PAYA (2022 - Q1)

Good morning, ladies and gentlemen, and welcome to the Paya Holdings Inc., First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Mr. Matt Humphries, Head of Investor Relations at Paya. You may begin. Matt Hum

Good morning and welcome to the Paya first quarter 2022 earnings conference call. Before we begin, let me remind everyone that today's discussion will contain forward-looking statements, based on our current assumptions, expectations and beliefs, including financial guidance, the growth of Paya's business, our objectives and business strategies, as well as other forward-looking statements. Please refer to the disclosure at the end of the company's earnings press release and Form 8-K filed with the SEC yesterday for information about forward-looking statements that will be made or discussed on this call. All statements made today reflect our current expectations only and we undertake no obligation to update any statements to reflect the events that will occur after this call. You can learn more about the specific risk factors that could cause our actual results to differ materially from today's discussion in the Risk Factors section of the company's Form 10-K filed with the SEC in March of 2022 and in subsequent periodic reports that the company files with the SEC. Also during this call, we will be discussing certain non-GAAP measures of our performance. GAAP to non-GAAP financial reconciliations and supplemental financial information are provided in the earnings press release and the 8-K filed with the SEC. This call is also available via webcast. You can find all the information I have just described, including the supplemental First Quarter 2022 Presentation on the Investor Relations section of Paya's website. Now joining us on the call today are Paya's CEO, Jeff Hack; and CFO, Glenn Renzulli. Following their prepared remarks we will open the call to your questions. With that, I’ll now turn the call over to Jeff.

