CHARLOTTE, N.C. - AvidXchange Holdings, Inc. (NASDAQ:AVDX), a provider of accounts payable automation software and payment solutions, has announced the launch of a share repurchase program, with plans to buy back up to $100 million of its common shares. The program, effective immediately, may include purchases on the open market, in private transactions, or through a Rule 10b5-1 plan, with a fiscal year limit of $50 million as per the company’s amended credit facility.
Repurchases will depend on market conditions and legal requirements and will continue until December 31, 2025, or until the allocated funds are spent. The company retains the right to suspend, modify, or terminate the program at its discretion.
This move comes after AvidXchange reported its first profit on a GAAP basis, attributing the financial milestone to increased revenue growth and gross margin expansion. CEO Michael Praeger expressed that the repurchase program underscores the company's confidence in its long-term growth and cash flow prospects. It also aligns with AvidXchange's capital allocation strategy, aiming to deliver returns to shareholders and mitigate the dilutive effect of stock-based compensation.
AvidXchange's software-as-a-service platform has been adopted by over 8,000 businesses, facilitating payments to more than 1.2 million supplier customers over the past five years. The company's forward-looking statements include anticipated long-term growth and the ability to strengthen capital returns, supported by a robust balance sheet.
The information in this article is based on a press release statement from AvidXchange. Investors are advised that forward-looking statements involve risks and uncertainties and are encouraged to consult the company's SEC filings for a more detailed understanding of potential risks.
In other recent news, AvidXChange has been the subject of several analyst revisions. JPMorgan (NYSE:JPM) downgraded AvidXChange stock from Overweight to Neutral, citing concerns over monetization and growth. Similarly, BMO Capital Markets and UBS both lowered their price targets for AvidXChange due to concerns about the company's ability to maintain its revenue growth amidst current economic conditions. Piper Sandler also adjusted its outlook for the company, reducing the price target while maintaining a Neutral rating, following AvidXChange's second quarter results and full-year 2024 guidance.
AvidXChange reported its first-ever GAAP net income in the second quarter of 2024, accompanied by a year-over-year revenue growth of over 15%. The company's total revenue for 2024 is projected to range between $436 million to $439 million, with a non-GAAP adjusted EBITDA profit anticipated between $73 million to $75 million.
These developments come as AvidXChange navigates through revised growth expectations and changing market dynamics. The company remains optimistic about its growth prospects, driven by its AI-based customer offerings and strategic software integration partnerships in the real estate and media verticals. Despite facing challenges, AvidXChange is focusing on automating virtual card payments and leveraging AI to optimize processes, aiming to drive long-term opportunities of 20%+ revenue growth and 20%+ EBITDA margin.
InvestingPro Insights
AvidXchange Holdings, Inc. (NASDAQ:AVDX) has demonstrated a commitment to shareholder value with its recent announcement of a share repurchase program. As investors consider the implications of this move, real-time data and insights from InvestingPro can provide a deeper understanding of the company's financial health and market performance.
InvestingPro Data reveals that AvidXchange has a market capitalization of $1.65 billion, a significant figure that reflects its standing in the accounts payable automation industry. Despite this, the company's P/E ratio stands at -118, indicating that it is not currently profitable based on the last twelve months as of Q2 2024. However, the revenue growth remains robust at 19.31% for the same period, showcasing the company's expanding operations.
Two InvestingPro Tips that stand out for AvidXchange include the expectation of net income growth this year and the fact that analysts predict the company will be profitable this year. These insights suggest a positive outlook for the company's financial trajectory, aligning with the CEO's confidence in long-term growth and cash flow prospects.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips, including the stock's high price volatility and its poor performance over the last month, with a price total return of -37.14%. It's also worth noting that the company does not pay a dividend, which may influence investment decisions for those seeking regular income streams from their holdings.
Overall, AvidXchange's strategic initiatives, combined with the insights provided by InvestingPro, paint a picture of a company poised for growth, albeit with some caution due to recent market performance. For further insights and tips, investors can explore the full range on InvestingPro.
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