Q1 2024 Paymentus Holdings Inc Earnings Call

May 6, 2024

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Operator: Good day and welcome to the first quarter 2024 Paymentus 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, Director of Investor Relations. Please go ahead.

Speaker Change: Good day and welcome to the first quarter 2024, and Memphis Earnings Conference call. This call is being recorded all participants are currently in a listen only mode. There will be an opportunity for questions and answers following the management.

Speaker Change: Prepared remarks at this time I would now like to turn the call over to David Hanover Investor Relations. Please go ahead.

David Hanover: Thank you. Good afternoon, and welcome to Paymentus' first quarter 2024 earnings call. Joining me on the call today is Dushyant Sharma, our founder and CEO, and Sanjay Kalra, our CFO. Following our prepared remarks, we'll take questions. A 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.

David Hanover: Thank you good afternoon, and welcome to pay back with first quarter of 2024 earnings call.

David Hanover: Joining me on the call today is Steve Schott Sharma, our founder and CEO and Sanjay Kalra our CFO.

Speaker Change: Following our prepared remarks, we will take questions.

David Hanover: Our press release was issued after the close of market today and is posted on our website, where this call is being simultaneously webcast.

David Hanover: A webcast replay of this call in the supplemental slides accompanying this presentation will be available on the company's website under the Investor Relations link at IR Dot pain, Memphis Dot com.

David Hanover: 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 expectations or intent regarding our financial results and guidance, the impact of, and our ability to address continued economic and geopolitical uncertainty, our market opportunities, business strategies, implementation timing, product enhancements, impact from acquisitions, and other These forward-looking statements speak as of today, and we undertake no obligation to update them.

David Hanover: Statements made on this webcast will include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.

David Hanover: Forward looking statements use words, such as will believe expect anticipate and similar phrases that denote future expectation on cat regarding our financial results and guidance the impact of and our ability to address continued economic and geopolitical uncertainty our market opportunities business strategy implementation timing product enhancements.

David Hanover: Cost of acquisition and other matters.

David Hanover: These forward looking statements speak as of today, and we undertake no obligation to update them.

David Hanover: These statements are subject to risks, 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 10-K for the year ended December 31, 2023, and our subsequent quarterly reports on Form 10-Q, including our Form 10-Q for the quarter ended March 31, 2024, which we expect to file with the SEC We encourage you to review these detailed, proliferative statements, safe harbor, and risk factor disclosures.

David Hanover: The statements are subject to risks 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.

David Hanover: Special note regarding forward looking statements and risk factors in our annual report on Form 10-K for the year ended December 31, 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.

David Hanover: We encourage you to review these detailed forward looking statement safe Harbor and risk factor disclosures.

David Hanover: 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 We encourage you to review additional disclosures regarding these non-GAAP measures, including reconciliations of the most directly comparable GAAP 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 Dushyant Sharma, our founder and CEO. Dushyant?

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.

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.

David Hanover: Carriage you to review additional disclosures regarding these non-GAAP measures, including reconciliations of the most directly directly comparable GAAP 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.

David Hanover: With that I'd like to turn the call over to Duchamp's Sharma, our founder and CEO shot.

David Hanover: Okay.

Dushyant Sharma: Thank you David.

Dushyant Sharma: 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 growth 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 process. In the first quarter of 2024, Paymentus again delivered results that exceeded our expectations.

Dushyant Sharma: We are off to a strong start in pelican before with a great first quarter.

Dushyant Sharma: 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.

Dushyant Sharma: We continue to have substantial momentum in country before that gives us added excitement about the remainder of the year and in the long term prospects.

Dushyant Sharma: 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 strong bookings and a strong implementation backlog that we believe positions us quite well for a strong 2024. In the first quarter of 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 EBIT.

Dushyant Sharma: In the first quarter of political before they Memphis again delivered results that exceeded our expectations.

First quarter revenue was Henry it before $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.

Dushyant Sharma: 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.

Dushyant Sharma: In addition to these outstanding results.

Dushyant Sharma: Also exited the first quarter with a strong bookings and a strong implementation backlog that we believe position us quite well for a strong 2024.

In the first quarter clinical before we added $15 $9 million in contribution.

Dushyant Sharma: Contribution profit over the same period last year.

Dushyant Sharma: At the same time, we dropped 11 $4 million or 72% of that growth to adjusted EBITDA.

Dushyant Sharma: 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.

Dushyant Sharma: We are pleased that over the past few quarters. We have continued to drop a significant majority of incremental contribution profit dollars toward bottom line.

Dushyant Sharma: We believe this demonstrates a key strength of our operating strategy.

Dushyant Sharma: As well as our ability to consistently expand our operating leverage without sacrificing growth or innovation.

Dushyant Sharma: Execution of our disciplined strategy has once again allowed us to surpass the rule of 40.

Dushyant Sharma: Doing so by a wide margin this quarter at 58.

Dushyant Sharma: As we have shared previously at Paymentus, 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.

Dushyant Sharma: As we have shared previously our payment us our goal remains to continue delivering high quality earnings alongside solid topline 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.

Dushyant Sharma: As I mentioned earlier, we finished Q1 'twenty 'twenty four with a strong backlog and are very pleased with our year over year growth.

Dushyant Sharma: 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 squatter for payment, 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 a variety of verticals, including utilities, General Services, Transportation and Logistics, Government, and Financial Services.

Dushyant Sharma: Turning specifically to client activity. This was a great bookings quarter for payment to us.

Dushyant Sharma: Both in terms of aggregate annual contract value and the number of clients signed.

Dushyant Sharma: During the first quarter, we signed several notable and large new clients in a variety of verticals, including utilities General services transportation and logistics government and financial services.

Dushyant Sharma: As you can see from these bookings, our omni-channel 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.

Dushyant Sharma: As you can see from these bookings our Omnichannel platform allows us to continue to broaden our customer diversity and gained traction across new industries.

Dushyant Sharma: Another area, we continue to focus on.

Is the implementation and Onboarding of our strong backlog to drive even further growth.

Dushyant Sharma: This effort is progressing well and in order to support this we continue to make incremental targeted investments in this area in both the staffing and technology.

Dushyant Sharma: 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.

Dushyant Sharma: 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.

Dushyant Sharma: We are realizing the benefits of our focused strategy and these targeted investments as evidenced by our success in implementing and Onboarding new clients during the first quarter.

Dushyant Sharma: Including the launch of several large clients across various verticals, including multiple utilities insurance and government agencies and financial institutions.

Dushyant Sharma: We expect to make further progress in this area throughout 2024, consistent with our growth plans and internal targets, and 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.

We expect to make further progress in this area 12 under 24, consistent with our growth plans and internal targets.

Dushyant Sharma: In addition to the financial execution of our core business.

Dushyant Sharma: Continually think about ways to increase long term shareholder value.

Dushyant Sharma: What we call the strategic execution.

Dushyant Sharma: One such example is our recently awarded patent on artificial intelligence.

Dushyant Sharma: As you know integration is one of our key strengths and we have done thousands across a number of industries.

Dushyant Sharma: Resulting in deep experience and integration. 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 efficiency 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.

Dushyant Sharma: The resulting and deep experience in integration assets.

Dushyant Sharma: Well before AI, while the mainstream buzzword, we conceived and filed a patent for an AI based integration framework.

Dushyant Sharma: 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.

Dushyant Sharma: By integrating more of their processes with us.

Dushyant Sharma: And the reason we're talking about this is threefold first.

Dushyant Sharma: 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 to the onboarding experience and speed in the coming years. And third, we believe the prudent deployment of AI can play a central part in our strategy, both internally by enhancing internal operating efficiencies and externally by enabling our clients to improve their customer experience and efficiency.

Dushyant Sharma: We believe this demonstration of our forward thinking culture looking ahead with our strategic focus on both defensive and offensive marketing strategies.

Dushyant Sharma: 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.

Dushyant Sharma: We believe that this type of strategic execution is possible, primarily because Paymentus has the rare trade-off that usually exists in large tech companies. Our business has unique in-ear 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 believe that this type of a strategic execution as possible, primarily because <unk> has the reiterate.

That usually exist in large tech companies.

Dushyant Sharma: Our business has unique India to visibility to deliver consistent shareholder returns, but also allows us to execute strategically too.

Dushyant Sharma: To create additional long term shareholder value.

Dushyant Sharma: 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 all innovation.

Dushyant Sharma: 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, I turn it over to Sanjay to review our financial results in greater detail. Thanks, Dushyant.

Dushyant Sharma: 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.

Dushyant Sharma: We intend to remain focused and disciplined in onboarding, our strong backlog, which we expect to continue to fuel our future growth.

Dushyant Sharma: Now, let me turn it over to Sanjay to review our financial results in greater detail.

Sanjay Kalra: Thanks Michelle.

Sanjay Kalra: And thank you all for joining us today. Before I discuss our first quarter results and our second quarter and full year 2024 outlook. I'd like to remind everyone that the financial results I'll be referring to include non-GAAP financial measures. As David mentioned earlier, our Q1 press release and earnings presentation includes reconciliations of the non-GAAP financial measures discussed on this call to their corresponding GAAP measures. Both of these are available on our website.

