AvidXchange Announces Fourth Quarter & Full Year 2021 Financial Results

Rhea-AI Summary

AvidXchange Holdings, Inc. (AVDX) reported strong financial results for Q4 2021, with total revenue of $69.3 million, up 31% year-over-year. They achieved full-year revenue of $248.4 million, reflecting a 33.6% increase from 2020. Despite a GAAP net loss of $(72.1) million in Q4 and $(199.6) million for the year, the company noted improvements in gross profit margins. For 2022, AvidXchange projects revenue between $296.5 million and $301.5 million, alongside an adjusted EBITDA loss of $(42.0) million to $(48.0) million, indicating ongoing investments in growth.

Positive

• Revenue for Q4 2021 was $69.3 million, a 31% increase year-over-year.
• Full-year revenue reached $248.4 million, up 33.6% from 2020.
• Gross profit margins improved to 50.8% in Q4 2021, up from 50.2% in Q4 2020.
• Total payment volume in Q4 2021 increased by 37.3% to $15.1 billion.

Negative

• GAAP net loss for Q4 2021 was $(72.1) million, worsening from $(32.6) million in Q4 2020.
• Full-year GAAP net loss was $(199.6) million, compared to $(101.2) million in 2020.
• Adjusted EBITDA loss for Q4 2021 was $(8.2) million, higher than $(7.0) million in Q4 2020.

--Fourth quarter 2021 revenue and Adjusted EBITDA above previous guidance

--2022 financial outlook highlights solid operating momentum and financial position

CHARLOTTE, N.C., March 07, 2022 (GLOBE NEWSWIRE) -- 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 fourth quarter and full year ended December 31, 2021.

“2021 was an extraordinary year for AvidXchange. We completed our transition to a public company and raised a significant amount of strategic capital while ending the year with solid operating results that outperformed expectations. We believe our across-the-board strong fourth quarter and full year 2021 results and outperformance relative to guidance reflect the differentiated value proposition offered by our B2B mid-market AP automation software and payments platform, a strong competitive moat and solid execution against our key growth initiatives by leveraging the four growth gears of the ‘AvidXchange Business Flywheel’. We believe these results coupled with on-going investments set the stage for an upbeat outlook for 2022, highlighting our momentum and leadership position to capture significant greenfield opportunity that exists in the middle market B2B payments segment,” said Michael Praeger, CEO & Co-Founder of AvidXchange.

Fourth Quarter 2021 Financial Highlights:

• Total revenue was $69.3 million, an increase of 31% year-over-year, compared with $52.9 million in the fourth quarter of 2020.
• GAAP net loss was $(72.1) million, compared with a GAAP net loss of $(32.6) million in the fourth quarter of 2020.
• Non-GAAP net loss was $(17.7) million, compared with a Non-GAAP net loss of $(16.2) million in the fourth quarter of 2020.
• GAAP gross profit was $35.2 million, or 50.8% of total revenue, compared with $26.5 million, or 50.2% of revenue in the fourth quarter of 2020.
• Non-GAAP gross profit was $43.1 million, or 62.2% of total revenue, compared with $30.8 million, or 58.2% of revenue in the fourth quarter of 2020.
• Adjusted EBITDA was $(8.2) million compared with $(7.0) million in the fourth quarter of 2020.

Full Year 2021 Financial Highlights:

• Total revenue was $248.4 million, an increase of 33.6% year-over-year, compared with $185.9 million in 2020.
• GAAP net loss was $(199.6) million, compared with a GAAP net loss of $(101.2) million in 2020.
• Non-GAAP net loss was $(63.5) million, compared with a Non-GAAP net loss of $(67.9) million in 2020.
• GAAP Gross profit was $128.8 million, or 51.9% of total revenue, compared with $85.4 million, or 45.9% of revenue in 2020.
• Non-GAAP gross profit was $151.1 million, or 60.8% of total revenue, compared with $102.3 million, or 55% of revenue in 2020.
• Adjusted EBITDA was $(26.2) million compared with $(32.7) million in 2020.

