PAY - Earnings call transcript Q2 2024 | Paymentus Holdings, Inc.

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Operator

Good day, and welcome to the Second Quarter 2024 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.

David Hanover

Thank you. Good afternoon, and welcome to Paymentus' second quarter 2024 earnings call.

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

Following questions. our take prepared remarks, we'll

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

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

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

Dushyant Sharma

David. Thanks, we saw revenue, quarter, our EBITDA, adjusted and exceeding record all contribution profit In expectations. the second

of growth. Contribution our our $XXX.X million, EBITDA ahead year-over-year incremental year-over-year. all the to These and long-term was revenue contribution once were to was targets quarter XX% profit Almost $XX.X dropped profit XX% adjusted EBITDA up Our half XX.X% XX% results million, of adjusted XX.X% for growth adjusted year-over-year. up and EBITDA up revenue was million, of $XX.X dollars which the line. XX.X% again was

top-line pleased we also grew with XX%. performance, very over are this We given

operating of the XX, and leverage, result at our Rule were growth a As of ahead well we on XX. based

remainder long-term share, market strong feel It's to confident using and about same able last performance a high-level this quite recall, success. the we durable with metric outlook have with as pipeline, exited at our year and built our growth, second had similar we the of quarter. We addressable expand while expand bookings, our leverage. time, and our market backlog business consistently the may total quarter where the we been strong that you have As and operating deliver for profitability a innovation gain remarkable enhance solid result, framework,

talk remains platform advanced strong while their customer Demand looking by to operational platform replacing and Let for ] serve our our to performance their to proprietary them unleaded platform. for are about our lowering and the now [ processes and a Clients with allows Paymentus' cost me that quarter. differentiated improve ecosystem. engagement robust IP for experience, continue

advanced be effective offer we our technology costs. ability the with platform, more clients So our to with less

mitigate a like In faces addition, these. the to broader model as transaction-based enterprise we have designed the software past, have challenges pricing we market times the discussed in in

Our generally great get clients times get served approach we payout client a a our paid well -- transaction. transaction per on paid when so times. both priced This platform has good a is not basis and when us initiates in in or where

In aligned. addition, both Paymentus this model provides are interest parties directly clients partner a with of great in the

the we primarily company which very have of outsourced not to our technology on that result, and across to public of a approach high-growth attractive seeing clients strength enterprise verticals, traditionally pricing profitable, all continued clients momentum, all those a are based any As platform, are vendor. profile, innovative including

feedback the to this booked first year investors, also we the wanted ahead on of this quarter. received quarter, were and broad we a we clients XXXX. Based list we of This last well for combined time provide remainder When we strong from we with represented verticals of period are another of our and in where bookings. quarter, delivered by have positioned success significantly diverse

clients like our to Many healthcare We add partners channel large have signed property credit verticals. services, enterprise of we bookings, clients. And unions, various and in utilities, above across banks, education. verticals much clients are government management, identified the the also continue in telecommunications, insurance,

that addressable and industry already with an these our towards to huge the share momentum During signed and quarter, partnerships sales insurance, efficiency a combined believe We improve has continue total add healthcare, partnership to telecommunications market we in new partnerships, extensive ecosystem, government our growing our in verticals. market.

activities. to on Now onboarding

to to corresponding ability and our continues onboarding onboard particularly Our clients enterprise-level and large also complex workflows. sophisticated velocity improve,

During thrilled substantial clients. a we to are the have number quarter, diverse onboarded of

offer this our another allows platform all services the do and to us yet are able flexibility strength verticals, because to technology. facet of We our of to

onboarded Many This credit in quarter, healthcare, banks these verticals and clients were transportation of unions. insurance, logistics, government implementations. including telecommunications, and services, clients utilities, we large

turn We we financial are Sanjay pleased that efficiencies growth with the over with year-over-year for that, onboarding, terms and of in onboarded detailed let clients our remarks and number improving to performance. both implementation of revenues client Sanjay? me on it generated. With of

Sanjay Kalra

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

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

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

to X. Turning Slide

For top exceeded results quarter XXXX, produce end our think delivered quarter of the second demonstrates our overall such of business. the guidance We range. ability financial results the we another of that of to our strength

revenue quarter million, second XX.X% contribution EBITDA year-over-year; million, results Our XX.X% XX.X% $XX.X million, up profit $XXX.X up year-over-year; included year-over-year. up of of adjusted of $XX.X and

significant strong guidance, year the to second and mentioned discuss and and exit customer demand the we with Dushyant XXXX backlog. our adjusted positive to a experience Based drove performance, contribution EBITDA I This XXXX, quarter. the business strong shortly. quarterly of which which us on profit for strong bookings, We activity our our allowed trends revenue, in are quarter expectations the will just full remainder raising continued

