Paymentus Holdings, Inc 10-Q for FY2026 Q1
Paymentus Holdings, Inc. (PAY)
About this 10-Q
Paymentus Holdings, Inc filed this 10-Q on May 5, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $358.44M
- up 30.2% from $275.24M a year earlier
- Net income
- $20.88M
- up 51.2% from net income of $13.81M a year earlier
- Diluted EPS
- $0.16
- up 45.5% from $0.11 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of April 30, 2026, the registrant had
Table of Contents
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Special Note Regarding Forward-Looking Statements |
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PART I. |
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Item 1. |
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Condensed Consolidated Statements of Operations and Comprehensive Income |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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PART II. |
OTHER INFORMATION |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 3. |
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Item 4. |
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Item 5. |
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Item 6. |
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Special Note Regarding Forward-Looking Statements
This report on Form 10-Q for the quarterly period ended March 31, 2026 (“Quarterly Report”) contains forward-looking statements within the meaning of the federal securities laws, such as those under the headings “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations,” which statements involve substantial risks and uncertainties. Forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from historical results or from any future results or projections expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this report include statements about:
We caution you that the foregoing list may not contain all of the forward-looking statements made in this report.
You should not place undue reliance on our forward-looking statements as predictions of future events. We have based the forward-looking statements primarily on our current expectations and projections about future events and trends that we believe may affect our business, operating results, financial condition and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in the section titled “Risk Factors” and elsewhere in this Quarterly Report. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this report. We cannot
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assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
Neither we nor any other person assumes responsibility for the ultimate outcome of any of these forward-looking statements. Moreover, the forward-looking statements made in this report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this report to reflect events or circumstances after the date of this report or to reflect new information or the occurrence of unanticipated events, except as required by law.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information.
Certain Definitions
In this report, unless the context requires otherwise, all references to “we,” “our,” “us,” “Paymentus,” and the “Company” refer to Paymentus Holdings, Inc., and where appropriate its consolidated subsidiaries.
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PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
PAYMENTUS HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
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March 31, |
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December 31, |
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2026 |
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2025 |
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Assets |
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Current assets |
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Cash and cash equivalents |
$ |
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$ |
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Restricted cash and cash equivalents |
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Accounts and other receivables, net of allowance for expected credit losses of $ |
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Income tax receivable |
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Prepaid expenses and other assets |
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Total current assets |
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Property and equipment, net |
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Capitalized internal-use software development costs, net |
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Intangible assets, net |
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Goodwill |
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Operating lease right-of-use assets |
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Deferred tax asset |
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Prepaid expenses and other assets, less current portion |
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Total assets |
$ |
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$ |
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Liabilities and Stockholders’ Equity |
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Current liabilities |
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Accounts payable |
$ |
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$ |
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Accrued and other liabilities |
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Current portion of operating lease liabilities |
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Contract liabilities |
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Income tax payable |
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Total current liabilities |
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Operating lease liabilities, less current portion |
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Contract liabilities, less current portion |
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Accrued and other liabilities, less current portion |
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Total liabilities |
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Stockholders’ equity |
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Class A common stock, $ |
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Class B common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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Retained earnings |
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Total stockholders’ equity |
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Total liabilities and stockholders' equity |
$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
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PAYMENTUS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except share and per share data)
(Unaudited)
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Three Months Ended March 31, |
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2026 |
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2025 |
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Revenue |
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$ |
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Cost of revenue |
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Gross profit |
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Operating expenses |
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Research and development |
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Sales and marketing |
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General and administrative |
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Total operating expenses |
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Income from operations |
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Interest income, net |
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Other income |
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Income before income taxes |
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Provision for income taxes |
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Net income |
$ |
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$ |
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Net income per share |
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Basic |
$ |
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$ |
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Diluted |
$ |
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$ |
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Weighted-average number of shares used to compute net income per share |
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Basic |
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Diluted |
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Comprehensive income |
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Net income |
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Foreign currency translation adjustments, net of tax |
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( |
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Comprehensive income |
$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
6
PAYMENTUS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share amounts)
(Unaudited)
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Additional |
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Accumulated |
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Total |
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Common Stock |
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Paid-In |
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Retained |
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Comprehensive |
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Stockholders’ |
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Shares |
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Amount |
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Capital |
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Earnings |
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Loss |
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Equity |
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Balances at December 31, 2025 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Issuance of Class A common stock upon exercise of stock options |
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— |
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— |
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— |
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Issuance of Class A common stock upon vesting of restricted stock units |
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— |
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— |
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— |
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— |
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— |
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Shares withheld for the withholding tax on vesting of restricted stock units |
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( |
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— |
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( |
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— |
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— |
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( |
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Foreign currency translation adjustments |
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— |
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— |
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— |
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— |
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( |
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( |
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Net income |
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— |
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— |
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— |
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— |
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Balances at March 31, 2026 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Additional |
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Accumulated |
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Total |
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Common Stock |
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Paid-In |
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Retained |
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Comprehensive |
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Stockholders’ |
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Shares |
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Amount |
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Capital |
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Earnings |
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Loss |
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Equity |
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Balances at December 31, 2024 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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Issuance of Class A common stock upon exercise of stock options |
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— |
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— |
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— |
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Issuance of Class A common stock upon vesting of restricted stock units |
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— |
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— |
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— |
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— |
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— |
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Shares withheld for the withholding tax on vesting of restricted stock units |
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( |
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( |
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( |
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Foreign currency translation adjustments |
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— |
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— |
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— |
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— |
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( |
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( |
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Net income |
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— |
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— |
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— |
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— |
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Balances at March 31, 2025 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
PAYMENTUS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
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Three Months Ended March 31, |
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2026 |
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2025 |
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Cash flows from operating activities |
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Net income |
$ |
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$ |
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Adjustments to reconcile net income to net cash provided by operating activities |
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Depreciation and amortization |
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Deferred income taxes |
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Stock-based compensation |
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Amortization of capitalized warrants cost |
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Non-cash lease expense |
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Amortization of capitalized contract acquisition cost |
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Provision for expected credit losses |
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Change in operating assets and liabilities |
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Accounts and other receivables |
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( |
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Prepaid expenses and other assets |
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( |
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Accounts payable |
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Accrued and other liabilities |
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( |
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( |
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Operating lease liabilities |
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( |
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( |
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Contract liabilities |
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Income taxes receivable, net of payable |
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Net cash provided by operating activities |
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Cash flows from investing activities |
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Purchases of property and equipment |
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( |
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( |
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Purchases of interest-bearing deposits |
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( |
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Proceeds from matured interest-bearing deposits |
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Capitalized internal-use software development costs |
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( |
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( |
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Net cash used in investing activities |
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( |
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( |
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Cash flows from financing activities |
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Proceeds from exercise of stock-based awards |
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Payments of taxes withheld on net settled vesting of restricted stock units |
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( |
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( |
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Net cash used in financing activities |
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( |
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( |
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Effect of exchange rate changes on Cash and cash equivalents and Restricted cash |
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( |
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( |
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Net increase in cash, cash equivalents and Restricted cash |
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Cash and cash equivalents and Restricted cash at the beginning of period |
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Cash and cash equivalents and Restricted cash at the end of period |
$ |
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$ |
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Reconciliation of Cash and cash equivalents and Restricted Cash: |
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Cash and cash equivalents at the beginning of period |
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Restricted cash at the beginning of period |
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Cash and cash equivalents and Restricted cash at the beginning of period |
$ |
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$ |
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Cash and cash equivalents at the end of period |
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Restricted cash at the end of period |
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Cash and cash equivalents and Restricted cash at the end of period |
$ |
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$ |
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Supplemental disclosure of cash flow information: |
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Cash paid for income taxes, net of refunds |
$ |
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$ |
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Non-cash investing activities: |
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Right-of-use assets obtained in exchange of operating lease obligations |
$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
8
PAYMENTUS HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, unless otherwise stated)
(Unaudited)
1. Organization and Description of Business
Description of Business
Paymentus Holdings, Inc. and its wholly owned subsidiaries (“Paymentus” or the “Company”) provides electronic bill presentment and payment services, enterprise customer communication and self-service revenue management to billers through a Software-as-a-Service (“SaaS”), secure, omni-channel technology platform. The platform seamlessly integrates into a biller’s core financial and operating systems to provide flexible and secure access to payment processing of credit cards, debit cards, eChecks and digital wallets across a significant number of channels including online, mobile, IVR, call center, chatbot and voice-based assistants. Paymentus was incorporated in the state of Delaware on September 2, 2011 with office locations in Charlotte, North Carolina, Dallas, Texas, Santa Clara, California, Richmond Hill, Ontario (Canada), and Gurugram, Mohali and Bengaluru (India). The Company is headquartered in Charlotte, North Carolina.
2. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying unaudited interim condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the United States Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with GAAP. Therefore, these unaudited condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and the related notes included in the Company's Form 10-K for the year ended December 31, 2025 filed with the SEC on February 24, 2026 (the “2025 Form 10-K”).
These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position, results of operations and comprehensive income, changes in stockholders' equity and cash flows for the periods presented. The results of operations for the three months ended March 31, 2026 and 2025 are not necessarily indicative of the results to be expected for the full year or any other future interim or annual period.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Such estimates include revenue recognition, cost of revenue recognition, the allowance for credit losses, the useful lives of tangible and intangible assets, and the recoverability or impairment of intangible assets, including goodwill, internal-use software development costs, valuation of stock warrants issued, stock-based compensation, and accounting for income taxes. The Company bases its estimates on historical experience and also on assumptions that management considers reasonable. The Company assesses these estimates on a regular basis; however, actual results could differ from these estimates.
Custodial Accounts
The Company has established a relationship with its merchant processors to act as collection and paying agents, whereby a merchant processor receives funds from customers and forwards such funds to the respective Paymentus client, based on the instructions received from the Company. These merchant processors act as custodians of the cash received, and the Company has no legal ownership rights to the funds held in such custodial accounts and does not control the use of these funds. As the Company does not take ownership of the funds, these custodial accounts are not included in the Company’s consolidated balance sheets. The balance of cash in the custodial accounts held by these merchant processors was $
Concentration of Credit Risk
Financial instruments that potentially subject the Company to credit risk primarily consist of cash, cash equivalents, accounts receivable and short-term deposits. The Company maintains its cash and cash equivalents and short-term deposits with high-quality financial institutions with investment-grade ratings. For accounts receivable, the Company is
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exposed to credit risk in the event of nonpayment by customers to the extent of the amounts recorded in the condensed consolidated balance sheets.
Segment Information
The Company operates as a single operating and reportable segment. The Company’s chief operating decision maker ("CODM") is its chief executive officer, and the CODM evaluates financial performance and makes resource allocation decisions based on consolidated financial information. The measure of segment profit or loss that the CODM uses to allocate resources and assess performance is the Company’s consolidated net income, as reported on the condensed consolidated statements of operations and comprehensive income. The CODM uses consolidated net income to assess overall Company performance, monitor progress toward financial targets, and make strategic decisions regarding the allocation of resources across functions and initiatives.
The accounting policies applied to the segments are the same as those described in the summary of significant accounting policies. All expense categories on the condensed consolidated statements of operations and comprehensive income are significant, and there are no other significant expenses that are reviewed or provided to the CODM that would require disclosure.
Assets provided to the CODM are consistent with those reported on the condensed consolidated balance sheets.
Information related to the Company’s products and services is disclosed in Note 1. Information about geographical distribution of the Company’s revenue and long-lived assets is disclosed in Notes 3 and 4, respectively.
Summary of Significant Accounting Policies
The Company’s significant accounting policies are discussed in Note 2, “Basis of Presentation and Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements as of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023 included in the 2025 Form 10-K. There have been no significant changes to these policies during the three months ended March 31, 2026.
Recently Adopted Accounting Standards
Accounting Standards Updates ("ASU") not listed below were assessed and determined to be either not applicable or are not expected to have a material impact on the condensed consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract
Assets. ASU 2025-05 provides guidance on the measurement of credit losses for certain accounts receivable and contract
assets arising from revenue transactions. The guidance is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual reporting periods. The Company adopted ASU 2025-05 effective January 1, 2026 on a prospective basis. The adoption of this new guidance did not have a material impact on the Company's condensed consolidated financial statements and related disclosures.
Accounting Pronouncements Not Yet Adopted
On November 4, 2024, the FASB issued new guidance requiring additional disclosure of the nature of expenses included in the income statement in response to longstanding requests from investors for more information about an entity’s expenses. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. ASU 2024-03, Disaggregation of Income Statement Expenses (DISE), applies to all public business entities (PBEs) and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. The adoption of ASU 2024-03 is not expected to have a material impact on the Company's financial position or results of operations.
