Good morning. My name is James, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 Holdings First Quarter 2021 Financial Results Conference Call. Thank you. I’d now like to begin the call and turn it over to Josh Yankovich, Investor Relations. Sir, please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for our first quarter 2021 conference call. With me on the call today is Matt Flake, our CEO, and David Mehok, our CFO.

Thanks, Josh. Today, I will share some highlights from the first quarter of 2021. I will then turn the call over to David Mehok, our Chief Financial Officer, for a more detailed look at our first quarter financial results as well as guidance for the second quarter and updated full year 2021. In the first quarter, we generated non-GAAP revenue of $117 million, up 25% year-over-year and 7% sequentially. We added approximately 600,000 users in the first quarter, a year-over-year increase of 19% that brings us to more than 18.3 million total registered users on our digital banking platform. The first quarter was an encouraging start to the year with key success stories across the business. On the sales side, we saw an improvement in net new decision-making activity during the quarter, along with continued expansion success with existing clients. I will discuss a number of key wins later in the call. We also had a major banking as a service client launch, which I’ll expand on in a moment, and we saw yet another wave of record digital engagement enhanced by the latest round of stimulus payments in January. Our technology combined with the preparation and execution of our teams puts us in a great position to handle the increased volume as well as the continued growth in digital engagement we expect to see moving forward.

Thanks, Matt, and good morning everyone. I am pleased to report that we are off to a strong start to 2021. As Matt said, we’re building on the business momentum we started to see in the fourth quarter. And we’re excited to see increased customer new buying activity, combined with strong execution, resulting in solid financial outcomes. I will begin by reviewing our results for the first quarter of 2021 and conclude with updated guidance for the second quarter and full year. Total non-GAAP revenue for the first quarter was $117 million, an increase of 25% year-over-year and up 7% sequentially. Both the year-over-year and sequential increase in revenue was largely a result of growth in subscription revenue, driven by new customer go-lives and organic user growth. In addition, the year-over-year increase was due in part to go-lives associated with cross-sold products. Transactional revenue represented 14% of total revenue for the quarter, consistent with the prior year period, and up from 13% of total revenue in the previous quarter. The sequential increase in the mix of transactional revenue from the prior quarter was driven by revenue resulting from new customer go-lives and a moderately increasing contribution of interchange revenue, associated with the BaaS business.

Thanks, David. In closing, we had a great start to the year in the first quarter. From a sales perspective, we saw steady sequential improvement in deal activity, which I take as an indication of an improving buying environment. When you look at the breadth of wins we had across our teams, I believe it’s clear that we are well-positioned to enable broad-based digital transformation for banks, credit unions, and fintechs. We continue to innovate and deepen our solution set. We released key enhancements to our banking as a service offering, supported by the launch of a major client program, and we couldn’t be happier to add the ClickSWITCH product and team to Q2. We continue to operate the business at a high level in a remote environment, where we are supporting record digital usage or continuing to deliver new products to our customers rapidly. I’m encouraged by the momentum we are seeing across our business, our growing pipeline, improvements in the macroeconomic environment, and our pace of innovation put us in a great position to continue executing our strategy through ‘21 and beyond. Thanks. And with that, I will turn it over to the operator for questions.

Our first question comes from the line of Tom Roderick with Stifel. Go ahead, please. Your line is open.

Hi, Matt. Hi, David. Hi, everybody. Good morning. Thanks for taking my questions. Great job in the quarter and really nice to hear about the – particularly the net new bookings side coming back, and I think Matt will start with that side of the equation in my question. Would love to hear a little bit more as it seems like the world is reopening and banks are engaging a little bit more. What is the tip of the spear now? There is so much to choose from relative to a much broader portfolio when we think about onboarding and banking as a service and lending analytics. Is this no longer a case where the core sales team tries to lead with digital banking when you are going after sort of a net new logo and understanding that new logos often come with displacing something; talk a little bit more about that process of what you are seeing with the net new logo push, whether it’s new products, whether there is not as much competition or is it still largely coming tip of the spear of digital banking and then adding on from there?

