PAY - Earnings call transcript Q4 2023 | Paymentus Holdings, Inc.

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Operator

Good day, and welcome to the Fourth Quarter and Full Year 2023 Paymentus Earnings Conference Call. This call is being recorded. [Operator Instructions] At this time, I will now turn the call over to David Hanover, Investor Relations. Please go ahead.

David Hanover

Thank you. to Quarter welcome XXXX Full and Call. Earnings afternoon Paymentus and Fourth Year Good

on is the Founder today me Joining call and Kalra, and Dushyant Sanjay our CFO. CEO our Sharma,

remarks, take prepared our Following questions. we'll

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

expectation as year to safe believe, risk financial as similar SEC words these you forward-looking and our in business from anticipate uncertainty, SEC. file ended impact and the the acquisitions XX-Q These and detailed subject factors impact filings enhancements, We and for in Form review use results year December uncertainty statements, encourage captions and the forth report factor to such statements elsewhere subsequent December the forward-looking timing, to set statements with Form XXXX, shortly quarterly other and guidance, XX, regarding opportunities, differ and market Forward-looking economic update cause we for results risk our materially XX-K and statements, forward-looking risks, risk strategies, and address XX-K will, continued on such special intent set no our including assumptions forth implementation to statements XX, to expect our under or product our the our ability regarding the speak and note denote and which those reports disclosures. the harbor Form on XXXX from expect, in to future them. annual our ended with of and are phrases actual uncertainties matters. These we undertake may obligation that statements of other that today,

press In specifically to earnings gross call, financial should which as EBITDA non-GAAP useful EBITDA, substitute not will encourage liquidity, supplemental these share. that, available non-GAAP our addition, measures turn we and We this to income certain These from Relations results. addition discuss our adjusted you adjusted GAAP including disclosures the the Investor a measures, and reconciliations in operating like profit, adjusted Sharma, I'd for non-GAAP in in financial GAAP expenses, our our Dushyant? measures, during measures, CEO. and Founder additional release non-GAAP earnings of comparable net today profit, the Dushyant review isolation webcast, issued page per we call over margin, website. With believe and of performance regarding most or be today's non-GAAP on directly measuring are considered in each and the for to contribution to slides and

Dushyant Sharma

is opportunities about excited a just we Therefore, believe started. we are my carrying a Thank great into XXXX. me our our years. long-term the innovation and have our exciting subset more are arising over forward the financial and We the Even great momentum looking view we we had year reflects and only you, David. performance framework to of to are out future a that XXXX quarter built of getting

year-over-year. Fourth $XX.X XX.X% quarter quarter, year-over-year. up EBITDA, for was quarter highlights. XXXX, fourth well initial $XX.X of up XX.X% ahead our full many up you was year metric of as significant profit was the million XXXX quarter Paymentus cover that the Fourth and million, XX.X% quarter revenue Adjusted know, In contribution which again expectations. million, of were year-over-year. delivered results a I'll $XXX.X Now, financial our is for fourth the us,

of our results, XXXX expected us these completing achieve a without of in course, XXXX with top implementations. to a position clients, strong believe timely end any but exited we to guidance we addition the puts bookings a backlog In our strong that and signing also new

shared same may you time. this we year sentiment last recall, around the As

For last the contribution over of million, million target million, XXXX, year dropping full that target our XX.X% to XX% long-term year $X.X line in the revenue XX% EBITDA of we last far $XXX.X profit ahead the EBITDA. million In same our to was increased $XX.X of XXX.X% XX% added beating long-term increased of adjusted QX, profit to $XXX.X period growing XX.X%. year, over and to top contribution million, growth. Adjusted while $XX.X

we past growth this for majority believe or highlights bottom of profit key expand without the an the dollars of incremental of innovation. contribution the operating to leverage have ability strategy, the proven demonstrate continued We one line. So, strengths sacrificing few quarters, operating our our to our ability the to drop to

top have we to earnings line Paymentus, solid As shared goal before, high-quality at alongside our continue growth. delivering remains

and of date proud expect long-term in growth are these both come. we to delivering to have achieved continue we what years in We areas of to the

fourth-quarter of business accomplishments. Now, highlights our key and review I'll some

earlier, with and our with very growth. I finished are XXXX mentioned year-over-year pleased As we a backlog strong

which all course, the participate in platform. integrating merely and platform enables broad diverse our our technology this driven to by and Of of IPN of by continues a clients strength be our our onto network ecosystem, to

activity. client new to specifically Turning

We fourth multiple signed clients. notable insurance and signed large utilities quarter, several the During government large and companies, we agencies. large large

