Greetings and welcome to today's earnings conference call being hosted by Repay. With us today are John Morris, Co-Founder and Chief Executive Officer, and Tim Murphy, Chief Financial Officer. During this call, we will be making forward-looking statements about our beliefs and estimates regarding future events and results. These forward-looking statements are subject to risks and uncertainties, including those set forth in the SEC filings related to today's results. Actual results might differ materially from any forward-looking statements that we make today. The forward-looking statements speak only as of today and we do not assume any obligation or intent to update them, except as required by law. In an effort to provide additional information to investors, today's discussion will also include references to certain non-GAAP financial measures, an explanation of these non-GAAP financial measures, as well as a reconciliation of these non-GAAP measures to the nearest GAAP financial measures can be found in our earnings release, available on the company's investor relations site. I would now like to turn the call over to Mr. Morris. Please go ahead.

Thank you, operator, and good afternoon, everyone. It has just been two months since our last earnings call. The world has changed significantly in that time. We hope everyone is continuing to stay safe and healthy during this difficult and challenging period. We also want to take the opportunity to reiterate that the health and well-being of our employees, customers, partners, investors, analysts, and other stakeholders remains top of mind. We are grateful and inspired by the incredible work of our team during this period of stress and uncertainty. While the macro environment has shifted, our mission and principles remain the same, and the value proposition for our business has grown even stronger. The value we deliver to our customers is evident from our first quarter results. We show card payment volume and gross profit growth of 58% and 60%, respectively. On an organic basis, we saw gross profit growth of 20% compared to the first quarter of 2019. Today, I wanted to touch on three key topics. First, a year-to-date update on our business. Second, I wanted to spend a few minutes reviewing the aspects of our business that we believe help insulate us during this unprecedented time. And lastly, I wanted to review our strategies for near and long-term growth. Now, to discuss our year-to-date trends. On our fourth-quarter call on March 16, we shared our belief that during this unprecedented period, we might see increased interest in innovative electronic payment solutions, meaning that Repay's value proposition would only become more attractive. So far that thesis has played out as we have experienced increased demand for our offerings in several of our businesses and across existing and new clients as our customers have accelerated implementation of electronic payment capabilities. We are proud to be able to serve these merchants, providing them with services they need to enable their customers to make payments in this unprecedented time. Our technology has performed exceptionally well, and again, I want to mention that I could not be more grateful for our team and would like to personally thank them for their outstanding efforts through this challenging period. Overall payment volumes in our loan repayment verticals continue to exhibit resiliency. While we observed some softness towards the end of March, which we believe was driven by consumers and lenders being unable to make and take physical payments, our April volumes have rebounded as more consumers and lenders adopt and implement remote electronic payments. We also experienced a volume spike in loan repayments as consumers began to receive stimulus package funds, solidifying our belief that loan payments rank high in payment priority. We believe a large majority of our lenders and borrowers would be eligible to receive CARES Act and state unemployment benefits. Demand for instant funding has also increased as lenders and borrowers quickly moved from physical disbursements to electronic payments. As a reminder, instant funding is a product we introduced last year, where lenders can send funds directly to eligible debit and prepaid cards by electronic transactions enabled by Visa Direct and Mastercard Send. We would also like to provide an update on our B2B verticals, which is a new and fast-growing part of our business. We have seen demand for accounts receivable and accounts payable automation increasing largely out of necessity. We continue to expect small and mid-sized businesses to adopt more electronic payment options. We do expect B2B volumes to be slightly impacted in the short term by reduced business spending. On the B2B healthcare side, our business has remained relatively steady. While we have seen a drop in elective surgeries, we expect this business to pick back up once shelter-in-place orders are lifted, and elective surgeries are permitted once again. Our TriSource processing platform has remained stable. While there has been some modest impact on legacy diversified retail portfolios, these are not material exposures to our business. We will continue to monitor the situation closely, and while we are not immune to challenges and uncertainties during this time, we continue to believe that our diverse merchant base and the resiliency of the verticals we serve positions us extremely well for the long term. We also continue to benefit from the secular shift to more innovative and integrated payment solutions which we specialize in, providing us with unique characteristics that should help provide a steady source of growth as we navigate this unprecedented macro environment. I'll now discuss some of these characteristics. As I said on the Q4 call for the loan repayment business, a large majority of the payments we facilitate are non-discretionary financial obligations that are recurring in nature. These types of payments are usually set to be automatically paid and are still very necessary even in an economic downturn. Data from the Great Recession illustrates that consumers prioritize loan payments, particularly auto loan payments, which I mentioned earlier. In addition, we believe the current environment will allow us to acquire new clients, as we have been prevented from taking in-person payments given the shelter-in-place orders and accelerate loan fundings. We believe we can