Q3 2021 EngageSmart Inc Earnings Call
Some cases, we charge a fee per transaction, some as a percentage of volume or even a mix of both.
Today, our revenue split between the SMB and Enterprise segment is roughly 50 50 with strong net revenue retention north of 100%. Our revenue retention is the result of our ability to drive consumers to continue to adopt digital payments.
SMB retention also benefits from the continued adoption of add on products, including insurance claims processing telehealth and additional licenses for clinicians.
Our business is further characterized by best in class LTV to CAC returns across both segments that are fueled by our efficient and vertically tailored go to market strategy.
With that background onto the quarter.
We delivered strong third quarter results that continued to be fueled by rapid growth within our solution. Consolidated Q3 revenue was $55 5 million, representing an increase of 42% year over year and elevating our annualized revenue from $207 million in Q2 to 222.
In Q3.
Our growing customer base is a core driver of this growth on a year over year basis. Our total customer count has increased by approximately 22000 to 77000 total customers.
We expect this trend to carry on fueled by our continued success in our core markets.
Spansion of our product offerings as well as a new vertical expansion.
Given that nearly 60% of our revenue is transaction and usage base continued growth in the number of transactions processed by our solutions is another key driver of total revenue growth.
We saw a 40% year over year growth rate in the number of transactions processed by our solution with $28 6 million transactions in Q3, 2021 compared to $20 5 million in Q3 2020.
Turning to the business segments, our SMB segment continued to deliver outsized top line growth with revenue coming in at $28 2 million, reflecting year over year growth of 64%.
This was primarily driven by continued strength in one new customer adds to improved customer churn rates and three continued expansion within our existing customers as our add on services, including payment processing telehealth and licenses for additional clinicians are utilized.
Our enterprise segment also reported strong results and contributed $27 $3 million to our consolidated Q3 revenue.
This reflects year over year growth of 25% driven primarily by new customers that went live on our solutions in 2021 and also by continued growth from existing customers.
Our adjusted gross margins for Q3, 2021 continued to be stable at 77, 5% across the entire business compared to 79, 8% last year. The primary contributor to the margin change was from our Q1 2021 migration to a new telehealth backend provider.
While this change resulted in an increase to our cost of revenue it materially improved the quality of our telehealth offering and has resulted in continued additional telehealth subscription growth as well as strong customer retention.
We expect that overall telehealth costs will normalize as clinicians continue to utilize a hybrid telehealth and in person model, enabling us to improve margins over the long term.
Our cost of revenue includes costs for software hosting direct product costs customer support for all of our solutions and implementation for bringing new customers live within the enterprise segment.
Our sales and marketing expenses increased $6 $1 million year over year to $18 million as we continue to invest aggressively in new customer acquisition across both segments.
Most of our sales and marketing expenses are focused on driving new customer acquisition with a small amount of costs associated with driving upsell cross sell and retention activities, including driving customer adoption programs.
We expect our sales and marketing expenses to increase in terms of absolute dollars and as a percentage of revenue in the near term as we continue investing for growth.
Our R&D expenses increased $3 $6 million year over year to $8 9 million, primarily as a result of incremental engineering head count R&D costs, primarily consists of head count related expenses associated with new product development as well as maintaining and enhancing the ease of use of our existing solutions.
Costs associated with new products or significant improvements to product functionality are capitalized and amortized into the P&L and not included in these expenses.
Total net capitalized software on the balance sheet at the end of Q3 with $2 9 million.
We expect to continue increasing our investment in R&D to maintain product leadership for all of our solutions, especially in SMB, where we are consistently rolling out new products and rapidly innovating on our solution.
Our G&A costs increased $2 9 million from Q3 2020 to $8 3 million. This increase was primarily due to an increase in head count to support our transition to a public company, we expect G&A costs to decrease as a percentage of revenue after fully absorbing public company operating costs.
Our net loss increased to $8 3 million compared to a net loss of <unk> 5 million for the third quarter of 2020, reflecting investments in product development sales and marketing spend and costs associated with the transition to a public company.
