Bottomline (EPAY) 5 May 212021 Q3 Earnings call transcript

Greetings and welcome to the Bottomline Technologies Third Quarter Fiscal Year 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Danielle Sheer, General Counsel. you. Thank

begin. may You

could prospects. with are our business call environment as release third SEC to I'm any the earnings our assumptions company's update the Earnings plans on Bottomline joined our those the contemplated on assumptions including Many Bruce a for Bottomline's macroeconomic economic Bottomline's risks, refer risks the language statements Danielle conditions assumptions, future our to guidance CEO cautionary Call. subject materially today. Sheer Bowden, and today's made We beyond that Statements and statements. by CFO. and Bottomline's obligation uncertainties assume include is Quarter to to forward-looking control. uncertainties and forward-looking to do our different on cause the and Conference be Please relate about filed expectations, of XXXX I'm not to in from and matters results will actual most today's Welcome Rob related COVID these to XX to recent and statements. forward-looking based discussion in those the of These forward-looking statements these impacts reports of global periodic Eberle,

operating this these margins, of results company is non-GAAP comparable summary income, non-GAAP the results reconciliation our EBITDA include earnings website. guidance A the provided from During call, upon income the in request. financial share, measures growth of available measures section are the non-GAAP a gross Resources the to financial most directly net call Investor available GAAP a of is basis. among currency These during Bottomline's presented on rates, others, per constant and

Rob it for turn over now me Let remarks. his to

is with to welcome this has Bowden who as excellent here Bottomline team. joined Bruce afternoon fiscal addition Good I'm CFO. the the this bottom And quarter an to Earnings just Quarter Call. XX third and

agenda Driving our good also part an acceleration QX review future the subscription Bruce central an overall revenue of a growth. in both see subscription impactful QX results growth I'll for remarks. the I report to growth which quarter outlook. during and we and growth. have and the acceleration available are plan. in responding expanding our quarter. will quarter's plan. and our is highlight be was then, competitive leadership and important very of dynamics. financial executed innovation his strategic provide an market revenue and We're of presenting First a our I product strategic financial was results And revenue delighted the extending following the market our at the return against drove my of the The growth our of questions agenda to most and of We Behind opportunity. our remarks. It's that successfully examples provide core of

for with First, year results in which quarter. the course third by volumes was products our of Subscription transaction quarter. even I'll pleased revenue We a of from ago. growth of million, non some at briefly cover the $XXX the XX%. up for XX% the was the growth key Subscription subscription was acceleration stronger financial impacted

of Subscription Looking pushout. as January. see subscription million since couple we $XX digital bit which we'll against continued from for down forward, is bookings confident $X.X in deals acceleration Paymode-X us larger the about currency saw while banking We're growth and quarter a moved in million QX. a is were prior

year. million committed million quarter. in plan to $XX.X the a EBITDA, in for We for quarter. achieve in bookings And our was expect the with Xth and we to expectations. Consistent track EBITDA the we're see step-up the on $XXX

the excellent So results for quarter. financial overall

the and the most results. excited of by to While opportunity. make our that financial even we're we're reporting, the really ahead We're we're pleased opportunity more doing with work

Our to innovation for key digital management, address highlight behind critical customers transformation advancement around growth markets a our payments a the compete and its banking competitive the of fluid few of business with central data Paymode-X currently the network. with and vendor made the the technology target and particularly acceleration development is It's our impact the experience Paymode-X market specific in to for UK priority We've Paymode-X, to going examples agenda we efforts of strategic for positioning plan. enrollment. on vendors, and most legal Starting a markets. learning underway the is the dynamics vendor spend technology analytics capabilities I'm factor digital market. designed part of machine and scale and

valuable payments, Solving business our insurance that providing vendors. payers vendor of more deliver can network to to payers turn get integration to to The revenues That value the more we automation allow rebate and value vendors, we're XXX,XXX vendors, critical and and network delivering Continuing for detail network. they increased receipt pain the formats allowed automated value to the and forecasting network and makes to faster that the greater large provide funds over has grow. grow reconciling as to remittance faster in vendors achieve and and the the alike. us

set legal our key our For management market spend opportunity is product growing a objective.

