Paymentus (PAY) Q4 2022 Earnings Call Transcript

Paymentus (PAY -2.52%)
Q4 2022 Earnings Call
Feb 23, 2023, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day and welcome to Paymentus' fourth quarter 2022 earnings call. This call is being recorded. All participants are currently in a listen-only mode. There'll be an opportunity for questions following management's prepared remarks.

At this time, I'd like to hand the call over to Paul Seamon, interim chief financial officer, for some introductory comments. Please go ahead.

Paul Seamon -- Vice President, Finance and Strategy

Thank you. Good afternoon, and welcome to Paymentus' fourth quarter 2022 earnings call. Joining me on the call today is Dushyant Sharma, our founder and CEO. Following our prepared remarks, we'll take questions.

Our press release was issued after the close of market today and is posted on our website, where this call is being simultaneously webcast. The webcast replay of this call and the supplemental slides accompanying this presentation will be available on our company's website under the investor relations link at ir.paymentus.com. Statements made on this webcast include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements use words such as will, believe, expect, anticipate, and similar phrases that denote future expectation or intent regarding our financial results and guidance; the impact of and our ability to address continued economic uncertainty and inflation; our market opportunities, business strategies, implementation timing, product enhancements, impacts from acquisitions, and other matters.

These forward-looking statements speak as of today, and we take no obligation to update them. These statements are subject to risks, uncertainties, and assumptions that may cause actual results to differ materially from those set forth in such statements, including the risks and uncertainties set forth under the captions, special note regarding forward-looking statements, and risk factors in our annual report on Form 10-K for the year ended December 31, 2021, which we filed with the SEC on March 3, 2022; and our annual report on Form 10-K for the year ended December 31, 2022, which we expect to file with the SEC shortly; and elsewhere in our other filings with the SEC. We encourage you to review these detailed safe harbor and risk factor disclosures. In addition, during today's call, we will discuss certain non-GAAP financial measures, specifically contribution profit, adjusted gross profit, adjusted EBITDA, and adjusted EBITDA margin are non-GAAP financial measures.

These non-GAAP financial measures, which we believe are useful in measuring our performance and liquidity, should be considered in addition to, and not as a substitute for or in isolation from GAAP results. We encourage you to review additional disclosures regarding these non-GAAP measures, including reconciliations with the most directly comparable GAAP measures in our earnings press release issued today and the supplemental slides for the webcast, each available on the investor relations page of our website. With that, I'd like to turn the call over to Dushyant Sharma, our founder and CEO.

Dushyant Sharma -- Founder and Chief Executive Officer

Thank you, Paul. We had a strong quarter that was successful, both financially and strategically. On the financial front, we exited the year ahead of our initial annual top-line expectations that we set at the beginning of 2022. On the strategic front, among other milestones in the quarter, we recently launched a product for small- and medium-sized businesses, commonly referred to as SMBs, over our IPN ecosystem that we expect to expand our TAM and enhance our ability to change a portion of our model from interchanging a call center to a revenue center.

Let me just give the financial highlights first. As you can see on Slide 3, we finished 2022 with stronger-than-anticipated results in the fourth quarter. Our revenue for the quarter was $132.2 million, up 22.2% year over year. And contribution profit was $54.1 million, up 19.4% year over year.

We also expanded margins sequentially. Our adjusted EBITDA was $10.2 million for the quarter with a corresponding margin of almost 19%. On Slide 4, we show our performance for full year 2022, our first full year of being public. We finished with revenues of $497 million, which represented growth of almost 26% and was higher than our expectations that we shared with you at the beginning of 2022.

Contribution profit was $201.3 million, representing 27% growth, which was within our updated range of expectations. Adjusted EBITDA finished at $28.6 million with a 14.2% margin, which was within our initial range of expectations. On a full year basis, our dollar volume increased over 70%, which reflects our continued move to serve larger and larger clients and increased scale in payment ecosystem. In the quarter, we achieved several milestones as outlined on Slide 5.