Sanjay Kalra: And thank you all for joining us today.

Sanjay Kalra: Before I discuss our first quarter results and our second quarter and full year 2020 for outlook.

Sanjay Kalra: I'd like to remind everyone that the financial results I'll be referring to include non-GAAP financial measures.

Sanjay Kalra: As David mentioned earlier, our Q1 press release and earnings presentation includes reconciliations of the non-GAAP financial measures discussed on this call to vehicles funding GAAP measures.

Sanjay Kalra: Both of these are available on our website.

Sanjay Kalra: Turning to slide five, for the first quarter of 2024, we started off the year with another quarter of very strong financial results, driven by higher transaction activity from both new and existing billers. We believe these results continue to demonstrate the resiliency, stability, and strength of our business. Our first quarter results included revenue of $184.9 million. Contribution profit of $69.4 million and adjusted EBITDA of $19.8 million. Our results came in higher than we originally expected, and I will discuss the drivers of our outperformance and strong business momentum in more detail shortly. This enabled us to once again exit the quarter with a strong backlog and cash position.

Sanjay Kalra: Turning to slide five for.

Sanjay Kalra: For the first quarter of 2024.

Sanjay Kalra: We started off the year with another quarter of very strong financial results.

Sanjay Kalra: Driven by higher transaction activity from both new and existing builders.

Sanjay Kalra: We believe these results continue to demonstrate the resiliency stability and strength of our business.

Sanjay Kalra: Our first quarter results included revenue of $184 9 million.

Sanjay Kalra: Contribution profit of $69 4 million.

Sanjay Kalra: And adjusted EBITDA of $19 8 million.

Speaker Change: Our results came in higher than we originally expected and I'll discuss the drivers of our outperformance and strong business momentum in more detail shortly.

Speaker Change: This enabled us to once again as in the quarter with a strong backlog and cash position.

Sanjay Kalra: Now let's review our first quarter financials in more detail. As I mentioned earlier, first quarter 2024 revenue was $184.9 million, up 24.6% year-over-year. This growth was largely driven by increased transactions from existing billers.

Speaker Change: Now, let's review, our first quarter financials in more detail.

Speaker Change: As I mentioned earlier first quarter 2094 revenue was $184 9 million up 34, 6% year over year.

Speaker Change: This growth was largely driven by increased transactions from existing builders the launch of new builders.

Sanjay Kalra: The launch of New Billers and Increased Activity from our Instant Payment Network or IPM Bill. The number of transactions we processed grew to 135.3 million in the first quarter, up 24.7% year over year, largely in line with our revenue growth. However, our average revenue per transaction remains flat at $1.37 year-over-year despite the addition of many large bidders throughout the past year.

Speaker Change: And increased activity from our instant payment network, our IBM business.

Speaker Change: Number of transactions, we processed grew to $135 3 million in the first quarter up 24, 7% year over year.

Speaker Change: Largely in line with our revenue growth.

Speaker Change: Our average revenue per transaction remained flat at $1 37 year over year. Despite the addition of many large meters throughout the past year.

Sanjay Kalra: First quarter 2024 contribution profit increased to 69.4 million, up 29.6% year over year. This year-over-year increase in contribution profit reflects higher transactions from existing billers and the launch of new bids. Contribution profit in the first quarter of 2024 surpassed our expectations. In fact, it was our highest quarter in terms of year-over-year growth across the past six quarters. This outperformance during the quarter was primarily driven by higher transaction growth than we had initially expected and reflects growth from three key factors.

Speaker Change: First quarter 2094 Wall Division profit increased to $69 4 million up 29, 6% year over year.

Speaker Change: This year over year increase in contribution profit reflects higher transactions from existing dealers and the launch of new builders.

Speaker Change: Contribution profit in the first quarter of 2024.

Speaker Change: Surpassed our expectations in fact, it was our highest quarter in terms of year over year growth across the past six quarters.

Speaker Change: This outperformance during the quarter was primarily driven by higher transaction growth than we had initially expected and reflects growth from three key factors.

Sanjay Kalra: First, we saw growth from existing billers who are seasonally strong in the first quarter, primarily due to adoption success. Second, we saw increased transactions from new billers that were launched in the quarter with incremental transactions driven by seasonality. And third, we saw the benefit of improved pricing from some billers as a result of our ongoing pricing review.

Speaker Change: First we saw growth from existing dealers, who are seasonally strong in the first quarter, primarily due to adoption success.

Speaker Change: Second we saw increased transactions from new builders that were launched in the quarter with incremental transactions driven by seasonality.

Speaker Change: And third we realize the benefit of improved pricing from some builders as a result of our ongoing pricing review.

Sanjay Kalra: Contribution profit per transaction for the quarter was $0.51, which was an improvement from $0.49 in the prior year period, primarily due to repricing efforts and BIRMX, reflecting that the new implementations during Q124 had improved contribution margins versus the prior year period. As you have stated in the past, we view contribution profit as a secondary performance metric. Because it is subject to variables outside of control, such as an increase in the average payment amount, changes in the payment mix, biller mix, CPI, and card network fees, etc., that can significantly influence and diminish the utility of contribution profit on a quarterly and per transaction basis.

Speaker Change: Contribution profit per transaction for the quarter was 51. So this was an improvement from 49 in the prior year period, primarily due to repricing efforts and better mix, reflecting that the new implementations. During Q1 'twenty four has improved contribution margins versus the prior year period.

Speaker Change: As you stated in the past, we view contribution profit as a secondary performance metric.

Speaker Change: Because it is subject to variables outside of our control such as an increase in the average payment amount J&J and the payment mix biller mix CPI and garden advert fees et cetera that can significantly influence.

Speaker Change: And diminish the utility of contribution profit on a quarterly and per transaction basis.

Sanjay Kalra: First quarter 2024 adjusted gross profit was $57.6 million, up 31.9% year over year. Slightly ahead of contribution profit growth as we have started benefiting from economies of scale. First quarter 2024 non-GAAP operating expenses increased as expected to $40.3 million, up 7.2% year-over-year. This increase was primarily due to increased sales and marketing expenses and research and development expenses, net of savings realized in general and administrative costs. We expect further increases in sales and marketing expenses throughout the year.

First quarter Cologuard for adjusted gross profit was $57 6 million.

Speaker Change: Up 31, 9% year over year slightly ahead of contribution profit growth as we have started benefiting from economies of scale.

Speaker Change: First quarter candidly for non-GAAP operating expenses in.

Speaker Change: <unk> as expected to $40 3 million up seven 2% year over year.

Speaker Change: This increase was primarily due to increased sales and marketing expenses and research and development expenses net of savings realized in general and administrative costs.

Speaker Change: We expect further increases in sales and marketing expenses throughout the year.

Sanjay Kalra: As we continue to focus resources on the execution of our go-to-market strategy and increase investments to support conversion of our strong pipeline into booking and onboarding our strong backbone. These expectations are already incorporated in our guidance, which I'll review in more detail shortly. First quarter 2024 non-GAAP net income was $12.2 million or $0.10 per share compared to non-GAAP net income of $5.1 million or $0.04 per share in the prior year period.

Speaker Change: We continue to focus resources on the execution of our go to market strategy.

Speaker Change: And increased investments to support conversion of our strong pipeline into bookings and on boarding of a strong backlog.

Speaker Change: These expectations are already incorporated in our guidance, which I'll review in more detail shortly.

Speaker Change: First quarter delivered four non-GAAP net income was $12 2 million or <unk> <unk> per share compared to non-GAAP net income of $5 1 million or <unk> <unk> per share in the prior year period.

Sanjay Kalra: First quarter 2024 adjusted EBDA was $19.8 million, up 135.5% compared to $8.4 million in the prior year. First quarter 2024 adjusted EBITDA represented 28.6% of contribution profit, compared to 15.7% of contribution profit in the prior year.

Speaker Change: First quarter 2094, adjusted EBITDA was $19 8 million up 135, 5% compared to $8 4 million in the prior year.

Speaker Change: First quarter 94, adjusted EBITDA represented 28, 6% of contribution profit compared to 15, 7% of contribution profit in the prior year.

Sanjay Kalra: This very strong quarterly performance compared to the guidance we previously provided was primarily driven by strong growth in contribution profit and economies of scale. Approximately 72% of our year-over-year growth and contribution profit fell to the bottom line adjusted EBITDA, demonstrating the inherent operating leverage in our business. Related to this, once again, we also exceeded the rule of 40 for the quarter, coming in at approximately 58. This is a measure we take very seriously, and our team here monitors it very closely. This is our fourth consecutive quarter exceeding the rule of 40.

Speaker Change: This very strong quarterly performance compared to the guidance. We previously provided was primarily driven by strong growth and contribution profit and economies of scale.

Speaker Change: Approximately 72% of our year over year growth and contribution profit fell to the bottom line adjusted EBITDA, demonstrating the inherent operating leverage in our business.

Speaker Change: Related to this once again, we also exceeded the rule of 40 for the quarter coming in at approximately 58.

Speaker Change: This is a measure we take very seriously and our team here monitor it very closely this is our fourth consecutive quarter exceeding the rule of 40.

