Fitch revises RealPage outlook to stable

Fitch Ratings said it changed its outlook for RealPage Intermediate Holdings, Inc. and its wholly owned subsidiary, RealPage, Inc. to stable from negative and affirmed the long-term issuer default rating at B. Fitch has also affirmed RealPage Inc.'s first-lien secured revolver and term loan at B+/RR3 and the second-lien term loan at CCC+/RR6.

Previously, Fitch said it would revise the outlook to stable if RealPage's leverage, as defined by the agency, was around 7x and Fitch expects the company to be near that at the end of 2023 while continuing to generate positive FCF, despite considerable headwinds from a significant interest expense burden. Fitch remains concerned about the ongoing antitrust matters for the company which may take an extended period to be resolved.

Revenue growth and EBITDA margin expansion helped bring leverage down to an estimated 7.3x at year-end 2023 from 8.5x at the end of 2022, the agency said.

“Although leverage is currently high, Fitch expects continued EBITDA growth to bring leverage down to around 6x by the end of 2025 barring any large debt-funded acquisitions. The sticky nature of the company's software solutions supports future cash flows,” the agency said in a press release.

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