Repay (RPAY) Q3 2026 Earnings Call Transcript

DATE

Monday, Nov. 9, 2026

CALL PARTICIPANTS

• Head of Investor Relations - Charles Nabhan
• Co-Founder and Chief Executive Officer - John Morris
• Chief Financial Officer - Robert Houser

TAKEAWAYS

• Revenue -- $153.4 million, representing 97% growth driven by the integration of the KUBRA acquisition and increased volume in the Business Payments segment.
• Organic Revenue Growth -- 14% year over year, including a 9 percentage point contribution from political media revenue.
• Consumer Payments Revenue -- $137.0 million, an increase of 91% primarily due to the addition of KUBRA's revenue contribution.
• Consumer Payments Organic Revenue Growth -- 0.3%, reflecting softer than expected revenue pull-through from new sales and prior year cohorts.
• KUBRA Revenue -- $65 million, representing 8% pro forma growth fueled by strength in professional services and communication services.
• Business Payments Revenue -- $23.9 million, a 99% increase driven by the accounts payable business and political media activity.
• Normalized Organic Business Payments Revenue Growth -- 40%, excluding the impact of cyclical political media spending.
• Political Media Revenue -- $7.1 million, as the business capitalized on an active campaign season and outperformed the overall market.
• Full Year Political Media Revenue Forecast -- $16 million to $18 million, raised from the previous range of $8 million to $10 million due to share gains and high October volume.
• Bank Reseller Channel Revenue -- $3 million, representing contribution from the transition of bank partners to the proprietary platform.
• Bank Reseller Channel Investment -- $14 million in the third quarter, with an additional $5 million planned for the fourth quarter to expand accounts payable distribution.
• Gross Profit Margin -- 65%, a decrease from 74% in the prior year quarter due to the mix effect of lower-margin print and mail services from KUBRA.
• Adjusted EBITDA -- $50.9 million, growing 63% year over year reflecting a full quarter of KUBRA operations.
• Annualized Cost Synergy Run Rate -- $11 million, raised from the previous target of $8 million as the company captures integration efficiencies ahead of schedule.
• Adjusted Net Income -- $22.5 million, or $0.25 per share.
• Free Cash Flow -- negative $21.1 million, impacted by the $14 million bank channel investment and $11 million in working capital timing.
• Accounts Payable Supplier Network -- over 878,000, representing 68% growth compared to the prior year.
• Full Year Revenue Guidance -- $490 million to $500 million, representing approximately 60% reported growth.
• Full Year Normalized Organic Revenue Growth Guidance -- 5% to 6%, adjusted from the previous range of 7% to 9% to reflect slower ramp-up in core consumer payments.
• Full Year Adjusted EBITDA Guidance -- $168.5 million to $176 million, supported by synergy realization and strong political media margins.
• Full Year Free Cash Flow Conversion Guidance -- 20% to 25%, revised from 30% to account for the $19 million total bank channel investment.
• Net Leverage -- 3.8x at quarter end, with a management target to reduce leverage below 3.0x by year-end 2027.
• Liquidity -- $164 million, consisting of $64 million in operating cash and an undrawn $100 million revolving credit facility.
• Software Partners -- over 350, including more than 50 partners added through the KUBRA acquisition.
• Interest Expense -- $15.5 million for the quarter.

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RISKS

• Morris stated, "In core Consumer Payments, results this quarter were below our expectations, largely due to a weaker-than-expected pull-through from 2026 new sales and prior year sales," noting that larger enterprise implementations were taking longer than historically anticipated.
• Houser warned that "the reported margin reflects a full quarter of KUBRA," whose product mix carries a lower gross margin than the core business, resulting in a year-over-year margin decline of 9 percentage points.
• Houser noted that free cash flow was adversely impacted by "approximately $11 million of working capital timing," primarily due to elevated political media receivables at quarter end.

SUMMARY

Repay Holdings Corporation (NASDAQ:RPAY) reported third quarter results that highlighted the successful integration of its KUBRA acquisition and significant expansion in the political media sector. Management reported that strong performance in Business Payments helped offset softer organic results in the core Consumer Payments segment. The company increased its annualized cost synergy targets while adjusting its full-year guidance for normalized organic growth and free cash flow conversion to reflect current sales pull-through and recent strategic investments in the bank reseller channel.