help solve both lender and servicer challenges with our variety of electronic payment methods such as IVR, web, text, and mobile. As for our loan mortgage servicing business, while we acknowledge that the mortgage forbearance referenced in the CARES Act may have an impact on overall mortgage payment volume, recall that Ventanex specializes in processing complex exception-based transactions, of which there will be many in the upcoming months. This is yet another example of our unique portfolio of solutions providing immediate value to our customers during this unprecedented period. And as I mentioned earlier, we expect small to mid-sized businesses to adopt more electronic payment options, which will start to benefit our B2B business as we ramp up our accounts payable automation capabilities. We also believe that in the near term, the willingness to absorb electronic payment costs is likely to outweigh the risk of not getting paid at all, and the benefits to working capital will continue to justify the cost. Now more than ever, this world remains ripe for digitalization in real time. We have the full suite of payment solutions to enable that shift while enabling our customers to run their businesses efficiently during this difficult time. So the industries we serve and the products we provide position us well, but our business is also strong financially, and we've taken even more steps to protect our business in the face of the coronavirus-prompted economic crisis. First of all, we have an attractive cost structure that enables us to manage earnings and cash flow, even when topline metrics experience downward pressure. In addition, our cash and liquidity positions remain strong. Some of the initiatives we have recently put in place center around hiring prioritization and cost management. We've developed automated reporting tools to allow enhanced daily portfolio visibility across business lines and payment volumes. We expect some negative impacts on our business from the pandemic and the resulting economic crisis, and there could be a delay in the timing of these impacts due to the nature of our business. Later in the call, Tim will provide some specific context around how the duration and severity of an economic downturn could affect our 2020 results. Based on what we know now and what we see in our business, we believe that our initiatives will provide sufficient capital and earnings preservation through the eventual easing of the crisis. The final topic I wanted to touch on today before turning the call over to Tim is the review of our strategic initiatives for the near and long-term. As I mentioned earlier, our business and its principles have remained the same, but the value proposition for our business has grown even stronger. We continue to address the large underserved loan repayment verticals and increase debit penetration with existing customers. Despite the unprecedented environment in which we are now living, we expect our growth in 2020 will continue to be driven by expanded usage and increased adoption with our existing clients, for which we have industry-leading volume retention. A significant portion of our organic growth comes from these existing customers, and we expect that to continue to be the case in the near and long term. In addition to existing customer growth, we expect to continue to experience new client wins in existing and new verticals driven by our direct salesforce. This will be aided by software integrations, which we organically added two new partners during the quarter. In addition, we added four integrations in the mortgage servicing and B2B healthcare space through our acquisition of Ventanex in the first quarter. That brings our total to 76 integrations at the end of March. I would also like to note that we had record sales months for new gross profit in March and April. In April, we announced a partnership with TurnKey Lender, a cloud-based lending software for evaluating borrowers, decision-making support, and online process automation. We're excited about this partnership as it provides us access to a network of 300 plus lenders across a variety of loan verticals, many of whom are in the U.S. and Canada. It will also enhance our offering for both loan funding and payments. We're also beginning to experience traction in Canada with some key integrations. We recently signed a partnership with NovaTech, an industry-leading end-to-end lease and loan automation software tailored to the needs of any lending transaction. NovaTech has a substantial footprint in Canada with 23 Canadian lenders, about 80% of the prime market. In addition, we are seeing increased demand from credit unions challenged by the shift in consumer spending habits and payment preferences. Repay has stepped in to help rapidly deploy new, expanded digital transaction options, offering a full suite of IVR, SMS, text to pay, online web portals, and branded mobile applications to ensure the most frictionless customer-centric payment experience. Finally, we are pleased to announce that Repay has been selected as the payment processing provider for Mercedes-Benz financial services, a leading automotive financial and mobility services provider. At the backend payment processing engine, Repay's platform will enable Mercedes to provide more enhanced modern solutions along with deeper and broader payment options to its customer base to match their varied personal preferences for mobile, online, and phone-based transactions. We are looking forward to a very long and successful partnership with the Mercedes-Benz team. Now moving into the M&A which has always been and will continue to be a driver of growth for the company. As you know, during the first quarter, we completed the acquisition of Ventanex, which is our third acquisition since we went public last July. Ventanex brings significant growth opportunities in the mortgage servicing and the B2B healthcare markets. Our M&A pipeline remains active as we continue to look for targets in current verticals along with attractive new verticals that are large, growing, and underserved. To wrap up, the diversity of our business along with the unique solutions we offer has positioned us well in the short term, but also to drive significant post-crisis volume increases, as the move from cash and checks to electronic payments continues to accelerate. I'll now turn the call over to Tim to discuss Q1 results in detail and to go over our outlook for the year.

