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Paymentus Reports Second Quarter 2021 Financial Results

08/10/2021

Revenue Increased 30% Year-over-Year

Contribution Profit Increased 25% Year-over-Year

Transactions Increased 39% Year-over-Year

Signed Definitive Agreement to Acquire Payveris

REDMOND, Wash.--(BUSINESS WIRE)-- Paymentus Holdings, Inc. (“Paymentus”) (NYSE: PAY), a leading provider of cloud-based bill payment technology solutions, today announced financial results for its second quarter ended June 30, 2021.

"I'm very pleased with our first quarter as a public company. We had strong Q2 results and we've made solid progress on the execution of our multi-pronged strategy during the 2nd quarter," said Dushyant Sharma, CEO and Founder. "In addition, we believe our acquisition of Payveris enables us to accelerate our Instant Payments Network by expanding our payments platform reach to hundreds of banks and credit unions.”

Business Highlights and Recent Developments

  • Processed 64.2 million transactions, an increase of 39% from the second quarter of 2020.
  • Signed a definitive agreement to acquire Payveris, a leading payments processing company for financial institutions.
  • Signed a definitive agreement to acquire Finovera, a leading bill aggregation technology provider for financial institutions.

"As a result of our continued execution, we saw almost 40% growth in the number of transactions processed by our platform in the second quarter bringing the annualized run rate of transactions to more than 250 million," said Matt Parson, Paymentus CFO. "Consequently both revenue and contribution profit also experienced strong growth in the quarter."

Second Quarter 2021 Financial Highlights

  • Total revenue was $93.5 million, an increase of 30.3% from the second quarter of 2020.
  • Gross profit was $28.9 million compared to $23.4 million for the second quarter of 2020. Adjusted gross profit was $30.1 million compared to $24.3 million for the second quarter of 2020.
  • Contribution profit was $37.4 million, compared to $30.0 million for the second quarter of 2020, representing an increase of 24.8%
  • Adjusted EBITDA was $8.3 million, representing a 22.2% margin compared to $8.8 million, or a 29.3% margin, for the second quarter of 2020.
  • Net income and EPS were $0.6 million and $0.0 per share. Non-GAAP net income and Non-GAAP EPS were $2.6 million and $0.02 per share.
  • Effective tax rate was 86% due to one-time discrete tax items. When one-time items are excluded the adjusted tax rate is approximately 30%.
  • Cash and cash equivalents were $266.4 million as of June 30, 2021

2021 Financial Outlook

Paymentus expects revenue for the full year 2021 to be between $378 million and $382 million or 25% to 27% growth. Contribution profit is anticipated to be between $152 million and $154 million or 26% and 28% growth. It expects adjusted EBITDA to be between $25 million and $28 million, which is a margin of 16.5% to 18.5%. The outlook is inclusive of the Payveris and Finovera acquisitions.

Conference Call Information

In conjunction with this announcement, Paymentus will host a conference call for investors at 2:00 p.m. PT (5:00 p.m. ET) today to discuss second quarter results, our outlook for the year and our pending acquisitions of Payveris and Finovera. The live webcast and replay will be available at the Investor Relations section of Paymentus’ website.

About Paymentus

Paymentus is a leading provider of cloud-based bill payment technology and solutions for more than 1,300 billers across North America. Our omni-channel platform provides consumers with easy-to-use, flexible and secure electronic bill payment experiences through their preferred payment channel and type. Paymentus’ proprietary Instant Payment NetworkTM, or IPN, extends our reach by connecting our IPN partners’ platforms and tens of thousands of billers to our integrated billing, payment, and reconciliation capabilities. Approximately 16 million consumers and businesses used the Paymentus platform to pay their bills and engage with our billers as of December 2020. For more information, please visit www.paymentus.com

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact included in this press release are forward-looking statements, including but not limited to statements regarding including but not limited to statements regarding our financial outlook for 2021, execution of business strategies, the impact of acquisitions and our ability to add more billers. Forward-looking statements include statements containing words such as “expect,” “anticipate,” “believe,” “project,” “will” and similar expressions intended to identify forward-looking statements. These forward-looking statements are based on our current expectations. Forward-looking statements involve risks and uncertainties. Our actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to our ability to effectively manage our growth and expand our operations, including into new channels and industry verticals across different markets; our ability to expand and retain our biller, partner and consumer base; the continued impact of the COVID-19 pandemic on our operating results, liquidity and financial condition and on our employees, billers, partners, consumers and other key stakeholders; our ability to remain competitive; our ability to develop new product features and enhance our platform and brand; our future acquisitions and strategic investments; our ability to hire and retain experienced and talented employees; and other risks and uncertainties included under the caption “Risk Factors” and elsewhere in our filings with the Securities and Exchange Commission, or SEC, including, without limitation, our final prospectus filed with the SEC under Rule 424(b)(4) on May 26, 2021 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, which we expect to file with the SEC on August 11, 2021. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and we undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof.

