PAY - Earnings call transcript Q4 2021 | Paymentus Holdings, Inc.

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Operator

Good day, and welcome to Paymentus’ Fourth Quarter and Full Year 2021 Earnings Call. This call is being recorded. All participants are currently in a listen-only mode. There will be opportunity 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 Finance and Strategy for some introductory comments. ahead. go Please

Paul Seamon

afternoon. full Good to QX Paymentus’ Thank XXXX And earnings and year call. quarter you. welcome

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

remarks, will prepared our Following take questions. we

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

phrases These November financial statements Forward-looking intent the no XXXX, in to acquisitions with XX, are today SEC. expectation which looking quarterly looking differ undertake statements to detail factor results and we speak in special XXXX, XX-Q and use in caption, March, note with and and our those and to safe our SEC disclosures. such you results, and materially actual under will, the quarter quarter risks, regarding the early forward and statements on ended such filings words September statements review strategies, Form expect we XXXX, subject of on ended and our the elsewhere similar for denote SEC to from we forth factors and risk harbor XX, the set for December forward file encourage these risk which XX-Q obligation XX, annual as regarding report other that cause that or We with as XXXX, the uncertainties our impact the on our report risks Form believe, opportunity, and including uncertainties forth update market assumptions business future These from matters. may statements, to anticipate set them. expect, filed

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

Dushyant Sharma

we many high that believe XXXX, Paul. me We public a us Look, and strong great for before first discuss year. was you, encompass performance company things note. QX a Thank position a as our We year closed talk XXXX let about first. out about But on well a beyond. XXXX I

Our QX grew contribution in $XX.X XX% million. to profit

number million businesses increased December users a And of to XX And we the over in transactions also volume XXXX. in XX standpoint, to transaction Our in consumers saw XXXX, institutions. month our from of including XX% XXXX, we our financial and grew and the platform quarter. billers over clients use

and have context, billion XX% volume. for $XX to us $XX to years of is And last a and to these Our To building took payment It payment volume, volume just jumped in market added it is additional billion. XX as the we And provide annual full pretty year in payment that get a share off core two than years. gaining network handsomely. our numbers, you from can paying remarkable. strategy more see

and the we platform guidance, XXXX our for believe and for significant momentum provide we continued ecosystem, in XXXX reflected which As expect our beyond. demand

another for strong discuss believe me Based current our on be XXXX will visibility, we Let XXXX. growth our and of year now expectations profitability.

and We XX% are XXXX to And adjusted feel margin set our and expecting EBITDA foundation full we XX% the which XX% be work during prospects done, performance. great already XX%. XXXX believe a to have between to because contribution profit be year we for growth about XXXX, between our great of has done for primarily we

Let of few these you items. through me a walk

to solution Both about the a continue market. we to teams JPMorgan be seeing. and established jointly sell Chase significant partnership the First, to partnership the with we are our excited biller momentum

presence the the going bank about its allows very market two monetizing strengthen And channel. to closed which has in Second, that I'm begin financial the integration, us well. services acquisitions, sure wondering our to we payments you're

and we believe or when payment world, with tough on key with companies network of the know combination the of our instant is platform, to Fourth, years we it implemented Third, in sign come. combined to IPN a expect several is for financial that we And beat. number largest XXX launched as our Paymentus. nearly to unique clients and institutions serve we IPN to you

the very a insurance to that website of we and about payment flexibility XX how in options and and servicing it company. from we've telecom pay signed legacy been the XXXX, financial and XX Mortgage that top partnership view large Center onboarded in We the Bill called U.S. biller the have wallet systems. degree they clients each a more All With fourth displacing when the we clients, quarter, digital XXXX, choices the app payments signed institutions, institutions immediate provides consumers went pay. with migrations receive billers a delivers of a October bills. and several also of and our all Center to with payment offers company, consumers and These financial Bill in banks XXX revenues. in with grow bank quarter. launch It corresponding are It that large finished additional market over expect an IPN Fifth, that partnerships and quarter. In debit, live has credit ecommerce powered real among notification in from choice unions. biller new the Bill bill help we across the fourth more well IPN estate Center, they and modernizes including credit base

