8-K
Paymentus Holdings, Inc. (PAY)
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): November 6, 2023 |
|---|
Paymentus Holdings, Inc.
(Exact name of Registrant as Specified in Its Charter)
| Delaware | 001-40429 | 45-3188251 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
| 11605 North Community House Road<br><br>Suite 300 | ||
| Charlotte, NC | 28277 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
| (888) 440-4826<br><br>Registrant’s Telephone Number, Including Area Code: | ||
| --- | ||
| Not Applicable | ||
| --- |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A Common Stock, par value $0.0001 per share | PAY | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
☒
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.
☐
Item 2.02 Results of Operations and Financial Condition
On November 6, 2023, Paymentus Holdings, Inc. issued a press release reporting its financial results for the three and nine months ended September 30, 2023. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated by reference herein.
The information in Item 2.02 of this Current Report on Form 8-K, including the accompanying Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of Section 18. The information in Item 2.02 of this Current Report, including the accompanying Exhibit 99.1, shall not be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language contained in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit<br><br>Number | Description |
|---|---|
| 99.1 | Press release dated November 6, 2023 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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: | November 6, 2023 | By: | /s/ Sanjay Kalra |
| Sanjay Kalra<br>Senior Vice President and Chief Financial Officer |
EX-99.1
Paymentus Reports Third Quarter 2023 Financial Results
Revenue increased 18.9% year-over-year
Adjusted EBITDA rose 93.9% year-over-year
CHARLOTTE, North Carolina, November 6, 2023 -- Paymentus Holdings, Inc. (“Paymentus”) (NYSE: PAY), a leading provider of cloud-based bill payment technology and solutions, today announced its unaudited financial results for the quarter ended September 30, 2023.
"Paymentus reported exceptional results for the third quarter highlighted by strong growth in revenue, contribution profit and adjusted EBITDA with year-over-year increases of 18.9%, 20.3% and 93.9%, respectively. Demand and competitive differentiation remains strong, reflected in our substantial backlog at quarter end, which we believe provides us good visibility for the rest of 2023 and well into 2024,” said Dushyant Sharma, Founder and CEO.
Third Quarter 2023 Financial and Business Highlights
• Revenue was $152.4 million, an increase of 18.9% year-over-year, driven largely by increased transactions.
• Gross profit was $46.9 million, an increase of 23.9% year-over-year. Adjusted gross profit(1) was $51.3 million, up 24.9% year-over-year.
• Contribution profit(1) was $61.5 million, a year-over-year increase of 20.3%.
• Net income was $6.4 million and GAAP earnings per share was $0.05. Non-GAAP net income(1) was $10.9 million and non-GAAP earnings per share(1) was $0.09. Prior year non-GAAP net income and non-GAAP earnings per share have been recast to align with the updated methodology described in the section "Use and Definitions of Non-GAAP Financial Measures" below.
• Adjusted EBITDA(1) was $15.5 million for the third quarter of 2023, representing a 25.3% adjusted EBITDA margin(1), an increase of 93.9% year-over-year.
• The Company processed 115.4 million transactions in the third quarter of 2023, an increase of 25.2% from the third quarter of 2022.
(1) Descriptions of the non-GAAP financial measures adjusted gross profit, contribution profit, non-GAAP net income, non-GAAP earnings per share, adjusted EBITDA, and adjusted EBITDA margin are provided below under “Use and Definitions of Non-GAAP Financial Measures,” and reconciliations are provided in the tables at the end of this release.
Financial Guidance
The statements in this section are forward-looking statements. For additional information regarding the use and limitations of such statements, refer to “Forward-Looking Statements” below and the “Risk Factors” section of Paymentus’ most recent Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission, or SEC, on March 3, 2023 and subsequent Forms 10-Q filed with the SEC.
| Fourth Quarter 2023 | Fiscal-Year 2023 | |
|---|---|---|
| Revenue | $155 million to $159 million | $604.5 million to $608.5 million |
| Contribution Profit | $60.5 million to $62.5 million | $235 million to $237 million |
| Adjusted EBITDA | $12 million to $14 million | $50 million to $52 million |
Paymentus does not reconcile its forward-looking guidance for non-GAAP measures because certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated due to potential variability, complexity and uncertainty as to the items that would be excluded from the GAAP measure in the relevant future period. Refer to “Use of Forward-Looking Non-GAAP Measures” below for additional explanation.
