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:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
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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.
Large accelerated filer |
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Emerging growth company |
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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
As of May 2, 2025, 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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2
Special Note Regarding Forward-Looking Statements
This report on Form 10-Q for the quarterly period ended March 31, 2025 (“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
3
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.
4
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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2025 |
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2024 |
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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.
5
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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2025 |
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2024 |
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Revenue |
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$ |
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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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( |
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( |
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Net income |
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$ |
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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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$ |
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Diluted |
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$ |
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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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( |
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Comprehensive income |
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$ |
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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, 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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— |
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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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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, 2023 |
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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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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, 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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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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2025 |
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2024 |
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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 and credit adjustments |
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Other non-cash adjustments |
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( |
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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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( |
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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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Settlement of holdback liability related to prior acquisitions |
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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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Unpaid capitalized internal-use software development costs and equipment in accounts payable |
$ |
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$ |
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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 Bangalore (India). The Company is headquartered in Charlotte, North Carolina.
2. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
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, 2024 filed with the SEC on March 11, 2025 (the “2024 Form 10-K”).
Principles of Consolidation
The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and balances have been eliminated upon consolidation.
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 consolidated financial statements and accompanying notes. Such estimates include revenue recognition, cost of revenue recognition, the allowance for credit losses, the lives of tangible and intangible assets, the valuation of acquired 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 $
9
Concentration of Credit Risk
Financial instruments that potentially subject the Company to credit risk primarily consist of cash, cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents with high-quality financial institutions with investment-grade ratings. For accounts receivable, the Company is 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
Effective January 1, 2025, the Company changed its reporting segment structure to a single reporting segment, and the composition of the information package provided to the chief operating decision maker (“CODM”) was amended to deliver more focused and relevant data for decision-making. Previously, the Company identified three operating segments with one reportable segment. Following an internal assessment and a change in the manner in which financial results are provided to and reviewed by the CODM, the Company determined that it now operates and reports as a single operating and reportable segment. The determination was made based on the evaluation of factors, including resource allocation, management oversight, and the consolidated review of financial performance by the CODM. As a result, segment disclosures in the Company’s financial statements is updated to reflect the new reporting structure.
The Company’s 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, which 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, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022 included in the 2024 Form 10-K. There have been no significant changes to these policies during the three months ended March 31, 2025, except for "Segment Information" as described above.
Recently Adopted Accounting Standards
The Company is provided the option to adopt new or revised accounting guidance as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 either (1) within the same periods as those otherwise applicable to public business entities, or (2) within the same time periods as non-public business entities, including early adoption when permissible. With the exception of standards the Company elected to early adopt, when permissible, the Company has elected to adopt new or revised accounting guidance within the same time period as non-public business entities, as indicated below.
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 consolidated financial statements.
Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures”, which is intended to enhance income tax disclosures around the rate reconciliation and income taxes paid. The purpose of the amendment is to provide readers of the financial statements with information to better assess the differences between the effective tax rate and the statutory tax rate across multiple jurisdictions, enabling them to understand tax implications around operational opportunities and potential future cash flows. The guidance is effective beginning with the Company's 2025 fiscal year Form
10
10-K for the fiscal year ending December 31, 2025. The adoption of ASU 2023-09 is not expected to have a material impact on the Company's financial position or results of operations.