XX.X% quarter, financials Now million up review in number in let's The second second $XXX.X quarter grew to transactions the detail. of year-over-year. our more Paymentus processed

As expectations launch higher mentioned, QX revenue transactions XX.X% Network was up our Payment sales Instant IPN year-over-year. and from driven original was by increased the business. includes $XXX.X same-store which new our all billers drivers, in growth of This or of billers, of activity existing million, revenue ahead from was our which

accepted year-over-year, strategies provide to they per from price $X.XX value existing our that adopted and believe and to we and $X.XX which the customers, due us. pricing our we to the service increased in average and were Our billers place exceptional new primarily transaction customer reflects by trust updated

existing up second This base. period. Contribution the customer in and mix continue the XX.X% was we profit of XX% add year-over-year. flat as increased year Contribution to Second quarter to for prior quarter per billers expected to increase contribution contribution from year of compared was to $XX.X the new period transaction and our the billers margin prior XXXX higher also the transactions XX.X% billers, profit enterprise profit launched. to the compared billers quarter than in reflects large which for increase the launch million, higher was $X.XX, volume was

saw growth. line we in quarter, growth growth. that with second transaction profit transaction QX, revenue saw the In contribution with line was growth in was we the During

the drive affect metric, quarterly payment may payment rates business remain or prior treat As earning revenue our as metrics we that and primary and mix, as control, past, the revenue vary noted And a contribution Also, outside our contribution amount in can profit growth the on areas adjusted in our secondary we've in variables focus in increase how calls, substantially therefore, while and basis. EBITDA as quarter-to-quarter. this we gross on have the average are a we such profit strategies. changes said

gross adjusted was up profit quarter million, Second $XX year-over-year. XX.X%

agency increased of events $XX.X trade quarter higher to up marketing and hiring, ahead non-recurring expectations, modestly for for activity business primarily expenses, increased The events. sales shows operating XX.X% increase due certain and was increase and expected This fee go-to-market resellers. to was by Second our increased driven million, reflecting expenses expense marketing and non-GAAP year-over-year. mainly from increased

million per period. share compared was Second to income million quarter share $X.XX non-GAAP net income prior $X.XX $XX.X or in or per net non-GAAP the of $XX.X year

million, coming while changing to as income Second increased the EBITDA million Related improved of bank in leverage earlier, ability due for to year EBITDA prior continuing factors similar quarter quarter EBITDA quarter. effective year. EBITDA believe came approximately proven of in to quarter, the also demonstrates XX the the operating to business the same which compared second cash prior in conditions, exceeding quarter. the prior to profit at consecutive the the compared XX, to adjusted Adjusted in all $X.X performance, to stronger our period, performance in $XX.X the positive XX. now of XX.X% to result cash contribution was of our the strong We and fifth million XX.X% quarter for year-over-year of and grow. Interest we talked of exceeded about $XX.X we This the a the represented prior adapt $X.X the XX.X% market quarter balance up the deposits margin have management. our is inherent was This compared adjusted adjusted year. during again I together from in was once combination Rule Rule to our million

million operations, quarter second of the sheet I'll was $X.X discuss have balance $X.X first on primarily to activities, comprised company at compared capitalized end million free million Slide investing from and generated increase million million X. $XX the does ended with $X.X $XXX.X The debt. our is total the The in position of XXXX cash Now quarter XXXX. liquidity by offset We used of quarter software. generated of during flow not primarily cash The cash for million. any $XXX.X

of shares diluted during the quarter, of outstanding million sales prior XX increase the to the from approximately quarter. end had approximately second first $XXX.X at second of quarter XXX.X capital the days Working Our comparable million XXX.X quarter quarter second outstanding the million an first the We days. days million, diluted end end during quarter. of to the of at similar was was outstanding shares $XX.X XX

turn for the on guidance third to quarter and our XXXX full for non-GAAP X. year I'll Now Slide

