Q3 2023 BM Technologies Inc Earnings Call
Speaker 1: Ladies and gentlemen, this is the operator. Today's conference is scheduled to begin momentarily. Until that time, your lines again will be placed on a music hold. Thank you for your patience.
Ladies and gentlemen, this is the operator today's conference is scheduled to begin momentarily until that time your lines again will be placed on music hold thank you for your patience.
[music].
Yeah.
Okay.
Good afternoon, everyone and welcome to the B M technologies third quarter 2023 earnings call. Please note that this event is being recorded following management's prepared remarks, we will hold a question and answer session for those joining us on the webcast you can submit your question.
Speaker 1: Good afternoon, everyone, and welcome to the BM Technologies third quarter 2023 earnings call. Please note that this event is being recorded following management's prepared remarks. We will hold a question and answer session for those joining us on the webcast. You can submit your questions online where the management team can see them.
Online or the management team can see them.
Speaker 1: At this time, I'd like to turn the conference call over to Brian Preneveau, Investor Relations for BM Technologies. Brian , please go ahead.
At this time I'd like to turn the conference call over to Brian Plentiful Investor Relations for <unk> technologies, Brian. Please go ahead.
Speaker 2: Thank you, Operator, and good afternoon, everyone. Thank you for joining us for BM Technologies' third quarter earnings call. Before we begin, we would like to remind you that some of the statements we make today may be considered forward-looking. These forward-looking statements are subject to a number of risks and uncertainties that may cause actual performance to differ materially from what is currently anticipated.
Thank you operator, and good afternoon, everyone.
You for joining us for <unk> Technology's third quarter earnings call before we begin we would like to remind you that some of the statements. We make today may be considered forward looking these forward looking statements are subject to a number of risks and uncertainties that may cause actual performance to differ materially from what is currently anticipated.
Speaker 2: Please note that these forward looking statements speak only as of the date of this presentation, and we undertake no obligation to update these forward looking statements in light of new information, future events, except to the extent required by applicable.
Note that these forward looking statements speak only as of the date of this presentation and we undertake no obligation to update these forward looking statements in light of new information future events, except to the extent required by applicable securities laws.
Speaker 2: Please refer to our SEC filings, including our Form 10-K and 10-Qs for a more detailed description of the risk factors that may affect our result.
Please refer to our SEC filings, including our Form 10-K, and 10-Qs for a more detailed description of the risk factors that may affect our results.
Speaker 2: Copies may be obtained from the SEC or by visiting the investor relations section of our website.
Copies may be obtained from the SEC or by visiting the Investor Relations section of our website at this time I will turn the call over to Loveline to do VM technologies CEO propylene.
Speaker 2: At this time, I will turn the call over to Lavleen Sidhu, VM Technologies CEO . Lavleen?
Speaker 3: Thanks, Brian , and good afternoon, everyone. I am excited to be leading today's call along with Jim Dillinger, our CFO . Also present is Jamie Donahue, our president and chief technology officer.
Thanks, Brian and good afternoon, everyone I'm excited to be leading todays call along with Jim Bellinger our CFO.
So president is Jamie Donahue, our president and Chief Technology Officer.
Speaker 3: We will be discussing our third quarter results and also providing updates on our business.
We will be discussing our third quarter results and also providing updates on our business.
As we have mentioned on our previous calls this year. There is no denying it was a tough year not only for our company, but for the Fintech industry as a whole we navigated through unprecedented interest rate hikes that led to a sharp decline in a rate sensitive deposit base.
Speaker 3: As we have mentioned on our previous calls, this year, there is no denying it was a tough year, not only for our company, but for the fintech industry as a whole, we navigated through unprecedented interest rate hikes. That led to a sharp decline in our rate sensitive deposit base.
We also experienced delays in transferring our higher education portfolio to a durbin exempt sponsor bank, primarily driven by regulatory related delays.
Speaker 3: We also experienced delays in transferring our higher education portfolio to a German-exempt sponsor bank, primarily driven by regulatory-related delays.
Speaker 3: This substantially impacted our revenues given the high spend metrics of this portfolio.
This substantially impacted our revenues given the highest spend metrics of this portfolio.
Speaker 3: These are just two significant of several headwinds we faced over the past year.
These are just too significant of several headwinds we faced over the past year.
Speaker 3: Despite these headwinds, we have sequentially improved our core EBITDA performance every quarter this year, driven by seasonally adjusted improved operating revenues and decreased core OPEX. Operating revenues for the quarter totaled $14.7 million, which is a 14% quarter-over-quarter improvement. Our core OPEX was at $15.5 million for the quarter, which is a 16% year-over-year improvement.
Despite these headwinds we have sequentially improved our core EBITDA performance every quarter. This year driven by seasonally adjusted improved operating revenues and decreased core Opex operating revenues for the quarter totaled $14 7 million, which is a 14% quarter over quarter improvement are.
Core Opex was at $15 5 million for the quarter, which is a 16% year over year improvement.
Speaker 3: and core expenses driven by our Profit Enhancement Plan Initiative.
Core expenses, driven by our profit enhancement plan initiatives.
Speaker 3: Our portfolio metrics also remain strong with just under a billion dollars in ending service deposits at September 30th and debit card spend of just under 2.2 billion in the 9 months ended September 30th. Moving back to some.
Our portfolio metrics also remained strong with just under $1 billion and ending service deposits at September 30th and debit card spend of just under $2 2 billion in the nine months ended September 30th.
Moving back to some more business commentary.
Speaker 3: Going through a tough year also provided its benefits. The silver lining in all of this is that hitting a difficult point allowed us to focus on foundation building steps. And for the first time in a long time, we were able to take a step back and relook at the business with fresh perspective, thinking about how would we choose to rebuild a company from the ground up so we are best positioned for growth and a sustainable, strong future.
Going through a tough year also provided its benefits.
Silver lining in all of this is that hitting a difficult point allowed us to focus on foundation building steps and for the first time in a long time, we were able to take a step back and really look at the business with a fresh perspective thinking about how would we choose to rebuild the company from the ground up so we are best position.
For growth in a sustainable strong future.
Speaker 3: Some of the foundation building steps we took this quarter include.
Some of the foundation building steps we took this quarter include.
Speaker 3: Number one, finalizing the move to First Carolina Bank for our higher education portfolio, which is a Durban exempt bank and will result in meaningful increases to revenue. We have sent out customer notifications regarding this move and expect the transfer will take place on or around December . 1st.
Remember one finalizing the move to first Carolina Bank for our higher education portfolio, which is the Durbin exempt bank and will result in meaningful increases to revenue we.
We have sent out customer notifications regarding this move and expect the transfer will take place on or around December one.
