RPAY - NASDAQ

Good afternoon. I'd like to welcome everyone to REPAY's Third Quarter 2024 Earnings Conference Call. This call is being recorded today, November 12, 2024. I'd like to turn the session over to Stewart Grisante, Head of Investor Relations at Repay. Stewart, you may proceed.

Thank you. Good afternoon, and welcome to our third quarter 2024 earnings conference call. With us today are John Morris, Co-Founder and Chief Executive Officer; and Tim Murphy, Chief Financial Officer. During this call, we will be making forward-looking statements about our beliefs and estimates regarding future events and results. Those forward-looking statements are subject to risks and uncertainties, including those set forth in the SEC filings related to today's results and in our most recent Form 10-K. Actual results may differ materially from any forward-looking statements that we make today. Forward-looking statements speak only as of today, and we do not assume any obligation or intend to update them, except as required by law. In an effort to provide additional information to investors, today's discussion will also include references to certain non-GAAP financial measures. Reconciliations and other explanations of those non-GAAP financial measures can be found in today's press release and the earnings supplement, which are available in the company's IR site. With that, I would now like to turn the call over to John.

Thanks, Stewart. Good afternoon, everyone. Thank you for joining us today. Q3 represented another quarter of profitable growth at REPAY, with gross profit growth of 9%, adjusted EBITDA growth of approximately 10%, and free cash flow conversion of 139%. Our year-to-date results represent strong double digit adjusted EBITDA growth and the acceleration of free cash flow conversion towards our updated full year target. Throughout this year, we have been determined to make progress on our three main strategic initiatives to drive growth for 2024 and beyond. As a reminder, they include our go-to-market efficiency, client implementations and a focus on product. Our Q3 consumer payments performance represents the continuous execution of our core growth algorithm, which includes growth from existing clients as well as signing new clients over the past several quarters. Overall, our core consumer payments growth continues to benefit from the ongoing secular tailwinds of processing more digital payments for our clients across our verticals. During the quarter, we further strengthened our existing software partnerships while adding new software partners. Our consumer payment segment now has 176 software partners, where our go to market and consumer support teams continue to develop our sales pipeline and improve our clients' experience. We added several new clients to our platform in Q3, including 13 new credit unions, bringing our total credit unions to 313 out of the roughly 5,000 in the U.S. In addition, we are gaining traction with regional financial institutions from the direct integrations of our payment technology into multiple core financial institution and credit union software systems. Our robust technology, customizable features and ongoing client support represents a differentiated solution in the marketplace, leading to a healthy sales pipeline. We are now live with the previously announced auto captive lender, which we believe will be a contributor to growth over multiple years. We began processing in late Q3 and expect a measured ramp during the remainder of 20 24 through 2025. We also began processing for our mortgage debit acceptance offering with a select group of mortgage servicers during Q3, and we continue to expect contribution from this multi-year opportunity to begin in 2025. In addition to new client wins, our growth opportunity continues to extend with existing clients. Across our verticals, there are countless examples of clients that began initial implementation last year, started to ramp their processing needs with our REPAY's technology, and through our client support, came back asking for additional offerings such as IVR, Text to Pay or Digital Wallet for both their existing and new portfolio volumes. Additionally, the accounts receivable management vertical continues to be an attractive opportunity with multiple years of growth ahead. Throughout this year, we have expanded our accounts receivable management software partnerships and started implementing for several outsourced accounts receivable management and loan servicing providers in the U.S. And lastly, in value added services, our Instant Funding product continues to see healthy growth with transaction volume up approximately 24% year-over-year. Over the medium term, we continue to evaluate new areas of expanding our Instant Funding capabilities across our verticals. During the quarter, our growth was partially impacted from normalizing consumer spending trends, lapping the significant and immediate contribution from a large personal lender in 2023 and the loss of an RCS client, which was purchased by another processor. Shifting over to our Business Payments segment. During the Q3, our Business Payments gross profit grew by 67% year-over-year. Gross profit growth was driven by strength in our core AP business, solid contributions from our political media vertical and the ramp of live new clients during the quarter. We continue to see strength within the healthcare and hospitality verticals and signed several new enterprise clients including the University of Florida Health Systems. U.S. Health Systems is one of the largest academic health and research centers in the US with facilities in multiple cities across the state of Florida. Once fully ramped across locations, clients like U.S. Health Systems and other enterprise healthcare wins become top contributors to our growth. Additionally, we began to benefit from political media spending during Q3 while also onboarding several large new clients during the presidential election cycle, which is great for election cycles into the future. For 2024, our preliminary data suggests that the strong media spending trends continued through November. During the quarter, our B2B growth was partially impacted from corporate spending patterns within pockets of existing clients, leading to lower volumes. We remain confident in the top of the funnel sales pipeline as our go to market approach is continuing to win new enterprise clients and software partners. In AR, we are focused on optimizing payment acceptance, enhancing our ERP partnerships and reinforcing our support teams to maintain exceptional client experience. Within core AP, we continue to grow our software partnerships while enhancing integrations with existing software partners and increasing our supplier network to now over 330,000 suppliers. Our real time vendor enablement process continues to grow the supplier base by vertical, and our vertically driven go to market strategy further strengthens our ability and confidence in building a healthy sales pipeline for our now 100 software integrations and partnerships within Business Payments. A new integration that was announced during the quarter was with Altair, a hospitality software and performance optimization platform. Through our integration, Altair provides a one stop shop for their clients to streamline their operations by automating the entire vendor payment process, while also providing faster and more secure payment options within Altair DigiPay. In the education vertical, we are now live with Blackbaud. Our team is looking forward to building our partnership, ramp new clients in 2025 and contribute to the business payments growth for multiple years to come. As you can see, our vertical go to market strategy is driven by directly embedding our payment technology within software partners like Altair, Inflow and Blackbaud to solve clients' unique payment needs within the various verticals we serve. When combining our software partnerships with our go-to-market sales teams, we're converting sales leads into signed clients. Within accounts payable, we're also excited to announce our new partnership with Mastercard to optimize check and ACH payments. When combining our Total Pay platform with our Mastercard partnership, REPAY can recognize our clients' payment flows faster, leading to further automation and digitization of payments. Across both Consumer Payments and Business Payments, we have been able to grow REPAY by leveraging our now 276 integrated software partners, expanding our product offering and developing our sales and support teams to provide clients with a seamless onboarding process, while consistently evolving our tech platform. Internally, we look to further scale our business as we automate manual processes, enabling us to expand free cash flow conversion for the remainder of the year and beyond. Additionally, in the Q3, we completed the convertible notes offering while extending and up sizing our revolving credit facility to provide us with the flexibility to continue focusing on profitable growth and accelerating free cash flow. Our capital allocation strategy remains focused on creating value for our shareholders while maintaining a strong balance sheet with ample liquidity and financial flexibility. Our balanced approach incorporates reinvesting in organic growth opportunities, while continuing to be open to accretive strategic M&A and opportunistically repurchasing shares under our buyback program, which we utilized during the Q3. We believe the market continues to undervalue REPAY's profitable growth, strong balance sheet and the ability to accelerate cash generation. REPAY has been a rule of 40 since becoming publicly traded in 2019 while also remaining committed to allocating capital to drive shareholder value. As CEO and as part of the commitment to driving shareholder value, I continue to evaluate all aspects of our company and, if necessary, take actions to realize this value. We are focused on running the business efficiently while continuing to execute on profitable growth and free cash generation. With that, I'll turn it over to Tim to go over our Q3 financials and our outlook for 2024. Tim?

