Good afternoon. I would like to welcome everybody to REPAY's First Quarter 2023 Earnings Conference Call. This call is being recorded today, May 10, 2023. I would like to turn the session over to Stewart Grisante, Head of Investor Relations at REPAY. Stewart, you may begin.

Thank you. Good afternoon, and welcome to our first quarter 2023 earnings conference call. With us today are John Morris, Co-Founder and Chief Executive Officer; and Tim Murphy, Chief Financial Officer. During this call, we will be making forward-looking statements about our beliefs and estimates regarding future events and results. These forward-looking statements are subject to risks and uncertainties, including those set forth in the SEC filings related to today's results and in our most recent Form 10-K and 10-Q filed with the SEC. Actual results may differ materially from any forward-looking statements that we make today. Forward-looking statements speak only as of today, and we do not assume any obligation or intend to update them, except as required by law. In an effort to provide additional information to investors, today's discussion will also include references to certain non-GAAP financial measures. Reconciliations and other explanations of those non-GAAP financial measures can be found in today's press release and in the earnings supplement, each of which are available on the company's IR site. Those materials include reconciliations and other explanations regarding REPAY's organic growth. As described in our materials, Q1 2023 organic growth is calculated by excluding incremental contributions attributable to Blue Cow software business in Q1 2022, since REPAY divested Blue Cow during Q1 2023. With that, I now would like to turn the call over to John.

