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

Thank you. Good afternoon, and welcome to our first quarter 2023 earnings conference call. 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 and 10-Q filed with the SEC. Actual results may differ materially from any forward-looking statements that we make today. Forward-looking statements speak only as of today, and we do not assume any obligation or intend 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. Reconciliations and other explanations of those non-GAAP financial measures can be found in today's press release and in the earnings supplement, each of which are available on the company's IR site. Those materials include reconciliations and other explanations with respect to REPAY's organic growth. As described in our materials, Q1 2023 organic growth is calculated by excluding incremental contributions attributable to Blue Cow software business in Q1 2022. Since REPAY divested Blue Cow during Q1 2023. With that, I now would like to turn the call over to John.

Thank you, Stewart, and good afternoon, everyone. Thank you for joining us today to review our first quarter results. which provided a strong start to the year. On an organic basis, in Q1, we reported revenue growth of 12% and gross profit growth of 13%. We believe these results highlight the benefit of our resilient and diversified business model. Organic growth was largely driven by strong performance in our Consumer Payments segment. We remain excited about the opportunities across both the Business Payments and Consumer Payment segments. We also now have 248 software integration partners across REPAY, enabling our go-to-market to develop robust sales pipelines across our verticals. From a business perspective, during the quarter, we continued to make progress streamlining and optimizing our organization while also investing in growth. As we discussed on our Q4 call, we have segmented our results as well as our organization into Consumer Payments and Business Payments. And on February 15, we completed the divestiture of Blue Cow. This has enabled us to place a greater focus on the needs and results of each business line. Our Consumer Payments segment experienced 17% organic gross profit growth year-over-year, mainly driven by recent large client implementations, the ongoing secular tailwinds within the payments industry as well as the demand for our products, along with our focus on go-to-market and product expansions. During the quarter, we added 4 new software partners in Consumer Payments. bringing our total software integrations to 154. We are also focusing on expanding our relationships with these partners by enhancing our existing integrations with new product features and payment modalities as well as decrease in our sales efforts. Our internal sales efforts continue to focus on large enterprise clients, and we are winning. In Q4, we signed a large private captive auto lender.…

Thank you, John. Now let's go over our Q1 financial results before a review of financial guidance for 2023. In the first quarter REPAY delivered solid results across our key metrics. Card payment volume was $6.6 billion, which was impacted by tax refunds being down approximately 10% this year. Revenue was $74.5 million, an increase of 12% on an organic basis over the prior year first quarter. This represents a take rate of approximately 113 basis points. Take rates were higher primarily due to a lower average tax refund amounts in 2023 versus prior years, resulting in lower repayment volumes and typically experienced during tax refund season. In addition, we had strong performance in several of our noncard volume-based businesses within Consumer Payments, specifically in Communication Solutions and Instant Funding. Incremental revenue attributable to Blue Cow in Q1 2022 was approximately $0.9 million. Gross profit was $56.6 million, an increase of 13% on an organic basis. This organic gross profit growth removes approximately $850,000 of incremental gross profit attributable to Blue Cow in Q1 2022. Our Consumer Payments segment reported an organic gross profit growth of 17% in Q1. As John mentioned, we saw continued strong growth from existing clients and recent large client implementations. Our Business Payments gross profit increased 2% year-over-year. Business Payments net new growth was offset from lapping political media spending during the '22 election cycle, delays in implementation on the client side and lower volumes from a large client who started consolidating payment providers after being acquired. Exiting the quarter, Business Payments gross profit growth when excluding media, accelerated, demonstrating the ramp in our sales pipeline while realizing the benefits from our processing cost optimization and automation initiatives. First quarter adjusted net income was $19.2 million or $0.20 per share. Lastly, first quarter adjusted EBITDA…

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

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

Absolutely. Thanks, Ramsey. So we agree it was a strong quarter for consumer take rates. There's a couple of factors there. Some of it was due to tax refund season being a little different this year than prior years. So overall average refund sizes were down. And when that happens, we have a certain pricing model called convenience fees where it would be a higher take rate based on lower average refund amounts. And so that was actually the opposite that occurred last year in Q1. So we experienced the difference this year. And then also, there's some non-card volume-based products like communications solutions and Instant Funding that just performed really nicely in the quarter and those increase the take rates in terms of primarily in consumer as well. So those are a few drivers.