Yes, Tom. Thanks for the question. For the most part, what we are trying to do, and this is a little size-correlated to size as well, we start talking – we have relationships and a lot of account intelligence on these accounts that we work with. And so we started talking with them about their digital strategy, what are they looking at. We’ve got to move to different sides of the house, whether it’s commercial or retail. And then we start to show our products to them. And it typically leads to – they’re interested in one of the solutions at least that we have; it could be digital banking, it could be lending, it could be the sales and pricing and coaching tools. And so when we start there, what we have found is it evolves into more and more conversations. So if you think about the example of the $50 billion bank, they bought our corporate in ‘19. They went live in ‘20. During the process, we built the treasury onboarding tool with them. They also wanted to add PrecisionLender. So we were all at the – we were – PrecisionLender and the corporate banking were at the table with them in the very beginning, but they worked through the process. So the tip of the spear is corporate there. So it’s nice to have so many different solutions that solve so many problems for these customers. If you look at the quarter that we had, it highlights just the breadth of the products that we have. We talked about credit unions that went with us for retail product, for our retail digital banking solution. Winning, that’s a best-of-breed win right there. Then you also have these broad-based wins like the $8 billion bank, they thought the entire suite, and they have the lending solution. So it’s nice to have so many options right now to be able to share with the customer, but where we’re starting with is a strategic conversation with the executives at the bank or the credit union or the fintech to talk about where they want to go, and then we can kind of fill in all the blanks for them. So we’re not leading with anyone in particular. We are trying to listen to the prospect and find out what problems they are trying to solve. The beauty is we have a solution for what the majority of them are concerned about right now.

Yes. And I think, Matt, maybe the follow-on part of that question would simply be sort of the bottleneck of implementation. It’s hard to implement to a certain degree when bodies can’t get onsite. I know you have done a great job from remote implementation, but as new logos come online, I would gather those tend to be slightly longer implementations making the time to revenue a little longer. Tell us a little bit more about how you are handling staffing up, bracing for that and preparing on the implementation side such that we could see a little bit faster time to revenue, or 2020 understandably had some headwinds?

Yes, Tom. You have been on the story a long time. I think that that indigestion that occurs when you are a smaller company and trying to build the scale and you don’t really have demand and capacity planning impacts you differently. And we see that a lot from the competition for us, though, the demand capacity planning between our delivery organization, our sales organization, our finance organization, and our HR organization is locked in now. So we look at the pipeline, look at the certainty of the deal it’s going to close, and make sure we have staffing to carry those opportunities. Now also remember, PrecisionLender; we get that thing up and running in 90 days. It’s an amazing experience. You’re not really replacing any legacy tech. It’s clean. It gets up and running quickly. On digital banking, you know if you are doing small business and corporate and consumer, that’s a 12-month process for one of these Tier 1 deals. And we were able to deliver that remotely last year. I think I highlighted in the fourth quarter that we delivered two of the largest banks in the history of the company in a 2-week period and we were very successful when we did most of it remotely. We’ll share with you as the pipeline picks up what expenses are going to come along if we have to start to outkick the coverage a little bit; we will just add the resources to deliver it because it’s the long-term value of these customers that we have. So I don’t really have an excuse that we’re having trouble delivering the software or that we’re going to have to add a bunch of people. It’s just we will be very transparent with the investors and share what’s happening. As this pipeline picks up, I think you are going to see in the back half of this year a lot of volume coming through the pipe, and we are excited about it, but we will be prepared for it as well.

That’s great. Great color. I will jump back in queue. Thanks, Matt.

Our next question comes from the line of Sterling Auty with JPMorgan. Go ahead please. Your line is open.

Yes, thanks. Hi, guys. So, Matt, lot of good explanation there, but I guess I want to put a fine point with my one question to understand why not. Is it improving net interest margin at your customers or something else that’s increasing the demand now?

