Greetings, and welcome to today's earnings conference call being hosted by Repay. With us today are John Morris, Co-Founder and Chief Executive Officer; and Tim Murphy, Chief Financial Officer. During this call, we will be making forward-looking statements about our beliefs and estimates regarding future events and results. These forward-looking statements are subject to risks and uncertainties, including those set forth in the SEC filings related to today's results and in our most recent Form 10-K filed with the SEC. Actual results might differ materially from any forward-looking statements that we may make today. The forward-looking statements speak only as of today, and we do not assume any obligation or intent to update them, except as required by law. In an effort to provide additional information to investors, today's discussion will also include references to certain non-GAAP financial measures, an explanation of those non-GAAP financial measures, as well as reconciliation of these non-GAAP measures to the nearest GAAP financial measures can be found in our earnings release and earnings supplement, each of which are available on the company's IR site. I would now like to turn the call over to Mr. Morris. Please go ahead, sir.

Thank you, operator, and good afternoon, everyone. Thank you for joining us today to review our fourth quarter and full year results. During the quarter, we reported card payment volume growth of 43%, total revenue growth of 50%, and gross profit growth of 57%, which included 17% organic growth. This caps off a very successful year for the company. For the full year 2021, we reported card payment volume growth of 35%, total revenue growth of 41% and gross profit growth of 44%. Beyond financials, we had many successful business developments in 2021. Early in the year, through a concurrent common stock and convertible notes offering, we were able to secure additional capital for total gross proceeds of approximately $590 million, positioning us well for organic and inorganic opportunities. In 2021, we further expanded our offerings in our key verticals, by putting some of that capital to work through acquisitions. In June, we acquired BillingTree, our largest acquisition to date, further expanding our position in health care, Credit Unions and accounts receivable management. Also in June, we acquired Kontrol Payables, further expanding our capabilities on the AP side in B2B. And in December, we acquired Payix, which enhances our position in the key auto loan vertical and accelerates expansion in the buy-now-pay-later market. We continue to invest in our integration playbook, which should help us with future M&A. The integrations from our 2021 acquisitions are going very well. Some of our investment spend in 2021 went towards organic growth opportunities. These investments focused on talent, technology and product, which paid off with strong organic growth during the year, and positions us well to achieve 20% organic gross profit growth in 2022. As for talent, during the year, we added 265-plus team members, which is an increase of approximately 60% from…

Thank you, John. Now let's move on to our Q4 financial results, before I review our financial guidance for 2022. As John mentioned, in the fourth quarter, Repay delivered strong results across all of our key metrics. Card payment volume was $5.6 billion, an increase of 43% over the prior year fourth quarter. Total revenue was $62.2 million, an increase of 50% over the prior year fourth quarter. This represents a take rate of approximately 110 basis points, mainly reflecting the benefits of increased virtual card adoption, and a strong financial profile of BillingTree. BillingTree, Kontrol and Payix contributed approximately $14 million of incremental revenue during the quarter. Moving on to expenses in the quarter. Other costs and services were $15 million compared to $11.5 million in the fourth quarter of 2020. The incremental other cost and services from BillingTree, Kontrol and Payix were $1.9 million for Q4. Gross profit was $47.2 million, an increase of 57% over the prior year fourth quarter. As John mentioned, on an organic basis, we saw gross profit growth of 17% compared to the fourth quarter of 2020, as shown on Slide 6 of the Q4 supplement posted to our IR site. We remain very encouraged by accelerating organic growth. SG&A was $33.4 million compared to $21.5 million in the fourth quarter of 2020. Fourth quarter adjusted net income was $27 million or $0.28 per share. Lastly, fourth quarter adjusted EBITDA was $27.8 million, an increase of 58% over the prior year fourth quarter. Fourth quarter adjusted EBITDA as a percentage of total revenue was 45%. We do still anticipate increased investment in sales, technology and product to continue putting in place the proper infrastructure for accelerated organic growth into 2022 and beyond. We believe that the combination of double-digit organic top line growth,…

[Operator Instructions]. Our first question is from Ramsey El-Assal with Barclays.

