Repay (RPAY) 10 May 232023 Q1 Earnings call transcript

Good afternoon. I would like to welcome everybody to REPAY's First Quarter 2023 Earnings Conference Call. This call is being recorded today, May 10, 2023. I would like to turn the session over to Stewart Grisante, Head of Investor Relations at REPAY. Stewart, you may begin.

you. Thank welcome quarter and call. earnings our to afternoon, XXXX first conference Good us Co-Founder Chief Tim Morris, are Financial Chief With John and and today Executive Officer; Officer. Murphy,

beliefs forward-looking making this These results. set are and statements During forth will risks statements regarding be to including we about events the the statements call, forward-looking materially XX-K and our uncertainties, and subject Form our most SEC recent differ today. make filings and related we in may filed that to SEC. estimates future forward-looking with today's from results results any and those in Actual XX-Q

Forward-looking information intend only of to to will also investors, do effort to by we or except statements them, an speak required today's non-GAAP as discussion today, assume and references financial measures. update law. include obligation additional as certain provide any In not to

non-GAAP company's of growth. earnings in can Reconciliations explanations the on of those found other to each include materials with and supplement, financial and release respect today's organic the and REPAY's reconciliations in IR Those measures other site. available press are explanations be which

in attributable described software Blue materials, As during Cow in is organic divested QX business REPAY XXXX. Blue to QX Since Cow incremental excluding XXXX. QX calculated by growth our contributions XXXX

like to turn over that, I With now would John. to the call

diversified the and growth the remain largely Payments business results opportunities basis, quarter growth organic in segment. growth of Thank first an about profit highlight the provided which results. We Organic Consumer to of driven afternoon, XX%. today across our Thank everyone. of was year. XX% performance and benefit resilient strong these On both to you, segments. Payments a we good We gross Stewart, and Consumer review QX, you for our reported and our the us Payment start Business in believe joining by excited revenue strong model.

develop our sales also software enabling pipelines our now to REPAY, verticals. integration XXX across go-to-market robust We have across partners

the quarter, also make progress during and organization perspective, business optimizing we to streamlining a From growth. while our in continued investing

our well call, have on on of Business focus a us of each organization discussed completed as Payments. we business has we into our on results we This the segmented place Cow. XX, enabled our divestiture As the February QX greater needs and to Blue Consumer Payments And and line. as results

by Our along as experienced expansions. product the well Consumer secular gross Payments the segment client organic within growth recent focus our for implementations, driven mainly with profit and demand go-to-market year-over-year, tailwinds large industry XX% products, payments on our ongoing as the

new software Payments. quarter, partners the XXX. we our Consumer X software bringing in total added During integrations to

integrations relationships and are as decrease by focusing new We payment enhancing in partners efforts. features our our also on modalities as existing with these sales expanding well with our product

we focus Our are and enterprise efforts sales continue clients, large internal on to winning.

processing auto private debit we is QX, captive in arm which signed vehicle new clients across the lender a In another payments auto captive large QX, for during of be suite providing lender. payment the finance automakers and REPAY of full and the for And we X captive will United card States. the ACH enterprise. largest auto signed a large internal used

to great growth. a is future continue the We for automotive that opportunity believe market

credit to over union unions customers XX union a our ours. remain signed quarter, Credit of also We bringing credit focus new this total XXX. clients

Henry accelerated quarter. integrations underlying facilitate changed trends order our partners with Symitar and to distribution as vertical. to last continue We enhance Jack have from within The this key in such not MeridianLink and upgrade

a with perspective. the demand borrower payment for products still and and are to looking are our seeing ways our to engage clients' clients us more from We for interact

tools easy half bill. consumer an than their interested for internal be Visa, help consumers perception cost experiences mortgage enable to customize conducted in servicing solutions more are servicers study borrower We transfers to keep by recent down. automated pay card to REPAY. of continues mortgage servicing From messaging servicing to our with Mortgage from using found growth better a of debit Payments their methods Digital space Consumer opportunity a segment. is to acceptance

prospective In addition, our indicate demand vertical. clients mortgage within payment conversations modalities strong additional with existing and the for

align to Our new Visa we force truly partnership the future. teaming flows offer to with are Black in differentiated Knight capability with payment continues a progress. of And growth to our

