Paymentus Holdings, Inc. [PAY] Filings

10-Q 1 pay-20240930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40429

Paymentus Holdings, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	45-3188251
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
11605 North Community House Road, Suite 300 Charlotte, NC	28277
(Address of principal executive offices)	(Zip Code)

(888) 440-4826

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

    Title of each class

    Trading
Symbol(s)

    Name of each exchange on which registered

    Class A Common Stock, par value $0.0001 per share

    PAY

    New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 8, 2024, the registrant had 24,522,383 shares of Class A Common Stock, $0.0001 par value per share and 100,111,193 shares of Class B Common Stock, $0.0001 par value per share, outstanding.

Table of Contents


		Page
	Special Note Regarding Forward-Looking Statements	3

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations and Comprehensive Income	6
	Condensed Consolidated Statements of Stockholders' Equity	7
	Condensed Consolidated Statements of Cash Flows	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
Signatures		30

Special Note Regarding Forward-Looking Statements

This quarterly report on Form 10-Q for the period ended September 30, 2024 (“Quarterly Report”) contains forward-looking statements within the meaning of the federal securities laws, such as those under the headings “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations,” which statements involve substantial risks and uncertainties. Forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from historical results or from any future results or projections expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this report may include statements about:

•

our ability to effectively manage our growth and expand our operations;

•

our ability to further attract, retain and expand our biller, financial institutions, partner and consumer base;

•

our ability to timely implement and recognize revenue from new customers;

•

our expectations regarding our revenue, expenses and other operating results;

•

the impact of any material cybersecurity incident on our reputation as a trusted brand or on our business, operating results and financial condition;

•

our market opportunity and anticipated trends in our business and industry;

•

our ability to remain competitive as we continue to scale our business;

•

our ability to develop new product features and enhance our platform;

•

our ability to hire and retain experienced and talented employees as we grow our business;

•

general economic conditions, including inflation, and their impact on us, consumer demand, average bill amounts and interchange fees, and the impact of changes from an evolving regulatory environment;

•

the impact of disruptions or instability in the financial services industry, or perceived or actual liquidity constraints at financial institutions, on our ability or the ability of our customers and vendors to meet operating expense requirements or to satisfy financial or other obligations;

•

our ability to realize the anticipated benefits of past or future acquisitions or strategic investments in complementary companies, products or technologies and our ability to manage the potential business disruption and diversion of management attention caused by such acquisitions;

•

our ability to maintain and enhance our brand;

•

our plan to expand into new channels and industry verticals across different markets;

•

the impact of widespread health issues on our operating results, liquidity and financial condition and on our employees, billers, financial institutions, partners, consumers and other key stakeholders;

•

our international expansion plans and ability to expand internationally; and

•

those factors described in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023 and, where applicable, our subsequent Quarterly Reports on Form 10-Q, and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this report.

You should not place undue reliance on our forward-looking statements as predictions of future events. We have based the forward-looking statements primarily on our current expectations and projections about future events and trends that we believe may affect our business, operating results, financial condition and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in the section titled “Risk Factors” and elsewhere in this Quarterly Report. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this report. We cannot

assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

Neither we nor any other person assumes responsibility for the ultimate outcome of any of these forward-looking statements. Moreover, the forward-looking statements made in this report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this report to reflect events or circumstances after the date of this report or to reflect new information or the occurrence of unanticipated events, except as required by law.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information.

