Q2 2024 Paymentus Holdings Inc Earnings Call

August 8, 2024

Good day and welcome to the second quarter 2024 Paymentis Earnings Conference Call. This call is being recorded.

Operator: This call is being recorded. All participants are currently in a listen-only mode.

Operator: There will be an opportunity to ask questions following management's prepared remarks. If you'd like to ask a question on today's call, you can do so by dialing Star One on your telephone keypad.

All participants are currently in a listen-only mode.

Operator: All participants are currently in a listen-only mode. There will be an opportunity to ask questions following management's prepared remarks. If you'd like to ask a question on today's call, you can do so by dialing star one on your telephone keypad. At this time, I will now turn the call over to David Hanover, Investor Relations. Please go ahead.

Speaker Change: There will be an opportunity to ask questions following management's prepared remarks. If you'd like to ask a question on today's call, you can do so by dialing star 1 on your telephone keypad. At this time, I'll now turn the call over to David Hanover and Vester relations. Please go ahead.

David Hanover: At this time, I'll now turn the call over to David Hanover, Investor Relations. Please go ahead.

David Hanover: Thank you. Good afternoon and welcome to Paymentus second quarter, 2024 earnings conference call. Joining me on the call today is Dushyant Sharma. Our founder and CEO, and Sanjay Kalra, our CFO, following our prepared remarks, will take questions. 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: Thank you. Good afternoon, and welcome to Paymentus' second quarter 2024 earnings conference 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. Our press release was issued after the close of market today and is posted on our website, where this call is named a 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.

Dushyant Sharma: Thank you. Good afternoon and welcome to Paymentus' second quarter 2024 earnings conference 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.

Our press release was issued after the close of market today and is posted on our website where this call is aimed for obtaining some webcasts. 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 IROT.pmentlist.com.

David Hanover: 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. Statements made on the webcast 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 expectation 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 strategy implementation timing, profit enhancements impact from acquisitions and other matters.

David Hanover: Statements made on this webcast 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 on market opportunities, business strategies, implementation timing, product enhancements, impact from acquisitions, and other matters. These forward-looking statements speak as of today, and we undertake no obligation to update them.

Dushyant Sharma: Statements made on this webcast include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Dushyant Sharma: Forward-looking statements use words such as will, believe, expect, anticipate, and similar phrases that denote future expectations or intent regarding our financial results,

Dushyant Sharma: 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 matters.

David Hanover: These forward-looking statements speak as of today, and we undertake no obligations to update them. The statements are subject to risk uncertainties and assumptions that may cause actual results to differ materially from those platforms and such statements, including the risks and uncertainty set forth under the caption Special Note Regarding Forward Looking Statements and Risk Factors in our annual report on Form 10-K. The year ended December 31st, 2023, and our subsequent quarterly reports on Form 10-Q, including our Form 10-Q for the quarter ended June 30th, 2024, which we expect to file with the SEC shortly, and elsewhere, and our other filings of the SEC.

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 captioned 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 June 30, 2024, which we expect to file with the We encourage you to review these detailed forward-looking statements, the safe harbor, and risk factor disclosures.

Dushyant Sharma: These forward-looking statements speak as of today, and we undertake no obligation to update them.

Dushyant Sharma: 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 .

Dushyant Sharma: 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 June 30, 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 statements, safe harbor, and risk factor disclosure.

David Hanover: In addition, during today's call, we will discuss certain non-gap financial measures, specifically contribution profit, adjusted growth profit, non-gap operating expenses, adjusted evita, adjusted evita margin, and non-gap 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 organization from GAAP results. We encourage you to review additional disclosures regarding these non-GAAP measures, including recommendations of the most directly comparable GAAP measures in our earnings press release issued today and the supplemental slides for this web test, each available on the investor relations page of our website.

Dushyant Sharma: We encourage you to review these detailed forward-looking statements, 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?

Dushyant Sharma: In addition, during today's call, we will discuss certain non-gap financial measures, specifically contribution profit.

Dushyant Sharma: Adjusted Gross Profit, non-GAAP Operating Expenses, Adjusted EBITDA, Adjusted EBITDA Margin, and non-GAAP Net Income and Earnings per Share.

Dushyant Sharma: 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 results.

Dushyant Sharma: 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.

Dushyant Sharma: With that, I'd like to turn a call over to Dushan Sharma, our founder and CEO, to shot. Thanks, David. In the second quarter, we saw record revenue, contribution profit, and adjusted Evita, all exceeding our expectations. Our revenue was 197.4 million dollars, up 32.6% year over year, and our adjusted evita was 22.5 million dollars, up 58.6% year over year. These results were once again ahead of a long-term target of 20% revenue growth and 20% to 30% adjusted EBITDA growth. Contribution profit for the quarter was $76.5 million, which was up 28.3% year over year. Almost half of all incremental contribution profit dollars dropped to the adjusted EBITDA line.

Unknown Attendee: This call is being recorded. All participants are currently in a listen only mode.

Dushyant Sharma: With that, I'd like to turn the call over to Dushyant Sharma, our founder and CEO . Dushyant?

Unknown Attendee: There will be an opportunity to ask questions following management prepared remarks. If you'd like to ask a question on today's call, you can do so by dialing star one on your telephone keypad.

Dushyant Sharma: In the second quarter, we saw record revenue, contribution profit, and adjusted EBITDA, all exceeding our expectations. Our revenue was $197.4 million, up 32.6% year-over-year, and our adjusted EBITDA was $22.5 million, up 58.6% year-over-year. These results were once again ahead of our long-term targets of 20% revenue growth and 20 to 30% adjusted EBITDA growth. Contribution profit for the quarter was $76.5 million, which was up 28.3% year over year. Almost half of all incremental contribution profit dollars drop to the adjusted EBITDA line. We are very pleased with this performance, given We also increased our group top line by over 30%, as a result of our growth and operating leverage. Based on the rule of 40, we were well ahead at 58.

Dushyant Sharma: Thanks, David.

Dushyant Sharma: In the second quarter, we saw record revenue, contribution profit and adjusted EBITDA, all exceeding of expectations.

David Hanover: At this time, I'll now turn the call over to David Hanover investor relations. Please go ahead. Thank you.

Dushyant Sharma: Our revenue was $197.4 million, up 32.6% year, and our adjusted EBITDA was $22.5 million, up 58.6% year.

Dushyant Sharma: Good afternoon and welcome to Paymentus second quarter, 2024 earnings conference call. Joining me on the call today is Dushyant Sharma. Our founder and CEO and Sanjay Kalra or CFO, following our prepared remarks will take questions. Our 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.

Dushyant Sharma: These results were once again ahead of our long-term targets of 20% revenue growth.

Dushyant Sharma: and going to do 30% adjusted EBITDA growth.

Dushyant Sharma: Contribution profit for the quarter was $76.5 million.

Dushyant Sharma: which was up 28.3% year over year.

Dushyant Sharma: Statements made on the webcast include forward looking statements within the meaning of the private security litigation reform act of 1995. Forward looking statements use words such as will believe expect anticipate and similar phrases that denote future expectation 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 strategy implementation timing, profit enhancements impact from acquisitions and other matters.

Dushyant Sharma: Almost half of all incremental contribution profit dollars drop to the adjusted EBITDA line.

Dushyant Sharma: We are very pleased with this performance, given we also grew top line over 30%. As a result of our growth and operating leverage based on the rule of 40, we were well ahead at 58. As you may recall, we are similar performance using this high-level metric last quarter. We exited the second quarter with strong bookings, backlog, and pipeline. And as a result, feel confident about the remainder of the year and our long-term outlook for success.

Dushyant Sharma: We are very pleased with this performance.

Dushyant Sharma: Given.

Dushyant Sharma: We also group top line over 30%.

Dushyant Sharma: As a result of our growth and operating leverage.

Dushyant Sharma: As you may recall, we had similar performance using this high-level metric last quarter. We exited the second quarter with strong bookings, backlog, and pipeline. And, as a result, we feel confident about the remainder of the year and have a long-term outlook for success.

Dushyant Sharma: Based on the rule of 40, we were well ahead at 58.

Dushyant Sharma: As you may recall, we are similar performance using this high level metric last quarter.

Dushyant Sharma: These forward looking statements speak as of today and we undertake no obligations to update them. The statements are subject to risk uncertainties and assumptions that may cause actual results to different materially from those platforms and such statements, including the risks and uncertainty set forth under the caption special note regarding forward looking statements and risk factors in our annual report on form 10k. The year ended December 31st, 2023 and our subsequent quarterly reports on form 10Q, including our form 10Q for the quarter ended June 30th, 2024, which we expect to file with the SEC shortly and elsewhere and our other filings of the SEC.

Dushyant Sharma: We exited the second quarter with strong bookings, backlog, and pipeline.

Dushyant Sharma: And as a result, feel confident about the remainder of the year and have a long-term outlook for success.

Dushyant Sharma: It's quite remarkable that we have built a durable business where we have been able to consistently deliver solid growth, gain market share, expand our total addressable market, and enhance our Innovation Framework while at the same time expanding profitability with our strong operating leverage. Let me now talk about our operational performance for the quarter. Demand remains strong for our differentiated platform and our proprietary IP and ecosystem. Clients are looking for a robust platform that allows them to continue to improve their customer engagement and experience while lowering their cost to serve by replacing unwieldy processes with Paymentus' advanced platform. Thus, with our advanced technology platform, we offer our clients the ability to be more effective with less cost. In addition,

Dushyant Sharma: is quite remarkable that we are built a durable business where we have been able to consistently deliver solid growth gain market share.

Dushyant Sharma: Expand our total addressable market and enhanceable innovation framework while at the same time Expand profitability with our strong operating leverage.

Dushyant Sharma: Let me now talk about our operational performance for the quarter. Demand remains strong for our differentiated platform and our proprietary IP&Ecosystem. Clients are looking for a robust platform that allows them to continue to improve their customer engagement and experience while lowering their cost to serve by replacing unwieldy processes with payment uses advanced platform. So, with our advanced technology platform, we offer our clients the ability to be more effective with less costs. In addition, as you've discussed in the past, we have a transaction-based pricing model designed to mitigate the challenges the broader enterprise software market faces in times like these.

Speaker Change: Let me now talk about our operational performance for the quarter.

Dushyant Sharma: We encourage you to review these detailed forward looking statement, safe harbor and risk factor disclosure. In addition, during today's call, we will discuss certain non-gap financial measures, specifically contribution profit, adjusted growth profit, non-gap operating expenses, adjusted evita, adjusted evita margin, and non-gap net income and earnings per share. These non-gap 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 organization from gap results.

Dushyant Sharma: Demand remains strong.

Dushyant Sharma: for our differentiated platform and our proprietary IPN ecosystem.

Dushyant Sharma: Clients are looking for a robust platform that allows them to continue to improve the customer engagement and experience.

Dushyant Sharma: While lowering their cost to serve by replacing unreliable processes with payment this is advanced platform.

Dushyant Sharma: So, with our advanced technology platform, we offer our clients the ability to be more effective with left costs.

Dushyant Sharma: We encourage you to review additional disclosures regarding these non-gap measures, including recommendations of the most directly comparable gap measures in our earnings press release issue today and the supplemental slides for this web test, each available on the investor relations page of our website.

Dushyant Sharma: As we have discussed in the past, we have a transaction-based pricing model designed to mitigate the challenges the broader enterprise software market faces in times like these. Our platform is generally priced on a per transaction basis, where we get paid when our clients get paid, or when a client initiates a payout transaction. This approach has served us well, both in good times and in Not-So-Great Times. In addition...

Dushyant Sharma: in a vision.

Dushyant Sharma: As we have discussed in the past, we have a transaction based pricing model.

Dushyant Sharma: designed to mitigate the challenges the broader enterprise software market faces in times like these.

Dushyant Sharma: Our platform is generally priced on a per transaction basis, where we get paid when our clients get paid or when a client initiates a payout transaction. This approaches service well both in good times and in not so great times. In addition, this model provides clients a great partner in Paymentus where the interests of both parties are directly aligned. As a result, we are seeing continued momentum primarily based on the strength of our innovative technology platform, pricing approach, and a profitable, high-growth public company profile, all of which are very attractive to enterprise clients across all verticals, including those clients that have traditionally not outsourced to any vendor.

Dushyant Sharma: With that, I'd like to turn a call over to Dushan Sharma our founder and CEO to shot. Thanks David. In the second quarter, we saw record revenue, contribution profit, and adjusted evita, all exceeding our expectations. Our revenue was 197.4 million dollars up 32.6% year over year, and our adjusted evita was 22.5 million dollars up 58.6% year over year. These results were once again ahead of a long-term target of 20% revenue growth and 20% to 30% adjusted EBITDA growth.

Dushyant Sharma: Our platform is generally priced on a per transaction basis where we get paid when our clients get paid or when a client initiates a payout transaction.

Dushyant Sharma: This approach has served us well both in good times.

Dushyant Sharma: This model provides clients with a great partner in Paymentus, where the interests of both parties are directly aligned. As a result, we are seeing continued momentum, primarily based on the strength of our innovative technology platform, pricing approach, and a profitable, high-growth public company profile, all of which are very attractive to enterprise clients across all verticals, including those clients that have traditionally not outsourced to any vendor. This quarter, we also delivered another period of strong bookings.

Dushyant Sharma: and in not-so-great times.

Dushyant Sharma: In addition,

Dushyant Sharma: This model provides clients a great partner in Paymentus where the interests of both parties are directly aligned.

Dushyant Sharma: As a result, we are seeing continued momentum, primarily based on the strength of our innovative technology platform, pricing approach, and a profitable, high-growth public company profile, all of which are very attractive to enterprise clients across all verticals.

Dushyant Sharma: Contribution profit for the quarter was $76.5 million, which was up 28.3% year over year. Almost half of all incremental contribution profit dollars dropped to the adjusted EBITDA line. We are very pleased with this performance given we also grew top line over 30%. As a result of our growth and operating leverage based on the rule of 40, we were well ahead at 58. As you may recall, we are similar performance using this high-level metric last quarter. We exited the second quarter with strong bookings, backlog and pipeline. And as a result, feel confident about the remainder of the year and our long-term outlook for success.

Dushyant Sharma: Including those clients that have traditionally not outsource to any vendor.

Dushyant Sharma: This quarter, we also delivered another period of strong bookings. When combined with our success in the first quarter, we are significantly ahead of where we were this time last year and well positioned for the remainder of 2024.

Dushyant Sharma: When combined with our success in the first quarter, we are significantly ahead of where we were this time last year and well positioned for the remainder of 2024. Based on the feedback we have received from investors, we wanted to provide a broad and diverse list of verticals represented by clients we signed this quarter. We have signed clients in government services, utilities, banks, credit unions, insurance, telecommunications, property management, health care, and education.

Dushyant Sharma: This quarter we also delivered another period of strong bookings.

Dushyant Sharma: When combined with our success in first quarter, we are significantly ahead of where we were this time last year, and well positioned for the remainder of 2024.

Dushyant Sharma: Based on the feedback we have received from investors, we want to provide a broad and diverse list of verticals represented by clients we booked this quarter. We have signed clients in government services, utilities, banks, credit unions, insurance, telecommunications, property management, healthcare, and education. Many of the clients in the verticals identified above are large enterprise clients, and much like our bookings, we also continue to add channel partners across various verticals. During the quarter, we signed partnerships in insurance, healthcare, telecommunications, and government verticals. We believe these new partnerships, combined with our extensive partnership ecosystem, improve our sales efficiency and continue to act over momentum towards growing market share in an industry that already has a huge total addressable market.

Speaker Change: Based on the feedback you have received from investors, we want to provide a broad and diverse list of verticals represented by clients we booked this quarter.

Speaker Change: We have signed clients in government services, utilities, banks, credit unions, insurance, telecommunications, property management, healthcare, and education.

Dushyant Sharma: Many of the clients in the verticals identified above are large enterprise clients, and much like our bookings, we also continue to add channel partners across various verticals. During the quarter, we signed partnerships in insurance, healthcare, telecommunications, and government verticals. We believe these new partnerships, combined with our extensive partnership ecosystem, improve our sales efficiency and continue to add to our momentum towards growing market share in an industry that already has a huge total addressable market. Now on to onboarding activities.

Speaker Change: Many of the clients in the verticals identified above are large enterprise clients.

Dushyant Sharma: It's quite remarkable that we have built a durable business where we have been able to consistently deliver solid growth gain market share, expand our total addressable market and enhance our innovation framework while at the same time expand profitability with our strong operating leverage. Let me now talk about our operational performance for the quarter. Demand remains strong for our differentiated platform and our proprietary IP&Ecosystem. Clients are looking for a robust platform that allows them to continue to improve their customer engagement and experience while lowering their cost to serve by replacing unwieldy processes with paymentuses advanced platform.

Speaker Change: and much like our bookings

Speaker Change: We also continue to add channel partners across various verticals.

Speaker Change: During the quarter, we signed partnerships in insurance, healthcare, telecommunications, and government verticals.

Speaker Change: We believe these new partnerships combine with our extensive partnership ecosystem, improve our sales efficiency.

Speaker Change: and continue to act to our momentum towards going market share in an industry that already has a huge total of decibel market.

Dushyant Sharma: Now on to onboarding activities, our onboarding velocity also continues to improve, particularly our ability to onboard large enterprise-level clients and corresponding complex and sophisticated workflows. During the quarter, we are thrilled to have onboarded a substantial number of diverse clients. We are able to do this because our platform allows us to offer services to all verticals, yet another facet of the strength and flexibility of our technology. This quarter, we onboarded clients in verticals including government services, transportation and logistics, utilities, telecommunications, insurance, healthcare, banks and credit unions. Many of these clients for large implementations, we are pleased with our improving implementation efficiencies and with the year-over-year growth of client onboarding, both in terms of number of clients and onboarded revenues that we generated.

Dushyant Sharma: Our onboarding velocity also continues to improve, particularly our ability to onboard large enterprise-level clients and corresponding complex and sophisticated workflows. During the quarter, we are thrilled to have onboarded a substantial number of diverse clients. We are able to do this because our platform allows us to offer services to all verticals, yet another facet of the strength and flexibility of our technology. This quarter, we onboarded clients in verticals including government services, transportation, and logistics.

Speaker Change: Now on to onboarding activities.

Speaker Change: Our onboarding velocity also continues to improve.

Speaker Change: particularly our ability to onboard large enterprise level clients and corresponding complex and sophisticated workflows.

Dushyant Sharma: So with our advanced technology platform, we offer our clients the ability to be more effective with less costs. In addition, as you've discussed in the past, we have a transaction-based pricing model designed to mitigate the challenges the broader enterprise software market faces in times like these. Our platform is generally priced on a per transaction basis where we get paid when our clients get paid or when a client initiates a payout transaction.

Speaker Change: During the quarter, we are thrilled to have onboarded a substantial number of diverse clients.

Speaker Change: We are able to do this because of our platform allows us to offer services to all verticals.

Speaker Change: Yet under the facet of the strength and flexibility of our technology.

Speaker Change: This quarter, we onboarded clients in verticals including government services, transportation and logistics.

Dushyant Sharma: Utilities, Telecommunications, Insurance, Healthcare, Banks, and Credit Unions. Many of these clients require large implementations. We are pleased with our improving implementation efficiencies and with the year-over-year growth of client onboarding, both in terms of the number of clients and the Onboarded Revenues that we generated. With that, let me turn it over to Sanjay for detailed remarks on financial performance. Thanks, Dushyant, and thank you all for joining us today.

Speaker Change: Utilities, telecommunications, insurance, healthcare, banks, and credit unions.

Dushyant Sharma: This approaches service well both in good times and in not so great times. In addition, this model provides clients a great partner in paymentus where the interests of both parties are directly aligned. As a result, we are seeing continued momentum primarily based on the strength of our innovative technology platform, pricing approach and a profitable, high growth public company profile, all of which are very attractive to enterprise clients across all verticals, including those clients that have traditionally not outsourced to any vendor.

