–Second quarter 2022 revenue growth of 30.3% – or 22.4% organically – driven by continued broad based demand coupled with solid operational execution
–Higher than expected second quarter 2022 revenues, stronger gross margin performance due to on-going payment monetization and cost leverage drive lower-than-expected net loss
–Raising full-year 2022 business outlook for a second consecutive period based on stronger financial results
CHARLOTTE, N.C., Aug. 03, 2022 — AvidXchange Holdings, Inc. (Nasdaq: AVDX), a leading provider of accounts payable (AP) automation software and payment solutions for middle market businesses and their suppliers, today announced financial results for the second quarter ended June 30, 2022.
“We again delivered solid across-the-board operating and financial results for the second quarter, led by another 20%+ organic revenue growth quarter and lower than expected adjusted EBITDA loss. Our purpose-built value proposition of providing AP and payments automation for middle-market companies has been a boon to our customers during good times and is now proving to be a powerful efficiency lever during uncertain economic times. As companies grow increasingly cautious on adding new headcount or even look to right size their operations, we remain well positioned to advance our buyer customers’ productivity initiatives while helping our supplier customers to optimize their cash flows. We anticipate that this client- and industry-aligned value proposition, with its highly quantifiable benefits, will continue to fuel demand broadly across our large and underpenetrated addressable market. We believe our solid second quarter results and our newly raised guidance for the year further demonstrates the resilience of our value proposition and momentum across our operations,” said Michael Praeger, CEO & Co-Founder of AvidXchange.
Second Quarter 2022 Financial Highlights:
- Total revenue was $76.6 million, an increase of 30.3% year-over-year, compared with $58.8 million in the second quarter of 2021.
- GAAP net loss was $(25.7) million, compared with a GAAP net loss of $(22.0) million in the second quarter of 2021.
- Non-GAAP net loss was $(13.7) million, compared with a Non-GAAP net loss of $(14.9) million in the second quarter of 2021.
- GAAP gross profit was $42.9 million, or 56.0% of total revenue, compared with $31.2 million, or 53.0% of total revenue, in the second quarter of 2021.
- Non-GAAP gross profit was $48.7 million, or 63.7% of total revenue, compared with $35.8 million, or 61.0% of total revenue, in the second quarter of 2021.
- Adjusted EBITDA was $(4.7) million compared with $(5.6) million in the second quarter of 2021.
A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables following the financial statements in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Measures and Other Performance Metrics.”
Second Quarter 2022 Key Business Metrics and Highlights:
- Total transactions processed in the second quarter of 2022 was 17.3 million, an increase of 13.2% from 15.3 million in the second quarter of 2021.
- Total payment volume in the second quarter of 2022 was $16.6 billion, an increase of 36.0% from $12.2 billion in the second quarter of 2021.
- Transaction yield in the first quarter of 2022 was $4.42, an increase of 15.1% from $3.84 in the second quarter of 2021.
Full Year 2022 Financial Outlook
As of August 3, 2022, AvidXchange anticipates its revised Full Year 2022 revenue and adjusted EBITDA to be in the following ranges (in millions):
| Current FY 2022 Guidance |
Previous FY 2022 Guidance |
|||
| Revenue | $308.0 – $310.0 | $303.0 – $307.0 | ||
| Adjusted EBITDA(1) | $(27.0) – $(29.0) | $(35.0) – $(39.0) |
(1) A reconciliation of adjusted EBITDA to GAAP net loss on a forward-looking basis is not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to the items excluded from this non-GAAP measure.
These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
Earnings Teleconference Information
AvidXchange will discuss its second quarter 2022 financial results during a teleconference today, August 3, 2022, at 6:00 PM ET. The call will be broadcast simultaneously via webcast at https://ir.avidxchange.com/. Following the completion of the call, a recorded replay of the webcast will be available on AvidXchange’s website. In addition to the conference call, supplemental information is available on the Investor Relations section of AvidXchange’s website at https://ir.avidxchange.com/.
About AvidXchange™
AvidXchange is a leading provider of accounts payable (“AP”) automation software and payment solutions for middle market businesses and their suppliers. AvidXchange’s software-as-a-service-based, end-to-end software and payment platform digitizes and automates the AP workflows for more than 8,000 businesses and it has made payments to more than 825,000 supplier customers of its buyers over the past five years. To learn more about how AvidXchange is transforming the way companies pay their bills, visit www.AvidXchange.com.