Thank you, John. Now let's go over our Q3 financial results before I provide an update on our financial guidance for 2024. In the third quarter, REPAY delivered solid results across our key metrics. Revenue was $79.1 million an increase of 6% over the prior year third quarter. In Q3, gross profit grew by 9% year-over-year as we continue to benefit from processing cost optimization and automation initiatives. Our Consumer Payments segment reported gross profit growth of 2% in Q3 6% year-to-date, while our Business Payments segment gross profit grew 67% in Q3 33% year-to-date. Adjusted EBITDA was $35.1 million representing 10% growth in Q3 and 12% growth year-to-date. Q3 adjusted EBITDA margins were approximately 44% demonstrating our relatively stable SG&A cost and disciplined approach to managing operating expenses, while continuing to support sales, implementation and client service teams across the company. Third quarter adjusted net income was $21.2 million or $0.23 per share. Q3 reported free cash flow was $48.8 million. During the quarter, free cash flow benefited from our solid growth, while also seeing the flow through from managing both operating expenses and CapEx during the year. In addition, net working capital and free cash flow were favorably impacted by approximately $20 million through the timing of client settlement accounts and approximately $15 million is expected to reverse in the fourth quarter. Without the net working capital timing impact, Q3 year-to-date free cash flow conversion would have been approximately 80% and 60% respectively. Overall, free cash flow conversion remains in line to our expectations and is on track to meet our updated full year outlook. As of September 30, we had approximately $169 million of cash on the balance sheet with access to $250 million of undrawn revolver capacity for a total liquidity amount of $419 million. REPAY's net leverage is approximately 2.5x total outstanding debt of $507.5 million comprised of $220 million convertible note due in February 2026, the 0% coupon and $287.5 million convertible note due in 2029, the 2.875% coupon. Continuing to expect net leverage to naturally decline from our strong profitability and cash flow generation excluding any potential M&A and share repurchases. During the third quarter, we were actively using cash for share repurchases. As of September 30, there is $36.2 million remaining available under the share repurchase authorization. Moving on to our thoughts for the remainder of 2024. Our year-to-date results are driven by our growth algorithm of growth with existing clients, the full year contribution from clients that began ramping during the prior year and growth from signed new clients with a measured implementation timeline. Our 2024 outlook is based on our solid year to date results and current trends that we are seeing across our verticals. We continue to expect full year 2024 revenue to be between $314 million and $320 million. Gross profit to be between $245 million and $250 million and adjusted EBITDA to be between $139 million and $142 million. We continue to expect approximately 44% adjusted EBITDA margins and anticipate adjusted EBITDA to grow faster than revenue and gross profit during the year. We are increasing our reported free cash flow conversion outlook from 60% to 65% because of the positive net working capital impact during the second half. Our original full year free cash flow conversion target did not incorporate the approximately $20 million net working capital impact that occurred in Q3, of which $15 million is expected to reverse during Q4. The updated outlook implies reported free cash flow conversion will be below the year-to-date free cash flow conversion, but will be higher than 60% when excluding this impact. Without these onetime networking capital dynamics, our free cash flow conversion remains on track to accelerate year-over-year. Across REPAY, we continue to see the sales pipeline develop from our software integrations and partnerships, giving us the confidence for sustained multiyear growth ahead. As a reminder, our Q4 quarterly cadence is expected to benefit from incremental contributions of our political media business in the Business Payments segment. Through early November, we saw healthy growth related to the presidential election cycle in 2024. As you can see from our year-to-date results and full year 2020 outlook, we remain focused on profitable growth, finding efficiencies across the business where we can scale, leading to an acceleration of free cash flow conversion, while also maintaining prudent investments towards product and automation. I'll now turn the call back over to the operator to take your questions.