I year discussing last have we to we want the mention to same follow that continuing and Before approach that prudent guidance this year. followed to are guidance,

end. revenues year-over-year high For This the growth quarter quarter the at range which $XX improvement XX.X% prior million we to end. high the an is $XXX high from at represents is to margin year-over-year margin margin end. year's midpoint XX.X% XX.X%. and million adjusted And XX.X%. Contribution growth million, at to high growth from adjusted the XXXX, an growth range growth of prior is XX% the year-over-year EBITDA a improvement This of to to third of midpoint million, $XX XX.X% the of from representing end. a at and XX% third at and EBITDA adjusted EBITDA the quarter the $XXX of profit million, at representing rate in rate XX.X% XX.X% range midpoint $XX at XX% margin the $XX third midpoint expect year's million the and the be at This

quarter. quarter and to business the our to with outlook than Along insight adjusted for EBITDA we third the margin. also Given better profit implementation want provide contribution base, feel our in did improving in growth related and rates further we second even about I our backlog the overall guidance,

are we enterprises. customers the business our to As economics volume large receiving request grows, are unexpectedly, greater larger interest often where open support these it. from we Not inbound deal discounts, which

large time In as order increases desired Furthermore, large average tremendous while leverage allows This our is addition, profit our these ability adjusted us offset OpEx differently, more customers are adjusted incremental increasing. we customers. a customer relative operating typically reach to for biller is per have book EBITDA. contribution strong Said spending our declining, recalibrate onboarding the to attract volume and discounts efficiency size to in EBITDA. than to simultaneously by

a have of revenue range we XX.X%. Based expectations XXXX, XX.X%. now EBITDA the rate from already previous expect range from year for growth the of was versus from increase midpoint in the in an remainder updated representing of margin in at XX midpoint, up XX For of represents profit the our the updated represents and rate XX.X%. the Adjusted of range increase of at of the represents profit high reference, $XXX million now second XX.X% Rule represents growth relative to XX% This year This the XX.X% previous million at Contribution a from 'XX improvement the guidance million, $XXX adjusted now and the midpoint the from improvement annual an growth our The at year. the the from million, the and the at margin half adjusted $XXX million XX.X% first X% $XXX to we to in to made at results This the million, of of EBITDA year, contribution scale year achieved quarter midpoint. of prior to $XX for XXXX up progress XX.X% scale $XX midpoint, EBITDA of XX.X% prior an guidance. updated The improvement prior on on XX at guidance previous full the versus the our for end, X% guidance. XX to midpoint implies an in midpoint, an XX.X% our improvement we guidance incremental guidance the guidance. growth margin our XXXX. midpoint a

X XX% we adjusted calls, adjusted goal and our dollars both our growth We bookings XX% to past we revenue During primary have stated than long-term reported of The and guidance and strong quarter revenue closing, were to from that metrics. XX% adjusted full targets. In financial quarter the of that EBITDA these targets In build growth. at our results the on we long-term first reflects expected. earnings grow higher momentum we EBITDA of was that for few provided year to expected provided excellent second gross the XXXX, in annually EBITDA, achievement resulting XXXX solid continued annually. today our quarter, approximately another grow revenue, to between

all for today. Due this, visibility of sizable we the considerable the well Dushyant we with for remarks And backlog. turn balance attention for to a Additionally, it for call of are your the we final back to and ended up have before believe open now we you XXXX. Thank positioned questions. everyone I'll quarter

Dushyant Sharma

Sanjay. Thanks,

talk take about Let a to me our execution briefly strategy. moment

well. really see from is these can results, business doing you our As

as revenue revised for they year. guidance IPO CAGR since long-term Our this growth do and exceeds for adjusted our our our EBITDA targets in

about the We also business. are future prospects excited very the of

in-house solutions. who capturing are enterprise historically customers and winning share We large market preferred

combined is a replicable. partnering not However, have that profitable and balance with with have because And public we profile comfortable company and growth, #X, a technology unique high a believe ecosystem now our with they Paymentus, we IP #X, are platform getting proven differentiated sheet. we strong

for and With projections. same us outperformance, remaining disciplined of these important while stay our this is in at when it the future executing tailwinds level to time, aggressively, grounded even more forecasting

non-discretionary we we and their part you need and collect know, will both. doing bills at the as are always People good serve their companies must pay economy. to In addition, primarily always of revenues

in can their of to line up work the seasons questions. and them and and well we blue open hard I'm dedication. With that, I'll team result, just not during thank all want do clear all proud a for we our skies. As believe for

Operator

Baird. Dave comes first [Operator from with the Instructions] The question line Koning of

David Koning

another kind efforts, quarter. What's the selling XX%. selling Is of just is Yes. just And you've that guess, Congrats couple difference, cetera? couple that despite several my on great last of I I were first like And same-store big same guess, about question, macro? the revenue of about put a quarters it implementation some et after still now efforts of of together net quarters? sales is around growth the sustainable? XX% the

