Q3 2023 Usio Inc Earnings Call
Hello, and welcome to use your third quarter 'twenty to 'twenty three earnings conference call. All participants will be in listen only mode should you need assistance. Please you know a conference specialist by pressing the star key followed by zero.
After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your Touchtone phone to withdraw your question. Please press Star then two please note today's event is being recorded.
The conference over to your host today, Paul Manning. Please go ahead Sir.
Sure.
Thank you operator, and thank you everyone for joining our call today welcome to use yours third quarter fiscal 2023 conference call.
Earnings release, which we issued today after the market closed is available on our website at <unk> Dot com under the Investor Relations tab.
On this call today are Louis Hoch, our chairman and CEO, Tom Jewell Senior Vice President and Chief Financial Officer, Greg Carter Executive Vice President of payment acceptance and.
And Houston Frost Senior Vice President of card issuing.
Let me remind our listeners that certain statements made during the call today constitute forward looking statements made pursuant to the safe Harbor provisions of the private Securities Litigation Act of 1995 as amended such forward looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially.
From such statements.
These risks and uncertainties are described in our earnings press release and in our filings with the SEC.
Forward looking statements made today are as of the date of this call and we do not undertake any obligation to update these forward looking statements.
During today's call, we will refer to non-GAAP financial measures such as adjusted EBITDA or earnings release includes a reconciliation of adjusted EBITDA to GAAP operating income.
Management will provide prepared remarks, then we'll have a question and answer session. So let me start off with some highlights from this afternoon's release.
I am pleased to report another quarter of strong growth with revenue up 25% or.
Our 13th consecutive quarter of revenue growth.
We also are reiterating our guidance of 18% to 20% revenue growth for the year.
In our release, we announced a number of exciting developments across our entire organization.
This includes an investment in output solutions that should increase capacity by 50%.
Our largest ever quarter of prepaid card load volumes are strongest ever card pipeline and the expectation that volumes will start to grow again in the fourth quarter.
In addition, we continue to be in excellent financial condition with strong cash flow. This quarter in part supported by record interest income, which we expect will add over $1 million to our cash position over the second half of this year.
In total this has enabled us to add nearly $2 million of cash to our balance sheet over the first nine months of the year.
So at a time when many companies are forecasting as slowdowns in their business you feel continues to charge ahead now.
Now I will turn the call over to Lewis.
Thank you Paul and welcome everyone.
It's another quarter of strong growth.
Consequently.
I'm pleased to reiterate our guidance for revenue.
Be between 18 and 20% for the year.
Results once again reflect our diversified business strategy diversified in the markets, we serve and the payment channels that we offer.
This quarter results were led by a strong performance at prepaid where revenues were up.
And 97%.
As a sign of prepaid.
Growing momentum the third quarter was the first quarter in the company's history in which the volume loaded onto prepaid cards exceeded $100 million.
For the quarter prepaid continues to have solid growth.
Just in load volumes.
But in transactions process.
And perched purchased dollars process.
While residual revenues from expiring in card programs were certainly a contributor to our strong revenue growth.
Load volumes transactions and purchase dollars process were all generated from ongoing.
Yes.
Sequentially. These record amount provide a clear indication of the strength of our prepaid business beyond any reliance on unexpired cards.
He is still well discuss new accounts.
The strong growth with the long term corporate expense and disbursement clients, but let me quickly touch on one of the most one of his most significant accomplishments.
As recently announced we won our first state administered programs.
This is totally new.
A very large market opportunity before us so.
So we believe prepaid is building a solid foundation of reoccurring revenue programs as a solid base on which we can grow evidenced by the increasing low dollars.
Loaded dollars on the cards as a leading indicator of future revenues, creating either revenue from spend our revenue from spoilage.
Revenue and margins were up again.
But solutions this quarter as side Green and his team continue to utilize every ounce of available capacity.
For that reason, we're investing approximately $1 million of new technology at output solutions that should increase our capacity by 50%.
At the same time.
This should also increase.
Production and reduce costs.
This new system will increase our flexibility.
Including the ability to handle mail run data files, which is a key requirement for large projects, where you were previously less competitive.