First, we signed a large bank, Citizens Financial Group, for consumer bill payment with our bill center product. We believe this is a very good sign of things to come for bill payments sales to financial institutions as we have larger and larger institutions evaluating other modern product to replace their legacy solutions. Second, in the quarter, we expanded the reach of the Instant Payment Network through a partnership with Green Dot to accept cash payments at over 90,000 of their locations across the U.S. We continue to support consumer choice of payment channels and methods and are working to add more and more partners to the network to capture additional payment volume over IPN.

Third, we partner with a large real estate platform to be one of its payments offering for rent payments. Additionally, we completed the implementation of a loan payment client that was a cross-sale of our biller direct platform into our bank bill payment customer base. We expect to see continued penetration in the banking and credit union markets for our loan payment offering. In addition, we also launched a large mortgage services company toward the end of Q4.

As I mentioned a minute ago, we are also pleased to announce the launch of our SMB platform that combines the features of our current platform with a new product offering and team that we acquired in the quarter. Our SMB product is a full service financial offering to SMBs and offers complete self-onboarding with no implementation involved. It starts with automating business banking and attaches to it a full service SMB operating system that automates payables, receivables, and expense management using the Paymentus platform. As I shared last quarter, we send out millions of payments to over a million payees, many of whom are SMBs.

All of these are outside of our direct biller network, yet they participate in our ecosystem and receive payments. We believe this presents a very efficient distribution channel for us, which we plan to leverage to attract such customers. As you know, there are over 6 million SMBs and millions more small office and home offices in the U.S. alone.

In addition to the expansion of our TAM with this offering, we seek to change the economic model by generating interchange revenues. In other words, in contrast to biller direct, in this offering, interchange is no longer a call center, instead, is a revenue center for us. With that background, let me turn to our 2023 guidance on Slide 7. In 2023, we expect our revenues to be in the range of $575 million to $600 million, which is 16% to 21% growth.

We expect contribution profit from $224 million to $237 million, or 11% to 18% growth. We expect adjusted EBITDA of $32 million to $38 million and adjusted EBITDA margin range of 14% to 16%. As you can see, we have initially provided a broad range for contribution profit guidance, which somewhat diminishes its utility. In an inflationary environment and given its related dependance on factors outside of our control, we believe initial contribution profit guidance requires more flexibility.

However, we have a high degree of confidence regarding our ability to deliver on the guidance measures we are most focused on in 2023, the top and the bottom line, much like how we executed in 2022. Let me now talk briefly about our expectations for the first quarter of 2023 on Slide 8. For the first quarter of 2023, we expect revenues to be between $136 million and $140 million, contribution profit to be between $51 million and $53 million, and EBITDA to be between $7 million and $8 million. But before I turn the call over to Paul, let me address the guidance itself.

If I'm you, I'll be wondering, is the business slowing down? Why isn't the growth higher? And the short answer is no. I don't believe the business slowing down. The best way I can describe the business from my vantage point is that to hit the top end of each of our guidance range provided in 2023, I believe that we do not need to sign a single additional client in 2023 and only implement the existing backlog of currently signed clients. The reason for our broad ranges is the macroeconomic environment for operating in.

Our growth in bookings continues to accelerate, but the timing of implementation and onboarding is primarily controlled by the clients, which is impacted by the macro. I believe our platform itself is capable of launching engaged clients swiftly. I would also add that my team and I are excited about the future of our business and where we are strategically taking it. I believe that great businesses achieve great things during challenging times and use it as an opportunity to innovate and set the stage for future disruptive models as we are doing here at Paymentus.

With that, Paul will provide more color on our 2022 results and each of the guidance numbers.

Paul Seamon -- Vice President, Finance and Strategy

Thanks, Dushyant. As a reminder, today's discussion includes GAAP and non-GAAP financial measures. Please refer to the tables in our press release and supplemental slides for reconciliation of non-GAAP items to the most directly comparable GAAP financial measure. I'm pleased with our fourth quarter results.

