Q4 2020 Paya Holdings Inc Earnings Call

Call at this time. All participants are in a listen-only mode. If anyone should require operators assistance, please press star then zero on your touchtone telephone a question-and-answer session will follow the formal presentation. As a reminder. This conference is being recorded. I would like to turn the conference over to mister Humphries head of investor relations. You may begin operation and good morning and welcome to the fourth quarter 2020 earnings conference call before we begin. Let me remind everyone that today's discussion will contain forward-looking statements based on our current assumptions expectations and beliefs including Financial Guidance the growth of Pious business our objectives and business strategies as well as other forward-looking statements.

Please refer to the disclosure at the end of the company's earnings, press release and form 8-k filed with the SEC today for information about forward-looking statements that will that will be made or discussed on a call all statements made today reflect our current expectations only and we undertake no obligation to update any statements to reflect the events that will occur after this call.

You can learn more about the specific risk factors that could cause actual results to differ materially from today's discussion in the risk factors section of the company's final prospectus and definitive proxy statement filed with the SEC on September 23rd, 2020 and in subsequent. Audit reports that the company files with the SEC also during the call. We will discuss certain non-gaap measures of our performance gaap to non-gaap financial reconciliation and supplemental financial information are provided in the earnings. Press release in the 8-k filed with the SEC. This call is also available your webcast. You can find all the information. I have just described on the 8th relations section of pipe as website.

Please note that we have posted a supplemental fourth quarter 2020 presentation to the investor relations section of our website.

Joining us on the call today are CEO Jeff hack and CFO Glen Julie following their prepared remarks. We will open the call to your questions with that. Let me turn the call over to Jeff.

Thank you, Matt and good morning everyone. Thank you for joining us today as we discuss our fourth-quarter and full-year financial results, which continue to highlight the powerful combination of initiated payments in our high-growth vertical and markets. I'm proud of what we've accomplished including the demonstrated resilient nature of our business despite the impacts faced this past year from the COVID-19 pandemic these accomplishments position us. Well as we focus on our growth initiatives to further expand our business in 2021 and Beyond let's begin with a few Hi-Life payment volume grew 15.7% in the fourth quarter to nine point two billion a notable acceleration as we exited the year as our proprietary ACH solution office, which was up 41% year-over-year continues to scale Revenue was up nearly 6% to 54 million and adjusted ebitda grew 17.6% to 4 a.m.

Point seven million additionally a joke.

ebitda margins expanded 280 basis points year-over-year to 27.2%

this growth and our momentum leading is driven by our five key pillars as we seek to extend our Market leadership in middle-market integrated payments.

As a reminder these pillars are one fundamental execution across our business to penetrating the installed base of our exceptional roster of software partners with three driving new software Partnerships or leveraging our proprietary solution and five pursuing strategic. M&a.

Furst fundamental execution in the business at the onset of the pandemic we were able to seamlessly transition our Workforce from the office to work from home by leveraging substantial technology Investments and strong operational discipline, which included rigorous pre pandemic planning and testing. We delivered Innovative new products and offerings such as in Hancock digital invoicing and quick-paced capabilities continued expansion of our suite of Erp Integrations and additional reporting and Self Service portal capabilities that allow our software partners and clients too easily adapt to a world where omni-channel payments became more necessary than ever as you've heard me say many times the quality of the end-to-end experience of capabilities is just as important as the capabilities themselves and this is a key differentiator for Pia and we weave it into everything we deliver

Combined with new Solutions, we provide an excellent service and support to our clients throughout the year while delivering the financial results. We just touched on and which Glenn will cover in more detail shortly June 2nd penetrating the installed base of our software Partners. We had record new boardings with our largest isv partners with notable strength in our be to be a non-profit vertical additionally in the fourth quarter. We saw growing production across our partners particularly in the Integrated Solutions segment. Our key partners are an attractive and markets and the remains significant whitespace in their installed base of software clients to enable payments and drive further growth.

Our next key pillar is driving new software Partnerships. We have some nice wins recently with companies such as Central Square agent 511 and the name is a great example of how our differentiated offering is resonating in the markets. We serve specifically as a Premiere SAS base billing platform in the B2B vertical Club looking for a partner who could provide a tailored integrated payments experience collaborative go-to-market strategy and Superior Service and support which allows you to focus on their core software or having these capabilities as a core element of our offering is a key component of what differentiates Pia in the market.

