Good day, and welcome to Paymentus’ Fourth Quarter and Full Year 2021 Earnings Call. This call is being recorded. All participants are currently in a listen-only mode. There will be opportunity for your questions following management's prepared remarks. [Operator Instructions] At this time, I would like to hand the call over to Paul Seamon, VP Finance and Strategy for some introductory comments. Please go ahead.

Thank you. Good afternoon. And welcome to Paymentus’ Q4 quarter and full year 2021 earnings call. Joining me in the call today are Dushyant Sharma, our Founder and CEO; and Matt Parson, our CFO. Following our prepared remarks, we will take questions. Our press release was issued after close of market today, and it’s posted on our website where this call is being simultaneously webcast. The webcast replay of this call and supplemental slides of the company with print presentation will be available on our company 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 expectation or intent regarding our financial results, our 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 and our quarterly report on Form 10-Q for the quarter ended September 30, 2021, which we filed with the SEC on November 10, 2021, and our annual report on Form 10-Q for the quarter ended December 31, 2021, which we expect to file with the SEC in early March, 2022, and elsewhere in our filings with the SEC. We encourage you to review these detail 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 margins our non-GAAP financial measures. These non-GAAP financial measures, which we believe are useful in measuring Paymentus’ performance and liquidity, should be considered in addition to, not as a substitute for or an isolation from GAAP results. We encourage you to review additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results. And our earnings press release issued today and supplemental slide is available on the Investor Relations page of our website. With that, I’d like to turn the call over to Dushyant Sharma, our Founder and CEO.

Thank you, Paul. Look, 2021 was a great year. We encompass many things that we believe position us well for a strong 2022 and beyond. But before I talk about 2022, let me discuss about Q4 performance first. We closed out our first year as a public company on a high note. Our contribution profit grew 36% in Q4 to $45.3 million. Our transaction volume grew 54% to over 83 million transactions in the quarter. And in 2021, we also increased our number of clients to over 1700, including billers and financial institutions. And from a users standpoint, we saw 21 consumers and businesses use our platform in the month of December 2021. Our payment volume for the full year jumped 68% to $63 billion. To provide and additional context, it took us 15 years to get to $30 billion in payment volume, annual payment volume. And we have added more than that in just a last two years. It is pretty remarkable. And as you can see from these numbers, our core strategy of building a network and gaining market share is paying off handsomely. As reflected in our 2022 guidance, we expect continued demand for our platform and the ecosystem, which we believe provide significant momentum for 2022 and beyond. Let me now discuss our expectations for 2022. Based on our current visibility, we believe 2022 will be another year of strong growth and profitability. We are expecting full year contribution profit growth to be between 29% to 30% and adjusted EBITDA margin to be between 14% and 16%. And we feel great about our prospects for 2022 primarily because of the work we have done, already done during 2021, which we believe has set a great foundation for our 2022 performance. Let me walk you through a…

Thanks, Dushyant. As a quick reminder today's discussion includes non-GAAP financial measures. Please refer to the tables in our press release and supplemental slides for reconciliation of non-GAAP items to the most directly comparable GAAP financial measure. I echo Dushyant's commentary on the strength of our performance in 2021. If you recall Dushyant's four ecosystem objectives from last quarter, we've made progress in each of them. Signing and implementing a significant number of billers, rapidly growing our payment volume, expanding the reach of IPN and expanding our sales pipeline through warm [ph] leads. In the fourth quarter, we processed 83.3 million transactions, which represents a year-over-year increase of 53.7% and an annualized run rate of more than 330 million transactions. This accelerated transaction volume was driven by a mixed shift as we ramped business-to-business, IPN inclusive of and in particular the Payveris acquisition and other non-biller direct products. These transactions are typically priced based on contribution profit, because there is no interchange associated with them. We believe we have the opportunity to drive additional revenues with this volume over time as we extend our reach and scale. The transaction growth drove a 31.2% increase in revenue over the same period in 2020, which resulted in revenue of $108.1 million in the quarter and $395.5 million for the year. Contribution profit for Q4 was $45.3 million, a 36.3% increase over the same period last year. For the full year contribution profit was $158.5 million, which represents growth of 31.5%. Adjusted gross profit for the fourth quarter was $36.1 million, which is a 35.1% increase from Q4 of 2020 and it was $127.4 million for the year. Adjusted EBITDA was $6.3 million for the fourth quarter, which represents a 13.8% adjusted EBITDA margin. For the full year adjusted EBITDA finished at $29.5…