Last quarter, we noted that we had hired as fees and print and mail sales executive so combining his contacts throughout the industry.
The expanded capacity will make us a formidable competitor for larger more lucrative programs.
Ultimately this should lead to what we believe will.
It won't be both a better top and bottom line.
We continue to expand our relationship with L. A county handling their check disbursements needs for fees and fines.
That were overpaid.
We're now 142000 letters and 27000 checks for La County, and the third quarter.
We also took on additional savings in the quarter handling their utility bill printing for.
For the quarter in total we sent out a record 900000 checks.
Developments in output continues to be representative of the transformation and the integration taking place across UCF.
Recently launched with a toll road customer.
Disbursement.
Bill by quite Cold bills.
The bills have a QR code that the recipient scans, which takes them to a payment portal built and operated by ECL.
There is strong interest among government government agencies, and utilities and the scan to pay options.
Not only is it easier to set up the and creating a more traditional customer portal.
Also seen us drive payments.
Okay.
We also continue to attract new accounts, which are completely electronics with no credit or mail service.
Accounts involve the creation of emails that are E mailed the customers and then directed to UCL manage payment portal.
This is obviously a higher margin business.
Turning the card payback continues to generate strong growth, 27% for the quarter as Greg will discuss its been a busy quarter of increasing penetration with existing Isps implementing new Isps and building a strong pipeline, including three significant new.
<unk> opportunities, which we are aggressively targeting.
And in Asia.
Total revenues were up on the strength of associated services, such as pin less debit and account required.
We expect this to be the last quarter in which volumes are below year ago levels. As this is the last year ago quarter that included meaningful Voyager volumes.
This in turn should help us improve overall segment.
Revenue growth and profitability.
Margins were up in the quarter due to this highly profitable revenue growth as well as due to spoilage revenues from our prepaid segment or.
Our business will always include some food spoilage from expiring.
Cards.
In the immediate term the majority has been generated on the New York City, Covid incentive program, which will be winding down further.
Coming quarters.
In the third quarter.
We did see an increase in our selling general and administrative expenses.
Many were onetime in nature.
We expect these expenses to trend down in the fourth quarter, but probably not to the levels. We experienced in the first and second quarter of the year having.
Having grow revenues, 25% over the first three quarters of the year costs are understandably up to support this rapid expansion.
Our goal is to keep the rate of overhead expense.
Growth below that of revenues.
In order to realize the significant operating leverage our business model can deliver.
And we expect to see that improve as we move forward.
The net result is an increase in operating income adjusted EBITDA.
EPS from a year ago, although each was down sequentially from the second quarter, which we called out on our last quarter conference call.
Cash was a good story as we generated nearly $750000 of cash over the last three months.
Some of that was the product of over 500000 in interest.
Interest income in the third quarter.
We anticipate another significant increase in interest income in the fourth quarter.
In summary, prepaid is positioned.
For the future with its high loads on cards.
Card is sitting on some of the.
Essentially largest new Isps in our history.
<unk> rebounding and we are increasing our capacity and output by 50% due to strong demand.
Another solid quarter with strong top line growth.
Internal investments to sustain that growth.
And improve operating leverage over time.
Consequently, as Paul noted we.
Reiterating our guidance for the year.
And now I'd like to turn over the call to Houston Frost.
Thank you Louis and thank you to everyone participating on our call. This afternoon.
As Louis noted prepaid had an exceptional quarter with strong revenue growth in our first ever quarter with over $100 million in card loads.
It is important to remember that card loads are forward looking metric providing a measurement.
Client.
Loaded bonds will generate interchange and transaction fee revenue over the ensuing months as well as inactivity fees and breakage, beginning 12 months after the loads occur.
As such our record Q3 card load results are particularly exciting, but the impact that could have on 2020 core revenue considering the roll off in activity and inactivity fees generated from vaccine incentive programs from 2021 and 2022.
Perhaps more importantly, the record load volumes demonstrate the cardio card issuing businesses continued growth and strength even in the complete absence of any pandemic related card programs.
Our client base is increasingly diverse.
Today six of our 10 largest clients our expense management or disbursement programs with private enterprises.