Use of Non-GAAP Measures

In addition to disclosing financial measures in accordance with accounting principles generally accepted in the United States, or GAAP, this press release and the accompanying tables contain certain non-GAAP financial measures, including contribution profit, adjusted gross profit, adjusted EBITDA, free cash flow and Non-GAAP net income and Non-GAAP EPS. We use non-GAAP measures to supplement financial information presented on a GAAP basis. We believe that excluding certain items from our GAAP results allows management and our board of directors to more fully understand our consolidated financial performance from period to period and helps management project our future consolidated financial performance as forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures.

Contribution profit is defined as gross profit plus other cost of revenue. Other cost of revenue equals cost of revenue less interchange and assessment fees paid by us to our payment processors.

Adjusted gross profit is defined as gross profit adjusted for non-cash items, primarily stock-based compensation and amortization.

Adjusted EBITDA is defined as net income before other income (expense) (which consists of interest income (expense), net and foreign exchange gain (loss)), amortization and depreciation and income taxes, adjusted to exclude the effects of stock-based compensation expense and certain nonrecurring expenses that management believes are not indicative of ongoing operations, consisting primarily of professional fees and other indirect charges associated with our initial public offering.

Free cash flow is defined as net cash provided by (used in) operating activities less capital expenditures and capitalized internal-use software development costs.

Non-GAAP net income and Non-GAAP EPS are defined as net income excluding certain nonrecurring items such as discrete tax items or potential acquisition related costs or other non-cash items.

We believe these non-GAAP measures provide our investors with useful information to help them evaluate our operating results by facilitating an enhanced understanding of our operating performance and enabling them to make more meaningful period-to-period comparisons. In particular, we exclude interchange and assessment fees in the presentation of contribution profit because we believe inclusion is less directly reflective of our operating performance as we do not control the payment channel used by consumers, which is the primary determinant of the amount of interchange and assessment fees. We use contribution profit to measure the amount available to fund our operations after interchange and assessment fees, which are directly linked to the number of transactions we process and thus our revenue and gross profit.

We use these non-GAAP measures in conjunction with GAAP measures as part of our overall assessment of our performance and liquidity, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance and liquidity. There are limitations to the use of the non-GAAP measures presented in this press release. Our non-GAAP measures may not be comparable to similarly titled measures of other companies; other companies, including companies in our industry, may calculate non-GAAP measures differently than we do, limiting the usefulness of those measures for comparative purposes. These non-GAAP measures should not be considered in isolation from or as a substitute for financial measures prepared in accordance with GAAP.

We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure, and to view our non-GAAP measures in conjunction with GAAP financial measures. For a reconciliation of these non-GAAP financial measures to GAAP measures, please see the tables for the reconciliation of GAAP to non-GAAP results included at the end of this release.

PAYMENTUS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except share and per share data)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

93,495

 

 

$

71,734

 

 

$

185,717

 

 

$

141,327

 

Cost of revenue

 

 

64,567

 

 

 

48,332

 

 

 

129,242

 

 

 

97,148

 

Gross profit

 

 

28,928

 

 

 

23,402

 

 

 

56,475

 

 

 

44,179

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

7,921

 

 

 

5,981

 

 

 

15,651

 

 

 

11,749

 

Sales and marketing

 

 

9,505

 

 

 

7,632

 

 

 

17,727

 

 

 

15,244

 

General and administrative

 

 

7,421

 

 

 

3,469

 

 

 

14,163

 

 

 

7,157

 

Total operating expenses

 

 

24,847

 

 

 

17,082

 

 

 

47,541

 

 

 

34,150

 

Income from operations

 

 

4,081

 

 

 

6,320

 

 

 

8,934

 

 

 

10,029

 

Other income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

Interest income (expense), net

 

 

(4

)

 

 

3

 

 

 

(7

)

 

 

45

 

Foreign exchange (loss) gain

 

