Q4 2021 Priority Technology Holdings Inc Earnings Call
Thank you for standing by and welcome to priority technologies fourth quarter and full year 'twenty 'twenty. One earnings conference at this time all participants are in a listen only mode. After the speaker presentation. There will be a question and answer session to ask a question.
During the session you will need to press star one on your telephone.
Please be advised that today's conference is being recorded should you require any further assistance. Please press star zero.
I'd now like to hand, the call over to Chris Kirkman.
Good morning, and thank you for joining US with me today are Tom Priore, Chairman and Chief Executive Officer of priority Technology Holdings, and Mike Volkmer Chief Financial Officer.
Before we provide the prepared remarks, I would like to remind all participants that our comments today will include forward looking statements, which involve a number of risks and uncertainties that may cause actual results to differ materially from our forward looking statements.
The company undertakes no obligation to update or revise the forward looking statements whether as a result of new information future events or otherwise we provide a detailed discussion of the various risk factors in our SEC filings and we encourage you to review these filings.
Additionally, we may refer to non-GAAP measures, including but not limited to EBITDA and adjusted EBITDA during the call.
Reconciliations of our non-GAAP performance and liquidity measures to the appropriate GAAP measures can be found in our press release and SEC filings available in the investors section of our website.
With that I would like to now turn the call over to our chairman and CEO Tom Priore.
Thank you Chris.
And thanks to everyone for joining us for our fourth quarter and full year.
2021 earnings call.
As you saw in our earnings release, we continued our positive momentum with a strong fourth quarter.
Generating exceptional year over year revenue and profitability growth.
On a consolidated basis total revenue for the quarter increased 36% to $144 million.
Our topline strength drove a 1% increase in gross profit to $48 7 million.
And a roughly 81% improvement in adjusted EBITDA.
The $32 9 million.
Importantly.
These results were underpinned by a 320 basis point expansion in gross margin.
33, 8%.
Despite the drag from the reduction in our specialized merchant acquiring segment noted in our quarter three earnings call.
Our strong growth trends have continued through the first quarter as well.
For the year revenue increased 27% to $514 9 million gross profit grew 22% to $155 million and consolidated adjusted EBITDA rose, 37% to $96 3 million.
Mike will go into the segment level detail in our fourth quarter and full year results shortly.
Now prior to Mike's remarks, I'd like to spend our time to provide detail on our current positioning in the market and the powerful platform at priority it.
At this point continue to deliver market leading results.
The slide presentation is also available for download on the IR portion of our web site.
And is embedded in the wet castling.
During our earnings call earlier last year, we said.
2021 would be regarded as priorities year of transformation.
And one in which we realize our mission to emerge as a payments powerhouse with a single platform to collect store and send money.
That deliver differentiated products to our existing verticals.
I'm excited to say that our transformation has been a cheap.
Starting with slide three let's look at some of the high level that our priority and the strength of its performance through the recent years.
And how it is poised to perform in 2022.
Our native platform efficiently served the S M D D and enterprise payment verticals.
At scale.
Supporting over 240000 active merchant accounts.
More than 340000 active bank deposit accounts.
And propping total payment volume of over $90 billion with nearly 88% derived from integrated software products.
Over the past three years priority has produced annualized growth in revenue of 18% and.
And EBITDA.
A 31%.
Our rates, we expect to exceed in 2022 with revenue between 650 to 664 million and EBITDA.
$145 million to $150 million.
Importantly, driving our strong topline and bottom line growth.
Been accomplished with relatively low capex spending of approximately 8% of EBITDA.
Our operating efficiency is underscored by an already compelling gross profit margin that today is 62% of adjusted EBITDA and poised to decline.
Further.
This efficiency pulls through to free cash flow at an impressive 55% of adjusted EBITDA.
These results reflect the priority has been built with intention and built to last.
We believe will ultimately be rewarded as the market recognizes.
We are value and are valued at a meaningful discount to our peers, who perform at lower growth trajectories and possess less robust technology solutions.
Our high growth and outstanding operating margins are driven by the elegance of our native technology core.
As they say a picture is worth a thousand words.
I hope this depiction helps to codify the unique commerce engine, we had constructed.
