Third Quarter Transactions Increased 30.6%
Year-over-Year Third Quarter Revenue Increased 26.0% Year-over-Year
Third Quarter Gross Profit Increased 21.5% Year-over-Year
Contribution Profit* Increased 25.8% Year-over-Year
Paymentus Holdings, Inc. (“Paymentus”) (NYSE: PAY), a leading
provider of cloud-based bill payment technology solutions, today
announced financial results for its third quarter ended September
30, 2022.
"Our third quarter numbers were strong across the board,” said
Dushyant Sharma, Founder and CEO. “We're most proud of our sales
results which show continued momentum."
Third Quarter 2022 Business and
Financial Highlights*
- Processed 92.2 million transactions in the third quarter of
2022, an increase of 30.6% from the third quarter of 2021.
- Revenue was $128.2 million, an increase of 26.0% from the third
quarter of 2021.
- Gross profit was $37.9 million compared to $31.2 million for
the third quarter of 2021. Adjusted gross profit was $41.0 million
compared to $32.6 million for the third quarter of 2021.
- Contribution profit was $51.1 million, compared to $40.7
million for the third quarter of 2021, representing an increase of
25.8%.
- Net loss was $737 thousand and GAAP loss per share was $0.01.
Non-GAAP net income was $1.8 million and non-GAAP earnings per
share was $0.01.
- Adjusted EBITDA was $8.0 million, representing a 15.7% adjusted
EBITDA margin compared to $5.5 million, representing a 13.6%
adjusted EBITDA margin, for the third quarter of 2021.
"We placed a significant focus on expanding adjusted EBITDA
margin this quarter and are pleased with our progress,” said Paul
Seamon, Interim CFO. “We will continue to make investments that
drive growth while working to grow margin."
* Descriptions of the non-GAAP financial measures contribution
profit, adjusted gross profit, adjusted EBITDA, adjusted EBITDA
margin, non-GAAP net income (loss) and non-GAAP earnings per share
are provided below under “Use and Definitions of Non-GAAP Financial
Measures,” and reconciliations are provided in the tables at the
end of this release.
Updated 2022 Financial
Outlook
Certain statements in this release, including without
limitation, those in this section, are forward-looking statements.
For additional information regarding the use and limitations of
such statements, refer to “Forward-Looking Statements” below and
the “Risk Factors” section of Paymentus’ most recent Form 10-K for
the fiscal year ended December 31, 2021.
Paymentus continues to expect revenue for the full year 2022 to
be between $485 million and $492 million or approximately 25% to
27% growth year-over-year. Contribution profit is anticipated to be
between $200 million and $204 million or approximately 26% to 29%
growth year-over-year(1). Adjusted EBITDA is expected to be between
$25 million and $28.5 million, resulting in an expected adjusted
EBITDA margin of approximately 13% to 14%.
(1) Gross profit is estimated to be approximately 72% of
contribution profit and other cost of revenue is estimated to be
approximately 28% of contribution profit. The decrease in GAAP
gross profit for 2022 is primarily driven by amortization of
acquired intangibles, as such this will not impact adjusted gross
profit.
Paymentus does not reconcile its forward-looking guidance for
non-GAAP measures because certain financial information, the
probable significance of which cannot be determined, is not
available and cannot be reasonably estimated. Refer to “Use of
Forward-Looking Non-GAAP Measures” below for additional
explanation.
The statements in this section are forward-looking statements.
For additional information regarding the use and limitations of
such statements, refer to “Forward-Looking Statements” below.
Conference Call Information
In conjunction with this announcement, Paymentus will host a
conference call for investors at 2:00 p.m. PT (5:00 p.m. ET) today
to discuss third quarter 2022 results and our outlook for 2022. The
live webcast and replay will be available at the Investor Relations
section of Paymentus’ website.
About Paymentus
Paymentus is a leading provider of cloud-based bill payment
technology and solutions for more than 1,700 billers and financial
institutions across North America. Our omni-channel platform
provides consumers with easy-to-use, flexible and secure electronic
bill payment experiences through their preferred payment channel
and type. Paymentus’ proprietary Instant Payment NetworkTM, or IPN,
extends our reach by connecting our IPN partners’ platforms and
tens of thousands of billers to our integrated billing, payment,
and reconciliation capabilities. For more information, please visit
www.paymentus.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 and the Private
Securities Litigation Reform Act of 1995. All statements other than
statements of historical or current fact included in this press
release are forward-looking statements, including but not limited
to statements regarding our sales momentum, ability to expand our
adjusted EBITDA margins, investments that drive growth, our future
financial performance and our updated 2022 financial outlook.
