Paymentus Holdings, Inc.

Good day and welcome to the fourth quarter and full year 2024 Payment to Earnings Conference call. This call is being recorded. All participants are currently in a listen-only mode. There will be an opportunity to ask questions following the management's prepared remarks. If you'd like to ask a question, please press star 1 on your telephone keypad. At this time, I will now turn the call over to David Hanover, Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon. Welcome and thank you for joining the webcast to review our fourth quarter and full year 2024 results. Our earnings release documents are available on the investor relations section of the Paymentus.com website. They include the earnings presentation that we'll make reference to during this webcast. This webcast is being recorded. I hope everyone's had a chance to review those documents. Our founder and CEO, Dushant Sharma, will make some opening comments before Sanjay Kalra, our CFO, discusses the details of the fourth quarter and full year and our guidance. Following our prepared remarks, we'll take questions. Let me just remind you that we may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and we refer to non-GAAP financial measures during the website. Forward-looking statements are based on management's current expectations and assumptions that are subject to risks and uncertainties. Factors that may cause our actual results to differ materially from expectations are detailed in our earnings material and our SEC filings that are available on both the SECs and our websites. information about non-GAAP financial measures, including reconciliations to US GAAP, can also be found in our earnings materials that are available on the website. With that, I'd like to turn the webcast over to Dushant Sharma. Dushant?

Thanks, David. 2024 was an outstanding year for Paymentus. And based on the vast dam of non-discretionary bills and our continued market momentum, We believe our best is yet to come, and we are just getting started. As I've shared in the past, we operate our business on a two-year horizon, and it is quite satisfying to see how well we have executed over the last two years. Likewise, we're just as excited about our next two-year horizon and beyond. And this view is based on five factors. First, our continued sales momentum, second, our strong bookings in 2024, third, our significant exit backlog net of large client launches in the third quarter, fourth, our continued onboarding success, and fifth, our phenomenal innovation framework that will continue to be disruptive in the broader fintech market. Despite our 2024 outperformance, we remain committed to our CAGR model of 20% top line and 20 to 30% adjusted EBITDA growth for 2025. And based on our guidance philosophy that has served us very well over the last couple of years, I'm pleased to report that we believe we can deliver the top end of our 2025 guidance that Sanjay will cover shortly without signing any new clients provided, of course, we deliver implementations as planned. With that context, let me now discuss our fourth quarter and full year 2024 results. We ended the year on a strong note with fourth quarter results that exceeded our expectations across all areas of our business. Fourth quarter 2024 revenue was a record $257.9 million, up 56.5% year-over-year. Fourth quarter contribution profit was $86.2 million, up 30% year-over-year. Our adjusted EBITDA, which as many of you know is a significant financial metric for us, was $27.3 million for the quarter, up 36.9% year over year. And on a rule of 40 scale, we saw a sequential increase in the quarter to 62. For the full year 2024, revenue increased 41.9% over last year to $871.7 million, far exceeding our long-term target of 20% top line growth. Adjusted EBITDA increased 62.2% for the year to $94.2 million, once again well ahead of our long-term target of 20 to 30% growth. Contribution profit for 2024 was $312.1 million, going 29.5% annually. We also saw a great year for bookings in 2024. The multi-year commitments under our typical agreements from these bookings gives us a lot of confidence in our ability to achieve our CAGR model. As a reminder, our CAGR model is for our primary metrics of revenue and adjusted EBITDA only and should not be confused with secondary metrics such as contribution profit and OPEX. As we have done very effectively so far, we will continue to use our strong operating leverage to calibrate contribution profit and OPEX as necessary to achieve these targets. In addition to the numbers we reported today, as noted on our last earnings call, there is a specific business strategy in play here. While today interchange only serves as a cost center for us, over time our strategy is to have the interchange economy and associated lifecycle flow through our P&L as we capture more market share. This will increase our scale, which also creates tremendous opportunities for modernization and cost reductions. So longer term, we will work to expand our margins by pursuing products and solutions that offer the ability to convert part of the interchange from a cost center to a revenue center. Said differently, we think of interchange as a potential new expansion of the total addressable market for our business. Even though this is a long-term play, we wanted to make sure that investors are aware of the strategy behind our execution. Now I'll review some of our key fourth quarter business highlights and accomplishments. As I mentioned earlier, we finished 2024 with a strong backlog and solid top line growth as a result of our technology platform and our IP and ecosystem. During the fourth quarter, we signed clients in various industry verticals, including insurance, government agencies, utilities, banking and credit unions, consumer finance organizations, and educational institutions, among others. We believe this extensive mix of new customers demonstrates the diversity of the businesses and the multiple industry verticals our platform can support. In addition, we signed several new channel partners in various industry verticals to deepen our partner ecosystem. These verticals include government services, utilities, insurance, and healthcare. Our diverse and ever-expanding partner network is an excellent companion to our direct go-to-market strategy. And in addition to this strategy, we continue to focus on onboarding our strong backlog. Our onboarding enhancements, targeted incremental investments, as well as constantly improving face-to-face client engagement continue to be a tailwind for us. As part of this effort, like we have mentioned on past calls, we have continued to ramp up hirings in order to support our continued growth. During the quarter, we onboarded clients across multiple verticals, namely insurance, property management, government services, utilities, banking and credit unions, and telecommunications. Now let me turn it over to Sanjay to review our financial results in greater detail.