Thank you, John. I hope everyone is staying healthy and safe during this time. Now, let's move on to our Q1 financial results before we review our illustrative scenario-based outlook for the remainder of the year. Despite the significant change in the macroeconomic environment toward the end of the first quarter, Repay delivered strong results across all of our key metrics. For the first quarter, card payment volume was $3.8 billion, an increase of 58% over the prior year's first quarter. Total revenue was $39.5 million, an increase of 71% over the prior year first quarter. TriSource, APS, and Ventanex contributed approximately $12.5 million of revenue during the first quarter. Moving on to expenses in the quarter, other costs of services were $10.8 million compared to $5.1 million in the first quarter of 2019. This increase is primarily due to the addition of TriSource, APS, and Ventanex. However, when excluding those additions, the amount largely flattened in Q1. Gross profit was $28.7 million, an increase of 60% over the prior year's first quarter. On an organic basis, gross profit increased 20% in the first quarter of 2020 compared to the first quarter of 2019. As a reminder, gross profit is a key metric for us and this is how we price new customer deals and how we structure our sales team incentives. SG&A was $18.2 million compared to $8.7 million in the first quarter of 2019. The increase was primarily due to increased hiring, share-based compensation, and added operating costs from our acquisitions. First quarter pro forma net income was $1.9 million compared to net income of $4.9 million in the first quarter of 2019. The decrease was mainly as a result of increased SG&A for the reasons just mentioned. First quarter adjusted net income was $11.4 million or $0.17 per share. Please note this now includes the tax effect adjustment. Lastly, first quarter adjusted EBITDA was $17.4 million, an increase of 53% over the prior year first quarter. First quarter adjusted EBITDA as a percentage of total revenue was 44% compared to 49% in the prior year first quarter. This decrease is primarily a result of additional costs related to becoming a public company, such as new legal, accounting, and tax resources. Additionally, TriSource, APS, and Ventanex's EBITDA margins are slightly below our loan repayment business. As John mentioned, our cash and liquidity positions remain strong. We have $34 million in cash on the balance sheet, $30 million of undrawn revolver capacity, and $46 million of undrawn delayed draw term loan capacity. Please note that in early April, we tapped approximately $14 million of the total $60 million delayed draw term loan capacity to pay the first APS earn-out. Post this draw on a delayed draw term loan, our pro forma net leverage was approximately 3.6 times, which is well below our current net leverage covenant level of 5.5 times. I also wanted to note that we have decided not to draw down our revolver at this time. Given our current balance sheet strength and our strong cash flow generation, we believe that we will be able to navigate through these times without needing to access capital from our revolver. Of course, we will continue to monitor our liquidity position closely. As of March 31, 2020, we had approximately 67.3 million shares outstanding on an as-converted basis. Finally, moving on to our illustrative scenario-based outlook for the remainder of the year. As we mentioned earlier, overall payment volume in our loan repayment verticals continues to exhibit resiliency into the second quarter. We observed some softness towards the end of March, but April volumes have rebounded. We believe this trend reflects longer-term moves by certain clients towards more electronic payments versus on-site cash or check. We continue to monitor daily volumes across all of our businesses to gain visibility into future trends. We cannot predict the length of disruption from COVID-19, how long the economic impacts are going to last, and how deep they will be. To account for this uncertainty, we are providing three illustrative scenarios that make assumptions on macroeconomic and market-specific drivers that may impact our business over the remainder of the year, and these are laid out in the supplement posted on our investor relations website. Our first scenario assumes a fairly rapid recovery into Q3, meaning that public health measures are well-coordinated, stay-at-home orders expire, and consumer demand bounces back strongly. This scenario also assumes that people return to work over the summer and the rise in unemployment is largely temporary. For our loan repayment business, this would mean that delinquencies and defaults tick up slightly for a brief period and originations slow through Q2 before returning fully in the second half of the year. For the B2B business, this means that there is a bounce back in manufacturing and distribution volumes in Q3 and healthcare payments remain steady. Under this scenario, we would also expect the diversified payments, which is our TriSource portfolio, to rebound in Q3 and that ARM experiences some near-term weaknesses but benefits in the medium term as consumer debts transition to this new market. Under this scenario, we foresee the business performance consistent with the low end of our prior guidance. There may be some upside to this if the recovery occurs early in the third quarter. Our second scenario assumes recovery in Q4. Specifically, we assume public health measures aren't that well-coordinated as in the first scenario, and unemployment is moderately elevated at year end, which is offset by seasonal hiring contributing to the Q4 recovery. This scenario also assumes that consumer demand normalizes by the end of the year. For our loan repayment business, this would mean that increased delinquencies and defaults persist into the third quarter, and that originations dip further as lenders tighten underwriting requirements. For the B2B business, this would mean that manufacturing and distribution remain weak into the fall and early winter and that healthcare expenditures are down relative to pre-crisis levels with a rebound in elective healthcare procedures. Under this scenario, we would also expect that diversified payments demonstrate a phased recovery not reaching pre-crisis levels until the latter half of Q4. The ARM businesses would experience weaker collections and yields for the next six months. Under this scenario, we estimate about a 10% risk to the low end of our prior revenue guidance, with less of an impact on adjusted EBITDA due to the cost actions we've been taking and which we can further implement. Our third scenario, which represents our most bearish case, assumes continued difficulty through 2020 and an early 2021 recovery. This scenario assumes sustained elevated unemployment due to permanent loss of jobs, with consumer demand remaining weak going into 2021. For our loan repayment business, this would mean that the second half of 2020 continues to experience elevated levels of delinquencies and defaults lasting into 2021, with depressed new loan origination volumes. In our B2B business, this means that manufacturing and distribution volumes continue to show significant weakness into Q4, and there are sustained decreases in elective healthcare procedures. Under this scenario, it also means that there will be a longer-term shutdown of diversified businesses that will continue through Q4, and the ARM businesses would experience weaker collections and yields for a prolonged period. It's obviously most challenging to try to forecast what this could mean for each of our business lines, but this would require us to assess revenue headwinds and adjust costs more aggressively to best mitigate the impact on adjusted EBITDA. As mentioned earlier, in terms of cost actions, we have chosen to focus on three key areas today. The first area is hiring prioritization. We have placed a freeze on non-priority new hires. We define priority as those that will mainly continue to support revenue-generating and product development initiatives—technology developers, product owners, and sales management. The second is operating expense management. We have eliminated all nonessential spending and implemented enhanced expense approval processes. The third area is vendor cost management. We have been in close discussion with our key vendors on ways to reduce processing-related costs. We anticipate that the above cost actions will save approximately $3 million to $4 million in 2020. We may decide to implement additional expense management initiatives if we sense the likelihood of a more prolonged recovery period is increasing. I will now turn the call back over to the operator to take the questions.