• CEO Morris stated, "REPAY now manages the entire life cycle of a bill from design and creation through presentment and communication to processing and settlement on our own payment engine."
• Houser indicated that the gross margin decline was "almost entirely a mix effect from KUBRA whose vertical, product and payment mix, including print and mail, carries a lower gross margin than core REPAY."
• Morris noted that the company launched Dynamic Wallet, which "removes a major source of friction in bill payment and keeps our clients' brands in front of their customers on a recurring basis."
• Agentic AI now manages approximately 95% of security alerts and has reduced response times from roughly 300 minutes to seven minutes.
• Management secured consent from 52 banks for its new reseller channel, representing 96% of the initial plan and establishing a new recurring revenue distribution path for its accounts payable solutions.

INDUSTRY GLOSSARY

• KUBRA: A customer experience management company acquired by Repay that provides bill presentment and payment solutions.
• Agentic AI: Artificial intelligence systems designed to perform specific workflows autonomously, used by Repay for security alerts and client implementation.
• ACH: Automated Clearing House, a network used for electronic financial transactions in the United States.
• Virtual Card: A unique digital credit card number used for business-to-business payments to enhance security and tracking.
• SOFR: Secured Overnight Financing Rate, a benchmark interest rate used for dollar-denominated loans and derivatives.
• Adjusted EBITDA: A non-GAAP financial measure representing net income before interest, taxes, depreciation, and amortization, with adjustments for non-recurring or non-cash items.
• Normalized Organic Revenue Growth: A non-GAAP measure of year-over-year revenue growth that excludes the impact of acquisitions and cyclical political media spending.

Full Conference Call Transcript

Operator: Good afternoon. I'd like to welcome everyone to REPAY Holdings Corporation's Third Quarter 2026 Earnings Call. This call is being recorded, November 9th, 2026. I'd like to turn the session over to Charles Nabhan, Head of Investor Relations at REPAY. Charles, you may begin.

Charles Nabhan: Thank you. Good afternoon, and welcome to REPAY's Third Quarter 2026 Earnings Conference Call. With us today are John Morris, Co-Founder and Chief Executive Officer; and Robert Houser, Chief Financial Officer. During this call, we will be making forward-looking statements about our beliefs and estimates regarding future events and results. Those forward-looking statements are subject to risks and uncertainties, including those set forth in the SEC filings related to today's results and in our most recent Form 10-K. Actual results may differ materially from any forward-looking statements that we make today. Forward-looking statements speak only as of today, and we do not assume any obligation or intend to update them, except as required by law.

In an effort to provide additional information to investors, today's discussion will also reference certain non-GAAP financial measures. Reconciliations and other explanations of those non-GAAP financial measures can be found in today's press release and in the earnings supplement, each of which is available on the company's IR site. With that, I will now turn the call over to John.

John Morris: Good afternoon, and thank you for joining us today. I'd like to begin by discussing who the new REPAY is following the KUBRA acquisition. I'll then share highlights from the quarter and our strategic priorities, including how we're applying AI across the business, before turning the call over to Rob to walk through our financial results and outlook in detail. Since we announced the KUBRA acquisition, we have frequently been asked, who is REPAY? What are you trying to achieve? And what problems are you solving for clients?

Our answer is straightforward with KUBRA, REPAY now manages the entire life cycle of a bill from design and creation through presentment and communication to processing and settlement on our own payment engine. For clients, that means one partner for the whole billing relationship instead of several vendors stitched together. That end-to-end capability, which is fully integrated across our platform, sets us apart across our verticals and brings meaningful scale and diversification. Today, the combined company supports approximately $130 billion of annual payment volume, reaches more than 40% of U.S. and Canadian households and counts 8 of the 10 largest U.S. gas and electric providers as clients.

Our goal is to become the leading bill presentment and payment company in North America, but getting there depends on operating as one integrated company, which is why we've invested in technology, product and go-to-market. The third quarter reflected real progress against that strategy. Business Payments and KUBRA both delivered exceptional results. The KUBRA integration is on track and already generating cross-sell interest, and we are raising our cost synergy target. In core Consumer Payments, results did not meet our expectations, but we are taking deliberate actions to improve the business' competitive position under new leadership.

Rob will cover the financials in detail, including free cash flow and our investment in the bank reseller channel, so I'll focus on what's happening across the businesses. The integration of KUBRA remains our top priority. It is progressing as planned. Our conversations with clients and progress on platform integration have increased our conviction that this is a highly complementary combination. We are capturing cost synergies ahead of schedule, helped in part by AI-enabled efficiencies. Just as importantly, we see early revenue opportunities. In visits with several of our largest enterprise clients, we've heard strong interest from core REPAY clients on bill design, presentment and print, while KUBRA clients are asking about expanding their payment channels and options.

