Priority Technology Holdings (NASDAQ:PRTH) Reports Mixed Q3 2025 Results with EPS Beat and Revenue Miss

Priority Technology Holdings (NASDAQ:PRTH) reported its third-quarter financial results for 2025, delivering a performance that presented a mixed picture for investors. While the company demonstrated solid year-over-year growth in several key profitability metrics, its top-line revenue fell short of analyst expectations, contributing to a negative market reaction in pre-market trading.

Third Quarter Performance Versus Estimates

The company’s Q3 results revealed a divergence between its revenue performance and its earnings power. Priority reported revenue of $241.4 million, which marked a 6.3% increase compared to the $227.0 million reported in the same quarter last year. However, this figure came in below the analyst consensus estimate of $256.8 million.

In contrast, the company’s profitability metrics showed significant strength. Its non-GAAP adjusted earnings per share (EPS) came in at $0.28, a substantial 55.6% increase from the $0.18 reported in Q3 2024. This result also surpassed the analyst estimate of $0.27 per share.

The key financial highlights from the quarter include:

• Revenue: $241.4 million (Actual) vs. $256.8 million (Estimate)
• Adjusted EPS: $0.28 (Actual) vs. $0.27 (Estimate)
• Adjusted Gross Profit: Increased 10.2% to $94.8 million
• Adjusted EBITDA: Rose 5.7% to $57.8 million

Market Reaction and Strategic Developments

The market’s immediate response to the earnings release was negative, with the stock trading down approximately 3.75% in pre-market activity. This suggests that investors were more focused on the revenue miss than the earnings beat and strong profit growth.

Beyond the headline numbers, the earnings report highlighted several strategic achievements. The company successfully closed on a new $1.1 billion credit facility in July, which lowered its borrowing costs by 100 basis points and extended the debt maturity to 2032. This was followed by a $15 million voluntary prepayment on its term loan in October, signaling strong cash flow generation. Priority also completed two accretive acquisitions during the quarter—Boom Commerce and Dealer Merchant Services—to bolster its partner network and vertical software capabilities.

Updated Full-Year Guidance and Analyst Expectations

Looking ahead, Priority provided updated guidance for the full 2025 fiscal year. The company now forecasts:

• Revenue: Between $950 million and $965 million
• Adjusted Gross Profit: Between $370 million and $380 million
• Adjusted EBITDA: Between $223 million and $228 million

This revenue guidance implies a growth rate of 8% to 10% compared to fiscal 2024. It is noteworthy that the midpoint of this new range, approximately $957.5 million, sits below the current analyst consensus estimate for full-year sales of $994.2 million. This guidance revision likely contributed to the negative investor sentiment following the report.

Segment Rebranding and Operational Wins

The company also announced a rebranding of its operating segments to better reflect its evolution into a diversified commerce platform. The segments are now named Merchant Solutions, Payables, and Treasury Solutions, replacing the former SMB, B2B, and Enterprise labels, respectively. The financial results for each segment remain unchanged.

Operational highlights for the quarter included the launch of a dedicated residual financing facility, the activation of card acquiring in Canada, the addition of real-time payments capabilities, and a $200 million increase in deposits under administration.

Conclusion

Priority Technology Holdings' Q3 2025 results paint a picture of a company successfully expanding its profitability and executing on its strategic financial and operational goals. The significant beat on adjusted EPS and the strong growth in adjusted gross profit are clear positives. However, the revenue miss for the quarter and the downward revision to the full-year sales outlook have taken precedence in the market’s assessment, leading to a negative short-term price reaction. Investors will be watching closely to see if the company's focus on high-margin segments and strategic acquisitions can eventually translate into the top-line growth that the market is seeking.

For a more detailed breakdown of future earnings estimates and historical performance, review the earnings and estimates data for PRTH.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, nor does it recommend buying or selling any securities. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.