Speaker Change: Many of these clients for large implementations.

Speaker Change: We are pleased with our improving implementation efficiencies and with the year-over-year growth of client onboarding, both in terms of number of clients.

Sanjay Kalra: With that, let me turn it over to Sanjay for detailed remarks on financial performance. Thanks a shot, and thank you all for joining us today. Before I discuss our quarterly results and outlook, I'd like to remind everyone that the financial results I'd be referring to include non-GAAP financial measures. As David mentioned earlier, our Q2 press release and earnings presentation includes reconciliation of the non-GAAP financial measures discussed on this call to the corresponding GAAP measures. Both of these are available on our website.

Speaker Change: and on boarded revenues that we generated.

Speaker Change: With that let me turn it over to Sanjay for detailed remarks on financial performance.

Sanjay Kalra: Before I discuss our quarterly results and outlook, I'd like to remind everyone that the financial results I'd be referring to include non-GAAP financial measures. As David mentioned earlier, our Q2 press release and earnings presentation include 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: Thanks, Vishal, and thank you all for joining us today.

Sanjay: Before I discuss our quarterly results and outlook, I'd like to remind everyone that the financial results I'd be referring to include non-GAAP financial measures.

Sanjay: As David mentioned earlier, our Q2 press release and earnings presentation includes reconciliation of the non-gap financial measures discussed on this call to the corresponding gap measures.

Dushyant Sharma: This quarter, we also delivered another period of strong bookings. When combined with our success in first quarter, we are significantly ahead of where we were this time last year and well positioned for the remainder of 2024.

Sanjay Kalra: Turning to slide five for the second quarter of 2024, we delivered another quarter of financial results that exceeded the top end of our guidance range. We think our ability to produce such results demonstrates the overall strength of our business. Our second quarter results include revenue of 197.4 million, up 32.6% year over year. Contribution profit of 76.5 million, up 28.3% year over year. And I just see you be now of 22.5 million, up 58.6% year over year. We continue to experience strong customer activity and demand in the second quarter. This drove strong bookings, which allowed us to exit the quarter with a significant backlog.

Sanjay Kalra: Turning to slide five for the second quarter of 2024, we delivered another quarter of financial results that exceeded the top end of our guidance range. We think our ability to produce such results demonstrates the overall strength of our business. Our second quarter results included revenue of $197.4 million, up 32.6% year-over-year. Contribution profit of 76.5 million, up 28.3% year over year, and a GDP now of $22.5 million, up 58.6% year-over-year. We continue to experience strong customer activity and demand in the second quarter. This drove strong bookings, which allowed us to exit the quarter with a significant backlog.

David Hanover: Both of these are available on our website.

David Hanover: Turning to slide 5, for the second quarter of 2024.

Dushyant Sharma: Based on the feedback we have received from investors, we want to provide a broad and diverse list of verticals represented by clients we booked this quarter. We have signed clients in government services, utilities, banks, credit unions, insurance, telecommunications, property management, healthcare and education. Many of the clients in the verticals identified above are large enterprise clients and much like our bookings, we also continue to add channel partners across various verticals. During the quarter, we signed partnerships and insurance, healthcare, telecommunications and government verticals. We believe these new partnerships combined with our extensive partnership ecosystem improve our sales efficiency and continue to act over momentum towards growing market share in an industry that already has a huge total addressable market.

David Hanover: We delivered another quarter of financial results that exceeded the top end of our guidance range.

David Hanover: We think our ability to produce such results demonstrates the overall strength of our business.

Speaker Change: Our second quarter results included revenue of $197.4 million, up 32.6% year-over-year. Contribution profit of $76.5 million, up 28.3% year-over-year.

David Hanover: And a GDP now of $22.5 million, up 58.6% year-over-year.

David Hanover: We continue to experience strong customer activity and demand in the second quarter.

David Hanover: Dushyant Sharma, Sanjay Kalra, Sanjay Kalra, Sanjay Kalra, Sanjay Kalra, Sanjay Kalra, Sanjay

Sanjay Kalra: Based on our strong quarterly performance, the positive business trends Dushyant just mentioned, and our expectations for the remainder of 2024. We are raising our full year 2024 revenue, contribution profit, and electricity being the guidance, which I will discuss shortly.

Sanjay Kalra: Based on our strong quarterly performance, the positive business trends Dushyant just mentioned, and our expectations for the remainder of 2024, we are raising our full-year 2024 revenue, contribution profit, and adjusted EBITDA guidance, which I will discuss shortly. Now, let's review our second quarter financials in more detail. The number of transactions Paymentus processed grew to $140.4 million in the second quarter, up 28.2% year over year.

David Hanover: Based on our strong quarterly performance, the positive business trends Dushyant just mentioned, and our expectations for the remainder of 2024.

Speaker Change: We are raising our full year 2024 revenue, contribution profit, and adjusted EBITDA guidance, which I will discuss shortly.

Sanjay Kalra: Now let's review our second quarter financials in more detail. The number of transactions paymentist process grew 240.4 million in the second quarter, up 28.2% year over year. As mentioned, Q2 revenue was 197.4 million, up 32.6% year over year. This growth, which was ahead of our original expectations, was driven by increased transactions from all our revenue drivers, which includes same store sales from existing billers, the launch of new billers, and higher activity in our instant payment network or IBM business. Our average price for transaction increased from $1.36 to $1.41 year over year. Primarily, due to updated pricing strategies that were adopted and accepted by our existing and new customers, which we believe reflects the exceptional value and customer service we provide to our billers and the trust they place in us.

Sanjay Kalra: As mentioned, Q2 revenue was $197.4 million, up 32.6% year-over-year. This growth, which was ahead of our original expectations, was driven by increased transactions from all of our revenue drivers, which includes increased same-store sales from existing builders. The launch of new billers and higher activity in our instant payment network, or IBM. Additionally, our average price per transaction increased from $1.36 to $1.41 year over year, primarily due to updated pricing strategies that were adopted and accepted by our existing and new customers, which we believe reflects the exceptional value and customer service we provide to our billers and the trust they place in us.

Dushyant Sharma: Now on to onboarding activities, our onboarding velocity also continues to improve, particularly our ability to onboard large enterprise level clients and corresponding complex and sophisticated workflows. During the quarter, we are thrilled to have onboarded a substantial number of diverse clients. We are able to do this because our platform allows us to offer services to all verticals, yet another facet of the strength and flexibility of our technology. This quarter, we onboarded clients in verticals including government services, transportation and logistics, utilities, telecommunications, insurance, healthcare, banks and credit unions.

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

Dushyant Sharma: The number of transactions payment process grew to 140.4 million in the second quarter, up to 28.2% year over year.

Speaker Change: As mentioned, Q-2 revenue was $1.97.4 million, up to $2.6 per year over here. This growth, which was a heck of old original expectations.

Speaker Change: was driven by increased transactions from all of our revenue drivers.

Speaker Change: Vision includes same stores sales from existing billers, the launch of new billers and higher activity in our instant payment network or IBM business.

Speaker Change: Our average price protection increased from $1.36 to $1.41 year over year.

Dushyant Sharma: Many of these clients for large implementations, we are pleased with our improving implementation efficiencies and with the year over year growth of client onboarding both in terms of number of clients and onboarded revenues that we generated.

Speaker Change: primarily due to updated pricing strategies that were adopted and accepted by our existing and new customers.

Speaker Change: which we believe reflects the exceptional value and customer service. We provide to our winners and the trust they place in us.

Sanjay Kalra: Second quarter, 2024 contribution profit increased to 76.5 million, up 28.3% year over year. This contribution profit increase was also higher than expected and reflects the increase in transactions from existing billers, the launch of new billers, and the mix of billers launched. Contribution margin was 38.7% for the second quarter, compared to 40% in the prior year period. As we continue to add large, higher volume enterprise billers to our customer base. Contribution profit per transaction for the quarter was 54%, which was flat compared to the prior year period. During the second quarter, we saw transaction growth was in line with contribution profit growth.

Sanjay Kalra: With that, let me turn it over to Sanjay for detailed remarks on financial performance. Thanks a shot and thank you all for joining us today. Before I discuss our quarterly results and outlook, I'd like to remind everyone that the financial results I'd be referring to include non-gap financial measures. As David mentioned earlier, our Q2 press release and earnings presentation includes reconciliation of the non-gap financial measures discussed on this call to be corresponding gap measures. Both of these are available on our website.

Sanjay Kalra: Second quarter 2024 contribution profit increased to 76.5 million, up 28.3% year-over-year. This contribution profit increase was also higher than expected and reflects the increase in transactions from existing billers, the launch of new billers, and the mix of new billers launched. Contribution margin was 38.7% for the second quarter, compared to 40% in the prior year period, as we continue to add large, higher volume enterprise billers to our customer base. Contribution profit per transaction for the quarter was $0.54, which was flat compared to the prior year period.

Speaker Change: Second quarter 2024 contribution profit increased to $76.5 million, up 28.3% year-over-year.

Speaker Change: This contribution profit increase was also higher than expected and reflects the increase in transactions from existing billers, the launch of new billers, and the mix of billers launched.

Speaker Change: Contribution margin was 38.7% for the second quarter compared to 40% in the prior year period. As we continue to add large, higher volume enterprise billers to our customer base.

Sanjay Kalra: Turning to slide five for the second quarter of 2024, we delivered another quarter of financial results that exceeded the top end of our guidance range. We think our ability to produce such results demonstrates the overall strength of our business. Our second quarter results include revenue of 197.4 million up 32.6% year over year. Contribution profit of 76.5 million up 28.3% year over year. And I just see you be now of 22.5 million up 58.6% year over year.

Speaker Change: Contribution profit per transaction for the quarter was 54 cents which was flat compared to the prior year period.

Sanjay Kalra: During the second quarter, we saw transaction growth was in line with contribution profit growth in Q1. We saw that transaction growth was in line with revenue growth. As we have said in previous earnings calls, revenue and Contribution Profit growth rates may vary quarter to quarter. Also, as we've noted in the past. Variables that are outside our control, such as an increase in the average payment amount or changes in the payment mix, can substantially affect contribution profit on a quarterly basis. And therefore, we treat this as a secondary metric.

Sanjay Kalra: In Q1, we saw their transaction growth was in line with their revenue growth. As we have said in the prior running calls, revenue and contribution profit growth rates may vary quarter to quarter. Also, as we have noted in the past, variables that are outside our control, such as an increase in the average demand amount or changes in the payment mix, can substantially affect contribution profit on a quarterly basis. Therefore, we treat this as a secondary metric. While our growth revenue and adjusted EBDA remain primary metrics and focus areas on how we drive our business strategies.

Speaker Change: During the second quarter, we saw transaction growth was in line with contribution profit growth.

Speaker Change: In Q1, we saw that transaction growth was in line with the revenue growth.

Speaker Change: As we have said in the prior Earnings Goals,

Speaker Change: Revenue and contribution profit growth rates may vary quarter to quarter.

Speaker Change: Also, as we've noted in the past, variables that are outside our control, such as increase in the average payment amount or changes in the payment mix, can substantially affect contribution profit on a quarterly basis.

Sanjay Kalra: We continue to experience strong customer activity and demand in the second quarter. This drove strong bookings, which allowed us to exit the quarter with a significant backlog. Based on our strong quarterly performance, the positive business trends Dushyant just mentioned and our expectations for the remainder of 2024.

Sanjay Kalra: While our gross revenue and adjusted EBITDA remain the primary matrices and focus areas on how we drive our business strategy, second quarter adjusted gross profit was $64 million, up 28.1% year-over-year. Second quarter non-GAAP operating expenses increased to $44.1 million, 16.7% year-over-year.

Speaker Change: And therefore, we treat this as a secondary metric.

Speaker Change: By our gross revenue and electricity be done, I mean primary metrics and focus the areas on how we dry over business strategies.

Sanjay Kalra: Second quarter, adjusted growth profit was 64 million, up 28.1% year-over-year. Second quarter, non-GAAP operating expenses increased to 44.1 million. Up 16.7% year-over-year. The increase was expected, and primarily due to higher sales and marketing expenses, mainly driven by increased hiring, increased activity for both market events and ratios, and increased agency fee for business from resellers. This expense increase was modestly ahead of our expectations, reflecting certain non-recurring marketing events. Second quarter non-GAAP net income was 14.7 million or 12 cents per share, compared to non-GAAP net income of 10.2 million or 8 cents per share in the prior year period.

Sanjay Kalra: We are raising our full year 2024 revenue, contribution profit, and electricity being the guidance, which I will discuss shortly. Now let's review our second quarter financials in more detail. The number of transactions paymentist process grew 240.4 million in the second quarter, up 28.2% year over year. As mentioned, Q2 revenue was 197.4 million, up 32.6% year over year. This growth, which was ahead of our original expectations, was driven by increased transactions from all our revenue drivers, which includes same store sales from existing billers, the launch of new billers, and higher activity in our instant payment network or IBM business.

Speaker Change: Second quarter adjusted gross profit was $64 million up 28.1% year-over-year.

Speaker Change: Second quarter non-GAAP operating expenses increased to $44.1 million, up 16.7% year-over-year.

Sanjay Kalra: The increase was expected and primarily due to higher sales and marketing expenses mainly driven by increased hiring, increased activity for going to market events and trade shows, and increased agency fees for business from resellers. This expense increase was modestly ahead of our expectations, reflecting certain non-recurring marketing events. Second quarter non-GAAP net income was $14.7 million, or $0.12 per share, compared to non-GAAP net income of $10.2 million, or $0.08 per share, in the prior year period.

Speaker Change: The increase was expected and primarily due to higher sales and marketing expenses mainly driven by increased hiring, increased activity for go-to-market events and trade shows, and increased agency fee for business from resellers.

Speaker Change: This expense increase was modestly ahead of our expectations, reflecting certain non-recurring marketing events.

Speaker Change: Second quarter non-GAAP net income was $14.7 million or $0.12 per share compared to non-GAAP net income of $10.2 million or $0.08 per share in the prior year period.

Sanjay Kalra: Second quarter adjusted EBDA was 22.5 million, up 58.6% compared to 14.2 million in the prior year. Adjust EBDA also represented 29.5% of contribution profit for the quarter, compared to 23.8% in the prior year. This strong adjust EBDA performance was due to the same combination of positive factors I talked about earlier, all of which came together in the quarter. We believe the stronger adjust EBDA margin demonstrates the inherent operating leverage if we have in the business and our proven ability to adapt to changing market conditions while continuing to grow. Interest income from our bank deposits was 2.2 million during the second quarter, compared to 1.7 million in the prior year period.

Sanjay Kalra: Second quarter adjusted EBDA was $22.5 million, 58.6% compared to 14.2 million in the prior year. Adjusted EBITDA also represented 29.5% of contribution profit for the quarter, compared to 23.8% in the prior year. This strong Agility Beta performance was due to the same combination of positive factors I talked about earlier, all of which came together in court. We believe the stronger adjusted EBITDA margin demonstrates the inherent operating leverage we have in the business and our proven ability to adapt to changing market conditions while continuing to grow. Interest income from our bank deposits was $2.2 million during the second quarter, compared to $1.7 million in the prior year period.

Sanjay Kalra: Our average price for transaction increased from $1.36 to $1.41 year over year. Primarily, due to updated pricing strategies that were adopted and accepted by our existing and new customers, which we believe reflects the exceptional value and customer service we provide to our billers and the trust they place in us. Second quarter, 2024 contribution profit increased to 76.5 million, up 28.3% year over year. This contribution profit increase was also higher than expected and reflects the increase in transactions from existing billers, the launch of new billers, and the mix of billers launched.

Speaker Change: Second quarter adjusted EBITDA was $22.5 million.

Speaker Change: of 58.6% compared to 14.2 million in the prior year.

Speaker Change: Adjusted EBITDA also represented 29.5% of contribution profit for the quarter, compared to 23.8% in the prior year.

Speaker Change: District, District, District of Performance, was due to the same combination of positive factors I talked about earlier, all of which came together in the quarter.

Speaker Change: We believe the stronger adjusted EBITDA margin demonstrates the inherent operating leverage we have in the business and our proven ability to adapt to changing market conditions while continuing to grow.

Sanjay Kalra: Contribution margin was 38.7% for the second quarter, compared to 40% in the prior year period. As we continue to add large, higher volume enterprise billers to our customer base. Contribution profit per transaction for the quarter was 54% which was flat compared to the prior year period. During the second quarter, we saw transaction growth was in line with contribution profit growth. In Q1, we saw their transaction growth was in line with their revenue growth.

Speaker Change: Interest income from our bank deposits was 2.2 million during the second quarter compared to 1.7 million in the prior year period. Improved year-over-year as a result of increased cash balance and effective cash management.

Sanjay Kalra: Improved year-over-year as a result of increased cash balance and effective cash management. Related to overperformance. We once again exceeded the rule of 40 for the quarter, coming in at approximately 58. Similar to the prior quarter. This is now our fifth consecutive quarter exceeding the rule of 40.

Sanjay Kalra: Improved year over year as a result of increased cash balance and effective cash management. Related to overperformance, we once again exceeded the rule of 40 for the quarter, coming in at approximately 58, similar to the prior quarter. This is now our fifth consecutive quarter exceeding the Rule of 40.

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

Speaker Change: Simulator to the Prime Border.

Speaker Change: This is now our fifth consecutive quarter exceeding the rule of 40.

Sanjay Kalra: Now I discuss our balance sheet and liquidity position on slide 6. We ended the second quarter 2024 with total cash of 192.9 million, compared to 184.2 million at the end of the first quarter 2024. The 8.7 million increase is primarily comprised of 18 million of cash generated from operations. Offset by 9.3 million used in investing activities primarily for capitalized software. The company does not have any debt. The free cash flow generated during the quarter was 8.8 million dollars. Our days sales outstanding at the end of second quarter was 42 days, compared to the prior quarter of 41 days.

Sanjay Kalra: Now I'll discuss our balance sheet and liquidity position on slide 6. We ended the second quarter 2024 with total cash of $192.9 million compared to $184.2 million at the end of the first quarter 2024. The $8.7 million increase is primarily comprised of $18 million of cash generated from operations, offset by $9.3 million used in investing activities primarily for capitalized software. The company does not have any debt.

Sanjay Kalra: As we have said in the prior running calls, revenue and contribution profit growth rates may vary quarter to quarter. Also, as we have noted in the past, variables that are outside over control such as increase in the average demand amount or changes in the payment mix can substantially affect contribution profit on a quarterly basis. Therefore, we treat this as a secondary metric.

Speaker Change: Now I discuss our balance sheet and liquidity position on flight sex.

Speaker Change: We ended the second quarter 2024, the total cash of 192.9 million, compared to 184.2 million at the end of first quarter 2024.

Speaker Change: The $8.7 million increase is primarily comprised of $18 million of cash generated from operations.

Sanjay Kalra: While our growth revenue and adjusted EBDA remain primary metrics and focus areas on how we drive our business strategies. Second quarter, adjusted growth profit was 64 million up 28.1% year-over-year. Second quarter, non-gap operating expenses increased to 44.1 million. Up 16.7% year-over-year. The increase was expected, and primarily due to higher sales and marketing expenses, mainly driven by increased hiring, increased activity for both market events and ratios, and increased agency fee for business from resellers.

Speaker Change: Offset by 9.3 million used in investing activities primarily for capitalized software.

Sanjay Kalra: The free cash flow generated during the quarter was $8.8 million. Our day's sales outstanding at the end of the second quarter was 42 days, comparable to the prior quarter of 41 days. Working capital at the end of the second quarter was approximately $229.6 million, an increase of approximately $12.6 million from the end of the first quarter. We had 127.3 million diluted shares outstanding during the second quarter, similar to 126.9 million diluted shares outstanding during the first quarter. Now I turn to our non-GAAP guidance for the third quarter and for full year 2024, on slide 7. Before discussing the items,

Speaker Change: The company does not have any debt.

Speaker Change: The free cash flow generated during the quarter was 8.8 million dollars.

