• Fourth Quarter Revenue: $257.9 million, up 56.5% year over year.
• Fourth Quarter Contribution Profit: $86.2 million, up 30% year over year.
• Fourth Quarter Adjusted EBITDA: $27.3 million, up 36.9% year over year.
• Full Year 2024 Revenue: $871.7 million, up 41.9% year over year.
• Full Year 2024 Adjusted EBITDA: $94.2 million, up 62.2% year over year.
• Full Year 2024 Contribution Profit: $312.1 million, up 29.5% year over year.
• Fourth Quarter Transactions Processed: 166 million, up 33% year over year.
• Average Price Per Transaction: $1.55, up from $1.32 in the prior year period.
• Fourth Quarter Non-GAAP Net Income: $16.3 million or $0.13 per share.
• Full Year 2024 Non-GAAP Net Income: $56.2 million or $0.44 per share.
• Cash Position at End of Fourth Quarter: $209.4 million.
• Free Cash Flow for Fourth Quarter: $19 million.
• Guidance for Q1 2025 Revenue: $241 million to $249 million.
• Guidance for Full Year 2025 Revenue: $1.04 billion to $1.06 billion.
• Guidance for Full Year 2025 Adjusted EBITDA: $112 million to $116 million.

• Warning! GuruFocus has detected 3 Warning Sign with HKSE:09863.

Release Date: March 10, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Paymentus Holdings Inc (NYSE:PAY) reported a record fourth-quarter revenue of $257.9 million, marking a 56.5% year-over-year increase.
• The company achieved a significant adjusted EBITDA growth of 36.9% year over year, reaching $27.3 million for the quarter.
• For the full year 2024, Paymentus Holdings Inc (NYSE:PAY) exceeded its long-term target with a 41.9% increase in revenue, totaling $871.7 million.
• The company successfully onboarded clients across multiple verticals, including insurance, government services, and utilities, demonstrating its diverse market reach.
• Paymentus Holdings Inc (NYSE:PAY) ended the year with a strong backlog and solid sales momentum, providing confidence in its 2025 growth prospects.

Negative Points

• The contribution margin for the fourth quarter decreased to 33.4% from 40.3% in the prior year period, reflecting the addition of large high-volume enterprise billers.
• Despite strong revenue growth, the company faces challenges in maintaining contribution profit per transaction, which remained similar to the prior year at $0.52.
• The company anticipates potential macroeconomic volatility, which could impact consumer payment behaviors and overall business performance.
• Paymentus Holdings Inc (NYSE:PAY) is experiencing pressure to offer volume discounts to large enterprise customers, which could affect profitability.
• The company's guidance for the first quarter of 2025 indicates a sequential decline in gross revenue, attributed to uncertainties with newly onboarded large enterprise customers.

Q & A Highlights

Q: Why is there a sequential decline in Q1 guidance despite historically strong growth? A: Dushyant Sharma, CEO, explained that the guidance reflects prudence due to the recent onboarding of large enterprise customers. The company needs more time to fully understand trends before making aggressive forecasts. Despite this, the business remains strong with robust sales momentum and a significant backlog.

Q: How resilient is Paymentus to macroeconomic volatility? A: Dushyant Sharma, CEO, emphasized the nondiscretionary nature of the bills Paymentus processes, such as utilities and rent, which are essential regardless of economic conditions. This provides resilience against macroeconomic headwinds and potential recessionary pressures.

Q: What drives your confidence in growth without new sales? A: Dushyant Sharma, CEO, attributed this confidence to a strong backlog and increased same-store sales. The company has a solid foundation for growth, supported by a robust pipeline and efficient onboarding processes.

Q: What factors have contributed to success with large enterprise billers? A: Dushyant Sharma, CEO, noted that advancements in Paymentus' platform and IPN ecosystem have made it easier to automate sophisticated workflows that large enterprises require. This has broadened their reach and appeal across various verticals.

Q: Can you elaborate on the potential for interchange to become a revenue center? A: Dushyant Sharma, CEO, mentioned that while interchange currently serves as a cost center, there are opportunities to monetize it through new products, partnerships, and payment flow optimizations. This is a long-term strategy to expand the total addressable market.

Q: How does the evolving mix of large enterprise customers affect revenue per transaction? A: Sanjay Kalra, CFO, explained that while large customers may seek volume discounts, the overall revenue per transaction has increased due to higher average payment amounts. This is offset by strong operating leverage, maintaining profitability.

Q: What is the impact of government budget shifts on Paymentus? A: Dushyant Sharma, CEO, stated that there is no direct risk from federal budget changes as Paymentus primarily serves local municipalities. These entities rely on Paymentus for revenue collection, which remains stable.

Q: What is Paymentus' approach to M&A? A: Sanjay Kalra, CFO, indicated that Paymentus is open to opportunistic acquisitions that are accretive to either the top line or bottom line. The company is in a strong financial position to explore such opportunities.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.