Conference Call Information
In conjunction with this announcement, Paymentus will host a conference call for investors at 5:00 p.m. ET (2:00 p.m. PT) today to discuss third quarter 2023 results and its outlook for the remainder of 2023. The live webcast and replay will be available at the Investor Relations section of Paymentus’ website at ir.paymentus.com or click here. To participate via telephone, dial 1-833-470-1428 (U.S. Toll-Free) or 1-404-975-4839 (International), access code 158842. A replay will be available after 5:00 p.m. PT on the same web site.
About Paymentus
Paymentus is a leading provider of cloud-based bill payment technology and solutions for more than 1,900 billers and financial institutions across North America. Our omni-channel platform provides consumers with easy-to-use, flexible and secure electronic bill payment experiences through their preferred payment channel and type. Paymentus’ proprietary Instant Payment NetworkTM, or IPN, extends our reach by connecting our IPN partners’ platforms and tens of thousands of billers to our integrated billing, payment, and reconciliation capabilities. For more information, please visit www.paymentus.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact included in this press release are forward-looking statements, including but not limited to statements regarding demand, bookings and backlog, the continuing competitive market momentum and growth visibility in 2023 and into 2024, our future financial performance and our updated fourth quarter and full-year 2023 financial guidance. Forward-looking statements include statements containing words such as “expect,” “anticipate,” “believe,” “project,” “will” and similar expressions intended to identify forward-looking statements.
These forward-looking statements are based on our current expectations. Forward-looking statements involve risks and uncertainties. Our actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to our ability to effectively manage our growth and expand our operations, including into new channels and industry verticals across different markets; our ability to expand and retain our biller, financial institution, partner and consumer base; our ability to timely implement new bookings and recognize anticipated revenue therefrom, our ability to manage economic challenges, including inflation; the impact of future widespread health issues on our operating results, liquidity and financial condition and on our employees, billers, financial institutions, partners, consumers and other key stakeholders; our ability to remain competitive; our ability to develop new product features and enhance our platform and brand; our future acquisitions and strategic investments; our ability to hire and retain experienced and talented employees; and other risks and uncertainties included under the caption “Risk Factors” and elsewhere in our filings with the SEC, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 3, 2023, and subsequent Quarterly Reports on Form 10-Q, including our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, which we expect to file with the SEC shortly after the date of this release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
All forward-looking statements are qualified in their entirety by this cautionary statement, and we undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof.
Use of Forward-Looking Non-GAAP Measures
We do not meaningfully reconcile guidance for adjusted EBITDA and adjusted EBITDA margin, because we cannot provide guidance for the more significant reconciling items between net income and adjusted EBITDA without unreasonable effort. This is due to the fact that future period non-GAAP guidance includes adjustments for items not indicative of our core operations, which may include, without limitation, items included in the supplemental financial information for reconciliation of reported GAAP results to non-GAAP results. Such items include acquisition related amortization expense for acquired intangibles, foreign exchange gains and losses, adjustments to our income tax provision and certain other items we believe to be non-indicative of our ongoing operations. Such adjustments may be affected by changes in ongoing assumptions and judgments, as well as nonrecurring, unusual or unanticipated charges, expenses or gains/losses or other items that may not directly correlate to the underlying performance of our business operations. The exact amount of these adjustments is not currently determinable but may be significant. In addition, we do not meaningfully reconcile guidance for contribution profit, because the determination of contribution is subject to variables outside our control, such as an increase in the average payment amount, changes in the payment mix, or the payment channel used by consumers that can influence contribution profit, and cannot be determined without unreasonable effort, if at all.
Use and Definitions of Non-GAAP Financial Measures
In addition to disclosing financial measures in accordance with accounting principles generally accepted in the United States, or GAAP, this press release and the accompanying tables contain certain non-GAAP financial measures, including adjusted gross profit, contribution profit, non-GAAP net income (including those amounts as a percentage of revenue), non-GAAP earnings per share, adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating expense and free cash flow. 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.
