Good day, ladies and gentlemen and welcome to the USA Technologies’ Fourth Quarter Fiscal 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call may be recorded. I would now like to turn the conference over to Lauren Stevens, Investor Relations for USAT. You may begin.

Thank you and good afternoon everyone and welcome to USA Technologies’ fourth quarter and fiscal year 2015 earnings conference call. With me on the call this afternoon, Steve Herbert, Chairman and Chief Executive Officer; David DeMedio, Chief Services Officer; and Duncan Smith, Chief Financial Officer of USA Technologies. Before we begin today’s call, I would like to remind you that all statements included in this call, other than the statements of historical facts, are forward-looking statements. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including, but not limited to, business, financial, market and economic conditions. A detailed discussion of the risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in our filings with the SEC and in the press release issued this afternoon. Listeners are cautioned not to place undue reliance on any such forward-looking statements, which reflects management’s view only as of the date they are made. USA Technologies undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. This call will also include a discussion of certain non-GAAP financial measures that we believe are useful for understanding USA Technologies’ operations. These non-GAAP financial measures are supplemental to and not a substitute for GAAP financial measures, such as net income or loss or net cash used in operating activities. Details of these items and a reconciliation of these non-GAAP financial measures to GAAP financial measures can be found in our press release issued this afternoon and which has been posted on the Investor Relations page of our website, www.usatech.com. I would now like to turn the call over to Steve. Please go ahead.

Thank you, Lauren and good afternoon everyone. Thank you for joining us to discuss our fourth quarter and year-end results. As a company, USA Technologies finished the fiscal year with momentum and energy, adding 34,000 gross new connections and 31,000 net new connections in the fourth quarter and achieving the highest revenue level in its history. We remain firmly on track toward accomplishing our long-term goals of reaching $100 million in revenue and 0.5 million connections by the end of fiscal year 2017. In fact, based upon our recent performance, in addition to the trajectory of the market, we believe the company could reach this goal before the end of fiscal year 2017. As customary, I will provide a quick overview of the quarter, then give a strategic and operational update. Revenue for the quarter was $17.6 million, growing 57% from a year ago and a 15% increase from last quarter. Similar to last quarter, we saw large increase in equipment sales, driven by the shift to QuickStart, our third-party leasing program we introduced in fiscal 2015. QuickStart allows USA Technologies to record an upfront cash sale of equipment rather than rental income. Additionally, it has a positive impact on cash flow from operations. Our license and transaction revenue for the quarter grew 26% from a year ago. Revenue for the year was $58 million, comprised of $43.6 million in license and transaction revenue; and the balance, $14.4 million, in equipment revenue. Total revenue increased 37% from fiscal 2014. With the addition of 31,000 net new connections in Q4, total connections to the ePort Connect service now stand at 333,000. This represents growth of 25% from the 266,000 connections we reported on June 30, 2014. We added 675 new customers for a total of 9,600 customers on our ePort Connect…

Thanks Steve. I just wanted to say how excited I am to be here and to help enhance value for USAT shareholders. The time is right for USAT’s cashless payment systems and I believe the company holds tremendous potential. Having spent the past decade as a CFO of a high-performing inquisitive public company, I believe I can help USA Technologies grow profitably and drive long-term shareholder returns. Thanks Steve.

Thank you, Duncan. Now Dave will provide a review of the financial results. Dave?

Thank you, Steve. I am going to start by reviewing our fourth quarter results before briefly reviewing the full year and outlook for fiscal year 2016. The gross connections during the fourth quarter were a record 34,000 compared to 25,000 in Q4 of last year. Net connections for the quarter totaled 31,000 compared to 22,000 in last year’s fourth quarter. We added 675 new customers, ending the quarter with a total of 9,600 customers. This is a 32% increase in the customer count from June 2014, which we continue to believe is indicative of a broadening adoption of acceptance of cashless payments in the industries we serve. For the fourth quarter, total revenue was $17.6 million, an increase of 57% compared to $11.2 million in the fourth quarter of fiscal year ‘14, driven by the increase in equipment sales under our QuickStart program, which was introduced during the 2015 fiscal year. License and transaction fees were $11.9 million compared to $9.5 million in the year ago quarter, a 26% increase. These fees, which are comprised of recurring monthly service fees plus recurring transaction processing fees accounted for approximately 68% of total revenue. Growth was driven by the year-over-year increase in total connections to our ePort Connect service. Equipment sales were $5.7 million compared to $1.7 million in last year’s fourth quarter, a 227% increase. Again, this increase is related to our QuickStart program, which is having a positive impact on equipment sales and cash flows we expected. The uptick in QuickStart continue to grow during the fourth quarter as the program accounted for approximately 53% of our gross connections or 18,000 connections and JumpStart continued to decline as a percent of gross connections to approximately 5% of gross connections during the fourth quarter as compared to approximately 15% of gross…

