Q1 2022 Paya Holdings Inc Earnings Call
Yeah.
Okay.
Good morning, ladies and gentlemen, and welcome to the Pie Your Holdings, Inc. First quarter earnings Conference call. At this time all participants are in a listen only mode. If anyone should require operator 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 call is being recorded I would now like to turn the conference over to Mr. Matt Humphreys.
Head of Investor Relations at <unk>, you may begin.
Good morning, and welcome to the <unk> first quarter 2020 earnings conference call before.
Before we begin let me remind everyone that discussion will contain forward looking statements based on our current assumptions expectations and beliefs.
Leading today's guidance growth.
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 releases when filed with the SEC yesterday for information about forward looking statements that.
Were discussed on this call.
All statements made today reflect our current expectations.
We undertake no obligation to update any statements to reflect events that occur after this call.
You can learn more about the specific risk factors that could cause our actual results to differ materially from today's discussion.
Factors section of the company's Form 10-K filed with the FCC in March 2022.
Subsequent periodic reports that the company files with the SEC.
Also during this call we will be discussing certain non-GAAP measures.
GAAP to non-GAAP financial reconciliations and supplemental financial information are provided in the earnings press release in the 8-K filed with the SEC.
This call is also available via webcast.
You can find all the information I've just described including the supplemental first quarter 2022 presentation on the Investor Relations section of pioneers website.
Joining us on the call today are CEO , Jeff <unk>.
CFO Glenn.
Following their prepared remarks, we'll open your call to your questions.
With that I'll now turn the call over to Jeff.
Thank you, Matt and good morning, everyone. Thanks for joining us today as we review pie as first quarter 2022 financial results and the efforts underway to further accelerate our growth.
At the conclusion of my remarks, Glenn will cover our detailed financial results and then we'll take questions.
<unk> reported strong financial results again, this quarter led by our integrated solutions segment, and our proprietary HTH offerings.
These two growth engines, which continued to capitalize on the secular shift in our market towards payment agnostic software led commerce represented nearly 80% of total pie of revenue in the quarter.
For some perspective four years ago integrated payments and ACTH represented just over two thirds of total revenue.
Our investments in technology product and people underpin focus growth objectives, which are all geared towards capitalizing on the digital transformation middle market companies continue to undertake.
Integrated solutions and ACTH performance through a variety of market cycles. It gives us high confidence in the ability to capture even stronger growth in the periods ahead.
In the first quarter payment volume grew 24% to nearly $12 billion driven by card volume growth of 15% and a C H volume growth of 32%.
Total revenue grew over 19% to 66 million with gross profit growing 19% to $34 8 million.
Adjusted EBITDA grew 11% to $16 4 million in line with our expectations as we ramped our planned investments in go to market and innovation efforts in the first quarter.
We are leveraging these incremental investments to accelerate growth in key areas that will allow us to continue to capture a strong share of a multi trillion dollar fast growing Tam I will provide some additional color on these initiatives by stepping through the lifecycle of new revenue.
First we have significantly expanded our marketing efforts while early days, we are already seeing a strong increase in our pipeline with both more qualified opportunities and importantly, larger opportunities, which dramatically improves program ROI.
In addition, the return of in person user conferences across all channels is providing an excellent opportunity for highly targeted and substantive dialogue with prospects.
Second we've added considerable support to our hunters through additional technical sales and customer success resources as well as sharper sales process discipline, bringing.
Bringing in these resources earlier in the sales process not only drives improved win rates, but also quicker speed to revenue and greatly improved client satisfaction.
In fact in the first quarter, we witnessed one of our fastest large partner implementations on record.
So the additional rigor conducted during our sales process.
Further we saw some great new wins this quarter across a variety of markets and verticals and our government vertical we added Stockton, California in Marietta, Georgia, both very large cities, which is a key focus for <unk> in.
In healthcare, we signed a new partnership with Opus, a leading behavioral health ISP and we signed remote landlord a growing property management IFC.
These new wins demonstrate our ability to drive results on the back of organic investments we make.
