Paymentus (PAY) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenue of $197.4 million, up 32.6% year-over-year, driven by increased billers, transactions, and strong demand across multiple verticals.

• Adjusted EBITDA rose 58.6% year-over-year to $22.5 million, with a 29.5% margin, exceeding expectations and long-term targets.

• Processed 140.4 million transactions in Q2, a 28.2% increase year-over-year, fueled by new and existing billers and financial institutions.

• Net income for Q2 2024 was $9.4 million, up 60.4% from $5.8 million in Q2 2023, with non-GAAP net income at $14.7 million ($0.12/share).

• Improved onboarding velocity and implementation efficiency, especially for large enterprise clients, contributed to revenue and client growth.

Financial highlights

• Q2 2024 revenue: $197.4 million, up 32.6% year-over-year.

• Contribution profit: $76.5 million, up 28.3% year-over-year; contribution margin 38.7% (down from 40% prior year).

• Adjusted EBITDA: $22.5 million, up 58.6% year-over-year; margin 29.5% of contribution profit (up from 23.8%).

• Adjusted gross profit: $64.0 million, up 28.1% year-over-year; gross profit was $58.8 million.

• Free cash flow for Q2 was $8.8 million, a 450% sequential increase from Q1 2024 but down from $17.8 million in Q2 2023.

• Cash and equivalents at June 30, 2024: $188.8 million; total assets: $527.7 million.

Outlook and guidance

• Q3 2024 revenue guidance: $188–$193 million (25–26.6% year-over-year growth at midpoint/high end).

• Q3 contribution profit: $71–$74 million; adjusted EBITDA: $18–$20 million.

• Full-year 2024 revenue guidance raised to $770–$780 million (26.1% growth at midpoint); contribution profit: $293–$298 million; adjusted EBITDA: $81–$85 million.

• Rule of 40 expected at 51–52 for 2024, up from 44 in 2023.

• Management expects inflationary pressures and economic uncertainty to persist through 2024, with ongoing price adjustments and cost management.