Venmo services side, solutions, making excited our product to suite to adding of verticals. available U.S. are we're and that them to wallet the announce On we across REPAY's PayPal payment digital clients

clients Venmo have accounts, eliminating payments to designed help long on of have to customers customers, as is boost This capabilities, secure companies payment enabling to makes funds addition digital wallet will With accept additional and revenue from the using ability overall make these convenient and payment their REPAY's and the found PayPal methods payments clients time. supporting offering likely preferred more payments forms.

model through In volumes to continues Direct selected recent most recently back to strongly. MasterCard And deliver Visa announced perform the Our year-over-year. Send banking transaction comprehensive modern first as continues and our up due we solutions to XX% platform which providing an time real share RCS a Conference. and MiCamp quarter, received REPAY that at We the also processing Association Instant Solutions and its operating selected reception important to approximately Funding end and lastly, product take transaction clearing Transactions settlement with processor. redundancies. were customizable REPAY's process positive ever-increasing and Electronic has while We're ability

Payments segment. on to Business our Moving

During Payments the first gross grew single profit year-over-year. Business digits quarter,

a in being time we line Our net and saw the March, positive from lapping was new impacted quarter spending, momentum. growth client acquired. Exiting media political large implementation delays

robust as as remain pipelines sales our ever. Additionally,

management with with sales leading larger and to integrations clients. management systems dealer Our shorter cycles are hospitality systems

in several annual Baltimore the we municipality large large onboarded budget. recent management the in by During HIA. announced we adding the hotel the are a vertical, multibillion-dollar properties, In quarter, vertical, our recently vertical. previously hospital driven signed the county healthcare and with live to first we went a with LifeBridge area systems HelloGM in and integrations Health And Northeast within the property

further During integrated the sales market. quarter quarter, this continued teams during XX with software business integrated our are partners service X in penetrate to massive account increase added payment we and total. the to internal We now and

of services our enable providing to customers integrations pay and processes firm specializing technology solution. One Optima, digital software Optima's will with accounts automation suppliers a payable streamline consulting in payable solutions. accounts new Optima's vendors integration directly and and intelligent IT and securely was transformation The to further

technology payments improve and relationships REPAY suppliers This overall and through payable digitization. vendors Dynamics streamline platform. Dynamics enabling Business customers We and aims moving with the to with send of support operations, businesses are adding a accounts AP the XXX integration Microsoft automate evolution Central, to towards integration

our in from realizing supplier continue consistently network. initiative of ways consolidate the In our March, we to savings AP we're to reaching the to processing cost find And build cost Additionally, looking we enablement over XXX,XXX functionality, for now business. a synergies processing volumes. began vendor AP suppliers payments in strategic business

can growth an you quarter of a We across executing incredible and business team as the busy we and strategy payments. consumer productive organic amount for opportunities. remain as see payments So see, on on our focused

balance to monitor sheet, currently maintaining for is and M&A strategic While strong positioned also REPAY a the while with well continues generation accelerate related M&A. potential cash growing valuations. profitability to landscape

year. of wrap progress our am so To call over this the we before to far have up, turning Tim, proud made I

pipelines are strong sales and Our growing.

as teams believe about that we drive products client X have over best believes of rolling speak remainder to the We new the the call We'll excited road year. With we our that, adoption. new ahead. industry the is Tim existing also out results about the more turn that provide I'll will and have and Tim? mission updated our the color in thoughts in on and to of

Thank you, John.

a of billion, organic refunds points. the QX average due take first volumes key of This typically an payment lower prior was tax financial higher to guidance the refund go results prior REPAY financial was represents rates which Card refund XXX years, this basis were over primarily lower by season. experienced was quarter. on Now quarter during solid first being XXXX In $XX.X over approximately tax for versus in in repayment increase results XX% basis an a impacted Take review resulting year year. a volume metrics. $X.X across amounts before let's down XX% our delivered tax million, Revenue our rate approximately and XXXX. of

our basis. XXXX increase In XX% of addition, several gross Payments, strong within of Communication Solutions noncard was performance million. organic removes an businesses growth Cow organic to revenue volume-based in in on we Funding. of QX Gross XXXX. incremental approximately $X.X gross Instant attributable in to Incremental in This was Blue approximately Cow $XXX,XXX profit profit specifically million, Consumer attributable had $XX.X and Blue an profit QX

profit growth gross Consumer reported QX. Payments XX% segment organic an Our of in

and implementations. we growth As from strong John existing client mentioned, saw clients large continued recent