Finally, our we're our scale, getting we started. is despite and opportunity big, believe market addressable just

conclusion its our numerous platform due excellence reached product deep-dive, feature and client functionality biller reference As support. Group, Aite-Novarica a service biller Paymentus under and testament as capability leadership firm, vendors vendor. services many to our direct best-in-class advisory Aite-Novarica our review leading comprehensive in and innovative of in biller demos, by financial named such a calls, was industry's comparisons, after to and recent momentum position, direct a

warm as our effect reminder, B, the to where platform a objective create billers A, as volume. ecosystem network, financial And the many of remains D, generate As of a exist are payment digital IPN many institutions sales C, our and but them grow lead all list and IPN billers to a sign therefore platform, as possible. our outside our that our expand direct through add IPN reach as pipeline. constantly possible. biller partners flywheel and to process to

are for And the have XXXX upside before. XXXX, visible amount We of results done our highly believe we exciting then beyond. believe more had these a we drivers a I all of drivers model, including as provide future potential in of and combined tremendous ever attractive have revenue accomplishments listed. we revenue work with We

you new this change, why XXXX to Our Many about are of but XXXX feel hopefully and guidance as Paymentus' story. good doesn't gives understanding beyond. we you to

our So think take we moment about a let business. me to how describe

seriously. view growth. long-term is centered role very of capital We custodian we around strategy ourselves and efficient Our your capital as take this a

company, retirement profitable think funds. lost long-term to we business accounts As a the and education market conditions. vacation our about every Therefore, a of executor it will on us, as public continue aggressively family fact, performance I in we day. is strategy irrespective never be plans, responsible children's impacts growth of pursue it That our also personally

touch pandemic. Let and me would was of taxes all we services debt, to such as for also insurance spoken businesses non-discretionary through Bullock's innovative other to over as be have and accelerating it they We on meaningful these the now inflation financial nature If to pass the recurring impossible something tremendous Christopher growth. except of the like, This be famous why strategy offerings. services serve. anything about And to is and like feel are bill events. and and growth our we of reasons businesses crisis I on today, addressable execute bills clients say the financial We many ability whether confident majority Due our and call aren't or is they nature to a market affected government, for by utilities, businesses chain total geopolitical The capturing likely us paid the of supply of bills. let deliver long-term there Matt, me line market portions companies. payment believe long-term a industries we sustainable one before sure our execute moment. have a quickly gives and the issues on stability it's this touch of

Therefore and to are Our to This fees at that through their reason remind the in our crisis a notion either still decade one also back the maintain our increase is over pricing been protection when we and that, structured pass increases we or was pricing to me their for financial grew With through automatically the new agreements clients their let customers. bills. Matt. pandemic Matt? can I want pay our such way and contracts to our all, now. people margins. because had And if has pricing adjust have you we that not call to

Matt Parson

Dushyant. Thanks,

includes XXXX. As commentary in to reminder measure. release for Please tables and GAAP financial of measures. most press on comparable discussion directly reconciliation the items echo to slides non-GAAP refer supplemental financial a non-GAAP strength our I in performance the Dushyant's of quick our the today's

direct billers, represents ecosystem last XX.X ramped of rate million pipeline them. [ph] of and increase progress you year-over-year annualized four more transaction IPN This significant a a are we based of rapidly a business-to-business, interchange is believe drive quarter, We in was we as Payveris volume by accelerated The and inclusive XXX additional each mixed because and through our extend reach expanding million, particular this as on XX.X% fourth the an products. contribution period transactions made over Contribution warm objectives than the processed opportunity to drove of the which in run and in was have sales the and shift the growth leads. transactions. million $XXX.X no and them. in in XX.X% These we Dushyant's we If transaction of year. with acquisition $XXX.X volume period volume, Signing typically profit over priced a XXXX, XX.X% revenue of the quarter, transactions, increase revenue our expanding million of recall a with scale. reach there for our last driven the QX implementing time number payment profit, in we've the increase and IPN growing In from which $XX.X year. quarter other for over same associated resulted non-biller revenues million same

$XXX.X quarter, XX.X% increase XXXX from XX.X%. For year which contribution growth was for EBITDA the fourth million a the year. $XXX.X gross the for was which $X.X adjusted full XX.X% the quarter was QX million, margin. was of fourth Adjusted of it which a $XX.X million, and profit million represents represents for Adjusted profit EBITDA is

For adjusted EBITDA at XX.X% or finished the EBITDA adjusted $XX.X year margin. million full

expenses was intangible also Overall $XX.X in from this Operating growth, and very and metrics. its are to well for XXXX the our ongoing from of acquisitions. operating million period of in as as performance $XX.X last acquisitions of same across by assets increases proud expenses investments We from headcount increase year. rose these year driven associated million the the with last our QX business amortization in our all

we and multi-fold in also to from increases new quarter partnerships events $X.X position R&D drive and established. for up QX see expense company for as marketing ramp with expense and add the was GAAP non-GAAP and innovating $X.XX income continue market million and we significant XXXX, expand ongoing to or QX or Sales marketing our was to continue as $X.XX of EPS $X.X have Travel customers million public We the and and due investment XX.X% and we income $X.X experienced net headcount we increases was in acquisitions increased cost Specifically, million and infrastructure. corporate net EPS given quarter. of opportunity partners. the continue was the million to market increased insurance to in relative sales and in for XXXX. XX.X% G&A our $X.X fourth and non-GAAP