Forward-looking statements include statements containing words such
as “expect,” “anticipate,” “believe,” “project,” “will” and similar
expressions intended to identify forward-looking statements.
These forward-looking statements are based on our current
expectations. Forward-looking statements involve risks and
uncertainties. Our actual results and the timing of events could
differ materially from those anticipated in such forward-looking
statements as a result of these risks and uncertainties, which
include, without limitation, risks related to our ability to
effectively manage our growth and expand our operations, including
into new channels and industry verticals across different markets;
our ability to expand and retain our biller, financial institution,
partner and consumer base; the continued impact of the COVID-19
pandemic on our operating results, liquidity and financial
condition and on our employees, billers, financial institutions,
partners, consumers and other key stakeholders; our ability to
remain competitive; our ability to develop new product features and
enhance our platform and brand; our future acquisitions and
strategic investments; our ability to hire and retain experienced
and talented employees; and other risks and uncertainties included
under the caption “Risk Factors” and elsewhere in our filings with
the Securities and Exchange Commission, or SEC, including, without
limitation, our Annual Report on Form 10-K for the year ended
December 31, 2021, filed with the SEC on March 3, 2022 and our
Quarterly Report on Form 10-Q for the quarter ended September 30,
2022, which we expect to file with the SEC shortly after the date
of this release. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
of this press release.
All forward-looking statements are qualified in their entirety
by this cautionary statement, and we undertake no obligation to
revise or update any forward-looking statements to reflect events
or circumstances after the date hereof.
Use of Forward-Looking Non-GAAP Measures
Paymentus does not meaningfully reconcile guidance for adjusted
EBITDA and adjusted EBITDA margin, because Paymentus cannot provide
guidance for the more significant reconciling items between net
income and adjusted EBITDA without unreasonable effort. This is due
to the fact that future period non-GAAP guidance includes
adjustments for items not indicative of our core operations, which
may include, without limitation, items included in the supplemental
financial information for reconciliation of reported GAAP results
to non-GAAP results. Such items include acquisition related
amortization expense for acquired intangibles, foreign exchange
gains and losses, adjustments to its income tax provision and
certain other items Paymentus believes to be non-indicative of its
ongoing operations. Such adjustments may be affected by changes in
ongoing assumptions, judgements, as well as nonrecurring, unusual
or unanticipated charges, expenses or gains/losses or other items
that may not directly correlate to the underlying performance of
our business operations. The exact amount of these adjustments is
not currently determinable but may be significant.
Use and Definitions of Non-GAAP Financial Measures
In addition to disclosing financial measures in accordance with
accounting principles generally accepted in the United States, or
GAAP, this press release and the accompanying tables contain
certain non-GAAP financial measures, including contribution profit,
adjusted gross profit, adjusted EBITDA, adjusted EBITDA margin,
free cash flow, non-GAAP net income and non-GAAP earnings per
share, or EPS. We use non-GAAP measures to supplement financial
information presented on a GAAP basis. We believe that excluding
certain items from our GAAP results allows management and our board
of directors to more fully understand our consolidated financial
performance from period to period and helps management project our
future consolidated financial performance as forecasts are
developed at a level of detail different from that used to prepare
GAAP-based financial measures.
Contribution profit is defined as gross profit plus other
cost of revenue. Other cost of revenue equals cost of revenue less
interchange and assessment fees paid by us to our payment
processors.
Adjusted gross profit is defined as gross profit adjusted
for non-cash items, primarily stock-based compensation and
amortization.
Adjusted EBITDA is defined as net income before other
income (expense) (which consists of interest income (expense), net
and foreign exchange gain (loss)), depreciation and amortization
and income taxes, adjusted to exclude the effects of stock-based
compensation expense and certain nonrecurring expenses that
management believes are not indicative of ongoing operations,
consisting primarily of professional fees and other indirect
charges associated with our initial public offering.
Adjusted EBITDA margin is defined as adjusted EBITDA as a
percentage of contribution profit.
Free cash flow is defined as net cash provided by (used
in) operating activities less capital expenditures and software and
capitalized internal-use software development costs.