Equally important many of these are long term growing clients, we've been serving for years.
Among them are fintech, such as class wallet and movie pass, which we've mentioned on previous calls.
Well, our government clients are drawn to the transaction restrictions and control virtual cards, and our consumer choice offering.
In fact market appreciates, our ability to integrate our external authorization feature with their technology.
Our ability to offer technology that appeals to both government and private sector are essential in attracting new customers as well as retaining existing clients over the long term.
As these organizations grow or programs expand we are growing right alongside them.
We also continue to board new clients. Most recently, we won our first state administered program. This program actually rose from the recommendation of a very happy smaller government entity, you see a customer within the state.
We are extremely proud that the card issuing division continues to receive introductions like this as it illustrates the customer satisfaction on which we pride ourselves.
The steady stream of referral business also enables us to run a lean sales and marketing organization with the attendant benefits to our profitability.
Our success continues to be built on operational execution, the flexibility and capabilities of our proprietary processing platform and our relentless focus on the client relationship.
You can look to the future we will continue to focus on the increasing on increasing the diversity of our client base.
And the card programs, we support and continue to seek out opportunities that generate recurring revenue.
With that I'd like to turn the call over to Greg Carter.
Thank you Houston and good afternoon, everyone card revenues were up again with year over year growth in our paper business accelerating sequentially to 27% in the third quarter.
Dollars and transactions processed were up from a year ago with payback on target for three quarters of $1 billion of processing volume in what is shaping up to be a record year.
While the third quarter is typically a slower time this year, we on boarded a record number of new merchants from our existing ISP relationships up substantially compared to any previous quarters with an average of more than 100, new onboard some months compared to 60 recently.
Attribute the steady improvement to our business strategy, where we keep adding new Isps and they in turn continue to penetrate the account basis.
As our base of Isps growth. This is a natural result of our disciplined processes.
Even more exciting is the number of Isps that are mandating their users adopt our payback solution.
One example is a new fitness exercise practice management ISP, we recently implemented.
<unk> is rapidly transitioning all of their users from brain for you to UCL.
Once adopted by the entire client base <unk> could be one of our largest.
There has been a recent industry development that is providing an additional tailwind.
Coming much harder to become a registered paid back.
The requirements are much more stringent and many Isps simply don't have the experience or resources to justify building the necessary infrastructure themselves.
Consequently, this is making our payback as a service value proposition increasingly attractive to Isps, who want to monetize payments.
Lewis alluded to a number of large prospects in our pipeline, which we attribute to both our digital marketing.
Marketing efforts, but also in part due to these new complexities and challenges.
The third quarter is always a great time for prospecting as the boring part of sales involving a lot of spade work, but it's tough.
It's up to have a strong pipeline for the fourth quarter and on into the new year.
We attended several different conferences this quarter, especially in the lending industry.
Since we attended limb III 60, which is probably the biggest lending conference for the subprime and ultimate lending channels.
We are seeing increased activity in the tribal lending space, we've always been in that space, but we're becoming more visible and that is yielding new agreements directly with the tribes. It's a good market that contributes to ASC eight both.
Both ways both in funding and then servicing of the loans.
In the third quarter, we also extended the travel lending conference in California.
Ken was debit is also doing very well, it's a less expensive alternative credit card and it's becoming very popular with fintech lenders and loan Servicers.
Revenue growth in this product line has been outstanding we intend to capitalize on the momentum being created by its more widespread adoption.
So the third quarter can be characterized by strong growth in onboarding, new merchants driven by growth in our existing <unk> relationships and the recent implementation the other Isps and they've had an immediate impact we have a solid pipeline of new Isps in various stages of implementation. We are doing the spade work now to build our prospect pipeline for the few.
Sure.
I remain very optimistic for the balance of this year and for 2024 in general.
With that I'd like to conclude my remarks, and turn the call over to Tom Jewell, Our senior Vice President and Chief Financial Officer to discuss our financial results.
Thanks, Greg and welcome everyone. Thanks, again for joining our call today and for your interest in Ucs, Let me quickly provide some highlights around this quarters results before opening the call to questions revenues.
