PAYA - Earnings call transcript Q2 2022

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Operator

Good morning, ladies and gentlemen, and welcome to the Paya Holdings Incorporated Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded.

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

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

find XXXX can Investor on the You section described, have Relations Paya's Presentation of website. the Second supplemental information including the just all Quarter I

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

prepared that, we to now Following over call their Jeff. With remarks, will I’ll questions. call your the open to turn the

Jeff Hack

morning, Solutions XX%. our These cover growth and of XX% shift for XXXX to and on represented my us quarter, the joining agnostic, again Glenn over to reported billion, reflect of to Thanks go-to-market our Paya proprietary today engines, these quarter, which strong payment ACH software-led markets led total and secular than offerings. growth. detailed and in growth good results two results card grew remarks, revenue conclusion financial questions. In review investment our further take everyone. grew and the financial volume by Integrated results quarter our X% our and quarter. efforts. adjusted commerce volume will volume operator, we'll Paya's this efforts second continue revenue in we our incremental driven At and of to in expectations capitalize segment grew then second by ACH nearly XX% Thank underway the you, XX% of as to the payments, over XX% accelerate towards and Total discussed Paya million innovation $XX.X growth results also $XX.X previously the million, better EBITDA $XX financial

payments for I recap Before positioning I serving middle business. expand partners outlook, will on platform independent market as payments. services, competitive that BXB attractive and and growth our government drive and underpenetrated a verticals and the integrated goods strong secular Paya non-profit. our drivers tailwinds software our in XXXX growth is leading high and all growth integrated These such are verticals healthcare, in

Our demonstrate software strong verticals very during quarterly and periods resilient macroeconomic the powerful combination of that have volume trends proven clearly in of also uncertainty. attractive payments

of goods providing We order receipt accounting then management payment and to to software to end-to-end our experience exceptional capabilities partners invoicing, from business by have demonstrated and management to an post-back to commerce systems.

of providing pandemic solutions has our customers. critical as integrated these workforce for improving the payments software software automation economics value models. a partners, of material very end omni-channel All work-from-home incremental flow hybrid cash the particular, the the suite mission In and value of supporting generating enrich and while savings proposition entire highlighted and expense importance for

opportunities. more qualified XXXX, and expanded of pipeline highlights the first Turning significantly led sales in marketing our which for we efforts, our a solid to has larger to half the increase for

In penetration technical is a Promise our the opportunity this and hunters enables second on to have and added partnership citizens existing great we and resources agencies example capitalize added of support sales We considerable and as government doing good massive resources a of. partners. pay a proud new the to success partnership, government particularly to who I'm time. have flexibility quarter, through the also additional within signed see payment customer are doing in accessibility provide to their good solutions which business same I bills company at full. SaaS-based unable to our

expect leading frictionless recurring solutions. Office functionality, signed as partnership and also electronic well with Key tax billing healthcare Paya’s software to our In valuable management, business, came we strong our selection excellent of including second new clearinghouse and ISV growth spring services, the the of XXXX. support. in half of We criteria and our a for integrated and boarding, a Paragon to continue those Ally, via streamlined U.S. acquisition partners, Paya cycle end to revenue XXXX, included pay our as solutions reputation in partner customer by provider led that fast

ACH continue, in paper payments. growth strong trend driven by cheques to expect electronic We the converting to secular of

deliver on We a The to well addressable positioned key to citizen investments, be launching technology enriching accounts for enhanced side. as to of our our [indiscernible] here expands cross-sell believe as solutions due we deep on integrations solutions, BXB We for continued Paya facing government our significantly to of ACH our Paya. our protocol, lever proprietary payables our clients year existing partner continues market receivable by and are growth which accounts the on payable UX/UI drive are portal XXXX track with incorporating strong this to enhancements solutions. enhancements well also our platform,

fast M&A and in we us trillion some leveraging focus started have we area pipeline allow growth a see more key growing are for a from valuation key investments moderated targets see of strong to a will to accelerate to We as areas, which us diverse continue to remains multi expectations a capture TAM. of these sellers. dollar share

businesses to and distribution adjacencies. suite and remain our evaluation We and continue verticals our solution of inorganic opportunities. core in disciplined We in target both extend all both that sizes of attractive enthusiastic in

