Paymentus NYSE: PAY reported what management described as a “tremendous start” to fiscal 2026, delivering record first-quarter revenue and adjusted EBITDA while pointing to strong momentum in bookings and pipeline activity. The company also used the call to announce a new product initiative centered on what it is calling “AI-native Service Commerce,” including products branded BillWallet and Billeo.
First-quarter results: record revenue and EBITDA
Founder and CEO Dushyant Sharma said the quarter’s performance reflected “the durability and long-term growth potential of our business model,” citing platform scale, service quality, and an “innovation framework.”
Paymentus posted first-quarter revenue of $358.4 million, up 30.2% year-over-year. Contribution profit rose to $109.7 million, up 25.2%, and adjusted EBITDA increased to a record $42.4 million, up 41.5%, representing a 38.7% margin, according to CFO Sanjay Kalra.
Sharma and Kalra both highlighted that the company exceeded the “Rule of 40,” with Kalra calling the 64 result a company record. Sharma said the performance also reflected reduced sensitivity to energy price impacts due to “vertical diversification and our enhanced pricing strategy over the years.”
Transaction volume and revenue per transaction
Kalra said results came in “much stronger than we had anticipated,” driven by “higher transaction activity from both new and existing billers.” Paymentus processed 203.4 million transactions in the quarter, an increase of 17.4% year-over-year.
Average revenue per transaction increased about 11% to $1.76 from $1.59 in the prior-year period. Kalra attributed the increase largely to biller mix, particularly “large enterprise billers that we launched during the second half of 2025 with higher average payment amounts.”
Contribution margin declined to 30.6% from 31.8% a year earlier, which Kalra said was tied to a higher mix of “large, high-volume enterprise billers.” He added that this was “largely offset by a year-over-year reduction in operating expense margin,” contributing to the record adjusted EBITDA margin.
Bookings, customer expansion, and onboarding
Sharma said Paymentus continued expanding and diversifying its customer base, signing new clients across multiple verticals. He listed utilities, insurance, telecommunications, government agencies, property management, consumer finance, banking, education, and healthcare, and said the company also signed channel partners in education and telecommunications.
Onboarding a “substantial backlog” remains a priority, Sharma said, adding that the company saw “better than expected seasonal performance” largely from a “large cohort of new customers” added in the second half of last year. Kalra similarly pointed to “strong bookings, sizable backlog, and strong pipeline at quarter end” as support for management’s outlook.
Profitability, operating expenses, and cash
Non-GAAP operating expenses rose 16.3% year-over-year to $53 million. Kalra said the increase was “primarily due to higher sales and marketing expenses,” framing it as a “positive leading indicator” because it suggests the company is “aggressively converting our substantial pipeline to bookings.”
Non-GAAP net income was $26.9 million, or $0.21 per share, compared to $17.6 million, or $0.14 per share, in the prior-year period. Kalra said this reflected “an annual EPS growth rate of 50%” and incorporated a non-GAAP tax rate of 25%.
Paymentus ended the quarter with $342.1 million in cash and cash equivalents, up from $324.5 million at the end of 2025, and Kalra emphasized the company has no debt. Cash from operations totaled $30.5 million. Free cash flow was $20.9 million, which Kalra said was affected by working capital investment, “primarily in accounts receivable.”
Addressing a question on free cash flow, Kalra said working capital timing drove year-over-year differences. He noted the company put “around $15 million into working capital” in Q1 versus extracting “around $19 million or $20 million” in the year-ago quarter, adding that “working capital is very, very much temporary” and could normalize within the year.
Raised guidance and prudence theme
Kalra provided raised guidance for the second quarter and full year, emphasizing that the company continues to take what he called a prudent approach.
- Q2 2026 guidance: revenue of $340 million to $350 million, contribution profit of $108 million to $111 million, and adjusted EBITDA of $38 million to $40 million. The company’s Rule of 40 guidance implies 51% to 55%.
- Full-year 2026 guidance: revenue of $1.425 billion to $1.44 billion, contribution profit of $450 million to $457 million, and adjusted EBITDA of $165 million to $172 million, with a 25% non-GAAP tax rate. Full-year Rule of 40 guidance implies 53 to 56.