Thank you, Matt. As Matt and I have shared, we feel good about 2022 primarily because of the hard work and the foundation building we did in 2021. Likewise, our focus in 2022 is to continue to deliver the expected performance. And to also set a great foundation to deliver similar results for 2023 and beyond. That is the nature of our business, but also for over a decade now our execution focus is always on a two-year horizon, where we execute in the current year with an eye to the subsequent year. Our 2021 results and 2022 plans won't be possible without the hard work and the dedication of our 1100 team members, who will sell and take care of our clients every day. I would like to thank each and every member of our team for their hard work. And with that, we'll now open the line to questions.

Thank you. [Operator Instructions] The first question comes from Darrin Peller with Wolf Research. Please proceed.

Thanks guys. Congrats on finishing your first year public -- as a public company. I want to start off with -- when we look at the customer adds you had over the past six to nine months, you started off at 1300 if I remember correctly. You went up to about 1400 plus and now we're showing 1700. It's just a pretty dramatic move in a pretty short period of time. So, if we could just touch on what's driving that? What kind of categories you're adding in? And maybe a little more color on sustainability or what you'd expect to see in the next, call it, 12 to 24 months, that would be great?

Well, the 1700 clients include the Payveris clients as well that come through the acquisition, that is primarily the financial institutions. So -- and relative to remaining clients, I think first of all, we remain very bullish. And as you heard us talk about our goal and strategy is focused on continuing to build network and gain market share through acquisition of billers and build a IPN, continue to build the IPN ecosystem and bring as much volume as possible. So we see the similar trend. And minus the acquisition we see a similar trend in 2022 and beyond in terms of acquisitions of customers. Now in terms of the where they will come from? Utilities, insurance, our key verticals, the core verticals. Utilities, insurance, government, consumer finance, telecom as well as healthcare.

The only thing I would add is that also financial institutions, I think with the addition of Payveris, obviously be a focus on financial institutions and adding, continuing to add more and more financial institutions to the stable of clients.

Absolutely.

Okay. Just one quick follow-up is one or maybe two parts to it. But when thinking about the guide and the outlook for 2022 and beyond now. Number one, I mean, we're getting a couple of questions on the strength of the customer adds and transactions, but more in-line results on contribution profit, as well as really more in line trend looking forward. And so, maybe just touch on the yield dynamics for a minute? And what you're seeing or expecting to see on the yield and what you're able to charge fee per transaction that's changing at all? And then also, is there an inclusion of anything for the JPMorgan partnership yet or is it just too early on for that?

Yes. On the first part on the contribution profit line, I think I might have said it in the prepared remarks. But we expect in 2022, the contribution profit per transaction to be consistent with what we saw roughly the level in Q4. As we've said before, we continue to add larger and larger clients. We've been very fortunate and we've worked hard and earned them in winning larger clients than we've ever won and of course with greater volume for a client generally comes better pricing. And so, certainly, as we need to add larger clients, there will be some continued kind of pressure on the price per transaction line. But we think on the whole we can keep it fairly consistent for 2022 with what we saw in Q4. And some of that also comes from as I think Dushyant mentioned on the call, from other as we continue to expand our B2B presence and the financial institution business in particular. Those are priced on a contribution profit basis, there is no interchange. But that will be more -- it will be akin to where we are currently on contribution profit per transaction. And then with respect to the second part on JPMorgan, lots of positive momentum there. But as you said, when we're -- there's two pieces of the business, if you remember there. One is a migration of their existing accounts. The second is of some of their existing clients they had on the previous platform. The second is to go to market together with them. On the go-to market together with them and the winning new clients. As you would imagine, a lot of those clients are on the larger end of the client spectrum. And so, we've had very good results early on. But those are going to take a little bit longer to get up and running simply because of their size. And so, there's not a lot of impact in 2022 from revenue associated with those clients. That doesn't mean we haven't already won some and we're well underway on winning others, but the revenue impact doesn't really show up in a meaningful way in 2022. On the migration, there's time that it required to get prepped and to talk to the clients, get them comfortable with it. So there again, also there's not a whole lot of impact in 2022. There is some in the back half of the year, but not very large.

