Q4 2020 i3 Verticals Inc Earnings Call
[music].
Good day, everyone and welcome to the I three verticals gear and Twentytwenty earnings Conference call.
Today's conference is being recorded on the replay will be available starting today through November 27.
Number for the replay is 7.19 for 570 820 on.
The cold is for 271 for five one of.
The replay may also be accessed for 30 days on the company's website.
This time for opening remarks, I would like to turn the call over to Scott maybe the weather Chief operating officer. Please go ahead Sir.
Good morning.
Welcome to the fourth quarter 2020 conference call for right. Your verticals joining me on this call are Gregg Daley, our chairman and CEO.
I would say, our CFO and Rick Sanford of our president.
To the extent of any non-GAAP financial measures. The as discussed on today's call. You'll also find a reconciliation of GAAP metrics for the most directly comparable financial measure calculated according to GAAP revenue in yesterday's earnings release the.
The company is on a chance for but non-GAAP financial information to enhance the understanding of its consolidated the financial information that's prepared in accordance with GAAP.
Non-GAAP information should be considered the each individual in addition to not instead of financial statements prepared in accordance with GAAP.
The conference call May contain forward looking statements within the meaning of the private Securities Litigation Reform Act the banks.
Including statements among others regarding the Companys expected financial and operating performance I mean, I expected the potential impact of because of at night and day.
For this purpose any statements made during this call that are not statements of historical fact may be deemed to be forward looking statements.
You are hereby cautioned that these forward looking statements may be affected by the important factors among others set forth on the company's earnings release, and then reports that are filed or furnished the FCC, including risk and uncertainties uncertainties associated with the kept the 19 pandemic constant.
Consequently, actual operations and results may differ materially from the results discussed on the forward looking statements by.
Finally, the information shared on this call as valid as of today's date of the company undertakes no obligation to update it except as may be required under applicable law.
I now turn the call efforts, the company's chairman and CEO Gregg daily.
I think Scott.
Hi, good morning to all of you.
We were pleased with our fourth quarter and our full 2020 fiscal year.
We're optimistic about how we are executing ex exiting the school year 20.
As our core business continues to recover and we execute on our M&A strategy.
I know volumes have continued to improve over the last two quarters, though there are lingering effects from continued government regulations or restrictions.
For fiscal year 2020 of our adjusted net.
Revenue increased 10%.
And our adjusted EBITDA I was relatively flat with the prior year due to the effects of the pandemic.
We expect there will be some continued volatility in our payment volume in the coming months, but the.
The increase in our software revenue will reduce some of that impact we're confident in our companys market position moving forward.
We continue to execute our software driven payment strategy that's.
For pausing or M&A activity at the onset of total that we began to reengage <unk> on the M&A front I have completed seven acquisitions since July 1st.
Oh seven acquisitions are focused on solve for payments.
Four of them are in the public sector, which continues to grow and as as our fastest vertical.
We've announced six of these acquisitions previously and I will discuss the seventh one momentarily.
We also now have our first software for it holds a nonprofit in health care.
Which were a big strategic steps for us for it.
We will continue to pursue additional opportunities in these verticals.
We continue to streamline our payment technology platforms and worked for developing existing software product offerings. We believe these acquisitions.
On a return to normal economic conditions in fiscal year 21, well help us the delivered strong results next year and going forward.
A recent acquisition was any Shaw.
The public sector of company positioned as a leader in paperless processes.
He filings within courts is one of their key products and we're excited about image sops product suites, enhancing our current offering in the public sector of market.
This will the our largest office from I head count perspective, and we welcome the image soft employees to the other three family.
We have seen major wins across the company during the last quarter.
We haven't had the greatest number of monthly approved.
Payment accounts in the history of the company.
Which is the continued the strong around that began the engine.
Within our public sector, James we signed several significant new projects in Louisiana and Texas.
And despite the continued shut down the of restaurant activity on the West coast, we shipped out of record amount of Pos systems in October.
Wins like this gives me excitement about the upcoming year.
The education vertical remains depressed as many students continue to participate in the online or remote environments.
The federal government extended free lunch program for students through the end of the current school year.
Over half of our payment revenue within K through 12 education comes from lunch payments.
We currently expect this program will end at the start of the next school year, but.
We will continue to monitor federal actions in this vertical and we'll respond accordingly.
We have signed as many new school districts the sure.