Non-GAAP net (loss) income and non-GAAP EPS
are defined as net (loss) income excluding certain nonrecurring
items such as discrete tax items, one-time expenses or other
non-cash items, including amortization of acquisition-related
intangibles.
We believe these non-GAAP measures provide our investors with
useful information to help them evaluate our operating results by
facilitating an enhanced understanding of our operating performance
and enabling them to make more meaningful period-to-period
comparisons. In particular, we exclude interchange and assessment
fees in the presentation of contribution profit because we believe
inclusion is less directly reflective of our operating performance
as we do not control the payment channel used by consumers, which
is the primary determinant of the amount of interchange and
assessment fees. We use contribution profit to measure the amount
available to fund our operations after interchange and assessment
fees, which are directly linked to the number of transactions we
process and thus our revenue and gross profit.
We use these non-GAAP measures in conjunction with GAAP measures
as part of our overall assessment of our performance and liquidity,
including the preparation of our annual operating budget and
quarterly forecasts, to evaluate the effectiveness of our business
strategies, and to communicate with our board of directors
concerning our financial performance and liquidity. There are
limitations to the use of the non-GAAP measures presented in this
press release. Our non-GAAP measures may not be comparable to
similarly titled measures of other companies; other companies,
including companies in our industry, may calculate non-GAAP
measures differently than we do, limiting the usefulness of those
measures for comparative purposes. These non-GAAP measures should
not be considered in isolation from or as a substitute for
financial measures prepared in accordance with GAAP.
We encourage investors and others to review our financial
information in its entirety, not to rely on any single financial
measure, and to view our non-GAAP measures in conjunction with GAAP
financial measures. For a reconciliation of these non-GAAP
financial measures to GAAP measures, please see the tables for the
reconciliation of GAAP to non-GAAP results included at the end of
this release.
PAYMENTUS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited)
(In thousands, except share and
per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Revenue
$
128,152
$
101,676
$
364,825
$
287,393
Cost of revenue
90,295
70,512
256,286
199,754
Gross profit
37,857
31,164
108,539
87,639
Operating expenses
Research and development
10,350
8,818
30,925
24,469
Sales and marketing
19,048
11,314
53,089
29,041
General and administrative
9,376
9,904
29,038
24,067
Total operating expenses
38,774
30,036
113,052
77,577
(Loss) income from operations
(917
)
1,128
(4,513
)
10,062
Other income (loss)
Interest income (expense), net
504
11
594
4
Foreign exchange gain (loss)
(28
)
(16
)
52
(8
)
(Loss) income before income taxes
(441
)
1,123
(3,867
)
10,058
(Provision for) benefit from income
taxes
(296
)
(701
)
2,397
(5,423
)
Net (loss) income
$
(737
)
$
422
$
(1,470
)
$
4,635
Undeclared dividends on Series A preferred
stock
—
—
—
(2,258
)
Net (loss) income attributable to common
stock
$
(737
)
$
422
$
(1,470
)
$
2,377
Net (loss) income per share attributable
to common stock
Basic
$
(0.01
)
$
—
$
(0.01
)
$
0.02
Diluted
$
(0.01
)
$
—
$
(0.01
)
$
0.02
Weighted-average number of shares used to
compute net (loss) income per share attributable to common
stock
Basic
122,740,982
118,206,073
121,765,509
110,272,583
Diluted
122,740,982
124,427,777
121,765,509
116,419,674
PAYMENTUS HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited)
(In thousands, except share and
per share data)
September 30,
December 31,
2022
2021
Assets
Current assets
Cash and cash equivalents
$
148,314
$
168,386
Restricted funds held for financial
institutions
77,601
33,443
Accounts and other receivables, net of
allowance of $322 and $102
62,758
43,935
Income tax receivable
2,650
2,488
Prepaid expenses and other current
assets
12,318
8,184
Total current assets
303,641
256,436
Property and equipment, net of accumulated
depreciation and amortization of $5,448 and $4,791
1,996
2,044