and large management a real estate a in also We sector. retail property large in the company the business signed sector

the the be addition, onboarding always, several support. strong our of And areas, In our order key clients can as verticals drive signings and continues to to in of We various backlog platform other our signed one growth. believe mix focus broad across we businesses this demonstrates customer further verticals. of diversity

well a conditions targeted collaborative area believe for improving as regard. this incremental allows making are continues as a We in-person the investments be this for continually tailwind us and in post-pandemic to these that more investments process in

continued we up have effort, this of to hirings. part ramp As

companies, XXXX, progress large several property launch of institutions. start the government We companies, clients and since financial management onboarding the fourth insurance including made including agencies, multiple during verticals, across significant various have commercial new quarter of the clients entities, utilities,

Of course, we XXXX, targets. plans throughout and our growth further progress to expect consistent internal make with

a As ecosystem. we bill are global a strong product the entire platform reflect I hub who to we with step we back belief a capabilities central When setting we that payment ecosystem, we to provider. reflect believe fintech drives our the becoming increasingly and become large and personal currently are our on serve product a offerings, foundation it and on

and serve our getting we businesses their First, consumer of business sizes their and with and industry paid verticals, through customers engaging platform. various bills

banks of various payments ever-expanding using IPN billers sending credit platform unions sizes to customers from ecosystem. our their have Second, and we the our and

and have uniquely and These millions are businesses, the businesses and And banks, have our we disbursement interacting SMBs, offerings clients who our billers, address credit workflows. our direct ecosystem. of on their all small payment and and Third, specific platform finally, business platforms. unions engage disbursing using paying and payout out we of consumers that dollars millions product

full we and At ability fourth year business believe words, We increase DNA. In the another we leverage of report a headed we we with for with that quarter of the momentum you're I both an solid revenue without period are investor and ended growth. the were expectations, to our ahead into like sales backlog continue original XXXX. onboarding I course, TAM, long-term the to expect me this to am proud In future is our in prove time, operating year if disciplined along same excited you're sacrificing and the and growth with and other profitability. the backlog, closing, So, our in business results growth going and strong innovative which sustainable to growth. as this where of intend strong XXXX hope ever-expanding business, is fuel remain focused a about company with I as to our our platform

in Sanjay to over detail. review Sanjay? it to greater results turn me let our financial Now,

Sanjay Kalra

and thank Dushyant, you for joining Thanks, us today. all

Before full-year our include that to outlook, financial everyone I results quarterly I'd financial like discuss remind and measures. referring results our be non-GAAP the to XXXX and I'd

reconciliations are the our and financial their GAAP on David mentioned discussed of website. release presentation available to this non-GAAP measures on include corresponding of Both measures. press earlier, these call our As earnings QX

X. Slide to Turning

XXXX, results. of our the business. stability, results believe quarter We of these strength continue demonstrate the quarter For resiliency, financial of another delivered strong fourth and very to we

and quarter fourth results of EBITDA of Our million, million. included adjusted revenue $XX.X contribution $XX.X profit $XXX.X of million,

Our outperformance our in and originally higher expected in more we of results came the than I'll drivers shortly. detail discuss

to We business position. to continued once again fourth This in solid further backlog a quarter our cash us while enabled the strong exit with the also increasing quarter. momentum experience

driven grew year-over-year. activity was fourth The increased our instant XXXX Now, $XXX.X the of quarter IPN and in transactions let's quarter XXX.X from in largely by to number Fourth review billers, the This million, million more growth we detail. existing billers, launch transactions financials revenue up of XX.X% new increased network year-over-year. fourth XX.X% up or our processed payment business. in quarter, was

expectations Our growth exceeded despite year-over-year year. Contribution quarter to to was million, flat XXXX billers existing compared higher and the factors. best Contribution fourth This to growth. reflects billers. fourth outperformance number profit XX.X% mix the up year-over-year. of primarily essentially in terms past in X contribution the to quarter of contribution mix. Fourth our biller quarter, adding actually year-over-year XX.X% driven in growth transactions throughout for XX.X% quarter, This period, $XX.X primarily a key revenue transaction our the billers profit surpassed prior-year in large-sized by in new the margin due the during profit launch of increased XXXX was from was and increase quarter the

by expected launched The adoption was newer growth higher increased had than were driven year in the earlier driven First, incremental by billers initially the and we quarter. transactions transactions transaction with saw during we success. from the growth seasonality that

from upon transaction quarter. of to Contribution primarily who contracts. growth in period, benefit of we was in quarter billers mix. the Second, modestly $X.XX, saw $X.XX the from was their fourth were from realized improved the for due biller profit third, per billers some And which strong prior-year down pricing seasonally the we renewal