The depressed lunch payment volume as the outweighed our customer gains we're still believers in this vertical and its long term potential.
Our integrated payment volume continues to growth.
57 per cent of our payment volume was integrated during Q4 up from 54% in Q4 of 19.
As all of our recent acquisitions have been software based.
We believe we will be able to drive this metric higher in the future.
Now I will turn the call over the clay and he'll provide you some details on our fourth quarter financial performance and follow on Clay's comments, Rick will provide an M&A update and then we'll open up the call for questions.
Thanks of the following pertains to the fourth quarter of fiscal year 2020, which is the three month period ended September thirtyth of 2020.
Please refer to the slide presentation titled the supplemental performance on our website for reference with this discussion.
As we mentioned last quarter. Our Q3 ended in June was our worst quarter of the pandemic.
For the fourth quarter ended on September.
Net revenues improved sequentially, 22%.
The 38.4 million.
EBITDA increased at a much higher rate, 37%, the 9.7 million, reflecting the operating leverage embedded in the model.
The EBITDA margin improved sequentially from 22% the 25%.
Pro forma adjusted diluted earnings per share increased sequentially from 13 cents in Q3 to 20 cents in Q4.
Again, please refer to the press release for a full description on the reconciliation.
Volumes have regained most of the altitude they lost in the spring on a year over year basis July and August were down 9% on September was down 3%.
On the face of it volume in Q4 2020 was higher than Q4 last year. The this.
This year include that our non profit acquisition.
And 280 million the base the H. volume, we did not have last year.
Principally from tuition payments for the University, we announced last quarter.
Excluding the <unk> volume and the non profit acquisition October was down 4% on the previous year.
So far in November same similar to October.
The laggard for Us I had been education retail and hospitality.
But the number of companies have experienced.
We have taken on aggressive approach during the pandemic continuing to post record sales of months for renewing acquisition activity that was postponed in the spring.
We have fulfilled our goals ammonia software and two additional verticals healthcare and non profit.
Which gives us runway beyond our growing presence in public sector.
We feel well positioned in the economy emerging from the pandemic.
Our integration percentage improved the 55 per cent for 2020 from just 36% for the IPO.
As in Q for software and related services represented 26% of total net revenues up from 5% pre IPO.
This was the notable achievement on a quarter, that's our general recovery and payments revenues.
Software revenues continued to build during the quarter and exceed the pre covered levels.
The bright spot for us continues to be public sector, which drove our proprietary software and related payments segment results.
In public sector, we have strong year over year growth in net revenues and EBITDA and approve of the EBITDA margin in the verticals.
Our non profit acquisition also had a strong quarter with impressive growth over the previous year.
The health care acquisition is not included in our results until the December quarter.
On the year over year basis, net revenues declined 5%. The 38.4 million for Q4 2020 from 40.6 million in Q4, 19, reflecting the challenging economic conditions in several markets such as retail hospitality and education.
Acquisitions contributed an increase of 3 million in the quarter.
I Pos declined 2.5 million, reflecting not only the cobot impacts in California, but also our ongoing transition to a SaaS offering.
Our net revenue yield defined as net revenue divided by payment volume declined to 97 basis points for Q4, 2020 from 105 basis points the queue for 19.
Mainly due to the AFE for mentions a C H volume from University tuition.
For the full year, our revenue yields held steady at 105 basis points.
Adjusted EBITDA declined 17% to 9.7 million for Q4, 2020 from 11.7 million for Q for 19.
Primarily due to weakness and education on hospitality.
Please see the press release for a reconciliation between net income on adjusted EBITDA.
Adjusted EBITDA as a percentage of net revenues was 25.2 per cent for Q4 2020.
On from 28.9 per cent for a few for 90, reflecting fixed cost spread over lower net revenues due to the COVID-19 impact.
In the normal course, we expect to improve our EBITDA margin for the same group of companies over time.
The effective April 1st we instituted previously disclose cost savings, which include the terminations and for laws.
These cost savings together with lower TV expenses saved almost $3 million.
In the June quarter.
We had a sense free calls roughly half of the furloughed employees as business has rebounded.
I have retained the about $1 million in savings quarterly on on ongoing basis, which allowed our corporate expenses as a percentage of net revenues to remain steady at 7.2 per cent for Q4 919 out of 20 Thislife lower net revenues.
[noise] segment performance.