Business accelerated, optimization who our acquired. lapping Business political processing Payments gross during the Payments in pipeline from our year-over-year. X% net media lower ramp gross growth delays initiatives. on profit being client quarter, sales and Exiting offset profit providers the and excluding volumes benefits election automation the spending client Payments from implementation when the the started cycle, consolidating from demonstrating payment Our increased side large after while a growth 'XX Business cost media, in was realizing new

First $XX.X per $X.XX million quarter or net share. was income adjusted

adjusted quarter million. first Lastly, $XX.X EBITDA was

the EBITDA first along margins was came as due quarter towards to higher a tax rates EBITDA seasonality, this and product First during with investments in technology. XX%. lower refund quarter adjusted continued resulting revenue expected take revenue percentage in sales, year's than Adjusted of

on rule a XX. an the the consecutive has For of basis, company, XXth as REPAY public surpassed quarter organic

that makes best-in-class organic compared believe double-digit to margins adjusted combination profit continue along our We unique to peers. EBITDA growth, the of with us gross

on Our forma a approximately pro now leverage is basis. net X.Xx

to and leverage generation, during cash net flow our profitability the any expect decline strong M&A. from potential We our excluding naturally year

for the $XXX total of As until undrawn million and X% of mature $XXX with access with we balance million million a convertible $XX XX, approximately forma liquidity on February million. not of $XXX revolver capacity REPAY's coupon is amount does sheet cash March pro a of of XXXX. to debt had

our Moving for outlook on to XXXX.

uncertainty, remain the outlook. macroeconomic current results our Our year-to-date on reaffirming resilient XXXX are we based

to expect million million $XXX be between million and $XX revenue $XXX billion We to and volume adjusted $XXX between million, to $XXX billion, $XX.X be between between million. be $XXX and EBITDA profit million gross and $XXX to and

the by a assumes growth QX about talked to implied our call, our we mild outlook XXXX moderate As recession. on

mentioned, expected slightly due of the while in contributions. we first As normal higher organic in is the year of half XXXX comps growth second tough cadence to be the half quarterly the we of to previously maintain

will we strong results media political segment lapping Business XXXX. the be in reminder, cycle in to a Payments As due our

gross our the on Page posted bridge XXXX outlook the For organic of company's growth, additional details to profit IR XX site. XXXX supplement refer to on please earnings

conversion to of accelerating past throughout realize the strong continuing as flow the cash forward We over we product sales, We're free to remain in in and from throughout remainder strong continue into off XXXX in years. expect investments adjusted benefits the year. and the this momentum to the start to year a XXXX, made we look several XXXX technology

call turn operator over Operator? I'll back the the now your take to to questions.

Instructions]. comes Ramsey line our the from [Operator first with of And question El-Assal Barclays.

solid on Congratulations quarter. a

in particularly Your take comment bit you Can terms of up, drivers there of were some consumer nicely. a consumer, in levers achieve you on really how rates that? or little the the were in up

Absolutely. Thanks, Ramsey.

it a rates. a take There's of agree for factors strong was we consumer quarter there. So couple

this it a little to being season different years. due was of tax year refund than prior Some

have down. And it a refund fees on were refund that a rate when So we higher certain based pricing take be sizes convenience where amounts. model average happens, lower overall would called average

And last so opposite actually occurred in QX. the that that year was

non-card and experienced increase take volume-based the Instant and some solutions rates communications terms just difference primarily of And nicely as then consumer those products year. this the performed So the also, quarter really well. Funding in we that in in like there's

drivers. few a are those So

off as factors. roll we we Great. catch-up for you of about going segment gross client guess, next forward that In some how large implementation that think kind factors is -- Or QX? those kind to business those profit, me well, on factors we which, think guess, how the by are mentioned, about has you should a other segment the A How couple of should was that here? impacted see, should completed? I as to going follow-up impacting go we you quarter? of words, I of are see first, impacting

Yes.