Adjusted gross profit is defined as gross profit adjusted for certain non-cash items, primarily stock-based compensation and amortization of acquisition-related intangible assets and capitalized software development costs.
Contribution profit is defined as gross profit plus other cost of revenue. Other cost of revenue equals cost of revenue less interchange and assessment fees paid by us to our payment processors. Interchange and assessment fees paid by us to our payment processors are excluded from 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 and assessment 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.
Adjusted EBITDA is defined as net income before other income (expense) (which consists of interest income (expense), net and foreign exchange gain (loss)), depreciation and amortization of acquisition related intangible assets and capitalized software development costs, and income taxes, adjusted to exclude the effects of stock-based compensation expense and certain nonrecurring expenses that management believes are not indicative of ongoing operations.
Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of contribution profit.
Non-GAAP operating expense is defined as total operating expense excluding amortization of acquisition-related intangibles, stock-based compensation and other nonrecurring expenses. Management believes that the adjustment of acquisition-related intangibles amortization supplements the GAAP information with a measure that can be used to assess the comparability of operating performance. Although we exclude amortization from acquisition-related intangible assets from our non-GAAP expenses, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets.
Non-GAAP net income and non-GAAP EPS are defined as net income and net income per share, respectively, excluding certain nonrecurring items such as discrete tax items, one-time expenses or other non-cash items, including amortization of acquisition-related intangibles. Beginning with the quarter ended June 30, 2023, we have excluded stock-based compensation from the calculation of our non-GAAP net income and non-GAAP EPS to be consistent with our methodology for non-GAAP operating expenses, which we believe enhances the understanding of our operating performance and enables more meaningful
period-to-period comparisons. Our non-GAAP net income and non-GAAP EPS for the three and nine months ended September 30, 2022 were recast to conform to the updated methodology and are reflected herein for comparison purposes.
We believe non-GAAP net income and non-GAAP EPS enhance the understanding of our operating performance and enable more meaningful period-to-period comparisons.
Free cash flow is defined as net cash provided by (used in) operating activities less capital expenditures and capitalized internal-use software development costs.
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.
We use these non-GAAP measures in conjunction with GAAP measures as part of our overall assessment of our performance and liquidity, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance and liquidity. There are limitations to the use of the non-GAAP measures presented in this press release. 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 encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure, and to view our non-GAAP measures in conjunction with GAAP financial measures. For a reconciliation of these non-GAAP financial measures to GAAP measures, please see the tables for the reconciliation of GAAP to non-GAAP results included at the end of this release.
CONTACTS:
| At the Company<br><br>Sanjay Kalra<br><br>Chief Financial Officer<br><br>Paymentus Holdings, Inc.<br><br>ir@paymentus.com | Investor Relations<br>David Hanover<br>paymentus@kcsa.com |
|---|
Media Relations Tony Labriola tony@thinkinsideout.com
PAYMENTUS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)
(In thousands, except share and per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Revenue | $ | 152,423 | $ | 128,152 | $ | 449,690 | $ | 364,825 | ||||
| Cost of revenue | 105,513 | 90,295 | 316,840 | 256,286 | ||||||||
| Gross profit | 46,910 | 37,857 | 132,850 | 108,539 | ||||||||
| Operating expenses | ||||||||||||