Speaker 3: Second, we renewed our relationship with our core provider for another 3 years. We were able to do this at satisfactory terms and most importantly, solidifying this helps us focus on our business strategy and execution rather than a core conversion, which would likely take the full focus of our engineering team for a whole year to successfully complete.
Second we renewed our relationship with our core provider for another three years, we were able to do this at satisfactory terms and most importantly, solidifying this helps us focus on our business strategy and execution, rather than a core conversion, which would likely take the full focus of our engineering teams.
For a whole year to successfully complete.
Speaker 3: 3rd, we have continued progress on our profit enhancement plan. With a current 15% lower core op ex base compared to the prior year and an expectation that we will realize over 60% of the targeted 15Million and core op ex savings for the full year.
Third we have continued progress on our profit enhancement plan with a current 15% lower core opex base compared to the prior year and an expectation that we will realize over 60% of the targeted $15 million in core opex savings for the full year.
Speaker 3: Part of our cost savings efforts were offset by investments we made in positioning our company for growth. We do believe our full path savings will be realized within the first half of next year.
Part of our cost savings efforts were offset by investments we made in positioning our company for growth.
We do believe our full perhaps savings will be realized within the first half of next year.
And number four we made significant progress in system upgrades, such as the implementation of net suite and automation of rote and repetitive processes in different areas of our business such as banking operation fraud, and customer service to reduce costs and improve overall quality and business efficiency.
Speaker 3: And number four, we made significant progress in system upgrades such as the implementation of NetSuite and automation of rote and repetitive processes in different areas of our business such as banking operations, fraud, and customer service to reduce costs and improve overall quality and business efficiency.
As it relates to our go forward strategy. We are convinced we want to double down on improving and growing our student business.
Speaker 3: As it relates to our go forward strategy, we are convinced we want to double down on improving and growing our student business. This is a very unique opportunity only available to BMTX.
This is a very unique opportunity only available to be MTX.
Speaker 3: Second, we will continue to opportunistically look to expand our BASC strategy, but not at the expense of losing focus on our student business.
Second we will continue to Opportunistically look to expand our best strategy, but not at the expense of losing focus on our student business.
Speaker 3: I will talk through our strategic thinking as it relates to these two strategies a bit more after Jim discusses our third quarter financials in greater detail. I will now hand it over to Jim.
We'll talk to our strategic thinking as it relates to these two strategies a bit more after Jim discusses our third quarter financials in greater detail I will now hand, it over to Jim.
Speaker 2: Thank you, lovely. During the 3rd quarter of 2023, the company earned 14.7Million of operating revenue compared to 19.9Million in the prior year. Year to date 2023, the company earned 41.2Million of operating revenue compared to 67.9Million in the prior year.
Thank you Leslie.
During the third quarter of 2023, the company earned $14 7 million of operating revenue compared to $19 9 million in the prior year year to date 2023. The company earned $41 2 million of operating revenue as compared to $67 9 million in the prior year.
Servicing fees for the third quarter of 2023 totaled $8 7 million as compared to $10 2 million in the prior year.
Speaker 4: Servicing fees for the third quarter of 2023 totaled $8.7 million as compared to $10.2 million in the prior year.
Speaker 4: Year-to-date 2023, servicing fees totaled $23 million as compared to $37.7 million in the prior year.
Year to date 2023 servicing fees totaled $23 million as compared to $37 7 million in the prior year.
As discussed in our calls earlier this year servicing fee revenues were negatively impacted during the first quarter of 2023, but our fixed rate servicing agreements.
Speaker 4: As discussed in our calls earlier this year, servicing fee revenues were negatively impacted during the first quarter of 2023, but a fixed rate servicing agreements were then in place.
Place.
Speaker 4: Beginning in the second quarter of 2023 and thereafter, and under the amended deposit servicing agreements, servicing fee margins have improved by approximately 175 basis points at the current fed funds rate due to the impact of the new variable rate agreement.
Beginning in the second quarter of 2023, and thereafter and under the amended deposit servicing agreements.
We're seeing fee margins have improved by approximately 175 basis points at the current fed funds rate due to the impact of the new variable rate agreements.
Interchange and card revenue totaled $2 7 million for the third quarter of 2023 as compared to $5 3 million in the prior year.
Speaker 4: Interchange and card revenue totaled $2.7 million for the third quarter of 2023 as compared to $5.3 million in the prior year.
Speaker 4: Year-to-date 2023 interchange and card revenue totaled 7.5 million compared to 17.3 million in the prior year.
Year to date 2023 interchange and card revenue totaled $7 5 million as compared to $17 3 million in the prior year.
Year to date 2023 interchange and card revenues were negatively impacted by the temporary loss of Durbin exempt interchange fees.
Speaker 4: Year-to-date 2023, interchange and card revenues were negatively impacted by the temporary loss of Durban-exempt interchange fees.
Speaker 4: The transfer to in December is expected to improve interchange rates for our higher education vertical by approximately 20 basis points on eligible spent.
The transfer to FCB in December is expected to improve interchange rates for our higher education vertical by approximately 20 basis points on eligible staff.
Speaker 4: Had a Durbin exempt bank partnership been in place during the second and third quarters of 2023, the interchange revenue for our higher education vertical would have been approximately 50% higher on a gross basis for these periods.
Patrick Durbin exempt bank partnerships been in place during the second and third quarters of 2023, the interchange revenue for our higher education vertical would have been approximately 50% higher on a gross basis for these periods.
Average service deposits stood at 853 million for the third quarter of 2023 down from 922 million for the second quarter of 2023 and from $1 6 billion in the third quarter of 2022.
Speaker 4: Average service deposits totaled $853 million for the third quarter of 2023, down from $922 million for the second quarter of 2023, and from $1.6 billion in the third quarter of 2022.
Speaker 4: Substantially, all of this balance reduction occurred within our BAS vertical due to the interest rate sensitivity of a large portion of these accounts.
Substantially all of this balanced reduction occurred within our bass vertical due to the interest rate sensitivity of a large portion of these accounts.
Average service deposits in our higher education vertical increased to 466 million in the third quarter for $429 million in the second quarter of 2023.
Speaker 4: Average service deposits in our higher education vertical increased to $466 million in the third quarter from $429 million in the second quarter of 2023.
More significantly.
Speaker 4: More significantly, ending service deposits in our higher education vertical increased to 636 million at September 30th, 2023 from 408 million at June 30th, 2023.
Ending service to pilots in our higher education vertical increased to $636 million.
730 in 2023 for 408 million at June 30 of 2023.
Deposits for 90 day active accounts in our higher education vertical at September 32023 averaged $1864, representing an increase of 15% as compared to the second quarter.
Speaker 4: Deposits per 90-day active account in our higher education vertical of September 30, 2023 averaged $1,864, representing an increase of 15% as compared to the second quarter.
