We'll Begin Shortly © AvidXchange Holdings, Inc. 2023
Agenda © AvidXchange Holdings, Inc. 2023 TOPIC SPEAKER TIME AvidXchange & Market Overview Michael Praeger 8:15am – 8:45am Go-To-Market & Customers James Sutton 8:45am – 9:00am Powering the Flywheel (Gears 1&2) Dan Drees 9:00am – 9:20am Partner Fireside Chat Dan Drees & Patrick Ghilani 9:20am – 9:40am Break 9:40am – 9:50am Powering the Flywheel (Gears 3&4) Dan Drees 9:50am – 10:10am Fireside Chat Dan Drees and Kelly Vicknair 10:10am – 10:20am Q&A Michael Praeger & Dan Drees 10:20am – 10:30am Operations John Feldman 10:30am – 10:50am Break 10:50am – 11:00am Our DNA Todd Cunningham 11:00am – 11:15am Technology Angelic Gibson 11:15am – 11:30am Fireside Chat Michael Praeger, Dan Drees, Angelic Gibson 11:30am – 11:45am Lunch 11:45am – 12:20pm Financial Overview Joel Wilhite 12:20pm – 12:50pm Closing Remarks Michael Praeger 12:50pm – 1:00pm
The material in this presentation (this "Presentation") has been made available to you with the consent of AvidXchange Holdings, Inc. (the "Company") for informational purposes only. Forward-Looking Statements This Presentation contains “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 prospects, including our guidance and 3 and 5 year milestones, targets and objectives, and often contain words such as: “anticipate,” “strive to achieve,” “intend,” “plan,” “goal,” “objectives,” “outlook,” “seek,” “believe,” “project,” “estimate,” “expect,” “future,” “likely,” “may,” “should,” “will” and similar words and phrases indicating future results. The information presented in this Presentation related to our expectations of future performance 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 the Company’s filings with the Securities and Exchange Commission (“SEC”), including, without limitation, the Company’s Annual Report on Form 10-K, Quarterly Report on Form 10-Q filed for the period ended March 31, 2023, 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 Presentation 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. This Presentation contains estimates, projections and other information concerning the Company’s industry and its business, as well as data regarding market research, estimates and forecasts prepared by the Company’s management. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Non-GAAP Measures and Other Performance Metrics This presentation contains certain non-GAAP measures, including free cash flow, non-GAAP gross profit and non-GAAP gross margin, Adjusted EBITDA, non-GAAP Adjusted EBITDA gross margin, which are provided to assist in an understanding of the business, performance and projections of AvidXchange. These measures should only be considered as supplemental to, and not as superior to, financial measures prepared in accordance with GAAP. Please refer to the Appendix and footnotes of this presentation for a reconciliation of the non-GAAP financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with GAAP. Disclaimer © AvidXchange Holdings, Inc. 2023
Michael Praeger Chairman, CEO & Co-Founder © AvidXchange Holdings, Inc. 2023
Setting The Stage © AvidXchange Holdings, Inc. 2023 Four Objectives We Have for You Today Our Business Driving Profitability Growth Strategies Our Team
© AvidXchange Holdings, Inc. 2023 Transform the way middle market companies pay and receive bills. Our Mission Our Purpose To realize potential, fulfill dreams and win big together for our customers, teammates, shareholders and the communities of our teammates.
Our 5 Key Ingredients to our Success – Applying Leadership & Vision Our Key Ingredients for Creating Enterprise Value for Shareholders Performance DNA / Culture 1 Our Mindsets of growth, connectedness and passion for our customers Leverage deep connections for increased levels of performance Our focus on performance, communication & developing our teammates Customer Obsessed Leverage customer feedback to delivery impactful products Continue this experience beyond current offerings 2 Scale & Talent Focus on developing our teammates and attracting talent for the next milestones of growth Charlotte is a strategic advantage in building our talent base – teammates are our greatest asset 5 Efficient Growth Focused Embracing the change mgmt. required to achieve Rule of 40+ and continue growing at 20%+ Accelerate new vertical markets and innovative product offerings 4 Innovation Deliver next generation technology to drive value for customers and shareholders AP Automation Software Payment Network Cash Flow Management 3 Recipe for Long Term “Rule of 50” Growth and Profitability © AvidXchange Holdings, Inc. 2023
© AvidXchange Holdings, Inc. 2023 My Job as Chairman and CEO of AvidXchange Importance of Getting Decisions Right in 4 Areas Business Model and Growth Strategies Build for both the immediate market opportunity and longer-term overall industry opportunity while striving to achieve efficient 20%+ growth Scaling and Operational Efficiency Strategies Relentless focus on gross margins in the near term, seeking to leverage AI across functions with greater focus on operating margins with scale and striving to achieve industry leading “Rule of 40” metrics Capital Allocation is Our Oxygen Take a disciplined approach to strategic capital allocation balancing future innovation, operating scale, and potential acquisitions Managing our Talent at Each Level of Growth Understanding the types, experiences, and skillsets of talent required at each level of growth is critical. Focus on building current team to be successful when leading the middle market for AP / Payment Automation at our long-term goal of $1 billion in revenue.