Third we continue to add resources to capitalize on the massive penetration opportunity with our existing partners. Most exciting here is that we have multiple levers to accelerate progress for both <unk> and our partners. Examples include our expanded vertically focused marketing capabilities, our client success talent.
Who help broaden partner offerings and end to end client experience and of course, our sales talent, who train our partner sales forces, thus significantly extending our reach.
The common thread in these three pillars is pie as continued ability to attract exceptional and proven talent to drive these growth initiatives as we've said consistently winning in these markets is a combination of great talent and great technology.
She leads me to an update on our technology innovation agenda.
Having laid a strong foundation for our multiyear investments in pilot connect we continually invest in innovative solutions and services to extend pies value proposition.
These efforts are a combination of additional tools and features as well as completely new offerings, which add value to our partners and clients. While also strategically expanding into new markets. One. Great example, here is continuous enhancements in our funding engine to support customized payout capabilities for our clients.
Expanding our integration library is a continuous part of these efforts, especially for our larger P to be partners across the axiomatic Sage and Quickbooks ecosystems.
Additional enhancements such as enhanced reporting solution and portal and UI upgrades add tangible value to our partners and enable them to grow and expand their business efficiently with market, leading support as they scale their businesses.
Finally, a recent transcribed partnership enables us to deliver a new accounts payable solution to clients, thus accelerating digital transformation for middle market businesses.
Plenty of payables commercially launches in Q2, and this AP module will allow clients to automate their AP workflows within a single unified portal integrated across a variety of accounting software solutions ERP applications and originating bank accounts.
Our initial go to market efforts for this solution is focused on our existing clients across our larger ERP partners with plans to FERC to their scale the offering as we progress through this year and next this is a prime opportunity to add additional value to the partners and clients. We work with every single day, while providing pie with another vector.
<unk> of revenue growth.
Simply said Pi is already a trusted and deeply integrated technology partner in a our and our partners are excited to extend these deep partnerships to the AP side.
We expect that the organic investments, we're making will enhance our attractive growth profile for years to come layering in further inorganic opportunities will serve to bolster this even further and remains a key component of our capital allocation strategy.
As we touched on last quarter, we acquired velocity in January and we couldnt be more pleased with the results thus far while small in size the technology and team from velocity are already adding strong value to pioneer, especially in our b to B focused ERP channel.
The additional capabilities and solutions. This acquisition provided expands our competitive positioning and will deliver accretive results for <unk> as we leverage the market leading solutions talent and client relationships that philosophy provides.
As you would expect we are very busy sourcing and conducting due diligence on a variety of deals across the markets, we serve and in some natural adjacencies our enthusiasm to acquire great businesses that can grow faster as part of Pi has not wavered in fact quite the opposite our strong balance sheet.
And great free cash flow generation gives us tremendous flexibility to act, where we see opportunity provided of course that they make sense strategically and financially all in we see attractive opportunities ahead to capitalize on inorganic opportunities and you should expect us to act on these without hesitation.
With that I'll turn it over to Glenn to walk you through the financials in a bit more detail Glen.
Thanks, Jeff and good morning, everyone.
<unk> financial results in the first quarter continue to showcase the powerful combination of our integrated payments and AC solutions as drivers of current and future company growth.
Total payment volume in the first quarter was $11 7 billion, an increase of 24% year over year led by card volume growth of 15% and ECH volume growth of 32%.
Our b to B and nonprofit verticals, where the larger drivers of volume growth this quarter with broad based strength in b to b, especially.
As a quick note Q1 seasonality typically results in lower sequential card volume versus Q4.
First quarter total revenue was $66 million growing over 19% versus last year.
Integrated solutions revenue was $41 5 million up 26% led by the strength in our b to B and non-profit verticals.
Payment services revenue was $24 5 million up 10% year over year with ACTH revenue growing 15%.
We continue to see strong attach rates of our proprietary ace each offerings with our new software partnerships.
Gross profit in the first quarter was $34 8 million up 19% with gross margin of 52, 7%, which was flat versus the prior year.
Integrated solutions gross profit of $21 5 million was up 18% with a 51, 8% gross margin.
Down versus the previous year, primarily driven by Paragon.
