Paymentus Holdings Inc
For the period ended Dec 31, 2024. Filed Mar 11, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 11, 2025
PAY$33.47+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-05.
0000950170-24-025084
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-11.
0000950170-25-036566
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 142 previous paragraphs and 143 current paragraphs.
103 unchanged; 28 reworded; 11 added; 9 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
The United States economy experienced inflationary conditions in 2022 and 2023, with some moderation throughout 2024. Interest rates remained relatively stable in 2024, and were cut near the end of the year. Gross domestic product showed growth, reflecting an improving economic environment. However, the impacts of prior years' inflation and economic uncertainty persists and may continue to pose challenges to our performance through 2025. In addition, the introduction of new tariffs or the escalation of trade disputes with other countries could potentially affect our future performance.
Current report
While inflationary conditions have stabilized, elevated costs—particularly in the utility sector—and higher interchange fees continue to impact our operations. To mitigate these pressures, we are proactively adjusting our pricing strategies; however, the timing of these adjustments typically lags behind the inflationary effects experienced by our clients. We remain committed to monitoring the economic landscape closely and will implement further pricing adjustments as needed to address ongoing market dynamics and maintain the resilience of our business.
Current report
(1)Other income consists of a remeasurement adjustment relating to the purchase price of a prior acquisition.
Current report
Gross margin experienced a decrease, driven by changes in customer mix resulting primarily from the addition of large, high-volume enterprise billers with lower margins in our biller mix. This decline was partially offset by cost improvement initiatives and the realization of economies of scale.
Current report
The increase in research and development expenses was primarily due to increased amortization of capitalized internal-use software development costs, an increase in employee-related costs, including an increase in stock-based compensation and an increase in subscription cost for operational third party services.
Current report
Sales and marketing expenses increased mainly due to a $16.7 million rise in reseller commissions, including the amortization of warrants aligned with the growth in our revenue. Additionally, employee-related costs grew as a result of increased hiring and higher stock-based compensation expenses.
Current report
The marginal increase in general and administrative expenses was primarily due to increases in professional fees and legal fees, which were offset by lower cost of insurance premiums of certain business policies.
Current report
Interest income, net
Current report
The changes in interest income, net was a result of higher cash balances held with banks.
Current report
The change in provision for income taxes, as well as the increase in our effective tax rate, which increased to 18.1% for the year ended December 31, 2024 as compared to 11.2% for the same period in the prior year, was primarily due to an increase in taxable income after utilizing a significant amount of net operating losses (NOLs), which were previously subject to a full valuation allowance. Additionally, the increase in our effective tax rate was influenced by permanent differences for disallowed stock-based compensation pursuant to IRC Section 162(m) and state taxes, which were partially offset by the release of the valuation allowance.
Current report
Cash used in financing activities consists primarily of option exercises and payments related to holdback liabilities related to acquisitions.
Removed paragraphs (9)
Previous report
In 2022 and 2023, the United States economy experienced inflationary conditions, increased interest rates and consecutive quarters of decreased gross domestic product. While we believe our business is resilient and can generally weather unusual levels of inflation, the economic uncertainty and continuing inflationary pressures, which have been particularly acute in the utility sector, negatively impacted our fiscal 2023 and 2022 financial performance. Although inflationary pressures lessened to some extent in the second half of 2023, economic uncertainty and inflationary conditions remain high and could have an adverse impact on our 2024 performance. Inflationary pressure is resulting in higher average bills, particularly in the utility sector, and increased interchange fees. Where appropriate, we seek to adjust our prices to address the inflationary pressures, however our ability to do so typically lags behind the impact of inflation on our clients, the increase in average bill amounts and increased interchange fees. While we made several price adjustments in 2023 as a result of the inflationary impacts on our business, we will continue to monitor and manage the economic environment in 2024 and by working closely with clients on implementations and further price adjustments as necessary.
Previous report
The increase in research and development expenses was primarily due to increased amortization cost of capitalized internal-use software development costs and acquired intangibles relating to our PROFIT acquisition, and an increase in employee-related costs, including benefits due to an increase in headcount as we continued to invest in developing and adding additional features and functionality to our platform. Additionally, we incurred increased stock-based compensation expense associated with routine and new hire grants. See Note 4 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information regarding our acquisition of PROFIT Financial, Inc.