Spending totaled 737 million for the third quarter of 2023, an increase from $658 million for the second quarter of 2023, and an increase from $683 million for the third quarter of 2022.
Speaker 4: Spend totaled $737 million for the third quarter of 2023, an increase from $658 million for the second quarter of 2023, and an increase from $683 million for the third quarter of 2022.
Ken for 90 day active accounts for the third quarter of 2023 averaged $2267 within our higher education vertical and $1523 within our best vertical.
Speaker 4: Then for 90 day active account for the 3rd quarter of 2023. Average 2267 dollars. Within our higher education vertical and 1523 dollars. Within our bathroom.
Speaker 4: goes up significantly when compared to the second quarter of 2023 and the third quarter of 2022.
Both up significantly when compared to the second quarter of 2023 in the third quarter of 2022.
Overall, we continue to see expanded our higher education vertical normalizing in 2023 of pre COVID-19 levels.
Speaker 4: Overall, we continue to see spending our higher education vertical normalizing in 2023 to pre-COVID level.
Annualized debit card spend for highly active bath users.
Speaker 4: Analyze debit card spend for highly active BAT users.
Speaker 4: Those with both direct deposit and a minimum of 5 customer-driven transactions per month was approximately $18,500 during the 3rd quarter of 2023.
Those with both direct deposit and a minimum of five customer driven transactions per month was approximately $18500 during the third quarter of 2023.
Speaker 4: This very attractive cohort makes up approximately 21 percent of active accounts in September 30, 2023, as compared to 20 percent in the year ago period.
It's very attractive cohort makes up approximately 21% of active accounts at September 30 of 2023 as compared to 20% in the year ago period.
Account fees and University fees totaled $3 3 million for the third quarter of 2023 as compared to $3 5 million in the prior year.
Speaker 4: Account fees and university fees total 3.3 million for the third quarter of 2023, but compared to 3.5 million in the prior year.
Year to date 2023 account season University fees totaled $10 3 million as compared to $11 3 million in the prior year.
Speaker 4: Year-to-date 2023 account fees in the university fees totaled 10.3 million as compared to 11.3 million in the prior year.
During the third quarter of 2023, the company retained 99% of its higher education institutional clients and with our continued strategic focus we anticipate growth in both the number of active accounts and account activity go forward.
Speaker 4: During the third quarter of 2023, the company retained 99% of its higher education institutional clients. And with our continued strategic focus, we anticipate growth in both the number of active accounts and account activity go forward.
There were approximately 200000, new account sign ups in the third quarter 2023.
Speaker 4: There were approximately 200,000 new account signups in the third quarter 2023 and over 400,000 new account signups in the first nine months of 2023.
Over 400000, new account sign ups in the first nine months of 2023.
Speaker 4: And in our higher education vertical, new checking account signups in the 3rd quarter improved 85% over the 2nd quarter and 6% year over year.
And in our higher education vertical new checking account sign ups in the third quarter improved 85% over the second quarter and 6% year over year.
Speaker 4: We processed over $3.6 billion of student financial aid refund disbursements during the third quarter of 2023, as compared to $3.4 billion during the third quarter of 2022.
We processed over $3 6 billion, a student financial aid refund disbursements during the third quarter of 2023 as compared to $3 4 billion during the third quarter of 2022.
Speaker 4: Core operating expenses totaled 15.5 million for the third quarter of 2023, comparing favorably to the 18.4 million incurred for the third quarter of 2022 with a 16% year-over-year reduction.
Core operating expenses totaled $15 5 million for the third quarter of 2023, comparing favorably to the $18 4 million incurred for the third quarter of 2022 with a 16% year over year reduction.
Speaker 4: Year-to-date 2023, core operating expenses totaled 44.8 million, comparing favorably to the 51.5 million in the prior year with a reduction of over 13 percent year-over-year.
Year to date 2023 core operating expenses totaled $44 8 million comparing favorably to the $51 5 million in the prior year with a reduction of over 13% year over year.
The company continues to actively execute upon its path with initiatives completed during the first nine months of 2023 that are expected to lead to the realization of over 60% of the targeted $50 million of cost savings for the full year 2023.
Speaker 4: The company continues to actively execute upon its PEP with initiatives completed during the first nine months of 2023 that are expected to lead to the realization of over 60% of the targeted 15 million of cost savings for the full year 2023.
The company expects to achieve its full pep target with continuation into the first half of 2024.
Speaker 4: The company expects to achieve its full PEP target with continuation into the first half of 2024, as certain of its cost reduction efforts have been partially offset by investments in its technology, operational processes, and data initiatives.
Certain of its cost reduction efforts have been partially offset by investments in its technology operational processes and data initiatives.
Core loss before interest taxes, depreciation and amortization totaled negative 0.8 million for the third quarter of 2023, comparing favorably to the negative 0.9 billion for the second quarter of 2023 and unfavorably to the $1 5 million for EBITDA for the third quarter of 2022.
Speaker 4: Core loss before interest, taxes, depreciation, and amortization totaled negative 0.8 million for the third quarter of 2023, comparing favorably to the negative 0.9 million for the second quarter of 2023, and unfavorably to the 1.5 million core EBITDA for the third quarter of 2022.
Significantly Q3, 2003, 2023 represents the third sequential quarter of improvement in the company's core EBITDA results with expected continuation for the fourth quarter of 2023, and reflecting the continuing progress being made on our path to profitability.
Speaker 4: Significantly, Q3 2023 represents the third sequential quarter of improvement in the company's core EBITDA results, with expected continuation for the fourth quarter of 2023, and reflecting the continuing progress being made in our path to profitability.
Speaker 4: Liquidity remains strong at September 30th, 2023 with 8.8 million of cash, 7.4 million of working capital and no debt.
Liquidity remains strong at September 30 of 2023 with $8 8 million of cash $7 4 million of working capital and no debt and.
Speaker 4: In addition, the company anticipates monetizing approximately $2 million of additional tax receivables by end of 2023.
In addition, the company anticipates monetizing approximately $2 million of additional tax receivables by end of 2023.
Importantly, our September 30th cash balance would have been $3 $5 million higher but for the timing of the servicing fee prepayment rates received in October instead of at quarter end. This is generally the case.
Speaker 4: Importantly, our September 30th cash balance would have been 3.5 million higher, but for the timing of a servicing fee prepayment received in October , instead of at quarter end, this is generally the case.
For the fourth quarter of 2023, the company expect close to breakeven core EBITDA and positive operating cash flow.
Speaker 4: For the fourth quarter of 2023, the company expects close to break-even core EBITDA at positive operating cash flow.
With that update I'd like to turn the call back to Loveline for some final comments.
Speaker 4: With that update, I'd like to turn the call back to Lovleen for some final comments. Lovleen?
