Core Points - The results of PayPoint Plc's Annual General Meeting (AGM) held on August 6, 2025, were announced, detailing the voting outcomes for various resolutions [2][4]. Voting Results Summary - Resolution 1: The annual report and accounts for the year ended March 31, 2025, received 49,707,068 votes in favor (99.94%) and 29,622 votes against (0.06%), with a total of 49,736,690 votes cast [2]. - Resolution 2: The directors' remuneration report was approved with 47,975,960 votes for (95.81%) and 2,098,763 against (4.19%) [2]. - Resolution 3: A final dividend of 19.6 pence per ordinary share was declared with 50,062,646 votes for (99.96%) and 21,994 against (0.04%) [2]. - Resolutions 4 to 10 involved the re-election of directors, with varying levels of support, notably Rakesh Sharma receiving 49,010,522 votes for (97.88%) and Ben Wishart receiving 47,242,732 votes for (94.35%) [2][3]. - Resolution 11 confirmed the re-appointment of PricewaterhouseCoopers LLP as auditor with 49,963,206 votes for (99.77%) [2]. - Resolution 12 authorized directors to determine the auditor's remuneration with 50,062,486 votes for (99.97%) [2]. - Resolutions 13 to 18 included authorizations for political donations, share allotments, and market purchases, with significant support ranging from 94.09% to 99.97% [2][3]. Independent Directors Voting - Resolutions 7 to 10 required separate counting of votes from independent shareholders due to the controlling shareholder's significant voting rights. Rakesh Sharma received 32,871,415 votes for (96.87%) from independent shareholders [2][3]. Total Voting Rights - The total voting rights of the Company on the day of the AGM were 69,852,648 [4].

Core Insights - PayPoint Plc reported an encouraging start to the financial year, with confidence in achieving a £100 million EBITDA target and long-term growth goals through FY28 [2][5] Group and Divisional Highlights - Group net revenue increased by 7.5% to £42.2 million compared to £39.2 million in Q1 FY25, driven by strong performances in E-commerce, Payments and Banking, and Love2shop divisions [5] - Shopping divisional net revenue rose by 0.6% to £16.5 million, with service fee net revenue increasing by 7.8% to £5.7 million due to growth in PayPoint One/Mini sites [6] - E-commerce divisional net revenue surged by 20.8% to £5.1 million, with parcel transactions growing by 19.4% to 38.2 million [7] - Payments and Banking divisional net revenue increased by 4.9% to £12.8 million [7] - Love2shop divisional net revenue grew by 21.7% to £7.8 million [8] Growth Initiatives - The company signed a new 3-year agreement with InPost/Yodel to enhance parcel delivery services and is preparing for increased parcel volumes through a partnership with Royal Mail [3] - In Open Banking and Digital payments, new contracts were secured with Thirteen Group and the Department for Work and Pensions, contributing to a growing business pipeline [3] - Local Banking initiatives are set to launch consumer deposits with the first High Street Bank in August 2025 [3] Financial Performance - The Group's net corporate debt as of 30 June 2025 was £109.6 million, an increase from £97.4 million as of 31 March 2025 [11] - The Board declared an increased final dividend of 19.6 pence per share, up from 19.2 pence per share in the previous year [12] - An enhanced share buyback program commenced on 1 July 2025, aiming to return at least £30 million per annum to shareholders [13][14] Market Conditions - The company is actively monitoring consumer uncertainty and cautious behavior in various markets, maintaining tight cost discipline while executing growth plans [4]

Core Insights - Paymentus reported strong revenue growth in Q2 2025, generating $280.1 million in GAAP revenue, exceeding analyst expectations by $17.8 million, and reflecting a year-over-year increase of 41.9% [1][2] - The company achieved a non-GAAP diluted EPS of $0.15, surpassing the expected $0.14, and adjusted EBITDA rose to $31.7 million, although profit growth was slower due to a shift towards lower-margin enterprise clients [1][2] Financial Performance - Q2 2025 financial metrics included: - Non-GAAP diluted EPS of $0.15, up 50% from $0.10 in Q2 2024 [2] - GAAP revenue of $280.1 million, a 41.9% increase from $197.4 million in Q2 2024 [2] - Contribution profit of $93.5 million, up 22.2% year-over-year [2] - Adjusted EBITDA of $31.7 million, a 40.9% increase from $22.5 million in Q2 2024 [2] - Free cash flow increased by 155.7% year-over-year to $22.5 million [2] Business Overview - Paymentus provides electronic billing and payment solutions, focusing on flexibility and security through its cloud-native platform [3] - The company emphasizes technological innovation, including AI and machine learning, to enhance platform adaptability and scalability [4] Market Dynamics - Paymentus serves over 2,500 billers and financial institutions, processing 175.8 million transactions, a 25.2% increase from the previous year [5] - Revenue growth is driven by new client onboarding and increased adoption in sectors such as utilities, telecom, and financial services [5] Profitability Trends - Despite revenue growth, profit margins did not keep pace, with contribution profit and gross profit each growing approximately 22% year-over-year [6] - Contribution margin declined to 31.8% from 37.5% in the prior year due to a shift towards large enterprise clients that negotiate volume discounts [6] Technological Edge - The company highlights its proprietary Instant Payment Network™ (IPN) as a central hub for billing, payment, and reconciliation, enhancing its market reach [7] - Paymentus focuses on product innovation, integrating advanced APIs and partnerships to broaden its ecosystem and support future growth [9] Financial Outlook - Management raised guidance for Q3 2025, expecting revenue between $278 million and $282 million, and full-year revenue guidance set at $1,123 million to $1,132 million [10] - Current guidance reflects a 24.2% revenue growth rate, exceeding the company's long-term growth targets of 20% annual revenue growth [10] Strategic Focus - The company aims to manage operating expenses and calibrate future investments based on contribution profit trajectory, while continuing to win large billers [11]

