PAYA - Earnings call transcript Q2 2021

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Operator

Good morning, ladies and gentlemen and welcome to the Paya Holdings Inc.

Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Mr. Investor Paya. of Head Humphries, Relations at Matt

You may begin.

Matt Humphries

the quarter XXXX morning, and conference second to welcome Good earnings Paya call.

filed at assumptions, based Before everyone X-K forward-looking and we Form of refer as Company’s reflect our call. this Paya’s statements business objectives and that the the statements. Please be well that SEC or remind update the about release beliefs, press expectations this disclosure we today information for current on earnings with obligation events strategies, to today’s discussion business, will to financial begin, will statements any statements the contain made growth occur only let today no guidance, our of current made expectations and me will statement after as that undertake the end and call. forward-looking to including discussed our on forward-looking the other All reflect

more the Risk could can the call Factors call, we You the March In that the of X-K with XX-K factors the SEC. differ during actual financial section in in results filed also that our the press release. discuss of cause and financial SEC via periodic Company’s subsequent in about from is discussion X, on the to earnings Company This reports Also Form available files performance. learn information certain materially filed today’s with specific non-GAAP XXXX risk supplemental the the measures GAAP and will this webcast. our reconciliations non-GAAP to are SEC. provided with

note, quarter presentation website. Relations of section Investor described just a to the have supplemental of Paya second I the XXXX information the all posted find the Paya’s Please website. also can Relations Investor section we You on

CFO, Now joining today Hack; us the Paya’s Renzulli. and are call Jeff Glenn CEO, on

Following me the the questions. remarks, let will we that, to turn call over their open your With to call Jeff. prepared

Jeff Hack

us for And everyone. Thank today. Matt. morning good you you, joining Thank

acquisition to financial late model XX% XXXX $XX.X cycles. Revenue card highlights growing revenue ACH XX% well including an to solid grew Payment which to billion Glenn over adjusted growth second of million by XX% the as strength million XX% same review economic EBITDA On will quarter. XX%, grew over we from financial card results record our in XX%. quarter volume details differentiated XX% compared volume from quarter period Paragon adjusted the and to key both to with and April. revenue updated As in varied as organic financial XXXX our led growing grew guidance. basis, highlights over grew in XX% the business cover Paya’s our a second $XX.X discuss year-over-year more incremental ACH and the contribution and grew $XX of shortly, grew EBITDA volume the in

to progress making maintaining Phoenix footprint has in the The Paragon’s area. the in is late on results consolidated our closed integration we are go largely migration to and our As solid key I’m the acquisition been conducted April, and in our acquisition business. ahead and Northern are we’ve and confident, mentioned of efforts underwriting talent completed. Payment we’re partner pleased expected busy Furthermore, with our prior about executing will very we our and integration strategy within accelerate Virginia in-line The office report that Paragon we to are synergies. the closing, excited physical almost and opportunities we’re forward realize seeing. Solutions. efforts. we our much presence track sales of And was Since the growth plan, strong sales on also we combined complete functions development We’ve been while

our strengthen solutions. of best technology working we platform enhance on both we’re consolidation as the and take commerce diligently worlds integrated and Finally, to

cloud-based and key of ability our to give in ability acquisition, higher. of ISV to progressing partners, book another opportunities strategy. to rates us Speaking integrating the growth vertical. growth. market-leading development offer United and efforts our base the RECURXXX, penetration more quarters. nice sales pillar wins penetrate Paragon across processes automation for add provider of our as In key vertical, key such key term mention RECURXXX And saw through told existing to recent and we’ve a our some medium strategic partnership in The And efficiency quarter additional [indiscernible] adding not drive component and been a finally, some partners talent is new to us I’d Through also value wins experienced continue forward and overall this to further dramatically are pursue. partners of back that with recently to improving that’s remiss States, sales we customers confidence to a integrated set the solutions clients on our coming Life existing office focuses verticals able government of in our well. existing added with our to healthy of partners drive payment one pipeline within results these Storage we BXB recent over customers, our the to growth with look be BXB while primarily experience. is All Paya partner to software and And while improving had the our new these the of some solutions that user able

additional improved to customers. user Turning partners and through enhancements our features to their in our we’re the and for solution delivering tools, products Paya Connect new features and efficiencies better across functionality and resulting solutions, experiences, stack

