AvidXchange (AVDX) UBS Global Technology and AI Conference summary

Macro trends and transaction retention

• Transaction retention historically ranged 104%-105%, but dropped to 101% last year and has been sub-100% in 2023 due to reduced discretionary spending in the middle market.

• Discretionary spend cuts affected categories like marketing, consulting, and capital projects.

• Total transaction growth rate declined from 7-8% in 2023 to 4.8% in Q2, but rebounded to 5.2% in Q3, showing early signs of recovery.

• Retention rates improved slightly in Q3, though still below 100%.

Revenue growth and customer base

• Underlying revenue growth (excluding float) is in high single to low double digits, with potential to return to mid-teens as transaction growth recovers.

• Merchant churn is not a significant factor due to the mid-market customer base.

Vertical strategy and market penetration

• Operates across nine verticals, all with single-digit penetration rates.

• Real estate (especially multifamily housing) and healthcare (notably dental service organizations) are key growth areas.

• New partnerships, such as with AppFolio, have driven strong demand in real estate.