Previous report
The increase in sales and marketing expenses was primarily due to an increase in employee-related costs, including benefits, as we continued to expand our sales and marketing efforts with additional headcount in order to continue to drive our growth. We also incurred increased stock-based compensation associated with routine and new hire grants. In addition, we incurred increased agency commissions associated with new billers.
Previous report
The decrease in general and administrative expenses was primarily due to lower costs for our directors and officers insurance premiums, a reduction in lease costs, lower legal expenses, lower acquisition related expenses and lower commercial contract termination costs, which were offset by higher employee-related costs including benefits and increased stock-based compensation expense associated with new hire grants.
Previous report
Other Income (Loss)
Previous report
The changes in other income (expense) were primarily due to the increase in interest income, net as a result of increases in the Federal Reserve rates which increased interest income on our cash held with the banks.
Previous report
The change in benefit from (provision for) income taxes, as well as the decrease in our effective tax rate, which decreased to 11% for the year ended December 31, 2023 as compared to 60.8% for the same period in the prior year, was primarily due to the increase in pre-tax income from the prior year, which had the effect of causing rate impact items to have a lower percentage impact on the rate overall given the higher base of pre-tax income. In addition, the lack of excess tax benefits on stock-based compensation, utilization of net operating losses and the valuation allowance recorded against the net U.S. deferred tax assets had the largest impact on the effective tax rate.
Previous report
Net Cash (Used in) Provided by Financing Activities
Previous report
Cash provided by (used in) financing activities consists primarily of proceeds from the IPO and private placement and option exercises offset by the redemption of the Series A preferred stock, payment of deferred offering costs related to the IPO, changes in financial institution funds in-transit, and payments on capital lease and other financing arrangements and principal payments on debt.
Reworded paragraphs (28)
Previous wording
A discussion of changes in our results of operations from fiscal year 2021 to fiscal year 2022 and a discussion of our liquidity and capital resources for 2021 has been omitted from this Annual Report on Form 10-K but may be found under the heading "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Comparison of the Years Ended December 31, 2022 and 2021" and "—Liquidity and Capital Resources—"Sources and Uses of Funds" and "—Historical Cash Flows" in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 3, 2023, which is available free of charge on the SECs website at www.sec.gov and our website at https://ir.paymentus.com/home/default.aspx.
Current wording
A discussion of changes in our results of operations from fiscal year 2022 to fiscal year 2023 and a discussion of our liquidity and capital resources for 2022 has been omitted from this Annual Report on Form 10-K but may be found under the heading "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Comparison of the Years Ended December 31, 2023 and 2022" and "—Liquidity and Capital Resources—"Sources and Uses of Funds" and "—Historical Cash Flows" in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 5, 2024, which is available free of charge on the SECs website atwww.sec.gov and our website athttps://ir.paymentus.com/home/default.aspx.
Previous wording
We are a leading provider of cloud-based bill payment technology and solutions. We deliver our next-generation product suite through a modern technology stack to more than 2,200 biller business and financial institution clients. Our platform was used by approximately 34 million consumers and businesses in North America in December 2023 to pay their bills, make money movements and engage with our clients. We serve billers of all sizes that primarily provide non-discretionary services across a variety of industry verticals, including utilities, financial services, insurance, government, telecommunications, real estate management and healthcare. We also serve financial institutions by providing them with a modern platform that their customers use for bill payment, account-to-account transfers and person-to-person transfers. By powering this comprehensive network of billers and financial institutions, each with their own set of bill payment requirements, we believe we have created an enviable feedback loop that enables us to continuously drive innovation, grow our business and uniquely improve the electronic bill payment experience for participants in the bill payment ecosystem.
Current wording
We are a leading provider of cloud-based bill payment technology and solutions. We deliver our next-generation product suite through a modern technology stack to more than 2,500 biller business and financial institution clients. Our platform was used by approximately 46 million consumers and businesses globally in December 2024 to pay their bills, make money movements and engage with our clients. We serve billers of all sizes that primarily provide non-discretionary services across a variety of industry verticals, including utilities, financial services, insurance, government, telecommunications, real estate management, education, consumer finance, healthcare and small business. We also serve financial institutions by providing them with a modern platform that their customers use for bill payment, account-to-account transfers and person-to-person transfers. By powering this comprehensive network of billers and financial institutions, each with their own set of bill payment requirements, we believe we have created an enviable feedback loop that enables us to continuously drive innovation, grow our business and uniquely improve the electronic bill payment experience for participants in the bill payment ecosystem.