Executive Team Michael Praeger Chairman, CEO & Co-Founder Joel Wilhite Chief Financial Officer Todd Cunningham Chief People Officer Angelic Gibson Chief Information Officer Strong Leadership with Deep Bench of Talent Our Experienced, Founder-Led Management Team © AvidXchange Holdings, Inc. 2023 Christina Quaine Chief Information Security Officer Martin Smith SVP, Strategic Initiatives & Integration Serdar Dincaslan SVP, Product Ryan Stahl SVP, General Counsel Mo Trezies SVP, Software Engineering John Feldman SVP, Operations Manu Sood SVP, Platform Delivery & Ops Secil Baysal SVP, Product Cameron White SVP, Finance Subhaash Kumar SVP, Investor Relations James Sutton Chief Revenue Officer Dan Drees President
Matthew Harris Lead Independent Director Asif Ramji Board Member Teresa Mackintosh Board Member Michael Praeger Chairman, CEO & Co-Founder Sonali Sambhus Board Member James (Mike) McGuire Board Member Jim Hausman Board Member Wendy Murdock Board Member Lance Drummond Board Member The AvidXchange Board Satisfies Nasdaq’s Listing Rule Regarding Diverse Board Representation Our Highly Experienced Board © AvidXchange Holdings, Inc. 2023
What We Do © AvidXchange Holdings, Inc. 2023
© AvidXchange Holdings, Inc. 2023 We are the company that is transforming the middle market Middle market companies today operating digitally, with an automated accounts payable and payment process, according to Payments Journal. 30%
AvidXchange Automates the Entire AP and Payment Workflow © AvidXchange Holdings, Inc. 2023 Cloud-Based Solution Powering a 2-Sided Network Suppliers Send Invoices Suppliers 1 3 Sync Data to Accounting System 2 Buyers Manage Purchase Orders & Approve Invoices 6 Suppliers Access Information, Manage Payment & Remittance Business Rules and Accelerate Cash Flow 5 Payments Matched & Suppliers Paid Buyers Approve Payments 4 Buyers
$68bn Total Payment Volume in 2022 965K Suppliers* 70mm Transactions Processed in 2022 8,800 Buyers Growing supplier density leads to increased e-payment adoption which drives higher monetization rates Two-sided network Variety of faster payment methods Data-driven Proprietary, Market Leading B2B Payments Network for Middle Market Buyers and Their Suppliers © AvidXchange Holdings, Inc. 2023 AvidPay Network Our AvidPay Network *Paid Within the past 5 years.
SUPPLIERS PAID VIA THE AVIDPAY NETWORK OVER THE PAST 7 YEARS* GROWTH OF OUR AVIDPAY NETWORK OUR SECRET SAUCE © AvidXchange Holdings, Inc. 2023 Enterprise Middle Market SMB 2016 2017 2018 2019 2020 2021 300k+ 400k+ 500k+ 600k+ 700k+ 825k 2022 965k 21% Overall Compound Annual Suppliers Growth *Represents suppliers paid during the prior 5-year period through the network.
© AvidXchange Holdings, Inc. 2023 AvidXchange is Purpose Built for the Middle Market The Largest Network of Unique Suppliers 965,000 supplier customers of all sizes nationwide paid within the last 5 years Deep Vertical Domain Expertise & Strategic Partnerships Strategic partnerships with industry leaders like Mastercard, Wise, etc. 220+ Integrations Supporting Both Vertical Industry & Horizontal Customers Our solutions are highly integrated to our customers core accounting / ERP systems supporting the business requirements of our vertical and horizontal customers Industry Leading AP Automation & Payment Services Built for both the vertical and horizontal industry needs of middle market companies
MIDDLE MARKET SMB ENTERPRISE We Believe Middle Market Customers Have Unique Needs © AvidXchange Holdings, Inc. 2023 ILLUSTRATIVE AR/AP SOLUTIONS ANNUAL REVENUE EMPLOYEE SIZE AVAILABLE US MARKET (COUNT OF BUSINESSES) ADOPTION OF AUTOMATION BACK OFFICE COMPLEXITY SUPPLY CHAIN COMPLEXITY ILLUSTRATIVE ACCOUNTING SYSTEMS > $1bn 1000+ employees ~6k Maturing $5mm-$1bn ~50-1000 employees ~435k Early Adopter < $5mm ~1-50 employees ~23mm Emerging
Our Large Market Opportunity and Go-to-Market Strategies © AvidXchange Holdings, Inc. 2023
$25T+ B2B Payments in North America annually $40B Est. U.S. Annual B2B Opportunity with Supplier Financing / Cash Flow Management $20B Est. AP Automation Solutions and B2B Payment Revenue Opportunity The Middle Market B2B Payments Industry is Massive… © AvidXchange Holdings, Inc. 2023 Source: Mastercard Real Time Payments Innovation Playbook (October 2018) and AvidXchange estimates $316M 2022 Revenue
© AvidXchange Holdings, Inc. 2023 Tailwinds Accelerating Middle Market Adoption Movement to the “Cloud” and Business Continuity COVID-19 highlighted the importance of having all key financial applications in the Cloud along with automation for business continuity and support “work from home” Fraud Risk Growing concerns over fraud risk and data privacy with paper invoices and paper checks with the majority of B2B payment fraud occurring with paper checks Generational Shift Growing trend towards tech-savvy younger next generation CFOs and finance leaders are taking on increased automation leadership roles in customers Compelling ROI & Value Proposition Users have experienced the value proposition benefits of SaaS / cloud solutions driving lower cost of ownership along with rapid (less than 12 months) return on investment for AvidXchange offerings
