Third Quarter 2026
Filed Nov 5, 2026Third Quarter Performance Driven by Strength of Unified Commerce Platform
Revenue, adjusted gross profit and adjusted EBITDA increased year over year, but gross margins contracted and GAAP operating income, net income and diluted EPS declined.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30, 2026GAAP | $268.6M | – | 11.3% |
| Revenue organic growth, three months ended September 30, 2026other | 9.2% | – | 9.2% |
| Gross profit, three months ended September 30, 2026GAAP | $97M | – | 8.1% |
| Gross profit margin, three months ended September 30, 2026GAAP | 36.1% | – | decreased by nearly 110 basis points |
| Adjusted gross profit, three months ended September 30, 2026non-GAAP | $102.7M | – | 8.4% |
| Adjusted gross profit margin, three months ended September 30, 2026non-GAAP | 38.2% | – | decreased by nearly 100 basis points |
| Operating income, three months ended September 30, 2026GAAP | $35.9M | – | decreased 5.0% |
| Net income attributable to common stockholders, three months ended September 30, 2026GAAP | $12.2M | – | decreased 55.7% |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $60.9M | – | 5.5% |
| Diluted EPS, three months ended September 30, 2026GAAP | $0.14 | – | decreased by $0.20, or by 58.8% |
| Adjusted diluted EPS, three months ended September 30, 2026non-GAAP | $0.30 | – | increased by $0.02, or 7.1% |
| Revenue, nine months ended September 30, 2026GAAP | $780.4M | – | – |
| Gross profit, nine months ended September 30, 2026GAAP | $284.9M | – | – |
| Gross profit margin, nine months ended September 30, 2026GAAP | 36.5 % | – | – |
| Adjusted gross profit, nine months ended September 30, 2026non-GAAP | $301.4M | – | – |
| Adjusted gross profit margin, nine months ended September 30, 2026non-GAAP | 38.6 % | – | – |
| Operating income, nine months ended September 30, 2026GAAP | $102.3M | – | – |
| Net income attributable to common stockholders, nine months ended September 30, 2026GAAP | $31.85M | – | – |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | $178.4M | – | – |
| Diluted earnings per common share, nine months ended September 30, 2026GAAP | $ 0.38 | – | – |
| Adjusted diluted earnings per common share, nine months ended September 30, 2026non-GAAP | $ 0.87 | – | – |
| Net cash provided by operating activities, nine months ended September 30, 2026GAAP | 98,025 | – | – |
| Net cash used in investing activities, nine months ended September 30, 2026GAAP | (547,189) | – | – |
| Net cash provided by financing activities, nine months ended September 30, 2026GAAP | 222,493 | – | – |
| Merchant Solutions adjusted EBITDA, three months ended September 30, 2026non-GAAP | $32.63M | – | – |
| Payables adjusted EBITDA, three months ended September 30, 2026non-GAAP | $3.92M | – | – |
| Treasury Solutions adjusted EBITDA, three months ended September 30, 2026non-GAAP | $48.09M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Merchant Solutions, three months ended September 30, 2026Total card processing dollar value was $ 19,265,134 and total card transaction count was 223,077. | $179.6M | – | – |
| Payables, three months ended September 30, 2026Buyer funded card processing dollar value was $ 1,134,730, supplier funded issuing dollar value was $ 295,771, and ACH transaction count was 4,695. | $31.63M | – | – |
| Treasury Solutions, three months ended September 30, 2026Average CFTPay billed clients were 1,152,092, average CFTPay monthly enrollments were 51,360, and average total account balances were $ 1,542,346. | $60.27M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
What drove it
- Third-quarter revenue increased 11.3%, including organic growth of 9.2%.
- Merchant Solutions revenue was $ 179,645, Payables revenue was $ 31,626, and Treasury Solutions revenue was $ 60,267 for the three months ended September 30, 2026.
- Total account and deposit balances as of September 30, 2026 were $2.0 billion, compared with $1.6 billion as of September 30, 2025.
- Adjusted EBITDA increased to $60.9 million from $57.8 million in the third quarter.
Concerns
- GAAP gross profit margin was 36.1%, decreased by nearly 110 basis points from 37.2%.
- Adjusted gross profit margin was 38.2%, decreased by nearly 100 basis points from 39.2%.