Great. A follow-up for me is on the business segment gross profit, which, as you mentioned, was impacted by a couple of factors. I guess, first, I guess, how should we -- well, how should we think about those factors impacting Q2? In other words, are you going to see, has that large client roll off completed? Or are you going to see some of that implementation kind of catch-up next quarter? How should we think about that those factors kind of impacting the segment as we go forward here?

Yes. So we -- as we mentioned, we saw faster growth exiting the quarter in March. And so I think some of the implementation delays have caught up. The new client roll-off will continue into the quarter but should be completed in Q2. And then we have some new wins as well that will be ramping. And so I think the combination of those led to higher growth in March and then we expect that to continue into Q2. So there were some specific factors to Q1.

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

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

Yes. So actually -- so Mercedes was the OEM that we won a few years ago. Last quarter, in Q4, we announced a private auto captive. So it's not technically an OEM, but it's a large privately held captive auto finance company. And then in Q1, we announced another large, what I would consider an OEM to be more comparable to Mercedes. So very large household brand. And we're not expecting a large contribution for the remainder of '23, but we do expect a meaningful contribution to growth in 2024 as the business ramps throughout this year and will be fully ramped to next year. And so it's -- it will be meaningful for us in future years.

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

Yes. Very similar trends, as we mentioned last quarter and as we've heard from some of the lenders that have reported already this quarter in some of our conversations with private lenders, they're still focused on managing their credit performance. They're still -- they're cautiously optimistic on loosening underwriting standards are still pretty tight. So not opening up originations. But again, we've said this before that there's a lot of demand for this type of credit. And so the demand being there as one of the more critical points for us. And as lenders get more visibility and feel a little bit more comfortable, we think they'll open up to originations and to fund that demand. So not really different from last quarter. And we had a large win in the personal loan space that we talked about last quarter that ramped up in Q1, and that's been really positive as well.

That's great. That's great. Just one housekeeping item for the second quarter for Blue Cow. Would that be about $2.5 million in revenue in the prior year period.

Yes, roughly 2.5% that we'd have to pull out of Q2 of '22. That's right.

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

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

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

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

Yes, absolutely. We were very pleased with the Consumer Payments growth in the quarter, really strong, and we have seen strength continue into early Q2, but we do want to stick with the planning assumption of a mild to moderate recession. We are seeing -- I think we talked about this before, we, in some of our end markets like auto, for example, has probably already been in that type of macro environment for a few quarters. And so that's why we think it's prudent to just remain conservative. That being said, we do think that growth -- it could still be nice growth in consumer next quarter. But the back half of this year is, the year is where you may see that macro come into play. And so we're just maintaining conservatism around that.

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

This is actually Stephen Kwok going in for Sanjay. I guess just first question I have was just a follow-up around the last question. In terms of the assumptions around a tougher environment. If conditions were to remain the same as current, how much of the differential would there be between your current outlook and where it could potentially be?

Yes. I mean I think we're monitoring it closely. I think we -- if things do continue to stay as they are and don't deteriorate, I think we could become incrementally more positive on the outlook for the year and would update folks as we report each quarter. And I think like we've said in the past that a mild, or moderate recession is probably high single digits, low double digits and mild is more like low to mid-teens. So we could see potentially us moving somewhere in the middle of that range if we became incrementally positive just with more visibility into the macro.

Got it. And then the follow-up I had was just around the take rate, just trying to dive a little bit deeper because if we take a look at your full year guidance, it works out about 105 basis points versus the 113 that was in the first quarter? Like what are the puts and takes that gets us to that 105 range?