Okay. Sorry, that's helpful. Nice guys.

Sure. Thanks Darrin.

Thank you, Darrin. The next question comes from Andrew Bauch with SMBC. Please proceed.

Hey, guys. Thanks for taking my question. I want to touch upon the IPN real quick. And I know one of the key advantages of the IPN, it gives you a lot more visibility into really to build payment ecosystem across the country. I mean, could you help us and investors better understand how the IPN dramatically expands your immediately addressable market and the point on the automated biller discovery. I think a little bit more color around that would be helpful?

Yes. So, well, first of all thank you for the question. Look, as you rightly pointed out, IPN for us is a way to continue to garner insights into how consumers are paying their bills, who they are paying and whether those billers are on our network directly or not. And then, if they are on, great. So we are now able to serve the existing customers better. But those who are not they go directly to our sales pipeline and we are starting to target those customers. So this phenomena actually opens up doors for us beyond the core verticals we talked about. There are several verticals where we are now seeing payments to where they're starting to look very attractive to us, because we're already processing payments and it becomes a very warm lead for us. So, the way to think about this is it's by having financial institutions leverage our IPN and Bill Center. On one hand they're modernizing their capabilities, on the other hand, using those capabilities and the payment volumes, we are able to garner insights as to what other verticals and what other key features and the capabilities we could add to our platform, that allows us to further expand our TAM. So that is actually happening as we speak. Another thing which is interesting in that whole dynamic is, as you know, one of our key areas of focus is how do we reduce the gap between our gross revenue to the contribution profit, the net revenue. And this opens doors for us there as well. So we see that as a biggest strategy for us. And Andrew, if you could repeat the second part of your question?

No. I think you answered it. It was with regard to the automated biller discovery. But I guess my follow-up question would be, just looking at the adjusted EBITDA guide, 50% margin that the mid -- at the midpoint seems relatively in line with what we were expecting. I mean, any changes to your investment strategy there with regards to tightening supply or labor markets in that vein?

Not really. I think we -- as we've said before, we're letting to some extent the strength of our business dictate how we think about spending in the sense of, if we feel like there's opportunity to increase the top line then we believe it's worth the investment to obviously to spend the money to do that. We've been continuing to add people. Certainly as we talked about on a previous call as everybody's seen the hiring cycle is maybe a tad bit longer than it was say, nine or 12 months ago just because of the little bit of tightening labor market. But we've still been able to attract phenomenal people. I mean, some days, I'm telling my -- our recruiting team to slow down a little bit, because they're finding such great candidates. But yes, we're going to continue to as Dushyant said, on the prepared remarks. Our hallmark has been responsible growth. And we think that profitability is important and we're going to continue to really weigh out every investment decision on do we think it can drive additional growth. And if not we're not going to do it. We're going to make sure that we're spending the money responsibly into driving growth to the top line.

Thanks.

Yes. Thank you, Andrew. The only thing I was going to say is just keep in mind that because of our implementation timeline, the results in revenue are lagging the investment. In the sense that, if it takes us six, nine months to get a customer live, we're not going to see the revenue impact of the investments necessarily straight away. It takes a little bit of time to see those.

Good points.

All right. Thank you.

Yep, appreciate it.

Thank you, Andrew. The next question comes from John Davis with Raymond James. Please proceed.

Hey, good afternoon guys. First just want to start on net rev retention. Maybe just comment a little bit, it's not an actual number directionally. How it trended in 2021 versus 2020? What kind of is embedded in the 2022 guidance?