Revenues for the quarter were up 25% to $25 million driven by growth in all of our segments, especially prepay.
I also note that ACA revenues were up year over year and the quarter after being down in the first half of the year.
Output solutions was also up nearly double digits. Once again, while credit card revenues were up 5% as our payback business continues to grow at a faster rate than the wind down of our legacy traditional payment processing.
Gross profits were $4 $1 million and margins were up 170 basis points from the year ago quarter gross margin improvement reflects a higher contribution from breakage, and spoilage and better margins and output solutions gross profits and gross margins were down compared to the second quarter.
Lee due to a sequential decrease in prepaid profits and gross margins as our share of the New York City, Covid incentive breakage and spoilage step down yes.
As our share of New York City, breakage, and spoilage profits or sequentially reduced we expect prepaid profits and margins to contract further in the fourth quarter. Our long term strategy remains to manage strong growth in gross profit dollars, although potentially at lower margins.
Selling general and administrative costs were up from a year ago, reflecting increases in marketing and professional fees since some of the increase in the quarter was from nonrecurring expenses, we expect fourth quarter SG&A to trend lower.
As Lew stated over the long term, we expect to improve the operating leverage in our model by keeping the rate of overhead growth below that of revenues.
We reported an adjusted EBITDA loss of just under $100000, which was a $400000 improvement from the year ago quarter, although down from the last three quarters for.
For the quarter, we reported a net loss of $700000 or <unk>.
Per share, which was a big improvement over the net loss of $1 $8 million or <unk> <unk> per share a year ago, but again down sequentially.
non-GAAP adjusted operating cash flows as defined in our SEC filings was $2 4 million for the first nine months of the year.
Our cash position as of quarter end was seven 4 million or approximately $1 $7 million higher than at the beginning of the year.
A contributing factor was the over $500000 of interest income in the quarter and we expect another quarter of strong interest income in the fourth quarter.
Transitioning to year to date results for the first nine months of the year revenues were up 25% gross margin has expanded 290 basis points and SG&A was up just 7%.
From a profitability perspective, adjusted EBITDA was $2 1 million compared to a loss of $1 4 million in the first nine months of last year.
Again this reflects my previous comment about the significant improvement in profitability this year compared to last year.
As Louis noted, we expect to meet our revenue guidance for the year, but expect to see a slight slowdown in revenue growth and gross profit in the fourth quarter due to declining breakage and other items.
With that I will turn the call back to the operator to conduct our question and answer session.
Yes. Thank you at this time, we will begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
If you are using a speakerphone please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble the roster.
Yeah.
And the first question comes from Scott Buck with H C. Wainwright.
Hi, Good afternoon, guys. Thanks for taking my questions.
Was hoping to get a little bit more color on the new state.
Card program I guess, what I'm trying to figure out is whether or not there's an opportunity for this program to be renewed 12 months from now or if this is more of a one and done type deal.
Well, it's program that we're supporting.
Yes.
It's got a fixed amount of funds.
What I will say is that.
As of end of Q3 and was less than a third.
Employee.
So it's going to be deployed over time.
But it is a fixed amount of funds.
That being said.
Uh huh.
Obviously to continue that.
Uh huh.
Additional opportunities from other state programs like this.
So does that help with your question.
Yeah, I don't think about it.
Yes.
They have told us that theyre going to put out the $95 million on the cards.
Okay.
No that's helpful and I guess Lewis can you talk a little bit about the flow of funds I mean, I think it probably has a little something to do with the high level of interest income in the quarter, but do they give you all of that money upfront and you load it incrementally over time onto cards or how does that how does exactly does that work.
Yes.
Anytime we send the credit out.
At our company our customer base has just been this good phones before we initiate that credit so the cards are no different.
To date, they send this $80 million of the 95 billion.
And.
We're about $35 million has been loaded on the cards.
The rest of it sitting in our bank account.
Okay perfect.
That's great and then I wanted to ask you about our output solutions and the new capacity youre, bringing on when does that become available and kind of as a follow up or second piece of that have you guys lost business or turned away business due to the capacity constraints are under currently.
Yeah. So we are investing in a new machine will increase our capacity.
By 50% and output solutions has amazing piped.