The strong performance was highlighted by repricing actions and improved expense management, leading to an adjusted EBITDA nearing 20%. In the fourth quarter, we processed 97.2 million transactions, a 15.7% increase over the same period last year. Transaction growth in the quarter faced a difficult compare relative to Q4 2021, where we experienced over 50% growth due to the implementation of a large high-volume plan and the continued rollout of our large logistics client. For the full year 2022, we processed 366.9 million transactions, an increase of 30.8% compared to 2021.

Our fourth quarter revenue was $132.2 million, an increase of 22.2% compared to the same period last year. Revenue grew faster than the growth in transaction count for the quarter, largely driven by the launch of several clients, primarily in the telecommunications, insurance, and government payment verticals, where the earned revenue per transaction was typically higher than average. The revenue for the full year was $497.0 million, an increase of 25.7% compared to 2021. Contribution profit increased 19.4% over the fourth quarter of 2021 to $54.1 million.

Contribution profit for 2022 increased to $201.3 million, an increase of 27% over 2021. Contribution profit per transaction for the quarter was $0.56, and for the full year was $0.55, which was consistent with our expectations. As we have continued to highlight in prior quarters and as mentioned in the past, fluctuations outside of our control, such as increases in the average payment amount or unfavorable swings in the payment mix, can influence contribution profit quarter by quarter. Throughout the year.

We operated in a highly inflationary environment, particularly in the utilities sector, which at times experienced inflation north of 20% in 2022. In the back half of 2022, we worked diligently to manage expenses and took on several pricing actions to offset some of the inflationary headwinds experienced throughout the year. Some of these repricing actions were successfully executed in the fourth quarter of 2022. For other clients, we're currently actively engaged in repricing conversations.

Adjusted gross profit increased $8.5 million to 23.5% compared to the fourth quarter of 2021 of $44.6 million. For the full year, adjusted gross profit increased $34.4 million or 27% to $161.8 million. Adjusted EBITDA was $10.2 million for the fourth quarter, which represented an 18.9% adjusted EBITDA margin. While still ahead of the high 20s margin level we were at before going public, this is a new high watermark as a public company and shows our ability to expand margin.

Adjusted EBITDA for 2022 was $28.6 million, representing 14.2% adjusted EBITDA margin. Operating expense grew $6.2 million to $39.6 million for the fourth quarter of 2022 from the same period last year, and $41.6 million increased to 152.7 million for the full year compared to 2021. Specifically, the largest increases were noted in sales and marketing, which increased 5.3 million in the fourth quarter of 2022 to $20.2 million compared to the same period in 2021. For the full year, sales and marketing expenses were up $29.4 million in 2022 and $73.3 million compared to 2021.

On a year-over-year basis, the increase was driven by the Payveris acquisition, continued expansion of the sales team, adding partnerships to capture our sizable market opportunity, and an increase in stock-based compensation. We continue to invest in sales and marketing in 2023 to drive top-line revenue growth as we target existing and new biller segments, including IPN, and now, SMB opportunities. Our GAAP net income for the fourth quarter of 2022 was $1.0 million, and for the full year 2022 was a loss of $0.5 million. GAAP EPS was a penny and $0.0 for the fourth quarter 2022 and full year 2022, respectively.

Non-GAAP net income was $3.0 million for the quarter and $8.1 million for the year. Non-GAAP EPS was $0.02 and $0.07 for the quarter and year, respectively. As of December 31st, 2022, we had $147.3 million of cash and cash equivalents on our balance sheet. Cash decreased primarily due to use in cash for the small pre-revenue SMB product acquisition in the quarter.

At year end, we had approximately 123 million shares of common stock outstanding. Now, turning to our 2023 full year outlook. As Dushyant said, we expect revenue for the full year 2023 to be between $575 million and $600 million or 16% to 21% growth year over year. Contribution profit is anticipated to be between $224 million and $237 million, or 11% and 18% growth year over year.