On our proprietary software the payment segment net revenues increased 19% the 14.1 million for Q4 2020 from 11.9 million for Q for 19.
Principally reflecting growth in our public sector verticals, but also the inclusion of our non profit acquisition for the quarter.
Adjusted EBITDA improved 2% the 4.9 million for Q4 2020 from 4.8 million of for Q for 19.
Reflecting mainly public sector growth, but also the non profit acquisition.
On our last conference call, we the vote at some time to the outlook for education.
And it is playing out about as expected.
The most districts have reopened the but many of our remote and others are staggering student schedules on campus.
As mentioned earlier the U.S. The AE has extended its free lunch program for all students for the remainder of the school year, which means we will not see a meaningful increase in payments until the new school year next August.
Regardless of how the school year unfolds, we remain committed to the vertical and believe it will perform very well over the medium and long term.
Our public sector of vertical is coming on strong.
In Q4, it represented roughly three quarters of net revenues in the segment and even more on an EBITDA basis.
As you heard from Greg we are excited about the companies we have purchased since the IPO, including the most recent acquisitions and the future pipeline.
Net revenues for our merchant services segment declined 14% to 24.8 million for Q4, 2020 or 28.7 million for Q for 19.
Our hospitality vertical was hardest hit with the exposure to California, and the transition to assess the model.
Other non integrated face to face the business in markets, such as retail restaurant and Tiffany haven't been slower to recover.
Adjusted EBITDA for our merchant services segment declined 23% to 7.5 million for Q4, 2000 29.8 million for Q for my team.
Again, reflecting fixed cost spread over a smaller revenue for us.
Our balance sheet, what has allowed us to continue to execute our acquisition strategy during the quarter, we completed a follow on offering which net of the company's 71.9 million in proceeds for debt repayment and strategic acquisition opportunities.
Currently we have 44 million borrowed under our revolver, which is the 275 million facility.
The face value of our convertible notes are 117 million.
During Q4, we closed three deals for a total of 27.4 million.
On October 5th we announced three deals totaling 19.6 million.
And this week, we added image soft for 40 million of.
Our total since June 30 is 30 of this seven deals for total cash consideration of 87 million.
Five times.
The most of all the paid on our recent deals conform to less than 10 times EBITDA.
The interest rate for the convertible notes or one per cent, while the interest rate for the revolver is currently less than 4%.
Over time, we expect the convert roughly two thirds of EBITDA into free cash flow, which can either be used for more acquisitions or debt repayment.
[noise] outlook the.
The company's suspend the guidance in the screening recognizing the uncertainty introduced by the end of it nice team and I might add.
This time the company is not providing a financial outlook for fiscal year, ending September Thirtyth 2021 I.
The note on seasonality in relation to 2021.
2020, it was an odd year from a quarterly mix perspective, we.
We believe 2021 will unfold more like 2000, the nice team than 2020.
Since the COVID-19 outbreak, we have announced seven acquisitions, which of altered our business mix.
To get the better understanding of our current run rates. We have estimated the following represented the net revenues by vertical.
Public sector, 40%.
The the 10 per cent Haas.
The Talladega.
[noise] retail 10%.
<unk> occasion five for sense.
Nonprofit five per cent.
And the other 10%.
We continue to like our diversification hospitality and retail of which we considered the most challenging markets over the next few years only represent 20% of our book.
Our largest vertical as public sector, and we feel increasingly felt position the there.
Health care as an essential service and B to B will grow over time.
The software platform, we acquired and the nonprofit niche that's grown during the pandemic.
Digitization of payments away from cash and checks.
And we have the differentiated payment solutions to offer our customers integrated through our software and other leading software providers.
I could clay good morning, everyone.
I want to highlight recent progress on the few operational matters before I talk about our M&A status, including a few updates on the things of addressed on previous calls first.
First an update on our unified product offering in the public sector vertical of topic that I've discussed before our goal is to make a comprehensive suite of products available to each county, and city and we're making progress towards that goal. For example, all initially contracted customers last quarter under you PEO had been installed.
The at our love.
We're coupling our law enforcement product with traffic courts in both the Texas and Georgia.
We will kick off the series of road shows for USIO to present, the expanded product suite under you know to existing and potential customers.
We recently were able to secure a system sale in the new state for a court management system not currently in our footprint last.
Lastly, we are migrating certain customers from a legacy government accounting package to a newer version we recently acquired.