In November 2024, the Financial Accounting Standards Board issued ASU 2024-03, Disaggregation of Income Statement Expenses (Topic 220), which requires additional disclosures, for interim and annual reporting, of expenses by nature, such as employee compensation, depreciation and amortization, and selling expenses. The updated standard will be effective for annual periods beginning in fiscal 2027 and interim periods beginning in the first quarter of fiscal 2028. Early adoption is permitted. This ASU will result in the required additional disclosures being included in the consolidated financial statements on a prospective basis, with the option for retrospective application, once adopted. The guidance is effective beginning with the Company's Form 10-K for the fiscal year ending December 31, 2027. The Company is currently evaluating the potential impact of adopting this new guidance on its condensed consolidated financial statements and related 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):
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Three Months Ended March 31, |
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2025 |
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2024 |
|
||
|
|
|
|
|
||
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, |
|
||||
|
2025 |
|
2024 |
|
||
|
|
|
|
|
||
United States |
$ |
|
$ |
|
||
Other |
|
|
|
|
||
Total |
$ |
|
$ |
|
||
Remaining Performance Obligations
As of March 31, 2025, the aggregate amount of transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied was $
As of March 31, 2025, the Company has contractual rights under its commercial agreements with customers and resellers to receive $
Contract Liabilities
Contract liabilities consist of the following:
|
March 31, |
|
December 31, |
|
||
|
2025 |
|
2024 |
|
||
|
(in thousands) |
|
||||
Contract Liabilities: |
|
|
|
|
||
Current |
$ |
|
$ |
|
||
Non-current |
|
|
|
|
||
Total contract liabilities |
$ |
|
$ |
|
||
Revenue recognized during the three months ended March 31, 2025 and 2024 that was included in the contract liabilities balance at the beginning of each of the periods was $
11
4. Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
|
March 31, |
|
December 31, |
|
||
|
2025 |
|
2024 |
|
||
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 its geographical area (in thousands):
|
March 31, |
|
December 31, |
|
||
|
2025 |
|
2024 |
|
||
United States |
$ |
|
$ |
|
||
Other |
|
|
|
|
||
Total |
$ |
|
$ |
|
||
5. Goodwill, Internal-use Software Development Costs and Intangible Assets
Goodwill
The goodwill reporting units were realigned into single reporting unit, consistent with the change to the Company's segment structure described in Note 2, "Segment Information". The changes in the carrying amount of goodwill during the three month ended March 31, 2025, relate to foreign currency translation adjustments.
Internal-use Software Development Costs
During the three months ended March 31, 2025 and 2024, the Company capitalized $
Amortization expense included in the condensed consolidated statements of operations was as follows (in thousands):
|
Three Months Ended March 31, |
|
||||
|
2025 |
|
2024 |
|
||
Cost of revenue |
$ |
|
$ |
|
||
Research and development |
|
|
|
|
||
Total |
$ |
|
$ |
|
||
12
Intangible Assets
Intangible assets, net consisted of the following (in thousands):
|
March 31, 2025 |
|
||||||||||
|
Gross |
|
Accumulated |
|
Net |
|
Weighted- |
|
||||
Technology |
$ |
|
$ |
( |
) |
$ |
|
|
|
|||
Customer relationship |
|
|
|
( |
) |
|
|
|
|
|||
Software and license |
|
|
|
( |
) |
|
|
|
|
|||
Trademark |
|
|
|
( |
) |
|
|
|
|
|||
Total |
$ |
|
$ |
( |
) |
$ |
|
|
|
|||
|
December 31, 2024 |
|
||||||||||
|
Gross |
|
Accumulated |
|
Net |
|
Weighted- |
|
||||
Technology |
$ |
|
$ |
( |
) |
$ |
|
|
|
|||
Customer relationship |
|
|
|
( |
) |
|
|
|
|
|||
Software and license |
|
|
|
( |
) |
|
|
|
|
|||
Trademark |
|
|
|
( |
) |
|
|
|
|
|||
Total |
$ |
|
$ |
( |
) |
$ |
|
|
|
|||
Amortization expense of intangible assets was $
As of March 31, 2025, future expected amortization expense is as follows (in thousands):
Years Ending December 31, |
|
|
|
2025 |
$ |
|
|
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, |
|
||
|
2025 |
|
2024 |
|
||
Prepaid expenses and other assets: |
|
|
|
|
||
Prepaid expenses |
$ |
|
$ |
|
||
Contract acquisition costs |
|
|
|
|
||
Other assets |
|
|
|
|
||
Total prepaid expenses and other assets |
$ |
|
$ |
|
||
|
|
|
|
|
||
Prepaid expenses and other assets: |
|
|
|
|
||
Current |
$ |
|
$ |
|
||
Non-current |
|
|
|
|
||
Total prepaid expenses and other assets: |
$ |
|
$ |
|
||
13
Contract acquisition costs consist of upfront customer contract discounts, unamortized warrants cost and sales commissions. Other assets consist of security deposit for leased properties, investment in term deposits and input tax receivables.
7. Accrued and Other Liabilities
The composition of accrued and other liabilities is as follows (in thousands):
|
March 31, |
|
December 31, |
|
||
|
2025 |
|
2024 |
|
||
Accrued and other liabilities |
|
|
|
|
||
Payroll and employee-related expenses |
$ |
|
$ |
|
||
Other accrued expenses |
|
|
|
|
||
Other liabilities |
|
|
|
|
||
Total accrued and other liabilities |
$ |
|
$ |
|
||
|
|
|
|
|
||
Accrued and other liabilities |
|
|
|
|
||
Current |
$ |
|
$ |
|
||
Non-current |
|
|
|
|
||
Total accrued and other liabilities |
$ |
|
$ |
|
||
Other accrued expenses consist of professional services, insurance and 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 and other customer-related transactions.