Yes. So, consistent with what we've seen historically, we did not -- have not yet disclosed a number or talked about a number for 2021, but I would say it's very consistent with what we've seen historically. So let's call it, mid to upper one teens, kind of 115 to 120 range. And so, as we've -- I think laid out previously, when we think about, if we think about ourselves around about a 30% grower, about roughly in the ballpark of half of that comes from expansion with existing accounts and roughly about half of that comes from new clients and 2022 is no business.

Okay, great. And then the inorganic contribution for revenue or sorry, contribution profit in 4Q, and then how should we think about what's with baked in the guide from an organic perspective in 2022?

Yes. We haven't broken it out, because it's not material to the overall numbers. But it's in there and it's baked into the guidance for next year what we expect to do. And there's certainly, when you think about the acquisition they obviously brought some clients with them. But the real value or a real value is the combination of the companies and what we're able to do as far as providing the bill payment capabilities to the financial institutions et cetera. So, it's included in our guidance, but we haven't broken it out because it's not material.

Okay. And I'll squeeze one, last one if I can. Just, Dushyant, you talk a lot about IPN in the prepared remarks. Maybe just help us -- maybe in 2021 ballpark contribution to revenue and are you expecting IPN to contribute meaningfully more in 2022? Just kind of curious an update from a revenue contribution profit perspective for IPN?

Actually, one of the things we are doing internally now is, we have seen -- as you are seeing the trends, the IPN and the core business, they're so intertwined because of the network effect which we were pursuing, we are seeing that already in action. And therefore, we are internally actually not even breaking out exactly how the IPN versus the core business. But as you are seeing from our numbers and the volume and the transaction growth, it is contributing to our growth as well as to frankly the network effect we were talking. Do you want to add anything to this?

Yes. I'll just had on the revenue to contribution profit. We've, as we talked about I think previously the revenue line will certainly step down on a per transaction basis over time as two things happen. One, we sign larger and larger accounts, but also as more of the mix of our business transitions to becoming a contribution profit only or business without where we don't carry the cost of the interchange such as B2B, as you mentioned the IPN transactions which includes the financial institutions as part of the Payveris is working with, et cetera. So, we will continue to see a progressive increase in contribution profit as a percentage of revenue. I would not and we can talk more about it obviously, but I would not model a massive step up for that this year. I think it'll be a very kind of slow step up throughout the year as we go through the year.

Okay. That's helpful. Thanks guys.

Thank you, John. The next question comes from Tien-Tsin Huang with JPMorgan. Please proceed.

Thank you. Great results here. Just -- I wanted to ask on the pipeline for billers and partners now versus this time last year. Any big change here? Are your sales targets that you've set for the sales team quota wise is it higher for 2022 versus 2021? How does it compare, just curious? Thank you.

Great question, Tien-Tsin actually. The reason I'm smiling is because some of these discussions are already happening between me, Matt and Jerry and rest of the team. So we are having those discussions. But yes, the pipeline is stronger than it was before. And the -- as the combination of all of the things we have been working towards leading up to this day if you will from years past, it's the combination of the partnership framework we have put together both from the biller set of partnerships, the companies who are helping us build biller network as well as on the IPN ecosystem and then as well as financial institutions partnerships including JPMorgan Chase. So as a result of all that, combined with the -- frankly, the better messaging, the network effects, the clear understanding in the market that there is a need for a platform and ecosystem like Paymentus. As a result, our targets for this year are larger -- bigger than they were last year. And the team is very focused on that. And as I talked about in my prepared remarks as well that we have many sources of revenue and that's part of that platform we have built here.

Yes. Now it feels that way, it seems like the net is definitely wider, which is why I thought I'd ask. So just my quick follow-up then just thinking about the revenue drivers this year versus last year. Do you expect it to be meaningfully different? I mean, given what you just said there with a lot more partners and plays. I know you've signed a lot of larger billers as well. I'm just curious you think the wheel is going to spin a little bit differently to get to where you're targeting?