Speaker Change: Our day's sales outstanding at the end of second quarter was 42 days, comparable to the prior quarter of 41 days.

Sanjay Kalra: Working capital at the end of the second quarter was approximately 229.6 million, and increase of approximately 12.6 million from the end of the first quarter. We had 127.3 million diluted shares outstanding during the second quarter, similar to 126.9 million diluted shares outstanding during the first quarter.

Speaker Change: Working capital at the end of second quarter was approximately $229.6 million, an increase of approximately $12.6 million from the end of the first quarter.

Speaker Change: We had 127.3 million diluted shares outstanding during the second quarter, similar to 126.9 million diluted shares outstanding during the first quarter.

Sanjay Kalra: This expense increase was modestly ahead of our expectations, reflecting certain non-recurring marketing events. Second quarter non-gab net income was 14.7 million or 12 cents per share, compared to non-gab net income of 10.2 million or 8 cents per share in the prior year period. Second quarter adjusted EBDA was 22.5 million, up 58.6% compared to 14.2 million in the prior year. Adjust EBDA also represented 29.5% of contribution profit for the quarter, compared to 23.8% in the prior year.

Sanjay Kalra: Now I turn to our non-GAAP guidance for the third quarter and for fully at 2024 on slide 7. Before discussing guidance, I want to mention that we are continuing to follow the same prudent approach to guidance that we have followed last year and this year. For the third quarter of 2024, we expect revenues to be in the range of 188 to 193 million, representing 25% year-over-year growth at the midpoint and 26.6% at the midpoint. This growth rate range is an improvement from the prior year's third quarter growth rate of 18.9%. Contribution profit to range from 71 million to 74 million, which is 17.9% year-over-year growth at the midpoint and 20.3% at the high end.

Speaker Change: Now I turn to our non-GAAP guidance for the third quarter and for full year 2024 on slide 7.

Sanjay Kalra: I want to mention that we are continuing to follow the same prudent approach to guidance that we followed last year and this year for the third quarter of 2024. We expect revenues to be in the range of $188 to $193 million, representing 25% year-over-year growth at the midpoint and 26.6% at the high end. This growth rate range is an improvement from the prior year's third quarter growth rate of 18.9%. Contribution profit is expected to range from $71 million to $74 million, which is 17.9% year-over-year growth at the midpoint and 20.3% at the high end, and HSDBDA of $18 million to $20 million, representing a growth of 22.6% year over year at the midpoint and 29% at the high end. This represents a 26.2% margin at the midpoint and a 27% margin at the high end.

Speaker Change: Before discussing guidance, I want to mention that we are continuing to follow the same prudent approach to guidance that we have followed last year and this year.

Speaker Change: for the third school order 2024.

Speaker Change: We expect revenues to be in the range of 188 to 193 million representing 25% year-over-year growth at the midpoint.

Sanjay Kalra: This strong adjust EBDA performance was due to the same combination of positive factors I talked about earlier, all of which came together in the quarter. We believe the stronger adjust EBDA margin demonstrates the inherent operating leverage if we have in the business and our proven ability to adapt to changing market conditions while continuing to grow. Interest income from our bank deposits was 2.2 million during the second quarter, compared to 1.7 million in the prior year period.

Speaker Change: and 26.6% at the high end.

Speaker Change: This growth rate range is an improvement from the prior year's third quarter growth rate of 18.9 percent.

Speaker Change: Contribution profit to range from $71 million to $74 million, which is 17.9% year-over-year growth at the midpoint and 20.3% at the high end.

Sanjay Kalra: And just to be the of 18 million to 20 million dollars, representing a growth of 22.6% year over year at the midpoint and 29% at the high end. This represents a 26.2% margin at midpoint and 27% margin at the high end. This adjusted to be the margin is an improvement from the prior year's third quarter adjusted to be the margin of 25.3%. Given our improving backlog and implementation base, we feel even better about the business overall in the third quarter than we did in the second quarter. Along with our guidance, I also want to provide further insight related to our outlook.

Speaker Change: and the Gypsy Debeda of $18 million to $20 million.

Speaker Change: Representing a growth of 22.6% year-over-year at the midpoint.

Speaker Change: and 29% at the high end.

Speaker Change: This represents a 26.2% margin at midpoint and 27% margin at the high end.

Sanjay Kalra: This adjusted EBITDA margin is an improvement from the prior year's third quarter adjusted EBITDA margin of 25.3%. Given our improving backlog and implementation base, we feel even better about the business overall in the third quarter than we did in the second quarter, along with other guidance.

Speaker Change: This Adjusted EV Damage and is an improvement from the prior year third quarter Adjusted EV Damage in of 25.3%.

Speaker Change: given our improving backlog and implementation base.

Sanjay Kalra: Now I discuss our balance sheet and liquidity position on slide 6. We ended the second quarter 2024 with total cash of 192.9 million, compared to 184.2 million at the end of first quarter 2024. The 8.7 million increase is primarily comprised of 18 million of cash generated from operations. Offset by 9.3 million used in investing activities primarily for capitalized software. The company does not have any debt. The free cash flow generated during the quarter was 8.8 million dollars.

Speaker Change: We feel even better about the business overall in the third quarter than we did in the second quarter.

Sanjay Kalra: I also want to provide further insight related to our outlook for contribution profit growth rates and adjusted EBITDA margin. As our business grows, we are receiving greater inbound interest from larger enterprises. Not unexpectedly, these large customers often request volume discounts, which we are open to where the deal economics support it. In addition, our tremendous operating leverage allows us to attract and book these large customers. Said differently, volume discounts for large customers are typically more than offset by strong incremental adjustability. This increases efficiency as our onboarding time per biller is declining, while average customer size is simultaneously increasing.

Speaker Change: Along with our guidance, I also want to provide further insight related to our outlook for contribution in profit, growth rates, and adjusted to be the margin.

Sanjay Kalra: For contribution, profit, growth rates, and adjusted to be the margin. As of our business growth, we are receiving greater amount interest from larger enterprises. Not unexpectedly, these large customers often request volume discounts, which we are open to where the deal economics support. In addition, our tremendous operating leverage allows us to attract and book these large customers. Said differently, volume discounts for large customers are typically more than offset by strong incremental adjusted to be done. This increases our efficiency as our embolding time per billar is declining, while average customer size is simultaneously increasing. Furthermore, we have the ability to re-calibrate off-expanding relative to contribution profit in order to reach a desired adjusted EBDA.

Speaker Change: As our business grows, we are receiving greater inbound interest from larger enterprises.

Speaker Change: Not unexpectedly, these large customers often request volume discounts.

Speaker Change: which we are open to where the deal economics supported.

Speaker Change: In addition, our tremendous operating leverings allow us to attract and book these large customers.

Sanjay Kalra: Our days sales outstanding at the end of second quarter was 42 days, compared to the prior quarter of 41 days. Working capital at the end of second quarter was approximately 229.6 million, and increase of approximately 12.6 million from the end of the first quarter. We had 127.3 million diluted shares outstanding during the second quarter, similar to 126.9 million diluted shares outstanding during the first quarter.

Speaker Change: Said differently, volume discounts for large customers are typically more than offset by strong incremental adjusted EBITDA.

Speaker Change: This increases our efficiency as our onboarding time per biller is declining.

Speaker Change: while average customer size is simultaneously increasing.

Sanjay Kalra: Furthermore, we have the ability to recalibrate OPEX spending relative to contribution profit in order to reach a desired adjusted EBITDA. For reference, our incremental adjusted EBITDA margin for the second quarter of 2024 was 49.1%, relative to an adjusted EBITDA margin of 29.5%. Based on the results and progress we have already made in the first half of 2024 and our expectations for the remainder of the year, we now expect revenue in the range of $770 to $780 million, up 4% from the midpoint of our previous guidance.

Speaker Change: Furthermore, we have the ability to recalibrate OPEX spending relative to contribution profit in order to reach a desired adjusted EBITDA.

Sanjay Kalra: For reference, our incremental adjusted EBDA margin for the second quarter 2024 was 49.1% relative to the adjusted EBDA margin of 29.5%. Based on our results and progress, we have already made in the first half of 24 and our expectations for the remainder of the year. For the full year 2024, we now expect revenue in the range of 770 to 780 million, up 4% from the midpoint of our previous guidance. The updated guidance now represents 26.1% growth at the midpoint. and improvement from the prior year growth rate of 23.6%. Contribution profit in the range of 293 million to 298 million, up 3% at the midpoint versus previous guys.

Sanjay Kalra: Now I turn to our non-gab guidance for the third quarter and for fully at 2024 on slide 7. Before discussing guidance, I want to mention that we are continuing to follow the same prudent approach to guidance that we have followed last year and this year. For the third quarter of 2024, we expect revenues to be in the range of 188 to 193 million, representing 25% year over year growth at the midpoint and 26.6% at the midpoint.

Speaker Change: For reference, our incremental adjusted EBITDA margin for the second quarter 2024 was 49.1%, relative to the adjusted EBITDA margin of 29.5%.

Speaker Change: Based on our results and progress we have already made in the first half of 2024, and our expectations for the remainder of the year, for the full year 2024, we now expect revenue in the range of $770 to $780 million.

Sanjay Kalra: The updated guidance now represents 26.1% growth at the midpoint, an improvement from the prior year growth rate of 23.6%. Contribution profit is in the range of $293 million to $298 million, up 3% at the midpoint versus previous guidance. This updated guidance now represents 22.6% growth at the midpoint, and improvement from the prior year growth rate of 19.7%. Adjusted EBITDA is expected to range from $81 million to $85 million, representing an 11% increase at the midpoint versus our previous guidance. The updated guidance represents a 42.9% increase at the midpoint.

Speaker Change: Up 4% from the midpoint of our previous guidance.

Speaker Change: The updated guidance now represents 26.1% growth at the midpoint.

Sanjay Kalra: This growth rate range is an improvement from the prior year's third quarter growth rate of 18.9%. Contribution profit to range from 71 million to 74 million, which is 17.9% year over year growth at the midpoint and 20.3% at the high end. And just to be the of 18 million to 20 million dollars, representing a growth of 22.6% year over year at the midpoint and 29% at the high end. This represents a 26.2% margin at midpoint and 27% margin at the high end.

Speaker Change: An improvement from the prior year growth rate of 23.6%.

Speaker Change: Contribution profit in the range of $293 million to $298 million, up 3% at the midpoint versus previous guidance.

Sanjay Kalra: This updated guidance now represents 22.6% growth at the midpoint, and improvement from the prior year growth rate of 19.7%. I just said we need that to range from 81 million to 85 million, representing an 11% increase at the midpoint versus our previous guidance. The updated guidance represents a 42.9% increase at the midpoint. This represents a 28.1% margin on contribution profit at the midpoint, and improvement from 24.1% in the prior year. This annual guidance implies a rule of 40 scale of 51 to 52 at midpoint and high end, and improvement from the scale of 44 we achieved in 2023.

Speaker Change: This updated guidance now represents 22.6% growth at the midpoint.

Speaker Change: and improvement from the prior year growth rate of 19.7%.

Speaker Change: HSDB Data to range from 81 million to 85 million representing an 11% increase at the midpoint versus our previous guidance.

Sanjay Kalra: This adjusted to be the margin is an improvement from the prior year's third quarter adjusted to be the margin of 25.3%. Given our improving backlog and implementation base, we feel even better about the business overall in the third quarter than we did in the second quarter. Along with our guidance, I also want to provide further insight related to our outlook. For contribution, profit, growth rates and adjusted to be the margin. As of our business growth, we are receiving greater amount interest from larger enterprises.

Speaker Change: The updated guidance represents a 42.9% increase at the midpoint.

Dushyant Sharma: This represents a 28.1% margin on contribution profit at the midpoint and an improvement from 24.1% in the prior year. This annual guidance implies a rule of 40 scale of 51 to 52 at the midpoint and high end, an improvement from the scale of 44 we achieved in 2020 during our past few earnings calls. We provided long-term growth targets for both gross 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.

Speaker Change: This represents a 28.1% margin on contribution profit at the midpoint, and improvement from 24.1% in the prior year.

Speaker Change: This animal guidance implies a rule of 40 scale of 51 to 52 at midpoint and high end. An improvement from the scale of 44 is achieved in 2023.

Sanjay Kalra: During our past few earning goals, we provided long-term growth targets for both growth revenue and adjusted EBDA, over two primary financial metrics. We stated that our goal was to grow revenue at approximately 20% annually and to grow adjusted EBDA dollars between 20 to 30% annually. The full year 2024 guidance that we have provided today reflects the expected achievement of these long-term targets.

Speaker Change: during our past few earning goals.

Speaker Change: We provided long-term growth targets for both gross revenue and adjusted EBITDA, our two primary financial metrics.

Sanjay Kalra: Not unexpectedly, these large customers often request volume discounts, which we are open to where the deal economics supported. In addition, our tremendous operating leverage allows us to attract and book these large customers. Said differently, volume discounts for large customers are typically more than offset by strong incremental adjusted to be done. This increases our efficiency as our embolding time per billar is declining while average customer size is simultaneously increasing. Furthermore, we have the ability to re-calibrate off-expanding relative to contribution profit in order to reach a desired adjusted EBDA.

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

Dushyant Sharma: The full year 2024 guidance that we have provided today reflects the expected achievement of these long-term targets. In closing, we reported another quarter of excellent results that were higher than expected. In the second quarter of 2024, we continued to build on our solid momentum from the first quarter, resulting in strong revenue at Justitia Vida and Bookings Growth. Additionally, we ended the quarter with a sizable backlog. Due to all of this, we have considerable visibility and believe we are well positioned for the balance of 2024.

Speaker Change: The full year 2024 guidance that we have provided today reflects the expected achievement of these long-term targets.

Dushyant Sharma: In closing, we reported another quarter of excellent results that were higher than expected. In the second quarter of 2024, we continue to build on our solid momentum from the first quarter, resulting in strong revenue at just EBDA and booking growth. Additionally, we ended the quarter with a sizable backlog. Due to all of this, we have considerable visibility, and we leave, we are well positioned for the balance of 2024.

Speaker Change: In closing, we reported another quarter of excellent results that were higher than expected.

Speaker Change: In the second quarter of 2024, we continue to build on our solid momentum from the first quarter, resulting in strong revenue at JSDBDA and Bookings Growth.

Speaker Change: Additionally, we ended the quarter with a sizable backlog.

Speaker Change: Due to all of this, we have considerable visibility and believe we are well positioned for the balance of 2024.

Dushyant Sharma: Thank you, everyone, for your attention today, and now I turn it back to Dushan for final remarks before we open up the call for questions. Thanks, Anjan. Let me take a moment to briefly talk about our execution strategy. As you can see from these results, our business is doing really well. Our keger for revenue and adjusted EBDA growth since our IPO exceeds our long-term targets. As they do in our revised guidance for this year, we are also very excited about the future prospects of the business. We are capturing market share and winning large enterprise customers who historically preferred in-house solutions.

Dushyant Sharma: 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. Thanks, Sanjay. Let me take a moment to briefly talk about our execution strategy. As you can see from these results.

Sanjay Kalra: For reference, our incremental adjusted EBDA margin for the second quarter 2024 was 49.1% relative to the adjusted EBDA margin of 29.5%. Based on our results and progress, we have already made in the first half of 24 and our expectations for the remainder of the year. For the full year 2024, we now expect revenue in the range of 770 to 780 million up 4% from the midpoint of our previous guidance. The updated guidance now represents 26.1% growth at the midpoint, and Improvement from the prior year growth rate of 23.6%.

Speaker Change: 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.

Dushyant Sharma: Thank you, Sanjay.

Dushyant Sharma: Let me take a moment.

Dushyant Sharma: To briefly talk about our execution strategy.

Dushyant Sharma: Our business is doing really well. Our guidance for revenue and adjusted EBITDA growth since our IPO exceeds our long-term target, as do our revised guidance for this year. We are also very excited about the future prospects of the business. We are capturing market share and winning large enterprise customers, who historically preferred in-house solutions. However, they are now getting comfortable partnering with Paymentus because, number one, we have a proven and differentiated technology platform, combined with our unique IP ecosystem that we believe is not replicable.

Dushyant Sharma: As you can see from these results,

Dushyant Sharma: Our business is doing really well.

Dushyant Sharma: Our cagle for revenue and adjusted EBITDA growth, since our IPO, exceeds our long-term targets.

Dushyant Sharma: as they do in our revised guidance for this year.

Dushyant Sharma: We are also very excited about the future prospects of the business.

Dushyant Sharma: We are Captain Marcus Sharma.

Dushyant Sharma: and winning large enterprise customers.

Dushyant Sharma: However, they are now getting comfortable partnering with Pimentus because, number one, we have a proven and differentiated technology platform combined with our unique IP&Ecosystem that we believe is not replicable. And number two, we have a high-growth, profitable public company profile with a strong balance. with these tailwinds and this level of how performance, it is even more important for us to stay disciplined in executing aggressively, while at the same time remaining grounded when forecasting our future projections. In addition, as you know, we primarily serve the non-discretionary part of the economy. People will always need to pay their bills, and companies must always collect their revenues, and we are good at doing both.

Sanjay Kalra: Contribution profit in the range of 293 million to 298 million, up 3% at the midpoint versus previous guys. This updated guidance now represents 22.6% growth at the midpoint, and Improvement from the prior year growth rate of 19.7%. I just said we need that to range from 81 million to 85 million, representing an 11% increase at the midpoint versus our previous guidance. The updated guidance represents a 42.9% increase at the midpoint. This represents a 28.1% margin on contribution profit at the midpoint, and Improvement from 24.1% in the prior year.

Dushyant Sharma: who historically preferred in-house solutions.

Dushyant Sharma: However they are now getting comfortable, partnering with Pimentus, because number one.

Dushyant Sharma: We have a proven and differentiated technology platform.

Dushyant Sharma: Combined with our unique IP ecosystem that we believe is not replicable.

Dushyant Sharma: And number two, we have a high growth, profitable public company profile with a strong balance, with these tailwinds and this level of outperformance. It is even more important for us to stay disciplined in executing aggressively while at the same time remaining grounded when forecasting our future projections. In addition, as you know, we primarily serve the non-discretionary part of the economy. People will always need to pay their bills, and companies must always collect their revenue, and we are good at doing both.

Dushyant Sharma: 2. We have a high growth.

Dushyant Sharma: Profitable Public Company Profile with a strong balance sheet.

Dushyant Sharma: with these tailwinds and this level of outperformance.

Dushyant Sharma: It is even more important for us to stay disciplined in executing aggressively.

Dushyant Sharma: While at the same time remaining grounded when forecasting our future projections.

Dushyant Sharma: In addition, as you know, we primarily serve non-discretionary part of the economy.

Sanjay Kalra: This annual guidance implies a rule of 40 scale of 51 to 52 at midpoint and high end, and Improvement from the scale of 44 we achieved in 2023. During our past few earning goals, we provided long-term growth targets for both growth revenue and adjusted EBDA, over two primary financial metrics. We stated that our goal was to grow revenue at approximately 20% annually and to grow adjusted EBDA dollars between 20 to 30% annually. The full year 2024 guidance that we have provided today reflects the expected achievement of these long-term targets.

Dushyant Sharma: People will always need to pay their bills, and companies must always collect their revenues.

Dushyant Sharma: As a result, we believe we can do well in all seasons and not just during clear blue skies.

Dushyant Sharma: As a result... We believe we can do well in all seasons, and not just during clear blue skies. I'm proud of our team and want to thank them for all their hard work and dedication. With that, I'll open the line up for questions.

Dushyant Sharma: and we are good at doing both.

Dushyant Sharma: As a result, we believe we can do well in all seasons and not just during clear blue skies.

Operator: I'm proud of our team and want to thank them for all their hard work and dedication with that. I'll open the line up for questions. Thank you. We'll now open the line for questions. If you'd like to ask a question at this time, please dial star one on your telephone keypad. If, for any reason, you'd like to remove that question, please dial star two. Again, to ask a question, it is star one. As a reminder, if you're using a speaker phone on today's call, please be sure to pick up your handset before asking your question.