We are motivated by these early you Peel the accomplishments that are gaining momentum in cross pollination, our pipeline for cross pollination remains very large under the.
Second on the eyes of the fraud, our total number of signed an integrated I as these at the end of our fourth fiscal quarter was 68 with two more in process of integration I.
Pipeline for Icees continues to grow quarter over quarter, and we are actively pursuing additional integrations.
So for our in house team of Engineers have developed two additional flavors of our electronic bill payment and present, the product or E. BPP that are alternatives to our full featured enterprise Bill and pay products. These two new versions are essential and probe.
This development was done to accommodate the needs of small to mid sized customers that did not require the deep enterprise version of the software.
Lastly, a few comments about our M&A efforts on on.
October 1st we announced the closing of three acquisitions.
The first acquisition is within the public sector verticals. This business is based on the southeast and provide software and services for public safety and law enforcement of customers. Their products include public safety that connects at customers comp center, the local public safety agencies Dispatch Records management.
While enforcement mobile solutions and criminal solutions available with mental health checks and the interfaces to courts. All of these products have an integration to the N.C. I see national crime Information Center. The shared at the I database used by law enforcement nationwide.
The second October one acquisition is when the within the company's health care of article that offers the following products medical billing and scheduling practice management software.
Electronic health records and analytics reporting.
This business is also headquartered in the southeast of serves customers across the country.
The final October one acquisition offers proprietary technology that will augment the company's existing technology platform across several verticals. It is also based on the south Eastern service customers on the nationwide basis.
All three acquisitions enable us to all for new software to existing clients and to penetrate new geography. The end markets. We are extremely pleased to now on the software in both the healthcare and non profit verticals.
I am excited today to announce that on November 17th Tuesday of this week, we closed on other public sector acquisition image soft image soft was founded in 1996. The company is in Detroit, Michigan and operates across the country. They.
They sell the combination of proprietary and third party software.
Their software at a high level eliminates paper based systems by creating integrated electronic workflows for courts and government agencies. Some of the products sold by the image soft our true filing true saw on.
True sort of or electronic certification of court documents CAE share the indexing packaging and transferring of the case files from trial to appellate courts HR.
The charge code management platform the unified statewide database of charge codes. The provides cross jurisdictional consistency in the lastly, digital evidence management.
All of these deals I listed today continue our push to provide software across multiple verticals with embedded payment capabilities. We.
We continue to be disciplined in our approach in all four of these acquisitions conform to attacks purchase multiple.
Finally, our future M&A pipeline is very healthy and has an emphasis on public sector education and health care and we look forward to sharing more on the acquisition front in the near term.
This concludes my comments key the at this point, we will open the call for Q and I. Please.
Thank you.
If you would like to ask the question. Please signal by pressing star one on your telephone keypad if.
We are using the speaker phone. Please make sure. Your mute function is turned off to lot of you're sticking on to reach our equipment.
I can that's star one to ask the question.
I will now take our first question comes from John Davis of Raymond James. Please go ahead.
Hey, good morning, guys. So.
So Greg maybe just want to start off or play the I appreciate the commentary on the multiple paid for the the for recent acquisitions just curious from a margin perspective, that's similar to the other current corporate margin slightly above slightly below the just trying to think about the total kind of revenue in the EBITDA impact of the for reason that.
The business.
Software companies I can run as much as 50 per cent margin.
Image soft as a little bit lower at.
More like 20%.
The the others would the you know between 40 and 50 I would say.
Okay. That's helpful and then specifically on image the often seen.
Seems like a pretty exciting deal that you could leverage throughout all the different regions, where you have.
Of course, so just maybe talk a little bit more about how the plans on how easy is the the integrate with your existing core infrastructure of them across the different regions, where you have court systems and then any idea of how fast it was growing and maybe what you think you could cook.
Growth given that it feels like it's pretty synergistic from a revenue perspective.
Yeah, John Thank you for your question you know.
We had several of our public sector Ceos preview the steel during diligence and the say they're excited is an understatement every time, we do an acquisition and public sector. There are some small overlap.
The product suite, but this one brings us a lot of products that fill gaps in our current.
Unified product offering.
I think one of the the big gains were going to see what this company.
He is cross selling their products into our existing states on courts and.
On everybody's excited about it we think it's going to be easy to do it will immediately be put under our unified product offering as an augmentation to our existing technology. So we're excited about it very excited I have.
