Factors that may cause our actual results to materially differ from those expectations are detailed in our earnings materials and our SEC filings that are available on both the SECs and our websites. Information about non GAAP financial measures including reconciliations to its GAAP can also be found in our earnings materials that are available on our website. With that, I'd like to turn the webcast over to Dushant Sharma. Dushan? Thanks, Scott. Paymentus started 2025 on a strong footing with excellent results including year over year growth in revenue, contribution profit and adjusted EBITDA. This performance continues to be driven by our strong sales momentum and higher transaction activity from both new and existing clients. Based on our outperformance in the first quarter, our strong pipeline bookings and backlog at the end of the quarter, and the continued momentum in all growth areas of our business. We are feeling good about the remainder of 2025 and beyond. Despite the macro environment, we find ourselves in a very fortunate situation where we are serving an important part of the non discretionary essential domestic economy. Let me provide a real world example.

For a typical household, just to be able to cook you need water electricity and gas. These bills are fundamental and you need to pay for these services They're not optional. Just this segment alone gets us to about half of our business. Similarly, you need to pay for a phone. For your rent. Mortgage, and taxes. Likewise, if you have a home car or life insurance, to maintain coverage, you need to pay for those bills. And you can go down the line of our verticals and realize that it is a privilege to be serving an essential side of the domestic economy with a differentiated and a scaled technology platform and ecosystem like Paymentus. And from a go to market standpoint, we could not ask for a better value proposition that our platform and ecosystem provides our clients. Which is reducing their cost to serve while helping them improve the experience for their customers. This value proposition resonates in all economic cycles. Particularly because we are a critical service for revenue collections for the businesses we serve. Taking into consideration of our value proposition, resulting in a continued market momentum, along with the enormous TAM of non discretionary bills I continue to believe that our best is yet to come.

And we are indeed just getting started. Turning now to our first quarter results. Revenue was $275,200,000 an increase of 48.9% year over year. Driven largely by increased clients and transactions. Contribution profit was $87,600,000 up 26.3% year over year. Adjusted EBITDA which is a significant financial metric for us, was $30,000,000 an increase of 51.3% year over year. Adjusted EBITDA margin was 34.2% in the quarter. It's a new record. You will note that over 50% of our year over year growth in contribution profit dropped to our bottom line. This is a key aspect of our business model that we have pointed out on previous calls which is of a proven ability to consistently expand our operating leverage without sacrificing growth or innovation. As we sit here today, it feels great to reaffirm our CAGR model for our primary metrics of 20% top line revenue growth and 20% to 30% bottom line adjusted EBITDA growth. As is evident from our first quarter results, we outperformed our CAGR model by a wide margin for both top line and the bottom line. This is reflected in our updated guidance that Sanjay will cover shortly. As a reminder, this CAGR model is for our primary metrics of revenue and adjusted EBITDA only and should not be confused with the secondary matrix such as contribution profit and OpEx.

As we have been doing quite successfully to date, we will continue to use our strong operating leverage to calibrate contribution profit and OpEx as necessary to achieve these longer term targets. In addition to these results, we exited the first quarter with a strong bookings and a solid implementation backlog. The multiyear commitments under our typical agreements from these bookings continue to give us confidence our ability to achieve our CAGR model beyond 2025. Our solid execution during the quarter once again allowed us to surpass the rule of 40 and doing so by a wide margin at sixty one. As we have shared previously at Paymentus, goal remains to continue delivering high quality earnings alongside solid top line growth. Now I'll review some of our key first quarter business highlights and a accomplishments.

During the first quarter, we signed clients in various industry verticals including utilities, government agencies, telecommunications, banking and credit unions, insurance, and educational institutions among others. We believe this broad mix of new clients shows the diversity of the businesses and the multiple industry verticals. Our platform can support. In addition, we signed several new channel partners in various industry verticals to deepen our partner ecosystem. These verticals include property management, education, banking and credit unions. Our diverse and ever expanding partner network continues to complement our direct go to market strategy. At the same time, we continue to focus on onboarding our considerable backlog. Our onboarding enhancements incremental investments as well as constantly improving face to face client engagement continue to drive these efforts. During the quarter, we onboarded clients across multiple verticals namely utilities, healthcare, telecommunications, property management, insurance, government services, banking and credit unions. With that, let me turn it over to Sanjay to review our financial results in greater detail. Thanks, Dushar. And thank you all for joining us today. Before I discuss our first quarter results and outlook, I'd like to remind everyone that the financial results I'd be referring to include non GAAP financial measures.

