Paymentus Raises 2026 Guidance as Q3 Adjusted EBITDA Jumps 39%

Paymentus Holdings Inc. (NYSE: PAY) reported record third-quarter revenue, contribution profit and adjusted EBITDA, while raising its full-year 2026 guidance for all three measures. Profitability grew faster than revenue as transaction volume increased and non-GAAP operating expenses rose at a more moderate pace.

Revenue for the quarter ended Sept. 30 increased 19.8% year over year to $372.2 million. Transactions climbed 20.1% to 219.0 million, from 182.3 million a year earlier.

Contribution profit, a non-GAAP measure, rose 20.6% to $118.5 million, with contribution profit margin edging up to 31.8% from 31.6%. Adjusted gross profit increased 23.1% to $99.8 million, while non-GAAP operating expenses grew 10.2% to $53.0 million.

Adjusted EBITDA advanced 38.6% to $49.7 million. Adjusted EBITDA margin, calculated as a percentage of contribution profit, expanded to a record 41.9% from 36.5% in the prior-year quarter. GAAP net income increased to $27.5 million from $17.7 million, while diluted GAAP earnings per share rose to $0.21 from $0.14.

On a non-GAAP basis, net income grew 46.7% to $33.1 million and diluted earnings per share increased 47.1% to $0.25. The company’s non-GAAP earnings calculation assumes a 25% tax rate.

Cash flow and liquidity

Paymentus generated $34.0 million in free cash flow, up 32.1% from $25.7 million a year earlier, though down from $39.0 million in the second quarter. Cash and restricted cash totaled $409.6 million at quarter-end, an increase of $29.9 million from the prior quarter. Working capital rose to $423.2 million, and days sales outstanding remained at 27. The company said it had no debt.

Demand and product development

Paymentus said it exited the quarter with a strong backlog, pipeline and level of bookings. The company reported demand across utilities, insurance, government, property management, telecommunications, banking and education. It also signed channel partnerships in utilities and mortgage services and implemented customers across several verticals, including healthcare.

The company signed its first sizeable interchange monetization agreement during the quarter. Users of BillWallet, its bill-management and payment product, doubled over the previous six months to more than 200,000, although management characterized the product as still being in its early stages.

Paymentus said nearly one in three U.S. households and business users use its platform to pay bills. Management also identified BillWallet and Billeo as important elements of its product strategy and pointed to a potential path to $2 billion in combined revenue and backlog within 18 to 24 months. That objective is forward-looking and was not presented as formal financial guidance.

Higher full-year guidance

For the fourth quarter, Paymentus expects revenue of $373 million to $378 million, contribution profit of $120 million to $122 million and adjusted EBITDA of $45 million to $50 million.

The company raised its full-year 2026 revenue forecast to between $1.464 billion and $1.469 billion, compared with its previous range of $1.443 billion to $1.458 billion. Full-year contribution profit is now expected to be $466 million to $468 million, versus $460 million to $465 million previously.

Paymentus also increased its adjusted EBITDA guidance to $186 million to $191 million from the prior range of $175 million to $185 million. At the new guidance midpoints, the increases were 1.1% for revenue, 1.0% for contribution profit and 4.7% for adjusted EBITDA.

The company did not provide GAAP reconciliations for its forward-looking non-GAAP measures because certain adjustments cannot be reasonably estimated and could be significant. Paymentus also cautioned that its outlook depends on factors including demand momentum, client implementation timing, expense management, hiring and investment plans, and the development of newer products. Actual results could differ materially from management’s expectations.