Billtrust Announces Third Quarter 2022 Financial Results

November 7, 2022
  • Reports Q3 2022 software and payments segment revenue of $35.2 million, up 35% for the same period in 2021.

LAWRENCEVILLE, N.J.--(BUSINESS WIRE)--Nov. 7, 2022-- BTRS Holdings Inc. ("Billtrust" or "the Company") (NASDAQ: BTRS), a B2B accounts receivable automation and integrated payments leader, today announced financial results for its third quarter ended September 30, 2022.

"Our team again executed exceptionally well in a challenging environment, as evidenced by our strong 35.2% year-over-year software and payments segment revenue growth,” said Flint Lane, Founder and CEO of Billtrust. "With favorable secular trends intact and a crystal-clear value proposition for our accounts receivable and integrated payments solutions that supports our mission to digitize and streamline the Office of the CFO, we are confident that Billtrust is exceptionally well-positioned for the next phase of our growth.”

Third Quarter 2022 Summary

GAAP Metrics

  • Total revenue increased 24.2% year-over-year to $51.4 million, versus $41.4 million for the same period in 2021.
  • Software and payments segment revenue increased 35.2% year-over-year to $35.2 million, compared to $26.0 million for the same period in 2021.
  • Gross profit, excluding depreciation and amortization, increased 33.8% year-over-year to $31.3 million, compared to $23.4 million for the same period in 2021.
  • Gross margin, excluding depreciation and amortization expanded by 436 basis points to 60.8%, versus 56.5% for the same period in 2021, driven by improved operating leverage and an increasing mix of software and payments segment revenue.
  • Net loss was $21.2 million, compared to $11.2 million for the same period in 2021.

Key Operating and Non-GAAP* Metrics

  • Total Payment Volume (“TPV”), the dollar value of customer payment transactions that Billtrust processes on its platform during a particular period, increased by 34.9% year-over-year to $28.3 billion in Q3 2022, up from $21.0 billion for the same period in 2021.
  • Net revenue* increased 29.9% year-over-year to $42.5 million, up from $32.7 million for the same period in 2021.
  • Adjusted gross profit* increased 33.8% year-over-year to $31.8 million, compared to $23.8 million for the same period in 2021.
  • Adjusted gross margin* increased 219 basis points year-over-year to 74.9%, versus 72.7% for the same period in 2021.
  • Adjusted EBITDA* was $(1.5) million, compared to $(4.0) million for the same period in 2021.
  • Direct card revenue ("DCR")* was $6.5 million, compared to $4.2 million for the same period in 2021, as we continue to drive card payments penetration on our electronic payments processing platforms.
  • We exited the quarter with $145.9 million in cash, cash equivalents and marketable securities and no funded debt.

* Net revenue, adjusted gross profit, adjusted gross margin, adjusted EBITDA, and direct card revenue are Non-GAAP measures. An explanation of these measures and how they are calculated can be found under the heading “Non-GAAP Financial Measures” in the Company's Quarterly Report on Form 10-Q and in the attached reconciliations. Reconciliations of these Non-GAAP measures to the most directly comparable GAAP financial measures are included in the tables at the end of this press release. With respect to the Company's expectations under "Full Year 2022 Outlook" above, reconciliation of Non-GAAP adjusted gross profit, Non-GAAP adjusted gross margin, or Non-GAAP adjusted EBITDA to their comparable GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity, and low visibility with respect to certain excluded items, such as charges related to stock-based compensation expenses, changes in fair value of contingent consideration related to an acquisition, and related tax effects, including non-recurring income tax adjustments.

Proposed Transaction with EQT Private Equity

As previously announced on September 28, 2022, the Company entered into a merger agreement with the EQT X Fund (“EQT Private Equity”).

The transaction, which was approved by Billtrust’s Board of Directors, is expected to close in the fourth quarter of 2022 or first quarter of 2023, subject to customary closing conditions, including the approval of Billtrust’s stockholders, the expiration or termination of applicable waiting periods and the receipt of applicable approvals or consents under antitrust and competition laws and foreign investment laws of certain jurisdictions. However, Billtrust cannot assure completion of such transaction by any particular date, if at all or that, if completed, it will be completed on the terms set forth in the merger agreement.

Upon completion of the transaction, Billtrust’s shares will no longer trade on the NASDAQ, and Billtrust will become a private company.

For more information about the pending transaction with EQT Private Equity, see the Company’s Current Report on Form 8-K filed with the SEC on September 28, 2022, and the Company’s preliminary proxy statement relating to the required shareholder approvals filed with the SEC on October 21, 2022.