Next is leopard.

During our proprietary ACH solution. We posted record ACH volumes in the quarter which were up 41% over the prior year and up 21% Sequentially. This was a nice trip in by a large ACH win. In fact, the largest ACH went and Pius history with a conversion that was completed in the latter part of the fourth quarter. Furthermore. We saw record attached to the ACH in new Partnerships creating meaningful cross-selling opportunities offering a payment agnostic unified experience with a point of integration is a powerful different theater and we are confident that this will provide continued growth opportunities for Pia.

Lastly we're committed to executing strategic m&a our approach to m&a is the same as our approach to our organic channels. We manage a pipeline of strategic opportunities in a tracked event markets and support this with a dedicated and experienced team furthermore. We pride ourselves on having a deliberate and focused integration process post-acquisition month in October. We close an exciting new acquisition in the Municipal Court space called the payments group This is highly strategic as it expands our existing government and Market presence into new geographies broadens, our addressable Market into smaller municipalities, which are underserved by incumbent providers and rounds out our Municipal sweet by adding Court payments and other departments to our utilities tax capabilities.

As most of you know, this is a high-growth End Market driven by increased adoption of electronic payments while we don't need m&a to drive Pius growth. We are excited about our huge pipe line and ability to continue to execute strategic m&a with that. I'll turn the call over to Glenn to walk you through the financials in more detail as well as cover our outlook for 21 Glenn. Thanks Jeff. We are pleased to close out the year with strong financial performance as we saw accelerate accelerating volume Trends in the fourth quarter combined with favorable Redburn and even sell performance total payment volume in the fourth quarter was 9.2 billion an increase of 15.7% from the fourth quarter of 2019 growth was driven in large part by ACH with volume up 41% year-over-year and ACH transactions growing 19% year-over-year card volume growth accelerated in the quarter up 4% versus the prior month.

As a note of reference typically card volumes are down sequentially in Q4 versus Q3 given the lower number of business days in the quarter.

For the full-year payment volume was up 6% to 33.3 billion driven primarily by ACH volume growth of 21%

Total revenue in the quarter was $54 million an increase of nearly 6% versus last year in terms of our segments integrated payments. Revenue was thirty two point four million up 7% year-over-year payment services rep who was 21.6 Million up 4% year-over-year aided by ACH Revenue growth of up 13% year-over-year for the full year. Total revenue was up 1.3% to mm six million versus full year 2019 integrated payments. Revenue was up 2% year-over-year during Barbie to be and nonprofit verticals and payment services. Revenue was up to eighty three point five million gross profit for the quarter was 27.2 Million up 6% year-over-year and gross profit margin was 50.4% up twenty basis points versus prior year off Integrated Solutions gross profit of 17.3 million was up 9% and gross profit margin expanded a hundred and ten basis points versus prior year.

payment services gross profit of ten million was up to

Sent your rear and gross profit margin of 46.3% was down 80 basis points primarily driven by mix.

Justin even in the quarter was 14.7 Million up 17.6% over prior year adjusted ebitda. Margin expanded 280 basis points versus 2019 Dodge. This is a great reminder of the natural operating leverage inherent in our business as volumes continue to grow finely gaap. Net loss for the quarter was two point 1 million versus a loss of 5.8 million in the prior year adjusted net income was 10.4 million vs. 6.2 million and 2019 is important to note that given the recency of Pia becoming a public company. There were certain one thousand transaction and public company costs associated with our business combination regarding our balance sheet and statement of cash flows as of the end of the fourth quarter. We had twenty-four million dollars of cash and $229 of gross debt net cash provided by operating activities was five million dollars in the quarter and 21 million for the full year. Finally our shared count was 116. Yep.

A million shares outstanding inclusive of approximately 5.7 million earn-out shares that have not yet met issue and thresholds now, I'd like to wrap up by discussing our Outlook 4021 our expectations for 20 21 remain in line with what we previously communicated to the investor Community despite the continued impact that COVID-19 has had on the global economy.