marginally administrative X.X% million, of in year-over-year. and the general savings stated of realized employee the primarily changes support mix, to significantly and to contribution profit growth development non-GAAP XXXX that payment on was due influence diminish up Fourth the quarter increase primarily we mix, and increased in $XX.X up utility control, XXXX year-over-year. basis. Fourth adjusted adjusted Year-over-year can per gross variables profit biller the quarter cetera, gross past, in transaction the outside payment contribution profit fees, non-recurring. quarterly As expenses marginally costs The quarter amount, a expenses profit trailed of operating are and and XX.X% increased marketing increased research million, and due as et our sales CPI, card and was an costs. we such during we in expenses, increase $XX.X to recorded net network average related to customer growth,

pipeline increase related increase We expect converting marketing of execution sales strategy our on in bookings backlog. onboarding the as continue expenses to and strong our investments strong to to resources we to and focus and our go-to-market

was see for income XX% of the X in Additionally, prior-year that net to provided the quarter, up performance $XX.X very This the contribution $XX.X million million, $X.X we record including or compared share, $X.XX million profit some to third EBITDA guidance increased of year. was XXXX factors. per Fourth quarter XX.X% XXXX or in of we planned by $X.XX started quarterly in share compared income $XX.X XX.X% quarter prior to compared the non-GAAP primarily quarter hirings to was originally per contribution million XXXX. period. Fourth strong hiring key profit, we net had or adjusted fourth previously of driven the a non-GAAP

XX%. measure we our strong And to than the here the to of grow. Related XX expenses. less benefited earlier. into we account hirings taking This business due the variables our it demonstrates coming First, and conditions approximately adjusted is margin Rule XX. as profit seriously, in we EBITDA very growth in third quarter, have highlighted resulting contribution we were very exceeded transactions this, our these second, benefited Rule the for team and lower which operating us, ability we adapt operating is the quarter, our to increased of we to in unexpected a also and inherent market fourth to closely. had from leverage we consecutive quarter the This in continue the monitors expected changing Even take at reasons believe exceeding

billers. in as transactions and Contribution came new primarily to X. originally initiatives. to profit well full-year XX.X% driven existing will transactions from Slide Turning higher also year $XXX.X financial the our from for summarize as increased to to transactions growth XXXX repricing increased I XX.X% full which $XXX.X expected. million, we than million, increased billers, increase results, Revenue due in by XX.X%

$XXX increased resources higher income expenses profit to to per approximately We gross prior-year non-GAAP $X.XX net increased as strategy. Non-GAAP $X.XX to non-GAAP per X.X% increased or expenses share Rule we net profit the due increased income $XXX.X million, was compared in execution the exceeded $XX.X of to operating on of million. and share, Non-GAAP go-to-market continue EBITDA operating our $XX.X increased ending adjusted of period. XX to the for million Adjusted to primarily $XX.X or up year XX.X% gross expenses. million, XXX.X% adjusted marketing year-over-year, to sales due of at full primarily Lastly, focus net XX%. the million

EBITDA. the adjusted fiscal of million million 'XX contribution We representing that incremental through in contribution XX% flowed increase, profit are to to profit year proud $XX.X report $XX.X

and comprised cash generated Slide have primarily million million million of $XX.X $XXX.X used discuss The compared and We $XX.X primarily end ended company internal our quarter activities, $X.X with sheet the and The was currently on X. from growth innovation. use not to position million $XXX.X million fourth of to increase of I'll capitalized offset QX debt. cash 'XX. cash used drive balance equivalents investing does software Now at of any operations, in by liquidity

during Our quarter $XX flow generated the free cash million. was

employee-restricted fourth end sales the expected X% the outstanding $XXX December average QX extent, of due the to at of stock at million of We diluted end largely quarter some of the Working of the quarter range. capital XXXX, to approximately during of an as approximately was outstanding from 'XX, outstanding days 'XX. million, shares within days million was and, QX to XXX.X options. exercise due and XXXX. price shares XX to of QX units XX, had diluted increase increase compared XXX.X to end XX end Our at the vesting of at days was fourth improved compared stock our quarter the stock The

and I'll profit the contribution revenue million. turn to our and in QX is for range 'XX, million, XXXX into our revenue, million $XXX $XXX million range in $XX 'XX EBITDA Slide progress to guidance date for on of to adjusted $XX in our profit, to adjusted million, range the QX contribution Now guidance full and of million the $XX EBITDA year $XX of to X. Taking account non-GAAP

mention prudent continuing as approach discussing Before full-year to follow exists. we that during still guidance that are environment guidance, same to I we uncertainty to followed the want XXXX around the macroeconomic

