Paymentus Holdings, Inc.

Good day and welcome to Paymentus' first quarter 2022 earnings call. This call is being recorded. All participants are currently in a listen-only mode. There will be an opportunity for your questions following management's prepared remarks. To ask a question, please press star 1 on your telephone keypad. At this time, I would like to hand the call over to Paul Seaman, VP of Finance and Strategy, for some introductory comments. Please go ahead.

Thank you. Good afternoon and welcome to Paymentus' first quarter 2022 earnings call. Joining me on the call today are Dushant Sharma, our founder and CEO, and Matt Parson, our CFO. Following our prepared remarks, we'll take questions. Our press release is 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 and the supplemental slides accompanying this presentation will be available on our company's website under the investor relations link at ir.paymentus.com. Statements made on this call 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 and guidance, market opportunity, business strategies, impact from acquisitions, and other matters. These forward-looking statements speak as of today and we undertake no obligation to update them. 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, special note regarding forward-looking statements, and risk factors in our annual report on Form 10-K for the year ended December 31st, 2021, which we filed with the SEC on March 3rd, 2022. our quarterly report on Form 10-Q for the quarter ended March 31st, 2022, which we expect to file with the SEC in early May 2022, and elsewhere with our other filings with the SEC. We encourage you to review these detailed safe harbor and risk factor disclosures. In addition, during today's call, we will discuss certain non-GAAP financial measures, specifically contribution profit, adjusted gross profit, adjusted EBITDA and adjusted EBITDA margin, are non-GAAP financial measures. These non-GAAP financial measures, which we believe are useful in measuring our 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 the most directly comparable GAAP measures. In our earnings press release issued today and the supplemental slides for the forecast, each available on the investor relations page of our website and our filings at the SEC. With that, I'd like to turn the call over to Dushan Sharma, our founder and CEO. Thanks, Paul.

We started 2022 with a very strong quarter across all KPIs and saw little to no impact from the geopolitical and economic events that occurred, including the events in Ukraine and inflation. We believe we have a clear view of the business and are optimistic about the outlook for the remainder of 2022 as well as the foundation it sets for 2023. We believe one great aspect of our business is that it is extremely resilient because consumers and businesses have to pay their bills, essential bills, regardless of world events or whether the economy enters a recession or not. On a quick personal note, This is our fourth quarterly update since the IPO as we approach our first anniversary. I'm having a lot of fun building the business. So is my team. I know based on where the markets have been, one would think that we could be distracted, but we are not. We are laser focused on executing our business strategies as we seek to build a long-term successful and high-growth business. We all understand and remain focused on the effect of long-term compounding growth. As a new public company and where I sit today, despite our scale, I view us as a startup public company and believe we are just getting started. I welcome each and every one of you on our journey and to share in our long-term success. Let me now discuss our financial performance, which demonstrates that we are executing and performing well. In the first quarter, contribution profit grew 35%. driven by a 40.9% increase in transactions. From the sales booking perspective, we signed over 60 clients in the quarter, which is about 50% more than the same period last year. These sales numbers are inclusive of direct, partner, and JPMorgan migrations, which require some sales support to complete. Relative to the comparable quarter of 2021, our sales were more diverse, with less than 40% from the utilities vertical. The largest areas of increase were city services, insurance, and mortgage payments. But we also signed clients as unique as a leading home design company. We crossed an annual run rate of $100 billion in payments volume during the quarter. We believe very few companies in the U.S. are processing at this scale, which is nearly a quarter billion dollars per day on an average. As we have said before, the scale creates opportunities to strengthen our network and process our relationships because of the unique value we bring in under-penetrated segments for digital payments. We continue to work to establish additional relationships in our newer segments. In past quarters, we have talked about the expansion of our telecom partnerships. This quarter, we have signed the healthcare division of one of the top five U.S. banks to expand our footprint in the industry. We expect the partnership to provide us with expanded access to practice management systems. Adding partners in areas such as healthcare, telecom, and other under-penetrated verticals help our sales efforts and complements our direct selling process. Illustrative for our ability to increase our share of the total addressable market, in the quarter, we went live with one of the largest owners of apartments in the country. Real estate is outside of the core six verticals that we talk about, but represents a significant opportunity on its own. As you can imagine, rent payments fall in our sweet spot of both non-discretionary and reoccurring. We believe this implementation shows the flexibility and the breadth of our platform, which powers industries as diverse as real estate, B2B logistics, and home security providers not to mention our existing core verticals. We are making progress migrating the JPMorgan Chase client base. We completed our first implementations in the quarter, and many more are in flight and scheduled to go live throughout the year. While this added revenue isn't mature yet, we expect it to build over time. In addition, the new deal sales channel from JPMorgan Chase continues to build, and the relationship continues to be more and more beneficial for both parties. A quick note on our IPN ecosystem. We continue to expand the network and add more and more endpoints, including the FIs. As a reminder, IPN is symbiotic with Biller Direct. IPN helps us win more Biller Direct deals, and Biller Direct wins because help us add more IP and partners in volume. I'll now turn the call over to Matt to discuss our financial results in more detail.