Yes. I mean, look, our pursuit is to gain as much of the market share as we can and continue to expand our network. And that will continue on. And we are -- we remain very excited, actually we are seeing tremendous trends in our favor from all aspects. If you think about it, billing companies are looking for a more unified platform. The banks are looking for a modern, modernized user experience and we sit right in the middle of it -- of it all. And consumers want choice. They want a way to be able to pay whatever they want, whenever they want, however they want. And we are able to do that. So as a result of that I think the net as you said is getting wider. And as a result I think we are able to target clients in different industries than we were not thinking about. We are able to also watching our trends, the type of billers we are not processing payments for, but we are directly on our direct platform. But we are seeing them through the IPN network. We are able to also restructure some capabilities and see, hey, what more could we add. So what you will start to see is a combination of large clients coming in, whether it's coming through larger partners as well as directly. But also you will see a little bit more diversity of verticals in the go after as well. Initially opportunistically just based on what we are seeing and then eventually pretty in a formal manner.

Yes. That was great. Thank you, Dushyant. Thank you, Matt.

Thank you, Tien-Tsin.

Thank you, Tien-Tsin. The next question comes from Jason Kupferberg with Bank of America. Please proceed.

Okay. Thanks guys. Just curious how to think about cash flow conversion in 2022 based on the adjusted EBITDA that you're forecasting, whether you want to talk about in terms of operating cash flow, free cash flow? Thank you.

Yes. Thanks Jason. Yes. Consistent with what we've seen historically in 2021 and prior no real changes to the drivers and cash flow conversion. I think cap software is a big impact. If you think about the difference between operating cash flow and free cash flow, we do have a lot of capitalized software, but there's no changes to any of the leverage of drivers that would change cash flow conversion from adjusted EBITDA consisting of what we did in 2021.

Okay, good. And then just with respect to the balance sheet. Obviously, in great shape and no debt and you've had a track record of some successful M&A. What does the pipeline look like there? How do you feel like that will be a meaningful part of the story for finance in 2022?

Yes. I'll start in Dushyant, you can add on. We're constantly looking at M&A opportunities. As you can imagine, once we went public our email inboxes got flooded with things. And so as we said before, we've been very opportunistic and disciplined in the past with M&A and will continue to be so going forward. I think the good news is as you heard Dushyant lay out kind of where we are and the things we accomplished in 2021, when we look at the goals we want to achieve in 2022 and really beyond, there is no -- there are no big holes in our strategy or our objectives that say, we've got to go out and buy something to fill this gap or to plug this hole. So it gives us the ability to be very opportunistic and either expand our TAM or deepen our capabilities in a certain area. But it's all kind of additive to what we're already doing as opposed to say plugging a big gap or a hole that we have, which is a good position to be in and it allows us to be quite opportunistic. Dushyant, do you want to add anything?

No. I think I completely agree. I think we'll continue to be selective and very disciplined. But doing acquisitions I won't put it out of the realm of possibilities. We'll continue to look at opportunities and if there's something comes along which we like and you think it could be additive we'll do it.

Thanks, Dushyant.

All right. Thanks Jason.

Thank you, Jason. The next question comes from Ashwin Shirvaikar with Citi. Please proceed.

Hi, Dushyant. Hi, Matt. Good to hear your voices.

Thank you.

I guess let me start with -- you have the 14 to 16 margin range and if you could kind of talk about what drives the 14 versus the 16. How much of that is explicit investments versus mix things like that? If you could talk about that I guess?

Yes, absolutely. So some of it, obviously, is dependent upon where we land on the top line and to the extent it flows through ultimately, EBITDA for sure and there's a range on the top line. So, there's a flow through on that. But it also is one of the things we want to make sure that we give ourselves enough of a range to be honest and transparency with you and the investors on having additional capability to invest to the extent that we see the opportunity to do that. Again, we're a growth business and we think that being able to grow in the 30 range is quite attractive and into the extent that we have opportunities that can add, potentially add to that growth level. We want to have the ability to make those investments. So I'd say, that's really the difference between kind of the 14 and 16 is throughout the years we see opportunities to invest being in a position to do that. And as you would expect a good majority of our expenses in the people bucket. And so, I think we're always looking for good people and it's also somewhat dependent upon the timing of hiring and attrition and some of those things you can't control. So kind of with all those factors in we felt like that was an appropriate range and just gave again ourselves a little bit of flexibility as we kind of work through the year to have additional investment dollars to the extent that we think that there's things that we can invest in that will drive additional top line.