Thank you. [Operator Instructions]. The first question comes from the line of Ramsey El-Assal from Barclays. Please go ahead.

Hi. Thank you for taking my question this evening. I wanted to ask about organic growth in consumer. And you mentioned a couple of headwinds you faced in the quarter softening -- normalizing consumer spending trends, I should say. You mentioned a client loss and there was something else in there that I think you called out. Could you maybe elaborate a little bit on what happened in the quarter with organic growth and maybe also speak to what we should be expecting in Q4 and the sort of exit rate into 2025?

Yes. Hi, Ramsey, it's John. Good evening. So as I mentioned, the normalizing consumer spending trends, what we saw on that side of the business is, it continued to normalize during the quarter as consumers were facing some ongoing affordability pressures impacting the auto and the credit union verticals. In general, the lenders maintain a tighter lending environment, so some consumer softness in personal and credit union autos. But we are continuing to win and add new clients within these verticals like credit unions and financial institutions. And across Consumer Payments verticals, we've aligned our vertical go to market strategy to go after large enterprise clients. So in the midst of some of the consumer spending environment, we are winning and implementing some enterprise clients. But as you know, that takes time on the enterprise side.

And I would add that across those areas, so just some consumer spending softness and then as you mentioned and as we called out, there was a loss of a client within RCS and some of the larger enterprise implementation delays. I think when you kind of take those all into account, you are in kind of the mid to high single digit range for Consumer Payments organic growth.

Okay, fine. And then organic growth. Okay, fine. And thank you for that. And in addition, maybe a similar question on the B2B side. I think you also called out some corporate spend patterns and some pockets of lower volume in certain clients. Maybe you could also do the same thing for the Business Payments side of the shop?

