10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________.

Commission File Number: 001-40898

 

AvidXchange Holdings, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

86-3391192

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

1210 AvidXchange Lane Charlotte, NC 28206

28206

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (800) 560-9305

 

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

 

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of July 31, 2023, the registrant had 202,146,872 shares of common stock, $0.001 par value per share, outstanding.

 

 

 

 


 

AvidXchange Holdings, Inc.

Form 10-Q

For the Quarterly Period Ended June 30, 2023

Table of Contents

 

Page

PART I.

FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

 

Unaudited Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022

1

Unaudited Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022

2

Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2023 and 2022

3

Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022

4

Notes to Unaudited Consolidated Financial Statements

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

30

Item 4.

Controls and Procedures

32

PART II.

OTHER INFORMATION

33

Item 1.

Legal Proceedings.

33

Item 1A.

Risk Factors.

33

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

33

Item 3.

Defaults Upon Senior Securities.

34

Item 4.

Mine Safety Disclosures.

34

Item 5.

Other Information.

34

Item 6.

Exhibits.

35

Signatures

36

 

i


PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

AvidXchange Holdings, Inc.

Unaudited Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

 

 

As of June 30,

 

 

As of December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

337,342

 

 

$

350,563

 

Restricted funds held for customers

 

 

1,189,697

 

 

 

1,283,824

 

Marketable securities

 

 

101,008

 

 

 

110,986

 

Accounts receivable, net of allowances of $4,352 and $3,123, respectively

 

 

43,010

 

 

 

39,668

 

Supplier advances receivable, net of allowances of $1,392 and $1,872 respectively

 

 

10,205

 

 

 

10,016

 

Prepaid expenses and other current assets

 

 

11,931

 

 

 

12,561

 

Total current assets

 

 

1,693,193

 

 

 

1,807,618

 

Property and equipment, net

 

 

102,384

 

 

 

103,892

 

Operating lease right-of-use assets

 

 

2,176

 

 

 

2,343

 

Deferred customer origination costs, net

 

 

27,567

 

 

 

28,284

 

Goodwill

 

 

165,921

 

 

 

165,921

 

Intangible assets, net

 

 

91,952

 

 

 

98,749

 

Other noncurrent assets and deposits

 

 

4,236

 

 

 

5,189

 

Total assets

 

$

2,087,429

 

 

$

2,211,996

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

16,831

 

 

$

13,453

 

Accrued expenses

 

 

53,588

 

 

 

73,535

 

Payment service obligations

 

 

1,189,697

 

 

 

1,283,824

 

Deferred revenue

 

 

12,581

 

 

 

12,063

 

Current maturities of lease obligations under finance leases

 

 

346

 

 

 

477

 

Current maturities of lease obligations under operating leases

 

 

1,637

 

 

 

1,380

 

Current maturities of long-term debt

 

 

6,425

 

 

 

6,425

 

Total current liabilities

 

 

1,281,105

 

 

 

1,391,157

 

Long-term liabilities

 

 

 

 

 

 

Deferred revenue, less current portion

 

 

17,014

 

 

 

17,487

 

Contingent consideration, less current portion

 

 

70

 

 

 

70

 

Obligations under finance leases, less current maturities

 

 

62,252

 

 

 

61,974

 

Obligations under operating leases, less current maturities

 

 

3,990

 

 

 

4,657

 

Long-term debt

 

 

75,236

 

 

 

75,912

 

Other long-term liabilities

 

 

3,245

 

 

 

3,295

 

Total liabilities

 

 

1,442,912

 

 

 

1,554,552

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Preferred stock, $0.001 par value; 50,000,000 shares authorized, no shares issued and outstanding as of June 30, 2023 and December 31, 2022

 

 

-

 

 

 

-

 

Common stock, $0.001 par value; 1,600,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 202,113,613 and 199,433,998 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

 

 

202

 

 

 

199

 

Additional paid-in capital

 

 

1,653,911

 

 

 

1,632,080

 

Accumulated deficit

 

 

(1,009,596

)

 

 

(974,835

)

Total stockholders' equity

 

 

644,517

 

 

 

657,444

 

Total liabilities and stockholders' equity

 

$

2,087,429

 

 