| Research and development | 11,035 | 10,350 | 33,595 | 30,925 | ||||||||
| Sales and marketing | 21,481 | 19,048 | 63,344 | 53,089 | ||||||||
| General and administrative | 9,083 | 9,376 | 26,958 | 29,038 | ||||||||
| Total operating expenses | 41,599 | 38,774 | 123,897 | 113,052 | ||||||||
| Income (loss) from operations | 5,311 | (917 | ) | 8,953 | (4,513 | ) | ||||||
| Other income (expense) | ||||||||||||
| Interest income, net | 1,905 | 504 | 5,003 | 594 | ||||||||
| Foreign exchange (loss) gain | (17 | ) | (28 | ) | (32 | ) | 52 | |||||
| Income (loss) before income taxes | 7,199 | (441 | ) | 13,924 | (3,867 | ) | ||||||
| (Provision for) benefit from income taxes | (822 | ) | (296 | ) | (1,004 | ) | 2,397 | |||||
| Net income (loss) | $ | 6,377 | $ | (737 | ) | $ | 12,920 | $ | (1,470 | ) | ||
| Net income (loss) per share | ||||||||||||
| Basic | $ | 0.05 | $ | (0.01 | ) | $ | 0.10 | $ | (0.01 | ) | ||
| Diluted | $ | 0.05 | $ | (0.01 | ) | $ | 0.10 | $ | (0.01 | ) | ||
| Weighted-average number of shares used to compute net income per share | ||||||||||||
| Basic | 123,620,260 | 122,740,982 | 123,430,652 | 121,765,509 | ||||||||
| Diluted | 125,639,879 | 122,740,982 | 124,457,360 | 121,765,509 | ||||||||
| Comprehensive income | ||||||||||||
| Net income (loss) | 6,377 | (737 | ) | 12,920 | (1,470 | ) | ||||||
| Foreign currency translation adjustments, net of tax | (64 | ) | (86 | ) | 22 | (235 | ) | |||||
| Comprehensive income (loss) | $ | 6,313 | $ | (823 | ) | $ | 12,942 | $ | (1,705 | ) |
PAYMENTUS HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share and per share data)
| December 31, | ||||
|---|---|---|---|---|
| 2022 | ||||
| Assets | ||||
| Current assets | ||||
| Cash and cash equivalents | 162,062 | $ | 147,334 | |
| Restricted cash and cash equivalents | 4,830 | 2,351 | ||
| Accounts and other receivables, net of allowance for expected credit losses of 234 and 370, respectively | 74,851 | 67,789 | ||
| Income tax receivable | 1,910 | 1,493 | ||
| Prepaid expenses and other current assets | 11,415 | 9,994 | ||
| Total current assets | 255,068 | 228,961 | ||
| Property and equipment, net | 1,676 | 1,823 | ||
| Capitalized internal-use software development costs, net | 56,488 | 46,032 | ||
| Intangible assets, net | 29,179 | 36,017 | ||
| Goodwill | 131,852 | 131,851 | ||
| Operating lease right-of-use assets | 9,596 | 9,561 | ||
| Deferred tax asset | 117 | 116 | ||
| Other long-term assets | 5,365 | 7,178 | ||
| Total assets | 489,341 | $ | 461,539 | |
| Liabilities and Stockholders’ Equity | ||||
| Current liabilities | ||||
| Accounts payable | 33,450 | $ | 29,232 | |
| Accrued liabilities | 18,759 | 15,809 | ||
| Current portion of operating lease liabilities | 1,669 | 1,462 | ||
| Contract liabilities | 5,633 | 4,358 | ||
| Income tax payable | 23 | 635 | ||
| Total current liabilities | 59,534 | 51,496 | ||
| Deferred tax liability | 957 | 680 | ||
| Operating lease liabilities, less current portion | 8,420 | 8,608 | ||
| Contract liabilities, less current portion | 2,782 | 2,826 | ||
| Finance leases and other finance obligations, net of current portion | 200 | 750 | ||
| Total liabilities | 71,893 | 64,360 | ||
| Stockholders’ equity | ||||
| Preferred stock, 0.0001 par value per share, 5,000,000 shares authorized as of September 30, 2023 and December 31, 2022, respectively; none issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | — | — | ||
| Class A common stock, 0.0001 par value per share, 883,950,000 shares authorized as of September 30, 2023 and December 31, 2022, respectively; 20,385,106 and 19,934,331 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 2 | 2 | ||
| Class B common stock, 0.0001 par value per share, 111,050,000 shares authorized as of September 30, 2023 and December 31, 2022, respectively; 103,306,842 shares issued and outstanding as of September 30, 2023 and December 31, 2022 | 10 | 10 | ||
| Additional paid-in capital | 375,094 | 367,767 | ||
| Accumulated other comprehensive income (loss) | — | (22 | ) | |
| Retained earnings | 42,342 | 29,422 | ||
| Total stockholders’ equity | 417,448 | 397,179 | ||
| Total liabilities and stockholders' equity | 489,341 | $ | 461,539 |
All values are in US Dollars.