Thank you, Stewart, and good afternoon, everyone. Thank you for joining us today to review our first quarter results, which provided a strong start to the year. On an organic basis, in Q1, we reported revenue growth of 12% and gross profit growth of 13%. We believe these results highlight the benefit of our resilient and diversified business model. Organic growth was largely driven by strong performance in our Consumer Payments segment. We remain excited about the opportunities across both the Business Payments and Consumer Payment segments. We also now have 248 software integration partners across REPAY, enabling our go-to-market to develop robust sales pipelines across our verticals. From a business perspective, during the quarter, we continued to make progress streamlining and optimizing our organization while also investing in growth. As we discussed on our Q4 call, we have segmented our results as well as our organization into Consumer Payments and Business Payments. And on February 15, we completed the divestiture of Blue Cow. This has enabled us to place a greater focus on the needs and results of each business line. Our Consumer Payments segment experienced 17% organic gross profit growth year-over-year, mainly driven by recent large client implementations, the ongoing secular tailwinds within the payments industry, and the demand for our products, along with our focus on go-to-market and product expansions. During the quarter, we added four new software partners in Consumer Payments, bringing our total software integrations to 154. We are also focusing on expanding our relationships with these partners by enhancing our existing integrations with new product features and payment modalities as well as decreasing our sales efforts. Our internal sales efforts continue to focus on large enterprise clients, and we are winning. In Q4, we signed a large private captive auto lender. And during Q1, we signed another large captive auto lender, which is the internal finance arm for one of the largest automakers in the United States. REPAY will be providing a full suite of debit card and ACH payment processing for new and used vehicle payments across the captive auto clients enterprise. We continue to believe that the automotive market is a great opportunity for future growth. Credit unions also remain a focus of ours. We signed 11 new credit union clients this quarter, bringing our total credit union customers to over 250. We continue to enhance and upgrade our integrations with partners such as MeridianLink and Jack Henry Symitar in order to facilitate accelerated distribution within this key vertical. The underlying trends have not changed from last quarter. We are still seeing demand for our clients' products, and our clients are looking to us for more ways to engage and interact with their borrowers from a payment perspective. The mortgage servicing space continues to be a growth opportunity for the Consumer Payments segment. Digital solutions help mortgage servicers keep their cost of servicing down. From acceptance methods to customize messaging tools to automated servicing transfers, it's easy to enable better borrower experiences with REPAY. We found from our recent internal consumer perception study conducted by Visa that more than half of consumers are interested in using a debit card to pay their mortgage bill. In addition, our conversations with existing and prospective clients indicate strong demand for additional payment modalities within the mortgage vertical. Our partnership with Black Knight to offer a truly differentiated capability continues to progress, and we are teaming with Visa to align our growth force in new payment flows of the future. On the product side, we're excited to announce that we are adding PayPal and Venmo U.S. digital wallet services to our suite of payment solutions, making them available to clients across REPAY's verticals. With the addition of these digital wallet capabilities, REPAY's clients will be able to accept payments using funds from customers' PayPal and Venmo accounts, enabling secure and convenient payments and eliminating long payment forms. This additional offering is designed to help clients boost their overall revenue, as companies have found that supporting preferred payment methods makes customers likely to make more payments on time. Our Instant Funding product, which we process in real-time through Visa Direct and MasterCard Send, continues to perform strongly. In the first quarter, transaction volumes were up approximately 45% year-over-year. Lastly, our modern RCS platform continues to take share and received a positive reception at the most recent Electronic Transactions Association Conference. We recently announced that MiCamp Solutions has selected REPAY as its back-end clearing and settlement processor. We were selected due to REPAY's ability to deliver customizable and comprehensive solutions while also providing an increasingly important operating model with banking and transaction processing redundancies. Moving on to our Business Payments segment, during the first quarter, Business Payments gross profit grew single digits year-over-year. Our net new growth was impacted by lapping political media spending, implementation timeline delays, and a large client being acquired. Exiting the quarter in March, we saw positive momentum. Additionally, our sales pipelines remain as robust as ever. Our integrations with dealer management systems and hospitality management systems are leading to shorter sales cycles with larger clients. During the first quarter, we went live with previously announced LifeBridge Health in the Baltimore area and signed several large hospital systems within the healthcare vertical. In the property management vertical, we are adding hotel properties, driven by our recent integrations with HelloGM and HIA. And in the municipality vertical, we recently onboarded a large county in the Northeast with a multibillion-dollar annual budget. During the quarter, we continued to increase our internal sales and account service teams to further penetrate this massive business payment market. We added four integrated software partners during the quarter and are now integrated with 94 in total. One of our new technology integrations was with Optima, a software and services firm specializing in providing IT consulting and digital transformation solutions. The integration will enable Optima's customers to further streamline accounts payable processes and securely pay vendors and suppliers directly to Optima's intelligent accounts payable automation solution. We are adding a technology integration with Microsoft Dynamics 365 Business Central, enabling Dynamics customers to send and automate accounts payable payments through the REPAY platform. This integration aims to streamline operations, improve relationships with vendors and suppliers, and support the evolution of businesses moving towards overall digitization. Additionally, we continue to build our vendor enablement functionality, now reaching over 174,000 suppliers in our accounts payable supplier network. And we're consistently looking for ways to find processing cost synergies in the business. In March, we began realizing the cost savings from a strategic initiative to consolidate processing of business payments volume. So, as you can see, a busy and productive quarter for the team across consumer payments and business payments. We remain focused on executing our strategy as we see an incredible amount of organic growth opportunities while also continuing to monitor the M&A landscape and related valuations. REPAY is currently well positioned with a strong balance sheet and growing profitability to accelerate cash generation while maintaining the potential for strategic M&A. To wrap up, before turning the call over to Tim, I am proud of our progress we have made so far this year. Our sales pipelines are strong and growing. We have new products rolling out as we speak that we believe will drive new and existing client adoption. We also have one of the best teams in the industry that believes in our mission and is excited about the road ahead. With that, I'll turn the call over to Tim to provide more color on our results and updated thoughts about the remainder of the year.