It provides a single platform to collect store and send money combining robust payment functionality with banking as a service capability to monetize merchant networks, we touch.
Upon our priority passport platform, we deliver a whole suite of proprietary payments and banking solutions into the S. M. B D to b markets and provide enterprise partners the ability to embed payments and banking features.
Their core software offering.
Where legacy non digital operating platforms.
Manav ties their payment networks.
As evidenced from the number of merchants and deposit accounts, we support as well as the rate of growth. We produce our architecture is simple scalable and secure.
It supports all models for merchant acquiring including payment facilitation.
H D H checks and wire payment methods.
It has school commercial card issuing capabilities.
And we'll soon support consumer debit card issuing and global payment processing.
Importantly.
Its all available with a rigorous compliance capability that include nationwide money transmission licenses.
Today, our F&B solutions serve over.
150, reselling partners that board in average.
In excess of 4300, new merchants per month.
Over 80% of the revenue in this channel is from integrated or semi integrated software products.
Our flagship product <unk> merchant.
Currently supports over 240000 merchant accounts and.
And 62 billion.
And annual card processing volume.
Our fast growing BTB payments segment.
Is consistently winning accolades.
And new partner channels on the strength of C. P F.
As the recently announced Pittsboro and Premier health care partnerships demonstrate.
These two partners alone represent combined addressable payable spend of.
The 85 billion.
For us to harvest over the coming years.
And our contracted pipeline.
Continues to grow.
Simply stated priority B to B business line is poised for even greater acceleration from the 46 financial institutions, we support today.
And the strong adoption trends.
That have enrolled 75000 suppliers onto the platform to date.
Finally, our enterprise payment segment that provides embedded payments and banking solutions to modernize legacy platforms.
And accelerate software partner strategies to monetize payment is.
He is already supporting over 20 integrations.
Managing over 340000 deposit accounts and over half a billion in deposits.
This segment has consistently piling up wins as new partners recognized priority.
As the payments powerhouse with a unique platform built for the future of commerce.
We can leverage our technology for payments and banking features without the burden of dealing with payment operations risk management and compliance considerations.
At this point.
I'd like to hand over to Mike who will provide further insight.
Our performance during the quarter and the year, along with current trends in each business segment.
Thank you Tom and good morning, our MDA included in our Form 10-K provides a discussion of our comparative full year results link can be found on our website. My comments will focus mainly on the fourth quarter results.
Tom has already covered we had a strong fourth quarter financial performance with diversified growth across all business segments.
As I review the segment level contribution to these consolidated results. Please refer to the supplemental slides for further details on the numbers.
Revenue growth was strong across all segments S. M. B payments revenue of $121 $5 million increased 19, 7% driven by bank card dollar volume growth of 25.1% 22, 3% growth in transactions and two 3%.
Growth in average ticket.
Average merchant count of over 240000 in fourth quarter 2021 grew eight 4% over fourth quarter 'twenty 'twenty.
Our specialized merchant acquiring began renewed merchant growth in the quarter, which has continued into 2022.
Merchant boarding trends were strong during the year.
New monthly merchant boards average nearly 40 502021, consistent with the historical monthly average ranging from 4300 to 5000.
B to B payments revenue of $5 4 million increased 38, 5% driven by the revenue momentum we mentioned in our third quarter earnings call.
And C. P X the strong volume trends within existing customers and our growing sales pipeline conversion drove a 73, 3% growth rate.
And then managed services the new supplier enablement program drove a 28% growth rate.
Enterprise payments revenue of $17 1 million increased $16 4 million from point 7 million C. F. T. PE acquired in September 2021 drove this growth.
Gross profit of $48 7 million increased 49, 8%.
SMB gross profit of $30 5 million increased <unk>, 7%.
Specialized merchant acquiring gross profit declined 5.8 million due to the temporary pullback from mid year risk pairing actions now excluding that temporary decline SMB gross profit increased 26%.
B the gross profit of 2.6 million increased 30% and enterprise gross profit of $15 6 million increased $15.5 million from point 1 million.
Gross profit margin of 33, 8% increased 320 basis points.