PAYMENTUS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Cash flows from operating activities | ||||||||||||
| Net income | $ | 6,377 | $ | (737 | ) | $ | 12,920 | $ | (1,470 | ) | ||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||
| Depreciation and amortization | 7,772 | 6,158 | 22,314 | 17,518 | ||||||||
| Deferred income taxes | 91 | (9 | ) | 278 | (3,331 | ) | ||||||
| Stock-based compensation | 2,456 | 2,002 | 6,891 | 4,622 | ||||||||
| Non-cash lease expense | 442 | 583 | 1,346 | 1,703 | ||||||||
| Amortization of contract asset | 756 | 529 | 2,197 | 1,347 | ||||||||
| Provision for expected credit losses | 112 | 32 | (122 | ) | 219 | |||||||
| Change in operating assets and liabilities | ||||||||||||
| Accounts and other receivables | (7,806 | ) | (9,938 | ) | (6,941 | ) | (19,143 | ) | ||||
| Prepaid expenses and other current and long-term assets | (2,594 | ) | 56 | (1,797 | ) | (854 | ) | |||||
| Accounts payable | 2,929 | (230 | ) | 4,279 | 2,975 | |||||||
| Accrued liabilities | 3,297 | (225 | ) | 4,188 | 2,390 | |||||||
| Operating lease liabilities | (448 | ) | (456 | ) | (1,364 | ) | (1,398 | ) | ||||
| Contract liabilities | (625 | ) | 5 | 1,232 | 80 | |||||||
| Income taxes receivable, net of payable | 384 | 281 | (1,034 | ) | 485 | |||||||
| Net cash provided by operating activities | 13,143 | (1,949 | ) | 44,387 | 5,143 | |||||||
| Cash flows from investing activities | ||||||||||||
| Other intangible assets acquired | — | (125 | ) | — | (248 | ) | ||||||
| Purchases of property and equipment | (158 | ) | (368 | ) | (511 | ) | (1,163 | ) | ||||
| Capitalized internal-use software development costs | (8,728 | ) | (7,793 | ) | (25,339 | ) | (22,257 | ) | ||||
| Net cash used in investing activities | (8,886 | ) | (8,286 | ) | (25,850 | ) | (23,668 | ) | ||||
| Cash flows from financing activities | ||||||||||||
| Proceeds from exercise of stock-based awards | 234 | 1,167 | 435 | 1,469 | ||||||||
| Financial institution funds in-transit | — | 18,276 | — | 44,158 | ||||||||
| Payments on other financing obligations | — | (655 | ) | (1,709 | ) | (2,486 | ) | |||||
| Payments on finance leases | — | (66 | ) | (102 | ) | (201 | ) | |||||
| Net cash (used in) provided by financing activities | 234 | 18,722 | (1,376 | ) | 42,940 | |||||||
| Effect of exchange rate changes on Cash and cash equivalents and Restricted cash | (67 | ) | (232 | ) | 46 | (329 | ) | |||||
| Net increase in cash, cash equivalents and Restricted cash | 4,424 | 8,255 | 17,207 | 24,086 | ||||||||
| Cash and cash equivalents and Restricted cash beginning of period | 162,468 | 217,660 | 149,685 | 201,829 | ||||||||
| Cash and cash equivalents and Restricted cash end of period | $ | 166,892 | $ | 225,915 | $ | 166,892 | $ | 225,915 | ||||
| Reconciliation of Cash and cash equivalents and Restricted Cash: | ||||||||||||
| Cash and cash equivalents at beginning of period | 159,068 | 158,335 | 147,334 | 168,386 | ||||||||
| Restricted cash at beginning of period | 3,400 | — | 2,351 | — | ||||||||
| Restricted funds held for financial institutions at beginning of period | — | 59,325 | — | 33,443 | ||||||||
| Cash and cash equivalents and Restricted cash at beginning of period | $ | 162,468 | $ | 217,660 | $ | 149,685 | $ | 201,829 | ||||
| Cash and cash equivalents at end of period | 162,062 | 148,314 | 162,062 | 148,314 | ||||||||
| Restricted cash at end of period | 4,830 | — | 4,830 | — | ||||||||
| Restricted funds held for financial institutions at end of period | — | 77,601 | — | 77,601 | ||||||||
| Cash and cash equivalents and Restricted cash at end of period | $ | 166,892 | $ | 225,915 | $ | 166,892 | $ | 225,915 |
PAYMENTUS HOLDINGS, INC.
