PAY - Earnings call transcript Q2 2021 | Paymentus Holdings, Inc.

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Operator

Good day, and welcome to Paymentus' Second Quarter Earnings Call. This call is being recorded. All participants are currently in a listen-only mode. The floor will be open for your questions, following management's prepared remarks. [Operator Instructions] At this time, I would like to hand the call over to Paul Seamon, VP of Finance and Strategy for some introductory comments. ahead. go Please

Paul Seamon

afternoon. earnings Good to second Paymentus' Thank our And first XXXX call, company. as quarter you. welcome a public

in are today CEO; our the our me CFO. and Parson, and Dushyant Founder Matt Joining Sharma, call

our take prepared remarks, Following will questions. we

issued The was of close Relations this available call Act will webcast posted replay release it call is on market where be website Investor our of the link, website within press made this and under Private our being was on after Reform forward-looking Our include Litigation today, on the Statements simultaneously the company of of webcast. meaning ir.paymentus.com. Securities XXXX. call this statements

quarter which set or use believe, with subject file results, August as forth filed Factors. from June the will, our financial that those Form set Risk words acquisitions similar business the And under report XXXX. including XXXX, to for caption XX, XXXX, expect, strategies, to elsewhere SEC our statements SEC. in the perspective on XX-Q actual impact phrases statements, uncertainties, the materially other risks, such uncertainties filings may are regarding future the statements intent and cause matters. May XX, These with results quarterly SEC final And such from we our on the our expect and XX, and on Forward-looking assumptions ended expectation and with and to anticipate risks that forth denote in differ

financial liquidity, addition the or be call to reconciliations and financial and an performance Investor today for measures, gross measures, our from GAAP today's on these [Audio disclosures believe discuss financial our our contribution specifically as of website. substitute and release profit, earnings Relations measures. measures, I'd adjusted to, should we press and issued are you GAAP we our like profit a including Paymentus’ We will CEO. to useful over EBITDA, encourage And additional Dushyant during comparable in addition, turn available which With isolation with that, the Sharma, Dip] non-GAAP non-GAAP considered not review regarding call, These results. page non-GAAP In adjusted non-GAAP results. to Founder

Dushyant Sharma

Paul, every like for and colleagues hard capital. drive call who Thank clients I'm as and call public my very and and you for us to I'd who joining you earnings day. everyone I'd our for of first trusting I'm you, company. business in each thank your strategy. with partners grateful also of pleasure and thank their XX/X operate our today. also work single our execution my it's to thank us talk to very your like faith the support excited put to the Paymentus at for to our you a

institutions of proud of acquire heart I'm us have are including with The for you. IPN, all to results. and puts We you. agreements payment Thank the of progress financial we at ecosystem very made bill of definitive very pleased signing That the quarter the our Finovera. Payveris sizes. second on

eye Paymentus Before highlights who those I business these familiar about talking our like different approach an years consumer Paymentus. covering would deliberate aren't very for horizons. of both We more with provide took institutions our for them in for by platforms. for payments consumers Dip] summary dealers strategy second financial to next-generation same do and simplifying I and the each quarter of three and over power electronic a exciting to and with [Audio founded the a the ecosystem items, to

our product, The modern billers and pieces IPN up below paradigm targeted technology our functionality a customers. IPN put Network, us introduction market access financial payments essence, payment with we with an we the allows and creates in companies network create To the and industry shift to in retailers, for network middle horizon, our leverages the which that we place to for of horizon, bill in of effect In extends our built our moved can third institutions, their and ecosystem. all payment second and those expanded clears first Payments entered During a it. In multi-sided platform market Instant it the billers. of the the the recent agent outside horizon, business.