Upcoming Investor Communications

In light of the pending transaction with EQT Private Equity, Billtrust will not host an earnings conference call or provide financial guidance in conjunction with this earnings release. For further detail and discussion of Billtrust’s financial performance please refer to Billtrust’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, which will be filed later today with the SEC. The Company plans to continue providing quarterly earnings releases and will continue to file reports with the U.S. Securities and Exchange Commission (“SEC”) until the transaction has been completed.

About Billtrust

Billtrust (NASDAQ: BTRS) is a leading provider of cloud-based software and integrated payment processing solutions that simplify and automate B2B commerce. Accounts receivable is broken and relies on conventional processes that are outdated, inefficient, manual and largely paper based. Billtrust is at the forefront of the digital transformation of accounts receivable, providing mission-critical solutions that span credit decisioning and monitoring, online ordering, invoice delivery, payments and remittance capture, cash application and collections. For more information, visit Billtrust.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “continue,” “guidance,” “expect,” “outlook,” “project,” “believe” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding the timing, expected completion and impacts of the proposed transaction with EQT Private Equity. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of Billtrust’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and may differ from assumptions. Many actual events and circumstances are beyond the control of Billtrust. These forward-looking statements are subject to a number of risks and uncertainties, including Billtrust’s ability to secure the required regulatory and stockholder approvals for the proposed transaction and its ability to meet the applicable closing conditions; the diversion of management time relating to the pending transaction; Billtrust’s ability to attract and retain customers and expand customers’ use of Billtrust’s services; market, financial, political and legal conditions; foreign currency impacts; the impact of the COVID-19 pandemic on Billtrust’s business and the global economy; risks relating to the uncertainty of the projected financial and operating information with respect to Billtrust; risks related to future market adoption of Billtrust's offerings; risks related to Billtrust's marketing and growth strategies; risks related to expanding Billtrust's operations outside the United States; risks related to Billtrust's ability to acquire or invest in businesses, products, or technologies that may complement or expand its products or platforms, enhance its technical capabilities, or otherwise offer growth opportunities; the effects of competition on Billtrust’s future business; the impact of unstable market and economic conditions, including supply chain disruptions, higher rates of inflation, higher interest rates, increased volatility in foreign currency exchange rates, and increased volatility in the global capital markets, among others; and the risks discussed in Billtrust’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”) on March 9, 2022, under the heading “Risk Factors” and other documents of Billtrust filed, or to be filed, with the SEC, including our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2022 and September 30, 2022. If any of these risks materialize or any of Billtrust’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Billtrust presently does not know of or that Billtrust currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Billtrust’s expectations, plans or forecasts of future events and views as of the date of this press release. Billtrust anticipates that subsequent events and developments will cause Billtrust’s assessments to change. However, while Billtrust may elect to update these forward-looking statements at some point in the future, Billtrust specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Billtrust’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.

Non-GAAP Financial Measures

Some of the financial information contained in this press release has not been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). Such financial information is identified as such within the press release. Billtrust believes that the use of these non-GAAP financial measures provides an additional tool for management and investors to use in evaluating Billtrust’s actual and projected financial condition and operating results and trends in and in comparing Billtrust’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. Billtrust does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and other amounts that are required by GAAP to be recorded in Billtrust’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and other amounts are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, Billtrust presents non-GAAP financial measures in connection with GAAP results. Billtrust is not providing a reconciliation of its projected non-GAAP adjusted gross profit, non-GAAP adjusted gross margin and non-GAAP adjusted EBITDA, or non-GAAP direct card revenue for 2022 to the most directly comparable measure prepared in accordance with GAAP because such reconciliations are not meaningful or available without unreasonable effort as certain items are excluded from these non-GAAP measures, such as charges related to stock-based compensation expenses, changes in fair value of contingent consideration related to an acquisition, and related tax effects, including non-recurring income tax adjustments, including non-recurring income tax adjustments, cannot be reasonably calculated or predicted. You should review Billtrust’s audited Consolidated Financial Statements and related notes in its Annual Report on Form 10-K for the year ended December 31, 2021, unaudited interim reports, including its Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2022, and the other financial information included in other documents of Billtrust filed, or to be filed, with the SEC.

