10-Q · May 4, 2026
Paymentus Holdings, Inc. reported robust Q1 2026 results, with revenue of $358.4 million, up 30.2% from the previous year, and an EPS of $0.21, exceeding estimates by 23.53%. The firm experienced strong transaction…
Earnings analysis · 10-Q
PAY earnings analysis
Filed August 3, 2026 · Our reading of the company's report
The latest report
Paymentus delivered Q2 revenue of $360.736 million, up 28.8% year over year and modestly above Q1 2026 revenue of $358 million, while reported EPS increased to $0.25 from $0.16 sequentially and $0.11 a year ago. Gross…
Read full summary
Paymentus delivered Q2 revenue of $360.736 million, up 28.8% year over year and modestly above Q1 2026 revenue of $358 million, while reported EPS increased to $0.25 from $0.16 sequentially and $0.11 a year ago. Gross margin expanded to 26.1% and operating margin to 9.0%, supported by 21.4% transaction growth and operating leverage. The filing does not disclose reportable segment revenue, does not provide quantitative guidance, and reports no material changes to its risk factors versus the 2025 Form 10-K.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.25
What stood out
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Revenue growth remained strong and EPS accelerated
Q2 revenue was $360.736 million, up $80.659 million, or 28.8%, from $280.077 million a year earlier. Sequentially, revenue increased from $358 million in Q1 2026 to $360.736 million, while reported EPS rose to $0.25 from $0.16.
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Margins expanded with operating leverage
Gross margin expanded 60 basis points year over year to 26.1% from 25.5% and 200 basis points sequentially from 24.1%. Operating margin reached 9.0%, up 330 basis points from 5.7% a year ago and 160 basis points from 7.4% in Q1 2026; operating income more than doubled to $32.621 million from $15.922 million.
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Transaction growth drove profit leverage
Transactions processed increased 21.4% to 213.4 million from 175.8 million, driven by new biller implementations and higher volumes from new and existing billers. Contribution profit rose 26.3% to $118.098 million and adjusted EBITDA increased 54.0% to $48.796 million.
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Quarterly cash conversion improved
Q2 operating cash flow increased to $48.860 million from $31.479 million, and free cash flow rose to $39.032 million from $22.475 million. Capitalized internal-use software costs were $9.715 million, equal to roughly 2.7% of $360.736 million quarterly revenue.
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Strong cash liquidity position
Liquidity was substantial, with $377.7 million of unrestricted cash and cash equivalents at June 30, 2026. Management states this balance is sufficient for expected needs for at least the next 12 months.
What to watch
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Working capital and software spend restrained H1 FCF
For the first six months, free cash flow declined to $59.943 million from $63.578 million despite operating cash flow of $79.312 million, as working-capital investment and $19.176 million of capitalized internal-use software development costs offset better operating performance.
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Customer mix and network costs pressure margins
Management cites a mix shift toward high-volume enterprise billers with lower margins. Q2 gross margin still improved to 26.1% from 25.5%, but cost of revenue remained 73.9% of revenue, leaving profitability exposed to interchange, network and processor-cost pressure.
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Higher tax rate tempered profit conversion
The effective tax rate increased to 28.3% in Q2 from 19.9% a year earlier, primarily due to increased executive stock-based compensation and less significant excess tax benefits than in 2025. This was a contributor to tax provision growth of 175.8% to $10.099 million.
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No formal risk-factor updates, but macro headwinds persist
Item 1A states there were no material changes to risk factors previously disclosed in the 2025 Form 10-K. Management nevertheless identifies elevated macro uncertainty, tariffs, trade-policy changes and energy-market volatility as potential pressures on payment timing, payment mix and margins.
Management's outlook
The 10-Q provides no quantitative revenue or EPS outlook. Management says its $377.7 million of unrestricted cash is expected to fund working capital, capital-expenditure requirements and commitments for at least the next 12 months, and it currently has no material planned capital expenditures or acquisitions in that period.
Earlier filings 4
10-K · February 24, 2026
Paymentus reports accelerating scale and profitability: FY2025 revenue totaled approximately $1,196M (sum of quarterly results) with Q4 revenue of $330,458,000 (5.78% beat vs. consensus) and Q4 diluted EPS $0.20 (25%…
10-Q · November 4, 2025
Paymentus reported a strong Q3: revenue rose to $310,737,000 (up $79,166,000 or 34.2% vs Q3 2024) and diluted EPS was $0.14. Operating income improved to $19,861,000 and cash balances strengthened to $287,908,000; the…
10-Q · August 5, 2025
Paymentus reported strong top-line growth in Q2 with revenue of $280,077,000, up $82,655,000 (41.9%) versus Q2 2024. Operating income increased to $15,922,000 (5.7% operating margin) while diluted EPS was $0.11; cash…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.