GAAP to Non-GAAP Reconciliations (Unaudited)
(in thousands, except percentages and per share data)
The following tables set forth our non-GAAP financial measures with reconciliations to the most directly comparable GAAP financial measures.
Adjusted Gross Profit
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||
| (in thousands) | ||||||||
| Gross profit | $ | 46,910 | $ | 37,857 | $ | 132,850 | $ | 108,539 |
| Stock-based compensation | 36 | — | 110 | — | ||||
| Amortization of capitalized software development costs | 3,493 | 2,357 | 9,473 | 6,088 | ||||
| Amortization of acquisition-related intangibles | 829 | 829 | 2,486 | 2,487 | ||||
| Adjusted gross profit | $ | 51,268 | $ | 41,043 | $ | 144,919 | $ | 117,114 |
Contribution Profit
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||
| (in thousands) | ||||||||
| Gross Profit | $ | 46,910 | $ | 37,857 | $ | 132,850 | $ | 108,539 |
| Plus: other cost of revenue | 14,583 | 13,277 | 41,764 | 38,704 | ||||
| Contribution Profit | $ | 61,493 | $ | 51,134 | $ | 174,614 | $ | 147,243 |
Adjusted EBITDA and Adjusted EBITDA Margin
| Three Months Ended September 30, | Nine Months Ended <br>September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| (in thousands) | ||||||||||||
| Net income (loss) — GAAP | $ | 6,377 | $ | (737 | ) | $ | 12,920 | $ | (1,470 | ) | ||
| Interest income, net | (1,905 | ) | (504 | ) | (5,003 | ) | (594 | ) | ||||
| Provision for (benefit from) income taxes | 822 | 296 | 1,004 | (2,397 | ) | |||||||
| Amortization of capitalized software development costs | 5,473 | 3,808 | 15,286 | 10,434 | ||||||||
| Amortization of acquisition-related intangibles | 2,095 | 2,015 | 6,359 | 6,077 | ||||||||
| Depreciation | 204 | 335 | 669 | 1,015 | ||||||||
| EBITDA | $ | 13,066 | $ | 5,213 | $ | 31,235 | $ | 13,065 | ||||
| Adjustments | ||||||||||||
| Foreign exchange loss (gain) | 17 | 28 | 32 | (52 | ) | |||||||
| Stock-based compensation | 2,456 | 2,002 | 6,891 | 4,622 | ||||||||
| Other nonrecurring expense (1) | — | 769 | — | 769 | ||||||||
| Adjusted EBITDA | $ | 15,539 | $ | 8,012 | $ | 38,158 | $ | 18,404 | ||||
| Adjusted EBITDA margin | 25.3 | % | 15.7 | % | 21.9 | % | 12.5 | % |
(1) Other nonrecurring expenses consist of an estimated liability booked in the three months ended September 30, 2022 related to the potential costs of terminating a commercial contract.
PAYMENTUS HOLDINGS, INC.