Thank you very much, Dave and thank you everyone for joining us this afternoon. In closing, the team at USAT was committed to building upon the achievements of 2015, leveraging our leadership position and capitalizing on key market trends to drive growth in connections, revenue, profitability and shareholder value as we move forward in fiscal year 2016. With that, we would like to open up the call for questions. Operator?

Thank you. [Operator Instructions] Our first question comes from the line of George Sutton of Craig-Hallum. Your line is now open.

Hey, guys. Good afternoon. This is Jason on for George. Steve, wondering if you can just talk a little bit more about the premium support service that you are offering to customers really kind of what you are doing differently or how you are approaching these customers differently? And then, if you can give any more details on how that’s impacted the pipeline thus far and then maybe some timing on when you roll that out?

Sure. Thanks. Thanks for the question. The support program that we rolled out is really a – it’s a comprehensive approach with our customer that is a cross-functional approach. We engage with them at the marketing level, at the operations level, and even at the sales level in some cases. And essentially, we take what is the most powerful database in the industry that allows our customers, allows us to point our customers to the best locations in which to mobilize cashless. We also work with them from a logistics perspective. And then finally from a marketing perspective, we work with them and some of their larger customers to really get a running start on bringing cashless and/or mobile payment to an account. So, it really is – it’s a comprehensive cross-functional approach getting engaged with the customer in a significant way. This is not something you can do with every up and down the street customer. We value all of our customers, but this service is one that really is reserved for customers who make a very significant commitment, if not a total commitment to connect their machines to – or their locations to our service.

Okay, got it. That’s helpful. Thank you.

I am sorry, the second part – forgive me, Jason, the second part of your question was what has it done to the pipeline? Well, I think we have said before, where our business has not historically been a pipeline-type business, but it did have a very significant impact on our Q4 results. It helped drive that record quarter and has carried over into what we believe is some very encouraging activity as we start ‘16.

Okay, thank you. And then maybe you can talk a little bit more about mobile payments in Apple Pay and Android Pay, and we have talked about that as having – being a conversation starter with companies and any updates you have there. Is that still a conversation starter and leads to customer adoption or is that driving purchasing decisions or – just any updates on how those conversations have changed?

That’s a great question, and I am glad you asked it. It’s gone from a quarter or so ago – it’s gone from being a conversation starter, if you will, to really a driver. Our customers – you have to remember, they have been investing along with us in NFC, so they are somewhat up the curve on this capability. But when they see the likes of Apple and Google and now Samsung Pay coming down the pipe, they – at this point, they feel like it’s a capability that they need to have. So, it’s gone from a conversation starter to really a driver of the business.

Okay. And then last for me, just any updates on the third-party lessors, where it stands on adding additional financing companies? And then what characteristics or I guess qualifications you are looking for in potential additional partners?

I will defer to Dave on that.

Jason, good question. We do have two financing or leasing partners on board today. We think those two partners today will be able to handle the volume and growth that we expect at least through fiscal year 2016. But as you know, this is a large market with many millions of machines, 6 plus million machines, so it’s a lot of capital that’s needed. And Duncan comes from the banking industry, and I think between he and I, we will be able to bring more partners on board as we go forward into the 2016 year.

I think we have four or five banking calls, finance company type calls lined up for the next couple of weeks. So, I think we should be able to come up with quite a few and maybe we end up with five, six sources as we go forward.

Okay, great. Thank you, guys.

Thank you. And our next question comes from the line of Gary Prestopino of Barrington Research. Your line is now open.

Yes, good afternoon. Couple of things here. Number one, in terms of NFC-enabled on your net connections, it was 31,000 net connections this quarter, the majority of them NFC-enabled and what percentage of your connections are now NFC-enabled?

Gary, I can thank you for your question. Of the 31,000 net connections that went out, 80% of those are ePort connections and 20% came from other types of connections, whether it be kiosk or laundry, but of the 80% ePorts that went out, 100% of those were NFC-enabled. We are not shipping today anything that’s not NFC-enabled that’s an ePort device.

Okay. So that’s – so you are not shipping anything that’s not NFC-enabled on an ePort device?

