PAY Paymentus Holdings Inc

Revenue increased 24.6% year-over-year Adjusted EBITDA rose 135.5%, reflecting a 28.6% adjusted EBITDA margin

Paymentus Holdings, Inc. (“Paymentus”) (NYSE: PAY), a leading provider of cloud-based bill payment technology and solutions, today announced its unaudited financial results for the quarter ended March 31, 2024.

“Paymentus began this year with another outstanding quarter, driven mainly by higher transaction activity from both new and existing billers. Revenue, contribution profit and adjusted EBITDA all grew year-over-year by 24.6%, 29.6% and 135.5%, respectively. We continue to see strong momentum in our bookings and backlog, supporting our positive outlook for the rest of 2024,” said Dushyant Sharma, Founder and CEO.

First Quarter 2024 Financial and Business Highlights

• Revenue was $184.9 million, an increase of 24.6% year-over-year, driven largely by increased transactions.
• Gross profit was $52.7 million, an increase of 31.6% year-over-year. Adjusted gross profit(1) was $57.6 million, up 31.9% year-over-year.
• Contribution profit(1) was $69.4 million, a year-over-year increase of 29.6%.
• Net income was $7.2 million and GAAP earnings per share was $0.06. Non-GAAP net income(1) was $12.2 million and non-GAAP earnings per share(1) was $0.10. Prior year non-GAAP net income and non-GAAP earnings per share have been recast to align with the updated methodology described in the section "Use and Definitions of Non-GAAP Financial Measures" below.
• Adjusted EBITDA(1) was $19.8 million for the first quarter of 2024, representing a 28.6% adjusted EBITDA margin(1), an increase of 135.5% year-over-year.
• The Company processed 135.3 million transactions in the first quarter of 2024, an increase of 24.7% from the first quarter of 2023.

(1) Descriptions of the non-GAAP financial measures adjusted gross profit, contribution profit, non-GAAP net income, non-GAAP earnings per share, adjusted EBITDA, and adjusted EBITDA margin 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.

Financial Guidance

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 and the “Risk Factors” section of Paymentus’ most recent Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission, or SEC on March 5, 2024.

 

Second Quarter 2024

Fiscal-Year 2024

Revenue

$178 million to $183 million

$737 million to $755 million

Contribution Profit

$68 million to $70 million

$281 million to $293 million

Adjusted EBITDA

$17 million to $19 million

$71 million to $79 million

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 due to potential variability, complexity and uncertainty as to the items that would be excluded from the GAAP measure in the relevant future period. Refer to “Use of Forward-Looking Non-GAAP Measures” below for additional explanation.

Conference Call Information

In conjunction with this announcement, Paymentus will host a conference call for investors at 5:00 p.m. ET (2:00 p.m. PT) today to discuss first quarter 2024 results and its outlook for the remainder of 2024. The live webcast and replay will be available at the Investor Relations section of Paymentus’ website at ir.paymentus.com or click here. To participate via telephone, dial 1-833-470-1428 (U.S. Toll-Free) or 1-404-975-4839 (International), access code 015923. A replay will be available after 5:00 p.m. PT on the same web site.

About Paymentus

Paymentus is a leading provider of cloud-based bill payment technology and solutions for more than 2,200 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 Network™, 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 demand, bookings and backlog, pipeline, outlook for 2024, our future financial performance and our updated second quarter and full-year 2024 financial guidance. 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; our ability to timely implement new bookings and recognize anticipated revenue therefrom, our ability to manage economic challenges, including inflation; the impact of future widespread health issues 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; the impact of any cybersecurity incidents; and other risks and uncertainties included under the caption “Risk Factors” and elsewhere in our filings with the SEC, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 5, 2024, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, 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

We do not meaningfully reconcile guidance for adjusted EBITDA and adjusted EBITDA margin, because we 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 our income tax provision and certain other items we believe to be non-indicative of our ongoing operations. Such adjustments may be affected by changes in ongoing assumptions and judgments, 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. In addition, we do not meaningfully reconcile guidance for contribution profit, because the determination of contribution is subject to variables outside our control, such as an increase in the average payment amount, changes in the payment mix, or the payment channel used by consumers that can influence contribution profit, and cannot be determined without unreasonable effort, if at all.

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 adjusted gross profit, contribution profit, non-GAAP net income (including those amounts as a percentage of revenue), non-GAAP earnings per share, adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating expense and free cash flow. 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.