Yes, it's a good question. So it will come down, and a lot of it is due to seasonality related to tax refunds. There were some dynamics I just described that caused the take rate to be higher. Also, we just ramped a very large enterprise customer in Q1 that like we talked about when we provided the guidance originally, just naturally enterprise customers could be at a lower take rate. So as that becomes a bigger contributor, it could bring the take rate down. And then there's a potential for B2B has become a bigger part of the mix and that take rate is slightly lower. So those are some of the items we would look at that basically bridges from the 113 to the full year 105 or 106.

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

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

Andrew. Yes, it should be upside. As you -- we just had a large win that implemented the first quarter this year, we would hope just because of implementation cycles with large enterprises, it takes time to win them and implement them. So that will contribute in '24, which will help offset against what's happening in '23. So I would suspect if we continue to execute, which I expect us to and I obviously see our sales pipelines, we should continue to be able to execute there. But enterprise, as we mentioned in the past, it takes time for us to -- just for those things to roll around if they actually are under contract. But we have more at [indiscernible]. We're investing in more at [indiscernible]. We see the opportunities for that. And we think that's obviously going to deliver. We see evidence of those things in both the Consumer Payments and the Business Payments.

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

Yes. So what it looks like, I'll talk about that part and Tim can talk about margins. So it's unique processors that we are able to give them several capabilities that makes their ability to execute on their strategies unique. Specifically, they may have their own technology, their own gateway, and we're just helping them clear and settle with all the money movement and the money flows. And then many in that world are potentially in various different types of e-commerce vertical the areas that we're not specifically in. So we've been fortunate that we've built an amazing platform that is, we think, is a state-of-the-art as from a modern platform for 2023. And we're getting lots of inbound interest there. We're able to strategically partner with the ones that we think are have high value for growth and great partners. And then I'll let Tim talk about as far as contribution and margins.

Yes. I'll add to that. I mean, what we typically see is a midsized to larger ISO type of customer that is working through one of the larger processors and wants more control of their own ecosystem and they want to become more of a full-service processor. They want access to banks and they want access to the ability to run their own businesses and have more control of that. And so we're able to customize that and provide that to them and with redundancies. And so that's what we typically see. And then what happens is they'll bring volume and transactions to us as part of a conversion and then eventually, hopefully, we get all the business. So that also takes some time to convert. That's kind of -- that's the typical type of customer and a typical type of conversion. It is really nice margin business, and it's been performing very well. And we were just at the Electronic Transactions Association and have a really nice pipeline coming out of that. And so it's been a really nice growth driver for us.

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

Great. This is Adib Choudhury on for Bob. You touched on a bit in some of the earlier questions, but just directionally, could you kind of provide some comments on business trends more broadly in the month of April and May so far?

Yes. April in the consumer space, particularly was -- started strong. I think some of the tax refund dollars maybe fell over into April, which is not overly surprising with late filers. And so that helps to the consumer side. Like I said, we have fully implemented the large personal lender and that will benefit us for a full quarter in Q2, which has been good. So we've seen positive trends in the consumer side and then in Business Payments. We have completed implementations of some of the larger wins that we talked about that provided strength exiting the quarter and into early Q2. So we're seeing positive trends with that as well. And then there's a very strong sales and implementation pipeline and business payments that will continue to ramp throughout the quarter into next quarter.

Just a reminder on 2 things, as we talked about as well, we do have some political media, we're lapping. And obviously, Blue Cow will be out of the second quarter numbers. And obviously, all of you know, we've mentioned before in the past, specifically on the Consumer Payment side, first quarter is our -- is a high seasonal quarter for us and second quarter can obviously seasonally be less than the first quarter from an overall volume perspective. Just want to mention a couple of those things.

Yes. Appreciate that. And just -- as a quick follow-up, I guess, bigger picture, REPAY has made a bunch of acquisitions on the B2B payment side. Could you just kind of more broadly talk about some of your learnings as you've integrated these deals and kind of going back to your confidence in terms of ability to deliver 20% plus growth in B2B longer term?