Thank you. We will now begin the question-and-answer session. Our first question comes from Bob Napoli with William Blair. Please go ahead with your question.

Thank you, John, Tim, good to hear from you guys. Question, if you could give a little color on exactly what you saw on trends, like how much of a slowdown in March and then acceleration. So yes, I mean I guess you had like 20% organic gross profit growth. Maybe talking about it in those terms and kind of which sectors you saw decelerate and then accelerate. We've seen some numbers where we've gotten like week by week numbers out of Visa or some other companies, I don’t know if you can get to that level or not organically.

Thanks, Bob. So as we discussed, we did start to see some volume declines toward the end of March as the nationwide shelter-in-place mandates rolled out, and many of our lenders' branches were closing. There was a transition period when those lenders and consumers were not able to make payments in-store. That caused the transition for about a week and a half or two weeks. Then we started to see volume pick back up again toward the end of March into early April, and loan repayments have continued to exhibit strength throughout April and into early May. We think that the stimulus payments from the CARES Act have really led to increased repayment volumes, which again solidifies the belief that these consumers really place a high priority on loan repayments. We think there was maybe a 5% to 10% impact toward the end of the first quarter. In loan repayments, we again saw that bounce back. In our TriSource portfolio, which is largely focused on retail, that declined more rapidly, and then business-to-business payments also declined in April. But we've seen that rebound in early May. The TriSource portfolio will probably take a little bit longer to come back, because it will come back as states open up and businesses are allowed to operate again. So overall April was in line with Q1 monthly averages. Home repayments were up, and these other two portfolios were slightly down. Now in May, we see loan repayments continue to be up. B2B has rebounded in early May, and TriSource retail portfolios may take a little while longer to come back as things open up.