We cannot forecast a length or duration of any lingering effects that COVID-19 may or may not have on the broader economy. But instead remain focused on what we can directly control and influence taking this together for full 20 21. We're targeting total revenue in a range of $234 billion to $242 billion gross margin in a range of 50.5% to 52% and adjusted ebitda in a range of 64 million to 68 million our performance against these targets may be influenced by the pace of global economic recovery and finally our Outlook assumes no further unanticipated impacts from the pandemic with that said, I'll turn the call back over to Jeff.

Thanks Glenn. As you can see our recent results in Outlook for 20 21 continues to demonstrate the power of integrated payments in our high-growth vertical and markets by focusing on and delivering against our growth initiatives. We see tremendous opportunity to continue to grow and scale our business lastly. I want to say thank you to all of our employees are partners with clients and shareholders for your continued support with that operator. We're ready to take questions.

Add a reminder to ask a question. You will need to press star one on your telephone to withdraw your question. Press the pound key. Please stand by while we compiled the Q&A roster.

Our first question comes in the line of Mark Palmer from btig. Your line is now open. Thank you. Good morning. I have a couple of questions. The first one has to do with ACH where you know, the company had a very strong quarter with regard to the 2021 Financial guidance. What are your expectations for a c h and twenty Twenty-One and where does that fit into the guidance?

Hey Mark, this is Glen. Thanks for the question. Yeah. No, I mean I think certainly a good quarter, you know, we started to see the benefit of a large partner win layering in we actually only saw that benefit in December. So it was the latter part of the quarter. So we're excited to get the the full benefit in q1, but ya know those mountains are layered in we're not going to you know, give you the exact amount for 2021 but that certainly is a a good part of our our growth for next year or this year. Sorry. And you know, we're excited about it and it's a an area that we've you know are already kind of brought into the business right when you think about that conversion that's occurred. So but certainly a huge portion of that growth rate for this year thinking just one more if if you could walk us through your thoughts on the Cadence wage.

Of 2021 with regard to seasonality the impact of COVID-19 and the earlier part of the year how you see the quarters playing out to add up to that 2021 guidance God. Yeah happy to this is Glen again. So a couple of things one. Yeah. I mean we are business day driven given our heavy be to be mixed right so not as much on the consumer side, I think of the doubt about that calendar month and if you're looking at business day calendar, you know q1 typically ends up being similar business days to like a Q4 and then Q2 and Q3 or typically the larger business days. So always something just to keep in my life and then from a ramping standpoint. Yeah. No certainly, you know Q1 will see some benefit from this, you know full conversion, but at the same time you don't have any kind of upload business days, so, you know, maybe slightly above where we are in Q4 and then ramping throughout the year and then when you think about kind of dog

Impact that we're getting in from some of these other partner wins. Those are also love, you know layering in as we go through the year. So there's definitely a you know, a rapping process that happened throughout the year off just one other point of reference on the the cost side, you know, we do have a full quarter of kind of the public company called layering it in the first quarter and there's some seasonal like payroll taxes in the third quarter that tend to be a little higher so we will probably see a higher slightly higher expense in the first quarter versus the fourth quarter due to those two things, but think of it for the year from that standpoint is kind of a gradual build, you know acceleration. When as these implementations continue later in we you know pricing actions which always help as well as those get layered in and then I think we were still you know with the macro-environment. We should stay steady steady continued Improvement. I would expect throughout the year.

Very helpful. Thanks very much.

Carat he's here. Line is now open. Yeah, thanks guys any high-level comments just on how some of the major vertical are kind of Performing and kind of are they I had a plan behind plan just due to the environment.

Yeah. Hey Mike happy to take a shower at that. This is Glen and then you know Jeff you can certainly chime in as well. I mean, you can see it in right industry mixed we did provide in the presentation that on our website off the updated vertical mix right which we provided, you know mid last year as well. So what you'll see in that is kind of a similar Trends we've been talking about need to be, you know, good year off from A1 stability. And then also just growth this year, you know as you think about COVID-19 and what we went through but then also coming out of COVID-19 it's been you know, a stronger vertical, you know, the non-profit and government and Utility side was also favorable this year. So you'd see some good Trends if you look at that chart from the the two different periods, you know good stability in bowls and then non-profit actually saw some acceleration and then we've talked about before Healthcare just was a little slower to to get back, you know, we continue to see Improvement there, but still slightly down on the year-over-year basis, so

That one's been if I were to call it a you know more challenging ones than that. Definitely been that vertical but the other three of the four large verticals we've seen good performances.

