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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 02, 2022

 

 

AvidXchange Holdings, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			001-40898	86-3391192
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
1210 AvidXchange Lane
Charlotte, North Carolina				28206
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 800 560-9305

 

,

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value per share		AVDX		The NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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Item 2.02 Results of Operations and Financial Condition.

On November 2, 2022, AvidXchange Holdings, Inc. issued a press release announcing its financial results for the third quarter ended September 30, 2022. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference.

The information in this Item 2.02 (including Exhibit 99.1) is being furnished under Item 2.02 and Item 9.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.		Description
99.1		Press Release issued by AvidXchange Holdings, Inc. dated November 2, 2022
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			AvidXchange Holdings, Inc.
Date:	November 2, 2022	By:	/s/ Joel Wilhite
			Joel Wilhite Chief Financial Officer

 

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Exhibit 99.1

 

AvidXchange Announces Third Quarter 2022 Financial Results

 

--Third quarter 2022 revenue and adjusted EBITDA results ahead of internal forecast driven by transaction growth, efficiencies and operating expense control

--Comparable (quarter over-quarter) third quarter 2022 revenue growth 26.4% led chiefly by sustained transaction growth and transaction yield

--Comparable revenue growth coupled with gross profit expansion aided by transaction yield & operational efficiency as well as operating expense leverage results in lower net losses

--Raising 2022 business outlook

Charlotte, N.C. –November 2, 2022 – 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 third quarter ended September 30, 2022.

 

“As we anniversary our first year as a publicly traded company, we are extremely pleased with the consistent execution of our operational and financial strategies. We continue to leverage our investments in our product roadmap to drive revenue growth while taking continuous action on optimizing our operating costs. With the macro-economic backdrop still volatile, we remain cautiously optimistic as we look to close the year on a strong note. We believe our value proposition of accounts payable and payments automation offers significant benefits to our buyer and supplier customers across all economic cycles. With quantifiable ROI on costs and revenues, it should have strong resonance among customers particularly amid these uncertain times,” said Michael Praeger, CEO & Co-Founder of AvidXchange.

Third Quarter 2022 Financial Highlights:

 

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."

 

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Third Quarter 2022 Key Business Metrics and Highlights:

 

Full Year 2022 Financial Outlook

As of November 2, 2022, AvidXchange anticipates its revised Full Year 2022 revenue and adjusted EBITDA to be in the following ranges (in millions):

	Current FY 2022 Guidance	Previous FY 2022 Guidance
Revenue	$314.0 - $315.0	$308.0 - $310.0
Adjusted EBITDA(1)	$(18.0) - $(19.0)	$(27.0) - $(29.0)

 

 

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.

 

Earnings Teleconference Information

AvidXchange will discuss its third quarter 2022 financial results during a teleconference today, November 2, 2022, at 10:00 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

 

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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, statements related to our product roadmap and cost optimization efforts, the opportunities for rapid and quantifiable ROI on costs and revenue for our customers, the resilience of our business mode, and 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 excluding the portion of depreciation and amortization and stock-based compensation expense allocated to cost of revenues. We define Adjusted EBITDA as our net loss before depreciation and amortization, impairment and write-off of intangible assets, interest income and expense, income tax expense, stock-based compensation expense, transaction and

 

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acquisition-related costs expensed, change in fair value of derivative instrument, non-recurring items not indicative of ongoing operations, and charitable contributions of common stock. We define Non-GAAP Net Loss as net loss before amortization of acquired intangible assets, impairment and write-off of intangible assets, stock-based compensation expense, transaction and acquisition-related costs expensed, change in fair value of derivative instrument, non-recurring items not indicative of ongoing operations, provision for income taxes and charitable contributions of common stock.

 

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

 

 

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AvidXchange Holdings, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except share and per share data)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Revenues		$	82,411			$	65,176			$	230,175			$	179,144
Cost of revenues (exclusive of depreciation and amortization expense)			29,890				25,792				86,676				71,343
Operating expenses
Sales and marketing			20,241				16,118				57,928				44,176
Research and development			21,997				15,672				62,176				43,225
General and administrative			24,042				15,564				62,704				45,498
Impairment and write-off of intangible assets			-				-				-				574
Depreciation and amortization			8,365				8,164				24,384				22,334
Total operating expenses			74,645				55,518				207,192				155,807
Loss from operations			(22,124	)			(16,134	)			(63,693	)			(48,006	)
Other income (expense)
Interest income			2,031				35				2,906				332
Interest expense			(5,209	)			(4,874	)			(15,261	)			(14,985	)
Change in fair value of derivative instrument			-				(14,552	)			-				(14,690	)
Charge for amending financing advisory engagement letter - related party			-				-				-				(50,000	)
Other expenses			(3,178	)			(19,391	)			(12,355	)			(79,343	)
Loss before income taxes			(25,302	)			(35,525	)			(76,048	)			(127,349	)
Income tax expense			69				2				207				203
Net loss		$	(25,371	)		$	(35,527	)		$	(76,255	)		$	(127,552	)
Accretion of convertible preferred stock			-				(5,012	)			-				(14,417	)
Net loss attributable to common stockholders		$	(25,371	)		$	(40,539	)		$	(76,255	)		$	(141,969	)
Net loss per share attributable to common stockholders, basic and diluted		$	(0.13	)		$	(0.71	)		$	(0.39	)		$	(2.60	)
Weighted average number of common shares used to compute net loss per share attributable to common stockholders, basic and diluted			198,234,392				57,174,627				197,710,104				54,617,200

 

 

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AvidXchange Holdings, Inc.

