Paymentus Holdings, Inc.

Good day and welcome to the first quarter 2024 Pimenta's earnings conference call. This call is being recorded. All participants are currently in a listening only mode. There will be an opportunity for questions and answers following the management's prepared remarks. At this time, I would now like to turn the call over to David Hanover, investor relations. Please go ahead.

thank you good afternoon and welcome to payment this first quarter 2024 earnings call joining me on the call today is dushan sharma our founder and ceo and son sanjay khara 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.paymentus.com. Statements made on this webcast will 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 and our ability to address continued economic and geopolitical uncertainty market opportunities business strategies implementation timing product enhancements impactful 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 risk 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 captions special note regarding forward-looking statements and risk factors in our annual report on form 10k for the year ended December 31st, 2023, and our subsequent quarterly reports on Form 10-Q, including our Form 10-Q for the quarter ended March 31st, 2024, which we expect to file with the SEC shortly, and elsewhere in our other filings with the SEC. We encourage you to review these detailed four little statements, 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, non-GAAP operating expenses, adjusted EBITDA, adjusted EBITDA margin, and non-GAAP net income and earnings per share. These non-GAAP financial measures, which we believe are useful in measuring our performance and liquidity, should be considered in addition to and 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 of the most directly directly comparable gap measures in our earnings press release issued today and the supplemental slides for this webcast, each 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. Dushant?

Thank you, David. We're off to a strong start in 2024 with a great first quarter. We delivered year-over-year growth in revenue, contribution profit, and adjusted EBITDA, all ahead of our long-term targets of 20% top line and 20 to 30% adjusted EBITDA growth. We continue to have substantial momentum in 2024, which gives us added excitement about the remainder of the year and our long-term prospects. In the first quarter of 2024, Paymentus again delivered results that exceeded our expectations. First quarter revenue was $184.9 million, up 24.6% year over year. First quarter contribution profit was $69.4 million, up 29.6% year over year, our strongest growth in six quarters. Adjusted EBITDA, which as many of you know is a significant financial metric for us, was $19.8 million, up 135.5% year-over-year. In addition to these outstanding results, we also exited the first quarter with a strong bookings and a strong implementation backlog that we believe positioned us quite well for a strong 2024. In the first quarter 2024, we added $15.9 million in contribution profit over the same period last year. At the same time, we dropped $11.4 million or 72% of that growth to adjusted EBITDA. We are pleased that over the past few quarters, we have continued to drop a significant majority of incremental contribution profit dollars to our bottom line. We believe this demonstrates a key strength of our operating strategy, as well as our ability to consistently expand our operating leverage without sacrificing growth or innovation. Execution of our disciplined strategy has once again allowed us to surpass the rule of 40, doing so by a wide margin this quarter at 58. As we have shared previously at Pimentas, our goal remains to continue delivering high quality earnings alongside solid top line growth. We are proud of what we have achieved to date and over the last several quarters. and we expect to continue to execute our strategy and deliver long-term top-line and adjusted EBITDA growth. Now I'd like to share some of our key first quarter business highlights and accomplishments. As I mentioned earlier, we finished Q1 2024 with a strong backlog and are very pleased with our year-over-year growth. Of course, all of this continues to be driven by the strength of our technology platform and our IP and ecosystem, which enables our clients to participate in a broad and diverse network by merely integrating onto our platform. Turning specifically to client activity, this was a great booking quarter for Paymentus, both in terms of aggregate annual contract value and the number of clients signed. During the first quarter, we signed several notable and large new clients in variety of verticals, including utilities, general services, transportation and logistics, government, and financial services. As you can see from these bookings, our omnichannel platform allows us to continue to broaden our customer diversity and gain traction across new industries. Another area we continue to focus on is the implementation and onboarding of our strong backlog to drive even further growth. This effort is progressing well, and in order to support this, we continue to make incremental targeted investments in this area in both staffing and technology. We believe these investments, along with continually improving post-pandemic conditions, allowing for a more in-person collaborative process, provide a good tailwind for us in this regard. We are realizing the benefits of our focus strategy and these targeted investments as evidenced by our success in implementing and onboarding new clients during the first quarter, including the launch of several large clients across various verticals, including multiple utilities, insurance, government agencies, and financial institutions. We expect to make further progress in this area throughout 2024, consistent with our growth plans and internal targets. In addition to the financial execution of our core business, we continually think about ways to increase long-term shareholder value through what we call strategic execution. One such example is our recently awarded patent on artificial intelligence. As you know, integration is one of our key strengths, and we have done thousands across a number of industries, resulting in deep experience and integration assets. Well before AI was a mainstream buzzword, we conceived and filed a patent for an AI-based integration framework, which when combined with our significant experience and assets, can bring tremendous operational efficiencies internally, while at the same time, provide our clients an ability to expand their use of our platform by integrating more of their processes with us. And the reason we are talking about this is threefold. First, we believe this demonstrates our forward-thinking culture, looking ahead with a strategic focus on both defensive and offensive market strategies. Second, this AI-based framework, when fully integrated into our mainstream onboarding processes, is expected to add additional benefit towards onboarding experience and speed in the outer years. And third, we believe the prudent deployment of AI generally can play a central part of our strategy, both internally by enhancing internal operating efficiencies and externally by enabling our clients to improve their customer experience and efficiencies. We believe that this type of strategic execution is possible primarily because Paymentus has the rare trait that usually exists in large tech companies. Our business has unique in-area visibility to deliver consistent shareholder returns, but also allows us to execute strategically to create additional long-term shareholder value. In closing, we are proud to report another period of outstanding results that were ahead of our original expectations. At the same time, we continue to demonstrate our ability to increase operating leverage without sacrificing revenue growth or innovation. We also ended the quarter with a strong backlog and solid sales momentum, giving us greater visibility and confidence in our prospects for the balance of the year. We intend to remain focused and disciplined in onboarding our strong backlog, which we expect to continue to fuel our future growth. Now let me turn it over to Sanjay to review our financial results in greater detail. Sanjay.