Adjusted gross profit is defined as gross profit adjusted for certain non-cash items, primarily stock-based compensation and amortization of acquisition-related intangible assets and capitalized software development costs.

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. Interchange and assessment fees paid by us to our payment processors are excluded from 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.

Adjusted EBITDA is defined as net income before other income (expense) (which consists of interest income (expense), net, other non-recurring income, and foreign exchange gain (loss)), depreciation and amortization of acquisition related intangible assets and capitalized software development costs, 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.

Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of contribution profit.

Non-GAAP operating expense is defined as total operating expense excluding amortization of acquisition-related intangibles, stock-based compensation and other nonrecurring expenses. Management believes that the adjustment of acquisition-related intangibles amortization supplements the GAAP information with a measure that can be used to assess the comparability of operating performance. Although we exclude amortization from acquisition-related intangible assets from our non-GAAP expenses, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets.

Non-GAAP net income and non-GAAP EPS are defined as net income and net income per share, respectively, excluding certain nonrecurring items such as discrete tax items, one-time expenses or other non-cash items, including amortization of acquisition-related intangibles. Beginning with the quarter ended June 30, 2023, we have excluded stock-based compensation from the calculation of our non-GAAP net income and non-GAAP EPS to be consistent with our methodology for non-GAAP operating expenses, which we believe enhances the understanding of our operating performance and enables more meaningful period-to-period comparisons. Our non-GAAP net income and non-GAAP EPS for the three months ended March 31, 2023 were recast to conform to the updated methodology and are reflected herein for comparison purposes.

We believe non-GAAP net income and non-GAAP EPS enhance the understanding of our operating performance and enable more meaningful period-to-period comparisons.

Free cash flow is defined as net cash provided by (used in) operating activities less capital expenditures and capitalized internal-use software development costs.

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.

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 AND COMPREHENSIVE INCOME (Unaudited)

(In thousands, except share and per share data)

 

Three Months Ended March 31,

 

2024

2023

Revenue

$

184,875

 

$

148,328

 

Cost of revenue

 

132,150

 

 

108,250

 

Gross profit

 

52,725

 

 

40,078

 

Operating expenses

 

 

Research and development

 

12,051

 

 

11,653

 

Sales and marketing

 

23,239

 

 

20,264

 

General and administrative

 

9,092

 

 

9,145

 

Total operating expenses

 

44,382

 

 

41,062

 

Income (loss) from operations

 

8,343

 

 

(984

)

Other income (expense)

 

 

Interest income, net

 

2,186

 

 

1,440

 

Other non-recurring income

 

213

 

 

--

 

Foreign exchange gain (loss)

 

18

 

 

(8

)

Income before income taxes

 

10,760

 

 

448

 

(Provision for) benefit from income taxes

 

(3,534

)

 

256

 

Net income

$

7,226

 

$

704

 

Net income per share

 

 

Basic

$

0.06

 

$

0.01

 

Diluted

$

0.06

 

$

0.01

 

Weighted-average number of shares used to compute net income per share

 

 

Basic

 

123,945,778

 

 

123,289,584

 

Diluted

 

126,917,654

 

 

123,792,741

 

PAYMENTUS HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands, except share and per share data)

 

 

 

 

 

March 31,

 

December 31,

 

2024

 

2023

Assets

 

 

Current assets

 

 

Cash and cash equivalents

$

180,138

$

179,361

Restricted cash and cash equivalents

 

4,014

 

3,834

Accounts and other receivables, net of allowance for expected credit losses of $399 and $435, respectively

 

84,178

 

76,389

Income tax receivable

 

20

 

259

Prepaid expenses and other current assets

 

11,293

 

10,505

Total current assets

 

279,643

 

270,348

Property and equipment, net

 

1,575

 

1,558

Capitalized internal-use software development costs, net

 

61,767

 

58,787

Intangible assets, net

 

25,137

 

27,158

Goodwill

 

131,850

 

131,860

Operating lease right-of-use assets

 

9,477

 

10,027

Deferred tax asset

 

91

 

94

Other long-term assets

 

4,435

 

5,031

Total assets

$

513,975

$

504,863

Liabilities and Stockholders’ Equity

 

 

Current liabilities

 

 

Accounts payable

$

41,097

$

35,182

Accrued liabilities

 

12,334

 

21,301

Current portion of operating lease liabilities

 

1,966

 

1,853

Contract liabilities

 

4,097

 

4,089

Income tax payable

 

3,132

 

363

Total current liabilities

 

62,626

 

62,788

Deferred tax liability

 

1,159

 