Can you talk about the drivers of organic growth acceleration this year, and kind of what gives you confidence about seeing organic growth kind of accelerate back up to that 20% level of the year, from where we were this quarter?

Sure. Yeah. So we feel very good about organic growth in Q4. A lot of it has to do with continued strength in auto, recovery of personal loan volumes. We're seeing really strong signs in the mortgage space, within our Ventanex business, And so that's really helped a lot with organic growth. We do see continued recovery in the personal loan space in the tax refund season. We're seeing positive signs so far in early 2022 around tax refunds. Auto continues to be strong. We expect mortgage to grow and then B2B will become and has become a much bigger part of the mix, and that's probably the fastest-growing part of our business. So as that grows even stronger throughout 2022, we feel good about the organic gross profit outlook that we mentioned of 20%.

Okay. And in one of the comments that you made in your prepared remarks, kind of piqued my interest, which was about the majority of growth derived from further penetration of the client base, which I think is something that we probably understood. But could you talk about how revenue visibility in your business has kind of evolved, as it's become a little more complex, a little -- a few more moving parts? Do you have a great deal of revenue visibility now, or is it better or worse than it has been in years past?

Yes. I mean we've certainly grown and diversified. We have a lot more clients now. But we still think a majority of our growth comes from existing customers, like you mentioned, and we see a lot of visibility there, just with additional adoption of card payments. We're seeing that now in the B2B AP side as well, as we see virtual card penetration increase with existing customers. And so over time, as we've added software partners, that may have tilted a bit more to new customer acquisition versus existing customer growth. But we still think a majority of it is going to come from existing customers, which provides a high degree of visibility.

Yes Ramsey, this is John well. Good afternoon. We also -- as you understand our businesses well, everything -- all of the new adds we had in closed deals last year, obviously, we get 12 months of that this year. And so that stepped approach is also a contributing factor, as well as things coming out of our implementation pipelines.

Thank you. Our next question is from Bob Napoli with William Blair.

Thank you, and good afternoon. Nice job. So on the -- I guess a question on the growth of your revenue from virtual cards and cross-border payments. Some of the positive take rates, I think you had mentioned is from growth of virtual cards. And can you talk about what the penetration rate is on virtual cards? I know you have a partnership with Veem on cross-border. Do you have much cross-border business today, and do you see -- maybe talk about the growth of revenue from those 2 revenue streams?

Yes. Sure. So in terms of virtual card penetration, we mentioned on the call, an example of our TotalPay solution, helping us to increase penetration. So in the hospital space, for example, with one large hospital customer, we've seen virtual card penetration go from 20%, up to almost 40% by using our TotalPay solution, where we're getting access to all the payments, the TotalPayment file, and we're able to then monetize virtual cards. So that's an example of how we think we can have that continue to grow. We're probably about 15% -- 15% to 20% penetrated today. But in that example alone, you could see how it could go up to 40%.

Yes, let me add some color. Good evening Bob. We're methodically moving, as we combine some technology platforms in our overall target technology platform, on our B2B side. as we're moving some customers over, we're finding lift inside of those larger customers, as we move to that total paid solution, which is the example that we were giving. So that gives us great confidence in some of the things we're seeing. We are methodical about it, so we will just switch automatically. And then also on the cross-border side, that is obviously -- and continue -- we'll continue to promote that. But as -- if you recall, predominantly, our existing book of business did not -- was not requesting cross-border. So that's something that we'll continue to offer on a [indiscernible], and we'll see that picking up traction towards the end of the year, but not immediately out of the gate. We don't -- it's -- some activity there, but it's not significant when it comes to our first -- second quarter numbers.

Then just what is the size of the B2B business? And do you expect it to grow above the 20% organic gross margin growth that you've forecasted? And you talked about unified AP and AR, how much potential was unified AP and AR?

Yes. So we mentioned -- I think you can see in our earnings supplement, we ended the year with an annualized volume amount within [indiscernible] of close to $5 billion, and we expect that to continue to grow. So that business is growing north of 30%. So it's faster than our combined corporate average. We expect to see that moving more toward about 25% of the total mix by the end of 2022. And so just with that alone, gives us confidence in the full year 20% organic growth outlook.