Our adjusted EBITDA was $8 7 million for the quarter, representing 15, 6% margin compared to $8 9 million or 22, 8% margin in the third quarter of 2020.
During 2020, we experienced a meaningful improvement in profitability driven by our strong F&B revenue growth as well as a temporary slowdown in spending due to COVID-19.
We have since ramped up our investment spend given the opportunities we see in the marketplace and are investing heavily in product development and sales and marketing to drive revenue growth.
We are on pace to hire approximately 250 employees across the company in 2021, and these investments are expected to drive a carryover impact into 2022 that will normalize into 2023.
Moving to the balance sheet with respect to capitalization as of Q3 2021, we had $253 8 million in cash and cash equivalents up from $29 4 million at the end of December 2020, reflecting the capital raised from our initial public offering.
On September 27, 2021, we completed our IPO in which we issued and sold $13 6 million shares of common stock at a public offering price of $26 per share. This.
This included 600000 shares of common stock issued pursuant to the exercise in full of the over allotment option by our underwriters, we received $326 3 million in net proceeds after deducting underwriting discounts commissions and offering costs.
We also utilized $114 2 million to fully repay our debt.
As of September 32021, we had 161 6 million shares issued and outstanding.
Based on our results to date and current financial and macroeconomic trends, we are providing the following guidance regarding our financial performance for 2021.
We are raising our revenue guidance for the full year 2021 to be in the range of $211 5 million and $213 5 million or <unk>, 44% to 46% growth year over year.
As a reminder, we did benefit from Covid during the second half of 2020 with high demand for wellness practitioners and digital transactions are key growth drivers will continue to be new customer acquisition and continued adoption growth within our expanding customer base across all solutions.
Our adjusted EBITDA for the full year 2021 is expected to be in the range of $28 5 million to $30 million, which represents an adjusted EBIT margin of 13, 5% to 14, 1%.
As previously mentioned, our adjusted EBITDA includes costs associated with transitioning to a public company.
Looking ahead, we are excited about our incredible revenue durability, we have customer and vertical diversity with non cyclical growth dynamics on the back of better than 100% net revenue retention and a clear opportunity to drive revenue growth in the future I'll now turn the call back over to Bob for closing comments.
Thank you Cassandra thank you.
<unk> success will continue to be driven by three simple factors first our proven customer focused playbook driven by a players.
We set our priorities with the customer first.
These are simply groups of people and engage smart has highly aligned a players who create repeatable best practices for all of our solutions, we are committed to retaining developing and growing leadership at every level of the organization. This commitment is in service of our customers checking.
Checking product leadership as measured by adoption, our commitment to developing and enhancing our best in class SaaS solutions accelerates. Our go to market model. This commitment enables long term partnerships with customers powers, our high customer satisfaction levels and drive strong organic growth.
Customers don't want to regularly made system changes they want to work with someone who sets the bar and keeps them in front as measured by high adoption that's engage mark.
Third.
Our large market and runway.
The total addressable domestic market for our digital self service.
Our engagement in integrated payments is $28 billion.
We're in very early innings here and have captured less than 1% of market share and we have the best SaaS solutions in all of our verticals.
Summary, we are very excited about the future. We are focused on delighting, our customers growing our business and creating shareholder value, while making a positive impact in the world. We appreciate you joining us on this call to learn more.
Thank you very much Bob we will now take the questions. If anyone would like to register a question. Please press star followed by one on your telephone keypad.
If you would like to withdraw your question. Please press star followed by two and when preparing to ask a question. Please ensure you Amit Leslie.
Our first question comes from will Nance from Goldman Sachs.
Your line is open. Please go ahead.
Yeah.
Yeah.
Yes.
Hello will your line is open. Please go ahead.
Yes.
Yes.
Yeah.
We will move on to a second question.
Second question comes from Sterling Auty from Jpmorgan Sterling. Your line is open. Please go ahead.
Okay.