In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software
(Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amended guidance
modernizes the accounting for costs related to internal-use software to more closely align with current software development methods. The guidance removes references to project stages and clarifies when the Company is required to start capitalizing eligible costs. The new guidance is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted. The guidance can be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis. The Company is currently evaluating the impact this amended guidance may have on its condensed consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The amendments improve the codification guidance for interim reporting and require that entities provide specific disclosures in interim periods that were previously only required in annual financial statements. The new guidance is effective for fiscal
10
years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting this new guidance on its future interim financial disclosures.
3. Revenue, Performance Obligations and Contract Balances
Disaggregation of Revenue
The following table presents a disaggregation of revenue from contracts with customers (in thousands):
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
Payment transaction processing revenue |
$ |
|
$ |
|
||
Other |
|
|
|
|
||
Total revenue |
$ |
|
$ |
|
||
Revenue by geographic area, based on the location of the Company’s users, was as follows (in thousands):
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
United States |
$ |
|
$ |
|
||
Other |
|
|
|
|
||
Total |
$ |
|
$ |
|
||
Remaining Performance Obligations
As of March 31, 2026, the aggregate amount of transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied was $
As of March 31, 2026, the Company has contractual rights under its commercial agreements with customers and resellers to receive $
Contract Liabilities
Revenue recognized during the three months ended March 31, 2026 and 2025 that was included in the contract liabilities balance at the beginning of each of the periods was $
4. Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
|
March 31, |
|
December 31, |
|
||
|
2026 |
|
2025 |
|
||
Computer equipment |
$ |
|
$ |
|
||
Furniture and fixtures |
|
|
|
|
||
Leasehold improvements |
|
|
|
|
||
Total property and equipment |
|
|
|
|
||
Less: Accumulated depreciation |
|
( |
) |
|
( |
) |
Property and equipment, net |
$ |
|
$ |
|
||
Depreciation expense recorded for property and equipment was $
The Company's long-lived assets primarily consist of computer equipment and furniture. The table below summarizes long-lived assets based on their geographical area (in thousands):
11
|
March 31, |
|
December 31, |
|
||
|
2026 |
|
2025 |
|
||
United States |
$ |
|
$ |
|
||
Other |
|
|
|
|
||
Total |
$ |
|
$ |
|
||
5. Goodwill, Internal-use Software Development Costs and Intangible Assets
Goodwill
The changes in the carrying amount of goodwill during the three months ended March 31, 2026 and 2025 relate to foreign currency translation adjustments.
Internal-use Software Development Costs
During the three months ended March 31, 2026 and 2025, the Company capitalized $
Amortization expense included in the condensed consolidated statements of operations was as follows (in thousands):
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
Cost of revenue |
$ |
|
$ |
|
||
Research and development |
|
|
|
|
||
Total |
$ |
|
$ |
|
||
Intangible Assets
Intangible assets, net consisted of the following (in thousands):
|
March 31, 2026 |
|
|
|
||||||||
|
Gross |
|
Accumulated |
|
Net |
|
Weighted- |
|
||||
Technology |
$ |
|
$ |
( |
) |
$ |
|
|
|
|||
Customer relationship |
|
|
|
( |
) |
|
|
|
|
|||
Software |
|
|
|
( |
) |
|
|
|
|
|||
Trademark |
|
|
|
( |
) |
|
|
|
|
|||
Total |
$ |
|
$ |
( |
) |
$ |
|
|
|
|||
|
December 31, 2025 |
|
|
|
||||||||
|
Gross |
|
Accumulated |
|
Net |
|
Weighted- |
|
||||
Technology |
$ |
|
$ |
( |
) |
$ |
|
|
|
|||
Customer relationship |
|
|
|
( |
) |
|
|
|
|
|||
Software and license |
|
|
|
( |
) |
|
|
|
|
|||
Trademark |
|
|
|
( |
) |
|
|
|
|
|||
Total |
$ |
|
$ |
( |
) |
$ |
|
|
|
|||
Amortization expense of intangible assets was $
12
As of March 31, 2026, future expected amortization expense is as follows (in thousands):
Years Ending December 31, |
|
|
|
2026 |
$ |
|
|
2027 |
|
|
|
2028 |
|
|
|
2029 |
|
|
|
Total future amortization expense |
$ |
|
|
There were
6. Prepaid expenses and other assets
The composition of prepaid expenses and other assets is as follows (in thousands):
|
March 31, |
|
December 31, |
|
||
|
2026 |
|
2025 |
|
||
Prepaid expenses |
$ |
|
$ |
|
||
Contract acquisition costs |
|
|
|
|
||
Other assets |
|
|
|
|
||
Total prepaid expenses and other assets |
$ |
|
$ |
|
||
Contract acquisition costs consist of upfront customer contract discounts, unamortized warrants cost and sales
commissions. Other assets consist of security deposits for leased properties and investment in term deposits.
7. Accrued and Other Liabilities
The composition of accrued and other liabilities is as follows (in thousands):
|
March 31, |
|
December 31, |
|
||
|
2026 |
|
2025 |
|
||
Payroll and employee-related expenses |
$ |
|
$ |
|
||
Other accrued expenses |
|
|
|
|
||
Other liabilities |
|
|
|
|
||
Total accrued and other liabilities |
$ |
|
$ |
|
||
Other accrued expenses consist of professional services, legal accruals, obligations related to agency
commissions and other miscellaneous accruals. Other liabilities primarily consist of amounts payable to customers related
to refunds arising from various circumstances, including dispute settlements.
8. Commitments and Contingencies
Other Commitments
Legal Matters
From time to time, the Company is subject to or otherwise involved in various lawsuits, claims and legal proceedings that arise out of or are incidental to the conduct of our business, including those relating to employment matters, and contractual and other commercial disputes. The Company records a liability in its condensed consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. The Company reviews these estimates each accounting period as additional information is known and adjusts the loss provision when appropriate. If a matter is both probable to result in a liability and the amounts of loss can be reasonably estimated, the Company estimates and records an accrued liability. Accrued liabilities related to legal matters are included within other accrued liabilities in Note 7. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in the Company's condensed consolidated financial statements. While it is not feasible to predict or determine the ultimate outcome of these matters, the Company believes that, as of March 31, 2026, no current claims and legal proceedings are expected to have a material adverse effect on its financial position, results of operations or cash flows.
13
Indemnification
9. Equity
Warrants
On May 13, 2021, the Company entered into a warrant agreement with JPMC Strategic Investments I Corporation (“JPMC”), an affiliate of J.P. Morgan Securities LLC, an underwriter in our 2021 initial public offering ("IPO"), pursuant to which the Company agreed to issue a warrant to JPMC for up to
On August 29, 2022, the Company entered into a second warrant agreement with JPMC, in connection with an amendment to the Company's existing commercial agreement with JPM Chase discussed above, pursuant to which the Company issued a warrant to JPMC for up to
The Company accounts for the consideration payable in the form of warrants to its vendor as share based compensation expense. The warrant fair value was determined using the Black-Scholes pricing model in accordance with ASC 718, Compensation-Stock Compensation.
10. Stock-Based Compensation
In May 2021, the Company’s board of directors (the "Board") adopted, and its stockholders approved, the 2021 Equity Incentive Plan (the "2021 Plan"), which became effective in connection with the IPO. The 2021 Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code ("IRC"), to the Company's employees and any of its parent or subsidiary corporations’ employees, and for the grant of non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, and performance awards to the Company’s employees, directors and consultants and any of its parent or subsidiary corporations’ employees and consultants. A total of
14
Stock Options
A summary of the Company’s option activity during the three months ended March 31, 2026 was as follows (in thousands, except share and per share amounts):
|
|
|
|
|
Weighted- |
|
|
|
||||
|
|
|
Weighted- |
|
Average |
|
|
|
||||
|
|
|
Average |
|
Remaining |
|
Aggregate |
|
||||
|
Options |
|
Exercise Price |
|
Contractual |
|
Intrinsic |
|
||||
|
Outstanding |
|
per Share |
|
Life (years) |
|
Value |
|
||||
Outstanding at December 31, 2025 |
|
|
$ |
|
|
|
$ |
|
||||
Options exercised |
|
( |
) |
|
|
|
|
|
|
|||
Outstanding at March 31, 2026 |
|
|
$ |
|
|
|
$ |
|
||||
Exercisable at March 31, 2026 |
|
|
$ |
|
|
|
$ |
|
||||
There were
At March 31, 2026, all outstanding stock options granted under the 2012 Equity Incentive Plan were fully vested. Accordingly, there was no unrecognized compensation cost related to unvested stock options.
Restricted Stock Units ("RSUs")
A summary of the Company’s RSU activity during the three months ended March 31, 2026 was as follows:
|
|
|
Weighted- |
|
||
|
|
|
Average |
|
||
|
RSUs |
|
Grant Date |
|
||
|
Outstanding |
|
Fair Value |
|
||
Awarded and unvested at December 31, 2025 |
|
|
$ |
|
||
Awards granted |
|
|
|
|
||
Awards vested |
|
( |
) |
|
|
|
Awards forfeited |
|
( |
) |
|
|
|
Awarded and unvested at March 31, 2026 |
|
|
$ |
|
||
The fair value of RSU grants is determined based upon the market closing price of the Company’s Class A common stock on the date of grant. The aggregate grant-date fair value of RSUs granted during the three months ended March 31, 2026 and 2025 was $
At March 31, 2026, there was $
Stock-Based Compensation Expense
Stock-based compensation expense included in the condensed consolidated statements of operations was as follows (in thousands):
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
Cost of revenue |
$ |
|
$ |
|
||
Research and development |
|
|
|
|
||
Sales and marketing |
|
|
|
|
||
General and administrative |
|
|
|
|
||
Total stock-based compensation |
$ |
|
$ |
|
||
15
11. Income Taxes
The Company computes its tax provision for the three months ended March 31, 2026 by applying the estimated annual effective tax rate to year-to-date income from recurring operations and adjusting for discrete items arising in that quarter.
The Company’s effective tax rate is as follows:
|
|
Three Months Ended March 31, |
|
||||
|
|
2026 |
|
2025 |
|
||
Effective tax rate |
|
|
% |
|
% |
||
The change in provision for income taxes as well as the increase in the Company's effective tax rate, were primarily the result of permanent differences for disallowed compensation pursuant to IRC Section 162(m), state taxes, and Canadian and US R&D credit claims. For the comparable period in 2025, it was primarily the result of permanent differences for disallowed stock-based compensation pursuant to IRC Section 162(m), state taxes and discrete benefits for excess tax benefits on stock-based compensation.
The Company forecasts an estimated effective tax rate in 2026, exclusive of discrete benefits, of
12. Net Income per Share Attributable to Common Stock
Basic net income per share attributable to common stock is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period.
Diluted net income per share attributable to common stock is computed by giving effect to all potentially dilutive common stock equivalents to the extent they are dilutive. The dilutive effect of outstanding options, RSUs and warrants is reflected in diluted net income per share attributable to common stock by application of the treasury stock method. The calculation of diluted net income per share attributable to common stock excludes all anti-dilutive common shares.
The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis to each class of common stock, and the resulting basic and diluted net income per share attributable to common stockholders are, therefore, the same for both Class A and Class B common stock on both an individual and combined basis.
The following table sets forth the computation of basic and diluted net income per share attributable to common stock (in thousands except share and per share data):
|
|
Three Months Ended March 31, |
|
||||
|
|
2026 |
|
2025 |
|
||
Numerator: |
|
|
|
|
|
||
Net income |
|
$ |
|
$ |
|
||
Denominator: |
|
|
|
|
|
||
Weighted-average shares of common stock — basic |
|
|
|
|
|
||
Dilutive effect of stock options |
|
|
|
|
|
||
Dilutive effect of RSUs |
|
|
|
|
|
||
Dilutive effect of warrants |
|
|
|
|
|
||
Weighted-average shares of common stock — diluted |
|
|
|
|
|
||
Net income per share |
|
|
|
|
|
||
Basic |
|
$ |
|
$ |
|
||
Diluted |
|
$ |
|
$ |
|
||
The following table summarizes the weighted-average number of securities that were excluded from the computation of diluted net income per share attributable to common stock as their inclusion would have been antidilutive:
|
|
Three Months Ended March 31, |
|
||||
|
|
2026 |
|
2025 |
|
||
RSUs |
|
|
|
|
|
||
16
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
As a leading provider of cloud-based bill payment technology and solutions, we deliver our next-generation product suite through a modern technology stack to a broad and diverse base of business and financial institution clients. Our platform was used by approximately 53 million consumers and businesses globally in December 2025 to pay their bills, move money and engage with our clients. We serve billers of all sizes that primarily provide non-discretionary services across a variety of industry verticals, including utilities, financial services, insurance, government, telecommunications, real estate management, education, consumer finance, healthcare, business to business (B2B) and small business. We also serve financial institutions by providing them with a modern platform that their customers use for bill payment, account-to-account transfers and person-to-person transfers. By powering this comprehensive network of billers and financial institutions, each with their own set of bill payment requirements, we believe we have created an enviable feedback loop that enables us to continuously drive innovation, grow our business and uniquely improve the electronic bill payment experience for participants in the bill payment ecosystem.