And the unified AP/AR.

Yes, sure. So we talked about -- we invested in that last year with some of our key ERP integrations. We've seen great traction there. We'll continue to roll that out. We're seeing adoption there. We're seeing the marketplace desiring a one-stop shop. And as we continue to roll that out, both on the AR and the AP side, we're finding more, the AR side wants the AP side, and so that brings our TotalPay solution to the AR side. We expect that to be successful for us this year to continue, what we started in 2021.

Thank you. Our next question is from Andrew Jeffrey with Truist Securities.

Appreciate you taking the question here. Tim, you mentioned, I think by volume in the slide, you said B2B was about 23% of the overall business. I'm wondering if you look at kind of run rate, all of the nonvertical market debit acquiring businesses, B2B in cross-border and now you have BNPL, but I'm not sure if you're considering that a vertical. Is it materially different than that, and can you just talk about -- I think you mentioned B2B is growing faster at a higher yield and a higher gross margin. I'm just wondering, how much some of these other nonvertical market businesses can support the growth and the yield for you this year and beyond?

Yes. So Payix is a good example of that. That's where the BNPL -- a lot of the BNPL business is. We had some ourselves, but they do, and we mentioned Scratchpay on the call as an example, a good customer case study that's grown a lot with them. And so we think Payix could be growing 40%-plus into 2023, and so that's a good example of the reason we bought that business and how we think it can support accelerated organic growth, once it comes into the organic mix. And then we continue to like owning the back-end RCS platform. That's been great for us, and we're ramping a few customers early this year on that platform. So some of them maybe the more non-traditional businesses you're mentioning, do support growth, and in fact, in the case of Payix are growing faster than the overall business.

Yes. Let me add to that, Tim, as our mortgage servicing Payment Solutions business through our Ventanex acquisition, we see great -- we always have seen, we've seen great opportunities there, as we move throughout this year. Saw some of that obviously in the fourth quarter, definitely seeing that in the first quarter. And we think that will continue to expand, as I said in our press release, the STX exchange, we are starting to see low value proposition, which we've always known about and adoption there. So lots of opportunity for us to continue to sell many of our solutions in the mortgage servicing space.

And what do you think the impact is sort of consolidated? Sounds like Payix might blend down the gross margin a little bit. I mean, should we be thinking about changes in mix, which were -- really looked like a nice tailwind in the fourth quarter? Should we be thinking about that changing at all materially, as we go forward?

Payix has pretty strong margins. We mentioned those on the call. We think over time, we can probably find ways to expand those margins, maybe not in 2022, but beyond, in terms of reducing processing costs, like we have done with some of the other businesses. So if you look at the guidance, it implies similar -- very similar gross profit margins of 75% to 76%, and then adjusted EBITDA margins of 43% to 44%. So really not a material impact, even as the mix shifts in 2022. And then in the outer years, like we said, we think we can find ways to continue with that margin profile, and even with the accelerated growth.

Our next question is from Andrew Schmidt with Citigroup.

Hey John, Tim. Good to see the acceleration in the organic gross profit growth. Just a question on sort of consumer health. Could you remind us sort of your exposure from a consumer perspective, where a longer consumer spectrum that is? And then just the impact from change in consumer health or the credit cycle, understanding that some parts of the underlying business are exposed to longer duration loans and some are exposed to shorter duration loans. Just curious, if you could remind us just exposure to cyclicality?

Yes. So obviously, we are -- as you know, we just process the payment. So we can't -- we're not the actual lender itself, but obviously, the things and the feedback we get, is consumer health has been in the best as we've seen it in years. From things we're seeing, we're still seeing positive trends as far as repayment of loans and repayment of various different installment instruments in all the different parts of our verticals that we're seeing that. We're seeing that leading into the first quarter here as well. We're seeing the tax refund season. We've seen that in the middle to late part of February here continue strong, with some really strong volume days on the loan repayment side of that. So that's usually a really good sign. People are paying their obligations. And so from the consumer health side that we see, we think that is still robust and strong, at least from people paying their obligations.