book to from to and do ability we market benefit time new Paya end our partners with and faster. do on who our no and to impact, bringing to customer API large Specifically, to little our of business this additional scaling rapid but through only revenue partners ourselves and hosted partners support Paya convert to tools. ability differentiate their digital Not our we’re existing we

market for cloud-based to payments and presence the in a as delivering our we new delivered functionality, solutions enhanced while product and through also U.S. also Paya’s We in market the being back-office on channels in offerings key supporting serve. hallmark differentiate the position is updated for and the partners in unattended Leveraging integrations. and innovative, ERP into providing continue provider of our innovation to our attended payments such competitive and as tools new focused Sage’s card and Paya solutions markets e-invoicing. critical we our relentlessly differentiator Developing approach a preferred

mention As verticals. see our of a we’re we’re pursue varying acquisition years. in opportunities few pipeline which over make strategic current continue sizes seeing targeted to parts to the our finally, deals we and and front sheet, in healthy in us. currently to types capacity strengthened our The the balance support next accretive key opportunities significant With evaluating growth Glenn investments further business was financial of our are of will by across or have shortly, recent M&A. to and of complimentary debt our we adjacent verticals refinancing, And existing

these walk to turn profile. business will sense it can financial into pursue over Glenn opportunities compliment to as you the organic With broader and attractive a make provided strategic powerful Glenn? growth that, Paya is they our I’ll We the and M&A financials. to through integrated be

Glenn Renzulli

everyone. morning, good and Jeff, Thanks,

strength quarter financial the solid pleased across with seeing the results our business. and We’re second we’re

XX% quarter Total and ACH and Specifically, performance year-over-year. $XX.X XX% incremental was services revenue XX% of contribution by quarter, In adjusted increase was $XX.X grew million, mix XX% ACH Payment XXX XX%, year-over-year the growing payment profit gross for with we the increase of quarter, million, our million. volume volume our the $XX continue the verticals. gross the led in BXB margin transactions $XX.X second XX.X%, billion, in year-over-year $XX.X to the XX% expenses versus up with combined from Gross Solutions Services expansion our key revenue million, last up was in quarter. was while and card profit of was growing Paragon the revenue was of in product up Solutions at XX% up growth $XX quarter government $XX quarter basis In points. up XX%. with up million, and XX%. our nearly operating $XX.X volume profit grew verticals ACH in of was with Integrated second gross an margin ACH offerings deliver acquisition. Total BXB drivers government XX%. year. in Payment Integrated favorable revenue XX% came an and ACH million, were million

our tech As related acquisition we related combined innovation. expenses Paragon with layered in investments to and growth targeted product to

the Costs, sense costs. growth when allocation investments expect XX.X%, to makes investment where to on provided the were Adjusted company while EBITDA and public a margin quarter our to year. company was applicable make over $XX.X capital which aligns in EBITDA year-over-year We million, the prior quarter and in up year-over-year of the with the second framework. return were incremental, Adjusted XXXX. continue XX% targeted versus private in primarily we increase due not decline to

public these been adjusted EBITDA the growth costs, Excluding quarter. XX% have in would company

loss the expenses completed net Paragon The one-time million in recently income driven related expenses. and the prior net transaction year. was related for GAAP was million income was our quarter for million Finally, $X.X $X.X $XX.X Adjusted versus of the debt by net loss quarter. to refinancing

times. of the $XXX leverage in a debt of had gross million Regarding the of and end our second at ratio we balance cash sheet, with $XXX quarter, million net X.X approximately

April expense year. upsize of liquidity and investments We result on recently continue to growth positions our million second currently we in for end refinancing XXX.X M&A. Net which We’ve thresholds. the quarter to as million an have diluted accretive the $XXX operating not closing to debt shares in cash $XX earn-out And in $XX refinancing, was million. that the lower in able should is rate, million cash X.X June. is were to Our by late we accelerate the million inclusive of million undrawn able our per total interest interest was focus late and us approximately quarter cash added through position at strategic count completed and quarter, met finally, the second approximately shares million $XX provided additional were activities end share savings million. of from completed At our issuance which well reflects $X yet outstanding, balance approximately it was $X at data the Paragon our approximately revolver, the our also debt sheet that of to been meaningfully to opportunities

