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1. Company Snapshot

1.a. Company Description

AvidXchange Holdings, Inc.provides accounts payable (AP) automation software and payment solutions for middle market businesses and their suppliers in North America.The company offers AP automation software, a SaaS-based solution that automates and digitizes capture, review, approval, and payment of invoices for buyers; the AvidPay network that connects two-sided payments with buyers and suppliers; and cash flow manager that provides cash management solutions.


Its platform offers electronic invoice capture, workflow routing, and automated payments solutions.The company markets its solutions through direct salesforces; strategic channel partnerships; and software and technology business partners.It serves real estate, homeowners associations, construction, financial services, healthcare facilities, social services, education, and media sectors.


The company was incorporated in 2000 and is headquartered in Charlotte, North Carolina.

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1.b. Last Insights on AVDX

AvidXchange Holdings' recent performance was driven by a series of positive developments. The company's partnership with Ministry Brands, announced in August, enhances payment innovation for faith-based and nonprofit organizations. Additionally, AvidXchange's 2025 report reveals that 74% of AP teams see automation as a career lifeline, boosting career security. Furthermore, a recent survey shows that 67% of finance pros feel more prepared than in 2020, but continued tech investment is key to staying ahead of volatility.

1.c. Company Highlights

2. AvidXchange Holdings, Inc. Q4 and Full-Year 2024 Earnings Report Analysis

In Q4 2024, AvidXchange Holdings, Inc. demonstrated robust financial performance with total revenue reaching $115.4 million, a 10.9% year-over-year increase. The company's gross margin expanded to 68.2%, with non-GAAP gross margin at 74.9%. Adjusted EBITDA grew to $26.3 million, marking the third consecutive quarter of GAAP net income since going public. This strong financial showing underscores the company's operational discipline and margin expansion efforts.

Publication Date: Feb -28

📋 Highlights
  • Revenue and Margin Expansion: AvidXchange reported Q4 revenue of $115 million, up 11% year-over-year, with gross margin reaching 75% and adjusted EBITDA margin of 23%. This reflects strong operating discipline and margin expansion, driven by transaction yield growth of 6% to $5.80 per transaction.
  • Buyer Logo Growth: Despite a 2% decline in the top of the funnel, buyer logo growth rose 6%, driven by higher-quality leads. This highlights the company's ability to convert leads into paying customers despite macroeconomic challenges.
  • Product Innovation and Partnerships: AvidXchange emphasized its focus on innovation, with new products like Avid Pay 2.0 and Payment Accelerator 2.0 aimed at driving e-payment adoption. Strategic partnerships with AppFolio and M3 are also contributing to growth in customer engagement and close rates.
  • 2025 Guidance and Growth Priorities: The company provided 2025 revenue guidance of $453-$460 million, with adjusted EBITDA expected to range from $86-$91 million. Key priorities include leveraging ERP integrations, expanding into vertical markets, and enhancing customer experience through automation and AI.
  • Share Repurchases and Cash Position: AvidXchange repurchased $25 million in shares during Q4, totaling $50 million for the year under its $100 million program. The company ended 2024 with strong cash reserves and no drawn revolver, demonstrating financial stability and commitment to shareholder value.

Operational and Strategic Highlights

AvidXchange's strategic initiatives, including ERP integrations and new product launches like AvidPay 2.0, have significantly enhanced customer engagement. The Payment Accelerator 2.0 has notably reduced onboarding time and offers real-time funding, driving e-payment adoption. Automation and AI integration are central to their strategy, aiming for over 80% virtual card automation within two years to boost gross margins toward 80%.

2025 Guidance and Outlook

For 2025, AvidXchange projects revenue between $453 million and $460 million, with adjusted EBITDA expected between $86 million and $91 million. Non-GAAP diluted EPS is forecasted between $0.25 and $0.27. Despite macroeconomic uncertainties, the company anticipates growth acceleration in the second half, driven by new products and partnerships. Their strong cash position and share repurchase activity reflect confidence in their growth trajectory.

Earnings Call Highlights

During the call, management addressed questions on logo growth and vertical performance. CEO Joel Wilhite highlighted that despite macroeconomic challenges, the business remains strong, with volumes and transaction growth aligning with expectations. The company is optimistic about future growth, driven by strategic partnerships and a robust product pipeline, despite some verticals facing headwinds.

Valuation Considerations

Trading at a Price-to-Sales ratio of 3.56 and Enterprise Value to EBITDA of 24.43, AvidXchange's valuation reflects its growth potential. While the multiples are elevated, the company's strong margins and cash flow generation justify investor optimism. However, investors may remain cautious due to high valuation levels despite the positive outlook.