Unaudited Consolidated Balance Sheets

(in thousands, except share and per share data)

		As of September 30,				As of December 31,
		2022				2021
Assets
Current assets
Cash and cash equivalents		$	411,081			$	562,817
Restricted funds held for customers			927,743				1,242,346
Marketable securities			97,276				-
Accounts receivable, net of allowances of $2,663 and $2,283, respectively			39,716				30,965
Supplier advances receivable, net of allowances of $1,483 and $1,105, respectively			13,210				11,520
Prepaid expenses and other current assets			12,573				10,237
Total current assets			1,501,599				1,857,885
Property and equipment, net			104,869				106,227
Operating lease right-of-use assets			5,300				3,278
Deferred customer origination costs, net			28,342				28,276
Goodwill			165,921				165,921
Intangible assets, net			101,523				100,455
Other noncurrent assets and deposits			5,252				4,261
Total assets		$	1,912,806			$	2,266,303
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable		$	16,542			$	17,142
Accrued expenses			66,914				56,082
Payment service obligations			927,743				1,242,346
Deferred revenue			11,212				9,530
Current portion of contingent consideration			-				688
Current maturities of lease obligations under finance leases			568				670
Current maturities of lease obligations under operating leases			1,334				1,048
Current maturities of long-term debt			4,800				4,800
Total current liabilities			1,029,113				1,332,306
Long-term liabilities
Deferred revenue, less current			18,156				20,350
Contingent consideration, less current portion			70				70
Obligations under finance leases, less current maturities			61,853				61,172
Obligations under operating leases, less current maturities			5,019				3,448
Long-term debt			123,195				119,880
Other long-term liabilities			3,059				6,022
Total liabilities			1,240,465				1,543,248
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.001 par value; 50,000,000 shares authorized, no shares issued and outstanding as of September 30, 2022 and December 31, 2021			-				-
Common stock, $0.001 par value; 1,600,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 198,488,663 and 196,804,844 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively			198				197
Additional paid-in capital			1,620,949				1,594,780
Accumulated deficit			(948,806	)			(871,922	)
Total stockholders' equity			672,341				723,055
Total liabilities and stockholders' equity		$	1,912,806			$	2,266,303

 

 

 

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AvidXchange Holdings, Inc.

Unaudited Consolidated Statements of Cash Flows

(in thousands)

	Nine Months Ended September 30,
	2022				2021
Cash flows from operating activities
Net loss	$	(76,255	)		$	(127,552	)
Adjustments to reconcile net loss to net cash used by operating activities
Depreciation and amortization expense		24,384				22,334
Amortization of deferred financing costs		1,018				1,018
Provision for doubtful accounts		3,751				1,075
Stock-based compensation		23,767				3,109
Fair value adjustment of contingent consideration		-				140
Accrued interest		1,765				811
Loss on fixed asset disposal		36				3
Noncash expense on contract modification - related party		-				50,000
Impairment and write-off on intangible and right-of-use-assets		-				574
Amortization of investments held to maturity		(1,123	)			-
Fair value adjustment to derivative instrument		-				14,690
Deferred income taxes		162				162
Changes in operating assets and liabilities
Accounts receivable		(9,493	)			(3,730	)
Prepaid expenses and other current assets		(2,337	)			(4,254	)
Other noncurrent assets		(1,061	)			(2,593	)
Deferred customer origination costs		(66	)			(2,185	)
Accounts payable		167				(11,640	)
Deferred revenue		(511	)			13,801
Accrued expenses and other liabilities		6,097				3,401
Operating lease liabilities		(165	)			(479	)
Total adjustments		46,391				86,237
Net cash used in operating activities		(29,864	)			(41,315	)
Cash flows from investing activities
Purchase of short-term investments held to maturity		(310,025	)			-
Proceeds from maturity of short-term investments held to maturity		213,872				-
Purchases of equipment		(2,677	)			(939	)
Purchases of real estate		(767	)			-
Purchases of intangible assets		(20,363	)			(12,582	)
Proceeds from sales of property and equipment		-				5
Acquisition of business, net of cash acquired		-				(45,963	)
Contingent consideration and deferred obligation payments near acquisition date		-				(1,292	)
Supplier advances, net		(4,699	)			(3,467	)
Net cash used in investing activities		(124,659	)			(64,238	)
Cash flows from financing activities
Proceeds from the issuance of long-term debt		2,367				2,288
Principal payments on finance leases		(666	)			(872	)
Proceeds from issuance of common stock		828				2,623
Proceeds from issuance of common stock under Employee Stock Purchase Plan		602				-
Payment of contingent consideration at acquisition date fair value		(344	)			-
Payment service obligations		(314,603	)			733,153
Net cash (used in) provided by financing activities		(311,816	)			737,192
Net (decrease) increase in cash, cash equivalents, and restricted funds held for customers		(466,339	)			631,639
Cash, cash equivalents, and restricted funds held for customers
Cash, cash equivalents, and restricted funds held for customers, beginning of year		1,805,163				390,078
Cash, cash equivalents, and restricted funds held for customers, end of period	$	1,338,824			$	1,021,717
Supplementary information of noncash investing and financing activities
Right-of-use assets obtained in exchange for new finance lease obligations	$	689			$	174
Right-of-use assets obtained in exchange for new operating lease obligations		2,831				877
Common stock issued in business combination		-				31,000
Common stock issued as contingent consideration		344				500