Our Q1 press release and earnings presentation includes reconciliations of these non GAAP financial measures to their corresponding GAAP measures. Both of these are available on our website. Turning to Slide five, we started off the year with another quarter of very strong financial results driven by higher transaction activity from both new and existing bidders. We believe these results continue to demonstrate the resiliency stability, and strength of our business. Our first quarter twenty twenty five results came in stronger than we anticipated. With revenues of $275,200,000 contribution profit of 87,600,000.0 and adjusted EBITDA of $30,000,000 On the route of 40 basis, we came in at 61 which we are quite pleased with. I'll discuss the drivers of our outperformance and the strong business momentum. Behind them shortly. These strong results enabled us to once again exit the quarter with a much stronger cash position. And allowed us the flexibility to allocate capital with a continuous focus on long term growth.

That also contributed to robust bookings and backlog. Now let's review our first quarter financials in more detail. As I mentioned earlier, first quarter twenty twenty five revenue was $275,200,000 up 48.9% year over year. This growth was largely driven by the launch of new billers over the past year. As the less increased same store sales. From existing dealers. We also processed a higher level of transactions during the first quarter with this number reaching $173,200,000 up 28% year over year. Our average revenue per transaction increased to 1.59¢. Compared to $1.37 in the prior year. This was mainly due to the biller mix or more specifically the large enterprise billers that we launched during the second half of twenty twenty four. With higher average payment amounts. This is now the second full quarter where we are seeing the benefits of these large enterprise customers. The first quarter guidance we provided did consider some of this upside into account But as you can see, it still exceeded our expectations. First quarter twenty twenty five contribution profit increased to 87,600,000.0 up 26.3% year over year. This increase also reflects the launch of new billers and higher transactions from existing billers.

Contribution margin was 31.8% for the first quarter. Compared to 33.4% last quarter and 37.5% in the prior year period. The year over year reduction reflects the mix of large higher volume enterprise builders in our growing customer base. This change in contribution profit was offset substantially by a year over year reduction in operating expense margin. Which resulted in a record adjusted EBITDA margin of 34.2%. This is consistent with our continued focus on profitability which I will elaborate on shortly. Contribution profit per transaction for the quarter was $0.51 similar to the prior year period. Demonstrating our ability to expand market share. Without sacrificing comparable contribution profit per transaction. As we have noted before, variables that are outside of our control such as an increase in the average payment amount or changes in the payment mix affect contribution profit on a quarter to quarter basis And therefore, we treat it as a secondary metric while our gross revenue and adjusted EBITDA remain primary metrics for us. First quarter twenty twenty five adjusted gross profit was $72,600,000 up 25.9% year over year. That was in line with the contribution profit growth. As we anticipated, first quarter twenty twenty five non GAAP operating expenses increased 13% year over year to $45,500,000 This increase was primarily due to higher research and development expenses as well as sales and marketing expenses.

Again, these increases were planned and mainly driven by increased hiring and agency fees for business from our resellers and partners. In order to enhance our technical strength and convert our strong pipeline into bookings. We expect to make similar investments throughout the year as we continue to execute our go to market strategy. These expectations are already incorporated in our guidance which I'll review in more detail shortly. First quarter twenty twenty five non GAAP net income was $17,600,000 or $0.14 per share. Compared to non GAAP net income of $11,800,000 or $09 per share in the prior year period. This reflects a non GAAP tax rate of 25%. Which is based on current expectation of our long term projected tax rate. And is reflected in our 2025 guidance. First quarter twenty twenty five adjusted EBITDA rose 51.3% to $30,000,000 compared to $19,800,000 in the prior year period. Adjusted EBITDA also represented a record 34.2% of contribution profit. Compared to 28.6% in the prior year period. We believe this stronger adjusted EBITDA margin demonstrates the inherent operating leverage we have in the business. Note that approximately 56 of our year over year growth in contribution profit fell to the bottom line.

