Concentration Risks and Significant Customers

6 Months Ended

Jun. 30, 2023

Risks and Uncertainties [Abstract]

Concentration Risks and Significant Customers

Concentration Risks and Significant Customers

Financial instruments that potentially expose the Company to concentration of credit risk consist of cash and cash equivalents, short-term investments, accounts receivable, and unbilled customers' receivable (collectively, “customers' receivables”, and “settlements receivable”). Cash on deposit with financial institutions may exceed federally insured limits. Cash and cash equivalents as of June 30, 2023 and December 31, 2022 include $447.6 million and $462.5 million, respectively, of investments managed by four financial institutions, which invest primarily in securities issued by the U.S. Government or U.S. Government agencies.

As of June 30, 2023, short-term investments were $432.4 million, and there was no concentration of securities of the same issuer with an aggregate fair value greater than 5% of the total balance, except for U.S. Treasuries and U.S. agency securities, which amounted to $318.9 million, or 74% of the short-term investments, commercial paper which amounted to $28.3 million, or 7% of the short-term investments, and certificate of deposits which amount to $62.5 million, or 14% of the short-term investments. As of June 30, 2023, all debt securities within the Company's portfolio are investment grade.

As of December 31, 2022, short-term investments were $440.9 million, and there was no concentration of securities of the same issuer with an aggregate fair value greater than 5% of the total balance, except for U.S. Treasuries and U.S. agency securities, which amounted to $407.1 million, or 92% of the short-term investments. As of December 31, 2022, all debt securities within the Company's portfolio are investment grade.

A significant portion of the Company's payment transactions are settled through one Issuing Bank, Sutton Bank. For the three months ended June 30, 2023 and 2022, 77% and 83% of Total Processing Volume, which is the total dollar amount of payments processed through the Company’s platform, net of returns and chargebacks, was settled through Sutton Bank, respectively. For the six months ended June 30, 2023 and 2022, 78% and 84% of Total Processing Volume was settled through Sutton Bank, respectively.

A significant portion of the Company's revenue is derived from one customer. For the three months ended June 30, 2023 and 2022, this customer accounted for 78% and 69% of the Company’s net revenue, respectively. For the six months ended June 30, 2023 and 2022, this customer accounted for 77% and 68% of the Company’s net revenue, respectively. As of June 30, 2023, another customer accounted for 12% of the Company’s customers’ receivables.