AVDX Earning Date, Transcript Summary & Report

Strong Q4 Financial Performance: Our fourth quarter 2024 results exceeded implied expectations across all of our core financial metrics.

Share Repurchase Confidence: Notably, we repurchased an additional $25 million worth of AvidXchange shares during the fourth quarter of 2024, underscoring the long-term confidence we have in our business.

Margin Expansion Highlights: We saw more than 4 percentage points of gross margin expansion over 2023 alone and greater than 10 percentage points of EBITDA margin expansion over 2023.

Positive Growth in Key Verticals: In 2024, we saw pockets of modest, but positive growth in the top-of-funnel across three of our largest verticals by revenue, transactions and total payment volume.

Buyer Customer Logo Growth: The growth in the buyer customer logo count for 2024 was better on a relative basis, up over 6%, driven by higher quality opportunity lead generation across our ERP partner related channels.

Fourth Quarter Revenue Increase: Revenue in the fourth quarter was approximately $115 million, up roughly 11% year-over-year.

Record Gross Margin Achievement: Non-GAAP gross margin hit a milestone coming in at almost 75%, up 350 basis points over last year.

Adjusted EBITDA Milestone Achieved: Adjusted EBITDA margins on the quarter reached almost 23%, hitting the milestone we committed to during our Investor Day.

Transaction Yield Increase: Our important transaction yield metric was up more than 6% to reach $5.80 per transaction.

Partnership Engagement Momentum: We believe that the momentum of our partnerships is building, as evidenced by the doubling in customer engagement lead flow with AppFolio and tripling with M3.

Payment File Penetration Strategy: We anticipate increasing our penetration and share of our buyers' customers' payment files in several ways, while capturing greater transaction economics with AvidPay 2.0.

Customer Enrollment Surge: The rolling three-month volume of dollars accelerated in the number of new payment accelerator customer enrollments has already more than doubled.

Virtual Card Automation Expansion: We expect to get over 80% virtual card automation over the next two years, which should continue our gross margin expansion towards 80%.

Strong Cash Position: We ended the year with a strong corporate cash position of $389.3 million of cash and marketable securities against an outstanding note payable for $9.1 million.

Decline in Customer Engagement: The overall top-of-funnel opportunities were down roughly 2%, indicating a decline in customer engagement and buyer logo growth metrics.

Customer Acquisition Slowdown: The growth in buyer customer logo count for 2024 was lower at 6% compared to 8.1% in 2023, reflecting a slowdown in customer acquisition despite a positive trend in lead generation.

Macroeconomic Impact on Performance: The macroeconomic environment remains mixed, impacting the company's performance and creating uncertainty for future growth.

Interest Revenue Decline: The company anticipates a decrease in interest revenues from customer funds in 2025, projecting $44 million compared to $49.7 million earned in 2024.

Decline in Political Media Revenue: Political media revenue is expected to be negligible in 2025, down from $6.6 million in 2024, indicating a loss of a revenue stream.

Operating Expenses Increase: Operating expenses increased by 3.7% in Q4 2024 compared to Q4 2023, which could indicate rising costs that may affect profitability.

Financial Performance Volatility: Despite achieving a GAAP net income of $4.7 million, the company had a net loss of $4.5 million in the same quarter last year, highlighting the volatility in financial performance.

Cautious Growth Outlook: The cautious approach reflected in the 2025 guidance suggests uncertainty in the macroeconomic environment, which may hinder growth prospects.