Related to this, once again, we also the rule of 40 for the quarter coming in at sixty one. This is a measure we take seriously and our team here monitors it very closely. Now I'll discuss our balance sheet and liquidity position on Slide six. We ended the first quarter with total cash and cash equivalents of $249,600,000 compared to 209,400,000.0 at the end of twenty twenty four. The $40,200,000 sequential increase was primarily comprised of $50,400,000 of cash generated from operations, offset by 10,200,000.0 cash used in investing and financing activities primarily capitalized software. The company does not have any debt. Free cash flow generated during the quarter was a record $41,100,000 This was primarily driven by strong adjusted EBITDA in the quarter and also extracting cash from working capital by reducing our accounts receivable balances demonstrating that our working capital is fairly liquid and can be converted to cash quickly if needed. Driving organic growth continues to be our primary focus. Having said that, our strong cash position enables us to maintain financial flexibility to give room for working capital investments as we scale. In addition to this, our ample liquidity allows us to explore attractive M and A opportunities that may arise in order to expand our growth prospects.

Our daily sales outstanding at the end of the first quarter was 33 compared to 43 at the end of prior quarter. Much better than we expected. Working capital at the end of first quarter was 280,500,000.0 an increase of approximately 6.2% sequentially. We had 128,800,000.0 diluted shares outstanding during the first quarter compared to 128,700,000.0 diluted shares outstanding during the prior quarter. Now I'll turn to our Q2 twenty twenty five and revised full year 2025 guidance for revenue contribution profit and adjusted EBITDA on Slide seven. Before discussing full year guidance, I want to mention that we are continuing to follow the same prudent approach to guidance that we follow during all of 2024. Which has proven very successful for us. As reflected on the slide, for Q2 twenty twenty five, we expect revenues in the range of $255,000,000 to $260,000,000 Contribution profit in the range of $89,500,000 to 91,500,000.0 and adjusted EBITDA in the range of $28,000,000 to $30,000,000 On a rule of 40 basis for the second quarter of twenty twenty five, guidance implies a range of $48.52. For the full year 2025, we now expect revenues in the range of $1,075,000,000 to $1,090,000,000 an increase of 3.1% from midpoint of our prior guidance and now representing 24.2% year over year growth at the midpoint.

Contribution profit in the range of $363,000,000 to $369,000,000 up 1.1% from midpoint of our previous guidance. Adjusted EBITDA in the range of $118,000,000 to 122,000,000 up 5.3% from the midpoint of our previous guidance. And now representing 27.4% year over year growth at the midpoint. And our non GAAP tax rate of 25%. A rule of 40 basis, our guidance implies a range of 49% to fifty one for the full year 2025. During our past few earning calls, we provided long term growth targets for both revenue and adjusted EBITDA. Our two primary financial metrics. We stated that our goal was to grow revenue at approximately 20% annually and to grow adjusted EBITDA dollars between 20 to 30% annually. The full year 2025 guidance we have provided today is consistent with these long term targets. Regarding contribution profit and operating expenses, which we consider secondary financial metrics, We plan to actively manage our operating expenses dialing them up or down as necessary depending on how contribution profit is trending throughout the year to enable us to remain a rule of 40 company on an annual basis and also our long term. We managed this quite well throughout all of 2024 as well as for the first quarter of twenty twenty five.

Based on our success to date, we believe we are well suited to keep managing this in the current year given our strong operating leverage. In summary, we started 2025 on a solid footing reporting strong first quarter results. Throughout the past several quarters, we have consistently demonstrated our ability to generate strong revenue contribution profit adjusted EBITDA, cash and bookings growth. This enabled us to end the first quarter with a substantial backlog. Given our solid footing and strong visibility, we continue to believe we are well positioned for further growth in 2025. Thank you everyone for your attention today. And now I turn it back to Dushyant for final remarks before we open up the call for questions. Thanks, Sanjay. In closing, we started off 2025 with the same momentum that we had throughout all of 2024 which allowed us to deliver year over year growth in revenue, contribution profit and adjusted EBITDA for the first quarter. We also ended the quarter with a strong bookings and backlog which continues to support our positive outlook for the rest of 2025 and beyond.

During the quarter, we paid close attention to the consumer and business payment trends in our vast network. Across multiple verticals and we continue to see encouraging trends with no slowing down of any kind. I want to reaffirm that we believe based on the size of the opportunity ahead of us, we are just getting started and our best is yet to come. This belief is based on five factors. First, we service the non discretionary side of the domestic U. S. Economy. Second, we have a great technology platform and an ecosystem that continues to scale processing for hundreds of millions of payments. Third, as exciting as these numbers are, including our record EBITDA margin this quarter, they only tell part of the story. A lot of our long term innovation framework that is currently in our expense run rate does not yet provide the additional top line and margin expansion opportunities that we expect will occur in outer years. This includes interchange monetization meaning converting part of the interchange from a cost center to a revenue center artificial intelligence, and other product investments we continue to make for increasing our TAM including within our own customer base.