Our platform provides our clients with easy-to-use, flexible and secure electronic bill payment experiences powered by an omni-channel payment infrastructure that allows consumers to pay their bills using their preferred payment type and channel. Because our biller platform is developed on a single code base and leverages a SaaS infrastructure, we can rapidly deploy new features and tools to our entire biller base simultaneously. Through a single point of integration to our billers’ core financial and operating systems, our mission-critical solutions provide our billers with a payments operating system that helps them collect revenue faster and more profitably and empower their consumers with the information and transparency needed to control their finances.
Transactions Processed
|
Three Months Ended March 31, |
|
|
|
|||||
|
2026 |
|
2025 |
|
% Growth |
|
|||
|
(in millions) |
|
|
|
|||||
Transactions processed |
|
203.4 |
|
|
173.2 |
|
|
17.4 |
% |
We define transactions processed as the number of revenue generating payment transactions, such as checks, credit card and debit card transactions, automated clearing house (ACH) items and emerging payment types, which are initiated and generally processed through our platform during a period. The number of transactions also includes account-to-account and person-to-person transfers. The increase in number of transactions processed during the three months ended March 31, 2026 as compared to the same period in 2025 was primarily driven by the addition of new billers and increased transactions from both new and existing billers.
Other Key Factors and Trends Affecting Our Operating Results
The discussion below includes a number of forward-looking statements regarding our future performance. For a discussion of important factors, including the continuing development of our business and other factors which could cause actual results to differ materially from matters referred to below, see the discussions under “Risk Factors” and “Special Note Regarding Forward-Looking Statements” herein and in the 2025 Form 10-K.
Impact of Economic and Inflationary Trends
We continued to operate in an environment of elevated macroeconomic uncertainty during the first quarter of 2026. Although inflation has moderated from prior periods, consumer spending patterns and our cost structure remain affected by persistent pricing pressures, impending tariffs, and trade policy developments. Furthermore, heightened geopolitical instability stemming from the ongoing Iran war has exacerbated volatility in energy markets. Broader uncertainty relating to interest rates and these geopolitical tensions also continues to affect the operating environment.
Inflationary conditions and volatility in energy markets could indirectly affect our business by increasing customer bills, particularly in the utility sector, while also contributing to higher operating costs throughout the economy. Rapid increases in energy prices may place added pressure on household budgets, increase delinquencies, or alter payment timing patterns, which could adversely affect transaction mix and collections activity.
These conditions could affect consumer payment behavior in countervailing ways. Consumers experiencing financial strain may defer payments, shift to lower-cost payment methods, or make partial and more frequent payments. While deferrals and lower-cost methods could reduce our average revenue per transaction and overall payment volume, an increase in partial payment activity might increase overall transaction counts.
However, this dynamic may create a compounding effect on our unit economics. Any such increase in transaction
17
volumes could trigger a proportional rise in our interchange, network, and processing fees. Because these elevated costs of revenue might offset the potential gains from higher transaction counts, this cycle could frequently yield flat net revenue growth. We may be unable to fully offset these interrelated pressures through pricing actions, as any such adjustments typically lag behind the impact of rising costs. As a result, an inability to fully offset these pressures in real-time might continue to adversely affect our margins, operating results, and financial condition.
Additionally, beyond these external economic pressures, our ability to scale efficiently depends on our capacity to quickly hire, train, and retain a high-performing workforce. We offer competitive wages and invest in employee well-being to meet our customers’ increasing needs and support our long-term growth. While employee-related costs naturally fluctuate, they have trended upward alongside our business expansion, and we expect this trajectory to continue as we scale.
Non-GAAP Measures
We use supplemental measures of our performance that are derived from our consolidated financial information but which are not presented in our condensed consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles, or GAAP. These supplemental non-GAAP measures include contribution profit, adjusted gross profit, adjusted EBITDA and free cash flow.
Contribution Profit
We calculate contribution profit as gross profit plus other cost of revenue. Other cost of revenue equals cost of revenue less interchange, assessment and other network fees paid by us to our payment processors.
Adjusted Gross Profit
We calculate adjusted gross profit as gross profit adjusted for non-cash items, primarily stock-based compensation and amortization of acquisition-related intangible assets and capitalized software development costs.
Adjusted EBITDA
We calculate adjusted EBITDA as net income before interest income (expense), net, other income (expense), depreciation and amortization of acquisition-related intangible assets and capitalized software development costs, and income taxes, adjusted to exclude the effects of net foreign exchange gain (loss), stock-based compensation expense and certain nonrecurring expenses that management believes are not indicative of ongoing operations.
Free Cash Flow
We calculate free cash flow as net cash provided by (used in) operating activities less capital expenditures, other intangible assets acquired, and capitalized internal-use software development costs.
How we use Non-GAAP Measures
We use non-GAAP measures to supplement financial information presented on a GAAP basis. We believe that excluding certain items from our GAAP results allows management and our board of directors to more fully understand our consolidated financial performance from period to period and helps management project our future consolidated financial performance as forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures. Moreover, we believe these non-GAAP measures provide our investors with useful information to help them evaluate our operating results by facilitating an enhanced understanding of our operating performance and enabling them to make more meaningful period-to-period comparisons. In particular, we exclude interchange, assessment and other network fees in the presentation of contribution profit because we believe inclusion is less directly reflective of our operating performance as we do not control the payment channel used by consumers, which is the primary determinant of the amount of interchange, assessment and other network fees. We use contribution profit to measure the amount available to fund our operations after interchange and assessment fees, which are directly linked to the number of transactions we process and thus our revenue and gross profit. There are limitations to the use of the non-GAAP measures presented in this report. Our non-GAAP measures may not be comparable to similarly titled measures of other companies; other companies, including companies in our industry, may calculate non-GAAP measures differently than we do, limiting the usefulness of those measures for comparative purposes. These non-GAAP measures should not be considered in isolation from or as a substitute for financial measures prepared in accordance with GAAP.
We also urge you to review the reconciliation of these non-GAAP financial measures included below. To properly and prudently evaluate our business, we encourage you to review the condensed consolidated financial statements and related notes included elsewhere in this report and to not rely on any single financial measure to evaluate our business.
18
Contribution Profit
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
|
(in thousands) |
|
||||
Gross profit |
$ |
86,232 |
|
$ |
66,024 |
|
Plus: other cost of revenue |
|
23,467 |
|
|
21,618 |
|
Contribution profit |
$ |
109,699 |
|
$ |
87,642 |
|
In general, contribution profit is driven by the number of transactions we process offset by network fees associated with processing those transactions. The amount of contribution profit per transaction may vary due to a variety of factors substantially outside of our control, including client size, type and industry as well as whether the client is a biller, financial institution or other partner. Contribution profit for the three months ended March 31, 2026 increased approximately 25.2%, as compared to the same period in 2025. The increase was driven by growth in transaction count and volume driven from both new and existing billers and financial institutions.
Adjusted Gross Profit
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
|
(in thousands) |
|
||||
Gross profit |
$ |
86,232 |
|
$ |
66,024 |
|
Stock-based compensation |
|
69 |
|
|
66 |
|
Amortization of capitalized software development costs |
|
6,056 |
|
|
5,638 |
|
Amortization of acquisition-related intangibles |
|
— |
|
|
828 |
|
Adjusted gross profit |
$ |
92,357 |
|
$ |
72,556 |
|
Adjusted gross profit for the three months ended March 31, 2026 increased 27.3%, as compared to the same period in 2025. Adjusted gross profit is driven primarily by the same factors that impact gross profit with the exception of excluding the amortization and stock-based compensation recorded in cost of revenue. Adjusted gross profit improved in line with contribution profit. Adjusted gross profit as a percentage of contribution profit increased due to realization of economies of scale.
Adjusted EBITDA
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
|
(in thousands) |
|
||||
Net income — GAAP |
$ |
20,881 |
|
$ |
13,813 |
|
Interest income, net |
|
(2,531 |
) |
|
(2,062 |
) |
Provision for income taxes |
|
8,210 |
|
|
3,988 |
|
Amortization of capitalized software development costs |
|
8,916 |
|
|
8,426 |
|
Amortization of acquisition-related intangibles |
|
817 |
|
|
2,137 |
|
Depreciation |
|
159 |
|
|
177 |
|
EBITDA |
$ |
36,452 |
|
$ |
26,479 |
|
|
|
|
|
|
||
Adjustments |
|
|
|
|
||
Foreign exchange gain |
|
(8 |
) |
|
(50 |
) |
Stock-based compensation |
|
5,974 |
|
|
3,545 |
|
Adjusted EBITDA |
$ |
42,418 |
|
$ |
29,974 |
|
Adjusted EBITDA is a measure of profitability and generally is expected to move in line with revenue, contribution profit, gross profit and adjusted gross profit. Adjusted EBITDA increased 41.5% in the three months ended March 31, 2026, as compared to the same period in 2025. The increase was primarily attributable to higher revenues driven by growth in transaction volumes from both new and existing billers and financial institutions. The rate of growth in Adjusted EBITDA exceeded the rate of growth in both contribution profit and adjusted gross profit, reflecting the operating leverage inherent in our business, as certain operating expenses are largely fixed and did not increase in proportion to the growth in revenue.
19
Free Cash Flow
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
|
(in thousands) |
|
||||
Net cash provided by operating activities |
$ |
30,452 |
|
$ |
50,441 |
|
Purchases of property and equipment |
|
(80 |
) |
|
(60 |
) |
Capitalized internal-use software development costs |
|
(9,461 |
) |
|
(9,278 |
) |
Free cash flow |
$ |
20,911 |
|
$ |
41,103 |
|
The decrease in free cash flow for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily driven by lower cash generated from operations, driven mainly by investment in working capital.
Results of Operations
The following table sets forth our condensed consolidated statements of operations for the periods presented:
|
Three Months Ended March 31, |
|
Change |
|
||||||||
|
2026 |
|
2025 |
|
$ |
|
% |
|
||||
|
(in thousands) |
|
|
|
|
|
||||||
Revenue |
$ |
358,441 |
|
$ |
275,235 |
|
$ |
83,206 |
|
|
30.2 |
% |
Cost of revenue |
|
272,209 |
|
|
209,211 |
|
|
62,998 |
|
|
30.1 |
% |
Gross profit |
|
86,232 |
|
|
66,024 |
|
|
20,208 |
|
|
30.6 |
% |
Gross margin (1) |
|
24.1 |
% |
|
24.0 |
% |
|
|
|
|
||
Operating expenses |
|
|
|
|
|
|
|
|
||||
Research and development |
|
16,333 |
|
|
15,101 |
|
|
1,232 |
|
|
8.2 |
% |
Sales and marketing |
|
30,210 |
|
|
26,051 |
|
|
4,159 |
|
|
16.0 |
% |
General and administrative |
|
13,137 |
|
|
9,183 |
|
|
3,954 |
|
|
43.1 |
% |
Total operating expenses |
|
59,680 |
|
|
50,335 |
|
|
9,345 |
|
|
18.6 |
% |
Income from operations |
|
26,552 |
|
|
15,689 |
|
|
10,863 |
|
|
69.2 |
% |
Interest income, net |
|
2,531 |
|
|
2,062 |
|
|
469 |
|
|
22.7 |
% |
Other income |
|
8 |
|
|
50 |
|
|
(42 |
) |
|
(84.0 |
)% |
Income before income taxes |
|
29,091 |
|
|
17,801 |
|
|
11,290 |
|
|
63.4 |
% |
Provision for income taxes |
|
8,210 |
|
|
3,988 |
|
|
4,222 |
|
|
105.9 |
% |
Net income |
$ |
20,881 |
|
$ |
13,813 |
|
$ |
7,068 |
|
|
51.2 |
% |
(1) Gross margin is calculated as gross profit divided by revenue.