GAAP to Non-GAAP Reconciliations (Unaudited)
(in thousands, except percentages and per share data)
Non-GAAP Operating Expenses
| Three Months Ended September 30, | Nine Months Ended <br>September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| (in thousands) | ||||||||||||
| Operating expenses - GAAP | $ | 41,599 | $ | 38,774 | $ | 123,897 | $ | 113,052 | ||||
| Stock-based compensation | (2,420 | ) | (2,002 | ) | (6,781 | ) | (4,622 | ) | ||||
| Amortization of acquisition-related intangibles | (1,266 | ) | (1,186 | ) | (3,873 | ) | (3,590 | ) | ||||
| Other nonrecurring expense (1) | — | (769 | ) | — | (769 | ) | ||||||
| Non-GAAP operating expense | $ | 37,913 | $ | 34,817 | $ | 113,243 | $ | 104,071 |
(1) Other nonrecurring expenses consist of an estimated liability booked in the three months ended September 30, 2022 related to the potential costs of terminating a commercial contract.
Non-GAAP Net Income & Non-GAAP EPS
Revised Methodology:
The prior year and most recent quarter non-GAAP net income and non-GAAP earnings per share have been recast to align with the updated methodology.
| Three Months Ended September 30, | Nine Months Ended <br>September 30, | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||
| (in thousands) | ||||||||||
| Net income (loss) — GAAP | $ | 6,377 | $ | (737 | ) | $ | 12,920 | $ | (1,470 | ) |
| Stock-based compensation | 2,456 | 2,002 | 6,891 | 4,622 | ||||||
| Amortization of acquisition-related intangibles | 2,095 | 2,015 | 6,359 | 6,077 | ||||||
| Exclude discrete one-time items, net of tax (1) | — | 565 | — | 565 | ||||||
| Non-GAAP net income | $ | 10,928 | $ | 3,845 | $ | 26,170 | $ | 9,794 | ||
| Weighted-average shares of common stock — diluted | 125,639,879 | 124,481,853 | 124,457,360 | 125,364,618 | ||||||
| Non-GAAP earnings per share — diluted | $ | 0.09 | $ | 0.03 | $ | 0.21 | $ | 0.08 |
(1) Discrete one-time items, net of tax consist of the tax impacted estimated liability booked in the three months ended September 30, 2022 related to the potential costs for terminating a commercial contract.
Previous Methodology:
The following tables set forth our non-GAAP financial measures using the previous methodology with reconciliations to the most directly comparable GAAP financial measures:
| Three Months Ended September 30, | Nine Months Ended <br>September 30, | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||
| (in thousands) | ||||||||||
| Net income (loss) — GAAP | $ | 6,377 | $ | (737 | ) | $ | 12,920 | $ | (1,470 | ) |
| Excluding amortization of acquisition-related intangibles | 2,095 | 2,015 | 6,359 | 6,077 | ||||||
| Exclude discrete one-time items, net of tax (1) | — | 565 | — | 565 | ||||||
| Non-GAAP net income | $ | 8,472 | $ | 1,843 | $ | 19,279 | $ | 5,172 | ||
| Weighted-average shares of common stock — diluted | 125,639,879 | 124,481,853 | 124,457,360 | 125,364,618 | ||||||
| Non-GAAP earnings per share — diluted | $ | 0.07 | $ | 0.01 | $ | 0.15 | $ | 0.04 |
(1) Discrete one-time items, net of tax consist of the tax impacted estimated liability booked in the three months ended September 30, 2022 related to the potential costs for terminating a commercial contract.
Free Cash Flow
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| (in thousands) | ||||||||||||
| Net cash (used in) provided by operating activities | $ | 13,143 | $ | (1,949 | ) | $ | 44,387 | $ | 5,143 | |||
| Purchases of property and equipment and software | (158 | ) | (368 | ) | (511 | ) | (1,163 | ) | ||||
| Other intangible assets acquired | — | (125 | ) | — | (248 | ) | ||||||
| Capitalized software development costs | (8,728 | ) | (7,793 | ) | (25,339 | ) | (22,257 | ) | ||||
| Free cash flow | $ | 4,257 | $ | (10,235 | ) | $ | 18,537 | $ | (18,525 | ) | ||
| Net cash used in investing activities | $ | (8,886 | ) | $ | (8,286 | ) | $ | (25,850 | ) | $ | (23,668 | ) |
| Net cash (used in) provided by financing activities | $ | 234 | $ | 18,722 | $ | (1,376 | ) | $ | 42,940 |