Absolutely. So if you look at a normalized growth less the political media spend is every even year, we think that, that obviously is still there, and we're seeing it. We're seeing it in the wins that we're looking at. We're seeing it in our pipelines. The evidence of what we thought is still absolutely true, and we're excited about that part of our business. Obviously, consumer is still a large part of our business, and you can see how it's growing fast. So it's hard to catch it from that overall total volume mix, but we really like the business. The verticals we're driving down, and you heard me talk about on the call, in the hospitality vertical as well as the municipalities as well as hospitals. We're still seeing lots of opportunities there. It's a large addressable market that is still well underserved with the entire digital transformation is happening. And we think we have one of the best-in-class technology solutions with our TotalPay solution in the marketplace. We'll continue to expand on that. We'll continue to expand on the different ways people want to pay and get paid and our ability to truly execute on that by truly understanding money flows and understanding the ability to move those funds as well as give them the state-of-the-art financial technology to do that. we think we have a winning formula there.

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

I want to circle back to the announcement you guys made a few years back, and it's featured on your growth plan Slide 17. I know it's a smaller part of the business but I was hoping you could give a brief update of your partnership with Veem in B2B cross-border and how it's helped your business, whether in winning clients or winning volumes or just a broader update on that partnership? And then I have a quick follow-up on the gross profit guidance.

Yes, sure. So obviously, Veem is a nice company, and we have a really strong relationship with them, [indiscernible] they do a good job. Specifically for us, we do not have significant cross-border activity with a lot of our specific large enterprise clients. They're more domestic than international, and that's why we haven't seen a tremendous amount of growth in the cross-border side of that. But it is a piece of our product suite it is -- it does allow us to be extremely competitive in the marketplace. As we -- some of our large enterprise clients continue to expand, we'll see more and more opportunities to that. We obviously are seeing some of those opportunities, specifically into Canada. And -- but overall, it's still not significantly meaningful from a cross -- meaning cross-border is not.

Absolutely. Okay. And then this one is for Tim, is as a follow-up. So just on an absolute on the reported numbers, not adjusted for the media spend comp that's tougher in Q4. Is it fair to assume that the guide right now may be conservatively and because of the macro impacts that you're embedding the absolute growth is more in the low single digits. And then if we added in the media impact, it would imply an underlying exit rate in maybe the high single digits for this year. And again, that is in the more moderate or mild recessionary scenario. Is that a fair recap? Or would you correct me on anything there?

Yes. So if you look at Slide 12, there's 3 ways to think about growth. There's the reported number, which is probably mid-single digits. And that's the top section of that chart on the top of that page. And then there's the organic number, which excludes Blue Cow, which gets us to high single digits. Then there's the normalized organic, which excludes Blue Cow and the political media impact, which gets us to low double digits. So that's still what the guidance implies, and that's how we build up to it if you should look at that slide, which is similar to when we reported guidance originally.

Completely, Tim, I appreciate that, and I -- this slide is really helpful. I was actually talking more just specifically about Q4 and the exit rate, not the full year...

Okay. Yes. So we think that the Q4 exit rate would probably be, I would say, high single digits and then normalized for political below double digits. Then we add, for example, the large captive auto client that we'll be rolling out next year, which we think will be incremental to those numbers. and then we add the political contribution. So that's what gets us excited about next year. And with a big to auto when we know is incremental even to that exit rate in Q4.

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

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

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

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

Sure. So as you've heard me speak about, we're continuing to enhance all of our existing loan management system integrations in our Consumer Payments area, we think that will give us great organic growth opportunities. We know that. As we expand several of our product features and functionalities, that being our digital wallets, that being Venmo, PayPal. We know that the consumer would like -- it doesn't mean that, that will be the only way they want to pay, but we know that our consumers would like multiple ways to pay, how they want to pay. And so we see good consumer demand wanting those features. And we think that's going to lead to additional new organic opportunities, but also we think that will -- as we've always talked about, our ability to continue to convert in the digital transformation, convert existing clients into more of a digital solution. We see really good demand there on that side of it as well. But that -- we're barely scratching the surface there as we're rolling out and enhancing some of those features and functionalities. As you can imagine, we have to get on everybody's technology road map and some of the things we're doing there. We're still early in some of that, but yet we see really positive -- we build these solutions because we know there's demand there and consumers want to do it competitively. If you think about it, it's just another payment feature and a payment option at checkout. So another way to pay. And we think that ultimately what that drives is a high-quality in consumer experience as we help them engage there, but also you get paid more. I mean you get paid more. That's a high-quality experience across the entire ecosystem.

