Good day, and welcome to Paymentus' First Quarter 2022 Earnings Call. This call is being recorded. [Operator Instructions] At this time, I would like to hand the call over to Paul Seamon, VP of Finance and Strategy, for some introductory comments. Please go ahead.

Thank you. Good afternoon, and welcome to Paymentus' First Quarter 2022 Earnings Call. Joining me on the call today are Dushyant Sharma, our Founder and CEO; and Matt Parson, our CFO. Following our prepared remarks, we'll take questions. Our press release was issued after close of market today and is posted on our website where this call is being simultaneously webcast. The webcast replay of this call and the supplemental slides accompanying this presentation will be available on our company's website under the Investor Relations link at ir.paymentus.com. Statements made on this call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements use words such as will, believe, expect, anticipate and similar phrases that denote future expectations or intent regarding our financial results and guidance, market opportunity, business strategies, impact from acquisitions and other matters. These forward-looking statements speak as of today, and we undertake no obligation to update them. These statements are subject to risks, uncertainties and assumptions that may cause actual results to differ materially from those set forth in such statements, including the risks and uncertainties set forth under the caption Special Note Regarding Forward-looking Statements, and risk factors in our annual report on Form 10-K for the year ended December 31, 2021, which we filed with the SEC on March 30, 2022; our quarterly report on Form 10-Q for the quarter ended March 31, 2022, which we expect to file with the SEC in early May 2022; and elsewhere with our other filings with the SEC. I encourage you to review these detailed safe harbor and risk factor disclosures. In addition, during today's call, we will discuss certain non-GAAP financial measures. Specifically, contribution profit, adjusted gross profit, adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures. These non-GAAP financial measures, which we believe are useful in measuring our performance and liquidity, should be considered in addition to, not as a substitute for or in isolation from, GAAP results. We encourage you to review additional disclosures regarding these non-GAAP measures, including reconciliations with the most directly comparable GAAP measures in our earnings press release issued today and the supplemental slides for the webcast, each available on the Investor Relations pages of our website and our filings with the SEC. With that, I'd like to turn the call over to Dushyant Sharma, our Founder and CEO.

Thanks, Paul. We started 2022 with a very strong quarter across all KPIs and saw little to no impact from the geopolitical and economic events that occurred, including the events in Ukraine and inflation. We believe we have a clear view of the business and are optimistic about the outlook for the remainder of 2022 as well as the foundation it sets for 2023. We believe one great aspect of our business is that it is extremely resilient because consumers and businesses have to pay their bills, essential bills, regardless of world events or whether the economy enters a recession or not that. On a quick personal note, this is our fourth quarterly update since the IPO as we approach our first anniversary. I'm having a lot of fun building the business, so is my team. I know based on where the markets have been, one would think that we could be distracted, but we are not. We are laser focused on executing our business strategies as we seek to build a long-term successful and high-growth business. We all understand and remain focused on the effect of long-term compounding growth. As a new public company and where I sit today, despite our scale, I view us as a startup public company and believe we are just getting started. I welcome each and every one of you on our journey and to share in our long-term success. Let me now discuss our financial performance, which demonstrates that we are executing and performing well. In the first quarter, contribution profit grew 35%, driven by a 40.9% increase in transactions. From the sales booking perspective, we signed over 60 clients in the quarter, which is about 50% more than the same period last year. These sales numbers are inclusive of direct partner and JPMorgan migrations, which require some sales support to complete. Relative to the comparable quarter of 2021, our sales were more diverse with less than 40% from the utilities vertical. The largest areas of increase were city services, insurance and mortgage payments. But we also signed clients as unique as a leading home design company. We crossed an annual run rate of $100 billion in payments volume during the quarter. We believe very few companies in the U.S. are processing at this scale, which is nearly $0.25 billion per day on an average. As we have said before, scale creates opportunities to strengthen our network and process relationships because of the unique value we bring in underpenetrated segments for digital payments. We continue to work to establish additional relationships in our newer segments. In past quarters, we have talked about the expansion of our telecom partnerships. This quarter, we have signed the health care division of one of the top five U.S. banks to expand our footprint in the industry. We expect the partnership to provide us with expanded access to practice management systems. Adding partners in areas such as health care, telecom and other underpenetrated verticals help our sales efforts and complements our direct selling process. Illustrative for our ability to increase our share of the total addressable market, in the quarter, we went live with one of the largest owners of apartments in the country. Real estate is outside of the core six verticals that we talk about but represents a significant opportunity on its own. As you can imagine, the rent payments fall in our sweet spot of both nondiscretionary and pre-occurring. We believe this implementation shows the flexibility and the breadth of our platform, which powers industries as diverse as real estate, B2B logistics and home security providers, not to mention our existing core verticals. We are making progress migrating the JPMorgan Chase client base. We completed our first implementations in the quarter, and many more are in flight and scheduled to go live throughout the year. While this added revenue isn't material, we expect it to build over time. In addition, the new deal sales channel from JPMorgan Chase continues to build, and the relationship continues to be more and more beneficial for both parties. A quick note on our IPN ecosystem. We continue to expand the network and add more and more endpoints, including the BFI. As a reminder, IPN is symbiotic with Biller Direct. IPN helps us win more Biller Direct deals. And Biller Direct wins help us add more IPN and partners and volume. I'll now turn the call over to Matt to discuss our financial results in more detail.