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million in Bottomline an which important The the the than provide and quarter. not particularly extend to adding gives our the it's While revenues, $X.X and cloud-based new payments. us proven element leadership capabilities can is we business meaningful treasury payments also terms significance and offerings less acknowledged platform. strategic It and current cycle and to of life is customers. existing clear cash

generation having experience receivables address platform the The and new now also us to any are XX:XX and over customers with element solution From to the position have capabilities customers advantage provides AR The breadth convergence gives next platform full the platform. the cycle. point analysts in for pipeline relationship Bottomline outlined an opportunity product entire Industry competitor. receivables competitive to these more platform expand directed we're Bottomline and extending lot customer our more and speak a its AR capabilities and about strategically Dr a innovations of existing or I've AP capability value right well and a platform. and on way opportunities the to subscription life in for of a significant and our away us market. our TAM each and single and and and market customers and gives shareholders. adding advantage, are revenue growth competitive Combining continued integrated dynamics treasury cash for driving success adding offering addressing lifetime strategy. a full developing We AP expanding that

rate, strategic easily growth. for milestone acceleration our see really quarter future. we're in subscription the At be subscription third million acceleration positioned will come Shareholders expansion conclusion, in growth our the with subscription in and run an can With million revenue. and we of pleased set, next QX well rewarded. product a the in in $XXX So, we're $XXX subscription our

and strong growth quarter next the As Xth we year. see subscription in

for to I'll then we'll turn be questions. that, with So, both it available Bruce over and

today. Rob. I'll streams. a and drivers focus of guidance our revenue longer Xth fiscal QX Then million for Thank going well performance as percent underlying I'm representing XX growth be on term to in the $XXX all year commercial Both talk targets. growth pleasure million metrics Total revenue for and financial the year. subscription you speaking was on full both prior being our to as importantly, about Bottomline. $XXX right It's provide growing our you, and the was good quarter in with quarter QX, is particular fiscal of the year-over-year. a with XX. a which subscription was Most QX into over those X% revenue very

metric goal across income all we $X.XX and set We to of of the consistent performance producing business. tracking subscription EBITDA, in all $XX.X well was of per with our ourselves. earnings equally Profitability XX%-XX% operating hit of for million very strong revenue million are growth every $XX.X we key share,

substantial focus the Let's from currency some $XXX we high who few from on that total grew achieved value an on revenue rate that on performance and were And continued Legal strong solution. to despite annual subscription are now headwinds extremely subscription our In customer business leading of minutes. saw with revenues continue QX, year-on-year growth and a platform XX% banking of our for base of management and were that demonstrates revenue from were QX in than lower as pre-COVID levels. not we of that run their our Paymode-X In as anticipated well remained from greater a the some was customers retention solutions as and live from management a by lifetime our from whole. Subscription volumes legal Paymode-X last digital payers including new revenue existing we of our add-on our rate transaction offerings perform solid in slightly leading well. this spend and particular volumes customer Europe. while spend recovering tempered our than XX% year, excluding strength net transaction growth products lower few base million revenue growth

expanded partners the our verticals across addition platform, selecting solution down healthcare, management solutions industry to insider some including achieved our $XXX encryption last National strong wins teams customer quarter. overall $XX payers agency of and digital performance selecting success a In customers sales digital added education higher solid our existing to XX bookings risk variety reporting this secured billion new solutions credit with and revenue we bookings channel wins extending new Paymode-X sales banking customers, and more from both insurance Bank vendors network. chose consumer fraud, also bank legal X Bank and through quarter. including X and and our management than direct with enabler management, and $XXX cloud National and have on spend banking Bottomline's our by fraud, relationships key we although Billion now a our frontline property Embark Bottomline's against a $XX.X solutions bit protect cyber and billion their million general of and our employee were XXX,XXX

maintenance revenue large which we that variability I those include all you increased saw streams overall reported other our they growth models. models number we closed pushed bookings propose know license quarter very revenue see deals but As convert you By have as subscription that QX, commonly primary Previously, future, typically levels when which, subscription our know that revenue legacy Several and and driver them are that now a bookings are objective. into real includes is way quarter. from of strong. customers excluded I to QX we from for looking some the from of because bookings the new

dollars. was just those thousand between difference the few a quarters, few past the hundred approaches Over a