Dushyant Sharma: I'm proud of our team and want to thank them for all their hard work and dedication.

Speaker Change: With that, I'll open the line up for questions.

Operator: Thank you. We'll now open the line for questions. If you'd like to ask a question at this time, please dial star one on your telephone keypad. If, for any reason, you'd like to remove that question, please dial star two. Again, to ask a question, it is star 1. As a reminder, if you're using a speakerphone on today's call, please be sure to pick up your handset before asking your question. The first question comes from the line of Dave Koning with Baird. Your line is now open.

Speaker Change: Thank you. We'll now open the line for questions. If you'd like to ask a question at this time, please dial star 1 on your telephone keypad. If for any reason you'd like to remove that question, please dial star 2.

Sanjay Kalra: In closing, we reported another quarter of excellent results that were higher than expected. In the second quarter of 2024, we continue to build on our solid momentum from the first quarter, resulting in strong revenue at just EBDA and booking growth. Additionally, we ended the quarter with a sizable backlog. Due to all of this, we have considerable visibility and we leave, we are well positioned for the balance of 2024.

Dushyant Sharma: Again, to ask a question at a star one.

Dushyant Sharma: As a reminder, if you're using a speakerphone on today's call, please be sure to pick up your handset before asking your question.

Dave Coney: The first question comes from the line of Dave Coney with Beard. Your line is now open.

Speaker Change: The first question comes from the line of Dave Coning with Beard, your line is now open.

Dave Coney: Yeah, hey guys, congrats on another great quarter. Thank you, David. I guess, yeah, I guess my first question: you put together now a couple quarters of about 30% that revenue growth after several that were kind of around 20.

Dave Koning: Yeah, hey guys, congrats on another great quarter. Thank you, David. I guess, yeah, yeah, my first question is, you put together now a couple quarters of about 30% net revenue growth after several that were kind of around 20. You know, what's the big difference? I guess the last couple quarters are same store sales still about the same despite the macro? And is it just selling efforts like just implementation, selling efforts, etc. And

Dave Coning: Yeah, hey guys, I'll congrats on another great quarter.

Speaker Change: Unknown Speaker I guess, yeah, yeah, I guess my first question you put together now a couple quarters of about 30% net revenue growth after several that were kind of around 20.

Dushyant Sharma: You know, what's the big difference, I guess the last couple quarters is same for sale, so about the same despite the macro, and is it just selling efforts, like just implementation, selling efforts, etc. And you know, some of that sustainable.

Dushyant Sharma: Thank you everyone for your attention today, and now I turn it back to Dushan for final remarks before we open up the call for questions. Thanks, Anjan.

Speaker Change: You know, what's the big difference, I guess, the last couple quarters? Is same-store sales still about the same despite the macro? And is it just selling efforts like just implementation selling efforts, etc.? And, you know, is some of that sustainable?

Dushyant Sharma: Let me take a moment to briefly talk about our execution strategy. As you can see from these results, our business is doing really well. Our keger for revenue and adjusted EBDA growth since our IPO exceeds our long-term targets. As they do in our revised guidance for this year, we are also very excited about the future prospects of the business. We are capturing market share and winning large enterprise customers who historically preferred in-house solutions.

Dushyant Sharma: Dave, great question. Thank you very much for asking that. So the situation here is, as you've seen from the trends, and pretty clear from your question, and we are seeing those trends as well, business is actually firing on all cylinders, I would say. The bookings are strong, as we've been reporting for many quarters, and that cadence is continuing. The backlogs when we exit the quarter have always been higher levels than what we were in the prior quarter.

Dushyant Sharma: Dave, great question. Thank you very much for asking that. So, the situation here is, as you've seen from the trends and pretty clear from the question and via single send as well, business is actually firing on all cylinders. I would say the bookings are strong, as we've been reporting since many quarters, and that cadence is continuing. The backlogs when we exit the quarter has always been on higher levels than what we were in the prior quarter. So, we are seeing it's business firing on all cylinders. At the same time, our revenues are continuing well. Our balance sheet is going.

Dev: Dev, a great question. Thank you very much for asking that.

Speaker Change: So the situation here is, as you've seen from the trends, and pretty clear from your question, and we are seeing those trends as well, business is actually firing on all cylinders, I would say. The bookings are strong, as we've been reporting since many quarters, and that cadence is continuing. The backlogs when we exit the quarter has always been on higher levels than what we were in the prior quarter. So we are seeing business firing on all cylinders. At the same time, our revenues are continuing well, our balance sheet is growing.

Dushyant Sharma: So we are seeing business firing on all cylinders. At the same time, our revenues are continuing to go well, and our balance sheet is growing. So we believe we are in a very good position for execution in 2024. And when it comes to growth rates, you know, we are pretty, we are keeping a straight head, we are very grounded in terms of how we are heading, but the execution is really strong. We feel very good about how the business is going to grow.

Dushyant Sharma: However, they are now getting comfortable partnering with Pimentus because, number one, we have a proven and differentiated technology platform combined with our unique IP&Ecosystem that we believe is not replicable. And number two, we have a high growth profitable public company profile with a strong balance, with these tailwinds and this level of how performance, it is even more important for us to stay disciplined in executing aggressively, while at the same time remaining grounded when forecasting our future projections.

Dushyant Sharma: So, we believe we are in a very good position for execution in 2024. And when it comes to growth rates, we are keeping a straight head. We are very grounded in terms of how we are heading, but the execution is very strong. We feel very good about how the business is going to grow. And should the growth rates continue? Well, we are guiding to what we are guiding, but we are very confident that the business is running very well. And the bookings are very strong. We should generate the right revenues and the growth rates in the market.

Speaker Change: So, we believe we are in a very good position for execution in 2024. And when it comes to growth rates, you know, we are

Speaker Change: We are keeping a straight head, we are very grounded in terms of

Dushyant Sharma: And should the growth rates continue? Well, we are guiding to what we are guiding, but we are very confident that the business is running really well, and the bookings are very strong; we should generate the right revenues and growth rates in the market. And, if I may,

Speaker Change: How we are heading, but the execution is very strong, we feel very good about how the business is going to grow and should the growth rates continue? Well, we are guiding to what we are guiding, but we are very confident that the business is running really well and the bookings are very strong, we should generate the right revenues and the growth rates in the market

Dushyant Sharma: Go ahead, please. Go ahead.

Dushyant Sharma: In addition, as you know, we primarily serve non-disgressionary part of the economy. People will always need to pay their bills and companies must always collect their revenues and we are good at doing both. As a result, we believe we can do well in all seasons and not just during clear blue skies.

Speaker Change: And if I may have you, go ahead, go ahead, please go ahead.

Dave Coney: Well, I guess I was going to ask, and I guess, relatedly, I know you are guiding Q3 contribution profit to be down a touch, despite your backlog being higher. I know it's very recurring buildings.

Dave Koning: Well, I guess I was going to ask them relatedly, I know you're guiding Q3 contribution profit to be down a touch despite your backlog being higher. I know it's very recurring billings. But what does it really take for contribution profit to be down sequentially when things are really good?

Speaker Change: Well, I guess I was going to ask them, I guess, relatedly, I know you're guiding Q3 contribution profit to be down a touch, despite your backlog being higher, I know it's very recurring buildings. Like what does it really take for contribution profit to be down to a quenchily when things are, like, really good.

Sanjay Kalra: What does it really take for contribution profit to be down sequentially when things are, it's like, really good. Yeah, Dave, good question. So, you know, even though our business is growing and it's growing at a great pace, as you saw that we are raising the guidance for the full year for all the three metrics, I would say, you know, it's like 290 basis points for our CBB, we are raising 250 basis points for revenue and 400 basis points for EBDA for the full year. At the same time, there is seasonality in the business which we cannot ignore because there is a cohort of the business cohort of the builders which performs really strong in one quarter and there's another cohort which performs really strong in the other quarter.

Sanjay Kalra: Yeah, Dave, good question. So, you know, even though our business is growing, and it's growing at a great pace, as you saw that we are raising the guidance for the full year for all the three metrics, I would say, you know, it's like 290 basis points for our CP, we are raising 250 basis points for revenue, and 400 basis points for EBITDA for the full year. At the same time, there is seasonality in the business, which we cannot ignore, because there is a cohort of the business, a cohort of the billers, which performs really well in one quarter, and there's another cohort, which performs really well in the other quarter. So, I think seasonality will tell you that we should do a comparable year over year.

Dushyant Sharma: I'm proud of our team and want to thank them for all their hard work and dedication with that.

Speaker Change: Yeah, David, good question. So, you know, even though our business is growing and is growing at a great pace, as you saw that we are raising the guidance for the full year for all the three metrics.

Unknown Attendee: I'll open the line up for questions. Thank you. We'll now open the line for questions. If you'd like to ask a question at this time, please dial star one on your telephone keypad. If for any reason you'd like to remove that question, please dial star two. Again, to ask a question, it is star one. As a reminder, if you're using a speaker phone on today's call, please be sure to pick up your handset before asking your question.

David Hanover: I would say, you know, it's like 290 basis points for our CP we are raising, 250 basis points for revenue, and 400 basis points for EBITDA for the full year.

Speaker Change: At the same time, there is seasonality in the business, which we cannot ignore, because there is a cohort of the business, cohort of the builders, which performs.

Dave Koning: And when it comes to CP, which is actually our secondary metric, the main idea of CP is to work together with the operating expenses, so we can calibrate them together in a way that results in the desired EBITDA margins, and that's what's actually happening. So, regardless of what CP is doing, our primary metric, which is revenue growth, is continuing in Q3, and our EBITDA margins are also better.

Sanjay Kalra: So, I think seasonal seasonality, which tell you that we should do a comparable year over year. And when it comes to CP, which actually is our secondary metric, the main idea of CP is to work together with the operating expenses. So, we can calibrate them together in a way that it results, it results into the desired EBDA margins, and that's actually happening. So, regardless, I would say of what CP is doing, our primary metrics, which is revenue growth, is continuing in Q3 and our EBDA margins are also better. In fact, they are better by 90 basis points at midpoint in Q3 compared to last year's Q3.

Speaker Change: Really strong in one quarter and there's another cohort which performs really strong in the other quarter

David Koning: The first question comes from the line of Dave Coney with Beard. Your line is now open. Yeah, hey guys, congrats on another great quarter. Thank you, David. I guess, yeah, I guess my first question, you put together now a couple quarters of about 30% that revenue growth after several that were kind of around 20. You know, what's the big difference, I guess the last couple quarters is same for sale, so about the same despite the macro, and is it just selling efforts, like just implementation, selling efforts, etc. And you know, some of that sustainable.

Speaker Change: So, I think seasonal...

Speaker Change: Seasonality will tell you that we should do a comparable year over year and when it comes to CP, which actually is our secondary metric, the main idea of CP is to work together with the operating expenses.

Speaker Change: So we can calibrate them together in a way that it results into the desired EBITDA margins. And that's what's actually happening.

Dave Koning: In fact, they are better by 90 basis points at midpoint in Q3 compared to last year's Q3. We feel pretty good, and, you know, as things move along, and as we did in Q2, we could recalibrate the expenses and how CP is coming. So, I think we feel pretty good about it, and it's just a secondary metric. It doesn't impact our long-term strategy or revenue. Gotcha,

Speaker Change: So regardless, I would say, of what CP is doing, our primary matrix, which is revenue growth, is continuing in Q3, and our EBITDA margins are also better. In fact, they are better by 90 basis points at midpoint in Q3 compared to last year's Q3. We feel pretty good, and you know, as things move along, and as we did in Q2, we could recalibrate the expenses, how CP is coming.

Dave Coney: We feel pretty good. And, you know, as things move along and as we did in Q2, we could recalibrate the expenses, how CP is coming. So, I think we feel pretty good about it, and it's just a secondary metric which doesn't impact over long-term strategy or vision. Gotcha.

Dushyant Sharma: Dave, great question. Thank you very much for asking that. So, the situation here is as you've seen from the trends and pretty clear from the question and via single send as well, business is actually firing on all cylinders. I would say the bookings are strong as we've been reporting since many quarters and that cadence is continuing. The backlogs when we exit the quarter has always been on higher levels than what we were in the prior quarter.

Dushyant Sharma: So, we are seeing it's business firing on all cylinders. At the same time, our revenues are continuing well. Our balance sheet is going. So, we believe we are in a very good position for execution in 2024. And when it comes to growth rates, we are keeping a straight head. We are very grounded in terms of how we are heading, but the execution is very strong. We feel very good about how the business is going to grow.

Speaker Change: So I think we feel pretty good about it and it's just a secondary metric which doesn't impact our long term strategy or vision.

Dave Koning: Gotcha. Thanks. Great job.

Dave Coney: Say, great job. Thank you.

Speaker Change: Gotcha, thanks. Great job.

Operator: Thank you. The next question is from the line of Will Nance with Goldman Sachs. Your line is now open.

Will Nance: The next question is from the line of Will Nance with Goldman Sachs.

Speaker Change: Thank you.

Will Nance: Your line is now open. Hey, guys. Good afternoon. Great to see another nice quarter here.

Speaker Change: Thank you. The next question is from the line of Will Mance with Goldman Sachs. Your line is no open.

William Nance: Hey guys, good afternoon. Great to see another nice quarter here. I wanted to follow up on some of the commentary on volume-based discounts. I think you had in the script that there's been some kind of pricing changes that you know have been accepted by your customers over the past few quarters, and maybe there's a little benefit in there. So I guess I just wanted to make sure I understand the commentary and kind of the dynamics around volume-based discounts.

Will Nance: I wanted to maybe follow up on some of the commentary on volume-based discounts. I think you add on the script that, you know, there's been some kind of pricing changes that has been accepted by your customers over the past few quarters, and maybe there's a little benefit in there. So, I guess I just wanted to make sure I'm understanding the commentary and kind of the dynamics around the volume-based discounts. Like, should that accelerate over the next couple of quarters? Like, should we expect to see maybe a little bit more decoupling or narrowing of the spread between gross revenue and transactions?

Will Mance: Hey guys, good afternoon. Great to see another nice quarter here.

Will Mance: I wanted to maybe follow up on some of the commentary on volume-based discounts. I think you had in the script that there's been some kind of pricing changes that have been accepted by your customers over the past few quarters.

Speaker Change: Maybe there's a little benefit in there, so I guess I just want to make sure I'm understanding the commentary and kind of the dynamics around the volume-based discounts, like, should that accelerate over the next couple of quarters? Like, should we expect to see maybe a little bit more decoupling or narrowing of the spread between gross revenue and transactions? It seems like revenue is growing.

Dushyant Sharma: And should the growth rates continue? Well, we are guiding to what we are guiding, but we are very confident that the business is running very well. And the bookings are very strong. We should generate the right revenues and the growth rates in the market. Go ahead, please. Go ahead. Well, I guess I was going to ask and I guess, relatedly, I know you are guiding Q3 contribution profit to be down a touch, despite your backlog being higher.

William Nance: Should that accelerate over the next couple of quarters? Like should we expect to see maybe a little bit more decoupling or narrowing of the spread between gross revenue and transactions? It seems like revenue is growing faster than transactions in the most recent quarter. I'm just wondering if you're messaging that as we lock in prices, we might see the two converge a little bit more as some of those volume-based discounts kick in. Thanks.

Will Nance: It seems like revenue is growing north of transactions in the most recent quarter. I'm just wondering if you're messaging like as we lap the prices, we might see the two converge a little bit more as some of those volume-based discounts kick in. Thanks.

Speaker Change: North of Transactions in the most recent quarter and just wondering if you're messaging like as we lot the prices we might see the two converge a little bit more as some of those volume-based discounts kick in. Thanks.

Sanjay Kalra: Thanks, Will.

Dushyant Sharma: I know it's very recurring buildings. What does it really take for contribution profit to be down sequentially when things are, it's like, really good. Yeah, Dave, good question. So, you know, even though our business is growing and it's growing at a great pace, as you saw that we are raising the guidance for the full year for all the three metrics, I would say, you know, it's like, 290 basis points for our CBB, we are raising 250 basis points for revenue and 400 basis points for EBDA for the full year.

Sanjay Kalra: Thanks, Will. I would start by saying that, you know, the process we discussed in the past few quarters of working with all of our billers, primarily to look at how the billers are performing on a regular basis, and are we getting the desired results in terms of the transactions and the growth in transactions from them. And, you know, based on the results, we reach out to the billers and work on pricing strategies.

Sanjay Kalra: I would start by saying that, you know, looking at the process we discussed in the past few quarters of what we were working with all of our billers, is primarily to look at how the billers are performing on a regular basis. And are we getting the desired results in terms of the transactions and the transactions growth from them? And, you know, based on the results, we reach out to the billers and work on pricing strategies. This kind of was at the peak during the inflationary times when we had to go and work on the pricing, but that has now become a constant process in the company.

Speaker Change: Thanks Will, I would start by saying that

Speaker Change: You know?

Speaker Change: Looking at the process we discussed in the past few quarters of what we are working with all of our billers

Speaker Change: is primarily to look at how the billers are performing on a regular basis in already getting the desired results in terms of the transactions and the transactions growth from them and you know based on the results you reach out to the billers and work on pricing strategies.

Sanjay Kalra: This kind of was at the peak during inflationary times when we had to go and work on the pricing, but that has now become a constant process in the company. A pretty good improvement, I would say, in the process. There is a kind of a disciplined way of reaching out to the billers and working on the pricing to get our desired results. So that process really is now functioning, and we are working with the billers, which is helping us get the desired pricing, I would say, which you saw is pretty clear in the ARPU increase from $136 to $141.

Speaker Change: This kind of was at the peak during the inflationary times, when we had to go and work on the pricing, but that has now become a constant process in the company.

Sanjay Kalra: Pretty good improvement. I would say in the process there is kind of a disciplined way of reaching out to the billers and working on the pricing as to get our desired results. So that process really is now functioning. And we are working with the billers, which are helping us getting the desired pricing. I would say which you saw is pretty clear in R2 increase from 136 to 141. So we saw that happening.

Speaker Change: A pretty good improvement, I would say, in the process, there is kind of a disciplined

Dushyant Sharma: At the same time, there is seasonality in the business which we cannot ignore because there is a cohort of the business cohort of the builders which performs really strong in one quarter and there's another cohort which performs really strong in the other quarter. So, I think seasonal seasonality which tell you that we should do a comparable year over year. And when it comes to CP, which actually is our secondary metric, the main idea of CP is to work together with the operating expenses.

Speaker Change: Way of reaching out to the billers and working on the pricing as to get our design results. So that process really is now functioning and we are working with the billers which are helping us.

Sanjay Kalra: Now, on the other hand, volume-based discounts, as we get larger billers, you know, we are seeing that volume discounts are being given. But again, those volume discounts are not impacting the ARPUs as much as with the CP margins. But then there is a complete dynamic of how that works with our calibration of OPEX. So we get to the desired result on EB, the margin, which is our primary metric. I just need to be the margin as far as that's going.

Speaker Change: Getting the desired pricing, I would say which you saw is pretty clear and R2 increase from 136 to 141. So, we saw that happening. Now,

Sanjay Kalra: Now, on the other hand of the volume-based discounts, as we are getting large billers, you know, we are seeing that volume discounts are being given. But again, those volume discounts are not impacting as much the arpus ever say as with the CP margins, but then there is a complete dynamic of how that works with over calibration of all packs. So we get to the desired result on eB; the margin, which is our primary metric. I just need to be the margin as far as that's growing and in dollars, you know, not only just percentage. I think we want to show that growth and consistently march on that.