Thanks, Dushyant. As a reminder, today's discussion includes non-GAAP financial measures. Please refer to the tables in our press release and supplemental slides for a reconciliation of non-GAAP items to the most directly comparable GAAP financial measure. In the first quarter, we processed 87.9 million transactions, which equates to a year-over-year increase of 40.9%. Transaction volume continues to be driven by strong execution as well as additional IPN transactions, in particular, the Payveris Bank transaction as well as business-to-business transactions. This transaction growth drove a revenue increase of 26.5% over Q1 of 2021, which resulted in revenue of $116.7 million in the quarter. Q1 contribution profit was $47.4 million, representing a 35% increase over the same period last year. Consistent with the last several quarters, contribution profit grew faster than revenue, primarily due to an increased mix of transactions without interchange, specifically IPN transactions, cash-based payout transactions and certain B2B transactions. Contribution profit per transaction was in line with Q4 of 2021 at $0.54, which was consistent with our expectations and previous communications. Contribution profit for the quarter was ahead of expectations due to certain customers going live earlier in the quarter than was anticipated as well as some favorable mix of payment types. While these items provided a tailwind in Q1, we do not anticipate that tailwind to carry forward in the subsequent quarters. Adjusted EBITDA was $5.4 million for the first quarter, which represents an 11.3% adjusted EBITDA margin. This was slightly above our internal expectations for the quarter. We only provide guidance for the full year, but we never expected the adjusted EBITDA to be spread evenly throughout the year as we ramped up hiring to end 2021 and had additional fees for completing 2021 audit. We expected Q1 adjusted EBITDA to be the low point for the year for these and other reasons, and we are on track to slightly ahead of what we expected. Operating expenses rose $13.5 million to $36.2 million for Q1 of 2022 for the same period -- from the same period last year. Overall, the increase in operating expenses from last year was driven by investments in staff as well as additional operating expenses associated with Payveris and Finovera, the amortization of identified intangible assets from the acquisitions and stock based compensation. Specifically, R&D expense increased $2.7 million or 34.4% from the first quarter in 2021 as we continue to innovate with and for our customers and partners. Sales and marketing expense increased $8 million driven by the Payveris acquisition, continued expansion of the sales team, adding partnerships to capture our sizable market opportunity and an increase in stock-based compensation. Also, travel and marketing events continue to ramp up relative to Q1 2021, particularly with the impact of COVID fading. We experienced an increase in G&A expense of 43% -- 43.1% or $2.9 million due to our acquisitions, multifold increases in the cost of corporate insurance and ongoing investment in public company infrastructure. Our GAAP net income was $1.7 million, and EPS for Q1 was $0.01. Non-GAAP net income was $3.7 million, and non-GAAP EPS was $0.03 for the quarter. We had a large tax benefit in Q1, driven by our small loss on pretax income as well as a discrete benefit of $2.6 million that we recorded related to excess tax benefits on stock-based compensation. As of March 31, 2022, we had $163.4 million of cash and cash equivalents on our balance sheet. Cash decreased primarily due to the timing of certain customer payments as well as increased operating expenses due to the acquisitions. At quarter end, we had approximately 121 million shares of common stock outstanding. Now turning to our 2022 full year outlook. We're increasing our 2022 revenue outlook to a range of $492 million to $497 million, which represents growth between 24.5% and 26% year-over-year. We are increasing our contribution profit guidance to be between $206 million and $208 million for the year, which is approximately 30% to 31% growth. Our adjusted EBITDA outlook is in the range of $30 million to $33 million with an adjusted EBITDA margin of 14.5% to 16%. As we've indicated previously, we do not believe the current inflationary environment will have a negative impact on our top line. Our current guidance reflects some assumptions around continued inflation and potential for increasing wage pressure. However, if inflation continues at higher levels than we have assumed, it could have a higher impact on our margins going forward. As you can see from the updated guidance, the high end of our contribution profit guidance implies growth in the same range as 2021. We believe this level will give us a top decile performance for technology companies based on Rule of 50 for the past couple of years. We are not slowing down and remain excited about how the business is performing. Finally, as we said last quarter, we anticipate our full year effective tax rate to be around 30%. However, due to the amortization of intangibles associated with the acquisition, the closer we are to breakeven on pretax book income, the more variation we could see on our tax rate. I'll now turn the call back over to Dushyant for some closing comments.

