Paymentus Holdings, Inc.

and welcome to the Pimenta's third quarter earnings call. This call is being recorded. All participants are currently in a listen-only mode. The floor will be open for your questions following management's prepared remarks. If you would like to ask a question, please press star on your telephone keypad. At this time, I would like to hand the call over to Paul Seaman, VP, Finance and Strategy, for some introductory remarks. Please go ahead.

Paul Seaman Thank you. Good afternoon and welcome to Paymentus' Q3 2021 earnings call. Joining me in the call today are Dushant Sharma, our founder and CEO, and Matt Parson, our CFO. Following our prepared remarks, we will take questions. Our press release was issued after close of market today and is posted on our website, where this call is being simultaneously webcast. The webcast replay of this call will be available on our company website under the investor relations link at ir.paymentus.com. Statements made on this include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements use words such as will, believe, expect, anticipate, and similar phrases that denote future expectation or intent regarding our financial results, our market opportunity, business strategies, impact from acquisitions, and other matters. These statements are subject to risks, uncertainties, and assumptions that may cause actual results to differ materially. from those set forth in such statements, including the risks and uncertainties set forth under the caption risk factors in our quarterly report on Form 10-Q for the quarter ended June 30th, 2021, which we filed with the SEC on August 11th, 2021, and our quarterly report on Form 10-Q for the quarter ended September 30th, 2021, which we expect to file with the SEC on November 10th, 2021, and elsewhere in our filings with the SEC. In addition, During today's call, we will discuss non-GAAP financial measures. Specifically, contribution profit, adjusted gross profit, adjusted EBITDA, and adjusted EBITDA margins are non-GAAP financial measures. These non-GAAP financial measures, which we believe are useful in measuring payments performance and liquidity, should be considered in addition to, not as a substitute for, or in isolation from GAAP results. We encourage you to review additional disclosures regarding these non-GAAP measures. including reconciliations with comparable GAAP results. And our earnings press release issued today and available on the investor relations page of our website. With that, I'd like to turn the call over to Dushant Sharma, our founder and CEO.

Thank you, Paul. And thank you everyone for joining our call today. A lot of great things are happening at Paymentus. As you can see from our earnings press release, we had a great third quarter across our business. strong financial performance, strong implementations, and strong sales. Our contribution profit grew 37% year over year to $40.7 million in the quarter. This is a significant acceleration from Q3 of 2020 and from our last quarter, and we believe this is just the beginning of the network effect that we have been talking about. We have signed over 140 billers so far through Q3, and had an exceptionally strong quarter for sales driven by a large enterprise business deal. This deal alone could add in excess of 400 basis points to our current revenue run rate when fully implemented. The strong sales performance is a good example of the halo effect from the IP and ecosystem we have built. We processed 70.6 million transactions in the quarter, an increase of 45% year over year, giving us an annualized run rate of over 280 million transactions. This amount remains less than 2% of the overall domestic bill payment market of over 15 billion transactions. In five of the six verticals as we currently focus on, utilities, insurance, financial services, telecommunications, government and healthcare, we have less than 2% of the billers as clients, with utilities being the only one over 2%. Overall, we believe the sales opportunity is significant and the runway is long. In addition to the runway being long, with respect to the ongoing addition of new clients, one of the key strengths of our business is the length of relationships that we enjoy with our existing clients and partners. They trust us with long-term contracts, generally three to five years, though sometimes longer. This gives us a significant ability to build and creatively execute on our strategy to grow our business into a big and pervasive platform and to expand our TAM, which also gives us a great deal of confidence regarding our growth prospects for 2022, 2023, and beyond, assuming, of course, that we continue to execute on our service and the payment volumes continue based on the historical patterns. In the large market, we recently expanded our relationship with JPMorgan Chase, We'll work closely with the bank on sales of digital payment to give J.P. Morgan Chase corporate and commercial clients. There will also be a revenue stream from some existing bill pay clients for J.P. Morgan, which we will recognize as those clients go live on our platform. This is a very exciting relationship for us, and we have already seen the benefits in our sales and pipeline growth as billers have recognized the power of our combined resources. Additionally, in the mid-market, we have renewed our relationship with Harris Computer, a key partner for us. Harris is a leading provider of CIS systems to government and utilities, and we are optimistic about continuing to grow together. With the help of our partners, our network ecosystem, and our extraordinary sales team, we just had a very strong sales quarter, which continues our momentum from earlier in the year. We completed some sizable implementations in the third quarter and fourth quarter looks strong as well, providing strong growth going into 2022. For example, we brought one of the largest water utilities in the US live in Q3, serving well over a million customers, both residential and commercial. They chose Paymentus to replace a legacy provider because of our platform's functionality, real-time integration with their ERP system, and our IP and ecosystem. As anticipated, we closed our acquisitions of Payveris and Finovera in the third quarter and continue to make progress integrating them. Previously, Paymentus was not capturing financial services initiated transactions, but those payments now become part of our instant payment network following the Payveris acquisition. Further, a significant percentage of the Payveris transactions are sent to non-Paymentus billers. These billers then become targets of our sales team. We enjoy the same phenomenon across other IPN partners as well. The implication is that we are no longer limited to only processing transactions for our 1,400-plus direct billers. Our reach to our IPN ecosystem massively extends our distribution and shows the power of IPN to expand our obtainable market. Just to make this point clear, consumers can pay bills to non-paymenters billers through our technology retail and banking partners. We have created a modern platform and an ecosystem that allows any user, any biller, and any partner to engage like never before possible and extend the flexibility of the biller's ecosystem and joy to our platform to all these apps in our ecosystem. This results in a unique value proposition for all three and the flywheel effect. We are having a lot of fun leveraging the foundation of the ecosystem we have built by attracting the type of clients and partners we are adding. As you build the ecosystem, our four objectives remain. Number one, sign and implement as many billers as possible. Number two, constantly grow biller payment volume through digital adoption and usage. Number three, expand the reach of IPN to process as many payments from as many partners as possible. Number four, generate a one lead list of all billers that are outside of our biller direct platform, but processed through our IP and network, and therefore add them to our sales pipeline. Finally, some of the seeds we have been planting are beginning to sprout. Our B2B payment volume is over $1 billion now on a run rate basis. And similarly, our IP and network payment volume is over $1 billion as well. The reason I mention this is to provide proof points that both products are contributing to our financial performance and growth acceleration. We are excited about the momentum and expect to continue to expand on it. It's still early days, but a very positive sign. With that, I'll pass the call over to Matt.