I also mentioned the extremely talented group of folks that were bringing on.
For them it solved.
Okay, and then just maybe switching over to the education vertical it maybe just give us the sense and total kind of what you see from a.
Revenue and EBITDA perspective, I don't know.
I just asked you can give us on percentage of schools opened and then I think one of the things I wanted to clarify is one of the school is is closed the I guess and the per student in in the actual school in the doing from home what does the revenue picture look like the that down 80. The down 90 is about 50, just trying to think bigger picture, how should we think about the education of or.
I will over the next couple of months, which are probably the pretty challenging.
Well I guess last quarter, I think we frame that.
That we have about $10 million from payment revenues gross profit.
And estimated we thought we would lose half of that this year.
And looking at our.
Most recent quarter.
We still we still think this is causing a 5 million dollar.
Revenue and profit Hall for 2021.
Our software revenues have actually increased the lunch.
Free lunch for everybody that started in the summer.
That's a big hit.
It's very hard on the administration I jets.
And so we do think net.
Next year it'll come back.
But for this looking at this this fiscal year, we think at the 5 million dollar hit to us.
Okay. Thanks for the last one for me Clay I think you mentioned the pro forma leverage for all of these deals and the low threes I think you have 5% cap.
Yeah, but our mass adjusted for your to the kind of take it up to four times a year.
You still have the call it $50 million to $60 million of capacity for future M&A without having to raise the debt.
Total capital is that more of the ballpark of with how you guys think about it.
Yeah, our leverage ratio as our.
Covenant constraint this 5.0 times a day.
But I.
I I think we have a stated intention of keeping that close to for as a maximum and the current environment.
Okay, Alright, thanks, guys.
Thanks Jade.
Our next question comes from George Mihalos of Cowen. Please go ahead.
Hey, guys, good or good morning, I I wanted to the kind of follow up on the M&A front I.
And just maybe specifically Rick would you look at the pipeline that's out there I mean lately been more active in the verticals outside of public sector. Just just curious when you look at the pipeline right now.
How do some of the non public sector verticals kind of stack up other opportunities there and are there any sort of complications or maybe sort of push outs now as a as maybe Toby seems to have come back into play more aggressively.
Yeah. So I keep of the question George We did you know it's it's no secret that we've been looking for several years to get into the non profit health care. We've looked at a lot of deals. We just haven't felt on the right fit.
For those two verticals, it's probably taken us for five years to find the right partner.
In those fell into place coincidentally at the same time in the same quarter.
We still have the pipeline is still a relatively full with public sector I would say greater than 50 per cent of the deals that we're looking at as public sector, but we are continuing to look at education and healthcare, we feel like we've got some other.
On some things we want to buy to augment our existing proprietary software and we're going to go get those things so as far as the environment you know our partners.
Weighted on the vessel, we ask them to wait and stand down on closing the acquisition, we're glad they hung in layer of they show that they're the right partner for us of.
I don't see the acceleration I still think we can do for to five deals next year.
If we're lucky we may do seven thinking on.
Nothing is slowing us down and I don't see any indicator that we're going to be Oh, I see any kind of headwinds towards completing our M&A strategy next year like we did this year.
Okay. That's that's helpful on that a question for for Greg on Clay I know, you've obviously had a window on the higher education side I am I'm just curious what does that pipeline look like you know was that recently more one off of the other opportunities. There and then how do you think about that sub segment of education higher Ed.
I was just kind of the K through 12 schools.
Performing in the co the environment I I I would assume there's less so let's focus on the meal plans on the like but just just curious how you're thinking about that business.
Well in the current environment, Georgia, I'd be surprised if we made and I another acquisition of before the Covance situation clears up.
There's just a little bit too much on certain say.
And the higher Ed that's.
That's performed very well, we have one university as you know.
And it was very interest rain watching their volume come in the last few months.
It was heavily weighted towards tuition.
And mainly a C H, which is pretty thin margin. So.
It's a great accounts, well probably get another tuition spike and January.
And we'd like to add one or two of these every year it'd be a great complement our existing software works. So it's just the brand new market for us.
Great and just just last question for me as we think about 2021, and I know you're not you're not providing an outlook, but when we look at the hospitality business. The you know the point of sale business and in some of the momentum there yeah. Clay can you just remind us how much of the headwind the SaaS transition specifically was two two fiscal.
