Priority Technology Holdings reported Q3 2025 financial results on November 6, 2025, with CEO Tom Priore and CFO Tim O'Leary presenting a nuanced picture of near-term challenges balanced against long-term strategic progress. Revenue reached $241.4 million (up 6.3% year-over-year) while adjusted EBITDA grew 5.7% to $57.8 million. The quarter revealed divergent segment performance: Treasury Solutions surged 18% and Payables grew 14%, while Merchant Solutions moderated to 2% growth as same-store sales softened in restaurants, construction, and wholesale trade. Beyond the numbers, Priority executed critical strategic initiatives including a $1.1 billion refinancing (reducing borrowing costs by 100 basis points), two acquisitions, Canadian market entry, and record quarterly deposit growth of $200 million.

The Q3 Story: Diversification in Action

Priority's third quarter demonstrated platform diversification value as leadership navigated contrasting segment dynamics. Priore framed the results with measured confidence: "Our third quarter results reflect the strength and diversification of Priority's Connected Commerce platform, with over 6% revenue growth and 10% adjusted gross profit growth. Our ability to connect payments and treasury solutions across our diverse business segments delivered over 18% revenue growth for Treasury Solutions and 14% growth for Payables, while adjusted gross profit margins expanded by nearly 140 basis points."

Adjusted gross profit reached $94.8 million, increasing 10.2% from $86 million in Q3 2024. Adjusted gross profit margin expanded to 39.2%, up from 37.9% in the prior year. Operating income held relatively steady at $37.8 million, while adjusted EPS increased 55.6% to $0.28 from $0.18.

Behind these figures lay complexity. CFO Tim O'Leary explained that same-store sales weakness began in August and accelerated through September. The restaurant vertical (approximately 16-17% of Priority's processing volume) experienced consumer spending pullback. Construction (mid-single digits of volume) and wholesale trade showed similar softness.

Merchant attrition remained stable, leading management to attribute the slowdown to macroeconomic factors rather than customer defection. "We started seeing some of that in August, and it certainly accelerated in September," O'Leary noted. "It was relatively broad based, though restaurants, construction, and wholesale trade were a even more onerous at the tail end of the quarter."

Priority revised its full-year 2025 revenue guidance from $970-990 million to $950-965 million, reflecting 8-10% growth. However, the company raised the low end of adjusted gross profit guidance from $365 million to $370 million and improved adjusted EBITDA guidance to $223-228 million. The ability to maintain profitability metrics while reducing revenue expectations demonstrates operational discipline and mix improvement toward higher-margin segments.

Strategic Segment Renaming Reflects Platform Evolution

Priority announced nomenclature changes with Q3 results that signal strategic positioning. The former SMB segment became Merchant Solutions, B2B transformed into Payables, and Enterprise now operates as Treasury Solutions. The changes carry no financial impact but represent important communication about how Priority views its business.

Tom Priore explained the rationale: "Consistent with the evolution of Priority from its origins as a monoline merchant acquirer over 20 years ago to a diversified commerce platform today, we are renaming our operating segments to better reflect not only their respective solution sets, but the diverse mix of increasingly larger customers they serve."

The shift addresses investor confusion about segment classification. As Priority evolved its unified commerce platform, customers often defied simple size-based categorization. A large enterprise might enter through merchant acquiring (processing ticket sales) or through payables automation (managing vendor payments).

O'Leary elaborated: "As we interact with the investor community, there was increasing confusion on what is SMB and what is enterprise because people were associating it with just the size of customer. We're trying to reorient the segments to the solution set provided because the customer sizes are changing as we evolve the business."

This reframing aligns with Priority's Connected Commerce positioning. Customers access multiple capabilities through integrated infrastructure rather than purchasing point solutions. The segment names now describe what Priority provides rather than attempting to categorize customer characteristics.

Strategic Milestones Beyond the Income Statement

Priority's third quarter delivered operational achievements positioning the company for sustained growth. Priore reflected on this development: "Q3 was not among our best-performing quarters purely as a measure of economic growth despite the strong performance in our Payables and Treasury Solutions segments. But make no mistake, our third quarter was one of intense internal growth that has set critical foundations for developing and increasing enterprise value."

The refinancing completed July 31, 2025 restructured Priority's capital base through a new $1.1 billion broadly syndicated credit facility. The transaction reduced interest rates by 100 basis points (approximately $7 million in annual savings), extended debt maturity to 2032, and increased liquidity. Subsequent to quarter end, Priority made a $15 million voluntary term loan prepayment, bringing year-to-date debt reduction to $25 million.

Two strategic acquisitions expanded Priority's capabilities. Boom Commerce, acquired in August 2025, brought enterprise customer acquisition expertise through an existing reseller partnership. The transaction adds veteran sales depth with exclusive distribution relationships, expanding Priority's West Coast presence.

