Paymentus Raises 2026 Revenue and Adjusted EBITDA Guidance After Q3 Growth

Paymentus Holdings (NYSE: PAY ) reported third-quarter financial results on Monday. The transcript from the company's third-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Paymentus Holdings reported record revenue of $372.2 million for Q3 2026, reflecting 19.8% year-over-year growth. Adjusted EBITDA increased 38.6% year over year to $49.7 million. The company is optimistic about reaching $2 billion in combined revenue and backlog within 18 to 24 months through strategic growth and interchange monetization opportunities. Key strategic initiatives include expanding the Bill Wallet user base, enhancing agentic AI capabilities and signing new clients across multiple verticals.

Q3 saw a significant increase in processed transactions, reaching 219 million, up 20.1% year over year, while maintaining a consistent average price per transaction. Management highlighted a strong pipeline and backlog, indicating confidence in continued growth, and raised full-year 2026 guidance for revenue and adjusted EBITDA. Full Transcript OPERATOR Good day, and welcome to the Paymentus Holdings third quarter 2026 earnings conference call. This call is being recorded.

All participants are currently in a listen-only mode. There will be an opportunity to ask questions following management's prepared remarks. All lines will be placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session.

If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. At this time, I will now turn the call over to David Hiver, Investor Relations.

Please go ahead. David Hiver (Investor Relations) Thank you, operator. Good afternoon. Welcome, and thank you for joining today's webcast to review our third quarter 2026 results.

Earnings release documents are available on the Investor Relations section of the Paymentus Holdings website. They include the earnings presentation that we will make references to during this webcast. This webcast is being recorded. I hope everyone's had a chance to review those documents.

Our Founder and CEO, Dushan Sharma, will make some opening comments before Sanjay Kalra, our CFO, discusses the details of the third quarter and our guidance. Following our prepared remarks, we'll take questions. Let me just remind you that our remarks today may include forward-looking statements within the meaning of Federal Securities Laws and the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and involve a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

For a detailed discussion of these risk factors, please refer to our most recent Form 10-K and 10-Q filings with the Securities and Exchange Commission. We will also refer to non-GAAP financial measures during the webcast. Information about non-GAAP financial measures, including reconciliations to U.S. GAAP, can also be found in our earnings materials that are available on our website.

Finally, the company assumes no obligation to update any forward-looking statements made today, whether as a result of new information or future events or otherwise. With that, I'd like to turn the webcast over to Dushan Sharma. Dushan, Dushyant Sharma (Founder, President, Chairman, Chief Executive Officer, and Board of Director) Thanks, David. Paymentus Holdings delivered another strong quarter.

We posted a record revenue of $372.2 million, representing 19.8% year-over-year growth. This drove contribution profit of $118.5 million, up 20.6% year over year, and adjusted EBITDA of $49.7 million, up 38.6% year over year. Both are also record figures for the company, as our adjusted EBITDA approaches $50 million for the third quarter, meaning an annual run rate of $200 million. I'm reminded that this represents an increase of almost 800% over where we were just five years ago.

In the same quarter five years ago, we also exited with $100 million of quarterly revenue for the first time and, as you can see, this past quarter our revenue was 270% higher over that amount. I also prefer to look at the business in terms of how many turns of growth over how many years. With the business very well positioned for the future, I'm excited to see what the next five years will look like and what we need to do to grow in a similar fashion.

And I'm not trying to provide long-term guidance here, but this is how I think and this is the type of thought process and potential upside that motivates me and my team to make big things happen beyond a specific quarter or a given calendar year. On that note, in my view the future is very bright and as we completed the last year as a billion-dollar revenue company for the first time, the natural question is how far away we are to the $2 billion number.

And as we are not giving any guidance for 2027 and 2028 on this call, but if I were to model the business out and simply add four components together—first, our current revenue; second, our current backlog; third, our future backlog using historical conversion rates from our pipeline to bookings; and fourth, our growth within our existing customer base using historical rates—it's quite possible that in the next 18 to 24 months from today we have the potential to reach approximately $2 billion of revenue and backlog combined. Of course, we still have to make things happen between now and then and, as always, there's an execution risk.