And I would add to that, that we -- like John said, the consumer seems very strong when we're looking at loan repayments and we are keeping an eye on credit metrics and delinquencies with our lenders. And for some reason, those did tick up, our solution actually helps the lenders in terms of getting repaid more quickly and efficiently. So that actually could, in some ways, benefit us. And then on the consumer side, we also have exposure to healthcare, and we don't think that there is -- and that's through our BillingTree business, and we don't think there -- it's a full recovery there. So there's some pent-up demand in terms of consumer healthcare volume that we think will benefit us, going into the middle or the end of this year as well.

That makes sense. And It's fair to say that the business is -- just given the B2B component and the more diversified nature of the business, it's fair to say that -- I would say that perhaps less cyclical than years past or I should say the sensitivity is -- it's less sensitive to sort of cycle impact? Is that a fair assessment, just given the mix changes in the business over the last couple of years?

It could be on the consumer side. But remember as well, we have -- in the loan repayment world because of tax refund season, there is seasonality in the first quarter. And as Tim mentioned in the call as well, there was seasonality last first quarter, because of the 2 large stimulus payments, which is -- I'm not sure I call it seasonality, but those onetime unusual events that will make first quarter this year a difficult comp for us.

Yes. I do think you're right, though, over time, as we get more diversified and B2B becomes a bigger part of the mix, there should be less of that.

Got it. Very helpful. And if I could just sneak one more in. Just on the M&A pipe, given you're integrating 2 acquisitions, your leverage is where it is right now. What's the right way to think about your likelihood of doing larger acquisitions over the next, let's call it, 6 to 12 months? Is it going to be -- is the pipeline consisting more of smaller tuck-ins? Are there larger -- are there larger things in the pipeline? Just given where you're at, with deals and leverage currently? Just curious how you think about the pipe?

Yes, sure. So we have a very active pipeline and we have, as you have followed us for the last few years. But we have a very strategic criteria that we look at that, we decide on what's very strategic to us, in order to make an acquisition. Most likely, we would lean towards tuck-ins in the near term, if that will be the case. But we -- as you all are aware, we don't get to choose when something is -- comes to market. But we do see great opportunities out there. But as you mentioned as well, we are absorbing a couple of acquisitions that we've made, those are all going well. Payix being the most recent one at the end of December. And I'll let Tim speak to some of the financial metrics.

Yes. I mean I think you're right, with leverage where it is today, we'd want to find some additional capacity through adding cash flow and delevering a bit. We did increase the capacity on our revolver, as part of the Payix transaction. So we do have some available there. And we just have to -- we would have to decide if we wanted to stretch it all beyond, say, 4x for something very strategic, but wouldn't likely be much beyond that. So it also depends on the target ahead EBITDA, how much EBITDA and how fast the target was growing, could also provide additional capacity for transactions. But like John said, at this point, it would likely be something on the smaller side.

Our next question is from Peter Heckmann with D.A. Davidson.

Just curious on the growth of new auto loan originations, given some of the inventory constraints for new cars and higher pricing for used cars. Did you see that in the quarter, and if so, when would you expect that to manifest -- in terms of impacts on growth rate, if any, would it be 2, 3, 4 quarters out?

Yes. So Pete, we're -- as you know, we're much more exposed to the used car space, not nearly as much new. And so that -- we haven't really seen any impact from chip shortages, for example, or inventory supply issues. We continue to see very strong demand in the used car space, even at somewhat elevated prices, and we're not seeing that change. And because these loans are 6 or 7 years in duration, it would probably take a few quarters for us to feel any sort of change in the macro environment, just because we have such strong repayment volume and long repayment volume with the existing portfolio. So again, just to reiterate, we're much more focused on the used car space or not feeling the supply chain issues and still seeing strong demand.

Okay. That's great. And then just in terms of BillingTree, it looked like the revenue there, if I'm inferring correctly, it was just a little bit light versus our forecast. Does BillingTree have any seasonality around the fourth quarter?

