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 first quarter ended March 31, 2023.
“We are off to a strong start in the new year against what
continues to be a volatile macro backdrop. This quarter marks our
seventh consecutive quarter that we have outperformed our financial
results relative to internal expectations. This quarter was
particularly noteworthy as we delivered our first adjusted EBITDA
profitable quarter as a public company and substantially ahead of
expectations, thereby demonstrating our operational strategies and
discipline. Furthermore, our strong execution around revenue, gross
margin expansion and expense leverage during the quarter also
leaves us cautiously optimistic about our revised full year
business outlook. As our middle-market customers continue to
navigate the current challenges of the macro-economic environment,
we believe our purpose-built AP automation and payments value
proposition provides our customers with a powerful lever for
quantifiable cost reduction and cash flow optimization,” said
Michael Praeger, CEO & Co-Founder of AvidXchange.
First Quarter
2023 Financial
Highlights:
- Total revenue was $86.8 million, an
increase of 21.9% year-over-year, compared with $71.2 million in
the first quarter of 2022.
- GAAP net loss was $(16.0) million,
compared with a GAAP net loss of $(25.1) million in the first
quarter of 2022.
- Non-GAAP net loss was $(3.4) million,
compared with a Non-GAAP net loss of $(14.6) million in the first
quarter of 2022.
- GAAP gross profit was $52.1 million, or
60.0% of total revenue, compared with $39.1 million, or 54.9% of
revenue in the first quarter of 2022.
- Non-GAAP gross profit was $58.4
million, or 67.3% of total revenue, compared with $44.4 million, or
62.3% of revenue in the first quarter of 2022.
- Adjusted EBITDA was $0.4 million
compared with $(5.6) million in the first quarter of 2022.
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"
First Quarter
2023 Key Business Metrics
and Highlights:
- Total transactions processed in the
first quarter of 2023 were 18.3 million, an increase of 8.3% from
16.9 million in the first quarter of 2022.
- Total payment volume in the first
quarter of 2023 was $17.7 billion, an increase of 16.7% from $15.2
billion in the first quarter of 2022.
- Transaction yield in the first quarter
of 2023 was $4.76, an increase of 12.5% from $4.23 in the first
quarter of 2022.
Full Year
2023 Financial
Outlook
As of May 3, 2023, AvidXchange anticipates its Full Year 2023
revenue and adjusted EBITDA to be in the following ranges (in
millions):
|
CurrentFY 2023
Guidance |
PreviousFY 2023
Guidance |
Revenue |
$363.0 - $368.0 |
$359.0 - $366.0 |
Adjusted EBITDA(1&2) |
$2.0 - $4.0 |
$0 - $3.5 |
|
|
|
(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.
(2) The non-GAAP adjusted
EBITDA guidance does not include non-recurring costs that
AvidXchange has incurred or expects to incur relating to its
response to a cyber security incident that AvidXchange detected in
early April 2023 as part of its security monitoring protocols. In
response to the incident, AvidXchange launched an investigation
with the support of leading cybersecurity experts, reached out to
law enforcement and has taken and will continue to take actions to
implement additional safeguards. The incident has not had a
material impact on the ability of AvidXchange’s customers to use
its products and services. The investigation, which is ongoing, has
so far revealed that the incident affected certain of AvidXchange’s
systems and that some data from these systems was exfiltrated.
AvidXchange posted notice of the event on its website and is
committed to notifying any impacted customers. AvidXchange
maintains cyber insurance and will likely seek reimbursement for
certain expenses incurred in connection with this event although
the extent to which its insurance will cover such expenses remains
uncertain.
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 first quarter 2023 financial
results during a teleconference today, May 3, 2023, at 10:00 AM 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
8,800 businesses and it has made payments to more than 965,000
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 StatementsThis 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 2023, statements related to the significance of our string of
quarterly results having beaten expectations, the agility of our
organizational structure, the speed of digital transformation in
our addressable markets, the acceleration of our path to breakeven,
our response to the cyber security incident detected in April 2023
and its impact on our future results, 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, Quarterly Report on Form 10-Q to be filed for the
period ended March 31, 2023, 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
MetricsTo 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 (benefit), 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, acquisition-related effects on income tax, and
charitable contributions of common stock. Non-GAAP income tax
expense is calculated using our blended statutory rate except in
periods of non-GAAP net loss when it is based on our GAAP income
tax expense. In each case, non-GAAP income tax expense excludes the
effects of acquisitions in the period on tax expense.