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"

Fourth Quarter & Full Year 2021 Key Business Metrics and Highlights:

• Total transactions processed in the fourth quarter of 2021 were 16.5 million, an increase of 14.6% from 14.4 million in the fourth quarter of 2020.
• Total payment volume in the fourth quarter of 2021 was $15.1 billion, an increase of 37.3% from $11.0 billion in the fourth quarter of 2020.
• Transaction yield in the fourth quarter of 2021 was $4.21, an increase of 14.4% from $3.68 in the fourth quarter of 2020.
• Total transactions processed in 2021 were 62.5 million, an increase of 18.4% from 52.8 million in 2020.
• Total payment volume in 2021 was $52.1 billion, an increase of 37.5% from $37.9 billion in 2020.
• Transaction yield in 2021 was $3.98, an increase of 13.1% from $3.52 in 2020.

Full Year 2022 Financial Outlook

As of March 7, 2022, AvidXchange anticipates Full Year 2022 revenue and adjusted EBITDA to be in the following ranges (in millions):

	FY 2022 Guidance
Revenue	$296.5 - $301.5
Adjusted EBITDA(1)	$(42.0) - $(48.0)

(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.

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.

Full IPO Lock-Up Release
All remaining shares of common stock of AvidXchange subject to the lock-up agreements entered into by a substantial majority of AvidXchange’s stockholders and the underwriters of AvidXchange’s initial public offering will be fully released from the lock-up at the open of trading on March 10, 2022.

Earnings Teleconference Information

AvidXchange will discuss its fourth quarter financial results during a teleconference today, March 7, 2022, at 5:00 PM 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 8,000 businesses and it has made payments to more than 825,000 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 Statements
This 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 2022, as well as 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 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 Metrics

To 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 and depreciation and amortization before amortization of acquired intangible assets and stock-based compensation expense. We define Adjusted EBITDA as our net loss before depreciation and amortization of property and equipment, amortization of software development costs, amortization of acquired intangible assets, impairment of intangible assets, interest income and expense, interest expense on building lease financing obligations, income tax expense, stock-based compensation expense, transaction and acquisition-related costs expensed, costs not core to our business, and charitable contributions of common stock. We define Non-GAAP Net Loss as net loss before amortization of acquired intangible assets, impairment of intangible assets, stock-based compensation expense, transaction and acquisition-related costs expensed, costs not core to our business, and charitable contributions of common stock.

In the beginning of the fourth quarter of 2021, we revised our definitions of Adjusted EBITDA and Non-GAAP Net Loss to also exclude effects of charitable contributions of common stock. This revision to the definitions had no impact on our reported Adjusted EBITDA and Non-GAAP Net Loss for periods prior to the fourth quarter of 2021.

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 Kumar
Skumar1@avidxchange.com
813.760.2309

AvidXchange Holdings, Inc. Consolidated Statements of Operations (in thousands, except share and per share data)
		Three Months Ended December 31,								Year Ended December 31,
		2021				2020				2021				2020
Revenues		$	69,265			$	52,863			$	248,409			$	185,928
Cost of revenues (exclusive of depreciation and amortization expense)			28,747				22,117				100,090				83,755
Operating expenses			-				-				-				-
Sales and marketing			19,763				12,631				63,939				47,910
Research and development			21,922				12,344				65,147				44,500
General and administrative			50,319				25,582				95,817				56,395
Impairment and write-off of intangible assets			838				-				1,412				924
Depreciation and amortization			8,404				6,781				30,738				27,514
Total operating expenses			101,246				57,338				257,053				177,243
Loss from operations			(60,728	)			(26,592	)			(108,734	)			(75,070	)
Other income (expense)
Interest income			329				85				661				1,675
Interest expense			(5,123	)			(5,064	)			(20,108	)			(20,080	)
Change in fair value of derivative instrument			(11,438	)			(992	)			(26,128	)			(7,537	)
Charge for amending financing advisory engagement letter - related party			-				-				(50,000	)			-
Other expenses			(16,232	)			(5,971	)			(95,575	)			(25,942	)
Loss before income taxes			(76,960	)			(32,563	)			(204,309	)			(101,012	)
Income tax (benefit) expense			(4,863	)			59				(4,660	)			234
Net loss		$	(72,097	)		$	(32,622	)		$	(199,649	)		$	(101,246	)
Deemed dividend on preferred stock			(9,500	)			(43,414	)			(9,500	)			(43,414	)
Accretion of convertible preferred stock			(724	)			(5,686	)			(15,141	)			(21,682	)
Net loss attributable to common stockholders		$	(82,321	)		$	(81,722	)		$	(224,290	)		$	(166,342	)
Net loss per share attributable to common stockholders, basic and diluted		$	(0.47	)		$	(1.56	)		$	(2.64	)		$	(3.34	)
Weighted average number of common shares used to compute net loss per share attributable to common stockholders, basic and diluted			175,401,322				52,368,235				85,061,417				49,738,252