Previous wording
Our revenue is highly visible. We derive the majority of our revenue from a fee paid per transaction by the consumer, the biller or a combination of both. Our usage-based monetization strategy aligns our economic success with the success of our billers and partners. Since we benefit from increased transactional volume, we do not charge separate license fees or implementation fees. In addition, our modern platform architecture allows us to provide integration, implementation, maintenance and upgrades at no additional cost to billers.
Current wording
Our revenue is predictable to a certain degree. We derive the majority of our revenue from a fee paid per transaction by the consumer, the biller or a combination of both. Our usage-based monetization strategy aligns our economic success with the success of our billers and partners. Since we benefit from increased transactional volume, we do not charge separate license fees or implementation fees. In addition, our modern platform architecture allows us to provide integration, implementation, maintenance and upgrades at no additional cost to billers.
Previous wording
Cost of revenue consists of certain direct costs that are directly attributed to processing transactions on our platform. This includes interchange, assessment and network expenses incurred for processing payments as well as costs of servicing our clients through product support, implementations and customer care. Cost of revenue also includes an allocation of hosting and data center costs for our infrastructure and platform environment, telecommunication expenses used by sales and customer support teams and a portion of amortization of capitalized internal-use software development costs and a portion of amortization of intangible assets, including amortization of intangible assets acquired as part of our acquisitions of other businesses. We expect that cost of revenue will increase in absolute dollars, but it may fluctuate as a percentage of revenue from period to period, as our transaction mix changes and we continue to invest in growing our business across all geographical segments, including through the acquisition of other businesses.
Current wording
Cost of revenue consists of certain direct costs that are directly attributed to processing transactions on our platform. This includes interchange, assessment and network expenses incurred for processing payments as well as costs of servicing our clients through product support, implementations and customer care. Cost of revenue also includes an allocation of hosting and data center costs for our infrastructure and platform environment, telecommunication expenses used by sales and customer support teams and a portion of amortization of capitalized internal-use software development costs and a portion of amortization of intangible assets, including amortization of intangible assets acquired as part of our acquisitions of other businesses. We expect that cost of revenue will increase in absolute dollars alongside revenue growth, but it may fluctuate as a percentage of revenue from period to period, as our transaction mix changes and we continue to invest in growing our business across all geographical segments, including through the potential acquisition of other businesses.
Previous wording
There are external factors that impact interchange fees, such as the average transaction amount in a particular month or quarter. For example, hot summers and cold winters tend to increase utility bills, and property taxes result in two larger payments per year, each of which increases our interchange cost.
Current wording
There are external factors that impact interchange fees, such as the average transaction amount in a particular month or quarter. For example, hot summers and cold winters tend to increase utility bills, and property taxes result in two larger payments per year, each of which increases our interchange cost in line with the seasonal nature of our business.
Previous wording
Gross profit is equal to our revenue less cost of revenue. Gross profit as a percentage of our revenue is referred to as gross margin. Our gross margin has been and will continue to be affected by a number of factors, including average transaction value, payment type and payments and transactions through our IPN.
Current wording
Gross profit is equal to our revenue less cost of revenue. Gross profit as a percentage of our revenue is referred to as gross margin. Our gross margin has been and will continue to be affected by a number of factors, including addition of large, high-volume enterprise billers with lower margins in our biller mix, average transaction value, payment type and payments and transactions through our IPN.
Previous wording
Sales and marketing expenses consist primarily of personnel-related expenses, including stock-based compensation expenses for sales and marketing personnel, sales commissions, partner fees, marketing program expenses, travel-related expenses and costs to market and promote our platform through advertisements, marketing events, partnership arrangements and direct biller acquisition as well as amortization of intangible assets acquired as part of our acquisitions of other businesses. We expect our sales and marketing expenses to increase in absolute dollars, but they may fluctuate as a percentage of revenue from period to period.