in $XXX up million the the currently growth For end. profit XX.X% revenue range million, million, and range at of high $XXX of we midpoint to full XX.X% year at and XX.X% at million $XXX end. to high $XXX in expect midpoint Contribution XXXX, XX.X% reflecting the at the of

also takes taking quarter public. this the guidance hiring annual was accelerated the of representing increase operating operating growth awards expense fourth we a for said largely into prior in the part years, of Please pace merit a profit and our we control. contribution and in in had million that XXXX, seen XX.X% primarily at in as the beyond the number on to reflects a profit revenue $XX XXXX. for a million pick wider we before, saw we as slower metric. And the in expectation range of expense the EBITDA primarily fiscal growth are end. the approach growth our factors X cautious is adjusted Accordingly, this subject are that to which saw Our up we year, reflection is XX.X% the range than midpoint going have finally, of continue because, for It external increased to $XX at note, will the EBITDA high our consideration contribution adjusted employees

normalized this period operating to rate that more growth expect passed, in has we XXXX. Now deliver expense a

our revenue During full and provided We metrics. between targets The provided grow EBITDA the today primary dollars both that our growth guidance XXXX for we we grow our at EBITDA have to long-term approximately targets. annually earnings financial long-term to adjusted last X these stated XX% to or year annually. XX% adjusted call, and reflects XX% for revenue goal

leverage. In believe to again we to on financial profit down remain expenses, results. ability we depending footing to a strong managed profit, XXXX operating Rule adjusted operating Throughout end strong on for secondary our today. in year for This our our and of strong company bookings And solid XX demonstrated metrics, remarks basis. generate final Dushyant this we in manage questions. operating backlog. the an expenses, to on visibility, profit do as we contribution throughout everyone, positioned are enabled can exceptional We we contribution dialing necessary actively we given growth. enable for quite Regarding full Based a so quarter now open fourth to well EBITDA, this well the annual it we continue call XXXX, and we year XXXX. Thank the you, reported up with I'll believe for contribution summary, year your or and plan before XXXX, revenue, them XXXX, to cash and substantial consistently and which back consider is to up we turn how us attention trending us

Dushyant Sharma

I'm guidance macro the believe this that out together environment expectations original difficult and full XXXX, with. first the just around despite our and covered time our significantly came for quarter business our dealt Sanjay set proud we beat of our year. which for performance team last the Thanks, resilience we Sanjay. same year XXXX. illustrates the had I the

open my also note, our want now As dedication. That our we line based their and concludes continued to On good the the thank on for questions. the earlier, for up members feel guidance about I remarks. of prepared all that team efforts backlog. shared of I'll strength

Operator

is question Davis James. the first of line from The Instructions] with John [Operator Raymond

Madison Suhr

get Madison Doesn't client XX% is any sense to growth and given just trends have past? revenue and new growth for But here. for new of the contributed Obviously, the just wanted planned roughly guide. sales on conservatism. to in a include to as strong it the seeing. backlog can JD. wins help potential understand of This much for on trying client us the how I you clients kind start goes I'm you're growth calls the upside understand new

Sanjay Kalra

continuing time customers are in are happen year. those and well. The numbers just as I that growth planned, the say these would generally say They I But last expected. seeing get Madison, that would planned clients And appreciate I are year us as client clients, our I of range at that's close I would not the midpoint, a our the XX.X% comprised will the we trends we disclose growth are mentioned. these The we And have say implement saw year-over-year. question. growth factors, would for should last new the what all to think X this a I of X. and the very And as generally year. implementations guiding the existing we year, this new say the of high do the the contributors are end. to if I breakup Dushyant no win pretty growth as they year are on as in year, this we ratio you high and end as similar of mentioned, of which think at in XX.X% both are this

expectation XXXX. is on our the client we of winnings the -- end till based of is had revenue All

Madison Suhr

talk position, your now. in that generating sheet, just and flow you capital And any guide cash just Got no on about how cash worth you mid-single-digit free about obviously, could thinking 'XX my strong Can nice percentage noting helpful. flow here capital it's talked allocation about pristine possibly you. philosophy by wise. follow-up that, you would give revenue are from cash then guys be just debt, the helpful. you color allocation. balance Yes. year probably last you And on Obviously, then as initial outperformed That's