The decline in SMB margin was driven by the temporary pullback in specialized while the results of enterprise overcame this decline and drove overall margin expansion.
Operating expenses of $35 8 million increased 36.6%.
Salaries and benefits of $12 million increased 22, 2% driven by the fan Sarah acquisition and head count growth.
SG&A of $6 2 million was relatively flat decreasing four 6% from $6 5 million.
And depreciation and amortization of six of $17 6 million increased 7.7 million from $9 9 million driven by the 2021 acquisitions.
Operating income of $12 9 million increased 108, 1%.
S M. B operating income of $10 5 million decreased $2 1 million due to the temporary gross profit decline of $5 8 million in specialized.
Excluding that decline SMB operating income increased $3 7 million.
B to be operating income of <unk> 5 million increased $1 million from a loss of <unk> 5 million in Q4, 'twenty 'twenty, reflecting higher gross profit and lower operating expenses.
And enterprise operating income of $5 2 million increased $5 million from <unk> 2 million in Q4 2020.
Yes.
Corporate expense of $3 3 million decreased $2 8 million the.
The decline reflects the impact of the timing of certain expenses and comparative fourth quarter incentive accruals.
Adjusted EBITDA of $32 9 million increased 88%, bringing full year 2021 adjusted EBITDA to $96 3 million.
An increase of 37%.
And in line with our full year guidance.
I'll just note that in other income of 7.8 million includes $7 $6 million net gain from the disposition of our investment in packs.
Now this gain is not included in our adjusted EBITDA.
Interest expense of $11 9 million increased $2 5 million higher debt levels, driven by our 2021 acquisition financing were only partially offset by lower borrowing rates.
Total debt of $631 9 million at December 31, 2021 was $249 9 million higher than $382 million at December 31, 2020.
During the quarter, we reduced debt by $16 6 million to $15 million revolver repayment and a $1.6 million scheduled amortization payment.
Net debt was reduced by $19 9 million with a $3 $3 million increase in unrestricted cash.
We are well below our total net leverage ratio covenant of six five times.
With a total net leverage ratio of approximately four three times at December 31st.
We will continue to apply free cash flow to reduce debt and leverage.
Senior preferred stock on our balance sheet of $210 2 million at December 31st is net of $23 5 million of unaccredited discounts and issuance costs.
The preferred dividend of $7 4 million in the quarter comprised of $3 4 million of cash and $4 million of pick the supplemental on our income statement with <unk> 8 million accretion of discounts and issuance costs.
Before turning the call back to Tom I'll review, our full year 2022 financial guidance.
Our outlook is strong and full year 2022 guidance is reflective of that.
Revenue is forecast to range between $6, 50, and $665 million or growth of 26% to 29% and adjusted EBITDA is forecast to range between $145 million to $150 million a growth of 51% to 56%.
Our results are forecast to strengthen in each successive quarter of 2022, reflecting the increasing build a positive trends in each of our segments.
We forecast our free cash flow conversion rate of approximately 50%, the resulting free cash flow of $72 million to $75 million will be applied to strategic investment and the unplanned nonrecurring expenses and net debt reduction.
Now I'd like to turn the call back over to Tom.
Thank you Mike.
I believe that our performance through Covid, our full year 2021 results and our outlook for 2020 to reflect the priority is it uniquely efficient payment platform.
Purpose built to monetize merchant networks for our partners and create value for our shareholders.
Simply put.
Priority has been meticulously curated over the past three years.
To be prepared for the future payments and the global opportunities represented in SMB.
<unk>.
And enterprise payment segments.
Our platform is efficiently built for scale as evidenced by the consistently low capex spend of approximately 8% of adjusted EBITDA needed to drive our high growth.
Our technological efficiency freeze our business lines to focus on driving revenue growth.
From our diversified portfolio of assets.
Distantly in the high teens annually.
With 60 plus percent adjusted EBITDA margins as a percentage of gross profit.
Importantly.
Our leadership continues to drive results.
Prove itself.
Overcoming challenges as we did through the Covid period.
And rapidly changing market environment.
As well as identifying opportunities ahead of its peers.
As evidenced by successes like the lucrative rent payments.
And we can pay X transaction.
Despite the difficult to reconcile peer valuation discount.
