AvidXchange (AVDX) Wells Fargo 8th Annual TMT Summit summary

Business overview and market focus

• Specializes in automating accounts payable and payment operations for U.S. middle market companies with revenues between $5 million and $1 billion, targeting nine industry verticals with unique accounting needs.

• Integrated with over 240 accounting systems, enabling deep vertical specialization and efficient customer onboarding.

• Monetizes over 40% of transactions on its platform through the AvidPay Network, combining software automation with payment processing.

• Ongoing innovation with new products and features expected to be released over the next year.

Recent performance and macroeconomic impact

• Historically achieved over 20% annual growth in revenue and gross profit, but recent macro headwinds have reduced transaction volumes below historical retention rates.

• Middle market customers have pulled back on discretionary spending, impacting transaction growth, but improvement is expected through 2025 as confidence returns.

• Growth algorithm relies on transaction retention, new customer acquisition, and yield enhancement products, aiming for a long-term 20% growth rate.

Growth strategies and product innovation

• Focused on increasing new buyer customers by 10%+ annually and leveraging yield enhancement products like Payment Accelerator and a new spend management platform for an additional 5% growth.

• Payment Accelerator, targeting small business suppliers, is expected to have a material financial impact starting in 2025, with plans to offer it to 800,000 suppliers by year-end.

• Spend & Expense platform aims to capture 10-15% of non-invoice-related expenses, providing a unified user experience and analytics for middle market clients.