Sterling, I think it’s just a function of you are seeing after the pandemic people coming out, get stimulus programs, PPP are starting to fade a little bit, and businesses are in need to get back up and running. They need to get lines of credit. Consumers, I think we have $2 trillion in savings accounts right now. So there is the activity, the demand and then also coming off of the year where you realize it’s a lot easier for your customers for their customer and for you for them to deposit a check with a mobile phone or for them to approve a wire, where they’re working at home from – with our single platform. It’s a matter of – we saw what happened last year. We were able to work remotely, they had to work remotely, and they want to capitalize on it. I will say that the pipeline – like pipeline activity and demos are up 30%, but to temper that a little bit, I have not seen an acceleration in decision-making, which is what I am hoping for in the back half or as we move into ‘22. But all of the conversations that are happening; if you remember, Q1, I said that the Tier 1 pipeline is back and now it’s about closing it. We got one closed in the first quarter, and we hope that momentum continues on throughout the year. The realization that this is here, I think there is – in this technology refresh; there is going to be a lot of names to change hands over the next couple of years, and we want to be, obviously, in the middle of as many of those deals as we can be.

Thank you.

Thanks, Auty.

Our next question comes from the line of Terry Tillman with Truist Securities. Go ahead, please. Your line is open.

Yes. Thanks for taking my questions. Hi, Matt and David. Thanks for all the color. And I’ll echo the prior comments on the net new bookings picking up. I guess I’ve a two-part question. On ClickSWITCH, I don’t know if this was – if we’re going to see this, I assume it would be in the queue, but I guess that’s in the second quarter. But so like maybe you can help us on what did you actually pay for ClickSWITCH? And then the second part of this question is I’m assuming ClickSWITCH does kind of fall in that treasury onboarding and digital account opening kind of segment, if there is a way to kind of look at it that way? And how do you see the growth prospects on a product like ClickSWITCH or that product family versus your core – the banking products or the lending products? Just trying to gauge what’s the excitement you see with this acquisition? Thank you.

Terry, good morning. I will give you some of the information that’s going to be dropping with that filing over the next two days. The approximate price that we pay for ClickSWITCH is $65 million, including fees. What we’re planning on right now is to see that this turn EBITDA positive by the end of the second year with Q2. We also see an accretive growth rate with that business, which we’re really excited about and an accretive gross margin rate with that business.

Terry, on the product side, it enhances our digital acquisition product. So if you think about the real value of ClickSWITCH, it is that people live out of the account where their direct deposit hits. One of the biggest reservations about switching to a new financial institution, bank or credit union or fintech, is moving that direct deposit over. They make it so simple and easy that you actually land the account, the consumer opens their checking account, and they begin living out of that account. That leads to a lot more opportunities, plus it makes it easier for the account holder to switch not only their direct deposit but other payments that they have. So we have a highly differentiated onboarding product with grow and what we’ve done with that over the last 2 years. Adding ClickSWITCH to it becomes highly differentiated, and what – after – during the pandemic and afterwards, it’s one of the hottest products we have out there. I’m very happy with the first 30 days since owning the business, both with the team, the culture, and the products. They have lived up to my expectations through April so far. I know that the relationship management and net new sales team are very excited to have this product in their bag.

Congrats on the deal. Thank you.

Thanks, Terry.

Our next question comes from the line of Robert Napoli with William Blair. Go ahead, please. Your line is open.

Thank you. I appreciate the question, and good morning, Matt and David. Congratulations on the ClickSWITCH deal as well. I’ve met with him. I think it’s a really, really good fit and should be a great cross-sell product for you as well. A question on the – I mean, I guess, the BaaS and the marketplace businesses, I mean, BaaS seems like, I mean, Credit Karma, obviously great client. Is that the top 10 client that you didn’t mention by name in the press release? And just maybe some – if you can give us a little bit on the size or the opportunity for the BaaS business? And then is that tied into the marketplace business, how is marketplace doing?

Yes, Bob. So that Credit Karma is the top 10 client that we referenced. For us, launching a program like the debit card is in many ways, just as meaningful as a net new win for us. They come – they started with a savings account and then they move to this checking account with a debit card associated with it. It becomes extremely meaningful. What we’re trying to do is provide color because it’s a different type of business. Things are going to become more transactional in that business because they are tied to the debit card. When we have clients like this that go-live, it’s important for us to articulate the importance of this – they are different than a digital banking client, where you have a minimum and then you begin to build on the minimum. The size of this client is more in line with what a Tier 1 bank on the digital banking side would be, with a tremendous amount of upside on top of that. As far as the opportunity with banking as a service, I’ll speak more globally around what’s happening. Right now, embedded finance is becoming a bigger deal in multiple industries, not just in fintech, but you have insurance companies, you have health care places where you have people that want to begin to provide banking services to their customers. There is a lot of activity that we’re getting out of those – that group of people. Very bullish on the TAM, we have it between $1 million and $2 billion, but I think that’s pretty conservative as we typically are with the TAMs, but very positive. Marketplace is an important differentiator for us in the business right now. It continues to gain momentum. There is not really anything meaningful on the revenue side, but it’s a differentiated solution for us that allows our customers to partner with other third-party providers in a rapid way where they can have a meaningful engagement. So, I’m very excited about BaaS. Thanks for asking about marketplace. It’s early, but it’s showing very good signs right now for us. Thanks, Bob.