Dushyant Sharma

balance to discussed grow very Madison, Sure. spending economy to since million invest or But of we spend comfort results balance for for We sales us capital prove a a position sheet. for gives the be us past. so for biggest $XXX are to best about. organically. avenues of marketing is good in very a for the lot pipeline for current we sheet build great remain unchanged And outer our have hiring opportunity and we opens us what in in a us cash years. priorities glad and want a the to allocation have the can to to the to lot the growth on think cash better team in

to additional any fact, which itself, to team, spend need year to current year's than this, build sales we In I happen us great revenue any rather trend growth But we of QX is direction. we this would money. Other for happening, pipeline. excited our plans not is sales currently more team highlight cash or do have right to do are headed Starting we are for measure other plan right from the which a additional think the not and in spend bookings. we invest think expectations that sales the in we in saw and I make and that --

Operator

with is of question next Baird. the Dave line The from Koning

David Koning

first you a little job. question, end guess my over 'XX And nice of the gave X,XXX I at you -- clients. A I think, Yes. gave,

in per I how we number just 'XX? of last per back much of mid-teens I revenue could if year, give growth little client kind end Did into grew don't much think of revenue like you at client saw us presentation, XX% [ the grew. So clients but growth. and then that a and client ] maybe give it the could bit how you

Dushyant Sharma

-- annual it's and that's in And X,XXX. be be will number filed and number number shortly. new our we will the an disclosed, Yes, XX-K David, the there

the from the number XXX. prior And last you that to increase was XXX a increase saw. it's So

to I think really per highlight, is at also kind is the an we optimum definitely, of revenue not client, metric pace marching I I getting would are revenue would say, earlier. the per David, is, marching than most So better. Interesting accelerated look we at. And client were

are we are Given large from well the or as and kind the into, small we medium-sized getting of the clients as customers given various size getting verticals. enterprise billers

Our mix a few different is it of than years ago. becoming kind was

client look see at be So to but trends. looking easy would and metric is per revenue just itself an metric, per at not the I more may growth billers the biller. get that think I I than it say right relevant revenue that's of

David Koning

you. Yes. just that's -- Got No, I question. that's a follow-up And guess helpful.

the become at quite a few valuation we metric. earnings you a quickly profitable should like as You've I'm think earnings? -- wondering, so last that how in thinking years. like And have we we tax And now to start look about when just use we can something look at rate do normalized about or can

Dushyant Sharma

that's you David, that. a great for Yes, comment. Thank

want going we think forward be as profitable, are and to business be we the strong profitable definitely operating well, and We given this we'll leverage has.

year. year, In of small NOLs all this which of a used we kind left, is tax will profitable, are very rate, portion next exhausted we and terms be

the going So in the the earnings, XX% counting for rate should planning for forward, use approximately states, rate think which tax suggest closer the is tax I U.S. you rate. long-term use statutory to you I would

David Koning

sense. makes that Yes,

Operator

line The is Sachs. Nance Goldman Will question of the next from with

William Nance

particularly if called on And quarter of client wins number growth, the number much? haven't like unlock maybe in are kind across wondering click you you additional where of optimistic guys maybe you're getting double traction seeing maybe Dushyant, verticals you or of mix a in of incoming could some any could verticals. out played there historically a clients. verticals you increased the increasingly as Are that where

Dushyant Sharma

Yes, is wherever whether kinds, their acquisition through that needs direct there And there actually is comment that and to workflows road we perfectly a actually that. a from this complex they a what perspective, of or payment pass IPO point. are where bill, coming for automate of the payment, customers from clients is of want to there same, our that the channel Paymentus. a all is point is channels, there business that's show, we the our of great wherever the various and it's at observing think the platform fits and Well, bill had during is payment partners a our I

a vertical traction many as I verticals. strong remains are So but other we us, verticals, different in. in as for result, we a named, are all Utilities growing seeing

we we So it's actually. the the excited payments of verticals, which so the just important becomes payment entering automate are things payouts acquire an into even as we interesting other some disbursements about are in, flow noting other that we're not very or our and is through platform. that could is, future one And out, transaction

well. that So as about excited we're

William Nance

just Yes. some IPN the mentioned with Appreciate all term. more about the could seeing progress then just on pay. that. you integration opportunity And maybe there the you of comments, talk kind bill and of bank long Maybe

at the be I in bill think centers Paymentus banks. a lot of opposition kind to traditional of people would pay consider and companies that like

market? strategy do playing incumbents see the Are pay there to you bill of work over So do to of playing of maybe out closely with some kind the more opportunities kind kind in space? bank And the that you specifically how see out IPN how time? of the