Got it. Got it. In terms of the m&a pipeline. How would you kind of characterize that today? I know you guys put a lot of time and effort into it. It's one of your five pillars sort of how does that look?

Hey Mike, this is Jeff. I'll I'll take that emanate pipeline looks very strong. So we are working range of opportunities and all various ages. And I think the reason for that my you know, is there a lot of great smaller businesses out there that really need to be part of a company like Pia to fulfil their potential, you know very much akin to the transactions you've seen as do today stewardship First Billing and tpg.

Great, great, and and maybe just last question you kind of called out rev agent 551 is is the sales invite for you guys getting new customer wins. Is that getting better at a pace you would have, you know kind of predicted four or five months ago. How was how was kind of the the new customer engagement going if you will? Yeah Mike, it's Jeff again. Great great question, you know I would say on the one hand wash folks and we've all observed. This has adapted to a virtual environment for almost everything. We do including the sales process. So, you know in some examples I think that in fact has accelerated progress and at the same time there are areas like key conferences and events, you know and other things that drive Todd.

Thank you for next question comes from the line of Mike. Grondahl for Northland.

And growth that are not.

Quite this effective. So it's it's not you know one or the other but it's a bit of both.

Got it. Okay. Thank you.

Thank you. Our next question comes in the line of Craig from your line is now open. Yeah, good morning. Thanks God. I was hoping you could break down if you didn't already. I'm sorry if I missed it, but the growth and the card and card volumes separating out the month old. I so business versus integrated cards if you wouldn't mind.

Yeah, thanks Greg. How are you? This is Glen. Yeah, so we're not breaking out card by segment. But what what we can tell you is kind of what's in the material sewn card volume for the quarter was up 4% So when you think about you know getting back to the revenue growth of the quarter you can think about that plus ACH transactions, which we also kind of reference in our earnings supplement above 19% So when you think about kind of the mix of our business from a revenue standpoint of Carver's ech the four percent in the nineteen percent of the the applicable figures to get you know, pretty close to that Revenue growth for the for the quarter but you know what I can say about card is and you know will continue to be you know, led by integrated. So when you think about the growth of one segment versus the other the integrated growth is going to be above that 4% and the payment services card growth would be below that number.

Okay. Thanks and a question about the healthcare vertical was the sluggishness in healthcare driven by distracted institutions obviously dealing with the pain Democrat rather than opportunity or was there something else to think about?

Yes Craig, it's it's Jeff. And please correct. I don't get it. Exactly. Right. Most of our Healthcare is tied to elective medical and you know, as you would imagine for obvious reasons folks are not consuming those services at the same levels.

You know given you know, the lingering effects of covet.

Okay, that's helpful. Thank you.

Thank you. Our next question comes from the line of Joseph vafi from canaccord. Your line is not open.

Hey guys, good results. Good morning. Just just interested to get your perspective on the sales process. Now being a public company versus I'll take left ear. Very change. Is that helped? You may be especially in larger deal activity and then

Good morning, you know, the first thing I would say is, you know, being a public company has been a very clear positive papaya as we continue to court and when bigger and better Partners, the level of visibility and transparency is provided to them about the strength of our business is very helpful to us. And the other thing that I would add Joe is that by and large our strategy isn't any different as a public company as as a private company, you know about birth and markets where we focus in the Middle Market and so in in that regard being public, you know is not much different and of course, it provides added flexibility for the inorganic for m&a portion of our strategy as well.

So so that makes sense and then just on that emanate strategy again it it feels like there's you know, there's there's a lot of chatter out there amongst other place here companies of year the more size and you know, perhaps similar go-to-market strategy as wondering, you know, you know, are you off, you know, have you looked at the competitive environment for m&a now versus you know, perhaps, you know earlier and and you know, maybe that now being a little bit more fun center and and and you know how the strategy changes how the lens changes how to funnel changes Etc. Thanks a lot.

