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AvidXchange Holdings (AVDX)
NASDAQ:AVDX
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AvidXchange Holdings
(NASDAQ:AVDX)
61Neutral
Positive Factors
Financial Performance
Operating margin of 22.7% exceeded expectations due to disciplined spending, representing a relative positive.
Partnership Growth
Partnerships like Appfolio/M3 are expected to drive growth with a significant increase in leads.
Negative Factors
Customer Growth
Weak customer additions raise competitive concerns, with net new customer additions below historical levels.
Growth Outlook
The FY25 outlook misses the rule of 40 target, indicating weaker growth and margin expectations.
Revenue Guidance
2025 guidance was disappointing with expectations for slower core revenue growth.
AvidXchange Holdings (AVDX) vs. S&P 500 (SPY)
Market Cap
$1.44B
Dividend YieldN/A
Average Volume (3M)1.74M
Price to Earnings (P/E)180.3
Beta (1Y)1.73
Revenue Growth15.29%
EPS GrowthN/A
CountryUS
Employees1,600
SectorTechnology
Sector Strength45
IndustrySoftware
Share Statistics
EPS (TTM)0.04
Shares Outstanding204,441,250
10 Day Avg. Volume2,867,178
30 Day Avg. Volume1,744,166
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.34
Price to Cash Flow (P/CF)12.90
P/FCF Ratio14.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$9.18Price Target Upside30.58% Upside
Rating ConsensusHold
Number of Analyst Covering16
AvidXchange Holdings Business Overview & Revenue Model
Company DescriptionAvidXchange Holdings, Inc. (AVDX) is a leading provider of accounts payable (AP) automation software and payment solutions for middle-market businesses and their suppliers. The company operates in the financial technology sector, offering a suite of products designed to streamline and enhance the AP process, reducing manual tasks and improving efficiency. AvidXchange's core services include invoice management, payment processing, and supplier management, which are delivered through a cloud-based platform that integrates with existing enterprise resource planning (ERP) systems.
How the Company Makes MoneyAvidXchange makes money primarily through a subscription-based revenue model, where businesses pay for access to its AP automation software and services. The company charges fees for its software-as-a-service (SaaS) offerings, which include invoice processing and payment solutions. Additionally, AvidXchange generates revenue from transaction fees when businesses use its platform to make payments to suppliers. Key partnerships with financial institutions and other technology providers further enhance its product offerings and expand its market reach, contributing to its overall revenue growth.
AvidXchange Holdings Financial Statement Overview
Summary
AvidXchange Holdings demonstrates strong revenue growth and improved cash flow management. However, profitability challenges persist with a negative EBIT margin and low return on equity, which need addressing for sustainable growth.Income Statement
AvidXchange Holdings has demonstrated impressive revenue growth over the past years, with a 15.3% increase from 2023 to 2024 and a strong gross profit margin of 72.3% in 2024. However, the company still faces challenges in profitability as reflected by its negative EBIT margin of -0.6% and a modest net profit margin of 1.9% in 2024.75
Positive
Balance Sheet
The company's balance sheet shows a stable equity base with a debt-to-equity ratio of 0.11, indicating low leverage. However, the return on equity remains low at 1.2% due to modest net income. The equity ratio of 32.1% suggests a balanced asset structure, but there is room for improvement in asset utilization and profitability.68
Positive
Cash Flow
AvidXchange has significantly improved its operating cash flow, reaching $71.9 million in 2024, which is a notable increase compared to previous years. The free cash flow has also turned positive, indicating better cash management. However, the free cash flow to net income ratio is not available due to prior negative free cash flows, signaling a need for consistent cash flow performance.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 438.94M | 380.72M | 316.35M | 248.41M | 185.93M | Gross Profit |
| 317.16M | 259.41M | 198.49M | 148.32M | 102.17M | EBIT |
| -2.58M | -51.62M | -87.38M | -107.32M | -74.15M | EBITDA |
| 34.02M | 3.30M | -47.37M | -153.46M | -53.42M | Net Income Common Stockholders |
| 8.14M | -47.33M | -101.28M | -199.65M | -101.25M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 389.30M | 451.62M | 461.55M | 562.82M | 252.46M | Total Assets |
| 2.09B | 2.48B | 2.21B | 2.27B | 726.51M | Total Debt |
| 75.40M | 143.72M | 150.82M | 191.02M | 178.57M | Net Debt |
| -280.23M | -263.25M | -199.74M | -371.80M | -73.88M | Total Liabilities |
| 1.42B | 1.83B | 1.55B | 1.54B | 404.99M | Stockholders Equity |
| 671.83M | 656.45M | 657.44M | 723.05M | 321.52M |
| Cash Flow | Free Cash Flow | |||
| 71.93M | -9.85M | -56.51M | -86.99M | -56.18M | Operating Cash Flow |
| 71.93M | 8.45M | -28.70M | -68.67M | -44.13M | Investing Cash Flow |
| -11.31M | 51.95M | -140.35M | -84.11M | -36.56M | Financing Cash Flow |
| -440.27M | 290.85M | -1.73M | 1.57B | 193.79M |
AvidXchange Holdings Technical Analysis
Negative
7.03
Price Trends
9.60
Negative
9.85
Negative
9.75
Negative
Market Momentum
-0.86
Positive
19.59
Positive
13.36
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVDX, the sentiment is Negative. The current price of 7.03 is below the 20-day moving average (MA) of 8.45, below the 50-day MA of 9.60, and below the 200-day MA of 9.75, indicating a bearish trend. The MACD of -0.86 indicates Positive momentum. The RSI at 19.59 is Positive, neither overbought nor oversold. The STOCH value of 13.36 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AVDX.