Payment services gross profit was $13 3 million up 21% with a 54% gross margin gross.
Gross margin in payment services expanded 580 basis points led by a combination of Acs group and partner mix.
Gross margin remained strong at nearly 60%.
Adjusted operating expenses were $18 4 million up year over year as expected as we ramped our growth investments in Q1 to expand and enhance our go to market strategies and product innovation combined with the incremental expenses related to Paragon.
Adjusted EBITDA in the quarter was $16 4 million up 11% versus the prior year and reflects the ramping of these organic investments in the quarter along with Paragon.
GAAP net income for the quarter was $2 2 million versus $1 million in the prior year with earnings per share of <unk>.
Adjusted net income for the quarter was 12 million with adjusted EPS of <unk> <unk> per share.
Net cash provided by operating activities was $4 million in the first quarter.
Our share count at the end of the first quarter was 132 1 million diluted shares outstanding inclusive of approximately $5 7 million earn out shares that have not yet issuance thresholds.
You can reference an illustrative walk through of our share count and our earnings presentation.
Regarding our balance sheet, we had $142 million in cash and $249 million of gross debt with a trailing net leverage ratio below one six times.
Turning to our full year guidance.
We continue to expect that revenue will fall within a range of 275 million to 283 billion.
Gross profit margin in a range of 51, 5% to 52% and adjusted EBITDA in a range of 72 million to $74 million.
That concludes my prepared remarks, I'll turn the call back over to Jeff to closeout, Jeff.
Thank you Glenn.
Hi is in a very strong position, both commercially and financially with a fantastic and diverse roster of partners across high growth non cyclical markets and verticals.
Add in our strong balance sheet and the ability to deliver on the back of our organic and inorganic investments you can see why we are excited to continue investing in our growth while delivering strong returns for our shareholders.
The results, we've delivered combined with our expectations for the future serve to further strengthen the excitement we have in our markets and our business.
With that operator, we're ready to take questions.
Thank you to ask a question you will need to press star one on your telephone to withdraw your question press the pound key our first question comes from John Davis with Raymond James Your line is open.
Hey, good morning, guys.
Just wanted to talk a little bit.
Jeff on your comments around M&A, it sounds like there's a little bit of a tone change here.
Just curious what's driving that are you seeing valuations come in just any comments there would be helpful.
Yeah, Good morning, John and thanks for the question.
So no tone change implied we.
We have been enthusiastic we continue to be enthusiastic about getting the right deals done at the right time, we like our pipeline I think implied in your question is is there a meaningful movement in valuation.
You know certainly some indications there, but I don't want to say, it's a wholesale sea change, but regardless, we feel like we will get good M&A done in the near term.
Okay.
That's helpful. And then just wanted to touch a little bit on transaction growth Ace age volumes consistently outpacing transaction growth. There. So it was what percentage of businesses now.
Now and just any color there would be helpful.
Yeah, Hey, John this is Glenn.
We actually provided a a supplement slide.
Slide in our materials that we released it's on slide 10.
<unk> now has about 15% of our revenue.
Yeah.
Okay.
And then last one.
For me I think although gross margins were down slightly.
We're I think a little bit better than myself and most.
Expected this year. So how should we think about the guidance implies that will come down a little bit from here. So just trying to help on the cadence of gross margins throughout the rest of the year.
Yeah.
This is Glenn again, yes, we were actually flat on a year over year basis in gross margin, which I.
I think we were pleased to see.
Look I think we probably are going to have gross margin probably look a little better this year than we initially thought we would.
Still think the range is appropriate for the full year, but yeah that would imply maybe not as strong as the first quarter, but maybe a little stronger than we thought going into the year, so but still at the end of the day that same range for the full year.
Okay I appreciate it guys.
Thank you. Our next question comes from Bob Napoli with William Blair. Your line is open.
Thank you good morning solid solid results.
Jeff what are you most excited about I guess as far as the ability to maintain.
To maintain and possibly accelerate organic growth and how do you feel about the macro.
Our environment today versus.
Three to six months ago.
Yeah, Good morning, Bob It's Jeff.
Great questions. So what I'm most excited about on organic growth.