Alright, that's minor on for Sterling.
So just the.
SMB revenue grew to over 50% of total revenue really strong growth there.
Can you just talk a little bit more about the drivers on the assay side and then how this mix shift is it.
Effective sport before subscription and transaction revenue.
Sure.
I think I guess, taking the latter part of your question first the split between subscription revenue and transaction revenue has been pretty stable.
With 40% being subscription based and 60% transaction based.
Yes.
It will shift over time, I think a little bit more towards subscription, but we're talking a couple of points not a wholesale shift.
In terms of the SMB growth drivers.
We continue to see really strong net customer adds.
And great expansion in <unk> across the business.
And.
As you mentioned F&B hitting 50% of the overall total of our revenue.
That shift is a trend that we expect to continue so we continue to expect F&B to take up more of our total revenue over the next several years based on the growth profile of the business.
Yes.
Okay, Great and then just as a follow up for Westwood the transaction volume growth in the quarter was that mostly driven from new customer acquisitions or increase in transaction volume from existing customers.
Just given our larger install base, it's really going to be driven by by existing customers.
And then I would say Conversely on the new customer adds.
That's really fueling the subscription subscription growth.
Okay perfect makes sense. Thank you.
Thank you.
Okay.
Thank you very much. Our next question comes from Terry Tillman from Trust Securities. Terry. Your line is open. Please go ahead.
Yes.
Yes, Thanks for taking my questions Hi, Bob Cassandra first congratulations on the IPO and certainly congratulations on the results.
Cassandra just followed up on the last question I mean should we when you were.
The actual processing revenue and then the subscription <unk> or should we just plug in literally like 40% of 60% to get to the numbers for the free tier.
Couple of questions.
Sure Thanks, Terry and thanks for the for joining in on the congratulations.
For now those trends are stable on the on the 60 40. So I think that should get you kind of to where you need to be on subscription and transaction in terms of the breakouts.
Okay.
And when.
Talking about simple product.
Substantial impressive growth and a lot of that just really on the back of mental health or behavioral health.
That's been our strategy and you did call out I think maybe Bob earlier, these adjacencies kind of near term nearer actually.
Actionable adjacencies, so like oncology speech pathology.
What are you seeing in those kind of mirror to the core part of the business Adjacencies and how do they feel versus where you are with mental health. When you first brought that out I'm just trying to understand maybe kind of parallels there any observations there and I had a follow up.
Hey, Terry its Bob Thanks for thanks for being on good to hear your voice.
This is simple practice in.
In March of 2017, when that became part of engage smart it was literally almost entirely mental health.
Clinicians that we are using the solution.
Today, we have as many non mental health.
Customers as we did back in March of 2017 with.
Essentially the same growth rate that we had back then so we have so with our 10, new Theres nine.
Other markets increased including speech language pathologists, occupational therapists chiropractors, physical therapist, nutritionists dietitians and so forth that are driving very high growth outsized growth that looks very similar to what we had back in 2017 that translated into another 100.
Million.
<unk> of or went from $4 million, an IRR to over $100 million of.
And about four years. So we're very excited about the new markets that we're in and we have the playbook hopefully we can run the playbook better. The second time, then we ran it the first time. So I think we are.
Confident in our growth trajectory for those new markets I'm not sure if that answered your question, but that's my tried.
The double does definitely does.
Yes, So I follow your first statement was more of just a clarification. So I feel like I'm going to ask one more question and then I promise I'll stop or you can just hang up on me, but the next question just relates to it's nice to hear about more partners on that enterprise side, particularly around Invoiced cloud anyway to frame the opportunity and how quickly it could become actionable at the new system integrator that.
Oracle based as well as outside thank you.
Sure the they're actually already actionable because we've actually implemented those we've implemented new clients on those solutions and.
And once we've integrated with certain version of Oracle or SAP.
It's a rinse and repeat opportunity for us as we go out and find other larger enterprise style clients. So this is this is a move up market for for invoice cloud, primarily an enterprise to drive.