Our full year at effective tax rate XX.X%. up ended

discrete of I QX and year most deductibility for would effective associated call rate items we You expect tax around forecast rate but may like of in full don't exercises benefit we QX a received item tax indicated a tax discrete option stock recall have that XXXX. XX%, our and the without during our the to with discrete XX% tax effective been companies

As equivalents of XXX.XX our $XXX.X sheet of we due cash primarily At had acquisitions December and customer payments. XX, decreased and of the this cash account end common our million to XXXX, balance share our timing on and year was stock million shares. cash

QX results, XXXX our outlook. to full full and turn Now let's from our year

and our We based guidance introducing our current for are historical on performance expectations year. XXXX this full year

and between is XXXX year-over-year. in range outlook to of the XX% revenue growth million, Our $XXX million $XXX represents which XX% for

XXXX $XXX year, a million million margin range company, well it XX.X% of is in approximately $XXX the With halves, of XX.X% XXXX, XXXX, half to to be to adjusted of to our want XX% impact to to we of two meaning, for the at adjusted the the We for second million as and was that before we the first was EBITDA margin tale XX% public which anticipate cost due public EBITDA went as But EBITDA was it between expect for XX.X%. when the of being you XXXX the a XX% while of remind adjusted acquisitions. were I $XX of profit half million XX%. growth. the EBITDA, contribution for adjusted $XX to We regard

has margin are So, for balance margin, rate. we will run to continue guidance incremental company EBITDA EBITDA debt. clean outlook our combination our current the us believe including adjusted of our improvement that actually XXXX growth with rule a from keep of We sheet expected a XX no and

be our between typically XX%. would and tax we XX% expect to effective Finally, rate

in of This rate does transaction we However, XXXX. forecasts acquisitions of cause future and assumptions rate per to expectations be due expect saw and may for to not essentially to our effective from will the even amortization contribution similar tax we undertake. book providing are the guidance be XXXX. with not income tax acquisitions we impact the to that Directionally, we any incorporates incorporate in effective break the vary associated intangibles expect pre-tax This our level certain we substantially throughout profit XXXX. accordingly to QX for

growth Some assumptions in a include what we've the historically. other rate sales same-store of of seen consistent to

And New obviously live customer been minimal implementation with attrition line has is historically. dependency going a average in our expect. implemented has transaction expectations that clients. we even amounts also as that the client clients It on newly payment case and assumes those that have the though volumes

average of color growth from reasons As there quarter-to-quarter experience in payment you did may amounts, we is know, we But we types because line bit quarterly XXXX. to changes you of quarter-to-quarter do in of a And is provide the don't progress guidance. other not on straight mix can anticipate don't give the year one be the due and how growth expect variations I payment to to items. during want we rate

expect in than We acquisitions we year-over-year contribution first the higher the of second half the lap profit QX. half year our in growth as

client been by depending needs. closed timing specifications year. XXXX move can we in has sales expect The the relative result later or last quarters will comp of because month rate is earlier revenue that to between have or year a and of highest a growth the generally the the two and driven implementation that quarter As variable majority variance second the impact on vast

or we amounts to please And an closing over in our though quarter even contribution with annual business said as believe actually sequential quarter-to-quarter end on Specifically may all really we're that of in the basis. I'll With clients. fluctuations typically see see the back range evidenced to for first bill upper growth keep growth turn in comments. guidance the that that, Dushyant average call by even we much XX% a some with growth due zero higher we profit with lower mind QX, utility though, associated

Dushyant Sharma

you, Thank Matt.

we is to of beyond. deliver in similar Matt to of work I eye hard primarily to where subsequent to we deliver did results set always continue two-year the for horizon, have and XXXX year. the our in a As foundation also XXXX That because execution XXXX. our current nature a business, focus about the with expected year feel is good the great but and is over we now the decade execute also Likewise, focus the for our a on an performance. to and shared, building in XXXX foundation And

Our the every who member XXXX team team to be And we'll possible day. without dedication won't plans our would of thank I clients open sell members, of for will each and and XXXX that, line XXXX questions. work care and the to now the every our results hard like their with hard take our work. and of

Operator

question comes Thank from you. proceed. The [Operator with Research. first Darrin Peller Please Instructions] Wolf

Darrin Peller

on Congrats want over past had as -- company. to guys. off -- with months, year started customer if XXXX look first you Thanks start correctly. I a remember six public off finishing you public I at the when at the to adds nine we your

move to It's in XXXX we're and up just a plus now showing pretty about time. a period of went pretty You XXXX. short dramatic

of on XX see or So, on next, to if driving would we you'd that And categories what's adding great? could be you're expect color a more months, that? maybe it, sustainability What the to XX in? in just kind touch little what call

Dushyant Sharma

financial the institutions. include acquisition, XXXX well is come as that Payveris the Well, clients the primarily that clients the through

is first bullish. we through us and much network gain billers our a heard possible. and continue And you -- about strategy build bring as and I share the relative ecosystem on So talk acquisition of continuing volume market remain clients, as to goal IPN to very to and as build IPN, build focused all, think and of remaining

So acquisition XXXX minus we we beyond of see the similar the customers. acquisitions in terms trend And in and see a trend. similar of

the will healthcare. in come finance, key insurance, well verticals. terms where they of insurance, telecom Now consumer Utilities, from? Utilities, core as as government, our the verticals,

Matt Parson

more the would financial The Payveris, addition on focus financial add financial institutions, adding, also only institutions and with add I to I to of thing the that obviously clients. a more be continuing and think institutions stable of is

Dushyant Sharma

Absolutely.