  • Net revenue (non-GAAP) is defined as total revenues less reimbursable costs revenue. Reimbursable costs revenue consists primarily of amounts charged to customers for postage (with an offsetting amount recorded as a cost of revenue) which we do not consider internally when monitoring operating performance.
  • Adjusted gross profit (non-GAAP) is defined as total revenues less total cost of revenues, excluding depreciation and amortization, plus stock-based compensation expense included in total cost of revenues.
  • Adjusted gross margin (non-GAAP) is defined as adjusted gross profit (non-GAAP) divided by total revenues less reimbursable costs revenue, or net revenue (non-GAAP).
  • Adjusted EBITDA (non-GAAP) is defined as net loss, plus (1) income tax expense (benefit), (2) changes in the fair value of financial instruments that do not meet the criteria to be classified as equity, (3) interest expense and loss on extinguishment of debt, (4) depreciation and amortization, (5) stock-based compensation expense, (6) impairment, restructuring, and related facility costs, (7) acquisition and integration costs, (8) other capital structure transaction costs, and (9) other non-operating expense (income).
  • Direct card revenue (non-GAAP) is defined as subscription, transaction, and services revenues, less revenues generated from segments other than software and payments (i.e., software and payments segment revenue), less software and payments segment transaction revenue unrelated to card processing and all subscription revenue. Direct card revenue (non-GAAP) includes variable transactional fee revenue associated with card payments on our electronic payments processing platforms.
  • Free cash flow (non-GAAP) is defined as net cash used in operating activities, less purchases of property and equipment (which includes capitalized internal-use software costs).

Additional Information and Where to Find It

This communication does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities or a solicitation of any vote or approval. This communication relates to the proposed transaction involving Billtrust. In connection with the proposed transaction, Billtrust has filed with the SEC a proxy statement on Schedule 14A (the “Proxy Statement”). This communication is not a substitute for the Proxy Statement or any other document that Billtrust may file with the SEC and send to its shareholders in connection with the proposed transaction. The proposed transaction will be submitted to Billtrust’s shareholders for their consideration. Before making any voting decision, Billtrust’s shareholders are urged to read all relevant documents filed or to be filed with the SEC, including the Proxy Statement, as well as any amendments or supplements to those documents, when they become available, because they will contain important information about Billtrust and the proposed transaction.

Billtrust’s shareholders will be able to obtain a free copy of the Proxy Statement, as well as other filings containing information about Billtrust, free of charge, at the SEC’s website (www.sec.gov). Copies of the Proxy Statement and other documents filed by Billtrust with the SEC may be obtained, without charge, by contacting Billtrust through its website at https://investors.billtrust.com/.

Participants in the Solicitation

The Company, its directors, executive officers and other persons related to Billtrust may be deemed to be participants in the solicitation of proxies from Billtrust’s shareholders in connection with the proposed transaction. Information about the directors and executive officers of Billtrust and their ownership of Billtrust common stock is set forth in Billtrust’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the SEC on March 9, 2022 and in its proxy statement for its 2022 annual meeting of stockholders, which was filed with the SEC on April 22, 2022. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is included in the Proxy Statement and other relevant materials to be filed with the SEC in connection with the proposed transaction when they become available. Free copies of these documents may be obtained as described in the preceding paragraph.

Condensed Consolidated Statements of Operations

(Unaudited)

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenues:

(in thousands, except per share amounts)

Subscription, transaction, and services

$

42,508

 

 

$

32,732

 

 

$

120,157

 

 

$

97,440

 

Reimbursable costs

 

8,854

 

 

 

8,625

 

 

 

26,112

 

 

 

26,085

 

Total revenues

 

51,362

 

 

 

41,357

 

 

 

146,269

 

 

 

123,525

 

Cost of revenues:

 

 

 

 

 

 

 

Cost of subscription, transaction, and services

 

11,255

 

 

 

9,368

 

 

 

32,729

 

 

 

27,981

 

Cost of reimbursable costs

 

8,854

 

 

 

8,625

 

 

 

26,112

 

 

 

26,085

 

Total cost of revenues, excluding depreciation and amortization

 

20,109

 

 

 

17,993

 

 

 

58,841

 

 

 

54,066

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

15,943

 

 

 

13,453

 

 

 

46,922

 

 

 

35,716

 

Sales and marketing

 

11,591

 

 

 

10,310

 

 

 

34,030

 

 

 

29,226

 

General and administrative

 

19,613

 

 

 

9,838

 

 

 

49,426

 

 

 

32,766

 

Depreciation and amortization

 

2,191

 

 

 

1,205

 

 

 

6,218

 

 

 

3,924

 

Impairment and restructuring

 

4,636

 

 

 

 

 

 

18,520

 

 

 

 

Total operating expenses

 

53,974

 

 

 

34,806

 

 

 

155,116

 

 

 

101,632

 

Loss from operations

 

(22,721

)

 

 

(11,442

)

 

 

(67,688

)

 

 

(32,173

)

Other income (expense):

 

 

 

 

 

 

 

Change in fair value of financial instruments

 

360

 

 

 

 

 

 

122

 