we as growth exiting faster -- we March. we saw in quarter So the mentioned,

have QX. be delays that continue I roll-off think new as will the so quarter The into And some well implementation the client of ramping. have but And be we some caught should completed up. then wins new will in

to led growth to And continue of combination we expect in higher I think March the those so QX. then that into and

So QX. there were factors to some specific

Heckmann question of Our line the Davidson. Peter from comes with D.A. next

a about little quarter bit captive lender. private -- Could OEM heard you on relative of on I last OEM a side. auto so little on talk Congrats to those another if was was this the a Can captive other the Mercedes? OEM, the about personal winning quarter your you sizing talk the the win lender potentially OEM correctly, customers, bit potentially lender

Yes.

-- years that ago. won so the we private OEM captive. few Mercedes was actually in announced So Last we quarter, a a QX, auto

Mercedes. OEM So it's consider auto a finance another to then technically QX, but And large, an privately it's be I captive would announced in not an OEM, company. held what comparable we large more to

'XX, we're growth to ramps XXXX do but household very And this throughout brand. large and remainder business the will meaningful large be contribution to not fully year for year. contribution next a of as ramped a expect in we expecting So the

it's years. us it be -- in so And for meaningful will future

And like of Okay. what you originations? in type in any comments the of to might can their appetite they or side lending you're talking customers or may changes terms how great pricing not on and That's terms provide hear. may additional making be auto, impact just then to your that personal both of that

optimistic credit -- we Yes. managing have some last we've tight. underwriting still of focused loosening and heard in cautiously with private still They're they're of trends, this from the as they're that mentioned lenders, lenders standards pretty Very on quarter conversations our reported similar still as are some already their on performance. quarter

we've So demand said there's lot again, before not But of up of this opening a this credit. type originations. that for

critical to fund And open to think comfortable, as demand little And more and that for and so more the more one the being up get us. visibility feel we there lenders points as bit of originations a demand. they'll

different quarter that we well. talked quarter. as And up from really large last positive the in we been a last not that's So about win had really ramped in and QX, loan space personal that

That's great. That's great.

quarter Cow. prior the second Just Would for revenue item $X.X for one year about the in period. be housekeeping Blue million in that

that out X.X% 'XX. That's we'd QX right. have roughly of of Yes, pull to

from line the Andrew comes question next Our Citi. of Schmidt with

the for down little roll-off, the there Payment and drill just large client to you the talk a wanted bit a The just more on second I segment. maybe -- about Business suit? is of situation be was it kind that other clients think more a you little in whether relatively Just unique around possible that a situation one-off color follow could or that would helpful. can

an Andrew, think it's so -- obviously, acquired, account got kind We of it's it's out that John. of control. unique. It's our

mentioned space seen that did the really best in And that's be obviously, have some implementation are obviously side we we the all space. sort we pipeline as we we then on see up pipeline business spaces in of want couple activity That's reasons of what slipping but that a so and And it. reasons we great for in feel those of unique. wide-open true then all and payments invest opportunities think And in things I've in to about us, all of the the our pick on April. want to we the of those

So we pipeline. year executing -- remainder on about the of good on feel implementation our in our that

with to on seen mild maybe And be growth of moderation expecting macro would those the year? that helpful. the what's throughout to is assumption fronts in it. there And pretty come. understanding any I growth Any strong to have you're the current the the -- Payments how And be help terms clear, understand in the that then rate moderate a still progress you're Just baking Consumer of more to Got Just there. just yet? on segment, you recession? signs

QX, were with Yes, seen we continue mild very of the want in absolutely. and but growth quarter, We Consumer pleased planning early with we stick recession. strength to moderate Payments the the a do have strong, assumption to really into

this of about example, end of we quarters. like type been I think few a for for -- We macro already are environment auto, in has probably we, seeing in some talked markets before, our that

That quarter. to in back -- But we of may play. is that see this half the into still why remain prudent do come that could think And it's nice where said, year is, the be so year we growth just that's growth it think macro next conservative. being you consumer

just so And that. we're maintaining conservatism around

Our next question KBW. the Sakhrani from comes line with of Sanjay

a This is for have was the just actually just Kwok first last follow-up Stephen question. Sanjay. going in I I question guess around

assumptions around of would could tougher and environment. there If it outlook current potentially current, conditions the be the were terms as In much where differential of to between a remain the how be? your same