2020, and then I again without getting into specifics on we think about the sales momentum you've had there. The SAS. Yes is there any reason why that business shouldn't be in the black from a growth perspective next year.
Well it it.
It was about a 10 million dollar.
Equipment and software bundle of that we were selling.
And the headwind was 7 million.
For 6.72 thirds of it yes.
We went a 100% SAS October onest of last year, which we knew would not happen, but we laid out for the most conservative case.
We probably only got half of that this year wary of that were full throttle on our selling a lot of essential as our customers like it it's given us a new tool to compete with the way everybody likes it from our sales people to our customers the.
I said management of.
HM.
But we're only probably halfway through it so I won't get the other half of it this year.
Ah So I'd say, there's a 3 million dollar headwind ER and then I think we'll start growing and 2022.
Okay. Thank you.
Our next question.
On from Jason Kupferberg of Bank of America. Please go ahead.
Hi, guys just the Todd the gave the I just wanted to touch a little bit on margins. I know you guys had a pretty significant margin improvement quarter over quarter, almost 300 basis points is that level sustainable and how should we think about the puts and takes for that going forward. Thank you.
That level is sustainable depending on the general economic activity or you know we had a very harsh contraction in the June quarter.
And then in the September quarter.
We were up to.
Maybe 80% of the revenue level, we normally see.
It it kind of feels like we've plateaued here at 80% you know of vaccine could change that picture of new shutdowns could change that picture of the other way, but November so far feels about like October debt.
But.
It gets down to our fixed costs and more avenues of means a bigger margin and less revenues means the lower margin.
The only thing I would call out is that education was a pretty big hit to our margins if you take.
$5 million of profit out.
This quarter alone, we probably lost a million on a half of profit from education.
So that's the big factor if it comes back in 2022 that'll be a big windfall for us.
And then our acquisition activity has moved towards more of.
Public sector non profit health care of those carry higher margin so.
Assuming a stable economic.
Environment or one like we're seeing right now I think our margin will improve over time.
Got it that's really helpful and switching gears target of revenues I just wanted to ask.
So it seems like the spread between your volume on revenue growth kind of why didn't pretty significantly and that's kind of to be expected, but are you expecting a similar spread in the coming quarters and you know piggy backing off of that you know what are your kind of expectations for potential you know revenue growth turning positive other like next quarter I may be.
More of the calendar 2021 thing thank you.
Yeah, well the biggest reason for that I have urgency this quarter was education, which we've just talked about.
Not only losing the lunch program, which are very small ticket items and high margin items.
But also the a C H.
With two ish and that's something which.
You will see in the September quarter, and again in the March quarter.
But the other two quarters, you will not see that big AC I guess activity, which depresses margin. So.
But going forward.
I think our ongoing mix shifts.
I will help our margins on a quarter over quarter basis, meaning comparing the December quarter to the December quarter, the March quarter to the March quarter, and so on going for it.
Got it for helpful. Thanks, So much for taking my question.
Thank you.
Our next question comes from Peter Heckmann of Davidson.
Hey, good morning, gentlemen, thanks for taking the question I am just in terms of thinking about your adjusted the organic revenue calculation. I think you said about 3 million in total the acquired revenue on the quarter. So you're taking out the ship the subscription what are the be thinking something in the.
A decline.
If I kind of something in the mid to high single digits for the fourth quarter and interest based on October November. So far would you expect kind of the <unk> about the same or perhaps a little bit of improvement.
So we were about negative five in the fourth quarter.
And you've identified the acquisition the 3 million IPO asked the negative 2.5 million of.
Going forward.
It depends on economic activity, if there were no cove it away from we believe we would be.
High single digit like we were heading into the <unk> and our acquisitions are blending us towards the higher growth profile over time.
But.
I really it all depends on acquisition activity to do we improve from here or.
Do we go backwards from here with shutdowns, that's that's the big variable for us.
That's fair that's fair and then just in terms of the the trailing acquisitions on the acquisition for the seven DLT on since the end of June.
Can you give us kind of a range of of expected acquired revenue.
For the fiscal first quarter.
Well, if you take our I think you know the.
Start dates of the acquisitions and if you take on our aggregate purchase prices and divide by 10 and Weve been paying.
The <unk>, the higher and higher.
Towards the high end of our range recently, because they've all been software acquisitions.
But anyway for just abide by 10.
And then for revenues you can multiply times too because most of the software companies have.