Our supplemental quarter. walkthrough provided end share an earnings the updated this of count morning at our of the presentation illustrative contains

our full updated XXXX. for year to Turning guidance

year-over-year to to reflecting margin arrange continued to our raised the a $XXX strong gross range our XX% are range. $XXX We raising due million, revenue outperformance over reflecting also at margin midpoint million XX%, our business. guidance performance We’ve to revenue total of growth to this XX% of continued in

and place on in EBITDA Our investments gross the range as reflects million to guidance $XX remains margin. we adjusted $XX revenue business outperform our targeted of and growth million in

As developments back a close final the Jeff that point, have COVID-XX potential for this the of over on we or duration I’ll remarks Jeff? call to morning. and are the That recent my business the concludes year. the may monitoring prepared to out. closely not turn may impacts

Jeff Hack

public our short partners. becoming solid and to a especially differentiated relentless also few and solutions commitment added which Thank I’m proud we serving this XXXX dedication you, ago. talent to of quarters caliber employees, to Glenn. and the proud index company we Russell this results offer a speaks quarter, the we were unique of I’m our quarter, that the delivered of the our after just

and ahead we accomplishments, that, on driven with grow Although, operator, our further as we secular we’re deliver recent ongoing take pleased we to business our our remain a promises questions. digital see what’s transformation, fragmented shareholders. an and to focused tailwinds and middle to opportunities with scale by on With partners market ready we’re our all

Operator

Thank Evercore you. question [Operator Togut Instructions] David comes from Our ISI. first with

open. Your line is

David Togut

and Thank grew you. in for of Revenue notably more rate the than quarter ACH. morning. above came twice for Good estimate our transaction volume growth the spreads ACH

quarter? that So can change size in on was might’ve through average And impact the you there pricing and transaction talk contributed? material the any

Glenn Renzulli

on see focused on the take we QX. you’ll some This it from to right, pricing That’s Glenn. ACH not this in that. Happy increase And side. the in card, David. quarter lift Yes, correct. sequential is spreads Hey, versus saw

ticket to your So a saw little average about, just also great growth verticals, on overall we bit lift, level, size, provided XX% saw but lift there ticket ticket, some But I you and think which then especially BXB lift of yes, be well, question when as in where revenue in then a there. continues our and us, saw ACH we right, yes, ACH for a year-over-year. to we story mean,

ticket past which revenue volume correlated there, the through to more size and kind So volume, good again, we’ve well, growth average the the we’re the side of on as in is a the talked transaction but heavier which already growth. little really accelerates getting ACH

a it So very quarter, the lift the that perspective, spread and ACH the helping year-over-year ACH But before, was we’ve side in that’s pleased influences got but some with again, from we and from growth. which with year-over-year favorable. pricing that gone through yes, card

David Togut

end then brackets, for revenue keep of toward in range. that revenue walk it. Thanks bottom the of consensus, And the of of end middle and updated range? the Got or you you the some for XXXX that. EBITDA and your might take that and to range the EBITDA might tailwinds expectations you Can the the through guidance your new high headwinds lower

Glenn Renzulli

the the yes, in nice quarter saw given a we’re on top I quarter. had David, environment, broad to right. that. a strength, to very happy conservative Again, and – Yes. line BXB mentioned Look, is Glenn. we again guidance, be side, the trying very, current We really good which our obviously think take this strong

again, lowering we right, second – then But your macro the versus I to the put guidance on because a on higher the is we to range, transfer our I unknown So a out But think think – more could it kind today, stays compared hitting would answer see of more to into we aside be where slowing accelerants, feel, wasn’t factors. line level, on the Certainly, there’s that top as to at tried we’re from not. slight if I there, would that continue the nature, conservative quarter, line kind end the mean, built of kind of those if is. with at again, the that, economy certainly, continued again, we number if I of a it that us accelerants of forecast. And as more guidance. top conservative question

David Togut

it. Got

ACH quick growth your and in What question. have revenue second of do level final guidance? a embedded Just card half XXXX you volume

Glenn Renzulli

the pricing, again, forecast I Yes. into a do get see just because have volume volume helps typically stability, a don’t – even harder of us healthy bit guidance fee little the to of think some component and still and we fee changes little. which it’s we if just some service a

– correlates Again, a to volume we’re try avoid was quarterly reason we – kind XX%, guidance. why, you’ll XX%. saw is good the XX% little transaction ACH – in you closer to So example we and ACH of tend again, to seeing the the volume the revenue which really card know a quarter, but, again, growth card up side

month half, lot each seeing good, a second that. be but that so think very that and that so solid careful And continuing the carry a I just just So business. think with across to of in unknowns far and there’s trying to through here good I see we’re keep kind quarter we yes, strong the see performance about we want to of such we’re

