Usio (USIO) 15 May 242024 Q1 Earnings call transcript

Hello, and welcome to the Usio First Quarter Fiscal 2024 Earnings Conference Call. [Operator Instructions] Please note, today's event is being recorded.

Now I would like to turn the conference over to your host, Paul Manley. Please go ahead, sir.

Thank you, operator, and thank you, everyone, for joining our call today. Quarter Conference First Usio's to Fiscal Call. XXXX Welcome issued market website close earnings usio.com release, is the we which tab. Relations our The today after available the Investor under at on available Vice Hoch, call this and Carter, will and Product Frost, today Officer, and Louis Officer; Senior be President On and our Michael Chief Payment of Accounting for White, are CEO; Chairman Greg Houston the Chief Q&A. Acceptance; Executive Vice also President

during statements. listeners provisions today differ the risks statements Let XXXX constitute certain the as cause Securities in that the these in me and materially today to are described release harbor call such Such are statements to obligation made made safe and our earnings known with date forward-looking our could not this both filings of and to actual unknown update statements. statements pursuant uncertainties made are forward-looking remind from our forward-looking we to and press as do and call, amended. of forward-looking and undertake statements risks that of Private any subject Litigation of The the Act These the SEC. uncertainties results

your non-GAAP today, and then reconciliation earnings we will financial call refer will the and remarks, prepared questions. to to Management provide adjusted such we the GAAP EBITDA, will EBITDA release as adjusted During of measures, a to our includes operating call income. open

first once cash off performance start top remain with all volumes excellent helping in financial income. line guidance. start almost end, $X cash again track quarter XXXX with from up positive afternoon's meet over good bottom with and to to our be aided by on is interest and and me in Let strong quarter year our a million highlights year financial at condition to full businesses us flow of It's new this release. some the been in We

attention, today Card solutions could contract opportunity pipeline. These which increased innovative its have and now our create what Louis they exciting has has and the that little been are processing history. deliver single will to for to offers details, market business a robust largest of announced gaining go be volume these continues card this as as efforts to ability potentially but in signed Our rewarded very quickly program years. double the into couple annual a as being Greg our

in down Just breakage had The program. the revenues additional New down incentive card on low Margins added discuss. silage the by impacted gross our COVID order to Houston to Margins which City few plastic a and also a from largely of were margins, financial card will considerably wind last comments attributed results. were large with our quarter York year. margins our

our a growth us will significant achieve a enable that highly this this ACH our in will of below momentum, scaling of in cryptocurrency customer. by However, spending to solid growth opportunities increase strong be our this leverage profitable goal revenue no which comps the was SG&A year year business our meeting improving of be offset slightly, with This, EBITDA overhead and growth and our this once up confident positive our objectives are that will In helpful fighting businesses GAAP operating together and generating by in adjusted we financial year. expect year. with in we of keep longer objectives all summary, year, pipeline the a the to the a ACH incredible start growth. but was end large tough earnings to again to solid a achieve business, of

Greg call the turn Carter. to like I'd over Now to

processing processed once up volumes Cards XX%. for were up both PayFac, Thank XX%, where volumes were transactions up everyone. quarterly all-time led an afternoon, Paul, dollars set Transaction Revenues you, and and XX%, record by were good and again,

So its growth. strong PayFac continues

transactions PayFac. Keep processed card dollars a were all-time whole, are records. focused on For in as of mind operation the and our that efforts XXX%

trajectory. we [ our growth performance point we the the our we major improve. Today, to to entire attrit performance legacy significantly result, more that portfolio inevitably and are all reflective should are for announced a will in Singular we on of seeing with gradually PayFac, As expect ISO our ] PayFac inflection results business of be that expect coming a better we the of alter we verge only from PayFac growth believe

payment We $X have volume. has integrated ISV in provide ERP just signed credit to our agreement web-based annual processing over leading billion ISV a platform. with an card

this their has links annual of we from and we along the to boarding the our now to is payments program million test generate over use integration sending potential and merchants to card run can the double recurring ISV so that processor process. Later a $XX moving small convert the can some volume merchants, with credit month, set start right will So of existing our anticipate processing program transactions. platform. This implementation point, live enrollment this revenue. out At processing

and board, streams XXXX. merchants later and meaningful associated the year As of quarters we become more during into believe revenue will this the implementation

overall of the smaller the similar but billion. a conversion this the I Over here. I'm ISV. offering successfully integration their of seeing been for of commitment approximately are of [ merchants we'll the that we rate, have but PracticeSuite about competed penetration the ISV. In is revenues merchants proud get we as this team lion's a targeting total, ease aggregate think business, large the such are $X share better positive XX% of of ], with have we ISVs time, and because