Thank you. That's helpful. Then a follow-up question just on kind of the long term, if you think that this is accelerating the secular shift, which businesses you may be seeing that in, if you're seeing more demand from customers at the top of the funnel in certain businesses? So any thoughts on the effects of the pandemic increasing demand for your products and what you think that means longer term?

Yes, so I do think it's accelerating demand for electronic payments and electronic funding and renewals of loans. As we mentioned, we had very strong new sales in March and April, and we think a lot of that had to do with merchants that were in the funnel that maybe were taking a little longer to pull through or were resistant to the various payment channels and had to accelerate their adoption. So we're seeing that happening and we're seeing them move through our contracting and underwriting process much more quickly than they were previously. We think there's this real catalyst within loan repayments. For B2B, the softness in April, I think, was just that business spending in general was down. But I do think that there's a shift now to these electronic payment methods that will be longer-lasting. So I think this is certainly benefiting B2B payments. We feel good about that. We feel coming out of this in a position of strength with higher adoption rates, which is, as you know, a significant driver of organic growth.

Thank you. Our next question comes from the line of Sanjay Sakhrani with KBW. Please go ahead with your questions.

Sorry, I was on mute. Thank you guys. Nice to hear from you. I'm glad you're well. Just to follow up on Bob's first question, when we think about the April trends, how confident are you guys that it's a sustainable kind of upside case? Given some of it might be artificially propped up by stimulus, and if the stimulus goes away, that might roll over. Are there any anecdotes that you might be able to provide in terms of market share gains or anything else like that?

Yes, we feel confident that it's sustainable in the sense that there's the increased adoption as well. Even if there were—for whatever reason—if the stimulus also is not just the direct recovery rebates that went to consumers, there's also the enhanced unemployment insurance and other features that would allow them to continue to make these payments. And then, if for some reason there were a dip in those payments, we think that the fact that the adoption has increased would offset any dip. And hopefully, by that point, it would be into one of these recovery scenarios. We think it's sustainable from that point of view, and we do see very positive trends in early May, as I mentioned. So it seems to continue. We are not seeing any slowdown in that trend. So that's how we view it. And John, if you want to add anything there?

Yes, Sanjay, I really think this is a pivotal change to accelerate the shift to electronic payments and digital payments. I've seen this before, and I really think this will change the overall consumer behavior as well. But I also think that exactly, I think you are—and everyone's—aware that the stimulus payments we did see that happen. We have seen some of that activity continue. Ultimately, there could be a scenario where consumer lending delays could filter through over time. But generally speaking, for installment-based type loans, especially auto loans, or longer-term loans, we feel good about our position.

Okay, I appreciate it. And my follow-up questions on the outlook. I was curious, how do you think about scenario one versus scenario two? I'm curious how confident you are that scenario one is a high probability event, or do you think it's more likely a scenario two event? I'm just trying to measure it up relative to how we're thinking about the macro environment and unemployment rate levels, understanding that there's a strong secular tailwind underneath that, which I completely agree with. So I'm just trying to gauge what's the most likely scenario one versus scenario two as we sit here today. In the event scenario three happens, how quickly can you make some adjustments to your model to catch up to a new reality if that were to happen, even though it seems lower probability? Thanks.

Yes, sure. Based on what we know about our merchants and these loan repayment verticals, we think it's probably closer to scenario one. Of course, we can't predict exactly how quickly this recovery will happen, but based on what we know, we would think it's more likely a scenario one. If it were to slip to scenario three, as we mentioned, we've been focused on a couple of cost actions. Probably the biggest driver of expense reduction is focusing solely on priority hires. If we saw that we needed to pull back, we have that lever to pull. We are still in growth mode, hiring key people to focus on those revenue-generating initiatives. We are monitoring that very closely and would take action as soon as we felt that was reasonable.

Yes, I would add that we had record sales months in March and April. We would anticipate that coming online for the remainder of the year as well. So that should be a positive thing. Additionally, the secular shift—the acceleration of the shift from cash to digital payments, as we are offering—creates a real near-term positive outlook for us.