Dushyant Sharma

Thank question. you great much Dave, asking that. very for

trends those So The your business from pretty bookings would on is the many is, we've that clear as were quarter. the the say. trends been here all quarters, cadence and we we seen well, exit prior and question you've what The is from always I situation are backlogs than cylinders, seeing continuing. we and has are levels reporting higher actually firing since on quarter in as the been when strong as

firing So all are same we time, continuing seeing At on well. our -- business the revenues cylinders. are it's

is sheet growing. balance Our

comes are keeping a for believe good -- head. we execution in when rates, very straight pretty we are to we in a are it So position growth XXXX. And we

should the And rates bookings in and what is are the very are really that market. about And well, are is how really growth very very in execution strong. confident but the heading, continue, going guiding, the the to are good we feel is of We revenues rates growth terms we which how business are grow. very we should strong, right we are We grounded well. running generate guiding but the business the the to

Sanjay Kalra

if actually may And Dave. ahead, -- I go

David Koning

Well, ask when QX billings. profit was contribution backlog higher, to guess, be things it you're going know being sequentially really relatedly, I I recurring then, what a down despite touch I contribution I for profit are guess, Like take down to your really guiding good? very be to it's I know does like

Dushyant Sharma

Yes, Dave, good question.

EBITDA is raising So all metrics, are that the great year seasonality in growing cohort like even same At there points which which it's quarter business, say, in because points X the is the pace, basis the and raising saw the would cannot cohort and though CP, guidance another performs revenue points time, there's basis we the a for our cohort strong a as full and the are which other XXX there we is our for of in year. billers really the I full one growing the for for for really it's XXX strong we at performs ignore, you basis XXX business, of business for quarter.

a So results with tell to calibrate that that it will is year-over-year. And I comparable which way operating happening. the that seasonal CP to together think together is the secondary metric, so them a our actually do EBITDA expenses we when into we and seasonality was actually -- main it of the in margins, should comes you can work CP, idea desired

continuing I EBITDA CP say doing, and our would which better. revenue growth is primary regardless, metrics, is in So our is also are margins of QX what

expenses move good. and better by midpoint could last are did we And recalibrate they coming. compared in We fact, points CP as how is year's QX, feel in pretty basis along things QX. QX XX In as the at to we

vision. think we strategy it's It or impact And metric. long-term our pretty secondary just feel I about doesn't good a So it.

Operator

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

William Nance

maybe on wanted Great commentary another on here. some nice quarter I volume-based discounts. the to see to of follow-up

there's over changes by had been and benefit think has kind little accepted there. there's the past some been I maybe in pricing that customers the a of quarters your that few in you script

more next Like, around a we accelerate make So recent like in? of narrowing you're expect like lap to see bit sure dynamics revenue revenue should Like, little or the quarters? see couple spread between messaging transactions those quarter. and discounts. decoupling is of the transactions? X maybe little seems volume-based prices, to I guess, north the that of some if I I'm in understanding discounts It a wondering, and commentary the of kick just wanted bit growing I'm over of some should volume-based just might more converge as we the as the we the most gross the

Sanjay Kalra

of our strategies. to peak looking would process we improvement, from a we to on quarters the the pretty and was look There process few that the had to at way basis are we during and the based now terms performing that out the company. A and good work how the the discussed reaching are and I reach with on on by to pricing, is to billers the but start process. getting the saying would results, on a of our them. and And This work the disciplined when say, times transactions in get a are the of the in pricing inflationary as all primarily the on results. working we pricing in transactions has past of constant the working desired the kind become kind desired go of growth in billers at what regular results I out billers we at is billers

And So would ARPU pricing, which that increase helping in which us functioning. XXX XXX. getting pretty I clear with is is working are the we are from process saw now really you the say, desired billers to

that happening. So we saw

a dynamic discounts, Now other seeing would that complete are we the as we discounts not our with OpEx. getting ARPUs, say, to how billers, given. I hand of again, are the calibration volume volume But volume-based the discounts as of being the as those CP large much are works then there are of impacting But margins. is on that

our margin, primary dollars, far the growing as in get and EBITDA to we metric, EBITDA which So adjusted margin i.e., percentage. only desired on that's not as result is just

that growth march show that. and we I to think consistently want on

will you longer look short like they last XX%. In years, our are in for are bounce QX, if you overall, or time, QX. X at the term, periods I you see close. were XX%. say, XX%, In around? saw But And CP would XX% in the CP CAGRs seeing was grew QX, they they they saw early-XXs should you of in can high-XXs. In seeing converge, grew pretty Yes, in can. revenue QX, you you So QX,

are I we the kind pretty still other, of to to, of think of biller and the primary marching much close I us metrics. expanding the they the give the of think each but kind and in. we that diversity And right are have verticals with are on should in kind variability base flexibility to path achievement operate we