But it sure feels good to think about getting to a $2 billion number in coming years. While it was just last year when for the first time we achieved a billion-dollar top line after being in business for years. And the reason $2 billion is also interesting is because it provides a meaningful TAM for interchange monetization. So if we were to be able to solve for interchange monetization using our patented Bill Wallet and Billio between now and then and further monetize our network, then we have the opportunity to grow our earnings and contribution profit at a faster pace.

The reason I bring this all up is to show how exciting our business is, and I suspect it is comforting for the investors to know that the opportunities for earnings growth are multidimensional. On that note, let me share two updates on our continued journey and steps we are taking towards interchange monetization. First, we are pleased to report that this quarter's bookings include a sizable interchange monetization agreement that will use our instant payment network capabilities.

This agreement provides us an opportunity to participate in interchange economy as transactions take place, and we'll provide more updates on this in future calls as it is too early to talk about the nature and impact, but for those who are not very familiar, the interchange monetization roadmap has the opportunity to convert our largest cost center into a profit center. Second, Bill Wallet. The opportunity here is rather exciting, especially in the context of interchange TAM that comes along with the $2 billion number. What if Bill Wallet becomes a household name?

And I mention this possibility because we have continued to see outstanding progress here, as we have now doubled the Bill Wallet user base to over 200,000 users. In the grand scheme of things, 200,000 users is not a very big number, but it becomes rather interesting if you double-click on it and think of the groundwork being laid out for the target state. Let me provide additional context. We have only just started and exposed Bill Wallet to a very small fraction of our user base and are already outpacing all legacy digital wallets within that customer cohort with no marketing.

Next, let's review the pervasive nature of Bill Wallet. Currently there are about 40,000 active ZIP codes in the United States, and we today have a Bill Wallet user in almost a third of those ZIP codes. This speaks to the power of our ecosystem we have already built and, as I shared earlier, we're just getting started. To put a bow on this point, let me provide some other important data points.

Almost one in three households and businesses currently use Paymentus Holdings platform to pay their bills, and this is even though we do not yet have anywhere near 100% of the clients' users using Paymentus Holdings to pay their bills, meaning the number of potential end users might be almost double of this. Furthermore, as you can now see, based on how the market is evolving with agentic AI systems, we believe Paymentus Holdings, with its innovative and patented capabilities, stands out as an industry leader and we believe our model will continue to prove out to be the way service commerce is conducted using our capabilities.

Our head start on creating secure, compliant AI infrastructure for the service commerce space—including data sovereignty, identity, and reconciliation—is exactly the kind of durable rail we believe will matter more, not less, as agentic commerce continues to scale. This industry-wide transition is still in its early stages and we see the current market discussion less as a new risk and more as validation of the strategic direction we committed to and began building years ago. There is a great opportunity here and we believe to the extent agentic AI increases digital payments, we should benefit as well, similar to how we have been able to in the past.

And this is precisely why we invested in Bill Wallet and Billio well ahead of this moment. And as a reminder, Bill Wallet preserves service provider and customer identity along with payment credentials, allowing all interactions to be secure along with Billio, which powers intelligent customer interactions. Both of these innovations vastly improve the customer journey and payment experience while bringing billers and service providers closer to their customers, all while reducing the fear of disintermediation. In addition to the very strong customer feedback we receive, we also continue to receive industry recognition from a technological standpoint.

Dato's just completed an industry-wide analysis and once again awarded Paymentus Holdings as the best-in-class platform in the electronic bill presentment and payment market. Paymentus Holdings was recognized for having one of the largest and most established client bases among purpose-built providers, supported by strong client retention and sustained enterprise growth. We are proud of this award and I think it reinforces the factors that I mentioned earlier. So this is why, when you look at Paymentus Holdings, you should look at us as a multidimensional grower to deliver shareholder returns.

Meaning our growth algorithm is not just based on a single-dimensional play—assigning customers, onboarding revenues, and generating margins. With our current scale and possibility of us reaching $2 billion of revenue and backlog combined in coming years, we are a multidimensional growth algorithm company. In other words, we are much more than an industry-leading bill payment platform. We are also a network ecosystem that will continue to power operating leverage and multidimensional earnings growth for years to come—like we have done over the last five years where our revenue grew by 270% while at the same time our EBITDA grew by 800%.

With that, let me provide more context around our financial results for the third quarter. The third quarter revenue growth is especially important because it came on top of the third quarter last year, which included a very strong cohort of new customer implementations. So even with that tough comp, we reported a strong year-over-year growth across our key financial metrics. And complementing this, our bookings, pipeline, and backlog were all very strong at quarter end and, considering our year-to-date results, we continue to believe we are well on track to meet our 2026 financial goals.