Darrin Peller

Okay.

quick about it. the parts or beyond the one in trend getting and forward. as more and contribution but questions thinking customer as guide one for one, to really of But a follow-up Number the maybe Just of on mean, couple the strength when now. two adds in-line results profit, more transactions, looking is we're outlook XXXX I and well on line

And you're there dynamics for And it all? on at JPMorgan touch maybe on charge minute? yet what And partnership or the the seeing on what see able yield expecting just for yield also, changing so, then for early an or that? a anything that's of transaction per fee inclusion the and to is just too to you're is

Matt Parson

Yes.

on consistent saw first the I we contribution remarks. be XXXX, On expect QX. have per But in part with profit prepared transaction level what in the the we to the said contribution line, profit the it roughly I think might in

greater larger hard As very we've we've ever generally add winning volume a continue in comes client and fortunate better them we've and with before, clients. larger of said clients than course we worked for larger and won We've and pricing. to earned been

transaction consistent larger price whole keep But certainly, saw think pressure line. we fairly XXXX will as the kind continued to what we we some on with so, for there in QX. need add be of per on And it the can we clients,

And will from two profit as if in with a continue I momentum Dushyant to will of there then we're pieces be of JPMorgan, it Those akin that contribution contribution on on when part as is there. presence from to But And is you we financial business, we -- are call, the per One particular. a also positive think business mentioned where their of said, expand some the be priced of to more there. other second on interchange. BXB transaction. no and you are respect currently migration the the our there's -- as But comes existing lots institution that on remember profit accounts. basis,

of platform. The second existing of on clients previous their is some had they the

is together go to second to market them. with The

with market winning the the them new together On and clients. go-to

of you those spectrum. As are end the lot a would on larger of clients imagine, client the

those And a are and size. so, their we've take had little going of up longer running bit very good results simply early But to because get to on.

And revenue on we're of XXXX That doesn't XXXX. won revenue in not up with mean way the lot winning well a from a meaningful in doesn't and associated there's but really haven't impact those already underway others, clients. so, some we show in impact

On it comfortable and the get prepped talk migration, it. to that required the to get with there's clients, them to time

So large. lot there again, also whole very year, impact in XXXX. of the there's the back but not not a in some of half There is

Darrin Peller

Okay.

Sorry, that's helpful. Nice guys.

Matt Parson

Sure. Darrin. Thanks

Operator

Thank you, Please SMBC. Bauch next from proceed. with question Darrin. comes Andrew The

Andrew Bauch

build taking for lot and real quick. into your investors the upon of discovery. Thanks immediately point I how help IPN and advantages IPN expands payment you dramatically addressable it automated to know question. country. you touch want biller one key I of could mean, the better the And gives a IPN, market on the the guys. the visibility more I ecosystem understand really Hey, to across the my us

little a think bit be color around more I that helpful? would

Dushyant Sharma

Yes.

And if Look, as rightly is pointed on, then, you all of to for question. who paying IPN garner first are paying into for they and they our way consumers the their are to are thank how out, continue bills, whether well, network billers great. us or directly you insights on are those not. So, a

the we to our those directly go But sales they are are who customers better. to are we able those starting and now pipeline to existing customers. So not serve target

very about. opens already starting to because There attractive processing seeing where we actually becomes up payments are we're to a this phenomena we look payments are for they're very now verticals and several us, for where So us it talked to core us. warm doors lead beyond verticals the

one garner is could to and they're our able So, are the institutions it's we Bill we that verticals hand, Center. this the having leverage financial volumes, way us On those capabilities to hand capabilities capabilities, their other by about as on further the the other and add think and modernizing our to IPN expand payment insights our to platform, key what and allows other what to features using TAM.

that we is as So actually speak. happening

whole know, focus which contribution thing dynamic in as the is well. between how of Another is revenue. one interesting is, And as our gross that net you us doors do revenue our the opens profit, of key this gap areas reduce we there for the to

Andrew, as that And a question? see repeat if could us. strategy the second of we your biggest you part So for

Andrew Bauch

No.

think regards automated you regard my follow-up tightening we changes question I any investment your looking But that biller line with that or the midpoint just mid in guide, It seems mean, I to at to expecting. were the would margin I the at what was it. with there answered the discovery. vein? in be, to supply EBITDA with guess relatively strategy -- adjusted markets XX% labor