Higher revenue per client through London.
Attaining larger deals so yes those are done.
We continue to be aggressive about finding new partnerships and we will continue to March forward with both hunting and farming on on our partner base.
Okay.
That is very thank you Terry.
We now have will Nance from Goldman Sachs back on the line. So I think his line again and he can ask his question.
We'll make some money.
Hi can you hear me.
Hey will yes, how are you.
Great sorry about that I wasn't on mute I don't know what happened but.
Let me back on good afternoon nice results.
Can you guys, maybe talk about the customer acquisition environment on the civil practice side I think during this pandemic I think telehealth drove a lot of the tailwind in that business as we kind of get on the other side does it feel like we can kind of sustain these really elevated levels of growth and I know that you talked a little bit during the IPO about kind of broadening out the customer acquisition.
Funnel.
Broader audience for the free trials any color on how that's playing out any early signs of success there.
Sure sure to your point will.
In the very early part of the pandemic, we did see a surge in demand in terms of trials that ultimately convert into customers.
Later in 2020, we saw those trends stabilize and they've been.
Remarkably in line I would say.
Since then we have not seen.
And we've not seen trials decrease we've been investing behind them and to your point, we've been going after these new wellness verticals as well, where we're seeing really strong growth. So I think we're very encouraged by the performance and the trials and the ultimate conversion that we've been able to generate now call. It 18 months post pandemic.
Got it that sounds great and then maybe switching gears over to the enterprise side of the business.
Know that.
That's the business looked pretty good line of sight and revenue visibility you can maybe speak to just what pipelines look like in that business for kind of new client adds in.
Given the revenue visibility how are you kind of feeling about the growth trajectory exiting the year.
Yes.
Bob.
<unk>.
The pipeline is a top of funnel is actually quite robust for us and enterprise, where we brought on a lot of new alliances over the past 18 months as we built up that alliance team, we continue to invest in.
People first bringing on more and more in great strength in the talent side to continue to find sign and leverage partnerships to drive the top of funnel because most of our most of our business is driven by.
Alliances, where we integrate directly with the customer information system. So I think that we've got.
Strong inventory at the top of the funnel and proven processes to continue to push the inventory through the factory.
Got it sounds great looking forward to hear more about it in future quarters, Congrats on the first quarter basket.
Thanks, so much well good to hear you.
Okay.
Thank you we'll our next question comes from Scott Berg from Needham <unk> Scott. Your line is open. Please go ahead.
Okay.
Hi, Bob and Cassandra Congrats on the strong first quarter here and thanks for taking my questions.
I guess two here, we'll start with the growth investments that Andrew discussed in her pre scripted remarks, how should we think about the kind of how those are split up between the two different segments SMB and the enterprise should know if youre trying to lean in on one segment, maybe a little bit.
Thank you.
Sure.
Scott Thanks for the question and thanks for joining us today.
We are definitely investing very heavily on the SMB side with respect to the product.
And we are deploying more marketing spend this year certainly than in prior years. So I would say, we are probably rotating a little bit more towards towards the SMB side of the business as it relates to enterprise the investments Theyre, primarily in our go to market.
Area with <unk>.
Enterprise sales head count and also investing in the partnerships that Bob mentioned earlier.
Great helpful. And then from a follow up perspective in the enterprise segment, I know transaction processing, especially for your government customers.
On the invoice cloud side has been a little bit depressed at least historically has seen it and coverage of my other companies don't have exposure to those types of.
Payments or payment infrastructures and kind of where are we in normal normalizing from maybe what was a really solid environment in the first quarter of 2020 before the pandemic, obviously get into below us in the second quarter, how much should we kind of recovered any sort of transaction.
Thank you.
Thanks.
I think we certainly benefited from.
The.
The focus on digital payments and contactless payments in 2020 that happened during Covid. So I don't think we saw as much of a depression there if you will.
We've definitely seen really good strength in our business I think things are normalizing now, especially in the Gov segment of our enterprise and enterprise business.