We continue to anticipate high inflation, higher than historical norms, which creates a headwind for growth, especially contribution profit growth. Adjusted EBITDA is expected to be between $32 million and $38 million, resulting in an adjusted EBITDA margin of approximately 14% to 16%. This range anticipates margin expansion over 2022, while still allowing us to invest in small business and other growth initiatives. To provide some additional color on the phasing throughout the year, we anticipate that both growth metrics and adjusted EBITDA margin will be at their lowest levels of the year in the first quarter of 2023.

This is partially due to a difficult compare in Q1 of 2022, when we had a 35% contribution profit growth; and partially due to the timing of implementations with no large billers going live in the first quarter of 2023. Revenue growth should accelerate throughout the year, while growth and contribution profit will partially depend on inflationary pressures and other factors. As such, we expect revenue growth in Q1 to be between $136 million and $140 million, or 17% to 20% growth, and contribution profit to be between $51 million and $53 million in the range of 8% to 12% growth. Adjusted EBITDA is expected between $7 million and $8 million in the first quarter, a margin of 13% to 15%, which would be a minimum of a 2% increase over the 11% margin we had in Q1 of 2021.

We expect this market to expand each quarter throughout the year on a year-over-year basis, following a similar cycle we had last year. It is magnified somewhat this year by change made in our employee review and compensation cycle for 2023. In previous years, raises and bonuses were given on the employee's anniversary, more or less, evenly distributed throughout the year this year. All raises were effective January 1st.

So, we expect a step-up on employee costs earlier than normal, suppressing margin earlier in 2023, and helping it in the fourth quarter. We believe the company is well positioned for the future. We've built a strong, profitable company with financial flexibility in the balance sheet. We passed several key milestones and believe we continue to be positioned well to grow for a long time.

I'm now turning the call over to Dushyant for closing comments.

Dushyant Sharma -- Founder and Chief Executive Officer

Thanks, Paul. I'm proud that our team came together and delivered on most of our original expectations in 2022. I believe that this illustrates the resilience of our business despite the difficult macro environment. We are very confident about the long-term growth prospects of the business, especially given the expanding IPN ecosystem we are building, which we believe allows us to reach a broader bend and leverages the entire spectrum of interchange from a call center in our biller business, to interchange neutral in IPN business, the interchange being a revenue source in our SMB offering and beyond.

We remain excited about the demand for our products in all of the industry verticals we are operating in. So, as Paul mentioned, we are leaning in and making continued investments in the sales and marketing, while also seeking expanded margins in 2023. With that, I'll open the line for questions.

Questions & Answers:

Operator

[Operator instructions] The first question is from the line of Ashwin Shirvaikar with Citi. Your line is now open.

Ashwin Shirvaikar -- Citi -- Analyst

Thank you.

Dushyant Sharma -- Founder and Chief Executive Officer

Hi, Ashwin.

Ashwin Shirvaikar -- Citi -- Analyst

Hi, Paul. Hey. I have a couple of questions. I guess the first one is with regards to Citizens.

But if you could, the question is a bit more stepped back than that we can talk broadly about, sort of the biller direct versus the bank aggregator models, and whether this sort of indicates you trying and leaning into both models now as opposed to primarily one of them before. Is that the right way to think of it? And then, the financial part of the question is whether something like Citizens, which can obviously be a very large client. Is in your '23 expectations, is it rolled in there?

Dushyant Sharma -- Founder and Chief Executive Officer

Good question. Good question. Thank you, Ashwin. So, aggregator versus biller direct and -- so, as you recall, our strategy has been right from the beginning, from horizon one and two being centered on midmarket and enterprise building companies, respectively.

And horizon three is about trying to bring basically remove the CASM that has existed between any one of the aggregator models historically using the paper-based paradigm the banks currently employing to a more modern paradigm, which IPN offers. What that means is you're basically taking any bank customer payment and bringing it in real time to the billing companies participating in IPN directly. So, that model is actually extremely well received by the banks. And what we're really trying to do is we're looking at it from both sides of the house on the spectrum of usage.