The following table presents the components of our condensed consolidated statements of operations for the periods presented as a percentage of revenue:
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
Revenue |
|
100.0 |
% |
|
100.0 |
% |
Cost of revenue |
|
75.9 |
% |
|
76.0 |
% |
Gross profit |
|
24.1 |
% |
|
24.0 |
% |
Operating expenses |
|
|
|
|
||
Research and development |
|
4.6 |
% |
|
5.5 |
% |
Sales and marketing |
|
8.4 |
% |
|
9.5 |
% |
General and administrative |
|
3.7 |
% |
|
3.3 |
% |
Total operating expenses |
|
16.7 |
% |
|
18.3 |
% |
Income from operations |
|
7.4 |
% |
|
5.7 |
% |
Interest income, net |
|
0.7 |
% |
|
0.7 |
% |
Other income |
|
0.0 |
% |
|
0.0 |
% |
Income before income taxes |
|
8.1 |
% |
|
6.4 |
% |
Provision for income taxes |
|
2.3 |
% |
|
1.4 |
% |
Net income |
|
5.8 |
% |
|
5.0 |
% |
20
Comparison of the Three Months Ended March 31, 2026 and 2025
Revenue
The increase in revenue was primarily driven by an increase in the number of transactions processed, which was driven by the implementation of new billers and increased transactions from our existing billers.
Cost of Revenue, Gross Profit and Gross Margin
The increase in cost of revenue corresponds with higher revenue and transaction volumes, as it consists primarily of interchange fees and processor costs.
While gross profit increased in tandem with revenue growth, gross margin remained flat, as a shift in customer mix towards high-volume enterprise billers with lower margins was offset by improved economies of scale.
Research and Development Expenses
Research and development expenses increased primarily due to higher employee-related costs, including benefits, driven by headcount growth and annual compensation adjustments. The remaining variance was driven by a rise in cloud computing services expenses, reflecting greater utilization of our cloud-based infrastructure and expanded data processing demands, as well as higher amortization of capitalized internal-use software development costs.
Sales and Marketing Expenses
The increase in sales and marketing expenses was primarily driven by higher reseller commissions and employee-related costs.
General and Administrative Expenses
The increase in general and administrative expenses was primarily driven by higher stock-based compensation, elevated employee compensation and related costs, and greater professional and legal fees and insurance premiums related to certain business policies.
Interest income, net
The change in interest income, net, was mainly due to higher cash balances held with banks, offset by lower interest rates.
Income Taxes
The change in provision for income taxes as well as the increase in the Company's effective tax rate, which was 28.2% for the three months ended March 31, 2026, as compared to 22.4% for the same period in the prior year, were primarily due to higher pre-tax income, increased forecasted executive stock-based compensation in 2026 and more significant excess tax benefits on stock-based compensation in 2025.
Liquidity and Capital Resources
Sources and Uses of Funds
As of March 31, 2026, we had $338.8 million of unrestricted cash and cash equivalents. We believe that existing unrestricted cash and cash equivalents will be sufficient to support our working capital, capital expenditure requirements, and other commitments described in Note 8, for at least the next 12 months. Since inception, we have financed operations primarily through the sale of equity securities and revenue from payment transaction fees. Our principal uses of cash are funding operations, which primarily consist of employee-related costs, payments to third parties to fulfill our payment transactions and payments to sales and marketing partners. Although this is subject to change based on market opportunities or changing priorities, we currently do not have any material planned capital expenditures or acquisitions in the next 12 months.
From time to time, we may explore additional financing sources and means to lower our cost of capital, which could include equity, equity-linked and debt financing. We cannot assure you that any additional financing will be available to us on acceptable terms, or at all. The inability to raise capital would adversely affect our ability to achieve our business objectives. If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders will be diluted. If we raise additional financing by the incurrence of indebtedness, we may be subject to increased fixed payment obligations and could be subject to additional restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business or execute our growth strategy. Any future indebtedness we incur may result in terms that could be unfavorable to equity investors.
21
Historical Cash Flows
The following table summarizes our condensed consolidated statements of cash flows:
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
|
(in thousands) |
|
||||
Net cash provided by (used in) |
|
|
|
|
||
Operating activities |
$ |
30,452 |
|
$ |
50,441 |
|
Investing activities |
|
(9,443 |
) |
|
(8,287 |
) |
Financing activities |
|
(3,283 |
) |
|
(1,892 |
) |
Effects of foreign exchange on cash |
|
(136 |
) |
|
(25 |
) |
Net increase in cash, cash equivalents and restricted cash |
$ |
17,590 |
|
$ |
40,237 |
|
Net Cash Provided by Operating Activities
Our primary source of operating cash is revenue from payment transaction fees. Our primary uses of operating cash are personnel-related costs, payments to third parties to fulfill our payment transactions and payments to sales and marketing partners. Net cash provided by operating activities for the three months ended March 31, 2026 was $30.5 million. Net income was $20.9 million, adjusted for non-cash charges of $16.9 million, consisting primarily of depreciation and amortization, stock-based compensation, amortization of capitalized contract acquisition costs and warrant cost, non-cash lease expense and provision for expected credit losses, which contributed positively to cash provided from operating activities. This was offset by net cash outflows of $7.3 million due to changes in our operating assets and liabilities.
Net cash provided by operating activities for the three months ended March 31, 2025 was $50.4 million. Net income was $13.8 million, adjusted for non-cash charges of $14.2 million consisting primarily of depreciation and amortization, stock-based compensation, amortization of capitalized contract acquisition costs and warrant cost, non-cash lease expense and provision for expected credit losses, which contributed positively to cash provided from operating activities. This was additionally supported by net cash inflows of $22.4 million provided by changes in our operating assets and liabilities.
Net Cash Used in Investing Activities
Net cash used in investing activities for the three months ended March 31, 2026 consisted of $9.5 million of capitalized internal-use software development costs and $0.1 million of purchases of property and equipment, which was offset by $0.1 million cash inflow from net change in interest-bearing deposits.
Net cash used in investing activities for the three months ended March 31, 2025 consisted of $9.3 million of capitalized internal-use software development costs and $0.1 million of purchases of property and equipment, which was offset by $1.1 million cash inflow from net change in interest-bearing deposits.
Net Cash Used in Financing Activities
Net cash used in financing activities for the three months ended March 31, 2026 consisted primarily of $3.3 million of payments of taxes withheld on net settled vesting of restricted stock units.
Net cash used in financing activities for the three months ended March 31, 2025 consisted primarily of $1.9 million of payments of taxes withheld on net settled vesting of restricted stock units, which was offset by $0.1 million of proceeds from the exercise of stock-based awards by employees.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures of contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our significant accounting policies are described in Note 2, “Basis of Presentation and Summary of Significant Accounting Policies” to our consolidated financial statements included in our 2025 Form 10-K. There have been no material changes in our critical accounting policies and estimates since December 31, 2025.
Recent Accounting Pronouncements
See Note 2 “Basis of Presentation and Summary of Significant Accounting Policies” in the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for a full description of recent accounting pronouncements, including the respective dates of adoption or expected adoption and effects on our condensed consolidated financial statements contained in Item 1 of this Quarterly Report.
22
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
There have been no material changes in our exposures to market risk since December 31, 2025. For details on the Company’s interest rate and foreign currency exchange, see Part I, Item 7A. “Quantitative and Qualitative Information About Market Risk” in our 2025 Form 10-K.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended ("the Exchange Act")), that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026, the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
23
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may be involved in claims, regulatory examinations or investigations and legal proceedings arising in the ordinary course of our business. The outcome of any such claims or proceedings, regardless of the merits, and the Company’s ultimate liability, if any, is inherently uncertain. Furthermore, we may become subject to stockholder inspection demands under Delaware law and derivative or other similar litigation. From time to time as appropriate, we accrue liabilities related to legal claims in our financial statements. We are not currently party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on our business, operating results, cash flows or financial condition.
Item 1A. Risk Factors.
There have been no material changes in the risk factors previously disclosed in Item 1A. of our 2025 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
Except as set forth below, during the quarter ended March 31, 2026, none of the Company’s directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as such terms are defined in Item 408(a) of Regulation S‑K.
On
On
24
Item 6. Exhibits.
(a) Exhibits
|
|
|
Incorporated by Reference |
|
|
|||||||
Exhibit Number |
|
Description |
|
Form |
|
File No. |
|
Exhibit |
|
Filing Date |
|
Filed/ Furnished Herewith |
3.1.1 |
|
Amended and Restated Certificate of Incorporation of Paymentus Holdings, Inc. |
|
8-K |
|
001-40429 |
|
3.1 |
|
May 28, 2021 |
|
|
3.1.2 |
|
Amendment to Amended and Restated Certificate of Incorporation of Paymentus Holdings, Inc. |
|
10-Q |
|
001-40429 |
|
3.1 |
|
August 7, 2023 |
|
|
3.2 |
|
|
8-K |
|
001-40429 |
|
3.2 |
|
November 14, 2022 |
|
|
|
10.1+ |
|
Form of Restricted Stock Unit Agreement for Employees under the 2021 Equity Incentive Plan |
|
8-K |
|
001-40429
|
|
10.1 |
|
March 13, 2026 |
|
|
10.2+ |
|
|
|
|
|
|
|
|
|
|
X |
|
10.3+ |
|
Form of Restricted Stock Award Agreement under the 2021 Equity Incentive Plan |
|
|
|
|
|
|
|
|
|
X |
31.1 |
|
|
|
|
|
|
|
|
|
|
X |
|
31.2 |
|
|
|
|
|
|
|
|
|
|
X |
|
32.1* |
|
|
|
|
|
|
|
|
|
|
X |
|
32.2* |
|
|
|
|
|
|
|
|
|
|
X |
|
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
|
|
|
|
|
|
|
|
|
X
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document |
|
|
|
|
|
|
|
|
|
X
|
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
|
|
|
|
|
|
X
|
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
|
|
|
|
|
|
|
X
|
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
|
|
|
|
|
|
|
X
|
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
|
|
|
|
|
|
|
X
|
104 |
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
|
|
|
|
|
|
|
|
|
X
|
+ Indicates a management contract or compensatory plan or arrangement
* The certifications attached as Exhibit 32.1 and 32.2 that accompany this report are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Paymentus Holdings, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this report, irrespective of any general incorporation language contained in such filing.
25
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
PAYMENTUS HOLDINGS, INC. |
|
|
|
|
|
Date: May 4, 2026 |
|
By: |
/s/ Dushyant Sharma |
|
|
|
Dushyant Sharma |
|
|
|
Chairman, President and Chief Executive Officer |
|
|
|
(Principal Executive Officer) |
|
|
|
|
Date: May 4, 2026 |
|
By: |
/s/ Sanjay Kalra |
|
|
|
Sanjay Kalra |
|
|
|
Senior Vice President and Chief Financial Officer |
|
|
|
(Principal Financial and Accounting Officer) |
26
PAYMENTUS HOLDINGS, INC.
2021 EQUITY INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
NOTICE OF RESTRICTED STOCK UNIT GRANT
(INDEPENDENT CONTRACTORS)
Unless otherwise defined herein, the terms defined in the Paymentus Holdings, Inc. 2021 Equity Incentive Plan (the “Plan”) will have the same defined meanings in this Restricted Stock Unit Agreement, which includes the Notice of Restricted Stock Unit Grant (the “Notice of Grant”), the Terms and Conditions of Restricted Stock Unit Grant, attached hereto as Exhibit A, and all other exhibits, appendices, and addenda attached hereto (including any additional terms and conditions for Participant’s country set forth in Appendix 1 to the Terms and Conditions of Restricted Stock Unit Grant (the “Country Addendum”) and restrictive covenants set forth in Appendix 2 to the Terms and Conditions of Restricted Stock Unit Grant (the “Restrictive Covenants Addendum”)) (together, the “Award Agreement”).
Participant Name:
Address:
The undersigned Participant has been granted an Award of Restricted Stock Units, subject to the terms and conditions of the Plan and this Award Agreement, as follows:
Grant Number: ______________________________
Grant Date: ______________________________
Total Number of Restricted Stock Units: ______________________________
Vesting Schedule:
For purposes of this Award Agreement, “Quarterly Vesting Dates” with respect to any calendar year means February 15, May 15, August 15, and November 15.
Subject to any acceleration or suspension provisions contained in the Plan, this Award Agreement or any other written agreement authorized by the Administrator between Participant and the Company (or any Parent or Subsidiary of the Company, as applicable) governing the terms of this Award, The Restricted Stock Units will be scheduled to vest according to the following vesting schedule:
One-fifth (1/5th) of the Total Number of Restricted Stock Units (as set forth above) subject to this Award Agreement will be scheduled to vest on the one (1) year anniversary of the Grant Date (such first vesting date, the “First Vesting Date”), and thereafter, one‑twentieth (1/20th) of the Total Number of Restricted Stock Units subject to this Award Agreement will be scheduled to vest on each of the sixteen (16) Quarterly Vesting Dates that occur after the First Vesting Date, beginning with the second Quarterly Vesting Date following the First Vesting Date, subject to Participant continuing to be a Service Provider through the applicable vesting date.
