended the Amended Credit Agreement in July 2024 to increase the borrowing capacity to $250.0 million (as described below). Our primary cash needs are to fund working capital requirements, invest in technology development, fund acquisitions and related contingent consideration, make scheduled principal payments and interest payments on our outstanding indebtedness 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 and planned capital expenditures and to service our debt obligations for the next twelve months and the following five years.

Current wording

We have historically financed our operations and working capital through net cash from operating activities. As of September 30, 2024, we had $168.7 million of cash and cash equivalents and available borrowing capacity of $250.0 million under the Amended Credit Agreement. This balance does not include restricted cash, which reflects cash accounts holding reserves for potential losses and client settlement funds of $46.5 million as of September 30, 2024. Our primary cash needs are to fund working capital requirements, invest in technology development, fund acquisitions and related contingent consideration, make scheduled principal payments and interest payments on our outstanding indebtedness 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 and planned capital expenditures and to service our debt obligations for the next twelve months and the following five years.

Previous wording

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”). 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, 2024, we have $37.5 million remaining capacity under the Share Repurchase Program. In addition, in July 2024 we used approximately $40.0 million of proceeds from the offering of 2029 Notes to repurchase approximately 3.9 million shares of Class A common stock.

Current wording

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”). The Share Repurchase Program has no expiration date but may be modified, suspended or discontinued at any time at our discretion. During the three months ended September 30, 2024, we repurchased 158,496 shares for a total of approximately $1.3 million under the Share Repurchase Program. As of September 30, 2024, we have $36.2 million remaining capacity under the Share Repurchase Program. In addition, in July 2024 we used approximately $40.0 million of proceeds from the offering of 2029 Notes to repurchase approximately 3.9 million shares of Class A common stock.

Previous wording

Net cash provided by operating activities was $55.8 million and $40.8 million for the six months ended June 30, 2024 and 2023, 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.

Current wording

Net cash provided by operating activities was $115.8 million and $68.8 million for the nine months ended September 30, 2024 and 2023, 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.

Previous wording

Net cash used in investing activities was $22.8 million for the six months ended June 30, 2024, due to the capitalization of software development activities.

Current wording

Net cash used in investing activities was $34.1 million for the nine months ended September 30, 2024, due to the capitalization of software development activities.

Previous wording

Net cash provided by investing activities was $16.6 million for the six months ended June 30, 2023, due to cash received from the disposition of BCS, partially offset by the capitalization of software development activities.

Current wording

Net cash provided by investing activities was $2.5 million for the nine months ended September 30, 2023, due to cash received from the disposition of BCS, partially offset by the capitalization of software development activities.

Previous wording

Net cash used in financing activities was $23.0 million for the six months ended June 30, 2023, due to the repayment of the outstanding revolving credit facility balance, payments for tax withholding related to shares vesting under Incentive Plan and ESPP and the CPS earnout payment.

Current wording

Net cash used in financing activities was $23.5 million for the nine months ended September 30, 2023, due to the repayment of the outstanding revolving credit facility balance, payments for tax withholding related to shares vesting under Incentive Plan and ESPP and the CPS earnout payment.

Previous wording

On December 29, 2021, we increased our existing senior secured credit facilities by $60.0 million to provide for a $185.0 million revolving credit facility pursuant to an amendment to the Amended Credit Agreement. On February 9, 2023, we further amended the Amended Credit Agreement to replace LIBOR with term SOFR as the interest rate benchmark.

Current wording

On December 29, 2021, we increased our then existing senior secured credit facilities by $60.0 million to provide for a $185.0 million revolving credit facility pursuant to an amendment to the Amended Credit Agreement. On February 9, 2023, we further amended the Amended Credit Agreement to replace LIBOR with term SOFR as the interest rate benchmark.

Previous wording

As of June 30, 2024, the Amended Credit Agreement provided for a revolving credit facility of $185.0 million. As of June 30, 2024, we had $0 million drawn against the revolving credit facility. We paid $0.1 million and $0.2 million in fees related to unused commitments for the three and six months ended June 30, 2024, respectively. We paid $0.2 million and $0.3 million in fees related to unused commitments for the three and six months ended June 30, 2023, respectively.

Current wording

As of September 30, 2024, the Second Amended Credit Agreement provided for a revolving credit facility of $185.0 million. As of September 30, 2024, we had $0 million drawn against the revolving credit facility. We paid $0.2 million and $0.4 million in fees related to unused commitments for the three and nine months ended September 30, 2024, respectively. We paid $0.1 million and $0.4 million in fees related to unused commitments for the three and nine months ended September 30, 2023, respectively.