One is the billing companies. Billing companies want more and more payments, more directly, more in real time, and from all channels, and banks being one of them. And banks want -- banks customers want a totally different experience than what they have been receiving from the systems that were designed in the 1980s. So, with that, we see a great opportunity on both sides, and that's exactly what we're pursuing.

And today, we have, you know, hundreds of banks and credit unions who are already on our platform, and we are extremely proud to welcome Citizens Bank as well. And in terms of the financial part of it, I think a very small -- a modest number is in our 2023. So, most of the growth will come in outer years.

Ashwin Shirvaikar -- Citi -- Analyst

Understood. And if I can shift gears to Paymentus for SMBs, quite a notable expansion there. One question I had was. How much of this is ready currently? I mean, I would say the payments engine, clearly, you have, I believe.

But, you know, if I look at Page 6 of your presentation, there's expense management, there's business cards. You know, it's kind of a fairly broad offering. Are there partnerships already set up definitely to go? Or is this aspirational at this stage?

Dushyant Sharma -- Founder and Chief Executive Officer

It's actually live right now. Most of this is live and operating. And what we don't have a lot in our model is the financial numbers from it. But in terms of the product capability, it is live.

It's operational. It's in production, and we are frankly trying to grow the segment. And as I've shared in my prepared remarks, if you think about it, we're sending out payments to -- we are sending out millions of payments right now to million-plus payees. And many of them are SMBs.

And we have been working on it for quite some time. And now, we are saying, "Well, if it's already part of the IPN ecosystem, why aren't we inviting them and offering them a thing of value so that we can actually bring more of their -- first of all, bring them into our ecosystem more directly, participate in our IPN and, therefore, be reachable to any of the financial institutions who participate in the IPN network as well." And on top of that, generate revenue. And the approach we have taken is that we want to monetize interchange here, and that's what we are doing. So, it is early days, but we have recently launched it.

Ashwin Shirvaikar -- Citi -- Analyst

Got it. If I could squeeze a third question in. Are you seeing any change in behavior on the consumer side with regards to either tendency to pay or a shift in what instrument they use to pay? Just from an economic or macro standpoint, are you seeing any changes?

Paul Seamon -- Vice President, Finance and Strategy

I'll jump in here. I was looking at this earlier today as various study in terms of credits of a ACH mix. I say the one thing that stands out more recently in the last couple quarters is the advanced payment method, the Venmo's, the PayPal wallet. Those kinds of things are starting to grow.

And not be a material portion of the transactions, but starting to register a little bit more and more. But if you're asking about credit usage and the consumer, we aren't seeing a shift there, anything to be concerned about in that regard yet.

Ashwin Shirvaikar -- Citi -- Analyst

OK. Got it. Thank you.

Operator

Thank you for your question. The next question comes from the line of John Davis with Raymond James. Your line is now open.

Unknown speaker

Hi, this is Taylor on for JD. Maybe just to start on pricing actions. Can you help us understand what the pace of the rest of the pricing action implementations will look like throughout the year and into 2024?

Dushyant Sharma -- Founder and Chief Executive Officer

Look, we are having discussions with clients, and a lot of the discussions have gone well. Some of the pricing action has already taken place and will be -- will start showing up in our numbers. And others, we are already having the discussions with clients, and it's going well. So, this will continue throughout the year.

We are looking at every single instance, every single client, every single area, wherever we see a pressure building from the inflation macro, we are taking action. And frankly, we are receiving, by and large, a receptive client ears.

Unknown speaker

OK. Great. Good to hear. And then, just on the inflation impact of the business, is there a way to help quantify the impact inflation is having on your ability to expand EBITDA margin into 2023?

Dushyant Sharma -- Founder and Chief Executive Officer

Well, I mean, if inflation wasn't a factor, our EBITDA margin would be, I mean, several points higher. So, it is, as we shared, I think toward the end of last year, and I think it was some of the calls, but overall, we are seeing a five grade point impact toward contribution profit and a lot of the correlation to EBITDA. So, as this gets behind us, I think our ability -- as Paul mentioned, our ability to expand margins. You saw in Q4.