Matt Parson

Not really.

months as -- as increase my down able tightening hiring talked previous opportunity we of a as believe attract candidates. Dushyant we as it seen slow phenomenal bit telling said because than some we're to on But cycle prepared great the the still ago on our it's bit, a to a do the about or XX we've said, going people. the then I'm nine in been the top days, some to Certainly line But labor we money if continuing letting team spending maybe we to to that. strength we recruiting our dictate market. such is about spend investment how the the mean, think We've everybody's finding the just to obviously add longer to to call business to bit there's before, been was continue of worth like I of, of remarks. feel sense think to little people. tad I say, they're we've because extent -- we're yes, little

to really decision been to make growth. has drive sure investment money we on to think do and going that if top it. not not responsibly we're into continue driving additional that every is growth going the we're the growth. can do profitability We're responsible And we're important to line. it hallmark we Our out And weigh going think to spending

Andrew Bauch

Thanks.

Matt Parson

only Andrew. thing was Thank you, revenue is the investment. are Yes. that the in implementation going to mind that, results because of lagging keep say just the our I sense if The in timeline, takes to we're revenue the the away. get see customer going to months see necessarily of not live, to six, takes those. it of bit investments us nine time little a straight impact In It a

Dushyant Sharma

points. Good

Andrew Bauch

right. All Thank you.

Matt Parson

it. Yep, appreciate

Operator

Davis Thank from next John with Please The Raymond comes you, Andrew. James. question proceed.

John Davis

guys. afternoon good Hey,

versus XXXX? kind embedded actual How it trended First just XXXX number comment What want to start an not is XXXX of on net rev retention. Maybe in guidance? in just a it's the little bit, directionally.

Matt Parson

Yes.

very with I disclosed did So, or historically. but for XXXX, we've consistent a number it's we would number about what talked have seen not seen a with consistent historically, we've yet -- what not say

XXX XXX to range. it, one of kind call to let's upper teens, So mid

And ballpark if from laid new that expansion of we around about about think previously, we've when clients existing I and comes a XX% think grower, with and business. is comes we out of accounts -- roughly from about think about, half that roughly so, ourselves no as half in about of the XXXX

John Davis

in guide then from think an And XXXX? in XQ, baked and with we should or profit organic the how great. contribution contribution what's the for then about in Okay, sorry, perspective revenue inorganic

Matt Parson

Yes.

as we're obviously the them. do. and it's haven't what into is bill the We et acquisition it when year not far as But to it's the real because numbers. out, of you to baked the to we what brought companies providing in value expect it's a broken about some guidance overall there's the value or But capabilities certainly, with for there combination they able material and real institutions to the the think the next And payment clients do financial cetera.

because out it's our So, guidance, broken material. it's included not but in haven't it we

John Davis

Okay. if last And I one, I'll can. one squeeze

talk a XXXX? about expecting maybe meaningfully remarks. prepared contribution -- profit more for kind Dushyant, contribution the and us Just of update to to Just, help perspective contribute XXXX just IPN in a IPN revenue in in you are IPN? you ballpark Maybe lot curious an from revenue

Dushyant Sharma

core have seeing exactly you of IPN one the out the it Do as is action. we as we pursuing, want now volume internally the and well is, we transaction IPN because actually and versus the so are to this? our that business, trends, to effect how -- in internally are you our are network effect doing seeing intertwined already But growth, were seeing as the breaking you the seen the add we which we talking. contributing to they're the anything things the we were are even of Actually, from And are and to as the frankly business. growth not numbers core therefore, network

Matt Parson

the don't as transactions cetera. a of contribution Payveris as is as the IPN where just I'll without institutions the basis as time the the on to two previously of with, our you carry to transaction transitions BXB, Yes. becoming down profit had interchange as we larger cost we We've, talked think revenue a larger over only includes happen. working will contribution accounts, we such One, about more profit. and mix of business mentioned step things revenue or also as certainly of the business on et financial line which part I sign the per but the

not not to as So, in increase but of up revenue. we about obviously, and see for step contribution percentage we that massive a year. a progressive profit more continue model it talk can a would this I I would will

of up throughout kind I we the very the be year go step through year. it'll a slow as think

John Davis

Thanks Okay. That's guys. helpful.

Operator

JPMorgan. question Thank with Huang from The Please comes next you, John. Tien-Tsin proceed.