And Gary, its Steve, regarding your question on the percentage of the base of 333,000, we are closing in on approximately 300,000 of those 333,000 being NFC-enabled.

Okay. And then could you…

It’s a very large portion of the base.

Great. Could you maybe elaborate a little bit on the gross margin on equipment sales was down pretty dramatically, you talked about some volume discounts for a big volume uptake, but I mean in the quarter, you beat the sales number that the street was looking for, obviously I think the EBITDA number came in light and I guess a lot of that variance is going to be on that margin, so could you explain what went on there and if we can anticipate that occurring going into fiscal ‘16?

Gary, it’s a good question. If you remember on a few – on our previous call, when we talked about equipment margins, we would expect given if we had a pretty broadly dispersed sale base from our preferred customers to our largest customers to up and down the street customer, we would expect that equipment margins to be more in the 20% range. But in Q4, close to 90% of our ePort sales came from some of our largest customers who do have the best pricing. So it’s good news, bad news. Unfortunately, it depressed the equipment margin for the quarter. The good news is those large customers are back ordering in larger quantities.

Okay. So then – so I guess going into fiscal ‘16 if you are ramping up with your best customer, we are going to expect to see that equipment margin come down, year-over-year maybe not to the extent that it’s a 13%, so it’s somewhere at the 20% level and that will continue as you ramp up connections but I guess the question I would have is that once you get to that steady state of where you said you are going to be about 500,000 connections or $100 million of revenue. At that point, where do you think – are you still feeling comfortable with the 20% adjusted EBITDA margin, given what’s going on with the equipment sales or has that – is that not something that we think is achievable?

Well, your first – I will address your first question with respect to the margin in 2016. I am not – I don’t believe that we are going to have the high percentage of connections coming from those larger customers through 2016 like we experienced in Q4, so I do think equipment margins can be more in that 20% range for 2016 as we have more widely dispersed customer sales. Given that and expecting that to continue when we hit that 0.5 million connections threshold, yes I do think adjusted EBITDA margins should start to approach – can approach that 20% range.

Okay. So you still feel good about that by 2017?

Yes. And Gary, it’s Steve, just to add to that the fact that we continue to see growth in our SMB sales effort, small medium business sales effort, all high margin low cost acquisition business. I think that mix will help us. So I just wanted to reinforce what I said there.

Yes. No, I mean it’s a good news story and that you are adding connections, but it is degrading your margin on a more short-term basis, I understand that, I am just trying to get an idea of going forward as you hit that threshold, maybe as you stop growing it, your connections in the 30%, 40% range, what your margins could eventually look like. Thank you very much.

Thank you. Our next question comes from the line of Mike Latimore from Northland Capital Markets. Your line is now open.

Great. Thanks a lot. Congratulations on the year.

Thanks. Thank you, Mike.

I guess, as long as we are talking about gross margin, any view as to what service gross margin might look like this year I mean like in the transaction…

Mike, thank you. I think obviously, fiscal year ‘15 is going to be a low mark for that margin, because of things like the grace periods that we endured this year, because of the impact of the sale-leaseback, which will start to become less of an impact as we move forward. So I do expect those margins on license and transaction fees to slightly increase again through 2016. As we again also two, we have – we work with our new Chase processing – Chase Paymentech processing agreement, which will also have a positive impact to those margins as well.

Alright. And just in terms of – I know part of your strategy is – that was to get connections and then to add services on to those connections any qualitative or quantitative information about enhanced service reduction?

Well, Mike I think one good example is the premium service that we rolled out, the premium support service that we rolled out in the quarter. That’s something that was very well received and should have not only a positive impact on adoption, but it should also, as we go forward continue to operationalize that service should have an impact on service revenues as well.

Yes. Okay, got it. And then...

Going back, if I could just everyone going – going back to your equipment margins as well, one of the things we didn’t talk about is cost of goods sold. Obviously, our cost of goods sold is not going up, it’s going down as the business continues to scale, so we will get some leverage there.

Okay. And then I guess a year or so ago, you were giving a little bit more grace period than average, can you just give an update on kind of are we back to more of a normalized environment to offer kind of these grace period conditions?

Actually, there are no extended grace periods at this point. We give our customers a certain amount of time to go live on the service and that as far as I know we haven’t granted a single extension to anyone.

Well, and further to that point, with QuickStart and using those third-party lease companies, those leasing fees and QuickStart fees start 30 days, 60 days after shipment. So they kick in right away and it gives our customers an additive incentive to get the units installed in our service fees beginning quicker as well.