Brian.
Thank you Jim.
Speaker 3: I would like to provide some color on how we are thinking about the business going forward. With the upcoming move to First Carolina Bank and our core decision finalized, we are in a better position to focus on growth.
I would like to provide some color on how we are thinking about the business going forward with the upcoming move to first Carolina Bank and our core decision finalized we are in a better position to focus on growth.
Speaker 3: Our primary focus going forward will be to double down on our student business.
Our primary focus going forward will be to double down on our student business.
Speaker 3: We are already market leaders in this segment touching about one in every three college students eligible to receive a refund. However, we believe there is still tremendous untapped growth potential in this segment.
We are already market leaders in this segment touching about one in every three college students eligible to receive a refund. However, we believe there is still tremendous untapped growth potential in this segment.
For example, the $11 billion to $12 billion in financial aid refunds, we disbursed each year through our existing university relationships less than $2 billion of this flows into bank global by checking accounts.
Speaker 3: For example, of the $11 to $12 billion in financial aid refunds we disperse each year through our existing university relationships, less than $2 billion of this flows into bank mobile vibe checking accounts.
Speaker 3: Similarly, only about 10 to 12% of students receiving a refund choose the bank mobile vibe checking account as the vehicle in which they want to receive their refund. Furthermore, we currently lose an active accounts almost as many accounts that we open each year. So there is tremendous opportunity to improve retention of our account holder.
<unk> only about 10% to 12% of students receiving a refund choose the bank mobile by checking accounts as the vehicle in which they want to receive their refund.
Furthermore, we currently lose an active accounts almost as many accounts that we open each year. So there is tremendous opportunity to improve retention of our account holders.
Speaker 3: Not only is there a tremendous market opportunity for us to capture, but what we love about the student market is that it is totally aligned with our mission of why we came into being. We built this company on the premise that we wanted to build a digital bank utilizing best-in-class technology to financially empower millions of Americans by providing them with a more affordable, transparent, and consumer-friendly banking experience.
Not only is there a tremendous market opportunity for us to capture but we but what we love about the student market is that it is totally aligned with our mission of why we came into being we built this company on the premise that we wanted to build a digital bank utilizing best in class technology to financially empower millions of Americans they provide.
Hiding them with a more affordable transparent and consumer friendly banking experience.
Speaker 3: What better way to execute on that mission than by focusing on millions of students in the US and helping them build strong financial lives by partnering with us?
What better way to execute on that mission by focusing on millions of students in the U S and helping them build strong financial lives by partnering with us.
Speaker 3: There are a few steps to make this a reality. First, we have to have the right team, starting with the chief growth officer, who has the marketing, product, data insights, and business development experience to provide the leadership in executing the strategy. He or she will then help shape the strategy and enhance our current team to execute. We are in the final stages of this hire and hope to have a new addition to our team in this role by the top of the year.
There are a few steps to make this a reality first we have to have the right team starting with the Chief growth Officer, who has the marketing product data insights and business development experience to provide the leadership and executing this strategy he or she will then help shape the strategy and enhance our current team to execute we are in the final stage.
At this higher and hope to have a new addition to our team in this rule by the top of the year.
Second we need to unify our technology base that we have our most modern API based technology stack in place for our student business. This way, we can much more quickly rollout new products and features that we deem important to attract and retain our student customers and build out our product.
Speaker 3: Second, we need to unify our technology base so we have our most modern API-based technology stacked in place for our student business. This way, we can much more quickly roll out new products and features that we deem important to attract and retain our student customers and build out our product roadmap.
Matt.
Speaker 3: This technology unification and upgrade is expected to roll out in Q1 2024.
This technology unification and upgrade is expected to rollout in Q1 2024.
Speaker 3: Lastly, we will need to experiment with new tactics and strategies, which will allow us to better quantify the opportunity in the higher education segment over the next 18 to 36 months.
Lastly, we will need to experiment with new tactics and strategies, which will allow us to better quantify the opportunity in the higher education segment over the next 18 to 36 months.
Speaker 3: And we look forward to sharing more as we build the team and finalize on our strategy.
And we look forward to sharing more as we build the team and finalize on our strategy.
As for our best strategy, we remain intrigued SaaS provides revenue diversification would be opportunity to earn higher margin SaaS revenue.
Speaker 3: As for our BAS strategy, we remain intrigued. BAS provides revenue diversification with the opportunity to earn higher margin SAS revenue. That being said, we must face the reality that this model is currently facing a lot of pressure.
That being said, we must face the reality that this model is currently facing a lot of pressure. Many bass players have struggled with profitability due to a number of factors, including increasing regulatory pressures risk of disintermediation by bass banks and other macro effects just to name a few that being said.
Speaker 3: Many BASC players have struggled with profitability due to a number of factors, including increasing regulatory pressures, risk of disintermediation by BASC, banks, and other macro effects.
Speaker 3: That being said, we still believe there is an opportunity for a few key players to succeed in BAS as the market opportunity remains large.
We still believe there is an opportunity for a few key players to succeed and Bath as the market opportunity remains large and we will continue to Opportunistically look for best deals partnerships and potentially M&A opportunities that help us remain active and competitive in this space, but not at the expense of losing focus on our core.
Speaker 3: We will continue to opportunistically look for best deals partnerships and potentially opportunities that help us remain active and competitive in the space, but not at the expense of losing focus on our core students.
Students business.
In summary, I want to reiterate that we are very optimistic and excited about our future. We are building our company to less and are not just focused on quarter to quarter results. Our goal is to get back to $20 million plus in EBITDA over the next 24 to 36 months through a combination of revenue growth cost.
Speaker 3: In summary, I want to reiterate that we are very optimistic and excited about our future. We are building our company to last and are not just focused on quarter-to-quarter results. Our goal is to get back to $20 million plus in EBITDA over the next 24 to 36 months through a combination of revenue growth, cost discipline, and refocus of strategy, thereby hopefully significantly increasing the value of our company for our shareholders.
Discipline and refocus of strategy, thereby hopefully significantly increasing the value of our company for our shareholders.
Speaker 3: Thank you for joining us on our call today. We do appreciate your support. And most importantly, we appreciate the dedication and skills of our amazing team. Thank you so much for all that you do. We will now open the line for questions.
Thank you for joining us on our call today, we do appreciate your support and most importantly, we appreciate the dedication and skills of our amazing team. Thank you. So much for all that you do we will now open the line for questions.
Speaker 1: If you would like to ask a question, please press star 1 on your telephone keypad. And if you would like to withdraw your question, again, press star 1. Your first question comes from the line of Greg Pendy from Chardon. Please go ahead.
If you would like to ask a question. Please press star one on your telephone keypad and if you would like to withdraw your question again press Star one.