Our next question comes from the line of Brian Peterson with Raymond James. Go ahead, please. Your line is open.

Hi. Thanks and congrats on the strong results. So just wanted to hit on the moving parts of the guidance a little bit; it looks like you took the 2021 guidance of about $7 million. I know there is some M&A incrementally in there, but I also wanted to understand with some of these BaaS deals, do we see that revenue ramp-up more quickly, so that would impact current year numbers? I’m just trying to get a better sense of what’s driving the guidance change? Thank you.

Yes. You bet, Brian. So on the guidance, what we’re incorporating in there is obviously the Q1 results, but also the impact of ClickSWITCH, the current business momentum, and some of the opportunities that we have for continued investment that are going to drive long-term value creation. On the BaaS question specifically, that is a business that we see growing at an accretive rate to the overall business for sure. That’s part of our long-term planning framework. Now it was really important that we called out in our prepared remarks, there is a big difference between the initial booking in BaaS and then the long-term stream of transactional revenue. That is going to ramp over time. We have that factored into our guidance currently. We feel like this is going to be a much more material part of our business as you look ahead 2 to 3 years.

Great. Thank you.

Thanks, Brian.

Our next question comes from the line of Andrew Schmidt with Citi. Go ahead, please. Your line is open.

Hey, Matt. Hey, David, Thanks for taking my question here. Good to see the pickup on the net new sales front, but it’s also great to see the continued execution on the cross-sell side as well. I wonder you can talk a little bit about the execution there. Is it – part of it is obviously having more products to sell. But has anything changed with your go-to-market strategy as it relates to cross-selling? As we think about having more products to sell, it seems like there could be some optimization in terms of cross-selling as the portfolio – the product portfolio gets a little bit broader. But anything on just what’s driving the cross-selling execution in the go-to-market strategy there would be helpful?

Yes. Thanks, Andrew. For us, it’s really been a focus with our customers, our engagement levels. I’m engaging with more customers than I ever have. The rest of the leadership team is. We’re really driving strategic conversations about digital transformation. When we square off with our customers now, you always say this, but there is a tremendous amount of attention that goes to listening and understanding what problems they are trying to solve because if we’re listening appropriately, we can drive many of these different products. If you look at the quarter, I mean, you’re talking a $10 billion bank, to treasury onboarding, a $6 billion bank took digital account opening, and you had 2 – top 25, top 50 on PrecisionLender. If I sit and think about what that translates to for us as a company: we have more than 1,000 customers live on our products. We have more than 150 customers with more than $5 billion in assets, and we have more than 85 with more than $10 billion. So our expansion opportunity with our product suite is tremendous, and it represents a huge upside for us. The energy and effort that we’re putting into understanding our clients with counterintelligence, who they are, what they want, when they need it by, and what they want from a road map perspective, tying that back into product and how we develop it; sets us up for a really nice place to be in rather than relying on a net new every single quarter to drive it. It’s a focus and alignment. I’m committed to trying to expand as far as we can in all of our customers, big or small. The organization, as we continue to square off with our customers, is really in a listen in a strategic mode so we can be at the center of this refresh as it happens because it’s happening across the board. We still have work to do. There are still customers that didn’t realize we – that PrecisionLender is a product we have. They didn’t or lending customers that didn’t realize we had digital banking solutions. So ClickSWITCH is one of the things that I’m expecting everybody to have in their bag. I want it to be attached to all the deals that we’re winning, and a lot of cross-sell out of it; rolling that into the funnel and that attention is good for us and it’s really going to be a long-term tailwind for this business, and it gives me a lot of comfort into the future.