AvidXchange Holdings, Inc. Consolidated Balance Sheets (in thousands, except share and per share data)
		As of December 31,
		2021				2020
Assets
Current assets
Cash and cash equivalents		$	562,817			$	252,458
Restricted funds held for customers			1,242,346				137,620
Accounts receivable, net of allowances of $2,283 and $1,769, respectively			30,965				24,757
Supplier advances receivable, net of allowances of $1,105 and $1,099, respectively			11,520				8,855
Prepaid expenses and other current assets			10,237				8,626
Total current assets			1,857,885				432,316
Property and equipment, net			106,227				86,872
Operating lease right-of-use assets			3,278				3,139
Deferred customer origination costs, net			28,276				24,124
Goodwill			165,921				105,696
Intangible assets, net			100,455				72,442
Other noncurrent assets and deposits			4,261				1,922
Total assets		$	2,266,303			$	726,511
Liabilities, Convertible Preferred Stock and Stockholders' Equity (Deficit)
Current liabilities
Accounts payable		$	17,142			$	25,418
Accrued expenses			56,082				40,472
Payment service obligations			1,242,346				137,620
Deferred revenue			9,530				6,309
Current portion of contingent consideration			688				-
Current maturities of lease obligations under finance leases			670				1,092
Current maturities of lease obligations under operating leases			1,048				1,147
Current maturities of long-term debt			4,800				1,000
Total current liabilities			1,332,306				213,058
Long-term liabilities
Deferred revenue, less current			20,350				1,661
Contingent consideration, less current portion			70				-
Obligations under finance leases, less current maturities			61,172				73,139
Obligations under operating leases, less current maturities			3,448				3,750
Long-term debt			119,880				98,446
Other long-term liabilities			6,022				14,939
Total liabilities			1,543,248				404,993
Commitments and contingencies
Convertible preferred stock, $0.001 par value; 40,472,166 shares authorized and 30,081,996 shares issued and outstanding as of December 31, 2020; liquidation preference of $884,842 as of December 31, 2020			-				832,625
Stockholders' equity (deficit)
Preferred stock, $0.001 par value; 50,000,000 shares authorized as of December 31, 2021, no shares issued and outstanding as of December 31, 2021			-				-
Common stock, $0.001 par value; 1,600,000,000 and 240,000,000 shares authorized as of December 31, 2021 and 2020, respectively; 196,804,844 and 50,054,880 shares issued and outstanding as of December 31, 2021 and 2020, respectively			197				50
Additional paid-in capital			1,594,780				161,116
Accumulated deficit			(871,922	)			(672,273	)
Total stockholders' equity (deficit)			723,055				(511,107	)
Total liabilities, convertible preferred stock and stockholders' equity (deficit)		$	2,266,303			$	726,511