tweak I this not material. anyway, But out I'd metric. call So, this to thought

from the hit earnings margin our earlier, EBITDA, to operating I gross QX product Turning powered up core in XX% continue growth. the of development to our gross per Gross XX%, rest to core margins accelerate we was go-to-market We from reinvested added quarter of that subscription and share engines products. X% margin XXXX for and mentioned our targets. into the our P&L, order QX income as by

flows flow free We operating and of strong. quarter. sheet produced in million remain Our cash $XX $XX cash of the cash million and flow balance

we acquisition not million we repurchase hand. treasury $XX Notably, the for As shares did and of quarter closed March we million XX, express and in quarter. of our investments any the during cash had on $XXX of

of QX, a strong year $XXX in to expect subscription QX the XX. $XXX to We million equates which expect to XX% - revenue we finish growth of million XX% over

less expect that guidance is communicated little that be was XX% than the now in QX, a to rates a previously currency provided because to we QX initially. primarily for exchange note anticipated range than favorable little You'll expectation when lower this XX% we that we

previously in XXXX $XXX share to our expected QX $XX $XX revenue of we EPS. across we income We is total expect core XX% revenue income $XX will to so those hit million XX% to per communicated When results, total and million of million $XX full and Subscription for growth, million, year overall growth, achieve be core EBITDA to - of revenue growth. million, $X.XX earnings the fiscal targets operating revenue $X.XX. board. $XXX to operating the EBITDA,

primary end to growth. variables XX. volume objective book looked in solutions. our revenue remain our timing live We where that XX% will ramp transactional to ahead of in subscription go fiscal to delivering of our pace Looking XX% increases committed consistent The we that range, We've revenue up streams. of including many at so and impact

and exchange many others. Forward rates foreign currency

have we of confidence We be what conservative we all in to taken assumptions and XX%. believe about committing elements have those to high

we refine Driven this our a ambition revenue commitment, expect fiscal ours strong XX% the drive progresses, growth to a XX% the of been new bring of to in through transitions by company revisit and to in the revenue model and impacts double-digit XX% the range. As has year arrives of growth. will It XX. overall projected fiscal largely we and performance minimum

achieve expect year XX. QX and revenue maintain XX% that fiscal We in this to to growth to through XX% of overall

if company the In of can $XXX to chose longer-term there to fiscal are accelerated terms the in we ensure choice next investments of committed are a are profitability minimum But to million drive EBITDA of 'XX. level higher our better of critical We profitability growth. that we to. a year

sustainable races in regular suspended now onset leadership highly and is result, today's people COVID technical we our foregone years, of increases past which market with the for a the not two talent. for competitive have example, salary as For and

and an million still to per In to allows opportunity addition, capitalize impactful opportunity continuing quarter EBITDA over prudent million market invest creation levels. in market enhanced new we front $X see us on is go these of making $X to action, but now capabilities, of us by investments and growth to deliver the in ‘XX the course to fiscal of product

million and So revenue revenue million fiscal more we or for ’XX, of $XXX total in subscription more. of or anticipate summary $XXX

and We to continue uniquely a ago a revenue company core very that operating our to potential and predict led FinTech the strategic Vistaprint's is report, with investment International two about plan top joined on I Angela fiscal you capitalize against Endurance continuing saw clear I market company with just growth. ambition to Bottomline further over middle you our become the EPS. White President Group and are balancing ensure updates of opportunity. company accelerating that and long-term build profitability the cash a and in for ‘XX Vice need Angela market provide $X.X against continue that financial My growth. priority next Angela has I'm us function as we the the joined realize for deliver is relationships IR also potential huge a with professional including on enormous a months I we line will execute commitments. an strategic of earnings to happy while plan growth provide saw income having and and generation. a our positioned We'll way in I line months Bottomline's highest a we'll coming for forward to Bottomline position look bottom experienced Along that that in with Relations, that proud Cimpress. double-digit of years. our billion and with details investor and to at with share Investor community guidance is that When to

we confident future bit as look deliver Our we those that represent every will the all fiscal across increasingly bright that I'm and to QX envision. ‘XX performance ahead beyond. Bottomline of and in strong QX of ambitions achievement

for open we'll questions. the Now call

Andrew state comes question from first Our with Instructions] Citigroup. Schmidt your [Operator Please question.