Thanks, Matt. To close, I would like to provide a brief reminder of what we believe makes us different and positions us to win a significant share of the massive payment plan. Our platform was designed to be flexible and meet the billing and payment needs of virtually any industry. This creates a massive addressable market that's both reoccurring and nondiscretionary in the U.S. and beyond. IT estimates based at nearly 16 billion bill payments -- bill payment transactions annually in the U.S. alone, and we believe we have the ability to address the sizable portion of them. With our acquisition of Payveris, we also opened up access to bank-based payments and we believe IPN extends our reach to virtually any channel a consumer wants to pay through. Our platform is known for B2C but also runs large-scale B2B invoicing and payments clients. B2B is outside of the 16 billion number I just mentioned. The platform is known for paying meaningful payments, but can also provide payouts for insurance companies and other industries that need disbursement capabilities. Payout is also incremental to the 16 billion payment number I talked about. This is why we continue to be extremely bullish on the business, and you see us continue to invest in long-term growth rather than dropping incremental dollars to the bottom line. I'd like to thank our 1,000-plus employees for their hard work and dedication that makes all this possible. With that, I'll now turn the call over to the operator for questions.

[Operator Instructions] Our first question is from Will Nance from Goldman Sachs.

I wanted to follow up on the full year guidance. I think last quarter, you guys signaled that in the back half of the year, you guys could dip below that 30%. And I think it was a combination of tough comps in the prior year and some conservatism around the pace of onboarding. It sounds like you were a little bit more successful in bringing new clients on board this quarter. I'm wondering, as we've gotten, three months later, have you gotten any incremental line of sight onto the pace of onboarding? And is that still your expectation in the back half of the year? And what would it pay -- what would need to happen for that not to occur?

Yes. Thanks, Will. This is Matt. Great question. It's early in the year. I would say we still have -- nothing fundamental has changed in kind of our view with respect to our guidance and modeling and forecast for the year. We did have a very good result in Q1 and being able to get things live sooner than we had anticipated modeled. And we're going to continue to work for that as we go through the rest of the year. It's something we've always done and we'll continue to do. It's a definite focus of Dushyant, I and the rest of the team. But it's early in the year, and I think we're kind of maintaining our view on the rest of the year at this point in time, and we'll continue to work on as we go through the year.

Got it. That's helpful. And then maybe one for Dushyant. I'd like to hear about the referral agreement with the health care vertical of a large bank. If we take a step back, you guys have done a lot of expansion in your go-to-market channel since the IPO. And I guess when you put together the JPMorgan relationship, Payveris, the new health care deal, I mean how are you thinking about the tailwinds that this could drive to the top line? And I guess, even a higher level, would you consider these partnerships as being potentially additive to that 30% growth rate that you've talked about in the past.