Sanjay Kalra: Now I'll discuss our balance sheet and liquidity position on slide 6. We ended the first quarter with cash and cash equivalents of $184.2 million, compared to $183.2 million at the end of last year. The $1 million increase was primarily comprised of $11 million of cash generated from operations, offset by $9.5 million used in investing activities, primarily internal use capitalized software used to drive growth and innovation, and half a million dollars for financing activities, primarily for settlement of holdback liability for prior acquisitions.

Speaker Change: Now I'll discuss our balance sheet and liquidity position on slide six.

Sanjay Kalra: Note that the cash generated from operations of $11 million is net of $8.6 million invested in working capital, which is a normal seasonal trend, as the majority of prior year-end accruals are paid out during the first quarter. The company does not currently have any debt.

We ended the first quarter of gas and gas equal lengths of $184 2 million compared to $183 2 million at the end of last year.

Speaker Change: The $1 million increase was primarily comprised of $11 million of cash generated from operations offset by $9 5 million used in investing activities, primarily internal use capitalized software used to drive growth and innovation.

Speaker Change: And half a million dollars for financing activities, primarily for settlement of holdback liability for prior acquisitions.

Speaker Change: Note that the cash generated from operations of $11 million is net of $8 6 million invested in working capital, which is a normal seasonal trend.

Speaker Change: As majority of prior year end accruals are paid out during the first quarter.

The company does not currently have any debt.

Sanjay Kalra: Our free cash flow generated during the quarter was $1.6 million. Our day sales outstanding at the end of the first quarter was 41 days compared to 43 days at Q4 2023, within our expected range. Working capital at the end of the first quarter was approximately $217 million, an increase of approximately 5% from the end of Q4 2020. We had 126.9 million diluted shares outstanding for the three months ended March 31, 2024, compared to 126.5 million diluted shares outstanding for the three months ended December 31, 2020.

Speaker Change: Our free cash flow generated during the quarter was $1 6 million.

Speaker Change: Our days sales outstanding at the end of first quarter was 41 days compared to 43 days at Q4 2023.

Speaker Change: Within our expected range.

Speaker Change: Working capital at the end of first quarter was approximately $217 million an increase of approximately 5% from the end of Q4 2023.

Speaker Change: We had $126 9 million diluted shares outstanding for the three months ended March 31 2024.

Compared to $126 5 million diluted shares outstanding for the three months ended December 31 2023.

Sanjay Kalra: The increase was largely due to an improved average stock price during the quarter and, to some extent, due to the vesting of employee-restricted stock units and the exercise of stock options. Now I'll turn to our revised full year 2024 and Q2 2024 guidance for revenue, contribution profit, and adjusted EBITDA on slide 7. Before discussing full-year guidance, I want to mention that we are continuing to follow the same prudent approach to guidance that we followed during 2023, as there is still a degree of uncertainty around the larger macroeconomic and geopolitical environment.

Speaker Change: The increase was largely due to improved average stock price during the quarter and to some extent due to vesting of employee restricted stock units.

Speaker Change: The exercise of stock options.

Sanjay Kalra: For the full year 2024, we now expect revenue in the range of $737 to $755 million. Ah, 1.9% from the midpoint of previous guidance. Contribution profit in the range of 281 to 293 million, up 2.1% from the midpoint of our previous guidance. And finally, at JustTDBDA, in the range of 71 to 79 million, up 7.1% from the midpoint of our previous guidance. As reflected on the right side of the slide for Q2-24, we now expect revenues in the range of $178 to $183 million, contribution profit in the range of 68 to 70 million, and adjusted EBITDA in the range of 17 to 19 million.

Speaker Change: Now I'll turn to our revised full year 2024, and Q2 2024 guidance for revenue contribution profit and adjusted EBITDA on slide seven.

Speaker Change: Before discussing full year guidance I want to mention that we are continuing to follow the same prudent approach to guidance.

Speaker Change: We followed during 2023.

As there is still a degree of uncertainty around the larger macroeconomic and geopolitical environments.

For the full year literally four we now expect revenue in the range of $737 million to $755 million up.

Speaker Change: One 9% from the midpoint of previous guidance.

Speaker Change: Contribution profit in the range of $281 million to $293 million up two 1% from midpoint of our previous guidance.

Speaker Change: And finally, adjusted EBITDA in the range of $71 million to $79 million up seven 1% from midpoint to hold our previous guidance.

Speaker Change: As reflected on the right side of the slide four Q2 'twenty four we now expect revenues in the range of $178 million to $183 million.

Speaker Change: Contribution profit in the range of $68 million to $70 million and adjusted EBITDA in the range of $17 million to $19 million.

Sanjay Kalra: During our past few earnings calls, we have provided long-term growth targets for both revenue and adjusted EBITDA on two primary financial metrics. We stated that our goal was to grow revenue at approximately 20% annually and to grow adjusted EBITDA between 20 to 30% annually. The guidance we have provided today for the full year 2024 reflects the expected achievement of these long-term targets, as regards contribution, profit, and operating expenses, which we consider secondary financial metrics.

Speaker Change: During our past few earnings calls we have provided long term growth targets for both revenue and adjusted EBITDA, Our two primary financial metrics. These.

Speaker Change: <unk> stated that our goal was to grow revenue at approximately 20% annually and to grow adjusted EBITDA dollars between 20% to 30% annually.

The guidance, we have provided today for the full year delivered four reflect the expected achievement of these long term targets.

Speaker Change: Regarding contribution profit and operating expenses, which we consider secondary financial metrics.

Sanjay Kalra: We plan to actively manage our operating expenses, dialing them up or down, as necessary, depending upon how contribution profit is trending throughout the year, to enable us to remain a rule of 40 company on an annual basis. We managed this quite well in 2023 and in the first quarter of 2024. And we believe we are well suited to manage this again in the current year, given our strong operating leverage. In summary, we reported exceptional first quarter 2024 results. Throughout the past four quarters, we have consistently demonstrated our ability to generate strong revenue, contribution profit, adjusted EBITDA, cash, and bookings growth. This enabled us to end the first quarter with a substantial backlog.

Speaker Change: We plan to actively manage our operating expenses dialing them up or down as necessary.

Speaker Change: Depending upon how contribution profit is trending throughout the year to enable us to remain a rule of 40 company on an annual basis.

Speaker Change: We managed this quite well in 2023 and in the first quarter of college ready for and we believe we are well suited to manage this again in the current year, given our strong operating leverage.

Speaker Change: In summary, we reported exceptional first quarter <unk> results.

Speaker Change: Throughout the past four quarters, we have consistently demonstrated our ability to generate strong revenue contribution profit adjusted EBITDA cash and bookings growth.

Speaker Change: This enabled us to end the first quarter with a substantial backlog built.

Sanjay Kalra: Based on the solid footing and strong visibility, we continue to believe we are well positioned for 2024. Thank you, everyone, for your attention today, and now I'll turn it back to Dushyant for final remarks before we open up the call for questions. Thanks, Sanjay.

Speaker Change: Based on a solid footing and strong visibility we continue to believe we are available <unk> for 2024.

Thank you everyone for your attention today and now I'll turn it back to <unk> for final remarks, before we open up the call for questions.

Thanks Sanjay.

Dushyant Sharma: In closing, we enter 2024 with solid momentum from last year. And once again, I'm extremely proud that our team has come together and achieved first quarter results that were significantly ahead of our original expectations. I believe this performance illustrates the strength of our operating model, our innovative technological platform, and the resilience of our business despite the difficult macro and geopolitical environment. Sanjay just covered our guidance for the full year and the second quarter of 2024.

Speaker Change: In closing we entered consequently for with a solid momentum from last year.

Speaker Change: And once again I'm extremely proud of our team has come together and achieved first quarter results that were significantly ahead of our original expectations.

I believe this performance illustrates the strength of our operating model.

Speaker Change: Our innovative technological platform.

Speaker Change: And the resilience of our business, despite the difficult macro and geopolitical environment.

Speaker Change: Since you just covered over our guidance for the full year and the second quarter 2024.

Dushyant Sharma: As I shared earlier, we feel very good about this guidance based on our performance to date and the strength of our backlog. And as I reflect on the overall business, especially as an investor, I feel great about where we are headed. We believe we have all the pieces necessary for long-term success. And that we are just getting started. In essence, we are built, and we are building something very special. On that note, I also want to thank all of my team members for their continued efforts and dedication. And that concludes our prepared remarks. I'll now open up the line for questions.

Speaker Change: As I shared earlier, we feel very good about this guidance based on our performance to date and the strength of our backlog.

Speaker Change: And as I reflect on the overall business.

Speaker Change: Especially as an investor.

Speaker Change: I feel great about where we are headed.

Speaker Change: We believe we have all the pieces necessary for long term success.

Speaker Change: And that we're just getting started.

Speaker Change: In essence, we have built and we are building something very special here.

Speaker Change: On that note I also want to thank all of my team members for their continued efforts and dedication.

Speaker Change: And that concludes our prepared remarks, I'll now open up the lines for questions.

Operator: We will now begin our question and answer session. If you would like to ask a question, please press star followed by 1 on your telephone keypad. If, for any reason, you would like to remove a question, please press star followed by 2. Again, to ask a question, press star 1. Our first question comes from John Davis with the company Raymond James. John, your line is now open.