AvidXchange Holdings, Inc. Consolidated Statements of Cash Flows (in thousands)
	Year Ended December 31,
	2021				2020				2019
Cash flows from operating activities
Net loss	$	(199,649	)		$	(101,246	)		$	(93,546	)
Adjustments to reconcile net loss to net cash used by operating activities
Depreciation and amortization expense		30,738				27,514				22,340
Amortization of deferred financing costs		1,357				1,182				1,184
Provision for doubtful accounts		2,147				1,442				901
Stock-based compensation		21,428				1,630				1,379
Fair value adjustment of contingent consideration		(122	)			-				-
Warrants vested in connection with consulting services		-				101				202
Accrued interest		881				913				878
Impairment and write-off on intangible and right-of-use assets		1,412				997				7,891
Loss on fixed asset disposal		36				14				11
Payment of third party fees related to debt modification		-				-				(593	)
Payment of third party fees related to debt modification —related party		-				-				(2,645	)
Value of donated common stock		4,143				-				-
Noncash expense on contract modification - related party		50,000				-				-
Fair value adjustment to derivative instrument		26,128				7,537				555
Deferred income taxes		(4,728	)			181				60
Changes in operating assets and liabilities
Accounts receivable		(4,713	)			(5,711	)			(2,328	)
Prepaid expenses and other current assets		(1,759	)			(1,245	)			(1,099	)
Other noncurrent assets		(2,367	)			359				(340	)
Deferred customer origination costs		(4,152	)			(2,876	)			(4,646	)
Accounts payable		(12,377	)			14,149				3,665
Deferred revenue		21,910				289				235
Accrued expenses and other liabilities		1,560				11,619				3,725
Operating lease liabilities		(540	)			(978	)			-
Deferred rent and tenant improvement allowance		-				-				380
Total adjustments		130,982				57,117				31,755
Net cash used in operating activities		(68,667	)			(44,129	)			(61,791	)
Cash flows from investing activities
Purchases of equipment		(1,395	)			(703	)			(1,905	)
Purchases of real estate		(14,050	)			25				(39	)
Purchases of intangible assets		(16,931	)			(11,346	)			(7,349	)
Proceeds from sales of property and equipment		5				-				-
Acquisition of business, net of cash acquired		(46,089	)			(19,829	)			(105,834	)
Contingent consideration and deferred obligation payments near acquisition date		(1,292	)			-				-
Supplier advances, net		(4,355	)			(4,707	)			(1,728	)
Net cash used in investing activities		(84,107	)			(36,560	)			(116,855	)
Cash flows from financing activities
Proceeds from issuance of common stock upon initial public offering, net of underwriting discounts and commissions and other offering costs, including exercise of overallotment option		627,981				-				-
Proceeds from the issuance of long-term debt		3,471				4,472				96,081
Repayments of long-term debt		-				-				(70,781	)
Principal payments on land promissory note		(1,000	)			(1,000	)			(1,000	)
Principal payments on finance leases		(1,139	)			(1,582	)			(1,777	)
Proceeds from issuance of preferred and common stock		2,820				322,288				260,488
Common stock repurchased		-				(148,763	)			-
Convertible preferred stock redeemed		(169,000	)			(46,980	)			(11,184	)
Transaction costs related to issuance of stock		-				(1,327	)			(1,241	)
Transaction costs related to issuance of stock - related party		-				(19,227	)			(11,428	)
Debt issuance costs		-				-				(2,106	)
Payment on earn-out agreement		-				-				(500	)
Payment service obligations		1,104,726				85,913				51,707
Net cash provided by financing activities		1,567,859				193,794				308,259
Net increase in cash, cash equivalents, and restricted funds held for customers		1,415,085				113,105				129,613
Cash, cash equivalents, and restricted funds held for customers
Cash, cash equivalents, and restricted funds held for customers, beginning of year		390,078				276,973				147,360
Cash, cash equivalents, and restricted funds held for customers, end of year	$	1,805,163			$	390,078			$	276,973
Supplementary information of noncash investing and financing activities
Right-of-use assets obtained in exchange for new finance lease obligations	$	174			$	544			$	1,110
Right-of-use assets obtained in exchange for new operating lease obligations		877				163				-
Purchase of real estate in exchange for promissory note		21,500				-				-
Common stock issued on conversion of convertible preferred stock and convertible common stock liability		724,649				-				-
Common stock issued in business combination		31,000				5,988				9,514
Common stock issued as contingent consideration		500				-				-
Initial fair value of contingent consideration and deferred payment obligation at acquisition date		2,672				-				-
Property and equipment purchases in accounts payable and accrued expenses		768				-				84
Interest paid on notes payable		10,486				10,798				9,605
Interest paid on finance leases		7,384				7,187				5,631
Options issued in connection with bonus compensation		49				-				128