capabilities. our with provides institutions the unique a payment step have the that does institutions is when modern it like financial us and what of means strategy major to that accountants, national Payment Payveris for that And smallest our we are credit What money payment to acquisition largest this IPN their network. Paymentus’ bank signed serves means be this announce banks, entire is bill platform for customer means therefore have bank, This unions, financial money on market. and strengthening using the offering we over capabilities across banks pleased is taken in our institutions their strategy. Dip] combined agreement effect, accounts, this unions. move to Our definitive allows Payveris. the having industry, modern presence we central Payveris institutions. including XXX objective lawyers, IPN including anyone transfer [Audio unique What financial Payveris To any towards to payments that credit businesses ecosystem between by institutions financial needs Paymentus to for money the is send week, accounts, multiple to Network own any Payveris person-to-person for accelerate bills their using that banks XXX a accelerate the that to their a financial and acquire movement from pay other Payveris’ join to account-to-account age institutions. Instant and in transaction billers Payveris the platform bank customer a U.S., is transfer of can a nearly as

nearly billers which platform, to our billers. will be direct another is there these opportunity, that exciting XXX can of each equally add base to opportunity of our on direct where addition FIs existing In

of consumers’ Finovera, agreement Payveris is the was a combination technology provider already to is without a platform we that many have agreeing financial We faster a favor addition Finovera that This coverage of offering acquire signed In in by for whether robust already acquire aggregates provide the and of bills, place. to statements utilized also Payveris including based not. institutions or currently one Payveris, We to will being we and of utilizing institutions. IPN, outreach sales believe financial billers, and as share an considered been outlook platform the core Horizon to QX have On our to direct Horizon our anticipate we will platform, continue and that are that will in the bill strategies, Matt prioritize execute for they acquisitions Paymentus end team X successfully. these volumes. by very our of continue allow to on both shortly. close X onto onboarding biller This

the color million. transaction quarter was will grew XX% over on Adjusted to a QX period grew in processed million. which to shortly. gross year. last strong. year-over-year. over And performance profit profit of quarter XXXX second was the over XX% Revenue financials $XX.X Matt $XX.X more million, XX% the the Our contribution provide was same QX XX% in $XX.X grew increase

strategic first multitude of medium completed quarter. small three all a horizon, on of in to be I ours. And continued to implementations the From billers, a horizons a execute focus to continue described We earlier. the we

midsized completing an to also implemented In in to customer methods. pleased implement resulting utility a software midsize we an to second city. the by continue and and new public integration an leading divisions experience product improved XXX to than we was partners, a with the office other utility including provider build telecommunication The new quarter, the companies. with our implementation more departments access As on in of adding very process our in Arizona payment example, and have

large several continue our already provider finance diverse to to platform. Going other horizon, this new targets in our to The preferred will their a the U.S. in clients. U.S. forward, of world we UPS, is In company. we around Paymentus progress be them the billers, billers, including partnership more the which the larger, And addition payments live auto our also second platform for in countries quarter. to UPS on make with adding implemented

Paymentus how for UPS experience about excited partnership and leading a this co-create are clients. We and can business we look

we opportunity occurs the companies all expand as as adding new by to migrate types acquire existing such at AutoPay. to This divisions Beyond growth additional clients. the payment have features to clients also and and us implementations, convert them

customers, combining PayPal choices. experience moves Paymentus AutoPay platform. which And to Beyond methods which a at added new expansion to customer's implementations, improve their million payment expand more a existing one-time with customers to opportunity software we under to its clients. also as the recurring advanced payments have and payments utility X by Paymentus large over like utility examples, Two are provide with

to to Finovera financial platform. to the results building summary, institutions network. I same-store IPN to about our financial IPN IPN founding sales addition technology reach original out talk excited payment institutions on our its dealers pleased with of and insurance financial partners new acquisition for to up consumers, the of horizon beyond really With XXX other across we We're expansion, to to including provider the with the transaction. key move of focus billers renewals, our and one the PayPal’s vision, to and and ended and over through originate transactions financial about reach process. addition be Matt very our across bill especially partners. call that In our we To closer progress of we this completed expands introducing and I'm long-term leading the that, the have we focus dealers, who ecosystem the results. will partners our quarter third FIs, our In our extended partner with to sales Matt? of IPN, partners, nearly turn functionality also IPN Payveris to PayPal extending enhanced of that several the the continues more with our made jewelry industry. relationship