William Nance

Got it. well XX the That is you running of super of Rule over just helpful. mentioned of And targets time. kind ahead

the you the fall margins come on strong CP financial incremental So to you yourself of kind of kind strength where see onboard the just given in profile continue could there of or Are incremental or into see anything a the priorities and we now investment any investing just heavily? right more really could may horizon that lot that expect bottom-line? the

Sanjay Kalra

Well, where this we'll is money believe the front mouth we We great us. have opportunity and started that doing the in quarter. already of we put in a

similar in want if opening we And is those on that pipeline invest and working very hire more and partnerships arrangements, more to or and we sales marketing to convert we to have we strong bookings. are to opportunities Our have and that.

spend opportunity staying long-term be if organic priority primary to is on our desired were we the growth see #X opportunity metrics focused very to going is of the for us and hesitate metrics. the beneficial we So us, an there front although X and of not in

Dushyant Sharma

question gross EBITDA is of reason why And if adjusted it I think may to may believe that, building Dave's well revenue still and we in -- the X And our metrics. are as and add that mode. we help Will, earlier primary revenue I is,

are in basically capture market mode. We

beginning strong what to of profile, we of We and predict profitable trying the to capture #X in year, we as growth the we're comfort network actually we market? total is pretty we would combined mean, we and at which markets are our with company the whatever We to gives client product profile, context profile, are know. rightly product able pointed frankly, that's we the moving our be in market ecosystem that year as we the interesting of demonstrate relevant have that's operating within past with growth EBITDA company not top-line if the CP public last a without to sheet give around, all actually the do IPN as we a and despite And frankly shared deliver shared a as are the OpEx the saying, want our traditionally the that fraction Adjusted what can because market. are somewhat up to the able for top-line out, to able Paymentus signing is that this some we new operating investor were -- are are is, to year, the the is, reach, the is for -- to huge. Sanjay cases, as And The in quarter-to-quarter, which elusive leverage I addressable differentiated the revenues our balance market, our open year. metric are us. And able offering balance our earlier is the is top-line we which to number. OpEx, the a our

trying infancy So a think capture but business, the at still its as building the decent-sized top-line, scaled, business, of it's billion very a us I market. think, just of approaching $X frankly to of a company,

in perspective, deal for as and EBITDA a and adjusted of customers long-term, are the would expense us. of result, as for us is deliver cases. type And we all Paymentus flexibility that interchange And therefore, sure is participating in in deal, can the revenue shared make economy. want Interchange that from for want sense the we long-term not to you So out, makes we market is, strategy, want us, we the serve that utmost best metric of to we have participate the go type gross we that how to doing economy. deal, the at the interchanging targeting our top-line can margin? And is after. the years center the profitably in have but we -- we see we today the an And past in the

we perfect for perfect point it's capturing demonstrate is profitability. faster differentiated opportunity, well as the we keep can, offering this click while demonstrating market the So the and us, to -- same at time at as a inflection a

Operator

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

Darrin Peller

more the when just color the the could billers second obviously you you're more what around biller in net past breakdown billers guide? just quickly bit go little I vertical in did the add into number thinking we're of embedding a sources And help just maybe cases. to just that and coming from? the If are them maybe than live converting us guess, think in much on, about I half, maybe moving and these new you them in You're is the of some adds

and And kind expectations kind to embedded? little numbers what of so great of the it cadence seeing would biller be know maybe around more we're a what already,

Dushyant Sharma

Sanjay, go ahead.