Thank you, John. Now let's go over our Q1 financial results before a review of financial guidance for 2023. In the first quarter, REPAY delivered solid results across our key metrics. Card payment volume was $6.6 billion, which was impacted by tax refunds being down approximately 10% this year. Revenue was $74.5 million, an increase of 12% on an organic basis over the prior year first quarter. This represents a take rate of approximately 113 basis points. Take rates were higher primarily due to lower average tax refund amounts in 2023 versus prior years, resulting in lower repayment volumes typically experienced during tax refund season. In addition, we had strong performance in several of our non-card volume-based businesses within Consumer Payments, specifically in Communication Solutions and Instant Funding. Incremental revenue attributable to Blue Cow in Q1 2022 was approximately $0.9 million. Gross profit was $56.6 million, an increase of 13% on an organic basis. This organic gross profit growth removes approximately $850,000 of incremental gross profit attributable to Blue Cow in Q1 2022. Our Consumer Payments segment reported an organic gross profit growth of 17% in Q1. As John mentioned, we saw continued strong growth from existing clients and recent large client implementations. Our Business Payments gross profit increased 2% year-over-year. Business Payments net new growth was offset by lapping political media spending during the '22 election cycle, delays in implementation on the client side, and lower volumes from a large client who started consolidating payment providers after being acquired. Exiting the quarter, Business Payments gross profit growth, when excluding media, accelerated, demonstrating the ramp in our sales pipeline while realizing the benefits from our processing cost optimization and automation initiatives. First quarter adjusted net income was $19.2 million or $0.20 per share. Lastly, first quarter adjusted EBITDA was $31.2 million. First quarter adjusted EBITDA as a percentage of revenue was 42%. Adjusted EBITDA margins came in lower than expected due to this year's tax refund seasonality, resulting in higher revenue take rates, along with continued investments towards sales, product, and technology. For the 15th consecutive quarter as a public company, on an organic basis, REPAY has surpassed the rule of 40. We continue to believe that the combination of double-digit organic gross profit growth, along with best-in-class adjusted EBITDA margins, makes us unique compared to our peers. Our net leverage is now approximately 2.8x on a pro forma basis. We expect our net leverage to naturally decline during the year from our strong profitability and cash flow generation, excluding any potential M&A. As of March 31, we had approximately $92 million of cash on the balance sheet with access to $185 million of undrawn revolver capacity for a total pro forma liquidity amount of $277 million. REPAY's debt of $440 million is convertible with a 0% coupon and does not mature until February 2026. Moving on to our outlook for 2023. Our year-to-date results remain resilient. Based on the current macroeconomic uncertainty, we are reaffirming our 2023 outlook. We expect volume to be between $26 billion and $27.2 billion, revenue between $272 million and $288 million, gross profit between $216 million and $228 million, and adjusted EBITDA to be between $122 million and $130 million. As we talked about on our Q4 call, the growth implied by our 2023 outlook assumes a mild to moderate recession. As we previously mentioned, organic growth is expected to be slightly higher in the first half of 2023 due to tough comps in the second half of the year while we maintain the normal cadence of quarterly contributions. As a reminder, we will be lapping strong results in our Business Payments segment due to the political media cycle in 2022. For additional details on 2023 organic gross profit growth, please refer to the 2023 outlook bridge on Page 12 of our earnings supplement posted to the company's IR site. We continue to expect adjusted free cash flow conversion to remain strong in 2023, accelerating throughout the year into 2024 as we realize the benefits from investments we have made in sales, product, and technology over the past several years. We're off to a strong start in 2023 and look forward to continuing this momentum throughout the remainder of the year. I'll now turn the call back over to the operator to take your questions.

Our first question comes from Ramsey El-Assal with Barclays.

Congratulations on a solid quarter. Your take rates in consumer were up, particularly in consumer, were up really nicely. Can you comment a little bit on some of the levers or the drivers there in terms of how you achieved that?

Absolutely. Thanks, Ramsey. So we agree it was a strong quarter for consumer take rates. There are a couple of factors there. Some of it was due to tax refund season being a little different this year than prior years. Overall average refund sizes were down. And when that happens, we have a certain pricing model called convenience fees where it would be a higher take rate based on lower average refund amounts. So that was actually the opposite of what occurred last year in Q1. So we experienced the difference this year. Additionally, there are some non-card volume-based products like communication solutions and Instant Funding that just performed really nicely in the quarter and those increased the take rates primarily in consumer as well. Those are a few drivers.