I think mean I it Yes. closely. monitoring we're

report we mild, a -- is and mild year become or think we quarter. as think in continue do and to don't high single I for could I like digits update mid-teens. would to and said outlook the more deteriorate, incrementally And positive things more are we they is the that low if low each stay think moderate folks as on we've double probably digits, like recession the past I

see the visibility that moving incrementally we middle of more if somewhere we into macro. us could positive in potentially just with So the range became

guidance, Got that are little at puts because the I bit then takes take what if range? trying it. a about quarter? the just the we XXX dive first XXX basis to that gets follow-up a in the deeper versus around take rate, it the was that had points to works your And us just full was out and year look XXX Like

question. Yes, it's a good

talked the caused could take it come due just large enterprise lot seasonality refunds. be the described I to we take some higher. lower QX were tax that ramped a of customers be rate and rate. So There customer in down, to that it related guidance will at just provided is naturally just dynamics about we when a a we very enterprise like Also, originally, to

take becomes for So there's then part rate of a contributor, BXB potential a lower. slightly as bigger has down. that could the bring the take and And a that is bigger mix it rate become

the bridges XXX that basically some from the those or look items are So XXX we of year XXX. at would the to full

Our next from Truist the Jeffrey Securities. line Andrew with of question comes

extending. But And you you generally, cycles customers it enterprise you the like great appreciate go as think you can the auto question. after these on taking lumpier captive see this business I your comment to momentum. are good bigger all of mean some just something Guys, to sounds whether next is year. or we in the Is not I get need John, does in this have just with big a ramp estimation? about? that upside? sales Or

Andrew. upside. should Yes, it be

As we it quarter just them. large time implementation would year, that cycles them of first just takes we -- you win had because this large a the with and to implemented enterprises, implement win hope

against offset So 'XX. that 'XX, will help which contribute happening in what's in will

Payments roll around more to Payments. we that. have opportunities contract. And we But actually both Business So We're to us deliver. evidence if the it more But we we see takes see able should I [indiscernible]. [indiscernible]. to I to past, obviously time enterprise, execute which us -- in and investing and see continue in for that's we things to We there. for under going We in those mentioned think sales would Consumer the things at the to suspect be to of obviously as expect those are the if they at continue I for pipelines, execute, our just

it's just mostly like I incremental. it it's maybe Okay. how it then consolidated Is But all Helpful. a of like it impact that what you're your and looks kind margin winning And IO? helping about seems might you little there? talk forward? type you RCS, characterize can just And recognize business margin. the going EBITDA can on traditional bit of

Yes.

about talk talk So what part I'll like, it about and margins. looks that Tim can

that So strategies execute processors ability makes we to capabilities that to it's able are them on unique unique. give several their their

in own the specifically and clear movement them technology, of areas just own And world money gateway, their Specifically, potentially money types that all we're helping then not many the they are different may that flows. and various in. and their the with we're vertical in e-commerce settle have

let So getting we've a of And is, we've been platform platform inbound we're think think, margins. to state-of-the-art are and an great as amazing then fortunate contribution a Tim partner ones able as is about and growth modern for we have lots talk built XXXX. We're that with as partners. that far strategically high for interest the there. that value we from And I'll

see of businesses to Yes. I'll their processors type more larger control to that. working of midsized add the own typically a larger want they through and I is they of want that. become that ability their ecosystem wants access we one more and and mean, what customer of control ISO the is a processor. to of full-service want run own to more access to They to have banks and

customize And so with provide them able to and we're and to that redundancies. that

happens we bring what and volume that's hopefully, as and they'll so And business. is conversion see. we part And then what eventually, typically then to a get of all us the transactions

-- So and just typical takes have of It margin type customer of of a to coming very Association really conversion. nice a we the business, And and out and kind That's well. were the pipeline typical that of Transactions performing nice really time also Electronic it's convert. that. at type some been is that's

really driver so growth nice us. been a for And it's

Our with Bob Blair. Napoli next William question line comes of from the

Bob. Adib Great. on Choudhury for This is

in more of You touched kind of on April could provide business earlier the questions, so comments directionally, and month just broadly some the some but in a of trends far? May you bit on

in April the Yes. -- started particularly was strong. consumer space,

of some late maybe April, fell surprising into filers. which not think I overly dollars is refund with the over tax

benefit will to been has the quarter that for side. large which so And the in lender Like implemented fully QX, and good. consumer personal said, full us a we I helps that have

in positive consumer then in the So Business we've seen trends and side Payments.