Speaker Change: On the other hand, of the volume-based discounts, as we are getting large billers,

Dushyant Sharma: So, we can calibrate them together in a way that it results, it results into the desired EBDA margins and that what's actually happening. So, regardless, I would say of what CP is doing, our primary metrics which is revenue growth is continuing in Q3 and our EBDA margins are also better. In fact, they are better by 90 basis points at midpoint in Q3 compared to last year's Q3. We feel pretty good. And, you know, as things move along and as we did in Q2, we could recalibrate the expenses, how CP is coming. So, I think we feel pretty good about it and it's just a secondary metric which doesn't impact over long term strategy or vision. Gotcha.

Speaker Change: We are seeing that volume discounts are being given, but again, those volume discounts are not impacting as much the ARPUs, I would say, as with the CP margins. But then there is a complete dynamic of how that works with our calibration of OPEX.

Speaker Change: So, we get to the desired result on EB the margin, which is of a primary metric.

Sanjay Kalra: And in dollars, you know, not only just percentage, I think we want to show that growth and consistently march on that. So overall, I would say in the longer term, they should converge. Like, if you look at our CAGRs for the last four years, you will see they are pretty close. But in short periods of time, can they bounce around? Yes, they can.

Speaker Change: I just should be the margin as far as that's going and in dollars, you know, not only just presenting, I think, we want to show that growth and consistently march on that.

Sanjay Kalra: So overall, I would say in the longer term, they should converge. Like if you look at our kegars for last four years, you will see they are pretty close. But in short periods of time, can they bounce around? Yes, they can. In Q1, you saw CP grew 30%. In Q2, you were seeing CP grew 28%. In Q1, you saw revenue was 20 high 20s and in Q2, you were seeing early 30s or 32% in Q2. I think they are pretty much close to each other, but the kind of variability and the kind of diversity we have in the bigger base and the verticals we are expanding to should give us that kind of flexibility to operate in.

Speaker Change: So, overall, I would say, in the longer term, they should converge, like if you look at our CAGRs for the last four years, you will see they are pretty close.

William Nance: In Q1, you saw CP grow 30%. In Q2, you are seeing CP grow 28%. In Q1, you saw revenue of 20, high 20s. And in Q2, you are seeing early 30s or 32% in Q2. I think they are pretty close to each other. But the kind of variability and the kind of diversity we have in the bidder base and the verticals we are expanding to should give us that kind of flexibility to operate in. And I think we are still marching on the right path with the achievement of primary education.

Unknown Attendee: Say, great job. Thank you.

Speaker Change: But in short periods of time, can they bounce around? Yes, they can. In Q1, you saw CP grew 30%. In Q2, you are seeing CP grew 28%.

Sanjay Kalra: Got it. That is super helpful.

William Nance: The next question is from the line of Will Nance with Goldman Sachs. Your line is now open. Hey, guys. Good afternoon. Great to see another nice quarter here. I wanted to maybe follow up on some of the commentary on volume-based discounts. I think you add on the script that, you know, there's been some kind of pricing changes that has been accepted by your customers over the past few quarters and maybe there's a little benefit in there.

Speaker Change: In Q1, you saw revenue was 20, high 20s, and in Q2, you were seeing early 30s or 32% in Q2. I think they are pretty much close to each other, but the kind of variability and the kind of diversity we have in the bidder base and the verticals we are expanding to should give us that kind of flexibility to operate in.

William Nance: So, I guess I just wanted to make sure I'm understanding the commentary and kind of the dynamics around the volume-based discounts. Like, should that accelerate over the next couple of quarters? Like, should we expect to see maybe a little bit more decoupling or narrowing of the spread between gross revenue and transactions? It seems like revenue is growing north of transactions in the most recent quarter. I'm just wondering if you're messaging like as we lap the prices, we might see the two converge a little bit more as some of those volume-based discounts kick in. Thanks. Thanks, Will.

Sanjay Kalra: And I think we are still marching on the right path with achievement of primary metrics.

Sanjay Kalra: Andrew. That is super helpful. And you mentioned running well ahead of the Rule of 40 targets over time.

William Nance: And just, you know, you mentioned running kind of well ahead of the rule of 40 targets over time. So just anything on the horizon that you know that you expect, or where you could see yourself kind of investing more heavily? Are there any kind of investment priorities that, you know, may come on board just, you know, given the strength and the financial profile right now? Or, you know, could we continue to see really strong incremental margins and a lot of incremental CP fall into the bottom line?

Speaker Change: and I think we are still marching on the right path with achievement of primary metrics.

Speaker Change: Got it. That is super helpful. And just, you know, you mentioned running kind of well ahead of the rule of 40 targets over time. So just anything on the horizon that where, you know, that you expect, or where you could see yourself kind of investing more heavily? Are there any kind of investment priorities that, you know, may come on board just, you know, given the strength and the financial profile right now? Or, you know, could we continue to see, you know, the really strong incremental margins and a lot of incremental CP fall into the bottom line? Thanks.

Sanjay Kalra: So just anything on the horizon that you expect or where you could see yourself investing more heavily, are there any kind of investment priorities that may come on board just given the strength and the financial profile right now? Or could we continue to see the really strong incremental margins and a lot of incremental CP phone? Is the bottom line? Thanks.

Sanjay Kalra: Well, we'll put the money where the mouth is, you know, and we started doing that already in this quarter. We believe we have a great opportunity in front of us. Our pipeline is very strong, and we want to convert that to bookings. And if we have to hire more sales and marketing, or we have to invest more in partnerships and similar arrangements, we are opening those opportunities and working on that. So we see an opportunity in front of us, and the organic growth is number one priority, and we would not hesitate to spend there if the desired opportunity is going to be beneficial for us, although staying very focused on our long-term matrix of the two primary matrix.

Sanjay Kalra: Well, we'll put the money where the mouth is, you know, and we've started doing that already this quarter. We believe we have a great opportunity in front of us, our pipeline is very strong, and we want to convert that into bookings. And if we have to hire more sales and marketing people, or we have to invest more in partnerships and similar arrangements, we are opening those opportunities and working on them. So we see an opportunity in front of us, and organic growth is our number one priority, and we will not hesitate to spend there if the desired opportunity is going to be beneficial for us. Although we are staying very focused on our long-term matrix of the two primary metrics.

Speaker Change: Well, we've put the money where the mouth is, you know, and we started doing that already in this quarter. We believe we have a great opportunity in front of us. Our pipeline is very strong, and we want to convert that to bookings.

Dushyant Sharma: I would start by saying that, you know, looking at the process we discussed in the past few quarters of what we were working with all of our billers is primarily to look at how the billers are performing on a regular basis. And are we getting the desired results in terms of the transactions and the transactions growth from them? And, you know, based on the results, we reach out to the billers and work on pricing strategies.

Speaker Change: and if we have to hire more sales and marketing or we have to invest more in partnerships.

Speaker Change: and similar arrangements, we are opening those opportunities and working on that. So, we see you!

Dushyant Sharma: This kind of was at the peak during the inflationary times when we had to go and work on the pricing, but that has now become a constant process in the company. Pretty good improvement. I would say in the process there is kind of a disciplined way of reaching out to the billers and working on the pricing as to get our desired results. So that process really is now functioning. And we are working with the billers which are helping us getting the desired pricing.

Speaker Change: opportunity in front of us and the organic growth is number one priority and we would not hesitate to spend there if the desired opportunity is going to be beneficial for us. Although staying very focused on our long-term matrix of the two primary matrix.

Dushyant Sharma: And if I may add to that, I think it might help Dave's question earlier as well, is that why we believe a growth revenue and adjusted EBIDAR were two primary metrics. And the reason is we are still in building mode. We are basically in market capture mode. We have a fraction of the market. The total address of the market is huge. And frankly, with our product profile, the ecosystem profile, the IPN network reach combined with our public company profitable growth and strong balance sheet profile, we are able to open up markets, which traditionally were somewhat elusive to us.

Dushyant Sharma: And if I may add to that, Will, and I think it may help Dave's question earlier as well, is why we believe revenue, gross revenue, and adjusted EBITDA are our two primary metrics. And the reason is, we are still in building mode, we're basically in market capture mode, we have a fraction of the market, the total addressable market is huge. And frankly, with our product profile, the ecosystem profile, and the IPN network

Will Mance: And if I may add to that, Will, and I think it may help Dave's question earlier as well, is that why we believe revenue, gross revenue, and adjusted EBITDA are two primary metrics?

Dushyant Sharma: I would say which you saw is pretty clear in R2 increase from 136 to 141. So we saw that happening. Now, on the other hand of the volume based discounts, as we are getting large billers, you know, we are seeing that volume discounts are being given. But again, those volume discounts are not impacting as much the arpus ever say as with the CP margins, but then there is a complete dynamic of how that works with over calibration of all packs.

Speaker Change: and the reason is we are still in building mode. We are basically market capture mode. We are a fraction of the market. The total addressable market is huge.

Speaker Change: and frankly with our product profile, the ecosystem profile, the IPN network of the reach.

Speaker Change: Combined with our public company profitable growth and strong balance sheet profile, we are able to open up markets which traditionally were somewhat elusive to us.

Dushyant Sharma: Combined with our public company, profitable growth, and strong balance sheet profile, we are able to open up markets which traditionally were somewhat elusive to us. And what we are trying to do is we say, what is the number one metric which we can give to our investors which gives the comfort that Paymentus has actually differentiated its product offering and is able to capture the market? And that's our top line number.

Dushyant Sharma: So we get to the desired result on eB the margin, which is our primary metric. I just need to be the margin as far as that's growing and in dollars, you know, not only just percentage. I think we want to show that growth and consistently march on that. So overall, I would say in the longer term, they should converge. Like if you look at our kegars for last four years, you will see they are pretty close.

Dushyant Sharma: And what we are trying to do is we are saying what is the number one metric which we can give to our investor, which gives the comfort that payment is actually differentially product offering, and is able to capture the market. And that's the top line; that's the top line number. And just if EBIDAR is, I mean, we are operating in a pretty interesting market as we all know, we want to demonstrate the operating leverage for the company that despite the CP moving around, as Sanjay rightly pointed out, quarter to quarter, we are able to balance our op-ax because within the context of the year, the op-ax is not as relevant to deliver the top line growth as we have shared in the past, that we are actually, we are able to predict whatever revenues would be at the beginning of the year if, frankly, in some cases without signing a new client as we share earlier this year and last year.

Speaker Change: and what we are trying to do is we are saying what is the number one metric which we can give to our investor which gives the comfort that they meant this actually is differentiated product offering and is able to capture the market and that's the top line, that's the top line number.

Dushyant Sharma: And just as EBITDA is, I mean, we are operating in a pretty interesting market, as we all know. We want to demonstrate the operating leverage for the company that despite the CP moving around, as Sanjay rightly pointed out, quarter to quarter, we are able to balance our OPEX because within the context of the year, the OPEX is not as relevant to deliver the top line growth as we have shared in the past, that we are actually, we are able to predict what our revenues would be at the beginning of the year if, frankly, in some cases, without signing a new client, as we shared earlier this year and last year.

Speaker Change: And just as EBITDA is, I mean, we are operating in a pretty interesting market as we all know.

Dushyant Sharma: But in short periods of time, can they bounce around? Yes, they can. In Q1, you saw CP grew 30%. In Q2, you were seeing CP grew 28%. In Q1, you saw revenue was 20 high 20s and in Q2, you were seeing early 30s or 32% in Q2. I think they are pretty much close to each other, but the kind of variability and the kind of diversity we have in the bigger base and the verticals we are expanding to should give us that kind of flexibility to operate in. And I think we are still marching on the right path with achievement of primary metrics.

Speaker Change: We want to demonstrate the operating leverage for the company that...

Speaker Change: Despite the CP moving around, as Sanjay rightly pointed out, quarter to quarter, we are able to balance our OPEX because within the context of the year, the OPEX is not as relevant to deliver the top-line growth as we have shared in the past.

Speaker Change: that we are actually, we are able to predict whatever revenues will be at the beginning of the year if, frankly, in some cases, without signing a new client, as we shared earlier this year and last year.

Dushyant Sharma: Andrew. That is super helpful. And you mentioned running well ahead of the rule of 40 targets over time. So just anything on the horizon that you expect or where you could see yourself investing more heavily, are there any kind of investment priorities that may come on board just given the strength and the financial profile right now? Or could we continue to see the really strong incremental margins and a lot of incremental CP phone is the bottom line?

Dushyant Sharma: So I think of us as a company, a very scaled, decent-sized business, approaching, frankly, a billion dollars in top line, but it's still just at the infancy of building its business and trying to capture the market. So from that perspective, we want to make sure we have the utmost flexibility in doing the deal, the type of deal, the type of market we want to go after. And as a result, we are targeting the deal that makes sense for us.

Dushyant Sharma: So, I think of us as a company, a very scaled, a decent-sized business approaching, frankly, a billion dollars of top line, but it's still just at the infancy of building its business, trying to capture the market. So, from that perspective, we want to make sure we have almost flexibility of doing the deal, the type of deal, the type of market we want to go after. And as a result, we are targeting the deal that makes sense for us, and therefore, the best metric for us at the top line is growth revenue, and adjusted EBITDA is, how profitably can we serve the customer and customers and can we deliver that margin.

Speaker Change: So, I think think of us as a company, a very scaled, a decentralized business, approaching frankly a billion dollars of top line, but it's still just a bit fancy of building its business, trying to capture the market.

Speaker Change: So, from that perspective, we want to make sure we have the utmost flexibility of doing the deal, the type of deal, the type of market we want to go after. And as a result, we are targeting the deal that makes sense for us. And therefore, the best metric for us at the top line is…

Dushyant Sharma: And therefore, the best metric for us at the top line is gross revenue, and adjusted EBITDA is how profitably can we serve the customers and can we deliver that margin. And our long-term strategy, as we have shared in the past, is that we want to participate in the interchange economy. Interchange today is an expense center for us, but not in all cases. And in the long term, years out, you will see Paymentus participating in the interchange economy.

Dushyant Sharma: Thanks. Well, we'll put the money where the mouth is, you know, and we started doing that already in this quarter. We believe we have a great opportunity in front of us. Our pipeline is very strong, and we want to convert that to bookings. And if we have to hire more sales and marketing, or we have to invest more in partnerships and similar arrangements, we are opening those opportunities and working on that.

Dushyant Sharma: So we see a opportunity in front of us, and the organic growth is number one priority, and we would not hesitate to spend there if the desired opportunity is going to be beneficial for us, although staying very focused on our long-term matrix of the two primary matrix. And if I may add to that, I think it might help Dave's question earlier as well, is that why we believe a growth revenue and adjusted EBIDAR were two primary metrics.

Speaker Change: Grocery Avenue, and adjusted EBITDA is how profitable you can be serve the customer and customers and can be delivered that margin.

Dushyant Sharma: And our long-term strategy, as we have shared in the past, is that we want to participate in the interchange economy. Interchange today is an expense center for us, but not in all cases, and we, in the long-term, years out, you would see paymenters participating in the interchange economy. So, for us, this is a perfect opportunity; it's a perfect inflection point to demonstrate the differentiated offering and keep capturing market at the faster click, as well as we can, while at the same time demonstrating profitably.

Speaker Change: And our long-term strategy, as we have shared in the past, is that we want to participate in the interchange economy.

Speaker Change: Interchange today is the expense center for us.

Speaker Change: but not in all cases.

Speaker Change: and we, in the long term, years out, you would see Paymentus participating in the interchanging economy.

Dushyant Sharma: So for us, this is a perfect opportunity, a perfect inflection point to demonstrate the differentiated offering and keep capturing market share at the faster click as well as we can, while at the same time demonstrating profitability. Yeah, that's all very...

Speaker Change: So, we, for us, this is a perfect opportunity, is a perfect inflection point to demonstrate the differentiated offering and keep capturing market at the faster click as well as we can, while at the same time demonstrating profitability.

Will Nance: Yeah, that's all very clear. Appreciate all the details here and great to see the continued momentum in the business. Thanks for taking the questions.

William Nance: Yeah, that's all very clear. I appreciate all the details here, and it's great to see the continued momentum in the business. Thanks for taking the questions. Thank you.

Speaker Change: Yeah, that's all very clear. Appreciate all the details here and great to see the continued momentum in the business. Thanks for taking the questions. Thank you.

Operator: Thank you. The next question is from the line of Darrin Peller with Wolf Research. Your line is now open.

Darren Peller: The next question is from the line of Darren Peller with Wolf Research. Your line is now open. Guys, thanks.

Dushyant Sharma: And the reason is we are still in building mode. We are basically market capture mode. We have fraction of the market. The total address of the market is huge. And frankly, with our product profile, the ecosystem profile, the IPN network reach combined with our public company profitable growth and strong balance sheet profile, we are able to open up markets, which traditionally were somewhat elusive to us. And what we are trying to do is we are saying what is the number one metric which we can give to our investor, which gives the comfort that payment is actually differentially product offering, and is able to capture the market.

Speaker Change: Thank you. The next question is from the line of their impeller with Wolf Research, your line is not open.

Darrin Peller: Guys, thanks. If you could just help us add a little bit more color around the new biller ads. And maybe just a breakdown of the vertical sources that these billers are coming in from, I guess, maybe just to add on when we're thinking about the second half. What is the net number of billers you're embedding in the guide? You're just obviously converting them and moving them into go live much more quickly than I think maybe you did in the past in some cases. And so it'd be great to know a little more around what kind of cadence we're seeing already, what kind of builder numbers and maybe the expectations embedded.

Darren Peller: If you can just help us a little bit more color around New Biller ads and maybe just a breakdown of the vertical sources that these builders are coming in from. I guess maybe just add on when we're thinking about the second half. What is the net number of builders you're embedding in the guide? You're just obviously converting them and moving them into go live much more quickly than I think maybe you did in the past in some cases. And so it'd be great to know a little more around what kind of cadence we're seeing already, what kind of biller numbers, and maybe the expectations embedded.

Speaker Change: Guys, thanks. If you could just help us a little bit more color around new biller ads.

Derimpeller: The may be just a breakdown of the vertical sources that these builders are coming in from. I guess maybe just that. We're thinking about the second half.

Speaker Change: What is the net number of billers you're embedding in the guide? You're just obviously converting them and moving them in to go live much more quickly than I think maybe you did in the past in some cases. And so it'd be great to know a little more around what kind of cadence we're seeing already, what kind of biller numbers, and maybe the expectations embedded.

Dushyant Sharma: Yeah, so Darren, we see, you know, in terms of the biller ads, we are seeing we don't actually discuss the numbers. That's an annual number of billers we disclose. So you will have to, I say, wait for that for Q4 call, but you know, I would say that the progress during the year, in fact, the first two quarters has been a very good progress. And we are pleased not only in Q2; actually, Q1 is a full year today. The billers have grown very well. And in all the verticals, I think Dushan, in his prepared remarks, pointed out nine verticals where we had seen bookings in the quarter.

Sanjay Kalra: Yeah, so, Darrin, we see, you know, in terms of the biller ads, we don't actually discuss the numbers. That's an annual number of billers we disclose. So you will have to, I'd say, wait for that on the Q4 call.

Dushyant Sharma: And that's the top line, that's the top line number. And just if EBIDAR is, I mean, we are operating in a pretty interesting market as we all know, we want to demonstrate the operating leverage for the company that despite the CP moving around, as Sanjay rightly pointed out, quarter to quarter, we are able to balance our op-ax because within the context of the year, the op-ax is not as relevant to deliver the top line growth as we have shared in the past, that we are actually, we are able to predict whatever revenues would be at the beginning of the year if, frankly, in some cases without signing a new client as we share earlier this year and last year.

Speaker Change: [inaudible]

Sanjay Kalra: But you know, I would say that the progress during the year, in fact, the first two quarters, has been very good progress. And we are pleased, not only in Q2, actually Q1 is a full year to date, the billers have grown really well. Even in all the verticals, I think Dushyant, in his prepared remarks, pointed out nine verticals where we had seen bookings in the quarter.

Speaker Change: And we are pleased, not only in Q2, actually Q1 is a full year to date, the billers have grown really well, and in all the verticals, I think...

Speaker Change: Dushyant, in his prepared remarks, pointed out nine verticals.