Certain Definitions

In this report, unless the context requires otherwise, all references to “we,” “our,” “us,” “Paymentus,” and the “Company” refer to Paymentus Holdings, Inc., and where appropriate its consolidated subsidiaries.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

PAYMENTUS HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)


	September 30,			December 31,
	2024			2023
Assets
Current assets
Cash and cash equivalents	$	187,542		$	179,361
Restricted cash and cash equivalents		3,243			3,834
Accounts and other receivables, net of allowance for expected credit losses of $354 and $435, respectively		111,174			76,389
Income tax receivable		4,334			259
Prepaid expenses and other current assets		13,804			10,505
Total current assets		320,097			270,348
Property and equipment, net		1,323			1,558
Capitalized internal-use software development costs, net		65,993			58,787
Intangible assets, net		21,096			27,158
Goodwill		131,849			131,860
Operating lease right-of-use assets		8,610			10,027
Deferred tax asset		358			94
Other long-term assets		3,606			5,031
Total assets	$	552,932		$	504,863
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	49,659		$	35,182
Accrued liabilities		20,299			21,301
Current portion of operating lease liabilities		2,098			1,853
Contract liabilities		2,192			4,089
Income tax payable		—			363
Total current liabilities		74,248			62,788
Deferred tax liability		1			1,067
Operating lease liabilities, less current portion		7,146			8,661
Contract liabilities, less current portion		2,744			2,731
Total liabilities		84,139			75,247
Stockholders’ equity
Preferred stock, $0.0001 par value per share, 5,000,000 shares authorized as of September 30, 2024 and December 31, 2023; none issued and outstanding as of September 30, 2024 and December 31, 2023		—			—
Class A common stock, $0.0001 par value per share, 883,950,000 shares authorized as of September 30, 2024 and December 31, 2023; 24,478,802 and 20,758,603 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		2			2
Class B common stock, $0.0001 par value per share, 111,050,000 shares authorized as of September 30, 2024 and December 31, 2023; 100,126,384 and 103,062,508 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		10			10
Additional paid-in capital		386,020			377,773
Accumulated other comprehensive income		(3	)		87
Retained earnings		82,764			51,744
Total stockholders’ equity		468,793			429,616
Total liabilities and stockholders' equity	$	552,932		$	504,863

The accompanying notes are an integral part of these condensed consolidated financial statements.

PAYMENTUS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(In thousands, except share and per share data)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Revenue	$	231,571		$	152,423		$	613,868		$	449,690
Cost of revenue		170,906			105,513			441,727			316,840
Gross profit		60,665			46,910			172,141			132,850
Operating expenses
Research and development		13,187			11,035			37,773			33,595
Sales and marketing		26,451			21,481			76,456			63,344
General and administrative		8,939			9,083			27,245			26,958
Total operating expenses		48,577			41,599			141,474			123,897
Income from operations		12,088			5,311			30,667			8,953
Interest income, net		2,342			1,905			6,722			5,003
Other income (expense)		5			(17	)		275			(32	)
Income before income taxes		14,435			7,199			37,664			13,924
Provision for income taxes		(5	)		(822	)		(6,644	)		(1,004	)
Net income	$	14,430		$	6,377		$	31,020		$	12,920
Net income per share
Basic	$	0.12		$	0.05		$	0.25		$	0.10
Diluted	$	0.11		$	0.05		$	0.24		$	0.10
Weighted-average number of shares used to compute net income per share
Basic		124,538,195			123,620,260			124,251,147			123,430,652
Diluted		127,614,115			125,639,879			127,254,611			124,457,360
Comprehensive income
Net income		14,430			6,377			31,020			12,920
Foreign currency translation adjustments, net of tax		(8	)		(64	)		(90	)		22
Comprehensive income	$	14,422		$	6,313		$	30,930		$	12,942

The accompanying notes are an integral part of these condensed consolidated financial statements.

PAYMENTUS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share amounts)

(Unaudited)