Not truly around the fourth quarter. They actually have some in the first quarter, similar to our loan repayment business, where in the collection or our revenue cycle management space, they may get -- they may have benefits from tax refund season. So we've seen a little bit of a pickup in the first quarter there. But I think the numbers in Q4 came in, right around where we expected.

Our next question is from Joseph Vafi with Canaccord.

Just -- I know it sounds like most of the growth that you've got in your line of sight for '22, is with existing customers. Just wanted to get an idea of how you're looking at organic software partner adds in '22? And then I have a quick follow-up.

Yes. I mean we do -- we are adding more organically each quarter. We've expanded that team, what we call partner relationship management, to not only go and try to further penetrate existing software relationships, but add new ones, to your point, to help with new customer acquisition. And so that number was sort of maybe 2% to 3% a quarter, and I'd say that number is probably more like 3 to 5 a quarter now, as we've expanded that team. And also, we're in different verticals. Now that we're in more verticals, there is more software partners to go and develop.

Sure. And then could you just remind us again, like, if you looked across your existing base, how penetrated you are, you think, and where you could go with your existing partners? Thanks a lot and great results, guys.

Absolutely. It's really tough to estimate that. We don't always have access to the full customer base of the software partner, but I'd say in some situations, we're less than 10% penetrated and on average, maybe somewhere in the teens.

Thank you. Our next question comes from James Faucette with Morgan Stanley.

In terms of just -- a lot of my key questions have been addressed, so I appreciate that. But I wanted to ask, when you look at your growth and growth forecast, can you give us a sense of how that's being split right now or at least in your outlook between brand new customers and expansion with existing customers?

Yes. I'd say it's still a majority expansion with existing customers, so probably around 2/3 from existing and the balance from new. So it's still very strong existing customer growth. We're seeing adoption of our various channels. So customers using not only web and phone payments, but adding IVR and mobile and text, all of those things, we think, facilitate card penetration. And then -- on the virtual card side, as we mentioned earlier, now that we've rolled -- starting to roll out the TotalPay solution, we're seeing increased virtual card adoption within the existing customer base. So that, to us, gives us a lot of visibility, as we mentioned earlier in the call, into next year's outlook -- this year's outlook, excuse me.

Yes, we're already almost a quarter through. And then as far as the Payix acquisition, we've always been big fans of Payix. I know in the press release that there was some commentary about expanding your ability to address BNPL, and I think you kind of touched on this, but can you talk us through a little bit that mechanism and where that exposure would come from, and what kind of exposure it would be, at least today?

So, yes. So we talked about Scratchpay on the call, which is a great example of a buy-now-pay-later customer that Payix had and has had for a number of years and they've grown tremendously through using Payix's technology and that's just an example of how the buy-now-pay-later space is not only growing, but relying on payment processors like us and Payix to facilitate the processing of these card transactions. And so we see a lot of opportunity there. There is a couple of other case studies like that within Payix existing customers and then they have some in their pipeline, and we at Repay had names in that space, prior to buying Payix as well. And so again, they do need us to process their card transactions, and they're-- a lot of them are growing rapidly, as evidenced by the Scratchpay example, and that's great for us.

So, James, this is John. Good evening. So I'd just add some color to that. Obviously you have retail sales basically turning into retail installment sales and we historically, unless it was an auto that was turning into a loan, in some respects we were probably not touching many of those transactions, and now those are turning into some type of installment repayment obligation, and that will still need a processor into the financial system and power systems and financial technology fits well, and so some of the key integrations that are out there, that drive some of that ERP tracking of the workflows and repayments of that. So that fits well for us. We also think that as that world leans a little bit more towards the collection side of that, that will -- all of our channels and the way we offer, have additional offerings there to, with the helping get things repaid, we think that will fit well into our overall ability to service that industry.

Our next question is from Timothy Chiodo with Credit Suisse.