We our a great strong continued want to which a deliver have on to I over Glenn, entered it previous I in to point top same making beyond. growth, investments through and key Before bit incremental next of growth I'll both the it in support to and XXXX achieve, reiterate while over the more turn you detail. Glenn? we year position walk time bottom financials line at turning to With that, calls. a have shared to Glenn to trajectory

Glenn Renzulli

the increase larger were and drivers growth ACH card morning, XX%. strong X% $XX.X an volume by everyone. of good XX% Jeff, of Thanks, was led of volume growth Paya in financial results buying delivered and the and payment billion, quarter. year-over-year volume ACH growth Total quarter. of Solutions Integrated this second

over of was up revenue versus revenue solution the XX%. $XX.X and quarter million led revenue we strength by Paragon, revenue last Payment BXB was million, Integrated from year. $XX.X services growing acquired year. XX.X% growth last X% April ACH was growing million, Second up year-over-year in which XX% $XX.X with in

versus offerings attach our XX.X%. to from gross by rates X% the of down adjusted Net share profit loss of proprietary for was Adjusted year. million we prior year-over-year year ACH as million quarter, in with million Gross margin in second in versus our $XX.X our versus up by the million, in ramp of of our of drive integrated up partially expected continue EPS to larger the and partnerships. margin quarter driven up in see Paragon. in software million, We EBITDA to growth up was operating investments growth activities $X.X some of per Payment of XX% strong the strong prior million Gross up previous driven a Solutions $X.XX X% of ACH continuing expenses was for offset quarter. cash margin gross per over expansion with partners, new quarter quarter the was by with primarily year. margin year-over-year versus in was certain GAAP of gross half Adjusted with the $XX.X million income first Payment segment. large year, XX.X%, $X.XX $X.X enhance expand was $XX.X XX.X% with profit the with $XX.X services the profit margin Integrated segment. Services as gross go-to-market net X% the was is margin quarter prior by this the provided partners Adjusted operating million gross of the and efforts. gross share. net the $XX.X our expansion with were our down $XX gross ISV income $XX.X the million, growth year, earnings

million times had balance cash $XXX of debt $XXX gross sheet, with a on a in X.X we our and basis. below Regarding million leverage ratio trailing net

of count of at share outstanding. was million second end shares diluted quarter Our $XXX.X the the

of can presentation. reference through in an earnings our illustrative our share walk You count

full to guidance. Turning our year

end year. the the and We our reflect along remainder low with to of strong the half are a guidance EBITDA adjusted revenue our for outlook first of raising

in growth of We our are guidance partners margin our mentioned integrated due strong range earlier. as the gross larger slightly to lowering

$XXX within gross adjusted my to margin to million back to a Jeff expect over $XXX XX.X%; to out. XX% range will concludes prepared revenue of that of a to That the We a $XX EBITDA I'll fall million; remarks. million of in call $XX profit turn million. range range and in close

Jeff Hack

investing investments, shareholders. in can served selling on a our operator, strong as our we while for why take excitement high very our as both roster proprietary you we're inorganic an balance our future of the Add growth in across of results continue growth, deliver a further position financially strong and markets supported Thank organic With you, our ability expectations delivering verticals partners very strong delivered and see direct have our Glenn. strengthen Paya back sheet by the verticals, The powerful we ready that, for is and with to questions. well impressive to the software. to in in business. diverse are commercially we've select all in excited and combined with returns the and to

Operator

Certainly. [Operator Jeffrey Andrew Truist. Instructions] from And will question of come our first

Your line open. is

Andrew Jeffrey

strong guys. financials. your mix affects integrated doing you It Hi. bit little are got these question I trend to the partners? you've little that some bit that you whether the some partners elaborate if on a verticals big which morning. well wanted a sustaining and the understand like you Appreciate I and see Good of sounds bigger understand very to particularly how morning, wonder I on this up taking could performance.