Dealer Merchant Services, acquired October 1, 2025, provides vertically focused software and payments in the automotive dealership arena. Priore noted that Priority sees automotive as a defensive vertical with counter-cyclical characteristics. When new car sales moderate, consumers keep vehicles longer, increasing service and maintenance spending—providing stability that discretionary merchant categories cannot match.

Priority launched a dedicated residual financing facility during Q3, providing competitive advantage in ISO and ISV partner development. The $50 million nonrecourse facility operates at the segment level, enabling Priority to buy residuals and provide development funding without balance sheet impact at the holding company level. Tom Priore emphasized the strategic value: "There's no one else who has something like this. That will enable us to put gas in their tanks to supercharge their marketing and accelerate adoption of their products."

Geographic expansion materialized through Canadian card acquiring activation in Q3 2025. Priority also integrated real-time payment capabilities, enabling instant settlement that supports the company's cash acceleration thesis.

The operational achievement generating most enthusiasm involved deposits under administration. Priority increased deposits by $200 million during Q3 2025 alone, reaching total deposits of $1.6 billion as of September 30. This represents the largest quarterly deposit growth in company history.Tom Priore contextualized the quarter: "We activated card acquiring in Canada, added real-time payment capabilities and implemented a unique financing source to fuel our partners' growth. Additionally, we reduced our borrowing cost by 100 basis points, executed 2 accretive acquisitions without impacting net leverage and generated free cash flow to pay down $15 million of debt, all while integrating a host of ISV and enterprise customers on our commerce platform with addressable annual transaction volume of over $10 billion to capture."

Payables and Treasury Solutions: The Growth Engines

Payables delivered Q3 revenue of $25.2 million, increasing 13.6% from $22.1 million. Adjusted EBITDA reached $3.5 million, up 78.8% from $1.9 million, demonstrating significant operating leverage. The segment achieved this EBITDA acceleration while reducing operating expenses before depreciation and amortization by 12.5% year-over-year.

CPX, Priority's accounts payable automation platform, generated 26% year-over-year revenue growth. The platform addresses the $3+ trillion U.S. B2B payments market by automating invoice processing, payment execution, and vendor management.

Treasury Solutions produced Q3 revenue of $55.7 million, increasing 18.2% from $47.1 million. Adjusted EBITDA reached $46.7 million, up 14.0% from $40.9 million, with adjusted EBITDA margin holding strong at 86.3%.

Average CFTPay billed clients reached 1.05 million during Q3, increasing 26.7% from 832,000. Average total account balances grew to $1.25 billion, up 38.6% from $900.7 million. As of September 30, 2025, total account balances reached $1.6 billion following the record $200 million quarterly deposit increase.

The recurring revenue composition shift represents significant transformation in Priority's business model. During Q3 2025, over 64% of adjusted gross profit came from recurring revenues not dependent on transaction counts or card volumes, compared to just under 60% in Q3 2024. On a trailing twelve-month basis, Payables and Treasury Solutions contributed over 62% of gross profit for the twelve months ended September 30, representing a 23 percentage point increase from the beginning of 2023.

Executive Outlook and 2026 Preliminary Guidance

Priority's updated full-year 2025 guidance reflects the balance between near-term merchant challenges and sustained growth in higher-margin segments. Revenue expectations of $950-965 million imply 8-10% growth versus 2024's $879.7 million. Adjusted gross profit guidance of $370-380 million and adjusted EBITDA guidance of $223-228 million maintain profitability focus.

Tim O'Leary offered preliminary 2026 expectations, projecting high single-digit revenue growth with adjusted gross margins expanding by 75 to 100 basis points or more. The segment-level outlook anticipates mid-single digit organic growth in Merchant Solutions, low double-digit growth in Payables, and high teens to 20% growth in Treasury Solutions.

Priore emphasized the role of enterprise pipeline activation: "The upside guidance is activation of the pipeline. If it activates faster than we've modeled, that all falls right to the bottom line. These customers are using everything—acquiring, payables, and treasury solutions."

Priority's defensive vertical strategy received significant emphasis. Beyond automotive, Tom Priore highlighted payroll and benefits as essential business services, noting that two-thirds of Priority's gross profit comes from segments outside of acquiring—a deliberate strategic positioning toward non-discretionary revenue streams.

Priority's Q3 2025 performance demonstrates how CEO Tom Priore and CFO Tim O'Leary navigate near-term volatility while executing long-term strategy. The segment renaming signals maturity beyond traditional payment processing. Strategic initiatives position Priority for sustained momentum despite merchant headwinds. With 18% compound annual adjusted EBITDA growth since the 2018 IPO, the executive team's disciplined approach to building unified commerce infrastructure continues creating competitive advantages. As Priore emphasized: "We are built with intention for the long-term and built to last."