Got it. Got it. And then, as you added new partners, is there any change observable I guess in either payment type or bill amount size. You might be meaning affluent versus subprime, various different factors that you might look at to figure out sort of the partner strategy and hone it? Can you talk a little bit more about that forward-looking perspective as well?

Yes. I think from what we are seeing is that larger billers are obviously a lot more open to doing partnership with us as a result of the ecosystem we have built in the platform, but also the partnership framework. But we haven't seen a major shift in terms of the payment mix or other changes. In fact, that's what makes this thing pretty attractive. And I said, I think this entire business proposition we're talking about is that we have built what we need to build to get to the point we are at, which is now it's more about having more storytellers, more ways to tell the story and more listeners and therefore more customers coming on board, because we have the platform, we have the ecosystem, we have the network, all of the components you needed to make it happen.

I would totally agree. The only thing I would add is, we have definitely seen a widening in the payment amount kind of levels, four different clients. Meaning, if I go back two years ago when -- before we started adding more and more large billers three years ago. I could have told you our average payment amount across all of our bills is $180 let's say. And it was fairly consistent. There wasn't a wide high and low on the $180. But as we've expanded into more verticals and doing more things like we've got a client that we went live with in Q4 that the average payment amount is well over a thousand dollars and we've got another one that the average payment amount is $500 or $600 in the auto space. And so, I would say on an average payment amount it picked up slightly across all billers, but there's a bigger delta between high and low. But there's nothing to necessarily draw from that other than a good thing that we're getting more and more different types of billers and more and more different types of verticals. But if we price them appropriately the economic and financial statement output of that is consistent regardless of ultimately the payment type. But there's definitely more divergence than what that looks like just because we've moved into more industries and in different verticals.

Got it. Thank you, guys.

Thank you, Ashwin. The next question comes from Will Nance with Goldman Sachs. Please proceed.

Hey, guys. Good afternoon. Thanks for squeezing me in here. I had a question just on the revenue trajectory over the year and it sounds like there are a handful of things that may start to kick in the back half of the year. I think you mentioned some of the JPMorgan partnership will start to contribute towards the end of the year, but really it sounded like more 2023 weighted. I think last quarter you talked about a large client that was supposed to come on board a larger than normal client coming on board towards the second half of this year. So I just kind of understand like I hearing loud and clear you guys consider the business a 30% grower. Is it possible that with the addition of these handful of things you guys have talked about, we could be exiting the year with a little bit of tailwind.

I'm going to not let Dushyant answer that question. No, our guidance, I got into our guys I think, yes, we've certainly said that there's some things coming out of the jpmorgan partnership that were hitting late in the year. The client that you referenced we talked about going live late in the year. All of those things set us up well for -- as we said 2023 and beyond I would just reiterate that our guidance is what it is. But we've got a lot of reason to be optimistic for how things shape up towards the end of the year. And we'll see. We've got a lot of work to do. As we talked about our implementation timeline is such that when we look at 2022 I think I said in my prepared remarks most if not all that revenue is kind of locked in as far as the clients signed up that we'll go live this year. Now there's variability in the timing of when they go live and the volumes of when they're live. But the work that we're doing between now and then of 2022 is what becomes obviously 2023 revenue. And so, we've got a lot of work to do. I think it's the board is set up well for us with some of the things that are happening late in the year, but there's still a lot of work to do this year to get 2023 where we want it to be. got it that's helpful and I just in fact that's a follow-up I just want to try the organic growth question a different way I realize that you guys are not breaking that out because you don't really consider it too material I just want to make sure I understand the comments on the quarterly cadence of

Got it. That's helpful. And then just if I can ask a follow-up. I just want to try the organic growth question in different. I realize that you're guys are not breaking that out, because you're not really considered to material. I just want to make sure I understand the comment on a quarterly cadence of growth throughout the year. Because it sounded like you said that it was material enough that we would notice just from a comps perspective in the first half of the year, the growth being elevated and then falling off in the back half of the year. So I was wondering if you could just help us understand the magnitude of that inorganic impact from comps in the prior year as we go from the first half into the second half? And I would kind of echo the earlier questions around ballpark what the acquisition from the third quarter are contributing to the current run rate?