set Hey, incoming you prudent Can Rob. in philosophy expectations similar philosophy just Thank Street, that bit outlook welcome. communicating of expectations, along providing you taking question you helpful? on start, philosophy. your talk Bruce ask foreign to Bruce. with more To in questions of setting CFOs, in I'd be up it, of my again, to your an you Hey, for tend about lines outlook the and sort like of on sort sort terms do would is anything those little

position of a fortunate got bit think, the Andrew. Good mean, that's I a company joining here question. benefit accelerating I Thanks, growth. Sure. have a because respects Well, in of some I

provide can a optimistic view I So both least fiscal grow of with Rob by at with in in all you and providing feel guidance. that ability very our also XX% comfortable to ’XX

we my we they mentioned think very into the of There take to front control As at some but within in to I and conservative it's of a answer out to reasonable is tried achievable. expectations to My the want those are We lot I that more looked very, that that our layup. put assumptions, comments, not to here your goal I'd are take, saw. of a perform concisely but And of go chute didn't a say variables at course others. question us, it's tried I that. not, of in coming layup we are

get of is of mentioned baseline of growth being could that I then lot way more about potentially the that right a come that to as and up sense. XX% that to you similarly Makes sort sort it? Should subscription about it. think you of think reference FY visibility the we Got ’XX. EBITDA $XXX minimum for is then think And million

can wouldn't up able the XX% obviously were a about of EBITDA right that more or level. free of get reinvest deliver year. to that the of we real-time XX% course and the growth exactly to is probably to million think at margin, we all That logically XX% or gross in $XXX the more over will it, we way If

want to over things happen get skis, up So bring But those might adjust. too be far to we let's, yes, I watch the our logical before I want to think it would accordingly. expect don't we we EBITDA

it helpful. for lot in me even makes jump sense And FY to then ‘XX start make one that yet, Yes, at so sense. level. last and of the back That's a We're in queue. not I'll

circling of pretty So acceleration like accelerate or why quarter like in transaction growth this factors impacted the last grew in growth there to should it it factors volumes seems transaction revenue the like coming shouldn't like volumes you're business there transaction XX% transaction Paymode-X. XX% What looks and for of be non-transaction because quarter, gating to based by are seems back XX% in to an the seems that back volumes we the spend based back products XX% in should once the products math, robust revenues? consider to you having on the expect it this legal it affected impact subscription of, some businesses get just as businesses other faster transaction, sort the not

from think is overall the I subscription business transactional offerings, is average various suddenly it's it it indicated. going that product more, I think, in case of will percent out get various will products. recovery variability to across the to COVID it once through The average everything that that of Andrew. to kind feel automatically we way more out some we when minimum think XX% you but level kind revenue that the about the go is post to that approach growth of is of across transactional we normalizes product There will the business the the range don't

of of you've course, Yes, a mix got Andrew. factors,

you've thing ‘XX most mean we yet. the in probably said FY As I you aren't said know, you even important

XX% a So timing of factors XXX% confidence we and have wouldn't we're to number time to visibility go are can the and that between the the and of higher those. the a in growth variability ramp, drive difference level like looking those ahead. of a But all the it's commit lives, questions

the Thanks, lot makes sense. of Rob. Got comments. Appreciate Thanks. it,

your John next question. from Please Raymond James. Davis comes state Our with question

Hey, good bookings. afternoon start Rob, guys. maybe just on to

mean basically have those, be of think a could into as ‘XX already if on but XQ bookings you I of we where pushed for year-to-date couple of both a some were. fiscal got You it understand just, those at below closed. now I lumpy, were year-over-year that XQ totally size noted and and that basis, can deals look that Wondering out I

trying that understand to maybe you XX% bookings kind XQ the to you least of or that sustain just closed you that could to to just solve us could what look that help about like So need XX% date? for what's talk in at

Sure. off, out. when deals you Well, first so pushed mentioned

We the bookings have us, single deal of one for gap our between bookings kind what QX's and that close QX.

enrollment our we're bookings revenues when I that vendor customers legal spend some in revenue the Paymode-X so So terms so that opportunity are is in and we're that about fact through we've that bookings, and number grow how those drive to we don't to The in and that growth won't have of seen made deals those maximizing need how in growth. some that close around fact Paymode-X bookings, ramping go comments through a the go of of our appear there drive factors grow bookings. won't