Core Viewpoint - Paymentus reported quarterly earnings of $0.15 per share, exceeding the Zacks Consensus Estimate of $0.14 per share, and showing an increase from $0.12 per share a year ago, representing an earnings surprise of +7.14% [1][2] Financial Performance - The company achieved revenues of $280.08 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 8.58%, compared to $197.42 million in the same quarter last year [2] - Paymentus has consistently exceeded consensus EPS estimates over the last four quarters [2] Stock Performance - Paymentus shares have declined approximately 13.4% since the beginning of the year, while the S&P 500 has gained 6.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.14 on revenues of $267 million, and for the current fiscal year, it is $0.57 on revenues of $1.08 billion [7] - The trend of estimate revisions for Paymentus was mixed prior to the earnings release, which may change following the recent results [6] Industry Context - The Financial Transaction Services industry, to which Paymentus belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, suggesting potential challenges ahead [8]

[Special Note Regarding Forward-Looking Statements](index=3&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section warns that forward-looking statements involve risks and uncertainties, and actual results may differ materially from projections - This report contains forward-looking statements that involve substantial risks and uncertainties, which may cause actual results to differ materially from historical results or future projections. Investors should not place undue reliance on these statements as predictions of future events[6](index=6&type=chunk)[8](index=8&type=chunk)[10](index=10&type=chunk) - Key areas covered by forward-looking statements include the company's ability to manage growth, attract and retain customers, implement new customers, expectations for revenue and operating results, cybersecurity impact, market opportunity, competitiveness, product development, employee retention, general economic conditions (inflation, trade policies), financial services industry stability, benefits of acquisitions, brand maintenance, international expansion, and factors described in 'Risk Factors' and 'Management's Discussion and Analysis'[9](index=9&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements for Paymentus Holdings, Inc., including the Balance Sheets, Statements of Operations and Comprehensive Income, Statements of Stockholders' Equity, and Statements of Cash Flows, along with their accompanying notes. These statements provide a snapshot of the company's financial position, performance, and cash flows for the periods ended June 30, 2025, and December 31, 2024 (for balance sheet), and for the three and six months ended June 30, 2025 and 2024 (for income and cash flow statements) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | (In thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | **Assets** | | | | Cash and cash equivalents | $266,422 | $205,900 | | Total current assets | $380,926 | $345,641 | | Capitalized internal-use software development costs, net | $69,053 | $67,375 | | Intangible assets, net | $14,809 | $19,076 | | Goodwill | $131,836 | $131,815 | | Total assets | $609,523 | $576,247 | | **Liabilities** | | | | Total current liabilities | $83,479 | $81,550 | | Total liabilities | $92,824 | $90,651 | | **Stockholders' Equity** | | | | Total stockholders' equity | $516,699 | $485,596 | | Total liabilities and stockholders' equity | $609,523 | $576,247 | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) | (In thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $280,077 | $197,422 | $555,312 | $382,297 | | Cost of revenue | $208,600 | $138,671 | $417,811 | $270,821 | | Gross profit | $71,477 | $58,751 | $137,501 | $111,476 | | Total operating expenses | $55,555 | $48,515 | $105,890 | $92,897 | | Income from operations | $15,922 | $10,236 | $31,611 | $18,579 | | Net income | $14,707 | $9,364 | $28,520 | $16,590 | | Net income per share - Basic | $0.12 | $0.08 | $0.23 | $0.13 | | Net income per share - Diluted | $0.11 | $0.07 | $0.22 | $0.13 | | Comprehensive income | $14,770 | $9,324 | $28,529 | $16,508 | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) | (In thousands) | Dec 31, 2024 | Mar 31, 2025 | June 30, 2025 | | :------------------------------------ | :----------- | :----------- | :------------ | | Total Stockholders' Equity | $485,596 | $500,395 | $516,699 | | **Changes (Q1 2025):** | | | | | Stock-based compensation | | $2,932 | | | Net income | | $13,813 | | | **Changes (Q2 2025):** | | | | | Stock-based compensation | | | $3,315 | | Net income | | | $14,707 | | (In thousands) | Dec 31, 2023 | Mar 31, 2024 | June 30, 2024 | | :------------------------------------ | :----------- | :----------- | :------------ | | Total Stockholders' Equity | $429,616 | $439,384 | $451,627 | | **Changes (Q1 2024):** | | | | | Stock-based compensation | | $2,484 | | | Net income | | $7,226 | | | **Changes (Q2 2024):** | | | | | Stock-based compensation | | | $2,882 | | Net income | | | $9,364 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $81,920 | $28,984 | | Net cash used in investing activities | $(17,708) | $(18,789) | | Net cash used in financing activities | $(3,673) | $(369) | | Effect of exchange rate changes on Cash and cash equivalents and Restricted cash | $95 | $(141) | | Net increase in cash, cash equivalents and Restricted cash | $60,634 | $9,685 | | Cash and cash equivalents and Restricted cash at the beginning of period | $209,411 | $183,195 | | Cash and cash equivalents and Restricted cash at the end of period | $270,045 | $192,880 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Organization and Description of Business](index=10&type=section&id=1.%20Organization%20and%20Description%20of%20Business) - Paymentus Holdings, Inc. provides electronic bill presentment and payment services, enterprise customer communication, and self-service revenue management through a SaaS, secure, omni-channel technology platform. The platform supports various payment types (credit/debit cards, eChecks, digital wallets) and channels (online, mobile, IVR, call center, chatbot, voice-based assistants)[25](index=25&type=chunk) [2. Basis of Presentation and Summary of Significant Accounting Policies](index=10&type=section&id=2.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) - The unaudited interim condensed consolidated financial statements are prepared in accordance with GAAP and SEC rules for interim reporting, and should be read with the 2024 Form 10-K. Management's estimates are based on historical experience and reasonable assumptions, with actual results potentially differing[26](index=26&type=chunk)[27](index=27&type=chunk)[29](index=29&type=chunk) - The Company changed its reporting segment structure to a single operating and reportable segment effective January 1, 2025, based on the CODM's review of consolidated financial information for resource allocation and performance assessment. Previously, there were three operating segments with one reportable segment[32](index=32&type=chunk)[33](index=33&type=chunk) - Custodial accounts, holding **$128.9 million** as of June 30, 2025, are not included in the Company's balance sheets as Paymentus has no legal ownership or control over these funds[30](index=30&type=chunk) - The Company is evaluating ASU 2024-03, 'Disaggregation of Income Statement Expenses,' effective for fiscal 2027, which requires additional disclosures of expenses by nature[40](index=40&type=chunk) [3. Revenue, Performance Obligations and Contract Balances](index=13&type=section&id=3.