1,067

Operating lease liabilities, less current portion

 

8,054

 

8,661

Contract liabilities, less current portion

 

2,752

 

2,731

Total liabilities

 

74,591

 

75,247

Stockholders’ equity

 

 

Preferred stock, $0.0001 par value per share, 5,000,000 shares authorized as of March 31, 2024 and December 31, 2023, respectively; none issued and outstanding as of March 31, 2024 and December 31, 2023

 

—

 

—

Class A common stock, $0.0001 par value per share, 883,950,000 shares authorized as of March 31, 2024 and December 31, 2023, respectively; 21,744,165 and 20,758,603 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

 

2

 

2

Class B common stock, $0.0001 par value per share, 111,050,000 shares authorized as of March 31, 2024 and December 31, 2023, respectively; 102,381,811 and 103,062,508 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

 

10

 

10

Additional paid-in capital

 

380,357

 

377,773

Accumulated other comprehensive income

 

45

 

87

Retained earnings

 

58,970

 

51,744

Total stockholders’ equity

 

439,384

 

429,616

Total liabilities and stockholders' equity

$

513,975

$

504,863

PAYMENTUS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)

 

 

 

 

 

Three Months Ended March 31,

 

 

2024

 

2023

 

Cash flows from operating activities

 

 

 

Net income

$

7,226

 

$

704

 

Adjustments to reconcile net income to net cash provided by operating activities

 

 

 

Depreciation and amortization

 

8,537

 

 

7,239

 

Deferred income taxes

 

92

 

 

92

 

Stock-based compensation

 

2,933

 

 

2,159

 

Non-cash lease expense

 

506

 

 

462

 

Amortization of contract asset

 

451

 

 

696

 

Provision for (benefit from) expected credit losses

 

48

 

 

(239

)

Other non-recurring income

 

(213

)

 

—

 

Change in operating assets and liabilities

 

 

 

Accounts and other receivables

 

(7,850

)

 

(8,333

)

Prepaid expenses and other current and long-term assets

 

(993

)

 

861

 

Accounts payable

 

5,793

 

 

3,297

 

Accrued liabilities

 

(8,166

)

 

(2,749

)

Operating lease liabilities

 

(446

)

 

(469

)

Contract liabilities

 

28

 

 

2,061

 

Income taxes receivable, net of payable

 

3,008

 

 

(1,018

)

Net cash provided by operating activities

 

10,954

 

 

4,763

 

Cash flows from investing activities

 

 

 

Purchases of property and equipment

 

(116

)

 

(67

)

Purchase of interest-bearing deposits

 

(723

)

 

—

 

Proceeds from matured interest-bearing deposits

 

602

 

 

—

 

Capitalized internal-use software development costs

 

(9,276

)

 

(8,219

)

Net cash used in investing activities

 

(9,513

)

 

(8,286

)

Cash flows from financing activities

 

 

 

Proceeds from exercise of stock-based awards

 

100

 

 

5

 

Settlement of holdback liability related to prior acquisitions

 

(506

)

—

 

Payments on other financing obligations

 

—

 

 

(1,025

)

Payments on finance leases

 

—

 

 

(102

)

Net cash used in financing activities

 

(406

)

 

(1,122

)

Effect of exchange rate changes on Cash and cash equivalents and Restricted cash

 

(78

)

 

(17

)

Net increase (decrease) in cash, cash equivalents and Restricted cash

 

957

 

 

(4,662

)

Cash and cash equivalents and Restricted cash at the beginning of period

 

183,195

 

 

149,685

 

Cash and cash equivalents and Restricted cash at the end of period

$

184,152

 

$

145,023

 

Reconciliation of Cash and cash equivalents and Restricted Cash:

 

 

 

Cash and cash equivalents at the beginning of period

 

179,361

 

 

147,334

 

Restricted cash at the beginning of period

 

3,834

 

 

2,351

 

Cash and cash equivalents and Restricted cash at the beginning of period

$

183,195

 

$

149,685

 

Cash and cash equivalents at the end of period

 

180,138

 

 

143,637

 

Restricted cash at the end of period

 

4,014

 

 

1,386

 

Cash and cash equivalents and Restricted cash at the end of period

$

184,152

 

$

145,023

 

PAYMENTUS HOLDINGS, INC. GAAP to Non-GAAP Reconciliations (Unaudited) (in thousands, except percentages and per share data)

The following tables set forth our non-GAAP financial measures with reconciliations to the most directly comparable GAAP financial measures.