Yes. That's a fair point. And I think really what we were intending was obviously Q3 and Q4 are tougher comps than Q1 and Q2 is really what we're trying to say. And part of the reason for that is even though not material there's still some amount of acquisition in there. I would say a couple points. Really what we're trying to essentially say is as we go through the year it's going to appear, well, it is going to be that Q1 and Q2 growth rates are going to be higher than Q3 and Q4. And so, essentially what I was trying to say is don't read into that that growth is slowing down, because there's a lot of factors that play into the quarter-on-quarter results that we see. And overall part of the reason we don't give quarterly guidance overall on an annualized basis we think we're a 30% grower. And so, even if Q3 and Q4 aren't at that level that doesn't mean in our minds that we're slowing down the growth, because we're still believing ourselves to be a 30% grower for 2022 and into the future.

And I understood. Appreciate you taking my question.

Well, I'll just make a quick point here. I may be a single voice here on the table but I'm actually not very happy with 30% growth. So I continue to think about all the innovative ways we could get to that what can we do to accelerate the growth even further. But the 30% number actually is important from a different perspective also, that we want to remain a rule of 40 company. We want to be a responsible grower of the business. We want to be a profitable company. We feel like that you rest of the investment community has trusted us with your capital and it's not lost on us that families through mutual funds are investing in the public funds and they're investing in our business. And so, we want to make sure that we are responsible custodian of the capital. And as a result, we feel like that at 30% of its -- with the EBITDA Margins we have. We have a rule of 40 companies. So that's the mix. That's the key - the key reason why 30% is the number.

Got it. Understood. Appreciate the color.

Thank you, Will. The next question comes from Dave Koning with Baird. Please proceed.

Yes. Hey, guys. Nice revenue momentum. And maybe my first question, just transaction growth was so strong sequentially can you kind of review just how much of that maybe was from acquisitions. How much is kind of just normal existing client growth? And how much was kind of newer clients like -- just so we can kind of see why it was -- it just seemed to diverge quite a bit from normal?

Yes. I would say and again we haven't broken out specifically, but I would say, it's safe to say that even without the acquisitions transaction growth was still well north of 40% and approaching the 50% level. And as we said before, our growing share is our number one priority and trying to get more and more transactions on our platform. We -- as we think about, the mix is changing through as we talked about b2b and some of the IPN stuff with financial institutions et cetera. The pricing then becomes really on a contribution profit basis. So the revenue on a contribution profit basis, because there's no interchange associated with it. And so, it changes the dynamic a little bit on revenue versus contribution profit versus the transactions. But it was still very strong. And we think as we go down the road that will continue to pay dividends as we think about. I think Dushyant reference ways to minimize the gap between contribution profit and revenue and drive even more contribution profit out of those clients.

Great, great. And maybe just a quick follow-up. Gross profit per transaction was a little bit down. Is it all the same factors that that with contribution profit per transaction. And maybe is that even a worthwhile metric to kind of track?

For sure. I would look at -- personally, I don't know if you're talking about GAAP gross profit or adjusted gross profit per transaction. I would use adjusted gross profit just because now with the acquisitions we've got, the amortization of intangibles that are flowing in the cost of revenue that kind of just start to distort GAAP gross profit a little bit when you think about just the normal business. But I do think it's a good metric. And the only, the main difference between just or between contribution profit and adjuster gross profit is processing costs and other hosting and data center costs that we use to deliver our platform, which are I think it's an important way to look at the business as well, but the same drivers at play.

Yes, great. Thanks guys.

Thank you, Dave. There are no additional questions registered at this time. So I'll pass the conference back to the management team for closing remarks.

Well thank you so much for joining the call, really appreciate. We'll talk to you soon

Bye-bye.

Bye.

That concludes the Paymentus' fourth quarter and full year 2021 earnings call thank you for your participation. You may now disconnect your line.