Concentration Risks and Significant Customers

9 Months Ended

Sep. 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, and accounts receivable. Cash on deposit with financial institutions may exceed federally insured limits. Cash and cash equivalents as of September 30, 2023 and December 31, 2022 include $812.5 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 September 30, 2023, short-term investments were $349.4 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 $310.6 million, or 89% of the short-term investments, and certificate of deposits which amount to $20.0 million, or 6% of the short-term investments. As of September 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 September 30, 2023 and 2022, 75% and 81% 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 nine months ended September 30, 2023 and 2022, 77% and 83% 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 September 30, 2023 and 2022, this customer accounted for 50% and 73% of the Company’s net revenue, respectively. For the nine months ended September 30, 2023 and 2022, this customer accounted for 72% and 69% of the Company’s net revenue, respectively. As of September 30, 2023, another customer accounted for 14% of the Company’s accounts receivable balance.