					Additional				Other			Total
	Common Stock				Paid-In		Retained		Comprehensive			Stockholders’
	Shares		Amount		Capital		Earnings		Income (Loss)			Equity
Balances at December 31, 2023		123,821,111	$	12	$	377,773	$	51,744	$	87		$	429,616
Stock-based compensation		—		—		2,484		—		—			2,484
Issuance of Class A common stock for stock-based awards		304,865		—		100		—		—			100
Other comprehensive loss		—		—		—		—		(42	)		(42	)
Net income		—		—		—		7,226		—			7,226
Balances at March 31, 2024		124,125,976	$	12	$	380,357	$	58,970	$	45		$	439,384
Stock-based compensation		—		—		2,882		—		—			2,882
Issuance of Class A common stock for stock-based awards		348,503		—		37		—		—			37
Other comprehensive loss		—		—		—		—		(40	)		(40	)
Net income		—		—		—		9,364		—			9,364
Balances at June 30, 2024		124,474,479	$	12	$	383,276	$	68,334	$	5		$	451,627
Stock-based compensation		—		—		2,725		—		—			2,725
Issuance of Class A common stock for stock-based awards		130,707		—		19		—		—			19
Other comprehensive income		—		—		—		—		(8	)		(8	)
Net income		—		—		—		14,430		—			14,430
Balances at September 30, 2024		124,605,186	$	12		386,020	$	82,764	$	(3	)	$	468,793


					Additional				Other			Total
	Common Stock				Paid-In		Retained		Comprehensive			Stockholders’
	Shares		Amount		Capital		Earnings		Income (Loss)			Equity
Balances at December 31, 2022		123,241,173	$	12	$	367,767	$	29,422	$	(22	)	$	397,179
Stock-based compensation		—		—		2,159		—		—			2,159
Issuance of Class A common stock for stock-based awards		104,991		—		5		—		—			5
Other comprehensive loss		—		—		—		—		(7	)		(7	)
Net income		—		—		—		704		—			704
Balances at March 31, 2023		123,346,164	$	12	$	369,931	$	30,126	$	(29	)	$	400,040
Stock-based compensation		—		—		2,276		—		—			2,276
Issuance of Class A common stock for stock-based awards		160,625		—		196		—		—			196
Other comprehensive income		—		—		—		—		93			93
Net income		—		—		—		5,839		—			5,839
Balances at June 30, 2023		123,506,789	$	12	$	372,403	$	35,965	$	64		$	408,444
Stock-based compensation		—		—		2,456		—		—			2,456
Issuance of Class A common stock for stock-based awards		185,159		—		235		—		—			235
Other comprehensive loss		—		—		—		—		(64	)		(64	)
Net income		—		—		—		6,377		—			6,377
Balances at September 30, 2023		123,691,948	$	12	$	375,094	$	42,342	$	—		$	417,448

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PAYMENTUS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended September 30,
	2024			2023
Cash flows from operating activities
Net income	$	31,020		$	12,920
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		26,827			22,314
Deferred income taxes		(1,333	)		278
Stock-based compensation		9,424			6,891
Non-cash lease expense		1,806			1,346
Amortization of contract asset		1,395			2,197
Provision for (benefit from) expected credit losses		114			(122	)
Other non-cash adjustments		(213	)		—
Change in operating assets and liabilities
Accounts and other receivables		(34,917	)		(6,941	)
Prepaid expenses and other current and long-term assets		(4,579	)		(1,797	)
Accounts payable		14,349			4,279
Accrued liabilities		(197	)		4,188
Operating lease liabilities		(1,656	)		(1,364	)
Contract liabilities		(1,883	)		1,232
Income taxes receivable, net of payable		(4,436	)		(1,034	)
Net cash provided by operating activities		35,721			44,387
Cash flows from investing activities
Purchases of property and equipment		(376	)		(511	)
Purchase of interest-bearing deposits		(2,569	)		—
Proceeds from matured interest-bearing deposits		2,566			—
Capitalized internal-use software development costs		(27,238	)		(25,339	)
Net cash used in investing activities		(27,617	)		(25,850	)
Cash flows from financing activities
Proceeds from exercise of stock-based awards		156			435
Settlement of holdback liability related to prior acquisitions		(545	)		—
Payments on other financing obligations		—			(1,709	)
Payments on finance leases		—			(102	)
Net cash used in financing activities		(389	)		(1,376	)
Effect of exchange rate changes on Cash and cash equivalents and Restricted cash		(125	)		46
Net increase in cash, cash equivalents and Restricted cash		7,590			17,207
Cash and cash equivalents and Restricted cash at the beginning of period		183,195			149,685
Cash and cash equivalents and Restricted cash at the end of period	$	190,785		$	166,892
Reconciliation of Cash and cash equivalents and Restricted Cash:
Cash and cash equivalents at the beginning of period		179,361			147,334
Restricted cash at the beginning of period		3,834			2,351
Cash and cash equivalents and Restricted cash at the beginning of period	$	183,195		$	149,685
Cash and cash equivalents at the end of period		187,542			162,062
Restricted cash at the end of period		3,243			4,830
Cash and cash equivalents and Restricted cash at the end of period	$	190,785		$	166,892
Supplemental disclosure of cash flow information:
Cash paid for income taxes, net of refunds	$	12,419		$	1,718
Right-of-use assets obtained in exchange of operating lease obligations	$	466		$	1,356