In the quarter ended March 31, 2023, we revised our definition
for Non-GAAP Net Loss to include tax expense adjusted for
acquisition-related effects on income tax. This change did not
materially change Non-GAAP Net Loss reported in previous periods.
The Non-GAAP Net Loss reported for the quarter ended March 31, 2022
has been revised to reflect the new definition.
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 KumarSkumar1@avidxchange.com813.760.2309
AvidXchange Holdings, Inc. |
Unaudited Consolidated Statements of
Operations |
(in thousands, except share and per share data) |
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
Revenues |
|
$ |
86,822 |
|
|
$ |
71,203 |
|
Cost of revenues (exclusive of depreciation and amortization
expense) |
|
|
29,473 |
|
|
|
27,807 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
20,135 |
|
|
|
17,239 |
|
Research and development |
|
|
23,122 |
|
|
|
20,072 |
|
General and administrative |
|
|
22,627 |
|
|
|
18,688 |
|
Depreciation and amortization |
|
|
8,586 |
|
|
|
7,718 |
|
Total operating expenses |
|
|
74,470 |
|
|
|
63,717 |
|
Loss from operations |
|
|
(17,121 |
) |
|
|
(20,321 |
) |
Other income (expense) |
|
|
|
|
|
|
|
|
Interest income |
|
|
4,516 |
|
|
|
220 |
|
Interest expense |
|
|
(3,315 |
) |
|
|
(4,977 |
) |
Other income (expense) |
|
|
1,201 |
|
|
|
(4,757 |
) |
Loss before income taxes |
|
|
(15,920 |
) |
|
|
(25,078 |
) |
Income tax expense |
|
|
70 |
|
|
|
69 |
|
Net loss |
|
$ |
(15,990 |
) |
|
$ |
(25,147 |
) |
Net loss per share attributable to common stockholders, basic and
diluted |
|
$ |
(0.08 |
) |
|
$ |
(0.13 |
) |
Weighted average number of common shares used to compute net loss
per share attributable to common stockholders, basic and
diluted |
|
|
199,900,920 |
|
|
|
197,017,555 |
|
AvidXchange Holdings, Inc. |
Unaudited Consolidated Balance
Sheets |
(in thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
As of March 31, |
|
|
As of December 31, |
|
|
|
2023 |
|
|
2022 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
368,190 |
|
|
$ |
350,563 |
|
Restricted funds held for customers |
|
|
1,051,171 |
|
|
|
1,283,824 |
|
Marketable securities |
|
|
63,543 |
|
|
|
110,986 |
|
Accounts receivable, net of allowances of $3,343 and $3,123,
respectively |
|
|
43,148 |
|
|
|
39,668 |
|
Supplier advances receivable, net of allowances of $1,575 and
$1,872, respectively |
|
|
9,997 |
|
|
|
10,016 |
|
Prepaid expenses and other current assets |
|
|
15,118 |
|
|
|
12,561 |
|
Total current assets |
|
|
1,551,167 |
|
|
|
1,807,618 |
|
Property and equipment, net |
|
|
102,892 |
|
|
|
103,892 |
|
Operating lease right-of-use assets |
|
|
2,444 |
|
|
|
2,343 |
|
Deferred customer origination costs, net |
|
|
28,079 |
|
|
|
28,284 |
|
Goodwill |
|
|
165,921 |
|
|
|
165,921 |
|
Intangible assets, net |
|
|
95,364 |
|
|
|
98,749 |
|
Other noncurrent assets and deposits |
|
|
4,391 |
|
|
|
5,189 |
|
Total assets |
|
$ |
1,950,258 |
|
|
$ |
2,211,996 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
13,269 |
|
|
$ |
13,453 |
|
Accrued expenses |
|
|
52,059 |
|
|
|
73,535 |
|
Payment service obligations |
|
|
1,051,171 |
|
|
|
1,283,824 |
|
Deferred revenue |
|
|
11,802 |
|
|
|
12,063 |
|
Current maturities of lease obligations under finance leases |
|
|
384 |
|
|
|
477 |
|
Current maturities of lease obligations under operating leases |
|
|
1,639 |
|
|
|
1,380 |
|
Current maturities of long-term debt |
|
|
6,425 |
|
|
|
6,425 |
|
Total current liabilities |
|
|
1,136,749 |
|
|
|
1,391,157 |
|
Long-term liabilities |
|
|
|
|
|
|
|
|