Thank you. Our next question comes from the line of Joseph Vafi with Canaccord. Please either question.

Hi guys. Good afternoon. Thanks for taking my call. Just a couple. I was wondering if you have seen a change in the environment in terms of who is paying transaction costs or interchange fees? I know it's borne by consumers sometimes in some of your segments and by merchants, or suppliers, or vendors in others. I'm just wondering if given all the dynamics now there's any change in how pricing is done and who is paying for the pricing? And I have a follow-up.

Yes, typically in a large portion of our loan repayment verticals, costs are absorbed by the lender. In the auto lending space, it can be more acceptable to be in the form of a convenience fee borne by the consumer. We have seen some easing of that on the lender side sometimes, where they would want to accommodate the consumer. On the B2B side, costs are traditionally borne by the business paying, but there's a concept of discounts. We haven't seen any immediate changes there, but over time, more businesses may want to explore scenarios where the offering is made to someone choosing to use a credit card. So we haven't seen any major shifts on the B2B side associated with who bears the costs.

Sure. And just kind of on the TurnKey Lender, it looks like a really interesting partnership deal with a leading Fintech. I know you've worked with different partners in the past in software, but this seems like a different application. So just wondering that and then relative to the M&A environment, I think some people are getting more cautious on M&A right now, while some may look at it opportunistically, believing prices may be more attractive now. How are you balancing M&A versus other strategic endeavors right now? Thanks a lot.

So on the couple of things we announced as far as the partnerships, yes, we think we have a strong relationship that opens up our ability to reach 300-plus lenders on the TurnKey Lender software platform. So we think there's a great opportunity there as we continue to expand into Canada as well. One of the things we've talked about in the past is that when we enter into a new area or geographical area, it takes us a little while to form these relationships to extend our reach. We think both of those partnerships will allow us to expand our entry into the Canadian lender market, which we view positively. Regarding acquisitions, Tim can provide some additional color there. We see opportunities there. We think we're positioned well as a public company, and that some opportunities are going to come out of this. We've seen additional activity, although we're being patient and watching what's happening, particularly as this impacts various businesses. We believe there could be opportunities that fit our acquisition criteria as we continue to evaluate our M&A pipeline.

Yes, that's right. As we've discussed, we have an internal corporate development team that is trying to keep the pipeline full and active and we’re starting to receive some inbound interests. We’re evaluating those and when the time is right, we’ll consider what makes the most sense. But as we said on the call, it's still an active pipeline.

Thank you. Our next question comes from the line of Craig Maurer with Autonomous. Please proceed with your question.

Yes, hey John, Tim, good to hear from you guys. I was hoping first you could comment on the yield and how we should expect that to move if at all, based on how volumes are shifting right now between different segments? And second, there was an 8-K published late in April regarding your warrants. I was hoping you could comment on the plan for the warrants. Thanks.

Yes, sure. We felt like the revenue yield was strong in Q1, about 103 basis points, which is up from Q4. We would expect it to be similar to that level going into the next few quarters. We're feeling good about our pricing and take rates from that perspective, and about gross margins, and we've been able to continue to drive profitability from revenue to gross profit. This continues. And regarding the warrants, we did put out a notice of a potential reduction in price, however, there is nothing concrete on that; that notice period is still open, and we will be evaluating that this week. We want to proactively think about how we can manage the warrants effectively if opportunities present themselves. That was the purpose of the notice to start the clock on that period. If we choose to do something there, there will be additional information disclosed.

Thank you. Our next question comes from the line of Peter Heckmann with DA Davidson. Please proceed with your question.

Hey, good afternoon. Most of my questions have been answered. I just wanted to follow up on the $3 million to $4 million in cost savings in 2020 that you are targeting. About how much of that should show up in the second quarter?

Yes, about approximately $750,000 to $1 million of that. Most of that is coming from the priority hiring bucket. We did turn that process on right at the beginning of the second quarter. We also implemented these other two initiatives right at the beginning of the second quarter as well. So, I think that should have about a full quarter effect. Again, most of it coming from slowing down hiring—not stopping hiring, just focusing on the highest priorities.

Okay. And then regarding forbearance in the auto lending space, how do you think about that typically? What's the normal forbearance period and how do you typically see a borrower catch up?