 

(1

)

 

 

(24

)

 

 

8

 

 

 

(90

)

Income before income taxes

 

 

4,076

 

 

 

6,299

 

 

 

8,935

 

 

 

9,984

 

Provision for income taxes

 

 

(3,501

)

 

 

(1,614

)

 

 

(4,722

)

 

 

(2,520

)

Net income

 

$

575

 

 

$

4,685

 

 

$

4,213

 

 

$

7,464

 

Undeclared dividends on Series A preferred stock

 

 

(898

)

 

 

(1,273

)

 

 

(2,258

)

 

 

(2,515

)

Net income (loss) attributable to common stock

 

$

(323

)

 

$

3,412

 

 

$

1,955

 

 

$

4,949

 

Net income (loss) per share attributable to common stock

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 

 

$

0.03

 

 

$

0.02

 

 

$

0.05

 

Diluted

 

$

 

 

$

0.03

 

 

$

0.02

 

 

$

0.05

 

Weighted-average number of shares used to compute net income per share attributable to common stock

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

108,970,604

 

 

 

103,479,239

 

 

 

106,240,091

 

 

 

103,479,239

 

Diluted

 

 

108,970,604

 

 

 

106,151,678

 

 

 

112,244,054

 

 

 

106,135,251

 

PAYMENTUS HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands, except share and per share data)

 

June 30,

 

December 31,

 

 

2021

 

2020

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

266,390

 

 

$

46,666

 

Accounts and other receivables, net of allowance of $95 and $100

 

 

32,967

 

 

 

28,034

 

Income tax receivable

 

 

263

 

 

 

2,011

 

Prepaid expenses and other current assets

 

 

7,234

 

 

 

3,117

 

Total current assets

 

 

306,854

 

 

 

79,828

 

Property and equipment, net of accumulated depreciation and
amortization of $4,347 and $3760

 

 

2,056

 

 

 

1,772

 

Capitalized internal-use software development costs, net

 

 

25,366

 

 

 

20,963

 

Intangible assets, net

 

 

195

 

 

 

296

 

Goodwill

 

 

13,216

 

 

 

13,205

 

Operating lease right-of-use assets

 

 

9,506

 

 

 

8,322

 

Deferred tax asset

 

 

144

 

 

 

270

 

Other long-term assets

 

 

3,463

 

 

 

218

 

Total assets

 

$

360,800

 

 

$

124,874

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

21,705

 

 

$

16,825

 

Accrued liabilities

 

 

12,185

 

 

 

10,201

 

Operating lease liabilities

 

 

2,311

 

 

 

3,010

 

Contract liabilities

 

 

913

 

 

 

612

 

Income tax payable

 

 

-

 

 

 

463

 

Total current liabilities

 

 

37,114

 

 

 

31,111

 

Deferred tax liability

 

 

5,775

 

 

 

3,499

 

Operating leases, net of current portion

 

 

7,440

 

 

 

5,476

 

Finance leases and other finance obligations, net of current portion

 

 

279

 

 

 

412

 

Total liabilities

 

 

50,608

 

 

 

40,498

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Preferred stock, $0.0001 par value per share, 5,000,000 and zero shares authorized at June 30, 2021 and December 31, 2020, respectively, none issued and outstanding at June 30, 2021 and December 31, 2020

 

 

 

 

 

 

Class A common stock, $0.0001 par value per share, 883,950,000 and zero shares authorized as of June 30, 2021 and December 31, 2020, respectively; 13,880,950 and zero shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

 

 

1

 

 

 

 

Class B common stock, $0.0001 par value per share, 111,050,000 and zero shares authorized as of June 30, 2021 and December 31, 2020, respectively; 103,479,239 and zero shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

 

 

11

 

 

 

 

Series A preferred stock, par value $0.01 per share; zero and 50,000 shares authorized as of June 30, 2021 and December 31,2020, respectively; zero and 23,333 shares issued as of June 30, 2021 and December 31, 2020, respectively; zero and 23,013 shares outstanding as of June 30, 2021 and December 31, 2020, respectively

 

 

 

 

 

 

Common stock, $0.005 par value per share; zero and 150,000,000 shares authorized as of June 30, 2021 and December 31, 2020, respectively; zero and 104,785,651 shares issued as of June 30, 2021 and December 31, 2020, respectively; and zero and 103,479,239 shares outstanding as of June 30, 2021 and December 31, 2020, respectively