He is our model of supporting middle market clients in our core verticals is really showing its strength I think we all know the changes that occurred during COVID-19, but I would tell you the level of engagement of prospects to fully digitize.
And and payment process is stronger than ever.
So what that means is more at bats, more time and attention from both prospects and existing partners to penetrate so I you know.
The research isn't out yet Bob and maybe you'll be the one to do it but.
But to us it feels like the Tam is growing even more quickly.
And that means more at bats, and more new business.
In terms of the macro I'll I'll, let Glenn add some color, but I would say in general the macro environment has been and continues to be very constructive and I would also remind folks how well we performed during the most challenging times over the last couple of years.
Boats, even better for what we do for our clients.
Thank you and very.
Very helpful. The AP prior a P. I guess do you focus more on they are historically and talked a bit about the transport relationship and more ATP what is kind of the roadmap of the game plan on a P.
This does that potentially double your Tam in this five year build out or whats.
Maybe some color on Pi is efforts in the AP space.
No Bob It's Jeff again, great question.
So the first thing and I and I mentioned this on the call is the most important thing to drive penetration and adoption on the AP side is the fact that we already have deep technical integrations with our partners and you guys have heard me say this time and again.
These are long term marriages they are not like a one time setup and when you have those deep technical partnerships the ability to move from the AAR side to the AP side is very powerful.
So so.
As I mentioned on the call we are starting with our largest existing partners because that makes sense given those deep technical partnerships that are in place in terms of what it produces over the next few years I would tell you that the opportunity is massive.
The pace of adoption and penetration is obviously impossible to gauge, but we are very pleased with.
Prospective client dialog, we are very pleased with how the joint offering is coming together and Youll hear us talking about this for a long time, it's gonna be a very important piece of this company over time.
Is that an area that I just sneak one last one in I guess that M&A might help accelerate.
Yeah.
So maybe it's Jeff again.
But what I would say is as we've said before three levers you have organic build you have partnerships and you have acquisition in this case, we found a great partner.
And we are very excited to continue to work on this big opportunity together.
Thank you I appreciate it.
Thank you Bob.
Thank you. Our next question comes from Peter Heckmann with D. A Davidson your line is open.
Yeah.
Hey, good morning, Thanks for taking my question congrats on the deal.
Relatively large metros are assigned in the public sector side.
That was an indication that the.
The partnership with that large municipal software vendor.
Are really getting going from a sales perspective, or where those sales that are related to that relationship.
Yes, good morning, Pete It's Jeff again, thanks for the question. So so yeah. The answer is yes.
We are very pleased.
To see continued progress both in terms of the municipals that we sign with technology partners and as you all know, particularly in the smaller end of the municipal segment, we do a lot of direct selling as well and the patterns and the themes in both categories are the same which is municipals.
Our digital transformation coming out of Covid is as strong as ever and we like our capabilities, we like our distribution both partner and direct and we expect to see this as a solid growth engine going forward.
That's good to hear and I know, it's a relatively small number but.
Acquired revenue.
In the quarter was that kind of in the $2 million to $3 million range.
Yes, it was about $3 million, so organic growth was around 11% for the quarter.
Okay.
Great and then the organic rate that's embedded in your guidance is still something in the kind of the low teens.
Yes, low double digits exactly.
Similar as we went through.
Quarter end last quarter.
That same organic growth rate is employed.
Great. Thank you.
Thank you. Our next question comes from Timothy Chiodo with Credit Suisse. Your line is open.
Okay.
Thanks, a lot for taking my question I know that probably doesn't necessarily break out volumes by segment, but could you maybe just talk about the general trends that you're seeing in volumes across those two and then if you're able to maybe specifically for integrated solutions can you just talk about talk about the take rate and how that's evolved over the last year or so.
Okay.
Yes, Tim this is Glenn happy to touch on that.
Related to the take rate we've seen stepping back for a second card, which is mostly integrated solutions. We did see a two basis point increase in card take rate on a year over year basis, and we're seeing that similar trend in integrated solutions on take rate and spread.
We're seeing continued modest increase.
Each year there.