fraction allows a were of flexible to year. platform strong hands able extremely payment use, This flexible. numerous offers that network, industry's service glove have would not arisen, their a pipeline. dollars of a opportunity in merchants payments. implementations of enabling this demonstrate in additional industry the This the that first the it if best been pipeline. is association quarter has only throughout never capabilities our of through industry. Quickly merchants has we and an manner of and And is these We there's of the various robust process to meetings. easy won and electronic implementation every for the solution payment because We well them white this ISVs the ISV PayFac integrate successful pass our easily are So business trade to the have go is still ISVs was to to other the applications, still as soon. confidence all also into sow It technology the as to to added accomplishments, a expected PayFac three a for recently with heavy quarter and educational of fourth Usio vertical are a be stages to had now leading market our some building primary processing reviewing awareness source live, number we customer universities

our as stick quarter. and results producing helping the relationships We've and improving it. to welcomed help that's strategy to large going marketing continue ISV more we're Our are and It's it, stuck upmarket a performance plan to this opportunities move working. recognition, us establish larger such to to

Frost, call I'd about Now turn card our the to Officer, talk to over business. Chief to Houston Product issuing like

setting $XXX you afternoon. consecutive continues. our record. great had thank year. more to an for Card you, loads quarter, the all-time new in a The to Greg, and million start and issuing everyone the than Card momentum in call load card third Thank quarterly exceeded our participating this doubled growth

XX%. We transaction which cash including up purchase up in withdrawals, growth also was saw total volume volume, card were Total XX%.

are the revenue metrics cards. very off but card dollars I metric. acceleration If City breakage in New loads even going down, in program precursor interchange, have I'll York load are up an beginning XX%. transaction And that wind our this fee [ and We're you the forward-looking mentioned quarter and mention important expect revenue. remove more fourth an ] have has They been trend volumes a the would these to to the in more quarter, in running so through quarters. positive. third been operating again

a strategy recurring mentioned and long-term have I of corporate offer is before, to expense build other revenue. programs portfolio that As our

gross features reloadable operator water parks of announced loaded resorts, recently which program, parks, of all a will expansion their new card. we of a margins. Recently, on Money. They issue increased launching with will of card amusement are clients flexibility. the and be our and with dozens relentless We They new instant with relationship general-purpose customers retain our Mobile GPR providing an contract signed a with new and focus this

government program launch. relationships and issued $XX numerous entities, Our that with continue XX,XXX since Committee million Rescue and International cards has related loaded including

to attract own a plan. account new Our enables new advantage growing individual are external employers tax have make health benefit tool employees with to continues to we that commercial care, In authorization that their health contributions accounts.

features and continue on a network capabilities growth and We provisioning consumer Fed the consider such Android, in-app debit working functionality care integrating on vertical. We're now our on new as also Akimbo cards. adding loading health to

agreements. new signing are We

Hoch. on robust. to division issuing we Chief And recurring turn the at to Louis the with side, pipeline of the Our increase the remain strategies Executive excited future on improve Usio. And positive I'd over to I revenue and card margins. is and continue Officer, that, and to like call are our operational about working Chairman

our meet you, proud for and they line in And year. kept guidance I'm both everyone. accomplished. achievements on top track and first Houston, our of they welcome, the to team have and us the quarter, Thank bottom that the

start solid couple the a [indiscernible] increased of me with in to were both our mailings quarter. the strong business Let in delivered documents lines. Output million. electronic profits in year document through million, exceeded the quarter and $X had a and $XX quickly volume, Solutions delivery and electronic go mailed

volume unit on However, was the a lower per lot of price jobs.

were due lot were than revenues quarter strong to last same So understandably jobs. where of revenues a lower onetime year the unusually

to efficiency of been resume increased reduce have to our more the the and helping been expect new and of speed. growth new in processes. for while and sold. the in optimize machine than our second cost increase to enhanced last and noted delivered further in quarter, associated again productivity. [indiscernible] output goods quarter This will time the also on refining decreasing we costs. its the sorting processes the call, new second processing capitalize we output once new in I equipment machines As the breaking his position capitalize documents printing and is capacity we're on to investment overall one while team and capabilities its machine while continuing consecutive reason first have This the our by paper speed volume the on electronic greatly

in noise hundreds ERP the This I of our we what our house year-over-year of a normalized We're and continues could consecutive now quarter but view will to dollars all with acceleration enterprise comparable ACH, check there ACH it's well-run the the check is exhibit [ return electronic large, no system to in abundant that a be history. ISV also part the live company's there up be of come XXXX transactions process proprietary And quite get to ongoing team have small, sales volume rate. historically in and provide XX%, is in to since and Turning landing that has are PINless single X%, ACH strong electronic rich like saw Greg Fed any we up largest check quarter very clearing finally, a the businesses. cryptocurrency growth. In numbers. [ opportunities. And congratulate out will yet XXXX. program transaction the level to. compared the third installed and not recovery first close exceptionally wanted for industry real in medium-sized clearer growth debit of other X%, outperformed processed market. we ] is our we're up voyage ACH and into business, success or the longer But of pipeline comparisons where when products to ] This just the every the of something will his turn XXXX,