We are quite confident that combination of our scalable payments and banking infrastructure.
Yes, the dedicated distribution engines and market, leading product offerings will continue to drive winning results to our shareholders.
I want to thank our team at priority for another excellent quarter and year.
You are delivering on our mission to build innovative payment solutions.
Our modern commerce.
Operator, we'd now like to open the line for questions.
As 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 standby, while we compile the Q&A roster.
Our first question comes from the line of George <unk> of Cowen Your line is open.
Hey, guys. Good morning, and thanks for taking my my questions I guess I guess first question. Tom can you talk a little bit heading into 'twenty to kind of the progression in volume that you saw on the SMB side meeting any impact for a moment card on how maybe it's where he did as we kind of gotten to.
To to February .
And then also wanted to ask you the.
Pricing changes effected by the networks is that is that neutral or potentially an opportunity for a for an acquirer like yourselves.
Yeah. Thanks, George I appreciate the questions.
From a from a volume standpoint.
There was a.
Modest very modest pullback in Q4 related to omicron, but.
Oh, we've had such a robust.
Sales pipeline and adoption of our technology, we didn't see it.
Impact our overall trajectory.
Because some of the you know the the drop in I'll call. It the existing merchant base was was more than offset by you know.
What we've got going on on the new sales side.
But we definitely did see some same store drop.
The but it was in the call it the low.
Single percentage points.
I would characterize it.
Yeah.
Ah you're spot on with regards to the networks have not made any adjustments to interchange.
In the last few years because of the.
The pandemic environment.
They are pushing through one of the largest ever spring releases.
That that does present the opportunity.
For margin expansion.
Among processors and you know well.
Certainly would be looking for opportunities.
And you know.
That will be.
That presents some upside we feel to our to our estimates.
And that will start to flow through you know after the.
Gabriel spring release.
Okay. That's that's that's super helpful. Really appreciate the color there Tom and then Mike if if if we're looking at interest expense can you maybe help us in terms of modeling that I know that's a topic. That's obviously come up with a lot of your peers just.
Given the tightening cycle with deferred any any color you can kind of provide there were sort of rule of thumb to help us help us maybe model that line would be appreciate it yeah, well we have a base.
It's a LIBOR plus and Oh, we have a base LIBOR at 1%. So you know these modest interest rate increases wont affect our borrowing rate this year.
And we expect to you know we will have the revolver will be gone shortly.
We apply our available cash and free cash flow to that and that will be in a situation, where we will be building cash so our net debt will be going down.
But to take the take down any borrowings who would have to be the term loan and that would come out of the back end of the the amortization schedule. So we'll see.
Okay. Okay. That's that's helpful. Just last question on the free cash flow conversion kind of up to 50% is that how we should be thinking about it going forward or is there also sort of more wood to chop, there, but that could even go potentially higher.
Look out into the future that.
That will go higher as we as EBITDA grows right and because you know.
We will be a taxpayer this year as we turn profitable.
So that'll be a floor I would say is there's room to move that up and it will move up as time goes on.
Okay. Thank you.
Thank you again to ask a question. Please press star one on your Touchstone telephone again Thats Star one on your Touchtone telephone to ask a question.
Our next question comes from the line of Brian Ken Slinger of Alliance Global Partners. Your line is open.
Great. Thanks, so much nice quarter.
Congrats on the Premier Wen I'd love to dig into it a little bit can you talk about.
Specifically, how you see the network rolling out the on boarding of their members and you know what that long term opportunity is for you in terms of our payment volume.
Sure so.
As you May know Premier is one of the largest group purchasing organizations in the health care space.
And <unk>.
We've.
Been selected as an automated payables partner.
On the strength of CTX and the.
Oh, the elegance of that of that that product for automated payables.
So that that that.
That market alone has a north of $50 Bill.
Billion dollar addressable spend.
That will be in the process of harvesting.
It's a.
It's a it's a multi year effort as you can imagine.
We will be in the process of forming relationships with their sales force as well as and through that through those relationships with the.
With the financial leaders at irrespective organizations.
To adopt the solutions, we provide for monetizing supplier networks and you know what.
I think people are recognizing about our offering is theres a lot of folks out there doing virtual card.