© AvidXchange Holdings, Inc. 2023 Labor Intensive Paper Intensive High Cost Traditional Workflows are Manual, Slow, and Expensive $12 Estimated Savings Per Transaction Cost to Process Paper Invoice Cost to Process Paper Check Total Cost of AP Process $16.001 $3.002 $19.00 BEFORE AUTOMATION Goldman Sachs Equity Research AFP Payments Study Paymentcloudinc Invoice Code Open Email Route Approve Select Bank Rec Pay File Follow-up ERP Integration Research Filing Paper Invoice Automated Cost Check Process Automated Cost $5.891 $1.503 Total AP Automated Cost $7.39 AFTER AUTOMATION Paperless Digital Process Enhanced Controls Efficient & Cost Effective Increased Visibility Real Time Anyplace / Anytime Access
Our Vertical and Horizontal Strategy © AvidXchange Holdings, Inc. 2023 Verticals (Direct) Construction Real Estate CAM Media Healthcare Social Services Financial Services 200+ purpose-built integrations with different accounting systems Education Hospitality Horizontals (Strategic Software ER Partners) 20+ purpose-built integrations with different accounting systems
Note: Mastercard B2B Hub does not provide funds transfers; funds transfer services provided by FDIC-insured banks. Mastercard B2B HUBTM Powered by AvidXchange™ Mastercard’s AP automation and B2B payments offering for their Bank customers Multiyear agreement for the middle market Mastercard led go to market with highly integrated sales and integration team in place Key strategy for Mastercard’s B2B expansion © AvidXchange Holdings, Inc. 2023
Strong Partner Relationships Provide a Competitive Advantage Banks provide a wider suite of products to customers by offering AvidXchange’s AP automation and payment software Banks leverage their long-term business customer relationships to sell AvidXchange products Bank Channel Numerous reseller and referral partners with flexible revenue sharing / commission agreements Training, implementation, account management, and customer support are provided by AvidXchange Middle Market Software and Solution Partners 10+ Bank Referral Partners Reseller Partners Referral Partners 190+ Referral Partners Reseller Partners Referral Partners © AvidXchange Holdings, Inc. 2023
Our Growth Strategies © AvidXchange Holdings, Inc. 2023
$40B Est. AP Automation Solutions and B2B Payment Revenue Opportunity Introducing our Organic Growth Plan to Reach the Following Milestones Our Five-Year Growth Objectives © AvidXchange Holdings, Inc. 2023 $1B ~20k Buyer Customers Impacted Note: The Company’s illustrative growth objectives are based on a number of assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that the Company will achieve these results.
Our Organic Growth Strategy via the AvidXchange Flywheel © AvidXchange Holdings, Inc. 2023 Flywheel Market to Targeted Industry Verticals Lever 1 Deliver Great AP Automation Software (Invoice & Pay) Gear 1 Buyer Customer 1 Reduce Delivery Time & Costs (Invoices & Payments) Lever 3 Maximize ePayments Penetration Through The AvidPay Network Gear 3 Supplier Customer 3 Develop Channels for Horizontal Distribution Lever 2 Maximize Transactions Processed on our Platform Gear 2 2 New Innovations & Market Expansion to Delight Customers Lever 4 Leverage Data to Drive Value Across the Network Gear 4 4
Tuck in Acquisitions to Advance our Vertical Markets Accelerates our Growth Our AvidXchange M&A Strategy © AvidXchange Holdings, Inc. 2023 Buyer Customer Acquisition Vertical Market Expansion Under Monetized Spend Product/ Capabilities Enhancement International Expansion Customer Vertical Spend Product AVDX Acquisitions by Strategy
Industry Leading Purchase to Cash Software Enabled B2B Network for the Middle Market Launch of Invoice Accelerator 2.0 Comprehensive Supplier Cash Flow Management Tools Expanded Payment Modalities – Leveraging 3rd Party Networks Expanded Buyers / Supplier Financing Offerings Integrated T&E Card and Spend Management Offering Supply chain insights and Data Services Horizontal Scaling Vertical Marketplace Services $1B Goal Gear 3 Gear 1 & 2 Gear 4 REVENUE TIME AvidXchange Strategic Growth Horizons © AvidXchange Holdings, Inc. 2023 $366M 2023E Software Enabled Payments Company Launch of the AvidPay Network Creation of our Closed Loop Network – AvidPay Direct to enable Pricing Optimization Supplier Onboarding Innovation to convert Paper Checks to Electronic Payments Expansion of Verticals AP Automation Software AvidInvoice Cloud based Subscription Model Focused on the Real Estate Vertical $10M 2012 $0 2000 Note: The Company’s illustrative growth objectives are based on a number of assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that the Company will achieve these results.