Matt Parson

Dushyant. Thanks,

to by shareholders, Let thanks our me employees. start adding partners, my clients, also and

have today. results of the are for the the sharing all I QX strong privilege You financial reason that

includes financial press release the to items for and quick non-GAAP to today's reconciliation reminder, a discussion tables financial As directly Please measure. refer non-GAAP comparable most measures. our from GAAP the

quarter’s talk outlook about second the financial our you business I me model. about Before remind and our XXXX, for results let

the number paid, [Technical the As get our the the of paid, transactions business of get when is clients to key indicator processed. measure so performance Difficulty] the

our the majority the transaction regardless are of the payment fees For amounts. of vast same, clients,

$XXX. or payment $XX among and we same by for cases, example, a would receive implementation for payment us a and have a of the of our vary the we is biller, or both interchange of most things, charge For and the manage other $X.XX by industry customization minimal. do services paid a so but payment for in $X.XX not or utility caps on be fees type fees we and may costs. professional payment consumer, revenue can of amounts for help Interchange fees the to These transaction combination bill generally platform,

million XXXX, Now which in the in increase million. XX%. growth to representing This quarter. of We period revenue processed same over in $XX.X transactions, of drove the a approximately turning a increase $XX.X XX.X% transaction resulted revenue year-over-year

interchange larger will to QX continue. profit Contribution As gross Contribution anticipate QX larger growth XX% as the more we period this we've a over and from can the the we explained $XX.X larger million, vary shift year. as see in than the was profit was last find million of for for due and $XX.X profit billers, fees and growth – profit increase change mix was XX% adjusted before, quarter increase an Adjusted revenue same we XXXX. of cost. growth of second

large $X.X reminder, payments QX QX. as in per with R&D expense or and that QX million higher our invest profit. back $X.X X% to or for and also as interchange, is soon as public Operating of well for amount build out increases start the tightness for increased cost, and there decline $X was thought, and COVID as continue payment being contribution example, The in more and as quarter, have related was ramped second average R&D the to increased XXXX. utility EBITDA the challenging did to same we of are a of company, the and year than increased in as half to a fact functions result profit $X.X our new a labor Adjusted impacts such we than cost, out not summers interchange The bills, by factors due G&A twice of in driven expense as ongoing as to U.S. making or anticipated we sales activity market marketing was last margin for XXXX middle increase platform a additional cold margin IP that EBITDA the higher that million million we than external was to infrastructure. continuing million well we investments company tax see the in year. public hiring Over and payments cost features a the partners. which As XX.X% time million in are uncertainty. selling expenses operating build particular on relative adjusted Sales the marketing. $XX.X winters up in the increase expected. rose certain million, as may contribution public company the XX.X% increases quarter well month XX.X% as and represents property the $X.X of hot anticipated or travel as which amounts adjusted And from – as in EBITDA

EPS net arose tax These and a tax or of we to lower result $X items one-time slightly approximately each. public. Our that for going QX million items anticipated about $X than was GAAP million due two totaled income as discrete one-time

one-time rate for QX, two effective XX%. in discreet quarter the that was GAAP expense our our approximately a of hit items result As tax these tax

items, Excluding these our the million. $X.X income one-time have tax been two discreet quarter would for net

cash of our June balance equivalent we million XXXX, on $XXX.X sheet. and had As of XX, cash

