Paymentus Q3 Earnings Call Highlights

Key Points

• Record Q3 performance: Revenue rose 19.8% year over year to $372.2 million, while adjusted EBITDA increased 38.6% to $49.7 million, helped by new biller launches, existing-customer growth and operating leverage.
• 2026 outlook raised: Paymentus increased full-year revenue guidance to $1.464 billion–$1.469 billion and adjusted EBITDA guidance to $186 million–$191 million, implying 22.6% and 37.2% growth at the respective midpoints.
• Growth initiatives expanding: BillWallet users doubled to more than 200,000, while the company signed a sizable interchange monetization agreement and continued developing its BillWallet and Billeo agentic-commerce strategy.

Paymentus NYSE: PAY reported record third-quarter results as revenue, contribution profit and adjusted EBITDA each exceeded the high end of the company’s guidance range, supported by new biller launches and continued growth from existing customers.

Revenue for the third quarter of 2026 rose 19.8% year over year to $372.2 million. Contribution profit increased 20.6% to $118.5 million, while adjusted EBITDA climbed 38.6% to a record $49.7 million. The company processed 219 million transactions during the quarter, a 20.1% increase from a year earlier.

Founder and CEO Dushyant Sharma said the company’s quarterly adjusted EBITDA was approaching a $200 million annualized run rate. He noted that Paymentus’ revenue was 270% higher than it had been five years earlier, while EBITDA had grown by almost 800% over that period.

Margin expansion and operating leverage

Paymentus reported a contribution margin of 31.8%, compared with 31.6% in the prior-year quarter. Contribution profit per transaction was $0.54, relatively flat year over year, while average price per transaction was $1.70, also consistent with the prior year.

Adjusted EBITDA margin on contribution profit reached 41.9%, up 540 basis points from 36.5% a year earlier. CFO Sanjay Kalra attributed the margin improvement primarily to operating leverage. The company’s incremental adjusted EBITDA margin was 68.4% in the quarter.

Non-GAAP operating expenses rose 10.2% year over year to $53 million. Kalra said the increase reflected hiring, agency fees tied to converting pipeline opportunities into bookings, and research and development spending intended to strengthen the company’s technology.

Third-quarter non-GAAP net income was $33.1 million, or $0.25 per share, compared with $22.6 million, or $0.17 per share, in the prior-year period. Paymentus also recorded $3.2 million in interest income, up from $2.6 million a year earlier.

The company ended the quarter with $409.6 million in total cash, up from $379.7 million at the end of the second quarter. Cash generated from operations was $43.7 million, partially offset by $9.7 million used in investing activities, primarily capitalized software, and $4 million spent on the net settlement of employee restricted stock units.

Outlook raised for 2026

Following the third-quarter outperformance, Paymentus raised its full-year 2026 guidance for revenue, contribution profit and adjusted EBITDA.

• Fourth-quarter revenue is expected to be between $373 million and $378 million.
• Fourth-quarter contribution profit is projected at $120 million to $122 million.
• Fourth-quarter adjusted EBITDA is expected to range from $45 million to $50 million.
• Full-year revenue guidance was increased to $1.464 billion to $1.469 billion, representing 22.6% year-over-year growth at the midpoint.
• Full-year contribution profit guidance was raised to $466 million to $468 million, implying 20.9% growth at the midpoint.
• Full-year adjusted EBITDA guidance increased to $186 million to $191 million, representing 37.2% growth at the midpoint.

The midpoint of full-year adjusted EBITDA guidance implies a 40.4% margin on contribution profit, compared with 35.6% in the prior year, according to Kalra. The company’s full-year outlook also implies a Rule of 40 score of 61 to 62.

Kalra said the company continues to take a prudent approach to forecasting, particularly as larger billers are launched and Paymentus gains more experience with their payment and cost profiles. He added that the company may increase spending to convert its pipeline into bookings when appropriate, while remaining focused on profitable growth.

Backlog, interchange efforts and BillWallet adoption

Management said bookings, pipeline and backlog remained strong at quarter-end, although it did not disclose the size of its signed-but-not-live backlog. Kalra described the backlog as diversified across industries, customer sizes and household-name clients.

Sharma said Paymentus has the potential to reach approximately $2 billion in combined revenue and backlog within the next 18 to 24 months based on current revenue, backlog, historical pipeline conversion rates and growth within the existing client base. He stressed that the observation was not long-term financial guidance and remained subject to execution risk.

During the quarter, Paymentus signed what Sharma called a sizable interchange monetization agreement that will use its Instant Payment Network capabilities. The company did not provide financial details or a timeline for the agreement’s impact, saying it was too early to discuss the nature and magnitude of the opportunity.

Management described interchange monetization as a potential way to turn a major cost center into a profit opportunity. Sharma said Paymentus could seek compensation from card issuers if it can promote their cards through its network in a way that benefits issuers, billers and end customers.

Paymentus also said its BillWallet user base doubled to more than 200,000 users. Sharma said BillWallet has been made available to only a small portion of the company’s user base and already has users in nearly one-third of active U.S. ZIP codes. He said almost one in three U.S. households and businesses currently uses Paymentus’ platform to pay bills, though not all end users of the company’s clients are yet using its services.

Agentic commerce strategy

Management emphasized BillWallet and Billeo as components of its strategy for agentic commerce, or AI-enabled customer interactions. Sharma said BillWallet is designed to preserve the relationship between billers and customers by retaining service-provider identity, customer identity and payment credentials in a secure environment.

He said Paymentus plans to offer its own agentic experience through Billeo while also supporting customer choice, including potential access to BillWallet through personal AI agents. Sharma said the company does not view the opportunity as an either-or choice between its own tools and third-party assistants.

“Paymentus is not taking a passive approach to this,” Sharma said, arguing that the company’s role is to help billers reduce the risk of disintermediation as agentic systems become more widely used.

The company also said it added clients across utilities, insurance, government, property management, telecommunications, banking and education, while onboarding customers in utilities, insurance, government, property management, telecommunications, banking and healthcare. Sharma said Paymentus also signed channel partners in utilities and mortgage during the quarter.

About Paymentus (NYSE:PAY)

Paymentus Holdings, Inc is a technology company that provides cloud-based bill payment and electronic billing solutions. Its platform enables organizations to present bills, collect payments and communicate with customers through digital channels, including web and mobile applications, text messaging, interactive voice response, payment kiosks and customer service representatives.

The company primarily serves billers in industries such as utilities, financial services, government, telecommunications, insurance and other recurring-payment sectors.

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