Great. A follow-up for me is on the business segment gross profit, which, as you mentioned, was impacted by a couple of factors. How should we think about those factors impacting Q2? In other words, has that large client roll-off completed? Or are you going to see some of that implementation catch-up next quarter? How should we think about those factors kind of impacting the segment as we go forward here?

Yes. As we mentioned, we saw faster growth exiting the quarter in March. I think some of the implementation delays have caught up. The new client roll-off will continue into the quarter but should be completed in Q2. We have some new wins as well that will be ramping. I think the combination of those led to higher growth in March, and we expect that to continue into Q2. So there were some specific factors to Q1.

Our next question comes from the line of Peter Heckmann with D.A. Davidson.

Congratulations on securing another OEM captive lender. Can you discuss the recent win with the captive lender this quarter and how it compares to the private lender from last quarter? Additionally, could you provide some insights on the size of the auto OEM deal in relation to your other OEM clients, such as Mercedes?

Yes. Mercedes was the OEM we secured a few years ago. Last quarter, in Q4, we announced a private auto captive, which is not technically an OEM, but rather a significant privately held captive auto finance company. In Q1, we announced another large entity that I consider to be more comparable to Mercedes, a well-known household brand. While we do not anticipate a substantial contribution for the remainder of 2023, we expect a significant contribution to growth in 2024 as the business develops throughout this year and reaches full capacity next year. This will have a notable impact for us in the years to come.

Okay. That's great to hear. Just any additional comments that you can provide in terms of how you're talking to your customers on the lending side, both personal and auto, like what type of changes they might be making in terms of their appetite or pricing that may or may not impact originations?

Yes. Similar trends, as we mentioned last quarter and as we've heard from some of the lenders that have reported already this quarter, in some of our conversations with private lenders, they're still focused on managing their credit performance. They're cautiously optimistic about loosening underwriting standards, which are still pretty tight. So they're not opening up originations. But again, we've said this before that there's a lot of demand for this type of credit. The demand being there is one of the more critical points for us. As lenders get more visibility and feel a bit more comfortable, we think they'll open up to originations and fund that demand. So not really different from last quarter. We had a large win in the personal loan space that we talked about last quarter, which ramped up in Q1, and that's been positive as well.

That's great. Just one housekeeping item for the second quarter for Blue Cow. Would that be about $2.5 million in revenue in the prior year period?

Yes, roughly $2.5 million that we'd have to pull out of Q2 of '22. That's right.

Our next question comes from the line of Andrew Schmidt with Citi.

I wanted to just drill down for a second on the Business Payment segment. The large client roll-off, could you talk a little bit more about the situation there and whether you think that was relatively unique or a potential one-off? Just a little more color around that situation would be helpful.

Andrew, it's John. We think it's unique. It's obviously, it's an account that got acquired, so that's kind of out of our control. We really think that's unique. We feel great about the pipeline of what we have and the opportunities in the business side of it. That's as wide-open spaces I've seen in payments, and all the reasons we want to be in that space and all the reasons we want to invest in that space remain true. We mentioned a couple of things about our implementation pipeline slipping on us, but we saw some of that activity pick up in April. We feel good about executing on the remainder of our year in that implementation pipeline.

Got it. Just on the Consumer Payments segment, pretty strong growth there. Have you seen any signs of the mild to moderate recession? What's the current assumption for how you're expecting the growth rate to progress throughout the year?

Yes, absolutely. We were very pleased with the Consumer Payments growth in the quarter, really strong, and we have seen strength continue into early Q2, but we want to stick with the planning assumption of a mild to moderate recession. We are seeing that in some of our end markets like auto, for example, has probably already been in that type of macro environment for a few quarters. That's why we think it's prudent to remain conservative. That being said, we do think that growth in consumer could still be strong next quarter, but the back half of the year is where you may see that macro come into play. We're just maintaining conservatism around that.