%20Revenue%2C%20Performance%20Obligations%20and%20Contract%20Balances) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Payment transaction processing revenue | $278,080 | $193,564 | $551,360 | $376,316 | | Other revenue | $1,997 | $3,858 | $3,952 | $5,981 | | Total revenue | $280,077 | $197,422 | $555,312 | $382,297 | | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue from United States | $275,417 | $193,483 | $546,096 | $374,784 | | Revenue from Other | $4,660 | $3,939 | $9,216 | $7,513 | | Total revenue | $280,077 | $197,422 | $555,312 | $382,297 | - As of June 30, 2025, the Company has **$6.4 million** in remaining performance obligations, with over **75%** expected to be recognized within the next two years. Contractual rights for future minimum guarantees amount to **$54.1 million** through 2029[42](index=42&type=chunk)[43](index=43&type=chunk) | (In thousands) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | Current | $3,771 | $2,937 | | Non-current | $2,666 | $2,783 | | Total contract liabilities | $6,437 | $5,720 | [4. Property and Equipment, Net](index=14&type=section&id=4.%20Property%20and%20Equipment%2C%20Net) | (In thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Computer equipment | $6,467 | $6,178 | | Furniture and fixtures | $1,832 | $1,724 | | Leasehold improvements | $387 | $375 | | Total property and equipment | $8,686 | $8,277 | | Less: Accumulated depreciation | $(7,646) | $(7,120) | | Property and equipment, net | $1,040 | $1,157 | | (In thousands) | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | United States | $361 | $450 | | Other | $679 | $707 | | Total | $1,040 | $1,157 | [5. Goodwill, Internal-use Software Development Costs and Intangible Assets](index=14&type=section&id=5.%20Goodwill%2C%20Internal-use%20Software%20Development%20Costs%20and%20Intangible%20Assets) - Goodwill reporting units were realigned into a single reporting unit, consistent with the change in segment structure. Changes in goodwill carrying amount during the three and six months ended June 30, 2025, were due to foreign currency translation adjustments[47](index=47&type=chunk) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Capitalized internal-use software development costs | $8,900 | $9,100 | $18,300 | $18,400 | | Amortization expense (Cost of revenue) | $5,517 | $4,366 | $11,155 | $8,395 | | Amortization expense (Research and development) | $2,672 | $2,373 | $5,460 | $4,655 | | Total Amortization expense | $8,189 | $6,739 | $16,615 | $13,050 | | (In thousands) | June 30, 2025 Net Carrying Amount | December 31, 2024 Net Carrying Amount | | :-------------------- | :-------------------------------- | :------------------------------------ | | Technology | $1,009 | $3,123 | | Customer relationship | $13,622 | $15,257 | | Software and license | $0 | $8 | | Trademark | $178 | $688 | | Total | $14,809 | $19,076 | | Years Ending December 31, | Future Expected Amortization Expense (in thousands) | | :-------------------------- | :-------------------------------------------------- | | 2025 | $2,822 | | 2026 | $3,269 | | 2027 | $3,269 | | 2028 | $3,269 | | 2029 | $2,180 | | Total | $14,809 | [6. Prepaid expenses and other assets](index=15&type=section&id=6.%20Prepaid%20expenses%20and%20other%20assets) | (In thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Prepaid expenses | $5,362 | $6,584 | | Contract acquisition costs | $5,223 | $6,657 | | Other assets | $1,927 | $2,832 | | Total prepaid expenses and other assets | $12,512 | $16,073 | [7. Accrued and Other Liabilities](index=16&type=section&id=7.%20Accrued%20and%20Other%20Liabilities) | (In thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Payroll and employee-related expenses | $11,030 | $16,650 | | Other accrued expenses | $9,335 | $8,095 | | Other liabilities | $5,395 | $1,717 | | Total accrued and other liabilities | $25,760 | $26,462 | [8. Commitments and Contingencies](index=16&type=section&id=8.%20Commitments%20and%20Contingencies) - The Company is involved in various claims and legal proceedings in the ordinary course of business. As of June 30, 2025, no current claims or legal proceedings are expected to have a material adverse effect on financial position, results of operations, or cash flows, beyond estimated liabilities already recorded[54](index=54&type=chunk) - Paymentus enters into indemnification provisions with business partners, investors, contractors, customers, officers, directors, and employees, seeking to limit its exposure in commercial contracts[55](index=55&type=chunk) [9. Equity](index=16&type=section&id=9.%20Equity) - As of June 30, 2025, all **509,370** warrant shares from the May 2021 agreement with JPMC (exercise price **$18.38**) were vested and exercisable. Additionally, **175,904** warrant shares from the August 2022 agreement (exercise price **$10.10**) were vested and exercisable, with the remaining **513,382** shares subject to commercial milestones through December 31, 2026[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) [10. Stock-Based Compensation](index=18&type=section&id=10.%20Stock-Based%20Compensation) - The 2021 Equity Incentive Plan had approximately **26.4 million** shares available for grant as of June 30, 2025, following an annual increase of approximately **5.0 million** shares on January 1, 2025[60](index=60&type=chunk) | (In thousands, except per share amounts) | Options Outstanding at Dec 31, 2024 | Options Exercised | Options Forfeited | Options Outstanding at June 30, 2025 | | :--------------------------------------- | :---------------------------------- | :---------------- | :---------------- | :--------------------------------- | | Options | 3,534,103 | (61,976) | (7,667) | 3,464,460 | | Weighted-Average Exercise Price per Share | $8.47 | $1.46 | $0.28 | $8.61 | | Weighted-Average Remaining Contractual Life (years) | 4.26 | | | 3.81 | | Aggregate Intrinsic Value | $85,525 | | | $83,620 | - Unrecognized compensation cost for unvested stock options was **$0.1 million** as of June 30, 2025, expected to be recognized over **0.5 years**[62](index=62&type=chunk) | (In thousands, except per share amounts) | RSUs Awarded and Unvested at Dec 31, 2024 | Awards Granted | Awards Vested | Awards Forfeited | RSUs Awarded and Unvested at June 30, 2025 | | :--------------------------------------- | :---------------------------------------- | :------------- | :------------ | :--------------- | :----------------------------------------- | | RSUs | 2,096,168 | 605,306 | (486,019) | (40,967) | 2,174,488 | | Weighted Average Grant Date Fair Value | $16.01 | $29.39 | $16.56 | $17.17 | $19.59 | - Unrecognized compensation cost for unvested RSUs was **$39.9 million** as of June 30, 2025, expected to be recognized over **3.7 years**[65](index=65&type=chunk) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total stock-based compensation | $5,288 | $3,323 | $8,833 | $6,256 | [11. Income Taxes](index=19&type=section&id=11.