Sanjay Kalra

Yes.

billers we discuss biller adds, -- So of the we an numbers. seeing we That's Darrin, disclose. in terms are of annual the number don't actually

grown actually and quarters QX you'll year-to-date, call. the X not wait So and for progress. full to, a good in billers in first the progress And QX, for say in really that pleased fact, would say, been QX well only have a we all verticals. the our But the have during year, are I'd that I has very

strength business have in the in I all verticals we in out from could the Dushyant seen don't basically had on side diversified they that is any that quarter. prepared all X key we comes And where remarks for it are his used particular pointed all and they our we platform are bookings be vertical, and any one. in coming growing, think specialize

Although, can said. won't I as utilities our But other is as you many know, the One this provide backbone. maybe the on time, got to share Dushyant help. got which insurance, verticals, will you, I same be we've definitely at number, clarity able we've strongest with mentioned. I thing

quarter. been X over best growing pace the That quarters QX. improving quarter, every implementation been Our every last the in has has

how reasons. processes quickly efficient becoming of to this, we terms in machinery our think are implement very, I very multiple due the

reduced. I say period that has would So time

So growth, as well. only that not on revenue is helping but help should later the

Dushyant Sharma

something actually, And -- Darrin. if I say quickly, going add just to I was may

I if us a engine the the client quite of word, think will. a current to disruptive in for current, interesting environment. lack you inflection business. Think are engine, better Disruptive it's may that exist we as relative as orthodoxy a at point of

or in you're but any with and for office re-imagining in experience So a workflow size the and the going back platform large the any the the entire also for operations as entities Paymentus' advanced vertical. -- customers,

this are looks verticals. It other in methodology, at So in or generating. who may X incumbent we be in that an would be do disrupt it are business actually take few have could vertical many or our X margin a what that like we go you we is, many, have building incumbents very to as We And a look a interesting, trying our just if and we very will. as much agile sophisticated particular platform may done high not is. vertical

platform that's a possible we onboarding platform. with industry to seeing of what you're is, with approach and we're automation base never we one just -- platform. we and well becoming the was single code as of very thought a to going functionality because to one customers result happening are they what's what able is, a as them better And agnostic So different offer added and experience are the some company different have as that

Darrin Peller

to great that's hear. Yes,

one I quick mean, move million net a continues just on it Just is to -- your think also higher. $XXX I on cash and --

area could remind on invest you the into? to the What's be look strategy, of just you'd what an horizon? if us further M&A would So

Dushyant Sharma

which do But bottom-line. as the look will growth as M&A for but to book, will the we functionality or think we opportunistic. profile a as we are it's we profile, any our an of There take necessitates our I which of larger us accretive think small and you that acquisition, to remain side, not will well we can opportunistic, on isn't are think I we actually at whether the single almost any see a easy top-line size, which hit companies. find make as by get It's tuck-ins opportunistic. to can from frankly, gap is remain companies them,

is what at look there. a taking are out We

Operator

The next with the of question Fargo. line from Wells is Andrew Bauch

Andrew Bauch

to wanted guide here. I pick-up just a

year. quarter, in the X.X% second by profit in contribution beat raised full XX.X% You the

these the So what back on incremental levels of EBITDA? you about beat think putting and run motivation high adjusted by you X.X% that those incremental. raise is margins about then sales? the raised it But if function Any kind half. million another to side, $X incremental into incremental Is that X.X% to of with around margins, back at of or in the EBITDA the X%, a just so by of kind -- thoughts

Sanjay Kalra

in Well, quarters great. X amazing, the just Andrew, both one business remarks, thing been we I'd exceptionally to say doing said The the well. have which prepared is like

We executing really well. path are on of a

And out. on closely solid a spending calibrate give manage mean, up how how a mean, I'll that. I time, metric. a CP conversion same how time priority. because We expense being we came the we for little are We CP times EBITDA guidance. do the are And much future decision going in at thoughtful not. future decision, secondary to are well. have EBITDA the keeping OpEx. a we they in very and strategy times as bit our better, more use the better how how straight would pipeline, head it done, at have our revenue made we can if don't, pretty our and over Actually, terms the manage can operating we or are bookings CP as seen and we in be getting we of the would very I with not. And we QX expense to think we But At conscious CP would use in get that that have the we same fund in have turns operation the can they it itself. margins our focus. better you we whether that's getting clear a ended that giving forward would terms We past, and our to better. It's well. a or the model rather of And together And margins example over or even don't see

So driving in significant think don't CP EBITDA role I actually a is margin. playing our

from it with of all revenue. together but comes is, In OpEx fact, that working

a I thoughtful which what we is are guidance overall, and focus pretty pace. X to think wanted So the time, But the message which the growing is on is guidance. year-over-year have communicate the we same at that primary strategy in the metrics, good this at regard and

Andrew Bauch

quarters It's you I -- second the nice is. flexibility out have business you quarter, at that firing thing XX% to is year run sticking for back out that 'XX. from one is from accelerated kind when intra-quarter X a like sticks X guess, just significantly anything CAGR basis the it the on that you? on that can that. the second you to the transaction visible transactions was of lead be the there number But XX%, comp on being last that tougher that you so to in quarter And called to higher, point drove is that that it