And we're seeing a lot of revenue growth coming from new customers coming online.
Yes.
So all I have thanks for taking my questions.
Thank you thanks Scott.
Thank you very much Scott next question is from Bob Napoli with William Blair Your.
Your line is open. Please go ahead.
Got it thank you and good evening.
Let me add my congratulations Bob and Cassandra.
And nice start as a public company, you're going to see I appreciate it.
So I guess.
Good to talk to you.
Your LTV to CAC.
The ratios have been particularly impressive.
Especially in SMB, but.
Major ramping up growth of the business are they so those ratios too high.
He has the opportunity to.
Accelerate growth even further.
By bringing that ratio down slightly or is that.
Not.
Yes.
Yes that is that that is certainly a thought and you are right. We are in.
I guess, an enviable position with LTV CAC ratios that are quite high. So we are investing aggressively beyond where we were in 2020 in the first half of this year and you start to see those investments in Q3 in particular with respect to SMB and you will see that trend continue in Q4, as well where we're going.
To be investing more in new customer acquisition, and we will take down the rates slightly as a result in terms of LTV to CAC.
Thank you.
Obviously, SMB, but within enterprise, where do you see.
Even in new verticals or if you would what do you see the best opportunities to that.
To invest to increase investments again.
I mean, good color on the trends and Invoiced cloud health.
Hey, Danny glide.
Would be helpful as well.
Sure and enterprise yes.
And enterprise is really on.
On the enterprise sales side I think we're really just dipping our toe in the water on consumer finance and insurance. So those are good opportunities for us to invest to drive growth in the future.
Bob any color you'd add there I mean, one of the benefits of course of having four vertically oriented true SaaS solutions in the marketplace is that we.
Have the.
The diversity to meet when one might be a little down. Another one is up of course, we want them all to be driving outsized growth and ultimately that's where we intend to get them all.
<unk> had a bit of in 2020, we had a bit of a headwind as you know with our donor drive solution. Because it was focused on peer to peer that has rebounded nicely because they had pivoted to charity events.
I will say 20 for the enterprise healthcare is still a little bit hard to find to be able to get a lot of attention from many of those enterprise healthcare facilities, because theyre still dealing with the Covid pandemic and.
We need to obviously be patient with with our customers win while they're bringing back.
Themselves to post post pandemic times.
Which we hope is going to be over fairly fairly shortly.
The investments in invoice cloud have been made largely already in product, but I would agree with Cassandra that we're going to drive more and more investment in the go to market, beating the street.
Have a really strong inventory of prospects that we need to get after.
We're excited to bring bring more soldiers to the board to get after it.
Thank you and then just my last question.
With your strong balance sheet and you've done.
Some M&A in the past.
No.
So it can be acquisition was pretty good but how important case.
From here are you actively.
Actively looking and if so.
What what would be the strategy around your your M&A.
Yes, Bob So M&A I think is very important to us it will continue to be important to us. So we are investing there.
Haven't had nothing to announce in the near term for sure, but we intend to be acquisitive and blend our organic growth with inward inorganic growth as we move forward. So we're constantly looking we're active in.
Optimistic we're bringing some talent together here.
And I guess I would just add.
Right now kind of currently we're very focused on executing on our organic growth story and strategy.
Okay.
Great. Thank you appreciate it.
Thank you Bob next question comes from John Davis from Raymond James John Your line is open. Please go ahead.
Thanks, Good evening Babic, Sandra Sandra I think in your prepared remarks, you called out improved churn rates and I was just curious is that specific to either SMB or enterprise or both and then in regards to F&B, maybe some comments or color on net retention, how that's trending now that we're lapping kind of the.
The peak Covid bump that you got last year, just curious how that works.
Net revenue retention.
It's trending as we go into the back half of this year.
Sure John Thanks for the question.
On the so my comments regarding customer churn were certainly with respect to F&B, where we've seen really strong customer retention.
And that's really driven by the breadth of our solutions and having embedded telehealth.