While generate also for billion only payments. $X these in card that They businesses we offer a revenue, about credit collectively accounts ACH payments. over XX% believe year and debit

in are adding this $XX as another should to meet conversions our to for to ability already program needs. start card business contribute later by program be or processing demonstrating has processing recurring soon more specifically won volume our with underway, custom opportunity year. We beginning So has to Initial revenue. develop annual discussed, this million see a will while annual our potential to to results a Greg Usio. The we that their the the tailored ramp significant double

note we will be Usio. I ISV This three provider, them easy, necessary from financial strike growth. us superior position our a result, the cash end over [ million maintain the and we that convert ] our As the and accruals. to with their months of in to cash needs in their providing convenient support the merchants which, with payment cases, reducing notifying to quarter their at $X also to capability payables many while resources investments position processing significantly able the existing with need make over of the were to our strong provides

overall, had year. So the good we to a start very

first in the company's were where potentially new strong had reaffirm I'm recurring down volumes The and it. guidance. we largest rich, program came more remains quarter added the history. in or our the equate including be prospects, communicated, XXXX million annual in megadeal prepaid all revenue few that board to as but pipeline previously And a $X projected internally essentially pleased could across a potential. Consequently, the which to With

operating and to expect XX% approximately million $X leverage, enhancing XXXX, We expect the between on XX% million. be up for revenue between focus to EBITDA we with adjusted to be $X.X

believe In to XXXX. With to fiscal question-and-answer positive GAAP conduct would we will to back that, the session. generate call like addition, in EPS our I operator we turn

Instructions] first with [Operator Our Buck from question Wainwright. H.C. comes Scott

First of standard. the one this What's announcement, the sounds been Greg. morning's probably it On historically? for frame is like is that conversion XX% kind time for

some higher Just we're our I XX%. back have XXXX, through with this and up to context, in rate We've -- ISV, the at think much to gotten was ] conversion services a particular But office target XX% to support the client conversion you give XX%. going to rate. back around [

ERP commitment unique software. of the and the the nature of ISV their because said, I As of

just specific [ some be to that their start So be of of large companies a specifically in month. third merchants it's that matter other quarter, customers voting customers and will -- in, one those phasing of later start this their but ] from going the we'll really different will

the Or get is and mean does get you kind historically away it cadence or it XX% more pulling then a of out? XX max you XX% how XX majority climb I it's later, teeth to where months go? the of conversions? onboarding and months, X And of slow right is it months, that's of

question. XX% We've a convert initial no convert others and an we've then There's of set others that the ISVs had great that got to answer. follow. That's in some really there's and And mass. surge XX%

marketing we rather we're doing at unfortunately, there's than I to it's support not answer campaigns always in merchants the standard and we So uniform outreach those But you a the provide that. later. that better dependent. that getting or again, sooner can't But provide, a various given because converted substantially give specific answer ISV

load a volumes, the Houston, there end widespread? a the more prepaid is it responsible program year? programs Or on single for the through expected acceleration the of is couple or are of that

portion them We Class X a past, the government on handful. in responsible of programs. ] the we've Mobile There's International call but handful mentioned are as we numbers a And a names of loading these have recurring my Wallet, a I Restaurant do little bit say Committee say today. I'd And would Money. off mentioned then [ head, to X will these be the large growth. for of

it's So it's but it's not not single a two not program, XX programs, programs.

consumers pace cards at And they've loaded. programs? universal? it once does different the been is which Is that across the fairly Or utilize

I actually factors. No. based mean a it few on varies different

be about will might percent small to single of only that card. $XX unspent, extreme, recurring is substantial a programs, while other dollars and even XX% that you a of $X,XXX have those a the to let's recurring if is that of percentage ]. kind card, than [ it's dollar on call especially $XX plus single load where about and you it, you thing see higher only but dollars, [indiscernible] a X% a of it's certain that's $XX $X and remaining loading so cards. that a If less program only spent. But spend making ounce an than the one is may XX% spent $XX amounts, that's promotional to that's those unspent XX% So spent Well, those the XX% and with interesting think you very program be low go see rates, we're card dollars I XX% loading higher on

the So you're out of when on is cards constant, on a in ways, amount more talking unspent, funds less dramatically dollar less evens type but depending and percent about kind the some bit that of little or of program. the varies

last then sustainable? whatever that I'm And one that's exactly just incremental And growth? driving it for guys, ACH. on the is, curious me, what is, is

not future, is with include ACH's Fed we're the associated deals. And the and volume revenue [indiscernible] the [ But complementary in incremental service, The will now. and closing debit. clearinghouse which -- more it ACH only ] includes

So do complicated. very that's debit, there's PINless not many providers that

we're starting up to closing more so ACH PINless new go and from sales deals debit our And with volumes well. as are

ISVs meaningful And ACH have also more to contributes that, just number add that's we and volume as to to a that becoming now.

has concludes further This There question-and-answer no today's questions. The are session. now Thank you attending our presentation. for concluded. conference

disconnect. may You now