Fourth, we have a big customer base and a partner ecosystem along with a sizable portion of U. S. Households and businesses that are already using our platform on a regular basis. Giving us an ever growing distribution network for our future innovative product offerings and a possibility of a perpetual growth engine. Fifth, we have a phenomenal team of dedicated professionals helping us achieve our long term vision. So it is very humbling to reflect on these and other dimensions that we believe set a stage for a very bright future ahead for Paymentus. On that note, I also want to thank all of my team members for their continued efforts and dedication to our company's success. That concludes our prepared remarks. I'll now open the line up for questions.

Again, to ask a question, it is star one. Our first question is from Dave Koning with Baird. Your line is now open. Yes. Hey, Thank you. Nice job again. I guess for my first question yeah. Yeah. And I guess for my first question, transaction growth for many quarters now has been in a nice 25% to 35% range, it's 28% this quarter. How much of that is new clients growing? And how much is like same store sales, existing clients and has that changed much the last couple of quarters and into this quarter?

Hey, Dave, thanks for the question. Appreciate it. Interesting trends that we are seeing since past many quarters, I would say the business is growing nicely. In both the both the growth vectors, I e the new customers going live and the same store sales. I would say, at this point, the year has just begun. And these trends are changing over time as we are onboarding a lot of customers and in various different verticals And as the business expands more and diversifies more, these trends overall could change and they could move around quarter to quarter. But I think it's at this point, the growth from new implementing over the last year, I would say, is a bigger piece than same store sales. But same store sales are also growing nicely. And in all the verticals. So I won't be able to quantify both of them separately. But I would say both of them are growing at a very good pace and they are very comparable to the growth we've seen in the past. And kind of the customer mix we have in our pipeline [indiscernible] Give us kind of a good feeling and good assessment based on their transaction history that you know, a similar trend should continue, and we feel very good about where we are.

K. That sounds great. And I guess my second question, net revenue contribution profit you've you're guiding up sequentially, which is very normal. Gross revenue has been up for many, many quarters in a row, but you're guiding down sequentially. Maybe what's the dynamic there that we would have gross revenue actually come down? Is there something not recurring in the gross part of the revenue line?

Dave, so let me begin by explaining our large enterprise customers. You know, this is kind of a call it a different segment of our customers who have just started since 2024. In q three, we onboarded these large customers and we have not seen a full cycle I. A full four quarter cycle of these customers to understand the dynamic carefully that how their growth patterns will be. And they are significant part of our trend. And what is unknown to us is that the growth which we are seeing in those in the last two point five quarters which are behind us. Is that growth mainly because of seasonality in their business? Or is it primarily due to the advantage these large enterprise customers are getting because of our platform, which is giving them an opportunity to scale beyond than what we and they were originally expecting. So I think we need kind of four quarters history or a run rate to assess that. We were actually in a very similar position just three months before or I would say two months before when we were guiding for q one. We still exceeded that expectation. Are kind of taking a very similar stance in guiding for Q2.

We are taking our original expectations which we had I. E. In q three of twenty four. That what would be the run rate for Q2 of this quarter. And if that exceeds or said differently, if that follows the trend what we saw in the last quarter and the quarter before, there might be an upside to revenue But we've taken a prudent posture in terms of how we should guide We just wanna keep our heads straight, Dave, and we want to march and execute and perform We don't want to count our chickens before they hatch. So that's the strategy. And you know and you're absolutely right. Based on seasonality, the CP is gonna go up in q two compared to q one. Which which is incorporated in our guidance. But the revenue uplift may happen, the trend continues, If not, the impact on CP will not be as significant, I think. And we factor that in our guidance.

Gotcha.

Great job, guys. Thank you. Thank you, Dave. Thank you. Our next question is from Andrew Bogowitz with JPMorgan. Your line is now open. Hey, good afternoon, guys. Thank you for taking my question. First question, I wanted to ask you spoke to the consumers of your clients being very durable and very durable categories, I was curious if you've noticed any change in sales cycles or pace of implementation with customers that are to be onboarded given, you know, the incremental macro uncertainty over the past month or so?