The accompanying notes are an integral part of these condensed consolidated financial statements.

PAYMENTUS HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, unless otherwise stated)

(Unaudited)

1. Organization and Description of Business

Description of Business

Paymentus Holdings, Inc. and its wholly owned subsidiaries (“Paymentus” or the “Company”) provides electronic bill presentment and payment services, enterprise customer communication and self-service revenue management to billers through a Software-as-a-Service (“SaaS”), secure, omni-channel technology platform. The platform seamlessly integrates into a biller’s core financial and operating systems to provide flexible and secure access to payment processing of credit cards, debit cards, eChecks and digital wallets across a significant number of channels including online, mobile, IVR, call center, chatbot and voice-based assistants. Paymentus was incorporated in the state of Delaware on September 2, 2011 with office locations in Charlotte, North Carolina, Dallas, Texas, Santa Clara, California, Richmond Hill, Ontario (Canada), and Gurugram, Mohali and Bangalore (India). The Company is headquartered in Charlotte, North Carolina.

2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the United States Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with GAAP. Therefore, these unaudited condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and the related notes included in the Company's Form 10-K for the year ended December 31, 2023 filed with the SEC on March 5, 2024 (the “2023 Form 10-K”).

These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position, results of operations and comprehensive income, changes in stockholders' equity and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2024 and 2023 are not necessarily indicative of the results to be expected for the full year or any other future interim or annual period.

Principles of Consolidation

The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and balances have been eliminated upon consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Such estimates include revenue recognition, cost of revenue recognition, the allowance for credit losses, the lives of tangible and intangible assets, the valuation of acquired intangible assets and the recoverability or impairment of intangible assets, including goodwill, internal-use software development costs, valuation of stock warrants issued, stock-based compensation, and accounting for income taxes. The Company bases its estimates on historical experience and also on assumptions that management considers reasonable. The Company assesses these estimates on a regular basis; however, actual results could differ from these estimates.

Custodial Accounts

The Company has established a relationship with its merchant processors to act as collection and paying agents, whereby a merchant processor receives funds from customers and forwards such funds to the respective Paymentus client, based on the instructions received from the Company. These merchant processors act as custodians of the cash received, and the Company has no legal ownership rights to the funds held in such custodial accounts and does not control the use of these funds. As the Company does not take ownership of the funds, these custodial accounts are not included in the Company’s consolidated balance sheets. The balance of cash in the custodial accounts held by these merchant processors was $123.3 million and $510.8 million as of September 30, 2024 and December 31, 2023, respectively.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to credit risk primarily consist of cash, cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents with high-quality financial institutions with investment-grade ratings. For accounts receivable, the Company is exposed to credit risk in the event of nonpayment by customers and resellers to the extent of the amounts recorded in the consolidated balance sheets. No customer accounted for more than 10% of revenue for either of the three or nine months ended September 30, 2024 and 2023. As of December 31, 2023 and September 30, 2024 one reseller accounted for more than 10% of accounts receivable.