Our next question comes from the line of Sanjay Sakhrani with KBW.

This is actually Stephen Kwok going in for Sanjay. Just first question I have was just a follow-up around the last question. If conditions were to remain the same as currently, how much of the differential would there be between your current outlook and where it could potentially be?

Yes. I think we're monitoring it closely. If things continue to stay as they are and don't deteriorate, I think we could become incrementally more positive on the outlook for the year and would update folks as we report each quarter. A mild to moderate recession is probably high single digits, low double digits, and mild is more like low to mid-teens. We could see potentially moving somewhere in the middle of that range if we became incrementally positive with more visibility into the macro.

Got it. Then the follow-up I had was just around the take rate, trying to dive a little deeper. If we look at your full year guidance, it works out to about 105 basis points versus the 113 that was in the first quarter. What are the puts and takes that get us to that 105 range?

Yes, good question. So it will come down, and a lot of it is due to seasonality related to tax refunds. There were some dynamics that I just described that caused the take rate to be higher. We ramped a very large enterprise customer in Q1, and as we discussed when we provided the guidance originally, enterprise customers could have a lower take rate. So as that becomes a bigger contributor, it could bring the take rate down. There's also potential for B2B becoming a bigger part of the mix, and that take rate is slightly lower. Those are some of the items we would look at that essentially bridges the 113 to the full-year 105 or 106.

Our next question comes from the line of Andrew Jeffrey with Truist Securities.

I appreciate you taking the question. Great to see the enterprise momentum. John, can you just comment on whether or not as you go after some of these bigger customers, sales cycles are extending? It sounds like you have a good ramp with this big captive in auto next year. But generally, does the business get lumpier in your estimation? Is that something we need to think about? Or is this all upside?

Andrew. Yes, it should be upside. We just had a large win that implemented in the first quarter this year. We would hope just because of implementation cycles with large enterprises, it takes time to win them and implement them. That will contribute in '24, helping to offset what's happening in '23. I suspect if we continue to execute as I expect us to, and I see our sales pipelines, we should continue to be able to execute there. Enterprise, as we've mentioned in the past, takes time for those things to roll around if they are under contract. We have more opportunities. We're investing more. We see those opportunities for that. We think that will deliver. We see evidence of those things in both the Consumer Payments and Business Payments.

Okay. Helpful. On RCS, can you characterize the type of business you're winning there? Is it mostly traditional IO? I recognize it's all incremental. It seems like it's helping margins. Can you just talk about what that looks like and maybe how it might impact your consolidated EBITDA margin going forward?

What it looks like... I’ll talk about that part and Tim can talk about margins. It's unique processors that we are able to give several capabilities, making their ability to execute on their strategies unique. They might have their own technology, their own gateway, and we're just helping them clear and settle with all the money movement and the money flows. Many in that world are potentially in various different types of e-commerce verticals where we aren't specifically involved. We've been fortunate to build an amazing platform that we think is state-of-the-art for 2023. We're getting lots of inbound interest. We're able to strategically partner with those we think have high growth potential as great partners. I'll let Tim talk about contribution and margins.

What we typically see is a midsize to larger ISO type of customer working through one of the larger processors who wants more control of their own ecosystem. They want to become more of a full-service processor. They want access to banks and have more control over running their own businesses. We can customize that and provide redundancies. What happens is they'll bring volume and transactions to us as part of conversion and eventually, hopefully, we get all the business. That also takes time to convert. It's the typical type of customer and conversion. It is really nice margin business and performing well. We were just at the Electronic Transactions Association and have a really nice pipeline coming out of that. It's been a great growth driver for us.

Our next question comes from the line of Bob Napoli with William Blair.

This is Adib Choudhury on for Bob. You touched on a bit in some of the earlier questions, but directionally, could you provide some comments on business trends more broadly in the month of April and May so far?

