Paymentus (NYSE:PAY) Conference Transcript

Summary of Paymentus Conference Call (December 09, 2025) Company Overview - Company: Paymentus (NYSE: PAY) - Industry: FinTech and Payments Key Points and Arguments Growth Metrics - Paymentus is experiencing over 35% gross revenue growth and 40% EBITDA growth based on current guidance [3][3] - The company has grown from $5 million in revenue in 2010 to nearly $1.2 billion since going public, indicating significant organic growth [18][19] Platform and Strategy - The platform is designed to be horizontally scalable, allowing it to serve various verticals and customer sizes effectively [3][4] - The Instant Payment Network enhances the distribution of payments and engagement channels, contributing to operational leverage [4][4] Market Expansion - Paymentus has successfully diversified beyond utilities into sectors like government, insurance, and property management [8][8] - The company initially targeted utilities due to their complexity, which provided a strong foundation for scaling into other verticals [10][11] B2B Market Opportunity - The B2B segment represents a larger Total Addressable Market (TAM) compared to B2C, prompting Paymentus to expand its offerings in this area [12][13] - A significant B2B client has exceeded expectations, indicating strong potential for growth in this vertical [15][16] Market Share and Future Potential - Paymentus currently holds about 4% market share in the traditional bill pay market, with significant room for growth as it captures more electronic payments [17][19] - The company believes it can double its size by converting existing customer payments to electronic formats [19][19] Revenue Growth Strategy - Long-term growth is projected at 20% CAGR, driven by new implementations and existing customer growth [21][22] - The company emphasizes profitability alongside revenue growth, achieving 60%+ incremental EBITDA margins in recent quarters [24][24] Implementation Efficiency - Paymentus has improved implementation times for larger clients, leveraging internal tools and frameworks developed during the COVID-19 pandemic [41][44] Free Cash Flow Generation - The company generated over $100 million in free cash flow in the last 12 months, with a conversion rate of about 140% [45][46] - The business model is not capital-intensive, allowing for strong cash flow generation [46][46] Capital Allocation Strategy - Paymentus maintains a strong balance sheet and is focused on organic growth opportunities, with M&A being considered if suitable targets arise [48][50] - Share buybacks are not currently prioritized [50][50] Key Messages for Investors - Paymentus is positioned as a long-term investment with a strong growth algorithm and profitability focus [51][51] - The company aims to expand its market share while enhancing profitability and operational efficiency [51][51] Additional Important Insights - The company has successfully navigated challenges posed by the pandemic, adapting its strategies to maintain growth and efficiency [43][43] - Paymentus is committed to building a robust business model that balances growth with sustainable profitability [37][38]