I'd there's So, mentioned last different couple backlog. ways is of a And we. that then

the a lot legal lives backlog and opportunity on of have We to to ramp. terms go in terms and vendors fully spend realized come of both of network in

concerned year's that and today. see revenue the growth, of when XX% I next for So visibility certainly level can bookings to having that have about

the think back now In fact, model, that of that or occur year, at bookings if about best. impacting half next you our

a QX. be got have to as bookings we for QX stronger expect during remarks than need So we I bookings we've next very revenue pipeline in and the solid And question. they my growth, indicated were we year's in no

Historically, if about XX Okay. have a trailing of they the XX% of bookings that XX-month guys trailing talked months. your on range were you could basis of in XX%

they way kind still of was that that Is as Some true? that there. think trans good hold that revenue to a about change

You factors could the are bookings that but number. way there the ramps. that at look Remember it outside of

the and for the successful number. want to that more example enrollment a drive through flow lot are on we ramp bookings can of revenue with vendor So Paymode-X

but past number. see seems passed first off guide make little seeing in I'm and And gave Bruce, it's that sense a in that's your it you At that correctly of framed and is Okay. has here, the change in that's differently better I the, call can the think like it's this you're little of little it that a than understanding you bit I the ‘XX think a all to this is this just or a for bit how then, today and the the I that they're appreciate in what that because different I for numbers than we bit the is that based past? been kind minimal sure how of and know framed one

looked right, at a is number ‘XX represent XX is, where we higher. forward. to The XXX and that And to course and still investment because reason out Yes, is, the quite and and some XX course range lot the going we I was the It's I follow the I we XX to it of and I of the times quite think couple get hit we've if we way have would a make. can the it you're want said high high, think doesn't not want don't felt factors would say we deliberate over of I XXX there there the and drive a guarantee. keen is, as but tried for even here, it's confidence want I everything the of put the think the XX been to allows to that's XXX past a in what say a to is that to this XX number it it, fiscal number.

thereabouts things. be that would to investing a see perspective, margin Why gross say I it's it too points basis assume where Okay. down from implied And that then some on leverage, couple would be commented you operating some think so year-over-year that a margin, you on I that I to you flat about XXX think exactly you probably still can often. is of see fair

right And be this so just $XXX around with where of you're R&D specifically I all in G&A investing, EBITDA lines is and of about year will and the think kind talk million. this three

drive Just investments operating kind being the leverage and then see? to understanding eventual better made can you the of that

sure. Yes,

and you all. difference and EBITDA just about think So if you XX% between XX% the XX% or

average I you of EBITDA. I something your million had was think looked of when what at view like of the XX%, sort $XXX a of

So from about out top. I drivers XX give a XX, big you put right the can we three that's of what off difference that

success people a important we to time there. investment million kind fiscal That's for our million increases closed enrollment. the better $X The those functions first look areas to just give and the salary in to broaden first engagement, our our to of million and sales that product in as between set I that's and in ‘XX. years, right $X worth we customer then customer-facing and future. of there portfolio bring to those Treasury and functions, for $X.X Express add almost impact marketing we of at comments the dollars on $X drive two turbocharge other was right people I quarter really difference want better customer it's made dilution board that's said, and want offering investment that is cost one If we revenue ‘XX. only mentioned million better my treasury management bookings, vendor And ‘XX in we've to functionality our last when to

and So the are all communicated. put future in business. the think than just And of together, the when for level to mind you do you those more you difference right between of the guys we that things we had explain what all those kind

on me. authorization. stock will from bites That's one quarter apple did kind and be you've And handsomely M&A healthy take you where kind the right at of with last remind talked and about and talk stock allocation the me, valuations about your you to way given 'XXs just how of develop back about deployed you and I small maybe shareholders which the it given how Thanks rewarded. go helpful. are us think to capital try Rob, a missed the and balance internally, the think kind for Apologies, that you buy guys. Okay I for Maybe I guys appetite the well think would any just stocking strategy, do sheet. Bruce, and then be it, in buybacks things out as but lot it you the mid of

as we espresso. did this not spent we on XX treasury Bruce by did we, shares buy. well not indicated, We quarter, the Sure, million

in have buyback. $XX going about shareholder to value not drive authorized our program What's is million today. buyback We