Well, there has not been any mandated forbearance in auto. We've heard that that's true in mortgage and student loans, but in auto, our understanding from discussions with our customers is that it's voluntary. We’ve heard of some situations where there have been deferrals, but that's not widespread. Those deferrals will still ultimately be due. As we discussed, we feel very positive about our loan repayment volumes. I've not seen any decrease tied specifically to widespread deferrals, which means that when those hurdles are ultimately due, it will serve to increase our volume at that time. So I'm not aware of any mandated deferrals with auto—only a handful of kind of case-by-case voluntary deferrals, but again, that will benefit us in the future when those are paid.

Okay. And just the last one—the amount of acquired revenue that you mentioned outperformed my expectations. Was it one area of outperformance or was it just some conservatism originally on the commentary around the acquired revenue?

I think the businesses have performed well, and it was probably just conservatism at the outset. We feel good about them and that they performed nicely in Q1.

Yes, I think the organic growth contribution year-over-year probably helped as well.

Thank you. Our next question comes from Mike Grondahl with Northland Capital Markets. Please proceed with your question.

Yes, thanks guys. The total sales reps and the direct sales reps, where were they at the end of March 2020? Can you compare that to a year ago?

Yes, sure. So probably now in the low 50s from a direct sales rep perspective. And recall, we are a direct salesforce, so we don't have ISOs or agents. We do rely on the software partners as referral partners and lead sources. That's probably in that low 50 range and that would have been a year ago, maybe around 25 to 30, so significantly increased. A lot of that has come through acquisitions. One of the aspects we really like about the businesses we've acquired is that they've had strong distribution channels. Some we've enhanced already. The increase in direct salespeople is a mix of new organic hiring and from the acquisitions.

Got it. And just a quick follow-up—the Mercedes-Benz Financial Services win. Can you talk a little bit about the sales cycle there? It sounds like it could be a big customer, trying to size it for us a little.

Sure. It was a pretty long sales process, not only just the regional sale but now the implementation. Our team has done a fantastic job going live with Mercedes; obviously it's a blue-chip customer, and they had a lot of demands. We feel like our customized technology is really benefiting them already. It took a lot to meet all their specifications and we think that will enhance our overall platform, not just from Mercedes. We’ve started processing recently, we're just gathering data now, and it's too early to talk about specific contributions. We did put some contribution in for this year, but we were very conservative with that as we wanted to understand processing volumes, the different channels we’ll be using, and the usage and adoption of those channels over time.

And I would add that we don't anticipate—obviously—not very often do we talk about specific customers. However, we mentioned this because we discussed our approach that we would be targeting the captive world for this opportunity. We think it’s appropriate to announce. However, we don’t anticipate announcing margins or pricing for every specific customer. We do like the opportunity and believe we can continue to enhance our technology, which was a leading reason why we won this deal.

Thank you. Our next question comes from Timothy Chiodo with Credit Suisse. Please proceed with your questions.

Thank you. And thanks for taking the questions. Good afternoon, guys. My question is around the instant funding product. We've mentioned it a few times, the last few earnings calls, and just want to dig into it a bit. Any added context you could give us around the potential sizing or market opportunity for that product? The appetite for it? More specifically on the economics, meaning the gross revenue that you're charging and sort of the costs, which, I'm assuming, are the Visa Direct, MasterCard, and related network fees and interchange, et cetera. Maybe you could just help us understand the gross and the net, maybe on a basis points basis or if it's on a cents per transaction. Any added color there would be very helpful. Thanks.

John, do you want to take that one?

Sure, yes. Overall, the way that product is specifically priced is on a per transaction basis, although it may be, you could definitely have a decent amount of volume. It would be on a click revenue basis; therefore, you’d see it on a net revenue basis. It would not be a substantial contributor without a substantial amount of transactions coming through. One of the reasons we don't— we're not getting ultra-aggressive with what we are seeing from a net revenue perspective is that we are trying to see as that volume ticks up over time as adoption happens. It will take a while to be meaningful to the actual net revenue contributions. However, what you've heard us say before is what we think is unique about it is, and we have seen increased activity and increased onboarding from existing and new customers. We think it will create a unique differentiator for us, particularly as consumers want to get funds in real-time through a card-based transaction. We think this will possibly accelerate the shift to digital in real-time for repayments. In the near-term, we don't have specific numbers we can give you from a contribution to net revenue. We will continue to be conservative there as we see that move and change over time without getting ahead of ourselves, remaining conservative in our outlook.

Thank you. Ladies and gentlemen, at this time, there are no further questions. I'd like to conclude the conference and thank you for your participation. You may disconnect your lines at this time.