By Participant’s signature or by Participant’s acceptance of the Award Agreement via the Company’s designated electronic acceptance procedures and the signature of the representative of the Company below, Participant and the Company agree that this Award of Restricted Stock Units is granted under and governed by the terms and conditions of the Plan and this Award Agreement, including the Terms and Conditions of Restricted Stock Unit Grant, attached hereto as Exhibit A, and all other exhibits, appendices and addenda attached hereto (including any Country Addendum and Restrictive Covenants Addendum), all of which are made a part of this document. Participant acknowledges receipt of a copy of the Plan. Participant has reviewed the Plan and this Award Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Award Agreement and fully understands all provisions of the Plan and this Award Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan or this Award Agreement. Participant further agrees to notify the Company upon any change in Participant’s residence address indicated below.
PARTICIPANT
|
|
PAYMENTUS HOLDINGS, INC.
|
_____________________________________________ Signature
|
|
_____________________________________________ Signature |
_____________________________________________ Print Name |
|
_____________________________________________ Print Name |
|
|
|
|
|
_____________________________________________ Title |
Residence Address: |
|
______________________________________________ |
|
______________________________________________ |
|
|
|
|
|
- 2 -
EXHIBIT A
PAYMENTUS HOLDINGS, INC.
2021 EQUITY INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT GRANT
Consistent with Section 9(e) of this Award Agreement and for the avoidance of doubt, Participant further acknowledges, notwithstanding anything to the contrary anywhere in this Award Agreement or any other employment or other agreement Participant has with the Company, that unless this Award is provided in accordance with the terms of the Participant’s employment agreement or signed offer letter with the Company, this Award is solely discretionary and is not and shall not be deemed part of Participant’s normal or expected compensation and is only provided as an additional compensation designed for Participant to perform their duty over and above what is covered in the normal or expected compensation and employment agreement or offer letter. This Award is not part of Participant’s regular compensation and salary with the Company, and as such Participant is not entitled to this Award as part of Participant’s employment with or service to the Company. Therefore, actions taken in accordance with the terms of this Award are not and shall not be deemed as changing employment salary or terms of the Participant’s employment or service with the Company.
-2-
-3-
-4-
-5-
Participant understands that the Company may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Restricted Stock Units or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the exclusive purpose of implementing, administering and managing the Plan.
Participant understands that Data will be transferred to a third-party stock plan service provider, which is assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country of operation (e.g., the United States) may have different data privacy laws and protections than Participant’s country. Participant understands that if he or she resides outside the United States, he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. Participant authorizes the Company, any stock plan service provider selected by the Company and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing his or her participation in the Plan. Participant understands that Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan. Participant understands if he or she resides outside the United States, he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Company’s local human resources representative. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or her consent, his or her status as a Service Provider will not be adversely affected. The only adverse consequence of refusing or withdrawing Participant’s consent is that the Company would not be able to grant Participant Restricted Stock Units or other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her consent may affect Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact the Company’s local human resources representative.
-6-
English language, or has consulted with an adviser who is sufficiently proficient in the English language, so as to allow Participant to understand the terms and conditions of this Award Agreement. If Participant has received this Award Agreement or any other document related to the Plan translated into a language other than the English language and if the meaning of the translated version is different than the English version, the English language version will control.
-7-
-8-
This Agreement does not limit the right of the Company or Participant to seek any provisional remedy, including, without limitation, injunctive or similar relief, from any court of competent jurisdiction as may be necessary to protect the Company’s or Participant’s rights and interests pending the outcome of an arbitration including but not limited to claims for violation of any non-disclosure or other agreement between Participant and the Company for the protection of confidential and proprietary information and trade secrets and/or invention assignment.
Participant and the Company agree that any dispute or claim arising out of or relating to this agreement shall be brought, heard, and arbitrated only on an individual basis, and not as a plaintiff or class member in any purported class, collective, or representative action. The arbitrator shall not have the authority to consolidate the claims of other parties into a single proceeding, nor to certify a class action.
Either the Company or Participant may bring an action in court to compel arbitration under this Agreement and to enforce an arbitration award, and shall be entitled to recover fees and costs associated with any such motion to compel arbitration or to enforce an arbitration award. Otherwise, except as provided in this Section 28, neither the Company nor Participant shall initiate or prosecute any lawsuit or claim in any way related to any arbitrable claim, including without limitation any claim as to the making, existence, validity, arbitrability or enforceability of this Agreement.
-9-
* * *
-10-
APPENDIX 1
PAYMENTUS HOLDINGS, INC.
2021 EQUITY INCENTIVE PLAN
COUNTRY ADDENDUM TO RESTRICTED STOCK UNIT AGREEMENT
Unless otherwise defined herein, capitalized terms used in this Country Addendum to Restricted Stock Unit Agreement (the “Country Addendum”) will be ascribed the same defined meanings as set forth in the Restricted Stock Unit Agreement of which this Country Addendum forms a part (or the Plan or other written agreement as specified in the Restricted Stock Unit Agreement). If you are an independent contractor, any reference to a “Participant’s employment” with the Company in this Country Addendum shall be deemed to mean service with the Company or its Parents or Subsidiaries pursuant to your independent contractor agreement(s) with the Company or its Parents or Subsidiaries.
Terms and Conditions
This Country Addendum includes additional terms and conditions that govern the Award of Restricted Stock Units granted to Participant under the Plan to the extent Participant resides and/or works in one of the countries listed below. If Participant is a citizen or resident (or is considered as such for local law purposes) of a country other than the country in which Participant is currently residing and/or working, or if Participant transfers employment and/or residency to another country after the Award of Restricted Stock Units is granted, the Company, in its discretion, will determine to what extent the terms and conditions contained herein will apply to Participant.
Notifications
This Country Addendum also includes information regarding securities laws, exchange controls and certain other issues of which Participant should be aware with respect to Participant’s participation in the Plan. The information is provided solely for Participant’s convenience and is based on the securities, exchange control and other Applicable Laws in effect in the respective countries as of March 2026. Such Applicable Laws often are complex and change frequently. As a result, the Company strongly recommends that Participant not rely on the information in this Country Addendum as the only source of information relating to the consequences of Participant’s participation in the Plan because the information may be out of date at the time Participant vests in or receives or sells the Shares covered by the Restricted Stock Units.
In addition, the information contained in this Country Addendum is general in nature and may not apply to Participant’s particular situation, and the Company is not in a position to assure Participant of any particular result. Participant should seek appropriate professional advice as to how the Applicable Laws in Participant’s country may apply to his or her situation.
Finally, if Participant is a citizen or resident (or is considered as such for local law purposes) of a country other than the one in which Participant currently is residing and/or working, or if Participant transfers residence and/or employment to another country after the grant of the Restricted Stock Units, the information in this Country Addendum may not apply to Participant in the same manner.
CANADA
Terms and Conditions
Settlement of Restricted Stock Units. Notwithstanding any discretion in Section 9.4 of the Plan and without prejudice to Section 7 of the Restricted Stock Unit Agreement, Restricted Stock Units will be settled in Shares only, not in cash.
Termination. The following provision replaces the second paragraph of Sections 5 and 11(h) of the Restricted Stock Unit Agreement in its entirety:
For purposes of the Restricted Stock Units, Participant’s status as a Service Provider will be considered terminated (regardless of the reason for such termination) as of the date that is the earliest of: (i) the date of termination of Participant’s status as a Service Provider, (ii) the date on which Participant receives notice of termination of his or her status as a Service Provider, and (iii) the date on which Participant ceases to be providing services to the Company, the Company or any other Subsidiary or Parent of the Company, which date shall not be extended by any notice period or period of pay in lieu of such notice mandated under the terms of Participant’s service agreement, if any. The Administrator shall have the exclusive discretion to determine when Participant no longer is actively providing services for purposes of the Award.
Language. The parties acknowledge that it is Participant’s express wish that the Restricted Stock Unit Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.
Les parties reconnaissent que le participant souhaite expressément que le contrat d'attribution, ainsi que tous les documents, avis et procédures judiciaires conclus, donnés ou intentés en vertu des présentes ou s'y rapportant directement ou indirectement, soient rédigés en anglais.
Data Privacy. This provision supplements Section 14 of the Restricted Stock Unit Agreement:
Participant hereby authorizes the Company, and any agents or representatives to (i) discuss with and obtain all relevant information from all personnel, professional or non-professional, involved in the administration and operation of the Plan, and (ii) disclose and discuss any and all information relevant to the Plan with their advisers. Participant further authorizes the Company and any agents or representatives to record such information and to keep such information in Participant’s file.
Notifications
Securities Law Notification. Participant is permitted to sell Shares acquired under the Plan through the designated broker appointed under the Plan, if any, provided the resale of Shares acquired under the Plan takes place outside Canada through the facilities of the exchange on which the Shares are then listed.
Binding Arbitration / Waiver of Jury Trial
Participant and the Company mutually agree to waive, to the fullest extent permitted under applicable law, their respective rights to resolution of disputes in a court of law by a judge or jury and agree to resolve any dispute by arbitration as set forth below. This agreement to arbitrate (“Arbitration
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Agreement”) survives after the Award Agreement terminates or Participant’s relationship with the Company ends. To the fullest extent permitted under applicable law, any arbitration under this Arbitration Agreement will take place on an individual basis, and class arbitrations are not permitted.
Except as expressly provided below and above, this Arbitration Agreement applies to all disputes between Participant and the Company, including the Company’s affiliates, subsidiaries, parents, successors and assigns, and each of their respective officers, directors, employees, agents, or shareholders (each a “Claim” and collectively, “Claims”) These Claims include, to the fullest extent permitted under applicable law, but are not limited to, any dispute or claim, whether based on past, present, or future events, arising out of or relating to the Award Agreement and prior versions thereof (including the breach, termination, enforcement, interpretation or validity thereof), Participant’s relationship with the Company, and all other common law claims between Participant and the Company or its affiliates and their respective employees, officers, directors and shareholders. To the fullest extent permissible under applicable law, disputes concerning the arbitrability of a Claim (including disputes about the scope, applicability, enforceability, revocability, or validity of the Arbitration Agreement) shall be decided by the arbitrator.
For clarity, Participant and the Company agree that this Arbitration Agreement does not affect any of Participant’s statutory rights under any minimum standards legislation, and Participant is not restricted from commencing a complaint to the appropriate governmental authority under any minimum standards legislation including but not limited to the local minimum employment standards legislation, the local occupational health and safety legislation, the local pay equity legislation, the local workplace safety insurance legislation; in Ontario, the Employment Standards Act, 2000, S.O. 2000, c. 41, Occupational Health and Safety Act, R.S.O. 1990, c. O.1, Pay Equity Act, R.S.O. 1990, c. P.7, Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sched. A; and other similar legislation in every other province and territory (if applicable). Furthermore, Participant and the Company agree that, to the fullest extent permitted under applicable law, disputes involving alleged breaches of the local human rights code or legislation shall be resolved by arbitration; but nothing in this Arbitration Agreement limits or waives any of Participant’s substantive rights under local human rights code or legislation.
By agreeing to arbitration, Participant understands that Participant and the Company are waiving the right to sue in court or have a jury trial for any Claim or Claims, except as otherwise provided in this Arbitration Agreement or required by applicable law. This Arbitration Agreement is intended to require arbitration of every claim or dispute that can lawfully be arbitrated.
Prohibition of Class Actions and Non-Individualized Relief. Participant understands and agrees that, to the fullest extent permissible under applicable law, Participant and the Company may each bring claims in arbitration against the other only in an individual capacity and not on a class, collective or representative basis (“Class Action Waiver”). Participant understands and agrees that Participant and the Company both are waiving the right to pursue or have a dispute resolved as a plaintiff or class member in any purported class, collective or representative proceeding. An arbitrator appointed pursuant to this arbitration agreement shall have no authority to consider or resolve any claim or issue any relief on any basis other than an individual basis. The arbitrator shall have no authority to consider or resolve any claim or issue any relief on a class, collective, or representative basis. Notwithstanding any other provision of this Award Agreement, or the Arbitration Agreement, or the Alternative Dispute Resolution Institute of Canada Inc. Arbitration Rules, disputes regarding the scope, applicability, enforceability, revocability or validity of the Class Action Waiver may be resolved only by a civil court of competent jurisdiction and not by an arbitrator. In any case in which: (1) the dispute is filed as a class, collective, or representative action and
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(2) there is a final judicial determination that the Class Action Waiver is unenforceable as to any Claims, the class, collective, and/or representative action in respect of such Claims must be litigated in a civil court of competent jurisdiction, but the Class Action Waiver shall be enforced in arbitration on an individual basis as to all other Claims to the fullest extent possible.