Speaker Change: We will now begin our question and answer Sir.

Speaker Change: If you would like to ask a question. Please press star followed by one telephone keypad. The freemium reason he would like to remove your question. Please press star followed by two.

Speaker Change: To ask a question press star one.

Speaker Change: Our first question comes from John Davis with accompanying Raymond James John Your line is now open.

John Kimbrough Davis: Hey, good afternoon guys.

John Kimbrough Davis: Hey guys, Dushyant and Sanjay, I wanted to start on EBITDA margins. It came in nicely ahead this quarter. I think it expanded about 1,300 basis points year over year. I understand comps get tougher throughout the rest of the year, but the guide implies margins will kind of be down year over year, you know, in kind of the back three quarters, if you will. So maybe talk a little bit about some of the stuff you're spending money on. And I appreciate some of this conservatism, but I'm just trying to understand kind of the puts and takes on margins through the rest of the year, given the four-year guide.

John Kimbrough Davis: Sean Collins I wanted to start on EBITDA margins.

John Kimbrough Davis: Came in nicely ahead, this quarter expanded about 1300 basis points year over year.

John Kimbrough Davis: Comps get tougher throughout the rest of the year, but the guide implies margins will kind of be down year over year.

John Kimbrough Davis: In tandem.

John Kimbrough Davis: Three quarters, if you will so maybe talk a little bit about some of your spending money on.

John Kimbrough Davis: And I appreciate some of the conservatism, but just trying to understand kind of the.

The puts and takes on margins through the rest of the year given the full year guidance.

Sanjay Kalra: Yeah, John, I would say that the adjusted EBITDA margin definitely came very strong in Q1, at 28.6%. And for the full year as well, you'll see we are at 26.1%. That's what the guidance would imply.

Speaker Change: Yes, John.

John Kimbrough Davis: I'd say that adjusted EBITDA margin definitely gain very strong in Q1.

John Kimbrough Davis: <unk> was 28, 6% and for the full year as well at the midpoint you can see we are at 26, 1%. Therefore, the guidance would imply.

John Kimbrough Davis: This is still an improvement from last year, what we deliver for the full year I would say during the quarter things could move around and I would say in Q1, while in operating expenses, which is one of the reasons, which you will see that is slightly changing.

Sanjay Kalra: This is still an improvement from last year on what we delivered for the full year. I would say during the quarter, things could move around. And I would say in Q1, while in operating expenses, which is one of the reasons why you will see that it's slightly changing. In Q1, we have still not caught up with the operating expense plan. We are up only 7.2% year over year. Last year, for the full year, we were up 6.8% on OPEX.

John Kimbrough Davis: Q1, we'd have still not get caught up with our operating expense plan. We are up only seven 2% year over year last year for the full year, we were up six 8% on opex year over year and as we guided earlier just two months ago operating expenses planned for the whole year was to go mid teens percent.

Sanjay Kalra: And as we guided earlier, just two months ago, the operating expenses plan for the whole year was to go, you know, mid teens percent up year over year. So we have some catch up to do for the remaining three quarters. That said, we are assuming we will be able to catch up on the entire OPEX plan in the year. We will have to make progress there, and we are actively seeking candidates to fill the right positions, which are mainly in sales and marketing.

Up year over year. So we have some catch up to do in the remaining three quarters that said, we are assuming we will be able to catch up for the entire opex plan in the year.

John Kimbrough Davis: We will have to make progress there and we are actively seeking candidates to build the right positions, which is mainly in sales and marketing. So that I would say the biggest piece of which you where youll see slight softness compared to Q1 and the other three quarters, but again the whole guidance is prudent based on all the macroeconomic factors.

Sanjay Kalra: So that's I would say the biggest piece which you see a slight softness compared to Q1 in the outer three quarters. But again, the whole guidance is prudent based on all the macroeconomic factors and the geopolitical climate we all are in. So it's prudent, I would say. That said, we are marching on full plan to execute and deliver a strong year.

John Kimbrough Davis: And the geopolitical climate, we all are in.

John Kimbrough Davis: So it's prudent I would say that said we are marching on full plan to execute.

John Kimbrough Davis: <unk> delivered a strong year.

Sanjay Kalra: Okay, great. Sanjay, just one other quick kind of guidance modeling question. So the 300 basis point decel and the 2Q revenue guide, I think makes sense given your kind of historical practices around revenue guidance. But it also implies about a 1400 basis point decel, I think from 30% to 16% in CP growth. And just curious, kind of what are the moving pieces there? Or why is the contribution profit growth so much slower in 2Q versus the revenue kind of decline?

Speaker Change: Okay, Great sorry, just one other quick kind of guidance modeling question. So the 300 basis points <unk> and the <unk> revenue guide I think makes sense given kind of your historical practices around revenue guidance.

Speaker Change: It also implies about 1400 basis point diesel I think from 30% to 16% in CPE.

Speaker Change: And just curious kind of what are the moving pieces there or why is the contribution profit growth so much slower in <unk> versus <unk>.

Speaker Change: The revenue kind of diesel.

Speaker Change: For the second quarter.

Sanjay Kalra: Yeah, John, I think there are two questions, one on revenue and one on contribution profit. Let me take one at a time.

Speaker Change: Yes, John I think there are two questions one on the revenue and one on contribution profit let me take.

Speaker Change: One at a time I would say revenue generally when you look at Q1 and Q2 trends of the past years.

Speaker Change: Do you want to give to a pretty much similar because Q1, we are we get benefit due to seasonality, but in Q2 seasonality is not there, but we pick up due to implementations that said Q1 and Q2 are generally similar on topline revenue.

Sanjay Kalra: I would say revenue, generally, when you look at Q1 and Q2 trends of the past years, Q1 and Q2 are pretty much similar because in Q1 we get a benefit due to seasonality, but in Q2 seasonality is not there, but we pick up due to implementations. That said, Q1 and Q2 are generally similar on the top line, i.e., revenue.

Speaker Change: This year, what we experience as well as our seasonality in Q1 was much better than expected and hence skewed to looks like it's a small few basis points drop but had that not had a strong seasonality not haven't you would have seen Q2 growing that said Q2 guidance is still up year over year.

Sanjay Kalra: This year, what we experienced was our seasonality in Q1 was much better than expected. Hence, Q2 looks like it's a small few basis points drop. But had that strong seasonality not happened, you would have seen Q2 growing. That said, Q2 guidance is still up year over year, at midpoint, more than 20%. And we feel pretty good about how we are going on that.

Speaker Change: At midpoint more than 20% and we feel pretty good about how we are going on that and still we are not factoring out of implementations.

Sanjay Kalra: And still, we are not factoring a lot of implementations which are in the latter part of the year. But if things go well the way they went in Q1, we might see an upside there. Let me go on the second part of the question on contribution profit, you know, and this stems basically from why we call contribution profit our secondary measure. And the reason is, John, and as we tried to explain earlier, quarter over quarter.

Speaker Change: Which are in outer part of the year, but if things go well the way. It went in Q1, we might see an upside there following a prudent approach.

Let me go on the second part of the question on contribution profit.

Speaker Change: And this stems basically from why recall contribution profit out of our secondary metric.

Speaker Change: And the reason is Jon and as we've tried to explain earlier quarter over quarter contribution profit could bounce around a little bit due to multiple factors.

Sanjay Kalra: Contribution profit could bounce around a little bit due to multiple factors, you know, and that's one of the things which is not totally under our control. There's an increase in average payment amount, changes in payment mix, biller mix, all these, primarily biller mix, I would say, could make it happen that one quarter looks stronger, and the other quarter does not. And while I'm on the topic, I'd also like to say, in Q1, we saw approximately 30% contribution profit growth year over year, which is higher than the revenue growth of approximately 25%. This happened in the past as well. In fact, last year in Q3, it happened, and in Q1 and Q2 of 22, it happened.

Speaker Change: And Thats one of the things, which is not totally under our control as increase in average payment amount changes in payment mix builder mix. All these primarily <unk> I would say this could make it happen that one quarter look stronger the other quarter does not.

Speaker Change: And while I'm on the topic I'd also like to say in Q1, we saw approximately 30% contribution profit growth year over year.

Speaker Change: It's higher than the revenue growth of 25% approximately.

Speaker Change: This has happened in the past as well in fact last year in Q3 that happened in Q1, and Q2 are going to do it happened. So at times it could be higher than revenue at times it could be lower but the end it all big I would say for the whole year revenue and contribution profit both are more than 20% and the board are pretty much largely <unk>.

Sanjay Kalra: So at times, it could be higher than revenue. At times, it could be lower. But to end the topic, I would say for the whole year, revenue and contribution profit both are more than 20%, and they are both pretty much closely aligned. And we are trying to still take a conservative posture in the calculation of contributions. And at midpoint, on the Rule of Forty scale, we are 45. We are 45. Yeah.

Speaker Change: <unk>.

Speaker Change: And we are we are trying to still take a conservative posture in the calculation of contribution profit and at the midpoint.