Deferred revenue, less current |
|
|
17,487 |
|
|
|
17,487 |
|
Contingent consideration, less current portion |
|
|
70 |
|
|
|
70 |
|
Obligations under finance leases, less current maturities |
|
|
62,107 |
|
|
|
61,974 |
|
Obligations under operating leases, less current maturities |
|
|
4,384 |
|
|
|
4,657 |
|
Long-term debt |
|
|
75,574 |
|
|
|
75,912 |
|
Other long-term liabilities |
|
|
3,135 |
|
|
|
3,295 |
|
Total liabilities |
|
|
1,299,506 |
|
|
|
1,554,552 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value; 50,000,000 shares authorized, no
shares issued and outstanding as of March 31, 2023 and December 31,
2022 |
|
|
- |
|
|
|
- |
|
Common stock, $0.001 par value; 1,600,000,000 shares authorized as
of March 31, 2023 and December 31, 2022; 201,028,992 and
199,433,998 shares issued and outstanding as of March 31, 2023 and
December 31, 2022, respectively |
|
|
201 |
|
|
|
199 |
|
Additional paid-in capital |
|
|
1,641,376 |
|
|
|
1,632,080 |
|
Accumulated deficit |
|
|
(990,825 |
) |
|
|
(974,835 |
) |
Total stockholders' equity |
|
|
650,752 |
|
|
|
657,444 |
|
Total liabilities and stockholders' equity |
|
$ |
1,950,258 |
|
|
$ |
2,211,996 |
|
AvidXchange Holdings, Inc. |
Unaudited Consolidated Statements of Cash
Flows |
(in thousands) |
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(15,990 |
) |
|
$ |
(25,147 |
) |
Adjustments to reconcile net loss to net cash used by operating
activities |
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
|
8,586 |
|
|
|
7,718 |
|
Amortization of deferred financing costs |
|
|
110 |
|
|
|
339 |
|
Provision for credit losses |
|
|
550 |
|
|
|
1,073 |
|
Stock-based compensation |
|
|
8,931 |
|
|
|
6,791 |
|
Accrued interest |
|
|
503 |
|
|
|
599 |
|
Loss on fixed asset disposal |
|
|
- |
|
|
|
26 |
|
Accretion of investments held to maturity |
|
|
(1,238 |
) |
|
|
(60 |
) |
Deferred income taxes |
|
|
53 |
|
|
|
54 |
|
Changes in operating assets and liabilities |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(3,702 |
) |
|
|
(3,537 |
) |
Prepaid expenses and other current assets |
|
|
(2,556 |
) |
|
|
(3,601 |
) |
Other noncurrent assets |
|
|
1,205 |
|
|
|
(59 |
) |
Deferred customer origination costs |
|
|
205 |
|
|
|
773 |
|
Accounts payable |
|
|
(23 |
) |
|
|
(872 |
) |
Deferred revenue |
|
|
(261 |
) |
|
|
(525 |
) |
Accrued expenses and other liabilities |
|
|
(21,887 |
) |
|
|
(8,835 |
) |
Operating lease liabilities |
|
|
(115 |
) |
|
|
(51 |
) |
Total adjustments |
|
|
(9,639 |
) |
|
|
(167 |
) |
Net cash used in operating activities |
|
|
(25,629 |
) |
|
|
(25,314 |
) |
Cash flows from investing activities |
|
|
|
|
|
|
|
|
Purchase of marketable securities held to maturity |
|
|
(62,999 |
) |
|
|
(228,595 |
) |
Proceeds from maturity of marketable securities held to
maturity |
|
|
111,680 |
|
|
|
- |
|
Purchases of equipment |
|
|
(332 |
) |
|
|
(967 |
) |
Purchases of real estate |
|
|
- |
|
|
|
(767 |
) |
Purchases of intangible assets |
|
|
(3,855 |
) |
|
|
(11,309 |
) |
Supplier advances, net |
|
|
(310 |
) |
|
|
(2,048 |
) |
Net cash provided by (used in) investing activities |
|
|
44,184 |
|
|
|
(243,686 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Proceeds from the issuance of long-term debt |
|
|
- |
|
|
|
1,170 |
|
Repayments of long-term debt |
|
|
(406 |
) |
|
|
- |
|
Principal payments on finance leases |
|
|
(165 |
) |
|
|
(237 |
) |
Proceeds from issuance of common stock |
|
|
366 |
|
|
|
173 |
|
Debt issuance costs |
|
|
(624 |
) |
|
|
- |
|
Payment of acquisition-related liability |
|
|
(100 |
) |
|
|
- |
|
