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Repay Holdings (RPAY) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Aug 10, 2026

Source: earnings call transcript

Executive summary

Repay Holdings Corporation Q2 FY26 — Strong KUBRA Integration and Organic Growth Acceleration

Repay delivered strong Q2 FY26 results, marked by significant revenue growth and free cash flow generation, largely driven by the strategic KUBRA acquisition. The company is actively integrating KUBRA, realizing initial synergies, and expanding its end-to-end bill payment platform. Management is focused on accelerating organic growth in the second half of the year and deleveraging post-acquisition, with confidence in achieving its financial outlook.

Highlights

5

  • Revenue grew 33% year-over-year to $100.7 million, including one month of KUBRA contribution.

  • Organic revenue growth was 6%, with core Consumer Payments organic growth at 4% and Business Payments normalized growth at 19%.

  • Generated $27.4 million in free cash flow, representing a 75% conversion rate.

  • Realized over $4.5 million of annualized run rate synergies from the KUBRA acquisition exiting Q2.

  • Business Payments AP supplier network grew 65% year-over-year to over 731,000 vendors.

Concerns

3

  • Gross profit margin decreased to 70% from 76% a year ago, primarily due to KUBRA's lower-margin product mix.

  • Adjusted EBITDA margins decreased to 36% from 40% a year ago, reflecting KUBRA's natural mix.

  • Pro forma synergized net leverage stood at approximately 3.7x post-KUBRA acquisition.

Guidance & targets

CategoryTargetConfidence
Full-year 2026 Revenue
$490 million to $500 million
high materiality
High
Full-year 2026 Normalized Revenue Growth
7% to 9%
medium materiality
High
Full-year 2026 Political Media Revenue
$8 million to $10 million
medium materiality
High
Full-year 2026 Adjusted EBITDA
$168.5 million and $176 million
high materiality
High
Full-year 2026 Free Cash Flow Conversion
30%
medium materiality
High
Full-year 2026 Adjusted Free Cash Flow Conversion
approximately 35%
medium materiality
High
KUBRA 2026 Revenue Contribution
$150 million to $154 million
high materiality
High
KUBRA 2026 Adjusted EBITDA Contribution
$27.5 million to $30 million
high materiality
High
Net Leverage
below 3x
high materiality
High
Annualized Run Rate Synergies
more than $8 million
high materiality
High
Annualized Run Rate Synergies
over $20 million
high materiality
High
Consumer Payments Organic Growth
double digits
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Consumer Payments
Revenue growth includes contributions from KUBRA. Organic growth driven by ongoing ramp of enterprise clients across key auto and personal finance verticals. Several large enterprise clients went live post-quarter, expected to accelerate organic growth in H2.
Organic growth: 4%
—33%——
KUBRA (within Consumer Payments)
Contributed $21 million in revenue during June. Revenue growth within KUBRA's utilities, government, and insurance verticals. Demonstrated consistent revenue growth and adjusted EBITDA margins before factoring in run rate cost savings.
$21 million5%——
Business Payments
Reported revenue growth accelerated. Normalized revenue growth excludes political contributions. Driven by onboarding new clients via embedded software partners and strategic monetization initiatives on TotalPay. Benefited from strong political media contributions.
Normalized revenue growth: 19%AP supplier network: 731,000 vendors (65% YoY growth)Software partners: 108
—32%——

Product announcements

ProductTypeDetails
REPAY Voice AIlaunch
Stablecoin payments via Stellar networkmilestone
Dynamic Walletupdate

Deals & partnerships

KUBRA Acquisition of a leading consumer bill payment and communication services platform.

Completed in June 2026. Integration planning is a top priority, with $4.5 million of annualized run rate synergies realized exiting Q2, targeting $8 million by end of 2026 and $20 million plus by 2028.

Risks & headwinds

Gross Margin Compression Q2 FY26

Gross profit margin decreased to 70% in Q2 FY26 from 76% a year ago.

Mitigation:Management attributes this to KUBRA's vertical product and payment mix (print and mail, professional services) carrying a lower gross margin, not pricing or competitive dynamics. Synergies are expected to improve margins over time.

