Executive Summary

Q3 2024 delivered double-digit top-line growth and notable margin expansion: revenue $112.8M (+14.3% YoY) with GAAP gross margin 67.7% (+450 bps YoY) and non-GAAP gross margin 74.5% (+450 bps YoY) while adjusted EBITDA reached $23.3M and approximately 20.7% margin .
Management raised FY24 adjusted EBITDA guidance to $78–$79M and introduced non-GAAP diluted EPS guidance of $0.24–$0.25; revenue guidance was nudged at the low end ($437–$439M) with float up slightly and political down materially versus prior .
Transaction metrics improved: transactions 20.2M (+5.2% YoY), TPV $21.5B (+9.4% YoY), transaction yield $5.59 (+8.5% YoY), aided by unit cost efficiencies and monetization initiatives; Q3 included $12.7M interest income .
Narrative catalysts: guidance raise and margin trajectory toward long-term targets, accelerating buyer adds via ERP and bank partnerships, and scaling new products (Payment Accelerator 2.0, Pay platform, Spend Management) as macro uncertainty and election-related headwinds normalize .

What Went Well and What Went Wrong

What Went Well

Non-GAAP gross margin reached 74.5% and adjusted EBITDA margin ~20.7%, at or above Investor Day ranges; management attributed gains to automation, AI, sourcing and standardization, plus OpEx discipline .
Strong revenue growth and yield: revenue +14.3% YoY to $112.8M; transaction yield rose to $5.59 (+8.5% YoY), reflecting monetization and mix; adjusted EBITDA doubled YoY to $23.3M .
Strategic partnerships and go-to-market quality: improved close rates and shorter sales cycles from partner-led demand generation (e.g., AppFolio, M3), and new reseller bank partnerships (Cadence, Orange Bank & Trust) to broaden distribution .
Quote: “Our continued focus on automation, AI, sourcing and standardization… led to 100%+ year-over-year increase in adjusted EBITDA profitability” – Michael Praeger .

What Went Wrong

Political media revenue outlook reduced to ~$6.5M (from $9.0M), driven by mix shifts toward digital channels favoring lower-monitized ACH modalities; float expected to face rate-cut headwinds in 2025 .
Supplier acceptance yield dynamics remain mixed: while overall monetization is solid, suppliers choose varied payment modalities at different price points, moderating PPV yield sequentially earlier in the year; focus shifts to transaction yield as the “north star” .
Macro still choppy: total transaction retention remains sub-100%, with discretionary categories (advertising, professional services, travel, capital projects) weighing on volumes; Q4 implied growth 9–11% versus Q3’s stronger print .

Financial Results

Consolidated P&L and Margins (Q1–Q3 2024)

Metric	Q1 2024	Q2 2024	Q3 2024
Revenue ($USD Millions)	$105.6	$105.1	$112.8
GAAP Gross Margin (%)	65.5%	65.3%	67.7%
Non-GAAP Gross Margin (%)	72.4%	72.6%	74.5%
GAAP Net Income ($USD Millions)	$(1.0)	$0.4	$4.0
Adjusted EBITDA ($USD Millions)	$17.7	$17.5	$23.3
Adjusted EBITDA Margin (%)	—	~16.6%	~20.7%
Interest Income ($USD Millions)	$13.1	$11.8	$12.7
GAAP Diluted EPS ($)	$(0.00)	$0.00	$0.02
Non-GAAP Diluted EPS ($)	—	$0.05	$0.07

Notes: Q3’23 had a favorable out-of-period adjustment of $1.5M impacting YoY comparability in revenue, gross profit, adjusted EBITDA and net income .

Segment Revenue (Software vs Payments)

Metric	Q2 2024	Q3 2024
Software Revenue ($USD Millions)	$29.9	$30.7
Payment Revenue ($USD Millions)	$74.2	$80.7
Political Media Revenue ($USD Millions)	~$0.8	~$2.0
Interest Income within Payments ($USD Millions)	$11.8	$12.7

Operating KPIs

KPI	Q1 2024	Q2 2024	Q3 2024
Total Transactions (Millions)	19.3	19.7	20.2
Total Payment Volume ($USD Billions)	$19.9	$20.6	$21.5
Transaction Yield ($/Transaction)	$5.47	$5.33	$5.59

Estimates vs Results

Metric	Q3 2024 Actual	S&P Global Consensus (Q3 2024)
Revenue ($USD Millions)	$112.8	N/A†
Primary EPS (GAAP or Non-GAAP as stated) ($)	GAAP $0.02; Non-GAAP $0.07	N/A†

† S&P Global consensus was unavailable at the time of request due to API limits.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	FY 2024	$436.0–$439.0	$437.0–$439.0	Maintained/Nudged higher low end
Adjusted EBITDA ($USD Millions)	FY 2024	$73.0–$75.0	$78.0–$79.0	Raised
Non-GAAP Diluted EPS ($)	FY 2024	—	$0.24–$0.25	New
Interest Revenue ($USD Millions)	FY 2024 assumption	~$49.0	~$50.0	Raised
Political Revenue ($USD Millions)	FY 2024 assumption	~$9.0	~$6.5	Lowered