Dushyant Sharma

Will. you, Thank

this think scenario. I an interesting is

like right network, we it business And liken the you to on various I what onto analogy enough beginning and increasingly is from billing companies addition the platform from and network, if each the billers -- valuable all the of the its that in we built if each cellphone billing companies to pace, I at of and think the or like you can signing tower. we we the own generate verticals to felt ecosystem are a the if the sizes company, will, faster do of network, a billing have continue of the we where have the billing cellphone network, increasingly we becomes revenue cellphone themselves. and the biller company

at real-time bank has have -- any -- And stop payment. in maintain the since or bring like network the and this we we participate they've not So base, desire believe banks to leader we more consumer they that continue believe for the and or providers a want the space, bill means and or their losing the what any valuable becomes or are provide is to to even are want attract Paymentus, space, to the customers customers in customer this to who is volume leader we that more that billers, they lost more use to we IPN. least other if third-party aggregated who payment historically as

of some network. bill eliminated payments instant in evaporated that through between the the the being existed being or payment payments bill consolidated direct ways is So, chasm to sort business biller or reduced

very excited the frankly, why we and how more more about progresses, of will So winning. type the and the And we customers start evident are are winning future time as become we're here. to it

William Nance

Super it. interesting. Got

Operator

the Research. Thank you. The Darrin next line with Peller question is from of Wolfe

Darrin Peller

on a It differentiated understanding on you how leveraged time more. guys mention a on landscape this this. a because so. in think just more competition. and yourselves receptive for overall Maybe Maybe more the if touch more give felt I like on to minute, prepared it clients your little Maybe times to just and heard as have obviously remarks. looks been I pricing on couple job you little bit Nice us you can do add a of have Paymentus to where generally goes

or just perhaps maybe incumbents more if startups. color any you've So differently anything do seen on any new

Dushyant Sharma

Great Darrin. question, Sure.

demonstrate we inflationary wanted partner period, come We I we dissipate to approach quickly with we pain wanted up the the long-term think or work it took may -- that that because our point and understand rather quickly, well. period was inflation the high as from to has we just are inflationary our the a inflation clients. perspective, during

understand in worked we great a that they addition or great a approach are to wanted a support bit well. like give with you of platform for So offer. partner working a to to And time having we customers little that extremely actually

So, to point through were were we the able customers walk publicly. the suffering pain we

customers obviously, As data, you inflation the times were were show that out called impact able renew privy to we were detailed pricing, to, the all able were the that facing. know with the rather to multiple combined customers We pricing, being were data we understanding. update were about the we

our where and are contractual we pricing where with capabilities support. exist about arrangements good feel of technology client, we capabilities the the So, strength our the the with platform

were it So, for methodology confidence taking customer should to a again our pricing view in that to long-term the arise of could service the approach then a us. this work future, and us like gives situation well adjusting and

Darrin Peller

cool one the just [ leverage ]. That's side. on operating more just Maybe

bit you your expense can give operating expected and 'XX. the more little us If cadence a color for on plans

just color more perhaps on think little think you need invest. a where you to I

Sanjay Kalra

can, full think, that say this model year, giving guide the X and we saw the would metrics. year, as year you don't the such, it while looking was are at you out, for growth we OpEx I for guidance but I X.X% next other that

you'll You I in will is what think, OpEx would currently provided. looking grow see That's mid-teens. that come, expected what the to at we

Darrin Peller

Yes. Yes.

Sanjay Kalra

to did terms approach OpEx, what last we what I more to growth. coming to growth prudent of is outer spend this taking to are growth. planning need spend of bookings needed be earlier, spent to This mentioned book year. years for really a We're from actually we majority we in We the do. terms in OpEx we conservative as for is year's of need year's And need don't not

be sales main So spend the spend of your terms be, majority will in in the of and will marketing. question, where

marketing. That I and highlight sales is think and And our The want go not mainly Majority growth -- be growth I manage one to also very business up, OpEx but of said, spend thing. will significantly. G&A will we marginally in nature. the discretionary in carefully. R&D

trending review OpEx how regular based of is up the In is is trending. and CP a how down and dial fact, the can on there we

leverage operating strong. is So

saw plus to It are by we can to choice. not but planning happen that XX% again, line dollars. incremental like CP bottom dropped do of year, we the you last As

way So, Fargo. think way the is next manage can we we of a position in are from Andrew are. I the to question is it with business Wells The leverage progressing, Bauch we but be operating glad

Andrew Bauch

but a know Just that sales on wanted and also remarks function prepared backlog, to you then put the a point Sanjay, in you now the converting was growth said mentioned just marketing I priority. the years hiring is in it a your the highlighted. finer out particularly that plans, that of you extending in

can qualitatively, we on investments as So, these to of in a your current sales based kind for sales we be And just should growth do of marketing they and 'XX? you ultimately finer how anticipate kind then expense go-to-market like on marketing expecting like if I plans what come quantitatively, strategy? your augment guess, put point and