Yes. April in the consumer space started strong. Some of the tax refund dollars maybe fell over into April, which is not overly surprising with late filers. That helps the consumer side. We fully implemented the large personal lender, and that will benefit us for a full quarter in Q2, which has been good. We've seen positive trends in the consumer side. In Business Payments, we've completed implementations of some larger wins that we talked about, providing strength exiting the quarter and into early Q2. We're seeing positive trends with that as well. There's a very strong sales and implementation pipeline in business payments that will continue to ramp throughout the quarter into next quarter.

Just a reminder on two things: As we've talked about before, we do have some political media we're lapping. We've mentioned previously that Blue Cow will be out of the second-quarter numbers. As all of you know, the first quarter is our high seasonal quarter, and the second quarter can obviously seasonally be less than the first quarter from an overall volume perspective. I just want to mention a couple of those things.

Yes. Appreciate that. And as a quick follow-up, I guess, bigger picture, REPAY has made a bunch of acquisitions in the B2B payment side. Could you just more broadly talk about some of your learnings as you've integrated these deals and kind of going back to your confidence in terms of the ability to deliver 20% plus growth in B2B longer term?

If you look at normalized growth, less the political media spend in even years, we believe that it still exists, and we're seeing it. We're seeing it in the wins that we're looking at. We're seeing it in our pipelines. The evidence indicates that we were right, and we’re excited about that part of our business. Obviously, consumer remains a large part of our business, growing fast. So it's hard to catch it from that overall total volume mix, but we like the business. The verticals we're driving down, as we've talked about on the call—in hospitality, municipalities, and hospitals—are seeing lots of opportunities in a large addressable market still well underserved. Digital transformation is happening, and we believe we have one of the best-in-class technology solutions with our TotalPay solution in the marketplace. We'll continue to expand that, different ways people want to pay and get paid, and our ability to execute by truly understanding money flows. We believe we have a winning formula.

Our next question comes from the line of Timothy Chiodo with Credit Suisse.

I want to circle back to the announcement you made a few years back, featured on your growth plan Slide 17. I know it's a smaller part of the business but I was hoping you could give an update on your partnership with Veem in B2B cross-border and how it's helped your business—whether in winning clients or volume, or just a broader update on that partnership? And then I have a quick follow-up on the gross profit guidance.

Veem is a nice company, and we have a strong relationship with them. They do a good job. Specifically for us, we do not have significant cross-border activity with many of our large enterprise clients. They're more domestic than international, and that's why we haven't seen tremendous growth in the cross-border side. It is a piece of our product suite that allows us to be competitive in the marketplace. As some of our large enterprise clients continue to expand, we will see more opportunities, particularly into Canada. But overall, it remains not significantly meaningful in cross-border.

Absolutely. Okay. And then this one is for Tim, as a follow-up. So just on the reported numbers, not adjusted for the media spend comp that’s tougher in Q4, is it fair to assume that the guide right now may be conservative, and because of the macro impacts you're embedding, the absolute growth is more in the low single digits? If we added in the media impact, it would imply an underlying exit rate in maybe the high single digits for this year. Is that a fair recap?

Yes. If you look at Slide 12, there are three ways to think about growth. There's the reported number, which is probably mid-single digits. The organic number, which excludes Blue Cow, which gets us to high single digits, and the normalized organic, which excludes Blue Cow and the political media impact, which gets us to low double digits. That's how we build up to it—similar to when we originally reported guidance.

Completely, Tim, I appreciate that, and this slide is really helpful. I was actually talking more specific about Q4 and the exit rate, not the full year...

We think the Q4 exit rate would probably be high single digits and then normalized for political below double digits. We would add, for example, the large captive auto client that we're rolling out next year, which we think will be incremental to those numbers. This will be a big factor in Q4.

Our next question comes from the line of Joseph Vafi with Canaccord.

I just wanted to circle back to the auto vertical. You've had some good success over the last few quarters. It begs the question on how your solutions—how penetrated are the solutions that you're providing into the auto OEM sector? Should we think there are potentially more of these in the pipeline?