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
AI/Automation & Unit Cost	Q1/Q2: AI aiding gross margin expansion; unit cost reductions; non-GAAP GM 72.4%–72.6% .	Non-GAAP GM 74.5%; continued automation, AI, sourcing, standardization driving margins .	Improving
Transaction Retention & Macro	Q2: Retention around ~100% amid discretionary spend moderation; shorter sales cycles, strong close rates .	Positive inflection noted but still sub-100%; broad-based improvement; macro remains choppy .	Stabilizing (early signs)
Supplier Acceptance & Yield	Q2: Mix shifts across payment modalities moderating PPV yield; focus on total transaction yield .	Suppliers choose modalities at varying price points; overall yield solid; emphasis on transaction yield .	Mixed
ERP & Bank Partnerships	Q2: Buildium & Workamajig integrations; AppFolio/M3 ramping .	Added reseller bank partners (Cadence, Orange Bank & Trust); partner-led demand gen yields higher-quality leads .	Expanding
Product Innovation Roadmap	Q2: Payment Accelerator 2.0, Spend Management sequencing; payment automation initiatives .	Payment Accelerator 2.0 leading in ’25; Pay platform iterative; Spend Management rolling to initial customers over next 90 days .	On track
Political Media & Mix	Q2: FY24 ~$9M expectation .	FY24 ~$6.5M; mix shifting to digital channels (lower monetization) .	Deteriorating (mix)
2025 Put/Take (Float & Politics)	—	No political contribution in 2025; potential float headwinds from Fed cuts .	Headwinds ahead

Management Commentary

CEO: “We delivered solid third quarter 2024 results… non-GAAP gross margin and adjusted EBITDA margin came in at 74.5% and 20.7%… net cash from operating activities was up more than four-fold to $24.6 million… launching and scaling new products such as Payment 2.0 Platform, Payment Accelerator 2.0, Spend Management” – Michael Praeger .
CFO: “Relative to the implied third quarter… revenues came in above our implied expectations… we delivered our second GAAP net income quarter since going public in 2021” – Joel Wilhite .
CFO on long-term profitability: “We think this business is 80% gross margin business with 30% EBITDA margin… you can see the operating expense leverage in addition to the gross margin expansion” .

Q&A Highlights

Yield and supplier acceptance: Management emphasized focusing on total transaction yield over PPV yield; suppliers select payment modalities balancing speed, data, automation, and price; overall yield and revenue results were solid .
Macro and retention: Transaction retention improved modestly but remains sub-100%; improvement was broad-based across verticals; cautious buyer spending persists .
2025 drivers: No political media revenue next year and likely float headwinds from rate cuts; return to net transaction expansion (104–105%) needed to support growth .
Guidance cadence and seasonality: FY guide essentially takes the Q3 beat; Q3-to-Q4 shift reflects consistent seasonality with prior years; implied Q4 growth 9–11% .
Partnerships: Shift from white-label to reseller bank model for easier execution; 20+ reseller banks now; new partners broaden access to ~50,000 commercial customers .

Estimates Context

S&P Global consensus estimates for Q3 2024 revenue and EPS were unavailable at the time of analysis due to API limits (no consensus values retrieved). Consequently, explicit beat/miss vs Street cannot be quantified. Management commentary suggests operational beat versus internal implied expectations (revenue and adjusted EBITDA) excluding float and political contributions .

Key Takeaways for Investors

Margin trajectory ahead of plan: Non-GAAP GM at 74.5% and adjusted EBITDA margin ~20.7% signal operating leverage and durable unit cost improvements, supporting the path toward 80%/30% long-term targets .
Guidance quality improved: FY24 adjusted EBITDA raised to $78–$79M and non-GAAP EPS introduced ($0.24–$0.25); modest revenue nudge reflects macro caution but operational execution confidence .
Monetization resilient amid mix shifts: Transaction yield up 8.5% YoY; suppliers adopt diverse payment modalities—management’s multi-modality strategy supports monetization while enhancing supplier stickiness .
Distribution expansion: ERP integrations (AppFolio, M3, Buildium, Workamajig) and reseller bank partnerships should accelerate qualified pipeline, shorten sales cycles, and add durable revenue streams into 2025 .
Near-term puts/takes: Q4 seasonality and continued macro caution temper sequential growth; 2025 faces political revenue reset and likely float headwinds on rate cuts—watch transaction retention returning to 104–105% expansion .
Product catalysts: Payment Accelerator 2.0 (scaled in 2025), iterative Pay platform, and Spend Management rollout over next 90 days can expand monetization and capture non-invoice spend over time .
Capital allocation: Active buyback ($25.1M in Q3) and strengthened credit facility enhance flexibility; corporate cash and marketable securities of $394.3M underscore balance sheet strength .

Citations: Q3 8-K press release and reconciliations ; Q3 earnings press release ; Q3 earnings call transcript ; Q2 press release/8-K/transcript for comparatives ; Q1 8-K press release and metrics .

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