of some into talked larger the that and quarter we the wins strength provided of exiting implementations completed about that have early QX. We

business into there's ramp strong So continue a pipeline we're quarter throughout quarter. seeing then payments and the next positive to And and trends well. very implementation will as with that sales that

media, the we second know, lapping. X as on of well, numbers. some quarter we talked we're you of out mentioned Cow can Blue past, overall for about an will as quarter on obviously political be reminder side, have is quarter less from the is the the high all seasonally first Consumer obviously, obviously, us quarter volume in second a perspective. we've -- and seasonal before a do first be specifically Payment And our quarter things, Just And than

mention to those couple want Just a of things.

some a Appreciate that. picture, the -- on you I term? as as terms Yes. these of talk BXB REPAY in longer a learnings And you've follow-up, confidence bigger your made back plus bunch to integrated to just kind has going deliver of about just quick of acquisitions guess, ability BXB broadly growth deals payment and in of side. Could kind more your of XX%

Absolutely.

you excited seeing is growth business, political that we we We're The every it can and the is if is we're we're how at. the what pipelines. a wins of in that, Obviously, part spend still our look about seeing in that media and growing of our consumer obviously we're see of year, evidence still at it's is less that and So our still you fast. We're a part thought there, even looking seeing true, absolutely large think normalized business. it it.

hospitality opportunities The of We're lots as vertical municipalities really but seeing the talk there. as to me like the catch overall well well it driving total business. as hard it's still heard So mix, we're we in you down, the and that hospitals. about as volume on the verticals call, from

want move continue one the different truly funds a to that financial expand with technology on think to ability and solution them by TotalPay people in large money well understanding as is that we paid the It's continue truly the still our transformation flows technology give there. as ability those We'll the We'll and to happening. the state-of-the-art solutions that. and pay have the to formula And on underserved entire digital a market we of we ways addressable we think understanding have marketplace. winning get do expand our with to is well execute that. to best-in-class on

line next Our with question of the from Chiodo Suisse. comes Credit Timothy

or to on but guys was of a the brief years your hoping featured I update growth your And partnership could helped circle have made Slide cross-border back few a clients broader I in gross want winning I plan on volumes on and it's part a it's or follow-up announcement in Veem to you with just you profit of update quick that a XX. know partnership? it's business, business I then BXB guidance. the how give your smaller whether a back, winning and the

sure. Yes,

is with [indiscernible] obviously, company, job. a really we So a have a Veem and do relationship nice them, strong they good

allow why Specifically for competitive of domestic They're us, our marketplace. that's amount haven't is international, of cross-border of seen of growth significant extremely be in in -- piece than we product suite tremendous we do does to clients. large activity a it specific with lot it and a us our the cross-border side not have a that. enterprise more But is it the

Canada. opportunities is we obviously And it's expand, see not not. from As enterprise are -- we'll into a meaningful to to more significantly clients of cross-border opportunities, continue seeing some meaning large -- some overall, -- of our still more but specifically that. and those We cross

Absolutely.

is Okay. And this for a then one is as follow-up. Tim,

scenario. again, media year. is anything imply mild correct or And fair is we So for single growth in and in because the you're exit then QX. that you that just that's in the rate high there? the recap? on in low guide it Is an be conservatively the of on absolute more absolute adjusted the reported if an comp digits the macro assume recessionary digits. for would spend would that the on And added underlying this to impacts media impact, now right in it fair that me more embedding not a moderate the Is may numbers, single Or maybe tougher the

Yes.

look on think if that excludes Slide that X there's there's excludes which about single digits. digits. Blue And Cow, probably political double of top gets is number, the to media normalized Cow chart which page. to top organic us So the there's the Blue you section the ways of at There's XX, then And that's growth. number, gets low mid-single which organic, Then the and high the which impact, digits. to which reported us