We're not seeing any change to speak of. In fact, as I called it out in the opening remarks, that we have been watching the trends in Q1 very carefully both from the both for the consumers on our platform, but as well as our business payers. And we're not seeing any any changes there. And in terms of the implementation speed as we as we talked about, we we we seem to be doing, doing well there as well. The all the investments we have made, but also the face to face interactions, especially with large enterprise clients. Actually continues to help us there. So we are not seeing any, and our pipelines are looking strong and bookings were good. Okay. That's helpful. And then just my one follow-up on Sanjay. You mentioned, that you have a liquidity for M and A if necessary. I was curious what types of deals would be attractive to you guys, whether it's for further distribution, You mentioned the partner channel already or if there's capabilities you'd wanna add to your platform. Thank you, guys.

I'll say, you know, m and a opportunity is something which is kind of our secondary objective if I call. So, you know, we've got a good organic business and organic growth is doing really well based on our bookings and pipeline and implementation base. And our cash is going at a decent level. In fact, this was a record quarter. We generate $41,000,000 in free cash flow. We are proud of it. Now this cash is giving us a situation that, okay, how do we invest it? So M and A is not something which is our primary objective. Again, I'll point out that is something we will only do if something great comes to us. And as you know, we we get a lot of books to take a look at. Nothing has intrigued us yet. We want to make the right decision for the shareholders of the company. As far as an opportunity provides us a right return on the investment and it makes sense for longer term, we will do it. By the way, currently there is no need for us to do any M and a. There is no feature missing. There is no vertical which we want to acquire.

There's nothing. Predetermined. There is no set criteria of what we are going after. We just are trying to see what makes sense and could be accretive to our shareholders. So I would say it's too early to get into what kind of M and A it will be. We are just being cognizant of what's going on in the market. And we will do the right decision. If the right opportunity comes. But as of now, no no certain criteria is set. I think the main reason this is Vishant. The main reason Sanjay wanted to call this out and we we we talked about calling this out in the opening remarks is that I think it's a very it's quite humbling to be in a position where we have if I may say it this way, a quarter of a billion dollars in in the bank account. And and and we are generating cash. And frankly be in a strong position where our platform itself is driving the growth of our business organically. We don't need to do anything. So that allows us to be very selective. As Sanjay talked about.

Alright.

Very clear. Thank you again and congrats on the quarter.

Thank you. Our next question is from John Davis with Raymond James. Your line is now open. Hey, good afternoon, guys. Sanjay, obviously, think the thing that stuck out the most this quarter is the free cash flow. Think it's 50% more than you generated in all of 2024. You called out maybe some change in in working capital, but any other comments there? Is there a way we should think about free cash flow conversion as a percentage of adjusted income or EBITDA? Just that really stuck out as being really strong in the quarter and Just curious what's driving how we should think about it to the balance of '25?

John, thanks for the question. I think it's interesting to see that over time, we have been increasing our working capital every quarter. You look at the trend of say at least this last eight quarters, right, we good EBITDA cash generation as well, but cash fluctuates quarter to quarter. And I mean, this is the first time you've seen our cash will be that ratio actually exceeds 100%. We would like to see that every quarter, but it's not to be possible to have it every quarter. To set the expectation, I think the right thing to think about is that in a in one full year, we will generate cash. And we will generate decent cash after paying tax As you know, our tax rate is closer to 25%.

So the right way to think about is that our EBITDA if you take out the cap software, which is kind of getting consistent now, every quarter to quarter, I think that should be the right way to think about the cash flow. Working capital needs are not easy to estimate because we are scaling the business. And the scale could happen in a way that our working capital may be needed. But we are in a great position, very, very favorable position to have enough liquidity that we can fund the working capital. So I won't be able to give you a precise formula, John, to estimate our free cash flow conversion every quarter. But I would say, can fluctuate quarter to quarter. I think this quarter we've done a wonderful job. And although I would like to continue the same trend every quarter, but it there there are no guarantees of that. I suggest look at it on an annual basis and spread it evenly if that makes that makes sense. If I may say, actually, one of the other That's all. Sorry. John, I was just gonna add one more point this that one of the things which is getting even more exciting for us as a team here is that as the business is scaling and we're generating more EBITDA dollars, as Sanjay pointed out, our cap software remains fairly consistent.