Adjusted Gross Profit

 

Three Months Ended March 31,

 

2024

 

2023

 

(in thousands)

Gross profit

$

52,725

 

$

40,078

Stock-based compensation

 

51

 

 

45

Amortization of capitalized software development costs

 

4,029

 

 

2,738

Amortization of acquisition-related intangibles

 

829

 

 

829

Adjusted gross profit

$

57,634

 

$

43,690

Contribution Profit

 

Three Months Ended March 31,

 

2024

 

2023

 

(in thousands)

Gross profit

$

52,725

 

$

40,078

Plus: other cost of revenue

 

16,642

 

 

13,453

Contribution profit

$

69,367

 

$

53,531

Adjusted EBITDA and Adjusted EBITDA Margin

 

Three Months Ended March 31,

 

2024

 

2023

 

(in thousands)

 

Net income (loss) — GAAP

$

7,226

 

 

$

704

 

Interest income, net

 

(2,186

)

 

 

(1,440

)

Other non-recurring income (1)

 

(213

)

 

 

--

 

Provision for (benefit from) income taxes

 

3,534

 

 

 

(256

)

Amortization of capitalized software development costs

 

6,311

 

 

 

4,693

 

Amortization of acquisition-related intangibles

 

2,021

 

 

 

2,224

 

Depreciation

 

205

 

 

 

322

 

EBITDA

$

16,898

 

 

$

6,247

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

Foreign exchange (gain) loss

 

(18

)

 

 

8

 

Stock-based compensation

 

2,933

 

 

 

2,159

 

Adjusted EBITDA

$

19,813

 

 

$

8,414

 

Adjusted EBITDA margin

 

28.6

%

 

 

15.7

%

(1) Other non-recurring income consists of a remeasurement adjustment relating to the purchase price of a prior acquisition.

 

PAYMENTUS HOLDINGS, INC. GAAP to Non-GAAP Reconciliations (Unaudited) (in thousands, except percentages and per share data)

Non-GAAP Operating Expenses

 

Three Months Ended March 31,

 

2024

 

2023

 

(in thousands)

Operating expenses - GAAP

$

44,382

 

 

$

41,062

 

Stock-based compensation

 

(2,882

)

 

 

(2,114

)

Amortization of acquisition-related intangibles

 

(1,191

)

 

 

(1,395

)

Non-GAAP operating expense

$

40,309

 

 

$

37,553

 

Non-GAAP Net Income & Non-GAAP EPS

Revised Methodology:

The prior year and most recent quarter non-GAAP net income and non-GAAP earnings per share have been recast to align with the updated methodology.

 

Three Months Ended March 31,

 

2024

 

2023

 

(in thousands)

Net income — GAAP

$

7,226

 

$

704

Stock-based compensation

 

2,933

 

 

2,159

Amortization of acquisition-related intangibles

 

2,021

 

 

2,224

Non-GAAP net income

$

12,180

 

$

5,087

 

 

 

 

Weighted-average shares of common stock — diluted

 

126,917,654

 

 

123,792,741

Non-GAAP earnings per share — diluted

$

0.10

 

$

0.04

Previous Methodology:

The following tables set forth our non-GAAP financial measures using the previous methodology with reconciliations to the most directly comparable GAAP financial measures:

 

Three Months Ended March 31,

 

2024

 

2023

 

(in thousands)

Net income — GAAP

$

7,226

 

$

704

Amortization of acquisition-related intangibles

 

2,021

 

 

2,224

Non-GAAP net income

$

9,247

 

$

2,928

 

 

 

 

Weighted-average shares of common stock — diluted

 

126,917,654

 

 

123,792,741

Non-GAAP earnings per share — diluted

$

0.07

 

$

0.02

Free Cash Flow

 

Three Months Ended March 31,

 

2024

 

2023

 

(in thousands)

Net cash provided by operating activities

$

10,954

 

 

$

4,763

 

Purchases of property and equipment and software

 

(116

)

 

 

(67

)

Capitalized software development costs

 

(9,276

)

 

 

(8,219

)

Free cash flow

$

1,562

 

 

$

(3,523

)

Net cash used in investing activities

$

(9,513

)

 

$

(8,286

)

Net cash used in financing activities

$

(406

)

 

$

(1,122

)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240506029270/en/

At the Company Sanjay Kalra Chief Financial Officer Paymentus Holdings, Inc. ir@paymentus.com

Investor Relations David Hanover paymentus@kcsa.com

Media Relations Tony Labriola media-relations@paymentus.com