So up implies, that we you should if to reported that's originally. still it which the that's guidance is we how slide, and guidance what at similar to look when build

-- the not I the Tim, I QX rate, is more talking Completely, full that, specifically appreciate I about was really year... helpful. and and actually slide just this exit

Okay. Yes.

rate exit for QX digits the we then that would which be political example, contribution. auto incremental we numbers. we the digits. political large will next Then be, out to rolling normalized high add that be single think then we So and add, those below probably year, and captive think client say, for double we'll would the I

gets excited even QX. big rate about that's is with next So incremental that what in a auto year. when And we to know us to exit

comes question line next Vafi from the of with Joseph Our Canaccord.

back just the -- auto vertical. we I circle just to maybe

your have types You've had how the kind penetrated kind of how the of there question sector? it some of solutions into pipeline. the And providing that broader follow-up. thinking And you're of I -- just begs the good on I'll success few be mean, a are auto kind solutions potentially more last there should then the these quarters. are over of in auto we consecutively OEM

Yes.

John. So is we are winning this --

modality are continue. We our and and product omni solutions, our omnichannel experience, will winning technology which our on based experience, our our

delivering there payments. some competitive see largest well. takes of for high-quality can be last different expertise and and part perspective. technology we And They're ways the year and add are we engines, winning that by because it. own clearing about That have You financial PayPal, of able continue time, vertical win. an but there settlement any more to if expertise out any see digital just anywhere, the is as overall to well adding to very, pay can as opportunities want is formula. the solution, consumer Obviously, we payments do heard we a consumer opportunities ease consumer more usually we're we our expects you the very But win, use time. to and And we there. way, out various from and that pricing Venmo, The end the a deliver as demanding us experience, wallets talk

just little competitors? PayPal And obviously, that on and Venmo bit doing is receiving are of partnering how here. And you talk that how about Great. integration certain versus integration to market how on -- a again maybe just degree a wallets? you're And you're the in more then those drilling Could with PayPal customers potentially down that. this unique and

Sure.

we continuing that. of will So management speak we're existing great give loan system We enhance opportunities. Payments our area, me that you've Consumer integrations growth heard as in about, organic know think us our to all

only we several pay. the functionalities, the be our that ways As that that multiple wallets, would pay, but of like they expand product it consumer know being like PayPal. will that We know would and digital that, to -- to that we to want way being Venmo, they our doesn't features our want mean consumers pay, how

well. that's new to convert always in think convert into we side the those demand barely existing organic of demand but wanting continue consumer out We there and really so as surface of ability scratching we're enhancing opportunities, also And -- transformation, see those that we're we and functionalities. that digital of it features. solution. on lead features that as as good additional think And to some the more to digital will clients a rolling about, our talked there to -- we've But we going good see

some we're map -- do the want competitively. and and it to get some solutions road there's doing have we demand consumers We're can know but build really we see As we these there yet you that, positive still because we early things imagine, to everybody's in technology of of on there.

option it's If payment just checkout. you a at about feature and payment another think it,

So another as more. we the ultimately way but get to that I you across also drives pay. help is And a engage more. we them think entire that get there, consumer experience mean high-quality experience in ecosystem. That's high-quality paid you paid a what

line Nabhan the with from Our of next Stephens. comes Charles question

a of more SKU some imply So particularly upmarket more would the auto, Mercedes credit wins of from in an recent standpoint.

not in et just high-level macro exposure uncertain could comment any environment. specifics across spectrum. around the if I'm prime, wondering credit comments, within cetera. the mind, that I was I the would given helpful But with So subprime, looking you auto for think, on be overall

Yes. Thanks go question. clearly We're the for upmarket. trying to

deals several now. there have we're years, winning and We for been

pipeline a in have space. the captive We

have our We reps on more team. enterprise

so process prime And you across borrower. a like but of type the lean spectrum, We which of accounts, more our entire lenders more toward focused do would said, there. of success we auto seeing the are lenders, for we have efforts naturally, on enterprise

been. we've has So spectrum. But historically, accounts that the that's across sold focus where entire

have mix super So going -- But more do prime. mix forward, lean prime, toward good will so that it will a the -- we there.