We are winning based on our technology, product, and solutions, along with our omnichannel experience. The consumer demands convenience and quality, and we can deliver that with our technology and expertise by vertical. We have to be competitive from a pricing perspective. We own clearing settlement engines, and if we want to win, we can win. We see more opportunities out there. The very largest usually take time, but we have reason to believe more opportunities exist.

Great. Then just drilling down again a little bit more on this PayPal and Venmo integration. Could you discuss how unique this is in the market versus competitors? And how are customers receiving the integration of those wallets?

We are enhancing our existing loan management system integrations to give us growth opportunities. Consumers would like multiple ways to pay. We're rolling out and enhancing features and functionalities, and we see good demand. This is going to lead to new organic opportunities, and we think that will help convert existing clients into more of a digital solution, which will be important given the market.

Our next question comes from the line of Charles Nabhan with Stephens.

Some of the more recent wins in auto, particularly Mercedes, would imply more of an upmarket SKU from a credit standpoint. With that in mind, could you comment on the overall exposure within auto across the credit spectrum?

We are clearly trying to go upmarket and have been successful there. We process for lenders across the credit spectrum, but we are focusing more of our efforts on prime type borrowers. The focus has been to secure enterprise accounts, leaning towards that profile moving forward.

As a follow-up, I know you broke out the gross profit impact from Blue Cow. In terms of volume impact within business, could you give us a sense for the impact of the client acquisition as well as Blue Cow? How should we think about organic growth from a volume standpoint within that business?

Blue Cow is on the consumer side. When we broke that out, it contributed to the difference between the reported and organic growth. There will be about $2 million to $2.5 million of revenue in Q2 '22 that we would need to factor out. We don’t want to get too specific on the large account, but it would probably be at least a few points of growth lost because of that. You can see how this will impact the exit rate going into Q2.

Our next question comes from James Faucette with Morgan Stanley.

I had a couple of follow-up questions on topics you've already addressed. First, on B2B. You mentioned a large client rolling off. Can you remind us what your customer concentration might look like? How should we think about the risk of additional churn there?

We're pretty diversified, so there's not really a concentration risk. This was a unique situation where a private equity firm bought a few companies and consolidated processors. It was several points of business payments growth lost as a result, but there's not a significant concentration risk, and we're not aware of other losses like this.

Got it. And then on credit unions, you mentioned in the press release that you're seeing continued strength with credit unions, it was quoted up about 20%. Can you remind us how that ties into some of the other verticals?

The strength was partially due to some auto lending moving out of traditional auto finance into credit unions, given that credit unions tend to offer lower rates. We continue to see strength in credit unions, even as we've seen some issues with regional banks. They have a strong member deposit base and loyalty from their members, which supports originations for new loans.

Our next question comes from the line of Mike Grondahl with Northland Securities.

Two things: Any changes on the competitive front to call out or any increased intensity? And then secondly, you mentioned M&A have you seen valuations come down in the private market where that's more interesting?

On the M&A side, we have a strong balance sheet. We're continuing to be very profitable and building our cash position for multiple opportunities in the event we find them to be strategic. We have seen entries back into the market, and we’re seeing multiples come down. We'll continue to see more opportunities as the year progresses.

From a competitive standpoint, it hasn’t changed much. We see some similar names on the consumer side. As we enter new sub-verticals within B2B and AP, we may encounter new competition, just because there are players already present in those segments. The way we win there is by gaining software relationships in AP sub-verticals and building our supplier network.

Ladies and gentlemen, this concludes the question-and-answer session. I'd like to turn the call back to John Morris for any closing remarks.

Thank you. We are very pleased with our first quarter results. We remain focused on executing our strategy as we see incredible amounts of organic growth opportunities, and we'll continue to invest in those. We will continue to execute our operational efficiencies as we expand our sales pipelines, and we'll continue converting on our implementation pipelines as well. I look forward to speaking with you in the next coming weeks. Thank you very much.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.