$

2,211,996

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

1


AvidXchange Holdings, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except share and per share data)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues

 

$

91,154

 

 

$

76,561

 

 

$

177,976

 

 

$

147,764

 

Cost of revenues (exclusive of depreciation and amortization expense)

 

 

30,221

 

 

 

28,979

 

 

 

59,694

 

 

 

56,786

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

20,076

 

 

 

20,448

 

 

 

40,211

 

 

 

37,687

 

Research and development

 

 

24,740

 

 

 

20,107

 

 

 

47,862

 

 

 

40,179

 

General and administrative

 

 

27,716

 

 

 

19,974

 

 

 

50,343

 

 

 

38,662

 

Depreciation and amortization

 

 

8,878

 

 

 

8,301

 

 

 

17,464

 

 

 

16,019

 

Total operating expenses

 

 

81,410

 

 

 

68,830

 

 

 

155,880

 

 

 

132,547

 

Loss from operations

 

 

(20,477

)

 

 

(21,248

)

 

 

(37,598

)

 

 

(41,569

)

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

5,204

 

 

 

655

 

 

 

9,720

 

 

 

875

 

Interest expense

 

 

(3,363

)

 

 

(5,075

)

 

 

(6,678

)

 

 

(10,052

)

Other income (expense)

 

 

1,841

 

 

 

(4,420

)

 

 

3,042

 

 

 

(9,177

)

Loss before income taxes

 

 

(18,636

)

 

 

(25,668

)

 

 

(34,556

)

 

 

(50,746

)

Income tax expense

 

 

135

 

 

 

69

 

 

 

205

 

 

 

138

 

Net loss

 

$

(18,771

)

 

$

(25,737

)

 

$

(34,761

)

 

$

(50,884

)

Net loss per share attributable to common stockholders, basic and diluted

 

$

(0.09

)

 

$

(0.13

)

 

$

(0.17

)

 

$

(0.26

)

Weighted average number of common shares used to compute net loss per share attributable to common stockholders, basic and diluted

 

 

201,559,007

 

 

 

197,864,993

 

 

 

200,734,555

 

 

 

197,443,615

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

2


AvidXchange Holdings, Inc.

Unaudited Consolidated Statements of Changes in Stockholders’ Equity

(in thousands, except share and per share data)

 

 

 

 

 

 

Additional

 

 

Accumulated

 

 

Total Stockholders'

 

 

 

Common Stock

 

 

Paid-in Capital

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2022

 

 

199,433,998

 

 

$

199

 

 

$

1,632,080

 

 

$

(974,835

)

 

$

657,444

 

Exercise of stock options

 

 

123,168

 

 

 

-

 

 

 

366

 

 

 

-

 

 

 

366

 

Issuance of common stock upon vesting of restricted stock units

 

 

1,471,826

 

 

 

2

 

 

 

(1

)

 

 

-

 

 

 

1

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

8,661

 

 

 

-

 

 

 

8,661

 

Stock-based compensation expense for Employee Stock Purchase Plan, or ESPP

 

 

-

 

 

 

-

 

 

 

270

 

 

 

-

 

 

 

270

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(15,990

)

 

 

(15,990

)

Balances at March 31, 2023

 

 

201,028,992

 

 

$

201

 

 

$

1,641,376

 

 

$

(990,825

)

 

$

650,752

 

Exercise of stock options

 

 

99,215

 

 

 

-

 

 

 

337

 

 

 

-

 

 

 

337

 

Issuance of common stock upon vesting of restricted stock units

 

 

792,242

 

 

 

1

 

 

 

(1

)

 

 

-

 

 

 

-

 

Issuance of common stock under ESPP

 

 

193,164

 

 

 

-

 

 

 

1,178

 

 

 

-

 

 

 

1,178

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

10,869

 

 

 

-

 

 

 

10,869

 

Stock-based compensation expense for ESPP

 

 

-

 

 

 

-

 

 

 

152

 

 

 

-

 

 

 

152

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(18,771

)

 

 

(18,771

)

Balances at June 30, 2023

 

 

202,113,613

 

 

$

202

 

 

$

1,653,911

 

 

$

(1,009,596

)

 

$

644,517

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Accumulated

 