Sanjay Kalra: And they are all diversified, and they are all growing. You know, business is coming on all side, and that basically comes from the key strengths we have in our platform that it could be used for any vertical. We don't specialize in any particular one, although, as you know, utility is over strong as backbone. But at the same time, we've got insurance; you know, we've got many other verticals which Dushan mentioned. I won't be able to provide clarity on the number. As I said, one thing I can definitely share with you: maybe this will help. Our implementation base over the last six quarters has been the best in Q2.

Sanjay Kalra: And they are all diversified, and they are all growing. You know, business is humming on all sides. And that basically comes from the key strengths we have in our platform that it could be used for any vertical. We don't specialize in any particular one.

Dushyant Sharma: where we had seen bookings in the quarter and they are all diversified and they are all growing.

Speaker Change: You know, business is coming on all side and that basically comes from the key strength we have in our platform that it could be used for any verticals, we don't specialize in any verticals or one, although as you know, you'd lead these over strong as backbone.

Dushyant Sharma: So, I think think of us as a company, a very scaled, a decent-sized business approaching, frankly, a billion dollars of top line, but it's still just at the infancy of building its business, trying to capture the market. So, from that perspective, we want to make sure we have almost flexibility of doing the deal, the type of deal, the type of market we want to go after. And as a result, we are targeting the deal that makes sense for us, and therefore, the best metric for us at the top line is growth revenue, and adjusted EBIDAR is, how profitably can we serve the customer and customers and can we deliver that margin.

Sanjay Kalra: Although, as you know, utilities are our strongest backbone, but at the same time, we've got insurance, you know; we've got many other verticals, which Dushyant mentioned. I won't be able to provide clarity on the number, as I said.

Dushyant Sharma: But at the same time, we've got insurance, you know, we've got many other verticals, which Dushyant mentioned. I won't be able to provide clarity on the number, as I said. One thing I can definitely share with you, maybe this will help. Our implementation pace...

Sanjay Kalra: One thing I can definitely share with you, maybe this will help: our implementation phase over the last six quarters has been the best in Q2. It has been growing every quarter, improving every quarter. I think our machinery, in terms of how quickly we implement this, the processes are becoming very, very efficient, due to multiple reasons. So I would say that time period has reduced.

Dushyant Sharma: That has been growing every quarter, improving every quarter. I think our machinery, in terms of how quickly we implement this, the processes are becoming very, very efficient due to multiple reasons. So I would say that time period has reduced. So that is helping not only the revenue growth, but should help later on as well.

Speaker Change: over the last six quarters has been the best in Q2.

Speaker Change: That has been growing every quarter, improving every quarter. I think our machinery, in terms of how quickly we implement this, the processes are becoming very, very efficient due to multiple reasons. So I would say that time period has reduced.

Dushyant Sharma: And our long-term strategy, as we have shared in the past, is that we want to participate in the interchange economy. Interchange today is an expense center for us, but not in all cases, and we, in the long-term years out, you would see paymenters participating in the interchange economy. So, for us, this is a perfect opportunity, it's a perfect inflection point, to demonstrate the differentiated offering, and keep capturing market at the faster click, as well as we can, while at the same time demonstrating profitably.

Dushyant Sharma: And if I may add, actually, I was just going to say something quickly, Darren. I think it's quite an interesting inflection point we are at as a business. We think of us as a disruptive engine, if you will. Disruptive engine relative to the current from lack of a better word orthodoxy that may exist in the current client environment. So you are going in as a with payment to the advanced platform and reimagining the entire workflow and the experience for the customers, but also the back of his operations for the large entities or any size in any vertical.

Dushyant Sharma: So that is helping not only revenue growth but should help later on as well. And if I may add, actually, I was just going to say something quickly, Darrin, I think it's quite an interesting inflection point we are at as a business. We think of ourselves as a disruptive engine, if you will, a disruptive engine relative to the current, for lack of a better word, orthodoxy that may exist in the current client environment.

Speaker Change: So that is helping not only the revenue growth, but should help later on as well.

Speaker Change: And if I may add, actually I was just going to say something quickly, I think.

Speaker Change: It's quite interesting inflection point we are at as a business.

Speaker Change: We think of us as a disruptive engine if you will.

Unknown Attendee: Yeah, that's all very clear. Appreciate all the details here and great to see the continued momentum in the business. Thanks for taking the questions.

Speaker Change: Disruptive engine relative to the current, for lack of a better word, orthodoxy that may exist in the current client environment.

Unknown Attendee: Thank you.

Dushyant Sharma: So you're going in with Paymentus' advanced platform and re-imagining the entire workflow and the experience for the customers, but also the back office operations for large entities of any size and any vertical. So what we are trying to do is we are building our business in a very much agile methodology, if you will. We take a look at it, and this vertical looks interesting, could be very high-margin. It may have an incumbent, one or two, or a few incumbents who actually may not be as sophisticated as our platform is, and we would go in and disrupt that particular vertical, you know, just like we have done in many, many other verticals.

Speaker Change: So you're going in with Paymentus' advanced platform and reimagining the entire workflow and the experience for the customers, but also the back office operations for the large entities or any size and any vertical.

Darren Peller: The next question is from the line of Darren Peller with Wolf Research. Your line is now open. Guys, thanks. If you can just help us a little bit more color around New Biller ads and maybe just a breakdown of the vertical sources that these builders are coming in from. I guess maybe just add on when we're thinking about the second half. What is the net number of builders you're embedding in the guide?

Dushyant Sharma: So what we are trying to do is we are building our business in a very much agile methodology, if you will. We take a look at it that this vertical looks interesting. Could be very high margin generating. It may have a incumbent one or two or a few incumbents who actually may not be as sophisticated as our platform is. And we would go in and disrupt that particular vertical and, you know, just like we have done in many other verticals. So what you're seeing is we are a very industry agnostic platform approach with one single code base. We're going to different customers and able to offer them what they never thought was possible with one platform.

Speaker Change: So what we are trying to do is we are building our business in a very much agile methodology, if you will, we take a look at it, that this vertical looks interesting.

Darren Peller: You're just obviously converting them and moving them into go live much more quickly than I think maybe you did in the past in some cases. And so it'd be great to know a little more around what kind of cadence we're seeing already, what kind of biller numbers and maybe the expectations embedded. Yeah, so Darren, we see, you know, in terms of the biller ads, we are seeing we don't actually discuss the numbers.

Speaker Change: could be a very high margin generating. It may have an incumbent one or two or a few incumbents who actually may not be a sophisticated as our platform is.

Speaker Change: And we would go in and disrupt that particular vertical, and, you know, just like we have done in many, many other verticals. So what you're seeing is...

Dushyant Sharma: So what you're seeing is we are a very industry-agnostic platform approach with one single code base. We go to different customers and are able to offer them what they never thought was possible with one platform. And as a result, what's happening is we are becoming better as a company and onboarding some of that experience as well, just because of the automation and different functionality we have added to the platform.

Speaker Change: We are...

Speaker Change: a very industrial, agnostic platform approach with one single code base, we're going to different customers and able to offer them what they never thought was possible with one platform. And that's in as a result, what's happening is

Darren Peller: That's an annual number of billers we disclose. So you will have to, I say wait for that for Q4 call, but you know, I would say that the progress during the year, in fact, the first two quarters has been a very good progress. And we are pleased not only in Q2, actually, Q1 is a full year today. The billers have grown very well. And in all the verticals, I think Dushan in his prepared remarks pointed out nine verticals where we had seen bookings in the quarter.

Dushyant Sharma: And that's in as a result of what's happening is we are becoming better as a company on voting some of that experience experience as well just because of the automation and different functionality we have added to the platform. Yeah, that's great to hear.

Speaker Change: We are becoming better as a company on voting some of that experience as well just because of the automation and different functionality we have added to the platform.

Dushyant Sharma: Yeah, that's great to hear. Just a quick one is just on, also on your, I mean your net cash is $190 million, and it continues to move higher. So if you could just remind us of the M&A strategy, what would be an area you'd look to further invest in?

Darren Peller: Just a quick one: is just on also on your, I mean, your net cash is $199 million, and it continues to move higher.

Speaker Change: Yeah, that's great to hear. Just a quick one is just on, also on your, I mean your net cash is $190 million and it continues to move higher, so if you could just remind us of the M&A strategy, what would be an area you'd look to further invest into? What's on the horizon? Thanks guys.

Sanjay Kalra: So if you could just remind us of the M&A strategy, what would be an area you'd look to further invest and do with some horizon. Thanks, guys. Nice job. Thank you. Thank you so much. I think on the M&A side, I think we will remain opportunistic. As you can see from our profile, frankly, we get hit by almost any book, which is of any size, whether it's small tokens or larger companies. It's not easy to find companies, which are a creature to our profile, the top top line growth, as well as the bottom line. But as we do, take a look at them, we will, we will remain opportunistic.

Darren Peller: And they are all diversified and they are all growing, you know, business is coming on all side and that basically comes from the key strengths we have in our platform that it could be used for any vertical. We don't specialize in any particular one, although as you know, utility is over strong as backbone. But at the same time, we've got insurance, you know, we've got many other verticals which Dushan mentioned. I won't be able to provide clarity on the number.

Dushyant Sharma: Unknown Attendee, Dushyant Sharma, Sanjay Kalra, Zachary Gunn, Jieli Lu, Paymentus Hldg, Nice job, by the way. Thank you. Thank you so much.

Dushyant Sharma: I think on the M&A side, I think we will remain opportunistic. As you can see from our profile, frankly, and we get hit by almost any book, which is of any size, whether it's small tech-ins or larger companies, it's not easy to find companies which are accretive to our profile, the top line growth as well as the bottom line. But as we do take a look at them, we will remain opportunistic. There isn't a single functionality gap that we can think of that will necessitate us to actually make an acquisition, but we are opportunistic. We are taking a look at what is out there.

Speaker Change: Nice job. Thank you.

Speaker Change: Thank you so much.

Speaker Change: I think on amin this side, I think we will remain opportunistic as you can see from our profile, frankly, and we get hit by almost any book, which is of any size, whether it's...

Darren Peller: As I said, one thing I can definitely share with you, maybe this will help our implementation base over the last six quarters has been the best in Q2. That has been growing every quarter, improving every quarter. I think our machinery in terms of how quickly we implement this, the processes are becoming very, very efficient due to multiple reasons. So I would say that time period has reduced. So that is helping not only the revenue growth, but should help later on as well.

Malta Kinz: It's Malta Kinz, a larger company.

Speaker Change: It's not easy to find companies which are accretive to our profile, the top line growth as well as the bottom line. But as we do take a look at them, we will remain opportunistic.

Darren Peller: There isn't a single functionality gap, which we can think of that road necessities for us to actually make an acquisition, but we are opportunistic. We are taking a look at what is out there. Got it. Nice guys.

Speaker Change: there is in the single functionality gap which you can think of that group in necessities for us to actually make an acquisition but we are a portion of stick we are taking a look at what is out there.

Speaker Change: Got it. Thanks guys. Thank you.

Operator: Thank you. The next question is from the line of Andrew Bauch with Wells Fargo. Your line is now open.

Andrew Bauch: The next question is from the line of Andrew Bauch with Wells Fargo. Your line is not open. Hey guys, thanks for taking the question. Just wanted to pick up a guide here. You know, you beat contribution profit by seven and a half, and a second quarter raised, eight and a half in the full year. So about another million in the back half. But then on the EBITDA side, you beat by four and a half and raised by eight, so three and a half incremental.

Dushyant Sharma: And if I may add, actually, I was just going to say something quickly, Darren, I think it's quite interesting inflection point we are at as a business. We think of us as a disruptive engine if you will. Disruptive engine relative to the current from lack of a better word orthodoxy that may exist in the current client environment. So you are going in as a with payment to the advanced platform and reimagining the entire workflow and the experience for the customers, but also the back of his operations for the large entities or any size in any vertical.

Speaker Change: Thank you. The next question is from the line of Andrew Bauch with Wells Fargo. Your line is now open.

Andrew Bauch: Hey guys, thanks for taking the question. I just wanted to pick up a guide here.

Andrew Bauch: Hey guys, thanks for taking the question. Just wanted to pick up a guide here. You know, you beat contribution profit by seven and a half in the second quarter, raised eight and a half in the full year, so about another million in the back half.

Speaker Change: But then on the EBITDA side...

Sanjay Kalra: Any kind of thoughts about around, you know, with those, that incremental rates who are just the EBITDA is just a function of the high incremental margins, or, you know, if you run at these levels, incremental margins, what is the motivation to kind of think about putting that back into sales? Well, Andrew, I like to just say one thing which we both said in the prepared remarks: you know, businesses doing great. The two quarters have been amazing, exceptionally well. We are on a path of executing really well. We are keeping overhead straight and being very thoughtful in terms of how we are giving the guidance.

Speaker Change: You beat by four and a half.

Speaker Change: Unknown Speaker raised by eight, so three and a half incremental. Any kind of thoughts about around, you know,

Andrew Bauch: You know, you beat contribution profit by seven and a half in the second quarter, raised eight and a half in the full year, to about another million in the back half. But then on the EBITDA side, you beat by four and a half and raised by eight, so three and a half incremental. Any kind of thoughts around, you know, with that incremental rate, so just EBITDA, is it just a function of the high incremental margins? Or, you know, if you run at these levels of incremental margins, what is the motivation to kind of think about putting that back into sales?

Speaker Change: with those incremental race, who just even does, it's just a function of the high incremental margins, or, you know, if you run at these levels in incremental margins, what is the motivation to kind of think about putting that back into sales?

Sanjay Kalra: Well, Andrew, I would like to just say one thing, which we both said in the prepared remarks, you know, business is doing great. The two quarters have been amazing, exceptionally well.

Dushyant Sharma: So what we are trying to do is we are building our business in a very much agile methodology, if you will, we take a look at it that this vertical looks interesting. Could be very high margin generating. It may have a incumbent one or two or a few incumbents who actually may not be as sophisticated as our platform is. And we would go in and disrupt that particular vertical and, you know, just like we have done in many other verticals.

Speaker Change: Well Andrew, I'd like to just say one thing which we both said in the prepared remarks. You know, business is doing great. The two quarters have been amazing, exceptionally well. We are

Sanjay Kalra: We are on a path of executing really well. We are keeping our heads straight and being very thoughtful in terms of how we are giving guidance. At the same time, you know, how would we use EBITDA and use it for our expenses to rather fund future revenue or future bookings or conversion to pipeline? That would be our priority. And we will see how the CP turns out. It's a secondary metric.

Andrew Bauch: We are on a path of executing really well. We are keeping our head straight and being very thoughtful in terms of how we are giving the guidance.

Sanjay Kalra: At the same time, you know, how would we use the EBITDA and use it for our expense to rather find the future revenue or future bookings or conversion to pipeline. That would be our priority. And we would see how the CP turns out. It's a secondary metric. We don't think that's our focus. And over and over time, we have seen it that EBITDA margins can get better, whether CP margins are getting better or not. Actually, they are getting better as well, but I mean, even if they don't, we have a pretty solid model in terms of how closely we can manage the CP operation together with the operating expense and how we can calibrate that.

Speaker Change: At the same time, you know, how would we use the EBITDA and use it for our expense to rather fund the future revenue or future bookings or conversion to pipeline? That would be our priority. And we would see how the CP turns out. It's a secondary metric. We don't think that's our focus. And over and over time, we have seen it, that EBITDA margins can get better, whether CP margins are getting better or not.

Dushyant Sharma: So what you're seeing is we are a very industry agnostic platform approach with one single code base, we're going to different customers and able to offer them what they never thought was possible with one platform. And that's in as a result of what's happening is we are becoming better as a company on voting some of that experience experience as well just because of the automation and different functionality we have added to the platform.

Sanjay Kalra: We don't think that's our focus. And over and over again, we have seen that EBITDA margins can get better, whether CP margins are getting better or not. Actually, they are getting better as well. But I mean, even if they don't, we have a pretty solid model in terms of how closely we can manage the CP operation together with the operating expenses and how we can calibrate that. I mean, I'll give you a very clear example in Q2 itself.

Andrew Bauch: Actually, they are getting better as well, but I mean, even if they don't, we have a pretty solid model in terms of how closely...

Dushyant Sharma: Yeah, that's great to hear. Just a quick one is just on also on your, I mean, your net cash is $199 million and it continues to move higher. So if you could just remind us of the M&A strategy, what would be an area you'd look to further invest and do with some horizon. Thanks guys. Nice job. Thank you. Thank you so much. I think on the M&A side, I think we will remain opportunistic as you can see from our profile, frankly, and we get hit by all almost any book, which is of any size, whether it's small tokens or larger companies, it's not easy to find companies, which are a creature to our profile, the top top line growth, as well as the bottom line.

Andrew Bauch: We can manage the CP operation together with the operating expense and how we can calibrate that.

Sanjay Kalra: We ended up spending a little bit more on OPEX, and we made a decision, a conscious decision to do that because our CP came in much better. And in the past, at times we have done that, at times we have not. And we would manage the same strategy going forward as well. So I don't think CP is actually playing a significant role in driving the EBITDA margin. In fact, working on it together with OPEX is, but that all comes from revenue.

Sanjay Kalra: I mean, I'll give you a very clear example in Q2 itself. We ended up spending a little bit more on our backs. And we made a decision, a conscious decision to do that because our CP came in much better. And in the past, at times we have done; at times we have not. And we would manage the same strategy going forward as well. So I don't think CP is actually playing a significant role in describing our EBITDA margin. In fact, working of it together with OPEX is, but that all comes from revenue. So overall, I think the strategy and the message we want to communicate in this regard is that the guidance is what we have and pretty thoughtful guidance.

Speaker Change: and I'll give you a very clear example in Q2 itself.

Speaker Change: We ended up spending a little bit more on op-eds.

Speaker Change: and we made a decision, a conscious decision to do that because our CP came in much better.

Dushyant Sharma: But as we do a do take a look at them, we will, we will remain opportunistic. There isn't a single functionality gap, which we can think of that road necessities for us to actually make an acquisition, but we are opportunistic. We are taking a look at what is out there. Got it. Nice guys. Thank you.

Speaker Change: And in the past, at times we have done, at times we have not. And we would manage the same strategy going forward as well. So I don't think CP is actually playing a significant role in driving over a bit the margin. In fact, working of it together with OPEX is, but that all comes from revenue. So overall, I think the strategy and the message which we wanted to communicate.

Sanjay Kalra: So overall, I think the strategy and the message we wanted to communicate in this regard is that the guidance is what we have and pretty thoughtful guidance. But at the same time, the focus is on two primary metrics, which are growing year over year at a good pace.

Sanjay Kalra: But at the same time, the focus is on two primary metrics, which are growing year over year at a good. No, it's nice to have that flexibility when the business is firing like it is.

Speaker Change: In this regard is that the guidance is what we have and pretty thoughtful guidance, but at the same time, the focus is on two primary metrics, which are growing year over year at a good pace.

Andrew Bauch: Now it's nice to have that flexibility when the business is firing like it is. I guess I'll just stick with the second quarter. You know, the one thing that sticks out is that you accelerated from Unknown Attendee, Dushyant Sharma, Sanjay Kalra, Zachary Gunn, Jieli Lu, Paymentus Hldg, being kind of the lead in that. Is there anything that you can point to that drove that transaction number higher, be it intra-quarter, that was visible to you?

Sanjay Kalra: I guess just sticking back on the second quarter, you know, the one thing that sticks out is that, you know, you accelerated from a two-year-kager basis, from 21% that you run at the last two quarters to 25, so it's significantly tougher cop, a second quarter to 23, and you called out the transactions being kind of the lead in that, but is there anything that you can point to that drove that transaction number higher, be it in for quarter, that was visible to you? I would say there are two things. One is they are seeing a very good same-store sales growth, okay, our existing customers, they are seeing good transactions from them and much better than what we are originally expecting than we sign them up.