Dan Drees President © AvidXchange Holdings, Inc. 2023
Organization Overview 2023 AvidXchange, Inc. z Dan Drees, President ~1200 Teammates ~2 Teammates Business Planning ~200 Teammates Product Functions: Process and Strategy Business Planning and team enablement Functions: Procure to Invoice Product Operations Product Design BIDS / Analytics Pay Platform ~30 Teammates Marketing Functions: Customer, Internal & PR Communications Brand & Insights Creative Website and Digital ~700 Teammates Operations Functions: Service & Fulfillment Financial Services Technical Support Risk Management Change Delivery Treasury Operations & Onboarding Payments Operations Invoice & Utility Operations Program Management ~300 Teammates Revenue Functions: Revenue Operations Sales Customer Success Product Marketing Demand Generation Campaign & Events Marketing
James Sutton Chief Revenue Officer © AvidXchange Holdings, Inc. 2023
Process Connected People Customer Obsessed Performance Growth Mindset © AvidXchange Holdings, Inc. 2023 Revenue Organization Vision Build a Word Class Revenue Organization to Scale Growth to our Long-Term Goal of $1B in Revenue Performance Culture
© AvidXchange Holdings, Inc. 2023 Revenue Organization Structure z Revenue Organization Structure ~300 Teammates ~20 Teammates ~15 Teammates ~60 Teammates ~100 Teammates ~65 Teammates ~30 Teammates GTM Strategy & Operations Product Marketing Business Development Sales (Buyer) Objective: Plan & processes Functions: GTM Alignment Tools & analytics Process optimization Objective: Product positioning Functions: Positioning product Pricing & packaging Collateral creation Objective: Generate demand Functions: Campaigns Lead development Digital & human led Objective: Grow customer base Functions: Vertical specialization Solution selling Channels management Sales (Supplier) Objective: Grow network Functions: Velocity sales Efficient machine Scalable operation Customer Success Objective: Customer value Functions: Onboarding & adoption Relationship management Expansion & renewals
Customer Experience Customer Obsessed How the Revenue Org Positively Impacts the AvidXchange Flywheel Retain & Grow Consumption Grow Sales & Marketing Attract Customers by Solving Their Needs Educate Sales & Marketing Deliver Value Through Adoption Adopt Customer Success & Care Deploy Critical Product Solutions Deploy Customer Success & Onboarding © AvidXchange Holdings, Inc. 2023
Two Sided Network © AvidXchange Holdings, Inc. 2023 AvidXchange’s Dual Funnel Revenue Growth Model Wins Opportunities Middle Market Buyer TAM Supplier Onboarding & Enrollment Supplier Engagement Payment Monetization Customer Accounts Payable Supplier Ecosystem 8,800 Buyers 965,000 Suppliers* *Paid within the past 5 years.
Direct Bank Channel Partner Channel Buyer – Go to Market 3 Banks with a Total of ~200 Sellers Referral Banks - 10+ Partners Solution Consultants ~10 Customer Onboarding ~100 VAR Reseller & Partner Channels > 100 Sellers ERP Referral Partners ~70 Partners Marketing (Digital & In Person) ~70 Customer Success ~30 9 Verticals with Sales Team of ~65 Onboarding Demand Gen Sales © AvidXchange Holdings, Inc. 2023
BUYER Sales Funnel Overview © AvidXchange Holdings, Inc. 2023 1 Increased Opportunity Growth Customers are directed to the AvidXchange ecosystem from their ERP 2 Optimized Channel Mix Efficiencies are unlocked with a profile that is inbound driven rather than outbound driven 3 Higher Conversion Rates Building tailored solutions with the ERP unlock best of breed capabilities that are sticky and unique to customers Strategy to Scale Efficiently 4 LTV to CAC Efficiencies Specialization and Inbound funnel unlock a more efficient Go-To-Market Dedicated Alliance Management 5 Engineering Teams Allotted to Integrations Dedicated Customer Success Dedicated Customer Care Custom Pricing AvidXchange’s Partnership Funnel 220+ Purpose Built Integrations Deepen Relationships & Functionality Exclusive Partners
BUYER Sales Funnel Overview © AvidXchange Holdings, Inc. 2023 1 Increased Opportunity Growth Customers are directed to the AvidXchange ecosystem from their ERP 2 Optimized Channel Mix Efficiencies are unlocked with a profile that is inbound driven rather than outbound driven 3 Higher Conversion Rates Building tailored solutions with the ERP unlock best of breed capabilities that are sticky and unique to customers Purpose Built Integrations & Exclusivity Unlock: 4 LTV to CAC Efficiencies Specialization and Inbound funnel unlock a more efficient Go-To-Market Opportunities Created 16% CAGR* Industry & Partner Expansion Product Evolution Verticalized Marketing *Illustrative
BUYER Sales Funnel Overview © AvidXchange Holdings, Inc. 2023 1 Increased Opportunity Growth Customers are directed to the AvidXchange ecosystem from their ERP 2 Optimized Channel Mix Efficiencies are unlocked with a profile that is inbound driven rather than outbound driven 3 Higher Conversion Rates Building tailored solutions with the ERP unlock best of breed capabilities that are sticky and unique to customers Purpose Built Integrations & Exclusivity Unlock: 4 LTV to CAC Efficiencies Specialization and Inbound funnel unlock a more efficient Go-To-Market Mix by Channel 27% Partner TSV CAGR* Strategic ERP Partnerships Larger Channel Deals More VAR & Solution Providers *Illustrative
BUYER Sales Funnel Overview © AvidXchange Holdings, Inc. 2023 1 Increased Opportunity Growth Customers are directed to the AvidXchange ecosystem from their ERP 2 Optimized Channel Mix Efficiencies are unlocked with a profile that is inbound driven rather than outbound driven 3 Higher Conversion Rates Building tailored solutions with the ERP unlock best of breed capabilities that are sticky and unique to customers Purpose Built Integrations & Exclusivity Unlock: 4 LTV to CAC Efficiencies Specialization and Inbound funnel unlock a more efficient Go-To-Market Conversion Rate Verticalized GTM Raised Partner Referral Mix Streamlined Customer experience