Also we did not have a <unk>.
<unk> action in this quarter. It comes in because you guys are aware I think in the second quarter.
So we were pleased to see that car take rate go up in the quarter on a year over year basis.
Yes from that you can kind of tell from an implied perspective volume is.
Is growing so we were up on a year over year basis and integrated volume.
Larger driver of the card volume growth is there.
And you'll continue to see the more positive momentum there another piece of color I can give you tied to kind of segments as integrated solutions organic growth rate was around 15%, which is where are we thinking out of it settled in in that mid double digit area.
Overtime.
Okay, great very nice and apologies if I missed it was struggling a couple of things. This morning, but did you make any comments on what kind of inflation that youre seeing in some of your end markets and given your largely basis points based model that youll see some sort of a benefit from that those.
From the inflationary benefit.
Yeah, I don't have to do this is Glenn again look I think yes, we saw pretty decent bump as we exited last year right.
When you looked at last year's Q4, we were up I think 17% organically in the quarter.
Stepping back for a second that's how we approach the year that we'd still get nice.
This tailwind from inflation, but we were trying to be thoughtful and constructive and somewhat conservative in our guidance right to not get ahead of that and.
Make sure we're taking into account that growth may not occur that same level through the year.
As we exited the year.
So the answer is yes, we're still seeing a benefit benefit from it we still think and again, it's implied in our guidance. We will continue to get a benefit but maybe not throughout the year at the same heavy pace.
That we've seen in the past.
So the other piece of color I'd give you on April April looks to be a solid month from a volume perspective, so really no change in trend but.
But at the same time, we're not seeing an acceleration so I think pretty consistent with what others are seeing where.
Still good economic activity, there's still inflationary tailwind.
But maybe not at the same level as.
As we are running the last couple of quarters.
Looking back.
Great. Thank you Glenn I appreciate all that context.
Okay.
Thank you. Our next question comes from Andrew Jeffrey with tourists Securities. Your line is open.
Hi, good morning, everybody. Thanks for taking the question.
Jeff I'd like to hone in a little bit on.
The investments Youre, making I think you laid them out nicely.
I think part of the question is this year was the year where.
Investments are expected to ramp in and that's pressuring margin a little bit. So when we look out to next year and I'm asking you to guide but is it is it reasonable to expect that.
We should see a real benefit from those investments next year in terms of organic revenue growth and then potential scale because I think that's one of the things. The street's really looking for is it is it thinks about the multiple on your stock.
Yeah.
Good morning, Andrew This is Jeff Thanks for the question.
I would say a couple of things one I want to remind folks that when you're making capital allocation and investment decisions, you're always looking across organic and inorganic initiatives and one of the things that we said last quarter is and this ties back to a question earlier in the call.
If some things are simply better to build than to buy then that is a good decision even if it takes a bit longer. So we stand behind that we think that is a good decision.
In terms of answering your question directly.
These investments are.
From our vantage point high conviction investments.
We obviously were very thoughtful about the decision to accelerate our investments.
Early indications are that they are having their intended benefits, but as you. All know you cannot prove out the ROI on most investments in a few months.
But we like what we see in terms of leading indicators and in terms of what it should do to the business next year. It's exactly what you just said if the rois on investment in our business are very very high it's a little bit binary there either great or are there.
Not good so we feel very good about these incremental investments. They are there to help us scale. The business I think you guys know we have great operating leverage in the business and you should expect us as we get later in the year to share with all of you how that is impacting our performance.
And and that of course will inform next year's investment plans, but but suffice to say.
Very pleased with the decisions, we've taken and most importantly, with the execution of the incremental investing.
Okay, Yeah look forward to getting updates on on your progress there and then it sounds like one of the one of the bigger opportunities today for Pi will be <unk>.
Selling into your ISP partners back books can you help us sort of dimensionalize the opportunity there and how far.
Down the road you might be in terms of monetizing that that opportunity.
Yeah. Thank you Andrew it's Jeff again.
It's a great question, it's obviously hard to specifically quantify.
But I will give you guys kind of think easy math from our vantage point.