We did a great job, and margins were almost touching 19%, 20%. So, we have the ability to do that, and we feel good about that later on as well.

Operator

Thank you for your question. The next question is from the line of Darrin Peller with Wolfe Research. Your line is now open.

Unknown speaker

Hey, it's Andrew on for Darrin. Thanks for the question. Just a quick one. Did you disclose dollar count for the full year? I believe it was 1,700 at year-end '21.

So, any framework around that would be appreciated.

Paul Seamon -- Vice President, Finance and Strategy

Hi, Darrin. We're still finalizing some of the metrics for the 10-K, so we don't have that quite yet, but should have it out next week when we publish the final version of that.

Unknown speaker

Helpful. Thank you, Paul.

Operator

Thank you for your question. The next question comes from the line of Andrew Bauch with SMBC. Your line is now open.

Unknown speaker

Hey, guys. It's Lamar on for Andrew. Thanks for taking the question. Last quarter, you mentioned that you expect to exit 2022 with $100 million of new bookings.

So, I just wanted to see if that was the case. And then, can you also provide an initial view on what the implementation pipeline is looking so far two months into the year?

Dushyant Sharma -- Founder and Chief Executive Officer

So, we did achieve that. We finished over $1 million, stronger than we thought we were going to do, so we're very happy with the bookings performance. And we are off to a great start this year as well. And in terms of implementation pipeline, I'd refer you back to the prepared remarks.

I said that if we -- actually, to deliver the top line of our expectations on the top line of the revenue, we don't need to sign any new client. So, that should give you some indication.

Unknown speaker

Got you. And then, just to touch back on the point around the drag that inflation is having on growth, is there anything else here that we should be considering outside of the macro? Is it just delayed implementations of onboardings?

Dushyant Sharma -- Founder and Chief Executive Officer

I think it's two factors, delayed implementation is one of them, and the other one is the pressure on the contributions profit itself on the inflation. So, as you know, in some cases, in some specific sector of our utility client base, as the average payment amount gets inflated, that affects our contribution profit temporarily. And that's what I was trying to say, that client discussions are going well, and they're making adjustments. And some of that has gone -- some of that is already implemented, some of that is already in the process, and some of that will happen throughout the year.

Unknown speaker

Thanks. And, sorry, just one more from me. On IPN, I think, previously, you had said that you expect it to grow to double-digit share of the overall business. Is that still the case?

Dushyant Sharma -- Founder and Chief Executive Officer

I think we -- not quite. So, it's not -- but it's growing faster than our business, the core business you're seeing.

Unknown speaker

OK. All right. Thank you.

Operator

Thank you for your question. The next question is from the line of Tien Huang with JPMorgan. Your line is now open.

Tien-Tsin Huang -- JPMorgan Chase and Company -- Analyst

Hey, Good afternoon. Dushyant, I want to ask for a little bit more color on how you think about the pipeline and the backlog. You know, we've been hearing broadly about bigger deals coming back and enterprises looking to, you know, be more careful what's been but also look for opportunities to be more efficient and have better customer engagement. So, how do you think that all shakes out for Paymentus? And your thoughts on, you know, replenishing your backlog and sizing of the pipeline, that kind of thing.

Dushyant Sharma -- Founder and Chief Executive Officer

Yeah, actually, great question, Tien-Tsin. And so, the way to think about this would be to take a step back. Actually, if you recall that we have horizon one, the mid-market; and then horizon two, which is the enterprise. During the COVID, what we felt was that the discussions that didn't require [Inaudible] presence were the multiple executives involved in making the decision.

Those discussions were happening far and fast, just as fast as earlier, including the implementation. So, signing the client and implementation was fine. But where there used to be a high-touch customer engagement, whether it was related to signing of the client or implementing of such clients, there, we started to see a little bit of slowness during the COVID years. What we have seen is a reversal of the trend, the second half of last year and the beginning of this year as well.