Thank you, Matt, and good morning, everyone. Thanks for joining us today, as we review Paya's first quarter 2022 financial results and the efforts underway to further accelerate our growth. At the conclusion of my remarks, Glenn will cover our detailed financial results and then we’ll take questions. Paya reported strong financial results again this quarter, led by our Integrated Solution segment and our proprietary ACH offerings. These two growth engines, which continue to capitalize on the secular shift in our market towards payment-agnostic software led commerce, represented nearly 80% of total Paya revenue in the quarter. For some prospective, four years ago integrated payments and ACH represented just over two-thirds of total revenue. Our investments in technology product and people underpin focus growth objectives, which are all geared towards capitalizing on the digital transformation middle market companies continue to undertake. Integrated Solutions and ACH performance through a variety of market cycles gives us high confidence in the ability to capture even stronger growth in the periods ahead. In the first quarter payment volume grew 24% to nearly $12 billion, driven by card volume growth of 15% and ACH volume growth of 32%. Total revenue grew over 19% to $66 million with gross profit grown 19% to $34.8 million. Adjusted EBITDA grew 11% to $16.4 million, in line with our expectation as we ramped our planned investments in go-to-market and innovation efforts in the first quarter. We are leveraging these incremental investments to accelerate growth in key areas that will allow us to continue to capture a strong share of a multi-trillion dollar fast growing TAM. I will provide some additional color on these initiatives by stepping through the lifecycle of new revenue. First, we have significantly expanded our marketing efforts. While early days, we are already seeing a strong increase in our pipeline with both more qualified opportunities and importantly, larger opportunities, which dramatically improves program ROI. In addition, the return of in-person use or conferences across all channels is providing an excellent opportunity for highly targeted and substantive dialogue with prospects. Second, we’ve added considerable support to our hunters through additional technical sales and customer success resources as well as sharper sales process discipline. Bringing in these resources earlier in the sales process not only drives improved wind rates but also quicker speed to revenue and greatly improves client satisfaction. In fact, in the first quarter, we witness one of our fastest large partner implementations on record. Thanks to the additional rigor conducted during our sales process. Further, we saw some great wins this quarter across the variety of markets in verticals. In our government vertical, we added Stockton, California and Marietta, Georgia, both very large cities, which is a key focus for Paya. In healthcare, we signed a new partnership with Opus, a leading Behavioral Health ISP, and we signed Remote Landlord, a growing property management ISP. These new wins demonstrate our ability to drive results on the back of organic investments we make. Third, we continue to add resources to capitalize on the massive penetration opportunity with our existing partners. Most exciting here is that we have multiple levers to accelerate progress for both Paya and our partners. Examples include, our expanded vertically focused marketing capabilities, our client success talent, who helped broaden partner offering an end-to-end client experience and of course, our sales talent who train our partner sales forces thus significantly extending our reach. The common thread in these three pillars is Paya's continued ability to attract exceptional and proven talent to drive these growth initiatives. As we've said consistently, winning in these markets is a combination of great talent and great technology, which leads me to an update on our technology innovation agenda. Having laid a strong foundation for our multiyear investments in PayaConnect, we continually invest in innovative solutions and services to extend Paya's value proposition. These efforts are a combination of additional tools and features as well as completely new offerings, which add value to our partners and clients while also strategically expanding into new markets. One great example here is, continue enhancements in our funding engine to support customized payout capabilities for our clients. Expanding our integration library is a continuous part of these efforts, especially for our larger B2B partners across the Acumatica, Sage and QuickBooks ecosystem. Additional enhancements such as enhanced boarding solutions and portal and UI upgrades add tangible value to our partners and enable them to grow and expand their business efficiently with market-leading support as they scale their businesses. Finally, our recent Transcard partnership enables us to deliver a new accounts payable solution to clients thus accelerating digital transformation for middle market businesses. Paya payables commercially launches in Q2 and this AP module will allow clients to automate their AP workflows within a single unified portal, integrated across a variety of accounting software solutions, ERP applications and originating bank accounts. Our initial go-to-market efforts for this solution is focused on our existing client across our larger ERP partners with plans to further scale the offering as we progress through this year and next. This is a prime opportunity to add additional value to the partners and clients we work with every single day, while providing Paya with another vector of revenue growth. Simply said, Paya is already a trusted and deeply integrated technology partner in AR and our partners are excited to extend these deep partnerships to the AP side. We expect that the organic investments we're making will enhance our attractive growth profile for years to come. Layering in further inorganic opportunities will serve to bolster this even further and remains a key component of our capital allocation strategy. As we touched on last quarter, we acquired VelocIT in January and we couldn't be more pleased with the results thus far. While small in size, the technology and team from VelocIT are already adding strong value to Paya, especially in our B2B-focused ERP channel. The additional capabilities and solutions this acquisition provided expands our competitive positioning and will deliver accretive results for Paya as we leverage the market-leading solutions, talent, and the client relationships that VelocIT provides. As you would expect, we are very busy sourcing and conducting due diligence on a variety of deals across the markets we serve and in some natural adjacencies. Our enthusiasm to acquire great businesses that can grow faster as part of Paya has not wavered. In fact, quite the opposite. Our strong balance sheet and great free cash flow generation gives us tremendous flexibility to act where we see opportunity provided of course that they make sense strategically and financially. All in we see attractive opportunities ahead to capitalize on inorganic opportunities and you should expect us to act on these without hesitation. With that, I'll turn it over to Glenn to walk you through the financials in a bit more detail. Glenn?