Jeff Hack

It's Andrew. Jeff. morning, Good

Glenn So I'll start and then I'll let follow-up.

terms to In more broadly. BXB are skewed business, I very sources the we heavily the of think, of

partners. And the of is so rate larger driver that with that main growth

help right, joint will their key some the means to growing terms macro are inform in base their continues is and of that. In element grow. obviously our how point of general, in growing continues strong But businesses partners that penetration of which these it own

So overall add? favorable would Glenn, outlook continues to there. be anything very you

Glenn Renzulli

No.

Jeff. nailed You it,

Andrew Jeffrey

Okay.

I high wanted we to how of characterize ask BXB, a is also some making. about guess, broad-based And level just you're the So that. from I investments

I one, And LTV-to-CAC? like with customer mean, is component. it next to lot Can bit how talk process think you go-to-market a a some see more how this now? result the Sounds affecting investments a of year maybe improvement. there's if little accelerating is you you about I marketing want or like the bit think making the raising you costs it two, infrastructure. just does it's acquisition try that a we growth a of sort sound of see as effecting understand you're economics? to It

Jeff Hack

Jeff Great question. again, It's Andrew. Yeah.

couple a things of So there.

and the success, investments customer So themselves, support, marketing, sales sales, innovation.

comprise are those that categories investments our the incremental total So that. than investments. are Obviously, higher the

I appreciate life terms and how would and I of to you are. say what is, guys long partnerships durable CAC, In think you the these sticky

sales the to is, straightforward. LTVs calculus as the LTV-to-CAC the is very produce revenue need and way you is and the to the sales I LTV pretty last in high are will as the therefore marketing produce to Obviously, reminder objective. investments the very, those that But through all give And good. long they cycle. meet work your investments So

revenue. and move then So sales and opportunities business which pipeline incremental course, stage drives closing marketing producing more and new of then early late then into the

work you they their So all will timelines. on own obviously, if

growth are the But pleased Playa. and in come the results, progress some the we've leading with very overall, We of some sooner. future indicators, those are made investments are

Andrew Jeffrey

Thanks. how seeing out next plays All over We'll to that nine the to months. Appreciate look six forward it. right. all

Jeff Hack

Andrew. you, Thank

Operator

Robert our And Blair. will question you. come Napoli of next from Thank William

Your is open. line

Bob Napoli

is called from Good me. Napoli This and Jeff Bob Blair. think morning, Glenn. you I William

competitiveness stickiness guess the there Why have of on the I and retention rate, a or the lifetime as value ramping that has So the of up, in currently customer increasing base, the marketing, customer you just a any increasing that change been for customers now? hunters. I guess

Jeff Hack

Great Jeff. It's question. morning, Good Bob.

Let me parts. take that in three

direction have or value first of the this not in at meaningfully measure one moved all, term long one qualities business. rates So a granular of all of our the in you stickiness, level as and imagine, terms retention Those very is would across of other, markets. we which of great

to you are have that many, I very all customers deep many integrations. Those for know you years. sticky feature rich think when you

the other What Bob, the point. One, out always decision that our business I is balance So things. to see I deploy be the and as built you said, that's And should think, capabilities, as say ROI incremental hit this performance. future the case increase. added opportunity in would two talent, the you fundamental performance I'll is to spend. We investments there we and is why now? your those we your opportunities in again, current have face have high

to has would a And retention all are usually the we apply we offering. out might strong example, see something our Back feel to partners say larger as a previously Paya to and talked So customers that last unintegrated you of integrated an your via which the have or calculus the of to moving reference of here. migrated of minimally book gets about is in that's that about to that do before your offering so. positioned about ISV made some Bob that robust question. heart core an and And a that you'll strongly we've migrations share like we're I thing it more And payments back I'll which in first-gen from that were Bob, one want books stickiness. fact the clarify recall a called to question, because I what opportunity. and

back occur. Conversely, integrated move books, migrations back particularly which deeply deeply middleware extremely under that in book offerings. integrations long standing or it's conditions integrated the native to seen that's difficult So often -- are ERP

retention offset question. any is than with finally, do because to rather So they things happy functional not concessions or economics, and for richness price more poor by service, headline move, And it people support gains. that being can your need when their gets like driven they're meaning usually attrition

together, all And competitive see as markets. us. TAM integrations that We deeply wrapping reminder, integrated favorable majority large new very this ACH. So Paya know time first of in business exists we still end plus for deep proprietary the is XX% very as in a card all a being calculus the these