 

 

 

 

 

517

 

Treasury stock at cost, zero and 320 Series A preferred shares; and zero and 1,306,412 common shares as of June 30, 2021 and December 31, 2020, respectively

 

 

 

 

 

(579

)

Additional paid-in capital

 

 

285,164

 

 

 

29,175

 

Accumulated other comprehensive income

 

 

168

 

 

 

216

 

Retained earnings

 

 

24,848

 

 

 

55,047

 

Total stockholders’ equity

 

 

310,192

 

 

 

84,376

 

Total liabilities and stockholders' equity

 

$

360,800

 

 

$

124,874

 

PAYMENTUS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2021

 

2020

 

2021

 

2020

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

575

 

 

$

4,685

 

 

$

4,213

 

 

$

7,464

 

Adjustments to reconcile net income to net cash provided by operating
activities

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

2,548

 

 

 

1,995

 

 

 

4,940

 

 

 

4,015

 

Deferred income taxes

 

 

1,656

 

 

 

482

 

 

 

2,413

 

 

 

889

 

Stock-based compensation

 

 

568

 

 

 

462

 

 

 

1,131

 

 

 

937

 

Non-cash lease expense

 

 

857

 

 

 

658

 

 

 

1,648

 

 

 

1,285

 

Amortization of contract asset

 

 

177

 

 

 

 

 

 

177

 

 

 

 

Change in operating assets and liabilities, net of impact of business
combination

 

 

 

 

 

 

 

 

 

 

 

 

Accounts and other receivables

 

 

652

 

 

 

(1,182

)

 

 

(4,944

)

 

 

(4,269

)

Prepaid expenses and other current and long-term assets

 

 

(828

)

 

 

464

 

 

 

(905

)

 

 

7

 

Accounts payable

 

 

(1,229

)

 

 

2,490

 

 

 

3,541

 

 

 

5,151

 

Accrued liabilities

 

 

610

 

 

 

1,403

 

 

 

543

 

 

 

606

 

Operating lease liabilities

 

 

(848

)

 

 

(652

)

 

 

(1,573

)

 

 

(1,209

)

Contract liabilities

 

 

(582

)

 

 

(2

)

 

 

301

 

 

 

356

 

Income taxes receivable, net of payable

 

 

1,424

 

 

 

212

 

 

 

1,272

 

 

 

684

 

Net cash provided by operating activities

 

 

5,580

 

 

 

11,015

 

 

 

12,757

 

 

 

15,916

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(408

)

 

 

(145

)

 

 

(564

)

 

 

(309

)

Capitalized internal-use software development costs

 

 

(4,480

)

 

 

(3,731

)

 

 

(8,736

)

 

 

(7,185

)

Net cash used in investing activities

 

 

(4,888

)

 

 

(3,876

)

 

 

(9,300

)

 

 

(7,494

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from initial public offering, net of underwriter's discounts and commissions

 

 

224,595

 

 

 

 

 

 

224,595

 

 

 

 

Proceeds from private placement

 

 

50,000

 

 

 

 

 

 

50,000

 

 

 

 

Redemption of Series A preferred stock

 

 

(23,013

)

 

 

 

 

 

(23,013

)

 

 

 

Payment of dividends on Series A preferred stock

 

 

(34,412

)

 

 

 

 

 

(34,412

)

 

 

 

Proceeds from repayment of related party loan

 

 

 

 

 

 

 

 

813

 

 

 

 

Payments of deferred offering costs

 

 

(399

)

 

 

 

 

 

(856

)

 

 

 

Payments on other financing obligations

 

 

(384

)

 

 

(262

)

 

 

(767

)

 

 

(521

)

Payments on finance leases

 

 

(68

)

 

 

(111

)

 

 

(136

)

 

 

(169

)

Net cash used in financing activities

 

 

216,319

 

 

 

(373

)

 

 

216,224

 

 

 

(690

)

Foreign currency effect on cash and cash equivalents

 

 

10

 

 

 

24

 

 

 

43

 

 

 

(23

)

Net increase in cash and cash equivalents

 

 

217,021

 

 

 

6,790

 

 

 

219,724

 

 

 

7,709

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Beginning of period

 

 

49,369

 

 

 

28,346

 

 

 

46,666

 

 

 

27,427

 

End of period

 

$

266,390

 

 

$

35,136

 

 

$

266,390

 

 

$

35,136

 