Thanks Jeff and good morning everyone. Paya's financial results in the first quarter continue to showcase the powerful combination of our integrated payments and ACH solutions as drivers of current and future company growth. Total payment volume in the first quarter was $11.7 billion, an increase of 24% year-over-year led by card volume growth of 15% and ACH volume growth of 32%. Our B2B and non-profit verticals were the larger drivers of volume growth this quarter with broad-based strength in B2B especially. As a quick note, Q1 seasonality typically results in lower sequential card volume versus Q4. First quarter total revenue was $66 million, growing over 19% versus last year. Integrated Solutions revenue was $41.5 million, up 26% led by the strength in our B2B and non-profit verticals. Payment Services revenue was $24.5 million, up 10% year-over-year with ACH revenue growing 15%. We continue to see strong attach rates of our proprietary ACH offerings with our new software partnerships. Gross profit in the first quarter was $34.8 million, up 19% with gross margin of 52.7%, which was flat versus the prior year. Integrated Solutions gross profit of $21.5 million was up 18% with a 51.8% gross margin, down versus the previous year, primarily driven by Paragon. Payment Services gross profit was $13.3 million, up 21% with a 54% gross margin. Gross margin in Payment Services expanded 580 basis points led by a combination of ACH growth and partner mix. ACH gross margin remained strong at nearly 60%. Adjusted operating expenses were $18.4 million, up year-over-year as expected as we ramp our growth investments in Q1, to expand and enhance our go-to-market strategies and product innovation, combined with the incremental expenses related to Paragon. Adjusted EBITDA in the quarter was $16.4 million, up 11% versus the prior year and reflects the ramping of these organic investments in the quarter, along, with Paragon. GAAP net income for the quarter was $2.2 million versus $1 million in the prior year, with earnings per share of $0.02. Adjusted net income for the quarter was $12 million, with adjusted EPS of $0.09 per share. Net cash provided by operating activities was $4 million in the first quarter. Our share count at the end of the first quarter was $132.1 million diluted shares outstanding, inclusive of approximately $5.7 million earn-out shares that have not yet met issuance thresholds. You can reference an illustrative walk-through of our share count in our earnings presentation. Regarding our balance sheet, we had $142 million in cash and $249 million of gross debt with a trailing net leverage ratio below 1.6 times. Turning to our full year guidance, we continue to expect that revenue will fall within a range of $275 million to $283 million, gross profit margin in the range of 51.5% to 52% and adjusted EBITDA in a range of $72 million to $74 million. That concludes my prepared remarks. I'll turn the call back over to Jeff, to close out. Jeff?

Thank you, Glenn. Paya is in a very strong position both commercially and financially, with a fantastic and diverse roster of partners, across high-growth non-cyclical markets and verticals. Adding a strong balance sheet and the ability to deliver on the back of our organic and inorganic investments, you can see why we are excited to continue investing in our growth, while delivering strong returns for our shareholders. The results we've delivered combined with our expectations for the future, serve to further strengthen the excitement we have, in our markets and our business. With that, operator, we're ready to take questions.

Thank you. Our first question comes from John Davis with Raymond James. Your line is open.

Hey. Good morning guys. Just want to talk a little bit, Jeff on your comments around M&A. It sounds like, there's a little bit of a tone change here. Just curious, what's driving that? Are you seeing valuations come in? Just any comments there would be helpful.

Yeah. Good morning, John. And thanks for the question. So, no tone change implied. We have been enthusiastic. We continue to be enthusiastic, about getting the right deals done at the right time. We like our pipeline. I think implied in your question is, is there a meaningful movement in valuation. Certainly, some indications there, but I don't want to say, it's a wholesale sea change. But regardless, we feel like, we will get good M&A done in the near-term.

Okay. That's helpful. And then, I just want to touch a little bit on transaction growth. ACH volume is consistently outpacing transaction growth there. So what percentage of the business is ACH now? And just any color there would be helpful.

Hey John, this is Glenn. We actually provided a supplement slide in our immaterial that we released. It's on slide 10. ACH now is about 15% of our revenue.

Okay. And then last one for me. I think although gross margins were down slightly they were I think a little bit better than myself and then most expected this year. So how should we think about the guidance implies that will come down a little bit from here? So just trying to help on the cadence of gross margins throughout the rest of the year?

Yes. This is Glenn, again. Yes we were actually flat on a year-over-year basis in gross margin, which I think we were pleased to see. Look, I think what we probably are going to have gross margin, probably look a little better this year than we initially thought. We still think the range is appropriate for the full year. But yes, that would imply maybe not as strong as the first quarter but maybe a little stronger than we thought going into the year. So – but still at the end of the day that same range for the full year.

Okay. Appreciate it, guys.

Thank you. Our next question comes from Bob Napoli with William Blair. Your line is open.

Thank you. Good morning. Solid results. Jeff, what are you most excited about I guess as far as the ability to maintain and possibly accelerate organic growth? And how do you feel about the macro environment today versus three to six months ago?