And as we have stated before, we operate on a two-year fiscal horizon, so while year-over-year growth rates may fluctuate from quarter to quarter, this does not change our confidence in the underlying trajectory for the business. Combined with our strong backlog and bookings, we continue to feel very good about the balance of 2026 and into 2027. Now let's turn to our business results on slide 6. In addition to our outstanding financial results, our business momentum continued during the third quarter with sizable bookings, and we exited the quarter with a strong backlog and pipeline.

We also continue to expand and diversify our customer base by signing new clients across several industry verticals, including utilities, insurance, government, property management, telecommunications, banking, and education. In complementing this, we signed additional channel partners across several verticals, including utilities and mortgage onboarding. Our substantial backlog remains a top priority and during the third quarter we continued to onboard clients across utilities, insurance, government, property management, telecommunications, banking, and healthcare. This in turn will drive further profitable, sustainable revenue growth for Paymentus Holdings.

And with that, I will now turn it over to Sanjay to review our financial results in more detail. Sanjay Kalra (Senior Vice President & Chief Financial Officer) Thanks, Vishal, 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 Q3 press release and earnings presentation include reconciliations of these non-GAAP financial measures to their corresponding GAAP measures.

Both of these are available on our website. Turning to Slide 7, building on our momentum in the first half of this year, our third quarter 2026 results once again exceeded the top end of our guidance range for all three of our key financial metrics. These results reinforce the strength and flexibility of our business model and our proven ability to meet and exceed our own expectations. Our third quarter results included revenue of $372.2 million, up 19.8% year over year, contribution profit of $118.5 million, which was up 20.6%, and adjusted EBITDA of $49.7 million, which increased 38.6%.

We also continued to experience strong customer activity and demand, which fueled bookings and allowed us to exit the quarter with a considerable backlog. Based on our year-to-date results, our expectations for the remainder of 2026, and our strong forward visibility, we are once again raising our full-year 2026 revenue, contribution profit, and adjusted EBITDA guidance, which I will review shortly. Now let's look at our third quarter financials in more detail on Slide 8. As mentioned, Q3 revenue grew 19.8% to reach $372.2 million.

This growth was twofold: first, the successful launch of new billers as anticipated, and second, the continued growth in same-store sales from our existing billers. Additionally, the number of transactions we processed this quarter increased to 219 million, up 20.1% year over year. Our average price per transaction was $1.70 during the third quarter, which was consistent with the prior year. Third quarter 2026 contribution profit increased to $118.5 million, up 20.6% year over year at a pace that modestly exceeded our transaction growth, mainly due to biller mix.

Contribution profit per transaction for the quarter was $0.54, relatively flat year over year. We believe this highlights our ability to capture market share while maintaining our profitable operating profile. Contribution margin was 31.8% for the third quarter, a modest improvement compared to 31.6% in the prior year. We generated a record adjusted EBITDA margin of 41.9%, a 540 basis point improvement year over year, primarily due to higher operating leverage.

Furthermore, we also generated an incremental adjusted EBITDA margin of 68.4%. These results are consistent with our overall strategy of focusing on profitable growth, which I will elaborate on shortly. As we continue to grow and diversify our client base, and as we add more larger clients to the mix, we expect pricing and contribution profit to vary quarter to quarter. It's important to note these larger clients are paying us similar or even increased average selling prices than they are accustomed to with other providers.

We believe they value the quality of our services and the solutions we provide, which ultimately saves them money and enables them to provide better service to their customers. Again, as we said before, 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 quarter-to-quarter basis. Moving down the P&L, third quarter adjusted gross profit was $99.8 million, up 23.1% year over year, ahead of our contribution profit growth as a result of economies of scale.

As anticipated, third quarter non-GAAP operating expenses were modestly soft on a sequential basis, increasing 10.2% year over year to $53 million. This was primarily due to increased hiring and agency fees for business from our resellers and partners in order to convert our strong pipeline into bookings, as well as an increase in research and development expenses to enhance our technical strengths. We expect to make similar investments throughout the remainder of the year as we continue to execute our go-to-market strategy. These assumptions are already incorporated into our guidance, which I'll review shortly.

And again, this increase was consistent with our expectations.