Rules Governing Arbitration. Any arbitration conducted pursuant to this Arbitration Agreement shall be administered by the Alternative Dispute Resolution Institute of Canada Inc. Arbitration Rules (hereafter the “Rules”) and pursuant to the Rules. Notwithstanding the foregoing, if requested by Participant and if proper based on the facts and circumstances of the Claims presented, the arbitrator shall have the discretion to select a different set of arbitration rules, but in no event shall the arbitrator consolidate more than one person’s Claims, or otherwise preside over any form of class, collective or representative proceeding.
As part of the arbitration, both Participant and the Company will have the opportunity for reasonable discovery of non-privileged information that is relevant to the Claim. The arbitrator may award any individualized remedies that would be available in court. The arbitrator may award declaratory or injunctive relief only in favor of the individual party seeking relief and only to the extent necessary to provide relief warranted by that party’s individual Claims. The arbitrator will provide a reasoned written statement of the arbitrator’s decision which shall explain the award given and the findings and conclusions on which the decision is based.
The arbitrator will decide the substance of all Claims in accordance with applicable law and will honor all claims of privilege recognized by law. The arbitrator shall not be bound by rulings in prior arbitrations involving any other person or employee, but the arbitrator is bound by rulings in prior arbitrations involving the same employee to the extent required by applicable law. The arbitrator’s award shall be final and binding and judgment on the award rendered by the arbitrator may be entered in any court of competent jurisdiction, provided that such award may be challenged to the extent provided for under applicable law.
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Arbitration Fees and Awards. The payment of filing and arbitration fees will be governed by the Rules subject to the following modifications:
If Participant initiates arbitration under this Arbitration Agreement after participating in the optional negotiation process described below and is otherwise required to pay a filing fee under the Rules, the Company agrees that, unless Participant’s Claim is for $5,000 or more, Participant’s share of the filing and arbitration fees is limited to $50, and that, after Participant submits proof of payment of the filing fee to the Company, the Company will promptly reimburse Participant for all but $50 of the filing fee. If, however, the arbitrator finds that either the substance of Participant’s Claim or the relief sought in the Claim is frivolous, vexatious or brought for an improper purpose, then the payment of all such fees will be governed by the Rules.
If the Company initiates arbitration under this Arbitration Agreement, the Company will pay all filing and arbitration fees under the Rules.
With respect to any Claims brought by the Company against a Participant, the Company shall pay all costs unique to arbitration (as compared to the costs of adjudicating the same Claims before a court), including the regular and customary arbitration fees and expenses (to the extent not paid by the Company pursuant to the fee provisions above). However, if Participant is the party initiating arbitration, Participant shall be responsible for contributing up to an amount equal to the filing fee that would be paid to initiate the Claim in the court of general jurisdiction in the province in which Participant resides, unless a lower fee amount would be owed by Participant pursuant to the Rules, applicable law, or this Arbitration Agreement. Any dispute as to whether a cost is unique to arbitration shall be resolved by the arbitrator.
Except as provided in any applicable rules of civil procedure, each party shall pay its own legal fees and pay any costs that are not unique to the arbitration (i.e., costs that each party would incur if the Claim(s) were litigated in a court such as costs to subpoena witnesses and/or documents, take depositions and purchase deposition transcripts, copy documents, etc.).
At the end of any arbitration, the arbitrator may award reasonable fees and costs or any portion thereof to Participant if Participant prevails, to the extent authorized by applicable law.
Although the Company may have a right to an award of legal fees and non-filing fee expenses if it prevails in an arbitration, the Company agrees that it will not seek such an award.
If the arbitrator issues Participant an award that is greater than the value of the Company’s last written settlement offer made after Participant participated in good faith in the optional negotiation process described in this Arbitration Agreement, then the Company will pay Participant the amount of the award or CDN$1,000, whichever is greater.
Location and Manner of Arbitration. Unless Participant and the Company agree otherwise, any arbitration hearings under this Arbitration Agreement will take place before one (1) arbitrator (the “Arbitrator”) appointed in accordance with the Rules. The seat of the Arbitration will be Toronto unless otherwise agreed by the parties. The language of the arbitration shall be English unless otherwise agreed by the parties. The Arbitrator shall have the right to determine all questions of law and jurisdiction including questions as to whether a Claim is arbitrable and shall have the right to grant final and interim damages awards. There will be no appeal from the decision of the arbitrator on questions of fact, law, or mixed fact and law. If Participant’s Claim is for $25,000 or less, the Company agrees that Participant may
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choose whether the arbitration will be conducted solely on the basis of documents submitted to the arbitrator, through a telephonic hearing, or by an in-person hearing as determined by the Rules. If Participant’s Claim exceeds $25,000, the right to a hearing will be determined by the Rules.
Opting Out of Arbitration. Participant may opt out of the requirement to arbitrate pursuant to the terms of this subsection. If Participant does not wish to be subject to this Arbitration Agreement, Participant may opt out of arbitration by notifying the Company in writing of Participant’s desire to opt out of arbitration, which writing must be dated, signed and delivered by: (1) electronic mail to the Company, or (2) by certified mail, postage prepaid and return receipt requested, or by any nationally recognized delivery service that is addressed to Paymentus, 1595 16th Avenue, Richmond Hill, Ontario, L4B 3N9. In order to be effective, (a) the writing must clearly indicate Participant’s intent to opt out of this Arbitration Agreement, (b) the writing must include Participant’s name, phone number, and email address, and (c) the email or envelope containing the signed writing must be sent within 30 days of the date this Agreement is executed by Participant. Should Participant not opt out within the 30-day period, Participant and the Company shall be bound by the terms of this Arbitration Agreement in full, to the extent allowable by law. Participant should assume that in the future there may be lawsuits against the Company alleging class, collective, and/or representative Claims, in which the plaintiffs seek to act on Participant’s behalf, and which, if successful, could result in some monetary recovery to Participant. But if Participant does agree to arbitration with the Company under this Arbitration Agreement, then Participant is agreeing in advance that Participant will bring all such Claims, and seek all monetary and other relief, against the Company in an individual arbitration provision. Participant is also agreeing in advance that Participant will not participate in or seek to recover monetary or other relief for such Claims in any court action or class, collective, and/or representative action. Participant has the right to consult with counsel of Participant’s choice concerning this Arbitration Agreement and Participant will not be subject to retaliation if Participant exercises Participant’s right to assert claims or opt-out of this Arbitration Agreement.
Optional Pre-Arbitration Negotiation Process. Before initiating any arbitration or proceeding, Participant and the Company may agree to first attempt to negotiate any dispute, claim or controversy between the parties informally for 30 days, unless this time period is mutually extended by Participant and the Company. A party who intends to seek negotiation under this subsection must first send to the other a written notice of the dispute (“Notice”). The Notice must (1) describe the nature and basis of the claim or dispute; and (2) set forth the specific relief sought. All offers, promises, conduct and statements, whether oral or written, made in the course of the negotiation by any of the parties, their agents, employees, and lawyers are confidential, privileged and inadmissible for any purpose, including as evidence of liability or for impeachment, in arbitration or other proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the negotiation.
Third-Party Beneficiaries. This Arbitration Agreement shall be binding upon, and shall include any Claims brought by or against any third parties, including but not limited to Participant’s spouses, heirs, third-party beneficiaries and permitted assigns, where their underlying claim(s) arise out of or relate to Participant’s employment with the Company. To the extent that any third-party beneficiary to this Agreement brings claims against a party, those claims shall also be subject to this Arbitration Agreement.
General. This Arbitration Agreement shall be governed by the laws of the province in which Participant resides. If any provision of this Agreement is or becomes invalid or non-binding, the parties shall remain
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bound by all other provisions of this Agreement. In that event, the parties shall replace the invalid or non-binding provision with provisions that are valid and binding and that have, to the greatest extent possible, a similar effect as the invalid or non-binding provision, given the contents and purpose of this Agreement. Any notices to Participant shall be provided to Participant via the email address or physical address Participant provides to the Company during employment. Headings are for reference purposes only and in no way define, limit, construe or describe the scope or extent of such section. The words “include”, “includes” and “including” are deemed to be followed by the words “without limitation”. A party’s failure to act with respect to a breach by the other party does not constitute a waiver of the party’s right to act with respect to subsequent or similar breaches, any such waiver shall be in writing. This Arbitration Agreement sets forth the entire understanding and agreement between Participant and the Company with respect to the subject matter hereof and supersedes all previous understandings and agreements between the parties, whether oral or written. The place of this Agreement is Toronto, Ontario. In the event that any portion of this Agreement, including any portion of the Arbitration Agreement, is deemed illegal or unenforceable, such provision shall be severed and the remainder of the Agreement shall be given full force and effect.
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INDIA
Notifications
Exchange Control Notification. Participant is required to repatriate to India, or cause to be repatriated, any proceeds from the sale of Shares acquired under the Plan and any dividends received in relation to the Shares within such time as prescribed under applicable Indian exchange control laws as may be amended from time to time. Participant should obtain a foreign inward remittance certificate (“FIRC”) or other similar form from the bank where Participant deposits the funds and maintain the FIRC or other form as evidence of the repatriation of funds in the event the Reserve Bank of India or Participant’s employer requests proof of repatriation. Participant should consult with his or her personal legal adviser to ensure compliance with the applicable requirements.
Prior approval of the Reserve Bank of India is not required for Shares to be acquired or sold by Indian Participants where (i) participation in the Plan is offered globally on a uniform basis (i.e., Indian Participants participate in the Plan on terms no less favorable than participants in other countries); and (ii) reporting by the local employing company on the prescribed form OPI is made with the designated authorized dealer bank within sixty (60) days of the end of the half year (from March and September) in which Shares are allotted under the Plan. If the local employing company is unable to file form OPI within sixty (60) days of the end of the half year in which Shares are allotted then it can still make a filing of form OPI within three (3) years of its due date, along with the late fee prescribed by the RBI (which is currently INR 7,500). If the local employing company is still unable to submit the form OPI within three (3) years of its due date, then such company has to approach Reserve Bank of India for compounding of offence.
Governing Law and Dispute Resolution. This Award Agreement shall be governed by and construed in accordance with the laws of India, without regard to the conflict of laws principles.
In the event any dispute or difference arises between any of the parties arising out of or relating to the Award Agreement and the Restricted Stock Units, in connection with the validity, interpretation, implementation or alleged breach of any provision of this Award Agreement, the parties hereto shall endeavor to settle such dispute amicably. Any dispute that remains unresolved for a period of sixty (60) days shall be resolved by binding arbitration. The arbitration shall be conducted by a sole arbitrator in accordance with the provisions of the Delhi International Arbitration Centre (DIAC) (Arbitration Proceedings) Rules, 2023 in force at the time of the application, which Rules are deemed to be incorporated by reference herein. The seat and venue of the arbitration shall be New Delhi, India. The language of the arbitration shall be English. The award rendered by the arbitrator shall be final, conclusive, and binding on the parties. Judgment upon the award may be entered in any court of competent jurisdiction.
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APPENDIX 2
PAYMENTUS HOLDINGS, INC.
2021 EQUITY INCENTIVE PLAN
RESTRICTIVE COVENANTS ADDENDUM TO RESTRICTED STOCK UNIT AGREEMENT
Unless otherwise defined herein, capitalized terms used in this Restrictive Covenants Addendum to Restricted Stock Unit Agreement will be ascribed the same defined meanings as set forth in the Restricted Stock Unit Agreement of which this Restrictive Covenants Addendum forms a part (or the Plan or other written agreement as specified in the Restricted Stock Unit Agreement). If you are an independent contractor, any reference to a “Participant’s employment” with the Company in this Restrictive Covenants Addendum shall be deemed to mean service with the Company or its Parents or Subsidiaries pursuant to your independent contractor agreement(s) with the Company or its Parents or Subsidiaries.
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Restrictive Covenants Addendum to be read and applied in full compliance with applicable state laws. Further, to the extent any state not listed limits enforceability of a covenant if Participant’s annual compensation is insufficient for enforceable post-employment non-competition or non-solicitation restrictions, such limitation is incorporated by reference.
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PAYMENTUS HOLDINGS, INC.