First question comes from the line of Greg Pengxi from Chardan. Please go ahead.
Hi, guys. Thanks for taking my questions.
Speaker 5: Hi, guys, thanks for taking my question. Hi. So, I guess what things kind of increased visibility now that you have the rate contracts and Durbin exempt, I guess, visibility on that front. Any update on a buyback? I think you authorized 1 a while back just kind of what are the thoughts? Is that still authorized. Right now, and is that something that could come into play in 2024.
Alright.
I guess, what things kind of increased visibility now that you have.
The re contracts and Durbin exempt I guess.
<unk> ability on that front.
Any update on a buyback I think you authorized one a while back.
Kind of what are the thoughts is that still authorized.
Right now and is that something that could come into play in 2024.
Hey, Greg This is Jim.
Speaker 4: Greg, this is Tim. Good to speak to you again. So buyback is definitely one of the strategic alternatives that we are actively considering. To your point, it's definitely on the table for 2024, as we discussed in our prior call, is with the continuing change in the macroeconomic environment. We've leaned towards conservatism with our cash.
Good to speak to you again.
Buyback is definitely one of the strategic alternatives that we are actively considering.
It's definitely on the table for 2024 as we discussed in our prior call as with the continuing change in the macro economic environment, we've leaned towards conservatism with our cash.
Speaker 4: But obviously our principal focus is the highest return to our shareholders. So it's definitely something that we are evaluating as a potential strategic acting for 2024.
But obviously our principal focus is the highest return to our shareholders. So it's definitely something that we are evaluating that.
Potential strategic passing for 2024.
Speaker 5: Okay, great. And then just 1 more just on the operating expenses. Can you just go into a little bit of color on the technology communications? Spending, I think you already mentioned some of it. There were some puts and takes in the quarter just trying to figure out. It seemed to have bumped up sequentially.
Okay, Great and then just one more just on the.
The operating expenses can you just go into a little bit of color on the technology Communications spur.
Spending I think you already mentioned some of it there were some puts and takes.
In the quarter, just trying to figure out it seem to you bumped up sequentially.
Yes. There is there is some variability there so that line item and evolves as you might expect.
Speaker 6: Yeah, there is there is some variability there. So that that line item involves, as you might expect. So it's our, our tech spend our processing charges, our communication charges. As the number of transactions increases, so Q3 is 1 of our peak quarters for seasonality with the return to school. That variable component is reflected in that that technology and core processing line item as well. Got it got it. Okay.
Our tech spend our processing charges, our communication charges.
As the number of transactions increases. So Q3 is one of our peak quarters for seasonality with the return of this goal.
That variable component is reflected in that could that technology and core processing line item as well.
Got it got it.
That's all I have thanks.
Thank you Greg.
Speaker 1: Your next question comes from the line of Mike Groundel from Northland Security. Please go ahead.
Your next question comes from the line of Mike Grondahl from Northland Securities. Please go ahead.
Hey, guys good afternoon.
How are you guys thinking kind of the next couple of quarters on deposits.
Speaker 7: How are you guys thinking kind of the next couple quarters on deposits?
Speaker 7: on the higher ed side and the BASC side. How should we think about deposit growth or continued kind of running?
On the higher Ed side than in the past.
Should we think about deposit growth or continued kind of runoff.
Okay.
Speaker 3: Yeah, I think, Mike, for us, you know, where we're focused on, it's clear in this macro environment, number one is chasing deposits that are rate sensitive doesn't make sense for us.
Yeah, I think Mike for Us.
Where we're focused on it's clear in this macro environment number one is chasing deposits that are rate sensitive doesn't makes sense for us. So we haven't been focused on deposit growth as it relates to the interest rate sensitive side of our portfolio and that's why we've really doubled down as we've seen in 2024 to <unk>.
Speaker 3: So, you know, we haven't been focused on deposit growth as it relates to the interest rate sensitive side of our portfolio.
Speaker 3: And that's why we've really doubled down as we're saying and 2024 to be a focus on reinvesting and reinvigorating our student business and really that strong untapped market that exists there, even without selling another school, just in our current ecosystem.
Because on reinvesting and reinvigorating, our student business and really that strong untapped market that exists there even without selling another school just in our current ecosystem.
Speaker 3: We're not at a point where we're quantifying that. I think what we wanted to also make sure that the market understands is that it's a stepped approach.
We're not at a point, where we're quantifying that I think what we wanted to also make sure that the market understands is that at the stepped approach and the first step in that is hiring the right leadership honing in on our strategy and to our technology unification. So I talked about our most modern technology platform.
Speaker 3: And the first step in that is, you know, hiring the right leadership honing in on our strategy and to.
Speaker 3: our technology unification, so I talked about our most modern technology platform and making sure that that's in place so that we could more quickly roll out products and services that would better attract, engage, and retain that customer base, which would then downstreamly to greater deposits and greater spend in that portfolio. That's expected to roll out by the end of Q1. So really in the latter half of next year is when we're going to start seeing the impacts of some of the initiatives that we're putting forth in the end of this year and the earlier half of next year.
And making sure that that's in place so that we could more quickly rollout products and services that would better attract engage and retain that customer base, which we then downstream lead to greater deposits and greater spend in that portfolio. That's expected to rollout by the end of Q1, so really in the in the lab.
Or half as of <unk>.
Next year is when we're going to start seeing the impacts of some of the initiatives that we're putting forth.
In the end of this year and the earlier half of next year.
Got it.
Speaker 8: Got it.
Jim just for you I think what you're seeing is.
Speaker 7: Jim, just for you, I think what you're saying is...
Speaker 7: The reason core operating expenses were up 3Q from 2Q is just the seasonality with the higher education business and the processing cost that goes along with that. Is that the right way to think about it?
The reason core operating expenses were up three Q from <unk>.
This seasonality with the higher education business and the processing cost that goes along with that is that the right way to think about it.
Speaker 6: Yeah, Mike, I think it's definitely the right way is is the principal driver for the increased quarter of a quarter is those variable costs and they're directly in line with the increased activity and and the increase we'll see coming through our top line revenue as well. Got it.
Yes, Mike I think it's definitely the right ways.
The principal driver for the increase quarter over quarter is those variable costs and there are directly in line with the increased activity.
And the increase you will see coming through our topline revenue as well.
Okay.
Got it.
I'm just looking at my notes here quick.
Speaker 7: Oh, the any color you can give us on the.
Any color you can give us on that.
The terms.
Speaker 7: It sounds like your core processing provider, you extended that three years. Was that similar terms? Was that something you had planned to do all along? Or when did you kind of decide you were gonna extend?
It sounds like your core processing provider you extended that three years.
That similar terms was that something you would plan to do all along or when did you kind of decide we're going to going to extend that.