Segment Information

Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to make operating decisions, allocate resources and assess performance. The Company has three operating segments based on geography. The United States segment represents the vast majority of the Company’s consolidated net sales and gross profit. The additional two operating segments, Canada and India, do not meet the quantitative thresholds for separate reporting, either individually or in the aggregate. None of the operating segments qualified for aggregation. The Company’s CODM is its chief executive officer. The CODM evaluates the performance of the Company’s operating segments based on revenue and gross profit. The Company does not analyze discrete segment balance sheet information related to long-term assets. All other financial information is presented on a consolidated basis. For information regarding the Company’s long-lived assets and revenue by geographic area, see Note 4 and Note 3, respectively.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are discussed in Note 2, “Basis of Presentation and Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021 included in the 2023 Form 10-K. There have been no significant changes to these policies during the three and nine months ended September 30, 2024.

Recently Adopted Accounting Standards

The Company is provided the option to adopt new or revised accounting guidance as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 either (1) within the same periods as those otherwise applicable to public business entities, or (2) within the same time periods as non-public business entities, including early adoption when permissible. With the exception of standards the Company elected to early adopt, when permissible, the Company has elected to adopt new or revised accounting guidance within the same time period as non-public business entities, as indicated below.

Accounting Standards Updates ("ASU") not listed below were assessed and determined to be either not applicable or are not expected to have a material impact on the consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. The amendments in ASU 2023-07 are effective for public companies for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the potential impact of adopting this new guidance on our condensed consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09 "Income Tax Disclosures", which makes changes to annual disclosures of income taxes paid for all entities and requires entities to disclose the amount of income taxes paid, net of refunds received, disaggregated by federal, state and foreign jurisdiction. Additionally, entities are required to disclose income taxes paid, net of refunds received, for individual jurisdictions that comprise 5% or more of total income taxes paid. The 5% threshold is evaluated using the absolute value of the net refund or net payment in each jurisdiction compared to the absolute value of the total income taxes paid (net of refunds received). ASU 2023-09 requires all entities to disclose disaggregated domestic and foreign pre-tax income (or loss) from continuing operations along with disaggregated income tax expense (or benefit) by federal, state and foreign components. Such disaggregation by jurisdiction should classify taxes by jurisdiction based on the jurisdiction imposing the taxes. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024 for public companies. Early adoption is permitted. We are currently evaluating the potential impact of adopting this new guidance on our condensed consolidated financial statements and related disclosures.

3. Revenue, Performance Obligations and Contract Balances

Disaggregation of Revenue

The following table presents a disaggregation of revenue from contracts with customers:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(in thousands)
Payment transaction processing revenue	$	228,826	$	150,500	$	605,142	$	443,565
Other		2,745		1,923		8,726		6,125
Total revenue	$	231,571	$	152,423	$	613,868	$	449,690

Revenue by geographic area, based on the location of the Company’s users, was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(in thousands)
United States	$	227,788	$	149,526	$	602,572	$	441,029
Other		3,783		2,897		11,296		8,661
Total	$	231,571	$	152,423	$	613,868	$	449,690

Remaining Performance Obligations

As of September 30, 2024, the aggregate amount of transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied was $4.9 million, of which the Company expects to recognize over 68% within the next two years, 24% between two to four years and the remainder thereafter. The timing of revenue recognition within the next four years is largely dependent upon the go-live dates of the Company's customers under the Company’s contracts.

As of September 30, 2024, the Company has contractual rights under its commercial agreements with customers and resellers to receive $79.5 million of fixed consideration related to the future minimum guarantees through 2029. As permitted, the Company has elected to exclude from this disclosure any variable consideration that meets specified criteria. Accordingly, the total unsatisfied or partially unsatisfied performance obligations related to processing services is significantly higher than the amount disclosed.