Current wording
Sales and marketing expenses consist primarily of personnel-related expenses, including stock-based compensation expenses for sales and marketing personnel, sales commissions, partner fees, marketing program expenses, travel-related expenses and costs to market and promote our platform through advertisements, marketing events, partnership arrangements and direct biller acquisition as well as amortization of intangible assets acquired as part of our acquisitions of other businesses. We expect our sales and marketing expenses to increase in absolute dollars alongside revenue growth, but they may fluctuate as a percentage of revenue from period to period.
Previous wording
General and administrative expenses consist primarily of personnel-related expenses, including stock-based compensation expenses for finance, risk management, legal and compliance, human resources, information technology and facilities personnel. General and administrative expenses also include costs incurred for external professional services, leasing of office buildings and other corporate expenses. We expect to continue to incur additional general and administrative expenses to support the growth in our business. We expect that our general and administrative expenses will increase in absolute dollars, but they may fluctuate as a percentage of revenue from period to period. Over the longer term, we expect general and administrative expenses to decrease as a percentage of revenue as we leverage the scale of our business.
Current wording
General and administrative expenses consist primarily of personnel-related expenses, including stock-based compensation expenses for finance, risk management, legal and compliance, human resources, information technology and facilities personnel. General and administrative expenses also include costs incurred for external professional services, leasing of office buildings and other corporate expenses. We expect to continue to incur additional general and administrative expenses to support the growth in our business and to meet regulatory compliance requirements. This includes the transition from an emerging growth company to a large accelerated filer for SEC compliance. We expect that our general and administrative expenses will increase in absolute dollars, but they may fluctuate as a percentage of revenue from period to period. Over the longer term, we expect general and administrative expenses to decrease as a percentage of revenue as we leverage the scale of our business.
Previous wording
Our future growth depends on the continued adoption of our platform by new billers and financial institutions, as well as maintaining our existing billers and financial institutions. We intend to continue investing in our efficient go-to-market strategies, increasing brand awareness and driving adoption of our platform and products. We had more than 2,200 billers and financial institution clients as of December 31, 2023, including billers of all sizes and across numerous vertical markets and financial institutions of all sizes. Our ability to attract new, and maintain existing, billers and financial institutions and drive adoption of our platform will depend on a number of factors, including the effectiveness and pricing of our products, offerings of our competitors and the effectiveness of our marketing efforts. Our growth and performance also depends on our ability to promptly implement and begin recognizing revenues from our new billers and financial institutions.
Current wording
Our future growth depends on the continued adoption of our platform by new billers and financial institutions, as well as maintaining our existing billers and financial institutions. We intend to continue investing in our efficient go-to-market strategies, increasing brand awareness and driving adoption of our platform and products. We had more than 2,500 billers and financial institution clients as of December 31, 2024, including billers of all sizes and across numerous vertical markets and financial institutions of all sizes. Our ability to attract new, and maintain existing, billers and financial institutions and drive adoption of our platform will depend on a number of factors, including the effectiveness and pricing of our products, offerings of our competitors and the effectiveness of our marketing efforts. Our growth and performance also depends on our ability to promptly implement and begin recognizing revenues from our new billers and financial institutions.
Previous wording
We define transactions processed as the number of revenue generating payment transactions, such as checks, credit card and debit card transactions, automated clearing house, or ACH, items and emerging payment types, which are initiated and generally processed through our platform during a period. The number of transactions also includes account-to-account and person-to-person transfers. The number of transactions processed during the year ended December 31, 2023 increased approximately 24.9% as compared to 2022. The number of transactions processed during the year ended December 31, 2022 increased approximately 30.8% as compared to 2021. The increase for both years was primarily driven by the addition of new billers and increased transactions from our existing billers.
Current wording
We define transactions processed as the number of revenue generating payment transactions, such as checks, credit card and debit card transactions, automated clearing house, or ACH, items and emerging payment types, which are initiated and generally processed through our platform during a period. The number of transactions also includes account-to-account and person-to-person transfers. The number of transactions processed during the year ended December 31, 2024 increased approximately 30.3% as compared to 2023. The number of transactions processed during the year ended December 31, 2023 increased approximately 24.9% as compared to 2022. The increase for both years was primarily driven by the addition of new billers and increased transactions from our existing billers.