Sanjay Kalra

very things. X there growth. I are seeing same-store is would One good sales are a say we

signed what in And coming, better new are the when second are Our from much originally at as than this expecting the them would -- pace which one good is seeing their that transactions we of are best time. said implemented, them thing up. we I existing probably are I which point say they we're the customers, getting billers and is

these So higher transactions. result generating is in a facts combination a both of

Andrew Bauch

bit if little press think I are do I on the same-store sales Maybe that. a so you mean, kind coming strong? of why just you in further could

Sanjay Kalra

more rolling this adoption young they increased customers would of it's paying their used part and platforms help are start platform billers than comes as out and on the world. Well, we them our who one by the generation And a well. That's moving as method. as the that are old digitalized the bills, using to in it. to business generates, we prefer more rather And

and based I implementations business the it. model in So increase which inherent same an time, itself. on the is the transactions, just things an think just like adding there in built bookings new of the additional are other is top additional accelerator And on at

Andrew Bauch

benefits also there. talking were You

Dushyant Sharma

make also are making to best we our on our And platform. get efforts more the to sure getting more customers concerted from are and Yes. by clients our that platform able

Operator

with next the John is of from The Raymond James. line question Davis

John Davis

was balance it. bit you of the this, incremental will thinking bottom-line think if right call year margins potentially margins. Sanjay, XX%. talked XX% I I of a XX%. balancing down kind of was about opportunity? you is Very year, incremental I about up you at is on full it, or step But investments how Just the the this longer trying the showing think that to kind term think growth little about really and take and investments margins growth year more more about investments hit of you from are this XX% saw strength. and you kind implies business year guys strong and way to down think bit little XX%, it where can quarter, to wanted last incremental and That last know a step like this a like I

Sanjay Kalra

margins -- the the question, QX, XX.X%. would the overall, were Adjusted business you EBITDA goal, say, grow which incremental not John, whole and is, dollars you you kind margin is And EBITDA are driving which that's of Eventually, That's and growing. are in the are growing. adjusted the as margins itself, like of a leaves great margins why primary XX.X% part improve question. increase and if, the business, it In are your goal is margin. they entire as QX, bottom-line. Interesting is EBITDA okay, the growing? metrics still we we your I

grow. us I were They and it gives could. -- is, EBITDA fluctuate? see XX same to in is last adjusted more generate bottom-line well, And XX.X%. XX% every kind At good EBITDA time, the we a the that that's growth it. definitely year-over-year spend very of have, can this adjusted think Could it. about pipeline give there to whole conversion well. give bookings, can future margin good to opportunity no that as proper generate the And as are which for of goal us incremental Every too. delivered. will given that margins incremental when front we when generate of grow is But benefit of XX% have bookings, Rule But to this we the should of we opportunity should can we think of expect opportunities, I dollars flexibility raising. The should year consistently guiding use full use itself, to we in our as and a is are you guide in the I And leverage a we XX.X%. whole see the margin to we there when operating margins. you guide direction, year. to now, would We QX, I EBITDA year as And

John Davis

Okay. prepared in No, that's helpful. And the activity, one called the then, drivers. as Dushyant, the of it IPN you was noteworthy upside out remarks increased,

general hold or update So just there, update kind of that transactions there to kind an of you just percentage you kind of out? what but percentage are of get to revenue, break-out of looking a willing or either that noticeable

Dushyant Sharma

distinct for product Actually, processed. offering. transactions if will, not participants is separate a it's or is say are our you John, Thank who would part That such are the they're or less of this and I what where coming from like solution, question. you, the how at IPN and being stage, more inherent an is, or the

an with key now focused the platform, actually biller more the union including providers. From replicate right point platform used through our their our it's the for a benefit is Instant with is hard feel originating the our more system, they of inflection for comfortable union in business company transaction the point, that diverse or in-house somewhat seeing credit who transaction to where be solutions. entire signing now, routed our own to Paymentus that speak, like verticals, billing credit and transaction on Paymentus, a seeing us. on like ecosystem they're a actually IPN, our vantage like and a bank other example, an using Likewise, take to large concluded clients bank And that transaction is very from profile to of ecosystem Payment who are to we reasons one IPN is are a is fintech of we originating so a more or this what So going same or and receiving on Network. they've outside clients

well separate product So for a and offering IPN as tool differentiated a a product. is as not differentiated us sales

cost However, it interchange capitalize sales. growth. as long-term, is revenues. capitalizing center will frankly, And into is It our in the transaction our interchange I've shared the capitalizing past, it

Operator

The Andrew from next is question the line of with Polkowitz JPMorgan.

