Priority Technology Holdings, Inc.

What they do

Priority offers full-service merchant acquiring for accounts receivable, automated payables tools for bill payment, and treasury management/BaaS solutions, delivered through internally developed applications and APIs. It serves enterprise ISVs, SMBs, institutions and financial institution partners across retail, hospitality, healthcare, government, education and other U.S. sectors. The company says it processes approximately $150.0 billion in annual transaction activity and administers approximately $1.7 billion in account balances, with 1,200 employees and nationwide money transmission licenses. It reports in two primary segments: Merchant Solutions and Payables and Treasury Solutions.

Revenue drivers

• Merchant Solutions — Provides full-service card acquiring and payment-enabled solutions for B2C transactions on Priority's proprietary software platform, distributed through ISO, direct sales and vertically focused ISV channels. This is the company's core acquiring business and the largest source of revenue.
• Payables and Treasury Solutions — Combines AP automation for corporations, software partners and financial institutions (naming Citibank, Visa and Mastercard) with embedded finance and BaaS solutions that help partners modernize legacy platforms and monetize payments. Treasury also encompasses account-balance-related activity, with approximately $1.7 billion administered.
• MX product suite — MX Connect and MX Merchant provide payment acceptance and business management capabilities to merchants, enterprises and distribution partners, including resellers. The suite supports the merchant-facing distribution engine.
• Embedded finance and money movement — The Priority Commerce Engine centralizes collect, store, lend and send functionality, offering card acquiring and issuing, ACH, check and wire. Wider adoption of these services raises revenue per customer and supports the payables and treasury segments.

Recent performance

Second quarter 2026 revenue was $262.3 million, up 9.4% from $239.8 million, including 7.2% organic growth. Gross profit of $94.4 million rose 7.9%, but gross margin of 36.0% declined nearly 50 basis points from 36.5%; adjusted EBITDA of $59.4 million increased 6.0%. Operating income fell 11.8% to $33.0 million and net income fell 9.3% to $9.9 million, while diluted EPS of $0.12 was down $0.02 and adjusted diluted EPS of $0.29 rose 11.5%. For full year 2025, revenue was $953.0 million, net income was $55.7 million and operating cash flow was $100.0 million.

Strategy

Priority is positioning its unified commerce platform around payments, payables and banking/treasury to give partners cash-flow visibility and working-capital tools. It emphasizes proprietary product platforms, focused distribution engines for partners, and a cost-efficient processing infrastructure. Management points to a growing base of partners using the platform for payments and treasury solutions as the basis for its outlook. The company affirms full year 2026 guidance and continues to build out API-driven embedded finance offerings and money transmission capabilities. A proposal by Thomas Priore to acquire outstanding common stock is referenced in the 10-K's forward-looking statements.

Risks

• Data security and fraud — Priority processes, transmits and stores sensitive card, bank account and personal data, and the 10-K states it has been the target of brute force attempts to obtain unauthorized access to its systems.
• Regulatory and network compliance — The company operates under nationwide money transmission licenses and must comply with card network rules and consumer information regulations, with changes in card association and debit network fees cited as a risk.
• Distribution partner dependence — Merchant Solutions revenue is distributed through ISO, direct sales and ISV channels, so poor performance or loss of key partners could reduce volumes.
• Acquisition and strategic transaction risk — The 10-K cites risks related to proposed or completed acquisitions and dispositions, including the proposal by Thomas Priore to acquire outstanding common stock of the company.

Outlook

Management affirmed full year 2026 guidance for revenue of $1.01 billion to $1.04 billion, representing 6% to 9% growth over fiscal 2025. It also guided to adjusted gross profit of $405 million to $425 million and adjusted EBITDA of $230 million to $245 million. The company expects continued partner adoption of its payments and treasury platform to drive the results.