- Operating income decreased 5.0% to $35.9 million, while net income decreased 55.7% to $12.2 million.
- The Company will not provide forward-looking guidance or updates to previously issued guidance because of the pending Transaction.
- The Company expects the Transaction to complete in the first half of 2027, subject to customary closing conditions, stockholder approval and required regulatory approvals.
What to watch
- Completion of the Transaction under which certain affiliates of WD Capital Partners Parent Inc. will acquire outstanding common stock for $8.05 per share in cash.
- Margin performance following third-quarter declines in GAAP and adjusted gross profit margins.
- Merchant Solutions card processing dollar value, Payables buyer funded card processing dollar value, and Treasury Solutions account-balance and enrollment indicators.
- The absence of future quarterly earnings calls, webcasts, forward-looking guidance and updates to previously issued guidance.
Balance sheet and cash flow
- Cash and cash equivalents were $ 135,648 as of September 30, 2026, compared with $ 77,192 as of December 31, 2025.
- Restricted cash was 16,009 as of September 30, 2026, compared with 16,457 as of December 31, 2025.
- Long-term debt, net of current portion, discounts and debt issuance costs was 1,044,409 as of September 30, 2026, compared with 1,039,358 as of December 31, 2025.
- Current portion of long-term debt was 5,700 as of September 30, 2026, compared with — as of December 31, 2025.
- Net cash provided by operating activities was 98,025 for the nine months ended September 30, 2026, compared with 63,161.
- Additions to property, equipment and software were (20,430) for the nine months ended September 30, 2026, compared with (18,952).
- Short-term investments, net were (500,000) for the nine months ended September 30, 2026, compared with (46,667).
- Net change in cash and cash equivalents and restricted cash was (226,671) for the nine months ended September 30, 2026, compared with 199,897.
Analysis
Priority Commerce reported third-quarter revenue of $268.6 million, up 11.3% from $241.4 million, including organic growth of 9.2%. The result was supported by revenue of $ 179,645 in Merchant Solutions, $ 31,626 in Payables and $ 60,267 in Treasury Solutions. The reported operating indicators included total card processing dollar value of $ 19,265,134 in Merchant Solutions, buyer funded card processing dollar value of $ 1,134,730 in Payables and average total account balances of $ 1,542,346 in Treasury Solutions.
Profit growth trailed revenue growth. GAAP gross profit increased 8.1% to $97.0 million, while adjusted gross profit increased 8.4% to $102.7 million. GAAP gross profit margin fell to 36.1% from 37.2%, and adjusted gross profit margin fell to 38.2% from 39.2%. Operating income declined 5.0% to $35.9 million despite the revenue increase.
GAAP net income attributable to common stockholders was $12.2 million, down 55.7% from $27.6 million, and diluted EPS was $0.14 versus $0.34. Adjusted EBITDA increased 5.5% to $60.9 million, while adjusted diluted EPS increased to $0.30 from $0.28. The reconciliation identifies $ 2,905 of selling, general and administrative expenses classified as non-recurring, $ 1,652 of non-cash stock-based compensation and $ 354 of bargain purchase adjustment as third-quarter adjusted EBITDA reconciling items.
For the nine months ended September 30, 2026, net cash provided by operating activities was 98,025, compared with 63,161. Cash and cash equivalents were $ 135,648 at September 30, 2026, and long-term debt, net of current portion, discounts and debt issuance costs was 1,044,409. Investing cash flow included (500,000) of short-term investments, net, and net cash used in investing activities was (547,189).
The pending go-private transaction now frames the outlook. The Company will not provide forward-looking guidance, update previously issued guidance, or host an earnings conference call or webcast for the third quarter and does not expect to do so for future quarters. The stated transaction consideration is $8.05 per share in cash, and the Company expects to complete the Transaction in the first half of 2027, subject to customary closing conditions, stockholder approval and regulatory approvals.
Not in the filing
stated, not guessed- Forward-looking financial guidance was not provided.
- Previous-release outlook was not provided, so comparison with prior guidance is unavailable.
- Quarterly operating cash flow was not reported.
- Free cash flow was not reported.
- Share repurchases and dividends were not reported.
- No named executive commentary or executive quotes were provided.
- A quarterly debt repayment total was not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.