Although we continue to make investments as I pointed out, I think more of our EBITDA dollars are going to the cash line. [indiscernible] our business anyway has a strong operating leverage on the p and l, but I think the operating leverage on cash should get better in our view. Subject to what working capital cash is needed every quarter.

Okay. That's helpful. And then I want to follow-up on Dave's question. Between the spread of kind of gross profit sorry, revenue and contribution profit. You obviously gross revenue has been growing well in excess of contribution profit over the last several quarters. And if I look, the guide in the back half of this year implies that they grow more similarly. Actually, I think contribution profits imply to grow a little bit faster. Than gross revenue in the second half, maybe 100 basis points or so. And based on your comments to Dave's question, to make sure I understand this. It sounds like you guys have a pretty good handle on what you expect from a contribution profit perspective, but the gross revenue is a little bit more. Said another way, [indiscernible] your contribution profit guide is maybe less conservative than your gross revenue guide. Anything else to call out there? Obviously, that's just I mean, it's been a huge gap and it's narrowing. Is that the right way to think about it going forward? Is it just more conservatism in gross revenue? Any other comments you could add there? [indiscernible] great read on the guidance and you're absolutely right.

I would say what I explained to earlier Dave's question is the large enterprise customers which are doing really well, they are exceeding our expectations. And we just want to keep our head slate and not count that excess of expectations which have been achieved in the last two quarters continue unless they happen. But interesting part is these enterprise customers as you know, they get volume discounts. So there is a softer margin on them. Compared to our overall business. Hence, I would say there is more upside on revenue than contribution profit. If that's the way you were interpreting, I think that's absolutely right. So we have more opportunity on revenue. I would say. And that's a part of it is prudence on our part that how we've seen and how the business has performed. We just don't want to take any chance once we see a full four quarter cycle of these large customers. If I may also add, I think as John, as part of the overall strategy for us is to continue to bring as many interchange dollars in our P and L as we can. As part of market capture. As that will be a long term TAM for us to go after converting part of that expense into a revenue source.

Okay. Appreciate all the color.

Thanks guys. Thank you, John. Our next question is from Matt O'Neill with Feet Partners. Your line is now open. Yes. Hi, gentlemen. Thanks for taking my questions. I was curious if you could remind us a little bit historically on potentially some of the virtues of Paymentus in a tougher macro. And so what I'm getting at is, know, Deshaun, you started the call with some of the defensive ness of the business, right, focusing on utilities and things like phone insurance payments, etcetera. But is there a scenario where billers actually seek out Paymentus more so in an economic downturn because using your solutions improves, conversion and and makes it easier for the ultimate customers to pay their bills.

And things like that. Is that a good way to think about their potentially actually being an upside here? Thanks.

That's a great question actually. And frankly, we have gone through multiple economic cycles and and some events. And even though each event has their own personality, But we we continue to grow our business. In e in all of those scenarios. And of the reason is exactly what you called out that our value proposition on its own is so strong because with our platform, with our ecosystem, our technology and innovation framework, we are able to actually reduce the cost to serve for our clients, especially as the electronic billing adopt and the electronic billing and payment adoption is more mainstream now than it used to be. Meaning for there is more opportunities for efficiencies to be gained for any enterprise of any size especially the larger end of market. [indiscernible] They are looking for ways to reduce their cost to serve and that is not about transaction pricing. At this stage, they all know transaction pricing actually is is not the biggest cost center for them. It is all the other workflows which take place to actually bring the payment in the door. So so we are with our platform, the holistic view of the platform, we are able to solve some of those problems, while also improving the customer experience.

Combine that with our pricing model, which is we don't charge anything for upfront investments and so on because how well deeply integrated we already are in the billing ecosystem today across all the software industries and the verticals we currently serve. So from that perspective, I think our value proposition proposition continues to resonate. In a difficult scenario where there's a downturn, think when folks are looking for ways to bring their revenues faster in the door, and to look for opportunities where more and more customers use more and more and modern channels to make a payment I think our name comes pretty much right there at the top. And as one of the strategies.

To bring that to bear.

Thanks, Dushan. And I guess just as a follow-up, have you guys even anecdotally seen any changes in the business, whether it's from your customers' perspective as far as the pipeline or the underlying of all the billers you serve? Are there any behavioral changes there? I know your business is almost exclusively driven on a revenue per transaction basis, so the dollar amounts are less impactful, although it does impact the cost side a little bit. But have bills kind of all else equal gone up or down or otherwise changed from your observations?