Well, good question, though. Thank you. I was going to say -- I was smiling because of the last part of your question. The -- look, we are very proud of what we have been able to accomplish here. Everything we set out to do as a business, we said we're going to build a platform, which allows us to scale horizontally to any vertical industry and vertically to any size of the customer, and we have done that. And as a result of the modern page biller direct platform we stated, which not only brings billing companies live in the ecosystem, which is the direct ecosystem, but also through the IPN ecosystem we have created allows them to go to the -- any end point, it is allowing us to bring customers on our platform at a faster clip than we had done before. And in addition to that, we are also seeing tremendous excitement in the partnership ecosystem we have. You named some of the partners, and there are many other partners in the mix as well. So we are seeing tremendous progress there. And this clearly helps us continue to grow and maintain the momentum. And we're not raising our guidance. Our guidance is what it is, but not a day goes by when we are not looking at how can we accelerate that even more than what we are already forecasting. So not only the guidance, but at least from an overall perspective, feel good about where our business is headed.

Thank you, Will. Our next question goes to Andrew Bauch with SMBC Security. Andrew, your line is open. Please go ahead.

Thanks for taking my question and nice set of results here. I guess first off, Matt, I wonder if you could clarify some of your comments around the first quarter tailwinds around favorable mix and the pace of onboarding. I guess can you give us a better sense of what exactly those payment mix types like what drove that benefit and why that wouldn't carry forward in subsequent quarters? And is the onboarding dynamic, really just kind of the timing element? Or -- because I would assume that if you're accelerating the rate of these onboards, that those tailwinds should continue.

Yes. Thanks, Andrew. Appreciate the question. So on the implementation onboarding, when we lay out our model for the year, we assume based on all the information that we have from our own team, from the client, a certain go-live date for a particular client. And let's say, for some of the acceleration we saw in Q1, they were clients that we had slated to go live, say, at the end of Q1, but they went live in the middle of Q1. So that means that we got an extra month and half of revenue off of them. But when it comes to Q2, we kind of had that revenue in Q2 all along because they were going to go live in our plan at the end of Q1 anyway. So there's no incremental benefit to Q2 from that client going live earlier in Q1. And that's what I was sort of referencing with Will's question is, at this point in time early in the year, we don't want to make assumptions that we'll be able to be successful with additional clients doing the implementation pipeline being able to do that same thing because every client is different. All the facts and circumstances are different. So it's great for Q1 that we were able to do that. We continue to work on doing that every day going forward, and our team is very focused on it. But it's hard to make an assumption that, that can continue through depending on different factors at intense different clients. Then on the mix side, really what I was referring to there is we saw some movement, say, from credit, higher cost, type of payment to more cash base, lower cost type of payment in Q1. So we got the benefit of additional contribution profit from that. The main reason we said we're not anticipating that to continue is because Q1 is a little bit of a different animal as we talked about before than the other quarters start the year in that. It's kind of a high point of the year and what we see for our average payment amount, i.e., the bill payment amounts that are getting paid on our platform largely due to utility payments being higher in Q1 because of the cold winter months. And so this year, that was maybe even feel a little bit more with some of the macro things we're seeing around energy costs. And so I think people put a little bit of speculation on my part that people may have paid more with different types of payment methods because the bills were higher. They may have split their bills and paid some with cash, some with credit, et cetera. So again, we're not making assumptions that, that's going to continue because Q1 has a little bit different profile with respect to the amount of payments we see and the behavior we see out of consumers just because those payment amounts are higher.

And I think if I may add a little bit to that. The quarterly dynamic Matt described so well is exactly why sometimes could be misunderstood that when we're guiding to the year, sometimes quarters things to vary quarter-to-quarter, but the guidance for the year is what we're focused on as a whole

Got it. Very helpful. And then a follow-up for Dushyant. I mean, if we're heading into an economic slowdown and potentially a prolonged recession, I mean, is this changing any of your conversations with billers that are looking for solutions to be able to better capture rate of payment and the like?

Yes, great question. I can take you back to the last time you call a recessionary environment where it was like 2010, '11, '12 and so on. We want to transpire into accelerating growth for us in some ways because the business itself, as I talked about at the top of the call, that there's a resilient factor in here where I still have to pay my bill as a consumer, including the businesses that you have to keep your lights on. You have to pay your insurance, you have to pay your mortgage and so on. And -- but during these type of times, there is an increased focus on improving the efficiencies while also trying to improve the customer experience so that it's easier to collect money from the customers. And that actually shines even a stronger light or a brighter light on our platform and our capabilities. And as a result, we start to get even more inbound inquiries than we would typically get. And I'm not saying that the recession is actually beneficial to -- somehow there's a benefit to us. But what I'm saying is that the way we have designed our business and the way we approach the market, we -- if there is a recession, because of the pricing model that we have created, it actually helps our case even stronger in many cases. I hope that answers the question.

