REPAY Q2 2026 earnings: KUBRA lifts revenue while margins narrow

REPAY (NASDAQ: RPAY) reported Q2 2026 revenue of $100.7 million, up 33% from $75.6 million a year earlier, while diluted loss per share attributable to the company narrowed to $0.13 from $1.15. KUBRA contributed approximately $21 million in June, but organic revenue growth was 6% and consolidated gross margin declined to 70% from 76%. Free cash flow increased to $27.4 million, representing 75% conversion of adjusted EBITDA.

Core Financial Results

KUBRA accounted for approximately $21 million of quarterly revenue, equivalent to about 84% of REPAY’s $25.1 million year-over-year revenue increase. This highlights the difference between the reported growth rate of 33% and organic growth of 6%.

The sharp reduction in the GAAP net loss largely reflects an easier comparison: Q2 2025 included a $103.8 million goodwill impairment. On a simple pre-impairment comparison, the prior-year operating loss would have been approximately $1.1 million, compared with a $3.3 million operating loss this quarter.

The quarter ended June 30 produced the following results:

Adjusted EBITDA, free cash flow and free cash flow conversion are non-GAAP measures. Adjusted EBITDA grew more slowly than revenue, implying an adjusted EBITDA margin of approximately 36%, down from about 42% a year earlier.

Business and Segment Performance

Both segments posted reported revenue growth above 30%, but their underlying growth rates differed. Consumer Payments generated only 4% organic growth, while Business Payments recorded 19% normalized organic growth, excluding acquisition and disposition effects as well as incremental gross profit associated with political media spending.

Intersegment revenue eliminations were $7.5 million, so segment revenue does not add directly to consolidated revenue. Consumer Payments gross profit grew more slowly than its revenue, while Business Payments maintained similar revenue and gross-profit growth rates.

REPAY ended the quarter with more than 352 software partners, including 54 added through KUBRA. Its accounts-payable supplier network expanded by approximately 66% year over year to more than 731,000 suppliers.

Profitability, Cash Flow and the Balance Sheet

Costs of services rose 63% to $30.1 million, substantially faster than revenue, while selling, general and administrative expense increased 41% to $46.2 million. These expense increases contributed to the six-percentage-point decline in consolidated gross margin and the contraction in adjusted EBITDA margin.

Interest expense also increased to $8.0 million from $3.1 million. At June 30, current and long-term debt totaled approximately $753.1 million, net of reported adjustments, compared with $426.5 million at December 31, 2025. Cash and cash equivalents declined to $83.7 million from $115.7 million over the same period.

The balance sheet expanded after KUBRA closed on June 1. Goodwill increased to $652.1 million from $474.5 million at year-end, while intangible assets rose to $560.2 million from $329.8 million. Against the higher debt and interest burden, the quarter’s $27.4 million of free cash flow provided a meaningful source of internal funding.

2026 Guidance

REPAY reiterated the full-year outlook previously issued when the KUBRA acquisition closed. The guidance incorporates seven months of expected KUBRA contributions and assumes companywide organic revenue growth of approximately 10% to 12%.

The company did not provide quantitative GAAP reconciliations for the forward-looking non-GAAP measures, citing uncertainty in predicting the relevant adjustments.

Management Perspective

CEO John Morris said REPAY expects organic growth to accelerate into double digits during the second half, supported by implementations, sales activity and KUBRA integration. Management is also focused on achieving acquisition synergies rather than relying only on KUBRA’s added revenue.

CFO Robert Houser said combined free cash flow and expected synergies support REPAY’s objective of bringing net leverage below 3 times over the next 18 months. That target is particularly relevant following the increase in reported debt and quarterly interest expense.

Recent Insider Transactions

The supplied insider dataset shows that the latest reported transactions were dominated by stock awards. A Forager Fund purchase was the only cash purchase among the latest ten entries; the reported transaction value should not be interpreted as a recommendation or as evidence of management’s outlook.

The separate six-month summary includes additional Forager Fund direct and indirect entries between March 27 and April 9. Because identical values may appear under both ownership classifications, those entries should not be mechanically added together.

Risks Investors Should Watch

• Dependence on KUBRA integration: KUBRA supplied most of the quarterly revenue increase and is included in full-year guidance. Delayed integration or lower-than-expected synergies could affect revenue, adjusted EBITDA and leverage reduction.
• Required organic growth acceleration: Q2 organic growth was 6%, while management expects double-digit growth in the second half and approximately 10% to 12% for the full year.
• Margin pressure: Revenue grew faster than gross profit and adjusted EBITDA, while costs of services and SG&A increased faster than revenue. Continued expense growth could limit the earnings benefit from KUBRA.
• Higher leverage and interest expense: Reported debt increased materially from year-end and quarterly interest expense more than doubled. REPAY’s ability to generate cash and realize synergies will influence progress toward its below-3-times net leverage target.

Summary

REPAY’s Q2 2026 reported growth was led primarily by the first month of KUBRA ownership, while the underlying businesses produced more moderate organic growth and consolidated margins narrowed. Free cash flow remained healthy, but higher debt and interest expense make successful integration, synergy realization and second-half organic acceleration the main issues to monitor.