So it's more value the appropriately going those growth to companies customer retain drive decade for shareholder of a those certainly you value rewarded adding growth and when today will of is is is customers or the we're see business customers customers lifetime extraordinary. comp

the and in soon at growth change we'll value we a where revenue, know we're So believe company been. is will and million in get this hopeful that. be major business where driving recognition and subscription I'm $XXX which And building we've from for

Thank you.

your Our Craig-Hallum. with George Sutton question. Please next from question state comes

Bruce. more a you, respect With the vendor are historically, I'm and curious, getting thought I and question to Paymode-X you. Thank be behind course, move. had that pushbacks you vendors, Thank and effectively vendor focusing the that. any like for been have pay Welcome. did sounds is on to focus you're on the working behind you the the going you of corporations where

not Sure. back. it's first vendor It's, push off, driven by

I bearing the freight, of you being cost card, tell if that's transaction in virtual pay of there's the whatever side Although will. vendor some the whether the type, you always push level back ICH model the or plus would to of

we're incredibly and that's payers new the not more I So vendors, that on bring platform enrollment. so focused to the driving payers, We're can but we're pay. platform I no, value competitive want payers course impression part payers. it's the believe more best The not and leave have on we to always of driven by wouldn't model, shouldn't, the and focused that for we the sales we of with

We more have revenue for the larger payers, the and rebate opportunity the for the Bottomline. higher automation the

I those for network to provide value we all that reconciling handle payment helping reconciliation, visibility looking it the multiple So get into value the for that what how get that types of make me, stronger. me is of many is things both can Can with do proposition it of vendors types I Am to stream are sides able of. is helping different from are get this of me at I payment. paying or integrate vendor payers it is systems, to

what revenue. to on drives more really it's what to payers, network about. and So there's Competitive that's vendors because the more position, And that's for value Bottomline.

on Got spend, there spent. Thanks. to or some year-over-year being us sales it to a Is it like of being and looks else can spent forced significantly understand, that something there. work. go to you're marketing and larger where other you. you sense relatively to increases One question relative up wanted it's money putting some clearly market I give just was to

team a on our part, how which course add we actually happens Chicago a environment team the We than and this that event so how evening human our and invest all ask COVID the will and digital Can prospect on a content, the We've digital to we and that things. marketing. customer less picked to marketing say that for and first Well use important is is, pipeline we're engagement, critical and remote. XX% building can there of that buying rather phenomenal how to finish quality in and of afternoon events but that's WebEx things so new make in sales have hotel behavior but aren't continue an engagement Dallas, customers. in of tracking process drove and it's marketing those in conference? you the have how and of we're a doing is continuing I'd expensive, interaction across bring driven line by before events Tennessee up change digital we're we and we're that investment all also making now have all

adding Yes, an there the how other through are and So drive but we're a through Bottomline those channels. we're opportunities can as making also partnerships capabilities. well the we in revenue adding teams sales does partnerships, investment opportunity to banks,

to be it's, areas an answer would the across starting probably all marketing. those it's but the with digital board So

comes state question. Gary from your Prestopino Please with Research. Barrington next Our question

for first all there of are FX called out assumption what for what really is going drag then, And next was in year. couple the you a Hey kind an you Thanks. in there at is FX FX guidance, things of here a in assuming kind XXXX to and in what quarter all. of of be the and for drag but the investments

the FX was in a modest quarter. drag

you we think of by point, way that is bulk might growth down one about our FX. think driven range we and about I that a said took it for was percentage QX by the

So some QX, an based expecting of did we experience FX rate not ponder numbers ‘XX that that what ’XX. from both headwinds about you in and bake-in nor we're experienced assumption they're in we we fiscal to idea gives the tailwinds for far. I QX provided on so what spot think for not basically Do ‘XX logic in

can what's between or SaaS us tell actual your then, of, and And subscription Okay. breakdown you revenue the transactions?

first I'll make that. on Well, comment step back a and

I it's that transaction, going the I certain be what, saw was attractive return You a hurt certain model better actually years model but us, XX% well round will economic transaction XXX% but and transaction. I a we've Visa more believe know think better economic customers as And that as grow be based asset disruption the on about more this some us is so we subscription. that's our is better and this I It my disadvantage. in there'll one year, it's had only time XX% revenue Mastercard definitely legal to what Gary, normality us it's well. that it's is a our revenues difficult the numbers time we It's sound COVID XX if model revenue doing I'm is and management can I'm past for have that Paymode-X follow to for based the revenue had yes model, we druthers; be and model, the that odd spend as that's way does, a transaction probably drive better. models, of was which revenue

our I think majority in subscription are work today though themselves even can that transaction times there Visa is Mastercard a to the But pretty of against portion well you. model. are the for transaction revenues

kind I'm here. of you the the the assuming some Well, to your critical. guidance next normalization then half business, be year And to I'm understand in are magnitude trying again year? when trying yes, not the just of transactional for back in