8
Other Commitments
Legal Matters
The Company is involved from time to time in various claims and legal proceedings arising in the ordinary course of business. From time to time as appropriate, the Company accrues liabilities related to legal claims in its financial statements. 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 its 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, 2025, except for potential losses associated with the estimated liabilities recorded in the condensed consolidated financial statements, no current claims and legal proceedings are expected to have a material adverse effect on its financial position, results of operations, or cash flows.
Indemnification
The Company enters into indemnification provisions under agreements with other parties in the ordinary course of business, including business partners, investors, contractors, customers, and the Company’s officers, directors, and certain employees. The Company has agreed to indemnify and defend the indemnified party claims and related losses suffered or incurred by the indemnified party from actual or threatened third-party claims due to the Company’s activities or non-compliance with obligations or representations made by the Company. The Company seeks to limit, or cap, its indemnification exposure in its commercial and other contracts. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision.
14
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
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, 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
Stock Options
A summary of the Company’s option activity during the three months ended March 31, 2025 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, 2024 |
|
|
$ |
|
|
|
$ |
|
||||
Options exercised |
|
( |
) |
|
|
|
|
|
|
|||
Options forfeited |
|
( |
) |
|
|
|
|
|
|
|||
Outstanding at March 31, 2025 |
|
|
$ |
|
|
|
$ |
|
||||
Exercisable at March 31, 2025 |
|
|
$ |
|
|
|
$ |
|
||||
15
There were
At March 31, 2025, there was $
Restricted Stock Units ("RSUs")
A summary of the Company’s RSU activity during the three months ended March 31, 2025 was as follows:
|
|
|
Weighted- |
|
||
|
|
|
Average |
|
||
|
RSUs |
|
Grant Date |
|
||
|
Outstanding |
|
Fair Value |
|
||
Awarded and unvested at December 31, 2024 |
|
|
$ |
|
||
Awards granted |
|
|
|
|
||
Awards vested |
|
( |
) |
|
|
|
Awards forfeited |
|
( |
) |
|
|
|
Awarded and unvested at March 31, 2025 |
|
|
$ |
|
||
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. RSUs vest over the requisite service period, which is one year from the date of grant for directors and generally ranges between
At March 31, 2025, there was $
Stock-based compensation expense (including amortization of capitalized warrants cost for the three months ended March 31, 2025) included in the condensed consolidated statements of operations was as follows (in thousands):
|
Three Months Ended March 31, |
|
||||
|
2025 |
|
2024 |
|
||
|
|
|
|
|
||
Cost of revenue |
$ |
|
$ |
|
||
Research and development |
|
|
|
|
||
Sales and marketing |
|
|
|
|
||
General and administrative |
|
|
|
|
||
Total stock-based compensation |
$ |
|
$ |
|
||
11. Income Taxes
The Company computes its tax provision for the three months ended March 31, 2025 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 for the three months ended March 31, 2025 and 2024 was
The Company forecasts an estimated effective tax rate in 2025, 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.
16
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, |
|
||||
|
|
2025 |
|
2024 |
|
||
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 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, |
|
||||
|
|
2025 |
|
2024 |
|
||
RSUs |
|
|
|
|
|
||
Warrants |
|
|
|
|
|
||
17
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
We are a leading provider of cloud-based bill payment technology and solutions. We deliver our next-generation product suite through a modern technology stack to more than 2,500 biller business and financial institution clients. Our platform was used by approximately 46 million consumers and businesses globally in December 2024 to pay their bills, make money movements 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 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, |
|
|||||||
|
2025 |
|
2024 |
|
% Growth |
|
|||
|
(in millions) |
|
|||||||
Transactions processed |
|
173.2 |
|
|
135.3 |
|
|
28.0 |
% |
We define transactions processed as the number of revenue generating payment transactions, such as checks, credit card and debit card transactions, automated clearing house, or 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 number of transactions processed during the three months ended March 31, 2025 increased approximately 28.0% as compared to the same period in 2024. The increase was primarily driven by the addition of new billers and increased transactions from our 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 2024 Form 10-K.