Yeah.
Speaker 3: So, this is something that we don't talk about often, because a core processor is behind the scenes. And the reason that I brought it up today was really because there was a decision to be made whether we wanted to convert to a new core processor or not, because our existing relationship was ending as of May 2024. And as I also mentioned, a core conversion for those of you in banking or cover banks.
So this is something that we don't talk about often because of core processor is behind the scenes and the reason that I brought it up today was really because there was a decision to be made whether we wanted to convert to a new core processes are not because our existing relationship with ending.
As of May 2024, and as I also mentioned our core conversion for those of you in banking or cover banks is a massive undertaking and so you start that process of renegotiation.
Speaker 3: Is a massive undertaking and so you start that process of renegotiation.
Speaker 3: You know, much, much ahead of time, we went through a competitive RFP process and we are very satisfied and proud of the team of where we landed and and there's this is a competitive market.
Much much ahead of time, we went through a competitive RFP process and we are very satisfied.
Fight and proud of the team of where we landed and this is a competitive market.
Speaker 7: We were able to really renew that in a satisfactory way, and you're not going to see any incremental cost coming from that line item going forward. Got it and then maybe just lastly, lovely.
And we were able to really renew that and in a satisfactory way and youre not going to see any incremental costs coming from that line item going forward.
Got it and then maybe just lastly loveline.
If there's one product feature.
Speaker 7: or new offering for the higher enrollment college business.
For new offering for the higher enrollment college business.
Can you give us some insight into what that might be just so we can understand kind of the enhanced efforts that you have there.
Speaker 7: And can you give us some insight into what that might be, just so we can understand kind of the enhanced efforts that you have there?
Speaker 3: Yeah, I think that the one that we even talked about last quarter, you know, we definitely want to focus on asking our customers and really being able to determine the consumer insights that really lead to the product roadmap of what we continue to add to our mobile banking experience. What came out as sort of the number one top thing, given the high spend of this portfolio, is that can we earn money in our high spend categories?
Yes, I think that the one that we even talked about last quarter, and we definitely want to focus on asking our customers and really being able to determine the consumer insights that really lead to the product roadmap of what we continue to add to our mobile banking.
Experienced what came out as sort of the number one top thing given the high spend of this portfolio is that can we earn money and our highest spend category and so we structured the relationship with their provider, where there's also a rev share component.
Speaker 3: And so we structured a relationship with a provider, where there's also a rev share component for us. And so it's our 1st, sort of feature rollout that we expect, you know, during Q1, and that's going to be a cash back rewards program. It's an opportunity for our customers to.
For us and so its our first sort of feature rollout that we expect.
During Q1.
And that's going to be a cashback rewards program is an opportunity for our customers to.
I feel that we responded to their number one ask and for them to earn money every time that they spend and in high <unk>.
Speaker 3: feel that we responded to their number one ask and for them to earn money every time that they spend in in high, you know, important areas like gas, groceries, et cetera. And third, it also leads to a rev share opportunity for us.
<unk> areas like gas groceries et cetera, and third it also leads to a rev share opportunity for us.
Got it okay. Thank you.
Yep. Thanks, Matt you are you are next question comes from the line of Bill again, Zelem from Titan Capital Management. Please go ahead.
Speaker 1: Yep. Thanks, Mike. Your next question comes from the line of Bill Denzelum from Titan Capital Management. Please go ahead.
Got it thank you I'd like to touch on.
Speaker 2: Thank you. I'd like to touch on the new checking account signups that hit a significant increase this quarter versus the prior year. What was that change versus the second quarter? What was the change versus one year ago? I'm thinking that given the seasonality, that might be an important comparison also.
The new checking account sign ups.
Got it.
A significant increase this quarter versus the.
Prior year.
That changed versus I'm, sorry versus the.
Versus the second quarter, what was the change versus one year ago Im thinking that just given the seasonality that might be an important comparison also.
Yeah, So that's driven by seasonality.
Speaker 3: Yeah, so that's driven by seasonality and also probably improved enrollment year over year. So we also mentioned since post pandemic, there's been a bump in enrollment, especially on the community college side. And that's helped with application flow into the system. And, as, you know, as you probably remember, you know, Q.
And also probably improved enrollment year over year as we also mentioned since post pandemic. There has been a bump in enrollment, especially on the community College side and that's helped with application flow.
Into the system and as you know as you probably remember Q.
Speaker 3: 1 and Q3 are our strongest seasons in this business. It's kind of back to school, the beginning of new semesters. And so you have the most refund dollars, the most number of students enrolling in schools, and potentially choosing us as a vehicle in which they want to receive that money.
One in Q3 are our strongest seasons in this business, it's kind of back to school to beginning of Houston semesters, and so you have the most sort of refund dollars. Most number of students enrolling in schools and potentially choosing us as a vehicle in which they want to receive that money Q2, and Q4 tend to die down relative.
Speaker 3: Q2 and Q4 tend to die down relative to that. So we saw about an 80 plus percent.
To that so we saw about 80 plus percent.
Speaker 3: quarter-over-quarter increase in account sign-ups due to that seasonality between Q2 and Q3. And then year-over-year, I think it was about 6-7% or so. So, it's better than last year, but the biggest thing is the seasonality quarter-to-quarter.
Order over quarter increase in account sign ups due to that seasonality between Q2, and Q3 and then year over year I think it was about 67% ourselves. So it's.
It's kind of it's kind of it's better than last year.
But it's the biggest thing is the seasonality quarter to quarter.
Speaker 2: And I know you talked about, in your opening remarks, the intent to work on retention, since you lose about as many accounts to graduating students as you do to new ones coming in. Are you also looking to increase that rate of checking account sign-up at the front end? Or is that not one of the primary initiatives at this point?
And I know you talked about in your opening remarks, the intent to work on retention since you Lew.
It was about as many accounts to graduating students as you do new ones coming in.
Are you also looking to.
To increase that rate of checking account sign up at the front end or is that not one of the primary initiatives at this point.
Yes, we're really looking at a whole funnel experience here again. This is a regulatory regulatory related industry that we're in so I just wanted to say that for US we're mindful and we're always looking at what is best for our student that is our primary driver. It's also our mission but.
Speaker 3: Yeah, we're really looking at a whole funnel experience here again. You know, this is a regulatory regulatory related industry that we're in. So I just want to say that.
Speaker 3: For us, we're mindful and we're always looking at what is best for our student. That is our primary driver. It's also our mission, but, you know, we want to make sure that our students know what options are available to them. And we definitely believe that our account is a really great option for them. And so we're gonna continue to focus on the experience between.
We want to make sure that our students know what options are available to them and we definitely believe that our account is a really great option for them and so we're going to continue to focus on the experience between win.