No, it does. And that collection rate definitely comes into greater focus for billers, so thank you for the color.

Thanks, Andrew.

Thank you, Andrew. Our next question is to Ashwin Shirvaikar with Citi. Ashwin go ahead.

Thank you. Hey good quarter, guys, I was hoping you could perhaps address sort of what we should expect with regards to cadence through the year. You're obviously raising expectations. Is it a time line one should expect in terms of just the quarterly layout? And then let me ask the second question as well. The expansion opportunities that you talked about, for example, entertainment opportunity and so on and so forth, is there -- I mean, could you perhaps set aside that and how that sort of flows through your system? That be helpful.

Okay. Thanks, Ashwin. On the first one, I assume what you mean is does it change anything? Just to clarify for me, on the quarterly cadence, does it change -- is the fact that we had the kind of exceeded expectations in Q1 and raised our guidance, does it change kind of our thinking for the rest of the year and how the quarters play out? Is that what the question was?

Yes, that was the question.

Okay. Got it. No, not really. I mean, as I said, I think, the reason we had a -- well, there were a lot of reasons we had a strong in Q1. I would say the reason that we had a stronger-than-expected Q1 was the timing of certain implementations happening a bit faster, sooner than we expected as well as some of the mix shift. It's early in the year. We don't -- because of the factors I mentioned, I think, in response to Andrew's question, we're not comfortable sort of carrying that through to the rest of the year at this point. So I think the kind of underlying fundamentals for the year are consistent with what we expected and talked about going into Q4. We've got -- Dushyant sort of alluded to a second ago, we only provide guidance on an annual basis. The reason we do that is because there is quarter-to-quarter variability in our business. When we get into the back half of the year, we've got some of the tough comparisons with some of the acquisition stuff in Q3 and Q4. But fundamentally, we feel, I believe that we're a 30% grower. And obviously, our guidance reflects that. And I think nothing is going to change that going into 2023. So yes, I think that was kind of covering the first one. The second one, could you just repeat the second question? I'm sorry.

Yes. I was just going to obviously is kind of similar to a previous question, but I wanted -- I was wondering if you could actually size some of these opportunities that you've talked about, like, for example, when you start rolling in rent payments, right? Does that add to the overall pie? Or was that already included in the overall pie?

I think a great question, Ashwin. I mean this is one of the key advantages of the platform. The way we have considered it, the way we have built it is that we are able to add. So the bill payment market, which is just B2C payment receivable -- receivable market itself is that the -- as we talked about it, it is in trillions of dollars of household expense, which goes through just for bill payments. B2B capabilities, which we talk about, is completely outside of that and is significantly larger in many ways just because of the total amount, the dollar amounts are included in B2B invoicing process. And payout is a pretty significant opportunity as well. So they're both outside of what we are -- what we are pursuing here. So what we talked about in the 16 billion bill payments, so we feel like that this is -- all of these things we have done, the hard work, the rails, the platform, the capabilities we have built, the workforce we have created, it's all setting a great foundation for us to continue to grow in the outer years.

And the thing I would add to that -- and totally agree with all the thing. The thing I would add to that is we've kind of been thinking about it in a little bit of a two-pronged way in the sense of -- we talk about kind of being a 30% grower, we obviously were thinking about the bill direct business and the platform that we have and our six verticals, but also all verticals, right? We're obviously taking into account kind of all the different capabilities that can be on it. But what I meant when I said a two-pronged approach is the more we can expand that pie and have more opportunities at different types of clients, that also applies to the bank network with Finovera, it also applies to some of the IPN stuff, the more kind of certainty you can put around that 30% number because it just gives us more opportunities from which to draw from. And then if many of them hits, then I think it becomes incremental and kind of on top of that 30% number. So it's kind of like we've got a wide net of things that we can draw from to get there. And then if we're successful in many of those different things, then it starts to go up from there, if that makes sense.

And positive optionality. Yes.

You said that much more succinctly than I did.