Forward-Looking Statements
This press release may contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements generally relate to future events or our future financial or operating performance and often contain words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “future,” “likely,” “may,” “should,” “will” and similar words and phrases indicating future results. The information presented in this press release related to our expectations of future performance, including guidance for our revenue and adjusted EBITDA for the full year 2022, statements related to the significance of our strong performance in the second quarter, the sustainability of our momentum across our operations and trend related to organic revenue growth, statements indicating our belief that our value proposition will continue to fuel demand across our addressable markets, and other statements that are not purely statements of historical fact, are forward-looking in nature. These forward-looking statements are made on the basis of management’s current expectations, assumptions, estimates and projections and are subject to significant risks and uncertainties that could cause actual results to differ materially from those anticipated in such forward-looking statements. We therefore cannot guarantee future results, performance or achievements.
Factors which could cause actual results or effects to differ materially from those reflected in forward-looking statements include, but are not limited to, the risk factors and other cautionary statements described, from time to time, in AvidXchange’s filings with the Securities and Exchange Commission (“SEC”), including, without limitation, AvidXchange’s Annual Report on Form 10-K and other documents filed with the SEC, which may be obtained on the investor relations section of our website (https://ir.avidxchange.com/) and on the SEC website at www.sec.gov. Any forward-looking statements made by us in this press release are based only on information currently available to us and speak only as of the date they are made, and we assume no obligation to update any of these statements in light of new information, future events or otherwise unless required under the federal securities laws.
Non-GAAP Measures and Other Performance Metrics
To supplement the financial measures presented in our press release and related conference call in accordance with generally accepted accounting principles in the United States (“GAAP”), we also present the following non-GAAP measures of financial performance: Non-GAAP Gross Profit, Adjusted EBITDA, and Non-GAAP Net Loss.
A “non-GAAP financial measure” refers to a numerical measure of our historical or future financial performance or financial position that is included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in our financial statements. We provide certain non-GAAP measures as additional information relating to our operating results as a complement to results provided in accordance with GAAP. The non-GAAP financial information presented herein should be considered in conjunction with, and not as a substitute for or superior to, the financial information presented in accordance with GAAP and should not be considered a measure of liquidity. There are significant limitations associated with the use of non-GAAP financial measures. Further, these measures may differ from the non-GAAP information, even where similarly titled, used by other companies and therefore should not be used to compare our performance to that of other companies.
We have presented Non-GAAP Gross Profit, Adjusted EBITDA, and Non-GAAP Net Loss in this press release. We define Non-GAAP Gross Profit as revenue less cost of revenue excluding the portion of depreciation and amortization and stock-based compensation expense allocated to cost of revenues. We define Adjusted EBITDA as our net loss before depreciation and amortization, impairment and write-off of intangible assets, interest income and expense, income tax expense, stock-based compensation expense, transaction and acquisition-related costs expensed, change in fair value of derivative instrument, non-recurring items not indicative of ongoing operations, and charitable contributions of common stock. We define Non-GAAP Net Loss as net loss before amortization of acquired intangible assets, impairment and write-off of intangible assets, stock-based compensation expense, transaction and acquisition-related costs expensed, change in fair value of derivative instrument, non-recurring items not indicative of ongoing operations, provision for income taxes and charitable contributions of common stock.
We believe the use of non-GAAP financial measures, as a supplement to GAAP measures, is useful to investors in that they eliminate items that are either not part of our core operations or do not require a cash outlay, such as stock-based compensation expense. Management uses these non-GAAP financial measures when evaluating operating performance and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures help indicate underlying trends in the business, are important in comparing current results with prior period results, and are useful to investors and financial analysts in assessing operating performance.
Investor Contact:
Subhaash Kumar
[email protected]
813.760.2309
AvidXchange Holdings, Inc.
