Repay Holdings (RPAY) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01The payment processing industry is highly competitive. Such competition could adversely affect the fees we receive, and as a result, our margins, business, financial condition and results of operations22% rewritten
2. 02Unauthorized disclosure of client or consumer data, whether through breach of our computer systems, computer viruses or otherwise, could expose us to liability and protracted and costly litigation and damage our reputation
3. 03If we cannot keep pace with rapid developments and changes in our industry, the use of our products and services could decline, causing a reduction in our revenues
4. 04If our vertical markets do not increase their acceptance of electronic payments or if there are adverse developments in the electronic payment industry in general, our business, financial condition and results of operations may be adversely affected
5. 05Industry consolidation within our vertical markets can adversely affect our growth or results
6. 06Potential clients or software integration partners may be reluctant to switch to, or develop a relationship with, a new payment processor, which may adversely affect our growth
7. 07Our sales efforts to large enterprises involve considerable time and expense with long and unpredictable sales cycles
8. 08Our revenue is sensitive to shifts in payment mix
9. 09If we fail to comply with the applicable requirements of payment networks and industry self-regulatory organizations, those payment networks or organizations could seek to fine us, suspend us or terminate our registrations through our sponsor banks
10. 10Because we are not a bank, we are not eligible for membership in the Visa, MasterCard and other payment networks, and are, therefore, unable to directly access these payment networks, which are required to process transactions. We are currently registered with payment networks through our sponsor banks
11. 11To acquire and retain clients, we depend on our software integration partners that integrate our services and solutions into software used by our clients83% rewritten
12. 12Failure to effectively manage risk and prevent fraud could increase our chargeback liability and other liability
13. 13Our systems and those of our third-party providers may fail due to factors beyond our control, which could interrupt our service, resulting in our inability to process payments or provide ancillary services, loss of business, increase in costs and exposure to liability
14. 14We rely on other service and technology providers. If such providers fail in or discontinue providing their services or technology to us, our ability to provide services to clients may be interrupted, and, as a result, our business, financial condition and results of operations could be adversely impacted84% rewritten
15. 15We are subject to economic and political risk, the business cycles of our clients and software integration partners and the overall level of consumer and commercial spending, which could negatively impact our business, financial condition and results of operations
16. 16Our risk management policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types of risks associated with providing payment processing solutions
17. 17Certain payment funding methods expose us to the credit and/or operating risk of our clients
18. 18We may not be able to continue to expand our share in our existing vertical markets or continue to expand into new vertical markets, which would inhibit our ability to grow and increase our profitability
19. 19We may not be able to successfully manage our intellectual property and are subject to infringement claims
20. 20The loss of key personnel or the loss of our ability to attract, recruit, retain and develop qualified employees, could adversely affect our business, financial condition and results of operations62% rewritten
21. 21We have been the subject of various claims and legal proceedings and may become the subject of claims, litigation or investigations which could have a material adverse effect on our business, financial condition or results of operations
22. 22We may not be able to successfully execute our growth strategies
23. 23Our acquisitions subject us to a variety of risks that could harm our business and the anticipated benefits from our acquisitions may not be realized on the expected timeline or at all
24. 24Actual or perceived adverse developments affecting financial institutions could have a material and adverse impact on our business, financial condition or results of operations69% rewritten

Risks Related to Regulation

1. 25the willingness of some of our clients to accept credit or debit card or other electronic payment or result in less favorable terms to us in exchange for our clients to absorb those fees and costs, all of which would negatively affect our businessNew
2. 26The businesses of many of our clients are strictly regulated in every jurisdiction in which they operate, and such regulations, and our clients’ failure to comply with them, could have an adverse effect on our clients’ businesses and, as a result, our results of operations64% rewritten
3. 27The combination of these factors could materially adversely affect the business of our clients and may force our consumer lender or receivables management clients to change their business models. As a result, we may need to be nimble and quickly respond to the evolving needs of the vertical markets that we serve
4. 28We provide payment processing services through our various operating subsidiaries. We, along with our third party service providers, use structural arrangements designed to remove our activities from the scope of money transmitter regulationNew
5. 29We must comply with laws and regulations prohibiting unfair or deceptive acts or practices, and any failure to do so could materially and adversely affect our business
6. 30Governmental regulations designed to protect or limit access to or use of consumer information could adversely affect our ability to effectively provide our products and services
7. 31Changes in tax laws or their judicial or administrative interpretations, or becoming subject to additional U.S., state or local taxes that cannot be passed through to our clients, could negatively affect our business, financial condition and results of operations
8. 32Failure to maintain effective systems of internal and disclosure control could have a material adverse effect on our results of operation and financial condition

Risks Related to Our Indebtedness

1. 33Our level of indebtedness could adversely affect our ability to meet our obligations under our indebtedness, react to changes in the economy or our industry and to raise additional capital to fund operations48% rewritten
2. 34Our indebtedness under the Second Amended Credit Agreement bears interest at a variable rate, primarily based on the Secured Overnight Financing Rate (“SOFR”), and, as a result, our interest expense may increase if market interest rates rise, which could adversely affect our cash flows and results of operationsNew
3. 35Future operating flexibility is limited by the restrictive covenants in the Amended Credit Agreement, and we may be unable to comply with all covenants in the future
4. 36merge or consolidate with other companies or transfer all or substantially all of our assets
5. 37We may not have the ability to raise the funds necessary to settle conversions of the 2029 Notes, or to repurchase the 2029 Notes upon a fundamental change, and our future debt may contain, limitations on our ability to pay cash upon conversion or repurchase of the 2029 NotesNew
6. 38The conditional conversion feature of the 2029 Notes, if triggered, may adversely affect our financial condition and operating results44% rewritten
7. 39Provisions in the indenture could delay or prevent an otherwise beneficial takeover of the Company32% rewritten

Risks Related to Our Ownership Structure

1. 40In certain cases, payments under the Tax Receivable Agreement may exceed the actual tax benefits we realize or be accelerated64% rewritten
2. 41result, in certain circumstances, we could make payments under the Tax Receivable Agreement in excess of our actual income or franchise tax savings, which could materially impair our financial conditionNew

Risks Related to our Class A Common Stock

1. 42Future issuances or sales of substantial amounts of our Class A common stock in the public market, or the perception that such issuances or sales may occur, could cause the market price for our Class A common stock to decline
2. 43Our stock price may be volatile, which could negatively affect our business and operations87% rewritten
3. 44earnings and margins or general market and economic factors. If our future operating results or margins are below the expectations of stock market analysts or our investors, our stock price will likely declineNew
4. 45Because we do not currently intend to pay dividends, holders of our Class A common stock will benefit from an investment in our Class A common stock only if it appreciates in value
5. 46Delaware law and our governing documents 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 favorable54% rewritten
6. 47and 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 usNew