Now from results. our QX

represents in Inclusive XX% $XXX XXXX of growth year Let's Finovera range revenue which and full turn million XXXX for outlook between our to Payveris XX% to our and acquisitions, our million, $XXX year-over-year. outlook. of is the

our contribution is XX% million, and or growth. outlook approximately year million XX% $XXX For profit, $XXX full to between

contribution all of and to revenue quarter both see the QX Payveris. For profit, expect full we almost due benefit a

with typically As result you tax the a may payment combined of highest year per payments. average some summer of heat the see semi-annual QX we amounts in as the recall, year

reduction actually XXXX, slight of saw In QX fact, a contribution in we profit. sequential in

factors While year, that do our we this we results. similar anticipate do influence sequential reduction not anticipate QX a will

million factors For full we is anticipated also of is the mentioned, XX.X% XX.X% $XX ramping see an EBITDA higher on XXXX, previously range profit. This adjusted for with we a accounts $XX including contribution not than margin to year bit EBITDA adjust in margin back of to million travel challenging as items do not further the quarters. or than one-time as quickly taxes, as in the the labor well past several ongoing hiring as on this in respect originally anticipated, With discrete any U.S. any tightness impacts making discrete to other we year. market more one-time anticipate items

full turn U.S. in of income However, call to the Dushyant assuming fact our a rates our and of forward, Federal is no mentioned tax represents that would for now it tax expect rate normalized a due or anticipate for going so to majority basis comment. the a as over I'll to the various items would rate result the be QX, revenue laws our we is this for rate large effective effective tax state with be closing taxes. changes On we Federal U.S., year current the will that XXXX XX%. that combined U.S. Statutory back XX% approximately approximately

Dushyant Sharma

Matt. we pleased you, into with and the made and the especially Look, expansion we very market. financial of quarter, institutions overall, strategic Thank deeper have progress our in financial the this ecosystem, IP are

we’ll Finovera, breadth now drive Payveris We’ll across questions. execute call and continue horizon the three to IPN and offering. continue growth. With organic our of the accelerate to strategy We our to open

Operator

The with first line Ashwin [indiscernible]. is Instructions] the question [Operator of from Shirvaikar

proceed. may You

Ashwin Shirvaikar

Hey, thanks. Ashwin Shirvaikar It's from Citi.

Dushyant Sharma

Ashwin. Hi,

Matt Parson

Ashwin. Hi,

Ashwin Shirvaikar

on some you the to Great talk results address you’ve perspective. of Paul. results, if well you congratulations XQ, I contribution standpoint perspective, well addressed could qualitatively a public wondering the could elements sort what Dushyant, here. as both first if about was of Matt, quantitative your but Matt, on call as XQ on versus expect top XQ line from cadence? as Hi, as

Matt Parson

sure; question, Thanks the to. Yes, for happy Ashwin.

QX semi-annual because are have, hot tax I on cold QX as the QX of So, average seeing and that, winters, typically we QX. and as just higher the sometimes amounts well summers, payment color little more to give said, versus and as payments that a

what in will we'll anticipate And result year, I prepared we continue this see in average the payment a QX. that so as would that amounts that, said remarks, higher of

And line, annualized a transactions. would certainly QX. than we more QX QX contribution continue drive be QX, as items higher thing would well couple a faster we're of line of transactions of but at from On because it saw a the in thing challenged had some new look more that simply We we live little top had additional items, the - say you basis, pressure so see top margin transaction expansion there I'll the through went million a talked a as definitely Dushyant same-store if – to goes amount about, we to contribution be – – average bad, and over some that that perspective, or profit that payment is, additional bit in as the not other the than rate on profit contribution revenue contribution – run at than of performance as both look line One same-store if the planned anticipated, XXX we for sales had you modeled as did over at well continue as We're for. expect we number QX. of implementations some well profit, we a billers. we on earlier sales, point out on implementations one

some of overdues what train QX, just our that forward necessarily those the of drove because on we things. what over that's so doesn't QX, and And kind QX of part to in – counting drove pulled

you because to go into that revenue those in happy translate any flavor into and QX But certainly it gives in detail And and there. we'll doesn't have more QX, hopefully that you need periods. overdues some so still necessarily