BUYER Sales Funnel Overview © AvidXchange Holdings, Inc. 2023 1 Increased Opportunity Growth Customers are directed to the AvidXchange ecosystem from their ERP 2 Optimized Channel Mix Efficiencies are unlocked with a profile that is inbound driven rather than outbound driven 3 Higher Conversion Rates Building tailored solutions with the ERP unlock best of breed capabilities that are sticky and unique to customers Purpose Built Integrations & Exclusivity Unlock: 4 LTV to CAC Efficiencies Specialization and Inbound funnel unlock a more efficient Go-To-Market LTV / CAC Increased Levels of Production Channel Efficiency Upsell, Cross-Sell & Retention LTV to CAC represents the expected Lifetime Value (LTV) of our new buyer customers relative to the cost to acquire and onboard those customers
Supplier Enrollment Continuous Onboarding Process Upon Payment File Upload * 65 Dedicated Supplier Growth Teammates APD VCC CHECK Option 1 Virtual Card Capture Quickest payment path Option 2 AvidPay Direct Enhanced direct deposit Option 3 Mail A Check Aged payment path Buyer Approves Payment File Payment Generated (per Supplier direction) 70% of Suppliers are already in Network for many of our buyers New Supplier Engagement: Educate & lead with VCC and APD Existing Check Supplier: Outreach to switch to VCC or APD © AvidXchange Holdings, Inc. 2023
Increasing Customer Base Towards Our Long-Term Goal of $1B in Revenue Customer Growth Strategy 104% Net Transactional Retention Strategic Customer Success 1 Subject Matter Expertise 2 Next Gen Features 3 Generative AI 4 New Market Penetration 5 © AvidXchange Holdings, Inc. 2023
Dan Drees President © AvidXchange Holdings, Inc. 2023
Driving Organic Growth © AvidXchange Holdings, Inc. 2023 Flywheel Leverage Data to Drive Value Across the Network Gear 4 Maximize ePayments Penetration Through Supplier Relationships Gear 3 Maximize Transactions Processed on our Platform Gear 2 Deliver Great AP Automation Software (Invoice & Pay) Gear 1
© AvidXchange Holdings, Inc. 2023 Gear 1 - Key Drivers of Buyer Sales Breakdown of ‘23-’25 TSV Growth Levers CAGR* 15%+ Gear 1 – Feature Themes Purchase Automation Receipt Automation Line-Item Capture 2 & 3-Way Match Job Cost Lien Waiver Invoice Automation AvidCapture Invoice Processing Module Due Date Capture Terms Capture Next Gen Pay Time Sensitive Payments Expanded Currencies Workflow Automation AvidAnalytics Spend Mgmt./T&E *Illustrative TSV = Total Sales Value
Gear 2 – Integration Drivers Accounting Systems Buildium Acumatica M3 CINC Blackbaud MIP © AvidXchange Holdings, Inc. 2023 Gear 2 - Key Drivers of Buyer Sales Breakdown of ‘23-’25 TSV Growth Levers CAGR* 15%+ Bank Channel Growth Bank of America KeyBank Fifth Third Bank Referral Relationships Acct Sys Funnel Other Strategic Concur Paperless (Construction) Media Banks VAR Resellers *Illustrative TSV = Total Sales Value
Scaling Our Integrations with Reliable, Cost Effective and User-Friendly Connections to Customers and ERP Partners AvidConnect Platform © AvidXchange Holdings, Inc. 2023 Avid Connect Middleware Avid Connect APIs AvidSuite AvidPay Other Avid Products File Connector AvidConnect Portal AvidConnect Developer Portal ERP Connectors ERP ERP ERP ERP FTP On-Prem Web Upload
ERP Partnership Development Lifecycle Long Term Partner Value Value Demonstration Customer Driven File-based Integration Feature Shakeout ERP Relationship Initiation Repeatable Build Multiple Customers / Sub-Groups Targeted Marketing Product Fit Refinement ERP Partnership API (AvidConnect) Rev Share Joint GTM Marketplace listing Strategic Partner Dedicated ERP GTM & Onboarding Default AP Provider Embedded Customer Experience Long-Term Rev Share © AvidXchange Holdings, Inc. 2023 Customer Experience Joint GTM & Acquisition Scale Partner Revenue Opportunity YEAR 1 YEAR 2 YEAR 3 TIMELINE ~350 Mid Mkt ERPs
Dan Drees President © AvidXchange Holdings, Inc. 2023 Patrick Ghilani CEO, MRI Fireside Chat
Break 10 minutes © AvidXchange Holdings, Inc. 2023
Gear 3: Maximize ePayment Adoption © AvidXchange Holdings, Inc. 2023 Flywheel Leverage Data to Drive Value Across the Network Gear 4 Maximize ePayments Penetration Through Supplier Relationships Gear 3 Maximize Transactions Processed on our Platform Gear 2 Deliver Great AP Automation Software (Invoice & Pay) Gear 1
Capturing More of the Unmonetized Network Spend Gear 3: Driving Pay Adoption © AvidXchange Holdings, Inc. 2023 VCC/-STP Straight Through Processing APD AvidPay Direct Classic Custom Remittance Real Time ~7 Days CHECK Transaction Based ~50bps ~100bps ~200bps+ Low High Med Data: Payment AR/Recon Value VCC Classic VCC Custom Remittance SPEED PRICE Unlocking Value in Our Existing Network Real Time Payment (RTP) rails for high value transactions. Expanded price/volume options for AvidPay Direct Transaction based pricing for specific payment use cases: Disbursements, Transfers, eCheck. Data: flexible / automated remittance
Dan Drees President © AvidXchange Holdings, Inc. 2023 Kelly Vicknair VP & GM of Sales Fireside Chat
Gear 4: Leverage Data to Drive Value Across the Network © AvidXchange Holdings, Inc. 2023 Flywheel Leverage Data to Drive Value Across the Network Gear 4 Maximize ePayments Penetration Through Supplier Relationships Gear 3 Maximize Transactions Processed on our Platform Gear 2 Deliver Great AP Automation Software (Invoice & Pay) Gear 1
$20B Est. U.S. Annual B2B Opportunity with Supplier Financing / Cash Flow Management Invoice Accelerator Five-Year Growth Objectives © AvidXchange Holdings, Inc. 2023 ~5% Of Total Revenue 75%+ Gross Margin Note: The Company’s illustrative growth objectives are based on a number of assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that the Company will achieve these results.