Adjusted EBITDA Margin Compression Q2 FY26

Adjusted EBITDA margins decreased to 36% in Q2 FY26 from approximately 40% a year ago.

Mitigation:The reported Q2 margin reflects a 1-month impact from KUBRA's natural mix. Consolidated adjusted EBITDA margins are expected to gradually improve as cost savings and revenue synergies are realized, with $20M+ synergies targeted by 2028.

High Net Leverage Post-Acquisition Q2 FY26

Pro forma synergized net leverage was approximately 3.7x at the end of Q2 FY26.

Mitigation:Deleveraging is a clear priority, with a target to be below 3x within 18 months, driven by continued free cash flow generation and adjusted EBITDA contribution from KUBRA and synergies.

What to watch in Q3 FY26

Consumer Payments Organic Growth

second half of the year
Current 4%
Target double digits

Why it matters

Acceleration of organic growth in Consumer Payments is a key indicator of successful client ramps and market penetration.

We look forward to our continued execution during the second half of the year, where we are expecting to accelerate organic growth into double digits.

Find out whether RPAY delivers this. Inve re-checks your case every morning.

Q&A highlights

Can you elaborate on KUBRA's pro forma growth in Q2, how it's incorporated into organic growth, and the potential for cross-sell opportunities?

KUBRA grew approximately 6% in Q2 and 5% pro forma for the first half, expected to continue mid-single-digit growth. Core consumer organic growth of 4% excludes KUBRA. Cross-sell opportunities include extending KUBRA's bill presentment and communication services to existing REPAY clients.

“KUBRA grew around 6% within Q2, and on a full year -- full half year pro forma, it's around 5%.”

asked by Joseph Vafi · answered by Robert Houser

2 min read 6 chapters

Detailed narrative

KUBRA Integration Progress and Synergies

Repay completed the KUBRA acquisition in June 2026 and immediately commenced integration efforts. The company has already realized over $4.5 million in annualized run rate synergies exiting Q2, well on track to achieve $8 million by year-end 2026 and over $20 million by 2028. Platform unification is progressing, with several large clients volunteering as early adopters of the upgraded KUBRA platform, and the integration plan is designed to be independent of individual client upgrade timelines.

Expanded Platform Capabilities and Market Position

The KUBRA acquisition has positioned Repay as a leading consumer bill payment and communication services platform in the US and Canada. The combined entity now offers a unique end-to-end digital bill pay solution, encompassing bill design, presentment, communications, core processing, and settlement. This comprehensive offering has led to immediate cross-sell opportunities, with Repay clients seeking KUBRA's bill presentment capabilities and KUBRA clients interested in expanded payment channels.

Consumer Payments Momentum and Innovation

The Consumer Payments segment reported 33% revenue growth in Q2, with 4% organic growth. Management expects organic growth to accelerate into double digits in the second half of the year, driven by several large enterprise clients going live. The segment is also seeing strong interest in innovative offerings like Dynamic Wallet and REPAY Voice AI, and successfully processed stablecoin payments using the Stellar network, aligning with its 'anywhere, any way, anytime' philosophy.

Business Payments Acceleration and Network Growth

Business Payments revenue accelerated significantly, with reported growth of 32% year-over-year and normalized organic growth of approximately 19%. This momentum is attributed to onboarding new clients through embedded software partners and strategic monetization initiatives on the TotalPay platform. The AP supplier network expanded by 65% year-over-year, reaching over 731,000 vendors, indicating strong sales pipeline and deepening software integrations.

Strategic Deployment of AI and Operational Efficiency

Repay is actively deploying AI tools across all functions to drive profitable growth and enhance capabilities. AI-assisted engineering is being utilized to accelerate platform unification and deepen connectivity with software partners, resulting in the reallocation of over 775 development hours per month. This focus on operational execution and efficiency is key to the company's strategic initiatives and integration plans.

Deleveraging and Capital Allocation Priorities

Following the KUBRA acquisition, Repay's pro forma synergized net leverage stands at approximately 3.7x. Deleveraging is a clear priority, with a target to reduce net leverage below 3x within 18 months. This will be achieved through continued strong free cash flow generation and the adjusted EBITDA contribution from KUBRA and realized synergies, demonstrating a disciplined capital allocation strategy.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.