AvidXchange Holdings, Inc. Unaudited Reconciliation of GAAP to Non-GAAP Measures (in thousands)
	Three Months Ended December 31,								Year Ended December 31,
	2021				2020				2021				2020
Reconciliation from Revenue to Non-GAAP Gross Profit and Non-GAAP Gross Margin:
Total revenues	$	69,265			$	52,863			$	248,409			$	185,928
Expenses:
Cost of revenues (exclusive of depreciation and amortization expense)		(28,747	)			(22,117	)			(100,090	)			(83,755	)
Depreciation and amortization expense		(5,327	)			(4,219	)			(19,498	)			(16,783	)
GAAP Gross profit	$	35,191			$	26,527			$	128,821			$	85,390
Adjustments:
Stock-based compensation expense		2,545				43				2,775				169
Depreciation and amortization expense		5,327				4,219				19,498				16,783
Non-GAAP gross profit	$	43,063			$	30,789			$	151,094			$	102,342
GAAP Gross margin		50.8	%			50.2	%			51.9	%			45.9	%
Non-GAAP gross margin		62.2	%			58.2	%			60.8	%			55.0	%
Reconciliation from Net Loss to Non-GAAP Net Loss:
Net loss	$	(72,097	)		$	(32,622	)		$	(199,649	)		$	(101,246	)
Amortization of acquired intangible assets		3,675				2,605				12,856				10,740
Impairment and write-off of intangible assets		838				-				1,412				924
Income tax (benefit) expense		(4,863	)			59				(4,660	)			234
Stock-based compensation expense		18,319				778				21,428				1,630
Transaction and acquisition-related costs		17,241				1,167				20,949				1,352
Change in fair value of derivative instrument		11,438				992				26,128				7,537
Non-recurring items not indicative of ongoing operations		3,628				10,851				53,852				10,927
Charitable contribution of stock		4,143				-				4,143				-
Total net adjustments		54,419				16,452				136,108				33,344
Non-GAAP net loss	$	(17,678	)		$	(16,170	)		$	(63,541	)		$	(67,902	)
Reconciliation from Net Loss to Adjusted EBITDA:
Net loss	$	(72,097	)		$	(32,622	)		$	(199,649	)		$	(101,246	)
Depreciation and amortization		8,404				6,781				30,738				27,514
Impairment and write-off of intangible assets		838				-				1,412				924
Interest income		(329	)			(85	)			(661	)			(1,675	)
Interest expense		5,123				5,064				20,108				20,080
Income tax (benefit) expense		(4,863	)			59				(4,660	)			234
Stock-based compensation expense		18,319				778				21,428				1,630
Transaction and acquisition-related costs		17,241				1,167				20,949				1,352
Change in fair value of derivative instrument		11,438				992				26,128				7,537
Non-recurring items not indicative of ongoing operations		3,628				10,851				53,852				10,927
Charitable contribution of stock		4,143				-				4,143				-
Adjusted EBITDA	$	(8,155	)		$	(7,015	)		$	(26,212	)		$	(32,723	)

FAQ

What were AvidXchange's Q4 2021 financial results?

AvidXchange's Q4 2021 revenue was $69.3 million, a 31% increase year-over-year.

What is AvidXchange's revenue guidance for 2022?

AvidXchange projects revenue for 2022 to be between $296.5 million and $301.5 million.

How did AvidXchange's GAAP net loss change in 2021?

AvidXchange's GAAP net loss for 2021 was $(199.6) million, up from $(101.2) million in 2020.

What are the transaction volume trends for AvidXchange?

Total payment volume in Q4 2021 was $15.1 billion, a 37.3% increase from Q4 2020.