AvidXchange Holdings Risk Analysis
AvidXchange Holdings disclosed 53 risk factors in its most recent earnings report. AvidXchange Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
AvidXchange Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $162.08B | 56.97 | 17.43% | 0.67% | 13.73% | 9.93% | |
78 Outperform | $12.43B | 23.89 | 34.88% | 0.70% | 11.19% | 51.03% | |
77 Outperform | $118.99B | 31.61 | 83.72% | 1.89% | 7.09% | 11.51% | |
74 Outperform | $34.25B | 12.15 | 14.50% | ― | 10.06% | 38060.98% | |
73 Outperform | $24.04B | 16.35 | 6.94% | 1.03% | 4.68% | 63.39% | |
61 Neutral | $1.44B | 180.26 | 1.23% | ― | 15.29% | ― | |
58 Neutral | $21.35B | 10.05 | -19.26% | 2.35% | 5.02% | -22.63% |
* Technology Sector Average
Performance Comparison
AVDX
AvidXchange Holdings
6.90
-6.01
-46.55%
ADP
Automatic Data Processing
292.44
51.64
21.45%
GPN
Global Payments
93.25
-38.67
-29.31%
INTU
Intuit
586.71
-71.89
-10.92%
PAYC
Paycom
206.66
21.28
11.48%
XYZ
Block
55.29
-26.42
-32.33%
AvidXchange Holdings Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -23.17% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
AvidXchange demonstrated strong financial performance with significant margin expansion and successful strategic initiatives. However, macroeconomic challenges and retention issues in certain verticals present ongoing concerns.Highlights
Strong Financial Performance and Margin Expansion
AvidXchange reported revenue of $115 million in Q4 2024, up roughly 11% year-over-year. Non-GAAP gross margin hit a milestone of nearly 75%, up 350 basis points from last year, and adjusted EBITDA margins reached almost 23%.
Share Repurchase Program
AvidXchange repurchased $25 million worth of shares in Q4 2024, bringing the total for the year to $50 million, the maximum allowed within the calendar year under the $100 million share repurchase program.
Innovative Product Launches
The company launched several new products, including Payment Accelerator 2.0 and the AvidPay 2.0 payments platform, which are expected to significantly contribute to future growth.
Strategic Partnerships and Integration
AvidXchange formed notable partnerships with firms like AppFolio and M3, showing strong lead flow and engagement, which are expected to drive future growth.
Lowlights
Mixed Macroeconomic Environment
The macroeconomic environment remains challenging, especially impacting the top of funnel customer engagement and buyer logo growth metrics, resulting in a 2% decline in top of funnel opportunities.
Retention Challenges
AvidXchange's transaction retention rate was below 100%, highlighting challenges in maintaining transaction volumes amidst macroeconomic pressures.
HOA Vertical Underperformance
The HOA vertical faced challenges with slowed spending decisions, impacting overall performance due to macroeconomic headwinds.
Company Guidance
During the AvidXchange Holdings, Inc. fourth quarter and full year 2024 earnings call, the company reported exceeding expectations across core financial metrics, with revenues reaching approximately $115 million, a year-over-year increase of 11%. Notably, the non-GAAP gross margin hit almost 75%, a 350 basis point improvement over the previous year, and adjusted EBITDA margins were nearly 23%. AvidXchange repurchased $25 million in shares during Q4, bringing the total to $50 million for the year, the maximum allowed under their $100 million repurchase program. The company highlighted a 6% growth in buyer customer logo count and significant progress in innovation and partnerships, particularly in the real estate, financial services, and media verticals. Despite macroeconomic challenges, the outlook for 2025 includes a revenue range of $453 million to $460 million, with anticipated non-GAAP adjusted EBITDA between $86 million and $91 million, reflecting cautious optimism amidst ongoing market uncertainties.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.