Tien-Tsin Huang

here. Thank you. Great results

Just for -- pipeline I the your billers last Thank compare, sales XXXX? you've XXXX now on wanted versus to and partners curious? team it just this Any does for change you. here? wise year. higher Are the ask that quota targets sales big it for is versus How time set

Matt Parson

team. rest and smiling and already because of these question, I'm the between Great actually. is The Tien-Tsin discussions me, Matt some happening reason Jerry are of

the But combination past, discussions. things are of is the to biller the was you well partnerships JPMorgan leading have as the set then combination if us the from including as years pipeline all of we companies working institutions on as this those partnership been having will Chase. the it day helping than framework the the are biller put who up yes, and build stronger before. we it's of And as well towards financial have of both the network partnerships, from -- as ecosystem together So we IPN

messaging, better need with and result of effects, a a the the that as frankly, the is clear that, in So a market ecosystem there -- network all understanding for Paymentus. combined the the like platform

here. than were of our are As bigger I talked on that year. remarks last for that's very And platform well about and year built in a as we And many that. larger focused my sources -- have as part result, they team revenue targets of we this the is have that prepared

Tien-Tsin Huang

Yes.

the net is I like feels that thought it way, why seems ask. is wider, Now definitely it I'd which

more where my get expect little targeting? as different? know larger to I partners billers a be lot there going think you're mean, then said curious differently plays. signed last wheel to quick you of it year you've just with just you thinking versus and drivers revenue So the to meaningfully is spin well. given what a lot about this year. bit the just Do you just I'm I a to follow-up

Dushyant Sharma

can our aspects. we look, to of are all tremendous are mean, will as continue Yes. we network. we our actually that And is the and -- seeing on. our favor excited, as expand from in trends remain to we I much very gain pursuit share continue market And

of we they all. way want choice. whenever They whatever they that. consumers more companies want, The however platform. able about experience And to a user for looking they -- able think for modernized looking are a modern, and billing it, the unified you right pay it to want banks middle want, are it are And be of sit do a to If we in want.

a So industries result to result the getting think And about. we as not as as thinking a you are wider. able clients we that I said target in think of were than net I is different

seeing our billers through on we are directly the are them to type for, network. trends, are but we platform. We not payments we able the But direct are IPN also our processing of watching

we are some hey, We more able what and add. see, to capabilities could also restructure

will and But large as pretty as in manner. you start what are after go it's as a on directly. verticals of little seeing based is eventually to well opportunistically coming just see in we what combination whether formal partners a clients of a then see will in, So larger coming well. through the also more you Initially bit diversity

Tien-Tsin Huang

you, Thank Yes. you, great. That Thank was Matt. Dushyant.

Matt Parson

Thank you, Tien-Tsin.

Operator

with America. Thank of The Jason next Bank Kupferberg question you, Tien-Tsin. proceed. from Please comes

Jason Kupferberg

guys. Thanks Okay.

to free Just based curious whether Thank talk to in operating think flow you cash how cash you're adjusted want EBITDA you. flow, about XXXX the terms flow? in conversion cash that about on of forecasting,

Matt Parson

Yes. Yes. in conversion. Thanks cash Consistent XXXX real prior and the changes what no seen Jason. historically drivers we've and to flow with

think I software a is cap impact. big

a drivers the capitalized difference any between we the adjusted flow from cash consisting in of software, about what leverage think do cash flow, did you no would operating of changes and XXXX. lot conversion EBITDA that free have of If to flow of change we there's cash but

Jason Kupferberg

some Okay, of in good. does in for feel Obviously, How story you've great there? part track And will the XXXX? you and a the had the respect do just M&A. to record no and balance successful sheet. that debt meaningful be like pipeline finance shape What of then like look with a

Matt Parson

can at We're you add start looking Dushyant, on. in I'll M&A Yes. opportunities. constantly

things. our imagine, you can once public flooded went As got email inboxes we with

continue we going as we've very forward. before, been said and disciplined with the so to be and M&A And so opportunistic will in past

XXXX, or there at is lay in got we've plug go kind this beyond, and really good we when objectives fill you to and Dushyant to in are strategy we -- is say, no out the something we buy our or to achieve there no this big look holes that heard want hole. gap our XXXX things think we in of and as out news goals the to the are accomplished I where

big either gives us we're all our or in or Dushyant, add and So it in it to that certain do to doing quite the kind and ability position hole expand a us anything? to which capabilities is TAM a to we allows what good gap deepen a be But opportunistic. opposed as be already very you plugging of our it's have, area. additive to want say opportunistic a to be

Dushyant Sharma

No.

I think I completely agree.

I and think we'll comes which if acquisitions doing to additive we'll and think I we along look it. put there's continue out of disciplined. at it possibilities. something and be could to won't selective it We'll continue realm you of like very the opportunities But do be

Jason Kupferberg

Thanks, Dushyant.

Matt Parson

All right. Thanks Jason.

Operator

you, with Thank Please question The Citi. comes next Jason. proceed. Shirvaikar from Ashwin

Ashwin Shirvaikar

Hi, Matt. Dushyant. Hi, Good voices. your to hear

Dushyant Sharma

Thank you.