Ashwin Shirvaikar

The bit contribution I got of you the the market that talk down the have but a wireless, about a drill do give maybe understood, that. especially into little Finovera, I up financial end acquisitions, good No, talk you the you then before, And listed, – mean, about into? to if question into and there you better gives second can didn't two that particular step is these credit XX,XXX billers, could. you a a kind could cards, if if it outlook utilities, actually all

Matt Parson

the first over take I'll thanks. second pass Great, and the part. Dushyant it on I'll to part then

any neither breaking of to QX. are are them of So we them specifics our of the we by end – the out said, not financial super to we're as the to material going close we expect acquisitions, overall of position,

really but about results, about – this what for expect it's really what business for business nice don't our see. nice be we'd customers, QX to year going full to So about they've we're and and and year, impact really aspect drives me material It's some get and only talking this not forward. we the strategic got our wrong, excited

And little that a over to that, talk so Dushyant about bit it to piece? I'll with more

Dushyant Sharma

Sure.

from age modern a with ecosystem institutions the We platform. and for main of us, it acquisitions started number build XXXs Payveris. payments bill our our ask we one, Ashwin on got declined perspective, financial for these thing

the us billers the billers those are onboard the cards, process et of have platform built all credit major banks, billers originating utility Finovera, and before, telecommunication our we a have, reach of of for we technology direct of reach ability this is don't a aggregates them the process could case bit in billers, potentially include actually to platform. out to to in what includes the the banks of customers, on all that these unions credit bill able major is on company the but cetera. and most are while companies sales capture didn't And data platform. basically for an data the prioritizing on a we to that bill a on be each our that Finovera has large also so We IPN, perspective only payments that gives to and not our banks country from In

to trying in I’d there to have the to some So trying Does the billers while where a the ways you're it you direct network billers of makes those is you're process platform. sense? move monetize for transactions say our in effect to don't encourage

Ashwin Shirvaikar

Thank sense. makes That Matt. you. it. Thanks Appreciate Good. Yes.

Matt Parson

Ashwin. thanks Okay,

Operator

Shirvaikar. of you, line Thank next Mr. The comes from David the with question Koning Baird.

You may proceed.

David Koning

job. great a guys, Hey Yes.

Matt Parson

you. Thank

Dushyant Sharma

Thank David. you,

David Koning

Yes, sure.

just about growth guess the question, and how and from couple I existing we like, Can my about obviously then transaction at XX% look new years? is kind much of in maybe client remind how of next so that tremendous just first the number much do kind transactions. over is you see of how us think just of terms growth. we growth And signings When think the just how is to of

Matt Parson

question. Great Yes.

complexity new none provides timing recall, few we've the the with the and signings take got customer. in visibility a a And have good and of sale so from is the implementation customer so of then that that depending our anywhere can model and medium us, the short that if on size the sense really you the very and and business year, for months term timeframe of for we to

And and got short comes visibility lot medium out so we've in of the of term. what a

to extensively that and implementation QX, months see by And next with customers turn the in year. go implementation in expansion transaction it results to live same-store driven talk in and the where earlier to so sales is the performance that pipeline. were over when go but of about contributing we bit quarter contracted sales a I’ll several it's the our we little Dushyant growth almost already really

Dushyant, you the talk little our a is sales performance this same-store about bit? growth year, pipeline to gong pretty coming see be much But want remainder of any the sales about out of to and we implementation think growth. that of you If

Dushyant Sharma

standpoint, good performance, a I’m Matt that on target a but for year. sales as customers as from opposed get from And of the will those we a had volume coming up very sales we platform see in you By quarter, that performance Yes. our perspective. are immediately very that to live next pleased the way, bring as sales the great said, on quarter performance and results we quarters