Sanjay Kalra

those here, terms finer Yes. how Andrew, a midpoint in we they are renewal, quantitatively, at -- do to and to sales are as would OpEx. few go piece benefit they piece a And is come specifically last but will year. would piece I point where example, material or at you go I costs, can't for significant remaining say, said, which give year, growth insurance of of marketing would trends a know we G&A. And couple a up, or the going good And from on for depends the modeling piece I flat perspective, not I bigger up, the R&D we things would market also a XX%, don't put I costs, got for think, they come is up? G&A think and stay the renewals, significantly. around say of of the D&O of this go But a marginally and I if percentage

and of on it So, take sales biggest remaining marketing that the these increase piece X. in and

modest say material generating I implementation. pipeline backlog for for marketing, how versus growth would sales smaller piece or and piece for years as additional implementation, well, these within things X pipeline Now have the of think I a to would portion the backlog outer the about if go will years for much and for outer go in

Andrew Bauch

is go-to-market qualitative in piece, And like the anything there then strategy? the changing

Sanjay Kalra

One significantly thing and would last newer are more in significant years say, continually our traction there, we I Well, can get We've changing. the go-to-market we to where or diversifying are which looking into good strategy there. a and good X more we in verticals basic seeing need progress at, verticals, into are not made there is get into. progress,

to accelerate, other in pace than our there So, diverging into strategy is our no new verticals overall. But continue. change would that,

Andrew Bauch

guide follow-up And Got it. the mentioned that Makes you you the was slightly my revenue gave. sense. was, Sanjay, than wider guide contribution that then

dynamics. type inform profit? the the are around that would all biller, of XXXX, network you macro mix range into contribution out us it I mean, far called uncertainty anything seeing or you lot amount fees, a You around thus to for and the lead be wider on that

Sanjay Kalra

current at are. Andrew, last say, are and at X So broader in interesting for because analyze the we what given profits is look look at are a quarters, exists. Interestingly, trends, and noted we've change would for that just all we contribution year, very not aware of that's the among, full all much any time learned we that's visibility the in we've specific What the when we the QX better full approach, quarter the year here. I quarters to try question. than versus guidance the point We degree taking is quarterly of any our variability the a where all

revenue 'XX revenue see you'll other growth, And quarters. QX exceeds growth. revenue mean, QX but example, 'XX in For similar QX growth. exceeds was changes I the it growth growth CP 'XX

on can of profitability, our So, CP trending. OpEx the variability upon forecast. But line impact to quarterly not CP calibrate EBITDA, most we that and bottom And the is manage the depending to said, does difficult metric one the our how exists. variability it's

the key narrow Hence up we as for, we limited, this key a than so take down. Maybe was diminishing it mainly into result, Hence, metric time. is as about a are profit And this where mouthful, XX. calculate provides target contribution CP you to we a would manage insight dialing approach there it as a a say factors. some to Rule we by So, to OpEx taking line but more prudent is secondary of metric, utility perspective use bottom and or of than hope that we rather many I -- this call that the maybe or and also a can was ultimately, thought is asked it's utility it range how through think our up the metric. over

Andrew Bauch

helpful. it's No,

Dushyant Sharma

industry, I Sanjay service even the nondiscretionary but OpEx own also, rather to that we earlier what everyone though add, the actually And growth, XXXX mentioned is actually, we if in OpEx was discretionary. internal XXXX of deliver may context work our in nondiscretionary, that the knows

So, because able to we up are and the the we leverage have. of down, dial operating turn

in despite the So, guidance, top good the end in and the and you want communicate. know we that's the bottom the to variability business. message of We the trends essentially And feel the the about CP.

we how how grow to business. feeling share able capturing and the good we We are are are market about the profitably

of is All right the direction. in that moving

clear. and Now, loud

Operator

question next JPMorgan. Tien-Tsin The with the of from line is Huang

Tien-Tsin Huang

clarifications. of couple a Just

the you or for did might fiscal year 'XX And of and magnitude together curious -- year? NRR how came Just growth in versus bookings you also, the benefit backlog different? and did there. Just disclose share 'XX the how that be on prior the the

Sanjay Kalra

have Tien-Tsin, numbers disclosed asked for. you for not the no, we the things

Tien-Tsin Huang

front... or Okay. Anything just bookings share qualitative on the to backlog then

Sanjay Kalra

Qualitatively share... I can

Tien-Tsin Huang

Yes.