What we're seeing is we're able to meet the clients, both from prospecting but also during implementation process. So, it is happening at a little bit faster pace than earlier. Actually, it's accelerating. And as we shared, last year was great.

It was a significant growth over the year before. And this year is off to a great start. So, we see continued acceleration of our bookings, especially in the enterprise segment as COVID is getting behind us. And frankly, if I may make a broader statement here, as some of the Big Tech companies have started to bring people back home, which makes it easier for other technology companies as well to have a discussion with their employee pool, I think -- and which further translates into clients bringing their technology teams back into the offices.

We believe that that trend will actually be a positive for both in bookings new business, but also bringing customers life at a faster pace.

Tien-Tsin Huang -- JPMorgan Chase and Company -- Analyst

Great. Thank you for that. Just a quick follow-up to that. Like, with the implementation, have you found more efficiency, you know, in how you go about dealing with implementations in general? How big of a focus and -- or how big of an improvement have you seen there, if any? I know there was a lot of changes going on the labor side, but just curious of automation and things like that helped you there, give you better line of sight on implementation cost and delivery?

Dushyant Sharma -- Founder and Chief Executive Officer

Yeah, actually this the -- as you can imagine, we won't be talking about implementation as a factor if we weren't very serious about internally as well and looking at it from all angles. One of the interesting aspects about our implementations is that vast majority of our clients require actually no changes to apply comfortable life. And majority of those -- vast majority of those are in the mid-market segment or the horizon one segment. These clients that require a lot more hand-holding and sophisticated and complex workflows, they tend to be very large clients.

And that's where majority of the revenue is in some ways, and that's where majority of the work ends up being. And even there, we are actually making a lot of investments and trying to figure out can we technologically bring sophisticated business rules engines based on all the different trends we have seen so far and make it even easier without coding to bring the customers alive? And we have been very successful at that in many cases. Like, for example, integration of a large client doesn't take a lot of time for us, large or small. It is more the complex business rules which we are now working on.

So, we're seeing continued progression, and we are getting to a place where, once this macro is somewhat behind us, I think we would have a pretty good handle on how well we are able to execute against implementation timelines, even for larger players.

Tien-Tsin Huang -- JPMorgan Chase and Company -- Analyst

That's great. Thank you, Dushyant. Thank you for your thoughts.

Dushyant Sharma -- Founder and Chief Executive Officer

Thank you.

Operator

Thank you for your question. There are currently no further questions registered. [Operator instructions] The next question is from the line of Jason Kupferberg with Bank of America. Your line is now open.

Unknown speaker

Hey, guys. This is Lisa on for Jason. I just had a question about, like, revenue per transaction. I guess since with the introduction of the new SMB product, are you kind of expecting revenue per transaction for 2023 to increase or kind of remain stable versus 2022?

Paul Seamon -- Vice President, Finance and Strategy

The SMB product is still early stage, and we're not accounting for it in 2023 guidance. We don't expect any material revenue from it. So, it's not going to affect revenue per transaction. We will see, depending on inflation, some pressure on countries and profit per transaction potentially throughout the year, depending on how our pricing actions flow through and other things.

So, it was stable for most of 2022, but we expect a little bit of pressure maybe on the top-line revenue per transaction, as well as contribution per transaction throughout 2023.

Unknown speaker

OK, cool. Thanks.

Operator

Thank you for your question. There are no additional questions waiting at this time, so I'll pass the conference back to the management team for any closing remarks.

Dushyant Sharma -- Founder and Chief Executive Officer

Thank you. Thank you, everyone, for taking the time, really appreciate it, and have a great year. Thank you.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Paul Seamon -- Vice President, Finance and Strategy

Dushyant Sharma -- Founder and Chief Executive Officer

Ashwin Shirvaikar -- Citi -- Analyst

Unknown speaker

Tien-Tsin Huang -- JPMorgan Chase and Company -- Analyst

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