%20Income%20Taxes) | Effective Tax Rate | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Effective Tax Rate | 19.9% | 24.9% | 21.2% | 28.6% | - The effective tax rate differences from the U.S. federal statutory rate of **21%** are primarily due to permanent differences for disallowed stock-based compensation (IRC Section 162(m)), state taxes, and discrete benefits for excess tax benefits on stock-based compensation and prior year Canadian R&D credit claims[67](index=67&type=chunk) - The Company forecasts an estimated effective tax rate of **27%** for 2025, excluding discrete benefits, mainly due to state taxes and non-deductible compensation[68](index=68&type=chunk) - The recently enacted H.R. 1, 'The One Big Beautiful Bill Act' (OBBBA), includes significant changes to corporate taxation, such as increased deductions for capital spending and expensing of domestic R&D costs. The Company is evaluating its potential impact[69](index=69&type=chunk) [12. Net Income per Share Attributable to Common Stock](index=19&type=section&id=12.%20Net%20Income%20per%20Share%20Attributable%20to%20Common%20Stock) - Basic net income per share is calculated by dividing net income by the weighted-average common shares outstanding. Diluted net income per share includes the dilutive effect of stock options, RSUs, and warrants using the treasury stock method, excluding anti-dilutive shares[70](index=70&type=chunk)[71](index=71&type=chunk) | (In thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $14,707 | $9,364 | $28,520 | $16,590 | | Weighted-average shares of common stock — basic | 125,077,964 | 124,264,789 | 125,066,334 | 124,106,046 | | Dilutive effect of stock options | 2,584,773 | 2,167,559 | 2,551,462 | 2,157,147 | | Dilutive effect of RSUs | 1,016,437 | 709,580 | 1,018,724 | 721,860 | | Dilutive effect of warrants | 351,365 | 110,438 | 331,287 | 89,868 | | Weighted-average shares of common stock — diluted | 129,030,539 | 127,252,366 | 128,967,807 | 127,074,921 | | Net income per share - Basic | $0.12 | $0.08 | $0.23 | $0.13 | | Net income per share - Diluted | $0.11 | $0.07 | $0.22 | $0.13 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Paymentus's financial condition and results of operations for the three and six months ended June 30, 2025, compared to the same periods in 2024. It covers the company's business overview, transaction volumes, key factors affecting operating results (including economic trends and non-GAAP measures), detailed analysis of revenue and expenses, liquidity, and critical accounting policies [Overview](index=21&type=section&id=Overview) - Paymentus is a leading provider of cloud-based bill payment technology and solutions, serving over **2,500** biller businesses and financial institution clients. Its platform was used by approximately **46 million** consumers and businesses globally in December 2024 for bill payments and money movements[74](index=74&type=chunk) - The company's SaaS platform, built on a single code base, offers easy-to-use, flexible, and secure electronic bill payment experiences across omni-channels, enabling rapid deployment of new features and helping billers collect revenue faster and more profitably[75](index=75&type=chunk) [Transactions Processed](index=21&type=section&id=Transactions%20Processed) | (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Growth | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Growth | | :---------------------- | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Transactions processed | 175.8 | 140.4 | 25.2% | 349.0 | 275.7 | 26.6% | - The increase in transactions processed was primarily driven by the addition of new billers and increased transactions from existing billers[76](index=76&type=chunk) [Other Key Factors and Trends Affecting Our Operating Results](index=21&type=section&id=Other%20Key%20Factors%20and%20Trends%20Affecting%20Our%20Operating%20Results) [Impact of Economic and Inflationary Trends](index=21&type=section&id=Impact%20of%20Economic%20and%20Inflationary%20Trends) - Economic uncertainty, driven by trade policies, geopolitical tensions, inflation, and interest rates, is expected to persist through 2025. An economic slowdown could reduce revenue per transaction and overall volume if consumers switch to lower-cost payment methods or defer payments[78](index=78&type=chunk) - Conversely, a higher frequency of partial payments could increase total transaction count, potentially offsetting negative impacts. Elevated inflation could negatively affect results due to the lag in adjusting pricing strategies[78](index=78&type=chunk)[79](index=79&type=chunk) [Non-GAAP Measures](index=22&type=section&id=Non-GAAP%20Measures) - Paymentus uses non-GAAP measures like contribution profit, adjusted gross profit, adjusted EBITDA, and free cash flow to supplement GAAP results, providing management and investors with a clearer understanding of consolidated financial performance and facilitating period-to-period comparisons[80](index=80&type=chunk)[85](index=85&type=chunk) - Interchange and assessment fees are excluded from contribution profit as they are less reflective of operating performance and are largely outside the company's control[85](index=85&type=chunk) [Contribution Profit](index=22&type=section&id=Contribution%20Profit) - Contribution profit is calculated as gross profit plus other cost of revenue (cost of revenue less interchange and assessment fees). It measures the amount available to fund operations after network fees[81](index=81&type=chunk)[85](index=85&type=chunk) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gross profit | $71,477 | $58,751 | $137,501 | $111,476 | | Plus: other cost of revenue | $22,051 | $17,730 | $43,669 | $34,372 | | Contribution profit | $93,528 | $76,481 | $181,170 | $145,848 | - Contribution profit increased by approximately **22.3%** for the three months and **24.2%** for the six months ended June 30, 2025, driven by growth in transaction count