In core Consumer Payments, results this quarter were below our expectations, largely due to a weaker-than-expected pull-through from 2026 new sales and prior year sales. Under the new leadership of Matt Morrow, who joined us in the second quarter, we have completed a comprehensive review of the segment's pipeline and client portfolio. We have paired that review with operational and personnel changes designed to improve execution and are pleased to report that bookings exceeded quota for the quarter. We have filled key leadership roles across the organization from sales and implementation to client and partner management.

On the new business front, recent go-lives include a captive auto leasing program for a global automaker and several new consumer lending and credit union clients. Furthermore, we are seeing reduced implementation time lines as our teams leverage Agentic AI. On the product side, we recently launched REPAY Voice, promoted KUBRA's print and communication capabilities, introduced Dynamic Wallet, which puts our clients' bill directly on the phone's digital wallet. So there's no app to download. We're particularly excited about this solution as it removes a major source of friction in bill payment and keeps our clients' brands in front of their customers on a recurring basis.

We expect these actions to improve the segment's growth trajectory beginning in 2027 and look forward to sharing more detail at our Investor Day in December. Business Payments was a standout this quarter. We capitalized on an exceptionally active campaign season, and our political media business has already reached the high end of our original full year forecast, which Rob will discuss as we raise our outlook for this portion of the business. Importantly, growth was strong outside of political as well, driven by our accounts payable business, where we are monetizing more of the volume on our platform and bringing new clients live.

Within that business, we saw a particular strength in the embedded partner channel, which has seen rapid growth from ramping of recently launched partners. This quarter, we invested $14 million in a bank reseller partnership with a large global fintech provider, which expands our business into a new distribution channel. The agreement provides us with certain contractual rights related to these relationships, and the value depends on our execution in winning each relationship and migrating it onto our platform. Thus far, we are ahead of plan on agreements signed, which reinforces our view that this is a high-return use of capital.

Before turning it over to Rob, I want to touch on AI, which we're deploying in 2 areas: the products our clients use and how we run the business. On the product side, examples include REPAY Voice, our natural language voice offering, Agentic AI within our repayment assistance plan and AI-driven vendor enrollment matching that helps business payment clients move from paper checks to electronic payments. Internally, AI is shortening the time from contract signature to first processing, accelerating client and technology migrations, improving fraud and chargeback detection and contributing to KUBRA synergies. A few data points to illustrate the impact. Our Agentic B2B payment workflows are processing a significant portion of vendor payments.

And Agentic AI now manages approximately 95% of security alerts and has reduced response times from roughly 300 minutes to about 7. This quarter, we also launched new AI agents supporting risk and underwriting reviews, and ACH self-enrollment. Additionally, we have put clear governance and budget controls around AI spend. So these investments are remaining disciplined as they scale. To sum up, we are executing on our strategy, integrating KUBRA, growing business payments and repositioning consumer payments for higher quality growth with the goal of becoming the leading bill presentment and payment company in North America.

I'm confident in our ability to deliver consistent profitable growth, and we look forward to sharing more and introducing you to our team in person at our first Investor Day on Monday, December 7th, in New York City. Before I turn the call over to Rob, I want to thank our employees across every part of REPAY for their hard work and commitment. This has been a period of transformative change for our company. From the shifts in our consumer business to bringing KUBRA into the REPAY family, I know that navigating that much change while staying focused on our clients isn't easy. Your dedication to excellence is what makes this progress possible, and I'm genuinely grateful for it.

With that, I'll turn the call over to Rob. Rob?

Robert Houser: Thank you, John, and good afternoon, everyone. Third quarter revenue was $153.4 million, up 97% year-over-year, including a full quarter contribution from KUBRA. Organic revenue growth was 13.6%, which includes approximately 9 points of contribution from political media. Excluding political media, normalized organic revenue growth was approximately 5%, an improvement from approximately 4% in each of the first 2 quarters of the year. Consumer Payments revenue increased 0.3% year-over-year on an organic basis due to softer revenue pull-through from 2026 new sales and prior year sales. We expect Consumer Payments organic growth in the low single digits in the fourth quarter as these actions work through our results.