Speaker 3: When their school lets them know that they have money waiting for them and how can we make that as frictionless as an experience for them to receive that money and any of the choices that are available to them and hopefully highlight and make our product better as we respond to.
Their school less of them know that they have money waiting for them and how can we make that as frictionless as an experience for them to receive that money in any of the choices that are available to them and hopefully highlight and make our products better as we respond to.
Speaker 3: What our customers are looking for. So it's an obvious choice to want to go with us. And so that then is also about engagement.
What our customers are looking for so it's an obvious choice to want to go with us and so that then is also about engagement and then keeping them on as we expand our product roadmap overtime for retention. So it's really being able to convert more upfront engage them and get more active.
Speaker 3: And then keeping them on as we expand our products roadmap over time for retention. So, it's really being able to convert more up front.
Speaker 3: engage them and get more activities through things like the cash back rewards and other products and features and then keeping them over a lifetime by being able to expand the different products that we offer them that could align to the different stages of life that they would be going through.
<unk> do things like the cashback rewards and other products and features and then keeping them over a lifetime by being able to expand the different products that we offer them that could align to the different stages of life that they would be going through.
Thanks, Bob and continuing with the student side of the business.
Speaker 9: thanks lovely and continuing with the student side of the business uh... you reference that the average spend was up it was also up i believe in in the bath uh... side of the business also
You referenced that the average spend was up it was also up I believe in the bass side of the business also.
Speaker 9: The question is, given the macroeconomic data that is out there, there's some indication, recent indication that the consumer may be slowing, other indications that the consumer may be holding up, but what's your belief as to why your average spend is up in both of those verticals?
The question is given the macroeconomic data that is out there there is some indication.
Recent indication that the consumer may be slowing other indications that the consumer may be holding up.
But what's your what's your belief as to why your average spend is up in our in both of those verticals.
Yes, Bill this is Jim.
Speaker 4: Yeah, Bill, this is Jim. I think there's a couple of factors going on. Number one, I can't discount that the influx or influence of inflation, right, is that certainly a driver in our spend for across the board for both verticals.
Just a couple of factors going on is number one.
The influx or influence of inflation right is that's certainly a.
Driver.
Our spend for across the board for both verticals, but I think also I think it's to the elements that loveline spoke to of increasing usability and features right as our particularly within our higher Ed vertical as students find it easier to use our services and our products as they end up spending more.
Speaker 4: But I think also, I think it's to the elements that Lovleen spoke to of increasing the usability and features, right? As are particularly within our, our higher ed vertical as students find it easier to use our services and our products is they end up spending more. And we're seeing that come through and not only pretty much all of the measures, right? Whether we look at the new account signups, which is not only.
We're seeing that come through.
And not only pretty much all of the measures right, whether we look at the new account sign ups, which is up not only Q3 year over year, but also a full nine months year over year as well, but then also the increases we're seeing coming through and spend as well. So I think it's a combination of both of those factors is theres, a theres a natural lift coming from the inflationary environment.
Speaker 4: Q3 year-over-year, but also full nine months year-over-year as well, but then also the increases we're seeing coming through in spend as well. So, I think it's a combination of both of those factors. There's a natural lift coming from the inflationary environment, but I think there's also the lift coming from the increased usage from our existing user base.
There's also the lift coming from the increased usage from our existing user base.
That is a that is helpful and.
Speaker 9: That is, that is helpful. And also in the opening remarks, you all noted that your focus right now is higher ed and a little less so on the on the BAS vertical.
Also in your opening remarks, you all noted that your focus right now is higher Ed.
And a little less so on the on the vast vertical.
What opportunities do you see.
Speaker 9: What opportunities do you see in the Bass Vertical when you are ready to push that direction again or you feel like there's been some permanent change in that industry that will lead it to not ever be what we all may have thought that it could have been?
In the vast vertical when you are ready to too.
To push that direction again, or do you feel like theres been some permanent.
Permanent change in that industry that will.
Lead it to not not ever be what what we all may have thought that it could have been.
Yeah.
Yeah, I think it's a good question Bill and I would say that we're going through a transition aerie period, where there's a lot of different opinions on how it will all shake out and so I just wanted to highlight number one we're really grateful for our business and how it's set up because we have such a great sort of diversification between having.
Speaker 3: Yeah, I think it's a good question, Bill. And I would say that we're going through a transitionary period where there's a lot of different opinions on how it will all shake out. And so I just want to highlight number one, we're really grateful for our business and how it's set up because we have such a great sort of diversification between having sort of the opportunistic based fast business that we're set up to capitalize on if that industry continues to prosper.
Through the opportunistic based vas business that were set up to capitalize on is that industry continues to prosper, but then simultaneously we have a beautiful business in the higher Ed space.
Speaker 3: But then simultaneously, we have a beautiful business in the higher ed space that's not going anywhere. That's a continuously replenishing market. It's a large market.
That's not going anywhere that the continuously replenishing market, it's a large market with the existing schools that we have in place we've barely penetrating be opportunity forget about selling another school and what opportunity that could bring and then on top of that we are only selling one product to our colleges and universities.
Speaker 3: With the existing schools that we have in place, we're barely penetrating the opportunity. Forget about selling another school and what opportunity that could bring. And then on top of that, we're only selling 1 product to our colleges and universities today. And, you know, we, we gave a sneak peek that we're rolling out a fraud tool, an ID verification tool. A lot of schools are.
Today, and we gave a sneak peak that we're rolling out a fraud tool.
And I'd verification tool a lot of schools or.
Speaker 3: Struggling with enrollment fraud, which has downstream effects of really making schools lose a lot of money. So there's just so much untapped opportunity in higher ed and it's also our higher margin business.
Struggling with an enrollment fraud, which has downstream effects of really making schools moves a lot of money. So there's just so much untapped opportunity in higher Ed and it's also our higher margin business.
Speaker 3: Um, where we're not splitting any of that business with with any partners. So we're really excited. But to answer your question about bath in particular, you know, what we want to kind of tell the market is that it's a transition period.
We're we're not splitting any of that business with with any partners. So we're really excited but to answer your question about <unk> in particular.
What we want to kind of tell the market is that it's a transition period.
Speaker 10: you know, you read in the news every single day, there's like a news story about baths.
You read in the news every single day, there's like a new story about Bath and it's just clear that there is regulatory sort of oversight and pressure that is coming on the industry. There is also bass banks that are really becoming stronger competitors in this space and kind of creating this disintermediation threat.
Speaker 3: And it's just clear that there is regulatory oversight and pressure that is coming on the industry. There's also Bass banks that are really becoming stronger competitors in this space and kind of creating this disintermediation threat to just technology Bass players.
To sort of just technology vast players. So we're just mindful of that that being said if you have the technology and if you have.