2021 EQUITY INCENTIVE PLAN
RESTRICTED STOCK AWARD AGREEMENT
NOTICE OF RESTRICTED STOCK AWARD GRANT
Unless otherwise defined herein, the terms defined in the Paymentus Holdings, Inc. 2021 Equity Incentive Plan (the “Plan”) will have the same defined meanings in this Restricted Stock Award Agreement, which includes the Notice of Restricted Stock Award Grant (the “Notice of Grant”), the Terms and Conditions of Restricted Stock Award Grant, attached hereto as Exhibit A, and all other exhibits, appendices, and addenda attached hereto (including any additional terms and conditions for Participant’s country set forth in Appendix 1 to the Terms and Conditions of Restricted Stock Award Grant (the “Country Addendum”) and restrictive covenants set forth in Appendix 2 to the Terms and Conditions of Restricted Stock Award Grant (the “Restrictive Covenants Addendum”)) (together, the “Award Agreement”).
Participant Name:
The undersigned Participant has been granted a Restricted Stock Award, subject to the terms and conditions of the Plan and this Award Agreement, as follows:
Grant Number: ______________________________
Grant Date: ______________________________
Total Number of Shares: ______________________________
Vesting Period:
By Participant’s signature or by Participant’s acceptance of the Award Agreement via the Company’s designated electronic acceptance procedures and the signature of the representative of the Company below, Participant and the Company agree that this Restricted Stock Award is granted under and governed by the terms and conditions of the Plan and this Award Agreement, including the Terms and Conditions of Restricted Stock Award Grant, attached hereto as Exhibit A, and all other exhibits, appendices and addenda attached hereto (including any applicable Country Addendum and Restrictive Covenants Addendum), all of which are made a part of this document. Participant acknowledges receipt of a copy of the Plan. Participant has reviewed the Plan and this Award Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Award Agreement and fully understands all provisions of the Plan and this Award Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan or this Award Agreement. Participant further agrees to notify the Company upon any change in Participant’s residence address indicated below.
PARTICIPANT
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PAYMENTUS HOLDINGS, INC.
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_____________________________________________ Signature
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_____________________________________________ Print Name |
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Residence Address: |
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EXHIBIT A
PAYMENTUS HOLDINGS, INC.
2021 EQUITY INCENTIVE PLAN
RESTRICTED STOCK AWARD AGREEMENT
TERMS AND CONDITIONS OF RESTRICTED STOCK AWARD GRANT
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Participant understands that the Company and the Service Recipient may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Restricted Stock Awards or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the exclusive purpose of implementing, administering and managing the Plan.
Participant understands that Data will be transferred to a third-party stock plan service provider, which is assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country of operation (e.g., the United States) may have different data privacy laws and protections than Participant’s country. Participant understands that if he or she resides outside the United States, he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. Participant authorizes the Company, any stock plan service provider selected by the Company and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing his or her participation in the Plan. Participant understands that Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan. Participant understands if he or she resides outside the United States, he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or her consent, his or her status as a Service Provider will not be adversely affected. The only adverse consequence of refusing or withdrawing Participant’s consent is that the Company would not be able to grant Participant Restricted Stock Awards or other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her consent may affect Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources representative.
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English language, or has consulted with an adviser who is sufficiently proficient in the English language, so as to allow Participant to understand the terms and conditions of this Award Agreement. If Participant has received this Award Agreement or any other document related to the Plan translated into a language other than the English language and if the meaning of the translated version is different than the English version, the English language version will control.
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This Agreement does not limit the right of the Company or Participant to seek any provisional remedy, including, without limitation, injunctive or similar relief, from any court of competent jurisdiction as may be necessary to protect the Company’s or Participant’s rights and interests pending the outcome of an arbitration including but not limited to claims for violation of any non-disclosure or other agreement between Participant and the Company for the protection of confidential and proprietary information and trade secrets and/or invention assignment.
Participant and the Company agree that any dispute or claim arising out of or relating to this agreement shall be brought, heard, and arbitrated only on an individual basis, and not as a plaintiff or class member in any purported class, collective, or representative action. The arbitrator shall not have the authority to consolidate the claims of other parties into a single proceeding, nor to certify a class action.
Either the Company or Participant may bring an action in court to compel arbitration under this Agreement and to enforce an arbitration award, and shall be entitled to recover fees and costs associated with any such motion to compel arbitration or to enforce an arbitration award. Otherwise, except as provided in this Section 28, neither the Company nor Participant shall initiate or prosecute any lawsuit or claim in any way related to any arbitrable claim, including without limitation any claim as to the making, existence, validity, arbitrability or enforceability of this Agreement.
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* * *
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APPENDIX 1
PAYMENTUS HOLDINGS, INC.
2021 EQUITY INCENTIVE PLAN
COUNTRY ADDENDUM TO RESTRICTED STOCK AWARD AGREEMENT
Unless otherwise defined herein, capitalized terms used in this Country Addendum to Restricted Stock Award Agreement (the “Country Addendum”) will be ascribed the same defined meanings as set forth in the Restricted Stock Award Agreement of which this Country Addendum forms a part (or the Plan or other written agreement as specified in the Restricted Stock Award Agreement).
Terms and Conditions
This Country Addendum includes additional terms and conditions that govern the Restricted Stock Award granted to Participant under the Plan to the extent Participant resides and/or works in one of the countries listed below. If Participant is a citizen or resident (or is considered as such for local law purposes) of a country other than the country in which Participant is currently residing and/or working, or if Participant transfers employment and/or residency to another country after the Restricted Stock Award is granted, the Company, in its discretion, will determine to what extent the terms and conditions contained herein will apply to Participant.
Notifications
This Country Addendum also includes information regarding securities laws, exchange controls and certain other issues of which Participant should be aware with respect to Participant’s participation in the Plan. The information is provided solely for Participant’s convenience and is based on the securities, exchange control and other Applicable Laws in effect in the respective countries as of March 2026. Such Applicable Laws often are complex and change frequently. As a result, the Company strongly recommends that Participant not rely on the information in this Country Addendum as the only source of information relating to the consequences of Participant’s participation in the Plan because the information may be out of date at the time Participant vests in or receives or sells the Shares issuable pursuant to the Restricted Stock Award.
In addition, the information contained in this Country Addendum is general in nature and may not apply to Participant’s particular situation, and the Company is not in a position to assure Participant of any particular result. Participant should seek appropriate professional advice as to how the Applicable Laws in Participant’s country may apply to his or her situation.
Finally, if Participant is a citizen or resident (or is considered as such for local law purposes) of a country other than the one in which Participant currently is residing and/or working, or if Participant transfers residence and/or employment to another country after the grant of the Restricted Stock Award, the information in this Country Addendum may not apply to Participant in the same manner.
CANADA
Terms and Conditions
Termination. The following provision replaces the second paragraph of Sections 4 and 10(g) of the Restricted Stock Award Agreement in its entirety:
For purposes of the Restricted Stock Award, Participant’s status as a Service Provider will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is a Service Provider or the terms of Participant’s employment or service agreement, if any) as of the date that is the earliest of: (i) the date of termination of Participant’s status as a Service Provider, (ii) the date on which Participant receives notice of termination of his or her status as a Service Provider, and (iii) the date on which Participant ceases to be providing services to the Service Recipient, which date shall not be extended by any notice period or period of pay in lieu of such notice mandated under the employment laws of the jurisdiction in which Participant is providing service or the terms of Participant’s employment or other service agreement, if any. The Administrator shall have the exclusive discretion to determine when Participant no longer is actively providing services for purposes of the Award (including whether Participant may still be considered to be providing services while on a leave of absence).
Notwithstanding the foregoing, if applicable employment standards legislation explicitly requires continued vesting during a statutory notice period, Participant’s right to vest in the Restricted Stock Award, if any, will terminate effective upon the expiry of the minimum statutory notice period, but Participant will not earn or be entitled to prorated vesting if the vesting date falls after the end of the statutory notice period, nor will Participant be entitled to any compensation in lieu of any such prorated vesting.
Language. The parties acknowledge that it is Participant’s express wish that the Restricted Stock Award Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.
Les parties reconnaissent que le participant souhaite expressément que le contrat d'attribution, ainsi que tous les documents, avis et procédures judiciaires conclus, donnés ou intentés en vertu des présentes ou s'y rapportant directement ou indirectement, soient rédigés en anglais.
Data Privacy. This provision supplements Section 13 of the Restricted Stock Award Agreement:
Participant hereby authorizes any Service Recipient and any agents or representatives thereof to (i) discuss with and obtain all relevant information from all personnel, professional or non-professional, involved in the administration and operation of the Plan, and (ii) disclose and discuss any and all information relevant to the Plan with their advisers. Participant further authorizes any Service Recipient and any agents or representatives thereof to record such information and to keep such information in Participant’s file.
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Notifications
Securities Law Notification. Participant is permitted to sell Shares acquired under the Plan through the designated broker appointed under the Plan, if any, provided the resale of Shares acquired under the Plan takes place outside Canada through the facilities of the exchange on which the Shares are then listed.
Binding Arbitration / Waiver of Jury Trial
Participant and the Company mutually agree to waive, to the fullest extent permitted under applicable law, their respective rights to resolution of disputes in a court of law by a judge or jury and agree to resolve any dispute by arbitration as set forth below. This agreement to arbitrate (“Arbitration Agreement”) survives after the Award Agreement terminates or Participant’s relationship with the Company ends. To the fullest extent permitted under applicable law, any arbitration under this Arbitration Agreement will take place on an individual basis, and class arbitrations are not permitted.
Except as expressly provided below and above, this Arbitration Agreement applies to all disputes between Participant and the Company, including the Company’s affiliates, subsidiaries, parents, successors and assigns, and each of their respective officers, directors, employees, agents, or shareholders (each a “Claim” and collectively, “Claims”) These Claims include, to the fullest extent permitted under applicable law, but are not limited to, any dispute or claim, whether based on past, present, or future events, arising out of or relating to the Award Agreement and prior versions thereof (including the breach, termination, enforcement, interpretation or validity thereof), Participant’s relationship with the Company, and all other common law claims between Participant and the Company or its affiliates and their respective employees, officers, directors and shareholders. To the fullest extent permissible under applicable law, disputes concerning the arbitrability of a Claim (including disputes about the scope, applicability, enforceability, revocability, or validity of the Arbitration Agreement) shall be decided by the arbitrator.
For clarity, Participant and the Company agree that this Arbitration Agreement does not affect any of Participant’s statutory rights under any minimum standards legislation, and Participant is not restricted from commencing a complaint to the appropriate governmental authority under any minimum standards legislation including but not limited to the local minimum employment standards legislation, the local occupational health and safety legislation, the local pay equity legislation, the local workplace safety insurance legislation; in Ontario, the Employment Standards Act, 2000, S.O. 2000, c. 41, Occupational Health and Safety Act, R.S.O. 1990, c. O.1, Pay Equity Act, R.S.O. 1990, c. P.7, Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sched. A; and other similar legislation in every other province and territory (if applicable). Furthermore, Participant and the Company agree that, to the fullest extent permitted under applicable law, disputes involving alleged breaches of the local human rights code or legislation shall be resolved by arbitration; but nothing in this Arbitration Agreement limits or waives any of Participant’s substantive rights under local human rights code or legislation.
By agreeing to arbitration, Participant understands that Participant and the Company are waiving the right to sue in court or have a jury trial for any Claim or Claims, except as otherwise provided in this Arbitration Agreement or required by applicable law. This Arbitration Agreement is intended to require arbitration of every claim or dispute that can lawfully be arbitrated.
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Prohibition of Class Actions and Non-Individualized Relief. Participant understands and agrees that, to the fullest extent permissible under applicable law, Participant and the Company may each bring claims in arbitration against the other only in an individual capacity and not on a class, collective or representative basis (“Class Action Waiver”). Participant understands and agrees that Participant and the Company both are waiving the right to pursue or have a dispute resolved as a plaintiff or class member in any purported class, collective or representative proceeding. An arbitrator appointed pursuant to this arbitration agreement shall have no authority to consider or resolve any claim or issue any relief on any basis other than an individual basis. The arbitrator shall have no authority to consider or resolve any claim or issue any relief on a class, collective, or representative basis. Notwithstanding any other provision of this Award Agreement, or the Arbitration Agreement, or the Alternative Dispute Resolution Institute of Canada Inc. Arbitration Rules, disputes regarding the scope, applicability, enforceability, revocability or validity of the Class Action Waiver may be resolved only by a civil court of competent jurisdiction and not by an arbitrator. In any case in which: (1) the dispute is filed as a class, collective, or representative action and (2) there is a final judicial determination that the Class Action Waiver is unenforceable as to any Claims, the class, collective, and/or representative action in respect of such Claims must be litigated in a civil court of competent jurisdiction, but the Class Action Waiver shall be enforced in arbitration on an individual basis as to all other Claims to the fullest extent possible.