Bob Napoli

Thank I'm at you. activity we're confidence macro then a any and and the margin the the July, on just through or strong? where the Have being you've And which -- as question how your solid curious -- we've how any just the noticed you you're gone but of if what macro areas or given shift environment? customers stand month or the follow-up view guidance, seeing you of areas through out incremental weakness

Glenn Renzulli

results is QX. This consistent so Look, July really Bob. I we've think far, Glenn. Hey, similar to for seen

year. second I So feel business we really no the about issues think really or the in And good the half of concerns.

trend guidance most I recent just type data. think of the go -- with any we We're in change conservative the have to all not be obviously, with noise our out with macro along that, but there. to seen trying the

Bob Napoli

you. Thank

Operator

And of will Josh Fitzgerald. question come Cantor our next Siegler from

Josh. open, is line Your

Josh Siegler

Thanks start I'd my get a color Hi. to To with, taking Good ACH. for on question. additional love little morning.

deeper revenue little sequential go ACH of So growth? drivers some acceleration we experience a into behind Can quarter-over-quarter. this the bit

Glenn Renzulli

seeing usually Yeah. great Hey, tax with Look, and think working attach a are as and to back to large it's focused Glenn. really that is few improving right, are Josh. really offering. is be we now more focused with look This ISV selling ACH we I we're our years our partners, on sales card rates what rates used

over environment certain economics that or a more the case seen know serve, sense. we or trends use the of ACH ACH acceleration of also verticals replacement. alternative good We've when with a macro a transaction cheque level, makes certain for the You being guys goes industries good and

going the So supporting think feel yeah, I looking as away. are ACH lot don't I forward the those reasons factors factors it think growth there's all a well. of and converging of one good we same really about main It's

So great our be part we a continue of business. to

Josh Siegler

And impressed you the have guys valuation hear thinking very especially be environment I'd Great. over now about that significantly much. right curious Thank quarters? to the possible then, how given you M&A are

Jeff Hack

Yeah. say I for Hey. would It's question. environment is does Thanks statement. It like feel that not Jeff. Josh. but Good as a the the morning, widespread moderating,

are So what is certainly more process would would approaching say I realistically, the not sellers everyone. say some we but

So core our strategy. see relevant, pillar very and it's same more three you, be just and we do as remind M&A at more accretion solid of has continue business, a strategic. valuation to point, I'll to technology meet potentially But hurdles. criteria the that of activity to obviously, And to be explore about we reasonable quality be prices. has the enthusiastic the of it we've if our and needs always had, it to The acquired security to

right patients strong So that hope be will rewarded here time. at our our is the

Josh Siegler

Great. Thank you much. very

Operator

Faucette question Our of next will come James from Morgan Stanley.

Your open. line is

James Faucette

taking Thanks morning. minutes for here. Good a Hey. in few

to Just allocations can and strong one in look on those around looking comments may priorities would your comment business, like provide of see cash prepared pretty valuations to where coming in of and specifically our and made you around context at that or the returning you sheet outlook follow-up the and that, good back may comments balance your not what about opportunity? were the capital talk generative down to acquisitions, you

Jeff Hack

be to And we I strong, there flexibility implied accretion appropriate that across allocation in the supported is cash to would marry we and M&A your and it, the generate expect. if start refinancing at to other growth that time capital portion question been follows. allocation a Board between ability keeping disciplined capital for I'll at Glenn in be can are well. The to we as Jeff. And remind intentional sheet The level as et the timely flow the debt think we ensure ourselves would investment allocation, and have the doing of about things as albeit continued I to jump our of have in conversation as frankly It's pulled ensure to ongoing And responsible that by an would is debt, James. organic make our are on morning, always the at and clearly continues Good is observe best Yeah. patients center. works. this and then front levers accretive that cetera. can business to of Capital I you managing the strategic very like shareholders. doing balance a deemed sure you right capitalize that, opportunities our with part

So expect I should in we over very have time do forms managers been and allocation us of to all appropriate. believe strong intentional continue to you and capital that as