Yes. Good morning, Bob, it's Jeff. Thanks. Great questions. So what I'm most excited about on organic growth is our model of supporting middle market clients in our core verticals is really showing its strength. I think we all know the changes that occurred during COVID. But I would tell you the level of engagement of prospects to fully digitize the end-to-end payment process is stronger than ever. So what that means is more at that, more time and attention from both prospects and existing partners to penetrate. So the research isn't out yet, Bob and maybe you'll be the one to do it. But to us it feels like the TAM is growing even more quickly and that means more at bats and more new business. In terms of the macro, I'll let Glenn add some color. But I would say in general the macro environment has been and continues to be very constructive. And I would also remind folks how well we performed during the most challenging times of the last couple of years which bodes even better for what we do for our clients.

Thank you. And very helpful. The AP Paya AP I guess you focused more on AR historically, and talked a bit about the Transcard relationship and more AP. What is kind of the road map or the game plan on AP? And does this – does that potentially double your TAM in this a five-year build-out, or what's – maybe some color on Paya's efforts in the AP space.

Yes. No, Bob, it's Jeff again. Great question. So the first thing and I mentioned this on the call is the most important thing to drive penetration and adoption on the AP side is the fact that we already have deep technical integrations with our partners. And you guys have heard me say this time and again, these are long-term marriages. They are not like a onetime setup. And when you have those deep technical partnerships, the ability to move from the AR side to the AP side is very powerful. So as I mentioned on the call, we are starting with our largest existing partners because that makes sense, given those deep technical partnerships that are in place. In terms of, what it produces over the next few years, I would tell you the opportunity is massive the pace of adoption and penetration is obviously, impossible to gauge, but we are very pleased with prospective client dialogue. We are very pleased with, how the joint offering is coming together and you'll hear us talking about this for a long time. It's going to be a very important piece of this company over time.

Is that an area that -- I just sneak one last one in, I guess that M&A might help accelerate?

So maybe, it's Jeff again. Maybe, but what I would say is, as we've said before, three levers you have organic build you have partnerships and you have acquisition. In this case, we found a great partner and we are very excited to continue to work on this big opportunity together.

Thank you. Appreciate it.

Thank you, Bob.

Thank you. Our next question comes from Peter Heckmann with D.A. Davidson. Your line is open.

Hi, good morning. Thanks for taking my question. Congrats on the relatively large metros, signed in the public sector side. Are those an indication that, the partnership with that large municipal software vendor are really getting going from a sales perspective or were those sales unrelated to that relationship?

Yes. Good morning, Pete it's Jeff again. Thanks for the question. So the answer is, yes. We are very pleased to see continued progress both in terms of the municipals that we signed with technology partners. And as you all know particularly in the smaller end of the municipal segment, we do a lot of direct selling as well. And the patterns and the themes in both categories are the same, which is municipals digital transformation coming out of COVID, is as strong as ever and we like our capabilities. We like our distribution both partner and direct and we expect to see this as a solid growth engine going forward.

That's good to hear. And I know it's a relatively small number, but acquired revenue in the quarter. Was that kind of in the $2 million to $3 million range?

Yes, it was about $3 million. So organic growth was around 11% for the quarter.

Great. And then the organic rate that's embedded in your guidance, is still something in kind of the low team.

Yes, low double digits exactly. Similar, as we went through at quarter end last quarter. That same organic growth rate is implied.

Great. Thank you.

Thank you. Our next question comes from Timothy Chiodo with Credit Suisse. Your line is open.

Thanks a lot for taking the question. I know that Paya doesn't necessarily break out volumes by segment. But could you maybe just talk about the general trends, that you're seeing in volumes across those two? And then if you're able to, maybe specifically for Integrated Solutions maybe just talk about the take rate and how that's evolved over the last year or so?