Rules Governing Arbitration. Any arbitration conducted pursuant to this Arbitration Agreement shall be administered by the Alternative Dispute Resolution Institute of Canada Inc. Arbitration Rules (hereafter the “Rules”) and pursuant to the Rules. Notwithstanding the foregoing, if requested by Participant and if proper based on the facts and circumstances of the Claims presented, the arbitrator shall have the discretion to select a different set of arbitration rules, but in no event shall the arbitrator consolidate more than one person’s Claims, or otherwise preside over any form of class, collective or representative proceeding.
As part of the arbitration, both Participant and the Company will have the opportunity for reasonable discovery of non-privileged information that is relevant to the Claim. The arbitrator may award any individualized remedies that would be available in court. The arbitrator may award declaratory or injunctive relief only in favor of the individual party seeking relief and only to the extent necessary to provide relief warranted by that party’s individual Claims. The arbitrator will provide a reasoned written statement of the arbitrator’s decision which shall explain the award given and the findings and conclusions on which the decision is based.
The arbitrator will decide the substance of all Claims in accordance with applicable law and will honor all claims of privilege recognized by law. The arbitrator shall not be bound by rulings in prior arbitrations involving any other person or employee, but the arbitrator is bound by rulings in prior arbitrations involving the same employee to the extent required by applicable law. The arbitrator’s award shall be final and binding and judgment on the award rendered by the arbitrator may be entered in any court of competent jurisdiction, provided that such award may be challenged to the extent provided for under applicable law.
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Arbitration Fees and Awards. The payment of filing and arbitration fees will be governed by the Rules subject to the following modifications:
If Participant initiates arbitration under this Arbitration Agreement after participating in the optional negotiation process described below and is otherwise required to pay a filing fee under the Rules, the Company agrees that, unless Participant’s Claim is for $5,000 or more, Participant’s share of the filing and arbitration fees is limited to $50, and that, after Participant submits proof of payment of the filing fee to the Company, the Company will promptly reimburse Participant for all but $50 of the filing fee. If, however, the arbitrator finds that either the substance of Participant’s Claim or the relief sought in the Claim is frivolous, vexatious or brought for an improper purpose, then the payment of all such fees will be governed by the Rules.
If the Company initiates arbitration under this Arbitration Agreement, the Company will pay all filing and arbitration fees under the Rules.
With respect to any Claims brought by the Company against a Participant, the Company shall pay all costs unique to arbitration (as compared to the costs of adjudicating the same Claims before a court), including the regular and customary arbitration fees and expenses (to the extent not paid by the Company pursuant to the fee provisions above). However, if Participant is the party initiating arbitration, Participant shall be responsible for contributing up to an amount equal to the filing fee that would be paid to initiate the Claim in the court of general jurisdiction in the province in which Participant resides, unless a lower fee amount would be owed by Participant pursuant to the Rules, applicable law, or this Arbitration Agreement. Any dispute as to whether a cost is unique to arbitration shall be resolved by the arbitrator.
Except as provided in any applicable rules of civil procedure, each party shall pay its own legal fees and pay any costs that are not unique to the arbitration (i.e., costs that each party would incur if the Claim(s) were litigated in a court such as costs to subpoena witnesses and/or documents, take depositions and purchase deposition transcripts, copy documents, etc.).
At the end of any arbitration, the arbitrator may award reasonable fees and costs or any portion thereof to Participant if Participant prevails, to the extent authorized by applicable law.
Although the Company may have a right to an award of legal fees and non-filing fee expenses if it prevails in an arbitration, the Company agrees that it will not seek such an award.
If the arbitrator issues Participant an award that is greater than the value of the Company’s last written settlement offer made after Participant participated in good faith in the optional negotiation process described in this Arbitration Agreement, then the Company will pay Participant the amount of the award or CDN$1,000, whichever is greater.
Location and Manner of Arbitration. Unless Participant and the Company agree otherwise, any arbitration hearings under this Arbitration Agreement will take place before one (1) arbitrator (the “Arbitrator”) appointed in accordance with the Rules. The seat of the Arbitration will be Toronto unless otherwise agreed by the parties. The language of the arbitration shall be English unless otherwise agreed by the parties. The Arbitrator shall have the right to determine all questions of law and jurisdiction including questions as to whether a Claim is arbitrable and shall have the right to grant final and interim damages awards. There will be no appeal from the decision of the arbitrator on
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questions of fact, law, or mixed fact and law. If Participant’s Claim is for $25,000 or less, the Company agrees that Participant may choose whether the arbitration will be conducted solely on the basis of documents submitted to the arbitrator, through a telephonic hearing, or by an in-person hearing as determined by the Rules. If Participant’s Claim exceeds $25,000, the right to a hearing will be determined by the Rules.
Opting Out of Arbitration. Participant may opt out of the requirement to arbitrate pursuant to the terms of this subsection. If Participant does not wish to be subject to this Arbitration Agreement, Participant may opt out of arbitration by notifying the Company in writing of Participant’s desire to opt out of arbitration, which writing must be dated, signed and delivered by: (1) electronic mail to the Company, or (2) by certified mail, postage prepaid and return receipt requested, or by any nationally recognized delivery service that is addressed to Paymentus, 1595 16th Avenue, Richmond Hill, Ontario, L4B 3N9. In order to be effective, (a) the writing must clearly indicate Participant’s intent to opt out of this Arbitration Agreement, (b) the writing must include Participant’s name, phone number, and email address, and (c) the email or envelope containing the signed writing must be sent within 30 days of the date this Agreement is executed by Participant. Should Participant not opt out within the 30-day period, Participant and the Company shall be bound by the terms of this Arbitration Agreement in full, to the extent allowable by law. Participant should assume that in the future there may be lawsuits against the Company alleging class, collective, and/or representative Claims, in which the plaintiffs seek to act on Participant’s behalf, and which, if successful, could result in some monetary recovery to Participant. But if Participant does agree to arbitration with the Company under this Arbitration Agreement, then Participant is agreeing in advance that Participant will bring all such Claims, and seek all monetary and other relief, against the Company in an individual arbitration provision. Participant is also agreeing in advance that Participant will not participate in or seek to recover monetary or other relief for such Claims in any court action or class, collective, and/or representative action. Participant has the right to consult with counsel of Participant’s choice concerning this Arbitration Agreement and Participant will not be subject to retaliation if Participant exercises Participant’s right to assert claims or opt-out of this Arbitration Agreement.
Optional Pre-Arbitration Negotiation Process. Before initiating any arbitration or proceeding, Participant and the Company may agree to first attempt to negotiate any dispute, claim or controversy between the parties informally for 30 days, unless this time period is mutually extended by Participant and the Company. A party who intends to seek negotiation under this subsection must first send to the other a written notice of the dispute (“Notice”). The Notice must (1) describe the nature and basis of the claim or dispute; and (2) set forth the specific relief sought. All offers, promises, conduct and statements, whether oral or written, made in the course of the negotiation by any of the parties, their agents, employees, and lawyers are confidential, privileged and inadmissible for any purpose, including as evidence of liability or for impeachment, in arbitration or other proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the negotiation.
Third-Party Beneficiaries. This Arbitration Agreement shall be binding upon, and shall include any Claims brought by or against any third parties, including but not limited to Participant’s spouses, heirs, third-party beneficiaries and permitted assigns, where their underlying claim(s) arise out of or relate to Participant’s employment with the Company. To the extent that any third-party beneficiary to this Agreement brings claims against a party, those claims shall also be subject to this Arbitration Agreement.
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General. This Arbitration Agreement shall be governed by the laws of the province in which Participant resides. If any provision of this Agreement is or becomes invalid or non-binding, the parties shall remain bound by all other provisions of this Agreement. In that event, the parties shall replace the invalid or non-binding provision with provisions that are valid and binding and that have, to the greatest extent possible, a similar effect as the invalid or non-binding provision, given the contents and purpose of this Agreement. Any notices to Participant shall be provided to Participant via the email address or physical address Participant provides to the Company during employment. Headings are for reference purposes only and in no way define, limit, construe or describe the scope or extent of such section. The words “include”, “includes” and “including” are deemed to be followed by the words “without limitation”. A party’s failure to act with respect to a breach by the other party does not constitute a waiver of the party’s right to act with respect to subsequent or similar breaches, any such waiver shall be in writing. This Arbitration Agreement sets forth the entire understanding and agreement between Participant and the Company with respect to the subject matter hereof and supersedes all previous understandings and agreements between the parties, whether oral or written. The place of this Agreement is Toronto, Ontario. In the event that any portion of this Agreement, including any portion of the Arbitration Agreement, is deemed illegal or unenforceable, such provision shall be severed and the remainder of the Agreement shall be given full force and effect.
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INDIA
Notifications
Exchange Control Notification. Participant is required to repatriate to India, or cause to be repatriated, any proceeds from the sale of Shares acquired under the Plan and any dividends received in relation to the Shares within such time as prescribed under applicable Indian exchange control laws as may be amended from time to time. Participant should obtain a foreign inward remittance certificate (“FIRC”) or other similar form from the bank where Participant deposits the funds and maintain the FIRC or other form as evidence of the repatriation of funds in the event the Reserve Bank of India or Participant’s employer requests proof of repatriation. Participant should consult with his or her personal legal adviser to ensure compliance with the applicable requirements.
Prior approval of the Reserve Bank of India is not required for Shares to be acquired or sold by Indian Participants where (i) participation in the Plan is offered globally on a uniform basis (i.e., Indian Participants participate in the Plan on terms no less favorable than participants in other countries); and (ii) reporting by the local employing company on the prescribed form OPI is made with the designated authorized dealer bank within sixty (60) days of the end of the half year (from March and September) in which Shares are allotted under the Plan. If the local employing company is unable to file form OPI within sixty (60) days of the end of the half year in which Shares are allotted then it can still make a filing of form OPI within three (3) years of its due date, along with the late fee prescribed by the RBI (which is currently INR 7,500). If the local employing company is still unable to submit the form OPI within three (3) years of its due date, then such company has to approach Reserve Bank of India for compounding of offence.
Governing Law and Dispute Resolution. This Award Agreement shall be governed by and construed in accordance with the laws of India, without regard to the conflict of laws principles.
In the event any dispute or difference arises between any of the parties arising out of or relating to the Award Agreement and the Restricted Stock Units, in connection with the validity, interpretation, implementation or alleged breach of any provision of this Award Agreement, the parties hereto shall endeavor to settle such dispute amicably. Any dispute that remains unresolved for a period of sixty (60) days shall be resolved by binding arbitration. The arbitration shall be conducted by a sole arbitrator in accordance with the provisions of the Delhi International Arbitration Centre (DIAC) (Arbitration Proceedings) Rules, 2023 in force at the time of the application, which Rules are deemed to be incorporated by reference herein. The seat and venue of the arbitration shall be New Delhi, India. The language of the arbitration shall be English. The award rendered by the arbitrator shall be final, conclusive, and binding on the parties. Judgment upon the award may be entered in any court of competent jurisdiction.
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APPENDIX 2
PAYMENTUS HOLDINGS, INC.
2021 EQUITY INCENTIVE PLAN
RESTRICTIVE COVENANTS ADDENDUM TO RESTRICTED STOCK AWARD AGREEMENT
Unless otherwise defined herein, capitalized terms used in this Restrictive Covenants Addendum to Restricted Stock Award Agreement will be ascribed the same defined meanings as set forth in the Restricted Stock Award Agreement of which this Restrictive Covenants Addendum forms a part (or the Plan or other written agreement as specified in the Restricted Stock Award Agreement).
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Restrictive Covenants Addendum to be read and applied in full compliance with applicable state laws. Further, to the extent any state not listed limits enforceability of a covenant if Participant’s annual compensation is insufficient for enforceable post-employment non-competition or non-solicitation restrictions, such limitation is incorporated by reference.
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Exhibit 31.1
CERTIFICATION PURSUANT
TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Dushyant Sharma, certify that:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 4, 2026 |
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By: |
/s/ Dushyant Sharma |
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Dushyant Sharma |
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Chairman, President and Chief Executive Officer |
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(Principal Executive Officer) |
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Exhibit 31.2
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Sanjay Kalra, certify that:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 4, 2026 |
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By: |
/s/ Sanjay Kalra |
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Sanjay Kalra |
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Senior Vice President and Chief Financial Officer |
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(Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Paymentus Holdings, Inc. (the “Company”) for the three months ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) |
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods presented in the Report. |
Date: May 4, 2026 |
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By: |
/s/ Dushyant Sharma |
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Dushyant Sharma |
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Chairman, President and, |
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Chief Executive Officer |
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(Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Paymentus Holdings, Inc. (the “Company”) for the three months ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) |
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods presented in the Report. |
Date: May 4, 2026 |
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By: |
/s/ Sanjay Kalra |
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Sanjay Kalra |
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Senior Vice President and Chief Financial Officer |
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(Principal Financial Officer) |