 

 

(9,995

)

Interest expense and loss on extinguishment of debt

 

(15

)

 

 

(2

)

 

 

(22

)

 

 

(2,947

)

Other non-operating income

 

916

 

 

 

277

 

 

 

1,171

 

 

 

521

 

Total other income (expense)

 

1,261

 

 

 

275

 

 

 

1,271

 

 

 

(12,421

)

Loss before income taxes

 

(21,460

)

 

 

(11,167

)

 

 

(66,417

)

 

 

(44,594

)

Income tax expense (benefit)

 

(251

)

 

 

27

 

 

 

(970

)

 

 

130

 

Net loss

$

(21,209

)

 

$

(11,194

)

 

$

(65,447

)

 

$

(44,724

)

 

 

 

 

 

 

 

 

Net loss per common share, basic and diluted

$

(0.13

)

 

$

(0.07

)

 

$

(0.40

)

 

$

(0.29

)

Weighted average common shares outstanding, basic and diluted

 

164,175

 

 

 

158,316

 

 

 

163,586

 

 

 

154,303

 

Selected Segment Information

(Unaudited)

 

 

Three Months Ended September 30,

 

Software and
Payments

 

Print

 

All other

 

Consolidated

 

(in thousands)

2022

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

Subscription and transaction

$

35,153

 

 

$

4,106

 

 

$

 

 

$

39,259

 

Services and other

 

 

 

 

 

 

 

3,249

 

 

 

3,249

 

Subscription, transaction, and services revenues

 

35,153

 

 

 

4,106

 

 

 

3,249

 

 

 

42,508

 

Reimbursable costs

 

 

 

 

8,854

 

 

 

 

 

 

8,854

 

Total revenues

$

35,153

 

 

$

12,960

 

 

$

3,249

 

 

$

51,362

 

 

 

 

 

 

 

 

 

Segment revenues growth vs. prior year

 

35.2

%

 

 

(0.2

) %

 

 

37.9

%

 

 

24.2

%

 

 

 

 

 

 

 

 

2021

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

Subscription and transaction

$

26,009

 

 

$

4,367

 

 

$

 

 

$

30,376

 

Services and other

 

 

 

 

 

 

 

2,356

 

 

 

2,356

 

Subscription, transaction, and services revenues

 

26,009

 

 

 

4,367

 

 

 

2,356

 

 

 

32,732

 

Reimbursable costs

 

 

 

 

8,625

 

 

 

 

 

 

8,625

 

Total revenues

$

26,009

 

 

$

12,992

 

 

$

2,356

 

 

$

41,357

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

Software and
Payments

 

Print

 

All other

 

Consolidated

 

(in thousands)

2022

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

Subscription and transaction

$

98,298

 

 

$

12,680

 

 

$

 

 

$

110,978

 

Services and other

 

 

 

 

 

 

 

9,179

 

 

 

9,179

 

Subscription, transaction, and services revenues

 

98,298

 

 

 

12,680

 

 

 

9,179

 

 

 

120,157

 

Reimbursable costs

 

 

 

 

26,112

 

 

 

 

 

 

26,112

 

Total revenues

 

98,298

 

 

 

38,792

 

 

 

9,179

 

 

 

146,269

 

 

 

 

 

 

 

 

 

Segment revenues growth vs. prior year

 

28.9

%

 

 

(1.6

) %

 

 

17.5

%

 

 

18.4

%

Segment revenues growth vs. prior year, adjusted for One-Time Customer Loss

 

34.8

%

 

 

(1.6

) %

 

 

17.5

%

 

 

21.7

%

 

 

 

 

 

 

 

 

2021

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

Subscription and transaction

$

76,276

 

 

$

13,355

 

 

$

 

 

$

89,631

 

Services and other

 

 

 

 

 

 

 

7,809

 

 

 

7,809

 

Subscription, transaction, and services revenues

 

76,276

 

 

 

13,355

 

 

 

7,809

 

 

 

97,440

 

Reimbursable costs

 

 

 

 

26,085

 

 

 

 

 

 

26,085

 

Total revenues

$

76,276

 

 

$

39,440

 

 

$

7,809

 

 

$

123,525

 

Less: Segment revenues from One-Time Customer Loss

 

3,333

 

 

 

 

 

 

 

 

 

3,333

 

Adjusted segment revenues from One-Time Customer Loss

$

72,943

 

 

$

39,440

 

 

$

7,809

 

 

$

120,192

 

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(in thousands)

Cash flows from operating activities:

 

 

 

 

 

 

 

Net loss

$

(21,209

)

 

$

(11,194

)

 

$

(65,447

)

 