Yes. Tim, this is Glen. Happy to touch on that. Related to the take rate, we've seen stepping back for a second card, which is mostly integrated solutions. We did see a two basis point increase in card take rate on a year-over-year basis. And we're seeing that similar trend in integrated solutions, on take rate and spread that we're seeing continued modest increase each year there. This is also -- we did not have a pricing action in this quarter. It comes in as you guys are aware I think in the second quarter. So we're pleased to see that card take rate go up in the quarter on a year-over-year basis. And then, yeah, from that you can tell from an implied perspective. Yeah, volume is growing. So we were up on a year-over-year basis in integrated volume larger driver of the card volume growth is there and continue to see the more positive momentum there. Another piece of color I can give you tied to segment is Integrated Solutions organic growth rate was around 15%, which is where we think it settles in, in that mid-double digits area over time.

Okay, great. Very nice. And apologies if I missed it there’s definitely a couple of things this morning. But did you make any comments on what kind of inflation that you're seeing in some of your end markets? And given your largely basis points-based model that you'll see some a benefit from that -- those -- from the inflationary benefit?

Yeah. No, happy to. This is Glenn again. Look I think yeah we saw a pretty decent bump as we exited last year right? When you looked at last year's Q4, we were up I think 17% organically in the quarter. And that's stepping back for a second that's how we approach the year that we'd still get nice tailwind from inflation but we were trying to be thoughtful and constructive and somewhat conservative in our guidance right to not get ahead of that and make sure we're taking into account that growth may not occur at that same level through the year as we exited the year. So the answer is yeah we're still seeing a benefit from it. We still think -- and again it's implied in our guidance we'll continue to get a benefit. But maybe not throughout the year at the same heavy pace that we've seen in the past. So the other piece of color I'd give you on April, April looked to be a solid month from a volume perspective. So really no like change in trend. But at the same time we're not seeing an acceleration. So I think pretty consistent with what others are seeing were still good economic activity. There's still inflationary tailwinds, but maybe not at the same level as we were running the last couple of quarters looking back.

Great. Thank you, Glenn. Appreciate all that context.

Thank you. Our next question comes from Andrew Jeffrey with Truist Securities. Your line is open.

Hi. Good morning everybody. Thanks for taking the question. Jeff, I'd like to hone in a little bit on the investments you're making. And I think you laid them out nicely. I think part of the question is this year is a year where investments are expected to ramp and that's pressuring margin a little bit. So when we look out to next year and I'm not asking you to guide, but is it reasonable to expect that we should see a real benefit from those investments next year in terms of organic revenue growth and then potential scale. Because I think that's one of the things that you are looking for as it thinks about the multiple on your stock?

Yeah. Good morning Andrew, this is Jeff. Thanks for the question. So I would say a couple of things. One, I want to remind folks that when you're making capital allocation and investment decisions, you're always looking across organic and inorganic initiatives. And one of the things that we said last quarter is and this ties back to a question earlier in the call. If some things are simply better to build than to buy then that is a good decision even if it takes a bit longer. So we stand behind that. We think that is a good decision. In terms of answering your question directly, these investments are from our vantage point high conviction investments. We, obviously, were very thoughtful about the decision to accelerate our investments. Early indications are that they are having their intended benefits. But as you all know, you cannot prove out the ROI on those investments in a few months. But we like what we see in terms of leading indicators. And in terms of what it should do to the business next year, it's exactly what you just said. If the ROIs on investment in our business are very, very high, it's a little bit binary. They're either great or they're not good. So, we feel very good about these incremental investments. They are there to help us scale the business. I think you guys know we have great operating leverage in the business and you should expect us, as we get later in the year to share with all of you, how that is impacting our performance. And that of course, will inform next year's investment plans. But suffice to say, very pleased with the decisions we've taken and most importantly, with the execution of the incremental investing.

Okay. Yes, I look forward to getting updates on your progress there. And then, it sounds like one of the bigger opportunities today for Paya will be selling into your ISV partners back books. Can you help us sort of dimensionalize the opportunity there? And how far down the road you might be in terms of monetizing that opportunity?

