Paymentus (US:PAY)2024-03-05 00:49Financial Data and Key Metrics Changes - In Q4 2023, revenue was $164.8 million, up 24.7% year-over-year, and for the full year, revenue increased 23.6% to $614.5 million, exceeding the long-term target of 20% growth [46][52] - Adjusted EBITDA for Q4 was $19.9 million, up 95.4% year-over-year, and for the full year, it increased 103.1% to $58.1 million, significantly surpassing the long-term target of 20% to 30% [46][52] - Contribution profit for Q4 was $66.3 million, up 22.7% year-over-year, and for the full year, it grew 19.7% to $240.9 million [46][52] Business Line Data and Key Metrics Changes - The number of transactions processed in Q4 grew to 124.8 million, up 28.4% year-over-year, indicating strong business momentum [59] - Contribution profit per transaction for Q4 was $0.53, slightly down from $0.56 in the prior year, primarily due to biller mix [60] Market Data and Key Metrics Changes - The company signed several notable clients in Q4, including large insurance companies, utilities, and government agencies, demonstrating a diverse client base [53][54] - The company ended Q4 with a strong backlog and cash position of $183.2 million, up from $166.9 million at the end of Q3 2023 [64] Company Strategy and Development Direction - The company aims to continue diversifying into new verticals while maintaining its existing go-to-market strategy, focusing on onboarding its strong backlog to drive future growth [161] - The company plans to invest in sales and marketing to enhance its pipeline for future growth, indicating a focus on organic growth [129] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage operating expenses and maintain profitability despite external factors affecting contribution profit [31][68] - The company expects revenue for 2024 to be in the range of $720 million to $744 million, reflecting growth of 19.1% to 21.1% [66] Other Important Information - The company has no debt and generated free cash flow of $16 million during the quarter [94] - The company exceeded the Rule of 40 for the fourth quarter, coming in at approximately 53, indicating strong performance [62] Q&A Session Summary Question: What contributed to the revenue growth from new clients? - Management indicated that both new client growth and existing client growth contributed to overall growth, but specific ratios were not disclosed [71] Question: What is the normalized tax rate for earnings? - Management suggested using a tax rate closer to the statutory rate in the U.S., approximately 25% for long-term earnings planning [106] Question: How does the company view competition and pricing? - Management noted that they worked closely with clients during inflationary periods to maintain strong partnerships and pricing strategies [141]