Question here. More of a -- well I guess a mechanical question around the future of the business and how it could evolve. When I think about the personal loan business, and also the buy-now-pay-later business that you've been expanding into, a lot of the focus on digital has been around card-based repayments or debit and there has been a great argument there for debit right. It's a money good transaction due to the card network rules. There's relatively fast settlement, it's a good experience for the user. It provides choice, the list goes on. But is it possible that over time, you could also look to offer more of an account-to-account based repayment for those personal loans at BNPL? I know that you do do ACH at the moment. But when I'm thinking of something, where you would partner with someone like a Plaid or a Finicity, and then attach to either an RTP or a Fed Now type of rail, that would offer something that is similarly good for your underlying merchant, meaning they still get that money goodness, and you could still earn your similar take rate, but maybe the total cost to that merchant might be lower, because you can remove the debit interchange. Is that something that's in the pipeline? Is that something maybe you are doing in certain circumstances, or is there a strong argument for debit over account to account?

Yes, sure. Good evening Timothy, this is John. So yes, if I look out at those -- as you've heard me say before, we want to be a network to the networks that move funds. And we are today and for the key types of payment modalities that actually are used by, predominantly the industry today. Debit is the one that we track the most, and the one that gives immediate access and guarantee to funds. But as those -- we tend to -- our industry needs us to actually transact. So therefore, we are designed to deliver all of those payment modalities over time. There is -- it is our goal to add those networks. We have, RTP is something that's on our roadmap to add in the latter part of this year. I will remind everyone, though, that for the most part, the account to account, it's consumer-driven. So it's more of a push payment, at least in today's form, which means it's difficult for that to automatically occur. And so, still the most popular payment today, still is going to be an ACH. If you look at the greater picture of overall transactional volume in the loan repayment space. So we see debit being very attractive still. We don't see any major disruption there, but we do see our ability to be a one-stop shop for all payment modalities, and we'll continue to add that. That will be a strength of ours, as we continue to move throughout 2022 into 2023.

[Operator Instructions]. Our next question is a follow-up from Bob Napoli with William Blair.

Just wanted to ask if you're doing any investing around the crypto ecosystem, if there are thoughts of how that fits into your business model over the medium to long term?

Sure. Good evening Bob. Long term, when I look at overall crypto itself, I think there's going to be a place for it, especially possibly on the B2B side. We -- just this quarter, we continued to expand what's in the digital wallet. So we'll -- if that becomes more mainstream and people want to be using that, that's something we'll have the ability to open up. I do think 3 to 5 years out, from looking at the concept of maybe stable coins and what help people exchange funds digitally, maybe even in a blockchain format, when you think about with invoices, et cetera, that could be a great opportunity for us to deliver high-quality ability, to totally help them transact between payor and payee on the B2B side for sure. And if that becomes more mainstream on the consumer side, we will obviously have that as an expansion of the digital wallet. But I don't see that being mainstream, specifically in 2022, although it's something that's on our roadmap and as I said, expanding our digital wallet, but also expanding the networks that we serve.

Great. And just quickly, what is the size of the mortgage business for you today? And is it -- it's not tied at all to originations, it's purely tied to servicing and loan repayments. I mean you seem to be optimistic about that business?

Yes, we are. It's still a relatively small part of the overall mix, I'd say less than 10%, but it's growing, and we're growing with some very large existing customers that are large mortgage servicers. We've predominantly been on that part of the space, but we are in the origination part of the market now through our Ellie Mae relationship. And so, we're starting to get some traction there, where we're seeing opportunities for first payments and interim servicing, once the mortgage is originated. And then it's transferred to an ongoing servicer, and we are actually facilitating some transfers through our service transfer exchange now as well. So there, we just -- we have some very large customers there that are continuing to grow with us, and it's a mix of loan mortgage repayments, and then communication solutions, where we're providing either paper-based or electronic communications support to these mortgage servicers or originators, because there's just a lot of notifications required in that space, because it's heavily regulated. And that's a part of our business that's growing as well. And so there's a lot of different facets within mortgage, predominantly on the mortgage servicing side, but now also in originations.

We have reached the end of the question-and-answer session, and I will now turn the call over to management for closing remarks.

Thank you, everyone, for your time today. We were extremely pleased with our 2021 results, and we're very excited about what we're seeing heading into 2022 and our outlook and what we see as far as in our pipelines and what we have in store for us for the 2022 initiatives, and we're looking forward to a fantastic year this year. And thank you for your time today.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.