Pipeline of business.
From internal sales and from cross selling across our divisions and we know that there is business out there that we can have right now we're running two shifts or 16 hours a day.
Could be filling up at the other shift if we could find people that work at night, but that's kind of been possible.
So we believe there is a lot of business for us to capture and.
We were able to get a bank loan.
Favorable one.
To purchase that equipment.
Okay, Great. That's all I had guys I appreciate the time thank you.
Thanks.
Thank you and the next question comes from Jon Hickman with Ladenburg.
Hi.
I have a couple of questions. The new machine is it smaller than the other one is that way, it's only 50%.
Not double.
No. It's this big John but it's thought.
A new printer.
A different way to fold in and serve.
Paper.
That will.
Some other folding into the existing.
Machines.
It also takes less labor.
Great. So we'll see some savings there.
But it just increases.
The speed of the overall process from the beginning of receiving the data file to the point, where it actually gets put into the postal service.
So it's not a printer it's a supplemental.
Improvement Okay. Thanks, and then can you elaborate on the onetime expenses, how much were one time expenses in the quarter.
Yes.
Okay.
Okay.
Yeah.
About $250000.
Yeah.
Okay.
Thanks, that's it for me.
Thanks, John.
Thank you and the next question comes from Michael Diana with Maxim Group.
Okay. Thank you.
Greg I think you referred to.
Somebody asked me not being large enough to be I think you used the word registered pretax.
Yes.
You can tell me the right rich.
Is that all about.
I'm not familiar with that.
Sure a registered payback is with the card brands themselves. So.
It's a level of diligence.
Capabilities that you have to display before you become a registered payback and what we offer is paid back as a service. So our Isps don't have to go through that.
<unk> review or that.
That process to become registered with the card brands themselves.
I see okay. So that's a competitive advantage.
Absolutely there is speed to market is it could be as much as two to two and a half years faster by using <unk>, rather than trying to embark upon that yourself as the icing.
Right, Okay, and you also mentioned fitness science.
Can you give us any more color on.
I mean, where that isn't being rolled out or are there you know in <unk>.
Customers actually use them.
Oh absolutely.
They have an excess of 300 merchants or facilities on online now.
The owner of that ISC.
Practice management software for for that industry.
They're going to require everyone to be using the payment component by the end of this year. The good news is when they went live most of there were a large part of their merchants went live with the processing capabilities of UCI. So we will see some additional uptick.
This month and then into December.
Beginning in January then all all existing.
Fitness studios and all net new will be using the payments solution powered by <unk>.
Okay great.
I think you mentioned tribal lending.
How do you interface with the with.
With that.
Okay.
Who exactly are you.
And providing services to them.
So theres really no middleman or something right, yes, there's really two components to that traditionally built the.
<unk> themselves are sovereign nations are their sovereign entities that use loan servicers.
As an intermediary for processing or issuing those loans, but most recently several tribes have taken that.
Net servicing capability upon themselves. So now we can deal directly with the driving that with a third party entity that is providing services to the Dod.
Yes.
Hopefully that's clear.
Okay great.
Alright, that's it for me thank you very much.
Jim.
Thank you and once again as a reminder, please press Star then one if you would like to ask a question.
And the next question comes from Gary first opinion with Barrington Research.
Hey, good afternoon, everyone.
Couple of questions.
First of all Greg you said the payback growth was up 27% is that processing volume or revenues.
Revenue.
Okay.
So I guess and I've always asked this question, but your card revenues are only up four 8% in the quarter.
Get payback.
It was.
Generation.
It was a really big Delta there.
<unk>.
What percentage of the card revenues are generated by Paypal, because it's got to be that that legacy portfolio keeps a training and that's what keeps us from really showing pretty strong revenue growth in your segment.
No Thats exactly correct I mean, we added an additional.
$45 million in processing volume through the first nine months of net new processing volume on the feedback platform and the legacy singular portfolio is trading faster than it has historically so.
Making up for that it's kind of we've got itself, where we've got process twice as much.
To show that growth curve.
But how much of the portfolio singular is less than.
There is a meaningful amount we have two legacy portfolios, one from pdfs and singular that's.