$

(44,724

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

2,191

 

 

 

1,206

 

 

 

6,218

 

 

 

3,924

 

Provision for bad debts

 

95

 

 

 

29

 

 

 

144

 

 

 

94

 

Impairments and reduction in carrying amount of operating lease right-of-use assets

 

4,409

 

 

 

1,222

 

 

 

15,817

 

 

 

2,086

 

Impairments of fixed assets

 

1,300

 

 

 

 

 

 

4,949

 

 

 

 

Loss on extinguishment of debt and amortization of debt discount

 

 

 

 

 

 

 

 

 

 

2,799

 

Stock-based compensation expense

 

6,940

 

 

 

5,914

 

 

 

20,293

 

 

 

20,446

 

Change in fair value of financial instruments and other expenses

 

53

 

 

 

11

 

 

 

116

 

 

 

9,996

 

Change in fair value of contingent consideration

 

(371

)

 

 

 

 

 

(122

)

 

 

 

Deferred income taxes

 

(210

)

 

 

14

 

 

 

(935

)

 

 

106

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

(1,787

)

 

 

(485

)

 

 

(7,800

)

 

 

(6,549

)

Prepaid expenses

 

1,247

 

 

 

75

 

 

 

(2,139

)

 

 

(2,036

)

Deferred implementation and commission costs

 

(402

)

 

 

(9

)

 

 

(373

)

 

 

227

 

Other assets (current and non-current)

 

(402

)

 

 

(579

)

 

 

(432

)

 

 

896

 

Accounts payable

 

547

 

 

 

361

 

 

 

(2,524

)

 

 

556

 

Accrued expenses and other

 

8,035

 

 

 

6,063

 

 

 

9,688

 

 

 

10,228

 

Operating lease liabilities

 

(1,131

)

 

 

(1,222

)

 

 

(2,757

)

 

 

(2,086

)

Deferred revenue

 

(2,244

)

 

 

(183

)

 

 

(4,492

)

 

 

(4,713

)

Other liabilities (current and non-current)

 

333

 

 

 

(211

)

 

 

1,429

 

 

 

(1,059

)

Net cash provided by (used in) operating activities

 

(2,606

)

 

 

1,012

 

 

 

(28,367

)

 

 

(9,809

)

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchase of business, net of acquired cash

 

 

 

 

 

 

 

(59,456

)

 

 

 

Purchases of marketable securities

 

 

 

 

(40

)

 

 

(57

)

 

 

(45,077

)

Proceeds from marketable securities

 

 

 

 

 

 

 

45,174

 

 

 

 

Purchases of property and equipment

 

(442

)

 

 

(450

)

 

 

(1,364

)

 

 

(1,570

)

Net cash used in investing activities

 

(442

)

 

 

(490

)

 

 

(15,703

)

 

 

(46,647

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Payments on borrowings

 

 

 

 

 

 

 

 

 

 

(44,663

)

Business Combination and PIPE financing

 

 

 

 

 

 

 

 

 

 

349,638

 

Payments of equity issuance costs

 

 

 

 

 

 

 

 

 

 

(19,936

)

Debt extinguishment costs

 

 

 

 

 

 

 

 

 

 

(1,565

)

Payment of deferred purchase price

 

 

 

 

 

 

 

(557

)

 

 

 

Change in customer funds payable

 

(6,102

)

 

 

(5,330

)

 

 

(5,590

)

 

 

(1,636

)

Payments on finance leases

 

(78

)

 

 

(52

)

 

 

(223

)

 

 

(177

)

Proceeds from common stock issued

 

1,155

 

 

 

1,467

 

 

 

3,274

 

 

 

5,651

 

Taxes paid on net share issuance of stock-based compensation

 

2

 

 

 

(96

)

 

 

(48

)

 

 

(4,367

)

Net cash provided by (used in) financing activities

 

(5,023

)

 

 

(4,011

)

 

 

(3,144

)

 

 

282,945

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

(80

)

 

 

 

 

 

(125

)

 

 

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

(8,151

)

 

 

(3,489

)

 

 

(47,339

)

 

 

226,489

 

Cash, cash equivalents, and restricted cash, beginning of period

 

173,621

 

 

 

268,821

 

 

 

212,809

 

 

 

38,843

 

Cash, cash equivalents, and restricted cash, end of period

$

165,470

 

 

$

265,332

 

 

$

165,470

 

 

$

265,332

 

Summary of Cash, Cash Equivalents, Restricted Cash, and

Marketable Securities Balances

(Unaudited)

 

 

September 30,

 

 

2022

 

 

2021

 

(in thousands)

Summary of cash, cash equivalents, and restricted cash, end of period:

Cash and cash equivalents

$

145,915

 

$

243,448

Customer funds

 

16,951

 

 

19,288

Restricted cash (included in other current assets)

 

2,604

 

 

2,596

Total cash, cash equivalents, and restricted cash

$

165,470

 

$

265,332

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

145,915

 

$

243,448

Marketable securities

 

 

 

45,117

Total cash, cash equivalents and marketable securities

$

145,915

 

$

288,565

Reconciliation of GAAP to Non-GAAP Financial Information

(Unaudited)

 

 

Three Months Ended September 30,

 

Quarterly
Increase
(Decrease)

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

 

2022

 

 

 

2021

 

 

(in thousands)

 

 

 

(in thousands)

Total revenues

$

51,362

 

 

$

41,357

 

 

24.2

%

 

$

146,269

 

 

$

123,525

 

Less: Reimbursable costs revenue

 

8,854

 

 

 

8,625

 

 

 

 

 

26,112

 

 

 

26,085

 

Net revenue (non-GAAP)

 

42,508

 

 

 

32,732

 

 

29.9

%

 

 

120,157

 

 

 

97,440

 

Less: net revenue from One-Time Customer Loss

 

 

 

 

 

 

 

 

 

 

 

 

3,333

 

Net revenue (non-GAAP), excluding One-Time Customer Loss

$

42,508

 

 

$

32,732

 

 

29.9

%

 

$

120,157

 

 

$

94,107

 

 

 

 

 

 

 

 

 

 

 

Total revenues

$

51,362

 

 

$

41,357

 

 

 

 

$

146,269

 

 

$

123,525

 

Less: Cost of revenue, excluding depreciation and amortization

 

20,109

 

 

 

17,993

 

 

 

 

 

58,841

 

 

 

54,066

 

Gross profit, excluding depreciation and amortization

 

31,253

 

 

 

23,364

 

 

33.8

%

 

 

87,428

 

 

 

69,459

 

Add: Stock-based compensation expense

 

587

 

 

 

436

 

 

 

 

 

1,646

 

 

 

1,284

 

Adjusted gross profit (non-GAAP)

 

31,840

 

 

 

23,800

 

 

33.8

%

 

 

89,074

 

 

 

70,743

 

Less: gross profit from One-Time Customer Loss

 

 

 

 

 

 

 

 

 

 

 

 

3,333

 

Adjusted gross profit (non-GAAP), excluding One-Time Customer Loss

$

31,840

 

 

$

23,800

 

 

33.8

%

 

$

89,074

 

 

$

67,410

 

 

 

 

 

 

 

 

 

 

 

Gross margin, excluding depreciation and amortization

 

60.8

%

 

 

56.5

%

 

 

 

 

59.8

%

 

 

56.2

%

Adjusted gross margin (non-GAAP)

 

74.9

%

 

 

72.7

%

 

 

 

 

74.1

%

 

 

72.6

%

Adjusted gross margin (non-GAAP), excluding One-Time Customer Loss

 

74.9

%

 

 

72.7

%

 

 

 

 

74.1

%

 

 

71.6

%

Reconciliation of GAAP to Non-GAAP Financial Information

(Unaudited)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(in thousands)

Net loss

$

(21,209

)

 

$

(11,194

)

 

$

(65,447

)

 

$

(44,724

)

Income tax expense (benefit)

 

(251

)

 

 

27

 

 

 

(970

)

 

 

130

 

Change in fair value of financial instruments

 

(360

)

 

 

 

 

 

(122

)

 

 

9,995

 

Interest expense and loss on extinguishment of debt

 

15

 

 

 

2

 

 

 

22

 

 

 

2,947

 

Depreciation and amortization

 

2,191

 

 

 

1,205

 

 

 

6,218

 

 

 

3,924

 

Stock-based compensation expense

 

6,940

 

 

 

5,914

 

 

 

20,293

 

 

 

20,446

 

Impairment, restructuring, and related facility costs

 

5,383

 

 

 

35

 

 

 

20,262

 

 

 

358

 

Acquisition and integration costs

 

702

 

 

 

257

 

 

 

3,900

 

 

 

257

 

Other capital structure transaction costs

 

5,802

 

 

 

 

 

 

5,802

 

 

 

498

 

Other non-operating income

 

(726

)

 

 

(277

)

 

 

(982

)

 

 

(521

)

Adjusted EBITDA (non-GAAP)

 

(1,513

)

 

 

(4,031

)

 

 

(11,024

)

 

 

(6,690

)

Less: gross profit from One-Time Customer Loss

 

 

 

 

 

 

 

 

 

 

3,333

 