Yeah. Thank you, Andrew. It's Jeff again. It's a great question. It's obviously hard to specifically quantify, but I will give you guys, kind of the easy math from our vantage point. The penetration rates of partners run the gamut as you would expect newer partners less penetrated than larger partners. But think of it this way, our entire revenue base is effectively a backlog. And so, the way we think about it is that in general, your opportunity is to double the penetration on average. So, if you think about that that gives you a sense of the magnitude of the opportunity to do that. And I will also remind you that we have done some terrific proprietary technology work to make those back book migrations more productive and faster and easier. And in fact, we had a few significant larger partners in the first quarter that had significant back book migrations to Paya. And these are larger and chunkier than we have ever done before. So, I don't want to overstate the speed of that item, because I think you guys know I always try to be very measured on this. But those technology capabilities absolutely help unlock the size and the speed of penetrating these back books.

Okay. That's helpful. Are those B2B wins?

They are.

Okay. Appreciate it.

Thank you, Andrew.

Thank you. Our next question comes from Josh Siegler with Cantor Fitzgerald. Your line is open.

Hello, good morning. Nice to see such strong execution this quarter. I'm curious, are you experiencing higher ticket sizes across end market verticals, or are there specific industries that are experiencing more significant inflationary tailwinds?

Hey, Josh, this is Glenn. Yeah, look, I think you're correct in average ticket has gone up. So, it's definitely been a benefit for us. And you kind of see it in that first page of our presentation as it's trended overtime in the disclosure, we've put on that page. And yes, look I think it's pretty widespread. We tend to see probably more of a lift in the B2B side that's where I think we definitely see it. Maybe it's a little more lagging on the government side and the not-for-profit side. But I think those still see good price that comes through overtime as well. But B2B is the one that probably moves sooner in the cycle and where you see probably the most lift.

Excellent. Thank you very much. And your adjusted EBITDA margin guidance implies improvement throughout the rest of the year, can you walk us through how you expect Paya to improve margin as we compare to 2022?

Yes. Some of it is just the seasonality in Q1, right? Q1 you can even look at last year it's just a low point for us in revenue and adjusted EBITDA. So most of it is driven off that plus just the normalized growth that we see in the business, right? You see the partner penetration side, some of the new wins as we layer those in, some of the pricing initiatives that we do that all kind of comes in overtime over the year. So we feel good about kind of the spread as we've seen in the spread of revenue and EBITDA that we saw last year is a pretty good indicator. And I think we're modeling it and how the street models it is pretty close when you think about how it jumps up each quarter.

Thank you very much.

We have a question from James Faucette with Morgan Stanley. Your line is open.

This is Sandy Gilion on for James. Just to dig in a little more you had called out B2B and not-for-profit as particularly strong just from a vertical’s perspective. Anything particular there that you'd like to highlight just in terms of drivers whether it's for those two or really just across the business?

Yes. Sandy, good morning. it's Jeff. Thanks for the question. A little color from me and then Glenn as well. The strength in B2B, I think you guys know this construction manufacturing, durable goods, distribution, logistics, field services all of which I think are showing their strength and their growth and the quality of the partnerships and the franchise we have so broad-based and very attractive. Not-for-profit is a continued source of strength. I would also remind folks that Paya historically was very strong in faith-based donation management. The acquisition of Paragon added a campaign donation management vector 2A. So those two work side by side. And as a reminder when you're heading into a midterm cycle, the campaign side obviously shows a nice lift as you get through the year.

Got it. Thank you. And then just on M&A, I know we've spoken about this, but anything in particular that you're targeting just within the pipeline? Is that informed from a certain business function or vertical exposure? Would just love a little bit of color there.