 

 

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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		1				93
Interest paid on notes payable		8,134				7,619
Interest paid on finance leases		4,323				5,537
Options issued in connection with bonus compensation		-				48

 

 

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AvidXchange Holdings, Inc.

Unaudited Reconciliation of GAAP to Non-GAAP Measures

(in thousands)

	Three Months Ended September 30,								Nine Months Ended September 30,
	2022				2021				2022				2021
Reconciliation from Revenue to Non-GAAP Gross Profit and Non-GAAP Gross Margin:
Total revenues	$	82,411			$	65,176			$	230,175			$	179,144
Expenses:
Cost of revenues (exclusive of depreciation and amortization expense)		(29,890	)			(25,792	)			(86,676	)			(71,343	)
Depreciation and amortization expense		(4,924	)			(5,068	)			(13,930	)			(14,171	)
GAAP Gross profit	$	47,597			$	34,316			$	129,569			$	93,630
Adjustments:
Stock-based compensation expense		1,010				90				3,130				230
Depreciation and amortization expense		4,924				5,068				13,930				14,171
Non-GAAP gross profit	$	53,531			$	39,474			$	146,629			$	108,031
GAAP Gross margin		57.8	%			52.7	%			56.3	%			52.3	%
Non-GAAP gross margin		65.0	%			60.6	%			63.7	%			60.3	%
Reconciliation from Net Loss to Non-GAAP Net Loss:
Net loss	$	(25,371	)		$	(35,527	)		$	(76,255	)		$	(127,552	)
Amortization of acquired intangible assets		3,623				3,676				10,952				9,181
Impairment and write-off of intangible assets		-				-				-				574
Provision for income taxes		69				2				207				203
Stock-based compensation expense		8,718				1,157				23,767				3,109
Transaction and acquisition-related costs		3				662				280				3,708
Change in fair value of derivative instrument		-				14,552				-				14,690
Non-recurring items not indicative of ongoing operations (1)		1,343				174				1,286				50,224
Total net adjustments		13,756				20,223				36,492				81,689
Non-GAAP net loss	$	(11,615	)		$	(15,304	)		$	(39,763	)		$	(45,863	)
Reconciliation from Net Loss to Adjusted EBITDA:
Net loss	$	(25,371	)		$	(35,527	)		$	(76,255	)		$	(127,552	)
Depreciation and amortization		8,365				8,164				24,384				22,334
Impairment and write-off of intangible assets		-				-				-				574
Interest income		(2,031	)			(35	)			(2,906	)			(332	)
Interest expense		5,209				4,874				15,261				14,985
Provision for income taxes		69				2				207				203
Stock-based compensation expense		8,718				1,157				23,767				3,109
Transaction and acquisition-related costs		3				662				280				3,708
Change in fair value of derivative instrument		-				14,552				-				14,690
Non-recurring items not indicative of ongoing operations (1)		1,343				174				1,286				50,224
Adjusted EBITDA	$	(3,695	)		$	(5,977	)		$	(13,976	)		$	(18,057	)
Reconciliation from Revenue Growth to Organic Revenue Growth:
Revenues	$	82,411			$	65,176			$	230,175			$	179,144
Less: Revenues from acquisitions (2)		(523	)			-				(8,671	)			-
Organic revenues	$	81,888			$	65,176			$	221,504			$	179,144
Revenue growth		26.4	%							28.5	%
Organic revenue growth		25.6	%							23.6	%
(1) For the three and nine months ended September 30, 2022, includes $1,621 of restructuring costs and a benefit of $308 for a liability release related to the FastPay acquisition that closed in July 2021.
(2) Acquisitions include FastPay and PayClearly, which were not in the prior year comparable periods.

 

 

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