David Togut

much. Thanks Understood. so

Operator

Thank you.

with Bob Our William comes Blair. next from question Napoli

open. line is Your

Bob Napoli

healthy good the so the look, just was quarter? July up Thank And trend Glenn, July and it how how – how going trends I And the did guess, through did that versus you. did with morning. and at rate? acceleration? I that we steady were guess, pretty last you the see steady of had to kind a had you continued trends be strong that was April, has popped, when a

Glenn Renzulli

here, seeing of volume we’re right. higher kind hold a at level Yes,

seeing seeing not an QX. right we’re but we’re So decline, any into also like accelerant that of kind

second at what QX, similar but think quarter we of in in obviously So just strong what trends moment. we early still with we’re seeing saw quarter in continue the right. the from the kind as very I July, performance the But saw

Bob Napoli

it Can BXB it little strong bit vertical? out? you an else beat non-profit, guess, more I I color healthcare, by a maybe seeing as out, And call the we you’re – area. on BXB stand and in strength what’s anything how mean,

Glenn Renzulli

industrial we’re look, ticket serve, factor positive get construction, verticals we price think couple talked getting about here. that. size, Yes. That’s invert That’s And I of now is, of No, Bob. flow through. Yes, sub seeing the – Thanks Glenn, manufacturing, those One absolutely. This right a BXB, with a we benefit right. hit again. factors side. is big the we some in good of

some systems growing That kind just We also area. have manufacturing our this focused growth services, or of manufacturer in partners favorable And on There’s also ERP, that there. is are us. field good organic providers. partners helping with

lifts I think bit thing, customer And finally little there, price that you actually that’s But we’ve we’re great. again, as all now, So seeing right the ticket on those well. growth, but wasn’t Healthcare, of BXB growth when year-over-year side. of on the just a is started we think – lead helping again, merchant the story now, side. kind about volume and lift factors got BXB which

that So coming last out year. trough of

the good overall more in story, government as healthcare, see the yes, see the continues to growth steady for we’ve trend at not spoken lift saw side, little really in an the volume above influx there a a So which just XXXX, little I the well, bit lag the in a such non-profit then in had a grow think there, more growth they’re overall the past, about nice helping business, but and starting the And us to and because year rate. that’s moment, number. this slowness based one activity you is we

Bob Napoli

perfect the you M&A, Thank and world the like just – add? you with, and would to would you in – look you what the the to was are for any environment And in business, competitive at what have areas last if you pipeline to add changes then on – a Jeff, like front, are where you. you’re competitive seen how you as

Jeff Hack

is morning, Jeff. Good Bob. This

those in take Let turn. me

our We we position. competitive landscape, all like relative together. competitive were So

very are or partners. of both We beat displaced in we serving great proud who and

We’ve So change larger any before Smaller which deals deals I to be the would too. great talked point about to tend in are several months. proprietary non-competitive, this discernible and not is process. often past competitive a

landscape, changed. the terms have again, of In our M&A not priorities

technology given first course, and broadening existing a at foremost of to capability. proprietary into verticals in is adjacent capabilities both finally, look not-for-profit, we our And going our and strength So Paragon of within perfect space look example our deeper strengthen we the verticals. healthcare existing then of and their

if you widening across, spectrum. value So add the the will payments

So we our about pipeline. good feel

We a we And which opportunities, work frankly, noticed, I bolstered and on successful guys – but disciplined you criteria. by transactions doing to on you lot to position and the a strong which need of gives and are we firepower our as deals think we of financial further and capital lot know, are like. strategic ample us have guys have, execute meet that

Bob Napoli

it. Appreciate you. Thank

Operator

Thank you.

question from next Our Peter Heckmann comes Davidson. with

line is Your open.