58 Invoice Accelerator Payment Advance Solution and the Benefits for Suppliers Enhanced Security Verification + Multi-Layer Fraud Monitoring Technology © AvidXchange Holdings, Inc. 2023 Saves Time and Convenient Customized “Set and Forget” Settings CURRENT INVOICE ACCELERATOR 1.0 2023 INVOICE ACCELERATOR 2.0 PRODUCT 24/7 Access with Notifications Modern Digital Self-Service Onboarding Intelligent Access to More Transactions Real-Time AI/Machine Learning Risk Analysis Immediate Access for Emergencies Instant and Same Day Fund Options CUSTOMER VALUE Agent Assisted Onboarding Rule-Based Transaction Eligibility Limited Access to Auto-Accelerate Limited Payment Method and Speed of Receipt Options
Later © AvidXchange Holdings, Inc. 2023 Gear 4 Opportunity Now Next Discount Optimizer Invoice Accelerator 2.0 AvidAnalytics AVDX Preferred Supplier Recommendations Marketplace Services Utility 2.0 - Rapid Pay Offering Due Date Manager Utility 2.0 - Rapid Pay Offering
Purchase/Invoice Automation Next Gen Pay Offering Spend Mgmt./Card Invoice Accelerator 2.0 AvidAnalytics AvidConnect ERP Funnel Flexible/Customized Remittance Data Next Gen Pay Offering © AvidXchange Holdings, Inc. 2023 Flywheel Driver Overview GEAR 1 GEAR 2 GEAR 3 GEAR 4
Q&A © AvidXchange Holdings, Inc. 2023
SVP, Operations John Feldman © AvidXchange Holdings, Inc. 2023
Invoice Operations Invoice Uploaded to AvidXchange Workflow Routing Invoice Ingested Through 5 Rails E-Mail API Upload Scan Partner Invoice Routed to Ideal Indexer Intelligently Routed to Indexing Partner Avid Capture 2 Manual Shifting to © AvidXchange Holdings, Inc. 2023 Lifecycle of a Buyer Customer Implementation Education Configuration Testing Volume Certification End User Training Go Live Processing Adoption Follow up ONBOARDING 1 Treasury / VC OpsTreasury / VC Ops Payment Execution Payment Routing Engine VC Operations AvidPay Approval Payment Creation VCC Check APD Treasury Funding IVR Dialing Online Clicking Bulk File Transfers Secure E-mail Manual Check APD ACH+ USPS 3 4 5 Submit to AvidPay Planning & Analytics Process and Change Delivery Risk Management Technical Support & Service via Phone, Chat and Email CUSTOMER SERVICE
Note: All amounts are FY 2022 non-GAAP Cost of Revenue (COR). All percentages are shown as percent of Total non-GAAP COR. $114M Total Cost of Revenue (COR) Span of Control of the Operations Team © AvidXchange Holdings, Inc. 2023 Customer Service Customer service to both Buyers and Suppliers Invoice Operations Digitization of invoice data Virtual Card Operations Enable Virtual Card payments to Suppliers Treasury & Back-Office Operations Support money movement activities for Buyers (ACH) and Suppliers (ACH / APD / Check) Enabling & Change Management Functions Enable modernization & scalability of Operations teams to improve speed, quality, cost & risk Buyer Onboarding Support integrating Buyer’s accounting system with our AvidInvoice and/or AvidPay product(s) 1 2 3 4 5 Invoice Operations Buyer Onboarding Treasury Operations Virtual Card Operations Treasury Operations 1 2 3 4 5 Customer Service & Back-Office Operations $82M Operations COR 72% of COR is Operations 7% 14% 11% 5% 11% 24%
Guiding Principles to Drive Scale © AvidXchange Holdings, Inc. 2023 Process Standardization Standardize Processes; Reduce variability Create Operating Centers of Excellence Eliminate Paper Digitize Paper in our Processes Migrate Check to Electronic Payments Follow the Sun Leverage Strategic Partners to Accelerate Speed Automate Automate Manual Processes Create Straight Through Processes
Cost per Transaction Unit Cost Plans © AvidXchange Holdings, Inc. 2023 Key Drivers of Improvement Drive VC Automation Growth Migrate Checks to Electronic Payments Invoice Outsourcing & Automation Pay E-Payment Processing & Check Conversion Offset Through Allocations Drive AvidCapture Migration (Automation) Sourcing Optimization Services Opportunity To Further Scale Through Product Stability & Self-Service Capabilities Digitize Service Improve Product Stability Sourcing Optimization (Follow the Sun) Sourcing Optimization
Q&A © AvidXchange Holdings, Inc. 2023
Break 10 minutes © AvidXchange Holdings, Inc. 2023
Chief People Officer Todd Cunningham © AvidXchange Holdings, Inc. 2023
© AvidXchange Holdings, Inc. 2023 What Differentiates Us From a People Perspective? Experienced Leadership at the Helm We have assembled a team of seasoned industry leaders who have the experience, knowledge & grit to execute our strategy We are Winning the War for Talent We have doubled the size of our technology team despite the global shortage of supply Industry Leading Teammate Engagement Our engagement levels outpace benchmarks for high engagement companies