Yes. Business Payments reported growth, as we discussed, is very strong. We had really nice political media contribution. We benefited from some of the presidential election dynamics, which we really didn't know would occur until the end of the quarter and actually the greatest volume we saw the highest volume levels were in October. So we did benefit from that. When you strip that out, we still saw growth in the quarter. But as we mentioned last quarter, there has been some consumer spending softness which we think will turn around eventually into next year -- excuse me corporate spending softness, which we think will turn around and that did impact some volumes. But we have added wins like the University of Florida Health System, which will be ramping. We are live with Blackbaud, which we're refining our go-to-market strategy and that will be a contributor into next year. And so there's lots of building blocks to growth there. But again, we felt good about the reported growth number and then even when you strip out political, we did see growth.

Great. Thank you very much.

Thank you. The next question comes from the line of Joseph Vafi from Canaccord Genuity. Please go ahead.

Hey, guys. Good evening. Thanks for taking the questions. Maybe we drill down a little bit first into the mortgage debit service offerings, progress there and kind of how you expect that to potentially roll out in 2025 and could it be a meaningful contributor to growth? And then I have a quick follow-up.

Yes, sure. I mean, as I mentioned earlier, we did begin processing for our mortgage debit acceptance offering with a select group of mortgage servicers during Q3. We do expect this contribution to be a multi-year opportunity, as you said as well, and really to begin in 2025 as we scale more with those particular servicers and then add additional servicers. And so we do think it's a multiyear from an overall offering perspective. Tim, maybe you want to add some more.

Yes. I mean, we feel good that the product is live and we have servicers utilizing it. We have done all the work with Black Knight that we talked about previously. And having live clients is great, not only to just prove out the solution, but also start gathering more data for future client rollouts. So we do think that there's going to be a benefit for multi years here.

Got it. Thanks for that color. And then just one more on consumer. Just maybe kind of looking at it a little bit differently in kind of same store performance versus new logos growth in 2024. Kind of how should we kind of look at that if you were to parse it a little bit more through that lens? Thanks a lot.

For 24, I think it's similar to what we talked about previously, which is where a majority of the growth is still coming from existing customers or customers that were ramping from prior periods. We have added some new logos like the Auto Captive that we mentioned and we do have some new we'll have some new wins in mortgage that will add to the debit acceptance that will drive more of the growth next year. But for 2024, the majority of the growth is still from existing and that's really just a matter of the clients themselves growing, adoption and the ramping effect that I mentioned.

Got it. Thanks, Tim. Thanks, John.

Thank you. The next question comes from the line of Andrew Schmidt from Citi. Please go ahead.

Hey, John. Hey, Tim. Hey, thanks for taking my questions this evening. Really appreciate it. Maybe, John, if I could ask you, you had a comment in the script about looking for ways to capitalize on value creation or realization. Maybe just expand on that in terms of one level deeper in terms of what you mean by that? Thanks so much.

Yes, absolutely. So just kind of reiterate, you obviously heard my statement earlier, but I really do think that the market continues to undervalue REPAY’s profitable growth. I mean, we have a strong balance sheet and then our ability to generate cash, we think we've demonstrated that this year, as we said we would do earlier this year. And then, I mean, we've been a rule of 40 since becoming public in 2019. So as a CEO, it is my job to drive shareholder value and the creation of that. So we as all the different things we're going to be looking at and we are looking at, we're evaluating all aspects of the Company, especially the drivers of profitable growth and free cash flow, but also evaluating our markets, our go-to-market strategy. We're looking at our relationships and our partners, our overall cost structure, reviewing our M&A strategy and just overall capital allocation is how do we spend our dollars to drive more growth, organic growth specifically. And we think that those opportunities are absolutely there. We think we're pulling the right levers. Some of those, especially on the enterprise side, will take a little bit longer to see. We can see healthy pipelines. We can see healthy implementation line areas of the company. So we're excited about the future part, but we obviously there's a near-term piece that we're working really hard on the business to drive those specific areas.

Got it. Thank you so much for that, John. And then if I could just ask a framework question. Obviously, we're not to 2025 yet, but I think this year, the organic growth outlooks for roughly, if my math is right, 8.5 to 11. That includes contribution of political media spend. Next year, obviously, that rolls off, but you do have a couple of opportunities coming on. A little bit of malaise currently with the spend, as you mentioned, but there are some offsetting opportunities. Is there a framework we can help us think about just FY 2025 growth? I know we have a longer-term framework out there, but just curious if there's some early sort of guardrails to think about just the growth algo next year? Thanks so much.