Yeah, it's it's Jeff again Joe. You know, first of all our pipeline really comes in two flavors one our proprietary opportunities that we purchased in Yorkshire overtime. So those really are not any different today than they were before and then obviously there are competitive processes as well and there too. We feel very confident in our hand for the right opportunities for the right strategic fit where we can add the most value. We feel very good about our ability to do the work and be successful in those opportunities as well.

Thanks a lot.

Thank you. Our next question is from the line of Bob Napoli for William Blair. Your line is now open. Thank you. Good morning, Jeff in Glen and Matt. Are you there God it's just on the the the guidance for 20 21 and then just thinking longer-term as well. The Integrated Solutions versus the payment services segment. I think the the ACH revenue is is all in the payment services segment, correct? And what are your thoughts around the growth rates over the edge not only for 21 any color you could give would be helpful, but on over the next three to five years for growth by segment.

Yeah, no happy.

To take that so this is Glen. So yeah, the

the ACs revenue is in payment services. That is correct. And then as far as overall, you know guidance on on longer-term growth rates, you know, we're we've shared kind of low to mid teens as a fax line growth, but you know 20% plus on eBay and then when you think about how that breaks down by segment, you know integrated would be above that load a bit teens and payment services would be below that low to mid-teens.

Okay, and for 21?

and

so Twenty-One were not kind of breaking out segment guidance. But you know, I think you could still think about the same trends when you look at that overall business growth a great first a segment.

Okay, and I guess on the Eve it I mean you have some pretty good to eat that margin expansion expectations. I think over the next few years back to remain confident in that and are you able to invest in the business to the extent that you want to while still achieving those ebitda margin expansion targets?

Yeah, this is Glen. I'll take a shot at and I'm sure Jeff has some thoughts as well. But yeah, look, I think we feel very confident about the expansion, you know, we've made the investment in the business from technical, you know development standpoint cause our platforms. So, you know, we feel very confident there. You know, this year is a little bit unique with the public company cost layering in right? So, you know, we took some nice expansion happening even with that but that's really the the only thing tempering it this year really is that but we have a great team stood up. You know, we feel like we have the the resources to to Thursday and you know volume as I continued the later and it should you know healthy portion of that should be taken to drop down to the bottom line. So feel very good about that Jeff. I don't know if you have any comments.

Yeah, good morning, Bob for the question. The one thing I would add and you all have seen this before is we have steadily increased our margin while investing in the technology in sales in marketing in support. So we are very clear that we need to continue to nurture those we think that largely is reflected in the business. We operate today and you've heard me say before if I ever thought that was a place I needed to spend another dollar I would but we took very good about the natural inherent operating leverage and we've demonstrated it. I think very well today.

Thank you. Last question just on the Highlight the penetration at the installed base is the probably the single most important growth drives over the long-term. What is your expectations for revenue from installed customers going into a year versus new customers and what type of net revenue retention rate. Are you getting out of your integrated customers?

Yep.

Bob it's Jeff again, you know a couple of things in any given year most of the incremental Revenue will come from penetrating the base of the existing Partners, as you know, new software Partners layer on overtime and in some cases, they have multiple platforms. So you're even working your way through the platforms of a new age. So more of penetrating the base in the moment, but as you know, new partners are very important for the latter half of this year and for next year as well and took last part of your question the net revenue retention in the integrated segment is excellent. It's in the low 90s and it speaks to the power and durability and strength of hospitality Integrations. It's it's inherent in the business model and our execution against it.

Yeah, and this is Glen and just to clarify the retention side. Yeah, we're we're 93% we work for this past year on overall volume volume off. And then when you layer in you know pricing and other Revenue actions, you get to the you know, mid-to-high 90s from a revenue standpoint overall, you know across the business and then as you can imagine the integrated component is is better-performing than the the, you know, the payment services component, so that tends to be a little bit better as well. Thank you. Appreciate it.

Thank you. Our next question comes from the line of David togut from evicore. Isi. Your line is now open. Thank you. Good morning. Could you comment on the spread between page volume growth and revenue growth in the quarter given given the 41% volume growth in a c h what I'm really getting at is on a like-for-like basis are taking a you know, staying pretty similar year-over-year.