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

So some of the more recent wins in auto, particularly Mercedes would imply more of an upmarket SKU from a credit standpoint. So with that in mind, I was wondering if you could comment on the overall exposure within auto across the credit spectrum. I'm not looking for specifics around subprime, prime, et cetera. But just any high-level comments, I think, would be helpful given the uncertain macro environment.

Yes. Thanks for the question. We're clearly trying to go upmarket. We have been for several years, and we're winning deals there now. We have a pipeline in the captive space. We have more enterprise reps on our team. And so we are seeing success there. We do process for lenders, auto lenders across the entire spectrum, but we have focused more of our efforts on the enterprise accounts, which would naturally, like you said, lean toward more of a prime type of borrower. So that's where the focus has been. But historically, we've sold accounts across that entire spectrum. So that -- so we do have a good mix there. But going forward, it will -- the mix will lean more toward prime, super prime.

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

So Blue Cow is on the consumer side. So that when we broke that out, that's what contributed to the difference between the 15% reported and the 17% organic. So that's on the consumer side. And as we mentioned, there will be about $2 million -- $2.5 million of revenue in Q2 '22 that we would pull out. So when you're thinking about consumer organic growth, that's how we factor that in. And then the -- we don't want to get too specific on the large account, but it would probably be at least a few points of growth that we lost as a result of that. And so you can see how that would impact the exit rate going into Q2.

[Operator Instructions]. Our next question comes from the line of James Faucette with Morgan Stanley.

I had a couple of follow-up questions on topics that you've already addressed, at least on this call and in the press release. First, on B2B. Obviously, you talked about a large client rolling off and it seems to be having a little bit bigger impact on the B2B segment than at least I would have guessed. Can you remind us what your customer concentration might look like? And how should we think about the risk of additional churn there?

Yes. Thanks, James. It's pretty -- we're pretty diversified there. So there's not really a concentration risk. This just happened to be a unique situation where a private equity firm bought a few of these companies and basically brought them all together in consolidated processors. And so like we said earlier, it was a pretty unique, but it was several points of business payments growth that we lost as a result of that, but there's not a significant concentration and we're not aware of other losses like this.

Got it. Got it. And then on credit unions, you mentioned in the press release that you're seeing continued strength with credit unions, it was quoted up 20% or so. You mentioned last quarter that credit unions strength may be partially due to softness within some other verticals. Can you remind us a little bit like what the relationship is between verticals and strength in credit unions and give us an update on what you're seeing within credit unions and how we should think about momentum.

Yes. So I think that comment was related to some of the auto lending moving out of the traditional auto space into credit unions, just credit unions having generally lower rates they were benefiting from rates rising and then being able to provide competitive financing. So I think that we still see that happening. We're winning some auto financing business away from traditional lenders because of that dynamic. And credit unions have generally been strong. I think even through the last 6 weeks or so as we've seen issues with regional banks. We've seen real strength in credit unions because of their member deposit base and because of the loyalty the members have to them, which I would help with the originations for new loans to those members as well. So I think the biggest tie-in is probably between credit unions and auto.

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

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

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

I think from a competitive standpoint, it's not really changed much. I mean, we see some similar names on the consumer side, we've mentioned before. As we enter new subverticals within B2B and the AP side, we may see new competition just because there's players already there in those subverticals. And really, the way we'd win there is by gaining software relationships in the AP subverticals and then building the supplier network within those verticals. But that's where we may see new competition is if we're entering new subverticals, particularly within B2B and AP.

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

Thank you. We are very pleased with our first quarter results. We remain focused on executing our strategy as we see incredible amounts of organic growth opportunities, and we'll continue to invest in those. We will continue to execute our operational efficiencies as we expand our sales pipelines and we'll continue converting on our implementation pipelines as well. Look forward to speaking with you in the next coming weeks here. Thank you very much.

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