I seeing Gary think it expect, right we we're now.

when So about think we normalization.

in and two impacted. are both the primarily are which Paymode-X businesses, spend, legal We

them slightly into We about this QX, at above are going point above at or right the back seeing levels. pre-COVID

we were we're kind from back think there. where and moving we of So forward

up. seeing We the also are growth come rates back

those some in lapse coming up the businesses. there rates add course are of good businesses. but fundamental growth in to starting easier those dynamics just But, are nevertheless, you're and Now,

our of customer base of with terms volume, commercial the our traction. In seeing we're and amount

thank Okay, you.

Our and your next Please Needham with question state comes from Mayank Company. Tandon question.

Great, evening. thank Good you.

nice market, helpful. maybe to Bruce, wanted also on obviously versus the that do other value platform, you sense proposition me are just rails is you what my competition? Paymode-X us share Rob that offer how in because ask in today the also out you your add there yourself faring to around to get want against same maybe space. welcome you very Let players expectations better the flowing that your a and see dollar a context, AP I the to very of able I through able volume to which some provide the Are you metrics is is hot

We Sure. of other comments where volume don't the on over good out today what to competitive my that driving my prepared additional compelling our XXX The any really number network. have transaction on it portion particular runs remarks, a position billion through makes we're address them than value vendors network. more that our

is been their paid already will do of vendors are a strong Well, direct in the on their really of approach The XX%, network. a XX% part even we of we'll file get indicating vendors match that and verticals the can first we'll our all and that means as is a presence. XXX,XXX have important, perhaps on network XX% particularly vendors things we one be the where other that's there have

that automation process much the means to for that much easier that ramping is So to process the and of rebate faster, and the payers. process

market. single connectivity So winner-takes-all see scale you're than other networks. value. between to matters other anything the I bit, just but to you I market. coming I connection over going don't a This size focus is suggest enterprise isn't quite networks more we're to that provides say in as first in on other which think referenced more in We networks time, interoperability a and think

and other it's, network So has.

XXX,XXX pay. like are payers We would another of to those vendors XXX,XXX which and of have network has vendors XX,XXX

automation I in interoperability think going makes you're to promise that the will coming years real. see become

Great, that's Bruce. ones then and for quick maybe helpful color two

between them. of margin to or have quick this terms and it In towards sorry then follow-up the it COGS I'm of I split be a is one if is skewed evenly year next missed or should OpEx going the I over in fiscal in trajectory of trajectory the growth the around margins of pretty course Thank split abnormal expect the that's year? the ‘XX you. evenly terms Anything it is and we and seasonality. around of

want you broke a bit something between in restate I that said right? little make we just COGS be think got beginning Could up that Mayank sure or I you more at quickly you the in investing will I OpEx. be about, think Yes, where it I investing will of we to

be the or Yes, or other. in segments towards I between was one it on ’XX split going two fiscal wondering skewed the just evenly pretty to that is margins the drag

and don't as mean I past being drag we margins. quarter still I for XX% necessarily of at well. so are Yes, EBITDA margin, at what about we're as we on this what which a QX operating think looking it is did

we we’re what of doing So at level that are as XX% EBITDA kind drive growth margin of we leveling is creating think I gross revenue largely incremental course.