Previous wording
We calculate adjusted EBITDA as net income before other income (expense), which consists of interest income (expense), depreciation and amortization of acquisition-related intangible assets and capitalized software development costs, and income taxes, adjusted to exclude the effects of net foreign exchange gain (loss), stock-based compensation expense and certain nonrecurring expenses that management believes are not indicative of ongoing operations.
Current wording
We define adjusted EBITDA as net income before interest income (expense), net, other income (expense), depreciation and amortization of acquisition-related intangible assets and capitalized software development costs, and income taxes, adjusted to exclude the effects of net foreign exchange gain (loss), stock-based compensation expense and certain nonrecurring expenses that management believes are not indicative of ongoing operations.
Previous wording
In general, contribution profit is driven by the number of transactions we process offset by network fees associated with processing those transactions. The amount of contribution profit per transaction may vary due to a variety of factors substantially outside of our control, including client size, type and industry as well as whether the client is a biller, financial institution or other partner. Contribution profit for the year ended December 31, 2023 increased approximately 19.7% as compared to 2022 and increased approximately 27.0% for the year ended December 31, 2022 as compared to 2021. The increase in 2023 was primarily driven by growth in transaction count and volume driven by the addition of new billers and financial institutions and increased transactions from our existing billers and financial institutions, together with improvements resulting from disinflation in the utility sector on a year over year basis, pricing improvements from customers related to our inflation management and the implementation of certain cost improvement measures. The increase in 2022 was primarily driven by the addition of new billers and increased transactions from our existing billers. For 2022 and 2023, contribution profit increased at a slower rate than transactions processed due to a continued mix shift to larger, high volume clients.
Current wording
In general, contribution profit is driven by the number of transactions we process offset by network fees associated with processing those transactions. The amount of contribution profit per transaction may vary due to a variety of factors substantially outside of our control, including client size, type and industry as well as whether the client is a biller, financial institution or other partner. Contribution profit for the year ended December 31, 2024 increased approximately 29.5% as compared to 2023 and increased approximately 19.7% for the year ended December 31, 2023 as compared to 2022. The increase in 2024 was primarily driven by growth in transaction count and volume driven by the addition of new billers and financial institutions and increased transactions from our existing billers and financial institutions. The increase in 2023 was primarily driven by the addition of new billers and increased transactions from our existing billers, together with improvements resulting from disinflation in the utility sector on a year over year basis, pricing improvements from customers related to our inflation management and the implementation of certain cost improvement measures. For 2023 and 2024, contribution profit increased at a slower rate than transactions processed due to a continued mix shift to larger, high volume clients.
Previous wording
Adjusted gross profit for the year ended December 31, 2023 increased 23.1% as compared to 2022 and increased 27.0% for the year ended December 31, 2022 as compared to 2021. Adjusted gross profit is driven primarily by the same factors that impact gross profit with the exception of excluding the amortization in cost of revenue, as well as stock based compensation. The 2023 increase in amortization was driven by the additional capitalization of software costs. The 2022 increase in amortization was driven by additional amortization of capitalization of software costs as well as amortization of acquired intangibles associated with the 2021 acquisitions of Payveris and Finovera. See Note 4 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information regarding these acquisitions.
Current wording
Adjusted gross profit for the year ended December 31, 2024 increased 30.4% as compared to 2023 and increased 23.1% for the year ended December 31, 2023 as compared to 2022. Adjusted gross profit is driven primarily by the same factors that impact gross profit with the exception of excluding the amortization in cost of revenue, as well as stock-based compensation. The increase in amortization for 2024 and 2023 was driven by the additional capitalization of software costs.
Previous wording
(1) Other nonrecurring expenses consists of indirect costs incurred associated with completion of our IPO in 2021 and an estimated liability booked in 2022 related to the cost of terminating a commercial contract.
Current wording
(2) Other nonrecurring expenses represent an estimated liability booked in 2022 related to the cost of terminating a commercial contract.