Peter Heckmann

Hey, everyone. good morning,

look Just last bit the growth when thinking acquisitions then the in like more. conversion bit we should from at quarter, added disaggregating about anniversary talk how about we Can large the about think the year? ACH underlying and possible, acquisitions late more you this a growth two growth a if those

Glenn Renzulli

no that. in Yes, so the growth was year-over-year. happy and to, organic happy the to XX% on take side, for Yes, quarter organic

contribute versus a XX% or Paragon it both sense for the are much quarter how TPG did gives and rate. So you growth in the contributing

the we’re that getting of from to excited think lift layered it’s December was a we’re the really more larger year about look, right? And item, that perspective, a I a that XXXX. happy is, yes, right, time So it, really bank and the broad-based Obviously, your as spend that’s story, that client, from then, in thing ACH on well.

of growth the ACH, trend And good the least. and demanding that sense make good a year-over-year in I option – that very right, really there, rails we’re right, transaction There’s – end to lot just there. and sizes part serve at are through market. lot just mostly, and seeing across board are from win not we’re them just at and capturing fourth for of So that quarter just excited growth, the willing But, it’s it’s again, we’ll that. see ACH our that just incremental a clients over certain a transaction think partially a that we’re the a wanting

a number it’s haven’t and to year. trend for expect of we’re growing maybe that So strong, we but going us, same probably I to a planning and the rate. don’t level our still not But the that continue think a budget done at above growth we AC as up, to business have yet, overall next target grow yet but we currently be above kind through of so growth XXXX, for continued area

Peter Heckmann

Okay.

determine, are given they then the than acquisitions, apples-to-apples the I trying a recent faster acquisitions overall on but it some would’ve I on kind the of assume growing Okay. was just I no capabilities, are growing mean, to additional just faster basis? And would company? notably year-over-year they

Glenn Renzulli

mean, Yes. our them apart, similar They a TPG government right, are. very attractive in FBS I area, to take both business.

the there So and some the growth, has which smaller mid of feature absolutely, in then and of to more good grow been the have really continue high allows do solutions, strong on point really there that strength where government municipal kind on Paragon end really of organic partners And to really was right, that SPS kind underlying us good acquisition, allows the client, municipal TPG rounding with the serve deal, really side smaller side. the of a really to a so to us great ISV on out offerings us. some

to so synergies targeting. we’re a really the kind the good that, about so and early excited that So are start and off and far integration good as also on well of we

So quarter but good more in. start there, go we’re to to off one work a

Peter Heckmann

it. Got

Okay, thanks.

Operator

you. Thank

from comes Davis next Raymond Our question James. John with

line Your open. is

John Davis

kind the line and unknown out conservatism back Quite on good variant as year. called the this having you guide, little a to of of of the Delta top a called times Hey, bit morning call, half you guys. out the few

there, you been it meaningful to fair can it have or just any outperformance helpful? is guide doesn’t the Delta, would if some become So on line, the raised that absent be impact comments say, see higher a top

Glenn Renzulli

Glenn. is this John, Hey,

I think fair. that’s

was and it of a some we kind I ahead getting consideration guidance those as thought definitely of not the of ourselves about and unknowns. think

think to way So fair a that’s I put it.

John Davis

line, then gross on as EBITDA as Okay. top nice And the well called investments. out you in outperformance the line, margin growth

just I or of a what is dive bit, exactly doing wanted you the investment that growth a little So technology, side? kind to people are in from

Jeff Hack

Jeff. Yes. it’s Hey, John,

– So as it’s feature of this noticed have you a sure the and simply function I’m And pace saw as we of of and to at Paya place. a this major – not of you know, is is we roadmap, those shifts, some the which capabilities what those few we’re in investments accelerate working continues and more to initiatives do. product to that’s happy opportunity our accelerate and doing grow the to

John Davis

last then me, Thanks. one Okay. the for Jeff. And

Just environments you all that larger like. and well obviously valuations the of we’re of perspective a from aware M&A deals or auctions, the what lot commented

a should that bit deal. more larger in chance not valuation a maybe quite deal? more, you that returns little Or a but about bigger, near-term? a the when How we So bit transformational, expect could on and tuck-ins capital, something do there’s do evaluating do little you think you’re you but think a guys

Jeff Hack

Yes, so, John, very good question.

our First our not this priorities have thoughts of all, and changed. around

tuck-ins. are opportunities, as transaction well larger on We both as working

eventually opportunity and accelerate important expect. have growth know, part have as we based We someone part as the our or lot As a to a that’s conviction investments our to need rate not wind changed. the here strategic would Paya need is a part impact their growth. in of that of small point there to else. very are capabilities on that criteria Paya sales mid-sized and of and and And great the solutions will of have great up the tuck-ins that will you And the companies on bar high business meet

I sure think guys playbook know, we’ve the a to make great synergies. integration you got capture we

we’re things is So large got right be to getting our the larger done that confident And your We’ve there both capital comfortable we’ll the And level tuck-in acquirers. and deals that trade and point, not number largely some it will would with. unchanged. of we at be enthusiasm disciplined for done. get we’re always

John Davis

guys. all Appreciate color. Thanks Okay. the

Operator

Thank you.