The following schedules reflect our non-GAAP measures and reconciles our non-GAAP financial measures to the related GAAP financial measures (in thousands):

Contribution Profit

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2021

 

2020

 

2021

 

2020

 

(in thousands)

 

Gross profit

$

28,928

 

 

$

23,402

 

 

$

56,475

 

 

$

44,179

 

Plus: other cost of revenue

 

8,513

 

 

 

6,589

 

 

 

16,075

 

 

 

13,440

 

Contribution profit

$

37,441

 

 

$

29,991

 

 

$

72,550

 

 

$

57,619

 

Adjusted Gross Profit

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2021

 

2020

 

2021

 

2020

 

(in thousands)

 

Gross profit

$

28,928

 

 

$

23,402

 

 

$

56,475

 

 

$

44,179

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

Amortization

 

1,164

 

 

 

858

 

 

 

2,212

 

 

 

1,660

 

Adjusted gross profit

$

30,092

 

 

$

24,260

 

 

$

58,687

 

 

$

45,839

 

Adjusted EBITDA

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2021

 

2020

 

2021

 

2020

 

(in thousands)

 

Net income

$

575

 

 

$

4,685

 

 

$

4,213

 

 

$

7,464

 

Excluding

 

 

 

 

 

 

 

 

 

 

 

Interest (income) expense, net

 

4

 

 

 

(3

)

 

 

7

 

 

 

(45

)

Provision for income taxes

 

3,501

 

 

 

1,614

 

 

 

4,722

 

 

 

2,520

 

Depreciation and amortization

 

2,548

 

 

 

1,995

 

 

 

4,940

 

 

 

4,015

 

Foreign exchange (gain) loss

 

1

 

 

 

24

 

 

 

(8

)

 

 

90

 

Stock-based compensation

 

568

 

 

 

462

 

 

 

1,131

 

 

 

937

 

Other nonrecurring expenses

 

1,115

 

 

 

--

 

 

 

2,711

 

 

 

--

 

Adjusted EBITDA

$

8,312

 

 

$

8,777

 

 

$

17,716

 

 

$

14,981

 

Free Cash Flow

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2021

 

2020

 

2021

 

2020

 

(in thousands)

 

Net cash provided by operating activities

$

5,580

 

 

$

11,015

 

 

$

12,757

 

 

$

15,916

 

Purchases of property and equipment

 

(408

)

 

 

(145

)

 

 

(564

)

 

 

(309

)

Capitalized internal-use software development costs

 

(4,480

)

 

 

(3,731

)

 

 

(8,736

)

 

 

(7,185

)

Free cash flow

$

692

 

 

$

7,139

 

 

$

3,457

 

 

$

8,422

 

Net cash used in investing activities

$

(4,888

)

 

$

(3,876

)

 

$

(9,300

)

 

$

(7,494

)

Net cash provided by (used in) financing activities

$

216,319

 

 

$

(373

)

 

$

216,224

 

 

$

(690

)

Non-GAAP Net Income

 

Three Months Ended June 30,

Six Months Ended June 30,

 

2021

2020

2021

2020

 

(in thousands)

Net income

$

575

$

4,685

$

4,213

$

7,464

Excluding discrete one-time tax items

 

2,062

 

 

2,062

 

Adjusted net income

$

2,637

$

4,685

$

6,275

$

7,464

Non-GAAP EPS

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2021

 

2020

 

2021

 

2020

 

(in thousands)

 

Net income attributable to common shareholders

$

(323

)

 

$

3,412

 

 

$

1,955

 

 

$

4,949

 

Excluding undeclared dividends on Series A preferred stock

 

898

 

 

 

1,273

 

 

 

2,258

 

 

 

2,515

 

Excluding discrete one-time tax items

 

2,062

 

 

 

 

 

 

2,062

 

 

 

 

Numerator for Non-GAAP EPS - basic

$

2,637

 

 

$

4,685

 

 

$

6,275

 

 

$

7,464

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares of common stock - basic

 

108,970,604

 

 

 

103,479,239

 

 

 

106,240,091

 

 

 

103,479,239

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP EPS - basic

$

0.02

 

 

$

0.05

 

 

$

0.06

 

 

$

0.07

 

 

Investor Relations
Paul Seamon
pseamon@paymentus.com

Media Relations
Tony Labriola
tony@thinkinsideout.com
(978) 815-8640

Source: Paymentus Holdings, Inc.

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