and volume from new and existing billers and financial institutions[87](index=87&type=chunk) [Adjusted Gross Profit](index=22&type=section&id=Adjusted%20Gross%20Profit) - Adjusted gross profit is gross profit adjusted for non-cash items, primarily stock-based compensation and amortization of acquisition-related intangible assets and capitalized software development costs[82](index=82&type=chunk) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gross profit | $71,477 | $58,751 | $137,501 | $111,476 | | Stock-based compensation | $83 | $66 | $149 | $117 | | Amortization of capitalized software development costs | $5,517 | $4,366 | $11,155 | $8,395 | | Amortization of acquisition-related intangibles | $829 | $827 | $1,657 | $1,657 | | Adjusted gross profit | $77,906 | $64,010 | $150,462 | $121,645 | - Adjusted gross profit increased by **21.7%** for the three months and **23.7%** for the six months ended June 30, 2025. The percentage decreased modestly due to a shift in customer mix towards large, high-volume enterprise billers with lower margins, partially offset by economies of scale[88](index=88&type=chunk) [Adjusted EBITDA](index=23&type=section&id=Adjusted%20EBITDA) - Adjusted EBITDA is calculated as net income before interest, other income/expense, depreciation, amortization of acquisition-related intangibles and capitalized software, and income taxes, further adjusted for foreign exchange gains/losses, stock-based compensation, and certain nonrecurring expenses[83](index=83&type=chunk) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income — GAAP | $14,707 | $9,364 | $28,520 | $16,590 | | EBITDA | $26,516 | $19,244 | $52,995 | $36,142 | | Adjustments (Foreign exchange gain, Stock-based compensation) | $5,177 | $3,284 | $8,672 | $6,199 | | Adjusted EBITDA | $31,693 | $22,528 | $61,667 | $42,341 | - Adjusted EBITDA increased by **40.7%** for the three months and **45.6%** for the six months ended June 30, 2025, primarily due to higher revenues from transaction volume growth and operating leverage[90](index=90&type=chunk) [Free Cash Flow](index=24&type=section&id=Free%20Cash%20Flow) - Free cash flow is calculated as net cash provided by (used in) operating activities less capital expenditures, other intangible assets acquired, and capitalized internal-use software development costs[84](index=84&type=chunk) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $31,479 | $18,030 | $81,920 | $28,984 | | Purchases of property and equipment | $(116) | $(188) | $(176) | $(304) | | Capitalized internal-use software development costs | $(8,888) | $(9,086) | $(18,166) | $(18,362) | | Free cash flow | $22,475 | $8,756 | $63,578 | $10,318 | - Free cash flow increased significantly for both the three and six months ended June 30, 2025, primarily driven by higher cash generated from operations[91](index=91&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) [Comparison of the Three Months Ended June 30, 2025 and 2024](index=25&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) | (In thousands) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | Revenue | $280,077 | $197,422 | $82,655 | 41.9% | | Cost of revenue | $208,600 | $138,671 | $69,929 | 50.4% | | Gross profit | $71,477 | $58,751 | $12,726 | 21.7% | | Gross margin | 25.5% | 29.8% | | | | Research and development | $15,231 | $12,535 | $2,696 | 21.5% | | Sales and marketing | $29,610 | $26,766 | $2,844 | 10.6% | | General and administrative | $10,714 | $9,214 | $1,500 | 16.3% | | Total operating expenses | $55,555 | $48,515 | $7,040 | 14.5% | | Income from operations | $15,922 | $10,236 | $5,686 | 55.5% | | Interest income, net | $2,336 | $2,194 | $142 | 6.5% | | Other income | $111 | $39 | $72 | n/m | | Income before income taxes | $18,369 | $12,469 | $5,900 | 47.3% | | Provision for income taxes | $(3,662) | $(3,105) | $(557) | 17.9% | | Net income | $14,707 | $9,364 | $5,343 | 57.1% | - Revenue increased by **41.9%** due to higher transaction volumes from new and existing billers. Cost of revenue rose by **50.4%** in line with revenue and transaction volumes, primarily due to variable interchange fees and processor costs[95](index=95&type=chunk)[96](index=96&type=chunk) - Gross margin decreased from **29.8%** to **25.5%** due to a customer mix shift towards new, high-volume enterprise billers with lower margins, partially offset by economies of scale[96](index=96&type=chunk) - Operating expenses increased across R&D (employee costs, cloud services, software amortization), Sales & Marketing (reseller commissions, warrant amortization), and G&A (professional fees, legal fees, insurance premiums)[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) - Net income increased by **57.1%** to **$14.7 million**, and the effective tax rate decreased to **19.9%** from **24.9%**, influenced by permanent differences for disallowed compensation, state taxes, and discrete benefits[92](index=92&type=chunk)[101](index=101&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=26&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) | (In thousands) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | Revenue | $555,312 | $382,297 | $173,015 | 45.3% | | Cost of revenue | $417,811 | $270,821 | $146,990 | 54.3% | | Gross profit | $137,501 | $111,476 | $26,025 | 23.3% | | Gross margin | 24.8% | 29.2% | | | | Research and development | $30,332 | $24,586 | $5,746 | 23.4% | | Sales and marketing | $55,661 | $50,005 | $5,656 | 11.3% | | General and administrative | $19,897 | $18,306 | $1,591 | 8.7% | | Total operating expenses | $105,890 | $92,897 | $12,993 | 14.0% | | Income from operations | $31,611 | $18,579 | $13,032 | 70.1% | | Interest income, net | $4,398 | $4,380 | $18 | 0.4% | | Other income | $161 | $270 | $(109) | (40.4)% | | Income before income taxes | $36,170 | $23,229 | $12,941 | 55.7% | | Provision for income taxes | $(7,650) | $(6,639) | $(1,011) | 15.2% | | Net income | $28,520 | $16,590 | $11,930 | 71.9% | - Revenue increased by **45.3%** due to new biller implementations and increased transactions from existing billers. Cost of revenue increased by **54.3%** due to higher transaction volumes and variable fees[103](index=103&type=chunk)[104](index=104&type=chunk) - Gross margin decreased from **29.2%** to **24.8%** due to a customer mix shift towards lower-margin, high-volume enterprise billers, partially offset by economies of scale[104](index=104&type=chunk) - Operating expenses increased across R&D (employee costs, cloud services, software amortization), Sales & Marketing (reseller commissions, warrant amortization), and G&A (professional and legal fees, offset by lower insurance premiums)[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) - Net income