So we are we are seeing encouraging trends actually. All across the across the board. Currently.

Great. Thanks so much.

Thank you, Matt.

Our next question is from Andrew Bausch with Wells Fargo. Your line is now open.

Hey guys. Thanks for taking the question. It's Lamar on for Andrew. Have a follow-up on the large enterprise that hey, that you Sean. Have a follow-up on the large enterprise builders And I understand that you guys are being cautious around they trend and kind of waiting for a full year cycle to gain better visibility and confidence. But it's still outperformed your internal expectations again. And so I guess with another quarter of them under your belt, any early any early learnings that you may be able to share in relation to these large abilities?

And then is it fair to say that the sales momentum that you saw with them in 2024, has that sustained or even accelerated into [indiscernible] micro uncertainty that we're seeing?

Lama, that's a great question. I would have Sanjay come in on most of the question, but I'll just start by saying that one of the exciting aspects, which is giving us as a team a lot of a lot of great feeling for 2025 and beyond is exactly the trend we we observed. Expecting certain things from the new customers we are onboarding and based on the benefit of our platform, our customers are able to enjoy, which is leading to higher adoption of our services. Converting more from paper processes to electronic pay. [indiscernible] is is actually helping increase our TAM even within their same customer base earlier than we were anticipating. So some of those trends are hard to predict, until you have gone through the entire cycle. But I'll let Sanjay comment on the back of it. I'll say it mainly for the same store sales part of your question, Lamar. The trends which we are observed, like, only for, say, two and a half quarters, although again, I would caveat that that's not representative of how will happen. It could happen. It it may not. But the last two and a half quarters, the trends have been fairly decent.

Have been pretty much similar to what we see in other parts of the business, whether they are mid market clients or small clients or large clients. I think they've they've been pretty much similar in similar in range. The interesting part on this is that these these customers are helping us get similar customers or large customers which are in our pipeline as of now. And we see good opportunities around around the horizon to see good performance in the outer years. One of the interesting pieces of the enterprise customers is together they're giving an opportunity for the pipeline I think the the quality of what or the feedback which we are getting from the customers is is pretty much helping us across the board even in small sized clients. So I think it's just we've got many household names as well now in our pipeline. So that's the additional benefits, I would say. But in terms of trends, we are feeling very good about what we have seen so far. Okay. Thanks. Makes sense, and great job in the quarter. Thank you, Lamar.

Next question is from Darrin Peller with Wolfe Research. Your line is now open.

Guys.

Nice job on the quarter here. I guess just I think really revisiting your ability to scale into these into incremental verticals has continued to impress us. So maybe what are the latest trends you're seeing in terms of demand across moving beyond utilities or of the categories that you've been in for some time and really understanding some of the areas around obviously, health care, insurance, education, even government, I know. So the latest in terms of what you're seeing the most demand from that's incremental Where is it resonating? And maybe what are the driving factors of differentiation you're offering resonating in those areas more recently?

Yeah. It's a great question, Dan. One of the things I would say is, that we wanted to do the do the exact same analysis of our bookings in Q1 compared to the year over year bookings in verticals. And we are very excited actually to see how well our verticals, not just utilities, which is growing rapidly and continues to do well as sizable as that is, But all the other verticals you named are doing well as well. And and growing pretty fast. The primary value proposition actually is what we are noticing is and what we believe will eventually be the case. Our view of the long term view of the bill payment market. Clients want a platform that is proven, that is tested, that is able to handle scale, withstand all the complexities and sophistication of the workflows and is still able to provide the best customer experience.

The we don't we do not believe the single purpose use case where a platform is designed for one particular industry, offers any more capabilities to a to a billing company once they reach the mainstream of adoption. Beyond the initial stage and the early adopters and so on. Once you reach the mainstream, everyone knows that consumers are looking consumers are the same. I'm the same consumer who's paying my phone bill as well as my insurance bill as well as my healthcare bill and my utility bill. And and Paymentus as pervasive as we are getting, we are becoming a more well known name even for the consumers and the businesses business payers who are using our platform as they go from different places to different places and across the country.

Okay. Okay.

So it sounds like it's a similar value prop at the end of the day, but I just wonder if that's yeah, that's what's great to see.