Our 2027 expectation is to get back to growth driven by improved pipeline quality, book-to-bill execution and client expansion. We will provide more detail at our upcoming Investor Day on December 7th. KUBRA reported within Consumer Payments contributed approximately $65 million in revenue during the quarter, up approximately 8% year-over-year on a pro forma basis and an acceleration from 6% growth in the second quarter, driven by strength in professional services, payments and communication services. We are also ahead of schedule on synergy realization and are raising our annualized target run rate exiting 2026 from $8 million to $11 million. The Business Payments segment was a bright spot this quarter, generating 99% revenue growth or 40% excluding political media.

It should come as no surprise to many of you that this has been an extremely active campaign season, and our business capitalized on this activity, generating $7.1 million of political media revenue in the quarter and $9.7 million year-to-date. That already puts us at the high end of our prior full year forecast, which we ranged from $8 million to $10 million previously, and we are raising our forecast to $16 million to $18 million as a result. Political media activity in October exceeded the peak we saw during the 2024 presidential election cycle, and our share gains have enabled us to outperform the overall market.

While political media revenue is cyclical, it carries high margins, so the vast majority falls to the bottom line and accelerates our progress towards our leverage target. Outside of political media, results were driven by our accounts payable business, which benefited from the monetization of volumes on our platform as well as our new go-lives. Even excluding both political media and our newly entered bank reseller channel, Business Payments revenue grew at a double-digit rate. Business Payments also included approximately $3 million in revenue and $1.3 million in adjusted EBITDA from the bank partners that we transitioned to the REPAY platform through a commercial agreement with a strategic partner.

In connection with that agreement, we made a $14 million investment during the quarter, which is reflected in free cash flow. Because the investment related to the purchase of software, it is recorded within capital expenditures, and we expect to make a final investment of approximately $5 million under the agreement in the fourth quarter. To date, we've had consent from 52 banks, which is 96% of the plan and ahead of schedule. And we believe our accounts payable offering represents a strong value proposition for financial institutions. Gross profit was $99.5 million, a 65% margin compared with a 74% margin a year ago.

Because this change is likely to be misread, I want to be clear about what is driving it. The change is almost entirely a mix effect from KUBRA whose vertical, product and payment mix, including print and mail, carries a lower gross margin than core REPAY. Over time, we expect the shift from print toward digital presentment to support KUBRA's margin profile as digital earns a higher gross margin than print. Third quarter adjusted EBITDA was $50.9 million, up 63% from $31.2 million in the prior year quarter, with an adjusted EBITDA margin of approximately 33%. The same mix dynamic applies here as the reported margin reflects a full quarter of KUBRA.

We are ahead of schedule on cost synergies and now expect to exit 2026 at an annualized run rate of $11 million compared with our prior target of $8 million. We continue to target over $20 million in operating and CapEx synergies plus revenue opportunities exiting 2028. Third quarter adjusted net income was $22.5 million or $0.25 per share. Free cash flow was a negative $21.1 million, reflecting the $14 million bank reseller channel partnership investment, $15 million in interest expense and approximately $11 million of working capital timing. The working capital timing was primarily due to political media receivables that were elevated at quarter end ahead of the November election, and we expect this to normalize by year-end.

Now moving on to the balance sheet and liquidity. We ended the quarter with $64 million of operating cash on the balance sheet, plus an undrawn $100 million revolving credit facility that provides flexibility for total liquidity of approximately $164 million. Our capital structure consists of $288 million of 2029 convertible notes with a 2.875% coupon and a $500 million senior secured term loan due in 2033 priced at SOFR plus 550 basis points. At the end of Q3, pro forma synergized net leverage was approximately 3.8x. Deleveraging is a clear priority, and we remain on track to be below 3x by year-end '27, which will allow us to move to a more balanced capital allocation strategy.

The path is straightforward: continued free cash flow generation, including this year's high-margin political media revenue and adjusted EBITDA contribution from KUBRA and the synergies we just walked through. Turning to guidance. We are reiterating the full year 2026 revenue outlook we provided when the KUBRA acquisition closed on June 1st, which incorporated 7 months of KUBRA contribution. We continue to expect revenue of $490 million to $500 million, representing approximately 60% reported growth and 10% to 12% organic revenue growth. Within that outlook, the mix shifted. Higher political media revenue is making up for lower than previously expected growth in core consumer payments.