Matt Parson

spoke, just was this transaction first in I'll in we part Ashwin’s was I what but of happening saw sorry, add than the that the too, to the response contributor thing to would I a the I – And said. time just It I slightly to question, should've a said is really as had as as some we implementations anticipated, as that the growth kind XX% which not quarter great. modeled items same-store is far sooner sales, almost the of well

Our a implementation great team job. doing is

customers about Our excited are working us. with

And live. able different, in quarter the able move is current up so we'll mean had continue, get quarter implementation result a necessarily and we that to we've to been customers every doesn't being great but this

David Koning

and Great. just year, the adjusted EBITDA like $XX that back to XX million Is is why the follow-up, or looks of costs Thanks. back Just in half looks you're sales quick EBITDA through would And the $XX the all IPO was so. it – first just XX, maybe And and maybe it that. like, mean lower? so which that a stuff, year, efforts half, in half walk million, XX full guiding the just maybe

Matt Parson

Absolutely. Yes.

operate it’s one, in et of the have QX is a public Then and fees as We starting continue of legal things. with bulk not to company hit some calls. those did had company. variety public cetera. but that's a through, insurance, fees flow to QX D&O accounting along One we that's in one, so So a

to very is of drive the we're happens what some we the we And et have about acquisitions last two also on in happen to there think certainly travel then folks for to do QX, this that But Delta – pickup excited obviously impact cetera. back happening later depends think thing as if the is year. what on you will, variant, think and we in with in conferences on and will the we I look continue as results the And get that. EBITDA to an We be think year on opportunity. we to normal, particular going continue that hire hiring in

David Koning

you. Got job. Great Thanks.

Matt Parson

Thank you.

Dushyant Sharma

Thanks Dave.

Operator

with Thank Koning. of is Mr. from The line JP you, Huang the next question Morgan. Tien-Tsin

You may proceed.

Tien-Tsin Huang

some and call much. to questions frame the there on they access accounts any results. how asked, so but currently IPO users that lot congrats the power want amongst my the Good maybe great Thanks universe I just have on the game is Payveris of and to many afternoon, the Dushyant to on this, way of ask just, or to these is to the first deposit A or an Payveris. IPN the last several, banks own idea expedited on around to opportunity now these any banks, represent sorry way on. them might many you question, how opportunity on biller plan just speed for overall, just that these bills there banks, move the And to around but ask direct mostly

Dushyant Sharma

Yes.

it that can these you the discussing all, sizes. the side much talk financial for strategic as kind and of We're we First words, this of you hundreds that institutions unions banks imagine, can includes you of thank Tien-Tsin. so think combine not are numbers of at point, when to different I credit but

of us rather banks and to to a PXP for quickly. fill they of the have that AXA. have capability feel terms decent from money payments We scale get cohort helps actually for all banks a You feeds full-service in platform movement to other built

out. the Now innovative we aspects suppliers terms the to from legacy feedback acquired we sizeable of market whether continue of come based they’ve biller that some the delivered And they're systems terms largest in opportunity, of number including in payments hear after to Dip] us here for. the the combined banks these believe the of of We [Audio of the have the that they that had, had get they've technologies IPN with from looking sizes, is each of in haven't mainframe rapidly. some banks allows the actually direct receive the financial institutions all

So insignificant. it's not

very feel good we it. So about

Tien-Tsin Huang

a sounds your to thoughts. for like way model Yes, many one Thanks banks. the get great to a onto

Dushyant Sharma

you. Thank

Operator

you, Huang. I additional back remarks. any are Thank waiting management it would Mr. questions at the for pass to no team to closing There this time. like

Dushyant Sharma

results like our you pleasure and the much so the your second you quarter. thank families, would performance stay was through you. We a taking best all Thank it you safe. and time. you wish Well, and And very to to to for for the walk please

Operator

I today's Thank you quarter call. earnings enjoy all Paymentus all hope second rest you of for joining your the day.

Paymentus (PAY) 11 Aug 212021 Q2 Earnings call transcript