Yeah, no. Thanks for the question David. This is Glen happy to provide a little color there. Ya know we obviously look at this a lot in our business and yet if you look at the overall wage, take great math on the business, right you see compression rate, but what's within that is it's a c h spread right? So when we look at card spread it was actually up slightly year-over-year and then up sequentially pretty well, uh from Q3 to Q4. So, you know still let's call it solid to favorable spread dynamos on the card side. And then yeah HDH with our larger win and growth. You can see it right where which we don't really look at it as much a seats for every look at per transaction, which is still very healthy. But we've done is we've taken on a a partner that has some lower dollar transactions or I'm sorry hired a higher dollar transactions, but you know, we're getting you know still great Revenue left from it and we'll confirm.

this year, so we're not really concerned about that on the ACH side if it's the business model and what we're doing but that would be kind of the Dynamics that play for the for the quarter and really

As you look into this current year as well similar Dynamics work hard will be stable too often, you know ACH off from a top line or from a headline standpoint will show you know spread reduction. However, we're comfortable with it based off of fact that our revenue is is still growing and we have good visibility into it for acha. Hay. Hay que David, it's Jeff. Let me just add one thing which very important point is ACH growth in our middle-market verticals is is expanding the addressable. So it is not generally speaking displacing card volume. So if you're getting high volume, very profitable ACH business that is very good for the company notwithstanding an aggregate from wide Revenue versus volume number that may move down to to mix.

Understood and appreciate the appreciate the Insight on that just to follow up on earlier comments for 20 21 stable uptake rates on a like-for-like basis. Are you assuming any price increases in 2021? Yes. We are. This is Glen again. So there is some price assumption in our numbers for 21.

Got it. And then just a quick final question any call outs in terms of 2021 outlook on Revenue share is is that coming down year-over-year versus what you saw in 2020?

Yeah, this is Glen again. You know, I don't think we're going to be a specific to that exact line. But you see it's kind of embedded to some extent in our gross margin guidance, right which is you know, slightly off compared to where we are today. So we don't see any margin compression. So, you know, we should be stable too favorable from a gross margin perspective God. Thanks so much.

Thank you. Our next question comes from the line of Peter heckmann from Davidson. Your line is now open.

When you get on thanks for taking the question you had mentioned Central Square earlier in the call, which I believe was the municipal software provider that you had talked about in the fall about a month or more significant. Isv. Ramping up. Can you talk about the ramp schedule for that? And it would you expect that to be fully backed by maybe the end of this calendar year?

Yep, Peter, it's it's Jeff. We are very proud of that partnership. I think you all know. There are an industry leader in Municipal Erp. They to have many different platforms. So it's not a a, you know a single moment in time, but it's more of a gradual migration and expansion of the offering don't obviously provide specific guidance at the individual customer level, but we're very excited about the potential of this deal and we will be working, you know with our partner and grow it for a long time.

great, great and then

I've got you. Can you talk a little bit about the trends that you're seeing within ACH traditional a C H versus same day versus enhanced ACH and you know, how easy that mix changing within your business over time. Yeah, Peter Peter great question. You know. The first thing I would say is the most important thing around with the growth of a c h in our Market is that it is integrated ACH. That's the main value prop in terms of efficiency omni-channel experience back in reconciliation cost-savings Etc. The the specific timing of the funding and of course, we support all flavors of it are are really less significant in the middle markets, then it might be you know, if you were talking about a coffee shop trying to manage cash flow or something like that. So, you know our view is to support all payment methods and Alzheimer.

License and whatever way meets the needs of the given End Market.

Got it. Got it. Okay, and if I could just get one last one just in terms of the TPT acquisition in terms of that contribution the court or something along the lines of over two million. Maybe is what I was thinking. Is that a in the ballpark. Yeah, this is Glen. So for from a revenue standpoint only about a million dollars in the quarter. Got it. Okay. Thanks so much.

Thank you. Our next question comes from the line of John Davis from Raymond James. Your line is now open.