James Faucette

to be evolve line and at expecting balancing over pace right particularly operating Then how expansion, at operating that should term, the on the within what's keeping investments, the potential internal margin should turning medium track when we that of cadence you of? to especially margins, look leverage we your the be

Jeff Hack

and James, chime So in. Glenn I'll again. it's can start Jeff

said margin before is we've that of of growth can have and mix about folks a is the influence Paya. of consistently obviously a that. And margin we to primary your couple that profitable do forms our of So maximize level talked can to comes and that it that objective investment by-product of in course

to to and business that as has very I we margin the been this continue continue in that good We think perform consistent consistently feel story. expansion we produce about demonstrated

If expansion, the it different growth. we'll it, of not balanced margin but than our quality about term feel talk different, we at steady maximizing primary outlook any again it medium is calculus So against but point was. good is about obviously

Glenn Renzulli

this is Yes. And Glenn.

go-to-market. decision me an areas, or would bottom deliberate more, areas add, or bit conscious like quarter, was we're yeah, money that a invest similar meaning year a is, think, to on feeling with way, to like about wage side and but are so inflation as this that. I just end for deliberate we very efforts These the these put conscious to like anything gives that certain pressure decisions rate this line comfort expanding another work made what in Jeff, same to in revenue not said from we're little I our invest or to

gives So as that pivot can that we that us results. and comfort we see as up needed down

summarize, still to in I we good the very years. feel line about think So expansion out margin bottom

James Faucette

Thanks Jeff. Glenn. great. That's Thanks

Operator

[Operator next Davis Now John Instructions] our from come of will James. question Raymond

Your line is open.

John Davis

and Obviously, as Maybe Glenn. just Hey. talking Jeff, bit priced far pretty business a transaction. basis about inflation little mix the ramped. of Good a morning, spend versus points minute Jeff in as your what's per

benefit it like, for seeing basis curious, transaction is there? points? Just what per it is helpful. priced, there how are or -- would Any example, color Just ACH curious is you a be

Jeff Hack

John. morning, Good Yes.

that basis you part, even on So, business not headlines tiers as points and is because priced per is that the card ticket in as based historical when like. on per convention. ACH by trend, tran, steps have on literal for the can most average is you're It's pricing as size

that think So of basis as points. a proxy for

I that's core. the part of think at your the So question first

spike at pushing is business. a would integrations, reasonably limits sticky trends, added lever, have to In determined and or the is attrition value and say, having durable rather coin high favorable. or you to you value but favorable good as very spread, the attribute will, when are we've before, that. terms the it call pricing deep there But that its two pricing And like than responsibly if we is that we integrations, behavior on then that the if pricing value deep of this quite said you I quality anything use are really of sides prop have core, both

John Davis

Glenn, And implied Obviously, a it's you one little OpEx. in just margin line. of the down margin then gross Okay. kind maybe bit, EBITDA on for

little down even talked implies the about. kind all bit it investments a is you've flat So that despite OpEx of

year? bit Any there than outlook on out? Is a comments the anything thought? better it the you So little on coming in pushed just anything for going curious just OpEx

Glenn Renzulli

Yes, definitely.

So for the quarter, was OpEx up year-over-year.

outside other on through investing year. of this offsets able So the cost have side, we some some that functions what were OpEx and to carry have did we're we

high what year. an to is your into right. is We're you're of going we as seeing had and as the seeing the amount So not projected OpEx point increase

we that's being good I the to there, at GM to rate and those said little despite lower. that think offsets help still expand to but bottom going a do, that make us we're to favorable So allowing investments finding we're some able line on still the fund a

we So about GM feel a you later. our I feel even our -- and little line think bit we see little in right, is good the percentage a bottom still guidance, though

John Davis

one Okay. Jeff. this That's helpful. then talked hit one We for last I you, on your And appetite larger. but a for lot to about want specifically call, M&A just something

you've M&A tuck as kind consider far something transformative. ins, some that's little So of done would you more

any helpful. Thanks comments guys. be Just would there

Jeff Hack

Jeff, again, John. Thanks. question. Great It's

balance see sheet, I our think you guys see our leverage. you

if a of is at from medium, will, do view. there is point the is small, financing transactions We look large. you power to larger a Answer Small deals, higher So certainly yes. hurdle. frankly

conditions and something to on do would the in We meeting or opportunities like answer. to on out our track and course opportunity have and criteria. even environment, prepared I providing performance is Medium deals, And we we to valuation bigger the But of think end be base really an the going markets more. to customers the more work love love a to function of of larger tech, yes, love You predicated installed we people, transactions, see record do. larger the are the it them. continue play in which like our to is M&A that's