the going kinds talking of was dollars about into that earlier. the fact we're the OpEx back that So areas I and

don't currently year. seasonality. next for particular then we seasonality any And aspect No, I'm you mentioned notable of sorry. anticipate

much. so you thank Great,

your Our next Please question. with question Blair. William comes state Bob Napoli from

we're evening bigger drivers transaction over that the XX% and do subscription years Good on of and you not Thank be expect in businesses of And above going trends your Rob. the of Question year? to next XX% growth you which next current perform the couple to just the average Bruce. and. to rate welcome, just

position Paymode-X banks there. can every know you TAM that we'll going into customer see digital engagement, results indicates next to paid more of customer get maximum about we what time, customer and banking we going platforms retain competing same the question real see how a and pay huge to strong businesses No At next be are to bit the if certainly wallet year Well, year opportunity our way going our for the look for the opportunity. customer share at ACA drive gone we're and just outlook far our good a make there. can. We're so my can so And an very that, market's positioned then any last, which on platforms this time pay and and that Europe. in businesses I'd payment in beyond means is Bottomline for way Banking, because With interesting mentioned to with so means, more that. how balances new I the changing Open new I change really capabilities. that allow that's well for good

us Paymode-X drag business us year. about holding are set a hurting we or strong unlimited over set. time around see next opportunity see see but So don't We feel really the product We don't across, product that's a full look almost we back. daily on

never. Thank And think you've I rate. revenue net given guess you. I the don't retention

on banking like helpful just even that digital could segment that would rate if the over to Paymode, going if did that subscription revenue believe has even would retention growing think enter investors be you you're I a be I net transaction? those you it to XXX% by would it's give been to

in looked would comments something that be that's future. of in very number, that it's transaction right, think certainly at And COVID disrupted evaluate but that that I be you're agree and giving and a first the out taken. places Yes, attractive and to out we've some the the made bringing well We sort together SKUs number I that helpful.

area. significant And large on I the as APAR, into then, know, of and CFO. market treasury fits is, very office in just obviously that that the and large are Treasury players some the you how a fast mean growing express that market

to how business? some on but of is are strategically to expressed First, in cross-sell out that you build revenue can you expect us you out Treasury the that what work. going How give going then next year, color

in than in a it January. sorry, mean, this Treasury $X express than year $X.X have $X million don't quarter. I'm I closed It and and we Well, Sure. less less revenue less on was million than number was million next for

my not receiving entering cash, money investment AP It's AR treasury is the states really which the of like. state and think and balance, managing out, sending it's the payments about and se. market is per is the the all So capability middle about those of payments managing which managing if you product treasury

in all EPay life of capabilities payments of received that's developed with cycle of have think AR sitting in out. Treasury management flow and What in cash CFO wanted sent the that we've is to analytics that could of cash between middle, have we what bringing platform and you is is other being sort together. if piece machine forecasting that So cash funds cash do aspects will, that been does help advanced reconciliation and funds to full learning

than just treasury Treasury or broader Express. a that's the anybody APAR data entering full and wouldn't at really the Treasurer we then cycle. So and our And brings full and today how as of payments payments cash we insights full life platform a cycle life provider looking platform look the we're top again market is with that a else cash vision CFO weren't that that, offers at on

So importance. that's the strategic

combination. excited So why so that's that's its the relevance and really we about are

Thank it. Thanks, Great. Rob. appreciate you, I

from question. comes Heckmann Davidson. your Peter with D.A. state question next Our Please

spot be and If about growth currency initial guidance XX% US XX% tailwind the has be tailwind to your been about want I dollar for we against looks to a outside coming the exclude XXXX, for really to current basis forward. that. acquisition so looking taking point FX revenue like tailwind the weakening organic US quarter it and going has Hi, at questions. welcome going just clarify about was for about XXX Bruce. and basis Thanks for you're rates, XXX it my is the constant will like currency, of it's company from XXX that point the of [indiscernible]. the

XXX XX%. basis No, effects be, there and may don't I be don't account, think into year XX% converts so. currency the to this the We've think I may taken There for so that. than don't the look you versus next think over the about currency effective the entirety of think that of I but could I entire But, it's points. year. at when year more

have you And it, didn't give I digital business. the I to hear a then check Okay. did backlog for that. banking

the million this $XX drop in here XX of XX% to of quarter. I'm or expected as last and was stood We amount year didn't, happy just of backlog at to the end that the March but throughout across

And give Okay, cash did but operating that's helpful. great. lastly And really you an maintenance, I then flow just number?

was Yes. Operating XXX cash mean for $XX flow my oh, [ph]. was mean This is quarter? the recollection. million. did I'm you you It sorry, for.

Right. Got it.

Sorry, apologies. $XX million,

Thank you.

Thank you.

read have also that participation. answer conference. end at question And everyone concludes of today's for and session. the the you your Thank We

your at time. a may good You day. lines disconnect Have this