How about if you add those two up it's about 60% of our card business, but the.
The increase that we saw the $1 $1 million increase over the first nine months is 100% payback.
Okay.
So this is still going to be something that.
Is going to continue to impact the growth in card for quite some time.
At the macro level, that's correct I mean card in general we're not we're not selling into those portfolios in the longer we're doing our best to manage the attrition. So obviously the the.
The sales efforts are on new Isps.
<unk> exclusively.
Have you.
Have you given any effort you just thinking about selling those portfolios and then you just have a pure Paypal comparison there.
No we don't want to sell the portfolios.
The majority of those portfolio customers are integrated with us, which makes it a hard portfolio to sell.
And.
The portfolio is still generating quite a bit of revenue for us.
Okay and then.
I was writing down what you are saying did I hear you right that you're gaining.
A step down in gross margin in Q4.
Or a decline in gross profit in Q4, I couldn't I couldn't quite get that because you were talking about that prepaid.
Spoiler here is coming down.
It is definitely going to depend on what the mix is.
Product lines.
We will know that we're going to be paying you.
Sure.
The majority of the spoilage.
In the fourth quarter.
And first and second quarter of next year.
So we are anticipating that the quarter should look very similar to this quarter.
Okay.
So similar quarter and a step down in SG&A right.
Yes, yes.
Because we won't have as many onetime things as we had this quarter.
Okay.
And then.
With me with these state program that you signed up as a guaranteed income program or is that a unemployment program or what exactly is that Houston can you. Please elaborate.
The state of California, Good disaster relief, yes.
Funded.
Partly from federal funds from the U S.
With the state of California administering it.
And.
They told us that there is $95 million that'll go out cards.
We've only we've only loaded about $35 million today, So that program will continue for.
So the money is all done.
<unk>.
And the state of California that will probably add more money to us too.
So that would deal with things like fires earthquakes that they have out there that money would be.
Released at that position.
Net.
Yes.
From.
The floods that occurred so it was already a disaster has already occurred.
When people have to solve.
They apply over time.
As a whole so many disasters out there okay. So this dealt with the floods last year right.
Yes.
This business because of our success with L. A county.
Okay, great. Thank you.
Okay.
Thank you and the next question comes from Steve Wagner with integrity wealth advisors.
Hey, guys, great great work in the quarter and the year. So far just a quick follow up on the last gentlemen.
Sure.
Next quarter. It Louis I think you said that it's going.
Could it be similar very similar to this one for.
With the exception that there was one time charges won't be in there. So is that am I on.
Understanding that correct.
Yes, and interest income will be up dramatically. Okay. So on an adjusted EBITDA basis, we will have a profit because we.
We only had $100000 adjusted EBITDA loss.
In the quarter and so if the expenses are down and the interest is up.
That should be a really good look for us is am I reading that correctly.
I'm not going to provide guidance there, but let's just go with.
It's just simple math I guess, so I just wanted to make sure I heard it right the other.
Thing is congratulations on the state, whether it's onetime or not it's a good new market you mentioned it was a new market.
Can you talk about any other new markets that youre getting in and Youre looking at getting in any expansion of what youre going to be able to do especially after the $1 billion investment into the capacity.
Well with with.
Outputs machinery.
We're going to be able to have some technology.
Implemented that will allow us to take on larger print jobs that require each item in the envelope to be monitored we do some of that today, but we can't do it at a high volumes and there we're soon to be able to do it at high volumes.
We know that there is cross selling business out there.
We haven't got because we haven't tried to close it because we didn't have the capacity.
We.
Are hitting the ball out of the park with our jet production.
We've hit a new niche.
Bankruptcy distributions.
And last.
Last year, we created like a million checks all year for spectrum horizon.
AIG.
And.
Directv.
This year I think we're going to do over 3 million checks and for US the 900000 checks last quarter.
They give you idea the niche that were we're starting to develop with bankruptcy distributions does have some legs.
It is remarkable good work.
I guess the other question Paul It's alright.
Before I get to Paul.
Movie pass can you give us an update on that business.
Yes.
I can't give any specific metrics, but where we can.
We are continuing to see.