But very very few that have the breadth.
<unk> solutions that we offer through not just virtual card, but physical plastic.
For purchases.
A C H tools with <unk>.
Dynamic discounting.
<unk> plus and also the ability to handle checks and other wire solutions on a single platform.
No.
It's really on the on the strength of the various modalities and the simplicity of our software to use it we're seeing the wins start to pile up and the you know the ones you've seen us recently.
Port.
Just two small examples of what we have in the pipeline.
Yes.
Is there any idea if ultimately premier well mandates. It's a you know it's customers adopt or its suppliers adopt.
On the payables platform overtime.
You know look I can't foresee that I think that's you know you're hard pressed to do that as a as a G. P O.
There the.
There are.
Organizationally within their network that have their own bank relationships right. So we're certainly competing against some of those bank treasury relationships and.
Evaluating.
What other.
Factors May go into the decision of a particular hospital group.
To use priority versus.
Some of the solutions they are bank may offer or or or another party that they are in touch with directly right. So it's it's a competitive landscape as you well know.
But you.
The fact is you got to be in it to win it and.
Getting deeper and deeper in it because we've got a product that other folks don't don't have.
And.
We're confident we'll.
Well, we'll put will put runners on base.
Now that were you know now that we're up to bat with premier and and other large net.
Networks that you now are recognizing this a solution they need and they want to they want the best people at it.
Okay, and then sorry, I'm going to focus a little bit more on this business because the valuations have been super high in the M&A space. So as we think about the payables business can you. We saw finally begin to ramp here it looks like in the quarter can you talk about how you see that playing out over the next 18.
18 months with some big metrics you gave us in terms of.
The number of suppliers, who are working with a number of financial institutions, just give us a sense of how we should expect that ramping over the near and long term.
Well, let me let me first have Mike comment on just how we're thinking about the the volume growth and how that will convert into revenue in the channel.
And then I can speak more specifically about.
Just kind of I'll call it supplier adoption in and.
Hum.
The buyer adoption as well in FY adoption, if you will right.
Yeah.
We'll have a little bit chunky as customers convert over to that so it's not going to be like a smooth growth rate, but we are certainly in a growth profile right now.
And.
And when Tom will probably talk about a couple of new partners that we have.
And there the volume that's available to US is enormous and it's just a matter of converting that over but we're certainly in double digit teen growth in this business conservatively speaking going forward this year.
The quarters moving on.
Yeah.
Uh huh.
Okay. When you say teen growth is that year over year. I mean, you just grew 73% year over year, So teen growth doesn't it doesn't.
Are you talking to each quarter sequentially. What are you talking about yes, yes, yes, okay.
Yeah, Brian we expect the C. P X growth to be I would say.
Very consistent if not exceed last years and the you know.
Mike commented towards this look these are as you might imagine right. When you you know.
Start to penetrate a large customer's spend file right. These are very chunky volume.
Adoptions right they come.
They come up.
And in large blocks.
So what we are intending to do and what Youll see from US going forward is as we see the conversion of that pipeline.
We will update the forecast.
Orderly.
So that you know we have a.
A high degree of of.
Certainty around the revenue.
Tribune of that converting pipeline.
But we do expect it to be very much in line.
On an annualized basis with what you saw last year.
If not.
If not a good bit higher.
Great.
Last one for me as I look at the <unk> partnership.
Sounded like a unique opportunity.
I guess on a bigger picture I'm wondering how you are what your strategy as you approach these large strategic partners.
You know that could.
Obviously, a bigger chunk to your business you know as as they adopt.
Yep.
Super Insightful question.
And look we've tried to to.
To explain that in the greatest kept the detail we can without speaking about our partners' business, but if you look at the enterprise segments and what it delivers.
Embedding payments and banking features into <unk>.
Not just software partners like MRI and <unk>.
Host of others that are presently integrating to our platform.
But what we describe as legacy.
Partners legacy businesses.
That are looking to modernize its so let's just use bring says a hypothetical example.
They're a leader in.
You know if you're if you think of them in a large part of their business as a cash clearing business.
Well.
We have an ability through banking as a service to provide a digital solution.