Unaudited Consolidated Statements of Operations
(in thousands, except share and per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenues | $ | 76,561 | $ | 58,754 | $ | 147,764 | $ | 113,968 | ||||||||
| Cost of revenues (exclusive of depreciation and amortization expense) | 28,979 | 23,011 | 56,786 | 45,551 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Sales and marketing | 20,448 | 14,547 | 37,687 | 28,058 | ||||||||||||
| Research and development | 20,107 | 13,620 | 40,179 | 27,553 | ||||||||||||
| General and administrative | 19,974 | 15,770 | 38,662 | 29,934 | ||||||||||||
| Impairment and write-off of intangible assets | – | 574 | – | 574 | ||||||||||||
| Depreciation and amortization | 8,301 | 7,093 | 16,019 | 14,170 | ||||||||||||
| Total operating expenses | 68,830 | 51,604 | 132,547 | 100,289 | ||||||||||||
| Loss from operations | (21,248 | ) | (15,861 | ) | (41,569 | ) | (31,872 | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest income | 655 | 165 | 875 | 297 | ||||||||||||
| Interest expense | (5,075 | ) | (5,086 | ) | (10,052 | ) | (10,111 | ) | ||||||||
| Change in fair value of derivative instrument | – | (1,084 | ) | – | (138 | ) | ||||||||||
| Charge for amending financing advisory engagement letter – related party | – | – | – | (50,000 | ) | |||||||||||
| Other expenses | (4,420 | ) | (6,005 | ) | (9,177 | ) | (59,952 | ) | ||||||||
| Loss before income taxes | (25,668 | ) | (21,866 | ) | (50,746 | ) | (91,824 | ) | ||||||||
| Income tax expense | 69 | 133 | 138 | 201 | ||||||||||||
| Net loss | $ | (25,737 | ) | $ | (21,999 | ) | $ | (50,884 | ) | $ | (92,025 | ) | ||||
| Accretion of convertible preferred stock | – | (4,802 | ) | – | (9,404 | ) | ||||||||||
| Net loss attributable to common stockholders | $ | (25,737 | ) | $ | (26,801 | ) | $ | (50,884 | ) | $ | (101,429 | ) | ||||
| Net loss per share attributable to common stockholders, basic and diluted | $ | (0.13 | ) | $ | (0.49 | ) | $ | (0.26 | ) | $ | (1.90 | ) | ||||
| Weighted average number of common shares used to compute net loss per share attributable to common stockholders, basic and diluted | 197,864,993 | 54,562,145 | 197,443,615 | 53,317,276 | ||||||||||||
AvidXchange Holdings, Inc.
Unaudited Consolidated Balance Sheets
(in thousands, except share and per share data)
| As of June 30, | As of December 31, | |||||||
| 2022 | 2021 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 363,314 | $ | 562,817 | ||||
| Restricted funds held for customers | 1,023,902 | 1,242,346 | ||||||
| Marketable securities | 147,750 | – | ||||||
| Accounts receivable, net of allowances of $2,347 and $2,283, respectively | 36,021 | 30,965 | ||||||
| Supplier advances receivable, net of allowances of $1,357 and $1,105, respectively | 14,496 | 11,520 | ||||||
| Prepaid expenses and other current assets | 13,029 | 10,237 | ||||||
| Total current assets | 1,598,512 | 1,857,885 | ||||||
| Property and equipment, net | 105,998 | 106,227 | ||||||
| Operating lease right-of-use assets | 5,564 | 3,278 | ||||||
| Deferred customer origination costs, net | 27,486 | 28,276 | ||||||
| Goodwill | 165,921 | 165,921 | ||||||
| Intangible assets, net | 104,135 | 100,455 | ||||||
| Other noncurrent assets and deposits | 4,667 | 4,261 | ||||||
| Total assets | $ | 2,012,283 | $ | 2,266,303 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 14,361 | $ | 17,142 | ||||
| Accrued expenses | 56,569 | 56,082 | ||||||
| Payment service obligations | 1,023,902 | 1,242,346 | ||||||
| Deferred revenue | 10,565 | 9,530 | ||||||
| Current portion of contingent consideration | – | 688 | ||||||
| Current maturities of lease obligations under finance leases | 597 | 670 | ||||||
| Current maturities of lease obligations under operating leases | 1,304 | 1,048 | ||||||
| Current maturities of long-term debt | 4,800 | 4,800 | ||||||
| Total current liabilities | 1,112,098 | 1,332,306 | ||||||
| Long-term liabilities | ||||||||
| Deferred revenue, less current | 18,702 | 20,350 | ||||||
| Contingent consideration, less current portion | 70 | 70 | ||||||
| Obligations under finance leases, less current maturities | 61,710 | 61,172 | ||||||
| Obligations under operating leases, less current maturities | 5,370 | 3,448 | ||||||
| Long-term debt | 122,879 | 119,880 | ||||||
| Other long-term liabilities | 2,863 | 6,022 | ||||||
| Total liabilities | 1,323,692 | 1,543,248 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity | ||||||||
| Preferred stock, $0.001 par value; 50,000,000 shares authorized, no shares issued and outstanding as of June 30, 2022 and December 31, 2021 | – | – | ||||||
| Common stock, $0.001 par value; 1,600,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 198,077,889 and 196,804,844 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | 198 | 197 | ||||||
| Additional paid-in capital | 1,611,828 | 1,594,780 | ||||||
| Accumulated deficit | (923,435 | ) | (871,922 | ) | ||||
| Total stockholders’ equity | 688,591 | 723,055 | ||||||
| Total liabilities and stockholders’ equity | $ | 2,012,283 | $ | 2,266,303 | ||||
AvidXchange Holdings, Inc.