Payment service obligations |
|
|
(232,652 |
) |
|
|
(310,371 |
) |
Net cash used in financing activities |
|
|
(233,581 |
) |
|
|
(309,265 |
) |
Net (decrease) increase in cash, cash equivalents, and restricted
funds held for customers |
|
|
(215,026 |
) |
|
|
(578,265 |
) |
Cash, cash equivalents, and restricted funds held for
customers |
|
|
|
|
|
|
|
|
Cash, cash equivalents, and restricted funds held for customers,
beginning of year |
|
|
1,634,387 |
|
|
|
1,805,163 |
|
Cash, cash equivalents, and restricted funds held for customers,
end of period |
|
$ |
1,419,361 |
|
|
$ |
1,226,898 |
|
Supplementary information of noncash investing and
financing activities |
|
|
|
|
|
|
|
|
Right-of-use assets obtained in exchange for new finance lease
obligations |
|
$ |
- |
|
|
$ |
57 |
|
Right-of-use assets obtained in exchange for new operating lease
obligations |
|
|
362 |
|
|
|
2,831 |
|
Property and equipment purchases in accounts payable and accrued
expenses |
|
|
14 |
|
|
|
4 |
|
Interest paid on notes payable |
|
|
1,255 |
|
|
|
2,612 |
|
Interest paid on finance leases |
|
|
1,448 |
|
|
|
1,421 |
|
AvidXchange Holdings, Inc. |
Unaudited Reconciliation of GAAP to Non-GAAP
Measures |
(in thousands) |
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
Reconciliation from Revenue to Non-GAAP Gross Profit and
Non-GAAP Gross Margin: |
|
|
|
|
|
|
|
|
Total revenues |
|
$ |
86,822 |
|
|
$ |
71,203 |
|
Expenses: |
|
|
|
|
|
|
|
|
Cost of revenues (exclusive of depreciation and amortization
expense) |
|
|
(29,473 |
) |
|
|
(27,807 |
) |
Depreciation and amortization expense |
|
|
(5,219 |
) |
|
|
(4,306 |
) |
GAAP Gross profit |
|
$ |
52,130 |
|
|
$ |
39,090 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
1,064 |
|
|
|
959 |
|
Depreciation and amortization expense |
|
|
5,219 |
|
|
|
4,306 |
|
Non-GAAP gross profit |
|
$ |
58,413 |
|
|
$ |
44,355 |
|
GAAP Gross margin |
|
|
60.0 |
% |
|
|
54.9 |
% |
Non-GAAP gross margin |
|
|
67.3 |
% |
|
|
62.3 |
% |
|
|
|
|
|
|
|
|
|
Reconciliation from Net Loss to Non-GAAP Net
Loss: |
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(15,990 |
) |
|
$ |
(25,147 |
) |
Exclude: Provision for income taxes |
|
|
70 |
|
|
|
69 |
|
Loss before taxes |
|
|
(15,920 |
) |
|
|
(25,078 |
) |
Amortization of acquired intangible assets |
|
|
3,623 |
|
|
|
3,593 |
|
Stock-based compensation expense |
|
|
8,931 |
|
|
|
6,791 |
|
Transaction and acquisition-related costs |
|
|
(7 |
) |
|
|
204 |
|
Non-recurring items not indicative of ongoing operations |
|
|
9 |
|
|
|
8 |
|
Total net adjustments |
|
|
12,556 |
|
|
|
10,596 |
|
Non-GAAP loss before taxes |
|
|
(3,364 |
) |
|
|
(14,482 |
) |
Non-GAAP tax expense (1) |
|
|
70 |
|
|
|
69 |
|
Non-GAAP net loss |
|
$ |
(3,434 |
) |
|
$ |
(14,551 |
) |
|
|
|
|
|
|
|
|
|
Reconciliation from Net Loss to Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(15,990 |
) |
|
$ |
(25,147 |
) |
Depreciation and amortization |
|
|
8,586 |
|
|
|
7,718 |
|
Interest income |
|
|
(4,516 |
) |
|
|
(220 |
) |
Interest expense |
|
|
3,315 |
|
|
|
4,977 |
|
Provision for income taxes |
|
|
70 |
|
|
|
69 |
|
Stock-based compensation expense |
|
|
8,931 |
|
|
|
6,791 |
|
Transaction and acquisition-related costs |
|
|
(7 |
) |
|
|
204 |
|
Non-recurring items not indicative of ongoing operations |
|
|
9 |
|
|
|
8 |
|
Adjusted EBITDA |
|
$ |
398 |
|
|
$ |
(5,600 |
) |
|
|
|
|
|
|
|
|
|
(1)
Non-GAAP tax expense is based on GAAP tax expense as the Company is
in a loss position under both GAAP and non-GAAP. |
|
|
|
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