Thank you. Ashwin our next question goes to John Davis with Raymond James. John, your line is open. Please go ahead.

Good afternoon guys. Matt, I heard you say a couple of times you expect to continue this 30-plus percent contribution profit growth into '23. But our biomass, I would assume a little bit of an organic acceleration given the modest impact from the acquisitions that you've done. So just wanted to just confirm that and just kind of understand what the drivers are to that accelerate growth for 2023?

Yes. Thanks, John. Well, 2022 is not done yet in the sense of like Dushyant said earlier, our guidance is our guidance, but we're certainly working every day to try to continue to drive more in 2022. I mean that's what we're here for and that's what we're paid for is to continue try guiding for the year. But with your point, based on our current guidance, I definitely understand your point. And I think it's a result of all the things that were -- Dushyant talked about that we're working to put in place now. It's the additional partnerships. It's the expansion of the opportunities around -- outside of our core -- six core verticals in industries that we're now getting into like the rent payments opportunity. It's the B2B potential that we've started off in and continuing to drive additional clients there. So I think it's really just the bank opportunity with Payveris. We still are very excited about what that can bring and what inbound interest and conversations are happening on that front. So again, I didn't really answer the question the way I wrapped up with Ashwin's question, which is we've really widened the net out over the last 12 to 18 months. And so just having more opportunities at more different, whether it's verticals, partners, banks versus direct billers on and on, it just gives us more areas and more opportunities to drive additional business through.

Absolutely. And on top of that, we have a customer base. We have signed customers last several quarters, including this most recent one. 60 deals is 60 deals. It's -- and nothing to sneeze that. And so all of these contribute to where we could be next year. And so we're excited about the business. And like Matt said, the year is not done, but year is also not done from a perspective of adding lot to the mix to make sure 2023 is a great year.

Okay. No, that's super helpful. And then a lot of questions on inflation. I'm trying to understand because you guys are a relatively new public company. Matt or Dushyant, maybe just take a second to explain or expand upon how inflation actually runs through, minus had basically a take per bill, but some of your costs could be higher in an inflationary environment. Just really want to understand between that, you said that inflation credit-neutral to maybe just kind of give us kind or so on explaining exactly how inflation flows through the P&L?

Sure. So the way we've engineered our business and the way we engineer our agreements with the clients actually take care of this very issue and has done that for years now. One of the factors is that our clients -- actually, I don't want to get too technical because it is a very technical question because there are payment methods involved, different payment methods have different type of fee structures to them. Some of them are flat regardless of the form of payment. Our cost structure is, in some cases, regardless of the payment amount which has been charged due to inflation by the billing company, we still get our fair share or our margins don't get affected. But in some cases, there is a change where we are getting a flat fee, and while on the back, end of our cost is variable. And that's in a small percentage of those transactions. And there as well, we have ability to raise the pricing. And because it's very understandable by the clients themselves that if they are getting more benefit by -- through the inflation by charging higher for the bills, we want the very company which is making that all happen where they're able to collect the money, we want to be able to raise the rate as well, and we have those capabilities in the agreement already built in. So that doesn't -- it doesn't affect us as much as it will appear actually.

Thank you, John. Our next question is to Jeff Cantwell with Wells Fargo. Jeff, your line is open. Please go ahead.

Thank you for taking my questions and thanks for allowing me to joined these calls. One thing that stood out on the positive side here, and this is being highlighted on this call, is raising the guidance, especially given how many other companies have sounded about the quarter. And I guess, given that you have the real heart of the economy in many ways, many clients you have now, can you sort of give us your macro view as you see it? And what I'm really trying to get at is what made you confident here to release the guide? Is it the new way? Is it something about the operational momentum this quarter? I just want to see what you can point us to that will help us understand what you're thinking about as far as positives for the remainder of the year. Thanks.