Impact of Economic and Inflationary Trends
Economic uncertainty increased meaningfully in the first quarter of 2025, driven by growing concerns around new or evolving trade and tariff policies, geopolitical tensions, inflationary pressures, and the interest rate outlook. These factors have introduced a significant level of uncertainty to the economic outlook for the remainder of the year. The risk of a recession or tighter credit markets could lead certain customers to scale back spending, adopt lower-cost payment methods, or suspend operations. These shifts may adversely impact our performance through the rest of 2025.
Additionally, elevated inflation could negatively affect our results due to the time lag between inflationary impacts and our ability to adjust pricing strategies. We are closely monitoring these trends and will take further action as needed to maintain operational resilience, while continuing to adapt our financial and operational approach in response to evolving macroeconomic conditions.
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 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.
18
Contribution Profit
We calculate contribution profit 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.
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 and assessment 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 method or 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. 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.
Contribution Profit
|
Three Months Ended March 31, |
|
||||
|
2025 |
|
2024 |
|
||
|
(in thousands) |
|
||||
Gross profit |
$ |
66,024 |
|
$ |
52,725 |
|
Plus: other cost of revenue |
|
21,618 |
|
|
16,642 |
|
Contribution profit |
$ |
87,642 |
|
$ |
69,367 |
|
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, 2025 increased approximately 26.3%, as compared to the same period in 2024. The increase was primarily driven by growth in transaction count and volume driven by the addition of new billers and financial institutions and increased transactions from our existing billers and financial institutions.
19
Adjusted Gross Profit
|
Three Months Ended March 31, |
|
||||
|
2025 |
|
2024 |
|
||
|
(in thousands) |
|
||||
Gross profit |
$ |
66,024 |
|
$ |
52,725 |
|
Stock-based compensation |
|
66 |
|
|
51 |
|
Amortization of capitalized software development costs |
|
5,638 |
|
|
4,029 |
|
Amortization of acquisition-related intangibles |
|
828 |
|
|
830 |
|
Adjusted gross profit |
$ |
72,556 |
|
$ |
57,635 |
|
Adjusted gross profit for the three months ended March 31, 2025 increased 25.9%, as compared to the same period in 2024. Adjusted gross profit improved in line with contribution profit. Adjusted gross profit as a percentage of contribution profit decreased modestly, as a result of changes in customer mix resulting primarily from the addition of large, high-volume enterprise billers with lower margins in our biller mix. This decline was partially offset the realization of economies of scale. 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. The increase in amortization was driven by additional capitalization of software development costs.
Adjusted EBITDA
|
Three Months Ended March 31, |
|
||||
|
2025 |
|
2024 |
|
||
|
(in thousands) |
|
||||
Net income — GAAP |
$ |
13,813 |
|
$ |
7,226 |
|
Interest income, net |
|
(2,062 |
) |
|
(2,186 |
) |
Other income(1) |
|
— |
|
|
(213 |
) |
Provision for income taxes |
|
3,988 |
|
|
3,534 |
|
Amortization of capitalized software development costs |
|
8,426 |
|
|
6,311 |
|
Amortization of acquisition-related intangibles |
|
2,137 |
|
|
2,021 |
|
Depreciation |
|
177 |
|
|
205 |
|
EBITDA |
$ |
26,479 |
|
$ |
16,898 |
|
|
|
|
|
|
||
Adjustments |
|
|
|
|
||
Foreign exchange gain |
|
(50 |
) |
|
(18 |
) |
Stock-based compensation |
|
3,545 |
|
|
2,933 |
|
Adjusted EBITDA |
$ |
29,974 |
|
$ |
19,813 |
|
(1) Other income consists of a remeasurement adjustment relating to the purchase price of a prior acquisition.
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 51.3% in the three months ended March 31, 2025, as compared to the same period in 2024. The increase was primarily driven by growth in transaction count and volume driven by the addition of new billers and financial institutions and increased transactions from our existing billers and financial institutions.
Free Cash Flow
|
Three Months Ended March 31, |
|
||||
|
2025 |
|
2024 |
|
||
|
(in thousands) |
|
||||
Net cash provided by operating activities |
$ |
50,441 |
|
$ |
10,954 |
|
Purchases of property and equipment |
|
(60 |
) |
|
(116 |
) |
Capitalized internal-use software development costs |
|
(9,278 |
) |
|
(9,276 |
) |
Free cash flow |
$ |
41,103 |
|
$ |
1,562 |
|
20
The increase in free cash flow for the three months ended March 31, 2025 was primarily driven by higher cash generated from operations.