That’s great to hear. Very constructive. Thanks a lot, Matt. Appreciate it.

Thanks, Andrew.

Our next question comes from the line of Josh Beck with KBCM. Go ahead, please. Your line is open.

Thank you for taking the question, team. I wanted to ask about, Matt, some of your comments on the digital acceleration and engagement that you’ve seen in the last year. You made some commentary that you think this will endure as we look forward. So just curious maybe what you’re seeing in terms of behavior and what’s providing you with that confidence? And are you having the conversation with some of your banks that said, we thought our ceiling was here in terms of how many of our digital users we could get engaged and now it’s actually much higher; just curious your thoughts on that topic?

Well, I think coming out of 2020, you had to go check your balance on your mobile phone, your tablet, or your desktop. You had to go send a wire out from your home office, which was on your tablet, and you weren’t connected to your office network. So there are all those behaviors: deposit a check because you couldn’t go to a branch, open – originate a loan because you couldn’t meet with you in person, so you had to fill out your loan applications online. All those things are what people have started to do. I don’t think we’re going back to renting movies from Blockbuster. I don’t think we’re going to go back to depositing checks with the bank once you’ve done it digitally. Those behaviors have become habits and how we want to do things. Those numbers are off the charts. I gave some numbers out. I think at the end of last year around remote deposit capture, but the numbers and the number of checks deposited and the amount deposited was off the charts in growth. You look at the engagement around logins. I think we were at more than $4 billion in 2020, and we will see more than that in ‘21, obviously. These are habits that are now part of our life, and they are not going to go back against it. We’re trying to do now, though, is take that engagement, and give it back to the bank, the credit union, or the fintech, so they can take this data and understand what is the next best product or what’s the service that I can provide my account holder? I have a lot of confidence that that’s going to be a sustaining habit of people, and I think it’s the tailwind of the business, and it’s while we’re so passionate about what’s ahead of us – ahead for us.

Thanks.

Thanks, Josh.

Our next question comes from the line of John Rodriguez with D.A. Davidson & Company. Go ahead, please. Your line is open.

Hi, this is John calling on for Pete Heckman. I just wanted to ask, do you guys expect PrecisionLender to get back on track with the growth perspective in 2021? And what are you thinking for the total revenue from that operation? Thank you.

Yes. I mean, PrecisionLender has got a lot of momentum. I want to give that team a lot of credit. They got acquired at the end of ‘19. Usually, we spend a lot of time with people integrating cultures, and they had to go remote. Just a shutdown in buying on those products. That team’s perseverance and passion is what I think of when that group, whether it’s the leadership, the founders. They really committed to it, and they buckled down, and it’s paying off. If you think about the end of the year plus the first quarter, what I see is a lot of momentum in that business. I’m even starting to see a little bit of life in Europe, which may turn out in the second half of ‘21. Just really excited about where they are. Yes, I do think you’re going to see them return to the growth numbers we were expecting. I don’t think we break out the numbers, David, but we don’t break out the numbers on PL.

Thank you.

Thanks, John.

Our next question comes from the line of Matt VanVliet with BTIG. Go ahead, please. Your line is open.

Thanks for taking the question, guys, and congrats on the quarter. I guess someone on their last question and some of the others earlier. But on the sales, the sales team organizational structure overall, do you feel like you need to start having some more specialization across the different product lines? A lot of success on the cross-selling, but are you running into a big enough opportunity anywhere where you need to maybe structure out the sales teams a little bit? And then secondarily, on the lending business as a whole, it seems like traction is coming back. Matt, to your comments. But what are your projections for total loan volumes as you look ahead? How much that will drive demand versus just wanting to move things more digitally?