Contract Balances

Contract balances consist of the following:


	September 30,		December 31,
	2024		2023
	(in thousands)
Contract Assets included under:
Prepaid expenses and other current assets	$	2,893	$	2,893
Other long-term assets		3,397		4,783
Total contract assets	$	6,290	$	7,676
Contract Liabilities:
Current	$	2,192	$	4,089
Non-current		2,744		2,731
Total contract liabilities	$	4,936	$	6,820

The amortization of related contract assets included in the condensed consolidated statements of operations and comprehensive income was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(in thousands)
Revenue	$	153	$	635	$	459	$	1,888
Sales and marketing		740		121		2,268		308
Total amortization of contact assets	$	893	$	756	$	2,727	$	2,196

Revenue recognized during the three months ended September 30, 2024 and 2023 that was included in the contract liabilities balance at the beginning of each of the periods was $1.1 million and $0.5 million, respectively. Revenue recognized during the nine months ended September 30, 2024 and 2023 that was included in the contract liabilities balance at the beginning of each of the periods was $3.6 million and $1.4 million, respectively.

4. Property and Equipment, net

Property and equipment, net consisted of the following:


	September 30,			December 31,
	2024			2023
	(in thousands)
Computer equipment	$	6,293		$	6,059
Furniture and fixtures		1,796			1,715
Leasehold improvements		391			396
Total property and equipment		8,480			8,170
Less: Accumulated depreciation		(7,157	)		(6,612	)
Property and equipment, net	$	1,323		$	1,558

Depreciation expense recorded for property and equipment was $0.2 million and $0.2 million for the three months ended September 30, 2024 and 2023, respectively, and $0.6 million and $0.7 million for nine months ended September 30, 2024 and 2023, respectively.

The geographic locations of the Company’s long-lived assets, comprising property and equipment, based on physical location of the assets were as follows:


	September 30,		December 31,
	2024		2023
	(in thousands)
United States	$	516	$	558
Other		807		1,000
Total	$	1,323	$	1,558

5. Goodwill, Internal-use Software Development Costs and Intangible Assets

Goodwill

The changes in the carrying amount of goodwill by reporting unit were as follows (in thousands):


	United States		Other			Total
Balance as of December 31, 2023	$	131,028	$	832		$	131,860
Foreign currency translation adjustments		—		(11	)		(11	)
Balance as of September 30, 2024	$	131,028	$	821		$	131,849

Internal-use Software Development Costs

During the three months ended September 30, 2024 and 2023, the Company capitalized $9.0 million and $8.7 million in software development and implementation costs, respectively, and during the nine months ended September 30, 2024 and 2023, the Company capitalized $27.4 million and $25.3 million in software development and implementation costs, respectively.

During the three months ended September 30, 2024 and 2023, the Company recorded $4.6 million and $3.5 million of amortization expense in cost of revenue, respectively, and $2.5 million and $2.0 million of amortization expense in operating expenses, respectively. During the nine months ended September 30, 2024 and 2023, the Company recorded $13.0 million and $9.5 million of amortization expense in cost of revenue, respectively, and $7.1 million and $5.8 million of amortization expense in operating expenses, respectively.

Intangible Assets

Intangible assets, net consisted of the following (in thousands):


	September 30, 2024
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Technology	$	21,833	$	(17,767	)	$	4,066
Customer relationship		31,991		(15,917	)		16,074
Software and license		2,962		(2,946	)		16
Trademark		4,038		(3,098	)		940
Total	$	60,824	$	(39,728	)	$	21,096

         
        December 31, 2023

         
        Gross
Carrying
Amount

        Accumulated
Amortization

        Net
Carrying
Amount

Technology

Paymentus Holdings, Inc. [PAY] Filings
10-Q	[2024-11]
10-Q	[2024-08]
10-Q	[2024-05-07]
10-K	[2024-03-05]
10-Q	[2023-11-07]
10-Q	[2023-08-07]
10-Q	[2023-05-08]
10-K	[2023-03-03]
10-Q	[2022-11-10]
10-Q	[2022-08-05]
10-Q	[2022-05-06]
10-K	[2022-03-03]
10-Q	[2021-11-10]
10-Q	[2021-08-11]
S-1	[2021-04-30]