Speaker Change: Rule of law on the rule of 40 scale and the mid Forty's, we have 45 and 45, yes, yes.

Sanjay Kalra: And there's one last one. I hope that helps. Yeah. Yeah, no, it does.

Speaker Change: Yes.

Speaker Change: I hope that helps us.

Dushyant Sharma: And one quick one. Last one for Dushyant. The IPN you guys called out in prepared remarks as a contributor to growth. Just curious for kind of a quick update there. And Dushyant, are you guys willing to share, you know, what percentage of the revenue that is today? Or, you know, it was just, it was noticeable that you guys called it out in prepared remarks as a contributor. So just curious for an update there. Yeah, the IPN continues to actually fuel our sales momentum, as you can see.

Speaker Change: Yes, it does.

Speaker Change: One quick one last one for you Sean.

Speaker Change: At the end you had called out in prepared remarks.

Speaker Change: Contributor growth, just curious where kind of a quick update there and the challenge is willing to share what percentage of the revenue that is today or it was just it was noticeable you guys called it out in the prepared remarks was a contributor so just curious for an update there.

Dushyant Sharma: Yeah, the IPN continues to fuel our sales momentum. As you can see, we have a strong bookings backlog; we had a strong bookings quarter in Q1 as well, actually a very strong bookings quarter. And the billing community, in general, wants to participate in the platform and the ecosystem by simply integrating, doing one integration with our platform and having access to a very diverse and broad set of network access points, so they can reach the entire customer body. So that's actually contributing to our growth. IPN itself is growing and growing well, and it still is not over 10% of our business, but it's growing well and contributing well to everybody. Great, thanks guys.

Speaker Change: Yes.

Speaker Change: The IPL continues to actually fuel.

Speaker Change: Sales momentum as you can see we have.

Speaker Change: Strong bookings backlog, we had a strong bookings quarter in Q1 as well.

Speaker Change: Actually a very strong bookings quarter and.

Speaker Change: Billing community in general.

Speaker Change: <unk> two.

Speaker Change: Participate in the platform in the ecosystem by.

Speaker Change: Simply integrating.

Speaker Change: Doing one integration with our platform and having access to a very diverse and broad set of.

Speaker Change: Network access points.

Speaker Change: They can reach the entire customer body, so that actually contributing to growth IP in itself is growing and growing well and is still.

Speaker Change: It is not over 10% of our business, but it's.

It's growing well and contributing well to our business.

Speaker Change: Great. Thanks, guys.

Speaker Change: Thank you our next question comes from.

David John Koning: Thank you. Our next question comes from Dave Koning with the company Baird. Dave, your line is now open.

Speaker Change: Dave Koning with the company.

David John Koning: Your line is now open.

David John Koning: I guess my first question is, your net revenue per transaction was up nicely year over year. I know it was a pretty easy cop, but historically, the last few years, usually net revenue per transactions come down as you've grown. What's the reason behind that? And maybe part of that is that network fees have been down, which is nice. Does that continue and keep helping that net revenue per transaction?

David John Koning: I guess my first question your net revenue per transaction was up nicely year over year I know it was a pretty easy comp, but historically the last few years, usually net revenue per transaction has come down as you've grown.

David John Koning: What what's the reason behind that and maybe as part of that network fees have been down which is nice to have that continue and keep helping that that net revenue per transaction.

Sanjay Kalra: Yeah, Dave, I would say there are two pieces to it. One is that the new billers we launched in the quarter, which had a good seasonal impact, you know, they were signed up at better ARPUs, or said differently, a better revenue per transaction, which kept the revenue per transaction also flat. Otherwise, generally, you see, that becomes softened as well, given we are signing large transactions. So that was one contributor. And the other two, as you correctly pointed out, the network fees were a little low as well.

Speaker Change: Yes, Dave I will say there are two pieces to it one is that the new builders, we have launched in the quarter.

David John Koning: <unk>, which had a great good seasonal impact there were signed up at better our booth or said differently a better revenue per transaction.

<unk> kept the revenue per transaction also flat otherwise generally youll see that become softens as well given we are signing large transactions. So that was one contributor and the other two as you correctly pointed out the network fees, while they don't know as well that gain little soft and given all the activities. We have done in the last one year to manage that better so overall.

Sanjay Kalra: That came a little soft, and given all the activities we have done in the last one year, to manage that better. So overall, I think both these factors are contributing, which is helping get the net contribution profit per transaction better year over year.

Paul: Paul I think.

Paul: Both these factors are contributing.

Paul: Helping getting the net contribution profit per transaction better year over year.

David John Koning: Gotcha. Okay. Thank you for that.

Speaker Change: Got you Okay. Thank you for that and then one other thing I just noticed.

Speaker Change: For several quarters <unk> had a very low tax rate it looked like this quarter.

David John Koning: And then one other thing I just noticed for several quarters, you've had a very low tax rate, and it looked like this quarter. It was about 33% or so. Is that kind of a number to think through now that you're, like, really profitable? Or is there some other rough tax rate we should be using?

Speaker Change: It was about 33% or so is that kind of number to think through now that you are like really profitable or.

Speaker Change: Is there some other rough tax rate, we should be using.

Sanjay Kalra: Dave, I suggest for modeling purposes, please use our 25% of non-GAAP net income as the tax rate going forward.

Speaker Change: There I suggest.

Speaker Change: For modeling purposes. Please use our 25% of non-GAAP net income as the tax rate going forward.

David John Koning: Gotcha, okay. Well, thanks guys, great job.

Speaker Change: Got you, okay, well, thanks, guys great job.

Speaker Change: Thank you thank you Dave.

Darrin David Peller: Thank you, Dave. Our next question comes from Darrin Peller of the company Wolf Research. Darrin, your line is now open.

Speaker Change: Thank you James our next question.

Speaker Change: From Darrin Peller with Wolfe research.

Darrin David Peller: Dan Your line is now open.

Darrin David Peller: Hey guys, thanks. Can we touch a bit qualitatively on the customer mix and how it's looking today versus this time last year, just given the growth in new verticals and both SMBs and across SMBs and enterprises? And then maybe just a little more on how implementations with large banks are going, what's your pulse on the desire for adoption? I know you touched, obviously, on the IPF, but maybe some larger partners like JPMorgan and others. Thanks, guys.

Darrin David Peller: Hey, guys. Thanks.

Darrin David Peller: Can we touch a bit even qualitatively on the customer mix and how it's looking today versus this time last year, just given the growth in new verticals in both the smbs across Smbs and enterprises.

Darrin David Peller: And then maybe just a little more on how implementations with large banks are growing what's your pulse on the desire for adoption I know you touched obviously on the IPO.

Darrin David Peller: Maybe some larger partners like JP Morgan and others. Thanks, guys.

Dushyant Sharma: Sure. Hey Dan.

Darrin David Peller: Sure.

Dan: Hey, Dan.

Speaker Change: Great question.

Speaker Change: Yes.

Speaker Change: The customer mix itself actually.

Dushyant Sharma: Great question. The customer makes itself, actually, before I go there, let me just, as I was alluding to earlier, that we are seeing great momentum in our, and demand for our platform and the ecosystem, across the board, and across the board, even in terms of the industry, the size of the customers. Utilities remains a very important vertical for us and a key vertical, but we are making progress and great progress in many, many other verticals, whether it's insurance, government services, consumer finance, banking, and so on.

Speaker Change: Before I go there let me just.

Speaker Change: I was alluding to earlier that we are seeing great momentum in our.

Speaker Change: <unk>.

Speaker Change: And demand for our platform in the ecosystem and.

Speaker Change: Across the board.

Speaker Change: And across the board and even in terms of the industry the size of the customers.

Utilities remains a very important vertical for us and a key vertical but we are making progress.

Speaker Change: With great progress and many many other verticals, whether it's insurance and government services.

Sure.

Consumer finance banking and so on and the.

Dushyant Sharma: And the customer mix itself, actually, the actual customer size is also increasing. The type of customers we are able to attract now to the platform would be those that many a time would never think that they would be outsourcing just because they couldn't find a platform as sophisticated and, frankly, as capable as our platform as they reviewed the alternatives. So, we are seeing some of the larger companies as well. In addition to that, I would say, as we shared in the prepared remarks, in this quarter, not only were we excited about the bookings we did in terms of the average or the total contract value or the annual contract value, but we also saw the number of clients being pretty robust as well, just because of the variety of clients who are signing for our services.

Speaker Change: The customer mix itself actually.

Speaker Change: The the <unk>.

Speaker Change: Actual customer size is also increasing.

Speaker Change: The type of customers, who are able to attract now to the platform.

Speaker Change: Would be those many times they never thought they would be outsourcing just because the confined our platform as sophisticated and frankly escaped.

Speaker Change: As capable as our platform.

Speaker Change: As they review.

Speaker Change: To review the alternatives. So we are seeing some of the larger companies as well in addition to that I would say.

Speaker Change: As we shared in the prepared remarks.

Speaker Change: In this quarter not only we were excited about the.

Speaker Change: The bookings we did in terms of the.

Speaker Change: Average or the total contract value.

Speaker Change: The annual contract value.

Speaker Change: We also saw the number of clients.

Speaker Change: Being pretty.