Adjusted EBITDA (non-GAAP), excluding One-Time Customer Loss

$

(1,513

)

 

$

(4,031

)

 

$

(11,024

)

 

$

(10,023

)

 

 

 

 

 

 

 

 

Adjusted EBITDA margin (non-GAAP)

 

(3.6

) %

 

 

(12.3

) %

 

 

(9.2

) %

 

 

(6.9

) %

Reconciliation of GAAP to Non-GAAP Financial Information

(Unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

(in thousands)

2022

 

 

 

Subscription, transaction, and services revenues

$

42,508

 

 

$

120,157

 

Less: Non-software and payments segment revenue

 

7,355

 

 

 

21,859

 

Software and payments segment revenue

 

35,153

 

 

 

98,298

 

Less: Software and payments segment revenue excluding direct card revenue (non-GAAP)

 

28,659

 

 

 

81,079

 

Direct card revenue (non-GAAP)

$

6,494

 

 

$

17,219

 

 

 

 

 

2021

 

 

 

Subscription, transaction, and services revenues

$

32,732

 

 

$

97,440

 

Less: Non-software and payments segment revenue

 

6,723

 

 

 

21,164

 

Software and payments segment revenue

 

26,009

 

 

 

76,276

 

Less: Software and payments segment revenue excluding direct card revenue (non-GAAP)

 

21,784

 

 

 

65,431

 

Direct card revenue (non-GAAP)

$

4,225

 

 

$

10,845

 

 

 

 

 

Direct card revenue (non-GAAP) growth

 

54

%

 

 

59

%

Software and payments (ex-DCR) (non-GAAP) revenue growth

 

32

%

 

 

24

%

Reconciliation of GAAP to Non-GAAP Financial Information Excluding Non-Cash Expenses1

(Unaudited)

Three Months Ended September 30, 2022 and 2021

 

 

GAAP

 

Non-cash expenses1

 

Non-GAAP Excluding
Non-cash Expenses1

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

2021

 

 

2022

 

 

 

2021

 

Revenues:

(in thousands)

Subscription, transaction, and services

$

42,508

 

 

$

32,732

 

 

$

 

$

 

$

42,508

 

 

$

32,732

 

Reimbursable costs

 

8,854

 

 

 

8,625

 

 

 

 

 

 

 

8,854

 

 

 

8,625

 

Total revenues

 

51,362

 

 

 

41,357

 

 

 

 

 

 

 

51,362

 

 

 

41,357

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

Cost of subscription, transaction, and services

 

11,255

 

 

 

9,368

 

 

 

587

 

 

436

 

 

10,668

 

 

 

8,932

 

Cost of reimbursable costs

 

8,854

 

 

 

8,625

 

 

 

 

 

 

 

8,854

 

 

 

8,625

 

Total cost of revenues, excluding depreciation and amortization

 

20,109

 

 

 

17,993

 

 

 

587

 

 

436

 

 

19,522

 

 

 

17,557

 

Operating expenses:2

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

15,943

 

 

 

13,453

 

 

 

1,469

 

 

1,210

 

 

14,474

 

 

 

12,243

 

Sales and marketing

 

11,591

 

 

 

10,310

 

 

 

637

 

 

984

 

 

10,954

 

 

 

9,326

 

General and administrative

 

19,613

 

 

 

9,838

 

 

 

4,247

 

 

3,284

 

 

15,366

 

 

 

6,554

 

Depreciation and amortization

 

2,191

 

 

 

1,205

 

 

 

2,191

 

 

1,205

 

 

 

 

 

 

Impairment and restructuring

 

4,636

 

 

 

 

 

 

4,636

 

 

 

 

 

 

 

 

Total operating expenses

 

53,974

 

 

 

34,806

 

 

 

13,180

 

 

6,683

 

 

40,794

 

 

 

28,123

 

Loss from operations

 

(22,721

)

 

 

(11,442

)

 

 

13,767

 

 

7,119

 

 

(8,954

)

 

 

(4,323

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of financial instruments

 

360

 

 

 

 

 

 

 

 

 

 

360

 

 

 

 

Interest expense and loss on extinguishment of debt

 

(15

)

 

 

(2

)

 

 

 

 

 

 

(15

)

 

 

(2

)

Other non-operating income

 

916

 

 

 

277

 

 

 

 

 

 

 

916

 

 

 

277

 

Total other income (expense)

 

1,261

 

 

 

275

 

 

 

 

 

 

 

1,261

 

 

 

275

 

Loss before income taxes

 

(21,460

)

 

 

(11,167

)

 

 

13,767

 

 

7,119

 

 

(7,693

)

 

 

(4,048

)

Income tax expense (benefit)

 

(251

)

 

 

27

 

 

 

 

 

 

 

(251

)

 

 

27

 

Net loss

$

(21,209

)

 

$

(11,194

)

 

$

13,767

 

$

7,119

 

$

(7,442

)

 

$

(4,075

)

__________________

1 Non-cash expenses include stock-based compensation expense, depreciation and amortization expense, and impairment and restructuring expense.