Ashwin Shirvaikar

the the that to you talk start If I guess range XX about about drives with kind -- let and like if versus the How things investments is explicit much that that? of of XX have me could you XX guess? margin could what versus you I talk XX. mix

Matt Parson

Yes, absolutely.

some land line. dependent is to on and and line top a there's So sure for range top extent ultimately, obviously, through upon of the EBITDA where it, it we the the on flows

a opportunity one ability to that extent that to investors we're we that. we transparency attractive see capability extent opportunities But make to flow growth you through we in that it and and that the enough we want range We make to investments. and also think additional XX ourselves sure and honest add to range into is a on of growth with the on the the to So, level. can being do those to invest a having that have of that. we able potentially the be grow quite there's to give want to business add, the Again, the is have that things

to the And invest is expect of a do a to years position in So we I'd good expenses throughout that. the as the majority between the really people would bucket. in XX that's being difference say, you kind our and of XX see opportunities

dependent so, you control. I timing we're of somewhat also and always hiring for things think And of good those it's some people looking and attrition the upon can't and

all with that the kind like kind dollars that work felt additional ourselves we extent that to range a of have just little things gave was the invest So as in of year we again drive an line. we those flexibility that investment can bit to think and that appropriate additional top of we in there's through will factors

Ashwin Shirvaikar

Got then, is I amount change it. either it. or partners, any new added And payment type there observable size. bill you guess in as Got

and about perspective that you of well? little factors Can more out you it? might might be look at as hone different talk forward-looking meaning You affluent to versus various figure that strategy subprime, partner sort bit the a

Dushyant Sharma

Yes.

other with obviously I the more in what also to of that the us shift but we payment of partnership are the think a seeing we have terms result in from larger is open billers a doing partnership we a seen framework. built haven't lot ecosystem mix as are But major the changes. or platform,

therefore about network, have needed happen. platform, to have having make the now coming of that have pretty In more the build which it's board, storytellers, said, have business because customers we're I need ecosystem, more the to and and you more ways fact, we attractive. is the this that's we what what we makes to entire the to all at, get listeners are tell the we on built more is talking this about And we point thing we to story it I more think proposition components

Matt Parson

high But we got and started would totally There large is years years widening And ago when is if the say. -- wide over could $XXX before amount I you well only a let's have the I we back more verticals more amount bills would billers that and it thing I like more of amount The auto on the the told Meaning, kind add one ago. and live wasn't in average got levels, go in have more QX client $XXX. a average clients. as or things another payment all thousand across adding consistent. payment three that our the our payment went was two we've four that and $XXX payment amount is, $XXX average agree. dollars we've I we we've of in into expanded definitely low space. fairly with seen a a is doing different

more across necessarily that billers payment more getting a into output more and types financial billers, average more payment that of and industries just in it bigger statement of type. appropriately of that an the the a moved to there's picked of that low. on there's more high and different But from different consistent more amount draw than say different up and if there's other verticals. looks regardless like but price types would we I between because ultimately good we're is and so, than But divergence and And verticals. we've delta what But all slightly thing economic them definitely nothing

Ashwin Shirvaikar

Got you, it. guys. Thank

Operator

next Sachs. The from Goldman Nance proceed. with you, Please comes Will Ashwin. Thank question

Will Nance

Hey, the a may it trajectory guys. me back had over squeezing I the for like in question year. handful half afternoon. just on sounds to the of start things Thanks of that kick are revenue here. in there Good and the year a

XXXX weighted. I think the but year, to start the sounded you will partnership of some really JPMorgan mentioned like more contribute of the towards end it

was board year. the than that quarter client larger supposed on of this come last on large talked about think you normal I a half a client towards second to board coming

little consider I bit grower. understand of loud the possible and the addition these just like guys hearing business with we Is be guys tailwind. it have So a you XX% a talked things the handful of clear kind with about, I exiting of that of could you year

Matt Parson

out got in the not live to certainly in hitting think, answer we the into our that No, year. our late things guys Dushyant of referenced that going going there's we've talked client let said that coming some you about I yes, partnership guidance, the The year. late I question. that jpmorgan I'm were

be a got to lot up XXXX work those our see. it end We've But lot of year. said reiterate of up that a And to beyond for we how as towards we'll the -- us guidance shape we've what All got would reason of do. the I things is. set is just optimistic of for well things and

go is we all As that far most as is this XXXX if when we that we'll at in not the prepared think talked clients kind that about of our in timeline such revenue remarks I locked as live signed said implementation up look my I year.

and the we're Now obviously work between when they the and there's XXXX revenue. volumes is live. when live go that of they're timing then becomes of of doing variability in what the now XXXX But

got we've work do. of lot so, to a And

growth us we organic late the I got up year, think of make a of that do things it's but don't still be. for want the and of I some work just get because that's out happening in the board I just I a follow-up that's to XXXX with not want to a to really comments the you where you guys are is sure it question just fact that well lot to on set I breaking in that to this understand the there's try year it different I want consider are way it realize quarterly cadence too material the helpful