Unaudited Consolidated Statements of Cash Flows
(in thousands)
| Six Months Ended June 30, | |||||||
| 2022 | 2021 | ||||||
| Cash flows from operating activities | |||||||
| Net loss | $ | (50,884 | ) | $ | (92,025 | ) | |
| Adjustments to reconcile net loss to net cash used by operating activities | |||||||
| Depreciation and amortization expense | 16,019 | 14,170 | |||||
| Amortization of deferred financing costs | 679 | 679 | |||||
| Provision for doubtful accounts | 2,318 | 251 | |||||
| Stock-based compensation | 15,049 | 1,952 | |||||
| Accrued interest | 1,184 | 548 | |||||
| Loss on fixed asset disposal | 26 | – | |||||
| Noncash expense on contract modification – related party | – | 50,000 | |||||
| Impairment and write-off on intangible and right-of-use-assets | – | 574 | |||||
| Amortization of investments held to maturity | (494 | ) | – | ||||
| Fair value adjustment to derivative instrument | – | 138 | |||||
| Deferred income taxes | 108 | 108 | |||||
| Changes in operating assets and liabilities | |||||||
| Accounts receivable | (5,555 | ) | (1,782 | ) | |||
| Prepaid expenses and other current assets | (2,791 | ) | (1,400 | ) | |||
| Other noncurrent assets | (453 | ) | (2,489 | ) | |||
| Deferred customer origination costs | 791 | (1,288 | ) | ||||
| Accounts payable | (2,041 | ) | (9,465 | ) | |||
| Deferred revenue | (613 | ) | 664 | ||||
| Accrued expenses and other liabilities | (3,975 | ) | (1,325 | ) | |||
| Operating lease liabilities | (107 | ) | (403 | ) | |||
| Total adjustments | 20,145 | 50,932 | |||||
| Net cash used in operating activities | (30,739 | ) | (41,093 | ) | |||
| Cash flows from investing activities | |||||||
| Purchase of short-term investments held to maturity | (254,026 | ) | – | ||||
| Proceeds from maturity of short-term investments held to maturity | 106,770 | – | |||||
| Purchases of equipment | (2,470 | ) | (344 | ) | |||
| Purchases of real estate | (767 | ) | – | ||||
| Purchases of intangible assets | (16,100 | ) | (8,078 | ) | |||
| Supplier advances, net | (4,796 | ) | (1,710 | ) | |||
| Net cash used in investing activities | (171,389 | ) | (10,132 | ) | |||
| Cash flows from financing activities | |||||||
| Proceeds from the issuance of long-term debt | 2,367 | 1,131 | |||||
| Principal payments on finance leases | (425 | ) | (589 | ) | |||
| Proceeds from issuance of common stock | 425 | 1,163 | |||||
| Proceeds from issuance of common stock under Employee Stock Purchase Plan | 602 | – | |||||
| Payment of contingent consideration at acquisition date fair value | (344 | ) | – | ||||
| Payment service obligations | (218,444 | ) | 543,201 | ||||
| Net cash (used in) provided by financing activities | (215,819 | ) | 544,906 | ||||
| Net (decrease) increase in cash, cash equivalents, and restricted funds held for customers | (417,947 | ) | 493,681 | ||||
| Cash, cash equivalents, and restricted funds held for customers | |||||||
| Cash, cash equivalents, and restricted funds held for customers, beginning of year | 1,805,163 | 390,078 | |||||
| Cash, cash equivalents, and restricted funds held for customers, end of period | $ | 1,387,216 | $ | 883,759 | |||
| Supplementary information of noncash investing and financing activities | |||||||
| Right-of-use assets obtained in exchange for new finance lease obligations | $ | 499 | $ | 174 | |||
| Right-of-use assets obtained in exchange for new operating lease obligations | 2,831 | 316 | |||||
| Common stock issued as contingent consideration | 344 | – | |||||
| Property and equipment purchases in accounts payable and accrued expenses | 29 | 7 | |||||
| Interest paid on notes payable | 5,305 | 5,199 | |||||
| Interest paid on finance leases | 2,863 | 3,685 | |||||
| Options issued in connection with bonus compensation | – | 48 | |||||
AvidXchange Holdings, Inc.