Yes, sure. I'll start. So for 2025, obviously, it's early. But we are already working hard as you as I was mentioning even on some of the things we're talking about earlier there. Working on we got a whole comprehensive plan we're working on. Given our doable revenue model, recurring in nature, we have a high confidence in our top line results. As a leadership team, we're in our planning stages right here. We're looking at all of our key objectives and seeing how we'd really drive that for next year. As we build our strategic plan and priorities for next year, we will give some further detail as we enter into the next earnings call about those details of that plan, our growth opportunities and how we plan to do many of those things as we look out into 2025.

Yes. I mean, I think to add to that, it's also just keep in mind too in terms of thinking about exit rate and what that means for next year. I mean, there typically is seasonality in the business in Q1. The second half of next year, there'll be a positive benefit from not lapping this RCS client loss. And then there's the other pieces around the mortgage debit initiative, the large auto cap to rollout, other enterprise wins implementing. And we're still expecting there to be overall recovery at some point in the consumer verticals John mentioned and specifically in ARM. So there's lots of different pieces that we're looking at that would bridge us from where we are today to where we think we'll be next year. But again, like John said, it's early to talk more specifically about that.

Absolutely. I really appreciate the comments. Thank you both.

Thank you. The next question comes from the line of Peter Heckmann from D.A. Davidson. Please go ahead.

Good afternoon. Thanks for taking the question. So it certainly sounds like political media spend may have increased for the year may have increased like 40% to 45%. So that does represent a difficult comparison for next year. I mean, I guess, can you talk through some of the specific things that you expect within the business payments segment to kind of help offset that and maybe get you closer to a smaller decline, I guess, is what I'm looking at. I mean, the organic growth rates you've seen in business payments have been just a little soft. And is that a business that we still think should be able to grow in the low double digits?

We do think it has that potential. There's a couple of pieces to that. We think there's a real opportunity to monetize more of our clients' total payment volume. We have a total pay solution and there's certain situations where we're predominantly processing virtual cards for clients and we want to be monetizing other forms of payments such as enhanced ACH. So we have a specific targeted initiative around monetizing more of the overall volume and then building out the supplier network helps with that. We're up to over $330,000. So that's a specific initiative. We have enterprise software opportunities like Blackbaud to we've embedded our payable solution into that and we are refining our go to market strategy to drive more wins within that software relationship and other software relationships we expect to add. So those are some of the key initiatives for us next year. It's around payment monetization and driving payables within enterprise software. Those are the key areas of focus we think can make this business can get this business back to teens plus growth.

Okay. That's helpful. And then just in terms of that auto OEM, did I hear correctly that you said it went live about halfway through the quarter?

It was toward the end of the quarter and we are seeing volume ramp now and that will continue throughout not only next year, but probably multiple years. That's we've seen that in the past with the auto captives that we are processing with. And so that's why we feel excited about multi years of growth. And so it's live now and we're doing what we've done in the past which is facilitate further ramping.

Okay. And so do you typically just get the new loans in the beginning and as the book turns over you get all of them? Or is there actually a conversion of a portion of the back book?

It's typically a conversion, but they'll convert by portfolio. And so we'll get a specific portfolio and make sure that's running smoothly and then we'll get additional portfolios and make sure those are running smoothly. And again that can happen over multiple years. So it's not just new volume, it's conversion of existing volume as well.

Okay, great. Thank you.

Thank you. The next question comes from the line of Rufus Hone from BMO Capital Markets. Please go ahead.

Hey, guys. Thanks. I wanted to come back to the organic gross profit growth. So excluding the political media, can you kind of quantify the components of the deceleration you saw from the second quarter into the Q3? And then if you could sort of help us bridge from that core organic gross profit growth that you saw this quarter to how you're thinking about the fourth quarter that would be great. Thank you.

So as I mentioned, I mean, some of the components quarter-over-quarter would be the RCS client loss, which as John mentioned that was that client was purchased by another processor and that converted to them and that deconversion process happened over the course of the quarter and impacted us and will continue to impact us into next quarter and the beginning of next year. And that was probably a couple of points of overall growth. There is consumer spending, just general softness that John provided some details on by vertical which I would also quantify to be call it 2 or 3 points of growth. And then there is some enterprise client implementation delays call it another point or so of growth and then corporate spending softness that we've talked about within B2B and another point or two. So that's how we would bridge from the normalized organic growth in Q3 back up to somewhere where we were in the first half of the year.