Responding to questions about why the full-year outlook was not raised more after the Q1 outperformance, Kalra said the company’s consistent methodology is “dominated by prudence,” adding, “We don’t want to count the chickens before they hatch.” Sharma echoed that the guidance philosophy is designed for “creating long-term shareholder value,” arguing that it takes discipline to avoid creating a “noisy environment” around expectations.
On Q2 seasonality, Kalra cited typical patterns in government billers and the need to build “a full year’s history” for large enterprise accounts implemented in the second half of 2025. Management also reiterated that energy prices have become less material to results due to diversification and pricing changes.
Product announcement: “AI-native Service Commerce,” BillWallet, and Billeo
Sharma said Paymentus is establishing a new category called AI-native Service Commerce and introduced “a new paradigm called Billeo” with four patented components:
- BillWallet: a purpose-built digital wallet for bill and service payments, intended to create a “persistent, secure relationship identity” between customer and service provider. Sharma said it is designed to reduce payment completion time by about 75% and work across “agentic, digital, social, physical, and vocal” interactions.
- Billeo: technology that transforms static bills and statements into “intelligent interactive experiences,” enabling consumers to understand charges, resolve issues, and take actions within the document.
- AI360: an AI-based integration, orchestration, and data intelligence framework that powers BillWallet and Billeo and includes data visualization and business intelligence capabilities.
- Security framework: a patented PCI compliance secure service framework intended to support end-to-end protection and compliance.
Sharma described the initiative as a long-term play, telling analysts the company is “not counting anything in 2026 from it other than the fact that our momentum…will continue to be validated.” He framed the strategy in two streams: “evangelize the marketplace with new paradigms” to accelerate customer adoption, and then “monetize the transactions differently than they have been historically monetized.”
On economics, Sharma said Paymentus intends to keep a consumption-based model: “We plan to still remain in consumption-based model,” adding that clients can clearly understand success KPIs. Both Sharma and Kalra said they do not expect significant near-term impacts. Longer term, Sharma said the strategy includes converting interchange expense “into interchange revenue,” and he reiterated the company’s prior comments about the opportunity to monetize interchange in future years.
Sharma also shared early usage data for BillWallet. He said Paymentus had reported 53 million users on its platform as of December 2025, representing about 40% of U.S. households “and possibly businesses.” BillWallet has been made available to “a mere fraction” of that base, and Sharma said that “within a few quarters” the company enrolled 100,000 users across more than 1,000 cities with “no marketing spent.”
On distribution and adoption, Sharma said early conversion has been high without marketing and suggested that ease of use and time savings are key drivers, adding that Paymentus intends to create incentives “within the wallet itself for repeated use.” On the role of service providers, Sharma emphasized that BillWallet is designed to preserve the relationship between billers and their customers, arguing that technologies that disintermediate service providers “is not gonna last too long.”
Asked about competition, Sharma said the company is focused on innovation and reiterated that the product strategy has been “years in the making.” He also addressed a question about REPAY’s acquisition of KUBRA, saying Paymentus knows both companies and has “no concerns,” while wishing competitors well.
About Paymentus NYSE: PAY
Paymentus is a U.S.-based financial technology company that specializes in cloud-native bill payment and presentment solutions. Its platform enables businesses and government entities to manage the entire payment lifecycle, from electronic bill presentment and real-time payment processing to reconciliation and reporting. Through web portals, mobile applications, interactive voice response (IVR) systems and in-person channels, Paymentus helps clients streamline accounts receivable operations, enhance customer engagement and reduce operational costs.
Founded in 2004 and headquartered in Wilmington, Delaware, Paymentus has built a modular suite of services that can be tailored to the needs of various industries.
Read More
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Paymentus, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Paymentus wasn't on the list.
While Paymentus currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Discover the next wave of investment opportunities with our report, 7 Stocks That Will Be Magnificent in 2026. Explore companies poised to replicate the growth, innovation, and value creation of the tech giants dominating today's markets.
Get This Free Report