Andrew Polkowitz

-- comments drill results. in that. timing. the and several efficiency your increase the on driving were wanted wanted about a in I little Congrats to ask bit I implementation areas to I know you in on drill you and guys there said

is it ask, there certain could to wanted are of in I internal areas having to just increase So an velocity? to with kind manpower your do increased or you point that

Sanjay Kalra

additional pleased Andrew. work will pleased in. or remarks on team question, think who color dedication these with to be to may actually later script might the call -- they very the our has because hard they've be great all because I on, very it speaks who put provide read and Actually, And the

not pandemic a a and some and has required and largest on. years, is learnings, being And reason And in improving strength. and solutions we which complexity occurred onboarded. Paymentus also, customers the the the be workflow used based But couple large you spend fact customers those the take to our the needle automating, now have into we getting is we're actually so already now our meet excellence center So as got clients, the if to key onboarding, of market, the delays workflows that we the the of engine time on meet with capabilities. are us I are the of automating of able create are we the we of end decision more Paymentus we customers, we a going to made back able and their to so contributing. But who offices, especially their those that to now was are move in some on were whiteboarding dealing the customers by

workflow with of to of to So coming diverse very fruition to is all capabilities and of any and single on implemented our say all of our a business line not platform required majority vast that code even to rules on our is any any of or workflows mean, the any customers adding customers platform integration onboarding require complex ease. I'm get I without pleased that of the change. meaning, not change, change.

areas the is So to that's continue key pursuit. of investments We'll But for and one -- it team. focus the there. make a constant of

Andrew Polkowitz

one That's follow-up. great to I hear. had

see to to what pipeline drivers XXXX of there ask, more that surprises cause that to is mentioned And benefit exiting bookings the strong implied of to or I you is second quarter. or versus outlook? story? a benefit wanted be potential would building upside question, for upside sort XXXX could that any potential your on driving half You the

Dushyant Sharma

opportunity Andrew, us that front say is see more of which of I revenue the a XXXX would in for pipeline we us. beyond

how not year, you current this clearly, an get us to should to would not for upside pipeline the contracts bookings and we expectations duration. from That front same to be and be for For to pipeline I cycle, how and bookings would very depending then going big upon we we put are of possible. the for That 'XX. not I time, that models. At revenue large making is any the to converted in and definitely, say convert your in operate. and 'XX how much that's and could beyond how And XXXX say,

and beyond. answer but is no 'XX, for So short 'XX

Sanjay Kalra

think already is many for can of onboard XXXX I as hard some very are guidance. factored that as itself, to into and as we clients we And working our

Operator

Instructions] The of Partners. question is line Matt the from next FT [Operator O'Neill with

Matthew O'Neill

asked results of lot already solid A great here. questions Yes. and answered and

understand the telling really laid ultimately characterize that you the top how direction of have curious, and if Kind you've are strategic employees out. financially going drive curious, executing it you and priorities? been that financial internally, the so are more of we outcomes you those Sanjay well the turn would Just Dushyant, What business to that targets the against?

Dushyant Sharma

key we their us our one is focus Actually, being the I they and question #X, are the us clients their I'm mean, this clients; X imagine, for in assets with as is so able team, of #X, you think business. most important a trusting as -- our glad asked. have can their Great question. I more and or operational areas is no money. in is central result, team that a with And and become partnering of more increasingly, excellence needs who invest on as key has one Paymentus. revenues continue business. to is result, to and to Without business any focus as there the business innovation. our a of And

if message continue we team, my clients, we to market where listen together as a to are to listen that improve but excellent. and So bring is we are operationally to one are want help #X, innovate to certainly our perfect, to to are those it not, very we and innovations And we willing the and continue way customers. are in do continue all innovate, to customers, result this a the from lessons of we those we our to and thing in basically no innovate, saying,

business. business that same know doing, and the market expecting just our signed We this efficient. investors or that. we but profitably, aligned are ways up to We what do And do great a want good on they teams to we a at great are some we're in are time, and in things pursuing us that's are all us which it

Operator

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

Dushyant Sharma

it. you, everyone. really Have thank I time. I a appreciate bye. great appreciate Well, Bye, day. your

Sanjay Kalra

bye. Thank you. Bye,

Operator

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

lines. You may your disconnect now

Paymentus (PAY) 8 Aug 242024 Q2 Earnings call transcript