2 Includes acquisition, integration, and impairment, restructuring and related facility costs, as well as other capital structure transaction costs in the period of $0.3 million in research and development, $0.1 million in sales and marketing and $7.1 million in general and administrative expenses, which are excluded from Adjusted EBITDA.

Reconciliation of GAAP to Non-GAAP Financial Information Excluding Non-Cash Expenses1

(Unaudited)

Nine Months Ended September 30, 2022 and 2021

 

 

GAAP

 

Non-Cash Expenses3

 

Non-GAAP Excluding
Non-Cash Expenses3

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

2021

 

 

2022

 

 

 

2021

 

Revenues:

(in thousands)

Subscription, transaction, and services

$

120,157

 

 

$

97,440

 

 

$

 

$

 

$

120,157

 

 

$

97,440

 

Reimbursable costs

 

26,112

 

 

 

26,085

 

 

 

 

 

 

 

26,112

 

 

 

26,085

 

Total revenues

 

146,269

 

 

 

123,525

 

 

 

 

 

 

 

146,269

 

 

 

123,525

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

Cost of subscription, transaction, and services

 

32,729

 

 

 

27,981

 

 

 

1,646

 

 

1,284

 

 

31,083

 

 

 

26,697

 

Cost of reimbursable costs

 

26,112

 

 

 

26,085

 

 

 

 

 

 

 

26,112

 

 

 

26,085

 

Total cost of revenues, excluding depreciation and amortization

 

58,841

 

 

 

54,066

 

 

 

1,646

 

 

1,284

 

 

57,195

 

 

 

52,782

 

Operating expenses:4

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

46,922

 

 

 

35,716

 

 

 

4,187

 

 

3,524

 

 

42,735

 

 

 

32,192

 

Sales and marketing

 

34,030

 

 

 

29,226

 

 

 

2,362

 

 

3,276

 

 

31,668

 

 

 

25,950

 

General and administrative

 

49,426

 

 

 

32,766

 

 

 

12,098

 

 

12,362

 

 

37,328

 

 

 

20,404

 

Depreciation and amortization

 

6,218

 

 

 

3,924

 

 

 

6,218

 

 

3,924

 

 

 

 

 

 

Impairment and restructuring

 

18,520

 

 

 

 

 

 

18,520

 

 

 

 

 

 

 

 

Total operating expenses

 

155,116

 

 

 

101,632

 

 

 

43,385

 

 

23,086

 

 

111,731

 

 

 

78,546

 

Loss from operations

 

(67,688

)

 

 

(32,173

)

 

 

45,031

 

 

24,370

 

 

(22,657

)

 

 

(7,803

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of financial instruments

 

122

 

 

 

(9,995

)

 

 

 

 

 

 

122

 

 

 

(9,995

)

Interest expense and loss on extinguishment of debt

 

(22

)

 

 

(2,947

)

 

 

 

 

 

 

(22

)

 

 

(2,947

)

Other non-operating income

 

1,171

 

 

 

521

 

 

 

 

 

 

 

1,171

 

 

 

521

 

Total other income (expense)

 

1,271

 

 

 

(12,421

)

 

 

 

 

 

 

1,271

 

 

 

(12,421

)

Loss before income taxes

 

(66,417

)

 

 

(44,594

)

 

 

45,031

 

 

24,370

 

 

(21,386

)

 

 

(20,224

)

Income tax expense (benefit)

 

(970

)

 

 

130

 

 

 

 

 

 

 

(970

)

 

 

130

 

Net loss

$

(65,447

)

 

$

(44,724

)

 

$

45,031

 

$

24,370

 

$

(20,416

)

 

$

(20,354

)

__________________

3 Non-cash expenses include stock-based compensation expense, depreciation and amortization expense, and impairment and restructuring expense.

4 Includes acquisition, integration, and impairment, restructuring and related facility costs, as well as other capital structure transaction costs during the period of $0.3 million in research and development, $0.3 million in sales and marketing and $11.1 million in general and administrative expenses, which are excluded from Adjusted EBITDA.

Investor Contact:
John T. Williams
IR@billtrust.com

Media Contact:
Meredith Simpson
PR@billtrust.com

Source: BTRS Holdings Inc.

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