Chiodo Our next question with Timothy comes Suisse. from Credit

is line Your open.

Timothy Chiodo

question. around dig a for mentioned one everyone. of wanted Thanks government Good Thanks lot. I your what taking to morning, partners. you my into

You success mentioned been having that further you’ve with that partner. penetrating some

wins have from You that on coming some – partner. the

point within it’s think an important driver is growth your given partners. said your you’ve biggest clearly further I gains very existing that penetration

recap helpful would that stance. penetration it think I be to just

that, I partner think you partners. it some to and mentioned longest low newer last your from we a course, of can of range tenured talked, sort of digits when the single

it reach Maybe penetrated about, over were You in of book call five to the three talk on little years. a is a it, driver to how bit XX% average that up and where XX% and across next, the growth that range. range that’s just where could the maybe into XX% your

Jeff Hack

Hey Great Tim, it’s Jeff. question.

to this and digital second those rate you the some there So color are it contributors the is of that averages, sign are penetration. adoption is curve the hard you around give end within One of customers, electronic it. There to quantify a is in two And you general but predictable is, we just relatively penetrating, will space. customers. then of once our partners one payments

goes So zero, at quarters starts an their And perhaps the services, utility a first starting starts utilizing adoption thirties the it’s first typically XX into then somewhere, perhaps penetration the in when digits as is rate typically range. or what and above week, the our zero. XX% penetration occurred example, over single

of point science. a is our underlying your significant base within more how other multiplier and art of part penetrate that driving base. to is the that of is penetrating what of blend our partners, than adoption. to adoption space are in you customers combination a And to that solutions, to which then here. Because of underlying accelerated again, So does you terms the contributors continue and question, really runway the are of the there it’s lot the the are that partner effect three two. the is both across five-year But key customer is And,

Timothy Chiodo

it great. guide? then you And an you’re earlier. out meaningful government that specifically that you it that already that of part was enough called expected surprise? that clearly helpful. in on that, upside is the that partner, that something Okay, was sort of out really pulling wins mentioned that The That’s Was

Glenn Renzulli

to take This story kind Glenn, the I me is think mixed peak let that. – happy of partner. large, chip with I’m government think, there’s Yes. Yes, I a in. no,

guess is starting ramp-up. ramp longer think – positive taken right. to the I a while The negative now, it’s it’s little is, I to

got So small with we good schedule that as momentum there, I a the starting just is in large really discussed now look, forward. quarter, is, now, nice hitting implementations in see look of we’re in here that we actually tee right? with through think as start really and have impact nice partner the come a as numbers past We but lift quarter the should the and pipeline to we’ve the we second

last months off it to take starting hasn’t So been big a the lift, really now. really, so over XX or but

I government one about acceleration stories think kind side. on as be of and there we’re an for the So, the of excited to think I a that’s going that XXXX us,

Timothy Chiodo

lot. Excellent. a Thanks

Jeff Hack

Yes.

Operator

Thank you.

comes question Northland with Our Grondahl Securities. from next Mike

Your open. line is

Mike Grondahl

Friday. Hey guys. Good morning and happy

any and the or could how Salesforce making for you or of the backlog a partners there any talk update kind then little changes that just funnel additions? looks, or and you’re integrated bit maybe just question, First about the on

Jeff Hack

– Friday the strong. and remains happy partners, Jeff, It’s level – The observe Mike. of the morning, Good of things I two integrated opportunities would that, you. obviously terms Yes. interest to so in

the changes of Not integrated often spending together. in them deep few do involves with most of making that And discernible ability to can’t where have salespeople, opportunities in continue I solutions is around to you, One demand last zoom, in of sessions really quality where tell the Salesforce, find with workshops. question helps of too, exists engage the solution great the time people. your the you those ability terms in person months the invest to we to folks but the on start we and

that it our Paragon most is pound, about can expectations. a talent to regard are Mike onboard inherited folks that the of them the huge the has and it really excited when during think and high I bulk, quality you lever, and out for the exceeded and we’re develop, These important depth we bring acquisition, it, find we pound and it. for is in sales diligence, call hard through had