John Davis

the squeeze contribution one for Yeah, in was the Okay. quarter what top line? let inorganic from last go Glenn. Glenn, one sorry, then And ahead. the me

Glenn Renzulli

line. Yeah, top XX% on the

John Davis

XX%?

Jeff Hack

Glenn, that's the organic the inorganic? or

Glenn Renzulli

year-over-year for Organic quarter. the growth of XX%

John Davis

Appreciate right. All Thanks guys. it.

Operator

of Our Capital next from question will Markets. Grondahl come Northland Mike

open. is line Your

Mike Grondahl

investments just get been that for future that sort the trying for of you're anything a of making and you're you haven't that doing of of that that isn't of that I and XXXX continuation. XXXX areas to new new sort kind there sort kind growth for that sense new Is growth kind you're investing doing that future for specifically guess future a in? ongoing of or new any I'm

Jeff Hack

There for few morning, immediately. Good core say a produce suite, the talked is focus that. examples. that question. those Great me Paya define What which about the not has give a We've been on -- Jeff. I the Yeah. investments let broader you before of yes. I'll do Mike. It's answer future BXB so would are and these calls of

automation. full to So continuum automation, AR of and the that is AP married AP

So a like point towards view. We've payables, investment obviously, big solutions before automation, there we're of AR step extending what an doing is to on important of from widening the focus Paya We Paya. talked side. AP full that that about an innovation the

others that's well we've innovation driving clear as some will example. pay government and the There to So dividends very are powerful that a of we been our in vertical, years for come.

just But are Mike. examples. two those answer yes, So

runs day-to-day also investments. the those and efficiencies Glenn that those investments get that and I your needle move Within these us fund year way, is the for regimen Difficulty] should by And beyond. even the that in you it can not described think right of help in investment growth faster our here. next gamut incremental things investments are total investments. And And [Technical

great So that. of those two are examples

Mike Grondahl

update there? any any changes the you're sales then on force deploying And Great.

Jeff Hack

It's Mike. again. Jeff Yeah,

the marketing previous opportunities we and the to which So things get continuum would one solution engineering salespeople the you traditional from Paya. customer investments expect mentioned continue success call, as will, is do back, customer made warranted. as we've and different add you which are success. on in success, increased remind I like markets component as hunters, to everybody But if the of and only I'll the adoption full additions It's sales add produce at

the important smaller just talk part business, most about So Paya, it's the widget talking that about very people component if But right. I you're body those of at think mix a often, you're count. getting

So solutioning and and those. marketing, success it's balancing hunting, customer

our And investment are each those categories. of some of in four

Mike Grondahl

Got it. Thank you.

Operator

from Chiodo come And Credit next of Tim question our will Suisse.

Your is open. line

Tim Chiodo

which of for Mastercard, of healthcare categories X%, just not? seeing your and Visa And inflation. could mean so the see or of we all seeing think that you're much the it some categories are earnings that you level actually their in so categories that on levels how is one, the doesn't others BXB, maybe call is you they example, that government because in that I are of On your your some are all high that talk or maybe across parse to inflation, but same about volumes seeing And numbers? maybe look we and number businesses inflation through X% all a do it's flowing as really just challenging inflation headline know

Glenn Renzulli

inflation. Good question. the Hey, inflation. have to this mostly And those healthcare move largest business, pretty part have our has But over non-profit up BXB volatile which look, are or conversely upside impact. Yeah. not of from verticals more Glenn. inflationary is Tim, where of as an pieces time just It's do more a government, just heavy get gradually. the It's in index certainly which and alternatively we