Very helpful. Thank you.

The next question comes from the line of Alex Newman [Ph] from Stephens. Please go ahead.

Hi. Yes. Thanks for taking my question here. Instant Funding growth grew 24% this quarter. Can you just talk about some of the drivers there and what percentage of revenue that business makes up in consumer payments?

Yes. So we're excited about some of the things we're doing with our Instant Funding product, which is as a reminder, that's we're using the Visa Direct and the Mastercard Send Networks to send funds directly. Specifically, as we've mentioned in prior calls that we use that for specifically the funding of personal loans, whether those be installment loans, etc., on behalf of our clients and lenders. We are coming out of the Q1, we had a large win last year, we're lapping, that was a major user of that. We do have a healthy pipeline of some of that some of those additional things in our pipeline that we would expect later on in the Q4, potentially in the Q1, as we continue to implement some of our existing clients. Mentioned that on our call as well, where we have our clients continue to use multiple products and solutions we have, even though they may not start out using all five or six of the things we have. Generally, they add on those additional things and that obviously contributes to same store. Tim, maybe you want to mention about contribution level.

Yes. I'd say overall across the company non-card volume-based products represent about 20% of revenue. And specifically within consumer, the instant funding business, which is primarily the use case today is within personal loans like I said is growing nicely. And we mentioned the payment monetization opportunity in B2B, but there's also a monetization opportunity in consumer where we have just I would say probably less than 10% of our personal lenders using this product. And so there's upside just in selling this product to existing lenders and there's examples of that for other non-card products like ACH where we could penetrate ACH further across our existing client base and consumer. So we see monetization opportunities across both consumer and business payments and instant funding is a great example of that.

Very helpful. And then just quickly, can you talk a little bit about the current M&A strategy, what you're seeing from a valuation standpoint and potential areas of interest?

Sure. So as Tim mentioned, we are heavily focused on how we allocate our capital, obviously organic growth being one of those. But on the M&A side, we have seen definite activity pickup in the market from a for sale perspective. There's several things that we have our own organic pipeline of deal flow that we look at and we find some attractive things that are out there. Obviously, valuation seems to be more normalizing this year versus the last two years. So for the right particular verticals, for the right particular things that would be embedded software for payments embedded payments and software that those would be attractive things we would look at, at attractive valuations that can obviously do something that would drive growth for us. But we are seeing increased activity. Some of those things could be late fourth quarter from an overall meaning those particular assets changing hands or it could slip into the first quarter of next year.

And we are seeing opportunities across both consumer and business payments, so across both segments. And just to kind of step back in terms of the overall capital allocation strategy, like John said, the primary focus is reinvesting into organic opportunities and we're doing that with enterprise sales and consumer and primarily in enterprise software and business payments. And then we are open to accretive strategic M&A. We are looking at various deal sizes, but likely looking at tuck ins that could make sense for us. And then we have the authorization that I mentioned to opportunistically buy back shares. All of that we think could keep us in a very reasonable leverage level and allow us to address the $220 million of remaining convert due in February of 2026. So again, focused on organic growth and then balancing M and A and buybacks with being able to address the remaining 0% coupon convert, while also maintaining reasonable leverage levels.

Thank you. The next question comes from the line of Patrick Ennis from Credit Suisse. Please go ahead.

Yes. Thanks for taking the question. Wanted to ask on float revenue associated with settlement accounts. Who is earning that income typically between repay and the sponsor bank? And does that play a role in the discussion around sponsor bank fees when they come to the table to negotiate?

Just to clarify, we do not earn float revenue. Those accounts are not held with us meaning they're essentially merchant accounts and there's a delayed settlement to the merchant, in this case specifically in ACH. And so because of that delay, we have the cash, but we're not earning float revenue on that and the sponsor bank fees, which flow through COGS, would be separate in that discussion. Now that there are opportunities for us to evaluate flow revenue across both consumer and business payments, but today that's not a factor.

Okay. Got it. Understood. Appreciate it.

Thank you. As there are no further questions, I would now hand the conference over to John Morris for his closing comments. John?

Thank you everyone for your time today. Our year-to-date results demonstrate our solid execution towards our 2024 outlook and accelerating free cash flow. We will continue to remain focused on profitable growth, executing on our strategic initiatives and allocating capital to drive our shareholder value. Thank you for joining us today.