Yes. Thank you, Sandy. So I would say no change in our priorities. Quick reminder for folks, anything that allows us to double-click into an existing vertical through a sub-vertical like we did with Paragon is, obviously a direct hit. We also continue in the pipeline to work on some very attractive adjacencies. So think of those as verticals that fit very closely alongside the existing verticals that we're in. And that continues to be an area of focus and one that we are particularly enthusiastic about. And then the other thing, Sandy, which is important is where we like proprietary IP and/or talent. I think everybody knows, there's a lot of conversation around the job market these days. And I highlight the VelocIT acquisition as not only the acquisition of some incredible proprietary technology that we are already leveraging, but it also brought some incredible talent to Paya, which helps us further accelerate our B2B initiatives. So tie those altogether, you can understand why we're enthusiastic. And just anticipating the other part of the question is we continue to work deal opportunities of all sizes. So, smaller deals need to be very strategic and attractive and accretive, of course. And larger deals take longer to get done, but as you guys know, our capital position is incredibly strong and we are excited in terms of pursuing larger opportunities as well.

Perfect. Thank you.

Thank you.

Thank you. Our next question comes from Joseph Vafi with Canaccord. Your line is open.

Hey, guys. Good morning. Nice results. Most of my questions have been answered, but maybe just circle back around to your AP opportunity. It's a great idea. Could you give us a feel for how penetrated perhaps other AP solutions maybe in your partner base now and how you see Paya’s go-to-market there in Greenfield versus perhaps where there's already an incumbent? Thanks.

Yes. Good morning, Joe. It's Jeff. That's a great question. So starting with the first point, which is how penetrated is the partner base. I would characterize AP automation as looking a lot like AR automation, which is far more opportunity to penetrate than has already been put in place. So this is a very large TAM. Obviously, we are not the only people who find that opportunity attractive to go after it, but relatively early innings. The other thing, Joe, which is important to remember is, AP at the enterprise level, which is not where Paya plays is in a very different stage of evolution than the middle market. Middle market is very early in terms of the penetration and opportunity. And finally, as I mentioned earlier in the call is, the key here is digitizing the AP experience is a significant event or decision for a corporation. So your ability both technically and commercially to help them understand how to do it is a big lever in terms of capitalizing on it and basically maximizing speed to revenue. So, lots of opportunity. We will be talking about this opportunity for years before anybody is asking about ultimate maturity.

Great. Thanks. That's all I have got. Again, nice results.

Thanks, Joe.

Thank you. We have a question from Mike Grondahl with Securities. Your line is open.

Hey, thanks guys. Real quick. Any updates to call out on the sales force? And then secondly of the stuff you're doing on the tech investment side what's the number one thing there you're excited about or that we should be watching?

Good morning, Mike, it's Jeff again. Both great questions. So in terms of the sales force, very pleased with the progress we've been making. I will remind folks that the sales – the structure of the sales force is a combination of hunters, who go after new partners farmers who penetrate the base of existing partners and very importantly customer success talent, which helps these middle market partners understand how to implement the digital experience and to do it quickly and successfully. So very pleased on all three, we have invested in those teams enthusiastically. That is a significant component as you know of the incremental investments we've made this year. And I would tell you that, the quality of execution and all of the things that I think you all know, which is more qualified opportunities getting into the pipeline moving things through the pipeline more quickly very pleased with the continued evolution and strength. And frankly, maturity of the sales process, so very pleased on that front. In terms of technology investments and what we are most excited about that's a little harder. It's like asking, which of your children you love the most. We are very excited by the investments, we are making in all of our core verticals. So I think we've talked before whether it's a flexible funding tailored to the use case that is very exciting may, or may not sound exciting to all of you, but some of the refreshed and tailored UI front-end is a huge source of client delight. So it doesn't necessarily sound as sexy to all of you. But trust me, it is a huge factor in terms of partner both existing and new partner satisfaction. And finally, and we've said this to all of you, before we built Paya Connect intentionally to bring us scale but with the ability to tailor the experience to each of the vertical use cases. And so if I had to pick one thing I would say Paya Connect is showing its strength in the ability to in a scalable way tailor that experience to each vertical and that is a core element of the continued investments in the platform. Thanks for the question, Mike.

Thank you.

Thank you. And I'm showing no other questions in the queue. I'd like to turn the call back to Mr. Jeff Hack for closing remarks.

Great. Thank you very much. Suffice to say, we are very pleased with our results and our progress with our growth initiatives. We thank everybody for joining us today and hope you have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone have a great day.