So that’s only that part time, upside to of rates. spread, verticals not indexed like a you got growth our business, we're think do same inflation diversity good it's right, the just this at about good when good the of of is you mix, reason we inflation. get But some on

the basis, the inflation it's versus So the inflation more others some benefit and get volume to as environment that's exact but I merchant right? think and that's BXB certainly get we the always from seen to there. because dollar macro go good with a but us into that's the space, amount don't example growth, at to unit right, probably a being really of again, capture, but macro going we particular much the see difficult -- in the that, price And best growth a is we've us challenging unit for

Tim Chiodo

Excellent. Okay.

inflation the discount way that about than a that of account end volumes, little the little your maybe be and for and your the market think be is bit per I guess that fair a more which for then would on to sense maybe then is exposure mix benefit discount that to transaction. there? about a account a revenues, revenue to would framework is a bit headline answer So obviously, thinking based part last of on different further

Glenn Renzulli

Yes. exactly. Well,

much, the environment, as the the you again, confidence a have at I think side, ACH I either business the which So variable gives in we upside different going -- codes and good inflation but well, the right? the see right, can us where stuff go And within up -- right, gives sub consistent On CPI right? us and yeah, in in good think is growth, move and I end to don't tough it of you data, that all spread day, as is the it's see in zip number. think right, to down verticals,

moving in So it point is on at dependent really what's time. that

Jeff Hack

Tim. Hey, It's Jeff.

right. last given a Inflation muted your I chain you're slightly calculus category. also offset in add just it or to me Let category goods thing in demand same be about think thinking one of can because the supply by

shift So are volumes headline only if constant. of pure good inflation is

an offset as well. there's there So

got you otherwise think exactly I the calculus right.

Tim Chiodo

business your point. greater Right, ISV themselves revenue more volume, a the of just last of the That's of larger follow-up shares and it's a Or partners, if get it's gross the just mix revenue with a that simply of better of that. sort My latter, think shares very due which and that's Jeff, the agree one ISP the revenue here, getting the way is around those they competitive that's I they that the is get some are simply partners. if partners industry And just I as that's towards just as answer they simple? works? good or they therefore more completely shares is Is larger scale and thing it a moving also minor scale better those combination to margins that

Jeff Hack

Yeah.

So a take me is pieces. question. Tim, three let great in That that

The partners. partners great not do that. Great large growing is That's are number definition have lament who We rev partners growing piece having great shares celebrate. is one. something by growing better we first

larger the partners, traditional question, second of wars. these The rev built those not well to is, of of share of they partnerships, you third Tim, we have alluding much agreements. you deep changing your part standing deals I that ISO when without because tiers hold for up sticky the of think a phenomena our price have been long And into durable, structure point, some the might

So renegotiation. therefore, there is no

need shouldn't You renegotiation. a

should that You through tiers. breaking you're both happy be

parties view great volume And great the often are remind very our to that share. with dreams want line and And I So and both by are partner rev some want a happy. you as there by you produces hopes design. we that's good is ambition, way because a is for of sign the very structural in and new by they that

So it stays also rev protects Paya level. reason whatever the for on the the lower share other side, that if doesn't the volume at present,

what So it are happy construct produces. very we and that with

Tim Chiodo

that more profit growing same with a and which followed partners, and dollars is positive. large fast Completely add certainly definitely page those agree gross Excellent. also Jeff totally

follow-up. thank for all and you it. questions appreciate taking So I the the

Jeff Hack

Thank you, Tim.

Operator

question And follow-up, Blair. Robert from William for come our will next Napoli

open. is line Your

Bob Napoli

you. questions and Thank were you Thank Yeah. My answered. very asked much. follow-up

Operator

the call closing Jeff remarks. for now will back turn I to

Jeff Hack

Great. Thank you, Latanya.

be and quarter. is with thrilled our public what to Xth again guys you So

I fundamentally opportunities can of by present proud to end think to growth company. in hear and themselves to performance, growth the with progress this with and good advance very our very really our to excited we is what and you some are trajectory the feel markets. attractive voice, pleased to high pleased the continue in Paya continue

So with will you soon. thanks and for talk everybody your I time to to that,

Operator

Ladies and gentlemen, for this today's conference. participation. you Thank your concludes

disconnect. now may You

Paya (PAYA) 5 Aug 222022 Q2 Earnings call transcript