Previous wording
As adjusted EBITDA is a measure of profitability, it would generally be expected to move in line with revenue, contribution profit, gross profit and adjusted gross profit. Adjusted EBITDA increased 103.1% for the year ended December 31, 2023 compared to 2022 and decreased 3.1% for the year ended December 31, 2022 compared to 2021. The increase in 2023 was primarily driven by growth in transaction count and volume driven by the addition of new billers and financial institutions and increased transactions from our existing billers and financial institutions, together with improvements resulting from disinflation in the utility sector on a year over year basis, pricing improvements from customers related to our inflation management, the implementation of certain cost improvement measures and lower general and administrative expenditures primarily driven by lower insurance premiums and acquisition related costs. Adjusted EBITDA decreased from 2021 to 2022 due to our investment in sales and marketing and research and development in order to drive future growth of the business as well as the increased costs associated with being a public company and the impact of the Payveris and Finovera acquisitions.
Current wording
As adjusted EBITDA is a measure of profitability, it is generally expected to move in line with revenue, contribution profit, gross profit and adjusted gross profit. Adjusted EBITDA increased 62.2% for the year ended December 31, 2024 compared to 2023 and increased 103.1% for the year ended December 31, 2023 compared to 2022. The increase in 2024 was primarily driven by growth in transaction count and volume driven by the addition of new billers and financial institutions and increased transactions from our existing billers and financial institutions. Adjusted EBITDA increased from 2022 to 2023 due to growth in transaction count and volume driven by the addition of new billers and financial institutions and increased transactions from our existing billers and financial institutions, together with improvements resulting from disinflation in the utility sector on a year over year basis, pricing improvements from customers related to our inflation management, the implementation of certain cost improvement measures and lower general and administrative expenditures primarily driven by lower insurance premiums and acquisition related costs.
Previous wording
The increase in free cash flow for the year ended December 31, 2023 compared to 2022 was primarily as a result of increases in cash generated from operations. The decrease in free cash flow for the year ended December 31, 2022 compared to 2021 was primarily as a result of an increase in our investment in research and development activities.
Current wording
The decrease in free cash flow for the year ended December 31, 2024 compared to 2023 was primarily as a result of a decrease in cash generated from operations, together with increases in capitalized software development costs. Cash generated from operations decreased in 2024 compared to 2023 primarily due to increased income taxes and investment in working capital during 2024 as we scaled significantly. The increase in free cash flow for the year ended December 31, 2023 compared to 2022 was primarily as a result of an increase in cash generated from operations.
Previous wording
The increase in revenue was primarily driven by an increase in the number of transactions processed, which was driven by the implementation of new billers and increased transactions from our existing billers. Revenue increase was also driven by pricing improvements related to our inflation management.
Current wording
The increase in revenue was primarily driven by an increase in the number of transactions processed, which was driven by the implementation of new billers and increased transactions from our existing billers.
Previous wording
The increase in cost of revenue was driven by the increase in revenue and transactions processed, as it consists primarily of interchange fees and processor costs, as well as other direct costs associated with making our platform available to our billers. These higher costs were partially offset by cost improvements resulting from disinflation in the utility sector and certain cost improvement initiatives.
Current wording
The increase in cost of revenue was driven by the increase in revenue and transactions processed, as it consists primarily of interchange fees and processor costs, as well as other direct costs associated with making our platform available to our billers.
Previous wording
As of December 31, 2023, we had $179.4 million of unrestricted cash and cash equivalents. We believe that existing unrestricted cash and cash equivalents will be sufficient to support our working capital and capital expenditure requirements for at least the next 12 months. Since inception, we have financed operations primarily through the sale of equity securities and revenue from payment transaction fees. Our principal uses of cash are funding operations, which primarily consist of employee-related costs, and acquisitions. Although subject to change based on market opportunity or changing priorities, currently, we do not have any material planned capital expenditures in the next 12 months.
Current wording
As of December 31, 2024, we had $205.9 million of unrestricted cash and cash equivalents. We believe that existing unrestricted cash and cash equivalents will be sufficient to support our working capital and capital expenditure requirements for at least the next 12 months. Since inception, we have financed operations primarily through the sale of equity securities and revenue from payment transaction fees. Our principal uses of cash are funding operations, which primarily consist of employee-related costs, and acquisitions. Although subject to change based on market opportunity or changing priorities, currently, we do not have any material planned capital expenditures in the next 12 months.