Capitalized internal-use software
development costs, net
42,711
30,888
Intangible assets, net
36,113
42,088
Goodwill
129,344
129,413
Operating lease right-of-use assets
9,582
7,703
Deferred tax asset
165
163
Other long-term assets
7,677
4,207
Total assets
$
531,229
$
472,942
Liabilities and Stockholders’
Equity
Current liabilities
Accounts payable
$
27,394
$
24,748
Accrued liabilities
16,665
12,491
Financial institution funds in-transit
77,601
33,443
Operating lease liabilities
1,389
1,456
Contract liabilities
1,328
2,173
Income tax payable
720
122
Total current liabilities
125,097
74,433
Deferred tax liability
—
3,318
Operating leases, net of current
portion
8,703
6,463
Contract liabilities, net of current
portion
2,637
1,713
Finance leases and other finance
obligations, net of current portion
750
883
Total liabilities
137,187
86,810
Commitments and contingencies (Note 9)
Stockholders’ equity
Preferred stock, $0.0001 par value per
share, 5,000,000 authorized at September 30, 2022 and December 31,
2021, respectively, none issued and outstanding at September 30,
2022 and December 31, 2021, respectively
—
—
Class A common stock, $0.0001 par value
per share, 883,950,000 shares authorized as of September 30, 2022
and December 31, 2021, respectively; 19,653,565 and 17,251,079
shares issued and outstanding as of September 30, 2022 and December
31, 2021, respectively
2
1
Class B common stock, $0.0001 par value
per share, 111,050,000 shares authorized as of September 30, 2022
and December 31, 2021, respectively; 103,336,337 and 103,388,082
shares issued and outstanding as of September 30, 2022 and December
31, 2021, respectively
10
11
Additional paid-in capital
365,632
356,017
Accumulated other comprehensive income
(67
)
168
Retained earnings
28,465
29,935
Total stockholders’ equity
394,042
386,132
Total liabilities and stockholders'
equity
$
531,229
$
472,942
PAYMENTUS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (Unaudited)
(In thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Cash flows from operating
activities
Net (loss) income
$
(737
)
$
422
$
(1,470
)
$
4,635
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization
6,158
3,647
17,518
8,587
Deferred income taxes
(9
)
278
(3,331
)
2,691
Stock-based compensation
2,002
754
4,622
1,885
Non-cash lease expense
583
483
1,703
2,131
Amortization of contract asset
529
246
1,347
423
Provision for credit losses
32
—
219
—
Change in operating assets and
liabilities
Accounts and other receivables
(9,938
)
(2,870
)
(19,143
)
(7,814
)
Prepaid expenses and other current and
long-term assets
56
1,072
(854
)
167
Accounts payable
(230
)
4,301
2,975
7,842
Accrued liabilities
(225
)
(394
)
2,390
149
Operating lease liabilities
(456
)
(498
)
(1,398
)
(2,071
)
Contract liabilities
5
82
80
383
Income taxes receivable, net of
payable
281
(923
)
485
349
Net cash (used in) provided by operating
activities
(1,949
)
6,600
5,143
19,357
Cash flows from investing
activities
Business combinations, net of cash
acquired
—
(57,120
)
—
(57,120
)
Other intangible assets acquired
(125
)
—
(248
)
—
Purchases of property and equipment
(368
)
(261
)
(1,163
)
(825
)
Capitalized internal-use software
development costs
(7,793
)
(4,737
)
(22,257
)
(13,473
)
Net cash used in investing activities
(8,286
)
(62,118
)
(23,668
)
(71,418
)
Cash flows from financing
activities
Proceeds from initial public offering, net
of underwriter's discounts and commissions
—
—
—
224,595
Proceeds from private placement
—
—
—
50,000
Redemption of Series A preferred stock
—
—
—
(23,013
)
Payment of dividends on Series A preferred
stock
—
—
—
(34,412
)
Proceeds from repayment of related party
loan
—
—
—
813
Proceeds from exercise of stock
options
1,167
—
1,469
—
Financial institution funds in-transit
18,276
6,612
44,158
6,612
Payments of deferred offering costs
—
(1,105
)
—
(1,961
)
Payments on other financing
obligations
(655
)
(715
)
(2,486
)
(1,482
)
Payments on finance leases
(66
)
(68
)
(201
)
(204
)
Net cash provided by financing
activities
18,722
4,724
42,940
220,948
Foreign currency effect on cash, cash
equivalents and restricted cash
(232
)
(19
)
(329
)
24
Net increase (decrease) in cash, cash
equivalents and restricted cash
8,255
(50,813
)
24,086
168,911
Cash, cash equivalents and restricted
cash
Beginning of period
217,660
266,390
201,829
