Paymentus (NYSE:PAY) management highlighted record revenue, expanding profitability, and strong backlog as the company reported fourth-quarter and full-year 2025 results that exceeded its expectations and topped the high end of its guidance ranges across key metrics.
2025 milestones and strategy commentary
Founder and CEO Dushyant Sharma described 2025 as a “significant milestone year,” noting that the company surpassed $1 billion in annual revenue for the first time and finished the year at $1.2 billion. Sharma framed the growth in a multi-year context, saying Paymentus exited 2023 with just over $600 million of top-line revenue and had “a little over $300 million” in 2020, implying the business has quadrupled over the past five years and grown 25 times over 10 years.
Fourth-quarter results: revenue, transactions, and margins
CFO Sanjay Kalra reported fourth-quarter revenue of $330.5 million, up 28.1% year-over-year, calling it a record quarter. Contribution profit was $106.9 million, up 24%, while adjusted EBITDA reached a record $39.9 million, up 46.3% year-over-year. The adjusted EBITDA margin was 37.3% and the company’s Rule of 40 metric was 61 for the quarter.
Kalra said the stronger-than-anticipated revenue growth was driven by the first full-quarter benefit from large enterprise customers that launched in the prior quarter, along with increased same-store sales from existing billers. Paymentus processed 192.7 million transactions in the quarter, up 16.1% year-over-year. Average price per transaction increased to $1.72 from $1.55 a year earlier, which Kalra attributed mainly to biller mix—specifically large enterprise billers with higher average payment amounts.
Contribution profit per transaction was $0.55, up from $0.54 in the prior quarter and $0.52 in the prior-year period. Contribution margin was 32.3%, compared with 31.6% in the third quarter and 33.4% a year earlier. Kalra noted that as the company adds large clients and diversifies its client base, pricing and contribution profit can vary by quarter, and he reiterated that management considers total revenue and adjusted EBITDA as primary metrics.
Non-GAAP operating expenses were $52.7 million, up 11.4% year-over-year, driven primarily by higher sales and marketing as well as research and development expenses. Kalra said those increases reflected increased hiring and higher agency fees tied to business from resellers and partners. Using a non-GAAP tax rate of 25%, fourth-quarter non-GAAP net income was $25.4 million, or $0.20 per share, compared with $16.3 million, or $0.13 per share, in the prior-year period. Interest income was $2.5 million for the quarter, up from $2.0 million a year earlier due to higher average cash balances and cash management.
Full-year 2025 performance and cash generation
For the full year 2025, Paymentus reported revenue of $1.2 billion, up 37.3% year-over-year. Contribution profit was $386.3 million, up 23.8%, and adjusted EBITDA was $137.4 million, up 45.9%, representing a 35.6% margin. Non-GAAP operating expenses were $195.4 million, up 11.1%, again reflecting higher sales and marketing and R&D spending. Non-GAAP net income rose 51.2% to $84.9 million, while diluted EPS increased 50% to $0.66.
Kalra also emphasized liquidity and working capital improvements. Paymentus ended 2025 with $324.5 million in cash and no debt, compared with $291.5 million at the end of the third quarter. Fourth-quarter free cash flow was $35.7 million, and full-year free cash flow was $125 million, which Kalra said represented growth of more than 360% year-over-year. Days sales outstanding improved to 28 days at year-end from 31 days in the prior quarter and 43 days a year earlier, which management attributed to improved terms and mix shift toward large enterprise customers. Kalra said the company paid $14.9 million in income taxes in 2025 and generated $9.5 million in interest income.
On capital priorities, Kalra said the company’s focus remains on driving organic growth, while the balance sheet also provides flexibility for working capital as it scales and allows it to explore potential M&A opportunities.
Bookings, backlog, and customer mix
Sharma said Paymentus finished the year with strong bookings and a “significant backlog,” providing visibility into 2026. He added that the company saw particular strength in large enterprise customers during the quarter and that its customer mix shift toward enterprise and large and mid-market clients has increased both revenue and contribution profit per transaction.
Management said Paymentus continued to expand and diversify its customer base across verticals, citing utilities, telecommunications, government agencies, educational institutions, banking, property management, healthcare, and insurance, among others. The company also signed additional channel partners, including in consumer finance and utilities. On onboarding, Sharma said onboarding the backlog remains a priority and that the company onboarded several large enterprises in the fourth quarter as well as clients across multiple verticals.
2026 guidance and management’s outlook
For the first quarter of 2026, management guided for revenue of $330 million to $340 million, contribution profit of $103 million to $105 million, and adjusted EBITDA of $36 million to $38 million. For the full year 2026, Paymentus expects:
- Revenue: $1.39 billion to $1.41 billion
- Contribution profit: $442 million to $452 million
- Adjusted EBITDA: $157 million to $167 million
Kalra said the company is maintaining a “prudent approach” to guidance, consistent with its posture during 2025. Sharma and Kalra both noted that the top end of the 2026 revenue guidance could be achieved without signing any new clients, pointing to the strength of existing backlog and visibility.
In the Q&A, management addressed questions about incremental margins implied by the 2026 outlook compared with recent results. Kalra said the company has only about one and a half quarters of experience with large billers that launched recently and wants to observe seasonality and trends over a full four quarters before embedding a similar run rate into forecasts. He also said the company is factoring in operating expense to pursue what management described as a massive pipeline and to expand into additional verticals.
On AI, Sharma said Paymentus feels “great” about what AI represents for the company and argued its consumption-based model—where clients receive the platform without software subscription fees and Paymentus is paid based on usage—positions it well as AI challenges traditional software economics. He also said the company sees broad opportunity to apply AI, and later added that “agentic” AI could play a significant role in bill payments, with the company focused on substantive customer experience improvements rather than “brochureware.”
Sharma also discussed growth vectors, saying new implementations are generally the largest contributor and should remain so, followed by same-store sales, which he said is performing strongly. He also cited IPN as a “strong vector.” In response to a question about same-store opportunity such as autopay penetration, Sharma said the company believes it could “more than double” the business within its existing customer base and “still not be done 100%.”
Management closed by reiterating confidence in its long-term model, pointing to its stated targets of 20% top-line CAGR and 20% to 30% adjusted EBITDA dollar growth, along with its growing technology footprint, ecosystem, and large addressable bill payment market.
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.