Previous wording
Net cash provided by operating activities for the year ended December 31, 2023 was $68.8 million. Net income was $22.3 million, adjusted for non-cash charges of $45.3 million consisting primarily of depreciation and amortization, stock-based compensation, amortization of contract assets and non-cash lease expense, which contributed positively to operating activities. This was decreased by net cash outflows of $1.2 million used in changes in our operating assets and liabilities.
Current wording
Net cash provided by operating activities for the year ended December 31, 2024 was $63.6 million. Net income was $44.2 million, adjusted for non-cash charges of $55.4 million consisting primarily of depreciation and amortization, stock-based compensation, amortization of capitalized contract acquisition costs and warrants cost, and non-cash lease expense, which contributed positively to operating activities. This was decreased by net cash outflows of $36.0 million for changes in our operating assets and liabilities.
Previous wording
Net cash provided by operating activities for the year ended December 31, 2022 was $19.9 million, primarily consisting of our net loss of $0.5 million, adjusted for non-cash charges of $32.3 million consisting primarily of depreciation and amortization, non-cash lease expense related to our operating right-of-use assets, amortization of contract asset and stock-based compensation, which contributed positively to operating activities. Non-cash adjustment relating to deferred income taxes of $3.0 million and net cash outflows of $11.9 million used by changes in our operating assets and liabilities negatively impacted operating activities.
Current wording
Net cash provided by operating activities for the year ended December 31, 2023 was $68.8 million. Net income was $22.3 million, adjusted for non-cash charges of $46.1 million consisting primarily of depreciation and amortization, stock-based compensation, amortization of capitalized contract acquisition costs and warrants cost, and non-cash lease expense, which contributed positively to operating activities. This was increased by net cash inflows of $0.4 million for changes in our operating assets and liabilities.
Previous wording
Cash used in our investing activities consists primarily of cash paid for acquisitions, capitalized internal-use software development costs, purchases of property and equipment and intangible assets.
Current wording
Cash used in our investing activities consists primarily of cash paid for capitalized internal-use software development costs and purchases of property and equipment and change in interest-bearing deposits.
Previous wording
Net cash used in investing activities for the year ended December 31, 2022 consisted of $29.8 million of capitalized internal-use software development costs, $3.3 million of cash paid for acquisitions, net of cash acquired and $1.3 million of purchases of property and equipment and intangible assets.
Current wording
Net cash used in investing activities for the year ended December 31, 2024 consisted of $36.1 million of capitalized internal-use software development costs, $0.5 million of purchases of property and equipment and $0.2 million of net change in interest-bearing deposits.
Previous wording
Net cash used in investing activities for the year ended December 31, 2023 consisted of $33.7 million of capitalized internal-use software development costs, and $0.6 million of purchases of property and equipment and intangible assets.
Current wording
Net cash used in investing activities for the year ended December 31, 2023 consisted of $33.7 million of capitalized internal-use software development costs and $0.6 million of purchases of property and equipment.
Previous wording
Net cash used in financing activities for the year ended December 31, 2022 consisted of a decrease in financial institution funds in-transit of $33.4 million, $5.3 million of payments on finance leases and other financing obligations, offset by proceeds of $1.5 million from the exercise of stock options.
Current wording
Net cash used in financing activities for the year ended December 31, 2024 consisted of $0.5 million of payments related to holdback liabilities settlement offset by $0.3 million proceeds from the exercise of stock options.
Previous wording
Net cash used in financing activities for the year ended December 31, 2023 consisted of $1.7 million of payments on other financing obligations, $0.1 million of payments on finance leases and $0.6 million proceeds from exercise of stock-based awards by employees.
Current wording
Net cash used in financing activities for the year ended December 31, 2023 consisted of $1.7 million of payments on other financing obligations, $0.1 million of payments on finance leases, offset by $0.6 million proceeds from exercise of stock-based awards by employees.
Previous wording
Consists of operating lease liabilities for office space and data centers.
Current wording
(1) Consists of operating lease liabilities for office space.
Previous wording
Consists of Acquisition holdback payments due to the former owners of Finovera and PROFIT.
Current wording
(3) Consists of Acquisition holdback payments due to the former owners of PROFIT.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Net Cash Used in Financing Activities
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Gross margin decreased due to increases in cost of revenues for other direct costs associated with making our platform available to our billers.
Previous report — wording carried elsewhere
Consists of operating lease liabilities for our offices and data centers.