increased by **71.9%** to **$28.5 million**, and the effective tax rate decreased to **21.2%** from **28.6%**, influenced by similar factors as the three-month period[92](index=92&type=chunk)[109](index=109&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) [Sources and Uses of Funds](index=26&type=section&id=Sources%20and%20Uses%20of%20Funds) - As of June 30, 2025, Paymentus had **$266.4 million** in unrestricted cash and cash equivalents, which management believes is sufficient for working capital and capital expenditure requirements for at least the next **12 months**[110](index=110&type=chunk) - Historically, operations have been financed through equity sales and revenue from payment transaction fees and subscriptions. Principal uses of cash are funding operations and capital expenditures[110](index=110&type=chunk) - The company may explore additional financing, but there is no assurance of availability on acceptable terms. Inability to raise capital could adversely affect business objectives, and new financing could dilute existing stockholders or impose restrictive covenants[111](index=111&type=chunk)[112](index=112&type=chunk) [Historical Cash Flows](index=27&type=section&id=Historical%20Cash%20Flows) | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by (used in) Operating activities | $81,920 | $28,984 | | Net cash used in Investing activities | $(17,708) | $(18,789) | | Net cash used in Financing activities | $(3,673) | $(369) | | Effects of foreign exchange on cash | $95 | $(141) | | Net increase in cash, cash equivalents and restricted cash | $60,634 | $9,685 | [Net Cash Provided by Operating Activities](index=27&type=section&id=Net%20Cash%20Provided%20by%20Operating%20Activities) - Net cash provided by operating activities for the six months ended June 30, 2025, was **$81.9 million**, driven by **$28.5 million** net income, **$33.2 million** in non-cash charges, and **$20.2 million** in net cash inflows from changes in operating assets and liabilities[115](index=115&type=chunk) - For the six months ended June 30, 2024, net cash provided by operating activities was **$29.0 million**, from **$16.6 million** net income and **$27.5 million** in non-cash charges, offset by **$15.1 million** net cash outflows from changes in operating assets and liabilities[116](index=116&type=chunk) [Net Cash Used in Investing Activities](index=27&type=section&id=Net%20Cash%20Used%20in%20Investing%20Activities) - Net cash used in investing activities for the six months ended June 30, 2025, was **$17.7 million**, primarily due to **$18.2 million** in capitalized internal-use software development costs and **$0.2 million** in property and equipment purchases, partially offset by **$0.6 million** from interest-bearing deposits[117](index=117&type=chunk) - For the six months ended June 30, 2024, net cash used was **$18.8 million**, mainly from **$18.4 million** in capitalized internal-use software development costs and **$0.3 million** in property and equipment purchases[118](index=118&type=chunk) [Net Cash Used in Financing Activities](index=27&type=section&id=Net%20Cash%20Used%20in%20Financing%20Activities) - Net cash used in financing activities for the six months ended June 30, 2025, was **$3.7 million**, primarily due to **$3.8 million** in tax payments withheld on net settled restricted stock units, partially offset by **$0.1 million** from stock-based award exercises[119](index=119&type=chunk) - For the six months ended June 30, 2024, net cash used was **$0.4 million**, mainly from **$0.5 million** in settlement of holdback liability related to a prior acquisition, partially offset by **$0.1 million** from stock-based award exercises[120](index=120&type=chunk) [Critical Accounting Policies and Estimates](index=27&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - The preparation of financial statements requires management to make estimates and assumptions affecting reported amounts. No material changes to critical accounting policies and estimates have occurred since December 31, 2024, except for those disclosed in Note 2[121](index=121&type=chunk) [Recent Accounting Pronouncements](index=28&type=section&id=Recent%20Accounting%20Pronouncements) - Refer to Note 2, 'Basis of Presentation and Summary of Significant Accounting Policies,' for a full description of recent accounting pronouncements, including adoption dates and effects on condensed consolidated financial statements[122](index=122&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes in Paymentus's exposure to market risk since December 31, 2024. Details on interest rate, foreign currency exchange, and inflation risks are available in the 2024 Form 10-K - No material changes in market risk exposure since December 31, 2024. For details on interest rate, foreign currency exchange, and inflation risks, refer to the 2024 Form 10-K[123](index=123&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of Paymentus's disclosure controls and procedures and internal control over financial reporting. Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025, and there were no material changes in internal control over financial reporting during the quarter [Evaluation of Disclosure Controls and Procedures](index=28&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management, with CEO and CFO participation, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, concluding they were effective at a reasonable assurance level[125](index=125&type=chunk) [Changes in Internal Control over Financial Reporting](index=28&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were no material changes in internal control over financial reporting during the three months ended June 30, 2025[126](index=126&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=28&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) - Management acknowledges that no control system can prevent or detect all errors and fraud, providing only reasonable, not absolute, assurance. Controls may become inadequate over time due to changing conditions or deteriorating compliance[127](index=127&type=chunk) [PART II. OTHER INFORMATION](index=29&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) Paymentus is not currently party to any material legal proceedings and is unaware of any pending or threatened legal actions that could have a material adverse effect on its business, operating results, cash flows, or financial condition, beyond those referred to in Note 8 of the condensed consolidated financial statements - The Company is not currently involved in any material legal proceedings and is unaware of any pending or threatened legal actions that could materially adversely affect its business, operating results, cash flows, or financial condition, except as noted in Note 8[129](index=129&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in Item 1A of the Company's 2024 Form 10-K - No material changes to risk factors previously disclosed in the 2024 Form 10-K[130](index=130&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds during the reporting period - None[131](index=131&type=chunk) [Item 3. Defaults Upon Senior Securities](index=29&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - None[132](index=132&type=chunk) [Item 4. Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Paymentus Holdings, Inc. - Not Applicable[133](index=133&type=chunk) [Item 5. Other Information](index=29&type=section&id=Item%205.%20Other%20Information) During the quarter ended June 30, 2025, none of the Company's directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[134](index=134&type=chunk) [Item 6. Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, equity incentive plan agreements, insider trading policy, and certifications from the principal executive and financial officers - Exhibits include Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, Form of Restricted Stock Unit Agreement, Insider Trading Policy, and Certifications of Principal Executive and Financial Officers (31.1, 31.2, 32.1, 32.2)[135](index=135&type=chunk) [Signatures](index=31&type=section&id=Signatures) This section provides the official signatures certifying the accuracy and completeness of the report - The report was signed on August 4, 2025, by Dushyant Sharma, Chairman, President and Chief Executive Officer, and Sanjay Kalra, Senior Vice President and Chief Financial Officer[140](index=140&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $280.1 million, representing a 41.9% year-over-year increase, driven by an increased number of billers and higher transaction volumes [12][18] - Contribution profit increased to $93.5 million, up 22.3% year-over-year, with an adjusted EBITDA of $31.7 million, reflecting a 40.7% year-over-year increase and a 33.9% adjusted EBITDA margin [12][23] - The company exceeded the "Rule of 40" for the quarter, achieving a score of 56, indicating solid execution and high-quality earnings alongside revenue growth [12][24] Business Line Data and Key Metrics Changes - The number of transactions processed grew to 175.8 million in Q2, a 25.2% year-over-year increase, with the average price per transaction rising from $1.41 to $1.59 due to a favorable biller mix [19][20] - Contribution profit per transaction remained relatively flat at $0.53 compared to $0.54 in the prior year, demonstrating the ability to expand market share without sacrificing profit per transaction [21] Market Data and Key Metrics Changes - Strong bookings were noted in the large enterprise segment across various verticals, including utilities, government agencies, telecommunications, and banking [13][14] - The company reported a significant backlog, providing visibility for the remainder of 2025 and into 2026, with a focus on onboarding clients from multiple verticals [14][27] Company Strategy and Development Direction - The company aims to leverage its unmatched visibility and strong backlog to create long-term shareholder value through innovation and execution [5][6] - The management expressed confidence in becoming a multibillion-dollar revenue company primarily through organic growth, without significant M&A activity [7][8] - The advent of Agentic AI is seen as a major opportunity, with the company positioned to disrupt the market by handling complex workflows and providing actionable insights [8][10] Management's Comments on Operating Environment and Future Outlook - Management highlighted the stability and durability of the growth algorithm, which supports disruptive innovation and long-term value creation [36] - The company remains optimistic about its future, citing a strong balance sheet with $270 million in cash and no debt, allowing for financial flexibility [36][25] Other Important Information - The company raised its full-year 2025 guidance for revenue, contribution profit, and adjusted EBITDA based on strong quarterly performance and positive business trends [18][31] - Non-GAAP net income for Q2 was $19.3 million, or $0.15 per share, compared to $13.4 million, or $0.10 per share in the prior year, marking a 50% increase [23] Q&A Session Summary Question: Historical seasonality and Q3 growth expectations - Management acknowledged a shift in seasonality due to increased market share and large government customers, leading to a more stable growth trajectory [38][39] Question: Quality of earnings and bad debt expense - Management noted that the bad debt expense is small and insignificant compared to overall revenues, attributing it to prudent write-offs of old amounts [42][43] Question: Demand in verticals and enterprise success - Management highlighted the strong performance in utilities and government sectors, emphasizing the platform's capabilities and the increasing comfort of large enterprises with Paymentus [48][52] Question: Sustainability of operating leverage - Management expressed confidence in maintaining high operating leverage while being cautious with spending, ensuring investments align with growth opportunities [54][58] Question: Free cash flow expectations - Management indicated strong cash generation trends, with a focus on maintaining profitability while being prepared for potential working capital needs [66][69] Question: AI and agentic payments future - Management discussed the readiness to capitalize on AI opportunities, emphasizing the platform's capabilities in handling complex workflows and customer interactions [74][75] Question: Hiring plans across Salesforce and implementation - Management stated that hiring plans are focused on converting the pipeline to bookings while maintaining technical strengths, with a majority of focus on sales [78][79] Question: Incremental EBITDA margin sustainability - Management reassured that the company has strong operating leverage and expects incremental EBITDA margins to improve over time, indicating that current levels are not peak [88][89]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $280.1 million, representing a 41.9% year-over-year increase, driven by an increased number of billers and higher transactions [12][17][18] - Contribution profit increased to $93.5 million, up 22.3% year-over-year, with an adjusted EBITDA of $31.7 million, reflecting a 40.7% year-over-year increase and a 33.9% adjusted EBITDA margin [12][22][31] - The company exceeded the rule of 40 for the quarter, achieving a score of 56, indicating solid execution and high-quality earnings alongside revenue