of rather? normalized a Blue out about And as follow-up, a the it. client I you within from should growth you sense standpoint Cow. terms give within know how Got growth organic broke think us impact that we as acquisition But Cow. in profit business, for the from as Blue gross of volume impact volume impact a could well And business for the

Cow Blue So side. is on the consumer

the we when to reported the what that's and between organic. XX% the that that broke difference So out, XX% contributed

So as And mentioned, out. be -- million that's pull about we would revenue million the that consumer in $X.X of side. 'XX will $X we there QX on

as that. -- So would And a about we account, then probably how we we that's you're growth, growth be thinking least in. but large that the factor of don't when it result that specific too to organic at the get want a of points on lost few consumer

can you QX. going see so rate impact would the And exit that how into

Instructions]. [Operator

Morgan from Stanley. with comes of question next the line Our Faucette James

of call press and I release. couple on at had least on follow-up the a in topics this already questions you've that addressed,

on than rolling impact and the we having your think Obviously, BXB churn of the a And client I talked BXB. bit us guessed. additional segment about there? like? large look would might you little on to Can what risk it remind about off you least should at how have a be bigger First, concentration seems customer

-- pretty there. It's we're pretty diversified James. Thanks, Yes.

So bought private firm a unique them equity just a situation where happened there's all brought basically processors. companies consolidated in together risk. to and a be concentration not This really a few these of

lost it that, concentration was and not of we so was other said as significant not losses but And aware a that of like business a we're pretty we result a it but unique, growth payments points there's several like this. earlier, of

credit Got you're you unions, seeing it. in it the so. Got release it. on mentioned with was that press continued unions, And quoted strength credit then up XX% or

may unions like You strength strength verticals between the seeing unions on due should give relationship in mentioned last bit we some think other little unions credit about credit within within and softness quarter an what update be a Can us you is that verticals. and how credit what remind us partially to you're momentum. and

Yes.

lower unions was lending some So competitive auto think of space moving credit I the credit to the to related generally into they able and rates rising were from provide benefiting unions, traditional auto of comment out having that just then financing. rates being

So happening. see I business think winning And because dynamic. that have some away still lenders auto from traditional that we unions strong. been We're that of financing credit generally

I through we've as X banks. last regional seen weeks the think so with or even issues

to have loans because member credit the in well. of of and members the as which help their those the strength would with real because new to deposit unions base for loyalty originations seen members We've I them,

biggest between the So and credit probably unions is auto. I think tie-in

Grondahl from Our next Northland Mike Securities. comes with question of line the

seen private that's any a down call in any increased market lot interesting. And more did out One, you to things. then Two mention M&A come front where more or intensity? secondly, the changes on the valuations competitive or interesting have you

Yes.

So strong the have a sheet. balance M&A side, on obviously, we

very be multiple that building of them strategic. profitable positioning opportunities to continue well ourselves our very position, types find we in in cash the to be for We event

a we We on And the continue the to positioned said year we've marketplace. makes But we'll high a of bar. exact more some we market. valuation very that have a see And where obviously yet, we as We we comes also the multiples side, entries the around. high -- And well also in us. back seeing find well. opportunities bar think for some. we as few obviously the this we're there's to it are for we multiples the the public the adjust we'll think in do have strategic That the be before, side side, seen On private will into M&A understand opportunities right market. think come down very

it's I competitive from mean, think names see mentioned some standpoint, similar not changed side, consumer we've the I before. on much. really we a

new really, there AP BXB new see the and the may in we'd building if may new way win subverticals, entering supplier enter software is we already where then BXB competition within we the by subverticals subverticals network and within competition But there's those As and just players gaining that's within the relationships see because verticals. we're we And side, subverticals. new is there AP those particularly in AP.

call gentlemen, this back turn the Ladies Morris I'd any concludes question-and-answer and John for closing to to session. like the remarks.

you. Thank

pleased very to with We focused in we opportunities, and growth We see we'll of as organic results. invest amounts on executing remain first are those. our quarter our continue incredible strategy

on our very Thank operational next to weeks continue implementation will pipelines you with you the our in we efficiencies coming We continue our here. as much. Look to expand converting we'll and speaking pipelines sales execute as forward well.

concludes This today's conference.

this your Thank lines at participation. time. your You you may for disconnect