Mike Grondahl

lot. Great. a Thanks

Operator

with next Jeffrey Our Andrew Truist question from Securities. comes

Your open. is line

Andrew Jeffrey

doing some Connect what what and attach is enhancing sense Good and about It a yield of big some know think morning part card the of some bit which present, to I attach – sounds Jeff, spent I is mentioned hope some, like of talk well? is long-term broadly Paya you the everybody Can gentlemen, as not time is potential, if you’ve money functionality opportunity well. you you sort capabilities. maybe that specific what Connect little by, Connect your business. with not think in drive of rate provide lift sort the a

Jeff Hack

again. morning. Andrew, Thanks Yes. It’s the good Jeff for question.

let So, sound the tell a are that it to me bite, itself this you what that drive lend but doesn’t key categories adoption.

easier it pay user does to interfaces for the user it’s very soundbite, powerful, as adoption of So not is recurring for the and quick first like for pay. recurring pay, but in constant make invoicing, experience for one, which is enhancements quick the not,

but is of adoption. not a investment it drives even features, features, making existing the new better, which frankly what is, that So lot is is

The each municipal And know you think think play is Paya BXB other this thing I to to in. I of not-for-profit that mostly Paya attach – very guys rate Connect, adoption, at be the tailored needs – and vertical in healthcare. developed we terms we of

capabilities. And to full are that so, partners key you is the the so that are vertical your the adding tailored there components using

not generally deliver and you And importantly and in most capabilities We the robust do those most functions. of continue whole features our each know, the Al try verticals. carte into speaking as features experience. think to bill that why is experience I and investments we a

Andrew Jeffrey

it. Thanks. Okay, appreciate

Operator

you. Thank

comes Joseph Our next Vafi Genuity. with question Canaccord from

is line Your open.

Joseph Vafi

one relative then guys, lot. up change partners good the other maybe for, and quick on bank a in market there or just Hey if size integration you’re pipeline, was morning. the unique already, there there’s little wondering moving, just bit of A would ACH average anything one with larger. getting more growth longer term Thanks one is and that, for which or be potential like if size a deal just any good out questions unique. maybe lot the just, I clearly on opportunities was out And pipeline. And your seeing, capabilities that any ACH. but

Jeff Hack

Yes. take Joe. again, I’ll Good morning, reverse It’s order. Jeff those in

of we things continues ability that develop capture to is as opportunities our to find one most a larger grow we proud and are continue So, and company, the as of grow. both to

I in the think it’s that know growth of been you periods. recent guys successful an important ingredient most our

there. certainly, that we impact we the has and the proud come that focus very the opportunities. executing made smaller opportunities feel mix. the good the tighter of And are yes, So, obviously at not That we’ve on sharper more, at an are progress But average the that. expense the does of larger in we about we’re

is In your number really part is, things. it question it of the terms a of ACH, other of on

for what along, So, you to breadth there to, that it you partner of our proprietary about and that capabilities, look unique, than other and in showcases testament it many strength case when large to question magnitude. talk tend they a of or as no maturity of think, over that, our the want capabilities not time. very depth exactly to whether business, a this that like ACH larger partner not better opportunities finding the is come the but obviously the ACH capture of I platform And and is to our our does

in ticket transactions, larger, in And So for level smaller for marketplace, is evolving is should and to capability that alongside card understanding that card that then think us offering important partners, Joe, serve they with software larger this continues of very acceptance of will transactions, ACH particularly the build. something ACH other well. an thing is, the larger which the I be

that We experience. have investing been unifying in

boarded are they reporting once, together. so underwritten integrated come and are people once, on So they’re once

the question, yet can great I And you’re So, seeing growth already appreciated. think some I in term. be to see role not the of offering excited of to some we play, that think, frankly, as but, part fully results that degree medium the importance we’re the our ACH degree, it to there. your and may and understanding about our short in capabilities And potential proprietary

Joseph Vafi

Jeff. Thanks,

Operator

you. Thank

Our next Cantor Siegler with Fitzgerald. comes question Josh from

Your line is open.