And then I wasn’t sure was it 76% or 56% of connections that were QuickStart?

It was 56% of gross connections and the number I think Steve gave out is 76% included units sold as well to our customers whether the QuickStart or a direct purchase.

Great. Thanks a lot.

Thank you, Mike.

Thank you. Our next question comes from the line of Joshua Elving of Feltl. Your line is now open.

Hi, good afternoon, can you hear me, okay. I am sorry can you hear me, okay.

Josh, we can hear you fine.

Okay, I am sorry. It’s a little bit loud here. So most of my questions are answered, I guess the quick question I had was, you talked about adding a lot of your broad customers, 675 customers in the quarter. And I think one of the interesting statistics that you provided in the past is that your existing customer base operates something in the neighborhood of 2 million vending machines domestically here, can you give us some kind of a sense how big the customers are that you are adding, are there still large customers out there or I guess customers that operate significant networks of machines?

Well, it really runs the gamut. I would say that a good portion of 675 that we added – and Dave correct me if I am wrong. A good portion of the 675 that we added are on the smaller end of the equation. So yes, there are smaller customers buying smaller quantities getting started. That’s the bad news. The good news is that they are high margin, low cost of acquisition. They are sold over the telephone and they are sold at high margins. So that’s good. But we still have significant runway with our 9,600 customers on the service in terms of continuing to penetrate those customers. But the large customers are not gone, it’s – we are not out of them by any means and they are not limited to vendors. We are probably, at this point, in somewhere around 10 to 12 different self-serve retail verticals, just to name a few, vending, commercial laundry, kiosk and the list goes on, parking. So, there is a lot of things we are doing now.

Okay. And then real quick, just to make sure I am completely clear on this, the 76% of connections that were QuickStart. Is that right to say 53% were actually QuickStart, 20% would fall into that outright purchase?

That’s about right, yes.

Okay. And then I guess finally on the equipment margin kind of the color you provided on getting to closer to 20% next year, is there any benefit coming from the ability to – because I want to say you guys mentioned in the past the potential to outsource the telemeter components of your offering. Is there any cost save associated with that? Do you have any specific plans in the near term?

Well, it’s not something that we are planning to do in the near-term. We do, however, have increasing leverage with both component manufacturers like wireless modules. We have increasing leverage with component manufacturers as well as the contract manufacturers who produce our devices. So, we expect to get continued leverage in that regard. And we have done some things to improve – and Dave, I think you talked about this in a previous call we have done some work on the processing side to drive down our cost of doing business there, which really isn’t reflected in the numbers thus far. Right, Dave?

Right.

So, I think the discussion about margin – one of the things that we all have to factor into this is that we have leverage on both the hardware side and the service side as we go forward just from a cost of goods standpoint and we have what I think is a very nicely developing balance in terms of the types of customers that we are bringing on with the fourth quarter being a little bit of an anomaly. It’s a good news/bad news thing. We have a large customer. They had a special initiative and there were some things they needed to get done and that coincided with our support program. So, it worked out well for everybody, but it didn’t work out well for margins, but I wouldn’t expect that to continue.

Okay, thank you very much.

Sure.

Thank you. And our next question comes from the line of Bill Sutherland of Emerging Growth Equities. Your line is now open.

Thanks very much. Just real quick, guys. To clarify on the SG&A expense line in the quarter, the two things you called out, Dave, to what degree are they one-time in nature?

I think most of those from a legal and the executive recruiting are one-time in nature. There are probably just to give you dollar, approximately $300,000 to $400,000 in the $4.6 million of SG&A are, want to call them extraordinary, but they are one-time in nature. They are not a part of our current run-rate for SG&A.

Okay, that’s good. And the waiting of new connections, I know you are back, your last half, second half weighted in your connection growth. It was heavier this year, I guess, because of the big dog that came in this quarter. Does it feel like on a normal basis it’s like 60% back half, 40% first half because this year was actually 68%?

Yes, it was – well, it was from a net perspective. We also had a fair number of deactivations.

Right. That was my next question.

In the first half, so I will let Dave handle that one, but the fact of the matter is that we are probably – just because of the seasonality curve of our customers alone, we are always going to be a little bit back-loaded. One of the things that I think we need to think about is we are in a market that continues to hit what I would call inflection points. We are in the middle of another one right now. And all it takes is one inflection point in the first half of the year to change that dynamic. So, I guess what I am really saying there is we reserve the right to talk out of both sides of our mouth.

Well, Steve, what do you mean by that? In that context, what are you talking about in terms of inflection point?