growth [12][23] Business Line Data and Key Metrics Changes - The number of transactions processed grew to 175.8 million in Q2, a 25.2% year-over-year increase, with the average price per transaction rising from $1.41 to $1.59 [18][19] - Contribution margin for Q2 was 33.4%, down from 38.7% in the prior year, attributed to the addition of larger enterprise billers [19][20] Market Data and Key Metrics Changes - Strong bookings were noted in the large enterprise segment across various verticals, including utilities, government agencies, telecommunications, and banking [13][14][26] - The company reported a significant backlog growth, providing greater visibility for the remainder of 2025 and into 2026 [17][26] Company Strategy and Development Direction - The company aims to leverage its unmatched visibility and strong backlog to focus on long-term shareholder value through innovation and execution [5][6] - The management expressed confidence in becoming a multibillion-dollar revenue company in the coming years, primarily through organic growth without significant M&A activity [6][30] Management's Comments on Operating Environment and Future Outlook - Management highlighted the positive trends in customer activity and demand, raising full-year guidance for revenue, contribution profit, and adjusted EBITDA [17][30] - The company is optimistic about the impact of Agentic AI on the broader technology landscape, positioning itself to capitalize on this shift [7][60] Other Important Information - The company ended Q2 with total cash and cash equivalents of $270 million and no debt, providing financial flexibility for working capital investments and potential M&A opportunities [24][33] - Free cash flow generated during the quarter was $22.5 million, driven by strong adjusted EBITDA [24][62] Q&A Session Summary Question: Historical seasonality and Q3 growth expectations - Management noted a shift in seasonality due to increased market share and large government customers, indicating that past trends may not apply [35][36] Question: Quality of earnings and bad debt expense - Management stated that the bad debt expense is insignificant and reflects prudent write-offs of old amounts [40][41] Question: Demand in verticals and enterprise success - Management emphasized the strength of their platform and ecosystem, which has led to success across various verticals, including utilities and government agencies [46][49] Question: Sustainability of operating leverage - Management confirmed that they expect to maintain high operating leverage while being cautious with spending, focusing on converting pipeline into bookings [51][54] Question: Free cash flow expectations - Management indicated that cash flow generation is strong, with a model provided for forecasting free cash flow based on adjusted EBITDA and working capital needs [62][66] Question: AI and agentic payments future - Management expressed readiness to capitalize on AI opportunities, viewing it as a potential revenue center and a means to enhance customer experience [70][72] Question: Hiring plans across Salesforce and implementation - Management highlighted a balanced approach to hiring, focusing on sales to convert pipeline into bookings while also strengthening technical capabilities [73][76] Question: Incremental EBITDA margin sustainability - Management reassured that the company has strong operating leverage and expects incremental EBITDA margins to improve over time [85]

Financial Performance Highlights - Paymentus achieved a revenue of $280.1 million in Q2 2025, representing a year-over-year (YoY) growth of 41.9%[10, 14] - Contribution profit reached $93.5 million in Q2 2025, a 22.3% increase compared to Q2 2024[10, 14] - Adjusted EBITDA for Q2 2025 was $31.7 million, showing a 40.7% YoY growth[10, 14] - Net income increased by 44.8% to $19.3 million, with EPS rising by 50% to $0.15[14] Additional Financial Data - Cash and cash equivalents increased to $270.0 million in Q2 2025, an 8.2% increase from Q1 2025[17] - Free cash flow was $22.5 million in Q2 2025, a decrease of 45.3% compared to Q1 2025[17] Q3 and FY 2025 Financial Guidance - The company projects Q3 2025 revenue between $278 million and $282 million, contribution profit between $92 million and $94 million, and adjusted EBITDA between $30 million and $32 million[19] - Revised FY 2025 revenue guidance is $1.123 billion to $1.132 billion, a 4.2% increase from the prior guidance midpoint[19] - Revised FY 2025 contribution profit guidance is $369 million to $373 million, a 1.4% increase from the prior guidance midpoint[19] - Revised FY 2025 adjusted EBITDA guidance is $123 million to $127 million, a 4.2% increase from the prior guidance midpoint[19]

Paymentus Reports Second Quarter 2025 Financial Results Record revenue of $280.1 million, up 41.9% year-over-year Adjusted EBITDA rose 40.7%, representing a 33.9% adjusted EBITDA margin CHARLOTTE, North Carolina, August 4, 2025 -- Paymentus Holdings, Inc. ("Paymentus") (NYSE: PAY), a leading provider of cloud-based bill payment technology and solutions, today announced its unaudited financial results for the quarter ended June 30, 2025. "Paymentus once again delivered strong quarterly results that exceeded ...

Company Overview - Paymentus (PAY) shares increased by 5.8% to $30.05, following a significant trading volume, contrasting with a 13.1% loss over the past four weeks [1] - The stock received a rating upgrade from Market Perform to Outperform by Raymond James, with a price target set at $37.00 [2] - Paymentus has a competitive edge due to its scalable, cloud-native platform that supports omnichannel, real-time bill payments [2] Technology and Integration - The company’s integration with billing and ERP systems, along with its proprietary Instant Payment Network (IPN), connects thousands of billers and partners, including PayPal and Walmart, enhancing its market reach [3] - AI-powered features facilitate smart engagement, while flexible APIs and secure infrastructure contribute to efficiency and reliability, positioning Paymentus as a leader in modern bill payment solutions [3] Financial Performance Expectations - Paymentus is projected to report quarterly earnings of $0.14 per share, reflecting a year-over-year increase of 16.7%, with revenues expected to reach $257.95 million, up 30.7% from the previous year [4] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [5] Industry Context - Paymentus operates within the Zacks Financial Transaction Services industry, which includes other companies like MasterCard (MA) [6] - MasterCard's consensus EPS estimate for its upcoming report has increased by 0.2% to $4.05, representing a 12.8% change from the previous year [7]