I guess one quick follow-up more more on the financials. Side. Sanjay, just be just when we talk about the operating leverage in the business, obviously you guys have shown pretty amazing margin expansion consistently. From your perspective, I mean, what just remind us on your on your maybe longer term targets, what kind of operating margins you see this business getting to? Is there anything between now and then that might change [indiscernible] types of incremental margin profile and we're seeing on the new business you're adding would be helpful?

Thanks guys.

I'll say achieving 34.2% margin in this quarter, which is a record Definitely, we are proud of that. And while we all would like to march on that path and even better every quarter and why not. Right? Because a great operating leverage and the business is killing. But I think it's not it's not prudent on our part to talk about how the long term will shape up. The only guidance we provided for the longer term vision is our top line we expect would continue to grow 20% annually And EBITDA margin dollars would expand between 2030%. As over latest up to date full year guidance reflects today, at the high end both of these metrics actually are ahead of these long term targets. So coming to the EBITDA margin, I would say that's kind of the balancing figure. That's not something which rises It's the product of our business and operating efficiency should deliver good results.

We dropped more than 50% incremental contribution profit to the bottom line. And as new business scales and as far as we spend correctly with our contribution profit, our OpEx has to be calibrated as, you know, that will derive the results. But there could be quarters, would say, Darren, that we could we could decide to spend extra and make extra investments in the business as we have to scale and capture more pipeline convert the bookings. We might have to spend extra times. That could be in quarters, not overall, I would say. Yeah. So I would say longer term, have good expectations for EBITDA margin. Can't give a number.

Okay.

All right. Work, guys. Thanks.

Thank you, Devin.

Our next question is from Will Nance with Goldman Sachs. Your line is now open. Hey, guys. Appreciate you taking the question.

Nice to see some of the channel partnership announcements today. Vishal, I'm wondering if you could spend some time just giving an update on the channel distribution strategy You know, what's the makeup of of your current kinda go to market resources today, and, you know, how does the, how does the new business kind of distribute across various channels? Appreciate it.

Sure. Hey, Will. We, we are actually the the channel partners we called out, the channel partners have become a very important and a strategic part of our go to market strategy in conjunction with our direct go to market. And we are seeing that combination of direct strategy with channel partners in different verticals. As well as the side regardless of the size of the customers. It actually does help help achieve the type of efficient to market strategy we are seeking as we are scaling the business. So today, general if you would have asked it like ten years ago or eight years ago or even six years ago, channel partner would be a smaller part of our business. Than it is today. Channel partners continue to be continue to add increasing value. To our pipeline and the bookings. But at the same time, we believe one of the best things we have done is we have remained in all verticals we go after. We have remained active ourselves. So that we can learn from the customers, we can learn from the market, we can learn from the pricing, and the value proposition strategy. And all the different challenges are exciting opportunities that exist.

And learn from them and as a result share with our partners as well and and and and then redefine a go to market strategy. So that is helping us lot.

Got it. That's super helpful. And then just on the large enterprise, implementations that you've been revving on the last couple of calls. I was wondering if you could give any sense for the contribution to revenue and contribution profit from those merchants specifically just as we think about modeling out the back half of the year? And starting to lap those implementations, it'll I would guess that we'll start to see some of the spread between revenue and contribution, profit change. But if there's anything you could do to maybe cut a box around know, what those what those merchants are are contributing to some of the results right now, that'd be very helpful just in calibrating the models? Thank you.

Nice results today. Well, thanks. Appreciate the question and appreciate the desire to get that level of granularity of our business. But we've decided not to get into that level at this point given we have only two and a half quarters under our belt. I think once we have full year, we might be able to share some color. But we are we we we don't wanna get into that level at this point in time. The only thing I can say is that and what we have shared to date is that large customers definitely get a better pricing. Said differently, their margins are softer than corporate margins, but overall, the operating leverage on the business if that is considered, it's a very profitable and great business for us. As you've seen, our adjusted EBITDA was record 34.2%. So I think overall, it's accretive. It's definitely accretive to the bottom line. And they are adding good cash good profitability to us, helping us reach better margins. Won't be able to get into the things that you're seeking at this point.

Okay.

Alright. Understood. Appreciate it. Thanks for taking the questions.

Thank you, Will.

There are no more questions. So I'll pass the call back over to the management team for closing remarks.

Thank you, everyone. Have a great day.

Thank you. That concludes the conference call. Thank you for your participation. Enjoy the rest of your day.