Well, there are things that have occurred, things such as Apple Pay and other things that have moved the market and moved in, in a fairly significant way. So, that’s just one example, but those things happen and we can see – we are talking to these customers everyday and their buying behaviors are changing. And we just – we see those things happen.

And that can overwhelm the normal seasonality, I get it.

Exactly, okay.

And what you are seeing in terms of deactivations is that kind of a normal rate to kind of think about going forward now that you have got CCR out of the way and so forth?

Well, Dave will probably have more detail on the full year. I think we still had a little activity in the front half of the year.

Yes, I am sorry, Steve, I meant the quarter.

Okay.

Yes.

Dave, can I ask you to address the quarter?

Yes, thank you. So, we had 3,000 deactivations, bringing the 34 gross to 31 net. I do expect that, that will be more in line with the normal deactivation going forward. Part of my role, one of the functions that I am going to serve among many, is to obviously get out in front of any customer that is looking to possibly deactivate. Deactivation doesn’t always mean that we lose a customer. The vending business is very transient. The vending machines move 10 times in its life and it could just be simply a deactivation for a short period of time, where a customer loses accounts, asks us to deactivate, and then it comes back online later. So, by getting out of this customer – getting out in front of any customer, large scale customer deactivation something that I am going to have an eye on. So, I do expect deactivations to come down in this fiscal year.

That’s good color. Thanks, Dave.

That is a wonderful answer, 1%.

Yes, it’s a 1% churn number.

Less than 1% on a quarterly basis, which is not out of the ordinary and just building a little bit on what Dave said, the fact is that there is – in all of self-serve retail, there is a substantial amount of movement. People activate and deactivate things for seasonal reasons, for all sorts of reasons. So, it’s – but I think to think about a 1% number at this point, it’s probably within the realm of a good judgment.

Thank you. And our next question comes from the line of Kevin Dede of Rodman. Your line is now open.

Dave, could you add a little more color to the backdrop of your 400,000 forecast for 2016? What are some of the factors you have included? What – I guess any sort of transparency you give us a little more foundation for the work that you have done there?

The 400,000 you are referring to is connections?

Yes, the net connection growth that you are expecting this year.

Sure. Well, our gross connection number for the full fiscal year was 86,000 and 67,000 net if obviously we just talked about deactivations coming down. So, given what we are seeing in the marketplace, as Steve talked about, with some of the inflection points, the new service that we initiated that allows customers to take larger quantities of units, we feel comfortable that we are going to be able to do at least duplicate what we did this year, if not more, which was those 86,000 gross. So, Steve said earlier on another question, it’s not really a pipeline-driven market yet, very much ad-hoc purchasing from our customers, but the pulse on their purchasing needs, their desire is to continue to move forward with cash as we feel very comfortable with those numbers.

So, I am wondering how much insight you have to some of your larger customers’ budgeting, given that a lot of the fourth quarter was driven by some of smaller ones. I am just wondering how much you see in the larger ones versus how much you might see in the smaller ones?

Kevin, we – obviously, we have – because of nature of our business, we have an ongoing relationship with our customers and we are in frequent contact with them. So, we do, a) we have some visibility into what we think they will do and what they think they will do. We also have insight into – and this is really more of the operative point, we have considerable insight into what we intend to encourage them to do. And we also have knowledge of the impact it can have on their business. So, we do – we have a good feel for where these connections are going to come from. Our plans in this regard are built bottom-up. And so we – there is a certain amount of insight that you have to have in that regard. So, to say that, if I were to say that another way, if your question is, do you really – do you know where these – do you all know where these connections are going to come from? Yes, we pretty much do.

Okay, fair enough. So, you talk to the 675 customers that you have added and you said that most of them were smaller. Can you talk to the overall industry, given Cantaloupe’s activity and I guess more no variety there? Can you talk to the competitive environment? How you see your customer account growing that might help substantiate your 400,000 thinking?

Kevin, I am not sure I follow your question. If there is a competitive component, would you mind repeating it? Just forgive me.

Yes, no problem, Steve. There are sort of lot of facets to it. I am just wondering how you perceive the competitive environment at this point say versus a year ago and how you see your customer win activity versus some of your competitors given that you are offering a full end-to-end solution, where your competitors don’t have the same level of service? That’s one part of it. The other part of it is just the size of the competitors that you might be adding and whether or not that helps support your net connection add for the year?