As a result, we now expect normalized organic growth, including political media, of 5% to 6% compared with 7% to 9% we previously communicated. We are also reiterating adjusted EBITDA of $168.5 million to $176 million, representing a margin of approximately 35% based on stronger political media revenue and higher-than-expected synergy realization. The reduction in our free cash flow target from 30% to a range of 20% to 25% and from 35% to a range of 25% to 30% on an adjusted basis reflects a $14 million bank channel investment made during the quarter, and an expected $5 million payment in the fourth quarter.

Despite this reduction, however, we remain on track to reach our leverage target by year-end 2027 and see this as a high-return use of capital. Our 2026 outlook for KUBRA remains unchanged, and we continue to expect a contribution of $150 million to $154 million in revenue and approximately $27.5 million to $30 million in adjusted EBITDA. To wrap up, the third quarter demonstrated the value of more diversified REPAY. Business Payments and political media delivered meaningful upside. KUBRA grew ahead of our expectations, and we are capturing synergies faster than planned. Together, those strengths allowed us to reiterate our full year revenue and adjusted EBITDA outlook while we reposition core consumer payments for higher quality, more durable growth.

For the remainder of the year, our priorities are unchanged: execute the KUBRA integration while our segment leaders stay focused on their businesses, convert earnings into free cash flow and reduce net leverage below 3x. We look forward to sharing our longer-term financial framework at Investor Day on December 7th. With that, operator, please open the line for questions.

Operator: [Operator Instructions] Our first question is from Joe Vafi with Canaccord Genuity.

Pallav Saini: This is Pallav Saini on for Joe. Can you help us understand a little more about the factors that led to the slowdown in the core Consumer Payments segment? And I have a follow-up.

John Morris: Yes. Good evening. Thank you for joining us today. So as we indicated on the call, our expected pull-through for some of our 2026 bookings were not as expected. And some of the things are kind of the puts and takes that go into how we look at that. Overall, we actually -- some of the changes we're making into implementations, our actual, as we mentioned, implementations has actually improved. But as we look into how the size of the deals and how we size the deals inside of that, we saw that some of our larger enterprise were taking longer. So we were -- we changed the prioritization of how we look at some of that.

But then also inside of that, there's the payment mix as when you expect certain pieces of that revenue to come live. Ultimately, the short answer to that is booking to live or booking to revenue was not hitting our expectations there. So we wanted to call that out in the fourth quarter -- I mean, in the third quarter.

Robert Houser: Yes. And this is Rob. Thanks for the question. So a meaningful portion of our pipeline that was in place at the start of the quarter. Obviously, it didn't convert like we wanted it to in the time frame we wanted to. We've made some pretty substantial, John talked about on the call, just now a change with bringing Matt Morrow on the team, and we've made some changes in sales leadership. And they have some really strong horsepower where they come from. They understand the business really well.

And they did a really deep dive on the pipeline over the past few months and really looked at the quality of the pipeline, looked at certain criteria and looked at unrealistic close timing versus close timing and really rationalize that pipeline and gave us a really clean view going forward, a really clean, predictable, high-quality pipeline. And it's something that needed to be done, and we've put some really good, I guess, processes around that going forward.

And it didn't materialize as fast as we wanted it to, but this is a good business, and we feel that this -- the ramp is coming in a little slower than we expected and will pick up, especially with some of the folks that are working on this now. But it's going to take us a little longer than we thought. And -- but we're still really excited about the business and actually believe that it's going to return to growth over the next few quarters and really have that sustainable quality pipeline. And so a little bit of work we still have to do there, but there's no concern of any type of attrition or anything like that.

It's really just building out that pipeline and putting those guardrails on. So a little more work we need to keep doing, but we feel really good about the business.

Pallav Saini: That's helpful. And maybe some color on the bank reseller channel partnership and the opportunity there. Anything else that you would like to add?

John Morris: Yes, I can start. So on the bank channel, we're very excited about that. Obviously, this is something that we've just announced here and our ability to really drive that as a new channel as we really drive an additional go-to-market. Think of it almost like a vertical, but it's a channel. And we're already seeing great results inside of that, inside of our first quarter of launching that. So something we were aware of, something we were overall organically looking to drive even more growth as we look out into the future.

As you can imagine, inside of every -- each one of these 52 banks that we've already engaged with, there's an opportunity for every one of their commercial customers to use our TotalPay solution and our ability to drive and monetize that inside of that -- it's almost -- [indiscernible] was a little bit almost like our embedded partner channel, which is also driving growth exceptionally well in our B2B space. So we're really clicking on a lot of cylinders on the B2B side in a good way. But we are excited about that, what that's going to bring for us for the remainder of '26 as well as into '27 as we continue to expand out that bank partnership.