Current activity there.
We do know that there are kind of in the middle but another financing round I believe so.
We'll probably see additional marketing efforts and promotional efforts by moving fast.
Yeah.
Yeah, Ken can't really share much more beyond that.
Okay.
Can you share if you're generally pleased.
With the way things are progressing with them.
Okay.
We level.
Yes.
Transaction volumes continue to go up.
That's all I'm, asking because I know your.
Your profit percentages are much better.
With with.
We'll be past that.
With some of the alternatives.
So I guess you had a question I would have Paul for you as you look obviously, we're in a terrible.
Small cap.
Crow cap bear market, you guys are trading for well less than one time sales.
Ah you're generating cash what what are you hearing what what are what are investors, telling you as to.
What what they're looking for what they're waiting for.
In order to get more aggressive with.
With your stock with your company.
Well.
We've talked to funds all the time and you're aware of that and we've got a tunnel bridges, we do non deal Roadshows, we're definitely committed to educating these phones.
They're all they're all almost all of it we love the story.
The other ones that don't just don't have the capacity that understand the technology.
They admitted.
But.
No.
The investment decisions are the funds.
You know they all have different reasons why they.
Haven't pulled the trigger or they haven't increased their position.
We have seen some very positive activity.
Few films that we've been working with.
And hopefully our.
It's telling the story.
On a regular basis, we'll increase that activity.
And I would just add Steve that if a few of the funds.
Hey, just wanted to see us maybe execute for a couple more quarters and get into 2024.
So like Lewis well.
We're planting a lot of fees right now are meeting a lot of balls with school. So I'm excited about the pipeline of people that we're meeting with them that can that can pull the trigger.
Fantastic keep up the good work will be in touch soon have a good afternoon.
Thank you Steve.
Thank you and we have a follow up question I forget your question help me out with Barrington Research.
Yes, I just wanted to ask.
You say youre investing in marketing and sales.
It does pay back kind of its own dedicated sales force yet to go to Isps have you expanded that in a big way and where are you putting the sales muscle into the company.
Yes, we've always had a dedicated ISP or payback sales team, we still to this day. In addition to our proxy salesforce referral agents and referral partners. So.
They are quota bearing they are very active in the industry and they're exclusively targeting Isps, so our marketing support around that.
Generally marketing supports the entire enterprise all three business units.
The short answer to your question is by all means we have a dedicated sales force just for payback.
The largest sales force carry because we realize that payback is.
Our main growth engine.
And interesting enough is seasoned.
Industry salespeople.
To us because.
We have unique products and they know that there's a need for it.
Have you given any thought to extending the sales force into.
Going after.
Markets that may be the Isps are not going after or is that just not applicable.
Within the industry.
Well I mean, the return on our investment on the head Count obviously is maximizing we sign Isps that can bring hundreds if not thousands of merchants with one sale, but we don't ignore standalone certain enterprise opportunities as well. So we've got two individuals that kind of span.
Not only pay fact, but the acquiring ACTH side and they do go after the market so you're talking about so there.
H.
Single stand alone.
Processing merchants as well.
Gary that pipeline for Paypal.
It's bigger than it's ever been.
There's three deals in that pipeline.
We would call Mega deals.
Hopefully we were able to close some of those.
Well, yes, I mean.
If I'm reading this right, what you're saying is it's going to be very difficult.
Four.
Others to become a registered payback because of.
Regulations or whatever.
So there's going to be a a very natural lack of supply on the on the Paypal side for the market. So.
It should lead to much more frequent growth much more explosive growth for you guys versus what you had thought although you've had good growth overall, so that's why I bring it up.
Yes, you're reading it right, Gary I mean, the hurdle because the payback is.
Very largely financial but it is also technology and risk management, because when your payback you take 100% risk on all your traffic and so it's hard for copper.
Companies to qualify even though just that first metric and so you know.
And then as they got to have a bank sponsors.
Those banks are 10 minute.
And.
That's being around 25 years and generating cash.
It is very important.
Thank you.
Sure.
Thank you and this concludes our question and answer session as well as the call itself. Thank you. So much for attending today's presentation. You may now disconnect your lines.