Results of Operations
The following table sets forth our condensed consolidated statements of operations for the periods presented:
|
Three Months Ended March 31, |
|
Change |
|
||||||||
|
2025 |
|
2024 |
|
$ |
|
% |
|
||||
|
(in thousands) |
|
|
|
|
|
||||||
Revenue |
$ |
275,235 |
|
$ |
184,875 |
|
$ |
90,360 |
|
|
48.9 |
% |
Cost of revenue |
|
209,211 |
|
|
132,150 |
|
|
77,061 |
|
|
58.3 |
% |
Gross profit |
|
66,024 |
|
|
52,725 |
|
|
13,299 |
|
|
25.2 |
% |
Gross margin (1) |
|
24.0 |
% |
|
28.5 |
% |
|
|
|
|
||
Operating expenses |
|
|
|
|
|
|
|
|
||||
Research and development |
|
15,101 |
|
|
12,051 |
|
|
3,050 |
|
|
25.3 |
% |
Sales and marketing |
|
26,051 |
|
|
23,239 |
|
|
2,812 |
|
|
12.1 |
% |
General and administrative |
|
9,183 |
|
|
9,092 |
|
|
91 |
|
|
1.0 |
% |
Total operating expenses |
|
50,335 |
|
|
44,382 |
|
|
5,953 |
|
|
13.4 |
% |
Income from operations |
|
15,689 |
|
|
8,343 |
|
|
7,346 |
|
|
88.0 |
% |
Interest income, net |
|
2,062 |
|
|
2,186 |
|
|
(124 |
) |
|
(5.7 |
)% |
Other income (2) |
|
50 |
|
|
231 |
|
|
(181 |
) |
|
(78.4 |
)% |
Income before income taxes |
|
17,801 |
|
|
10,760 |
|
|
7,041 |
|
|
65.4 |
% |
Provision for income taxes |
|
(3,988 |
) |
|
(3,534 |
) |
|
(454 |
) |
|
12.8 |
% |
Net income |
$ |
13,813 |
|
$ |
7,226 |
|
$ |
6,587 |
|
|
91.2 |
% |
(1) Gross margin is calculated as gross profit divided by revenue.
(2) Other income for the three months ended March 31, 2024 includes a remeasurement adjustment relating to the purchase price of a prior acquisition.
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, |
|
||||
|
2025 |
|
2024 |
|
||
Revenue |
|
100.0 |
% |
|
100.0 |
% |
Cost of revenue |
|
76.0 |
% |
|
71.5 |
% |
Gross profit |
|
24.0 |
% |
|
28.5 |
% |
Operating expenses |
|
|
|
|
||
Research and development |
|
5.5 |
% |
|
6.5 |
% |
Sales and marketing |
|
9.5 |
% |
|
12.6 |
% |
General and administrative |
|
3.3 |
% |
|
4.9 |
% |
Total operating expenses |
|
18.3 |
% |
|
24.0 |
% |
Income from operations |
|
5.7 |
% |
|
4.5 |
% |
Interest income, net |
|
0.7 |
% |
|
1.2 |
% |
Other income |
|
0.0 |
% |
|
0.1 |
% |
Income before income taxes |
|
6.4 |
% |
|
5.8 |
% |
Provision for income taxes |
|
(1.4 |
)% |
|
(1.9 |
)% |
Net income |
|
5.0 |
% |
|
3.9 |
% |
Comparison of the Three Months Ended March 31, 2025 and 2024
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.
21
Cost of Revenue, Gross Profit and Gross Margin
The increase in cost of revenue was driven by the increase in revenue and transactions processed, as it consists primarily of interchange fees and processor costs, as well as other direct costs associated with making our platform available to our billers.
Gross margin decreased due to changes in customer mix resulting primarily from the addition of large, high-volume enterprise billers with lower margins in our biller mix. This decline was partially offset by the realization of economies of scale.
Research and Development Expenses
The increase in research and development expenses was primarily due to increases in cloud computing services expenses due to higher utilization of cloud-based infrastructure and increased data processing demands, amortization of capitalized internal-use software development costs and employee-related costs, including benefits due to increased headcount and merit increases in annual compensation.
Sales and Marketing Expenses
The increase in sales and marketing expenses was primarily due to an increase in reseller commissions, including amortization of warrants.
