Paymentus Holdings, Inc.

Good day and welcome to Pimenta's second quarter 2022 earnings call. This call is being recorded. All participants are currently in a listening mode. There will be an opportunity for your questions following management's prepared remarks. At this time, I would like to hand the call over to Paul Seaman, Vice President Financial and Strategy, for some introductory comments. Please go ahead.

Thank you. Good afternoon and welcome to Payments. This is the second 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 was issued after the 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.com. Statements made on this webcast 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, the impact of continued economic uncertainty and inflation, our market opportunities, business strategies, implementation timing, product enhancements, 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 that differ materially from those set forth in such statements, including the risks and uncertainties set forth under the captions, special note regarding forward-looking statements, and risk factors. In our annual report on Form 10-K, for the year of December 31st, 2021, which we filed with the SEC on March 3rd, 2022. Our quarterly report on Form 10-Q for the quarter ended June 30th, 2022, which we expect to file with the SEC in early August 2022, and elsewhere in our 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. and our earnings press release issued today in the supplemental slides for this webcast, each available on the investor relations page of our website and in our filings of the SEC. With that, I'd like to turn the call over to Dushant Sharma, our founder and CEO. Thanks, Paul.

We believe the business performed well in the second quarter with momentum in both sales and revenues. The revenue increased 26.5 million dollars or 28.3% to $120 million. Contribution profit in the quarter grew 30.2% to $48.7 million, driven by a 39.4% increase in transactions. Our sales engine continued to be strong, with signings of more than 60 deals again this quarter, bringing the year-to-date total to over 125. This number of signings is more than 50% higher versus the same period last year. Notwithstanding the challenging economic environment, including inflationary pressures and recession, these results illustrate why we believe our business is resilient. In spite of the current headwinds, we are seeing around client-based implementation delays and inflation, which we will talk more about later in these prepared remarks, we remain excited about our fundamental business operations and long-term prospects. We continue to drive implementations forward and had a number of client implementation success stories in the quarter. One example is the implementation of one of the largest utilities in the country. This client serves a very large footprint across the country and selected us to handle the complexity of the nationwide implementation. We also completed a migration of a large municipality with JP Morgan support. A third client we implemented in the quarter was a top 20 credit union with over $10 billion in assets. As we continue to move up market, this is our third financial services client with over $10 billion in assets launched on our banking IPN platform. As you know, the pricing model for banking bill payments is not affected by interchange. Also in the quarter we received the Paysetter Award for 2022 from a large enterprise software company utilities user group, recognizing payment risk for its leadership in billing and payments innovation. We are proud of this award and believe it exemplifies the strength of our billing and payments product and innovation. We also completed integration with one of the leading providers of electronic healthcare records in the quarter, along with adding advanced payment functionality for the healthcare vertical to our product. Although we believe we had a solid financial performance this quarter, the difficult economic climate is not without impact on us. Implementation and onboarding is one of the primary areas we are seeing impacted by these difficult economic times. A few of our larger deployments, which were originally slated to go live in Q2 and the back half of 2022, have been stretched out due to lack of client IT resource availability. Due primarily to these client-based slowdowns, we are changing our full year 2022 guidance. However, I'd like to make it clear that in better economic climate with normal implementation timelines, specifically related to these clients, I believe we would be meeting or beating existing guidance for 2022. If you take a long-term view of the business as we do, these barriers are not particularly significant, especially considering that The anticipated financial benefits from these clients are merely delayed to future quarters, not lost. Matt will cover the details as he discusses our financial results and revised guidance. Matt.