Speaker Change: Our robust as well just because the variety of clients, who are signing with our services for our services.

Dushyant Sharma: And in terms of our large bank partnerships, they're going really well, and we are very proud of the partnership we have with J.P. Morgan and J.P. Morgan Chase. And in terms of the IP and itself, it continues to remain strong, and the demand continues to remain strong, especially in the mid-tier bank and the credit union market.

Speaker Change: And in terms of the.

Speaker Change: The our large bank partnerships, they're going really well.

Speaker Change: <unk>.

Speaker Change: We are very proud of the partnership.

Speaker Change: <unk> Jpmorgan <unk> JP Morgan Chase.

Speaker Change: And in terms of the IP in itself.

It continues to.

Speaker Change: Remained strong and the demand continues to remain strong in.

Especially in the mid tier bank and the.

Speaker Change: Credit Union.

Speaker Change: Markets.

Speaker Change: Okay.

Dushyant Sharma: Sorry, that's just helpful. Thanks. Real quickly, quick follow up on the merchant settlement, the MDL, regarding air change. I mean, any flow through or impact on you guys, we should just keep in mind. We didn't think it was as much, but if there was anything to call out, it's with that.

Speaker Change: Alright Thats helpful.

Speaker Change: Thanks, and just real quickly a quick follow up on the merchant settlement the MTO regarding.

Speaker Change: Regarding the interchange I mean.

Speaker Change: Any flow through impact on you guys. We should just keep in mind that we didn't think it was as much but if there was anything to call out it's worth asking.

Dushyant Sharma: I think your assessment is correct. First of all, let me just say this: we have great relationships with all card networks, whether it's Visa, whether it's MasterCard, American Express, or Discover, and, frankly, other partners like PayPal. So we are very fortunate to have those kinds of relationships. In terms of this specific settlement itself, I think the only thing I would say is anything that actually helps even slightly to improve our interchange rates is beneficial to us, but we haven't quantified anything in that regard. Okay. Thanks guys. I appreciate it.

Speaker Change: I think your assessment is correct.

Speaker Change: First of all let me just say this that we have great relationship at all.

Speaker Change: Card networks, whether its visa Mastercard American express or discover.

Speaker Change: And frankly other partners like Paypal, So we're very fortunate to have those kind of relationships.

Speaker Change: In terms of this especially the settlement itself.

Speaker Change: The only thing I will say is anything that actually helps.

Speaker Change: Even slightly to improve or interchange rates as beneficial to us.

Speaker Change: Well, we haven't quantified anything in that regard.

Speaker Change: Okay.

Speaker Change: Thanks, guys I appreciate it.

Speaker Change: Thank you.

Speaker Change: Yes.

Darrin David Peller: Thank you, Darrin. Our next question comes from Will Nance with the company Goldman Sachs. Will, your line is now open.

Darren: Thank you Darren.

Darrin David Peller: Thank you, Darrin. Our next question comes from Will Nance with the company Goldman Sachs. Will, your line is now open.

Darren: Our next question comes from will Nance with the company Goldman Sachs.

William Alfred Nance: Line is now open.

William Alfred Nance: Hey guys, appreciate you taking the question, a nice quarter this afternoon. I just wanted to ask about your thoughts on capital allocation going forward. And, you know, I ask those because, for the last two quarters, you guys have had pretty strong performance. You're running well ahead of the rule of 40.

William Alfred Nance: Hey, guys I appreciate you, taking the question nice quarter of SaaS or need.

William Alfred Nance: I just wanted to ask about your thoughts on capital allocation going forward and I ask that.

William Alfred Nance: For the last two quarters you guys have had pretty strong performance you are running well ahead of the rule of 40.

William Alfred Nance: And, you know, you've made several comments today about the strengthened pipeline. So, you know, I know this is a fragmented industry. What are your thoughts on the opportunities for M&A longer term, more broadly? And I guess, more specifically, you've done a little bit of bolt-ons in the past. And if you were to go down that route, would they be more focused on sort of complementary type M&A, like Pay Varis back in the day? Or is there an opportunity for a more scale-driven roll-up?

Speaker Change: You made several comments today about the strength in pipeline. So just I noticed in the fragmented industry and what are your thoughts on the opportunities for M&A longer term more broadly and I guess more specifically you've done a little bit of bolt ons in the past and if you were to go down that route would there be more focused on sort of complementary type.

Speaker Change: M&A like pay various back in the day.

Speaker Change: Or is there an opportunity for more scale driven rollout.

Sanjay Kalra: Yeah, well, I'll start, and maybe Dushyant will chime in later on. You know, capital allocation priorities for us remain unchanged since what we've communicated in the past. Very similar, actually.

Speaker Change: Yes.

Speaker Change: I'll start and maybe Duchamp demo chime in later on.

Speaker Change: Capital allocation priorities for us remain unchanged since what we've communicated in the past very similar we have very good pipeline ahead of US we operate in a very strong Tam business.

Sanjay Kalra: We have a very good pipeline ahead of us. We operate in a very strong TAM business. We believe that our business growth is investing in our own business, i.e., getting organic growth.

Speaker Change: We believe that all of our business growth is investing our in our own business I E getting organic growth. So we want to invest.

Sanjay Kalra: So we want to invest... our extra cash or capital allocation in our own business. So we are spending money on hiring sales and marketing, and even working with resellers. So direct or indirect sales, as long as that improves, that's where we think it is the right place to spend money and get growth. So that is our first priority. The second point I'd like to make on this is that we do not currently have any technological gaps.

Speaker Change: Our extra cash or capital allocation in our own business. So we are spending money and hiring sales and marketing and even working with resellers, so direct or indirect sales as far as that improves that we everything is the right place to spend money and get growth on so that is our first priority.

Speaker Change: Second point I'd like to make on this is we do not currently have any debt.

Speaker Change: The logical gaps. So we are not seeking any specific M&A initiative right now that said, we get paid by a lot of investment banks, we get dealers and if anything seems interesting as far as accretive to the overall business and add shareholder value, we will definitely look at it.

Sanjay Kalra: So we are not seeking any specific M&A initiative right now. That said, we get pinged by a lot of investment banks; we get teasers. And if anything seems interesting, as long as it's accretive to the overall business and adds shareholder value, we will definitely look at it and reach out to the board and give it a serious thought. But we are not seeking anything right now. I think we are heavily focused on executing, and I think that's where our capital allocation strategy lies.

Speaker Change: And retail to the board and give it to <unk>, but we are not seeking anything right. Now I think we are heavily focused on executing and I think thats, where all of our capital allocation strategy lies.

William Alfred Nance: Got it. I appreciate that.

Speaker Change: Got it I appreciate that and then maybe just a question on some of the pipelines that you guys had mentioned several times could you guys maybe.

Diving, a little bit on the composition of the pipelines in terms of.

Our vertical mix and the size of the <unk>. It seems like it sounds like vertical mix contributed to maybe slightly better unit economics on the ones that were implemented this quarter and so just curious on if there's any kind of notable observations you would make about the implementation pipeline that you see today.

William Alfred Nance: And then maybe just a question on some of the pipelines that you guys have mentioned several times. Could you guys maybe dive in a little bit on the composition of the pipelines in terms of vertical mix and the size of the billers? It seems like, it sounds like vertical mix contributed to maybe slightly better unit economics on the ones that were implemented this quarter. So just curious if there's any kind of notable observations you would make about the implementation pipeline that you see today.

Yes.

Speaker Change: Very good question.

Speaker Change: Our pipeline composition I will say, it's very similar to the way ABC, all our backlog composition, and which is very similar to the way we see our revenue composition as well said differently.

Sanjay Kalra: Yeah, well, that's a very good question. Our pipeline composition, I would say, is very similar to the way we see our backlog composition, and which is very similar to the way we see our revenue composition as well. Said differently, our largest segment is utilities or verticals, and that way, which is still more than 50%. And the remaining 50% is made up of a bunch of verticals, you know, insurance being one, government being the other.

Speaker Change: Our.

Speaker Change: The largest segment as utilities, all vertical and that way, we can still more than 50% and the remaining 50% is made up of bunch of verticals insurance being one government being the other and we are seeing a lot of this.

Speaker Change: New verticals, we are trying to enter into and we are very pleased with the diversification of that and we are seeing it across the board in fact of our pipeline is giving us much more comfort for the outer periods as we think about over long term plans for the company. So overall our pipeline is strong competition is great I would say that we are the Athena.

Sanjay Kalra: And we are seeing a lot of these new verticals we are trying to enter into, and we are very pleased with the diversification of that. And we are seeing it across the board. In fact, our pipeline is giving us much more comfort for the outer periods as we think about our long-term plans for the company. So overall, the pipeline is strong, and the composition is great.

William Alfred Nance: I would say that we are we are seeing a good diversification on that And in terms of implementation, I'd like to cover as well. The implementation pace actually is getting better. In fact, as we saw in Q1, our revenues came in ahead of what we were expecting. So implementation pace is, is doing is doing really well. I think the COVID fever is behind. Definitely our business we see, and we are we are seeing the tailwind of that now catching up. Great.

Speaker Change: Good diversification on that mix.