General and Administrative Expenses
The marginal increase in general and administrative expenses was primarily due to increases in professional fees and legal fees, which were offset by lower cost of insurance premiums of certain business policies.
Interest income, net
The changes in interest income, net was a result of higher cash balances held with banks, offset by lower interest rate.
Income Taxes
The change in provision for income taxes as well as the decrease in the Company's effective tax rate, which was 22.4% for the three months ended March 31, 2025 as compared to 32.8% for the same period in the prior year, 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. In 2024, it was primarily the result of permanent differences for disallowed compensation pursuant to IRC Section 162(m), state taxes and the impact of the full valuation allowance that has since been released.
Liquidity and Capital Resources
Sources and Uses of Funds
As of March 31, 2025, we had $245.8 million of unrestricted cash and cash equivalents. We believe that existing unrestricted cash and cash equivalents will be sufficient to support our working capital and capital expenditure requirements 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 and subscriptions. Our principal uses of cash are funding operations and capital expenditures.
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.
22
Historical Cash Flows
The following table summarizes our condensed consolidated cash flows.
|
Three Months Ended March 31, |
|
||||
|
2025 |
|
2024 |
|
||
|
(in thousands) |
|
||||
Net cash provided by (used in) |
|
|
|
|
||
Operating activities |
$ |
50,441 |
|
$ |
10,954 |
|
Investing activities |
|
(8,287 |
) |
|
(9,513 |
) |
Financing activities |
|
(1,892 |
) |
|
(406 |
) |
Effects of foreign exchange on cash |
|
(25 |
) |
|
(78 |
) |
Net increase in cash, cash equivalents and restricted cash |
$ |
40,237 |
|
$ |
957 |
|
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, 2025 was $50.4 million. Net income was $13.8 million, adjusted for non-cash charges of $15.8 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 and credit adjustments, which contributed positively to cash provided from operating activities. This was additionally supported by net cash inflows of $20.9 million provided by changes in our operating assets and liabilities.
Net cash provided by operating activities for the three months ended March 31, 2024 was $11.0 million. Net income was $7.2 million, adjusted for non-cash charges of $13.2 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 and credit adjustments, which contributed positively to cash provided from operating activities. This was offset by net cash outflows of $9.5 million due to 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, 2025 consisted of $9.3 million of capitalized internal-use software development costs and $0.1 million of purchases of property and equipment, offset by $1.1 million cash inflow from net change in interest-bearing deposits.
Net cash used in investing activities for the three months ended March 31, 2024 consisted of $9.3 million of capitalized internal-use software development costs, $0.1 million of purchases of property and equipment and $0.1 million 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, 2025 consisted 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.
Net cash used in financing activities for the three months ended March 31, 2024 consisted of $0.5 million of settlement of holdback liability relating to a prior acquisition, 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 U.S. 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 2024 Form 10-K. Except for those disclosed in Note 2 "Summary of Significant Accounting Policies" of this Quarterly Report on Form 10-Q, there have been no material changes in our critical accounting policies and estimates since December 31, 2024.
23
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.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
There have been no material changes in our exposures to market risk since December 31, 2024. For details on the Company’s interest rate, foreign currency exchange, and inflation risks, see Part I, Item 7A. “Quantitative and Qualitative Information About Market Risk” in our 2024 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, 2025, 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, 2025 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.
24
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. We are not currently party to any material legal proceedings, and, except as referred to in Note 8 to the condensed consolidated financial statements, 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 2024 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.
During the quarter ended March 31, 2025, none of the Company’s directors or officers
25
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+ |
|
|
|
|
|
|
|
|
|
|
X |
|
10.2+ |
|
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. |
|
|
|
|
|
|
|
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document |
|
|
|
|
|
|
|
|
|
|
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
|
|
|
|
|
|
|
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
|
|
|
|
|
|
|
|
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
|
|
|
|
|
|
|
|
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
|
|
|
|
|
|
|
|
104 |
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
|
|
|
|
|
|
|
|
|
|
+ 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.
26
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 7, 2025 |
|
By: |
/s/ Dushyant Sharma |
|
|
|
Dushyant Sharma |
|
|
|
Chairman, President and Chief Executive Officer |
|
|
|
(Principal Executive Officer) |
|
|
|
|
Date: May 7, 2025 |
|
By: |
/s/ Sanjay Kalra |
|
|
|
Sanjay Kalra |
|
|
|
Senior Vice President and Chief Financial Officer |
|
|
|
(Principal Financial and Accounting Officer) |
27