Will Nance

off the then helpful. I follow-up. I comment a guys breaking want that the try the growth material the because quarterly back want enough we cadence can it. perspective a being from and in year, was you're considered I ask half on are to just That's And that out, to not that not understand material. year. sounded growth said elevated to really question make I I realize you're just in sure if organic just different. Got a the notice falling Because just year. you like then in the the of growth of comps would that it the it first throughout of half

half wondering inorganic kind I as third the quarter are was ballpark help questions And the we that of the contributing to impact second would understand around echo earlier go the first the what run just you of half? magnitude into if comps the acquisition So from us I prior the rate? from in the could from current year

Matt Parson

as trying QX there's fair obviously are of though we're Yes. of was are say. is intending QX. And be we QX to really what reason to some year that to really higher points. I even growth I amount a there. well, QX say to going in the for rates going not trying go essentially we be QX we're That's would think material it's and acquisition point. is and part QX is say than Really to going that appear, it and what And couple a through still were QX QX and is comps than tougher the what

guidance is we results what the part slowing quarterly that reason trying don't a grower. essentially think so, And of annualized that we XX% of don't that to a basis see. read was lot into there's that And because into the say give we're growth an on we overall overall factors down, is I play quarter-on-quarter

doesn't even for our to we're aren't the XX% down slowing and believing so, QX QX the growth, minds that at future. because still that and if grower be mean ourselves in XXXX into that we're a level And

Will Nance

Appreciate taking I you And understood. question. my

Dushyant Sharma

a Well, here single not happy I'll but the just quick on XX% with may a be here. I'm very voice make actually growth. table point I

the that they're responsible investing lost not in want feel number be has can with remain all a what funds of grower investment investing that and to be that company. like on mutual perspective public a rule of to I funds to different and the it's to the innovative continue we think We that business. trusted the families a your community to profitable our from want in further. So the XX about want could we actually of ways even capital get also, accelerate to is you do a us But company. the through business. important are us rest We we growth XX% We

that of like we at responsible we -- with are XX% And have. the EBITDA result, its so, we capital. to of we custodian a the want that sure feel And as make Margins

companies. a XX have of rule We

is So the mix. that's That's XX% the reason key the key why number. - the

Will Nance

the it. Appreciate Understood. Got color.

Operator

question from Will. Dave comes proceed. Koning The you, Baird. next Please Thank with

Dave Koning

-- just bit of client just like how see to a And kind growth? of seemed existing quite just clients so normal Yes. normal? first of just it kind maybe just newer Hey, growth strong much guys. much much so -- diverge was How can how kind of transaction is Nice from maybe And question, from of sequentially kind my you was was can review momentum. acquisitions. we revenue was why it that

Matt Parson

more more say say one is really about priority but I safe approaching and share then out of said number XX% bXb I say, level. we mix Yes. transactions before, as And it's and trying changing The growing again IPN the and would to pricing well We stuff our -- becomes without haven't acquisitions would on with to some about, financial of we specifically, as the through and platform. XX% as we still that the on transaction profit the growth broken get talked even our and was we cetera. think our et contribution institutions is a basis. north

revenue associated the contribution with profit basis, because a interchange on no there's it. So

that changes we down versus it versus so, continue But And little was road contribution still transactions. And dynamic profit think we to we think on about. a revenue the dividends bit will it the strong. as as go very the pay

gap I profit clients. think drive even revenue Dushyant reference to out contribution those more ways and the of minimize between profit contribution and

Dave Koning

little transaction was Is to bit a per profit Gross all follow-up. transaction. quick And per a profit is maybe the that that a just even metric it track? factors down. maybe And with of great. Great, that worthwhile same kind contribution

Matt Parson

use a profit But of gross profit metric. you're just I between are the amortization of between at and distort the would and only, profit the a GAAP profit processing you it's normal think got, kind per the just just to are start our think well, or way the to business. know in I that other costs intangibles important contribution adjusted talking drivers personally, we gross profit revenue at transaction. which at And we've an little do or is same bit good that gross deliver when flowing think just but because the gross cost look GAAP costs center acquisitions of business as data use about gross the play. that the about now I and don't with look sure. I platform, if difference it's to I hosting For adjusted -- would main adjuster profit

Dave Koning

Yes, guys. great. Thanks

Operator

at registered time. additional Thank Dave. this are you, no questions There

the the So back team I'll for to closing conference management remarks. pass

Dushyant Sharma

for much so really you to talk you call, soon appreciate. We'll joining the thank Well

Matt Parson

Bye-bye.

Dushyant Sharma

Bye.

Operator

fourth XXXX Paymentus' participation. concludes your call full That for the earnings year thank you quarter and

disconnect your line. You may now

Paymentus (PAY) 17 Feb 222021 Q4 Earnings call transcript