And in terms of implementation I would like to Golar as well.

Speaker Change: The implementation pace actually is getting better.

In fact, as we saw in Q1, our revenues came in ahead of what we were expecting so implementation base is.

Speaker Change: <unk> is doing really well I think the Colbert veeva is behind that.

Speaker Change: In Italy, our business, we see and we're seeing the tailwind of that now catching up.

William Alfred Nance: Great. Awesome. I appreciate you taking the time to answer the questions.

Speaker Change: Great Awesome I appreciate you taking the questions.

Speaker Change: Thank you Bill.

Speaker Change: Thank you will.

Tenzing Wong: Our next question comes from Tenzing Wong, with a company in J.P. Morgan. Tenzing, your line is now open.

Speaker Change: Our next question comes from Tim <unk> with the company and J P. Morgan.

Tim: Your line is now open.

Tenzing Wong: Yeah, thanks a lot. It sounds like the repricing strategy is working quite well there. Is there more repricing across the book going forward? Have you addressed most of that relative to your plan? I'm just curious.

Tim: Yes, Thanks, a lot it sounds like the re pricing strategy is working quite well there is there more repricing across the book going forward.

Tim: Dressed most of that relative to your plan I am just curious I know you commented on already.

Sanjay Kalra: I know you commented on running for transaction and better rates on or ARPU on new billers, but how about the overall book?

Tim: I'm ready for transaction and better rates on <unk>, new pillars, but how about the overall book.

Tenzing Wong: Well, overall, I would say it has now become a part of our regular process, you know, repricing. It was discussed pretty much at length when the company was going through inflationary pressures, and we were working with all the billers, and we had to pass those increased costs to them. So it was kind of a separate process on its own. And I believe that was a pretty interesting topic in 2023 and even beyond 2022.

Tim: Overall I would say it has now become a part of our regulatory process in a repricing.

Tim: This was pretty much at land when the when the company was going through inflationary pressures and we are working with all the Biller, then <unk> increased cost to them. So it was kind of a separate process on its own and I believe that was a pretty interesting topic in 2023, and even exiting 2022, but now the processes have Steve.

Sanjay Kalra: But now the processes have streamlined so much that the repricing is now a part of our regular process; we review pricing, whether it's due to inflation, or due to margins, or due to many other factors. So I think it's a part of the regular process; I would not call that a one-off pricing activity anymore. But I hope that addresses the question. But at the same time, I'll say we are kind of caught up in our process. And as you saw in Q1 itself, we saw some benefit of repricing, which is a part of internal initiatives and has nothing to do with inflation.

In line so much that the repricing is now a part of our regulatory process, we reveal pricing whether its due to inflation are due to margins are due to many of the factors. So I think it's about the regulatory process I would not call that as one off pricing activity anymore, but.

Tim: I hope that addresses the question, but at the same time I'll say, we are kind of caught up in our process and as you saw in Q1 itself. We saw some benefit of repricing, which is a part of internal initiatives nothing to do with inflation.

Tenzing Wong: Right, right. So the repricing has been addressed, and it's part of your normal course now as you're renewing and winning deals. I think I understand it's good to know. My second question was just on the, I heard, I know Will asked about composition in your wins.

Tim: Right right so the repricing.

Tim: Been addressed and it's part of your normal course, now as you're sure renewing and William feels I think I understand this correctly.

Tim: My second question was just on the I heard Donna will asked about competition.

Tim: On your wins, you talked about strong bookings substantial backlog.

Tenzing Wong: You talked about strong bookings and a substantial backlog. Was there... Is there any issue or concern around replenishing that pipeline and backlog? I know, Dushyant, we talked about that in the past. It sounds like there's a lot of deals to still win. Just want to make sure that's the case, given where you are in the calendar year.

Tim: <unk> was there.

Tim: Is there any issue or.

Speaker Change: Concern around replenishing that pipeline backlog I know, we talked about that in the past it sounds like Theres a lot of deals to just still win just wanted to make sure that that's the case, given where you are in the calendar year.

Dushyant Sharma: Yeah, no, we are feeling good about our pipeline, and we are feeling good about the long-term prospects of the business. The demand remains strong, and we are seeing great momentum in the market. Glad to hear it. Nice job.

Speaker Change: Yes, we are feeling good about.

Speaker Change: Our pipeline and we are feeling good about the long term prospects of the business the.

Speaker Change: The demand remains strong and.

We are seeing.

Speaker Change: Momentum actually in the market.

Tenzing Wong: Glad to hear it. Nice job. Thank you.

Speaker Change: Yeah.

Tenzing Wong: Glad to hear it. Nice job. Thank you.

Speaker Change: Glad to hear it thanks, Rob Thank you.

Speaker Change: Thank you lindon.

Okay.

Speaker Change: Yeah.

Andrew Thomas Bauch: Thank you, Consenny. Our next question comes from Andrew Bauch with the company Wells Fargo. Andrew, your line is now open.

Thank you Catherine.

Andrew Lee Estes: Our next question comes from Andrew pumps with the company.

Andrew Lee Estes: Andrew Your line is now open.

Andrew Thomas Bauch: Hey, good evening, and thanks for taking the question. So I know it's been hit on in prior questions, but I'm just trying to better understand the interplay here between, you know, the execution you guys delivered, four straight quarters of pretty consistent growth with, you know, a more stable macro environment, potentially leading to, you know, better implementation times and conversations with that, replenishing that front book. So maybe you can just give us a sense of the two to three things that you've done over the last year that's driven this consistent execution. And maybe we can kind of understand how much of the growth you're seeing now is part of that catch-up in demand.

Andrew: Hey, good evening and thanks for taking the question. So I know it's been hit on.

Andrew: In prior questions, but I'm, just trying to better understand the interplay here between the execution you guys delivered four straight quarters.

Andrew: Just to grow with a.

Andrew: More stable macro environment potentially leading to.

Andrew: Better implementation time.

Andrew: Conversations with that replenishing that front book, So maybe if you could just give us a sense on that.

Andrew: Two to three things that you've done over the last year.

Andrew: Driven this consistent execution and maybe if we're able to kind of understand how much of the growth you're seeing now is as part of that catch up in demand.

Dushyant Sharma: Actually, I would say it is not a catch up. Let me take the last part first.

Actually.

Speaker Change: I would say.

Speaker Change: It is.

Dushyant Sharma: It seems like we are still catching up to the type of demand or type of execution we used to see prior to the pandemic. So after the pandemic, what has transpired is that we are back to the way the business used to be, where we were able to send our storytellers in front of our clients to educate the market on how they can improve their cost to serve and improve their customer experience using our platform and the ecosystem. And that is going well.

Speaker Change: It is not a catch up.

Speaker Change: We take the last part for US it is more likely is still catching up to the type of demand or type of execution, we used to see prior to the pandemic. So after the pandemic. What has transpired is that we are back to the way the business used to be.

Speaker Change: Where we were able to sell.

Speaker Change: Sandoval storytellers.

Speaker Change: In front of our clients to educate the market on how they can improve their cost to serve and improve the customer experience is using our platform and the ecosystem.

Dushyant Sharma: As a result of that, we are also, you know, signing clients from various verticals. In addition to that, our partnership ecosystem has started to produce for us and bring us new deals, new verticals. And as a result of that, we have a pretty strong, very strong backlog. So our front book is getting replenished.

Speaker Change: That is growing well is as a result of that we're also.

Speaker Change: We are signing clients of various verticals in.

Speaker Change: In addition to that our partnership ecosystem has a start to produce for us.

Speaker Change: And bring us.

Speaker Change: New deals new verticals.

Dushyant Sharma: We are also implementing a lot of customers, which you also saw that during the pandemic, we were somewhat affected. But now we are seeing that we are back to normalcy. So I wouldn't think that there is any, that this is like a short-term success we are seeing. What we are seeing is a return to our long-term trends, which we used to see prior to going public as well as, and frankly, prior to the pandemic.

Speaker Change: And as a result of that we have a pretty strong very strong backlog. So front book is getting replenished.

Also.

Speaker Change: Implementing lot of customers, which you also saw that during the pandemic, we were somewhat affected but now we are.

Speaker Change: Seeing that we are back to normalcy, so I wouldnt think that there is any.

Speaker Change: This is like a short term.

Speaker Change: Yeah.

Speaker Change: Success, we are seeing what we are seeing is returned to our long term trends, which we used to see prior to going public as well as.

Speaker Change: And frankly prior to the pandemic and now we're back to.

Speaker Change: What we expect to be normal cadence here and in terms of your other question, what two or three things we have done.

Speaker Change: I would say.

Dushyant Sharma: And now we are back to what we expect to be a normal cadence here. We have been very focused on making sure that we are able to get in front of as many customers as we can, sign as many partnerships as we can, but that's on the front side, and then on the back end, implement as many customers as we can and make sure that we listen and learn and understand what the post-pandemic world looks like and how do we need to adjust ourselves and our processes and our toolkits to make sure we can onboard the customers.

Speaker Change: We have been very focused on making sure that we are able to get in front of as many customers as we can sign as many partnerships as we can but that's on the front side and then on the back and implement as many customers as we can and make sure that we.