© AvidXchange Holdings, Inc. 2023 Organization Overview Talent Acquisition Talent Business Partners Objective: Hire great talent and onboard quickly to perform Functions: Nationwide Recruiting Employer Branding Diversity Partnerships Internal Movement Objective: Partner with leaders to meet or exceed business objectives Functions: Create Business Plans That Raise Performance At The Individual, Team & Organizational Levels Talent Development Objective: Develop teammates into increasing level of performance Functions: Teammate Experience Teammate Development Leadership Development Environmental, Social & Governance (ESG) Talent Operations Objective: Seamless execution Functions: Teammate Relations M&a Compliance Data Management Total Rewards Objective: Reward performance Functions: Compensation Benefits Equity HR Technology z Todd Cunningham, Chief People Officer
© AvidXchange Holdings, Inc. 2023 AvidXchange Talent Strategy Everything is about Performance The Objective The Focus The Outcomes Performance for the Individual Team Organization An authentic culture that teammates experience via caring connections & candid feedback Care + Candor = Performance Attract strong talent Engaged teammates who perform Develop increasing levels of performance Retain strong talent The Key to Making it Happen? Shared Mindsets
Our mindsets reflect who we are at AvidXchange – our DNA. We hire, develop and reward these mindsets in our teammates as essential ingredients for driving results. © AvidXchange Holdings, Inc. 2023 CONNECTED as people Because we’re more than a Tech company, we’re a People company. GROWTH minded Because we’re all entrepreneurs who love to innovate and win, together. CUSTOMER obsessed Because our customers are who we’re passionate about and why we do what we do.
© AvidXchange Holdings, Inc. 2023 The Competitive Advantage of our Culture Technology Teammates vs. Industry Benchmarks 32% Faster Speed of Hires 13% Higher Quality of Hires 28% Higher Engagement 32% Lower Turnover
17,625 Laptops refurbished and distributed since the Tech Rising initiative began in August 2020 10,000 New laptops prepared and delivered in August 2021 One of our newest AvidXchange Foundation initiatives is Tech Rising, which focuses on our commitment to bridge the digital divide to create economic mobility for underserved members of our community. Through this initiative: AvidXchange became the new home for the E2D laptop refurbishment lab in Charlotte, NC, enabling: Impact in Our Communities © AvidXchange Holdings, Inc. 2023 Our 1% Pledge We will invest 1% of our issued & outstanding shares over 10 years in our communities
Chief Information Officer Angelic Gibson © AvidXchange Holdings, Inc. 2023
© AvidXchange Holdings, Inc. 2023 Technology Delivery & Operations The Enterprise Technology Delivery Engine of AvidXchange Innovation Innovating towards market driven needs Performance Teams are consistently hitting challenging, well-defined, performance targets Automation Automation for scale across the business Talent TD&O talent is highly regarded as a competitive advantage Recognition Recognized as a true tech company and industry leader
© AvidXchange Holdings, Inc. 2023 Business Unit Structure Technology Delivery & Operations ~210 Teammates Architecture & Engineering ~50 Teammates Platform Delivery & Operations ~70 Teammates Security & Teammate Solutions ~15 Teammates Tech Strategy, Planning & Process Functions: Developer Effectiveness Enterprise Architecture QA & app Performance Center of Excellence Software Engineering Solution Architecture UI Center of Excellence Functions: Business Continuity & Disaster Recovery Cloud Operations Platform Engineering Site Reliability Engineering Functions: Information Security Service Delivery Service Experience Teammate Technology Engineering & Operations Technology M&A Functions: Data Quality & Governance Strategic Sourcing Tech Strategy & Delivery Performance * All expense calculations are based on non-GAAP definitions. z Technology Delivery & Operations ~350 teammates
100% © AvidXchange Holdings, Inc. 2023 Delivering Value with Speed & Quality Technology Delivery & Operations Key Performance Indicator Milestones on Time 25% 20 Days Delivery Lead Time 47 Days 230 Per Month Deployment Frequency 2 Per Month 1.6% Change Failure Rate 13% 129 Mins Mean Time to Restore 3 Hours 75% Improvement 57% Improvement 11,400% Improvement 88% Improvement 26% Improvement DORA Metrics Medium High High High 2022 DORA Performance Cluster Classification* *Low, Medium & High Performance Cluster Classification is based on DevOps Research & Assessment’s 2022 Accelerate State of DevOps Report. https://cloud.google.com/blog/products/devops-sre/dora-2022-accelerate-state-of-devops-report-now-out 2022 2019 estimated
R&D Breakdown © AvidXchange Holdings, Inc. 2023 2022 Non-GAAP R&D Spend
© AvidXchange Holdings, Inc. 2023 Reinvest in Tech Stack Architected for a Modern Scalable Platform Technology Delivery & Operations Trusted Information Security & Fraud Prevention Power BI Reliable Integration, Middleware, & Workflow Management Modern Platform Delivery and Operations Flexible User Interface Design and Development Integrated Data Management, Quality & Enrichment