The penetration rates of partners run the gamut as you would expect newer partners less penetrated than larger partners.
But think of it this way our entire revenue base is effectively a basketball.
And so the way we think about it is that in general your opportunity is to double that penetration on average. So if you think about that that gives you a sense of the magnitude of the opportunity.
To do that and I will also remind you that we have done some terrific proprietary technology work to make those back book migrations more productive and faster and easier and in fact, we had a few significant larger partners in the first quarter that had.
Next I can't back book migrations to Pi and these are larger and chunkier than we have ever done before so I don't want to overstate the speed of that item because I think you guys know I always tried to be very measured on that.
But those technology capabilities, absolutely help unlock the size and the speed of penetrating these back books.
Okay, that's helpful or those VW wins.
They are.
Okay.
I appreciate it.
Thank you Andrew.
Thank you. Our next question comes from Josh Ziegler with Cantor Fitzgerald. Your line is open.
Hello, Good morning, nice to see such strong execution this quarter.
I'm curious are you experiencing higher ticket sizes across end market verticals are there specific industries that are experiencing more significant inflationary tailwind.
Yeah.
Hey, Josh this is Glenn.
Yeah look I think Youre correct in average ticket has gone up.
So it's definitely been a benefit for us.
Kind of see it in that first page of our presentation as it's trended overtime in the disclosure we put on that page.
And yeah look I think it's pretty widespread when you tend to see probably more of a lift in the <unk> side.
That's where I think.
We definitely see it maybe it's a little more lagging on the government side and the not for profit side, but I think those still see good price.
Come through over time, as well, but <unk> is the one that probably moves.
Sooner in the cycle, and where you see probably the most lift.
Excellent. Thank you very much and your adjusted EBITDA margin guidance implies improvement throughout the rest of the year can you walk us through how you expect <unk> to improve margin as we progress through the mine planning too.
Yes. It sounds it's just the seasonality in Q1 Q1, you can even look at last year and it's just a low point for us.
And revenue and adjusted EBITDA. So most of it is driven off that plus just the normalized growth that we see in the business where you see.
Our partner penetration side, some of the new wins as we layer those in some of the pricing initiatives that we do that all kind of comes in over time over the years. So.
We feel good about kind of the spread is.
<unk> seen in the spread of revenue and EBITDA that we saw last year is a pretty good indicator.
I think our modeling in and how the street models it is pretty close.
When you think about how it jumps up each quarter.
Great. Thank you very much.
Mhm.
We have a question from James Faucette with Morgan Stanley . Your line is open.
Thanks, This is sandy BD on for James.
Just to dig in a little more you had called out to be a not for profit as particularly strong just from a verticals perspective.
Anything particular, there that you'd like to highlight just in terms of drivers whether it's for those two are really just across the business.
Yeah, Sandy and good morning, it's Jeff Thanks for the question.
A little color for me and then Glenn as well.
The strength in B to B I think you guys know this construction manufacturing durable goods distribution logistics field services, all of which you know I think are showing their strength and their growth and the quality of the partnerships and the franchise we have so broad.
Based in very attractive.
Not for profit is a continued source of strength I would also remind folks that our payer historically was very strong in faith based donation management.
The acquisition of Paragon added.
Campaign donation management factor to it so those to work side by side and as a reminder, when you are heading into a midterm cycle.
Campaign side obviously.
<unk>.
Shows a nice lift as you get through the year.
Got it thank you.
And then just on M&A I know we've spoken about this but anything in particular that you're targeting just within the pipeline.
Is that informed from a certain business function or vertical exposure.
Would just love a little bit of color there.
Yeah, no. Thank you Sandy so I would say no change in our priorities quick reminder for folks.
Anything that allows us to double click into an existing vertical through a sub vertical like we did with Paragon is obviously a direct hit.
We also continue in the pipeline to work on some very attractive adjacencies. So think of those as verticals that fit very closely alongside the existing verticals that we're in.
And that continues to be an area of focus and one that we are particularly enthusiastic about.
And then the other thing Sandy which is important is.
We're we like proprietary IP, and where talent I think everybody knows theres a lot of.