Unaudited Reconciliation of GAAP to Non-GAAP Measures
(in thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Reconciliation from Revenue to Non-GAAP Gross Profit and Non-GAAP Gross Margin: | |||||||||||||||
| Total revenues | $ | 76,561 | $ | 58,754 | $ | 147,764 | $ | 113,968 | |||||||
| Expenses: | |||||||||||||||
| Cost of revenues (exclusive of depreciation and amortization expense) | (28,979 | ) | (23,011 | ) | (56,786 | ) | (45,551 | ) | |||||||
| Depreciation and amortization expense | (4,700 | ) | (4,579 | ) | (9,006 | ) | (9,103 | ) | |||||||
| GAAP Gross profit | $ | 42,882 | $ | 31,164 | $ | 81,972 | $ | 59,314 | |||||||
| Adjustments: | |||||||||||||||
| Stock-based compensation expense | 1,161 | 84 | 2,120 | 140 | |||||||||||
| Depreciation and amortization expense | 4,700 | 4,579 | 9,006 | 9,103 | |||||||||||
| Non-GAAP gross profit | $ | 48,743 | $ | 35,827 | $ | 93,098 | $ | 68,557 | |||||||
| GAAP Gross margin | 56.0 | % | 53.0 | % | 55.5 | % | 52.0 | % | |||||||
| Non-GAAP gross margin | 63.7 | % | 61.0 | % | 63.0 | % | 60.2 | % | |||||||
| Reconciliation from Net Loss to Non-GAAP Net Loss: | |||||||||||||||
| Net loss | $ | (25,737 | ) | $ | (21,999 | ) | $ | (50,884 | ) | $ | (92,025 | ) | |||
| Amortization of acquired intangible assets | 3,736 | 2,752 | 7,329 | 5,505 | |||||||||||
| Impairment and write-off of intangible assets | – | 574 | – | 574 | |||||||||||
| Provision for income taxes | 69 | 133 | 138 | 201 | |||||||||||
| Stock-based compensation expense | 8,258 | 1,105 | 15,049 | 1,952 | |||||||||||
| Transaction and acquisition-related costs | 73 | 1,436 | 277 | 3,046 | |||||||||||
| Change in fair value of derivative instrument | – | 1,084 | – | 138 | |||||||||||
| Non-recurring items not indicative of ongoing operations | (65 | ) | 25 | (57 | ) | 50,050 | |||||||||
| Total net adjustments | 12,071 | 7,109 | 22,736 | 61,466 | |||||||||||
| Non-GAAP net loss | $ | (13,666 | ) | $ | (14,890 | ) | $ | (28,148 | ) | $ | (30,559 | ) | |||
| Reconciliation from Net Loss to Adjusted EBITDA: | |||||||||||||||
| Net loss | $ | (25,737 | ) | $ | (21,999 | ) | $ | (50,884 | ) | $ | (92,025 | ) | |||
| Depreciation and amortization | 8,301 | 7,093 | 16,019 | 14,170 | |||||||||||
| Impairment and write-off of intangible assets | – | 574 | – | 574 | |||||||||||
| Interest income | (655 | ) | (165 | ) | (875 | ) | (297 | ) | |||||||
| Interest expense | 5,075 | 5,086 | 10,052 | 10,111 | |||||||||||
| Provision for income taxes | 69 | 133 | 138 | 201 | |||||||||||
| Stock-based compensation expense | 8,258 | 1,105 | 15,049 | 1,952 | |||||||||||
| Transaction and acquisition-related costs | 73 | 1,436 | 277 | 3,046 | |||||||||||
| Change in fair value of derivative instrument | – | 1,084 | – | 138 | |||||||||||
| Non-recurring items not indicative of ongoing operations | (65 | ) | 25 | (57 | ) | 50,050 | |||||||||
| Adjusted EBITDA | $ | (4,681 | ) | $ | (5,628 | ) | $ | (10,281 | ) | $ | (12,080 | ) | |||
| Reconciliation from Revenue Growth to Organic Revenue Growth: | |||||||||||||||
| Revenues | $ | 76,561 | $ | 58,754 | $ | 147,764 | $ | 113,968 | |||||||
| Less: Revenues from acquisitions (1) | (4,644 | ) | – | (8,148 | ) | – | |||||||||
| Organic revenues | $ | 71,917 | $ | 58,754 | $ | 139,616 | $ | 113,968 | |||||||
| Revenue growth | 30.3 | % | 29.7 | % | |||||||||||
| Organic revenue growth | 22.4 | % | 22.5 | % | |||||||||||
| (1) Acquisitions include FastPay and PayClearly, which were not in the prior year comparable periods. | |||||||||||||||