Examples for AI Application Growth & Innovation Cost Reduction Status Teammate Enablement Document Recognition Sales Chatbots Demand Generation Predictive Analytics Business Process Automation Customer Service Chatbots Predictive Maintenance Resume Screening Fraud Detection © AvidXchange Holdings, Inc. 2023 Leveraging Artificial Intelligence PLANNED LIVE EVALUATING PLANNED EVALUATING LIVE LIVE EVALUATING LIVE EVALUATING
Michael Praeger Chairman, CEO & Co-Founder © AvidXchange Holdings, Inc. 2023 Angelic Gibson Chief Information Officer Fireside Chat Dan Drees President
© AvidXchange Holdings, Inc. 2023 Enabling AI at AvidXchange Training & Awareness Technology & Infrastructure Governance & Value Capture
Lunch 35 minutes © AvidXchange Holdings, Inc. 2023
Chief Financial Officer Joel Wilhite © AvidXchange Holdings, Inc. 2023
© AvidXchange Holdings, Inc. 2023 Financial Highlights $316M 2022 Revenue Significant Scale 104% Net Transactions Processed Retention High Retention 64% 2022 Non-GAAP Gross Margin Attractive Margins 27% 2022 Revenue Growth Rapid Growth
100% Total Revenue Transactions Processed Transaction Yield Total Revenue 68% Payments Revenue Total Payment Volume TPV Yield Payment Revenue 32% Software Revenue Effective Software Rate Software Revenue Transactions Processed Our Revenue Model © AvidXchange Holdings, Inc. 2023
© AvidXchange Holdings, Inc. 2023 Strength in Historical Metrics
© AvidXchange Holdings, Inc. 2023 Strong Visibility through Customer Onboarding Financial Milestones Invoice & Payment Transactions Monetized on the Platform % of Spend Monetized for ePayment Modalities New TSV Booked +1Q +2Q +3Q +4Q Buyers Suppliers Software Sale Implementation Migration of Invoices and/or Payments onto the Platform Full Utilization Payments Received in Preferred Modality from AvidXchange Onboarded with Preferred Payment Modality
© AvidXchange Holdings, Inc. 2023 Expanding Revenue Diversification *as of FY2022
We have been growing at 20+% per year 2019 – 2022 has a CAGR of 28% ~6.5% of growth is associated with acquisitions Organic growth is ~20% Intend to leverage all gears to support our goal of 20%+ growth CAGR* 20%+ Strong Revenue Growth Trajectory © AvidXchange Holdings, Inc. 2023 Revenue ($ mm) *Illustrative
Non-GAAP Gross Profit ($ mm) Expect continued progression toward our long-term goals Two key drivers: Increasing transaction yield from expanding Gear 3 & 4 Decreasing Unit Costs from Driving ePayment adoption Improved operational efficiency Solid Foundation for Continued Gross Margin Expansion © AvidXchange Holdings, Inc. 2023 72 – 75%
Gaining leverage in operating expenses Expanding partnership and referral channels will create efficiency in Sales & Marketing R&D efficiency expected G&A expected to gain the most leverage Emerging Operating Leverage © AvidXchange Holdings, Inc. 2023 Sales & Mktg R&D G&A Non-GAAP Operating Expenses
Adjusted EBITDA % Adjusted EBITDA driven by: Adjusted EBITDA Expansion © AvidXchange Holdings, Inc. 2023 20%+ Rule of 40* 0 22 40+ Adjusted EBITDA Consistent 20+% revenue growth goal Gross Margin Expansion Operating Leverage Presented % of revenue *Rule of 40 defined as Revenue Growth % plus Adjusted EBITDA margin
Free Cash Flow From adjusted EBITDA to free cash flow, primary differences are: Facilities Lease Interest Interest Income and Expense, net PP&E Capitalized Software Working Capital Changes Becoming Free Cash Flow Positive © AvidXchange Holdings, Inc. 2023 10%+ Presented as % of revenue
© AvidXchange Holdings, Inc. 2023 Long Term Goals (5 Years) 30%+ Adjusted EBITDA Margin 50+ Rule of 40 75%+ Non-GAAP Gross Profit Margin Note: The Company’s illustrative growth objectives are based on a number of assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that the Company will achieve these results.
Q&A © AvidXchange Holdings, Inc. 2023
Chairman, CEO & Co-Founder Final Remarks © AvidXchange Holdings, Inc. 2023
Thank You for Attending © AvidXchange Holdings, Inc. 2023
Appendix © AvidXchange Holdings, Inc. 2023
Total Transactions Processed: We define transactions processed as the number of invoice transactions and payment transactions, such as invoices, purchase orders, checks, ACH payments and VCCs, processed through our platform during a particular period. Total Payment Volume: We define total payment volume as the dollar sum of buyers’ AP payments paid to their suppliers through the AvidPay Network during a particular period. Transaction Yield: We define transaction yield as the total revenue during a particular period divided by the total transactions processed during such period. Net Transactions Retention: We calculate the net transactions processed retention rate for a current period by dividing the (i) number of total transactions processed for customers in the comparable prior period by (ii) the number of total transactions processed for the same customers in the current period. Definitions © AvidXchange Holdings, Inc. 2023
GAAP to Non-GAAP reconciliations © AvidXchange Holdings, Inc. 2023
GAAP to Non-GAAP reconciliations © AvidXchange Holdings, Inc. 2023