Two.
All of their customers.
For the movement of that cash if you will because we can credit it into an individual account and ledger it across all of their merchants and get that into customer accounts faster or at least credit to their account faster.
So there's a really exciting opportunity we think.
And you know we are we are moving in this direction.
Two.
Ignite these legacy platforms with digital banking and payment solutions.
Again, using you know brink's as a hypothetical example.
Incredible brand global.
They are they're certainly they've been very clear about their desire.
But I think they call it.
There are 2.0 strategy to create digital payment solutions, well you know.
I don't want to speak for Brink's, but you know so I'm going to do that I'm going to I'm going to do with a partner that gives me the depth and breadth of scale and the functionality that is turnkey where I don't have to do a lot of work to set up that.
That digital infrastructure within you know within my business to to not only move cash to put to start to move other.
<unk> of digital currency among my customer base.
And.
You don't capture new market share.
So.
We think you bring up ranks, we obviously have announced a partnership that we're implementing with our merchants to add cash.
Digital digitize cash if you will for us for our small merchants and you.
Well, you're going to work collaboratively with partners like.
Like that because Hum, we think theres a great fit for what we offer an end and the merchant network. They sit on to leverage combined solutions. So you know.
I think you're you know.
Youre pretty forward looking.
With the question and hopefully I've given you some insight as to how we're thinking about it but.
You know we're Hum we think that's just one such example.
You know the type of business, we can help.
To to accelerate with with the tools that we have.
Great. Thanks, so much.
Yeah.
Thank you. Our next question comes from Albert Rockville, AV LLC. Your line is open.
Great. Thanks, and thanks, Tom and thanks, Mike on the first question is on.
So does the I guess headwinds had changed as anything you could describe the strategy behind the new business line.
Okay.
Sure I'm, sorry, you broke up a little bit there, but if I can just make sure I understood. Your question accurately is that we've we kind of outlines new business segments and explain some of the logic around is that correct.
Exactly our strategy behind the alignment right.
Yeah, I mean look we've.
As I think everyone on the call news no knows we had segment we considered integrated partners.
That was software companies that we.
We typically owned.
So slightly different than you know kind of our core offering and F&B your b to B, but you know we're in a great for payments and.
And we're.
We're leveraging our tech.
We've harvested a few of those you know we had a successful MRI transaction that monetize rent payments and maintain them as now in an enterprise partner.
Using our our payments and banking solution and our payment facilitation solutions.
Hum.
<unk> was a company that we owned a minority stake in that repay them.
For $115 million, we helped them accelerating.
On the just the.
Strategy of that team. So it just made sense as we monetized a few of them to then.
You know for two factors one take a look at the other <unk>.
Solutions, we had that were in that segment and they were all being delivered to the SMB channel. So we felt it was cleaner to organize them under our distribution in the markets that we were selling into so.
E tab pay right E tab that goes after the.
The hospitality and.
And curbside.
Takeout segment for retail and hospitality.
But it's really an SMB solution suddenly pay right, which is really driven towards the.
Smaller provider, both in health care and home care.
Again, it's kind of an SMB focus so we reorganize that under our distribution models and the market segments, we we attack.
So our proprietary products.
That are being delivered into F N b and B to B.
<unk> was really quite simple the markets.
We thought of as commercial payments, we think its more expensive, but the market uses the nomenclature of BTB payments. So we just aligned with the market.
Nothing more complex than that.
But our enterprise segment as is frankly, where we see you know are.
A major future for for priority and we wanted to.
Segment that because those customers are really interfacing with us in a in a different way.
Whereas our proprietary products or leveraging.
Banking and payments core that priority passport offers.
Again, our own prop products. These are businesses that are embedding those features into their products or embedding our capabilities into their business infrastructure. Like. The example, we just talked to of a hypothetical example of brakes or something.
Like that.
So.
This was a much more logical framework to describe the business segments and.
It's been a I can tell you. This it's been a very successful way to.
So as you can see from the.
Volume revenue growth and pull through to bottom line.
That we've just adopted with customers. So it's a it's selling that's for sure and I think it does because it's simple it makes sense and.
You know we are.
We execute.
I see.
I just have a couple more questions as well.