Sure. And the effect on that, so well, from a competitive perspective, the landscape – I would say the landscape over the last year hasn’t changed that dramatically. There are really three companies – there are three companies out there that are making a significant impact on the business. There are number of companies and there are fine companies and I don’t mean to exclude them in a negative way, but really three companies that are affecting the landscape in a meaningful way. There is our company. Crane is doing some work. However, Crane does business with us as well. And there is Cantaloupe and they continue to progress as a company as well. I think what we are seeing is I think we are seeing growth in the business as the market continues to open up. It’s creating more opportunity for all of us. With all due respect to our two largest competitors, I do think we are getting the lion’s share of the growth right now. So if there is a growth pie and its cut out three ways, we are getting the largest slice of that pie because of a number of things including what you just said.

Right, okay. Can you speak to the Chase migration, is that business complete or is that transfer complete now?

I will let Dave take that.

Yes, Kevin. Yes, the movement of transaction volume over to Chase was completed during the first quarter, so mid-quarter. So I think Q2 will be the first quarter of a full quarter of the impact. We will see some of the impact in Q1, but since it occurred around mid-quarter and not the full impact.

And Kevin my apologies for the interruption, but we would like to have the opportunity for others to ask some questions, so we can we follow-up with you after the call?

Sure. Thank you.

Great. Thank you very much.

Thank you. And our next question comes from the line of Scott Billeadeau of Walrus Partners. Your line is now open.

Hi, guys. I just have a couple of questions, just can you give me sense for what penetration rate of your client base is – has an ePort now, I think I remember hearing 20% at one point, but obviously that’s growing, do you have a sense is that something you track closely?

Yes. Well, we certainly watch that with – this is Steve Herbert. We watch that with our customers and it really runs the gamut, we have increasing numbers of customers and fairly large customers with many thousands of locations that are either at 100% penetration or they are moving there. And then we have some customers who have been slow to adopt who might be at say, 5% or 10% penetration. So it really – it’s a wide range of penetration, but the goal was to get everyone to 100%. And one of the things that helps us is something that we talked about in the call today and that’s something like Android Pay and Apple Pay. One of the discussions that we have with our customers is if they are still largely a cash business, what we say to them is you are taking all cash in most of your locations and consumers clearly want to pay with credit and debit. And they will spend 30% more if you allow them to do so. And by the way, with Apple Pay and Android Pay, with mobile payment, we are seeing approximately 45% increase in ticket. But the thing that I think really shakes them up is when they realize they could be falling two payment methods behind. So it’s really – when I talk about that as an inflection point, it’s really it’s shaking some of our customers by the lapels to think about the fact that consumers could be walking by their locations with two payment methods a card and a phone that they can’t use in their retail locations, it’s a sobering thought.

Yes. But do you have a sense within your customers all the machines those guys have, what percentage has been and I am just trying to get a sense for how much you just got in the same customer potential yet to come?

Well, if you take the estimate, I think someone used the number a little while ago of 2 million. If you take an estimate of 2 million potential self-serve retail locations and our base of 10,000 customers and we are in 333,000 of those 2 million right now, that would give the number – that would give you an average of somewhere, or Dave the CFO, 17% – 17%. So, you are pretty close, so you are 20%. But that’s – that number, I think is a deceiving number in terms of where our customers are going on an individual basis and the things that are affecting their thinking.

Yes. What I would think as you said people that accelerate to 100%, because certainly, being able to pay, but I would think on the flipside in terms of what can be offered them when I can see a 100% of my machines I can do lots of different things in terms of managing of inventory, scheduling, all that type of stuff. And if I got 80% of my machines dark, I can’t do that. So, I suppose it depends on the sophistication of your customer. And that kind of gets to my second question, which was just what are opportunities for kind of the value-added services to, gee, once I am connected to every machine, there is lots of stuff I can provide a customer in terms of helping them manage routes or so forth?

Well, that’s it. That’s a great question. And one of the things that has been a big difference maker in our business is loyalty. We are able to run loyalty programs for, for instance, people like Google with Android Pay. We are setup – I don’t want to go too far back, but some of the work that we did with a company that they purchased on loyalty will crossover into this relationship and we are able to run loyalty programs for a customer or for a partner like Google. And that’s something that’s created a lot of excitement and enthusiasm in our customer base. I would say it’s the best example right now. And at the other end of the spectrum and very much related is the premium support program, which is not only something that is related to logistics, but really gets into marketing and loyalty and leveraging that network connection.

Thank you. And that is all the time we have for questions. I will now turn the call over to management for closing comments.

Well, thanks to everyone for taking the time to join us for our earnings call today. We appreciate your continued interest and support and hope you have a terrific evening.