46,666
End of period
$
225,915
$
215,577
$
225,915
$
215,577
PAYMENTUS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (continued) (Unaudited)
(In thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
The below table reconciles cash, cash
equivalents and restricted cash in the condensed consolidated
balance sheets to the total of the same amounts shown in the
condensed consolidated statements of cash flows:
Cash and cash equivalents
$
148,314
$
177,506
$
148,314
$
177,506
Restricted funds held for financial
institutions
77,601
38,071
77,601
38,071
Total cash, cash equivalents and
restricted cash as shown in the condensed consolidated statements
of cash flows
$
225,915
$
215,577
$
225,915
$
215,577
The following tables set forth our non-GAAP financial measures
with reconciliations to the most directly comparable GAAP financial
measures:
Contribution Profit
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
(in thousands)
Gross profit
$
37,857
$
31,164
$
108,539
$
87,639
Plus: other cost of revenue
13,277
9,488
38,704
25,563
Contribution profit
$
51,134
$
40,652
$
147,243
$
113,202
Adjusted Gross Profit
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
(in thousands)
Gross profit
$
37,857
$
31,164
$
108,539
$
87,639
Stock-based compensation
—
—
—
—
Amortization
3,186
1,398
8,575
3,610
Adjusted gross profit
$
41,043
$
32,562
$
117,114
$
91,249
Adjusted EBITDA and Adjusted EBITDA Margin
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
(in thousands)
Net (loss) income
$
(737
)
$
422
$
(1,470
)
$
4,635
Excluding
Interest (income) expense, net
(504
)
11
(594
)
(4
)
Provision for (benefit from) income
taxes
296
701
(2,397
)
5,423
Depreciation and amortization
6,158
3,647
17,518
8,587
Foreign exchange (gain) loss
28
16
(52
)
8
Stock-based compensation
2,002
754
4,622
1,885
Other nonrecurring expenses(2)
769
—
769
2,711
Adjusted EBITDA
$
8,012
$
5,529
$
18,396
$
23,245
Adjusted EBITDA margin
15.7
%
13.6
%
12.5
%
20.5
%
(2)
Other nonrecurring expenses consist of indirect costs incurred
associated with our IPO in the nine months ended September 30, 2021
and an estimated liability booked in the three months ended
September 30, 2022 related to the potential costs associated with
the termination of a commercial contract.
Free Cash Flow
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
(in thousands)
Net cash provided by operating
activities
$
(2,730
)
$
6,600
$
4,362
$
19,357
Purchases of property and equipment and
software
(368
)
(261
)
(1,163
)
(825
)
Other intangible assets acquired
(125
)
—
(248
)
—
Capitalized internal-use software
development costs
(7,793
)
(4,737
)
(22,257
)
(13,473
)
Free cash flow
$
(11,016
)
$
1,602
$
(19,306
)
$
5,059
Net cash used in investing activities
$
(8,286
)
$
(62,118
)
$
(23,668
)
$
(71,418
)
Net cash provided by financing
activities
$
18,722
$
4,724
$
42,940
$
220,948
Non-GAAP Net (Loss) Income
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
(in thousands)
Net (loss) income
$
(737
)
$
422
$
(1,470
)
$
4,635
Excluding amortization of
acquisition-related intangibles
2,007
933
4,014
933
Excluding discrete one-time items, net of
tax(2)
565
—
565
—
Excluding discrete one-time tax items
—
—
—
2,062
Non-GAAP net (loss) income
$
1,835
$
1,355
$
3,109
$
7,630
Non-GAAP EPS
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
(in thousands, except share
and per share data)
Net (loss) income attributable to common
shareholders
$
(737
)
$
422
$
(1,470
)
$
4,635
Excluding amortization of
acquisition-related intangibles
2,007
933
4,014
933
Excluding undeclared dividends on Series A
preferred stock
—
—
—
2,258
Excluding discrete one-time items, net of
tax(2)
565
—
565
—
Excluding discrete one-time tax items
—
—
—
2,062
Numerator for Non-GAAP EPS – basic
$
1,835
$
1,355
$
3,109
$
7,630
Weighted-average shares of common stock –
basic
122,740,982
118,206,073
121,765,509
110,272,583
Non-GAAP EPS – basic
$
0.01
$
0.01
$
0.03
$
0.07
(2)
Discrete one-time items, net of tax
consist of the tax impacted estimated liability booked in the three
months ended September 30, 2022 related to the potential costs
associated with the termination of a commercial contract.
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Investor Relations Paul Seamon pseamon@paymentus.com
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