Yes. So, Matt, good to talk to you, it’s been long, I’m glad you’re on the call. Sales structure, it’s – for us, if you think about the products as we put them together and we go square off with our customers, it depends on the tier where you’re going to start like Tier 1s; we’re beginning to coalesce around a broader account team that goes after those customers. Tier 2, Tier 3, it’s a little more geographic and product-centric. One of the things that we did is we put our solutions consulting organization within our office of strategy. Now they are very close to the product, the strategy, how we go to market. So we are specializing, but we’re also making sure that we are educating the people on how these products come together, what they mean to our potential prospect or customer that we’re talking with. There is obviously an evolution that’s going to occur with the sales organization and the relationship management organization, but that could be on a tier by tier basis, and we will continue to update you on those. I don’t have any big structural changes. Obviously, we had a really good first quarter, and I like the momentum coming into the second and in the back half of the year. I don’t want to – if it’s not broke, I don’t want to fix it necessarily, but there are some slight modifications we will make throughout the year and then just continue to invest in that group. On the lending side, I don’t have lending volumes on my end. I will just tell you that the activity that we’re seeing, the discussions around with our customers are that they are getting back to lending out money and not government money but for small business loans and lines of credit for folks. There is just a lot of energy around that business right now. Our ability to automate it within the digital banking experience where you take data from a customer, use that to pre-populate applications and information, so that you can make it easier for a customer to open a loan plus with the pricing tools and the data we can use from more than $3 trillion of loans we priced last year is very informative. That’s why I think you’re seeing PrecisionLender grow. You’re seeing the activity on cloud lending out there with – we had a top – a very large auto manufacturer that jumped in to use our application to help – help with the leasing auto. A lot of activity in the economy that’s revolving around lending, and we’re just in a really good spot, whether it’s on the banking or finance or the credit union side of the business.

Alright. Wonderful. Thank you.

Thanks, Matt. Appreciate it.

Our next question comes from the line of Michael Del Grosso with Compass Point. Go ahead, please. Your line is open.

Good morning. Thanks for taking my question. Somewhat of a multipart question actually, but first is – and I apologize if I missed this earlier, but overall commentary as well – on what you’re seeing as far as international demand, whether it’s PrecisionLender in Europe or BaaS in Australia and APAC. And then the follow-up is on ClickSWITCH specifically, super interesting product, particularly given a very large opportunity as it relates to bank account portability. I would think specifically in Europe as well. How do you see the opportunity longer term by geography between, I guess, U.S. and Europe longer term?

So on the international side, Europe seems to be picking up. Keep in mind, internationally, the only products we allow are our Cloud Lending and PrecisionLender. I think PrecisionLender on the banking side is picking up some activity in Europe. As I said earlier, I expect to have – hope to have some wins in the back half of this year. In Europe, Asia is kind of Steady Eddie on the all finance side with Cloud Lending. I think we could potentially have a PrecisionLender deal in the back half of ‘21 with PrecisionLender, but I wouldn’t necessarily commit to that yet, but we are getting some good traction with some bigger players out there. ClickSWITCH, as far as – right now, it’s a North American product. We have more than we can say grace over. Remember, it was a less than 50% shop that was trying to build their business. We’re dropping them into our business with hundreds of salespeople that are going to be telling their story. We want to make sure we get the delivery right; we have raving fans of the product. It’s integrated into our digital acquisition product as well as our digital banking products. We need to make sure we can scale it here in North America; I think that’s a 2 to 3-year window. We may look at doing something in talking with our clients overseas, but it’s a little tough right now to do that with travel restrictions and everything else. We’re excited about the ClickSWITCH technology. As I said, our customers’ prospects and sales and relationship management teams are as well.

Okay, understood. So just to kind of recap on that. So ClickSWITCH, the change to guidance, all – their anticipated impact on guidance, all North America, U.S., no international contributing? Yes.

That’s right, Michael.

Our next question comes from the line of Arvind Ramnani with Piper Sandler. Go ahead, please. Your line is open.

Hi, thanks for taking my question. I just really wanted to ask about the competitive environment, certainly with FIS and Fiserv. They haven’t been as sort of competitive on the digital front, and then you’ve had some newer players also kind of scale up. Can you just kind of comment on the overall competitive environment and sort of your win rates that you are seeing now relative to 12 to 18 months ago?

Yes, Arvind, the competitive market is the same for us. It’s the same group, depending on whether it’s lending or digital acquisition or retail Internet banking or business banking. Fiserv and FIS still compete like hell to win every deal they can. So does Jack Henry and the rest of them. Our win rates are holding steady. The tiers matter a little bit. But in the Tier 1 space, we’re still at 50% and then in the Tier 2, Tier 3, depending on the size of those around that number. We’re still very competitive with the folks that are out there, but sometimes I feel like you got a target on your back, but I feel good about where we are, and I feel good about the pipeline and our ability to execute against it over the next – over the foreseeable future.