Of conversation around the job market. These days and I highlight the velocity acquisition as not only the acquisition of some incredible proprietary technology that we are already leveraging but it also brought some incredible talent to pie.
Helps us further accelerate our b to b initiatives. So tie that all together you can understand why we're enthusiastic.
And just anticipating the other part of the question is we continue to work deal opportunities of all sizes, so smaller deals need to be very strategic and attractive and accretive of course and larger deals take longer.
To get done, but as you guys know our capital position is incredibly strong and we are excited.
In terms of pursuing larger opportunities as well.
Perfect. Thank you.
Thank you.
Thank you. Our next question comes from Joseph <unk> with Canaccord. Your line is open.
Hey, guys. Good morning, Nice results most of my questions have been answered, but maybe just circle back around to your a P opportunity.
Great idea can you give us.
A feel for how penetrated perhaps other AP solution, maybe in your partner base no.
And how you see players go to market there.
Greenfield versus.
Perhaps where there's already an incumbent banks.
Yes, good morning, Joe It's Jeff that's a great question. So starting with the first point, which is how penetrated is the partner base, Yeah, I would characterize AP automation.
Is looking a lot like our automation, which is far more opportunity to penetrate than has already been put in place. So there's a very large tam obviously.
We are not the only people who find that opportunity attractive to go after it.
But relatively early innings, the other thing Joe which is important to remember is.
A P at the enterprise level, which is not where pi of place.
Is it a very different stage of evolution in the middle markets Middle market very early in terms of the penetration.
An opportunity and finally as I mentioned earlier in the call is the key here is is digitizing. The a P experience is a significant event or decision for a corporation. So your ability both technically and commercially to help them understand.
And how to do it.
Is it big lever in terms of capitalizing on it.
And basically maximizing speed to revenue so lots of opportunity we will be talking about this opportunity for years before anybody is asking about.
Ultimate maturity.
Great. Thanks, that's all I've got a nice result.
Thanks Chip.
Thank you we have a question from Mike Grondahl with one word securities. Your line is open.
Hey, Thanks, guys.
Real quick any updates to call out on the sales force and then secondly.
Of the stuff, we're doing on the tech investment side.
The number one thing there you're excited about or that we should be watching.
Good morning, Mike, It's Jeff again, both great questions. So in terms of the sales force.
I'm very pleased with the progress we've been making I will remind folks that the sales the structure of the sales force is a combination of Hunter should go after new partners farmers, who penetrate the base of existing partners and very importantly, customer success talent, which helps these middle market partner.
Yes.
<unk> stand how to Ah.
Implement the digital experience and to do it quickly and successfully so very pleased on all three we have invested in those teams enthusiastically that is a significant component as you know of the incremental investments we have made this year.
And I would tell you that the quality of execution and all of the things that I think you all know which is more qualified opportunities getting into the pipeline moving things through the pipeline more quickly.
I'm very.
Very pleased with the continued evolution and strained and.
And frankly maturity.
The sales process. So very pleased on that front in terms of technology investments and what we are most excited about.
That's a little harder, it's like asking which of your children you love the most.
We are very excited by the investments we are making in all of our core verticals. So I think we've talked before whether it's <unk>.
Flexible funding tailored to the use case that is very exciting.
May or may not sound exciting to all of you, but some of the refresh and tailored UI front ends is a huge source of client delight. So it doesn't necessarily sound as sexy to all of you but trust me. It is a huge factor in terms of partner.
Both existing and new partner satisfaction, and and finally, and we've said this to all of you before we built pyatt connect intentionally to bring us scale, but with the ability to tailor the experience to each of the vertical use cases, and so if I had to pick one thing I would say.
<unk> connect is showing its strength in the ability to in a scalable way tailor that experience to each vertical and that is a core element of the continued investments in the platform. Thanks.
Thanks for the questions Mike.
Thank you.
Thank you and I'm showing no other questions in the queue I'd like to turn the call back to Mr. Jeff <unk> for closing remarks.
Great. Thank you very much suffice to say, we are very pleased with our results and our progress with our growth initiatives. We thank everybody for joining us today and hope you have a great day.
This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.
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