Hey, good morning guys. Just wanted to hit a little bit on the sequential acceleration from 3 to four Q. Obviously spuyten COVID-19 cases probably wait on your growth a little bit. But just you know, how material was a m a c h win. I think it would mean come on until December. So it was that the Big Driver of the you know, sequential Improvement volumes or any specific verticals to call out and then along those lines, you know, geared a Trends wage, you know, where's the inclement weather weather towards the end of February material and just how should we think about kind of one to growth rates off of 4th you

Yeah, look, I think you know we can we we do reference a year-over-year growth rates in the the presentation on our website. So you can certainly look at those in our queue for Segment breakdown Integrated Solutions was up 70% in the quarter. So it's still healthy there and that doesn't include right ACH so separate from the large ACS win. So we you know, so good acceleration in the fourth quarter, they're off and then yeah, certainly ACH Revenue, you know, we do reference up 13% in the quarter in the fourth quarter. So also good acceleration there and you know, I mentioned will continue to see some benefit from home that's you know conversion where we only saw actually partial benefit in Q4 in that ACH partner when on the December actually, so it should be a nice lift for a c h a n as well.

Okay, and then Jeff, maybe just talk a little bit about him and and maybe I'll ask a little differently if I were to look at your pipeline. What is the mix kind of my vertical or is there a specific vehicle that you're going after obviously tpg was nice and and public sector or government but are there any specific kind of needs or wants I mean does it make sense to go after an education business just made against a bit of flavor for the pipeline looks like by vertical.

Yeah, so the the pipeline is strong in each of the verticals and and to be honest with you. It's not quite as you know, scientific, you know, as you might describe we pursue opportunities in all of our corporate accounts and in the adjacent verticals, we're subverticals and obviously you've got to have a combination of you know, you know finding the opportunities and having willing sellers. So I wouldn't say that the rate the relative enthusiasm we pursue all of the sectors that make sense took us enthusiastically.

Okay, there's no specific product or you know that you maybe after just kind of opportunistic in the verticals that you're in and and I would assume that you would kind of keep it to the vehicles that you were. In fact, I don't have any interest in going outside and Snoop articles. So generally speaking to your question. Yes, you know in terms of working on adjacent verticals or by the way the subverticals for the verticals were in you know, we do work on both of those sides as well and tpg is a great example of that because obviously we are already strong in Municipal and utilities, but tpg brought us a much broader Market opportunity and proprietary product key that hung in a vertical already strong in

Okay. All right have to come you guys. Thanks.

Thank you. Our next question comes from the line of Bob Napoli. Your line is now open. All right, thank you for the follow-up question. Just wanted to take a little bit more into your largest vertical vertical to be goods and services and just any color you can give on you know, what's stronger. They're what who who how the competitive environment looks dead in the B2B space. Are you seeing any changes in what's most differentiated about Pia in the B2B vertical?

Yeah, happy to take you want to take a look. I think you know, I'm in a good place and get to be right when you think about um, we have a pretty diverse set of uh of businesses when you think about wholesalers Distributors manufacturers wage, you know contractors oems, you know, so it's it's a good mix and the of diversity of of an Merchant and then we've been fortunate to really have some strong part in that space as well that that are growing and really, you know has some great software offerings that were able to kind of piggyback and integrate with which is also helped us. So I think there's two things together are are helping us there and really will continue to help us as we continue, you know work with them and they they're having great Trends on the partners side, which ultimately is a wage.

For authn and their partner so both the macro environment.

And some really favorable Partners, I think contribute to that.

To take Bob it's jumping out at all. Just had two trucks Glen said the first is that many of our great Partners in B2B are acquisitive in the back on right so that presents a tremendous opportunity to us and to the other part of your question, you know about our competitive strength, you know, and I've said before having a great birthday and flexible Tech stack is of course essential but you need to add to that a great go to market that can be tailored and tuned working with the software partners and a great Technical and Operational Support model working hand-in-glove with the software partners and their end customers. So it's really those three things in unison that we think differentiate prior and has been helping us when bigger and better partners.

Great. Thank you. Appreciate it.

Thank you at this time. I'm showing no further questions. I would like to turn the call back over to Jeffrey hack for closing remarks.

Great. Thank you very much. Thanks everybody for joining us. So early on a Monday morning. We'll look forward to spending more time with you going forward and hope you have a great rest of your day. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.