3. NewsRoom

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New Study Reveals the “New Normal” in Finance: Economic Pressures Push Middle Market Teams Toward Faster Digital and AI

Nov -06

Source: globenewswire.com

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TPG & Corpay Complete Acquisition of AvidXchange

Oct -15

Source: globenewswire.com

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AP Pros Face Growing Layoff Concerns and See Automation as a Career Lifeline

Aug -26

Source: globenewswire.com

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ITEOS THERAPEUTICS INVESTOR ALERT BY THE FORMER ATTORNEY GENERAL OF LOUISIANA: Kahn Swick & Foti, LLC Investigates Adequacy of Price and Process in Proposed Sale of iTeos Therapeutics, Inc. - ITOS

Aug -20

Source: globenewswire.com

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AvidXchange and Ministry Brands Announce Exclusive Partnership

Aug -07

Source: globenewswire.com

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AvidXchange Announces Second-Quarter 2025 Financial Results

Aug -07

Source: globenewswire.com

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New AvidXchange Report Shows Finance Teams More Prepared Than in 2020—But Still Investing to Weather Uncertainty

Jul -17

Source: globenewswire.com

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AVDX Alert: Wohl & Fruchter LLP Files Class Action Lawsuit on Behalf of Shareholders of AvidXchange Holdings, Inc. in the U.S. District Court for the Southern District of New York

Jul -17

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (13.78%)

6. Segments

Payment

Expected Growth: 12%

AvidXchange Holdings, Inc.'s 12% growth is driven by increasing adoption of automated payment solutions, expansion into new industries, and strategic partnerships. The company's cloud-based platform and integrated payment network also contribute to growth, as businesses seek to streamline payment processes and reduce costs.

Software

Expected Growth: 18%

AvidXchange Holdings, Inc.'s 18% growth is driven by increasing adoption of its automated payment solutions, expansion into new industries, and growing demand for digital transformation in the finance and accounting sector. Additionally, strategic partnerships, innovative product offerings, and a strong sales and marketing strategy contribute to the company's rapid growth.

Services

Expected Growth: 13%

AvidXchange Holdings, Inc.'s 13% growth is driven by increasing adoption of automated payment solutions, expansion into new industries, and growing demand for digital transformation in the finance and accounting sector. Additionally, strategic partnerships, innovative product offerings, and a strong sales and marketing strategy contribute to the company's rapid growth.

7. Detailed Products

AP Automation

AvidXchange's AP Automation solution automates the accounts payable process, allowing businesses to electronically receive, approve, and pay invoices.

Payment Services

AvidXchange's Payment Services enable businesses to make electronic payments to suppliers, reducing the risk of fraud and increasing payment security.

Invoice Automation

AvidXchange's Invoice Automation solution automates the invoice processing workflow, from receipt to approval and payment.

Procure-to-Pay

AvidXchange's Procure-to-Pay solution streamlines the procurement process, from purchase order to payment, ensuring compliance and reducing costs.

Electronic Payment Network

AvidXchange's Electronic Payment Network enables businesses to make electronic payments to suppliers, reducing costs and increasing efficiency.

8. AvidXchange Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

AvidXchange Holdings, Inc. operates in the business-to-business (B2B) payment space, which has relatively low substitutes. However, the company's services can be substituted with traditional payment methods, such as checks and wire transfers.

Bargaining Power Of Customers

AvidXchange Holdings, Inc.'s customers are primarily medium-sized businesses and large enterprises, which have limited bargaining power due to their reliance on the company's services for payment processing and automation.

Bargaining Power Of Suppliers

AvidXchange Holdings, Inc. has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's suppliers are primarily financial institutions and technology providers.

Threat Of New Entrants

The B2B payment space is highly competitive, and new entrants can easily disrupt the market with innovative solutions. AvidXchange Holdings, Inc. faces a high threat of new entrants, particularly from fintech startups.

Intensity Of Rivalry

The B2B payment space is highly competitive, with several established players and new entrants vying for market share. AvidXchange Holdings, Inc. faces intense rivalry from competitors, which can lead to pricing pressure and innovation.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 10.62%
Debt Cost 9.17%
Equity Weight 89.38%
Equity Cost 9.29%
WACC 9.28%
Leverage 11.88%

11. Quality Control: AvidXchange Holdings, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Box

A-Score: 5.1/10

Value: 2.4

Growth: 8.0

Quality: 7.6

Yield: 0.0

Momentum: 5.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
AvidXchange

A-Score: 4.9/10

Value: 3.6

Growth: 6.4

Quality: 5.5

Yield: 0.0

Momentum: 7.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Shift4 Payments

A-Score: 4.2/10

Value: 3.4

Growth: 9.4

Quality: 5.4

Yield: 0.0

Momentum: 2.5

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
UiPath

A-Score: 3.9/10

Value: 3.4

Growth: 7.2

Quality: 4.8

Yield: 0.0

Momentum: 5.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
SPS Commerce

A-Score: 3.6/10

Value: 1.9

Growth: 8.2

Quality: 7.8

Yield: 0.0

Momentum: 0.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
SentinelOne

A-Score: 3.4/10

Value: 4.6

Growth: 6.7

Quality: 4.2

Yield: 0.0

Momentum: 1.0

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

10.0$

Current Price

10$

Potential

-0.00%

Expected Cash-Flows