Perfect. Thank you.

Thanks, Arvind.

Our next question comes from the line of Joseph Vafi with Canaccord. Go ahead, please. Your line is open.

Hey, guys. Good morning.

Hey, Joseph.

Just circling back on BaaS – good morning, Matt, just circling back on BaaS; if we could talk a little bit more about what the Credit Karma win means for your competitive profile there? I think you mentioned you added some new product functionality that might have been debit. I don’t know if you can just go into a little more detail on what that extra capability added was for Credit Karma and what that impact may mean relative to your move forward strategy with an expanded function to that? Thanks.

Yes. Thanks, Joseph. So Credit Karma was gracious enough to allow us to use their name. There is some sensitivity from both of us in this very competitive environment around what the features and functions are. I think what’s important about it is that large customers like Credit Karma and other Tier 1 BaaS customers give us tremendous insight into innovation and where we need to go, and they are really helping us build out this highly differentiated roadmap. Very happy with that go-live and that rollout gives a ton of credibility. It’s no different than on the banking side. When you roll out a big customer and they are up and running, other prospects look at that and say, okay, these guys can scale and handle that. Credit Karma has been a great partner. We’re very happy with the relationship. We’re going to continue to invest in. I do want to clarify that debit is not new for us. There were other features. Debit, it was a new product that they rolled out on top of their savings account. The volumes that we’re seeing are tremendous. They were successful; they are masters at marketing, and we’ve just been really happy with the rollout. I think we’re beginning to see other people that are taking notice and reaching out to us to engage in what our solutions are and what the opportunities to work with us are like. Very positive, very hard to do; feel like we’re in a really good spot on the BaaS side of the business. It’s just about execution and making sure that we’re getting in front of everybody that’s looking at doing these deals.

Great, much appreciate it. Thanks, Matt.

Thanks, Joseph. Have a good day.

Our next question comes from the line of Steve Comery with G. Research. Go ahead, please. Your line is open.

Good morning. Maybe I just wanted to ask about essentially the ClickSWITCH deal within the context of Q2’s future acquisition strategy. So maybe just a little commentary on what made ClickSWITCH an attractive deal for Q2 and sort of how those characteristics play out in future deals? Thanks.

Yes. I do want to know that like one of the things that’s unique about ClickSWITCH for us is it’s really the first acquisition we’ve done or product that we’ve built that crosses both fintech, banking, and credit union. So this product can be sold by all of our sales force to all of our customers. That was one of the things that was unique about it. For me, it was the founder, Cale. We’ve known each other for a long time. When he started the business, he was passionate about trying to figure it all out. We talked at one point, but it was too early. What he has done is he built a great culture. He built a great product, and he built a great client list. We’ve seen them execute. We like the team. We like the products. We think – and I think they obviously had plenty of options as far as to go to different places. Culturally we aligned, and then where we are from a product perspective, I think it allowed him to help him fulfill what his mission was, which is to become the premier switching product and help consumers move to different relationships and be portable. For us, it’s really about helping our customers engage and be more profitable with their clients and to drive more adoption so people move off their legacy bank to new next-generation banks that we’re working with. It’s a great fit for us. I’m excited about it. The team is excited about it. I think we’ve gotten pretty good at these acquisitions, and I think it’s going to be probably one of the quickest to jump in the pipeline and start to have an impact for us.

Thank you very much.

Thanks, Steve.

There are no further questions at this time. I’d like to turn the call back over to Matt Flake.

Yes. Thanks, everybody. I also wanted to point out that we released our first ESG report this morning. It highlights the company, how our company is addressing ESG priorities for employees, customers, and partners. It’s a very meaningful document to this company, and I think it’s a roadmap for how we’re doing the future and where we’re going. I’d encourage you to go read the ESG document that we reported that we put out. I’m very proud of the work that the team did to put that together, and I’m proud of the company that we’ve become and what we will be as well. So thanks, everybody, for your time, and I hope you have a great week.

This concludes today’s conference call. You may now disconnect.