Speaker Change: It's nice to have that flexibility when the business is firing like it is. I guess, just sticking back on the second quarter, you know, the one thing that sticks out is that, you know, you accelerated from...

Speaker Change: 2-year cager basis from 21% that you've run it for the last 2-quarters to 25, so it's significantly tougher cop at 2nd quarter 23 and you call about the transactions being kind of the lead in that, but it...

Andrew Bauch: The next question is from the line of Andrew Bauch with Wells Fargo.

Andrew Bauch: Your line is not open. Hey guys, thanks for taking the question. Just wanted to pick up a guide here. You know, you beat contribution profit by seven and a half and a second quarter raised, eight and a half in the full year. So about another million in the back half. But then on the EBITDA side, you beat by four and a half and raised by eight, so three and a half incremental.

Speaker Change: is there anything that you can point to that drove that transaction number higher, be it in for quarter, that was a visible to you.

Sanjay Kalra: I would say there are two things. One is that we are seeing very good same-store sales growth. Okay, our existing customers, we are seeing good transactions from them, and much better than what we were originally expecting when we signed them up. Again, the second thing I would say is that the new billers which are coming, which are getting implemented, their pace, as I said, is probably one of the best at this point in time. So a combination of both these facts is generating a higher result in transactions.

Speaker Change: I would say there are two things. One is we are seeing a very good same store sales growth.

Sanjay Kalra: Any kind of thoughts about around, you know, with those, that incremental rates who are just the EBITDA is just a function of the high incremental margins, or, you know, if you run at these levels, incremental margins, what is the motivation to kind of think about putting that back into sales? Well, Andrew, I like to just say one thing which we both said in the prepared remarks, you know, businesses doing great. The two quarters have been amazing, exceptionally well.

Speaker Change: Okay, our existing customers, we are seeing good transactions from them and much better than what we're originally expecting than we signed them up.

Andrew Bauch: Okay, and the second thing I would say is that the new billers which are coming, which are getting implemented, dear face, as I said, is probably one of the best at this point in time. So a combination of both these facts is generating a higher result in transactions.

Speaker Change: Again, the second thing I would say is that the new billers which are coming, which are getting implemented, their pace, as I said, is probably one of the best at this point in time. So, a combination of both these facts is generating a higher result in transactions.

Sanjay Kalra: Maybe if I could just kind of press you a little bit further on that. I mean, why do you think the same-store sales are coming in so strong? Well, it's increased adoption by the billers who are rolling out our platform. Used to be our customers, and we help them in that as well. That's one part of it. And as this business generates, we are moving to a more digitalized world as more young generation comes on and start paying the bills, they would prefer using the platforms rather than the old methods. So I think there is an inherent increase in the transactions, which is built in just based on the business model itself.

Andrew Bauch: Maybe I could just kind of press you a little bit further on that. I mean, why do you think the same source sales are coming?

Speaker Change: Maybe if I could just kind of press you a little bit further on that. I mean why do you think the Sainsbury's sales are coming in so strong?

Sanjay Kalra: We are on a path of executing really well. We are keeping overhead straight and being very thoughtful in terms of how we are giving the guidance. At the same time, you know, how would we use the EBITDA and use it for our expense to rather find the future revenue or future bookings or conversion to pipeline. That would be our priority. And we would see how the CP turns out. It's a secondary metric.

Sanjay Kalra: Well, it's increased adoption by the billers who are rolling out our platform to their customers, and we help them in that as well. That's one part of it.

Speaker Change: Well, it's increased adoption by the billers who are rolling out our platform used to their customers and we help them in that as well. That's one part of it. And as this business generates, we are moving to a more digitalized world as more young generation comes on and start paying the bills, they would prefer using the platforms rather than the old methods. So, I think there is an inherent increase in the transactions which is built in just based on the business model itself. And at the same time, other things like the new additional bookings and additional implementations are just adding an accelerator on top of it.

Sanjay Kalra: We don't think that's our focus. And over and over time, we have seen it that EBITDA margins can get better, whether CP margins are getting better or not. Actually, they are getting better as well, but I mean, even if they don't, we have a pretty solid model in terms of how closely we can manage the CP operation together with the operating expense and how we can calibrate that. I mean, I'll give you a very clear example in Q2 itself.

Sanjay Kalra: And as you know, this business generates revenue. We are moving to a more digitalized world. As more young generation come on and start paying the bills, they would prefer using platforms rather than the old methods. So I think there is an inherent increase in transactions which is built in just based on the business model itself. And at the same time, other things like the new additional bookings and additional implementations are just adding an accelerator on top of it.

Andrew Bauch: And at the same time, other things like the new additional bookings and additional implementations are just adding an accelerator on top of it. And Andrew, we are making a benefit there. Yes, and we are also being considered at first to make sure that our clients are able to get the best from our platform by getting more and more customers on our platform. Thanks, so very helpful detail. Thank you.

Sanjay Kalra: And Andrew, we are making concessions. Yes, and we are also making considerate efforts to make sure that our clients are able to get the best from our platform by getting more and more customers on our platform.

Speaker Change: And Andrew, we are making concessions.

Andrew Bauch: Yes, and we are also making considerate efforts to make sure that our clients are able to get the best from our platform by getting more and more customers on our platform.

Sanjay Kalra: We ended up spending a little bit more on our backs. And we made a decision, a conscious decision to do that because our CP came in much better. And in the past, at times we have done, at times we have not. And we would manage the same strategy going forward as well.

Andrew Bauch: Thanks, so very helpful detail.

Sanjay Kalra: So I don't think CP is actually playing a significant role in describing our EBITDA margin. In fact, working of it together with OPEX is, but that all comes from revenue. So overall, I think the strategy and the message we want to communicate in this regard is that the guidance is what we have and pretty thoughtful guidance. But at the same time, the focus is on two primary metrics which are growing year over year at a good.

Operator: Thank you. The next question is from the line of John Davis with Raymond James. Your line is now open.

John Davis: The next question is from the line of John Davis with Raymond James. Your line is now open. Hey, good afternoon, guys. I wanted to hit a little bit more on incremental margins. Very strong at 49% of this quarter. I think the full year implies like 46. That is a little bit of a step down from last year. I think it was like 74. I know this year, you kind of talked about more balancing growth and investment. The last year was kind of really showing the bottom line strength.

Speaker Change: Thank you. The next question is from the line of John Davis with Raymond James. Your line is now open.

John Davis: Hey, good afternoon, guys. Sanjay, I wanted to hit a little bit more on incremental margins. Very strong at 49% this quarter. I think the full year implies like 46%. Yeah, that is a little bit of a step down from last year. I think it was like 74.

John Davis: Hey, good afternoon guys. Sanjay, I wanted to hit a little bit more on incremental margins. Very strong at 49% this quarter. I think the full year implies like 46.

Sanjay Kalra: I know, you know, this year, you kind of talked about more balancing growth and investments, and last year was kind of really showing the bottom line strength. But you know, is this call it 45 50% incremental margins kind of the right way to think about this business where you can balance growth and investments or potentially when you step up investments and take incremental margins down, if, if you see the opportunity? Just trying to think about that longer term and how you guys think about it.

Speaker Change: Yeah, that is a little bit of a step down from last year. I think it was like 74. I know this year you kind of talked about more balancing growth and investment than last year was kind of

Andrew Bauch: No, it's nice to have that flexibility when the business is firing like it is. I guess just sticking back on the second quarter, you know, the one thing that sticks out is that, you know, you accelerated from a two-year-kager basis, from 21% that you run at the last two quarters to 25, so it's significantly tougher cop, a second quarter to 23, and you called out the transactions being kind of the lead in that, but is there anything that you can point to that drove that transaction number higher, be it in for quarter, that was visible to you?

John Davis: But is this called 45-50% incremental margins kind of right way to think about this business where you can balance growth and investments, or potentially when you step up investments and take incremental margins down. If you solve the opportunity, you're trying to think about that longer term and how you have to think about it.

Speaker Change: Dushyant Sharma, David Hanover, Sanjay Kalra

John Davis: John, that's a great question. You know, the interesting part is, as you grow and as you improve your EBITDA margin dollars, and you increase your adjusted EBITDA margins, which is the whole goal, which is the entire goal of the primary matrix in driving the business, it still leaves a question, okay, the incremental margins are kind of, why are they not growing? Eventually, the business is growing. That's the bottom line

Sanjay Kalra: John, that's a great question. Interesting part is as you grow and as you improve your EBITDA margin dollars and you increase your adjusted EBITDA margins itself, which is the whole goal, which is the entire goal of primary matrix and driving the business, it still leaves the question, okay, the incremental margins are kind of via the end of growing. Eventually, the business is growing. That's the bottom line, and just EBITDA margins are growing. Overall, I would say if, like in Q1, we were 28.5% margin. In Q2, we are 29.5%. We are guiding to 26.2, and last year in Q3, we were 25.2.

Speaker Change: John , that's a great question. You know interesting part is as you grow and as you improve your EBITDA margin dollars

Speaker Change: and you increase your adjusted EBITDA margins itself.

Speaker Change: which is the whole goal, which is the entire goal of primary matrix in driving the business. It still leaves the question, okay, the incremental margins are kind of... Why are they not growing? Eventually, the business is growing, that's the bottom line. And just to be, the margins are growing. And overall, I would say...

Andrew Bauch: I would say there are two things. One is they are seeing a very good same-store sales growth, okay, our existing customers, they are seeing good transactions from them and much better than what we are originally expecting than we sign them up. Okay, and the second thing I would say is that the new billers which are coming, which are getting implemented, dear face, as I said, is probably one of the best at this point in time. So a combination of both these facts is generating a higher result in transactions.

Sanjay Kalra: Adjusted EBITDA margins are growing. And overall, I would say, if, like in Q1, we were 28.5% margin. In Q2, we are at 29.5%. We are guiding to 26.2%. And last year, in Q3, we were 25.2%. In every direction, there is growth year over year as well. And for the full year itself, we are raising. The bottom line is that adjusted EBITDA margins should grow. Could incremental margins fluctuate? Yes, they could.

Speaker Change: If, like in Q1 we were 28.5% margin, in Q2 we are 29.5%.

Speaker Change: We are guiding to 26.2 and last year in Q3 we were 25.2. Every direction there is a growth year over year as well, and for the full year itself we are raising. The bottom line is the margins should grow. Could incremental margins fluctuate? They could. But given that kind of flexibility we have, I think it gives us more opportunity to spend as and when we see the opportunity in front of us to generate future bookings, conversion of pipeline to bookings, that's the whole benefit of this operating leverage, that when can we use it. And when we see the opportunities, we will use it. But as of now, there is no proper guide I can give you to think about incremental margins.

Sanjay Kalra: Every direction there is a growth year over year as well, and for the full year itself, we are raising. The whole bottom line is it just EBITDA margins should grow. According to mental margins fluctuate, they could; but given that kind of flexibility we have, I think it gives us more opportunity to spend as and when we see the opportunity in front of us to generate future bookings, conversion of pipeline to bookings. That's the whole benefit of this operating leverage that then can be used. When we see the opportunity, we will use it.

Sanjay Kalra: Maybe if I could just kind of press you a little bit further on that. I mean, why do you think the same-store sales are coming in so strong? Well, it's increased adoption by the billers who are rolling out our platform used to be our customers, and we help them in that as well. That's one part of it. And as this business generates, we are moving to a more digitalized world as more young generation comes on and start paying the bills, they would prefer using the platforms rather than the old methods.

Sanjay Kalra: But given that kind of flexibility we have, I think it gives us more opportunity to spend as and when we see the opportunity in front of us to generate future bookings, conversion of pipeline to bookings. That's the whole benefit of this operating leverage, that when can we use it? And when we see the opportunities, we will use them. But as of now, there is no proper guide I can give you to think about incremental adjusted margins.

Sanjay Kalra: But as of now, there is no proper guide. I can give you to think about incremental margins. I can definitely give you a guide that our goal is to grow EBITDA dollars 20 to 30% every year, and that should generate in a very good rule of 40 as well, which we have consistently delivered. At the same time, I would expect this to generate good EBITDA margins. Okay, no, that's helpful.

Sanjay Kalra: I can definitely give you a guide that our goal is to grow EBITDA dollars 20 to 30% every year. And that should generate a very good ROE of 40 as well, which we have consistently delivered. At the same time, I would expect this to generate good EBITDA margins.

Sanjay Kalra: So I think there is an inherent increase in the transactions which is built in just based on the business model itself. And at the same time, other things like the new additional bookings and additional implementations are just adding an accelerator on top of it. And Andrew, we are making a benefit there. Yes, and we are also being considered at first to make sure that our clients are able to get the best from our platform by getting more and more customers on our platform.

Speaker Change: I can definitely give you a guide that our goal is to grow a beat that dollars 20 to 30% every year and they should generate in a very good rule of 40 as well, which we have consistently delivered at the same time I would expect this dish to generate good if beat the margins too.

Andrew Bauch: Thanks, so very helpful detail.

John Davis: Okay, no, that's helpful. And then, Dushyant, you know, it was noteworthy in your prepared remarks that you called out increased IPN activity as one of the upside drivers. So just looking to get kind of an update there, you're willing to kind of break out what kind of either percentage revenue, percentage of transactions, or just a general update there, but it was noticeable that you called that out.

John Davis: And then Dushyant, you know, it was nowhere to be in the prepared remarks. You called out increased the IPN activity as one of the upside drivers. So just looking to get kind of an update there. You know, we want to kind of break out what kind of either percentage revenue versus transactions or just a general update there, but tell us noticeable as you hold that out. Thank you.

Unknown Attendee: Thank you.

Speaker Change: Okay, no, that's helpful. And then, Dushyant, you know.

Dushyant Sharma: It was noteworthy in the prepared remarks you called out increased IPN activity.

Speaker Change: as one of the upside drivers. So just looking to get kind of an update there. They were willing to kind of break out what kind of either percentage revenue, percentage of transactions, or just a general update there, but it was noticeable that you called that out.

Dushyant Sharma: Thank you. Thank you, John, for the question. Actually, what I would say is, at this stage, IPN is such an inherent part of our offering that it's not a separate or distinct product or solution, if you will. It's more or less about who are the participants and where they're coming from and how the transactions are being processed. So take an example, a bank originating a transaction or a credit union originating a transaction to a billing company that is actually on our system. That entire transaction is routed using our instant payment network.

Dushyant Sharma: John for the question. Actually, what I would say is at this stage, IPN is such an inherent part of our offering that it is not a separate or distinct product or solution, if you will. It's more or less like who are the participants and where they're coming from coming from and how the transactions are being processed. So take an example, a bank originating a transaction or a credit union or originating a transaction to a billing company that actually is on our system. That entire transaction is routed using our incident payment network. Likewise, to the bill or who is on our platform, they are seeing the same benefit of receiving the transaction outside of their own ecosystem through IPN from a bank or credit union or other protect providers from our vantage point right now.

Speaker Change: Thank you. Thank you, John , for the question. Actually, what I would say is...

John Davis: The next question is from the line of John Davis with Raymond James. Your line is now open. Hey, good afternoon guys. I wanted to hit a little bit more on incremental margins. Very strong at 49% of this quarter. I think the full year implies like 46. That is a little bit of a step down from last year. I think it was like 74. I know this year, you kind of talked about more balancing growth and investment. The last year was kind of really showing the bottom line strength.

Speaker Change: At this stage, IPN is such an inherent part of our offering.

Speaker Change: There is not a separate or distinct product or solution, if you will. It's more or less like who are the participants and where they're coming from and how the transactions are being processed. So take an example, a bank originating a transaction or a credit union originating a transaction.

Sanjay Kalra: But is this called 45-50% incremental margins kind of right way to think about this business where you can balance growth and investments or potentially when you step up investments and take incremental margins down. If you solve the opportunity, you're trying to think about that longer term and how you have to think about it. John, that's a great question. Interesting part is as you grow and as you improve your EBITDA margin dollars and you increase your adjusted EBITDA margins itself, which is the whole goal, which is the entire goal of primary matrix and driving the business, it still leaves the question, okay, the incremental margins are kind of via the end of growing.

Speaker Change: to a billing company.

Speaker Change: That actually is on our system, that entire transaction is routed using our instant payment network.

Dushyant Sharma: Likewise, the biller who is on our platform, they are seeing the same benefit of receiving the transaction outside of their own ecosystem through IPN from a bank or credit union or other fintech providers. From our vantage point right now, this is one of the key reasons for what we are seeing is an inflection point, so to speak, for our business, where we are signing large clients in diverse verticals, including clients who actually used to be somewhat more focused on in-house solutions.

Speaker Change: Likewise, to the biller who is on our platform, they are seeing the same benefit of receiving the transaction outside of their own ecosystem through IPN from a bank or credit union or other fintech providers.

Dushyant Sharma: This is one of the key reasons for what we are seeing is an inflection point. So to speak for our business where we are signing a large clients in diverse verticals, including the clients who actually used to be somewhat more focused on in-house solutions. And now they've concluded that their platform, like they meant us, with profile, like they meant us, and ecosystem, like IPN. It's very hard to replicate, and they feel more and more comfortable going with us. So IPN is a differentiated sales tool for us as well as a differentiated product offering and not a separate product.

Speaker Change: From our vantage point right now, this is one of the key reasons

Speaker Change: for what we are seeing is a

Speaker Change: inflection point so to speak for our business where we are signing a large clients

Speaker Change: in diverse verticals, including the clients who actually used to be somewhat more focused on in-house solutions and now they've concluded that they're platform like they meant in-house solutions.

Dushyant Sharma: And now they've concluded that a platform like Paymentus, with a profile like Paymentus and an ecosystem like IPN, is very hard to replicate, and they feel more and more comfortable going with us. So IPN is a differentiated sales tool for us, as well as a differentiated product offer, and not a separate product. However, it is catalyzing our sales; it is catalyzing our transaction growth. And frankly, long term, as I've shared in the past, it will catalyze the interchange cost center into the interchange rate.

Sanjay Kalra: Eventually the business is growing. That's the bottom line and just EBITDA margins are growing. Overall, I would say if like in Q1, we were 28.5% margin. In Q2, we are 29.5%. We are guiding to 26.2 and last year in Q3, we were 25.2. Every direction there is a growth year over year as well and for the full year itself, we are raising. The whole bottom line is it just EBITDA margins should grow.

Speaker Change: with profile like Paymentus and ecosystem like IPN, it's very hard to replicate and they feel more and more comfortable going with us. So IPN is a differentiated sales tool for us as well as a differentiated product offering.

Dushyant Sharma: However, it is catalyzing our sales; it is catalyzing our transaction growth. And frankly, long term, as I've shown in the past, it will catalyze the interchange cost center into interchange revenues.

Speaker Change: and not a separate product. However, it is catalyzing our sales, it is catalyzing our transaction growth, and frankly, long-term, as I've shared in the past, it will catalyze the interchange cost center into interchange revenues.

Sanjay Kalra: According to mental margins fluctuate, they could but given that kind of flexibility we have, I think it gives us more opportunity to spend as and when we see the opportunity in front of us to generate future bookings, conversion of pipeline to bookings, that's the whole benefit of this operating leverage that then can be used. When we see the opportunity, we will use it. But as of now, there is no proper guide.

John Davis: No, super helpful. Thanks, guys.

John Davis: No, that's super helpful. Thanks, guys.

Andrew Polkowitz: Thank you. The next question is from the line of Andrew Polkowitz with JP Morgan. Your line is now open. Good afternoon, guys, and congrats on the results. I wanted to throw in a little bit on your comments. I wanted to throw in and ask you guys about the increase in efficiency and implementation timing. I know you said there were several areas driving that.

Speaker Change: Thank you. The next question is from the line of Andrew Polkowicz with JP Morgan. Your line is now open.

Operator: Good afternoon, guys, and congratulations on the results. I wanted to drill in a little bit on your comments. Unknown Speaker I wanted to drill in and ask you guys about

Sanjay Kalra: I can give you to think about incremental margins. I can definitely give you a guide that our goal is to grow EBITDA dollars 20 to 30% every year and that should generate in a very good rule of 40 as well, which we have consistently delivered. At the same time, I would expect this generate good EBITDA margins. Okay, no, that's helpful.