In our product.
We've really seen customers.
React very well and have been incredibly impressed with the with the retention rates as a result.
As it relates to net revenue retention to your point, we saw a surge in net revenue retention last year things are normalizing on the SMB side.
Into the into the 120% range as we.
<unk> of them too.
Okay, Great and then just a little bit on the EBITDA margins. Obviously this quarter you had nice flow through the oxide.
The EBITDA, obviously I think the guide implies <unk> kind of goes back maybe a high single digit margin perspective.
Margin, but if we think about next year not looking for guidance, we only time, but just how do we think about it.
Potential upside is that's helpful. Bob are you going to reinvest in the business or is that something we can expect to kind of fall through to the bottom line. Just curious how you guys think about balancing growth and profitability as we go into 'twenty two and beyond.
Thanks for the question John our priority for sure it is.
Organic growth.
And driving that through investment in it so I would I would.
Again, not providing any guidance on it but I would expect us to.
Every attempt to to plow that debt.
EBITDA into drive growth.
Both segments.
Okay.
Okay. That's it for me thanks, guys.
Thank you.
Thank you very much gentlemen, our next question comes from Robyn <unk> from Deutsche Bank. Your line is open. Please go ahead.
Great. Thanks for taking my question and hats off to the team for a great start to being a public company. Just first on simple practice just looking at those adjacent markets. It's nice to see the growth there.
From a product capability perspective, I mean do you guys believe you guys have the right product in place to really accelerate growth. There and then just from a go to market like any sense of free to paid conversion for these adjacent markets compares to the core behavioral health market.
Thanks, Bob and good to hear your voice again, so the <unk>.
Simple practice solution.
It is.
In the past four and a half years it is gay.
Gained an enormous amount of functionality and a lot of add ons that we've invested in over time, including telehealth simple practice learning and lots of other things but.
One of the things that we did note from the very beginning is that most of this solution is applicable to other wellness markets.
And that with I mean, theres still effort. There there are always nuances if you consider that the.
A mental health professional has a different way of making notes and handling insurance claims and so forth than a physical therapist, who might need a cigna.
A significantly different method of documentation and notes.
Or sort of the nuances that we bring to the table for each of the verticals as we as each of the wellness markets as we move forward.
That said, we can move through them fairly quickly quickly and we are.
As I mentioned earlier were from behavioral health, we have already advanced into nine others, where we're quite active we may not have perfect fit yet and a few of them, but we have.
Plenty to gain a lot of traction while we're while we continue to work the roadmap to bring it to a perfect fit.
There is such a thing as perfect.
Got it that's helpful. And then maybe just flipping to the enterprise side. I mean, you guys have historically had very strong market presence both in government and utilities.
From a pipeline perspective, how is it shaping up for financial services insurance et cetera.
And how is the debt.
Particularly out of the pipeline the partnership pipeline progressing here.
That's an excellent.
Questions, we actually have been very successful, adding strong partnerships, we actually signed and announced I'm not sure. If it was this quarter or the previous quarter.
Okay.
Partnership with Guidewire, which is I believe the largest core core services provider in the.
The insurance business in the country, so extremely stoked about that that alliance and.
<unk> are already quite active on the other side of it with with prospects and signing so very.
Very optimistic on the financial services side.
Still early innings, there but.
High growth.
Well beyond the.
The lunatic fringe here, we've got.
Hundreds of customers there.
Great to hear if I could just sneak in one for Cassandra Justice as we head into <unk> and progress going forward any seasonality that we should think about just for the F&B and enterprise segment.
On the whole I would say no theres nothing huge as it relates to enterprise.
There is a little bit of seasonality with respect to the fourth quarter.
There are a lot of our tax Villiers tend to invoice and bill their customers. So we do see a heavier revenue quarters on a sequential basis, there, but otherwise revenue is pretty stable between between the quarters.
Thank you and congrats again.
Thanks.
Thank you very much Bevan. Our next question is from Ashwin <unk>.
Sure.