Yes. Thanks, Jeff. This is Matt, and welcome to the fold. Glad to have you as part of the group here. Yes. So on the macro, I think Dushyant hit on a little bit earlier. Obviously, things have been a bit tough to start the year on multiple fronts in the macro, but because of the space that we're in and really focused on nondiscretionary essential recurring bill payments, it's a very resilient business. And we saw it kind of at the beginning of COVID when really the impact to our business at the beginning of COVID was a little bit of a slowdown in signing new business and getting customers live because everybody was focused on their own business. But we did not see any slowdown at all to the payments flowing to our platform because people still had to pay their bills. They need to keep the lights on. They need to keep their insurance and mortgages, et cetera. And so it is a very resilient model, and I think that's reflected in our results in Q1 and got us to the rest of the year that even though the macro may seem a little uncertain, one thing is constant, that people need to continue to pay their bills. I think as far as the raising the guidance for the year, it's reflected in that, that we have not seen any negative impact. We don't expect to see a negative impact from that. In addition to, again, just keep pointing back to all the things that we've added and continue to announce, our ability to execute internally on getting clients live and implemented. And that's actually, again, back to the one of the earlier questions kind of related on our ability to continue that through the rest of the year or not, what we saw in Q1 and being able to do it faster, there's a huge reliance there on the client. We can't do it alone. We have to partner with them. It has to be within the bounds of kind of their internal priorities and projects, and they've all got a million things going on. And so if it was completely within our control, I'd be like full speed ahead. We're going to get them all live tomorrow and figure out how many people we need to hire to do that. But we also have to work within the bounds of our clients. And so it's definitely a partnership aspect of it. But we -- everything that we kind of see from behavior of people paying their bills, from the things we put in place, we feel good about the rest of the year.

And if I may add to this, to your broader economic question and speaking to the investor bank broadly. If, for example, we were a private company today and you were investors in our company and you have 40 other companies in the portfolio, you will look at Paymentus and think about, what, this is a company which is in recurring billing -- biller display build, you have to pay these are essential bills. And during turbulent times like these, businesses have even a stronger need to collect money and collect the money efficiently and also improve experience for the customers. Both of those things, whatever platform is designed to provide, it actually allows you to sleep a little bit better. And during -- we have gone through a couple of the things. And during COVID, we continue to grow as a business. We have the same thing to the financial crisis. So what I'm trying to really say is that if you take the public market side of things aside, there's a little bit of uncertainty we have all experienced, the business inside, internally, the business is doing really well.

Thank you, Jeff. Our next question is the Tianjin Huang with JPMorgan. Your line is open. Please go ahead. Tien-Tsin Huang: Thank you so much. I'm going to build on I think John's question and ask you from a biller perspective, just with inflation and whatnot. Are you seeing billers want to promote AutoPay as a reason to accelerate or raise a sense of urgency to want to work with you? I'm just trying to understand the biller side of how they're viewing the uncertainty that people have been asking about. It feels like it could be a big help.

Yes. I think -- so if you look at it from the -- in situations like these, and frankly, COVID, itself is pretty decent memory. So the billing companies are faced with situations like how do we make it easier for customers to collect as well as make it -- make sure that they have ability to pay in multiple times in case they have to. The AutoPay itself, if you can believe it, is for customers who they are least concerned about from the collectibility standpoint. It is the customers who are not on AutoPay, whether they will say, how do I reach to the customers at a faster pace than -- or broadly? And could I do it in a way that it doesn't cost me a lot more money than it would have otherwise? So everything that our platform is designed for, so for example, if you were to brands coming to you in a market like this, my pitch would be, but take a look at our platform, it is designed for you to not have to change anything on your end. We will do all the work because we have this advanced integration framework in place, and we have hundreds of billing systems we already integrated with and we can integrate with you. While doing the integration, we can reach all of the customers who otherwise not being able to reach out to just because of the modern paradigm shifting ecosystem we have built. So all of that resonates extremely well to the customer and a billing company. And therefore, with multiple payment options, options wherever the customers are and including -- giving them ability to pay, including at the last minute, makes it that easy for the customer to pay. And that's why there is a gravitation towards us in terms this. Tien-Tsin Huang: Makes sense. Then just my quick follow-up, if you don't mind. Just the reinvestments makes sense. And I know there's a lot of investing in establishing partners and verticals. What about just on the product side in general? Are you -- have you changed your focus on product development given what's happening in the world? Just curious what's new from a product perspective, maybe that you were thinking about six months ago.