Andrew Polkowicz: Good afternoon guys and congrats on the results.

Andrew Polkowicz: I wanted to take a drill in a little bit on your comments.

Andrew Polkowicz: I wanted to drill in and ask you guys about the increase in efficiency and implementation timing. I know you said there were several areas driving that, so I wanted to ask, is it having to do with just an increase in manpower, or are there certain areas you could point to that kind of increased your internal velocity?

Dushyant Sharma: So I wanted to ask, is it having to do with just an increase in manpower, or are there certain areas you could point to do that kind of increase your internal velocity? Actually, a great question. Andrew, and very pleased to provide additional color because I think our team who might be in the call or read the script later on actually will be very pleased with these remarks because it speaks to the hard work and education they've all put in. So, if I take you back a couple of years, the reason some of the delays occurred was we were dealing with the pandemic and not being able to meet the customers and so on.

Dushyant Sharma: Actually, great question, Andrew, and I'm very pleased to provide additional color because I think our team who have who might be on the call or they may read the script later on will be very pleased with these remarks because it speaks to the hard work and dedication they've all put in. So if I take you back a couple of years, the reason some of the delays occurred was we were dealing with a pandemic and not being able to meet the customers and so on.

Speaker Change: Actually, great question, Andrew, and I'm very pleased to provide additional color because I think

Speaker Change: Our team, who might be on the call, or they may read the script later on, actually will be very pleased with these remarks, because it speaks to the hard work and dedication they've all put in.

John Davis: Actually, what I would say is at this stage, IPN is such an inherent part of our offering that is not a separate or distinct product or or solution, if you will. It's more or less like who are the participants and where they're coming from coming from and how the transactions are being processed. So take an example, a bank originating a transaction or a credit union or originating a transaction to a billing company that actually is on our system that entire transaction is routed using our incident payment network.

Speaker Change: So, if I take you back a couple of years, the reason some of the delays occurred was

Dushyant Sharma: And now the fact that we are able to meet our customers, especially the customers who move the needle and the large clients, we are actually in their offices, we are whiteboarding their solutions, and so on, is contributing. But also, we have made a key decision that Paymentus is going to create a center of excellence in onboarding, which used to be our strength. But as we got into the largest end of the market, the complexity and the workflows required us to spend more time getting customers onboarded.

Dushyant Sharma: And now the fact that we are able to meet our customers, especially the customers who moved the needle in the large clients, we are actually in their offices, we are white boarding their solutions and so on, is contributing. But also, we have made a key decision that Paymentus is going to create a center of excellence in onboarding, which used to be our strength. But as we got into the largest end of the market, the complexity and the workflows required us to spend more time getting customers onboarded. And now, based on those learnings, we are now automating, we are improving the workflow engine Paymentus already has by automating some of those capabilities.

Speaker Change: We were dealing with pandemic and not being able to meet the customers and so on, and now the fact that we are able to meet our customers, especially the customers who move the needle and the large clients, we are actually in there.

Speaker Change: In their offices we are white boarding their solutions and so on is contributing

Speaker Change: But also, we have made a key decision that Pementus is going to create a central excellence in onboarding, which used to be our strength, but as we got into the largest end of the market.

John Davis: Likewise, to the bill or who is on our platform, they are seeing the same benefit of receiving the transaction outside of their own ecosystem through IPN from a bank or credit union or other protect providers from from our vantage point right now. This is one of the key reasons for what we are seeing is a inflection point. So to speak for our business where we are signing a large clients in diverse verticals, including the clients who actually used to be somewhat more focused on in house solutions.

Speaker Change: The complexity and the workflows required us to spend more time getting customers on boarded.

Dushyant Sharma: And now, based on those learnings, we are now automating, and we are improving the workflow engine Paymentus already has by automating some of those capabilities. So all of that is coming to fruition and adding to the capabilities of onboarding customers of diverse and complex workflows onto our platform with ease. I'm very pleased to say that a vast majority of all of our customers get implemented on our platform without a single line of code change.

Speaker Change: And now, based on those learnings, we are now automating, we are improving the workflow engine Paymentus already has by automating some of those capabilities. So all of that is coming to fruition and adding to the capabilities of onboarding customers.

Dushyant Sharma: So, all of that is coming to fruition and adding to the capabilities of onboarding customers, of diverse and complex workflows onto our platform with ease. And very pleased to say that the vast majority of all our customers get implemented on our platform without a single line of code change, meaning not even the integrations required any change, not any workflow or any business rules required any change. So, and that's a constant pursuit we'll continue to make investments there, but it is one of the key areas of the focus for the team.

Speaker Change: of diverse and complex workflows onto our platform with ease. I'm very pleased to say that a vast majority of all of our customers get implemented on our platform.

John Davis: And now they've concluded that their platform like they meant us with profile like they meant us and ecosystem like IPN. It's very hard to replicate and they feel more and more comfortable going with us. So IPN is a differentiated sales tool for us as well as a differentiated product offering and not a separate product. However, it is catalyzing our sales, it is catalyzing our transaction growth. And frankly, long term as I've shown in the past, it will catalyze the interchange cost center into interchange revenues. No, super helpful. Thanks, guys. Thank you.

Dushyant Sharma: I mean, meaning not even the integrations require any change; not any workflow or any business rules require any change. So, and that's a constant pursuit. We'll continue to make investments there, but it is one of the key areas of the focus for the team.

Speaker Change: without a single line of code change. I mean, meaning, not even the integrations required any change, not any workflow or any business rules require any change. So and that's a constant pursuit, we'll continue to make investments there. But it is one of the key areas of the focus for the team.

Sanjay Kalra: That's great to hear. One follow. If you mentioned the strong pipeline exiting the corridor, I wanted to ask, is there any potential for, you know, upsides of bookings, driving benefit to 2024? Or is that more of a 2025 story and sort of building on that question? What could be potential upside drivers or surprises that would cause you to, you know, see benefit versus your implied second half outlook? Well, Andrew, I would say that the pipeline that we've seen in front of us is more of a, you know, beyond 2024 revenue opportunity for us. For this current year, we are not baking any expectations from the pipeline to convert the bookings and then to revenue for 24.

Andrew Bauch: That's great to hear. One follow-up question, you mentioned the strong pipeline exiting the quarter. I wanted to ask, is there any potential for, you know, upsides of bookings driving benefit to 2024? Or is that more of a 2025 story and sort of building on that question? What could be potential upside drivers or surprises that would cause you to, you know, see benefit versus your implied second half outlook?

Speaker Change: That's great to hear. And one follow. If you mentioned the strong pipeline exiting the corridor, I wanted to ask is there any potential for...

Speaker Change: You know, upsides of bookings driving benefit to 2024, or is that more of a 2025 story and sort of building on that question? What could be potential upsides drivers or surprises that would cause you to, you know, see benefit versus your implied second half outlook?

Andrew Polkowitz: The next question is from the line of Andrew Polkowitz with JP Morgan. Your line is now open. Good afternoon, guys, and congrats on the results. I wanted to throw in a little bit on your comments. I wanted to throw in and ask you guys about the increase in efficiency and implementation timing. I know you said there were several areas driving that. So I wanted to ask, is it having to do with just an increase in manpower or there are certain areas you could point to do that kind of increase your internal velocity?

Sanjay Kalra: Well, Andrew, I would say that the pipeline which we see in front of us is more of a, you know, beyond 2024 revenue opportunity for us. For this current year, we are not making any expectations from the pipeline to convert to bookings and then to revenue for 2024. That cycle, I would say very clearly, you should not put that in your models. That is not possible.

Andrew: Andrew, I would say that the pipeline which we see in front of us

Andrew: is more of a, you know, beyond 2024 revenue opportunity for us. For this current year, we are not making any expectations from the pipeline to convert to bookings and then to revenue for 2024. That cycle, I would say very clearly, you should not put that in your models. That is not possible.

Sanjay Kalra: At the same time, I would say the pipeline in front of us could be converted to bookings and how we operate, and definitely that's going to be an upside for 2025 and 26 and beyond, depending upon how large and how big the contracts we get and for how much duration. So the short answer is no for 24, but 25 and beyond. And as to 2024 itself, I think we are working very hard to onboard as many clients as we can, and some of that is already factored in.

Sanjay Kalra: That cycle, I would say very clearly, you should not put that in your models. That is not possible. At the same time, I would say the pipeline front of us could be converted to bookings, and how we operate, and definitely that's going to be an upside for 2025 and 26 and beyond, depending upon how large and how big contracts we get and for how much duration. So short answer is no for 24, but 25 and beyond.

Speaker Change: At the same time, I would say the pipeline in front of us could be converted to bookings and how we operate and definitely that's going to be an upside for 2025 and 26 and beyond depending on how large and how big contracts we get and how much duration.

Dushyant Sharma: Actually, a great question. Andrew, and very pleased to provide additional color because I think our team who might be in the call or read the script later on actually will be very pleased with these remarks because it speaks to the hard work and education they've all put in. So, if I take you back a couple of years, the reason some of the delays occurred was we were dealing with pandemic and not being able to meet the customers and so on.

Speaker Change: So short answer is no for 24, but 25 and beyond.

Operator: And as to 2024 itself, I think we are working very hard to onboard as many classes as we can, and some of that is already factored into book items. Great, thanks. Thank you. Again, as a reminder, if you'd like to ask a question, please dial *1.

Speaker Change: Dushyant Sharma, David Hanover, Sanjay Kalra,

Speaker Change: And as to 2024 itself, I think we are working very hard to onboard as many clients as we can, and some of that is already factored into our guidance.

Dushyant Sharma: And now the fact that we are able to meet our customers, especially the customers who moved the needle in the large clients, we are actually in their offices, we are white boarding their solutions and so on, is contributing, but also we have made a key decision that Paymentus is going to create a center of excellence in onboarding, which used to be our strength, but as we got into the largest end of the market, the complexity and the workflows required us to spend more time getting customers onboard it, and now based on those learnings, we are now automating, we are improving the workflow engine, Paymentus already has by automating some of those capabilities. So, all of that is coming to fruition and adding to the capabilities of onboarding customers, of diverse and complex workflows onto our platform with ease.

Speaker Change: Dushyant Sharma, David Hanover,

Speaker Change: Great, thanks.

Operator: Thank you. Again, as a reminder, if you'd like to ask a question, please dial star one. The next question is from the line of Matt O'Neill with FT Partners. Your line is now open.

Speaker Change: Thank you.

Speaker Change: Thank you. Again, as a reminder, if you'd like to ask a question, please dial star 1.

Matt O'Neill: The next question is from the line of Matt O'Neill with FD Partners. Your line is now open. Oh yes, thanks. Good evening, everybody. A lot of great questions have already been asked and answered, and followed results here. Just curious to Sean, you know, really understand the direction of the business financially and the target that you and Tanya have laid out. Kind of curious if we turn it more internally.

Speaker Change: The next question is from the line of Matt O'Neill with FT Partners. Your line is now open.

Matt O'Neill: Yes, thanks. Good evening, everybody.

Anil: Yes, thanks, Anil.

Matt O'Neill: Good evening, everybody. A lot of great questions already asked and answered and solid results here.

Speaker Change: just carries this on, you know, really understand the direction of the business financially and the targets.

Matt O'Neill: that you and Sanjay have laid out. Kind of curious if we turn it more internally, you know, how would you characterize the top strategic priorities? What are you telling the employees that are going to ultimately drive those financial outcomes that you've been executing so well against? Thank you.

Dushyant Sharma: How would you characterize the top strategic priorities? What are you telling the employees that are going to ultimately drive those financial outcomes that you've been executing so well again? Thank you. Great question, actually. I'm so glad this question is asked. I mean, we are the team. I think one of the key focuses for us is being able, as you can imagine, our clients are trusting us with two of the most important assets they have in their business. Number one, their clients, and number two, their revenues or money. Without that, there is no business, and as a result, increasingly, our business has become more and more central to any business who is partnering with Paymentus. As a result, one of the key areas our team needs to continue to focus on and invest in is operational excellence and innovation.

Matt O'Neill: A lot of great questions already asked and answered, and solid results here. Just curious, Dushyant, you really understand the direction of the business financially and the targets that you and Sanjay have laid out. Kind of curious if we turned it more internally, you know; how would you characterize the top strategic priorities? What are you telling the employees that are going to ultimately drive those financial outcomes? That you've been executing so well again. Thank you. Great question. Actually, I'm so glad you asked.

Dushyant Sharma: Great question. Actually, I'm so glad this question is being asked.

Dushyant Sharma: And very pleased to say that vast majority of all our customers get implemented on our platform without a single line of code change, meaning not even the integrations required any change, not any workflow or any business rules required any change. So, and that's a constant pursuit we'll continue to make investments there, but it is one of the key areas of the focus for the team.

Speaker Change: Great question. Actually, I'm so glad this question is asked. I mean, we as a team, I think one of the key focus for us is

Dushyant Sharma: I mean, we as a team. I think one of the key focus for us is being able to, as you can imagine, our clients are trusting us with two of the most important assets they have in their business. Number one, their clients, and number two, their revenues or money. Without that, there is no business, and as a result... Increasingly, our business has become more and more central to any business that is partnering with Paymentus.

Speaker Change: Being able, as you can imagine, our clients are trusting us with two of the most important assets they have in their business. Number one, their clients, and number two, their revenues or money.

Speaker Change: Without that, there is no business, and as a result...

Andrew Polkowitz: That's great to hear. One follow. If you mentioned the strong pipeline exiting the corridor, I wanted to ask, is there any potential for, you know, upsides of bookings, driving benefit to 2024? Or is that more of a 2025 story and sort of building on that question? What could be potential upside drivers or surprises that would cause you to, you know, see benefit versus your implied second half outlook? Well, Andrew, I would say that the pipeline that we've seen front of us is more of a, you know, beyond 2024 revenue opportunity for us.

Speaker Change: Increasingly, our business has become more and more central to any business who is partnering with Paymentus. And as a result,

Dushyant Sharma: And as a result, one of the key areas our team needs to continue to focus on and invest in is operational excellence and innovation. So my message to the team, and we are basically all in this thing together, where we are saying, If we continue to innovate, continue to listen to our customers, continue to innovate, as a result of those lessons from our customers, no one is perfect, we certainly are not, but we are very willing to listen, improve, and innovate and bring those innovations to market to help our customers.

Speaker Change: One of the key areas our team needs to continue to focus on and invest in is operational excellence and innovation. So my message to the team, and we are basically all in this thing together, where we are saying

Dushyant Sharma: So my message to the team, and we are basically all in this thing together where we are saying, if we continue to innovate, continue to listen to our customers, continue to innovate, as a result of those lessons from the clients, no one is perfect. We certainly are not, but we are very willing to listen and improve and innovate and bring those innovations to market to help our customers. And number two, we want to do it in a way that we are operationally excellent. We are efficient. We know that in this, in this market, our investors are expecting us to do great things, which we are doing. By the same time, they want us to do it profitably, which is son of a good business or in some with a great business.

Speaker Change: If we continue to innovate, continue to listen to our customers, continue to innovate.

Speaker Change: As a result of those lessons from the clients, no one is perfect, we certainly are not, but we are very...

Andrew Polkowitz: For this current year, we are not baking any expectations from the pipeline to convert the bookings and then to revenue for 24. That cycle, I would say very clearly, you should not put that in your models. That is not possible. At the same time, I would say the pipeline front of us could be converted to bookings and how we operate and definitely that's going to be an upside for 2025 and 26 and beyond depending upon how large and how big contracts we get and for how much duration.

Speaker Change: willing to listen and improve.

Speaker Change: and Innovate.

Dushyant Sharma: And number two, we want to do it in a way that we are operationally excellent, we are efficient. We know that in this market, our investors are expecting us to do great things, which we are doing, but at the same time, they want us to do it profitably. And we just sign up a good business or, in some ways, a great business. And that's what we're pursuing, and all teams are aligned.

Speaker Change: and bring those innovations to market to help our customers. And number two, we want to do it in a way that we are operationally excellent.

Speaker Change: We are efficient.

Speaker Change: We know that in this market,

Speaker Change: Our investors are expecting us to do great things, which we are doing, but at the same time they want us to do it profitably, and we just sign off a good business, or in some ways a great business. And that's what we're pursuing, and all teams are aligned on that.

Andrew Polkowitz: So short answer is no for 24, but 25 and beyond. And as to 2024 itself, I think we are working very hard to onboard as many classes we can and some of that is already factored into book items. Great, thanks.

Dushyant Sharma: And that's what we are pursuing, and all teams are aligned on that. Thanks so much. Thank you.

Speaker Change: Thanks so much.

Dushyant Sharma: Thank you. There are no further questions in queue. I'd like to turn the call back over to Dushyant Sharma for closing comments.

Operator: There are no further questions in queue.

Dushyant Sharma: I'd like to turn the call back over to Deshant Sharman for concluding comments. Well, thank you, everyone. I really appreciate it. I appreciate your time. Have a great day. Bye-bye. Thank you. Bye-bye.

Speaker Change: Thank you.

Speaker Change: Thank you. There are no further questions in queue. I'd like to turn the call back over to Dushyant Sharma for concluding comments.

Dushyant Sharma: Well, thank you, everyone. I really appreciate it. I appreciate your time. Have a great day. Bye-bye. Thank you.

Dushyant Sharma: Well, thank you, everyone. I really appreciate it. I appreciate your time. Have a great day.

Unknown Attendee: Thank you. Again, as a reminder, if you'd like to ask a question, please dial star one.

Operator: That concludes today's conference call. Thank you for your participation. You may now.

Operator: That concludes today's conference call. Thank you for your participation. You may now disconnect your lines.

Speaker Change: Bye-bye. Thank you, bye-bye.

Matt O'Neill: The next question is from the line of Matt O'Neill with FD Partners. Your line is now open. Oh yes, thanks.

Unknown Attendee: Good evening, everybody. A lot of great questions already asked and answered and followed results here. Just curious to Sean, you know, really understand the direction of the business financially and the target that you and Tanya have laid out. Kind of curious if we turn it more internally. How would you characterize the top strategic priorities? What are you telling the employees that are going to ultimately drive those financial outcomes that you've been executing so well again?

Speaker Change: Dushyant Sharma, David Hanover, Sanjay Kalra, Sanjay Dushyant Sharma, David Hanover, Sanjay Kalra, Sanjay

Unknown Attendee: Thank you. Great question, actually. I'm so glad this question is asked. I mean, we are the team. I think one of the key focus for us is being able, as you can imagine, our clients are trusting us with two of the most important assets they have in their business. Number one, their clients, and number two, their revenues or money. Without that, there is no business, and as a result, increasingly, our business has become more and more central to any business who is partnering with Paymentus, and as a result, one of the key areas our team needs to continue to focus on and invest in is operational excellence and innovation.

Unknown Attendee: So my message to the team, and we are basically all in this thing together where we are saying, if we continue to innovate, continue to listen to our customers, continue to innovate, as a result of those lessons from the clients, no one is perfect. We certainly are not, but we are very willing to listen and improve and innovate and bring those innovations to market to help our customers. And number two, we want to do it in a way that we are operationally excellent.

Unknown Attendee: We are efficient. We know that in this, in this market, our investors are expecting us to do great things, which we are doing, by the same time they want us to do it profitably, which is son of a good business or in some with a great business. And that's what we are pursuing and all teams are aligned on that. Thanks so much. Thank you. There are no further questions in queue.

Dushyant Sharma: I'd like to turn the call back over to Deshant Sharman for concluding comments. Well, thank you everyone. I really appreciate it. I appreciate your time.

Unknown Attendee: Have a great day. Bye-bye. Thank you. Bye-bye.

Unknown Attendee: That concludes today's conference call. Thank you for your participation. You may now.

Q2 2024 Paymentus Holdings Inc Earnings Call

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