Josh Siegler

provide back do continue you morning. little this half? in a Thanks expect you pricing And question. for power, on we card. my color pricing power Hi, as especially good your more Can move the to towards taking

Jeff Hack

in take can Yes. I’ll it Josh, well. as it hey is add Glenn that Jack, to

we born deep you I that very pricing Josh, time. course have over first frankly points. we has think provides One consistent power. apply drives which turn, been some very have we a And of So about that disciplined and steadily retention, integrations, strong out, Having that clear been on are price. of level in when two said how

we the have so, when bi-annual leverage increases how as And to we brands, thoughtful who and very impacted, are a We the of obviously and to methodology. often. is finely but tuned tend

it maximize the to time last surgically, do not dollar of is our intentions the we to So given time that reflects value period, in but price something steadily that provide. and any over

responsibly. we see add continue, and do So we will can that Glenn, but used you’d anything there?

Glenn Renzulli

Nope.

Josh Siegler

change previous Delta spread guys any That’s in and helpful. started color. very July a as to the for Also customer August? of on seeing much Are variant you the you Thank the up question. has behavior through beginning very Great. following

Glenn Renzulli

not kind differed quarter. that have looking the just of seen from we to July anything would have at how date, ending were We

answer is no. the So

Josh Siegler

you Great. Thank very much.

Operator

Thank Blair. we William with a Bob Napoli you. from question And have

Your line is open.

Bob Napoli

follow-up. more you such organic as opportunities don’t to when kind marketing are sustainable came such coming of points mean, XXX go to that some are was and good the only over here, faster and, long-term you there the of public, I Or, the digit you for that advantage you’re that growth margins, year. We mean, that Is up anticipated was in that as, year was the model maybe is and I couple term, kind investing guests to the came up from that you than there of right deal as growing drive term seeing look When for margin at big Jeff, investing close a picture mean, would then, into obviously I and grow momentum a are I when you you getting got organic pretty has more as in growth. public announced, you market, should this take be years. of growth to faster – but when and you sit Thank higher the mean, invest, your maybe Paya opportunities? what as initially for next short short you’re this model? double the seeing, question. expansion. public, low basis guys became One a you

Jeff Hack

answer to point of all the we are about projection because the we really you, question, hit we part our public, and were the drive in and for meet out and mark Jeff had objectives, going you is Yeah. that. some that, have and just To there, to proud what obviously impressive And two in The expect of ability growth ‘XX. to continued of things of of the we’re business latter with first let so – in Thanks. that pointed ‘XX from order kindly process here. forward as of the Bob. us Thanks let, again. questions was me in the This trying first all out many

to a other is, the grow would question, of faster? think fair question. It I to more part your try is you invest

within that. embedded we feel think to a expenses like business, run the is today, I today there manage our in degree, bit large a fair of in and we we growth

about obviously responsible should we growth would to our is manage margin, opportunities. invest the significant Capital So and in income but framework, inorganic you, medium-term order do we company, first our we – organic on. it allocation you thoughtful business. statements of us we’ve we the should hit growth, speaking, was so those the we what be on we But to would ability we right. of about something But is in and structure if that good objectives, today, do, the see we that because say talked saw to within it I generally the feel thought that expect where interest

Bob Napoli

you cash ratio right answer. That’s very and could but And you good generate Great. where a that. just do a appreciate quickly, I maybe that taking a up would deliver like the feel is where you take the for acquisition for understanding and Glenn, the relatively appreciate leverage? comfortable, quick you leverage

Glenn Renzulli

we’ve Right. it before. talked Yes, about

three. going the to the it Right now moving of two always the I refinancing with very that right And think our be, balance favorable we’re interest nice to and range, sheet. We we for future then somewhere net right, the But four. always in think in we, will upped on Right. I yes, cap gives savings cash down is around well. position, revolver a have us think back some goal this us I it’s no, we’ve, went give quarter, as going through yes, deals. that to we flexibility, under

that, in we’re, of debt today new a a something us, some lot nice trying go, focused capital the find, gives here. to and find deals lot and, right? really targets fit about on excited we’re and at to We’re, and, to spending time structure So, of on find looking we’re

Bob Napoli

Great. Thank you. it. Appreciate

Operator

remarks. Thank you. to there are questions Mr. queue Hack in no call other back like And for closing to the I’d to, Jeff

Jeff Hack

We progress. and Listen, appreciate forward obviously with are to we look on very thoughtful operator. you, Thank progress. Great. we’ll our questions, pleased you your our updating

thanks everybody day. and So a great have

Operator

you concludes call. Thank today’s participating. for conference This

disconnect. now may You

Paya (PAYA) 8 Aug 212021 Q2 Earnings call transcript