Mark margins close to 50 per cent with.
With the exception of image soft twitches 20 per cent and so I think you can calculate your way there.
All right I'll do that and and run it through the amount of thank you.
Once again, if you would like to ask the question the signal by pressing star one on your telephone keypad.
Well now take our next question from Josh Beck of Keybanc.
Hey, Thanks for taking the question you know maybe just one for you Greg I just kind of curious we have seen some stability is as a as I just mentioned by clay in this kind of 80% you know call. It [laughter] rebound so [laughter].
The strategically is the play book.
Pretty much they'd be where it was pre killed the or just curious for that that stuff. The fuse you know maybe.
Free oriented the initial fear there just would be curious to get a shot.
I yeah. So on the team has performed amazing on the last eight months through this crazy environment.
And we have given us an opportunity to invest some more and our marketing efforts our sales efforts Uh huh.
We are doing some enhancements to our payments platforms that we have two of combining those two the more and aligned with each other.
The ice visa performed exceedingly well I would just where the there they are kind of I.
And verticals that had an effect of a little bit.
It's the the game plan really hadn't changed at the the public sector or people have been amazing on it.
M&A has been on fire at Ricks kind of our Golden Goose I when it comes to that the on a regular basis.
And then adding any sauce, which I you know it is a major deal for us that we're overly excited about.
You know, Josh if if if things get back to normal.
Okay.
It's going to the insane its its going to the incredible.
What we had the added we're just not seeing quite yet because either they won't install.
They delayed the install it.
You know I think that.
Some of the vaccine.
[music].
We're back on.
The bigger and better than ever.
Okay, good to hear it sounds like the.
The underlying the momentum is is the is really encouraging.
You know I I wanted the follow up on the maybe with the Rick on the other unified platform you kind of said you're going to do this this road show.
So I'm just kind of curious you know are you is the this mainly a road show about.
Given the awareness of getting new logos, just kind of curious what what some of the goals there are.
Yeah. So the road shows start in the spring, they're seven days currently.
They'll be people in the attendance at those shows the purpose is to show existing customers additional products. We've acquired since they came on as the customer.
And they'll be a sex a subset of people that will be new prospects and we'll be showing the entire suite of the U.P.O. do those public sector prospects.
We're very excited about it weve talked to on several groups and they're excited as well. So we think it's in the till the high and we will have representation of all of our products under public sector of each of those road shows.
Okay, good to hear and the the clay I just wanted to go back to your comment on the on how.
How we should think about seasonality obviously like you said this year is the.
Is the is the [laughter] hopefully.
Hopefully the huge anomaly or other.
Our lives, but the 2019 might be a better.
Framework I guess one of the question is with the 2019, which you know from what I remember kind of built up the.
Sequentially as we went into September certainly the I think I think education is kind of of part of that so are there any maybe.
The adjustments you know that we should be thinking about or is that a pretty good.
The best template I guess, the we have to pick about 21 at this point.
As I look at it it's a pretty good too.
I have a nine pains of pretty good framework and.
Really 2019, I look a lot of you know a lot of our years should look like 2019 or 2020 has been a real anomaly.
You know, having a very strong first half and then having kobe of hit a so I.
I just want to make sure you toss out 2020, when you're looking at all of this.
Okay. Okay that that makes sense I mean, just to clarify maybe your point on the vertical exposure is is that a bit of a snapshot.
Currently I mean, you know if there's certainly some verticals come back next year, because the vaccine the as well people are more cost for the could look a bit different it's just want to understand that.
Yeah, that's more of a forward run rate as we look at 21, that's kind of the way we see the verticals contributing.
Now if education comes back it would pop up of you know from it to a higher number.
And if the general economy comes back face to face comes back.
Retail restaurant might get a little bigger again, but in the in the credit if the current environment last for the remainder of the year. We think that's what it would look like.
Okay. That's really helpful. Thanks for it.
It appears there are no further questions at this time I would like to turn the call back to crank Daly for any closing comments.
Well. Thank you for your interest in attendance this morning.
And especially thanks to the my team what an incredible.
Job they've done in the last couple of quarters through this environment. So anyway, I, if you need us call elsewhere around the thank you I appreciate it.
This concludes today's conference. Thank you for your participation you may now disconnect.
[music] [noise].
HM.
[music] mm.
Hmm.
Hmm.
[music].
Oh.
[music].
[music].
[music].