Speaker 3: So we're just mindful of that. That being said, if you have the technology and if you have
Speaker 10: scale and you have access to capital. I think you're very well positioned to play in this space. So I think that.
And you have access to capital I think you're very well positioned to play in this space. So I think that when the door is very much open for us to.
Speaker 3: the door is very much open for us. To me, it's more of the unsexy deals. It might not be the brand names because brand names take a long time to implement these programs. It's sometimes more of a headache than a benefit. It can be unprofitable when you have that much negotiating power being a big brand.
To me, it's more of the Unsexy deals that might not be the brand names because brand names took a long time to implement these programs and it's a.
Sometimes more of a headache than than a benefit and it's.
It can be unprofitable when you have that much sort of negotiating power being a big brand.
Speaker 3: So, I think that the opportunity, if we do decide to take advantage of it would really be more niche use cases where a lot of deposit opportunity is flowing through some sort of disbursement similar to our student business is flowing through and there's a large enough customer base that the scale is there to make it a profitable endeavor for us. And that's what we're well positioned to capitalize on if those, if, and when those opportunities come.
I think that the opportunity if we do decide to take advantage of it would really be more niche use cases, where a lot of deposit opportunity is flowing through some sort of disbursement similar to our student business is flowing through and there is a large enough customer base that the scale is there to make it up.
Profitable endeavor for us and that's what we're well positioned to capitalize on if those if and when those opportunities come.
Great. Thank you both.
Thanks.
And we have no further phone questions, Brian do we have any web questions.
Speaker 1: And we have no further phone questions. Brian , do we have any web questions?
Okay.
Speaker 2: Yes, we have a web question going back to the higher education business of the over 700 college partners that you have. How many of the 200,000 new account signups were from existing versus new colleges and what are your overall plans to increase the number of colleges and universities that you are working with?
Yes, we have a web question going back to the higher education business.
Over 700 College partners that you have how many of the 200000, new account sign ups were from existing versus new colleges and what are your overall plans to increase the number of colleges and universities that you were working.
Yeah.
Yeah.
Speaker 10: Yeah, so I would say number one is I just want to emphasize I really do love this point not to diminish the opportunity on the sales side for universities, but it's more to highlight that.
So I would say number one is I just wanted to emphasize I really do love this point not to diminish the opportunity on the sales side for universities, but it's more to highlight that it's amazing how underpenetrated. We are in our existing ecosystem. So when the schools that we have relationships with today that's.
Speaker 3: it's amazing how unpenetrated we are in our existing ecosystem. So with the schools that we have relationships with today, that's primarily where those account sign-ups are coming from. It's not the new schools because new schools take time for implementation and for the first cohort to get used to signing up through the process, etc. So it's really our existing.
Really where those account sign ups are coming from it's not been used schools, because new schools take time for implementation and for this first cohort to get used to signing up through the process et cetera. So it's really our existing.
Speaker 3: Based that we're benefiting from the new sign up to answer that part of the question.
Base that we're benefiting from the new sign ups to answer that part of the question.
Second is let me just go back to the point of our existing market share. So today with the schools that we have relationships. We are touching about a third of the market of the eligible students that can get a refund again, we're disbursing about 11% to $12 billion for those schools that we're doing business with today and less.
Speaker 10: and less than two billion or about a billion and a half only of that is flowing into our checking account.
And then $2 billion or about 1 billion and a half only of that is flowing into our checking accounts and so there is there is great opportunity as we improve our product as we respond to its students are saying that they need as we get that upfront conversion funnel more frictionless and easier to kind of work through.
Speaker 10: And so there's great opportunity as we improve our product, as we respond to what students are saying that they need, as we get that upfront conversion funnel more frictionless and easier to kind of work through, you know, we can really penetrate more of that opportunity. And then we've already talked about the engagement.
We can really penetrate more of that opportunity and then we've already talked about the engagement and the retention side as it relates to new school opportunities, even though we already are the market leader with about a third of that market opportunity. There is still a.
Speaker 10: As it relates to new school opportunities, even though we already are the market leader with about a third of that market opportunity, there is still a strong pipeline for us to go after and we are looking at how do we.
Strong pipeline for us to go after and we are looking at how do we.
Speaker 3: You know, continue to stay strong from a competitive offering standpoint where today we offer full service refund disbursement. We want to be able to offer a value add where that full service disbursement number 1 can be better integrated within the existing ERP systems and partnerships that schools have on campus.
Continue to stay strong from a competitive offering standpoint.
Where today, we offer full service refund disbursements, we want to be able to offer a value add where that full service disbursement number one can be better integrated within the existing ERP systems and partnerships with schools have on campus do that it's an easier choice for them to pick us because it's just easier to roll it out.
Speaker 10: So that it's an easier choice for them to pick us because it's just easier to roll it out. So we're really working on.
So we're really working on.
Speaker 3: Behind the scenes, how can we become an easier sort of technology rollout to that schools? It's an easy decision to pick us. And then 2nd, we're looking at how do we kind of go from a monoline product of full service disbursements that we offer as the main product today to being able to expand.
<unk>, how can we become an easier sort of technology rollout to the schools. It's an easy decision to pick US and then second we're looking at how do we kind of go from a mono line product of full service disbursements that we offer as the main product today to being able to expand the products that are relevant to our universities in south.
Speaker 3: products that are relevant to our universities and solve another pain point for them to just create a stickier relationship or more value-additive relationship and potentially a more revenue
Another pain point for them to just create a stickier relationship with more value additive relationships and potentially a more revenue.
Speaker 10: you know, generative opportunity for us as well. And an example of that is what I already mentioned before, the fraud tool, the IDV as we identification, verification tool and product that we're expecting to roll out to new opportunities, new schools and existing schools sometime in Q1.
Generative opportunity for us as well and an example of that is what I already mentioned before the fraud tool. The IDB as we identification verification tool and product that were expecting to roll out to new opportunities new schools in existing schools.
Sometime in Q1.
Thank you I see no other questions on the webcast to show Loveline I'll turn it back to you for closing remarks.
Speaker 2: Thank you. I see no other questions on the webcast queue, so Lovleen, I'll turn it back to you for closing.
Speaker 10: Great, thank you. So thank you again everyone for joining us today and it is the holiday season. So I hope everyone really enjoys the holidays and we'll see you next quarter. Thank you.
Great. Thank you. So thank you again, everyone for joining us today and it is the holiday season. So I hope everyone really enjoyed the holidays and we'll see you next quarter. Thank you.
This concludes today's conference call. Thank you for your participation and you may now disconnect.
Speaker 11: This concludes today's conference call. Thank you for your participation and you may now disconnect.
Okay.
Yeah.
Yeah.
Yeah.
Okay.
Okay.
Yeah.