 

Total Stockholders'

 

 

 

Common Stock

 

 

Paid-in Capital

 

 

Deficit

 

 

Deficit

 

Balances at December 31, 2021

 

 

196,804,844

 

 

$

197

 

 

$

1,594,780

 

 

$

(871,922

)

 

$

723,055

 

Cumulative effect adjustment from adoption of new accounting standard for current estimated credit losses

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,000

)

 

 

(1,000

)

Cumulative effect adjustment from adoption of new accounting standard related to stock-based compensation

 

 

-

 

 

 

-

 

 

 

629

 

 

 

(629

)

 

 

-

 

Exercise of stock options

 

 

63,118

 

 

 

-

 

 

 

173

 

 

 

-

 

 

 

173

 

Issuance of common stock upon vesting of restricted stock units

 

 

758,701

 

 

 

1

 

 

 

(1

)

 

 

-

 

 

 

-

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

6,595

 

 

 

-

 

 

 

6,595

 

Stock-based compensation expense for ESPP

 

 

-

 

 

 

-

 

 

 

196

 

 

 

-

 

 

 

196

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(25,147

)

 

 

(25,147

)

Balances at March 31, 2022

 

 

197,626,663

 

 

$

198

 

 

$

1,602,372

 

 

$

(898,698

)

 

$

703,872

 

Exercise of stock options and warrants

 

 

89,204

 

 

 

-

 

 

 

252

 

 

 

-

 

 

 

252

 

Issuance of common stock upon vesting of restricted stock units, net of shares surrendered for taxes

 

 

254,908

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Issuance of common stock for settlement of contingent consideration

 

 

20,564

 

 

 

-

 

 

 

344

 

 

 

-

 

 

 

344

 

Issuance of common stock under ESPP

 

 

86,550

 

 

 

-

 

 

 

602

 

 

 

-

 

 

 

602

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

8,113

 

 

 

-

 

 

 

8,113

 

Stock-based compensation expense for ESPP

 

 

-

 

 

 

-

 

 

 

145

 

 

 

-

 

 

 

145

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(25,737

)

 

 

(25,737

)

Balances at June 30, 2022

 

 

198,077,889

 

 

$

198

 

 

$

1,611,828

 

 

$

(924,435

)

 

$

687,591

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

3


AvidXchange Holdings, Inc.

Unaudited Consolidated Statements of Cash Flows

(in thousands)

 

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(34,761

)

 

$

(50,884

)

Adjustments to reconcile net loss to net cash used by operating activities

 

 

 

 

 

 

Depreciation and amortization expense

 

 

17,464

 

 

 

16,019

 

Amortization of deferred financing costs

 

 

220

 

 

 

679

 

Provision for credit losses

 

 

2,125

 

 

 

2,318

 

Stock-based compensation

 

 

19,952

 

 

 

15,049

 

Accrued interest

 

 

1,004

 

 

 

1,184

 

Loss on fixed asset disposal

 

 

-

 

 

 

26

 

Accretion of investments held to maturity

 

 

(2,731

)

 

 

(494

)

Deferred income taxes

 

 

105

 

 

 

108

 

Changes in operating assets and liabilities

 

 

 

 

 

 

Accounts receivable

 

 

(4,711

)

 

 

(5,555

)

Prepaid expenses and other current assets

 

 

631

 

 

 

(2,791

)

Other noncurrent assets

 

 

1,247

 

 

 

(453

)

Deferred customer origination costs

 

 

717

 

 

 

791

 

Accounts payable

 

 

2,925

 

 

 

(2,041

)

Deferred revenue

 

 

45

 

 

 

(613

)

Accrued expenses and other liabilities

 

 

(20,636

)

 

 

(3,975

)

Operating lease liabilities

 

 

(242

)

 

 

(107

)

Total adjustments

 

 

18,115

 

 

 

20,145

 

Net cash used in operating activities

 

 

(16,646

)

 

 

(30,739

)

Cash flows from investing activities

 

 

 

 

 

 

Purchase of marketable securities held to maturity

 

 

(162,996

)

 

 

(254,026

)

Proceeds from maturity of marketable securities held to maturity

 

 

175,705

 

 

 

106,770