Speaker Change: <unk>.

Speaker Change: We listen and learn and understand what the post pandemic world looks like and how do we need to adjust ourselves and our processes and of our toolkit to make sure we can onboard customers.

Dushyant Sharma: And basically, being very, very focused on making sure that the financial execution of the business from top-line growth as well as the bottom-line improvement of operating leverage, we are able to continue to do that very successfully. So, that's what has been the focus.

Speaker Change: As well.

Speaker Change: <unk>.

Speaker Change: And basically being very very focused on making sure that.

Speaker Change: The financial execution of the business from top line growth as well as the.

Speaker Change: The bottom line.

Speaker Change: Sure.

Speaker Change: Improving the operating leverage we are.

Speaker Change: To continue to do that very successfully so that's the.

Speaker Change: That's what has been the focus.

Andrew Thomas Bauch: No, it's very well put. And so you threw the AI teaser in your prepared remarks. So I'll bite. What kind of efficiencies, you know, are you anticipating, albeit you said, in the coming years that can come from your investment? And I think that that patent really does kind of show that test.

Speaker Change: No, it's very well put.

Speaker Change: You threw the teaser.

Speaker Change: In your prepared remarks, so I'll bite what kind of efficiencies are you anticipating.

Speaker Change: You said in the out years.

It can come from urea and investment and I think that that.

Patent really does kind of show that that estimate.

Dushyant Sharma: No, thank you. Thank you, Andrew.

Speaker Change: No. Thank you. Thank you Andrew.

Dushyant Sharma: We haven't actually, I mean, it is still nascent; the patent was just awarded a few weeks ago, publicly issued. So we plan to integrate those capabilities into our system. What we were trying to bring out was, if you're an investor in the business or thinking about investing in our business, you're looking at what is, first of all, behind the current financial performance and what is behind the long-term prospects of the business, and what the strategy looks like for the business.

Speaker Change: We haven't actually.

Speaker Change: Is it still nascent the battle, but just awarded like weeks a few weeks ago publicly.

Speaker Change: So we are.

Speaker Change: We plan to integrate.

Speaker Change: Those capabilities and our system, what we will the reason we were trying to bring this out was.

Speaker Change: If.

Speaker Change: If you are an investor in the business or thinking about investing in our business you are looking at.

Speaker Change: What is what is first of all what is behind the financial current financial performance and what's behind.

Speaker Change: What's the long term prospects of the business what the strategy looks like for the business and we just wanted to explain that.

Dushyant Sharma: And we just wanted to explain that despite the difficult macroeconomic environment the company was dealing with, and the whole world was dealing with, Paymentus was still strategically executing and thinking through what the different challenges and risks we see, and implementation and integration was one of them. And then we were focused on how to convert that into a great opportunity for us, and that AI is one of the key factors there. So we believe that you will continue to see improving implementation performance from the company, and AI will be part of it.

Speaker Change: Despite the difficult macro the company was dealing with and the whole world was dealing with a payment. This was still a strategically executing and thinking through what are the different.

Challenges and risks, we see in implementation and integration was one of them and then we were focused on how do we convert that into a greater positive for us and.

Speaker Change: And that is that as AI is one of the key factors there.

Speaker Change: So we are we believe that you will continue to see improving implementation.

Speaker Change: The performance from the company and AI will be part of it.

Andrew Thomas Bauch: It's great to hear. Thanks, Dushyant. Thank you.

Speaker Change: That's great to hear thanks for trial.

Speaker Change: Thank you.

Zachary Dunn: Thank you, Andrew. Our next question comes from Zachary Dunn with the company FT Partners. Zachary, your line is now open.

Speaker Change: Thank you Andrew our next question comes from Zachary time with the company Ft Partners. Secondly, your line is now.

Zachary Dunn: Unknown Speaker My question. I guess my first question here is about the guide. Last call, you said you were in a position to achieve the top end of the guide without signing any new clients. So I guess with the new updated guide, can we assume that that top end is also achievable with no new clients, or were those some of the ones you had performance driven by new clients? Just how to think about that. And then I just have a follow up.

Zachary: My question I guess my first question here is around the guide last call. You cant you are in a position to achieve the top end of the guide without signing any new clients.

I guess with the new updated guide can we assume that that pop in the Gulf of achievable new clients or was that some of the <unk> outperformance driven by new clients how to think about that.

Zachary: Follow up.

Sanjay Kalra: So Zachary, the short answer is yes, our high end of the guidance still does not entail any revenue coming from any bookings happening in 2020. That said, I will also clarify that in Q1, the increased revenues we saw were from implementations which were anyway scheduled to happen this year but in the later part of the year. They just happened earlier, so we picked up additional revenue. Hence, we were comfortable raising the guidance for the year because we had already achieved that in Q1. And then we also increased the guidance a little more than we exceeded in Q1.

Speaker Change: So I would say short answer is yes, our high end of the guidance still does not entail any revenue coming from any bookings happening in 2024.

Speaker Change: That said I would also clarify that in Q1 the increase revenues we saw.

Speaker Change: From implementations.

Speaker Change: They are scheduled to happen in this year, but in the later part of the year. They just happened earlier, so we picked up additional revenue hence veeva.

Speaker Change: We were comfortable raising the guidance for the year, because we had already achieved that in Q1 and then we also increased the guidance even more than what we exceeded in Q1.

Zachary Dunn: Got it. Okay, yeah, that makes sense. And then just on the contribution profit dollars per transaction, I know revenue per transaction was asked earlier, but I know it came up year over year, but it did step down a bit, Q over Q. And just looking at 1Q of last year, it was the trowel in terms of contribution profit per transaction. So is it fair to think about this quarter as a low watermark and then see that step up through the rest of the year? Well, Zachary, I would say that the forecast.

Speaker Change: Got it okay, yes that makes sense.

Speaker Change: And then and then just from a contribution profit dollars per transaction.

Speaker Change: The revenue per transaction was asked earlier, but I know it came up year over year, but it did step down a bit Q over Q and just looking at <unk> of last year. It was the trial in terms of contribution profit per transaction. So is it fair to think about this quarter the low watermark and then.

Step up through the rest of the year.

Sanjay Kalra: Well, Zachary, I would say that forecasting revenue per transaction or contribution profit per transaction for the outer quarters is not really the most effective way to understand our business. And we don't do that. We learned the same way.

Speaker Change: Well exactly I would say that forecasting revenue per transaction all contribution profit per transaction for alder quarters is not really the most effective way to understand our business and we don't do that we learn the same way and hence im sharing this.

Sanjay Kalra: And hence, I am sharing this experience because we now see contribution profit or revenue per transaction. Anything per transaction is more of a by-product of the business, rather than a driving strategy for us because we get so many billers from small size to large size to mega size. I would say that it just becomes hard to put them all into the same framework of per transaction. Yes, it's a great metric to look at, and I agree that it's the right way, on a high level, to analyze the...

Speaker Change: This experience because we now see contribution profit our revenue per transaction anything per transaction is more of a byproduct of the business rather than a driving strategy for us because we are getting so many builders from small size to large size two mega size I would say that it just becomes how.

Speaker Change: Hard to pull them all into the same framework of Bard transaction, yes. It is a great metric to look at and I agree that's the right way on a high level to analyze the business, but if we get into the granularity of that trend by quarters Im not sure its going to produce an effective result for you to understand the business that said.

Sanjay Kalra: But if we get into the granularity of that trend by quarters, I'm not sure it's going to produce an effective result for you to understand the business. That said, I would still say that, overall, Q1 is the most soft quarter for us from a contribution margin perspective. We saw that last year, we saw that this year, and we've seen that in previous years also. So in Q2, I would expect contribution profit to get better, and contribution margins to get better as well.

Speaker Change: I would still say that overall Q1 is the most soft quarter for us from a contribution margin perspective, we saw that last year, we saw that this year.

Speaker Change: <unk> also we've seen so Q2 I would expect contribution profit to get better contribution margins to get better as well and as you will see in the guidance.

Sanjay Kalra: And as you can see in the guidance, the contribution margin does bounce around from one quarter to the next, but overall for the whole year, I think we are in very decent shape. So contribution profit dollars, definitely we expect them to increase in the year and in the coming quarter.

Speaker Change: The contribution margin does bounce around from one quarter to the other but overall for the whole year. I think we are in a very decent shape. So contribution profit dollars definitely VX, we expect them to increase in the year in the coming quarters.

Speaker Change: Got it thanks.

Operator: Thank you, Zachary. That concludes our question and answer session. At this time, I would like to pass the microphone back to our management team for any closing remarks.

Speaker Change: Thank you.

Speaker Change: That concludes our question and answer session. At this time I would like to pass it back to our management team for any closing remarks.

Dushyant Sharma: Thank you everyone for your time today, and have a great day!

Speaker Change: Thank you everyone for your time today and have a great day.

Speaker Change: Thank you.

Operator: That concludes our first quarter 2024 Paymentus earnings conference call. Thank you for your participation, and enjoy the rest of your day.

Speaker Change: That concludes our first quarter 2024 earnings conference call. Thank you for your participation in the rest of your day.

Q1 2024 Paymentus Holdings Inc Earnings Call

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