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Paymentus Holdings (PAY) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Aug 3, 2026

Source: earnings call transcript

Executive summary

Paymentus Holdings, Inc. Q2 FY26 — Record Revenue and Adjusted EBITDA Growth

Paymentus delivered a strong quarter, exceeding expectations with robust revenue and adjusted EBITDA growth driven by increased transactions and new client additions across diverse verticals. The company is strategically positioned with its AI-native Billeo suite, aiming to expand its market opportunity beyond traditional payments. Management expressed confidence in achieving its 2026 financial goals and long-term CAGR targets ahead of schedule, supported by strong bookings and backlog.

Highlights

5

  • Record revenue of $360.7 million, up 28.8% year-over-year.

  • Adjusted EBITDA grew 54% year-over-year to $48.8 million, with a 41.3% margin.

  • Generated $39 million in free cash flow.

  • Rule of 40 scale reached 68%, significantly better than 56% in the prior year period.

  • Full-year 2026 guidance for revenue, contribution profit, and adjusted EBITDA was raised, with adjusted EBITDA guidance increasing by approximately $11.5 million at the midpoint.

Concerns

2

  • AI disintermediation risk for billers and businesses

  • Payment delays due to customer dissatisfaction with billing experience

Guidance & targets

CategoryTargetConfidence
Q3 FY26 Revenue
$353 million to $363 million
high materiality
High
Q3 FY26 Contribution Profit
$112 million to $115 million
medium materiality
High
Q3 FY26 Adjusted EBITDA
$40 million to $45 million
high materiality
High
Full Year FY26 Revenue
$1.443 billion to $1.458 billion
high materiality
High
Full Year FY26 Contribution Profit
$460 million to $465 million
medium materiality
High
Full Year FY26 Adjusted EBITDA
$175 million to $185 million
high materiality
High
Full Year FY26 Non-GAAP Tax Rate
25%
low materiality
High
Full Year FY26 Rule of 40 Scale
59% to 60%
medium materiality
High

Product announcements

ProductTypeDetails
Billeo AI 360 intelligence enginelaunch
Billeo Agentic Service Suitelaunch
Intelligent data vault using Billeo AI 360 pipelinelaunch
Transactional billing and reconciliation engine (Billeo Commerce Suite)launch
BillWalletupdate

Risks & headwinds

AI disintermediation risk for billers and businesses Long-term

Discussed not quantified

Mitigation:Paymentus' Billeo AI infrastructure and Commerce Suite, patented BillWallet and Billeo, and expertise in data security and sovereignty.

Payment delays due to customer dissatisfaction with billing experience Ongoing

Hundreds of billions of dollars in annual recurring revenue exposed

Mitigation:Paymentus' mission to close the satisfaction gap through improved billing and payment experiences, leveraging its platform and AI capabilities.

What to watch in Q3 FY26

Q3 FY26 Revenue Growth

Q3 FY26
Current Q2 FY26 revenue growth: 28.8%
Target 15.2% to 16.8% YoY growth

Why it matters

Verifying if the company meets its Q3 revenue guidance, which implies a deceleration from Q2, will indicate the impact of new customer onboarding and seasonal trends.

For the third quarter 2026, we expect revenues to be in the range of $353 million to $363 million, representing 15.2% year-over-year growth at the midpoint and 16.8% at the high end.

Find out whether PAY delivers this. Inve re-checks your case every morning.

Q&A highlights

What are the key drivers behind the accelerated contribution profit dollar growth, and are there specific verticals contributing most? Also, how is user enrollment for the AI product suite progressing, when will it impact revenue, and will it require significant investment?

Contribution profit growth is broad-based across all biller sizes and verticals, driven by strong bookings from new, highly profitable customers. User enrollment for BillWallet is going well, with more updates provided annually. The company aims to be a prudent operator, using its network to distribute innovations additively to margins and revenue. Revenue impact from AI products is expected in the next few years, built with existing investments.

“Our goal remains to be a very prudent operator of the business. We want to make sure that we are able to consistently deliver growth while also delivering incremental margins.”

asked by Madison Suhr · answered by Sanjay Kalra

2 min read 5 chapters

Detailed narrative

Strategic Positioning in the AI Economy

Paymentus is leveraging its Billeo AI-native service commerce suite to become a premium AI and software company, addressing client concerns about AI disintermediation risk. The company anticipates clients will rely on Paymentus for AI infrastructure and data security needs, building on its patented BillWallet, Billeo, and other AI patents.

Examples include Billeo AI 360 intelligence engine replacing internal BI tools, Billeo Agentic Service Suite augmenting human service centers, and an intelligent data vault for client data.

Customer Experience and Payment Journey Importance

A recent study with PYMNTS Intelligence highlighted that customers view the billing experience as the new brand experience, significantly impacting loyalty and payment behaviors. Dissatisfaction with billing can lead to payment delays, exposing hundreds of billions of dollars in annual recurring revenue to risk.

The study also found that younger customers, a fast-growing and long-tenured segment, are the most dissatisfied, underscoring the critical need for improved billing and payment experiences to secure future loyalty and cash flows.

Strong Bookings and Backlog Trends

Paymentus experienced strong bookings in Q2 FY26, particularly in the large enterprise segment across multiple verticals, resulting in a substantial exit backlog. This backlog includes a diverse mix of small, mid-sized, and large enterprise customers, providing increased visibility for the remainder of 2026 and into 2027. The company's implementation timelines are also improving, leading to faster onboarding of new clients.

Operating Leverage and Profitability Focus

The company demonstrated significant operating leverage, with adjusted EBITDA growing 54% year-over-year and an incremental adjusted EBITDA margin of approximately 70%. This performance is driven by economies of scale and the ability to attract large enterprise customers, where volume discounts are often offset by strong incremental adjusted EBITDA. Management maintains a focus on profitability and can recalibrate OpEx spending to achieve desired adjusted EBITDA levels.

Long-Term Growth Outperformance

Paymentus is significantly ahead of its long-term CAGR model of 20% top-line and 25% adjusted EBITDA growth. The company has achieved a decade's worth of compounded annual growth three years ahead of schedule. The top end of the revised 2026 guidance implies 21.9% revenue growth and 34.6% adjusted EBITDA growth over 2025, far exceeding the CAGR model targets and outpacing many software and SaaS companies.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.