<unk> from Citi Ashwin. Your line is open. Please go ahead.
Okay.
Thank you.
Hi, Cassandra congratulations on the quarter.
Thanks Ashwin.
Yes.
Sure Yes.
My first question is with regards to just the 2022 setup I know youre not.
Necessarily providing an outlook or anything like that right now, but investors always start thinking about et cetera.
Heading into training into December and such so any any pointers with regards to.
Particularly on the enterprise side large client ramps, we should watch out for.
Sure.
In case with regards to the pricing initiative Theres any prep work that needs to be noted that on schedule with monarch.
Any anything that we need to be.
Watching out for.
As we lay out.
<unk>.
No I mean to your point, we will give more former formal and detailed guidance in February on 'twenty two.
I wouldn't say, there's any one particular thing that we're that we're worried about or that we should focus on in either segment.
We're expecting our strong growth to.
To continue.
Our growth drivers are really new customer acquisition and continuing to drive digital payment adoption across our entire customer base and we expect both those trends continue.
Understood and.
And then looking at the segment information.
EBITDA for enterprise.
Obviously is down year over year, EBITDA margin was down year over year because last year.
You had lower costs.
But is this current EBITDA margin level, a more normalized one that we should carry forward.
Or is there some kind of catch up.
And then any help on that.
Yes, yes no.
Youre picking up on exactly the right thing so from a comparison standpoint, we had a temporary pause in spending in 2020.
So that is not that that level of EBITDA was is not something that we should expect to continue and we've been investing very aggressively this year across both segments in terms of hiring.
Our head count is up over 40% on a year over year basis, though.
The EBIT margins that you see in enterprise today are more of a normalized level that you should anticipate to continue.
Great.
Thank you.
Thanks Ashwin.
Right.
Thank you very much ashwin.
Next question is from Josh Beck from Keybanc capital Josh. Your line is open. Please go ahead.
Hey, guys. This is matti on through Josh Thank.
And congrats on the quarter I wanted to add.
After the I saw that you called out Paypal and venmo.
In your remarks, and I was wondering if you've seen these types of wallets drive greater digital payments penetration and as these digital wallets are available across all of their vehicles.
Right. Thanks for the question, Yes, we are.
We are offering these we are we see a.
I would say a small uptick we've got we've.
Added Paypal too.
Hundreds of customers at this point, but only a couple of 100 and we've seen a marginal increase not material increase in adoption due to that but.
A little bit helps right.
When you are talking about payment transactions.
Super Helpful. And then for my follow up I was just wondering if you could characterize the sales pipeline that youre seeing for your invoice club business.
Okay.
Right and invoice cloud is largely driven through.
Partnerships and we've been very active in the partnership side. So we.
We have I think.
The exceptional top of funnel inventory too.
To drive growth.
And we continue to hire aggressively too I mean is.
Cassandra mentioned.
Our.
Tiring for engage Mark this year is north of 40%.
Which is pretty substantial but we feel like we're winning that war on talent here in adding we're expecting to add about 250 employees. In 2021, we started with around 550 in the beginning of the year. So.
Close to 45% growth in head count.
And that's what we're doing where we're investing for long term growth we believe that.
Getting we have the processes in place we have the sales engine well defined and we're just looking to put more feet on the street to continue to drive it to the inventory that we've already got.
Yes.
Yeah.
Awesome. Thanks again.
You bet. Thank you.
Thank you very much. This is all we have time for today on the Q&A session. So I'll hand back over to Bob <unk> for any closing comments.
Thank you and thank you for listening to our first earnings call as a publicly public company.
Thanks to our customers partners and our amazing almost 800 teammates and engaged mark for those that may have listened to you folks are continue to crush it and it's greatly appreciated just the last comment we are incredibly excited about the future our growth our $28 billion Tam.
And the.
The opportunities in front of us.
Thank you very much.
Okay.
Thank you everyone for joining today's call you may now disconnect your lines and have a lovely day.
Yeah.
[music].