We continue to make investments in the product. We have -- in some ways, we have set the tone for the industry as to how we -- how customer experience should take place and how a platform should really operate and what type of capabilities which should provide to the billing companies, both from a -- for their own teams perspective, the staff of the billing company, but also the customers of the billing company. When you look at it from that perspective, it's a never-ending pursuit. We exist for two specific goals. How do we improve the customer experience? And how do we do it while lowering the cost to collect or cost to serve the customers from a billing company standpoint? And that -- so all the advancements -- all the investments we make are in that area. The other area we are actually heavily focused on is how do we improve the velocity of onboarding. I'll give you an example. We have almost, to Matt's point earlier, if we could actually onboard clients and it was entirely in our control, we could onboard them tomorrow. Like 70%, 80% of our clients, maybe even more, could be onboarded without making a single change anywhere in our system. However, it takes time for the clients to get comfortable and go through the process. What we are making investments in is for the remaining 10%, 20% as well to make sure that these complex enterprise-sized deployments are also able to get done without making too many changes as about close -- the complex sophisticated workflows could be implemented to our platform without coding. So we're making some changes there as well. So you will see more and more but you'll hear more and more about that as we go forward.

Thank you Tien-Tsin. Our final question is from Dave Koning with Baird. Dave, your line is open. Please proceed.

Yes, hi guys, thanks so much in. I just wanted to review contribution profit per transaction. And I think you've talked before about as you've gotten bigger clients that's naturally gone down a little. It actually went down the last -- this quarter been in a long time. And I guess I'm wondering, a, is the mix -- is the mix of business that comes down coming out at a different trend like at different levels, like different verticals create kind of different yields? And then over time, are we at a point where this starts to stabilize?

Yes. Thanks, Dave. I appreciate the question. It's Matt. Yes, I think yes to both questions. We -- it's a Q4 -- and I can't remember if we said it in the call or maybe it was in some of the Q&A afterwards, but I said, we saw a pretty good step down in the Q4. And there's a lot of questions, I said we expect it to stabilize for 2022 and be pretty consistent with where we saw Q4. And there are a couple of reasons for that conclusion, and we're seeing them play out. One was, if you recall, the reason for the step-down or a reason for the step down in Q4 was a couple of large clients going live at the end of Q3, early Q4 that had a little bit different profile. One was more B2B, one move included from payouts, which were all cash based. And so they had a different pricing profile than a typical biller direct clients have. We felt very good because they were very large clients and lots of transactions. And so we felt good in the overall economic profile of the client, but it caused the step down, and we didn't see anything in our implementation pipeline that looked or felt like those two did, and so we expect it to stabilize. But then also, there is a kind of a terminal point you get to once you -- again, if you think about the progression of our growth organization. We kind of purposely started in Horizon 1 with small and medium-sized clients. And when we moved up to large size in Horizon 2 and the network effect in Horizon 3. There's a period of time where every new large client you add is pulling down the average just simply because of the nature of size in internal portfolio. We're kind of reaching that point now where addition of a new larger client doesn't really have that big an impact on the average. It's going to have some. And -- but the rate at which it's going down certainly will slow dramatically. And then the other factor is some of the IPN transactions that we've talked about that are -- don't have an interchange associated with them. They are priced in a level that's fairly consistent with sort of what our current contribution profit per transaction level is. So they're not going to be detracting to that overall point. So that's kind of what's behind the teams driving it. But we still -- the comments I made, I think, in Q4 are still the same. Nothing's changed to change our thinking there, which is the remainder of 2022, we expect to be pretty consistent with Q4 and Q1 and kind of where we are right now.

Got you. And maybe just a quick follow-up. Sales and marketing in the last few quarters has turned up a lot, and it's been correspond with really, really good revenue growth. So I get it, but is there a point where it starts to get levered a little bit going forward?

Absolutely. And we're -- I don't want to say we're at that point because we continue to invest in the business. What I will say is between taking on some of the sales and marketing costs of Payveris in particular as well as we kind of purposely put some investment at the end of 2021in the sales and marketing, and you're seeing kind of the first full quarter of that in Q1. We -- it was higher than what I would say our ongoing level of investment is going to be. That was kind of a purposeful push of spend there. So I expect from this point forward, you will definitely start to see it moderate out and get more leverage over kind of what we saw the last couple of quarters.

Thank you, Dave. There are no further questions registered at this time so this concludes the Paymentus Q1 2022 Earnings Call. Thank you for your participation. You can now disconnect your lines.