Any sense that some international growth in the past I was wondering if you could provide an update on how you plan to move offshore.
Yeah look we those existing partners. We have you know everyone knows about MRI. So you know we talked about brakes right. They're a partner now they're international we have existing partnerships that are there.
They just need international solutions, so we're going to provide them.
We've already.
<unk> begun the process of creating the connections I think as we've spoken about in the past we have direct connections into all of the networks Mastercard Visa American Express and discover.
We have.
The ability to authorized transactions anywhere on the globe.
And now we're just connecting in our ability to settle those transactions.
In the local markets.
So this has always been on the on the on the path and now it's time to do it.
Great and then last question is given the current macroeconomic factors at play and placed in supply chain challenges and labor shortages and I'm wondering what kind of impact outside of your business.
Are you now.
I appreciate the question you know from a macroeconomic standpoint.
You know one of the things, we I think did very intelligently.
For someone to talk about workforce.
We weave.
Okay.
And in the acquisition of <unk>.
Have an incredible team in India.
That not only has a.
Very talented group in China, or India for technology and payment operations.
But also has a network that extends to other.
Countries within that region.
So our access to workforce outside the United States.
Enables us to be thoughtful about the way we build.
Our work.
Workforce, which I think as everyone can understand who's run a business.
Your people are your most expensive resource.
So.
There is a good bit of Av.
Uh huh.
Yeah.
I'll call it fintech inflation in personnel.
That.
Sure.
Able to reward our.
Great people wherever they are in and are on the globe.
To have a you know a a very efficient team.
To operate and build technology and you can kind of see that as I said in our gross profit margins right imagine business really efficiently. So that's one thing that hasn't I think impacted us as much as it has some some others.
From just a standpoint of inflation on consumer spending and other trends.
You know, it's a double edged sword it it kind of helps us.
In some regard, but because you know just things are more expensive people tend to finance them using their card.
Because they need more time to pay and that.
That is a benefit to us being in a card processing space.
The.
The downside to that is we're also you know you you see less spending right. So we havent, we havent seen that affect us as.
As yet, but again I think that's largely a result of.
The success of our products.
We sell so we're just seeing volume growth because our new sales continue to exceed.
Anyone who leaves our platform or goes out of business. So we don't expect.
That too.
<unk> waiver.
In fact, if anything we were optimistic we will.
We'll continue to accelerate.
You know the last thing I would comment on because obviously, it's been a big part of the news is just what's going on in the Ukraine.
Well look we don't have presently business that is disrupted by.
The events of Oh, the Ukraine.
We don't have any workforce there.
We don't have vendors that are meaningfully impacted.
We don't have <unk>.
<unk> volume and in Russia.
So so that hasn't had an impact to us, but I want to I want to make sure to note. It just given the question yet.
I asked.
The last thing I would note and look we think this is reason for optimism as well.
We have made no.
You know kind of mistake about it we've been very.
Clear about.
Well, we think is an important strategy to build early stage kind of early cycle assets and also counter cyclical assets.
We are a.
Major technology and solution provider.
To the consumer finance space.
That segment is seeing seeing incredible growth.
Because of consumer that now needs more financing and also needs you know as that tends to occur on the back end of that needs more assistance working out of difficult financial circumstances, and we have assets that will perform very well in those conditions.
And they're a natural hedge if you will to some of the core payments. So we're we feel great about the segments. We're in across the board and their growth prospects are.
Our R.
Our forecast and guidance reflect that.
And we're optimistic as we continue to perform through the year that you know that we can.
You know that we can pull through at an even faster rate than we have projected.
Yeah.
Okay. Thank you.
Thank you at this time I would like to turn the call back over to Tom Priore for closing remarks, Sir.
Alright, well. Thank you everyone for the time, you've affordable afforded us this morning to.
Learn about what your priority is headed.
Completion of.
Of a multi year transformation to be a single platform to collect store and send money.
That has a capability not just operate at scale, but but soon to operate.
Globally.
We're very excited about what the future holds for us we.
We hope you are as well and are appreciative of.
Of your.
Attention and support.
Hope everyone has a great day and enjoys a St Patrick's day.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
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Okay.
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