Robert Houser: And one point I want to call out is we have to go out and sign those banks. So this is a typical partnership agreement that we like to do. But we need to go out and actually bring those banks on. And as we mentioned on the call, we had 52 banks already consent, but we've got to go out and sell them and then move them on to our platform. And we're, as we said on the call, ahead of plan on that. So we're feeling really happy about where that's going and the growth opportunity for that space.

Operator: Our next question is from Pete Heckmann with D.A. Davidson.

Peter Heckmann: Just working through the numbers here, but the $3 million in the quarter in B2B, just to be clear, that was a revenue contribution from the new reseller partnership?

Robert Houser: Correct.

John Morris: Yes, it was.

Peter Heckmann: Great. Great. Okay. So when we look at that 40% year-over-year, that includes the $3 million?

Robert Houser: It does. It does. It includes the $3 million. And we're expecting for full year somewhere in the range of around $6 million to $7 million for the full year on that channel.

Peter Heckmann: Okay. Okay. And then sorry if I missed it, but did you quantify the range of expectations for political media spend that you expect for the full year when including October and November?

Robert Houser: Yes, we ranged political media to be around $16 million to $18 million for full year. So substantially higher than where we were during the presidential election. If you were to just take Q3 results on our political media and compare it to the presidential election Q3, 2 years ago, we roughly did 37% better than the presidential election. So we're starting to really see some expansion on that business, and it's operating and really from a full year guide, compared to how we did in the presidential election, it's roughly around the same percentage, around 38% improvement over the presidential election. So really strong results.

Peter Heckmann: Okay. Okay. That's impressive.

Operator: Our next question is from Timothy Chiodo with UBS.

Timothy Chiodo: Some of this was hit on a little bit on the first question, but I was hoping we could dig into a little bit more in terms of the drivers of the acceleration in the consumer business into next year. You mentioned actually proactively that churn is not one, meaning churn is kind of stablish. I'm assuming that means heading into next year as well. So when we get to some of the other factors, clearly, it's either a same-store sales type of issue or something around the cohorts, either the last year cohort or next year's cohort. Of course, there's always one-off items in terms of implementation delays, which it sounds like is one of the factors here.

But I was hoping you could expand upon just the drivers and the confidence in the reacceleration implied in the consumer business for next year.

John Morris: Yes. Great call out, Tim. So I would start backwards, the cohort really is a '26 intra-year cohort is not achieving our expectations. A few of those things can come into play, as you can imagine. There's -- we've really invested to really drive with AI, drive our implementation cycle, but we can't completely control the client side of that. But ultimately, as we looked at the actual -- the pull-through on that and some things associated with the mix of that, really the timing of even the client side go live on some of these initiatives.

Some of those were not matching our prior year cohorts on what we expected and some -- our 20 -- also our '25 cohort, some of the latter parts of those deals were not matching what we had historically seen on some of our other, what I call, cohorts or even vintages. So we feel confident, though, on some of the changes we made on how we're looking at it from a conservatism perspective that we like because we can see some of the other metrics that really overall are driving that.

Some of this as well is as we are also moving up upstream, which we talked about, we're winning in some of our enterprise level, but those go a little bit slower than some of the things we had historically expected. Regardless, we're putting the right pieces and measures in place, and we're trying to do the right projecting out for some of those cohorts that will take a little bit longer.

Robert Houser: Yes. If I just add a little to that, Tim. We're exiting the year at low single digits, as we said on the call. But to John's point, that pipeline and the quality of that pipeline since we've really done a strong rationalization with some of the new sales leadership that's come on board, we have high confidence in going into '27. And we'll talk a lot more about that in our December 7th Investor Day. But our confidence in the business is a great business. It's just -- as John mentioned, it's some of the -- it's taking a little bit longer on the ramp.

And John also mentioned around AI, we've done a lot of work around AI around implementation. So we're ready as it starts to flow in to deploy. It's just really getting that ramp going again and getting some of these bigger deals up and running.

Operator: [Operator Instructions] Our next question is from Mike Grondahl with Northland Securities.

Mike Grondahl: Can you talk about what you're seeing in the auto and personal loan pieces of your business?