Sanjay Kalra

very our our and the expectations, all us at decent quantitatively, QX not they we quarter, and are And pipeline, we strong say at direction QX exceed are headed way. well very that I a that's delivered a would marching I that, for very are Yes, as to sorry. only backlog. we I with a they going are right NRR -- in giving growing say, exited we in are as think bookings confidence Yes, say. for strong pace, a would of would we time, good the proud also the, year, whole the I the very same given And

think and of I So qualitatively these providing metrics are us encouragement confidence. all a lot

Dushyant Sharma

we X And out -- year-over-year. in the bag are That's of strength point backlog guide all that of the the feeling add the for point primary And enough we based may primarily and growing X to reasons on we could actually Tien-Tsin, well. I good CP. wanted was matrices, the any that if key as the about top is that secondary one the deliver the XXXX of that the of X and XXXX being exited I to end that, with

Tien-Tsin Huang

it sounds That's the why way. question. No, Yes. I I'd that ask thought

math. simple quite my my running in fiscal quick drop-through on strong then margin XX% EBITDA It's at 'XX, 'XX. looking or around, incremental Just follow-up what, in the around was

depending hiring where incremental is thinking is come margin primary just profit you'll on 'XX? in adjust through like to you 'XX I it know But in drop-through sounds sure, make lands. So will that that there or versus called some out. about OpEx difference that contribution the

Sanjay Kalra

That's right.

Operator

The next Citi. question is line of Lu from with the Rebecca

Jieli Lu

I update to JPMorgan us What have in think Can think expected year contribution a partnership? X an on do we that partnership you now? pretty XXXX. meaningful we or ago, the give a

Dushyant Sharma

Thank you, the question. Rebecca, for

And with great -- our we And Chase. XXXX very in organization. with proud proud looking great partner, a going all a great with for to They're Chase. partnership very JPMorgan forward are a well it's are our areas. We JPMorgan extremely

as strong go-to-market partnership us. factor to We for also looking and strategy, frankly, a think our become big that a ecosystem, partnerships are mentioning very and forward we as about you have can -- was also Sanjay earlier, increasingly

other JPMorgan So on. us, but partners, is and providers a Chase software for strong have so fintech we also vendors, partner

Jieli Lu

conservatism impacts we been Okay. negative slightly -- And inflation. declined had And the or also that year I anything at the it different are assuming looking the a about? profit else might profit range, Is want well. outlook, in a it decline as to we be ask XXXX thinking about The top because there end has at if contribution we're margin from way. of not some the last even we're just

Sanjay Kalra

this. due they've customers So, I'll is -- X pieces X, individually. customers we -- or discounts customers pricing bigger because customers, sorry, Rebecca, share X enterprise definitely smaller to as get, larger transaction different onboarding than are mid-sized volume -- answers to got much larger there transactions are base. are Number there enterprise the they or

long-term they matrices our profit our dependent growth. to margin growth much secondary as because and EBITDA really and which contribution call a on contribution as So as result but we don't strong is I given operating the profit contribution that, purely that's totally growth model, our hence softer little our or bit, a of margin leverage think getting are revenue matter fine, dollars

at a it's how adjusting, is easily managed or OpEx. up question So, by CP that of going. over But to that can end dialing margin good analyze be the day, down the the

doesn't our line. it bottom to So, really matter

long-term our about, could there XX% expense that have you our think we is be our could model, see And manage i.e., better. which softer, will also line percent getting line can there's is still would top if upon and customers EBITDA depending dollars situations, think EBITDA I would we CP talked probability, to a because better bottom in think current an if what growth XX% better, growth margin I adjusted I which EBITDA. annually, kind gets we CP XX% get, upside to of get

we trying of right company. we result to planning contribution the that really But a prudent are understand not to secondary. are Although might profit produce not margin just And over optimum approach. to applying what are analysis get is there I'm I now, think say and contribution an

Dushyant Sharma

And concerned if contribution less deal $X That profit a point we transaction has biller mix at the we scenario say say, your changes I profit where exactly play, sign Sanjay for a a changes imagine million. alluded we may what that each also is. -- thing, more as -- biller are to transaction is going to, large contribution one where as and to larger have are each of, comes

is that they're we efficiently we've being ends quickly net platform, be on We biller are about. how more concerned very which and once about good the the operating how that talking can from margin our been up will and what live leverage serve on operating customer based

Operator

concluding for questions like to remarks. in I back no Sharma over queue. There further are the would call to turn Dushyant

Dushyant Sharma

call Thank the really Well, thank great appreciate you, you. everyone, today. Have the a time. day. for I joining

Operator

you today's conference participation. concludes call. your for Thank That

your disconnect now lines. may You

Paymentus (PAY) 4 Mar 242023 Q4 Earnings call transcript