John Morris: Yes. We still -- give me the mic. As we mentioned earlier, we went live with a larger OEM automaker in that particular part of the business. And specifically, that was kind of long -- that was one of those scenarios that took us longer than we expected on a few of those different portfolios. With a very large enterprise, sometimes it can be broken up into various different portfolios of servicing. In that particular case, we are live there. We do see things sometimes where the average ticket in new auto is -- the average ticket is a little bit higher if you're just looking for some metrics around some things there.

We -- that's a debit world for us. So that's not always a negative necessarily. And then what we see on the consumer finance side is we are seeing positive things there. We don't see from a stability of consumer piece of that. We don't see any -- it would be normal for us and what we have been seeing specifically in that world. There is a scenario where -- and we're not fully seeing this yet where used cars could be returning back just because new cars have become more expensive. We're not specifically seeing that one way or the other. It's just something we'll be on the lookout for.

Mike Grondahl: Got it. And then on the sales and marketing side, was there a lot of turnover there? It sounds like maybe there's some new salespeople, a new person running the group, but just overall sales and marketing, was there a lot of turnover kind of summer fall?

John Morris: Yes. So this is specifically on core consumer, obviously, not the KUBRA side of the house. And specifically, we have made several changes there on the team. So the answer to that is, yes, we have made several changes, and it did happen starting probably in the second quarter this year.

Mike Grondahl: Can you highlight how many salespeople kind of turned over? How many are new? Or what percent of the group maybe?

John Morris: Yes, kind of a handful, I would say. But as we look out on some of the investments we were making last year, we look at productivity and at some of the changes we made. So around -- probably around a handful of those.

Mike Grondahl: Okay. Okay. And then last question is just the $14 million investment in that bank channel, it just seems like a big number. What do you get for that?

Robert Houser: Yes. So it's actually -- I mean, it's $14 million, which was the investment, another $5 million we're going to do in the fourth quarter. But actually, we're -- as I mentioned, we're going to do just -- and it's not even a full half year from when we entered into the agreement to the end of the year, around $7 million. So you can imagine it's a recurring revenue. It's decent margin. The profitability on that is quite well. I mean we kind of laid that out. It's around 40% profit on that. So it's a recurring revenue channel.

So for roughly $19 million, $14 million in the third quarter and another $5 million in the fourth quarter, we're going to have that recurring revenue that if you look at just -- let me just frame this up. If you look at how we did what our political media estimates are, for this year, you're roughly returning around that level of revenue on a recurring basis going forward. So it's actually -- we're pretty excited about it. It's a great use of capital. And just like our existing core business in B2B, where we've been converting and monetizing a lot of the ACH volume we brought in, the opportunity to do that with this business is great.

So we're pretty excited about the returns that it's going to bring.

Mike Grondahl: Okay.

John Morris: Sure. Let me give some more color there, Mike. So you -- obviously, you already see the $3 million in revenue from the $14 million investment. You'll see another $3 million to $4 million, as Rob indicated, between now and in the fourth quarter, right? In addition to that, our ability to land and expand with those 52 banks, various different large enterprise customers.

If we just pick the verticals we operate in, if you just think about health care, hospitality, the areas of automotive that 52 various different banks and some very, very large, our ability -- if you think about the leads part of that, but you also think about our ability to convert all of those onto our new TotalPay solution. We've seen that as we converted some in-house things over to our TotalPay solution, our ability to monetize and increase the ability to take that more digital to take that, as you know, are more on the virtual card, more on ACH Advance. And then that -- our ability to drive, there's billions in volume there.

That's just another growth lever for that B2B side of the house that's just now -- as you could see, it's -- our embedded partner channel is really accelerating. Of course, the political media piece was 40% -- almost 40% growth over the prior political cycle. We -- the investments we made in the last couple of years, they are really starting to pay off.

Operator: I would like to turn the floor back over to John Morris for closing comments.

John Morris: Thank you, everyone. To sum up, we are executing on our strategy. As we -- as you know, we're integrating the overall KUBRA platform and ahead of our schedule on our synergies. We're growing the business payments area as we just talked about. We're repositioning the overall consumer payments, which we talked about as well to drive even more growth there with the goal of becoming the leading bill presentment and payment company in North America.

I'm confident in our ability to deliver consistent and profitable growth, and we look forward to share more about this as we introduce you to our overall individual team leaders in person at our first Investor Day on Monday, December 7th, in New York City. Thank you for your time today.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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